Wednesday, October 29, 2008

American copies Continental, Continental copies Delta...

It's a game of catch-up these days for the airlines. Like the other legacy carriers, American used to offer a minimum of 500 miles in its frequent flyer program. As of yesterday, that minimum is history for rank-and-file passengers. Like Continental, though, American has opted to keep the 500-mile minimum for members of its AAdvantage program who hold elite status.

Continental, meanwhile, has adopted new carry-on baggage size limits, scaling back from 51" to 45". The change brings Continental into alignment with the limits already in place with its Skyteam domestic partners, Delta and Northwest. It also comes at a time when virtually all airlines have implemented charges for checked baggage, which has led to a surge in popularity for carry-ons.

Speaking of baggage, Continental also announced a new policy to waive first-bag fees for passengers who carry its branded Chase credit or debit cards; these passengers join OnePass elite members and passengers flying First Class in being exempt from the first-bag fees.)

By the way, those who pay attention will notice that oil is now well below $70 per barrel, down from more than $140 just a few months ago. You might see a bit of a price drop, but don't count on it: all of the airlines have slashed capacity, and at least in the short term, fewer flights means that prices can stay relatively high for the seats that remain. There's also the matter of fuel hedging, which helps when prices are rising but hurts when they start to fall.

But it's not all supply and demand. Those fuel surcharges that airlines imposed when prices were high will also be staying around, and the reason is simply "because they can." As I cautioned some weeks ago, once a cut is made or a new fee is introduced, it's bound to stay beyond its time.

No comments: