=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/c/a/2004/01/11/BUG2O4756J= 1.DTL ---------------------------------------------------------------------- Sunday, January 11, 2004 (SF Chronicle) Airborne amenities are back in business/Carriers wooing passengers with arr= ay of luxuries David Armstrong, Chronicle Staff Writer Cushy airplane seats that turn upside down and morph into beds. Instant e-mail and Web surfing at 35,000 feet. Trendy martini bars in the sky. More leg room and wider seats. More channels of interactive entertainment than you can use in one lifetime -- at economy-class seats. The U.S. and international airlines are sounding those bells and whistles loud and clear this year in an attempt to lure passengers back to the sky. This country's airlines, rocked by fears of war and terrorism and grounded by a low-flying economy, lost an estimated $20 billion in 2001 and 2002 combined, with smaller losses projected for 2003. With the start of the new year, though, airline officials say they are beginning to see a glimmer of financial hope on the horizon that is encouraging them to roll out new technology and in-flight amenities. Lifted by a recovering economy despite security worries that still dog the industry, U.S. airlines could break even this year, according to Air Transport World, a leading industry trade journal. "Even though the market has been weak, we're making a conscious decision to invest now in new products and new planes to take advantage of the returning market," said Richard Branson, the founder and chief executive officer of Virgin Atlantic Airways. Whether passengers are going to want to use all the new gizmos and how t= he airlines are going to pay for them remain to be seen. JetBlue, the innovative low-cost carrier that pioneered free DirectTV and leather seats, said Wednesday that it will install 100 channels of satellite radio, movies and Fox TV shows such as "The Simpsons" on seatback TV monitors this year. The next day, fellow low-cost carrier Air Tran said that it, too, will install satellite radio on its planes. JetBlue has used amenities previously unseen on no-frills carriers since it started flying in early 2002 in a successful attempt to distinguish itself. JetBlue founder and CEO David Neeleman, a former board member at Southwest Airlines, bought new Airbus planes for his fledgling airline. The airline also created a sense of style and offered one-way fares as low as $99 between Oakland International Airport and New York's John F. Kennedy International Airport, The new electronic offerings are JetBlue's attempt to stay one step ahead. That's all well and good, said Terry Trippler, an airline expert with Cheapseats.com, but many travelers would forgo the fancy electronics if it meant they could just cross their legs. "To the best of my knowledge, no passengers have ever developed phlebitis by listening to satellite radio," said Trippler, noting that JetBlue, like most other low-cost carriers, flies all-economy class planes with cramped leg room. "The (low-cost carriers) obviously think this (electronic gizmos) is what people want," Trippler said. " I don't know what the return on investment is. " Neeleman said that JetBlue, which operates 15 daily departures from Oakland Airport, has worked out a deal with XM radio that will provide the radio company with valuable exposure and cost JetBlue virtually nothing. As for Fox movies and TV, which will supplement rather than replace free DirectTV, he said a $2 or $3 charge per title would make up any shortfall. Pay or free TV? "We haven't decided yet whether to charge for that," Neeleman said in a telephone interview with The Chronicle. "If we do, we already have the credit card swipes in our seatback screens." Unlike JetBlue, which is based in New York and flies only domestically, long-haul international carriers have had movies and video on demand for several years. Now, market leaders with global air routes are supplementing that with i= n- flight e-mail and Web-surfing aimed at both the family leisure market and the high-flying, high-paying business travelers that sustained the industry before war, SARS and recession kept many fliers on the ground. Lufthansa, Singapore Airlines, All Nippon Airways and other international carriers have signed deals with Connexxion by Boeing for an in-flight e-mail and Web system powered by an onboard server with broadband capacity. The airlines say they will begin installing the system, designed by aircraftmaker Boeing Co., on their long-haul flights this year. Lufthansa will equip its San Francisco-to-Frankfurt flights with the Connexxion service in early April, according to airline spokeswoman Jennifer Urbaniak, and will charge users from $25 to $35 per flight. United Airlines, meanwhile, is rolling out a competing e-mail and telephone service from Seattle software company Tenzing (which is partly owned by Boeing's rival, Airbus Industries). Called JetConnect, the system uses Verizon Airfone's phones. Passengers on United, which is on the verge of emerging from bankruptcy, pay $15.98 per flight to access JetConnect. Such innovations can be winners with business travelers who need to stay connected to the office and get work done during their flights, said Kevin Mitchell, chairman of the Business Travel Coalition, which represents corporate travel planners. "There's a whole