Posts tagged aviation news
Sometimes there are items in the news that are too good to pass up. These three appeared on my radar scope in the last few days.
Problems at Heathrow
In an earlier post I discussed the opening of Terminal 5 at Heathrow Airport in London. This $8 billion terminal took 18 years to build and was supposed to be British Airways’ crown jewel; Queen Elizabeth herself opened the terminal. Instead, it has been a huge embarrassment with the failure of its new high-tech luggage handling system. Thousands of pieces of luggage have been misdirected and British Airways has had to cancel over 300 flights to/from Heathrow in the first week due to the problems. The International Herald Tribune described the situation by saying “BA’s Terminal 5 is proving to be one big hub of chaos.” (read the article)
Misdirected luggage is piling up at Terminal 5. BA puts the total at 20,000 pieces of luggage, while Jim Fitzpatrick, the aviation minister puts the figure at 28,000. BA had to do something to fix it. The Telegram reports that BA will ship the luggage to Italy and other places to be sorted and then reunited with its owners. (read the article)
The luggage problem will eventually be solved and Terminal 5 will be everything BA hoped it would be and not the public relations disaster it has turned out to be. In the meantime, Heathrow, which already has a terrible reputation among travelers, has taken another blow to its limited prestige.
Airline hires temporary fliers
Flybe Airlines in England offers service between Dublin and Norwich. Norwich paid Flybe more than half a million dollars to offer the service, but in exchange, Flybe had to fly at least 15,000 passengers on the route in the first 12 months. (That’s only 290 people a week, not a very high mark to reach!)
Now, as the12-month period draws to an end. Flybe is short of its goal. It tried to negotiate a new deal with Norwich which refused. Flybe’s solution? They hired 172 temps as flyers, paying them $75 each (plus a free bar and in-flight entertainment) to fly to Norwich so they can reach their passenger goal.
Norwich officials call the plan “ludicrous.” (read the article)
Google makes history with new service
Over the years, Google has developed a tradition of announcing new services on April 1. Their new service this year is certainly one of the most incredible. fantastic, amazing, and historic actions in the history of mankind!
Google has joined with Sir Richard Branson’s Virgin Group to form Virgle. According to their announcement, “Virgin founder Richard Branson and Google co-founders Larry Page and Sergey Brin will be leading hundreds of users on one of the grandest adventures in human history: Project Virgle, the first permanent human colony on Mars.”
What an incredible event! Bravo to Larry, Sergey, and Sir Richard!
We may all be pleased to know that with the implementation of the Open Skies treaty (see post below) American Airlines will now offer increased service to Heathrow instead of Gatwick. (Good news if you are an American Airlines traveler as I am, bad news if you happen to live near Heathrow and have to deal with the noise of hundreds of flights every day!) And it may also please us, particularly if we live in Utah, to know that Delta will be offering flights from Salt Lake City to Paris.
But the one question that most ask is, “Will this lead to lower air fares between the US and Europe?”
After studying the issue in great detail, I can conclusively say… “I don’t know.”
Under capatilism, increased competition normally means lower prices, but the airline industry has never seemed to work this way. That’s why your ticket for a flight may cost $791, while the person next to you might have only paid $256.
In an ideal world, I would expect prices to drop over the Atlantic. But the airlines have been brutally battered by skyrocketing fuel prices, increases that have weakened their bottom line. Several airlines in the US have had to file for bankruptcy. Latest reports from Europe state that Alitalia, the Italian airline, may be bought by the company formed by the merger of Air France and KLM.
The airlines are not doing well right now. A fare war over the Atlantic would benefit none of them, and they know it. We may see a slight drop in prices, but not much. I just checked the price of a round trip ticket from Austin to Heathrow in June, with taxes it was $1,378.20. That is not much of a bargain. A ticket to Frankfut cost $1,312.30, three times more than I paid to go there in early March. These are not mileage run fares!
The airlines look forward to the summer months when flights to and from Europe are full and fares are high. Maybe we will see a larger than normal reduction in fares during the winter when there is excess capacity.
Fare wars in the US generally start when Southwest or Jet Blue enter a market. Neither of them will be flying to Paris any time soon. So I look to the European low-fare airlines. Perhaps one of them has the financial strength to enter the market and start a low fare service, much as Sir Freddie Laker did with his Skytrain service between London and New York in 1997, $99 one way. (In all fairness, I should note Sir Freddie’s airline went bankrupt in 1982.) Something like this could drive the fares lower. Until then, the chances of American, Delta, British Airways, or any of the other major carriers starting a fare ware appear to be slim.
Perhaps the increased competition will stop fares from going much higher, but I see little hope for them to drop substantially.