Learning to Live Without Horny Bankers

Airlines have long depended on free-spending financial types to fill the front of their aircraft. The high-priced business- and first-class seats made frequent flights to many destinations possible. But now that the Horny Banker Theory of Business Travel has been debunked, airlines are going to try to get small to survive.

Ever since Lehman Brothers tanked in September 2008, premium-class travel has plummeted. Some month-to-month declines have been in the 20 percent range, according the IATA, the international airline trade group. Throughout the year, U.S. carriers have collapsed their route networks, and some estimates say the national commercial-air system is 20 percent smaller than five years ago. Now the carriers plan to eliminate many seats in their first- and business-class cabins too. Such a drastic measure defies both mathematics and aircraft geography—removing one business-class seat that sells for $10,000 requires an airline to sell 10 additional coach seats at $1,000 each, and there simply isn't space for that many more chairs—but many carriers are convinced that business-class demand will never return to pre-Lehman levels. So now we'll see if Steve Wolf, the former boss of United and US Airways, was right. He once said airlines can't shrink their way to profitability. Of course, they long ago proved they couldn't grow their way to profits, either.

The Mainstream Media Never Learns

Frequent flyers are poorly served whenever the mainstream media covers business-travel topics, and 2009 proved again that reporters and editors who sit behind a desk and make believe they understand life on the road do more harm than good. The general media continued to buy the hype and fantasies fed to them by the supporters of the hopelessly inadequate "registered traveler" programs right up to the June day that the largest provider, Clear, abruptly shut down. And my friends in the mainstream media continue to support the meme that airlines imposing checked-bag fees are racking up huge gains. In fact, the opposite is true: Carriers that charge bag fees have watched their overall revenue plummet in 2009. Yet JetBlue Airways, which still allows one free checked bag, and Southwest Airlines, which maintains its two-bags-free policy, are winning passengers and revenue. Southwest's gains are especially notable. It registered a startling 11.7 percent increase in revenue passenger miles in November, even though its overall seating capacity dropped by nearly 8 percent.

The Fine Print…

One final lesson learned in 2009: I'm getting really old. During a trip to Wales in June, I wandered into a pub in the town of Conwy and ordered a pint of bitter. "We have two local ones," said the waitress. "Which do you recommend?" I asked. "I'm 26! I don't drink bitter!" she replied.