Monthly Archive for April, 2009Page 2 of 6

Alaska Adds First Bag Fee (Nicely), US Airways Wants You to Pay for Bags Online

Published
by
Dan Webb
on April 23, 2009
in Alaska and US Airways
. 0 Comments

Alaska announced in its earnings release that it has decided to start charging for the first bag, starting July 1 for tickets purchased starting on May 1. Like most of the other airlines, the fee will be $15. I’m not a fan of fees, but I can see why Alaska wants to go this route, just looking at changes to its revenues compared to other carrers (more on that in a future post).

On the bright side, though, Alaska is adding a guarantee along with the charge:

Customers whose luggage is not at baggage claim within 25 minutes after their flight parks at the gate will receive 2,500 Alaska Airlines Mileage Plan miles or $25 off a future flight.

I like this. As a consumer, I feel that if I’m going to pay extra for my luggage, the airline better well have it delivered at my destination and do so promptly, so kudos to Alaska for doing this.

The fee does have exceptions:

First class, MVP and MVP Gold Mileage Plan members, unaccompanied minors, military personnel on active duty and passengers traveling to or from Mexico City and Guadalajara, Mexico, will not be charged for a first checked bag. Customers traveling solely within the state of Alaska also will continue to be allowed three free checked bags.

The fee for the third bag is dropping from $100 to $50. The second bag fee remains at $25.

Meanwhile, US Airways announced today that it will “begin offering its passengers the convenience of prepaying to check their bags online at usairways.com.” More details:

Customers who check in online at usairways.com with tickets booked starting today for flights on or after July 9 will have the option to prepay $15 for their first checked bag and $25 for their second checked bag.

But, this really isn’t an “option” to me, as passengers checking bags at the airport will have to pay an additional $5 per bag. Great.

I can totally understand US Airways wanting to have more of this done online, as it will probably make the check-in process a bit faster, but it would be nice if they tried to steer consumers to this method in a different way, like offering 100 miles or something. Oh well.

Alaska, JetBlue, US Airways Report Earnings

Published
by
Dan Webb
on April 23, 2009
in Alaska, JetBlue and US Airways
. 0 Comments

This morning Alaska reported a net loss of $25.4 million excluding special items. Meanwhile, JetBlue has joined AirTran in making money this quarter and posted $20 million in pre-tax income. US Airways posted a net loss of $103 million, or $260 when special credits are excluded.

Alaska and US Airways both had some announcements in the luggage fee department, which I’ll post on later. I skimmed the JetBlue press release and found this interesting tidbit:

CASM is expected to decrease between six and eight percent over the year-ago period. Excluding fuel, CASM in the second quarter is expected to increase between 15 and 17 percent year over year.

That seems like a decent cost increase to me, I’m interested in hearing where those cost pressures are coming from (which will probably be discussed in today’s call).

Something to Look At…

Published
by
Dan Webb
on April 23, 2009
in Random
. 1 Comment

…when airlines talk about how they’re going green. A few airlines sent out press releases for Earth Day yesterday, and I noticed that Delta announced that the airline had achieved an “improvement of fuel efficiency by 35 percent since 2000.”

Now, I’m not exactly what Delta is using to calculate “fuel efficiency,” but I have seen airlines talk about how they’ve decreased their fuel consumption. The airlines have made good progess in this area whether it be switching to newer aircraft, installing winglets, cruising more efficiently, etc., and these do indeed help iwth fuel usage. But cutting ASMs by a decent margin also reduces fuel burn. :D

Some Earnings Highlights

Published
by
Dan Webb
on April 22, 2009
in Random
. 0 Comments

First, apologies for a short post today – a combination of an English paper being due with an accounting project while studying for exams in calculus and economics means one stressed out blogger. :D

Yesterday, Delta and United reported losses, though it appears that they weren’t as bad as feared. I’ve seen a good amount of buzz about Delta’s decision to start charging $50 for the second bag on international flights. At least it’s only a second bag fee, as I think charging for a first bag on an international flight is absurd. I agree with Ben, and I think we’ll have to see if the other carriers math.

Meanwhile, AirTran and Continental reported results today. AirTran reported net income of $28.7 million, and Continental recorded a loss of $136 million.

Should Airlines Fear High-Speed Rail?

Published
by
Dan Webb
on April 21, 2009
in Industrywide
. 13 Comments

I was reading Marshall Jackson’s blog this weekend and noticed he had mentioned that President Obama has revealed his initial plans for high speed rail in this country. I asked myself if an expansion could hurt he airlines.

Short answer: absolutely.

One notable example is the Madrid – Barcelona route, which has historically been the world’s busiest. In February last year, a high speed rail line was opened between the two cities. While I don’t have the exact decrease in frequencies, take a look at this part in the notes to Iberia’s February traffic results:

According to the new Strategic Plan, the company reduced capacity in the domestic sector by 21.6%, leading to a load factor of 68.7%, similar to the level reached in February 2008. Average stage length grew by 6.5% in this sector, due to the higher reduction of capacity in flights between Barcelona – Madrid (this route began to be operated by the high speed train on the 20th of February 2008).

Edit: According to this Wall Street Journal article, the high speed trains have ” snatched half the route’s air-passenger traffic.” (Hat tip to my dad for the link.)

Some airlines here in the States could definitely be hurt by a high speed rail expansion. Any further improvement in the Northeast Corridor could negatively affect the Delta and US Airways shuttle operations, and I agree with Marshall that Southwest would get hurt (I think the intra-Texas and intra-California routes especially).

If this is ends up being an expansion of Amtrak, I’m very worried when it comes to competition with the airline industry. The air carriers are motivated by profits and losses (as they should). If a route isn’t performing well, the airline will adjust accordingly by either eliminating the route or trimming capacity, and the opposite happens on successful routes. Meanwhile, a government-funded train system with guaranteed funding can continue operating despite being unprofitable, making true competition difficult.

