There have been a few recent and prominent incidents involving the Russian airliner Tu-154 that have resulted in a number of people and agencies calling for it to be grounded.  The most prominent was the loss of the Polish President last year in a severe accident and the most recent was a Tu-154 that had an engine explode and cause a massive fire when taxiing for take-off to Moscow in Surgut.

A lot of criticism is levied at the Tu-154 (and it’s cousin, the Tu-134) is probably mis-placed.  If you look at the statistics involving the Tu-154 and its closest Western relative, the Boeing 727, the Tu-154 has a pretty comparable record.  In fact, most incidents in the last 5 years were related to human error, not an aircraft failure of some sort. 

The loss of the Polish President was due to a pilot risking a landing that his aircraft wasn’t capable of making safely.  Other hull losses were results of terrorism or mistakes involving governments firing missiles (Ukraine) during exercises.   Another hull loss was due to air traffic control mistakes in Switzerland involving the Tu-154 and another cargo aircraft. 

There were 1015 Tu-154s and 852 Tu-134s built and those two variants are roughly equivalent to the 1800+ Boeing 727s built over roughly the same duration.   Between the Tu-154 and Tu-134, there are roughly 94 serious incidents resulting in approximately 64 hull losses.  The Boeing 727 has a record of 325 “incidents’ (serious and not serious) with hull losses totaling approximately 110 airframes.   One would be tempted to say the 727 has a worse record but it should be recognized that 727s typically have flown more cycles than the Russian airliners over the same duration.

Is the Tu-154 dangerous?  No more so than other Western airliners of a similar generation.  What’s dangerous is airline pilot training and air traffic control facilities and maintenance facilities in Russia and other former Soviet Bloc and middle/central Asian countries.  Those places don’t always have the best standards for training pilots or the best equipment for weather restricted landings or the best maintenance workers with the best training at the best maintenance facilities.

It’s notable that, over the years, there have been some very boneheaded moves made in the 727 that resulted in very bad accidents.   Early in the life of that aircraft, its very safety was questioned when a few pilots literally flew them into the ground when landing because of its high sink rate on approach.  Training and procedures were changed and that aircraft went on to a very successful life. 

Would I hesitate to take a trip on a Tu-154?  Only if the airline was poor or had a poor safety record.  The basic airframe is perfectly safe and the most modern Tu-154M models are up to any Western standard.  The “B” models are old but they aren’t necessarily unsafe by definition either.  It’s all about the users.

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Expedia has made another move against American Airlines in removing them from their system altogether now.  That means that American is no longer listed on 2 of the 3 biggest online travel agencies:  Orbitz and Expedia.   As I write this, they remain on Travelocity.

American says that they aren’t experiencing any decline in business and that may remain the truth for now as they’ve been in the media enough to remind people to go directly to their website for booking passage to a destination.  But that doesn’t mean this works for AA in the long run.  It’s notable that neither Delta nor United nor any other airline has decided to remove their listings from the big 3 agencies and that might just be because they are enjoying even better bookings all of the sudden.

American says this is about offering a better experience for the consumer by offering their direction connection that will tailor flights to the person shopping.  Online travel agencies says that that methodology means that American controls what the shopper sees instead of giving the shopper the chance to see the lowest fares. 

The truth is, the online travel agencies are more “right” in this fight than AA is.  This is about raising revenues by only letting the customer see what AA wants them to see based on their history. 

Airlines such as Southwest and jetBlue have made their business rely upon their own websites for booking historically and they have done fine with that approach.  Now both airlines are seeing value in being listed alongside others on some of these sites and that is as much based on accessing a larger audience as it is the fact that they have competitive fares.

I suspect we may see a different set of results from either party in another 2 to 4 weeks.  Both sides have to determine the real impact to their business models and then decide if the lost revenue (and believe me when I say both sides are losing money over this spat) is worth it in the short term.

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Sun Country Airlines has decided to team up with the Mall of America in Minneapolis / St. Paul to offer travel packages to the British next summer.  Sun Country plans to fly their Minneapolis – London route again (via Gander, New Foundland each way).  Flights will begin late May and continue until the first part of September.

This year, the route will fly to London Gatwick airport.  Last year, it flew to London – Stansted and pitched the connection possibilities with European discounters Ryanair and easyjet.   This year’s seasonal service will offer twice weekly service compared to once a week last year.

As for the travel packages to the Mall of America, I actually do think that might work well for them.  The US dollar is seriously devalued right now and there isn’t much hope of seeing it rise against the British Pound (or the Euro for that matter.)  It makes shopping here cheap.

And, frankly, Minneapolis / St. Paul is one fine place to visit in the summer anyway.

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ContiUnited just lost a ruling in arbritration that will forbid it from marketing flights on United Express aircraft with greater than 50 seats as Continental flights.  Continental had planned to have United Express fly routes out of Continental hubs in Houston, Newark and Cleveland in the new year. 

Arbitrator Richard Bloch ruled that that can’t be done as it would be a violation of the collective bargaining agreement in place with Continental pilots.  While Continetal and United are a merged company named United now, the pilots and flight crew are still flying as two different companies and will be for at least another year.

This is a pretty big blow to Jeff Smisek, CEO of United, and it was, perhaps, a bit bold of him to try to make this move without buy-in from the Continental pilots.  Continental has been constrained for years with their contract with their pilots on regional jet flying and it needed those rules relaxed in order to compete with other airlines.

United needs to get their labor ducks in order before attempting to press on with other controversial things such as this.

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ContiUnited Airlines has decided to add a “peak travel” surcharge adding $10 to each segment of a ticket and American Airlines raised the ante by raising fares about $22 which Delta Airlines matched.

Higher oil prices which lead to higher fuel prices is leading to this drive to earn more most likely.  However, it’s notable who is leading this rise in air fares.  It’s the SuperLegacy airlines and this points out just how much pricing power these folks potentially have. 

It’s unlikely that the LCC carriers will exploit these air fare increases immediately.  Everyone in this business needs to recover and rebuild their war chest.  Some have quite a bit on their plates already (Hello Southwest) and some are just battered from a few bad years (Hello jetBlue). 

I still think we’ll see serious fuel charges in the future and especially on international flights.  But all this potential for profit is going to do something else:  attract new entrants to the business.  And there are plenty of opportunities to compete against high fare SuperLegacy and Legacy airlines.  If these profits (via air fare increases) hang around for the next 6 to 12 months, I do think we’ll see someone announce the start of a new airline. 

In the meantime, the smart traveler will book early and book off-peak flights.

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We just saw what an impending storm can cause when it comes to flight cancellations.  One thing that people often wonder at is the reason their flight was cancelled when it isn’t snowing yet in their departure city.

In fact, people are often left wondering what happened to their flight when it isn’t even forecast to snow in their departure city.

It has to do with with an airline’s network.  An airline may have to cancel a flight in one city because the aircraft is stuck in another city due to weather.  That’s really a common occurrence. 

Sometimes an impending storm results in an airline cancelling flights in advance of the arrival of a snow storm.  There are a lot of valid reasons for doing this.  It may be unwise to send a flight out to a city where the airline doesn’t customarily overnight aircraft.  Doing so potentially leaves the aircraft and its flight crew orphaned in an unknown city and unusable when weather does clear.

Since storms, particularly snow storms, can leave an airline’s network destroyed, it is attractive to the airline to keep its aircraft at its hub(s) so that when the storm does clear, it has the equipment to get people on their way immediately. 

Another reason is that snow storms approach a lot of cities with a great deal of uncertainty.  It’s poor safety to send aircraft to a city prior to a potential snow storm because that storm may arrive early causing the aircraft to divert or hazard a landing in poor conditions. 

Flight cancellations are painful not because of the immediate inconvenience.  They are painful because airlines often are incapable of taking care of a customer for days afterwards.  That may be unacceptable.  There isn’t anything that an airline is going to do about it unless forced to.  The best alternative is to really weigh consequences of sticking to your travel plans.

Most airlines welcome a change to an earlier flight and offer the ability to do so without penalty in these situations.  Take advantage of that.  Sometimes no matter how much you want to go, you can’t.  Skip your trip if you can get a refund and many airlines will offer such a thing during bad storms. Flex a little and avoid being that person stuck in an airport for 4 days clinging to the idea of taking a flight somewhere.

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When slots to fly from the United States to Tokyo’s Haneda airport, there was a mad rush to be awarded one or more by almost all the major airlines.  Access to Haneda airport is seen as very valuable to an airline since it is much closer to central Tokyo.

