This weekend, Boston's Logan International Airport expects to nearly finish the first runway in the nation repaved with an environmentally friendly material called warm-mix asphalt.
The asphalt is heated to a lower temperature than normal, burning less fuel and emitting less carbon. Airport operator Massport says on this project that means a cut of 4,000 tons of carbon dioxide and 400,000 gallons of diesel fuel.
The last batch of the asphalt will be laid on Runway 9/27 this weekend, though the runway won't reopen until later this year. The $12.5 million project began in July.
Some European airports have used warm-mix asphalt, but it had to pass Federal Aviation Administration testing before Logan could use it.
This is the conundrum airlines face as they head into the busy holiday season: How many previously free services can they force fliers to pay for without risking a revolt?
For most airlines, cash-strapped in recent years by a series of crises dating back to the 9/11 terrorist attacks in 2001, the growth in fees represents one of a very few potential bright spots.
But for fliers racked by the deep recession, paying for everything from checked luggage to a bag of chips on board can quickly become an aggravating wallet-buster.
“It’s very much a balance of what customers are asking for, in terms of entertainment, and what we need to do in terms of sustaining the airline,” said Paul Skrbec, spokesman for Delta Air Lines, the nation’s largest carrier since its merger with Northwest last year.
The push for new fees comes as many airlines continue to report deep losses and problems attracting fliers. The Air Transport Association of America said Monday that passenger revenue for U.S. airlines fell 21 percent in August as compared to a year earlier as passenger traffic fell 6 percent.
Hamstrung by high fuel prices, reduced customer demand and, most recently, the effect of swine flu on travel patterns, most major airlines are now charging passengers for services once considered part of the ticket price. In addition to meals, snacks and checked bags, depending on the airline customers might be charged for selecting a seat, booking a flight by phone, watching a movie or using a pillow, blanket or headset.
Other services that once might have commanded a small fee, if any, now might come with a considerable price tag. This category includes traveling with a pet, sending a child on a flight solo or transporting unwieldy gear.
For the frequent business traveler or family on vacation, the fees can easily add up to hundreds of extra dollars. For airlines, they are translating into millions of dollars in much-needed revenue.
Delta, for example, said "other net revenue" increased by 15 percent in the latest quarter, to more than $900 million, in part because of increased revenue from baggage fees.
Other airlines are seeing similar benefits, especially from the bag fees. American Airlines’ parent AMR Corp. said other revenue, which includes buy-on-board food and baggage fees, rose 7.4 percent to $565 million in the latest quarter, even as total operating revenue fell nearly 21 percent.
For many airlines, the potential pile of cash is just too hard to pass up. Alaska Airlines began charging customers a $15 fee for the first checked bag over the summer after previously charging only for the second bag. Spokeswoman Marianne Lindsey said the decision came after airline executives saw competitors add the fee and concluding it could bring the company an estimated $70 million a year.
“We just couldn’t continue to not charge,” Lindsey said.
‘No one’s getting rich’
The extra revenue offers a buffer, analysts say, but it is only one of the many cost-saving measures airlines need to take in order to avoid bankruptcy, consolidation or even liquidation.
“No one’s getting rich on these moves,” said Richard Aboulafia, a vice president with the aerospace and defense analysis firm Teal Group.
The International Air Transport Association is expecting airlines worldwide to lose $11 billion this year, and the trade group said the overall industry may not become profitable again until 2011 at the earliest.
While fliers have complained loudly about the additional fees, analysts say that, so far at least, they seem to be willing to accept the fees in return for keeping ticket prices down.
“Consumers love to bellyache and whine and then, of course, they go straight to the Web site and click on the lowest price,” Aboulafia said.
A few more seasoned travelers may even be growing sympathetic to the airlines, a number of which have been forced into bankruptcy court in recent years.
After Randy Petersen heard about United Airlines’ plan to let regular customers pay a fee to get the extra perks it provides free to its best customers, he hit the Web expecting to find irate travelers armed with virtual pitchforks.
There were some of those. But Petersen, founder of the popular discussion site FlyerTalk.com, also was extremely surprised to come across a number of comments grimly accepting or even lauding United for taking the money-making step.
