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September 30, 2008

Why Airfare Reporting/Articles Drive Me Crazy

Filed under: Airfares, Airlines, Fuel Surcharges — Rick Seaney @ 11:57 am
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I was reading a widely picked up Associated Press (AP) airfare story (via USA Today) this morning which was further highlighted in one of my favorite blogs “Today in the Sky” (Ben Mutazbaugh).

The premise and title of the article is that airfares are not up in some places “Airfares Aren’t Taking Off Everywhere”.

As I read the report what caught my eye first was the lead statement that there has been 22 airfare increases this year (not true there has been 22 system wide legacy airline attempted increases this year with 15 successes as documented in my blog in excruciating detail using our proprietary software - and not credited in the story — Update: AP contacted me to note there was a graphic with the info — crediting us — but it did not make the wire story.

Regardless of that small oversight (after all it is presidentialTV ad campaign season) what had me befuddled was the statement that “business fares were down for New York and Phoenix” - my first thought was that this would be awfully difficult since domestic fuel surcharges for business fares are up over $100 compared to last year (I recently posted a comprehensive domestic airline ticket fuel surcharge report). The only way this could be true is if the report they used didn’t include fuel surcharges (likely) in the price or that base prices were down $100 (unlikely)– (nor did they mention the fact that checked bag fees could apply to some business travelers also driving up out-the-door prices).

Of course now that I was curious a wrote a couple of database queries to pull last years and this year’s business airfare prices (3 day advance purchase) for New York and Phoenix from our historical databases (one the world’s largest) to the top 25 cities by traffic and this is what I found (average of cheapest price for every day in September for 3 day advance purchase — includes fuel surcharge and 7.5% sales tax):

While not up sharply compared to the rest of the country — certainly not “down”. It should be noted that outside the top 25 cities prices are up very sharply.

Hard Times for Sun Country: 50% Pay Cuts

Filed under: Airlines, News — Rick Seaney @ 11:43 am
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Sun Country Airline execs told their workers their pay will be cut in half starting next week.

It also told them they’d be reimbursed for those cuts - in 2009.

Meanwhile, the Chairman and CEO of the airline’s parent company, Petters Group Worldwide, resigned yesterday - he is the target of a federal fraud investigation.

No surprise here: Sun Country employees’ unions have not endorsed the pay cut plan.

TIP: Finding out the Real Cost of Your Airfare (Fuel Surcharges and All)

Filed under: Fuel Surcharges, Tips and Tricks — Rick Seaney @ 10:22 am
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Finding out the total cost of your airline ticket can be a bit difficult - often, you don’t learn until the very last minute that your $300 “bargain” actually costs a whole lot more.

This is especially true if you’re looking at overseas flights, where fuel surcharges can be truly frightening.

You want the total cost up-front - and I can help. Just follow this simple tip:

Check out my U.S. Airline Fuel Surcharge Report and the International Airline Fuel Surcharge Report: you can tell at a glance the average fuel surcharge for each airline, and even what the average fuel surcharge is fro a transatlantic flight compared to a trans-Pacific flight. This is information you need before you shell out your hard earned money.

Over at British Airways, they’ve been discussing how to best incorporate fuel surcharges into published fares; and Chris Elliott says the European Parliament approved a new rule mandating that “airfares have to include all taxes, fees and charges added to the basic ticket price” which could go into effect as early as the end of this year.

But by using my domestic or international fuel surcharge reports, you’ll be way ahead of the game.

September 29, 2008

Conde Nast Traveler: Best Airline and Airport (Some True Surprises)

Filed under: Favorites, Business Travel, List — Rick Seaney @ 2:16 pm
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The Road Warriors have spoken - and according to Traveler magazine, these are their favorites (and tell me if you agree or not):

Best U.S. Airports:

  • 1. Portland, Oregon
  • 2. Tampa
  • 3. Washington - Reagan

Best International Airports:

  • 1. Singapore
  • 2. Hong Kong
  • 3. Amsterdam

Best U.S. Routes - Airlines with Business/First Class Service:

  • 1. Virgin America
  • 2. Alaska
  • 3. Continental

Best U.S. Routes - Airlines with Single Class Service:

  • 1. Midwest
  • 2. JetBlue
  • 3. Frontier

See the entire list right here.

