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American Carriers Cut Back on Pax Service

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American Carriers Cut Back on Pax Service

Old 23rd May 2001, 03:06
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Unhappy American Carriers Cut Back on Pax Service

Not that there was a lot of service to begin with...

This article blames labor and fuel costs, predicts more "consolidation".


LESS FRIENDLY SKIES: Airlines tighten seat belts
As profits plummet, perks for travelers lose their punch

Nancy Fonti - Staff
Atlanta Journal Constitution
Tuesday, May 22, 2001

At United Airlines, the grapefruit juice was the first thing to go.

No longer offered in United's cabins, the tangy citrus beverage is a casualty of a cost-cutting drive intended to save $200 million this year. Also getting the ax: linens in first class on some domestic flights, hot towels and one of the two movies shown on transcontinental U.S. flights.

"Higher labor costs, fuel costs and softening of the economy have forced us to take these actions to restore the financial health of the company and stability of the company" said United spokesman Chris Brathwaite.

Indeed, slackening demand for business travel and rising fuel and worker costs have big airlines searching for ways to nip and tuck expenses. In the first quarter, the four top U.S. airlines posted large losses, and in the second quarter Salomon Smith Barney expects labor costs to climb 8 percent and profits to fall by 50 percent for the industry.

Delta Air Lines, which reported its first quarterly loss in six years in March, is no exception.

If Delta pilots approve a tentative agreement next month, the related labor costs will shoot up $2.4 billion through the next four years. A new industry-leading mechanics contract at Northwest Airlines means Delta and others will likely raise pay rates for its mechanics this year.

At this point, most cuts in aircraft cabins would probably fly under the radar screens of all but the most seasoned fliers. After reviewing its first-class wine program, Delta found it could trim costs by using up all the wine in stock before launching a new collection. Delta recently also stopped serving Godiva chocolates in first class, in part to cut costs.

The company has delayed some technology rollouts, including its airport check-in kiosks. It has frozen hiring of nonessential employees and stopped paying for security guards in baggage areas to check passengers' bag tags as they leave. It's also stingier with advertising and promotions.

Delta also scrutinizes internal costs with a closer eye. The airline saved nearly $500,000 when it canceled a May leadership seminar for its top 1,000 executives, usually held at a downtown Atlanta hotel.

Department heads are charged with cutting back spending on outsourcing vendors, like printers and graphic designers, by 25 percent.

"Each of our divisions has burrowed down, identifying ways to improve our financial performance," said spokesman Tom Donahue. "That's something we practice continuously, but obviously in this economic climate, we are doing it in a more aggressive manner."

Northwest Airlines, which operates its main hub in Minneapolis, said it is retiring its aging DC-10-40 jets early, which allows the company to skip expensive heavy maintenance overhauls. The airline also is deferring its top executives' merit salary increases until next February.

The new attention to costs arrives as consumer groups and Congress scrutinize how carriers treat passengers.

Airlines, needing the blessings of regulators to merge and acquire each other, can't afford to appear to punish travelers.

"It's not a happy circumstance for the customer because service wasn't all that great anyhow," said Ed Perkins, former editor of Consumer Reports Travel Letter. "But it's understandable why the airlines are doing it, given their financial performance. They're in a real squeeze."

But there's not much left on the table to cut. Delta trimmed most of the fat off its service under Leadership 7.5, a cost-cutting program launched in the 1990s that gained the ill will of customers and employees alike.

"It's bare-bone service no matter what airline you're on," said Atlanta travel consultant Chris McGinnis. "They've become pretty good at keeping the fat trimmed off."

Further opportunities to trim are scarce because two largest costs, labor and fuel, are predetermined.

"There is really not much you can do," said Morgan Stanley Dean Witter analyst Kevin Murphy, who believes higher costs will spur more airline mergers.

"The only thing you can do to find meaningful economy of scale is to allow consolidation."

Airbubba is offline  
Old 23rd May 2001, 04:41
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American Carriers Cut Back on Pax Service

how can you cut back on nothing
there is no pax service in the u.s.
Old 23rd May 2001, 09:55
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Rogaine addict
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How about plastic bench seats, a big rubber floor mat and a couple of kegs of Meister Brau or Old Milwaukee to keep unruly passengers too soused to walk (they can always duke it out among themselves if need be). Once a day, the interior could simply be hosed out. (This would make for quicker turnarounds)
Old 23rd May 2001, 14:46
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Just wondering if anyone explored raising fares just a smidgen. It is said that air fares have decreased in real cost since the inception of aviation.
Gas pump prices jump daily, people still pay. Air transport could probably go up somewhat without too much effort. Price elasticity has an amount of hysteresis in it that may not have been fully utilised.
The real issue is, what is the customers' bottom line in terms of service purchased?
Has anybody tried a direct "frills" against "minimum frills" marketing exercise.
Let the pocketbooks talk. (Although it is possible we may not like what they say, at least we will know)
Old 23rd May 2001, 15:03
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pax domina
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As far as frills go, I'm certainly no expert . . . but as long as there are seats available within my time frame, I will be happy to pay the extra $40 or so to fly Midwest Express MCO-MKE. For this I get a direct flight (with everyone else except ATA you have to catch a connecting flight) with "one-class" service, a nice wide leather seat, lots of leg room, good meals served on proper china with metal cutlery (as I and a fellow pax remarked - seems more like you're at a restaurant when you hear the clinking ) and, quite honestly a better class of pax!

Don't know how they're doing overall, but the flight I was on was full, and once people have flown on them, they seem to get "hooked".

Now, if we could just do something about the weather curse afflicting my parents, which seems to make every other YX flight they are on have to divert to an alternate airport for more fuel . . .
Old 23rd May 2001, 16:31
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As a million miler with Delta and a million miler on all the other airlines combined- I can affirm that service has declined precipitously. The irony is all the airlines rail against Southwest saying people will pay more- yet they are becoming more like Southwest. Frankly, if you can tolerate the boarding process on Southwest the service there is the same, if not better, once your airborne.

Add in the boarding process for Delta Medallions getting onboard and the difference is less (although I must admit, being medallion level, I'm part of the problem-not the solution.

I find the passengers on Southwest to be more pleasant overall- I think for two reasons- you have less elitism-so none of those self absorbed ultra-platinum a***oles who feel they deserve the world and second, the pax on Southwest have lower, yet maybe more realistic, expectations- the patience level is higher.

That said, if I'm flying across the U.S., I'd rather make one stp, than 2-3.

Does this qualify as a rant? If it does, I think it's my first. It's feels rather good, but will I get billed for therapy?

Fly safe.

Old 23rd May 2001, 17:25
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I note that AA not specifically mentioned in article. Guess their move to remove rows in Economy, to make for more leg room, has found favour. Will check out this weekend when I fly to LAX!

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