A Win-Lose Situation
Tuesday, July 29, 2014
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The airlines' pity party is long over.
The big news last week was the nation's airlines announcing yet another stellar quarter of record breaking profits, reaped at your expense.
For four years we've watched the industry rolling in dough thanks to its winning strategy of mergers, cutting flights and raising fares.
Passengers are also forking over 1,200 percent more in fees now than they did seven years ago.
Fewer Routes, Service Cuts, Packing Planes = Profit$ Up
Airlines have eliminated thousands of flights, especially short-haul flights using smaller planes. These years of cuts in air service boosted profits as it curtailed traveler choice and hurt some local economies.
Airlines began cutting flights years ago to stuff more people onto planes. But that's not the main reason for their big profits today. Inflated ticket prices due to mergers, frequent-flyer program cuts, contracting out labor, no frills and fees, fees, fees seems to be the formula for success.
Reduced competition at smaller airports often causes fares to rise. The DOT regularly cites Huntsville airport as having the highest average domestic faresamong the top 100 airports the department tracks, with round-trip fares averaging $559 in the third quarter of last year. The national average was $390.
Airline stocks Hit A 52-Week High, UAL Initiating A $1 Billion Buy Back
However, few were expecting the airlines' 2Q to be this great. Their record profits last Thursday yielded unexpected stock buy-backs, a rare dividend and even bonuses for some workers. The airlines are prospering as mergers have reduced competition, making it easier to keep prices high and raise billions from extra fees. They used bankruptcy to squeeze costs from employees and suppliers such as the smaller carriers that operate regional flights. So, what are the odds the airlines will generously share their largess and pass along the savings to you?
"It would seem unlikely that airlines will reduce airfares because of high profits, rather the contrary appears more likely. Since 2010 airfares and fees have been increasing far higher than the rate of inflation, and due to airline mergers, profits and airline stock prices have soared over 100%", said Paul Hudson, president of FlyersRights.
"With four airlines (Southwest, American, Delta and United) now controlling 85% of domestic flights, joint ventures and alliances exempt from antitrust laws, and US airlines keeping foreign carriers out of the US, competition is becoming a thing of the past," Hudson said.
So? Just buy airline stock and be happy!
Complaints rise
Consumer complaints to the Department of Transportation surged by one-fifth last year.
"The way airlines have taken 130-seat airplanes and expanded them to 150 seats to squeeze out more revenue I think is finally catching up with them, says Dean Headley, a business professor at Wichita State University.
Fortunately, consumers have a number of new rights as well as a right to complain, both to the airline and to the government.
Please do not hesitate to report an airline at: http://www.dot.gov/airconsumer/file-consumer-complaint.
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Press Release:
FLYERSRIGHTS CALLS ON AIRLINES TO DISCLOSE ROUTES FOR INTERNATIONAL FLIGHTS OVER CONFLICT ZONES
WASHINGTON, DC -
FlyersRights.org, the largest US based airline passenger organization, in light of the shoot down of the MH 17 flight over eastern Ukraine, has called on all airlines to provide passengers on international flights with detailed route maps on their web sites, so passengers can decide for themselves whether to take such high risk flights.
Paul Hudson, the group's president and longtime member of the FAA and TSA advisory committees on aviation safety and security stated:
"Airlines should no longer be able to hide behind weak and ambiguous international regulation and confidential warnings that are not shared with passengers. After the bombing of Pan Am 103 over Lockerbie, it came to light that governments and airlines had received specific warnings of a likely bombing, but chose to hide this knowledge from passengers and flight crews, those actually at risk. Now it has been revealed that some airlines were flying over eastern Ukraine despite danger warnings that were not shared with passengers.
Today, despite known dangers and the MH 17 shoot down, passengers are not being informed of dangerous flights over or near numerous conflict zones with missile systems capable of shooting down commercial airliners at over 30,000 feet.
In addition to high-risk areas like Ukraine and Russia, many other regions across the globe have airspace that is considered equally dangerous, including Syria, Iraq, Egypt-Sinai, the China Sea, North Korea, Libya, Yemen, Mali and the border between Pakistan and Afghanistan. Many of these highly conflicted areas are known to have anti-aircraft weapons deployed that are capable of downing virtually any commercial aircraft.
This week, an emergency meeting of the UN International Civil Aeronautics
Organization (ICAO) is being held to discuss the situation, but passenger representatives have unfortunately again been excluded from meetings between airlines and regulators, as they were previously after the mysterious disappearance of another Malaysian airliner over the Indian Ocean."
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DOT Fines Jumped
Within 3 Years of FlyersRights' Rules
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Screenshot of Southwest Fare Alerts. The airline has been DINGED several times by DOT for sale fare ad violations.
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In October 2013, Southwest ran a television ad on eight networks in the Atlanta area advertising $59 sale fares to New York, Los Angeles, and Chicago on certain dates.
An investigation by DOT's Aviation Enforcement Office revealed that Southwest did not have any seats available for $59 between Atlanta and any of the three quoted cities on any of the applicable travel dates.
Unfair and deceptive practices, such as advertising fares that don't exist, are the most common violation of passenger rights by the airlines, according to three years of U.S. Department of Transportation citation records.
An L.A. Times report found the most common citation for unfair and deceptive practices was not disclosing the full fare for a flight, including taxes. This is the DOT rule that the airlines are currently lobbying ferociously to throw out.
Also, only about half the fines imposed by the DOT were collected, with the balance either suspended or directed to be used to improve airline services.
Many airlines have repeated violations, which critics say show that fines don't fix bad behavior and inflict little pain on an industry that generated $4 billion for the three months ending June 30, 2014.
"In the case of multiple violations, the fines should be greater and they shouldn't be waived," said Paul Hudson, president of FlyersRights.org. "They should increase exponentially."
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 Last week's newsletter, Over Hostile Territory, erroneously reported that KLM was a member of the oneworld alliance, and that's how Malaysia Airlines flew under KLM's flight number.
KLM is only a member of SkyTeam. However, they are regular code-share partners with Malaysia Airlines.
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Getting on a Plane? Put This Number in Your Phone:
1-877-FLYERS6
The FlyersRights HOTLINE!
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FlyersRights.org depends on your
tax-dedcutible contribution.
Thank you.
Kate Hanni, founder
with Paul Hudson, President
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