FORECAST: Fewer Airline Seats to Las Vegas - And Fewer Bargains

Filed under: Forecast, Las Vegas — Rick Seaney @ 10:43 am
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Not good news for Las Vegas.

According to Merrill Lynch analysts, “abundant, cheap seat capacity to Las Vegas — a thing of the past”.

Airlines will continue their capacity cuts into next year and watch capacity (seats) drop another 6+ percent this quarter and another 16 percent by the end of December.

Las Vegas cuts are more severe than in other markets because Vegas visitors tend to be “price sensitive leisure travelers and conventioneers/business travelers”.

Bad news, not just for the passengers, but for the people who run the casinos and the hotels and restaurants: as capacity cuts continue, airfare is expected to rise, and Vegas visitors will have less to spend on all the “fun stuff”.

Let me just add, there will always be some bargains - and you can always rely on us to help you find the cheapest airfare.

Still Up for Grabs: Name the New Terminal at Detroit Metro

Filed under: Airport — Rick Seaney @ 9:34 am
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Just noticed that the “naming rights” for the terrific new terminal at Detroit Metropolitan Wayne County Airport are still up for grabs.

Right now it goes by the less than euphonious “North Terminal” - but for an estimated $40 million, you can name it what you like.

Our sister blog has already suggested slapping sponsorship-type decals on planes, but I’m not sure the airport is ready for that; other, more sober-minded types suggested last Spring that likely names would include “banks and financial institutions” - but since the meltdown on Wall St., I don’t think so - I’m sure we all remember Enron Field

What would you call it? I’m up for the serious and the silly.

September 26, 2008

Continental Reverses, Okays 500 Mile Minimum for “Elite” Fliers

Filed under: Customer Service, Frequent Flyer — Rick Seaney @ 10:18 am
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Recently I did a study on the effect of legacy airlines removing the 500-mile frequent flier mile minimum after Continental announced that it was only going to give credit for exact mileage flown (following similar moves by United and US Airways).

Continental is now reversing this recent decision to its frequent flier program - for some of its passengers.

But here’s the catch: this reversal only affects Continental’s “elite passengers” (those who fly at least 25,000 miles in a year).

FYI: I perused the websites of US Airways and United this morning, since they too had rescinded the 500-mile minimum - was curious to see if they were going to follow Continental’s lead - but so far, I can’t find any evidence that they have.

Analyst Says, Airline Travel is “Luxury Good”

Filed under: Airlines, Business Travel, Forecast — Rick Seaney @ 9:23 am
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Saw this article in BusinessWeek, and wondered if you had the same take as I did.

An analyst from Stifel Nicolaus & Co. (who just announced this week they would be covering airlines) said airlines will likely be profitable over the next couple of years, because of all the things they’re doing, including capacity cuts.

But he also says, the high fuel prices will help make airline travel a “mid-priced luxury good”.

Joe Sharkey also seems to agree about this prediction of travel only for the “rich”.

If this premise is actually accurate then their could be a big problem as it was noted recently that “premium airline traffic” is down with the suit and tie crowd as the financial meltdown continues.

I agreeairfares are getting higher, i see tens of thousands roll buy a day,but I believe air travel will continue to be part of the fabric of our lives - for business and leisure. I am not buying into this concept quite yet. The trick for road warriors and vacationers will be to find the bargains - but then, that’s why there’s FareCompare.com - try us and see.

Terrorist Suspects Arrested in Germany

Filed under: Travel Safety, Security, Europe — Rick Seaney @ 9:10 am
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German police commandos raided a KLM plane about to depart from Cologne and arrested two suspected terrorists.

The men, both in their early 20’s, had been under observation for months.

According to the AP’s account, a suicide note was found in the apartment they shared, saying they wanted to die together in a “holy war”.

September 25, 2008

More Upbeat Airline News

Filed under: Airlines, Forecast — Rick Seaney @ 5:06 pm
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This word from Boeing’s marketing man, Randy Tinseth (and see his always interesting blog here):

Yes, Boeing is predicting a further “contraction in the world economy next year” and the airlines will continue to face challenges. It’s a situation that remains fluid, but…

But Tinseth said his company also believes the industry will continue to show “robust growth” over the next several years - and indicated the airlines are doing things right by cutting capacity and taking older planes out of service.

Plus, he expects that fuel will “eventually” drop back to levels of about $70 to $80 a barrel.

