If the Federal Aviation Administration (FAA) gets its way, American Airlines will be shelling out a “$24.2 million civil penalty for American Airlines’ failure to properly inspect wire bundles in the wheel wells of its MD-80 aircraft.”

This lack of inspections is said to have created problems on thousands of flights in 2008. A CNN article by Aaron Smith titled “FAA hits American Airlines with biggest fine ever” states that “the FAA determined that the airline operated 286 of its MD-80s on a total of 14,278 flights ‘while the aircraft were not in compliance with federal regulations.’”

The airline has 30 days to respond to the fine, which is considered the largest fine ever placed on an airline, and negotiate a lower fine. Based on quotes from the company’s spokesman, it appears the company plans on challenging the proposed penalty, stating “we are confident we have a strong case and the facts will bear this out.” The company is claiming that the noncompliance never posed a flight safety issue, and that it considered the fine unwarranted since the issue occurred more than two years ago.

Considering the fact that no injuries were caused by the lack of compliance, a fine as high as $24.2 million seems a bit steep. The largest FAA fine prior to this was one received by Southwest Airlines of $10.2 million, later reduced to $7.5 million.

I understand the importance of regulations and of having consequences if companies do not follow regulations, but is the FAA using American Airlines as a example to scare other airlines into following all regulations? What do you think about the fine? Is it on par with the “offense?”

Have you ever considered what happens to all the plastic cups and soda cans you give the flight attendant during your flight? If you guessed a garbage dump, you would be correct.

The question is why? You would think it’d be easy for airlines to collect cans, plastic cups and paper products for easy recycling but it seems airlines aren’t putting forth enough effort in being “green.”

A nonprofit environmental group called Green America recently released a report called “The Sorry State of Recycling in the Airline Industry,” which provides statistics on recycling efforts made by airlines. One startling statistic from the reports states that of the 1.3 pounds of trash left behind by a passenger, only 20% is recycled. However, nearly a pound of the trash left behind is recyclable, meaning airlines are not doing enough to forge a cleaner existence.

While airlines seem to be lagging in setting up sufficient recycling programs, Green America asks passengers to ensure their recyclable waste isn’t being tossed in the trash. Green America “suggests concerned passengers can take action by asking flight attendants whether any items are recycled; removing their own cans, plastic bottles and newspapers from the plane and recycling them at the airport; and writing to the airlines to urge them to do more.”

What is your take on this? How assertive/aggressive should airlines be in recycling waste product from their passengers? What are some of the inhibitors to setting up an inclusive policy?

Imagine arriving at the airport with nothing but your purse or a small carry-on bag with you. No need to worry about whether your luggage is over the weight limit, or having to drag an overstuffed carry-on through the airport as you wait for your flight.

Then, when you land, think about not needing to pull a bag out of the overhead bins or waiting around the baggage claim for your bag to come flying onto the conveyer belt.

This could be possible through a new alternative offered by UPS. Capitalizing on frustration related to the baggage fees charged by most of the major airlines, UPS is now selling luggage boxes (in various sizes) that allow travelers to mail their travel belongings ahead of time to their destination, without all the hassles of dragging their luggage around.

Considering airlines have made $769 million in baggage fees during the first three months of 2010, it’s no wonder UPS is trying to jump into the action.

For those who plan ahead, this is a perfect alternative to dealing with extra fees charged by airlines. And as an added bonus, UPS would provide tracking numbers and email alerts as to the status of the shipped luggage.

Would you consider the alternative to shipping your luggage to a destination instead of paying for checked baggage?

Further evidence that the “Great Recession” has had a significant effect on consumer behavior:

– In a recent Mintel consumer study, a substantial 76% of respondents state that they are “smarter shoppers” than they were a year ago.

– Almost seven in ten say they are trying to buy only necessary items, such as food (and that last number includes about half of those households earning more than $100k annually).

But price is not the only consideration. Only half of the consumers in the survey say that low price is more important than good customer service, while seven in ten say they only buy brands they trust.
What does this mean? It means that the definition of “smart shopper” is not just about price, it is more and more about value. And the concept of value has been extended to include trust in the brand, as well as good customer service.

These numbers look very much the same as they did a year and even two years ago, when the recession was just beginning to alter consumer behavior. This means that consumers are settling into a “less is more” mindset, while expecting more from their brand and shopping experiences.

