SPEAKER_02: Free economics radio is sponsored by emergency new immune supporting emergency crystals bring you the goodness of emergency in a fun new popping experience. There's no water needed just throw it back in your mouth. Feel the pop hear the fizz and taste the delicious natural fruit flavors like orange vitality and strawberry burst. Look for emergency crystals wherever you shop. These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease. Free economics radio is sponsored by Capital One Bank. With no fees or minimums banking with Capital One is the easiest decision in the history of decisions. Even easier than deciding to listen to another episode of your favorite podcast. And with no overdraft fees is it even a decision? That's banking reimagined. What's in your wallet? Terms apply see Capital One dot com slash bank Capital One N A member FDIC. Today I want to talk about something we hate something we love to hate. At least we say we hate it. But do we really? And if so why do we hate it? These are big questions. So let's start small. Let's start by listening in on a phone call with a man named Troy Jaster. Hi.
SPEAKER_03: Um, we have a flight that's supposed to take off in a couple of hours but got a notification it's delayed. And so I'm looking on your website. Looks like there's probably not a chance that we get in tonight still. But anyway, we have to rebook in one way or another.
SPEAKER_10: Sure. No problem sir. I have a reservation for a party of four. Uh huh. Just a moment let me check our flight.
SPEAKER_02: Hold on please. Jaster is a 43 year old real estate agent and investor in San Antonio, Texas. This past Christmas, he was trying to get himself, his wife Danica and their two young sons to Omaha, Nebraska to visit with grandparents. But as you may remember, the US was getting hit just then with what meteorologists call a bomb cyclone, frigid temperatures, big wind, heavy snow, not the best flying weather. The Jasters had been booked on United Airlines, San Antonio to Houston and then on to Omaha. The delay meant they'd miss their connecting flight in Houston. So United rebooked them for the following afternoon, 24 hours after their original departure time. But Jaster didn't want to wait that long.
SPEAKER_10: I'm really sorry to keep you waiting. I only have one seat available at the end of flight for tomorrow morning.
SPEAKER_03: So then the first available is the 4 24 tomorrow?
SPEAKER_10: Yes sir. Why don't you connect me to whoever I need to be connected to to get compensated because
SPEAKER_03: we are losing a whole day of our trip.
SPEAKER_02: Jaster did get connected with United manager. It took a while and it didn't go well.
SPEAKER_09: I do apologize for this concern about the compensation. It really needs to be submitted on the website.
SPEAKER_03: Okay, so we've been on hold for an hour and a half just to hear you say that there's nothing that you can do at all.
SPEAKER_09: It really needs to be submitted on the website.
SPEAKER_02: Eventually he gave up. Thank you so much, sir, for being patient and understanding and have a good day.
SPEAKER_03: Thank you. Bye bye.
SPEAKER_09: Thank you so much. Bye bye.
SPEAKER_03: Hour and 20 minutes. Yes.
SPEAKER_02: The next day, the afternoon flight the Jasters had been rebooked on was canceled. They could have driven to Omaha. It's around 920 miles, roughly 14 hours. If you drive straight through, although when your kids are six and nine, you might need a few bathroom breaks. And there was that bomb cyclone to worry about. So they stayed put.
SPEAKER_03: My wife has already been on the phone with airlines getting refunds and it's a big bummer.
SPEAKER_02: There are a lot of people these days who think of airline travel as a big bummer. A Gallup poll found that more Americans are dissatisfied with flying today than any time in the past decade. Although interestingly, a different set of data shows that customers rate most American airline companies substantially higher than in the past. That's a strange twist, isn't it? It's like, well, my flight was fine. Safe, clean, on time, no trouble with the baggage, but airline travel? Yeah, such a nightmare. Today on Freakonomics Radio, the first episode in a three part series about an industry unlike any other. We'll get into the economics and the psychology, the agonies and the ecstasies, the sounds and, yes, the smells.
SPEAKER_08: They make these toasty cheese sandwiches on Aer Lingus flights and the cheese smells absolutely awful.
SPEAKER_02: Some people, especially older people, may still think about the so-called miracle of flight every time they get on a plane. For them, the upsides of airline travel are immeasurably large. For others, the miracle of flight can be canceled out by the smell of a cheese sandwich. Where do you lie on the cheese to miracle spectrum? Let's find out. This is Freakonomics Radio, the podcast that explores the hidden side of everything with
SPEAKER_12: your host, Stephen Dubner.
SPEAKER_02: Troy Jaster and his family were not the only airline travelers whose plans got wrecked this Christmas. All the airlines had to cancel flights because of the bomb cyclone, but one airline did much worse than the others.
SPEAKER_14: Southwest has an antiquated scheduling program. That is Sarah Nelson. Spelled without an H, by the way. And I am the international president of the Association of Flight Attendants. We represent 50,000 flight attendants at 19 different airlines. Southwest is not one of the 19 airlines in Nelson's union.
SPEAKER_02: Southwest flight attendants have their own union.
SPEAKER_14: And the flight attendant union actually has been asking for years for them to upgrade the system. And sure enough, the cracks there were shown. This was not an employee problem. This was not even really a staffing problem. This was infrastructure that the airline has not invested in.
SPEAKER_02: Here is a central paradox of airline travel. Running an airline is expensive. Flying on an airplane is relatively cheap. Over the past few decades, airfares have fallen by nearly a third once you adjust for inflation. On many flights, a seat costs less than the gasoline you'd need to drive the same distance. The low-cost airlines like Southwest and JetBlue in the US, or Ryanair and EasyJet in Europe, or JetStar and Indigo and Peach in Asia, they are usually even cheaper than the legacy airlines like Delta and United. But sometimes you get what you pay for. Consider the meltdown at Southwest over Christmas. You might think a big company like Southwest would have state-of-the-art software to schedule and track their employees, but they actually rely on phone calls. Whenever a Southwest flight is delayed or canceled, the crew is supposed to call in to headquarters to get reassigned. Over Christmas, so many Southwest flights were canceled that their phone lines couldn't handle the volume, so their pilots and flight attendants didn't know which routes they were supposed to be working. And once the company lost track of their crews, they had to cancel even more flights. Over the last week and a half of December, Southwest canceled nearly 17,000 flights, more than a third of their total schedule. Transportation Secretary Pete Buttigieg wrote an open letter to Southwest CEO Bob Jordan. Buttigieg called the cancellations unacceptable, and he demanded financial compensation for the stranded travelers. The holiday meltdown is expected to cost Southwest more than a billion dollars. Being cheap can be really expensive. There was a lot of anger directed at Southwest over their Christmas failure, and understandably so, but Sarah Nelson says the anger has been building across the industry.
