Anyone else having flashbacks to 2000?

Fares are going up, sort of, but not in a healthy way. This time, it’s in the form of massively increased fuel surcharges. United put together a $25 each fuel surcharge for domestic flights, and the usual suspects have matched except for Northwest. They may match today, or it may fall apart, but I don’t like the trend this is setting.

No, it’s not the increase in fares that bothers me, but rather the piecemeal way in which it’s happening. All I know is that with fuel prices where they are, fares need to go up. They can do it with a fuel surcharge even though that seems like a waste of time. Why not just increase fares? Maybe there is a hidden reason that I don’t know. Are fuel surcharges commissionable? Anyway, that’s not the point.

As with most fare increases, this happens on higher structure fares. Take LAX to Chicago on United, for example. Right now there are sale fares out there for as low as $224 roundtrip. The surcharge doesn’t apply to these fares. In fact, the fuel surcharge doesn’t apply until you reach the “UA” fare for a whopping $437 each way. You think there are a lot of leisure travelers buying that fare? Nope.

So, it’s like we saw in 2000 right before the bubble burst, fares at the upper end of the spectrum kept going up while leisure fares stayed where they were. When the economy started going downhill, business travel started to drop off or at the least became much more cost conscious. That meant fewer seats were filled and less revenue was coming in the door. To compensate, the airlines had to fall back on the leisure fares, and those were still too low. Since the number of passengers dropped off, fares dropped so that people would buy more tickets. And that’s how the airlines started bleeding money last time.

People may say that we don’t need less capacity since planes are full, but it’s higher business fares that are propping that up right now. Planes may be full, but airlines will be losing money when they have to rely on leisure fares that they have been unable to increase. That doesn’t work.

I’ve finally done it. I’ve done my first ever podcast. Thanks are certainly due for Addison Schonland for convincing me to actually do it. I spoke with him yesterday about my Essential Air Service post earlier this week, and we talked a little more about the program.

If you have 13:29 to spare, click here and have a listen. As you might be able to tell, I was a little nervous in the beginning. It’s not so easy when you can’t double check everything before posting. But I think I came through ok.

If you’re interested in seeing other places I’ve been quoted outside of the blog, I’ve put up a link called Cranky in the News in the upper right side of the page. I’ll keep that updated as often as someone is crazy enough to quote me.

Thank you to everyone who headed over to Performancing to vote for me. I have now officially been crowned The Best Travel Blog of 2007*!

Why the asterisk, you ask?

Well, the editors over there decided that reader votes aren’t enough. They thought they’d come up with their own winners from the list as well. So I won the reader vote, but the editors voted for Gridskipper. I didn’t even take their runner-up spot – Gadling took that honor.

But hey, who cares what editors think anyway? You guys, my readers, voted for me, and that’s all I care about. Hopefully I can keep writing things that interest you. The good news is that in case I’m unable to fulfill my duties during the upcoming year, it’s very comforting to know that Travel Rants came in second, and they could easily have won this one.

Thanks again for your vote.

If you’ve ever questioned why better visibility around the airport is so important, take a look at this video depicting a near-disaster in Providence last year. (Thanks to Vanity Fair Musings via Don Brown at Get the Flick.

If that doesn’t make you crap your pants, I’m not sure what will. There are just so many problems here that could have been avoided with ground-based radar. It’s a foggy night in Providence so you can’t see much outside. The United pilots get lost on landing and incorrectly state their location as being near inactive runway 25R instead of active runway 25L. That’s bad enough to cause problems. Meanwhile, the controller really blows it. Despite the aircraft saying they were near Taxiway Kilo and hearing a plane fly right overhead, the controller doesn’t pick up that they must be nowhere near runway 23R and on 23L instead.

The hero here? Obviously the US Airways pilots. Had they departed as directed by the controller, they very well could have taken the top off that United aircraft . . . or worse. Fortunately they had the good sense to wait the whole thing out until everyone knew where everyone else was. Wow.

Coming from the capital of runway incursions here in LA, I certainly hope we can get some funding together for better coverage of what’s happening on the ground.

There had been rumblings about this for quite some time. Would British Airways make any moves designed to fight the all-business class airlines that have popped up over the last few years? Would they try to take advantage of open skies and fly between the US and Continental Europe?

The answer to both is now officially, “yes.”

Yesterday British Airways announced they were so enthusiastic about the open skies agreement that they were launching a new airline called . . . Open Skies. (Try not to groan too much.)

