With Labor Day weekend fast approaching, we're seeing a bunch of end-of-summer laments about how bad airline service has been this summer - worse, in some cases, than even the dire expectations from last May. The news coverage all says pretty much the same thing: the airlines fired too many people, use too many narrow-body planes, and pack their schedules so tightly that even a minimal weather delay makes the system go kablooey. Ordinarily, the marketplace shouldn’t let this happen. If your computer or automobile break down frequently and you receive little or no assistance from customer service, there’s a good chance that the next time you’ll try another brand. But the New Yorker's James Surowiecki observes that the airline business is different.
In part, this is because, for many trips, there’s no meaningful alternative to flying, which limits the power that fliers have as customers. They can make certain choices—they consistently go for the cheapest flights, making it hard for an airline to raise prices—but anyone who vows never to fly with a particular airline again will likely have an equally bad experience on a rival carrier soon afterward. Like consumers of regional utilities or like drivers who tolerate bad traffic day after day, fliers have accommodated themselves to misery. It’s little wonder, then, that the air-travel market rarely punishes an individual airline for failing to get people to their destination on time: consumers assume, with good reason, that the options are interchangeably awful.
The airlines could improve the current system by investing more money in planes and staff, reducing the number of segments each plane flies in a given day, and increasing the number of direct flights. So you might expect that free-market competition would have thrown up at least one major airline promising reliable on-time arrivals in exchange for higher ticket prices—like a toll road in the air. The trouble is that although things like bad weather and air-traffic-control problems are easy excuses for the airlines’ failures, they’re also real problems, and any airline dedicated to keeping its on-time arrivals high could easily find its efforts, in the short run, stymied by storms or by high volume.
In other words, writes Surowiecki, "we’re stuck with the current system, because it isn’t really in any airline’s interest to try to change it. As long as no airline makes a dedicated effort to distinguish itself from the pack, all the airlines can stay lean, even at the expense of quality." Marketing-wise, it's not exactly a claim to fame, but at least it would be truth in advertising.