SPEAKER_14: People were already totally pissed at the airlines. I mean, seats had shrunk, they were closer together, there were major complaints going on.
SPEAKER_02: Right before the holidays, we asked our listeners to record audio diaries from their airline travel. We were expecting a lot of complaints, and we got them. Here's Peter Campbell.
SPEAKER_13: Jetstar are a terrible airline because you've canceled two flights on me. They do not flight Jetstar, they're shambles. Here is Jack Pease. One thing that felt ridiculous that they charge us extra for was a carry-on bag.
SPEAKER_12: It should be an interesting standard to have a carry-on bag.
SPEAKER_02: And here is our cheese-hating friend, Fay Walsh-Druyard.
SPEAKER_08: Nothing is free. There's no free water, no pretzels, so you have to buy everything, and you have to buy it with a debit or a credit card, because there's no cash on the plane. And the cheese smells absolutely awful. There are also probably going to be many bags of the beloved potato chips. Cheese and onion flavor, again, a very smelly thing that I would prefer to not have to experience on any airplane.
SPEAKER_02: The thing about flying on an airplane is it's kind of weird if you think about it. You are in a confined space with a bunch of strangers. You have little control over your physical surroundings and no control over the vehicle itself. You take off and land at very high speeds, and you cross the empty sky even faster, tens of thousands of feet above the planet. Almost nothing about the experience is natural. Most humans, when we face an unnatural experience, we tend to get anxious. When the Brooklyn Bridge was being built in the late 19th century, spectators were allowed to climb up the approach on the Manhattan side, which stood higher than the surrounding tenement buildings. And some people fainted from the height while standing on a bridge. So is it any surprise that flying might make us anxious? And is it possible that we transfer this anxiety about the actual flying to a more tangible set of targets, like baggage fees and canceled flights and stinky food? Because if you do a simple cost-benefit analysis of airline travel, the intensity of the complaints can be surprising. You get to travel a thousand or five thousand miles in a ridiculously short amount of time, often for just a few hundred dollars, to go visit family or do business or lie on a beach. How would you weigh those benefits against the baggage fees, the smelly cheese, the occasional canceled flight? Let's face it, flying on an airplane is an unusual activity that has become normalized, but it's still unusual. And the airline industry is unusual as well. So let's try to understand how it works. We'll start with this man.
SPEAKER_16: David Neilliman, and it's spelled N-E-E-L-E-M-A-N.
SPEAKER_02: Neilliman is founder and CEO of a new low-cost US airline called Breeze. He's also the founder and chairman of a low-cost Brazilian airline called Azul. He used to be a co-owner of the national airline of Portugal, TAP. And before all that, he started another airline that you probably know about.
SPEAKER_16: I think JetBlue is probably the fastest company to a billion in revenue in the history of American business.
SPEAKER_02: Neilliman started JetBlue in 1998. It was low cost, but somehow high gloss. I have a lot of deficiencies, but one gift that I have is I can visualize things.
SPEAKER_16: And I just visualized brand new airplanes with leather seats, with live television and friendly people. I just thought that if we did that, then people would really beat a path to our door.
SPEAKER_02: Neilliman had been working in the industry for a while and he knew it well.
SPEAKER_16: He had all these legacy airlines with all these legacy costs. The service wasn't great. The planes were old. I had met the treasurer of Southwest Airlines who became my CFO at JetBlue, John Owen. And John taught me that you could actually buy a new plane and it was cheaper than buying an old plane, you know, because maintenance was less and you could finance them properly. And so we were able to buy new airplanes. We were able to hire people and put it right in New York, which is crazy because, you know, in New York's place, you can't get in today. No way, no how. But JFK was just this wide open airport.
SPEAKER_02: JetBlue proved phenomenally successful. It set a new tone in airline travel. Easy, fun, normal. Maybe David Neilliman is one we should blame for making such an unnatural activity seem so natural. It's just transportation, people with TV and good snacks. The legacy carriers were still presenting themselves as a rarefied experience. They ran TV ads with glamour shots of jetliners set to Gershwin soundtracks. But over time that changed. I think a lot of them took pages out of JetBlue's book, frankly.
SPEAKER_16: You know, nobody had live television and now Delta has decided to put live TV on all their planes and United as well. And then they all went through bankruptcy and got rid of a lot of their legacy costs. And that helped them a lot. And fuel came down and they were able to start making money and I think they just had to get better because there was a new standard and they said, all right, let's do it. So I don't want to take credit for all of it, but I think you should take a little bit of credit because, you know, it's a much more pleasant experience to fly today than it was back when we started JetBlue.
SPEAKER_02: But there's more to running an airline than creating a pleasant cabin experience. On Valentine's Day of 2007, there was an ice storm in New York that forced JetBlue to start canceling flights. And just like Southwest, this past Christmas, JetBlue lost track of its pilots and flight attendants. Over just a few days, they canceled more than a thousand flights. Passengers were irate. The company's stock price dropped. And David Nieleman, nine years after creating JetBlue, was booted as CEO. Which was very disappointing for me.
SPEAKER_02: But he had another idea. In the back of my mind, I had this thought of a 19-year-old boy, I want to come back
SPEAKER_16: to Brazil.
SPEAKER_02: Brazil is where Nieleman was born. He comes from a Mormon family and his parents lived there while his father was doing his mission and later working as a journalist. They eventually moved back to the States. But when it was time for David to do his mission, he was sent to Brazil.
SPEAKER_16: Because I was born in Brazil, I had a Brazilian passport. So when it came time for me to serve, because I had that passport, I was called back to Brazil. I had to choose where you go. But luckily I was assigned to Brazil. So I went down there and I was in favelas and the slums of Brazil. It kind of made me realize that there was another side to life. And as a 19-year-old boy leaving there, I can just have that distinct impression that I wanted to come back to Brazil one day and kind of make a difference.
