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ATA discontinues flights, files for bankruptcy

Thousands stranded; unexpected loss of key flights, fuel costs cited

Frank Polich / Reuters Two ATA jets sit on the tarmac at Midway Airport in Chicago on Thursday. Once the nation’s 10th-largest air carrier, ATA entered bankruptcy for the second time in just over three years.

updated 1:00 p.m. ET April 3, 2008

INDIANAPOLIS - ATA Airlines shut down operations and stranded thousands of travelers Thursday when an unexpected loss of key charter flights and soaring fuel costs forced the carrier into bankruptcy.  Once the nation’s 10th-largest air carrier, ATA entered bankruptcy for the second time in just over three years. The company had more than 2,200 employees, and “virtually all” were told that their jobs were gone, company spokesman Michael Freitag said.  Many passengers learned of the collapse at ticket counters, where advisories were posted in the handful of cities ATA still served. About 10,000 passengers flew ATA each day before operations were shut down, according to the airline.

“It ruins my vacation,” said Beatrice Martinez, who was trying to reach Guadalajara, Mexico, from Midway International Airport in Chicago. “I’m in shock. So I guess I’ll try to make other arrangements. Right now I just need to get to Mexico.”  Airlines are struggling with rising fuel prices, labor strife, depressed ticket demand and heightened competition, said George Godlin, an analyst for Moody’s Investor Service.  “We’re in a perfect storm kind of environment right now,” he said.  The ATA bankruptcy generated little surprise. It was the second carrier to declare bankruptcy in just the past two weeks. Aloha Airlines filed for Chapter 11 bankruptcy protection last month, a little more than two years after emerging from bankruptcy.

“We are seeing some of the very marginal carriers shut down ... and will probably see more,” said Ray Neidl, an analyst at Calyon Securities in New York.  Analysts don’t think larger carriers are in imminent danger of bankruptcy. But many industry observers have long warned that sustained high fuel prices and a slowing economy could push larger airlines to the brink.

“I do think that this bankruptcy highlights the difficult times the industry is facing with oil above $100 a barrel,” said Jim Corridore, an analyst at Standard & Poor’s in New York. “While I don’t think that any major network airlines are currently at risk of bankruptcy due to the high cash levels they have amassed over the past few years, I think that they will certainly be weakened and unable to offset higher oil with higher revenues.”

Tough operating conditions have led to merger talks industrywide. Negotiations between Delta Air Lines Inc. and Northwest Airlines Corp. recently stalled over a dispute between pilot unions.  ATA said in a statement that the cancellation of a critical agreement with FedEx Corp. for most of the airline’s charter business left it unable to offset exorbitant fuel prices.

That agreement gave ATA a significant share of the airlift contracts to fly military members and their families overseas, ATA said. FedEx told ATA that that agreement would end when the government’s 2009 fiscal year begins in October.  “This termination is a full year earlier than the term specified in a letter of agreement between FedEx and ATA,” the airline’s statement said.  FedEx officials could not be reached for immediate comment.

ATA retrenched in 2006 after emerging from bankruptcy, focusing on an increase in its military charter business. The airline operated approximately 50 commercial flights per day, mostly between Hawaii and four west coast cities — Oakland, Los Angeles, Phoenix and Las Vegas.  ATA announced last month that it would leave Chicago’s Midway Airport, which it had used as a hub since 1992.

ATA’s bankruptcy will also affect Southwest Airlines customers. The Dallas-based airline has a code-share agreement with ATA for travel to Hawaii.  Southwest said Thursday that it immediately began rebooking passengers with dates and times as close to the original travel plans as possible. Southwest said it would give priority to customers who are scheduled to travel in the next 14 days.

“ATA Airlines has been an outstanding partner for Southwest, and we are disappointed to hear this unfortunate news,” Gary Kelly, Southwest Airlines chief executive officer, said in a press release. “We are sad to end our codeshare relationship with ATA but understand it’s extremely difficult for an airline to flourish in today’s arduous financial environment that has been plagued by soaring fuel prices.”

Republic wins bid for Frontier, beats Southwest

Denver-based carrier sold for almost $108.8 million

updated 8:36 p.m. ET Aug. 13, 2009

Republic Airways Holdings won the bankruptcy court auction for Frontier Airlines on Thursday, buying the Denver-based carrier for almost $108.8 million after rival Southwest Airlines Co.’s bid was rejected.  Southwest said its its $170 million bid was deemed unacceptable because the carrier would not back down from a requirement that its pilots and Frontier’s work out their integration before the deal would close. That was a non-issue for Republic, which has said it plans to keep operating Frontier as a stand-alone carrier.

Pilot union negotiators for Southwest and Frontier talked until late Wednesday without reaching a deal.  Denver travelers may see little change, but the deal is huge for Republic. Combined with its recent purchase of Milwaukee-based Midwest Airlines, the Frontier deal transforms Republic from a strictly for-hire operator of airplanes for big-name carriers to being in the business of competing for passengers.

Republic’s bid has it buying all of Frontier Holdings when that company emerges from Chapter 11 protection, which is expected later this year. It also agreed to waive any recovery on its $150 million general unsecured claim.  “Frontier has made impressive strides in returning to sustained profitability in a challenging and uncertain economic environment,” Republic Chairman, President and CEO Bryan Bedford said in a written statement.

Doggone airlines!

4 reasons pets shouldn’t fly

At just two pounds, Natalie Maldonado’s teacup Chihuahua weighs less than her purse. But on a recent AirTran flight from Tampa to Atlanta, as she tucked the dog under her seat, a crewmember stopped Maldonado because the pet had been improperly tagged, she says.  “I was surrounded by four agents, a gate agent, the flight attendants and another crewmember,” she remembers. “They demanded that I pay a $70 pet carry-on fee.”

That’s when her flight went to the dogs. Although she reluctantly agreed to pay the surcharge, she was walked off the flight after an attendant told her she was committing a “federal offense” by interfering with the flight schedule. She and her Chihuahua were allowed to take the next AirTran flight to Atlanta.  “The manner in which I was treated was completely unacceptable and the pet policy fee is ridiculous and excessive,” she told me.

In their struggle to turn a profit, airlines have piled on a lot of fees in the last year, from surcharges for checked luggage to extras for confirmed reservations. And just when it seemed they had found every last fee, it looks as if they’ve turned up one more: They’re looking to Fido and Fluffy for a little extra cash. Specifically, to their owners.

Maldonado’s pet problem may sound like a tempest in a teacup. But it isn’t to her. She alleges AirTran employees intimidated and humiliated her and her dog. When she tried to take names, one flight attendant told her he “wasn’t allowed to give last names.” I was sure the airline would respond to her complaint, so I suggested she send a polite letter describing the incident.  AirTran’s response? A form letter saying it regretted “to learn of your disappointment with our pet travel policy” but pointing out that pet fees are “standard” in the airline business. It promised to pass her comments about the crew’s behavior along to a supervisor.

Here’s the kicker: When it comes to pet transportation fees, AirTran is widely considered to be one of the most reasonable airlines. Its competitors, who at some point must have caught wind of the fact that close to two-thirds of Americans have traveled with their pets and exclaimed, “Ah-ha — there’s money to be made there!” routinely charge twice what this discount airline does.

Call it pet fees gone wild. To get an idea of how crazy these charges have become, consider what happened to Richard Grove, who was asked to pony up $300 to transport his 7-pound cat roundtrip on a recent Delta Air Lines flight. “That’s more than I paid for my own ticket,” he complained. Grove wrote Delta to protest the absurdity of paying more to fly his kitty than himself. The airline replied with a form letter thanking him for letting them “know how you feel.”

It would be tempting to see this as yet another airline industry money grab. But aviation analyst Michael Miller says pet transportation charges differ from other so-called “ancillary” fees charged by airlines today in a few important respects. Pets represent more of a liability than a revenue opportunity, for starters. If a dog or cat dies in the luggage hold — more on that in a minute — the company may face an expensive lawsuit. Although that’s far less likely to happen to animals in the passenger cabin, pets of any kind are essentially unwanted guests on a plane, from an airline’s perspective. Miller says airlines aren’t just “charging whatever they want” to make more money, but to discourage people from bringing animals on board.

That’s not to say there isn’t a market for airborne pets. This summer, Pet Airways, which is billed as an alternative for pets traveling in cargo holds, is scheduled to begin flying between New York, Washington, Chicago, Denver and Los Angeles.  Still, this may be one of those rare times when I agree with the airlines. If dogs and cats belonged at 36,000 feet, they would have wings. But the current system, whether it’s a moneymaker or a deterrent, is hopelessly broken. Here’s why:

Air travel can kill animals
Literally. Pets die on planes, particularly when they’re in the cargo hold. According to the Web site ThirdAmendment.com, a total of 109 animals have perished since 2005, most of them dogs. Airlines must report deaths, injuries and losses to the Transportation Department, but the numbers are thought to be artificially low, since animals that aren’t kept as pets or carried on an all-cargo or unscheduled flight aren’t counted. Continental Airlines had the most deaths (34) followed by American Airlines (21) while Delta Airlines and United Airlines tied for third, with 12 casualties. Delta lost the most pets (11) while Continental had the most injuries (14) according to the government.

The price isn’t right
Why does it cost AirTran $70 to carry a pet one way, but Delta charges $150? Does the cumulative weight of these creatures make planes consume more fuel on one airline, necessitating a higher fee? You don’t have to be an airline employee to know the answer: of course not. Then again, when have airline prices ever made sense? A seat bought two weeks before a flight costs just a few hundred bucks, but buying it the day before your trip can set you back a few thousand. Madness!

Some animals are more equal than others
Jacking up the prices for man’s best friend exposes one of the last remaining airline subsidies: lap children. On domestic flights, airlines don’t charge parents with kids under two who sit on their lap. Fido flying under the seat pays $150. Junior sitting on the lap pays nothing. Does that make any sense? No. When you account for all the extra stuff that you have to bring along, like diapers, formula, snacks and toys, lap kids account for far more weight than most pets stowed under the seats.

No self-respecting dog would subject itself to air travel, anyway
Southwest Airlines used to have the right idea. It didn’t accept live animals in the cabin or cargo compartment other than those trained to assist people with disabilities, until it reversed itself this spring, citing the soft economy.

Full disclosure, here: I am owned by two cats that I love dearly. And I interviewed Miller as he was taking his Australian Shepherd, Nikki, for a walk. So it’s safe to say neither of us have a problem with pets in general.  But flying with them is a terrible idea, at least for now. “I would never put Nikki on a plane,” Miller told me.  My cats Max and Pollux are grounded, too. At least until airlines can come up with a better and fairer way to transport their animal passengers.

Would you friend your favorite airport?

As travel volume drops, airports find new, smart ways to stay connected

The nation’s airports are feeling pretty lonely these days.  And who can blame them? As the economy worsens, the number of people traveling on U.S. airlines keeps on dropping. And if fewer people are flying, fewer people are hanging out at airports.

So it was probably a good thing that the agenda for the airport conference held earlier this week in Montreal was full of sessions on how airports can make — and keep — new friends.

Buddy up with your airport
In the old days, an airport had to be a “transportation node” with $4 hot dogs to be popular. Now, as you’ve probably noticed, many airports have gone glam and transformed themselves into community crossroads with valet parking and shopping malls dotted with wine bars, medical clinics, upscale boutiques, salons and spas. In the past, you’d never hear from your airport. Now airports are using social media tools such as Facebook, YouTube and Twitter to reach out and interact with travelers and invite them come over and hang out. Even if it’s just for a quick, virtual visit.

Myrna White, director of the Public Affairs department at Hartsfield-Jackson Atlanta International Airport, told colleagues how her airport has been successfully using Facebook and YouTube to alert travelers to everything from a recent visit by movie star Desperaux the Mouse and the opening of a 24-hour BestBuy vending machine store to a false report of an airport restroom hold-up and a warning about a pet-shipping scam.

Other social media tools, most notably the micro-blogging tool Twitter, were also promoted as great ways for airports to make friends and monitor the instant reviews travelers are sharing about airport services and amenities, such as meal choices in food courts and the condition of bathrooms.  White said the Atlanta airport is still experimenting with Twitter, but many other airports are already sending out messages, or tweeting, with gusto.

Check out our rockers
I learned that first hand on a recent stop at San Francisco International. A tweet I sent out about my long layover was responded to within minutes by my new friend, “SFOgal”, who wanted to make sure I knew about all the great art and history exhibits spread throughout the airport.

Richard Walsh from Boston Logan International Airport said his airport is also finding new friends via Twitter and Facebook.  “In the last day or so we have discussed on Twitter our cell phone lot, our parking and our rocking chairs ... We post regularly [on Facebook], share photos and even posted a video from the Brandeis University Choir who held an impromptu concert at Logan while waiting for their luggage,” Walsh said. “Things like that help humanize the airport.”

While some airport administrators don’t yet see the value of spending already-stretched staff time communicating with travelers via Twitter and Facebook, Walsh said he heard a lot of buzz about the successes of those tools in the conference hallways. “There are quite a few calls being made to the home office to discuss social media.”  So don’t be surprised if you get a Facebook friend request from your airport before your next flight.

Making friends by being green, artsy and accessible
Even without the latest Web sited du jour, airports are finding new ways to get chummy with customers.  Mirroring the actions of many travelers, an increasing number of airports are going green and adopting earth-friendly practices and procedures ranging from recycling and reducing programs to the installation of major award-winning solar, wind and bio-diesel projects.

Elsewhere, airports in cities such as Philadelphia, Jacksonville, Fla., and Asheville, N.C., are gaining new fans by expanding their exhibition and gallery programs that feature the work of local, regional and national artists. As a bonus, some airports are even making a little extra money by taking a small commission (much less than the 50 percent fee traditional galleries take) on artwork they help sell to travelers.

Eric Lipp, executive director of the Chicago-based Open Doors Organization, shared a low-cost secret for how airports can make life-long friends in the disability community, which includes 22 million people who together spend more than $13.6 billion annually on travel. “When asked ‘What would get you to travel more?,’ the top answer was ‘Staff who go out of their way to help.’ And that doesn’t really cost an airport anything,” Lipp told conference attendees.  And when thinking about travelers with disabilities, Lipp warned airports against assuming that  only means people who use wheelchairs or travel with oxygen tanks.

As the population ages, he says, many folks in the baby boomer generation are finding airports are becoming more difficult to negotiate. “Those are people who are not likely to ‘self-identify’ as having a disability,” said Lipp, so he urged airports to make new friends among the travel-savvy boomers by insuring that terminals are welcoming and accessible with easy-to-read signs and posted information about distances between gates.

Ready for anything
Sadly, this week’s airport marketing conference was taking place while the world was learning about the disappearance of Air France Flight 447.  It was more than timely that representatives of the National Transportation Safety Board (NTSB), Buffalo Niagara International Airport and Pinnacle Airlines were on hand to share notes about how they communicated with the friends and families of passengers, as well as the public, after the tragic crash of Flight 3407 in Buffalo earlier this year.  Sure, we hope airports and airlines will never need to use emergency communication plans, but it is good to know there are people who have practiced and thought carefully about what to say and do in different situations.   Even our own well-meaning friends sometimes get that part wrong.

A typo on my airline ticket

Telephone booking error with Expedia worries customer

Q: I recently bought tickets to Italy by calling Expedia. I spelled my wife's first name to the agent. That afternoon we left town for a trip. When we returned the tickets were at the front door and a confirmation e-mail was waiting. My wife's first name was spelled Crista instead of Christa.

I immediately called Expedia, and was told I should have contacted them the day the e-mail was sent to me and that there would be a $150 re-ticketing fee. After several more calls and being put on "hold" for more than half an hour, a supervisor told me that there was nothing they could do. They couldn't even change the name on the ticket.

I contacted the airline directly and they told me they would make a note on my wife's passenger record. My wife's tickets are still wrong and I'm afraid we may have a problem with our connecting airline or with customs. What can I do? — Frank Santa Maria, New Braunfels, Texas

A: Expedia should have spelled your wife's name correctly. When it was clear that the company had made an error, it should have done everything in its power to fix it instead of giving you the runaround and forcing you to deal directly with your airline.

Then again, it should have never come to this. First, why are you phoning an online travel agency to buy tickets? It may be more convenient, but online agencies are built to handle your purchases online. It's more efficient and reduces the chance of an error being introduced — like misspelling a passenger's name.

Second, you should always check your verification e-mail immediately. Expedia could have made a change to your ticket if you had caught the mistake earlier. It's essential that you review your itinerary as soon as possible. Believe me, I know. I just made this mistake and had to spend an extra day at my destination because I put the wrong date in my reservation. (See? It can happen to anyone.)

I've dealt with too many wrong-name cases to count, and here are a few things I've learned. Passengers aren't turned away at the gate because of a typographical error on their tickets. Reservations systems have limitations that sometimes truncate last names or render non-English names in funny characters. Last names and first names are frequently flip-flopped. Ticket agents, gate agents and security screeners know that, and will let you through.

I haven't heard of anyone being denied boarding because of a one-character difference in a name. I'm reasonably sure your wife would have been allowed to travel using her ticket, even if this had happened after the May 15 implementation of the first phase of the Transportation Security Administration's "Secure Flight" initiative, which requires that you provide your full name as it appears on your government-issued identification.

Incidentally, the "notation" in her reservation would have almost certainly been visible to any connecting airline. And a customs agent wouldn't even pay attention to your ticket under normal circumstances. It's your customs form and passport that matter to them.

Next time you buy tickets by phone — and I hope there's no next time — do yourself a big favor: When you offer your name to the agent, ask to have it spelled back. That way, you'll catch any errors before the transaction goes through. Once you have a reservation, it becomes much more difficult (or even impossible) to make a change.

It shouldn't be that way. In an ideal world, you'd be able to change a name on a ticket. Airlines say they can't allow name changes for "security reasons" but I'm inclined to believe it has more to do with the fact that they would lose lots of money if passengers could give their tickets to friends and family. Or resell them.  I contacted Expedia on your behalf, and it issued a new ticket with your wife's name spelled correctly.

Lost and stolen passports

No document is more important when abroad; here’s how to protect it

Traveling abroad? Your passport is the most important document on your packing list; protect it, and it will protect you. Having your passport lost or stolen could turn your otherwise flawless trip into a potential disaster. Read on for ideas about how to protect your passport — and tips for what to do if it's lost or stolen while you're traveling abroad.

Pre-trip planning
Before you leave home, make two copies of your passport identification page. Leave one copy at home with friends or relatives and carry the other with you in a separate place from your passport. It's also a good idea to bring along two or three passport photos; these should be identical 2 inch x 2 inch photographs taken within the last six months, featuring a front view of your face on a white background. Be sure you also have another form of photo ID and a copy of your birth certificate (or another document to prove your citizenship). If your passport is lost or stolen, having these will speed up the replacement process.  Also, if you plan to be abroad for more than two weeks, you may want to register with the U.S. embassy in the country you are visiting. For more information, see Travel Warnings and Advisories.

Safeguard your passport
Although you may not realize it, a U.S. passport is a hot commodity. To avoid being a target of crime, don't be too conspicuous with it. Not only do you risk having the passport stolen, but your other identification, credit cards and money as well. Take it out only when you need to provide it to officials. At all other times keep it on your person.

There are several travel accessories that can help keep your personal items safe. Companies like Magellan's and TravelSmith offer money belts that can be worn around your waist, slipped around your neck or stashed away in a pants leg. For the extremely conscientious, there are even hydro-safe wallets so you can take your passport swimming with you!

Do not leave your passport in checked luggage (but do leave a photocopy of it in your luggage), a handbag or an exposed pocket. If possible, leave your passport in a hotel safe, not in an empty hotel room. One person should never carry all the passports for an entire group. Never lend your passport to anyone, use it as collateral or ask someone to hold it for you.

How to replace a lost or stolen passport
As soon as you realize your passport is missing, contact the nearest police authorities, U.S. embassy or consulate. You will be asked to fill out a DS-11 form, which is the standard passport application form. You are not required to know the passport number or issuance date to apply for a new passport.

If the passport is still valid, you must also complete the DS-64 form to report the lost or stolen passport. You be asked to report how, where and when you lost your current passport, what you did to recover it, and what the end result was. This form must be submitted with the DS-11 application. Both of these forms can be downloaded and printed from the State Department Web site.

In emergencies, you may contact the National Passport Information Center (NPIC) for support. Call (877) 487-2778 to reach an operator Monday through Friday from 8 a.m until 10 p.m. ET; an automated system is also available 24 hours a day, seven days a week. If you want to find out the status of an application, you can now check online.

Southwest Airlines to offer service to LaGuardia

Popular low-cost carrier announces first entry into New York market

	Southwest plans to offer service to La Guardia, pushing it into one of the country's busiest airports, but also tapping into budget-conscious travelers' desire for low-cost fares during the recession.
Charles Dharapak / AP

updated 2:53 p.m. ET April 7, 2009

NEW YORK - Southwest Airlines Co. said Tuesday that it will set up shop at New York's LaGuardia Airport in June, the carrier's first entry into the major market.  The move not only helps Southwest push into one of the country's busiest airports, but it also taps into budget-conscious travelers' desire for low-cost fares during the recession.

The Dallas-based company will have eight daily nonstop flights — five between LaGuardia and Chicago Midway and three between LaGuardia and Baltimore/Washington International Thurgood Marshall Airport. A one-way ticket to BWI will run $49, while a Chicago one-way fare will cost $89 if purchased 14 days in advance.  Southwest will also provide direct or connecting service from New York to locations such as Las Vegas, Denver, Seattle, San Diego and Los Angeles.

In December Southwest agreed to pay $7.5 million for assets of ATA Airlines, including 14 takeoff and landing slots at LaGuardia, after receiving a bankruptcy judge's approval. At the time the purchase was somewhat of a departure for the airline, as it had previously steered clear of service at congested urban airports in favor of secondary airports where crews could service and clean planes and get them back in the air quickly.

The LaGuardia addition will now put Southwest in the company of low-cost carrier JetBlue Airways Corp., which also services the airport but does not provide Chicago or BWI flights from the hub. JetBlue does however offer flights to the cities from New York's John F. Kennedy International Airport. Prior to LaGuardia, Southwest's closest hub for New York-based travelers was Long Island's Islip Airport.

The carrier, which recently added service to Minneapolis, has said that it is starting flights at Boston's Logan International Airport in the fall. While Southwest is expanding into some major U.S. markets, the airline has also been cutting unprofitable routes and said it will lower capacity 4 percent this year.  Southwest currently serves 65 cities, with more than 3,300 flights a day.

Frazzled fliers see better airline service

Complaints dip thanks to more on-time arrivals, fewer bumpings

Paul Sakuma / AP Led by Hawaiian Airlines, the airline industry had its best performance in four years in 2008, private researchers said Monday in an annual study of airline quality, based on government statistics.

updated 3:45 p.m. ET April 6, 2009

WASHINGTON - Hawaiian Airlines topped an annual quality study of U.S. air carriers as the industry took some of the hassle out of flying last year and delivered its best performance in four years.   The improvement came just a year after airlines earned their worst marks for passenger complaints in more than a decade.

Right behind Hawaiian in the overall ratings of 17 airlines were AirTran Airways and JetBlue Airways, according to a study based on government statistics that was released Monday by private researchers. The legacy airlines — AMR Corp.'s American, Continental, Delta and UAL Corp.'s United — were clustered in the middle, while regional air carriers filled out the bottom rungs.

The airline industry flew fewer people in 2008 but treated them better, arriving on time more often and losing fewer bags. Passengers also were not as apt to be bumped from flights by overbooking, which was a big problem when airlines were running at or over capacity. The downside: Less flights, higher prices — some airlines now charge extra for any luggage — and fewer frills.

The study found consumer complaints dipped from 1.42 per 100,000 passengers in 2007 to 1.15 in 2008. Southwest Airlines had the best rate, only 0.25 complaints per 100,000 passengers; US Airways had the worst rate, 2.25.  Half of all complaints involved baggage or flight problems such as cancellations, delays or other schedule deviations.

Slightly better on-time performance
The average on-time performance last year was 3 percentage points better than the year before, yet nearly one-quarter of all flights were late. The study said 12 airlines improved from the previous year, but only three airlines had better than an 80 percent on-time rate: Hawaiian, 90 percent; Southwest, 80.5 percent; and US Airways, 80.1 percent.

American, the nation's largest air carrier as measured by passengers flown the most miles, had the worst record, arriving on time only 69.8 percent of the time.  The rate of passengers denied boardings — usually bumpings due to overbooking — dipped slightly, from 1.14 per 10,000 passengers to 1.1 in 2008. Jet Blue had the lowest rate for the second year in a row, 0.01 per 10,000 passengers; Atlantic Southeast Airlines, a subsidiary of SkyWest Inc. that operates regional flights for Delta Air Lines, had the highest rate, 3.89.

All the airlines did a better job handling passengers' baggage. The mishandled baggage rate fell from 7.01 bags per 1,000 passengers in 2007 to 5.19 bags in 2008.  AirTran did the best job, with 2.87 mishandled bags per 1,000 passengers; American Eagle Airlines, which operates regional flights for American Airlines, did the worst, at 9.89.

2008 airline quality rankings How the nation's 17 busiest airlines ranked in the annual Airline Quality Rating based on their 2008 combined performance in four categories: bumping due to overbooking, on-time performance, mishandled baggage and customer complaints. 1. Hawaiian 2. AirTran 3. JetBlue 4. Northwest 5. Alaska 6. Southwest 7. Frontier 8. Continental 9. AMR Corp.'s American 10. US Airways 11. UAL Corp.'s United 12. Delta 13. SkyWest 14. Mesa 15. Comair 16. American Eagle 17. Atlantic Southeast     2008 airline quality rankings How the nation's 17 busiest airlines ranked in the annual Airline Quality Rating based on their 2008 combined performance in four categories: bumping due to overbooking, on-time performance, mishandled baggage and customer complaints. 1. Hawaiian 2. AirTran 3. JetBlue 4. Northwest 5. Alaska 6. Southwest 7. Frontier 8. Continental 9. AMR Corp.'s American 10. US Airways 11. UAL Corp.'s United 12. Delta 13. SkyWest 14. Mesa 15. Comair 16. American Eagle 17. Atlantic Southeast

The improvement in lost bags may be partly due to checked-bag fees imposed by some airlines, said Dean Headley, an associate professor of marketing at Wichita State University in Kansas and co-author of the study. It's likely some passenger responded by carrying onboard bags they would have previously checked, reducing the volume of checked bags and easing the pressure on airlines, he said.

The study gave Atlantic Southeast the lowest ranking of the 17 airlines for all four categories combined — lost bags, bumping, customer complaints and on-time arrivals.  "This year's quality rating doesn't tell the full story. We have been working hard to turn our performance around," Atlantic Southeast spokeswoman Kate Modolo said, noting that the airline has improved its on-time performance and reduced its customer complaint rate in the past year.

The study, compiled annually since 1991, is based on Transportation Department statistics for airlines that carry at least 1 percent of the passengers who flew domestically last year. The research is sponsored by St. Louis University in Missouri and by Wichita State.  The improved performance was not surprising because 2007 was the worst year for airlines in the study, researchers said.

Fewer passengers in 2008
The aviation system suffered close to a meltdown in 2007 as domestic carriers recorded 770 million passengers — the busiest year for air travel since before the attacks of Sept. 11, 2001. Aviation experts said the air transport system had reached capacity.

There were 741 million passengers in 2008, and airlines are reporting weak travel demand through the first quarter of this year.  Co-author Brent Bowen, chairman of aviation science at St. Louis University's Parks College, said airlines are suffering from the poor economy despite lower oil prices.

"It remains to be seen if the airlines can benefit from lower oil prices alongside a severe drop in passenger revenue this year," Bowen said. Headley urged Congress to take advantage of this "breathing room" to move forward on a system that would replace decades-old radar technology with satellite-based technology.

That new system is forecast to increase air transportation system capacity by enabling planes to fly closer together and more directly to their destinations, saving time and fuel.  "It's crazy to think we can keep going the way we were going with the volume of planes we have in the air," Headley said.

Four recent airline blunders

From the bedroom to the bathroom, it’s clear carriers still don’t get it

By this point, neither you nor I are living under the misconception that corporate America cares what we think of them — but even so, the airline industry presents a special case. America is currently up in arms over $165 million in AIG bonuses, but that's small beans for airline execs, and for travelers this sort of outrage is nothing new.

The airline industry has been flying and profiting from the airways (which are owned by the American people, after all) while gouging and feeing and baiting and switching and offending and ignoring and fleecing and blaming us for years. AIG may be the latest and biggest fish to play this game, but I think they could still learn some tricks from the airlines.

I won't go into the obscene executive compensation going to folks who all but destroyed their companies (the airlines perfected this one years ago), or taxpayer bailouts (some airlines are repeat offenders here). Hitting much closer to home, here are four recent signs that the airlines still don't get it, and probably never will. Counting down, let's start with ...

4. Spirit Airlines' boorish and tone-deaf ad campaigns
Speaking of obscene, Spirit Airlines is notorious for its suggestive and demeaning ad campaigns — to the point where even its own employees finally had to speak out. (The last straw was Spirit's recent move to slap Bud Light advertisements on flight attendant aprons.)

It's not the first time Spirit has had to back off an ad campaign — the company had to pull its "Hunt for Hoffa" ads in response to public backlash a few years ago. And in 2007, the airline initiated its now-infamous MILF ads (which putatively stood for "More Islands, Lower Fares"). At the time, an airline spokesperson claimed ignorance of the more suggestive significance of the acronym (which I will not reproduce here for obvious reasons). Honest mistake? Maybe, but that's hard to believe given the tenor of other, equally provocative campaigns. You can check out some of Spirit's sordid history at the following links:

• Spirit attendants, pilots decry suggestive ads

• Airline's 'MILF' promo not what you think

• Spirit Airlines — that's low advertisement

At the time of writing, it appeared that Spirit had dropped these sophomoric campaigns, but I spoke too soon: Within an hour after filing the story, I received a promotional e-mail from Spirit touting its "We're Having a Threesome Sale — Fares From $3 Each Way." Which turns out to offer a perfect segue to ...

3. The most recent deep discounts on the major U.S. airlines
The most recent fare war, in which all the major airlines participated, included advertised sale fares as low as $27. If you got one of those fares, more power to you, but the fact is that in the end the airlines must rob Peter to pay Paul. That is, they entice us with $27 fares, get the press to go gaga over it (and I don't except myself from this group; just writing about it here will likely encourage them, no matter the context), and enjoy the subsequent rush to the Web to research and purchase fares.

But the number of seats available at the lowest fares tends to be extremely limited, and eventually someone has to pay for these loss leader prices. It's an easy guess who that is: us again! It all comes back around in higher fares on monopoly routes, on full planes, during peak travel times, in fees and more. Airlines, please listen to your customers and give us consistent, transparent, sensible pricing already. Purchasing air travel in the public skies should not be like playing the lottery.

2. The hidden fees gambit continues
While some industry experts believe that the airlines have finally exhausted all potential new fees, Spirit Airlines (again, oof) found a few that no one else had thought of — mainly because, well, they're illegal.

Last summer, Spirit instituted three very sly fees:

• A $4.90 "passenger usage fee," which was essentially a charge to, well, fly

• A $2.50 "natural occurrence fee" to offset the cost to the airline of natural occurrences, including rain; this would be more accurately named the "weather fee"

• An $8.50 "international service recovery fee," which was to pay the certain expenses associated with flying internationally

The Department of Transportation quickly shot the fees down, as they did not meet the requirement that any fees applying to all passengers must be included as part of advertised fares (such as fuel surcharges, for example). Spirit relented briefly, and has dropped the weather and international service fees.

This month, however, the company reinstated the Passenger Usage Fee after making a small, savagely clever change to its policy — the fee is waived if you purchase your ticket at the airport ticket counter. Do you know anyone who has purchased a ticket at the airport ticket counter in the past 5 to 10 years? I don't think I do.

1. An airline actually considered charging for toilet access
I'm almost speechless on this one (although the chattering class has been anything but); European discount airline Ryanair held serious, high-level talks to consider charging passengers to use the toilets.

It turns out that there is no legal requirement for airlines to provide a loo onboard — so of course some greedy numskull figured this out and came up with the idea to charge for it. With all the handwringing the airlines engaged in over the weight of DVD players on airlines, you would think just the weight and hassle of having heaps of coins onboard to make change for passengers would nix this one.

With offenses from the bedroom to the bathroom, the airlines just don't get it, and there is little evidence they ever will.

Our own worst enemy

5 types of travelers that are killing tourism

	Most of us pack sound judgment and good manners when we go on vacation. But there are a few annoying exceptions, and they’re hurting travel in ways you probably don’t know.
Franck Prevel / AP file

Are tourists destroying tourism?

The ones Bob Menconi saw on the lido deck of the Celebrity Solstice were — one heaping plateful at a time.

At the megaship’s all-you-can-eat buffet lunch, they piled slices of pizza, grilled fish and coconut Flan on their trays like it was their last meal. “I was amazed,” says Menconi, who owns a framing business in Ft. Lauderdale, Fla. “It was to the point where it was falling off the side. It was the dumbest thing.”

Dumb on more than one level, actually.

It’s not just that the passengers had as many shots at the buffet line as they wanted. It’s that the morsels going overboard collectively represented a titanic waste of resources, which must have been more than a little embarrassing for a cruise line that prides itself on its environmental record. Not only did these passengers leave their manners and common sense on shore; they were also selfish gluttons.

What is it with travelers today?

• Rachel Harrison recently overheard a guest at a Tampa, Fla., hotel order a veggie burger “medium rare.”

• Michael Dillon saw one airline passenger drop her bags off at a check-in kiosk and walk away. “She thought someone would pick them up for her,” he remembers.

• Michelle Bell heard a passenger ask why it was necessary to stay on the ship in Antarctica. “Couldn’t they just get a hotel?” she wanted to know.

You can’t make this stuff up. But are these tourists sinking an entire industry? The correct answer is: they are — and they aren’t.

No, not all travelers. Most of us still pack our sound judgment and good manners when we go on vacation. And most of us will continue to do so, especially after reading this column.

But there are a few annoying exceptions, and they’re hurting travel in ways you probably don’t know. Here are five types of travelers who fit that category:

1. The stupid tourist
With the possible exception of a Caribbean all-inclusive resort, you won’t find a more impressive collection of brain donors than on a cruise. Never mind the buffet line. Once these passengers set sail, they belly up to the bar, get bitzed, and act like ... well, drunken sailors. Some of them jump overboard, too. Our friends at the Web site Cruisejunkie keep a list of cruise and ferry passengers who fell off a ship. Since 1995, there have been more than 100 documented cases. How many of them involved passengers having one drink too many and then doing their best Kate Winslet impersonation? Like you have to ask.

2. The rude visitor
I live in Orlando, which has more than its fair share of discourteous tourists. These vacationers cut in line, drive like teen-agers and the words “please” and “thank you” aren’t in their vocabulary. When I lived in the Florida Keys, the locals had a saying: “If it’s tourist season, why can’t we shoot them?” But one city has figured out a better way of punishing the unmannered masses. Bars and restaurants in Venice have three price lists: one for locals, the other for visitors and a third for rude tourists. So if you’re Italian, a croissant and a cappuccino might cost €3.50, but if you order in English, and are impolite, you have to pay €7.

3. The obnoxious American
Let me be clear on this point: I’m an American, and I love my country. My countrymen? Not necessarily. I’ve spent nearly half my life overseas, and I’ve seen some of my fellow citizens behaving so boorishly that I cringed when someone asked where I was from. (“Me? Uh, I’m Canadian.”) Obnoxious Americans are loud, demanding, arrogant and insensitive to local culture. I was relieved to learn we aren’t the worst. A recent survey found that the French, Indian and Chinese tourists ranked even more obnoxious than us, while Japanese were considered the best tourists.

4. The absent-minded vacationer
These are the ones who get left behind at the gate because they didn’t know they needed a passport for an international trip. They don’t call to confirm their flight and miss it because it was rescheduled. They don’t pay attention to where they parked their car at Disney World and then wander around the property after dark, hoping to stumble upon their rental. I’ll be the first to admit that I’ve forgotten where I parked or didn’t call to confirm my flight. And I think there’s something about being on the road — you’re out of your element — that turns you into a little bit of a ditz. The problem is when you try to blame everyone but yourself. I’ve seen tourists accuse their travel agents or cruise line of ruining their vacation because they weren’t told about a visa requirement. But securing the proper paperwork is solely your responsibility.

5. The time traveler
They call flight attendants “stewardesses” and ask what’s on the in-flight menu. The answer, unless they’re sitting in first class, is a glare — and peanuts. Time travelers are either unaware that the airline industry was carelessly deregulated in 1978, or they’re in denial. These passengers don’t make themselves look bad as much as they point out how far we’ve fallen since then. Only the most rabid airline apologist would argue that flying is a better experience today than it was three decades ago. Time travelers are a constant reminder of the sad decline of America’s airlines. But if you’re an optimist, they also help us see what air travel could one day become again.

So how are these tourists damaging travel? When an inebriated tourist trashes your cabin on a spring break cruise, you can put a price on it. But when that passenger goes ashore in a foreign port and makes all Americans look like xenophobic elitists, it costs us in ways that are difficult to quantify, but no less real.

People who make unreasonable demands on the system raise the cost of travel for everyone, because we’ll be paying for the army of lawyers the travel company must hire to defend itself from frivolous claims.

And passengers who live in the past? They interfere with an airline’s ability to make money in the future, because they raise our expectations, and hopes, for a better travel industry. How dare they!

4 airline booking secrets that save you money

Take advantage of deeply discounted ‘consolidator’ fares

If my e-mail inbox is any gauge of the current climate, travelers are looking for ways to cut costs on airfare. I’ve gotten lots of questions lately about “consolidator” fares.

Do the bucket shops of yesteryear — which release blocks of tickets at deep discounts — still exist? Are they different from what you can find online yourself? The short answers are yes and yes — but as with any fare, you’ll always trade something for the price break.

First, some background: Shortly after airlines deregulated in 1978, it became clear to them that advertising discounted fares made it easy for competing carriers to beat prices. To fill up less popular flights, airlines began quietly selling discounted seats through consolidators. You’d often find these fire-sale fares advertised in the windows of storefront travel agencies, or even at small grocery stores and bodegas.

Consolidators have come a long way since then. Airlines now see them as a reliable way to sell a percentage of fares, and negotiate annual contracts, establish revenue targets, and tightly control sales through a specific kind of booking class. The rates are also known as “private” or “bulk” fares. Consolidators have contracts with airlines to sell private fares at lower prices than those that are published.

They usually can’t — or won’t — sell tickets straight to you, but instead offer them through travel agents (including sites like Travelocity) or through specialty companies like the ones that advertise in Sunday newspaper travel sections. Domestic consolidator fares have been all but completely squeezed out by travel Web sites, and because airlines are decreasing their service (mostly domestically), you’ll find even fewer of them available for U.S.-only flights, while tickets to Europe are still a good bet.

How to get a consolidator fare
It’s best not to try to secure these fares on your own. Through years of relationship-building, a travel agent will have a much better grasp of which consolidators are good and which aren’t. If something goes wrong with a consolidator ticket you’ve bought through a trusted online or traditional agency, the agency should absorb your loss.

According to Simon Bramley, vice president of flights for Travelocity, the company’s guarantee to “make things right” would function this way, buffering you from a possible loss.

When to find them
Look for a consolidator fare when you’re traveling coach internationally, you’re traveling last-minute, or both. Because consolidators don’t actually buy the seats, they’re usually granted a window of opportunity either early in the booking process (to ensure that a minimum number of seats get sold) or later (to compensate for unsold seats). Your travel agent can even find last-minute business-class seats for up to 50 percent off.

Ask about restrictions
You may think that because you’re getting a bargain-basement price, your ticket will be nonrefundable and nonchangeable — a heavily restricted “use it or lose it” fare. That’s not always the case, but you should ask your agent about the various restrictions. Two restrictions you’ll always find: You’ll never be able to get an upgrade using frequent-flier miles, and you won’t be able to pay to upgrade to a different, less restricted fare class.

Should I still comparison-shop?
Of course. Many airlines now offer low-fare guarantees. Even if you find an “exclusive” consolidator fare elsewhere, the airline will likely match or beat it. And there’s always the option of searching online fares offered by consolidators but having your travel agent book the ticket for you. An elusive fare can be well worth the wait.

