Money, money, money…
US airlines collected more than US$6bn in baggage and reservation change fees from passengers last year, the highest amount since the fees were adopted.
Airlines first started charging for a checked suitcase in 2008 and the fees have inexorably climbed ever since. Today, it’s common for an airline to charge around US$20-25 each way for the first checked bag, US$35 for the second bag and then a range of fees for overweight or oversized bags thereafter.
The nation’s 15 largest carriers amassed a combined US$3.5bn in bag fees in 2012, which was up 3.8% over 2011: these are the findings of the Bureau of Transportation, which has just published some updated data on the subject. Of equal interest were the fees for changing a reservation: these totaled an impressive US$2.6bn, which was up by 7.3% on last year’s figures.
On the plus side of the equation, airlines garnered US$159.5bn in revenues in 2012, a figure that has to be reconciled with their outgoings of US$153.6bn, according to government figures. Looked at baldly, though, their profit margin has been derived entirely from the baggage and reservation change fees.
Should this be a worry to investors?
Clearly not, if carriers can continue to extract such sums from the traveling public…
Air General spreads its wings
After over half a century in the cargo handling business, Air General expanded its portfolio last year to include Air General Security; and it has now announced the inauguration of its Passenger Handling Division.
Donna Blanchard, Vice President Business Development, commented on the initiative: “This third division of our company represents a natural progression, building upon a successful and long-term relationship with our cargo customers who value the medium-size and family value appeal of the Air General culture.”
Donna, formerly the Director of Customer Service Delivery for North America and Asia Pacific at British Airways, is set to couple in-house expertise in international and domestic passenger handling with proven techniques for hiring the right people to offer the special skills required to safely and efficiently guide passengers through the airport process.
Separately, Air General has announced that it had earlier been awarded its first contract with Southwest Airlines to handle cargo in Manchester, New Hampshire.
Representation gets underway
The International Association of Machinists and Aerospace Workers, along with the Transport Workers Union of America, have announced a partnership with a view to representing upwards of 30,000 ground workers at the reborn American Airlines. This is in the wake of the merger between American Airlines and US Airways.
Joint agreements have now been signed which will embrace the Mechanic and Related, Fleet Service and the Stores employee work groups. The new labor partnership, which henceforth will be known as the TWU/IAM Employee Association, is to ask the federal National Mediation Board to hold elections among the combined employees for each classification upon the final stage of the carriers’ merger. This election will formalize the agreement that was recently reached.
And end to delays?
Following three days of furloughs for air traffic controllers in response to the much-criticized government sequestration, the FAA returned to regular staffing levels and resumed normal operations on April 30.
The Federal Aviation Administration has thus cancelled its budget-driven plans to close almost 150 air traffic control towers at smaller US airports: this occurred just two weeks after Congress passed legislation to end air traffic controller furloughs, which had been widely reported as delaying flights around the US.
The US Transportation Secretary, Ray LaHood, stated that federal officials had determined that the legislation would give the FAA enough flexibility to keep funding the towers that had been due to be closed in June this year as an economy drive.
The White House had announced plans for both the furloughs and the tower closures earlier this year to meet automatic spending cuts required by Congress under the so-called sequestration law aimed at reducing the US budget deficit. Congress took up the case when it was revealed that these furloughs were causing problems for travelers at major airports across the country.