Archive for the 'regulation' Category

Upgrades and Downgrades — July 16, 2007 — Status, scales, fares, and the little guy

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Upgraded: US Airways elite status for non-elites
Downgraded: Existing US Airways elite member satisfaction
US Airways is letting those without status buy their way into the rank and file of the elite frequent flyer set, giving them access to the upgrade waiting list and a few bonus miles. Whoo. If I were a US Airways elite, I’d be peeved at their “Try Preferred Status on for size” promotion. Much like Tim Winship argues, it’s hard enough getting an upgrade; now the airline is willing to sell your loyalty down the river to make a quick buck, thereby making it even harder to snag that wider seat with the marginally better service. Classy.

Upgraded: Virgin America
Slow-going upstart Virgin America got its approvals all lined up, and they’re officially legal to sell tickets and fly around the USA. But they’re not selling tickets yet. Their website still promises the moon. What’s the holdup? Jeez, people! August, they say.

Downgraded: Airport scales
Surprise, surprise. The scales at airports are often wrong. How often? 90% of scales were off in a Phoenix television station’s investigative report. Problems limited to Phoenix? Probably not. Try to make sure your scale is at zero when you put down your bags, but that won’t necessary avoid trouble. (Via Consumerist)

Upgraded: The little guy
Jane Waun rocks. She took Spirit Airlines to small claims court for the additional expenses she incurred after Spirit summarily canceled her flight and left her high and dry. They refunded her money for the ticket (eventually) but didn’t cover her additional costs. So she sued. And she won, in part because Spirit never showed up to fight it. 90% of success is showing up, or something like that, right?
(Update: I see Chris Elliott picked up on this, too. And he goes a step further, suggesting that everyone take every travel company to small claims court. Sue them every time, and hope they don’t show, in order to force them to change their practices. Nice idea, but small claims cases still take time! That’s probably why Spirit blew the case off in the first place. But if you have the time, go for it.)

Upgraded: Price transparency in the European Union
The EU Parliament has passed a set of rules mandating that airlines have to quote full prices, not just base fares. (Take that, easyJet!) The law needs approval from member states before taking effect, but this is pro-consumer. Let’s hope the member states pass it.

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Traveling with booze: Policy clarifications and changes

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Regular readers know how frustrated I have been with inconsistent liquid-ban enforcement and the subsequent confusion over duty free purchases that ensues, like the finger-pointing contradiction-fest I experienced in Munich a while back. Travelers changing planes on multi-leg international flights (say, flying from New York to Frankfurt and on to Johannesburg) were especially hard-hit, with several different layers of regulation hitting them and their liquid cargo.

For the traveler with liquids in tow, two items may be of interest.

First, the European Commission adopted new rules for travelers changing planes in the EU member states, plus Switzerland, Norway, or Iceland. If the airport where you purchased your duty-free liquor adheres to “the two ICAO state letters (1 December 2006 and 30 March 2007), which set standards for tamper evident bags and security levels for supply chains to airport retailing,” then your precious cargo will not be confiscated by European airport personnel or law enforcement authorities. This effectively means that the European Commission now recognizes the security procedures of other airports as acceptable and adequate.

Of course, the problem is, how do you know that your departure airport fits the bill? And it may take some time before the new rules filter down to the people who enforce these rules on the ground. Still: A step forward for common sense.

Second, a reminder from Upgrade: Travel Better contributor Tyler Colman on the rules regarding duty-free limits on wine (or other alcohol, for that matter.) Very often, airport and airline staff unfortunately tell passengers about the “limits” on liquor, when in fact they’re referring only to the duty-free limits. As if the duty free limit is all you’re allowed to carry into the country. Not so!

If you’re flying back to the United States, you can carry in several cases of wine if you like, assuming 1) that you check it as baggage, packed nicely in a padded wine box, 2) that you have receipts indicating the purchase price of the wine, and 3) that you declare the wine to the customs agents when you arrive, and on your declaration form. You can bring plenty back from your travels, if you are willing to pay the taxes, but you only get very limited amounts duty-free. And how much are those taxes? 3%. THREE! That’s nothing! And travelers report that customs agents can’t be bothered to fill out the paperwork on such small amounts, so you might get off with a duty-free case or two.

