Joe Sharkey At Large

Here we go again.

From Rick Seaney, the CEO of FareCompare.com (and please note his advice about locking in fares for summer travel now, if you possibly can):

(PS–”Sticky” means the fare increase was successful).

Rick writes:

“At noon today United Airlines initiated the thirteenth attempted domestic airfare hike of 2008 – eight of the previous twelve had been widely successful.

United raised airfares across the bulk of its domestic route system in a laddered fashion from $4-$60 round-trip for leisure travelers in over 5,500 city pairs and $4-$70 for business travelers in over 9,000 city pairs.

A quick check of city pair with increases shows that the laddered hike does not closely follow flight distance as many city pairs less than 500 miles apart have a $20 or more increase round-trip. Our software shows over 20 different price increase levels in the $4-$70 range – the most we have recorded for a laddered increase which almost always has only a few price levels.

United by far has been the most active instigator of airfare increases in 2008, initiating 8 of the 13 airfare increase attempts this year – making one wonder how they racked up such a huge loss in the first quarter – certainly it wasn’t for lack of trying to increase airfares.

I found it a bit ironic the other day when the CEO of Delta “called” for airlines to raise airfares across the board by 15 to 20 percent to offset fuel costs – in days gone by there had been much ado about signaling between the “back rooms” of airlines on price hikes – now this “signaling” is apparently done via press release…

To fulfill the wishes of the Delta CEO, he needs a lot of cooperation from the other legacy airlines which means we may be in for several more active weeks of increases including the one today by United Airlines.

Unfortunately for air travel consumers this 13^th increase of 2008 puts us on pace for just under 40 increase attempts this year compared to a total 23 increase attempts (17 widely successful) in 2007 ( by far the most in 3 years prior to 2007)..

I have updated our 2008 airfare hike timeline as follows:

1.—January 3^rd, initiated by United, $10 roundtrip, successful (sticky)

2. —January 11^th, initiated by United, $30 roundtrip, unsuccessful

3. —January 17^th, initiated by American, $20 roundtrip, unsuccessful

4. 4. January 24^th, initiated by Continental, $20 roundtrip, successful (sticky)

5. —February 22^nd, initiated by United, $10 roundtrip, successful (sticky)

6. —February 28^th, initiated by Delta, $10 roundtrip, successful (sticky)

7. —March 7^th, initiated by United, $10 roundtrip, successful (sticky)

8. —March 14^th, initiated by United, $4-$50 roundtrip, successful (sticky)

9. —March 19^th, initiated by Delta, $10 roundtrip, unsuccessful

10.—March 27^th, initiated by Delta, $10 roundtrip, unsuccessful

11— April 9^th, initiated by United, $4-$30 roundtrip, successful (sticky)

12.—April 15^th, initiated by United, $10-$20 roundtrip, successful (sticky)

13.—April 24^th, initiated by United, $4-$70, pending

United has had the most success in getting other legacy airlines to come along with increases when it has laddered the increases, instead of trying to instigate an across the board $10 or $20 hike – I would suspect we will quickly see some matching by the end of the day tomorrow from other legacy airlines.

I again cannot stress enough that consumers should lock in their summer airline travel as quickly as possible, seats are going to start to get scarce and the prices are going to reflect the summer supply and demand.

I will update on any major matching or rollback activity as it occurs.” (Rick Seaney)

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Here’s an odd little study of the sort that often gets a lot of credulous media attention. It asserts that weather is the cause of most flight delays.

Well, weather is the attributed cause. But, duh, we’ve always had weather. Weather alone doesn’t explain why three out of ten flights are delayed — even as airlines build copious slack into their flight schedules to give that airplane lots and lots more time than it actually needs to try to get there without officially being marked as delayed.

An obsolete F.A.A. flight-control system is the primary reason for mounting delays. And a fix is many years off, even assuming the F.A.A. gets its act together under a new administration in Washington. So ok by me: let’s blame the weather, which at least we can see coming.

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Relatively few business travelers check bags on airlines, and fewer still check a second bag and will incur the $25 fee for that added bag that major airlines (American excepted) are slapping on next month.

On the other hand, summer is coming up and lots of leisure travelers, especially those traveling with children, do check extra bags.

Kimpton Hotels has hopped to. Kimpton said today it will give a credit of up to $25 toward the bill to guests who show proof at check-in that they incurred an additional-bag charge. The offer, good at all 43 Kimpton hotels in North America, runs from May 22 through Sept. 9.

