Air Canada announced today that in response to decreasing fuel prices the airline is eliminating all second checked-bag charges implemented this spring and incorporating fuel surcharges into its advertised base fares on North American flights.

"Although the cost of fuel remains highly volatile and far above historic norms, the recent retreat in oil prices is enabling us to reinstate our previous baggage policy. We are eliminating the second checked bag charge on North American Tango and Tango Plus fares, reflecting our customers' expressed preferences. Further, Air Canada is making its pricing more transparent by removing add-on fuel surcharges for flights within North America and instead adjusting its base fares to cover the total cost of fuel," said Ben Smith, Executive Vice President and Chief Commercial Officer. "These initiatives are made possible by the recent relief from all-time high oil prices and even though fares will remain dynamic, Air Canada is committed to everyday low prices and will continue to match the lowest fares in the marketplace."

With the measures announced today Air Canada will:

• Eliminate starting September 23, 2008, the $25 fee for second checked bags that was introduced May 15 for Tango and Tango Plus fares within North America. Air Canada becomes the first major North American carrier to remove second checked bag fees introduced this year to help offset record high oil prices.

• Incorporate into its advertised prices the one-way, add-on fuel surcharge that currently ranges between $20 and $60 on domestic and U.S. transborder flights. Starting September 18, 2008, Air Canada will adjust its published fares to include the total cost of fuel in its advertised base fares. This will provide customers simple, transparent and low fares always available at www.aircanada.com.

• Starting October 14, simplify its excess baggage fees by introducing a single $75 fee for travel within North America ($100 international) for overweight and/or oversize pieces. This new policy replaces the standard industry practice of imposing individual fees for each situation. For bags exceeding the free allowance, the excess piece fee will now include any applicable overweight or oversize fees. A 10 per cent discount on excess piece fees is offered when fees are paid while checking-in online at aircanada.com or at an airport self service kiosk.

Air Canada will continue to review its policies to determine what adjustments are to be made so that, against a backdrop of high and volatile fuel prices, it continues to provide the products and services that respond to customer demand.

Boeing [NYSE:BA] successfully completed a high-pressure test, known as 'high blow,' on the 787 Dreamliner static test airframe at its Everett factory.

The test is one of three static tests that must be cleared prior to first flight. During the test, the airframe reached an internal pressure of 150 percent of the maximum levels expected to be seen in service - 14.9 lbs. per square inch (1.05 kilograms per centimeter) gauge (psig). It took nearly two hours to complete the test, as pressure was slowly increased to ensure the integrity of the airplane.

"We had every confidence going into this test because of the extensive work we've done on larger and larger pieces of composite - from small coupons to fuselage sections," said Pat Shanahan, vice president and general manager of the 787 program. "Still, it's very rewarding to see a whole airplane being tested and having the results we expected.

"I am so proud of the team that has worked on this program and the progress we are making."

Many areas of Texas were not affected by Hurricane Ike, but if you are traveling in the state or have plans to visit Texas in the near future, please consider confirming hotel reservations and flights.

Areas impacted by Hurricane Ike are in the recovery phase. Conditions in these areas are improving daily however; restoration of services is not complete in many areas heavily impacted by the storm.

 Travelers should closely monitor the current situation in these communities before traveling to them.

United Offers Daily Nonstop Flights between Denver International Airport and Heathrow

For US airlines, these are desperate times. And legacy carriers are behaving like desperate creatures, slashing capacity and closing hubs. It's all in vain, says airline expert and CEO of Airsavings, Raphael Bejar. 'It's years too late and millions of dollars too short.'

Struggling to keep pace with deteriorating market conditions and bloated costs, US carriers are instituting a mix of cost-cutting and fee hikes, passing the exorbitant buck of air travel onto consumers. "I'm surprised it took this long," says Bejar, one of Europe's most outspoken proponents of the low-cost airline model, "for US legacy carriers to recognize their model is broken."These measures may seem like sensible economic reactions -- costs go up, so do prices. But that rationale is built on a faulty premise says Bejar -- the supremacy of the legacy carrier business model. Some are even lashing out at low cost airlines, like AMR's CEO, Gerard Arpey, who says, "The industry has been hurt by some airlines growing faster than conditions warranted, that impact has worsened in light of recent economic trends and soaring fuel prices." American fliers, says Bejar, are running out of sympathy for carriers to whom they were once loyal.

Millions of Americans, however, aren't familiar with the low-cost airline culture that has been evolving across the pond for a decade. They should be says Bejar, it's time for US travelers to seek an alternative to the disastrous state of air travel options -- by demanding low-cost travel. His company develops revenue strategies for low-cost carriers with a "no-frills" approach to flying. Offer the basics -- safety and a seat at low cost -- and let the customers pay for everything else. And so far that's worked well, low-cost airlines have outgrown legacy carriers by 25% in Europe and 15-20% in the US.As US carriers continue alienating customers with fee increases, there'll come a point when consumers snap. "How many times can airlines increase baggage fees to keep up with rising costs -- 20, 30 times? There have been 12 fee increases already this year, there'll be a backlash soon. The market here is seeking a different product than what's offered by the legacies," says Bejar. He feels American fliers are ready for a new era in air travel.According to Bejar, US legacy carriers have ignored a key aspect of low- cost airlines' success -- ancillary revenues. Successful LCCs, like Southwest and JetBlue, have transformed no-frills air travel into a customizable experience, and have been rewarded with growth and profitability. They've been quick to respond to consumer demands for low prices, while implementing mechanisms that allow passengers to set their own priorities. They've stripped down flying to its elemental core and sold each fragment back to willing customers.

