Monthly Archive for February, 2009

Saturday Links #34

Published
by
Dan Webb
on February 28, 2009
in Saturday Links
. 0 Comments

Sorry this is a bit later this usual. Long story short, my Internet was down and my always-eager-to-help ISP won’t be able to send out a technician until Monday.

  1. New blog alert: Flight Ops Blog just launched, and looks like there will be some great stuff coming.
  2. Southwest has reached a tentative agreement with another one of its unions, though the union doesn’t seem incredibly optimistic. (Thanks to curbcrusher on FlyterTalk)
  3. Online Travel Review reports an interesting statistic – 11% of the world’s aircraft are now in storage.
  4. Upgrade: Travel Better has a good piece on restrictions on foreign ownership of US airlines.
  5. Ryanair is considering charging for bathroom use. (Thanks to Kaveh for the link.)
  6. The Irish carrier is also going to be removing ticket counters at airports. Cranky has the details.
  7. I know I linked to this article in my United post, but I felt like posting it again – Swelblog analyzes the pay of airline CEOs.
  8. Channel 9 wonders why Allegiant cares about branding all of a sudden.

Alaska Files an 8-K; Tests Wi-Fi; Joins Twitter

Published
by
Dan Webb
on February 27, 2009
in Alaska
. 0 Comments

On Wednesday, Alaska filed an 8-K, and I was just going to post about that, but some other interesting news came from Alaska this week so I figured I might as well lump everything together. :D

I first noticed changes in booked load factors in the SEC filing. Compared to the same time last year, booked load factor is down 0.5 points for February, 3.5 points for March, and up 1.5 in April.

The 8-K does make an important note about these numbers: Easter was in March last year and is in April this year. So, when most airlines report bookings for this period, March is going to seem a bit worse and April is going to look better just because of the holiday.

The filing also mentioned that ASMs for the first quarter will be down about 10% compared to the first quarter of 2008, so the small changes in booking makes me believe Alaska has planned out its schedule nicely so it’s capacity matches demand. But, any decrease means that travelers are either not planning to travel, or are waiting to purchase tickets because they might be waiting for a sale.

The filing also went over the company’s hedging positions, and about 50% of the airline’s fuel needs for 2009 are hedged at $76. The filing also notes:

All of our 2010 and 2011 positions and the majority of our 2009 positions are call options which are designed to effectively cap our cost of the crude oil component of our jet fuel purchases. With call options, we benefit from a decline in crude oil prices, as there is no cash outlay other than the premiums we pay to enter into the contracts.

Now, I know I’m not a finance expert, but I don’t think Alaska benefits when crude goes down. They’re still losing money on the transaction  because they pay the premium. But, maybe Alaska thinks the lower price of crude negates any loss on the premium paid.

Next…

Yesterday, Alaska announced a free test of its inflight Wi-Fi service from Row 44, the same company Southwest is working with. The free trial will last for about two months. Right now one 737-700 has been equipped with the service, and the press release does not mention if any more are on the way. The airline uploaded a video on its brand new YouTube page:

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And finally…

In addition to joining YouTube, Alaska has also started using Twitter! You can follow them at @AlsakaAir, and Horizon has also joined, and the airline can be followed at @HorizonAir. So far, the people managing the two accounts seem to be doing a great job.

Ironic?

Published
by
Dan Webb
on February 26, 2009
in United
. 0 Comments

So, through my usual random, aimless internet surfing I discovered the login page for United’s Intranet, and I noticed this line:

Employees on Layoff, Furlough, or some types of Leaves of Absence may not have access to SkyNet.

Am I the only one who finds the choice of name slightly ironic?

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United Goes Cashless

Published
by
Dan Webb
on February 26, 2009
in United
. 0 Comments

United has joined the other airlines that have dumped cash…sort of. On March 23, only credit and debit cards will be accepted on dometic flights, as well as flights to/from Hawaii, the Caribbean, Canada, Central America, and Mexico. On long-haul international flights, credit will be accepted but cash will remain an option.

Even if you’re flying domestic, it’s a good idea to check your flights to see if you need change. United Express flights will continue to use cash only.

United has thrown in a perk for users of its Visa card. For every dollar purchased on board, the customer will earn ten frequent flier miles. I’m not an expert when it comes to loyalty programs, but that seems like to decent deal.

How I Would Save United

Published
by
Dan Webb
on February 25, 2009
in United
. 1 Comment

Yesterday, Jon Ostrower from Flightblogger sent out a tweet asking how one would fix United. Even though I tweeted some responses, I figged I’d list my three main suggestions here. I haven’t looked carefully at United’s financial statements, so my best advice in that area would be to not hedge above $100/barrel again. :D

Get rid of Glenn Tilton, or make him take a pay cut. I’m not going to discuss Tilton’s successes and failures here. But, clearly, the unions have latched on to him as a symbol of what’s wrong with United. So, get rid of him and get someone new in, or make him take a massive pay cut. Swelblog reported last week that he is paid 142 times higher than the average United employee and 68 times the average United pilot – that’s the highest in the industry. High CEO compensation is something to discuss for another day, but in this case a significant pay cut should make the unions slightly…er…less angry.

Change the marketing plan or follow the current one. For years, United’s advertisements and marketing materials make the airline look like a premium carrier. That’s great, except it’s not in many cases. United has been adding fees just like all the other airlines, and Cranky has discussed why this move didn’t make sense. Heck, they even tried to eliminate free international meals in coach. United’s current strategy set customer expectations above what they should be. Setting new levels of expectations and constantly meeting them will improve customer satisfaction, or United can make sure it makes its service more consistent with current goals. At least Ted is being killed, though.

