The Airline Blog

JetAmerica shuts down

noreply@blogger.com (Thomas Luly) — Fri, 17 Jul 2009 23:13:00 +0000

I'll be writing more about this soon, but for now, here's the news release:

JetAmerica Suspends Sales
$900,000.00 in Refunds to Passengers
Clearwater, Florida - July 17 – JetAmerica, the public charter air carrier operator, announced today that it is suspending sales to all markets and that it would immediately begin to notify affected customers and process refunds to all customers who have booked seats on its flights.

“We are reluctantly suspending our public charter operations effective today,” said John Weikle, CEO, who has been with the company since April. “Finalizing the slots required to support our charter program at Newark has taken longer than expected and we have decided to suspend our flights in order to refocus on different markets. We still strongly believe that there is an unmet need for affordable air service to secondary markets and we look forward to offering this option again in the near future," concluded Weikle.

"We will be refunding more $900,000 in ticket reservations for flights from August 14 through the end of September," said Bryan Glazer of World Satellite Television News and Media Relations, which represents JetAmerica.

Glazer's firm, which previously represented JetBlue and Virgin Atlantic Airways, was retained by JetAmerica in May. The firm's national media blitz generated headlines across America that helped sell more than 20,000 tickets during the first JetAmerica's online e-commerce operations.

"It is unfortunate that so many consumers' will be affected. This was unavoidable. I worked closely with the executives of JetAmerica for several months and know they did their very best to overcome the challenges that the slot situation posed. But in the end, the business plan never called for paying for more than a half million dollars for slots," said Glazer.

He added, "Don't be surprised if JetAmerica comes back with new routes and new destinations."

All customers will receive automatic refunds within 7-14 business days. Any customer not receiving a full refund in 14 days should call 727-451-3970.

Air France dismisses report of a "black year" in 2010

noreply@blogger.com (Thomas Luly) — Fri, 17 Jul 2009 18:57:00 +0000

Air France executives have dismissed a report in the French financial newspaper Les Echos which claims that the airline could face a "liquidity problem" in 2010. The report, published under the headline "Air France: les risques d'une année noire" (the risks of a black year) says that accountants from the accounting firm Secafi, hired by Air France's works council, have painted a couple of pictures regarding the airline's financial strength, none of them very pretty.

Under the first scenario, an upswing in traffic occurs at the end of the 2009-10 financial year and oil stays around $61 a barrel, and Air France, taking advantage of reduced costs, could keep its losses to a minimum, or even break even.

More realistic, says the report, is the second scenario, in which traffic numbers stay sluggish, revenue declines 9%, but oil stays low (around $58 a barrel), which is "more or less" what the airline faced in late May. But the airline would still post a loss that's much higher than the 184 million euro loss posted in the 2008-2009 financial year, and revenue declines in the past month have approached 20%, not 9%.

Then there's the worst scenario, which a decline in revenue of over 9% but oil reaching $70 a barrel. "In this scenario, the operating loss would cause us to consume more than 1.5 billion euros in cash in 2009... this means that it wouldn't be a year before the company runs out of cash," says the report. A "black year" indeed.

Pretty serious stuff, especially as oil is currently trading in the low sixties. Even if oil sticks around $61-63 a barrel, scenario #1 isn't likely, as air traffic probably won't rebound for the airline before the end of the 2009-10 financial year. And it's unlikely that oil prices will be around $58 a barrel for a long period, as they are in scenario #2. Still, it might be taking things too far to say that the airline could run out of cash within a year; the airline issued over 600 million euros worth of bonds last month to finance new aircraft purchases, and perhaps they could do the same in the future if needed.

Unsurprisingly, Air France management isn't buying the gloom-and-doom forecasts. In a statement, the airline said that "the Executive Management of Air France-KLM wishes to make clear that in no respect does it validate any of these imaginary scenarios [and] that its financial position is, and will remain, extremely healthy in the coming years." The statement went on to say that Air France had 4.5 billion euros on hand at the end of June, along with 1.2 billion euros in available credit lines.

photo by caribb from Flickr, licensed under the Creative Commons

Lufthansa struggles with Austrian purchase

noreply@blogger.com (Thomas Luly) — Thu, 16 Jul 2009 13:18:00 +0000

Lufthansa has been really putting together quite the airline empire over the last few years, acquiring Swiss Air Lines, Italian carrier Air Dolomiti, and German carriers Germanwings and Eurowings outright, as well as purchasing large stakes in British airline bmi and Brussels Airlines (and will own the latter outright by 2011).

It's also trying to wrap up a deal to take over Austrian Airlines in its entirety, although the plan has dragged on for a long time, thanks to roadblocks from the anti-trust unit of the European Commission, which is concerned about a lack of competition on some European routes. Lufthansa has already apparently agreed to more concessions, including dropping flights between Vienna and Frankfurt and Vienna and Geneva, but it's unclear whether or not this will be enough for the EC.

Austrian has been bleeding red ink recently; the airline lost 429 million euros last year, has more than one billion euros in debt, and has already burned through two thirds of a 200 million euro injection from the Austrian government that it received this spring. Its chairman has said that if the Lufthansa deal falls through, the airline would need over one billion euros in new capital. Austrian's future is being increasingly called into question as the prospects for the deal's success look dimmer.

And meanwhile, Lufthansa is also struggling (although not to the same extent as Austrian). The Austrian deal, with a deadline of July 31, is still dragging on and on and becoming ever more expensive, and Lufthansa is looking at ways to lower acquisition costs. It also reluctantly purchased fifty percent of bmi from its founder, Sir Michael Bishop, who for many years held an option that would force Lufthansa to buy his stake. Bishop actually ended up suing Lufthansa back in May in order to make Lufthansa proceed faster with the deal.

