Archive for the 'US Airways' Category

US Airways Reaches Deals With AA Labor Unions (Update 1)

Published
by
Dan Webb
on April 20, 2012
in American and US Airways
. 2 Comments

While there were plenty of  news stories yesterday about this topic yesterday, US Airways noted in an SEC filing this morning  ”that it had reached agreements for collective bargaining agreements that would govern the American Airlines employees represented by the Transport Workers Union, Association of Professional Flight Attendants and Allied Pilots Association.”

In a joint statement, the TWU, APFA, and APA said “a merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process and restore American Airlines to a preeminent position in the airline industry.”

“Our intention would be to put our two complementary networks together, maintaining both airlines’ existing hubs and aircraft, and create an airline that could compete successfully with United, Delta and other carriers within our industry,” said US Airways CEO Doug Parker in an employee letter filed with the SEC.

Parker says in his letter that a merger with American would lessen the number of job losses, writing that “in American’s standalone strategy, over 13,000 employees at American will lose their jobs. Our merger contemplates saving at least 6,200 of these positions.”

The Allied Pilots Association has more details on what a combined airline would look like:

First and foremost, the combined carrier will be branded American Airlines, based in Fort Worth Texas and headquartered at CentrePort. It will be comparable in size and scope to Delta and United, with a robust domestic network capable of supporting significant international expansion. American Airlines’ relationship with oneworld will be maintained and strengthened. All of American Airlines’ aircraft orders with Boeing and Airbus will proceed. The former US Airways route system will be realigned with the American Airlines system to add more cities, more markets and better frequencies. The new American Airlines, under a lean, energetic and highly capable management team, will be able to compete on an equal footing to win back high-value customers. On the East Coast, which is the largest and most lucrative airline market in the world, American Airlines will go from No. 5 to a strong No. 1. In the Midwest, we will go from No. 4 to No. 1. In Miami, our dominance to South America will be enhanced by stronger East Coast traffic flows. For the first time in years, American Airlines will be in a position of strength in Chicago.

Doug Parker’s letter is below:

Dear Fellow Employees –

Today, we filed a statement (a form called an 8-K) with the Securities and Exchange Commission disclosing that we have signed agreements with the three unions that represent nearly 55,000 American Airlines employees. These unions are the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American Airlines’ mechanics and fleet service employees. Shortly after our disclosure, these three unions issued a public statement announcing their support of a US Airways-American Airlines merger and that they have agreed to terms that would govern collective bargaining agreements for their members at the merged airline. I want to explain to you why we have done this and what it means.

First of all, today’s news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR’s creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.

All of you have heard me talk about the benefits consolidation has created for US Airways and our industry. You have also heard me say that US Airways does not need to merge with anyone, as evidenced by our team’s outstanding results. That is still the case, but after studying American Airlines’ current state and their future plans, we have concluded that a merger with American, while they are undergoing their bankruptcy restructuring, represents a unique opportunity that we should not ignore. These beliefs are shared by the three American labor unions and we are delighted to have their support. Like us, they recognize the potential of a merger to improve the current and future careers of both airlines’ employees.

Combining American Airlines and US Airways would create a preeminent airline with the enhanced scale and breadth required to compete more effectively and profitably. Our intention would be to put our two complementary networks together, maintaining both airlines’ existing hubs and aircraft, and create an airline that could compete successfully with United, Delta and other carriers within our industry. A merged airline would provide competitive, industry-standard compensation and benefits, as well as improved job security and advancement opportunities for all employees of the combined airline. Most importantly, in American’s standalone strategy, over 13,000 employees at American will lose their jobs. Our merger contemplates saving at least 6,200 of these positions. For the US Airways team, the agreements we have reached with the unions representing employees at American would also provide enhancements to the compensation and benefits currently in place here.

Today is one step in what will be a much longer process. For now, it remains business as usual. We must continue to provide the outstanding service that customers have come to expect from US Airways.

In the meantime, if you have any questions, please stay connected via Wings (www.wings.usairways.com) and we will continue to provide updates on our progress. Thanks for all that you continue to do to take care of our customers. Together, whether a merger is our future or not, we will continue to run a great airline and have a bright future ahead of us.

