October 2007 Archives

What might AirTran and Edith Piaf have in common? No regrets, as the Little Sparrow would have said. Rebuffed in its pursuit of Midwest Airlines, the Orlando-based AirTran has not looked back. It’s adding flights in Milwaukee, Midwest’s home town, making big bucks while Midwest loses money even in what should be a strong season and is not looking for a merger partner because it doesn’t need one. And now AirTran is adding valuable assets at two of the most desirable airports as it takes advantages of the troubles of another beleaguered carrier.

When the fur flies: airports are used to handling canine cargo traffic, and they’re getting better at it: some even have nice doggy hotels. The latest is the big Twin Cities airport, Minneapolis/St. Paul, where the operators are considering a luxury kennel. The Metropolitan Airports Commission, which runs the airport where Northwest Airlines has a hub, is looking for businesses that want to set up and ran a luxury on or next to the airport, near a park that’s popular with dog-people (owners) who like to let their guys run off leash. The MSP kennel would be open 24 hours, have parking and a shuttle that gets humans to their planes. MAC is looking at a long lease with about $48,000 in annual rent. If that doesn't make for distinctive doggy digs, the pampering may have to stop! But someone may find a bone to pick with the MAC guys.

This is news to us. The FAA, says an oft-quoted US airline analyst and consultant, is irrelevant. Not part of the solution, just not part of solving the delays dilemma. That at least is what Mike Boyd, the Colorado-based consultant and quipmeister who heads The Boyd Group, said. The other day, Boyd went on CNBC, a major US cable operation that serves financial types, to do a show about airport congestion; he ended up saying that the FAA just didn’t count. You can watch his comments here and see a less-quotable response from someone less-often quoted but possibly more familiar.

The American Airlines pilots presented their most recent contract proposals to management with some interesting demands, I mean requests. The Allied Pilots Association, which represents some 12,000 pilots on American mainline flights, has been escalating its demands since summer, and their most recent contract demand included an estimated 53% raise and a few extras. One of them is that if an APA pilot is scheduled to fly on the Sunday of the big game, the Super Bowl of US football, that pilot gets double-time pay. The next Super Bowl, number 42, is set for Sunday, 3 February, 2008 in Phoenix.

Not forgotten, not dead. The obituary of the old GDS, the computer-based Global Distribution System, was premature a long time ago, and if any further proof were needed, it comes from an once-unlikely source: the discount airlines that were born into agnosticism if not downright denial about the GDS. Southwest, for instance, was raised on a gospel that preached wariness of the GDS, and instead taught selling direct. But Southwest, like every other airline, faces a looming revenue crunch, and both have returned to the GDSs. With good results. Now, the GDSs are becoming instruments of transformation, rather than just revenue-enhancers.

Many leading figures in aviation figure that they’re unfairly targeted in the big environmental push that’s swept Europe and is boiling over in the States. They’ve fought back, but it is in some ways too late. “If you look east, we’ve lost the war, or key battles, in Europe. We don’t control the dialogue”, Boeing commercial aircraft chief Scott Carson said. He told an industry group in Washington that the industry has “universally failed to tell our story in a compelling way,” Carson said. The industry needs to “begin telling that story or be willing to suffer the consequences,” he warned. Carson said that 75% of Boeing’s research and development budget is aimed at decreasing the environmental impact of aircraft, and that it plans advanced experiments with environmentally friendly fuels.

Merger talk is getting lots of play these days in the States, even when airline execs bring it up just to shoot it down. Even a polite rhetorical nod (consolidation or merger “might have some benefits,” as Delta’s Richard Anderson said, more as a courtesy than a real invite) sets off spasms of speculation. Veterans of the last round of mergers have been sceptical, noting the tremendous barriers to consolidation that exist: labour, finances, route-system overlap, technical differences, possible regulatory objections. Whoa, wait, what regulatory objections? The Republicans run Washington, and they haven’t objected to a merger since Laurel and Hardy got together. But not for long, and that’s why if anything does happen, it will happen between now and January 2009, when the next president is inaugurated. And odds are, she won’t be a Republican. The Democrats tend to be pretty tough on mergers and other combinations: they shot down the United Airlines/US Airways proposal in 2000, and they’re the same guys who tried to break up the Two Ronnies and the Hardy Boys. And just as coincidentally as the picture nearby, Friday is Senator Hillary Clinton’s sixtieth birthday. Just a coincidence.

