Posted by Seth on March 18, 2010 under News | 
Two of the worst airports in the country for tarmac delays are in the New York City area: Newark and JFK. And the carriers with the most operations out of those airports, Delta, American Airlines, jetBlue and Continental, have significant exposure to the impending DoT rule regarding 3-hour delays on the tarmac. The response of those carriers has been two pronged, one in the public and one to the government. The carriers are very publicly stating that they will be canceling more flights rather than risk the fines and they are also applying for exemptions from the rule at those airports.
The exemption applications started with Delta and jetBlue last week. American submitted a similar request a couple days later. And now, feeling a bit left out, Continental has now submitted an even broader request, claiming that all three NYC airports should be treated equally because the runway construction at JFK will have a cascading impact on the entire airspace, not just on JFK directly.
As ridiculous as I think the rule is, the way the airlines are responding is even more ridiculous. I fully expect that United Airlines will be applying for an exemption at Dulles US Airways at Philadelphia (they each more 3+ hour delays than Newark did last year) just to round out the party. I also don’t expect the DoT to grant the exemptions. If they do it will be an admission that the rule was never intended to actually be enforced in the first place.
Yes, flights will be cancelled. Yes, passengers will suffer for that. And there’s even a decent chance that a flight or two will actually cross the magical three hour limit and the carrier will suffer for it. But the cry-baby attitude that the airlines are displaying is pathetic.
No matter which way the DoT rules on these applications, the situation is a joke.
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Posted by Seth on March 2, 2010 under News, Trip Reports |
A few months back the news came out that the Department of Transportation would be issuing significant fines against airline operators when they had flights delayed more than three hours between the runway and the gate. The rule hasn’t actually done into effect yet – there are a couple weeks left until enforcement begins – but several airlines appear to be already running their operations in line with the new rules? The net effect of the change in the airlines’ behavior? Thousands of canceled flights across the country.
This should not come as much of a surprise to the traveling public but apparently it is. It seems that the airlines are choosing to cancel flights much more aggressively now when faced with a severe weather situation and they are doing so without any real obligations to their customers. It is not a good thing at all. But it is apparently what society thought they wanted so it is what we’re now faced with.
It is interesting to hear the spin that airlines are putting on their new policies. Take the line from Continental President and CEO Jeff Smisek about the company’s Operations Center policies:
During difficult weather our [Operations] team … works to pre-cancel flights in order to minimize inconvenience for our customers.… [The plan] not only allows Continental to minimize disruptions for passengers during irregular operations, it also permits us to return our operations to normal as quickly as possible after a weather event.
And there is no doubt that parts of this is actually true. It does appear that the airlines are able to get back to normal operations generally pretty quickly after a weather event, though it isn’t completely obvious that it is any better than before. There are, however, some parts that don’t seem to quite live up to the expectations being set. Things like the airlines simply canceling out all of their regional and express operations for a days at a time are not good for customers. When the ability to actually complete travel is frequently delayed two or more days from the weather event it is hard to see how that is minimizing disruptions for passengers. When airlines are unwilling to pay the cost of accommodating their customers on the airlines that are operating the situation becomes even more difficult, especially when the reasons given for the cancelations are less than wholly accurate.
And it isn’t just one or two airlines that take the wholesale cancelation approach. In the past month there have been a number of weather events in the Mid-Atlantic and Northeastern United States and many carriers have taken this approach to handling the situation. Southwest, Delta, jetBlue, United and US Airways have all done it at one more more airports for one or more days. That’s hundreds of thousands of passengers displaced because of thousands of flight cancelations.
But it could be worse. More troublesome than just canceling all the flights and telling everyone to go home is when a carrier cancels all their flights across the board and then starts putting a few back into operation. There are simply too many moving bits to keep track of to keep everyone informed. At Newark last Friday I watched as thousands of passengers, self included, were given the run-around while flights were reinstated, moved to new gates, delayed or canceled again and otherwise left with misinformation.
