Friday, August 28, 2015

Car Rental Taxes and Fees Going Haywire

Socking travelers with exorbitant taxes and fees has become a sport.  Airlines, hotels and car rental companies are now cash cows for cities, states, municipalities, airports for revenue generation.  Travelers do not vote in the places they visit, so they have become easy targets. For international airline tickets, taxes and fees are often higher than the "base fare" of a ticket.  Airlines have added their own surcharges since they only pay taxes on base fares.
Car rental companies taxes and fees are approaching parity with the "base" rental rates.  On a recent example, we requested a quote for a passenger needing a car in Austin, Texas, one of the lower jurisdictions for taxes and fees in the country, and were quite surprised to see this breakdown:

Taxes & Fees

Here is a breakdown of the estimated taxes, fees, and surcharges that apply to your reservation when you pick-up your rental car:
Weekly Rate (2 x $144.90)          $289.80
Airport Concession Fee35.97
Local Tax66.46
Total Taxes, Fees and Surcharges219.73
Grand Total: $509.53

"Vehicle License Fee"?, "Energy Recovery Fee"?, "Customer FAC Fee"? These names actually make the airlines look good!  How about a "Steering Wheel Fee"? or "Tire Tread Fee"?

Tuesday, August 25, 2015

The 3 Gulf Carriers Nobody Talks About

Emirates, Qatar and Etihad  (AKA: EQE) have been the three carriers making the headlines lately.  Expanding aggressively worldwide with new fleet of planes, state of the arts facilities and excellent amenities and on board services, these carriers have taken the lead in opening up new markets and giving passengers attractive choices.

In the same geographical area, well endowed, but keeping low profiles, three other gulf carriers are only there to serve limited markets and without the fanfare and the frills of the EQE.
Kuwait Airways is not known for great on board service and they have not attempted to bring their brand to the 21st century as evidenced by their logo.  Gulf Air had the opportunity to shine in the eighties but chose not to expand even though they were the largest "gulf" carrier then.  Finally Saudia is the most serious of all. No fun, no alcohol served, and ultra conservative in the way they operate.  All 3 carriers are averse in having connecting passengers through their airports, a key point in the success of the EQE.

Monday, August 17, 2015

FAA Software "Upgrade" Grounds over 1200 Flights

The FAA, notorious for shooting itself in the foot, claimed another act over the weekend.  While the FAA did not disclose the nature of the problem that grounded hundred of flights Saturday and Sunday,  the likelihood of a software upgrade glitch remains the probable cause.
The FAA's seemingly endless string of glitches continues as the NEXTGEN satellite upgrade, well behind schedule, inches on with costs of over $40 Billion.

Tuesday, July 14, 2015

Weather and Competition Snag Brash Spirit

Spirit Airlines , sometimes referred to as the "in your face", "customer be dammed"  and "Bare Fare" airline (among others that shall not be published here) is blaming weather and competition for the poor numbers and margins posted in June.  We are always skeptical when companies blame the weather for their poor performance.  Another explanation, not given by analysts or the company is that perhaps travelers finally figured out the "unbundling" gig that ends up costing more when it is all said and done.  Remember that Spirit back in 2012 more than doubled the carry-on luggage fee to a $100 and made no apologies.  The applause from Wall Street was deafening.  Reality is finally setting in, and Wall Street is showing no love for Spirit today.

Tuesday, June 30, 2015

JetBlue Joins the Legacy Nickel and Dime Club

JetBlue, which for years distinguished itself as different and better than the domestic legacy carriers, and one of the last holdouts in charging for checked bags, finally succumbed to the temptation and will start charging for checked bags for bookings made as of June 30, 2015.  While this is not a surprise, JetBlue added couple of wrinkles by associating the fees with the fares paid.  Southwest Airlines remains the only major carrier not to charge a bag fee.

Thursday, June 18, 2015

The Dogfight Over Love

Dallas Love Field that is.
Lawsuits are erupting involving the City Of Dallas, DOT, FAA, Southwest and Delta over the chaotic situation with the gates.  Southwest controls the vast majority of the gates at Love Field, a new hot favorite among travelers tired of American Airlines' dominance at Dallas-Ft. Worth.  Delta operates from 5 gates at Love Field but is supposed to surrender the gates to Southwest on July 6.  Delta however continues to book flights into and out of Love Field beyond the dates and their presence at Love Field will terminate on July 6.  DOT added to the confusion saying Delta has the right to continue to operate beyond the July deadline.

Wednesday, June 3, 2015

Wall Street Stands In Way of Airline Capacity Increase

When Southwest Airlines announced last week plans for increasing seat capacity starting November, Wall Street analysts and investors were very quick in taking the entire airline sector to the shed.  All airline stocks lost 2-3% when the announcement was made, as analysts were "concerned" about empty seats.
This misguided notion disregards the reality that airlines have been cutting capacity across the board for the past four years and a mere increase of 7% by one airline does not spell the doom of an entire industry.

There are many under-served airports and regions in the country that have seen high growth rates since the 2008 recession.  Airports like Austin and Dallas, along with many west coast cities have experienced double-digit growth on an annual basis.  Yet, airline service has decreased over the past few years.  The capacity increase announced by Southwest should be viewed as a healthy sign of demand not dilution by Wall Street, the investors and the "expert analysts".