Of course, carrying that much back means you’re dragging boxes through airports and possibly paying the airline an excess baggage charge. But don’t let anyone tell you you can’t take it with you.

Cheers!

Update:
Reader Steve writes in to point out that I glossed over an important point in Dr. Vino’s post: The rules on how much alcohol you can bring into the country are also set by the state where you land. A snippet from Steve’s e-mail, with a story of zealous liquor enforcement, below:

Your posting on booze coming back into the US is true, but incomplete.

While it is true that the Feds place no restriction on the amount of alcohol you can bring in some states do (or at least used to). So if your first port of entry is NY and NY State only allows two bottle (which used to be the case) then you can be forced to throw everything out beyond that.

That is exactly what happened to me, however it was almost 20 years ago and it is likely (though not certain) that the rules have changed. But since states are still firmly in control of these laws if you intend on bringing in more than the federal limit it would be prudent to call the ABC of the state you will be clearing customs in and ask what the regulations are.

Thanks, Steve!

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EU-US open skies treaty signed — consumer-friendly or threat to sovereignty?

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The European-American open skies treaty was signed today. Assuming the U.S. Senate ratifies it (as expected), the deal goes into effect in March 2008.

The big news is that American airlines can fly into any European city, and vice versa. Plus, American airlines can fly passengers between countries within Europe. European airlines can’t fly domestically within the U.S., so you won’t see Air France or Lufthansa flying from Orlando to Memphis.

Overall, this deal should lead to greater competition and lower prices. That’s good!

But… the devil is in the details. As the treaty is written, there are some concerns, as Ed Hasbrouck points out:

The “Open Skies” agreement [Article 8, Section 3] requires compliance with all “recommended practices” of the International Civil Aviation Organization (ICAO). By making ICAO recommendations mandatory, the “Open Skies” agreement effectively delegates to ICAO the legislative power of the E.U. and the US. This is especially problematic because national delegations to ICAO have never included data protection, civil liberties, or human rights authorities.

Less legalese translation: An unelected international organization can dictate the aviation policy (including aviation security policy) of the US and the EU.

Governments ceding some of their sovereign authority to international organizations isn’t anything new. But considering how much importance security issues have in the American consciousness, it’s startling that our leaders were willing to hand off so much authority.

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Upgrades and Downgrades — April 23, 2007 — Liquids, luggage, and taxis

chicago-fountain-spitting.jpgUpgraded: Carnival’s beverage policy
Carnival Cruise Lines has revised its recently-changed policy prohibiting passengers from bringing beverages onto the ship. “Guests may bring a small quantity of non-alcoholic beverages,” but the booze is still off-limits. Spokesman Vance Gulliksen admitted the company was “monitoring reaction to the ban” (cough, blogs, cough) and changed the policy in response to the grumbling. “Small quantity” is subjective, though, so expect some hassles if you bring multiple bottles of anything. Got an eyewitness report of Carnival’s beverage enforcement in practice? Hit the comments or drop a line.

Downgraded: The accuracy of Ryanair’s scales
Euro-ultra-discounter Ryanair is accused of improperly maintaining its baggage scales, leading to wide variations in the weight measurement of checked bags. Since Ryanair charges £3.30 (about US$6.60) for every kilogram over 15kg, the numbers could add up to real profits. One bag weighed 17kg in Girona, Spain, while only weighing 14.6kg back in the U.K.

