Monthly Archive for August, 2010Page 2 of 2

Virgin America Heads to Dallas

Published
by
Dan Webb
on August 12, 2010
in Virgin America
. 0 Comments

When I last spoke with Virgin America CEO David Cush in June, he said that one could expect the airline to focus on mid-con flying to business markets. So, it’s not that big of a surprise when Virgin said on Tuesday that they would be coming to Dallas. In Decembere they’ll have two dailies each to LAX and SFO.

Now, the announcement is a couple of days old (sorry), so I will keep my thoughts short here.

Both markets are dominated by American, who can justify a very frequent schedule (especially to LAX) thanks to the fact that about two-thirds of its traffic on both routes are coming from other parts of their network. More passengers means more flights, and common sense would dictate that it creates a better schedule for O&D passengers, helping American (in theory) exact a revenue premium.

So how does Virgin compete here? As always they can show off their product, which is superior to American’s, especially in the back of the bus (in my opinion). Plus, I would like to make the wild guess that the two airlines are competing for slightly different passengers. As I said earlier, a lot of American’s traffic on these routes is connecting passengers. I would also venture to guess that many of the O&D passengers on American are based in Dallas. Virgin America, on the other hand, is a West Coast airline. That would at least be a (slightly) educated guess from me.

But we’ll see how American responds. The last LCC to try competing here was AirTran on DFW-LAX…and uh, they don’t fly it anymore. It is of course in American’s interest to suppress competition – especially considering they will most likely be facing off with Southwest in 2014 when the Wright Amendment restrictions are lifted.

More important than this one route, though, is Virgin America’s financial performance – and we will all get to take another look at that soon. Right now the DOT is scheduled to release Form 41 financial results on September 20 – and Virgin usually shares its results a bit earlier than that. The carrier posted a loss in the first quarter, albeit a smaller one than the first quarter of 2009. Virgin has said a full-year operating profit in 2010 can be expected. Generally the second and third quarters are its best – so these results will be interesting to examine.

The Dulles-National Shuttle: Great Service From United

Published
by
Dan Webb
on August 12, 2010
in United
. 4 Comments

For some reason or another, my thoughts on my first trip on United got a good amount of traffic. It included a couple of minor complaints. So I think it is only fair to write about a good experience I had on United on the way back from Oshkosh, now two weeks ago. (I’m almost done playing catch-up, promise!)

After an exhausting (but very enjoyable) few days covering Oshkosh, it was time for me and Jon Ostrower aka Flightblogger to head home to DC. The first leg of our journey was a quick hop from Appleton to O’Hare on United Express, operated by an ERJ-145 in ExpressJet colors. The flight was good – hell, the pilots up front were some of the nicest I’ve seen on any airline all year. They thanked the passengers for flying United more than any United employee did. (Just sayin’.)

Next up was an A319 flight to National (DCA). Unfortunately, my upgrade didn’t clear, but I was seated in Economy Plus. Plus, I was in seat 12A to boot, which has no seat in front of it. Add an empty middle seat and it was pretty nice! The flight went very smoothly – I was very happy that the captain had Channel 9 on, which I listened to during taxi and the first 15 minutes of flight, then I switched to music.

Once I noticed we had started our descent, I went back to Channel 9 – and the bad news began to come in. The weather had not been kind to National, apparently, and things were moving very slowly at the airport. The flight was placed into a holding pattern. It soon became clear that we didn’t have enough fuel to wait it out, so the decision was made to divert to Dulles.

Of course, the cool thing about Channel 9 is that you get to hear about this at the same time as the crew. But for those who weren’t listening, the captain and first officer were constantly updating passengers. Yeah, it wasn’t great news, but it was nice to be kept in the loop.

After landing at Dulles, we were first told that we wouldn’t be able to deplane. But a few minutes later we were told that a jetway operator was found, and people could get off if they wished, but checked luggage would have to be retrieved at National. This news made people happier, and most passengers decided to leave.

I wasn’t sure what to do – so I consulted with Jon. In the end we concluded that we would wait it out and fly to National. A cab from Dulles to downtown DC takes awhile and is expensive, anyway. Plus, let’s be honest – you have to earn some airplane dork points for being on an IAD-DCA flight. So we waited it out.

In the meantime, the flight attendants came through the cabin offering coffee. I asked for water and received it very quickly.

Soon enough, we were off on our way to National – never going higher than 7,000 feet. It was a cool, short little flight that I’ll remember for awhile.