Airlines see losses continue to pile up

Even usually profitable Southwest booked them during the fourth quarter

updated 7:40 p.m. ET Jan. 29, 2009

ATLANTA - Deep capacity cuts, checked bag fees and aggressive fare sales couldn't stop the airline industry's bleeding from the impact of bad bets on fuel hedges and the drop-off in demand due to the weak economy. After more carriers posted losses Thursday, the total fourth-quarter red ink for the top nine U.S. carriers by traffic rose to $4 billion.

As business and leisure travelers across the country watch what they spend amid the worst financial crisis in decades, the first quarter of this year, which ends March 31, will add more losses for several airlines, but the industry is eyeing profits after that, if fuel prices remain low and the economy doesn't weaken further.

In the meantime, the belt tightening at the nation's air carriers will continue.

"If I had to sum up the principles that we've been adhering to and that will guide our future decisions, they would sound a lot like something your parents or grandparents probably taught you: Don't buy things you can't afford, don't borrow money you can't pay back, don't agree to things you don't understand, and finally, if it doesn't seem right, it probably isn't," Alaska Air Group Inc. Chief Executive Bill Ayer said Thursday.

The Seattle-based operator of Alaska Airlines and Horizon Air reported that it swung to a $75.2 million loss in the fourth quarter. Houston-based Continental Airlines Inc. said it lost $266 million in the quarter. Tempe, Ariz.-based US Airways Group Inc. posted a $541 million quarterly loss and New York-based JetBlue Airways Corp. disclosed a $49 million pretax loss for the final three months of 2008.

Those reports followed losses posted earlier this week and last week by Atlanta-based Delta Air Lines Inc., Orlando, Fla.-based AirTran Holdings Inc., Chicago-based UAL Corp. — parent of United Airlines — and Fort Worth, Texas-based AMR Corp., parent of American Airlines. Not even usually profitable Southwest Airlines Co. was immune, as it also posted a fourth-quarter loss.

Advance bookings aren't encouraging, at least over the next two months, for several carriers.

Continental said in a regulatory filing that international bookings over the next six weeks are lagging behind last year's pace. Alaska Airlines' mainline occupancy rate based on advance bookings for March is down 3 percentage points year-over-year. Its parent blamed the fact that the Easter holiday falls in April this year.

Beyond that, airlines see brighter skies as they unwind fuel hedge contracts they entered into last year while oil prices were at record levels only to be stuck with them when oil prices made their dramatic slide. And they say the capacity many airlines have shed should pay dividends in the long run.

US Airways Chief Executive Doug Parker said the capacity cuts "have significantly softened the blow from the economic downturn that we as an industry now face."

The airlines have been trying to preserve cash to weather the economic crisis. Several also have said they will cut more capacity this year.

Some of the highlights of the fourth-quarter results reported by airlines Thursday:

Alaska Air Group's loss for the October-December period was equivalent to $2.08 a share, compared to a profit of $7.4 million, or 19 cents a share, in the same period a year earlier. Excluding special items, it posted a fourth-quarter profit of $16.4 million, or 45 cents a share. Analysts polled by Thomson Reuters expected Alaska Air Group to post a loss of 4 cents per share in the quarter, excluding one-time items. Revenue slid 3.1 percent to $827.1 million.

Continental's loss in the quarter was $2.33 per share, compared with a loss of $32 million, or 33 cents per share, a year ago. Excluding net charges of $170 million, Continental's loss would have been $96 million, or 84 cents per share. Analysts expected a loss of 89 cents per share. Revenue slipped 1.5 percent to $3.47 billion.

US Airways' loss in the fourth quarter was $4.74 per share, compared with a loss of $79 million, or 87 cents per share, during the same period in 2007. Revenue was $2.76 billion, down 0.6 percent from the fourth quarter of 2007. Not counting special items such as $234 million in paper losses on fuel hedges, US Airways said it would have lost $1.93 per share. Analysts expected a loss of $2.15 per share.

JetBlue said its fourth-quarter pretax loss compared with a pretax loss of $3 million a year earlier. The 2008 period included a charge of $53 million on the value of auction-rate securities, which rapidly lost value as the credit crisis spread. Excluding the charge, the airline said it would have reported pretax income of $4 million, compared with a pretax loss of $3 million in the 2007 fourth-quarter. Operating revenue rose 10 percent to $811 million. The airline said it will report net results in its annual 10-K, which it plans to file in mid-February, after evaluating the tax status of a special charge.

Is 'merger mania' set for a revival in 2009?

International Herald Tribune December 12, 2008 By Kyle Peterson and Jui Chakravorty Das

9 reasons ’09 will be the year of the ‘naycation’

If polls and experts are right, next year will be rough on the travel sector

If 2008 was the year of the staycation, then ’09 is bound to be the year of the naycation.  As in, nay — we’re not vacationing.  The conventional wisdom about travel is that it will slip by just a few percentage points next year. But the unconventional wisdom — supported by several troubling surveys — points to a much bigger drop.

A recent Allstate poll found nearly half of all Americans plan to cut back on travel in 2009. An International SOS survey says slightly fewer of us — about 4 out of 10 Americans — are reducing their international trips next year. And a Zagat survey says at least 20 percent of us will travel less in ’09.  But that’s just the half of it. I’ve been talking with people in the industry, who tell me — direct quote here — that travel is poised to “drop off a cliff” in January. In other words, people are telling pollsters one thing but making other plans.  Specifically, they’re making no plans.

Here are nine reasons why 2009 will probably be known as the year of the “naycation” — and what it means for you.

The economy sucks
Andrea Funk, the owner of an apparel company in Olivet, Mich., has canceled her travel plans for 2009. “I think we need to see the stock market stabilize and the economy get better before we go anywhere,” she says. At a time of great economic uncertainty, she and her family believe a vacation is a bad idea. “We’re hoping none of use lose our jobs,” she says. However, on the upside, a bad economy often translates into vacation bargains.

Vacation budgets are history
Daniel Senie, a network consultant in Bolton, Mass., used to travel to the Caribbean a few times a year to go diving. “We stopped a few years ago to save funds for a kitchen remodel,” he says. He never looked back. “For me, avoiding air travel is my response to the lousy service by the airlines and TSA mock-security. The airlines have provided worse and worse service in an attempt to hold down prices, in a race to the bottom. Airplanes are dirty, amenities have been cut, and employees are upset all the time.” What does that mean for those of us who still want to vacation? That any vacation budget (even a small one) might take you far next year.

We’re tired of being lied to
People are forfeiting the great American vacation because they can’t stomach the travel industry’s lies anymore. Take the airlines, which earlier this year imposed a series of new surcharges in response, they said, to higher fuel costs. When fuel prices fell, what happened to the fees? They stuck around. “Jet fuel prices have gone from over $140 per barrel in August to under $50 in November, but airfares in October were actually up 10 percent,” says Chicke Fitzgerald, the chief executive of roadescapes.com, a site for road trips. “Americans are definitely voting on that trend with their wallets.” How so? By either vacationing close to home, or just staying home altogether.

We’re a little uncertain about 2009. With the economy slowing down, uncertainty is keeping a lot of would-be vacationers at home. Melanie Heywood, a Web developer in Sunrise, Fla., says her business has slowed down, and she also recently learned she was pregnant. “We really need to save our money as much as possible,” she says. She’s hardly alone. Consumer confidence fell to its lowest level in history in October before rebounding slightly last month. If you don’t fear 2009, though, you might be able to snag a low price on a vacation.

This year’s staycations were boring
No two ways about it, staying close to home and “exploring” the local attractions can be dull, dull, dull. (Unless you live in a place where people like to vacation.) Might as well stay at work. Or take a long weekend and just chill out at home. Which is exactly what more Americans are doing.

The deals are good — but not good enough
I spoke at a travel marketing conference last month, and heard the same refrain over and over again about “rate integrity.” The idea is that if you cut your rates, people will not value your product. Instead, travel companies are offering other enticements, such as two-for-one deals or free room nights. But travelers are holding out for better bargains. “Looking to 2009, it’s likely that we’ll see all kinds of hotel deals to draw consumers in — discounts and special packages,” says Joe McInerney, the chief executive of the American Hotel & Lodging Association, a trade group for hotels. Yes, but when? McInerney believes the deals won’t fully materialize until after the holidays.

People just don’t feel like traveling anymore
Maybe it’s a little vacation fatigue, but there’s a sizeable group of people out there who just don’t want to travel. “I don’t feel any need to go anywhere,” says Gayle Lynn Falkenthal, a communications consultant in San Diego. “Even if someone dumped $50,000 into my bank account, I’d find better things to do with it.” This indifference to vacationing — particularly to traveling far away — can be traced back to the hassle and high prices of travel during the last few years. Simply put, it’s payback time.

The travel industry still doesn’t get it
Some industry segments, such as tour operators, obviously understand that customers want a reasonable price and good service. The most reputable operators, led by the U.S. Tour Operators Association, are offering incentives such financing plans and guaranteed rates. On the other hand, airlines are responding to the lousy economy by boosting fees and surcharges and raising fares instead of raising their customer service levels. That’s going to keep a lot of travelers home in 2009.

We’ve made vacation plans — for 2010
Already, 2009 is being called the “lost year.” That’s what many travelers are treating it like, too. “We have decided to put off our travel,” says writer Brenda Della Casa. “We fully intend to head back to Mexico or Europe — in 2010. Hopefully, things will be more stable.” For the contrarians among us, “discovering” 2009 may mean uncovering a lot of opportunities to see destinations you could have never otherwise afforded.

So how does this affect your next vacation? If you’re brave enough to take one, expect lots of too-good-to-be true deals. Even the smallest vacation budget might be rewarded with a wonderful experience.

Put differently, 2009 may be the year of the “naycation” for everyone else — but for you, it could be the year you take your best vacation ever.

Continental to test flight powered by biofuel

Airlines experiment with alternative fuels to help deal with volatile prices

updated 1:03 p.m. ET Dec. 8, 2008

HOUSTON - Continental Airlines Inc. said Monday it will test the use of a biofuel blend to power one of its jetliners on a flight that won't carry any passengers.  Airlines are studying the use of alternative fuels to help deal with volatile jet fuel prices that spiked to record highs this summer, and to reduce emissions of greenhouse gases.

Continental said the plane on the Jan. 7 flight in Houston will use a special blend of half conventional fuel and half biofuel with ingredients derived from algae and jatropha plants.  The airline said it would be the first flight by a commercial carrier using algae as a fuel source and the first with a two-engine aircraft, a Boeing 737-800.

Houston-based Continental said its partners on the project include jet maker Boeing Co., which helped form a group in Seattle to look for sustainable fuels that don't use farm land to produce the ingredients.  Other partners include CFM International, an engine maker and joint venture between General Electric Co. and Snecma; a Honeywell technology development unit; and oil providers Sapphire Energy and Terrasol.

Next month's test flight will be operated by Continental test pilots who plan to run one engine on the biofuel blend and take it through power accelerations and slowdowns, in-flight engine shutdown and restart and other maneuvers. The airline said it expected a post-flight analysis would show that the lower-emission biofuel plan can substitute for regular fuel without loss of performance or safety.

An average Continental flight burns 18 gallons of fuel to fly one passenger 1,000 miles.  Alternative fuels for aircraft have been studied for years, but the push got new urgency this year when jet-fuel prices hit record highs in July. Fuel is one of the largest expenses for an airline.  Some fuels such as hydrogen lack the acceleration of traditional kerosene-based jet fuel and would require planes be outfitted with massive fuel tanks.

Airlines in South Africa use a coal-based fuel blend developed by petrochemicals group Sasol that doesn't require altering aircraft engines or other parts. Air New Zealand is testing jatropha fuel in a 747 jetliner.  Several U.S. companies are developing synthetic fuels, including American Clean Coal Fuels of Portland, Ore., Baard Energy in Vancouver, Wash., and Rentech Inc. of Los Angeles.

Airlines ready to slash more flights

Slumping economy slams travel demand; Delta hints at more job losses

updated 4:32 p.m. ET Dec. 2, 2008

ATLANTA - Executives of major U.S. airlines, already seeing signs of slumping travel demand, said Tuesday they were ready to cut more flights, and Delta hinted at more job losses as the carriers jockey to survive the deepening recession.

U.S. airlines have been helped by a sudden drop in jet fuel prices, and they already cut capacity this fall to further reduce costs and drive up fares.

But traffic has fallen even faster than the supply of seats, especially since the stock market went into a nosedive.

"October was a bang-up month, almost unexplainably strong," said Southwest Airlines Co. Chairman and Chief Executive Gary Kelly. "The trends changed in November."

Delta Air Lines Inc., the world's largest carrier, said it will reduce overall capacity another 6 to 8 percent next year. Delta and its Northwest Airlines unit will cut U.S. capacity 8 to 10 percent.

In a memo to employees, Delta CEO Richard Anderson and President Ed Bastian said they are analyzing the impact of reduced flying on jobs, and "as in the past, we will offer voluntary programs to adjust staffing needs." They did not elaborate.

Earlier this year, Delta sharply cut U.S. capacity and aimed to cut 2,000 jobs, although more than 4,000 workers took voluntary severance. Delta and Northwest have 75,000 employees.

American Airlines and its feeder carrier American Eagle plan to cut capacity 6 percent next year, with an 8.5 reduction in U.S. flying by American itself, said Beverly Goulet, treasurer of parent AMR Corp.

Even Southwest, which saw the pullback of other airlines as an opportunity for growth, is cutting capacity. Kelly said Southwest would drop unprofitable routes and trim first-quarter capacity 4 to 5 percent, although that's slightly less than the airline's previous goal of a 5 to 6 percent reduction.

Analysts have already factored in some further cuts in capacity. But Ray Neidl, an analyst for Calyon Securities, said "demand seems to be falling a little more than expected."

Recession hurting demand
The economic slowdown has hurt demand for the airlines' most lucrative seats.

United said it would reconfigure its international planes to cut the number of premium seats by 20 percent while adding seats in coach. Continental Airlines Inc. said it too was seeing weaker demand for first- and business-class seats on international flights, which had been a relatively strong part of the business.

Executives speaking at a Credit Suisse investor conference in New York also vowed to raise more cash to head off a financial crisis.

Kathryn Mikells, the chief financial officer of United parent UAL Corp., said the company will raise about $300 million in cash during the fourth quarter. The company said Monday it plans to sell up to $200 million in new stock partly to pay down debt.

Falling oil prices help airlines by lowering the price of jet fuel. But some carriers have been forced to put up new collateral on hedging deals that they struck to protect themselves from high-priced fuel.

Delta's Bastian said his airline hasn't been able to fully realize the benefit of the steep drop in fuel prices because of bad bets on hedges when oil was more than $140 a barrel over the summer.

Based on the current price of oil around $47 a barrel, Delta is expected to be forced to put up $1.1 billion in cash collateral at the end of December to cover those hedges. Every $5 drop in oil prices means Delta must put up another $130 million in collateral, Bastian said.

Last week, UAL said it expected to record $370 million in hedging losses in the fourth quarter. The company mortgaged aircraft leases to get more breathing room on cash reserves from lender Chase Bank.

Despite all the gloom about travel demand, airline stocks rose Tuesday on another decline in oil prices. The benchmark price of oil for January delivery fell $2.32 to settle at $46.96 a barrel on the New York Mercantile Exchange.

Shares of Delta rose 51 cents, or 6.4 percent, to close at $8.47; UAL shares gained 70 cents or 7.8 percent, at $9.64; AMR added 42 cents, or 5.2 percent, at $8.45; Continental rose 91 cents, or 6.6 percent, to $14.78; and Southwest picked up 40 cents, or 5 percent, at $8.33.

Spirit is gone — and so is my money

Two buddies planning on a bachelor party in Sin City are dealt a curveball

travel troubleshooter

By Christopher Elliott

Travel columnist

Tribune Media Services

updated 9:49 a.m. ET Dec. 2, 2008

Christopher Elliott Travel columnist • Profile • E-mail

Q: After much work and desperation and reading your column faithfully, I have come to the conclusion that you are my only hope.

A few months ago, just before my wedding, my fiancé and his best man went to Las Vegas for his bachelor party. He had purchased a package deal through Yahoo Travel that included a stay at the MGM Grand hotel and round-trip airfare on Spirit Airlines for both of them.

But when they got to the airport, there was no one at the ticket counter. After a little bit of research, they learned that there were no flights to Vegas on Spirit Airlines that night. When my fiancé contacted Yahoo from the airport, they informed him that Spirit Airlines had stopped flying from Atlanta to Las Vegas. He was never told that or sent an e-mail regarding that fact.

He was told to pay for a flight on AirTran Airways to Las Vegas and they would secure his return flight. They told him that he would need to contact Yahoo Travel when he returned to get reimbursement for the plane ticket. They paid $539 for two one-way tickets.

Once he returned, he contacted Yahoo by phone and was given a case ID number. They told him to e-mail the information to them and they would get back in touch with him. He did just that. No one got back in touch with him, so he called again. Yahoo told him that they had to wait for Spirit Airlines to return the money to them so that they can return the money to us.

It's been four months, and there's no sign of the money. We could use whatever help and advice you can give to us.
— Christina Stansbury, Columbus, Ga.

A: Yahoo Travel should have told your fiancé about the flight changes.

When he made his reservation, he gave the site his e-mail address and phone number. If he received an e-mail confirmation from the online agency the first time, then it's reasonable to assume the second email — the one saying his flight to Las Vegas had been canceled — made it as well.  Unless it was never sent.

I'm willing to bet it wasn't. That's because the domestic airlines, which are expected to cut their routes by an unprecedented 15 percent in the coming months, have been less than forthcoming about their flight changes. I can't really blame them; it's easy to forget something when you're slashing your schedules every day.

All of which doesn't absolve Yahoo of its failure to notify your fiancé of his flight changes. Yahoo, whose reservations are handled by Travelocity, has the means to track schedule changes. Why are you working with an online travel agent in the first place? One reason is that you'll be taken care of when something goes wrong.

Of course that doesn't absolve your fiancé of not checking with Spirit or Yahoo to confirm his flight. If he had bothered to call a day before he was scheduled to leave, Yahoo could have found another flight and prevented him from having to buy a new ticket.

At a time like this, when airline schedules are in a constant state of change, my advice is not just to call 24 hours before departure, but also two weeks before you're scheduled to leave. Why? Because if your flight is rescheduled and you don't like it, you can ask for a refund and still qualify for a reasonably-priced advance purchase fare. Try doing that a day before you leave, and you're talking big bucks.

Yahoo was wrong to make you wait until it received its money back from Spirit. I've heard of airlines taking two to three months, and in extreme cases, up to a year, to issue a refund. Yahoo and Travelocity don't want to give an airline an interest-free loan, but why should their customers?

You might have appealed directly to Travelocity when your first complaint got you nowhere. I contacted Yahoo Travel, which got in touch with Travelocity, which in turn offered your fiancé an immediate refund of the AirTran ticket.

Christopher Elliott is the ombudsman for National Geographic Traveler magazine and the host of “What You Get For The Money: Vacations” on the Fine Living Network. E-mail him at celliott@ngs.org .

Thanksgiving air travel projected to fall

Upcoming season will see decline in passengers for first time in seven years

updated 6:11 p.m. ET Nov. 12, 2008

NEW YORK - The number of passengers traveling with U.S. airlines over the Thanksgiving holiday period will drop about 10 percent from last year as a weak economy hits consumer spending and carriers cut back flights.  Thanksgiving remains the busiest travel time for U.S. airlines, but the 2008 season will see a decline in passengers for the first time in seven years, according to the Air Transport Association of America (ATA), the trade body for the leading U.S. airlines.

The ATA said on Wednesday the number of passengers will drop from about 26 million to roughly 24 million over the 12-day Thanksgiving travel season from November 21 through December 2.  Thanksgiving itself is celebrated on November 27 this year.

The trade association expects the three busiest travel days will be Sunday, November 30; Monday, December 1, and Wednesday, November 26, respectively. Planes are projected to average close to 90 percent full on these days.  ATA Chief Executive James May said the weaker economy is hurting consumer spending and airlines have cut back their schedules in response to economic pressures.

This could help ease congestion. "With fewer flights operating, that should provide some relief to the air traffic management system," said May.  "Make no mistake — the airports will be busy and many flights will be 100 percent full," added May.  The ATA said it is hoping the U.S. Government will once again open up military airspace to help further ease congestion.