Upgraded: The rights of taxi passengers at Minneapolis Airport
Remember the Minneapolis taxi drivers who were refusing to transport anyone they suspected was carrying alcohol? (Those duty-free bags were a dead giveaway.) First, the city’s taxi commission allowed the discrimination, by labeling cabs “wet” or “dry.” Then came reports that the taxis were refusing service to people with seeing eye dogs, too, since these were “unclean.” So the commission created economic disincentives, by forcing cabs to move to the back of the line if they refused a passenger. Now, the city’s taxi commission is finally imposing real penalties — license suspensions — on drivers who discriminate: First offense is 30 days, second offense 2 years. Good. “Cab driver” probably isn’t the right line of work for these guys, anyway.

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Tax day: What are those taxes and fees you pay when you travel? And are you getting screwed?

tax-forms.jpgIt’s tax day, and what better opportunity to ask what taxes you’re paying when you travel, and where that money is going?

Of the big three — air, hotel, and car rental — air travel within the U.S. is the most tax-standardized (which isn’t saying much). Hotel occupancy taxes vary by municipality, and car rental taxes range wildly depending on how badly the state or local government wants to stick it to out-of-towners.

Air taxes, on the other hand, are more readily summarized. But when you learn about how some of those taxes are spent, you may not be happy.

Bob Porterfield of the Associated Press does the heavy lifting for us and tallies them up — 7.5% federal taxes, $3.40 segment taxes for each leg of the flight, $2.50 security fees per segment, and the airport-imposed passenger facility charges of up to $4.50 per landing.

But the real kicker is where some of those monies — in particular the 7.5% federal taxes on all scheduled air tickets — are going:

The federal government has taken billions of dollars from the taxes and fees paid by airline passengers every time they fly and awarded it to small airports used mainly by private pilots and globe-trotting corporate executives.

Fan-freakin’-tastic. Not only do these folks get to opt out of the mass-market security hassles, they get subsidized by the general public till to do it.

You may be asking if private aviation pays a different set of charges to cover its use of America’s overstretched aviation systems. Yes, and no. Mostly no.

Passenger taxes are collected in noncommercial aviation only in instances involving the fractional ownership of private jets, air charter operations and small commuter flights. Instead, it contributes to America’s air transit infrastructure in the form of a fuel tax that covers just a fraction of the services it uses.

For the most part, private jets don’t pay taxes, and certainly not nearly the percentage of taxes to which commercial travelers have gotten accustomed.

So are private jets paying enough? Nope.

A study released in February by the FAA said it cost $2.4 billion just to provide air traffic control for private and corporate planes in 2005. The industry contributed just $516 million in fuel taxes that year.

So how do you fix the disparity? Uniform, distance-based taxation? Fuel taxes? Landing fees? I don’t know, but I’d love to hear your ideas.

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Upgrades and Downgrades — March 27, 2007 — American Airlines’ planes, Lufthansa’s lounges, and your smelly clothes

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Upgraded: American Airlines’ fleet
American is boosting its delivery schedule of Boeing 737-800s, to replace the aging, gas-guzzling McDonnell Douglas MD-80s that make up half their fleet. The new planes will burn 25% less fuel.

Downgraded: Cash on Frontier Airlines
Frontier will no longer accept cash for onboard payments, beginning April 1. They join other airlines like ATA and Spirit in going cashless. Cash may be downgraded, but overall, and many will miss the choice of cash or plastic, but as an aficionado of credit cards (more miles! receipts!) this is fine with me.

Upgraded: European airline merger fever!
The open skies treaty’s passage on the European side of the Atlantic is sparking chatter of mergers and acquisitions. British Airways has expressed interest in bmi, Lufthansa is peeking around Iberia, bmi, and Alitalia, and Virgin Atlantic has supposedly been poking around the continent’s airlines as well. No trans-Atlantic mergers rumored quite yet.

Upgraded: Lufthansa lounges
Lufthansa is spending $130 million worldwide to upgrade its airport lounges, which are already pretty decent. U.S. airlines’ lounges, already a sad also-ran in the global lounge wars, will seem even more outdated and under-serviced.

Downgraded: Singapore Airlines’ frequent flyer program
It’s not just U.S.-based carriers who seem hell-bent on reducing benefits for their frequent flyers. The Global Traveller bemoans the latest changes in Singapore Airlines’ KrisFlyer program.

