TripAdvisor Survey – What Can Airlines Learn?

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Dan Webb
on March 15, 2010
in Random
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Last week TripAdvisor released the results of its annual travel survey, and I found a couple of the results, at least when it comes to airline-related items, very interesting. (You can see some of my thoughts on the airport side of things on my About Airport Parking blog.)

One big issue with the survey is that TripAdvisor didn’t release anything about the demographics of those who took the survey. If the majority of the respondents were very frequent travelers, then airlines looking at these results should probably pay attention. But, if most of the survey takers fly maybe once a year, then not so much. And of course, there’s always a difference between what people say they will do and what they actually do. I.e. they say they might prefer an airline with a good in-flight entertainment product but end up going with the carrier that has the cheapest price or most convenient schedule. But, let’s take a look.

First, the survey found that 25% of travelers found legroom to be one of their least favorite things about traveling. So that’s good for airline’s like JetBlue, United, Frontier, and Midwest because they all offer economy seating with more legroom for an additional fee. And now Continental’s announcement that they will start selling exit row seating makes even more sense.

Next up is baggage fees, and none of us should be shocked that travelers aren’t exactly fans. That’s certainly good for Southwest (two free bags) and JetBlue (one free bag). Basically, the debate about bag fees continues. The airlines that charge them have fallen in love with the ancillary revenue they provide, while Southwest has been thinking of late that its “Bags Fly Free” campaign is winning new customers, though I think it’s fair to say that’s more attractive to non-frequent leisure travelers than the business travelers Southwest has been trying to get (I think that group cares more about the lack of a change fee at Southwest).

There were a couple of interesting statistics when it comes to inflight Wi-Fi, especially because we can only guess about how popular and profitable it’s been. 30% of respondents said they would pick one airline over another due to Wi-Fi, so that’s good news for Virgin America and AirTran, who have their entire fleets equipped with Gogo. But then 61% of all respondents aid they aren’t interested in paying for inflight Wi-Fi, which makes me wonder what usage rates have been.

Anyway, those are the numbers I found the most interesting.

Sunday Video #58

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Dan Webb
on March 14, 2010
in Sunday Video
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You’ve probably heard about the looming BA strike, and I really liked how the airline posted a video from CEO Willie Walsh about it, though it’s gotten less views that I would have expected. Anyway, it’s nice to see BA get ahead of this thing social media-wise:

YouTube Preview Image

Saturday Links #88

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Dan Webb
on March 13, 2010
in Saturday Links
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  1. Porter is boosting service to Toronto from Boston, adding a fifth daily roundtrip during the week. Air Canada and American Eagle go there as well, though they fly to Pearson (Porter goes to Billy Bishop City Airport).
  2. Air Jamaica is going away on April 12th, when operations pass over to Caribbean Airlines.
  3. And, most likely on a related note, Air Canada is boosting service to Kingston, Jamaica. That destination, which usually gets served with an A319, will be seeing a 767 on some days.
  4. GOL and American are getting closer, enhancing their current frequent flier partnership.  Codeshare flights are expected to launch sometime in the second quarter.
  5. Hawaiian has ordered an additional A330-200 for delivery in the second quarter of next year, bringing its total orders of the type to ten aircraft. Deliveries begin in April and extend to 2014. Three years later, Hawaiian will receive its first A350.

Air France and KLM Adjust Checked Baggage Policy

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Dan Webb
on March 12, 2010
in Air France and KLM
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Earlier this week, Air France and KLM announced a couple of changes to their checked baggage policies, effective for tickets purchased on or after March 28. The adjustments are very similar to what we recently saw from Iberia. Air France and KLM currently have a mixed system – a “piece” system (like what the American carriers do) and a “weight” system, where one can take multiple bags for free as long as the total weight doesn’t exceed a limit. Like Iberia, it’s moving completely over to the former. I could explain all the changes, but that’d be boring, and plus AF/KLM made this handy graphic:

(Click to enlarge.)

So, in some cases, we’re actually seen some increase in bag allowance, which is certainly nice. Though those increases aren’t always that high, due to the varying policies of the weight system. For example, if I was flying Paris – Johannesburg in business, my allowance is actually 40 kg under the weight system. Also, this is a bit of a trade-off for some business class passengers. For example, if I’m flying JFK-CDG in business, I get two 32 kg pieces of luggage, but now it’s three pieces at 23 kg each. That’s still more weight, but the bigger bags will cost extra, though I have to think that’s not a huge convenience.

