Airlines do one thing ahead of schedule: profits

It seems as though flight times aren’t the only things being padded. The original estimate by the International Air Transport Association that the global airline industry wouldn’t be profitable for three years following the financial crisis gave a little bit of elbow room – something you won’t find on the planes themselves – as indicated by the recent announcement of a predicted aggregate profit of at least $2.5 billion. Back in April, IATA forecasted a $2.8 billion loss for the year.

Demand for seats is on the rise, as people just don’t want to stay home any more. Notes, Giovanni Bisignani, director general of IATA, according to a report in USA Today, “The global economy is recovering from the depths of the financial crisis much more quickly than could have been anticipated.”

In 2009, the global airline industry suffered an $81 billion loss of revenue – a drop of 14.3 percent from 2008. While that did make seats a bit cheaper, it also led to the slashing of routes and what few amenities were left … not to mention all those additional fees. This year, IATA expects revenues to be up $62 billion relative to 2009, but that still leaves a lot of ground for the airlines to make up. While $2.5 billion sounds like a lot of cash, it only amounts to 0.5 percent of total industry revenue, according to Bisignani.

The industry remains “fragile,” he adds, with a slow economic recovery, vulnerability to Icelandic ashes and other disruptions, Europe’s debt crisis and oil prices threatening what gains have been made.

British Airways’ re-launched First is worth every mile

Recently, I spent $75 to get a seat in British Airways‘ new and improved first class cabin from New York to London, and although my original flight was ash-canned, I did eventually get there. And to paraphrase the Beatles, man, I did not have a dreadful flight.

To quickly explain: I signed up for a British Airways-branded Chase Visa Card ($75 annual fee) and was awarded 100,000 bonus frequent flyer miles, enough to cover the 75,000 (one-way) required for a ride way in BA’s newly-refreshed premier cabin. Heck, I don’t fly much these days, and my 56-year-old posterior isn’t as padded as it used to be, nor are my joints quite as supple, so $75 for a little comfort is just what the chiropractor ordered.

Had I actually bought that seat? Well, honestly, on my salary and at my pay grade, that would have been unlikely. It would have cost several thousand dollars-more if I paid full freight, less if I had bought a heavily discounted fare.

As it turned out, that Iceland volcano had other plans for me, and my flight was canceled. My hopes of attending a reunion at my Oxford college, where I was a graduate student 30 years earlier, were vaporized.

But last week, I was invited as a guest of BA, in my capacity as an airfare/airline pundit, to give First Class another shot.

Most air travel these days, whether to the former USSR or to Bangor, can be pretty dreadful. But not in seat 3K on a BA 777.

No one is quite sure who (Flaubert? Einstein?) first said that “God is in the details” (it’s also been said that the devil is in them too), but first class on most international airlines is already pretty fine, so the only way an airline can improve its premier product is by concentrating on the fine points.

And this, clearly, BA has done. The padding on the seats is plumper. The seats are 60 percent wider at the shoulders. The video screens are bigger. The cabin lighting is softer and prettier. The reading lights are brighter. The window shades are electronic. Each seat now comes with its own closet. The pillows are bigger. The bedsheets of a finer Egyptian cotton. The armrests disappear as the bed reclines to its fully-flat, fully-horizontal position, giving you even more room. The dedicated check-in areas are more exclusive-note the comfy easy chairs. The arrival and departure lounges are more luxurious. I particularly liked the terrace overlooking the bustle at Heathrow’s Terminal 5.

BA was in strike mode when I flew, so catering was a bit handicapped; thus I can’t say if they have improved the in-flight cuisine. I suspect they have, however (actually the substituted chicken tikka was quite good). I’ll have to wait for my next first class adventure to try the amuse bouche, and to find out if the 2004 Tattinger Champagne, normally served in First, is better chilled, or the caviar fresher.

After all, I still have those 100,000 miles burning a hole in my Executive Club account, and maybe I’ll be around for my 40th college reunion. By then that volcano will be extinct. I hope.

For last second fares, watch for United’s Twares

As the social media monstrosity known as Twitter continues to grow by the nanosecond (did you know that the Whole Foods in Evanston, IL is now on Twitter?), more and more companies in the travel industry are now taking advantage of their followers to lure in new sales.

Sure it’s just another marketing technique, but where travel consumers and producers can really benefit is in the wholesaling of last minute capacity.

In United Airline’s case, the product is called a Tware. We first covered these Twitter Fares around this time last year, and since its inception the concept has really taken off.

In a nutshell, here’s how Tware’s work: Airline capacity managers identify a group of routes that are significantly undersold over a period of time, say, all flights from the US to Australia over the course of June. Knowing that there’s a low probability of all of those seats being sold at the current market prices, the capacity managers block off a bucket full of seats on select flights, heavily discount the fares and call the folks at the Twitter desk.

At the count of three, cheap seats open up and an advertisement goes on Twitter announcing that “A Tware to Australia!” has started. 70,000 highly focused, highly motivated followers suddenly tune in, everyone starts booking and the seats sell like hotcakes.

In the end, United makes some cash, when they formerly would have been flying empty seats and a few passengers get a great deal on tickets. Oh, and United gets a ton of free PR.

The only catch? Since the airline is clearing out empty seats most Twares are for travel within the next month or two. But if you’re flexible, adventurous and have a few extra dollars the formula is perfect for a quick jaunt to paradise.

You can follow @unitedairlines to tune into upcoming Twares. Be forewarned that most Twares only last a few hours, so have your credit card and calendar ready!

[Image credit, Pylon757]

Dubai based Emirates places $11.5 billion Airbus A380 order

Dubai based Emirates just placed a whopping $11.5 billion order for 32 Airbus A380’s. This is in addition to the ten they currently own and the 48 they still have on order – which instantly makes them the largest customer of the super jumbo. Once all their orders are delivered, Emirates will operate a fleet of 90 A380’s – worth about $30 billion.

This news comes hot off the heels of the news that Airbus delivered their 30th A380 – and are well on their way to turning the plane into a huge success.

The order was placed at the Berlin Air Show where Emirates CEO Sheikh Ahmed Bin Saeed Al-Maktoum signed the paperwork – $11.5 billion in paperwork.

The massive order is not only good for Emirates and Airbus – it is also a sign that the trouble aviation world may be well on its way to a full recovery.

Delta tops list of “most complained about” U.S. airlines

Travel + Leisure just released a survey that compiled airline complaint information from the Department of Transportation. In it, the number of complaints per 100,000 passengers were collected. The results are not much of a surprise – the legacy airlines take up the top spots, followed by low cost airlines and regional feeders.

Here are the top 5 airlines from the list:

  1. Delta Airlines – 1.96 per 100,000 passengers
  2. United Airlines – 1.34 per 100,000 passengers
  3. US Airways – 1.31 per 100,000 passengers
  4. Northwest Airlines – 1.21 per 100,000 passengers
  5. American Airlines – 1.07 per 100,000 passengers

The list is based on data from the previous year, so Delta and Northwest are still listed separately. As usual, the low cost carriers score very well – JetBlue made tenth place and Southwest Airlines doesn’t show up till the 19th spot – with a mere .21 complaints per 100,000 passengers. Click here for the complete list, along with responses from the airlines and some background information on how they may have reached their spot.

(Photo credit: AP)