Browsing archives for January, 2005

AirTran Posts a Profit

AirTran, Southwest Airlines, Uncategorized 26 January 2005 0 Comments

Very quietly, AirTran has built an extremely successful business, right under the nose of Delta.  The company announced a small profit yesterday, a near miracle considering the billions lost by network carriers.  Their success seems to be based on a mixture of business and leisure destinations, and option of upgrading to an inexpensive business class, while still keeping costs down and keeping expansion at a reasonable level.  Their story has not been parsed to the degree Southwest’s has (obviously), but people will start looking to AirTran has a model to copy in the future.

US Airways: We’ll Emerge from Bankruptcy by June

Southwest Airlines, Uncategorized 25 January 2005 0 Comments

In an email to customers yesterday, US Airways CEO Bruce Lakefield said that they have completed their restructuring plan and seek to emerge from Chapter 11 bankruptcy by June.  Yes, you read the correctly.  Two days ago, the airline was not going to survive, now they say they’ll be un-bankrupt in 5 months.  Sounds kinda fishy, no?  With immense competition from Southwest at Philly and Pittsburgh, they face an incredibly daunting task.  Moreover, they achieved their goals by asking their employees to take significant paycuts.  Are these paycuts now permanent?  Are the changes in workrules now permanent?  Will they expect no strong competitive response?  Considering how long it has taken United to get their act together, I would be shocked if US Airways emerges in June and stays viable for long.

British Airways to Overhaul Service Fees

British Airways, Uncategorized 25 January 2005 0 Comments

British Airways is implementing a wholesale pricing model in the UK, which is probably a piece of news you don’t care about.  But I’ll tell you why you should care about it.  The new model means that they will no longer pay travel agent commissions (not a huge surprise), but they will instead offer a so-called "net fare," where a base fare is offered and a service fee is tacked on depending on where you purchase it.  For example, BA will charge $28 for a long-haul booking made over the phone (ouch!). 

Why should you care?  Well, BA is rumored to be looking at adding a small service fee for bookings made on its website—this way, it will charge a fare for the flight and try to recover the cost of distribution.  I would not be surprised AT ALL if US airlines implement this type of fee this year.  Since airlines complain constantly about distribution costs, I am certain they will take the opportunity to pass these costs on to consumers; hell, the online agencies have been doing it for years with little-to-no complaint from consumers.

While You Were Out…

Uncategorized 24 January 2005 0 Comments

I’m back from vacation, and I can now say that 80 degrees with occasional rain is much better than 18" of snow and 9 degrees. I see why people move to warm places.

Though I’m not particularly happy about it, I’m back home which means dragging myself out of bed to write this thing (I’ll be more optimistic tomorrow, I promise).

Since I know that you don’t read any media besides this site, i thought I’d catch you up on the news we missed while I was gone:

–A miserable week (again) for airline earnings, as Delta posted an exceptionally awful $2.2 billion loss for the quarter.  They do have a bunch of cash, though, so don’t take that as a sign Delta is going anywhere.  Do take it as a sign, though, that the fare restructuring will not help in the short-term.  Continental and America West also had disappointing quarters (to say the least).  America West, who had announced transcon routes with quite a bit of fanfare about 18 months ago, said they were stopping most of those routes.  Analysts at the time wondered why the carrier was getting into that crowded market. Those analysts were correct in asking that question.

–US Airways will likely not have to liquidate in the next couple of months, as its final union group (machinists) ratified cuts, giving the airline some breathing room.  Paycut estimates for the machinists range from 12-20%.  US Airways CEO said that the airline now has a "strong tailwind" to help them get through bankruptcy.  Like other tailwinds, something stinks about asking your employees to take barely livable wages to save a dying business.

–United also received some good news as its CEO said the airline will be out of bankruptcy by fall.  If oil prices stay at $50 a barrel or so, we’ll see if this date really holds.

–Also on the positive side, Independence Air bought itself some time, announcing that two hedge funds have purchased 12% of the company.

–And finally, Airbus rolled out its long-awaited A380 aircraft (if you cared about this, you’ve seen the photos already).  Emirates says it wants a stretch version of the already-gigantic aircraft so it can place another 150 seats.  I’ve already told my wife that when this thing launches, I’m on the first flight to Dubai…

…glad to be back, and we’ll have some fresh(ish) news tomorrow.

Boeing to Shut Down 717 Production

Uncategorized 14 January 2005 0 Comments

The never-loved, much ignored Boeing 717 will shut down production in 2006, the company said.  The 717 is a relative of the old DC-9.  The plane, a 100-seater, never really found a niche despite rave reviews from customers.  Turkmenistan Airlines, one of the few 717 customers, had no comment.

Vacation Time

Uncategorized 14 January 2005 0 Comments

I’m going to be on vacation next week, so there’ll be no news from here.  Please come back on January 24th, when I’ll have lots of news to share.  Probably.

US Airways Offers Crazy Low Transcon Fares

Uncategorized 14 January 2005 0 Comments

US Airways, possibly emboldened by the slight reprieve they received yesterday when a judge allowed them to revise the terms of their government loan, has quietly lowered transcon fares to ridicuous levels.

Highlights include:

$498 ROUND TRIP in first class from NYC to San Diego.
$99 round trip from Miami to Las Vegas.
$99 round trip from Boston to Seattle.

American is pretty unhappy with that, which would explain the $139 round trip fares from San Diego to Pittsburgh and Charlotte.

Southwest and ATA Announce Codeshare

Southwest Airlines, Uncategorized 14 January 2005 0 Comments

Southwest and ATA announced details of their codeshare yesterday, though it came with one piece of bad news.

First the good news:  Passengers can now connect on Southwest to the following cities: Boston Logan Airport, Denver International
Airport, Southwest Florida International Airport (serving Ft. Myers/Naples),
Honolulu International Airport, Minneapolis/St. Paul International Airport,
New York’s LaGuardia Airport, Newark Liberty International Airport, San
Francisco International Airport, Sarasota-Bradenton Airport, St.
Petersburg/Clearwater International Airport, and Ronald Reagan Washington
National Airport. 

If you’re too lazy to read that, flights to New York, Boston and Honolulu are the highlights.

Now the bad news:  Southwest passengers will be able to earn frequent flyer points on ATA-operated flights (wait, that was good news).  The bad news is that they will NOT be able to redeem Southwest Rapid Rewards points on ATA flights.  In short, no Honolulu for you.

British Tour Operators Lower Prices to South Asia

Uncategorized 14 January 2005 0 Comments

If you’ve ever wanted to go to Goa, India, or the Maldives, now may be the time to go (or not).  British tour operators are lowering prices significantly from England to South Asia.  A weeklong package to Goa including full board, hotel and air is going for GBP379 (about $800 or so).  Combine a flight from New York to London, and you can have a week’s vacation in India for about the price of a flight to India.  Not too shabby.  Parts of the Maldives, of course, were destroyed by the tsunami, but resorts that are still open could definitely use the business, and the country is asking that tourists return as soon as possible.

New Dehli Airport Porn Case Almost Solved

Uncategorized 13 January 2005 2 Comments

I can’t believe I forgot to write about this when it first happened, but there is scandal at New Dehli’s airport.  Last week, the airport television monitors did not play CNN Airport (or the Indian equivalent).  No they did not.  For half an hour last week, the airport was scandalized when pornographic films (aka, porn) were shown on monitors throughout the airport.  Authorities have been investigating the incident and now believe that a fight between rival cable operators is to blame.  You can read the link for the specifics of that disagreement, but suffice it to say the porn is gone.  If this story were made into an adult film, I would call it Nude Ellie International Airport.  Or something.