There's a downside and an upside to the new air travel reality in the United States.The downside: look for more, packed flights as airlines reduce fleets to cut costs by eliminating unprofitable flights, and with it the (remaining) empty seats on planes, The New York Times reported.
The upside: airlines are required to offer a greater payout, if you're bumped from a flight.
Airlines' load factor seen increasing
Stock analyst and frequent flier C. Leonard Bauer told BloggingStocks U.S. airlines' load factor - - the percent of seats sold per flight - - is likely to increase from its current 79% sector average. "Basic math. Considerably fewer planes and roughly the same amount of travelers means more flights close to capacity."
And overcapacity. Bauer said he expects bumps - - people with a boarding pass who can't fly because the airline overbooked the plane - - to increase during the next six months. However, bumps may trend lower in 2H 2009, if passenger traffic slows on the heels of the U.S. economic slowdown, he said.
In any event, if you're bumped, your air travel-denominated compensation will be better than it was three years ago, Bauer said, due to federally-required higher payouts. [Bauer added that he does not own shares in or have a rating on any airline or airplane manufacturer. However, Bauer does have frequent flier miles/points in American Airlines (NYSE: AMR).]
"Most people still don't like being bumped because of the travel delay, and it can be a pain, particularly if you're traveling as a family or on business," Bauer said.
But if you have a few hours, and provided the new flight is available relatively soon, passengers should consider voluntary bumps, he said.
For example, if it doesn't involve an overnight stay, Bauer, who flies about 15-20 times per year, almost always accepts a voluntary bump.
"I look at it as another free trip courtesy of American Airlines," Bauer said. "And free is a great price for a winter trip to Cancun or the Cayman Islands."
Airline Sector / Travel Analysis: It still makes financial sense for airlines to overbook flights, hence look for more bumps, given shrinking capacity. And if bumped, don't be afraid to negotiate better terms than offered: some times, although not always, the airlines' offer represents merely the federally-required minimum.
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What's your view of air travel? Are planes too crowded? Are you annoyed when you're 'bumped'? Or do you consider it just a part of air travel? Let us know what you think.
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