When Airlines Get Nasty, Travelers Get Crafty

By any measure, it's been an awful couple of years. While the recession—two consecutive quarters of negative GDP growth, according to economists' definition—may be behind us, its painful effects will linger for years to come.

Perhaps no group has suffered more than the airlines. No group, that is, except their customers.

To an uncommon degree, the fortunes of travelers rise and fall with the fortunes of the airlines that serve them. And the fortunes of the airlines have been dismal indeed.

As a group, five of the nine largest U.S. airlines posted 2009 losses totaling almost $4 billion. American, which lost $1.5 billion in 2009 and $2.1 billion the year before, warned in its latest annual report that "it will be very difficult for the Company to continue to fund its obligations on an ongoing basis and to return to profitability if the overall industry revenue environment does not improve substantially."

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Such dire shareholder warnings arguably should be accompanied by comparably grim warnings to passengers, who have borne the brunt of the airlines' desperate measures to restore profitability. The airlines have been similarly derelict in suggesting ways to minimize the pain they've inflicted on customers.

Loads High, Comfort Low

Load factor is an industry metric depicting the average percentage of seats occupied across an airline's network of flights.

To airline managers, it's a measure of efficiency—the higher the load factor, the better they've aligned the supply of seats with the traveling public's demand for them.

To flyers, it's a measure of discomfort—the fuller the plane, the longer the boarding process, the more cramped the seating, and the more intense the battle for space in the overhead storage bins.

And planes have been flying very full lately.

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According to the DOT's Bureau of Transportation Statistics, the load factor for all U.S. passenger airlines was 72.9 percent in 2000, exceeding 80 percent only during the summer months between June and August.

For 2009, it had soared to 79.1 percent overall, and stood at a record 81.1 percent for domestic flights. The three largest mainline carriers—Delta, American, and United—all flew more than 80 percent full during the year.

What to do - If you're claustrophobic or flying long distances, try reserving a seat in an exit row, which features more legroom. (Extra fees apply, natch.) If you fly often enough, it might be worthwhile paying $425 for an annual subscription to United's Economy Plus, with up to five extra inches of legroom. Or use frequent flyer miles to upgrade to first class.

"Sorry, Sir, You've Been Bumped"

Among the desperate measures that go hand in hand with the airlines' financial desperation is overbooking, the practice of accepting more reservations for a given flight than there are seats on the plane. To adjust for expected no-shows, overbooking is a common practice, and perhaps even a rational one. The extent to which airlines overbook, however, varies with the times.

While sophisticated computer models have allowed the airlines to reduce their reliance on overbooking in recent years, they've resorted to more aggressive overbooking as the economy has floundered, choosing to risk higher compensation costs and negative public relations in order to keep planes flying as full as possible.

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