It should be noted, however, that the airlines have sneaked in a small fee increase here. Right now, the second bag for economy passengers costs $50, and it will be raised to $55. So, like all the other airlines, it’s a good idea to pay for the bag fees online, as one can save 20%. (Though the KLM website does note a good number of exceptions of where that option isn’t available. I’ve yet to find out if the restrictions apply to Air France as well, but they probably do.)

I could number crunch some more, but honest, it’s really not worth it. In the end, Air France is making its policy more transparent and understandable, which is a good thing. I have to think there are some other benefits here as well – restricting people to one bag probably makes check-in faster, for example.

On a side note, it’s interesting to see how the two airlines are positioning their premium economy offerings. KLM seems to be positioning Economy Comfort as simply a coach seat with more leg room and recline, while Air France is setting apart its Premium Voyageur offering even further (that’s a nicer seat than KLM, too).

IATA More Optimistic on 2010 Financial Performance

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Dan Webb
on March 11, 2010
in IATA
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Today, IATA released an updated financial forecast for 2010, and the trade group now predicts that the industry will now lose only $2.8 billion dollars. Yes, we should be happy about that, considering the previous forecast was for double that amount – $5.6 billion. In addition, IATA is forecasting that the total losses for 2009 will amount to $9.4 billion, $1.6 billion less than previously forecast.

So why the optimism? “The improvement is largely driven by a much stronger recovery in demand seen by year-end gains that continued into the first months of 2010. Relatively flat capacity translated into some yield improvement and stronger revenues,” the group reports.

IATA also released some interesting slides, so here are some of the ones I found interesting:

Those of us in North America will experience losses of $1.8 billion, second only to Europe with a $2.2 billion loss. It appears that the emerging economies will be leading the recovery, especially Latin America. IATA says that region wll perform well because “economic ties to Asia helped isolate the region from the worst of the financial crisis. Carriers in parts of the region have benefitted from liberalized markets which have facilitated some cross-border consolidation, giving greater flexibility to deal with changing economic conditions.”

I’ve written here before about the amounts of capacity that have been taken out of airline schedules, and that’s really been helping load factors, and by definition, RASM performance. IATA also predicts that restricted reply will help boost yields very slightly in 2010 – a 2.0% increase for passenger traffic.

Finally, here’s a graph of revenues. Basically, there’s an improvement, but there’s a lot of lost ground to recover here, especially when it comes to the high-yield premium passengers.

Basically, there’s a long road ahead, especially in the North American and European regions. But at least the recovery seems a bit stronger than originally forecasted.

You can see IATA’s industry outlook here.

The Air Travel Consumer Report Needs Work

Published
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Dan Webb
on March 10, 2010
in Industrywide
. 2 Comments

Just for fun, I decided to take a look at the on-time performance of major carriers and their regional partners in their biggest hubs since the most recent Air Travel Consumer Report was just released by the DOT with data for January. Not surprisingly, the regionals didn’t do too hot. In only one case (Mesa in Phoenix) did a regional outperform the mainline partner.

I originally got the idea to do this small bit a research when Brett Snyder wrote on his BNET blog that on-time results should be sorted by marketing carrier, and I completely agree. In some cases, there can be some big difference. For example, United mainline had a 76.1% on-time percentage in San Francisco, but SkyWest, who had 20% more flights, only earned a meager 53.2% percentage.

But some changes do need to be made before it would work to report results by marketing carrier. Right now, a lot of regional carriers are missing, just because they’re not required to do so. Currently, only “air carriers that have at least one percent of total domestic scheduled-service passenger revenues” need to share their numbers with the DOT. The only regionals who qualify there are American Eagle, ASA, Comair, Mesa, and SkyWest. ExpressJet and Pinnacle are also included in the report, but only because they share their numbers voluntarily.

As a result, it would not make sense to change the report as things stand today because it would unfairly report results. For example, it’s quite easy to check out American’s performance because Eagle is a huge operation. Sure, Chautauqua is missing, but that’s only 15 ERJs. On the other hand, it wouldn’t work to report a single US Airways number because the only operation that is in the report is Mesa out of Phoenix. It’s hard to look at the East network as Air Wisconsin, Chautauqua, Colgan, Piedmont, PSA, Republic, and Trans States are all missing.

It is useful, of course, to know how well specific regional carriers operate, but not as much for consumers, for whom the report is made. Let’s be honest here – the aircraft wear the mainline carrier’s colors, and the flights are always booked through the major carrier. It seems only fair to group all the results by major carrier. But for that to work either more airlines need to report on a voluntary basis, or the DOT needs to change the requirements on sharing results.

Honestly, this wouldn’t be a big issue for me if the airlines didn’t promote their on-time performance like United has been doing (the same can be said for US Airways last year). But, in United’s case, over a quarter of their domestic capacity for 2009 (as measured by ASMs) was excluded from that number. Does that really make any sense?