American Airlines won one of those slots to fly from New York City to Tokyo and had originally scheduled their flights to start in late January.  Now, American Airlines is asking for a “modest” extension to March.  Why?  Because business is slow for January.

I’ve always had a problem with airlines winning these opportunities and then later deciding to defer service to a more convenient time.  When these proposals are made, a great deal of justification for the award takes place in the form of arguing that traffic exists to sustain that service.  The demand is there and the airline promises essentially that it will offer the best service possible.

If that was true enough to win the award, then it’s true enough to fly the route when you originally schedule it.  If an airline cannot deliver on its promises in its proposal, that slot should be given to someone who will execute on that route.  While I agree that this really is a very modest delay being requested, it is contingent on the idea that business will pick up and nothing guarantees that it will.  It is all predicated on assuptions that may or may not be true.

An award for a route should require that an airline deliver on its promises or suffer the penalty of winning the award.

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American Airlines was allowed to cancel its contracts with Orbitz by a Chicago based judge 3 days ago.  Orbitz and AA have had a dispute going on for several months now.  American Airlines wants to supply a direct connection to travel agencies and travel agencies want to use global distribution systems such as SABRE and Travelport’s Worldspan.  American says that their direct connection is cheaper and faster.

Both travel agencies and airlines will be watching how this dispute plays out.  American has tried before to be a leader in air fares with big consequences.  They attempted to rationalize fares in the early 1990’s with disastrous results that lead to AA returning to fare structures like its competitors again.

If AA is successful, count on other airlines following its lead.  However, success isn’t just winning in a courtroom and denying fares to Orbitz.  Success comes from AA not suffering a revenue drop from pulling its fares from Orbitz.  It’s quite possible that consumers won’t notice that AA’s fares are missing on Orbitz and they’ll book with other airlines.  If AA can’t maintain its sales, it may be forced to work with Orbitz again. 

If American is able to maintain its revenue and execute this plan against other online travel agencies such as Expedia and Travelocity, we’ll likely see other airlines folllow in AA’s footsteps.  My own take is that this is a risky move for AA since air fares are largely a commodity in the marketplace that are bought on price primarily.  This may give other airlines an opportunity to game the situation and raise air fares and benefit more from those air fare increases than AA can.

In a move that certainly surprised me, Expedia decided to “de-preference” American in a show of support of Orbitz.  Expedia has adjusted its system to show AA at the end of list of available airlines and no longer will show its fares.  This move was done to support Orbitz and out of concern of what AA will do when its contract with AA comes to an end in several weeks. 

“American Airlines has shown it only intends to do business with travel agencies through a new model that is anti-consumer and anti-choice.

“We believe American Airlines’ proposed direct connect model will result in higher costs and reduced transparency for consumers, making it difficult to compare AA ticket prices and options with offerings by other airlines.

“American Airlines’ direct connect model is of questionable, if any, benefit to travelers, costly to build and maintain and would compromise travel agents’ ability to provide travelers with the best selection.”

That’s going to hurt AA but I also think that AA may engage Expedia legally to stop that behaviour in the near term while it concludes its fight with Orbitz.  There is a signal here:  Airlines aren’t the only ones who have figured out how to work together to sustain their business models.

I think that AA is throwing its weight around like it continues to be the big dog among airlines.  In actual fact, they are the #3 airline by revenues in the US and they are the least profitable of the legacy and SuperLegacy airlines.  This isn’t a position of strength particularly when you consider the pressure AA is feeling to improve its profitability.

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Southwest got a big hand in the New York City market when it was able to lease slots at Newark Liberty International Airport as a result of the Continental/United merger.  Their original announcement had them flying to Chicago and St. Louis and those were good starts. 

Now Southwest has announced additional destinations from Newark and they include Houston, Phoenix, Denver and Baltimore.  Newark has suddenly become the more important airport for SWA as a result, too.

Those destinations will allow them to fly to their focus cities and it’s notable that 3 of the 5 initial destinations are fairly long haul flights for SWA.  Newark will be the real focus city for SWA rather than La Guardia and here is why:  they’ve already got a bigger toehold and that is going to make it a more and more cost efficient operation but, more importantly, they aren’t range restricted at Newark like flights from La Guardia are. 

