Airlines project higher earnings
But the industry’s profit margin still falls short of Starbucks’.
But in his profit forecast, air trade group chief Tony Tyler, above, says the industry’s profit margin falls short.
The world’s airlines have revised their 2016 profit forecast up nearly 9%, but the industry still pales in comparison to a financial powerhouse such as coffee peddler Starbucks.
That was the message from the International Air Transport Assn., the trade group that revised its annual profit forecast this week to $39.4 billion, up from the forecast in December of $36.3 billion. That equates to a 5.6% profit margin on revenue of $709 billion.
The trade group attributed the higher profit forecast to lower fuel costs, a strong revenue stream from passenger fees, improved efficiency and record rates of filled seats.
The strongest financial performance is expected from North American carriers, which are forecast to generate $22.9 billion of this year’s profit.
“The result: Consumers are getting a great deal and investors are finally beginning to see the rewards they deserve,” said Tony Tyler, director-general and chief executive of the IATA.
But in his profit forecast, Tyler bemoaned that the industry’s profit margin still falls short of some other industries.
For every $100 in sales, Starbucks earns about $11, he said, while the airline industry only earns $5.60.
“We don’t begrudge Starbucks their profitability,” Tyler said. “But there is clearly still upside for airline profits.”
Red Roof Inn points to the fastest Wi-FI
Many mid-level and economy-priced hotels across the country already offer free wireless Internet. But how many have free WiFi that is fast enough to stream video?
Red Roof Inn, the economy lodging company with about 450 properties across the country, has launched a program to designate those hotels that have speeds fast enough to watch movies and video.
Most Red Roof hotels are privately owned and operated, with franchise agreements with Red Roof.
Instead of just promising fast Wi-Fi, Red Roof said it is employing a third-party company, Morse Technologies, a tech firm based in New Hampshire, to verify when its hotels have bandwidth fast enough to stream TV and movies.
Red Roof representatives said the exact speed needed to have a “verified” designation varies based on the size of the hotel but 3 megabits per second to 5 megabits per second is typically considered fast enough to stream video and movies.
Those hotels that offer the fast “verified” Wi-Fi will earn a special designation on the RedRoof.com website and on billboards adjacent to the hotels.
The program began in the last month with properties on the East Coast, with a nationwide launch expected soon, Red Roof representatives said.
TSA hopes tech can speed up screenings
Faced with long airport lines and frustrated travelers, the Transportation Security Administration is hoping new technology can help speed up airport screenings.
The TSA last week requested information from technology companies on ways to screen passengers without requiring that they take off their coats or shoes. It also sought ways to more quickly and thoroughly examine carry-on packages.
On Tuesday, the TSA made a “request for information” and a “broad agency announcement,” two ways that the agency collects information from private companies before it puts out a contract to buy or lease new technology. A “request for information” is a general inquiry about what technology exists, while a “broad agency announcement” is a more formal call for existing devices or systems that could be used by the TSA in the near future.
The request for information about new ways to screen passengers without having them remove their shoes is no surprise. The TSA has been looking to solve this problem since 2001 when British national Richard Reid tried to detonate explosives hidden in his shoes during a flight from Paris to Miami.
A recent survey by a Minnesota travel agency company asked more than 3,000 U.S. travelers what screening measure they would most want to eliminate, and the “removing of shoes” came out on the top of the list.
The TSA also requested that private companies submit information about devices or systems that can screen more than 600 carryon bags an hour with a higher level of detection for explosives and other prohibited items.
A TSA official said it was not clear how soon either request could result in new technology being used at airport checkpoints.