Monthly Archive for May, 2010

Blast From The Past: 1960s United Safety Cards

Published
by
Dan Webb
on May 31, 2010
in United
. 2 Comments

My friend Martin Rottler sent me a link to his Flickr page a couple of days ago with some old United safety cards. Very old safety cards – from back in the day when it was United Air Lines and not United Airlines. He has posted sets of the DC-8, Caravelle, and Boeing 720.

Is it just me, or was it a bit harder to open emergency exits back then? Not that it looks like it was incredibly difficult to operate them, but to my untrained eye it appears that the manufacturers have made them a bit easier over the years. I’m guessing the rationale there is that making an easier-to-use exit increases the chances of a successful and safe evacuation.

Ryanair Announces New Barcelona Base

Published
by
Dan Webb
on May 28, 2010
in Ryanair
. 1 Comment

Well, it’s been rumored for awhile, but now it’s finally happening. Yesterday, Ryanair announced it will launch its 42nd base at Barcelona this coming September, with 270 weekly flights to 20 destinations. The busiest routes will be those to Malaga, Palma, and Seville, with 14 weekly frequencies each. The Irish airline will base five 737-800s at the airport.

Photo Credit: Andy_Mitchell_UK on Flickr. (Licensed through Creative Commons.)

The carrier also notes that it “will allow the airport to tap into the low fares market, which continues to grow, and which has so far been absent from the airport.” I guess the presence of Air Berlin, EasyJet, and Vueling don’t count?

Ryanair claims that its presence “will help reverse declining traffic numbers at El Prat airport,” which could certainly be true – low fares absolutely stimulate demand. But as this article from Flight notes, Ryanair will not have a presence on the Barcelona – Madrid route. The route remains one of the world’s busiest but has seen passenger declines due to a new high-speed rail line – and Ryanair can’t increase the number of passengers flying if they’re not on the route!

I also wonder what the net gain in passengers will be for Ryanair. The airline currently serves the Barcelona area through Girona and Reus. So how many passengers will find El Prat more convenient now? My guess is that these operations might shrink a bit if there’s some leakage to the new Ryanair base.

Nevertheless it’s good to see some new competition here as we have seen some consolidation in the Spanish market, with Clickair and Vueling merging under the latter’s name. And Iberia has a 45% stake in the airline, to boot. Meanwhile, Iberia has said that it will be launching a new short-haul airline and use the Iberia name for long-haul operations. It’ll be interesting to see how that looks.

“Continited” Announces First 787 Route

Published
by
Dan Webb
on May 27, 2010
in Continental
. 6 Comments

Yesterday, Continental announced its first 787 route - Houston to Auckland starting on November 16, 2011. Service will vary between daily and five-times weekly. This is a Continental announcement, but I think it’s important to look at this from a Continental-United perspective. In the case of both airlines, it is a return to Auckland – just check out these old Continental and United route maps.

It is  pretty early to announce a new route that starts in about a year and a half, but as Adrian Schofield at Aviation Week wrote , there are some good political reasons to do that. But that doesn’t mean I think the route can’t stand on its own.

This route is one the 787 was built for – thinner markets that are further away. Could Air New Zealand do this route with one of its shiny new 777-300ERs? Sure, but there’s probably not enough demand for it. A Continental 787-8 will have about 110 less seats than that aircraft. Continental could also toss one of its 777-200ERs on the route, but that too is bigger. Plus the lower costs on the 787-8 help.

IAH-AKL certainly looks good from an alliance perspective, as it connects two Star hubs, and it really does give a boost to options to getting to/from New Zealand. Of course LAX offers plenty of connections but Continental’s Houston hub opens up a bunch of connections to the East. And, as you can see on this Airliners.net thread, some connections are actually shorter. And here’s a nice perk for travelers going to Washington or New York – since Houston is within those perimeters, passengers can connect to DCA or LGA easily, where LAX would require flights to IAD or JFK. (Unless if one switched to Alaska at LAX.) Plus it offers good connecting service down to Latin America. Continental also says this can work for Europe, too, but I’m not sure how popular that’ll be.