Skybus may have had to drop a few routes, but on the other hand, the discounter may be winning a few victories. When it started flights at Columbus last May, sceptics were (as they often are) sceptical, but the carrier is adding routes and may have chased a foe out of its home town. JetBlue, the New York JFK-based discounter, is ending its service at Columbus as of 6 January next year. The announcement came just about a year after JetBlue began flights between JFK and Ohio's capital city. But in the year since, it just couldn’t make a buck, even when its planes were all but full. So Skybus has only one major hometown low-fares rival, Southwest, and they seem to be able to coexist in the central Ohio city.

Animals are the theme of Frontier Airlines, the Denver-based upstart that decorates its Airbuses with the lynx, the osprey, the wolf, the rabbit, and other wildlife. The airline now plans to put a fox inside the plane. And on every seatback. And not just any fox but Fox, the US television and cable network. Fox, itself something of an upstart, spent millions to win the rights to air the World Series of baseball, one of the most-watched sports events in the United States. But like every Fox, the network guards its own house jealously, and when Frontier wanted to show the World Series on its in-flight television service, which it buys through DirecTV, it was no easy deal.

Washington ways, the continuing series. Sometimes a nomination to an important federal post is not about the nominee himself or herself. When the post is a controversial one, or one or another Washington party or group has a grudge, the nomination becomes an issue about the dispute. So it is at the Federal Aviation Administration, which has been without a chief for a few weeks following the end of Marion Blakely’s five-year term. When much-liked Marion left, she left her number two, Bobby Sturgell, in charge. The administration picked Bobby himself as the nominee. Sturgell, a former fighter pilot at the Navy’s ‘Top Gun’ school, was later an airline pilot, worked for the National Transportation Safety Board, has a law degree and has been deputy FAA administrator since 2003. So, no matter how qualified he may be, Sturgell (48) is part of the FAA establishment, which has its enemies.

Washington ways, a long-running series: Jim Oberstar, chairman of the House Transportation and Infrastructure Committee and formerly chairman of its aviation subcommittee, is often called ‘Mr. Aviation’ or ‘Mr. Chairman’ in Washington. That’s a sobriquet he inherited from Norm Mineta, the former chairman who later went on to become transportation secretary. Oberstar’s served on the committee and its predecessors since he was elected in 1974 as a Democrat from Minnesota, and in fact served as the panel’s clerk from the 1960s, before he was elected.

Who could they be? It seems that countries from outside the European Community want to join the US-EC ‘open skies’ pact that takes effect in March 2008. Daniel Calleja, the European Commission’s director for air transport, told an industry breakfast in Washington that “already, third-country nations are knocking at the door and want to join this agreement”. The genial Spanish negotiator was not alone in noting this trend; former US Transport Secretary Norm Mineta says, “Other countries are ready to join” the pact. Mineta calls the pact “the first step toward a truly open aviation area between the EU and the US”. They spoke at a meeting of the Washington Airports Task Force, a business-government group that encourages service at the two Washington airports.

Look for the Plattsburgh airport and someone will ask, are you sure you don’t mean Pittsburgh? Nope, we mean Plattsburgh, in far upstate New York and not far from the Canadian border. And it’s getting itself a place on the map (it's at the green arrow, and Canada is just north by about 55 miles) with some big bucks from the state and the feds – enough to help it attract service from a new carrier. The bilingual airport, is positioning itself to draw cold Quebecers from north of the border, 'Snowbirds' who should be lured by its new flights to Florida and by their increased purchasing power as the US dollar tumbles and is at long last at one-on-one parity with the Canadian dollar.

The second birthday is supposed to be a tough time for young ones, but for new young airline at least it’s a time of good news. Eos, which began all-premium service in October 2005 on Boeing 757s outfitted with room for just 48 passengers, each in a private bedroom sleeping cubicle, marked its second birthday with word of two new routes. The carrier, which flies between New York JFK and London, now competes with two other luxury players, Silverjet and MaxJet but will add competition with a third premium player, L'Avion, next year.

Richard Anderson is a tough guy. Grew up in a tough town, Galveston in south Texas, worked construction jobs to pay his way through college and law school, was a criminal-courts prosecutor, dealt with tough unions at Northwest. He went to Delta Air Lines on 1 September and came out swinging. Not against the union there, which has been a relatively cooperative group of pilots. No, Anderson saved his toughness for analysts, speculators and Boeing. Announcing Delta’s record third-quarter earnings the other day, he dashed speculation that Delta would order 128 of Boeing’s new 787 - an ‘order’ that had gained the status of fact among some observers. “There never was a plan for the 787,” he told securities analysts, adding, “I don’t know an airline in the world that needs 128 787s.” Anderson said paying down debt and restoring the balance sheet were his priorities. Delta will be careful not to “load the balance sheet up with fun, new airplanes”. The 777, he says, is the only likely long-distance addition to the fleet.