Anyone in Financial Services (along with other industries) who is not conducting branding studies and consumer experience research should probably take note.

I recently read an interesting article on CNN.com—“Hotels connecting dots to online reviewers” by Christopher Elliott.

It talked about how more and more hotels are trying to connect anonymous online reviews to past guests, with some hotels even rewarding past guests for positive reviews and contacting guests who wrote negative reviews. The article mentioned how some hotels were rewarding those who wrote positive reviews with things such as gift baskets or discounts, while negative reviews could “generate an e-mail inviting the guest back for a free stay or offering frequent-stayer points as on apology.”

However, some hotels are going over the edge by sending emails to encourage past customers to “reconsider” a negative review, or put a note in their files to alert staff to difficult or disgruntled customers.

Although the story didn’t shock me, I still shake my head at what some managers will do to give the “perception” that the services and accommodations provided are superior to the rest. Why not start with focusing on providing a better experience in your hotel? I say instead of bullying people after a bad experience, focus on making sure they are happy during their stay.

Has anyone ever been contacted by a hotel because of a review (positive or negative)? Tell us about your experience.

I received an email recently from Royal Caribbean’s Crown & Anchor loyalty program informing me that Royal Caribbean has teamed up with DreamWorks to create a “once-upon-a-time” cruising experience for families.

Image how the kids (and kids at heart) will feel about a sail away party with Shrek, or a photo op with Kung Fu Panda while on vacation. Being termed The DreamWorks experience, travelers will get to enjoy features such as meals, parades and photo opportunities with their favorite DreamWorks characters

Other highlights include passengers being able to enjoy movies on the ship’s 3-D movie theater, the pleasure of watching first-run DreamWorks films on board and the opportunity to watch an ice show featuring characters from How to Train your Dragon.

The program will first start on the Allure of the Seas, set to sail in December 2010. The DreamWorks experience will then be expanded to the Oasis of the Seas, Freedom of the Seas and Liberty of the Seas in 2011. Who’s ready to join Royal Caribbean and its new DreamWorks experience?

As the oil spill continues to wreak havoc on the Gulf Coast and BP’s reputation, business owners along the gulf coast are already seeing business drop dramatically as travelers determine different vacation plans to avoid a leisurely beach stroll over globs of oil and tar.

With the Memorial Day past us, and children about to be out of school for summer, businesses are struggling with how to deal with an issue they can’t control: the oil spill.

A recent article on CNN discussed how hotels, rental, resorts and motels have seen a decline in inquiries and bookings over the last few weeks, as individuals anticipate the worst case scenario from the spill. Businesses fear that travelers assume the oil spill has hit land and created an unpleasant environment for vacationing. Because of this, many hotel owners are encouraging families to post pictures of their trip to show family and friends that the oil has not hit land yet, and some are hoping to put live video feeds of the beach so individuals can see for themselves how the area looks.

What approaches have you seen businesses take to try and encourage travel to the area? What would you recommend be done to salvage travel to the gulf coast?

I’ll keep you posted if we see any direct mail or email in the Comperemedia database pertaining to travel, the oil spill and the Gulf Coast.

Nothing annoys consumers more than paying for things that used to be free or feeling that they are being nickel and dimed. As the banking industry struggles with how to recoup money lost to overdraft fee income, they are wise to take some lessons from the airline industry.

The airline industry attempted to stem huge financial losses by charging a wide variety of fees. Flyers now pay to book the ticket, redeem frequent flyer miles, make a particular seat choice, change a ticket, check bags, obtain a pillow or blanket, and for food and drinks.

Unfortunately, added fees haven’t propelled the travel industry into profitability. AMR, parent of American Airlines, posted a $1.5 billion loss. US Air, Continental, United and Delta also posted losses. Combined, the industry lost $3.4 billion in 2009.

Southwest, however, was one airline to post a sizeable profit. The company heavily advertised “Bags Fly Free,” and that strategy may have paid off. The company’s Chairman and Chief Executive Gary Kelly attributes the success, in part, to the fees that its competitors are assessing. In a January conference call with Wall Street analysts, he was quoted as saying, “I hope they charge $100 a bag. That would be terrific. We’ll have 100 percent load factors.”

