For Immediate Release November 8, 2005
AQR researcher: Holiday air travel forecast calls for crowded skies and higher fares
Having about 50 percent of the U.S. airline capacity in bankruptcy isn’t necessarily cause for concern when traveling this holiday season, according to Dean Headley, co-author of the national Airline Quality Rating and associate professor of marketing at Wichita State University.
Even though the airline industry is losing money, it is in an extremely competitive mode and continues to offer safe reliable transportation. Holiday travel prices are higher than last year, but some good deals may be available at the last minute, especially if you book online.
“Most airlines continue to have revenue problems brought on by continued high fuel prices,” said Headley. “With the low-fare carriers setting the price in many markets, good prices are available but hard to find. Overall capacity reductions by airlines have resulted in fewer seats available system-wide than a year ago. People can find some decent travel prices if you’re willing to have a little flexibility on schedule, routing, and airline loyalty.”
Traffic volumes are generally strong. Approximately 110 million people flew somewhere in the United States during November and December 2004. That number for 2003 was 102 million. With a stronger overall economy and intense fare competition among carriers, indications from the first six months of 2005 are that passenger traffic will be strong for 2005 holiday travel. Even with higher prices, Headley predicts this year will be the busiest holiday travel season since 2000. Airports typically experience the busiest travel volumes of the year between Thanksgiving and New Year’s Day.
The holiday traveler should expect full airplanes and fewer options. Airlines are trying to squeeze as much revenue out of each flight as possible and full planes are a must, according to Headley. Travelers will also find that flight schedules have been cut back, with nearly all airlines reducing the number of flights and destinations offered. The reduced schedules are designed to have fewer seats available and to have those seats priced higher. It is the classic effort to use supply and demand to achieve a price that yields higher revenue from flight operations.
Worried about a canceled flight ruining the holiday? Headley says that’s always a possibility when traveling in winter weather, but “airlines are going to push hard to make the flight happen. All airlines need the revenue that full airplanes bring. They are not going to cancel a flight unless it is absolutely necessary.”
Some history and travel tips:
• Last year’s on-time arrival percentages for November (79 percent) and December (72 percent) should be good indicators of what to expect this year. These on-time statistics mean a traveler will have more than a one in five chance of being delayed this holiday season.
• Historically, denied boardings (being bumped from a flight involuntarily) increase in the last months of the year. With more people traveling and having a need to be somewhere for the holiday, schedule flexibility often disappears. The industry practice of overbooking becomes a larger problem to manage for the airlines and for travelers to understand and tolerate.
• Typically, mishandled baggage rates are at their highest in December and January. Checked baggage is usually the best option unless, of course, it doesn’t arrive when and where you arrive. A little back-up packing in your allowed carry-on may be advisable. Most airlines have a carry-on policy of one bag and a purse or briefcase. Checked bags seem like a hassle, but checking bags generally reduces stress and helps minimize the time it takes to get through security checks. Don’t forget about the weight limit for each piece of checked luggage. Consider express shipping extra luggage or sports equipment to avoid problems.
The Airline Quality Rating report combines the performance elements of on-time arrivals, involuntary denied boarding, mishandled baggage, and customer complaint rates into a single performance rating score. When looking at the industry AQR scores for past years, the months of December and January are consistently the worst months for airline industry performance on these combined elements. Looking at the AQR scores for December 2004, the worst performers were Atlantic Southeast and COMAIR. The best performers in December 2004 were AirTran and Jet Blue.
Security is always a concern during any holiday season. Current restricted numbers of TSA personnel are likely to be overwhelmed. They are under-staffed and have little flexibility to handle spikes in travel volumes. Headley suggests, “Arriving early at the airport is a good practice, especially during the holidays. More people, tighter security, and uncertain weather add time to the process of air travel.”
Send your holiday packages ahead of time rather than carry them on the airplane or check them at the airport. If you do take them with you, remember to leave them unwrapped for security inspection. Security doesn’t have a problem with packed wrapping paper, but they do with wrapped packages.
Finally, pack patience. Stepped-up security, weather delays and busier airports filled with holiday travelers will add time and hassles to your trip. Don’t let a short fuse or things beyond your control ruin the spirit of the holidays.
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Note: The Airline Quality Rating is co-authored by Brent Bowen, director of the Aviation Institute at the University of Nebraska at Omaha and Dean Headley at Wichita State University. The report on airline performance quality is published annually. A report detailing performance for 2005 is scheduled to be released on April 3, 2006.
Contact: Dean Headley, (316) 978-3367 or dean.headley@wichita.edu. For current and past AQR reports, please visit www.aqr.aero.