Virgin America started flights between DFW and LOS/SFO all the way back in December and experienced a fair bit of success while American Airlines simply matched fares and maintained their status quo.  Over the past several months, VA has learned that if they can get people to try their flights out, they can win the all important business customer.  With that in mind, VA launched a new initiative in the Dallas / Fort Worth area offering 2 for 1 purchases and inviting people to give up their old airline.

It’s a fairly agressive campaign and one that promises to really dent AA’s traffic.  So, in response, AA is offering $99 fares to LA and San Francisco (although not matching the 2 for 1 deal) and fighting back with communications to their customers with email blasts. 

It’s been a while since we’ve seen things heat up like this.  The problem for American Airlines is that at the prices being offered, it becomes kind of a no-brainer to try Virgin America.  And once you try Virgin America, you realize that, no, not all flights have to be staffed with mean people and not all flights have to be endured on crowded 737-800s.  The newest AA aircraft are no match for the experience Virgin America offers.

Who wins?  Everyone in the Dallas Fort Worth area, for sure.

Filed under: Airline News by ajax
No Comments »

There are quite a few blog posts showing up in the past few days memorializing or offering recollections on what September 11, 2001 was like for them.  I frequently struggle on anniversaries like this because I find myself out of sync with many others and with respect to this event in particular.

Make no mistake, it was a very bad day and I felt the trauma as much as anyone.  However, I tend to want to see us move on and do better as opposed to continue to only reflect back on what happened.  That said, I do think some reflection and observation on this particular anniversary is, perhaps, in order.

My day was absolutely normal when it started.  I woke up cranky as I often do, made coffee and drove to work.  I was just a few minutes later to work than perhaps normal but for no other reason than I was tired.

It was my custom to listen to the NPR news broadcast in the mornings (and still is) and I was doing so as I drove into the parking lot of my company around 8:30 or so in the morning.  As I did so, the news broadcaster, Carl Kassell, interrupted his news reading, hesitated and then said that there was a fresh news report that a small aircraft had hit the World Trade Center.

I was a bit surprised to hear that but immediately concluded that New York must be experiencing very low cloud cover and/or fog and someone must have finally done something badly wrong in that airspace. 

But it didn’t stop me at all.  I went into my office, closed my door and began reading emails and doing work.  I generally don’t like to talk in the earliest part of my mornings and my staff was accustomed to me doing those things behind a closed door.  Sometime after 9am, one of my staff opened my door and asked if I did not know that the world was on fire. (or words to that effect.)

I was surprised at her distress, started asking questions and got news going on my computer.  It took just a couple of minutes to learn that one hijacked aircraft had gone into the World Trade Center, not a small civil aircraft and that other aircraft were known to be hjacked as well. 

Then we learned of the second aircraft and things just seemed to get blurry for a while.  Our news feed slowed to a crawl because the internet was overwhelmed.  We were able to get a portable TV going and got some news from that.  I went to my car a couple of times to listen to the radio as well. 

After a couple of hours, there was news that parents were pulling their kids from school and I announced that those who wanted to leave and do the same, could.  I also offered that it might be best for us to stay where we were for a while longer until we knew that someone had a handle on something.  We stayed for a bit longer but it became clear that no work would get done and I let everyone go home.

I went home as well. 

I worked near Addison Airport in the Dallas area.  I lived under one of the normal approach paths for Love Field and DFW airports.  It was immediately striking just how quiet things grew both in the air and on the streets.  Like most of everyone, I watched the news, talked to some family on the phone and felt punched by the events most of all.

I made some calls to business friends in the New York City area to check on them and didn’t reach many but some were answering.  One friend, a jewelry manufacturer, holed up in his facility in lower Manhattan and stood guard over his business for days.  His wife witnessed a man get beaten in their Queens neighborhood for being nothing other than of Middle Eastern descent. 

In the evening, I started to get calls and emails from friends around the world asking if I was OK.   They knew me to be a frequent traveler and from their vantage point, it would be perfectly logical for me to be in New York or Boston or Washington, D.C. 

I sat on my back patio for a good part of the evening and just marveled at how quiet it was.  It was still like an early sunday morning.  No sound of cars, people or airplanes.   When my telephone rang, it sounded abnormally loud every time.

I was as shocked as anyone and probably a bit more upset than some given what I knew of the airline industry.  I deduced what had happened very quickly and never learned anything that truly contradicted my guess that hijackers had taken control of airplanes and most passengers had cooperated in the idea that doing so would get the airplane on the ground.  But the hijackers had broken the model and done the unthinkable. 

I was bitterly proud that those on UA 93 had learned what was going on and had fought back.  When I heard that, I knew that never again would passengers be passive in such circumstances.  I haven’t been proven wrong in 10 years either.

I’m genuinely sorry for those who suffered direct losses that day.  I’m also fairly bitter about where we are 10 years later.

It upsets me that we haven’t raised a bolder building in the World Trade Center’s place yet.  If it had been up to me, we would have finished that long ago. 

I am very disappointed at the losses of personal freedom in the last 10 years.  I’m extremely upset that people went along with it so passively and I’m very upset that Congress continues to cower in political fear rather than eliminate those losses.  I think the Patriot Act was one of the worst things ever done in terms of legislation.

I hate that our airline transportation security is still theater rather than real.  Consider that in 10 years, the TSA hasn’t once thwarted a terrorist threat.  But they have allowed numerous breaches in that time and under circumstances that leave me wondering if anyone is actually doing their job.

It infuriates me that the TSA is more of a problem for us all than a solution.  That the TSA is a source of theft and insult rather than a professional corps of security people doing their job well.  It angers me that the solution to security 10 years later is to invade their bodies with scanners or sexually asssault them with pat downs.  The United States should be a better place than that.

It’s been a horrific decade for the airline industry.  September 11 was the start and the heavy hits have kept coming ever since.  Consider that American Airlines has lost more than $1billion a year in the last 10 years.  Several major airlines have had to declare bankruptcy.  Many others had to merge or die. 

And every time they think they’ve got  a handle on things, another punch comes. 

There have been other disappointments.  The only truly new mainline airplane to be built and delivered in the last 10 years has been the Airbus A380.  In the 1960s, we saw tens of new ones designed and built.  What’s worse, while we’ll see 2 more in the next 10 years, that’s about it.   What happened to innovation in building new airliners?

It’s been a bad 10 years for the United States.  I would like to suggest that we consider just how much we’ve all taken and how we all are still standing today.  I would like to see the next 10 years in the United States to be a decade to rebuilding, growth and facing up to our problems and challenges. 

I would like to have some pride in my government.  It’s been too long now. 

I would like to see my fellow citizens be just a bit less selfish, a bit less political and a bit more focused on cooperating with each and achieving things.  It’s time to get back to achieving success and overcoming challenges presented to us.  It’s time to be leaders again rather than bitter isolationists.  It’s time to wake up and get back to competing. 

It is definitely time to find new leaders.  I want to see people who understand what it means to represent the whole rather than the special interest.  I want to see leaders who work hard, play hard and set sterling examples of looking forward to the future.  I want people who ask us to stretch rather than wait passively. 

Today should be a day to reflect not only on our losses but on how we need to get going with our lives and our country and do much, much better.

Filed under: Air Traffic Control, Aircraft Development, Airline News, Airports, security by ajax
1 Comment »

The government of Ireland is, again, pondering the sale of its part of Aer Lingus but has already indicated that Ryanair would be rebuffed as a buyer on competitive grounds.  Ryanair is offended but says it may consider selling its own stake in Aer Lingus to the right buyer as well.

Now to find a right buyer.  Part of me wonders if the International Airlines Group aka British Airways/Iberia would be interested.  Aer Lingus isn’t a global partner in anything but it could provide some European consolidation that might benefit all parties.  Past IAG, I cannot see who would be interested in owning what they can more profitably compete against.

Another part of why I believe IAG might be interested in IAG’s CEO:  Willie Walsh.  He came up in the airline busines at Aer Lingus.  He knows its strengths and weaknesses and he successfully competed against Ryanair while he led that airline.

Filed under: Airline News by ajax
No Comments »

In about 2 weeks, the temporary funding for the FAA authorized in early August expires.  Already there is another political fight brewing over this funding and the issue, oddly enough, is centered on the National Mediation Board which governs labor with respect to airlines. 

Delta and Republicans are upset over a NMB rule issued that appears to make it easier to unionize airlines.  Originally, in a unionization vote a person who did not vote was counted as a “no”.  This resulted in unionization votes that saw votes for and against such but which lost because some portion of the labor pool simply did not vote.  The NMB’s new rules says you only count votes that are actually cast.   Failure to vote is not counted as anything.

Delta Airlines flipped out over this and it did appear that it was designed to make unionization easier at airlines.  At least  at first glance.  Now we’ve seen a number of votes take place and, oddly enough, that hasn’t happened.  The only difference is that even more people vote.   This rule change has not yet resulted in a change of outcome for unionization at any airlines. 

