Airlines

 

GAO Proposes Rules Governing Airline Ancillary Fees
Airline ancillary fees increased by 43 percent last year, totaling $13.5 billion, a number big enough to get attention from Congress and the government’s watchdog agency, the General Accounting Office. The GAO is designing rules requiring airlines to tell customers about these fees in a consistent way. A Congressional subcommittee on aviation just held hearings on the fees; at that hearing, the head of the National Business Travel Association testified that “fees equal fares” and that the DOT should require airlines to display those fees clearly at every step of the booking and purchasing process.  (Source: GAO, NBTA press releases.)

Airlines Revenues and Profits Are Up; So Are Fares
The Air Transport Association of America (ATA) said last week that passenger revenues for a core group of U.S. carriers in June was up 25 percent over last June.  Next, the aviation consulting firm AirlinesFinancials.com reported that the nine biggest airlines’ second quarter profits just missed a decade high. And, those same airlines’ second quarter revenues were the second highest in history. Finally, the Department of Transportation reported that average domestic airfares in the first quarter of 2010 were up 4.7 percent from the first quarter of 2009 and at their second highest level since 2001. The ATA quickly pointed out that, despite the rise, airfares continue to be a good deal—they may be higher than they were in 2009, but are at about the same level they were in 1999, when the average one-way fare was $153.88. (Source: ATA, AirlineFinancials.com, DOT press releases.)

American, JetBlue Tighten Partnership
Airlines continue to ally with each other in order to gain efficiencies of scale. Some, like Delta Air Lines and Northwest Airlines two years ago and United Airlines and Continental Airlines this year, are merging. But American Airlines and JetBlue Airways are taking another tack by tightening their partnership. American and JetBlue now offer interline service linking JetBlue domestic flights into Boston Logan and New York’s JFK to 14 international destinations American serves. It’s offering this service on domestic flights on which the two carriers do not overlap. You can book American and JetBlue flights on a single itinerary through your travel agency, major online travel agency websites or through American. Ultimately the two carriers will sell these flights on both airlines’ websites. Later this year, the two carriers will enable members of each airlines’ frequent flyer club--American’s AAdvantage program and JetBlue’s TrueBlue program--to earn points in their respective program when they fly these routes. (Source: American, JetBlue press release.)

FAA Says Mexico Falls Short of ICAO Safety Standards

The Federal Aviation Administration (FAA) said that Mexico does not meet international safety standards set by the International Civil Aviation Organization (ICAO).  As a result, the United States is downgrading Mexico from a Category 1 to Category 2 rating. With the IASA Category 2 rating, Mexican air carriers cannot establish new service to the United States, although they are allowed to maintain existing service.  The FAA said that Mexico is making “significant improvements” and that it will work closely with Mexico to help it regain its Category 1 ranking. Aeromexico, meanwhile, issued a statement saying that the downgrade does not refer to the safety of individual airlines. Aeromexico said it continues to comply with the highest international safety standards and is operating normally. (Source: FAA, Aeromexico press releases.)

Hotels

U.S. Hotel Rates, Occupancies Start to Rise

Occupancies in U.S. hotels were up 6.9 percent in June and rates increased slightly, according to Smith Travel Research. Occupancies rose to 65 percent and the average daily rate in June increased by one percent to $98.33. The first half of this year and the second quarter showed a marked improvement over last year, said Bobby Bowers, senior VP of STR. He said second quarter demand increased 8.7 percent, the biggest jump since STR started tracking these figures in 1987.  And, he said,  ADR is also going up slowly, especially for upper end hotels. Some cities are seeing big occupancy increases; Boston has seen occupancies go up nearly 15 percent for the first half of the year. And New York City rates are up 5.4 percent for the first half of the year. (Source: STR press release).