December 2008 Archives

Okay, no snarky comments, no witty little quips like 'who gets the miles?' Just a little tale and a good wish. Seems a lady was on a Northwest Airlines flight from Amsterdam to Boston and she was eight months pregnant. For some reason, she went into labor somewhere over Canada, and the pilot asked if a doctor was on board. Two MDs answered the call, and helped the lady, a Ugandan national, deliver a six-pound child. The captain thought about landing somewhere in the big neighbor to the north, but the child beat him to the decision, and so the flight, on a Boeing 757, continued on to Logan. Our only question: will the kid be Ugandan, Canadian, or a US citizen? And will she have a Happy New Year? We hope you do.

Yes, those are storm clouds, and no the airplane doesn't have a broken nose. It has bloody nose, and so does the entire industry it represents. Air cargo is sick, and so are airlines. International air cargo fell by 13.5% in November, its largest drop since the months just after 9/11, says the International Air Transport Association. Giovanni Bisignani, IATA's director general, calls the decline "shocking" and says the airline industry is now "shrinking by all measures."

Who's happy now? Well, certainly not a lot of flyers. About one million US flyers were delayed or stranded in the days just before Christmas, when some 8,800 flights were cancelled, according to website flightstats.com. Many were in the Pacific Northwest and many, alas, were at the nation's connected-est airport, Chicago O'Hare. O'Hare delays proved that even if Chicago is no longer the nation's busiest airport, it is one with tentacles that do reach awfully far. Blame it on the weather. Snowstorms, ice, fog, and freezing temps slammed the Midwest and by Christmas Weekend, the delays had also enveloped the nation's truly busiest airport, Atlanta's Hartsfield Jackson.  We do know one person who took some cold comfort from the chaos: Kate Hanni.
The Californian realtor and founder of flyersrights.org sees the calamities as a widespread return to the bad old days of tarmac delays, the kind that set her on her crusade to begin with and the kind that set the Transportation Department to set up a tarmac delay task force. 

 

  .We were puzzled when Delta made the announcement back in November, saying it would fly nonstop to Paris from (drum roll) both Pittsburgh and Raleigh/Durham. It perplexed us in that none of the three end points was a Delta stronghold, even though the Paris end, at Charles de Gaulle, had plenty of SkyTeam feed from alliance pal Air France. But we figured they knew what they were doing and anyway these US cities really were hungry for overseas service. Pittsburgh in particular had not had a transatlantic link since British Airways and then US Airways pulled out in 2004, and RDU had only one, a daily nonstop on American to Heathrow. And we figured that RDU, based in the sunny South and certainly home to a stronger economy, could perhaps support a flight. Nope.

They won't give up. The Feds just will not give up on fixing LaGuardia, even though the airport operator and the airlines say that the cures proposed are as bad if not worse than the ailment. The FAA tried a slot auction at LaGuardia and the other New York City airports, but the airlines and the airports owner, the Port Authority, got a federal court to block that with a stay that puts off any possible legal resolution until next autumn. Now in the waning days of the Bush administration, the Transportation Department and its FAA say they want to persuade carriers to agree to voluntary flights cuts at the worst and most congested of the three airports, LaGuardia.

Given the fairly serious capacity cuts that US carriers have taken in the last few months, this is not the direction things are supposed to be going. Lowered capacity (we're tempted to call it diminished capacity, but judges, lawyers, and forensic psychologists might quibble) is supposed to produce higher revenue, but further signs of weakening demand for air travel suggest that US airlines are headed into a serious downturn. The Air Transport Association says monthly unit revenues for November rose an overall 0.4%, but were down domestically by 13.6%, year over year. This is the first significant drop in revenues in nearly five years, with Asia/Pacific unit revenues (Revenue per Available Seat Mile or RASM) falling by 5.6%, year over year. The only bright spots were Atlantic and Latin revenues, each up by 5% in the month. JP Morgan airline securities analyst Jamie Baker, noting that some Thanksgiving travel actually took place in December, predicts that December "should look less bad." Maybe....
 

