In other airline and travel industry news last week…
- United Airlines reported its January 2012 operational performance and enjoyed another month of increased consolidated passenger revenue per available seat mile (PRASM) – up 8.5 to 9.5 percent. On-time performance and the number of flights successfully completed also grew about 1.1 percentage points from a year prior to 82.2% and 98.9%, respectively.
- Staying with January performance figures, Airlines Reporting Corporation (ARC) saw its strongest January in air ticket sales since 2001, realizing a 10.7% increase from 2011 and a 22.3% gain over 2010. ARC acts as a clearinghouse between travel agencies, airlines, and other companies that sell airline tickets to ensure funds are settled as expected. Adding to the good news was the fact that total transactions were up 3.2% vs. declining transaction figures the entire previous year.
- The TSA announced they will significantly expand the PreCheck trusted traveler program to include more than 15 new airports in the near future. The program is currently limited to select frequent flyers flying out of Atlanta, Dallas, Detroit, Las Vegas, Los Angeles, Miami and Minneapolis. American and Delta were the launch airlines, but the program has since expanded to other carriers. I’m hoping to soon receive notice from United that they’ll be participating at my home airport, LAX.
- Airport administrators across the country have a love-hate relationship with the newly passed long-term FAA funding reauthorization bill. While they are happy with the stability it brings, many airports are balking since the bill didn’t include an increase to passenger facility charges (PFCs), the funds they use for airport improvements. The current cap is $4.50 per flight segment, originally set in 2000, and they feel it no longer covers the increases seen in construction costs during the last decade.
- Alaska Airlines announced two new nonstops from their Seattle hub this week. Beginning June 11, they will launch daily service from Sea-Tac to Philadelphia in direct competition with US Airways, and on July 16, commence service to Ft. Lauderdale. The new Ft. Lauderdale flight will replace existing service to Miami. According to Joe Sprague, Alaska’s VP of Marketing, “By redirecting our flight to the lower-cost Fort Lauderdale airport, we can serve the same geographic area and continue to offer our customers low fares.”
- I think I need to start a new series here on Frequently Flying devoted to the airline-traveling idiot of the week. This past week, a passenger attempted to bring a hallowed-out grenade through security in his (or her – the article is gender neutral) carry-on bag. The TSA caught it (unlike previous items), confiscated it and the passenger was denied boarding. (S)he is now also under investigation by the TSA.
And finally, here are some Quick Hits:
In other airline, hotel and travel industry news this week…
- Southwest Airlines will be adding an extra row of seats on their entire fleet of 737s with the introduction of new seat cushions and seatback pocket materials. The carrier claims the new seats are more comfortable than what’s currently flying, though seat pitch will suffer an inch going from 32” to 31” to accommodate the extra row. Separately, the carrier announced it will drop service to several AirTran cities, including Allentown, Harrisburg, Lexington, Sarasota, Huntsville and White Plains.
- A woman was arrested this week after bringing a gun with her through security and onboard an American Airlines flight at DFW. What’s just amazing, though, is that TSA agents detected the gun in a scan, but the woman was able to get her bag from the conveyor belt and proceed into the terminal without being stopped. This is a clear failure of the TSA, actually, as that bag never should have proceeded to a point where she could pick it up off the belt. Oh vey!
- Hawaiian Airlines is increasing flights in Hawaii to 180 daily, up from 157 and will further expand service in Maui so it can serve as a hub for interisland flights and those to the mainland. I was surprised to read they didn’t already have nonstops between Maui and Kauai, but that route, along with flights to Hilo and Kona on the Big Island will begin on March 11. Also, during the peak summer months, Hawaiian will operate a daily nonstop from Maui to Los Angeles using a Boeing 767.
- Airbus raised the price of its A320neos by 6.1% and other aircraft by 3.9% at the beginning of the year. The company’s COO-Customers said the price increase “reflects the strong demand for our modern, eco-efficient aircraft families.” He further mentioned the A320neo offers a 15% fuel cost savings for airlines. In terms of revenue, Airbus has a 54% share of the global market to Boeing’s 46%.
