Combined with all the travel I've been doing lately (see my post above on "Democracy in America"), this article by Ron Lieber in yesterday's New York Times got my juices flowing about a subject that I'm close to irrational about to begin with: frequent flier programs.

With the exception of one mid-day, mid-week trip between DC and New York, I haven't been on one flight in the past six months that hasn't been close to or completely full.  Many of these flights were oversold.  Cancelled afternoon flights meant that passengers had to wait until the next day because there were no other flights to the same destination that day or, if there were, no seats were available.

Yes, I know the summer is a heavy travel season.  But I also know that the airlines are planning substantial cutbacks in the number of flights starting in September and that the number of seats will be reduced at the same time that demand is falling.

So...

It seems like I'm not the only one talking about carbon emissions from air travel.  The New York Times reports today on the challenges of reducing emissions from low-cost airlines even as fuel prices rise.

The growth in emissions from air travel had “far exceeded growth by any other mode,” a European Environment Agency report issued this year said. Between 1990 and 2005, the last full year from which data were available, total carbon dioxide emissions from aviation in the European Union grew by 73 percent.

“This could threaten the ability of the E.U. to meet increasingly ambitious emission reduction targets,” the report’s authors said.

When it announced its new $15 fee for the first checked bag, I declared American Airlines to be a "Microeconomics Free Zone."  Its transgression, I thought, was not considering the external, but in my view largely non-pecuniary, costs of doing this. Joe Brancatelli's indispensable "Seat 2B" column at Portfolio.com does me one better.  He runs the numbers and wonders if American will net any revenue from this at all. 

Andrew...oh guru of airline economics gurus...riddle me this:

US Airways is about to start charging a few dollars for soft drinks.  In a normal economic environment this would spur those of us who still fly to buy a can or two of Diet Coke at Cosco at 50 cents per can and bring it on the plane.  But this isn't a market in any sense of the word because TSA reguations prohibit anyone from bringing any container with more than a few ounces of liquid...including a sealed soda can...through security.

So doesn't that make any airline selling soda or juice for $2/can (at least I assume you get the whole can) a government sanctioned monopoly?

But wait, there's more.

If US Airways is charging $2/can, shouldn't we expect that the one alternative passengers have to buy water and soda --the concessionaires at the airport -- to compete by selling the same thing for, say, $1.75?

If that's the case, shouldn't we look at the stock of companies with airport concessions as a good buy right now?

Stan, so sorry for your travel woes.  It is tempting to describe your flight delays as a tragedy of the commons, but Austan Goolsbee set the record straight on this one three years ago with this great column, "Tragedy of the Airport," in Slate.  Here is the key excerpt:

At first glance, this seems crazy. The common explanation given for flight delays is that too many people are flying: The more air traffic, the more delays. That's what most economists say, too. This view of airport congestion makes it seem just like highway congestion. Each time an airline schedules a flight, it doesn't take into account the backups it causes by crowding the airspace. The dynamic generates a tragedy of the commons, in which each of the companies vying for runway slots has an incentive to overschedule.

Andrew...you're our economics-of-the-airline-industry maven so this question is for you.

I just returned from three of the toughest travel days I can remember: every flight was delayed.  One, from LA to San Francisco, was delayed for more than three hours.

Some of the delays were weather related and, as much as I'd like to blame the industry, I know that responsibility lies elsewhere. 

Most of the delays seemed to be the result of air traffic, especially jammed schedules that had too many plans scheduled to depart at the same time from the same airport.

That's what prompts this question.  Is there a silver lining to the reduced schedules the airlines seem to puuting in place for economic reasons?  Is it possible that (putting weather problems aside) flights will leave and arrive on time more often if there are fewer of them?  Or should we assume that the FAA will reduce the number of controllers to match the schedule leaving us all right where we started?

The proposal from American Airlines to charge $15 for the first checked piece of luggage is so bad that even The New York Times story was able to list the key problems.  Among them:

It is also likely to make the fight for already-tight space on planes more fierce, as passengers try to stuff more carry-on luggage into overhead bins.

American officials said the company had not devised a way to collect a $15 fee at boarding from passengers whose bags are deemed too big to carry on and must be stowed.

The impact of rising jet fuel costs on the airline industry's bottom line has been substantial.  From yesterday's Washington Post:

Faced with skyrocketing fuel bills, major U.S. airlines have announced nearly $1 billion in losses for the first three months of the year, a financial toll that is forcing carriers to slash flight schedules, cut jobs, add passenger fees and even seek potential merger partners.

It would be nice if the tone of the article were a little bit different.  When the price of an input rises, then of course less of the output will be produced.  This is one of the least subtle lessons in introductory economics, right along with the rise in the price (here, the fees) of the output.  But when it's the airlines, we're now "slashing" and "cutting."  It's a supply curve shifting.  Chill.

The surprising thing about the Delta/Northwest merger announcement is the statements about not closing any hubs.  As this New York Times article points out, the merger will be strongly opposed by the pilots of at least one of the carriers (Northwest).  The issue is seniority, which determines which pilots get to fly which routes on which planes.  I am hard pressed to think of why this would really be an issue if there weren't expected to be big reductions in the amount of flights in the newly combined airline.  (If all planes continued to fly to roughly the same cities, then very few flight assignments would have to change in substantive ways.)

On a recently no-seats-left flight (Then again, how many have I been on in the past few years that haven't been full?), I said to a flight attendent (who was complaining to me about the economy; I told her to contact you and Pete) "Well, at least this airline is making money on this flight because it's so full."  She quickly responded, "Probably not."

That raises an immediate and very fundamental series of questions: