Welcome to the April 2013 Issue of Travology Today

The Global Business Travel Association (GBTA)—the voice of the business travel industry—applauded Congress for passing the Reducing Flight Delays Act of 2013.

The Reducing Flight Delays Act gives the U.S. Secretary of Transportation the flexibility to transfer discretionary funds into the Federal Aviation Administration’s (FAA) operations budget to prevent reduced staffing and operations, such as the current furloughs of air traffic controllers.

Under the bipartisan agreement to end growing flight delays and travel disruptions from reduced controller staffing, the budget cuts mandated by the Budget Control Act of 2011 would be reached from cost reductions in other FAA efforts.

“We are pleased to see Congress recognize that disrupting air travel was the wrong approach to dealing with our Nation’s budget issues. Safe, efficient air travel ensures U.S. businesses remain competitive. With nearly 40 million business trips a month, these road warriors are driving economic and employment growth,” said GBTA Executive Director and COO, Michael W. McCormick.

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The International Air Transport Association (IATA) announced global passenger traffic results for February showing that demand growth is accelerating on the back of stronger business confidence, particularly in emerging regions. Passenger demand rose 3.7% compared to February 2012.

The 3.7% growth masks improvements in recent months. October 2012 appears to have been a turning point for air travel markets. Since October, passenger demand has been growing at an annualized rate of 9%. This is almost double the growth trend over the first 9 months of 2012.

“February’s performance was good news. Demand for air travel continues to rise on economic optimism and improved business confidence. But that comes with a few caveats. Much of the growth is concentrated on emerging markets. Europe continues to be a laggard. And the handling of the banking crisis in Cyprus has reminded all of us that the deep problems in the Eurozone economies still remain,” said Tony Tyler, IATA Director General and CEO.

Capacity was up 1.0% on the previous February and the industry load factor stood at 77.1%. “Airlines are carefully managing capacity expansion, which is keeping the load factor at a record high. This is helping the industry to remain profitable despite persistently high oil prices.”

International Passenger Markets

February international passenger demand was up 3.6% compared to the year-ago period, and 0.9% compared to January. Capacity rose 1.1% versus February 2012 and load factor climbed 1.8 percentage points to 76.3%.

• Asia-Pacific carriers recorded an increase of 4.5% compared to February 2012. Continuing improvements in China’s economy and growth in intra-Asian trade provided strong support to the passenger business of the region’s airlines. With this robust performance, demand associated with Asia-Pacific’s emerging markets has been a major driver of the stronger growth in international traffic seen recently.
• European carriers recorded 0.8% growth compared to February 2012. Reflecting the contraction of the Eurozone economy in the fourth quarter of 2012, European carriers have not seen any growth in international demand since October. They have responded by tightly managing capacity, which declined 2.0% year-on-year in February. This pushed the load factor up to 76.5%.
• North American airlines’ international traffic rose just 0.3% in February compared to February 2012; however this doesn’t reflect the significant underlying growth trend over recent months. International revenue passenger kilometers for North America are up 3% in February compared to October. The load factor rose to 76%, reflecting a 4.6% reduction in capacity year-on-year.
• Middle East carriers saw year-on-year demand expand by 10.6%--the strongest among all the regions. Capacity expansion was held to 9.7% with the result that load factor rose 0.7% points to 77.7%, the highest for any region.
• Latin American airlines posted year-on-year growth of 7.0%. A 9.9% rise in capacity, however, pushed load factor down 2.1 percentage points to 76.7%. Robust economic growth in countries such as Colombia, which is experiencing strong demand for commodities exports, is contributing to rising air travel.
• African airlines’ traffic climbed 7.7% compared to February 2012, second best among the regions, while capacity rose 3.9%, boosting the load factor 2.3 percentage points to 65.2%. The rise in load factor commenced in mid-2012, supported by an increase in demand and also from tighter capacity management.

Domestic Passenger Markets

Domestic markets climbed 3.9% in February compared to a year-ago, driven primarily by surging demand in China, as all other markets experienced declines with the exception of Australia, which rose 2.2%. Total domestic capacity was up 0.8% compared to February 2012 and load factor rose 2.3% points to 78.8%.