Sincerely,
Doug

Updated at 10:16am with more details on combined carrier.

US Airways On Capacity Flexibility

Published
by
Dan Webb
on November 30, 2011
in US Airways
. 0 Comments

US Airways has limited flexibility when it comes to cutting capacity further should conditions warrant, according to a presentation by CFO Derek Kerr.

“We don’t have a lot of flexibility to pull out capacity because we have fleet minimums in our pilot contract,” said Kerr at the City 2011 North American Credit Conference on November 16, noting there was a US Airways (East) and an America West (West) minimum.

“We’re pretty close to that number today,” Kerr added.

But US Airways does have some options on the table if economic conditions warranted further capacity reductions. “We do have 15 Embraer 190s that are not part of that fleet minimum that we could reduce if we needed to,” which would represent roughly 1-1.5% of capacity, Kerr said.

The airline has already shrunk its E190 fleet from 25 aircraft after selling 10 to Republic Airways Holdings just over two years ago.

In addition, the carrier “can always pull back some utilization,” Kerr added, but also noted that “we do have a utilization minimum.”

“So we could pull back capacity…maybe 2% to 3%, but we don’t have a lot of flexibility to pull back due to our pilot scope clause,” Kerr concluded.

US Airways Looking at Expanded Wi-Fi

Published
by
Dan Webb
on November 22, 2011
in US Airways
. 1 Comment

So far, US Airways has taken a more conservative approach to inflight Wi-Fi than some of its competitors. The carrier currently has all of its A321 aircraft equipped with Gogo’s air-to-ground Wi-Fi solution, though this pales in comparison to an airline like Delta, which has Gogo on its entire domestic mainline fleet and is now expanding the service to larger Delta Connection aircraft.

But US Airways is looking at expanding its Wi-Fi presence. “We will announce, probably by the end of the year, [if we are] either going with Gogo or Row 44 to expand our in-flight entertainment and have Wi-Fi on all of our aircraft,” said CFO Derek Kerr at the Citi North American Credit Conference last week.

Kerr added that “the entire industry is going in that direction. If you do not have that product on your planes, I think you’ll be left behind.”  The airline plans to bring Wi-Fi to its “entire domestic fleet within the next couple of years,” he said.

Earlier this year US Airways reported that it was experiencing low Wi-Fi usage – it would be interesting to see where usage rates are now.

2015: A (Potentially) Interesting Year for US Airways and the Regionals

Published
by
Dan Webb
on October 17, 2011
in US Airways
. 8 Comments

The regional airline industry, much like the airline industry as a whole, is constantly changing. I think it is fair to say that regional carriers are just beginning to stabilize from rapid capacity expansion (driven by mainline pilot contract scope relief) and a recent wave of consolidation.

Regional carriers will be fascinating to watch in the upcoming years. Profit margin targets in capacity purchase agreements have shrunk, and it’s likely that mainline carriers will continue to be tough with the regional carriers in terms of cost control.

This story has been dragging on for years. In 2004, Atlantic Coast Airlines, unhappy with the rates it would be receiving from United for regional service, decided to completely change its business model, branding itself Independence Air. The project failed, of course, but signaled that the era of high operating margins for regional carriers was coming to an end.

It’s fair to say, in my opinion, that Republic decided to try its Frontier experiment due to the dimmer prospects of contract business.

We’ll have to wait for a couple of years, of course, before we begin to see some more clarity on the future of the regional industry. But 2015 will be a big year for US Airways. And Air Wisconsin. And Republic. And Mesa.

In 2015, Air Wisconsin’s contract with US Airways will expire, according to an Air Wisconsin negotiations website. The carrier currently operates 70 CRJ-200s for US Airways Express. In addition, Republic explained in its latest annual report that in the same year its agreement with US Airways to operate 20 E170s and 8 E175s expires. Finally, Mesa, which operates 38 CRJ-900s, will have its contract expire in 2015, after its contract with US Airways was recently extended for 39 months as the regional carrier emerged from bankruptcy.

