How Tech RUINED Flying - Company Forensics
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- Опубликовано: 14 окт 2024
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Let’s start talking about how you booked that ticket.
Back in the 80s, as you were sitting at the travel agency, that nice lady would have used a platform called Sabre to find the ticket and book it.
Sabre is one of 3 or 4 of the largest GDSs, or Global Distribution Systems, and their job is to make all fares from different airlines indexable, and to allow these travel agents to book the flights, electronically.
So that travel agency would have probably made a 10% commission on the price of that ticket- which the airline was happy to pay, because the only alternative was having a branch of their own.
Fast forward to today, and the middle-man (or middle-lady) of the travel agency is all but disappeared. When platforms like Expedia or Orbitz or Travelocity (bullshit- did you now they are all the same company?).
Anyway, these online travel agencies came to life precisely to monetize on that 10% booking fee.
They still connect to platforms like Saber, but it was much more efficient to convince you to buy flights online, than employing real humans in Manhattan- and of course, you also could scale, all over the world!
It was great business. It is still great business. They no longer make 10%, it’s under 5% these days- but still, we are talking billions of dollars in flights.
And you not only shop at Expedia or one of their alt-names because it’s convenient for you, you shop there because they have made it their mission to help you find great deals.
Because the single most important factor for most travelers is money.
So in 2023 you boot up your favorite platform, search for that NYC to AUS flight, and you are presented with over 100 flight options per day.
Not only that, you can use the date grid to find out pricing if you fly a day earlier, or a date later- or compare fare restrictions side by side, even leg room.
Now, you may be willing to spend a little extra to fly on the airline where you hoard your frequent flyer miles, might throw a little extra to fly direct vs having a layover- but how much is that, really?
The rise of Expedia and other similar platforms not only gave us that ease of use, it literally put airlines right next to each other to give you the most efficient, convenient and cheap way to get to your awkward family weekend.
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What's the worst experience you've had when traveling?
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this was interesting, it's something i hadn't considered before. TIL thanks guys
This video has altered my perspective on travel and highlighted my own ignorance on the topic. Thanks for that.
Just what we're here for.
- Caya
I was a frequent economy class flyer and surprisingly didn’t experience too many of the usual OTT drama. Once I landed a high paying job , I was still reluctant to give business class a go because - IMO - it was just a waste of money! Alas, I was diagnosed with a life changing medical condition,so finally decided to jump into business for more space, convenience and dietary needs on demand , and the rest is history as they say. Didn’t look back ever since! Qatar airway customer here!
I'm holding off on business because I know I'd never be able to go back and I rather splurge money at the detination
@@SF-eo6xf haha touché! Trust me, as soon as you make the jump, you just don’t see yourself receding back into economy! I am a frequent flyer with Qatar Airways and the sort of additional perks they give you are world-class and 2nd to none 😂. So i say hold it off for as much as you can hahaha 😭.
why not splurge on a luxurious hotel than a few/several hours on a flight?
I've never paid for a single business-class ticket in my entire life. I've been upgraded multiple times, but I just don't feel like the 2x cost is worth it, neither when I fly out of pocket, or when the company pays for it.
- Caya
@@slidebean Do you have to say, "Do you know who I am?!" in a sarky tone to get upgraded to business?!
I loved using travel agents. The big reason to use one was if there was ever a problem with cancelled or overbooked flights, emergencies that meant you had to cancel, or medical emergencies on trips that meant you had to change your itinerary, it was literally their job to figure out a solution.
😯 I never walked into a travel agency. My parents definitely did, but I think I was a couple of years late to that.
Caya
I used to work in one in Mexico and the difference between traveling on your own and with a guide or on a schedule is night and day.
If you go on your own you are very prone to get lost somewhere, get ripped off by pretty much any tourist trap, getting mugged and the like.
For instance, when I traveled to Europe with family members we got pickpocketed once, couldn't visit nice places due to a lack of knowledge of where they where and over all we didn't spent too much time on the nice places we visited.
A few years later I went to a trip with my friends and things were way safer, we got to see better places, visited various museums and we even spent less on things like food and souvenirs.
When you take out the people the quality goes down.
