Archive for April, 2008
April 15 2008
I’m not going to write much about the Delta - Northwest merger because you’ll find plenty about it elsewhere, but there are 2 points I’d like to make:
- This is not a done deal. There will be significant pilot opposition to this, and that should not be discounted.
- In theory - theory - I can understand doing this if you shut down a hub or two (Memphis comes to mind) and laid off a bunch of people, cutting a bunch of cost out of the system. Perhaps, then, I’d understand how they’ll generate some cost savings. But that’s not the message. In an email, Northwest says that they won’t be eliminating any hubs or any service to small towns. Now, I’m guessing that is one giant load of poop, as how could you possibly save two struggling carriers by simply jamming everything they have together. That doesn’t really make any sense (as if the airline industry is run by sense).
I have the feeling that I’m missing something, but if neither one of these airlines could be successful longterm on their own in an extremely difficult environment, how would focusing on merging these airlines together (instead of the actual airline operation) improve matters? And when United and Continental get together (as rumored) - look out. As I’ve mentioned before, this will be an operational mess the likes of which we’ve never seen. I’m an optimist about this industry, and I cannot conceive how how this can all work out.
I’m done.
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April 14 2008
(Thanks to longtime reader IAHPHX for the heads up on this):
AirTran’s stock collapsed by about 1/3 on Friday after Frontier announced its bankruptcy and caused unfounded speculation that AirTran would face a cash crunch. As IAHPHX points out, AirTran actually has one of the strongest financial positions of any carrier, and the airline put out a press release basically saying that. Shares rebounded in after hours trading, but it just goes to show how far reaching this mess has gotten - even the solid airlines are now getting hit.
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April 14 2008
You’ll read about this everywhere else, so I just wanted to make sure you saw that Delta and Northwest could announce a merger as soon as Tuesday. Blah blah blah pilots seniority, blah blah blah consolidation, blah blah blah crazy idea, blah blah blah two wrongs don’t make a multi-billion dollar right.
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April 14 2008
Silverjet Deathwatch Update: Silverjet is now in talks with Lufthansa to purchase the struggling business class airline. Lufthansa would theoretically be interested in Silverjet as a way to compete with BA’s Openskies, which will fly from cities in Europe to the US. I’m not sure why Lufthansa would be interested in purchasing Silverjet, but that’s what the article says. Lufthansa has done perfectly well by working with Privatair to offer a similar service. This will go nowhere.
Silverjet deathwatch odds of shutdown: 85%
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April 14 2008
A report in the Daily Mail says that British Airways will burn the roughly 5,000 pieces of luggage it has not been able to return to its owners. While BA denies this, the company sorting through the baggage says that incineration is definitely an option. BA says they will compensate anyone who does not receive their luggage. Because it’s now a pile of ash.
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April 14 2008
A South Florida entrepreneur is trying to launch an airline under the Eastern Air Lines name, but is facing a court fight from another guy who is also trying to do the same (who knew that the long-shuttered carrier’s name was so in demand). The interesting thing about Eastern is that it really doesn’t seem to hold the good-ol-days cache of TWA, Pan Am or Braniff. I think most people think of it as being in disarray or being stuck on an A300 crammed with screaming kids flying to Florida.
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April 11 2008
I already wrote one (very, very) long post this week, so I won’t again, but just know that with Frontier’s announced bankruptcy yesterday, I officially nominate this as the worst 10 days in the history of aviation (excluding accidents, of course). In case you’ve been elsewhere, here’s what’s happened:
– Aloha shutdown
– Skybus shutdown
– Champion shutdown
– ATA shutdown
– Frontier bankrupt
– Heathrow’s Terminal 5 opening disaster
– Southwest grounds more than 100 flights for safety checks.
– American strands 100,000 because of MD-80 groundings
– And worse, because of the incredibly irresponsible stories, the public is being led to believe that flying on an MD-80 is unsafe.
It’s been a busy week. Keep up the good work.
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April 10 2008
SilverJet, the struggling all-business class airline, is apparently up for sale. The company’s shares shot up 43% on word that the carrier is in talks to be acquired. I cannot agree more with the analyst who summed up the situation thusly: “If any prospective bidder does proper due diligence we see a strong probability that they will decide not to bid.” Ouch.
The largest hunk of b.s. in the story comes from a fund manager who just happens to manage SilverJet shares and notes, “It would be a shame if just as the company gets within a hair’s breadth of proving the model somebody came out and managed to get it at a low price…” Hair’s breadth? If they were a month from profitability, wouldn’t that be evident in the due diligence process? Wouldn’t people be jumping at the chance of picking up a profitable company for a song? And why would management be looking to sell the airline for nothing even though it’s ever-so-close to profitability? Shouldn’t shareholders be revolting?
All signs point toward this fact: If they don’t get bought, and that’s not looking likely, we will see a couple of hundred people stuck in Luton trying to get back to Dubai and New York.
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April 10 2008
Skybus founder John Weikle had threatened…er…let the world know that he was raising $3 million to launch a Skybus clone out of Charleston, West Virginia. Without getting into the reasons why that would be flushing $3 million down the ol’ toilet, you’ll be relieved to know that we will not see any stories about the airline shutting down: he has announced he’s returning the $1.9 million he’s raised and not launching at all.
The most amazing thing is that he was able to raise $1.9 million to launch a new airline. Which goes to show ya, um, something. I’m sure that goes to show you something.
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April 09 2008
Two dead passenger stories to share:
Several Canadians are accusing Air Canada of bumping a family member’s coffin (which held the aforementioned family member at the time) from a Montreal flight to make room to get additional luggage onto the plane. Air Canada denies the charge (though doesn’t explain what happened). The coffin was not given a $10 meal voucher until the next flight.
Family members of a man who died on a British Airways flight from Hong Kong to London last week are angry with the airline because BA managed to lose his luggage (though, thankfully, not the man) . Even worse, the missing luggage contains the man’s cellphone and address book, which the family needs to contact friends about the funeral.
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A Quick Word about the (now announced) Northwest - Delta Merger