airlines Posts

Has Airline Consolidation Gone Too Far?

Airline consolidation over recent decades

Last week, we learned that the US Justice Department and six states filed an antitrust suit to prevent American Airlines from merging with US Air. The government’s position is that while the merger would benefit the two companies and the air travel industry as a whole, it would have a negative impact on consumers through higher fares and fees. The airlines disagree, claiming the merger would result in improved service for customers; It would also allow American Airlines to emerge from bankruptcy court protection, where it has been since filing in 2011.

It’s Cheaper to Fly Now than in 1999!

Think back ten years ago, what were you doing? Did you travel on any airplanes in 1999? If you did, it cost you more then than it would cost you today. That’s the startling conclusion presented in a Chicago Tribune story about the falling price of air travel.

“Passengers paid 5.1 percent less to travel on average during the early months of this year than they did in the same period in 1999, when fares averaged $332.”

And despite lower fuel costs than last year at this time, airlines are taking a beating with fewer business class and cargo to make up for the low coach seats.

Tom Parsons, of BestFares.com suggests that booking on a Monday, Thursday or Friday gives the lowest fares. “Carriers are eager to fill seats as they navigate the steep drop in business travel since the Wall St. collapse in September 2008,” the article stated.

Airlines are going to battle this situation by grounding more planes, and cutting capacity whereever they can. This will help them sell the seats they do have at a reasonable profit.

What Ever Happened to the Flat Tire Rule?

Christopher Elliot  writes on MSNBC about some of the things airlines used to do, that made traveling easier and, well, nicer for passengers. One of these now gone traditions is the ‘flat tire rule.’  This meant that if something happened to a passenger that was out of their control and they missed their flight, they could rebook on a later flight at no charge. Elliot cites an example of a woman who had to wait in a very long line for an American flight and finally missed her flight due to the wait.  Tough luck, they said, making her pay $2600 for a ticket the next day.

The Flat Tire rule says Elliot, “formalizes a double standard. Passengers are supposed to give airlines a break if there’s bad weather or a mechanical delay, so the same was once afforded passengers. You miss the flight for a reasonable reason, hey, no problem take the next one. Southwest still has such a rule, although it is somewhat more informal. An SWA spokesman said that they “empower their employees to handle each situation on a case-by-case basis,’ meaning it’s ambiguous enough for some flexibility.

Another rule has to do with rental cars and how late you can return them. A few years ago a one hour grace period was cut to just a half hour, and in some cases, closed entirely. Elliot argues, quite reasonably, the same way…we cut the rental companies a break if the only cars left are gas guzzling SUVs or too-small econoboxes and often wait in long lines to rent…so shouldn’t they give us the same sort of a break?

Those Annoying Baggage Fees Mean Billions in Airline Revenue

On the needle-thin Canadair regional jet, I was cramped and unhappy. That’s because in my carry-on bag the sunscreen I’d brought with me was rudely confiscated by the TSA at Bradley’s security check. They even took a nearly flat tube of toothpaste. “But that’s way less than three ounces,” I complained. “We have no way of measuring that,” said the TSA agent like a dumb robot.

But I was intrigued when I read in Scott McCarthey’s Middle Seat column in the Wall Street Journal that airlines have made a bundle on their new baggage fees. In fact US Air should earn between $400 and 500 million more from such ‘ancillary revenue.’  The fees are becoming the only reliable profit center for struggling airlines.

Despite the majority of flyers like me, who insist on bringing their rolling totes with us and then never being able to fit them in the small overheads of the plane, these fees are still being paid by many, many travelers.

For United Airlines,the total take for ancillary revenue will be a whopping $1.2 billion this year! That’s more than even the airline’s own cargo division hauls in. It also enough to pay a full one quarter of United’s yearly payroll.

Airlines are saying that they expect an uptick this summer, but aren’t sure yet. But one thing is for sure, they’re not going to roll back these lucrative baggage fees any time soon.