So, is it an issue?  I don’t think so.  Frankly, I thought it was a non-issue when it came about.  If airlines such as Delta thought that people who were skipping the votes were going to continue to do so, I find that laughable.  Of course people were going to go vote.  It’s the kind of thing that can materially change your career forever.  So far, Delta hasn’t been unionized in any way. 

As an aside, its time for unions to give it up at Delta.  There has been vote after vote there always resulting in the status quo being maintained.  People are happy and they’ve got a good workplace *without* paying union dues.  No one is mistreated at Delta and certainly no one is treated any worse or better than at any other airline.  It has permitted Delta to work more closely with its employees and be a more agile company.  There is a reason why Delta is financially succeeding in the toughest times an airline can experience.

Furthermore, the NMB is *not* governed by the FAA.  It’s in appropriate to tie the services performed by the FAA and the fortunes of its staff to a political fight over something that they have no control over.  It is inappropriate to try to extort a Presidency in this manner as well.  I’m happy to let politics be politics and I get that sometimes we have to go the long way to get someplace in politcs.  But this is one of those things that is over the line. 

A clean vote is the right way to do things on these subjects and the FAA deserves to experience more certainty in its future.  You can’t complain about the FAA getting things done when you fund them temporarily for weeks at a time for more than  a year.  In fact, you impact the services provided in a great way because no effective planning can be done. 

And to Congresscritters on both sides of the aisle:  play this fair or expect another steaming load of disgust coming your way from the citizens.  No one has time or patience for these shennanigans.

Filed under: Airline News by ajax
2 Comments »

I think it’s been at least 2 months since I’ve spoken about things like tarmac delays, flight cancellations and the infamous 3-Hour Rule.  Now that we’re solidly in hurricane season and our first hurricane, Irene, has passed through, I’d like to take note of what has been going on for about 1 full year now when it comes to delays.

First, airlines aren’t being financially crippled by this rule.  In fact, the impact of this rule so far does not appear to hardly make the radar screen when set next to the impacts of fuel and labor costs.  And it never should have raised that kind of notice.  I do think it has had some impact in some form because flights having gotten cancelled to avoid violating the 3 hour rule. 

Second, I think the forward thinking and proactive planning that has taken place in advance of storms and natural disasters has shown some positive results.  Airlines are recovering their schedules, by all appearances, far more smoothly and with far less impact to both themselves as well as passengers. 

I don’t think this rule has placed an undue financial burden upon airlines.  I think it has placed some burden upon them but that’s a burden that, frankly, in most instances they should have been bearing already.  Good planning and proactive decisions lead to a better organization, not a worse one.

Has someone been severely impacted by this rule?  I have no doubt that that is true.  There are several anecdotal tales of someone missing an important meeting or being unable to reach a city to manage a crisis as a result of their flight cancelled.  But the question is this:  Are we to bend the entire airline system to what are essentially a handfull of people who want to depart no matter what the cost and no matter what their status?

This is working better than anyone really wanted it to.  Even for the airlines and there is a reason why many airlines and airline CEOs have gone radio silent on the subject.

Filed under: Airline News, Airline Service by ajax
No Comments »

Earlier in the week, I read a brief CNN report about autopilots and automation dulling the airmanship skills of commercial pilots and found myself physically wincing at the idea that many would read this. 

I winced because this is a nuanced issue rather than something to be “announced” with a brief report.  It’s unnecessarily scary and just puts more rumour into the mill.

The commercial pilot today does use their flight management systems in all phases of flight and that isn’t a bad thing, it’s a good thing.  It allows for more precision and more precision means less delays and greater safety.  Part of those systems helps avoid collisions with other aircraft and other parts allow a pilot to route their aircraft around thunderstorms instead of right into them.  They allow better fuel management which means not only can the aircraft carry less fuel, it also gives the pilot a better picture of how much fuel they have left and therefore a better picture of when it is time to bug out to another airport.

You really have to walk in another man’s shoes to truly understand the job they do.  I haven’t served as a pilot but I do know the airline industry quite well.  Let me say this:  I have no problem with the level of training that pilots undergo today and I have no problem with the level of skill they fly with.  Today’s first year first officer receives better training and better oversight than ever before.

Think I’m wrong?  Ask an older pilot about the days before Cockpit Resource Management came into vogue.  First officers duties in those days often amounted to getting coffee and doing the dirty work without ever really getting to fly.  Now, those new first officers get to fly regularly and under the supervision of captains who have been trained well and who are in possession of the knowledge that a team works better than an individual.

