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

American Airlines used to be the largest airline in the industry – now it’s third. Merger activity has narrowed the field, with SouthwestAirTran 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

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

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]

JetBlue in-flight internet access coming in 2012, worth the wait?

JetBlue is going to offer in-flight internet access! This is exciting news, right? JetBlue is one of the more exciting airlines in the market right now, having figured out how to offer solid customer service without jacking up fares (a combination the major carriers believe is impossible to attain … despite the fact that JetBlue has done so). So, the airline is getting into the internet game, a space in which it has lagged many other carriers.

Unfortunately, JetBlue isn’t going to begin installing the equipment until the middle of 2012, as it needs to be checked out and approved by the FAA before the airline can put it into production, according to FlightGlobal. The slow start might actually work to JetBlue’s advantage.

Rather than implement the solutions already out on the market, JetBlue has selected a different type of internet access technology, which should translate to better internet service for its passengers – which pairs well with the high levels of customer service the airline already offers. Unlike existing internet access systems, which interact with the ground, the JetBlue system will hit satellites. JetBlue CEO Dave Barger explains to FlightGlobal:

“In just the three years since we launched BetaBlue, the first commercial aircraft with simple messaging capability, technology has advanced by generations. Rather than invest in current technology, designed to transmit broadcast video and audio, we elected to partner with ViaSat to create broadband functionality worthy of today’s interactive personal technology needs.”

Barger also says, “This system will be designed for the 21st century, not just for today’s personal connectivity needs, but with the bandwidth to expand to meet tomorrow’s needs as well.”

[Via Business Insider]

Five reasons passengers looking for more than just a ride

As airlines cut routes and amenities while increasing fees, travel through the skies became a true labor. Sure, the cuts came as the result of market pressures that led to compensation reductions and other changes, but it also brought a problematic perspective. Somewhere along the way, it became acceptable for airline employees to claim that “you get what you pay for.” With low fares, essentially, you can expect substandard service.

Indeed, there is some truth to this. If you buy cheaper furniture, for example, you may be sacrificing quality to save a few bucks in the near term. We make these tradeoffs every day, and there’s no reason why a purchase from an airline should be any different. It’s clear that the standard has been set: you’ll pay less, and you’ll get a much lower level of service.

Take this concept to its ultimate conclusion, of course, is paying for physical movement, and you’re entitled to nothing else, despite the presence of beverage carts and headphones … not to mention employees who should provide a certain amount of customer service. I saw an interesting tweet to this effect not too long ago, claiming that transportation from Point A to Point B safely is what you’re paying those low, low fares for. But, I’m not so sure about that. There is so much more that’s explicit and implied in the air travel experience, and it’s delivered often enough that it should be expected.

So, why should we expect more than simply being taken from Point A to Point B? Well, here are five reasons why airlines are more than long-distance taxi services:

1. The airlines promise more than physical movement: Drinks are served on flights. Food is sold (or offered, depending on class and destination). There are movies and headphones and blankets and pillows, either free or for a fee. Whether you have to pay, in this regard, is irrelevant. The offering of amenities means that there is more involved in the transaction than the delivery of a seat from one place to another. So, something more than safe movement from Point A to Point B is implied.

2. Nobody wants substandard service: Basic customer service, which you can find on airlines only inconsistently, is expected in virtually every business transaction. While it doesn’t seem like much, this is an increase above the “physical movement” included in the price of a ticket.

3. A mere ride would (theoretically) cost less: Given that there are some services that could be sacrificed, a genuine low-cost, no-frills experience would cost less than existing flights. There would be no in-flight entertainment, no beverage service and no magazines tucked behind the seats. Rather than flight attendants, you’d have “safety professionals” (like lifeguards) who would only spring into action in the event of an emergency.

4. Low fares can still mean big money for passengers customers: While airline industry employees may drive home how cheap it is to travel these days, let’s not forget that unemployment is still through the roof, even if the recession did end more than a year ago. There are still plenty of mortgages at risk of delinquency and foreclosure. Simply put, the economic situation in this country is still dicey, and a little money is a lot when you don’t know how long you’ll have your job. Every dollar matters more to the consumer than it used to.

5. We’ve seen the possibilities: For everyone who has had a problem with a nasty flight attendant or a gate agent with a horrible attitude, you can find a story about one who helped someone out of a bind. I’ve had fantastic service on airlines that have reputations for anything but. And, some carriers have differentiated themselves through service (JetBlue and Southwest come to mind). We know it’s possible for airlines to do better; we’d just like to see it more.

[photo by UggBoy via Flickr]