Airline fuel costs up almost a third since last year

Airline fuelSo, how expensive is fuel for the airline industry? Brace yourself: the situation is pretty ugly. In April 2011, airlines in the United States dropped an average of $2.99 a gallon on fuel. That number sounds a lot better than what you’re seeing at the pump, right? How can it be that bad?

Well, this is yet another month-over-month increase. In March, the airlines spent an average of only $2.80 a gallon on get fuel, according to the latest data from the U.S Department of Transportation‘s Bureau of Transportation Statistics. In 30 days, we’re looking at a 6.8 percent spike. Look back even further, and the numbers don’t get any prettier. In April 2010, the U.S. airline industry spent an average of $2.29 on fuel. In one year, the average cost has surged an incredible 31 percent!

If you thought driving was too expensive because of gas prices, you’ll find the skies decidedly unfriendly.

[photo by octal via Flickr]

Airline fees are worth more than Facebook

Airlines, Facebook and money

Outside the travel world, everyone’s marveling at the prospect of a Facebook IPO, which could be valued at as much as $100 billion. So, what are we missing while we fawn over Mark Zuckerberg’s creation? How about the slow, stodgy, ugly airline industry. Known for a painful user experience and a steady decline of free features, the likes of Delta and American Airlines are outdoing the hottest online property in the world simply by annoying their customers.

According to data from the U.S. Department of Transportation‘s Bureau of Transportation Statistics, baggage and reservation change fees brought the U.S. airline industry a whopping $5.7 billion last year. Delta picked up close to a billion dollars on baggage fees alone, which doesn’t include what they yanked from the wallets of soldiers returning home from combat. The largest airline in the country also brought in approximately $700 million from reservation change fees.

American Airlines, the fourth largest airline in the United States, came in second in both categories, with $580.7 million in baggage fees and $471.4 million in reservation change fees.The particular beauty of these fees is that they are basically found money. Some passengers need to check bags, and the airlines have to invest in the overhead required to meet this demand. It’s an expense that can’t be avoided. With this fee, they monetized what they’d have to pay anyway. The same is the case for reservation change fees.

The top five earners of baggage fees in 2010 are:

1. Delta: $952.3 million

2. American: $580.7 million

3. US Airways: $513.6 million

4. Continental: $341.6 million

5. United: $313.2 million

Unsurprisingly, the top five earners of reservation change fees don’t look much different:

1. Delta: $698.6 million

2. American: $471.4 million

3. United: $321.5 million

4. US Airways: $253.1 million

5. Continental: $237.4 million

No doubt, activist groups will be up in arms shortly. And airline employees will lament the fact that their executives are so richly compensated while they have endured round after round of pay cuts and layoffs for years upon years.

Frankly, I offer my congratulations to the airline industry. Yes, they are soaking us. Passengers are a captive audience, particularly on routes with limited coverage, and we sometimes have no choice but to pay. The airlines are using this to generate profitable growth for their shareholders, which is their primary responsibility.

So, what about Facebook? The company is estimated to pull in revenues of somewhere above $4 billion this year, most of it from advertising. It is pretty interesting that the popular social network is annoying its customers as a way to generate revenue, just like the airlines!

Who knew that pissing off your target market was an awesome business model?

[photo by Tobin Black via Flickr]

Airline tarmac delays: the first full year of results is in!

Airline tarmac delaysWe’re now looking back on a full year of limited tarmac delays. In April 2010, the airline industry seemed like it was begging and pleading with the American public not to accept the insanity that the government was forcing upon them. Mayhem would rule, the industry claimed, as standards for performance would prevent everyone from getting anywhere. It would be ugly … far uglier than the service the airlines had provided so far.

Throughout the year, Gadling has checked in to let you know that the airline industry did not fall apart as a result of shorter tarmac delays. With airlines only able to sit out there for three hours before facing hefty fines, the result has been noticeable – and positive.

“On the one-year anniversary of the tarmac delay rule, it’s clear that we’ve accomplished our goal of virtually eliminating the number of aircraft leaving travelers stranded without access to food, water, or working lavatories for hours on end,” says U.S. Transportation Secretary Ray LaHood in a statement. “This is a giant step forward for the rights of air travelers.”
And indeed, it is. According to the U.S. Department of Transportation, only 20 tarmac delays of more than three hours were reported in the first 12 months the rule was in effect. For the year prior, the total reached an astounding – and severe – 693.

