Airlines let passengers hedge against airfare increases, for a fee

After the introduction of additional fees for luggage, extra legroom seats, and in-flight catering, to name a few, a new category of ancillary revenues seems to be taking hold. A growing number of airlines are offering passengers a paid option to increase or descrease their exposure to rising ticket and fuel prices. For example, U.S. low-cost carrier Allegiant wants passengers to consider a variable-price ticket, where the final fare could rise or fall based on the cost of fuel, while Vueling, Air France, KLM and Continental offer customers a paid option to ‘freeze’ their fare for up to 14 days when making a booking.

Allegiant ‘variable fuel fare’
Las Vegas-based low-cost carrier Allegiant has come up with a new way to share the pain of rising oil prices with passengers. It has filed a request with the U.S. Department of Transportation for permission to sell a new type of flexible ticket. The purchase price would be less than a normal ticket’s, but it could subsequently rise or fall (with the customer either paying more or getting money back) depending on oil-price flucutations between the purchase date and the flight date. The increase would have a maximum that would be clearly disclosed. Allegiant will continue to offer the ‘traditional’ fixed-price ticket as well.

Because many passengers book months ahead, it is difficult for Allegiant—which unlike most airlines doesn’t hedge its future fuel needs—to predict what the fuel price will be at the time of travel. Furthermore, the U.S. Department of Transportation has proposed a new consumer protection rule that will prevent airlines from increasing prices after purchases are made, and Allegiant is suggesting its variable fuel fare as an alternative. The airline says it doesn’t have any immediate plans for the new pricing option but that it is looking for an approval in case its wants to offer it in the future.

With the fluctuating airfare the passenger is basically betting on oil prices as Allegiant is passing some of its fuel risk to the consumer,  who gets a lower base fare in return. However, as commented to (“Vegas airline proposes rolling dice on fares”), few consumers may actually want to incorporate this kind of risk into their ticket, since hardly anyone can make an educated guess about the future development of oil prices. For some passengers though, it may be a way to start their Las Vegas trip in style. Read full article

Airlines in the U.S. team up with brands to offer travellers free amenities during the holiday season

Faced with ever more experienced consumers, who routinely ignore the commercials and ads thrown at them, brands have to find new ways to break through the advertising clutter to reach and engage consumers. In the spirit of the holiday season (which in the U.S. starts at the end of November with Thanksgiving), airlines in America have partnered with brands such as Google, Microsoft and Chase Cards to offer their customers free, sponsored services that make life a little bit easier. Ofcourse, the brands hope that offering some ‘generosity’ will get them a bit of sympathy in return. 

Virgin America, Delta, Airtran & Google Chrome
From November 20 through January 2, 2011, Virgin America, Delta, and AirTran offer free inflight WiFi on all domestic flights, courtesy of Google. Google offers the free WiFi to promote its Chrome Internet browser and it projects that 15 million passengers will use the free service this holiday season. The carriers were chosen because their entire domestic fleets are outfitted with GoGo’s inflight WiFi. Passengers can use any browser they wish while surfing the Web but will be invited to download Google Chrome upon landing. As part of the promotion, Delta has also just introduced ‘Delta Embark’, an online travel guide available as an Google Chrome ‘web app’.

In a similar initiative, Google last year teamed up with Virgin America to offer free WiFi on the airline’s flights from October 2009 until January 2010, and footed the WiFi bill at 54 airports across the U.S. Last year, Delta also partnered with eBay to offer free inflight WiFi during the week of Thanksgiving. 

Southwest & Microsoft Windows
From December 2 until Christmas, Microsoft and Southwest Airlines’ ‘Holiday Photos on the Fly’ campaign offers passengers travelling on Southwest a free holiday photo that is captured, edited, e-mailed and/or printed using Microsoft’s Windows 7 and Windows Live Photo Gallery. A pro photographer snaps passenger’s portraits with Santa Claus or a holiday backdrop, and ‘Windows 7 elves’ show how to edit, share, and store their photos. Flyers can then print their photo at the Southwest/Microsoft photo booths or visit to access and share their photos online. The ‘Holiday Photos on the Fly’ promotion is held at 26 airports across the U.S. and also showed up at New York City’s Bryant Park at the end of November, where besides having their picture taken, visitors could also play with Microsoft’s new Xbox Kinect gaming console and the latest Windows-based smartphones. Read full article

Kingfisher Airlines launches same-day parcel delivery service

In a bid to improve ancillary revenue, Indian airline Kingfisher just launched Kingfisher Xpress, a door-to-door cargo delivery service. The service will offer a pick up facility in the 6 main metropolitan cities of India (Mumbai, New Delhi, Bangalore, Hyderabad, Chennai and Kolkata) with same day delivery in 18 cities across India. The airline will also offer a next-day delivery service across 20 cities in India. Kingfisher says the service is India’s first and only same-day delivery by air service, with a money-back guarantee if the parcel isn’t picked and delivered on the same day, door to door. 

Kingfisher is not the first airline to launch an express delivery service. In July 2009, budget carrier AirAsia launched ‘Redbox’ (recently rebranded as ‘Courier’), which it said was the world’s first low-cost courier service. With fares 50 percent cheaper than its rivals, Redbox/Courier is targeted at small and medium enterprises and individual customers. AirAsia is transporting the packages from airport to airport while its partner DHL is picking up and delivering them. The low-cost carrier also partnered with UPS-subsidiary Mail Boxes Etc (MBE) to enable customers to drop off their packages at MBE’s 17 outlets in Kuala Lumpur and Selangor. AirAsia said the courier service would initially operate only within Malaysia, but would expand to all destinations that AirAsia and AirAsia X fly to.
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Delta and Continental latest airlines to introduce uber-elite loyalty tier

In order to recognize their highest-value customers, several major airlines maintain unpublished programs that operate as ‘top tiers’ to existing frequent-flier plans. These über-elite tiers are often by invitation-only and offer VIP-perks such as personal concierges, exclusive express check-in lines at airports, access to high-end lounges even when the customer flies economy, and personal escorts to help travelers make tight connections. 

Airlines don’t discuss the selection process to get in these programs, and only say that a small number of passenger are invited based upon their annual spending in addition to mileage earned. For example, United Airlines’ 6-year-old Global Services program is granted to no more than 20,000 of United’s estimated 1 million elite Mileage Plus members. Says a United spokesperson: “It’s like the American Express black [invitation-only] Centurion card: We try to keep the mystique.”
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Qantas launches onboard recycling scheme

QF_Recycling Onboard_680x200

Qantas has just rolled out an inflight recycling scheme on its domestic routes. The airline is asking passengers to assist by separating their recyclable items for collection by the cabin crew, and place all other items in a special bag. Qantas says its onboard recycling initiative gives passengers the opportunity to reduce the environmental impact of their journey. With the new program the airline plans to recycle approximately eight-and-a-half million bottles, cups, tumblers and cans per year from its domestic services. Qantas says it already recycles newspapers on board (nearly 500 tonnes a year in Sydney and Melbourne) and glass and plastic bottles, papers and cans are recycled in Qantas Club lounges. Overall, Qantas aims to achieve a 25 per cent reduction in landfill use by 2011.

Qantas’ inflight recycling initiative follows earlier trials by Virgin Blue in which cabin crew were trained to separate recyclable waste from food scraps and other matter while collecting passengers’ rubbish before landing. A few years ago the airline also installed recycling bins at Sydney Airport.
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