Airline mergers could lead to fare “creep”

by Tom Johansmeyer on

The Southwest/AirTran merger isn’t expected to push fares much higher. The disappearance of seats that comes with airline consolidation would make you think that prices are about to rise, as the fundamental commodity of the airline industry becomes increasingly scarce. But, we’re not close to that point yet, notes USA Today:

“We’re not at the tipping point,” says George Hobica, founder of Airfarewatchdog.com. “I don’t think fares will be impacted much until we have three legacy carriers and one discount carrier remaining.”

The number of seats, however, is shrinking across the airline industry. Since September 2007, the number of domestic seats available has fallen 10 percent.

According to Hobica, look for fares to “creep upward,” but not at a rate that will horrify customers, a position supported by Frank Werner, associate professor of finance at Fordham University. He tells USA Today: “Generally, airline mergers remove competition from the skies, leading to higher prices. This will happen in markets where the combined Southwest/AirTran will not have a dominant market share.”

[photo by SkilliShots via Flickr]

Airlines continued to cut jobs – 25 months in a row

by Tom Johansmeyer on

There’s a reason why airlines have positioned themselves for a solid performance in 2010: in addition to charging all those extra fees, they have been cutting positions (and thus expenses). In July alone, the industry in the United States trimmed 2.3 percent of its workforce relative to July 2009. That made 25 consecutive months of net job losses in the domestic airline sector.

According to the Department of Transportation‘s Bureau of Transportation Statistics, 378,100 people were employed full-time by the airline industry in the United States in July 2010, a decline of 8,700 from July 2009. Five of the six network carriers cut positions, with Delta adding headcount only because of its Northwest acquisition. Only two low-cost carries reported net cuts for this period (Southwest and AirTran).

According to the Associated Press, maintenance and ticket agent positions are getting hit most:

While the number of in-flight airline employees like pilots and flight attendants is regulated by the Federal Aviation Administration, the bulk of airline employees-maintenance crews, reservations and ticket agents-work on the ground and aren’t subject to federal minimums. Airlines are operating with less staff to save money, but they’re also outsourcing maintenance and other work to other countries where labor is cheaper.

[photo by aflcio via Flickr]

Airlines provide change fee relief because of Hurricane Earl

by Tom Johansmeyer on

As Hurricane Earl works its way up the east coast, airlines are letting passengers take one item off their lists of concerns. Delta has announced that passengers affected by the storm can make one-time changes to their plans without incurring any fees. This applies to flights scheduled for today and tomorrow and covers more than 20 airports in the eastern United States, including the New York area, Washington, Boston and Baltimore.

AirTran Airways has gotten in on this concept, as well, with passengers hitting a number of airports, including San Juan, Puerto Rico, being able to change their plans without paying extra. It only works for flights taking off by Saturday.

[Photo by NASA Goddard Photo and Video via Flickr]

AirTran tries to make money like an internet company

by Tom Johansmeyer on

If they can’t make money taking passengers from one place to another, maybe airlines can harness the power of eyeballs … you know, the way the web does. If you get enough people passing by a particular spot — physical or virtual — it’s possible to toss up a few ads and make some money. This is what AirTran has in mind. The airline is putting ads on the bottoms of seat-back tray tables. So, for takeoff and landing, at least, when this device is in its upright and locked position, passengers will be treated to prolonged exposure to the desires of advertisers.

AirTran plans to execute this across 138 planes within the next few weeks — it’s easy to pull the trigger when you stand to make some money by doing very little. The first ad partner, Mother Nature Network, is offering fliers the opportunity to win a cruise on Royal Caribbean. Future advertisers are expected to be travel-related, as well. The ads will be 2 ½ inches by 9 inches and will be easy to swap out, thanks to the plastic in which they will be encased. As planes are brought in for overnight service, they’ll be set up for the ads.

There is precedent for this move. For several years, US Airways has put ads on tray tops, but the rollout has been limited to only a few planes. Likewise, the cash from in-flight advertising isn’t all that high. US Airways pulls in $10 million a year from this, but it includes napkins, cups and some of the products carried onboard, not just the ads. Outside the United States, this practice is pretty common. Several airlines run ads to bring in a little extra money. Of course, Ryanair is among them, throwing ads on its overhead bins, tray tables and the outsides of the planes.

Will onboard advertising save the airline industry? It’s doubtful. The five largest airlines in the United States lost an aggregate $3.2 billion through the first nine months of 2009. They’ve tried combating this with extra fees and extremely aggressive cost-cutting, but nothing has really been successful. After all, a company just can’t cut its way to growth. The new advertising revenue could help, and it’s a revenue stream that will persist (and possibly grow) after the recession has receded.

You could be Danica Patrick’s backseat driver

by Brenda Yun on

AirTran Airways is teaming up with Danica Patrick and the Indy Racing Experience to give seven lucky winners and their guests the ride of their lives on the Indianapolis Motor Speedway. To complete the journey, winners will also receive two roundtrip flights on AirTran Airways, a $100 Hertz certificate, lunch and one night of hotel accommodations to prepare for the big day on Friday, October 2.

All you have to do is log onto http://www.airtran.com/danica before September 1, 2009 and register using their AirTran Airways A+ Rewards frequent flyer number. Winners will be chosen on September 8. For consumers that are not already A+ Rewards members, registration is free. Participants must be 18 years of age or older to be eligible.


If you don’t know who Danica Patrick is, then I don’t think you’ll be that interested in this silly little contest. I imagine most entrants will be of the male variety, and would love the opportunity to pull on Danica’s throttle — or be her backseat driver for a day.

Good luck — and if you win, tell Danica that Gadling sent you!