Unbeatable Southwest may have been beaten, sort of. The carrier has been top dog in Ohio’s capital city, Columbus, for a long time, but the new pup in town, Skybus, has edged out the low-fares king at the city’s Port Columbus airport. In January, Skybus had 19.5% of the Columbians using the airport, while Southwest had 19.1% of the 588,000 people using the airport that month. That was the busiest January in the airport’s 78-year history, said David Whitaker, vice president of business development and communications. Skybus started up in May 2007, and has boosted traffic at other airports as well.
February 2008 Archives
United was the first, but when only Spirit and Skybus match, that’s hardly an industry-wide trend. But now US Airways has responded to the new second checked bag fee that United announced a week or so back. And like United, it said more such ancillary charges are likely as oil keeps climbing. You can hear someone you know talk about these extra charges on National Public Radio's Morning Edition here, and you can read US Airways’ own explanation of the policy on the next page where the airline’s president, Scott Kirby (below), talks about the change.
The wall of silence around the US airline industry’s biggest (possible) deal in years may have cracked, just a little but. The top two Delta Air Lines executives broke silence on a possible merger with Northwest Airlines, telling employees that the Atlanta-based carrier has yet to “arrive at a potential transaction that meets all of our principles” for a merger or combination. The employee memo is the first communication from either Delta or Northwest Airlines since the two carriers (sort of) acknowledged merger discussions. Delta chief executive Richard Anderson (right) and president and chief financial officer Ed Bastian said in their internal memo that they would not enter into a deal unless the combined carrier was be called Delta and be headquartered in Atlanta. Although these principles are similar to those stated earlier by the airline, executives at the airline have been silent for a week, as have officials of the Air Line Pilots Association chapters at both carriers. (Listen to a Tuesday afternoon IAG podcast here about the labor issues.)
‘Moonlight Express’ may sound romantic, but back twenty years ago when the old Eastern Airlines tried to boost its aircraft utilisation by running long-distance overnight flights, even the most frugal of flyers called them the ‘redeye’ instead of that alluring trademarked name. This original effort by Eastern was not enough to keep the airline alive, but some carriers today are in fact trying the redeye approach. It's always been part of the JetBlue strategy, and now the latest night rider is US Airways. The airline, based near Phoenix, plans overnight flights between its secondary hub in Charlotte, North Carolina, and both Sacramento, Calif., and Tucson, Ariz. The US Airways move to add cross-country flights is somewhat against the grain, as other carriers are trimming back on transcons in the face of ruinous competition. Perhaps aware of the challenge, US Airways has set both these flights for late night departures.
Everyone has a soapbox someday. In London’s Hyde Park, they even set aside a corner (Speakers’ Corner, appropriately) for advocates of almost any cause, from the antivivisectionists to the antidisestablishmentarians. Here in Washington, people with causes are allowed to speak for however long they wish if they’re Members of Congress, and others sometimes are also given a soapbox from which to pour out their beliefs. Left Field was fortunate the other day to be given a soapbox by the International Aviation Club of Washington. The venue was a so-called media forum where journalists were expected to hold forth on the issues of the day, but as usual, the experts on the podium ended up learning from the real experts in the audience. The topic de jour was mergers and consolidation, and even the experts didn’t know what the next day's headlines would be. But as the group went through the various rumoured combinations (should Southwest buy United, etc), a thought suggested itself, and we’re going to repeat it here: is this an opportune time for something more ambitious than a domestic merger that may or may not take capacity out of the system, that may or may not produce strong revenue bump-ups, and that may or may not please customers?
When it started up, JetBlue said it was proud to call New York homebecause it was a New York type of airline, sort of hip and cool. Well, in the eight years since then JetBlue has grown a lot and it seems has found a few other JetBlue kind of towns that are nowhere near the holy waters of the Hudson River. Since the beginning of this year, JetBlue, conceived and born within sound of both of new York’s big airports, JFK and LaGuardia, has made moves to boost two micro or minihubs pretty far west of Broadway. It set a May 1 expansion of its service from the Austin-Bergstrom International Airport in Texas, with new daily non-stop flights to Fort Lauderdale and Orlando, Florida, and San Francisco. Austin is a government, hi-tech and entertainment centre, with a large live-music industry - a city trademark that is has a presence at the airport with frequent live performances greeting passengers. A statue of legendary pre-rock guitarist Stevie Ray Vaughn (left) sits near icons of Texas heroes Stephen Austin and other forbears (below). Austin mayor Will Wynn characterised the move as “creating a bridge between the East and West Coasts for their E190 aircraft”. JetBlue chief executive Dave Barger quipped that "JetBlue struck a chord with Austin travellers and vacationers."
