Airline Shrinkage: Finding the Sweet Spot, a Biggest Challenge this Fall

With fewer options and less services, passengers may face some inconveniences this Fall.

Before heading for a vacation in fall, make sure that you get that sweet corner you are looking for. According to data compiled by OAGback Aviation Solutions, there has been an 8.1 percent drop in domestic seat capacity and an 8.9 percent decline in flights. Together these numbers represent the biggest contraction in the industry since 2001 and a potentially game-changing challenge to both the airlines and their passengers.

As far as airlines are concerned, it’s all about parking planes, cutting flights and slashing unprofitable routes in an effort to raise fares. But, are passengers willing to pay more for fewer services and greater inconvenience? “There are all these thousands of changes all over creation, but it’s not clear to the public what the changes are,” says industry consultant Bob Harrell. “People are used to choices — flights, timing, number of stops and they’re finding that those choices are no longer there.”

Earlier, due to intense competition many flights to vacation destinations used to keep their fares artificially low. Now, cuts are being implemented nationwide, as airlines trim service to small and medium markets. Like on September 2, ExpressJet will cease its branded operations altogether, eliminating service to Sacramento, San Antonio and 22 other cities. Other airlines are also implementing similar, albeit less extreme, cutbacks. By the end of the year, the Big Six legacy carriers will likely cut anywhere from 10 to 14 percent of available seats on domestic flights by the end of the year, and even Southwest and JetBlue have scaled back their expansion plans.

Now finding good deals and sweet spot between the supply of seats and the demand from those who’d fill them is more challenging than ever. “I’m not sure we’re out of the woods yet,” says Parsons, citing the possibilities of both more cutbacks and more deals. “Some destinations will have great airfares; some will have reasonable airfares; and some you’ll just want to avoid.”