Airline News

Here are monthly business travel press releases for Airlines and airport travel. These include the latest news releases on fares and new taxes that are being applied to the travel industry.

News Airline taxes Baggage fees and Security

November 11, 2011 By Jack Kennard

TSA Tries Using Pre Screening to Make Security Process Faster
Sick of airport security screening process? You´re not alone.

Delta Airlines kiosk check in at the Atlanta Airport.

The aviation industry recognizes that and is trying a variety of short term and long term changes that are designed to make airport security faster and more pleasant. One short-term initiative is the Transportation Security Administration´s PreCheck experiment at four U.S. airports.

Airline customers volunteer information about themselves in the hopes that it will speed their trip through security. Eligible travelers go through a lane with expedited screening. Passengers participating in the program are certain frequent flyers from American Airlines and Delta Air Lines’ frequent flyer programs as well as participants in the Customs and Border Protection Trusted Traveler programs.

The TSA is testing PreCheck at Hartsfield-Jackson Atlanta International, Detroit Metropolitan Wayne County, Dallas/Fort Worth International and Miami International airports. (Source: TSA press release).

Airlines, Consumer Groups Lobby Against New Taxes
Airlines, pilot, flight attendant and other airline unions and consumer groups are fighting proposed tax increases on airlines and their passengers, saying the new taxes will cost jobs.

The first tax would add a $100 departure fee to all flights. The second would double the existing passenger security tax to $5 per one-way trip in 2012, and triple the taxes to $7.50 by 2017. It is currently $2.50 per flight segment per one-way trip, maxing out at $5.

The coalition says that nearly 120 members of the House of Representatives have told congressional leaders that the $100 departure tax would cost airlines $1 billion a year. The coalition has launched a website, www.stopairtaxnow.com. (Source: Air Transport Association press release).

Airline CFOs and Cargo Heads Glum About the Next Year
A monthly survey of airline CFOs and cargo heads, which has been a fairly accurate economic predictor, finds that their expectations for profitability for the next 12 months is down significantly.

It’s down more for cargo, in particular; airlines are seeing sharp drops in this area. However, even though confidence has fallen to levels seen in the first half of 2009, airlines say they are continuing to hire new employees. (Source: International Air Transport Association October Airline Business Confidence Survey).

Airlines Take in $1.5 Billion in Baggage Fees and Reservation Change Fees
Airlines collected $1.5 billion in baggage fees and change fees in the second quarter, according to the Department of Transportation. Airlines took in $887 million in baggage fees and $612 million from reservation change fees. Delta Air Lines topped the list, collecting $392,000 in fees, followed by American Airlines, $249,936 and United Airlines, $164,767. So far, the DOT tracks only baggage and change fees, but it has proposed requiring airlines to report a total of 16 different fees.

Separately, travel technology company Amadeus estimates that airline ancillary revenue will total $32.5 billion worldwide in 2011. It projects that ancillary revenues for major U.S. airlines will increase to $12.5 billion this year from $6.7 billion last year. That is 38 percent of the global total and represents seven airlines: Alaska, American, Continental, Delta, Hawaiian and U.S. Airways.

Amadeus partnered with Ideaworks, a consulting company, on the projections. Ideaworks believes the majority of ancillary revenue for US major airlines comes from selling frequent flier miles. Baggage fees account for 20%.

The rest comes from a la carte items such as selling food and beverages wifi, early boarding and other benefits. US-based airlines have readily adapted to an a la carte world, but they also benefit from consumers who are keen to get frequent flier miles. (Source: DOT, Amadeus press releases).

Filed Under: Airline News Tagged With: airport, Delta, tax

Aviation Taxes, Consumer Protection Rules & WiFi

October 6, 2011 By Jack Kennard

Aeromexico

Travel Industry Opposes New Aviation Taxes
Both the aviation industry and travel and tourism industries are opposing the President Obama’s plan to impose $3.5 billion annually in new taxes on airlines and their passengers to help pay off the country’s budget deficit. A major bone of contention: an increase in the Aviation Passenger Security Fee.

