Airline Industry News: Delta baggage policy & Southwest Fees

January 2013
Travel News for Delta Airlines, Southwest and US Airways

Skipping to the Front of the Line

JetBlue Airways is testing a new ancillary service a $10 fee to use expedited security lanes at select airports. For $10, passengers can buy an Even More Speed option that lets them use expedited security lanes usually reserved for elite frequent flyer club members and first and business class ticket holders.

Even More Speed was originally part of Even More Space for seats with extra legroom, but JetBlue has now made the service a stand-alone option. There are other expedited security programs, including the Transportation Security Administration´s Pre Check program, a trusted traveler program whose members are pre-vetted and can not only go through an expedited security line but also go through an expedited security process. (Source: industry interviews.)

Southwest Institutes No Show Fee

Southwest Airlines, which does not charge a penalty to change a flight, will introduce a no-show fee on its least expensive tickets at some point this year. Passengers who book the cheapest fare and fail to show up for the flight will be charged a fee.

To avoid the fee, passengers just have to notify Southwest that they will not be on the flight. The fee applies only to Southwest´s cheapest fares; passengers buying more expensive tickets don´t have to tell the airline they won’t be on the flight.

Southwest is unique in that its travelers can book a flight, pay for it, not use the ticket and have a year to apply what they paid for that ticket to another purchase, with having to pay a penalty. The new fee is essentially saying "Give us the courtesy of letting us know," said a Southwest spokesman. (Source: interviews).

Airlines Still Profitable in Q3 2012

Major airlines still showed a profit for the third quarter of 2012 according to the latest Department of Transportation figures.

The largest scheduled passenger carriers showed a 6.4% profit margin, down from 6.8% from the same quarter a year earlier. The DOT said that the largest 10 airlines have achieved an operating profit margin as a group in each of the last six quarters. The DOT also reported that all U.S. passenger airlines collected $924 million in baggage fees and $652 million from reservation change fees in the third quarter.

Airlines do not break out the fees they collect for other ancillary fees, such as revenue from sating assignments and sales of food, beverages and entertainment, for the DOT. (Source: DOT press release).

American and US Airways Lay Groundwork for Pilot Deal

American Airlines and US Airways said that they have completed discussions with the unions representing American and US Airways pilots. The talks were to create a framework for employment of pilots as well as prepare for the possibility of integrating the pilots working for the two airlines, should American and US Airways merge.

The two pilot unions created a memorandum of understanding designed to help determine whether or not the two carriers should merge. (Source: American, US Airways’ press release).

Delta Delays New Baggage Policy

Delta Air Lines, which had planned on implementing a new baggage policy on single or conjuncted tickets, checking bags only between the origin and destination points indicated on that ticket, is delaying the new policy.

This is for instances in which travelers have separate tickets for a trip. Previously, Delta and most other carriers in this circumstance would check
through the bags to the final destination, but Delta´s new policy would end that convenience and require customers to claim and the recheck the bag after flying the first leg. (Source: Global Business Travel Association press release.)

Business travel News: Hotel Outlook Avis, Amtrak Survey

January 2013
Business travel for hotels car Avis Amtrak survey.

First Quarter Outlook for Hotels is Bullish

The hotel industry should see a strong first quarter, according to the Hotel Industry Leading Indicators. Seven of the forward looking indicators of business activity that comprise the HIL were positive in November. They included hotel worker hours, hotel profitability, foreign demand, yield curve, oil prices, housing activity and vacation travel.

Two indicators were negative or zero: the jobs market and new orders. "Although we are still in an unhealthy jobs market, US consumers, lower energy costs and a reviving housing sector are working together to build strength back to the demand for hotels," said Ms. Simos Sogard, CEO of e-forecasting.com, an economic research and consulting firm which produces the HIL. (Source: e-forecasting press release).

Avis Gets Into the Car-Sharing Market

Avis will buy Zipcar, the top car-sharing business. It has more than 760,000 members and operates in 20 cities and in more than 300 college campuses in North America and the U.K. Other car rental companies are already in the car-sharing business: Hertz with its OnDemand division and Enterprise´s CarShare unit. (Source: industry press releases).