In his more recent travels, Petersen said he’s also heard less grousing about things like paying for meals.
“I don’t know if it’s one of those (things where) we’ve all been beaten down so much with fees that we’ve lost our fight,” Petersen said. “It’s looking like there’s a new sense of understanding.”
Virgin America launched in 2007 with a model of charging customers for most services, on the theory that customers who don’t want those things shouldn’t have to pay for them via higher ticket prices.
Spokeswoman Abby Lunardini said the airline's research has shown that an average customer is likely to spend as much as $23 on things like movies or food. She said it's helped that the rest of the industry also is charging for services these days.
“People are more willing to pay add-on fees,” she said.
Of course, many savvy fliers now come on board armed with snacks, electronic devices and other comforts, avoiding some fees. Airports have bulked up their offerings of bring-on-board food and entertainment.
Petersen, who also is editor of InsideFlyer magazine, said the real test of how much consumers will put up with will come this holiday season. That’s when infrequent fliers will take to the skies, some perhaps for the first time since the recession began crimping many people’s budgets.
Because such fees are mostly assessed just prior to or during the flight, many may not realize until they are at the airport that they now must budget to check bags, feed the family and provide entertainment.
“They don’t see the real impact of those fees until they’re already traveling,” Petersen said.
Airlines may already be finding that there are some limits. After testing a plan to charge customers for drinks such as coffee and water, US Airways went back to offering those items for free this year.
Airlines also are closely watching each other to see which fees work, and how much they can charge. When US Airways pulled the plug on charging for soft drinks, one reason it cited was that none of the other major carriers had followed suit.
“It’s follow the leader,” said Ray Neidl, an independent airline analyst.
Many airlines offer fee exceptions for frequent fliers or first-class fliers, and some make allowances for other special circumstances.
For example, Alaska Airlines does not charge for the first three bags customers check for travel within the state of Alaska. Lindsey, the airline’s spokeswoman, said that’s because many Alaskan customers have no other way to get from remote villages to major shopping hubs, where they stock up on supplies and “are typically bringing everything but the kitchen sink.”
In general, however, Neidl said airlines have little choice but to charge extra fees in a recessionary environment where raising base ticket prices can quickly mean losing customers. But he’s not sure what other fees airlines will be able to add at this point.
“The easy fruit has been picked,” he said.
As fees start to add up, Petersen said more savvy travelers will likely become better at comparing not just the ticket price but also the additional fees. In some cases, fliers may realize that a more expensive ticket might be cheaper once you factor in other fees.
Some airlines are marketing their lack of fees as a selling point. Southwest boasts that it doesn’t charge a bag fee, although it has added other for-fee services such as a $10 option that guarantees early boarding privileges.
But even Southwest hasn’t ruled out adding bag fees down the road. As time goes on, analysts expect that airline customers will have to learn to live with the fees, or without the services.
“Do you not want these services, do you want to pay for them or do you want higher ticket prices? These are your choices,” Aboulafia said.
By Allison Linn - Senior writer
Organizations representing general aviation in Washington know that Errol G. Southers has been nominated by President Barack Obama (D) to head the Transportation Security Administration (TSA) and that Brian Delauter has been named the new general manager of that department's GA division. Of the two Delauter is the better known quantity, having been named acting manager in July. But Southers is known to the community mainly through his resume.
And it is an impressive one, including long experience in law enforcement with both the FBI and police departments. His most recent position was as Los Angeles World Airports Police Department assistant chief for Homeland Security and Intelligence. He is also a member of the faculty at a terrorism think tank at the University of Southern California.
Southers testified before Congress in May 2008, and a transcript captures some of his then current thinking about airport security, but with an emphasis on an airline environment. He told the House Committee on Homeland Security that using counter-surveillance techniques could identify terrorist organizations, including auto license plate scanning technology to spot frequent drive-bys and connect the plate numbers to national databases. In his testimony, he said, "Surveillance is typically conducted in a covert manner and can involve any number of collectors (surveillants) either on foot or in vehicles. Successful counter-surveillance can yield indications of an attack-planning phase. The problem is separating 'terrorism' from 'tourism.' Herein lies the importance of employing a strategy that facilitates 'looking for the bombers and not the bombs.' "
The National Air Transportation Association (NATA) issued a statement saying it is "pleased" with the selection. Association President Jim Coyne added "Southers' vast experience with homeland security and terrorism will serve him well as the next administrator of the TSA."
