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Dutifully playing follow-the-leader, and jumping into the proverbial meat-grinder, airlines are competing to make a bad scene worse. They’re piling on: adding fees, reducing benefits, and devaluing frequent flyer miles even more. And that’s just today. Yeah, it was a bad day.

Round one: Luggage fees
Barely wasting any time after American Airlines imposed a $15 fee for the first checked bag, United has followed suit. The new fee goes into effect “if you are traveling on or after August 18, 2008 on an Economy ticket or Economy award ticket purchased on or after June 13, 2008.” Yes, there are exceptions for elite frequent flyers (notably for all Star Alliance elites, and not just United elites) and premium-cabin passengers. Full details here.

Oh, and US Airways matched the $15 fee today, too. Who’s next?

Round two: Free stuff isn’t free anymore fee
American introduced a $5 fee for booking a free ticket online. Purely spiteful, as Gary Leff argued when this first arose. Online distribution was intended to lower costs, but now it’s just a profit center.

But American’s $5 fee seems downright generous compared to US Airways’ announcement today. There’s a double-whammy of “award ticketing fees” and “award processing fees.” The ticketing fees consist of $30 surcharge for U.S/Canada tickets, and $40 for international itineraries. But then there’s the “processing fee”: $25 continental U.S./Alaska/Canada, $35 Latin America/Caribbean, $50 Hawaii/international.

Extortionary.

Round three: Free trips will cost more miles
American jacked up the number of miles necessary for many free tickets and upgrades, thereby making it harder to reach your award goals. No surprise, alas, given the oversupply of miles chasing a shortage of flights in an age of increasing airfares. But still annoying.

So far, no other followers… yet. Give it a day or two, and it won’t be a surprise if others devalue your miles the same way.

Round four: We will kick elites like dogs, and you’ll like it
US Airways will piss off thousands of its elite frequent flyers with its new “enhancement” to the Dividend Miles program: “US Airways is also eliminating its bonus miles program for Preferred status Dividend Miles members. Preferred members currently receive mileage bonuses based on their status level. The Preferred bonus program will be discontinued for tickets purchased on/after Aug. 6, 2008.” Ouch. So, elites who previously accumulated miles more quickly can now kiss that benefit goodbye. How many elites will be kissing US Airways goodbye? (Hat tip to Benet Wilson for pointing this nugget out to me first!)

Rounds five through infinity: Everything else.
Beyond that, the fees just keep on coming. US Airways is adding fees for all soft drinks, including water. Excuse me, that’s “a new in-flight beverage purchase program.” Ooh, a program! Groan. They’re raising the price of booze, too, to a whopping $7. United is increasing various ticketing fees, across the board, too many to name. And US Airways is shutting clubs and arrival lounges. Satire just doesn’t cut it anymore.

Is there a silver lining in here anywhere? I can’t seem to find it.

Related:
- Copycat: US Airways mimics United, starts charging for second checked bag
- Death by a thousand cuts: US Airways edition

Rick Seaney and the FareCompare team have once again beaten me to the punch: They’ve compiled a list of U.S. domestic airlines’ fees and put them all in one place.

Most every fee the airlines have imagined (so far) is there. The phone booking fee. The luggage fee. The cost of snacks, booze, and meals. The pet fee. The skycap fee. The re-ticketing fee. And on and on. (The fee fee, the Arial font fee, and the fee fi fo fum fee, as outlined here, somehow didn’t make the cut.)

It’s a great list, insofar as it helps consumers make better decisions. I’ve always argued that the lowest fare may not be the best value. (And that doesn’t even take frequency, upgrade possibilities, on-time arrivals, or anything like that into account.)

Be sure to check out the list.

Reader James dials the U:TB Batphone and tips us off to this fictitious airline’s oddly plausible website: Derrie-Air (har har har), “the world’s only carbon-neutral luxury airline, where you don’t have to choose between living the high life and saving the planet.” Heh. Sounds oddly familiar.

But this make-believe airline’s phony business model relies on a not-necessarily unthinkable concept: Weight-based fares. Not just your luggage, but your person, too.

…the more you weigh, the more you’ll pay. After all, it takes more fuel—more energy—to get more weight from point A to point B. So we will charge passengers based on how much mass they add to the plane. The heavier you and your luggage are, the more trees we’ll plant to make up for the trouble of flying you from place to place.

Cute. But again, is this really unimaginable? It works for the post office, so why not an airline?

Southwest already charges an extra seat for “passengers of size.” (Notably, Canada has banned this practice.) And even hotels have offered weight-based rates.

If you think this isn’t being considered right now by some airlines, think again. But check out the quote from this Bloomberg article, in which the president of Emirates Airlines goes beyond just poo-poo’ing his firm’s likelihood of charging passengers by the pound:

“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.”

Wait a minute — airlines used to weigh passengers? Which airlines? When For how long? And to what end? I can’t seem to find any record of this. My first flight was in 1973, but admittedly I was too young to remember it. Is Mr. Clark referring to weight-and-balance issues for small aircraft, or was there some other reason to put passengers on the scale?

Help me out here. Anyone out there have some memories of getting weighed before a flight?

Related:
- Travel by the pound
- Canada prohibits airlines from charging overweight passengers for an extra seat

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Downgraded: Short flights on United
Watching United and US Airways devalue their frequent flyer programs is like watching a tennis match, with the two players volleying back and forth. Every time one airline does something, the other does it a few weeks later. Lather, rinse, repeat. The latest: After US Airways did it a few weeks ago, United Airlines is eliminating the 500-mile minimum mileage earned. In an e-mail to customers, UA wrote:

Beginning July 1, 2008, for flights of less than 500 miles, passengers will earn redeemable miles equal to the actual miles flown. Elite Qualifying Miles (EQM) will also be awarded based on actual miles. Elite Qualifying Segments (EQS) are not affected. This new mileage accrual structure will apply to travel on or after July 1, 2008, regardless of when the travel was ticketed.

This affects road warriors who park their butts in seats on short flights most. It sure slows the trip on the road to elite status, or to that free ticket.

Update: The rules are now online, here. Thanks, Benet and Antonio!

Upgraded: Hassle
The agents of the Customs and Border Protection Service have 60 different reasons to deny a person entry into the United States, “at the discretion of border agents,” even if visitors have a valid ticket and don’t require a visa. “Looking at me funny” might be one of them, as an Italian visitor found out, ending up in the slammer for 10 days without charges. At what point is the appeal of travel to the United States — especially in light of the low dollar — outweighed by the government-paranoia BS factor?

Downgraded: Airspeed
Upgraded: Fuel efficiency
Think flights are moving a little slower lately? You may be right. Airlines are slowing down the engines and saving fuel in the process. Example: “Cutting the speed on a Northwest Minneapolis to Paris flight from 542 mph to 532 mph adds 8 minutes in flying time but reduces fuel consumption by 162 gallons, saving the airline around $535.”

The financial wiseguys at Minyanville have nailed it. They’ve pinned down, to a tee, the future of air travel fees.

I like the “Arial Font Fee” best. Can I get a discount for Palatino?

It’s item 4 of the “Five Things You Need to Know” today. The full “ticket” is here.

Merger speculation is no longer speculation
It’s on. Delta is officially offering 1.25 shares per Northwest Airlines share, a 16.75% premium over closing prices of DAL and NWA, respectively. Important to the success of the merger: The pilots’ union, ALPA, gets a seat on the resulting airline’s board and 3.5% equity in the company. The result, if it passes shareholder votes, is the world’s largest airline.

Up next: Continental-United. It’s going to happen, though nothing is official. Northwest’s linkup with Delta makes it possible, since Northwest held a “golden share” of Continental stock and could nix a merger if they wanted. Sigh. With several airlines folding in the past weeks, and with one or two mergers coming up, competition will (at least temporarily) be reduced significantly. Watch for prices to rise. But will rising prices kill demand?…

Who will be next to fall?
Chris Elliott may be making book on which airline will fold next, but it won’t be Virgin America. (I put an exacta box on Alitalia and SunCountry, with a side bet on Mesa and a long-shot on VA. The latter bet may be down the crapper. Thankfully, no money changed hands…) The Branson-powered airline will get another $100 million in capital from investors. Profitability is still 3 years away, they say. Three years for me to win that bet!

More FAA inspections… but no groundings
The FAA, fresh off its attempted legitimacy-building groundings of American’s MD-80s, is ordering the repair of wing de-icing systems, landing gear, and (!) oxygen masks on 1980s-era Boeing 737s. That means Continental, Delta, Southwest, United, and others will have some repairs to make. But it’s obviously not urgent, since the airlines have 36 months to fix things. So, three years from now, if airlines are grounded for these problems, you’ll know why. Bonus: United and the Air Transport Association asked for 48 months, instead of 36. Denied. This really, really, really must not be a big deal.

Peter Greenberg disagrees, after chatting up an FAA inspector responsible for Mesa’s fleet. But Peter, much like with a car, there are degrees of repair. Sure, I should get those wiper blades replaced on the old Honda, as they’re streaking a bit when I wipe the dew off in the morning, but they’re not a danger to me… yet. I agree that repairs should be made, and maintenance is important, but as long as the FAA says it’s minor work and the pilots are willing to put their lives on the line, I’m willing to take the chance and get onboard.