The proposal would up it to $5 per flight. It had been $2.50 per flight segment, for a maximum of $5 per one-way trip. The fee would then increase by 50 cents each year through 2017, maxing out at $7.50. Fifteen billion dollars of the new taxes would go into the General Fund for debt reduction, with any money beyond that going toward the Transportation Security Administration´s (TSA) discretionary appropriations.

The Air Transport Association says fee increases will force airlines to raise fares or reduce service, which will mean fewer jobs. According to the ATA, federal taxes and fees in the United States account for $61, or 20%, of the cost of a typical $300 domestic round-trip ticket.

The U.S. Travel Association, a travel industry advocacy group, also opposed the tax, saying that any increase in travel fees should be invested directly into the national travel system and infrastructure. The travel industry in general has taken the position that governments are responsible for national security costs, not specific industries. (Source: ATA and USTA press releases).

Airlines Lose Bid to Delay Implementation of New Consumer Protection Rules
Three low-cost carriers lost their legal challenge of new Department of Transportation consumer protection rules scheduled to go into effect Jan. 24.

The U.S. Court of Appeals in the District of Columbia denied Southwest Airlines, Spirit Airines and Allegiant Airlines’ attempt to block a rule that would require them to include all taxes and fees in the fares they advertise instead of breaking them out separately. The airlines say that they differentiate themselves with low fares and want consumers to know how much of what they pay goes to taxes.

Airlines also asked the court to review a ban on raising airline prices after consumers buy their ticket. And they protested the new rule requiring airlines to let consumers cancel a flight without penalty within 24 hours of booking that flight.

Many airlines, already do this; including American Airlines, Continental Airlines, Delta Air Lines, Frontier Airlines and US Airways. But Spirit says that consumers will abuse this and the result will be higher ticket prices. The court denied the airlines´ challenge, saying that they had not met stringent requirements for such as stay. (Source: court documents).

Airlines Lose Bid to Delay Implementation of New Consumer Protection RulesAirlines Lose Bid to Delay Implementation of New Consumer Protection Rules

One in five users of Gogo inflight internet service say that they’ve switched carriers because they´d rather be on flights with inflight internet service, according to a survey of 7,000 Gogo users. Inflight Wifi is particularly important to business travelers, according to Gogo, which provides inflight Wifi to eight airlines. Three airlines have Wifi on their entire domestic fleet: AirTran Airways, Delta Air Lines and Virgin America. Five more have it on select aircraft; they are: Air Canada, Alaska Airlines, American Airlines, United Airlines and US Airways. (Source: Gogo press release).

Pace of Air Travel Growth Starts to Slow
As expected, passenger air travel growth began to slow in August, according to numbers just released by the International Air Traffic Association. Passenger demand was up 4.5%, less than the 6% July increase.

North American carriers reported the weakest performance with growth of just 2.9%, which was partly a result of equally slow growth in capacity. This is a sharp downturn from stronger growth earlier in the year, as reflected in the 5.6% year-to-date demand expansion. However, North American carriers had the highest load factor at 86.1%. (Source: IATA press release).

Filed Under: Airline News Tagged With: gogo, taxes, tsa, wifi

Airlines Expect Economic Recovery

August 15, 2011 By Jack Kennard

First Quarter Airfares Jump 8.4 Percent
First-quarter airfares rose to $356, an 8.4% increase since the same period a year ago, according to the Department of Transportation. They were up 4.7% from the first quarter of 2010.

Pool and beach at Hilton Resort Barbados

Air fares in the first quarter of 2011 increased 2.3% from the first quarter of 2001, compared to an overall increase in consumer prices of 26.8%during that period. Passenger airlines collected 71.3% of their total revenue from passenger fares during 2010. (Source: Department of Transportation).

Airlines Expect to See Some Economic Recovery
Airlines expect to see some economic recovery in the next 12 months, according to the International Air Transport Association’s latest quarterly Airline Business Confidence Survey.

Fuel, of course, remains a problem, but it’s somewhat offset by strong traffic demand. And, airlines are also more optimistic about the broader economic outlook. Many airlines reported improved traffic volumes during the second quarter of 2011.