Anyway, you can check out the results I compiled here. (Unfortunately, Google Docs lost some of my formatting from Excel.)

Photos: First Aer Lingus Regional ATR (And Why It’s a Good Idea)

Published
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Dan Webb
on March 9, 2010
in Aer Lingus
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On March 28th, Aer Lingus regional starts up, with service provided by Aer Arann. The two have interlined in the past, but this brings the partnership much closer. I really think this is a good idea for Aer Lingus. Right now, the airline has a huge seat gap. The smallest aircraft it operates is the A320, with 174 seats. (It wasn’t always that way – the airline used to have Fokker 50s and BAE 146s but they were eliminated.) I think that seat gap makes them either too big for some markets or makes them serve them inefficiently.

Here’s an example – right now Aer Lingus has one A320 a day to Glasgow, while Ryanair operates two daily 737-800s. Once Regional starts up, the mainline service goes away and is instead replace with four flights with ATR s. In end, Aer Lingus will still have less capacity than Ryanair in the market, but with twice the frequency. Rynair’s flights are at the beginning and end of the day, but Aer Lingus has a schedule throughout the day, so Aer Lingus might be able to win some customers based on schedule here. The same thing for Endinburgh – right now Lingus has a lone A320 in the middle of the day (and Ryanair has two 737-800s), but now the ATRs can enhance that schedule with an earlier and later flight.

Personally, I’d like to see Aer Lingus get some other small aircraft of its own, perhaps a 319, or an E-Jet, or maybe even a CSeries. But enough about that. Check out these pictures of the first ATR72 to wear the Aer Lingus colors, snapped by photographer Malcolm Nason. I think the aircraft looks great – thanks to Malcolm for letting me post them here.

Allegiant and 757s: More Questions than Answers

Published
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Dan Webb
on March 8, 2010
in Allegiant
. 5 Comments

The Hawaii market has been fun to watch for the past few months, but it just got more interesting for those who observe the industry. It’s been rumored for awhile that Allegiant wants to go to Hawaii, and they’re finally doing it. The airline announced Friday that it will be acquiring six 757s from an unnamed European carrier, and they’ll be arriving over the next couple of years. The first two are slated to arrive within the next two months, and will be placed into service in the fourth quarter of this year.

Other than that, we don’t know much more. So let’s get into the analysis/speculation, shall we? To make it easier to read I’ve divided the rest of this post into shorter sections.

A Change in Strategy?

Do I see this as a big change in strategy for Allegiant? No. Allegiant’s current system has been kind of simple – big leisure market on one end of the route, small market on the other end, with MD-80s flying the route a few times a week. President and CFO Andrew Levy said in a press release that “this transaction will enable Allegiant to extend to Hawaii its strategy of serving large leisure destinations from smaller cities with no existing nonstop service,” so that doesn’t seem like there will be any big changes here.

Yes, adding a new fleet type is a big change for Allegiant, but I wouldn’t classify it as a major shift. The airline’s current strategy has been to buy cheap MD-80s that are in good shape, and basically they’ve extended that to another type.

So Where Are the Aircraft Coming From, Anyway?

The answer to that question will help clarify Allegiant’s strategy here, at least a bit. For example, there are two exit configurations for the 757 – three doors and two overwing exits, and four doors. The former can hold no more than 224 passengers in a one-class configuration, while the latter can seat up to 239 passengers.

Another big factor is the engines – 757s come with either Pratt & Whitney PW2000 series or Rolls Royce RB211 series engines. There are a couple of different versions of each type, but it can make a difference. For example, if Allegiant wanted to fly out of Bellingham, Washington to Hawaii with a PW2037-powered 757s, some weight restrictions might be in order, but might not if powered with RB211-535E4 engines. (According an investor presentation released today, the company reports that the aircraft are RB211-535E4 powered.)

So where are these coming from? All Allegiant says is, “The six 757 aircraft are sister-ships and have been in service with a single European operator since original delivery from Boeing. The aircraft come equipped for extended twin-engine operations (ETOPS), as required for long overwater flights.” In a SEC filing from today, the company also reports that the aircraft have RR21-535E4 engines, have an average age of seventeen years, and an average cycle count of 19,000.

Here are my best guesses, from what I think is the most likely to least likely:

  1. Thomson Airways. The initial rumors about Allegiant and Hawaii involved Thomson 757s.
  2. British Airways. Yeah, they announced in 2008 that the whole fleet was sold off to be converted into freighters, but, they conveniently have six in storage right now. (Though it appears one of them was with a couple of airlines.)
  3. Finnair. The carrier is dumping its fleet of seven leisure 757s, conveniently from 2010 to 2012. (Finnair’s have Pratt engines.)
  4. Thomas Cook.
  5. Icelandair.

