One three-hour airline delay this summer … and the industry survived

by Tom Johansmeyer on

The latest data from the Department of Transportation suggests that airlines are figuring out how to survive in a world of on-the-ground delays that can last no more than three hours. The summer travel season had only one delay that was affected by the rule. This is a 98.5 percent decline from the summer of 2009.

The airline industry mobilized, when faced with the prospect of the three-hour rule, to counter that there would be a substantial increase in canceled flights, as the threat of hefty fines would cause them to pull the plug. Yet, this hasn’t really happened either. Cancellation rates for the spring and summer were:

  • May: 1.24 percent
  • June: 1.5 percent
  • July: 1.43 percent
  • August: 1 percent

In fairness, May, June and July had cancellation rates higher this year than last, but August held steady, suggesting that it is possible to comply with the three-hour delay rule without sending cancellation rates sky-high.

According to MSNBC:

That’s an acceptable tradeoff, says DOT. “Although the rule has been in effect only a short time, we’ve seen no tangible increase in flight cancellations,” said spokeswoman Olivia Alair, “which means airlines are taking action to prevent delays without canceling flights, as some industry critics claimed they would.”

So, what were the dire consequences forecasted by the airline sector?

Those critics would no doubt include airline consultants Darryl Jenkins and Josh Marks, who published a report in July stating that the new rule would lead to an additional 5,200 cancellations per year (both directly and indirectly), at a cost to the public welfare of $3.5 to $3.9 billion over the next 20 years.

Jenkins and Marks stand by their projections, creating a situation in which the same data is leading to two perspectives. But, one thing is clear: in terms of percentage, flight cancellations have stayed consistently under the 15-year average for four consecutive months.

[photo by nafmo via Flickr]

How do you pass the time in airports during delays?

by Mike Barish on

With nasty weather once again enveloping the Northeastern United States and winter showing no signs of ending anytime soon, thousands of travelers find themselves killing a lot of time at airports. Flight delays are a fact of life and there’s not a whole lot you can do about it unless you want to pay the fees necessary to change your flights. That leaves us all spending much of our holiday or business trip twiddling our thumbs in crowded, boring airport terminals.

Earlier this week, we showed you how one imaginative traveler entertained herself in Pittsburgh International Airport. However, not all of us are that creative (or bold), so we have to find other activities to keep us sane. Gadling wants to know what your favorite time-killer is during a long flight delay.

Let us know by voting in the poll below and feel free to elaborate in the comments.

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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.

Roll the dice with “job-loss guarantees”

by Tom Johansmeyer on

It makes a lot of sense right now. You have a job, and you’re feeling comfortable in it. You’ve survived the latest round of layoffs, and it looks like the bleeding has stopped for a while. Or, you’re just so stressed out you throw caution to the wind and book a vacation, just so you can recharge a bit.

But, you aren’t reckless.

Because we all live and work in a world at financial risk, you had the presence of mind to take advantage of a “job-loss guarantee.” If you lose your job, you get your money back … maybe. It turns out that guarantees aren’t always guaranteed. Several travel companies – including JetBlue and Norwegian Cruise Line – the rules are being tweaked.

Defining “job” can be the tough part. Several programs require that you be employed for at least a year at your current gig and that it be full-time. But, it varies. Check the terms and conditions before you bank on this benefit.

“Job loss” can be tricky, as well. If you were laid off, you seem to be in the best position to recoup what you’ve paid. But, if you were fired for cause, some programs may not pay. According to JetBlue, for example, “The spirit of the program is to accommodate those who have involuntarily lost their jobs due to the economy.” Resignations and buyout programs, also, may not qualify under some job-loss guarantee programs.

Be prepared to prove that you have lost your job. Chances are you’ll find something in the stack of paper that Human Resources gives you (usually your termination letter).

These programs can be helpful, but read the fine print. If you’re at all worried, spend your day off on your front stoop and hold onto your cash for a more stable time.