Experience counts in the pilot’s world.  Flying the real thing with the stick or yoke does improve skills.  It’s true that airlines would prefer that not happen too often because the imprecise flying does incur a cost.  Simulators can do many things and help with many things but time in a simulator is also very expensive. 

Could there be a bit more hand flying both on takeoff and landing as well as at altitude?  Probably.  The Air France disaster shows just how important it is to understand flying at altitude and how much that experience counts. 

Lest you think that that experience at atltitude comes with no cost, it doesn’t.  Hand flying a commercial airliner at 35,000 feet in the air comes with conditions that are very unforgiving of a mistake.  There are times when the difference between overspeeding a wing and stalling a wing is just tens of knots in speed.  That automation keeps it there with computers and full digital control of engines.  It’s actually *safer* than hand flying and there is a reason why you don’t read about pilots playing with the aircraft by hand while transiting the country. 

They don’t want to die anymore than you do.

The automation is safe and pilots allowing the automation to do that work is safer than the alternative.  That said, I do wish airlines would schedule time in a simulator for those conditions that don’t come with penalties.  It’s the kind of experience that is hard replicate and it would help if a pilot were allowed to “push the envelope” under those conditions to understand better, through experience, what happens when “things go wrong”.   Removing any punitive actions for “crashing the simulator” would encourage them to learn just how wrong things can go in a very short time.  Knowing it and experiencing it are two different things.

Conditions for training pilots can always better.  But it’s also a balance between needing them to be working “the line” and training.   At the end of the day, it really hasn’t ever been safer to fly and pilots have never been better trained.

Filed under: Airline News by ajax
No Comments »

The Dallas Morning News Aviation Blog has a story about a memo from American Airlines’ TWU leadership warning its membership to not engage in any stealth work slowdowns.   Specifically, TWU representative Robert Gless says:

“Remember: anyone who participates in a job action would more likely be playing the role of someone who weakens TWU rather than supports it. DO NOT participate in any job action; instead participate in supporting your union. We strongly urge you to continue to work in your usual way and not to engage in any refusal to work overtime or D1 or any slowdown.”

The subtext of this is likely something along the lines of “We’re getting somewhere so don’t go and screw it up with shennanigans.”  I’m also sure the TWU is fully aware of the kind of court action that could be brought against it for such actions and the penalties that could result.

Filed under: Airline News by ajax
No Comments »

Someone please explain to me why we are paying exorbitant “security taxes” as well as exorbitant baggage fees?

USA Today has a story about baggage theft by an American Eagle baggage handler and this gentleman managed quite a significant take. 

Let me point out that when you charge fees in the name of security, etc, then there is an obligation to protect people from these thefts.  In addition, IF THIS MAN CAN STEAL THIS KIND OF STUFF TO THIS LEVEL, ISN’T THAT A CREDIBLE SECURITY WHOLE AS WELL?

After all, he’s accessing baggage that is TSA processed.  If you can steal from a bag, you can put a bomb in a bag.  Food for thought.

Filed under: Airline Fees, Airline News by ajax
No Comments »

Update:  Southwest says they are *not* one of the airlines commited to the 737 MAX.

It’s official.  The re-engined 737 is approved to offer and Boeing says it has more than 400 commitments to the new aircraft already.  We already know that 100 of those is American Airlines.

But who are the others?  I think it’s a no-brainer that Southwest Airlines is a player in this and I think the strange silence that has suddenly enveloped Love Field is an indicator. 

We also know that one of the players is *not* Delta Airlines since their recent order is for the conventional 737-900ER and while there aren’t conversion rights, don’t believe for a second that Boeing wouldn’t accomodate Delta if Delta wanted them. 

I think the next player is Ryanair.  Not just because they’re Boeing user but also because Michael O’Leary has been incredibly quiet lately.  Few things could keep that man quiet but I think an airliner deal is one of them.  I also don’t think that Airbus is a player with Ryanair.  Neither Airbus nor Boeing is going to be offering firesale prices on these new options but there two factors that offers Ryanair more:  Better fuel and operational efficiency *and* reliability.  The dirty little secret is that Boeing 737s do have a slight advantage on dispatch reliability over Airbus and that makes a big difference for an airline like Ryanair.

There’s a lot we don’t know yet about the updated 737s but one thing being studied is increasing the gross weight of the -9 MAX to be even closer in performance (range wise) the venerable 757s.  That would be an A321 killer.

