U.S. airports have several ways to raise the revenue they need for operations and capital improvements but the most important in recent years has been the passenger facilities charge, the $4.50 fee added to every airline ticket. Airports now say they are stymied, in good measure by the airlines themselves, in raising the fee to keep up with their needs. Airlines have come to depend on fees paid by customers, and there are no restrictions in law -- only in the marketplace -- on what they can charge to recover costs.
But any increase in the airport PFCs must be approved by Congress, where airline lobbyists apparently have more clout than airport lobbyists do. Airlines usually get what they need from Congress, including a refusal in the last few sessions to raise the fee. Read a good Joe Sharkey column in the New York Times today on the airports' dilemma.
Here are some more DOT numbers, these released today, to chew on: U.S. airlines collected $3.4 billion in baggage fees from their customers in 2010. Read details for each carrier here. Reservation change fees were worth more than $2 billion in extra revenue. Those are the only two categories of non-ticket, or 'ancillary' revenue that government statisticians are able to track as separate revenue for the airlines.
The 13-year effort to get a few airlines to quit torturing their customers with hours-long onboard delays on airport tarmacs seems to have finally borne fruit. As we've reported several times over the last couple of years, the Department of Transportation has tough new rules in place, fining carriers for stranding people for three hours or more.
Last week, DOT Secretary Ray LaHood pointed out in announcing April's on-time statistics that over the last year there were only 20 flights delayed three hours or more.-- and that's out of about 6 million (yes that's right) total flights operated by the airlines that report stats There was a slight uptick in cancelled flights, probably as a result of the tarmac-stranding rule. For those who like to see all of the monthly statistics, the Air Travel Consumer report can be found here, and rankings for individual airports, including PHL, can be found at this Bureau of Transportation Statistics link.
Inquirer aviation beat reporter Linda Loyd has an excellent roundup today on what ails the airlines, and why its profit forecast for this year has been sharply reduced recently. Read on at this link ...
Did you hear -- yes, probably you did -- about Delta Air Lines backing down from charging soldiers returning from Afghanistan $200 apiece to check a fourth bag? It's been a hot item on broadcast news and the Web. Here's the tale of why Delta backed down and apologized to the solidiers.
It's only fitting that this story should pop up the day before J.D. Power and Associates came out wth its annual airline customer satisfaction ratings. Overall, the industry's ratings are improving but big carriers are still less satisfying than smaller airlines. And guess what else: Customers don't like fees. Read more about the shocking results here !!
A Delta or Delta-like incident was bound to happen once airlines fell in love with separate fees for services that once were part of ticket prices. Some of the fees are reasonable enough to many travelers, but others -- like what you will pay for a third or fourth bag -- seem to us to be gouging. Now Delta has learned what happens when lower-level airport personnel don't have the authority to waive the fees when they are ridiculous and the customer is being victimized -- and then someone puts it all on his Facebook page. Think this embarrassment will lead to lower fees? No chance -- most airlines can't survive using the old "business model."
Stocks of two major airlines with lots of international expsure, AMR and Delta, fell today on news of a forecast by the International Air Transport Association that worldwide airline profits will be about $4 billion this year, a sharp drop from last year. Higher fuel costs are the primary culprit. Read more about it all at this link ....
The Inquirer's airline reporter, Linda Loyd, had an article yesterday that offers another perspective on the effort of US Airways and Delta to shore up their operations at Washington National and New York LaGuardia airports. My May 24th post on the slots swap proposal, still pending before federal regulators, can be found below.
PHL has maintained its place as a US Airways hub at a time when other hubs are being trimmed because of airline mergers. A smaller hub mostly means fewer flight options for business travelers. But Cleveland and Memphis, the CO and DL hubs respectively that are on the chopping block, may be able to still thrive as air-travel centers if the experience of Pittsburgh post-US Airways is any indication, as this MSNBC story points out.