Urinals!
We’ve been promised martini bars, bedrooms, and even weight rooms, so I’ll believe it when I see it, but here’s another in the long line of upgrades to the inflight experience:

Airbus announces the option of urinals in onboard restrooms. That will make turbulence so much less … messy.

But not good enough, Airbus: I demand bidets!

Late last week, Frontier Airlines filed for chapter 11 bankruptcy. Unlike some of the recent airline shutdowns, Frontier IS still flying, much like Delta, Northwest, US Airways, and United did earlier this decade. But the real news nugget is Frontier’s stated reason for the timing of their bankruptcy filing. Not fuel prices, or competition. Credit cards.

In making the announcement, Frontier CEO Sean Menke stated that the Denver-based airline “filed for very different reasons than those of other recent carriers.” Indeed, Mr. Menke blamed the airline’s descent into bankruptcy on an “unexpected attempt” by credit card processor First Data “to start withholding significant proceeds received from the sale of Frontier tickets.”

Generally, credit card vendors turn over revenue to airlines from bookings in a matter of days. But in some cases, the companies hold on to a percentage of ticket receipts until customers actually take their flights. These so-called holdback policies vary, usually depending on the financial stability of an airline.

In Frontier’s case, the holdback rate went from 45% to 100%, effective May 1. Ouch.

For travelers, though, there are longer-term implications here: If airlines’ financial viability is a dance on a razor blade, and if accepting credit cards can create a risk of survival, then travelers are likely to see cash-payment incentives (or credit-payment disincentives), going forward.

European airlines have been charging a credit card surtax for some time, to dissuade customers from charging it. And a few months ago in the U.S., discounts were floated as a way of getting customers to pay by cash. And despite the fact that every airline has an affinity credit card that generates points in their loyalty program, Frontier’s bankruptcy is going to put more pressure on airlines to reduce the reliance on credit.

Just watch.

Related:
- Is there a backlash against credit cards brewing among U.S. airlines?
- Skybus shuts down abruptly, third scheduled U.S. airline to fold this week

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Time to short Samsonite stock?
Continental is the latest in a long line of airline to slap an additional fee on checking in a second suitcase. Yes, some exceptions apply, so OnePass elites as well as premium-cabin customers won’t have to pay the bill. But the bottom line: The 2008 flying environment dictates that the “2PC” rule is dead. One checked bag per person, or pay up.

UPDATE: Cranky points out that United has tightened up its rules on the 2nd bag. Previously, a refundable (read: expensive) ticket meant you got a waiver on the 2nd bag fee. Not anymore. How nice of them to make the policy so much more consistent, while, surely coincidentally, adding a revenue opportunity for the airline!

Another one bites the dust
Not quite the level of drama as the ATA, Aloha, and Skybus shutdowns, but Midwest Express’ commuter feeder Skyway Airlines is no longer flying. Their routes are being taken over by Skywest, a few letters apart, but a different company nonetheless. Passengers may not even notice, as the tickets were sold by Midwest and simply subcontracted to a different supplier. But the pilots and employees of Skyway will be feeling the sting.

Fuel cell-powered airlines coming someday?
It’s a small plane, without tons of passengers and cargo, but an encouraging sign nonetheless. Boeing successfully tested a small plane that ran on batteries and fuel cells. Its only emissions: Water vapor. Now if only they could create a fuel cell large enough to fly to Singapore…

How would US Customs & Immigration rate?
Jan Chipchase blogs about customer service feedback opportunities at Beijing and Frankfurt airports. I’ve flown through Frankfurt, but not Beijing, yet I’ve never been asked to give my opinion of the customs/immigration experience. Harrumph. The Beijing mechanism — an electronic device that invites you to push a button, rating your customs agent on a Likert scale — is nutty, and frankly unexpected at ANY airport, much less in China. (Jan snapped a photo of the device in the airport, which, in itself, is amusing, considering the general securitization of the customs area…) Nice idea, as long as you can rate the agent AFTER you’ve completed your business. I can only imagine how the surly agents at JFK would rate.

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Late Friday, Skybus announced on its website that it would shut down by the end of the day. If you hold tickets on the discount airline for travel today (Saturday, April 5, 2008) or later, call your credit card company immediately and try to secure a refund.

I say “try,” because you may not be able to get your money back. If you booked tickets well in advance and you’ve already paid the bill, you may run into snags with your credit card company in getting a chargeback. You generally can dispute charges when a company fails to deliver the services it promised, but if you’ve paid your bill, your bank is far less likely to work on your behalf. Banks vary; call them. Now.