I also wonder if we aren’t going to see raked wings vs winglets on the new designs.  Boeing already knows how to do them for the 737 (The new P-8 Poseidon has them) and they’re supposed to be better for the really long missions. 

It’s good to see some action on this that isn’t being forced by Airbus and I think we’ll hear about several big deals over the next few months.  Know what will be really fun?  Seeing the 747-8i Boeing livery on a 737 MAX aircraft.

Filed under: Airline News by ajax
No Comments »

Delta Airlines has decided to order 100 Boeing 737-900ER aircraft to replace aging 757 aircraft and I’m underwhelmed.  Supposedly the order was won on price and delivery positions and I buy that. 

What does surprise me is that this aircraft doesn’t quite have the transcontinental range one would want unless you buy them with 2 auxiliary tanks and then you’re talking about reduced cargo capacity.  I don’t think these are being purchased to replace *all* 757s and I don’t think this means that Airbus is out of the game for single aisle aircraft. 

I think these purchases are for high density, low fare routes that are being served by 757s.  I also think that Delta will manage its 757 fleet (one of the largest in the world) so that it maintains that kind of lift for some years to come.  That said, some of those aircraft are getting old and its time for them to go. 

In addition, I don’t think this order signals one thing when it comes to fleet planning for Delta.  I do not think it means that Boeing is still the preferred provider.  I do not think it means that Delta is going to harmonize its fleet more.  I think it simply means that Delta needed 100 aircraft with seating for about 180 passengers and that’s it. 

Any guesses are just that:  guesses.  I suspect that Delta remains in negotiations for replacement aircraft for other parts of the fleet and I think that that does not include negotiations with Bombardier for its CSeries aircraft.  Whatever second part of this single aisle order is, I firmly believe it will belong to Airbus or Boeing.

Filed under: Airline Fleets, Airline News by ajax
No Comments »

According to the Dallas Morning News, Southwest CEO Gary Kelly says that as a result of the Airtran ALPA MEC decision to not have their membership vote on the proposed integration agreement, tens of millions of dollars in financial incentives are now off the table.

One thing about Southwest and its employees, even its unions, they all understand that to experience reward, the deal has to get done.

Apparently Airtran-ALPA didn’t take that into consideration.  What will be amusing is if Airtran-ALPA thinks that those incentives will go back on the table.  My guess?  They won’t.  Those incentives were for a quick deal and a smooth integration.  Southwest doesn’t pay for mediocre. 

No, really, they don’t.  And SWA employees know that.  I do wonder just how hard SWAPA tried to sell the deal to Airtran-ALPA.  I also wonder if there will be a backlash against Airtran-ALPA leadership at this point.  If I were an Airtran pilot and I had the opportunity to A) go to work for SWA and B) earn not just more money but a lot more money and C) I just lost my one shot at real financial reward for doing the deal, I would be pretty unhappy. 

Next up is mediation between the two parties and if that doesn’t work, then we see binding arbitration.  The longer this takes, the less Airtran pilots will see in reward.  Will there be a better seniority deal on the table?  I don’t know.  I’ve never been able to find out the details but I suspect that the deal only gets worse from here on out.  SWAPA approaches negotiations with a sense of honor and I doubt seriously they find Airtran-ALPA’s behaviour funny or very forgiveable.

Filed under: Airline News by ajax
No Comments »

We’ve learned that ALPA-Airtran has decided not to submit the pilot agreement decided upon between them and Southwest Airlines APA union weeks ago.  ALPA delayed their vote for several weeks and now it’s coming out that there will be no vote.

SWAPA (Southwest Airlines Allied Pilots Association) will be the controlling union when this merger is over.  ALPA has no chance of becoming the controlling union and ALPA has kind of allowed things to spin out of control more than once over the past several years (think US Airways pilot integration and what that resulted in.) 

SWAPA membership appeared to get slightly feisty upon learning the details of the agreement but quickly settled down and started voting.  ALPA-Airtran almost made me think of that husband who is afraid to go home and tell his wife he just gave some guy their life savings to start a restaurant.  It’s as if ALPA-Airtran leadership felt very timid about promoting this deal and really gave no indication as to why they would feel that way.

My thinking?  Well, I have wondered if national ALPA leadership isn’t feeling frustrated these days.  The US Airways thing didn’t go so well and the two chapters involved in the United/Continental merger don’t appear to be able to agree on what kind of coffee to have at their negotiations.  And let’s not forget their second failure to organize jetBlue as well. 

