Tiny Samoa Air First To Charge Passengers Based On Weight

Samoa Air will now charge passegners by weightConsidering the number of fake travel stories we posted in celebration of April Fool’s Day on Monday, we can understand why you might be skeptical of the following post. But it has actually been confirmed by a number of news outlets across the globe, including the BBC. Still, considering the timing, I was double and triple checking the news.

Samoa Air has announced that it will now start charging passengers based on weight. The controversial new pricing means that it will now be cheaper for thinner customers to travel with the tiny airline, which operates just two aircraft over a few relatively short routes. Those planes are small, which makes them more susceptible to heavy loads as they fly between Samoa, American Samoa, North Tonga, Niue, the North Cook Islands and French Polynesia.

According to the new policy, passengers, along with their bags, will be weighed at the airport to determine just how much they’ll have to pay. They will then be charged a fixed rate per kilogram, which varies based on which route the passenger is actually flying. Those rates range from as little as $1 all the way up to $4.16 per kilogram. There are no extra bag fees of any kind, just a simple scale based directly on weight.Chris Langton, the Chief Executive of Samoa Air, has been widely quoted in the media as saying that this is “the fairest way of traveling,” and I’m sure many would agree. Sitting next to a particularly large passenger who takes up half of your seat isn’t especially comfortable and while this new pricing scheme won’t alleviate that issue, at least svelte customers will have the satisfaction of knowing that they paid less for their fare. Langton also says that the policy will help promote a greater awareness of health in Samoa, a country that is known for having one of the highest obesity rates on the planet.

This is an interesting approach to pricing to say the least. As someone who tends to travel light, I personally wouldn’t mind seeing some of the bigger airlines adopt a similar approach. But considering the size of many passengers, not to mention their bags, I’m not sure how popular it would be with the general public. Besides, going through a TSA screening can be harrowing enough, how bad would you feel if you had to step on a scale at the ticket counter too?

[Photo Credit: Samoa Air]

Spirit Airlines fed up, says government has hidden agenda

Spirit airlinesThis week, Spirit Airlines, mad about new airline disclosure rules, started adding a $4 “unintended consequences of DOT regulations” fee to ticket prices. It’s just the latest in a salvo of complaints by airlines over new fare disclosure rules they feel are unfair.

Spirit Airlines isn’t happy with the new rule requiring airlines to include all taxes and mandatory fees in the quoted airfare price and posted a big “Warning!” sign pop-up on the carrier’s website making that quite clear earlier this week. The pop-up is gone now but the information is still prominently displayed, urging consumers to contact their Congressional Representatives to complain.

In a direct attack on the new rules Spirit says “If the government can hide taxes in your airfares, then they can carry out their hidden agenda and quietly increase their taxes. (Yes, such talks are already underway.)” on their linked web site, keepmyfareslow.org.

Spirit believes that with the total price on display up front, it looks like airlines are raising their prices which could drive away consumers, something a low-cost airline can not afford.

“We’re against these new regulations because we actually think it reduces transparency,” Spirit Airlines CEO Ben Baldanza told Time this week. “We think it makes it harder for consumers to understand what they’re paying for.”

The new regulations of airline marketing also allow passengers to wait as long as 24 hours to pay for a reservation, a huge change from policies airlines have requiring immediate, nonrefundable payment for discount fares.

Here is where they might have a point: its a trade-off of sorts.

Airlines often struggle to fly full planes and need to have them full to make a profit. The airline gives a discount to attract buyers and expects that seat to stay sold in return.

Spirit CEO Ben Baldanza said in a statement that “the new rule takes seats out of circulation, albeit temporarily, limiting the inventory for people willing to pay on the spot. As a result, he said, the airline now has to spread costs over fewer passengers, and add the $4 fee” reported the Las Vegas Review-Journal.

Confusing? Looking at this from a different angle might provide some clarity. This is an issue that cruise lines, exempt from disclosure rules, have begun dealing with recently also.

Traditionally doing what DOT rules are having airlines do just now, travel agents or passengers booking directly could put a courtesy hold on a cruise cabin to lock in the price and availability for a given period of time. That took the cabin out of the available inventory for others to choose from, much like airlines are being forced to do now. Affecting available inventory and pricing even more, huge blocks of cabins on a given sailing could be held out of available inventory for a proposed group sailing, artificially inflating occupancy levels.

On the other end, cruise line cancellation policies were more generous in the past, allowing passengers to book up to a year or more in advance and cancel just before final payment with no penalty. Cancellation charges started on the day final payment was due and increased as the date of sailing came closer, to where if passengers canceled within 7 days of sailing the cancellation penalties would be as much as was paid for the booking. Now, that 100% penalty time is happening farther out from sailing, giving the cruise line more time to sell that cabin to someone else and further discouraging passengers from cancelling.

