News Airline taxes Baggage fees and Security

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).

Hotel Updates and a Spotlight on Airports

Hotels

Global Hoteliers Say Worst is Over
The Global Hotel Market Survey shows hotel operators believe that the worst of the crisis is behind them and 2010 will be the beginning of the recovery. Six months ago, the majority of hoteliers were pessimistic, predicting that conditions would get worse.

Hoteliers in regions that are seeing stronger recoveries are the most positive. Asia and the Oceania moved from scores of -41 and -48 six months ago, to +47 and +42 now. Europe, which was the most pessimistic region at the time of the last survey, is now entering positive territory.

Hoteliers in America, which has been possibly the hardest hit region in the world over the last 18 months, now feel more positive about the coming year than in the middle of last year.

Most of the participants expect average room rates to stay more or less the same in 2010, with weak corporate and leisure group business demand, but expect a slight improvement in occupancy, driven by individual leisure travelers. (Source: Horwath HTL press release).

Hotels in the Americas Still See Rates, Occupancies Decline
Despite optimism about the future, the present remains tough for hotels in the Americas, according to the latest STR Global monthly numbers.

In January 2010, the region’s occupancy ended the month virtually flat with a 0.7-percent decrease to 45.5 percent, average daily rate (ADR) fell 6.0 percent to $96.68, and revenue per available room dropped 6.7 percent to $43.98. Boston, Mass., reported the largest occupancy increase, jumping 18.3 percent to 48.9 percent.

Two other markets reported double-digit occupancy increases:

  • Miami, Fla. (up 10.6 percent to 74.6 percent)
  • Rio de Janeiro, Brazil (up 10.4 percent to 76.4 percent)
  • Alberta, Canada, posted the largest occupancy decrease, falling 9.9 percent to 46.9 percent.

Three markets reported double-digit ADR decreases:

  • Washington, D.C. (down 27.2 percent to $132.65)
  • Chicago, Ill. (down 14.5 percent to $85.99)
  • San Juan, Puerto Rico (down 10.8 percent to US$190.01)

(Source: STR Global press release)

Spotlight... on Airports

Travelers continue to be dissatisfied with airports, according to the J.D. Power and Associates 2010 North America Airport Satisfaction Study. Airports continue to struggle with delivering baggage promptly, providing a comfortable atmosphere and making airports easy to navigate. The study found that airports need to consistently deliver on three things:

  • Clear signage
  • Delivering baggage quickly and accurately
  • Partnering with the Transportation Security Administration (TSA) to reduce security wait times.

A few airports are doing better than others. Detroit, Denver and Minneapolis St. Paul were the top three among large airports (Denver and Minneapolis/St. Paul tied for second place). Kansas City, Portland and Tampa were the top three medium sized airports. And Indianapolis, Fort Myers/Southwest Florida and Tucson were the top three small airports. (Source: J.D. Power’s press release).

Airlines Travel Update American and Delta

Alaska Airlines

American AAdvantage Reduces Mileage Accrual, But Drops FF Booking Fee
American Airlines’ AAdvantage no longer offers minimum mileage guarantee for its non-elite status members for shorter flights on American Airlines, American Eagle, AmericanConnection, oneworld member airlines, AAdvantage participating airlines as well as rail service and codeshare service booked under an AA flight number.

Customers now will earn AAdvantage miles only for the actual miles flown or, in some cases, for the applicable percentage of miles flown. But, in a give-back for travelers, American has eliminated the $5 fee to book frequent flyer miles. (Source: American Airlines press release).

New Delta Three-Tiered Award Structure Gives More Flexibility for Redeeming Miles
Delta Air Lines new three-tiered Award structure allows customers to combine dates, as well as Economy, First and BusinessElite cabin seating at various mileage levels to create their itineraries.

SkyMiles members also are able, once again, to use miles to book the last seat on a flight. For booking a round-trip flight, tiers now start at 25,000, 40,000 and 60,000 miles rather than 25,000 and 50,000 miles. Customers may search for and book Award Travel using the new structure online. Members cam earn miles with Delta, Delta Shuttle, the Delta Connection carriers, Delta AirElite and other SkyTeam airlines as well as with more than 100 partners, including the Delta SkyMiles Credit Card. (Source: Delta press release)

American Offers Priority Check
in and Boarding to Eite and Premium Travelers at JFK American Airlines is now offering PriorityAAccess privileges at John F. Kennedy International Airport to AAdvantage elite status members, First and Business Class travelers, AAirpass customers, and full-fare Economy Class customers.

They get a dedicated check-in area at the ticket counter, go through exclusive security screening lanes and have a separate boarding lane at JFK departure gates.