All of these contracts represent a significant amount of flying for the US Airways Express operation. The big question, of course, is how the Phoenix-based mainline carrier deals with these expiring contracts. The simplest option is to simply extend them, at possibly lower rates (which seems like a very possible scenario, especially for the E-Jet and CRJ-900 flying.)

But what happens to the CRJ-200 flying? The 50-seat jet, once the darling of the industry, has started to fall from favor, especially as new industry economics (driven by oil prices) have come into play. What does US Airways do with that Air Wisconsin flying?

This becomes a bigger issue, of course, as there are no new 50-seat aircraft in production. Bombardier has ceased production of the CRJ-200 and Dash-8-200 (Q200), while Embraer no longer produces the ERJ-135/140/145 family of aircraft.

Only adding to this issue is mainline pilot contracts, which contain scope provisions that outline what flying can actually be done by regional carriers. Pilot contracts are American, United, and US Airways are already amendable, and Delta’s contract runs through the end of next year.

In short…it’s going to be an interesting few years. Regional contracts set years ago will be expiring in a new, post-consolidation era with years of lost growth due to the recession. Airframers aren’t making 50-seaters anymore, and pilot contracts that restrict large regional jet flying are under negotiation.

 

Items of Note – August 8, 2011

Published
by
Dan Webb
on August 9, 2011
in American, Delta, Frontier, JetBlue and US Airways
. 1 Comment

So, lately I’ve been thinking about changing up the blog format a bit to make the site a bit more news-y. Sometimes there are stories that I just can’t analyze all that much, but I still think are worth a few lines, whether it be a link to a story or few thoughts of my own. I still plan on doing many of my traditional posts, but I want to give this format a try as well. Let me know your thoughts!

Delta Changes Equipment on LAX-HND
According to the always-informative Airline Route blog, later this fall Delta is placing its A330-200s on the Los Angeles – Tokyo (Haneda) route, a capacity reduction from the 777-200s currently operating the flights. Delta re-started service to Haneda from Detroit and Los Angeles in June after suspending flights in response to the March 2011 Japanese earthquake. Flights from Detroit, however, will be ending in a few weeks, something that is enabled by the extended dormancy waiver that Delta recently received from the DOT.

Frontier Announces Winter Florida Service
Frontier announced some seasonal Florida service yesterday. Some of the routes are normal resumptions, but the carrier is also adding new seasonal service from Des Moines to Orlando and Tampa, and from Madison to ORlando. Des Moines-Orlando is interesting as it appears that AirTran/SouthTran/Southwest is no longer in the market. Allegiant, however, flies from Des Moines to both Orlando (Sanford) and St. Petersburg.

The other interesting piece of the release is that service from Milwaukee and Omaha to the Tampa area has shifted back to Tampa International. Last year, Frontier had experimented with service to St. Petersburg from these cities.

Frontier Adds Two New Denver Destinations
The airline also said yesterday that it would add two new destinations from Denver – Little Rock (six times weekly) and Palm Springs (seasonal, thrice weekly). United has a presence in both markets. Meanwhile, Frontier is fine-tuning its capacity, adding a few flights each week from Denver to to Las Vegas, Madison, San Diego, and Santa Barbara for a short period of time.

In Other News…

  • The fight between US Airways and USAPA, the union representing the carrier’s pilots, continues to escalate with the airline now seeking a restraining order against the union. Fun times.
  • Much like Continental and Air France, American now has a new service that allows one to lock in a fare for an extended period of time.
  • Airlines appear to be rolling back the fare increases that came in response to the FAA tax holiday.
  • Vision Airlines announced that it is dropping five cities from its route map – Asheville, Chattanooga, Knoxville, Lafayette, and Shreveport – as part of its winter schedule. The carrier dropped service to a few other cities last month.
  • JetBlue will be operating charter flights to Cuba.