Flying traitors: Why air travel is un-American

Divisive industry is unfair, and it's time travelers do something about it

	Air travel is "profoundly inequitable, it is becoming increasingly unfair, and yes, it is time to do something about it,” writes columnist Christopher Elliott.
Suebsak Siriwadhna / featurepics.com

What’s so fair about flying?

If you said “nothing,” you’re right. Air travel has become so Balkanized in the last few months that flying is — and I want to be careful not to overstate this — almost un-American.

But let’s stay positive for a second. Airlines remain egalitarian in a few small but important ways. Everyone on a commercial air carrier — from the triple-titanium elite flier to the prisoner shackled to the back row of economy class — shares a plane. They breathe the same recycled air and experience the same intolerably long delays. As travel blogger Pam Mandel observes, “it’s awful for everyone.”

So we’re suffering.  But are we suffering the same? No.

And here’s how air travel has taken an incomprehensibly sharp turn for the worse and thrown social equality and many of the values we hold dear as Americans out the proverbial cabin door: It is profoundly inequitable, it is becoming increasingly unfair, and yes, it is time to do something about it.

This is how I see it: On the one hand, airlines have added perks for their best customers. For example, American Airlines earlier this fall introduced priority check-in, priority screening lanes and special boarding lanes for its best passengers, following the lead of several other big airlines.

Maybe you’d expect that from a legacy carrier like American. But when Southwest Airlines followed suit a few days later and added priority security lanes for its frequent fliers, it prompted my colleague Janice Hough to invoke George Orwell’s classic “Animal Farm” and conclude that some passengers were more equal than others on a one-class airline like Southwest. I’m inclined to agree.

At the same time, air carriers have stripped away amenities that used to come with every ticket. Checking a first or second bag used to cost nothing extra, and on longer flights, even folks in the back of the plane could expect a meal without having to pay for it. No longer. Now, airlines are charging $15 for the first checked bag and as much as $50 for the second one. Even little things like advance seat assignments cost money — unless, of course, you’re a card-carrying frequent flier.

This kind of discussion makes the privileged among us profoundly uncomfortable. In fact, I’ve taken a lot of hits from elite travelers for having the nerve to ask whether frequent fliers are ruining air travel. But most of them missed my point. I don’t have a problem with the pay-more/get-more model. It’s the idea that the good people sitting in steerage class asked for less — or even deserve less — that is profoundly unsettling.

I’m also a little troubled by the apparent hypocrisy of critics who insist they’re entitled to gourmet meals and lie-flat seats because they paid more for their ticket. That’s complete nonsense. They didn’t pay more — their employers did, and only because the airlines figured out a way of extorting more money from them. Or maybe their corporate travel manager couldn’t negotiate her way out of a paper bag. Or both.

Many travelers use highly addictive frequent flier miles to pay for upgrades. Airline loyalty programs, as everyone who reads this column already knows, is the greatest fraud perpetrated on the traveling public. Ever.

There's good news for these coddled airline passengers who disagree with my perfectly reasonable arguments. There is no shortage of bloggers, journalists and airline experts who sincerely believe it’s your right to be treated like royalty when you fly while the masses behind the curtain suffer unspeakable indignities. Why not read their puff pieces instead of my column?

But enough about me.  Back to the question at hand: How is air travel un-American, and what can we do to fix it?

Three recent examples come to mind:

You have the right to sit down and shut up
Apparently, large sections of the Bill of Rights are suspended at 36,000 feet. Crewmembers stop us from assembling in certain areas of the plane (after all, we could be planning another terrorist attack while we’re waiting for the bathroom) or even recording the flight on videotape. That’s right, it looks like there’s no freedom of the press at cruising altitude, at least not for one blogging grandmother who was detained after refusing JetBlue Airways’ demand to delete her lawfully recorded tape. What’s next, locks on our seatbelts?

Your laptop — and the data on it — is ours
Remember the Fourth Amendment to the Constitution — the one about unreasonable searches and seizures? It doesn’t apply at the border. The government can ask for your password and hold your laptop or personal digital assistant for as long as it wants. That attitude seems to extend to the plane and the airport, too. Airlines want to block certain Web sites that contain objectionable material. It’s only a matter of time before airports start barring access sites with content they disagree with. Oh, wait — they already do. I was logged on to one airport’s public Wi-Fi network last week, and my own blog was blocked.

They wouldn’t even treat animals like this
We like to say that we don’t permit “cruel and unusual punishments” (See the Eighth Amendment for details) but the fact is, prisoners of war are often treated better than airline passengers. They have more personal space. They have access to food and water. The airline industry has fought all proposals that would force it to offer even the most basic amenities to its passengers, including successfully lobbying to overturn a New York state law that would have compelled it to offer food, drink and fresh air to passengers on a delayed flight. And that crack about animals having it better than economy class passengers? That’s very close to the truth. The Federal Aviation Administration has strict guidelines about the transportation of live animals but is strangely quiet when it comes to the comfort of human passengers. Maybe some animals really are more equal than others.

So how can air travel become more American? First, at the risk of repeating myself, I’m not objecting to the over-the-top amenities like ergonomic leather seats or in-flight showers. If there’s a market for it, then why not? But there ought to be minimum standards set by the government that require air carriers to treat their customers better than cargo.

Likewise, a flight shouldn’t begin or end with a customs agent stealing your password and confiscating your computer. The fix might be Sen. Russ Feingold’s just-introduced Travelers’ Privacy Protection Act, which would put an end to that nonsense.

Start treating passengers — all passengers — with dignity and respect, and I think everything else will fall into place. And then our domestic airlines will be something all Americans can be proud of.

America’s most reliable airlines

Common wisdom says that buying cheap is more expensive in the long run

	Rank No. 1: On-time flights score: 14; canceled flights score: 15; reports of mishandled baggage per 1,000 passengers score: 9; complaints per 100,000 enplanements score: 15; J.D. Power and Associates customer satisfaction ranking score: 9; asset-to-liability ratio score: 2; and overall score: 93.
Matt York / Associated Press

When it comes to air travel, consumers probably expect this to be true. After all, budget carriers aren't always considered smooth-running operations offering a consistent level of service. But according to our analysis of the nation's 10 major airlines, discount carriers actually rank first in reliability.

Southwest Airlines, the no-frills discount carrier, handily beat the competition in most of the categories we judged. JetBlue, also considered a discount airline despite its plush leather seats and individual television sets, ranked third just behind Continental Airlines. Fourth place went to AirTran, another budget carrier.

Alaska Airlines, Northwest Airlines, American Airlines and Delta Air Lines were solidly average performers. United Airlines and US Airways landed at the bottom of the list.

Methodology
To judge reliability in the airline industry, particularly at a time when carriers are responding to oil prices by slashing capacity and raising prices, we looked at six different factors for 10 major airlines. (Frontier Airlines a budget carrier, was omitted because we could not obtain certain figures for each year.)

We collected five years' worth of data relating to on-time arrival, cancellations, complaints and mishandled baggage from the Aviation Consumer Protection Division of the Department of Transportation. Delays and cancellations, the factors most likely to ruin a flier's day, were given double weight.

To better gauge the overall flying experience, we included J.D. Power and Associates' consumer satisfaction rankings from 2005 to 2008. These surveys reach more than 9,000 travelers annually and ask participants to rate factors like cost and fees, in-flight services and check-in.

Finally, because solvency is critical during these uncertain times, we considered an airline's asset-to-liability ratio for the latest quarter.

The results
When all of these figures were combined, the discount airlines consistently rose to the top. For each of the years we studied, Southwest's flights were punctual more than 80 percent of the time; the average was 76.8 percent. Alaska Airlines gave the most dismal performance, with only 74.6 percent on-time flights.

In terms of canceled flights, Southwest reigns yet again. The carrier canceled an average of 0.65 percent of its flights over the five-year period, compared with the worst airline, American, which canceled an average of 2.4 percent.

AirTran, another budget carrier, had the fewest reports of mishandled baggage — a contentious issue now that airlines are charging as much as $50 to check regular-sized luggage. In 2007, AirTran had about four reports of mishandled baggage per 1,000 customers. The worst-ranking airline, US Airways, had 8.5.

While consistency in these categories is important, customer service is an equally powerful factor. Sam Thanawalla, director of the global hospitality and travel practice at J.D. Power and Associates, argues that reliability means "delivering on the promises." This includes getting passengers to their destination in a timely fashion, but also cultivating a workforce that puts the consumer first and can resolve problems or complications quickly.

Thanawalla says that JetBlue and Southwest, along with Continental, have excelled at this approach. Consumers have routinely rewarded these airlines with high rankings in annual J.D. Power satisfaction surveys.

Long-term reliability
While the budget carriers currently have a "reliability" edge over their competition, the industry is transforming swiftly under the pressure of oil prices, and long-term reputations hinge on how companies respond now.

William Swelbar, research engineer at Massachusetts Institute of Technology's International Center for Air Transportation, views the change as invigorating for the troubled industry. This year alone, 30 airlines around the world declared bankruptcy, and major airlines posted record losses.

Swelbar's hope is that airlines will restructure their business plans for long-term stability instead of building them around cheap oil. This means cutting capacity and charging customers for services that were once free; even the budget airlines have begun charging as much as $30 for seats with extra leg room.

"That's the sensitive part of all of this," he says. "It's going to move the consumer's expectation needle."

But, he says, consumers have been on the winning side of a deregulated airline industry for the past 30 years. When adjusted for inflation, airfares are now 50 percent cheaper than before deregulation.

"Consumers have won big on price," he says, "but they've paid on the reliability side."

Swelbar envisions a day when the increased fees will reflect an actual premium of service, not just desperation to break even or turn a small profit.

"Any call to arms for the industry to look at itself and begin to put the consumer first," he says, "would be a terrific first step."

5 reasons to travel during the 2008 holidays

An early present: This fall and winter season could be the best ever

Think traveling this fall and during the holiday season will be unbearable? Think again?

Here’s a holiday travel forecast you probably won’t read anywhere else: look for lower prices on everything from air fares to hotel room rates, smaller crowds and a more pleasant overall experience.  Am I nuts? Couldn’t I just write the same story everyone else is? You know — the holidays are coming! The holidays are coming! They’ll be busier than ever this year. So here are a dozen tips on how to stay sane, but really, you’re better off just staying home.  That’s how the facts seem to line up. Consider:

Airlines will pare their domestic flights by 8.1 percent during the last four months of the year. That’s a total of 25 million fewer seats, according to an estimate by OAGback Aviation Solutions and reported by my colleague, Msnbc.com columnist Rob Lovitt. It’s the biggest pullback since 2001 — and perhaps ever. Drivers are making similar cutbacks. Since last November, Americans have driven 53.2 billion miles less than they did over the same period a year earlier, according to the Transportation Department. That’s a bigger drop than the one in the oil crisis of the 1970s, which precipitated a decline of 49.3 billion miles. As a result, Labor Day travel by car was basically flat compared with last year, and car rental rates have remained more or less unchanged since 2007. Hotels are feeling the pinch, too. They were about two-thirds full, on average, during the second quarter of this year, down by more than two percent from the same period a year earlier, according to Smith Travel Research. The only bright spot — at least for the hotels — is that they’ve been able to squeeze more money out of each guest. Average room rates are up by almost four percent for the same period. That’s bad news and more bad news for travelers. Panicky hoteliers are cranking up the fees and rates on their remaining guests. That’s no fun.

You don’t have to be a snarky travel columnist to connect the dots and conclude that this is going to be the worst fall for travel ever and that the upcoming holidays will be completely unbearable.   But that would be nonsense. The fall of 2008 and Thanksgiving, Christmas and New Years might be among the best for travel in recent memory. Certainly, the best since 2001. It could even be the best ever.

I’ve come to this contrarian conclusion after talking with a lot of folks in the travel industry and with you, dear travelers. You are not barricading yourselves in your bedrooms like extras in a zombie movie. You have no problem scheduling a trip during the holidays. No, you are actually looking forward to this fall. Here are five reasons why I am, too:

Behold, a president bearing gifts
Regardless of who wins the presidential election in November, travelers can probably expect a change for the better. Practically speaking, it could mean lower fuel prices (after all, both candidates say they want to lessen our dependence on foreign oil) and a higher dollar (both candidates have pledged to control spending and jumpstart the economy). Author and blogger Janet Groene is upbeat about travel after the presidential election, adding that her optimism holds true, “no matter who wins.” I agree.

A more civil flying experience
Air travelers are adjusting to the historic airline cuts by flying less. So it’s unlikely that flights will be more crowded than ever. In fact, it’s possible that more air travelers will forfeit their trip than the airlines expected, which could translate into smaller crowds at the airports and possibly even lower fares. There’s some evidence this is already happening. Expedia says in certain markets, prices are dropping precipitously. Fall fares between Denver and San Francisco are down 32 percent and those between Denver and San Diego are down 30 percent. How about airline delays? “Passenger trip delays will remain at the same levels as 2007,” Lance Sherry, executive director for the Center for Air Transportation Systems Research at George Mason University, told me. That’s not exactly good news, but then again, at least it won’t be any worse.

Some cruise prices are sinking
The cost of a Caribbean cruise is falling to levels not seen since 2001, according to Sharon Emerson, a Seattle travel agent and blogger. Why the slide? She speculates that there are overcapacity issues — too many berths, not enough cruisers — or that it’s just the slow season in the islands. Either way, there are deals to be had. “For instance, Royal Caribbean has cruises from under $700 to the Caribbean,” she says. “Carnival has many under $600.”

Smaller crowds overseas, too
The fall and holidays were already a great time to take an overseas vacation — it’s a slow time of year, and most of the rest of the world has never heard of Thanksgiving — but this year it could be even better. “There will be a lot less traffic to international destinations,” predicts Michael Stone, a travel consultant with Gestation, Inc., in Fort Lauderdale, Fla. “This will likely mean better service as employees in international destinations will be happier to see American travelers.” His personal favorite is the Caribbean, but my colleague Tim Leffel favors Central American destinations like Panama, Ecuador and Belize.

Cheaper hotel rooms? You got it!
John Boyd, the founder of MeetingWave, an online networking service for business executives, believes hotel room availability and pricing should improve as occupancy rates slide later this year. “Both corporations and individuals are cutting back on travel,” he says. “They should find better deals at domestic travel destinations such as Las Vegas, Miami and New York.” But what about the holidays, when hotels are typically sold out? They’ll still be full, but the chances of finding a last-minute deal through a site that sells distressed room inventory, like Hotwire.com or Priceline.com, will probably be better than it’s been in years. So spending a long New Year’s weekend at a bed and breakfast (New Years Day falls on a Thursday in 2009) may not be out of reach. 

Now let me connect a few dots. During the last four months of 2008, prices for almost every travel product could drop. There will be fewer passengers crowding the airport terminals, fewer motorists on the road and fewer people on cruise ships. What’s not to love about that?

This reminds me of the fall of 2001. Right after the 9/11 terrorist attacks, travel fell off a figurative cliff. I flew a week after Sept. 11, and truth be told, I haven’t has such a good flight since airline deregulation. I was one of only a few guests in my hotel. The staff and flight attendants were friendly. What a pleasure.   The fact that people are comparing this fall to 2001 gives me hope. It should give all of us hope.

Airline shrinkage to make seats scarce this fall

Searching for the sweet spot in a contracting industry

As airlines reduce flights and park planes in an attempt to stem losses, passengers this fall could be in line for more inconveniences, fewer options and less service.

If you’re thinking of flying this fall, you may want to keep that number in mind. Why? Because, according to data compiled by OAG back Aviation Solutions, that’s how many fewer seats will be available on domestic flights during the last four months of the year compared to the same period a year ago.

The data represent an 8.1 percent drop in domestic seat capacity and an 8.9 percent decline in flights. Together, the numbers represent the biggest contraction in the industry since 2001 and a potentially game-changing challenge to both the airlines and their passengers.

For the airlines, it’s all about parking planes, cutting flights and slashing unprofitable routes in an effort to raise fares. For passengers, it comes down to whether they’re willing to pay more for fewer services and greater inconvenience. And with the unofficial end of the summer travel season just a week away, the calculus for fall travel could hardly be any more convoluted.

Depending on your preferred metaphor, it’s either the air-travel equivalent of a massively multiplayer online (MMO) game — air travel really is its own universe — or just one big game of chicken.

Death by a thousand cuts?
“There are all these thousands of changes all over creation, but it’s not clear to the public what the changes are,” says industry consultant Bob Harrell. “People are used to choices — flights, timing, number of stops — and they’re finding that those choices are no longer there.” The first to go were flights to vacation destinations, such as Las Vegas and Orlando, where intense competition kept leisure fares artificially low. Now, cuts are being implemented nationwide, as airlines trim service to small and medium markets. On September 2, ExpressJet will cease its branded operations altogether (while continuing to fly Continental Express routes), eliminating service to Sacramento, San Antonio and 22 other cities. On September 8, Midwest Airlines will stop flying to 11 cities, ranging from San Diego to Baltimore, and scale back its West Coast service from non-stops via MD-80 to Boeing 717 flights with a stop in Kansas City.

Other airlines are implementing similar, albeit less extreme, cutbacks. Based on previous announcements, the Big Six legacy carriers will likely cut anywhere from 10 to 14 percent of available seats on domestic flights by the end of the year, and even Southwest and JetBlue have scaled back their expansion plans. Whether the airlines can shrink their way to profitability remains an open question, but it’s all but certain that they’ll continue to rewrite the nation’s route map until they figure it out.

“It’s like a chess game,” says David Beckerman, OAG’s vice president of analytical  services, and travelers will have to scramble to keep up with the changes: “As the cost-demand landscape changes, it influences the planes the airlines operate and where they can use them. They’re trying to find that sweet spot"

Tough times — but good deals
That spot, however, is a moving target, and while the airlines are desperate to hit it, they also run the risk of overshooting it. Tighten the supply too much, raise prices along the way — be it through higher fares or add-on fees — and, at some point, buyers sour on the whole proposition. With fares already 15–20 percent higher than they were a year ago, that may already be happening.

Last week, the airline industry trade group Air Transport Association (ATA) released its Labor Day forecast, projecting that air travel over the eight-day period between August 27 and September 3 would decline by 5.7 percent from last year. A few days later, AAA released its own forecast, predicting a 4.5 percent drop over the holiday weekend.

Faced with clearly softening demand, “the airlines’ knees are knocking,” says Tom Parsons, publisher of BestFares.com. Surfing his site, he reels off fall (non-holiday) fares — San Francisco-Fort Lauderdale for $250 roundtrip, Boston to Dublin for $567 roundtrip, including fuel surcharges and taxes — that suggest the airlines are starting to get worried about flying with empty seats.

Needless to say, you won’t find such deals for every date and destination — and none during the holidays — but they do suggest that finding the sweet spot between the supply of seats and the demand from those who’d fill them is more challenging than ever. (Oil prices that have gone from $80 a barrel to $145 to around $115 over the last year certainly don’t help.)

“I’m not sure we’re out of the woods yet,” says Parsons, citing the possibilities of both more cutbacks and more deals. “Some destinations will have great airfares; some will have reasonable airfares; and some you’ll just want to avoid.”

Where do we go from here?

Although the airlines always pull down service in the fall, the current situation is, in the words of industry observers, “extreme,” “unprecedented,” and a sign of a fundamental shift in the industry. Often considered the unofficial end of the summer travel season, September 2 may also signal the start of a new era. Among the changes:

• Fewer options, more inconvenience: In addition to fewer flights overall, many travelers will find that non-stop service is either prohibitively expensive or non-existent. Instead, the prognosis is for more connecting flights — and the long layovers and lost luggage that come with them.

• Less service: Fewer flights mean fewer employees — and the job cuts go beyond pilots and flight attendants. According to ATA, the U.S. airline industry will shed 36,000 jobs this year, a drop of between 12 and 15 percent, and second only to the cuts made after September 11. Most of this year’s cuts will take place post-Labor Day, which means even less service in the terminals, on the phone and in flight.

• Fewer delays: Maybe it’s irrationally exuberant, but with fewer planes in the sky, on-time performance will likely improve (at least until winter weather kicks in). Unfortunately, there’s a flip side: when things do go bad, and flights get canceled, there will be fewer options for rebooking.