A good example of what the airlines are talking about can be found in new cruise fare options aimed at reducing those cabins that have been taken out of the available inventory but are not really sold yet.

Carnival Cruise Lines
Early Saver Fare is a good example.

In world of seemingly unlimited deals and offers with pricing all over the board, Carnival guarantees the Early Saver Fare to be the lowest advertised fare and reduces the price if a legitimate lower price is found.

Simple.

In return, the buyer agrees that the deposit is totally non-refundable, few changes can be made to a booking without incurring a $50 per change administrative fee, and standard cancellation penalties apply, much like reduced fare airline tickets were before the disclosure rules set in.

Airlines contend that they are being singled out as other travel products including hotel rooms and cruise vacations that commonly advertise tax-off pricing and are not affected by the rule. They are correct on that point.

Transportation Secretary Ray LaHood does not agree though, calling the regulations common sense in his own return attack.

“This is just another example of the disrespect with which too many airlines treat their passengers,” he said reports the Chicago Tribune.

On the other hand, if how discount air carriers do business keeps them in the air, at low prices, should we complain? Who really ends up losing here?


Bankruptcy for American Airlines


Flickr photo by redlegsfan21

Spring Break deals: Fares up overall, best deals can be found to Florida, Europe

The folks over at Bing Travel have been studying up on 2011 Spring Break airfare, and we hate to break it to you, but they’ve found that the average airfare cost is up more than 10 percent over last year, to $489. But the airfare increase doesn’t have to stop the beach party. If you choose wisely, there are still plenty of Spring Break deals to be had.

Bing’s Spring Break Travel Forecast says that lower fares on flights to Florida (particularly Fort Lauderdale, Jacksonville, Miami, Orlando and Tampa) can still be found. The average fare for Boston to Jacksonville is $233, and you can fly from San Francisco to Tampa for $300.

And while many overseas airfares have risen since last year, average airfares from several U.S. cities to Paris, Amsterdam and Rome have dropped as much as 13 percent over Spring Break season fares in 2010.

If you are just settling into spring break planning mode, here are some tips from Bing on finding the best spring break deals:

  • Be Flexible. Now we would never suggest skipping a day of classes, but, ahem, you will do better on airfare if you’re not trying to travel on weekend days like your Spring Break brethren. Monday to Monday or Tuesday to Tuesday fares will almost always be better. And if a school schedule isn’t determining when you vacation this spring, you will likely save money by going at the beginning of March or April rather than the middle of either month.
  • Use Online Tools. You can monitor your airfares and get notices when they drop on a certain route from a number of different online services. Bing’s Price Predictor shows you whether airfares on your chosen route and dates are rising or falling, to help you decide when to buy.
  • Be Aware of Hidden Fees. Be sure you know what you will be charged for checked baggage, overweight luggage, aisle or exit row seats before you hit the airport.

Bing is giving away five $100 travel stipends for 2011 spring break travel on Twitter. To enter, tweet @fareologist with where you’d like to go for spring break. Check out the contest’s official rules before entering.

[Image credit: Flickr user Dawn Huczek]

Which BIG airline just pulled out of three booking sites?

american airlines orbitzAs you’ve read here on Gadling, the battle between airlines and online travel agencies is poised to heat up. For the past few years, a dismal economy has sent many bargain-hunters to online travel sites with the hopes of finding fantastic deals and minimizing the pain in their wallets. Yet, with the travel market and the broader economy showing signs of recovery, airlines‘ brand power will gain momentum, and customers with more cash at their disposal will favor convenience and recognition over saving a couple of dollars. A battle for your money and your loyalty is brewing.

And, it’s just intensified.

Last month, American Airlines and Orbitz tangled over fees and the booking process, with the airline threatening to yank its inventory from the travel site, a threat on which it made good. After a temporary restraining order was issued, a judge ruled yesterday that American could pull its inventory from the online travel agency and ordered Orbitz to stop selling American Airlines tickets and displaying its fares.

Now, Delta‘s getting in on the action.

The airline has yanked its inventory from a handful of smaller online travel agencies, Aviation Week reports, including CheapOair, OneTravel and Bookit as of last Friday. So, if you’re hunting for cheap tickets on these sites, you won’t run into Delta any more. Aviation Week observes that it appears to be “part of a partial shift in its distribution strategy,” and notes that it seems different from American’s move with Orbitz.For Delta, the decision looks like it’s part of an effort to consolidate around larger online travel agencies, while American is targeting agencies directly, rather than using an intermediary to reach another intermediary.

