American Airlines to deliver free liquor to top customers

American Airlines is stepping up to take care of some of its most loyal and committed customers. The carrier is going to start offering up free booze in its U.S. Admirals Club lounges beginning October 1, 2010. Look for the basics – “well-brand liquors, as well as beers and house wines” – the company said in an announcement. Premium alcohol and food will be available, but not free.

The company continues, in its statement, “Our customers have asked for free drinks and we are delighted to respond to their request by providing this service for our existing and new members at our clubs worldwide.”

[Image credit: AP Photo/Wilfredo Lee]


This comes on the heels of another perk offered in the Admirals Club. American put the word out on Monday that it was bringing new HP computers into the lounges “to offer members and guests the latest technology for their professional and personal needs.”

This is both nice and smart. In addition to improving the travel experience for its customers, American is focusing on those with likely the highest spending behavior, which means it’s rewarding its best passengers – a tactic that works well in just about every other business.

Sir Richard Branson launches Virgin Hotels

It’s official…the Virgin mega-brand is entering the hotel space. Our first clue? The launch of the Virgin Hotels website.

According to the website, the first hotels will open in North America and eventually go global. Branson promises to “re-define the customer journey from pre-arrival to check-out.” Each of the hotels will be at least four-star quality, said Branson, who is currently looking for partnership opportunities with property owners and developers.

Virgin Hotels is currently seeking 150 to 400 room hotels of “interesting, authentic and high quality” design. Branson states on the website that the hotels will feature communal spaces that offer “unique space where our guests can get work done, nourish and refresh themselves, meet other interesting people, or just take a break from the hustle and bustle of the city.”

Where will the hotels open first? Rumor has it New York, Miami, San Francisco, Los Angeles, Washington, DC, and Boston have been tapped as top destinations.

The website also includes a pledge from Branson that integrates Virgin flyers and loyalty program members into the project. We smell some more loyalty points programs…

Airlines powerless against the pregnant

Fortunately, there aren’t many babies born on planes. Run the numbers on this one: it just doesn’t happen much. One would assume that rules around flying later in pregnancy have helped, but it turns out that these requirements really boil down to an honor system that leaves the carriers virtually powerless.

Of course, most pregnant women pay attention to the rules (or guidelines, in practicality), which is why there aren’t more kids named after flight attendants and pilots. The last four or five weeks of pregnancy are usually off-limits for the expecting. Some procedures are used to screen out passengers who probably shouldn’t be allowed to board, but they rarely stand up to the will of someone who doesn’t want to get caught.

According to the Associated Press:

[E]ven when gate attendants question how pregnant a passenger is, they usually have no choice but to let the woman fly if she says she has not reached the airline’s cutoff date and is showing no sign of physical distress, said Dr. Fanancy Anzalone, president-elect of the Aerospace Medical Association in Alexandria, Va.

“The rules now are based on honesty and (the idea) that a pregnant mom is going to protect her unborn,” Anzalone said.

The airlines can’t do much when they suspect a pregnant passenger shouldn’t board. They can bring in medical personnel to make the call and “determine whether she has the necessary medical documentation and is fit to fly,” Anzalone explained to the Associated Press. Once in the sky, the best that can happen is a bit of extra attention from the cabin crew and maybe a doctor or nurse among the passengers.

When it comes to looking for with-child passengers, there is an obvious risk of embarrassment … what happens when good intentions cause airline employees to question the obese non-pregnant? When it happens next, it’s my sincere hope that you’ll read about it here.

[photo by rumpleteaser via Flickr]

Five reasons passengers looking for more than just a ride

As airlines cut routes and amenities while increasing fees, travel through the skies became a true labor. Sure, the cuts came as the result of market pressures that led to compensation reductions and other changes, but it also brought a problematic perspective. Somewhere along the way, it became acceptable for airline employees to claim that “you get what you pay for.” With low fares, essentially, you can expect substandard service.

Indeed, there is some truth to this. If you buy cheaper furniture, for example, you may be sacrificing quality to save a few bucks in the near term. We make these tradeoffs every day, and there’s no reason why a purchase from an airline should be any different. It’s clear that the standard has been set: you’ll pay less, and you’ll get a much lower level of service.