Furthermore, they got spurned and insulted by rogue elements in American Airlines’ APA and by all appearances independent unions or non-traditional pilots unions appear to be gaining strength at ALPA’s expense. 

So, did ALPA-Airtran get slapped at by the national union?  I would like to think that didn’t happen in light of the fact that its president is the very reasonable Lee Moak but Lee Moak is just one man in a forest of much more traditional union types. 

Let’s not forget that ALPA at both the national level and within Airtran have got little to lose by being obstinate.  The union leadership will not control the Southwest pilots and that is certain.  But there may be the hope that if they play extra hard in the SWA/Airtran deal, they’ll be perceived as doing their job by membership at other airlines. 

But there is a price to be paid for that behaviour.  That price, however, is exacted upon the rank and file Airtran pilots who arguably have quite a bit to gain from this merger in terms of benefits and salaries.  In addition to those gains, they have a lot to gain by going to work for an airline that has an excellent record of working with union leadership that is arguably very strong (SWAPA). 

So, I ask you:  Should the national ALPA leadership have a dog in this fight?  I think they have a duty to represent their pilots in this merger but I don’t know if they should have overriding influence on the negotiations either.  I suspect that had the agreement been put to a vote among Airtran pilots, it would have passed and the merger would have gotten on with getting done.  But that would have essentially put an end to ALPA’s ability to influence the merger or stay in the spotlight.

Filed under: Airline News by ajax
1 Comment »

Christine Negroni, blogger and journalist, has written that foreign ownership restrictions of US airlines is due for a change that would permit cross border mergers.  She points out that the five biggest airlines by market capitalization are *not* US based airlines but rather airlines such as China Airlines, Singapore, Cathay Pacific, China Southern and LATAM. 

The problem with her argument about market capitalization and how foreign ownership could drive that for US airlines is that it ignores a critical element in why those airlines have such high market caps.  They’re well run airlines in areas of the world where money have very few places to invest in well run businesses. 

The problem with US based airlines and their market caps is that they’re not well run airlines.  Foreign ownership doesn’t change that.  Trans-border mergers don’t change that either.  If you think a foreign airline is going to buy a legacy US airline and run it better, you’re kidding yourself.  Those same named airlines are interesting in that they also have access to a far lower set of costs in operating as airlines than US based airlines enjoy.  In addition, they enjoy density on their routes that few airlines do get to enjoy and they also enjoy a certain “protected status” in their respective regions that airlines in the United States don’t get. 

Furthermore, if you think that a merger between parties like American Airlines and BA/Iberia means that the BA/Iberia leadership runs the show, think again.   While BA/Iberia knows how to run a smallish network with a global long haul business, they don’t know how to run an airline in the very unique competitive environment that the US is.  American Airlines knows how to do both and they have something that very few other airlines have and that is the cash management know how for a theoretical combined unit enjoying $48Billion plus in revenues. 

Here’s the thing:  The US market is literally unlike any other airline market in the world.  Some markets see one or two LCC carriers and 1 or 2 legacy airlines whereas the US has 4 enormous legacy airlines that would compete on a revenue basis with any other airline in the world.  In addition, the US market has the largest LCC style carrier in the world with several other major LCC carriers in its market too. 

Furthermore, there is no other place with the kind of network flying going on that we see in the United States.  And the competitive market that represents is unyielding and brutal when compared to any other region in the world. 

The ability for foreigners to own a US airline or for a US airline to merge with a foreign carrier or carriers is not going necessarily improve the financial health of a US airline.

That said, I, too, think the rules should be amended as long as we preserve our strategic interests in having the airline system that we have.  The US airline system is a strategic asset worthy of preservation for both economic and defense reasons.  It’s a global marketplace but it’s not a globally ruled marketplace and that’s important to remember.  There are just a tiny handful of countries that enjoy that kind of transparent marketplace that we provide for ourselves and preserving our interests is not counterproductive to the airline industry nor US interests.

Filed under: Airline News by ajax
No Comments »

Various media reports point to Boeing leaning heavily towards a “minimum” investment strategy in defining what the new Boeing 737 Re Engine would look like. 

That means an aircraft that receives enough modifications to handle the heavier CFM Leap56 engine with a reduced fan diameter which should make the 737 models roughly equivalent to the Airbus A320NEO with about 2% cost efficiency advantages over the A320NEO.

My problem with this is that it simply confirms the Airbus A320NEO as the right move and offers Boeing little advantage over the next 10 to 15 years and possibly puts it at a disadvantage over that time frame since there are fewer areas to incrementally improve performance of that airframe over time.   One example is that the 737 already has winglets (aka “sharklets” on the A320). 

