Strategies and tactics: June 2008 Archives

Yes, it does seem like an airline cuts flights, routes or employees every day. That's because they do. And probably should. The latest comes from American Airlines, which said earlier it would do some deep slashing. Now they've detailed their plans, and they include ending all service to not one, not two, but three state capitals. They're Harrisburg (Pennsylvania) at the right, Providence (Rhode Island), and Albany (New York). And it doesn't stop there. American and its Eagle unit are cutting out pretty much all O'Hare service to the Gulf Coast, that Katrina-ravaged region where Eagle had just begun building up in the last year.

Things are tough all over. The latest blow was at UAL's United Airlines, where the carrier will furlough some 950 pilots later this year. The airline announced some dramatic capacity cuts totalling more than 14% a week or so ago, and now says that it just won't need as many pilots. These layoffs are about 15% of United's 6,518 pilots. United says that it will also trim some of its bag handlers and others for a total of about 1,600 job cuts by next year. The airline said it was continuing "discussions with ALPA and all of our unions on ways to mitigate involuntary furloughs." The union had no immediate comment, but Left Field did. You can hear him here. And you can hear Left Field talking about the oil crisis here and here.

Please, please Pittsburgh officials are flying to Dallas today to beg, er, we mean ask, Southwest to increase its flights at their very empty airport. US Airways has declared Pittsburgh an 'un-hub' and cut back service at the Steel City dramatically. The carrier, which had once made Pittsburgh one of its major hubs, has cut service there progressively from 500 a day just seven years ago to about 70 now. Meanwhile, Dallas-based Southwest came in in May, 2005, growing from 10 daily flights to more than 20 now. So, we wonder, who else might be begging Southwest for more service?

An interesting way to write contract: write it so that no matter what the other guy does, he'll be in breach of contract. That, it seems, may be what Delta is doing with its regional contracts. That's one interpretation you could put on Delta's aggressive campaign to end its flying deals with two regional airlines, Mesa and Pinnacle.

The carrier told Mesa back in April it was ending its contract with Mesa's Freedom Air unit, which flies 41 planes for Delta. The feeder had failed to complete enough of its flights in recent months and so was in breach of contract. Mesa, which needs the business, sued and won an injunction. Delta denied then and denies now it is playing dirty, but it is paying hardball.

The end of UniTED: United's slash-and-burn attack ends (among other things) TED, the low-fares airline-within-an-airline that parent UAL began in 2004; with Ted's demise comes the end of the second generation of brands within brands, an experiment that leaves no certain result. United's move is as much a judgement on aircraft types as it is on the sub-brand strategy, but it is pretty clear that the carrier just saw no point in operating a even lower fare unit when oil is $130 a barrel. The airline wants to use Ted's 56 Airbus A320s in mainline service and will park its Boeing 737-300s and -500s to make way for them. This is clearly a wiser use of an asset, given the lower fuel burn of the European plane. And in any event, United is a low-fare carrier, whether or not it is low cost.

How do you measure a negative? Well, you don't and can't but one group thinks it can when it comes to airline trips not taken and taxes not paid. The group, the travel industry association, a trade group, has added its voice to the study of the cost of delays airline delays with an estimate of how many travellers are avoiding the airline system in the US. TIA said that 28% of air travellers it surveyed avoided at least one trip because of problems at the airport, hassles with security and the like. (You know the story.)

"The air travel crisis has hit a tipping point: more than 100,000 travelers each day are voting with their wallets by choosing to avoid trips," said Roger Dow, president and chief executve of the association. More than half the avoided trips would have been for leisure, so Florida destinations are losing visitors, for instance. Travelers expect hassles at Chicago O'Hare Airport and decide not to fly to South Florida, he said.