What’s the best place to find out about British Airways’ plans for its new Open Skies operation? Why, Washington of course. BA has had to tell US regulators about its plans so it can win the formal permission to fly it will need, and the filing it made with the US Transportation Department shows that it plans its first flight from Paris – a city on its short list – and New York’s JFK. Open Skies, once dubbed Project Lauren, says that it would later link JFK with other European points such as Amsterdam, Brussels, Frankfurt and Milan. The carrier had not specified airports earlier, and still has not detailed if it would use the older Paris Orly or the city’s newer Charles deGaulle airport. L’Avion, the French entry into the North Atlantic all-premium contest, uses Orly. Open Skies says it has won tentative IATA approval to use 'EC' as its code, but it will also operate as a code share for BA itself as BA*. To buttress its plans for premium level on-board service in its three-class Boeing 757s, Open Skies says that it will have a crew ratio of about one crewmember to 17 passengers. It’s asking for a May 1 approval from DoT so it can start up in June, in time for the summer's high season. But the DoT dockets (this one is OST-2008-0064) aren't the only place that Open Skies is talking: it's set up its own website and blog.
These United States mark Presidents’ Day today, commemorating the birthdays of two of the greatest, George ‘Father of his Country’ Washington and Abraham ‘Preserver of the Union’ Lincoln. It’s a big day this year as these same United States prepare to electtheir next president. One of the people who wants very much to become the forty-fourth president said the other day that when she’s the chief executive, she’ll be very wary of the airline mergers and consolidation possibilities that are getting almost as much public attention as her race against Barack Obama, the Illinois senator who is leading Mrs. Clinton (right) just now. Both are eagerly courting the blue-collar and union vote, and both are seeking to reassure working Americans that they would protect their jobs against the ravages of corporate bosses and other capitalist predations. Indeed, Obama has expressed scepticism about mergers of any kind. It’s interesting that airline issues even make it onto the candidates’ radar screens, but there’s a sharp up-tick in interest in the issue in the capital city and Washington is becoming quite exercised about possible consumer dissatisfaction and other possible fallout from airline mergers. Someone you know can be heard here talking about this phenomenon on an IAG podcast.
We’re virtually certain that Second Life, that sort of Internet world where people play with animated figurines called avatars, makes little sense. It always seemed like grown-ups playing with dolls. Well, Alaska Airlines has finally found a useful use. They’ve rolled out a virtual assistant they call Jenn, an Internet denizen who takes questions on the Alaska and Horizon website. She’s sort of an aviator avatar. With her own voice and personality, Jenn answers hundreds of common questions and helps customers book travel. People go to the ‘Ask Jenn’ link on alaskaair.com's main toolbar (righthand side), rather than trying to ‘intuit’ (or guess) where to go or struggling with a site ‘map’. Jenn is a middle ground between the internet and talking to a ‘real’ person after several real minutes on hold. Browsers type a question in Jenn's chat window and she answers verbally, asks follow-up questions if she doesn't understand, or, if she does, gives a written response and related links, and shows relevant pages.
They call the northwest corner of South Carolina ‘The Upstate’, and that is true in more ways than one. The region’s main airport, the Greenville/Spartanburg airport, a facility with about a million-and-a-half boardings a year, has some of the highest fares in the country. The city is typical of many smaller of US cities: too small for a lot of main-line service, but enough of a business centre that people want and need to travel to and from it. Spartanburg happens to be a centre for the US chemicals industry, and BMW, a truck-maker, and Michelin all have factories in the area; it’s a banking centre as well. The Bureau of Transportation Statistics (yes, there is such a thing, and they work hard) said the other day that the GSP airport had the third-highest average fare prices for domestic service during the third quarter of 2007. The average fare was $465, and only Cincinnati, a Delta-dominated fortress hub, and Anchorage, Alaska, were higher. Well, some airlines do pay attention. US Airways says on the GSP airport website (and indeed in local advertising in The Upstate), “There’s no need to drive to another airport because we brought new low fares to Greenville-Spartanburg, SC. We've lowered fares to lots of your favorite destinations, so there’s no reason to travel to another city to get a great low fare" What airport might Upstaters drive to?
Hail, farewell and hello? Robert Milton, the American/Canadian who took Air Canada through reorganization, has moved toward making a graceful exit from the airline industry. But Milton, who heads up the airline’s parent company, ACE Holdings, may have one more big deal to do. Milton said that the holding company, created when Air Canada emerged from reorganisation, had been “approached.” Milton said “we have now been approached by private equity, by pension funds.” Although he was not explicit in defining the direction - buying or selling – the prospect of a cross-border investment is important, all the more so as the era of international liberalisation approaches. (That's the US-Canada border, to the right.) Both the United States and Canada limit investment in airlines by foreign companies and citizens, as the Canadian transport minister was quick to note after Milton spoke, but still any step across borders is significant. Even as he acknowleged that Canadian law limits foreign investment, Milton told analysts “there has been dialogue with the US space looking to change, and I don’t think it’s inconceivable that Air Canada could be part of it and I think it would make a lot of sense for a US airline to look to Air Canada.”