SPEAKER_02: When Nieleman lost his job at JetBlue, that day had arrived. By now he was 50 years old and he started Azul Brazilian Airlines.
SPEAKER_16: I rounded up some people at JetBlue. The CEO at Azul today was on his mission in Portugal. So he spoke kind of funny Portuguese. And then another guy dated a Brazilian at Harvard. And so he spoke Portuguese because he wanted to be able to date her. So we kind of rounded up this band and we went down to Brazil.
SPEAKER_02: Like JetBlue, Azul was a low-cost carrier. But the Brazilian airline market was much different than the American market. And from Nieleman's perspective, much more promising. Brazil had nearly 200 million people spread across 3 million square miles. But fewer than 50 million people flew each year.
SPEAKER_16: And that compared to about 550 million in the US. And so we just transformed travel in Brazil. Our competitors were serving 42 cities and today we serve 160 cities.
SPEAKER_02: And from fewer than 50 million passengers a year in Brazil.
SPEAKER_16: Now there's 110 million people. So most of all that new traffic was generated by what we did. It's the most important thing I've really ever done. What it's done for the country, as important, we created a logistics company. Because prior to us being there, if you ordered something online, it would take like two weeks for you to get your package and it would be done through the post office basically. There wasn't a UPS, there wasn't a FedEx in Brazil. And so today we delivered 4,800 communities in 48 hours all over the country. So we take life-saving vaccines and organ transplants to areas that didn't have air service before. We serve the Amazon basin. There are runways where we have to buzz the runway and get all the animals off and before we can land. Because it's a four-day boat ride if you don't go on us. How do you make money? Now that's another issue. It's interesting, Brazil would be making so much money today except for one thing and that's the exchange rate. We invested our money in Brazil. It was 1.6 to 1. And there were times during the pandemic you hit 6 to 1. And 65% of our costs are in dollars. If it was still 1.6 to 1, we'd have a thousand airplanes down there and there'd be 300 million people traveling by air. I always say to our team, this is the land of milk and honey guys and gals, this is like the US market in 1965. I mean to be able to go into a country the size of Brazil and become the largest airline in 14 years is incredible. And so, you know, obviously profits have been held down. We created 5 billion of value and now it's less than a billion, but it'll be back.
SPEAKER_02: When we consumers buy things, whether it's plane tickets or a car or hamburger, we tend to think that the demand comes from us. We want something, we look for it, we buy it. We don't usually think about how suppliers create demand, but Azul did create demand in Brazil or at least they tapped into a latent demand that no one else was supplying. Now David Nieleman is trying to do the same thing back in the US with yet another new airline.
SPEAKER_16: 90% of our traffic is generated. It's not stolen.
SPEAKER_02: That's coming up after the break. I'm Stephen Dubner and this is Freakonomics Radio. Freakonomics Radio is sponsored by Canva. If you need to design visuals for a brand, the online design platform Canva makes it easy. You can keep your brand's fonts, colors, logos and graphics right where you design presentations, websites, videos and more. Create brand templates to give anyone on your team a design head start. Drag and drop your logo into a website design or click to get your social post colors on brand. With just a few clicks, you can save time resizing social posts too with Canva Magic Resides. If you are a designer, Canva saves you time on repetitive design tasks. No design resource, just design it yourself. With Canva, you don't need to be a designer to design visuals that stand out and stay on brand. Start designing today at Canva.com, the home for every brand. It's an uncertain time in fixed income right now. Market commentators obsess over whether the economy will have a hard, soft or extended landing no matter what happens. Vanguard is focused on the journey. Vanguard's active bond funds are supported by an expert active team able to take advantage of today's higher yields. Vanguard active fixed income practices smart risk taking discipline strengthened by Vanguard's low fees, which give its active portfolio managers the ability to help seize the right opportunities to outperform at the right time. That's the value of ownership. Learn more at Vanguard.com slash Vanguard active. Visit Vanguard.com to obtain a fund prospectus or summary prospectus containing investment objectives, risks, charges, expenses and other information. Read and consider carefully before investing. All investing is subject to risk. Investments in bonds are subject to interest rate credit and inflation risk fund. Shareholders own the funds that own Vanguard Vanguard Marketing Corporation distributor. There are many things that people hate about airline travel. Here's one, unless you live near a relatively large city, it can be really hard to get where you want to go. It's not like you can't get there, but it might take a while. You might have a layover or two, and it may end up being pretty expensive.
SPEAKER_16: One of the things that people complain about, it's the lack of nonstop service.
SPEAKER_02: That again is David Neilliman, founder of JetBlue in the US and Azul in Brazil.
SPEAKER_16: As the airline mergers went through and everyone kind of retrenched to their hubs, you saw more and more cities that lost airline service.
SPEAKER_02: The airline mergers over the past few decades have left the US with four big airlines, American, United, Delta and Southwest. Except for Southwest, the others operate on what's called a hub and spoke model. American, for instance, has hubs in Dallas and Charlotte and a few other places. United uses Chicago and Newark and Denver as big hubs. Delta has hubs in Atlanta and Minneapolis, Salt Lake City. If you live near a hub and you want to fly to one of that airline's spoke cities, or vice versa, then you're in good shape. But what if you live in a place like Huntsville, Alabama?
SPEAKER_16: Huntsville, Alabama has become the largest city in Alabama. Cities grown 25% over the last 10 years and air service is down 25% and fares are up. So you know, it's a pocket of pain that we can take advantage of and we can go in there and have some success.
SPEAKER_02: And that's why Nieleman has started yet another low cost US airline called Breeze.
SPEAKER_16: The reason we started Breeze is because we saw that there was less service. 98% of the time we take you nonstop between destinations that you couldn't go nonstop.
SPEAKER_02: Can you explain how you decide on the routes you're going to fly with a new airline?
