Extra seat charges: big bias or svelte snobbery?

by Tom Johansmeyer on

As airlines are scrambling for any shred of extra revenue they can find, some policies are getting more attention than others. The so-called “fat passenger policies,” which govern the accommodation of passengers who require more than one seat, have attracted the ire of the NAAFA. Never heard of it? It’s a new one on me, too: the National Association to Advance Fat Acceptance. On the other hand, passengers who pay for one seat and use only one seat wonder why the hell larger passengers should consume two of the airlines’ fundamental units for sale (i.e., the use of a seat on a plane) for the price of one.

Here’s the perspective that’s been lacking: revenue per available seat mile (RASM). Check “Making Sense of the Airline Industry” for a deeper look at how this measure works. Then, come back here and think about what it means for the sale of seats on planes. Cash-strapped airlines are forced to give up revenue.

United Airlines seems to have found a way to balance both sides of this argument. If there is an extra seat available on a flight, a passenger who can’t fit into one seat will be given the extra at no charge. On full flights, larger passengers can wait for a later one that has space and can occupy two seats at no extra charge.

Southwest, Alaska Airlines and Continental have policies, as well. Though the specifics vary, the armrest is pretty much the decision maker. If you can’t put it down, you can’t occupy only one seat. Southwest and Alaska Airlines require the purchase of an extra seat but will refund that part of the fare if the flight is not full. Continental, on the other hand, won’t refund the difference. In fact, the airline requires the purchase of an additional seat on each segment flown at a “hefty day-of-travel rate [read the original article, “hefty” was not my word, though I applaud the writer for being gutsy].”

JetBlue has no formal policy and claims that its larger seat size is already a step in the right direction. Delta and Northwest say that they’ll do what they can to accommodate larger passengers, but a purchase may be necessary. Virgin America asks that the big folks buy two, with one refunded if there’s an empty on the flight.

You can get my thoughts after the jump.At the end of the day, there is only one point that matters. Airlines are businesses run in the interests of their shareholders. Since most of these businesses are struggling, they need to do what they can to maximize revenue. If that means charging for two seats for passengers who can’t fit in one, so be it. If an airline feels that that’s a public relations nightmare and would rather accept the degradation RASM … it’s up to them.

It’s a numbers game – and not the numbers on the scale.

I’ve always been a believer in “pay to play.” You want a seat? Cough up. You want two? Cough up twice as much. “Buffet-style” air travel – in which you pay once and take as much as you want – simply doesn’t work.

And, I respect airlines for addressing the rights of all passengers. Everyone has a “sitting next to a fat guy” story. Yes, some are really just infantile bitching because planes are generally cramped. But, some are legitimate. A larger passenger who wants to save a few extra dollars and can’t put the armrest down is having his ticket subsidized by mine. That has an effective financial impact on me, and it’s unacceptable.

It’s not an issue of weight. However you look at it, the concern is financial. Take the word “fat” out of the equation, and it’s much easier to solve.

Making sense of the airline industry

by Tom Johansmeyer on

The situation is currently grim for airlines, having gone from “bad in January to ugly by March,” according to USA Today, mirroring the U.S. economy as a whole. But, some feel that the worst is behind us. At the same time, a decline in business traveler traffic may suggest that we have a long way to go.

That’s why I love USA Today … two perspectives for the price of one!

Let’s make one thing perfectly clear: airline executives are unanimous in refusing to state that a recovery has begun. Keep in mind that CEOs have to be incredibly careful whenever they speak. Something that’s interpreted as a prediction could be disastrous later. A prediction becomes a goal to be met, and failure to do so can have harsh implications on the stock price.

In case you don’t know, that means real people lose real money.

That being said, Delta, American and Continental executives allowed themselves some modest hope, suggesting that “at least traffic levels aren’t collapsing the way they did last year.”

For now, there’s little to celebrate aside from the hope that we’ve hit bottom. Continental’s revenue per available seat mile (RASM) fell 4.8 percent in January, 11.5 percent in February and 20 percent in March. April is likely to be down 13 percent to 15 percent.