Worst flying experience was ages ago when I flew from Moscow to Chechnya on an old Soviet jet and the ceiling fell during turbulence. It was panic everywhere and a passenger got up and demanded that the plane must land, and he fell twice, because of the hard turbulence. The flight crew had to tie him up. But everything was okay and the flight landed on time and I'm still alive ;)
Love that this examined the consumer mindset in this industry. It's insane what a terrible business it is nowadays and for many airlines it's a loss leader and some only make money off the back of their loyalty schemes 😲
This was a very interesting breakdown of the history and factors that go into the ticket price. I can tell that you are mainly talking from the US domestic flight experience - e.g. the overbooking factor - but as a Brit experienced in Easyjet/BA Go!/Ryanair/Jet2 and now living in the far east I can echo many of these points. I don't mind using the budget airlines for shorter trips within Europe, and luckily only witnessed one bad incident of air-rage. Pre-Covid, I flew from Hanoi to Ho Chi Minh city - a journey of 1000 miles - and it cost me about $50. It was a really comfortable flight and took about 2 hours. There are many budget airlines in the Far east that are the equivalent of the ones I used in Europe but my experience on these has mostly been better.
Thank you Caya & Slidebean team for doing a segment on travel! I am a travel tech founder and an avid subscriber since 2020. (I promised a trip to Caya when my startup makes it). I was very small when I started flying from DRC to Rwanda. Those were the days! I still remember. I have flown business class on an upgrade. It was comfortable. I don't mind economy so long I have space for my feet. This was a great video. Thank you
Flying was always a rich thing. They just added a poor section to the plane.
Broadly speaking business classes on airlines are the least profitable. It’s the coach where airlines generally tend to generate the most revenue, hence the budget airline revolution of the past few decades.
I consider myself a quite experienced traveller, but last week I took a flight where I felt scammed due to stupid fees. A really low coster in Europe. Ticket in the 15€ range. I forgot to do the free check-in online because it was a present and didn't check the policies. Checking-in while dropping off the check-in luggage was 90€ service...
I had to pay 100$ for a 60$ Wizzair ticket during corona just to print my test certificate that was on my phone…
Lol, that s how they really fo money low cost flights but really high fees
Good news! After a long correspondence with the help of chatGPT I convinced them to give me the money back
Very enlightning this video! I found this channel a month ago. A fun fact: the meme you used while at timestamp 10:40 is a Brazilian meme from a soap opera character, Nazaré Tedesco, played by the actress Renata Sorrah. In the scene, she was just arrested and was cleary confused, remembering previous conversations that led her to this ending. Brazilinas applied the math formulas to increase the confused fealing. I know this because I'm a Brazilian.
Great channel, I'm loving every video.
Some of our editors are deep into the LATAM meme scene 😬
Well it's important to notice what you compare. For exemple I have been travelling between Brazil and Europe for the past 10 years and before Covid I used to pay around 750$ round trip. Now the same trip is around 1200$ even if I book a year in advance.
So when I answered that flight did get more expensive this is relative to a timeframe I can compared it with. And I don't think inflation 2019 750$ has the same value as 1200$ in 2023.
I believe that airlines had to increase their price with the rise of fuel price, but now that it has backed down, they haven't reflected the price onto consummers.
Yes and you’re right there’s been a spike post covid, there’s several shortages in the industry combined with increased demand so prices had to go up. The poll and the premise of the video is misleading, because many people have seen rocket bottom flight prices over covid immediately followed by the boom. The truth is somewhere in the middle. Compared to 5 years ago travel is definitely more expensive, but compared to 10 or 20 years ago the opposite is true.
I’m 6’2 and on long flights I really suffer, it’s so uncomfortable
Well, the price I paid for my ticket pre 2021 was +-£670 since then my ticket now costs +-£1900 so flights in my experience have definitely not followed what you're saying. I used to have 27kg luggage allowance and now I have 20kg. I just came back from a trip and got nailed for £65 for being 1.1kg over allowance. I'm told that the decrease in weight allowance and stricter control is because they now have an allotment of cargo hold for parcel logistics so travellers are competing with this for space on the airline.
I wound say that double booking is an inexcusable thing to do, if margins are that tights, just raise the price to cover that margin like a lot of businesses have to do. ofc this probably won't happen before it's made illegal by law, since some business managers thinks that low margins is an excuse to sell something they don't have.
Idk airline travel is fine for me I haven't witnessed any of these violent events in plane, the only misbehave i saw was passengers emptying their overhead luggage a bit sooner. Plus don't you have to choose a seat at the time of booking? There's no overbooking issue here in India as far as I've seen but I've only travelled in Indigo so Idk about other airlines. Plus the crew is always so polite I feel bad for them cz some douchebags harass them (I've seen in news). I think it depends country to country.
Those airlines that "adapted" to external pressures in the free market also received government bailouts at various times
yeah, airlines needed it...since we the consumers forced airlines to have such thin margins...would you start such a complicated business with 1-3% margins?
they also still use subsidies when they fly to lower population areas, and don’t pay a lot of the infrastructure cost
I came from a working class family and my parents maybe flew like 3 times before I was an adult. I fly at least double that per year now.
Flying in or from Canada is a whole different ball game.
I really appreciate what airlines do for us...running such a complicated, capital expensive business for such slim margins is not worth it....yet there are people who do it for us....god bless airlines...thank you
LOL, not the point of the video- but fair conclusion.
- Caya
Well, here the people running airlines are living a luxurious life. They receive huge salaries and bonuses every year from tax payer money. Therefore people here don't respect them. They still let a lot of workers go no matter how much money the government gives them during crisis like e.g. Covid.
Yes. I'm one of the very few people who appreciate the service and the comfort, and I'm ready to pay for it.
The alternative on offer is the current experience of commercial flight where, for the entire duration of the commute, the passenger is constantly reminded of the worst traits of the human nature...
Good explanation, I’m in revenue management for hotels and several of the points you make here are relevant to hotels. We use GDS, OTA’s and revenue optimisation systems to charge dynamic prices. Maybe your next company forensics 😀
one of the best lately, thanks!
If you fly economy, at the very least upgrading to "extra legroom" is a very significant comfort improvement versus standard economy. The "extra legroom" paired with strategic seat selection makes economy okay. I can only do regular economy for flights 2 hours or less.
I really like your approach to this topic!
Ever considered that passengers cannot afford to pay extra to travel so they have little choice but to take the lowest fair offered. Especially as it seems every Tom, Dick and Harry right now is seemingly price gouging their customers for the very basic requirements to live, such as food, shelter, electricity etc.
Passengers are not to blame, it is the airlines that want the numbers on their planes, and so are going after every class of passenger they can get as without the volume of low paying passengers, they may have a lot of empty planes flying around.
Keep up the god work slidebean. I love this channel
This is why I choose trains or driving.
Competition usually entails worse service at an exchange for lower price. I'm thinking of intercity bus services in developing countries as a poingnant case. In a free market world, four companies all run the same route at the same time, whereas 1-2 companies might have more early morning or late evening options. In some cases, they even throw away schedules in exchange for the lowest possible fares by ensuring all seats are filled. A true free market world would kibosh mass transit in exchange for THOUSANDS of taxis all trying to jostle for lower fares, despite the former being generally more regularly dependable. We've seen Uber et al. attempt this. And we see exactly this in the developing world.
Love the videos you guys produce
This should have been called Devil's Advocate. Really dope docu.
I work @ an airport. Not for the airlines but for the Port. Airlines are extremely wasteful outside of flighting. They are continually rebuilding 1st class lounges and terminals. The airlines and the airport waste money on huge capital projects to the tune of billions of dollars. In the 25 years I worked at the airport they have never stop building. If they used a potion of the money on the flighting experience or the their margins they maybe profitable and enjoyable. Airline’s receive huge tax breaks to build and tear down their infrastructure. There’s a great incentive to be super leveraged as an airline. Great video!
Don’t know when this happened but, I like Caya. Brother just seems genuinely goofy but a genius all in one. Shame y’all don’t post more often
I remember when airlines offered a piano bar and a Pong arcade game in plane's lounge section.
You left out a huge part of the problem: deregulation. To name just one major point, if foreign companies were allowed to compete in the U.S. domestic market prices would go down AND quality increase. You make it sound like the airlines are just scraping by. They're *massively* profitable. Google the earnings and see for yourself.
i know its not a sponsorship .. but thank you for introducing me to google flights !
To answer your question, I would absolutely pay 10% more for a ticket. I travel enough for my job that it’s worth it.
I have flown coach, I have flown first class. The experience 50% of the time sucks. The flights are fine. It is everything around the flight that sucks. Security, cancellations, delays. Except United. They have the most uncomfortable seats.
