British Airways has recently taken another significant step closer to merging with the major Spanish airline, Iberia. However, the enormous 3.7 billion pounds pension deficit still remains a major threat to the deal going through, though considerable progress has been made. The next three months will decide the fate of the airline as the deal will be thoroughly vetted. In the meantime, the trade union, Unite, have promised further strikes should a deal not be struck within the next week. Considerable disruption has already been caused by a series of strikes and combined with other factors such as the volcanic ash cloud from Iceland, tourism all over Europe and beyond is, in many places, at an all time low.

The deal between British Airways and Iberia is considered by many as an essential step forward in the recovery of the airline industry overall. With the worst downturn ever, the airline industry is in desperate need of help. The biggest problem with British Airways is its pension deficit, though while the airline proposes to close its pension deficit within sixteen years, pension regulators in the UK are demanding that this be done within ten years.  If the UK pensions regulator can reach a compromise with British Airways, then there is hope for the airline and an opportunity for them to come up with a plan. Keith Williams, the head financial officer of the airline has stated that the response from the UK pensions regulator has so far been positive, though he has also admitted that the amount of time required to fill the funding deficits is still very high.

The agreement has been deemed a positive step by Iberia. It now has to make its own decision regarding the pension recovery plan. If the airlines agree on a recovery plan, the merging of the two companies should go through later in the year. This new organization will be called the International Airlines Group, expected to employ 60,000 staff and have yearly revenues of approximately £12.5 billion. Analysts have stated that the merger should not be derailed and that pension fund deficits should be completely closed by 2019.

Meanwhile, the largest trade union of British Airways, Unite, is still locked in an ongoing dispute with the airline over various factors involving its cabin crew staff. The union has given the airline seven days to work on finding a compromise otherwise a new strike ballot should go out next week. The strikes have caused widespread disruption although BA still aims to keep its long-haul routes up and running throughout the turmoil. BA has also stated that it plans to improve its contingency plans to minimize the risk of further disruption to passengers.

Travel Topics: Air Travel, Airlines, British Airways, Iberia, travel

Due to a number of years of financial hardship, the message that the airlines of the United States are giving now is quite a different message compared to what people have been getting used to after being spoiled by cheap airfares for so long. The industry, hit hard by the global downturn and various other factors, is set to increase its prices and offer fewer seats than before. This summer is going to be considerably more expensive for those tourists who plan to take domestic or overseas flights, so where possible, busses or trains may be a more desirable option.

The crisis affecting the airline industry is not a particularly new thing, but it is now reaching a critical mass, in which there will need to be drastic changes over the number of services offered and the prices of seats. Spikes in fuel prices in 2008 certainly didn’t help either, and with the global recession following closely afterwards, airlines have felt an extremely powerful impact. Cutting operational costs by lowering the number of available flights and routes and charging more for seats is the only inevitable outcome for this, and it is highly likely to have a major impact on holidays this summer.

Since the summer is now here, the demand for flying is back, and in spite of recession, many, many people are still planning to spend some weeks away this summer. Because of this, many flights are already filled far in advance so holidaymakers planning to get something booked and fully prepared might be disappointed if they don’t organize everything carefully. Because of this, airlines finally expect to make profits however, which does mean that the travel industry should start to recover and rising prices should eventually reach a peak and remain more stable.

Some airlines are using a number of different strategies to help ensure their survival. For example, UAL, a company which has recently made a number of capacity cuts, is planned to merge with Continental Airlines. Other airlines are also saying that they have learned some valuable lessons after years of rapidly expanding their portfolio of routes and lowering their prices. In the face of rising oil prices and continuing recession still affecting many industries around the world, airlines have been going bankrupt everywhere and now those which survive must tread extremely carefully.

Holidaymakers will also want to be aware of exactly how the rising costs are going to be affecting them this summer. A popular strategy that more and more airlines are starting to use is charging for services that were normally included in the price of the ticket. This has also become common in the budget airlines in Europe, in which these extra services such as bag check-in and priority boarding can often be more expensive than the actual ticket itself. These rules often become very strict as well, with excessively high penalties for missing something in the terms of carriage or going over the baggage weight limit.

A strike which started Saturday morning when hundreds of pilots from Spirit Airlines walked off their jobs continues to disrupt flights for customers because an agreement could not be reached over pilot’s salaries.

The strike was started by the pilot’s union of Spirit Airlines when pilots for the airline complained their pay was lower on average when compared to other airlines.  Spirit Airlines continues to discuss the issue with the pilot’s union and plans on a resolution within the next few days.  For now, Spirit Airlines has canceled all flights until Thursday as a result of the strike.

Customers of Spirit Airlines whose flights have been canceled will receive credit for the full amount of their airline tickets as well as a $100 credit toward future trips with Spirit Airlines.

Travel Topics: airline pilots strike, airline strike, airline union, canceled airline flights, Spirit Airlines, Spirit Airlines strike