But the deals with Austrian, bmi and Brussels have contributed to Lufthansa's increasing financial pressures. The airline today announced that it would roll out a costs-saving initiative called "Climb 2011," which calls for savings of one billion euros ($1.4 billion) per year starting in 2011. The plan focuses on lowering passenger costs as well as shedding 20% of its 2,000 office jobs in its passenger airline core business. Lufthansa has also said that it will defer delivery of some aircraft from 2010.

Depending upon how many further obstacles it receives from the EC, Lufthansa might just decide to axe the takeover of Austrian, especially as the costs of a takeover mount and Austrian's financial situation becomes more and more perilous. Austrian could be looking less and less attractive, especially while Lufthansa digests the the financial burden of taking over bmi and Brussels. With the global airline industry stuck in a deep downturn, Lufthansa needs make sure that it doesn't bite off more than it can chew, and should concentrate on solidifying its core operations - after all, that airline empire is no good if the carrier at the center of things isn't strong.

photo by caribb from Flickr, licensed under the Creative Commons

AirTran's 'Internetiquette' for in-flight wifi

noreply@blogger.com (Thomas Luly) — Wed, 15 Jul 2009 15:25:00 +0000

AirTran recently became the second airline to outfit its entire fleet with Wi-Fi (after Virgin America). "But with your newfound freedom to surf the internet, comes a little responsibility," says the airline in the introduction to "Internetiquette," a brochure that will be found in every AirTran seatback pocket. The 'manual' says that it will "[allow] you to enjoy the internet to the fullest, while at the same time, not offending the people around you."

"Internetiquette" features such helpful tips as #48 ("Flight attendants are not tech support"), tip #10 (helping you figure out which online photos are suitable for flights [SFF] or not suitable for flights [NSFF]), or #134, which advises against taking your laptop into the lavatory to take care of some business.

But perhaps even better are the series of short videos hosted by none other than "Airplane!" star Peter Graves, who speaks about some of the dos and don'ts of in-flight internet use. He even manages to throw in a few jokes from "Airplane!" every now and then in the videos, which can be seen here.

United deals with song fallout

noreply@blogger.com (Thomas Luly) — Tue, 14 Jul 2009 15:36:00 +0000

Last week, a music video was posted to YouTube that was every airline PR executive's nightmare: a catchy country-music song, professionally edited with a humorous music video, that was quickly spreading across the internet. Normally this wouldn't be a problem, but the song was called "United Breaks Guitars," by Canadian singer Dave Carroll and his band, Sons of Maxwell, and describes his fight with the airline to receive compensation after United baggage handlers in Chicago damaged his $3,500 Taylor guitar.

In the last week or so, the song/video (which only cost $150 to make) has reached almost three million views on YouTube, gained prime-time exposure on CNN's Situation Room, and was the most popular song at the band's concert last Friday. “Everybody was calling for that song the minute we hit the stage,” Carroll said to Rolling Stone. “It was unbelievable, 1,500 people raising their hands in the air to the ‘United breaks guitars’ tag line in the chorus."

That's got to be causing some serious pain over at United headquarters in Chicago. It's bad enough when a YouTube video critical of your airline (no matter how light-heartedly) garners millions of views; it's even worse when you see that the song has had such success that over a thousand people put their hands in the air to the words of "United breaks guitars." How many of them are going to have that chorus line stuck in their heads at the first mention of United? And how many discussions of the song ("Did you see that video on YouTube?") are going to evolve into discussions about a lack of customer service on United ("You know, I flew with them last April...") ? And it's not over, yet - there are still two more songs on the way.

Obviously, it's hard to blame United for not seeing this particular incident arising. I don't think a case where someone, slighted by an airline, has turned around and released a wildly popular country song about their experiences. But it does highlight some serious customer service policy deficiencies, ones that United is seeking to rectify. As the pictured "tweets" show, United Airlines' PR department has been working hard to respond to comments on Twitter regarding the song, and has said that the video will be used for training, and that they've "apologized for, have fixed, and most importantly, learned from" the mistake, too. Airlines are starting to understand the power of social media - a $150 music video can be more effective than a multi-million dollar Madison Avenue ad campaign.

Perhaps airline reps everywhere now will be thinking in the back of their minds, "Could this turn into a smash YouTube hit?" After all, it worked for Carroll - national attention and a priceless amount of free publicity. Rolling Stone has said that Bob Taylor, of Taylor Guitars, personally phoned and offered Carroll two free guitars of his choice for the second video, while other airlines have reportedly offered him free tickets.

Pilots agree to cuts, but trouble still ahead for BA

noreply@blogger.com (Thomas Luly) — Mon, 13 Jul 2009 17:46:00 +0000

It seems as though British Airline Pilots Association (BALPA) members are actually buying British Airways CEO Willie Walsh's statements that the airline is facing its largest-ever crisis, since 94% of them voted today in favor of a 2.6% cut in salary, a move that should save the airline £26 million. "We have pressure tested the company's trading position and cost base, and are satisfied that this step is necessary to help BA recover its position as one of the world's most successful airlines," said Jim McAuslan, general secretary of BALPA.

BALPA's agreement to pay cuts is a relief for Walsh, who is going to have a much harder time convincing cabin crew and ground handling staff to take a salary cut. Four weeks of negotiation have failed, and the threat of a strike looms large for the airline. “There is every sign that a conflict is looming if this last throw of the dice does not succeed," said Mick Rix, who heads up the GMB union. The Unite union evidently doesn't buy Walsh's message as BALPA did, saying that "BA’s management are opportunistically using the recession to force through changes which are more far-reaching and damaging to BA’s future.

The pilots have seemed to recognize that the airline's future is at stake during these critical next months. While painting gloom-and-doom pictures has always been a management strategy used to extract concessions from unions, I think that British Airways is genuinely in a "fight for survival," as Walsh put it. Naturally, it was under Walsh's nose that the airline went from making record profits one year to posting record losses the next, and once the dust settles after the current crisis, Walsh might find that he needs to move on. But to be fair, BA is saddled with outdated, expensive labor contracts - ones that need to change, and change in a hurry.

