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September 2008 Archives
Change comes slow to the shuttles, the once-profitable air links that ply the major city-pair corridors of the Northeast, those between New York and Washington and New York and Boston. The biggest recent change was back in November 2005, when Delta downsized the aircraft it used on these routes from B737s to MD88s with 134 seats. Rival US Airways Shuttle, which inherited the Trump Shuttle, which was successor to the Eastern Shuttle, the original, starting back in 1961, uses the 120-seat Airbus A319 family on its service. Delta, which is the successor to the Pan Am Shuttle, now says that it will go to a two-class seating configuration this December 1, adding 14 first-class seats as to the aircraft's 128 open, unreserved economy seats.
From the past, a blast. Deregulation, like success, has many fathers when times are good, but those fathers and architects sometimes fade intro the woodwork when airlines are caught up in real turbulence. Not so for Alfred Kahn, who is one of the few to earn the title and one of the few to stand consistently for what he believes in. As chairman of the old Civil Aeronautics Board, he led the movement to deregulate US airlines in 1978. Now 91, he's still active and sharp of mind and tongue, and spoke this week to the world gathering of airport types at the Airport Council International's big global summit in Boston. Kahn reminded the 2,000 delegates, "The industry in the last 30 years gave the public something it had not received before: high quality, space, and low cost. It catered to a variety of demands and abilities today so that we had an enormous spread of fares. It offered the people upgrades such as business class and frequent flyer miles."
But Kahn, who now teaches at Cornell University, noted that increased air traffic has led to congestion, which has led to delays and unhappy flyers and that has led to calls for government reregulation.
![30 things for tourists to do in Santiago Chile[1].JPG](http://www.flightglobal.com/blogs/left-field/30%20things%20for%20tourists%20to%20do%20in%20Santiago%20Chile%5B1%5D.JPG)
Left Field is flying away for a few days, but rest assured we're not on a pleasure trip. We're off to Santiago, Chile, and will be posting from there as time and Internet connections allow. We might have fun, but only if it's allowed by the local authorities.
Lufthansa moved deeper into social marketing with what it calls the airline industry's only social networking site created specifically for college students. It opened GenFlyLounge, which lets members post feedback on their travel experiences, rate places and events. The airline's on-line product manager, Florian Gmeiner, calls GenFlyLounge "a student travel matching service." It can cross-reference a registered member's identified preferences with other user-generated content so users can check out specifc places or hotels. This is an attempt to play on the student generation's trust of its peers, or, one might say, to play off the distrust of anyone over 30. The site is an extension of Lufthansa's microsite, GenerationFly, which offers discounts to students.
Surcharges, eh? They're different up there, north of the border. Instead of just raising fares, they slap on fuel surcharges. Until the other day that is. The big Kahoona up there, Air Canada, said it will start incorporating all fuel costs into its advertised fares on North American flights, rather than tacking them on separately as surcharges. The two other major Canadian carriers, WestJet Airlines and Porter Airlines, quickly followed suit by removing their own fuel surcharges. But Air Canada said that it was wrapping the fuel surcharge into the fare, which effectively means a fare increase of $20 to $60 each way. So did the other two.Air Canada masked the fare hike by adding that it will be the first major North American carrier to drop its extra fee for a second piece of checked baggage in response to the recent drop in fuel prices. The fee ends September 23.
The Emperor Nero is said to have said, 'Let them hate me - so long as they fear me.' At the airlines, it may well be, 'let them grumble- so long as they pay.' Or as AirTran's CFO puts it, "people don't like the ancillary fees and they may grumble about them but they don't change their behavior." The carrier's senior vice president of finance and chief financial officer, Arnie Haak, told the Calyon Securities Airline Conference that when AirTran introduced optional seat selection fees in June, offering to let flyers choose a seat when reserving for a $5 fee, passengers accepted it. "They say to themselves, 'I'm going to spend $12 on a magazine, a soda and some chips at the airport. Why should I be cheap?'" 
Its runway is the second longest in the state, and even Air Force One has landed there. It's right on the edge of one of the wealthiest regions in the nation, and sits near the junction of two major intestate highways. So why won't anyone fly to Hagerstown, Maryland, where the 7,000-foot runway was completed late last year at a cost of about $62 million? Just west of the wealthy
on, but United has taken the ancillary efforts a bit farther: it just raised the fee to check a second bag from $25 to $50 one way. United estimates that the $50 fee will apply to one in seven customers because its elite-level flyers, people in first or business or on active military duty are exempt, as are international passengers. Interestingly, American was the first out of the bag, er, box, with a fee for the first bag, and it stayed out there alone until others followed, with United setting off the chain reaction. Will that happen now?The airline says that by year-end it will have developed a way for customers to pay baggage fees at united.com when they check in on-line. Chicago-based United estimates that its merchandising efforts including its bag fees will raise as much as $700 million in 2009. The United fees begin on November 19.