That fare increase is sticking. So are the chimichangas. At Love Field in Dallas, where Southwest Airlines is based and from which it competes with D/FW’s American, fares are going up, but Southwest is easing the pain with a free ( free, no cost, complimentary, gratis) Mexican, or southwestern, food this week. The cheescake chimichangas are a sweet treat from an eatery that is based nearby and has outlets throughout the neighbouring states. This week, Southwest increased fares on most routes to and from Love by as much as $20, roundtrip. This is the first fare increase this year at its hometown hub.

It’s only five months old, but Skybus is already abandoning some of its first routes. When it started service from its Columbus, Ohio, hub, in late May, Skybus made headlines with its ‘ultra low’ fares, its emphasis on ancillary charges, its guarantee of a number of $10 seats on each flight, and its interesting selection of secondary airports. For instance, Skybus picked the Bellingham, Washington, airport, 90 miles north of Seattle for its Pacific Northwest destination, but will abandon that route from Columbus in the first week of January. It will also end service between its hub and San Diego, California, effective 6 March, and will end one of its two flights between Columbus and the Bob Hope airport in Burbank, near Los Angeles, in January, all because of the continually rising cost of fuel. Skybus founder and chief executive Bill Diffenderffer says that the carrier “needed to take a look at our scheduling strategy and find ways to use our fleet more effectively...”

UK low-cost carrier easyJet has saved a few pennies by getting its own cabin crew to design their uniforms. The new designs do not look bad either.

The new easyJet is a far cry from its first uniforms 12 years ago when it was founded. The casual 1995 look was a simple combination of black jeans and orange polo shirt, with "I’m an easy crew member" embossed on the back.

JetBlue is seeking a higher education. It says it wants to go to Columbia. That fine university, established in 1754, is not far from JetBlue’s home base out in Queens. The elite Ivy League institution of higher learning is noted for its English and its geography departments. JetBlue might want to enrol in either of these illustrious faculties, since the airline is actually trying to say that it wants to fly to Colombia, or at least to its capital city, Bogota, about 2,500 miles south of the Manhattan campus.

Just in time for airline earnings season, which kicks off this week with profit reporting from Delta on Tuesday, followed by the Texas trio of American (Wednesday), Continental (Thursday) and Southwest (later Thursday) comes an important revenue trend. The major carriers, having tried to push through a fare increase for much of the autumn, may finally have succeeded in getting the latest price hike to stick. Following American, most legacy carriers boosted their fares by $5 each way over the weekend, despite some late night faltering by United. That would be, estimates JP Morgan’s Jamie Baker, seven completed network-carrier fare increases out of an even dozen attempts in 2007. Southwest alone raised fares five times during the year, and Baker, who thinks discounters’ fare moves are crucial to industry revenue, sees a sixth increase likely before year-end. While this may sound routine, please note two new concepts here: American initiating a fare increase and Delta expected to post a profit.

First they did away with the paper ticket. Then they did away with the bulky boarding pass, and now they’re going to do away with even that flimsy little boarding pass that you print out at home from your PC. The world’s airlines are on the way to letting passengers get through the airport without having to wave that sweat-soaked, crumpled-up piece of paper at anyone at all; all you’ll have to do is show the security guys the screen on your cell or mobile phone, Blackberry or other ‘device’. Under an IATA agreement made final this week, the device would show a tiny digital bar code that would become the boarding pass and get a flyer past security and to the boarding gate itself.

The airport in Portland is not a hub but it is about to set off a hub fight. The Oregon city, about 150 miles south of Seattle, has long been hungry for more international service, especially European service, and a committee of local travel groups and business such as Nike, the sports shoe company based nearby, has been an active one. Most international flights out of Portland are north to Canada, to Vancouver’s big overseas gateway, or south to Mexico. Back in 2003, the committee persuaded Lufthansa to launch PDX-to-Frankfurt flights, the first-ever non-stop link between PDX and Europe. Now the city is celebrating its victory in persuading Northwest to launch non-stops to Amsterdam that start next March. Service will be on an Airbus A330-200s with 32 business class seats and 211 economy seats. The service sets up a competition between Lufthansa’s major German connecting operation and the KLM hub at Schipol.