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Domestic airline service is being severely reduced by major airlines. We all need to look harder at the numbers as capacity is shrunk and smaller planes — not just regional jets, but also Boeing 737s and Airbus A319s and A320s as well as other, older narrowbodies are being cut from fleets and parked in the desert.

Delta Air Lines today reported an amazing $6.4 billion loss for the first quarter of this year. And the airline Delta has made a deal to buy, Northwest, today reported a huge loss, $4.1 billion.

Turns out they didn’t actually “lose” anywhere near that much money, though. Let me get out my reading specs here. Delta’s actual loss for the quarter appears to have been $274 million, and Northwest’s appears to have been $191 million. That’s still a lot of money on my block.

But the two airlines managed to come up with that combined figure of over $10 billion in “losses,” which looks ever so much nicer on paper for the regulators in Washington point to to publicly justify approval of a “merger” that they were already going to approve anyway.

Here’s what they did. In identical language, Delta and Northwest said they took what they called “non-cash goodwill-impairment” charges against earnings. Those charges were $6.1 billion and $3.9 billion respectively for the quarter. This additional alleged lost dough is accounted for by the airlines’ estimates of the decline in their market capitalization caused by oil prices, coupled with a bookkeeping thing that has to do with re-valuing the companies from what they were presumed to be worth after prior bankruptcies to what they are presumed to be worth now.

But one thing is clear, major U.S. airlines are accelerating their retreat from serving domestic routes in favor of serving more international routes.

Some relevant statements from Delta’s earnings report:

—”Delta now expects system capacity for the second half of 2008 to be down 0-2% compared to 2007, with domestic capacity down 9-11%.” (italics mine)

–”As a result of the capacity reduction, the company is removing 15-20 mainline and 60-70 regional-jet aircraft from its operations by the end of 2008. Delta is continuing to evaluate the fuel and demand environment and will make proactive changes quickly if economic conditions warrant.”

—”Delta’s international expansion has contributed significantly to passenger revenue growth, as the airline has launched nearly 90 new international routes since the summer of 2005 … Delta has grown the percentage of its capacity operating in international markets from 25% in the March 2006 quarter to 33% in the March 2008 quarter. Delta expects more than 40% of capacity to be deployed in international markets by summer 2008.”

Then there are these excerpts from Northwest’s earnings report:

—”In September, after peak summer travel concludes, Northwest will reduce its scheduled domestic system capacity by approximately five percent versus the 2008 business plan. This reduction will entail the removal from service of 15 to 20 additional aircraft.”

— “For domestic routes, Northwest has participated in numerous attempts by various carriers to increase fares to reflect rising fuel costs, although most have been rolled back because some airlines failed to match.”

—”Northwest attempted to increase the minimum stay requirements to create better segmentation between business and leisure travelers. Many have been pulled because airlines failed to match.”

By the way: (My comments):

1. Airfare experts like Tom Parsons and Rick Seaney dispute airlines’ contentions that “most” fare-hike increases have been rolled back this year because some competitors failed to match. In fact, the major airlines have successfully raised fares (whether through filed fare increases or so-called fare fuel surcharges) on nearly a dozen successive occasions this year — in concert.

2. Northwest did roll back some “minimum stay requirements” two weeks ago. These were attempts to add new restrictions on nonrefundable fares to make them less attractive to business travelers by requiring extra days on the road, including Saturday night stays. However, United Airlines has now added draconian Saturday night stay restrictions on all discounted (that is, nonrefundable) fares in every market in which it has competition — which is 65 percent of United’s markets. Now that United took that bold step — and didn’t even get called for it by most of the media — other airlines are expected to follow.

The dread Saturday night stay restriction has risen from the dead.

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Here’s a good primer on the new international change fees by United Airlines and Lufthansa, thanks to this note today from Tom Parsons of BestFares.com:

(United yesterday raised its domestic change fees from $100 to $150, by the way.)

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From Tom Parsons:

“United Airlines and Lufthansa Airlines raised their international change fees from $200 to $250 on European tickets. This new increase is effective immediately, but passengers who purchased tickets on United Airlines or Lufthansa Airlines prior to April 19, 2008 should be able to make changes to their airline ticket, if need be, at the old change fee of $200,” states Tom Parsons, CEO of Bestfares.com.