Amtrak Introduces New Tier to Loyalty Program

Amtrak has introduced a new tier, Select Executive, to Amtrak Guest Rewards, its loyalty program. It is for members who earn 20,000 or more tier qualifying points in a calendar year. It´s designed to give higher recognition to Amtrak´s most frequent travelers with bonus points, special offers and special perks and services. (Source: Amtrak press release).

Spotlight On…
CFOs 2013 Business Travel Outlook

A Survey of 200 US CFOS and senior finance executives finds them optimistic about their own prospects but concerned about sluggish economic growth in the U.S. and in key regions around the world, including the U.K. and Europe. Three in five senior finance executives are prioritizing investments in growth and that includes business travel.

  • 61% anticipate spending the same or more on business travel in 2013
  • The most important reason for travel is to build new business, 37% and to retain current business 35%.
  • At the same time, most senior finance executives 64% do not expect corporate travel policies to loosen this year as companies continue to maintain a disciplined approach to controlling spending.

Source: press release

President’s Corner January 2013

Dear Valued Clients,


On behalf of all of us here at Williamsburg Travel Management, we wish you a Very Happy and Healthy New Year. 2013 is looking like a banner year for travel. The economy has improved, we have at least some idea of what our tax rates will be, and the airline industry has stabilized after a profitable 2012.

The most desired travel itineraries for this year include unique experiences. For those wanting to see the majestic glaciers of Alaska, plan to go within the next few years or they may not be there since global warming has taken its toll on them. Another favorite destination, Venice, may change dramatically due to rising seas. For peak season cruises to Alaska and Europe, you will have to book early to get the best prices and accommodations. River cruising in Europe has also gotten very popular, and space is already tight on peak season departures.

Several of the premium cruise lines have added some great amenities. Crystal Cruises, the pioneer of large ship luxury cruising has changed to an all-inclusive model, with all beverages, including alcoholic beverages now included. Azamara Club Cruises has also added beer and alcoholic beverages to their complimentary wine service.

The new Boeing 787 is getting rave reviews as more U.S. Airlines are receiving deliveries and deploying them on the long haul International routes. This new aircraft does not require 0% humidity, so it minimizes the effect of jet lag and is also much more comfortable with larger windows, individual entertainment systems, and upgraded seating.

We look forward to assisting you with those unique experiences this year, and we Thank You for your business and your friendship.


Sincerely,

Terry W. Brennan
President
Williamsburg Travel Management

Air Travel News, Expected growth, Airline apps, Airline Lobby

December 2012

Air Travel Expected to Grow 5% Per Year for the Next 20 Years
Despite rampant press coverage of the fiscal cliff and campaign rhetoric of a struggling economy, air travel just keeps on growing.

Boeing’s Current Market Outlook 2012, a long-term forecast of air traffic volume and airplane demand, finds air travel to be “remarkably resilient.” It said that 2011 air traffic was 6% greater than 2010, and it expects this trend to continue for the next 20 years, with world passenger travel increasing 5% annually every year.

The report noted that airlines are managing aircraft more strategically to boost yields and cover higher fuel costs. It said that airlines are matching their capacity to seasonal demand, keeping passenger load factors at historic highs. This growth forecast comes despite the fact that global economic growth is expected to be below its long-term average well into 2013.

Separately, the International Air Travel Association issued its own forecast that projected air passenger numbers will increase 5.3% annually for the next four years. (Source: Boeing, IATA).

Most Stressful Airports
Business travelers named what they consider the most stressful airports in a new survey by Concur, the online travel and expense Management Company.

At the top of the list: Chicago´s O´Hare International, followed by Los Angeles International and JFK. More than half of respondents, 56%, said the long distances separating gates and terminals were O´Hare´s biggest problem. JFK had the longest lines according to 49%.

