Monthly Archive for February, 2010Page 2 of 3

Yet More Denver Promotions

Published
by
Dan Webb
on February 18, 2010
in Southwest and United
. 0 Comments

Well, the competition going on in Denver has really resulted in some great promotions, and I just noticed another one going on after United essentially matched another one from Southwest. The latter has really been pushing its Business Select product (which I still don’t think is worth the price, unless you always buy full economy fares), and for awhile was offering a free roundtrip after the purchase of a Business Select roundtrip out of Denver.

Well, I discovered that last week Southwest has been selectively offering Business Select at the same price of its Anytime (fully refundable) fare, which represents a savings of only about $15-20. Of course, if you’re going to book an Anytime fare anyway, that’s a no-brainer. Though I still don’t think Business Select presents enough of a value when the prices are compared to Southwest’s cheapest fares. (Besides, you can get the main perk of Business Select – priority boarding – for $20 roundtrip with EarlyBird Check-In.)

Anyway, United tweeted about a new similar promotion – it has lowered its First Class fares for some markets out of Denver. Conveniently, the fares listed on the page for the promotion are the same as Southwest’s fares. :D

So, I guess if you want to fly first class on the cheap, this is for you. I would caution that on United you should avoid the regional jets. Yes, the larger RJs have a first class cabin but they aren’t as nice as mainline (no IFE, for example).

Anyway, I think it’s smart that the airlines have been doing these promotions. First of all, they’re going for the high-yielding business travelers here. But my other guess is that competing on first class fares (or in the past promotion, more expense economy fares) doesn’t have as much as a negative effect on a carrier’s bottom line than a race to the bottom on the cheap fares.

Southwest to Launch Boston-Philly

Published
by
Dan Webb
on February 17, 2010
in Southwest and US Airways
. 5 Comments

Yesterday, Philadelphia’s new Terminal E extension opened, which will be used for Southwest (they’re leaving their Terminal D gates). First, that’s great news for PHL. E really needed help. But, anyway, Southwest used the event to announce new service to Boston five times a day with an introductory $59 fare. Of course, that’s not great news for US Airways.

Man, this brings back memories to when Southwest started Philadelphia service from Providence. As soon as that happened, I remember getting a postcard from US Airways announcing its new $29 “GoFares” on the routes, which was conveniently the same fare as Southwest. As a result of that fare war, O&D passengers (those going between PVD-PHL as the origin and destination) increased greatly. I think the same thing could happen here. Let’s take a look at the market – the table shows the average fare, average yield, the biggest carrier, that carrier’s market share, and the average fare for that carrier.

So, both Providence and Manchester have more O&D passengers than Boston, despite the fact that there’s more capacity to PHL from Boston, and I have to think that a good number of those passengers could be avoiding the higher fares in Boston. I mean, look at the yields that US Airways is getting out of Boston!

But, that gravy train seems to be coming to an end. Take a look at the coach fare for the week before Southwest arrives, and then look for the week after, when US Airways is matching Southwest.

While Southwest’s entrance will certainly have a negative effect on US Airways’ financial performance on these routes, US Airways still has a strong advantage over Southwest in the schedule department. In the summer, US basically has hourly service with sixteen departures a day. Plus, I think the E190 is the perfect aircraft for US Airways in the market to support such frequent service. But, I’m sure Southwest will do fine on this one – they will certainly pick up O&D passengers but PHL service opens up additional connecting opportunities as well. And even though Southwest’s schedule might not be as great as US Airways’, the latter’s yields are going to take a serious beating here.

The low fares here (from both carriers) will certainly stimulate the market, taking away passengers from PVD/MHT, Acela, and possibly driving as well.

Southwest seems to be doing well in Boston so far – consider the 81% load factor in November and the 89% load factor the month before that. Southwest has slowly been growing the station – boosting service to Midway and Baltimore while adding service to St. Louis and Denver. The airline will also be adding a third gate in Boston to support the new service.

Anyway, this one will be fun to watch.

