Airline fees never going away, $1.2 billion in first half

by Tom Johansmeyer on

In the first six months of 2010, U.S. airlines raked in $1.2 billion – and that’s just from change and cancellation fees. The industry is on track to see $2 billion in revenue just on ticket-related fees this year.

According to the Bureau of Transportation Statistics, here’s where the money’s going:

  1. Delta had the most at $347.1 million in the first half of 2010
  2. American Airlines was a distant second at $235.3 million in ticket related change fees
  3. United Airlines pulled in $158.3 million
  4. US Airways generated $128.3 million from ticket fees
  5. Continental Airlines picked up $120 million

JetBlue didn’t hit the top five (finishing sixth), but it did lead the low-cost category in change and cancellation fees, with $55.7 million.

[photo by cliff1066 via Flickr]

Delta to flight attendants: come back!

by Tom Johansmeyer on

Delta’s looking for 1,000 flight attendants, some of whom will be furloughed workers recalled for international assignments. Some will be new hires. But, it’s going to take some time get them in the door: they’ll be working the aisles by the middle of 2011. In particular, the airline is looking for flight attendants fluent in Japanese and Mandarin, which narrows the field a bit.

Delta already has 20,000 flight attendant, and they are currently in the process of deciding whether to be represented by the Association of Flight Attendants union.

The hiring at Delta follows a similar move by American Airlines, which is recalling close to 800 flight attendants who were furloughed and pilots to help accommodate network expansion internationally.

So, those baggage fees are paying off for a few people!

[photo by Augapfel via Flickr]

Fallen American Airlines could be next to merge … with JetBlue?

by Tom Johansmeyer on

American Airlines used to be the largest airline in the industry – now it’s third. Merger activity has narrowed the field, with Southwest–AirTran and United-Continental the latest deals that hit the sector. So, all eyes are on who will succumb to the urge to merge next, and American is being eyed as the next player.

According to a Forbes blog post, analysts from Morningstar believe that American Airlines “needs to make a big splash” to remain a player in an increasingly competitive market. The post continues:

“Once the industry’s largest carrier, [American Airlines] is now the third-largest…and any scale advantage it may have garnered is gone,” the Morningstar analysts write. “Ironically, AMR is at a substantial disadvantage, given that it steered clear of bankruptcy during the recession,” [Basili] Alukos and [Adam] Fleck say, pointing out that American’s labor rate is the industry’s highest on an equivalent basis.

So, who’s the right partner for American? The analysts at Morningstar are looking at JetBlue, especially given the latter’s “lighter cost structure.” Notes founder of Training the Street and former M&A investment banker Scott Rostan, “Three dominoes have fallen – Delta/Northwest, UAL/Continental and Southwest/AirTran.” He sees Alaska, Frontier and JetBlue as likely to make some noise.

[photo by Andrew Morrell Photography via Flickr]

Three ways to use social media for cheap travel

by Tom Johansmeyer on

When the internet came on the scene (the commercial iteration) in the mid-1990s, the traveling public got excited over the prospect of making buying easier – and pretty soon after, we started thinking about deals. Plenty of websites arose to satisfy our urge for cheaper travel. Then, social media arrived, and we became even greedier.

No, I’m not suggesting that we change – not at all. What’s wrong with wanting to get as much as you can for as little as possible? Do you overpay at the grocery store just to be a good guy? Exactly.

So, let’s talk about exploiting these opportunities. There are plenty of deals floating around on social media sites such as Facebook and Twitter. You just need to know how to score them. Here are three ways to put a few more bucks back into your pocket:1. Know where to look: are you a fan of your usual airline or hotel chain on Facebook? Do you follow it on Twitter? Start now. Just like the e-mail alerts you’ve been getting for years, you’ll get information you can use to keep your wallet fat.

2. Get the timing right: some social media deals exist on a schedule, like JetBlue‘s “Cheeps” on Twitter, which are last-minute and incredibly cheap. These tweets come out at 10 AM or so on Tuesdays. Not everyone makes it this easy, though. Some are totally random, in order to keep your eyes on their brand as much as possible. So, balance timing with vigilance.

3. Score some extras: you can use these sites for customer service, as well, with @Delta and @HyattConcierge among the companies using social media for this purpose. Also, check out the hotel or airline you’re about to use. You may find that it just happens to be active on Twitter or Facebook (such as @Colonnade). While you don’t get any formal advantage, talking to the people on the ground always leads to a better experience.

Five reasons airline fees up 50% year-over-year

by Tom Johansmeyer on

Does your wallet feel a little bit lighter? A new USA Today analysis reveals that airline fees are on the rise, with some up more than 50 percent relative to a year ago. The study compares the extra fees (not to be confused with fares) of 13 airlines and shows just how important this revenue source is to the airline sector.

According to USA Today, “The numerous fees are a sore subject for many fliers, but their dissatisfaction hasn’t deterred airlines from bringing in record revenue from additional fees.”

The fees were good for $2.1 billion last quarter, with $893 million of it coming from checked bags and $600 million from changed reservations.

So, where did all this money come from? Here are five ways airlines have turned those extra charges into a big business:

1. First checked bag: most airlines in the United States hit you for up to $25 for the first bag you check, with only Southwest and JetBlue abstaining. Most charged $15 a year ago, according to USA Today, with four not playing this aspect of the fee game.

2. Change fee spikes: a year ago, the most expensive coach change fee was $250, charged by Continental, Delta, United Airlines and US Airways. This year, it surged to $300, an increase of 20 percent, charged by American Airlines for some international flights.

3. Pay to call: still resisting the internet? Booking by phone costs an extra $35 on US Airways, while Allegiant Air hits you for a $29.98 round-trip booking fee and another $14.99 for “convenience.”

4. Preferred seating: United asks for up to $159 for preferred seating, which can give you up to five more inches of leg room. A year ago, it would have set you back only $119.

5. Get a receipt: Continental (for which this isn’t new) – along with American, Hawaiian and US Airways – have an extra fee for passengers who want a receipt after they have taken their flights.

[photo by Deanster1983 via Flickr]