SPEAKER_16: A lot of people don't know this. This is a holdover from the regulated days, but we are required on a monthly basis to provide the traffic figures on every single person we flew and the average fare that they paid and it all goes into a database and we all have access to it. So we're looking for a route, we can say, holy, there's 150 people a day flying this particular route and there's no nonstop service. There's some gut that is involved because you have to stimulate too. You have to stimulate a lot of traffic and some markets can stimulate better than others. What do you mean you can stimulate? I mean, if you're living in say, Idaho Falls, Idaho, and the drive is 16 hours to get to Disneyland. And if you want to buy a ticket, it's $450 and you connect through Salt Lake, then you just don't go or you take that grueling trip less often. And then all of a sudden someone pops in there and says, hey, we'll take your whole family and you go for $59 each way, you will get on an airplane where you wouldn't have done it before. That's the way you stimulate traffic is by offering convenience service on low fares. So we're just kind of filling the gaps in generating traffic. 90% of our traffic is generated. It's not stolen.
SPEAKER_02: When I look at your route map, it looks like it could overlay perfectly onto inter-US migration over the past 20 or 30 years, which is people leaving the Northeast and going to the South and the Southwest.
SPEAKER_16: As we saw the industry consolidating and going back to their hubs, we saw that there was a really big opportunity for cities like Charleston, South Carolina. It's a cool city. It's the city that everybody says, wow, I want to go there someday, but no one had ever been there before. Not nobody, but a lot of people hadn't. I remember when we announced service there last May, I said, we're starting with these $39 fares and there's a lot of people coming to Charleston this summer that have no idea they're coming here. And now today I think we have 22 destinations out of Charleston. It's just finding those places where people want to go. There's a lot of people from the Northeast that have moved to Charleston, moved to Raleigh Durham. There are migration patterns. And then when they do migrate, they want to go back to where they're from. They've got grandparents there and they've got siblings and they have baptisms and weddings and funerals and all of the things that you have to do.
SPEAKER_02: Neilliman was inspired in part by Ryanair, the ultra low cost Irish airline that started out by flying to lesser known destinations.
SPEAKER_16: So I wasn't really a big believer, but what happened? It was just a cultural phenomenon because all these Brits went to this airport, no one had heard of in Southern France. And they looked at all these French country cottages and said, wow, you mean I can buy this for this much quid? 50,000 quid, I can get it. Next thing you know, thousands of houses were purchased by people in England and they were going back and forth. And so that happened hundreds of times. And Ryanair has been a fabulous success story. It's just unparalleled what those folks have done and the fares they charge, obviously they charge extra for a lot of stuff, but what they've been able to do throughout Europe and all the traffic they've generated is just, it's a marvel really.
SPEAKER_02: A marvel perhaps of logistical foresight, of economic analysis, and let's not forget the decades of aeronautical engineering. But do we, the passengers, see airline travel as a marvel?
SPEAKER_07: I hate flying. I hate flying. I get so stressed before about all the little things that could go wrong. Jet lag sucks. Being stuck in a tiny seat sucks.
SPEAKER_02: That is Meg Rossen.
SPEAKER_07: We live on Douglas Island, which is in Juneau, Alaska.
SPEAKER_02: She sent in an audio diary of a trip she was taking with her kids.
SPEAKER_07: I have Katie, who is 10, Rachel is 12, and James is 14.
SPEAKER_02: And part of the route with her husband.
SPEAKER_07: My husband will come with us as far as Seattle, then he'll go onwards for work in Houston. We are flying to Birmingham because that's where my parents live. It's where I grew up. We haven't been back to England for three years. We'll arrive a few days after Christmas.
SPEAKER_02: Today, they're taking Alaska Airlines from Juneau to Seattle, and then a couple Aer Lingus flights that they booked through British Airways.
SPEAKER_07: We're flying from Seattle to Dublin and then Dublin to Birmingham.
SPEAKER_02: By the time the Rossens got to Seattle, they were starting to worry about the bomb cyclone and all the canceled flights.
SPEAKER_07: So the departure board doesn't look too bad, like not too many canceled flights.
SPEAKER_11: On time, on time, on time, on time, on time, on time, on time, on time, on time, on time,
SPEAKER_07: It's the Southwest flights that are canceled, huh?
SPEAKER_02: But their plane was fine.
SPEAKER_01: Once again, ladies and gentlemen, we thank you so much for your patience. At this time, we would like to invite passengers to sit in the back row seats only.
SPEAKER_05: The back row seats, that will be 32 through 46. Right, that's us.
SPEAKER_07: 32 through 46. They load the plane from the back. Please remain seated until your row seat number is called.
SPEAKER_02: The Rossens trip went really well, and 10-year-old Katie was impressed.
SPEAKER_11: We are on the airplane and we just got our food. It is good food. We have like applesauce and fruit snacks. The airplane has been fairly uneventful so far.
SPEAKER_02: After more than 24 hours of travel, they made it to Birmingham.
SPEAKER_05: Hello, grandpa. Hello. It's good to see you.
SPEAKER_07: I do. Shall we give Gran a big hello hug? Hello. Oh, thanks, great.
SPEAKER_11: And I haven't had a proper hug with mommy.
SPEAKER_14: There.
SPEAKER_07: I'm going to go to the beach. You know, I feel like we threaded a needle with our trip. We had such a smooth and easy trip compared to all the chaos that was around us. So many of our friends got stuck in Juneau. So many of the people in Seattle were not doing the trip they had planned. You can't get out of Juneau unless you're in a plane or on a boat. I personally have flown maybe two or three times in the last year. My kids fly more actually. My son is in high school now and so flies with school for different competitions. Mostly he flies for robotics competitions, but all the kids who are in sports teams also fly in and out. My least favorite part about airline travel is all of the traveling part. I get air sick. I overthink all the things that could possibly go wrong. And I don't like any of it. But I like the experience of being in different places. And that just about outweighs my hatred of flying.
SPEAKER_02: Meg Rossen sums it up pretty well, doesn't she? Even if you hate everything about flying, which she seems to, it can still be worthwhile. But I'm still curious why she hates it so much. Remember how she put it earlier? I hate flying.
SPEAKER_07: Jet lag sucks. Being stuck in a tiny seat sucks.
