The New York Times is reporting that United and Continental have hit a snag in their merger discussion. "More specifically," according to the Times, "the two companies have not been able to reach an agreement over the value of the stock prices used to compute the exchange ratio in a stock-for-stock deal, these people said. The ratio would affect the price United would ultimately pay for the deal."
The disagreement doesn't have any direct impact on consumers, but since the merger does, and the disagreement is being described as a "deal-breaker," it's worth explaining a bit. If the deal goes through, United will pay Continental in United shares. Continental wants to use a stock price from before news of a possible merger broke, but United wants to use the price from the day before the merger is formally announced, if and when that happens. According to the Times, "under Continental’s methodology, the airline would receive more United shares ... under United’s methodology, the exchange ratio would be much lower." The difference between the two airlines' target prices is roughly 20 percent at this point, so we're talking about a serious difference in shares.
OK, now that all that financial stuff is out of the way, what does it all mean?...read more»
Our sister site, Airfarewatchdog, now allows travelers to rate and review their flights, as well as the airline they flew. Similar to TripAdvisor, the feature is designed to give consumers a chance to share their opinion, tips, and fair warnings with other readers, and gives travelers a new way to determine whether or not a good price is actually a decent value.
The functionality only launched last week, but there are already some good reviews on the Boston-to-San Francisco and Seattle-to-New York pages. As you can see, travelers can rate the check-in process, in-flight service, and seat comfort, and give an overall rating and detailed review.
Honestly, some sort of user-generated review function for the airline industry is long overdue. There are so many variables when it comes to flying—from gate locations and nearby airport amenities to plane type and size—that getting a first-hand sense of what you can expect is essential....read more»
The Associated Press (AP) reports that while most travelers stranded by the eruption of the Eyjafjallajokull volcano in Iceland will be home today or early this week, many remain stranded abroad, more than two weeks after the volcano effectively shut down European airspace. Most airports in Europe are now open.
The AP writes that "Mark Tanzer, chief executive of Britain's ABTA, which represents British travel agents and tour operators, said about 100,000 stranded British travellers should have been returned home by Monday morning. About 35,000 more will remain marooned until Friday." Thousands of travelers are stuck in destinations such as Egypt and Thailand.
In the meantime, airlines are asking ticketed passengers to give up their seats for people affected by the volcano....read more»
Roger Yu at USA Today is reporting that fares to Europe have plummeted this spring. Surprisingly, however, the eruption of the Eyjafjallajokull volcano in Iceland, and the subsequent chaos and disorder in the industry, is not to blame. So far.
"The volcanic ash cloud from Iceland that shut down European airports the past week isn't a factor in the latest round of price cuts," Yu writes, "but airlines could lower fares further if travelers are spooked by headlines and decide to avoid Europe this year." Instead, Tom Parsons, CEO of Bestfares.com, tells Yu "the drop stems from airlines' aggressive pricing earlier this year in anticipation of robust travel that hasn't panned out."
Basically, the airlines misjudged the summer travel market, and are now rushing to compensate. "The volcano," Parsons says, "[also] puts more pressure on airlines to bring prices down and open up more seats for lower prices."
The overall analysis jives with the fare tracking data our own airfare expert, Patricia Magana, has been collecting over the past few months....read more»
Now that the volcano in Iceland is subsiding, travelers and travel industry professionals are assessing the damage: 95,000 cancelled flights, $1.7 billion in lost revenue, and untold inconvenience.
To that last point, I want to know if any SmarterTravel readers have had their travel plans disrupted by the volcano, or if you're worried that future travels may be affected. Personally, I'm heading to Spain and France in less than two weeks, and I'm crossing my fingers that the dozing volcano doesn't wake up again.
So, whether you were stranded or simply fear that the worst is not yet behind us, leave a comment below and share your story. Thanks!...read more»
The Department of Transportation (DOT) announced it will not approve requests, from five airlines, for a temporary exemption to the tarmac delay rules. In a statement, DOT secretary Ray LaHood said “Passengers on flights delayed on the tarmac have a right to know they will not be held aboard a plane indefinitely. This is an important consumer protection, and we believe it should take effect as planned.” The decision comes a week before the rules take effect, on April 29.
The five airlines that requested an exemption were JetBlue, Delta, American, Continental, and US Airways. JetBlue, Delta, and American all requested an exemption at New York's JFK airport, which, due to construction, is currently operating without what is normally its busiest runway. Continental asked for a reprieve at nearby Newark International, citing proximity delays from JFK. US Airways made a similar claim in its request for an exemption at Philadelphia.
But the DOT wasn't having it....read more»
Since we published The World's Worst Tourist Traps last weekend, hundreds of you have left comments on the story. Many of you offered your own picks, but some wrote in to share what you love about the destinations we featured. As we said in the story: "one man's trap is another man's treasure."
And we're convinced. After reading your comments, I'm ready to hit Niagara Falls for the Maid of the Mist tour and marvel at the Leaning Tower of Pisa. Still not sure I'm ready to kiss the Blarney Stone though (read on to find out why).
So here we go. Here are your reasons for not missing:...read more»
"We have recently held discussions with United Airlines regarding a possible combination between our two airlines. After an extensive review and careful consideration, our Board of Directors has decided to discontinue those discussions.
"While it is our policy not to comment on rumors concerning strategic transactions, because of the persistent rumors about a possible transaction with United Airlines we believe it is appropriate to clarify the status of those negotiations. In the future, we will continue to follow our policy of not commenting on potential strategic transactions until we have entered into a definitive agreement with respect to a specific transaction.
"It remains our belief that consolidation makes sense in an industry as fragmented as ours. Whether we participate or not, consolidation that
leads to a more efficient industry better able to withstand economic volatility, global competition and the cyclical nature of our industry is a positive outcome."
Well, then. This really shouldn't come as much of a surprise. United and US Airways have done the merger dance several times over the past decade, with each courtship ending in more or less this fashion. And, let's face it: The death of this merger is probably a good thing for consumers....read more»
Alaska just announced a top-to-bottom reorganization of its baggage fees. Bags one through three will now cost $20 each, and bags four through 10 will cost $50.
The change represents a $5 hike for the first bag, no change for the second bag, and $30 reduction for the third bag.
Bags four through 10 used to cost $100, so the new fee is a 50 percent cut on the old one.
Elsewhere, Southwest has doubled its unaccompanied minor fee to $50. Alaska has actually lowered its unaccompanied minor fee to $25 for nonstop flights and $50 for connecting flights. Previously, the airline charged a flat $75 fee....read more»
Here's another addition to the annals of Creative Ways Airlines Try to Save a Few Bucks: non-reclining seats.
Erstwhile ultra-low-cost-carrier Spirit has begun installing stationary seats on two new Airbus A320 aircraft. The Sun-Sentinel reports that so far passengers aren't exactly enamored with the new accommodations. Spirit customer Eve Greene told the Sun-Sentinel she "she was confused and frustrated by the fact that the seats didn't recline," and said there's a "big difference" in terms of comfort, compared to Spirit's conventional reclining seats....read more»