• US traffic dipped 0.6% in February while capacity dropped 2.5%, pushing load factor up to 80.4%, second highest among the domestic markets. As with international traffic, the year-on-year growth rate is masking a recent uptick in the growth trend. The US market has been growing at an annualized rate of 9% since the fourth quarter of 2012.
• China’s domestic traffic soared 20.2% compared to a year ago, reflecting the impact of Chinese New Year-related travel, but also the continuing acceleration of the economy. With capacity up 13.7%, load factor jumped 4.5 percentage points to 83.8%, which was the highest for any domestic market. Compared to January, traffic was up 5.3%.
• Japan’s domestic market contracted 3.1% compared to February 2012 owing to the flat-lining economy and related weak domestic demand for air travel. Japan’s domestic traffic is 12% below pre-Tsunami levels. Capacity fell 4.7% year-on-year and load factor was the lowest for any market at 62.4%.
• Brazil saw traffic fall 4.3% on a 10.6% plunge in capacity as the country’s airlines act to offset downward pressure on profitability, with economic growth continuing to fall below expectations. Load factor rose 4.6% points to 70.7%.
• Indian domestic traffic dropped 9.1% in February compared to a year ago. In addition to the slowing economy, Indian airlines have been reducing capacity from previously unsustainable levels. Capacity declined 7.5% in February and load factor slipped to 74.5%.

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ARC’s Commitment to Customer Service Fuels Improvement to Settlement System

ARC announced this month that it has launched enhancements to the company’s sales reporting and settlement system to allow for accelerated ticket refund processing for travel agencies and their customers. The system’s upgrade, made in consultation with ARC’s Carrier and Agency Working Groups, expedites cash and credit card refunds to be processed on the same schedule as sales transactions, as opposed to a former weekly batch process schedule.

“ARC continually works with our stakeholders and customers to discover ways to improve our service,” said ARC’s Lauri Reishus, vice president and chief operating officer. “This significant change to our settlement system is a perfect example of this, with benefits to our airline and travel agency members, whose customers will realize faster refund transactions on their credit cards. As part of ARC’s continuous process improvement efforts, ticket exchange processing is also being examined for possible enhancements in the future.”

For more information, click here.

Airlines reported 34 tarmac delays of more than three hours on domestic flights, but no tarmac delays of more than four hours on international flights in February, according to the U.S. Department of Transportation’s Air Travel Consumer Report released today.

All of the long tarmac delays took place on February 16 and involved flights departing from or arriving at Charlotte International Airport in North Carolina, where a snowstorm affected the area that day. All of the reported tarmac delays involve US Airways or its code share partners and are under investigation by the Department.

The larger U.S. airlines have been required to file complete reports on their long tarmac delays for domestic flights since October 2008. Under a rule that took effect Aug. 23, 2011, all U.S. and foreign airlines operating at least one aircraft with 30 or more passenger seats must report lengthy tarmac delays at U.S. airports.

Also beginning Aug. 23, 2011, carriers operating international flights may not allow tarmac delays at U.S. airports to last longer than four hours without giving passengers an opportunity to deplane. There is a separate three-hour limit on tarmac delays involving domestic flights, which went into effect in April 2010. Exceptions to the time limits for both domestic and international flights are allowed only for safety, security, or air traffic control-related reasons. Severe weather could cause or exacerbate such situations.

The consumer report also includes data on on-time performance, cancellations, chronically delayed flights, and the causes of flight delays filed with the Department’s Bureau of Transportation Statistics (BTS) by the reporting carriers. In addition, the consumer report contains information on mishandled baggage reports filed by consumers with the carriers, and consumer service, disability, and discrimination complaints received by DOT’s Aviation Consumer Protection Division. The consumer report also includes reports of incidents involving the loss, death, or injury of pets traveling by air, as required to be filed by U.S. carriers.

On-Time Performance

The reporting carriers posted an on-time arrival rate of 79.6 percent in February, down from both February 2012’s 86.2 percent mark and from January 2013’s 81.0 percent.

Cancellations

The reporting carriers canceled 2.4 percent of their scheduled domestic flights in February, up from both the 1.0 percent cancellation rate posted in February 2012 and the 1.5 percent rate posted in January 2013.

Chronically Delayed Flights

At the end of February, there were nine flights that were chronically delayed – more than 30 minutes late more than 50 percent of the time – for two consecutive months. There were no chronically delayed flights for three consecutive months or more. A list of flights that were chronically delayed for a single month is available from BTS.

Causes of Flight Delays

In February, the carriers filing on-time performance data reported that 5.85 percent of their flights were delayed by aviation system delays, compared to 5.73 percent in January; 6.40 percent by late-arriving aircraft, compared to 6.02 percent in January; 4.96 percent by factors within the airline’s control, such as maintenance or crew problems, compared to 4.98 percent in January; 0.56 percent by extreme weather, compared to 0.55 percent in January; and 0.03 percent for security reasons, compared to 0.04 percent in January. Weather is a factor in both the extreme-weather category and the aviation-system category. This includes delays due to the re-routing of flights by DOT’s Federal Aviation Administration in consultation with the carriers involved. Weather is also a factor in delays attributed to late-arriving aircraft, although airlines do not report specific causes in that category.

