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).

Demand continues to fall faster than airlines can cut capacity; capacity cuts were two percent. The decline was biggest in Asia, 8.4 percent; North America was second with 6.2 percent.

The Middle East was the only region to see traffic grow, 3.1 percent. There was one bit of good news: the fact that fuel prices remain well below last year’s levels. But IATA projects that airline revenues will drop $35 billion to $500 billion this year. (Source: IATA press release).

Southwest Offers Free Wi-Fi on Four Planes
Southwest Airlines expects to have four aircraft with in-flight Wi-Fi this month –you’ll be able to tell if you’re aboard one from the placards you see upon boarding and onboard instruction sheets.

Southwest is offering the service for free during the test period. Passengers will be able to log on using Wi-Fi enabled devices such as laptops, iPhones and smart phones. Southwest is also offering an in-flight homepage with the service. It includes an in-flight homepage with a flight tracker and local news and information.

Passengers can follow the plane’s flight path and view points of interest they’re flying over. Cellular technology will not work. (Source: Southwest press release).

More Airlines Go Cash-Free
United Airlines and American Airlines are phasing out cash in flight and will only accept major credit cards and debit cards after a transition period. United is introducing EasyPurchase March 23.

After a brief transition, it will only accept credit and debit cards on flights within the United States, including Hawaii, and on flights to and from Canada, Mexico, Central America and the Caribbean. It will continue to accept cash on flights to and from Europe, Asia, the Middle East and South America. On United Express, it will continue to accept cash.

American will begin its transition to credit and debit cards only this summer on flights within the United States and to and from Canada. (Source: United, American press releases).

Delta Enables Mileage Transfers Between Sky Miles, Worldperks
Delta Air Lines said that Delta SkyMiles and Northwest WorldPerks members now can link frequent flyer accounts and transfer miles between both accounts at no charge. Members who link their accounts before March 15, 2009 will earn 500 bonus miles.

This means members who have SkyMiles and WorldPerks accounts can visit delta.com to link their accounts and transfer any amount of miles into either account on an unlimited basis. Both accounts will remain open and functioning until late 2009 when Delta plans to merge the two programs. (Source: Delta press release).

More Accidents But Fewer Fatalities in 2008
On the bright side, aviation safety performance improved, with the total number of aviation fatalities dropping from 692 in 2007 to 502 in 2008, a 56 percent improvement in the fatality rate, according to IATA.

There were more accidents in 2008—109 compared to 100—and the number of fatal accidents increased from 20 in 2007 to 23 in 2008. There were regional differences. North Asia had zero losses.

North America, Europe and the Asia Pacific performed better than the global average; Africa’s accident rate was 2.6 times worse than the world average, but that was a vast improvement over 2005, when it was the worst in the world. Separately, the U.S. Department of Transportation said that the U.S. has seen a 65 percent reduction in the aviation fatal accident rate between 1997 and 2006.

Before the fatal crash in Buffalo last month, the DOT said that there had been no fatal commercial accidents for more than two years. (Source: IATA, DOT press releases).

North American traffic declined 0.8 percent; Asia Pacific traffic was down 6.1 percent, European traffic was up 1.8 percent. IATA’s head, Giovanni Bisagnani, said that recession is now the biggest threat to airline profitability. (Source: IATA press release).

Fewer Planes in the Air Boost Performance
The airline industry’s capacity cuts, resulting in fewer flights operating daily, have contributed to the improvements in on-time performance shown above.

Notably, in September, when the share of flights arriving on time rose to 84.9%, carriers implemented the bulk of the large capacity cuts announced at the height of the summer’s oil-price surge. (Source: Wall Street Journal)

Trend: Premium Economy Offers More Comfort but Still Coach
As tightening travel budgets restrict first and business class bookings, interest in the premium economy class is resurfacing. A dozen international airlines flying to the U.S. now offer extra legroom, wider seats and seats that recline lower in premium economy cabins at a cost that’s slightly more than coach but notably less than business class. Some carriers even include better meals, early boarding, access to faster airport security lines, and other amenities. (Source: The Wall Street Journal)

United Makes It A Little Easier to Pay Baggage Fees and Buy Extra Leg Room
More airlines are making it a little easier for consumers to pay baggage and other fees.