While the means may be different, the objective appears to be the same. With a shift in the economy, airlines have a bolstered position in the marketplace, and this is likely to give them a bit more weight in dealing with online travel agencies and in reaching consumers directly. For American, it seems like a play to reduce costs and increase efficiency – as it is for Delta (though through different means). Ultimately, however, Delta wants more direct action from consumers, which reduces its sales costs and increases profits, which is what differentiates its decision from that of American.

According to a statement by Delta in Aviation Week, “Delta is being more selective in our use of online travel sites in the future as we continually work to improve our online distribution strategy.” The company adds, “We continue to make significant investments in delta.com to make it an industry-leading travel site, and we believe that delta.com will become the preferred online site to book travel on Delta.”

A representative from CheapOair was not available for comment.

I asked Douglas Quinby, Sr. Director, Research, at travel industry research firm PhoCusWright, his thoughts on Delta’s decision, and his reply was pretty striaghtforward: “The only surprising thing about this move is that it has taken this long.” He explained, “U.S. airlines have impressively restrained their appetite for growth (i.e. capacity) on the back of a (more or less) recovering economy. With clear control of their inventory, airlines have already started rationalizing distribution, and the weakest links are first to get snipped. American may have jumped the gun a bit with Orbitz, but believe me – we ain’t see nothin’ yet!”

So, what’s the net effect of all this? Do the actions of Delta and American suggest that we’ll be paying higher fares in the future because of behavior that doesn’t benefit the consumer? My bet is that the average fare buyer won’t see a whole lot of difference, especially given the share of sales already owned by the airlines via their own websites. The infrequent leisure traveler, especially, is losing an alternative … though it’s one that won’t be as important in a recovering economy.

[photo by boeingdreamscape]

Extra airline fees could mean better service! This is the FUTURE

airline feesSoon, airlines could make all their profits on the extra fees you pay. Seriously. Yesterday, the Department of Transportation revealed that airlines have had their most profitable year since it started tracking the data back in 2002. And, a good chunk of revenue came from baggage fees, reservation change fees and ancillary fees. In the third quarter alone, it was good for more than $2 billion. So, the foundation is in place. All the airlines need to do is build on it.

And, it looks like some are trying to do that.

According to MSNBC, US Airways President Scott Kirby said that baggage fees and ancillary fees could add up to 100 percent of the airlines profits this year. We’re not talking about some future development, here. This is now. We’ve been talking for a while about how airlines are coming to rely on these fees. Last year, it was an issue of surviving the recession; this year, it’s been about driving profits. Regardless of prevailing economic conditions, it’s clear these fees aren’t going anywhere. It would stand to reason, therefore, that they’d become a larger part of airlines’ profits over time.

But, 100 percent? How would that work? Let’s take a look.First, think about the trend in reduced amenities, putting aside the weird stuff you read about this morning. Food isn’t free, and you’re paying for bags and premium coach seating (think exit row and bulkhead). This lowers airline costs on an available seat mile basis.

Now, what does it mean to lower costs? Well, it provides the elbow room to compete more effectively on fares – translation: cheaper tickets. So, in theory at least, this puts more butts in seats. The lower cost, however, erodes profit per available seat mile, because there isn’t as much revenue assigned to it.

This is where the fees come in.

If all you buy is a seat, you score! You’ll have the chance to get it for less than you would have paid otherwise. If you’re the kind of person who goes to the movies and sneaks in your own snacks, you’re all set. But, the minute you need something else, you’re going to have to pay. This is where the airlines can make their profits. Essentially, getting you into a seat becomes a marketing opportunity for everything you sell. Going back to the movie theater example, it’s equivalent to the previews you see that implore you to go out to the lobby and grab some popcorn. And, they can pump up the prices on food, liquor, bag-checking and so on to make up what they’re effectively giving away on a break-even seat.

Of course, this is a bit oversimplified, but you get the idea. The future of airlines may be to turn a cheap seat into an opportunity to up-sell you on everything else. Frankly, it isn’t a bad idea. In addition to making tickets cheaper, the flight attendants will need to sell in order to help the airline turn a profit. Sales without service is usually a fool’s errand, so a shift in strategy of this sort will lead to better passenger treatment. Maybe we’ll actually be treated like customers!

All these extra fees may not be such a bad idea after all. The airlines don’t realize this, but if they make all their money on the amenities, they’ll actually have to deliver an enjoyable experience.

Let’s pay less to pay extra and be treated like human beings in the process.

[photo by Augapfel via Flickr]