Tourism and Travel

In 2006 expect more airlines nickel-and-diming

By Richard N. Velotta / Staff Writer

Close the books on 2005. It's a new year with new issues, new challenges and new opportunities on the horizon.

I asked a few tourism experts about their expectations for 2006 and what some of the big headlines for the year would be. Here are a few things we can look forward to:

Paying more a la carte: -- A news item that was under the radar screen at the end of 2005 was the decision by commuter carrier American Eagle, an affiliate of American Airlines, to begin charging $1 for a can of soda on its flights.

Airline expert Terry Trippler of Cheapseats.com expects that to become a trend for 2006 -- airlines charging more for the little things.

Trippler said he expects airlines to look for more ways to generate revenue and said he wouldn't be surprised if travelers see extra charges for assigned seats, aisle seats, emergency exit row seats, checking a bag, carry-on bags, snacks and, yes, soft drinks.

"American Eagle put their toe in the water on this, and I'm sure a lot of other airlines are watching to see what happens," Trippler said.

Trippler reasons that if an airline can raise an additional $1,000 or so per flight, that would keep them from having to raise fares by that level.

While American Eagle was noted as one of the first to charge for drinks, others have paved the way for nickel-and-diming customers.

Allegiant Air charges $5 for a seat preference when customers book online, and United Airlines was the subject of a recent Consumer Reports story on how additional fees could alter a cheap fare.

The January edition of Consumer Reports showed how a $245 fare became $519. On an economy-class ticket from Chicago to San Diego, the magazine found a round-trip base fare of $244.45. But federal tax, passenger facility fees, federal segment fees and 9/11 security fees bumped that up by $38.75.

Then there was United's $10 fee for booking via telephone, a $6 skycap fee for three bags, a $50 fee for a bag over 50 pounds, a $160 fee for a third bag and $10 for a mini-meal snack box for a total of $236 in added airline fees.

New airline headed our way? By the end of 2006, the American subsidiary of Virgin Atlantic Airways is due to be flying.

Virgin America is expected to have a base of operations in San Francisco and offer service similar to what Sir Richard Branson's British carrier has on its flights between London and Las Vegas.

No routes have been announced, but most betting men would put money on Virgin America bringing its brand to Las Vegas, a move that could affect United's Ted service between Las Vegas and San Francisco and even Southwest's traffic between Las Vegas and Oakland.

Southwest: Las Vegas' busiest air carrier continues to keep the city in its growth strategy, but some experts say the days of Las Vegas being the airline's biggest station are numbered.

Despite the airline's first fatal accident last month at Chicago's Midway Airport, Southwest officials say they plan to continue growth at a fast clip there, and some say Chicago will become Southwest's busiest station by 2007.

Southwest spokeswoman Linda Rutherford was asked to comment on Midway's growth plans in the wake of the accident and said it is possible that Midway could be the airline's busiest airport someday.

The airline was the first to offer more than 200 flights a day at McCarran and this week began nonstop service between Las Vegas and its newest market, Denver.

US Airways: The former America West Airlines will expand its new Hawaii service in March.

The airline began offering Las Vegas-Maui service and started nonstop flights between Phoenix and four Hawaiian islands in December.

More mergers? Aviation consultant Mike Boyd of the Boyd Group believes 2006 is bound to be a good year for airlines because the economy is on a roll and fuel prices have stabilized. The rapid mark-up in fuel costs prevented some airlines from posting profits in 2005, and many have moved to protect themselves from future fuel uncertainties. Boyd sees the potential for weakness in the low-cost-carrier arena, only because there are so many of them competing for the same dollars, and the arrival of Virgin America will only make it more difficult for those companies that have staked a claim in that niche.

One of the big aviation stories of 2005 was the merger between America West and US Airways and how America West's management is coping with blending the cultures of two different operations. So will there be more mergers in 2006?

Not likely, the experts agree.

Boyd sees American, Continental and Northwest continuing to take advantage of their strengths, Southwest and JetBlue continuing on their paths. While Northwest is operating under bankruptcy protection, Boyd expects them to be in better shape than another bankrupt carrier, Delta Air Lines, which has slashed flights around its system and is battling with its pilots union for concessions to save money.

Another bankrupt carrier, United, is expected to emerge from bankruptcy protection early this year. United continues to shoot itself in the foot on occasion, closing out 2005 with another row with employees when a Chicago supervisor's e-mail congratulating managers for increasing disciplinary actions against flight attendants was accidentally sent to the flight attendants themselves.

Trippler doesn't expect to see any mergers like the America West-US Airways deal, reasoning that most airlines couldn't afford one.

McCarran growth: Capital improvement projects at McCarran should keep the nation's sixth busiest airport hopping. Watch for additional gates in the D concourse to open and preliminary work relocating Russell Road to allow construction to begin on the new Terminal 3 facility in 2006.

Over the next three to four years several projects are planned to keep the airport ahead of the growth curve.

The airport currently has 546 flights a day to 120 nonstop destinations.

Monorail: Will the Las Vegas Monorail turn the corner? New locals rates that took effect this week probably won't draw too many people to the system, but watch for new President Curtis Myles to carefully monitor the system's farebox take and move toward what most acknowledge is what is needed to make the system viable -- a link to the airport and to the west side of the Strip.

Convention center: Plans are in the works to overhaul the Las Vegas Convention Center, but Chris Meyer, the LVCVA's senior director of convention sales, said 2006 won't be a year of disruption, since there's still a lot of planning and engineering ahead to improve the circulation and flow of the building.

Once a construction plan is in place, watch for there to be some juggling of schedules and determining how the building can host major shows without inconveniencing conventioneers.

Richard N. Velotta covers tourism for In Business Las Vegas and its sister publication, the Las Vegas Sun. He can be reached at (702) 259-4061 or by e-mail at velotta@lasvegassun.com.

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