Delta appointed a new SkyMiles guy the other day, and told him that as he works to get the loyalty plan ready to integrate with Northwest's plan when they merge, he'd better keep the frequent-flyer plan sharp. So Jeff Robertson, newly named vice president of loyalty programs, made his first action an offer of double bonus miles on more than 50 routes to or from Atlanta's Hartsfield-Jackson, the carrier's biggest hub and home base. The 50 city-pairs include Atlanta and: Akron, Ohio; Dayton, Ohio; Moline, Ill, and White Plains, NY. Sound familiar? They should. They're AirTran routes. AirTran, which also has its largest base at Atlanta, began a promo a few weeks earlier giving double A+Rewards credits on any route originating from Hartsfield.
We were chatting the other day with Mark Dunkerley, the suave Brit who's now a Hawaiian. After quite a few years at British Airways, Mark took over Hawaiian Airlines a few years back and last we saw him, had sort of gone native, or at least Tommy Bahama with those neat shirts they wear out there. His prime competitor, Aloha Airlines, had to shut down last April, and Hawaiian had to rush to fill in on intra-island routes. It is now actually flying a Boeing 767 between Maui and Honolulu even though this is a plane that's made for very high altitudes (35,000 feet) and very long-distance flights such as the routes to Australia or the mainland that Hawaiian flies. The Maui route takes about 18 minutes, which means the pilots have just about enough time to get the gear up and maybe do the flaps.
charging $15 to check a first bag as of October 7. The airline said in a Securities and Exchange Commsssion filing that its estimate is based on "incremental revenue and operational cost savings." It also said in its investor upgrade that it is "comfortable with its forward bookings over the next six weeks" and that bookings were up by 2 to 4 points everywhere except across the Atlantic, where they are flat. As it cuts capacity this quarter (2.9%) and next (11%), Continental anticipates "substantially higher mainline domestic yields," it said.
It's perhaps not the most auspicious date to be marking an anniversary. After all, today is September 11, the seventh anniversary of the terrorist attacks that changed the United States and changed aviation forever. But for aviation, it's another day to mark: airmail service in the United States is 90 years old, and it's to be marked by the flight of three vintage planes across the country, starting on Long Island and taking 15 days to get to San Francisco. The planes include a Boeing 40C from 1928 as well as two Stearmans. All are veterans of early airmail service.
Bundles of joy. When airlines began their so-called unbundling, the breaking down of fares into various attributes such as refundability, seat choice, bag-checking options, and the like, a big worry was just how to sell the choices. Would you have go to the airline only? Air Canada, the first, at first reserved its approach - everything's unbundled but you have to buy separately - to itself, but now the GDSs and other travel-agent tools are developing the ways to sell it all. The Air Canada development - a deal with Farelogix - puts the carrier's a-la-carte fares and other products as well as Air Canada flight passes into travel agents' desktops. It follows other links and interfaces through competing middlemen as well as a product on Galileo, the Travelport GDS, dubbed Agencia, says the airline's John Reber.
Could he be right? We hope so, because Ray Neidl, the hard-working Calyon Securities analyst, thinks that "the
worst is past for US airlines." This would be a very good thing, because we have just learned that the US airline industry paid out $4.1 billion for jet fuel in July, up 72% from the same month last year. Consumption was relatively flat at 1.11 billion gallons. The cost for a gallon of jet fuel rose 77% to $3.69 from $2.09 last year, the Bureau of Transportation Statistics said. BTS, a part of the Transportation Department, said that, including international carriers, fuel consumption fell 1% to 1.61 billion gallons with a global-wide fuel bill of $6.16 billion, up nearly 80%, year on
year.
Yes, we are not bankrupt today. Th
eBay. The mere name conjures up images of...things other people don't want. Old books, auto parts, used computers, and airline trips. Yes, trips and vacations on JetBlue. The New York-based low-fares, high-service carrier, which now calls itself a "value airline," decided to put 300 roundtrips and six 'getaway' vacation packages on up for auction on the world's largest on-line marketplace, as eBay calls itself. JetBlue says it's the first to use an electronic auction site for last-minute trips such as these. EBay has been used before by carriers who wanted to donate seats to charties, and the Republican vice presidential nominee, Alaska Governor Sara Palin, says she put the state's plane up for sale on eBay when she took over from her predecessor. Last-minute travel deals and blind bargains are nothing new - there was even a site called lastminute.com - but this does seem to be a first.
