Airline Tries Streaming In-Flight Films

The days when every passenger in the cabin of a long-haul flight had to watch the same family-friendly movie on an overhead screen are quickly coming to an end.

American Airlines has announced that it is testing an in-flight video system that enables passengers to wirelessly stream movies and TV shows from an onboard library to their laptop computers and other electronic devices.

American began testing the system last month on two wide-body jets flying across the country and will expand the testing this summer. If all goes well, American said, it will be the first domestic airline to provide streaming service on all Wi-Fi-enabled planes, starting this fall.

The Fort Worth airline also said it would expand its offering of wireless Internet by summer to 382 aircraft from 208 planes.

Of course, the airline industry offers in-flight entertainment not solely to keep passengers amused but also to generate revenue.

American Airlines has yet to reveal what it will charge to use the in-flight streaming system, but Bob Herbst, an independent airline consultant, said the revenue from onboard entertainment systems could be huge.

"If the industry could get just $4 from half the passengers for in-flight entertainment, they would gain another $1 billion in revenues per year," Herbst said.

Passengers are likely to pay for such entertainment as long as the prices are comparable to what they pay at home, said George Hobica, founder of the travel website Airfarewatchdog.

"If people are willing to pay for streaming video at home, it's likely they'll do so in flight, and this could be an interesting new profit center for airlines," he said.

Alaska Airlines last month increased the prices passengers must pay to rent its portable in-flight entertainment system, the digEplayer, to $14 from $12 for flights longer than 4 1/2 hours. F or shorter flights, the Seattle airline charges $8, up from $6.

Travelers fear terrorism, unrest

The terrorist attacks on Sept. 11, 2001, prompted many American businesses to consider buying insurance policies that pay to evacuate or provide emergency medical help for employees traveling abroad on company business.

And the fear of being a victim while traveling remains.

Nearly half of business travelers surveyed last month said they would refuse to travel because of fear over terrorism and political unrest.

The survey of 1,000 Americans by Opinion Research Corp. International also found that 19 percent were fearful of an infectious disease outbreak.

But since al-Qaida leader Osama bin Laden was killed last week in Pakistan, there appears to have been no change in the sales of business-travel insurance policies, said Jim Villa, a senior vice president for the Chubb Group of Insurance Cos., which sponsored the survey.

"I think with people it's a wait-and-see attitude," he said. "It's still too early to tell."

Hertz charges $9 a gallon for gas

Even with the surging price of gasoline, $9.29 a gallon seems extreme. But that is how much Hertz Rent-a-Car is charging customers at Los Angeles International Airport and other airports who don't pay ahead of time and forget to refill the tank when they return their cars.

As of last week, a gallon of regular gasoline in the Los Angeles metropolitan area was selling for an average of about $4.30, according to the Automobile Club of Southern California.

Hertz isn't the only rental agency asking customers for more than double the average pump price. Dollar and Thrifty were charging $8.99 a gallon at some airports, according to a survey by USA Today.

Hertz spokeswoman Paula Rivera said the price reflects the cost of gasoline and related operational charges for what the company calls a "convenience" to customers.

"We expect customers will return the car with the same amount of gas when rented," she said.

Airfare bargains becoming rarer

As airfares have increased over the last year, persistent bargain hunters have still been able to lock in occasional great deals. But airline industry experts say those rock-bottom deals are getting scarce.

To offset surging fuel costs, airlines are reducing the number of available seats. Only a few years ago, most airlines parked unneeded planes on desert airstrips and canceled less-popular routes in response to dwindling demand caused by the recession.

But now that demand is growing and airline capacity continues to shrink, the remaining seats will cost more.

"Seats will be more difficult to find, especially deeply discounted ones," industry analyst Ray Neidl said.

Delta Air Lines Chief Executive Richard Anderson, for example, told analysts last week that the carrier plans to cut overall capacity 4 percent after Labor Day to compensate for fuel costs. Last quarter, Delta paid 30 percent more for fuel than it did a year earlier.

Over the next 18 months, Anderson said, the airline plans to retire 140 planes.

US Airways' chief financial officer, Derek Kerr, told analysts his airline planned to cut capacity 2 percent in the last three months of the year in response to fuel costs, which he said we re up 33 percent on a per-gallon basis compared with a year earlier.

That means airfares will go up, forcing travelers who can't afford the higher prices to make alternative plans, said George Hobica, founder of the travel website Airfarewatchdog.

Business travelers who must fly to appointments will bear the brunt of the increases, he said. "Business travelers will no doubt pay more because more of them are 'must travel' fliers."

Hotel prices to keep rising

If you insist on traveling this summer, don't expect to have better luck finding discounted hotel rooms.

Demand for hotel rooms has been growing over the last year and will be 2.5 percent higher this summer than last summer, according to Smith Travel Research, a hospitality consulting firm in Tennessee.

The growing demand will push room rates to an average of $103 per night this summer, up 4.1 percent from last summer, according to Smith Travel's latest forecast.

"This summer will be the continuation of industrywide rate recovery," said Brad Garner, the consulting firm's chief operating officer.

Garner predicted that this July, the nation's hoteliers would match the milestone set last July when the hotel industry sold more than 100 million rooms in a single month.

But he cautioned that the rising prices for automobile and airline fuel could keep travelers at home and quash the industry's hopes for a booming summer.

Smarte carte rentals tumble

Passengers are not the only ones being stung by fees to check luggage.

Smarte Carte, the company that rents out luggage carts at 150 airports in North America, has had a 25 percent to 30 percent drop in revenue nationwide since 2007 because travelers are packing fewer suitcases to avoid the bag-check fees, according to a report by the Burbank-Glendale-Pasadena Airport Authority, which operates Bob Hope Airport in Burbank.

At Bob Hope Airport, Smarte Carte's business is down 40 percent since 2007, according to the report. A Smarte Carte representative could not be reached for comment.

To help Smarte Carte survive, the airport authority agreed to cut the fees it collects from the company for its cart rental and cellphone charging stations. Instead of paying a minimum of 2 4 percent of its gross sales, Smarte Carte now pays 10 percent.