Monthly Archive for September, 2011

Chart of the Day: JetBlue’s Anchorage Service

Published
by
Dan Webb
on September 29, 2011
in JetBlue
. 6 Comments

Here’s your random factoid of the day…

I love the DOT Form 41 database – it contains a treasure trove of data that will keep an airline dork occupied for a very long period of time! Recently, I was playing around with the data set that contains domestic traffic information. While I usually use it to examine passenger capacity and traffic, the data set also includes freight.

After doing some playing around — I found something very interesting about JetBlue’s service from Anchorage to Long Beach, which launched earlier this year – the route is, by far, dominant in the JetBlue domestic network when it comes to cargo. Note the chart below is listing routes in the direction they are flown. According to the data JetBlue reported to the DOT, there wasn’t any cargo carried in the Long Beach – Anchorage direction.

 

A (Very Long) Chart of the Day…

Published
by
Dan Webb
on September 27, 2011
in Southwest
. 6 Comments

…is the change in (scheduled) departures at some Southwest cities when one compares June 2011 to June 2008. The number of cities with double-digit declines in depatures (some over 20%) surprised me. Of course, during the same time period Southwest has added service to a few new cities, including Minneapolis, New York (LaGuardia), Newark, Boston, Panama City, Charleston, and Greenvile-Spartanburg.

Spirit Aims to Expand Colombia Service

Published
by
Dan Webb
on September 23, 2011
in Spirit
. 0 Comments

Spirit Airlines is pursuing additional frequencies to expand its service to Colombia, and hopes to use this potential new flying as a way to expand it service to other South American destinations…this according to a Spirit filing with the DOT last week (yes, I’m behind).

The airline’s application for new service comes after the United States and Colombia signed an open skies agreement earlier this year.

As part of transition period to open skies, there are thirteen routes to Colombia that are stills subject to frequency restrictions. But 42 new frequencies for those routes (half available now, half available on January 1) are now available. Spirit is applying for 14 frequencies to add two new flights from Ft. Lauderdale to Bogotá – a route the carrier currently flies once daily.

In addition to the expanded Colombia service, Spirit sees the potential new Bogotá service as an opportunity to expand further in South America. The carrier noted in its DOT filing requesting the frequencies that it “plans to use the 14 frequencies to operate two additional daily flights between Fort Lauderdale and Bogotá and continue on to the beyond points, Quito and Guayaquil, Ecuador.”  (Spirit’s also made a filing about the Ecuador service – that can be found here.)

Spirit also said in its filing that if it receives the frequencies it will also be able “to operate a daily one-stop via Bogota to Lima.” Spirit said it “operates a daily non-stop during May through August, but only a weekly roundtrip from September through April. The one-stop will enable Spirit to offer more seats and a consistent annual product in that market which will enhance competition.”

A Quick Look At Virgin’s 2Q Financials

Published
by
Dan Webb
on September 20, 2011
in Virgin America
. 1 Comment

Last week, Virgin America released its second quarter financial results, and recorded $21.7 million net loss for the period, wider than a $15.5 million loss in the same quarter one year prior.

Operating loss, meanwhile, slipped from $430,000 to $6.0 million, which resulted in 1.8 point decrease in operating margin, from -0.2% to -2%. But Virgin did add that its “mature routes (those flown for more than 12 months) were solidly profitable on an operating basis for the quarter.”

The San Franscisco-based airline’s unit revenues, as measured by revenue per available seat mile, increased 11.9% year-over-year, but this increase was paired with a 14.1% rise in CASM. Worthy of note is an 8.2% year-over-year increase in CASM excluding fuel. Virgin says this increase is due to “investment in the Company’s growth (training, people and aircraft in modification).”

There’s really not much to say here other than that hopefully Virgin’s financial results will begin improving…and soon…as markets like Chicago and Dallas continue to develop.

The one bright spot I can find is Virgin’s operating margin change – a decrease of 1.8 points – was less than most airlines. Then again, many of the other airlines that were reporting declining margins were still reporting operating profits – just smaller ones.

Rate These Airline Ads

Published
by
Dan Webb
on September 19, 2011
in Uncategorized
. 14 Comments

Over the weekend I was skimming through the latest issue of Businessweek and was able to find four airline ads from Delta, Lufthansa, Singapore, and United.