United Airlines also raised its change fees from $100 to $150 per ticket to destinations within Mexico, Central America, Canada and Caribbean. Travel to deep South America such as Santiago, Chile, as well as Australia and Asia has also increased from $200 to $250 per ticket.

In just three short months, the major airlines have made so many changes that it’s becoming very difficult for the traveling public to find consistency between one airline and the other.

The differential in change fees for USA travel to international destinations vary greatly by airlines depending on the number of international airlines servicing the same markets. Consumers who have intentions of flying on the exact dates they booked, but later needs to make a change, for one reason or the other, should be careful choosing which airlines they book their ticket on , especially with those who have super high change fees.

For example, American Airlines, Continental Airlines, Delta Airlines and United Airlines offer the same airfare from Dallas to Santiago, Chile. American Airlines and Continental Airlines charge a $150 change fee, Delta Airlines charges a $200 change fee and United Airlines now charges the highest change fee of $250. If you booked your ticket on United Airlines, it will cost you $100 more in change fees, versus if you had booked with American Airlines or Continental Airlines.

Listed below are destinations and various change fees by international airlines.

Europe Change Fees: United Airlines and Lufthansa Airlines charge $250 per change; British Airways, Air France, KLM Airlines, Continental Airlines, American Airlines, Delta Airlines, US Airways and Northwest Airlines charge $200 per change.

Asia Change Fees: United Airlines charges $250 per change; Japan Airlines, Continental Airlines and Northwest Airlines charge $200 per change; Korean Airlines is charging $150 per change; Singapore Airlines, Cathay Pacific and American Airlines charge $100 per change; and Air Canada is only $50 per change.

South America Change Fees: United Airlines charges $250 per change; Delta Airlines charges $200 per change; American Airlines, US Airways and Continental Airlines are charging $150 per change.

Australia Change Fees: United Airlines charges $250 per change; Quantas Airways and Air Canada charge $200 per change; American Airlines charges $150 per change; and Air New Zealand charge $100 per change.

“Travelers who wish to stack the odds in their favor need to pay attention to many of the new rules and fees implemented by the major airlines in the past 3 months. Last summer the consumer had very simple, consistent rates and fees which varied very little between airlines. This year, if you pick an airline with the highest change fees, new baggage charges and fuel surcharges and it could end up costing you dearly,” adds Parsons.”"

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More domestic capacity reductions, this time from United. And more indications that airlines are saying that lower-fare-paying customers (meaning you and me, most of the time) can take it or leave it.

Besides adding a dread Saturday-night-stay requirement to nonrefundable fares on 65 percent of its market, and raising the standard itinerary change fee from $100 to $150, United Airlines says today that it is “further shrinking 2008 mainline domestic capacity.” By the fall, domestic capacity will be down approximately 9 percent this year, United said. This is in addition to the 5 percent reduction in the fourth quarter of 2007.

United — which reported a first-quarter loss of $542 million — also will unload 30 narrow-body aircraft from its fleet — 10 to 15 more aircraft than initially announced last month.

United is “facing the realities of the marketplace and making the tough choices: aggressively managing our capacity, passing commodity costs onto customers where possible, and identifying new revenue opportunities,” said John Tague, EVP and chief revenue officer.

That means more focus on “our best guests”—customers paying the highest fares. United said it “continues to improve the experience for its premium customers” by “rolling out several new initiatives over the next quarter” including “a new Red Carpet Club in Chicago, free wireless at Red Carpet Clubs, new information displays at all hubs, custom dining in the first and business class cabins, and upgrades to all Pacific lounges.

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And from Pro Pilot World, comes this humorous item – author and veracity unknown to me—that “has been circulating on the Internet for several years.” It has to do with airline maintenance and, while the focus is on Qantas, the item accurately points out that Qantas has never had a major accident.

“”After every flight, Qantas Airline’s pilots fill out a form, called a “gripe sheet,”which tells mechanics about problems with the aircraft. The mechanics correct the problems, document their repairs on the form,and then pilots review the gripe sheets before the next flight.

Here are some actual maintenance complaints submitted by Qantas’ pilots (marked with a P)
and the solutions recorded (marked with an (S) by maintenance engineers.

P: Left inside main tire almost needs replacement.
S: Almost replaced left inside main tire.

P: Test flight OK, except auto-land very rough.
S: Auto-land not installed on this aircraft.