- Airlines Reporting Corporation (ARC) advised the least expensive airfares processed by the clearinghouse in 2011 were bought six weeks in advance of flight time. Those fares were on average 5.8% lower than the overall average fare of $358.30. They warned that they’re not advising people to exclusively purchase tickets at that time because it’s not guaranteed that’s when the best deals are out there. Separately, ARC mentioned mega corporate travel agency air transactions (AMEX Travel, Carlson Wagonlit, etc.) dropped 4.6% in December, the biggest decline seen in 2011.
- The Occupational Safety and Health Administration (OSHA) ordered the reinstatement of a pilot who was fired from AirTran for his frequency in reporting mechanical problems. The pilot was terminated in 2007 and the carrier must now pay him more than $1 million in back wages, interest and compensatory damages. AirTran had no comment.
- Finally, President Obama signed an executive order to ease travel requirements for foreigners wanting to travel to the United States. This will entail expanding reciprocal trusted-traveler programs, adding countries to the Visa Waiver Program, streamlining visa processing, and other U.S. Travel and Tourism Advisory Board changes. The U.S. State Department issued 17% more visas in 2011 than 2010.
In other airline, hotel and travel industry news this week…
- Thai Airways will take delivery of two Airbus A380s next year and will initially operate their first whale on regional routes, of which Bangkok to Hong Kong is probable. Once they take delivery of their second A380, service to Frankfurt will begin, followed by London and Paris once additional aircraft come online.
- All Nippon Airways (ANA) announced this week they’d begin flying their internationally configured Boeing 787s between Tokyo and both Seattle, WA and San Jose, CA beginning April 1st and between Tokyo and Boston April 22nd. The aircraft will feature 46 seats in a staggered all-aisle access Business Class and 112 seats in Economy in a 2 x 4 x 2 configuration. Will United Airlines maintain their SEA-NRT daily roundtrip once that happens? I think not.
- The latest push to exclude U.S. carriers from the upcoming European Union Carbon Emissions Trading Scheme has failed. The highest court upheld the law that will begin charging airlines for exceeding their carbon emission allotment on flights to and from Europe beginning January 1, 2012. The article quotes one analyst who predicts the law will cost U.S. carriers $3.1 billion from 2012 to 2020. Where is that money going to come from? You and me. We’re now used to fuel surcharges, so why not throw a carbon footprint surcharge in the mix, too? Ugh.
- Curious to know what hotel rates look like in major North American markets between now and the end of February? Check out this summary showing the lowest and median prices for stays in three-, four- and five-star properties. Chicago, Las Vegas and Toronto have the most economical rates for three- and four-star properties. For those with deep pockets, the median rate for the Ritz Carlton Battery Park in New York is $1,023.88 per night in December.
- Airline transactions processed through the Airlines Reporting Corporation (ARC) were basically flat last month from the large travel agencies serving major corporations (e.g., American Express, Carlson Wagonlit, Omega World Travel), while tickets processed dropped for the second consecutive month from online travel agencies (OTAs) such as Expedia, Travelocity and Priceline.
- The FAA issued a final rule this week covering airline pilot flight times and rest periods. Now instead of eight hours between duty shifts, there will be a minimum 10-hour period with eight of those required to be in a hotel room. Duty times for single cockpit crews will be capped at 14-hours, but can still be extended two hours should delays strike. The new rules don’t apply to cargo operators and UPS pilots sued the FAA on Thursday for inclusion.
- Spirit Airlines reportedly made $50 million in its first year charging customers who have a carry-on bag that won’t fit underneath the seat in front of them. The fee is currently set at $30 per bag if you schedule it online in advance, $35 during online check-in or $40 if handled at the airport.
- British Airways may eventually see competition for its all-Business Class London City to New York Kennedy Airbus A318 service. A previously unnamed buyer of 10 Bombardier C-Series passenger jets has come forward saying they hope to begin similar service to New York and other locations. Named Odyssey Airlines, the carrier claims they’ll be able to fly nonstop versus the one-stop refueling British Airways currently has to do in Ireland on westbound flights. The carrier isn’t expected to get off the ground until 2014, if at all.
