Short Takes; Overnight News

Airlines Could Get More in Ancillary Revenues
Even as the economic crisis caused Air Canada to question baggage fees, if the world’s airlines would copy Ryanair and easyJet, they could garner an additional $12 billion in ancillary revenue, according to ancillary revenue specialist Collinson Latitude, part of the Collinson Group which said, globally, airlines are leaving $6 per passenger on the table. The company based figures on the International Air Transport Association’s world passenger market of two billion passengers last year. Ryanair and easyJet made an additional $12 per passenger in ancillary revenues in 2007. Collinson Latitude, which designed Virgin Blue’s loyalty program, also said that such programs offer opportunity to build loyalty that takes tailored marketing to the next step by gaining customer insights. The company will be speaking at the EyeforTravel Ancillary Revenue Conference in London May 19 and 20.

Cap & Trade Quest Harder
Efforts to put cap-and-trade legislation on a fast track, exempting it and other legislation from a 60-vote passage, were killed Wednesday when the U.S. Senate voted not to include it in its reconciliation package which allows for passage with only 50 votes. The move, which matches the House decision not to include the climate change measure in reconciliation, significantly jeopardizes cap and trade legislation passage this year although the Obama Administration could do it through regulatory rulemaking. .

Emissions, the Real Culprit
"We know the technology exists to tackle impacts of the transport sector on Europe's environment,” said European Environment Agency (EEA) Executive Director Professor Jacqueline McGlade, in a European Parliament report on transportation’s contributions to emissions – Transport at a Crossroads – issued this morning. “However, many vehicles rolling off production lines are anything but green, the freight sector still favors the least efficient transport modes and railways across the EU still do not have a unified system."

The report, an annual publication from the EEA's Transport and Environment Reporting Mechanism (TERM), refreshingly focused on surface transport at a time when aviation is painted as the main villain in green house gas emissions. The report monitors the progress and effectiveness of attempts to integrate transport and environment strategies.

The report found that emissions of GHGs have increased by 26% or 180 million tons, between 1990 and 2006, excluding international aviation and marine transport. Representing a higher increase than the annual national emissions for 2006 from Belgium; 132 million tons, or Romania; 157million tons.

Currently, 28 percent of the total U.S. carbon emissions come from the transportation sector. The majority of these emissions—82 percent—arise from highway travel alone.

Between 1996 and 2006 the total freight volume measured in ton-kilometers for EU member states increased by 35 % or 650 million ton-km, significantly more than the total freight transport of Germany, said the report, adding rail and inland waterways freight saw a decline in market share.

Car ownership is on the rise, said the agency. Between 1995 and 2006 car ownership levels in EU-27 increased by 22%, or 52 million cars, representing an increase equivalent to the entire fleet of UK and Spain put together. The number of kilometers travelled by passengers in EEA member countries grew by 65million kilometers in 2006.

While air pollutants from vehicles are declining, but air quality is still a problem across Europe, it said, calling for transport to be decoupled from economic growth. “Well designed policies to manage demand for transport can reduce transport volumes are needed,” it said. “This would improve the transport efficiency of the economy and decouple transport growth from economic growth. The report also confirms that price signals play a major role in the choices made by consumers; with a 20% increase in demand for bus services related to a 10% increase in fuel prices.”

McGlade called for redoubled efforts for reducing emissions. "We still need clear, measurable, realistic and time-related targets for reducing greenhouse gas emissions, air emissions and noise from transport,” she said. “Perhaps more critically, consumers have indicated through their reaction to volatile prices last year, that fuel and road pricing clearly has a role to play in tackling transport demand."

This week the House Committee on Science and Technology’s Subcommittee on Technology and Innovation held its third hearing to discuss the impact of the transportation system on the environment and called for increased research on surface transportation.

The planning and design of surface transportation infrastructure can influence congestion, the number of vehicle miles traveled, and the amount of energy embodied in the system from materials, said the committee.

“Climate change mitigation efforts largely focus on improving our current fuel sources and developing alternative fuels. Today there is an opportunity to think more broadly about the impact of our transportation infrastructure on the climate and what research is needed to begin minimizing our impact in more far-reaching ways,” stated Subcommittee Chair David Wu (D-OR).

“We need to think about improving the energy efficiency of our transportation system, not just the cars and trucks on it,” added Wu. “For example, what are the modeling tools that would help communities develop an effective mixed-use transportation system of cars, buses, light rail, trolleys, and bikes like we have in Portland? If we are serious about congestion mitigation and traffic management, what’s required to realize these goals?”

Wu called for increased funding for forecasting and analytical tools to support state and local global warming studies; tools to assess system performance; a study of travel behavior and demand management as well as congestion and energy use in materials.

Charter Flights More Risky
In the wake of the accident that caused the death of 14 in Montana, the National Transportation Safety Board released its findings that air charter deaths reached the worst level since 2000.

In its annual review, NTSB focused on medevac helicopters but general aviation remained the least safe form of air travel with 495 of the 563 deaths in the civil aviation sector last year. It noted that there were 1,559 general aviation accidents last year.

ASA Returns to Normal
After grounding 60 CRJ 200s for inspections, Atlantic Southeast Airlines operations returned to normal last night after the cancellation of 277 flights. The aircraft were grounded after an internal audit found that the engines on the aircraft may not have been properly inspected. The aircraft represented 40 percent of the airline’s fleet.

Pinnacle Resolves Tax Issue
Pinnacle will pay the Internal Revenue Service $3 million in back taxes, resolving a dispute in which the IRS claimed the airline owned $35 million in back taxes for 2003-2005. Spokesperson Joe Williams said the dispute was a “difference of opinion” between the airline and the IRS and characterized the $3 million payment as a recognition that Pinnacle’s position was correct. The resolution of the dispute equals a $15.4 million after-tax gain for the company in the first quarter based on the $1.8 million in interest and $13.6 million of tax expense.

Overnight News

Skyjet halts operations

BA parks planes as Iberia merger stalls

Airlines Prepare To Leap Back Into Hedging Game

Airbus rejects doubts over A380 delivery goal

Austrian Airlines to cut work hours, salaries

Cap and Tax Collapse

Air China To Wholly Own Cargo Unit After CNY718M Stake Buy

Oberstar: Virgin America May Be Violating Ownership Rules

Sahara Takes Jet Airways to Court

American Air In Talks With Citi To Boost Cash - Report

Air Canada Likely To Need Court Protection - Analyst

SIA, Emirates Lose Australia Appeal In Cartel Case

Air China Agrees To Buy Out Cargo Unit

Qantas To Top Up Pension Plan