Anyway – I just wanted to say that the crew on United flight 626 on July 29 did an awesome job. Despite having to deal with some annoying weather conditions, they never lost their cool. The pilots did a fantastic job of keeping everyone informed, and the flight attendants kept on taking care of passengers – with a smile, no less! Color me impressed.

SWA-shkosh

Published
by
Dan Webb
on August 10, 2010
in Southwest
. 3 Comments

Now that I am finally back in Rhode Island, I can catch up with blogging a bit. So let me tell you about my second trip to Oshkosh. Yes, second. Southwest was going to have a presence at the show, but after the Flightglobal team headed back home. So I decided to come back.

Basically, on Thursday, July 29, I flew back to DC from Oshkosh (well, Appleton), and ended up getting home about midnight (more on that adventure tomorrow). After showering and doing a quick load of laundry, I got about three and a half hours of sleep, woke up, took the Metro to Union Station, and was on the first MARC train to BWI for my flight to Midway. The ferry flight to Oshkosh was leaving early on Saturday morning, so getting to Chicago on Friday was a must. I figured I might as well take one of the first flights out and explore the city, as I had never been before.

Anyway – let’s talk about the event. Southwest flew a new (only about a month) 737-700 up to Oshkosh for the day on Saturday. The aircraft, N948WN, was even decked out with a special decal for the occasion.

Attendees were then able to take a tour of the aircraft, primarily the cockpit. Southwest had a bunch of pilots who have been working on RNP explain the technology and its financial, operational, and environmental benefits. After the cockpit tour, attendees would walk through the cabin and exit through the rear, where Southwest had a tent set up with free swag.

For most of the trip, I was wondering what was the reason for doing this. I mean, it was fun, but why dedicate time and money to AirVenture? (Brett Snyder aka Cranky already took a stab at this on his BNET blog.) I can think of a couple of reasons on my own.

Publicity

You’re reading this blog post, right? Check.

Reaching a Huge Group of Plane Dorks

Attending Oshkosh is a great way to reach out to airplane dorks across the country. The show has a couple of hundred thousand visitors every years. EAA tells me that in 2008, about 73% of the visitors are not from Wisconsin, so there are people from all over. And by walking around the show, you can see there are plenty of age groups present as well. So being at the show is a great way to reach out to a whole bunch of people in one place. The hope is, I think, that said plane dorks will be wowed by Southwest’s presence, and tell all their friends.

How Did it Work Out?

It seems that, by all accounts, this event was a success. There was always a line to take a tour of the 737. And that free swag? All gone by the early afternoon (we arrived at 8 am and left at 6 pm). Those inflatable 737s are popular! Southwest was also holding a contest for a couple of free tickets, and the form had an (optional) line for Click ‘N Save e-mails. I wonder how many new e-mail addresses Southwest picked up. And, when we headed back to Chicago, a  few hundred (rough guess) people were there to watch the departure.

It also seemed like a bit of a morale booster. Southwest had over 100 volunteers running the show (some were on the flight with me, some had arrived a couple of days earlier to get ready) and they were all wearing smiles and were proud of their airlines. The pilots seemed happy showing off all of the hard work they’ve done on RNP.

And RNP fits nicely with the show, I think. AirVenture is about innovation. And while RNP isn’t a brand new technology by any means, Southwest is making a big move here by equipping a large part of their fleet with the technology.

Meanwhile, I really enjoyed the day, as I was able to catch up with some friends at Southwest, meeting some who I had only talked to online before. Plus, my past days at the show were very busy, as the Flightglobal team was putting together a daily magazine for three days. So I was finally able to sit back and enjoy the show.

Anyway, it was great to see Southwest dedicate a day to AirVenture.

Full Disclosure Department: Southwest covered all of my flights for this trip, two nights at a hotel, and one dinner.


Some Thoughts on SkyWest And ExpressJet

Published
by
Dan Webb
on August 9, 2010
in Expressjet, SkyWest and United
. 0 Comments

I swear. I’m cursed. A big announcement always happens at the worst time for me – like during an exam period at school or, in my case last week, when I take a day off of work when SkyWest decides they want to buy ExpressJet, where the Continental Express provider will be merged into the Atlantic Southeast Airlines (ASA) division. I figure by now everyone has heard about the story, so I wanted to share some thoughts.

The news probably isn’t a huge shock to anyone considering SkyWest tried an acquisition that failed back in 2008.

