Airline news & new rules for Airline fees

GAO Proposes Rules Governing Airline Ancillary Fees
Airline ancillary fees increased by 43 percent last year, totaling $13.5 billion, a number big enough to get attention from Congress and the government’s watchdog agency, the General Accounting Office.

The GAO is designing rules requiring airlines to tell customers about these fees in a consistent way.

A Congressional subcommittee on aviation just held hearings on the fees; at that hearing, the head of the National Business Travel Association testified that fees equal fares and that the DOT should require airlines to display those fees clearly at every step of the booking and purchasing process. (Source: GAO, NBTA press releases.)

Airlines Revenues and Profits Are Up; So Are Fares
The Air Transport Association of America (ATA) said last week that passenger revenues for a core group of U.S. carriers in June was up 25 percent over last June.

Next, the aviation consulting firm AirlinesFinancials.com reported that the nine biggest airlines’ second quarter profits just missed a decade high. And, those same airlines’ second quarter revenues were the second highest in history. Finally, the Department of Transportation reported that average domestic airfares in the first quarter of 2010 were up 4.7 percent from the first quarter of 2009 and at their second highest level since 2001.

The ATA quickly pointed out that, despite the rise, airfares continue to be a good deal—they may be higher than they were in 2009, but are at about the same level they were in 1999, when the average one-way fare was $153.88. (Source: ATA, AirlineFinancials.com, DOT press releases.)

American, JetBlue Tighten Partnership
Airlines continue to ally with each other in order to gain efficiencies of scale. Some, like Delta Air Lines and Northwest Airlines two years ago and United Airlines and Continental Airlines this year, are merging.

But American Airlines and JetBlue Airways are taking another tack by tightening their partnership. American and JetBlue now offer interline service linking JetBlue domestic flights into Boston Logan and New York’s JFK to 14 international destinations American serves. It’s offering this service on domestic flights on which the two carriers do not overlap.

You can book American and JetBlue flights on a single itinerary through your travel agency, major online travel agency websites or through American. Ultimately the two carriers will sell these flights on both airlines’ websites.

Later this year, the two carriers will enable members of each airlines’ frequent flyer club--American’s AAdvantage program and JetBlue’s TrueBlue program--to earn points in their respective program when they fly these routes. (Source: American, JetBlue press release.)

FAA Says Mexico Falls Short of ICAO Safety Standards
The Federal Aviation Administration (FAA) said that Mexico does not meet international safety standards set by the International Civil Aviation Organization (ICAO).

As a result, the United States is downgrading Mexico from a Category 1 to Category 2 rating. With the IASA Category 2 rating, Mexican air carriers cannot establish new service to the United States, although they are allowed to maintain existing service.

The FAA said that Mexico is making “significant improvements” and that it will work closely with Mexico to help it regain its Category 1 ranking. Aeromexico, meanwhile, issued a statement saying that the downgrade does not refer to the safety of individual airlines.

Aeromexico said it continues to comply with the highest international safety standards and is operating normally. (Source: FAA, Aeromexico press releases.)

Business Travel News Updates for July

Helpful Information & Tips
for our Business Travelers.

Airlines

Delta Air Lines has dropped its fees, which went as high as $150, for frequent flyer tickets redeemed 20 days and less before departure...

More News

• Low-Cost Carriers Show Profit, Legacy Carriers Lose Money
• Baggage and Other Fees Adding Up For Carriers
• American Pioneers Another New Fee
• Delta Drops Fee for Last-Minute Frequent Flyer Tickets
• Air Traffic Inches Passed Pre-Recession Levels

Read more

Hotels & Amtrak

Demand for business travel is on the upswing, according to data from American Express Business Travel, which tracks corporate travel spending...

Also:

• Hoteliers Keep Adding Rooms
• Hotel Industry Leading Indicator Is Up for Fourth Month in a Row
• Amtrak to Expand Free wifi
• Rebounding Business Travel

Read more

July Travel News for Hotels and Amtrak

Hotels

Hoteliers Keep Adding Rooms
Despite an uncertain economic recovery, hoteliers are building new hotels, with roughly 432,000 new rooms coming online globally, according to a report from the MKG Group.

Breaking it down regionally, that's adds up to170, 000 new rooms in North America and 138,000 in Europe, an increase of 3.1 percent and 2.2 percent, respectively.

Asia-Pacific is adding 98,000 rooms, a growth of only 1.9 percent. Other regions also show development resilience during the global economic challenge, with Latin America registering 63,600 new rooms (+4.8%), Middle East and Africa 52,700 (+4.2%). (Source: MKG press release).

