Posted by Seth on October 5, 2010 under Trip Reports | 
I’m a pretty big fan of visiting Panama. Each of my previous three visits to the country has been spectacular. Still, the 5 hour flight from New York City and the associated time and expense can make frequent visits a bit difficult. Imagine my joy when I was visiting a friend last week and found out that I would not only get to enjoy Washington, DC, but also Panama. Woohoo!
It turns out that there was an event that evening being hosted by the Panamanian Ambassador. I was not necessarily invited, per se, but my friend was and she added me on as a guest. So there I was, in the middle of a torrential rainstorm, visiting Central America in the middle of Washington, DC.
The event was even more entertaining for me because I was the only member of our group attending who had previously met the Panamanian Ambassador to the United States. It was a meeting of chance at the Continental/Copa Presidents Club in Panama City this past March. Some friends and I were on our way back home from a fantastic day of partying in Panama and Mexico City and we were preparing for the redeye flight with a few Soberanas at the bar. It was also the middle of March Madness and they had the Duke-Baylor game on TV. It turns out that Jaime Alemán Healey, the Ambassador, is a Duke alum and a pretty big fan. He was at the bar cheering and having a blast. There were the pesky issues that with only a couple minutes to play the game was still very close and his flight back up to Dulles was getting ready to depart, but a true fan would never let that get in the way. Suffice it to say that Duke won and he made his flight.
Fast forward seven months and I got to retell that story to him and some other guests in his home. That was entertaining, particularly as he nodded along, acknowledging his rather vocal support of the Blue Devils during the game. It was quite an enjoyable moment for me.
Moral of the story? Make friends with folks in Washington, DC who have access and go to Embassy parties. They’re a lot of fun and a great way to get a bit of access to the countries without having to travel all the way there.
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Posted by Seth on September 27, 2010 under frequent flyer, Internet, News |
Apparently the airline industry is bored when there isn’t enough merger activity going on. Southwest and AirTran have ramped that pace back up again, with the Dallas-based carrier announcing a planned $1.4 billion buyout of AirTran this morning. The carriers expect the deal to close in the first half of 2011 with operations merging in 2012.
So those are the facts, at least as much as are available now in the early stages of the news discovery. What are the big open questions out there regarding the merger?
WHY?
OK, so this is both a very easy and very complicated question. Southwest has struggled of late to enter new markets, in part because it is harder to find underserved destinations and in part because there are significant barriers to entry in major markets like Atlanta, New York City and Washington, DC. With this purchase the carrier picks up – at a relatively bargain price – significant slot portfolios in all three of those cities. The slots at Washington’s National and New York’s LaGuardia airports are particularly valuable to Southwest.
Somewhat strangely, the Associated Press is reporting the move as an effort by Southwest as seeking “entry into a number of smaller markets.” That makes very little sense. Not only does Southwest already serve many small markets, including most that AirTran serves, but the value is in the larger markets. Southwest fought strongly to defeat the proposed US Airways – Delta slot swap at LGA/DCA in an effort to gain access to slots at those airports. When that failed they simply bought the slots they wanted.
The Atlanta market is nothing to sneeze at, either. While Delta has successfully fought off small entries on a few occasions (e.g. JetBlue’s efforts a few years back), AirTran has established themselves quite solidly in the market there. This move opens up that entire market to Southwest in one quick move.
International?
Southwest has historically only flown domestic routes. They’ve talked about code-sharing to gain international service but those deals have been delayed or canceled recently. This move gives them established service in Mexico and the Caribbean. CEO Gary Kelly stated in the analyst call that the carrier is committed to going international as part of this move. The destinations that AirTran serves should meld nicely with the Southwest operations so that decision isn’t such a surprise.
Fleet commonality?
Southwest is been a Boeing 737 customer and solely operated that type for a long, long time. AirTran operates a fleet of 737s and 717s. There was previously some discussion on retiring the 717s as they start to age – some are 10ish now – and it would seem that the new carrier could simply retire the type completely and keep most of their operations intact based on sharing in the Southwest 737 fleet base. The official statement today says that they will be keeping the 717s in the fleet but it would not be too surprising to see that stance change in the coming years.
In-flight products?