Very interesting and informative. I'd like to know how the advancements in technology both on and off the plane have had an effect on things from the perspective of the Airlines.
Anytime I get mad about my experience flying I take a step back remember to be thankful that I get to complain. 100 years ago people had wagons, Trains & boats that’d take days, weeks or months to do what an economy seat can do in hours.
Seeing this video will make me shell out a bit more for a ticket.
Experiencing people will make me pay as much as I can possibly afford!
Very good videos slidebean team!! I’ve been watching a few vids now, but the storytelling and possibility to fact-check and disclaimers to keep bias at a minimum makes it even more informative, so thanks and probs to the whole team. You earned my subscription!
Flying is in the US is different in Europe. But in general competition is good to a certain extent. Fierce competition, market disruption and over consumption is toxic cocktail for any business. There is a sweet spot in between. So not a monopoly but at least a few competitors. Some of the tech giants have littte to no competition because they are too big for example which degrades quality of service.
Transparency is also a thing. If you offer a service and you overbook which is a legit action you must offer an assurance to that service. The transaction is based on an agreement. I don’t know the ins and outs but the video shows very discontent people. Again offering transparency in your service offering and conditions should prevent this.
I also had this in a European flight but I got a different flight while waiting and arrived within a timeframe that was specified beforehand, so I wasn’t displeased or expectations were well managed. I flew KLM by the way. Also food and service are good (or at least not like some American Airlines that I flew for work). I don’t know why but I’ve seen and have experienced the difference. And as you said people are not aware what flying actually cost, but if you are American you have no reliable good option other than 🚗, because the train network 🚊 isn’t well developed nation wide in US (or at least not on the same level as in some European countries. Admitted that america is way bigger and the Train network between countries in Europe could also be improved still.
First got a say that "old old" statement stung a bit. Aside from that, great explanation 🙂
However you are producing these please carry on. They are addicting videos and informative l. I meant to change videos 3-4 videos ago but I keep going
Music to my ears.
- Caya
If you breathily google airlines profits, you can see that they are steadily growing for the last two decades (except 2020 of course). That means those companies still manage to outplay competition freemarket and so on. So technically flights could be even cheaper. But also the prices could be more transparent. So people not get frustrated. Similar to Airbnb cleaning fee.
It’s weird to blame customers for desire of access to transportation to see their families. Also world become more connected and more distributed. I can continue. The price battle between airways the way it is feels outdated. Like from the 90s. Transportation should be universally accessible and not frustrating. And less polluting but that’s completely different topic. (Shout out to high speed rail)
Overbooking and less than the needed space in seats should be illegal. Yes I'm willing to pay a little more for that.
I just want my shoulders to not hit the person next to me on the plane. That's all I really ask for.
worked for one of the OTAs. Flights offer OTAs miniscule revenue percentage: the real money is in hotels. that's why they push hotels so hard ;)
Amazing video. I want to say one thing regarding your company SlideBean:
We have the yearly subscription and we barley use your company but we never canceled the subscription because we still use it here and there. This is because of the low subscription cost.
Please don't raise it because i'm seeing so many companies raising their subscription cost lately.
Thank you
Great content, I wish you get more success in the future
My #1 focus on flying is TIME
Flying got good again thanks to TSA pre-check. It actually resembles the pre-9/11 experience.
I'd happily pay double if we weren't treated like airborne livestock
You still get a pretty good treatment in Business or First Class.
- Caya
@@slidebean first class ! one can dream 😄
Great review of the subject! I’ve been flying for decades and I see a lack of civility today as main reason for worsening flight experience. I dream of flying first or business class but it’s outrageously expensive!
To put it in more simple terms: what industry has not changed its pricing significantly for the past 50 years?
well for sure the one who have pricing power did and on the upside
Cinema!!!!
Do you know how hard your ancestors would punch you in the face if you told then that for a cheap price you could transport yourself around the world in a few days? But still complained because you werent being pampered? Meanwhile they had to spend weeks or months to do the same task and spend alot more. I think it would be a knock out blow.
@AzureWolf168 im 6' 2" and its not comfortable to fly in economy. But its luxuxy compared to the months boat ride or wagon convoy that my ancestors took. Also alot cheaper. So i feel i would be rather entitled if i cried because im not flying in 1st class. But yes we really do tend to whine about petty things.