The National Business Aviation Association's (NBAA) statement reserved judgment pending the approval process, saying, in part, "As the White House prepares to submit this nomination, the business aviation community has a number of very important concerns before the TSA. We will be closely monitoring the progress of Mr. Southers' nomination, and working to ensure that he has a full understanding of the unique operating needs of our Members."
How will they do that? Today NBAA vice president for safety, security & regulation Doug Carr told AWIN, "As is the case with every new nominee, we'll have an ability over the next few weeks and months to work with Congress and meet the new leaders. TSA is no different from any other agency, and it's just important that we do our part to ensure the agency knows us." He says the NBAA is well known among career staff at the TSA who maintain a continuity and history. "The more minds to the table, the better," he added. "You can get more done."
NATA vice president Eric Byer says of Delauter that, "Brian has been in the community for a while, and he knows the drill." Byer's top three issues for the incoming TSA officials are industry communication and outreach, the Large Aircraft Security Proposal (LASP-"It needs to get wrapped up in the next 12 months"), and the onerous badging requirements and background checks that have FBOs up in arms.
Perhaps it's no coincidence that TSA spokesman Jon Allen told AWIN that Delauter's top three priorities are to improve communications with stakeholders, to come to a resolution on LASP and to remove waiver requirements for international arrivals. So they agree on two out of three. The AOPA will meet with Delauter at its upcoming Aviation Summit on November 5, and he'll be at the NBAA meeting in October.
George Larson - AviationWeek
The National Hockey League regular season has yet to begin, but elbows are flying in an aviation scrap between the U.S. and Canada that threatens to disrupt air-charter arrangements made by many NHL teams.
Air Canada last week sued U.S. Transportation Secretary Ray LaHood, seeking to block his enforcement of an Aug. 11 Transportation Department order that Air Canada to cancel its season-long sports charter contracts. Air Canada's Jetz charter service currently has contracts with the six Canada-based NHL squads and the Toronto Raptors basketball team.
The ruling "is wreaking havoc on the hockey season," said Air Canada, a unit of ACE Aviation Holdings Inc., in its lawsuit. "The urgency of this matter cannot be minimized."
Air Canada claimed the U.S. position has cost it contracts with three U.S. NHL teams this season, including the Boston Bruins. The Bruins declined to comment.
At issue is whether Air Canada is allowed to fly Canadian sports teams between U.S. destinations without first returning to Canada. By law and treaty, foreign airlines can't pick up passengers when flying between U.S. cities -- nor can U.S. airlines in most foreign nations, including Canada.
However, the DOT for years has allowed Air Canada to fly sports teams on back-to-back U.S. flights if the teams ultimately would return to Canada. Similarly, U.S. airlines ferrying American teams have been allowed to fly within Canada.
But the Air Line Pilots Association union, two U.S. aviation trade groups and a U.S. charter carrier began calling for a penalty last year because Air Canada won DOT-approved contracts to fly two American sports teams, the NHL's Bruins and the Milwaukee Bucks of the National Basketball Association. The pilots want to assure that U.S. flights are operated by U.S. pilots.
In an order to Air Canada's Washington lawyer, the DOT said the agency found the airline last year carried individuals on Bruins and Bucks charters who were transported within the U.S. and never carried across the border during the season, contrary to the DOT's agreement with the airline.
Canada's Minister of Transport, John Baird, said in a letter to Mr. LaHood demanding the DOT retract its decision.
This Canadian Transportation Agency retaliated by banning flights by U.S. carriers that require multiple stops within Canada. Miami Air International Inc., a U.S. charter carrier that has contracts with 10 NHL teams this season, had to arrange for a Canadian charter to make intra-Canada flights last weekend for the Florida Panthers, rather than carry the NHL team itself, said Ross Fischer, chief executive of Miami Air.
