FlyersRights.org
Foreign Invasion
Tuesday, October 7, 2014
Today, with planes flying as full as sardine cans and the holiday travel season around the corner, it would appear that U.S. airlines are determined to tell air travelers to take a hike.
At least that’s what passengers might infer from the number of flights cut at many of the nation’s airports.
Nearly three dozen midsize airports saw a quarter of their flights cut in the past 5 years -in such places as Milwaukee, New Orleans, Pittsburgh, and San Antonio. A group of 76 small airports lost 20 percent of their pre-2007 flights. And 23 airports lost all their air service.
Airfares continue to rise, up nearly 12 percent since 2009, according to an Associated Press analysis.
With four airlines now serving 85 percent of the domestic market, domestic carriers haven’t had to worry about the one factor that could disrupt their cram-’em-in strategy: competition.
That is, until now.
The summer of 2014 marked a new chapter in the development of the global passenger air travel market. Only a few media sources including FlyersRights covered Norwegian Air Shuttle’s ambitious launching of international air service to the U.S. 
Back in July, Norwegian launched flights from London Gatwick to three USA-based destinations with some tickets starting at $300, or approximately half the price of traditional carriers.
Norwegian’s proposed Honolulu-Oslo transpolar route goes over the North Sea, Arctic Sea, and Pacific ocean.
U.S. airlines said no fair! How dare they?
In unheard-of unity, airline executives and labor groups worked together to get Congress to block Norwegian from operating these routes.  
But the floodgates had cracked, proving there was great pent up demand for clean, modern air travel in the U.S., as well as courteous, friendly staff, cheaper fares, and newer planes. 
“We believe that the U.S is low-hanging fruit,” Norwegian CEO Bjorn Kjos is quoted as saying by Bloomberg News. “People love to fly cheap and they love to fly far.”
Norwegian’s latest ambition is low-cost transpolar flights nonstop Oslo-Honolulu, reported the Hawaiian Tourism Board on Monday.
Emirates is also interested in flying into America, causing panic amongst U.S. airlines. It currently flies to nine U.S. destinations, including brand new A380 service to Dallas-Fort Worth. 
The U.S. represents just 7 percent of revenue for Emirates, but the Dubai-based carrier is “looking for more points” on the map and hopes to boost its presence in America, said Emirates President Tim Clark at an aviation conference in Chicago last month.
Ryanair, too, has been eyeing a low-fare, transatlantic route for several years. Back in 2007, it was reportedly planning to start a new airline that would operate long-haul flights between Europe and the United States.
Ryanair’s chief executive, Michael O’Leary said that the new airline, RyanAtlantic, would offer flights to five or six US cities with fares starting at €10.00 and a business class service at a higher rate. It’s intended to rival Virgin Atlantic.
RyanAtlantic is on hold until it can take delivery of 40 to 50 newly-acquired aircraft within a two-year period at opportunistic prices, said O’Leary.
O’Leary mentioned he hopes to avoid the problems that faced Norwegian, which he believes is too small to enjoy economies of scale.
Foreign Exchange 
As things stand now, the United States allows foreign airlines to serve its major cities as part of international agreements that have been around for decades.
The EU-US Open Skies Agreement allows any airline of the European Union and any airline of the United States to fly between any point in the European Union and any point in the United States.
Airlines of the United States are also allowed to fly between points in the European Union. Airlines of the European Union are also allowed to fly between the United States and non-EU countries like Switzerland.
Imagine if foreign carriers could offer flights in the United States, competing head-to-head with our domestic airlines. What lessons could U.S. airlines learn from their global peers?
“Foreign airline competition and capital investment in U.S. airlines could quickly improve passenger service, lower fares, result in new start-up airlines, and relieve overcrowding,” Paul Hudson, president of FlyersRights.org told USA TODAY in January.

US Airlines Pushing Govt to Reject Open Skies Treaty

Delta Air Lines, American Airlines and United Airlines are planning to urge the U.S. government to re-evaluate its approach towards open skies agreements with other countries, amid increased worry over competition, reported FlightGlobal last Friday.

Sources told Flightglobal that chief executives from the three airlines had scheduled a meeting with senior White House officials, including Transportation Secretary Anthony Foxx, during the week of October 6, but the meeting had been postponed.
Delta, American and United all declined to comment on the meeting when contacted by Flightglobal.  The US Department of Transportation, however, confirmed that the meeting had been rescheduled.
The request to seek a meeting with White House officials by the three U.S. carriers comes as the airlines are growing increasingly annoyed with DOT consumer protection regulations that have been rolled out in recent years, championed by FlyersRights.
Your Letters
 
(In response to last week’s letter subject, that airfares are higher today than decades ago, when factoring in the myriad of fees)
 
Dear FlyersRights:
 
