Business, As Usual
Tuesday, August 12, 2014
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The days of cheap tickets are long gone.
The price to board a plane is now up for the fifth straight year, making it increasingly expensive to fly almost anywhere.
Airfares are on the rise, outpacing inflation according to the Consumer Price Index. Inflation is 2.1% while the average ticket price is up 2.7%, and now stands at $509.15.
And that's not adding in all the airline junk fees, which increase the price on average another $50 according to the Associated Press.
Despite all that, passenger numbers are not down, but up across the board. More people are flying than ever. The DOT reports that U.S. and foreign air carriers transported 4.2% more passengers this year than last year.
Who are these passengers? Not vacationers. They're people traveling for work. The leisure passenger is being replaced by the business traveler.
The Global Business Travel Association predicts that worldwide business travel will grow 6.9% this year to a record $1.18 trillion. The United States is the largest business travel market, with travelers spending $274 billion last year, a 4.5% increase over 2012.
The Price Is Wrong
On top of all this, fuel prices are down 7.2% from last year, but the airlines have not passed those savings along to the consumer.
Passengers aren't seeing any relief because airlines no longer need to entice fliers with lower fares. There are simply fewer choices today.
A wave of mergers that started in 2008 has left four U.S. airlines - American Airlines, Delta Airlines, Southwest Airlines and United Airlines - controlling more than 85% of the domestic air-travel market. Discount airlines such as Allegiant Air and Spirit Airlines have grown at breakneck speed but still carry a tiny fraction of overall passengers.
That control of the market has enabled the bigger airlines to charge more for tickets and not worry about being undercut by the competition. When you add in the $4 billion a year in junk fees, the result is record profits.
Baggage fees and some others were introduced in 2008 to offset losses from rising fuel prices. However, this year airlines are actually paying less for fuel - $2.96 a gallon so far, and 7.2% less than last year, when adjusted for inflation.
How will this affect us as a nation? We have become increasingly insular over the last few years. And with the cheapest flights to Europe averaging $1000 it will be interesting to see if the isolationist sentiment continues.
For middle-class American passengers, high ticket prices are just another squeeze:
- Many just cannot afford to travel anymore due to declining incomes and debts (home mortgages, medical care, student loans).
- factoring in excessive airline fees greatly increases the real cost of air tickets, with all the taxes, luggage fees, seat assignments and all the others they can dream up.
- Unfavorable exchange rates vs. the USA dollar that make every other cost more expensive in Europe vs. staying in the U.S.
- A real decline in paid vacation time by many workers, many are employed in situations where there is no paid vacation time (unlike Europe).
- Overall decline of interest in travel overseas.
If people stop traveling between the U.S. and the E.U., the world's two largest trading blocks, then something's really wrong.
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TSA Offering Cash For Ideas
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| A TSA agent checks IDs at LAX. TSA is offering the public cash for ideas to speed up screening lines. (Wally Skalij / LATimes) |
The deadline for the contest is August 15th with awards totaling $15,000, including a $5,000 first prize for the best suggestion.
Yes, prizes
totaling $15,000. Not even a $15,000 top prize. Any idea that'd speed up airport security lines would easily save millions in costs. Wouldn't a prize of $1 million for an idea that significantly improves the checkpoint bottleneck be justifiable and produce results? That tells you how much the TSA values your time and input.
If you're so inclined to participate, no need to suggest the following, they've already been inundated with:
- Just get rid of TSA
- Ban all carry-ons
- Make all passengers board in Speedos
TSA Reads FlyersRights?
In last Tuesday's newsletter, FlyersRights criticized TSA's policy of allowing randomly selected, non-PreCheck passengers into the PreCheck line.
That same day, TSA announced it is ending that policy.
What a coincidence!
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Not A Good Summer For The Dreamliner
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| A Thomson Airways aircraft was forced to make an emergency landing at a military base in Portugal after losing an engine over the Atlantic Ocean. |
The pilot of a 787 Dreamliner was forced to shut down one of the plane's two engines about one and a half hours into a scheduled nine-and-a-half hour flight from the Dominican Republic to Manchester, England.