• No relief from à la carte fees: Despite continuing concerns, there are indications that the airline industry is actually reaching an equilibrium vis-à-vis oil prices and profitability. Lower oil prices ($115 this week), previous fare increases and the proliferation of add-on fees for every service and amenity are all helping staunch the flow of red ink. Even so, and regardless of where oil prices end up, the airlines aren’t about to give up the billions they expect to bank from à la carte pricing.

Whether all of the above constitutes a new era or merely another turn in a highly cyclical industry is ultimately a matter of degree. On the one hand, the idea of frequent flights to diverse destinations at mass-market prices will probably go the way of free meals in coach. On the other, and despite the increased cost and inconvenience, millions of people will continue to fly, wincing as they pay more to fly in a smaller, potentially more stable industry.

“The airline industry has always been very cyclical,” says Dick Gruentzel, vice president of administration and finance at Tucson International Airport. “It’s easy, in the short run, to say, ‘Wow, this [situation] is never going to change,’ but it always does.”

In other words, the chess game — and the game of chicken that goes with it — will continue.

Airline Fees: Who's the Stingiest?

JetBlue Airways

Curse you, JetBlue. That, at least, has been the flying public's response to news that the airline has found another long-taken-for-granted amenity and started charging for it. Passengers who want to curl up with a blanket and pillow on their cross-country JetBlue flight now have to pay $7 for them.

But it's hardly a surprising move. All the airlines are struggling under soaring fuel costs (United alone says it will pay an extra $3.5 billion for gas this year) and looking for other places to make up the revenue so they won't have to raise fares any higher. Free meals have largely become a relic of flying's more glamorous past; most of the airlines now charge for checked luggage; and many of them have, more quietly, raised the fees they charge for making a change to your nonrefundable ticket. USAirways, which just last Friday became the first airline to start charging for soft drinks, says such fees will bring in $400 million to $500 million a year. "Customers understand the cost of doing business with these fuel prices," says USAirways spokeswoman Michelle Mohr. "They don't expect a free hot dog at the ballpark."

But what can they expect? It's hard to say, since the fees vary from airline to airline and are changing almost weekly. TIME.com has done a survey to see who is charging for what. With the caution that things could change even before your next trip to the airport, here's a run-down of the current status of passenger fees on nine major carriers, ranked from the friendliest to the stingiest:

1. Southwest
The one major airline that is bucking the trend of increasing fees, Southwest still doesn't charge for checked bags (up to two), nonalcoholic drinks, blankets or making a change to your flight. The discount airline has even launched an ad campaign to brag about that fact. Its new slogan: "Fees don't fly with us."

2. Virgin America
In these straitened times, a pretty good deal: your first checked bag is free (the second is $25), drinks and pillows are free too, and the fee for changing flights is a relatively nominal $75.

3. Delta
Among the major carriers, Delta has done the best job of holding the line on fees: no charge for the first checked bag ($25 to $50 for the second), free drinks and blankets, and a flight-change fee that hasn't increased from $100.

4. JetBlue
If it doesn't turn up the air-conditioning and force you to buy that blanket and pillow, the airline is still relatively flyer-friendly: no charge for the first checked bag, free soft drinks and unlimited snacks, and a $100 change fee.

5. Continental
No charge for the first checked bag ($25 for the second), and it's holding the line on the other freebies, like drinks and blankets, as well as still offering free meals like sandwiches, burgers and pizza. But it recently raised its change fee from $100 to $150.

6. Northwest
Recently increased the fee for making flight changes to $150, to go along with a $15 charge for the first checked bag ($25 for the second). Nonalcoholic drinks and blankets are still free.

7. American
Also hitting you up for $150 to make flight changes, and charging $15 to $25 for the first and second checked bags, with soft drinks and bedding still gratis.

8. United
A similar package: $15 to $25 for checked-bag fees; $150 to make flight changes. Plus an extra wrinkle: if you get to the airport early and want a confirmed seat on an earlier flight, United will charge you $75 — better than the $150 change fee, but higher than the $50 most other airlines charge.

9. USAirways
Broke new ground last week by starting to charge for all beverages: $2 for a soft drink (or even a bottle of water); $1 for coffee or tea. Checked bags cost $15 and $25; flight changes are $150.

Survey: Public divided on in-flight cell use

Nearly half oppose, but nearly half of younger generation support it

updated 1:50 p.m. ET, Thurs., Aug. 7, 2008

WASHINGTON - The friendly skies are not so affable when it comes to using cell phones on commercial airliners.

Nearly half of U.S. residents say they would oppose allowing cell phone use aboard flights even if there were no issues with the phones interfering with aircraft communications systems, a Department of Transportation survey finds. About four out of 10 residents said cell phone use should definitely or probably be permitted.

But, as any parent of a teenager could have predicted, there is a cell phone generation gap. Among residents aged 65 and older, about 60 percent oppose cell phone use in flight, while less than a third support it.

For people aged 18 to 34, nearly half support cell phone use in flight, while a little over a third oppose it, the survey found.

The opinions on in-flight cell phone use were part of the Bureau of Transportation Statistics' annual household survey, which questioned 979 residents in November 2007 and 1,063 residents in November 2006. The survey has a plus or minus error rate of about 3 percent.

The Federal Aviation Administration and the Federal Communications Commission currently ban passengers from making cell phone calls in-flight. The House Transportation and Infrastructure Committee last week approved a bill to make the ban permanent.

The committee's action followed moves by the European Union to let airline passengers talk on their cell phones during flight. Some U.S. airlines are experimenting with in-flight Internet access.

Lawmakers said they worry that if the ban is lifted, fights will erupt between passengers who talk loudly on the phones and others who find the callers obnoxious. Some lawmakers also said they fear domestic airlines might try to get the cell phone ban lifted so they can charge passengers extra to sit in no-phone sections.

4 outrageous airline fees and how to avoid them

À la carte pricing doesn't have to send vacation prices into the stratosphere

opinion By Christopher Elliott Travel columnist MSNBC contributor updated 1:25 p.m. ET, Fri., Aug. 1, 2008 Christopher Elliott Travel columnist • Profile • E-mail The airlines don’t want you to read this.  They’d rather you fork one of the new surcharges they’ve dreamed up during the last few weeks. They want you to pay extra for your first checked bag, for drinkable water — even for “free” award tickets.  They don’t want you to know there’s another way. But there is.                                                                                                                                           Lew Long / Corbis stock Fees for unaccompanied minors are nothing new, but the rise in this particular charge is unprecedented. Alaska Airlines recently jacked tis price from $30 to $75, and Sprint hiked its unaccompanied minor fee from $50 to $75.

Surcharges are not inevitable. À la carte pricing doesn’t have to send the price of your next vacation into the stratosphere. Really, it doesn’t.

Warning: The advice I’m about to give is no way sanctioned by the Air Transport Association, the airline trade group whose members evidently haven’t met a surcharge they don’t like. It is not endorsed by airline apologists masquerading as analysts, experts and pundits — the folks you see on TV foolishly arguing that new fees are essential to the airline industry’s survival. Nor does it reflect the views of many elite frequent fliers, who think it’s about time the “little people” sitting in the back of the plane paid more for their tickets.  No, they would not approve of what I’m saying. Which is all the more reason to say it.

Here are four outrageous new surcharges the airlines have imposed on us this summer — and how to avoid them.

Beverages
US Airways is now charging for soft drinks. That includes bottled water. Yes, bottled water. The airline is completely unapologetic about the new charge. “We’ve chosen to be more aggressive than our competitors,” Doug Parker, the airline’s chief executive, told his employees in an internal memo. You can say that again, Doogie.

Few people have a problem with an airline charging for soft drinks. But water? Come on. Given the fact that the tap water they serve on planes is often not potable, that leaves us with few alternatives.

How to get around it: Bring an empty water bottle through the Transportation Security Administration screening area and fill it at the closest water fountain in the terminal. Remember, you can’t bring liquids through a checkpoint, but there’s no rule against empty containers. You can also buy bottled water inside the terminal, but that’s not an ideal solution. Those bottles may cost more than the ones you buy on the plane. There have been isolated reports of overly vigilant screeners confiscating empty bottles, but it’s still worth a try.

Checked luggage
Remember when you could check two or even three bags at no extra charge? Ah, the good ol’ days. But that’s history. Five airlines — American, United, US Airways, Northwest and Hawaiian — have announced plans to charge passengers for the first checked bag. The other carriers can’t be far behind.

Airlines insist they need the extra money to cover their fuel costs (here’s what United Airlines had to say when it added the fee) but this probably has almost nothing to do with higher energy prices. Airlines have been waiting for an excuse to add these extras for a long time, and when fuel prices come back down, these fees will almost certainly stick. Just wait and you’ll see.

How to get around it: A lot of so-called travel experts now recommend you send your luggage to your destination using either an overnight service or through one of the pricey luggage shipping companies. But that’s silly. Why ship your luggage when you can still carry it on the plane for free? If you have to carry a second bag, either fly on an airline with a free first-bag allowance, like Continental or Delta, or send the bag by second-day mail. And always do the math. A $15 charge for a bag might be a bargain compared with what the postal service charges.

Award tickets
Picture this: You’ve just won a gold medal at the Summer Games. But before you step up to the podium to receive your award, an official pulls you to the side and says you’ll have to pay a “processing fee” for the medal. Absurd? Yes. Unless you’re a frequent flier who wants to cash in some of your hard-earned miles.

This summer, airlines have upped their award ticket fees, adding “co-payments” for certain awards and raised the number of miles required for “free” tickets. For example, on Aug. 15, Delta Air Lines is adding a $25 “fuel surcharge” for award travel between the 50 states and Canada. And effective Oct. 1, American Airlines is charging a nonrefundable “co-payment” of $150 for upgrade awards used with certain fares between the U.S. and certain South American countries.

How to get around it: Cash in your frequent flier miles before the deadline or use your awards for something else. Award miles don’t appreciate over time, anyway. In fact, they lose value. So hoarding your points is not helpful. If you can’t do that — if you’re hopelessly addicted to miles, as many unfortunate souls are these days — then this may be a good time to focus your loyalty on a single program. The top-tier elite customers are exempt from many of these new charges.

Unaccompanied minors
Fees for unaccompanied minors are nothing new. But the rise in this particular charge is unprecedented, and as a parent, I’m calling for a reality check. Alaska Airlines jacked its price from $30 to $75 a few weeks ago. Spirit hiked its unaccompanied minor fee from $50 to $75. Not to be outdone, many legacy airlines raised their fees to $100, in some cases doubling them.

Again, many airlines blamed the rise in these fees on higher fuel costs. Which absolutely defies logic. How much more fuel does it cost to transport a featherweight unaccompanied minor, as opposed to, say, the average overweight American? Run the numbers. At $100 per flight, that’s an awfully expensive babysitter, considering that the going rate for a sitter is around $10 an hour.

How to get around it: Fly with junior this summer. If you’re sending two kids to visit the relatives, you might as well come along. You’ll pay the airline the equivalent in unaccompanied minor fees if you decide to stay home. Plus, you’ll be able to keep an eye on your offspring.

Of course, the best way around all of these fees is to fly on an airline that doesn’t have them. Southwest Airlines still allows you to check two bags at no extra charge. JetBlue still serves free drinks and snacks and charges $25 less than the big airlines for unaccompanied minors. Supporting these less fee-prone companies will hasten the inevitable demise of the airlines that erroneously believe they can surcharge their way back to a profit.

By the way, there’s plenty of evidence that the airlines are just getting started with their new fees. Once passengers are used to paying for beverages, checked luggage and “free” award tickets, it’s on to bigger and better things for the chronically mismanaged airline industry.

What’s next? No one knows.

And to be perfectly honest, I don’t think I want to.

Airlines think cutbacks could bring back profits

United Airlines, US Airways, and Jet Blue post big second-quarter losses

updated 6:15 p.m. ET, Tues., July. 22, 2008

PHOENIX - New travel fees mean hundreds of millions of dollars a year for beleaguered airlines, and executives say they need them more than ever as fuel costs continue to suck profits out of the industry. Plane tickets, it seems, now come with only the bare bones promise of getting from Point A to Point B.

“We’ll manage through this,” US Airways Chairman and CEO Doug Parker said of the ongoing pressure to cope with fuel costs.

“It’s not outrageous to suggest that what’s already been done is enough to get the industry profitable in 2009,” Parker said.

United Airlines, US Airways, and Jet Blue all posted big losses Tuesday, though all three beat Wall Street estimates. Airline stocks, which have been at historic lows for many carriers, shot up as oil prices dropped more than $4 a barrel at one point in Nymex trading.

Last week, Atlanta-based Delta Air Lines Inc. reported a $1.04 billion loss for the quarter and Fort Worth, Texas-based AMR Corp., the parent of American, posted a $1.45 billion loss for the same period. Continental Airlines swung to a $3 million loss.  Amid the dismal profit numbers, airline officials told Wall Street analysts that the silver lining is that a la carte fees may eventually stem the bleeding.

US Airways Group Inc., for example, expects to raise an additional $400 million to $500 million annually, up $100 million from earlier estimates.  The Tempe, Ariz.-based carrier has been more creative than others when it comes to fees. Besides bag charges, it has added charges for sodas and choice seats in coach. The airline also announced previously that it would remove movie systems from many domestic flights to save on fuel.

Meanwhile, JetBlue hopes to bring in about $40 million from customers buying seats with extra leg room this year. Its $15 fee for a second checked bag is expected to translate into about $20 million in additional revenue. A ticket change fee, which doubled to $100 in the second quarter, is part of a “basket of fee changes” expected to produce about $50 million in extra revenue in 2008.

United, which expects a $3.5 billion fuel bill this year, said it could see $275 million in new money from checked luggage fees as well as other baggage charges.  “We’re doing all we can to control our costs and to improve our revenue to offset fuel,” Chairman, President and Chief Executive Glenn Tilton said.

Minneapolis airline expert Terry Trippler said the new travel fees are here to stay. If anything, Trippler said, airlines probably will look to include more fees like charges for carry-ons.

“Whatever is going to cost them money is going to cost you money,” he said. “You carry on a bag, the weight of that bag is going to cost the airline money, therefore it will cost you money. You want a soda, well, to carry those sodas on a plane or to buy them will cost them money. Therefore it will cost you money.”

Consumers need to realize that air travel is no longer the luxury it once was, Trippler said. When people think of airlines, he said, they should imagine it like a big bus with wings.  “You have no amenities on the bus,” he said. “And guess what: they also ask you to pay for a second bag on a bus.”

The message seemed to be lost so far on travelers in New York’s Penn Station.  “I think they are just sticking it to people,” Denise Conway of Gastonia, N.C. said of the airlines. Conway was taking an Amtrak train from New York to North Carolina with her granddaughter, in part because she said it was too expensive to fly.

“Flying is definitely becoming more of a luxury,” she said. “I’m not asking them to sell gourmet dinners, but people like me — I don’t work — I could never afford to fly to New York. Not anymore.”

Michelle O’Leary, 35, of Marshfield, Mass. agreed. Instead of flying, O’Leary bought a cheap fare on Megabus to take her two daughters from New York to Boston. The trip for the three of them cost $96. She said it would have cost them $678 to fly.

Frank Pittelli of Long Island, New York, added: “Flying nowadays is great for people who can afford it,” he said. “But with these extra fees, it feels like (the airlines) are just hurting the less fortunate.”

Besides the extra fees, airlines are expected to make big reductions in the number of routes they offer. By parking planes and cutting seating capacity, executives hope to keep demand (and therefore fares) high for the remaining tickets. According to estimates by US Airways, any roundtrip ticket needs to cost more than $299 to cover the cost of fuel.

So US Airways said it would further cut capacity 6 to 8 percent on domestic flights in the fourth quarter, and then cut another 8 to 10 percent in 2009.  United will trim overseas routes by 7 percent in the fourth quarter. Routes to be eliminated will include Denver-London, Los Angeles-Frankfurt and San Francisco-Nagoya, Japan. Tilton said United will close its Nagoya station.

Tilton said fourth-quarter mainline domestic capacity will shrink 16 percent compared with the previous year. United dropped about 50 routes from its domestic schedule on Thursday alone as it takes 100 aircraft out of its fleet, including all of its 737s, Tilton said in a hot line message to employees on Tuesday.

JetBlue expects September capacity to be down 10 percent and does not expect to grow next year. JetBlue thinks capacity will slip one to three percent in the third quarter and fall six to nine percent in the fourth quarter.  US Airways and United also announced that they would shrink their work force even more than previously announced.

United previously announced plans to eliminate roughly 3,800 jobs through furloughs, layoffs, and early retirement packages, including as many as 1,600 from salaried workers and management. But on Tuesday the company said it will aim to cut 7,000 jobs by the end of next year in conjunction with fewer flights, with the additional reductions coming from front-line workers.

US Airways said it cut more management jobs and will reduce its 2,000 positions, an increase from the 1,700 positions it previously announced.  Despite the weak earnings reports, airline shares soared in Tuesday’s session as oil prices tumbled. UAL was the biggest gainer after it signed an extended credit-card agreement with Chase Bank USA and accomplished other financial maneuvers that it said would add $1.7 billion to its cash balance, including $200 million it expects to get over the next two years.

Airline shares are still far below their values around the start of the year. Falling precipitously as oil prices shot up.

American to lay off 1,500 maintenance workers

Duties included maintaining jets of nation's largest airline, other carriers

Donna Mcwilliam / AP file American Airlines workers perform maintenance at a facility near Fort Worth, Texas. The airline will cut 1,500 jobs in its maintenance division as it reduces its fleet of aircraft.

updated 12:55 p.m. ET, Fri., July. 18, 2008

DALLAS - American Airlines will cut 1,500 jobs in its maintenance division as it reduces its fleet of aircraft.  The nation's largest airline told employees of the cuts in memos this week.  American did not break down the cuts by location. Tami McLallen, a spokeswoman for the airline, said Friday that those decisions had not yet been made.

The airline has maintenance hubs in Kansas City, Tulsa, Okla., and Fort Worth, Texas, plus many smaller bases around the country. Besides maintaining American's jets, workers at the hubs also work on jets brought in by other carriers.  American has about 14,000 employees in its maintenance division, including management and support staff, and 13,000 of them are represented by the Transport Workers Union, McLallen said.  The cuts include 1,300 mechanics and 200 management and support staff, she said.

Airline plans to cut 8 percent of work force
The Fort Worth-based airline, part of AMR Corp., announced two weeks ago it would shed 8 percent of its work force — about 6,800 jobs — to cope with financial distress brought on by record fuel costs and a weakening economy.  The company has publicly identified only a portion of those cuts. It has said it will eliminate 900 flight attendant jobs and 200 pilot positions. The company is offering buyouts to senior employees to reduce the need for layoffs.

Chief Financial Officer Tom Horton hinted at the latest cuts when he said this week that American's maintenance organization was built for a much bigger airline than the one that will emerge after announced reductions in capacity.  American plans to cut its U.S. flying by up to 12 percent after the busy summer travel season ends.

On Wednesday, American announced it would speed up the retirement of its 34 Airbus A300 aircraft by the end of next year instead of waiting until 2012. American and its feeder carrier, American Eagle, will ground 103 planes this year.  AMR reported Wednesday that it lost $1.45 billion in the April-to-June quarter, most of it due to writing down the value of aircraft. Excluding those charges, the loss was $284 million.

AMR shares rose 18 cents, or 2.6 percent, to $7.09 in Friday morning trading.  The airline has maintenance hubs in Kansas City, Tulsa, Okla., and Fort Worth, Texas, plus many smaller bases around the country. Besides maintaining American's jets, workers at the hubs also work on jets brought in by other carriers.

American has about 14,000 employees in its maintenance division, including management and support staff, and 13,000 of them are represented by the Transport Workers Union, McLallen said.  The cuts include 1,300 mechanics and 200 management and support staff, she said.

Airline plans to cut 8 percent of work force
The Fort Worth-based airline, part of AMR Corp., announced two weeks ago it would shed 8 percent of its work force — about 6,800 jobs — to cope with financial distress brought on by record fuel costs and a weakening economy.  The company has publicly identified only a portion of those cuts. It has said it will eliminate 900 flight attendant jobs and 200 pilot positions. The company is offering buyouts to senior employees to reduce the need for layoffs.

