2009 has been one of the worst years in history for the commercial aviation industry, with revenues plummeting on the back of worldwide recession. While this has been bad news for stockholders and employees, it can mean ridiculously low airfares for those passengers who can still afford to travel.

Traditionally, airlines have used complicated price structures based on historical demand and time of booking. In general, booking early was the best course for those who had specific travel plans as, more often than not, the price would increase as the departure date got closer. Those who were flexible in both time and/or destination could hang on and pick up a bargain at the last minute.

But the game has changed recently. Unlike the slumps that followed Gulf War I and September 11th, this time people are afraid of the bailiffs, not fanatics. Passenger figures are down because of the financial uncertainty that has gripped even the rich. The airlines know this, but they also know that it won’t last forever. The industry is cyclical in nature and, barring another kick in the teeth, the chances are it will be profitable again before too long.

In order to take advantage of this anticipated recovery, they first have to survive. If they can do this while maintaining, or even increasing, their market share, then all the better. The rules still apply to popular routes, such as LHR-JFK, but forward bookings to some destinations are poor. As the airlines are reluctant to cancel these routes (their competitors would pick them up in a flash), it seems that many have adopted a “bums on seats” pricing policy.

Here’s how it works. Say, for example, a 747 with 350 seats is on a 12-hour flight. If the airline has managed to sell 250 of those seats at normal price it won’t be too far from breaking even. However, as the flight was going no matter how many tickets were sold, all the services – baggage handlers, crew, etc – are already paid for. This means that the only extra ‘costs’ of carrying more passengers are fuel and catering. In-flight meals are dirt cheap (no surprises there) and, at July ’09 prices, the additional fuel required to carry 200lbs more weight is about $15 worth.

Therefore, the airline only has to sell the last 100 seats for more than $20 each to make it worthwhile. This is why taxes and charges often outweigh the actual fare on discounted routes, and why full service carriers can be cheaper than their low cost rivals. Of course, this is a very simplistic example and break-even loads depend upon the original ticket prices and operating costs. But, with patience, flexibility and a strong mouse finger, there are some fantastic deals out there, especially on long haul flights where premium seats are being heavily discounted.

This state of affairs won’t last forever though – as soon as demand for travel picks up, so will ticket prices. If for some reason the demand doesn’t pick up then a lot of companies will run out of cash charging these prices. The reduction in capacity as they go bust will have the same effect on airfares.

In the meantime, if you do manage to find bargain flights, keep it to yourself. Chances are the person sitting next to you paid a lot more!

The next time you board an airplane, have a close look at the flight attendant. Is the insincere smile slightly less sincere than usual? Does she have a worried, far-away look in her eyes? If the answer to either question is yes then the chances are she’s a victim of the recession – even though she still has a job

Since the astronomic fuel prices of 2008, the airline industry has been under siege. The credit crunch followed, and many companies went to the wall. For the survivors – and it has become a battle for survival – rapid and Draconian measures were needed.

This is nothing new. The industry is cyclical by nature and undergoes a downturn every 10 years or so. September 11th hit hard, and before that was the first Gulf war. However, each time, executives follow the same map to recovery they cut capacity, cut fares, cut costs.

Unfortunately, this time, most airlines don’t want to lose market share and have slashed airfares to keep it. As the fuel price is out of their control, the only way they can afford this huge loss of income is to cut costs, and cut them hard.

This affects cabin crew in many ways:

Short Term Effects
The quickest way to cut costs is to cut staff salaries and there’s a result within a month. This is the obvious one, and the reason flight attendants might seem a little distracted. Contrary to popular belief, many airlines pay crew a pittance and more cuts could see several of the regionals paying just above minimum wage. Reports exist of some flight attendants, and even pilots, qualifying for food stamps.

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Customer service suffers, as people start asking why they should go the extra mile for a company that wants their children to starve. However, there will always be company minded crew (usually those with an eye on promotion) who resent the more militant ones, seeing them as a threat to their future. Working in such close confines, this can lead to open conflict on board. There is strong anecdotal evidence that, during a dispute in the early 90s, two crew from a major US carrier started a catfight in the cabin!

Cost cutting also directly affects staff morale. Aside from cuts in pay and conditions, crews have to tolerate the results of decisions made at head office. An accountant may think that the money saved by reducing the product on board is justified, but after the hundredth time of explaining why there are no more blankets, many flight attendants just lose interest.

This apathy usually means that, when the unions come a-knocking, the crew want to work-to-rule, or even strike, just to get back at the managers who are making their life a misery.

Longer Term Effects
Some of the larger airlines still have crew working on contracts that are over 30 years old. Compared to new contracts, these pay much more money, and have conditions that benefit the worker, not the company. Looking to the future, several airlines have offered voluntary severance in order to reduce costs. The downside of this? By definition, it is the senior crew who are targeted, cutting a huge experience layer from the top.

Couple this with reduced starting salaries, and reduced recruitment standards just to fill vacancies, and the future isn’t orange, it’s green. This lack of experience will tell in the cabin, but not only affecting customer service. It may also affect the crew’s ability to handle emergency situations. When the chips are down, it’s not possible to put a value on having someone who has “been there, done that”.

So the next time you don’t get a smile as you are shown to your seat, don’t assume it’s just because the flight attendant is a miserable cow. She might have a lot on her mind too!