Common problems that travelers said plague many airports are confusing signs 28%, poor service by staff 28% and too few or overcrowded bathrooms by 19%. Other complaints: poor Wifi 18% and not enough electrical outlets 18%. The most hassle-free airports were Dallas Fort Worth, thanks to its clear signs 42%, good Wi Fi and a good selection of dining options 41%. (Source: Concur press release).

Airline Apps Most Popular Mobile Tool for Business Travelers
Nearly 90% of business travelers use mobile apps and 62% of them use them on every trip, according to a study released by Concur, the travel and expense management company.

Airline apps top the list of most used 44% followed by map apps 41% and hotel apps 30%. Just 43% of business travelers use business expense mobile apps, even though nearly 80% call expense reporting as a major pain.

Nearly a quarter, 22%, uses five or more business travel related apps during their trips. Most of the business travelers –89%--said that mobile apps improve their travel experience. (Source: Concur press release).

Airlines Start Lobbying for National Airline Policy
Airlines for America, the airline trade association, has begun lobbying Congress and the American public for a national air policy. A4A says that U.S. carriers play an integral role in the U.S. economy but are hindered by high tax rates that exceed those levied on tobacco and alcohol, products that are highly taxed in order to have consumers use them less. In addition, airlines say they have to wrestle with a regulatory burden that is expensive.

Airlines are also lobbying for improvements to the national air traffic control system and for a national energy policy to help stabilize volatile fuel prices.

The A4A national air policy campaign also calls for helping U.S. carriers to compete with foreign carriers that don’t have the tax and regulatory burdens U.S. carriers have. A4A announced the campaign in Washington and has set up a consumer website, NationalAirlinePolicy.com, and Facebook page. (Source: A4A)

Business travel news, hotel rates, bookings and spending

Business travel news, mixing business with pleasure.

Mixing Business With Pleasure
Individual business and leisure travelers are making hotel bookings farther in advance, showing not only that they&re planning farther ahead but that they have a higher price tolerance, according to the September TravelClick Hospitality Review, the latest available.

TravelClick found that from July 2012 through August 2013, both group occupancies, which are for events, and transient bookings for both business and leisure travelers were up 3.5% and 4.4% respectively. Business demand is up 4.1% and leisure demand is up 4.3%.

During the third quarter, from July through September, the hotel industry saw a 1.2% increase in occupancy and a 3.8% increase in average daily rates. For the fourth quarter, committed occupancies were up 7.2%, with group-committed occupancy up 5.3% and transient demand increasing 11.7%. ADR continues to strengthen as well, up 4.5% (Source: TravelClick press release).

Hotels in the Americas See Rates, Occupancies Rise, Bucking Global Trends
Hotels in the Americas saw both average hotel rates and occupancies rise year over year in September, the latest numbers from STR Global, a hospitality consulting company. It found that hotel performance throughout the world was mixed.

Average daily rates in the Americas were up 3.6% year over year; occupancies increased by .4% to 63.4%. In the U.S., the average daily rate increased 3 to 4%. San Francisco registered the biggest average daily rate increases with a 14.3% increase.

Occupancies in Europe dipped .4% to 76.6%. The Asia-Pacific region saw rates up 3.7% and occupancies down 1.1% to 67.5%. In the Middle East and Africa, ADR decreased by 1.7% but occupancies increased by 5.4% to 60.7%. (Source: STR Global).

Spotlight On…
Business Travel Growth

Economic turmoil in Europe, slower growth in China and U.S. unemployment are expected to curb business travel growth in the U.S. throughout the rest of the year, according to the latest GBTA BTI Outlook-United States. The outlook said that business was taking a cautious approach to investing in travel, waiting for greater economic certainty.

  • The GBTA is forecasting the total U.S. business travel spending will grow 2.6% this year to a total of $257 billion by the end of the year, with rising business travel costs driving most of that increase.
  • Total business trip volume is expected to reach 438.1 million in 2012, down 1.6% fro 2011.
  • The GBTA forecasts that business travel spending will grow 4.9% to $270 billion in 2013, slightly more than it forecast in the last quarter.
  • It expects total trip volume to fall by 1.1% in 2013.

