Dan Webb on Aviation
Today Continental announced some changes to Cleveland’s international flights. The seasonal flight to London will move over from Gatwick to Heathrow.
In the same press release, the airline said that “due to economic challenges” Continental will no longer fly its seasonal route to Paris from Cleveland. Personally, I think the biggest of those “economic challenges” is Continental leaving SkyTeam for Star, but that’s just me.
Yesterday, it was announced that BA CityFlyer’s 10 Avro RJ100s and two RJ85s will be replaced with E-Jets. British Airways has ordered six E170s and five E190SRs, with options for three more E190s. The aircraft will be used out of London City (LCY). It was mentioned in the press release that the lower emissions and greater fuel efficiency of these aircraft compared to the Avros was one of the main factors in the order.
I’m going to announce my total ignorance here – the 190SR? On the specifications page on the Embraer website, I see the AR, LR, and STD versions. Can anyone provide some more information on this variant?
Interestingly – if British Airways chooses not the exercise those options for additional E190s, capacity in terms of seats will be down about 26%. (That is, if the seat counts on BA CityFlyer’s Wikipedia page are correct. 
) If they do, capacity will grow a bit.
The first E170 will be delivered in the second half of 2009. The E190 needs to receive steep approach certification to operate out of London City (which the E170 obtained in 2007), though the Embraer press release reports that the aircraft is “undergoing a series of engineering evaluation tests with a view to receiving its steep approach certification by the end of 2009.”
Anyway, it will be a shame to see the Avros go away – I do think it is pretty cool to see a regional jet with four engines. Sadly, I don’t think I will every be able to ride one of them, as I think all of them are gone from commercial service in the US.
For those of you who subscribe to Airways – my latest article (which is on capacity cuts) can be found on page 52.
On Friday, United announced a new strategy to try to improve on-time performance: bonuses. The company will give $100 for ranking in first, and $65 for a second-place finish or reaching a company goal (which wasn’t explained in the press release).
According to the most recent Air Travel Consumer Report, United’s on-time performance hasn’t been the best. The airline ranked 15th and 17th in August and September, respectively. In October, however, the airline improved to 10th place, though its on-time percentage of 86.3% was a bit above the industry average.
I was talking to Ben from One Mile at a Time about this yesterday, and he did express a valid concern – could this bonus make service a bit more rushed? Well, that convinced me to crack open my copy of Gordon Bethune’s book From Worst to First (a must-read, in my opinion), and it seems that Continental did experience this problem:
At first with the new on-time policy,, we saw something that in a way wasn’t too surprising: The planes were landing on time, but the number of lost bags were going up….It makes sense. If you’re getting paid to get the planes in on time and baggage handling is perceived as incidental, what’s your priority going to be?”
“We didn’t want on-time flights without bags, or without people, or with dirty aisles….When baggage became a small problem in our effort…we didn’t say ‘Okay, we need to offer people money to get the bags on the planes.’ That’s their job. We needed to do was explain that…just as it wasn’t going to do any good to get the planes out on time if the passengers weren’t on them yet, it wasn’t going to do any good to get the out on time without those passengers’ bags, either.”
So, there certainly can be some negative effects of the policy, but Continental seems to have gotten over it fine, as baggage performance steadily improved, and became an area that Continental would “excel” in, to use Mr. Bethune’s word. Still, United could do what US Airways does – offer an equal bonus for doing well in on-time performance, mishandled luggage, or customer complaints. I think this system could work, though.
By the way, did United read Worst to First when thinking about this new policy? $65 and $100 were the amounts of the bonuses that were given at Continental. 
Seriously, though, I am excited about this change at United, and I sincerely hope it indicates a change of management style on 77 West Wacker Drive. Hopefully, that will improve the airline’s performance and relationship between United’s employees and managemen.
Well, it’s certainly been a mess weather-wise this week, up to and including a rare snowstorm in Las Vegas. This weekend, the Northeast has been hit pretty well. On Friday, we picked up about 10 inches here, and picked up a couple more yesterday, when it lightly snowed all. Another storm is here today, and it looks like about six more inches are on the way.
Naturally, the weather really affects the airlines. At least the pilots are finding some humor out of it. My friend overheard this on Boston tower:
“Delta 1244 we’re out here drillin holes in the sky…just wondering if you had an update on the runway.”
Anyway, let’s hope the storm clears up soon and everyone can get on their way.
Well, this one ins’t real, but it is funny to watch two 747s race!
Press release just hit:
Continental Airlines (NYSE: CAL) tonight confirmed that flight 1404, a Boeing 737-500 aircraft carrying 107 customers and five crew members, exited the runway at Denver International Airport following a scheduled 6 p.m. MST departure to Houston Bush Intercontinental Airport. Continental and Denver International Airport are providing assistance to the passengers at this time. A number of injuries have been reported and authorities are transporting passengers and crew to area medical facilities as necessary.
