I remember that when Midwest fought off AirTran’s takeover bid that some speculated that AirTran really didn’t need Midwest anyway, and could just expand without them. Well, that seems to be coming true now. Cranky has a good post on what markets Midwest is cutting. Some of these cities include Ft. Lauderdale, Ft. Myers, and Baltimore. AirTran is moving into Ft. Lauderdale from Milwaukee and increasing Ft. Myers (only once a week to twice daily) and Baltimore (one daily seasonal flight to two daily flights year-round).
I don’t know what frequency reductions Midwest is making, but AirTran is also making increases in Tampa, Orlando, and Las Vegas flights out of Milwaukee. These are all markets Midwest serves, too.
Saving the cookie seems to be backfiring…
I found two stories that related to government involvement in the industry today. Northwest released its earnings report today, and mentioned how its merger with Delta requires Department of Justice approval.
Meanwhile, Continental announced that it has applied with the Department of Transportation to join the Star Alliance. Also, Continental, United, Lufthansa, and Air Canada* are also applying for antitrust immunity for transatlantic service. Some SkyTeam members already have immunity, and some of the Oneworld carriers are rying to get it as well.
All of these airlines are attempting to adequately respond to market conditions, but government approval seems to be impeding their actions, in my opinion. If I’m correct, it probably hurts the airlines financially. And some want more regulation?
*Random speculation – Isn’t it interesting US Airways isn’t on that short list?
In my readings this weekend I came across this BusinessWeek article on Southwest’s new codeshare with WestJet, and it had this interesting tidbit:
[Gary] Kelly said Southwest is talking to “close to a dozen” other carriers about similar deals to connect its customers to Hawaii, Mexico and the Caribbean by late 2009, and Europe and beyond in later years.
Obviously it got me speculating as to who can be the next partners, and I found this to be very difficult. If the Southwest partnership with WestJet is any indication, Southwest is looking for a carrier that isn’t in one of the major three alliances (a move like this would probably anger the US airlines in these alliances) and follows a similar business model, which made my speculation even harder. Continue reading ‘Who Will Partner with Southwest Next?’
Here’s a very quick rundown of today’s earnings.
JetBlue posted a net loss of $7 million. The airline is also ending service to Ontario (it only opearted a flight to JFK from there) in September. The conference call is at 10 AM.
United reported a $2.7 billion net loss, or $151 million excluding special charges. That conference call is at 11 AM.
Finally, US Airways had a net loss of $567 million, or, excluding special items, a $101 million loss. The airline’s call is at 12:30 PM.
Have any of you heard of US Helicopter? If not, the service started a couple of years ago, and can be really handy. While the airline operates a few routes, its biggest ones are between Manhattan (from the Downtown Manhattan Airport and the East 34th St. Heliport in Midtown) and Kennedy and Newark, and has partnerships with Delta and Continental. The fares usually start at $159. That might sound expensive, but in my opinion, it’s worth it. A cab ride from downtown to JFK can take awhile, but the flight lasts about eight minutes, according to the US Helicopter Website. In addition, bags are checked and passengers clear security at the heliport, saving a decent chunk of time.
Anyway, Delta just announced a new limited-time perk. Domestic travelers who are flying on a full coach fare or a first class fare get complimentary helicopter service to downtown or Midtown on tickets purchased from now to August 29 (travel has to happen by December 31). The tickets have to be booked all the way to the heliports, too. little while ago. I was talking about the new offer with one of my friends, and he mentioned how this really wasn’t anything special, and I decided to look into it. Turns out he was very right.
I decided to make a mock itinerary from Los Angeles to Kennedy to the Downtown Manhattan Heliport on September 17. I decided on four scenarios to compare. Continue reading ‘Delta’s “Complimentary” Helicopter Service’
I just found a slightly-old story from the Houston Chronicle about the ATA’s crusade against oil speculation and Southwest’s hedging:
Of all the airlines, though, Southwest could be affected the most if Congress changes the ATA’s cautious wording about related commodities.
…
Given his familiarity with commodity markets, I asked Topping [Scott Topping, Southwest's treasurer who is in charge of the hedging program] if he believes that speculators were inflating oil prices.
