Airline on-time performance improves, more than 1 out of 5 late

by Tom Johansmeyer on

Continued route and seat cutbacks have led to yet another month of improved airline performance this year. For July, the 19 largest airlines in the United States reported an on-time arrival rate of 77.6 percent. This is higher than July 2008’s 75.7 percent and June 2009’s 76.1 percent, according to data from the U.S. Department of Transportation‘s Bureau of Transportation Statistics. But, it still means that more than 20 percent of flights did not arrive on time. That’s more than one out of five.

The decline in traffic has led to improved performance. In July this year, only 580,000 flights were scheduled – down 8 percent from last year’s 628,000. Close to 40 percent of delays were caused by weather.

You have the best odds of an on-time arrival with Alaska Airlines, which turned in an on-time rate of 87.2 percent. AirTran was at the bottom, with 69.7 percent.

Almost 7,000 flights were canceled in July (1.2 percent of the total), with 164 flights stuck on the tarmac for three hours or more (29 for four hours or more). Thirty-four US Airways flights spent more than three hours on the tarmac, making it the leading transgressor, followed by Delta with 26 and JetBlue with 24.

Airlines can breathe again – bottom of their recession may be in sight

by Scott Carmichael on

There is no doubt that 2009 is a year that most airlines will want to put behind them as fast as they can.

In essence, it was the perfect storm combining everything that airlines hate.

A report published back in May told the doom and gloom story about airline profits – and that not a single airline in the world would earn anything this year.

As the first very small signs of economic recovery begin to show, airlines are starting to be a tad more optimistic, and are even projecting a growth in passenger traffic for 2010. In 2009, traffic was down 2%, but 2010 could bring a 4.9% rise, which is obviously just what the airlines need to stay alive.

Total losses between all the world’s airlines is $9 billion, which really doesn’t seem like that much in this new economy. Still, it’ll be at least 6 months till the airlines will know whether the worst really is over, especially as the busy summer travel months come to an end and passenger numbers drop. The real indicators will be business travel and freight – neither of which have recovered yet.

Once everything returns back to normal, we’ll emerge battered and bruised with lower airfares, higher (and newer) fees, a couple less airlines and some airlines that have removed premium seats. None of the major carriers vanished, but most of them did cut their workforce substantially.

Airline cancellation fees worse than baggage fees

by Tom Johansmeyer on

Airlines rely on you to have minor and major personal crises. Everything from changed meeting dates to family emergencies generate around $2 billion in change and cancellation fees a year, according to the Department of Transportation. That’s pretty much twice the amount the airlines pull in from extra bag fees – a measure that’s already been lauded by the Wall Street set for its impact on the airlines’ finances. For American Airlines parent AMR, for example, change and cancellation penalties came to $116 million for the first quarter of the year, while baggage fees amounted to $108 million.

These penalties, lamented almost universally by passengers, upped airline passenger revenue by 3.2 percent in the United States. As usual, business travelers get screwed most (probably because they travel most. They paid the bulk of $527.6 million in first quarter change fees.

Even with fewer people climbing onto planes this year, increases in penalty amounts have led to a net gain in revenue for airlines from this type of fee. A number of the larger airlines upped their change fees from $100 to $150. JetBlue moved it from $40 to $100 – and saw first quarter fees surge 29 percent, from $25 million to $32.2 million, relative to the first quarter of 2008.

These change fees are actually pretty important. With the money they bring in, airlines can offer discounts elsewhere, financed by the extra income. And, they make it more attractive for passengers to buy full-fare tickets, that way they have a bit more flexibility. The more expensive tickets benefit the passenger … and of course, the airline.

Need help? If you’re flying Delta, look for the red coats.

by Jamie Rhein on

As much as I’m displeased about Delta’s new policy to charge $5 more for bags checked at the airport , I do have to say I was pleased with how friendly the gate people were on each leg of our flights to New Mexico and back this month.

I think the people I came across are naturally pleasant, but Delta is making extra efforts to ensure passengers feel as if they can get great service from a real person. The airlines have brought the Red Coats back. Red Coats are the customer service personnel of Delta’s yesteryear who are not tied behind a counter but are accessible to passengers in need. They walk around Delta’s service areas to offer assistance. Delta cut those positions years ago, but has decided that having people trained to be extra friendly and on hand may smooth over travel woes and keep customers flying Delta.

The people wearing Delta’s red coats have the ability to rebook tickets, hand out hotel vouchers and any other task that may make travel easier on the passenger. If it’s easier on passengers, it’s easier on everyone.

Delta has moved up a few notches in my book, not that the airline is keeping track of what I think, but having personnel available to smooth over upset is good for business in my opinion. For now, it sounds like the Red Coats are only at major airports. [USA Today]

Airlines run out of services to cut, eye flights

by Tom Johansmeyer on

Cuts aren’t limited to airline employees and passenger amenities. In the next few months, capacity – the number of asses that can be accommodated – will be sliced. Having fewer flights will lower costs and boost the all-important revenue per available seat-mile (RASM) metric. For passengers, the drop in supply is likely to push fares higher and convenience lower (if you’re looking for non-stop flights, you’ll have to look harder).

It’s earnings season – and what happens down on Wall Street will ripple through every airport in the country. Six of the nine top airlines in the United States posted profits for the year – fun! – but they did it on falling sales. What’s that mean for the average traveler? It means airlines have had to cut their way to profits, because they aren’t growing. If passengers aren’t spending as much, all the airlines can do is take away services that cost money. And, with RASM down 19 percent year-over-year for seven U.S. airlines, they have little choice.

If you’ve been on a flight recently, you’ve seen there isn’t much left to cut, which is why airlines are going to be cutting the flights themselves. For the fourth quarter of 2009, total available seat-miles (one person flying one mile on one flight) is expected to fall to 12.4 billion – which is close to post-9/11 levels. Two years earlier (Q4 2007), it was 14.2 billion.

I hope you believe that “getting there is half the fun.” If you do, the decline in non-stop flights won’t bother you as much. Prepare for layovers – lots of ’em. This will help airlines consolidate flights, fill vacancies and boost RASM. But, it also means that you’ll spend a bit more cash at Auntie Anne’s (get some cheese with those pretzels!).

Cutting costs could actually lead to higher prices, which the airlines desperately need – but it means a smaller base of seat-miles on which to make money. Competition will fall on some routes, and overall supply drops – both of which give airlines the power to increase fares. Of course, these really are minor forces compared to broader economic conditions. The ability of customers to pay is ultimately what drives the cost of a ticket, and absent an economic recovery, fares will stay low, as will airline earnings.