When Sean Menke left Air Canada and returned to Denver to run Frontier, he evidently brought with him more than just a taste for Molson's beer. He may have brought home something of Air Canada's approach to selling airline seats. The Denver airline just unveiled a new three-tiered approach to fares, offering Economy, Classic, and Classic Plus fares under the rubric, "when you choose for yourself, you get what you want." Menke says the airline calls the approach AirFares, and that the website offers a tutorial in how to make a booking and choose a fare. The approach is a bundled one, taking various attributes that Frontier had charged for separately, wrapping them together and offering a 'combo meal' approach. And it's simpler than the multiple fare levels that used to dominate the carrier's offering. In that sense, it is much like Air Canada's four-levels offering, and simpler.
The lowest tier, Economy, is sort of what Frontier's now offering: a seat with frequent-flyer points; you can get a seat assignment 24 hours before departure, but only on the Web, and you pay $150 for a change fee or for a confirmed alternate flight; it will cost $25 to buy at the airport or over the phone. You pay for on-board TV, you pay for bags and you pay for food.It gets better with Classic, with free TV, free bags and advance seat assignment; the $150 fees also fall to as little a $50 and you get 125% of the mileage. Fares in the Classic class start at about $20 more than those in Economy.

 

Merry Christmas. Do not be alarmed. The pilots at United have not been a happy lot for a long time, what with messing up their ownership of the carrier then struggling through a really long bankruptcy and seeing their pay pared way back. Since Glenn Tilton came in to United's executive offices, they've been really on the warpath over his pay and perks. Now they're posting a letter to flyers that says, "We are very much aware that the friendly skies have become less friendly in recent times because of increased costs, reduced flights and cutbacks in in-flight service and amenities. We have been at the forefront when it comes to resisting these cost-cutting initiatives because we do not believe that our passengers should be penalized for the mistakes of United's management. We still feel that way and are still fighting the fight on behalf of our passengers." 
 

Suddenly, Boston is back on airline route maps. The city, also known as the Hub of the Universe, among other modest titles, has never been humble, but no one airline has ever been able to dominate service to and from its Logan International Airport. Its traffic, long split between American and US Airways, now has a third major player, JetBlue, with the largest market share, 17%. American has 15%, Airways 15%, and the rest is divided up among others, according to the Bureau of Transportation Statistics. So we were interested when a flurry of announcements put Logan way up on the list of happening places.

 

Anyone can cut air fares, but it takes a different airline to offer a break on the extras. That's just what United is doing with its add-ons and extras, but only if you buy through its website. We don't know how much weakness in bookings is behind the promotion, but the deals are something different from the every day holiday bargains. The Chicago-based carrier, for instance is cutting 30% off its legroom offer, Economy Plus seating. This brings the option, which gets you a seat with more legroom up in the front of coach, down $9 to $149 ach way, but the offer is only good for three days. What's intereresting is that rivals can't just match it, since no one has exactly the same option on offer. United is offering longer windows on buying a one-time pass to its Red Carpet Club lounges, with a 20% discount to $40, through January 15. That's also when United's 45% off offer ends on its door-to-door bag service. This offers FedEx shipping on bags, from a traveller's home to a destination.

People carry all sorts of stuff with them when they fly, and when they go on along overseas trip to visit relatives, they like to bring something to remind the folks of home. So it probably shouldn't have been that much of a surprise when the Customs guys found something really bizarre in the luggage of a guy arriving at Washington's Dulles International from Central Africa: three charred monkey corpses (see below). And that wasn't all. Alerted by the sniffing of an alert aide (right), the Dulles Customs and Border Protection agents also found 10 pounds of deer meat and another 10 pounds of dried beef in the traveller's bags. The CPB did not say where the flyer was from. 

