In other airline industry news this week…
- United Airlines announced new daily nonstop service from Newark to Istanbul effective July 1, 2012. Initially the route will be flown with United’s current international 767-300ER aircraft with three classes of service, but beginning August 28, the airline will swap in a new configuration that features BusinessFirst, Economy Plus and standard economy. United is planning to convert the current domestic 767-300 fleet typically seen on the Hawaii routes into this new layout.
- Delta Air Lines completed the installation of Wi-Fi on all Delta Shuttle aircraft flying the New York-LaGuardia to Boston, Washington National and Chicago O’Hare flights. According to the carrier’s local Senior Vice President Gail Grimmett, “We are thrilled that Wi-Fi is now available to our Delta Shuttle customers as it’s a perfect complement to other Shuttle amenities including free morning coffee and newspapers.” The carrier expects to have internet service available on more than 800 aircraft by this summer.
- Sticking with Delta for the moment, they announced expanded codeshare agreements with both China Eastern and China Southern Airlines this week. The Civil Aviation Administration of China approved the link-up of codes and flight numbers and once implemented, codeshare service will be seen across 34 cities within the U.S. and China with China Eastern and 18 cities with China Southern.
- American Airlines issued another letter to its employees this week notifying them of the necessity to “re-gauge” their fleet in order to match supply with market demand, particularly from their hub in Chicago. Current contracts with the pilot’s union prevent the carrier from subbing larger regional jets into markets currently flown with larger mainline aircraft, causing an industry-losing position in unit revenue. The letter also states the airline will focus on premium international business traffic once it exits Chapter 11 protection, hoping to grow their share of the lucrative segment.
- US Airways filed a formal objection with the Securities and Exchange Commission on Wednesday claiming Philadelphia’s planned airport expansion would “harm its finances and business operations and force it to shift flights elsewhere.” The carrier controls 70% of the market flying to, through or from PHL, and as a result, the airline would take the brunt of the all but likely increases to airport rates and fees charged to fund the expansion. The city, meanwhile, claims the proposed new runway and terminal expansion are essential to sustain further growth.
- Survey results were released this week from Buyology and uSamp (who?) revealing the most desired brand in the United States. Sorry, Apple, top honors went to Southwest Airlines. Buyology CEO Gary Singer thinks Southwest did so well largely due to its no-fee ad campaign and because of what its service represents in the minds of passengers.
- Finally, and hopefully not an omen of things to come at United, Cathay Pacific continues to have issues a week after it converted from an in-house reservations system to GDS provider Amadeus. Passengers with award tickets are still unable to manage their bookings online and the carrier is working through additional “teething issues” (their words) with the system migration. With United’s upcoming switchover, let this be a reminder to passengers to be proactive and have as much detail about their itineraries as possible in print.
In other airline, hotel and travel industry news this week…
- Late last Friday US Airways filed a lawsuit against… its own pilots. Upset with what they’re calling an “illegal slowdown” by some East (read: US Airways) pilots, the carrier claims their West (read: America West) pilots are far more efficient in minimizing delays that impact on-time performance. Having taken weather and other non-pilot factors out of the equation, US Airways claims the percentage of flights arriving on schedule by East pilots has declined 11% since May. As it is, both geographic pilot groups have been at odds with each other since the merger of America West & US Airways over seniority issues. Still though, is a lawsuit against your own pilots the productive way to resolve the issue?
- Staying with US Airways news, one of the carrier’s former mechanics was sentenced to two years in prison and ordered to pay full restitution for stealing $586,000 worth of equipment, some of which he sold on eBay for approximately $350,000. Items included torque wrenches, headsets, airplane landing lights, seat belts and a large hydraulic jack. Sadly, he had a 30-year career with the carrier and an otherwise clean record. Claiming disgust with being demoted and having his pay and retirement cut, he sought to reclaim his losses through theft.
- The battles between American Airlines and Orbitz are ongoing, but both parties have entered into an agreement that will keep the carrier’s flights on the OTA “into 2012.” The court order that required American to restore flights on Orbitz dictated it be maintained that way until a new court order, or September 1, 2011. In likely cooperation with each other to avoid additional litigation, they appear to have agreed for a mutual extension for the time being.
- In coincidentally related news, Travelport (who has a 48% controlling stake in Orbitz) has extended a content deal with American Airlines ensuring the carrier’s full availability, fares and other content will continue beyond the current expiration in the Worldspan global distribution system (GDS). Travelport operates three GDSs, namely Apollo, Galileo and Worldspan, and the day after the Worldspan announcement, they confirmed full-content agreements for Apollo and Galileo would also be extended. The GDS world is often confusing to the regular traveler, and I intend to devote a future post into explaining the systems, their origin and current controversy in the industry. Oh, and separately, United Airlines Economy Plus seats can now be sold by agents booking through Travelport GDSs.
- Delta Air Lines began new nonstop service on the Los Angeles to Oakland route on Monday. Operated by SkyWest, Delta is hoping to capture some of the Southwest Airlines traffic in that market and offers five round-trips daily. American Airlines via their Eagle regional subsidiary will begin daily LAX-Aspen flights this ski season beginning December 15, 2011, continuing until April 2, 2012. Lastly, Etihad Airways, the flag carrier of Abu Dhabi (UAE), is looking to expand their Australian presence beyond Sydney & Melbourne to possibly include Perth and Adelaide in the future. My opinion… probably an add-on segment to existing flights.
- Finally, I was pleased to see many companies in the industry I follow post profits for this recent quarter and/or half-year. In addition to the major carriers (sans American), Allegiant Air posted a net income of $11.9 million for the second quarter and the carrier is all but certain to begin service to Hawaii in 2012. Hertz saw a $55 million profit in the same quarter compared to a $25 million loss in the same quarter of 2010. Hyatt Hotels citing strength in “select-service brands” (e.g., Hyatt Place and Summerfield Suites) posted a net income of $37 million. To finish, and perhaps to American Airlines’ digust, GDS provider Amadeus saw its six-month net income grow 12.2% to a whopping $377 million.
