Why U.S. Airline Service is So Bad

 |  Includes: NWA, UAL, UAUA
by: Felix Salmon

Pico Iyer wants to know why U.S. airlines are so crap – why "a place in Northwest’s (NWA) business class has afforded me less comfort than a seat in the economy class of the national airlines of Bolivia, Cuba and even North Korea". John Gapper thinks it has something to do with "the refusal of airlines to lie down and die" – certainly I don't think the big U.S. government airline bailout in the wake of 9/11 did any favors to the travelling public in the long term. But I think that the answer to Iyer's question is actually hidden in his own post, when he tells us that United's (UAUA) frequent-flier program "is more generous than it has to be".

Note that the centerpiece of Iyer's complaint is an abortive trip from California to Japan, one where Iyer turns out to be quite happy being rebooked on Japan's ANA rather than having to fly on United with his original booking. The question naturally arises: if United is so crap, why was he booked on them in the first place? And the answer presents itself: the frequent-flyer program, which, like most U.S. airlines' frequent-flier programs, has developed a life of its own.

America, it seems, has been successfully captured by the U.S. airlines, to the point at which most U.S. residents simply don't fly on any other planes. If you're a Brit, and you're flying abroad, you'll generally choose the cheapest and most convenient flight, no matter what class you're travelling in and no matter whether you're flying for business or pleasure. If you're an American flying abroad, by contrast, you'll almost certainly end up flying an American airline.

When I used to fly from the U.S. to Latin America every so often, I'd generally fly the local airlines to get down there: Lan, Aerolineas, Varig. None of them were spectacularly good, I must say. But one thing which jumped out at me was the fact that there were almost no Americans on those flights – the Americans always ended up flying on American or Continental (NYSE:CAL). Maybe part of that was fear of the unknown, but I suspect a much bigger part was those frequent-flyer accounts. Americans have been conditioned to expect to either earn or spend frequent-flyer miles on every flight they take – something which mitigates strongly against taking any foreign airline. Even sophisticated cosmopolitan New Yorkers, well aware that Virgin and BA (OTC:BAIRY) are extremely competitive with American and Continental to Heathrow, still nearly always end up taking a U.S. carrier.

One can understand how the U.S. ended up in this position. If you're a country like the U.K. or Germany, where most people travel to many different countries quite regularly and have a wide choice of airlines, any one airline has a relatively small chance of locking in frequent fliers. If you're an airline in a small country where the citizens don't travel a lot, then those citizens who do travel are largely captive, and your best bet is to compete on quality against the airlines of the countries you're flying to.

The U.S., by contrast, is unique in that most U.S. airline passengers spend most of their time on domestic flights, racking up domestic miles. When they do occasionally fly abroad, they simply stick with the plan they're in. Is there another country where most flights are domestic, and where the big domestic airlines are also the big international airlines? I don't think so, but that seems like it could be a recipe for reliance on frequent-flyer plans rather than high-quality service.