Upgraded: Luxury hotel brands’ geographic reach
Looking for a Ritz-Carlton or other high-end hotel? It’s getting easier. The luxe chains are spreading to second- and third-tier cities.

Upgraded: Regulation
Travel companies, from cruise ships to airlines, haven’t done a sufficiently good job of self-regulating, so here come the regulators! Beyond the PBOR, we’re seeing moves toward regulating the cruise industry as well as airlines. The pressure to re-regulate is snowballing.

Upgraded: Your stinky wardrobe
Brilliant! A charcoal garment bag that deodorizes your stinky clothes. (Via Dethroner)

Upgraded: Airport bathrooms
Coming soon to Raleigh-Durham Airport: Better bathrooms! Wider/longer stalls let you keep your stuff in sight. But this has me scratching my head: “Tilted mirrors will be placed above the urinals so men can keep an eye on computer cases even as they’re going about their business.” Won’t these mirrors provide others with a great show, too? I’ll settle for cleaner bathrooms, as a start.

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US-EU open skies treaty gets European approval

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The proposed “open skies” treaty between the European Union and the United States moved a big step forward today when the EU transportation ministers voted unanimously in favor of the agreement. The treaty now goes to the US Congress.

So, if this passes (a big if), what’s in it for you? I gave an analysis earlier, in the pre-game show, so to speak, here.

Short version: More point-to-point routes and competition on trans-Atlantic routes: good! The possibility of international airline mergers: mixed, probably bad. Net effect: still good!

London Heathrow remains a big sticking point. Within seconds of the EU passing the treaty, Continental filed an application to fly to Heathrow. We’ll see if they can find room for more airlines at that already-overcrowded airport.

The other big sticking point is an American change in airline ownership rules. If the treaty passes, foreigners will be allowed to own a majority in American airlines — as long as the voting stake doesn’t exceed 25%. Expect an eventual trans-Atlantic merger.

The deal heads to Congress. I hope they pass it, and that the treaty signing ceremony on April 30 goes on as planned. If you care about this sort of thing, one way or the other, write your senators.

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Related:
- Will foreign ownership of airlines mean lower prices?
- More on open skies
- Are open skies dirty skies?
- US-EU open skies treaty dead in the water, so to speak

Inflight cellphone use may not happen in U.S. after all

cellphone-closeup.jpgThe tide appears to have turned on inflight cellphone use, and passengers hoping to catch a few winks in-flight may be relieved.

The Federal Communications Commission is apparently withdrawing its previous support for the use of cellular phones onboard commercial aircraft.

Federal Communications Commission Chairman Kevin Martin is recommending the FCC drop its tentative plan to lift its ban on in-flight cellphone use, three agency officials say. They asked to remain anonymous because the proposal is still being considered. Most of the agency’s five commissioners support the recommendation, the FCC officials say.

The reason given is technical, not etiquette. Tests showed that the inflight systems interfered with mobile phone communication on the ground.

No word yet on how this might affect plans for cellular data transmission. But voice is out. No more worries about trying to sleep while a chatterbox gabs away in the adjacent seat.

Hallelujah.

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Related:
- Secrets of inflight cellphone use — revealed!
- “No Cellphones” light to be added to aircraft interiors
- Emirates promises (or threatens) inflight cellphones on longhaul flights
- No to cellphones, yes to VoIP in the sky?

Virgin America to be allowed to fly, if CEO is fired

virgin-tail-small.jpgThe Department of Transportation has spoken, and embattled airline-to-be Virgin America can fly… IF — and only if — they fire their CEO.

That would be Fred Reid, whom you may remember from such video aircraft tours like this one.

Here’s the word from the DOT:

“We tentatively find that the applicant’s replacement of Mr. Reid as CEO and board member with a U.S. citizen who has no prior affiliation with the Virgin Group would substantially remedy our concerns over the independence of the applicant’s management from the Virgin Group,” DOT said.

