Thursday, June 30, 2011

OnePass Program of Continental to Merge with Mileage Plus of United

United/Continental is forging ahead with merging their schedules and programs toward the final end of being one single carrier by the first quarter of 2012.

Continental's OnePass members will be rolled into the Mileage Plus of United and members will hold on to their respective statuses.

The result will be a large number of "elite" status travelers, but overall a better program for all.

Monday, June 27, 2011

Over Taxing Travel

Travelers are getting over-taxed.

Here's why:
The U.S. Department of Transportation charges an excise tax of 7.5% of the airfare plus $3.70 per segment. That makes the average domestic ticket carry about 10% in taxes and "user fees". But what happens when the passenger cancels the trip and does not use the ticket for future travel?

The Department of Transportation imposes the tax for the "sale" of air transportation, not for the transportation itself. Airlines act as the tax collectors supposedly transferring collected taxes to the government. Interestingly, the Department of Transportation gives airlines the leeway if they choose to refund tickets to also refund the taxes, putting a hole in the theory that taxes are collected for the sale and not for transport.

Similarly, airport aurorities supposedly get to keep "user fees" even if the passenger did not use the facilities.

Moving to international travel, it becomes even more pronounced. Airlines will not refund the "fuel surcharge" even if they did not transport the passenger. It is tantamount to paying a cab fare surcharge when no service or transportation was rendered.

Bottom line, taxes, user fees and surcharges may be refunded if the airlines want to.

Wednesday, June 22, 2011

The New Normal in Air Travel: More Fees

We have now seen how creative airlines can be when it comes to concocting fees of all sorts for what used to be free not so long ago.

Every month, passengers are greeted with an ever increasing array of ancillary fees that are generating billions of dollars in revenue for the airlines. The golden goose is here and the milking process is in full swing.

Expect that this trend not just to continue, but to be further "enhanced". From TSA fastlanes to priority boarding and everything in between, passengers should expect to pay a higher percentage of their travel costs for fees that are still difficult to account for.

Taking this to a new horizon, programs are being rolled out so travelers can purchase "memberships" that require annual fees to prepay for a year's worth of certain ancillary services such as extra leg room seating or luggage.

Wednesday, June 15, 2011

Airline Branded Credit Cards Increase Amenities and Benefits

Major credit cards have been aggressively promoting airline branded credit cards touting all kinds of privileges and benefits for those who apply.

Your "pre-approved" solicitation comes beautifully packaged and will bear names that evoke luxury such as "Gold", "Platinum", "sapphire" etc... and adorned with your favorite airline logo, promising sign-up mileage bonus of 25,000 to 50,000 miles.

The aggressive promotions will promise many things including checking bags for free for up to 9 passengers on the same itinerary to lounge passes and yes...more bonus miles and discounts for vacations and cruises.

While some of these benefits are worthwhile, especially families that travel together.
(One trip for family of four will result in $200 baggage saving), you may have consider other factors to get the biggest bang for the buck. For example if your status is high in your frequent flyer program, you may already be receiving all the promised benefits.

Sunday, June 12, 2011

So Why Use a Travel Management Company When You Can Do It Online?

The airlines and the plethora of online websites would like you to think that you can do everything online (on their websites of course) and pay little or no fees.

While this may be true for the simple domestic trips involving point to point, the theory does not hold up well in today's world of travel complexities.

Consider things like weather disruptions that cause delays or cancellations, industrial actions, civil uprisings, earthquakes, volcanic ash and travel warnings, and you will need an advocate on your side looking for your best interests. Anticipating problems, expecting the unexpected are the core values of a good travel management company. Websites and robots will not call you to warn you of potential disruptions to your travel and will not have alternatives for you. Changing online bookings are so difficult that many travelers once affected, realize the value of the special relationships that they can have with a professional that knows your personal preferences and can get you there and back safely.

The State Department has a new registration program called Smart Travel Enrollment Program (STEP). This enhanced program which requires registration on the part of the traveler, will enable embassies and consulates abroad to know your whereabouts in the event of emergencies and evacuations and can get in touch with you or your designated contacts. It is highly recommended for travelers visiting destinations that are considered high risk and have travel warnings and advisories.

For more details about the program, please click on the link below:

Tuesday, June 7, 2011

Discount Vs. Legacy Airlines

Passengers have become accustomed to receiving lower fares when they ask for Southwest Airlines, Jet Blue and Air Tran. However recently, the legacy airlines, United, Delta, American and others have closed the gap.

The advantages that "low cost" carriers had in the past are vanishing. For one thing, their fleets are now aging, their maintenance is higher, and they have the same efficiency as the legacy carriers. All airlines have to cough up the dough at the gas pump as jet fuel prices have surged. In the past, Southwest Airlines have deftly played the hedging game to near perfection, but nowadays it is more of a level playing field.

Labor costs are trending to about the same, although Southwest still has the advantage.

Legacy carriers have also done a skilfull job in leveraging their presence worldwide through joint ventures, alliances and code shares.

IATA has just lowered guidance for airlines profitability in 2011 mainly due to fuel costs. Ancillary fees, the new cash cow for airlines are expected to generate a higher percentage of airline revenue going forward.

Wednesday, June 1, 2011

Ancillary Fees Tab 2010: $22 Billion and counting

Airlines worldwide are ringing up ever staggering amounts of money from all those pesky ancillary fees. The Wall Street Journal reported on a study out Tuesday that tabbed airline revenue from add-on fees jumped to nearly $22 billion dollars last year. That's up 38 percent from a year earlier.

Ancillary fees have become a godsend to airlines. It is the oxygen in their tanks that keep them afloat. Airlines will continue to find creative ways to come up with new fees. For example, fast line security, a TSA function, is now another fee producer for airlines. To go to a shorter security line reserved for "Premium Passengers", you will have to cough up $19. Ancillary fees and how they are disclosed have become a solution looking for a problem.