Monday, December 16, 2024
Senator Hawley’s Airline Bill:
Without Efforts To Get Clear Facts,
The Public Cannot Be Served

Touching once again on the December 4 Senate hearings on airline junk fees.

Overall, a Senatorial disgrace.

Now, one senator is proposing legislation based on facts not in evidence across the airline industry. Angry rulemaking is bad rulemaking.

As I covered in the analysis and review of that two-hour hoedown, The important take away of that event was that the public really doesn’t have professional, informed oversight of airline operations and policies.

Truth be known, the airline industry itself, at least most of the players, would not have a problem with solid upfront and informed oversight. But what is most unfortunate is that these hearings were not oversight so much as they were attempts to take the airline industry out behind the woodshed to account for any number of real and imagined service failures.

In this case, for those of you out in TV Land who have spent the time watching the hearing on YouTube or whatever channel, you’ll instantly find that it opened with not the attempt to get oversight information, but with a laundry list of convictions to which the airline industry was intended to confess to.

What was revealed in those hearings was a panel of four senators who decided before the gavel first fell that the airline industry was going to be brought to justice.

No problem with that if the content of the questioning was open instead of being accusative and attacking from the start.

The frustration of these four  Congress people has now generated a proposed bill in Congress to throttle airlines. In particular,  a bill proposed by Senator Hawley of Missouri that would prohibit all airlines from paying their employees a bounty to collect airline fees. This is just one more indication of how far off the mark the current Senate oversight really is.

Senator Hawley’s intent is positive, but his facts are woefully short. He is implying that all airlines pay their employees a piece of the action when they can catch a recalcitrant evil passenger attempting to skirt airline rules. He has taken a broad brush and is misinforming the public regarding airline policies and procedures. Only one airline is doing this, and it carries a small percentage of air travelers.

(As an aside, Hawley still has anger over an event on American, back in Covid days, where his wife was threatened by a flight attendant of being “blacklisted” unless his 5-year-old wore his mask properly. That was indeed a dark period for air service when cabin crews were tasked with enforcing this stupid rule and did so often very thuggishly. He has a right to be ticked, but that was then, this is now.)

As will be covered probably in the next Touch & Go™ vision letter, we’re going to go over some of the things we see where airlines can shore up their public perception. First up: these are your customers, not petty thieves or vermin gate lice. Second, the customer isn’t always right. But it’s the customer that decides what airline to fly. And today word of mouth is a critical channel of information.

One other little outcome of the December 4 hearing was that at least two airlines had a difficult time clearly explaining what their fee program was and how it was administered. They were unprepared. That led to an enormous amount of anger on the part of the four senators on the panel. It played to the further misconception that airlines withhold quoting fare information until after the booking has been made. Flat not true, but apparently it’s okay in senate hearings.

In the attached deck – which probably most of you have seen – there is a display of a random first page web booking, in this case on Spirit. Completely contrary to the misinformation spouted by a couple of these senators –  in particular Senator Hassan of New Hampshire. She literally accused the airlines of first collecting personal data, and then deciding what the fare will be.

Complete dishonest hogwash.

That alone negates any credibility of that December 4 panel. Oversight cannot be done by people who are angry on the warpath and intentionally spout stuff that is untrue. Hawley, pull your bill off the table until you get facts, not angry hyperbole.

The airline industry has a big challenge ahead. This latest hearing is just the start, and the industry needs to manage perceptions of air travel. To be clear, American, Delta and United were ready and prepared, albeit their opening comments were completely ignored by the panel.

That means that for the time being, airlines have angry gate guards, not oversight.

If you haven’t seen our factual review of the December 4 hearing, click here: Senate hearing Dec 4

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Monday, December 8, 2024

The Senate Junk Fees Hearing:
It Revealed Another Outrage On Flyers

The media stories – both inside the aviation industry and in mainstream channels – have reported extensively on the December 4 hearings in the Senate regarding airline “junk” fees.

It was based on a report done by the subcommittee:

Senate Permanent Subcommittee on Investigations Releases Majority Staff Report Slamming Sky High Airline Junk Fees

The resulting hearing generated headlines like:

‘Junk Fees’ or ‘Unbundling’? Airlines and Senators Battle Over Added Costs

Airlines make billions charging ‘junk fees,’ congressional report says

Did Anybody Fact-Check The Watch Dogs?  The question is whether the folks in the media even bothered do a professional review of what the subcommittee’s report contained, and worse, even bothered to fact check it as well as what was stated at the subsequent hearings on December 4.

We did.

What was discovered was more that the millions in fees airlines have collected. Something much more damaging to the flying public and the USA consumer.

Anyone who has any clue about the airline industry and has watched and fact-checked the comments made by the subcommittee could not but conclude that these supposed protectors of the public in some cases actually concocted findings that had no connection with reality.

Yes, there are issues with airline service. But that demands oversight that is informed and has complete factual integrity. Certainly, the airlines involved can handle themselves, and are fully cognazant of the political and other sensitivities that must be considered. Overall, the airlines at this hearing were direct, upfront and delivered a stand-up performance.