Bejar's company develops solutions that allow airlines to do just that, with speed and efficiency. If legacies are to survive, they must adopt a similar strategy -- quickly.The low-cost airline is the future, says Bejar. While it may be a shock for millions of US passengers accustomed to flying old school, and despite less aggressive growth for the rest of '08, the low-cost model, which will undoubtedly be copied by legacies carriers, is the only way forward.

More than half of those that can get away still check in with work once a day.

Last year, Mary Schellhammer and her husband Paul left behind their Spotsylvania, Va., personal-chef business and took an extended summer vacation  in Europe. Next year, they're planning a two-week trip to Alaska. "We try to do a big trip every two years," Schellhammer said. During the off years, they travel around the country for weeks at a time in an RV. Yet, for most U.S. small-business owners -- and Americans in general -- that kind of vacation time is becoming increasingly rare, recent surveys show.

Less than two-thirds of the nation's small businesses owners planned to take at least a full week away from work  this summer, according to an OPEN from American Express survey of 600 businesses with fewer than 100 employees. This spring, a full 60% of U.S. consumers said they had no vacation plans over the next six months, according to the Conference Board. Americans also tend to take much shorter vacations -- just 13 days on average -- compared to the rest of the world, the World Tourism Organization reports. That's less than half the average number of vacations days in Japan, Canada, Britain, France, and Italy, according to the agency.
 
So why are so few U.S. business owners taking time off? Nearly half of the owners surveyed by American Express said they were worried an important client or customer would receive bad service while they were away. Of those that planned on taking summer vacations, a full 54% said they would check with their business at least once a day, compared to 25% who said they wouldn't, the survey found. "Business owners tend to take on all or most of the responsibility for running their firms," said Susan Sobbott, the president of OPEN from American Express. "Given their concerns about the state of their companies while they are away, many find it impossible to truly disengage from their business during a vacation."

Instead, the survey found, many entrepreneurs try to mix business with pleasure, though the rates vary by gender and size of business. A full 38% of women business owners said they combine work with their vacations, compared to 27% of men, the survey showed. In addition, owners who run smaller firms -- those that make less than $200,000 in annual revenue -- are also more likely to take working vacations, the study found. To make the most of a vacation, Alice Bredin, a small-business consultant for OPEN, suggests owners give key clients a "heads-up" before leaving, or try to schedule trips during business downtimes. Those who simply can't get away this summer should try to reward themselves with other downtimes, such as a going to a museum or a ballgame, or trying out a new restaurant, Bredin said.

Streets Smarts: Get Lost

By: Norm Brodsky

No reader of Inc. needs to be reminded of the challenges of going into business. I wonder, however, how much you have thought about the challenges of getting away from it. I've been thinking about them lately, and not just because I sold a majority interest in my company to a private equity firm last December. Long before the sale, I had set a goal for myself of spending 16 weeks annually -- yes, that's almost a third of the year -- traveling or skiing or simply taking time off. I reached the goal three years ago, and I have continued the practice ever since. Along the way, I have become increasingly aware of the mistakes other people make when they take a break from their companies.

Those mistakes fall into two broad categories that roughly correspond to the age groups of the people involved. The first group is made up largely of younger people who think they are taking a vacation when in fact they have simply moved their offices outdoors. They spend most of the time doing work. The second group includes all those baby boomers for whom vacations are no longer enough. What they really want is a change in lifestyle. But because they haven't done the necessary planning, they wind up alienating their customers, undermining their employees, and damaging their businesses.

Now, I will admit that I haven't always been as strong a believer in the importance of taking time off as I am today. For eight or nine years after starting my first business, I took breaks only when my wife, Elaine, forced me to. She would go to Florida, where we had a second home, and I would join her on the weekend -- maybe. If the technology had been available, I would probably have been one of those poor souls sitting on the beach with a BlackBerry in one hand, a cell phone in the other, and a computer on my lap. Or I would have been doing deals while riding a ski lift up the side of a mountain. It took a long and painful trip through Chapter 11 to make me realize the dangers of becoming consumed by the business. Looking back, I could see that I had gotten in trouble in part because I had lost perspective. My business obsession had clouded my judgment and kept me from asking important questions about what I was doing and where I was going.

