Fees, Fares and Skyway Robbery

Locations in this article:  Denver, CO Dubai, United Arab Emirates London, England

Plane at GateWhat a really wild, dark and bad week in travel, and it all starts with O-I-L. It’s just unbelievable.

A year ago it was about $60 a barrel and now it’s north of $133 and climbing. It is downright bad news all the way around on every single level you can think of, and not just travel.

When you think about it, it involves travel for everything: when you want to buy a bottle of soda, it’s going up 15 percent because it had to be trucked to you. Anything that you do that involves transportation is going to go up. And it has gone up.

Airfare has gone up again and again and again, and not just the official fares, but guess what? Surcharges and nickel-and-dime fees.

The front-page headline item in the New York Post this week when American Airlines announced that it’s going to charge $15 to check your first bag was
“Skyway Robbery.” They had another headline inside the paper that traveling by air now has turned into a “Fee for All.” But it’s just not funny.

Traditionally airlines have been reluctant to raise fares because if their competitor doesn’t match the fare, the raise doesn’t hold. So what they do instead is tack on all these other charges.

If you watched the Today show you saw my two-part piece on safety in the skies. One was about air safety and the second was about plane maintenance. Some real sobering facts out there about what’s going on in the airline business, whether it has to do with the FAA, the air traffic controllers, ground controllers, or maintenance either here or overseas.

When you think that we have the possibility of a perfect storm—a downward economy, aging fleets, and spiraling costs—the real concern is, is anybody going to be able to afford to fly? I’m not talking about you and me, are the airlines going to be able to afford to fly?

Air Cargo Gate PlaneComing out to my house on Fire Island you pass Kennedy airport. And what’s parked out there? The planes from Eos—the all-business-class airline that stopped flying a couple of weeks ago.

We lost MAXjet last year. And now, last Friday we got the press release that Silverjet, the 767 that flies between Newark and London-Luton and Dubai asked that its shares on the stock exchange be suspended. That’s a really bad sign. If they don’t get their financing, they can’t pay their fuel bills. And, even if they get their financing, who can pay their bills?

THE FINAL FRONTIER?

The fuel is killing everybody and speaking of which, let’s shift gears to Denver, Colorado, the home base of Frontier Airlines. Here’s an airline that filed for Chapter 11 bankruptcy and is still flying, but two things are happening to create a perfect storm for that airline.

One is that oil prices are going up. But secondly, it’s bad enough that they have to compete with United on that route, but they can exist, and have existed, in a two-carrier market, just like Hawaiian and Aloha did in Hawaii.

But then comes the third carrier. In Hawaii it was go! and they basically succeeded in driving Aloha out of business. And in Denver, guess who’s there now? Southwest Airlines. And they just announced increased service starting in August. This may be the catalytic moment that kisses Frontier Airline goodbye.

Airport Queue Line standingNone of us wants to see airlines disappear. Not just in the short-term pocket book issues, but the long-term ability to get where we want to go.

When an airline disappeared five years ago, maybe a low-cost carrier came to replace it. That ain’t happening anymore. These days, one community after another is finding itself with drastically diminished service, or no air service at all. This is just really bad news.

My advice is to keep flying. I get angry when I hear the term “staycation,” which means that people aren’t going anywhere. I’m not buying it.

We’re a nation of addicted travelers, it’s in our culture, we want to travel, we feel entitled to travel. We just have to figure out how to do it better, how to beat these guys at their own game, how now to be denied our right to travel. Even in the face of an unmitigated fuel disaster, we’re still going to find a way to travel.

There was a story today about how recreational vehicle sales are continuing to plummet, and I understand that. But guess what? You do the math, it’s not a bad idea to rent an RV.

For a family of four, you’re not required to pay exceedingly high airfare, high hotel costs and you’re not eating out every night. The only requirement is that you have to like each other.

From Peter Greenberg Worldwide Radio.

Check out more from Peter’s Travel Detective Blog.