As a condition of gaining approval, Virgin America must confirm Reid’s termination of employment within 90 days of the carrier’s obtaining its certificate, and any follow-on consulting work must end within 180 days of his removal.

Tough break for Fred, but I’m not worried about him. Something tells me he’s got a platinum parachute waiting for him.

There is also a dispute over the use of the Virgin name, and the payment of royalties to the British mothership. That could actually be a bigger snag, in the end, since the Virgin name is something the airline presumably wants.

Pass the popcorn, again.

Related:
- Virgin America is un-American
- Virgin America wants your vote, teases you with glimpses of their planes
- Update: Virgin Atlantic revises its ownership structure, potentially making it legal

Good for the goose, good for the gander: Charge change fees to your airline?

More passengers’ bill of rights fun! It’s not just the Chicago City Council that’s taking a national issue local. This time it’s the Florida Senate. Pile on!

The Senate Commerce Committee on Wednesday endorsed Bradenton Republican Sen. Mike Bennett’s bill to force airlines to refund ticket prices or issue tickets for other flights to customers whose flights are delayed more than one hour.

It’s unclear whether the state has the authority to regulate the federally controlled airline industry, but Bennett said he filed the bill so lawmakers in Washington and the airline industry know Floridians expect better customer service when they fly.
[…]
Under Bennett’s bill, airlines would have to pay inconvenienced customers the same fee they would charge someone to cancel a flight.

For example, if customers have to pay $50 to book a later flight because they’re delayed in traffic, the airline would have to pay those customers the same $50 if the carrier delays a flight because of problems with a plane. The penalties would not apply to flights delayed because of bad weather. The bill would also require airlines to transfer tickets from one person to another.

Love it! I know this is grandstanding, and it’s likely to be struck down in court, but it’s fun to turn the tables on the airlines. Can we start doing it to banks, too, while we’re at it?

(Aside: $50 to book a later flight when you’re stuck in traffic? Most airlines have the “flat tire rule” which lets you stand by for a later flight with no penalty, but you may need to use the phrase “flat tire” to make it stick. Anyway…)

Passengers’ bill of rights: Slow but steady progress?

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I’ve really tried to avoid writing about the passengers’ bill of rights for a few days now. Really, I have.

But as much as I wanted to avoid The Story That Won’t Go Away for a few days, I realize I promised you a post which included some of your answers to my poll (now closed) regarding a bill of rights and its odds of becoming law.

As you may recall from an earlier post, a whopping 69% of you expressed the belief that, yes, a PBOR would become law. If the same poll were taken today, we might see an even bigger number.

Why? Just last week, United joined the club of airlines leaving passengers stuck on board a plane for hours. Seven hours, to be precise. Nice work. And great timing.

PBOR naysayers argue that this doesn’t happen that often, and that this is a case of over-reporting, not a major trend in the air travel experience. So let’s see the numbers! Well, okay, here you go.

An AP report provides some statistics:

To be precise, statistics show that passengers sat for two to five hours on 7,369 flights parked on taxiways before taking off in 2006 — not as rare an occurrence as some airline advocates argue, but still only a tiny fraction of the year’s total 7,141,922 flights. Another 36 airliners were stuck on taxiways for more than five hours after leaving the gate last year, according the Bureau of Transportation Statistics. Two more were parked for more than five hours after landing.

Fair enough, 38 total flights stuck for five or more hours is a tiny percentage. 0.0005%, give or take a few decimal points. But that doesn’t mean you shouldn’t do something about it.

Imagine a city mayor saying that there were “only 38 murders” in a city that year, so he was going to let the police force go. (No, I’m not saying that being stuck in a plane for hours is equivalent to murder. I’m just saying that a low rate of incidence doesn’t excuse inaction.) And besides, 7,369 flights were stuck on taxiways between 2 and 5 hours. That’s still a small percentage (0.10% of flights) but let’s put that in human terms:

Even if all those delayed planes only carried 50 people each, that comes to more than 350,000 people whose lives were put on hold for hours and hours. That’s big.

