Airlines

Airlines roll out new “smart luggage” rules today

Starting today, January 15, airlines will no longer allow passengers to checkg or carry on “smart luggage” with non-removable lithium batteries.

Powered luggage began appearing on the market a few years ago and some new versions of these high-tech bags can weigh themselves, be locked remotely, report their locations, provide power for gadgets, offer rides to the gate and follow travelers around.

The extras are enticing, but industry-wide concern over lithium batteries igniting and starting fires led the International Air Transport Association to instruct its almost 300 airline members to restrict carriage of certain bags:

“Effective 15 January 2018, for IATA member airlines, baggage with removable installed Lithium batteries (“smart luggage”) must be carried as carry-on baggage or the battery must be removed. With the battery removed the bag can be checked-in. If the battery cannot be removed, the bag is forbidden for carriage.”

Citing “safety management and risk mitigation,” American Airlines was among the first to alert its customers to the impending rule change. The carrier also said the standard question it asks customers checking bags – “Have you packed any e-cigarettes or spare batteries for laptops, cellphones or cameras?” – would be altered to include smart bags.

Other airlines are changing their check-in and boarding procedures as well.

“Throughout our guests’ journey, we will remind them to remove all lithium batteries from checked luggage, or disconnect and turn off batteries being stored in the overhead bins,” said Alex Da silva, a Hawaiian Airlines spokesman, “We are also training employees on the various types of smart bags so they may assist customers.”

Some smart luggage manufacturers are scrambling to redesign their smart bag products to comply with the new airline rules. Others are making sure customers know how, and how easily, the lithium batteries can be removed from their bags. And companies who have smart bags without lithium batteries are touting that feature.

“We believed that there would come a time when lithium batteries could be seen as a safety issue. So we purposely powered our luggage with AAA batteries to avoid any of these potential future rulings,” said Emran Sheikh, President and CEO of luggage manufacturer and distributor Heys International.

Sheikh and others emphasize that it is the type of battery used in some “smart” luggage designs that is the problem, not the category of ‘smart luggage’ in general.

“The airline industry’s recent attention to safety surrounding lithium ion batteries should boost our confidence that the travel industry is monitoring current trends and updating their own best practices to reflect modern travelers’ habits and needs,” said Michele Marini Pittenger, president of the Travel Goods Association, Consumers can expect to see luggage manufacturers respond accordingly and release new iterations of smart luggage featuring even safer power sources.”

(My story on new smart luggage rules first appeared on CNBC in a slightly different form.)

Did Santa bring you “smart” luggage?

If Santa brought you some new-fangled “smart” luggage that can not only carry your clothes but charge your gadgets, weigh what you’ve packed and give you a motorized ride to the gate, be sure to check that the battery can removed.

Airlines don’t want the lithium batteries that power these smart bags in airplane cargo holds because (as we learned from hoverboards and the Samsung Galaxy Note 7 smartphone fiasco) there’s concern over lithium batteries igniting and starting fires.

Alaska, American, Delta, Hawaiian,  Southwest and United are among the airlines that have posted notice that, come January 15, 2018, customers will only be permitted to board with smart bags that have batteries that can be removed.

Smart bags traveling as carry-ons must be powered off and any smart bags  traveling as checked luggage must have their batteries removed and brought into the cabin as carry-on.

 

Comparing airlines, airports by on-time performance

Travelers use all manner of measurements to choose an airline to fly on or an airport to fly through and beyond price, punctuality is high on some lists.

Flight informatoin company OAG gathers oodles of on-time performance data and twice each year shares an ‘award’ ranking airlines and airports with OTP star ratings, 5 being the best.

For U.S. airlines, the latest list – found here – give high marks to Delta’s performance.

“It not only topped its mainline competition, but finished ahead of smaller airlines such as Alaska Airlines and Sun Country Airlines,” OAG notes. “In a U.S. air travel ecosystem that relies on major hubs, it’s easy for a single delay or cancellation to knock an entire day of flights off schedule. Despite managing one of the largest fleets in the world, Delta has remained a cut above its competitors. Southwest (78.9 OTP), American (78.8 OTP) and United (78.5 OTP) all performed admirably, earning 3 stars respectively.”

When it comes to airports, the standouts are Salt Lake City International Airport (earning 5 stars for an 85.2 percent on-time performance), Atlanta’s Hartsfield-Jackson International Airport (82.9 percent), Detroit Metropolitan Airport (83.1 percent), Charlotte Douglas International Airport (82.2 percent) and Minneapolis St. Paul International Airport (85.1 percent).

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How 10 airlines reaped $28 billion from the ‘extras’

Buying an airline ticket now has a lot in common with a trip to the grocery store or the purchase of a new car.

