FedEx issued a new SEC filing last weekend, but I didn’t even notice it until a Wall Street Journal article pointed out an interesting part of it:
In addition, in January 2009, we exercised our option with Boeing to purchase an additional 15 B777F aircraft. Our obligation to purchase these additional aircraft is conditioned upon there being no event that causes FedEx Express or its employees not to be covered by the Railway Labor Act. In January 2009, we also obtained an option to purchase an additional 15 B777F aircraft. Accordingly, we have now agreed, subject to the above contractual condition, to purchase a total of 30 B777F aircraft and hold an option to purchase an additional 15 B777F aircraft.
Apparently, according to the same Wall Street Journal article, FedEx has had a labor advantage over UPS for years. Because FedEx started as an airline, it is covered under the Railway Labor Act, while UPS, which started as a trucking company, falls under the National Labor Relations Act. Apparently the latter law makes it easier to unionize.
I can’t say I support the idea, but it is a great way to play politics, to say the least. Basically, FedEx can say an approval of this bill will hurt Boeing union workers. I wonder if this strategy will change the votes of any representatives from Washington.
While I understand FedEx’s motives here, I dont think this is the best move. In my opinion, it would be better for the company to figure out why employees would want to unionize, and try to deal with those issues first.
E-mail marketing can be very effective. Generic fare sales can certainly be nice, but I also like it when companies reach out to individual groups. I joined Virgin America’s frequent flyer program Elevate when it first came out to become a “founding member,” to see if that would bring about any perks. But I’ve still yet to fly them. Apparently Virgin decided to seek out people like me:
Daniel,
You joined Elevate but have not flown us. That just won’t do. We want you to come and see what you’ve been missing, so here’s a special offer just for you – 30% off our lowest advertised fare on your flight with Virgin America. We’ve got movies, TV, music, food on demand, comfy leather seats, soothing mood lighting, seat-to-seat chat and more. We’ve even got Wi-Fi on many of our flights. So come fly us.
Seems to me like a good discount, and I really like this promotion. Unfortunately, I won’t be using it because 1) I hate going to Logan and 2) I don’t need to go to the West Coast during the promotion period, but I still like what Virgin is trying to do here.
I’ve written plenty about Rep. Oberstar’s attempts to block airline alliances, and it seems that the EU is finally getting involved, as reported here:
The European Union has intensified its warning to the U.S. that efforts to deregulate the transatlantic aviation market could be “dangerously” impaired by proposed legislation before Congress, threatening talks slated for later this year.
Apparently, Oberstar doesn’t seem to be backing down, as he is quoted in this Reuters article:
“Is that what I voted for when I voted for (U.S. airline) deregulation in 1978?” Oberstar asked. “Hell no.”
And he’s still calling alliances “defacto mergers.” Well, that’s what they are, considering the U.S.’s restrictive ownership rules.
But I’m still waiting to hear what’s so bad about alliances. Yes, more carriers work together so the “less competition” argument certainly has some merit. But, there are still three alliances competing for business. Plus, having a truly open and deregulated transatlantic market would prevent any problems when it comes to fares. If the alliances started “gouging” passengers in a way that brought huge profits, those profits would encourage other carriers to enter the market.
Meanwhile, I know I’ve mentioned it before, but why do we still have that 25% limit on ownership? Why should we discourage capital from flowing into the United States? Why is it bad if Virgin Group wants to spend some of its resources in the United States as opposed to other markets and build an airline that Americans can use?
</rant>
No, the blog isn’t going anywhere but I wanted to mention that FlightMemory has added a new section of its homepage for registered users, which contains a mix of posts from here and SimpliFlying. This new feature provides yet another way for fellow airplane geeks to read the sub-standard aviation analysis here at Things in the Sky. 
Many thanks to the guys at FlightMemory for setting this all up and giving me this oppurtunity.
Yesterday and today AirTran announced some new routes, and I always like looking at new service.
First, starting June 11, Atlantic City will become a new destination with a pair of daily flights to AirTran’s hub in Atlanta. More interestingly, AirTran announced this morning that it will begin flights from Milwaukee to Washington-National (DCA), also starting on June 11 with two daily fligts. This route is notable as it is one already flown by Midwest. It looks like Midwest will have more frequencies on the route, but still, it’s not good to have AirTran as a competitor on yet another route.
Again, why didn’t Midwest take that offer?
I know this probably comes off as one of those generic crash “thoughts and prayers” posts, but I feel I would be remiss if I did not mention the FedEx crash in Japan and the crash in Montana.
Always very sad to see a crash happen, no matter how big or small. Hopefully the investigators can work their magic and we can see what caused these incidents, and what can be done in the future to prevent a repeat.
For the heck of it, I decided to compare airline market caps (in millions of dollars, by the way), which I took from Yahoo! Finance on Saturday evening (since they’re constantly changing). Isn’t it impressive that Allegiant is so far up the list?
Then, because I like inventing my own statistics, I found the latest fleet counts from CH-Aviation, and then divided market cap by fleet size, and Allegiant comes right to the top.
Just something I found interesting.
Believe it or not, we’re almost at the end of the first quarter of 2009, and in a few weeks it’ll be earnings season again. On Friday, United and Alaska issued some 8-Ks, which don’t make me very optmistic when it comes to financial performance.
United’s mainline PRASM is estimated to be down 12.25%-13.25% compared to the first quarter. It should be noted that this is PRASM, which tracks passenger revenue. As far as I know, most airlines include revenue from fees under “other revenue,” so their effect is not seen here. On the bright side, however, United seems ot be doing a decent job of controlling costs as CASM excluding fuel and special items is only estimated to be up 1.0-1.5%. On the hedging front, United is forecasting an $80 million cash loss on contracts.
Alaska also noted weakness in revenue with a 3.7% decline in mainline PRASM and a 3.9% decrease in mainline RASM in February compared to February 2008. Interestingly, for the quarter to date, the two statistcs were up 0.6% and 1.3%, respectively. Unlike United, however, Alaska is seeing some cost pressures, as first quarter CASM is forecast to be 11% higher in the first quarter 2009 compared to Q12008.
So, in my usual Saturday night hunt for videos I found this first one, of a Delta 777 “put together quickly,” which seemed pretty cool. Then, I found one for EVA Air, which uses the exact same clips for much of the video, except the end when the plane is being painted and takes off. Is this something that Boeing gives out to all 777 customers?
For those who subscribe to Airways, you can find my interview of Ben from One Mile at a Time on page 54.
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