Why Delta and US Airways Should Look at Gogo Vision

Published
by
Dan Webb
on August 8, 2011
in Delta and US Airways
. 1 Comment

Last week, American announced that its fleet of 15 Boeing 767-200s, primarily used on flights from JFK to LAX and SFO, had been equipped with a new streaming entertainment system that will allow passengers to watch movies and television shows on their laptops for a fee. The system – Gogo Vision – is slated to be rolled out to more American aircraft this year.

The system streams the content from an onboard service through a Wi-Fi network, though one does not need to purchases Gogo’s inflight internet product to the use the system. Instead, one pays for the content he or she views.

While I haven’t tried the system myself and am by no means an expert – I think this system has some great potential at Delta and US Airways.

Delta’s inflight entertainment lacks consistency throughout its fleet. For example, there are some subfleets – like the ex-Song 757s – that feature personal televisions with on-demand entertainment – while the ex-Northwest Airbus fleet has nothing. (All mainline domestic aircraft now have Wi-Fi, though.)

Gogo’s new product, however, offers a new option for Delta where it can add IFE to aircraft without it and significantly reducing the number of modifications compared to the installation of a new embedded system. While there’d still be differences within Delta’s fleet, adding this option would be a good move, for consistency.

I think the argument for US Airways to adopt this new offering is even stronger. Three years ago, the airline decided to eliminate the IFE on its domestic fleet, arguing that getting rid of the sheer weight of the IFE system would reduce its fuel burn. While I’ve yet to see any official numbers, I’m willing to assume that this new Gogo offering is much lighter than what US Airways had in the past. In addition, this new solution makes IFE a new source of ancillary revenue.

Of course, there are many variables of which I do not have knowledge, such as the cost of installation, the weight of the system, the nature of the revenue split between Gogo/the airline. But from what I’ve see so far, I think this system has good potential at these two carriers.

 

 

US Airways Plans to Retire Some A320s in 2015/2016

Published
by
Dan Webb
on August 4, 2011
in US Airways
. 0 Comments

There was a very interesting footnote in a US Airways’ DOT filing yesterday about wheelchair storage:

US Airways plans to retire [REDACTED] existing Airbus A320s in late 2015/2016.

Sadly, there isn’t much detail there, nor is there much informatoin in the paragraph that references the footnote:

…by 2015, we will further consolidate our narrow-body aircraft around the Airbus A320 family as follows: [REDACTED] A319s, [REDACTED] A320s (up from [REDACTED] A320s today),20 and [REDACTED] A321s (up from [REDACTED] A321s today), and by phasing out [REDACTED] Boeing 737-400s, and [REDACTED] Boeing 737-300s.

But, either way, this is an interesting data point. Especially because, as per US Airways’ recently-released 10-Q, the carrier is receiving 12 A321s this year and 12 more A320-family aircraft next year. Its remaining orders for “46 A320 family aircraft are scheduled to be delivered between 2013 and 2015.”

And of course, the question of how/if/when these A320s will be replaced then comes to mind, especially as the retirements are set to begin when deliveries are slated to end.

According to the company’s annual report, 22 mainline leases are expiring in 2013 with 133 in subsequent years. Sadly, that isn’t broken down by aircraft type, but some A320s are probably mixed in there at some point, since 61 were leased as of the end of last year.

The other interesting thing is that the “up from” phrase is only used for A320s and A321s – so it appears that (as of now) that US Airways has no plans to expand the A319 fleet.

A Few Thoughts on Flying Last Week

Published
by
Dan Webb
on May 31, 2011
in US Airways and Virgin America
. 2 Comments

I was very excited for my travel last week, as I’d be flying out to San Francisco to be on Virgin America’s inaugural flight to Chicago O’Hare. The flight from Boston to San Francisco was great, as was the inaugural flight.

Unfortunately, getting home didn’t work out too well. See, Virgin offered to comp all of my flights, so I decided to try an ORD-SFO-BOS routing. Yes, it’s very much circuitous, but I figured I’d be saving some money and I would actually be productive during my flights thanks to Virgin’s power and Wi-Fi. I did something similar for Virgin’s Toronto launch last summer and it actually worked!