Miami Air also had to amend its travel plans last weekend for a major-league baseball client, the Toronto Blue Jays, Mr. Fischer said. Instead of flying the team to Windsor, Ontario, from Toronto, as the team requested, the flight went to Detroit.
"We're scrambling," Mr. Fischer said. But the situation is worse for Canadian teams because they have more back-to-back games in the U.S., where there are 24 NHL teams. Canadian teams could be forced to return home between each U.S. game, which would be expensive.
Bill Daly, deputy commissioner of the NHL, said the league is "concerned with these new interpretations, especially on the eve of the new season when our teams have all made their travel arrangements already." Air Canada said it hoped a solution could be reached.
In its suit, the airline said it has a permit to operate charter service between any points in Canada and the U.S. Because of the treaty between the U.S. and Canada, Air Canada said it can make an unlimited number of U.S. stopovers, which allows the airline to offer charters for sports teams whose schedules require play in both countries. The contract and season itinerary is treated as a single journey with multiple stopovers, the airline said.
A hearing on Air Canada's complaint, filed in U.S. District Court in Washington, D.C., is scheduled for Tuesday. A DOT spokesman declined to comment, as did a spokesman for Transport Canada.
The preseason was to begin Monday; the regular season Oct. 1.
By Susan Carey - Wall Street Journal
Airbus, the European plane manufacturer, said last Wednesday that it expects private jet sales to rebound in 2010 behind a fast-growing Chinese market.
According to Francois Chazelle—vice president of executive and private aviation at Airbus Middle East—more and more Chinese billionaires are considering purchasing private jets due to their convenience compared to commercial flights.
“We do see the market bouncing back, with the largest number of expressions of interests coming from China,” said Chazelle.
He said that the interest would be particularly special among Chinese businessmen in the oil trading industry, construction, and other chemical sectors, who are looking to purchase companies after the financial crisis.
Right now, the proportion of billionaires owning a private jet in China are about a tenth of that in the United States. Chazelle admitted that the industry did experience a slowdown this year, but it did not completely breakdown.
- Private Jet Daily
Corporate jets became a popular symbol of wasteful spending after the Big Three automobile executives flew in to visit Capitol Hill seeking federal government bailout cash late last year.
So intense was the outrage that the auto leaders responded by driving from Detroit for a return trip to Washington, D.C.
Toronto-based Nortel Networks Corp. was one of many businesses that grounded its corporate jet, citing financial woes, not long after.
The message was loud and clear: Corporate jet travel was suddenly so uncool.
Industry experts are now trying to repair that image by stressing the economic benefits of corporate jet use to companies and communities alike.
Two trade organizations have started a campaign to underscore the financial damage that would occur if those aircraft are grounded. Everything from generating less money through jet fuel taxes to jobs at airports and in surrounding communities is at stake, supporters say.
Locally, the main suburban facilities for business aviation - Chicago Executive Airport, Waukegan Regional Airport and DuPage Airport in West Chicago - have a vested interest in the effort.
"I guess we were the target of the day," said Dennis Rouleau, manager of Chicago Executive Airport in Wheeling. "But when you think about it, we need business aviation."
However, critics such as Sarah Anderson, a fellow at the Institute for Policy Studies, a liberal think tank in Washington, D.C., said nothing has changed. Excessive pollution and unnecessary rewards for executives are some of the complaints in a 2008 report she co-authored called "High Flyers: How Private Jet Travel is Straining the System, Warming the Planet and Costing You Money."
"It's become a symbol of extreme excess," Anderson said.
Trying to blunt the critics in the recently launched "No Plane No Gain" campaign, the National Business Aviation Association and General Aviation Manufacturers Association stress the benefits of private planes.
The initiative includes positive business aviation messages on a Facebook page and YouTube videos. They also have developed a television and print advertising campaign to boost the industry's image.
An image boost is critical, local business aviation airport officials say, because of what's at stake.