SPEAKER_02: Is jet lag really so terrible? Are the tiny seats so tiny? Some of this may go back to what I mentioned earlier, the fact that flying in an airplane is an unnatural human activity and unnatural settings can make us anxious. But I think there may be a couple other psychological phenomena at work when we fly. The first one is what psychologists call reactants. That's what happens when you are threatened with a loss to a freedom. And when you're flying, that happens every few minutes. I'm sorry, it's not time for your group to board yet. I'm sorry, your carry-on can't go there. Please end your phone call right now. Please sit down while the plane is moving. Please buckle your seatbelt. I'm sorry, you can't use the restroom right now. Reactants is defined as an unpleasant motivational arousal to the loss of freedoms. And even if the actual freedoms aren't that big a deal, losing them can make you feel resentful, even angry. Reactants may explain why so many people hated being told to wear a mask during COVID. The other psychological phenomenon that might explain our hatred of air travel is habituation. This means that when you get used to something, when you become habituated, it has less effect on you over time. In economics, this is something like a diminishing return. Think back to the first time you got on an airplane. Maybe you were nervous, maybe you were anxious, but you were probably also wowed. The excitement, the views, the whole miracle of flight thing, the way the tray table folds up out of the seat arm. And now think about the hundredth time you got on a plane. Not only do you take the whole enterprise for granted, but you may find yourself complaining about the very things that may have enchanted you 99 flights ago. Habituation in general can have some upsides. It means we're all constantly pushing for more, for better, smarter, cheaper, faster. The downside of habituation is that we may grow spectacularly grumpy about things that our former selves would have been grateful for. Habituation can also make you incurious. Once you take something for granted, you are less inclined to think about how it actually works, to figure out how a given product is actually produced, like airline travel.
SPEAKER_15: Simply to push a single plane back from a gate. There's about 1,200 things that have to happen sequentially.
SPEAKER_02: That is Greg Foran, the CEO of Air New Zealand. He took this job in early 2020. I actually started the day after we stopped our first flight.
SPEAKER_15: And six weeks after I started, we grounded the entire airline.
SPEAKER_02: But things are getting back to normal now, and running an airline has been a big change from his previous job. Foran was chief executive of US operations for Walmart. What's the biggest difference between running a gigantic retailer and an airline? I would say that an airline has more moving parts.
SPEAKER_15: It really is a network like nothing I experienced looking from the outside in. You sort of assume that there will be some complexity in airlines. These are expensive metal tubes flying at significant heights, defying gravity, all those things. But what I've learned is how complex this ecosystem is. Not just for an airline to get right, but for all the suppliers to get right that then allow the airline to get it right. That most importantly, then allow the customer to leave on time, arrive on time, and not lose anything in between. So you can run the airline, but if the caterers can't get it right, or air traffic control can't get it right, or third party airport baggage handlers can't get it right, then the whole system starts to get out of sync. And you of course have this other issue of how important safety is. You can sometimes afford to get some things not quite right in a store. You really can't afford to get anything wrong when you're talking the airline industry.
SPEAKER_02: That obsession with safety is where you get to the number that Foreign mentioned. 1,200 things that have to happen sequentially for a single plane to push back.
SPEAKER_15: This sounds so simple, but getting that boarding underway at the right time is quite important. And people don't want to get the boarding going until the plane has been cleaned. So if the plane isn't cleaned appropriately, then the gate staff, they'll be saying, well, are we ready to go? And they'll be communicating with the crew who are already on board. And the crew are going, not yet, not yet. They've still got 10 rows of seats to do. And if you know that it's going to take 15 minutes to board the plane and you've suddenly lost three minutes, then there's a risk all of a sudden that you're pushing back three minutes late. And that plane might be doing five or six sectors during the day. And so you can end up at the end of the day being half an hour or an hour late. And you might say, well, OK, well, that's what happens. The problem is that crew, including the pilots and cabin crew, might be scheduled to go out at six o'clock the next morning. So if they're, say, an hour late in, they need minimum crew rest before they start their next duty. And so if they lose an hour because they were in late, they potentially can't start until 60 minutes later the next day.
SPEAKER_02: In other words, if one member of one cleaning crew is tired or slow, there can be major downstream effects.
SPEAKER_15: This is the whole network effect, this entire ecosystem that everyone's got to be in sync to run it like a Swiss watch.
SPEAKER_02: We wanted to see that Swiss watch in action. So we reached out to some of the big US airlines. The first one to say yes was Delta. So we jumped on a flight to Atlanta.
SPEAKER_18: So this is Delta's global headquarters. We're situated just north of the airport here. When you say just north, a well-placed golf shot could get us there.
SPEAKER_18: That's correct. Literally, there's runways right over there.
SPEAKER_02: That is Eric Zugschmit from Delta's communications department. Today at the airport, we're going to see some of our experts of operation out in the field.
SPEAKER_18: We're going to speak with the head of who runs our operation in Atlanta, which, as you may know, is the busiest and most efficient airport in the world.
SPEAKER_19: And what are the odds that by the end of the day, I will have had enough exposure and experience to actually fly a plane?
SPEAKER_18: That will take some time. We have yet to get you in a simulator, so I don't know if we can offer that right now.
SPEAKER_19: I am flying home tonight to New York. So you're saying I'm going to go as a passenger, not the pilot. And we look forward to serving you.
SPEAKER_02: Thank you. Coming up after the break, we go behind the scenes at the busiest, most efficient airport in the world. This is Freakonomics Radio. I'm Steven Dubner. Come fly with me. Hey, everyone, there is a new show for you. It's the story of a woman who discovers her uncle's secret life buried inside a low-budget 90s thriller that starred Rob Lowe and Ice-T. The podcast is called Magnificent Jerk. It's a journey through Chinatown gangs, drug robberies, Hollywood reinvention, and a family confronting its unspoken past. Magnificent Jerk, the true story of a fake story about a real life. Magnificent Jerk is an Apple original podcast produced by Pineapple Street Studios, available on Apple podcasts.
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SPEAKER_19: Let's start with just you showing up in the morning. How much do you know about what's already going on at the airport?
SPEAKER_00: My day starts really as soon as I wake up. You check the phone and you make sure that nothing's happened overnight that you need to be aware of.
SPEAKER_19: And when you say nothing's happened, what would you worry most about?
SPEAKER_00: Well, I mean, obviously, safety is our top concern. You want to make sure that everything's very safe in terms of our operations, but also our employees. We want to make sure none of our employees got injured. We want to make sure we didn't have any accidents, vehicle accidents or anything like that. But then you also look at previous days' operational statistics. How did we perform in the late hours? How are we starting up in the morning? You're always very mindful of the weather. Obviously, our business is very impacted by the weather.