Chief Financial Officer Tom Horton hinted at the latest cuts when he said this week that American's maintenance organization was built for a much bigger airline than the one that will emerge after announced reductions in capacity.  American plans to cut its U.S. flying by up to 12 percent after the busy summer travel season ends.

On Wednesday, American announced it would speed up the retirement of its 34 Airbus A300 aircraft by the end of next year instead of waiting until 2012. American and its feeder carrier, American Eagle, will ground 103 planes this year.  AMR reported Wednesday that it lost $1.45 billion in the April-to-June quarter, most of it due to writing down the value of aircraft. Excluding those charges, the loss was $284 million.  AMR shares rose 18 cents, or 2.6 percent, to $7.09 in Friday morning trading.

Delta names bosses for Northwest combination

Says completing transition to one carrier could take up to two years

updated 2:58 p.m. ET, Tues., July. 15, 2008

ATLANTA - Delta Air Lines Inc. announced Tuesday its plans for the composition of its senior leadership team after it acquires Northwest Airlines Corp. later this year.  The Atlanta-based carrier said it expects the transition of Northwest’s operations into Delta to last 12 to 24 months.  As previously announced, Delta Chief Executive Richard Anderson will lead the combined airline.

Delta said Tuesday that Delta’s president and chief financial officer, Ed Bastian, will remain in that position. Bastian will also be the chief executive and president of Northwest until Delta completely integrates its operations with Northwest. 

Northwest’s current chief, Doug Steenland, plans to leave the company’s executive ranks when the combination is completed, but will serve on Delta’s board, officials previously said.  Mike Becker, senior vice president of human resources and labor relations at Northwest, has been named executive vice president and chief operating officer for Northwest’s operations during the transition. His role after that has not been announced.

Mike Campbell, executive vice president of human resources, labor and communications at Delta, will stay in that role, while Steve Gorman, executive vice president of operations at Delta, and Glen Hauenstein, executive vice president of revenue and network, will remain in their roles.

Ben Hirst, Northwest’s general counsel, will assume the role of general counsel at Delta. Laura Liu, senior vice president of international at Northwest, will have the role of senior vice president of international for Delta. Theresa Wise, senior vice president and chief information officer at Northwest, will be chief information officer for Delta.

Upon closing of the deal, NWA Inc. will be an operating subsidiary of Delta.  Each of the officers of the new NWA structure will be officers of both NWA and Delta upon closing.  Delta will remain based in Atlanta. The stock-swap deal, which would create the world’s largest carrier by traffic, was announced April 14. It is subject to shareholder and regulatory approval.

Delta hopes to complete the acquisition by the end of this year.  Steenland told Northwest employees in a message Tuesday that “the new team represents a true blending of the talent of both companies.”  He said Northwest would “function separately” during the transition period after the close of the deal. After that, he said the new Delta would keep “a significant ongoing operational and staff presence in Minnesota.”

Northwest Airlines slashing 2,500 jobs

Commercial carrier also plans to charge $15 to check one bag

updated 2:44 p.m. ET, Wed., July. 9, 2008

MINNEAPOLIS - Northwest Airlines Corp. said on Wednesday it will cut 2,500 jobs because of high oil prices, and will begin charging $15 to check a single piece of luggage and as much as $100 to redeem a frequent-flier award ticket.  The airline said it expects the new fees to add $250 million to $300 million a year in revenue.

Northwest said the job cuts — which represent about 8.3 percent of its work force — will include front-line and management workers. It said it will start with voluntary departures and leaving open jobs unfilled before moving to furloughs to reach the 2,500 total.

Northwest had said previously it would have fewer workers after it cuts 8.5 percent to 9.5 percent of mainline flying in the fourth quarter of this year. It has said overall capacity would shrink 3 percent to 4 percent because it is adding regional seats. As of the end of 2007, Northwest employed about 30,000 people.

President and Chief Executive Doug Steenland said Northwest's fuel costs have more than doubled in the past year.  "These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying," Steenland said in a written statement.

Northwest also said it would begin charging $15 for the first checked bag, matching a fee announced earlier this year by US Airways, American Airlines, and United Airlines. Northwest's new fee applies to tickets sold after Thursday for travel starting Aug. 28 in the U.S. or to Canada.

Northwest also announced a fee for issuing frequent-flier tickets beginning Sept. 15. It said it will charge $25 for domestic tickets, $50 for trans-Atlantic tickets and $100 for trans-Pacific tickets. Steenland called the service fee temporary.  "As fuel comes down, we will re-visit this decision," he said.

At Delta Air Lines Inc., which is buying Northwest, a spokeswoman said record high fuel costs are causing the Atlanta-based carrier to look at everything. "However, we have made no changes to the service we offer to customers for a complimentary first checked bag," spokeswoman Betsy Talton said.

Last month Delta announced a surcharge for redeeming frequent flier tickets $25 for tickets in the U.S. and Canada and $50 for international.  American Airlines was the first major U.S. carrier to announce a fee on first checked bags. Spokesman Tim Smith said Northwest's moves "clearly show they are facing the same extreme challenges all airlines are dealing with these days."

Executives of American parent AMR Corp. said last week they expect to cut 8 percent of the work force, or about 6,800 jobs.  Continental Airlines Inc., which has announced 3,000 job cuts but doesn't charge for checking a first bag, declined to comment on Northwest's actions.

Airport ‘go-arounds’ probed as safety hazard

1,500 reported in last half of '07, none fatal; ‘it only takes one,’ critic says

	The vast majority of go-arounds are the result of congestion at major airports, where planes often land and depart every two minutes during peak times.
Jeff Chiu / AP file

updated 12:44 p.m. ET, Thurs., July. 3, 2008

NEWARK, New Jersey - A United Airlines jetliner was coming in for a landing at the Las Vegas airport in 2006 when the tower radioed that a smaller plane was still crossing the runway.  So the United pilot executed a “go-around,” a routine maneuver in which an incoming plane pulls up at the last minute and circles around. But the jet suddenly found itself on a collision course with an American Airlines plane taking off from an intersecting runway.

The United crew took a hard right turn, the American flight veered off in the other direction, and disaster was averted. But the near-collision offered a frightening vision of what can happen during a go-round at the nation’s congested airports.  An Associated Press review of tower logs and summaries from eight of the nation’s busiest airports, obtained through the Freedom of Information Act, found more than 1,500 go-arounds during the last six months of 2007 alone.

Go-arounds haven’t been blamed for any crashes or midair collisions involving commercial airliners over the past three decades, according to a review of National Transportation Safety Board records. Still, there have been some close calls, and controllers worry that without more safeguards, a deadly accident is going to happen.  “We can go 99 percent of the time and not have a problem. But it only takes one,” said John Wallin, president of the air traffic controllers union at Memphis.

In a small number of cases, go-arounds are prompted by “runway incursions” — instances in which taxiing planes or ground vehicles blunder onto a runway in use. However, the vast majority of go-arounds are the result of congestion at major airports, where planes often land and depart every two minutes during peak times.  “We’re trained in that maneuver, so it’s not a tense situation,” said Ralph Paduano, a commercial pilot for more than 20 years who now flies for Continental. “But you have to really be on the ball; you can’t be complacent about it.”

Some controllers want the Federal Aviation Administration to take extra precautions such as staggering arriving flights and not using crisscross runways simultaneously.  The FAA said that it is looking at its procedures on a case-by-case basis — and has altered or abandoned some practices — but that the public is in no immediate danger.

In recent months, federal authorities have investigated go-around procedures at three of the nation’s busiest hubs:

• Newark Liberty International Airport, where three runways intersect at the northeast corner of the airport and planes often have to be sent around when two of them approach intersecting runways at the same time;

• Detroit Metropolitan Wayne County Airport, where a go-around procedure was discontinued this spring after air traffic controllers warned it was putting planes directly into the path of planes taking off from another runway;

• Memphis International Airport, where changes were made last year after an arriving Northwest Airlines DC-9 flew close to a commuter plane that had been forced to go around because of a mechanical problem.

At Memphis, east-west Runway 27 runs perpendicular to north-south runways 18L, 18C and 18R and is used during peak periods. After the close call in February 2007, the FAA ordered the airport to stop using all four runways simultaneously.  The practice has since resumed, though Memphis controllers now use software called Converging Runway Display Aid that employs a computer-generated “ghost target” to project where the flight paths will cross.

That didn’t prevent an incident on June 11 in which a commuter jet executed a go-around on Runway 27 and was forced to stay low while an incoming jet landing on Runway 18R — a north-south runway not covered by the CRDA — passed overhead, Wallin said. Wallin said the planes were about 800 feet apart — not a violation of FAA rules, but scary.

The Office of Special Counsel, an independent federal agency that handles whistleblower complaints, said it is reviewing a report on the Memphis runway procedure. In an e-mail to The Associated Press, the FAA said it is satisfied with the changes it made last year and has “found no safety issues” with the procedure.  At Newark, almost half of the nearly 300 go-arounds between last August and January arose from runway “ties,” in which two planes approach intersecting runways at the same time.

Controllers at Newark have been pushing the FAA to change its procedures so that arrivals for those runways are sent at staggered intervals by the New York Terminal Radar Approach Control, or TRACON, center on Long Island, which guides Newark-bound planes down to an altitude of 3,000 feet before turning them over to the Newark tower.

Staggering planes relieves pressure on controllers to keep the aircraft out of each other’s way, said Ray Adams, vice president of the controllers union at the airport.  “You have about eight miles, or about two minutes, to figure it out and make it work” after TRACON hands off the arrivals, Adams said. “It comes down to how busy you are and what your skill level is. You have to make some serious moves pretty early to get the sequence to work out.”

The FAA said it is examining the safety of the runway configuration at the request of the Transportation Department’s inspector general. But it said it has not “found evidence of excessive risk that would call for us to stop using the operation.”  In Detroit, two east-west runways form a latticework with four runways that run diagonally northeast to southwest. When one of the four was closed for repairs last year, controllers were instructed to land more planes on east-west Runway 27L.

The problem was, when a plane had to execute a go-around on 27L, it would be heading directly toward the takeoff corridor for planes departing on Runway 22L.  “It puts two aircraft in harm’s way, and that’s unacceptable,” said Vince Sugent, head of the air traffic controllers union at the airport.  The FAA said the practice has been discontinued based on the recommendations made by its Air Traffic Safety Office.

The last all-premium airline may vanish

BA buy means changes, but Orly-New York market should remain same

	L'Avion's agreement to be acquired by British Airways means the last of the recent class of all-premium-class transatlantic airlines could vanish, with L'Avion likely to be subsumed into BA subsidiary OpenSkies.
L'Avion

The last of the transatlantic all-premium-class airlines could soon vanish, but not because of bankruptcy — and it's not necessarily bad news for transatlantic high-fare fliers.

L'Avion, the French all-business-class airline that operates two Boeing 757s — each fitted with just 90 seats — between Paris Orly Airport and Newark Airport, has agreed to be purchased by British Airways.

Once BA and L'Avion obtain regulatory permission for the acquisition, BA intends to integrate L'Avion with British Airways' new subsidiary OpenSkies. A source familiar with the deal says the airlines are hoping to be able to close the deal and begin integrating L'Avion and OpenSkies within the next month. Even before the L'Avion purchase was announced, OpenSkies and L'Avion already were operating a codeshare, with L'Avion selling seats on OpenSkies' flights.

"L'Avion has built a fantastic business offering high-value premium service that has inspired tremendous customer loyalty on both sides of the Atlantic," said Dale Moss, managing director of OpenSkies. "L'Avion will provide OpenSkies with immediate scale, increased access to Paris Orly and an experienced, talented employee base. This is a combination of two companies that are focused on bringing comfort and personalization to transatlantic travel."

OpenSkies, which is almost but not quite an all-premium-class airline, launched daily flights between Paris Orly Airport and New York John F. Kennedy Airport on June 19. Like L'Avion, OpenSkies also operates Boeing 757s, which are fitted with even fewer seats than L'Avion's jets — just 82, in three classes.

The new BA subsidiary's 757s feature three cabins: its 24-seat Biz cabin, a business class service featuring what the airline says are the only fully lie-flat beds on the Paris-New York route; OpenSkies' 28-seat Prem+ class, a new service category beyond other airlines' premium-economy cabins that offers reclining seats with a 52-inch pitch; and economy class, featuring a cabin containing only 30 seats.

British Airways says the combined OpenSkies-L'Avion will operate up to three daily flights between Paris Orly and the New York area using the airlines' existing Boeing 757s. The price of the L'Avion buy is Euros 68 million ($107.6 million), which covers the purchase of the airline and Euros 33 million ($52.2 million) of cash in its business.

Until BA completes its acquisition of L'Avion, the French airline will continue to operate its aircraft in their existing 90-seat configurations on its Orly-Newark schedule, which offers two flights a day, five days a week. L'Avion's cabin features a 2x2 seat-row configuration with a wide central aisle Each seat reclines to 140 degrees, is separated from the seat in front by nearly 4 feet and is equipped with individual power supply.

BA has not said yet if it will reconfigure L'Avion's aircraft to match OpenSkies' three-class, 82-seat configuration, but it appears a likely move to ensure service consistency. However, BA has said its aim in integrating the two airlines is to offer customers benefits that will further improve the Paris-New York offering, including an increased schedule and BA Executive Club privileges.

L'Avion has flown more than 65,000 premium-class passengers since its start on Jan. 3, 2007. The airline has experienced steadily increasing load factors — the percentage of seats filled with revenue customers — since launch and has consistently outperformed its business plan objectives, according to BA.

This would make L'Avion unique among the recent batch of all-premium-class airlines that began service within the last three years, the other three — U.S. airlines MAXJet Airways and Eos Airlines and the UK's Silverjet — all being forced into liquidation by insufficient loads and inability to raise additional capital as the U.S. credit squeeze tightened. Perhaps significantly, L'Avion is the only one of the four airlines that did not concentrate on the highly competitive U.S.-London premium-fare market.

OpenSkies came into being as the first airline created as a result of the new Open Skies agreement between the United States and the European Union, which allows airlines from either signatory jurisdiction to fly between any U.S. and any E.U. destination. The agreement came into effect on March 30, 2008.

EU officials name misleading travel Web sites

Seven online travel operators, airlines violated European consumer law

BRUSSELS, Belgium - European Union and Danish officials named seven online travel operators and airlines Thursday in an ongoing crackdown against misleading ads and price schemes.  Online travel sites run in Denmark by Ryanair, Air Berlin, Air Baltic, SkyEurope, Aer Lingus, Brussels Airlines and Seat24 were singled out for violating European consumer law.

Consumers are being "let down by the airline industry," despite the EU investigation into online sales practices launched in September, EU Consumer Affairs Commissioner Meglena Kuneva said.  "There are serious and persistent problems with ticket sales throughout the airline industry as a whole. It is completely unacceptable," Kuneva said in a statement.

The seven operators, some already criticized for Web sites run in other European nations, were accused by Denmark's consumer ombudsman of misleading consumers on booking procedures, notably on prices and terms under which flight tickets can be used.  Henrik Oee said his investigation involved 13 foreign companies that run online travel services in Denmark, five of which have already moved to change their practices.

The seven others were still in violation, he said in a statement from Copenhagen.  "Consumers have the right to know where to keep a close watch," he said.  Kuneva's spokeswoman Helen Kearns said online booking agency Seat24 pledged to bring its Web site inline with EU rules by August, but that Irish low-cost carrier Ryanair and German low-cost airline Air Berlin had disagreed with the Danish conclusions.

Kuneva said in May that a third of people who shop for flights online in the EU were being cheated by misleading ads and prices. She gave airlines and travel operators one year to fall in line with EU consumer rules or face legal action.  The EU investigation so far has indicated that the main problems are misleading pricing and vague conditions and contract terms. Airlines and other travel companies often add airport taxes, handling fees, baggage and seating charges and other costs on top of the prices that first appear on Web sites.

America’s most on-time airports

From Seattle to Honolulu — you'll stick to your schedule in these 15 cities

	Sea-Tac rates No. 15 and is nearly tied with Charlotte Douglas International, with on-time departures of 79.3 percent and on-time arrivals of 76 percent.
Port of Seattle

Insane jet fuel prices, fare hikes, carriers slashing flights left and right—taken together, they point to an industry in a death spiral. In response to the nearly 93 percent jump in the price of jet fuel since June 2007, big fliers such as Continental, US Airways, American, Delta and United have announced cutbacks in service in recent weeks. Smaller carriers that handle connecting flights for the major airlines are in an even more precarious situation. Florida-based Spirit announced potential lay-offs of 60 percent of its flight attendants and 45 percent of pilots; Delta has been trying to terminate its flight contracts with both Pinnacle and Mesa, citing poor punctuality as the cause.

But is there a silver lining? Will fewer planes in the sky translate to greater punctuality on the ground?

According to some experts, hoping for better on-time performance at America's busiest airports may be futile. “In order to maintain the highest possible revenue, large carriers must fly in and out of the busiest hubs,” says Debby McElroy, executive vice president of policy and external affairs for Airports Council International, North America. “That’s where they’re most heavily invested, so they’ll do what it takes to protect those routes.”

Which is why most of the cutbacks are aimed at underperforming routes and secondary airports. Delta, for example, is pulling out of airports in Atlantic City, N.J.; Islip, Long Island and Corpus Christi, Texas. American, which is gearing up for an 11 percent reduction in domestic capacity, is discontinuing all service in and out of Oakland, Calif.—a tertiary airport to San Francisco International—plus service between Austin and Orange County, Calif., Seattle and Raleigh-Durham, N.C., and from San Antonio to Ft. Lauderdale.

The most heavily trafficked routes, on the other hand—New York to Chicago, Atlanta to Washington D.C., Los Angeles to San Francisco—are expected to remain bumper-to-bumper. In fact, there’s a chance congestion might actually increase as fliers who once flew directly to Midway will now have to land at O’Hare. (Thankfully, O’Hare is slated to open a new runway this fall.) Airlines are also cutting capacity to and from major tourist markets—Las Vegas, Honolulu, Orlando—because these destinations historically offer the most competitive rates for consumers and the lowest profit margins for the carriers.

Where, then, are America's most on-time airports?

Having favorable weather conditions and being home to the nation’s most punctual carrier, Hawaiian Airlines (and Aloha, before it ceased operations in March), help put Honolulu International (No. 1) and the smaller Kahului (No. 2) in the top slots. Their numbers are nearly identical, each with an on-time performance of just over 84 percent for the first five months of 2008.

On the mainland, West Coast airports take most of the top honors. Portland International is third for both timely arrivals and departures (nearly 82 percent); five other Southwest and West Coast airports are in the top 10. “West Coast hubs are at a slight advantage because the weather is generally better and routes are typically less congested than East Coast airports, particularly those in the Northeast,” Hazel explains. In fact, the only East Coast airports to make the top 10 are Baltimore/Washington International (No. 10) and Tampa (ranked No. 9)—and even then, the latter is technically on the Gulf Coast.

To compile this list, we looked at the 50 busiest airports in the United States, or those with more than 147,000 flight operations in 2007, according to the most recent data from the Federal Aviation Administration. (There’s little change in this ranking from year to year.) We then averaged each airport’s monthly arrival and departure statistics for the first five months of 2008, as supplied by FlightStats, a Portland-based company that tracks historical and real-time flight information.

Where are the most delayed airports in the U.S. for the first half of 2008? New Yorkers won't be shocked to learn that Newark Liberty in New Jersey (64.9 percent) and New York’s LaGuardia (62.4 percent) are at the bottom of the list, joined by Chicago O’Hare (62.6 percent).

Given the looming changes for the second half of 2008, can we actually expect airports to gain efficiency as traffic wanes?

Says McElroy, “No one knows yet exactly how this will play out.” Despite the 13 fare increases since January (according to FareCompare.com) overall air traffic appears to be holding. The Bureau of Transportation reported in May that the number of scheduled domestic and international passengers on U.S. airlines during the first two months of 2008 actually increased by 1.8 percent from the same period in 2007. In fact, there’s been relatively little change in airport punctuality since last year.

By the end of the year, we'll have a better idea of what impact these reductions will have, since most cutbacks aren’t scheduled until the fall—after the peak summer flying season. In the meantime, here's our list of America's 15 most on-time airports, for the first few months of 2008.

