(Click to enlarge.)

So, in some cases, we’re actually seen some increase in bag allowance, which is certainly nice. Though those increases aren’t always that high, due to the varying policies of the weight system. For example, if I was flying Paris – Johannesburg in business, my allowance is actually 40 kg under the weight system. Also, this is a bit of a trade-off for some business class passengers. For example, if I’m flying JFK-CDG in business, I get two 32 kg pieces of luggage, but now it’s three pieces at 23 kg each. That’s still more weight, but the bigger bags will cost extra, though I have to think that’s not a huge convenience.

It should be noted, however, that the airlines have sneaked in a small fee increase here. Right now, the second bag for economy passengers costs $50, and it will be raised to $55. So, like all the other airlines, it’s a good idea to pay for the bag fees online, as one can save 20%. (Though the KLM website does note a good number of exceptions of where that option isn’t available. I’ve yet to find out if the restrictions apply to Air France as well, but they probably do.)

I could number crunch some more, but honest, it’s really not worth it. In the end, Air France is making its policy more transparent and understandable, which is a good thing. I have to think there are some other benefits here as well – restricting people to one bag probably makes check-in faster, for example.

On a side note, it’s interesting to see how the two airlines are positioning their premium economy offerings. KLM seems to be positioning Economy Comfort as simply a coach seat with more leg room and recline, while Air France is setting apart its Premium Voyageur offering even further (that’s a nicer seat than KLM, too).

So why the optimism? “The improvement is largely driven by a much stronger recovery in demand seen by year-end gains that continued into the first months of 2010. Relatively flat capacity translated into some yield improvement and stronger revenues,” the group reports.

IATA also released some interesting slides, so here are some of the ones I found interesting:

Those of us in North America will experience losses of $1.8 billion, second only to Europe with a $2.2 billion loss. It appears that the emerging economies will be leading the recovery, especially Latin America. IATA says that region wll perform well because “economic ties to Asia helped isolate the region from the worst of the financial crisis. Carriers in parts of the region have benefitted from liberalized markets which have facilitated some cross-border consolidation, giving greater flexibility to deal with changing economic conditions.”

I’ve written here before about the amounts of capacity that have been taken out of airline schedules, and that’s really been helping load factors, and by definition, RASM performance. IATA also predicts that restricted reply will help boost yields very slightly in 2010 – a 2.0% increase for passenger traffic.

Finally, here’s a graph of revenues. Basically, there’s an improvement, but there’s a lot of lost ground to recover here, especially when it comes to the high-yield premium passengers.

Basically, there’s a long road ahead, especially in the North American and European regions. But at least the recovery seems a bit stronger than originally forecasted.

You can see IATA’s industry outlook here.

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.)

Here’s an example – right now Aer Lingus has one A320 a day to Glasgow, while Ryanair operates two daily 737-800s. Once Regional starts up, the mainline service goes away and is instead replace with four flights with ATR s. In end, Aer Lingus will still have less capacity than Ryanair in the market, but with twice the frequency. Rynair’s flights are at the beginning and end of the day, but Aer Lingus has a schedule throughout the day, so Aer Lingus might be able to win some customers based on schedule here. The same thing for Endinburgh – right now Lingus has a lone A320 in the middle of the day (and Ryanair has two 737-800s), but now the ATRs can enhance that schedule with an earlier and later flight.

Personally, I’d like to see Aer Lingus get some other small aircraft of its own, perhaps a 319, or an E-Jet, or maybe even a CSeries. But enough about that. Check out these pictures of the first ATR72 to wear the Aer Lingus colors, snapped by photographer Malcolm Nason. I think the aircraft looks great – thanks to Malcolm for letting me post them here.

Other than that, we don’t know much more. So let’s get into the analysis/speculation, shall we? To make it easier to read I’ve divided the rest of this post into shorter sections.

A Change in Strategy?