Jose, how does you implement chartmogul? do you add a script tag in the code, or how do you connect your data to the service?
Depends on where you charge your customers. We connect directly via the Stripe API, but they support a bunch of other data integrations
The clip at the beginning has a ton of Karens. I feel so lucky to never have dealt with that.
I wonder if you could have a star rating system for your fellow passengers "A4 one star, cut toenails during flight" then you could get discounts if you had 5 stars? Or if you could just cluster people with similar tastes. Eg, an "All Parents" flight would be fine since all the screaming kids would annoy everyone equally and no one would not expect screaming children? Or a "sober flight" where only people who didn't want to drink would be on the plane, etc.
This is some Black Mirror stuff, but I approve it.
- Caya
So the jist is it's the passengers' fault that they want to fly cheap (and angry - rus. дëшево и сердито). You're lucky you're obscure with main points or the commenters could've eaten you alive 😅
Optimizing (meaning decreasing per owner of, through decreasing the number of owners 😅) overhead costs, skimming variable costs, Americans themselves being far more pretentious/conflictuous, capital flight (pun intended) from the aviation industry towards tech at least... Many more reasons; NonStop Dan covered some of them
Here's another shitty pricing tactic that might make everyone's life happier: Instead of advertising the cheapest fare and charging extra for everything, do it the other way round: Advertise the fully loaded fare while making it clear that it includes every perk and you can remove each one of them as you like for a cheaper ticket.
Maybe this could help airlines earn more (and passengers travel better) for 2 reasons:
1. Most people probably don't know how much more the same ticket is for the best experience because they don't bother in looking up, and maybe if shown they would go with it.
2. If instead of having to pay for extras you could "configure your discount" by removing those extras, maybe people would settle for a higher ticket price, because in general people don't like to feel cheap, so they would end up paying for additional features they wouldn't pay for if they had to add them on top of the basic fare. And maybe everyone would feel happier in the process.
I for one would pay $350 for all the bells and whistles if I were given the option to trade down to a more basic experience that costs $300. Trading up from $300 to $350 for some (to me unkown) psychological reason feels more steep and harder to justify. Maybe some behavioral economist could shed some light on whether this is a good idea. What do you guys think?
The reason people think flights are expensive is because real wage growth has been lagging behind
I never heard it pronounced “Travel-Oh-City” before. 😂
We are in golding age in flying. It cheaper now to fly than it to get the train for a simular trip. Like how much dose it cost to get a bus from NYC Huston?
Why should cheaper always be the goal? It’s not either or choice, where it’s “cheaper” or “more expensive”. The industry would appear to be pretty close to a cartel. You made a big point about deregulation. Who do you think insisted on deregulating? Where was the talk of the constant bailouts when they fail? How is that not still government intervention? The difference pre 1970’s is that customers used to receive something for that intervention. Airlines don’t offer an alternative experience because they know they don’t have to. They know they don’t have to treat you like a human because you will always be back. The problem is not “you” as you put it, it’s a neoliberal economic system which fixates on price and share price. At best this is corporate gaslighting. Spare me the “your the problem and you should be thankful” argument. In a “free market” most airlines would have gone bankrupt decades ago. Airlines actively prevent progress and alternates. So I guess we are stuck with the same terrible choices, and videos conceding as much.
In India, flying is still a luxury and people use trains to travel long distances. But we are experiencing similar phenomenon as USA wherein flights are getting cheaper.
But in the past 5 -10 years, 3 major airlines have gone bankrupt. The ones that are surviving are the companies that operate on a very thin margins and offer sh!tty customer services, charging extra for every minor convenience.
Tldr: "The middleclass people can fly."
Salaries don’t grow evenly with inflation 😂
I used to say, that for the pricetag of an average Ryanair flight (sometimes it gets down to 20 EUR) I am up to stand in the cabin for the whole flight. I do understand the economy of it and I am ok with that.
Flying, Airbnb, and Uber.
Completely disregarding customer/seller experience.
Coolbeans and all but spending power has gone down as well
Bro thats a ton of caveats. Not everyone can just choose to fly mid week and work remote. IME the affordable flights are only awkward days, very early, or very late. Any time I look for a flight at a time i could reasonably get to the airport and not have to take 2 weeks off to enjoy one week of vacation, they're double to triple the advertised price.