Meanwhile – I think we can see this as a preview of coming attractions when it comes to the 787 route. If you take a look at this slide (pictured below) from this investor presentation – the 787 does offer some nice cost performance relative to the 777. Granted, the chart is based on a 4,000nm haul, but it probably still looks good on the longer routes, too. So the 787 can replace 777s in under-performing markets, but also open up new ones. It’ll certainly be fun to see what they do with the rest of them.

Looking at BOS-BWI…Again

Published
by
Dan Webb
on May 26, 2010
in AirTran, JetBlue and Southwest
. 2 Comments

Yesterday evening was very exciting in the Webb household…it was the first time I had really tried to do any kind of serious analysis using the DOT’s DB1B data, which looks at origin and destination passengers. (I realize this is not considered exciting by anyone else.) It can provide some great insights, as long as you know what you’re doing. Sadly, I can’t say I exactly do. :D

But last night I decided it was time to dive in and start figuring out things for myself by looking into a market I have written about here plenty of times before – Boston to Baltimore (I just looked at that direction, and only on nonstop flights). And with the help of a friend I think I found some interesting things.

The DB1B data is based on a survey of 10% of tickets. So we can estimate the total number of origin and destination passengers for one quarter if we multiply the number by ten. And by using the segment data in Form 41 we know how many passengers were on the flights – so therefore we can estimate how many of the passengers are O&D and how many are on connecting itineraries.

I don’t think these results are too surprising. AirTran and Southwest have Baltimore hubs, and the latter’s network there is more robust. Yes, JetBlue has connections out of Boston for sure, but that’s not really the most convenient connecting point to get to Baltimore as it involves some backtracking.

But this also has implications for the three carriers that have been duking it out, as all three have been running promotions on and off for months. For AirTran and Southwest, they’re more “immune” from fare sales and promotions on the route since more of their traffic isn’t local.

Now let’s look at yields to get a picture of revenue. These numbers might look a bit high for a market with three LCCs competing,  but yields are down about 10 cents year over year.

I was surprised Southwest’s yield was the highest, considering they are a new entrant. This also bodes well for them from a RASM perspective as their load factor – 86.5% – was the highest as well. (JetBlue has a 73.8% load factor,  and it was 78% for AirTran.) Of course once we get into profitability things get more complex as then one has to start allocating revenue from connecting itineraries. Plus figuring out costs for one route can get complicated. But, to keep things simple, AirTran and Southwest have historically had lower costs than JetBlue.

And finally…market share. Again, this is looking at originating BOS traffic going to BWI on nonstop flights.

As you can see there’s no dominant player right now, but AirTran take the top honors here. Not very surprising since they still have the highest frequency here.

Anyway…hope you found that interesting. I wonder what the future of this route is. The percentage of connecting passengers on Southwest might change as the airline builds nonstops out of Boston. And I do wonder what th profitability is for each carrier. Right now, JetBlue seems to be the weak carrier here, and I wonder how long they’ll keep it up. The airline has said they will be maintaining service to all three DC-area airports from Boston, but I’m sure the yields for flights to Reagan look much more attractive.

Summer Plans

Published
by
Dan Webb
on May 25, 2010
in Random
. 5 Comments

Well, there was no major airline news yesterday/this morning – so I figured now would be as good a time as any to share my summer plans here, which you probably already know if you follow me on Twitter.

But anyway – next week I will be moving to Washington, DC for ten weeks to be Flightglobal’s latest intern. Needless to say I’m very excited about this. Flight employs some of the best journalists in the business, and I’m sure I will be learning a great deal from them. I will also be covering a couple of industry events which is also exciting.

So what does that mean for the blog? Well, I will be able to keep writing while I’m down in DC, which is awesome!  But i can’t guarantee post frequency. I hope to keep it up on a daily basis, though Flight takes precedence during my internship. And if I’m covering a trade show or something, naturally I’ll be covering that for Flight before I write anything here (I might just throw up a link).