The company is in the process of collecting additional information and will communicate additional information once it is known.
Thankfully, no deaths have been reported!
There’s also an article on USA Today that I’m sure will be updated, and there’s already a discussion about the news at FlyerTalk.
Edit: 11:51 – Fixed embarrasing typo in title.
Yesterday, Frontier announced a new fare structure, dubbed AirFairs, which I think is a bit corny, but I think is a great product. Unfortunately, I didn’t really know what Frontier had beforehand so I can’t really compare, but let’s take a look at what the press release has to say:
Classic Plus is the ultimate. The Classic Plus ticket is fully refundable, changeable, and provides the customer the ability to confirm a seat on a different flight the same day of travel for no charge. In addition, Classic Plus customers get priority boarding, two checked bags, complimentary DIRECTV®, an in-flight snack and a premium beverage. Classic Plus customers also receive a 150% mileage credit in EarlyReturns®, the company’s customer loyalty program.
Classic offers the important comforts for the best overall value. For as little as $20 more than an Economy fare the Classic customer gets advanced seat assignments, two complimentary checked bags and DIRECTV®, and 125% EarlyReturns® mileage credit. In addition, they will be charged only a $50 fee for itinerary changes and $75 for same day confirmed changes.
Economy is the basic ticket to ride. The Economy ticket is for the customer who is traveling light and doesn’t foresee any schedule changes. The Economy ticket is our guaranteed lowest fare.
I think Frontier fliers should always check out the difference between the economy and the Classic fare, especially if they are bringing bags. Frontier charges $15 for one bag and $25 for the second. If the difference is minimal, I would think the extra credit and free TV makes buying the more expensive fare very worthwhile.
One thing that confuses me, though, is the mention of a $75 fee for same day flight changes on the Classic fare. This press release from November suggested the fee would be $75 all the time. If Frontier is mentioning the lower fee in the Classic fare description, has it changed for economy passengers? I’ll try to pursue this with Frontier and get an answer back. (Edit: I’m just plain dumb and missed it, and finally noticed the error when I read Brett’s blog today. The fee for economy is $150.)
The Classic fare is what really interests me, and personally I see it as a way for Frontier to compete with Business Select on Southwest. Business Select is based off a refundable fare, so it’s relatively expensive, especially far out. Frontier is adding the premium to the economy fare for Classic, so I wouldn’t be surprised if it is cheaper than Business Select in many cases. So, Southwest might get more revenue per passenger with Business Select, but I think Frontier has the potential to get more total revenue out of Classic.
There are some other interesting things in the press release. Those redeeming an award ticket get the Classic fare, so they will receive DirecTV and the two free bags. In addition, the fees to redeem award tickets are being removed.
I think this new structure is a sign of Frontier trying to get back some Denver O&D traffic, especially the business travelers. The removal of fees for award tickets and the mileage bonus on the Classic fare is very attractive, I think.
Will Southwest respond? Maybe. Southwest is in a tough position to compete with Frontier. Any changes Southwest would make to its product to compete with Frontier would have to be systemwide. The best it could do is keep fares low and hope more customers that way.
But, does Southwest even care? Maybe not. I’ve heard various things about their operation in DEN, like the operation is more used as transfer point. That way, Southwest can focus on O&D traffic for PHX and LAS by moving some connection passengers up to DEN. I haven’t seen any statistics to prove or refute this theory, but it’s always nice to speculate.
So, I saw some SEC filings from Hawaiian and United the past couple of days with some estimates. Hawaiian’s don’t seem that bad at all:
For the quarter ending December 31, 2008, Hawaiian expects passenger revenue per Available Seat Mile or ASM to improve 14% to 16% relative to the fourth quarter of 2007. This expectation is consistent with the company’s comments during its third quarter earnings call on October 30, 2008.
Hawaiian anticipates that its operating expenses per available seat mile excluding fuel (CASM ex-Fuel) for the fourth quarter of 2008 will increase year-over-year by approximately 8% to 9%, relative to the fourth quarter of 2007. Such a result would reflect a modest improvement relative to the company’s previously communicated expectations for the fourth quarter during its third quarter earnings call on October 30, 2008.
United’s, on the other hand, don’t look that great to me…
Fourth quarter 2008 mainline passenger unit revenue (“PRASM”) is expected to increase between 2.5 percent and 3.5 percent year-over-year excluding the impact of Mileage Plus accounting changes. Including the impact of the Mileage Plus accounting changes, mainline PRASM is expected to increase/(decrease) between (0.3) percent and 0.7 percent year-over-year.
The company’s CASM excluding fuel seem to have held relatively steady so far, which is good, but the change in revenue seems pretty anemic, in my opinion.
What do you think?
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