RASM basically tells you how much revenue an airline pulls in for every seat flown. Let’s make it easy: assume that a plane has two seats and flies 100 miles. One passenger pays $200 and the other pays $100. The first passenger pays $2 per mile, and the other pays $1 per mile. It averages out to revenue of $1.50 per available seat mile.

Now, assume that we have a third seat … and it’s empty. So, we’re working with $2, $1 and $0. That’s RASM of $1 (as opposed to the $1.50 above).

Figuring this out for an entire airline for a full month is obviously much more complicated, but you can probably see the value in doing so. It’s a way to figure out just how productive every seat on every plane is – even the empties.

Delta’s perspective is that things aren’t getting worse right now, even if they aren’t good, and American believes that it’s too early to tell.

The decline in business travel is seen as a big part of the problem. Business travelers tend to spend a lot of time in planes, and they don’t always get the lead time to buy tickets (or prepare their families for long absences) that they’d like. As a result, they often pay more for tickets than vacationers, who have the luxury of planning ahead.

To keep expenses down, many companies are trying to cut their spending on travel, opting for other collaboration alternatives. While face-to-face meetings are nice, they tend to be a lot more expensive than webinars and conference calls. When you have to squeeze the budget, travel is an easy place to cut spending a bit.

I saw this firsthand during the last economic downturn (following the collapse of the “dotcom economy” and the terror attacks of September 11, 2001). I was a management consultant and flew every week. While my clients were willing to foot the bill for weekly travel, I found myself under a lot more pressure to find cheaper flights, stay at hotels that were less expensive (and less convenient) and take a taxi to the airport instead of driving and putting my car in the lot for a week.

Though business travel can be cut, it won’t go away completely. There will always be a need. While many cite conventions as a source of business travel, you’re more likely to run into weekly grind travelers at airports in this economic environment. Catch the first flight out of a major airport on a Monday morning, and you’ll see business and business casual attire, laptops clutched and weary looks. These people make the same run every week, returning home on a late flight Thursday or Friday. When you have a lot of people dropping $500 a week on flights – each doing it 40 times a year or more each – the airlines benefit. When they slow down, the airlines feel pain.

To compensate, as you’ve seen here on Gadling, airlines are coming up with more fees – and they’re not all as crazy as the Ryanair pay-to-pee proposal. Baggage charges seem to be most common, with Delta hitting up passengers for $50 to check a second bag on international flights (starting July 1, 2009). The airline hopes this will generate another $100 million this year.

Delta’s not innovating, here; it’s just the most recent.

The need is salient, given recently released first quarter financial results. JetBlue and AirTran stood out by turning profits ($12 million and $28 million, respectively), largely because the cost of jet fuel dropped. Take that out of the equation, and AirTran’s 31 percent revenue decline would have had a greater impact.

Meanwhile, US Airways posted a $103 million loss. Alaska Air Group lost $19.2 million for the quarter. Delta, American and United showed substantial losses, as well.

Leisure travel isn’t the primary driver, as fare deals have kept this section of the market fairly active, if less profitable. It’s the business travelers who are straining airline financial performance. It will take a turn in the economy to solve this problem. Any measures available to the airlines are more likely to slow the bleeding than repair the situation as a whole.

When will that happen?

Like the airline CEOs, I’m not crazy about making predictions, as my success is shaped more by luck than clairvoyance. But, I’ll take a small step out on a limb. Businesses will green light travel increases when they see an upside to doing so. When sales teams encounter big opportunities, they will be able to make the case to fly. This means that a client has to be ready to write a big check. Also, startup activity will result in the use of venture capital funding to hop on planes with the hope of pitching new ideas to clients interested in growing their businesses or realizing a cost savings.

You won’t notice it at first; these trends take a while to gain steam. Success builds upon success, with each win leading to several new opportunities and a willingness to fund travel for them.

Am I willing to throw a date or timeframe out there?

No way!

We’ll all have to wait and see.