In addition, this is the creeping incrementalism that we saw at McDonnell Douglas over nearly a 2 decade time period that led to their ultimate demise.  Aircraft manufacturers don’t win over the long term with derivatives and I’ll point out that there have been a total of 9 major derivatives of the 737 with several sub-derivatives of those as aircraft as well.  That’s an aircraft that has run its course without something game changing.

If it were to be a Re Engine strategy, it would have been far more encouraging to see Boeing design a new wing or a modification to the wing to bring additional gains.  It would have also been more encouraging to see a modification to the nose gear to permit a full on adoption of the CFM Leap56 and, possibly, even the addition of a 2nd engine choice (Pratt & Whitney GTF).   Yes, that begins to look like a new airliner but it puts Boeing firmly ahead in the narrow body game.

My own preference was to see Boeing make a move for an entirely new aircraft with introduction into service in 2018.  It would have been a difficult challenge but it is one that Boeing is in position to achieve.  It’s learning curve with new materials and design approaches has peaked. 

Offering that you couldn’t figure out how to immediately ramp up production to 40 to 60 aircraft a month is a somewhat lame excuse for backing away.  If you can build if efficiently at current production rates (in the mid 30’s per month), you can figure out how to build it at a 60+ aircraft rate when that time comes.

This, in some ways, smells like Boeing trying to maintain the older airliner to use as an replacement for aging military aircraft such as what they’ve done with the 737 in creating the Boeing P-8A Poseidon (replacement for the venerable P-3).   It’s notable that even that aircraft got a better wing in the form of having raked wingtips a la 767-400ER for longer duration, efficient flying.

My greater point is that you don’t win and you don’t grow as a company by playing “keep up” and playing it safe.  Airbus managed a coup by forcing Boeing’s hand and scaring them away from a new design.  Somehow, I severely doubt that a Boeing led by someone such as Alan Mulally would have adopted such a strategy.

Filed under: Airline News by ajax
No Comments »

The National Mediation Board is stepping away from talks between American Airlines and the Transport Workers Union and this is going to hurt both parties.  In addition, I think this is an indication of just where talks may go between American Airlines and its other unions.

The NMB said that “the amount of time expended in these mediated sessions, insufficient progress and insufficient hope for progress, the NMB could not justify scheduling future mediated sessions at this time. “

This could describe progress in union talks involving American Airlines across the board. 

Sadly, I think AA and its unions will continue to argue that its the other side instead of recognizing that failure to come to an agreement is badly damaging both parties.  American Airlines is hurt by the clear inability to bring a new wage and benefits structure to its operating model and employees are hurt by working under agreements that are diminished in value every year they go unmodified. 

I put the problem on American, however.  It’s the company’s duty to provide leadership to its employees whether they are represented by unions or not.  Ultimately, the buck stops with executive leadership and executive leadership isn’t finding any new ways to engage and lead their staff.

Filed under: Airline News by ajax
No Comments »

US Airways went to court to get an injunction against its pilots union for conducting a “safety campaign” designed to slow the airlines operations and put pressures on US Airways.  The judge didn’t grant immediate relief but he did something else that does signal that the pilots union would be well advised to reconsider its actions.  He granted a quick hearing date and refused to move jurisdiction to a union friendly US Federal Court in New York. 

US Airways “East” pilots (former employees of the airline before it was purchased by America West) seem to enjoy shooting themselves in the foot.  This isn’t an action that is likely to find patience with from a US Federal Court and it’s an unwise move in general.  You don’t sucker punch your own company smugly while demanding a new contract when you can’t even get half of your membership to go along with you.

Doug Parker and America West should have eliminated the US Airways name and signaled who the regime was when it bought US Airways.  Sadly, US Airways pilots (EAST) think they still work for the same old airline and in the same old airline industry.  It would be wise to take a look at what happened to American Airlines pilots’ union, Allied Pilots Association, when it did something similar more than a decade ago.  It cost them millions of dollars in fines after a “sick out” campaign that failed completely.

Filed under: Airline News by ajax
No Comments »

Southwest Airlines is entering the Atlanta area 3 months after the consummation of its merger with Airtran Airways with a low key campaign called Random Acts of Coolness.  The airline is sending employees out into the Atlanta area performing good and kind deeds such as handing out water to police and firemen and the general public.  $100 gift cards are being donated to schools.  Some employees spread out to area schools with gifts such as tote bags, pens, etc for teachers preparing for the new school year. 

