Monthly Archive for June, 2011Page 2 of 2

Looking at The American/Qantas Joint Business Agreement

Published
by
Dan Webb
on June 8, 2011
in American
. 1 Comment

Yesterday, American and Qantas filed with the DOT (registration required) for approval of their joint business agreement, or JBA. It’s worth noting that the carriers are not applying for anti-trust immunity (like Delta and V Australia) here “in light of the existing lack of competition between American and Qantas and the inability of American to operate its own service to the South Pacific.”

That line is footnoted, and says that American doesn’t have the aircraft, and that it is “precluded from operated nonstop services on the stage lengths for U.S. – South Pacific Services.”

That point is further explained in another footnote:

American has six Boeing 777-300 aircraft on order with expected delivery dates in 2012 and 2013 . While these aircraft have a range of approximately 9,000 miles, they will not be configured or delivered anytime in the immediate future. Nor does any plan exist to use these assets to serve Australia/New Zealand. The aircraft to be delivered are not yet committed to particular routes, and given that American is currently short on long range aircraft to serve its existing routes, American will be carefully considering where these assets will be deployed and how they will be configured. In any event, the terms of American’s current collective bargaining agreement with the Allied Pilots Association would not permit service to Australia/New Zealand. That agreement cont ains a 14:30 flight time limitation. According to block times published by Qantas, service from Sydney to Los Angeles has an elapsed time of 14:35 to 15:00 depending on equipment type flown. Service from Sydney to Dallas/Fort Worth has an elapsed time of 15:25.

There are a few interesting things here. First – apparently American has ordered another 777-300ER! It will be interesting to see where those are deployed.

I also found the limitation on flight time to be interesting, frankly because I had forgotten about its existence! But based on my research, it appears that very long-haul flights are possible. For example, American cites a 14:35 and 15:00 hour elapsed times for a transpacific flight (these are the block times for Qantas’ 747 and A380 LAX-SYD flights, respectively). But American’s flight from Chicago to Delhi is 14 hours, 40 minutes – longer than one of Qantas’ flights to Australia. What gives?

Well, it according a news release from the Allied Pilots Association (APA) from a few years ago, their contract with American “contains language governing extended long-haul flying…on a city pair-specific basis only.” Of course, that language can lead to some drawn out negotiations, which is exactly what happened when American was looking at Dallas – Beijing flights.

So, yes, American’s current contract with the APA doesn’t allow for free reign on American’s part to add very long-haul routes. But it does appear that some kind of arrangement can be made in specific cases to allow for such flying. Granted, negotiating specific routes could certainly be a cumbersome process, and there’s no guarantee that such negotiation will be fruitful.

Maybe this will be hammered out when the APA and American negotiate a new contract? (Though who knows when the two sides will reach a tentative agreement?)

Delta Seeks Flexibility on Haneda Slots

Published
by
Dan Webb
on June 6, 2011
in Delta
. 5 Comments

Delta Air Lines is seeking some flexibility on the slots it uses for its service from Detroit to Tokyo-Haneda…this according to a filing with the Department of Transportation (DOT).

When the DOT awarded Haneda slots (two to Delta, and one each to American and Hawaiian), it imposed 90-day dormancy conditions on them. While I’m speculating here, DOT would not like to see a carrier win a bid for slots and not use them, especially if there’s the possibility of other carriers using them.

Anyway – Delta wants to be exempt from those conditions until June 1 next year. The carrier claimed in its filing that demand to Haneda is very week, and exempting the slots from the dormancy condition will allow Delta to “judiciously manage the re-introduction of capacity over the off-peak winter months and shoulder season in the early spring.”

Delta’s service from Los Angeles to Haneda has already resumed, and Detroit service is slated to come back on the 16th. The airline said it will operate daily Detroit-Haneda flights “for a portion of the current summer season” but it would also “temporarily reduce or suspend service until Tokyo business demand returns to more normal levels.”

Interestingly, Delta also proposed that it  ”is willing and prepared to operate the slots on an interim basis for beach market service.” Delta had also proposed Honolulu service in the original bidding process for Haneda slots – is it still interested in that market?

This has to be a very interesting issue from both sides.