After going up and down the aisles, “Shoppers don’t know the total cost of all the things they put in their grocery carts till they check out,” said Jay Sorensen, president of research firm IdeaWorks, “And most people don’t just buy the base model of a car. They start with the base model and then start adding on features. That’s how air travel is now priced.”

And like that quart of ice-cream that wasn’t on your shopping list and those heated seats the salesperson sweet-talked you into, when it comes to airfares, the modern day extras can really add up.

In 2007 the top ten airlines (ranked by total ancillary revenue), was $2.1 billion, according to an IdeaWorks report, but in 2016, the top ten ancillary revenue-earning airlines alone took in more than $28 billion from “beyond tickets” sales of everything from baggage fees and commissions on care rentals and vacation packages to frequent flyer points, advertising and products sold in fare ‘bundles.’

Which airlines earn the most from extras?

Spirit Airlines may be marketed as an “ultra” low cost carrier but, at an average of $49.89 per passenger, the Florida-based airline topped the list of earnings per passenger a la carte extras such as checked bags, assigned seat and extra legroom. In 2016, that represented 46.4 percent of the airline’s overall revenue, according to the report.

Allegiant, Frontier were also 2016 standouts, earning, respectively, an average of $48.93 and $48.60 in ancillary revenue per passenger, representing 42.4 percent of Frontier’s total 2016 revenue and 40 percent of Allegiant’s, according to the report.

When measuring total ancillary revenue, larger airlines United, Delta, American and Southwest topped the list, earning $6.2 billion, $5.1 billion, $4.9 billion and $2.8 billion respectively.

These larger airlines, notes Sorensen, earn their high rankings due mostly to the sale of miles or frequent flyer points to banks that issue co-branded cards. But Ryanair and EasyJet, also among the top ten earners (at $1.9 billion and $1.3 billion respectively) earned the bulk of their ancillary income through a la carte fees and commissions on products sold on their websites, such as car rentals and travel insurance.

“Some of the best in this category have extensive holiday package business with route structures built upon leisure destinations,” Sorensen notes in the report, “Allegiant in the US and Jet2.com in the UK share the common bond of emphasizing leisure travel. These are essentially holiday package companies that own an airline.”

For these airlines, everything for revolves around the ability sell hotels, car rentals and attraction tickets to people traveling to vacation-oriented destinations, Sorensen added.

Looking forward, “Airlines increasingly see themselves as retailers that upsell and cross-sell as their focus shifts from optimizing the revenue per seat to maximizing revenues per passenger,” said Raymond Kollau of trends research agency AirlineTrends “For example, Ryanair now regards itself as a digital platform with an airline attached. It eventually aims to give away the seat ticket for free and earn their income via all kinds of ancillary services.”

Here is list of Top Ten airlines for 2016, ranked by ancillary revenue per passenger. (Courtesy IdeaWorks)

  1. Spirit: $49.89
  2. Allegiant: $48.93
  3. Frontier: $48.60
  4. United: $43.46
  5. Jet2.com: $4246
  6. Qantas Airways: $42.38
  7. Virgin Atlantic: $42.45
  8. AirAsia X: $34.1
  9. Korean Air: $32.59
  10. Alaska Air Group: $31.41

And here are the Top Ten airlines for 2016, ranked by overall ancillary revenue. (Courtesy IdeaWorks)

  1. United: $6.2 billion
  2. Delta: $5.1 billion
  3. American: $4.9 billion
  4. Southwest: $2.8 billion
  5. Air France/KLM: $2.1 billion
  6. Ryanair: $1.9 billion
  7. EasyJet: $1.3 billion
  8. Lufthansa (network): $1.3 billion
  9. Qantas (excluding Jetstar): $1.1 billion
  10. Air Canada: $1.1 billion

(*IdeaWorks gathers financial information for these rankings from annual reports, investor presentations, financial press releases and other sources.)

(A slightly different of my story about ancillary income for airlines first appeared on CNBC)

KLM embraces Twitter & WeChat for flight info, updates

Last year, social media-savvy KLM Royal Dutch Airlines was the first airline outside the US  to start offering customers flight info service via Facebook’s Messenger and now 10 percent of all bookings on KLM are confirmed this way and 15 percent of all online boarding passes KLM issues are delivered via Messenger.

KLM counts that as success so now the carrier says it is the first to roll out delivery of flight info – including booking confirmation, check-in notification, boarding passes and flight status updates – via Twitter and WeChat, the social media tool popular in China.

“The world is becoming more digital. And as a company with 98 years of history, we feel we should continue to be pioneers in innovation and embrace new technology as we did with Facebook,” Pieter Elbers, KLM President and CEO told StuckatTheAirport.com.

He said while Twitter is an important communication tool, WeChat is crucial for KLM to embrace as, after the US, China is KLM’s second largest market outside Europe.