Pricey tickets hold back leisure, but business travelers getting back on planes

by Tom Johansmeyer on

The past two years have been nothing short of severe for the travel business, especially the airlines. Fortunately, it looks like luck is turning. Barney Harford, President and CEO of Orbitz Worldwide, says that the airline sector appears to be on the mend, at least for business travel. Consumers, on the other hand, aren’t buying back in as aggressively, as high fares are battling with continued economic constraints for wallet share.

The average airfare for domestic travel is up 10 percent, according to Hartford, with international fares surging 17 percent. He notes to CNBC:

“We are seeing … a moderation in the increases in air tickets that we were seeing in perhaps May and June, where we saw some really stronger increases in air tickets,” Harford went on to say. “We’re hopeful that we’ll see an increase in capacity in the airline sector, which will drive some moderation in (the price of) airline tickets.”

Nonetheless, you can still find some bargains out there, according to Hartford. Look for the best values in Caribbean destinations.

[photo by emrank via Flickr]

JetBlue flight attendant hiring: police and firefighters preferred

by Tom Johansmeyer on

“Turn off your electronic devices” may soon be followed by “Up against the wall!” on JetBlue flights. The airline is looking for flight attendants who have real backgrounds in safety: it’s targeting former police officers and firefighters for flight attendant jobs. JetBlue has reportedly hired “several hundred” of New York‘s finest over the past decade, and up to 10 percent of the cabin crew has had experience in emergency response work.

The first JetBlue flight attendant class included a former New York City firefighter, which caused the airline to think more about this talent pool. After all, police and firefighters are trained in dealing with emergencies, making them inherently more qualified than the flight attendant candidates airlines pull off the street.

So, I need to know: what’s next? Will American scrap its existing hiring model and look for green berets?

[photo by See ming-Lee via Flickr]

Southwest wins on bet against extra fees

by Tom Johansmeyer on

How did Southwest score its recent record revenue? Well, it could be because it isn’t jacking up fees for all the extras. The decision to do business the old fashion way seems to have been good for a quarterly profit of $112 million and may provide a good reason for other airlines to reconsider these unpopular measures.

In a roundup of coverage on the airline’s quarterly financial results, USA Today, found the answer in reports by Bloomberg and the Las Vegas Sun, attributing the results to “the company’s policy of not charging for bags and excellent customer service offered by employees.”

Rather than take the short returns on charging for blankets and checked luggage, Southwest is apparently making a longer-term bet on customer satisfaction, with a policy that’s more likely to appeal to the average passenger.

Is it sustainable? Well, that remains to be seen. It’s worth keeping in mind, though, that Southwest has built its business on something of a contrarian strategy … and it’s been working.

[photo by Mr. T in DC via Flickr]

Customer service slams airlines in overweight passenger policy enforcement

by Tom Johansmeyer on

Airline rules for passengers who take up more than one seat are neither new nor surprising. Forget about passenger comfort (the airlines already have, of course), it’s a financial issue. A passenger who takes up more than one seat is consuming a scarce resource (in the economic sense): seat 42A on Flight ABC123 on July 29, 2010 can only be sold once. If it doesn’t bring in any revenue, it never will. So, charging bigger passengers extra is a prudent financial move. Yet, this is only part of the problem.

Goodwill on the planes, in an effort to make overweight passengers more comfortable and avoid embarrassing situations, is resulting in uneven policy enforcement, which costs the airlines cash and makes instances of seemingly unfair treatment even worse.

And, the prevailing attitude in the marketplace seems to support this thinking. Even passengers affected by this policy are on board with it, so to speak, as one passenger noted in a letter to USA Today’s “Traveler’s Aide”. The problem is enforcement, which tends to be a tad uneven. The passenger noted in his letter:

The flight attendant had moved another large man to the outside seat in that row so there was a space between us. The agent told me I could either pay for a second seat or get off and wait for the next flight to New Orleans. I opted to pay and go home. The gate person embarrassed me and asked for my credit card, but didn’t require the same from the other large passenger.

The passenger was upset with how the Southwest flight attendant handled the situation. Of course, this airline is no stranger to high-profile gaffes with big passengers. Some passengers are able to get away with spilling into a second seat, while others are stuck shelling out for an extra ticket. And some simply don’t bother, and they invariably are seated right next to you. For the airlines, the challenge is in figuring out who should have to buy an extra seat. According to USA Today, “That means Southwest agents end up eyeballing those arriving passengers and guessing whether they comfortably fit into seats-without actually seeing them seated.” An overweight passenger may slip through the cracks on one flight but could have to pry open his wallet on another.

And, there is a bit of awkwardness involved:

“Without question, approaching a customer with unique seating needs who is unaware of (or has ignored) the policy is incredibly difficult,” says Southwest representative Christi Day. “However, with the use of discretion, tact, and genuine concern for customer comfort, approaching those with a clear need for additional seating is critical for ensuring that another customer is not subjected to an uncomfortable flight.”

Perhaps the greatest problem for the airlines – and I can’t believe I’m actually writing this – is that they’ve been too eager to accommodate. Customer service … good customer service … leads the airlines to give away an extra seat instead of charging when possible, or at least trying to misjudge in favor of the passenger. Or, maybe they just don’t want horror stories winding up in the hands of travel bloggers. Whatever the motivation, trying to help passengers is what leads to uneven enforcement. The inequity, of course, makes the slip-ups look worse than they are.

The solution is simple: stop the goodwill. When in doubt, charge for a second seat. It’s really that simple.

[photo by Willie Lunchmeat via Flickr]

Top five reasons you’ll pay more for flights

by Tom Johansmeyer on

It looks like flight deals are a thing of the past. The airline sector is starting to recover, as evidenced by an aggregate $1.3 billion in earnings for the six largest U.S. carriers last quarter, and more profits are said to be on the horizon. Of course, we’re still in the early stages, and those earnings do pale in comparison to the $22.7 billion in losses sustained in 2008 and 2009. So, the airlines are making up for lost time and taking advantage of a swing in the economy … that means you’re going to pay for it.

Good news for the airlines, of course, translates to a thinner wallet for you, but it indicates that you’re at least willing to handle the higher cost, since airlines tend to be price-takers rather than price setters.

Why are you going to pay more for flights? Here are the top five reasons:

1. Extra fees no longer “extra”: they’re part of the package now. Airlines raked in $13.5 billion from fees in 2009, a 43 percent spike year over year. They aren’t going away. As the industry recovers, this will help keep fares higher.

According to the Associated Press:

United and American led the way on “ancillary revenue,” including fees, at about $1.8 billion apiece last year, according to IdeaWorks. United Airlines President John Tague calls fees “an unequivocal success,” and suggests his airline could still double the amount it’s bringing in with baggage fees.

2. The market supports higher prices: airlines charge what they can get, as it is a consumer-driven market. So far, consumers are responding favorably to price increases, with fares up an average of 18 percent this summer.

3. Airlines to hold the line this fall: demand is expected to decline through the end of summer, and the airline will try to keep from offering deep discounts. In fact, many are offering deals to get passengers interested but are able to convert into higher-priced seats.

4. Shared armrests the norm: the planes are full. Delta filled close to 90 percent of its seats last month, with Continental at 87 percent and American at 86 percent. This means there are more fares covering the cost of the flight, which delivers favorable financial results.

5. Temptation to add flights resisted: rather than bring more planes out to handle this increase in demand, the airlines seem to be fighting the urge, because bookings are sluggish and the economic recovery is tenuous.

[photo by Ma1974 via Flickr]