"The problem is that there’s no flexibility with the cabin staff," said Howard Weeldon, a senior strategist at London's BGC Partners LP. "It’s been entrenched for 20 or 30 years... There has to be some form of compromise, because you can’t have an airline without cabin crew and the cabin crew need the jobs. A strike would be very, very foolish and it would only make things much worse.” But unless the cabin and ground staff agree to a reduction in wages, a strike might be just the thing that Walsh finds himself facing later this summer. He's also going to have a difficult day tomorrow, when he addresses BA's shareholders at their annual meeting - and they can't be happy about the fact that the airline has stopped issuing a dividend. The airline has even talked with key shareholders about an emergency rights issue for £500 million, although that would probably be a last-resort option.

photo by michal818 from Flickr, licensed under the Creative Commons

Continental allowed to join Star Alliance immunity pact

noreply@blogger.com (Thomas Luly) — Fri, 10 Jul 2009 16:40:00 +0000

The Department of Transportation ignored a recommendation from the Department of Justice that Continental Airlines not be allowed to join nine other Star Alliance carriers in recieving antitrust immunity on international routes, and instead granted it permission earlier today. (Thanks for the heads up from Airline Route.)

The airlines (Air Canada, Austrian, bmi, LOT, Lufthansa, Scandinavian, Swiss, TAP, United and now Continental) can benefit from "limited and carefully considered" antitrust immunity on international routes, saying that "the transaction will not substantially reduce or eliminate competition."

In its ruling, the DOT also stated that the Continental's joining "does not materially alter the competitive landscape or increase overall market share to any significant degree," noting that Continental's move to Star allows for "a more competitive alliance in markets where oneworld or SkyTeam have a strong presence."

The DOT also noted that Continental currently overlaps with other Star carriers in fourteen city-pair markets, but stated that creating "carve outs" (routes that are not covered by the antitrust immunity) would "detract from the efficiencies that the alliance would otherwise create." Existing "carve outs," such as Chicago-Frankfurt, Washington-Frankfurt, San Francisco-Toronto and Chicago-Toronto, are still in effect. As for domestic competition (especially with United), the DOT concluded that "the benefits of the alliance outweigh the comparatively small risk of harm that could occur in domestic markets."

Of course, the whole argument of alliances being good for the consumer only stands if "metal neutrality" is practiced. "Metal neutrality" is when airlines that jointly market services aren't picky about who actually operates the flight (and thus keep more of the revenue). For example, if I wanted to fly from Boston to Frankfurt as seamlessly as possible, I could take a direct Lufthansa flight, or instead fly United through Washington Dulles. If I book my ticket with United Airlines, under "metal neutrality" they'd put me on the Lufthansa flight, even though they'd make much less money than if they put me on their flight through Washington. If things are kept metal-neutral, the DOT argues, then carriers won't spend time worrying about making sure that a passenger flies on their airline; instead, they can work on syncing their flight schedules and sharing financial benefits and losses, which give them incentive to make things as convenient as possible to the passenger.

photo by James Willamor on Flickr, licensed under the Creative Commons

WestJet announces largest-ever expansion

noreply@blogger.com (Thomas Luly) — Wed, 08 Jul 2009 17:28:00 +0000

If there's a Canadian airline on the rise, it's definitely WestJet. Originally started in Calgary in 1996, it was originally only going to fly to destinations in western Canada (hence the name). But the airline quickly grew in subsequent years, and is now the second largest airline in Canada (behind Air Canada) and the largest Canadian low-cost carrier. WestJet has, more recently, announced plans to introduce a frequent flier program and has announced a codeshare agreement with Southwest Airlines (another one is in the works with Air France/KLM).

And earlier today, the airline announced what it billed as its "largest-ever seasonal non-stop flight schedule" in the company's history, adding 11 destinations for the winter schedule. Pretty much all of them are warm-weather getaways (Miami, Mexico, Cuba, St. Maarten, etc.) although I was rather surprised to see Atlantic City on the list. Year-round service to Yellowknife from Edmonton and San Diego from Calgary was also added. The airline's transborder and international capacity will increase 45% year over year, compared with just 5% domestically.

"This schedule represents significant expansion on both the transborder (U.S.) and international fronts," said Chris Avery, WestJet's VP, Revenue and Planning. "Both are strategic decisions as we continue to aggressively pursue and earn profitable market share in these critical areas. WestJet is well on its way to becoming the market leader in many of the most popular sun destinations in the U.S., Mexico and the Caribbean."

WestJet also has to be taking advantage of the rather precarious situation that its chief rival, Air Canada, finds itself in. Air Canada has been dealing with less-than-stellar relations with some of its unions, and is trying to avert a possible strike during the 2010 Vancouver Olympics. Any significant labor disruption at Air Canada could be enough to push the airline into bankruptcy for the second time in the past ten years - something that WestJet, which is not a unionized carrier, would be sure to exploit.

"United Breaks Guitars" and inspires country song

noreply@blogger.com (Thomas Luly) — Tue, 07 Jul 2009 19:09:00 +0000

I recently came across a country singer's airline-related story of woe on United Airlines (thanks to Alex for the heads up). Dave Carroll was flying from Halifax to Omaha on United Airlines, with a stopover in Chicago, when his guitar was damaged (full story here):

In the spring of 2008, Sons of Maxwell were traveling to Nebraska for a one-week tour and my Taylor guitar was witnessed being thrown by United Airlines baggage handlers in Chicago. I discovered later that the $3500 guitar was severely damaged. They didn’t deny the experience occurred but for nine months the various people I communicated with put the responsibility for dealing with the damage on everyone other than themselves and finally said they would do nothing to compensate me for my loss. So I promised the last person to finally say “no” to compensation (Ms. Irlweg) that I would write and produce three songs about my experience with United Airlines and make videos for each to be viewed online by anyone in the world.