Waukegan Regional Airport Manager Jim Stanczak said about 270 jobs at his facility are at risk if the number of business flights continues to slide.
Stanczak said business travel is not tracked separately, but falling jet fuel sales are a strong indicator. At Waukegan Regional, sales declined from about $4.5 million in 2007 to $4 million in 2008, with 2009 purchases so far down roughly 24 percent from last year.
Jet fuel sales have been falling at DuPage Airport and Chicago Executive as well, records show.
But officials insist more than suburban airport jobs are in play. Hotels, restaurants and rental-car agencies are among the businesses with financial links to those airports.
Also, Rouleau said, airports such as Chicago Executive can be a draw when a business decides where to locate. As an example, the airport's convenience for a nearby company allows it to fly parts to out-of-state manufacturing clients when emergencies arise, he said.
In the most recent report from 2006, DuPage Airport was responsible for $375 million in annual economic activity in the county, said Executive Director David Bird. That amount will slip if corporate flights dwindle, he warned.
"The majority of the impact was being driven by the growth in the corporate aviation component of our business," Bird said. "So I think it's safe to assume that the significant reduction in fuel sales we've experienced has eroded the economic impact of the airport on the surrounding communities."
Chicago Executive Airport pumps nearly $331 million into the Northwest suburbs, according to the most recent report issued in 2007.
Studies for the DuPage and Chicago Executive airports used similar criteria in measuring effects on the local economy, such as annual purchases of goods and services associated with aviation and visitor spending.
The Institute for Policy Studies' Anderson said she doesn't doubt the economic benefits to suburban airports catering to business aviation, but jobs and spending can be created in different ways.
She also cites in her report the Department of Homeland Security's concerns about possibly lax security controls for private planes flying into smaller airports.
"In this case," she said, "you have to weigh the (financial) benefits against what the costs are."
And, Paul Hodgson, senior research associate at The Corporate Library, said public records filed with the U.S. Security Exchange Commission show frivolous corporate jet use occurs. The Maine-based organization provides independent corporate governance research and analysis for clients.
Hodgson questions companies that view personal use of corporate aircraft by executives as a business expense because it's required for security reasons. In a 2007 report, he listed 12 chief executive officers who led the way in personal use of corporate jets, with the one-year cost ranging from $540,000 to $1 million.
Waukegan Regional's Stanczak said it's easy, but unfair, to criticize private planes as being excessive or wasteful.
"Most corporations are very cautious in the utilization of their aircraft," he said. "They don't just go flying them to fly them."
Ed Bolen, president and chief executive officer of the National Business Aviation Association, said the image of a top executive gallivanting on corporate jets is a common stereotype.
"A CEO is on an airplane on 15 - one-five - percent of its missions," Bolen said.
Roughly 85 percent of private airplane travel for business is by small and mid-size companies, he said. Companies that own planes use them only when they make financial sense, he said.
Airport officials insist a private plane is cost-effective for employees who need to hit two or three cities within a few hundred miles of each other to strike deals in a day.
"You could have a very, very talented sales guy," Rouleau said. "And if that sales guy can only make one sales call a day, and with a business jet he can make three sales calls a day, you just improved the productivity and you've helped out the whole company and the country."
Critics who say companies can save money by always flying commercial and get the same job done are missing the point, he said. There are times when employees need to discuss sensitive information or go over last-minute sales strategy for a multimillion-dollar deal - tasks that require a private plane, he said.
And, someone can be well on their way to a destination to close a time-sensitive deal from Chicago Executive in the hour-plus typically required just to park and reach a gate at O'Hare International Airport.
Despite the advantages, Bolen said, some companies are still scaling back.
"That does not help American competitiveness," he said. "It does not help job growth."
Private jets' economic impact
Business flights make up much of the activity at Chicago Executive Airport in Wheeling. Here are local businesses with revenue generated over one year from Signature Flight Support clients and operations, which provide fueling, hangar and office rentals, maintenance and other business aviation services.
