Posted by Seth on April 5, 2008 under Uncategorized | 
I’m pretty sick of writing about airlines going bankrupt this week. It turns out that five carriers (ATA, Aloha, Champion, Skyway and Skybus) announced they were shutting down operations in the USA, one of which I’ve never heard of (Skyway) and at least three that did so without any official advance warning to their passengers or employees. It is relatively unprecedented, and the carnage may not be over yet. Alitalia is on the brink of collapse, and the other majors in the US are not all that safe. Delta is showing desperation with their efforts to give away elite (Medallion) status to anyone with a pulse at this point (free unsolicited status for no apparent reason for many SkyMiles members this year, self included, 2x MQMs for the next 3 months on all flights booked this month, 1K EQMs for some hotel stays, etc.). Amtrak has a double points promo in the hopper right now as well. And there are still no guarantees that any airline is going to be operating next year or even next month. I had a conversation today with a former ALPA union attorney today who swears that the deregulation of the airline industry was nothing but bad in the long term. I don’t know that I’m ready to agree with that (too many benefits from mistakes that otherwise wouldn’t have happened with regulation in place) but I see his point. The deregulation created an environment where a single party could show up and dictate price to the rest of the players in the market, and that isn’t particularly good for the carriers, though passengers theoretically benefited from the lower prices, at the expense now of the companies collapsing.
Anyways, like I said, I’m sick of writing about that stuff, so I thought I’d switch gears and write about a few meals from this week.
First on my list, a visit to a local place that we go to once every couple months, Maroon’s. The food is still fantastic – a great combination of Southern and Jamaican cuisines, but I’m not entirely sure we’re going to go back. The prices continue to go up, which I suppose is natural, but they’ve added an interesting line to the back of the menu that really bothers me, “A gratuity of 15% will be added to all bills.” I’ve seen similar notes at some restaurants in more touristy areas where the patrons might not be familiar with the tipping practices in the US. But even then it is usually a note that gratuity isn’t included or suggesting a tip. And it isn’t for large parties -that surcharge is 20% – it is for everyone. In this case the bill came with the gratuity noted on the bill and then the credit card slip had the “Included Gratuity” and a space for “Additional Gratuity.” Between that and the fact that the service barely deserved the forced 15%, I just don’t know that I’ll be heading back there, in spite of the good food.
The second meal was at Cafe S.F.A. on the 8th floor of Saks Fifth Avenue. I went to Saks to get a shave and a haircut at the John Allen’s salon on the 7th floor. I have to say that compared to my regular Russian guy the haircut was quite a bit better, and the overall experience probably justifies the additional cost. But I was disappointed to discover that they only do shaves on weekdays, so I missed out on that. Anyways, following the haircut I went up to lunch at S.F.A with a couple of friends who introduced me to the salon. I have to say that if there were ever a prototypical “ladies who lunch” vision from my imagination of what the rest of NYC lives like, this is it. The crowd was distinctively New York, with a few visitors interspersed. And the crew was definitely a shopping and lunching crowd. The food was OK, too. The Bloody Mary was a bit blah, my sandwich was colder than I thought it should be for a Cuban (then again, WTF was I doing ordering a Cuban there?!?!?) and the Asian beef salad had tortilla strips in it. But it wasn’t a bad option and the atmosphere was quite nice. If you can get a seat by the windows looking out on NYC (we didn’t) then it is definitely a great stop on a shopping tour of NYC.
The third meal was dinner at an old standby. I eat here every couple of weeks, and it is good to have a “regular” spot to be. Dinner was delicious as always, even if the regular bartender was still on vacation. Anyways, after a couple recent misses, the comfort food was nice to have again.
Hopefully I’ll have more good dining reviews in the coming weeks as I head out on the road a bit. Hopefully…
Posted by Seth on April 3, 2008 under Uncategorized |
The second US airline this week has halted operations, with ATA cancelling all service effective this morning. The airline will not be refunding any paid fares to any travellers, and the employees are not reporting to work, nor are they likely being paid for their most recent pay period. From the notice filed on the carrier’s website:
After filing for Chapter 11 on April 2, 2008 in the U.S. Bankruptcy Court in Indianapolis, IN, ATA Airlines has discontinued all operations and cancelled all current and future flights. Following the loss of a key contract for our military charter business, it became impossible for ATA to continue operations. Unfortunately, we were not in a position to provide our customers or others with advance notice.
We apologize for the disruption caused by the sudden shutdown of ATA and regret the impact on passengers, employees, suppliers, and other parties. ATA customers should seek alternative arrangements for current and future travel. A list of other airlines serving ATA’s destinations is available here.
ATA had already started scaling back operations, including pulling out of Chicago’s Midway and scaling down the rest of their operations around the country. But that was not enough.
One interesting comment I read on it earlier this morning was that since the reason they are shutting down is that they lost a military contract it must be the fault of Bush, since he isn’t flying enough flights to bring the troops home. Clearly a snipe, but pretty funny to me.
Also interesting from the political angle is that both Clinton and Obama have chartered ATA planes for their campaigns. No word yet on whether those are still operating. I am guessing that they will since they are still producing positive cash flow for the company. Then again, the history of his campaign flight hasn’t shown any activity in 10 days, and he’s been out on the road campaigning, so maybe someone tipped the candidates off to this early.
Anyways, a sad day for all the employees and passengers of the carrier. Considering that they were a pretty big carrier to Hawaii, this is especially terrible news for the islands, since they’re now down two options to the mainland.
And, if they aren’t careful, Alitalia could be right behind these two, with the government refusing to provide additional loans to the carrier unless they agree to the Air France buyout, and the unions objecting to the plans to cut employees and actually make their airline profitable. So look for a third carrier to be going under in the near future, unless there is a miracle in Rome.
Posted by Seth on March 25, 2008 under Uncategorized |
Somewhat as expected, the Alitalia buyout by Air France/KLM is struggling to move forward in the face of significant opposition from Italian politicians and labor unions. The presumptive incoming Prime Minister has called the deal on the table an “arrogant French offer” and the unions have been protesting plans to outsource maintenance and other ground services tasks. Some of the protests have turned ugly, resulting in police conflicts.
In other words, as predicted, the unions are going to scuttle the whole deal, even though it is probably the only way the carrier can survive. It remains to be seen how long the government will continue to lose 1MM euro daily on the carrier, but chances of another savior beyond the AF offer are pretty slim.
What happens when that fails is harder to figure out. Either AirOne comes up with a bid, which seems unlikely to me based on the fact that the bank says they haven’t been, or the government continues to fund the company as it falls apart. The government won’t be able to effect the turnaround that the company needs.
Posted by Seth on March 16, 2008 under Uncategorized |
While most of the merger mania in the airline industry has been focused recently on the Delta-Northwest discussions. But on the other side of the pond Alitalia has been the focus of some heated discussions as they try to dig themselves out of an incredibly deep hole. They’re currently losing over a million Euros a day, and the Italian government has been trying to sell them off for over a year now. Today Air France/KLM announced that they’ve reached an agreement to make the deal. The Alitalia name will be kept, but the airline will be scaled back significantly, including the shutdown of the Milan hub.
Of course, much like the other merger discussions this one will depend on the unions agree to the plans that AF/KLM have for the carrier, including the shuttering of Milan as a hub. That will include a lot of jobs lost as part of the restructuring, and the unions are unlikely to be happy with that. Only time will tell whether they can make it happen, but I can’t imagine that the Italian unions are going to be happy with the coming job losses.
