Category: May 2013

Main News May 20th 2013

Money, money, money…

US airlines collected more than US$6bn in baggage and reservation change fees from passengers last year, the highest amount since the fees were adopted.

Airlines first started charging for a checked suitcase in 2008 and the fees have inexorably climbed ever since. Today, it’s common for an airline to charge around US$20-25 each way for the first checked bag, US$35 for the second bag and then a range of fees for overweight or oversized bags thereafter.

The nation’s 15 largest carriers amassed a combined US$3.5bn in bag fees in 2012, which was up 3.8% over 2011: these are the findings of the Bureau of Transportation, which has just published some updated data on the subject. Of equal interest were the fees for changing a reservation: these totaled an impressive US$2.6bn, which was up by 7.3% on last year’s figures.

On the plus side of the equation, airlines garnered US$159.5bn in revenues in 2012, a figure that has to be reconciled with their outgoings of US$153.6bn, according to government figures. Looked at baldly, though, their profit margin has been derived entirely from the baggage and reservation change fees.

Should this be a worry to investors?

Clearly not, if carriers can continue to extract such sums from the traveling public…

 

Air General spreads its wings

After over half a century in the cargo handling business, Air General expanded its portfolio last year to include Air General Security; and it has now announced the inauguration of its Passenger Handling Division.

Donna Blanchard, Vice President Business Development, commented on the initiative: “This third division of our company represents a natural progression, building upon a successful and long-term relationship with our cargo customers who value the medium-size and family value appeal of the Air General culture.”

Donna, formerly the Director of Customer Service Delivery for North America and Asia Pacific at British Airways, is set to couple in-house expertise in international and domestic passenger handling with proven techniques for hiring the right people to offer the special skills required to safely and efficiently guide passengers through the airport process.

Separately, Air General has announced that it had earlier been awarded its first contract with Southwest Airlines to handle cargo in Manchester, New Hampshire.

 

Representation gets underway

The International Association of Machinists and Aerospace Workers, along with the Transport Workers Union of America, have announced a partnership with a view to representing upwards of 30,000 ground workers at the reborn American Airlines. This is in the wake of the merger between American Airlines and US Airways.
Joint agreements have now been signed which will embrace the Mechanic and Related, Fleet Service and the Stores employee work groups. The new labor partnership, which henceforth will be known as the TWU/IAM Employee Association, is to ask the federal National Mediation Board to hold elections among the combined employees for each classification upon the final stage of the carriers’ merger. This election will formalize the agreement that was recently reached.

And end to delays?

Following three days of furloughs for air traffic controllers in response to the much-criticized government sequestration, the FAA returned to regular staffing levels and resumed normal operations on April 30.

The Federal Aviation Administration has thus cancelled its budget-driven plans to close almost 150 air traffic control towers at smaller US airports: this occurred just two weeks after Congress passed legislation to end air traffic controller furloughs, which had been widely reported as delaying flights around the US.

The US Transportation Secretary, Ray LaHood, stated that federal officials had determined that the legislation would give the FAA enough flexibility to keep funding the towers that had been due to be closed in June this year as an economy drive.

The White House had announced plans for both the furloughs and the tower closures earlier this year to meet automatic spending cuts required by Congress under the so-called sequestration law aimed at reducing the US budget deficit. Congress took up the case when it was revealed that these furloughs were causing problems for travelers at major airports across the country.

Main News May 3rd 2013

New Southwest and AirTran facility

On April 14, Southwest began shipping cargo on AirTran Airways under the Southwest Airlines Cargo brand.

Southwest has introduced four new destinations on its freight route map, these being Charlotte, San Juan, Rochester and Richmond. This newly-established connectivity between the carriers’ networks will have the effect of generating hundreds of new flights as well as almost 70 new markets for cargo customers.

Thus today Southwest Airlines Cargo can connect through Southwest-to-AirTran flights as well as through AirTran-only or AirTran-to-AirTran flights.

San Jose to get FBO

San Jose International has received approval from the City Council in the US for the construction of an US$82m corporate aviation facility. The City Council has also approved a 50-year lease agreement with Signature Flight Services to build the facility on the western side of the airport.

Under the deal, San Jose airport will receive US$3m rent every year. Signature Flight Support, in turn, will build and operate the fixed base operation facility on the 29 acre site on the western part of the airport. Signature Flight will be working in collaboration Blue City, which serves private jets.

More modest scanning proposals mooted

It looks likely that Canadian airline passengers will be feeling slightly less exposed at airport security checkpoints in the future. This is in the wake of criticism over body scanners by privacy advocates, who are seeking less invasive methods of screening. In an overhaul, new software for the millimeter-wave scanners is to be employed, which will produce a computer-generated so-called stick figure that can detect weapons or explosives concealed under clothing, without revealing any of the person’s physical features.

Lambert-St Louis figures look encouraging

If you read the story in the May/June edition of Ramp Equipment News you will know that Lambert-St Louis airport has been struggling in terms of cargo processing. However, the station has just posted its best first quarter cargo results for two years.

Encouragingly, outbound freight was up 3.6% on 2012 figures, while outbound mail rose 39.5% to 252,080 kilograms, an increase of 9.5%.

Inbound cargo totaled 8,452,217 kilograms (which was up 2.5%); meanwhile, inbound mail was up 7.7% at 260,746kilograms.

The total of all cargo and mail for the first three months of 2013 was 16,904,289 kilograms, an improvement of 3.5% on 2012, and the best first quarter since the post-recession bounce of early 2011.

According to Lambert-St Louis’s Cargo Development Director, David Lancaster, the airport has seen healthy growth in all sectors of the business so far this year.

“This includes domestic and international cargo and mail. It’s too early to say whether this trend will hold up throughout the year, but there is certainly more optimism among our community than has existed for some time.

“The real improvement in our tonnages, however, will come when our international marketing effort gains traction. Our main target is freighter operators, for whom we can offer a convincing business case centered on our ideal location, our impressive resources and our incentives program.”

The airport has identified that a substantial amount of cargo from its region is currently trucked to and from Chicago and other larger hubs, to connect with their international widebody and freighter services. “This is time-consuming, costly and not environmentally friendly,” he notes. “Freighter operations face huge challenges right now, with a perfect storm of soft rates and high fuel costs. So we believe the opportunities at Lambert to tap into a huge market catchment, while reducing operational costs, represent an appealing offering.”

He concludes: “Just one scheduled freighter operation will dramatically impact STL’s cargo statistics; and we are quite confident that the first will quickly lead to the second and third. It’s about changing habits, and it’s a waiting game, but we are in this for the long term.”

Sequestration starts to bite

The recently-announced aviation furloughs haven’t gone down well in the US. Flight delays have been continuous because of the cut-backs in air traffic control officers and sequestration has become something of dirty word within the aviation sector. Indeed, some analysts are predicting that flight delays and congestion at airports could well increase as the summer season gets underway and that this would be likely to impact far more travelers than at present. Currently some 10% of air traffic controllers (around 1,500 staff in all) are involved in the process, which is set to run until October this year.

One problem is that when the major hubs are affected, then the ripple process ensures that the ramifications are felt elsewhere in the network. The FAA has estimated that up to a third of passengers will face delays during the furloughs, with up to 6,700 flights arriving late at more than a dozen major airports each day. Opponents to the procedure have lobbied the FAA and urged the body to seek its cost-savings elsewhere or by other means.