Baggage fees not seen as a deterrent

Rising baggage fees have not stopped travelers checking in their luggage when they fly. According to the latest Department of Transportation data, US airlines collected more in checked baggage fees in the first three months of this year than in the previous three months.

Between them, the 17 largest airlines collected a total of US$815.8m for baggage fees during the initial quarter of this year. This total was up from US$792m posted in the fourth quarter of 2011. The increase comes in the face of a 4% drop in traffic this quarter, according to Associated Press reports.

Delta Air Lines was prominent, collecting the most (US$198m). United, American and US Airways were all runners-up, with each banking more than US$100m in terms of check-in fees.

Airlines also collected US$631m in changed reservation fees for the first three months of the year: this compares with US$567.1m earned in the fourth quarter of 2011 and US$597.8m garnered during the first quarter of 2011.

Once again, Delta outshone other airlines, banking some US$192.3m from this service.

 

 

IAM ratifies fresh contract

The International Association of Machinists and Aerospace Workers District 142 has confirmed that the ramp and stores agents at Alaska Airlines have ratified a new, six year contract. This latest agreement concerns some 600 workforce members and the deal was approved by 91% of those voting.

Various elements are covered under the terms of the document. A phased-in pay rise of 10% is now on the cards and employees can look forward to enhanced merger and job protection, as well as signing bonuses. Other emoluments include increased premium pay and improved benefits and working regulations.

“Both committees are to be commended for their no-nonsense approach to this round of negotiations, which enabled a full and complete agreement to be negotiated and ratified prior to the amendable date of July 19, 2012,” commented the District 142 President, Tom Higginbotham, in a statement. “Such an accomplishment is a rare occurrence in this industry.”

 

Better baggage handling results welcomed

More on bags: baggage handling results from May this year have shown that, for the eighth month in a row, US airlines have improved their on-time performance.

According to the Department of Transportation and an Air Travel Consumer Report, 83.4% of flights arrived within 15 minutes of their scheduled arrival time in May this year, which was a 6% improvement when compared to the same month in 2011. in fact, the industry has posted year on year gains for on-time arrivals for each of the past eight months.
In May, 99.72% of all US airline passengers had their bags properly delivered, an all-time record for any May since records began; the previous record was set in May 2010. The May baggage handling performance also represented the twelfth consecutive month of year on year improvement.

 

Lost – but not always found

According to yet another new survey, airports are an ideal environment in which to lose personal belongings. During 2011, statistics show that, for example, over 8,000 mobile devices were left at seven of the largest airports around the US.

What is more worrying is that only one of those airports reported handing the lost devices over to the authorities. Six out of seven airports said that they were in the habit of donating mobile devices to charity or transferring them to another location.

Portable computers topped the bill, with a total of 3,576 misplaced, equating to 44.6% of all lost devices. Smartphones and tablets were close behind (3,444 lost or 43.0%), whilst USB drives accounted for the remaining 12.4%.

Five out of seven airports stated that most mobile devices were being left behind at Transportation Security Administration’s checkpoints whilst two declared (perhaps unsurprisingly) that they discovered most of the missing devices in restrooms.

Even more alarming was the sheer size of some of lost items, which have included vehicle tires and even microwaves.

 

 

Screening investment perhaps not enough

New analysis from Frost & Sullivan on the US airport screening technologies market has found that during 2011, the TSA spent approximately US$437.1m in contract obligations toward airport screening technologies.

The Transportation Security Agency is responsible for preventing knives, guns and other weapons from being taken on board aircraft. Despite these precautions, more than 800 guns were detected on board aircraft last year. These findings have highlighted the need for more stringent screening methods.

 

 

Facing up to the question of CO₂

ICAO has said that it will focus on three options in addressing greenhouse gas emissions. To achieve this, it will look to eliminate the baseline and credit system, which allowed the trade in baseline increases or decreases.

It was felt that this initiative was broadly similar in scope to global carbon offsetting and as such, represented unnecessary duplication. Remaining options include offsets (with a revenue-generating mechanism) and the tried and trusted cap and trade scheme.

There is ongoing resistance from the US and China (and some other countries) towards the EU’s emissions trading scheme, which has put the International Civil Aviation Organization under pressure to come up with a workable alternative.

