Industry News 4-27-2007

*ASTA goes to Washington
*28th Montreal Jazz Festival Nears
*New Airline Surcharge at LAX

The American Society of Travel Agents (ASTA) testified April 20 before the Aviation Subcommittee of the U.S. House of Representatives Committee on Transportation and Infrastructure. The testimony, by ASTA senior vice president for legal and industry affairs, Paul Ruden, recommended that Congress take immediate action in several areas. Specifically, ASTA advocated that Congress limit federal preemption of state consumer protection laws; require that service policies be integrated into airline contracts of carriage; replenish Department of Transportation (DOT) enforcement budgets and convene a meeting to develop a plan for resolving operational issues such as tarmac detentions.

When the issue of passenger rights was addressed in the U.S. Senate and House of Representatives in 1999, ASTA was the lead industry organization backing a legislated bill of rights. However, the decision was made to allow the marketplace to govern itself.

ASTA now believes that the DOT should play a pivotal role in assuring that airline customers “be treated as they deserve to be treated,” said Ruden. “The most valuable service that DOT can perform in the short term is to establish and manage a joint fact-finding process,” Ruden said, adding that “being informed by the country’s experience with security measures after the 9/11 attacks, ASTA believes everyone interested in these issues must be sensitive to the problem of unintended consequences that can arise from regulatory strictures imposed on a very complex and highly networked system.”

28th Montreal Jazz Festival Nears
Some of the greatest names in music are set to appear at the 2007 Festival International de Jazz de Montreal. This year’s roster includes Wynton Marsalis, Keith Jarrett, Branford Marsalis and George Thorogood & the Destroyers. The festival takes place from June 28-July 8, and tickets are on sale now.

A special “Festival Kit” includes priority access to concert tickets; a ticket for the Jazz d’ici La Presse series, showcasing local musicians; a gift certificate for $20 redeemable at the Casino de Montreal and a A Friends of the Festival card providing privileged access to the Jam Sessions Movado in the Hyatt Regency Montreal and a compilation CD. The fee for the Kit is $36 per person.

Accommodations for the event range from hotels downtown near the Festival site to several locations in Old Montreal.

New Airline Surcharge at LAX
American, Delta, Northwest and US Airways have followed the lead of United Airlines by adding a $10 surcharge on all flights departing from Los Angeles International Airport (LAX). United initiated the surcharge on April 11, citing a rent increase implemented at LAX last year.

“Passing along this surcharge to our customers is not our preferred action, but the recent sharp increase in costs to operate at LAX has left United with no other option,” said United senior vice president of planning Kevin Knight. “We have a great interest in LAX developing into a world-class airport, supported by a long-term modernization plan, but we have no interest in paying higher fees without greater benefit for our customers.”

For its part, Los Angeles World Airports (LAWA), the operating entity for LAX, stated that the United surcharge “wildly exceeds the airline’s full and fair share of the costs to maintain and operate its terminal facilities at LAX.” According to LAWA, United stands to generate more than $48 million per year from the surcharge, considerably more than the $10 million per year United will pay in added rent.

“United appears to be exploiting a justified increase in its maintenance and operations costs in order to dramatically increase profits on Los Angeles passengers,” LAWA said.

United says it has joined other carriers in bringing legal action against LAWA for the rent increase, claiming that the “unjust and unreasonable” increases are a breach of contract.

Additionally, filings with the U.S. Department of Transportation reveal that AirTran Airways, Frontier Airlines, Southwest Airlines and US Airways and others have posted complaints over the LAX airport charges. International carriers such as British Airways, Cathay Pacific, Japan Airlines, Qantas and Swiss have also filed objections with the DOT over the LAWA rent increase.

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