745 - The number of hotel reservations booked by Signature Flight clients
$83,880 in revenue for Hilton Northbrook, Wingate Inn and other nearby hotels from Signature Flight clients
3,385 car rentals from Signature Flight clients
$580,446 in revenue for on-site Hertz Rent-a-Car at Atlantic Aviation
1,388 taxi cab rides originating from Chicago Executive
$48,544 in revenue for 303 Taxi cab service originating from Chicago Executive
$17,796 spent in Wheeling-area restaurants for Signature Flight-related business meetings [Source: Chicago Executive Airport, 2007 report]
Article by: Bob Susnjara - Daily Herald
Crowded skies and exhausted pilots are a bad mix, the airline industry and pilot unions agree, but they're struggling over what to do about it.
The airlines want to schedule some pilots with less-taxing flights — fewer takeoffs and landings — but for longer, not shorter, hours in the cockpit. The unions say they won't agree to more hours for those pilots in exchange for fewer hours for pilots who fly as many as a half dozen short flights a day or take off at odd times.
That was the main sticking point in an otherwise harmonious effort over the past month and a half to rewrite flying-time rules that in many cases are a half-century old and predate recent scientific findings concerning fatigue. The advisory committee on pilot fatigue was expected to deliver its recommendations to the Federal Aviation Administration late Tuesday.
Committee members said the FAA had asked them not to make their recommendations public.
By Joan Lowy - The Associated Press
GENEVA - Airline companies lost more than $6 billion during the first half of the year due to the economic crisis, even as fresh figures showed some signs of recovery in the passenger and freight business, an industry group said Tuesday.
A sample of more than 50 airlines found their losses declined to $2 billion in the second quarter from $4 billion in the first quarter, the International Air Transport Association said, noting that the April-June period is usually a strong one for the industry.
"Since the sample of airlines is incomplete, total industry losses in the first half of 2009 are likely to have been in excess of the reported $6 billion," IATA said.
The Geneva-based group, which represents 230 airlines worldwide, said seat occupancy in international markets stabilized in July — the first time in over a year — but added that airlines need to further cut capacity to meet demand.
Freight capacity also still exceeds demand despite an 8.1 percent capacity cut in July, IATA said.
"With excess capacity continuing through Q2 it was not surprising that freight rates were down more than 20 percent over the year," it said.
Overall, the industry outlook remains volatile, IATA said.
Airlines are still adding to their fleet because of long-term orders committed to before the downturn.
Figures show companies increased their aircraft numbers by a net of 487, or about 2 percent of their overall fleet.
"Replacement and expansion of the fleet has delivered significant fuel efficiency savings, " IATA said.
The group noted that rising fuel prices are once again eating into airlines' cash reserves.
Airline shares have risen 7.4 percent since the start of the year, lagging behind overall market improvements of 23 percent.
"Nonetheless, stronger equity markets gave airlines an opportunity to raise more — much needed — cash," IATA said.
Airlines have raised $3 billion of equity and $12 billion from new debt issues since the start of the year, it said.
Associated Press - msnbc.com
IS-BAO, the International Standard for Business Aircraft Operations, has received been received official recognition as an industry standard for business aircraft operations in Europe. The approval, announced last week, by the European Union's standard body, should facilitate recognition of IS-BAO in the upcoming EASA Implementing Rules.
IS-BAO was developed and is overseen by the International Business Aviation Council (IBAC) in Montreal, Canada.
According to IBAC and the European Business Aviation Assn., business aircraft operators should be able to use IS-BAO registration in their declaration to EU civil aviation authorities as the means they use to meet the regulatory requirements. It is also anticipated that national regulatory authorities will take into account IS-BAO registration in their regulatory oversight of business aviation operators engaged in commercial operations.
Brian Humphries, EBAA President and CEO, said, "The ISBAO was developed as a professional safety code of practice for business aviation operators and we encourage those operators to move forward with IS-BAO implementation so that they will be ready for the upcoming EASA Implementing Rules".
Because a Safety Management System (SMS) will be required of all commercial operations and operators of complex motor-powered aircraft engaged in noncommercial operations within the EU, the IS-BAO includes an SMS Toolkit that can be used by operators to develop their own SMS.
- William Garvey Aviation Week