Monthly Archive for July, 2009Page 3 of 5

Delta and Continental Add Surcharge For Bags Checked at the Airport

US Airways and United had made this move, and it looks like Delta has gone the same way, according to the carrier’s website:

For tickets purchased on or after July 16, 2009 for travel on or after August 4, 2009 there will be a $5 surcharge on each of the first two checked bags when checking in via ticket counter, kiosk, or curbside. There is no surcharge for bags prepaid during online check-in at delta.com.

And Continental said in its earnings release that it would be “increasing domestic checked baggage fees by $5 for customers who do not prepay those fees online. This change is effective immediately for travel Aug. 19, 2009, and beyond.”

I know I haven’t been the biggest fan of extra fees in the past, but I actually like this one. When I flew with US Airways a couple of weeks ago, it was checking bags at the counter that was really slowing things down. So, this fee has the potential to cut down check-in lines for passengers. Of course, I’d prefer to see carriers offer a small number of miles or something for checking bags online, but obviously the carriers prefer the extra revenue.

Anyway I’ll have more on today’s earnings releases tomorrow…the next two weeks I’m spending time teaching kids (9-15) about stocks, which cuts down on time during the day. Fun though. :D

Summer Reading: Flying High In a Competitive Industry

I was looking for a new book to read, and luckily, I was one of the winners in Simpliflying’s Tweepitition, and received a copy of Flying High in a Competitive Industry: Secrets of the World’s Leading Airline, which is about Singapore Airlines. I was very excited to start reading since I didn’t know a whole lot about the carrier. Many thanks to Shashank Nigam for running this contest!

First, I’d like to say that this is not a book for airplane geeks, or at least not all of them. The book reads like a business case study for students, which makes perfect sense since it’s published by McGraw-Hill Education.jul21

Just like most business cases, the book opens up with a couple of chapters covering the airline industry as a whole which are very well done and have very well-written descriptions of the challenges in the industry faces. To be honest, if one of my friends wanted to learn more about the global airline industry, I would tell them to read these opening chapters.

The next chapter, “Key Drivers of SIA’s Performance,” was also well-done, and includes many useful graphs. For example, there was one graph that compared the labor productivity of various world carriers that was very informative. One section that concerned me, however, was “Alliance And Acquisition Strategy,” which mentioned lots of airline partners, but never mentioned the Star Alliance.

“Achieving Cost-Effective Service Excellence at SIA,” the next chapter, was not all that appealing to me, as it is very weak on actual numbers. It shows how Singapore has low costs per ASK, but that’s about it. And while the authors do write about many of the company’s efforts to save cash, they never really estimate how effective each initiative has been.

This chapter also has one of the things I hate most about business writing today – an overuse of buzzwords! Some section titles from this chapter were “Total Innovation: Integrating Incremental Development with Unanticipated, Discontinuous Innovations,” and my favorite: “Achieving Strategic Synergies through Related Diversification and World-Class Infrastructure.”

The following chapter, “Innovation as a Key to Sustained Service Excellence,” while still a bit heavy on the business-speak, is good. I found reading about how Singapore develops new service offerings to be very informative.

Chapter Six, “Managing People Effectively,” is where this book really shines, I think. Everyone I talk to who has flown Singapore raves about the service, and this chapter shows how Singapore gets it done. I was surprised to learn about how intensive the carrier’s interview process is. The book reports that for cabin crew, “only 3-4% of applicants are hired in each recruitment drive.” I also liked the section describing how frontline employees get a good amount of power when it comes to making decisions. Personally, I think it’s one of the best ways to ensure good service.

The next two chapters focus on the topic “how to win in cut-throat industries,” and I think they’re skip-able, to be honest. The authors introduce a bunch of business concepts, but really don’t relate them to Singapore that well, especially in the first of these two chapters.

The final chapter is a case study that seems completely out of place. It begins to talk about Singapore from the framework that was established earlier…but wait, that was the whole book. Is this a conclusion? Who knows. I was very disappointed to see financial results in this chapter with pretty much no analysis.

So, would I recommend this book? If you’re the type of airplane geek that just enjoys being glued to an airport fence watching arrivals and departures, this isn’t for you. But if you like the business side of things than this might be a worthwhile read. But, the price should be considered. Right now, it’s selling on Amazon for $36, which I think is a bit overpriced.

Sunday Video #32

My friend Mark sent this one along to me and I really enjoyed it. The video is made by the firm that helped put together ExpressJet’s independent brand. The only weird thing – it was uploaded in June 2009. Sure, maybe this firm did a great job, but do you really want to be showing off a venture that ended up folding?

Anyway, enjoy!

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Saturday Links #52

  1. The laviators are finally getting the media attention they deserve!
  2. Grant and Steve, who do the Australia Desk for the Airplane Geeks, have started their own podcast, Plane Crazy Down Under. Check it out!
  3. Continental CEO Larry Kellner will be leaving the company at the end of the year.
  4. AdAge has a great article on airlines and Twitter.
  5. Flight has an update from the NTSB on Continental 1404.
  6. Anna.Aero has a great article comparing the expansion strategies of Ryanair and easyJet.
  7. Sad – Southwest is no longer printing timetables. As Cranky put it, airline dorks died a little inside. But, at least Southwest’s Brian Lusk shared some of his collection while telling us the bad news.
  8. I should have had this last week but forgot. Everything that Jon Ostrower writes is great, but this commentary on the second anniversary of the rollout is one of my favorites.