“That’s what I have a hard time getting my arms around,” he said. “Speculators bring information to the markets. Clearly, the supply of oil is struggling to grow, and demand is continuing. In that environment, higher prices are a result.”
That sounds like a “no” to me.
Very interesting to say the least. I always wondered why Southwest signed the letter to travelers. Industry unity (or something like that), I guess.
Here’s a letter I just sent in to The Providence Journal about my local airport. Maybe I’ll get lucky and be published again:
Recently, AT&T chose to move its corporate headquarters from San Antonio, Texas, to Dallas, Texas. One of the primary reasons for this change was a lack of direct service from San Antonio’s airport. Rhode Islanders should learn from this recent news item: plentiful air service is important for business.
T.F. Green Airport is a highly important economic asset for the state that can help fuel future economic growth. While the current renovations going on at the airport are a step in the right direction, they are not enough. There are two other projects at Green that have hit constant roadblocks. The intermodal rail station will provide rail service to Providence and Boston and an updated rental car facility. A lengthened runway will allow for flights to more destinations flown with an expanded fleet mix. The newly-proposed 8,700′ option is a suitable alternative to the 9,350′ option. It is more economical and can be completed faster, while still allowing Green to be competitive in New England.
Enhancements at Green are vital for Rhode Island’s economy. They will attract new businesses to the state, and more importantly, encourage local businesses to stay, and expand, in Rhode Island.
Daniel Webb
Harrisville
Time for another reader poll!
Thanks for voting in the first one. Most voters believed foreign airlines should be able to own more of United States airlines, but disagreed on how much. Some believed in a 49% limit, while others thought foreigners should be able to hold the majority. Anyways…
The past few weeks the idea of regulation has been bounced around again to try to solve the industry’s problems. On the other hand, though, some still think there is still too much regulation. For example, some may think that some of the airlines were allowed to stay in bankruptcy too long. Had they been allowed to go out of a business, we might not be having the same capacity problems we are today.
I’ve mentioned regulation before here and here. Evan Sparks has lots of good commentary on the issue on his blog.
So, what do you think? Should the industry be like it was before 1978? Well here’s poll #2…
Do you compare airline fees before booking a ticket?
- Yes (76%, 44 Votes)
- No (24%, 14 Votes)
Total Voters: 58
Loading ...
Feel free to vote and share your thoughts in the comments.
Happy weekend, everyone! Here’s the second edition of Saturday’s links…
- Computerworld provides an update on how inflight Wi-Fi is developing.
- Michael Boyd’s weekly column has a good insight about the airline’s fight against speculation. He doesn’t think fighting speculation is very effective, but he does think that if the industry can band together on oil, it could (and should) work together on other issues like upgrading the outdated ATC system.
- British Airways has joined the alternative fuel bandwagon, and Brett Snyder over at Cranky Flier interviews British Airways’ Head of Environment about the new program with Rolls-Royce.
- Godzilla at PlaneBuzz reminds us why reregulation isn’t the best of ideas.
- ATW reports that Ryanair will be making some significant cuts in its shcedule, especially at Stansted.
- Finally, one of the US Airways’ pilots’ unions (they have two due to the merger) claims that the airline has started a “program of intimidation” to force pilots to fly with less fuel. Brett Snyder’s BNET Blog, PlaneBuzz, and Jon Heckman all have good posts on it.
- It is very possible that Spirit’s pilots might go on strike in a few weeks. (Added 7/20)
Have a good weekend, everyone! 
Earlier this week I forgot to mention a very important part of Delta’s conference call from the question and answer session with analysts:
Kevin Crissey – UBS
…According to the stock market and on our numbers AirTran’s in significant trouble; can you talk about your approach to AirTran markets and capacity cuts as it relates to those markets?
Glen Hauenstein [Executive Vice President of Network and Revenue Management]
There are no capacity cuts in AirTran markets, as a matter of fact, despite the fact that we are down in general capacity by about 13% to 14% in the fall domestically, we are actually up in AirTran competitive markets into and out of Atlanta. Some of the point to point flying we have taken reductions in. But into and out of Atlanta of course Atlanta being our core strength market we are continuing to leave that capacity in.
(Source)
Hmmm…maybe PlaneBuzz was right and the “Airways curse” will come true yet again.
Latest Comments