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A BRIEFING FOR AUG. 27 - SEPT. 10, 2009
By Joe Brancatelli
· Boobs at the Boarding Gate Raise Bag Fees Again
· Noted: A Week Without (Too Many) New Hotels
· Continental Rejiggers Routes for Star Alliance
· Federal Lodging Per Diems Won't Change in 2010
· Delta Changes Business Classes on Major Routes
· Ready for Coconut Lime Verbena Bath Amenities?
· Surprise! Low-Fare Carriers Pay More for Labor
The Boobs at the Boarding Gate Raise Bag Fees Again
The blinkered bean counters who run the airlines continue to claim that their parade of baggage fees is adding to their cash flow. The equally blind-eyed sheep in the general media continue to report the claim of a $2 billion influx to the carriers' bottom line. The truth, of course, is far different: As I explained back in April, the airlines that have been fastest to raise baggage fees are also the carriers that have been hemorrhaging revenue the fastest. Still, what do facts matter to airlines that seem content to pave a quick road to their own oblivion? So here are this week's new bag fees: Virgin America has raised its checked bag fee to $20 each for any bag you check. American, Continental and US Airways have matched the $50 fee for the second checked bags on European flights, a charge pioneered by Delta Air Lines and recently matched by British Airways. And US Airways also raised its domestic bag fees. It is now $25 for the first bag and $30 for the second bag if you check them at the airport and $20/$25 if you check them online.
Noted: A Week Without (Many) New Hotels
The fast-gushing development pipeline that has been pouring out new hotel rooms into a market where nightly occupancy rates at existing properties has plummeted to the 60 percent or lower level actually slowed to a trickle this week. Except for two new international hotels (the 272-room InterContinental Kiev in the Ukraine and the 563-room Shangri-La Ningbo in China), there has been precious little to report. Well, except this: the 99-room Hotel Jefferson in Washington reopens on Monday (August 31) after a top-to-bottom renovation of the 1923 Beaux Arts building. The Jefferson is about four blocks from the White House. … The Sheraton Gateway hotel in Burlingame near San Francisco International has been reflagged as the Hilton San Francisco Airport. … Holiday Inn properties in the United States and Canada have switched to Bath & Body Works bathroom amenities. The flavor: Coconut Lime Verbena. Mmmmm, verbena…
Continental Rejiggers Its Route Map to Match Star Alliance Hubs
As you surely know by now, Continental Airlines drops out of the SkyTeam Alliance on October 24 and moves into the Star Alliance on October 27. That also means a rejiggering of Continental's route map to reduce its service to SkyTeam hubs (including Atlanta, Detroit, Minneapolis, Cincinnati, Salt Lake City and Memphis) and new flights to Star Alliance hubs. Beginning October 27, Continental will launch flights from its Cleveland and Houston/Intercontinental hubs to Washington/Dulles, a hub for new Star Alliance partner United Airlines. But Continental won't make it comfortable to catch up with United's international route network in Dulles. The 1,190-mile IAH-IAD run will be serviced with a 50-seat regional jet. And you'll be stuffed into a 37-seat turboprop if you want to fly the 275+ miles from Cleveland to Dulles. … The partially completed expansion of the terminal at Helsinki opened today (August 27). The 150-million euro project is meant for long-haul flights, including those to and from the United States. … AirTran Airways has relocated facilities in Philadelphia. While the carrier's ticket counter and baggage claim remain in Concourse D, its flights now operate from Gates E6 and E8 in Concourse E. That's not convenient…
Business-Travel News You Need to Know
Southwest Airlines is in trouble with the feds over maintenance practices again. This time the Federal Aviation Administration wants to know why unapproved parts were used on about four dozen of the airline's fleet of Boeing 737s. Apparently the FAA isn't so worried that it is forcing Southwest to ground the planes and replace the parts, however. … Delta Air Lines, which has a zillion configurations for its BusinessElite business class, is moving them around again on key routes. On its New York/Kennedy-London/Heathrow route, Delta says the business class now has seats that convert to fully flat beds. And on transcontinental flights between Los Angeles, San Francisco and Kennedy, the carrier is switching to its narrow-body version of business class. That has 55 inches of legroom and cradle seats with 150 degrees of recline. … The government's per diem for lodging in 2010 will remain at the $70-a-night mark. You can examine the rates here. … Unhappy with the service at Hertz these days? An unhappy customer took this video about a long line at a Florida airport. It's making the rounds at YouTube.
Forget The Statistics. It's Still Labor's Fault…
What's wrong with the hopelessly unprofitable legacy airlines? If you listen to financial types, labor costs are still too high, especially in this era of sharply reduced revenue. But that knee-jerk reaction--blame the pilots, near-minimum wage flight attendants and any other unionized worker who draws a pension and a paycheck--is completely at odds with the facts. In the first quarter of the year, labor costs at the six legacy carriers averaged 22.1 percent of the cost per available seat mile (CASM). But if it is labor's fault, how come the three profitable carriers--Southwest, JetBlue and AirTran--all devote a larger portion of CASM to employees? At AirTran, labor accounts for 22.7 percent of the airline's CASM. It's 24.7 percent at JetBlue. And at Southwest, which has reported profits for 36 consecutive years, labor expenses are 33.1 percent of the CASM.
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ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT All of the opinions and material in this column are the sole property and responsibility of Joe Brancatelli. This material may not be reproduced in any form without his express written permission.
This column is Copyright © 2009 by Joe Brancatelli. JoeSentMe.com is Copyright © 2009 by Joe Brancatelli. All rights reserved.