US airlines fly in different directions in middle-seat debate

Flying with empty middle seats means airlines will struggle to turn a profit, creating a dilemma for an industry desperate to revive itself while also reassuring passengers they are safe.

US airlines saw some demand for travel return this summer, though it has stalled as new Covid-19 cases continue to rise in southern and western states.

American Airlines told passengers to expect fully booked planes on July 1, including middle seats. The company had previously attempted to leave some seats empty for social distancing.

Anthony Fauci, a leading member of the White House coronavirus task force, panned the decision. Oregon senator Jeff Merkley said he would introduce a bill to block the practice and celebrity cookbook author Chrissy Teigen garnered 88,000 likes for a tweet that said the airline “only cares about money”.

Selling more seats would help airlines stem their losses, which ranged from $94m to $2.2bn among major US carriers in the first quarter. Delta Air Lines, the only US airline so far to report second-quarter results, posted a $7bn pre-tax loss.

To break even on a flight, airlines need to sell about 75 per cent of a plane’s seating capacity. That is 8 percentage points higher than an aeroplane where every third seat is empty.

“If you leave the middle seat empty . . . you’re not going to make money,” said Kevin Michaels, managing director of AeroDynamic Advisory.

United Airlines is also allowing middle seats to be booked. Delta and Southwest airlines both plan to wait until autumn before they begin fully booking planes, while low-cost US carriers are split evenly between the two stances.

Delta chief executive Ed Bastian said the airline’s customers had praised its decision to fly at a maximum of 60 per cent full until the end of September. Historically, half of Delta’s revenue has come from business travellers and the airline, whose fares are generally higher than those of its US competitors, says it offers a better service.

“I’d rather add more flights back . . . than try to maximise the number of people you can put on an individual aeroplane,” said Mr Bastian. “That would be inconsistent with the brand Delta represents.”

Yet the divergence within the industry risked undermining consumer confidence in air travel overall, Credit Suisse analyst Joe Caiado said in a note.

“Heretofore, the one sacrosanct rule in the cut-throat world of commercial aviation has always been that airlines never compete on safety,” he said. “However, as the industry has scrambled to adapt to the new world environment, cracks are emerging in this long-held industry notion . . . A more co-ordinated, universal industry approach is important to ensure the devastating effects of this crisis are not actually more profound than they need to be by eroding consumer trust in the system.”

How full planes need to be for US airlines to book a profit has fluctuated over the decades, rising from 57 per cent in the 1970s to 81 per cent 10 years ago. Since then the break-even point has drifted downward. In 2018, it hit 75 per cent, while the average US flight was 84 per cent full.

Chart showing how social distancing threatens US airlines’ ability to break even

Passenger numbers plummeted in the worst months of the crisis, even as airlines cancelled flights. US airlines filled just 22 per cent of their seats in late April and early May.

With emptier planes, whether from reduced demand or because airlines are blocking middle seats, the fixed and operating costs for a flight are spread among fewer passengers.

An airline’s cost per passenger on an Airbus 320 that has filled 80 per cent of its seats is $86, according to the International Air Transport Association. That cost rises to $129 when it is only two-thirds full.

Airlines for America, the industry’s lobbying group, declined to comment on how empty middle seats could affect fares or whether carriers could continue to operate with planes that are only two-thirds full.

Raising fares to cover higher costs per passenger would kill demand, said Ben Baldanza, an economist at George Mason University and the former chief executive of low-cost Spirit Airlines.

“It’s not that [airlines] wouldn’t be viable,” he said. “It’s just that you would have to double the fare, and when you double the fare, airline traffic falls nearly to zero.”

The middle-seat debate ignores the reality that even when airlines do reserve it, 18-inch seats mean passengers remain closer than the 6ft gap recommended by health experts. A spokesperson for United called it “a PR strategy, not a safety strategy”.

Spacing passengers 6ft apart on a narrow-body jet would result in a plane between 11 and 16 per cent full, according to a June study by UBS Evidence Lab, the Swiss bank’s data science division. A wide-body would be 16 to 21 per cent full.

Mr Baldanza said Senator Merkley could better prevent virus transmission if Congress required face masks to be worn on aeroplanes, akin to the federal seatbelt law, instead of focusing on middle seats.