Airline Industry Interview with Scott Mayerowitz
Nomadic Matt: Tell us what you do for AP
Scott Mayerowitz .: I write long-form enterprise and investigative stories about the airline and travel industry. Some are fun features - such as where you end your lost luggage - and others are much more serious, such as an in-depth look at how the airlines are combating rising fuel prices. I once spend three days around the country with some frequent flyers fly, which chartered a jet. That was an unforgettable experience.
I talk a lot about the consumer side of the trip. As an airline reporter, what are three things that people on airlines from business point of view may not know
1: How hard is it, is the cost of a flight to find out. Many people book now tickets for Thanksgiving and Christmas. The airlines have no idea what the price of oil will be then, but you have a guess and set prices accordingly. Fuel is about 40 percent of the operating budget airline. If they guess wrong, they lose a lot of money
. 2: $ 5 Hike not really people flying stop in ticket prices. Therefore, all fees and add-ons are we are seeing today. If rates are too high, people will not fly. If they are too low, airlines are not making money. By adding on all charges the airlines may make rates look low and still make money
. 3: do not get baggage fees, taxed by the US government. Airlines pay based on ticket price by 7.5 percent excise tax. This is in addition to the $ 3.80 per domestic segment tax - the tax covers one takeoff and one landing - and the 2.50 security fee September 11 $ for every time you board a plane. However, the government is not in the $ 25 to collect them from the control Airlines each way for your suitcase. The airlines get every penny to keep them, so they are an incentive to increase fees on fares.
Where do you see the industry going in the next few years?
I think we begin, a gap between the airlines to see which business travelers and those who meet to offer to vacationers. This gap is likely to grow in the future, how many families priced obtained from the older, legacy airlines flying. The cost of flying in the middle of summer vacation is to force some families to go to other destinations. Airlines have by reducing the number of domestic flights profitable they will offer. I do not see that reverse in the foreseeable future.
Why costs are rising so much? You said that oil represents 40% of the cost of their budgets, but why is it that the airlines can not only seem to make money? As Warren Buffet said, "If a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville."
Let's start with fuel. Airlines were for fuel in 00 to 80 cents per gallon to pay ($ 1.07, when adjusted for inflation). Today they average $ 2.96 per gallon. US airlines burn about 16.4 billion liters of fuel per year, so that every change has a dramatic impact. partly because the passengers have to bargain prices then used the economic downturn after 9/11 and - not increased fares as quickly. The average round-trip flight cost $ 339 in 00 (adjusted for inflation). Today it is $ 373rd That's a 10 percent increase, but fuel prices have shot 177 percent over the same period. US airlines flying burn an average of 22 liters of fuel per 1,000 miles per passenger. At $ 2.96 per gallon, airlines currently spend $ 322 per passenger just on fuel for a 4,950-mile transcontinental round trip. Include in the salaries of flight attendants and pilots to purchase plus the cost of a new aircraft, and you will quickly see how losing the airlines money. That's why we see all these baggage fees. That and the airlines have cut flights unprofitable. You no longer need the largest route network, but only the most profitable
If I knew the answer to this question? I'd work on Wall Street. Or maybe winning big at the casino. But my sources generally think a deal will come together at some point. They just are not sure if it occurs before or after the US will happen from bankruptcy protection and what form would such a combination. But that does not mean it will happen. Both airlines CEOs have said, could survive as a stand-alone carrier.
Why?
The reason for the merger need be. The combinations of Delta with Northwest and United with Continental so created major airlines. The only way that American or US Airways offer a large enough route network to compete and secure business is by merging. Americans bring some lucrative international routes to the deal. US Airways has a strong domestic feeder network, mainly along the east coast, which would feed in these flights. Why not? Now, each airline has its own unresolved issues. Merging could only add to these headaches. Moreover, I do not see necessarily give up their jobs, CEOs of American or US Airways, and one of them would be likely to go in a merger.
How do you think the 787 will change the passenger experience flying on that?
I was the first on 26 October 2011 at the 787 commercial airplane, and I must say, it is an impressive aircraft. The windows are larger. Thus, the overhead bins. There is more moisture, and the cabin is pressurized to a comfortable level. A higher ceiling - at least the perception of - reduces claustrophobia. That is, each airline controls how much passengers get legroom. Some are more generous than others. The real change with this level is the fuel savings, and that will open new nonstop routes that passengers can really benefit
is Let's face :. People hate really fly. I recently read that while consumers complain about the experience, they shop solely on price and therefore have to change airlines no incentive. What do you think about this statement?
The industry trains us for the best deal to look and has done a miserable job of differentiating their products to the public. This has happened is located by the growth of Internet searches, where the only variable is the price, and evil by decades tariff wars who have trained us that the price is what matters most. Even if today you see ads, Airlines for the most part focus on flight. It can only be distinguished in the front of the cabin, where they try to service and product. I do not see that changing in the foreseeable future.
comes on the other side that Virgin America has done really well, so that customers are clearly willing to pay for a pleasant flight experience. Does this mean that there is hope for the future?
Virgin America has pumped a lot of money a different experience to offer in their planes. You do not have to make a profit. If they made money, I would say, there is hope for the passengers. But until that happens, I do not see follow many airlines.
The passengers need to remember that they speed at 500 mph around the world. Do not let us perspective that lose. But yes, flying is be quite unpleasant for many. First airline credit cards can help with the fees and ensure that you are not the last person to board a plane. might pay a few dollars for more legroom for long flights worthwhile. Otherwise, wear comfortable clothes, some water and bring a snack, smile and be kind to your fellow travelers. We are all in this together.
What would you say are the biggest mistakes consumers when dealing with airlines?
passengers often feel that the airlines they are. In fact, the airline workers probably missing the correct information. You'd be surprised how difficult it to know for a person with an airline, what is happening outside their small splinter surgery. If I have a delay, I always look for alternatives and they offer to the airline agent to help me. I expect never to know of all routing options or alternative airports that I am ready to fly in to.
What are three tips that you would anyone in relation to the fly?
1 Have your papers in order. That is, to know your confirmation number, sometimes called a Passenger Name Record. This is how the airline followed your ticket. Make sure that the number that you have one of the airline is not for the travel agency, which often have their own tracking numbers. It also helps to have your ticket number, usually found a 10-digit number on a receipt, have decided as a flight. You may never need it, but if there is a problem, these numbers will help speed you. To a resolution
2: Print your itinerary and put it in your luggage. Bag tags receive all the time ripped off. If your luggage is lost, in your pocket is personal information that will help to accelerate his return. By including your itinerary, the airline knows exactly which flights you are and how to find you
. 3: Insert a small pocket in your carry to valuable items. More and more passengers are forced to check baggage at the last second. If this is the case for you, the smaller bag can you even take, valuables and other items with you on the plan must Medicine.
Okay, last question. Let us break out your crystal ball. Where do you see the domestic US market in five to ten years go? No kid aircraft? Payment of fees for everything? Mergers? Fewer options? Higher ticket prices? Take a guess!
We have been fewer opportunities for travelers, thanks see mergers. Other small towns are losing air service - or it is unaffordable for all but those are expensive to the company expense accounts. This means that people get into remote areas 150-0 miles on a plane to have to drive. For all others: higher fares. That's a given. The only question is how high. At a certain point, people will fly trap. It is less vacation and more business will take over videoconferencing. We could see low-cost carriers fight for tourists and the legacy airlines fight for business and international traffic. Oh, and it could be mobile phones in aircraft. But that's a whole can of worms that I do not want to open.
At Scotts products to the aviation industry, read his side on the Associated Press to read, and you can find him on Twitter.
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