Frustrated with United customer service, Carroll found a creative way to try to get even with the airline: write a song. Called "United Breaks Guitars," the catchy, country-sounding song details his experience. Of course, I'd like to point out that his troubles could have been prevented had he carried his precious guitar with him on board the aircraft - I'm pretty sure that this is possible, having seen passengers carrying guitars on board planes in the past. Nevertheless, it makes for enjoyable watching (and listening).

Ryanair plans 'standing seats'

noreply@blogger.com (Thomas Luly) — Mon, 06 Jul 2009 15:00:00 +0000

Ryanair boss Michael O'Leary

When the story broke last week about China's Spring Airlines looking into 'standing-only' flights, I figured that it was only a matter of time before European budget carrier Ryanair would announce plans for a similar concept. And sure enough, Ryanair, not to be outdone, finally announced today that it was in discussions with Boeing and the Irish Aviation Authority to look at "vertical seating" in its 737s - the last four rows of regular seats would be removed in order to make room for the new seats. Passengers wouldn't actually be standing, but "they would have something like a stool to lean on or to sit on," said Ryanair spokesman Stephen McNamara; CEO Michael O'Leary has described them as "barstools," according to The Sun, which also reports that O'Leary got the idea from the Chinese carrier.

The passengers who use the "vertical seating" would fly for less than those with a regular seat, and would apparently be used only on flights under 90 minutes. "We might take out the last five or six rows and say to passengers, 'Do you want to stand up? If you do, you can travel for free'," said O'Leary, to Sky News. "Why is this any different to what happens on trains, where you see thousands of people who cannot get a seat standing in the aisles, and it happens regularly on the Underground?"

Spirit Airlines reportedly buys Air Jamaica

noreply@blogger.com (Thomas Luly) — Mon, 06 Jul 2009 13:01:00 +0000

Some interesting rumors are circulating around the tropics - acccording to the Jamaica Gleaner, US ultra-low-cost-carrier and Ryanair-wannabe Spirit Airlines will purchase perennially unprofitable state-owned flag carrier Air Jamaica, which could be renamed "Spirit of Jamaica." The news comes only days after Radio Jamaica reported that the Jamaican government's Privitisation Committee, set up to find the best buyer for the airline, recommended that either Trinidad-based Caribbean Airlines or British charter airline Thomas Cook should be the one to make the purchase. Spirit Airlines spokesperson Misty Pinson refused to confirm or deny the story, only saying to The Airline Blog, "We don't comment on market rumors."

In preparation for the sale, the government installed Bruce Nobles, the same person who oversaw restructuring at Hawaiian Airlines, as president and CEO. Nobles realized, pretty quickly, that Air Jamaica's fleet utilization was poor and vowed "to fly the airplanes as much as you can to generate revenue." He also dropped routes to Atlanta and Miami, and instead used the aircraft on routes where they made money. Nobles also noted that one of Air Jamaica's main problems was that it lacked capital; "Air Jamaica spends too much money because it does not have any," he said, and has since secured more cash for the carrier.

Evidently, he's done a pretty good job of fixing up the airline; those who thought that there would be a mid-summer snowstorm in Montego Bay before a profitable Air Jamaica might be surprised. Nobles says that the airline, which has never made a profit, could break even as soon as December and may actually become profitable in 2010. Especially given the current economic environment, that's quite an accomplishment. The fact that Spirit's owners, Indigo Partners and Oaktree Capital, are interested in buying Air Jamaica has to be a testimonial to the airline's improved financial condition.

Of course, if the sale turns out to be true, it does raise a few unanswered questions. Would Air Jamaica turn into an ultra-low-cost-carrier, along the lines of Spirit? Many in Jamaica would probably cringe at the thought of their national airline becoming another Spirit, which is known for its Ryanair-like disregard for passenger service (according to the Department of Transportation, Spirit had the most complaints in 2008, with 14.3 per 100,000 passengers; US Airways, with 2.0, came in second). Perhaps Spirit might run the carrier separately, keeping its existing (and newly-profitable) business philosophy and using it to feed Caribbean traffic into Spirit's US operations (and vice versa). But here, the 'feed' strategy might not be successful - for a start, the two airlines serve different airports in New York (Air Jamaica at JFK, Spirit at LaGuardia). And the discrepancy in the current levels of service offered by the airlines might be off-putting to some travelers, too.

photo by Matt Coleman - BNA-Photo on Flickr

Delta starts flights on crowded Sydney-LAX route

noreply@blogger.com (Thomas Luly) — Fri, 03 Jul 2009 15:13:00 +0000

photo: Delta flight 16, a Boeing 777-200LR, gets ready to leave Sydney. Photo by AFP

Delta Air Lines started Los Angeles - Sydney service on July 1, becoming (as Fish pointed out) the first US airline to fly to all six 'inhabited' continents since Pan Am. If anything, it further sends home the message that Delta is now a major international player, and that it's putting some of the route authorities it acquired with Northwest to good use. Even though the US, unlike so many other countries, has never had an official 'flag carrier,' Pan Am was the closest to it until it went bust in 1991. So perhaps now Delta has assumed that mantle - not bad for an airline that, 80 years ago last month, started out as a crop-dusting operation in Louisiana.

But Delta had better not be expecting an easy ride on the US-Australia route, which is known for being a major cash cow for the airlines that fly it. Up until recently, those airlines were Qantas and United, and they both made a lot of money (Qantas apparently makes 20 to 30% of its money on the route, and I recall that United also also attributes a pretty hefty amount of its earnings to the route as well). United and Qantas had a lock on the market, and if you didn't like one of those airlines, your options were, well, rather limited (unless you wanted to fly via Asia, which adds several hours). Qantas flew about 70% of the traffic, leaving United with the remaining 30%.

