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US probing possible airline collusion to keep fares high

Associated Press / July 1, 2015

The U.S. government is investigating possible collusion between major airlines to limit available seats, which keeps airfares high, according to a document obtained by The Associated Press.

The civil antitrust investigation by the Justice Department appears to focus on whether airlines illegally signaled to each other how quickly they would add new flights, routes and extra seats.

A letter received Tuesday by major U.S. carriers demands copies of all communications the airlines had with each other, Wall Street analysts and major shareholders about their plans for passenger-carrying capacity.

Justice Department spokeswoman Emily Pierce confirmed Wednesday that the department was investigating potential "unlawful coordination" among some airlines. She declined to comment further, including about which airlines are being investigated.

Thanks to a series of mergers starting in 2008, American Airlines, Delta Air Lines, Southwest Airlines and United now control more than 80 percent of the seats in the domestic travel market. During that period, they have eliminated unprofitable flights, filled a higher percentage of seats on planes and made a very public effort to slow growth in order to command higher airfares.

It worked. The average domestic airfare rose 13 percent from 2009 to 2014, when adjusted for inflation, according to the Bureau of Transportation Statistics. And that doesn't include the billions of dollars airlines collect from new fees: $25 each way to check a bag and $200 to change a domestic reservation. During the past 12 months, the airlines took in $3.6 billion in bag fees and another $3 billion in reservation change fees.

All of that has led to record profits for the industry. In the past two years, U.S. airlines earned a combined $19.7 billion.

This year could lead to even higher profits thanks to a massive drop in the price airlines pay for jet fuel, their single highest expense. In April, U.S. airlines paid $1.94 a gallon, down 34 percent from the year before.

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U.S. probing whether airlines collude to keep airfares high

Reuters / July 1, 2015

The U.S. Department of Justice said on Wednesday it is investigating whether U.S. airlines worked together illegally to keep airfares high by signaling plans to limit flights.

The Justice Department wrote to major U.S. air carriers demanding that they detail decisions to limit the number of seats they offer, and what they've said about those plans to investors, securities analysts and the public.

Airlines contacted have been asked to provide “available seat miles on a regional and system wide basis” back to January 2010 and a raft of other data.

The top four U.S. carriers American, Delta, United and Southwest control some 80 percent of the domestic air travel market.

The four confirmed receipt of the regulator's letter and said they are cooperating fully with the investigation. News of the probe sent the Dow Jones U.S. airlines index .DJUSAR down 2 percent.

Shares of the U.S. carriers have gyrated in recent weeks as investors questioned whether they were planning to add capacity at a pace faster than overall economic growth, which could put downward pressure on fares.

Southwest fueled investor jitters about declining profit margins in May when it unveiled plans to boost capacity by as much as 8 percent this year from 2014, although it later revised the expected increase to 7 percent.

But carriers have started taking flights off their fall schedules and postponing aircraft deliveries in response to Wall Street concerns that adding more flights and seats could erode fares and margins.

Mergers, new fees imposed on passengers and caution about adding capacity have boosted U.S. airline earnings after a decade of bankruptcies following the September 11, 2001 attacks. In the past year, tumbling oil prices have helped the carriers post billion-dollar profits.

The probe focusing on whether the top U.S. carriers are colluding domestically comes as some of the same airlines complain that foreign rivals are competing unfairly on some overseas routes.

U.S. carriers have asked the Obama administration to freeze access to U.S. airports by three Gulf airlines for allegedly receiving state subsidies. The Gulf airlines deny that they have received subsidies in violation of trade agreements.

The U.S. airlines also have fought plans by low-cost Norwegian Air Shuttle ASA (NWC.OL) to expand its U.S. flights under an Irish subsidiary, with claims that it will undermine wages and working standards.

Consumer advocates and some lawmakers praised the Justice department action focusing on domestic fares.

"This investigation must be tireless and timely to save consumers from the onslaught of price increases in summer fares," U.S. Senator Richard Blumenthal said in a statement.

The airlines and their defenders say ticket prices have fallen in 2015 while capacity this summer has reached a post-recession high.

"Our members compete vigorously every day, and the traveling public has been the beneficiary," trade group Airlines for America said in a statement Wednesday.

Separately, Connecticut's attorney general sent letters to the four carriers last week asking whether they have coordinated prices, citing recent statements at an industry conference held last month in Miami.

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The Next Frontier in Airline Travel - Tag Your Own Bags

The Wall Street Journal / July 1, 2015

For decades, fliers have checked their bags the same way: hand them to an airline employee and trust that they will reappear at the destination.

