Posted by Seth on May 10, 2012 under Flying, Internet, News | 
American Airlines announced that they are moving forward with a retrofit of their long-haul fleet, updating the cabin interiors to improve the premium cabin experience. Mostly. The upgrades will expand the deployment of the new business class product, previously announced for the 777-300s which the company will begin receiving later this year. It will also mean the removal of the first class cabin on those aircraft, continuing a trend in both the global and the US markets to limit the long-haul premium cabin offerings to select markets with demonstrated demand. The retrofits are slated to begin in 2014.
The new business class seats will be retrofit into the carrier’s 777-200ER aircraft and into a portion of their 767-300ER aircraft. The 767-300s which are not reconfigured will be retired from the fleet.
The carrier has also indicated that their Main Cabin Extra configuration, offering an additional 4-6″ of legroom, will be part of the redesign on the 763s and 772s. On the 772s there will be 5 rows of these seats, 45 of the 215 total economy seats. On the 763s there will be only two rows of Main Cabin Extra, 14 of the 181 total economy seats. Customers holding elite status in the AAdvantage program, as well as with oneworld partners, will have access to the MCE seats.
The new cabin configuration will also include major upgrades to the in-flight entertainment systems and in-flight connectivity options. The IFE system for the 772s has impressive spec’s. It will have roughly 700 hours of audio and video available, up to 120 movies, 180 TV programs, 350 audio selections and 30 games. In business class the screens will be 15.4″ while economy will have quite generous 9″ screens. All seats on the 772s will have 110V outlets and USB plugs as well.
UPDATE: AA has confirmed that the regular main cabin seats will be 3-4-3 on both the 777-200 and 777-300ERs, and without any extra pitch. That’s going to be quite tight.
The satellite-based WiFi service will allow for global connectivity for customers. That said, no vendor has been chosen for the implementation yet so there is plenty of time for the company to see how the various options in the market shake out in the coming months, particularly as others add similar service, to pick the correct product for their fleet.
The 763 refits will not include the new IFE systems; the company will continue to rely on personal tablets for business class passengers on those aircraft for the IFE systems. The 763s will also not receive the WiFi connectivity. Combine that with the very limited MCE seating and those might just become the aircraft to avoid in the American long-haul fleet.
I’ve read through the release now a few times, looking for some hint of a magic paragraph previously missed which makes the planned upgrades tremendous. I still cannot find it. The release has many exciting phrases like “among the first in the industry” and “Business Class suite.” These plans, unfortunately, seem to be mostly playing catch-up to the rest of the industry. The “new” business class seats are based on the same product that US Airways just completed deployment of on their A330 fleet. The IFE upgrades are great, assuming you’re on the 77s; the 763s, not so much. And the seating density of the new seats raises a few red flags.
Type for type, United will offer more premium cabin seats (admittedly not all with direct aisle access) and more economy seats with increased legroom., along with a comparable IFE and connectivity scheme. And United is rolling out the seating and IFE config this year, not starting in 18 months. Delta is similarly ahead of American in the offering, both in terms of timing and product.
I have to give AA credit for trying to build a buzz about the announcements. The press conference included a number of bloggers and other social media folks, trying to tap in to the newer venues for sharing such announcements. And the bit I managed to catch on Twitter suggests that it has worked in come circles. Still, the implementation of these changes are 20 months off. It is going to be hard to keep the buzz alive that long.
There is no doubt that it is increasingly difficult to both offer a top-notch product and to do so in a manner that allows a company to remain competitive in the ever-changing market. In this case, however, it seems that American is barely even able to play catch-up, much less leap ahead. And if this is supposed to revitalize the company, inspiring creditors to ride out the bankruptcy and see a strong future for the carrier I’m very concerned about their strategy. The phrase “too little, too late” comes to mind.
For a different, and somewhat more positive, take on the new seats check out Gary’s post here; he was at the event where they were unveiled.
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Tags: American Airlines, bankruptcy, Delta, Flying, IFE, in flight, internet, OneWorld, PaxEx, United, United Airlines, upgrade, US Air
Posted by Seth on April 20, 2012 under News |
US Airways has filed an 8-K statement with the US Securities and Exchange Commission indicating that they have reached agreements with the three major unions of American Airlines regarding collective bargaining terms should a merger of the two carriers be consummated. Despite many reports in the media this is not an indication that a merger has happened or even that it is imminent, but it is a very significant step in securing buy-in from the employees should a merger move forward.
From a message from CEO Doug Parker to the US Airways employees:
First of all, today’s news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR’s creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.
…
Most importantly, in American’s standalone strategy, over 13,000 employees at American will lose their jobs. Our merger contemplates saving at least 6,200 of these positions. For the US Airways team, the agreements we have reached with the unions representing employees at American would also provide enhancements to the compensation and benefits currently in place here.