Southwest’s A-List Promotion for Denver Fliers

Published
by
Dan Webb
on February 16, 2010
in Southwest
. 2 Comments

Well, Southwest continues to be a aggressive in Denver with its promotions. After giving out free roundtrips for Business Select tickets out of the city, Southwest is now offering faster access to it’s still-new elite level, A-List, for Colorado residents. While sixteen roundtrips are required to earn the status, Southwest is now giving out the status for only four roundtrips.

But, one should note that one has a full year to make those sixteen roundtrips, while one must book and fly the four roundtrips in a three-month period, or one quarter. So Southwest is doing some simple math here and hoping that such passengers would be doing about sixteen roundtrips a year anyway, so this promotion just makes them A-Listers faster.

So clearly Southwest is aiming at Frontier and United’s elites here. But is it worth it for those elites to make the switch? I’m not sure. Those elites already get two free bags, so that part of Southwest’s campaign doesn’t do much. No change fees on Southwest is certainly nice, though. The A-List benefits of priority check-in, security, and boarding are the same as the other airlines’ programs.

Plus, I think Frontier’s and United’s perks are a bit nicer than Southwest’s, to be honest. Frontier and United’s elites get a shot at more legroom with STRETCH and Economy Plus, respectively, and also earn a mileage bonus once they’re elite. Also, Ascent and Summit members on Frontier get free DirecTV, while United miles are very valuable as they can be used across the Star Alliance.

This one could end up being a win for Frontier and United fliers, though. Last time Southwest unveiled a Denver promotion the two carriers quickly responded with offers of their own, so we’ll have to see if something similar occurs this time.

More details can be found here: southwest.com/denveralist.

DOT Tentatively Approves Immunity for oneworld

Published
by
Dan Webb
on February 15, 2010
in American, British Airways, Iberia and Oneworld
. 3 Comments

Well, I guess the third time’s the charm for oneworld. On Saturday , the DOT tentatively approved anti-trust immunity for oneworld, a deal that involves a joint venture between American, British Airways, and Iberia. Finnair and Royal Jordanian, while not part of the joint venture, would also receive immunity. BA and AA have tried for immunity in the past in 1997 and 2001.

DOT argues that immunity “would provide travelers and shippers with a variety of benefits, including lower fares on more routes, increased services, better schedules and reduced travel and connection times.”

To be honest, I’m not too surprised that the DOT approved the application. For one, Heathrow wasn’t opened up until the open skies agreement between the US and EU in 2007, so that was a reason to deny immunity that isn’t a factor anymore. Plus, with immunity given to the other two major alliances, DOT loses other reasons to deny the application. In fact, that seems to have helped oneworld’s case this time around, as according to DOT, immunity would “enhance competition around the world by creating competition with the existing Star Alliance and the SkyTeam alliance.”

What does surprise me, though, is the concessions that DOT is looking for – only four pairs of Heathrow slots. I was expecting a lot more (16 were requested last time). Two of those slot pairs are earmarked for Boston-London service, as DOT sees that as a highly competitive overlap market. (Actually, Dallas is more competitive but DOT thinks the market isn’t big enough for another carrier.) As a New Englander, I’m excited to see what carrier (if any) picks up that Boston service – it’s a route that has been tried and dropped by both United and Delta.

I was also a bit surprised that the DOT did not utilize carve outs – specifying routes where the carriers could not cooperate and would compete with one another. According to the DOT, “The recent fundamental shift in the character of alliances – towards integrated joint ventures – has made us more skeptical about the efficacy of carve-outs, especially in the context of joint ventures….We determined that the carve-outs would detract from the potential benefits of the alliance by introducing inefficiencies, and in some areas, impediments to pro-competitive cooperation.”

Of course, the folks over at Virgin Atlantic aren’t exactly pleased with this announcement. Soon after the news came out, a strong-worded statement from Richard Branson was released. “This preliminary decision beggars belief….Four slot pairs is a complete joke and those responsible for this decision should hang their heads in shame….Millions of trans-Atlantic travelers will be adversely affected if the alliance receives final approval. In my personal opinion, this draft decision is a real kick in the teeth for consumers and they will be paying the price for it for years to come,” remarked Sir Richard.

