Things in the Sky

Just for fun, I decided to take a look at the on-time performance of major carriers and their regional partners in their biggest hubs since the most recent Air Travel Consumer Report was just released by the DOT with data for January. Not surprisingly, the regionals didn’t do too hot. In only one case (Mesa in Phoenix) did a regional outperform the mainline partner.

I originally got the idea to do this small bit a research when Brett Snyder wrote on his BNET blog that on-time results should be sorted by marketing carrier, and I completely agree. In some cases, there can be some big difference. For example, United mainline had a 76.1% on-time percentage in San Francisco, but SkyWest, who had 20% more flights, only earned a meager 53.2% percentage.

But some changes do need to be made before it would work to report results by marketing carrier. Right now, a lot of regional carriers are missing, just because they’re not required to do so. Currently, only “air carriers that have at least one percent of total domestic scheduled-service passenger revenues” need to share their numbers with the DOT. The only regionals who qualify there are American Eagle, ASA, Comair, Mesa, and SkyWest. ExpressJet and Pinnacle are also included in the report, but only because they share their numbers voluntarily.

As a result, it would not make sense to change the report as things stand today because it would unfairly report results. For example, it’s quite easy to check out American’s performance because Eagle is a huge operation. Sure, Chautauqua is missing, but that’s only 15 ERJs. On the other hand, it wouldn’t work to report a single US Airways number because the only operation that is in the report is Mesa out of Phoenix. It’s hard to look at the East network as Air Wisconsin, Chautauqua, Colgan, Piedmont, PSA, Republic, and Trans States are all missing.

It is useful, of course, to know how well specific regional carriers operate, but not as much for consumers, for whom the report is made. Let’s be honest here – the aircraft wear the mainline carrier’s colors, and the flights are always booked through the major carrier. It seems only fair to group all the results by major carrier. But for that to work either more airlines need to report on a voluntary basis, or the DOT needs to change the requirements on sharing results.

Honestly, this wouldn’t be a big issue for me if the airlines didn’t promote their on-time performance like United has been doing (the same can be said for US Airways last year). But, in United’s case, over a quarter of their domestic capacity for 2009 (as measured by ASMs) was excluded from that number. Does that really make any sense?

Anyway, you can check out the results I compiled here. (Unfortunately, Google Docs lost some of my formatting from Excel.)

Today IATA released some December and full-year traffic results, and the numbers weren’t exactly the prettiest. The organization reported that full-year passenger demand for 2009 was down 3.5% compared to 2008. IATA chief Giovanni said, “In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen. We have permanently lost 2.5 years of growth in passenger markets and 3.5 years of growth in the freight business.” Looking ahead to 2010, he remarked that the “airlines face another spartan year focused on matching capacity carefully to demand and controlling costs” and will have to deal with “some enormous challenges.”

Revenues aren’t exactly the best either, with yields down 5-10% compared to 2008, though there was some improvement towards the end of the year. “Revenue improvements will be at a much slower pace,” said Bisignani.

But data for the end of 2009 looks a bit better – IATA reports that demand in December increased 4.5% year-over-year. So hopefully we can all be optimistic about 2010.

The ATA released its yield data for December, and, frankly, there’s not a whole lot to say other than that we’re seeing improving trends continue. Comparisons made to the same month in the last year continue to improve. Of course, one big reason is because comparisons are now easier as yields were starting to decline a year ago, and the comparisons will only become easier.

But it should be noted that for the first time in months, we have some positive growth. Yields for Atlantic flying were 2.3% higher in December 2009 than for the same month a year ago. Of course, Atlantic yields declined the most in December 2008. But growth is growth.

The twelve-month moving average of yields shows improvement as well. Not surprisingly, there was in increase for the Atlantic. But for other regions the decrease in the moving average was less than the prior month.

So, like past months, we continue to see improvement, and year-over-year comparisons should look pretty good over the next couple of months, if only because they’ll be based of 2009′s crappy numbers.

You can see the data here.

Back in April, I wrote a post entitled “Should Airlines Fear High Speed Rail?” and I discovered that a blog called “Trains for America” picked it up about a month ago and brought up some interesting points in response to my post. Unfortunately, due to my vacation and other things, I really haven’t had the opportunity to respond until now. So, let’s get to it!