Hope he’s right.

Fun Video - Global Air Traffic

Filed under: Airplanes, Video — Rick Seaney @ 1:00 pm
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I thought this would make a nice “mental health break” - it’s a video simulation of flights around the world over a 24 hour period.

Apparently this is the work of a school of engineering in Switzerland, and it’s taken the internet by storm.

Enjoy.

Ryanair Okays Cell Phone Use - What Do YOU Think?

Filed under: Customer Service, Europe, Gadgets — Rick Seaney @ 12:09 pm
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Well, it’s official - starting early next month, Ireland’s popular discount carrier Ryanair will begin testing inflight cell phone service on 14 of its planes.

I can see it now - I’ll be stuck in a middle seat, listening to a fellow on my left having a screaming match with his spouse, while the chap on the right happily shares details of his most recent romantic conquests.

And don’t get me started on the texters.

Actually, I’m not so sure I would be all that disturbed - not if we all use common sense, and simple plane etiquette.

Besides, I guess we better get used to it - at least while traveling abroad: a Ryanair spokesman says, expect to see it on all their planes within 6 months. And an industry trend analyst says, “almost half of all airlines plan to offer in-flight mobile phone connectivity for passengers by the end of 2008″.

For now, cell phone use on planes is still banned in the U.S. - but if Ryanair is a success - who knows?

From the Horse’s Mouth: Airline Forecast - Fine in ‘09

Filed under: Airlines, Forecast — Rick Seaney @ 9:40 am
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That’s what Morgan Stanley is saying (and they’re not alone): actually, the word these analysts use to describe the airline industry to investors is “attractive”.

This forecast is based in part on PRASM, or “Passenger Revenue per Available Seat Mile”, and why not? We know airfares are rising, and we know that most seats on airlines will be filled with passengers who purchased airfare - with fewer seats flying empty (capacity cuts are kicking in now, so look for 180,000 fewer seats by the end of the year, and millions fewer by next year).

What does this mean to you?

Well, there will still be bargains - they’ll just be harder to find, but FareCompare will help you. And here’s another comforting thought: despite all the economic bad news and gloom & doom from forecasters earlier this year, we still have an airline industry - and at the moment anyway, it’s fairly healthy.

September 24, 2008

Frequent Flier Awards - Burning through the Miles

Filed under: Frequent Flyer, Tips and Tricks — Rick Seaney @ 12:01 pm
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According to Bloomberg (via the Seattle Times), airline awards programs are a real hot commodity these days - redemptions are way up.

Especially domestically.

Folks who fly on U.S. carriers are burning through record numbers of frequent-flier points to avoid paying higher fares”.

Good news for the airlines because these days, most of them make money on their frequent flier awards thanks to surcharges of as much as $100 per ticket.

And good news for the “frequent fliers”, since these not-quite-free tickets are still a lot more attractive than domestic airfares, which have risen anywhere from 20 to 40 percent at the major airlines this year.

TIP: When airfares are on the high side, don’t hoard your miles — and when you’re ready to book - check with FareCompare, to make sure you get the very best deal possible.

Business Travel Tips

Filed under: Business Travel, Tips and Tricks — Rick Seaney @ 11:14 am
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Okay, Road Warriors (and your companies), listen up.

Although the business travel unit of American Express delayed release of its annual “business outlook” this week (so they could assess the effect of the mess on Wall St.), they did release some information, including the following:

“Airlines are pulling discounts and cutting contracts, in some cases, if companies fall short of their promises to deliver a certain number of travelers or a certain amount of revenue.”Reuters News Agency

But AmEx also had some recommendations for business travelers, that can keep costs down:

  • Watch the Expense Account: tighten and enforce travel policies
  • Look for Lodging Deals: airline capacity cuts means more room at the inn
  • No More Gas Guzzlers: rent smaller vehicles and save on gas prices

I know we have a lot of Road Warriors among our readers - what do you think of these ideas — workable?

UPDATE: Remember those “Sleeping Pilots”? They’re Free to Fly Again

Filed under: Travel Safety, Pilots — Rick Seaney @ 10:29 am
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Maybe you’ll recall this story - I blogged about it back in February.

It’s about two pilots - a Captain and First Officer with Hawaii’s Go Airlines - who were sleeping when they should have been landing their plane. In fact, they flew 15 miles past their destination of Hilo, Hawaii.