Delta has unveiled its weapon in the blooming transcontinental airline wars: more room in coach and more personal entertainment. The airline, the nation’s number three, didn’t have to take out any seats from its Boeing 737-800s to get the added room; instead it just made the seats themselves a little thinner. Delta says it is the first carrier with ‘Slim Line’ seats that give as much as an inch-and-a-half more personal space as well as more under-seat storage. The -800s also have ‘Delta on Demand’ In-Flight Entertainment (IFE) along with live TV at every seat, including coach. The Atlanta-based airline says it is the first in North or South America to offer this extra.

No shame. Shameless. We all knew that about Richard Branson, but if any reminders were in fact needed, here’s news: to get publicity for the newest Virgin America route, Branson will rappel 407 feet down the side of a Las Vegas hotel resort after performing an in-flight wedding on the way to the desert resort, famous for its gambling, quickie marriages and even quicker divorces. The airline will offer three daily flights between San Francisco International (SFO) and Las Vegas McCarran, giving Virgin a total of 32 daily flights. The market will be an interesting test of the Virgin product, which assumes that its richer offering of flight entertainment and on-board service will lure flyers; it goes up against Southwest, which has a half-dozen daily non-stop flights between SFO and Las Vegas, along with 35 more non-stops from nearby Oakland and San Jose Mineta international airports.

It may be struggling but it’s not giving up. ExpressJet, which in May launched an innovative attempt at independent flying in its 50-seat Embraer RJs, has faced torrents of scepticism about its brand of branded flying. Observers and others insisted that flying regional jets in low-cost, low-fares service without a major parent to feed (and be fed by) is doomed, and they point to earlier attempts by Atlantic Coast, which tried with a short-lived carrier called Independence Air. But ExpressJet is not deterred, and just announced that it will begin service at three new cities as of 11 November.

For those jaded by too many long flights comes word of a part of the world where air travel is still a thrill. Or at least the thrill of being on an airplane is still a draw. A retired Indian Airlines engineer has found a ready business in selling tickets for a few minutes on an Airbus A300 that goes directly from nowhere to nowhere. The one-winged fuselage simply sits, but people in Delhi are lining up to buy tickets to sit in the plane for few minutes each weekend while the owner, Captain Bahudar Gupta, makes announcements about take off, landing etc, and his wife and five other crew members go up and own the aisle, serving snacks and drinks. If any of the ‘passengers’ has to use the facilities, that could be problem because the fuselage has no bathrooms. But local Indian media say that people line up to buy tickets on the plane to nowhere. Yes, but will they complain about being late? Will they like the view out the windows?

Anytime Congress writes a big bill covering a big issue such as the FAA funding bill that’s now under debate, a lot of ‘interesting’ little issues come up and find their way into the legislation, from harmless amendments naming a facility after a retired employee (the Frederick Q. Schmerzenheimer Auxiliary Radar Centre) to amendments that may not be so harmless.

Take for instance the FFFA (Family Friendly Flights Act) that some solons want to attach to the bill. This would compel US airlines to create “child-safe viewing areas”. These aren’t for people to look at kids; these are rows of seats where no one would be within 10 rows of a movie screen that showed ‘violent’ programming. Violent programming, explains Rep. Heath Shuler, the North Carolina Democrat and former professional football player who wrote the measure, is any show that had an adult or adult-guidance rating on television or in the movies. That means that even some of the self-censored films that airlines show would be forbidden. The airlines don’t like the idea, and are moving to defeat the measure, although this bill raises a number of issues, among them the behaviour of children themselves on airplanes. We wonder, though, if the answer lies with the same folks who bring the kids on the planes: dear old mom and dad. And not Uncle Sam.

My colleagues at Travolution have noticed this rather neat and perhaps "Sivilised" advert from all-premium carrier SilverJet is rather similar to a classic ad from competitor British Airways.

In fact as Travolution note, for similar read copied!

