In other airline, hotel and travel industry news this week…
- Delta Air Lines will be laying off 200 employees, the majority of which from their headquarters in Atlanta. This combined with another 2,000 employees taking voluntary buyouts, the airline claims soft demand, fuel prices and reduced capacity make the workforce reductions necessary.
- Engineers at Qantas have proceeded with one-hour work stoppages causing 17 flights to be delayed or cancelled this past Monday. Brisbane was the first city where the mini-strikes were held, with Adelaide, Sydney and Melbourne planned to follow. I didn’t, however, read of any other cancellations or delays for the rest of the week. As they should, the carrier is refusing to pay engineers overtime pay for the planned hour work stoppage. Come on unions… stop being so childish.
- The first Boeing 747-8 in Lufthansa colors rolled out of the Boeing paint shop. She’s a sexy bird in my opinion and I’ll look forward to booking a trip on it as the 747 is still my favorite airplane. Lufty ordered a total of 20 of the now longest passenger jet in the world and will begin taking delivery of them next spring.
- The first Disney property opened in Hawaii last week on the western side of Oahu about 25 miles from resort heavy Waikiki. Obviously catering to families, the price point for the Aulani resort is pretty steep with the lowest rates in October being $549 per night for a single as compared to the nearby JW Marriott Ihilani resort of $269 to $459 per night. The first ever teen-only spa at the property features frozen yogurt, Xbox Kinect fitness activites and even manicures and pedicures.
- While American Airlines and Sabre have extended their content agreement, the carrier filed a new complaint with the courts alleging the GDS “organized an unlawful group boycott against American.” The papers are heavily redacted, so there’s no publicly available detail into exactly what that supposed boycott entailed. No court date has been set for the original complaint that claims Sabre biased fares, blocked direct connect abilities and raised booking fees among other items.
- U.S. Homeland Security Secretary Janet Napolitano claims we’ll eventually be able to leave our shoes on here in America when passing through security. Many news outlets jumped on the story and I’m afraid some of them made it sound like it would be happening very soon. The original plan was to have a shoe scanner system in airports by 2015, but no decision has been made as to whether or not they’ll proceed with that technology.
- The U.S. Transportation Security Adminisration will be continuing full speed ahead with the Federal Air Marshal (FAM) and federal flight deck officer programs (FFDO). While no actual threats have been averted due to the programs, the TSA claims both are “success stories” and part of the “nation’s multi-layered approach to transportation security.” I’m all for the volunteer pilots who carry weapons, but think it should be extended to international flights. Restrictions by foreign countries prohibit the practice.
- US Airways is in talks with Airbus to see if the A321neo (new engine option) could be modified to become the replacement for the carrier’s aging 757 fleet. Currently, the A321 doesn’t have the range, power and fuel capacity for some of the carrier’s longest haul markets such as Phoenix-Honolulu, Charlotte-Dublin and Philadephia-Lisbon.
As widely reported, American Airlines announced an industry record aircraft order yesterday for 460 jets spread across Boeing and Airbus. American’s tweets came alive in the morning and I clicked through one and watched part of the live stream from a Dallas Admirals Club where American’s Chairman & CEO Gerard Arpey made the formal announcement with Airbus & Boeing executives flanking his sides. The carrier will introduce Airbus A319 and A321 aircraft beginning in 2013 along with adding additional next generation Boeing 737s to their fleet. In addition to eliminating MD80s, the eventual retirement of American’s 757s and 767-200s was also mentioned, and for a more descriptive breakdown of the order, check out AAdvantageGeek’s posting today.
Also yesterday, American announced a $286 million loss for the second quarter of 2011, worse than analysts had anticipated and an unfavorable signal pointing to dismal full year results. According to an article by Terry Maxon appearing in the Los Angeles Times on July 1st, airline analysts claim AMR Corporation “will lose more than $600 million in 2011 and more than $100 million next year.” This while Delta and United are predicted to post profits of $1.2 & $1.3 billion respectively this year, with both carriers likely earning $1.7 billion in 2012. How long can American continue to hemorrhage money like this? No wonder they were first at bat in the attempt to shake up the distribution model whose annual expense for an airline is near the top after direct operating costs.
Next up, the Irish Times reported yesterday that American is planning to close its Dublin Ireland reservations center where approximately 130 employees currently man the facility that has been around for the past 15 years. The carrier informed the Irish Communication Workers Union and is now in “a period of consultation to discuss a proposal to outsource the work to an offshore location.” No disrespect, but I’m hoping offshore from Ireland means those jobs will come back to the U.S.
Finally, according to the British Union for the Abolition of Vivisection (BUAV), American Airlines has clarified its policy on transporting non-human primates (monkeys) to outright ban the acceptance of such animals intended for “laboratory research, experimentation or exploitation purposes.” Very welcome news and how sad to think that some airlines still accept monkeys for this purpose. Only one U.S. airline remains on BUAV’s list of carriers that “do or would” fly primates destined for the research industry. Eh hem… paging Continental Airlines. I will follow up this post with a direct inquiry to United to see if they’re even aware Continental is on the list.
Yesterday, The Cranky Flier and Henry Harteveldt tweeted updates throughout the day from a US Airways Media Day event in Phoenix. One of the larger announcements was that the carrier will be investing $35 million to upgrade their largest Express jets (Embraer 170/175s & Bombardier CRJ-700/900s) to include first class.
Whereas the other major carriers in the U.S. already had, or have just recently added first class to most of their regional aircraft, US Airways is claiming their move now is driven by the desire to sell upgrades at the gate versus needing to maintain a competitive product with other carriers. Still, though, this should be welcome news to the elite ranks, and gives US Airways a bit more credibility in my book. Their recent upgrade to long-haul aircraft also makes the carrier an attractive option for premium traffic.
Separately, the carrier reported yesterday that they are adding jobs in at least one domestic call center, and all sales & customer service calls originating in the U.S. will be handled by one of their three centers in Winston-Salem, Reno, and Phoenix. Without saying they’re bringing ALL call center functions back to the U.S., it is at least welcome news that when you need to call to make or change a reservation, you’ll get someone here in the United States.
Finally, US Airways has asked Airbus to look into offering Extended Operation (ETOPS) capabilities for the Airbus A321neo (new engine option). The carrier currently operates 51 of the standard-engined A321, and seeks interest in operating the aircraft on transatlantic flights, as well as to Hawaii. Derek Kerr, US Airways CEO, said they’ve been looking for 757s, but “there’s not a lot out there” as FedEx has “gobbled them up.” US Airways, however, does have a vested interest with Airbus since Stephen Wolf’s realm as CEO in the 1990s, and it might make more sense from a maintenance and fleet consistency perspective to pursue ETOPS with Airbus.