Anyway, thanks to all the readers who have been reading for nearly two years. I really do appreciate it, and if I wan’t blogging for BoardingArea I don’t think I would’ve been able to take advantage of this wonderful opportunity. I hope you keep reading over the summer! :D

ASA Rebrands, Starts Blogging

Published
by
Dan Webb
on May 24, 2010
in ASA
. 1 Comment

Last week, regional carrier Atlantic Southeast Airlines unveiled a new logo, which you can see below (the old one can be found here). I don’t know about you, but I really like it! A change was overdue – ASA is no longer a Delta subsidiary (now part of SkyWest) and it has recently started flying for a second mainline carrier, United.

In the press release about the new logo, president and COO Brad Holt had similar thoughts, saying that “our new brand identity illustrates that we have expanded beyond a single mainline partner and that we’re ready to take a leadership position in the regional airline industry.”

I really like the way the logo looks. The only feature I didn’t like was the rotation of the plane, but the airline says “its position represents the airline’s geographic roots in the Southeast,” which makes sense. I also like the fact that instead of focusing on the acronym in the previous logo, the airline is showing off its full name. Plus, the old color scheme (red, white, and blue) has been very close to Delta’s, so I’m glad the airline is moving away from that.

But what really surprised me is that ASA has decided to start blogging. That honestly surprised me. I’d say that they only carrier doing a good job blogging is Southwest (still). So it’s a bit surprising to see a regional carrier do it, especially since regionals just hide behind the banners of their mainline carriers.

So why would they do it? I guess one reason is to show that the airline is more than Delta Connection or United Express, and show what goes on behind the scenes. It could also be a good tool for current (and prospective) employees. Plus, regional airlines don’t exactly have the best reputation on there, so this blog is a good way to combat that.

But the initial posts look good so I hope they keep it going.

Airlines Complain About Haneda Slots

Published
by
Dan Webb
on May 21, 2010
in Continental, Delta, Hawaiian and United
. 1 Comment

A short while back the DOT issued a tentative decision about the four slots allocated to American carrier’s at Tokyo’s Haneda airport, which will be opening for international flights this fall. To review – Hawaiian got one slot for Honolulu, American got one for JFK, and Delta got two for Los Angeles and Detroit. The DOT opened up a ten-day comment period, and now that that’s ended let’s take a look at what the airlines had to say.

Unless I’m using Regulations.gov wrong (quite possible!), American didn’t file anything. My guess, they’re happy with their JFK slot. The airline also applied for LAX service, but considering that Delta’s 747 will have 63% more seats than American’s 777, I don’t think they have much of a case there.

Delta’s filing is nothing special. All they said was that they were disappointed that Seattle wasn’t selected, but they are very happy that they received two slots.

So let’s get to the complaints – from Hawaiian, United, and Continental.

Hawaiian

Hawaiian wants a second slot pair, saying that two will “allow it…to compete as a significant player in the U.S.-Tokyo market instead of having to compete from a position of relative weakness against entrenched incumbents.”

The airline also writes that the DOT did not properly consider the size of the Hawaiian market, and also the fact that JAL is trimming capacity there. I think this is an incredibly dumb argument for Hawaiian to be making. I highly doubt that the DOT will take a slot pair away from another carrier and award it to Hawaiian. If anything, talking about how large the market is only makes a good case for Delta’s HNL service, which would provide more capacity with a 747 while only using one slot pair.

United

United was completely shut out of Haneda, with its application for San Francisco service denied. The filing has some interesting arguments, but I’m not sure if they will help since they are essentially variations of the same arguments that the DOT has already seen.

First, the airline writes that while it does not object to one slot going to New  York service, it didn’t like the DOT’s ruling that giving American a slot would stimulate inter-alliance competition, since American and partner JAL already fly to Tokyo from New York, along with airlines in the other major alliances. OK, granted.

But United specifically objected to the awards to Hawaiian and Delta, and says that one of those three slots should be given to them for SFO service.