Meanwhile, the number of canceled flights with tarmac delays of at least two hours edged only a tad higher, from 336 in the May 2009-to-April 2010 period to 387 in the 12 months that followed. This indicator is used to gauge flights canceled to avoid the three-hour rule because the DOT believed it’s the most likely set of flights to be cut.

And, this is the metric where airline industry mayhem would be visible. A 15.2 percent increase – in light of a 97.1 percent decline in delays of three hours or longer – pretty much tells the story.

The numbers say it all: airlines can be held to higher standards. And, the threat of heavy fines is incredibly effective. Now, if only we could levy fines for substandard customer service

No long tarmac delays in March 2011

tarmac delaysGood news! For the past six months, there have been no tarmac delays of greater than three hours, says the latest Air Travel Consumer Report. There were none in March 2011, a drastic change from the 25 reported by the U.S. Department of Transportation in March 2010. Year over year, for March, there was also a decline in the rate of canceled flights.

And, despite airline industry concerns, the world hasn’t come to an end.

From May 2010 through March 2011, there were a mere 16 tarmac delays of more than three hours, down precipitously from 689 from May 2009 through March 2010.

It’s pretty clear that all the industry alarmism ahead of the rule that promises stiff fines for keeping passengers stranded on the tarmac was self-serving … and ultimately meaningless.

The best part of this, of course, is that we’re now in a position to enjoy flying more. Who even thought that was possible a year ago?!

Mixed Bag: Six stats about airline performance in 2010

Airline performanceLast year was a good one for the airline industry in the United States. In addition to posting record profits, carriers also showed some improvement in other areas, such as on-time arrivals. The latest data from the U.S. Department of Transportation shows a slight improvement in getting from Point A to Point B on time, edging from 79.5 percent in 2009 to 79.8 percent in 2010.

December was a pretty rough month for the airlines, as you’ll see below, but much of it may have been caused by the storms and nasty weather that hit parts of the country toward the end of the year. Overall, performance improved, even if passenger sentiment didn’t really reflect it.

Let’s take a look at six stats that define the airline industry in 2010:1. Tarmac Delays: DOWN
It looks like the decline in tarmac delays sure helped. Those lasting more than three hours fell from 34 in December 2009 to only three in December 2010. The prospect of stiff fines likely contributed to this substantial decline. In fact, from May 2010, when the new rules (and penalties) took effect through the end of the year, the DOTs Bureau of Transportation Statistics found only 15 tarmac delays lasting longer than three hours (based on the 18 airlines that file on-time performance data). For the same period in 2009, there were 584 tarmac delays lasting longer than three hours.

2. Chronic Delays: DOWN
The number of “chronically delayed” flights – those delayed more than 30 minutes more than 50 percent of the time– fell as well. At the end of December 2010, there was only one chronically delayed flight (for the three months prior), with six more that were chronically delayed for two consecutive months. None reached four or more months in a row.

3. Baggage Problems: DOWN
Meanwhile, the airlines are getting better with our bags. The number of mishandled bags reported fell from 5.27 per 1,000 passengers in December 2009 to 4.8 reports per 1,000 passengers in December 2010. But, the last month of last year still posted an increase from a rate of 2.93 in November 2010. For the entirety of 2010, there were 3.57 mishandled baggage reports per 1,000 passengers, down from 3.99 in 2009.

4. Bumped Passengers: DOWN
Last year, only 1.09 passengers per 10,000 were involuntarily denied boarding (also known as “bumping), a drop from 1.23 per 10,000 in 2009. For the last three months of 2010, the “bump rate” fell to a measly 0.79 per 10,000 passengers, down from 1.13 in the last quarter of 2009. If you were supposed to get on a flight and didn’t screw up, it seems, there was a pretty good chance you got on it.

5. Pet Incidents: UP
In December 2010, there were seven reported incidents involving pets that were lost, injured or dead, up from three in December 2009. Six were filed in November 2010. There were 57 incidents in all of 2010, up from 32 in 2009.

6. Service Complaints: UP
In December, there were 753 complaints about airline service, though much of this likely involved the awful weather at the end of the month. This is up from 692 in December 2009. For all of 2010, though, the DOT picked up 10,985 complaints, a 24.5 percent increase from 8,821 in 2009.

[photo by kla4067 via Flickr]