Wednesday, January 30, 2008
At 45, 20-year airline veteran, Rene Foss insists she will never give up her career as a flight attendant. “I’ve given the airline industry the best years of my life,” she announced. “Now I’m going to stick around to give them the worst.”
Spoken like a true veteran of the airline cut-backs. Rene Foss might not have borne her second career from desperation to make ends meet after knife-slashing budget cuts, but the modern-day airline industry and comedians make good bedfellows these days.
Flying the friendly skies provides never-ending comedy fodder for Foss. In her one-woman show (and a book by the same name), “Around the World in a Bad Mood, Confessions of a Flight Attendant”, she ridicules everything about the airline industry “from the bonus-grabbing bigwigs and the pistol-packing pilots to the passive-aggressive flight-attendant supervisors, the airport security screeners with busy hands and the flight attendants whose code phrase to a demanding passenger, ‘I’ll be right back,’ means buzz off.”
Foss’ mother was a stewardess in the 50’s when flying was glamorous. No more says Foss. Compared to the glam days, today’s experience at 30,000 feet is more attuned to Wal-Mart.
Foss is democratic if nothing else and doesn’t spare herself as the butt of her jokes. She once evoked the title of a 1960s book about stewardesses in another era “when I asked a passenger, ‘Coffee, tea or me?’ He said, ‘Are there any other choices?’ ”
Her explanation about why her fictional airline does not serve food: “Our seats didn’t get smaller; your butts got bigger. Therefore, in the interests of comfort, there’ll be no eating.”
And what is the spiritual toll of smiling through boredom, resentment and trash collection? Passenger’s sense of entitlement and pilot arrogance? “Don’t get me started!”
One theater manager had a brilliant idea, “Why don’t we pretend we’re an airline and sell 215 tickets, and then I get up on stage before the show and announce that we’re overbooked and we need 15 volunteers to leave before we can start the show!”
Everybody is a comedian…
“Around the World in a Bad Mood” can be seen in Chicago in February and New York City in April.
Tuesday, January 29, 2008
The major carriers have continued to cross the fuel surcharge-line, time and time again. And each time the passenger public balks and the airlines retreat. It’s nice to have power. But it’s also nice to have a healthy, profitable transportation industry, instead of watching it continually teeter on the edge of bankruptcy.
After emerging from the bankruptcies following September 11, airlines were just starting to break out of the red when skyrocketing fuel prices dashed them back into the red sea. “In recent years, major U.S. airlines have seen fuel costs rise from 10 percent to as much as 40 percent of their overall operating expenses,” the Los Angeles Times reported. A spokesman for American Airlines said 33 cents of every dollar it takes in goes to pay for fuel.
Sounds simple, right? Just include the gas surcharge in the advertised rates. The Department of Transportation allows the fuel surcharge to be handled as a separate expense from the published ticket price and airlines, in order to compete, want to offer the lowest possible rates on travel search sites such as FareCompare.com. Consumers feel that the fuel surcharges should be reflected in the ticket price and not as an unexpected add-on.
Which is worse, no customers or customers with angst? Some travelers see the fuel surcharge listed as a separate expense as a deceptive ploy.
It's not just the airlines that are tacking on fuel fees.
Carnival Corp. just announced that it will assess a $5 per day, per passenger, fuel surcharge on its North American cruise ships after Feb. 1. This applies to all the company's cruise lines: Carnival, Costa, Cunard, Holland America, Princess and Seabourn.
The latest attempt by some carriers applied the surcharge to a limited number of flights pressuring those carriers who were applying the charges across the board to back down.
The game continues.
Friday, January 25, 2008
Gracie Mae's airport security breach is destined to be a favorite on the video rounds. And for good reason. What a story!
The cat's in the bag - literally.
Remember to lock your bags when checking your most valuable possessions!
Don't try this at home.
Wednesday, January 23, 2008
By Travel Sentry
As as a result of 9/11, airline travel today is fraught with many rules, regulations and procedures that all travelers must comply with. It's just the way things are in the name of security.
Travelers are asked to comply to guidelines on what or what not to pack in checked or carry-on luggage and well as producing acceptable identification for U. S. citizens ( valid driver's license if traveling within the United States and U.S. territories or by land to Canada and Mexico; otherwise a valid U.S. passport is required).
Since rules change periodically, it is important that travelers keep informed of changes since their last trip. Information on current guidelines can be found at tsa.gov.
It is also important that baggage is secured with TSA-approved locks with the Travel Sentry Red Diamond logo. These special locks allow TSA screeners to inspect luggage and re-lock luggage avoiding unauthorized locks being cut off and discarded, leaving checked luggage unsecured after the screening process.
Being informed can minimize problems and delays during the travel experience.
Be a part of the solution and not the problem. Stay informed. The lines will move faster and all your belongings will get to your destination with you.
Safe and secure travels.
Tuesday, January 22, 2008
But in the all-out competition game between the airline carriers much is at stake and if a reasonably good bottle of wine will convince passengers they have made the correct choice in airlines…well, why not go ahead and pair that lovely buttery Chardonnay with the perfectly-roasted nut offering.
The trend towards providing better in-flight fare - if that trend can be believed and maintained amongst a tug-of-war between “better” and “budget” – is one that is all about dressing up the airline’s brand. “Anything for a Buck-Chuck” wine is simply not good enough anymore.
