Continental Airlines and United won’t be bed fellows after all

by Jamie Rhein on

Continental Airlines has decided to stay single after all–sort of. United Airlines’ parent company UAL had been wooing Continental looking for a merger hook up, but since United hasn’t had great luck financially as of late, (see Grant’s post), Continental has said, “See ya later, toots,” to the merger deal.

According to this article in today’s New York Time’s, Continental Airlines is still casting its gaze towards American Airlines and British Airways for some sort of alliance deal. In the meantime, United is looking for another bed pal.

U.S. Airways may be it, but that’s not clear either. With all the trying out the beds, it’s hard to keep up. What is clear is that ticket prices are going to keep rising. The economy is not being particularly kind to the airline business, although, since the New York Times article was written, the shares of Continental have gone up. The article said at the end of the week, shares were $15.21. Now a share is at $17.25.

As the airlines are looking to swing deals, I’m hoping someone will look at those old Skybus routes. I’m still recovering from that airline’s shutdown.

Rumor: United and US Airways could announce merger soon

by Grant Martin on

Word on the secret underground is that United Airlines and US Airways may be in talks to merge, and may even announce their plans as early as TODAY. Other reports say that they’re waiting on union approval and could postpone an announcement in early May.

I know we’ve all been speculating about whether any other legacy carriers were going to merge after the Northwest and Delta deal got rolling; many believed that Continental and United were next in line, especially with Continental’s suspicious postings on their new website, co-industryconsolidation.com.

Perhaps that’s not the only deal in motion though? United and US Airways, two airlines that have faced particular hardship over the last few years could well-benefit from the consolidation of their services. Both are in the same airline alliance and have numerous domestic hubs that could directly compete with the the new Northwelta.

Keep an eye on the news and UAUA today. Again, this is all still speculation but big news could be on the way.

United frequent flyers also get double elite miles

by Grant Martin on

The new big thing is double elite mile promotions, I guess. First Delta Airlines started a program last month awarding their frequent flyers double Medallion Miles. Then, American Airlines followed suit and launched their own. Now it looks like United has done the same thing.

Interesting observation: one airline from each major alliance is running the promotion — Delta = Skyteam, American = Oneworld and United = Star. Perhaps the airlines are trying to tell us that we need to concentrate our alliance flights on one carrier… one carrier that perhaps may absorb another in a soon to be merger? But I speculate, I speculate.

What I do know is that it’s got some of the mergee passengers miffed that their partner flyers are getting super elite status while they’re stuck earning regular ol’ elite miles. Northwest passengers, for example, will be only earning miles at the regular rate, but after the merger there will be an artificially high number of Delta elites. This means fewer chances for upgrades and perks for the now dilute elite ranks.

We’ll see how many travelers end up taking advantage of the offers anyway. Most people that I have told about the promotion have shrugged off the suggestion and moved on with their lives. Perhaps I get too worked up about this elites status business.

Check out the promo page here if you want to participate. You’ll earn double elite miles between now and June 15.

[Thanks to Amily for the link]

United Airlines posts staggering $537M Q1 loss, plans to cut jobs

by Grant Martin on

United Airlines posted its quarterly earnings yesterday and they weren’t pretty. The Chicago based carrier lost 537 million dollars in the first quarter, nearly a third of its market value as its stock plunged 37%. It was the company’s largest loss since it came out of bankruptcy in the first quarter of 2006.

In tandem with these numbers, the airline also announced that it would be cutting over 1,000 jobs and reducing flights in an effort to save cash.

And thus we see how a major carrier weathers the storm of high oil prices and a tight market. Fortunately for them, they had the assets and bandwidth to handle a few consecutive quarters of rough seas. Carriers like ATA and Skybus could not. The real question is thus: How many months of high oil prices can the airlines handle?

I have a feeling that this is not the end of woes for the industry — each and every domestic carrier is facing the same market influences. It will be interesting to see how other airlines cope in the new oil market, what they do to keep ticket prices low and competition high. Perhaps they will raise fees on all likes of service from checked baggage to changed tickets. Or perhaps, as Richard Anderson of Delta Airlines suggested this week, they’ll all just raise ticket prices 20%.

United Airlines secretly raises ticket change fees

by Grant Martin on

We are officially in the era of airline fees. Over the past few weeks, major carriers across the country have been implementing extra fees to check second bags on their aircraft. Now, beginning with United Airlines, they’re starting to charge higher fees to change your ticket.

The way the regular system works is as follows: when you buy a ticket you purchase your seat in a certain fare class, ranging from a full fare in first class to a deeply discounted ticket in coach. Among the tickets in your class of service, most are non-refundable tickets that you basically can’t return after you swipe your card. Most airlines allow you to change that ticket however, with various stipulations. Often times the ticket needs to be in the same fare class and in all circumstances the airlines are going to hit you with a hefty fee. This varies from 50$ upwards based on the airline, class of ticket and elite status that the passenger may have with the airline.

In this instance, United raised their fee from 100$ up to 150$ to make any changes to your ticket. And they didn’t even tell anybody when they did it last Friday night. News is just slowly seeping out now.

Often times, airlines will make these changes to affect the bottom tier of passengers, exempting many of the first class and elite customers. But not in this case. This is a unilateral 50$ increase in fees across the board, so even if you’re super a super special elite passenger you still get screwed. Cool huh?

I wouldn’t doubt if other airlines started increasing their fees to change tickets as well. Perhaps soon they will start charging for padding on our seats and the right to sit down?