American Airlines outlines service cutbacks

Moves to hit passengers in Chicago, St. Louis, Dallas/Ft. Worth, N.Y. hardest

updated 3:07 p.m. ET, Wed., June. 25, 2008

FORT WORTH, Texas, - American Airlines will cut back flying later this year at many airports, including hubs in Dallas and Chicago, as it attempts to cope with record high fuel prices.   The nation's largest carrier gave more details Wednesday about capacity reductions it announced last month.

American said it will reduce departures at its Chicago O'Hare Airport hub by 28 flights and sister airline American Eagle would cut 34 flights, beginning in September. At Dallas-Fort Worth International Airport, American will cut 19 departures and Eagle will ground 23 flights. American said it will cut eight daily departures in St. Louis and five at New York's LaGuardia Airport. American Eagle and AmericanConnection will cut 35 flights in St. Louis and 37 Eagle flights at LaGuardia.

Fort Worth-based American had already said it was closing operations in Oakland, Calif., and at London's Stansted Airport in September, and it said Wednesday it would end service to Barranquilla, Colombia. Eagle will end operations in Albany, N.Y.; Providence, R.I.; Harrisburg, Pa.; San Luis Obispo, Calif.; and Samana, Dominican Republic.

American announced last month it will cut domestic capacity 11 percent to 12 percent, and Eagle will cut capacity 10 percent to 11 percent, compared with levels of late 2007. The company is trying to reduce costs in the face of fuel prices that have nearly doubled in the past year, surpassing labor as American's biggest expense.

Chairman and Chief Executive Gerard Arpey said last month that American will probably eliminate thousands of jobs as a result of fewer flights, but the company has not yet disclosed a precise figure. A spokesman said Wednesday that job effects might not be known for some time. The company repeated Wednesday that it intends to offer voluntary-departure programs to reduce layoffs.

United, US Air to charge fee to check single bag

Cash-strapped carriers follow rival American Airline's lead

Many United Airlines customers buying tickets on or after June 13 will pay a $15 fee to check their first bag, and $25 for second bags.

And then there were three.

United Airlines announced early Thursday that it would join American Airlines in charging its passengers $15 for checking first bags. Later in the day, US Airways followed suit — and took it even further.

In addition to the first-bag fee, which affects tickets booked on or after July 9, US Air said it will sell non-alcoholic beverages — soda, juice, coffee, bottled water — for $2, starting August 1. Alcoholic drinks will be available for $7 — up from the current $5 tab. The carrier also boosted its call service ticket fees, and plans to cut domestic capacity and slash 1,700 jobs from its work force.

Baggage fees are fast becoming an unavoidable part of U.S. flying.

Most U.S. carriers already have instituted a $25 charge for checking a second bag — part of a potpourri of new fees that reflect a struggling airline industry passing along record fuel prices to passengers in the form of higher fares, fuel surcharges and service charges.

As of July 1, Southwest Airlines will be the only U.S. carrier that permits two checked bags for free, according to air travel expert Tom Parsons, who expects still more service fees to come.

"The major airlines are truly a la carte now — you don't get anything free any more," said Parsons, chief executive of the travel Web site Bestfares.com. "You get a tin can in the air, and anything else you pay as you go."

He expects the legacy carriers to follow the lead of discount carrier Spirit Airlines, which now charges extra for seat reservations — $5 for middle seats, $10 for window and aisle seats and $15 for exit-row seats. Other airlines also have begun charging for window or aisle seats.

UAL Corp.'s United said its baggage fee goes into place with customers who buy tickets beginning Friday for domestic flights of Aug. 18 or later. It does not apply to customers flying in first or business class or those who have premier status with United or Star Alliance, and first and second bags will still be free for itineraries that include international flights, aside from Canada.

The Chicago-based carrier also is increasing the fee to check three or more bags, overweight bags or items that require special handling to $125 from $100, or to $250 from $200, depending on the item.

"With record-breaking fuel prices, we must pursue new revenue opportunities while continuing to offer competitive fares by tailoring our products and services around what our customers value most and are willing to pay for," said John Tague, United's chief operating officer.

United estimates the potential revenue from baggage handling service fees at about $275 million a year. It expects the new $15 service fee to apply to one in every three customers.

The Associated Press contributed to this report.

Airlines move to make bad situation worse

United plans to take 70 jets out of service, cut domestic capacity 17 percent

David McNew / Getty Images

While United didn't specify routes or flights to be trimmed, the airlines already have begun targeting less profitable flights even if they are to leisure destinations with strong demand. Several carriers have cut back on service to Las Vegas, Honolulu and elsewhere.

updated 7:22 p.m. ET, Wed., June. 4, 2008

CHICAGO - First it was soaring ticket prices and vanishing bargain fares, then new baggage fees. Now air travelers are facing dwindling choices for when they can fly and where — even to such popular tourist destinations as Las Vegas and Orlando.

The squeeze, a byproduct of record oil prices that are pushing airlines toward financial disaster, accelerated Wednesday when United Airlines announced plans to take 70 more jets out of service and cut domestic capacity by 17 to 18 percent in 2008-09. Its discount unit Ted will be shut down and 1,100 additional jobs eliminated, with more to follow.

That came two weeks after a similar move by AMR Corp.'s American Airlines, the only U.S. carrier larger than United, which said it would slash domestic capacity 11 to 12 percent after the peak summer travel season. American already has begun eliminating flights, as have No. 3 Delta Air Lines Inc. and others.

That's bad news for travelers, especially those who fly out of smaller regional airports that are losing flights and service, and it's almost certain to get worse unless oil prices drop and take the pressure off airlines to keep shrinking. "For the next year or so, it's going to be gloom and doom" in terms of fares and flight options, said air travel expert Tom Parsons.

While United didn't specify routes or flights to be trimmed, the airlines already have begun targeting less profitable flights even if they are to leisure destinations with strong demand. Several carriers have cut back on service to Las Vegas, Honolulu and elsewhere; Delta's service to and from Orlando, Fla., is down 45 percent from a year ago.

While demand for tickets to those destinations remains solid, the airlines say they have to focus on higher-priced and more profitable routes in the face of sky-high fuel prices.

Airline consultant Robert Mann said the tourism and travel industries as a whole are subject to "serious collateral damage," with a likely drop in air travelers to hotels and resorts in places that have flourished with the proliferation of low air fares.

The outlook may be grimmest of all for airlines that don't cut back enough to survive oil prices trading above $122 a barrel even after a decline from $135. That's still well more than double the $50-a-barrel price that United pegged its business plan to after emerging from bankruptcy in 2006.

"Some airlines will likely go bankrupt and cease operating," Lehman Brothers analyst Joseph Campbell said in a note to investors Wednesday.

That might help the bottom lines of those that manage to keep flying, but it would only speed up a trend of narrowing U.S. flight options that has been under way for months.

The largest airports may see only a small decline in flight options, but smaller cities such as Lancaster, Pa., and Ithaca, N.Y., already have lost all service. Experts say others in the East, Midwest and beyond are likely to see individual carriers depart or also lose service completely.

"If you're in a small city you're going to have less opportunities, and the leisure markets are going to be priced out," said Parsons, chief executive of the discount travel site Bestfares.com.

U.S. Rep. Jerry Costello, chairman of the House aviation subcommittee, said he is concerned about small and rural areas losing service. He said he strongly supports the "essential air service" program, which provides federal subsidies to guarantee air routes in rural areas, but is taking a wait-and-see approach before considering further financial support for carriers.

"We are in uncharted waters here (with potential mergers and record-high fuel prices) and we need to see how everything shakes out," the Illinois Democrat said in a telephone interview. As air service to rural areas declines, he said, all options "will have to be on the table."

UAL Corp.'s United said it plans to cut an additional 900 to 1,100 salaried, contract and management employees by the end of the year, in addition to 500 previously announced job reductions. The combined reductions mean the airline is cutting nearly 3 percent of its 55,600 workers worldwide.

"With fuel at historically high levels, United and our competitors need to redefine ourselves in this marketplace," Glenn Tilton, United's chairman, president and CEO, said in a message to employees.

United said it plans to ground its entire fleet of 94 Boeing B737s as well as six of the company's 747s — its oldest and least fuel-efficient planes. It previously said it was going to mothball 30 of the jets. It is scrapping the coach-only Ted service and reconfiguring those planes to include first-class seats.

Besides the larger reduction in domestic capacity, it also is scaling back international capacity by 4 to 5 percent.  Regardless of the impact on travelers, industry analysts hail the ongoing cutbacks as necessary.

"You can't just cut 17 percent of your domestic capacity if you're not in trouble," said Brian Nelson of Morningstar. "United is definitely taking the lead here in terms of the magnitude of cuts needed. However, it's going to also require others to make those steps."

Grounding the planes quickly could be a challenge for United. That is because half of the 737s it wants to pull from service are operated under leases, not owned outright.

"I think what they'll do is wait until they get toward the end of the leases before they park them," said Mike Boyd, president of aviation consultancy The Boyd Group.

United declined to say which companies it leased the planes from, but the contracts are likely spread among a number of different companies.

John McMahon, chief executive of Genesis Lease Ltd., which leases three Airbus A320s to United, said lease contracts typically run five years or more. Lessors may be willing to renegotiate the terms of an existing deal if they can line up other customers, but contracts typically don't require them to, he said.

"It's not unlike if you're renting an apartment, and you have a contract ... and you want to get out of it," McMahon said. "It's not that straightforward."

A bad bag idea

Why American's bag-check fee could be the worst idea to hit the runway

If you ran the airline with the nation’s worst on-time record and one of the worst lost-luggage rates, would you begin charging your customers for the privilege of checking a bag?

You probably wouldn’t, but it’s Gerard Arpey who runs American Airlines, the nation’s largest airline. So beginning next month, American and American Eagle, its wholly owned commuter carrier, will charge most passengers $15 to check a piece of luggage.

As that comic says, you can’t fix stupid. And this fee is going into the Airline Stupid Hall of Fame. Not only will it infuriate flyers—who are already annoyed with American’s lousy operating efficiency and its recent maintenance snafus—it’s likely to further erode American’s on-time and baggage-handling rates. And it probably won’t generate any additional cash for American.

It goes without saying that American needs the scratch. Its $328 million first-quarter loss was, uh, fueled by what the company says was a $665 million year-over-year increase in energy costs. As the price of oil skyrockets, Arpey is so desperate that he’s cutting American’s route network by more than 10 percent, grounding dozens of aging, fuel-guzzling aircraft, and laying off thousands of workers.

To Arpey, baggage must seem like an easy target for quick cash. Many European airlines charge for checked luggage and, in the increasingly à la carte world of U.S. aviation, baggage is the next logical candidate for unbundling. And American did have a moment of clarity: When Arpey announced the $15 first-bag fee at last week’s annual meeting of AMR, American’s parent company, he was careful to exempt full-fare customers (its most profitable segment), elite frequent fliers (its most loyal) and international passengers (who get a mulligan due to competitive and logistical factors). Arpey aimed the $15 fee directly at the travelers who pay the lowest fares and contribute the least to American’s bottom line.

But that’s where rational thinking ended. Arpey set the fee to kick in on tickets purchased beginning June 15, the start of the busy summer-travel season. That means travelers will have to adjust with just three weeks’ notice. American’s frontline staffers have no more of a cushion, since they were only informed of the move a few hours before Arpey publicly unveiled it.

And American seems to have imposed the fee without actually calculating how much revenue it could raise. When asked, Arpey couldn’t say how many checked bags will fall into the charge-to-check category and was vague about the revenue target.

Worse, the customers targeted with the fee are the ones most likely to try to duck the $15 addition by using larger carry-ons. That’s dangerous because these less-experienced fliers (think families and once-a-year vacationers) think any bag with wheels qualifies as a carry-on. It doesn’t. American’s Web site says the largest acceptable carry-on bag is no larger than 45 linear inches (length plus width plus height) and weighs no more than 40 pounds.

So be prepared for time-consuming arguments at the ticket counters and check-in kiosks. Unless it’s prepared to countenance ticket-counter madness, American will have to deploy additional staff to do the baggage triage. There goes some of that extra revenue Arpey was counting on.

Then there’s the stress that more carry-on bags will cause at security checkpoints. Fliers who would have normally checked their lotions-and-potions and other troublesome checkpoint items will now have them in their carry-ons. That’ll mean more time spent preparing for the screening process and clearing security.

Once these slowed-down, baggage-laden fliers reach their departure gate, they’ll run into dozens of other travelers who’ve also maxed out their carry-on allowance. With airlines running 80 percent full, that means a free-for-all for available carry-on space. American’s overworked flight attendants will have to police the planes, often going row by row to ensure that travelers have loaded bins effectively and used their under-seat space. That’s sure to delay flights—American ran an industry-trailing 62 percent on time in March—and delayed flights cost money. There goes more of Arpey’s $15-a-bag revenue stream.

But, wait, it gets worse. No matter how efficiently passengers and flight attendants arrange luggage, some passengers probably won’t have room to stow their gear. That means American’s gate agents will be required to gate-check the extras. That’s a time-consuming process. An agent must get a luggage tag, affix it to the bag, then hand it off to a baggage handler on the ramp, who must then stow it in the belly of the aircraft. More time lost.

How much time? No one really knows, but an international airline executive tells me that his flights have run an average of 15 minutes later since the carrier adopted a pay-for-bags system two years ago. “I don’t know how much is due to extra carry-on bags, but it’s a factor. It’s eating into the ancillary revenue we get from the baggage charges.”

Now the big fly in Arpey’s revenue ointment: The high cost of delayed and lost baggage created by too much carry-on luggage. Delayed flights mean missed connections and missed connections mean more of what the industry euphemistically calls mishandled bags. (American already mishandles 7.32 bags per 1,000 passengers; American Eagle’s rate is 13.08 per 1,000.)

My sources tell me it costs an airline about $60 in labor costs and trucking fees to return a late bag to a customer. That means each additional delayed bag American creates will wipe out the revenue of four checked bags. And woe to American if it loses more bags. Airlines are on the hook for as much as $3,000 in liability for lost luggage. Carriers rarely pay fliers that much, of course, but let’s say a lost bag eventually costs American $2,250 in cash payouts and administrative costs. At that rate, each additional bag that American loses will wipe out the revenue from 150 checked bags.

Like I said, you can’t fix stupid. You can only wait for Arpey to realize that charging $15 for a checked bag isn’t enough. Then he’ll raise to it $25, leading even more customers to try to fly only with carry-on bags, thus starting the cycle all over again.

The fine print …
None of American’s direct competitors—United, Delta, Northwest, Continental and US Airways—have yet matched the $15 checked-bag fee. But history indicates that they will. On the other hand, Southwest Airlines, the industry’s only profitable major carrier, has announced that it will continue to allow travelers to check two bags for free.

Airlines ponder how far they can push travelers

Carriers hike fees to raise money, but moves are upsetting customers

An AvFlight employee, right, pulls a fuel hose up to a plane on the tarmac at Harrisburg International Airport to fuel it before its next flight in Middletown, Pa., in this file photo. Higher fares and fees on everything imaginable are irritating air travelers, but airlines still can't raise money or cut flights fast enough to cover ever-higher fuel prices.

updated 4:54 p.m. ET, Thurs., May. 22, 2008

DALLAS - Higher fares and new fees are irritating air travelers, but airlines still can't raise money or cut flights fast enough to cover ever-higher fuel prices.  In the view of airline executives and analysts, the industry is facing its toughest challenge yet, with little prospect that carriers can return to profits anytime soon.

Even though most of the big airline companies have large cash stockpiles, analysts suggest they could burn through their cash and go bankrupt by early next year. Already, several smaller airlines have filed for bankruptcy protection or simply shut down in recent months.

"This is worse than 9-11," said Ray Neidl, an analyst with Calyon Securities. After the 2001 terror attacks, "at least you knew passengers were coming back. Oil at $130 is unsolvable."  Among the largest airlines, analysts rate US Airways as the most likely to be pushed into bankruptcy, followed by United Airlines parent UAL Corp.

Bill Warlick, an analyst with Fitch Ratings, said US Airways Group Inc. could face a crunch next winter if revenue drops in the slow fall travel season and fuel remains at current prices. He said the airline has fewer options for raising cash — it can't fetch as much by spinning off assets as others — and without strong international routes is more vulnerable to a weakening U.S. economy.

Just a few weeks ago, mergers were the talk of the airline industry. Delta Air Lines Inc. announced it would buy Northwest Airlines Corp., and executives of other carriers met to discuss other deals that analysts said would lead to bigger but more efficient airlines that could survive in a world of high-priced oil.  How quaint.

The price of oil has nearly doubled in the past year, and jumped 13 percent in just the last month, scrapping all those merger calculations and making airlines worry more about hoarding cash.  "This is going to hurt the consolidation effort," said Roger King, an airline analyst for Credit Sights. "When you put two companies together there are upfront costs, and cash is tight everywhere. American has more than $4 billion in cash, but that can go pretty quickly."

So airlines are raising fares — nearly a dozen times already this year — and mining other fees, anything to bring in money.  Airlines were already charging $25 to check a second piece of luggage, but American will break new ground next month by charging $15 for the first bag.

Citigroup analyst Andrew Light estimated that if the new fee hits 20 percent of American's passengers — elite frequent fliers, those paying full fare and international flights are exempt — it would raise $320 million.

But American's estimated fuel bill for 2008 has gone up $3 billion just since the beginning of the year.  American announced Wednesday it would cut 11 to 12 percent of its U.S. flights later this year and lay off workers — probably thousands of them, although officials declined to give a figure.

United announced last month it would cut 1,100 jobs and reduce flights, and Delta wants to cut 2,000 jobs.  Both United and Delta have already announced plans to cut capacity about as much as American, which would reduce their fuel burn and leave travelers fighting for seats on fewer planes.

"Less capacity will inevitably mean higher fares," said Southwest Airlines Co. Chief Executive Gary Kelly. Southwest has also raised fares but, unlike other U.S. carriers, is still growing, though at a much slower pace than a year ago.

Analysts said American's announcement was only a first step toward further cutbacks. Neidl estimated that the major carriers have made only about half the capacity reductions they need to push fares high enough so the airlines can break even.  Others worry that fares could rise so sharply that they will change the very nature of air travel.

Herb Kelleher, the iconic co-founder of Southwest Airlines who stepped down as chairman Wednesday, said flying could become something that only business travelers or the affluent can afford, much as it was in the 1950s and '60s.  "You may see a lot less air service across the United States, and that's really a shame," Kelleher said. "We are heading back in that direction."

Passengers are wondering how long they can afford to fly.  And many, like Roger and Kathy French of Ayer, Mass., who checked four bags on their return from Hawaii to Boston's Logan Airport aboard an American Airlines flight Thursday, are annoyed by the surge in extra fees.

"Pretty soon you're going to be paying more for your luggage than to get to your destination," Roger French said.  Patrick Illing, preparing to board a flight in Newark, N.J., to Los Angeles, said if airlines need to cover higher fuel costs, they should raise fares, not fees on bags.  "This way it's a little sleazier," he said.  Others were plotting how to limit their fees next time. Robin Grossman, a phone company manager from Lunenberg, Mass., also returning to Boston from Hawaii, said she'll think twice when packing   "I would travel, but I probably wouldn't take a second checked bag," she said. "I would try to carry on as much as I could."

American is already dealing with confusion over the new fee on a first checked bag. Spokesman Tim Wagner said passengers whose carry-on must be checked because the overhead bins are full won't be charged. He said only about half of U.S. travelers check at least one bag.  Other airlines were studying American's new fee, leading some analysts to suggest it was a trial balloon that American might yank back if competitors don't go along. Southwest's CEO said he doesn't like hitting travelers with a bevy of extra fees.

"We do not want to nickel-and-dime our customers because we know they'll complain and they won't come back," Kelly said.  Airline stocks have been pummeled with the run-up in oil prices — shares of American parent AMR Corp. lost 24 percent on Wednesday and are at their lowest level since the company teetered on the brink of bankruptcy in 2003.

American to charge $15 for first checked bag

No. 1 carrier also plans to cut routes, lay off workers amid high fuel prices

updated 4:04 p.m. ET, Wed., May. 21, 2008

FORT WORTH, Texas - American Airlines will start charging $15 for the first checked bag, cut domestic flights and lay off possibly thousands of workers as it grapples with record-high fuel prices.  Rival Delta has no current plans to match American’s fee for the first checked bag, a spokeswoman said.

