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US Airways cutting movies, charging to sit in front

You've been enjoying yourself too flying US Airways flights, haven't you? No more frivolity. The US Airways experience will make the Chinatown bus look lush. US Airways Group (NASDAQ: LCC) announced these latest passenger torture methods: no movies, no curbside check-in at 34 airports -- and that's on top of recent plans to charge $2 for cokes or coffee. You'll pay extra to use some of your frequent flier rewards, an additional $15 for checked bags and $25 to book on the phone. And if you want a window or aisle seat in the front of coach -- 16% of coach -- it'll cost you $5 to $30 more per segment.

The stock is down about 5% today on these grim announcements and word that the airline is cutting 2,500 jobs (and perhaps on oil prices). It had already planned on cutting capacity, though it had positive news yesterday, with good scores for being on time. US Airways says the current new fees will bring in $250 to $300 to $400 million. I don't think price-conscious passengers are going to remain oblivious to the idea that an airline ticket is not the real price anymore. It'll be like renting a car -- you know that it's really going to cost you twice as much as the rate.

US Airways says it is cutting movie service because the 500-pound machines cost them $10 million in fuel and other costs. It'll keep the movies on flights to Hawaii and overseas. The real problem with the big airplane screens is that nobody is renting the headphones anymore. I don't remember the last time I watched a movie -- or even one of those schlocky sitcoms the airlines seem to love -- on a big airplane screen. We all want our own entertainment -- and bring it in the form of MP3 or DVD players. In an effort to appeal to the broadest audience, the industry has bored everyone. Reuters says that a cut in inflight movies -- if it goes further -- could hurt the entertainment industry, which makes roughly $240 million a year from airlines.


Continue reading US Airways cutting movies, charging to sit in front

Virgin America to introduce 'premium economy class'

USA Today's Ben Mutzabaugh had an interesting Q&A session with Richard Branson, founder of the Virgin Group and Virgin Atlantic Airways, on last week's inaugural flight from New York JFK Airport to San Francisco. Reading Branson's description of the new Virgin flights made me want to book a flight to San Fran immediately.

What interested me from the start of the interview was one of things that Branson said would set Virgin America apart from the other U.S. carriers, something he planned to introduce called "premium economy class." He described this as seating that would be "for people who want more legroom but can't afford first class." Mind you that the most expensive first-class tickets Virgin America has right now are approximately $650, but who wants to pay that for a flight when you can have "premium economy class?"

A quick check on Virgin Atlantic's website, because Virgin America has yet to initiate this service, and they show me that premium economy seating has 38 inches of leg room, compared to the standard 33 inches in economy seating, and a seat width of 21 inches. This is has to be a dream! Once this "premium economy class" comes to Virgin America, I'm certainly going to think of using them for my next flight. More space for less money, it's an amazing concept. I just hope they can last that long in the States with Northwest Airlines (NYSE: NWA), AirTran (NYSE: AAI), Southwest Airlines (NYSE: LUV), US Airways (NYSE: LCC), JetBlue Airways (NASDAQ: JBLU), United Airlines (NASDAQ: UAUA) and all the other U.S. carriers competing for the same ticket.

Really, really no-frills flying

Sometimes an innovation that makes perfect sense economically will get blasted by consumers for emotional reasons that have more to do with perception than anything else. Take flying on airplanes for example, where consumers want low fares but also grumble about stuff like having to pay for the peanuts. Irish carrier Ryanair (NASDAQ: RYAAY) has ultra-low fares, but also little in the way of free amenities: Seat assignments, checked bags, early boarding, and food all cost extra.

SkyBus Airlines will be trying that approach here in the States, with fares starting at as little as $10. It's going to charge $5 per checked bag, and will even sell the right to have your company's logo on its planes (I nominate BloggingStocks).

SkyBus's Rules of Flying sound like they were written by the Soup Nazi from Seinfeld: Bring cash for food, bring a book, don't call us, and don't be late.

Here's what I like about this airline: You only pay for the services you want. People might like the idea of free peanuts and free baggage checking, but, Economics 101 folks: Nothing is really free. Instead of having every passenger absorb the cost of free peanuts, why not just charge the people who want them? It makes perfect sense to me.

We'll see how SkyBus does. It might take some getting used to, but I have to think this is the future of the airline industry.

Booking plane tickets online? Don't make my mistake.

Last month I traveled with my fiancee to a friends' wedding in Buffalo, New York. We purchased tickets online nearly two months in advance so we didn't have to worry about inflated prices or lack of seats, but to my surprise, it wasn't the price I had to worry about -- it was my seat, or lack of it.

After waiting on line after line to have my luggage and shoes inspected by the most qualified inspectors at LaGuardia Airport, we walked to our gate only to see the place mobbed by people, like myself, who just wished they could sit down for five minutes in those uncomfortable seats -- but every one was taken.

Standing at our gate with the rest of the crowd, I realized the e-tickets we purchased nearly two months prior lacked seating numbers, forcing me to stand on another line.

When I finally reached the attendant at our gate, I informed her of our situation. Her face did all the talking.

Continue reading Booking plane tickets online? Don't make my mistake.

FCC drops plan for phones on planes :)

The fact that serious thought was even given to doing this makes me angry at our public officials over at the FCC. But, mercifully, they have dropped plans to allow passengers to use cell phones on airplanes -- as if crying babies and loud conversations weren't bad enough.

The official reason is that it was not clear whether the on-the-ground networks could have handled the calls, but the FCC did admit that the thousands of angry letters it received from frequent fliers may have impacted the decision. If I'm at a mall or restaurant and someone near me is having a loud conversation on a cell phone, I can get up and leave. But what if I'm flying from Boston to San Fransisco and some guy in a suit sitting next to me has a four-hour conference call, followed by a session of baby-talk with his infant daughter, and then proceeds to engage in a "romantic" conversation with his extramarital lover. Stop the plane, I want to get off!

If they ever do allow cell phones on planes, I will make a substantial wager that the number of in-flight confrontations, fistfights, and shouting matches will at least double. Honestly, is there anyone here who wouldn't be annoyed by someone sitting next to them talking on a cell phone?

Flying home just got a little more expensive

For those of us getting ready to start looking into flights for the upcoming Christmas season expect to pay a little more for those flights home.

In a move to combat high fuel prices United Airlines (NSDQ: UAUA) came out today and announced higher fares on some of the routes where they are facing low-cost competition such as Chicago to Dallas and Atlanta, and Denver to San Francisco, Los Angeles and New York.

Two other airlines also joined in the rate hikes. American Airlines and Delta have decided to match today's increase but Southwest Airlines Co. stated that they have absolutely no intention of raising their rates. As a result United will leave rates unchanged in the routes where they compete directly with Southwest.

While no one likes to hear about rate hikes, in this case I think it is the right move for United Airlines to take. Since the company started trading again back in February the company has had a roller coaster ride but the last couple of months have shown strength and it is probably the right time to take a chance on losing a few customers in order to fight high fuel prices. The question is, as always, will the market endure the hike? Credit Suisse airline analyst Daniel McKenzie seems to agree with the move stating the hikes are a "a sign that underlying demand trends remain strong."

Here is a chart for United since getting re-listed earlier this year.

Symbol Lookup
IndexesChangePrice
DJIA+20.0310,246.97
NASDAQ-2.982,151.08
S&P 500-0.071,093.01

Last updated: November 10, 2009: 09:39 PM

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