Traffic in general was up, with air travel in May up 4% from the beginning of the year. Finally, Jet fuel prices are lower than they were $130 per barrel instead of $140, but still nearly 50% higher than the average level the same quarter a year before. (Sources: IATA).

May Number Improve for Both Economy and Premium Travel
The number of passengers in both premium and economy grew in the second quarter, an encouraging sign after a disappointing first quarter, according to the International Air Travel Association.

It says that premium travel typically grows in line with developed countries international trade, which has been growing at three to four percent. On the other hand, business confidence is also a good indicator for air travel and confidence has declined in the past several months. This suggests that the May data may be exaggerating the underlying growth of premium travel.

The picture is a mixed one across geographic regions. On the North Atlantic, premium traffic is up 12.4%, reflecting strengthening trade. Europe and the Asia markets have also grown, 13.2%. But another key premium market, the Pacific, remains weak with a growth of less than four percent, in part because of events affecting Japan. (Source: IATA press release)

U.S. Air Travel Reports Spending Increases in June, But At a Slower Pace

The Air Transport Association said air travel spending was up 7% in June 2011 compared to June 2010. It was the 18th consecutive month of revenue growth for U.S. carriers, although the overall rate of growth is slowing.

Challenges lie ahead, especially with the jet fuel expected to average 40% higher than the 2010 average. The ATA said the U.S. domestic revenue grew nearly six percent. Transatlantic revenue grew 5.6 percent, transpacific revenue increased 5.5% and Latin American/Caribbean revenue grew 22 percent. (Source: ATA press release).

Airlines On Time Performance Up Over Previous Month But Down from Last Year
Major carriers´ on time performance was better in May than April but down from May 2010, according to the Department of Transportation. Tarmac delays of three hours or more jumped to 16 in May 2011, up from one in May 2010 and four in April 2011. But 14 were on the same day when bad weather hit Chicago´s O´Hare Airport. (Source: DOT press release).

Filed Under: Airline News

US Airline Traffic & Passenger Revenues Are Up

July 13, 2011 By Jack Kennard

Airline Traffic is Up Again
Air traffic was up 6.8 percent in May, according to the International Air Transport Association, although political unrest in the Middle East and the European currency crisis are having some impact.

North American carriers continued to trim capacity, by .4 % in April and .5 percent in May. North American traffic was up 4.5% and capacity was up 5.5% over last May. Because of North American airlines’ cautious capacity management, they had the highest load factors (81.8%) of all the regions.

European capacity was up 10.9% and its load factors were 77.7%. Asia Pacific growth was less than other regions, just 4.7%, because of the continuing impact of the earthquake and tsunami in Japan. (Source: IATA).

US Airline Passenger Revenues Are Up for the 17th Month in a Row
Once again, major U.S. airlines saw their passenger revenues increase, 14.4% in May, the 17th consecutive month they're seen an increase, according to the Air Traffic Association. Much of that is due to an 11% increase in yields.

Trans-Atlantic revenue increased 13% from a year ago. Trans-Pacific revenue rose 12% as higher passenger yields offset a drop in the number of passengers following the Japanese earthquake and tsunami. Latin American/Caribbean revenue grew 26% as passenger yields rose 19%, the largest increase of any region.

The busy summer travel season and an improving economy could help airlines deal with high-energy costs. (Source: ATA press release).

Airline Transactions Dip, but Fares Increase
The number of airline transactions that is, tickets sold is decreasing slightly, but airfares are increasing, according to the Airlines Reporting Corp., which processes the vast majority of airline fares.

In May, transactions dipped .9% year over year and 1.66% year to date. But fares went up--4.49% year over year and 6.9% year to date, showing that airlines are for once managing to increase fares and improve their yields.

Meanwhile, the American Express Business Travel Monitor is reporting that domestic airfares for first quarter exceeded pre-recession levels for the first time, rising ten percent over the first quarter of last year.

Rising oil costs and an increase in business travel are two reasons for the increase. The average first quarter domestic airfare is now $247. International fares, however, remain lower than their first quarter average, but could surpass that later this year, according to the Business Travel Monitor. (Source: ARC, American Express press release).

Low-Cost Carriers Continue to Increase Their Market Share
Low cost carriers now operate more than one flight in five in the world, according to OAG FACTS (Frequency and Capacity Trend Statistics).