AirTran offers a first class product. They also offer in-flight entertainment. They offer food for purchase. Southwest offers none of those things. Both carriers offer in-flight internet connectivity, with AirTran having deployed the gogo product from Aircell fleet-wide. Southwest is in the early stages of rolling out Row44’s satellite-based system fleet-wide.
There are a lot of things that will need to be reconciled on that front. I expect that the gogo-equipped planes will convert to Row44 eventually. Once the 717s are retired there are not all that many 737s to add on to the Row44 deployment and Southwest holds quite a bit of pricing power on that front since they are the sole commercial customer for the product today.
On the seating front I expect that the first class sections will be removed from AirTran’s planes. Perhaps they will pursue a hybrid option comparable to JetBlue’s Even More Legroom product but that seems unlikely, particularly as Southwest seems quite satisfied with their open seating policy and their “fewer fees” marketing mantra, even if that isn’t completely true in terms of actual operations. Still, there doesn’t seem to be a sufficient demand in the business model to keep the first class seats around so those will disappear.
Loyalty Programs?
The loyalty programs of the two carriers are rather different and Southwest is long rumored to be working on a revised Rapid Rewards program expected to launch eventually. It seems highly unlikely that AirTran’s A+ Rewards will trump the Rapid Rewards program as part of this merger. Even with the uncertainty surrounding the timeframe for the revised Rapid Rewards, the program is bigger and more established than A+ Rewards.
Fares?
The quotes from Southwest are touting the “Southwest effect” and their intentions to bring lower fares to more customers. Unfortunately, that plan does not seem to mesh with the reality of the merger. AirTran already generally offers downward pricing pressure in markets which suggests that there is not necessarily a lot of room for fares to move with Southwest taking over. Connecting the two networks will offer a bit of expansion in potential for low fares but it does not seem conclusive that fares will be cut for consumers.
Moreover, it ignores the effect on airports where Southwest becomes the dominant carrier and sees little competition. In such cities, including Oakland and Albany, fares actually have increased faster than the average across the country.
Finally, any loss of competition almost certainly will lead to increased fares for passengers. Supply & demand doesn’t work perfectly in the airline industry but it is pretty close at the macro scale in situations like this.
Conclusions?
Unlike the United Airlines – Continental merger which was billed as a combination of equals, this move is most definitely a buy-out of the smaller AirTran by Southwest. The main attractions – NYC, Washington and Atlanta markets as well as the international routes – are likely worth more to Southwest than the purchase price paid. The fact that they also pick up a few extra airplanes, too, probably doesn’t hurt the situation, but not really critical to the deal. Southwest is dictating terms and nearly everything associated with the combined carrier will be based on the Southwest side of the operation.
There are plenty of other little things that will play out in the coming months. But the near-term view suggests that Southwest is going to be growing and spreading their wings just a bit further.
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Tags: AirTran, Atlanta, Boeing, Continental, Delta, fees, frequent flyer, IFE, internet, JetBlue, merger, Mexico, New York, New York City, points, Southwest Airline, United, US Air, Washington DC
Posted by Seth on August 28, 2010 under News |
Mexicana, formerly Mexico’s largest international carrier, has announced that they will cease all operations as of today. The airline filed for bankruptcy protection just over three weeks ago and shortly thereafter ceased ticket sales in most markets. Given the lack of new revenue it was only a matter of time before the airline would be forced to shutter its operations. Earlier in the week the airline’s parent company was purchased by a group of investors for an undisclosed amount of money. At that time the Tenedora K group suggested that they planned to recapitalize the company and bring them out of bankruptcy. It is not clear how the cessation of operations will affect those plans.
The cessation will affect not just the Mexicana mainline and international operations but also those of the domestic services from MexicanaClick and MexicanaLink. Those carriers were not part of the previous bankruptcy filing. Still, the new owners have made it rather clear that they are not going to operate as before and that drastic measures will need to be taken for the carrier to recover. As noted in their announcement of the flight suspensions:
Among the factors that have contributed to this announcement are:
- Grupo Mexicana’s fragile financial situation, which has deteriorated further over the last four weeks due to the previous management’s decision to suspend ticket sales, forcing the company to continue operating in the interests of passengers without receiving any revenue.
- No substantial agreements were reached to give companies in the Group long-term viability.
