Sunday, June 28, 2009

more US airline shenanigans

Does this ever stop?
Please allow me to catch you all up on the latest airline changes that will affect you;

1. many carriers have increased their airport baggage fees by $5, justifying this by allowing you to pay in advance by checking in online
2. some EU carriers are considering charging for toilet privileges
3. I have taken more than a dozen flights in past 3 months. They are all 100% full and the airport are packed but yet I continue to read about reduced load and therefore the carriers are reducing their capacity; recently by 4% which now means about 12% for the year.
4. An overall increase in using aircraft that have deferred maintenance issues. Some are small like an AV system being inoperative so no movies or sound system is available but some may be an items such as an inoperative window defroster.... not important in Phoenix but very important in Denver.
5. Last week, United announced that it will discontinue to allow some travel agencies to issue United tickets on their plate (or specifically, the merchant account used when agencies issue a ticket in our global distribution system). This limits the agency to the type(s) of payment it can receive for a United ticket and will increase costs to the consumer.

Why should #5 bother the traveling consumer & corporate travel account? Because it is the beginning of what could amount to a fundamental shift in the payment of merchant service fees; the cost paid to a bank for the use of your credit card, from the merchant (in this case the airline) to the consumer. That would amount to a 4% increase in fees. The travel industry has been speculating the airlines might try this since 2006 and now it seems like a small litmus test is here. To put this in perspective, think of everytime you use a credit card; retail store, grocery store, etc. Now, think about a 4% administrative cost added to your bill each time you want to use that credit or debit card.

Historically, the traveling public and corporate accounts have been "sheep" about accepting changes by the airlines that have amounted to rapidly increased costs and reduction in service while their management report losses but take very large compensation packages and bonuses. Will this be one more time we will just lay down and take it?

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