Archive for December, 2004
December 28 2004
The US Department of Transportation says it is looking into the mess caused by Comair’s computer glitch and US Airways’ sick-out that caused massive disruptions over the Christmas weekend. I have no idea what it means when the government says it will investigate the situation, but I’m pretty certain nothing will change because of it. I think we’ll end up chalking it up to bad timing (would we even be hearing about this if it occurred over the weekend of February 7th?)
In other bad news for US Airways, the Wall Street Journal (subscription req’d) notes that the airline is facing several important dates in January:
US Airways has
until Jan. 6 to get mechanics and ground workers to agree to new contract
concessions. If not, a bankruptcy judge can cut pay and benefits and write
new work rules. Other unions have already tentatively agreed to cuts with
the company. If mechanics and baggage handlers protest, travelers could
face delays, lost bags and canceled flights.
Eight days later, US Airways faces sizeable financial hurdles. It must
come up with another $100 million in new cash or cost cuts to satisfy terms
of a deal with General Electric Co. And the U.S.
government, which has been letting US Airways use cash held as collateral
for a government-guaranteed loan, could pull the plug on the loan on Jan.
14, although analysts consider that unlikely. If the labor situation is
ugly, however, the financial forbearance could end, and the airline could
be at risk of shutting down.
If I can get around to pulling together my list of top 10 predictions for ‘05, the disappearance of US Airways is at the top of that list.
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December 27 2004
I am incredibly saddened by the unspeakable devastation being faced today in Southeast Asia. My wife and I visited Sri Lanka last year, and we were struck by the resilience of the population—they had enjoyed their first year of peace after a 20-year civil war when we arrived. Tourists were just beginning to trickle back to the country, and the supporting infrastructure was just starting to be built (or re-built). This tragedy that occurred yesterday is a heartbreaking setback for a country that was just beginning to turn a corner towards a better life for its people.
I was especially annoyed by our local ABC affiliate’s decision last night to lead it’s local news with a story about the possibility of New York receiving 3 inches of snow. Then, "in other news…" they mentioned the 20something thousand people who died. 3 inches of snow trumps the deaths of 20,000 people. Well, I think it trumps the deaths of 20,000 brown people. White people would probably lead the news.
Anyway, for those who have travel plans to the region, keep in mind that not every area was affected equally. As this article notes, there is no reason to cancel trips to Bangkok or to beaches on the east coast of Thailand such at Pattaya or Ko Samui—these areas are unaffected. In fact, you may have these places all to yourself.
You can make donations to the relief effort at Redcross.org.
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December 27 2004
As you’ve probably already heard, US Airways and Delta’s commuter affiliate Comair had terrible holiday weekends, plagued with computer problems and labor woes.
US Airways’ misery began when baggage handlers called out sick in large numbers over the weekend, causing a huge backlog of misplaced bags. The carrier also had to cancel 29 flights yesterday and 300 in total over the weekend because of sick calls from baggage handlers and flight attendants. Unions for those employees said the sick calls were not an organized effort, but you can understand what happened when you find out that those employees just took a huge paycut and were asked to work more hours (the NY Times reports that a starting flight attendant now makes about $12,000…they’re probably better off getting a paper route at this point).
Comair saw its computer system crash, causing the airline essentially to shut down over the weekend. Flights resumed yesterday, but they won’t be fully operational until Wednesday.
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December 24 2004
Indepdence Air wants to go home again. USA Today has reported that Independence Air has submitted a bid to United to serve as a regional carrier for the bankrupt airline. If this sounds familiar, that’s because Independence Air used to be a regional carrier for United (which, if you’re reading this, you probably knew). I’m relatively certain that Fly-I, which left United over a disagreement about the fees it is paid as a feeder carrier, will end up with a similar to deal to the deal they turned down which precipitated the creation of Fly-I. In other words, the past 6 months, featuring cash hemorraging and half-empty planes, have been a terrible, terrible dream. Fly-I can only hope that United will take it back.
The NY Times noted today that Fly-I sold the only 4 planes it owns, making the United scenario that much more likely.
Merry Christmas.
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December 23 2004
I’m pretty sure that today is the 1st anniversary of Online Travel Review, so happy anniversary to me.
I’ll probably be taking the next few days off, so have a wonderful holiday and I’ll be back on the 27th with whatever news bubbles up during what will be an incredibly slow news week.
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December 22 2004
I probably should have mentioned this yesterday, but Barry Diller’s IAC is spinning off its travel businesses as a separate company, of which he will remain chairman. Diller said he made the move because his ability to do deals was hampered because travel companies didn’t think of IAC as a travel business and non-travel companies thought of IAC as a travel company. I think he split it to give shareholders greater visibility into the businesses and, just possibly, because he sees the slowing growth on the Expedia side of the house (due to better control of hotel prices by hotel companies and a better product from Orbitz & Travelocity).
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December 22 2004
No good news from United yesterday:
–United posted a $225 million loss for November (excluding one-time gains). The article has more detail, but none of it is good.
–An independent analysis of United’s business plan to emerge from bankruptcy found that even if the plan succeeded the airline may still ultimately fail. Not what you want to hear.
–And finally, the head of United’s machinists union said that the same plan is unfeasible, as it assumes the termination of union pension plans, a move that he said the unions would not make voluntarily.
In sum, a miserable day for an airline that is struggling more than everybody thought a couple of months ago.
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December 21 2004
We are now in the part of the year that in sports is called Garbage Time. Not much going on…
Which is why I thought you might want to know that Ghana International Airlines will replace the now defunct Ghana Airways. Ralph Atkin, who founded Skywest Airlines, has been tapped to head up the new venture, which expects to have 8-10 planes and launch in mid-2005.
Yes, that was the big airline news of the day.
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December 20 2004
In a move that will continue to blur the line between lowfare carriers and so-called full service carriers, American Airlines announced that they will discontinue food service on domestic flights, including flights to Hawaii. Passengers will be able to purchase an array of foods that used to be free. Keep in mind, flights to Hawaii from the east coast are about 11 hours. I actually don’t think it’s crazy to discontinue food service, but I’m very interested in how so-called full service carriers will position themselves going forward…"Fly us because we have higher, more restrictive fares, more expensive change fees, no food and no in-flight entertainment?"
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December 20 2004
I wanted to highlight the difference between how the US and the UK treat Cuba:
For US travelers, it is a felony to visit Cuba (well, not exactly—it’s a felony to spend money there. Travel is essentially banned because of that rule).
For UK travelers, Virgin Atlantic’s package tour group just announced honeymoon packages to Cuba, starting at $1400 or so. Says a company rep:
"With one of the flights departing on Sundays it is also ideal for honeymooners who are looking to getaway for a romantic break the day after the wedding."
Isn’t it odd that the UK, possibly our closest ally, is sending its honeymooners to the same place where it is a felony for those of us in the US to travel? Isn’t that a bit nuts?
In unrelated Virgin-related news, 49% Virgin-owned Virgin Nigeria will likely be barred from flying to the US because of an aviation fight the US is having with the UK. That may or may not make more sense if you read the linked article.
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US Air Faces Government Probe, Key Financial Dates