Why Airlines Need Competition .
ABIA Offering More Direct Flights
Nearly nine million passengers fly in and out Austin Bergstrom International Airport every year. Passenger counts went up 7.5% over 2007. Airport officials say that could be what's drawing more airlines to launch more direct flights out of ABIA.
Seven airlines announced in February new non-stop flights to and from ABIA. Each one will launch by mid-May.
“Non-stop flights are the best way to travel,” said ABIA traveler Dave Chandran. Chandran flies out of ABIA several times a month for business. When he can, he flies non-stop.
"I get a lot of non-stops, actually more and more every year," said Chandran.
Airport officials say the new non-stop flights coming in and out of ABIA could ultimately lower fares; that's because more airlines are adding those non-stop flights, creating new competition. "Anytime you have to pay less to get better service I guess it's a better deal; can't complain," said traveler Miguel Lopez.
Southwest, Northwest, American, Air Canada, Jet Blue, vivaAerobus, and U.S. Airways are the airlines competing for the traveler's ticket. Two companies are already scheduled to launch competing direct flights to Fort Lauderdale in May; a bonus for those who travel for pleasure.
“Twice a month, and mostly it's for pleasure, so when it's for pleasure you want to there as soon as possible,” said Marilyn McCoy, another traveler.
There were already just over 50 direct flights available at ABIA. Officials say the added flights are a show of airline confidence in Austin travelers. Four non-stops to different cities across the country and even into Mexico were announced within a five day period. The new direct flights also connect Austin-Bergstrom with all five united hubs in the U.S. ***
--------------------------------------------------------------
by Jessica Vess
KVUE News
===========================================
Fliers Face More Misery
If a wave of mergers sweeps across U.S. airlines this year, the deals may improve the airlines' financial health, but will they make it more fun to fly? It's an open question whether mergers among the nation's legacy carriers - Delta/Northwest, United/Continental, for example - would do anything to improve the flying experience.
Flying in the U.S. has become increasingly frustrating and uncomfortable in recent years. Struggling carriers have cut back on everything from the number of flights and in-flight meals to the number of pillows and blankets, while piling more people onto every plane.
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Airlines are "cattle cars in the sky now," said Richard Gritta, an aviation economist at the University of Portland in Oregon. Many analysts fear air service will continue to decline as combined airlines look to cut costs - possibly hacking away costly hub operations, such as Delta's second-largest hub at Cincinnati/Northern Kentucky International Airport. And for passengers, mergers could mean fewer deals on leisure and last-minute airfares. The combined carriers would likely use smaller planes or operate fewer flights to cut the number of available seats and prop prices.
Fewer empty seats mean fewer spaces to be sold at the last minute via a fare sale. It also means higher prices even when booking six months ahead. Using frequent-flier miles is unlikely to get easier on a merged airline since the number of available seats will remain small while the number of club members will rise.
The people providing air service may be not be much happier than the passengers, at least for a while. They will likely be living through personal disruptions and job changes caused by merging two companies' cultures. "There isn't a case where (a single merger) went swimmingly," said Miami University management professor David Walsh, who has studied airline unions. "There's been bad or worse."
Finally, don't expect in-flight amenities to be upgraded in the wake of any airline merger, said George Hobica, founder of the Web site AirfareWatchdog.com. Savings from combining two airlines' operations will be applied "to the bottom line," Hobica said. "They are not going to start putting more olives in the martinis."
CROWDED, COSTLIER
Even if there aren't mergers, the average U.S. flyer will see the trends of crowded aircraft and rising ticket prices continue if fuel costs remain high. "There's been a sea change for domestic carriers in the last decade in which they can no longer afford to take losses to dominate a market," said Ron Kuhlmann, vice president of Unisys Transportation in San Francisco, which consults on airline and airport operations.
