Posted by Seth on March 12, 2010 under News | 
Sun Country Airlines, a small carrier based in Minneapolis that focuses mostly on leisure routes, has announced their intentions to start transatlantic service this summer, connecting New York City to London’s Stansted airport once weekly. The service will depart from New YorkMinneapolis on Friday evenings with return flights scheduled on Sunday mornings. The aircraft will remain at Stansted overnight on Saturday.
The Stansted airport is only marginally truly a London airport. It is about 45 minutes and £18 away from Liverpool Station by express train. Still, it opens a fourth airport offering service to New York City back up to London residents and it offers some convenience for residents in the northern suburbs.
The Stansted – New York route was served previously by Eos airline, an all-business class carrier, and American Airlines. American fought Eos aggressively on price, and the upstart carrier eventually was forced into bankruptcy and a cessation of operations. Shortly thereafter American suspended service on the route noting that it was not profitable. The Dallas-based carrier has not yet indicated whether they intend to restart operations on the route given the new competition but it seems unlikely.
The service is expected to be operated on the carrier’s 737-800 aircraft making Sun Country the only operator of coach or mixed configuration 737s crossing the Atlantic at this time. The necessary ETOPS certification was accomplished in late 2009 so there are no limitations to offering the service at this point. Pricing and final schedule details have not been released and initial inquiries to the Sun Country press office have not yet been returned.
UPDATE (17 MAR 10): The service will be from Minneapolis with a technical stop in Gander on the Canadian coast, not via New York City. So very disappointing for me.
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Posted by Seth on January 5, 2010 under News |
Airline bankruptcies are never a good thing and it is certainly a terrible way to start the new year. But such a filing was made by Mesa Air Group this morning with the carrier seeking Chapter 11 bankruptcy protection.
Dan over at Things in the Sky has a pretty good review of the filing and potential impact it may have. Most notable is that the regional carrier seems to think that this will help them receive legal relief (or at least resolution) more quickly in cases they have pending against Delta and United Airlines regarding the larger carriers terminating regional services. But even if Mesa wins those lawsuits I’m not sure the cash is enough to help them deal with the large number of regional jets they’ve got lying around now with no customers.
The Mesa operation in Hawaii, go! Airlines, is excepted from the filing so that operation is running as normal right now. That seems strange but I’m sure there is a legal reason to do it that way.
Posted by Seth on September 25, 2009 under Uncategorized |
US Helicopter, the service that provides connections from Newark and JFK airports to two heliports in Manhattan, has suspended all service, both scheduled and charter. According to the release on their website it is a “standown” of service and they will be reorganizing their operations with an eye on restarting service in November.
We are temporarily halting all service as we regroup to add aircraft to our fleet and introduce new routes. This ‘standown’ of service applies to our scheduled flights as well as our charter service. We plan to return to the skies of New York – a bigger and better airline – by late November. For information on refunds for tickets you hold for future travel, please contact your credit card company for a credit or refund. We apologize for any inconvenience this may cause and we look forward to serving you again very soon with our 8 Minute Airport Shuttle.
While this certainly is unfortunate, it is also not all that surprising. The two times I used the service I was the only person on the helicopter. They recently offered a huge sale – $59 each way – in an effort to drum up some cash but it doesn’t look like it was enough. I hope they are flying again in December and that they have the deal on offer; I’ve got a trip planned and it would be fun to do it again if it is cheap. But at $159 each way the value just doesn’t seem to be there for me. And apparently not for enough other people either.
Posted by Seth on September 16, 2009 under Uncategorized |
Several weeks ago there was a big kerfuffle in the frequent flier world when some reporters started talking about airlines going bankrupt and the mileage programs disappearing. The carriers cited – big ones in the USA – were arguably at risk of going bankrupt, but there was essentially zero risk to the points. Why? Because another carrier would buy the program as one of the few valuable assets the bankrupt carrier had and they’d honor the accrued points in those programs. At least that’s the way it would happen most of the time.
Then there are the other, smaller carriers that go under, and the points simply vanish. Such is the case with Greece’s Olympic Airlines and their Icarus loyalty scheme. They’ve announced their liquidation, effective at the end of the month. And they’ve also made it clear that the Icarus program expires at that time, including all points.
Dear Members,
As you maybe aware, Olympic Airlines will enter into liquidation and a new privately owned Airline Olympic Air will be established.
Consequently, we would like to inform you that the accumulated miles of Icarus Program of Olympic Airlines must be redeemed for domestic and international flights until the September 30th of 2009*.
*All flights must have been completed until the 30th of September 2009
The ICARUS FREQUENT FLYER PROGRAM will be terminated on 30th of September 2009.
Taking the opportunity we would like to express our appreciation for your continuous support during all those years.
Sincerely,
Olympic Airlines
The good news? If you’ve got some Icarus points sitting around you have two weeks to fly on them. But come the end of September, the points – and any tickets redeemed via the points – are gone.
