Seven reasons cell phones kill people on road trips

by Tom Johansmeyer on

Even though Thanksgiving is behind us, there are still plenty of reasons to road trip before the end of the year. Well, there’s one reason, really, and that’s Christmas. But, a lot of people are going to get behind the wheel or whine in the back seat. Of course, we can expect a lot of people to be on their cell phones while they’re driving about, according to the Insurance Information Institute’s blog.

Do the math on this: cell phone + car + stupidity = dead people

It really is that simple, but there are some reasons for this equation. In fact, even though I go over seven of them here, the Insurance Information Institute has pulled together an impressive list of distracted driving statistics and insights, and I just lost interest in making the list any longer than it already is (so I suggest you take a peek over on the institute’s blog) … but check out my stuff first:1. Distracted driving: the number of people killed in distracted driving incidents is up a whopping 22 percent from 2005 to 2009. Fortunately, not as many people seem to be dying from cell phone-impeded driving in the recent past, though.. The Department of Transportation reported a 6 percent decline in distracted driving deaths in 2009, which means people are either doing it less or have gotten better at it.

Of course, traffic crashes declined slightly overall for that period, which means the share of them belonging to distracted drivers actually increased. So, there’s no way to rationalize yourself out of this one: stay off the damned phone while you’re driving.

2. Leading cause: cell phones are the top reason for distracted driving, with a variety of perspectives considered. For the future though, texting appears to be the next big killer.

3. Texted to death: 18 percent of drivers in the United State have done it in the past 30 days, according to a recent study by the Insurance Research Council. Drivers 25 to 39 are most likely to be guilty: 41 percent of them copped to it, compared to only 31 percent of drivers 16 to 24.

4. Banning it does nothing: the Highway Loss Data Institute “found that texting bans may not reduce crashes,” writes the Insurance Information Institute. Collisions actually increased slightly in three of the four states examined (but the change was not statistically significant).

5. Complacency: teens are more ready to blame drunk driving than texting for traffic accident fatalities. According to the Insurance Information Institute: “The survey seems to indicates that despite public awareness campaigns about the dangers of distracted driving many teens still do not understand the risk.”

6. Hypocrisy: even though 62 percent of AAA Foundation for Safety survey respondents feel that cell phone use while driving is “a serious safety threat,” close to 70 percent admitted to talking on their phones. Twenty-four percent read or sent text messages.

7. Teenagers are stupid: while 84 percent said in a Seventeen magazine survey said “they were aware that distracted driving increased the risk of a crash,” writes the Insurance Information Institute, 86 percent engaged in distracted driving behavior related to a cell phone.

[photo by inhisgrace via Flickr]

The death of cheap tickets? Four factors to watch!

by Tom Johansmeyer on

Are the days of bargain pricing over? There’s a lot of pessimism around this issue. After getting smacked around in 2008 and 2009, this year has been a good one for air carriers, and USA Today reports: “Airfares are on the rise again and unlikely to fall again anytime soon.” Yet, a travel industry recovery comes with advantages, as more people want to fly, and they tend to be willing to stomach higher prices. So, what’s the deal? Are we going to pay more (happily), or will 2011 means continued a continued prowl for cheap tickets, particularly online?

There’s no doubt that the airlines are getting more of our wallets. The U.S. Department of Transportation says that the average domestic ticket surged 13 percent – from $301 to $341 – from the second quarter of 2009 to the second quarter of 2010. That’s the fourth quarter in a row domestic fares rose.

Now, airlines are price-takers, not price-setters. What does this mean? They respond to what consumers are willing to pay … they don’t set the tone for the market (e.g., the way a luxury goods manufacturer would). So, if fares are shooting up year over year, a consumer willingness to pay is certainly implied.

Individual airline fare increases are pretty interesting, with United Airlines up 25 percent on average for is period and discounter Southwest adding 15 percent, on average, to every ticket.

According to USA Today, airfares are climbing for three reasons:1. Tension between capacity and demand: during the recession, airlines cut capacity in an effort to lower operating expenses and keep their margins from getting throttled. Available seat miles plunged more than 12 percent from the fourth quarter of 2007 through the end of 2009, according to the Air Transport Association. But, travelers are coming back. Demand is up, and there isn’t as much supply on hand. That pushes prices higher, even as airlines scramble to add capacity. Yet, available seat miles are up only 1.5 percent over the past year.

Why?

Airlines have been burned by market forces before when adding capacity too quickly. USA Today explains:

Having learned a bitter lesson by adding back too much capacity, airlines are exercising greater caution and restraint this time around. Additionally, bankruptcies and consolidations during the past few years helped contain capacity. Brands like Aloha, EOS, MAXjet, Midwest, Northwest, Skybus and ATA Airlines have disappeared as a result of consolidation or financial calamity and AirTran and Continental Airlines will soon follow suit.

