The Squeeze Play: One of the most important cabin innovations of all involves giving passengers less, not more
If IATA is right, the airlines of the world will once again generate more money than they spend in 2014, which would mark the industry’s fifth straight year of profitability. One reason why: The Squeeze Play.
The last five years have—don’t be fooled—been anything but easy for airlines: sluggish economic growth, depressed cargo markets, foreign exchange volatility, government support for dying rivals and—oh yeah—high fuel prices. So what explains this moneymaking prowess? Consolidation, for sure. The ancillary revenue revolution too. And give credit to more fuel efficient planes, IT-driven productivity enhancements, determined cost cutting and—in some parts of the world, anyway—better capacity management with both how much capacity carriers deploy and how they deploy it to match swings in demand by season and even day of week. But to speak about the global airline profit renaissance without talking about The Squeeze Play? Well, that would be like talking about a Super Bowl victory without mentioning the Seattle Seahawks’s defense.
It might not capture imaginations quite like the latest lie-flat seats or inflight entertainment systems. But as cabin developments go, The Squeeze Play, otherwise known as seating densification, is at least as important to airline bottom lines—and it’s all the rage right now. Airlines everywhere are reconfiguring their cabins with more seats, creating the closest thing the airline business has to a free lunch: lower unit costs—you get more seat miles or kilometers over which to spread your fixed costs—and more total revenues.
Last week, American’s new management team was the latest to jump on the train, saying the newly merged carrier will retrofit many of its planes with additional seats. Delta and United are doing the same. Since early 2012, Southwest has been adding a row to its B737-700s, taking them from 137 to 143 seats. Alaska Airlines is adding six seats to its B737-800s and nine to its B737-900s. A critical element of Spirit’s highly successful transformation to an ultra-LCC has been its use of planes packed with nearly the maximum number of seats U.S. regulators allow: 145 on an A319, 178 on an A320 and 218 on an A321. Frontier too, in 2012, began moving from 162 to 168 seats on its A320s, and no one will be surprised if its new owner—which backed Spirit’s transformation—pushes further. Allegiant, never one to underutilize inflight real estate, added 16 extra seats to its MD-80s and actually operates A319s with 156 seats—no, it’s not ignoring regulations but operates specially configured A319s with extra window…
This issue is not currently online. To inquire about purchasing a copy, please email email@example.com.