But Virgin offshoot V Australia started flying between Sydney and Los Angeles this past February, and suddenly things got complicated - the formerly lucrative route has turned into a money-losing one. Fares went down, as they usually do when a carrier enters a new market; over the past year, prices have gone down by more than half. Qantas' market share on the route is expected to fall to just over 50%, and just as badly, their international yields were down 25% in May versus the same month last year. Capacity will be going up by as much as a third, now that there are new airlines flying the route and Qantas is using the A380, and that can also lead to lower yields.

Still, nobody's giving up, at least not yet. "[The route] is such a jewel that we intend to keep it," said Alison Espley, United's general manager for Australia and New Zealand. "Someone may not last the distance, but we will." She said that United has been flying the route for 24 years and isn't going anywhere, and that other airlines are going to "have to look very seriously" at exiting the route. Virgin chief Richard Branson similarly predicts an airline exiting, but of course, not his own: "I would put money on either Delta or United not flying across the Pacific in two to three years." By year's end, predicts Flightglobal, the market share on the route will be Qantas 60%, United 17%, V Australia 15%, and Delta 8%.

What used to be a comfortable money maker is no longer, and chances are that at least one of the four airlines might have to consider stopping flying Sydney-Los Angeles pretty soon.

JetAmerica delays launch, blames Newark

noreply@blogger.com (Thomas Luly) — Thu, 02 Jul 2009 21:04:00 +0000

The story started last night, when Jaunted reported that startup airline JetAmerica would not let you book tickets in July on their website, even though their reported launch date is July 13. "There is a problem with our server," said a JetAmerica employee when Jaunted phoned the reservations number. "[The website] is only booking flights for August and September... IT says all should be fixed by end of day tomorrow." Cranky Flier, meanwhile, has warned potential passengers to stay away from JetAmerica, at least until they're in the air.

But just a little while ago, the airline released a press release that stated that it was "self-imposing a thirty one day delay of the launch of its first flights," which are now scheduled for August 14. JetAmerica said that "unforseen complications with landing and take-off time slots at Newark Liberty International Airport" were to blame for the delay.

"In February 2009, the Federal Aviation Administration advised us, through an intermediatiary, that our operations at Newark could be accommodated," said Brian Burling, JetAmerica's VP of Operations, in a press release. "However, at about the same time JetAmerica started making national news with its $9 non-stop fares; when JetAmerica announced 60,000 website visitors and sales in excess of 20,000, the FAA re-clarified its policy, telling JetAmerica we would need to obtain slots." He added, "The delay is not as unusal as it sounds... Historically, many of the world's most successful airlines and charter services have had to delay their launches."

“We feel terrible for the folks who booked with us for travel during the July 13 - August 13 timeframe, but the FAA's change in the slot policy for indirect air carriers is beyond our control," said CEO John Weikle. "We are working hard to obtain all the slots we need as soon as possible.”

According to the press release, the airline will also be e-mailing 6,486 passengers to alert them that their credit card accounts will be fully refunded, and that the refunds should appear "on e-statements within 7 to 14 days." The airline will also offer those inconvenienced passengers "special incentives to rebook on future flights," including waiving the $10 reservations 'convenience fee' and the seat assignment and first-checked piece of baggage fee. (Those who are affected can call 727-451-3970 for more information.)

Burling says that the airline has "no immediate plans to change our flight schedules," saying that "initially, JetAmerica planned to fly 34 weekly flight segments starting on July 13, 2009. On August 14, 2009 the number of flights is still slated to expand to 40 per week." And, as if to try to head off any ensuing negative press coverage, he said: "People should not be quick to jump to negative conclusions about JetAmerica. I am particularly referring to internet bloggers and naysayers who are predicting the worst."

Well, I'm not predicting the worst, but this means that JetAmerica's start is shaky at best. I'm no expert in airport slots, so I'm not sure if their excuse is plausible (I assume it is), or if JetAmerica is experiencing other problems, but blaming everything on 'server problems' and then switching to another explanation looks anything but professional. Weikle and Co. are going to have to put their damage control response into overtime to have to deal with this - and even if they do get in the air next month, it remains to be seen if passengers will continue to have confidence in the carrier.

Edit: In a statement to The Airline Blog, Toledo-Lucas County Port Authority CEO Michael J. Stolarczyk, had this to say about the delay: "We are disappointed to hear about this situation, and our first priority is with our customers here in Toledo. We need to embrace and support JetAmerica and we sincerely appreciate the support of our community. The Toledo-Lucas County Port Authority is also trying to mitigate their inconvenience as much as possible. We will see JetAmerica fly in August and beyond."

Auf wiedersehen to Lufthansa's A300s

noreply@blogger.com (Thomas Luly) — Wed, 01 Jul 2009 12:44:00 +0000

The last Lufthansa Airbus A300 flight flew earlier today, as the culmination of the airline's plans to phase out the 26-strong fleet. Lufthansa flight 3853, operated by aircraft D-AIAM, left Rome and arrived in Frankfurt shortly past 9:00am local time. The A300s have been a key part of Lufthansa's 'continental' fleet since 1987, and the airline used them extensively on inter-European routes. But the A300s got the axe as part of a cost-cutting plan that Lufthansa has implemented, which is expected to save €300 million ($420 million).

American Airlines, another big A300 operator, is also expected to retire the last of its A300s this year on August 24th. Those of you who have yet to fly on an A300 (myself included) might want to look at booking tickets before it's too late...

photo by eigjb on Flickr

jetBlue smokes competition in J.D. Power survey

noreply@blogger.com (Thomas Luly) — Tue, 30 Jun 2009 12:07:00 +0000

The 2009 J.D. Power and Associates 2009 North American Airline Satisfaction Study was released earlier today, and jetBlue came out top, not just in the low-cost carrier group but overall, as well - for the fourth year in a row. For the 'traditional network carrier' category, Alaska topped the list for the second consecutive year. (Just to be clear, JD Power defines low-cost carriers as airlines that "operate single-cabin aircraft with typically lower fares," while 'traditional network carriers' "operate multicabin aircraft and use multiple airport hubs." It also considers AirTran to be an LCC, although it does operate multicabin aircraft.)

