February 24, 2015 | Kendall Creighton Strike One! FlyersRights Takes Aim At Legacy Carriers February 24, 2015 It was a big week for FlyersRights! (Mark Shaver / For the LATimes) Last Wednesday we filed a petition with the Department of Transportation demanding a cap on fees that the airlines charge for changing a flight. As many of you know, changing a flight can be downright exploitation, especially if you’re flying internationally. FlyersRights is arguing that the fees go way too far, and the DOT needs to change the rules. We sent an 18-page petition to the DOT, arguing that the fees – once below $100 – have ballooned as high as $750, and we’re calling for DOT to cap the fees at $100. The agency has not weighed in on airline pricing since the industry was deregulated in 1978. However, we have a fight ahead of us since the DOT has dismissed similar petitions, including one submitted in 2012 by a Delta Airlines passenger who sought a refund or change fee waiver when an airline changes a passenger’s scheduled flight. Paul Hudson, President of FlyersRights said, “With consolidation and antitrust exemptions allowing price fixing and capacity restriction for airline alliances, reasonable regulation is essential. He continued, “Many airlines now engage in unabashed rampant price gouging by charging change fees that have absolutely no relation to the cost of service and some have have announced they will continue to raise fees and fares without limit as long as they can get away with it.” As Richard Baxley, FlyersRights’ staff attorney explained to USA Today, “DOT has the authority, but they’ve also acknowledged that in the last 36 years since deregulation, they’ve never exercised it, they’ve never denied a price or fee for being unreasonable,” A spokesperson for Airlines for America, which represents the major airlines said, “The marketplace is working, and the petition doesn’t demonstrate otherwise.” So, what do you say? Is the marketplace working? Leave your comment on our Rulemaking petition at Regulations.gov. (Docket ID: DOT-OST-2015-0031-0001) Also, please send us your change-fee horror stories! Wargames U.S. Airlines Attack Gulf Rivals Image: Crankyflier.com What if foreign airlines could fly within the USA? Conventional wisdom says that every US airline would be out of business within a week, (or forced to upgrade their service). That’s a real threat for the big three airlines, Delta, United and American, an unholy alliance that recently joined forces to lobby the White House to block access by rivals based in the Persian Gulf. They cited unfair competition from Emirates, Etihad Airlines and Qatar Airways. Deregulation of the US airlines has led to a big consolidation and fear of competition. Yet, over the last 30 years , the United States signed more than 100 open skies agreements with other countries to remove restrictions on international air travel. Putting A Dent In Open Skies The war of words quickly escalated, with Delta CEO Richard Anderson attributing the Gulf carriers with the 9/11 terrorism. This prompted the CEO of Emirates, Tim Clark, to remark that US airlines can’t compete because they’re terrible. The big three US airlines also claimed the Gulf carriers received more than $40 billion in subsidies from their governments since 2004, making competition with them unfair because their costs are artificially low. Mr. Clark retorted that it’s the US carriers that are subsidized – having all been bailed out by the US government in one form or another and challenged them on where they got the $40 billion dollar number from. BloombergView points out that the big American airlines receive antitrust immunity to form alliances with companies like British Airways and Lufthansa to jointly set prices, share profits and schedule service on popular routes like New York to London. These alliances helped American and European companies get around laws in both places that restrict the foreign ownership of airlines and they raise fares and airline profits by reducing competition. That is what two economists found when they studied the effect of alliances on trans-Atlantic flights between 2005 and 2011, according to a 2012 article in the Antitrust Law Journal. In sum, the US airlines seem to be reliving the same scenario that the automakers lived in the 80’s when the Japanese and Koreans began to enter the US market. Instead of putting out a better product, they’re asking for the government to help them maintain their monopoly. Read More: NYT Letters! Airlines, TSA have made flying no fun Let me count the ways why airline travel is no fun anymore. TSA inspections of luggage are now a necessary invasion of our privacy. Passengers often become sick from poorly filtered cabin air. Seat pitch is often so narrow as to not only be uncomfortable but often unhealthy. Food … there is no food. Paying for your luggage to accompany you is ridiculous. Paying for a window seat is even more ridiculous. Boarding in numbered waves is cumbersome and irritating. Mileage plans offered by the airlines are such a joke that TV ads make fun of them, and fares are often adjusted up or down on a daily basis. Oh, the joys of airline flight. (Posted in the Salt Lake City Tribune 2/21/15) Re. Ralph Nader’s letter to United CEO, Jeff Smisek Dear FlyersRights: Apparently Smisek either never observed or listened to Gordon Bethune, CEO of Continental, who, along with COO