Hotel Industry Leading Indicator Is Up for Fourth Month in a Row
The U.S. Hotel Industry Leading indicator, or HIL, went up 1.5 percent during May for the fourth consecutive month. The HIL usually leads the industry's business activity four to five months in advance. The latest increase brought the index to a reading of 113.5.

The index was set to equal 100 in 2000. Eight major indicators were up, including weekly hours in hotels, hotel profitability, future demand for international visitors, housing activity and the National Vacation Barometer. Only one major component was down-tightness in the labor market. (Source: HIL press release).

Rail and Car Rental

Amtrak to Expand Free wifi
Amtrak's three-month trial of free wifi was so successful that Amtrak is making it standard on all Acela trains running between Washington, D.C., and Boston.

It's planning to offer Wi Fi on its fleet nationwide, once it gets funding. This will begin this fall on Amtrak Routes in California, with Northeast regional service. (Source: Amtrak press release).

Rebounding Business Travel

Demand for business travel is on the upswing, according to data from American Express Business Travel, which tracks corporate travel spending.

• Business travelers are beginning to return to the front of the plane
• The percentage of business class tickets booked in business rose from 36 percent to 41 percent in Q1
• International airfares increased 3 percent year over year
• Domestic fares increased 6 percent
• Hotel recovery is still lagging, with international rates down .5 percent and domestic hotel rates down 5 percent

Source: American Express press release.

Airlines News Release for July

Low-Cost Carriers Show Profit, Legacy Carriers Lose Money
Low-cost regional carriers reported a profit in the first quarter while network carriers posted a second consecutive loss, according to the U.S. Department of Transportation's Bureau of Transportation Statistics.

The six network carriers posted a loss of 0.7% in the first quarter with a combined operating loss of $163 million. That was better than the previous quarter, when they reported a loss margin of 4.0 percent with a loss of $867 million.

The seven low-cost carriers reported a 2.4% profits of $115 mil. (Source: DOT press release).

Baggage and Other Fees Adding Up For Carriers
From January to March, the airlines collected $769 mil in baggage fees and $554 mil from reservation fees, according to the Department of Transportation.

The numbers do not include fees from seating assignments and on-board sales of food, drink, blankets pillows, and entertainment, which are reported in a another category.

First quarter of 2010 airline revenue from all ancillary sources was $1.9 bil, with Delta reported the most at $592 mil.

Passenger fees and ancillary from other sources constituted 6.2% of the total revenue of the 28 carriers reporting ancillary revenue. Spirit Airlines' reported the largest of any carrier, 21.7%. (Source: DOT press release).

American Pioneers Another New Fee
American Airlines is introducing Your Choice services, which includes Boarding and Flexibility Packages, that will start at $9 one way. This places travelers in Group 1 of General Boarding, so they can board right after PriorityAAccess customers.

It provides a $75 Flight Change Discount, which means that if travelers need to change their itinerary, they'll save $75 off the regular service charge when applicable. It allows you to go standby for an earlier flight on your day of departure at no charge.

Prices vary based by market and routing. (Source: American press release).

Delta Drops Fee for Last-Minute Frequent Flyer Tickets
Delta Air Lines has dropped its fees, which went as high as $150, for frequent flyer tickets redeemed 20 days and less before departure. Until the change, it cost $150 to book a frequent flyer ticket within three days of departure, $100 for between four and seven days and $75 to book within eight to 20 days.

Tickets booked 21 days out or more had no redemption fee. Delta also instituted a first checked bag free benefit for customers with a Consumer or Business Gold, Platinum, or Reserve Delta SkyMiles CreditCard from American Express. (Source: Delta press release).

Air Traffic Inches Passed Pre-Recession Levels
Air travel inched passed pre-recessions levels, according to the International Air Transport Association.

International scheduled traffic statistics for May showed an 11.7 percent increase in passenger traffic over May 2009. South America saw the biggest growth, 23.6%; Asia-Pacific saw a 13.2% growth. Europe saw 8.3% growth.

The U.S. saw a 10.9% increase; the region's careful matching of capacity to demand has driven load factors to 82.4%, the highest of all regions. (Source: IATA press release).

Business Travel News For Airlines

DOT Proposes More Protection for Air Travelers
The Department of Transportation has proposed more rules designed to protect air travelers, which it says builds on its consumer protection strategy that started with a three-hour cap on tarmac delays.

