Watch CBSN Live

Memo to Airlines: Looks Like You Can't Cram Any More Butts Into Seats

August airline traffic numbers are out, and for the first time in a long time, more airlines reported unchanged or falling numbers of seats filled than rising numbers. Have the airlines finally planted about as many butts in jetliner seats as they can? It certainly looks that way.

Of the 11 airlines that I follow here, five saw their load factors (approximate measure of how many seats are filled) drop while one remained unchanged. Five other airlines did see increases.

Does this mean it was a terrible summer and airlines are struggling to fill seats? No, not at all. Demand was very strong and capacity remained tight, so it was a good summer. But airlines may once again be pushing the limits of how many seats can be filled on a flight.

For years, a good month for airlines was one in which they filled half their seats. When deregulation happened in the late seventies, fare differentiation and price discrimination meant that airlines could fill more seats without sacrificing the high dollar revenue from the business traveler. Filling 75 percent of seats was a very strong performance, and it remained that way until only a couple of years ago.

Since that time, airlines have become masters at filling seats and leaving few to spare. Some airlines, notably Allegiant and Frontier, routinely top 90 percent now, something that was shocking when it first happened because people always figured that off-peak flights would drag down the average.

These days, if an airline doesn't fill at least 80 percent of its seats, people start to wonder what happened. So the steady growth we've seen over the last couple years may now have finally hit a plateau. It seems that we've settled in an area where 85 to 90 percent is a where most airlines want to be. So year over year comparisons may not have the kind of growth in them that we've seen in recent years.

Here are the August traffic numbers from 2010 vs 2009. Available Seat Miles (ASMs) are a measure of total potential passenger capacity while Revenue Passenger Miles (RPMs) are a measure of actual passenger capacity. Load factor is RPMs/ASMs.

Airline ASMs RPMs Load Factor
AirTran 2.1% 1.7% -0.4 pts
Alaska* 7.1% 10.0% +2.2 pts
Allegiant 23.6% 23.2% -0.3 pts
American* 3.2% 3.1% -0.1 pts
Continental (1.1%) (0.4%) +0.7 pts
Delta 1.2% 1.1% No Change
Frontier 9.0% 10.0% +1.0 pts
JetBlue 7.3% 7.0% -0.2 pts
Southwest 3.7% 6.4% +2.1 pts
United 1.7% 2.5% +0.6 pts
US Airways# 1.2% 0.8% -0.3 pts
*Does not include regional operations
#Only includes wholly-owned regional subsidiaries


Photo via Flickr user Daquella manera/CC 2.0
View CBS News In
CBS News App Open
Chrome Safari Continue