Congress to investigate airline fees … but not for your benefit

by Tom Johansmeyer on

Congress is digging into all those new airline fees. Extra bags, special check-in situations … you name it. Before you start cheering on our lawmakers, though, you should know that they aren’t doing this from a sense of consumer advocacy. Frankly, Congress doesn’t give a damn how much you pay for air travel. But, it does care how you pay. Why? A cash-strapped government is wondering if it’s leaving money on the table.

When you look at your receipt, the line with “taxes” has never been lost on you, right? Well, the add-ons aren’t included in this number: Congress has a tax on airfare, not all the other stuff. So, for the airlines, this has been a tax-free revenue stream, one that’s been crucial to helping the already bruised airlines survive the current recession.

Yet, is it really just airfare in another form? That’s what Congress wants to know. Even if this is a different form of revenue, do you think it will be left untouched? Of course not! The government needs money, and there’s nothing stopping it from passing a new bill to tax the extra services. How much resistance would be raised?

Think about it.

The average person, even if traveling frequently for personal reasons, wouldn’t be hit too hard by the tax on the fees. If a $10 bag surcharge were taxed at 30% (just to pick a random and unreasonably ugly number) and a passenger flew weekly, he’d rack up $152 in taxes on the additional fees … and that’s assuming he needs to check the extra bag and did so every week. If faced with this or a higher income tax, how would you ask your congressman to vote?

Add it all up, and there’s some tax money to be had. The airline industry has pulled in more than $3 billion this year from the extra fees we all love to hate. If they were taxed at the same rate as fares — a much more reasonable 7.5% — $225 million in tax revenue would be generated. That’s not a trivial number.

The fees aren’t going to go away, and if all goes as it seems, a new tax will be here to stay, as well.

White House pushing for answers to airline industry woes

by Tom Johansmeyer on

The Obama Administration is taking a closer look at the airline industry with the hopes that something can be fixed. Transportation Secretary Roy LaHood is pulling together a panel that will investigate the problems the industry faces and hopefully come up with a solution. But, I don’t think anyone’s breath is being held.

The airlines are always swamped with criticism, with consumers unhappy about customer service levels, on-time arrivals and departures, the shrinking list of amenities and increasingly cramped conditions. Now, shareholders are speaking louder about declining revenues and profits. Employees are losing their jobs, and regulators and industry observers worry about continued safety violations, including drunk and distracted pilots.

Ultimately, LaHood’s goal is for the panel to put together “a road map for the future of the aviation industry.” The panel is being convened thanks in part to a push from the airline unions, the stakeholders worried most by the layoffs that have now become routine. According to The Associated Press, they believe the industry is “dysfunctional.”

Of course, it didn’t take the airlines to offer their thoughts ask for money — lots of it. They claim that radar technology that dates back to World War II isn’t as effective as a GPS-based alternative. The industry would love to see this upgrade … as long as the government writes the check. The FAA is already prepared to spend $15 billion to $22 billion on this effort, but there is an additional $14 billion to $20 billion currently sent over to the airlines. The upside would be reductions in airport congestion, fuel consumption and carbon emissions.

The Air Transportation Association (shockingly) thinks the taxpayers should pay the bill because the system would benefit the whole country. US Airways CEO Doug Parker wrote a letter to LaHood saying that the airlines simply don’t have the cash to meet their end of this.

Unfortunately, the airline industry has once again asked for money and not offered any solutions of its own. No suggestion was offered as to any of the other difficulties pertaining to the industry, and I tend to become suspicious when there is only one problem identified. It implies that everything could be fixed, in this case, with the replacement of radar air traffic control systems with GPS technology. We’re dealing with an industry that has lost credibility rapidly, so even if this one grand move would address ever gripe, large and small, a willing audience is unlikely to take shape.

[Photo by extremeezine via Flickr]

British Airways and Iberia agree on a “merger of equals”

by Scott Carmichael on

If you ever needed any more evidence that the aviation industry is changing, look no further than the big announcement from British Airways and Spanish flagship carrier Iberia this afternoon.

The two have announced that they reached an agreement on a “memorandum of understanding” to proceed with a full merger of equals. The combination will create one of the largest airlines in Europe, carrying 62 million passengers yearly. The joint revenues will be around 15 billion Euros and they’ll fly a fleet of 419 aircraft.

According to the press release, the new airline will be called TopCo, and will be based in Spain, with its headquarters in the UK. BA will own 55% of the combination and Iberia will hold the rest. The merger is expected to be completed in late 2010. Willie Walsh, the current CEO of British Airways will lead the new company.

Both airlines will keep their own names, and branding, very much like KLM and Air France did when they merged.

The full press release can be found here.

Galley Gossip: Enforcing rules in flight!

by Heather Poole on
Hi Heather,

I listened to your Frommers podcast recently and found it very funny. I especially liked your comments about people’s attitudes to flying and the bit about control freaks. It made me realize what I’ve suspected for some time which is that I am a control freak, especially when flying!

My last trip a couple of weeks ago I ended up shouting halfway up the plane at another passenger who got up to stroll to the toilets when the seat belt signs were on. They were the latest in a line of many and had also stopped to have a little chat with their mates on the way back. Being British I get a bit huffy about people not following instructions, I think it’s a national quirk, and, normally being British I might just have carried on muttering to the lady next to me along the lines of “Well really, can people not read, what’s the point of putting the signs on, what are the crew doing about it, nothing etc etc”. But it was a miserable flight in economy on Continental across the Atlantic and the fact that I’d unexpectedly just had to pay 5$ for a bottle of white wine vinegar was doing nothing to improve my temper.

I’d like to report that the effect of my outburst was instantaneous, that the guilty party sat down and no one else got up. Sadly she just shouted back “I’ll go to the toilet when I want to, thank you VERY much.” Everyone between her and me on the flight went quiet and I just felt like a right idiot. I bought another bottle of white wine vinegar and fumed quietly for a bit, half wishing we’d hit a bit of turbulence next time someone got up when the signs were on, “to teach them a lesson.” How sad is that! Next time I’ll do as you suggest and try and relax more!

Regards,

Marie B.


Dear Marie,

Your letter cracked me up and now you’ve got me thinking that I may have been British in a past life or something because I, too, am a bit of a rule follower. Nothing drives me crazier than a passenger who thinks they’re exempt from following the rules. Really, how many times do I have to ask someone to turn off the electronic device before takeoff? Hello, Mr. Exit Row, I know what you’re doing all bent over like that with your head crammed between your knees. Do ya really think that I think you’re whispering to the floor? Please, do me a favor and don’t make tap, tap, tap you in front of your seatmates who are now giving you the evil eye. I mean really!

On a flight years ago I spotted a woman speaking on her cell phone AFTER the safety video had ended while we taxied to the runway. Without thinking twice I told her to turn it off. My husband, now completely mortified, slunk down in his seat. Why? I wasn’t wearing my uniform. I was a passenger. The one not following the rules gave me a dirty look and continued talking on the phone. That’s when I embarrassed my husband even more by unzipping my tote, pulling out my crew ID and flashing it at her. Abruptly the call ended. So ya see, Marie, we have a lot in common. Looks like we both need to take my advice and relax.

On a flight from New York to Los Angeles last week, the seat belt sign turned on and a passenger decided that that would be the perfect time to stand in the aisle with a newborn baby in his arms. A flight attendant passed through doing a compliance check and politely told the passenger that the seat belt sign was on and to take a seat. The dad smiled and started doing the bouncy bounce. Five minutes later he sat back down. It took everything inside of me not to say anything to the man. Once again I wasn’t in uniform. Also, I had promised my husband I’d never flash my badge off duty ever again. So I sat there thinking, what’s wrong with people!

Between you and I – okay fine, you and I and all of Gadling, I’m glad there are passengers like you, Marie. Next time you’re one of my flights, I’d like to buy you a bottle of overpriced white wine vinegar – vinegar? Until then take care, try to relax, and know I’ll be thinking about you on my flight next week when that passenger, there’s always one, decides to break the rules.

Heather

Gotta question? Email me at Skydoll123@yahoo.com

Photos courtesy of Caribb and Shreyans Bhansali

Airlines not taking any swine flu risks – bumping sick passengers

by Scott Carmichael on

It was only a matter of time, but H1N1 fear has finally spread to the airlines.

Yesterday, United Airlines passenger Mitra Mostoufi was kicked off her plane when the flight crew suspected she may have swine flu.

The 50 year old from Hawaii was questioned in front of her fellow passengers, and pulled from the plane.

United Airlines said that they do allow their staff to determine whether someone is too ill to fly, and this is obviously done to protect the other passengers and crew on the plane. Especially on a plane, the air circulation system can spread germs to everyone on board in a matter of minutes.

According to Mostoufi, she had thrown up in the airplane bathroom due to a reaction to a restless leg syndrome medication. When she asked for an air sickness bag, a United Airlines staffer ordered her to gather her belongings and leave the plane.

Even though the airline bumped her, they refused to rebook her on a different flight that day, so she had to spend the night with relatives.

I’m torn on this issue – obviously, airline staff are not trained physicians, so they have no way of making a 100% accurate judgment on our health. However, if they notice someone with flu-like symptoms, I’d be quite happy if they asked that passenger some more questions. Throwing someone off a flight just because they are puking does not seem very fair though.

What do you think? Should airlines abandon passengers with (swine) flu like symptoms?

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