After Yemenia crash, EC moves to ban 'em all

CNN International called the other day, wanting to talk about EC Transport Minister Antonio Tajani's call for a global blacklist of airlines. Tajani wants to expand the European Commission's three-year-old list of airlines that it doesn't allow to fly into its airports or in its airspace. Interestingly, he made his proposal a couple of hours after the crash of a Yemenia A310 into the Indian Ocean near the Comoros Islands. Yemenia was under a partial EC ban: only its newest aircraft, not the A310, could be used on flights to the EC.
Leaving aside the question of Tajani's timing, which CNNi questioned, one has to ask: if the blacklist were global, who would compile and enforce it? Whose standards, criteria and rules would be used? How would it be enforced globally? Does ICAO, the UN-affiliated International Civil Aviation Organization, have the desire, or the will, to take on the task? All of these are questions that deserve thought before we nod in rapid assent.

(Photo: Wikipedia)

United in card game, agents up in arms

A move by United Airlines to shift some of the cost of selling tickets is setting off the very type of reaction that United doesn't need just now. The once-largest airline, number two United told many travel agents that they'd have to absorb the fees imposed by credit-card issuers in ticket sales. The fees, amounting to 2% to 3% of the total, are just part of the total $710 million bill that United pays each year, but for travel agents, who make little more than that on each ticket they sell, it's a real threat.
Agents, already burned by cuts in the ticket-sale commissions paid to them by airlines, have naturally rebelled. If the move pushes travellers to shift further from buying through travel agents to buying at an airline's own website, they'll lose opportunities for comparison shopping, Steve Tracas of vacation.com says. Agents can offer the widest spectrum of price information, says Tracas, a former US Airways sales executive.
But it could have further implications: on-line travel agencies like Orbitz and Expedia would likely have to start charging booking fees, fees that they had once charged but began cutting earlier this year, says PhoCusWright, a travel consultancy. Kevin Mitchell, the airline gadfly from the Business Travel Coalition, says the move is a way for United to lower its credit costs and so build its cash reserves in preparation for another bankruptcy filing.

Nuts about LaGuardia: Southwest makes a note

Fare's Fair: We want to give a nod of the keyboard to Nuts About Southwest, the Southwest Airlines blog. They picked up Airfield's post about the discounter's entry into the New York City market with its eight daily flights at LaGuardia. Since we were less than over-enthusiastic about this development, we're flattered.
But we have to repeat our restraint: these flights aren't shuttles, as some have called them, and they're not a major threat to incumbents.
They're ways for Southwest to fill out its system. Remember, five of the flights are to Chicago's Midway and three are to Baltimore. Midway and BWI are two of the carrier's major connecting points, and as much fun as flying is on the LUV line, getting to spots in Florida or the Midwest through a one-stop or a connection is hardly a deep competitive challenge. If Southwest had wanted to challenge others, it would have set flights between LaGuardia and Florida and cities in the (lower-case) southwest. Still...

Southwest diary: No New York Earthshakes

Southwest just began service at New York's LaGuardia, and that's been occasion for a load of stories about how the low-fares leader is changing its business model and transforming itself. Well, it is a sight, the image of a Southwest plane in or at least near Gotham, but the airline's eight daily LaGuardia flights mark more of a continuation of its recent service patterns than any big, radical shift or major change. The carrier began its focus on big, big-city airports years ago when it went back into Denver, moved into Washington's Dulles and Philadelphia and even the Twin Cities. It needed places to grow and it could find more profitable growth at these close-in airports than at Midland, Texas, or even at Omaha. Southwest had outgrown the tertiary airports of the world a long time ago, and had exploited the secondary airports such as Long Island's Islip or Manchester, N.H., about as much as it could.
The airline's been after higher yielding business travelers for a couple of years. It ended its trademark 'first come, first seated' boarding rules with "Business Select," in which flyers pay a little more and get to go to the front of the line, and also earn extra frequent-flyer points and a free drink.
The really interesting question is this: will Southwest bring down LaGuardia fares (the so-called "Southwest Effect") or will LaGuardia bring up Southwest fares? No, we're not saying that Southwest will be another full-fare airline and never would, but we'd note that other low-fare carriers that have entered the LaGuardia market, carriers such as AirTran, are pretty proud of the yields they get in the Big Apple.

