“We’ve been needlessly irritating people, from our creaking old website to our interrogation of passengers over the size of their purses.“
Michael O’Leary, chief executive officer of Ryanair
Travel Industry Cost Savings Technique:
Reducing Airline Fuel Costs
This blog was written before the COVID Pandemic. The COVID epidemics played havoc on the travel business. In 2022, Fifty Plus Nomad decided to focus on traveling and living in Mexico and language learning posts. We will only update these long-term travel-related posts on a time-permitting basis. We would appreciate your comments and updates on these posts.
To make planes lighter (fuel represents around 33% of operating costs) and thus save on fuel costs, airlines are finding creative ways to cut weight, including:
- Eliminating or reducing the weight of airline pillows and blankets.
- Charging or not even providing for earphones.
- Changing the weight of the paper of their in-flight magazine.
- Redesigning bathrooms.
- Discontinuing selling duty-free products in flight.
- Reducing the size and weight of the in-flight drink/snack carts.
- Installing lighter seatback entertainment systems (some budget airlines are eliminating the seatback entertainment systems or replacing the systems with tablets).
- Installing lighter and thinner seats.
- Switching out glass bottles for cans.
- Replacing employee paper manual with tablets.
- Manufacturers are also designing new engines and more lightweight plans for their new planes to cut weight.
Some Ways Airlines Cut Costs that Negatively Effect Consumers
Most of these fuel reduction changes do not affect customers that much. However, we can expect that airlines will increasingly develop cost savings strategies that negatively affect consumers, including:
- Reducing the size of seats for economy customers while offering more options for customers to pay for more comfortable seats.
- Putting advertisements on seatbacks.
- Charging extra if you are overweight on a small plane reduces fuel usage. (I was once charged extra on Nature Air in Costa Rica).
- Providing fewer gate seating areas and placing gates in far-off corners of the airport. (Prime airport gates are expensive and already taken by large, well-established airlines).
- Finding fewer airport personnel at the gate and check-in counter.
- Taking shuttles to get from airplanes to the airport. (Usually, these shuttles are stuffed to the gills and expose you to the weather at the destination. I was once, for example, forced to experience a cold London winter day while dressed for arrival in the tropics of southern India).
The Most Important Ways that Airlines Reduce Costs
Airlines have been trying to find cost savings forever. The following are the most widespread and effective cost savings techniques airlines use. Many of these techniques negatively affect consumers, but they are not apparent to most passengers:
- Minimizing training and maintenance costs by only using one or two different models of an airplane. (Most of these aircraft are designed to reduce fuel costs).
- Reducing labor costs by hiring less expensive, inexperienced employees, not offering these new hires pensions, and using less unionized labor. (Many legacy carriers have also reduced benefits for existing employees).
- Replacing employees with technology. This is particularly noticeable at passenger check-in and gates.
- Reducing the time between flights on the same airplane as much as possible. Airlines used to spend more time cleaning and ensuring that planes were ready for take-off than now.
- Outsourcing aircraft maintenance to China, Mexico, and increasingly, El Salvador, where labor is cheaper and regulations and supervision laxer.
Non-Airline Travel Industry Cost Savings Techniques
It is not only airlines that continually look for other ways to save money.
The cruise industry provided midnight buffets and free, high-end dishes (like lobster and expensive cuts of steak). Besides, many experts maintain that cruise companies cancel ports to increase revenues and pay fewer port fees. (Customers also buy more from the cruise line when the ship is at sea than in port)
Hotels and cruise lines often require customers to insert their key card into a slot to turn on lights to save electricity costs. Some hotels and cruise lines have eliminated bar soap and shampoo bottles and replaced them with bulk body soap dispensers. They have also redesigned bathrooms to use less water. I expect that soon, hotels will replace check-in counter personnel with computers and limit maid visits to every other day.
Want More Information About Travel Industry Cost Savings?
Check out this interesting article from Harvard Business Review about how airlines may start offering business passengers the option not to use certain services in exchange for incentives.