There has been a ton of noise lately (including one story by me) about the announcement earlier this year that Samoa Air is going to start charging passengers based on a combination of their weight and distance traveled. Some are calling it discriminatory or a recipe for disaster at the counter when the passengers are weighed in for their flights. Others seem more concerned that the approach may spread to other airlines or regions. As for me, I’m not worried at all. I know it won’t happen on most flights at any point in the near future.
Why? Because it actually might make sense, and we know that airline pricing simply doesn’t.
Love it or hate it, nearly all airlines price their fares based on market demand. They aren’t based on distance traveled. They aren’t based on differences in the in-flight service offered. And they aren’t based on the cost to provide the service rendered. There are even (reasonably often) scenarios where premium cabin seats can be had for less than certain coach fares. Any outsider looking in to the industry has to wonder how the airline business makes any sense at all.
And that’s the rub; the business doesn’t make any sense and there is no motivation – much less opportunity – to change it. No carrier with a route network more than a couple routes which are roughly all the same distance can get away with such an approach. Pricing JFK-SLC at 10x JFK-BOS just won’t work. And intercontinental flights would be a whole different mess.
The other argument being made is that it would cause issues at check-in as passengers are weighed. Except that already happens. Sure, only on smaller planes, but it does. And I’m still waiting to read the story about a riot at the check-in desk at one of the many commuter carriers where passengers and their bags are weighed. They have to do it so that the plane actually flies. That seems like a pretty good idea in my book. Weigh more people more often and the odds of someone freaking out about it will increase, but I don’t think we’re looking at an impending epidemic.
So, yeah, Samoa Air made some news as the first to institute such a plan. But there really is no need to worry about it spreading. It might just make too much sense for the airline industry.
It was just over two years ago, in February 2011. It was St. Valentine’s Day, in fact. Maybe that should’ve been a tip-off that there was something different about the bed and room that night. My wife and I were in Rome, wrapping up a quick weekend trip to Lecce and I had managed to book a forced overnight on the return, allowing us to visit with a friend of ours in Rome. It was there that the awesome happened.
We were staying as guests in the lodgings adjacent to San Silvestro in Capite, a minor basilica in Rome. The church itself was incredible to see and our room was also quite nice. It was certainly not ornate; actually rather sparsely furnished. The lack of furnishings actually make it appear even bigger, I suppose, as did the high ceilings.
But the best part of the story came just over 2 years later when I got an email from my friend and our host there. It turns out that Pope Francis had a close connection to an Argentine priest who was affiliated with San Silvestro. A quick check of their archives indicates that, over the years, Jorge Mario Bergoglio visited his colleague in Italy a few times and on at least one of those visits he stayed in the guest room at San Silvestro, the same room my wife and I were in on our quick visit.
And so there it is: February 14, 2011 was the night we slept in the same bedroom as the new Pope.
Another lawsuit has fallen in the lap of United Airlines and their MileagePlus frequent flyer program. This time around it is not based on elite benefits but on claims that passengers are not begin credited with the proper number of points per their contract with the company. And, I must admit, what I saw when I actually read the filing surprised me quite a bit, mostly because the claimant missed the opportunity to go after what is likely a legitimate data set and instead went with one of the more ridiculous claims I’ve heard in a while.
Hongbo Han has filed a class action claim in Illinois suggesting that the airline is shorting customers because they are credited only with the nominal point-to-point distances between two cities rather than with the actual miles flown on any given flight. Han claims that this approach violates the terms of the contract with Mileage Plus because:
Nowhere in the MileagePlus Program Rules does United state that mileage or miles credited are not actual miles flown by the member. Clause 18.1 of the MileagePlus Program Rules merely states that "[i]n the case of air travel, mileage will only be credited for flights actually flown by the member."
The filing includes a number of Beijing – Dulles flight details, noting that United routinely awards 6,920 miles for that routing despite the actual flight routing being more than that. Han’s complaint details the actual miles flown on his travel dates and suggests that United owes him those miles, plus the 25% bonus on those extra miles due to his "Premier status."
Han does acknowledge that the awarded flight miles are determined by the "purchased ticket routing" which does not necessarily match the flown aircraft routing, so it is not entirely clear that there is much of a case here, but I suppose we’ll see. The part where Han cites a USA Today "article" about points as supporting his claim through selectively quoting the content out of context also probably isn’t going to help the case.
