This was a component study exploring the area of substitutes for a later more complete strategy analysis paper of a airline industry company.
Although flying was once a luxury, it has become the go-to means of travel following deregulation in 1978, in particular when it comes to longer distances. With many airlines offering budget rates, flying can be inexpensive and quick. However, that’s not always the case and some have looked for alternative means of travel to avoid extended travel time and hidden charges.
A two-hour flight can take double that amount of travel time due to transportation required to get to the airport in outlying areas, long check-in and security lines, transfer times at hubs, waiting for luggage to arrive at the other end, etc. Many budget airlines have hidden charges such as airport taxes, fuel surcharges, luggage fees, and food and beverages purchased onboard. Plus, there is gas to get to the airport and parking fees.
An obvious option to flying is to drive a personal vehicle or a rental car. Driving gives one the freedom to make stops along the way and explore the area. However, there are certain obvious and not so obvious costs involved, such as fuel, insurance, wear and tear, parking, repairs, hotel stays, etc. Plus, the driver(s) may experience fatigue and depending on the distance, driving may not be feasible given the amount of time required. According to the 2001 National Household Travel Survey (NHTS) the average miles traveled by car was 314 miles one-way for long-distance vacation trips, and 212 miles one-way for all other long-distance vehicle trips.
There are some advantages to taking a bus verses an airplane. Most bus stations are centrally located so there is no reason to find transportation to a remote airport. You can arrive 30 minutes prior to departure, still get a good seat (in terms of seats on a bus), pack as much luggage as you wish (within reason) with no additional fees, and be assured that your bags are on the bus with you. Typically bus routes are less expensive but do require longer travel times than an airplane.
Trains offer many of the same advantages as buses with centrally located stations, short wait times, and rarely are there additional luggage fees. Additionally, on trains you can get up and walk around and engage with other travelers, providing a relaxed environment. There are sleeping accommodations for overnight trips and dining cars.
In certain instances, the only option aside from flying is to take a boat – ferry, cruise ship, freighter, etc. Generally, ferries are the least expensive of these options and for distances over 24 hours there are typically staterooms and you can bring your car with you if you are looking to venture farther on your journey. Cruise ships and freighters can be more expensive than ferries and will always take more time than flying. Cruise ships do not generally do point-to-point travel, although some longer voyages can take you across oceans in luxury. In the United States, there are not many ferry options that compete with air travel. However, in Alaska many communities are land-locked and the only options are boat or plane. When comparing an Alaska Marine Highway route from Bellingham to Juneau ($424 and 61 hours) and a Delta flight from Seattle to Juneau ($166 and 2.5 hours) we see that both the travel time and cost are much higher for the ferry than flying. The main reason for ferry travel is to take belongings from point to point, and for the overall experience.
When evaluating these substitutes, we should compare costs, travel time and safety. On a few select routes we see that airline travel requires less time, although on routes less than 250 miles, such as Boston to New York, Seattle to Portland and Chicago to Detroit, once we add travel time to an airport, required check-in time and security requirements, we are looking at comparable total travel time with passenger car, bus and train options. However, the costs for airfare are significantly higher for these segments as compare to the substitutes at nearly five times the cost in some cases.
For long-distance travel, we see an advantage in air travel when comparing time traveled and cost per ticket, such as the case in Seattle to Los Angeles and New York to Atlanta. Not only is the travel time significantly lower for airline travel, but the cost is comparable or lower than passenger car, bus, or train.
Another factor consumers consider when planning travel is safety. By far, we see that travel by passenger car is the most dangerous, with all other modes being relatively low. Travel by plane is 3.2 times safer than driving. Although, a large plane crash receives a lot of media attention, and causes multiple casualties (often the whole plane), there are relatively less accidents per mile traveled.
One sector of travel that provides an additional substitute is business travel. Many companies and government agencies have restricted business travel to save costs. Virtual meetings have become popular and it is inexpensive to use tools like Skype and GoToMeeting to conduct business meetings across the globe. This poses a problem to airlines because, “Business travelers account for 12 percent of passengers but are typically twice as profitable for airlines. On some flights, business passengers represent 75 percent of an airline’s profits.” (investopedia) This means airlines are in greater competition for the business traveler than other segments of the market. Thus, we have seen airlines upgrading their cabins to include more business class seats that recline fully and flat-bed seats. Many airlines are also upgrading their business lounges in major airports.
Looking to the future, other substitutes may include teleportation and space travel; however, the costs and safety risks may be too high for the average customer.
Notes:
Greyhound Seattle to Los Angeles $68 to $96 (29 hours)
Delta Seattle to Los Angeles $87 to $106 (2 hours 45 minutes)
Amtrak Seattle to Los Angeles $98 saver (35 hours)
Car – 1137 miles, 17.5 hours, $213 per person (2.6 mpg @ $3.00 per gallon, maintenance 5.5 cents per mile)
Greyhound New York to Atlanta $60 (22 hours)
Delta New York to Atlanta $141 to $161 (2 hours 45 minutes)
Amtrak New York to Atlanta $124 (18 hours)
Car – 873 miles, 13.25 hours, $164 per person
Greyhound Minneapolis to Houston $107 (26 hours)
Delta Minneapolis to Houston $180 to $269 (6 hours)
Greyhound Boston to New York $19 (4 hours 20 minutes)
Delta Boston to New York $66 (1.5 hours)
Amtrak Boston to New York $49 (4 hours)
Car – 217 miles, 3.75 hours, $41 per person
Greyhound Seattle to Portland $18 (4 hours)
Delta Seattle to Portland $90 (1 hour)
Amtrak Seattle to Portland $26 (3 hours 20 minutes)
Car – 174 miles, 2.75 hours, $33 per person
Greyhound Chicago to Detroit $37 (5 hours 35 minutes)
Delta Chicago to Detroit $75 to $166 (1 hour 18 minutes)
Amtrak Chicago to Detroit $37 (5 hours 40 minutes)
Car – 281 miles, 4.3 hours, $53 per person
All fares based on lowest fare, one-way travel on 6/1/2018 travel date
References
Is it better to drive, fly, take the train, or take a bus?https://michaelbluejay.com/airfare/modes.html
Business vs. Leisure travel – https://www.statista.com/statistics/207103/forecasted-number-of-domestic-trips-in-the-us/
National Household Travel Survey http://nhts.ornl.gov/briefs/Vacation%20Travel.pdf
Business travel, which accounts for 17 percent of long-distance trips during the remainder of the year, accounts for only 7 or 8 percent during the Thanksgiving and Christmas/New Year’s periods. Because many workers take time off during the holidays, it is not surprising that the percentage of long-distance commute trips drops to only 6 percent at Thanksgiving and 9 percent during the Christmas/New Year’s holiday compared to 13 percent for the remainder of the year. – USDOT – Bureau of Transportatin Statistics, U.S Holiday Travel
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