Archive for April, 2010
The latest news in the airline industry is a possible merger between United Airlines and US Air. This is not the first time the two have considered a merger. United attempted to buy US Air in 2001 but was unable to get approval form federal regulators. Talks between the two collapsed in 2008 shortly after the Delta-Northwest merger. Although US Air is the smaller of the two airlines, it appears that it would try to purchase United in an all-stock deal. No word yet from the unions.
In the meantime, other sources say Continental may try to outbid US Air for United. And while all this is going on in the US, British Airways and Iberia have announced that they will merge and become the International Consolidated Airlines Group SA holding company. Each airline will continue to fly under its current brand name.
As all this goes on, the one airline that does not come up in merger rumors is American Airlines. American’s CEO, Gerard Arpey said “Inevitably, there will be consolidation around the world in terms of the airline industry, I think generally fewer carriers will be better for the industry, but it’s not a panacea.” He added that American would concentrate on building its hubs in New York, Los Angeles, Miami, and Dallas/Fort Worth, adding that he felt American was “well positioned” in the industry.
While American may not be merging, its list of partner airlines grows as the oneworld® alliance adds new partners. In the last few months financially troubled Japan Airlines (JAL) agreed to remain a member of the group, turning down a strong offer from Delta to join the SkyTeam alliance, a move that would have greatly weakened American’s presence in Asia. JAL and American have filed for anti-trust immunity to increase their co-operation across the Pacific.
The US Department of Transportation gave tentative approval in February to the application by oneworld’s transatlantic partners American Airlines, British Airways, Iberia, Finnair and Royal Jordanian for anti-trust immunity across the Atlantic – and the European Commission began market testing of proposed remedies in a key step towards approval of the proposed transatlantic joint business agreement between American, BA and Iberia.
Mexicana joined the alliance last year, adding its many routes to Latin America. Russia’s S7 airlines will join later this year, opening up many locations throughout Russia and the former Soviet Republics to alliance members.
Kingfisher, the leading domestic carrier in India, announced that it would join the alliance in 2011. This will give oneworld passengers access to 58 cities in India, home of one of the world’s fastest growing economies.
So this remains a busy and rapidly changing time in the airline industry. Airlines merge, alliances grow, legal waivers are requested. The only thing we cannot talk about is the industry being profitable. Hopefully all these changes will bring that about.
One of the goals of a mileage run is to find a good deal. Sadly, that is becoming increasingly difficult to do.
It’s normal for airfares to rise as summer approaches, we expect that to happen. But this summer may be more challenging than others. Airfares are up 13% compared to last year. If one airline raises its fares, others soon follow.
This is also true when it comes to fees. United Airlines was the first US airline to charge a fee for baggage, almost all of the others, with the exception of Southwest, soon followed that trend. But now, Spirit Airlines has taken it once step further with one of the worst fees I have seen! Spirit is the first US carrier to charge a fee for carry-on bags stored in overhead bins! Yes, that’s right; carry-on!
And the fee is not cheap: $30 if you pay in advance, $45 if you pay at the airport. Small bags, such as a purse or briefcase that can fit under a seat will fly for free. If you fly Spirit Airlines, and get bulkhead seating, you’ll have to pay an extra fee because there is no seat in front of you under which you can store your bag. I hope this fee stays with Spirit and Spirit alone.
The rising air fares have made it more difficult for me to find a mileage run. American Airlines is offering double mileage bonuses on some new routes (DFW to Sioux Falls, South Dakota for example), but even with the bonus miles, the fare is not low enough for this to be a good mileage run.
For a short time last week, Continental offered one of the best deals I had seen in a long time, round trip from Houston to Tokyo for $455. I wish I could find a similar deal on AA.
I looked at yet another Seattle mileage run in June, The routing took me to Dallas, Portland, Seattle, then back to Dallas then Austin. But with a $265 fare, that came 2.77 cents per mile, not a particularly good deal. So, I will keep looking,
In the meantime, I look forward to my Seattle trip next weekend. I’ll visit the Museum of Flight, and already have a ticket for the Mariners game that evening against Detroit. It should be a fun trip!