While most are making an effort for overall wine offerings, even in coach, it is the lucrative first-class customer that is the real target of the wine efforts. Mike Boyd, president of Boyd Group, an airline consultancy in Colorado points out, "There's a battleground for survival in front of that first-class curtain, where each seat costs as much as a suburban home. You're probably looking at 65 percent to 70 percent of the airline's revenue coming from in front of that curtain.”
Airline wine offerings have even risen to a level to merit their own wine competitions. Last year Global Traveler sponsored the first ever airline wine competition. I have been conditioned to expect the worst (along with the rest of the traveling public) when considering a wine selection on an airline (by that I mean a choice of beyond red or white) so the thought of an airline wine competition brought on a derisive snicker. But apparently GT’s wine competition, presented as the first annual “Wines on the Wing Awards”, was a very prestigious affair:
“On a blustery spring day in midtown Manhattan, 35 prominent wine judges gathered at the Millennium Broadway Hotel to swirl, sniff and sip the wines airlines around the globe are serving in their business and first-class cabins.”
The winners? “Iberia Air Lines of Spain-winner of the Wines on the Wing Award with five wines totaling the highest score-submitted five wines from Spain. All Nippon Airways (Japan) came in a close second with wines chosen from California, New Zealand, Australia and France. Icelandair, the third-highest scoring airline, also roamed the world's vineyards, selecting its wines from Italy, Australia and France.”
Virgin Atlantic also got a nod for its Pieve di Spaltenna 1999 from Tuscany and Icelandair came in third with another Italian wine, Altavilla Della Corte 2001 from Sicily. Champagne? Varig Brazilian Airlines and Thai Airways tied for first place and Quantas cruised in at number two for their bubbly. EVA Air (Asia) was recognized in the category of best overall wine list.
I didn’t see any U.S. airlines in the winner’s circle. In years past when flying business or first-class I noticed the wines listed in their menus did not always match the wines being served. Airlines often buy sell-outs from distributors or vineyards where they could negotiate better prices for reasonable wines which explains the often wildly varying vintages sometimes found onboard.
But that haphazard consideration of airline wine selections could all be changing with the emergence of airline sommeliers.
When it comes to U.S. carriers, American Airlines has led the way in the planning and procurement of their wine selections. Dr. Richard Vine (can’t make this stuff up), the wine curator for AA for over 20 years, recently retired and was succeeded by Diane Teitelbaum. Her vision for AA is to move in new directions increasing staff training and refining wine-and-food pairings. AA goes through some half-a-million cases a year, spending more than $10 million annually. American Airlines maintains 15 first and business-class wine lists with a total of about 60 wines. The lists change monthly.
Coming on strong in the in-flight luxury upgrades is Delta Air Lines who is introducing a new range of in-flight wines chosen by TV host and wine expert Andrea Robinson. Delta’s new sommelier has redesigned the airline's wine list to complement a new food menu created by Michy's chef Michelle Bernstein.
The newly selected wines will debut alongside the menu in February on Delta's BusinessElite flights. A Delta SVP says,"Andrea's selections are perfectly matched with Chef Michelle Bernstein's superior cuisine offerings in BusinessElite and appeal to our valued first and coach-class customers, making for a memorable flight experience." Did you say coach?
US Air is also going where it’s never gone before. “After several years of settling for whatever was cheapest, US Airways is upgrading its wine list, especially in first and business class. A survey of frequent fliers last year found that passengers rated the wine in US Airways' pricey Envoy class — its business class service to Europe, where competition is stiff — a 6.8 out of 10,” reports USA Today.
"We knew we could do better," said Kevin Jackson, managing director of consumer and partnership marketing for US Air.
While not going so far as to hire a dedicated sommelier, US Air has embarked on a mission to upgrade its wine selections. USA Today reported that US Air instead put some of their employees to task on the wine-tasting detail and supplied them with spit buckets, wine, and a rating sheet. Voilá! A new wine list is born from the employees-turned-wine tasters for its business-class service to Europe.
US Airways is not going all out, to be sure - no lofty aspirations to place first in airline wine competitions. US Air is simply trying to improve the wines it pours its best customers without busting the budget. You’ve got to admire their honesty.
Luxury is the larger picture for airlines. Luxury with a capital “L” has of late been the market segment that has remained undeterred in a world economy that is showing signs of fractures if not potential landslides. Major carriers across the board are polishing their brands to be more enticing for the luxury and business traveler.
The long haul overseas routes are the most profitable for airlines. The huge time and fuel drain on short runs is mammoth compared with the operating economies and ticket value of the long-range flight. And passengers are much more willing to pay the bill for luxury on the likes of Singapore Air’s 380 Airbus. U.S. carriers are playing catch up to Asian carriers when it comes to luxury.
For many years it seemed that first-class travel was dying a slow death. No longer. The true luxury market in air travel is making a huge showing surpassing the business-class segment. Luxury services and the $15,000 ticket are making a “glittering return”.
Emirates Airlines was the first to offer fully-enclosed first class suites when it launched its North American service in 2004.
Singapore Airlines that stole the show this year with the suites on board its first A380 Superjumbo. Singapore Airlines has described its new level of service as "beyond first class", suggesting what an airline must now do to mark the premium service from business class.