United Airlines canceled its previously announced plans to increase the domestic second bag fee from $25 to $50 one way, and now lets you pay your baggage fee in advance on its website instead of at check-in. You can now upgrade online instead of at check-in to Economy Plus, which starts at an additional $14 one way for up to five additional inches of legroom. Next spring, your travel agent will be able to book your baggage and upgrade you to Economy Plus.

Northwest Airlines is another carrier that now lets you pay your baggage fee in advance when you check in online; Spirit Airlines discounts your baggage fees when you pay online. Look for more airlines to make it easier to pay a variety of fees in advance, either through your travel agent or on their website. (Source: United, Northwest and Spirit press releases).

Lufthansa Italia
Lufthansa has launched its new Lufthansa Italia, which it is billing as a blend of Lufthansa’s reliability and quality with Italian flair.

It will begin flying a fleet of six aircraft in February between northern Italy and major European destinations.

It ultimately plans to operate its own Italian airline. It will first operate to Paris and Barcelona, and then will add Brussels, Budapest, Bucharest, Madrid, London and Lisbon. (Source: Lufthansa press release).

Delta Realigns Fees
Delta Air Lines, which recently acquired Northwest Airlines, is aligning the fee structures of the two carriers. It has dropped award ticket fuel charges instituted to cope with soaring fuel costs and reduced the cost of telephone reservations from $25 to $20.

It has eliminated curbside check in administrative fees and aligned the two carriers’ baggage fees. In addition, Delta now offers passengers Coach Choice seats for an additional fee when they check in online 24 hours before departure. These are certain aisle, window or exit row seats. (Source: Delta press release).

Airlines continue to seek scale by working ever more closely together. The latest example of this is the business agreement between American Airlines, British Airways and Iberia. The airlines say the deal will give their customers more destinations to choose from while helping the airlines to save money and attract new customers, which in turn would ease the upward pressure on airfares due to rising fuel costs.

Fuel prices are dropping but continue to take their toll, as evidenced by the shutdown of the discount transatlantic carrier Zoom Airlines (Source: American, BA, Iberia press releases and Zoom website).

American, Delta Offer WiFi
In-flight Delta Air Lines made its´ announcement first but American Airlines was first out of the gate with in-flight WiFi. American now has inflight WiFi on its Boeing 767-200s flying between New York and San Francisco and Los Angeles.

The service costs $12.95 on flights of more than three hours; travelers simply turn on their WiFi enabled devices, including laptops, smart phones and PDAs, once they hit 10,00 feet and are connected to Aircell’s Gogo portal, the WiFi provider, where they sign up for the service. Delta, meanwhile, will offer WiFi on its domestic fleet of 330 mainline aircraft, also with Gogo, introducing it on its MD 88/99 aircraft this fall and rolling it out fleet wide in the first half of 2009. The service will cost $9.95 on flights or three hours or less and $12.95 on flights of three hours or more. (Source: American, Delta press releases).

TSA Lets You Leave Your Laptop in Some Bags
The Transportation Security Administration will now let you leave your laptop in its bag when you go through security as long as it meets new checkpoint friendly standards.

These bags should have a designated laptop-only section; they must completely unfold to lie flat on the X-ray belt; no metal snaps, zippers or buckles inside, underneath or on top of the laptop-only section; no pockets on the inside or outside of the laptop-only section and packed in the laptop-only section other than the computer itself.

The TSA worked with laptop bag manufacturers to come up with the new standards. (Source: TSA press release).

Airline Eliminates Life Jackets
Air Canada Jazz is eliminating life-jackets, calling them redundant since seats act as flotation devices. Transport Canada permits flotation devices, like the seats, instead of life jackets if the planes fly within 90 kilometers of shore.