A true story here:
A company who shall not be named decided to save a few pennies and send their employees on a company trip from Europe to Subsaharan Africa in ECONOMY class. So everybody and his dog except one guy presented a medical certificate, that sorry no dice due to health reasons. The one guy just said "won't do it" just like this. So the company decided to make an example out of him. He was invited to his manager to be handed a note (i.e. a punishment in labor law). The manager summed up the whole case first and asked him if he had anything to add. The guy said, he prefers to remain silent as he is in contact with his lawyer and was asked by his lawyer not to make any statements and to forward any notes to the lawyer. Needless to say, the note was never given to the guy.
I would pay 10% more for every flight if they werent delayed like crazy, service was good.
Besides flying being more affordable, it's also much safer than 4 decades ago. Modern air travel is very safe.
Certain CEOs of airlines have said they would NEVER invest in airlines. It was never a good investment except just following the War
0:36 - sausage looks fine
I can assure you that there are plenty of us who are all too aware of the difference between $300 in the 80s and $300 now. We're called Xers.
I watched a fascinating RUclips video that covered the way that Airlines don’t make any money selling seats anymore. They make all their money off credit card partnerships.
Commissions are still around 10% today... unfortunately...
Very nicely produced video on a broadly accepted theory that flying is actually "cheap". It is just - in my extensive frequent flying experience - quantitatively very, very wrong. The big price drops happened after deregulation and then again from 1995-2005, and ever since prices are on the rise.
In 2005, I purchased a bundle of 10 roundtrips from Europe to the US with each roundtrip being between $250 to the East Coast and $310 to the West Coast. And that was in seats that were 34" pitch and 18" wide and those fares were upgradable.
Today, you'd pay 1100 - 1300 for an upgradable fare and that would be on a plane with terrible 17" wide seats and the upgrade would not clear.
And also in contrast - today's Business products are vastly better than those in the "Golden Days" and business class got absolutely less expensive in the last 30 years. You get much better value today and infinitely better value for money.
So your theory isn't wont but it's very incomplete.
I love overbooked flights.
I accidentally changed the sharing configuration of the financial model I got from you guys, and now I cannot access it. Please Help!! I've send several emails without any response which I found very unprofessional!!! Please Help!!!
In the end, Consumer are to blame, they want cheaper prices and expect good service, you can’t have it both ways 😒
imagine how much an iphone was in 1983
At start I wanted to argue that it is now basically "public transport" and that people are the problem :D And after a minute or so the real video begin and you said it yourself :D
That said, being dragged from the plane by your arms and injured to the extent that you require hospitialisation (United) is a purely modern phenomenon. Edit: 18:33 I'm now finding out why it's better to wait for the end of the video before commenting
😌
You know what’s a nightmare? Your chances of dying in a plane were higher in 1960 than in 2020.
44.159 per 100 million aircraft miles in 1960
Curtly it’s around 0.07 deaths per 100M miles.
I’ll stick with my uncomfortable tiny seat over dying in panic in a comfy 1960 plane, any day.
Ouch.
- Caya
Now go lookup deaths per 100M miles in a car or motor vehicle. 😅 It will eclipse those numbers.
"I'm not even that tall" AHAHAHHHAHAHAHA
????
@@jackiedelvalle the dude is a midget. He could fit in the luggage.
I remember smoking on the plane, good meals and great service
Yeah, I remember when people could smoke at the back!
Personally I wouldn’t mind paying a bit more if the price was consistent
Flights aren’t bad now, you’re just too poor to afford the good experience. The people in the 50s and 60s were absolute ballers
Is this a US poblem? I never experienced such things.
No, it's the same in Europe when using budget airlines.
finding it very frustrating that one of the biggest reasons for why we dont understand the actual value of tickets is missing: because a ton of people are fucking broke.
Not rich, my flying experience is great but I only flight delta and have status.
❤❤❤❤
I hate airports, for me this is the passive-aggressive place in the world. I never had a bad flying experience, not saying that Brazilian airlines are great, but the level of the service was compatible with the price I paid
Azul is the best one
This guy need to control his left hand.😅
???????
Simple answer build rail network for middle class
Did you see the high speed rail from Orlando to Miami?
Simple
Spirit is actually not that bad.