American, the nation’s largest carrier, said Wednesday the fee for the first checked bag starts June 15 and that it would raise other fees for services ranging from reservation help to oversized bags. The other fees will mostly range from $5 to $50 per service, the airline said.

Last month American announced it would join other carriers in charging $25 for second bags checked for some passengers, but it wasn’t immediately clear how Wednesday’s announcement would affect that.  Its proposed fee for a first checked bag would exempt people who belong to elite levels of its frequent flyer programs, those who bought full-fare tickets and those traveling overseas.

Delta Air Lines Inc. spokeswoman Betsy Talton said the Atlanta-based airline is considering all of its options in light of $130-a-barrel oil, but has no plans “at this time” to match the $15 fee American announced.  Chairman and Chief Executive Gerard J. Arpey said he expects the new or raised fees will raise several hundred million dollars, but that was the best estimate he would give.

The changes were being made to adapt to “the current reality of slow economic growth and high oil prices,” Arpey said. He said the fees are an effort to get customers to pay for services they want.  Arpey didn’t put a figure on the layoffs, but when asked whether he expected the figure to be in the thousands he said yes.

American plans to cut domestic flight capacity by 11 percent to 12 percent in the fourth quarter. American had previously expected fourth-quarter capacity to fall 4.6 percent from the same period in 2007.  Parent AMR Corp. said reduced flying will lead to an undisclosed number of job cuts at both American and its American Eagle subsidiary.

AMR expects to retire 45 to 50 planes from its fleet, most of them gas-guzzling MD-80 aircraft. Those were the plane grounded for faulty wiring last month.  American said rising oil prices have increased its expected annual fuel costs by nearly $3 billion since the start of the year.  AMR shares tumbled after the announcement, which came as its shareholders gathered for their annual meeting.

United, Continental may be discussing alliance

Source says deal would allow combined operations without actual merger

updated 9:26 p.m. ET, Wed., May. 14, 2008

CHICAGO - United Airlines and Continental Airlines Inc. are talking about forming an alliance to gain some benefits of working together without going through a merger, which Continental rejected last month, a person close to the talks said Wednesday.

United is still pushing ahead with negotiations aimed at a combination with US Airways Group Inc. but would not pursue both deals, said the person, who was not authorized to speak about the matter and requested anonymity.

United, the nation's second-largest carrier, is expected to take up the matter Thursday at a meeting of parent UAL Corp.'s board of directors.

No vote is expected, and the person close to the talks said a decision is not imminent on which of three options currently under consolidation United will pursue: consolidating with US Airways, forming an alliance with Continental, or remaining a stand-alone carrier.

Chicago-based United had been close to combining forces with Continental until the Houston-based carrier said April 27 that it would not seek a merger. But Continental left the door open to an alliance with another carrier.

"As we've said over the last few weeks, we are examining our alliance relationships as we think it's important that we be a major player in one of the three major global airlines alliances," Continental spokeswoman Mary Clark said. United spokeswoman Jean Medina declined comment.

An alliance, in which the companies would work together in many ways but not merge their operations, would provide a way for them to raise more revenue without the integration problems that come with formal consolidation. It could set pricing and schedules and have U.S. antitrust immunity.

Mergers also can be highly disruptive, costly and risky for airlines. US Airways is still operating basically as two airlines more than two years after combining with America West because of disagreements between unions.

Continental is also still in discussions about an alliance with AMR Corp.'s American Airlines and British Airways, said an official with knowledge of those talks. That person also was not authorized to discuss the matter and requested anonymity.

The official said it would not be unusual for Continental to be considering alternatives, but that the British Airways-Continental-American talks are progressing and don't appear in jeopardy. British Airways publicly disclosed the talks April 30.

Bob Mann, an independent airline consultant based in Port Washington, N.Y., said he doesn't think an alliance between United and Continental is likely because it wouldn't go far enough to solve the carriers' cost and capacity issues.

"The United guys are very much heading in the direction of something that will really allow them to downsize the airline," he said. "We're talking about large capacity cuts. ... The alliance doesn't get to the point where you can really do the capacity-cutting."

The airlines are under more competitive pressure in the wake of Delta Air Lines Inc.'s pending deal to acquire Northwest Airlines Corp.

Combining United and US Airways would create a carrier rivaling the Delta-Northwest tandem for the title of world's largest airline.

Top 3 airlines boost fuel charge by $20

Citing fuel costs, American, United and Delta Air Lines hike round-trip fares

	The increases by the airlines affect the carriers' fuel surcharges, which now total $130 round-trip on many flights. That means passengers on some cheap flights could be paying more in fees and taxes than for the airfare itself.
Jeff Chiu / AP file

updated 1:04 p.m. ET, Fri., May. 9, 2008

NEW YORK - The three biggest U.S. carriers said Thursday they have again raised ticket prices, this time by $20 round-trip, to recoup rapidly rising fuel costs.

The increases by American Airlines, United Airlines and Delta Air Lines affect the carriers' fuel surcharges, which now total $130 round-trip on many flights. That means passengers on some cheap flights could be paying more in fees and taxes than for the airfare itself.

Delta Air Lines Inc. initiated the increase, which applies to most domestic routes. It is the Atlanta-based carrier's second hike in just over a week. The previous increase was quickly matched by competitors.

"This is obviously a result of the current market, and fares have to reflect the cost of doing business," spokeswoman Betsy Talton said.

Representatives for AMR Corp.'s American Airlines and UAL Corp.'s United Airlines said the carriers matched the increase on most routes Thursday.

Airlines have been racing to raise airfares, tack on surcharges, and charge for amenities such as extra bags and legroom as they struggle to cope with soaring energy prices. Many airlines now count fuel as their biggest cost.

The price of jet fuel, like gasoline, has risen rapidly along with the price of crude. A gallon on the spot market in New York was selling for $3.57 as recently as Tuesday, according to the Energy Information Administration. That is up about 78 percent from this time last year.

At the same time, carriers are cutting back on flights to reduce costs and maintain their pricing power as the economy slows. Even so, analysts expect many large carriers to post large losses this year.

"I would say to my CEOs: fasten your seat belts, tougher times are coming," Giovanni Bisignani, director general and chief executive of the International Air Transport Association trade group, said in an interview.

Rick Seaney, chief executive of airfare research site www.FareCompare.com , said the increases mean that fees and taxes together now cost more than the actual base fare on several short-haul flights.

"With a backdrop of a slowing economy, I continue to look for a tipping point where domestic air travelers begin to significantly push back on record high airline ticket prices. At best the jury is still out," Seaney said in an e-mail.

Senate inaction on FAA bill hurts passengers

Note to lawmakers: Improving the American aviation system is important

	Inaction on the FAA Reauthorization Bill will prevent them from hiring enough new controllers in timely fashion to replace large numbers of senior controllers now retiring, potentially affecting air safety in the U.S.
AP Photo/The Charlotte Observer, Todd Sumlin, File

By David Armstrong

updated 3:55 p.m. ET, Thurs., May. 8, 2008

When the Senate froze debate this week on a bill that would refund and reorganize the Federal Aviation Administration, it also froze Travelers’ hopes that badly needed changes in the nation’s aviation system would come about any time soon.

The House passed its version of a FAA bill in last September, but the Senate, caught up in partisan, election-year posturing, has not been able to get its act together. The Senate’s failure to act constructively on a matter of national significance matters, for a number of reasons:

1. It means the FAA cannot move forward quickly, as it needs to, to replace the nation’s antiquated, radar-based air-traffic control system with a next generation satellite positioning system

2. It means the FAA cannot move fast enough to replace large numbers of air traffic controllers reaching retirement age, or make plentiful new hires to supplement overworked, stressed-out controllers — the nation’s bulwark against deadly accidents in the sky and on the ground

3. It means the FAA can’t move forward fast enough to bring under control another matter of growing concern: the increasing numbers of runway incursions and near-collisions at congested airports.

Oh, the FAA isn’t going to go away. But the agency, which has come under withering criticism for safety lapses — some of it coming from its own inspectors — is just getting by instead of flying forward. FAA reauthorization goes before Congress every five years. The agency is presently running on a temporary extension, and even that extension will run out on June 30. Yet another temporary extension will probably come along, but that is reactive; what is needed is proactive thinking.

In the ignoble Washington tradition, Republicans and Democrats are taking turns blaming each other.

Republicans cut off debate on the Senate FAA bill on Tuesday because, they said, Democrats loaded the bill with non-aviation features, such as a funding stipend for U.S. highways and money for New York City transit projects. Had the bill passed, President Bush, who must sign a reconciled Senate and House bill for it to become law, said he would veto it.

Democrats blame Republicans for blocking a bill that would have included a passengers’ bill of rights, a popular measure in the wake of airline meltdowns that stranded travelers on planes for as long as 11 hours last year. The bill also would have allowed airports to raise fees on airlines — a measure understandably unpopular with money-losing carriers, but necessary, airport operators say, to generate revenue for upgrading crumbling airport infrastructure.

The bill also contained bipartisan features that would strengthen oversight of the FAA itself — no small matter for a watchdog agency that just watched as Southwest Airlines blew off mandatory inspections and flew un-inspected planes, and this week additionally admitted that it had skipped some 100 required five-year inspections of seven other U.S. carriers.

Reinventing the FAA and upgrading American aviation is much more important than suspending the gasoline tax this summer for family driving, though that election-season proposal has garnered much more attention from politicians and the mass media.

John McCain, Barack Obama, Hillary Clinton, where are you?

Airlines slow down flights to save on fuel

Jet Blue adds 2 minutes to each flight, saves $13.6 million a year in jet fuel

Airlines have found something in common with consumers struggling with fuel costs: Like drivers on a highway, they can get more miles per gallon, and save money, by simply slowing down.

David J. Phillip /AP

updated 6:30 p.m. ET, Thurs., May. 1, 2008

NEW YORK - Drivers have long known that slowing down on the highway means getting more miles to the gallon. Now airlines are trying it, too — adding a few minutes to flights to save millions on fuel. Southwest Airlines started flying slower about two months ago, and projects it will save $42 million in fuel this year by extending each flight by one to three minutes.

On one Northwest Airlines flight from Paris to Minneapolis earlier this week alone, flying slower saved 162 gallons of fuel, saving the airline $535. It added eight minutes to the flight, extending it to eight hours, 58 minutes. That meant flying at an average speed of 532 mph, down from the usual 542 mph. "It's not a dramatic change," said Dave Fuller, director of flight operations at Jet Blue, which began flying slower two years ago. But the savings add up.

Jet Blue adds an average of just under two minutes to each flight, and saves about $13.6 million a year in jet fuel. Adding just four minutes to its flights to and from Hawaii saves Northwest Airlines $600,000 a year on those flights alone. United Airlines has invested in flight planning software that helps pilots choose the best routes and speeds. In some cases, that means planes fly at lower speeds. United estimates the software will save it $20 million a year. "What we're doing is flying at a more consistent speed to save fuel," said Megan McCarthy, a United spokeswoman. 

United expects to pay $3.31 a gallon for fuel this year — not much less than what the average American driver pays for a gallon of unleaded at the pump. Southwest, which has an aggressive fuel hedging program, expects to pay about $2.35.  Fliers, already beleaguered by higher fares, more delays and long security lines, may not even notice the extra minutes.

The extra flight time is added to published flight schedules or absorbed into the extra time already built into schedules for taxiing and traffic delays. "If saving fuel costs me a few extra minutes out of my day, then ... my inconvenience is nothing," said Leah Nichols, a television producer who lives in San Francisco and was fresh off a flight at Newark Liberty International Airport, waiting for a train to New York. "I'm cool with that."

David Gannalo, a Phoenix financial software company executive, is more than willing to give up four minutes to help airlines cut costs. "Anything that helps the airlines, you know, because they're going bankrupt left and right," Gannalo said. "Anything that helps them out will probably be good for the industry in the long term." Across the board, airlines are feeling the pain of higher energy prices.

For jet fuel delivered at New York Harbor, the spot price — airlines pay it when they need more fuel than they've already locked down in a contract — has jumped 73 percent in the past year, to $3.54 a gallon, according to government data. Airlines are trying other measures as well to deal with higher fuel costs, including raising fares, adding fuel surcharges to tickets and charging extra for a second checked bag rather than a third. It's a tough time for the airline industry.

Several smaller airlines have filed for bankruptcy protection in recent weeks, many citing high fuel costs. Fuel costs have also resulted in sharp first-quarter losses by some airlines. Not every airline is taking the slowdown approach. "We have the flying schedule to protect," said John Hotard, a spokesman for American Airlines. He said the carrier does other things to save fuel — for instance, installing small vertical stabilizers called winglets to the ends of some aircraft wings, which boosts fuel efficiency by improving aerodynamics. 

American also tries to keep its planes plugged in to ground-based power and air conditioning for as long as possible to conserve fuel, and pushes air traffic controllers to assign its flights to altitudes where they will have less headwind or greater tailwind. Many other airlines have adopted similar measures. Slowing flights down isn't a magic bullet. It can help airlines conserve fuel, but it can also lead to greater labor and maintenance costs if airline employees work longer hours and planes spend more time in service, said Bob Mann, an independent airline consultant based in Port Washington, N.Y. And slowing down to conserve fuel can only be pushed so far:

Below a certain speed — which varies depending on the plane — an aircraft's fuel usage can actually rise. Airlines must strike a delicate balance, seeking an aircraft's "sweet spot" on fuel use without slowing down so much that other costs, and flight delays, rise, Mann said: "Everything's a tradeoff." 

Consumer advocates say the extra minutes shouldn't matter. "If it means that airlines can keep their costs down, keep their ticket prices down, and save a little fuel, that's fine," said Travis Plunkett, legislative director at the Consumer Federation of America.  But others doubt the change will result in lower fares any more than previous cost cutting, such as eliminating meals or taking away blankets. "I don't think so," Mann said. "When they took off the mystery meat, did they lower fares?"

Airlines give propellers another spin

Amid soaring fuel costs, a new generation of turboprops is selling briskly

	Horizon Air is North America's largest operator of the Bombardier Q400 turboprop, with 33 in service, and has operated the type since 2001.
Alaska Air Group

Queue up at Newark, N.J., for the 8:10 a.m. Continental Express flight to Baltimore, and you may be startled to find what many people consider a throwback to the 1970s: A plane driven by propellers, not jet engines. Get ready for more of them. The soaring cost of fuel is rapidly reshaping the landscape for regional flights at many airlines, leading to interest in a new generation of turboprop planes.

Most of the props are being deployed on trips of less than 500 miles. Beyond that, the economic advantages of a small jet kick in. For example, turboprops are now used heavily on routes such as Newark to Toronto; Seattle to Portland, Ore.; and San Jose, Calif., to Boise, Idaho. The two main beneficiaries of this trend are Montreal's Bombardier and the French-Italian aerospace joint venture ATR.

Alaska Air Group's regional subsidiary, Horizon Air, announced on Apr. 24 that it would convert its entire fleet to Bombardier's 76-seat Q400 prop within two years. "Through its combination of passenger comfort, speed, and efficiency, the Q400 is the best aircraft for the majority of our markets," Horizon Air President and Chief Executive Jeff Pinneo said in a prepared statement.

In October, German discount carrier Air Berlin decided to supplement its 124-jet fleet with its first-ever turboprops on shorter hauls, selecting the Q400. Earlier this year, Continental began deploying Q400s from its Newark hub to 10 cities served by regional partner Colgan Air, in a move to add greater seat capacity without the expense of larger jets. That airport's traffic is now controlled by federally supervised slots, as are other New York-area airports. "One of the main things we like about it is that, compared with a regional jet, we get almost 50% more seats in the air for each arrival/departure slot used," Continental spokesman Dave Messing said in an e-mail message. "We also get that extra capacity with virtually no extra cost vs. the jet."

These shifts are a nod to the airline industry's radically changed finances as crude oil flirts with $120 a barrel. The cost of jet fuel is up more than 60% in the past year. The move from smaller jets to larger craft—both jet and turboprop—is coming as airlines race to cut costs and find new revenues. Fares have surged 10.2% in the past 12 months, including a 3% jump in March, according to new inflation data from the Bureau of Labor Statistics. The airlines have also imposed a bevy of new luggage and seat-assignment fees this year.

The backbone of U.S. regional flying, the 50-seat jet, made a splash in the 1990s as a way for airlines to serve smaller destinations and to bolster frequencies on heavy-traffic routes. The higher fuel-burn rates of jets wasn't much of a factor then, since crude oil traded below $12 per barrel in late 1998 and didn't breach $40 until 2004. On Apr. 29, crude was at $115.61 a barrel, a day after setting a new record of $119.93.

This explains why the 50-seat jet has become a financial albatross on many routes. On shorter trips, a jet's operational advantages quickly disappear. A jet uses large amounts of fuel on its departure "climb out" and works best financially when it's able to reach thin-air altitudes above 30,000 feet, zipping along at a normal cruise speed of 500 mph to 530 mph with a full payload. Regional jets work well on routes such as Los Angeles to San Francisco, Chicago to Dallas, Atlanta to Denver.

Shorten the route, though—and triple the price of fuel—and a new-generation, large turboprop starts making a lot more sense. "A, it holds a lot of people, B, it goes pretty fast, and C, it's more efficient on shorter routes," says Roger King, an airline analyst for Credit Sights, an institutional research firm in New York.

A Q400 cruises at about 415 mph at an altitude of 25,000 feet. Alaska says the Q400 is the most efficient craft in Horizon's fleet, using 5.8 gallons of fuel per passenger on a 400-mile route, compared with 6.2 gallons on a larger, 88-seat CRJ900 Bombardier regional jet, and 7.7 gallons on a 72-seat E170 Embraer jet. Horizon acquired its first turboprops in the 1990s when it was unable to secure any 50-seat regional jets, says Rudi Schmidt, vice-president for finance at Horizon Air. Now, says Schmidt, "I have folks approach me all the time and say: 'Hey, you want 100 of them?' And I say: 'No, I don't even want one of them.'"

Of course, what makes sense financially to an airline may not wow a passenger. Many fliers recall turboprop travel as an unpleasantly cramped, noisy, smelly, bumpy proposition. Advocates of the new generation of props say technology has rendered those hardships a thing of the past. Vibration-tamping techniques help smooth choppiness from the plane's lower flight altitudes, while new noise-damping technologies muffle engine noise. The Q400 is "a turboprop that thinks it's a jet," quips Robert Deluce, CEO of Toronto's Porter Airlines, which flies the plane.

Public indifference?
Customer acceptance will be key, much as it is with the new generation of clean-diesel auto engines that are slowly making their way back into U.S. dealerships. Turboprops will become even more mainstream "when passengers become indifferent ... and they are indifferent on short-haul flights," says Donald Carty, former CEO of American Airlines (AMR), who now serves as chairman of Porter and Virgin America. "I think you're going to see a lot more of these types of aircraft these days."

Another factor that might work in prop planes' favor is that some consider them "greener." Bombardier says its plane burns 30% less fuel than comparably-sized jets and emits 30% less carbon. A turboprop's maintenance costs run slightly higher than a jet, but pilot training and crew costs are lower.

The company says Q400 orders more than tripled, to 80 planes, in the 12 months ended Jan. 31 compared with the year-earlier period, giving it a total of 300 firm orders for the aircraft. The $27 million Q400 retails for slightly less than Bombardier's three regional jet models, which come in sizes between 70 and 100 seats and cost $30 million to $39 million. The company is studying whether to launch a stretched, 90-seat model, the Q400X, but no decisions have been made.

Still, don't expect all small, short-haul jets to disappear even if fuel prices continue climbing. They hold a certain appeal that goes beyond bottom-line economics. "Jets are sexy," admits Schmidt, the Horizon VP. "They're fast, they're pretty, blah, blah, blah."

ProAero CEO: Roberto A. Germain in the News

Order By Date

• Is aviation training school worth the price? (Part 2)

  May 2, 2005 at 2:38 PM CDT

  Wichita’s four aviation companies, along with the city, state, county and school district are all paying big bucks to solve what KTTI claims will be a shortage of aircraft workers in the future. More

   

• Is aviation training school worth the price?

  Apr 29, 2005 at 3:26 PM CDT

  The Kansas Technical Training Initiative is a program that has taken hundreds of thousands of tax dollars and was supposed to be training laid off aircraft workers. So far, all that money has produced five students who have received FAA certification. More

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