For my own flight a call from the lounge to the gate indicated that I was the only passenger who had not yet boarded the flight and that they were getting ready to depart without me. A quick sprint to the gate showed a much different reality. They were still trying to find a full crew to get on the plane and get us out of there. I’m not sure if the agent in the lounge just didn’t want to deal with me anymore, if the woman at the gate was less than truthful or if no one knew what was going on at all. But it truly sucked from a passenger perspective.
And I was one of the lucky ones. I actually made it on to my flight with only a 5.5 hour delay and with an upgrade. Two other friends in the airport had no reasonable choice other than to cancel their travel plans completely. Ditto for two other guys supposed to make the trip out to Las Vegas for the weekend with us. So what is good for the customer about these new policies?
There are plenty of problems in the airline industry today but this new approach doesn’t solve many of them, other than to avoid DoT fines. Thanks for looking out for the consumers there. Y’all screwed up on this one pretty good.
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Posted by Seth on February 17, 2010 under News |
The “Southwest Effect” is a rather entertaining part of air traffic lore. The name was coined long ago as Southwest Airlines would show up to provide service at an airport that generally had limited legacy carrier service. Prior to Southwest showing up the fares in that market would be high and then Southwest would bring lower fares in. The legacy carriers would similarly reduce their fares and the consumers won. It has happened many, many times over the years and the effect is pretty well documented.
Southwest announced yesterday that they are going to be launching service between Boston and Philadelphia, taking on US Airways as the only two carriers to offer non-stop service on that route. The fare changes since the initial announcement have been dramatic, to say the least. Dan Webb over at the Things in the Sky blog has some of the numbers behind the expected effect that this announcement will have. Yes, just looking at the walk-up fares available on the route ($550 one-way the week before Southwest shows up, $59 one-way the week after, a roughly 90% drop!) give light to some potential issues that US Airways can expect to see. But even more damning are the numbers available from the federal government.
The Bureau of Transportation Statistics collects and publishes a ton of data from air carriers. And it is all available on their website, assuming you can figure out how to generate the queries correctly. When you figure that out you get stats like these:
The important takeaway from these numbers is that, on average, US Airways brings in about $141,000 in revenue daily from passengers flying between Boston and Philly, at an average of $344.60 from each customer. This is only considering the O/D traffic between these two cities – there are plenty of connecting passengers, too – but that revenue number is very strong. With the introduction of the $59 fares it isn’t too hard to extrapolate out that the average fares are going to drop. A lot. Probably down near the $100/passenger numbers that Manchester and Providence are seeing today. Plus, Southwest is likely to pick up some of the load that US Air is getting right now, cutting the total number of passengers that US Air gets revenue from.
But even if the load numbers hold steady the drop in revenue will be a huge hit on US Air. At a $100/passenger average fare each way the annualized hit that US Airways will see in their revenue will approach $35MM. Yup, $35,000,000. That’s a lot of money to lose, especially for a carrier that hasn’t been particularly profitable lately.
There are some reasons to believe that US Airways is still going to do OK on the route. For one thing, they offer up to 15 flights on the route each day while Southwest is starting with only 5 daily trips. Customers are big fans of having choice in their travel schedules. But the five daily flights should offer sufficient options to put a dent in the US Airways numbers. And US Airways has a pretty strong collection of loyal frequent flyers in the Philadelphia area though it is not at all clear just how many of them are loyal only because they have no better option.
Is this a death knell for US Air? Hardly. They’re still pretty strong and they’ve got some options still in front of them. Of course, if they also end up backing out of the LaGuardia/Washington National slot swap as is being reported now, that will further hurt their pricing power in a number of markets. It is going to be a bumpy road for the foreseeable future.
Hat tip to Dan for the graphic with the numbers!