The new rules would increase compensation for any travelers bumped from flights, increasing compensation from $400 to $650 if you’re bumped and then rebooked on an alternative flight that gets you to your destination one to two hours late and from $800 to $1,300 if you’re more than two hours late on domestic flights and more than four hours late on international flights.

The new rules also would allow air travelers to make and cancel reservations within 24 hours without penalty. The new rules would require full and prompt disclosure of baggage fees and compensation if bags aren’t delivered on time. (Source: DOT)

Front of the Plane is Filling Up Again
Passengers are moving to the front of the plane, according to the International Air Transport Association. In March, the latest figures currently available, premium travel was up nearly 11 percent. And for the first quarter, it was up 7.4 percent. Part of that , of course, was because business and first class travel plummeted by 25 percent in 2009 and 2008. However, premium travel is now growing slightly faster than economy travel.

The recovery varies greatly by region—it’s strongest in Asia, weaker in Europe and across the North Atlantic. IATA reasons that business confidence is returns faster than consumer confidence, which means business travel will recover faster than leisure travel.

Although just ten percent of travelers fly in the front of the plane, they account for 30 percent of revenues. (Source: IATA).

Summer Weather and the Three-Hour Tarmac Delay Rule Could Mean More Delays and Cancellations
Rick Seaney, CEO of FareCompare.com, the airfare tracking website, says that the combination of volatile and fast-moving summer weather and the new rule limiting tarmac delays to three hours could cause airlines to cancel more flights this summer.

Seaney says that the Federal Aviation Administration says that summer storms come up more quickly and move faster than winter storms, grounding flights and causing a chain reaction of delays to ripple throughout the nation’s air traffic systems. Airlines, which understandably want to avoid the $27,500 fine per passenger for delays of over three hours, are canceling flights pre-emptively to avoid those fines.

That means, watch the weather and keep in close touch with your travel agent to make sure you’re at the head of the line, figuratively speaking, in the event of a delay or cancellation. (Source: FareCompare.com).

Pilot Labor Unrest Mounts as Contracts
Pilots are getting impatient with management after years of making pay concessions to airlines facing or falling into bankruptcy. Pilots for AirTran, Spirit and Jazz, the low-cost Canadian carrier, have voted to authorize strikes.

United Airline pilots have picketed to protest the outsourcing of pilot and other airline employee jobs. And American Airlines pilots criticized the carrier’s management during American’s annual meeting last month.

The Allied Pilots Association, which represents American’s pilots, voiced its support for Spirit pilots. It said that it cannot let what it calls an industry-wide “race-to-the-bottom” mentality to continue. Meanwhile, ALPA’s president, Capt. John Prater, called on Congress to reform bankruptcy codes, which he says now let companies strip workers of bargaining rights, while executives keep getting big bonuses. (Source: APA, APA).

Lodging Forecast and Car Rental

Hotels

Demand May Be Up, But Hotel Rates Stay Low
Hotels occupancy rates are improving, according to PKF Hospitality Research, which says rates will increase 3.4 percent this year. Despite the increase, PKF expects average daily room rates to drop 1.6 percent—on average, you’ll be spending less on your rooms.

When the hotel business emerges from a recession, price increases lag growth in demand, according to PKF. However, PricewatershouseCoopers projects that room rates will start to increase in 2011, after two years of declines. (Source: PKF Hotel Horizons, PCW Lodging Forecast).

Car Rental

Hertz, Avis Continue Vying to Acquire Dollar Thrifty
Hertz and Avis, who are vying with each other to buy Dollar Thrifty, are both seeking antitrust approval for their proposed deals. Avis said that acquiring Dollar Thrifty would help it compete more effectively against Enterprise, the biggest player in the industry.

Hertz saying that it should face fewer hurdles than rival Avis, because Avis’ low-cost brand, Budget Rent A Car, competes directly with Dollar Thrifty. Hertz has also filed papers with the Securities and Exchange Commission on the matter. (Source: Hertz and Avis).

Avis Promotes Its EPA Certified Green Fleet
Avis said that its 2010 line-up is 62 percent SmartWay Certified, that is, they meet U.S. Environmental Protection Agency (EPA) environmental standards for air pollution and green house gas emission.

Nearly 100 percent of its subcompact, compact and intermediate vehicles are SmartWay certified. (Source: Avis press release).

Consumer satisfaction with hotels and car rental companies is up slightly, but down sharply for airlines, according to the quarterly Market Metrix Hospitality Index.

