Airline profits soar along with laments

For air travel in the United States, 2014 brought soaring profits for airlines and turbulence for passengers.

Several U.S. carriers reported record quarterly profits during the year amid declining fuel prices and rising travel demand, especially among big-spending international fliers.

It was not such a great year for airline passengers: On-time arrival rates for airlines were down to the lowest level in four years. Flight cancellations increased. The rate of lost or damaged luggage was the highest since 2009, and passenger complaints increased last year.

The nation's airline industry touted its financial windfalls in a glowing report issued recently by Airlines for America, the trade group for the biggest U.S. carriers.

"The recent dip in the price of jet fuel is finally giving the carriers some breathing room to reinvest in the product, reward employees and shareholders, and reduce debt, all while boosting capacity," said John Heimlich, chief economist for the trade group.

The 10 largest carriers reported $7.3 billion in profits in 2014 -- representing a 4.6 percent profit margin, compared with an average profit margin of 1.5 percent over the previous five years, according to the trade group.

But travelers had less to cheer about.

The percentage of flights that arrived on time dropped to 76 percent, the lowest in four years, according to federal statistics. Airlines lost or mishandled 3.6 bags per 1,000 domestic passengers, the highest rate since 2009. The rate of flight cancellations rose from 1.8 percent in 2013 to 2.6 percent last year, according to the airline data site Flightaware.com.

Airlines blamed the troublesome statistics on bad weather, including the polar vortex last winter, thunderstorms in the spring and summer and a September fire at a control tower in Chicago.

"In an operating environment that was probably the worst it's been in five years due to weather and a fire in the FAA en route center, it is precisely because airlines are investing in their people and product that performance numbers continue to be as strong as they are," said Victoria Day, a spokesman for Airlines for America.

Two trends that are headed in the opposite directions are likely to make flying in the economy section of a commercial plane a bit more uncomfortable.

Airlines are shrinking passenger space to increase profitability, while U.S. passengers are getting bigger, as is evident by rising obesity rates.

One of the world's largest aircraft makers, Boeing Co., announced several upgrades recently to its long-range 777 jet, including changes that will allow airlines to squeeze in 14 extra seats. Other changes call for a lavatory that is 8 inches narrower than those in the previous 777's interior design.

With airlines squeezing seating space, a new survey found that most fliers are willing to pay extra for seats with more hip room. But most passengers won't pay much.

The survey of more than 8,300 fliers by the fare monitoring site Airfarewatchdog.com found that 59 percent will pay up to $20 for a wider seat but only 9 percent of passengers would pay more than $20.

"Twenty bucks isn't enough to make it worthwhile for the airline to take out a seat and make the remaining two into a row wider," said George Hobica, president of the site. "So perhaps people just like to complain?"

For those fliers willing to pay more than $20, Hobica suggests airlines consider a new seat class: "economy-wide seats."

Travel on 03/29/2015

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