The snappiest new airport terminal to open in North America for a good long while could well have your name on it. Or your company's. That's because in Detroit, where a new terminal is set to open on September 17, the airport owners, the Wayne County Airport Authority, are open to suggestions. They've hired a Denver company named General Sports Alliances to sell the naming rights to the new $430-million facility at Detroit Metro, the eleventh busiest US airport. People think this is the first time an airport has sold naming rights, although it's fairly common for airlines to pay to put their name on a sports facility or the like. Even the old USAir put its name on sports arena that used to be called the Capital Centre, in suburban Washington, although the airline changed its name and then moved to Arizona, while the Centre was imploded and then torn down.
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Good money, bad money. Midwest Airlines, which used to be Midwest Express and is sometimes dubbed the bottomless money pit of Milwaukee, has saved itself from bankruptcy with yet another investment by TPG, the Texas Pacific Group. It's about $30 million. What's different this time is that it's lured another airline, Republic Airways, into putting money into its future, even though the last airline it won over, Northwest Airlines, had to write off all of its $213-million investment in Midwest (for a 47% stake). Republic puts in $15 million in a one-year loan, and agrees to another $10 million if Midwest meets some performance criteria. But Republic also gets a home for the dozen 76-seat Embraers it has been trying to place since it had to take them back from Frontier (which hasn't avoided bankruptcy) in late June.
US Airways is three years old. Or maybe more. It's just about the third anniversary of the takeover of twice-bankrupt US Airways by America West Airlines, a little heard-of upstart out in Phoenix, and now, alas, a friend of Airline Business and indeed a very good all-around fellow is leaving. Travis Christ, who was in charge of the combined carrier's marketing and loyalty plan, is leaving. He says he'll tell us where later on, but says it's not for another airline. A young guy, TC was the target of many a flyer's wrath as the combined US Airways meshed its two frequent flyer plans and then, like every other airline, made moves to trim the benefits. Some people were particularly incensed that US Airways stopped giving elite level members of Dividend Miles, its frequent-flyer plan, extra points for each mile they flew. But we knew TC and we knew he was a solid guy, and we are sorry he is leaving. He was in charge not just of the loyalty plan but also in charge of US Airways advertising (back when they still did it) and sales and stuff. He was the airline's Internet and website architect and designed its on-line marketing efforts.
Full retre
EasyJet, Ryanair's largest low-fare rival in the European skies, has taken a decidedly different tack on screen-scraping and indeed on reservations as whole than its hard-line competitor. Within weeks of Ryanair's move to cancel the bookings of travellers who bought through unauthorised sites or screen-scrapers, EasyJet cut its fee for making a booking though a Global Distribution System (GDS) from a sliding scale that went up to 5 pounds sterling (that's 7.50 Euros, or about $312 in US money) to lower fixed rate of 3.30 sterling. The move is intended as a sharp contrast to the actions taken by Ryanair, says EasyJet distribution manager Jerry Dunn. The cut applies to bookings made through GDSs and other "approved third-party distribution channels" that are connected to EasyJet's API (Application Programming Interface).
Herewith we present graphic evidence that pilots will certainly be pleased with Alaska Air's retirements of its MD80 (right) fleet this week and its completion of a transition to an all-Boeing fleet. The 737NGs (below) that Alaska flies are just lots cleaner, less cluttered and better organized from a pilot perspective. Go to the other end of the plane, the MD80 engines, and there's the real reason why management is pleased as well: the engines on the MD80s swallowed about 1,100 gallons of fuel per hour of flights; the 737-800s that replace them drink in about 850 an hour. Alaska was paying $4.19 a gallon in July, meaning that the MD80 costs about $4,600 to keep aloft for an hour. At $3,561 an hour, the 737-800 is about 30% more efficient. And the -800 carries more people (157, compared to 140), so the cost per-hour, per-passenger is $22.68, versus $32.92 on the MD80s. Alaska says it will save between $3 million and $4 million a year on fuel -- and that doesn't count savings on the maintenance of the nearly new 737-800s.
So here are the three reasons: the cockpit, the left engine, and the right engine.
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