- Lack of effectiveness in the insolvency (Concurso Mercantil) process intended to protect additional financial resources available to the company so it could to continue operating.
- Given the uncertainty of the situation, certain suppliers have begun demanding advanced payment of services that are essential to the airlines’ operations.
While the new consortium does still intend to resume operations at some point it is not at all clear what form those operations will take. At least the writing was on the wall long enough that hopefully there aren’t too many folks stranded by this move.
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Posted by Seth on August 4, 2010 under News |
After filing for bankruptcy protection yesterday in both Mexico and the United States, Mexicana, the oldest airline in North America, has ceased ticket sales in most markets. This cessation occurred at 7pm EDT today, August 4, 2010. The company insists that it will continue to operate flights for passengers who have already booked seats but that seems increasingly unlikely as the ability to generate further revenue to fund operations has been terminated.
The bankruptcy filing yesterday was half of a double-whammy of pain that the airline recently incurred, The US government also downgraded the ratings of the entire aviation operation in Mexico, effectively terminating all code-share flights for Mexican airlines. This move drastically reduced the number of passengers and the revenue flow on trans-border flights.
The airline is seeking to rewrite pilot and cabin crew contracts, slashing them by huge amounts in an effort to compete with lower cost carriers at home and abroad. The unions were not particularly amenable to such cuts so the airline is now looking to rewrite the contracts while in bankruptcy.
The move could not come at a worse time for Mexicana’s global alliance partners in oneworld. The major players in the alliance, American Airlines and British Airways just received approval of their anti-trust immunity application, a move that was expected to significantly increase revenues for the two in the transatlantic market. Losing a major partner for Latin America will definitely hurt their alliance and revenues. Considering that American was one of the only carriers in the USA to post a loss last quarter, suffering a blow like this does not engender much confidence in the near-term financial outlook.
Posted by Seth on April 12, 2010 under News |
Certainly a single data point is not a sufficient sample to extrapolate meaningful data from. But combined with the comments from the CEOs of both Continental and United Airlines, the number I heard on my flight yesterday from Denver to Houston was quite surprising and a strong vote of confidence in the new partnership between the two carriers.
Of the 130 passengers on the United flight more than half were connecting on to Continental flights in Houston to international destinations, mostly to Mexico and Central America, but also to Paris and Frankfurt. That’s a tremendous feed between the two networks. Really too bad that the flight was delayed and most of them likely misconnected, in large part due to the pain of connecting between the two carriers at that airport.
Continental operates a bus service to get folks between the terminals without having to re-clear TSA screening, and that is a great benefit to the passengers, but the bus transfer time was 20+ minutes yesterday, and that was skipping a stop in an effort to help a guy trying to get to Paris and onward to Beirut make his virtually impossible connection. Oh, and the 20 minutes only accounts for getting between terminals A and B. Onward connections to terminals C, D and E, where most of Continental’s flights operate from, require switching to the TerminaLink train, adding more time to the transfer process. Construction is in progress on extending the train all the way to terminal A which will remove the bus part of the transfer, but it is still not a great connection to have to make. The extension is supposed to be completed later in 2010, though there are some rumors that extended testing will further delay its use by passengers.
The best solution to the problem is to simply move the United gates into terminal C where they’ll be amongst the Continental gates, similar to the recent move by Continental in Denver to be amongst the United gates. With the number of passengers moving between the two carriers, such alignments are too smart to be skipped. Of course, it hasn’t happened yet in Houston (several other cities have seen such moves) and there isn’t a publicly announced timeline for such a move, though June has been bandied about as a possibility. United only needs two or three gates and Continental seems to have the excess capacity so hopefully this change will be completed sooner than not. Plus it will mean access to Continental’s Presidents Club lounges for passengers on United flights.
Posted by Seth on March 30, 2010 under Trip Reports |
Carne de calle – street meat – is not an adventure that should be undertaken lightly. There are very real risks associated with it but there area also ways to mitigate those risks and make a pretty good guess as to potential exposure. Vendors that have a means to ensure the cleanliness of the plates they serve food on are a much safer bet, for example. In Mexico City most use disposable plastic sleeves over the plates. High volume is also a good sign as it means the food is fresher and spends less time sitting out waiting to be cooked or cooked and waiting to be served, the two times that food is likely to have the bacteria that will get you sick growing in it. Finally, I go for places that have a lot of locals there. Not a guarantee of food safety, but generally a pretty good vote on quality.