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Posted by Seth on February 10, 2010 under News |
The Mid-Atlantic US coast is suffering some of the worst snow in years today. The airline industry is experiencing the most cancelations on a single day in over 8 years – over 4,000 flights canceled today according to USA Today, and that doesn’t even include Southwest’s schedule. Needless to say that tens of thousands of customers are affected and the airlines are all responding to the storm. Of note, however, is that each airline is responding somewhat differently. Sure, they’ve all put out a press release essentially stating that customers can make changes “for free” to affected itineraries. But just how free are those changes?
It turns out that for most carriers the “free changes” are anything but. Getting a seat could cost hundreds of dollars and the airlines aren’t particularly cooperative or sympathetic in many cases. Even when the changes are truly free there are limits and caveats the customers face. Just how different are the policies? Here’s a quick summary.
At the most liberal end of the spectrum is New York City-based jetBlue. The carrier has implemented a no fee, no fare difference policy for affected customers. The main caveat is that all travel must be rebooked prior to the original scheduled departure time. But other than that the policy is quite friendly. Customers can book until until February 28 to reschedule their trips. Not too shabby.
American Airlines is up at the same level as jetBlue though they are somewhat more restrictive in rescheduling of the travel. AA is not charging any change fees or fare differences for changes so long as the rescheduled travel occurs by February 14.
Delta has matched AA’s policy. No change fees and no fare differences assuming the origin/destination are the same and travel is completed by February 14th.
Closely following these three in customer-friendly policy is United Airlines. United is permitting a waiver of change fees across the board and also of fare differences for travel rescheduled within 48 hours of the originally scheduled flight. For travel pushed farther than that any fare differences are borne by the customers. So a cheap advance-purchase ticket that is rebooked for a week from now may incur a significant charge to make the change as the cheaper fare buckets are unlikely to be available.
Three other major carriers – Continental, US Airways and Southwest – have implemented a no change fee policy (Southwest never charges one anyways). In each case, however, the airline is requiring that the same class of service be available for rebooking without charge. Lacking that availability customers must either pay the fare difference – potentially hundreds of dollars per ticket – or fly standby and hope to grab a seat. Neither is particularly appealing. The details of the policies for those carriers are spelled out here: Continental, US Airways, Southwest.
Are such variations in policies enough to drive your booking tendencies? And are they fair? After all, it isn’t the customer’s fault that mother nature decided to assault the mid-Atlantic this week, right?
Posted by Seth on January 21, 2010 under Trip Reports |
It has been a long couple weeks on the ground in New York City. Sure, I’m having plenty of fun but I’m also working a lot more than usual so getting back into the air is a great pleasure that I get to indulge in this weekend. And it really is a bit of indulgence – probably more fun than I should have in any given weekend.
First up today is the trek from New York to Seattle. I’m flying via Chicago to meet up with some friends who are based there. Plus it is my first opportunity to use my Continental Star Alliance Gold credentials while flying with United Airlines so that’s been fun to see how it plays out. Oh, and it means free drinks thanks to a large supply of coupons provided by one of the guys in the group. Today is two flights and gets me across the country but that’s just the beginning for the weekend.
After a couple days in Seattle we’re flying down to Houston on Continental. We’ll spend a day there doing some things with the carrier and then it is on to San Diego on Sunday. I’ll be flying on US Airways via Phoenix because of the significant cost savings. That’s five flights and three cities over four days.
The trip home will be equally entertaining. On Monday I fly San Diego – Los Angeles – Portland – Seattle – Newark on a combination of United, United Express and Continental. I get three new routes and a new aircraft type – the Embrear 120. Yeah, it is a tiny turboprop and I don’t expect it to be particularly wonderful in terms of the in-flight experience, but it does get me very, very close to closing out the entire Embrear product line in terms of aircraft flown. This is the second time I’m trying for the E120 and last time I was the victim of delays so I missed it. I’m hoping that I can get it more quickly than I did the upper deck of the 747; that was way too many tries.