The seat cushions lift off and have restraints on the bottom through which passengers can slip their arms through. There will be life jackets available for infants. The idea is to save on weight
and fuel. (Source: Travel Pulse Daily).

United Furloughs Flight Attendants, Tests Charging for Meals Over Atlantic
United Airlines is furloughing 1,500 flight attendants as a result of flight reductions it announced this summer. That is about 10 percent of its cabin workers and part of its efforts to cut 7,000 jobs by the end of 2009. It also began testing charging for in-flight meals over the Atlantic.

On transatlantic flights out of Dulles, it is testing selling Buy on Board options, including sandwiches, salads and snack boxes. It will evaluate results at year’s end. (Source: press reports, United press release).

Americans Divided on Inflight Cell Phone Use
In-flight wireless services could presage in-flight cell phone use. Americans are divided on whether or not passengers should be able to use their cell phones in-flight, according to a study by the Department of Transportation.

The younger you are, the more likely you are to favor it-almost half (47.7 percent) of 18- to 34-year-olds approved of the idea. Only a quarter of those over 65 favored the move; those between 35 and 64 almost evenly divided-40 percent say they should allowed, 46 percent said they should not and the rest aren’t sure. Source: DOT press release).

United Airlines initiated what was the 16th fare hike to stick since the beginning of the year, with fare increases that ranged from $10 to $60, depending on the route. Other legacy carriers—Continental Airlines, US Airways and Northwest matched.

American Airlines upped some fares and other carriers tacked on increases as well.

Rick Seaney, CEO of FareCompare.com, an airline comparison website, said that airlines have no choice but to pass on the cost of fuel to consumers and when passengers do begin to push back in significant numbers the airlines have no choice but slash capacity by that same amount. (Source: FareCompare.com.)

American Cuts Flights, Staff, Charges for First Checked Bag, Ups Other
Fees
American Airlines said it would charge its passengers $15 for their first checked bag as well as cut domestic flights by 11 to 12 percent as part of its efforts to cope with fuel costs.

At press time, no other carrier had followed American’s lead in charging for the first checked bag; Southwest Airlines, in fact, pointedly stated that it continues to let its customers check two bags—for free.

American, meanwhile, upped other fees, including those for oversized bags (from $100 to $15); ticket change fees from $100 to $150 for domestic tickets and from $100 to $200 to $150 to $250 for international tickets. It also upped its reservation service fee and AAdvantage Award ticket fees up by $5 each to $20. US Airways took another tactic—it said it would eliminate free snacks, although it will continue to serve free soft drinks.

And Midwest Airlines said it would begin charging $20 to check a second bag.
(Source: American, Southwest, Midwest Airlines press releases).

Major Carriers Continue to Experiment With All-Business Class Flights
The number of air travelers flying first or business class is dropping at increasingly faster rates, according to the International Air Transport Association, an industry group.
And three transatlantic carriers that offered premium seating—MAXJet, Eos and Silverjet—have ceased flying. But major carriers continue to experiment with the oncept. Singapore Airlines has introduced all-business class flights between New York and Singapore.

In October, Lufthansa will introduce all-business class service between Boston and Munich. That’s in addition to the all-business class service it operates between Chicago and Düsseldorf, Newark and Düsseldorf and Frankfurt and Düsseldorf.

Meanwhile, on June 19, OpenSkies, a British Airways-backed carrier that has three classes of service but has allocated nearly two-thirds of the plane to premium seats, will begin to fly between New York and Paris. And L’Avion, the all-business class French carrier, is now code sharing with OpenSkies to offer three flights daily between Paris and JFK (Sources: IATA, Singapore Airlines, Lufthansa, OpenSkies and L’Avion press releases.)

Network Carriers Add International Flights, Low Cost Carriers Add
Domestic
Some U.S. carriers are adding flights, many focusing on international routes. Northwest Airlines has begun flying between Memphis and Columbia, Mo., and began serving Taipei via Tokyo. Delta Air Lines began flying from New York to Georgetown, Guyana and will start flight from Atlanta to Kuwait in November.