Here’s what I found interesting — every airline other than United was showing off its onboard product (two-class RJs, Wi-Fi, and suites). United, however, decided to tout its network.

I’ll hold my opinions for now…which airline(s) did the best job?

Looking at Alaska’s Latest Investor Update

Published
by
Dan Webb
on September 16, 2011
in Alaska
. 0 Comments

Alaska Airlines has slightly altered its Boeing 737 orderbook, and appears to have made some decisions about the configuration of its future 737-900ER aircraft….this according to its latest investor update filed with the SEC.

The Seattle-based carrier is still slated to receive 25 new 737 aircraft from 2012 through 2015, but Alaska has converted two 2012 deliveries from the 737-800 to the 737-900ER. The airline, which originally ordered the 737-900ER in January, will now receive 15 of the type through 2015.

Thanks to the order conversion, Alaska will now receive its first 737-900ER a bit earlier than planned. The airline was originally to begin receiving 737-900ERs in 2013. Alaska also noted in the filing that its 737-900ERs will seat 181 passengers. Alaska had previously said the type would seat 178 to 184 passengers.

Also worthy of note is the airline’s foretasted third quarter fuel price of $3.22. That’s higher than the number shared by Alaska a month ago, but considering that I wrote about it last month — I wanted to point out that Alaska’s fuel price estimate includes a 3 cent benefit from settled hedges, while the airline had previously estimated a 2 cent cost a month ago.

Some Interesting IFE News for Virgin and Southwest

Published
by
Dan Webb
on September 14, 2011
in Southwest and Virgin America
. 0 Comments

This week, we’ve seen some interesting/exciting news on the IFE front that involves a couple of domestic carriers…let’s take a look.

First, Virgin America is planning to introduce a new IFE system to its customers starting late next year. The San Fransisco-based airline has selected BoardConnect from Lufthansa Systems, which “replaces complex legacy in-flight entertainment solutions via an onboard WiFi network,” Virgin said. The system features “a larger, high-definition touch-screen seatback monitor with full WiFi connectivity…along with the ability for flyers to use their own personal electronic devices to connect to the system pre-flight, in-flight and post-flight.”

Virgin already has a great IFE system across its fleet that is (in my opinion) unmatched in the domestic market. So, why upgrade? If I had to guess, I’d say that Virgin wants to stay as far ahead of the competition as possible, especially as carriers like American and United are making some improvements when it comes to IFE. Plus, Virgin is always advertising its superior guest experience, and a new IFE system only bolsters that.

But  it appears there are some cost benefits here as well. As Virgin notes in its release:

Most current IFE solutions are complex and hard-wired, making them expensive to purchase and install, difficult to maintain and often inflexible in use. Instead of connecting every single seat to the content server through several miles of cables, BoardConnect requires just a few access points.

Lufthansa Systems also outlines some of the cost savings of the system on its website, including a smaller investment up front and a 50-70% savings in maintenance cost compared to legacy systems. Lufthansa Systems also outlines that “the simple fact that less wiring is needed and more lightweight components are used results in a significant overall weight reduction, which translates into real fuel economy.”

“By skipping the wires, we save about 1,000 pounds per aircraft on Virgin America’s Airbus A320s which in turn saves a tremendous amount of fuel,” said Dr. Jörg Liebe, CIO Lufthansa Systems.

Anyway…I’m looking forward to giving this new system a whirl one day. A few months ago, Lufthansa Systems posted a video on YouTube about the new system that should give you an idea of what we could see in the future:

YouTube Preview Image

The next interesting bit of news comes from Row 44, which on Monday announced a new service for live Internet Protocol television (IPTV) that passengers could view on their own devices starting on January 2. That’s great, but the most interesting part of the news release was buried at the end:

Row 44 customer Southwest Airlines added, “Row 44 is a great partner for Southwest, and we are excited about the live television product inclusion in the Row 44 platform,” said Dave Ridley, Southwest’s Chief Marketing Officer. “Southwest looks forward to offering this content onboard our WiFi enabled aircraft later this year.”

Granted, Southwest already has WiFi on some aircraft…but this is an exciting leap into the world of IFE for Southwest! The only downside here is that power outlets cannot be found on Southwest flights. Granted, the airline isn’t as focused on transcon flights as much as Virign, for example, but my laptop wouldn’t last very long streaming video over WiFi.