ICAO’s Secretary General, Raymond Benjamin, has said that he expected the council to have a draft plan in place by March 2013, effectively extending the proposed 2012 deadline that had been anticipated. But coming up with a scheme that will be acceptable to all of the organization’s airlines, that number close on 200, could well prove elusive.

And so the debate over permit purchase for flights into and out of Europe continues, with no obvious solution on the horizon.

 

 

Growth on the cards at BBA

BBA Aviation has committed to a seven-year lease extension and expansion of its Orlando corporate headquarters offices to accommodate anticipated growth.

Signature Flight Support and ASIG, together with their parent company BBA Aviation, collectively have more than 1,000 employees in 12 Florida cities, with almost 200 based in Orlando. The expansion will support the future anticipated growth of the business and the creation of new, high-earning jobs over the course of the next three years.

“We are delighted to commit to our ongoing presence in Orlando.” commented S Michael Scheeringa, President Signature Flight Support and member of BBA Aviation’s Executive Committee. “We found the partnership with both the state and city to be conducive to both retention and growth.”

 

 

LAN acquisition goes through

History was made on June 22, when Chile’s LAN Airlines completed a takeover of Brazilian rival TAM, thereby creating the world’s second-largest airline by market value, in a deal that analysts confidently predict will yield up to US$700m in annual cost savings within a period of four years.

It hasn’t gone unnoticed that the new carrier, called LATAM Airlines Group, will be flying into the teeth of a recession: indeed, currently there is a slow-down in economic growth and demand for air travel in Brazil. But those significant cost savings could save the day. The airline will be focussing on improving performance in Brazil and it is hoped that during the merger, there will be little in the way of redundancies.

 

 

Volaris fined for misleading website

Recently, the US Department of Transportation fined Volaris US$130,000 for failing to disclose to consumers that they might have to pay baggage fees when buying a ticket.
“We adopted our rule on baggage fees to make sure that consumers have complete and accurate information about how much they will have to pay when they book a flight,” confirmed the US Transportation Secretary. “We will continue to take enforcement action when carriers fail to comply with our rules.”
According to the DOT’s latest regulations, carriers must clearly and prominently disclose on the first PC window that offers a fare for a customer’s itinerary whether or not additional fees for baggage may apply. Moreover, it is obliged to direct travelers to where they can view applicable baggage fees. This regulation applies to all airlines selling air transportation in the US, including foreign carriers.

 

 

Oiling the wheels – but not everybody’s

Delta Air Lines, which in a recent, well-publicized report decided to buy an oil refinery in an attempt to gain more control over its aviation fuel costs, has stated that it will not be selling jet fuel on the open market.

The carrier’s subsidiary, Monroe Energy, is to invest some USD$100m to convert the 185,000 barrels per day refinery in Pennsylvania in an attempt to increase its jet fuel output to 52,000 barrels per day, which represents about 32% of its output. Monroe Energy, which has been specifically set up to own the refinery, will then sell the fuel back to Delta.

 

 

 

In partnership with US-based Revenue Technology Services, Mercator (the commercial arm of Emirates Group IT) has developed a fully integrated Cargo Revenue Management Solution which will be rolled out to Mercator’s global customer base during the first quarter of this year.

 

The system, currently being implemented by launch customer Emirates SkyCargo, results in the Mercator SkyChain product becoming one of the world’s first fully integrated cargo solutions and will allow airlines using SkyChain to manage their cargo operations with the benefit of being able to fully optimize costs, increase operational efficiencies and maximize revenues and profitability.

The partnership with RTS puts Mercator at the industry forefront by offering customers a Cargo Revenue Management Solution that is tightly integrated with an airline’s core booking and operations process. This is a significant step for the industry, as it does away with the current practice of integrating with third party revenue management products and the large associated costs and overheads that are usually involved.

“We selected RTS as a partner because of the company’s diverse experience and demonstrated success in the field of revenue and profit management,” commented Duncan Alexander, Vice President Mercator. “The demand forecasting, overbooking, allotment management and bid price optimization engines from RTS revenue management software have been integrated within SkyChain to provide an integrated, Web-based interface, end-to-end cargo solution.”

Pradeep Kumar, Senior Vice President of Cargo at Emirates SkyCargo, added that with the introduction of the revenue optimization, capacity-constrained flights sales teams would have the advantage of being able to optimize flight revenue. “This feature will, in turn, influence sales techniques and behavior, representing a huge and beneficial cultural shift for both our people in the field and our valued customers.”