The plane, one of six 787-800s owned by Thomson Airways, made a safe emergency landing in the Azores about four hours after the engine was shut down.
No explanation has been offered yet for the sudden engine failure.
FlyersRights does not trivialize the serious problems that have plagued the 787 program. These are not teething problems. These are serious issues and the reliability of the 787 has been abysmal.
There are only 170 jets flying and weekly there are diverts and turn backs.
- Aug. 9th Thomson Engine shutdown
- Aug. 8th Qatar Engine oil issue
- Aug. 4th Norwegian flaps wouldn't retract
- July 13th LAN loss of cabin pressure.
- July 6th ANA Engine anti ice issue
The list goes on. 40 serious incidences in 2 years affecting critical systems. Three severe hydraulic leaks, three flap/slats issues, three landing gear retraction issues, five engine oil consumption/leak issues, four cracked windshields, two pressurization issues. Not to mention the battery issues.
For comparison, the A380 has only has 11 incidents over the same time period and 60 over its much longer life span.
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First 3 Months Of FlyersRights' D.C. Office
It has been over 10 years since the demise of the last DC staffed office representing airline passengers (the Aviation Consumer Action Project
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FlyersRights.org headquarters
218 D St. SE, Washington DC 20003
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(1971-2002), which closed its office and laid off all staff due to chronic funding shortages.
While there are others who seek to speak for airline passengers in various contexts, only FlyersRights now has boots on the ground.
But we need our members to step forward with larger contributions to maintain and build on the progress made this summer to sensitizing the Congress to the both the plight of passengers and hopefully motivating major improvement in US air transportation.
More volunteers are needed more than ever. Many Congress persons will not meet with or give serious consideration to FlyersRights' supported legislation without constituent support and need to hear directly from the public about their problems and experiences.
Volunteers are therefore essential and will always be the backbone of this organization.
It has been my experience in decades of public interest advocacy that legislatures and officials do not react, much less enact major reforms without a groundswell of public support.
And unfortunately, it has all too often been only in response to a crisis or disaster with lots of "blood on the ground".
Otherwise, special interests hold sway (there are well over 50,000 registered lobbyists in DC alone) and block any reform that threatens their financial interests.
However, volunteers with professional staff working together can break through the status quo, but not without supreme effort that FlyersRights now has a fighting chance to achieve.
Paul Hudson
President
FlyersRights.org
Some Reflections from our Summer Interns
Briana Carlson
American University
Juris Doctor candidate, Washington College of Law
Prior to my internship with FlyersRights I had experienced the many frustrations that can go with flying, but had not realized how extensive these negative experiences could be. Further I was not aware of how few rights we as passengers had. Over the past summer I have become very familiar with the laws and regulations regarding air travel. I have realized how insufficient these laws are and have had the opportunity to be involved with what will hopefully be the solution.
I learned a great deal about the legislative process, including drafting a bill, I have also learned a great deal about lobbying and talking to congress about the frustrations on flying. Over all I think we laid the ground work to see some movement by congress in the near future. And I can't wait to see what happens. I am so grateful for having had the opportunity to intern for FlyersRights and to have learned all that I have learned.
Andrew Appelbaum
Georgetown University Law Center, Juris Doctor candidate
American University
At Flyers' Rights, I have gotten a front row seat to the law and rule making process.
After researching Supreme Court cases and current and recent aviation law and Department of Transportation regulations, I helped develop legislative proposals and rule comments. We met with many members of Congress to show them our proposals and share many of the complaints the organization has received.
We received differing receptions due to many factors such as the amount of complaints received by the Congressman, the number of airlines headquartered in the district, the Congressman's re-election or retirement situation, and the Congressman's relation with committees and subcommittees.
We have received support from many members of Congress and have established relationships to work together in the future.
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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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