If I were at the DOT, there would be a few factors that I would consider. The most obvious item is the earthquake and tsunami that hit Japan, which certainly seems like a good reason to temporarily suspend service. But at the same time, Delta had already delayed the launch of its Haneda service and had downgagued flights from 747s to 777s before the earthquake, implying that the route was not performing as well as hoped. In addition to that, both Hawaiian and United have already filed with the DOT to express their interest in picking up on Delta’s slots in case they go dormant. So what’s the best decision?

At Delta, meanwhile, what happens if the DOT doesn’t give the carrier the relief its seeking? Does Delta keep flying the route? That would let the carrier hold on to the slots, but potentially have negative financial ramifications if the market remains weak. But such a move could be worthwhile if the long-term prospects of Haneda’s profitability are good, and it also means keeping a competitor out of the Haneda market.

This one will be fun to follow over the next few days, as I’d be shocked if other airlines didn’t comment.

Anyway – Delta did have some interesting tidbits in its filing. First, the carrier said it expects the earthquake’s effects to cost between $250 and $400 million this year. Delta also noted that it “has been able to mitigate the effects on its Narita operation by increasing the mix of flow traffic through its hub.”

Delta also included some interesting graphs with its filing, showing the weakness of US-Tokyo demand, especially bookings from the US:

Virgin America Looking at an Elite Tier

Published
by
Dan Webb
on June 3, 2011
in Virgin America
. 5 Comments

When I was on Virgin America’s inaugural flight to Chicago last week, I had a chance to catch up with their CEO David Cush for about a half hour. One of the topics I was wondering about was if Virgin is looking at adding some form of an elite tier to its Elevate loyalty program.

“We’re putting a lot of thought into that, and you’ll see something on that soon,” said David.

I then asked if Virgin was considering first class upgrades to elites. He replied that “in the coming weeks, you will hear more on this, but what I will say is any elite program that we do will not include upgrades to first class. We’re very protective of our first class…we want everyone to know who buys a ticket in our first class that the person sitting next to them also bought their ticket.”

He later added that, even with no upgrades, “we’ve got some very interesting things that will come along with an elite program.”

I’m sure some might be disappointed to hear that Virgin won’t be doing upgrades to first, but it makes sense. David told me that “we have 90% load factors in first class,” so there’s not much upgrade space to give in the place. Part of that, I’m sure is that Virgin has a small cabin up front – only eight seats on both the A319 and the A320. United and US Airways have 12 first seats on their A320s, while Delta has 16.

The other reasons Virgin has a good load factor in the pointy end? First, I think they have a compelling offering. Second, I’d argue that Virgin advertises first class upgrades pretty heavily. It’s now even possible to purchase an upgrade onboard.

In the future, I should ask David a bit more about that load factor. How many are purchases of first class fares, and how many are upgrades?

Anyway, it will be interesting to see what Virgin offers here in the next few weeks.

(Finally) Another CSeries Order

Published
by
Dan Webb
on June 1, 2011
in Uncategorized
. 0 Comments

Bombardier has announced this morning that Braathens Leasing Limited has ordered five CS100 and five CS300 aircraft, with options for ten more. The aircraft will be places with sister company Malmö Aviation.

Nothing huge, but it is nice to see a CSeries order after no news for awhile.

The release says that “Malmö Aviation currently operates 12 jet aircraft and intends to renew its fleet and explore new business opportunities with its CSeries aircraft starting in 2014.” All 12 are Avros, and nine of them are of the RJ100 variety. Interesting – that’s the same aircraft that the CSeries is replacing at Swiss. (Granted, Malmo hasn’t outlined a specific fleet plan…still interesting though.)

 

Google’s Handy New Flight Search Tool

Published
by
Dan Webb
on June 1, 2011
in Uncategorized
. 2 Comments

Most here have probably already read about Google’s useful new search for flights. Simply type “flights from (city name) to (city name)” and you’ll get a selection of nonstops on the route (no connecting or direct itineraries). In addition, typing “flights from (city name)” will give you a list of all non-stop destinations from an airport. Airport codes work as well.

The one thing I’ll add to the other coverage that I have not seen (though could have missed) is that city codes can also be used for search. This feature is especially handy if your trip involves a city/cities that has/have multiple airports. For example, let’s say I’m flying from New York to Washington, DC, but I only want to fly out of Newark, so I type in “flights from EWR to WAS.”

Overall, this is a nice little schedule tool. No, it won’t replace OAG, but it’s free, easy to use, and quite accessible.