Airline Industry on Track : Major Airlines Enter 2011 with New Fee

Several major airlines are headed into 2011 with new fees, including Charlotte’s major carrier, US Airways.

United Airlines and Continental Airlines are adding a $10 one-way peak travel day surcharge, while American Airlines, Delta and US Airways are adding a $20 roundtrip surcharge.

The airline industry is on track to see its most profitable year in at least a decade, with U.S. profits topping $7 billion. In 2008, the airline industry lost more than $5 billion.

The cost for airfares has gone up and many airlines have been adding fees for luggage, seating and even carry-on bags.

Eyewitness News talked to travelers at Charlotte Douglas International Airport about the latest hit to their wallets.

“Baggage is already $25, so it’s like what else? Pillows and blankets, (are) they going to charge for that, too?” Jay Ly said.

Traveler Peggy Behar said people will just have to accept the fees and spend the money.

“I guess if you really have to travel, you’re going to have to pay the fees,” she said.

Some airlines already charge $7-$10 for pillows and blankets. Experts predict major airlines may also add a fuel surcharge for passengers, since the cost of crude oil has drastically increased.

Continental Airlines Release New Service to Reservation and Buy Airline Tickets

Apparently Continental Airlines says that it is going to allow passengers to hold a reservation and lock in a quoted ticket price for up to a week. This service is being offered for a fee that will vary widely. This new service, which is being called FareLock, gives people three days or a week to decide whether to buy a ticket or not.

So why is this such a great deal? Well it allows people to put down a little money on a seat to hold a ticket. This gives people a chance to determine if they want to take that flight or not. Sometimes a good deal pops up, which will only be around for a limited time, and people do not want to miss out on it. At the same time, they are not sure if they can make the flight or not. This gives the person a chance to lock in that price and still have time to make plans.

Continental Airlines said, as of Monday, that it would charge a fee of at least $5 to hold a reservation for three days and at least $9 to hold it for a week. This amount, of course, will vary depending on the length of the hold, the trip, and how soon the passenger planned the trip.

For example, if a passenger puts a hold on a reservation months ahead of time, then it is going to cost less than if he did it a week ahead of time. Which makes sense, because the airline is going to have less time to sell of that ticket if the person with the hold chooses not to fly.

U.S. Airlines Converging on Suddenly Summer Season in Mexico

Leading American airlines are stepping up to give Mexico the airlift it needs as tourism increases and in the wake of Mexicana Airlines folding this past summer.

Continental Airlines, United Airlines and Delta Air Lines have all announced plans to launch a slew of new flights to Mexico from several important North American travel hubs. The flights come hot on the heels of Mexico Tourism’s announcement of a 19.2 percent increase in international tourist arrivals via air to Mexico from January to August of this year.

The new flights are a welcome addition to already planned flights by AeroMexico, British Airways, US Airways, Frontier Airlines, Virgin America and China’s Hainan Airlines.

From January to August of this year, the number of international tourists arriving in Mexico by air increased by 19.2 percent, in comparison to the same period last year and 6 percent in comparison to 2008, one of Mexico’s strongest tourism years on record. From January to August 2010, Mexican airports received 7.1 million foreign visitors. The U.S. continues to be the main market source for travelers into Mexico. In the first eight months of 2010, 4.33 million American travelers arrived in Mexico, a 15.7 percent increase in respect to the same period in 2009 and a 1.9 percent increase over 2008.

Approximately 61 percent of international tourists to Mexico are Americans, according to Mexico’s Tourism Secretariat (Sectur).

Flight Plans

In October, Continental announced its plans to launch a daily nonstop service between Los Angeles International Airport (LAX) and Leon/Guanajuato, Mexico (BJX) beginning November 1, pending Mexican government approval. This new service will complement Continental’s existing service to Leon/Guanajuato from Houston. In fact, no other carrier offers more departures from the U.S. to the Leon/Guanajuato airport. In addition, Continental Airlines has filed an application with the U.S. Department of Transportation (DOT) for permission to launch weekly nonstop flights to Cancun from Austin and San Antonio in Texas and Raleigh-Durham in North Carolina. Once approved, this service would begin on February 19, 2011. Currently, Continental Airlines serves 30 Mexican destinations, more than any other American airline. The airline presently serves Cancun 76 times weekly from its travel hubs in Houston, Newark and Cleveland.