Do I see this as a big change in strategy for Allegiant? No. Allegiant’s current system has been kind of simple – big leisure market on one end of the route, small market on the other end, with MD-80s flying the route a few times a week. President and CFO Andrew Levy said in a press release that “this transaction will enable Allegiant to extend to Hawaii its strategy of serving large leisure destinations from smaller cities with no existing nonstop service,” so that doesn’t seem like there will be any big changes here.

Yes, adding a new fleet type is a big change for Allegiant, but I wouldn’t classify it as a major shift. The airline’s current strategy has been to buy cheap MD-80s that are in good shape, and basically they’ve extended that to another type.

So Where Are the Aircraft Coming From, Anyway?

The answer to that question will help clarify Allegiant’s strategy here, at least a bit. For example, there are two exit configurations for the 757 – three doors and two overwing exits, and four doors. The former can hold no more than 224 passengers in a one-class configuration, while the latter can seat up to 239 passengers.

Another big factor is the engines – 757s come with either Pratt & Whitney PW2000 series or Rolls Royce RB211 series engines. There are a couple of different versions of each type, but it can make a difference. For example, if Allegiant wanted to fly out of Bellingham, Washington to Hawaii with a PW2037-powered 757s, some weight restrictions might be in order, but might not if powered with RB211-535E4 engines. (According an investor presentation released today, the company reports that the aircraft are RB211-535E4 powered.)

So where are these coming from? All Allegiant says is, “The six 757 aircraft are sister-ships and have been in service with a single European operator since original delivery from Boeing. The aircraft come equipped for extended twin-engine operations (ETOPS), as required for long overwater flights.” In a SEC filing from today, the company also reports that the aircraft have RR21-535E4 engines, have an average age of seventeen years, and an average cycle count of 19,000.

Here are my best guesses, from what I think is the most likely to least likely:

1. Thomson Airways. The initial rumors about Allegiant and Hawaii involved Thomson 757s.
2. British Airways. Yeah, they announced in 2008 that the whole fleet was sold off to be converted into freighters, but, they conveniently have six in storage right now. (Though it appears one of them was with a couple of airlines.)
3. Finnair. The carrier is dumping its fleet of seven leisure 757s, conveniently from 2010 to 2012. (Finnair’s have Pratt engines.)
4. Thomas Cook.
5. Icelandair.

What Routes Will Be Flown?

Well, obviously the 757’s range is limited as to where it can go to the mainland. The longest 757 nonstops to Hawaii are United’s from Denver, and Allegiant has already said the Rockies are the limit. So there’s one constraint.

If Allegiant were to follow its current strategy, these 757s would be based in Hawaii and fly them to smaller destinations like Bellingham, WA or Eugene, OR. Of course, Allegiant’s bases are possibilities, too. Though a route like LAX-HNL is crowded already, and Allegiant probably isn’t going to start setting up connections through its bases. I think we’ll see an extension of what Allegiant does already – go to smaller airports with minimal competition, and carve out a niche for themselves. The airline would most likely want to avoid any heavy competition from Alaska and Hawaiian if possible.

How Will The Aircraft Interiors Be Configured?

Allegiant has said this morning that the expect the aircraft to seat around 200-220 passengers. I expect the number of seats might be at the higher end of that range when one is flight attendant costs. Per FAA rules, the number of flight attendants is set by the number of seats in (except for the beginning) 50 seat increments (1 FA for 20-50 seats, 2 FAs for 51-100 seats, etc.).Let’s say the 757s have 190 seats. Four flight attendants are needed. If the 757s have 205 seats, five flight attendants are needed, and that increases labor costs. So the way I set it, Allegiant will have just under 200 seats, or go all-out and go around 220 to spread out the cost of that fifth flight attendant.

Another issue to consider here is range. Extra butts in seats means a heavier aircraft, which means less range. If Allegiant were to seat 20 more than United’s domestic 757s (182 seats), for example, they’d lose a couple hundred miles in range, which potentially has an effect on the routes Allegiant can fly. To mitigate that effect, I would not be shocked if Allegiant slapped some blended winglets on these bad boys, if they don’t have them already.

