Airlines Depend On Bankers

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Low-fare coach passengers are "ballast," one brutally honest airline executive told me not too long ago. "You fill up the back of the plane with them and hope you break even. They are there to allow you to fly five or six times a day between cities so you can offer the frequency of schedule to the high-paying business traveler."

I didn't use the NyLon run as a random example. New York to London is the premier international route in the Western world, and its primary customers have been financial types. As banking and brokerage firms shifted employees between the key English-language financial centers, New York-London traffic boomed. According to British aviation regulators, about 1.7 million people traveled between the United States and Britain in June—and almost one in four of them flew the NyLon route.

Five U.S. and British carriers (American, Delta, Continental, British Airways, and Virgin Atlantic) fly the route dozens of times each day. Three all-business-class carriers (Eos, Maxjet, and Silverjet) tried to crack the market in recent years; two of them flew into London's Stansted Airport, which has a nonstop rail connection to The City. And next year B.A. plans to launch what can only be called a banker's transatlantic limousine. The 28-seat, business-class-only flight will link New York to tiny London City Airport, just minutes by taxi from Canary Wharf, London's satellite financial hub.

It's not just NyLon that will be hit by the ongoing financial meltdown, of course. Four of the six U.S. legacy carriers (American, United, Delta, and Continental) and two alternate airlines (JetBlue and Virgin America) fly between metropolitan New York and greater Los Angeles. The route is essentially a shuttle tying L.A.'s entertainment industry to New York's bankers. The same carriers run frequent service between New York and the San Francisco Bay to link the high-tech industry to Manhattan's money. And the front cabins of transpacific flights from Los Angeles and San Francisco are jammed with bankers heading to major Pacific Rim manufacturing and financial centers.

Bankers and brokers also dominate Amtrak's Acela and the New York-Washington Air Shuttle route. They pay a walk-up fare of $340 one way—an incredible $1.59 a mile—to fly the 214 miles between New York's LaGuardia Airport and Washington's Reagan National. That's about 13 times more on a per-mile basis than the average fare that airlines charge nationwide.

What's it all mean? After a decade that has seen 9/11, serial bankruptcies, and a quintupling in the price of oil, airlines may now have to survive years without tens of thousands of their best and most profitable customers too. Horny or not, those folks are going to be missed.

The Fine Print… A follow-up on last week's column about this season's new airport terminals. Detroit Metro opened without notable incident last Wednesday. But the schedule for the new Indianapolis terminal has changed. The airport will now hold an "open house" on October 11 and 12, but the big move of paying passengers and commercial flights will begin on November 11.

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