Thursday, February 24, 2011

United will keep Economy Plus, unveils new plane livery


United today unveiled the first of its repainted 747s, sporting livery that combines the United name with the Continental globe logo.

Linked from USAToday.com; read the article!
As United and Continental continue to integrate their operations, frequent flyers are holding their breath to see which of each carrier's traditional features will make their way into the new unified airline.

Some changes are unavoidable, because United and Continental have different plane configurations as well as different cultures.  United, for instance, operates its international flights in a three-class configuration--Economy, Business, and First--while Continental has only two: Coach and an upscale business class called BusinessFirst.

One question got answered earlier this week, when United announced that Economy Plus seating will become standard on all of its planes. 

Economy Plus seating was introduced by United in the wake of the Dot Com crash.  Fewer people could get approval to fly First Class, but airlines depended on business travelers to maintain profitability (or at least mitigate losses).  The idea was to remove a few rows of Economy seating and respace about a third of what was left.  The resulting seats were no wider, but they had up to six inches of additional legroom.

Economy Plus seats are free for elite members of United Mileage Plus, and in the wake of the merger, elite members of Continental OnePass have also been able to get them for free upon request.  United sells the remaining seats as upgrades that cost far less than First Class fares.

Beginning in 2012, United will begin rolling out Economy Plus seating on Continental aircraft.  Until then, Continental flyers will have to make due with standard Coach seating (or fly on United planes).



Monday, February 14, 2011

From $181 each way: Airline marketing at its best.

United wants people to know about its new nonstop service from its hub at Washington-Dulles (IAD) to Owen Roberts Airport on Grand Cayman (GCM).  According to the airline's Web site, fares are available "from $181 each way."

Airlines love to announce fares in terms of one-way cost.  No one is really going to fly one-way--actually, the one-way rate promised requires a round-trip purchase--but it makes the fare sound lower. 

Would you be as excited to hear about a round-trip fare from $362?  It's the same fare given the terms, but studies say no.

In fairness, even giving you the round-trip fare doesn't tell you everything.  The fine print observes that you'll also be subject to a bewildering series of charges, including:
  • A $3.70 per flight-segment tax;
  • Either a September 11th Security Fee of $2.50 per enplanement at a U.S. airport
    or Passenger Facility Charges of up to $18;
  • U.S. arrival and departure taxes and agricultural, immigrations and customs fees of up to $50;
  • Additional airport, transportation, embarkation, security and passenger service taxes/surcharges of up to $250 for foreign travel; and
  • Airport and/or departure taxes of up to $45, which may be collected by the foreign government.
The first one is pretty much guaranteed.  The second one will apply in one form or the other, but you have no way of knowing which.  The other three are entirely unknown when you first set out to book a ticket. 

Strangest of all, the departure tax might not even be part of your ticket.  You could have to pay it in cash--specifically, in U.S. dollars--at the airport before you can leave the country.

But let's say that you're okay with all of that.  What are the odds that you'll actually get that $181 fare both ways?  Usually, not good.  In this case, United specifies that the advertised fare is available only for travel on Saturdays, and the nonstop departure from GCM leaves too early for you to catch it on the same day.  That means staying for at least a week in order to come back at the same price for which you flew down.

Oh, and if you are inclined to stay a week?  Don't forget about those checked-baggage fees.  United gives you one free bag for international travel.  A second bag will cost you $30.

There are great deals on airfares, of course.  Just be aware that not every fare advertised as a special is necessarily as cheap as it sounds.

Friday, February 11, 2011

On Amtrak and Ideology

In January, 2.1 million people rode Amtrak trains, the 15th month in a row in which passenger use increased, and a new record for the national rail carrier.

Last year collectively, Amtrak carried more than 28.7 million passengers.

Like Interstate highways, like airports and air-traffic control systems, passenger rail transportation requires an infrastructure that has to be built and maintained.  The Federal government provides support to Amtrak for track maintenance and other capital projects. 

One thing of which we can be sure, though, is that the Federal government has no intention whatsoever of stopping its subsidies of transportation overall, and if subsisides are going to be made to support infrastructure, rail deserves to be at the table.  Much of the rail infrastructure outside of the Northeast Corridor is privately owned and still gets subsidies. 

So, let's focus our attention on operating subsidies, the money that Amtrak receives on a per-passenger basis just to run its trains, without concern for the infrastructure.

