US Airways the latest to increase extra bag fee

by Tom Johansmeyer on

US Airways has joined the ranks of airlines increasing their fees for extra baggage. The low cost carrier is raising its extra baggage fees by $5 each way, which is comparable to the increases levied by Delta, Continental and United. With the new charge, US Airways will be charging $25 for the first bag checked, with a second bag costing you $35 each way. The new fee takes effect on February 1, 2010. If you pay in advance, you can pick up a $2 discount on the first bag and a $3 on the second bag. American Airlines is still charging $20 each way for the first checked bag and $30 for the second one. On JetBlue, the first checked bag is free, and Southwest will let you check two bags sans charge.

The increased fees aren’t terribly surprising. The travel market slump is likely to continue through much of 2010, especially with the job market unlikely to improve until the middle of the year. And, airlines have become accustomed to all the extra cash they pick up from these fees. Since you’re a captive audience, they know you’re likely to pay … what other choice do you have?

So, get ready to cram everything you have into the overhead compartment. You’ll draw the ire of everyone else on the plane, but you’ll have the satisfaction of a few Andy Jacksons sitting in your pocket.

A gloomy travel market for 2010 will follow an ugly 2009

by Tom Johansmeyer on

Everybody seems to want the travel market to recover next year, but it looks like more time will be spent in yards, instead. According to a new USA Today/Gallup poll, only 16 percent of us are going to hit the skies or crash in hotels more than we did in what will go down in history as a dismal 2009. Close to a third said they are going to spend less time in guestrooms and cramped plane seats. The main reason, of course, continues to be the state of the economy.

Slow improvements to the economy, according to some industry analysts, should push demand for tickets and hotel rooms higher – not to mention services related to the convention and meetings business. But, the baseline is set pretty low, with 2009 having been so weak. American Express, the largest travel agency in the world, doesn’t see a recovery coming anytime soon.

The bar has been reset, and it’s low. It will stay low for a while.

The big beast to be tamed in the travel market, doubtless, is business travel. Until the corporations start to send people on the road more liberally, the airlines, hotels and other businesses involved in travel will continue to feel the squeeze.

What’s going to happen by sector? See below.

Airlines: Industry analysts see hints that the market is turning, with demand for seats up year-over-year (by month) since May. United Airlines sees “a very encouraging trend line,” and US Airways notes a steady improvement. But, the latter continues that a decline of 30 percent to 35 percent in corporate spending has been a drag, and November was the first month in which it was up year-over-year. And, November 2008 wasn’t a tough month to beat.

Analysts believe that “even a modest rise in the USA’s gross domestic product,” says USA Today, will kick the airlines back into profitability. Gary Kelly, CEO of Southwest, isn’t that optimistic, telling the newspaper, “Business travel still lags, and I don’t know that I’m comfortable in reporting that we’ve seen any improvement in that market.” He doesn’t expect business travel to bounce back next year.

Hotels: What can I say that Melanie Nayer hasn’t? Not much, really. The past year has been miserable, with PricewaterhouseCoopers reporting occupancy plunging to 55.2 percent this year, from a 2006 peak of 63.3 percent. Next year, it’s expected to tick up only to 55.8 percent.

Room rates fell precipitously in 2009 relative to 2008, causing an average decline of 16.4 percent in the industry’s average revenue per available room-night. PwC expects 2010 to be worse than 2009, conflicting with the Business Travel Monitor report from American Express. But, there’s room for both views. Leisure travelers will have to spend a bit more, but hotels in business-heavy markets will still win some favorable pricing.

Conventions: Look for a slight increase next year – again, relative to a brutal 2009. For the good news about the conventions, you’ll have to wait until 2011 and 2012, says Roger Dow, president of the U.S. Travel Association. Through the end of 2010, approximately 40 percent of corporate and association meeting planners, reports USA Today, are likely to postpone or sink off-site meetings for the next year.

AirTran tries to make money like an internet company

by Tom Johansmeyer on

If they can’t make money taking passengers from one place to another, maybe airlines can harness the power of eyeballs … you know, the way the web does. If you get enough people passing by a particular spot — physical or virtual — it’s possible to toss up a few ads and make some money. This is what AirTran has in mind. The airline is putting ads on the bottoms of seat-back tray tables. So, for takeoff and landing, at least, when this device is in its upright and locked position, passengers will be treated to prolonged exposure to the desires of advertisers.

AirTran plans to execute this across 138 planes within the next few weeks — it’s easy to pull the trigger when you stand to make some money by doing very little. The first ad partner, Mother Nature Network, is offering fliers the opportunity to win a cruise on Royal Caribbean. Future advertisers are expected to be travel-related, as well. The ads will be 2 ½ inches by 9 inches and will be easy to swap out, thanks to the plastic in which they will be encased. As planes are brought in for overnight service, they’ll be set up for the ads.

There is precedent for this move. For several years, US Airways has put ads on tray tops, but the rollout has been limited to only a few planes. Likewise, the cash from in-flight advertising isn’t all that high. US Airways pulls in $10 million a year from this, but it includes napkins, cups and some of the products carried onboard, not just the ads. Outside the United States, this practice is pretty common. Several airlines run ads to bring in a little extra money. Of course, Ryanair is among them, throwing ads on its overhead bins, tray tables and the outsides of the planes.

Will onboard advertising save the airline industry? It’s doubtful. The five largest airlines in the United States lost an aggregate $3.2 billion through the first nine months of 2009. They’ve tried combating this with extra fees and extremely aggressive cost-cutting, but nothing has really been successful. After all, a company just can’t cut its way to growth. The new advertising revenue could help, and it’s a revenue stream that will persist (and possibly grow) after the recession has receded.

Unruly Scot forces Boston landing

by Tom Johansmeyer on

US Airways Flight 728 was forced to land in Boston Monday night, far short of its London destination. John Alexander Murry, of Glasgow, was arrested just after 11 PM, causing the plane to stay on the ground for two hours before resuming its Philly-to-London route.

The 50-year-old Scottish man, according to prosecutors, was being “unruly and disruptive,” it seems. The crew continually asked him to stop blocking the aisle, but Murray allegedly wasn’t willing to comply. So, he’ll be telling his story to a judge in East Boston District Court, where he was scheduled to be arraigned on Tuesday. The charge is interfering with a flight crew.

According to a US Airways spokesman, the pilot chose to land in Boston and have Murray bounced “in the interest of safety.”

White House pushing for answers to airline industry woes

by Tom Johansmeyer on

The Obama Administration is taking a closer look at the airline industry with the hopes that something can be fixed. Transportation Secretary Roy LaHood is pulling together a panel that will investigate the problems the industry faces and hopefully come up with a solution. But, I don’t think anyone’s breath is being held.

The airlines are always swamped with criticism, with consumers unhappy about customer service levels, on-time arrivals and departures, the shrinking list of amenities and increasingly cramped conditions. Now, shareholders are speaking louder about declining revenues and profits. Employees are losing their jobs, and regulators and industry observers worry about continued safety violations, including drunk and distracted pilots.

Ultimately, LaHood’s goal is for the panel to put together “a road map for the future of the aviation industry.” The panel is being convened thanks in part to a push from the airline unions, the stakeholders worried most by the layoffs that have now become routine. According to The Associated Press, they believe the industry is “dysfunctional.”

Of course, it didn’t take the airlines to offer their thoughts ask for money — lots of it. They claim that radar technology that dates back to World War II isn’t as effective as a GPS-based alternative. The industry would love to see this upgrade … as long as the government writes the check. The FAA is already prepared to spend $15 billion to $22 billion on this effort, but there is an additional $14 billion to $20 billion currently sent over to the airlines. The upside would be reductions in airport congestion, fuel consumption and carbon emissions.

The Air Transportation Association (shockingly) thinks the taxpayers should pay the bill because the system would benefit the whole country. US Airways CEO Doug Parker wrote a letter to LaHood saying that the airlines simply don’t have the cash to meet their end of this.

Unfortunately, the airline industry has once again asked for money and not offered any solutions of its own. No suggestion was offered as to any of the other difficulties pertaining to the industry, and I tend to become suspicious when there is only one problem identified. It implies that everything could be fixed, in this case, with the replacement of radar air traffic control systems with GPS technology. We’re dealing with an industry that has lost credibility rapidly, so even if this one grand move would address ever gripe, large and small, a willing audience is unlikely to take shape.

[Photo by extremeezine via Flickr]