SPEAKER_02: Matt Sparks is the Senior Vice President of Airport Operations for Delta Airlines in Atlanta. How did he get there?
SPEAKER_00: I started off as an engineer in our maintenance division working on jet engines. And I was there for about 15 years. I got an opportunity to come to the airport about 10 years ago, and I was going to be the person responsible for baggage operations. Okay. So moving suitcases around the airport. I thought that would be the easiest thing in the world. Because you don't have to deal with people. Well, we'd been building jet engines for 15 years, so it sounded very simple. But I had no appreciation at the time for the vast complexity of airport operations.
SPEAKER_19: Psychologists tell us that once you get used to something, you take it for granted and you just want more. You want it cheaper, better, safer. You want the food better. So can you talk about the gap between the public perception of airline travel, including
SPEAKER_02: the economics, and the reality?
SPEAKER_00: I think the most noticeable gap that we see is rightly so. A customer expects that I've purchased a ticket. There's a 5 p.m. departure. I expect the airplane to leave at 5 p.m. And sometimes there are factors that can impact that that are within our control. And our customer has every right to hold us to task for that. There's other times where it may be weather impact, things that are completely outside of anyone's control that can impact the flight schedule. Does that frustrate you a little bit? Oh, it can at times, but you try to remember every customer on every seat on every flight has a reason to be there. There's someplace that they're trying to get to. There's someone they're trying to connect with. And that's the business we're in. We signed up for this.
SPEAKER_19: We're walking down a concourse. Tell me where we are exactly.
SPEAKER_00: We're on T Concourse, one of our domestic concourses. I see shops on the right.
SPEAKER_19: I see gates on the left. But I think what our listeners would really like to know is like, what else is going on? What are we not seeing that makes this all happen?
SPEAKER_00: It's very much like an iceberg. You know, you only see the top one third. There's a lot of activity. If we walked over to the windows. Let's walk over to the windows.
SPEAKER_00: As a customer, we're all very familiar with the activity that you see in the airport, in the lobby, the trains that take us back and forth to the different gates. But when you look out the windows, you see our agents below wing that are using a belt loader to load bags and cargo onto an aircraft for departure. And then this gentleman that we see here says ALA on the back of his vest. He's responsible for the load of the aircraft. All the weight and balance is accounted for. ALA stands for what? Aircraft Load Agent. He's in charge of the ground activity around the airplane.
SPEAKER_19: Now one thing that I don't see here are fuel trucks. Can you explain why that is?
SPEAKER_00: We've got an underground fuel system here in Atlanta. So you'll see the manhole covers. Who's this guy in the white shirt and yellow vest?
SPEAKER_00: This is a pilot. You don't recognize him without his hat on maybe. But before flight, they come out and they do a pre-flight check. They do a walk around the aircraft to make sure that everything's in order.
SPEAKER_19: There's eight or 10 mini SUVs out there. What are they for?
SPEAKER_00: Well, we happen to have some of our administrative offices directly above. Oh, are you parked out there? I am.
SPEAKER_19: Yes, sir. Is there anywhere you need to go that we can ride along with you? Well, we could take a ride if you'd like. Yeah, let's take a ride. That'd be fun.
SPEAKER_00: Absolutely. You got your key? Well, that's a very important thing. You leave your keys in the car when you park out there. You never know if there's going to be an emergency. You never know if somebody's going to need your car moved. The last thing you want is to find out that the place is burning down and your car was in the way. We're going to take a right and an immediate right.
SPEAKER_19: Oh, yeah. It's a different story down here.
SPEAKER_00: How's it going? Did you guys get it done? Yes, sir. I appreciate it. This is us here. Okay. You know what? I probably got a bunch of stuff. Sorry. Feel free. You're not going to hurt anything stepping on it. We are currently driving underneath C Concourse. So this is the part of the airport that most people don't see.
SPEAKER_19: This is unbelievably massive out here. I mean, when you're a passenger, you come into or go out of one terminal. But here we're just driving and this looks like to me, like four or 500 yards between
SPEAKER_19: each terminal, right?
SPEAKER_00: And seven terminals. What always makes me smile is just you look out the window of the airport and sometimes you see all the activity and it looks like someone turned over an anthill. You just see a lot of busyness moving around. Once you understand the different roles that people are performing, you don't see ants swarming. You see a ballet. So we're at the front of the airport essentially now.
SPEAKER_02: So right now we are underneath T Concourse and we're getting ready to go underneath the
SPEAKER_00: lobby where you would check in. And so the bags will come in. They'll go to what we call the vault. TSA will inspect, make sure that there's no prohibited items. Then it comes out to us where it will go through this sortation and get sorted onto one of these piers.
SPEAKER_02: So when we're looking at one of these piers directly here, like this 101-043 baggage car, that is bound for one particular airplane, correct?
SPEAKER_00: Right. And you can see the green suitcase in the distance. It sorts down to this pier and then the bags will come out and this gentleman here will load the bag into one of what looks to me to be maybe eight carts that are surrounding his pier.
SPEAKER_02: So this looks pretty orderly, but it doesn't look crazily highly technological. There's a lot of human touch here, yeah?
SPEAKER_19: There is. How do you lessen the error rate with all this human touch?
SPEAKER_00: One key investment that you can't really see from a distance, but we've got RFID tags embedded in the white tag that you get affixed to the handle of your bag. And so that RFID tag, we've got sensors throughout this bag system. So historically it was barcode scanning that was causing these bags to land on the appropriate pier. Now we've backed up our barcode scanning with RFID readers as well.
SPEAKER_19: So when bags are misplaced or delayed, is that just a time issue then?
SPEAKER_00: Every stand-up comedian that you'll hear will talk about lost bags. And I won't say that it has never occurred, but the vast majority of the time a bag doesn't get lost. It gets delayed. If you have a flight that's late into Atlanta and you've got a tight connection, it's possible that you can run and make that connection faster than I can get the bags offloaded and get them to the outbound flight. And remember when you fly in, the bags that came with you are going to 20 different destinations. So I've got to have people that take those bags and then do a milk run to drop them off at multiple locations. So I might get your bag, but then the next flight I just didn't have quite enough time to get to.