First, the author writes:

It’s certainly well-written and interesting, but, naturally, holds views rather divergent from TFA. And geez, take a look at some of the other posts. How come no one talks about rabid “plane-fans”?

Well, thank you for the compliment, but what does that last question mean?

Anyway…

Let’s just ignore for now the many times that airlines have received large bailouts from the federal government.

This statement is probably a response to my point that airlines operate on a profit-and-loss basis, while government-supported rail might not have to.

But many bailouts? The last large bailout I can think of was the one in response to the September 11th attacks, and the only constant federal aid provided to airline routes that I can think of right now is the (non) Essential Air Service program. Nevertheless, the author seems to assume that I support government aid to the airline industry, and in most cases, I don’t. If an airline came up to the government today and asked for financial assistance due to the weak economy, I wouldn’t support it.

Next:

And yes, high-speed rail and trains in general should be supported by government; the service rail provides to communities large and small is more equitable, clean, and efficient than air and car travel.

I think a good discussion could be had about the “clean” and “efficient” aspects, but “equitable”? That’s just one of those vague words that can work in some political arguments (Mr. Webb, how dare you not support a transportation system that isn’t equitable?), but doesn’t really say much, because it can mean different things to different people.

The author goes on:

The mistake that air carriers in the past, including, as the blog mentions, Southwest, have made is that they view high-speed rail as competition rather than an opportunity. Let conventional/high-speed rail take over these short/medium haul routes and make sure that there are connections to the airports. This way, passengers can be funneled into the more profitable long-haul routes and the carriers don’t have to subsidize the connecting flights.

Just let them “take over”? How is this supposed to work out? Are the rail lines supposed to make the flying unprofitable by using the good ol’ government ATM as funding? (Clearly, the airlines should apply for bailout money at this point, in order to project American jobs. )

The blog then goes on to use the example of Air France-KLM considering getting more involved in high speed rail, which is absolutely fine. They’re a free business, if they think it’s a smart investment, go ahead!

But on to the comments, which were very interesting (especially one from Allan), but I’d like to focus on the points made by the commenter Alex, who writes:

Like the “roads pay for themselves” argument, I am tired of the airlines pay for themselves argument. Weren’t the airports built by government?

Alex seems to have screwed up “airlines” and “airports,” as I am talking about the latter. While local governments do help pay for airports, they don’t start up airlines to use the airport, unlike government-subsidized rail service. And I’m all for attracting more private investment into airports, which is why I’m following what happens at Branson’s new airport. But anyway, if rail was to follow the system I was talking about, governments would help build stations and rails, but wouldn’t start up service, too.

Alex also writes:

Do airline landing fees really cover the full cost of maintenance, upgrades and renovations? I don’t think so, because flying from any Asian, European, or even a Canadian airport like Vancouver, and landing at most American airports is like time traveling back 20 or 30 years.

Clearly, Alex hasn’t been looking at terminal renovation projects here in the States (JetBlue’s new JFK terminal comes to mind). But Alex’s points make the argument moot, anyway, as he suggests that airports can’t cover their costs. But if high speed rail needs government help, then it can’t cover it’s costs either. Hmm.

And he continues:

What happens when oil goes back up to $100 or $120 a barrel. Sure, airlines will always be around for long distance travel, but for shorter hauls? Will they be around? Shouldn’t we be planning for the future? Why is this country incapable of looking ahead more than 2 or 3 years!?

I would simply say that this industry always has to look ahead more than two to three years, especially the aircraft manufacturers, since designing and building a new airliner is no quick task. And clearly the firms are planning to have airlines stick around in the short-haul market, just look at the Bombardier CSeries (yes, it actually has some decent range, but Swiss is going to use it to replace Avros). And obviously the aircraft manufacturers are also concerned about fuel efficiency to save costs. Why else would Bombardier be sticking a shiny new geared turbofan that is supposed to save on fuel on that aircraft?

Before I close, I’d like to note that I’m not an anti-high speed rail person (I do think it can work in some markets), and that I’m not writing against it just because I love airlines. If there’s a great high-speed rail line out there that provides good service to consumers, then that’s fantastic. I’m just weary of governmennt-funded high speed rail projects turning into things that unfairly affect other forms of transport.