Either way…the airline that has historically been known for frills is getting less…er…frilly.

 

Virgin America’s Slot Swap Comments

Published
by
Dan Webb
on September 12, 2011
in Uncategorized
. 3 Comments

I’m back with more airline comments on the proposed slot swap between Delta and US Airways — and this time I’m taking a quick look at Virgin America’s comments. The San Francisco-based airline made multiple arguments in a filing with the government about the proposed deal, but I found a couple particularly interesting.

The first intriguing argument brought up by the airline is the trouble small/new airlines have when trying to get into major airports. Virgin noted that a “vexing problem” has been the development of “effective system to assure that new entrant and limited incumbent carriers could obtain slots” at capacity-controlled airports like LaGuardia, JFK, and Newark.

Virgin said the slot swap gives the government “an opportunity to begin to address this age-old problem” by creating what Virgin calls a “Strategic Slot Reserve.” The airline proposed that 32 LGA slots and 16 DCA slots be designated for the reserve. These slots would be distributed to carriers, but in case that not all of the slots are purchased by new entrants/limited incumbents, current carriers at the airports could use them “on an interim basis.”

The other interesting point brought up by Virgin is that the carrier says the government should address “monopoly conditions
at Newark in the final decision in this proceeding by confirming that the FAA would accept a petition for waiver from a successful bidder for LGA slots to use those slots to provide Newark service.”

Virgin also noted that “high concentration, high fares and little competition is a more significant competitive problem at Newark than at LaGuardia.”

Very interesting stuff. Is this a play for Virgin to try to get into Newark? If Virgin were to bid on LaGuardia slots, it would not be able to use them for California service due to the airport’s perimeter rule. The carrier has also expressed interest in the market before.

Of course, none of this matters if the DOT doesn’t buy into Virgin’s arguments. Interesting stuff, though.

Southwest to Drop Boston-Philadelphia Service Next Year

Published
by
Dan Webb
on September 8, 2011
in Southwest
. 5 Comments

Southwest is set to cease service between Boston and Philadelphia…this according to the airline’s website:

The move comes after Southwest’s schedule update in July, which included the termination of service from Philadelphia to Jacksonville, Manchester, Pittsburgh, and Providence this January.

But when these changes were announced Southwest also noted capacity reductions on the BOS-PHL route – from eight to six flights in January, followed by the loss of one other frequency in February.

The drop in service is certainly interesting, as the market seemed ripe for the traditional “Southwest effect.” And Southwest did indeed stimulate the market.

According to the DOT’s Consumer Air Fare Report, there were 1835 daily passengers in the market with an average fare of $121.92 in the fourth quarter of 2010. In the same period a year ago, there were 497 passengers paying an average fare of $346.90.

US Airways’s market share slipped during the same period, from 88% in the the fourth quarter of 2009, to 51.4% in the fourth quarter of 2010.

It should also be noted that according to the same report, that Southwest’s average fare was 13.1% lower than US Airways’ average fare.

Of course, now it will be interesting to see how US Airways’ fares next year change in response to this move.

By the way…this is the second time US Airways has been able to shake off an LCC on this route. AirTran had previously given BOS-PHL a try.

Allegiant’s Interesting Slot Swap Comments

Published
by
Dan Webb
on September 6, 2011
in Allegiant
. 1 Comment

Earlier this year, the government tentatively approved the second application from Delta and US Airways to swap slots at New York LaGuardia (LGA) and Washington National (DCA). Like any other major policy move, airlines and other interested parties took advantage the opportunity to comment on the DOT’s approval.

Small carriers with a limited or no presence in the market(s) generated a significant amount of the feedback. That’s not too shocking, as the slots to be potentially divested at the airports will only be be allocated to such carriers. I’ve had a chance to review some of the carriers’ comments, and I found Allegiant’s to be very interesting.

The Las Vegas-based carrier said it would be interested in acquiring some of the divested LGA slots, adding that it “does not consider service to Newark or JFK an adequate substitute for service to LGA.” Allegiant, however, disagreed with the way the government was planning to bundle the divested slots, saying that it “would not be in the public interest, and Allegiant urges the FAA not to take it.”