Enough of the lesson on spotting good street meat. Let’s get to the good stuff. On the trip to Mexico City six weeks ago I ended up going for the guy operating a small cart just in front of my hotel. But that was a Monday morning. This trip had us in town on a Sunday and a Holy Day at that. Not much of a chance of that working out (and I was right – he wasn’t there). Instead we ended up about a mile up Paseo de La Reforma, at one the main square near the Hidalgo Metro station. There were a few dozen folks set up cooking in the plaza giving us a wide variety of choices. Tacos or quesadillas? Pork or beef or chicken? Each vendor had their own specialty and picking one to eat at was no easy task. One vendor made sure to point out the options he had available – both pork and pig – while others simply called to us inviting us to sit down.
We finally settled on one of the vendors and ordered up sampler platters – three tacos of chorizo, pork and chicken. Add on a soda (the Coke is still made with real sugar in Mexico) and some chipotle salsa that they had out on the tables and we were in heaven, all for about 40 pesos (~$5) each.
Between inhaling the food and enjoying the local flavor we found ourselves in a discussion of just how much fun it is to find little dining places like that. We were surrounded mostly by locals out enjoying their day and fully absorbed in their bit of life. It was essentially full immersion, without anyone really minding that a couple of crazy tourists happended to be plopped in the middle of their life. Phenomenal.
We actually were going to hang out for a second round, this time at one of the quesadilla shops, but we were out of time and already late getting back to the hotel to gather our bags and head to the airport. Truly a shame, though it does give me something more to look forward to for the next trip.
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Posted by Seth on March 29, 2010 under Trip Reports |
Palm Sunday is apparently special in the Reforma district of Mexico City. Beyond the fact that it was a holy day and the scores of folks walking around town with their Jesus statues and palm fronds, it was also apparently fitness day. The road – one of the main thoroughfares in town – was closed to vehicular traffic. There was a running race on one part of it while the rest was open exclusively to bicycle and pedestrian traffic. The city government had booths set up along the road with free bicycle rentals and a number of other entrepreneurs had set up temporary shops selling gear and offering bike repairs.
In addition to the bikes on the road, there were a couple aerobics stands set up along the road. Open for public participation, they had music booming, instructors up on stage guiding the participants and hundreds of participants, some more into the experience than others. Ranging from young kids simply bouncing along to the beat to at least one guy who was perhaps having way too much fun improvising his own dance steps to the rest of the crowd simply doing their best to keep up, the aerobics setups were almost as big a hit as the cyclists.
And then there were the three of us. Fitness was not at all on our minds as we walked along the road trying to decide what to do for the ~2.5 hours we had on the ground before it was time to head back to the airport during our brief stay in Mexico City. Sure, we got some exercise during our walk, and we did consider waiting in line to get bikes, but we gave up on that due to the limited time available. Instead we undertook one of my favorite pastimes: dining on street meat. More on that to come…
Posted by Seth on February 16, 2010 under Trip Reports |
Four flights covering 7,400 miles is not really all that much for a weekend of travel. Nothing to sneer at, to be sure, but not a ton of miles covered. The fact that I’m earning 150% credit thanks to the booking class helps to justify the trip, as does the rather great sale fare that I got the tickets at. Plus, there is the fun of flying on Copa Air, a/k/a bizarro-world Continental.
Continental and Copa share a lot of similarities in their operations. That makes sense considering that Continental used to own a decent chunk of the Panamanian carrier. And even now that Continental has divested their ownership share Copa still seems to behave a lot like Continental. They share a frequent flyer program – OnePass – and the Copa flight attendant uniforms strongly represent the last generation of Continental’s, for example. And then there is the fact that their logos are significantly similar and that the two carriers operate with immunity from the United States to Panama and connections beyond. Looking around in the galley on one of the flights I noticed that a couple of the bins are labeled as Continental rather than Copa. Yeah, they are very tight.
But not everything is exactly the same. There are just enough differences to make flying on Copa a somewhat jarring experience. Sure, the upgrades still come through generally (I got all 4 this weekend) but Copa serves real meals on all their flights and serves booze from real bottles rather than minis. As it would be described in India, “Same same, but different.”