OAG said that global seat capacity in June was up 5% over last year and frequency was up 3%. But low-cost carrier’s capacity and frequency were up even more, to 9%. Europe has the highest percentage of LCCs, with 28.2% of all flights operated by LCCs. (Source: OAG press release)

Airlines Move Forward on Developing Bio Fuel
Airlines keep looking for alternatives to oil, whose price fluctuations plague the industry. Seven major U.S. carriers have signed letters of intent with Solena Fuels for a future supply of jet fuel that would be derived exclusively from biomass to be produced in California.

Solena’s GreenSky California biomass-to-liquids (BTL) facility will turn post-recycled urban and agricultural wastes into 16 million gallons of neat jet fuel per year by 2015. The airlines are all members of the Air Transport Association. (Source: ATA press release).

Filed Under: Airline News

Airline fees and Tarmac delays

June 29, 2011 By Jack Kennard

Cayman Airways

Airlines are Making More with Ancillary Fees All those fees for services and amenities that were included in your airline ticket including baggage (although Southwest Airlines lets you check two bags free and your first checked bag fee is free with JetBlue Airways), seat assignments, meals, in-flight entertainment and etc. are adding up. The number of airlines charging those bag fees increased from 23 to 47 last year, according to an annual study by Amadeus, a major global distribution system. Fee revenues were up 38 percent to $21.46 billion. And for a few airlines, ancillary fee revenue now generates nearly 30% of their revenue. Topping that list: vacation carrier Allegiant Air, 29.2%; Spirit Airlines, 22.1%. (Source: Amadeus press release). What Bothers Air Travelers Most - Fees and Discomfort All those fees and lack of comfort are sore points with air travel consumers and it’s why some people are traveling less, according to a Consumer Reports survey. Eight of ten major airlines got low grades on seat comfort and several others got low marks for cabin crew service, cleanliness and in flight entertainment. Two exceptions: Southwest Airlines and JetBlue Airways. Southwest got top marks for check in and cabin crew; JetBlue scored tops on seating comfort. US Airways scored lowest overall and has the worst marks for cabin crew service. Flyers were also unhappy about service fees: 40% of those who say they’re flying less blame fees. The fewer fees airlines charged, the happier passengers are and, interestingly enough, both Southwest and JetBlue are stable on bag fees. (Source: Consumer Reports press release). More People Will Take to the Skies This Summer The Air Transport Association of America is projecting that about 1.5% more people will fly this summer than did last year, to the tune of 2.24 million people in the air every day. The ATA predicts that 206 million passengers will fly between June and August 2011. That is well below the pre-recessionary high of 217 million in the summer of 2007. (Source: ATA press release). Airfares Rose in Fourth Quarter 2010 Average domestic airfares rose to $337 in the fourth quarter of 2010, up 5.2 percent from the average fare of $320 in the fourth quarter of 2009, according to the U.S. Department of Transportation. Newark-Liberty, NJ, had the highest average fare, $461, while Atlantic City, NJ, had the lowest, $156. Despite that increase, airlines are correct in saying that, long-term, fares are staying low. The DOT calculates that in 1995 dollars, the average airfare in the fourth quarter of 2010 was $236, compared to $288 in 1995 and $300 in 2000. Adjusting for inflation in 1995 dollars, fares in 2010 averaged $235, up 6.7 percent from 2009 but down 21.6 percent from the inflation-adjusted high of $300 in 2000. (Source: DOT press release). Tarmac Delays Keep Decreasing Here is some good news for flyers. March was the fourth month out of the last six that the nation’s airlines reported no tarmac delays of more than three hours, according to the Air Travel Consumer Report just released by the U.S. Department of Transportation (DOT). A year ago, in March 2010, the carriers reported 25 tarmac delays longer than three hours. Carriers also reported a decrease in the rate of canceled flights in March compared to a year earlier. (Source: DOT press release).

Filed Under: Airline News Tagged With: northwest

DOT rules & Airline revunes up

May 10, 2011 By Jack Kennard

State Department Issues Summer Long Foreign Travel Alert
The State Department’s worldwide travel alert issued after U.S. Special Forces units killed Osama bin Laden advises Americans to exercise caution if they’re in areas more prone to anti-American violence.