• Guest satisfaction with hotels is up .4 to 83.3
• Consumer satisfaction with car rental companies is up .8 to 79.2
• Passenger satisfaction is down three points to 75.7, the biggest fall since 9/11.
• Top companies were JetBlue, Enterprise, Ritz-Carlton, Hyatt Place, Red Lion and Microtel

Source: Market Metrix press release

Airlines Industry News & Updates

U.S. Carriers Report Double-Digit Increases in March Passenger Revenues
Airlines, struggling with another crisis, the cloud of ash from Iceland's Eyjafjallajokull volcano, which shut down European skies, did have some good news.

The Air Transport Association reported passenger revenues, based on data from nine major U.S. carriers, were up 15 percent in March, the third consecutive month of revenue growth.

International markets: passenger revenues were up 19.6 percent. The number of passengers was up slightly, 1.4 percent. Separately, the International Air Transport Association showed that international air traffic demand was up in March by 10.9 percent. (Source: ATA, IATA press releases).

Premium Travel Up Again in February
The front of the plane is filling up again, according to the International Air Transport Association's latest figures.

February saw a 5.9 percent increase in premium travel and a 6.9 percent increase in economy travel, IATA said.

The level of economy travel is close to recovering to early 2008 levels, but premium travel is still 16 percent down on previous highs. Still, as world trade increases, so does premium travel. The Far East, South American and Middle East did the best; Europe, the North Atlantic, the Pacific and Africa were weakest.

Europe Institutes Post-Volcano Relief Plan for Airlines
The volcanic ash that shut down the skies over Europe cost airlines, which already expected to lose $2.8 billion this year, another $1.7 billion, according to the International Air Transport Association.

The five-day shutdown, canceled 100,000 flights and left 10 million passengers stranded. However, the European Commission was asking member nations to provide airlines immediate relief with measures such as making market-rate loans and deferring payments for air traffic control services.

Under normal circumstances, that would be considered illegal aid under EU rules. The crisis also appeared to give impetus to move to create a single European Sky. (Source: IATA, news reports).

Gogo Inflight WiFi Introduces Monthly Subscription Good on Multiple Airlines
Aircell, a major provider of inflight WiFi, has introduced the Gogo Monthly Subscription, which you can use on any airline whose fleet uses Gogo's inflight WiFi service.

Previously such monthly subscriptions had only been good on one carrier-fine for a frequently flyer who always flies the same carrier, but not for those who fly different airlines in a single month.

It can be redeemed on any carrier using Gogo, but initially will be available for purchase only on AirTran Airways, American Airlines, Delta Air Lines and Virgin America; all airlines that have equipped a high percentage of their fleet with Gogo. (Source: Gogo press release).

Germany, Netherlands Integrate Trusted Traveler Programs With U.S.
The United States is integrating its biometric-based trusted traveler programs with those of the Netherlands and German.

These programs expedite pre-approved, low-risk travelers members' trips through Customs upon arriving in the country. Under these partnerships, travelers can apply for both the U.S. Global Entry and the German Automated and Biometric Border Control or the Netherlands Privium programs simultaneously. (Source: Department of Homeland Security).

Hotel Industry Recovery Looks Stronger

Volcano´s Impact on Hotels Balances Out
The Iceland volcano´s impact on European hotels wasn´t all bad, according to Trust International, a major hotel reservations company.

Cancellations increased to a peak on Monday, April 19, to reach more than 50 percent over normal levels. But new reservations also curved upward by more than 25 percent, suggesting travelers were postponing rather than canceling trips altogether.

Hotels witnessed increased levels of guests extending their stays and walk-in bookings as travelers booked hotels after their flights were cancelled, which helped mitigate the effect of the cancellations.

Richard Wiegmann, manager director of Trust International, said that the international hotel industry is in recovery and the outlook for the rest of the year remains promising. (Source Travel Trust press release).

U.S. Hotel Industry Recovery Looks Stronger Than expected
The U.S. hotel industry should do better than initially expected this year, with occupancy increasing by 1.9 percent to 55.8 percent, according to Smith Travel Research.

Next year, STR says occupancy will increase 1.9 percent to a still relatively low 56.8 percent and average daily rates will increase 3.5 percent. The industry won´t be back to levels of 2007 or 2008, but the industry should see 2 good years in a row, said Mark Lomanno, President of STR. (Source: STR press release).

Car & Rail

Avis Tries to Block Hertz-Thrifty Deal
A suitor may throw a wrench into Hertz´ plans to buy Dollar Thrifty Automotive Group.