So, where do we go from here? Well, there are now 45 days for objections to be submitted. (I’m sure we’ll see one from Virgin!) Then, there are another 15 days to provide responses to objections. Once that’s over with, the DOT will issue a final ruling soon after. It will certainly be interesting to read the comments submitted.

Personally, I think oneworld will end up getting immunity, though I wouldn’t be surprised if DOT increases the number of Heathrow slots that must be given up. American has said in the past that they don’t think any slot divestitures at Heathrow were necessary, but to be honest I think oneworld should just accept this deal (provided the number of slots doesn’t go up too much) and move on.

But, overall, a good week for oneworld- this is a big step for them in Europe, and at the same time JAL decided to stick with the alliance, and American and JAL have already applied for immunity (possibly more on that this week).

Comment, and Enter to Win A Free Night at Hilton

Published
by
Dan Webb
on February 12, 2010
in Uncategorized
. 563 Comments

You may have noticed on Marshall Jackson on Travel and View from the Wing that a couple of BoardingArea bloggers are offering a free night at Hilton. Well, I’m one of those blogs. :D

Thanks to the nice folks here at BoardingArea and Hilton I’m offering one “Be My Guest” certificate that is valid for one free night (room and tax) at any participating Hilton property in the United States. It expires on June 30, 2010.

All you need to do to enter is comment on this post. Any comment. Really. Just make sure you include a real e-mail address when you comment so I can notify you if you win.

Make sure you comment by noon Eastern a week from today, February 19th. After that I’ll randomly pick one commenter.

Good luck!

OpenSkies Announces Washington-Paris

Published
by
Dan Webb
on February 11, 2010
in British Airways and OpenSkies
. 3 Comments

Ah, who remembers OpenSkies? Yeah, I haven’t thought much about the British Airways subsidiary a whole lot either, to be completely honest. But, the airline actually announced a new route this week – Paris (Orly) to Washington (Dulles). This is certainly an encouraging sign – we’ve seen a few all-premium carriers go bust: MaxJet, Eos, and Silverjet. OpenSkies itself wasn’t doing too hot either. The carrier cut service to Amsterdam, and for awhile British Airways was trying to sell it. But, the carrier turned down a few offers and will try to go on its own, predicting a profit in 2013.

So, where did OpenSkies find room for the new service? Well, the carrier has four 757s, but it doesn’t need that many aircraft to operate its current schedule – there was excess capacity after Amsterdam was dropped. So there’s plenty of room for service to Washington five times a week. The airline also notes that it “plans to increase the frequency of flights in the coming months.”

Naturally, there’s some competition here with United and Air France, and I’m sure they will try to defend the market. But I think OpenSkies is pretty well-positioned here. The Biz Seat product isn’t a bed, but it’s selling at a about half the price as the business class fares of United and Air France. Considering that neither United nor Air France doesn’t have a lie-flat bed in business class here, I’d consider it to be a strong contender. The Biz Bed product from OpenSkies also looks great, too especially since neither AF nor United have a product that’s on par. (Air France only has a bed in First on the 777-200 flight. United’s 777s have yet to receive the new product yet, though reconfigurations start this month.)

But another item of note is that the Washington-Paris market is smaller than the New York-Paris market (hence only 5 flights/week), so OpenSkies might have to fight a bit more to gain some share. And we’ll see if they’re successful if OpenSkies increases frequency as promised.

On a side note, it seems that BA wants OpenSkies to be a French carrier. The airline’s two routes before Amsterdam was cut were out of New York, now they’re out of Orly.

Speaking of New York, I just can’t seem to get my head around OpenSkies’ schedule there. The Washington press release notes that “OpenSkies will continue to offer the same high-quality service on its NYC – ORY route with 17 flights per week,” but according to the OpenSkies timetable, there are only 14 departures a week. Hmm.

Regardless, this is good news for BA, who seems pretty bullish on premium travel, considering its launch of the new A318 London City service and the unveiling of its new first class product.