As I continue to develop my blog, I plan on creating a separate “ticker-style” page dedicated to airline, airport & travel industry news perhaps not deserving of a unique posting, but otherwise important to follow. In the meantime, here is another summary of such articles that caught my attention during the past few days:
- Economic growth near Oklahoma City brings new nonstop United Airlines service to the city from San Francisco beginning August 29, 2011. Operated by SkyWest airlines with a two-cabin Canadair CRJ-700 aircraft, OKC will see one daily nonstop with a morning departure Westbound, and an evening return to Oklahoma.
- Work stoppages planned by Qantas engineers at the carrier on Friday were called off on Thursday Australia time, for which the carrier reinstated more than 31 flights it had pre-canceled. It’s a temporary reprieve, though, as the engineers are planning work stoppages next Monday and Tuesday, but were concerned over the growing number of technical issues Qantas aircraft have been experiencing in the past 48-hours & the impact an hour-long strike would have to passengers Friday. Additional action by the pilot’s union is threatened for similar job security issues at the core of the engineer dispute.
- Korean Air is getting considerable flak for denying a passenger with stage 4 cancer from flying on a lengthy international flight, even though she had approval to fly from her doctors. No matter which side you tend to take in this story, there should be some kind of waiver or acknowledgment of risk to sign yourself to if you were in the same position. I don’t think an airline check-in agent should have any say in the case.
- Perhaps we uber frequent flyers no longer have to suffer through the same TV episode of “The Office” on flights where we don’t have anything else pre-loaded on our computers or iPhones. American Airlines is testing the delivery of movies & TV shows via Wi-Fi to our devices from an onboard library. I simply say fantastic! Price it right, American… price it right.
- Not unexpected, United Airlines officially terminated its agreement with global distribution system (GDS) Amadeus and their planned migration to the Altea product for reservations processing & airport departure control functions. The reason for breaking off the engagement is due to the merger with Continental Airlines & lack of ease in merging the two systems onto the new platform. A hefty, in my opinion, payment of $75 million was made to Amadeus to break the deal, and both sides seemed overly accepting of each other in their official statements, leading me to believe a future relationship isn’t out of the question.
Yesterday, I listened in to the Air Transport World/Amadeus webinar entitled “Navigating the Airport of Tomorrow,” with presentations by Norm Rose, President-Travel Tech Consulting, Inc., and Patricia Simillon, Head of Airline Operations Strategy for Amadeus. The hour-long webcast summarized the similarly titled report completed late last month & linked here.
The focus of the presentation offered a forward-looking view of how technology can enhance customer experience, provide revenue opportunities for airlines, airports & merchants, and increase overall efficiencies for everyone involved in the airport experience.
Specifically, discussion was aimed at how the evolution of our mobile devices (iPhones, iPads & other smart phones) is driving the need for real-time airport information and flight updates, as well as provide the airports & airlines improved customer-specific service. I offer a few of my notes below.
- Data was compiled from a JD Powers survey of about 3,000 global travelers noting specific “pain points” at airports today, with security wait times, flight disruptions (delays/cancellations) and baggage issues revealed as the top complaints.
- The disconnect between airline operations, baggage service & reservations systems causes inability to seamlessly manage disruptions. Need exists to fully connect stand-alone systems to offer immediate resolution via mobile technology and/or at a single kiosk.
- Airports have an opportunity to use NFC (Near Field Communication) chip technology to enhance airport shopping (e.g., specific coupons pushed directly to your phone for nearby airport shops).
- NFC technology can automate baggage check-in & tracking for those with RFID chips (Radio Frequency Identification). Qantas currently offers these chips free to elite members, and for purchase to other passengers.
- Disruption management was called out as the biggest area of opportunity for airlines to send real-time data with the ability for passengers to make changes, get flight updates, and even go as so far to offer compensation on the spot electronically.
- Real-time information should be personalized, location based (where you are inside the airport), and context aware (providing the correct info needed at the right time, at the right place).
- Airlines should invest more in selling ancillary products and services through mobile devices.
- Biometry could enhance passenger identification, and perhaps streamline future “trusted traveler” programs for security screening. Data would come from the NFC chip in your mobile device when scanned.
- Roaming airline agents could be armed with tablet devices to manage customer service issues while standing in line. Perhaps so far as to negate reaching an agent at the counter by updating passenger reservations electronically & pushing revised itinerary details & boarding passes to your phone.
- Current third-party apps that manage itineraries, airport information & flight status would need to evolve to incorporate this new all encompassing real-time functionality.
- When something goes wrong (delay, cancellation, weather, security wait times), the airline being flown takes the brunt of the blame by passengers, so the need to appropriately manage customer expectations is paramount.
- A more informed passenger with accurate real-time data will enhance the airport experience, as well as provide great efficiencies & revenue opportunities for airlines, airports and third-party vendors.
During the presentation, the video linked here was shown revealing what the experience might be like with the above enhancements. Privacy concerns were also mentioned throughout the presentation, specifically noting that push notifications and NFC capabilities would be on an opt-in basis determined by the traveler.
As far as immediate electronic compensation for service disruptions, I think the airlines might be less willing to offer this, given they currently enjoy breakage in unused paper vouchers that have to be mailed in or redeemed at the airport.
I personally would enjoy this future airport experience, and think it’s pretty realistic in the timeframe provided between today and 2015 to 2020. Technology is certainly driving the future of air travel, and I’ll definitely try out and review each new enhancement that eventually rolls out.