In addition to the new flights planned by Continental, United Airlines is boosting service into Mexico City from hubs in Chicago, Denver, Los Angeles and San Francisco. United will launch a second daily flight from Los Angeles to Mexico City beginning October 15, and a third daily flight starting January 14, 2011. Starting November 4, United will up its current Saturday-only service from Chicago to Mexico City to twice-daily service and their daily service from San Francisco to Mexico City to twice-daily, as well. United will also begin offering once-daily service to Mexico City from Denver between December 16 and January 3, 2011, perfect for a holiday getaway. In regards to other Mexican destinations, United Airlines currently serves Cancun 31 times weekly from its hubs in Denver, Los Angeles, Chicago, San Francisco and Washington-Dulles.

Rounding out the announcement of new flights is Delta Air Lines, who plans to launch new nonstop Saturday flights from Memphis, to Mexico City starting January 8, 2011, pending Mexican government approval. The short 3.5 hour flight will leave Memphis at 9:15 a.m. and arrive in Mexico City International Airport (Benito Juarez International Airport) at 12:40 p.m.

Return flights are scheduled to leave Mexico City at 1:42 p.m. and arrive in Memphis at 5 p.m. Mexico is currently the city of Memphis’ second-largest trading partner, and the new flight will not only be a hit with tourists, but with business leaders seeking to strengthen ties to Mexico. This new flight will add to Delta Air Lines’ already existing seasonal flights to the Mexican beach resort cities of Cancun and Cozumel.

Southwest Airlines Agree $1.4 billion to Buys AirTran Airways

Southwest Airlines, the nation’s largest low-fare carrier, said on Monday that it had agreed to buy its smaller rival AirTran Airways in a transaction valued at $1.4 billion, expanding its foothold in New York and Boston and allowing it to move into Atlanta, the nation’s largest airport.

The deal is valued at $3.4 billion when AirTran’s debt and aircraft leases are included. Southwest said the purchase had been approved by the boards of both companies, although it still needs regulatory and shareholder approval.

The move comes as the domestic airline industry is consolidating and reducing the number of seats offered as it attempts to return to profitability. United Airlines is taking over Continental Airlines on Oct. 1, after shareholders of both companies recently approved the tie-up and the government gave the green light. Delta Air Lines led the way in 2008 when it acquired Northwest.

The transaction is a sharp departure for Southwest, one of the nation’s few consistently profitable airlines. The company’s success had been built on a simple business model, operating the same type of Boeing 737 planes at a higher frequency between smaller airports.

But Southwest has been looking for ways to expand as its network grew. For instance, it had sought ways into the nation’s larger markets, like New York, Boston and Washington.

So far, Southwest’s presence in New York has been very limited. It has a few landing and take-off rights, called slots, at La Guardia Airport. As part of the United-Continental merger, Southwest had recently obtained some slots at Newark Liberty International Airport.

Southwest said the acquisition would increase its presence in New York and open the door to Atlanta, which is the nation’s largest airport and the hub of Delta Air Lines.

Analysts at Deutsche Bank said they expect the deal to gain swift regulatory approval given the speed with which the federal government approved the United-Continental tie-up and the fact that the networks of Southwest and AirTran do not overlap much.

Southwest said the transaction would save $400 million a year by 2013. It said the one-time costs related to integrating AirTran would be $300 million to $500 million.

The offer represents a premium of 69 percent over AirTran’s closing stock price on Friday. AirTran shareholders would receive a combination of Southwest shares and cash. That includes at least $3.75 in cash and 0.321 shares of Southwest common stock for each share of AirTran common stock.

United Airlines and Continental Airlines to Start Passenger Service Operation Next Year

UAL Corp.’s United Airlines and Continental Airlines Inc. will start blending passenger-service operations early next year as they merge to create the world’s largest carrier.

Shared check-in kiosks and airport signs will appear next year in a process the companies call “Customer Day One” as the new airline adopts the United name. Operational changes such as joint websites probably won’t occur until about 2012, when United gets a single flying certificate from regulators.

UAL and Continental shareholders voted Friday to approve the $3.22 billion all-stock merger, which is scheduled to close by Oct. 1. The carriers are being advised by Bain & Co., the consultant Delta Air Lines Inc. hired to help mesh operations with Northwest Airlines Corp. beginning in 2008.

“On Customer Day One, Continental and United will be able to conduct key customer processes, such as airport check-in and upgrades, for any traveler, regardless of whether they are on a Continental- or United-operated flight,” said Julie King, a spokeswoman for Continental, based in Houston.

Passengers won’t see many immediate changes when the deal closes, King said. The websites for both carriers will continue to operate as they do now, and each company will run its own customer-service and marketing activities, she said.