P: Something loose in cockpit.
S: Something tightened in cockpit.

P: Dead bugs on windshield.
S: Live bugs on back-order.

P: Autopilot in altitude-hold mode produces a 200 feet per minute descent.
S: Cannot reproduce problem on ground.

P: Evidence of leak on right main landing gear.
S: Evidence removed.

P: DME volume unbelievably loud.
S: DME volume set to more believable level.

P: Friction locks cause throttle levers to stick.
S: That’s what they’re for.

P: IFF inoperative.
S: IFF always inoperative in OFF mode.

P: Suspected crack in windshield.
S: Suspect you’re right.

P: Number 3 engine missing.
S: Engine found on right wing after brief search.

P: Aircraft handles funny.
S: Aircraft warned to straighten up, fly right, and be serious.

P: Target radar hums.
S: Reprogrammed target radar with lyrics.

P: Mouse in cockpit.
S: Cat installed.

P: Noise coming from under instrument panel. Sounds like a midget pounding on something with a hammer.
S: Took hammer away from midget.”"

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“JoeSharkeyAtLarge.com: The blog that proudly wears a patriotic American flag-lapel pin so you won’t have to.”

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As somebody who actually went to Vietnam, I always thought those flag-lapel pins were fashion statements by guys my age who 1. Supported that war and still have fantasies of being warriors and 2. Nevertheless managed to dodge the draft and avoid service in Vietnam.

That would account for the omnipresent flag-lapel pins on the likes of George Bush and Dick “Five Deferrals: I Had Other Priorities” Cheney, as well as various other chicken hawks such as Rudy Giuliani, Trent Lott, Newt Gingrich … well, you know, the list goes on and on. Have you even noticed the relish with which these guys return snappy military salutes? What fun to play soldier! Let’s ask our men and women in Iraq how much fun it is!

Anyway, the questions have now made it clear that the patriotism of all Men is subject to question if they do not stick one of those I’m-an-American-dammit pins in their lapels.

And this blog is patriotic, dammit.

‘Ten-HUT:

Oh, I almost forgot to mention in my fervor to prove that I am a patriot. Southwest Airlines is now joining in the fare-hike fandango.

Here’s a new note from Rick Seaney at FareCompare.com

By the way, I cannot actually see Mr. Seaney, and so an unable to verify whether he is wearing his flag pin. We will take his compliance on faith. For now.

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“Southwest Airlines does not publicly file their airfare information and we normally track their changes by watching their competitor’s reaction – this has presented a problem for us because of the pace of weekly increases and the daily matching activity.

After several inquiries from analysts and reporters — we felt it was important to provide some information on the airfare increase matching activity of Southwest - the largest domestic airline. Legacy airlines routinely “tip-toe” around competitive Southwest markets when it comes to increases – both base airfare and fuel surcharges, and also are wary of increasing the cheapest promotional airfares in which Southwest has little or no fuel surcharge.

To this end — Southwest spokesperson Marilee McInnis provided us with the following statement regarding their matching activity related to the wave of legacy airline increases this year:

‘On April 10, we followed an increase by United with a very modest, mileage-based increase from $2 each way for short haul, $4 each way for medium haul, and $6 each way for long haul.

‘Last night, we instituted a fare increase that takes effect June 13 and it ranges from $3 - $5 one-way for short haul; $8 one-way for medium haul, and $10 one-way for long haul.

‘Southwest is built for efficiency and we have hedges in place, but no airline is immune to astronomical $115/barrel oil. With the volatile nature of jet fuel prices, we are taking these modest fare increases at a time when our fleet will be in its peak consumption of jet fuel during the busy summer travel season.’”

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Dis-MISSED!
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The unindicted co-conspirators … er, major airlines are slapping in another across-the-board fare hike — this one in the form of a fuel surcharge.

Fuel surcharges get added onto the bottom line, but they have more of a bite on business travelers than standard fare increases because generally, negotiated corporate discounts don’t apply to fuel surcharges.

And no, though the major airlines appear to be acting in collusion, they actually all don’t get in a room and fix prices. They don’t have to do that anymore! Haven’t you heard of technology? Don’t you know there’s a war on?