In other airline and travel industry news last week…
- Southwest Airlines placed a monumental order for 208 Boeing 737 aircraft this week that includes 150 of the manufacturer’s newest Max version, making the carrier the official launch customer. The first delivery to Southwest won’t occur until 2017. At list prices, the order value is $19 billion and $4.7 billion for the aircraft and engines respectively.
- In addition to his new role as CEO of American Airlines, Tom Horton has been elected Chairman of the oneworld alliance this week. He offered to have another of the alliance carriers’ executives take the post, but “the unanimous view was that the alliance would benefit greatly at this time from the continuity in our leadership that Tom represents – while at the same time underlining the commitment of oneworld to American while it undergoes its restructuring.”
- Cathay Pacific opened their new lounge at San Francisco’s International Airport, the first CX-owned facility in the United States. A grand opening reception was held this past Thursday and Loyalty Traveler has a great review of it. The carrier also introduced details of its new Premium Economy Class product that will be rolled out beginning in March next year. The seats will feature 38 inches of pitch, enhanced recline, footrests, in-seat power and much more.
- Hearings for the dispute between Qantas and the pilots union won’t occur until June next year due in part to the complexity of the matter. The carrier has until March 19th to submit key witness statements and expert evidence to the panel of “workplace umpires,” while the pilots union has to do the same by April 30th. Other hearings will take place earlier between the carrier and baggage handler and engineer unions.
- The FAA granted certification to the passenger Boeing 747-8 Intercontinental this week, green lighting deliveries to begin early next year. Lufthansa is the launch customer for the passenger version. The FAA also approved extended operations (ETOPS) of Boeing 777s to 330-minutes, up from 240-minutes this week. This will allow carriers to fly more direct routes between airports and reduce carbon emissions.
- On the passenger front, a Frenchman was arrested this week for his excessive pilfering of items from Air France First Class cabins, which he then resold online. Among the items stolen were napkins, glasses, plates and blankets. The article claims he made about 10,000 euros off the sales of the items during the past three years. I’d be lying if I said I didn’t take a glass or two over the years, but I never resell the tiny amount of stuff I’ve taken.
- Speaking of fraud, the Airlines Reporting Corporation has seen a “marked increase” in unauthorized airline tickets issued. Last year, 18 of these incidents were reported, but the figure to-date for 2011 is 113 and those tickets are valued at more than $1 million. Phishing scams are the main culprit where travel agents receive what they think is official communication from trusted GDS companies and click the link to enter their credentials.
- Finally, staying on the GDS front, Travelport will begin charging travel agencies more for services they currently use for free. Beginning January 1st, the company’s Agility program that allows agents to use certain client databases, PNR search capabilities, fulfillment services, queues and more will come with a $35 fee per terminal per month. Agency incentives for using GDS technology still remain, but new costs such as this are pointing to a changing landscape in the GDS-Agency relationship.
In other airline, hotel & travel industry news last week…
- Earlier this year Singapore Airlines announced they would be getting into the low cost carrier market using a combination of narrowbody and widebody aircraft, including refitting some of their existing Boeing 777 aircraft. Exact details have yet to be released, but it’s being reported Singapore’s advertising agency, TBWA, purchased the domain name scootairlines.com in late June. I think it’s actually a catchy name and even sounds low cost, in a good way.
- Taking a cue from Singapore Airlines and many of the hotels in Las Vegas, British Airways will be introducing a “signature brand scent” in aircraft cabins. Aromas of cut grass and ocean already exist in their lounges at London’s Heathrow airport, so if they want to maintain consistent branding, I’d imagine the same scent to be selected for the cabins. Personally, I think cut grass is disgusting.
- Marriott Hotels has released a long-awaited mobile app for iPhone, iPod Touch and Android devices. Previously only available to Blackberry users, this new app offers complete functionality to search hotels, book rooms, check existing reservations and manage your Marriott Rewards account.
- United Airlines announced last week they will deploy 11,000 iPads to all United and Continental pilots to replace paper flight manuals. Quantifying the move, United claims it will save 16 million sheets of paper and 326,000 gallons of jet fuel a year. The additional space in crew bags will certainly be welcomed by pilots, not to mention the ease of downloading updates.