Business travel spending is often a leading economic indicator—but the job composition in this recovery is in retail, restaurant and manufacturing, fields that typically generate less travel than other industries—so business travel is getting less of a bounce than it usually would in a recovery. (Source: GBTA).

Travel news Airlines report profits from charging fees like wifi

Delta flatbed in business class.

Major U.S. Airlines Report Second Quarter Profit
The largest U.S. airlines reported a 6% profit margin in the second quarter, according to the latest figures from the Department of Transportation, up from 5.3% a year earlier. These nine airlines carried 80% of U.S. airlines& passengers.

Helping them hit those numbers: baggage fees. The nine airlines—Southwest Airlines, Delta Air Lines, United Airlines, American Airlines, US Airways, ExpressJet, JetBlue, Skywest and Alaska Airlines--collected a total of $931 million in baggage fees and another $661 million in change fees. Fees from other services that airlines charge you for—seat assignments, premium seating, entertainment and other services--are not included in these figures. (Source: DOT press release).

Consumers Want to Comparison Shop Airline Fees
Consumers want to be able to comparison shop the fees airlines charge for luggage, seat assignments and other services or amenities, many of which were once included in the price of an airline ticket.

94% of travelers who recently booked travel online said that "all airline fee information should be available to travel agents and online travel websites," according to the market research firm Harris Interactive.

The DOT requires airlines to display those fees on their own website, but the only way to comparison shop is to go from one website to another, although some online travel agencies and airfare comparison sites carry listings of the fees each airline charges for these services.

Harris said that 31% of travelers who booked travel on an online site agreed with the statement that they "paid for fees that were not fully disclosed when I initially purchased my ticket for my flight this summer."

The DOT is looking at a rule making to address this matter. However, three major airlines, Delta Airlines, United Airlines and US Airways, are close to making their premium seats available in GDSs, an indicator that comparison-shopping for these fees is on the horizon. (Source: Interactive Travel Services Association, industry interviews).

Airlines Keep Adapting to Changing Environment
Airlines are getting faster at adapting to geo-political and economic trends that continually buffet them—specifically high oil prices and a lingering recession.

A recent DOT Inspector General report said that airlines are adapting by charging fees for services once included in the price of a ticket or designing new products and charging for them.

They&re also cutting back on flights to keep flights fuller. And they&re undergoing rapid consolidation—five airlines now serve the bulk of the U.S. market, down from ten five years ago.

Some of this means good news for consumers, according to the IG report: fewer delays and cancellations. But there&s also bad news: less service at some hub airports and on routes of 500 miles or less. However, the report praised airlines& ability to adapt, since aviation plays an essential role in the economy. (Source: IG report).

31% of Domestic Flights Offer Wifi
31% of domestic flights in the U.S. offer wifi, according to the website Routehappy, a flight search site with a strong focus on the kind of experience airlines offer.

Delta Airlines leads the pack, offering wifi to nearly half of that customer base, or 16% of all domestic flights in the U.S.

The next closest is Southwest, whose wifi equipped flights account for 5% of domestic flights. American Airlines and AirTran Airways& wifi equipped flights account for 3% each and Alaska Airlines& service accounts for 2%.

Virgin America, US Airways, Frontier Airlines and United Airlines& flights with Wifi represent 1% of domestic flights each. AirTran and Virgin America have wifi on 100% of their flights, Delta on 65%, Alaska on 45% and Southwest on 37%. JetBlue Airways will add wifi early next year. (Source: Routehappy)

Speed Up Airport Screening, Mix Business with Pleasure

Amelia Island Boardroom


Loews Partners With DHS to Speed Airport Screening
Loews Hotels & Resorts is partnering with the Department of Homeland Security to help promote DHS’s Global Entry program, whose members skip the U.S. Customs line when entering the country and go through a kiosk. Loews will cover the $100 application fee for Global Entry for platinum members of its YouFirst loyalty program.

The DHS is recruiting other travel companies for similar partnerships. To qualify for Global Entry, travelers must do an in-person interview with Customs and Border Protection, undergo a background check and submit their fingerprints. Global Entry members automatically qualify for the Transportation Security Administration’s PreCheck program, whose members can go through a separate and faster security line and separate screening machines when boarding domestic flights.