It is no surprise that the unions will jump at the chance to lose fewer jobs. It is somewhat surprising that they see the labor situation at US Airways as encouraging for the future of the company, particularly given the current state of the east/west divide that the company still has. But this is definitely an interesting development.
Next up, US Airways management has to convince the AMR creditors that the merger is in their best interests. The unions hold three of the nine seats on the creditor panel so this is a big step in that direction. More news as it develops…
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Posted by Seth on April 19, 2012 under News |
As part of their bankruptcy restructuring American Airlines will be closing four Admiral’s Club locations, the company has announced. The closings are happening reasonably quickly – one at the end of June and three at the end of July – and in three of the four locations there is not a partner lounge alternative on offer.
The lounge in Panama City, Panama will be closing at the end of June. With only four daily departures, all on 737-800s, apparently the necessary volume of premium customers to justify the cost of maintaining the facility wasn’t there. United Airlines and Copa jointly operate a lounge in Panama City still but that isn’t affiliated with American or its partners. No word yet on whether premium cabin passengers will be invited to use that lounge but it seems unlikely.
The July closings include the lounges at Dulles, Kansas City and Santo Domingo. Similar to Panama City, the flight frequencies do not appear to support the lounges. At Dulles there is still a British Airways Terraces Lounge so passengers can take advantage of those facilities. Santa Domingo has a lounge operated by oneworld partner Iberia which should be able to handle some overflow of customers, depending on operating hours. American currently operates the only lounge in Kansas City so there are no other options for passengers looking for such a facility.
On top of the announcement of the closing of a call center in Tucson this is not a particularly positive week for the AMR workforce.
Posted by Seth on April 12, 2012 under Flying, News |
At first blush it seems like quite a strange development. After all, why would United Airlines be hiring the regional carrier arm of American Airlines to handle operations at 8 airports across the south plus one in New York? Turns out it isn’t all that uncommon at all, and there is actually a good reason for it.
The airports in question are:
- Waco, TX
- College Station, TX
- Killeen/Fort Hood, TX
- Tyler, TX
- Monroe, LA
- Dallas Love Field, TX
- Del Rio, TX
- Beaumont/Port Arthur, TX
- Binghamton, NY
These happen to all be airports that United Express has recently been operating to with service provided by Colgan, a subsidiary of Pinnacle, the regional operator that declared bankruptcy recently and which is moving to terminate the contracts with United.
So United needs new service in those stations. The company has pulled some ERJ-135 aircraft out of storage and their ExpressJet arm is going to be operating those, but they also need folks on the ground to handle operations. And, much like outsourcing the flying, the company is also outsourcing that to another company that already has resources on the ground, namely American Eagle.
Turns out that such arrangements aren’t all that uncommon in the industry, especially in stations where there is limited service from any one carrier. That said, it does still seem a bit strange. I wonder if the American Eagle employees will learn SHARES faster/better than the legacy employees who are still struggling with it.
Hat tip to Darren @ Frequently Flying for noting the press release on this one.
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Posted by Seth on April 2, 2012 under News |
Pinnacle Airlines, one of the larger regional operators in the United States, filed for bankruptcy protection late on Sunday. The carrier operates under a contract basis for Delta Airlines and, to a lesser extent United Airlines and US Airways. The company outlined plans to continue normal operations for the immediate future, thanks in large part to an investment by Delta reported at $74MM of which $30MM is new capital with a 12.5% interest rate, as well as longer-term plans to cut some of the less profitable services offered.
Facing aggressive cuts by the mainline carriers they contract for, Pinnacle claims it can no longer meet its operational needs in the current financial climate:
The result has been a race to the bottom, as the debtors and other regional airlines have been forced to bid ever-lower rates and accept increasingly unfavorable contract terms to win the business of major carriers,
The company also claims that part of its struggle stems from the inconsistent income patterns realized due to its operational agreements with the mainline carriers:
The Debtors‘ monthly cash flows fluctuate significantly within any given month because of variances in the amount and timing of payments due to and from the Debtors under their operating agreements, including the Delta Connection Agreements.
Their current cash position – about $45MM – is apparently insufficient to see them through the next couple months without this restructuring.
Pinnacle has been in trouble for several months now and has been working since late 2011 to restructure its operations in an effort to remain in business. In the filing they cite an inability to negotiate concessions with ALPA as the catalyst for their inability to restructure deals with Delta and United outside the auspices of the bankruptcy process.