In 2010, Amtrak received $563 million in operating subsidies from the Federal government.  The $563 million figure comes from a site whose entire purpose is to denounce Amtrak as wasteful spending, so it's fair to say that it doesn't pull any punches.

This amount equates to $19.62 per passenger for 2010.

Considered another way, the population of the United States by December 31, 2010 is estimated as having been more than 308 million people.  That means that every American paid an average cost of 55 cents per year to provide for the Amtrak operating subsidy.

Of course, fewer than half of all Americans file tax returns; some are below the income level required to mandate filing (because they pay no tax), while others have not reached adulthood.  Since Americans file tax returns for a given year after the year ends, we won't know until after April how many people filed taxes for 2010.  We can estimate, though, that it may have been as few as 150 million. 

That would make the Amtrak operating subsidy roughly $3.76 per taxpayer per year.

At a time when the Federal budget is approximately twice the total sum of all revenue brought in by the Fedearl government--that is, we borrow 50% of what we spend--cuts do need to be made.  But let's get real: $3.76 per person is not the reason that the Federal government is spending itself into oblivion.

The question is, is it worth expecting every taxpayer to part with nearly $4 per year just so he or she can over the course of a lifetime have the opportunity to take a train trip?

Think about it this way: even as an avid traveler, I'm unlikely to visit Iraq or Afghanistan.  Yet as a taxpayer, I incurred a $220 cost to pay the 2010 war supplemental budget of $33 billion, and that was on top of the $534 billion Department of Defense 2010 budget that already cost me $3560.

Don't get me wrong: the Department of Defense is important.  I'm not begrudging my obligation to pay $3560 to support our military.  (Actually, that one's an easy sell for me, since as a Reservist I net more than the average taxpayer amount paid.  But I digress.)

But as important as these other expenses are, the fact is that I get a lot more use out of Amtrak's mere existence than I do out of our continued wars in Iraq and Afghanistan.  Amtrak travelers, for instance, are neither on the roads nor in the screening lines at the airport; that saves me time.  And when I'm the one traveling by train, I benefit from the services provided.

We should continue to promote more efficient Amtrak operations, and we should invest in the infrastructure--both rail and rolling stock--that will make these efficiencies possible.  But we should not under any circumstances accept the ideological notion that passenger rail should be privatized.  When you hear that, understand that Amtrak exists only because private passenger rail has proven itself impossible in the United States.  Privatizing rail means eliminating rail.

No, not every American will ride Amtrak this year, or ever. But not every American--or even most--will ever see all of our national parks, either. We still pay for them, because they're important; the option to see them is important. That's true of Amtrak as well.

Higher fares and the return of the fuel surcharge

Airlines posted strong profits in 2010, bouncing off lows from the Great Recession and aided by extremely low fuel prices that came as a result of that same economic downturn. 

2010 was a great time for airline passengers, too: desperate to attract passengers, airlines ran plenty of fare sales and promotional offers, and while baggage and onboard meal fees did raise the potential bottom-line price of travel for some, unavoidable fees like the dreaded fuel surcharges of 2008 were removed.

This year is fast shaping up to be different.

Fuel prices have surged.  Part of the equation is genuine demand, as emerging economies like India and China have been consuming more oil even as the developed nations of Europe and North America have pulled back.  Speculation also plays a big role; oil is frequently used to place bets of instability in the Middle East, where protests are seen as potentially impacting oil shipping as well as production.

As a result, we're now seeing a return of the fuel surcharge to some U.S. airlines, including American, United, and Continental1.  For now, it's ranging from $3 to $5 each way, which isn't so bad.  But it may go much higher: at the height of the oil spike in 2008, fuel surcharges exceeded $60.

To be sure, fuel isn't the only thing driving increased travel costs.  Despite one year of profitability, airlines are still coming off nearly a decade of losses.  The capacity cuts made over the last few years, coupled with increased demand for flying, has left airlines with considerably more pricing power.  That means that fares are going up, too. 

Add to this that some airlines are cutting back on specials--for instance, United has stopped advertising discounted weekend travel routes, though Continental continues to offer these---and 2011 promises to be a more expensive year to fly.

1 United and Continental are both owned by United Continental Holdings, but presently continue to operate as separate carriers.