They don’t have to remove their shoes or take their laptops out of their bags. Airlines can recommend some members of their frequent flyer programs for PreCheck; the drawback to this is that you can only go through PreCheck when flying that airline. If you belong to one airline frequent flyer program but are flying another airline, it’s back into line for you. (Source, Loews press releases, DHS interviews).

Mixing Business With Pleasure
Over half of U.S business travelers 52% have invited family along on business trips, according to research by the Wyndham Hotel Group.

Americans come in second to the Chinese 67% of them have brought a family member along. Least likely to bring along a family member: British travelers, who do so just 33% of the time. U.S. and Canadian travelers see these trips as a way to explore a new destination, according to the study, while Chinese view it as a way to enjoy higher-end hotels. (Source: Wyndham press release).

Spotlight On…
    Travel Taxes

Inhospitality taxes can increase the taxes visitors pay by 57% over the general sales tax, according to the Global Business Travel Association Foundation’s fifth annual study of car, hotel and meal taxes.

These taxes often fund local projects unrelated to tourism and business travel, according to the study, which rates the top 50 travel markets in two ways. The first is total tax burden—combining general sales tax and discriminatory travel taxes. The second is the discriminatory tax burden, looking only at discriminatory travel taxes.

  • Least burdensome in total taxes: Fort Lauderdale at $22.50 per day’
  • Most burdensome in total taxes: Chicago at $40 per day
  • Lowest discriminatory travel tax: Burbank, Calif., at $1.81 per day
  • Most burdensome discriminatory travel tax: Portland, Ore., at $22.45 per day
  • “Overly burdensome taxes on visitors can often do more harm than good , especially when those taxes unfairly target visitors,” said Joseph Bates, vice president of research for the Foundation. (Source: GBTA).

Hotel booking demands, Internet charges and Business travel growth

Maritim Park Hotel in Mannheim

More Hotels Charge for Internet Access
More hotels are charging guests for Internet access and to use the gym, but more are offering free breakfasts, according to a survey conducted by the American Hotel & Lodging Association with hospitality research company STR. 23% of properties now charge for in room Internet service, up 8% from 2008.

Luxury and upper upscale are more likely to charge for Internet service. 25% of hotels now charge to use the gym, up from 21% in 2010.

However, 79% of hotels now offer free breakfast. Most mid-tier and midscale hotels offer free breakfast, as do about half of upscale U.S. hotels. (Source: AHLA press release).

US Hotels See Strong Demand for Fall
Hotels in the Americas are doing better than those in other parts of the world, according to STR Global. In the U.S. the average daily rate increased by 3.8% in July with more hotel rooms being sold than in any other month since STR began tracking this data in 1987.

Hotel occupancy in the Americas in general rose to 70%, with rates increasing 3.3%. That made the Americas the only part of the world to show growth for both rates and occupancies. The fall months are strong for meetings and convention business and that is going to stimulate demand, according to Brad Garner, STR´s COO. He predicted a shift towards a seller´s market in 2013.

Separately, PKF Hospitality Research forecast that on an average night this year, nearly 3 million of the nation´s 4.8 million hotel rooms will be occupied, a figure six percent higher than in 2007, the last peak year before the recession hit. (Source: STR, PKF press releases.)

Spotlight On…
      The Fed´s Take on Business Travel

The Federal Reserve Beige Book, published eight times a year and covering current economic conditions throughout the country, finds that business travel growth in some parts of the country is slowing. It’s based on reports from the Fed itself and interviews with key players in each district.

In Boston, the Fed’s tourism contacts said that business travel has fueled travel´s rebound. They expect 2012 will be strong, but will weaken in the second half of the year. Europe´s economic problems could have a negative impact.

  • The Atlanta and Florida districts have seen European business decline, but increases from Central and South America have helped off set those declines.
  • Hotels reported occupancy and rate increases throughout the nation, although that was slowing in some regions. Outside of
  • Washington, D.C., for example, some hotels said that federal budget cuts were having a chilling effect on business.