Panic after fighter jets escort 747 around Manhattan

by Grant Martin on

Several buildings in Manhattan and New Jersey were evacuated earlier today, after officials spotted a Boeing 747 jumbo jet flying over the city escorted by fighter jets. As it turns out, the jet was one of President Barack Obama’s backup aircraft that was circling for a photo op. The whole operation was supposed to have been coordinated among the FAA and local officials, but apparently the message wasn’t communicated too well. The WSJ has video of the circling jets below. Imagine watching this from your highrise in Manhattan.

Galley Gossip: Laviators unite! (mile high headshots)

by Heather Poole on

Recently I wrote a post, the hottest trend on the airplane since the mile high club, about something disturbing, yet quite intriguing, that was taking place not just on the airplane, but behind the locked lavatory door at 35,000 feet. Passengers, and I’m talking all kinds of passengers, have been photographing themselves in the bathroom. Alone. Doing what, I don’t know. But they look like they’re just standing there. And I wanted to do it, too.

I had written, “Oh you better believe I’ll be taking my own self portrait in the lav on my next flight to New York on Wednesday. Until then, check out these interesting shots.” And then I added a photo gallery I’d put together of passengers I’d found on Flickr.com standing in the lav, camera in hand.

One Gadling reader responded, “Heather, if you do photograph yourself in the lav, please spare us the picture! I think people will lose any respect they have for you.”

Sounds to me like someone needs to lighten up, and they can start by grabbing their camera and joining the club – the laviators club. I did! Yep, that’s me up there in the photo looking not so hot on a flight from Los Angeles to New York. Hey, it was late and I was tired. But I just had to do it. Even though my seat mate did look at me a little funny after he caught me trying to sneak my camera into the front pocket of my pants.

The first thing I did when I got home was download the photo, that photo right up there, onto my personal blog. I had a good laugh and I honestly thought that would be that, end of story. But a few days later I got an email with a photo attached from a Gadling reader. “This one’s for you,” Nate wrote, and that’s all he wrote, and it cracked me up!

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The very next day I got another one! Jeff wrote, “I made you a picture.” I clicked the link and thought to myself, Oh. My. God. What have I started?

Next to join the club was one of my favorite flight attendants, Sodwee, also known as Airboy. He works for Emirates. He wrote, “Heather, I was thinking of you from CDG to DBX.”

Airboy wasn’t the only one thinking about me in the lav. Leesa wrote, “My daughter and I flew to LA last week and thought you might want some lav pictures for your collection.”

Well Leesa and her daughter were right! Not only do I have an interesting collection of mile high headshots from readers like you, I want more, more, MORE! So next time you’re on a flight don’t forget to take your camera and make sure to think of me – in the lav. Please, I beg you, join the club – the laviators club. And I’ll add your photo to the gallery above. Hmm…I wonder if Karen Walrond, our own resident photogapher, can give us a few tips?

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Air France jet diverts after being told to stay clear of US airspace

by Scott Carmichael on

If you ever wondered just how serious the US takes its security policies, then read on, because even people on the terrorist watch list that are flying over the US are enough of a threat to force a plane to divert.

An Air France flight from Paris to Mexico had to make an unscheduled stop in Martinique when US air traffic controllers notified the jet that it would not be receiving permission to fly over US airspace.

That’s right – the plane was not en route to the US, just passing over some of it, on its way to Mexico.

On board the plane was Colombian Journalist Hernando Calvo Ospina, who works for Le Monde Diplomatique.

What makes the whole incident even more interesting is that Air France had only sent its passenger manifest to the Mexicans, but now it is clear that Mexico shares this information with the United States.

Hernando Calvo Ospina has written articles about the United States involvement in Latin America, and is currently writing a book about he CIA. The exact reason for him being on the terrorist watch list is unknown, and we’ll probably never know what criteria are used for adding people to it. Air France is considering asking the United States for compensation. Good luck with that.

Update: A commenter left this link to a detailed descrption of what happened, written by the “terrorist” himself.