Take this concept to its ultimate conclusion, of course, is paying for physical movement, and you’re entitled to nothing else, despite the presence of beverage carts and headphones … not to mention employees who should provide a certain amount of customer service. I saw an interesting tweet to this effect not too long ago, claiming that transportation from Point A to Point B safely is what you’re paying those low, low fares for. But, I’m not so sure about that. There is so much more that’s explicit and implied in the air travel experience, and it’s delivered often enough that it should be expected.

So, why should we expect more than simply being taken from Point A to Point B? Well, here are five reasons why airlines are more than long-distance taxi services:

1. The airlines promise more than physical movement: Drinks are served on flights. Food is sold (or offered, depending on class and destination). There are movies and headphones and blankets and pillows, either free or for a fee. Whether you have to pay, in this regard, is irrelevant. The offering of amenities means that there is more involved in the transaction than the delivery of a seat from one place to another. So, something more than safe movement from Point A to Point B is implied.

2. Nobody wants substandard service: Basic customer service, which you can find on airlines only inconsistently, is expected in virtually every business transaction. While it doesn’t seem like much, this is an increase above the “physical movement” included in the price of a ticket.

3. A mere ride would (theoretically) cost less: Given that there are some services that could be sacrificed, a genuine low-cost, no-frills experience would cost less than existing flights. There would be no in-flight entertainment, no beverage service and no magazines tucked behind the seats. Rather than flight attendants, you’d have “safety professionals” (like lifeguards) who would only spring into action in the event of an emergency.

4. Low fares can still mean big money for passengers customers: While airline industry employees may drive home how cheap it is to travel these days, let’s not forget that unemployment is still through the roof, even if the recession did end more than a year ago. There are still plenty of mortgages at risk of delinquency and foreclosure. Simply put, the economic situation in this country is still dicey, and a little money is a lot when you don’t know how long you’ll have your job. Every dollar matters more to the consumer than it used to.

5. We’ve seen the possibilities: For everyone who has had a problem with a nasty flight attendant or a gate agent with a horrible attitude, you can find a story about one who helped someone out of a bind. I’ve had fantastic service on airlines that have reputations for anything but. And, some carriers have differentiated themselves through service (JetBlue and Southwest come to mind). We know it’s possible for airlines to do better; we’d just like to see it more.

[photo by UggBoy via Flickr]

Airlines peak in 2010, could cost you next year

All those extra fees may have helped the airlines out last quarter but don’t expect these “good times” to last forever. According to the International Air Transport Association, airline profits are expected to peak at $8.9 billion this year and will be followed by a decline. Pressure on demand and investments in new planes will be among the reasons for this turn. Next year, IATA forecasts an aggregate profit of $5.3 billion.

According to Bloomberg:

“The economic environment is still extremely risky and uncertain going forward,” Brian Pearce, IATA’s chief economist, said today. “In Europe, we’ve seen the markets are getting very worried about government debt in some countries. And we don’t really know what impact the austerity budgets will have.”

With 1,400 new aircraft to be delivered next year, carrier capacity is expected to grow by 6 percent, staying ahead of a 5 percent increase in “demand and depressing load factors, a measure of seat occupancy, which will in turn will keep yields or prices ‘flat,'” according to IATA.In 2010, seating increased 7 percent, with traffic up 11 percent. Disciplined operations helped lead to the filling of 78 percent of seats through the end of July. With the increase in capacity relative to demand next year, the 2010 successes are unlikely to be revisited.

Even though 2010 was a relatively strong year for the airline sector, the perceived successes come in part from a depressed baseline:

Global sales will climb to $560 billion in 2010, $15 billion more than previously forecast but less than the $564 billion achieved in 2008, IATA said. The forecast profit is also $4 billion lower than the figure for the pre-slump year of 2007.

So, what does all this mean for you?

Airline woes tend to become passenger woes pretty quickly, as anyone who’s paid to check a bag has learned the hard way. They’ll be looking for ways to protect their margins, so you should probably keep an eye on your wallet.

[photo by UggBoy via Flickr]