I spoke with Paula Sonkin, VP Travel and Real Estate at J.D. Power, who said that cost was the biggest influence for most passengers, and they've not been favorably impressed by the various sources of ancillary revenue (read: fees and charges) that the airlines have added recently. This, along with with declines in in-flight service, has led to overall customer satisfaction with airlines this year on the decline for the third straight year, reaching a four-year low (ouch). The only airline that improved its position versus last year was Southwest.

That's not to say that everything is gloom and doom, however. Sonkin pointed out that the airlines that did well - for example, Alaska, which was 4th place in 2007 and rose to 1st last year - did so because they focused on improving the things that were in their control. Fuel prices, a weak economy - those things can't be changed, and the things that occur as a result (such as increased fees and lowered employee morale, which can lead to poorer service) can be expected, if not necessarily liked. But Alaska really made strides because it improved its pre-flight process - that is, its website, the ticket booking process, and especially the check-in process, which the airline made faster and friendlier. Also on the plus side, passenger-reported flight delays and check-in times were reduced, and the general on-time arrival rate went up by more than 5% versus last year. “Despite the economic stresses that airlines are under, they are recognizing the value of passengers’ time and trying to make air travel more expedient and efficient,” said Dale Haines, senior director of the travel practice at J.D. Power. “Unfortunately, any improvements in customer satisfaction are being offset by passenger displeasure with cutbacks on in-flight services, increases in fees and issues with the helpfulness and courtesy of flight crews.”

jetBlue did very well, especially in the aircraft category (of course, flying a bunch of relatively new planes with in-flight TV might help), although Southwest really managed to place a strong second place (tied with WestJet), and the trend is that the airline is closing the gap with jetBlue. All of the airlines were scored on a 1000 point scale, and interestingly, even the lowest-ranked low-cost carrier (AirTran) still managed to beat the top-ranked traditional network carrier (see charts below). Delta and Continental performed adequately for the network carriers, with US Airways (haven't they branded themselves an LCC?) coming in dead last - maybe it was that whole experiment with charging $2 for drinks that really did them in. For the full results, head over to J.D. Power.

photo by MHJohnston from Flickr, licensed under the Creative Commons

Standing only flights on Spring Airlines?

noreply@blogger.com (Thomas Luly) — Mon, 29 Jun 2009 17:35:00 +0000

That's right - CCTV is reporting that Chinese carrier Spring Airlines is looking at standing-room only flights on some of its Airbus A320s. The airline, billed as the first low-cost carrier in China, will try to get regulatory approval for the idea by the end of the year. Apparently, the new passenger layout means that the A320s can fit up to 40% more passengers (that's quite a bit) as well as cut costs by 20%. "It's just like bar stools," the airline said. "The safety belt is the the most important thing. It will still be fastened around the waist."

Spring Airlines wants the standing-only flights as a way to cope with capacity issues - it can't get a hold of new planes quickly enough to keep up with passenger demand. According to Spring Airlines President Wang Zhengua, the idea for the flights was proposed by Chinese vice premier Zhang Dejiang: "He suggested that, for a lower price, passengers should be able to get on a plane like catching a bus, with no seat, no luggage consignment, no food, no water, but very convenient." Wang also says that airline has been told by Airbus that the idea was safe, so "once the government approves it formally, we'll try it."

Apparently the tickets that require you to stand in the aisle would be 20% cheaper. I'm not sure whether the entire aircraft would be standing-only, or if it's just additional standing in the aisle. But this might be a novel, if somewhat uncomfortable, way of dealing with the problem of undercapacity - that is, if it gets regulatory approval, as the Chinese aviation authorities still require that passengers are seated for takeoff and landing. Maybe Vice Premier Zhang can do something about it, but in the meantime, let's not give Ryanair's Michael O'Leary any ideas...

Problems ahead for global airline alliance immunity

noreply@blogger.com (Thomas Luly) — Mon, 29 Jun 2009 13:35:00 +0000

The Department of Justice recently expressed objections to the antitrust immunity agreement that nine Star Alliance carriers (plus Continental, which will be a Star member later this year) are seeking. The airlines, which include United, Lufthansa, Air Canada, SAS and Swiss (but notably, not US Airways), have been looking to obtain global immunity from antitrust laws for some time now. In April, the Department of Transportation gave the carriers a tentative green light, but last Friday, the DOJ instead called on the DOT to "deny the broad requested immunity and instead grant a more limited immunity" - probably just a more limited transatlantic cooperation.

Right now, Continental technically competes with Star Alliance members on its routes, but under the proposed immunity agreement, that competition would be eliminated. The DOJ went further in its explanation, saying that Asian and Latin American routes flown by United and Continental would probably see price increases, as the airlines would no longer be competing. And the DOJ also took fault at some transatlantic routes; Continental has a pretty extensive list of European destinations, and the DOJ said that competition on some routes between the US and some of those cities would decrease substantially.

So, what implications does this have? First, it shows that the federal government is getting more serious about enforcing anti-trust policies, especially under the new presidential administration (as had been expected). Secondly, it could have serious effects for a similar agreement that rival alliance oneworld is trying to put together, and could be in the shape of things to come for such global agreements. And the DOJ statement also goes after cooperation between United and Continental on domestic US routes; "a sweeping grant of immunity raises significant concerns about harm to domestic competition," it said - something that might indicate obstacles to a potential United-Continental merger.

photo by caribb

ANZ presents 'bare essentials of safety'

noreply@blogger.com (Thomas Luly) — Sat, 27 Jun 2009 15:21:00 +0000

Last month's Air New Zealand TV ad was enormously popular, having generated almost two million views on YouTube (and also a lot of free publicity). Seeking to build upon that, the airline has released a new safety video for its Boeing 737-300 aircraft, featuring crew members wearing nothing but body paint. Maybe this will cause people to finally start paying attention to those safety videos...