SPEAKER_19: Considering that RFID technology has made baggage transport a lot more efficient, what's the next technology upgrade that you'd really like to have but you don't have the money
SPEAKER_02: for yet?
SPEAKER_00: Well, it's not necessarily a function of not having the money for it yet, but autonomous vehicles is probably the thing that I'm most excited about. And when you say vehicles, you're not including airplanes, I'm guessing.
SPEAKER_00: I'm not including the aircraft, but really everything else. I've got someone who's loading bags into a cart and then driving those bags out to the airplane. I would love for someone to be able to load those bags onto a cart and then press a button and dispatch that cart to drive itself out to the airplane. I want my employees to be doing jobs that only humans can do, right? It's the interaction with people. It's taking care of our customers. There's a lot of tasks that we do that I'd love to let a machine do for us so that we could put our human capital towards human interactions.
SPEAKER_02: That's interesting because some firms and some industries are really trying to minimize human interaction. Supermarkets now you go and there's auto checkout. So you're saying that you would like to kind of redeploy the human capital to have more human touch in an airport?
SPEAKER_00: There's two schools of thought and we've got both types of customers. You've got customers who say, I know what I'm doing. I know how to transit the airport. I really don't need to talk to anybody. Stay out of my way. And for you, we have the app and we've got self tagging bag kiosks and you know, the sign will tell you when it's time for your zone to board. We've got other customers that may be nervous travelers or maybe they just say, I'm going on vacation. I want to be catered to a little bit. This is an experience. I want to have fun. I was describing to you earlier, the bags get collected in the bag room. They get brought out to the gate. Here in Atlanta, 75% of our customers are connected. They're not originating here. Your bag flew in with you and it's going to fly out on another airplane with you. And so we call those tail to tail bags. I have to offload your bag off of one airplane along with a lot of other bags.
SPEAKER_19: I have to say you love baggage, don't you? I do. I can tell you never left your baggage nerd behind.
SPEAKER_00: I spent a few years doing it.
SPEAKER_19: So baggage is one of how many main operations? I would say there's four primary functions.
SPEAKER_00: There's the above wing function, which is what the customer experiences. Below wing, we break that into two parts. There's the ramp function and the baggage function. Baggage, we've been talking about it. Ramp is all about how we meet an airplane, get the things off of it that need to, put the things back on it, and then safely push that flight. There's a lot of other business partner functions that don't really fall into those categories like fueling, servicing the lavatories, catering, et cetera. And then the fourth function that we oversee at the airport is what I would say is the tower function. That is the nerve center, the brains, the control center that oversees the ground movement of the aircraft, deciding which gates which airplane should park at. And there's a Delta tower and an FAA tower? That is correct. So the FAA owns the aircraft right up until they enter the ramp. I see. This red and white line is... We shouldn't cross that. That's what we don't cross. FAA controls you on the left side of that line.
SPEAKER_19: What happens if you took a left there, we'd get shot down or something? Somebody would pull me over in a few minutes. Oh, that could be exciting for our program. Not good for you.
SPEAKER_00: Whoa. Let me grab this real quick.
SPEAKER_19: So there is a suitcase on the road. What do you have there?
SPEAKER_00: All right, we'll give you a little bit of adventure here.
SPEAKER_02: The suitcase had apparently fallen off a passing baggage cart and now it sat there in the middle of a vast expanse of concrete. Matt Sparks got out of the car, checked the info on the bag and he flagged down a colleague. Hey, Phil, it's going to Salt Lake City at 556.
SPEAKER_00: So it's got about three hours to connect. Will you grab it? I can grab it. Thank you, sir.
SPEAKER_19: You're welcome. All right. So listen, I'm glad you picked up the bag, but it makes me a little nervous that there was just a suitcase sitting in the middle there.
SPEAKER_00: Well, it makes me nervous too. No, that's obviously not the way you want to see the process. Now, it would be fun to find out who that bag belongs to, then write to them in a couple
SPEAKER_02: days and say, hey, just so you know, your bag was rescued by Matt.
SPEAKER_19: Would you like us to do that?
SPEAKER_00: We'll just have it arrive at their destination as planned and let them be happy about that.
SPEAKER_02: We eventually got back to the gate where we started our drive. There was a new plane at the gate.
SPEAKER_00: This one's going to LaGuardia and it departs in 57 minutes.
SPEAKER_02: This points up to what looks like a small scoreboard mounted on the outside of the terminal.
SPEAKER_00: So what we can see here is that I'm still waiting for 144 passengers and I'm waiting for 48 bags, which is to be expected because I'm 56 minutes prior to departure. So we haven't even begun the boarding process yet. If I see that that number is getting down to 13 minutes before departure and I'm missing more than one or two bags, something doesn't seem right.
SPEAKER_02: And is that sign for the benefit of people out here or it's obviously being monitored inside as well? Yes.
SPEAKER_00: It's for the benefit of the crew that's flying the airplane as well as the benefit of the folks that are working the flight here on the ramp.
SPEAKER_19: What are these other numbers upper right? D35, D10, D5?
SPEAKER_00: So that may be a little bit of inside baseball there, but those are some different timestamps that we hit on the countdown to departure. 35 minutes before, 10 minutes before, 5 minutes before. Certain thresholds that we want to achieve by those times. Give me a for instance of a threshold. So D35 is the begin boarding time. D10 is when we should be complete with the boarding. And D5 is when we want to have the door closed.
SPEAKER_02: Matt Sparks apparently had some real work to do, so he said goodbye, went back inside the terminal and handed us off to an ALA or aircraft load agent down on the ramp underneath the plane. His name is Marcus Powell. We asked him to show us a few of the 1200 things that need to happen before a plane can fly.
SPEAKER_19: This is the LaGuardia plane? Yeah, that's gone to LaGuardia.
SPEAKER_04: Okay. And you can see about right there, it'll leave in 47 minutes. Powell's job is to coordinate the below wing operation, loading everything except the passengers,
SPEAKER_02: fuel, cargo, luggage, food, etc. Yeah, that's okay.
SPEAKER_19: Want to go get a snack there? Let's see what they got. You can't get snacks. They might have a filet mignon, you never know. We can't get anything out of that.