Signs clearly mark special check-in areas and security lanes. Priority AAcess security lanes are also available at Dallas/Fort Worth, Chicago O’Hare, Miami, Los Angeles, New York La Guardia, St. Louis, San Francisco, Boston and San Juan, Puerto Rico. (Source: AA press release).

Global Entry Program Speeds Frequent Travelers Through Passport Control
at Chicago

US. Customs has opened Global Entry centers at Chicago O’Hare International to expedite international arrival processing for returning U.S. citizens and lawful permanent residents.

Global Entry travelers go to a special kiosk and insert their U.S. passports or lawful permanent resident cards into a document reader. The kiosk will direct travelers to provide digital fingerprints and will compare that biometric data with the fingerprints on file.

Global Entry is in place at JFK, George Bush Intercontinental in Houston and Washington Dulles airports. (Source: U.S. Customs and Border Protection press release).

TSA, Continental Test Paperless Boarding in Cleveland
The Transportation Security Administration (TSA) and Continental Airlines are testing Paperless Boarding Passes at Cleveland Hopkins International Airport.

The boarding passes are passengers’ cell phones or PDAs. The passes have bar codes and passenger and flight information; security officers check them with handheld scanners. (Source: Continental press release).

TSA Expands Self Select Lanes to Newark
The Transportation Security Administration has expanded its Self-Select Lanes to Newark International Airport; 44 airports now have these lanes, which direct travelers based on their travel needs and knowledge.

Casual are for less frequent travelers, Family/Special Assistance for those traveling with small children or strollers or with elderly people or those who need special assistance. (Source: TSA press release).

Did You Know That…. 1st Qtr 2007

Beginning January 23, 2007, ALL persons, including U.S. citizens, traveling by air between the United States and Canada, Mexico, Central and South Americas, the Caribbean and Bermuda will be required to present a (1 from the list):

  • valid passport
  • Air NEXUS card
  • U.S. Coast Guard Merchant Mariner Document
  • an Alien Registration Card, Form I-551, if applicable

As early as January 1, 2008, ALL persons, including U.S. citizens, traveling between the U.S. and Canada, Mexico, Central and South America, the Caribbean and Bermuda by land or sea (including ferries), may be required to present a valid passport or other document as determined by the Department of Homeland Security.

While recent legislative changes permit a later deadline, the Departments of State and Homeland Security are working to meet all requirements as soon as possible.

Ample advance notice will be provided to enable the public to obtain passports or passport cards for land/sea entries.

The passport requirement does NOT apply to U.S. citizens traveling to or returning directly from a U.S. territory. U.S. citizens returning directly from a U.S. territory are not considered to have left the United States and do not need to present a passport. U.S. territories include the following:

  • Guam
  • Puerto Rico
  • the U.S. Virgin Islands
  • American Samoa
  • Swains Island,
  • and the Commonwealth of the Northern Mariana Islands.

The cost of a new passport for an adult is $97, and for children $82.

Atlanta Hartsfield-Jackson

reduced flight delays when it opened its fifth runway in May 2006. That’s significant, considering it’s the world’s largest airport with more than 85 million people flying in and out every year.

The new $1.1 billion, 9,000-foot runway has increased by about 30% the number of arrivals the airport can handle at any time, reducing passenger wait time as they taxi or circle in the air.

Atlanta Hartsfield-Jackson joins Chicago O’Hare, Denver and Dallas-Fort Worth as the only airports in the U.S. where three jetliners are able to land safely at the same moment.

In all, the average per-flight delay will be nearly halved to about eight minutes, the airport says. The runway will also cut through the nation’s air traffic congestion.

The IRS

The Internal Revenue Service issued a 2007 allowable vehicle reimbursement rate of 48.5 cents per mile, despite a moderation in gas prices compared with the volatile post-Hurricane Katrina prices last autumn.

The 2007 rate is an increase from the 2006 rate of 44.5 cents per mile. It also is back on the same level as the rate enacted in September 2005, a rare midyear adjustment to accommodate for the surging fuel costs following Katrina.

The higher rate this year stems from overall higher prices for vehicles and fuel for the year ending in October, according to the IRS. Not counting the drop in 2006, following the post-Katrina adjustment, IRS mileage rates have climbed continually during the past few years. The rate was 40.5 cents per mile in 2005 and was 37.5 cents in 2004.

Although it is not mandatory for companies to follow the IRS safe-harbor rate, most use it as guidance for reimbursement of employees using personal vehicles for business travel.

More than 80 percent of 171 respondents in Business Travel News’ third annual Expense Managers Survey said they used the 2006 rate of 44.5 cents for reimbursement.