Newspaper article International New York Times

Start-Ups Disrupt the Travel Trade

Newspaper article International New York Times

Start-Ups Disrupt the Travel Trade

Article excerpt

Upstarts like Uber, Airbnb and a few small airlines are creating ripples in the established order.

For a heads-up on what to expect as the pace of business travel picks up in early September, consider that airlines all summer have been reporting planes more full than ever, flight delays are at six- year highs and hotels are raising rates.

And everyone in the aviation industry is keeping a wary eye on the splendidly named Bardarbunga volcano that is rumbling and threatening to erupt in Iceland. The disturbance four years after the last major Icelandic volcanic disruption, when the confoundingly named Eyjafjallajokull volcano spewed ash into the atmosphere that shut down European airspace for six days and stranded about five million travelers in the spring of 2010.

So enjoy your holiday as much as you can. But keep in mind that getting to your destination may entail headaches. About 14 million people, up 2 percent from last year, are boarding those already nearly full airplanes during the travel period from Aug. 17 to Sept. 2, according to Airlines for America, the industry trade group.

As fares and add-on fees steadily rise, airlines continue "getting their financial houses in order," said John Heimlich, the trade group's chief economist. In the first six months of this year, he said, the top nine domestic carriers earned $3.8 billion, compared with $1.6 billion during that period in 2013. And that was despite the clobbering that airlines (and passengers) took over the winter, when bad weather forced the cancellation of about 100,000 flights.

Clearly, the airlines are enjoying this era of growth, but for fliers, there is a sense of resignation. The J.D. Power North American Airline Satisfaction Study for this year underscores that, finding that overall passenger satisfaction with airlines, even considering added fees, rose significantly this year.

"It isn't that passengers are satisfied with fees, it's that they are simply less dissatisfied because they realize that fees have become a way of life with air travel," said Rick Garlick, the firm's lead travel and hospitality researcher.

There are some tiny signs of disruption in the status quo, however. As airlines have merged and consolidated routes, the era of heady competition in air travel has faded. Still, a few small start- up airlines have begun emerging again, among them La Compagnie, a discount all-business-class airline that began flying a single Boeing 757 between Paris and Newark this summer.

Also, the impact of millennial-generation business travelers is creating some ripples, if not yet waves, in the established order, at least in the lodging and ground transportation markets.

For example, United Airlines has begun promoting the use of Uber, the ground-transportation innovator that allows people to hail rides online, using its mobile app. …

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