But seriously, next time I try to book a 30-minute connection, someone please talk some sense into me. The O’Hare departure left six minutes late, the flight ended up landing in SFO fifteen minutes late, and I ended up deplaning just as the door was closing on the Boston flight. To make matters worse, the next flight was the red-eye, which had no seats!

Since I had to be home for Friday morning, I began frantically searching for a way home. My best bet, it appeared, was a US Airways itinerary to Providence with a connection in Philadelphia that would get me in around 11:45pm that night. Fortunately, I decided to talk to a US Airways airport agent about it, who said that the SFO-PHL flight was delayed enough that I would end up missing my connection.

I continued looking around for options, and US Airways kept looking like the best one. I ended up booking an SFO-PHL-BOS itinerary. I wasn’t exactly looking forward to a red-eye in the back of an A321, but it would get me home. The flight was much more expensive than I had hoped, but I did arrive as scheduled Friday morning.

So, I’ve learned my lesson. Had I had at least an hour layover, I would’ve been fine. But in the future I shouldn’t let saving a few bucks blind myself from realities. In this case, I should have just booked a ORD/MDW-PVD flight a few weeks before my trip and have been done with it.

Nevertheless, the trip was a very interesting one. Due to the fact of my extreme sleep deprivation during the week, I’m not sure if I have enough details to write up a whole trip report. :D But I will provide a few thoughts on Virgin and US Airways, and hopefully later this week I’ll have some more on the Chicago launch and some of the interviews I did while there.

Thoughts on Flying Virgin Ameirca and US Airways Last Week

  • Virgin America gets the little touches down pat. I was impressed to see that at Boston, the station manager’s business cards were available at check-in and at the gate. That tells me two things. First, Virgin actually cares what its customers think. Second, it’s willing to empower its front-line to deal with issues rather than have everything be dealt with at headquarters.
  • Another nice touch is Virgin’s kiosks, check-in counters, and gate counters. Apparently they’re a bit lower than those at other airlines, which makes them feel a bit more accessible.
  • Little touches are nice, but they don’t matter when the important things are off. For example, I arrived for my flight back from O’Hare a bit after 5 am. The Virgin check-in desk was supposed to be staffed by then, but no one was around yet.
  • Last week I arrived into Boston very early, and got to the Virgin gate area just before the first flight to LAX was set to depart. I was surprised to see the captain walking around the gate area and introducing himself to passengers. I doubt that’s really common an any airline, but that gesture was definitely appreciated by all.
  • The “wow” factor after flying Virgin America wears off after a few flights with them. That’s not a big deal – Virgin sets a high bar and you begin to expect that. (And hopefully, in Virgin’s case, that’s why you become loyal…)
  • When I missed my connection in SFO, the Virgin America gate agent was incredibly apologetic about the whole situation. I bet many employees at other airlines wouldn’t do that.
  • One possible opportunity for service recovery at Virgin – offering up access the Virgin Atlantic clubhouse, even for a fee (the lounge is currently open to First Class, Main Cabin Select, and Elevate members for a fee). That would certainly make a stay at SFO much more enjoyable.
  • I’ve been slightly disappointed with Virgin’s cabin service with my few flights on them. On the non-inaugural flights I’ve flown, I’ve always purchased some kind of snack or meal, and I’ve been a bit disappointed with the delivery. Basically, if Southwest can always deliver free snacks with a smile, I feel Virgin could do the same with a $10+ meal.
  • That said, one of the flight attendants on my ORD-SFO flight deserves mega kudos for trying to help with my connection. When I mentioned I had a connection, she helped me find space for my bag further up on the aircraft. Unfortunately I still didn’t make the flight, but she was very generous nonetheless.
  • I was pleasantly surprised by US Airways’ service on my flights. The flight attendants were…experienced, for lack of a better term. They just did their jobs really well. On my SFO-PHL flight, the three FAs who were mainly helping out in the back (I think that’s where they were stationed, at least) worked really well together, and one was particularly helpful in helping passengers find space in the overhead bins.
  • Somehow, just somehow, I was able to sleep for most of my SFO-PHL flight. I normally can’t sleep while flying, so apparently I was quite sleep-deprived.
  • My SFO-PHL flight was packed. I’m the fact that it was Memorial Day weekend helped, but it got me thinking how much US Airways’ West Coast redeyes feed the first bank of morning departures in Philadelphia.
  • The SFO-PHL flight was operated by an A321 in the Stephen Wolf-era colors. I have some great memories with that livery, and it will be sad to see it finally go away. The dark fuselage is still quite distinctive.
  • One can really sense US Airways’ on-time performance. Both of my flights began boarding earlier than scheduled.
  • The gate agents for the SFO-PHL redeye were announcing before boarding that overhead space would be out by the time the last zone would board, and started offering free checked bags. The fact that some passengers can end up with a free checked bag while others have to pay $25 just doesn’t seem right to me. Granted, I realize the airlines need as much revenue as they can get, but still…
  • Final thought on Virgin America – they have an amazing product, but sometimes the more comprehensive schedule of a network carrier comes in handy. Granted, my issues were completely self-imposed, but I still think my point is valid.
  • And one last thought on US Airways – the airline appears to have the basics down pat. It’s been great to see the airline improve its operation, especially in-terms of on-time performance. Now, it’d be great for the airline to start improving its product a bit, but it needs to be careful here, as the company uses its cost advantage to account for a revenue disadvantage. Either way, catching up to other competitors by adding first class to RJs is a great step in the right direction.