While the company plans to operate normally in the coming days, they also intend to make significant operational changes in the coming months regarding their contracts with carriers. With Delta, the filings indicate an extension of the CRJ-200 Agreement, suggesting that those aircraft will remain in service for Delta beyond the current 2017 expiry. At the same time, they claim that the CRJ-900 flying is unprofitable and that it must be curtailed or renegotiated. To that end, the CRJ-900 aircraft currently operating for Delta will be removed from service in the first half of 2013.
For United the company plans to cease operations of its Saab 340 and Bombardier Q-400 turbo-prop fleets by July and November 2012, respectively. The prop fleets operate under a fixed-fee capacity purchase agreement set to run through 2021 at a rate which Pinnacle says is unsustainable over the long term. The company claims losses in excess of $11MM in 2011 on their contracts with United, with no relief in sight, save for rejecting the contracts. United recognized the issues earlier this year and temporarily granted higher rates to the company for operations but that deal expired and said expiry was one of the reasons cited for the filing.
Some of the ERJ-135 aircraft previously operated by ExpressJet for Continental have made it back in to the schedule replacing the Saab 340s so at least some of the contingency plans are already in place. It remains to be seen what other operational changes will be made following this news.
Sadly, despite the date of the filing, this is not a joke. The overall impact of these changes remains to be seen, but it is clear that United will be searching for a new operator of services for a number of aircraft and routes in the immediate future. If you want more of the nitty gritty details check out the docket filings here. They’re great if you’re suffering insomnia.
Posted by Seth on February 18, 2012 under News |
This past week saw yet another airline cease operations and, bucking the trend, an airline announce plans to start up. Closing up shop was Air Australia, a Brisbane-based carrier. They simply ran out of cash and shut down. They’ve advised customers to seek refunds through the appropriate means. Launching in Europe is Volotea. The carrier will be headquartered in Barcelona and is being run by former Vueling executives who have actually secured about $65mm in funds to run the operation. They plan to base their fleet of Boeing 717s – mostly from bankrupt Mexicana – in Venice and "to forge new and efficient air connections between Europe’s small and mid-sized cities currently not well served by direct flights." Going after secondary markets is a risky move but they seem to think it has a chance.
And, let us not forget the announcement of PEOPLExpress starting up again, based in Newport News, Virginia.
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Posted by Seth on February 9, 2012 under News |
Getting made fun of in public? Just about everyone will tell you that the best approach to the situation is NOT to go after those mocking you, especially not when the parody is actually funny. Nonetheless, American Airlines has decided to go after one of their own, bringing a 24-year veteran flight attendant in for investigation thanks to said flight attendant, among other things, sharing some pretty funny parody videos.
Never mind that Gailen has been writing about travel experiences for years, including some pretty snarky bits in the past (but all in a good way, IMO). Nope. Now is the time to go after the folks who are doing their job and doing it well. After all, firing someone with 20+ years seniority is way more effective at cutting budgets than cutting someone more junior. And when you’re facing a 20% budget cut, well, the bigger numbers start to look attractive.
This whole thing stinks. Not classy at all, AA. Not at all.
Posted by Seth on February 6, 2012 under News |
The hits just keep on coming with airline bankruptcies this month. Following on the cessation of services from Spanair and Malev in the past several days a US-based carrier has filed for Chapter 11 protection this morning. The company is Global Aviation Holdings, Inc. and they are the largest operator of charter air service for the military, among other things. They also operate under the brand names World Airways and North American Airlines.
The filing comes as the company found itself with very little cash on hand when a customer withheld a $20MM payment. They are also faced with significantly declining demand for services as the US Government is reducing troop movements, meaning fewer charter operations. Combined with declining rates for services the company now sees itself with a glut of aircraft on lease. They intend to reject 16 of 30 active leases, returning those aircraft to the lessors as part of the reorganization.
The net impact of all these moves is pretty minimal on most folks but it does show yet another airline that managed to build an operation on unsustainable ideas and the effects of their failures.
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Posted by Seth on February 3, 2012 under frequent flyer, News |
Kingfisher was dealt a potential death blow yesterday when the airline was suspended from IATA’s ticketing clearinghouse due to reported non-payment. The clearinghouse is used by hundreds of airlines to process payments for interline tickets and other multi-carrier transactions. Roughly 80% of interline transactions worldwide are settled through the system so being suspended is a huge blow to the carrier.
The company claims the suspension was triggered automatically by the IATA systems when a technical glitch prevented their scheduled payment from reaching the clearinghouse:
As a result of a recent internal system failure, certain credits did not hit our ICH account in time, triggering an automatic suspension. Kingfisher would like to confirm that all its dues via ICH have been settled in full and it has absolutely no outstanding due as of date,
Despite claiming to be current it appears that IATA has not yet commented or reinstated the carrier to the systems.
