Alaska Airlines hikes fees due to rising fuel prices
Originally published Tuesday, July 1, 2008 at 12:00 a.m.
Updated Tuesday, July 1, 2008 at 3:11 p.m.
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Correction: The story as it originally appeared contained an error in the third paragraph. The story below has been corrected.
Alaska Airlines passengers are facing higher fees as the carrier compensates for higher fuel costs.
Travelers who check a second bag will be charged $25 one-way, beginning today. Increased fees for pets in the cabin, overweight bags and unaccompanied minors went into effect May 21.
The fuel surcharge assessed by Alaska Air Cargo for shipping goods is also going up, from 18 to 20 cents per pound — and a new mechanism means future prices will rise proportionally to fuel. The carrier moves 150 million pounds of goods across its network annually.
Fee increases are another indicator of troubled times for the airline industry as fuel costs soar. United Airlines announced it will discontinue Alaska flights in September, while other carriers are also cutting or realigning routes. Many are also charging passengers more for services rendered. Beginning at different times this summer American Airlines, US Airways and United Airlines will charge $15 for the first checked bag and $25 for a second.
“We are very concerned about the cost of fuel,” Alaska Airlines spokesman Paul McElroy said. “It’s at a record level.”
The company’s first-quarter fuel bill was 50 percent higher than a year ago, he said. With 2007 annual revenue at $2.8 billion, Alaska Airlines expects to pay $1.2 billion for 2008’s fuel — almost 43 percent of 2007 revenue.
Alaska Airlines took a good look at charges for services and is implementing some increases. But, McElroy couldn’t speculate how significantly fares could be impacted.
“We just don’t know,” he said. “We’re taking steps now. Beyond that, Alaska and the whole industry, for that matter, is just waiting to see what will happen with the price of fuel. Then we’ll move accordingly.”
Agent Ramona Oxendine, a partner at Santa’s Vagabond Travel in North Pole, said fares Alaskans pay really aren’t increasing much. Price tags on Lower 48 legs, however, have gone up substantially.
Instead, passengers should prepare for more inconveniences like canceled flights and fewer connections, she suggested.
Flying is a necessity for most Alaskans, and high prices or more surcharges aren’t likely to cancel trips, Oxendine said. Instead, her clients are rethinking how they will spend money at their destinations or increasing vacation budgets. She warned that passengers should prepare for additional inconveniences like canceled flights, an end to frequent flyer mile awards and fewer connections as airlines look for more ways to control deficits.
“I don’t know how much more they can cut, quite honestly,” Oxendine said.
Along with fee increases, Alaska Airlines and Horizon Air are making fleet and route changes to trim fuel use. For example, routes less in demand are being sacrificed in favor of more flights connecting high-traffic destinations.
“A route that might have been profitable when oil was at $80 a barrel may not be profitable now that oil is at $140,” McElroy explained.
In another effort to save money, Alaska Air Group is one of a handful of companies participating in fuel hedging, a practice that is a bit of a gamble but has saved Alaska Airlines around $350 million during the last five years, McElroy said.
“That has been huge in our ability to limit fare increase,” he said. The company hedges half its anticipated fuel and buys the rest at market prices. Hedging involves pre-purchasing at a set price and paying a premium for the contract.
The carrier is speeding up plans to replace its older MD-80 planes with more fuel-efficient Boeing 737s. So far, 19 MD-80s have been retired, and the remaining seven will leave service Aug. 25. A single-plane fleet offers savings in training and maintenance costs and simplifies crew scheduling, McElroy said.
Other changes seem minor, but taken together do add up for savings, he said. Beverage carts are lighter, less potable water is carried on board, and planes are being retrofitted with “winglets” to decrease drag and increase fuel efficiency by about three percent. On June 17 Alaska Air Group switched from jet fuel to diesel and terminal power to feed pre-conditioned air and electricity into planes waiting at gates in Seattle. The carrier expects to roll out the same changes this fall in Anchorage, Los Angeles, San Francisco and Portland. Among the five hubs, the airline expects to save 2.4 million gallons of fuel — worth about $5.5 million — a year and to significantly lower greenhouse gas emissions among those five hubs, McElroy said.
Community Discussion
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I'd make them walk since they like to see everything......
Boeing is Boring...
Boeing is Bombed on Booze in the Boardroom..
...they prefer to spend more research on how to drop bombs more different ways than on how to fuel jetliners more cleanly and cheaply.