What is most surprising to me is that Han took the rather less certain claim in filing the case, ignoring that the number of miles credited often is actually less than the distance between the airports even on the most ideal routing. The IAD-PEK flight he mentions several times in the claim only earns 6,920 points. But the distance between the two airports is actually 6,921 according to the most commonly accepted formula for calculating the distance between two points on a spheroid of the earth’s dimensions. Newark to Hong Kong is 8,065 miles. United even knows that:
And yet they routinely only ever award 8,060 miles for the trip.
There was some outrage a year ago when the points credited for each city pair changed, mostly to lower numbers. United at the time claimed that the issue was related to differing data sets and calculation methods. Ultimately they simply backed off the changes. But that seems a much more likely case of being able to actually win a claim against the company than the suggestion that actual flight miles should be used.
To be fair, I was pretty drunk on a flight back in October 2007 and during the time we spent circling over Virginia and Pennsylvania waiting to land in Newark I wrote an open letter to Continental asking to earn the points actually flown rather than just the point-to-point distance. But I also was joking. This guy filed a class-action lawsuit over basically the same thing.
We’ll see where this one ends up, but I have a feeling it won’t be in Han’s favor.
A copy of the filing can be found here.
UPDATE: It seems that United isn’t the only carrier facing this challenge. US Airways and Delta were served with nearly identical suits (citing the same USA Today story and basically just search/replace on the other salient details) as well.
When I saw the post from Chris Elliott today my first reaction was that someone must’ve hacked his accounts. Surely he cannot be out begging for his readers to donate cash so that he can continue his work, right? Seems I was wrong and he actually is.
In a post titled, "You’re going to want to see this," Elliott lays out why his services are so valuable to the traveling public (sortof) and why he’s asking for money. It turns out he’s actually the most important part of your travel experience. Or something like that. Among the bits in the post:
Consumer advocacy sites like this one are not self-sustaining. Without your help, they will end.
You know the saying, “Without a travel agent, you’re on your own.” It’s true for consumer advocates, too.
Can you really afford that?
People say, “Follow your passion, and the money will come.” But they’ve never published a consumer advocacy site.
Let’s just say advertisers don’t love my site. There are a lot of people who really want me to stop publishing. Why? Because I’m the only thing standing between them having their way with their customers.
He’s aiming to raise $10,000 in February and is almost half-way there. I mean, I get that writing a blog takes a lot of time and energy. But the outright "please give me money because you need me" thing is weird. And the egomaniacal bit about how everyone needs him is just awful.
Then again, I guess he isn’t shilling credit cards.
I have no idea why this proposed high speed rail (HSR) map for the USA is getting so much play right now, but it is. I’ve seen it all over Twitter and Facebook and it apparently has received more than 27,000 signatures on the White House site to be considered. So, what’s the problem with it? Mostly everything.
So many of the routes just don’t make any sense. The financial proposition for transcontinental rail across extremely low density areas is a horrible one. Enormous costs and near nil revenue. And it isn’t like connecting New Orleans to Miami or Orlando via HSR is going to dramatically shift the travel patterns in that region. They are still far enough apart that flying simply makes too much sense. Denver to El Paso? Maybe not so bad at 3.5 hours on the train, though flying is half that. But are there enough passengers making the trip to justify the necessary frequency of trains to supplant planes?
There are small chunks of the country where HSR makes sense. A full mesh national network, however, is a waste in many ways. Too many of the routes would still require too much travel time to supplant air travel. HSR is desperately needed in the USA. In certain areas. But this view is crazy to me. It doesn’t actually address the needs of the country from what I can tell. And going all-in with a plan like this makes it so much harder for the places it should exist to succeed. Everyone loses.
And, more importantly, ever get into a fight when you realize they paid less than you did??
A JetBlue flight en route from New York City to San Diego diverted to Denver last week when a passenger in the Even More Space section of the plane (extra legroom seats) became upset that another passenger was reseated during the flight into an adjacent seat. It seems that the passenger reassigned into the EMS seat didn’t pay the same fee as the passenger who booked it in advance. The passenger who paid became so upset, fighting with the flight attendants, that Federal Air Marshalls apparently intervened and then the plane eventually diverted to offload the passenger. No charges were filed, though the passenger had to find another way to make it to San Diego.