Behind the sliding doors of the cabins, passengers can get a leather seat completely separate from the bed, a 23-inch widescreen LCD television as well as finest drinks and food designed by leading chefs. There are even double beds for traveling couples.
As Chew Choon Seng, Singapore Airline's CEO told CNN on the maiden voyage, "we have always believed in the romance of travel and we are trying to bring back more of that."
Naturally, the biggest market for first-class is on the longer-haul flights particularly on routes between London and Hong Kong, Sydney and Los Angeles, Singapore and London.
Tell me more about the double beds for traveling couples…What’s for dinner?
Wednesday, January 16, 2008
Guest Contributor, Joseph R. Rollins, CPA, PFS
Delta is leading the race in merger-mania so it seemed appropriate to invite Atlanta’s own financial guru, Joe Rollins, to weigh in on the discussion and lend expertise to the airline investment potential in this pivotal year. As you will see, Joe offers an insightful analysis as well as an entertaining look at the ease, allure, and glamour of flying just a few short years ago:
As a financial advisor, I’m often asked my opinion on what the future holds for the financial performance of various industries. With the almost assured forthcoming merger of certain airliners, many investors are wondering about the potential financial implications of that merger. To give some insight in that regard, I’d first like to reflect on how much the industry has changed over the last 40 years that I have been flying.
In the 1970’s, I was able to leave my home and park smack-dab in front of the old Hartsfield International Airport in Atlanta just a half hour before a Southern Airways flight’s scheduled departure time. You never really needed to worry about getting to the airport on time since Southern Airways flights never left on time anyway. Back then, there were no security or parking issues at the airport, and we certainly didn’t have to deal with any uncomfortable congestion once inside the terminal. Airline travel was efficient and uncomplicated in those days, but things sure have changed!
In 1975, I flew between the Tri-Cities Regional Airport in Tennessee and Atlanta fairly frequently, and I almost always took a four-engine propeller plane operated by Piedmont Airlines. While Piedmont was efficient at getting their passengers from Point A to Point B, they definitely weren’t known for being the ultimate ride in luxury. On most flights, the roar from the prop engine was so loud that you couldn’t even have a conversation with the person sitting next to you. Despite the bare bones nature of Piedmont, the return flight from Tennessee always had a ton of vacant seats, so it was easy to take a nap across all three seats in a row before arriving in Atlanta – definitely plus after a hard day’s work. Those were the good old days….when you could actually fly between the Tri-Cities Airport and Hartsfield International faster than it would take you to drive the exact same distance.
I doubt very seriously that many people remember when air travelers dressed up for a flight. Back then, it was actually quite common for men to wear suits and ties on a flight. Airline travel was an expensive luxury, and so people went out of their way to look nice. Although there was no dress code, you rarely saw anyone boarding a flight in blue jeans or shorts.
Air travel was cost prohibitive for most folks until the discount airliners entered the scene. One of the first discount airliners I remember was Braniff Airways, which was known for its big, loudly painted fleet of planes. I recall boarding a flight from Dallas to Wichita and growing concerned about the large chips of paints missing from the outside of the plane. It made me wonder whether the engines were equally ill-maintained, but nevertheless, the tickets were cheap and they got me where I wanted to go.
Like I said, times have changed. Airline travel has become a commodity over the last several years, so much so that whichever carrier offers the cheapest flights is the one that wins the customer. And this has led to some huge financial consequences within the airline industry.
Before airline travel was deregulated during the Reagan administration, there was a distinct difference in air travel and in the carriers themselves. Since all air travel was regulated, most big carriers offered the same perks and airfares. There really was no price advantage in choosing one airline over another due to government regulation, so folks tended to be loyal to one airline for the services it offered and the luxuriousness of the flights. You either liked an airline’s snazzy interiors, its exceptional meals or, of course, its attractive flight attendants. My preference in those days was Eastern Airlines, because they had a “stewardess,” who I hoped would take some special interest in me. (For those of you who aren’t familiar with the term “stewardess,” it’s the now unacceptable and chauvinistic term for “flight attendant.”)
These days, airfares have become the most important decision-making factor for air travelers. Most people are typically only interested in how much the ticket costs and whether a flight is leaving when they want to go. There are no luxury services offered by the various airlines anymore, and I highly doubt passengers evaluate an airliner’s safety history prior to purchasing a ticket. Folks just want to get where they want when they want, and for the cheapest price.
Turning to investing in the airline industry, it probably could be said that the last person who actually made money on an investment in an airliner was Howard Hughes. If he’d been allowed to hold his investment for much longer, he would’ve lost it too. However, when the U.S. government required him to sell his shares in TWA in 1966 for a net profit of $547 million, he was truly a man made wealthy by investing in the airline industry. Since that time, I couldn’t tell you how many times TWA has been bankrupt, but I’m probably correct in guessing it’s been in bankruptcy more often than not over the years.
It is also true that the airline industry has suffered from its incredible inability to deal with competition. For a while, it seemed that another discount airliner was popping up every day, each with a better idea of how to fly cheaper than any other airliner. When Eastern Airlines announced it was shutting its doors (a sad day for Atlanta), many discount airliners stood in the wings, waiting to take over Eastern’s old gates at Hartsfield. As we all know, it wasn’t long before all of them also went bankrupt.