Anyway, here’s the latest update from Rick Seaney at FareCompare.com:

“”Thursday, April 17, 2008 12:15pm CDT

Starting early Wednesday morning the legacy airlines began to match the United Airlines fuel surcharge increase of an additional $10-$20 roundtrip initiated late Tuesday evening, in order:

· US Airways matched only at the $20 roundtrip level

· Delta Air Lines matched at the $10 and $20 roundtrip level

· Continental matched only at the $20 roundtrip level

· American matched only at the $20 roundtrip level

· Northwest Airlines just matched at 12:30 today

All matching was across their respective route systems, while continuing to tip-toe around low cost airline routes and the very cheapest promotional leisure airfares flown by the fewest passengers.

A few of the airlines, didn’t bother with the $10 increase level and opted for $20 roundtrip across the board. This brings the domestic fuel surcharge for many markets to $70 roundtrip from its previous high of $50 roundtrip.

I was skeptical that this increase would stick given the two scuttled attempts by Delta in late March and the base airfare increase of up to $30 that was widely matched this past week, but it seems the price of oil coupled with comfort on summer demand along with the announced capacity cuts are providing an environment where the airlines feel comfortable with this new increase – for the moment.

I will wait until early next week to call this increase a “success” leaving our 2008 airfare hike time line as follows:

1. January 3^rd, initiated by United, $10 roundtrip, successful (sticky)

2. January 11^th, initiated by United, $30 roundtrip, unsuccessful

3. January 17^th, initiated by American, $20 roundtrip, unsuccessful

4. January 24^th, initiated by Continental, $20 roundtrip, successful (sticky)

5. February 22^nd, initiated by United, $10 roundtrip, successful (sticky)

6. February 28^th, initiated by Delta, $10 roundtrip, successful (sticky)

7. March 7^th, initiated by United, $10 roundtrip, successful (sticky)

8. March 14^th, initiated by United, $4-$50 roundtrip, successful (sticky)

9. March 19^th, initiated by Delta, $10 roundtrip, unsuccessful

10. March 27^th, initiated by Delta, $10 roundtrip, unsuccessful

11. April 9^th, initiated by United, $4-$30 roundtrip, successful (sticky)

12. April 15^th, initiated by United, $10-$20 roundtrip, pending – fully matched as of noon today

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The skies are thicker than ever with the congestion of media gasbags (witness the infantile “Where’s-your-lapel-flag-pin” performance of ABC’s Gibson-Stephanopoulos at the Democratic debate last night).

But this week’s award for pure fatuous media posturing in a manner not seen since the heyday of Colonel McCormick goes to the editor of the Columbus (Ohio) Dispatch newspaper, seen here piously explaining why his worthy publication agreed to withhold news of the imminent collapse of Skybus airlines earlier this month.

Not only did the newspaper and its Web site sit on the news, the reporter dispatched to the airport was instructed not to tell people about it either. Even though they were going to be stranded.

I generally don’t pay attention to these “We here at the Bumbutt Bugle think …” kinds of dispatches from the regional fartosphere that the Poynter media site Romenesko gets all atwitter over, but this one demands a look.

For some reason that defies rational explanation, the newspaper failed to report its knowledge that the local airline was about to shut down, knowing full well that its readers who were also passengers were likely to be stuck. It seems the newspaper had inexplicably agreed to an “embargo” on the news — even though the news was available elsewhere.

Shhhh. What’s that loud hissing sound?

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I can’t say this strongly enough: If you can, plan well ahead for travel this summer because it’s going to be a mess.

Southwest and Continental both say today they’re planning domestic fleet cutbacks because of oil prices. At Southwest, which had been aggressively expanding, the CEO, Gary Kelley, says there is an “ongoing review of our flight schedule to eliminate nonproductive flying.”

Anytown U.S.A.: That means you!

Southwest also says it has reduced the number of new 737s it expects to take delivery of this year from 28 to 14.

Continental, meanwhile, says it’s shrinking domestic capacity by 5 percent. It’s looking to “reduce regional-jet capacity” (Attention: Anytown U.S.A.) and will park an additional 14 older 737s beyond the 34 737s it already said it would park this year.

Yesterday, in an op-ed page piece in the Wall Street Journal that was a remarkable effusion of blather even for that particular op-ed page, the CEOs of Delta and Northwest gave blithe assurances that the Delta devouring of … er, merger with Northwest would not hurt domestic air travel despite route cutbacks, because the low-cost carriers would expand to fill any gaps.

See Southwest (above).

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