Avis Budget Group told the Dollar Thrifty board that it is prepared to make a substantially higher offer, saying that Avis had several times expressed interest in acquiring Thrifty.

Avis said that the heads of the two companies had had a date to discuss the matter, but Thrifty canceled it when it announced the Hertz deal.

Acquiring Thrifty would move up Hertz by about 300 domestic corporate locations and 1,250 international franchises. (Source: Hertz and Avis press releases).

Airline Security Vs. Privacy

A recent study found Americans are willing to put up with some loss of privacy in return for greater air security.

• 93 percent said they are willing to sacrifice some privacy.
• 65 percent said they would put with full electronic scans
• 57 percent would go through biometric security checks such as iris scans or fingerprints
• 72 percent said they would provide personal data in advance

Source: Unisys Security Index press release.

Lufthansa Business Lounge and Beer Garden

Just in time for spring, Lufthansa guest traveling through Munich are in for a Bavarian first: Beginning this March 23rd, customers and Business Class guest can relax in a Lufthansa lounge with its own beer garden.

In cooperation with Munich's Franziskaner brewery, Lufthansa customers will enjoy draft beer on tap and Bavarian pretzels while relaxing at traditional beer tables overlooking the scenic, Bavarian Alps.

The beer garden is integrated in the refurbished Business Lounge in the Schengen departure area (Gate area G, opposite G28) of terminal 2.

Covering a total floor space of 11,840 sq. feet or 1,100 sq. meters, the lounge is equipped with more than 300 seats and has new opportunities for customers to work, or simply unwind and relax.

Source: Lufthansa News

Airline updates: fees increase

International Premium Travel Sees First Uptick in Nearly Two Years
The International Air Transport Association reported that international premium travel was up 1.7 percent in December 2009 over a year earlier. That’s the first increase since May 2008. Economy travel was up five percent over a year earlier.

The recession hit airlines hard throughout the first half of 2009, but a post-recession upturn began in the second half. May marked the low point for premium travel while February marked the low point for economy travel. (Source: IATA press release).

Global Air Capacity Grows for the Sixth Month in a Row More good news came from OAG, the aviation data tracking company.

It reported that in February, global airline capacity was up five percent, the sixth month in a row that it has increased. The single exception: North America, which reported a one percent decline in February in both flight frequency and capacity.

However, North America saw positive growth of three percent and two percent for frequency and capacity in flights to and from the region. Decreases continue on service between North America and Western Europe, where routes have five percent fewer seats and five percent fewer flights for the month.

Still, the OAG said airlines are adding routes in North America—108, with most being domestic flights. (Source: OAG press release).

U.S. Airline Revenue Up for First Time in More Than a Year
Other positive airline news: The Air Transport Association reported that passenger revenue rose 1.4 percent in January, reversing 14 consecutive months of declines.

Traffic was down very slightly--.4 percent—and the average price to fly one mile was up very slightly--.6 percent. James C. May, president and CEO of the ATA, said that the small revenue increase, coupled with a 17 percent increase in cargo traffic, could be the sign of a recovery. (Source: ATA press release).

Business Travel Continues Slow Recovery
Business travel continues its slow recovery with more than one in seven (15 percent) adults planning at least one business trip during the next six months, up from 13 percent recorded one year earlier.

According to the travel horizons survey co-authored by Ypartnership and the U.S. Travel Association.The U.S. Travel Association projects a slight increase in both business and leisure travel for 2010 over 2009. The "perceived safety of travel," declined from 93.8 in October 2009 to 84.8 in February 2010, presumably due to lingering concerns about the "Christmas Bomber" incident that occurred in Detroit over the recent holidays. (Source: Ypartnership and U.S. Travel Association press release).

Virgin America Ups Baggage Fees, American Charges for Blankets
Airlines continue to add on fees. American Airlines, following the lead of other airlines, will charge $8 for blankets and pillows in coach starting May 1.

Virgin America upped its baggage fee for all checked bags to $25 from $20. First Class passengers continue to check two bags for free; Main Cabin select and Main Cabin passengers with refundable fares can check their first bag for free. (Source: Virgin America press release, American statement).

Road Warriors Biggest Worry is Those at Home
Nearly 74 percent of business travelers say their stay-behind spouse has expressed concern about being left home alone, according to a survey commissioned by Logitech, a Swiss technology company.

Even more, 79 percent frequently worry about their significant other when traveling for business. Fifty-nine percent said they would look for a job with less business travel when the economy improves. And 54 percent would take a $5,000 paycut if it meant never having to travel for work again. (Source: Logitech press release)

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