Going beyond the fee

With customer satisfaction, loyalty, and brand image on the decline over the past few years, banks can hardly afford to alienate customers. Rather than focusing on what fees to charge, the industry should focus instead on innovating services and products that give people confidence. It’s not that fees are never justified – it just might not be wise to assess fees on previously free services. In fact, a recent JD Power study indicates that high customer satisfaction rates are possible to maintain as long as consumers perceive that they are receiving sufficient value in exchange.

At the end of the day, customers know that it’s their deposits that fund the banks other, more profitable, activities. So while consumers need a place to bank, the banks need consumers just as much. Shouldn’t there be recognition of the mutual need from both parties?

Travel and leisure companies have been hit hard since the economy plummeted into recession. As travelers were considering how best to spend limited resources, travel companies were figuring out how to draw customers onto their cruise ships. One way observed periodically over the last year has been the creation of themed cruises, positioned as “once in a lifetime” trips to attract customers who would rather pass on “just any cruise” while finances are tight.

Themed cruising started with Disney and the Disney Cruise Line in 1998, which gave travelers the opportunity to enjoy “the Disney experience” on the open seas, extending the “happiest place on earth” to destinations all around the world. In a recent direct mail offer, Disney encouraged families to “Discover an Ocean of Tropical Wonders and Exotic Escapes.” The campaign featured 3-, 4- and 5-night cruises to the Bahamas, along with a visit the company’s “private island paradise, Castaway Cay.”

Royal Caribbean and Norwegian both took advantage of the family draw that has defined Disney’s success by offering Nickelodeon-themed cruises. Royal Caribbean positioned a summer 2009 Nickelodeon Family Cruise as “the family vacation of a lifetime.” In direct marketing tracked by Mintel Comperemedia, prospects were encouraged to book early to take advantage of low prices and “the ultimate summer vacation your whole family will never forget!”

Starting in April 2010, Norwegian will exclusively feature Nickelodeon at Sea on the Norwegian Jewel. The experience has been positioned as a “whole new level of imaginative activities and family entertainment.” It will be interesting to see if Norwegian can be as successful as Disney in creating a long-running themed vacation option for families.

Cruising isn’t just for families, and companies like Carnival and SilverSea have used themed voyages to attract adult travelers. Carnival Cruise Lines informed email recipients that it was “cruising down memory lane” with its Malt Shop Memories Cruises. Travelers were invited to “join us on a journey back to the birth or Rock ‘n’ Roll as we head down memory lane with sock hops, dance contests and live performances.”

SilverSea Cruises offered a Beatles Tribute Voyage in August 2009. Readers were asked to “celebrate the 45th anniversary of the Beatles coming to America” with this 10-day UK cruise that featured a “Beatle Brunch and a disco party.”

Themed destinations have been a huge draw for travelers (think Disney, Las Vegas or Universal Studios) and now cruise ships are trying to create a complete themed experience to provide customers a “once in a lifetime” vacation. Themed cruises have the opportunity to attract curious travelers looking for a new experience and can help create a stronger draw as travelers decide how best to spend their money in a weak economy.

Spirit airlines begins charging for carry-on luggage
Spirit announced recently that it will become the first airline to charge for carry-on luggage. You read that right…a charge for carry-on luggage. The airline is set to charge up to $45 for individuals who bring carry-on luggage that needs to be stored in overhead bins. A reduced fee of $30 could be paid in advance by those who already know they will be bringing luggage that is too large to be stored under the seat.

But with the announcement comes spin. The company has said that it reduced fares across the board, meaning that most passengers who pay a carry-on fee will not see an increase in their total flight price. The company also stated that this move will help the airline empty the plane faster, which would make passengers happier, right?

I don’t know if I buy that. It seems like the itemization of costs will only create a sense of being “nickel and dimed.” The company already charges for checked bags, and those fees are cheaper than the newly announced carry-on fee. I wonder if the company is really trying to increase revenue by encouraging individuals to save money by checking a bag over passengers bringing bags on the plane. What do you think? Will this influence your decision to fly Spirit?

Ryan Air contemplates charge for in-flight restrooms
Be sure to have some change handy next time you fly. Ryan Air, a popular budget airline in Europe, is considering charging passengers to use the restroom.

The company is pondering a small charge (currently equivalent to US $1-$2) for using the bathroom on flights that last less than one hour. Passengers would insert money into a coin-operated bathroom door to gain access. Although the company has announced the consideration, no decision has yet been made.

I could see how this concept might be more accepted in Europe than the US, since many public restrooms are not free. But, do you think this would “fly” in the United States?