Using this technology Boeing jets can load up on free methane at Prudhoe and fly further, cleaner, safer, and much-much cheaper.
http://www.sciencedaily.com/releases/200...
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Kill your Television
[nightshade, I'd make them pay for flab since most are overweight]
Distant Thunder, it seems like all the innovation in this country is for some new dot com or video game or some other quick to riches scheme. Don't blame Boeing for not thinking outside the box on this. Real solutions take time and sizable investment that might not pay for years if not decades and most shareholders demand results within a much shorter time frame. How long would you say it would take the FAA to approve methane for use as a fuel in a passenger jet? And then who would invest in the production and distribution of this new fuel to airports across the land? Who will pay to retrofit the planes to burn a compressed gas? It would take a government to make something like that happen. We put men on the moon and rovers on other planets so I am certain it could be done, but not by investors who want instant results on their investments. All the serious money the government has these days is invested in the military in one form or another and because of that there is very little money left over to put to real solutions.
This article in Forbes tells the real information on why airlines are having so much trouble.
http://www.forbes.com/2008/06/02/aviatio...
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I sent a FedEx document to Manila. Weight 4 oz. cost $60.03. Now who is getting screwed here?
According to the AK Air website, the exemptions for travel within the state still apply.
In my experience Alaska Airlines has always screwed Alaskans, why stop now!!!
MillerPa, what I was saying was that you can STILL check THREE bags at NO cost if you are traveling WITHIN the state. So technically, it's not so bad, even kind of okay.
"-Customers traveling solely within the state of Alaska may check 3 bags free of charge."
http://www.alaskaair.com/as/www2/help/fa...
click 'hide/show details' next to the Baggage Exception heading, btw this was copied from the site today...
millerpa....agreed.
I heard some airlines now weigh you and charge if you are too heavy.
New Airline policies coming soon
In an effort to reduce cost and increase the profit margin. Airlines are looking into a different method of flight for it's customers.
Customers will be weighed and the total travel distance will be correlated to determine the proper dosage of a sedative to be determined by the lowest bidder.
Once passengers are properly sedated they can then be stacked like cord wood into the cabin making the flight more profitable, since more people can be stacked per flight than seated.
There will be little need for food or water on the plane.
Airlines suggest passengers carry additional clothing when traveling in this method because some passengers when sedated occasionally are incontinent, or if accidently given the improper dosage vomit.
This new method of transportation while having some minor problems will by far be the safest and most profitable method of transportation.
Once implemented worldwide the need for TSA operations will not be required since all passengers will be sedated at the on-set of the there flight.
Some of the positive aspects of this method of travel will be fewer customer complaints of long flights and less stress from long delays while waiting on the tarmack to name a few.
Should a airline accident occur there will also be fewer heart attacks prior to the crash and less suffering on the part of those who are actually killed since they will never know it happened...
Welcome to the new friendlier sedated airlines....
User6244, I hope under your system I don't get treated like luggage too. Once they misprinted my ticket for DFW instead of DCA, I caugh the mistake and corrected it as soon as it was printed. My luggage on the other hand cannot read.
I have some mixed feelings about Alaska. Compared to Alaska Air even a few years back I think that they are not doing nearly as well, compared to the rest of the industry, I think we're coming off okay.
9/11 bailouts are to blame for more of the mess than people realize. When a business goes under we hear about a lot of lost jobs and increased prices. What you don't hear about is two days later when Airline A is out of business Airline B buys 30% of A's assets, C buys 50%, and D buys another 20%. To manage the routes they have to hire many of A's employees. There will probably be fewer total employees, there will be certainly fewer routes, and they might still charge for the extra bags. Instead the government said, "It's okay that you can't run your business effectively, we'll hand you money because it's a 'special circumstance'." Where were the bailouts for the Alaskan tourism employers in 2002 when fewer people came to Alaska? Where were the bailouts for Car Rental companies that had fewer patrons because there was less leisure travel expected? I could continue...But these companies had to make do with the changes, they were FORCED to adapt, that is what business is. It sounds bad, people do get hurt in the process (lost jobs and income) but I dont' have a better solution--that's why we give people temporary unemployment insurance so they can keep going when they're laid off.
The airline industry was allowed ot have a big "don't worry" check and tbey didn't worry. 3,000 people died due to the attacks on 9/11, instead, so many people focused on the money that was lost. Stocks rise and fall; life is invaluable, and yet when tragedies occur, 9/11 and Hurrican Katrina for example, I hear more about the lost money than I hear about the lives that are lost or left in dissarray.
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