On the plus side, the lounges have all been nice thus far. The Bloody Mary at the Presidents Club in LaGuardia this morning was perfect, as always. The Goose Island brew at the newly remodeled Red Carpet Club was excellent; I’m a fan of local beers in the lounges. And the drink certs on the flights have come in quite handy. The plane is now out of rum and gin; yeah, we’re having a great time here. More of the same is expected this weekend in air world. It is a great place to visit frequently.
Posted by Seth on December 23, 2009 under Flying, News |
The weather last weekend from Washington, DC to Boston was pretty miserable for folks looking to fly. I had a blast watching the almost foot of snow pile up on the back deck and then wandering through Manhattan the following morning but I know that the airports, airlines and passengers didn’t fare so well. Just how badly they fared, however, is interesting to look at.
In Washington, DC, both United and Delta cancelled all of their flights in and out for the duration of the storm. They didn’t have much choice as the airports were shut down for several hours. United got back up and running pretty quickly while Delta was a bit slower to get started. It makes sense as Dulles is a major hub for United. Plus, Delta did send in a few extra planes late on Sunday to help move passengers around.
In New York City there were also a large number of flights canceled. Delta, United, jetBlue and Continental all had to cancel a number of flights. jetBlue seemed to keep operating the longest, running flights into JFK well after the others had stopped on Saturday night. Yes, it was still snowing, but the airport had their ground operations crews working hard to make sure that the runways were safe and jetBlue had just a few extra planeloads of passengers that they didn’t end up stranding. Again, it is a hub operation so it makes sense that they were focused on keeping things operating as much as possible.
JFK is also a hub for Delta, however, and they didn’t come out of the snow too well there. They canceled the vast majority of their transcontinental flights out of JFK on Sunday (only 2/11 flew) while the other carriers operated about 80% of their transcon routes. Delta didn’t send one single plane from JFK to Florida on Sunday. After the snow had stopped. They should have had crew available since those folks didn’t fly on Saturday. Ditto for aircraft. Yet they didn’t. Why not?
The icing on the cake for Delta, of course, is that with all the cancelations and the increased load factors in play right now – a function of the holiday travel season and significant capacity cuts in the industry – they aren’t able to get passengers rebooked very easily. This came to a head yesterday when police were called to handle passengers delayed 3 days trying to get back to Haiti. When the folks think that Haiti is better than the service and facilities you’re providing you know there are some serious issues. At least Delta finally stepped up and added a special flight for today to get those folks home.
Continental seemed to come out of the mess relatively unscathed. Sure, they canceled a bunch of flights just like everyone else, but they didn’t seem to have too many crises come out of the efforts. And they were able to get up and running on Sunday morning with a pretty full schedule operating.
US Airways proved true to form from a customer service perspective. They were boarding and upgrading non-revenue passengers rather than paying customers. They told standby passengers that flights were full and then sent the flights out with empty seats. Bad form.
And lest anyone think the troubles were isolated to the United States, folks over in Europe didn’t fare much better. Combining two package tour companies going out of business in the past week and some storms there and things are not good. Brussels was closed for several hours as were the London airports. Fortunately British Airways had some spare wide-body aircraft around to help cover for the cancellations but things aren’t pretty there either.
With predictions of a White Christmas in NYC this year we could be looking at a repeat performance again this weekend. I’m glad to be flying out on Thursday evening before the fun really starts.