Regardless of what is going on in airline service, the nation has an additional problem: oversight that is riddled with ineptitude passed off as protecting the public. Blumenthal and his committee have the responsiblity of being fully knowledgeable of the subject matter. It is clear that they failed that metric.

Get ready. Tumble to the fact that just because it comes from a senate subcommittee it is not above the need for fact-checking. Click Here.

Note:  The comments and viewpoints herein are specific to BGI. We do not have any client relationship with the airlines involved in this hearing, and has had no contact with these companies or any industry organizations such as A4A.

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Monday, December 2, 2024

Airline Seat Junk Fees.
Gee What About Federal Junk Taxes?

One of the things that we hopefully will see ending with the new administration is the use of the airline industry as a convenient political soapbox.

Anybody remember the press conference circus side show put on by Buttigieg and Biden a couple years ago? The one where they babbled on about how airlines abuse passengers, in some cases stating airline policies that don’t exist. Then there was the claim that airline websites routinely hide add on fees until after the flight is booked. Truth took a holiday.

Congress Criticizing Airline Fees. Like The Mob Denouncing Extortion. Now, a Senate committee has uncovered the outrage that airlines have gouged passengers something like $1.3 billion dollars for “gotcha” seat fees each year.

The report also accused airlines of avoiding paying taxes on this income by categorizing them as non-taxable.

Airline executives are being summoned to Washington to explain themselves at impending hearings. Or, more correctly, to provide a carefully orchestrated three-ring circus where the politicians will posture themselves as protectors of the public from evil fat cat airlines.

It’s Mostly Shady Political Theater. But The Airline Industry Facilitated It. This seat fee show is an outcome of the accepted belief that airlines simply gouge passengers unfairly to choose a specific seat in the cabin. This is the genesis of the lie – and it is a lie – that airlines were imposing extortionate fees on families to sit together.

But it’s the airlines’ own systems that generated that belief. Take a look at a seat map displayed on one major airline website. The economy cabin is shown with two sections side by side. The one on the right is typically behind the one on the left in the cabin.

The seats in the first section are defined by the carrier as being “choice” or better, somehow. Now this illustration does not include the economy section where fees are accompanied by more leg room or other service enhancements. In effect, the seats in both the sections shown are all alike. It’s just the ones closer to the front of the plane have fees added.

Now, the average consumer might find in the booking process that there are no window or aisle seats left in the non-fee section. Or, that there are no two seats together when more than one person is traveling.

So, they can simply let the airline assign the seat sometime just before departure, somewhere in the cabin with what’s left. Probably a middle seat, with passengers traveling together separated apart.

Or, for the folks wanting to be sure to sit together, they can often avoid this uncertainty and find adjacent seats in the “choice” section. And pony up a hefty fee.  Maybe $30 or more per seat.

The fact is that in this system, everybody had to pay for such seats, including the two business travelers going to Chicago and the family of four who were booking the flight three days out.

That is where this cause célèbre of family fees came from. There were no such specific fees aimed at families, as some ethically challenged consumerists and politicians have loudly claimed.

But it is legal, and airlines have the right to do this. The question is how the airlines with such systems can avoid these charges looking like fear fees. Pay now or the visual comes to mind of 26E between two former sumo champions.

That will be the challenge facing the airline executives who show up to be shooting practice targets before this Senate Committee.

Raging Hypocrisy. Oh, as far as airlines “avoiding” paying tax on these fees, the media reporting this might want to do some thinking before they put pen to paper. Airlines don’t pay taxes on fares, and they wouldn’t if they were imposed on ancillary fees. The passengers would pay them. So, the oh-so-concerned Senators who want these charges taxed are proposing yet another junk fee for travelers to pay.

Goodness. And politicians accuse airlines of junk fees? This defines arrogant chutzpah. Take a look at the laundry list of sloppy add on taxes consumers get squeezed for when they travel.

These intended hearings might be a good time for airlines to come in with their fact-pistols blazing.It’s congress that’s got most of the hidden fees.

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Monday, November 18, 2024

Pre-Observations For 2025

Some Random Points To Ponder.

Just remember that aviation planning is predicated on hard data and futurist thinking.

Not much of that comes from what is

An Airline Sector Constricts. The (former) ULCC segment will continue to shrink capacity. The main foundation of this sector – “ultra low” costs – is evaporating rapidly. That means the ability to further mine discretionary leisure traffic will continue to atrophy. Attempts to break out into mainline traffic capture are iffy at best due to low frequency and low brand identity. The NK bankruptcy is not in a market bubble.

Warning: International Upheavals. While the industry may be focused on the effects of what’s going on in the Middle East and in the Ukraine, the real lit-fuse to chaos is in China. Or, the potential for military action initiated by the criminals running China. Some reading of the tea leaves indicates that the current leader, Xi Jinping, is losing grip on some sectors of his Mafia-like party. Military action, even if just at Nationalist-held (Taiwan) Kinmen (Google it, if you must) will shatter Trans-Pac air demand.Continue reading→