I hate to wonder what the passengers who actually pay for their premium cabin seats would think about me if they knew my award ticket cost so much less. Then again, I’m glad I don’t have to deal with them yelling at me, so that’s probably a good thing.
The airport of Lebanon, New Hampshire is one of many small airports supported via federal funding. The flight operations – to White Plains and Boston – are subsidized as are the airport’s general operating expenses. And, thanks to a quirk in the way those subsidies are calculated, the airport and the airline are running a massive promotion for the next few days in an effort to boost their passenger count to the next threshold. For the next 3 days fares between Lebanon and White Plains or Boston are only $12. The flights to/from White Plains also include transportation to Manhattan in that rate. So many passengers are booking that the airline – Cape Air – has added additional flights to get more passengers moving.
The push comes as Lebanon tries to pass 10,000 passenger departures for the year. That’s a tiny number of passengers and seems like a rather arbitrary threshold to strive for. But in the world of federal subsidies it makes a HUGE difference. Hitting that number should see the airport’s funding jump from $150,000 to $1,000,000. With that much at stake it is rather easy to see why they’re making the push.
I’m pretty sure another airline did this a few years ago in the UK or Ireland and they caught a bit of flak from the local subsidy provider for not meeting the spirit of the subsidy. Still, I think they got their money so hard to complain too much there. UPDATE: Here’s the story I was thinking about: Getting paid to fly, plus an open bar.
Oh, and the lines are pretty awesome. If I were not on my way to Asia right now I’d be booking these.
There are scores, if not hundreds, of "Top" whatever lists every year. Most of them are pretty much crap to me. Whether due to limited breadth of scope or obvious advertiser influence, most lists seem rather worthless to me. So I will admit that I was skeptical when my father-in-law told me that he thought of me when reading one such list in a magazine in recent days. He handed me the latest copy of Monocle and I gave the list a read. At least for the categories I can pass judgment on, I nearly universally agree.
Part of the reason the list works is because it isn’t the Top N of anything. Instead it is their 50 top things in travel. With categories ranging from the common (airport lounges and first class cabins) to the less so (in-flight blankets, baristas and bellboys) the list covers a range that makes it hard to argue too much that they might be wrong. After all, unless you’ve had Thomas Lehoux pour you a cappuccino in Paris how can you say his isn’t the best? At the same time, when it comes to choosing a long-haul aircraft (777-300), Asian Airport (Haneda) or imaginative route network expansion (Turkish) I’m finding it hard to argue many of their decisions. I’m even willing to accept that Ryu working the front door at The Peninsula in Tokyo is the best bellboy in the world, having never had the opportunity to meet him.
There are also a few of the choices I disagree with (hardly surprising, I know). Monocle chooses Copenhagen and Haneda as their favorite airport approaches. I like St. Maarten, Quito or Queenstown, at least of approaches I’ve had, for the scenery and the fun of the approach. I’d even put San Diego on the list, so long as you’re in an A seat headed in over the mountains and through downtown.
Yes, in many ways it is just another "Top" list. There is obvious bias showing in some of the choices and the categories are, in some cases, bizarre. But it was also one of the few such lists I’ve seen in recent memory which I found entertaining, reasonably well researched and hard to argue with, at least too much.
Do you have any favorite travel lists worth sharing? Let me know; I’d love to take a look at some…
I often enjoy reading economic analysis of the aviation industry. I usually feel like I’m learning something new and the nuance is generally interesting. I was quite surprised when reading an OpEd piece in the New York Times last week to uncover what would appear to be a rather ridiculous suggestion: Small and mid-size markets in the USA would benefit from foreign carriers being given permission to operate on wholly domestic routes. The basic claim is that there is insufficient competition in the market today, allowing fares to creep higher and planes to be more full. And service to small and mid-size markets is enduring the brunt of the pain; most of the "heartland hubs" (CLE, CVG, PIT, MEM, STL) have seen major capacity cuts in recent years, with their status as a hub in question. And the solution, according to Mr. Winston, is opening the skies over the USA to anyone who wants to operate here.