Continue reading ‘Allegiant and 757s: More Questions than Answers’

AirTran’s Interesting Milwaukee Move

Published
by
Dan Webb
on March 5, 2010
in AirTran
. 2 Comments

To be honest, it’s been an annoyingly slow news week airline-wise. Yeah, traffic reports and RASM estimates are kind of exciting, but I usually wait for all of the airlines to release results, because it just gets redundant otherwise, I think. So hence today’s fast post.

But this morning an interesting press release came over from AirTran about Milwaukee. And it’s not a new rote announcement:

ORLANDO, Fla., March 5 /PRNewswire-FirstCall/ — AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI), today announced that the airline will host its annual shareholders’ meeting on May 18, 2010, at the historic Pfister Hotel in downtown Milwaukee. This marks the first time the Company’s annual meeting will be held in Milwaukee. AirTran Airways operates a hub in Milwaukee and is the fastest growing airline at General Mitchell International Airport.

Is it just me, or is this decision to not have the meeting in Orlando, where AirTran is headquartered, fairly symbolic here? I think it shows that AirTran is really committed to this market. Heck, AirTran is calling itself “Milwaukee’s largest mainline carrier” and it’s opening a crew base there. Clearly they’re ready to face-off Midwest for an extended period.

There’s definitely a lot of overlap between the two airlines. But Midwest does have some advantages here, I think. First, while it’s probably eroded a decent amount, they still have brand loyalty as Milwaukee’s hometown carrier. Second, they still have some unique markets, especially the smaller ones with the ERJ service, so that can drive some connecting feed to their other flights. On a related note, Midwest does have some greater fleet flexibility. The smallest AirTran can go is 117 seats with the 717 (granted, there are a five SkyWest CRJs working for them, too), while Midwest can use those E170s, etc. in markets that might not work out for AirTran. Finally, Midwest has been able to expand its reach with the Frontier codeshare.

And, like I usually write here, it will be interesting to watch them duke it out.

bmi and Swiss Expand Partnership

Published
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Dan Webb
on March 4, 2010
in Swiss and bmi
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Bmi is one of the newest members of the big, happy Lufthansa family, and it’s been interesting to see where Mother Lufthansa play with the airline to make it fit into its larger route network. Yesterday we saw that happen a bit with the announcement of a codeshare agreement between bmi and fellow Lufthansa subsidiary Swiss. That’s an extension of a partnership that started earlier this year with Swiss entering the Heathrow-Geneva market (potentially with slots acquired from bmi).

Photo Credit: bmi.

The codeshare is pretty simple to understand as it is quite wide -ranging: all UK to Switzerland routes. In a press release bmi says “will allow bmi to offer fares between Zurich, Geneva and Basel from London Heathrow, London City, Manchester, Birmingham International and Edinburgh and improve connections between Switzerland and the wider bmi network.”

But, in addition to this codeshare, we’ve seen some other interesting moves within the Lufthansa family. For example, bmi is launching flights from Heathrow to Vienna, a market that is currently served by Austrian as well. And this article from Business Traveller shows some interesting moves bmi has been making with its sister airlines in some other markets.

As usual, this will be fun to watch and see how Lufthansa positions its various airline brands around Europe.

Alaska to Cut Los Angeles – Cancún Service

Published
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Dan Webb
on March 3, 2010
in Alaska
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Earlier this week, Alaska notified the DOT that the airline plans to cut service from Los Angeles to Cancún, a flight that Alaska has been operating for years. According to Alaska’s current timetable, the flight is operating six days a week with 737-800 aircraft. Service is slated to end on June 6.

Interestingly enough, on June 9 United’s usual Saturday-only flight goes to daily for the summer. Mexicana is a player on the route as well, and Delta currently has Saturday-only service. So maybe this route just wasn’t working out with so many players. Alaska also mentions that it will continue to place its code on Delta’s flights on this route, so the airline probably thought it could pull its own metal out of the market but still get revenue through its partner. I do wonder if Delta might increase capacity in the market now.

Meanwhile, Alaska will continue serving Cancún on a seasonal basis from Seattle. The carrier also serves a few other Mexican destinations from LAX (Guadalajara, Ixtapa, Loreto, Manzanillo, Mexico City, Puerto Vallarta, and Cabo).

Photo Credit:

http://www.flickr.com/photos/as737700/ / CC BY-ND 2.0