United’s Mileage Plus and Continental’s OnePass frequent-flier programs will operate independently until after the closing. Members’ reward points will be combined, and the plans will be blended in the first half of 2011, according to the airlines.

United and Continental have decided to keep United’s Chicago headquarters. They will incorporate Continental’s globe logo on the tails when they repaint planes.

Continental Chief Executive Officer Jeff Smisek will run the company, while United CEO Glenn Tilton will become non-executive chairman.

It took Delta about a year and a half to fully combine operations with Northwest after their merger in October 2008.

Within a month, Delta and Northwest began aligning customer policies and fees for services such as taking pets onboard.

Delta installed new signs with its name and logo at all major hubs by March 2009, and the companies were granted a single operating certificate from the Federal Aviation Administration in December, which allowed them to integrate pilot groups and flight procedures.

They combined websites and reservation systems in January, and finished meshing technology and dispatch systems in April.

Continental Airlines Flight Service Change Due Tropical Storm Hermine

Tropical Storm Hermine has been attacked several towns in the American territory. The storm is expected early from northeastern Mexico and crossed into Texas. Hermine came ashore Monday night in northeast Mexico. By early Tuesday, the National Hurricane Center said the storm was about 10 miles (15 km) south-southwest of Harlingen, Texas, and 20 miles (30 km) northwest of Brownsville.

Tropical Storm Hermine which hit several cities affect flight services at several airports and flight schedules of several airlines.

Continental Airlines has been announced, Tropical Storm Hermine to affect several flights schedule to and from Texas.

Several airports including those in Houston, San Antonio, Dallas, Fort Worth and Austin may cancel and delay flights. Continental advised travelers to delay flights and will allow a one-time date or time change through Sept. 8 to customer’s flying from or through the affected airports without penalty.

Southwest Airlines to Increase Flight Service to New York City Area

The result of the merger of two largest airlines, Continental Airlines and United Airlines will add service competition flights to New York City.

Southwest Airlines is one airline that provides airline flight service to New York City. To anticipate competitive air service, Southwest Airlines will add the service number of flights to New York City.

Southwest Airlines may soon double the number of its flights to the New York City area as a result of a deal that would allow Continental and United to move forward with the carriers’ $3.15 billion merger agreement.

Dallas-based Southwest said it would lease 36 time slots at Newark Liberty International Airport from Continental Airlines, giving the domestic budget carrier first-time access to the constrained and busy facility.

“This will help [Southwest] establish a pretty good presence in the Northeast, and it’s enough to have the Southwest effect: substantially lower airfare,” said Terry Trippler, travel advisor with the consultancy Rules to Know, in a Monday interview.

Southwest already flies eight round-trip flights from New York’s LaGuardia Airport. It also operates 21 daily flights out of Islip Macarthur Airport, on nearby Long Island.

The new flights out of Newark would begin in March.

Southwest has a record of offering less expensive ticket prices because of a low-cost business model, which includes a strategy of using a single model of aircraft to keep training and maintenance costs down. Whenever the airline enters a new market, Trippler said, ticket prices generally decline.

Agreeing to the slot transfer cleared the way for the Justice Department to close its investigation into the competitive effects of the merger proposed between Continental and UAL Corp., the parent of United Airlines. See related story on Justice Department approval.

It “will likely significantly benefit consumers on overlap routes as well as on many other routes,” the Justice Department said in a statement. Continental has hub operations at Newark Airport.

Shares of UAL rose 1.3% to close at $20.71 and Continental added 0.4% to $21.89 in Monday trading. Shares of Southwest slipped 1.3% to $10.99.

Michael Derchin, analyst with CRT Capital Group, said that regardless of any decline in ticket prices from having to compete with Southwest, United-Continental will more than make up for this through some $800 million to $900 million in merger-related cost reductions.

“It’s such a good merger that it’s pretty small in the scheme of things,” Derchin said in an interview. “It’s a modest negative” for United and Continental, he said.

By contrast, Delta Air Lines and US Airways worked to exclude Southwest when they proposed swapping time slots at LaGuardia and at Ronald Reagan Washington National Airport. Shutting out the discount carrier in part led to the airlines withdrawing the plan in July, according to Derchin.

New York represents just a small part of Southwest’s total business, but it has a lot of potential for growth, according to Southwest spokesperson Katie Coldwell.

“We would love to have more slots at LaGuardia and Newark,” Coldwell said.

The airline currently operates Boeing Co. 737-300, -500 and -700 jetliners, but it’s considering the addition of the larger 737-800, with would increase its number of seats per flight.