Ouch.
Posted by Seth on August 18, 2009 under Uncategorized |
For the past couple years now, as airlines have teetered on the brink of bankruptcy with more than a couple tipping over, the common refrain heard across the industry is that the US commercial aviation industry needs to lose one more big player to bankruptcy. There is simply too much capacity and that is artificially keeping fares low, preventing the airlines from making money. Over the past 16 months or so we’ve been hearing over and over again how airlines are going to be cutting 10% here and another 10% there. And they have been cutting to some extent. So where are the profits? And were are the cuts?
The first quarter on 2008 saw approximately 261 billion Available Seat Miles (ASMs) flown. In 2009 the first quarter saw only 237 billion ASMs flown in the United States. In that same window US Airways only flew 17 billion ASMs. Continental flew 26.3 billion in that time frame and Southwest flew 24.2 billion ASMs. So we’ve seen a drop in capacity the equivalent of losing a major carrier. And it still isn’t helping.
Load factors are up. Way up. Carriers are reporting loads as high as 90% lately where 75% used to be considered pretty full. So with all those seats full and fewer planes flying around – precisely the recipe that was called for with the shuttering of a carrier – why aren’t the airlines seeing profits? Why aren’t yields going up?
Apparently there is actually more needed than simply cutting capacity out of the industry. Or there was WAY too much capacity to begin with. Do we still need to lose another carrier? I suppose that might be the solution. That would bring the US air travel industry back to levels last seen in early 2002. And those were particularly dire days.
But I’m also starting to wonder if there isn’t something else going on. Are the pressures on fares from the younger carriers too great for the legacy carriers to endure? Would losing any one of the legacies to bankruptcy actually change that fact? Certainly a carrier won’t just disappear. Even if they go Chapter 7 and cease operations the (profitable) remnants will be picked up in a hurry and put back to work, so the total capacity loss isn’t going to happen.
I’d love for the airlines to come up with some way to be profitable, but it seems that the common wisdom thus far actually isn’t playing out the way they all said it would. Methinks it is time for a different solution to come to the front. Anyone have any bright ideas?
Stats above from http://www.bts.gov/xml/air_traffic/src/datadisp.xml and airline 10-Q filings.
Posted by Seth on June 23, 2009 under TSA |
Verified Identity Pass, the company behind the “CLEAR” security lanes program at many airports across the United States, has ceased operations effective as of 11pm Pacific time June 22. That was last night. Their security lanes – which used to be available at a few dozen airports – are closed effective immediately. Here’s the notification that they sent to their customers:
Dear xxxxx
At 11:00 p.m. PST today, Clear will cease operations. Clear’s parent company, Verified Identity Pass, Inc. has been unable to negotiate an agreement with its senior creditor to continue operations.
After today, Clear lanes will be unavailable.
Sincerely,
Clear Customer Support
Verified Identity Pass
600 Third Avenue
10th Floor
New York, NY 10016
Short and sweet as far as notifications go, though they only gave about 3 hours notice to their customers which pretty much sucks.
The company and the associated program had a rocky life. The TSA used to perform background checks on the folks applying for the cards, making it seem somewhat reasonable that they’d move to the front of the security lines. Then that went away and the customers still went to the front of the lines. At the same time, however, those customers were still subject to ridiculous TSA policies, like still needing to show a photo ID after using their CLEAR pass and its integrated biometric features to verify that they were the person who signed up for the program.
In the end, the program only really was helpful at a handful of airports and it cost way too much – over $100/year – to really make much sense for most people. Considering that elite customers with the airline frequent flyer programs often received similar benefits at many airports the target market wasn’t really there for them. And it got even smaller when the economy tanked and the number of folks traveling by air dropped significantly.
I’d like to pretend that I’m sad to see another small business fail but in this case I’m actually really quite ambivalent. Sure, it sucks that a bunch of people are out of work, but the program was silly. They provided very few real benefits and created a tiered system of access to public services. I’m not really a fan of that, particularly when the actual benefits were so minimal. Had it meant a reduced screening or other real benefit maybe there would have been value, but that just didn’t happen based on the idiocy of the TSA.
Posted by Seth on November 19, 2008 under Uncategorized |
Southwest seems to be the only domestic carrier having any fun these days. Between their new code-share agreements, expansion into Minneapolis and general profitability (though not so much last quarter), they appear to be avoiding the difficulties that other carriers have been experiencing of late. Yes, they are cutting capacity overall, but they seem to be doing so with much more surgical precision than other carriers who are leaving markets completely and otherwise flailing about.
And now, Southwest has gone and made a bid to serve NYC’s LaGuardia airport. They’re bidding on the 7 slot pairs that ATA still owns in their bankrupt state. They are pretty much the only asset ATA still has and they are a huge asset. Southwest wants them, and they have the resources to bid on them, so things look pretty positive for their chances. It is not a done deal yet – the bids still need to be reviewed and a decision made by the bankruptcy judge – but things look pretty good on that front.
