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Topic: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: BillReid
Posted 2008-05-14 08:12:33 and read 3065 times.

Yesterday the cost of fuel hit $127bbl
Jet fuel averages about $3.90/gallon in the USA.
Based on a A-320 with a fuelburn of about 850g/hr that equates to $3,315 per hour!
Assuming 150 seats that is $22.10/hr/seat.
So if the stage length is 3hrs then the cost to the airline is $66.30/seat just for fuel.
Someting is about to break, and I am scared crap-less

What will happen, and can airlines survive at $150/bbl without some drastic changes in the business model.
What are the different airlines doing to cope, are there contingencies for the $200/bbl range, or do we all just shut it down and go to Starbucks for coffee and to chat it up?

Based upon the massive costs to the airlines, will or have the airlines passed some of these costs on too the "free-bees".
There are two groups here, NRSA and FF-Award, where does this all go?

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: AgentXE1225
Posted 2008-05-14 08:26:57 and read 3035 times.

Our buddy pass fees are increasing because of the fuel costs, but not for our personal or vacation passes. (At least not yet...) Oil prices are freakin' ridiculous! Oil companies are making record profits EVERY QUARTER, execs get bigger and bigger bonuses, OPEC is holding us hostage (we let em'), and I work so that I can DRIVE to work! Food prices have nearly doubled, and yet because there are carriers who are willing to lowball ticket prices, profit be damned, the industry as a whole is unable to raise prices to a reasonable level (the break-even kind) when airline tickets are pretty much the only products that haven't adjusted with rising inflation. Now that I'm finished with my rant, I haven't heard anything about reward tkts going up, but then again, airport agents don't have much, if anything, to do with mileage redemption.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Ptcflyer
Posted 2008-05-14 08:26:39 and read 3035 times.

While the situation is dire... fuel hedging has helped to produce an average price less athan $3.90 per gallon. However, average load factors are 80% ish... so there are actually fewer occupied seats to spread the cost.

I have flown on multiple tickets this year... including to China where the fare did not even cover the fuel costs! Throw in frequent flier seats and non-revs... and the fuel bill / operational costs are indeed spread across fewer seats.

Raising fares will reduce discretionary travel... so airlines will have to make tough decisions to reduce flying. Would not be surprised if they added fuel surcharges to all folks on the plane -- including ff and maybe NRSA.

In today's capital constrained environment... the US carriers will face difficult times financing more fuel efficient airplanes... ala B787... and having a fleet of planes with a 20% reduced fuel consumption are years away. Even the most fuel efficient aircraft may not be profitable with $125-$150 per bbl oil.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Mayor
Posted 2008-05-14 08:41:21 and read 2992 times.

Call me an idiot (please don't) but how would charging Non-revs a fuel surcharge help? They just won't fly. The seat would go out empty, so, if it does.....no surcharge collected. Now, I know that buddy passes are getting a surcharge tacked on and I imagine yield fares for non-dependent children are, also.

In a climate where airline employees have had their pay cut, healthcare costs go up and many other benefits cut, the airlines might have a riot on their hands if they did this.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: AgentXE1225
Posted 2008-05-14 08:48:06 and read 2973 times.



Quoting Mayor (Reply 3):
In a climate where airline employees have had their pay cut, healthcare costs go up and many other benefits cut, the airlines might have a riot on their hands if they did this.

Yeah. There's already a very loud "WHAT THE F**K" every time I see the pass-tax value deducted from my paycheck. Last summer I went with my brother, who is my travel companion, to BDL using vacation passes. I returned before he did, but he was still on v-pass. I got hit for $163 in taxes and I still don't understand how they came up with that number and I'm STILL PISSED!

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: EA CO AS
Posted 2008-05-14 09:16:37 and read 2898 times.

Adding surcharges and fees to NRSA travel will probably not happen. It would not generate much revenue, while simultaneously eroding employee morale substantially. In the end the relatively small savings would not be worth the loss of goodwill among the employees.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: N757KW
Posted 2008-05-14 09:23:20 and read 2881 times.

So carriers already charge NRSAs fuel surcharges. I now one Asian carrier that does. The fuel surcharge almost doubles the ticket price on a ZED fare. The carrier I work for, it has been on again off again for the fuel surcharge. Sometimes I am charged, sometimes I am not.

N757KW

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: AgentXE1225
Posted 2008-05-14 09:26:22 and read 2881 times.



Quoting EA CO AS (Reply 5):
Adding surcharges and fees to NRSA travel will probably not happen. It would not generate much revenue, while simultaneously eroding employee morale substantially. In the end the relatively small savings would not be worth the loss of goodwill among the employees.

I agree completely. Buddy Pass riders can handle a few more dollars, but we employees work hard enough to more than earn our flight privileges.
P.S. Love your signature!

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: BillReid
Posted 2008-05-14 11:50:57 and read 2769 times.