Airline merger International air traffic and Handhelds in the air

Delta Airlines

American Merger Talks Heat Up
US Airways, which has is pursuing a reluctant American Airlines, has signed a nondisclosure agreement with American’s parent company, AMR, according to a memo US Airways’ CEO Doug Parker sent to employees.

The two airlines have agreed to exchange confidential information to work in good faith on evaluating a potential combination. Parker said that the NDA means only that the airlines have agreed to talk about the possibility of merging. AMR’s CEO Tom Horton initially resisted the idea of a merger.

AMR has also signed an NDA with British Airways, Alaska Airlines, Frontier Airlines, Jet Blue Airways and Virgin America. (Source: press reports).

International Air Traffic Continues to Grow at a Slower Pace
Global air traffic grew 3.4% in July 2012 over a year earlier, down from a growth rate of 6.3% in June and 6.5% for the first half of the year, according to the International Air Traffic Association.

It blamed the slowdown on a recent fall in business confidence in many economies. Airlines are responding to slower growth by holding capacity, which means planes are flying full—and profitably. Traffic is growing, but at a slower pace, said Tony Tyler, IATA’s director general and CEO. And he said that, combined with rising fuel prices, means a tough second half of the year. (Source: IATA press release).

FAA to Study Use of Handhelds on Planes
The Federal Aviation Administration FAA has created a committee to study the use of portable electronic devices on planes. Right now, the FAA leaves the decision of how passengers can use handhelds in flight up to airlines.

The FAA committee will be made up of representatives of aircraft manufacturers, mobile technology providers, airlines, including flight attendants and pilots, as well as airline passenger organizations. Passengers are increasingly interested in staying connected while in flight. This is an effort to learn if there are ways for more electronic devices to be used without interfering with the radio frequencies pilots use.

The group will look at a variety of issues, including how to test for safety. The group is not looking at whether or not to allow cell phone use while in flight. (Source: FAA press release).

Delta to Reduce Mileage Rewards for Some Unpublished Fares
Delta Air Lines is reducing mileage passengers can earn when they buy certain unpublished fares. These include group fares, consolidator fares, tour or group package fares and student fares.

Travelers flying using negotiated corporate, governments and sports fares will continue to get full mileage credit. Other airlines also limit or provide no mileage awards for some unpublished fares. (Source: news reports).

TSA Expands Pre Program to Phoenix Sky Harbor
The Transportation Security Administration has introduced its Pre program at the Phoenix Sky Harbor Airport, with US Airways as its partner.

Participants who are from certain airline frequent flyer programs or who participate in the U.S. Customs and Border Protection’s Trusted Traveler program provide biometric information about themselves and qualify for expedited screening.

The Pre is now available in 22 airports with partner carriers US Airways, Alaska Airlines, American Airlines, Delta Air Lines and United Airlines. (Source: TSA press release).

President´s Corner 2012

Dear Valued Clients,

It has been a hot one here in the Southeast with record temperatures setting dozens of new records. It is hard to believe that this year is already past the half way mark but many good things have happened in the travel industry.

The beautiful new International Terminal has opened in Atlanta which eliminates the bag re-check procedure for Atlanta bound passengers. The new facility is open, airy, and very passenger friendly.

Peachy Parking, our new preferred parking provider, has opened the only indoor parking facility at the airport. This new facility is air conditioned, heated and provides a great parking experience with their close proximity to the airport location.

Many of our frequent travelers have enjoyed a complimentary visit to Minute Suites, to work or relax in a private suite located in Concourse B at the Atlanta Airport. If you have not visited yet, please enjoy a complimentary one hour visit compliments of Williamsburg.

Delta is very busy with facility improvements in New York, with a brand new terminal at JFK and a connecting concourse to support their new hub operation at LGA.

Fall is a great time to travel with many cruise lines and resort destinations featuring great fall promotions.

Thanks for another record breaking start to the year, and if any of us can provide special assistance, please do not hesitate to call.

Sincerely,

Terry W. Brennan
President