Left Field happened to hear Wolfgang Mayrhuber, the chief executive of Lufthansa, who was in Chicago for a Star Alliance chief executives meeting. He spoke over breakfast with reporters as news emerged that Lufthansa was not just buying Austrian but might buy SAS and after LH said it was taking over the stake in bmi that it didn't yet have. The Cologne-based carrier has been on a buying spree for several years, starting with its 2005 takeover of Swissair, now Swiss International, but Mayrhuber repeated his mantra, "We don't just buy airline to have airlines." He went on to explain Luftie's 'modular' approach:

Left Field just came back from a two-trip week, and saw the downturn first hand. On a quartet of AirTran flights, we saw empty seats up front in business class on three of the four segments, and quite a few empty seats in the back on one flight; on United, we saw one plane at at least a 100% load factor - and another at much less, with only half the seats up front taken - and some by so-called 'non-revs' or freeloaders. All of which is a thoroughly unscientific, totally anecdotal way of saying things could be a lot better. But don't take just our word for it. Read on for some far more precise predictions that will leave your Christmas outlook a bit bleak.

 

My father used to call awful, traumatic events 'learning experiences' and tell me how grateful I'd be someday for the chance to improve my life. That's sort of like telling the airlines that they should be grateful for the oil crisis that drove some good little carriers into oblivion, but in a sense, the industry here in the US perhaps should be thankful that it went through its forced diet when it did. The big broadcast network ABC News did a piece the other night in which it sort of took this line. The piece had a very smart reporter, our friend Lisa Stark, and she interviewed John Meenan from the ATA and then she spoke to Left Field. We wish we could get you a link to click on to see the piece, but here's sort of a written version with some video embedded.

We don't usually mention promotions, appointments and the like, but here's one we just have to talk about: one of the most powerful buyers of travel in the nation, Duane Futch, the former head of all travel procurement at Wal-Mart, retired a few months back. He was still a youngish fellow and so we wondered where he would end up, and he has. He's at GetThere, the corporate booking tool that is part of Sabre Travel Network. He'll be vice-president of travel procurement strategy.
His new job helps GetThere clients analyze their travel programs from a procurement perspective. When at Wal-Mart, Duane was known as a very tough customer and a hard-nosed negotiator. And while there, he was instrumental in creating a transaction program that manages airline ticket payment settlements globally. The picture nearby is from when Duane spoke at our 2006 Airline Distribution conference in Dublin.

Luftie send out a neat little note the other day about its website for frequent flyers, including a VA. That's Virtual (and probably virtuous) Assistant. Her name is Melissa, and she's the Miles & More Pilot for the Lufthansa loyalty plan. The site has an active-status barometer that shows how many more points a member needs to get up to the next level of the plan; it also has a new calendar that shows available seats for two weeks on either side of the date that the flyer wants. The only other airline Virtual Assistant we know of is Jenn. She went to work for Alaska Airlines a year or so ago.
But one thing we noted: we couldn't get the Miles & More website to work the other day and wondered why. It worked today, and we note that it now has Austrian Airlines added down on the bottom where LH shows off its 'related airlines' such as Swiss, und anderen und anderen. The Lufthansa board just approved the Austrian takeover the other night.

Okay, let's be frank. You be earnest and I'll be frank, as they say. We don't like this guy, Chuck Schumer, but we have to give him credit: he helped JetBlue get started, pressured the FAA to keep its eye on the ball of JetBlue's application and helped ease the way between the then-nascent carrier and airport authorities. And he made sure that they served upstate cities like Rochester and Syracuse, even though he's from Brooklyn. Now, New York State's senior senator, a guy whose voice and manner both grate on a lot of us who aren't from Brooklyn, wants Southwest to begin service at New York's Stewart International Airport.
Schumer, a Democrat, says he spoke personally to Southwest chairman and chief executive Gary Kelly and urged him to start flights at the airport, about 50 miles from Manhattan's Times Square but on the west side of the Hudson river. Schumer says direct Southwest flights to its BWI semi-, mini-, sort-of-hub would be welcomed by the flying public.

