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The Honolulu Advertiser
Posted on: Sunday, April 18, 2010

Diluted perks, extra fees becoming the norm


By Tim Winship

In tough times, the fortunes of travelers rise and fall with those of the airlines that serve them. And the fortunes of the airlines have been dismal. Five of the nine largest U.S. airlines posted 2009 losses totaling almost $4 billion.

DECREASED COMFORT

Load factor states the average percentage of seats occupied across an airline's flight network.

To airline managers, it's a measure of efficiency. To fliers, it's a measure of discomfort the fuller the plane, the longer the boarding process, the more cramped the seating, and the more intense the battle for the overhead storage bins.

According to the DOT, the load factor for all U.S. passenger airlines was 72.9 percent in 2000, exceeding 80 percent only between June and August. By 2009, Delta, American and United all flew more than 80 percent full during the year.

What to do: Reserve a seat in an exit row, which features more legroom (extra fees apply). Or, consider paying $425 for an annual subscription to United's Economy Plus, with up to five extra inches of legroom. Use frequent-flier miles to upgrade to first-class.

BEING BUMPED

Overbooking means accepting more reservations than there are seats on the plane. Airlines now resort to more aggressive overbooking, risking high compensation costs and negative P.R. to keep planes flying as full as possible.

The DOT reports that involuntary denied boarding result of overbooking increased by 8.4 percent between 2007 and 2009, to 69,234 unlucky fliers, while the number of passengers flying only increased 1.8 percent.

What to do: Fly early in the day. If you're bumped, you have a better chance of getting on a later flight that same day. Check in early. When a flight is oversold, the airline uses check-in times among other criteria to choose bumpees.

EXTRA FEES

Perhaps the most visible and irritating side effect of the airlines' woes and passengers' misery are all the extra fees.

United's reported ancillary revenues (the term for baggage fees and the like) for 2009 is approximately $1.1 billion, a $141 million increase from 2008. That's more than a billion dollars not included in the ticket prices in the airline's advertising headlines.

What to do: Factor in all fees when comparison-shopping. And while fees have become a fact of travel life, some airlines are worse than others (Spirit, which just announced a fee to carry a bag onboard, and US Airways), and some are markedly better (Southwest).

DECREASED REWARDS

Airlines' increased stinginess extends into making seats available to members of their loyalty programs trying to redeem their miles for free trips.

For example: American gave away 5.2 million one-way travel awards in 2009, around 1 million fewer than in 2008. It would be one thing if the decreases were just in the absolute numbers of award travelers, but they're not. Award travelers represented 8.9 percent of American's boarded passengers in 2009, down significantly from 9.7 percent the previous year.

United reported a decrease from 2.3 million Mileage Plus awards in 2008 to 2.1 million in 2009, and a decrease in award travelers from 9.1 percent of the carrier's passengers in 2008 to 8.3 percent in 2009.

At Southwest, 2.4 million awards were issued in 2009, down from 2.8 million in 2008. In 2009, award travelers represented 7.7 percent of the company's passengers, down from 8.3 percent in 2008.

And at US Airways, the number of awards fell from 900,000 in 2008 to 800,000 in 2009, although awards as a percentage of total passengers remained flat at about 4 percent.

What to do: Be flexible when booking award flights. Try calling a customer service agent who can often find seats that aren't offered online, or devise an itinerary that circumvents award bottlenecks. There may be a fee to book by phone it's worth it if it makes the difference between using miles and paying cash.

DILUTED PERKS

During 2009, the larger airlines offered double elite-qualifying miles, or EQMs, for no less than six months. Even with the falloff in travel, this intensified competition for upgrades to first-class, even as the supply of first-class seats has been pared back.

What to do: The surest way to increase the odds of snagging an elite upgrade is to upgrade your elite status, from entry-level elite to mid-tier status, or to top-tier status. To do so, however, will require logging at least 50,000 or 75,000 EQMs on the host airline or its closest airline partners.

AIRLINE FOOD

If airline food was really as bad as some suggest, its absence might be considered a blessing.

What to do: Although some airlines sell meals or snacks on longer flights, you're better off, financially and nutritionally, bringing a sandwich from home or grabbing a to-go meal from an airport restaurant.

CONCLUSION

The airlines' behaviors are driven by financial desperation, as profit-starved companies do whatever it takes to maximize revenue. Worth noting: The airline that has been the most customer-friendly in its strategy and tactics, Southwest, has also posted the best financial performance.

Southwest never promised anything more than a bag of pretzels and a Coke, so there was no meal service to offload. But fees remain minimal, a fact the airline advertises. And the discount airline ranked sixth out of 19 airlines in the DOT's overbooking rankings (lower is better).

Travel relief will be a long time in coming. Keep expectations aligned with the airlines' anticipated behavior low, in other words.

And take consolation in the fact that in inflation-adjusted dollars, airline tickets today are still extremely cheap.