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16 April 2007

Grounded: Why America’s airlines are the world’s worst

British travellers beware: the US airline industry is in a tailspin, and passenger service and staff

By Andrew Stephen

Yes, I’ve flown on Ryanair, easyJet, Flybe and so on, and I know they can be pretty ropy. I also know British Airways loses an awful lot of bags (more than any other major European airline, I’m told). Heathrow can certainly be a disgrace.

But if anybody thinks flying to and from British airports is uniquely awful, I have news for them. In America, which boasts six of the world’s biggest airlines, flying even on short-haul flights is beginning to get much, much worse – and the outlook is bleaker still. This year, airlines around the world are expected to make $3.8bn profit, with European firms accounting for $2.4bn of that and Asian-Pacific ones for most of the rest. The US airlines are forecast to lose $600m, and I expect the losses to end up being much more.

Figures just published by the Airline Quality Rating, the authoritative annual survey that examines the performance of 18 airlines using government statistics, found that last year more passengers were bumped from flights, more bags were lost and more flights arrived late than in the pre vious year. No less than a quarter of all US airline flights are late. Two of the Big Six – Delta and Northwest – are currently bankrupt (under America’s Chapter 11 regulations, which allow companies to declare bankruptcy but remain operating while, in theory, they get their act together) – and three of the remaining four have slipped in and out of bankruptcy in recent years.

“We’re going to see more delays and those delays translate to cancellations, mishandled bags and unhappy passengers. It’s not a pretty picture,” says David Castelveter, spokesman for the Air Transport Association.

Why? The 11 September 2001 atrocities were certainly a big setback for all US airlines – but the Bush administration handed out huge taxpayer bailouts to them, and problems arising from 9/11 largely dissipated after 2005. Far more damaging was the Airline Deregu lation Act 1978, which handed out financial bonanzas to shareholders – but, in the long term, led to less competition and thus poorer service. Two years later, Ronald Reagan famously dismissed 11,359 of the nation’s 12,000 air-traffic controllers for going on strike; today the US air-traffic control system is antiquated and working far beyond its capacity.

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The airlines I have to travel on most are US Airways and United – at the moment, I have 396,812 miles in my United Mileage account – and they are probably the worst of the six giants. US Airways is the smaller of the two, but still runs nearly 4,000 daily flights serving 240 destinations in 28 countries, with a workforce of more than 37,000; but it was bankrupt from 2002 to 2005, during which it not only tried to pare costs down to the bone, but sliced off slivers of the bone itself. Previously, roughly 40 per cent of its revenue was spent on the workforce, but that has now plunged to just 17 per cent – leading to a demoralised staff who care less and provide increasingly bad service.

Countless thousands of airline staff have found their treasured pensions disappear in smoke and their pay slashed in the “reorganisations” – and they are the lucky ones who have kept their jobs. “The entire industry is in a death spiral, including this company, and I can’t get us out of it. Deregulation is an abysmal failure and we have no more furniture left to burn,” Bruce Lakefield, then chief executive officer of US Airways, said in 2004. The following year, Lakefield took home what, to him, was doubtless the insultingly paltry sum of $2.2m.

United, which has 56,000 employees and operates a fleet of 459 aircraft, was bankrupt from 2002 until last year – and its service went from bad to dismal. Yet Glenn Tilton, the CEO who shepherded United into bankruptcy when the entire company was valued at just $20m, nevertheless managed to take home $39.7m last year. (Don’t ask me to explain this sort of financial smoke-and-mirrors, because I can’t: the wretched US Airways recently bid $9.77bn for Delta, a manoeuvre I find no less baffling.)

Nightmare stories for passengers and mere airline workers abound, while the fat cats enrich themselves. In February, passengers on ten planes belonging to jetBlue – a relatively small airline, but which nevertheless is now the biggest carrier operating out of New York’s J F Kennedy Airport, and which was found to be the country’s second most efficient airline in the AQR survey – kept passengers on ten planes waiting on the tarmac for between five and a half and ten hours because of bad weather.