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We took little note when Sabre said the other week that it had signed a new deal with United that extends their agreement from its 2011 expiration until 2013...perhaps too little. United said just the other day that the pact with Sabre would include a way to start selling coach-class passengers up into its Economy Plus seats through travel agents who use Sabre, starting in the spring. This makes United one of the very first big carriers to announce that it's taking advantage of new merchandising abilities that the GDSs are rolling out. Until now, United has sold Economy Plus through its own website, letting regular coach passengers buy these better seats when they book a flight on-line. Now the airline can sell up through another channel and reach a wider audience.

 

Okay, they've got the American Airlines Theatre in Times Square in Midtown New York, and now they have a New York Yankees team that has as an official airline Delta, that Atlanta carrier. Both sponsorships are slightly jarring since neither of these is really a New York City airline. American sort of was, back in the day, until Bob Crandall upped and moved it to Dallas in 1979. But you have to ask, what airline would or could be New York's hometown airline? You could make the argument for American, for the reasons above, or you could make the argument for Continental, because it absorbed what used to be New York Air (famed for its "Flying Nosh" on-board snack). And now Southwest is moving into LaGuardia, but they're truly Texan. JetBlue? They're from Longggisland, not New York, and in any case they aren't that big. Leaving aside the larger question - is there real value to airlines in such expensive thngs as corporate sponsorships - we have to ask: anyone have any nominations?

It might just be true. We may have been too glum in predicting really sharply higher fares for the holidays. It seems that weakening demand has produced some deals for flights around the big travel days to the big travel spots. We keep hearing stories and have even seen a little bit of evidence. Priceline, which compiles lots of fares, says some fares have fallen nicely in just the past week, while Amy Ziff, who writes an in-house blog for Travelocity, says that the on-line travel agency's "most recent data shows a steady decline in airfares over the last five weeks, with an average price drop of $53. Softening travel demand is translating into lower prices for travellers." Those are the magic words: softening demand.

Ah for a haven. You know the kind of spot the have in mind: the little corner of the airport between the baggage ramps and the chapel where no one goes and where it's quiet and where they don't have TV's blaring or announcements that the moving stairs are about to end. Now a company has launched a contest to help locate these airport havens. And post the findings. Left Field is not sure we approve of this effort because once a secret spot is posted, it's not a secret anymore.
And we'd note that the contest sponsor is a company that makes screens to cover your laptop's screen so that people sitting near you cannot see what you're working on on the screen. A look at the entries so far is not encouraging: one lady says she likes the hustle and bustle of Washington's Reagan National in the main terminal.

The unbundling battle is moving, shifting from the airlines to the travel agent, both real and on-line, as the big three major Global Distribution Systems - Amadeus, Sabre and Travelport - hustle to deploy systems and initiatives that will allow agents to sell up and let home shoppers consider ancillaries and spend.
Sabre has made the biggest splash so far with its Attribute-Based shopping, a 'solution' that will be available to travel agents in the first quarter of 2009, but its rivals say that they have some unique features. At Travelport, for instance, a major project will allow travel agents to customise an airline's offering, while at Amadeus, progress with large clients such as Air Canada and Qantas will lead to a major new offering next year.
Kyle Moore, Sabre's vice president of product marketing, said during a presentation that the Attributes Shopper allows easier price comparison, which may address one of the public's major complaints: complexity and opacity. In fact, a survey by Amadeus, a major rival of Sabre's, suggests that travellesr accept ancillary fees if they are clearlye stated - and if the airlines' don't push too far. Robert Buckman, the Amadeus North American director of airline distribution strategies, says, "consumers won't feel nickel-and-dimed if they are getting something they value, whether it is choice, convenience or simplification.'  
But it is the simplification that is the challenge. As Moore puts it, "complexity is the friend of the agent. Air-travel shopping has become very complex."