A Look At American’s Second Quarter Results

On Wednesday, American released its second quarter financial results: a loss of $390 million, or $1.19/share. Ex-special items that loss was $319 million, or $1.14/share.” According to The Miami Herald, “That was a narrower loss than expected. Analysts surveyed by Thomson Reuters had predicted a loss excluding charges of $1.28 per share.”

In case you were wondering what the items were, American reports that “the results include the impact of approximately $70 million in non-recurring charges related to the sale of certain aircraft and the grounding of leased Airbus A300 aircraft prior to lease expiration.”

Revenues, as expected, weren’t the best. Overall, they were down 20.9%, and the only area to show an increase was the “other” category, which was up 7.4%, mostly due to ancillary revenue efforts like bag fees.

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One thing I found interesting was RASM by region. RASM for domestic was down 11.6% while international RASM was down 22.6%. I was also intrigued by the fact that Latin American has the highest yield (and the lowest decrease in that statistic – 11.6%), but only the second-highest RASM, next to domestic flying. Those statistics suggest that American still has too much capacity in that area. Continue reading ‘A Look At American’s Second Quarter Results’

Luggage “Loopholes”?

A couple of days ago I encountered this article from Christopher Elliott, which promises “7 strategies for avoiding checked baggage fees.” Some of the suggestions make sense, like the (obvious) pack less, or flying airlines like JetBlue or Southwest (the former allows one free bag, the latter allows two). But the point that really had me scratching my head was “look for loopholes.”

For example, US Airways exempts all of its frequent fliers, passengers traveling to and from Europe or Asia, Star Alliance Silver and Gold status members, unaccompanied minors, first class passengers and active duty military.

First, how are these loopholes? These are benefits that everyone knows about. Elliott makes it seem that these people will have to fight with the airline to avoid the charge, when that isn’t the case.

Or, more absurdly, is Mr. Elliott recommending to do certain things to take advantage of said “loopholes”?

To get the frequent flier exemption, one would need to fly 25,000 miles or 30 segments – which requires a great deal of time, and certainly costs more than a $15 bag fee. Flying to Europe or Asia really isn’t a loophole – it’s just a choice of destination – and is a $15 fee really enough to convince someone to travel internationally? (No.) :D Unaccompanied minors? Not a loophole, really, since US Airways charges $100 per flight (as per the handy FareCompare chart) for an unaccompanied minor. I can’t really say booking a first class ticket is a good way to avoid a bag fee (unless if you’re upgrading, but I can’t say an upgrade to domestic first is worth it just for that), and being active duty military really isn’t a “loophole,” in my opinion.

Anyway, that’s that. :D

Touring PHL!

Yesterday, I posted my flight reviews, and you can find those here. Today’s post is about my tour of PHL, which was just awesome.

After waiting in the club for a few minutes, Rhett Workman (head of Corporate Real Estate for Philadelphia and the international stations), who arranged everything, came to greet me. The first thing he did was get me listed on the earlier flight back to Providence with better seat availability, and then we headed into the executive offices, which actually used to be part of the US Airways Club.

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A330 model in the offices.

Soon after we entered, Rhett was already introducing me to his co-workers, and needless to say I was a bit nervous to be meeting high-level executives. Hopefully I made a good impression! Afterwards, Rhett brought me to his office and after talking a bit, he gave me a copy of the PHL Master Plan and talked me through it, which I found really interesting.

Rhett then took me to meet the rest of his department, and he introduced me to Bruce Miller, Manager of Philadelphia Properties and Facilities, who was going to take me around a bit so I could learn more about his job. I really enjoyed this as I was able to see part of the terminal that most people never see, like the baggage system and the crew lounge.


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Continue reading ‘Touring PHL!’

Ahoy, It’s Earnings Season!

Here’s a schedule of earnings reports for the next couple of weeks.

Wednesday, July 15

American

Tuesday, July 21

Continental
Southwest
United Continue reading ‘Ahoy, It’s Earnings Season!’

Airplane Geeks Episode 56

Episode 56 of Airplane Geeks is now available for your listening pleasure. This week, Max, Rob and I are joined by Kate Sedlmayr of KES Consulting, and we discuss the weekly news, airline-airport partnerships, travel agents, and, of course, how United breaks stringed musical instruments. You can grab it here!

Annoying Airline Reporting #2

As I wrote when I started this cheesy post series, I don’t want to make it sound like I’m an expert on everything, but occasionally I see something that comes up that a beat reporter covering the airlines should know. Today’s feature comes from Reuters:

Frontier, founded in 1994, competes with Southwest Airlines Co (LUV.N) and JetBlue Airways Corp (JBLU.O).

OK, the Southwest part I can dig. But JetBlue? The two carriers compete on one route – Denver to New York. That’s it. Why not say Frontier competes with Southwest and United, since the latter is the other major carrier at that airport?