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Airlines May Start Treating Passengers `Like Freight' (Update1)
By Michael Janofsky
June 3 (Bloomberg) -- Imagine two scales at the airline ticket counter, one for your bags and one for you. The price of a ticket depends upon the weight of both.
That may not be so far-fetched.
``You listen to the airline CEOs, and nothing is beyond their imagination,'' said David Castelveter, a spokesman for the Air Transport Association, a Washington, D.C.-based trade group. ``They have already begun to think exotically. Nothing is not under the microscope.'' He declined to discuss what any individual airline might be contemplating, including charging passengers based on weight.
With fuel costs almost tripling since 2000, now accounting for as much as 40 percent of operating expenses at some carriers, according to the ATA, airlines are cutting costs and raising revenue in ways that once were unthinkable. U.S. Airways Group Inc. has eliminated snacks. Delta Air Lines Inc. is charging $25 for telephone reservations. AMR Corp.'s American Airlines last month became the first U.S. company to charge $15 for one checked bag.
Even a cold drink may be harder to come by aloft.
Singapore Airlines Ltd., whose shares have fallen 8.9 percent this year, is ``trying to eliminate unnecessary quantities of extra water'' to save weight, Chief Executive Officer Chew Choon Seng said in an interview.
``When you hear some people talking about putting showers on their planes, that strikes me as counterintuitive,'' he said.
Logical Step
After U.S. airlines reported combined first-quarter losses of $1.7 billion and crude oil jumped to a record $133.17 a barrel on May 21, almost double from a year earlier, fares based on a passenger's weight may be a logical step, said Robert Mann, head of R.W. Mann & Co., an aviation consultant based in Port Washington, New York.
``If you look at the air-freight business, that's the way they've always done it,'' he said. ``We're getting treated like air freight when we travel by airlines, anyway.''
``Laughter aside, the airlines are just in a desperate situation,'' said David Swierenga, president of consulting firm Aeroecon in Round Rock, Texas, who dismissed weight-based ticket sales and steep price increases as unrealistic.
Since December, eight companies have ceased flying, largely because of fuel costs -- MaxJet Airways Inc., Big Sky Transportation Co., Aloha Airlines Inc., ATA Airlines, Skybus Airlines Inc., Eos Airlines, Silverjet Plc. and the charter- flight operator Champion Air. Air Midwest, a division of Mesa Air Group Inc., is ceasing operations this month.
$6.1 Billion Loss
Airlines may report combined losses of $6.1 billion this year, the worst since 2003, the International Air Transport Association said yesterday in Istanbul. Swierenga said the only meaningful way for them to reach profitability is to idle a portion of their fleets, which would allow them to reduce costs associated with fuel and labor.
``The solution lies in capacity cuts,'' he said.
That's already begun. Ryanair Holdings Plc, whose shares have dropped 38 percent this year, will ground 20 aircraft this winter, equivalent to about 10 percent of total capacity, Chief Financial Officer Howard Millar said today. American said on May 21 up to 45 planes, most of them aging Boeing Co. MD-80s, would be dropped from its 655-jet fleet along with as many as 40 aircraft from its 305-plane Eagle regional unit.
``Most other airlines will have similar cuts as well,'' said Jim Corridore, an analyst for Standard & Poor's in New York.
Measures Taken
Airlines have also taken shorter-term steps even if they have stopped short of weighing passengers.
Japan Airlines Corp. is using crockery in first-class and business-class cabins that is 20 percent lighter than the service items they replaced.
Southwest Airlines Co. is flying slower -- by 72 seconds, for example, on Houston-Los Angeles flights, which now take 3 hours 14 minutes. That saves 8.7 gallons of fuel for each of the airline's four daily nonstops on the 1,387-mile route, 34.8 gallons a day overall, said Marilee McInnis, a company spokeswoman.
Southwest comes closest to charging for weight, asking passengers to buy a second seat if their girth prevents the armrest from lowering.
Power Change
American Airlines has switched from using on-board power units that draw down jet fuel while planes are parked at gates to electrical generators on the ground, said Steve Lott, a spokesman for the International Air Transport Association.
Deutsche Lufthansa AG, Europe's second-largest airline, is one of several that has begun washing planes more frequently, said Lott, pointing out that dirt on a fuselage increases wind resistance.
Cathay Pacific Airways Ltd., Hong Kong's largest carrier, is ordering money-saving changes that passengers won't notice, said managing director Tony Tyler, who declined to cite them.
``Customers notice quickly if you start to take away service elements,'' he said. ``We operate in a very competitive market and can't afford to let the competition get a march on us.''
One airline that is unlikely to start weighing its customers is Dubai-based Emirates, the largest carrier in the Gulf region.
``That is something that when I was a check-in agent in the early 70s I used to do and it was the most horrific experience, trying to get people to stand on scales,'' said Tim Clark, the airline president. ``It's not something that we would do.''