Kuhlmann said the lack of profitability has pushed major airlines to drop, reduce or outsource many domestic routes to regional airlines. This shift will continue if there are mergers, he said. As aircraft have gotten smaller, airport delays and congestion have remained high. The reason: Carriers are flying fewer passengers at a time but they're not cutting the number of aircraft flying. Other complaints about air service are rising, too. Mishandled baggage complaints have doubled to 4.4 million in 2007 from 2.2 million in 2003 as smaller carriers are doing more domestic flying.
"U.S. carriers are never going to not offer domestic service - but that's not where the money is now," Kuhlmann said. "The money and the yields are in international."
Analysts say there's only so much legacy airlines can do to cut cost before they lose even more of the domestic market to growing low-cost rivals, such as Southwest, Jet Blue and AirTran airlines. Still, they note the economics that are driving major U.S. carriers to merge are the same that have contributed to the misery of domestic flyers in recent years.
Those economics are the reason major U.S. airlines are all obsessed with flying more-lucrative international routes, the analysts believe. Pat Murphy, a former deputy assistant secretary for the Department of Transportation and a Washington, D.C., aviation consultant, said legacy carriers ceded market share to low-cost carriers, who in turn saturated the U.S. market with cheap tickets and took away the older carriers' pricing power.
In reaction, legacy carriers expanded their international routes "to flee low-cost carriers who are driving down ticket prices and have been growing at 10 to 15 percent a year," he said.
LOW-COST CARRIERS GAINING
One third of the U.S. market is now controlled by low-cost carriers, such as Southwest, JetBlue and AirTran, compared with only 20 percent in 2000, Murphy noted. But most U.S. low-cost carriers don't fly extensively outside the country, except choice destinations in the Caribbean, Mexico and Canada. So the mainline carriers cut domestic seating and redeployed their biggest jets internationally.
Delta, this region's dominant carrier, has been among the most aggressive with this strategy.
Between 2003 and 2006, the top five U.S. airlines (including Delta, American, United, Northwest and Continental) cut domestic seating capacity 4.2 percent even as domestic passenger traffic rose 5.4 percent. The result: fuller planes - with an average of nearly 80 percent of seats filled in 2006.
Delta and other legacy carriers have freed big jets for international service by using regional subsidiaries or contractors to fly domestic routes, as well as reducing the number of daily flights and flying smaller aircraft. In 2007, nearly 23 percent of Delta's seats were on regional jets, compared with less than 18 percent in 2004. Still the legacy carriers are retaining enough of their domestic routes to feed customers to their pricier international flights.
A source close to Delta told The Enquirer earlier this month that's the rationale for not slashing hubs or domestic service if Delta and Northwest should merge. The combined airline would rather retain most of its combined domestic footprint to serve as a platform for expanded foreign service. The source, however, acknowledged that both airlines will continue to trim domestic seating capacity.
INTERNATIONAL PUSH
John Heimlich, chief economist for the Air Transport Association, a Washington, D.C.-based industry trade group, said several factors pushed U.S. carriers to extend routes to overseas markets in Europe and Asia besides domestic competition from low-cost carriers. International economies are growing at a faster rate and the weakness of the U.S. dollar makes offering service overseas a better proposition. "U.S. carriers want a piece of that action," he said.
The preoccupation of U.S. carriers with international flights is unlikely to change anytime soon, since they're looking to maximize their stake in trans-Atlantic and trans-Pacific routes before they face an onslaught of competition. Liberalization of flying between the U.S. and Europe starts next month and is expected to let European carriers extend more flights to U.S. cities.
Bill Swelbar, an aviation consultant and researcher at the Massachusetts Institute of Technology, said the new "open skies" policy will also benefit U.S. carriers, letting all of them (not just American and United) fly to London's Heathrow Airport. "The next two to five years are absolutely game on," Swelbar said. ***
---------------------------------------------------------------------
by Alexander Coolidge | Acoolidge@enquirer.com
'Cattle cars in the sky' likely to be fuller on domestic hops
Cox News Service contributed.