The FAA outlined in its tentative approval that slots at each airport would be divested in bundled of eight slot pairs (16 total slots). Two of these bundles would be available at LGA, while only one would be available for new DCA service. According to the agency, “this arrangement would be preferable to dividing the slots into smaller packages that could cause underutilizations or inefficiencies—at gates and terminal facilities, with aircraft and in staffing.” But the FAA also said that it sought comments on this idea.

In response, Allegiant said the idea “will not encourage entry into the LGA market by new carriers. It will have precisely the opposite effect, as only those carriers already having a foothold at LGA can reasonably be expected to take on 16 slots in a single transaction.”

Allegiant proposed an alternative on how to bundle the slots:

At a minimum, one of the LGA bundles should be subdivided into eight bundles containing one arrival and one departure slot, or four bundles containing two pairs of slots, or some combination thereof. Some of these small bundles should offer slot pairings conducive to LGA RON (remain overnight) operations (e.g., 2130 arrival paired with 0700 departure), while others should offer pairings conducive to LGA turnaround operations (e.g., 1100 arrival paired with 1230 departure). The use of smaller, discrete bundles will make it possible for the largest number of carriers with differing types of operations to participate; carriers would be free, in any event, to bid on any or all types of bundles if desired.3 In this manner, the pairings will appeal to the broadest spectrum of new entrants and limited incumbents, best serving the public interest and advancing all – rather than just some – of the statutory objectives identified above.

“It is neither accurate nor appropriate for the FAA to presume that a larger bundle would automatically benefit a purchasing carrier,” Allegiant said.

There were a few other interesting comments on the slot swap made by airlines, and I hope to review a couple others over the coming days. And, of course, it will be fun to watch if/how the government will adjust its approval based on this feedback.

About that Airline Customer Service Study…

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

Earlier this week, STELLAService posted a blog entry that summarized airline customer service on August 26, the day before Hurricane Irene began seriously impacting the East Coast. The group utilized phone hold times, Twitter responses, and Twitter response times as metrics to measure customer service.

STELLAService’s idea is a perfectly valid one. Having independent third parties look into customer service for any industry is often a positive for consumers. Unfortunately, the group’s methodology for some airlines appears to be a bit…flawed, especially when it comes to Twitter.

Based on some searching, it appears that STELLAService utilized a bunch of Twitter accounts to perform their experiment. While STELLAService would not confirm what questions they sent, some tweets sent while the study was taking place seem quite suspicious. As the screenshot below indicates, there were four identical tweets sent to airlines within three minutes of each other.

This question, if it is indeed one posted by STELLAService, is dubious at best. The number of passengers connecting in South Carolina is probably small. Meanwhile, JetBlue, and AirTran received this question, even though none of these airlines fly to South Carolina.

There are some other issues with the study. Note that as part of the study, tweets were sent to @aairwaves and @continental, both of which are defunct Twitter accounts. (This fact is noted on said Twitter pages.) AirTran only has one tweet from 2009, though the Twitter page says nothing to indicate if someone in monitoring it or not.
Questions aside, there appear to have been some issues (in my opinion) with how the results were reported. Here’s what STELLA originally reported:

What’s also interesting is that the study claims that United/Continental didn’t reply to any tweets. Apparently United did reply to the tweets sent to the @continental account, but used the current @united handle instead. (That seems perfectly logical – one would want to move customers to the new account.) Questions sent to the @united account did not receive a response, apparently, so STELLA just reported that, making United’s results look worse than reality.

STELLA has since updated its chart to note that United replied to queries. Meanwhile, American was completely absent in the updated chart. The group noted that “the tweets sent to American Airlines were sent to an account they deem to be inactive, so we have removed their Twitter findings.”

As a data junkie, I love any studies that try to add more insight about the airline industry, but this study examined social media response times is a bit lacking. First, if I’m right about my guesses about the tweets, some identical questions were sent to airlines. That’s not a huge problem, except when said questions aren’t applicable to some carriers. Second, defunct Twitter accounts were used in the study, potentially skewing results.

That said, not all of the results seem that far off. It’s not shocking to see Delta, Frontier, and JetBlue in the top three, for example, considering the investment those carriers have placed in social media. And I do look forward to more studies like this, especially those that incorporate the responsiveness of airlines over social media channels.

EDITED on 9/5 — I had incorrectly stated that Spirit did not fly to South Carolina.