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Fewer planes, fuller cabins, disappearing deals

Flying this fall? If so, you may want to bring some extra deodorant, a current OAG Pocket Flight Guide and plenty of whatever stress-reliever best gets you to your happy place.

Flying this fall? If so, you may want to bring some extra deodorant, a current OAG Pocket Flight Guide and plenty of whatever stress-reliever best gets you to your happy place.

The first is for the very full flight you’ll probably be on. The second should help with alternative options if that flight is delayed, canceled or otherwise unavailable. And the third will come in handy when one (or both) of the above is about to push you ever the edge.

Fewer flights, fewer options
Last year, it was the jolt of high oil prices; this year, the aftershocks of the recession. Regardless of the proximate cause, the response has been the same — a concerted pulldown of U.S. airline capacity between September and December.

According to OAG Aviation Worldwide, there will be approximately 307 million seats available on U.S. airlines during the period, a drop of 3.6 percent from the year before. Although smaller than the cut between 2007 and 2008 (8.1 percent), the cumulative effect is still substantial.

In fact, based on scheduled Available Seat Miles (ASM), a standard measure of airline capacity, only two of the 10 largest U.S. carriers increased their fourth-quarter capacity over the last two years, according to the Air Transport Association or ATA. (That would be AirTran, up 3.9 percent, and JetBlue, up 0.6 percent.) The other eight all posted significant drops, with American (down 12.5 percent), United (down 14.2 percent) and Frontier (down 16.2 percent) leading the plunge.

The impact on airports has been equally severe. All 67 of the FAA’s “Large” and “Medium” hubs, says ATA, have lost some scheduled service over the last two years. Based on scheduled departures, the hardest hit have been Cincinnati/North Kentucky (down 41.6 percent), Ontario (down 36.3) and Oakland (down 34.2 percent). Other painful cuts include Orlando (25.9 percent), LAX (17.2 percent), O’Hare (9.6 percent) and DFW (5.3 percent).

For passengers, of course, the contraction means fewer choices and less flexibility, but it’s seen by industry analysts as the only viable response to the recession and years of billion-dollar losses. “By the end of the year, capacity will probably be down 12 percent,” says Mike Boyd of Boyd Group International. “The airlines have finally begun to cut capacity faster than the recession has been killing demand.”

Fewer planes, fewer empty seats
In the meantime, the continuing supply squeeze has already led to some of the most crowded cabins in recent memory. In July, the Big 5 legacy airlines all posted load factors of 87 percent or higher. Although slightly lower at 84 percent, Southwest was up seven percent from the year before, while Frontier hit a record 92 percent. And those are fleet-wide averages, which suggests many flights didn’t have a single empty seat.

So far, that hasn’t led to higher fares (although that’s obviously the airlines’ goal). In early August, the average domestic airfare for fall travel was $229, according to Joel Grus, “Fareologist” at Bing Travel (formerly Farecast), down 16 percent from the year before. Fares for several Florida destinations are down 13 percent or more, while those for Milwaukee, New York (LaGuardia) and several destinations in Mexico are off 24 percent or more.

The gap will likely shrink later in the year, reflecting last year’s sudden fall-off in prices, the recent easing of the recession and an expected uptick in business travel. “October is the biggest single month for business travel,” says Bob Harrell of Harrell Associates. “It’s got 31 days; it has no major holidays, and it’s the time of year when people are either scrambling to get things done for this year or make plans for next year.”

For passengers, then, the upshot is gradually strengthening demand for a steadily shrinking supply of seats. That not only means more full planes and potentially higher fares, but also fewer options when things go wrong. And while the odds of getting bumped remain statistically tiny, the chances of finding a quick replacement flight will almost certainly get worse. (That’s where the Pocket Flight Guide comes in handy.)

For the airlines, the prognosis is somewhat better as they may have actually managed their way through some of the most challenging times in the industry’s history. U.S. airlines will probably lose $2.5–$3 billion this year, says Vaughn Cordle of Airline Forecasts, but the combination of less capacity and higher load factors should mean better yields and more stability going forward.

Assuming, that is, they can maintain capacity discipline (and large enough cash reserves to make it through the winter); oil prices don’t go too high, and traffic starts to pick up as people feel more comfortable about the economy. “If there’s no recovery, you’ve got airlines defaulting,” says Cordle. “With a mild or even weak recovery, they make it through.”

High fares or low, full planes or not, that’s a good thing for all concerned.

Rob Lovitt is a frequent contributor to If you'd like to respond to one of his columns or suggest a story idea, .