Nearly nine million passengers fly in and out Austin Bergstrom International Airport every year. Passenger counts went up 7.5% over 2007. Airport officials say that could be what's drawing more airlines to launch more direct flights out of ABIA.
Seven airlines announced in February new non-stop flights to and from ABIA. Each one will launch by mid-May.
“Non-stop flights are the best way to travel,” said ABIA traveler Dave Chandran. Chandran flies out of ABIA several times a month for business. When he can, he flies non-stop.
"I get a lot of non-stops, actually more and more every year," said Chandran.
Airport officials say the new non-stop flights coming in and out of ABIA could ultimately lower fares; that's because more airlines are adding those non-stop flights, creating new competition. "Anytime you have to pay less to get better service I guess it's a better deal; can't complain," said traveler Miguel Lopez.
Southwest, Northwest, American, Air Canada, Jet Blue, vivaAerobus, and U.S. Airways are the airlines competing for the traveler's ticket. Two companies are already scheduled to launch competing direct flights to Fort Lauderdale in May; a bonus for those who travel for pleasure.
“Twice a month, and mostly it's for pleasure, so when it's for pleasure you want to there as soon as possible,” said Marilyn McCoy, another traveler.
There were already just over 50 direct flights available at ABIA. Officials say the added flights are a show of airline confidence in Austin travelers. Four non-stops to different cities across the country and even into Mexico were announced within a five day period. The new direct flights also connect Austin-Bergstrom with all five united hubs in the U.S. ***
--------------------------------------------------------------
by Jessica Vess
KVUE News
===========================================
Fliers Face More Misery
If a wave of mergers sweeps across U.S. airlines this year, the deals may improve the airlines' financial health, but will they make it more fun to fly? It's an open question whether mergers among the nation's legacy carriers - Delta/Northwest, United/Continental, for example - would do anything to improve the flying experience.
Flying in the U.S. has become increasingly frustrating and uncomfortable in recent years. Struggling carriers have cut back on everything from the number of flights and in-flight meals to the number of pillows and blankets, while piling more people onto every plane.
ADVERTISEMENT
Airlines are "cattle cars in the sky now," said Richard Gritta, an aviation economist at the University of Portland in Oregon. Many analysts fear air service will continue to decline as combined airlines look to cut costs - possibly hacking away costly hub operations, such as Delta's second-largest hub at Cincinnati/Northern Kentucky International Airport. And for passengers, mergers could mean fewer deals on leisure and last-minute airfares. The combined carriers would likely use smaller planes or operate fewer flights to cut the number of available seats and prop prices.
Fewer empty seats mean fewer spaces to be sold at the last minute via a fare sale. It also means higher prices even when booking six months ahead. Using frequent-flier miles is unlikely to get easier on a merged airline since the number of available seats will remain small while the number of club members will rise.
The people providing air service may be not be much happier than the passengers, at least for a while. They will likely be living through personal disruptions and job changes caused by merging two companies' cultures. "There isn't a case where (a single merger) went swimmingly," said Miami University management professor David Walsh, who has studied airline unions. "There's been bad or worse."
Finally, don't expect in-flight amenities to be upgraded in the wake of any airline merger, said George Hobica, founder of the Web site AirfareWatchdog.com. Savings from combining two airlines' operations will be applied "to the bottom line," Hobica said. "They are not going to start putting more olives in the martinis."
CROWDED, COSTLIER
Even if there aren't mergers, the average U.S. flyer will see the trends of crowded aircraft and rising ticket prices continue if fuel costs remain high. "There's been a sea change for domestic carriers in the last decade in which they can no longer afford to take losses to dominate a market," said Ron Kuhlmann, vice president of Unisys Transportation in San Francisco, which consults on airline and airport operations.