Starter airliners all seem to have a common trend from an investment standpoint. They all do well out of the gate (no pun intended) until the planes require some maintenance. JetBlue comes to mind as an example of this trend. As recently as 2003, JetBlue’s stock traded for as high as a split adjusted $31.50, only to be trading at a lowly $4.50 per share today – a decline of 86%. As long as their are under warranty, they seem to do fine. But once they are required to have some maintenance done, the airliner starts to falter. My point is that almost no one has successfully proven that the airline industry is easy to run, efficient or inexpensive to operate, which makes it a difficult industry to invest in. Only one airliner has been successful year-in and year-out – Southwest. Even so, Southwest isn’t a very good investment since it sold for $19 per share in 2003 and $12 today.
The airline industry suffered a major blow in 2001 with the heightened security requirements placed on them after September 11th. While it is true that the government bailed out the airline industry, they also stifled their ability to grow and be profitable with outrageous and ever-increasing security expenses.
When Senator Tom Daschle, former U.S. Senate Majority leader, pushed through the federalization of airport security, it was almost the proverbial fatal blow to the industry. Coupling the security cost with ever-accelerating fuel charges led to virtually every major U.S. airline operating out of bankruptcy since 2001.
While it is true that costs to commercial airliners have accelerated, virtually every industry in America has suffered the same fate. For example, FedEx and UPS do the same thing with packages that the commercial airline industry does with people – they get things from Point A to Point B at a charge. But the overnight shipping companies have added fuel surcharges to accommodate for the higher costs, and the overnight shipping industry has still continued to flourish. All truckers, railroads, and couriers have made adjustments for the higher fuel costs, but the airline industry just can’t seem to get it right.
Like I said before, a major component that hurts those who invest in the airlines is the airliners’ inability to deal with competition. It seems like the airline industry continues to be cutthroat to its own detriment. Almost daily, I read about an airline going up $5 or $10 on a fare, and since the other airliners will not also increase their fares, they are forced almost immediately to drop the fare back down. There is not one principal airline that can put through a rate increase and make it hold.
I think that the upcoming merger in the airline industry will do a great deal to financially benefit the industry. Unquestionably, there will be consolidation of two or three major airlines and that consolidated airline will be the only one that will fly coast-to-coast. There will definitely be many regional flyers and discount charter planes, but if you expect to fly coast-to-coast when you want to, you can expect to pay a higher price in the future for your ticket.
A good example of the ultimate decline of the airline industry is the fact that you can fly from Atlanta to Miami for less than half the cost of a Greyhound bus ticket. Something is gravely wrong with the airlines’ fare structure when someone can hop on a plane for less than half the cost of taking a dirty Greyhound bus somewhere.
It is clear to me that air travel will become more expensive in the future. However, I don’t think that’s an indication that airline stocks will become good investments. How long has it been since you were on an airplane that wasn’t totally full? I’m sure you’ve noticed that it’s rare for a meal to be served on a flight these days, and the days when you could read a magazine or newspaper on a flight for free are long gone.
Air travel is now a commodity and not a privilege, and there really is no way for the airliners to cut costs any further. Nevertheless, they continue to operate unprofitably. The future of airline travel, from a financial standpoint, is higher ticket prices. However, the never-ending competition keeps airfares cheap and available to all travelers, even with the incredible difficulties the airline industry faces today.
Mergers within the airline industry will occur, but not because it’s in the best interest of the consumers. Yes, there will be antitrust concerns, but believe me, the government will look the other way. The government wants these mergers to occur since the government will soon be in the business of bailing out the airline industry if they don’t happen. It is better to have the industry in the hands of private enterprise rather than run inefficiently by the government.
In summary, if investing in airline stocks today is of interest to you, I suggest you think twice about making that investment. It’s okay to buy one of those stocks for the short-term, but be prepared to lose money. If you truly enjoy the airline industry and want to invest in it somehow, then I suggest you research the stocks of Boeing (the airplane manufacturer), GE (which makes the engines), and Rockwell (which makes the instrumentations for airplanes). There are literally thousands of suppliers that furnish products to the airline industry, and each and every one is incredibly successful and highly profitable. Unfortunately, the only one that has been an ultimate failure from an investment standpoint is the end-user: the airline industry.
Tuesday, January 15, 2008
Imagine the ultimate video game…maneuvering thousands of 300-ton airplanes through the virtual air, each filled with hundreds of passengers…in a storm. You sit in front of your computer screen and maneuver the flight patterns to guide your charges, maybe up to 100 in an hour, to a safe landing. You are mentally spent – exhausted – but hours of piloting lay ahead with more planes inbound. The storm is not abating. It’s going to be a long night.
The job of an air traffic controller may be the only known cure for those addicted to high-tech video games. Reality surpasses the imagination in this profession. You can’t make up this stuff. And the stakes are enormous.
During peak air travel times in the United States, there are about 5,000 airplanes in the sky every hour. This translates to approximately 50,000 aircraft operating in our skies each day. It is the task of the air traffic controllers, under the aegis of the Federal Aviation Administration, to keep these aircraft safe. They must coordinate the movements of thousands of aircraft, keep them at safe distances from each other, direct them during takeoff and landing, direct them around bad weather, and ensure that traffic flows smoothly with minimal delays. In short, it is their job to navigate the airways, prevent accidents, and minimize delays.