Delta and US Airways Announce New Slot Swap Deal

Published
by
Dan Webb
on May 24, 2011
in Delta and US Airways
. 1 Comment

Can you believe it’s been nearly two years since the slot swap was first announced? In case you need a review — US Airways and Delta announced they would make a trade of slots at New York-LaGuardia and Washington-National. Regulators, however, were concerned about the competitive effects of the trade and wanted some slots to be divested at the airports for carriers that did not serve or had a limited presence at these airports.

Delta and US Airways didn’t really like that idea, but they came up with their own compromise with a smaller amount of slots being divested to airlines selected by Delta and US Airways. The government didn’t go for it, and then the deal went to court.

And now we’ve been waiting ever since…until yesterday! The carriers dismissed their case and have submitted a new proposal to the DOT. Let’s compare the original deal to what was announced yesterday:

Original Deal

  • US Airways gives Delta 125 slot pairs at LaGuardia (and the option to lease 15 more)
  • Delta gives US Airways 42 slot pairs at National
  • Delta also gives US Airways rights to operate to Sao Paulo starting in the second half of 2010
  • Delta also gives US Airways rights to fly to Tokyo-Narita, but US doesn’t plan to start service until 2015

New Deal

  • US Airways gives Delta 132 slot pairs at LaGuardia
  • Delta gives US Airways 42 slot pairs and National
  • Delta also gives US Airways $66.5 million in cash
  • Delta also gives US Airways the rights to operate to Sao Paulo beginning in 2015
  • The carriers are willing to give up sixteen slot pairs at LGA and eight at DCA

So let’s look at the changes. Why is Delta getting more slots at LaGuardia? Who knows. Their plan for New York might have changed a bit and they might now be planning on some divestitures. The Tokyo-Narita part of the deal isn’t needed anymore thanks to a new open skies agreement between the US and Japan. I’m not sure why the date for Sao Paulo service changed, but it could be because US Airways and United have already set up a temporary deal for US Airways to get access there. The cash to US Airways probably compensates for many of these changes. US Airways hasn’t said what they’ll do with it, though I would point out that $66.5 million more than compensates for US Airways’ planned upgrades of regional aircraft.

The possible slot divestitures are very interesting. Take a look at this press release from last year about the proposed Delta-US Airways compromise emphasis mine):

With the new six-way agreement, Delta would operate an additional 110 slot pairs at LaGuardia; AirTran, Spirit and WestJet would obtain five slot pairs each at LaGuardia from Delta; US Airways would acquire 37 slot pairs at Reagan National; JetBlue would gain five slot pairs from US Airways at Reagan National; and US Airways would gain access to Sao Paulo and Tokyo.