- Boeing and Delta Air Lines confirmed last week that the airline has placed an order for 100 737-900ERs, valued at more than $8.5 billion. Deliveries will begin in the second half of 2013, continuing through 2018. According to Delta’s president Ed Bastian, “The 737-900ER is the perfect airplane to replace the older, less efficient airplanes in our single-aisle fleet.”
- Citing poor revenue performance and competition from US Airways and JetBlue, Delta will drop the Boston to Pittsburgh route effective November 1, 2011. Southwest Airlines will officially begin service from Atlanta February 12, 2012 with flights to Baltimore, Chicago, Denver, Houston and Austin. The carrier states this is new service and not the replacement of existing Air Tran flights.
- The Airlines Reporting Corporation (ARC) announced the first ancillary airline product was successfully processed through the firm. It was an Electronic Miscellaneous Document (EMD) for a Preferred Seat on an American Airlines flight the customer purchased above and beyond the regular airfare. ARC claims to have been ready to accommodate ancillary charges since 2010.
- Finding the cost of renting a car beyond your budget? A writer for the St. Petersburg Times found it was far cheaper to rent a U-Haul for a one-way split city trip than a car rental. He saved approximately $800 to $900 by renting a 16-foot truck after his wife made an offhand remark jokingly suggesting the U-Haul route.
In other airline, hotel & travel industry news this week…
- The Airlines Reporting Corporation (ARC) reported a 4.8% decrease in tickets processed in July through which virtually all airlines account. A total of 11.6 million air transactions were settled through ARC, the lowest figure for July transactions for the last six years. This could be evidence supporting current fears of another economic slowdown like we had in 2009.
- President Obama was gently reminded by the American Society of Travel Agents (ASTA) that travel agents still account for more than 50% of all travel sold. In a town hall meeting, Obama said when speaking about industries that have become highly automated, “When is the last time somebody went to a bank teller? Instead of using an ATM. Or used a travel agent instead of going online?” His underlying point, however, is accurate and the industry has seen incredible consolidation over the years.
- Many new or rebranded hotels will be popping up across the world. A 196-room Doubletree by Hilton opened in New Delhi, marking the first property of that brand in India. A Warsaw hotel, the Jan III Sobieski Hotel, will transition into a Radisson Blu property next month, and the Hilton Albuquerque will become a Crowne Plaza in September.
- Former CEO of United Airlines, Glenn Tilton, has been unloading shares of United Continental Holdings, Inc. Since May 5th, he sold 152,733 shares for a net gain of $3.4 million, or roughly 20% of his available holdings. He’s still serving as Chairman of United Continental until the end of 2012, but also holds the same post for J.P. Morgan Chase’s Midwest business.
- With assembly of United Airlines’ first Boeing 787 Dreamliner underway, the carrier released the configuration details noting 36 flatbed seats will be found in BusinessFirst, 63 seats in Economy Plus and 120 in regular economy. I still cringe whenever news outlets around the world title these releases as was done here: “United-Continental to offer Premium Economy on first 787.” It’s important to note the difference between truly Premium Economy service as found on British Airways, Qantas and other carriers to the enhanced legroom seats found on Delta and United. It only sets up misperception and ultimate service failures in the minds of customers who don’t know the difference.
- Subject to government approval, Australia’s Strategic Airlines will begin twice-weekly flights to Honolulu from Brisbane and Melbourne effective December 14th. The carrier is rebranding to Air Australia from Strategic which is a brilliant decision as it would cause confusion in the minds of consumers with the former name. I had originally posted they were renaming from Air Australia to Strategic and received an email from the carrier pointing out my mistake. I’m glad they did, as the representative shed some light on the original name having been used when they were a charter airline for the defense force. Anyway, service will be operated with a two cabin A330-200.
- Finally, MGM Resorts is looking for permission to blow up the unopened Harmon hotel in the Las Vegas CityCenter complex. Marred with construction flaws they’re claiming to be beyond repair, MGM has been in a legal dispute with the contractor who claims they just want to implode it, “to hide the fact that the Harmon is not a threat to public safety…” and “… to avoid adding the Harmon as additional glut to its other vacant properties in CityCenter.”