That is, unless policy makers do what they should have done a long time ago and allow foreign airlines, including discount carriers like Ryanair and global players like Qantas and British Airways, to serve domestic routes in the United States. Why, after all, should an industry that has ingeniously used free-market principles to squeeze the most revenue out of each middle seat be protected from competing in a real free market?
Well, we can start with the part about how that isn’t actually a "real free market" based on a lack of reciprocity in the other countries. And even if that were made available it still is an unlikely solution. Or at least not likely a good one. After all, what’s the value proposition being suggested? Apparently the key to improving the UA aviation market is to flood it with more capacity, driving down fares. But that increased supply will somehow also drive demand. Last I checked that’s not how the basic supply/demand curve works, though I will admit I dropped my Econ class after the first exam because I didn’t really like it.
There is a certain amount of discretionary travel demand which increases as fares drop below a certain threshold. I believe that number is roughly $100 each way these days. But just flooding the market with inventory to drive the fares down that low doesn’t mean that enough people will necessarily buy the seats in a volume which pays for the service. In fact, it is rare that flights operated at that discretionary demand point are profitable to the airlines at all.
Mr. Winston notes that passengers have likely saved $5bn annually thanks to Open Skies agreements between the US and Europe. Not surprisingly the airlines are trying to claw some of that revenue back, cutting service and striking joint ventures which allow them to cut costs and pool revenue and collude on prices. Are these agreements good or bad for passengers? If only measured by average fare paid then they are probably bad. But that’s not really the only metric. Look at the carriers who have gone bankrupt in the interim. For those customers – and those employees and creditors – the $5bn in annual savings means a lot of losses, not gains.
Mr. Winston also suggests that one upside of the competition is that it will help reduce unemployment:
Competition from foreign airlines would put downward pressure on wages, something that union workers may object to. But by reducing fares and expanding service, it would also increase the demand for air travel and related services — thus, presumably, creating additional jobs during a time of persistently high unemployment.
Can someone explain to me how cutting the salaries of US-based employees and creating an environment where the domestic airlines will struggle more to maintain their margins is actually going to increase the employment rates?
So if the fares are driven sufficiently low, to the point that they cannot cover the costs of operating the flights, then other airlines will want to jump in to the market, right? Certainly then Singapore Airlines will show up to operate on Sarasota – Cincinnati, making the service better and the price lower, right? That’s what is being claimed in the piece.
The reality is that opening up the US skies to foreign carriers would see those carriers do the same thing that pretty much every other start-up airline has done in recent years: cherry pick. JetBlue started by cherry picking routes between JFK and upstate New York or Florida. Virgin America has picked heavy business routes and seems to be losing a ton of capital doing so. Oh, and that’s with the fares higher now; things would be much, much worse for them were the fares depressed further.
So where can these foreign carriers make money operating in the USA? Certainly the grandmother trying to get from Sarasota to Cincinnati (his example, not mine) worried about fewer flights and higher fares won’t benefit from Qantas getting local traffic rights on their LAX-JFK flight. And even if Singapore Air could operate to Sarasota, why would they? The market demand there isn’t very high. So instead of the smaller markets getting more service the carriers who serve them today suffer from lower yields on their more profitable routes. That means they scale back the less profitable routes. So grandma gets even fewer options, not more.
Maybe easyJet or RyanAir could set up shop in the USA and make it work. But SkyBus certainly couldn’t. Maybe the others would actually serve the airports in the cities they advertise, but they often don’t in Europe. RyanAir’s idea of service Paris is an airport 60+ miles away. That’s like flying in to Trenton for service to New York City.
Competition is good. Monopolized markets are not very consumer friendly. But neither are unstable markets. A few people might win, playing in the margins, but the big picture effects of pursuing open skies on all domestic markets would be a disaster for the US economy. And for the passengers such a change supposes to help.
When American Airlines suggested that soda spilling might be responsible for the failing of seat mounts on some of their planes recently it was laughable to many, self included. The news today of a soda causing damage to a plane is rather more believable, if not equally wacky. A catering truck crashed in to an AirTran 717 parked at the gate in Milwaukee late last week. The truck hit the plane at a fuselage joint point causing notable damage to the aircraft. As for how it happened, the driver reported that a beverage can became lodged under the brake pedal, preventing the truck from stopping before hitting the plane.