Kuhlmann said the lack of profitability has pushed major airlines to drop, reduce or outsource many domestic routes to regional airlines. This shift will continue if there are mergers, he said. As aircraft have gotten smaller, airport delays and congestion have remained high. The reason: Carriers are flying fewer passengers at a time but they're not cutting the number of aircraft flying. Other complaints about air service are rising, too. Mishandled baggage complaints have doubled to 4.4 million in 2007 from 2.2 million in 2003 as smaller carriers are doing more domestic flying.
"U.S. carriers are never going to not offer domestic service - but that's not where the money is now," Kuhlmann said. "The money and the yields are in international."
Analysts say there's only so much legacy airlines can do to cut cost before they lose even more of the domestic market to growing low-cost rivals, such as Southwest, Jet Blue and AirTran airlines. Still, they note the economics that are driving major U.S. carriers to merge are the same that have contributed to the misery of domestic flyers in recent years.
Those economics are the reason major U.S. airlines are all obsessed with flying more-lucrative international routes, the analysts believe. Pat Murphy, a former deputy assistant secretary for the Department of Transportation and a Washington, D.C., aviation consultant, said legacy carriers ceded market share to low-cost carriers, who in turn saturated the U.S. market with cheap tickets and took away the older carriers' pricing power.
In reaction, legacy carriers expanded their international routes "to flee low-cost carriers who are driving down ticket prices and have been growing at 10 to 15 percent a year," he said.
LOW-COST CARRIERS GAINING
One third of the U.S. market is now controlled by low-cost carriers, such as Southwest, JetBlue and AirTran, compared with only 20 percent in 2000, Murphy noted. But most U.S. low-cost carriers don't fly extensively outside the country, except choice destinations in the Caribbean, Mexico and Canada. So the mainline carriers cut domestic seating and redeployed their biggest jets internationally.
Delta, this region's dominant carrier, has been among the most aggressive with this strategy.
Between 2003 and 2006, the top five U.S. airlines (including Delta, American, United, Northwest and Continental) cut domestic seating capacity 4.2 percent even as domestic passenger traffic rose 5.4 percent. The result: fuller planes - with an average of nearly 80 percent of seats filled in 2006.
Delta and other legacy carriers have freed big jets for international service by using regional subsidiaries or contractors to fly domestic routes, as well as reducing the number of daily flights and flying smaller aircraft. In 2007, nearly 23 percent of Delta's seats were on regional jets, compared with less than 18 percent in 2004. Still the legacy carriers are retaining enough of their domestic routes to feed customers to their pricier international flights.
A source close to Delta told The Enquirer earlier this month that's the rationale for not slashing hubs or domestic service if Delta and Northwest should merge. The combined airline would rather retain most of its combined domestic footprint to serve as a platform for expanded foreign service. The source, however, acknowledged that both airlines will continue to trim domestic seating capacity.
INTERNATIONAL PUSH
John Heimlich, chief economist for the Air Transport Association, a Washington, D.C.-based industry trade group, said several factors pushed U.S. carriers to extend routes to overseas markets in Europe and Asia besides domestic competition from low-cost carriers. International economies are growing at a faster rate and the weakness of the U.S. dollar makes offering service overseas a better proposition. "U.S. carriers want a piece of that action," he said.
The preoccupation of U.S. carriers with international flights is unlikely to change anytime soon, since they're looking to maximize their stake in trans-Atlantic and trans-Pacific routes before they face an onslaught of competition. Liberalization of flying between the U.S. and Europe starts next month and is expected to let European carriers extend more flights to U.S. cities.
Bill Swelbar, an aviation consultant and researcher at the Massachusetts Institute of Technology, said the new "open skies" policy will also benefit U.S. carriers, letting all of them (not just American and United) fly to London's Heathrow Airport. "The next two to five years are absolutely game on," Swelbar said. ***
---------------------------------------------------------------------
by Alexander Coolidge | Acoolidge@enquirer.com
'Cattle cars in the sky' likely to be fuller on domestic hops
Cox News Service contributed.
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