I was conscious for three of the four flights this weekend. The first – a 5:07am departure from New York City – I slept through entirely. The others, however, were rather pleasant experiences. We had printed menus on one of the three and the meals were consistent enough that I got to try one of everything that they are serving these days, I think. There were ice cream sundaes at the end of each meal, and that goes a long way towards making a flight a success. Of course, unlike Continental Copa doesn’t serve Grand Marnier on their flights. Instead they offer a “Rum of the Month” program in Classe Ejecutiva and I took full advantage of that. Sortof.
It turns out that this month the catering folks only put the good rum in the carts in the back of the plane. So the first two times I ordered the ron especial I was actually drinking Bacardi. I knew that it wasn’t that good but I just assumed I didn’t like the special rum. It was only on my last fight, flight from Panama City back to New York, that I was able to have the conversation with the flight attendant and understand what was being served and solve that problem. Thank goodness, as the special this month – Abuelo Añejo 12 year – was much, much, much better than the Bacardi. I’m no longer wondering why I have to use so much ginger ale to cut it to provide decent flavor, for example.
Beyond the rum there are a number of other nice things about the Copa experience. Full meals on all the flights, for example. It isn’t gourmet by any stretch but the food is pretty decent. I had steak, chicken and different chicken as my three meals and all were completely tolerable. Sure, there was a strange double salad first course on one of the flights but, well, it didn’t kill me.
Oh, and they serve ice cream sundaes on all the lunch and dinner flights. Yummy!
The food service was also much slower than I’m used to. On one of the flights it was 45 minutes before the flight attendant showed up to ask what we wanted and another 30 minutes before drinks showed up. Certainly not the end of the world, but less attentive than I would expect from most airlines in the forward cabin. There’s a decent enough explanation for the slow service. There is only one flight attendant working in the front cabin, expected to serve 14-16 passengers. It simply isn’t possible for that to play out well. But that’s the way they roll. Maybe they have to since they serve a full meal in coach to the 150+ folks back there and that needs the extra body but it does diminish the service up front a bit.
Beyond the food and booze the flights were a great opportunity to meet people. I was wearing my jetBlue shirt on the outbound flights and that was enough for the guy across the aisle on the JFK-Panama segment to start up a conversation. Turns out that he used to work for jetBlue and now works for Copa in their airport operations group. He commutes between Panama and New York most weekends. We had an interesting conversation about impending expansion of the terminal in Panama City, the needs of the terminal (showers in the Presidents Club!) and how incredibly convenient it is as a connection point heading to Central or South America.
I met Tony, a guy who works in the elevator business. We talked about our shared inability to speak Spanish, random visits to various Central American cities and how to better take advantage of the miles he’s been earning all these years. I truly hope he does better than he has with them because he has never redeemed any and, quite frankly, that is a shame. On the plus side, I think I’ve started the education process for him and explained some of the better options he has with all those points.
And then, sitting in the Presidents Club in Panama City, I saw a guy who was obviously from New York (the Duane Reade bags give it away) and who looked pretty familiar. I introduced myself and it turns out that we had met a while back at a FlyerTalk event. We chatted for a bit in the lounge and then ended up sitting next to each other on the flight back to New York. He was wrapping up a weekend in Buenos Aires and me from Mexico City. Similar stories and adventures though also completely different.
Such is the life of the frequent fliers.
Posted by Seth on February 16, 2010 under Trip Reports |
Given a total of 14 hours on the ground in Mexico City, of which the majority was during sleeping hours, there wasn’t a whole lot of opportunity for grand adventures or expeditions. Things got even worse when my phone lost data service on arrival and I couldn’t find the address of the hotel to tell the cab driver. A quick phone call back to a buddy in Los Angeles solved that problem (Thanks, Damien!) but I was still left with a few hours on a Monday morning that I had to fill. I wasn’t willing to just sit in the hotel room until I had to head back to the airport – what fun is that?!?! – so I set out on a very limited exploration of a very small part of Mexico City.
My hotel, the Wyndham Garden Inn, is in the Polanco neighborhood of Mexico City. About 30 minutes from the airport, the area is very accessible and also happens to be a reasonably nice neighborhood to wander about. Even putting aside the significant number of points I earned for the hotel stay I think that the property is a winner. Free internet that is a pretty decent connection, great towels (very soft) and a pretty good location make the property a winner to me.