There is no shortage of controversial subjects concerning the airline industry and air traffic control joins in the fray. The labor union representing the nation’s 14,800 controllers is in heated debate with the FAA over safe staffing levels.
The National Air Traffic Controllers Association, NATCA, contends that there is a shortage of experienced air traffic controllers resulting in a “staffing emergency” that is jeopardizing safety in the nation’s airspace.
Patrick Forrey, president of the NATCA, said in an interview with CNN, "The whole system is going to hell in a handbag, and it doesn't seem that anybody cares. These people [controllers] are being overworked ... and people are going to make mistakes," he said. "The time is ripe for a very serious catastrophic event on one of these runways."
The NATCA has a history of staffing level disputes with the FAA but last week they turned up the heat with the “staffing emergency” language intended to draw public attention.
NATCA sees the most immediate problem areas as Atlanta, Chicago, New York and Southern California with the safety situation more serious than has been stated to date. The union is also reviewing staffing levels elsewhere and may add Orlando and Las Vegas to its list of trouble spots.
But the FAA says hold it, hold it – not so fast. Laura Brown, a FAA spokeswoman called the union's figures "misleading" as the number of new air traffic controllers hired last year exceeded its projection.
"At the end of the fiscal year, we had a couple hundred more (controllers) than we had at the end of the previous fiscal year," she said. "We wouldn't be operating these facilities if we thought they were unsafe. The FAA met its goal of having 14,618 controllers by the end of fiscal 2006 and exceeded its fiscal 2007 goal, ending the year with 14,874 -- some 67 more than anticipated," she said. "It is on target to have 14,961 by the end of the current fiscal year."
But the question begs whether the FAA projections of adequate staffing is sufficient for the nation’s current air traffic. OK, they made their numbers but if the numbers are inadequate, the safety issue would be valid.
NATCA says that experienced controllers are demoralized and fatigued and are leaving the work force in record numbers. Forrey says that new trainees are being placed in large metropolitan airports straight-away instead of grooming them in smaller airports as was always the policy in the past. “Some of the 14 trainees at Atlanta’s Hartsfield-Jackson International Airport have no previous control tower experience outside the classroom.”
Like putting a new boot camp graduate in a general’s position?
"We've never taken people off the street or out of college and put them into those kind of facilities," he said. "It's just unprecedented."
“In the Southern California region, the shortage has bumped overtime expenditures from $261,000 in 2004 to $2.8 million last year," Forrey said, adding, ‘If that is not any indication that people are being overworked ... I don't know what else is.’”
The FAA responds that the NATCA is trying to renegotiate the controller’s contract. CNN reports, “NATCA's contract with the FAA expired in 2005, and negotiations over a new deal broke off in April 2006. Later that year, the FAA, with the tacit approval of Congress, imposed a new contract on controllers.”
Controllers earn between $36,000 and $87,000 depending on experience and some other geographical and industry considerations. The median income is about $65,000.
Forrey says yes, he wants to go back to the bargaining table to stem the flow of exiting controllers and entice back to the industry the recently departed controllers.
In the meantime, is our safety at stake? The game continues.
What does it take to be an air traffic controller?
To be a ground controller, you have to memorize the position of aircraft on the runways and taxiways with a single, short glance. Local, TRACON and ARTCC controllers must be able to think and visualize in three dimensions. All controllers must be able to gather information from what they hear, make decisions quickly and know the geography of their own airspace, as well as that of others. They must be able to read and interpret symbols as well as predict the whereabouts of aircraft from course headings and speeds, and they must be able to concentrate intensely. To test your skills as an air traffic controller, see pages 17 through 67 of the "Gate to Gate" CD ROM: Student Activity and Career Guidance Package.
Monday, January 14, 2008
In 2007, the big six, American, United, Delta, Continental, Northwest, and U.S. Airways, were profitable and out of bankruptcy simultaneously for the first time in nearly a decade. But some say, not for long. Employees laboring under continual pay cuts are grumbling, fleets are aging, fuel prices are skyrocketing, and passengers are feeling disenfranchised.
The big carriers are continuing to lose domestic market share to aggressive and flexible upstarts like Southwest and JetBlue. Looming on the horizon is also the threat of further competition from foreign carriers if the anticipated negotiations over the Open Skies treaty open domestic routes to European airlines.
So are mergers the answer? Consolidation is often purported as a means to improve the ailing health of a financially beleaguered industry, but the track record of airline mergers has not often resulted in anticipated gains and delivery of promised benefits. The track record of airline mergers for the employees, the passengers, and at least the long-term stockholders, does not instill confidence for this next round of merger-mania.
Although the Air Transport Association predicted profits for the U.S. airline industry for 2008, the looming economic storm clouds threaten huge losses. If the airlines are hit once again, the pressure to merge will finally force huge changes. “Short of that, we will likely see carriers try to sell off more assets, spinning off subsidiaries like regional airlines, frequent-flier programs and maybe even maintenance divisions,” predicts the Wall Street Journal.
“Either way, a slowing economy and high fuel prices will exacerbate already huge financial pressure on airlines.” If 2007 operation and employee cut-backs leave no more meat to carve from their bottom line, mergers may be the only fix. Some say the long lines at airports, the overbooked planes, the lost baggage, and less passenger service clearly show the seemingly impossibility of more cuts.
