NEWS
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TRAVEL
Airline News Isn't Good
By Judi Janofsky & Rich Steck
Where To Go Next
With the price of fuel continuing to rise and mergers looking more and more efficient for airlines, industry news doesn't look good for either the consumer or the airlines.
Job Cuts
Last week, United announced it plans to lay off 950 pilots "as it prepares to cut domestic capacity to offset fuel prices." United follows steps taken by American Airlines last month when it said it would eliminate 1,000 jobs and in March by Delta which said it would cut 2,000 jobs through voluntary retirement this year.
Mergers
Delta and Northwest's planned merger seems to be moving onward even after the U.S. Justice Department requested more information on the deal. Delta says it would produce more than $1 billion in cost and revenue improvements with a merger. That's a pretty big incentive. Worried about further job cuts, Delta's pilot union last week backed the tentative Delta-Northwest pilot labor agreement, a major hurdle until now.
Pricing
To offset the increased price in fuel, airlines are reluctant to tack on additional fuel surcharges so they've turned to nickel-and-diming their passengers instead. First it was a fee for your second bag. Now at American and United there's a fee for your first bag. Which means more and more passengers are going to try to stuff bigger and bigger bags in the overhead bin, causing flights to be even more delayed than they now are. Other airlines are choosing other methods to increase revenue. Delta is charging for food and U.S. Airways just announced that passengers are going to have to cough up $2 for a soda. Both of these airlines clearly haven't thought these ideas through. Have they not noticed that every concourse in America now has a Burger King, Pizza Hut or McDonald's selling food and sodas for as little as $.99?
Good News?
Is there any good news within the industry? Not much but here are a couple of bits we came across -
-- A new service has been launched to help frequent flyers keep track of their bonus miles. The free service from www.placely.com, a travel social networking site, will allow flyers who are members of several different loyalty programs to view all of their accumulated miles in one place.
-- American is offering bonus frequent-flyer miles to passengers who book flights to Paris from New York by August 25. Customers can qualify for double and triple AAdvantage miles on trips to Charles de Gaulle Airport from JFK. Double miles will be distributed for the purchase of Full-Fare Economy Class tickets, with triple points available on Business-Class flights for travel completed by September 1.
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