It suggests that travelers overseas enroll in the State Department´s Smart Traveler Enrollment Program (STEP) for travel updates, information and security issues.

It´s important to note that support for Osama bin Laden in the Arab world has fallen sharply, according to two highly respected sources, the ABC News Polling Unit and the Pew Research Center, (Source, State Department press release, ABCNews.com)

Issues New DOT Rules Give Passengers a Break
New Department of Transportation rules have brought sweeping changes to the way airlines deal with you. Airlines now must disclose hidden fees, pay back your baggage fee if they lose your bags and pay you more for bumping you—as much as doubling the amount in some instances.

Airlines now must let you cancel reservations at no charge within 24 hours of making that reservation as long as it is at least seven days before departure.

The new rule also expands the ban on lengthy tarmac delays. What it doesn´t do, however, is to require airlines to display full fee information on any platform selling airline fees. Right now, it only requires airlines to provide all fee information on their own websites, but not to travel agencies (online or brick and mortar) or travel management companies (TMCs).

That makes it tough to do comparison shopping when you’re trying to find the least expensive flight. (Source: DOT press release, Global Business Travel Association press releases).

Airlines Add Employees
For the third month in a row, passenger airline employees increased, by .1%. Three network airlines cut employees--American Airlines, Alaska Airlines and United Airlines, according to the Department of Transportation DOT.

Low-cost carriers Virgin America, Spirit Airlines, Allegiant Air, JetBlue Airways, AirTran Airways and Southwest Airlines increased employees. Low-cost carrier Frontier Airlines reported a 3.1 percent decrease in employees. (Source: DOT press release).

Air Revenues Are Up 13%
Although airlines are battling high fuel costs, the Air Transport Association reported that passenger revenue rose 13 percent in March 2011 compared to the same month in 2010, marking the 15th consecutive month of revenue growth. U.S. domestic revenue grew 12.5 percent, fueled in large part by an 11.5% yield increase.

Trans-Atlantic revenue grew 7% from a year ago, but represented the smallest increase of the four major regions tracked by ATA, largely due to a softer pricing environment. Trans-Pacific revenue rose by 14% despite a 10 percentage point drop in load factor.

Routes to and within the Pacific region posted the largest yield increase 16% of any region. (Source: ATA press release).

Airlines Increase Capacity to Meet Demand
Planes are flying full, airline revenues are up, so carriers are adding capacity, according to the OAG Frequency Capacity Trend Statistics. Airlines are adding 17.9 million seats, a 6% increase, a percentage point ahead of the 5% monthly capacity increase so far this year.

The Asia Pacific and Middle East are showing the most growth, European routes are next. China is now the second largest domestic market, second only to the United States. (Source: OAG press release).

Filed Under: Airline News

Airline news: Oil cost, wifi & Tarmac delays down

April 11, 2011 By Jack Kennard

U.S. Airline Revenues Are Up—But Oil Costs Hurt
Passenger revenues for U.S. carriers were up 13% in February, the latest figures available from the Air Transport Association, marking the 14th consecutive month of revenue growth for a core group of U.S. airlines.

Miles flown by paying passengers were up 2.1%, while the average price to fly one mile rose 10.8%. International markets remained especially strong, with passenger revenue growing 17%, led by a 27% increase in Pacific revenue. Domestic revenue grew 11.5%, fueled in large part by a 10.5% increase in yield. Figures are based on data from seven major U.S. carriers and 20 regional carriers. (Source: ATA press release).

Air Traffic is Up, But Still Below Pre-Recession Levels
Air traffic was up 2.9% in December 2010 over December 2009 according to the latest figures from the Department of Transportation.

The December 2010 passenger total was 2.1% above that of two years ago in December 2008 but still remained 3.6% below the pre-recession level of 60.8 million in December 2007. The number of scheduled domestic and international passengers on U.S. airlines increased 2.4% in 2010 over 2009 to 720.4 million. The number of passengers declined 3% from the full year 2008 to the full year 2010. U.S. airlines carried 2% more domestic passengers and 5.9% more international passengers in the full year 2010 than in 2009.