Most airlines are flying at or near maximum capacity so mergers will have little effect on optimizing ticket sales. Fuel cost is now the largest expense for most airlines, overtaking labor as the biggest line item expense. But labor increases could result if mergers allow for and necessitate a revisit current concessionary labor contracts.
United and Delta are the second- and third-largest carriers by traffic behind American Airlines. Continental is No. 4, and Northwest is No. 5. The merger of any of the big carriers can expect microscopic regulatory scrutiny. Many in the industry feel that airline consolidation stands a better chance for approval by the antitrust authorities under the current administration.
Airline employees and passengers…let’s hope we will survive.
So the race is on. Good luck and we'll see you at the finish line.
Gentlemen…start your engines.
Sunday, January 13, 2008
It could have been Zeus parting the heavens when the new “Open Skies” agreement literally unlocked the skies for U.S. and European airlines. The new agreement, which goes into effect March 28, allows European airlines to fly to the U.S. direct from any city, not just from a city in their own country. Prior to this agreement, British Airways could not fly direct from Paris to New York or Air France from London New York. The skies, for now, have now been somewhat liberated.
What a difference a year makes. Last year British Airways showed fierce resistance to the Open Skies treaty, but is now the first major carrier to jump on the Open Skies bandwagon, albeit with a modest showing. For the time being, BA will devote only one 757 to flying daily between New York and either Brussels or ParisBA plans to commit five more of its 757s on the U.S.-European direct routes by the end of next year. With formidable brand presence in the U.S. market, and as the Heathrow incumbent, BA stands to be a favorite in the post treaty travel-war games.
Air France’s initial proposal in to the fray is a transatlantic route from Heathrow to Los Angeles.
British Airways’ initial resistance to the new Open Skies agreement was that the treaty favored US interests in allowing U.S. airlines lucrative routes into Heathrow but continuing to bar European ownership of U.S. airlines and access to U.S. domestic routes. The EU was eventually pressured to vow to scrap the deal if Washington doesn’t agree to a second phase by 2010 allowing European and U.S. airlines to buy each other and EU airlines to run U.S. domestic routes. “This is the holy grail of full deregulation that BA had been seeking.” Notwithstanding the compromise that is the new treaty, BA still stands to emerge as the clear beneficiary of the resolution.
As the U.S. carriers cast their sights westward, all eyes are on the already overburdened Heathrow Airport. The four big U.S. airlines previously barred by treaty from Heathrow – Delta, Continental, Northwest and US Airways – have already announced plans to fly there as of the new agreement date of March 28. Heathrow is the world's busiest airport for European connections.
With a nod to the Open Skies treaty, British Airways is launching a new subsidiary that offers multi-level business class service to the U.S.-specific routes. Starting with its one Boeing 757 retro-fitted for premium-class seats, the new subsidiary will be called OpenSkies.
Also seeking the lucrative trans-Atlantic business traveler, London-based Virgin Atlantic is expected to create its own new airline to fly US/EU routes sans a Heathrow stopover. Lufthansa’s business class jets are also likely to be a part of their approach to the new US-European routes.
Saturday, January 12, 2008
As we reported on January 2, there were a few unclear directives in the new regs from the Department of Transporation restricting how lithium batteries can be carried on commercial airliners. The DOT has now come to the rescue of passengers with a clarifying message of proper transport of loose batteries.
All lithium batteries in checked bags must be installed in their dedicated electronic devices. Loose extra lithium batteries are not allowed in checked luggage.
Unlimited loose batteries may be carried in carry-on bags but the DOT “strongly recommends” separating them in individual zippered plastic bags or transport them in their original packaging. In other words if you want to be cooperative and cause the least amount of friction through security and TSA checkpoints and not hold up your fellow travelers behind you in line, please follow the recommendation.
There is one last technical exception to the unlimited carry-on reg: batteries that have 8 to 25 grams of equivalent lithium content are limited to two uninstalled batteries in each carry-on. Most consumer electronic goods such as laptops, digital cameras and cellphones use batteries that fall far short of that content.
The rule was implemented to reduce the risk of lithium battery fires.
Again, the best advice is if you check your electronic devices with the batteries installed, LOCK YOUR BAGS with a TSA accepted lock! Carry on your uninstalled spare batteries and insullate in plastic bags or orginal packaging.
For additional tips for the save handling of and traveling with lithium batteries check out the TSA website.
Friday, January 11, 2008
Whether your travels are domestic or international to and from the United States you can protect your belongings in checked baggage with TSA accepted baggage locks.
Check out this new video that explains how the lock program works in conjunction with the U.S. Transportation Security Administration.
Tuesday, January 8, 2008
Monday, January 7, 2008
Just when you thought you had a grasp of the rules of the travel game - could travel the world with the greatest of ease - the grand Pooh Bah of the skies changes the rules….yet again. The UK Department for Transport (DfT) has lifted the restriction limiting passengers to one piece of carry-on luggage, but only for 22 British airports. The one-piece of hand luggage restriction is still in effect for the balance of domestic airports.
You might detect a micro possibility for confusion here. You can board a flight in London’s Heathrow with two carry-on bags, but only one bag if you’re flying out of London’s Gatwick.
