I love Pam Ann. 
Monthly Archive for July, 2009Page 2 of 5
- American is hiking its bag fees. And unlike the other carriers, it’s not charging less for those who pay online.
- United has reached its target for flight attendant furloughs.
- You can find episode two of the Plane Crazy Down Under podcast here.
- British Airways’ OpenSkies subsidiary is dropping the JFK-AMS route.
- Cranky has a good post on United’s cash position.
- As always, PlaneBuzz has great earnings summaries. You can see the two of them here and here.
Yesterday, US Airways announced that its fleet of A321 aircraft will be equipped with Aircell’s GoGo service, and that Wi-Fi will be available starting in early 2010.
The move does make sense for a few reasons. US Airways has been dumping domestic IFE, so that makes me think some passengers might be more willing to buy. Second, it’s an extra source of revenue. Third, everyone else is doing it – I do wonder if Wi-Fi availability is enough to influence a booking decision between two airlines, though.
But it also makes sense that US Airways is doing the A321s here. First, they’re one of the largest aircraft doing domestic flying, so you do have the biggest number of potential customers sitting down. Also, check out the route map – there are a lot of long flights here (I believe the A321s are doing some flying that used to be done by domestic 757s). While I don’t know for sure, I think that passengers on longer flights are more willing to purchase the service.
Found on the carrier’s website.
That being said, I think it would be a good idea for the airline to get the service out to other aircraft over time. While the A321s do have plenty of longer flights, the A320s and A319s do some as well.
US Airways has been growing its A321 fleet of late. According to this SEC filing, the airline ended 2008 with 33 of the aircraft, ended the second quarter with 40, and plans to end the year with 51.
On a personal note, this announcement does make me excited because, based on the map, it looks like the A321 will be coming back to the PVD-CLT route. My fingers are crossed that nothing will change.
You can find more details about the service from US Airways here.
Thanks to my friend Martin Rottler to passing this along, which comes from FlightAware. I really, really, hope this is an error.
Yesterday, Republic announced that its second quarter earnings call will be on July 30, next Thursday. With the recent Midwest and Frontier moves, I think there might be more questions than answers.
I wanted to cover two of the earnings releases from yesterday, and tomorrow I’ll be looking at Alaska, US Airways, and JetBlue. Whoever scheduled these earnings releases to be so close together needs to be fired!
AirTran reported net income of $78.4 million, or $46.6 million excluding items, which brings about a result of $0.36/share, which was a bit better than expected. Passenger revenue was down 18.5%, but “other” revenue was up over 90%, most likely from extra fees and such. (Can we please have some kind of industry standard reporting this stuff?) Yield was down 13.2%, PRASM was down 11.8%, but RASM was down only 5.9% (thank those extra fees. But CASM ex-fuel and items was up nearly 10%. The airline says that the “Mark on AirTran” idea “resulted in more than 80 million media impressions.”
Meanwhile, Delta was able to eek out a $1 million operating profit, but recorded a net loss of $257 million, or $199 million excluding merger costs, which brings us to a loss of $0.24/share. Delta’s results get a little messy because of the merger, but PRASM was down 19.9% compared to the second quarter of 2008 (after combining the results of Northwest and Delta). CASM ex-fuel and items was up 2.2%.
The Dallas Morning News reports:
Southwest’s unsecured debt was cut from Baa3 from Baa1, and ratings on its pass-through certifications and enhanced equipment trust certificates were also reduced. About $3 billion in debt was affected.
So, while Southwest still has an investment-grade rating, it’s not at the lowest level for that category. So, of course, this isn’t great, and it could very well affect Southwest’s opportunities to get additional financing. But they’re still in better shape than the other carriers.
This week we’re joined by Christopher Webb and Blogger Bob of the TSA, both of whom were great to talk to! It was very enjoyable to learn about the TSA’s social media efforts, and I think other government agencies can learn from them. We also talk about a few news stories, like AMR’s earnings. You can listen here.
We had three major carriers release earnings (or lack thereof) yesterday. To be honest, I’ve still yet been able to completely digest all the numbers, but here are some of the highlights:
Continental posted a net loss of $213 million, or $169 million excluding items, or $1.36/share, a little bit worse than analysts estimated. The airline announced a $5 fee for checking bags at the airport, a $5 increase in the phone reservation fee, and the elimination of 1,700 more jobs. Yields were weak, especially on some international routes with a 23.8% decline. CASM ex items and “holding fuel rate constant” increased 2.8%. One source of that increase? Labor. Wages, salaries, and related costs was up 13.5% compared to the second quarter of 2008.
Southwest posted net income of $54 million, or $59 million ex-items ($0.08/share). This result was a bit better than expected. I was able to listen to parts of the conference call, and while new revenue initiatives were hinted at multiple times, there wasn’t much in terms of details. Hopefully in this quarter we’ll finally figure out what’s up Southwest’s sleeve. (Personally, I’m most interested in how the airline decides to modify Rapid Rewards.) It was announced that 1,400 workers participated in Freedom ’09, the recent early-out program, and I think it met expectations. As curbcrusher wrote on FlyerTalk, “Gary Kelly said that they were largely satisfied with the results of Freedom ’09 and that if additional reductions are needed, “the next step would not be a broad furlough.” Note that this a distinct change in attitude from just three months ago when he said nothing was off the table.” Anyway, PRASM was down a bit over 8%, which seems good compared to other carriers so far, but CASM ex-fuel and items was up 5.8%.
United’s net loss was $323 million, or $2.23/share, which was better than expected (or perhaps, at this point a better word is feared), and that number excludes items. Including those items, United posted a profit of $28 million. Part of those items were hedging gains. After getting hurt in the past, it looks like United is finally on the right side of things in that area. On the revenue side, international travel looks week, just like for everyone else – international PRASM was down 25.9%. The cost side of things looked good, as mainline CASM ex-fuel and special items was down 1.2%, which is pretty darn great to me, at least, considering that other airlines have seen increases in this statistic. Do I still think United has trouble to face ahead? Certainly. But this, I think, is a step in the right direction. But – it looks like the carrier has yet to release a balance sheet! We’ll have to wait for it to file its 10-Q.
Anyway, more on these airlines next week, when we can compare results to other carriers, and when I also have a weekend to analyze.
I’ve been reading up on Air France’s new Premium Voyageur product, and I have to say I am very excited about it, as it offers a nice balance between amenities and price for those who don’t want to pay for a business class ticket. To learn more about it, you can take a look at this post from Cranky, and I think his analysis is spot-on.
Interestingly, this is actually Air France’s second premium economy offering. The first is called Alizé, which is found on Caribbean and Indian Ocean routes, and from what I’ve read it looks like it’s here to stay. You can see a picture of the cabin here and a description here. I would say that Premium Voyageur is nicer.
But I digress. Take a look at this graphic from Air France – the airline will have four classes of service on some aircraft, just like British Airways does on some international aircraft.
My question is – will we see premium economy Ameircan carriers? United has Economy Plus, but I really don’t count that as a premium economy offering since it’s just extra legroom (I still think it can be worth it though). Right now, Continental, Delta, and US Airways (and sometimes American) operate two-class configurations on their international aircraft.
Personally, I think premium economy is a great idea – I just wonder why we haven’t seen any American carriers get behind it yet.
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