Adding fuel to the fire is the announcement today that the planned February 10, 2012 ascension of Kingfisher into oneworld is being delayed, with no revised date yet announced. FlightGlobal is carrying the story, with quotes from both oneworld and Kingfisher executives on this latest development. Said oneworld CEO Bruce Ashby:
These are turbulent times for the airline industry in India and many other parts of the world. We have been working closely with Kingfisher Airlines over the past months and it has become increasingly clear recently that the airline needs more time to resolve the financial issues it is confronting before it can be welcomed into Oneworld. Will work with Kingfisher Airlines with the aim of setting a new joining date once it is through this current period of turbulence.
This delay is somewhat reminiscent of the frequent delays that Air India suffered in their attempts to join Star Alliance over the past few years. Those efforts were eventually scuttled after multiple delays.
Without access to interline booking revenue is seems unlikely that Kingfisher will be able to realize the revenue needed to pull themselves out of their financial morass. With many unpaid or severely delayed bills the future of the carrier is very much in question. It is not surprising that the alliance is not interested in bringing the carrier on board as their liabilities for interline travel could be significant.
This is a serious blow for oneworld, as another member carrier, Malev, ceased operations today, also under financial pressures they could not overcome.
Not a good day in the aviation world at all.
Hat tip to Flying With Fish for the head’s up on this one.
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Posted by Seth on February 3, 2012 under News |
Hungarian flag carrier Malev has ceased operations following demands from creditors that certain balances be paid immediately or in advance. The carrier has been struggling for many years; those debts finally caught up. The move grounds the airline’s fleet, stranding several thousand passengers and leaving the company’s ~2,600 employees with an uncertain future. The shutdown was apparently precipitated but ground handlers in Tel Aviv demanding payment up front for services. Similarly, a plane in Dublin was not permitted to depart, supposedly citing the company’s accumulated debt as the reason.
The airline is relatively small, but they do hold 27 routes out of Budapest where they are the sole carrier. While it is likely that other carriers will step in to pick up some of those routes such changes will take time and in the interim a number of passengers will be inconvenienced by the service termination.
The move is also a blow to global alliance oneworld, of which Malev is a member. The group is adding other carriers, including Air Berlin and Kingfisher, but those carriers are also struggling somewhat financially.
This cessation follows that of Spanair from last week. Truly a sad time in the skies over Europe.
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Posted by Seth on February 2, 2012 under News |
As part of yesterday’s announcement that American Airlines plans to lay off a whole bunch of employees they also issued new offer sheets to their main unions, stating their opening negotiating position for the collective bargaining contracts. The offer to flight attendants is open to the public for review and it makes for an interesting read. I’d be pretty upset as a flight attendant reading it over.
One of the most talked about bits I’ve seen is the termination of the international route pay scale. Those routes will still draw a minor additional pay bump ($1-3/hour) but not the fully separate pay scale like they do today. I can see this upsetting the FAs but I’m not so sure it is justified. The long-haul flights seem to be the better gigs, with less overall work and they’re easier to max out a monthly schedule without actually flying so many days. Those are real benefits of those trips; getting paid extra to work them seems way too favorable towards the FAs. But I can certainly see why they’re going to be upset with the change. The proposal also cuts the incremental pay that is normally accrued over 70 hours per month.
Beyond that, there are some significant changes to the work minimums that are more serious as I see it. In order to qualify for medical coverage and vacation accrual the flight attendants would be required to work 540 hours annually rather than the current 420. That’s a pretty big jump. It also increases the total minimum number of hours which must be worked annually to remain employed to 200.
The proposed rules would also significantly change the duty hours for flight attendants, making their work days longer, the number of potential hours per month higher and then guaranteed minimum time off between trips lower. Rather than being guaranteed five breaks of two days in a month they’ll get the same 10 days guaranteed, but only in one day increments. Again, all changes that are certainly going to upset the flight attendants.
The company also intends to change the staffing level assignment decisions and hotel choice policies. In both cases the policy will shift from "mutually acceptable" to company-mandated, with input from the union considered. Not a guarantee of downgrades here, but certainly there are some changes the company has in mind where there could be cuts.
Finally, the company plans to cut the pension plan, replacing it with a 401(k). They plan to cut healthcare for retirees over 65, replacing it with a Medicare supplement. The will cut life insurance for all retirees.
All these cuts and yet, when I review the term sheet, nothing in it actually seems all that unreasonable. Yes, the terms are worse than the current contract in many ways. Other than the profit sharing plan there actually isn’t really much in the way of improvements for the FAs in the offer. But it just doesn’t seem that unreasonable to me. Yeah, I know that there are many more hours worked beyond the block time. I understand commuting to the crew base. I get all of that. The numbers still just don’t seem that bad to me. Such is life, I suppose.
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