Friday, May 23, 2008

Airline machinations

OK, here is my weekly occasional first roundup of what's happening in the airline industry.

Delay insurance

First up is a story about something airlines used to provide for free (free WSJ Digg link). All right, granted airlines didn't used to provide free delay insurance, but if you were delayed you'd get free meal vouchers and a free hotel room. The basics are as follows:

After last summer's many travel hassles, travel-insurance companies are pushing low-cost policies that include "delay insurance," which pays for hotel rooms and meals if you get stuck. Delay insurance is included in some policies that offer protection like refunds if you fall ill. Cost: Usually less than $50 when flying on inexpensive domestic tickets.
While these policies have long been offered by the travel-insurance companies, the airlines are getting into the game, with Air Canada leading the way.
And airlines are now getting into the protection game, sensing they can make money off the disruption they sometimes create. Air Canada, an innovator in pricing chemes, has launched a new "travel assistance" service that provides hotel rooms and even airfare on rival carriers if you pay $25 to $35 extra per one-way flight when you buy a ticket.


Buying the "On My Way" service, which began three weeks ago, gets you a phone number to call specially trained Air Canada agents who can book and pay for hotels, find seats on other Air Canada flights or book competing airlines if Air Canada doesn't have an option to offer within two hours. Air Canada, a unit of ACE Aviation Holdings Inc., will pay for rental cars if driving is faster, and even make pre-paid meal reservations.
I researched the On My Way service on the site. (Their description of the benefits are here.) The $25 price point is for flights 1000 miles or less, and the $35 price point is for flights over 1000 miles.

Good customer service used to be free!

I remember (and it wasn't that many years ago) when you used to get the hotel room, paltry $10 meal voucher and rebooking for free. I missed a connection in Cincinnati for the last flight to Salt Lake City that day because of a weather delayed New York to Cincinnati flight. When I got off the flight in Cincinnati, the airline had a table set up in the terminal for people who missed their connections. They had the hotel and meal voucher, and ticket for the next morning's flight waiting there for me.

On another occasion I missed a connection in Dallas to New York for the last flight because of weather. The process was a little more painful (no table set up for the passengers, it was a long wait in the customer service line), but I still got the hotel and meal, and even an upgrade to first class on the next morning's flight. The column does delve into this:
When airlines were healthier financially, they often did voluntarily pay to accommodate stranded customers. But for several years now, carriers have more often than not told travelers they are on their own when they get delayed overnight because of bad weather or other travel problems -- a cot in the airport or a hotel room on their own credit card.

Airlines do have to pick up the cost of hotels and provide a few dollars for meals when travelers get stuck somewhere because of an airline problem like a maintenance breakdown. But they won't pay if the problem stemmed from factors out of an airline's control.
American's baggage problem

Next is a good discussion on American's new policy of charging $15 to check your first bag (free WSJ Digg link)! This story has been getting a lot of coverage. Since this came out on Thursday, this column seems to be a special non-Tuesday Middle Seat column (the usual day of publication for the Middle Seat column).

Personally, I'd rather they just charge me a higher ticket price up front. I don't want to have to be fumbling with paying by credit card to check the bag at the counter, or be stuck in line while morons in front of me struggle to find their credit cards to pay this new fee.

There were a couple other things I wanted to talk about, namely the greater propensity for airlines to outright cancel flights and the projected increase in average ticket price, but I can't find the supporting articles right now, so they'll have to wait for another time.