Posted by Seth on December 21, 2009 under Flying |
Secretary of Transportation Ray LaHood announced this morning that the Department of Transportation (DoT) has established a “Passenger Bill of Rights.” These new rules cover a number of things, from the amount of time – 3 hours – that passengers can be held on an airplane on the ground before the airline must permit them to deplane to ground service requirements and handling chronically delayed flights. Failure to comply will expose the airlines to a fine of $27,500 per passenger on board. The following is the meat of the DoT rule:
The final rule requires that each plan include, at a minimum, the following: (1) an assurance that, for domestic flights, the air carrier will not permit an aircraft to remain on the tarmac for more than three hours unless the pilot-in-command determines there is a safety-related or security-related impediment to deplaning passengers (e.g. weather, air traffic control, a directive from an appropriate government agency, etc.), or Air Traffic Control advises the pilot-in-command that returning to the gate or permitting passengers to disembark elsewhere would significantly disrupt airport operations; (2) for international flights that depart from or arrive at a U.S. airport, an assurance that the air carrier will not permit an aircraft to remain on the tarmac for more than a set number of hours, as determined by the carrier in its plan, before allowing passengers to deplane, unless the pilot-in-command determines there is a safety-related or security-related reason precluding the aircraft from doing so, or Air Traffic Control advises the pilot-in-command that returning to the gate or permitting passengers to disembark elsewhere would significantly disrupt airport operations; (3) for all flights, an assurance that the air carrier will provide adequate food and potable water no later than two hours after the aircraft leaves the gate (in the case of a departure) or touches down (in the case of an arrival) if the aircraft remains on the tarmac, unless the pilot-in-command determines that safety or security requirements preclude such service; (4) for all flights, an assurance of operable lavatory facilities, as well as adequate medical attention if needed, while the aircraft remains on the tarmac; (5) an assurance of sufficient resources to implement the plan; and (6) an assurance that the plan has been coordinated with airport authorities at all medium and large hub airports that the carrier serves, including medium and large hub diversion airports. Failure to do any of the above would be considered an unfair and deceptive practice within the meaning of 49 U.S.C. §41712 and subject to enforcement action, which could result in an order to cease and desist as well as the imposition of civil penalties.
Most interesting to me is that they have chosen to declare that any violation of this rule is “considered an unfair and deceptive practice.” That is the same rule that the DoT used when announcing fines against Continental, ExpressJet and Delta’s Mesaba subsidiary earlier this year, the first time they issued a fine related to a tarmac stranding event. Such an approach, while permitting the government to do something, seems to be a bit of a stretch in terms of “unfair and deceptive.” Still, the rules have now been filed in the Federal Register and will be going into effect 120 days from today, just in time for the Passover holiday travel rush.
The penalties defined above only apply between the carriers and the DoT. There is still the issue of how passengers will be compensated (or if they should be) in such cases. The DoT doesn’t specifically answer those questions but they do define the systems by which airlines will be required to hear complaints from customers and what the airlines must do in response.
In this regard, we agree with ATA that we need not require carriers to receive complaints by telephone. In reaching this conclusion, we do not mean to imply that carriers should not have in place some mechanism for resolving consumer problems in real time, and failure to do so may require us to revisit this decision in the future. We also do not see the necessity in requiring carriers to accept complaints by fax. As a result, this rule only requires carriers to provide passengers their email or web-form address and their mailing address.
We have decided to adopt a rule along the lines set forth in the NPRM. The Department believes that 30 days to acknowledge a complaint and 60 days to provide a passenger with a substantive response represent standard practice in the industry and should allow carriers adequate time to investigate and respond appropriately. By “substantive response” we mean a response that addresses the specific problems about which the consumer has complained. This type of response often results in a resolution of the complaint. We are also clarifying that by “complaint” we mean a specific written expression of dissatisfaction concerning a difficulty or problem which the person experienced when using or attempting to use an airline’s services and that contains sufficient information for the carrier to identify the passenger.
So the airlines don’t have to accept complaints via telephone (good for you, US Airways and United Airlines) but they do have to actually respond to them (watch out, Continental) and in a substantive way that actually addresses the problem. This should be good for consumers overall.
Another positive move from this action is that the airlines will be forced to publish not only the generic on-tie percentage of their flights but also the number of severe delays (> 30 minutes) and to highlight if that happens on more than half the monthly operations of a flight. The airlines will also be forced to publish if flights are canceled more than 5% of the time in the previous month.
