Delta to Bring Wi-Fi to the Skies, Jet Blue to Charge for Blankets
by Andrew Posner, Providence, Rhode Island on 08. 8.08
High fuel costs have sent the airlines scrambling to do anything to shave costs, raise rates wherever possible (e.g., charging for checked baggage) and still attract more passengers. This trend is continuing as Delta Airlines has announced that it will "offer broadband wireless Internet access on its entire domestic mainline fleet by the middle of next year." At the same time, Jet Blue has plans to "begin charging for pillow and blanket sets on flights of two hours or longer."
Generating Revenue for Struggling Airlines
Both plans will generate more revenue for struggling airlines. Delta will charge a flat fee of $9.95 on short flights (less than three hours) and $12.95 for longer flights; the fee will enable passengers "traveling with Wi-Fi enabled devices — like laptops, smartphones and hand-held devices — to access the Internet while in flight." Jet Blue will be selling the pillow and blanket sets for $7.
We can expect to see more of this in the future, as airlines find ways of wringing a buck out of services that were once provided for free. What's interesting about Delta's plan is that Congress is moving to ban in-flight cell phone use (in contrast, the EU has approved in-flight cell phone use); I suppose it's only a matter of time before Congress starts worrying about people viewing pornographic web site during flights and moves to ban in-flight web access too!
No Amount of Fees Will Erase Fuel Costs
In any case, the bottom line is that no matter what the airlines do they won't be able to get around the reality of expensive jet fuel. In this new market, only those airlines that upgrade their fleet to more efficient planes and find other ways of saving fuel (less idling, more efficient routes, etc.) will be profitable. We can also expect to see more and more fliers get fed up with all the new fees and charges; hopefully, whenever possible, they will begin looking to alternatives such as videoconferencing or taking the train.
Via: ::NY Times and ::NY Times
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I don't want to give them any ideas, but I wouldn't be surprised to see weight limits for carry-on bags start appearing.
Good article, until the end where you give your prescription for airline success in the future. More efficient planes will help, but the very latest jets are only a bit more efficient than the current ones in use. The airlines do a lot already to reduce unnecessary idling, and any improvements will be incremental at best. The only airline making money right now is Southwest, and only because they locked in low jet fuel prices years ago by buying hedges. You're right though, in that higher fuel prices will push airlines to upgrade their fleets sooner than they would have otherwise.
As an analyst on NPR pointed out this morning, to return to profitability, the airlines need to reduce capacity and then raise prices. Reducing capacity is good for the environment, and consumers and businesses will adjust to higher prices by flying less.
@Anthony,
Your fears are already being realized. Not a weight limit, but it amounts to the same thing:
Delta raising baggage fees
Airlines Increase Baggage Surcharges Following Higher Fuel Prices
For most airlines to break even, oil has to sell at $80 a barrel. ALL carriers have been bleeding red ink all year with these high oil prices. 25 or so airlines have gone out of business this year. The airline industry as we know it is going to change forever. There will be fewer, more expensive flights. Flying will once again become the exclusive purview of the rich and famous. That trip you've always wanted to take to Europe? Take it now, or forget about it.
BA chief warns 'airlines will go bust'
Airplanes Scale Back Service as Oil Prices Soar
Moody's: Many US airline business models 'unsustainable'
@Anthony,
Your fears are already being realized. Not a weight limit, but it amounts to the same thing:
Delta raising baggage fees
Airlines Increase Baggage Surcharges Following Higher Fuel Prices
For most airlines to break even, oil has to sell at $80 a barrel. ALL carriers have been bleeding red ink all year with these high oil prices. 25 or so airlines have gone out of business this year. The airline industry as we know it is going to change forever. There will be fewer, more expensive flights. Flying will once again become the exclusive purview of the rich and famous. That trip you've always wanted to take to Europe? Take it now, or forget about it.
BA chief warns 'airlines will go bust'
Airplanes Scale Back Service as Oil Prices Soar
Moody's: Many US airline business models 'unsustainable'
@Anthony,
Your fears are already being realized. Not a weight limit, but it amounts to the same thing:
Delta raising baggage fees
Airlines Increase Baggage Surcharges Following Higher Fuel Prices
For most airlines to break even, oil has to sell at $80 a barrel. ALL carriers have been bleeding red ink all year with these high oil prices. 25 or so airlines have gone out of business this year. The airline industry as we know it is going to change forever. There will be fewer, more expensive flights. Flying will once again become the exclusive purview of the rich and famous. That trip you've always wanted to take to Europe? Take it now, or forget about it.
BA chief warns 'airlines will go bust'
Airplanes Scale Back Service as Oil Prices Soar
Moody's: Many US airline business models 'unsustainable'