Such an aircraft would be better suited for the New York area, which sees a high demand for traffic and yet is constrained by size of its three major airports.

Combined, Newark, LaGuardia, and John F. Kennedy International airports are No. 3 in terms of passenger traffic, just after Atlanta’s Hartsfield-Jackson and Chicago’s O’Hare, according to data from Airports Council International.

Source : MarketWatch

U.S. Regulators Approved Propose Merger Continental Airlines and United Airlines

Continental Airlines Inc. and United Airlines cleared the biggest hurdle in their proposed merger on Aug. 27 after federal regulators said they had approved the deal.

United Airlines and Continental were informed by the Antitrust Division of the U.S. Department of Justice that it had completed its review of the proposed merger. That clears the way for the deal to close Oct. 1, pending shareholder votes in September.

“The completion of DOJ’s review is an important step on our journey of creating the world’s leading airline, benefiting our customers, co-workers, communities and stockholders,” said Jeff Smisek, Continental’s chairman, president and chief executive in a statement. “The DOJ’s decision permits us to clear one of the last regulatory hurdles to closing our merger.”

Houston-based Continental and Chicago-based United announced an all-stock merger on May 3. Both companies have set special shareholder meetings to vote on the deal Sept. 17.

United and Continental received clearance from the European Commission on the airlines’ proposed merger in July, which noted its investigation found the transaction would not raise competitive concerns in Europe or on trans-Atlantic routes.

Continental shareholders will receive 1.05 UAL shares for every Continental share they own. At the closing of the deal, Continental shareholders will hold 45 percent of the new entity, while UAL shareholders will own 55 percent. The combined company will have headquarters in Chicago.

Also on Aug. 27, Continental and United said they would lease 18 pairs of round-trip flights to Southwest Airlines at Newark Liberty International airport in an effort to address DOJ concerns.

Southwest Airlines to Begin Flights To Newark Liberty

Southwest Airlines Co. said Friday it will boost its New York-area flying next year as part of a deal that also seeks to ease concerns from regulators about the proposed merger of UAL Corp.’s United Airlines and Continental Airlines Inc.

Dallas-based Southwest plans to lease take-off and landing slots at Newark Liberty International Airport from Continental, adding to its existing services in the region from New York LaGuardia and Islip on Long Island.

Southwest would lease slots to operate 18 daily round-trip flights at peak and off-peak times, which analysts said would likely be enough for high-frequency service to three yet-to-be-disclosed destinations. It would start some flights in March 2011, with a full schedule by next June.

Continental and United said in a joint statement that the plan was a fair solution to concerns raised by the Department of Justice about their proposed merger. The airlines have responded to a second request for information from regulators, and had previously said they were confident of closing a deal by year end. The Southwest plan is contingent on sealing a deal by Nov. 30.

Newark is the New York area’s largest hub and a stronghold of Continental, but rivals including Delta Air Lines Inc., AMR Corp.’s American Airlines and JetBlue Airways Corp. are seeking to buttress their presence in the country’s largest travel market.

Southwest has a limited presence at slot-restricted LaGuardia and successfully campaigned to block a planned transfer of slots at the airport involving Delta and US Airways Group Inc. Delta aimed to strengthen its position at LaGuardia while US Airways would have secured more access to Reagan National in Washington, D.C.

For Southwest, an enhanced New York presence fits its strategy of winning more premium business travelers. The country’s largest carrier of domestic passengers is revamping its frequent-flier program to secure more high-paying corporate accounts, as well as providing in-flight wireless service and credit card tie-ins, a key revenue source for the industry.

The airline, like other low-cost carriers, had reeled in growth plans over the past 18 months but continues to add back limited capacity to balance supply with recovering demand. Southwest had previously announced plans to add two new cities next year to expand its network to 71 destinations. It will also decide in December whether to order larger versions of the Boeing 737 that would suit more congested airports like Newark.

Source : WJS

US Airways Jumps 12 percent to Lead Airline Sector Higher

US Airways Group (LCC 8.50, +0.69, +8.84%) shares jumped almost 12% to $8.73 in early trading on Wednesday to lead a broad advance in the airline sector after J.P Morgan Chase & Co. upgraded the stock. The NYSE Arca Airline Index rose 4.7% to 37.39 points and has now gained 11% since the beginning of the year. All 13 components in the benchmark were in positive territory, with AMR Corp. (AMR 7.54, +0.40, +5.53%) gaining 9% and Continental Airlines (CAL 21.18, +1.26, +6.33%) up more than 7%.

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