We are not talking about services, conveniences, or freedoms in air travel here. Those things are a thing
of the past, period. No amount of discussion or Congressional rhetoric is ever going to change that. The reality is that airlines will never capitulate and return to the classic standards of comfort and customer care of the past. The question presented here is value per seat per flyer. And the per mile traveled value cannot be beat by any other means of travel today when time and distance are the major factors.
As we all know, airlines are big business and big business requires a lot of capital to stay in business. Currently, about 1.4 billion people a year travel by air and that number increases every year. This means a lot of people rely on the airlines to get them from point “A” to point “B”. This provides major capital for Delta, United, American, Alaskan, KLM, Quantas, and every other airline out there. There is more than enough competition in the industry and flyers are not going to go away any time soon. Most major airlines operate in capitalistic countries and societies with investors and owners that are in business to make money. Right now they’re doing just that, making money.
Why do I bring this into the rhetoric here? Because I am talking value per dollar and even with airlines making record profits in some cases, the price you pay to fly is still an unbeatable value. You can never again make comparisons between value and personal service. As long as flyers continue to search the internet and other sources for the cheapest fare available to their desired destination the airlines will continue to have the upper hand on flyers. And in the weak economy we are still in today, flyers will continue to look for those bargains. The proof of this is all the websites that are available to search for those bargain fares.
I wish FlyersRights.com all the best in its endeavors to advocate for flyers and I have supported FlyersRights for several years now. But the entire airline industry has changed greatly in the past several years and I seriously don’t see any major reversals in their current operations. As a free market society, unless laws are being broken, all industry, including the airlines, will continue to seek every method of producing revenue. Here again, I don’t see any laws making it through Congress that will change the airline industry in any major way. The same goes for the DOT and the FAA. Free market… As American as apple pie.
Economics tell the truth, and the numbers indicate flying is still a good value. The service and customer care may stink at times but there’s always the choice of flying first class.
– CJK
Dear CJK:
You raise a number of interesting points.First, as to airfares being an “incredible value”, there is a widespread public misconception that airfares are lower since 1978 due to deregulation.  Actually, airfares were declining rapidly prior to 1978 under regulation, and some studies show that deregulation retarded the rate of decrease.  See Did Passenger Savings Occur After Airline Deregulation? by David B. Richards, Journal of Transportation Research, Vol. 46, No. 1, (Spr. 2007), pp. 73-93 http://www.trforum.org/journal.
In any case, it is clear that airfares did drop after 9/11 and have soared since 2010.  For example average airfare for international flights increased 23% in one year.  http://www.marketwatch.com/story/airfare-soars-as-carriers-keep-capacity-tight-2010-05-14.
  
High taxes by EU on transatlantic airfares, now as high as 200% (vs 21% for US domestic flights) are also hurting both the US and EU economies. US airlines have had a dramatic recovery.  This is due to several factors:  Consolidation, breaking union contracts and debt elimination mostly through bankruptcies, ancillary fees and restriction of competition.  See IATA Press Release No. 30, June 2, 2014.The “free market” only works if there is easy entry into a market and controls on monopoly type pricing power as well as abuses through antitrust and consumer protection laws.  This has broken down for air travel.  

 
Only 4 airlines control 85% of domestic flights, airports and the two international alliances (joint ventures) now have antitrust waivers, and US carriers are protected from foreign competition by Cold War era legislation. 
 
Airlines are also exempt for all state, local and most federal consumer protection law plus common law torts not involving death or physical injury. 
 
The state of the airline industry is currently best described as a monopsony with minimal regulation, quite similar to the position of the railroads in the late 1800s when they were the only practical long distance transportation (the term being railroaded was coined to describe their multiple abuses) or cable TV companies today.If the free market was working, there should be lots of new carriers and an expansion of new flights and routes.  Instead the opposite is happening, and planes are at a record 84% capacity vs an historic 50%.Second, no one disputes that service has declined dramatically under deregulation. Even longtime CEO of American Airlines Robert Crandell bemoans the fact that US carrier service is now inferior to virtual
ly all foreign carriers and calls it unacceptable.

It is clearly possible for service to improve without higher airfares, but it requires reasonable regulation (see the FlyersRights Airline Passenger Bill of Rights 2.0) to prevent abuses and preserve public safety, comfort and convenience (all things that a FAA certificate to provide public transportation is supposed to ensure) and competition.  

 
There has never been a safe, stable and affordable public transportation system without regulation, no where & at no time. The mantra that unregulated mass air transportation is best and will handle any problems is a fantasy.  As for airfares, they should be declining as fuel costs, labor costs and capital costs have all declined since 2009. Instead, profits are up over 300% and stock prices over 100% for US carriers since 2012.     Paul Hudson, Pres.

FlyersRights.org
Is It Time For Airline Seat Standards?
Christopher Elliott, Special for USA TODAY October 6, 2014

It’s not your imagination. Airline seats are shrinking.

A wave of air-rage incidents has exposed the problem like a threadbare economy class seat on an aging puddle jumper.

“Airlines are aggressively reducing seat and passenger space to squeeze more revenue out passengers, despite health and safety being threatened,” says Paul Hudson, president of FlyersRights.org, an advocacy group for air travelers.

Actually, the solution is as simple as developing minimum seat comfort standards and enacting common-sense government regulation to enforce them.

Over the years, many carriers have quietly moved the seats closer together, reducing both seat pitch and cushion sizes, and insisting that their customers demanded it. How so? They claim that we only wanted cheap fares and were willing to sacrifice space for it. But they didn’t have any compelling numbers to back that assertion.

Truth is, as a consumer advocate, I’ve never received a request from a passenger to reduce the amount of space on a plane. No one ever asked to be squished into a seat in exchange for a deal.

That must end. One fix is for a pro-consumer U.S. Senator to slip a sentence in the next FAA Reauthorization Bill, asking the Transportation Department to establish minimum seat space standards.

FlyersRights.org is also pushing for legislation that would require the FAA to set seat standards.

Read More: USATODAY

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                                     Kate Hanni, founder 
                                   with Paul Hudson, President

 

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