Last month, I found myself shepherding a party of six people, including four children, from Washington to Florida – going out on United and returning on US Airways. On the day we were to depart, moderate snowfall was forecast for New York. There was not a snowflake to be seen in Washington and nor was any snow forecast, but I received computerised email and text messages seven hours before our scheduled departure saying something like (I can’t remember the exact words): “Flight 1615 has been cancelled. You may have been rerouted, so it is vital that you immediately contact a United representative on 1-800-241-6522.”

Infuriating messages

I duly kept three phone lines open for four hours listening to infuriatingly cheerful recorded announcements, but could neither reach a human being nor get any automated information on the phone or online. The only alternative was to travel the 35 miles to Washington Dulles – which was a zoo, far worse than I have ever seen Heathrow. After queuing for nearly two hours, we were put on a flight two days hence – still with nary a snowflake to be seen outside. (We actually managed to get a flight the next day, but only after a little finessing from me.)

Coming back, US Airways failed to deliver my suitcase, something that has happened to me more in the past two years than in the previous three decades. I provided all relevant details and the all-important baggage tag and bar code to the airline’s lost-luggage office and was told to go home – and then check online or phone a number. Back home, I found online that US Airways was “still checking” for a bag that the airline apparently believed had no baggage tag number or bar code and belonged to a non-existent Ms Margaret A S Stephen. I then spent 90 minutes waiting on the phone to get through to a human being – and found he was in Guatemala, clueless, and doubtless being paid some truly pathetic pittance. My suitcase was clearly destined for the notorious 50,000 square foot graveyard in Scottsboro, Alabama, where luggage lost and misidentified for ever by US airlines is bought and sold off at the rate of more than 7,000 items a day.

Instinct and experience made me make three return trips to the airport that evening, where I asked a couldn’t-care-less human being whether my bag had been scanned in at West Palm Beach. “Oh, we don’t do that,” she replied airily. On my third trip I clambered in among seas of suitcases and finally found mine, which had apparently come in on a later flight, and duly told the lost-luggage office. Four days later, Margaret Stephen was still being told online that US Airways was trying to find her suitcase – and eight days later I received a phone call (at least the company had my number right) asking whether Margaret had ever found her bag.

I had known this kind of rot was setting in two years ago, when I made a three-day trip to London on US Airways and my suitcase failed to materialise at Gatwick. I spent £141 on basic toiletries and a change of clothes, knowing that under the 1929 Warsaw Convention and its updated 1999 Montreal replacement, I would be entitled to at least part of that as compensation for what turned out to be 48 hours without my belongings (British Air ways paid Victoria Beck ham £100,000 for one lost suitcase, after all). I had my suitcase for just one full day before I returned to the United States – where, surrealistically, US Airways managed to lose it yet again.

I thought that if I Fedexed a letter direct to the aforementioned Lakefield with receipts for the £141, it would at least prompt a response. I am still waiting to hear a peep from Lakefield, now vice-chairman, or anyone in his office, let alone receive a penny of the money the airline owes me – despite having a Fedex receipt showing that my letter was safely delivered and signed for.

Despite all that I have recounted above, the British government recently granted more US airlines the right to use Heathrow, a deal worth literally billions to the American airlines but little or nothing, as far as I can see, to Britain. American airlines have always been allowed to fly from New York to Frankfurt via London, say, and pick up invaluable new passengers in London. However, in what amounts to a scandalous breach of the free-enterprise ethos that Americans are supposed to hold so dear, the reverse does not apply: if British Airways flies from London to Dallas via Boston, say, the US denies it the right to pick up lucrative additional passengers in Boston, a blatant repudiation of the free-market system that costs the British airlines (again literally) billions.

The brand-new “open skies” agreement will allow American and European airlines to fly from any airport in Europe to any in America and vice versa, and that just may help the low-cost European airlines to compete against the American giants. I would perhaps give Ryanair a miss, but would much rather fly across the Atlantic with Flybe, say, than with any of the six US giants. Britain, as usual, is only slowly waking up to these realities of American life.

The truth is that you were dead right, Mr Lakefield: the US airline industry is in a death spiral. But I still have copies of my letter and those receipts, so perhaps it is not too late for you to recompense me with that £141 – maybe even out of the paltry £2.2m to which you so selflessly limited yourself to that year.