To contact the reporter on this story: Michael Janofsky in Los Angeles at [email protected]
Last Updated: June 3, 2008 11:55 EDT
By Michael Janofsky
June 3 (Bloomberg) -- Imagine two scales at the airline ticket counter, one for your bags and one for you. The price of a ticket depends upon the weight of both.
That may not be so far-fetched.
``You listen to the airline CEOs, and nothing is beyond their imagination,'' said David Castelveter, a spokesman for the Air Transport Association, a Washington, D.C.-based trade group. ``They have already begun to think exotically. Nothing is not under the microscope.'' He declined to discuss what any individual airline might be contemplating, including charging passengers based on weight.
With fuel costs almost tripling since 2000, now accounting for as much as 40 percent of operating expenses at some carriers, according to the ATA, airlines are cutting costs and raising revenue in ways that once were unthinkable. U.S. Airways Group Inc. has eliminated snacks. Delta Air Lines Inc. is charging $25 for telephone reservations. AMR Corp.'s American Airlines last month became the first U.S. company to charge $15 for one checked bag.
Even a cold drink may be harder to come by aloft.
Singapore Airlines Ltd., whose shares have fallen 8.9 percent this year, is ``trying to eliminate unnecessary quantities of extra water'' to save weight, Chief Executive Officer Chew Choon Seng said in an interview.
``When you hear some people talking about putting showers on their planes, that strikes me as counterintuitive,'' he said.
Logical Step
After U.S. airlines reported combined first-quarter losses of $1.7 billion and crude oil jumped to a record $133.17 a barrel on May 21, almost double from a year earlier, fares based on a passenger's weight may be a logical step, said Robert Mann, head of R.W. Mann & Co., an aviation consultant based in Port Washington, New York.
``If you look at the air-freight business, that's the way they've always done it,'' he said. ``We're getting treated like air freight when we travel by airlines, anyway.''
``Laughter aside, the airlines are just in a desperate situation,'' said David Swierenga, president of consulting firm Aeroecon in Round Rock, Texas, who dismissed weight-based ticket sales and steep price increases as unrealistic.
Since December, eight companies have ceased flying, largely because of fuel costs -- MaxJet Airways Inc., Big Sky Transportation Co., Aloha Airlines Inc., ATA Airlines, Skybus Airlines Inc., Eos Airlines, Silverjet Plc. and the charter- flight operator Champion Air. Air Midwest, a division of Mesa Air Group Inc., is ceasing operations this month.
$6.1 Billion Loss
Airlines may report combined losses of $6.1 billion this year, the worst since 2003, the International Air Transport Association said yesterday in Istanbul. Swierenga said the only meaningful way for them to reach profitability is to idle a portion of their fleets, which would allow them to reduce costs associated with fuel and labor.
``The solution lies in capacity cuts,'' he said.
That's already begun. Ryanair Holdings Plc, whose shares have dropped 38 percent this year, will ground 20 aircraft this winter, equivalent to about 10 percent of total capacity, Chief Financial Officer Howard Millar said today. American said on May 21 up to 45 planes, most of them aging Boeing Co. MD-80s, would be dropped from its 655-jet fleet along with as many as 40 aircraft from its 305-plane Eagle regional unit.
``Most other airlines will have similar cuts as well,'' said Jim Corridore, an analyst for Standard & Poor's in New York.
Measures Taken
Airlines have also taken shorter-term steps even if they have stopped short of weighing passengers.
Japan Airlines Corp. is using crockery in first-class and business-class cabins that is 20 percent lighter than the service items they replaced.
Southwest Airlines Co. is flying slower -- by 72 seconds, for example, on Houston-Los Angeles flights, which now take 3 hours 14 minutes. That saves 8.7 gallons of fuel for each of the airline's four daily nonstops on the 1,387-mile route, 34.8 gallons a day overall, said Marilee McInnis, a company spokeswoman.
Southwest comes closest to charging for weight, asking passengers to buy a second seat if their girth prevents the armrest from lowering.
Power Change
American Airlines has switched from using on-board power units that draw down jet fuel while planes are parked at gates to electrical generators on the ground, said Steve Lott, a spokesman for the International Air Transport Association.
Deutsche Lufthansa AG, Europe's second-largest airline, is one of several that has begun washing planes more frequently, said Lott, pointing out that dirt on a fuselage increases wind resistance.
Cathay Pacific Airways Ltd., Hong Kong's largest carrier, is ordering money-saving changes that passengers won't notice, said managing director Tony Tyler, who declined to cite them.
``Customers notice quickly if you start to take away service elements,'' he said. ``We operate in a very competitive market and can't afford to let the competition get a march on us.''
One airline that is unlikely to start weighing its customers is Dubai-based Emirates, the largest carrier in the Gulf region.
``That is something that when I was a check-in agent in the early 70s I used to do and it was the most horrific experience, trying to get people to stand on scales,'' said Tim Clark, the airline president. ``It's not something that we would do.''
To contact the reporter on this story: Michael Janofsky in Los Angeles at [email protected]
Last Updated: June 3, 2008 11:55 EDT