So why do it again? I see a couple of reasons.

One is diversification. SkyWest’s flying is (roughly) split 50-50 between Delta and United, with a smidge of that for the small operation out of Milwaukee for AirTran. Adding another carrier to the mix helps SkyWest as it mitigates risk – if a carrier is to duck out, it represents a smaller part of SkyWest’s operation.

But this move makes a lot more sense to me if we look at this deal in the context of the Continental and United merger, which still looks on track to close later this year. For fun, I decided to figure out what regional would have the biggest share at a merged carrier, if everything were to continue as it did today. This graph is organized by parent company, so SkyWest, ASA, and ExpressJet are all rolled up into one, here.

A couple of caveats – the graph does include the 10 ERJs ExpressJet is flying for United this summer. Also, I’m including at-risk/pro-rate flying as well, which SkyWest does with some CRJ-200s and E-120s for United, and what Colgan does with its Saabs for both airlines. I figured that it can be hard to figure out how much is at-risk or under a CPA, especially with some of the smaller airlines. Which leads me to another exception – in many cases it’s a bit hard to find a very accurate fleet count for some of these regionals, so this is my best guess.

Either way – I think the point gets across. SkyWest will be a very powerful regional partner with a lot of bargaining power at a merged United, assuming it goes through. Let’s break down that 68.6% for Skywest. That’s composed of 36.7 points worth of ExpressJet, and 31.9 points for SkyWest.

So, basically, SkyWest more than doubles its presence at a merged United by acquiring ExpressJet. That makes them very powerful, and dare I say it, more irreplaceable. When all the divisions are combined, SkyWest now has over 400 regional aircraft at the combined carrier. There are other players out there for sure, but replacing that many aircraft would probably require a decent-sized order, perhaps with the cash of the mainline partner.

But what about the future of ExpressJet here? Many have (rightly) said that there are too many smaller RJs in the market and the planes just aren’t all the attractive. And the fleet of ExpressJet E135s sitting out in the desert is a testament to that. 70-seaters have been all the rage for the past couple of years.

Unfortunately, ExpressJet has a very uncompetitive fleet as they’ve been wedded to the Continental scope clause, which doesn’t allow larger regional jets. (Hence the use of Q400s.) So why buy the airline? And what happens in the future?

Well, SkyWest got a ten-year capacity purchase agreement from Continental, so they can put off worrying about it for awhile. Plus the ERJ’s are Continental’s problem – even better.

As to the future fleet, more 70-seaters are natural, but the exact future is completely up in the air right now thanks to the merger. I am very interested in how the scope clause at the new United looks. As I mentioned earlier, Continental can’t use large RJs, while United has a crapload. Scope will undoubtedly be a big issue as a single contract for both pilot groups is worked out.

Meanwhile, I wonder what the feelings are among ExpressJet employees right now. I get the sense that things haven’t been the greatest ever since the airline’s attempt to go independent didn’t work out all that nicely. On one hand, there will be a loss of seniority, but this does look like a more stable future.

Delta 757 With a Semi-Special Livery

Published
by
Dan Webb
on August 6, 2010
in Delta
. 1 Comment

I’ll be honest. It’s Friday. I’m tired and not yet recovered from Oshkosh. (Case in point – a fifteen minute nap turned into sleeping for five hours yesterday.)

So anyway, Delta has a semi-special livery. I say semi-special because it’s not the full plane, but a logo on the nose promoting a Salvador Dali exhibit in Atlanta. The aircraft is a 757-200, registered N661DN. Thanks to Brian Hammond for allowing me to use his picture from BWI!

But more regular posting coming next week. Including a trip report on my Dulles – National flight. And Southwest going to Oshkosh. And this very important Skywest-ExpressJet deal.

The Importance of Lauderdale in Spirit’s Network

Published
by
Dan Webb
on August 5, 2010
in Spirit
. 0 Comments

So this post is a bit delayed – in fact I started writing it the night I got to Oshkosh. But I’m finally writing it now!

Lately, I’ve been interested in playing around with Form 41 data. I’m slowly getting better at it. So quick disclaimer – these numbers could be off. And if anyone wants to see my original work I’d be happy to share.

Just for fun, I wanted to examine Spirit’s network, especially as it has expanded its presence in Latin America. For current times, I looked at January 2010 (the latest data on international segments). This turned out well, as I could compare to January 2005 – when Ben Baldanza joined Spirit as President (he became CEO in 2006).