Apparently the sleeping men heard none of the repeated calls from air traffic controllers (I should mention that one of the men was later diagnosed with severe obstructive sleep apnea — but why wasn’t this known earlier?).Both pilots were ultimately fired by Go, and suspended by the FAA. Those FAA suspensions were completed this month.

Officials say they do not know if the two men have resumed flying for any other airline.

In case you’re wondering, the pilots’ “nap flight” didn’t originate in the mainland - they were flying in from Honolulu - a mere 45 minutes away.

NO TIME for My ABCNews.com Column? Here’s the QUICK VERSION

Filed under: ABC News — Rick Seaney @ 9:18 am
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Rags to riches? The airlines? Even though Wall St. is in meltdown-mode?

Could happen.

In my latest column for ABCNews.com, I talk about how the still volatile oil market (after a nice, long downturn, prices rose sharply Monday) is literally pushing airlines into profitability - and here’s how:

  • New Airline Fees -Northwest alone now collects bag fees of almost half-a-million dollars a day
  • Airfare Hikes — almost one a week in the first half of this year
  • Fuel Surcharges - averaging $67 roundtrip domestically, $349 roundtrip trans-oceanic travel
  • Capacity Cuts — 70 million fewer seats in 2009.
  • Award Programs — watered-down benefits

But one thing that can’t be predicted is the price of oil; just ask United - it tried to play the “hedging game” earlier this year - the game Southwest excels in - and the legacy carrier lost a bundle.

Bottom line: who pays? Let’s see - new fees, hikes, fuel surcharges, worsening awards programs - I guess that would be, you and me. On the other hand - at least we still have an airline industry - one that’s alive and kicking.

September 23, 2008

GeorgiaSkies: New Airline Enters the Fray (UPDATED)

Filed under: Airlines, Airfare Sales — Rick Seaney @ 5:25 pm
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UPDATE: Maybe this new airline isn’t so brave after all. Both of its routes are subsidized under the federal government’s Essential Air Service program.

EARLIER: Don’t know a whole lot about GeorgiaSkies, but I do know this brand new airline - and the people who run it - have courage.

After all, they’re starting out in such a volatile environment (crazy oil prices, worsening economy) plus GeorgiaSkies’ schedule is a bit on the light side: you can fly between Atlanta and Macon or Atlanta and Athens. I should note that the distance between Atlanta and Macon is 87 miles - while the distance between Atlanta and Athens is 73 miles.

There are some who would call that - driving distance.

Still, as I said, this airline is game: it has its “state of the art PropJets” (which means the site can boast that they’re “Committed to a Greener Georgia”) and, when the airline debuts on Sept. 29, it will offer $9 promotional flights. It also has a charter business.

If anyone gives GeorgiaSkies a try, let me know.

National “Passenger Bill of Rights” - Closer to Reality?

Filed under: Customer Service, News, Passengers — Rick Seaney @ 1:13 pm
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Over at Kiplinger, they’re saying that prospects are improving for enacting a “passenger bill of rights” law.

Apparently it’s become something of a hot potato for lawmakers facing re-election, and these politicians believe it could affect voter support (’though wouldn’t it be nice to see them pass it simply because it’s the right thing to do?).

This would actually be a somewhat watered-down version of the bill first introduced in 2007, but it’s still supposed to help “ease the pain of long delays”. Which means it will require airlines to have plans in place for emergencies, detailing how food, water, medical care, bathroom facilities and more will be provided in the event of long delays.

The word is, passage could come before Congress adjourns in October.

Survey Says: Biz Travelers Unhappy with Frequent Flier Programs (See TIP)

Filed under: Frequent Flyer, Business Travel, Tips and Tricks — Rick Seaney @ 12:22 pm
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A recent national survey of business travelers didn’t really have many surprises in it, but a couple of nuggets stood out to me:

  • only 17 percent had more than 50,000 awards points with any specific airline
  • nearly 60% said that there is a need for a service that makes redeeming easier

Sounds like these biz folks are struggling with changes in frequent flier miles programs - which is why I put together a chart showing all these changes (and we update it constantly).

TIP: it may be worth joining a frequent flier club, even if you are discouraged by the hurdles in redeeming miles, for this reason - it may get you ahead of others when it comes time to board the plane (see my post on American’s “priority lanes”). And the beauty of boarding ahead of others means more space available for you to stow your carry-on.