Greg Brenneman, pulled the airline back from the brink of a third bankruptcy in 1995 with their famous “go forward” plan. It’s recounted in Bethune’s book about it published in 1997, “From Worst to First”. Bethune replaced the infamous Frank Lorenzo, who for almost twenty years, ran the cheapest, worst airline in the business. Continental was a horrible joke. Bethune is quoted as saying “Anybody can make a pizza without cheese. But who’s gonna buy it?” Bethune actually was an airline guy. He was an airframe mechanic, a pilot, and ultimately ran the 737 Division of Boeing. Brenneman was a financial wizard. They made a great team and built Continental into a once again great airline. It’s about revenue from services rendered, not costs. Smisek was hired to be Continental’s General Counsel. He is a lawyer who doesn’t give a damn about employees or customers. All he cares about is his immediate paycheck, his bonuses, and his stock options, as well as keeping his Bots of Directors happy. He inherited the top job at Continental when Bethune, then later his successor Larry Kellner retired. Smisek engineered the United merger secretly then shafted the City of Houston by moving the remaining corporate people to Chicago without any discussion with Houston officials beforehand. And when Southwest Airlines proposed building a new terminal at Houston Hobby 3 years into the future to service the Caribbean and Latin America, Smisek said it would harm operations in Houston and they’d have to cut back operations at IAH. The day after Houston City Council approved the deal with Southwest over United’s objections, United laid off 1200 Houston-based employees in retaliation. So much for future cutbacks. If the new Southwest flights to Latin America were 3 years away, why was it that United needed to instantly lay off people? The people who run United Airlines are cut from the same cloth as Frank Lorenzo. Ruthless, bean-counting, cost-cutting, greedy, and don’t really care about good service or their customers. In the end they will pay dearly for their business stupidity. -RC Dear FlyersRights, Although a long and loyal UA traveler, as you are aware, I am among several people I know who are also long and loyal UA travelers that are concerned w/the direction of UA, under Jeff. I am going to write him this week about some of the same items Mr. Nader wrote. Having said this, I am not surprised w/the policies he has implemented, inasmuch, as he did the same at CO before the merger and his training is finance and economics, to the supply side, aka “trickle down” economics, aka Ronnie-the-Teflon-president-Reagan!!!! -MH Dear FlyersRights, I understand that families may now be at a disadvantage by not being able to board first. However, they do permit them to board AFTER the first wave of passengers so that they can still obtain seating together. They don’t have to wait so long that they have to split up. I for one am glad they can no longer board first. It was getting so bad that other passengers, including those of us willing to pay the $12.50, were at a big disadvantage. My point was, everything isn’t great with any one airline. But if all you do is criticize, even those airlines that still give the flyer a few breaks, then who is going to listen to you? Probably not even Congress unless you are even-handed in your approach. Now, a description of a recent flight experience: I’ve not flown Allegiant for 13 years. Harrah’s used to use them for charter flights to their casinos years ago, and I flew them on Harrah’s ticket back then. Well, I saw an ad for $33 each way from Austin to Vegas. Of course I knew ahead of time that there would be add-ons. I paid for my seat assignments, my carryon luggage, and early bird boarding. In fact, on both ends I was the first person to board. That $66 ticket ended up costing $140.00, but that was still $190 cheaper than the closest competitor. I should add that the seats don’t recline (I’m fat but short, so this doesn’t bother me in the least); all beverages and snacks cost $$; but other than that I liked saving that amount of money. This was the cheapest flight I’ve ever had for the distance, and I’ve been flying for 45 years. The leg room was ample, even on Row 21, although the seating was narrow. At least I didn’t have to use my seat belt extender, ha! ONE BIG DRAWBACK: Allegiant, going all the way back to those charter flights 13 years ago and extending to today, has a policy of NOT turning on the air until well into the flight after takeoff. Both then and now passengers were sweltering on board. Now THAT I don’t appreciate. -RS “You’re Sitting In A Chair In The Sky!” FlyersRights’ Twitter feed gets jammed with industry insiders saying quit complaining and just be AMAZED at the miracle of flight. Did they get that from comedian Louis C.K.? (This clip never gets old) Link of the Week: Live web based flight visualizer. (Only works on (desktop) browsers): http://callumprentice.github.io/apps/flight_stream/index.html Sign our Petition for a Passenger Bill of Rights Kate Hanni, founder of FlyersRights with Paul Hudson, President Consider making a secured donation to FlyersRights. The loudest advocates and largest organization representing airline passengers Getting on a Plane? Put This Number in Your Phone: Send comments and tips to Kendallc@FlyersRights.org or on Twitter @KendallFlyers. Read past newsletters! Forward this email!