One thing that could happen as well is some kind of premium cabin from Allegiant. Nothing like traditional first class, but maybe something along the lines of United’s Economy Plus or Frontier’s STRETCH products – a coach seat with a few extra inches of legroom. That wouldn’t be anything fancy, but travelers on a long flight like that would be tempted to upgrade.

And what about IFE? I doubt we’ll see any kind of AVOD from Allegiant here. But Alaksa and Hawaiian already have digEplayers available for rentals. Something like that to drive Allegiant’s ancillary revenue is certainly within the realm of possibility.

An Extra Step: ETOPS Certification

Over the past two decades, it has become easier for new carriers to get certified for ETOPS (Extended Twin Engine Operation Standards). Originally, new carriers would have to had to operate new aircraft domestically for a year to get ETOPS 120 certification, and then fly for another year to get ETOPS 180 certification. (That certainly would have been interesting to watch for Allegiant!) But the FAA slowly changed the requirements, and issued a new new Advisory Circular that outlines the ETOPS certification process in 2008, including an accelerated program. It will certainly save Allegiant a lot of time, but it’s still a long and expensive process. Basically, the airline has to set up a whole bunch of internal procedures, and will probably have to fly to some “validation” flights for the FAA to show they’re ready for ETOPS flights. The FAA might ask them to simulate a diversion or engine failure, for example.

Currently, Allegiant expects to be certified in the first quarter of next year.

Another issue I see with ETOPS is the required “pre-depature service check” that must be performed by “an appropriately trained maintenance person, who is ETOPS qualified, and authorized by the certificate holder, must accomplish and certify by signature the completion of ETOPS specific tasks.” Do some of the smaller airports serve have these mechanics available on demand? It’s not a huge issue, but just another factor to consider.

If you want to learn more about what a carrier needs to do to be certified for ETOPS, you can read the FAA AC on the subject here.

Will It Work?

Short answer: it should. Remember – one should not think of Allegiant of just an airline, but as a travel company that flies airplanes, so they’re not just looking at the financial performance of the flights. Chairman and CEO Maurice J. Gallagher, Jr. put it best in the press release announcing the acquisition:

We are very optimistic about our ability to exploit the large third party ancillary revenue opportunity we believe exists in Hawaii. We expect the sale of hotels, rental cars, and many attraction and activities popular with Hawaii visitors will provide a very meaningful contribution to the success of the service

I have faith in Allegiant’s management team to make this new service work. Now, it’s time to grab a bag of popcorn and watch the new service unfold.

But this morning an interesting press release came over from AirTran about Milwaukee. And it’s not a new rote announcement:

ORLANDO, Fla., March 5 /PRNewswire-FirstCall/ — AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI), today announced that the airline will host its annual shareholders’ meeting on May 18, 2010, at the historic Pfister Hotel in downtown Milwaukee. This marks the first time the Company’s annual meeting will be held in Milwaukee. AirTran Airways operates a hub in Milwaukee and is the fastest growing airline at General Mitchell International Airport.

Is it just me, or is this decision to not have the meeting in Orlando, where AirTran is headquartered, fairly symbolic here? I think it shows that AirTran is really committed to this market. Heck, AirTran is calling itself “Milwaukee’s largest mainline carrier” and it’s opening a crew base there. Clearly they’re ready to face-off Midwest for an extended period.

There’s definitely a lot of overlap between the two airlines. But Midwest does have some advantages here, I think. First, while it’s probably eroded a decent amount, they still have brand loyalty as Milwaukee’s hometown carrier. Second, they still have some unique markets, especially the smaller ones with the ERJ service, so that can drive some connecting feed to their other flights. On a related note, Midwest does have some greater fleet flexibility. The smallest AirTran can go is 117 seats with the 717 (granted, there are a five SkyWest CRJs working for them, too), while Midwest can use those E170s, etc. in markets that might not work out for AirTran. Finally, Midwest has been able to expand its reach with the Frontier codeshare.