The idea is definitely an interesting one. Let’s start with the basics. The airline will be BA’s first attempt at using narrowbodies across the Atlantic. They will start with one 757 and expand to six over the next couple years. These planes will be configured in a three cabin configuration, similar to their 767s, with Business, Premium Economy, and Economy. They expect to start flying in June between either Paris or Brussels and New York/JFK or Newark, all subject to government approval, of course.

Now, let’s dig in. Unfortunately, I wasn’t able to make the breakfast in New York announcing the launch. Fortunately, I was able to speak with John Lampl, spokesperson for BA, and he was able to fill me in with some details that weren’t in the release.

First of all, it’s fairly strange for an airline to announce its grand entrance without actually knowing the routes. But apparently that’s all dependent upon slot acquisition. As we all know, JFK is a tough place to fly and BA will now have to hope they can get a hold of some slots for this service. If not, they’ll end up at Newark, where they’re confident they’ll be able to fly without a problem. Once they know the times they’re allowed to fly in the US, then they’ll choose whether they can start with Paris or Brussels. Once both those cities are up and running, they’ll look at Amsterdam, Frankfurt, Madrid, and Milan. According to John, they aren’t currently looking at any other cities in the US.

Another thing you’ll notice is that they are calling the cabins Business (instead of Club World), Premium Economy (instead of World Traveller Plus), and Economy (instead of World Traveller). That means, as you might expect, that it’s going to be a different product than on BA mainline. The odd thing here is that the product is definitely worse than mainline in Business, about the same in Economy, and far superior in Premium Economy.

There will be 24 Business class seats (at left) which basically will be the same as the last version of Club World before the recent upgrades. John said it will be improved, however, with “new colors, materials, cushions and some added bits.” Economy will have 30 new seats, but they will have a knee-crunching 31″ pitch, just like in BA’s World Traveller class. Ouch. At least it’s a small cabin of only 5 rows.

The big improvement here is in Premium Economy, and this is what appears to be competing with the all-business airlines like L’Avion, which flies between Paris and New York. Anyway, there will be 28 seats with a very solid 52″ pitch. John first said it would be like a domestic US First Class seat, but he quickly corrected himself and said that it would be better, especially with 52″ pitch. As you can see at right, it is much better than a normal domestic First Class seat. It also looks to be very competitive with L’Avion’s seat.

The oddest thing at first glance is that this is a completely different airline from BA. The above description might sound pretty similar to United’s p.s. service, and like p.s., this airline might deserve to be a different brand. But it’s going to be a completely separate airline with its own operating certificate. The airline will codeshare with BA. Passengers will be able to earn miles in BA’s frequent flier program, and they’ll have access to BA lounges. So why are they creating a completely separate airline?

There’s only one answer that makes sense, and that’s labor costs. With a new airline, they have to be betting that they can get cabin crew and flight crew to work for less. That may even be the only way this venture makes sense from a financial perspective, but I can’t imagine the current employees will welcome this with open arms. John says they’re currently in discussions with the employees.

I have to say, I think it’s a really interesting idea. If United were on top of things, they probably should have sent p.s. over the Pond by now, but they have other issues to worry about. This is a chance for BA to take advantage of open skies and start connecting the US with Europe with a relatively low capacity airplane that makes success an easier target. It also shows the great benefit of Open Skies. Healthy competition is good when it’s rational.

Personally, I’m a little concerned about the first 4 to 6 months when they will only have one airplane operating six days a week. (I’m assuming Saturday will be the day the plane rests, but I don’t know.) I asked what they’d do if that plane goes down for unexpected maintenance, and unfortunately I was told that they don’t know yet. According to John, “the objective will be to get the passengers to the destination as fast as possible.” That could mean putting people on another carrier or getting another plane from BA (potentially), but they just don’t know yet.

The next step will be to see how this gets priced. I would fully expect to see Premium Economy priced in the sweet spot to compete with airlines like L’Avion and Silverjet. It also wouldn’t surprise me to see Business priced competitively with someone like Eos. Air France clearly won’t be happy if the first route is to Paris, but they’ve already announced London to LAX, so they can’t really be surprised.

Let’s forget about the product for a moment here. I’m most impressed with BA’s PR push here. Of course they’ve gone out of their way to reach out to journalists and analysts, but they’ve also done a great job of reaching out to bloggers like me. I was surprised to even get an invitation to the breakfast, let alone an offer to speak with the new head of the airline, Dale Moss. (He ended up running late so I didn’t get the chance to speak with him.) The airline has even started a blog of its own on the website. They say they’ll only be updating it about once a week, and the setup can use some help, but it’s a start. It’s different from what I’d usually expect to see from BA, and that’s good.

I’m interested to see how this works for the airline. It could be a smart move. Even if it doesn’t work, it’s nice to see some creativity.