2. Oil won’t go down: oil has been on the rise for a decade, moving from below $20 a barrel to above $90 a barrel, some of which came from the 2008 market shock. Someone has to pay for this of course … and it isn’t necessarily you. That’s the problem with being a price-taker: you can’t pass along all your expected or unexpected price increases to consumers. Now that market pressures are being eased, airlines can start to recapture some of these expenses.

3. The business is changing: according to USA Today, “so called ‘low-cost’ airlines look more like network airlines every day” – as a result of carrier merger activity. And, the increase in maturity comes with higher expenses. For example, these airlines are “rapidly expanding into larger hub airports or building their own”: that cost cash. It has to come from somewhere. It can also come with long-term costs that aren’t always easy to forecast:

Hub airports are often plagued with congestion, resulting in increased flight delays which can wreak havoc on aircraft turnaround times and utilization schedules, further raising operating costs. In recent years, Southwest has expanded into some of the most congested airports in the country, like Boston Logan, New York LaGuardia and Washington Reagan National.

4. There’s more to spend: the fact that there are expense pressures on airlines doesn’t mean that you’re going to have to foot the bill. The oil price factor, for example, has been around for a while, and it wasn’t enough to protect carriers from price declines. The fact that you probably have more discretionary income – or at least less perceived employment risk – means that you aren’t going to wince when you see a higher price. You’ll book with less lead time. It’s easier for you to spend.

What will be interesting to see is the extent to which consumers will be more willing to open their wallets. Even though having more cash comes with a bit of comfort in using it, memories may not be as short following this recession as they were in previous economic downturns. The recession kicked off by the global financial crisis in 2008 hurt. A lot. Unemployment was severe – and continues to be. People may not be as willing to pay big fares as they were in the past. Does this leave more market opportunities for online discounts – such as those offered by online travel agencies? That remains to be seen.

What do you think? Leave a comment to let us know! There’s no crystal ball on this one, and I’d love to get your thoughts.

[photo by atomic taco via Flickr]

New York City area airport rules aren’t doing enough to stop delays

by Tom Johansmeyer on

If you’re flying to or through the New York City area, bring a book Kindle. You’ll probably be at the airport for a while. A new U.S. Department of Transportation Office of the Inspector General report says that airports in this part of the country aren’t measuring up, which disrupts air travel nationwide.

According to the Associated Press, the report says that “scheduling rules continue to put too many planes in line during bad weather.” It adds that the “limits imposed by the Federal Aviation Administration at Kennedy, LaGuardia and Newark airports in 2008 are too generous and are based on good weather conditions, resulting in a glut of flights when the weather turns ugly.”

The bottom line? Twenty-eight percent of all flights coming into the Newark Liberty International Airport wind up delayed or just canceled, as of August 2010. For LaGuardia and JFK, the rate was around 26 percent. Those aren’t good odds for passengers.

[photo by PetroleumJelliffe via Flickr]

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]

Department of Transportation mulls expanded passenger delay rule

by Tom Johansmeyer on

The Department of Transportation is thinking about getting even stricter with the airlines. After implementing a rule last spring that involves heavy fines for carriers that keep passengers on a plane on the ground for at least three hours, the DOT is already considering expanding the scope to small airports and international flights.

MSNBC reports:

“The situation is much worse than the [official] statistics indicate,” said George Hobica of AirfareWatchdog.com. “We have to include every airport, every type of plane and every type of flight.”

Unsurprisingly, the International Air Transport Association isn’t crazy about Hobica’s approach, with spokesman Steve Lott saying, “If DOT goes ahead with this, they’re going to cause a much larger problem than the one they think they’re trying to solve.”

The final rule won’t come down until the spring, so there’s plenty of time for both sides to fight this out.

For the airline sector, this measure seems to be seen as a signal of something much worse – the prospect of broad regulation and constraints on its ability to operate effectively in the manner to which it has become accustomed.

For its part, DOT won’t announce a final rule until next spring, but you can expect a lot of others to weigh in before then. Hundreds of last-minute ideas were lobbed over to the DOT, according to MSNBC, addressing all kinds of passenger and watchdog hot buttons, such as: advertising, fee disclosure and compensation for those denied boarding. The big one, of course, was the issue of delays on the tarmac.

International carriers oppose the expanded rules – shocking, right?! Lott, taking the standard industry stance, raises the issue of cancellation instead of risking a $27,500 per passenger customer fine, telling MSNBC, “I don’t think getting stranded in a U.S. city for a day or more is necessarily helping passengers.”

This may be a risk, but the data tells the only reliable story:

Meanwhile, as the airline industry and consumer advocates press their points of view, two truths regarding tarmac delays remain. Delays of three hours or more for domestic flights are down substantially since the original rule went into effect – there were only three in July, says DOT, compared to 161 during the same period last year – and international flights do present a much more challenging scenario.

[photo by williamcho via Flickr]