For Hawaiian, United says that “it is not even clear that Hawaiian’s proposal will generate any significant benefits for Japan-originating passengers, let alone for U.S.-originating traffic.” The airline also says that the focus for Haneda should be on “time-sensitive business travelers.” United also claims that for Hawaiian to introduce new competition, all they need to do is to fly to NRT, which they will be able to do easier than before thanks to the Open Skies agreement.

As for Delta, United says that the Detroit market for O&D is very small, but does offer plenty of connection opportunities. And for Los Angeles, United says that while the O&D market is huge, Delta offers very few connections. So United’s argument here is that San Franciso is a nice blend of these benefits – a strong local market with a hub to support connections nationwide.

Like I said, these are good arguments. But they’re nothing new, so I’m not really expecting to see the DOT change its mind.

Continental

The airline gets bonus points for being the only carrier to have something creative here. The airline (along with subsidiary Continental Mirconesia) applied for Newark and Guam service, and were denied. But the two airlines write that “they are not contesting the basic awards.” Yay, something different! :D They are instead asking for backup authority in case some carriers do not start service.

In its initial ruling, the DOT said they would not do this, writing that “should any of the selected carriers not begin its proposed services, we tentatively find that the public interest would be best served by allowing us to award any unused rights on the basis of a fresh record.should any of the selected carriers notbegin its proposed services, we tentatively find that the public interest would be best served by allowing us to award any unused rights on the basis of a fresh record.”

But Continental has some interesting points here. Like United, they’re doubting Delta’s Detroit route, saying its a small market, and having 747s to each Narita and Haneda might not work. So they’re saying that if Delta doesn’t start or terminate the route, they should be able to fly to Newark, since its the only other service that provides an Eastern hub.

The airline also thinks it should be awarded backup authority for Newark flying if American doesn’t get going on its JFK service, which makes sense.

Finally, Continentla Micronesia believes it should be allowed to fly to Guam if Hawaiian doesn’t start Honolulu flying. I’m not sure if that argument has a lot of merit.

Anyway, we’ll see if the DOT changes its mind at all. United does make a good case for SFO, but with the same arguments as last time I’m not sure if DOT will  be convinced. But I like Continental’s creativity here. Let’s see what the DOT thinks of that.

Dork Since Childhood

Published
by
Dan Webb
on May 20, 2010
in Random
. 3 Comments

So, I’ve been home from school for a few days now, and my parents and I have been going through old childhood stuff to see what’s good to keep for nostalgia purposes, and what can be chucked.  The first round of stuff that we went through was from sixth grade – and I found this old assignment where I had to write about my hero.

Of course, I went with the very-popular choice of then-CEO of Continental Airlines, Gordon Bethune. So this assignment was probably right after I read From Worst to First. Yeah, I’ve kind of always been a dork…

Southwest Really Wants You to Know That “Bags Fly Free”

Published
by
Dan Webb
on May 20, 2010
in Southwest
. 0 Comments

In 2008, airlines looked to ancillary revenue as a way to cope with fuel prices higher than ever seen before.  Once the ball got rolling, most of the legacy airlines policies’ were very close to one another after a few months. But Southwest decided to take a different path, and didn’t charge for the first two bags, among other things (like change fees). In the fourth quarter of 2009, ancillary fees made up 5.8% of the airline’s total revenue, the lowest among its peers. The only airline to tie them was JetBlue, the only other airline that doesn’t charge for the first bag (it does charge for the second).

Not that Southwest is averse to ancillary revenue. It’s EarlyBird check-in product generated $13 million in revenue in the first quarter. In the past year the airline has also increased rates for excess baggage, started charging for unaccompanied minors, and started to allow small pets onboard for a fee. The airline is also in the process of rolling out Wi-Fi as another revenue source.

But Southwest has decided that more should be included in your ticket than what other airlines provide. And the big one they’ve been focusing on is two free bags. The airline has really been hammering home that point in all of its advertising of the past few months. And the airline seems more confident in the program, at first only offering anecdotal evidence about its success, but now saying that it has been gaining market share because of its more generous policy.