And, like I usually write here, it will be interesting to watch them duke it out.

Photo Credit: bmi.

The codeshare is pretty simple to understand as it is quite wide -ranging: all UK to Switzerland routes. In a press release bmi says “will allow bmi to offer fares between Zurich, Geneva and Basel from London Heathrow, London City, Manchester, Birmingham International and Edinburgh and improve connections between Switzerland and the wider bmi network.”

But, in addition to this codeshare, we’ve seen some other interesting moves within the Lufthansa family. For example, bmi is launching flights from Heathrow to Vienna, a market that is currently served by Austrian as well. And this article from Business Traveller shows some interesting moves bmi has been making with its sister airlines in some other markets.

As usual, this will be fun to watch and see how Lufthansa positions its various airline brands around Europe.

Interestingly enough, on June 9 United’s usual Saturday-only flight goes to daily for the summer. Mexicana is a player on the route as well, and Delta currently has Saturday-only service. So maybe this route just wasn’t working out with so many players. Alaska also mentions that it will continue to place its code on Delta’s flights on this route, so the airline probably thought it could pull its own metal out of the market but still get revenue through its partner. I do wonder if Delta might increase capacity in the market now.

Meanwhile, Alaska will continue serving Cancún on a seasonal basis from Seattle. The carrier also serves a few other Mexican destinations from LAX (Guadalajara, Ixtapa, Loreto, Manzanillo, Mexico City, Puerto Vallarta, and Cabo).

Photo Credit:

http://www.flickr.com/photos/as737700/ / CC BY-ND 2.0

As I mentioned in my past post, I was catching up on DOT filings, and I found an interesting one from Volaris. The airline has applied to the DOT for permission to launch service to San Jose and Chicago from Guadalajara. San Jose would complement the carrier’s existing Californian transborder service, and would boost its position in the Bay Area as it already serves Oakland. The service, if launched, would compete with Mexicana’s existing nonstop service. (Mexicana has a nonstop from OAK as well.)

What’s interesting about the application for Chicago flights is that Volaris never specified what airport it plans to serve. Aeroméxico and Mexicana have nonstops from O’Hare, but I think Volaris would fly into Midway. That makes the most sense to me as it would open up a bunch of connecting opportunities with Southwest once that codeshare begins (hopefully later this year).

Volaris began transborder service last year with service to Los Angeles and Oakland. The former has service to Toluca (an alternate to Mexico City), Guadalajara, Morelia, and Zacatecas, while the latter has flights to Guadalajara and Toluca. Oakland had service to Tijuana, but service appears to have been cut. For both cities, only flights to Guadalajara are daily.

The airline also has the authority to fly to Fort Lauderdale,  though Volaris has not announced any service to the city.

Photo Credit:

http://www.flickr.com/photos/jrsnchzhrs/ / CC BY-ND 2.0

A US Airways A319 taxis at Charlotte. Photo Credit: Chris Weyer.

Both of the cities already have mainline service to Phoenix, and on June 1st each will have four frequencies to US Airways’ western hub. Puerto Vallarta will see two A319s and A320s, while Cabo gets a 757-200, an A320, and two A319s. US Airways plans to operate the Charlotte flying with A319s, and will serve Puerto Vallarta four times a week, and Cabo five times a week. Service is slated to be year-round.

US Airways already serves Cancún, Cozumel, and Mexico City from Charlotte.

This move makes sense to me. Only a few cities on the East Coast have a direct flight to Phoenix, so a connection in Philadelphia, Charlotte, or Washington is necessary. These flights will eliminate a second connection, which certainly makes life easier for travelers. It also makes US Airways more competitive here, since one-connection itineraries are available from the East Coast on other airlines.