One man’s meat is another’s ham? Well, you do have to be careful, eating while in the road, and for those who follow stricter dietary regimes, it’s sometime’s a challenge. The same challenge applies when you're on a long trip and develop a yen for comfort food, the kind of concoction grandma (yours perhaps, certainly not mine) might make. Well, if you're from New York or fly through New York, there’s a new New York company that tries to satisfy even the most orthodox of tastes: Kosher Vending Industries. The firm has just signed a contract to put four devices that sell kosher delicacies such as knishes (a sort of dumpling, only more so; see above right) in New York City airports. It will have four at JFK and two in Newark airport. Of the four at JFK, two will specialize in a treat that most people like regardless of faith: Nathan’s Famous hot dogs. (Yes, they’re famous, but that’s also part of the name). The vending machines have been in places like hospitals for a while, and one eagle-eyed medical blogger pointed out that the machines have the notice “Hot Nosh 24/6” on them. Does this mean they shut down for the Sabbath? Nope, says the company. They’re just being funny.
Washington never runs smoothly and election years are worse. Take what should have been a simple straightforward procedure, getting a new FAA administrator in place. But Robert “Bobby” Sturgell, who’s been acting FAA administrator since Marion Blakey ended her term last September, may not get the job to keep. After two hours of generally hostile questioning by senators, two members of the self-proclaimed "world’s greatest deliberative body" announced they would block his nomination from coming to the Senate floor for a vote.
Sturgell (right) needs a Senate vote if he’s to get the job for a full five-year term set by law. But after the back and forth on air-traffic controller staffing, attrition and morale in a Senate commerce committee session that was far more contentious than the usual confirmation hearing, that’s not a sure thing, even for someone as deeply experienced as Sturgell, a former NTSB staffer, former United Airlines pilot and former Top Gun navy pilot. One senator, New Jersey’s Frank Lautenberg (left), announced at the start of the hearing that he was opposed to the Sturgell nomination. “He’s the wrong man at the wrong time,” said the Democrat. Within minutes of the close of the hearing, Lautenberg and his fellow New Jersey Democrat, Robert Menendez, announced that they had placed a ‘hold’ on a final vote on Sturgell’s confirmation. That puts Sturgell's FAA future in limboland.
When people are used to coming into your store, you don’t have to offer as many lures, and that rule of retail is certainly the case when it comes to airline websites. Used to be, the carriers would give people extra frequent-flyer points just for booking on the airline’s own website instead of taking their business to a walk-in agency or an online travel agency or ‘OTA’. That is ending. United ended its policy of giving miles to united.com bookers the other week, and Continental and US Airways both ended their online bonuses late last year, following Delta and Northwest. Now American is the last of the network carriers to offer a bundle of bonus miles for booking at .com. Well, not exactly a bundle. Used to be, American would give 1,000 miles for booking on line, but that largess has dwindled to 250 miles.
Much like darkness after sunset or rain after clouds, the reaction was predictable and the mention of two small denomination coins - nickels and dimes – was inevitable after United Airlines said the other say that it would start charging people in the cheap seats to check a second bag. Some were alienated, and one flyer told a discussion group that the policy would doubtless hurt those who could least afford it and that it was “kind of like the rich getting richer and poor getting poorer.” She did not suggest a federal baggage-fee subsidy, however. Someone you know and (we hope) like, can be heard discussing the reaction here. United revenue officers think that this sort of 'unbundling' of airline services is the wave of the future, but, they say, in the words of airline official Kevin Knight, “We don’t really know what to sell to our customers” when it comes to ancillary charges. Food on board may be a no-brainer, but, Knight mused, what more?
United isn’t the first to try this approach: Ryanair started this a la carte pricing, Air Canada made it central to their pricing policy and here in the US of A, Spirit Airlines, Allegiant and Skybus have picked up on the theme. With fuel prices refusing to behave themselves, even Southwest Airlines has gotten a little less generous with free space in the bellies of its planes; the other week, the discounter began charging for a third checked bag.
Okay, we’re here. This is the guy who’s been babbling on the Airline Business blog and now he’s over in his own corner. You can ignore him or respond, both at your own peril. Because this blog is entirely a personal perspective based on about 20 years of reporting about airlines, you’ll probably want to respond, even if it’s just to point out that two decades of reporting does not necessarily make for wisdom. We do however remember both the good old days (to the right) and the bad old days. One thing we like to do is offer links, often to stories or reports about the subject at hand; if you have a link you want to suggest, send it along. Most of the topics that get out into Left Field will be airline strategies and tactics, often raised by the question, 'what were they thinking?' And of course some are raised by the profound admisssion, 'Oh, I see. I didn't understand.'
A few words about my life and times: I was born, went to school, spent four years in college in England (and still like the Brits), came to back to the US of A, taught school, worked in Congress, lost my hair and became an airline reporter. In that order. There’s an artist’s misimpression above and to the left and a picture of how I think of myself above, also above and left.
DAVID FIELD has been an aviation reporter since 1982 and is now Americas Editor of AIRLINE BUSINESS, the London-based monthly magazine for executive-level managers that covers airlines worldwide.
He covers safety, frequent-flyer and consumer issues as well as labour and financial aspects of airlines and airports. He spent nearly two decades at major daily newspapers, including USA TODAY, and earlier was congressional correspondent for Aviation Daily.
He is a frequent guest on public radio and television and on other media outlets in the US and the UK.
He is a former congressional aide and a former college instructor. He is a graduate of Oxford University in England.
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