Major U.S. Airlines Report Second Quarter Profit
The largest U.S. airlines reported a 6% profit margin in the second quarter, according to the latest figures from the Department of Transportation, up from 5.3% a year earlier. These nine airlines carried 80% of U.S. airlines& passengers.
Helping them hit those numbers: baggage fees. The nine airlines—Southwest Airlines, Delta Air Lines, United Airlines, American Airlines, US Airways, ExpressJet, JetBlue, Skywest and Alaska Airlines--collected a total of $931 million in baggage fees and another $661 million in change fees. Fees from other services that airlines charge you for—seat assignments, premium seating, entertainment and other services--are not included in these figures. (Source: DOT press release).
Consumers Want to Comparison Shop Airline Fees
Consumers want to be able to comparison shop the fees airlines charge for luggage, seat assignments and other services or amenities, many of which were once included in the price of an airline ticket.
94% of travelers who recently booked travel online said that "all airline fee information should be available to travel agents and online travel websites," according to the market research firm Harris Interactive.
The DOT requires airlines to display those fees on their own website, but the only way to comparison shop is to go from one website to another, although some online travel agencies and airfare comparison sites carry listings of the fees each airline charges for these services.
Harris said that 31% of travelers who booked travel on an online site agreed with the statement that they "paid for fees that were not fully disclosed when I initially purchased my ticket for my flight this summer."
The DOT is looking at a rule making to address this matter. However, three major airlines, Delta Airlines, United Airlines and US Airways, are close to making their premium seats available in GDSs, an indicator that comparison-shopping for these fees is on the horizon. (Source: Interactive Travel Services Association, industry interviews).
Airlines Keep Adapting to Changing Environment
Airlines are getting faster at adapting to geo-political and economic trends that continually buffet them—specifically high oil prices and a lingering recession.
A recent DOT Inspector General report said that airlines are adapting by charging fees for services once included in the price of a ticket or designing new products and charging for them.
They&re also cutting back on flights to keep flights fuller. And they&re undergoing rapid consolidation—five airlines now serve the bulk of the U.S. market, down from ten five years ago.
Some of this means good news for consumers, according to the IG report: fewer delays and cancellations. But there&s also bad news: less service at some hub airports and on routes of 500 miles or less. However, the report praised airlines& ability to adapt, since aviation plays an essential role in the economy. (Source: IG report).
31% of Domestic Flights Offer Wifi
31% of domestic flights in the U.S. offer wifi, according to the website Routehappy, a flight search site with a strong focus on the kind of experience airlines offer.
Delta Airlines leads the pack, offering wifi to nearly half of that customer base, or 16% of all domestic flights in the U.S.
The next closest is Southwest, whose wifi equipped flights account for 5% of domestic flights. American Airlines and AirTran Airways& wifi equipped flights account for 3% each and Alaska Airlines& service accounts for 2%.
Virgin America, US Airways, Frontier Airlines and United Airlines& flights with Wifi represent 1% of domestic flights each. AirTran and Virgin America have wifi on 100% of their flights, Delta on 65%, Alaska on 45% and Southwest on 37%. JetBlue Airways will add wifi early next year. (Source: Routehappy)