Seeking the bottom un-farely

Everyone's looking for the bottom, from housing to retail to...airlines. In fact, they're looking so intently that they're feeling a bottom before their toes start to touch. The latest premature eureka comes from observers who note that the major carriers are trying their second fare hike in two weeks. Led by American and United, the big guys added another $10 to $20 on to roundtrip fares (depending on distance).
These observers seem to be placing a lot on Rick Seaney, the farecompare.com commentator. "The pace of domestic airfare sales has dried up recently," says Seaney. "I have been cautioning consumers for the past month that they procrastinate on purchasing airline tickets at their own risk - two airfare hikes in the past few weeks is the strongest signal I have seen that the bottom is either here or near," he says.
But let's inject a few notes here: the low-cost carriers, led by Southwest, JetBlue and AirTran, aren't taking part in the fare hikes. In fact, they're launching and pushing sales, and many of them are for travel in the peak summer period. AirTran just began a $44-and-up promotion for travel through November, and Gary Kelly, the Southwest airlines chief, says June revenues look weak and probably won't improve until the rest of the economy finds its bottom.

Flinty Republic moves: buy 'em when they're broke

No, this is not consolidation. This is not the beginning of the next merger wave. This is not even about 'bottom fishers'. Instead, Republic Airways' buying spree - in which it is buying both Frontier Airlines in bankruptcy court and Midwest Airlines from private investors - is about protecting its investments. Republic, which owns three regional carriers, has been a lender of next-to-last resort for other airlines. It put money into the US Airways bankruptcy, and it lent Midwest $15 million last year as the Milwaukee-based carrier teetered on the edge. That deal came with strings: Republic also got a deal to fly its regional jets for Midwest, and so a source of revenue. With Frontier, based in Denver, Republic's $108 million bid to bring the carrier out of bankruptcy is way to recoup moneys Frontier already owes it for some flying that the Indianapolis-based Republic did for it.
The deals do also get Republic two brand-name airlines, each of which has had a strong, almost cult-like following. In Milwaukee, where Midwest is based, people think of it as their hometown airline, while Frontier has a similar appeal in Denver. Of course, both cities also have Southwest, whose competition certainly helped squeeze Frontier and which just announced service at Milwaukee.
(Photo: Republic Embraer in Midwest Airlines livery, via Flickr)

Clear closes, clouding 'trusted traveler' choices

For once, the TSA is not to blame. Doubtless, the Transportation Security Administration will get blamed, but the demise of Clear, the privately owned firm that promised to get flyers through TSA checkpoints more quickly, is more complex than federal obstructionism. The card company, founded by noted journalist Steve Brill, had begun with the premise that if it could provide the TSA with a promise that its members were indeed who they said they were, they could get through the TSA's airport checkpoints more quickly. Frequent flyers only had to give Clear a fingerprint and an eye scan and let it do a little background check; in return for that and their $200 annual fee, road warriors and other knowledgeable flyers would go to a special lane where they underwent the usual TSA checks.
The difference was that this was a lane where everyone else knew just what to do, rather than becoming flustered by such challenges as opening their bags or keeping their boarding passes out.
But Clear said late on Monday that its bankers and lenders had run out of patience and it was shutting down. The TSA, even though culturally wary of cooperating with a private vendor and deeply suspicious of 'special treatment' for any group of flyers, had worked with Clear, making room for it at airport checkpoints.
TSA even adopted (or just plain took) one of Clear's basic premises: segregating experienced flyers from the infrequent or the frequently flustered. The agency late last year began offering 'self-select' lanes at many airports, letting the true road warrior get into different and presumably faster lanes than the mom and pop who fly once a year. (Well, maybe you can blame TSA after all.)
What happens to the other 'trusted traveler' firm, FLO, is an open question. Shares in FLO have been at penny stock levels for some time, so its future is less than clear.
(Photo: Denver airport, via Flickr)