Quoting Mayor (Reply 3):
Call me an idiot (please don't) but how would charging Non-revs a fuel surcharge help? They just won't fly. The seat would go out empty, so, if it does.....no surcharge collected. Now, I know that buddy passes are getting a surcharge tacked on and I imagine yield fares for non-dependent children are, also.

I sadly see this from hitting the employee, but the problem is that the airlines desparately need more revenue to cover costs that are rising for reasons of fear etc..
I am not 100% sure that a $50 flat charge for a seat would drive all the NRSA pax away. It might drive the numbers down but if say an airline who has 3,000 departures a day and averages two NRSA's on board generating $100 per flight, that works out to 27 million per quarter in increased revenues. That might help the company out a little bit and $100 for a round trip is not unreasonable, t would just force the NRSAer to be more discrimitive on his/her travel choices.

Ok I realize it doesn't offset the $550MM United lost last quarter but its a start. The FF award travel could pay $75 per flight and if there are 5 on for every flight thats over $101MM. Combined we have added over 125MM to the cash side of the balance sheet per quarter and $500,000,000 annually. Thats not to say its desireable, it justs speaks to the option of generating more cash to pay the CEO of Exxon Mobile, afterall someone has to pay for his 39 houses!

I was in NYC last week and I find it rediculous that a one-way Taxi to town costs $47.50 which we grin and bear. Yet to pay the same for a flight is looked at as repulsive for NRSA.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: AgentXE1225
Posted 2008-05-14 12:45:49 and read 2727 times.



Quoting BillReid (Reply 8):
sadly see this from hitting the employee, but the problem is that the airlines desparately need more revenue to cover costs that are rising for reasons of fear etc..
I am not 100% sure that a $50 flat charge for a seat would drive all the NRSA pax away

Bill, most of us are already overworked, underpaid and, depending on which airline, not so happy with their employers. As for me,I am very happy with the airlines I represent. I don't know how pass riders for other airlines are charged since every airline is different, but as for me, I pay the taxes on personal passes, but don't travel so much as I seem to find myself always working, (go figure!) so I only use vacation passes. Buddy pass riders pay $110 rt plus applicable taxes, but the base fee will go up Monday 19May. Not sure how much though. At any rate, leave the employees alone. If any non-revs should pay more, let the buddy passers do it!

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: BillReid
Posted 2008-05-14 13:08:33 and read 2682 times.



Quoting AgentXE1225 (Reply 9):
If any non-revs should pay more, let the buddy passers do it!

I see your point I just can't see past the airlines losing so much money.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Mayor
Posted 2008-05-14 14:11:17 and read 2596 times.

Quoting BillReid (Reply 8):


Quoting Mayor (Reply 3):
Call me an idiot (please don't) but how would charging Non-revs a fuel surcharge help? They just won't fly. The seat would go out empty, so, if it does.....no surcharge collected. Now, I know that buddy passes are getting a surcharge tacked on and I imagine yield fares for non-dependent children are, also.

I sadly see this from hitting the employee, but the problem is that the airlines desparately need more revenue to cover costs that are rising for reasons of fear etc..
I am not 100% sure that a $50 flat charge for a seat would drive all the NRSA pax away. It might drive the numbers down but if say an airline who has 3,000 departures a day and averages two NRSA's on board generating $100 per flight, that works out to 27 million per quarter in increased revenues. That might help the company out a little bit and $100 for a round trip is not unreasonable, t would just force the NRSAer to be more discrimitive on his/her travel choices.

But, Bill......that's not a sure revenue stream. Since most if not all non-revs travel for pleasure, it would be easy for them to just not fly, even though it is a perk that they've earned.

Quoting BillReid (Reply 8):
Yet to pay the same for a flight is looked at as repulsive for NRSA.

It certainly is, especially as it's still standby. There are people that work at the airlines just for the travel benefits.
There may be a mass exodus if they have to pay, considering the rest of the benefits aren't worth staying around for.


The little amount they would receive in revenue wouldn't offset the loss of already low employee morale, in my mind.

[Edited 2008-05-14 14:13:32]

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Viscount724
Posted 2008-05-14 14:17:17 and read 2577 times.



Quoting BillReid (Thread starter):
There are two groups here, NRSA and FF-Award, where does this all go?

At least in Europe, all the fees/surcharges/taxes are charged on FF award tickets. For that reason, for shorthaul travel within Europe it's often not worth wasting your miles on a "free" ticket since you can often find special fares at just about the same price as the total of all the fees you're going to have to pay for your redemption ticket.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Nwab787techops
Posted 2008-05-14 14:30:48 and read 2553 times.

Airlines never did like buddy pass. The buddy pass takes away from revenue. It's there to up employee morale in low cash times or after pay cuts. But, if they can make a buddy pass ticket more then a revenue ticket in the lite of high fuel, after time when no one is using there buddy pass they can limited or end the buddy pass program all together.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Mayor
Posted 2008-05-14 14:48:08 and read 2515 times.



