Monthly Archives: May 2011

New rules for the airlines!

Okay, I know I’ve been under a rock lately, but this is something I’m actually glad to hear about!

Apparently there are five new rules that went into effect April 20th, 2011.  You can read about them at this link.  In a nutshell, they are

  • If they lose your luggage, they have to refund your fees
  • All fees MUST BE CONSPICUOUSLY DISCLOSED!
  • Denied boarding compensation bumped to almost $1,300 in some cases
  • 24 hour grace period on tickets you buy
  • Tarmac delay rules now apply to foreign carriers

Of all of these, I think I like the 24 hour grace period the best.  Why?  Because we’ve all done it.  I’ve made a reservation on a carrier I don’t normally use, then for whatever reason, realize I’ve made a mistake.  They’re all too happy to charge you $150 for that mistake.  Well they can’t do that anymore – as long as you catch it within 24 hours.  Buy a one-way ticket on United, then realize that American will get you there on your original ticket without a change fee?  Cancel United without fees, etc.  It’s pretty awesome – for the consumer.  For the airlines?  Not so much…

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So Alaska Air Wants To Stay Independent

At least according to something the CEO just said.  He wants Alaska Air Group to be independent while others consolidate themselves out of existence.

I think it’ll happen, but there’s a catch.  And that catch is, there isn’t an airline CEO with the gumption to try and out-size United Continental.  Let me explain.

Back when Delta and Northwest went to merge, that was huge.  Until then, American was the largest US airline, followed by United, then Delta and the rest.  Overnight, Delta became the largest, with American shrinking to number two.  Then came United and Continental; honestly it was just a matter of when, not if, once Continental jumped SkyTeam and went with Star Alliance.  See, United wants that old “feeling” back, but it couldn’t get there with a merger with US Airways.  Honestly, the government did United a favor, saving them from an arranged marriage with the ugly stepchild of the big-boys.  Say what you want, but US Airways is lowest in the consumer ratings.

So who’s left that’s independent of the big boys?  US Airways and American.  US Airways is global, but like I said – ugly stepchild.  American did the honest and respectable thing by staying OUT of bankruptcy and keeping promises to their people and the world by being obligated to the debts they have.  And how are they rewarded?  By having a stock price that is in the toilet, and being so unattractive to the market because they decided the honorable thing of not filing bankruptcy.  (Remember United did it like THREE TIMES in a very short period of time!).  The only investment/takeover that they can even get is from some guy who’s now under investigation by the SEC.

So here’s the thing.  American needs to make themselves over, and US Airways needs to get out of the gutter.  I don’t think that they’d ever merge; it’s just too different.  But I do think, if one of the CEOs gets enough gumption to want to compete with the big guys, they’re going to go for not one, but TWO takeover targets: Alaska Airlines and Hawaiian Air.  Here’s why:

Alaska is big in the West; probably the biggest carrier up and down the West Coast.  They have 10% of their market in Hawaii; they went in to an already saturated market, established themselves, and are making a profit.  Who wouldn’t want to have those routes and that much liesure traffic that always seems to be there?

Hawaiian Airlines.  Sure, they’re up and down the West Coast to Hawaii, and they’re the dominant player there.  But they’re also making a major push into Asia.  And every airline CEO will tell you, if you want to grow, Asia is the market to tap into.  Hawaiian is doing just that.  But can they do it with a moniker of “Hawaiian”?  Not as successfully as if the name were “American”.  See where I’m going?

I would never see Hawaiian and Alaska hooking up.  But I could see them being taken over (Alaska probably through a hostile takeover, Hawaiian through some big wheel & deal).

So who knows…  The CEO of American has got to be itching to do something to compete with the big boys, and US Airways could do with a thorough identity makeover.  It could happen!

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