If you’re already halfway into an itinerary, you can try to get your ticket honored by another airline, but as Chris Elliott has pointed out after previous airline shutdowns, there’s no law requiring them to do so. If any other airline accepts a Skybus ticket, even with a surcharge, it’s as close to an act of charity as you’ll ever see from a for-profit enterprise.

So far, no statement has appeared on any of the major airlines’ websites to woo Skybus customers. Who would want to attract a cheapskate customer who only paid a measly $10 one-way fare, I guess. In contrast, you’ll see announcements of standby policy for stranded ATA and Aloha customers on airline websites like Northwest, US Airways and United. For example, ATA customers can fly standby (on a space-available basis… good luck) on US Airways for $100 per segment. Not truly “cheap,” but better than paying a walk-up fare to, say, get back to the U.S. mainland from Honolulu.

But back to Skybus: Their failure is a surprise, but only for its timing. The third scheduled airline this week to close its doors, after the much older Aloha and ATA. (I’m sorry, I don’t count the charter airline Champion Air, which also folded this week. Bad week for the industry.) High fuel prices and bad business models combined to create this week’s carnage.

I never flew Skybus, though I had been considering trying them out on a Greensboro-Chicago/Gary flight. I flew Aloha inter-island in 1994, which was pleasant, and I flew ATA in 2003, which was less than pleasant. (I swore never to fly ATA again after a miserable experience with their front-desk staff at Chicago/Midway, who refused to issue a boarding pass, even though I was at the gate more than 45 minutes before the flight. “You’ll never make it through security in time.” “I bet I can.” “Nope, you won’t. The next flight is in 7 hours. You’re on the standby list.” I’ve never been angrier at an airline employee.)

Taking three airlines out of commission is pulling a good chunk of supply from the market, especially to Hawaii, which will allow other airlines to raise fares. For the short term, these airline failures are bad news for all flyers, not just the folks who hold tickets on the defunct carriers.

But rest assured, much like lottery tickets always find a market, capital always seems to flow to start-up airlines, though it’s not overnight. Perhaps a Charleston, West Virginia based airline might be the next big thing. Or even a Louisiana-themed discount carrier named after gumbo.

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Upgraded: Evidence that airlines are unwilling to break the status quo
The Air Transport Association, fresh off its successful lawsuit that overturned the Passenger Bill of Rights in New York, is threatening to sue the Department of Transportation over the proposed introduction of congestion pricing at the busiest U.S. airports. The airlines will do what they can to stop the proposal, they say. So what’s the airlines’ solution to overbooked airports? Cue the crickets…

Upgraded: Olympic condoms
With the summer games coming up, Chinese hotels are stocking up on condoms. Yes, really. “The condoms shall not be used as evidence of prostitution and whoring.” Well thank goodness! But will they be found in the minibar?

Downgraded: Commemorative British Airways newsletters
Upgraded: FedEx
Five years, and billions of capital spent, and the Terminal 5 fiasco at London Heathrow continues to be a headache for all involved. Last week’s grand opening of the posh new terminal was marred by the now well-publicized luggage handling failure. 20,000 checked bags still need to be reunited with their owners, and British Airways is calling in the cavalry: FedEx. Another reason that BA has decided to scrap a commemorative in-house newsletter celebrating the terminal opening.

Upgraded: Single travelers in Delta coach
Downgraded: Ghetto upgraders
Delta is buying Thompson Solutions’ “Cozy Suites” for its widebody jets, to be installed in 2010. The seats are a little odd, with a staggered configuration with no two people sitting precisely next to each other. More armrest space is one perk with this approach. Good for solo travelers, bad for couples and families. But even worse for anyone hoping to get a “ghetto upgrade” — an entire row of seats to oneself, allowing you to lift the armrests and stretch across. It’s also somewhat reminiscent of the alternating forward-backward-forward seating that was floated just about a year ago. But it’s thinking differently, and I like that. (via Cranky)

Hopefully everyone got the April Fool’s ha-ha’s out of their system today. But the winner, in my book, is Canadian airline WestJet, which announced that they were converting their overhead bins into sleeper seats.

Their press release offered this explanation:

By offering our existing overhead bins as sleeper cabins, guests will now have the opportunity to lie down for a period of time and arrive at their destination refreshed, rested and ready to go.

Well-played, WestJet. Well-played.

And in an alternate joke bound to make Chris Elliott cringe, “Richard Branson’s Virgin Blue airline got into the April 1 spirit by running newspaper ads offering half-priced fares for passengers willing to stand, with free calf massages on flights longer than two hours.”

Uncovered: the previously secret blueprint for airline business plans. It’s all here: inventory management, pricing, flight scheduling, route selection, maintenance, and even duty free shopping. Courtesy of Monty Python.