American: “Priority Lanes” for Best Customers

Filed under: Customer Service, Frequent Flyer, Business Travel, American — Rick Seaney @ 10:54 am
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American Airlines says it’s creating new, “priority lanes” for its best customers - to get them checked in, through security an onboard before its “worse” customers, I guess.

So - are you a “best customer”? You are, if you fit any of the descriptions below:

  • First class passengers
  • Business class passenger
  • Passenger paying full fare coach
  • Airline alliance members
  • Most frequent flyer members

I was vaguely wondering, “Who’s left?” I got my answer from a colleague reading over my shoulder who travels only every now and then; she said, “Uh-oh. That only leaves - me!”

I’d like to hear from you, faithful readers - what do you think about “priority lanes”?

September 22, 2008

Some Airlines Hedge Oil Prices Better Than Others

Filed under: Airline Fees, United, Fuel Watch — Rick Seaney @ 11:44 am
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We know Southwest is King of the Oil Hedgers, but some of those who came late to the party are learning.

According to a fine commentary by Mark Ashley, Delta expects to report a gain from its “fuel hedging activities” - but, United warned last week that it will “record noncash hedging losses of more than $500 million as it records the drop in the market value of its hedges”.

Translation: United hedged, then oil dropped.

This underscores how volatile airline financials are at the moment as the price of oil yo-yos from $147 down to close to $90 per barrel last week — and all the way back to near $110 today.

In other words, airlines are being forced to become day traders instead of carriers of travelers - and some are not very good or lucky at it….

Bottom Line: Don’t expect either fuel surcharges or fees to drop anytime soon - not in this wild environment.

 

JetBlue Terminal at JFK Re-Opens After Scare

Filed under: Security, JetBlue — Rick Seaney @ 10:31 am
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Everything, we hear, is back to normal now - though JetBlue’s terminal at JFK was evacuated briefly early today due to a suspicious package.

The package turned out to be two WWII replica grenades (non-working!) that were meant to be paper weights.

Call me crazy, but items like these strike me as the sort of thing you would not want in your possession at an airport.

Makes you wonder — whatever happened to good, old-fashioned common sense?

Personal Story - How US Airways “Improves” On Time Stats

Filed under: Customer Service, US Airways — Rick Seaney @ 9:10 am
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I recently saw this paragraph in an AP report, and showed it to a colleague who had a bumpy experience on a US Airways flight last week:

“The fourth-highest number of consumer complaints received by the DOT in July were about US Airways, which said in a Sept. 3 memo to employees that they would not be receiving a $50 monthly bonus because the airline’s on-time performance did not place in the top three among the largest U.S. carriers.” == Associated Press

My colleague’s response?

“Rick - my US Airways flight was late getting into Phoenix and MY problem was the original schedule had a very tight connection there — just 30 minutes to make my flight to Dallas. But my fears were somewhat allayed by a flight attendant who said, not to worry - that since they padded so much time into the flights these days, that I’d STILL make the connecting flight - and indeed, we landed with that same 30 minutes to spare.”

“I set off at a brisk pace toward the gate to my connecting flight, but dropped in my tracks when I saw a board listing my flight as - departed! This was approximately 20-minutes before the scheduled departure time!”

The adventure continues — keep reading for the exciting conclusion (and, the $5 food voucher!).

(more…)

September 19, 2008

Trends - World-Wide First Class, Business Class Travel is Shrinking

Filed under: First Class, Business Travel — Rick Seaney @ 2:11 pm
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Interesting: the International Air Transport Association (IATA) says there has been a world-wide decline in “premium travel” - first class and business class - and this is most likely the result of a drop-off in business travel because of the general economic downturn in the world (and thanks, Sky Talk, for the heads up).

That’s not really so surprising, but the IATA did suggest that some of this “premium travel downturn” can be laid at the feet of failed institutions like Lehman Brothers, which has led to “a reduced number of business travelers from financial services”.

According to the IATA statistics, world-wide premium travel demand fell 0.4% this past June, and then 1% this past July. Are passengers not upgrading anymore? is this a sign that frequent flyer programs are getting stale? Does this bode well for $10,000 cabins on the A380? — only time will tell — time wasn’t enough for Eos, Silverjet and Maxjet.