In December, Southwest Airlines carried more total system and domestic passengers than any other U.S. airline. (Source: Department of Transportation).

Triple Digit Oil Prices Could Crimp Business Travel Growth—But Not Stop It
Short-term oil price spikes might slow business travel growth but shouldn’t stop it, according to a study by the Global Business Travel Foundation. It found that because business travel pays off, companies will continue to invest in it even if rising fuel costs make travel more expensive.

Even if oil hits $200 per barrel, business travel and the number of trips taken would continue—although high oil prices would hurt the rate of projected business travel growth over time. (Source: GBTA press release).

No Tarmac Delays of Longer Than Three Hours In February
No airline passengers sat on the tarmac for more than three hours in February, down from 60 flights in February 2010, according to the U.S. Department of Transportation (DOT).

February was the tenth full month of data since a new rule prohibiting carriers from keeping planes on the tarmac for more than three hours went into effect. Large parts of the country saw severe weather during February, and airlines canceled 4.9 percent of their scheduled domestic flights, compared to 5.4 percent in February 2010 and 3.9 percent in January 2011.

The number of canceled flights with tarmac delays of more than two hours increased only slightly, from 289 between May 2009 and February 2010 to 331 between May 2010 and February 2011. There were 19 canceled flights with tarmac delays of more than two hours in February 2011, down from 21 in February 2010. (Source: DOT).

United Continental Expands Wi-Fi Service to More Than 200 Aircraft
United Continental Holdings, Inc., is adding Wi-Fi service to more than 200 domestic Boeing 737 and 757. It’s using LiveTV’s Ka-band technology, which offers offer higher transmission speeds for more extensive onboard connection capabilities, including browsing content-rich websites, sending and receiving e-mails and downloading files. The airline will start offering the new service next year. Right now, United offers in-flight Wi-Fi on 14 aircraft. (Source: United Continental Holdings press release).

Filed Under: Airline News Tagged With: delays, oil, Southwest, United, wifi

Travel news Air traffic fees increases & Tokyo Haneda Airport

March 10, 2011 By Jack Kennard

Air Traffic Is Up and So Are Oil Prices
Air traffic continues to increase, says the International Air Transport Association, with passenger traffic up 8.2% in January, better than December, when severe weather in Europe and North America slowed the recovery. January´s air travel volumes were 18 percent higher compared to the low point reached in early 2009 and some 6% above the prerecession peak of early 2008.

The problem with this otherwise rosy picture? Oil prices. The industry´s current forecasts were based on $84 per barrel oil and that price is now up to more than $100, said Giovanni Bisignani, IATA´s director general and CEO. A $1 increase in the price of oil means the industry has to recover $1.6 billion in additional costs. Bottom line? It´s another challenging year for airlines. (Source: IATA press release).

Airlines Test the Waters With Fare Increase
Early last month, several carriers initiated fuel surcharges that ranged from $4 to $10, according to airfare comparison website FareCompare.com.

Except for some peak travel miscellaneous surcharges for popular travel periods, U.S. consumers haven´t seen domestic fuel surcharges since November 2008, according to Rick Seaney, FareCompare´s CEO. And airlines continue to try hiking fares. Late last month legacy carriers tried a $20 fare hike but ultimately cut that in half when low-cost carriers countered with a $10 fare hike. (Source: FareCompare.com).

American Fined for Charging Bumped Passengers a Fee
Read the fine print if you volunteer to give up your seat on an overbooked flight. The Federal Aviation Administration has fined American Airlines $90,000 for failing to disclose that vouchers given to passengers who voluntarily gave up their seats on oversold flights could be redeemed only after paying a ticketing fee of as much as $30.

Airlines have to look for volunteers before involuntarily bumping passengers, when the Department of Transportation requires the airlines to pay travelers cash in most cases. Ray LaHood, US Transportation secretary, said that if you give up your seat, you deserve full compensation—and not find out later that they have to pay $30 to use it. (Source: DOT press release).