Some of the UK airports now allowing two carry-on bags include:
- London Heathrow
- London City
But you are still restricted to one hand bag in many British airports that are not approved by the DfT for screening two bags per passenger, including:
- London Gatwick
The one-bag rule was imposed in August 2006 following the discovery of a terrorist plot to use liquid explosives to blow up jetliners headed for the United States. The government is lifting the carry-on restriction only for those airports that can demonstrate that they can handle security checks of more than one bag, according to the British transportation department.
The 2006 one-bag rule, which only Britain imposed, caused confusion and frustration for many travelers coming from the USA and Europe, where they were allowed more than one carry-on. While the partial lifting of the carry-on restriction is a definite plus for travelers, the confusion factor will keep passengers on their toes. If multi-connections within British airspace are required, you could do well to enlist the brain power of a personal assistant for planning purposes.
“To minimize confusion (?), easyJet will maintain its policy of allowing each UK departing passenger to carry one piece of hand baggage” – regardless of eased restrictions. “The only way to maintain a simple and standard policy is to maintain our one bag policy," CEO Andy Harrison explained. Conversely, British Airways will reintroduce its two pieces of hand luggage allowance at all UK airports that allow it. Like I said, just go for the PA.
In lifting the rule at some airports, the transportation department sagely warns passengers to check with their airlines to be certain of applicable carry-on restrictions. No kidding!
"This is great news for our customers at Heathrow," Robert Boyle, commercial director for British Airways, said in a statement. "(The restriction) was a serious inconvenience for passengers and didn't make sense because (Britain) was the only country to impose the restrictions.
"Now we want to see the restrictions lifted at Gatwick in line with other major (British) airports as quickly as possible," he said.
Travelers transferring flights in London should remain wary as long as Gatwick still limits carry-on luggage to one bag at many of its gates. Passengers on flights canceled at Heathrow can often be put on flights taking off from Gatwick.
Gatwick has increasingly become a popular alternative to travelers to London, as Heathrow's crowded conditions have prompted passengers to look to alternatives. Heathrow is the third busiest airport in the world after Atlanta's Hartsfield-Jackson and Chicago's O'Hare. It is a major gateway for U.S. travelers to Britain and Europe. Almost 67.7 million passengers went through Heathrow from November 2006 to November 2007.
Bobby Boucher from Southern California responded to the USA Today’s article on the lifting of UK restrictions: “Until they lift the restriction at LGW this may still be a problem for anyone traveling through the UK. It's more common than you think to be going through LHR and have a flight cancelled and then have to take the bus to LGW. You will be pretty upset if you have your two carry-ons which would be ok at LHR and then have the flight cancelled, bus to LGW, and then find out you have to check carry on # 2. Make sure you do it when you have to recheck if you go through LGW after getting off the bus. Or just plan ahead for the worst case scenario and take one carry-on.”
Airlines, airport authorities and the British Department for Transport have been working together to put in place additional security screening processes and invested in new equipment to allow the removal of restrictions on the number of items allowed through airport security search.
It will take some time for all UK airports to introduce these new measures and install the new equipment required to meet the DfT screening requirements.
“UK airports can submit plans to the Department for Transport on how they will meet requirements. The DfT will need to be assured that airports have proved their ability to handle extra bags safely and securely before approving any plan.”
In the meantime…better play it safe. Relax, lock and check your bags.
Saturday, January 5, 2008
The U.S. Department of Commerce claims that foreign travel to the States is way up. But up relative to what? Year-to-date U.S. arrivals are 10% above last year. But according to many in the tourism industry, the U.S. is not ahead in the foreign travel game, but rather barely making up for the 10% decline in tourism since 2000.
According to Frommers, “Though all nations lost tourism in the immediate wake of September 11, virtually all other nations have made up the deficit and forged ahead. Since 2000, tourism to Britain has increased by 13%. Tourism to Australia has increased by 21%. Tourism to France has increased by 20%.”
Many feel that the travel process to the U.S. is just too difficult and the arduous visa process discourages foreign travelers. “The overwhelming consensus of the 2007 World Travel and Tourism Conference was that we have made it extraordinarily difficult for most foreign tourists to obtain visas for travel into the United States.”
In the wake of 9/11, however, increased security is hardly surprising and with the continued threat of terrorism, is surely a prudent course of action by a country and government under fire. The purpose of the U.S. Department of Homeland Security’s US-VISIT initiative is to keep the nation secure while keeping the lights on and the doors open to international travelers. Not an easy mission.
What is the US-VISIT? In government-ease, “US-VISIT is part of a continuum of security measures that begins overseas and continues through a visitor’s arrival in and departure from the United States. It incorporates eligibility determinations made by both the Departments of Homeland Security and State.” Translation: A thorough and often frustrating security process before approval for U.S. entry. Well folks, you also can’t travel without a passport which is not an overnight process (without the assistance and expense of an expeditor).
What foreign travelers can expect upon entering the U.S. Once at the port of entry you will find that many of the procedures remain unchanged. A U.S. Customs and Border Protection Officer will review your travel documents, such as a visa and passport. The officer will ask questions about your stay in the U.S. The fingerscan is next. The Department of Homeland Security plans to replace the current two-fingerprint scanners with new 10‑fingerprint scanners at all U.S. ports of entry over the next year.