Develop a fleet plan for the future. Want to guess how many aircraft United has on order? Zero. Zip. Nada. While United’s current plans to ground the 737 fleet might work when the economy is in a recession – what’s going to happen when the recovery comes? Is United just going to grow with regional partners, and pursue further relationships like the Aer Lingus arrangement? Does United just want to grow through the Continental partnership? Eventually, the 767s and 747s will need replacing. Maybe United can get a deal on some new aircraft in today’s environment.

I should also mention, though, that I think United has made some good decisions of late. The new bonus that rewards on-time performance should help improve the airline operationally. Meanwhile the new premium products should help as well.

Plane Crashes At Schipol

Published
by
Dan Webb
on February 25, 2009
in Random
. 0 Comments

The Guardian reports that a Turkish 737-800 crashed near landing at Amserdam’s Schiphol Airport. Appparently the fuselage split into three upon impact. Fortunately, there have been no fatalities. (EDIT: Now there might be nine fatalities? The news stories keep changing.)

More details here.

EDIT: This site also has some good information. (Via Benet Wilson on Twitter)

EDIT: My friend Boback sent me this slideshow of pictures.

Will Southwest Start a Northeast Shuttle?

Published
by
Dan Webb
on February 24, 2009
in Southwest
. 0 Comments

Last week, the Middle Seat Terminal floated the idea that now that Southwest has announced that it will launch service to Boston’s Logan airport, it could begin a shuttle service similar to the operations of Delta and US Airways. The idea isn’t that all far fetched – just look at Southwest’s intra-Texas and California operations, which both have very frequent service.

Right now, Southwest only has 14 slots at LaGuardia, and that’s not nearly enough to run a shuttle service that would have enough frequencies to compete with the service offered Delta and US Airways. Southwest has also said the Boston operation, at this point, will only involve 8-12 departures a day. In addition, a shuttle service would most likely go to DCA, and Southwest would need to acquire slots there.

I also think there are some better markets Southwest could serve at first. Midway will probably be a destination for both LaGuardia and Logan. Nashville is also a possibility for some connections to get to the West Coast, especially with LGA’s perimeter rule, while PHX and LAS might work for Boston. BOS-BWI might work, and from what I’ve read the past few days, fares on the BOS-PHL route can get pretty high, and Southwest might find some opportunity there.

I think it’s highly unlikely Southwest will start a shuttle service soon after the airline gets things going at Logan and LaGuardia, but anything is possible, especially a few years out.

JetBlue’s Clever New Ad

Published
by
Dan Webb
on February 23, 2009
in JetBlue
. 0 Comments

Business aviation has received quite a beating lately as a sign of excess. Now, JetBlue is trying to take advantage of the situation with a new campaign the touts the benefits of flying commercial with them. The campaign is pretty funny. Part of its webpage reads:

We understand it’s not easy being a high flyer these days. The CFO is picking apart your expense reports. Congress is mad about your bonus. And you can’t even hop on a private jet to the Cayman Islands without freaking out the shareholders.

You can find the campaign’s site here, and you can see the print ad that goes along with the campaign after the jump. Hat tip to my dad for sending me an article about this from Advertising Age, which has a very good analysis. Continue reading ‘JetBlue’s Clever New Ad’

US Airways to Bring Back Free Drinks

Published
by
Dan Webb
on February 23, 2009
in US Airways
. 0 Comments

To be honest, I never thought I would be writing a post with this title.

Yes, I haven’t been te biggest fan of airlines adding fees, especially US Airways, but they were starting to make a brand that worked – basically “we’ll charge you for extra stuff, but we’ll get you there on time.” I thought it was starting to work. The fee added revenue, and lines for the lavatories became shorter. Meanwhile, the airline made a huge improvement in operational performance. So why put back the free drinks?

There are some interesting quotes from Doug Parker in the press release:

“We are firmly committed to the a la carte model and believe it’s the right one for our business….It is also a work in progress – US Airways was the only large network carrier to charge for drinks and that put us at a disadvantage….The beverage program was distracting from the outstanding improvements in on-time performance and baggage handling US Airways’ 34,000 employees worked so hard to achieve last year.”

So, apparently this was hurting the US Airways brand, and I’m not surprised. A good number of people just thought of them as the airline “that now charges for water,” not “the airline with the best on-time performance in 2008 among the big six legacy carriers.”

But today’s news also shows that there is power in numbers. US Airways passengers might complain about the fee for the first piece of luggage, but most of the airlines do that as well.

Anyway, as a non-fan of fees I’m happy to see this happen for any reason. Free drinks come back March 1, beer and cocktails remain at $7.

You can read Jon Heckman’s post on this topic here.

Sunday Video #13

Published
by
Dan Webb
on February 22, 2009
in Sunday Video
. 1 Comment

Today we have a tribute to Concorde. :D

YouTube Preview Image

Saturday Links #33

Published
by
Dan Webb
on February 21, 2009
in Saturday Links
. 0 Comments
  1. Evan Sparks shares his insights on the issue of antitrust immunity for alliances. (For some reason I missed this one last week.)
  2. The IATA says that the government should invest more money into aviation.
  3. FleetBuzz editorial claims the Airbus delivery figures are a “smokescreen.” Interesting stuff.
  4. The director of T.F. Green in Rhode Island (my home airport) provides his thoughts about Southwest going to Boston.
  5. Both Hawaiian and Republic released their financial results this week.
  6. Meanwhile, Brett Snyder analyzes Frontier’s results.