(As an aside, I’d love to see the numbers broken down by hour. 2 hour delays and 5 hour delays aren’t comparable, in my view. Anyway…)

So what’s happening? Bills have been introduced in Congress, and will be entering committee for debate. Now, separately, the Department of Transportation is getting in on the game, investigating airline policies, to see what went wrong and how it could be prevented in the future. We’ll see where it leads.

So what did you folks say when asked if a PBOR would pass? Roll the tape.

Yes. Democrats are in power, and the public is sufficiently pissed off. But the devil is in the details. I bet we see a bill that addresses delays, but doesn’t require cash payments.

Yes. The real question is, will any of the various bills of rights floating around actually fix the problem?

No. People have short memories and shallow pockets - won’t want to pay more, and the airlines will tell them that the bill would increase prices.

Yes. If this ever happens to me, I will pop the door and pull the emergency chute and let them arrest me. I’m sure the rest of my fellow passengers would put up bail money.

No. At the last minute, Homeland Security will come out and call this a security risk, and then it will die. Of course that will not be the truth, but welcome to America!

Thanks for these and the many other comments. I think you’re raising the right questions, and you’re appropriately cynical. The unbridled cynicism of the last comment makes me chuckle, but only because it sounds so plausible. Sadly, I think that might be right.

EU and US closer to an open skies agreement: What’s it mean to you?

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After months of impasse, the European Union and the United States have announced a tentative agreement on their proposed so-called open-skies treaty. Details are not yet fully released, but some key points are leaked:

The agreement, announced by the Transportation Department, would allow European airlines to fly from anywhere in the EU to any point in the U.S., and vice versa. For example, it would end restrictions on the number of airlines allowed to fly between the U.S. and London’s Heathrow Airport, one of the world’s busiest. Only four carriers — United Airlines, American Airlines, British Airways and Virgin Atlantic — now serve that market.

Putting aside the scheduling nightmare of adding more flights to Heathrow, this sounds like a good step for consumers. More competition, more point-to-point flights, and quite likely lower prices. Sounds good, right? But that’s not where the story ends.

In the past, an open skies deal was stymied by parallel negotiations over airline ownership.:

Another key aspect of the deal, described by a U.S. government official who spoke on condition of anonymity, would enable European companies to own as much as 49.9% — and in some circumstances, more than 50% — of U.S. airlines, up from the current 25% limit. Yet another provision could help Richard Branson’s Virgin Group Ltd. gain regulatory approval needed to launch a U.S. subsidiary, Virgin America Inc.

Virgin America must be fuming at that phrasing — “U.S. subsidiary” — considering their arguments that they’re as American as curly fries and NASCAR. But if it keeps them in business, they may wince, but accept it.

More importantly, this is a significant shift in U.S. policy, if it’s passed. (Congress would still need to ratify such a treaty, and that’s not guaranteed.)

Changed ownership rules are a double-edged sword. In principle, I’ve argued repeatedly that specific bans against foreign ownership are misguided patriotism, and that arbitrary rules like that keep valuable foreign capital out of American aviation.

On the other hand, the proposed open-skies treaty apparently makes it possible for trans-Atlantic mega-mergers, and outright mergers are rarely pro-consumer, since they tend reduce services and raise prices.

But trans-Atlantic mergers might be different: Yes, there might be service reductions and price hikes on the international routes, but the domestic markets on either side wouldn’t be affected much.

Besides, mergers need to be reviewed by federal regulators, regardless of whether they’re between domestic players or between a foreign company and a domestic one. So there’s — at least theoretically — an escape hatch if a merger looks likely to hurt consumers.

So, while the devil is in the details, I’m hoping that this treaty works out. Am I missing something? Hit the comments.

Related:
- Will foreign ownership of airlines mean lower prices?
- More on open skies
- Are open skies dirty skies?
- US-EU open skies treaty dead in the water, so to speak

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