On November 29, 2007, Homeland Security began the initial transition at Washington Dulles International Airport with equipment to capture a complete 10-fingerscan. In early 2008, the following nine U.S. airports will also collect additional fingerscans from international visitors:
- Boston Logan International Airport (Boston, Mass.)
- Chicago O’Hare International Airport (Chicago, Ill.)
- Detroit Metropolitan Wayne County Airport (Detroit, Mich.)
- Hartsfield‑Jackson Atlanta International Airport (Atlanta, Ga.)
- George Bush Houston Intercontinental Airport (Houston, Texas)
- Miami International Airport (Miami, Fla.)
- John F. Kennedy International Airport (New York, N.Y.)
- Orlando International Airport (Orlando, Fla.)
- San Francisco International Airport. (San Francisco, Calif.)
BEST ADVICE: Plan ahead, be prepared and be patient. This goes for travel anywhere, anytime.
And protect your belongings. It is always advisable for passengers to lock their checked bags with a TSA accepted lock for U.S. entry.
Thursday, January 3, 2008
The one thing everyone agrees on? It is not going to get any better anytime soon.
“Unfortunately, many industry experts are predicting airline delays to only increase,” Greg Principato, the president of Airports Council International-North America, told Congress recently.
That means that millions of passengers are left cooling their heels in their airport du jour. Theoretically, these are captives just waiting to unload the money in their pockets in exchange for a brief moment of relief from the frustration and boredom born on the wings of delays.
Take any given large airport – otherwise known as the City of Discontent. Therein resides a money-wielding population. These are not just people; they are legs attached to wallets, AKA a retail opportunity.
The New York Times reports that, “All over the country, airports are remodeling terminals to improve restaurants and to apply new retailing ideas, including vending machines that dispense high-end items like $300 Apple iPods.” (I personally have an aversion to spending more than $5 in a vending machine, but that is probably just a generational thing.)
Today’s best airports offer services and distractions like swimming pools and fitness clubs, expansive shopping facilities, play areas for children, first-rate hotels, fine dining, and visually beautiful spaces . Other new airport offerings include pharmacies with medical clinics, luxury nail salons, spas, and free battery-charging stations for those now travelling sans spare batteries. Airports, especially several foreign locales, are becoming so attractive that if they were not by definition an “airport”, could attract people without a plane to catch.
Forbes claims the airport to beat for many years has been Singapore’s Changi, outshining many of its “fresh-faced competitors” in Asia and “a favorite for the traveling cognoscenti.” Other Asian pearls include new airports like Nagoya in Japan and Incheon in South Korea which are faring well beside the likes of Hong Kong's International Airport.
State-side travelers are now enjoying the new terminal facilities resulting from a late 1990’s building boom; at least 10 cities around the country have new facilities — including Seattle, Miami, Detroit, New York’s John F. Kennedy and Los Angeles. and Dallas-Fort Worth International Airport’s $1.4-billion Terminal D.
With all these new facilities and activities under the terminal roof, relax and enjoy. Ditch the bags. Lock your bags with the TSA accepted locks, check your bags, and head for the nearest airport spa, and then a nice dinner while you wait out that raging blizzard.
Condé Nast weighs in on best airport dining here.
Forbes rates best airport hotels here.
Wired sets out five best city to airport rail connections. (only 5 rated?)
Wednesday, January 2, 2008
Posted by Travel Sentry
To help reduce the risk of onboard fires, the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration (PHMSA) has banned the packing of loose lithium batteries in checked airline luggage as of January 1. The new regulation does not apply to lithium batteries that are installed in electronic devices such as laptops, cell phones and cameras.
Loose lithium batteries will still be allowed in carry-on baggage if they are packed in individual plastic bags, but there is a limit to two spare lithium batteries per passenger. Krista Edwards, deputy administrator of the PHMSA said, “Doing something as simple as keeping a spare battery in its original retail packaging or a plastic zip-lock bag will prevent unintentional short-circuiting and fires.”
Several recent instances of lithium battery fires and recalls have prompted a heightened awareness of possible dangers. The administration is treating lithium batteries as hazardous materials because of their incendiary capabilities in some conditions. The FAA has conducted tests that show commercial aircraft cargo fire suppression systems are incapable of containing fires caused by non-rechargeable lithium batteries packaged in bulk quantities.
According to a June 2004 report published by the Office of Aviation Research, lithium batteries can be ignited by a small fire source. When the outer plastic casing melts it can cause fusing to other batteries in close proximity increasing the intensity of the fire.
Pack spare batteries in carry-on baggage. In the passenger compartment, flight crews can better monitor safety conditions to prevent an incident, and can access fire extinguishers, if an incident does happen.
Just to add that element of confusion, the following is a direct “lift” from the TSA website:
Effective January 1, 2008, the Department of Transportation (DOT) through the Pipeline and Hazardous Materials Safety Administration (PHMSA) will no longer allow loose lithium batteries in checked baggage. These batteries may continue to be packed in carry-on baggage.
Under the new DOT rule, lithium batteries are allowed in checked baggage under one of the following conditions:
Loose lithium batteries found in checked baggage may be removed.
Sounds contradictory? Best advice for your valuable devices and their batteries: if you check your electronic devices with the batteries installed, LOCK YOUR BAGS with a TSA accepted lock!
Carry on your uninstalled spare batteries.