SPEAKER_02: A couple baggage workers arrive in a beat up little diesel powered baggage cart, not the slick electric autonomous vehicle that Matt Sparks would like to see. They start loading the bags onto a conveyor belt that leads into the belly of the plane.
SPEAKER_04: Everything is going smooth. They got 29 minutes.
SPEAKER_02: It is going smooth, but then somehow it gets less smooth. The electronic scoreboard shows just 11 minutes until departure, but not everyone and everything is on board.
SPEAKER_04: You still got 10 passengers and 13 bags now. They might be still not making a connection.
SPEAKER_19: I'm getting a little nervous now. I thought there was no tension. You're going to go out on time. We're making that time performance. I know, I know the plane's going to go out on time, but there's only 11 minutes and there are nine passengers who aren't on board yet, right? Are you saying you don't care about them because they're not bags? No, I care about them. They might be on another plane.
SPEAKER_04: If they're on another aircraft, we can't. They might be coming from Tallahassee. They got tight connections.
SPEAKER_02: We decided to go back above Wing to see what's going to happen. We climb up the stairs that lead into the jet bridge, that tube that connects the plane to the terminal.
SPEAKER_19: I'm sorry, we're so in your way. I apologize.
SPEAKER_02: You're good. It was a lot quieter up here. It gets loud below Wing. We meet Antonia White, a Delta gate agent who is wrangling this flight to New York's LaGuardia airport.
SPEAKER_05: Eight minutes prior, we can send the numbers and close the door. I thought we're way past eight.
SPEAKER_19: I thought we should be about zero now, right? Oh no, and the flight is delayed.
SPEAKER_02: Apparently the delay was caused by too many passengers arriving at the last minute with too many carry-on bags. But the delay was just a couple minutes.
SPEAKER_05: So he's closing the door to the aircraft. Cabin is secure. He's just in the jetway. And this will start moving. So he's going to move it back once he gets the OK from the ALA, the ramp agent downstairs.
SPEAKER_02: The ramp agent, Marcus, must have given the OK because the jet bridge now starts pulling away from the plane and then the plane itself starts pushing back.
SPEAKER_05: That's it. And it's over. That's it. Can I just say, this is kind of sad and anticlimactic because they're going somewhere and we're
SPEAKER_19: just standing on the ramp.
SPEAKER_05: We should be going, right?
SPEAKER_19: I'm happy to be with you here, but we're literally standing. When you said, come on, let's watch it happen from here. Wait a minute, Steven, are you not excited about this watch?
SPEAKER_05: Come on, what the freak is going on? What the freak?
SPEAKER_02: Antonia and I stood there for a while. We watched the plane make its way onto the taxiway and get in line for takeoff. It was rush hour in Atlanta and New York. But in the end, everything worked out fine. A hundred some passengers would travel over 700 miles along with their luggage in just a couple hours. Along the way, they might have something to drink or eat. They might look out the window at the clouds and fields and the rest of the planet. Maybe they'd watch a movie or read a magazine, take a nap. Sometimes, most of the time, it all just happens. When it doesn't, it's memorable. It can be painful, like for the Jaster family from San Antonio, who never made it to Omaha for Christmas because of the weather and the canceled flights.
SPEAKER_03: Jaster final entry. We are not going to rebook for any time now or in the immediate future. My wife has already been on the phone with airlines getting refunds. It's a big bummer. We're not going to be able to go see family. She's especially disappointed because it's her family, her siblings and her parents that we were going to see. Our boys are bummed because they don't get to see their cousins. It's been exhausting. I went back into work this morning for a meeting and everybody kept on saying, I thought you weren't supposed to be here. And I said, neither did I.
SPEAKER_02: But when it does work out, yeah, that's good. Here again is Meg Rossen, who flew with her kids from Alaska to Birmingham, England.
SPEAKER_07: This is home for me and it's a home that I haven't lived in for 18 years now. So it's really nice to be with my family and just catch up with old friends and to be in places that are so familiar and to introduce my kids to the places and the foods and the customs. I try and raise my children with both cultures in the home and using English phrases and eating English foods. But there's so many little things when we're here and they get to see it for real and just doing life with them in my culture is really, really special.
SPEAKER_02: The trip wasn't perfect.
SPEAKER_07: I threw up on two of the flights, but I think that always happens to me. So that's just one of those things, really.
SPEAKER_02: If you go back a few decades, airline travel was a luxury good. It was accessible and affordable to relatively few people. This year, there will likely be more than 4 billion passenger trips around the world. With that kind of volume, it makes sense we'll hear a lot of complaints. But I still wonder, do we really hate airline travel as much as we say? I also wonder how much the hatred is driven by the way media works these days, both commercial and social media. They are both really good at amplifying bad news. They're also really good at turning memes into social norms. The bad airline food meme, the lost luggage meme, the uncomfortable seats meme. But do you know one meme we rarely see these days? The one that says fiery airliner crash kills 300 people. Why not? That is the topic of next week's episode. If you go back 30 or 40 years, air crashes were not uncommon.
SPEAKER_02: How did air crashes become so uncommon? Also, 1.3 million people are killed every year on roadway crashes. So is there something valuable to be learned from how the airlines got so safe? That's next time in part two of Freakonomics Radio takes to the skies. Until then, take care of yourself. And if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio. You can find our entire archive on any podcast app or at Freakonomics.com, where we also publish transcripts and show notes. This episode was produced by Ryan Kelly and mixed by Greg Rippon with help from Jeremy Johnston. Special thanks to all our listeners who sent in their travel diaries and to Lillian Bates for helping organize them. Our staff also includes Zach Lipinski, Morgan Levy, Catherine Moncure, Alina Cullman, Rebecca Lee Douglas, Julie Canfer, Eleanor Osborne, Jasmine Klinger, Daria Klenert, Emma Terrell, Lyric Bowditch and Elsa Hernandez. The executive team of the Freakonomics Radio network is Neil Carruth, Gabriel Roth and me, Steven Dubner. Our theme song is Mr. Fortune by the Hitchhikers. All the other music was composed by Luis Guerra. As always, thanks for listening. That last figure, BTC minus 14, is that the price of Bitcoin you're monitoring?
SPEAKER_00: No. Block time compliance, I think. Don't quote me on that one.
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