Southwest really has been advertising its policy. I mean, every time I’d turn on the TV to watch the Bruins (when they were still playing…not that I’m bitter or anything) there would be plenty of Southwest ads, and even if bags weren’t the focus the policy would still be mentioned.

But the airline has decided to continue hammering home this message by placing “Free Bags Fly Here” decals on 50 737s (a little over 9% of the entire fleet) during the next six weeks.  As you can see in the picture, the decals point to the luggage compartment.

Photo courtesy of Southwest Airlines

Meanwhile, the airline will also be placing “I Carry Free Bags” on about 1,000 luggage carts. Unfortunately, they will be going across the system. I only say unfortunately because it would be fun to see/analyze Southwest target some specific competitive markets with the ads. :D

Anyway, I really think this is creative on Southwest’s part. And they need to keep emphasizing this policy – the goal is to make customers  consider bag fees in addition to base fares when they are making their purchase decision. Having the additional costs added to the fares of other airlines make Southwest look better.

Continental Recalling Pilots

Published
by
Dan Webb
on May 19, 2010
in Continental
. 1 Comment

The labor market for pilots has been messy for the past few years. It’s certainly been awhile since we’ve seen any big hiring happen on that front from the major carriers. And there are a couple of factors at play here. Of course one huge one is the economic environment – when you’re cutting capacity you don’t need more labor. And I think another factor at play here is the government raising the mandatory retirement age from 60 to 65.

But we’ve seen some good news on this front over the past couple of weeks. As I wrote a few days ago, Delta is hiring 240 pilots. We saw some more good news yesterday when Continental said it was recalling 15 pilots who were furloughed in 2008. Now, that’s only about 10% of the pilots on furlough, and right now they’re only slated to be flying for the second half of this year and early 2011, but this is progress. In addition, 111 pilots who voluntarily took leave will be coming back to work. Also good news.

So why the need? Well, Continental is expanding its fleet, with two new 777s coming soon. And some of this is coming through attrition – which will be an important factor industry-wide over the next few years (granted, I’m no labor expert but that’s what I think). Many airlines have older workforces now (no hiring sends up average ages), and replacements will be needed to fill the void. Actually, that could be a good thing for the carrier’s bottom lines, at least temporarily, as the new hires will be replacing workers at the top of the pay scale.

Anyway, let’s hope that the labor market can return to something that resembles normalcy.

Frontier and AirTran Break Up

Published
by
Dan Webb
on May 18, 2010
in AirTran, Frontier, Midwest and Republic
. 3 Comments

Well, I was wondering about this yesterday – and it happened. Frontier and AirTran have decided to end their partnership that started in 2006. The partnership was not a codeshare, but did have the two airlines sharing customers. For example, I can enter a trip between Atlanta to Ft. Lauderdale on the Frontier site, and will booted over to AirTran’s site. Meanwhile, passengers could earn and redeem points in either program.

This announcement is not too surprising. Why? The answer lies in Milwaukee, I think. Midwest is becoming Frontier and Midwest Miles is merging into Frontier’s EarlyReturns program.  AirTran trying to steal frequent flyers away from Frontier/Midwest in Milwaukee doesn’t exactly lay the foundation for a strong partnership. Speaking of Milwauke, AirTran announced some new routes there this morning.

Photo Credit: Frontier

I’m trying to wonder how much this will hurt AirTran/Frontier. I’ve searched through some SEC filings, but can’t seem to find any number as to how many passengers were actually taking advantage of the partnership. So that’s one question.

From a network perspective, the two route maps seemed pretty complementary, especially if we look at Frontier from a few years ago when its only hub was in Denver. AirTran had the Eastern half of the country, while Frontier opened up the West. But now, Frontier does have better access to the East thanks to the Midwest route network (granted, Milwaukee and Atlanta are in completely different regions). So, does that reduce their need for AirTran?

I also wonder which party decided to end things. From the news release, it seems that it could be Frontier/Republic. Do they think that they need AirTran less than they did a few years ago? Though I have to think the new intense competition between the two in Milwaukee was the big driving factor.

What do you think? Leave your thoughts in the comments.