Quoting Nwab787techops (Reply 13):
Airlines never did like buddy pass. The buddy pass takes away from revenue. It's there to up employee morale in low cash times or after pay cuts. But, if they can make a buddy pass ticket more then a revenue ticket in the lite of high fuel, after time when no one is using there buddy pass they can limited or end the buddy pass program all together.

DL has never really liked them because there has been quite a bit of trouble with the buddy pass riders. However, they like the revenue wich is to the tune of $1mil a year. I am surprised, tho, with all the trouble that they haven't eliminated the program. In my case, I usually have 5 or 6 left every year, out of a total of 8. I'm just very careful of who I give them to.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Jaysan
Posted 2008-05-14 15:01:13 and read 2488 times.



Quoting Mayor (Reply 3):
Call me an idiot (please don't) but how would charging Non-revs a fuel surcharge help? They just won't fly. The seat would go out empty, so, if it does.....no surcharge collected.

If the seat goes empty it is still saving money in today's day and age. Like Bill mentions it cost about 66 dollars to fly an empty seat from NY to Florida (thats if you have 150 seats on board, the fewer seats you have the higher your cost are to operate an empty seat) this does not include the cost of the crew, landing and departure fees, and the cost of the ground staff.

If a non-rev travels for free then you must add the cost of transporting the weight of the non-rev and there bags to the 66 dollars. So it may make sense to operate an empty seat rather then have it occupied by a non-rev.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: NKMCO
Posted 2008-05-14 15:00:16 and read 2488 times.



Quoting N757KW (Reply 6):
So carriers already charge NRSAs fuel surcharges

AA charges fuel surcharge on their ZED fares. My fare with ZED would have been $392 ORD-FRA (although I was leaving from MCO, just trying to cut cost), and instead I bought positive space on their web site MCO-FRA for $399.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets
Username: CALPSAFltSkeds
Posted 2008-05-14 20:04:46 and read 2387 times.



Quoting BillReid (Thread starter):
Yesterday the cost of fuel hit $127bbl
Jet fuel averages about $3.90/gallon in the USA.
Based on a A-320 with a fuelburn of about 850g/hr that equates to $3,315 per hour!
Assuming 150 seats that is $22.10/hr/seat.
So if the stage length is 3hrs then the cost to the airline is $66.30/seat just for fuel.
Someting is about to break, and I am scared crap-less

That's not the way I look at it. The seat would be empty if the non-rev wasn't onboard, so the only fuel expended is to carry the weight of the NR plus baggage, not total fuel burn divided by total seats. The total fuel burn includes the weight of the aircraft and the weight of freight. With a revenue passenger it's a different story as the flight is being flown for revenue passengers.

When doing weight and balance for KLM in the 1980's at ORD, if the payload increased, we'd send for a new flight plan, which would add something like about 30% of the added payload in fuel. With some of that being for reserves, the fuel used on a 7 hour flight to carry a total of 200lbs. for pax plus bag would be something like 40 to 50 lbs., or about 5-6 gallons. That's under a gallon per hour. At something like $3/gal, that's maybe $12 on a transcon (a couple of bucks per hour), not $22.10 per seat/hour.

On average, anything over $10 per ticket for domestic would be more than expended to carry the NR.

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets
Username: Ikramerica
Posted 2008-05-14 21:40:26 and read 2338 times.

The point of a free ticket is it's FREE. Yes, you pay taxes on it, but that's true of just about anything you get free that has a use tax applied to it.

Fuel is not an external cost to doing business. It is, was, and will be a part of the cost of a ticket. Just because it's an increasing cost at the moment doesn't change that reality.

Otherwise, why not offer free FF tickets with: fuel surcharge, staff surcharge, aircraft lease/loan/depreciation surcharge, food surcharge, maintenance luggage surcharge, etc. Once you add in all the "surcharges" you add up to the actual cost of the ticket…  Wink

Topic: RE: Airlines Adding Fuel To Nrsa And Award Tickets?
Username: Crjflyer35
Posted 2008-05-14 22:24:01 and read 2301 times.



Quoting Jaysan (Reply 15):


Quoting Mayor (Reply 3):
Call me an idiot (please don't) but how would charging Non-revs a fuel surcharge help? They just won't fly. The seat would go out empty, so, if it does.....no surcharge collected.

If the seat goes empty it is still saving money in today's day and age. Like Bill mentions it cost about 66 dollars to fly an empty seat from NY to Florida (thats if you have 150 seats on board, the fewer seats you have the higher your cost are to operate an empty seat) this does not include the cost of the crew, landing and departure fees, and the cost of the ground staff.

If a non-rev travels for free then you must add the cost of transporting the weight of the non-rev and there bags to the 66 dollars. So it may make sense to operate an empty seat rather then have it occupied by a non-rev.

are you serious?! If my wife and I decide to go home to ORD from PHX on my airline, taking our standard weights (180 x2 = 360) and, not that we ever check bags, let's say we each check a bag..2 bags at 30 lbs a piece. = 60lbs....

so total we get 420lbs...grand scheme of things, an A320 isn't going to notice that added weight.


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