We are so used to rapid progress in so many fields, especially in the communications devices and computers that we can hold in our hands and that keep getting cheaper. In addition, the media is filled with thrilling advances in biotechnology, robotics and artificial intelligence. It’s hard to imagine that there might areas of our lives in which progress has not only ceased but been reversed.
One area with which many readers are certainly familiar is air travel. I was struck by Robert Gordon’s account of this phenomenon in his marvelous tome, The Rise and Fall of American Growth. Here is what Gordon discovers:
- Speed and comfort in the passenger airline industry have not improved since the 1960s.
- In fact, comfort has declined as airlines have squeezed more seats into the same amount of space. To get the same amount of space which the typical airline passenger enjoyed in 1977, that passenger must pay on average an extra $59. Gordon prices the discomfort of staying in the cheap seats at $15, since most people don’t pay the extra fee.
- Passengers must now pay for meals previously included in their air fares which he estimates at $8 per meal.
- Passengers must now pay for checked bags previously included in their air fares which Gordon estimates at $25 per bag.
- He estimates that the cost of the meal, the discomfort and the checked bags amount to a 24 percent unmeasured price increase from 2008 to 2014 for a now inferior service.
- Gordon estimates that 200 million additional hours of passenger time are wasted each year in post-2001 airline security checks that he believes are an overreaction to one major failure, namely, the security of airline cockpit doors.
- He acknowledges that for those opting out of the extras, sitting hungry in a cramped seat is somewhat offset by the proliferation of entertainment options now available during flights.
- Despite what we’ve been led to believe, there has been almost no decline in the inflation-adjusted passenger price per mile since airline deregulation was initiated in 1978. The great decline in price occurred before then due to the increasing size and efficiency of airliners. What people saw after 1978 was a wider variation in fares depending when you booked.
Since airlines are one of the most energy-intensive industries in the world, the question arises whether the reversing of progress in airline travel is related to energy prices. For fuel alone the percent of operating costs varied between 2004 and 2015 from a low of 17 percent in 2004 to a high of almost 37 percent in 2015.
Airlines struggled with high fuel prices from 2011 through 2014 when oil hovered around $100 per barrel consistently. Now that prices have dropped, the airlines are certainly enjoying higher profits. (See link above.) But their drive to raise prices and cram more passengers in each plane seems to have coincided with pressure from fuel costs.
Thus, high energy costs appear to have the ability to degrade or reverse progress in a key area of the economy. And, any reprieve from those high costs may be short if an analysis done by HSBC Global Research, the research arm of the huge multinational bank of the same name, is correct.
The point is that the notion that everything in our lives is getting better and better, faster and faster isn’t borne out in reality. Gordon’s book provides abundant examples. But the example of air travel seems particularly appropriate to ponder on this travel-filled holiday weekend.