Now big changes to that model are coming as airlines look to streamline the airport experience—and pass more work to customers and machines.

The airlines latest ideas includes having fliers tag their own bags, print luggage tags at home and track their bags on smartphones.

Later this year, some fliers in Europe likely will begin using what could be the future of flying luggage: permanent bag tags that digitally update if flight plans change. Improved technology and loosened security rules are accelerating changes to baggage handling.

The changes face hurdles, including opposition from unions, security rules and fliers who prefer a human touch. On a recent weekday at Chicago’s O’Hare International Airport, several fliers struggled to tag their bag and summoned airline employees for help.

Still, carriers are plowing ahead. More than a third of global airlines now ask fliers to tag their own bags, compared with 13% in 2009. By 2018, more than three-quarters of carriers intend to offer the service.

“I don’t work for the airline. Why should I do their job?” said Mark Sam Rosenthal, a television writer from New York who prefers to check bags with ticket agents. “If something goes wrong or I have a question, the self-tagging machine isn’t going to have an answer,” he said.

Charlie Leocha, head of the flier-advocacy group Travelers United, predicted the new technology will shorten airport lines, but also warned it would eventually replace airline workers, frustrating fliers when storms or other disruptions hit. Airline unions generally oppose the new technology for the same reasons.

Airlines say such technology isn’t intended to reduce staff, but instead free workers to handle customer problems.

From 2004 to 2014, a period in which airlines added many self-service technologies like kiosks, the number of U.S. ticket agents fell about 13.5% to roughly 138,000, according to federal estimates. U.S. airline passengers increased 8.6% to 761 million over that period.

The biggest of the coming changes is permanent bag tags, electronic devices that strap on to frequent fliers’ luggage and digitally display their flight information. The tags display bar codes like a traditional tag, allowing them to work with existing infrastructure. Fliers update the tags via Bluetooth from their smartphones, and the airline can also remotely update the tag if its owner gets rerouted.

Officials expect similar technology to soon arrive in the U.S. “Home-printed and electronic bag tags are the low-hanging fruit for U.S. airlines,” said Stephanie Taylor, manager of passenger services at Airlines for America, the largest U.S. airline trade group. “We’re expecting multiple carriers to adopt these solutions by the end of the year.”

Simpler bag-handling changes are becoming pervasive. It is now common for travelers to tag their own bags in Europe, and it is catching on in places like China, Africa and the Middle East *.

* Here’s the airline industry paying off Rupert Murdoch’s WSJ to provide misinformation to Americans. I routinely travel across Europe, the Middle East and Asia on Lufthansa and other airlines, and have yet to observe self-tagging

The Transportation Security Administration late last year changed its policy to make it simpler for U.S. airlines to offer self-tagging *. American Airlines Group Inc., United Continental Holdings Inc. and Alaska Air Group Inc. are adding self-tagging kiosks across the country.

* The FAA, long accused of being too cozy with the airlines, is often cited as an example of "regulatory capture" - in which the airlines openly dictate to its regulators its governing rules, and arranging for beneficial regulation. During the Bush administration, the FAA actually called the airlines their “customers” and adopted a business model for evaluating its performance. Now, the FAA ironically calls the airlines "stakeholders."

In the U.S., airlines still must staff bag-drop stations because security rules require employees to check identifications of passengers checking bags.

Airlines for America* said it is lobbying the TSA to allow a biometric identification check, such as facial-recognition software or fingerprint readers, to remove humans from the process. The TSA said it “does not currently envision changes to bag security requirements.”

* The top lobbyist for the leading U.S. airline trade association Airlines for America, Shelley Rubino, is since 2014 the girlfriend of Transportation Department chairmen. House Transportation and Infrastructure Committee Chairman Bill Shuster (R-PA)...........conflict of interest?

Airlines also are moving to improve bag tracking ahead of a June 2018 deadline set by industry groups to install such technology.

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U.S. airlines lose bid to dismiss price-fixing lawsuit

Reuters  /  October 30, 2016

A federal judge rejected a bid by the four largest U.S. airlines to dismiss nationwide antitrust litigation by passengers who accused them of conspiring to raise fares by keeping seating capacity artificially low.

In a decision late Friday afternoon, U.S. District Judge Colleen Kollar-Kotelly said she could "reasonably infer the existence of a conspiracy" among American Airlines, Delta Air Lines, Southwest Airlines and United Continental Holdings to fix prices.

Kollar-Kotelly, who sits in Washington, D.C., did not rule on the merits of the proposed class-action case, which combines 105 lawsuits filed around the country and seeks triple damages.

The U.S. Department of Justice last year began its own probe into a possible conspiracy among the airlines, which, according to government data, command a roughly 69-percent domestic market share.

Passengers claimed that the conspiracy began in early 2009, and has resulted in higher fares and reduced flight choices.

They said the conspiracy, together with low fuel prices and higher fees for checking bags and other services, helped the airlines post a record $21.7 billion combined profit in 2015.

The airlines said the litigation should be dismissed because there was no proof of an agreement to collude, or that they reduced capacity in tandem.

But in her 41-page decision, Kollar-Kotelly pointed to statements by several airline executives about the need for "discipline" in seating capacity.

"Starting in 2009, the industry experienced limited capacity growth," the judge wrote. "Notably, as defendants' executives acknowledged, this restriction on growing capacity was a marked change within the industry. The court is satisfied that at this stage, plaintiffs sufficiently pled parallel conduct."

Kollar-Kotelly said this was true even for Southwest, though its use of a single aircraft type and other factors gave it a "limited ability" to reduce capacity.

American spokesman Matt Miller called the plaintiffs' claims "plainly deficient," and said the carrier is confident they will be found meritless.

Delta refused to comment. Southwest spokesman Brad Hawkins refused to comment. United refused to respond to requests for comment.

Michael Hausfeld, a lawyer for the plaintiffs, called the decision a "substantial victory" for passengers. "We look forward to moving forward aggressively to secure the relief the public deserves," he added.

The case is In re: Domestic Airline Travel Antitrust Litigation, U.S. District Court, District of Columbia, No. 15-mc-01404.

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'We have United employees that need to fly to Louisville tonight. … This flight’s not leaving until four people get off.'

“That rubbed some people the wrong way,” passenger Tyler Bridges said.

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The Courier-Journal  /  April 10, 2017

Audra Bridges, one passenger who filmed the man's removal, described what happened on the flight to the Courier-Journal

She said that passengers were told at the gate that the flight was overbooked and staff appealed for one volunteer to accept $400 and a hotel stay to take a flight at 3pm the next day. 

[Why would any reasonable company, with integrity, sell more seats than the aircraft has?]

All the remaining passengers were then allowed to board the flight - only to be told that another four people would have to give up their seats. 

United said four stand-by staff needed to be in Louisville for a flight the next day and the plane would not take off until they had seats.

Even when the offer was increased to $800, no one volunteered. Louisville is a four-and-a-half hour, 300 mile drive from Chicago. 

At this point, Bridges said a manager came onboard the flight and said four 'volunteers' would be randomly selected by computer.

A young couple was told to leave first, Bridges recalled. “They begrudgingly got up and left,” he said.

Then an older man and his wife, who refused.

“He says, ‘Nope. I’m not getting off the flight. I’m a doctor and have to see patients tomorrow morning,’” Bridges said.

The man became angry as the manager persisted, Bridges said, eventually yelling. “He said, more or less, ‘I’m being selected because I’m Chinese.’”

A police officer boarded. Then a second and a third. At this point the police officers yanked the man out his seat as he screamed (the video). 

Bridges then began recording, as did another passenger — as the officers leaned over the man, a lone holdout in his window seat.

As the man, his glasses falling off his face and his clothes in disarray, is dragged out other passengers cried out in disgust: 'Come on!' '

But this was not the end of the drama. After being removed, the man broke free from the officers grasp and managed to run back on the aircraft. He was crying 'I need to go home, I need to go home.' 

Bridges said he reappeared on the plane with a bloody face and seemed 'disorientated'.

Jayse Anspach was also on the flight. She said: 'United overbooked and wanted 4 of us to volunteer to give up our seats for personnel that needed to be at work the next day. 

'No one volunteered, so decided to choose for us. They chose an Asian doctor and his wife.

'The doctor needed to work at the hospital the next day, so he refused to "volunteer." decided to use force on doctor.

'A couple of  airport security men forcefully pulled the doctor out of his chair and to the floor of the aisle. 

'In so doing, the doctor's face was slammed against an arm rest, causing serious bleeding from his mouth. 

'It looked like he was knocked out, because he went limp and quiet and they dragged him out of the plane like a rag doll.

'Ten minutes later, the doctor runs back into the plane with a bloody face, clings to a post in the back, chanting, "I need to go home." 

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Partly the passengers fault for flying United.  United stinks and that's not new news.  I learned my lesson many years ago.  