…[T]he Department views the posting of the percentage of arrivals that were more than 30 minutes late as important because consumers are particularly interested in significant delays as these delays are the kind that are likely to result in missed connections and other serious problems. The Department is also requiring special highlighting of flights if they are late more than 30 minutes of scheduled arrival time more than 50 percent of the time to enable consumers to make more informed travel decisions.
So it is mostly a good thing. And there is still the great loophole for the airlines, “unless the pilot-in-command determines there is a safety-related or security-related impediment to deplaning passengers (e.g. weather, air traffic control, a directive from an appropriate government agency, etc.), or Air Traffic Control advises the pilot-in-command that returning to the gate or permitting passengers to disembark elsewhere would significantly disrupt airport operations.” There will still be plenty of opportunities for passengers to be stranded on the tarmac. And if they are then all the DoT will require is that the airline pay a fine to the government; there is still no requirement of compensation or accommodation to the customers for violations. Such an approach does not seem so great for the passengers on the surface.
I just hope that next time we’re number 4 for takeoff after a 3 hour hold no one turns the plane around and heads back to the gate. That guarantees a cancelation instead of a 3:15 delay and I know that the latter is worse. And now that the DoT has addressed this problem maybe they can get back to work at addressing the underlying source of the problem – the antiquated FAA Air Traffic Control system – and help create a system where the flights can actually operate on time rather than needing to worry about punishment for when they don’t. The ridiculous slot and flow control issues that the FAA and airports have today contribute more to the problems than any airlines’ operational desires. No airline WANTS to keep passengers out on the tarmac for hours. But when the system cannot handle the number of flights passing through it then the system has to be considered part of the problem.
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Posted by Seth on December 5, 2009 under points |
It was somewhat inevitable that the Star Alliance partner award chart would change once US Airways announced the changes to their own metal rewards a month ago (Coverage from Lucky here). And with as bad as the new scheme is for those rewards (numbers went up and now multi-tiered like Delta) it was not too far a stretch to assume that the Star Alliance reward chat was going to get ugly. And it did. A number of the rewards stayed the same price to be sure but plenty of them also went up in price, many more than 25%. Ouch. Here’s the full analysis…
Trans-Atlantic
North America to Europe and to South America are going up somewhat significantly in cost, from 20-25% depending on the cabin. Rewards will now be 60/100/125K depending on the cabin. Previously a coach reward was 50K and business was 80K. The business reward used to be a tremendous value at the 80K number. Not so much any more, though both of the premium cabins are still a better value than the other US-based Star Alliance partners.
Hawaii
Hawaii is bearing the brunt of the bad news. It seems to be involved in most of the worst increases. Coach seats from the mainland to the islands are increasing from 35K to 40K points round-trip. That number matches Continental’s new chart though US Air has business and first for 70K each while Continental charges 80K and 100K respectively. Fine, a 5K increase isn’t all that egregious, but that is a low number compared to a few others. Hawaii also is seeing rates to Europe and South America increase to 60/100/125K round trip. These numbers are the same as the cost from mainland North America so the value is pretty good, though they’re still increases of as much as 25% which isn’t great.
Reward travel from Hawaii to the South Pacific is taking one on the chin in a somewhat irrational manner. Rewards in that region go from 75/95/130K to 80/120/160K, a rise of about 15-20% at the top. But the strange part is that those costs are higher than North America to South Pacific rewards (80/110/140K) for much shorter trips. And the premium cabin service on the shorter ex-Hawaii trips aren’t as nice as those from the mainland, though the actual ticket costs probably are higher. Similarly, it is no longer cheaper to get from Hawaii to the Middle East than from the mainland to the Middle East. Both clock in now at 80/120/180K (no change from N. America, increases from Hawaii.
Caribbean
Maybe someone in US Air HQ is jealous of folks living the island life. Travel within the Caribbean is also taking a huge hit in redemption values. Previously travel within the region was 15K for a coach seat. The new rewards will ring in at 20/40/80K, pretty much matching Continental and similar to United, depending on the preferred cabin of travel. Trips from the islands to South America, Europe and the Middle East are also going up (60/100/125K, 60/100/125K and 80/120/180K, respectively) putting those categories in line with the rewards from the mainland and Hawaii.