new younger generation of business travelers coming up who want all the electronics," Mitchell said. "That's what they expect to do on an airplane. Some business travelers want to read or just put on the headset and have some quiet time, but that portion is dwindling." But while the concept is sound, such systems are still too new to evaluate, he said. Consumers haven't used them enough: "It's wait-and-see in terms of how much they'll be used, and when use should be reimbursed and not reimbursed. There will be a lot more feedback after the first half of this year," Mitchell said. The seats to beat In addition to adding electronics to planes, airlines are trying to re- engineer one of the most basic features of travel: the airplane seat. Industry leaders in this seemingly mundane matter, Trippler said, have gained a competitive edge over rivals. "United came in with better equipment and better seats and took a lot of business away from Northwest on Pacific routes," he said. "Northwest had been flying 15- to 20-year-old seats. There's no way, with their (extensive) route structure, that Northwest shouldn't own that market." The airline that claims to be reinventing the airplane seat is British carrier Virgin Atlantic. It is using a new seat design as an integral part of a strategy to woo business travelers and first-class customers away from its much larger rival, British Airways, especially now that British Airways has grounded its aging but glamorous supersonic Concordes. It may be many years before another aircraft can match the panache, let alone the speed, of the Concorde, in which the fuselage was warm to the touch, the sky blackened at the highest altitudes and passengers could glimpse a slight curvature of the earth. When British Airlines retired its last Concordes on Oct. 24, the final flights, complete with a stately procession of three planes over the River Thames, had the solemn air of a state ceremony. Virgin counters stateliness with brashness and hip styling. The carrier's Upper Class Suites, installed on half of its daily flights between San Francisco International Airport and on its New York-London routes, feature swank stand-up bars that would not look out of place in Soho or SoMa. Established features of Virgin's popular business class, such as in-flight massages and ordering meals at any time, are incorporated into the new service. The most distinctive feature of Upper Class Suites, which will be installed throughout Virgin's fleet, are its new seats, which flip over and can be made into beds, airline spokeswoman Wendy Buck said. "It resolves the ongoing question of how to create a seat that converts into a fully flat bed," Buck said. "By flipping over, the underside of the seat becomes a real bed with foam mattress. We have a patent on the technology. The other unique technology is in-seat belt air bags, and the ability to take off and land in the reclined position." Such initiatives are designed for the affluent traveler who can afford to pay for them. Business travelers could well respond to the innovations, seeing them as more necessity than luxury on flights between North America and Europe, which can run 10 hours or more, said the Business Travel Coalition's Mitchell. "It's very much an appreciated comfort," Mitchell said. "Business travelers are not taking as many trips, but when they do take a trip, it's more important." Room with a view Another way to lure lucrative long-haul travelers is to carve out more room on the planes, which some carriers are doing. Singapore Airlines, long a leader in the fast-growing transpacific marke= t, is dramatically reconfiguring Airbus 345 planes for ultra-long flights between Singapore and London and Singapore and Los Angeles. Other markets, Singapore Airlines spokesmen say, may get them if the reconfigured Airbus, called the A345 LeaderShip, catches on with high-end travelers. The A345 LeaderShip will have dozens of seats removed, reducing capacity from more than 300 passengers to 181, according to spokesman James Boyd. The plane will consist entirely of business class and premium economy cabins, and is designed to relieve tedium and increase productivity on the world's longest nonstop air routes. The flight from Singapore to Los Angeles, for example, takes 18 1/2 hours. The airline plans to introduce LeaderShip service from Los Angeles on Fe= b. 3, and Boyd is promising a whole new experience for premium economy fliers, who pay 5 to 10 percent more for their tickets: "We're increasing the pitch (leg room) in premium economy from 32 inches to 37 inches, widening the seats from 17 inches to 20 inches, and installing wider armrests. Those are small changes, but what you get when you sit in the seat is a lot of difference." For U.S. and international airlines, such new wrinkles represent a calculated risk in a commercial climate still threatened by fears of terrorism, worries about a recurrence of SARS and an encouraging but uncertain economy. "What all the airlines need now is a period of stability, free from any new turbulence, to allow an improved return on investment," said Branson. "Fortunately, for the first time in months, the early signs are that better times may be ahead." E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx=20 ---------------------------------------------------------------------- Copyright 2004 SF Chronicle