Requiem For The Jet Age?
What's happening now to the airline industry is part personal tragedy and part national trauma: all the hijacking and crash deaths, all the recent unemployment and a loss of freedom for us all. Over the past half century, Americans have come to regard air travel as an entitlement that, by its very availability and reliability, altered how we worked and played. If we no longer see it that way, we will work and play differently. Even when we fly--as millions of us will--we will do so with less pleasure and more anxiety.
It's worth recalling that only six months ago the airlines were bitterly cursed over congestion, missed connections and lost baggage. By one estimate, delays (measured in hours) jumped 127 percent from 1997 to 2000. There was no public clamor for tight security. Just the opposite. We wanted our air travel cheap, convenient and comfortable. The industry suffered from its own success; it had made flying a necessity, not a luxury.
Let's review the numbers. Since 1950 the annual number of U.S. passengers has risen 34 times (from 19.2 million to 655 million in 2000). Meanwhile, inflation-adjusted air fares dropped 73 percent. And safety was extraordinary. Until 2001, the worst year for U.S. airline deaths was 1974 (460). From 1977 to 2000 there were 108 deaths. In the same period, highway fatalities totaled 166,916. Airline congestion partly reflected the absence of new airports, but the larger cause was that Americans had become hooked on flying.
Even in the 1950s, air travel was no mass market. The Pulitzer Prize-winning historian Bernard De Voto wrote an essay for Harper's magazine in 1952 describing his flight from Washington to San Francisco--with a stop in Denver--in the snappy time of 11 hours and 10 minutes. That De Voto thought the article worth writing showed that, for most upscale Harper's readers, a transcontinental flight was still an unexperienced adventure. Americans remained enthralled by the idea of flying: an age-old dream suddenly realized.
In the 1920s and 1930s, thousands of children and teenagers built flying models of balsa wood, according to aviation historian Joseph Corn. Similarly, there were dozens of proposals for personal planes, flying Model Ts. When the first Pan Am Clipper--a huge four-engine seaplane--took off for China from San Francisco in 1935, a crowd of 20,000 gathered to watch. As De Voto gazed down on plains and mountains, he reflected on earlier transcontinental passages: "five or six months by ox team, seven or eight weeks by steamboat and stage coach, forty-two hours [by train]. I hope they never compress it further with jets."
Of course, the jets truly created the mass market by lowering costs. Jets were bigger, and faster speeds meant they were far more productive than propeller-driven planes. The introduction of wide-bodied planes--beginning with Boeing 747s in 1970--compounded the advantages. So did the reduction in crew sizes. The Boeing Stratocruiser, the company's last prop plane, had a cockpit crew of four. The 707--its first jet, introduced in 1958--had three. Everything after the 737, which went into service in 1968, has had two.
Jet travel altered the way Americans lived and thought more than, say, the Internet has. But the changes were so gradual and natural that they are now overlooked. By enhancing mobility, jets--like railroads in the 19th century--advanced a truly national market. Disney World and Las Vegas became national destinations. Harvard could recruit from the West Coast, Stanford from the East. If adult children moved hundreds or thousands of miles from parents, families could still gather several times a year.
Business similarly changed. In 2000, for example, there were 4,637 trade shows that attracted almost 126 million people, according to Tradeshow Week. Since 1971 attendance has nearly quintupled. The largest show last year was the International Manufacturing Technology Show in Chicago, with 1,577 exhibiting companies and 114,675 attendees. Michael Hughes, Tradeshow Week's research director, estimates that attendance at conventions and corporate meetings (sales conferences, training sessions) probably exceeds trade shows' by 50 percent. Altogether, this implies about 315 million people selling and schmoozing annually at religious, professional and corporate get-togethers.
What we need to know--but can't--is how much habits have permanently changed. No doubt extra security measures will deter some air trips, especially by time-conscious business travelers, or shift them to the road. No doubt, too, that fear has risen. The Wall Street Journal reported last week that children and spouses are imploring working parents not to fly. "I feel torn every single time I travel," said an executive. By one poll, 52 percent of working mothers with children felt uneasy flying.
Although fears may fade with time, the immediate effects are inescapable. Heavily indebted to buy planes, airlines have razor-thin profit margins. Almost all efficiency gains have been passed along to passengers in lower fares or to employees in higher salaries. From 1990 to 2000, all U.S. airlines had after-tax profits of $10 billion on $1.1 trillion of revenues--a 1 percent profit margin. By contrast, General Electric's profits totaled $12.7 billion in 2000 alone. Inevitably, huge airline-traffic declines are now driving layoffs.
Phil Condit, the head of Boeing, last week said it might take the airlines 28 to 42 months to recover their pre-September 11 traffic levels. Over five years, he thinks Boeing and Airbus could lose 1,000 plane sales. Boeing's various models have price tags between $35 million and $232 million. Presumably, Airbus's are similar. If you (conservatively) assume an average price of $100 million for each of those 1,000 planes, the total comes to $100 billion. This measures the economic loss, but it also suggests how much our personal choices are being compromised. Although the jet age isn't over, it has opened a new and more discomforting chapter.