"The Blue Skyway" flies again on Continental

noreply@blogger.com (Thomas Luly) — Thu, 25 Jun 2009 22:39:00 +0000

One more airline adds a 'retrojet' to its fleet. Continental has recently taken delivery of a brand-new Boeing 737-900ER that's painted in 'The Blue Skyway' livery, in preparation for the airline's 75th anniversary on July 15. The paintjob was first used on Continental planes back in 1947. Here you can see it on a DC-7 back in the day, and much more recently on a shiny 737 (photo by Drewski2112).

Maybe Air India is "too big to fail"?

noreply@blogger.com (Thomas Luly) — Thu, 25 Jun 2009 15:17:00 +0000

Looks like the Indian government is getting set to perform a bailout of ailing flag carrier Air India, which has lost almost $1 billion in the last fiscal year. Indian Civil Aviation minister Praful Patel sounded an awful lot like Barack Obama talking about GM when he said that "it doesn't mean there is a checkbook open to Air India... It will be difficult for the government to keep continuing our support unconditionally."

In order for Air India to get the money (over $800 in the form of equity and loans), though, the government is forcing the airline to cut costs and become leaner and meaner (sound familiar?). Air India has to submit a cost-cutting plan to the government within one month, including a plan to cut personnel costs and dump unprofitable routes. Not that long ago, the airline attracted quite a bit of attention after deferring the salaries of its employees for two weeks; more recently, Air India's senior mangagement have been asked to work without pay next month.

Maybe keeping Air India afloat is a point of national pride; after all, the airline has always been the state-run flag carrier. But is the Indian government really going to be able to force a bloated, government-owned entity to slim down? Air India's main rival, the privately-owned Jet Airways, also posted a loss for the last fiscal year - but it was just under $200 million, which is a heck of a lot less than Air India's.

photo by hartlandmartin from Flickr, licensed under the Creative Commons

It'll cost you $2 to watch this safety video

noreply@blogger.com (Thomas Luly) — Wed, 24 Jun 2009 23:43:00 +0000

Here's a clip from MADtv showing a fictional airline safety video... although it's two years old, it seems to be ahead of its time when it comes to predicting excessive airline fees ("Seatbelts can be purchased for $5"). While airlines won't be charging for seat belts, they can (and often do) charge for just about everything else. Good old Ryanair might come to a lot of people's minds, let's remember than on Ryanair, they wouldn't even give you that single peanut for free. (Thanks to FlyersView for the heads up.)

Republic buys Frontier and Midwest

noreply@blogger.com (Thomas Luly) — Tue, 23 Jun 2009 20:36:00 +0000

I can't think of a time when an airline company has purchased two airlines in as many days, but that's what has happened, now that Republic Airways Holdings has agreed to not only purchase Denver-based Frontier Airlines, but also long-struggling Midwest Airlines. If it wants to pull off the hat trick, then all it needs to do is purchase one more airline.

You might not have heard of Republic before - and that's not surprising, since the airline doesn't fly under that name but under three brands: Chautauqua Airlines, Shuttle America, and Republic Airlines. Still haven't heard of any of those? That's because they're the ones who do some of the flying for the regional airline brands, like United Express, Delta Connection, US Airways Express, AmericanConnection, and Continental Express. Republic Airways has been pretty successful, because of the increase in regional airline flying and the fact that their labor costs are relatively low (flight crews aren't as senior, meaning they aren't paid as much).

Under the terms of the first deal, Frontier, which has been stuck in Chapter 11 bankruptcy for more than a year, would walk out of bankruptcy court as a fully-owned subsidiary of Republic, but keep flying under its own name. Of course, the deal's not final yet - if another company places a higher bid for Frontier next month at a bankruptcy auction, or if the bankruptcy court turns the deal down, then the takeover wouldn't be completed.

Why did Republic go after Frontier? One scenario claims that Republic, which does some flying under the United Express banner, could turn around and sell Frontier's assets to United Airlines, which competes head-on with Frontier at Denver.

As for Midwest - well, let's just say that the writing's been on the wall for quite some time now. The airline is a sad shell of its former self - remember when they had all of those DC-9s and MD-80s and the nice seats and good food? Last year, Republic loaned Midwest $25 million - a lifeline that helped it stay out of bankruptcy, but one that by no means helped the overall financial situation. The airline fought off a takeover attempt by AirTran last year, but times have since gotten a lot more tough.

The airline was recently sued after falling behind on aircraft payments, and it would have had to have faced the prospect of going up against not only AirTran but now Southwest at its Milwaukee hub, so it's got to be pretty good for Midwest that Republic stepped in. The current plan is to have Midwest continue under its own brand name, just like Frontier, but the 717s will be ditched in favor of Embraer 190s.

photo by E-Mans from Flickr, licensed under the Creative Commons

An interview with Mark Malkoff

noreply@blogger.com (Thomas Luly) — Tue, 23 Jun 2009 01:19:00 +0000

Mark Malkoff is a New York comedian with a fear of flying, and has taken a pretty novel approach to confronting his fear: he's been spending the entire month of June living on a plane. Well, not just one, of course; he's been eating and sleeping on quite a few AirTran planes since the month began. He stays in touch with the rest of the world through Twitter and his website, MarkonAirTran.com, where he posts some pretty amusing videos he's taken on board. Last week, The Airline Blog had the opportunity to ask him a few questions:

So first of all, why did you agree to do this? Did you approach AirTran or did they approach you?
I got the idea a year and a half ago to stay on a plane for an entire month to get over my fear of flying. AirTran had liked my previous work. I wanted to do the project. We sat down and it immediately became clear it was a good fit.