Photo Credit:

http://www.flickr.com/photos/slasher-fun/ / CC BY-SA 2.0

DOT Approves Slot Swap, But With Concessions

Published
by
Dan Webb
on February 10, 2010
in Delta and US Airways
. 1 Comment

Remember the slot swap that Delta and US Airways announced in August? The deal involved Delta giving US Airways 42 slots at Reagan National, as well as rights to fly to Tokyo and Sao Paulo in exchange for 125 LaGuardia slots from US Airways.

I thought it was a creative move by both carriers to help them build up more-profitable hubs. Plus, US Airways would be able to expand its international reach. And I thought it was good for consumers, too, from some perspectives. LaGuardia passengers could get Delta RJs instead of US Airways Dash-8s. Plus, US airways could expand its reach in Washington, providing nonstop service to some new markets.

Photo Credit: US Airways.

Well, the DOT tentatively approved the deal yesterday, but with concessions. Such as decision was made because the DOT fears that the deal would cause “a substantial increase in market concentration that would harm consumers.” So, the government is proposing a compromise – the carriers must sell some slots for the deal to go through – 14 and Reagan and 20 at LaGuardia. Naturally, the carriers don’t like it. Continue reading ‘DOT Approves Slot Swap, But With Concessions’

Lufthansa’s New iPhone App Helps Travelers Find Their Way

Published
by
Dan Webb
on February 9, 2010
in Lufthansa
. 2 Comments

Iphone apps are all the rage these days, and a short while ago I blogged about Southwest’s latest offering. Well, last week Lufthansa unveiled Lufthansa Navigator, and to be honest, it looks incredibly helpful!

As the name implies, the free app takes on the role of a navigation system that one might find in a car, except at the airport level – the app determines your location and can provide directions to a gate, lounge, ATM, restroom, etc. Pictures of the terminal interior are provided as well to make getting around easier.

Currently, the app is only in a test phase in Frankfurt that will last for a few months. Users will be surveyed by Lufthansa to evaluate how helpful that app is for its passengers and to see what changes should be made. The app is free through Apple’s App Store, and is available in both German and English.

I think this program is very innovative, and a great move by Lufthansa. Personally, I see this especially helpful to passengers who are transferring through Frankfurt and have never been there before. Hopefully it is successful and they can expand it to other airports.

Of course, one thing that could hurt the app’s success is the expense one will incur by using it – especially iPhone users that don’t have international data plans, for example.

A New Blogging Venture

Published
by
Dan Webb
on February 9, 2010
in Site News
. 0 Comments

Before I get started – no, nothing’s changing with this blog, nor am I leaving BoardingArea.

I have, however, been invited by the kind folks over at About Airport Parking to start writing a blog for them. So while on this blog you’ll find a very healthy dose of airline-geekery, this new blog will focus more heavily on airport news.

You can check it out here. I’d really appreciate it if you visited (often), and would love to hear any feedback you might have!

Looking at January Revenue Estimates

Published
by
Dan Webb
on February 8, 2010
in Continental, JetBlue, Southwest and US Airways
. 0 Comments

Quick post today – for one, I’ve been traveling. Second, my main laptop’s battery is broken, so I’m writing with an Asus Eee netbook. It’s a cool little thing, don’t get me wrong, but typing for awhile can be a hassle.

Anyway, here are the PRASM estimates from the carriers who provide them:

And, as always, here’s a graph of Continental’s results, as they provide a final number for the month prior:

So, for each carrier we saw an improvement from the month prior – and that’s great. Of course, Southwest’s results stand out a bit with the double-digit increase, and I think that’s mainly driven by an increase in load factor by over 9 points for the airline. During the airline’s earnings all CFO Laura Wright said that comparisons might get harder as capacity will be down less in future months than in January. But, at the same time, as we move forward, the 2009 numbers that will be used for comparisons for all cariers will be getting progressiviely worse, which can only help the numbers.

On a side note, I wonder how the cutover to Sabre affected JetBlue’s numbers. By all accounts, it went just wonderfully, but during the weekend of the transition load factors were capped at 40-60% on some flights, so that coud’ve had a bit of an effect.