On the domestic front, JetBlue has begun daily service from Boston’s Logan International Airport to Chicago O’Hare and New Orleans. Southwest Airlines is adding flights from Denver to San Francisco and from Denver to Omaha in September.
(Source: Northwest, Delta, JetBlue and Southwest press releases).

New Virgin Atlantic Boston Clubhouse
At last, it’s here – the new Boston Clubhouse has opened its doors and is now accepting Upper Class flyers and Flying Club Gold members for some preflight rest, relaxation and pampering. Boston Clubhouse features a deli counter and bar, dedicated business area with PCs, free WiFi connection, charging facility for mobiles and blackberries, dining, lounge seating, free newspapers and magazines.

In airlines ongoing quest for additional revenues in the face of $120-a-barrel oil, several network carriers have upped their change fees and re-instituted Saturday night stay and/or minimum stay requirements.

United Airlines increased its change fees by 50 percent to $150 and added a Saturday night stay requirement on routes in about 65 percent of its markets.

Continental upped its change fee to $150 for domestic and $250 for international flights. US Airways upped the cost of its change fees by $50, to $150 for domestic and $250 for international flights.In some instances, top customers, such as elite members of airline loyalty programs, are exempt from these fees.

In addition, United, Delta Air Lines, American Airlines, Northwest Airlines and Continental have instituted minimum stay requirements on all or many of their routes.

Meanwhile, most network carriers and some low cost carriers, including JetBlue and AirTran have added fees for checking a second bag; fees range from$10 to $25. (Source: airline press releases).

Compensation Doubles for Involuntary Bumping
If you’re involuntarily bumped from your flight, you’ll get twice as much as you used to get. Effective this month, if you’re bumped you can receive up to $400 if you’re rescheduled to arrive within two hours of your original arrival time on domestic flights, four hours on international flights, and up to $800 if you’re not rerouted within that time frame.

The rule now covers aircraft seating 30 people or more; it previously covered flights with 60 seats and up. Reimbursement is determined by the price of the ticket, its refundability and the length of the delay. (Source: DOT press release).

DOT, FAA Announce Plans Designed to Ease Congestion
Even though airlines are reducing their domestic capacity, many by as much as five percent, aviation congestion remains a problem.

The Department of Transportation and the Federal Aviation Administration have announced a new routing alternative that will provide an “escape route” into Canadian airspace so that aircraft can fly around summer thunderstorms and high winds. And, the FAA is opening a second westbound route for aircraft, which will provide a parallel route along a heavily traveled corridor, which should cut westbound delays out of New York.

The DOT has also proposed auctioning off a limited amount of slots-the number of flights airlines can operate in a single day-at LaGuardia. The Air Transport Association, an airline trade group, is opposing such market-based solutions, saying that the DOT doesn’t have the authority to institute auctions and congestion pricing and that they are inconsistent with international practices. (Source: DOT, ATA press releases.)

Fare Expert Finds Majority of Airline Attempts to Hike Fares Are ticking
When Delta Air Lines and Northwest Airlines announced their proposed merger, they said that stratospheric oil prices have fundamentally changed the economics of aviation.

Oil prices are fueling mergers and other alliance, bankruptcies (more than a half dozen this spring, with the latest being the premium transatlantic carrier Eos), capacity reductions and ongoing fare hikes.

Rick Seaney, CEO of the airfare monitoring site FareCompare.com, has been tracking airline fare increases and reports that the airlines have attempted 14 price hikes so far this year; nine have been successful.

Summer demand and soaring fuel prices are making airlines comfortable with these increases, meaning travelers need to lock in summer travel now. (Source: FareCompare.com)

Virgin Atlantic Adds Second Dulles-London Flight for Summer
Virgin Atlantic has begun a second daily flight between Washington Dulles International and London Heathrow. The flight will operate until October 26. (Source: Virgin Atlantic press release).