Middle East
As noted above, getting to the Middle East will increase in cost from both Hawaii and the Caribbean. On top of that, travel within the region is increasing 12-33%, depending on the cabin. Rewards will now go for 30/35/45K points rather than 20/30/40K. The percentages are worse than the actual number increases on these so they really aren’t terrible. Indeed, the numbers are still better than United and Continental who come in at 30/45/60K for those rewards.
Summary
Reward price increases always suck. There’s no two ways around it. And there are no rewards that went down in cost on the new Star Alliance Reward Chart from US Air. There are some new rewards available (forward cabin within the Caribbean) so that is a nice touch. And the fact that nothing really changed in Asia is rather pleasing. Indeed, the fact that they made this change and things don’t completely suck is actually rather refreshing, even if there is still some devaluation in play.
For the most part the rewards are still less expensive than the other Star Alliance options in the USA. That alone makes the US Airways Dividend Miles program still hold some reasonable value. Not a ton of value, especially given the other issues the carrier has, but still pretty reasonable value in their rewards scheme. And they still do not block partner award inventory like United is known to do, a huge plus. Still, I probably am not going to be out buying large pools of Dividend Miles for rewards anytime soon, even if they can be had at about .8 cents/mile when purchased in bulk this holiday season.
Posted by Seth on October 28, 2009 under News |
Calling it a “Strategic Plan to Strengthen Core Network,” US Airways announced a series of cuts today that will significantly change the way the airline operates. They are dropping several destinations and closing a few crew bases. As part of these changes they expect to remove about 1,000 employee positions.
On the Domestic US service front the most significant change comes with the cuts as Las Vegas. US Air will be reducing service there to 36 daily departures in the next 3 months. As recently as April 2007 the airline operated 131 daily departures. In April 2008 that number dropped to about 100. Today they’re at 64 and in February only 36. They’ve apparently decided that there is no more money to be made in Las Vegas so they’re cutting to the bone. The Las Vegas hub used to be a cornerstone of the America West network. It has fallen mighty far mighty quickly under the US Air brand name.
On the international service front the cuts are equally dramatic. US Air never was a big player in the trans-Atlantic market but they’re basically giving up completely now. They’re cutting service between Philadelphia and Birmingham, UK; London-Gatwick; Milan;Shannon, Ireland and Stockholm, Sweden. In addition they are formally returning the slots for the Philadelphia-Beijing service that the DOT awarded them and which were never actually operated.
With these cuts there are now a few wide-body aircraft sitting around with nothing to do. US Air announced just over a month ago their intention to refit their long-haul aircraft with a new premium cabin. One has to wonder now if those plans are still going forward, especially if they no longer will be operating the routes where the premium cabin can generate the revenue to justify the costs of that seating layout.
The one bit of good news coming out of the announcement is that the Shuttle service amongst New York’s LaGuardia, Boston and Washington’s National airports will remain in place. The Boston-New York route will be switching over to the Embrear E190 aircraft, as will Boston-Philadelphia service.
These cuts are huge. Just a few weeks ago there were discussions going on about how well US Air seems to have weathered the storm and how they might turn the corner back to profit. Apparently that simply isn’t in the cards and these drastic cuts are necessary. It does explain a bit why CEO Doug Parker looked so glum during the press conference yesterday announcing Continental Airlines joining Star Alliance. This sort of thing would weigh on my mind, too.
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Posted by Seth on October 27, 2009 under News |
The show is over now and it was, for the most part, a show. It was fun to see representatives from all the airlines – both executives and flight attendants – up there to welcome Continental to Star Alliance and it was interesting to listen to the questions and answers.