So here are some interesting stats. (Well, at least I think they are interesting.)

Spirit’s domestic capacity increased about 13.9% over those five years. Latin American capacity, however, was up 309.8%. Back in 2005, Latin American flying accounted for 6.3% of Spirit’s network – it now makes up 19.4% of the network.

But another interesting factor is how important Lauderdale has been in the expansion of the Spirit network, while the Detroit hub has shrunk. Check out the growth from January 2005 to January of this year:

And finally, here are some graphs showing the distribution of the airline’s capacity. Note the growth in FLL.

Alaska Announces Bellingham-Honolulu

Published
by
Dan Webb
on August 3, 2010
in Alaska and Allegiant
. 15 Comments

Yesterday, Alaska announced that the carrier is set to launch daily service from Bellingham to Honolulu with 737-800s.

The first word that popped into my head was “Allegiant.” And I’m sure many others had the exact same thought – this announcement could be a preemptive move in response to Allegiant’s plan to enter the Hawaiian market. It does seem logical that Alaska would want to protect its Hawai’i operations from the Pacific Northwest that have been significantly built up over the past few years.

Of course, Allegiant hasn’t announced any Hawaiian routes yet, but that’s just my read on this one. Alaska’s listing of all the amenities included in the fare – like online reservations – seems like a direct shot at Allegiant. And Alaska hasn’t been afraid to go head-to-head with Allegiant in the past. More importantly, Allegiant has expressed interest in Bellingham already, if we look at this summary of a presentation given by an Allegiant executive.

Regardless of if this is a preemptive move against Allegiant or not, I’m not sure how well this one will work. That Allegiant presentation contains Hawai’i Tourism Authority data that estimates 11,271 visitors came from the Bellingham area in 2009. That comes out to about 216 travelers per week. That number makes the market appear to be a perfect fit for Allegiant’s potential non-daily service. I really do wonder if Alaska’s slated 1,099 weekly seats are a bit excessive.

Of course, the existence of a nonstop could help boost demand, but I’m just wondering if Alaska’s being a bit heavy-handed here to fend off Allegiant.

Either way, if this is truly Alaska expressing concern about Allegiant, then we’re in for an exciting few months as Allegiant continues to prepare  for its Hawai’i service.

EDIT: As has been pointed out to me in the comments, I am neglecting the possibility of Vancouver metro residents making the drive down and adding more passengers. It’s a fair point. Right now Air Canada and WestJet are each flying to Honolulu nonstop from there, with 767-300s and 737-800s, respectively. I’d be interested in knowing how much of Alaska’s and Allegiant’s Vegas traffic comes from Canada. Despite that factor I still find the move a bit on the aggressive side. I’m interested in seeing Alaska’s fares on the route and how they compare to the Canadian competitors.

United’s Interesting Economy Plus Promotion

Published
by
Dan Webb
on August 2, 2010
in United
. 5 Comments

For years, United’s Economy Plus has been pretty basic – an economy seat with a few extra inches of legroom (the exact amount varies by aircrafttype). But I discovered an interesting promotion via Twitter last week – from August 6 to August 16, those seated in Economy Plus will receive one complimentary alcoholic beverage. I found the airline’s decision to (temporarily) add some more value to the product very interesting.

This could be a one-off quick promotion to try to increase Economy Plus sales in August. Maybe August is a weaker time for sales. I honestly have no idea. As always, reading more into something than necessary is more fun, though. :D

What could be more interesting is if United ever decided to  make this (or any other additional perks – like food) a permanent feature of the product. There are a couple of benefits to such a move. United’s been very big on ancillary revenue, and this could help there.

To give a hypothetical, let’s say there’s someone flying from Denver to Seattle, and they want a drink – that costs $6. But if the free drink encourages said passenger to buy Economy Plus, that ancillary revenue turns into $49. The margin on that passenger gets even better – the only additional cost incurred by United is the alcohol, as everything else Economy Plus-related has already been paid for.

This could also be a nice perk for elites. United’s elites get free booze when they get upgraded to First with unlimited domestic upgrades. But if the upgrade doesn’t clear, they’ll most likely be in Economy Plus, so that makes the experience of elites a bit more enjoyable.

Anyway, I’m probably reading a hell of a lot into a quick and basic promotion, but I’d love it if United begins to differentiate Economy Plus a bit more and turns it into a true premium economy offering.