Where will Southwest fly with their 7 flights/day? It is hard to know for certain, though Chicago-Midway seems likely as one destination. And there will certainly be struggles for Southwest to operate in the LaGuardia structure, with the frequent delays, troubles in bad weather and slot details all affecting their operations. But 7 flights is certainly enough to have a significant impact on the other carriers in NYC, and that is a good thing for passengers. It also means that I might have the opportunity to consider Southwest now for some flights, which would be a big change for me.
Posted by Seth on October 17, 2008 under Uncategorized |
The roller coaster ride of fuel prices over the past 18 months has wreaked havoc on the airline industry, with many carriers going bankrupt, ceasing operations or just losing lots and lots of money. But in the background there has always been Southwest Airlines, steadily plodding along and profitable for 70 consecutive quarters.
Well that came to an end at Q3 2008, but it is debatable as to whether they really did lose or not. See their operational results showed a profit of $69MM. But they had to take a $247MM charge against the books based on charges associated with fuel hedging. Yup, fuel hedging. That has been one of the major keys to Southwest’s success for most of recent memory. But they finally got burned on it this quarter, with prices taking a tumble to less than $80/bbl recently after spiking at over $140 in the middle of the year.
Southwest isn’t the only airline suffering from hedging charges. Continental reported charges of ~$70MM and United reported ~$500MM in charges for similar hedge bets this quarter. Of course, the reported losses are, in many cases, just on paper. Since the hedges are options contracts and they aren’t all executed in the quarter it isn’t like the airlines necessarily paid out that cash to someone rather than just having the potential future value of the contracts decrease. Still, the accounting rules are what they are and the numbers have to be reported as such.
So there you have it. Once the commodity prices actually start fluctuating wildly the pros start to struggle with predicting the future value and they can lose just as easily as they can win. Makes me feel a bit better about my investing skills when I see that the pros can mess up, too.
Posted by Seth on September 12, 2008 under Uncategorized |
Two more carriers shutting down to report for the past two weeks, both out of Britain. They are actually both more tour operators than traditional carriers so that may have something to do with their shutdowns. The two are XL Airways, which shut down this morning stranding 67,000 passengers in overseas destinations, and Zoom. Bad news for everyone involved in both cases.
Posted by Seth on August 1, 2008 under Uncategorized |
If you’re still listening to the folks over at US Airways, you’d actually believe that fares are expected to double in the next few months. Doug Parker, the CEO, suggested in comments about the carrier’s $567MM loss last quarter that airfares are going to increase to an average of $600-700 from the current $328 (Q1 ’08). Parker is also convinced that there is not a chance of a big 6 legacy airline going out of business:
We’re not going to have a cataclysmic liquidation of a big-six carrier, as some suggest. The industry will work it out, and there will still be six of us, but six smaller airlines.
I’m not exactly sure what he’s smoking, but I want some. If he really sees a chance for his company to pull out of their free-fall as they continue to cut service and routes then he’s definitely looking at a rosier version of the industry than I can find.
The over-capacity in the market will continue to shore up, but most carriers are basically making small cuts around the edges, hoping to survive just a bit longer than the others, and then to swoop in and actually start turning profits again. Put another way, you don’t have to swim faster than the shark, just faster than your dive buddy. I can’t help but see US Air as the slowpoke in the water, despite Doug’s comments. They’ve basically conceded the west coast market to other carriers and are working to defend their Philadelphia hub, which makes a bit of sense based on going for the higher fare markets, but also will hurt them since some folks in Philly do have other options, and many of them are starting to find those options.
Oh, and I do expect fares to stay relatively high – $350-400 isn’t all that ridiculous a price really, but I don’t expect them to be in the $600-700 range at all.
Posted by Seth on July 8, 2008 under Uncategorized |
ExpressJet has announced that they will stop all branded operations effective September 2, 2008. This affects the flights that they operate – mostly on the West coast – under the ExpressJet name. I call it a pseuo-bankruptcy because it has the same effect as all the other bankruptcies – the operations will cease – but the airline itself will actually still be in business, operating as Continental Express. The Continental operations account for 5x the number of planes that were involved in the branded operations (and some Delta Express flights which are also being canceled) so that should keep ExpressJet in business a bit longer, but the overall effect is that another option is disappearing.
The 50 seat regional jets are not particularly fuel efficient nor comfortable to sit in for several hours (I hit my head if I stand up straight in the aisle!) so it is not all that surprising that folks aren’t keen on flying them too much. Plus, the routes that XJet was running (Jacksonville, FL to Kansas City, for example) don’t drum up images of high revenue business travel to me. Sure, they are convenient for folks in those cities (including a cousin of mine), but they just don’t make sense in the bigger picture.