Major Carriers Tout Service into Tokyo´s Haneda Airport
Carriers are adding flights to Tokyo´s Haneda Airport, located near Tokyo´s business center, even as they maintain service to the larger—and more distant—Narita. Delta Air Lines is now flying between Tokyo Haneda and Detroit and Los Angeles.

American Airlines has also begun flying nonstop between JFK and Haneda. The new service is a result of the Open Skies Agreement that the U.S. and Japan signed in October. U.S. carriers aren´t the only airlines flying into the more conveniently located Haneda; British Airways launched its new route to Haneda in Japan on Feb. 19. (Source: American, British Airways, Delta press releases).

Low Cost Carriers Add Workers & Network Carriers Cut Them
Low-cost carriers reported an increase in fulltime employees in December, the latest figures available, while network carriers reported fewer, according to the Department of Transportation.

The result was that the number of fulltime employees for passenger airlines increased .2%. It´s a major turnaround for the industry, which saw employee numbers drop for the 28 months up until November 2010, when there was no change. (Source: DOT press release).

Filed Under: Airline News

Delta Economy Comfort, Airline fares up, Free Facebook

February 9, 2011 By Jack Kennard

Delta International Economy Confort
More comfort is coming to an international flight near you. Starting this summer, you'll experience more space, legroom, and recline on our long-haul international flights as we introduce "Economy Comfort"—a new section of seats located at the front of the Economy cabin that will feature up to four more inches of extra legroom and 50 percent more recline.

SkyMiles Diamond and Platinum Medallion level members who purchase an International Economy ticket on Delta will receive free access to Economy Comfort seats. Gold and Silver Medallions, International Economy ticket on Delta receive a 50% and 25% discount, respectively, on applicable Economy Comfort seat fee.

Airlines Do Better in 2010, But Weather Hurts Them
You can’t win for losing in the airline industry. Business last year was the best it’s been since before the 2008 recession, according to a just-released International Air Transport Association report on 2010. But severe weather in the U.S. and Europe put a dent in that recovery, with storms on both sides of the Atlantic shaving an estimated one percent off traffic numbers in December alone.

As a result passenger demand grew just 4.9 percent over December 2009 , significantly lower than the 8.2 percent growth recorded in November. Hardest hit was Europe, which saw December growth slow to 3.3 percent. However, demand for passenger business was up 8.2 percent and load factors were up 2.7 percent. What regions of the world saw the most growth? The Middle East, where business grew 17.2 percent. (Source: IATA press release).

Airfares Go Up
Airfares in the U.S. increased 10.7 percent to $340 in the third quarter, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics. Newark-Liberty, NJ, had the highest average fare, $469, while Atlantic City, NJ, had the lowest, $153.

That sounds like a healthy jump until you compare today’s fares to those in 2000. When adjusted for inflation, third-quarter 2010 fares in 1995 dollars were $238, down 19.8 percent from the average fare of $297 in the third quarter of 2000, the inflation-adjusted high for any third-quarter since 1995. (Source: DOT press release).

Airlines Expected to Reap Highest Profits in a Decade
AirlineFinancials.com is estimating the eight largest U.S. airlines will report $3.95 billion in profits from $122.2 billion in revenues for year 2010, with their average net profit margin projected at 3.3 percent.

Assuming these projections are accurate, this would be the highest annual profit in more than 10 years and the second highest annual revenue ever reported. It will also be the first time in a decade that the airline industry will have a fourth quarter profit and a profit over three consecutive quarters. All the airlines reported a profit for 2010 and the fourth quarter, except American. The carriers covered include Delta, American, United (including Continental), US Airways, Southwest, JetBlue, Alaska and Air Tran. (Source: AirlineFinancials.com.)

GoGo and Ford Offer You Free Facebook Inflight in February
GoGo Inflight Internet and Ford Motor Company are offering travelers flying on GoGo-equipped aircraft free access to Facebook for February. Participating airlines include AirTran, Alaska, American, Delta, United, USAirways and Virgin America.

To use it, turn on your device (after the aircraft is above 10,000 feet), select the GoGo wireless network, open your browser and click on the Ford/Facebook banner. (Source: GoGo press release).