“A great big dog leapt out of the bushes and ate my homework….” That may have worked in the fifth grade, but it seems many business travellers aren’t that much more inventive. One of the on-line travel agencies, getthere.com, surveyed corporate travel department managers and come up with the best excuses their clients had offered for insisting on flying first class even when the company policy was explicitly against this privilege. Number one was, “I upgraded because I can’t afford the drinks in coach”, followed by a traveller who said he had doctor’s note that he had to fly in first class. And then there’s the manager who said he was allergic to peanuts, “and that’s all they serve in coach, so I had to upgrade to first class where they serve almonds”. But missing from the list was the one we were hoping for: “I had to fly in first class because coach was full of snakes on a plane”

A true architect of the modern airline industry has passed. Tony Ryan, scion of the Ryan family, founder of one of the world’s leading low-fares airlines and a creator of the modern aircraft leasing industry, passed away this week at 71, according to a statement from Ryanair. The son of an Irish state railways employee, Ryan had worked at Aer Lingus when it was still a stodgy, state-owned monopoly. After 20 years at the airline, he started the Guinness Peat leasing concern in 1975, making the financial advantages of leasing a source of rapid airline growth, note some industry observers. Guinness Peat later became part of the global powerhouse GECAS. He went on to found Ryanair, which brought the Southwest Airlines low-cost, low-fares model to European skies and in so doing presented carriers such as Aer Lingus, British Air or Air France with their greatest impetus to change since the jet age. Ryanair chief executive Michael O’Leary called him “one of the greatest Irishmen of the twentieth century”, and Ryan’s passing was noted in obituaries in publications as diverse as those serving the thoroughbred industry in Kentucky, where Ryan owned a stable.

Edna is on edge. Edna, if you don’t recognise her, is a character the airlines created to denounce ‘big wigs’ in their corporate jets; made up to look like a “big hair” lady of the 1960s, Edna complains that the world is unfair, unfair to her and to the big airlines. But Edna, along with her pal, Air Transport Association chief Jim May, seen here, have taken a drubbing these last few weeks. This week, the latest airline delay numbers came out, and it was (no news here) bad, bad news. August performance was the second worst on record. Then the other day they lost out on a key congressional vote on air-traffic control fees and charges, beaten back by congressional and public sentiment (which are after all supposed to be linked) that the airlines really don’t deserve a break after the lousy summer they’d given travellers; a few days later, the DoT called in the airlines and read them the riot act about angry flyers.

TSA follies, part 972: from the same folks who brought the global war on terrorism (GWOT) to the soles of your feet come more sparks of wisdom. Take for instance our experience the other morning when Virgin America had its very first flight out of Washington Dulles, a morning departure for San Francisco. Eager to explore the Virgin experience, we arrived early at Dulles, and in fact become the very first passenger to check in for the flight. And so we were the very first flyer to go through the Transportation Security Administration’s passenger screening and security lines. The response of TSA's front-liners was interesting, at least as we understood it, since the TSA employees who spoke to us spoke limited English. On being presented with a Virgin America boarding pass, the TSA’s first response was: “what is this being? Is this an airline?” To which we responded “yes, it’s an airline. They like airports.” Response: “You are waiting here. I call supervisor”. The supervisor soon arrived: “I do not know this. No one tells me nothing. I do not know this airlines.” We explained “it’s a boarding pass” and pointed to the printed words on the document that in fact say, BOARDING PASS. To which the supervisor responded, “You know, just because it say boarding pass, that does not mean it is boarding pass." We could not argue.

For Adam Pilarski, the noted analyst at Avitas, there is only one song that represents the outlook for the industry: Bad moon rising by Creedence Clearwater Revival.

Speaking at the Commercial Aviation Annual US Valuation Conference in Washington DC today, Pilarski says recession is inevitable. But when will it happen - that is another question.

Skin deep, or spiritual? It takes a lot to rebrand an airline, and it certainly takes more than a new livery. In fact, repainting its planes if anything presents a real challenge to the carrier to live up to what its new image may be trying to convey. The latest to try a new image (we won’t use the neologism ‘re-imaging’) is Spirit Air, the South Florida carrier that has been trying to position itself as the only real low-fares airline between the US and Latin America. Spirit calls itself an ‘ultra low fare’ carrier, and has run promotions with fares as low as $1, or some cases, free. The airline stresses ancillary services and sales as ways to boost revenues. The other week, Spirit unveiled a new paint scheme that it says emphasises that it is a leisure carrier and one specialising in Latin America.

Robert Milton first did it with Air Canada's frequent flyer program Aeroplan - spin it off that is. Made a nice pile too for parent ACE Aviation. "Monetising" he called it.

Now, fresh on the heels of Qantas boss Geoff Dixon looking to follow in Milton's footsteps and do the same with the Australian carrier's loyalty scheme, is the same about to happen at American Airlines?