Two Years Of Seat 2b

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This is the start of the third year that I metaphorically plop down in Seat 2B once a week and attempt to make sense of life for business travelers. And since no one deserves a free ride in a power chair, even if that chair is an airline seat, I think now is a good time to try to make sense of what has gone before.

But be warned: There are no overarching trends here. As is so often the case on the road, these last two years have been almost totally reactive: to insane swings in the price of fuel to the apparently endless cycle of boom-and-bust that dominates hotel development, and, of course, to the economic wave that has carried us from the relatively giddy times of April 2007 to our current…uh, well…to whatever it is we're living and working through.

Southwest's Steady Course
Even the nation's one financially sound U.S. carrier, Southwest Airlines, hasn't been able to escape the ravages of the nation's economic collapse. Its traffic is down about in line with industry-wide trends and it has taken the unprecedented step of trimming its overall capacity by 4 percent this year. And the airline's vaunted fuel-hedging strategy, which saved the carrier about $3.5 billion in the last decade, cost it money in the second half of 2008 as oil prices collapsed. But some things never change: Southwest is using the downturn to position itself as an alternative to the nation's mainline carriers. After decades of shunning some of the largest U.S. cities, it launched flights to Minneapolis last month, is scheduled to begin its first-ever flights into New York (via LaGuardia Airport) in June, and will serve Boston's Logan Airport in the fall.

United's Inexorable Decline
It's gone from worst to even worse than that at United Airlines, the most troubled of the nation's so-called "legacy" carriers. Once the nation's largest airline, United is hemorrhaging after a bungled mega-bankruptcy and years of management missteps. About 40 percent of what flies as United Airlines is subcontracted to regional airlines and much of the remaining service is actually code-share operations with its international partners in the Star Alliance. Every one of its union contracts becomes "amendable" next year (airline contracts never technically expire). Compared with the other legacy carriers, its cash reserves are small and there are few unencumbered assets to hock. And early next year, it will have to discuss cash-draining "holdbacks" with JP Morgan Chase, its credit-card processor. Operationally, there's no good news, either, since its once-profitable service to the Pacific Rim is deteriorating rapidly due to plunging yields to Asia and fresh competition on its Australia routes.

Fate of the Fourth Class
The worldwide collapse of premium-class traffic since last fall has had the expected effect: Airlines have stepped up their discounting in business class and more carriers are adding a fourth class, which is rather generically known as "premium economy." The discounting trend is both structurally strategic—the airlines now offer a range of discounts from three to 60 days before departure—and tantalizingly tactical, with sale fares slashing as much as 75 percent off the price of international business class. As for premium economy, Air France added the new cabin on three premier routes (from Paris to New York, Tokyo, and Osaka). But the fate of fourth class is far from secure. Even as Air France was debuting, OpenSkies, British Airways' boutique carrier, was renaming its fourth cabin as the "biz seat." The reason? Premium economy still exists in a computer-coded limbo, which makes selling it via the airline industry's omnipresent global reservation services difficult.

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