The Front of the Plane is Filling Up
The front of the plane is filling up again, according to the International Air Transport Association. Premium class seats are up 16 percent in the Far East, up 10 percent between Europe and the Far East and up 9 percent on the North Atlantic.

Despite the improvement, premium business is still below late 2007 levels. Mexicana’s bankruptcy continues to have an impact in Central America, where premium travel is down 63 percent. (Source: IATA press release).

Filed Under: Airline News Tagged With: Delta, gogo, medallion, skymiles

Fuel prices Traffic growth International wifi

January 6, 2011 By Jack Kennard

Southwest’s Kelly Calls Fuel Prices Aviation’s Greatest Threat
Gary C. Kelly, chairman, president and CEO of Southwest Airlines, said that the greatest and most serious challenge facing aviation is the cost of fuel. Speaking at the Wings Club in New York last month, he said that a look over the past decade shows the havoc soaring fuel prices wreak on aviation.

Kelly, who was just named vice chair of the Air Transport Association board, said that the ATA has three major goals: make a serious effort to develop alternative fuels, modernize air traffic control and develop the latest next generation aerospace technology. “Otherwise we see a continuing diminunization of air transport domestically,” he said. (Source: Kelly´s speech).

Air Traffic Growth Slows But Outlook Remains Positive
Air traffic growth slowed slightly in November, growing 8.2 percent year over year as opposed to the 10 percent increase reported in October, according to the International Air Transport Association.

Even with that decline, however, passenger and freight traffic are growing at an annualized rate of between five and six percent, which is in line with industry´s historical growth trends.

The level of air travel is now four percent above the pre-recession peak of 2008. North American carriers´ November passenger levels equal the pre-recession levels of early 2008. Giovanni Bisignani, IATA´s director general and CEO, said that a strong end to 2010 has boosted the year’s profit forecast to $15.1 billion. (Source: IATA press release).

U.S. Carriers See Continued Growth; Global Air Capacity is Up
U.S. airline revenue grew 14.5 percent in November, according to the Air Transport Association, which tracks a core group of carriers, including major network carriers, low-cost carriers and regional airlines.

It was the 11th consecutive month of revenue growth. The miles flown by paying passengers rose 6.5 percent, while the average price to fly a mile rose 7.5 percent. Passenger revenue improved 11 percent domestically and 23 percent in international markets.

Separately, OAG, which tracks air traffic, said that global air capacity grew six percent in December. Over the last ten years, the number of available seats worldwide has increased 40 percent, while the number of flights has increased 24 percent.

Capacity in the Americas and Europe are growing at a modest rate while Africa, Asia Pacific and the Middle East are increasing at much higher rates. The improving global economy is having a positive impact on passenger demand. (Source: OAG, ATA press releases).

Inflight WiFi Goes International
Lufthansa passengers traveling on long-haul flights can use inflight WiFi on intercontinental routes. The service, which initially will be provided on select North Atlantic routes, will be available on nearly the entire Lufthansa intercontinental network by the end of 2011. The service will be free this month. (Source: Lufthansa press release).

Delta Reinstates Codesharing With Aeromexico After FAA Upgrades Mexico to Category 1
The Federal Aviation Administration’s decision to upgrade Mexico´s federal civil aviation authority to Category 1 means that Delta Air Lines has been able to reinstate codesharing with AeroMexico, Delta´s SkyTeam partner. A Category 1 rating is required to allow U.S. carriers to code-share with an international airline. (Source: Delta press release).

Delta Air Lines
Delta is expanding the First Class cabin on more than 60% of its mainline domestic fleet, approximately 350 aircraft, as it responds to business customers´ requests for more premium cabin seating. The addition of First Class cabins to all Delta Connection regional jets with more than 60 seats, does not impact Delta´s previously announced capacity guidance.

Delta expanded its Asia Pacific network with new nonstop flights between Japan and Honolulu & the Pacific island of Palau. The new service to Palau brings the number of Asia-Pacific destinations offered by Delta to 17. The Nagoya-Honolulu route is a new competitive option for customers traveling between the two cities. Delta´s new service between its Tokyo-Narita hub and Palau operates 4 times weekly and is the only service that connects the two airports.