Among the bits I found interesting, questions were posed by folks from the NJ Star Ledger, Bloomberg, and news outlets based in Guam, Puerto Rico, Ecuador, Trinidad & Tobago and Switzerland. Quite a mix there. The questions were typical of such an event – mostly about how the change will affect and benefit whichever region was represented by the person asking the question. The answers were fun, too. Among them:
- “Everyone here flies. Sometimes in coach. What does everyone in coach want? An upgrade to first class. That is what Continental just got with our move to Star Alliance.” – Jeff Smisek, CO President and COO. That’s a pretty big swing at SkyTeam there.
- “We don’t really compete too much with Continental in New York and what is good for Star Alliance is good for US Airways.” US CEO Doug Parker, looking very uncomfortable on stage when asked about the future that US has in the alliance.
- The Japanese partners along with open skies coming to Japan are “robust opportunities” for Continental in the Asian markets. CO CEO Larry Kellner on potential expansion from Guam.
- “We’ll always win in a competitive front.” Kellner again, this time when asked about the ATIs and JVs.
- “Investment bankers are finally exercising their god-given right to fly in business class again.” Smisek, discussing booking trends and potential economic recovery.
Apparently Continental decided about 5 years ago that they made a mistake in not pursuing ATI/JV opportunities for transatlantic traffic. For some reason, however, they were not able to rectify that and remain in SkyTeam. It is hard to know if the other carriers (DL/NW/KL/AF) simply didn’t want to share or if it was something else. But the good news is that they’ve addressed the issue now.
Lots more to come as news continues to roll in.
Posted by Seth on October 27, 2009 under News |
As expected, lots of updates hit Continental’s website at midnight CDT this morning, and the Star Alliance details are all over the place. From the hundreds of lounges now accessible for Presidents Club and Star Gold members to an interactive travel reward chart that is actually comprehensive and accurate to many details on upgrades available for travel on other Star Alliance carriers, there is lots of information there to digest.
The Star Alliance upgrades are a nice feature but ridiculously expensive in most cases, charged per segment and require a full-fare (Y or B) ticket to begin with. Not a great value, but it is always nice to have more options.
The reward search online is also quite nice, with more than 10 carriers available immediately. A couple test searches this morning show availability in line with what other Star Alliance carriers are seeing which is quite nice. Of course the three carriers that are delayed in reward integration – Swiss, EgyptAir and Shanghai Airlines – affect me personally (I need a reward on EgyptAir) but I’ll get over it eventually.
The move also means an end to the Continental partnership with Qantas. Hardly a surprise as Continental now has United Airlines and Air New Zealand as partners offering service to Australia. The relationship officially ends on December 17, 2009. Tickets for reward travel after that date will be honored but no new tickets will be issued and no miles will be accrued on revenue tickets.
The lounge access benefit is ridiculously good at this point. There are over 800 lounges available for Star Gold members, a group that now includes Continental Platinum and Gold elites, not just Platinum elites. That’s a lot more lounges for a lot more people. Many of the lounges are now also accessible for Presidents Club members. It might actually be enough to tempt me to join, though with the Star Gold access maybe not.
Partner earning rates were also announced and no major surprises there. The bad news is that the lowest fares on many carriers don’t actually earn miles. Plus most partner carriers will no longer earn bonus miles for elites; only United, US Airways and Lufthansa earn elite bonuses. On the plus side, there are not too many 50% earning fare classes. So it is all or nothing, with plenty of nothing on the cheapest fares. Combined with the new reward chart announced a few weeks ago, rewards are going to be a little more expensive and the miles are a bit harder to earn. That’s not great at all. But the interactive reward chart – more than a year in the works – is accurate and mostly functional (I’ve found one bug). That is a major improvement.
Considering the amount of work required to make the leap from SkyTeam to Star Alliance in a 48-hour span I’m quite impressed at just how much of things are functional. And more will get better over the coming weeks. This change is good on the whole for most OnePass members and Continental customers (with few exceptions). I’m off to book some reward travel now!
