High oil prices ‘destroying’ airline profits
High oil prices ‘destroying’ airline profits — The high oil price was “destroying” the profitability of the global airline industry, which was facing losses this year of $6 billion, its fifth successive year of net losses, Giovanni Bisignani, director general of the International Air Transport Association (IATA) said. He told the IATA annual meeting in Tokyo that the aviation industry’s fuel bill was forecast to jump from $61 billion last year to $83 billion in 2005 based on an average price of $47 a barrel for the benchmark Brent crude. (FT)
Battered euro is good news for US travelers — If you’re thinking about a trip to Europe, now’s the time to start booking it. Political upheaval in some European Union countries has brought the euro to a seven-month low against the US dollar, and economists and analysts say that’s one of the best things to happen for American travelers over the past year. (Boston Globe)
United reaches union agreement, avoids strike — United Airlines averted the threat of a paralyzing strike Tuesday when it reached an agreement in principle on a new contract with its largest union, the International Association of Machinists. Also Tuesday, a second union representing United’s aircraft mechanics announced its members approved a new cost-cutting labor contract with United, the USA’s second-largest airline. (USA Today)
US Airways argues for management ‘severances’ — US Airways’ survival plan of merging with America West may be in jeopardy if its managers continue to leave for higher pay or better job security, executives testified in bankruptcy court Tuesday. To stem the exodus of 20 to 40 managers per month, US Airways says it needs to offer severance packages to those workers as they work to complete the integration, which will cost many of them their jobs. (Charlotte Observer)
Brits are jetsetters, but they aren’t insured — Young people are traveling further and farther than ever before - but are also the most likely group to ignore travel insurance, Halifax has found. The insurer discovered that Britain is fast becoming the jet-set capital of the world, with British holidaymakers set to cover 248,000 miles in their lifetimes - equivalent to circumnavigating the globe ten times. (My Finances)
Denver wants to boost lodging tax — Denver’s tourism promoters are weighing whether to ask voters in November to boost by one percentage point the city’s lodger’s tax on hotel stays. The tax hike, which would increase the levy on out-of-town visitors to 14.85 percent, would raise $3 million a year to promote the city’s recently expanded convention center. (Post)
Worst is not over for United — United Airlines made huge headway Tuesday in obtaining the $700 million in annual labor savings it needs to emerge from bankruptcy this fall. The nation’s second-largest carrier also defused the immediate threat of worker strikes, which some experts say would doom the airline. Despite its progress, though, observers say United still faces turbulence ahead. (Rocky Mountain News)
Superjumbo will be delayed — Airbus, which said in April that the first delivery of its A380 “superjumbo” would be delayed, admitted Wednesday that deliveries to other early customers will also be pushed back by up to six months. Qantas said it will seek compensation for the lag. “We’ve now spoken to A380 customers and told them how they will be affected,” Airbus spokesman David Velupillai said. “The delays range from 2-6 months depending on the customer.” (AP)
Girls, girls, girls (on vacation) — Girls just wanna have fun, as the song goes. And what girls wanna, girls are gonna get as the travel industry caters to a new kind of vacationer: the all-gal getaway. From chocolate in rooms and massages at the spa to packages such as the PMS Special (pralines, martinis and shopping), hotels and resorts are putting together special all-gal packages heavy on spa treatments and “retail therapy,” said Joanne Panineau, a spokeswoman for Fairmont Hotels. (Herald)
Northwest cutting free magazines — In yet another effort to cut its non-labor costs, Northwest Airlines Corp. stopped carrying Newsweek, Glamour and other magazines on its planes and in its passenger club lounges on Wednesday. Cutting magazine subscriptions out of the budget will save the airline $565,000 in the coming year, said Northwest spokesman Kurt Ebenhoch. (AP)
Poll: Internet buyers are gullible — Most U.S. consumers don’t realize Internet merchants and even traditional retailers sometimes charge different prices to different customers for the same products, according to a new survey. The study, “Open to Exploitation,” found that nearly two-thirds of adult Internet users believed incorrectly that it was illegal to charge different people different prices, a practice retailers call “price customization.”
Airlines make ticket prices confusing — Flier, beware: airlines are increasingly advertising and listing their fares without including most of the taxes and fees. This month AMR Corp.’s American Airlines joined a few other carriers (mainly discounters) in quoting prices without including the add-on costs such as per-person federal taxes and airport surcharges. Instead, these extra costs — which can account for as much as 20 percent of a typical $300 round-trip domestic fare — are tacked on later in the ticket-buying process. (WSJ)
Correspondents: Skip Bowman, John Frenaye, Leslie Friedman, Mary Staley, Stephanus Surjaputra.