How much progress have you made in getting over your fear of flying?
My fear has gotten tons better. If I started at a ten, I'm now at a 3. Talking to the AirTran pilots has really helped. Also, just flying 13 to 14 hours every day has gotten me used to it.

What do you like best about living on the plane? And the worst?
The best are the AirTran flight attendants, and the wifi when I'm up in the sky. I don't think I'd survive without the wifi. It allows me to keep in contact with friends, family, and people on Twitter. The worst is washing my hair in the airplane bathroom. Sleeping alone on the plane isn't fun, either.

What do you mostly eat? Where do you get your food from?
Nice people bring me food from the airport. I try to stick to fruit and vegetables. I take a lot of vitamins every morning.

So far, what's the strangest experience you've had while living on an airplane?
People taking my picture while I'm sleeping was strange. Also, a few times I was sleeping alone on the plane at night [when] it started moving, being pulled to another gate. The first time it happened, I wasn't told ahead of time. I was just happy it didn't take off.

How difficult is it to keep track of where you're flying, and where you've already been?
I never know where I am, where I'm going, and how many times I've been to a particular city. For instance, I thought I was in Milwaukee for the third time and it was the eighth.

What are some of the little things that you do to try to keep some semblance of a 'normal' daily routine?
I wake up, get clean, dress, brush my teeth, eat fruit, check my email, and then see what cities I'm flying to that day. I don't usually know until the day before, but all the cities kind of blend together.

I saw the video of you getting showered down by the fire trucks at Flint airport. When you don't have the opportunity to do that, how do you keep clean?
I use baby wipes and wash my hair in the airplane bathroom. It's not fun, trust me. Getting hosed down on the tarmac in Flint was the cleanest I've been in weeks.

Is AirTran giving you frequent-flier miles? Do you get to keep them?
I hope so! My wife flies with me on the weekends. AirTran threw us an anniversary dinner on the wing of a plane. It was kind of incredible. The videos are a lot of fun. Passengers love being a part of it. We put up new content every day at markonairtran.com. My favorites are bingo with passengers, a flight attendant washing my hair mid-flight, and [playing] Twister.

OpenSkies to become ClosedSkies?

noreply@blogger.com (Thomas Luly) — Mon, 22 Jun 2009 12:02:00 +0000

If you're not familiar with OpenSkies, it's the premium transatlantic brand that British Airways launched a year ago with some BA 757s, which fly in an all-business class configuration. It merged with French competitor L'Avion last July, and the process was completed in April. The subsidiary took advantage of the identically-named Open Skies treaty, which allows European Union airlines to fly from any EU country to the US.

But The Guardian is now reporting that BA, faced with deepening financial troubles, is looking at shutting down or selling off OpenSkies. BA, which itself developed much of its product around catering to business travelers, has been adversely affected by the drop-off in business travel over the last year, and it's not unreasonable to think that OpenSkies, an all-business class airline, must be affected in the same way. "Every part of our business is under review in these difficult and challenging times," said a British Airways spokesperson. "Closing [OpenSkies] would have no material effect on our financial performance," said CEO Willie Walsh. "But the team there knows that it will close if it does not deliver on its business plan."

The report conflicts with recent statements by Dale Moss, OpenSkies' managing director. "We are not on the business plan that we set out, but we are not far off - we are probably nine months off where we wanted to be at this particular time," he said. Moss stressed that despite the downturn in business travel, the airline will continue flying. More importantly, Moss said that OpenSkies will try to use its lower cost base to compete more effectively against its transatlantic competitors. But BA's operating in crisis mode, and if the operation isn't making money, then its future looks bleak. The fact that Walsh is publicly talking about giving OpenSkies the axe can't be a good sign.

BA's 'value calculator' goes after Ryanair, easyJet

noreply@blogger.com (Thomas Luly) — Sat, 20 Jun 2009 20:56:00 +0000

If nothing else, British Airways certainly deserves credit for their latest attempt to fight back against its two main low-fare rivals, Ryanair and easyJet. The airline has launched a "value calculator" on its website, which illustrates the various "hidden" fees that have made the low-fare airlines famous. BA shows what Ryanair and easyJet charge for checking baggage and food and drink, among other costs, and then contrasts those with BA's "no extra charge" column. You can check off as many boxes as you wish, and the total at the bottom of the columns update "With British Airways," the website says, "the price you see is the price you pay."

BA has a point. Alison Hunt recently wrote an article where she researched a long weekend trip in Venice from London on BA and Ryanair. She notes that if "you were to fly with Ryanair (£157.06), check into the hold just one piece of luggage (£20 in fees, both ways) weighing 23kg (another £120 due to the expensive restrictions Ryanair places on heavy luggage), pay by non-VISA Electron debit card (£20) and spend £8 each on sandwiches and drinks on each flight (£32) you could be looking at a grand total of £349.06 - £64 more than BA. Eek!" £350 is a far cry from the base £9.99 fare that Ryanair advertises. In other words, if you were to take advantage on Ryanair of the little 'extras' that you didn't pay any additional money for on BA, your ticket would end up being more expensive.

But the popularity of Ryanair is due to its 'a-la-carte' pricing - if you don't want it, you don't have to pay for it. Assuming that you didn't check any bags or purchase any food or drink onboard, you'd still have to pay Ryanair's ridiculous online check-in fee of £5 and debit card charge of £10. But even with the £15 in fees, your new price of £172.06 would still be less than BA's £285. And Hunt assumes that you'll forget your boarding pass, which Ryanair charges £40 for doing. If you keep track of things, your cost will be even less.

The moral of the story - be careful when booking on low-fare carriers, because sometimes you might end up being charged for a lot of 'extras' that you didn't know about. But if you're smart about it, you can still end up saving a good deal of cash flying on Ryanair or easyJet versus on British Airways.