I got some great tips from a friend in terms of what I should try to see and I managed to do pretty well overall, I think. I still need to get to El Moro, the churros shop that was recommended, but I did get to see El Angel de Independencia and a couple other sites while wandering around the neighborhood for the couple hours I had that morning. Plus, I’ll be back in six weeks and should be able to get that bit of fun in on that visit.
But on this visit I simply walked up one of the main streets of town for a bit and was exposed to an enjoyable snippet of the city. Plenty of folks out on the street and I watched their completely crazy means of dealing with traffic circles (they just go on whichever side gets them to the destination faster rather than in a circle!). Overall, it was a rather enjoyable way to spend a bit of time in the morning getting acclimated to town.
Plus, I had a ridiculously delicious breakfast on the street. As I walked past the guy on the way out for my rambles I had a very good feeling about the situation. He had several meats, each kept in a very neat pile on the griddle. Plus the whole rig looked to be very clean. Still, there was no one else out eating so I was a bit apprehensive. I got over that when I returned from my excursion and saw a couple others around the stall eating off of plates that were covered in a disposable wrap. So he runs a very clean shop. That’s a good sign.
My initial order – in my version of very broken Spanish and his much better English – was for carne y queso; steak and cheese. Served on a couple tortillas and then topped with onions, salsa and a squeeze of lime juice from the condiment bar that he had on the cart. Half way through consuming that delicious I managed to order a second round, this time with chorizo rather than carne. It also had a different cheese though I really couldn’t describe the difference with any reasonable accuracy.
The two tortillas overfilled with meat plus a soda were about 30 pesos. That’s just over two US dollars. The food was great and at the price there was really nothing better out there. At least not that I could figure out how to order anywhere. After all, I barely speak Spanish.
And then it was back to the airport and then onto the circuitous routing back to New York City. Having the same flight crew for the Mexico City – Panama City flight as the night before into Mexico was fun. So was meeting a guy in the lounge in Panama that I vaguely knew from a previous trip. But that’s all a different story.
Posted by Seth on June 5, 2008 under Uncategorized |
For most people a trip to Mexico means thinking about buying a new bathing suit or something else suitable for the beach life. For those headed into the cities where violence against the wealthy, the honest (cops) and drug dealers is incredibly high, there is now another option.
A Colombian designer of haute couture bullet-proof clothes has opened up shop in Mexico City, offering suits, overcoats and suede jackets, all of which can stop a bullet.
His racks are lined with bulletproof blazers, women’s suede jackets that’ll stop a .44 Magnum, T-shirts lined with body armor, and guayabera shirts for catching sun or bullets.
“In all the clothing that we have here, it’s 100 percent flexible,” Caballero says. “With the bulletproof vests of the police force, you can’t find that.”
…”We can make any type of bulletproof vest,” he says. “But the basis of the company is design, fashion, discretion. And what we are doing all the time — the discretion — we are working to develop the concept of fashion and, in this way, it’s very comfortable and flexible.”
Caballero boasts that his clients include the presidents of Colombia, Peru and Guatemala. There are rumors that his product has ended up under Venezuelan President Hugo Chavez’s trademark sweaters, but Caballero won’t confirm them. He’s made bulletproof clothes for Prince Felipe of Spain and his wife, Letizia. Once, Caballero says, he even created an armored kimono for actor Steven Seagal.
If that’s what life is all about in the cities, maybe I’m better off sticking to the beaches.
The event was even more entertaining for me because I was the only member of our group attending who had previously met the Panamanian Ambassador to the United States. It was a meeting of chance at the Continental/Copa Presidents Club in Panama City this past March. Some friends and I were on our way back home from a fantastic day of partying in Panama and Mexico City and we were preparing for the redeye flight with a few Soberanas at the bar. It was also the middle of March Madness and they had the Duke-Baylor game on TV. It turns out that Jaime Alemán Healey, the Ambassador, is a Duke alum and a pretty big fan. He was at the bar cheering and having a blast. There were the pesky issues that with only a couple minutes to play the game was still very close and his flight back up to Dulles was getting ready to depart, but a true fan would never let that get in the way. Suffice it to say that Duke won and he made his flight. 