What I’m interested in is how the industry will respond. If this proposal gains steam the ATA might get involved, or the individual airlines might fight as well, which has happened in the past. Southwest, for example, fought an attempt to bring high speed rail to Texas in the 90s:

Southwest Airlines filed motions, restraining orders, applications for injuctions [sic] and lawsuits against the Texas High Speed Rail Authority (THSRA) seeking to prevent a high speed rail project from being built in Texas or to at least slow the progress of such a project.

You can read more on that here.

This is definitely something worth watching in the future.

Southwest’s High MSP Loads

Published
by
Dan Webb
on April 20, 2009
in Southwest
. 2 Comments

So, how is MSP-MDW going for Southwest? Well, DOT data provides lots of route information, but that won’t be released for a bit longer. But, MSP released its March operations report last week. Since Southwest only has one route and and flies only 737s, it’s easy to estimate a load factor.

MSP reports that Southwest had 40,745 revenue passengers in March, and a total of 372 operations. Let’s assume that all of the flights were operated with 737-700s or 737-300s, which each have 137 seats (the -500s have 15 fewer seats). That would yield a total of 50,964 seats. So, divide those two numbers and we get a load factor of 79.9%.

That seems like a very healthy number for brand new service to me. Of course, this data doesn’t provide anything about revenue so it’s hard to say how profitable the new service has been. But, this early data suggests that Southwest is off to a good start in Minneapolis.

A Year-Old Trip Report Part Nine: MAD-CDG and CDG-BOS

Published
by
Dan Webb
on April 19, 2009
in Trip Reports
. 0 Comments

Parts:

  1. Introduction/BOS-CDG
  2. CDG-BCN and First Day in Barcelona
  3. Figueres and Girona (and Some Barcelona)
  4. Barcelona
  5. Montserrat and Valencia
  6. Valencia and Madrid
  7. Madrid
  8. Segovia, El Escorial, and Madrid
  9. MAD-CDG and CDG-BOS

Well, for the final time, Matt and I awoke to some random ringtone on his iPhone. It was a funny choice at the time I think, but I completely forget now. It was pretty early – I think we got up before 5 to get to the airport. The whole group, exhausted, slowly made our way down to the lobby/loading area. For one reason or another, this process took a long time, just like getting up to the rooms did a couple of days earlier. I think the process involved two elevators or something.

Either way, I was happy to say goodbye to the “Oats-a-no-no” (read earlier installment for an explanation) and its paper-thin walls and physical keys that we had to get at the desk (though, I guess this method has its perks, as the staff at the hotel in Barcelona seemed to make extra room keys with basically no questions asked). But, at least the staff made us ham sandwiches, but I don’t think I ate mine.

Anyway, we got on the bus, and once again, trying to sleep was an excercise in futility. I just get too excited about plane trips, apparently. On one hand, I was sad to be ending this trip, but on the other hand I was looking forward to another 747 ride.

We got to the airport fairly quickly, and the airport was very quiet, though our check-in process was a bit screwed up. I forget exactly what happened at this point, but I think our tour guide said we couldn’t check in, but apparently we could. What I found odd was that the Air France line listed the day’s flights and said what time people could begin checking in. Just something I had never seen before. But once that was sorted out, everything went smoothly and an Air France agent did a fantastic job of taking care of us. I noticed a weird coincidence on the boarding passes that our departure gates at both Madrid and Paris were E70.

Continue reading ‘A Year-Old Trip Report Part Nine: MAD-CDG and CDG-BOS’

Sunday Video #21

Published
by
Dan Webb
on April 19, 2009
in Sunday Video
. 0 Comments

I haven’t posted a safety video in a long time, so here’s one from the Delta L-1011. I think I may have this seen this one when I flew on an L-1011 many moons ago.

YouTube Preview Image

A Year-Old Trip Report Part Eight: Segovia, El Escorial, and Madrid

Published
by
Dan Webb
on April 18, 2009
in Trip Reports
. 1 Comment

Parts:

  1. Introduction/BOS-CDG
  2. CDG-BCN and First Day in Barcelona
  3. Figueres and Girona (and Some Barcelona)
  4. Barcelona
  5. Montserrat and Valencia
  6. Valencia and Madrid
  7. Madrid
  8. Segovia, El Escorial, and Madrid
  9. MAD-CDG and CDG-BOS

Well, sadly, our last full day in Spain had come, and our first stop was Segovia. We were warned that it would be very cold and windy, and it was right. I think at some point there might have even been some sleet mixed in with the rain. If I recall correctly, however, I was in a vacation mood and I decided to wear shorts during they day. Not my best move.

Anyway we took the bus to Segovia and our first stop was the castle, which was very interesting to walk through.

Continue reading ‘A Year-Old Trip Report Part Eight: Segovia, El Escorial, and Madrid’

Saturday Links #41

Published
by
Dan Webb
on April 18, 2009
in Saturday Links
. 0 Comments
  1. American also released earnings this week. The airline did post a loss, but it was less than expected.
  2. The Boyd Group has a very interesting report on Southwest’s LGA service.
  3. Speaking of Southwest, apparently CEO Gary Kelly is taking a 10% cut in base pay. (HT to curbcrusher on FlyerTalk)
  4. Cranky was on vacation this week, but Evan Sparks had a great guest post on international alliances.
  5. Sun Country posted a profit this week, and will also finish paying back all deferred wages next week.
  6. Allegiant pre-announced earnings and says the company will earn between $1.34 and $1.38/share.
  7. Alaska and ALPA have reached a tentative agreement on a new contract.