Wednesday, February 23, 2011

Airlines Respond To Fuel Costs By Increaseing Fares And Reducing Capacity

The geopolitical situation in the Mideast has caused oil prices to sky rocket over the past few days causing airlines more headaches with the fuel costs.

A new round of fare increases have taken hold this week, and fuel surcharges are being implemented or increased on international flights.

The airlines have no choice but to increase fares, reduce capacity, frequency and eliminate or cancel flights.

Already the high fares are resulting in reduced demand. The situation is most dire for the last minute business traveler as some fares have gone up by an average of $80 over the last round of increase announced just two weeks ago.

Airlines often are caught on the wrong side of fuel hedging. Most airlines purchase fuel on the spot market or near term contracts. The double digit increase in the past two weeks will dampen demand.

Monday, February 21, 2011

Good News Fare...Bad News Taxes and Fees

On a recent search for a fare from Washington Dulles to London on Virgin Atlantic, passengers would have been thrilled to see how deeply discounted the winter fares are this year.

The example below is to demonstrate the absurdity of taxes and fees:

1- USD130.00 482.10XT USD612.10ADT
XT 292.00YQ 32.60US 5.50YC 7.00XY
5.00XA 2.50AY 96.20GB 36.80UB
130.00 482.10 612.10TTL

For an itinerary leaving Dulles on March 1 and returning on March 8, the fare that Virgin charges is $130...yes, you are reading this correctly...$130! Then the fun begins...Take a look at all these obscure codes that you will see on your e-ticket...each one will jack up the cost of your fare to the final cost of $612.10. While this is still a very good deal, it may explain how some airlines lose money and how your taxes and fees are charged.

For those who like to explore the labyrinth of the tax, and fee system, here's enough for you to feast on:
YQ = Fuel Surchage fee
XA = APHIS User Fee
XF = Passenger Facility Charge
US = Transportation Tax
AY = Passenger Civil Aviation Security Service Fee
YC = Customs User Fee
GB = Air Passenger Duty (APD) Fee
XY = Immigration User Fee
UB = Passenger Service Charge
XT = The aggregate total of all taxes, surcharges and fees

So next time you see a "promotion" for a $130 to London, hold on to your hat as the airline, airport authorities, FAA, TSA, Immigration and Customs, and Uncle Sam will all have their palms extended to lighten up your wallet...

Friday, February 18, 2011

United/Continental to Downgrade Trans-Atlantic Service at Dulles

It did not take long for the new management at United to start tinkering with the Dulles hub.

Starting in June 2011, service to/from Paris will reduced to a 757-224, an older aircraft owned by Continental, replacing 767 and 777 service on the late daily second flight to/from Paris.

The bigger United aircraft will be shifted to Newark airport where Continental will add to its already beefy presence there.

Amsterdam is the other city that will be affected, and that too will be serviced by Boeing 757. The bigger United aircraft will also be shifted to Newark.

When service is reduced to/from Paris in the fall to once a day, Continental will be servicing Paris with a single daily 757 service.

The two cabin service with single aisle aircraft will likely be unpopular on flights that will take between 8-10 hours, and will open up opportunities to competitors such as Air France, KLM and others to take market share from United/Continental.

Monday, February 14, 2011

While Dreamliner is Delayed, Boeing Unveils a new 747

The latest version of the most recognized airplane in the world was introduced yesterday in Everett, Washington.

The bigger, quieter and more fuel efficient 747-8 is configured to seat 400-500 passengers, with a more pronounced upper deck (big top).

The 747-8 will have many of the technological breakthroughs and features of the Dreamliner. Lighter alloys, lesser carbon emmissions, and lower operating costs are the key selling points. 33 passenger jets are already on order.

Sunday, February 13, 2011

Citing Increase in Fuel Costs, Airlines Raise Fares

Fare increases targeting the business and premium travel were quietly implemented in the past few days.

Airlines have blamed the need for the increase on fuel prices. It is the good old cause and effect. Airlines are quick to respond to fuel price increases by implementing "fuel surcharges" on international flights and fare increases on domestic flights.

The opposite is not true. When fuel prices decrease, the trickle down takes much longer to reach the traveler.

Tuesday, February 8, 2011

Next Generation Air Transport System Caught in Congressional Gridlock

Air traffic delays, flight cancellations, pollution, and endless frustrations with travel delays can be fixed through a bill in front of Congress known as the Federal Aviation Administration Reauthorization Bill (FAARB).

This $35 billion dollar bill, which has bipartisan support has been languishing for years, and it has been debated repeatedly with nothing to show for it.

The bill would fund the implementation of Next Generation Air Transport System that would change the current controls from ground based to satellite based, taking advantage of major technological advances in precision GPS technologies.

The benefits include a more streamlined and efficient air traffic control network that would save airlines money by burning less fuel, cut down flight distances and unnecessary bottlenecks, cut pollution substantially and provide safer flying environments with more advanced imagery.

Friday, February 4, 2011

Mother Nature and Travel

As many seasoned and discretionary travelers have now realized, ice, snow, volcanic eruptions, thunderstorms, wind and more are playing a bigger role in disrupting a very sensitive air travel ecosystem. Snow in Houston has forced hundreds of flight cancellations and delays that impacted a major U.S. hub that will reverberate for days to come.

Once you add international geo-political complications, equipment failure, tight schedules, and congestion, it is not hard to realize that small and seemingly unrelated events can converge to be a disrutive force that can become a huge inconvenience to tens of thousands of travelers.

Airlines, airport authorities, and the FAA must work together to bring air travel to the 21st century. We have relied far too long on outdated methods, equipment and procedures that cannot handle today's and tomorrow's needs.

Wednesday, February 2, 2011

When They Close Schools in Chicago....

...They close airports and cancel flights too.

A massive storm is paralyzing most of the country as blizzard conditions are prevalent.

Travel, yet again, is severely disrupted as airports, airlines and passengers struggle to deal with another blow to travel plans this winter.

Airlines are now accustomed to issuing travel waivers to travelers affected, and it will take a while to sort through this mess.

Before heading to the airport, travelers are well advised to check the status of their flights.