I should note that I'm not saying it's always wrong to be engrossed in your business. Until a company reaches viability -- when it can sustain itself on its own internally generated cash flow -- you really can't afford to spend time away from it. (See "How to Succeed in Business in Four Easy Steps," July 1995.) But thereafter, you have a choice. The first go-round, I chose to spend almost every waking hour thinking about my company. By the time I started the second company, I was open to the idea that I would be better off spending less time on it, not more.

But I didn't have a clear sense of how much better off I would be until I actually started doing it. Not that it came easily. It took time and determination to tear myself away from the business on a regular basis. I started out taking one week of vacation per year and gradually worked up to four, timing my breaks to coincide with the periods when business was slow. The more time I took, the better I felt, and the more I appreciated just why vacations -- real vacations, on which you clear your mind and don't think about business at all -- are so important. I would come back from one feeling rejuvenated and able to take a fresh, uncluttered view of the business. I could see issues and problems with a clarity I hadn't had before. It was obvious to me that I was a bigger asset to the company on my return than I had been when I left.

As a result, my thinking changed. I would hear people saying, "I haven't taken a vacation in five years," as if it were a badge of courage. I might once have agreed. Indeed, I might have said it myself. Now, increasingly, I saw it as a badge of stupidity. Though people liked to portray themselves as making sacrifices for their business, they weren't, in fact, helping anybody by not taking vacations.

I was comfortable with my four weeks of vacation until about 11 years ago, when the company reached an important stage in its development, and I realized I had to make a fundamental change in my role. Up to then, the senior managers had all reported to me, and I had my hand in every pie, but I could see that wasn't going to work anymore. The company needed things I wasn't any good at providing -- systems, order, structure, stability, predictability, and so on. In a word, it needed management, and I hate managing. To me, it's boring. But I knew I would wreck the company unless I made room for it. That's what I hadn't done with my previous company, and I had no interest in repeating the experience. I knew I had to get out of the way and turn the operations over to my executives.

But I also recognized that for the transition to succeed, I would have to find new ways to contribute. Stepping back, letting other people make decisions without me, biting my tongue when I thought they were wrong -- none of that came naturally to me. If I didn't have something else to focus on, there was a real danger that I would fall back into old habits and wind up undermining the process. The answer, I decided, was to have new goals that I could get excited about and to undertake projects that played to my strengths. As it happened, Elaine and I had begun thinking about how we really wanted to spend our time. With one eye on my life outside the business and the other on my changing role in it, I came up with the long-term goal of eventually being able to take off four months every year.

These days, I know a lot of businesspeople my age who would like to be able to do that. The problem is, most of them haven't laid the groundwork. They take a vacation in Florida or in the Rockies, and they fall in love with the life there. They want more of it, and they think it's just a matter of taking additional vacation time. They don't prepare their customers or their staff for the change. They leave messages on their answering machines saying, "If you need help, contact my assistant." That's fine if you're gone two to four weeks a year. Customers can accept the idea of dealing with your assistant while you're on vacation. But four months a year is not a vacation. It's a major change in the business. If customers have always dealt with you in the past, and if your staff doesn't have the training and the experience to take care of their needs, those customers are going to be very unhappy. And you're going to pay a heavy price.

From that standpoint, I was very fortunate to have established my goal as early as I did. It took a good seven years for me to reach it, and I had to relinquish many things along the way, which wasn't easy. The last loss was one of the most difficult: I stopped giving tours of our facilities to prospective customers. Understand, I absolutely loved giving the tours. But if I was going to be away from the business for 16 weeks a year, I couldn't have people waiting on me to do tours. What's more, I needed to make sure that customers didn't expect or count on my constant presence. I wanted them to bond with other people in the organization, and the tours were an important part of the process.

So I began training other people to do them. For a year, I made a point of taking managers and salespeople along with me whenever I gave a tour. Next, I had one of them lead the tour while I came along for support. When I could see they had mastered the tour, I stopped going on it. The managers would do it and then bring the customer to my office, where I would make a presentation and do the close. Then I began letting the managers do that part as well while I looked on. Finally I bowed out of the process altogether.

In the meantime, I gradually increased my time away from the business. I added a couple of weeks every year, which meant deciding what else I would give up. By the time I was taking the full 16 weeks, the company could run perfectly well without me. When I was there, I could focus on making contributions that would enhance the business, and yet I could leave knowing my customers would never notice my absence and my staff could handle whatever came up.

All that added up to peace of mind, which would have been reward enough. As it turned out, however, there was a bonus that I discovered during the process of selling a majority stake in the company to Allied Capital, our new private equity partners. I told Allied's people up front about my work schedule. They were both taken aback and impressed. They were used to dealing with founders who couldn't bring themselves to let go. The company's ability to run without me increased the value of the business in their eyes, because it removed any doubt that the business could succeed without me. Unlike other founders, I was not a potential vulnerability; I was an additional asset. So I got a better price for my stock in addition to a lot of free time. That's something you might bear in mind the next time you're trying to decide whether to take a vacation.

Norm Brodsky is a veteran entrepreneur whose six businesses have included a three-time Inc. 500 company. His co-author is editor-at-large Bo Burlingham.