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Airline industry’s ‘calculated misery’ shows an embrace of inequality

My coach-class seatmates and I were willing to cut Air Transat slack for stranding us for hours on a plane that had been diverted to the Ottawa airport on Monday because of bad weather. We'd boarded more than 12 hours earlier in Marseille for what was supposed to be an eight-hour flight to Montreal. But not even bossy airline staff, we figured, can boss Mother Nature around.

The airline tested our willingness to be treated like livestock, however, when we saw the flight attendants handing out bottles of champagne to the passengers in Club. The flight captain had told us that we were "all in the same boat" in this ordeal. But all we economy class passengers got during five hours on the tarmac was a 150-millilitre ration of a non-alcoholic beverage and zero information. If we were all in the same boat, clearly the rest of us were stuck in steerage.

I don't blame Air Transat for this so much as the brainiacs behind the airline industry's latest strategy of extreme service differentiation depending on the fares passengers pay. Air Transat has plenty to answer for in the way it treated passengers on several planes diverted to Ottawa on Monday – especially those on Flight 157 from Brussels, who got no water or air conditioning. But in forcing passengers to fork over extra money to avoid making a miserable flight experience a little less miserable, Air Transat is only imitating its much bigger and profitable competitors.

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Read more: Air Transat passengers confined to plane in Ottawa for six hours, traveller says

The airline industry has gone from basket case to cash cow thanks to the twin strategies of consolidation and upcharging. Shareholders are having a blast. Passengers, not so much. Unless you pay extra to check your bags, choose your seats, cross your legs, exhale normally and otherwise not be made to feel like a lower life form, flying today is hell at 30,000 feet.

Airlines like it that way. Columbia University law professor Tim Wu calls their strategy "calculated misery" and it involves degrading basic service to a level so low that non-masochistic passengers will pay up to avoid the pain. Unfortunately, not everyone can afford to pay these ancillary fees. Those who can't or won't fork over more are made to suffer for it.

Inequality in air travel has never been greater. Katherine DeCelles of the University of Toronto's Rotman School of Management and Harvard Business School's Michael Norton show that physical and situational inequality on airplanes – embodied in cramped spaces in economy class and separate first-class cabins – leads to more incidents of air rage. But don't expect airlines to reconfigure seating or alter boarding procedures to avoid this. Making basic-fare passengers suffer is part and parcel of their strategy to get them to pay up, if not now, next time.

That's because you are unlikely, with a basic-fare ticket, to board early enough to find space in the overhead baggage bin. Unless you pay to choose your own seat, even a regular-sized one, you're likely to end up in a middle seat in row 42. Why are basic-fare customers forced to march through first class on the way to their cramped seats in coach if not to make them feel envious, if not ashamed?

Disaggregated data on ancillary fees are sparse. But U.S. airlines reaped $4.2-billion (U.S.) in baggage fees alone and another $2.9-billion from reservation change fees in 2016, a year when industry profits totalled $13.5-billion. Although overall profit was down from nearly $25-billion in 2015, it was still night and day from a decade or so ago when most big airlines were technically, if not legally, insolvent. Even Air Canada, which spent the 20 years after its 1988 privatization struggling to remain airborne, is now a star performer thanks in part to ancillary fees.

Air Transat used to be a basic, no-frills leisure carrier. But the 2013 launch of Air Canada Rouge has hurt Transat's bread-and-butter European and Caribbean operations, forcing it to overhaul its fare structure and push customers to purchase extras, just like its much bigger rival. It now even offers a $25 (Canadian) duck lasagna by Quebec chef Daniel Vézina to passengers on transatlantic flights who want more than the bird-sized portion of Shanghai noodles that comes with the basic fare. Tack on the $129 it charges for return-flight seat selection and priority boarding and baggage pick-up and the price of misery minimization starts to add up. Club-class tickets can cost several hundred dollars more.

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Most governments vow to reduce inequality in society. But inequality in air travel suits policy makers in Ottawa and Washington just fine. They are just relieved their airlines are no longer a quarterly report away from needing a taxpayer-funded bailout. Break out the champagne.

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About the Author

Columnist Konrad Yakabuski writes on politics, policy and business for The Globe and Mail’s Comment section and Report on Business. More

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