Data collected by BTS also shows the percentage of late flights delayed by weather, including those reported in either the category of extreme weather or included in National Aviation System delays. In February, 36.96 percent of late flights were delayed by weather, up 13.20 percent from February 2012, when 32.65 percent of late flights were delayed by weather, and up 8.32 percent from January when 34.12 percent of late flights were delayed by weather.

Detailed information on flight delays and their causes is available on the BTS site on the World Wide Web at http://www.bts.gov.

Mishandled Baggage

The U.S. carriers reporting flight delays and mishandled baggage data posted a mishandled baggage rate of 3.00 reports per 1,000 passengers in February, up from February 2012’s rate of 2.64, but down from January 2013’s rate of 3.41.

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The U.S. hotel industry reported increases in all three key performance metrics during March 2013, according to data from STR.

Overall, the U.S. hotel industry’s occupancy rose 0.4 percent to 63.7 percent, its average daily rate was up 4.2 percent to US$110.57 and its revenue per available room increased 4.6 percent to US$70.39.

Among the Top 25 Markets, Dallas, Texas, rose 7.8 percent in occupancy to 66.6 percent, reporting the largest increase in that metric. New Orleans, Louisiana, followed with a 5.5-percent increase in occupancy to 82.6 percent. San Diego, California (-4.2 percent to 72.1 percent), and Phoenix, Arizona (-3.3 percent to 82.8 percent), reported the largest occupancy decreases for the month.

Two markets experienced double-digit ADR increases: Oahu Island, Hawaii (+19.5 percent to US$208.12), and Miami-Hialeah, Florida (+14.4 percent to US$238.12). Washington, D.C., fell 2.8 percent in ADR to US$152.07, reporting the largest decrease in that metric, followed by San Diego with a 2.6-percent decrease to US$127.99.

Six markets achieved double-digit RevPAR growth: Miami-Hialeah (+19.1 percent to US$212.20); Oahu Island (+18.6 percent to US$173.40); Anaheim-Santa Ana, California (+12.9 percent to US$101.78); New York, New York (+12.4 percent to US$197.39); Dallas (+11.6 percent to US$59.38); and San Francisco/San Mateo, California (+10.9 percent to US$130.57). San Diego fell 6.7 percent in RevPAR to US$92.27, reporting the largest decrease in that metric.

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Alitalia has introduced a new menu in Classica Plus, inspired by the airline’s award-winning Magnifica Business Class dining program! When traveling in Classica Plus, passengers now enjoy an enhanced hot meal service, and light snacks or breakfast based on the departure time…American Airlines is celebrating three honors received by the AAdvantage® loyalty program at the 2013 Freddie Awards. The three awards are Airline Program of the Year, Best Elite Program and Best Airline Promotion…Delta Air Lines became the first airline to pre-notify customers through their boarding pass of their TSA PreCheck eligibility status in advance of their flight. A pre-notification indicator will appear on boarding passes printed at home as well as at airport kiosks…KLM Royal Dutch Airlines added three new destinations to its network this month: KLM began operating to important Nordic petroleum and leisure destination, bringing the total number of KLM destinations in Norway to seven; KLM began twice-daily service between Amsterdam and Manston, bringing the total number of KLM British destinations to 14; KLM became the first European airline to offer direct flights between Europe and Fukuoka, which became KLM’s third Japanese destination…United Airlines achieved its best first-quarter on-time performance among domestic flights since 2003 with 81.4 percent arriving on time, and, despite several severe weather events, ended the month of March with 80.7 percent arriving on time. March was the third consecutive month that more than 80 percent of United’s domestic flights arrived on time.

The United States Government has posted recent travel advisories and warnings for Afghanistan, Algeria, Burundi, Central African Republic, Chad, Colombia, Cote d’lvoire, Democratic Republic of the Congo, El Salvador, Eritrea, Guinea, Haiti, Honduras, Iran, Iraq, Israel, the West Bank and Gaza, Kenya, Korea (Democratic People’s Republic of), Lebanon, Libya, Mali, Mauritania, Mexico, Niger, Nigeria, Pakistan, Philippines, Republic of South Sudan, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, and Yemen.

Be on the lookout for our leisure newsletter, The Bucket List, coming to you each month on or about the 15th.