Yes, it’s a marketing effort but it is also really how Southwest Airlines works.  Embracing the communities it serves is a hallmark of how Southwest wants to invite business.  It’s about the long term and investing in people locally. 

This is where it gets difficult for Delta because although that airline is known for its southern hospitality, Southwest practices a certain sincerity and humility in becoming a part of a community that is both hard to resist and hard to fight.

Filed under: Airline News by ajax
No Comments »

AMR, Inc., the parent company of American Airlines and American Eagle is doing everything it can to make the American Eagle Spin-Off successful.  More details are percolating to the surface and now we see that in addition to AMR taking on American Eagle’s debt and leasing aircraft at a nominal fee to American Eagle, it’s giving American Eagle a 9 year contract for flying that tapers off during that duration.

Right now, American Eagle performs about 90% of all regional flying for American Airlines in areas as diverse as the Caribbean, Canada and throughout the United States.   That will slowly end as American also gets the right to withdraw flying by aircraft type over the length of the contract.  In theory, this lets both parties have an orderly transition and it doesn’t preclude American Eagle from winning that flying back in a competitive bid for the contract.

Regardless, it’s hard for me to imagine American Eagle flying off with success.  The airline is burdened with aircraft ill suited to competitive flying against other regional airlines and its labor contracts are some of the most generous around.  Furthermore, just how far AMR is going to divest itself from American Eagle is an indication of just how difficult it is to sell the airline and if no one wants it, there is a reason for that.

Filed under: Airline News by ajax
No Comments »

The Cranky Flier wrote on Monday that the “tax holiday” on airport taxes caused by Congress’ inaction on funding the FAA might have caused capacity planning problems for airlines and that it was therefore sensible that airlines would raise fares to close that gap to maintain predictable demand. 

What the hell?

In addition to sounding like an apologist for airlines, that post may well ought to be a candidate for his own Cranky Jackass award. 

When reading his blog entry, one gets the sense that this brief pause in taxes would have sent airlines into a major tizzy when it comes to capacity planning for the winter season.  I assure that that was not a fear and that airlines are quite a bit more flexible than that. 

It was obvious that the brief elimination of those taxes was just that:  brief.  That meant that for a brief period in time, a rise in demand would not have overwhelmed their aircraft or flights in any major way.  More to the point, while airline demand is price sensitive, it isn’t *that* price sensitive.  If it were, airlines would be able to fill aircraft 100% by offering just a week or two of sales going into the next season.  And it wouldn’t take a big sale. 

But we know that airlines don’t experience such opportunities and to suggest otherwise and justify what was, at best, a greedy move is just wrong.

While I do not like the move on the part of the airlines, I’ll also say that that they were free to do it and they’re also free to experience the negative press from doing so.  I don’t think they should “hold it” and give it back to the FAA either.  This is business, they made their move and it wasn’t illegal or sneaky but it was greedy. 

The point made by more than a few Congresscritters that airlines have been grousing about taxes for years saying they depressed demand and now they’re enjoying the largess of the absence of those taxes was also valid.  But airlines like to bitch about those things that directly affect their demand and never seem to pound on the table over taxes that affect travel.

You’ll never hear an airline scream about the taxes on rental cars and hotel rooms imposed by municipalities and states.  And, yet, those taxes are far more egregious in many cases than any airline tax.

Taxes are necessary and they are what pay for our infrastructure.  Complaining about them doesn’t make them any less necessary.

But back to my original point:  Cranky’s argument is disingenuous at best and far beneath him, in my humble opinion, compared to the body of opinion he’s shared over the past many years.

Filed under: Airline Fees, Airline News by ajax
No Comments »

AMR, holding company for American Airlines and American Eagle, is saying that it might keep the more than $2 Billion in debt that is associated with American Eagle in order to give them a good send off in the attempted spin-off of the airline.  In addition, they’re considering leasing the existing aircraft to American Eagle at a token rate to give them an additional boost.

Why?  Because it’s damn hard to sell a regional airline that primarily is stocked with 1st generation 50 seat regional jets.  No one wants a company laden with old equipment.  Furthermore, American Eagle is already overburdened with higher labor costs than many regional airlines.   There is a reason why Delta couldn’t find a buyer for the similar COMAIR regional airline. 

That means that AMR is willing to take on additional debt risk just to find a way to enjoy the lower costs of other regional airlines servicing their routes.  That willingness makes me wonder just how far out of line their labor costs are with other regional airlines.

Filed under: Airline News by ajax
No Comments »