My air travel over the last 10 years, 1.3 million miles American, 300,000 other airlines, United, zero. 

I'm retired now but my standard instructions to the company travel agent were:

a. minimum 2 jet engines,  b. no United, Spirit, or Jet Blue.

 

Edited by grayhair
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United CEO Oscar Munoz's internal company message to his people.

The doctor and his wife had purchased tickets and United accepted their payment........an agreement has been finalized. Then United asks them to get off the plane so that it can send a flight crew of 4 people to another city. I myself would never agree to give up my purchased seat assignment and deboard.

The cruncher is CEO Munoz having the gall to call this paying customer doctor "disruptive and belligerent". Talk about the pot calling the kettle black.

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image 1.jpg

 

image 2.jpg

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So really, the value of a contract that one might have with United is $1000.00 at most.  After $1000.00 they resolve a dispute with violence.  They couldn't or wouldn't increase their offer for a volunteer to give up a seat.  They could have increased the offer to $1500. or $2000. but no!  We reserve the right to screw you over and have some thugs teach you a lesson!

United is a POS.  Caveat emptor.

 

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Usually it is safer to fly than to drive.   But sometimes not...  This poor bastard trusted United to get him safely to his destination...

united2.JPG

Edited by grayhair
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The Guardian  /  April 11, 2017

White House press secretary Sean Spicer said he was “sure” that Donald Trump had seen the video.

“I don’t think anyone looks at that video and isn’t a little disturbed that another human being is treated that way,” he told reporters. “Clearly watching another human being dragged down an aisle, watching blood come from their face after hitting an armrest or whatever, I don’t think there’s a circumstance that you can’t sit back and say this probably could have been handled a little bit better, when you’re talking about another human being.”

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CNN  /  April 12, 2017

The man who ended up bloodied and screaming Sunday night, Dr. David Dao, had initially agreed to get off the plane, passenger Jayse Anspach said.
 
"Him and his wife, they volunteered initially," Anspach said. "But once they found out that the next flight wasn't until (Monday) at 2:30 p.m., he said, 'I can't do that. I gotta be at work.' So he sat back down."
 
The harder the officers tried to get the man to leave, the harder the man insisted he stay.
 
"He was very emphatic: 'I can't be late. I'm a doctor. I've got to be there tomorrow,' " Anspach recalled.

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13 hours ago, kscarbel2 said:

The so-called police/airport security shown in the video are actually nothing less than thugs.

Who would ever have thought that we'd see thugs dragging 69-year old customers off of a passenger aircraft right here in America for no other reason than to accommodate a transiting flight crew ?

For sure United should have handled this with $$$.  end of problem.  But it surprises me that these airport cops get off the hook from a PR perspective.  I can't believe any United mgr said- "beat the snot out of this guy-get hjim off however you do it".  I gather the reason they were bumping people was because a flight crew had to be relocated ASAP to make another flight work??

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Back about 20 years ago when I was doing 50K miles a year I used United as my preferred airline. Then they steadily got worse and worse; tighter seats, lousy in-flight service, and higher and higher fares and fees. I used them once in the past few years when I went to Korea and it was as bad as I remembered.

The best I ever flew was ANA to Tokyo non-stop from Dulles. The flight attendants cleaned the bathrooms every hour and they treated every passenger as a VIP. On the way back to the states Dulles was closed by a snow storm. ANA paid for a hotel room, gave us a $100.00 meal voucher, free internet, transportation to the hotel, and a long distance phone card when we had to stop in Chicago. The United passengers that had were on the shared flight had to pay for everything that ANA comped to us. 

I just don't fly that often anymore, but when I do I usually use Southwest. Good schedules, boarding is no more of a zoo than it is on any other airline, and their fares are lower than anyone else.

I have never been on a flight that fully boarded and then was asked to give up a seat due to overbooking. The drill is that the ticket agent at the gate asks for volunteers and then selects the unfortunate ones who will be bumped if there are no volunteers. I blame poor management for ever letting it get that far.

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Since when do police/airport security wear grubby blue jeans? 

Answer:  They never have.

Anyway, note this new video from 0:49.

The paid thug tells the doctor, the paying customer seated in his purchased seat, "You'd rather go to jail than just get off?"   Jail?   On what charge?

.

 

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Was listening to a talk show and several experienced fliers said foreign airlines, especially Asian ones, treat their passengers much better than American based airlines! Another frequent flier recommended that even if you use an American airline, you should book it at one of their foreign bases!

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