Meanwhile, here’s an excerpt from yesterday’s US Airways SEC filing about the deal:

In addition, if required by the regulatory authorities, the transaction could result in the divestiture by Delta of up to 16 slot pairs at LaGuardia and eight slot pairs at Reagan National to airlines with limited or no service at those airports.

I need to do some more digging, but I’m wondering what that exactly means for this deal now that Delta is divesting the slots at both airports. If Delta is on the hook at DCA, and not US Airways, does that mean US Airways gets 42 slot pairs no matter what? I need to research this further.

Anyway, let’s see what the government thinks of the deal this time around. The industry has changed a lot since August 2009. Continental and United have since announced and closed their merger. Southwest will have access to both airports involved through the merger with AirTran, and now JetBlue has a presence at DCA.

But I think this deal could lead to some interesting benefits for consumers. Delta plans to up-gauge regional routes currently flown by US Airways out of LGA, and US Airways says it will add at least fifteen new destinations out of DCA. In addition, the carriers planning some facility upgrades at LGA. Delta will start flying out of Terminal C at LaGuarida (in addition to D and the Marine terminal) and connect it to Terminal D. Delta will convert the US Airways Club in Terminal C to a Sky Club, and US Airways is planning on a brand new lounge at LGA.

Anyway, this is certainly an exciting move. Let’s see how this develops.

US Airways Invests in Its Onboard Product

Published
by
Dan Webb
on April 7, 2011
in US Airways
. 5 Comments

I’ll be honest – I’ve always had a soft spot for US Airways. Many of my early childhood trips (like my first experience in first class) were on the airline, so I have lots of fond memories. And it’s been great to watch the airline make incredible strides in areas like on-time performance and baggage handling. But the airline’s hard product leaves a bit to be desired.

Don’t get me wrong – US Airways has made great strides. But so has United when it comes to on-time performance. And plus United has a stronger network, and other compelling features like Economy Plus.

So it was great to see US Airways announce new investments into its onboard experience yesterday.  For one, the carrier will be upgrading its onboard food options across its network, but the biggest announcement was that first class will be coming to larger regional jets.

To be honest, this move is more catching up than anything – US Airways is the lone major network carrier to not have this feature. But it’s certainly a nice move, nonetheless, that could lead to increased loyalty or more revenue from first class tickets and upgrade fees. (Hopefully the offering will deliver in this area, considering that the total number of seats is coming down.)

Overall, I’m glad to see US Airways make this move. It certainly improves the carrier’s competitive position, and I think this could be a moneymaker in some areas. The market that immediately comes to mind for me is Washington-National – a strong (slot-controlled!) US Airways market with plenty of E-Jet Service.

US Airways says that it “anticipates that the addition of First Class to US Airways Express will be revenue positive in the first year due to the additional revenue from First Class sales and the sale of upgrades.”

Upgrades will begin with the E-175 fleet this October, and all larger regional jets will be finished in January when the CRJ-700 fleet is completed. (Note: the news release says upgrades start in October but the status page says they start in September.)

Anyway, here’s a breakdown of the changes:

I found it interesting that the E-175 will actually have one less premium seat than the 170. Maybe it’s for the same reason that the in the current configuration E-175 only has seats in the first row on the right side of the aircraft. The E-170, for comparison’s sake, has a full first row of seats. (Based on some browsing around on SeatGuru, it appears that the E175 first cabin will look like the E190 with one last full row.)

Looking at Fuel Prices

Published
by
Dan Webb
on April 6, 2011
in Uncategorized and US Airways
. 0 Comments

US Airways released an investor update yesterday, and as usual its foretasted fuel prices for the year were included. I decided to compare this to January’s investor update, and the increases are very interesting. In both guidances the airline gave five-cent intervals for price per gallon, so I just averaged the upper and lower bounds of each guidance and then graphed them. The increases are over 15% for the next three quarters:

According it its January 26 guidance, US Airways expected its mainline fuel expense to be $2.996 – $3.051 billion for the year. That’s now been upped to $3.432 – $3.486 billion.

Other airlines are probably seeing similar gains. Which then leads to the question –  how much further flexibility to airlines have with pricing to adjust to any further possible increases in fuel prices.