In Defense of Shrinking Airline Seats

CoachThe internet is abuzz about the new patent application from Airbus that reveals a concept which stacks passengers on top of each other – think bunk beds in coach class. The revelation conjures up images of ‘cattle cars’ and ‘sardines’, while renewing petitions for legislation to protect a minimum airline seat size. But is the popular narrative true that greedy airlines continue to cram in passengers like turkey stuffing, to extract as much profit as possible? Yes. But passengers are in favor of it – if it means keeping the cost of air travel down.

Patent applications like the one Airbus just filed are nothing new. Airlines and seat manufacturing companies always try to come up with creative new ways to fit in more passengers, such as the saddle seat and the hexagon concept. Airbus was quick to point out that they file hundreds of these kinds of patents each year, and the patent does not mean the new seats will be on your next flight. But would this really be such a bad idea?

Complaining about cramped air travel has become one of America’s favorite pastimes. It is true that seat size and passenger space has been declining while the average American traveler’s girth has been increasing. The seat pitch, which is the measurement from one point of a seat to the same point on the next seat, has shrunk 2 to 5 inches since 1985, while seat width has also shrunk a couple of inches.

Of course, the upside to all of this is that cost has come down…dramatically. Since 1985, the cost of an average domestic round-trip ticket has declined by an inflation-adjusted 30%! This is even after the airline deregulation that took place in the seventies. Going back just a few more years to 1978, we find that ticket prices have been nearly cut in half!

This leads us to a basic concept in economics. There are things we don’t like, or more accurately things we all wish we had or had more of, such as legroom on an airplane. The question is, at what cost? Alternatively, ask yourself how much are you willing to pay for that extra legroom?

The fact that airlines have multiple cabin classes on the same flight demonstrates that some people are willing to pay more for extra room and amenities. Economy class takes up the majority of space on an airplane, which shows that most people value price over space and comfort. If this wasn’t so, then more space would be devoted to business and first class to serve the demand.

Notice that we don’t gripe about this in other areas of our lives. People buy smaller, cramped cars with less features and comforts because they prefer to take the savings and spend them on something they value more than plush leather car seats and a navigation system.

The customer is still king, and the airlines’ shrinking seats are a response to customer demands for cheaper flights. In fact, we should applaud the research that airlines continue to conduct to find better layouts and more efficient designs, just as we applaud car makers that make lighter and more fuel-efficient cars.

Ryanair, one of the largest ultra low-cost airlines in Europe, is famous for finding all kinds of ways to lower airfare costs, including at one time floating the idea of charging for the use of the onboard toilet. But they also made waves when they announced they were exploring ‘vertical seating’, which is exactly how it sounds: standing room only.

But Ryanair wasn’t just going to foist this upon their precious and unsuspecting customers. They only came around to the idea after performing market research and discovering that out of 120,000 passengers surveyed, 42% said they would stand if the ticket was at least half the price of a seat ticket. This also makes sense when you consider that many intra-European flights are very short, and comfort is much lower on the list of priorities, while price is almost always the number one hot button for passengers.

Finally, lest you think airlines are making gobs of money due to their constant squeezing of passengers, consider that profits in the airline industry have been abysmal since deregulation due to fierce competition, and it has been riddled with more bankruptcies than any other industry. In the past six decades of the airline industry, the average profit margins for airlines has been less than 1%.

So the next time you find yourself cramped in seat 33B, think about the money you have saved and how you value that savings even more than that extra three inches of legroom that would have released your kneecaps from the seatback in front of you. But if you would rather have the extra space, the market will be happy to accommodate you. If you like, you can even book yourself an entirely private cabin.

Chris Kuiper, CFA is currently a student and researcher at George Mason University, pursuing a Master’s of Economics. His previous experience includes asset management, investing and banking.

 

 

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