Newark lets them connect people to focus cities better and grow the business.  Expect some flights to Atlanta in the future.  Airtran had them and gave them up but that doesn’t mean they aren’t worth it for SWA.  Airtran had just a small handful to Atlanta and mostly on their 717s.  Southwest can increase that frequency and with larger aircraft (come 2012) too.

Will SWA languish at La Guardia?  No but they’ll grow much more slowly and organically because those slots are valuable and they’ll cost a lot for SWA to acquire.  But having Newark in the area lets them form a good NYC base and get the economy scale they need.

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Southwest made its intention to purchase the 737-800 official a few days ago and while no one is surprised, it is gratifying to hear it has been made official.  This will be a good choice for SWA going forward and it would appear that their first deliveries in 2012 will be 20+ of the -800.  Gary Kelly has said that that is too small a fleet and indicated that about 80 in the fleet would be about right.  These new aircraft will be replacements for SWA’s older 737-300 aircraft rather than in addition to them.  However, the greater size of the 737-800 means that there will be significant capacity growth in 2012.

Interestingly enough, SWA started advertising for an ETOPS manager several days ago and *lots* of people noticed that.  ETOPS will be necessary for SWA to serve Hawaii.  Just a month ago, I wrote about SWA and Hawaii HERE.  Apparently all of the deliveries in 2012 will be ETOPS equipped aircraft so I think that my thoughts on SWA starting a Hawaii route in 4 to 5 years from now is a touch off the mark.

Instead, I’d say we’ll probably be looking at SWA starting routes to Hawaii in at little as 3 years.  They still have to get the aircraft and they still have to learn how to maintain that ETOPS fleet and they also have to figure out how to do the flights and from what cities should they be flown. 

Gary Kelly, CEO of Southwest, also made an interesting comment or two about the 737 and a new engine option and/or replacement for that aircraft.  Kelly rightly points out that Boeing is talking about having something for its customers in 10 years and comments that: “When you talk about something that’s 10 years from now, that’s not a solution, that’s an idea.” 

I couldn’t agree more. 

The Airbus A320NEO isn’t going to be a 737 killer by any stretch.  In that respect, Boeing doesn’t have much to worry about.  But Gary Kelly is right, Boeing hasn’t got anything on the table.  The next generation 737s started to roll out of the factory in 1996 and that isn’t all that long ago if we were talking about a new aircraft.  But the next generation 737 line weren’t “new” aircraft.  They were evolutions of the original designs. 

It’s true that engine technology is needed but nobody is really driving that technology all that much so far.  Both Airbus and Boeing continue to look at new engines as more an annoyance than a need.   The A320NEO isn’t a Boeing 737 killer but a new single aisle short to medium haul aircraft from Boeing is most definitely an A320NEO killer. 

It concerns me that all we’ve heard from Boeing is that their customers aren’t asking for new engines because it’s clear that airlines aren’t asking just for new engines but new airplanes.  And Boeing is behaving a bit too arrogant with respect to their customer base in my opinion.  I wasn’t much of a fan of the Bombardier CS300 so far but now I kind of hope it makes it and it’s a bit of a Boeing killer. 

If Southwest wants a new, efficient (as possible) airliner, it’s time to get to work.  Because of Southwest wants it, I guarantee you that every large operator of the 737 wants it too.  With fuel prices as high as they are and due to be higher in the future, even a 10 to 15 percent efficiency gain is something an airline can’t afford to ignore or defer.

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The Wall Street Journal is reporting that Delta is considering new moves when it comes to pricing in order to bolster their profits even more in the coming years.   Instead of another fee, this time it’ll be a surcharge.

A fuel surcharge, to be exact.  Delta wants to explore having fuel surcharges for both international and domestic trips.   It’s notable that Delta’s CEO Richard Anderson has plans to achieve a 10% profit margin for his company in the coming years which would be nearly unheard of. 

Fuel surcharges are in use in many other parts of the world today and they are used commonly in Europe.  It’s no surprise that many European airlines also earn a decent profit and did so even when the chips were down in their economies just a year ago.

But does that make it right?

Well, first of all, I think a 10% profit margin is actually unhealthy for the airline economy, at least in the United States.  It sounds rather reasonable but in most competitive marketplaces, a 10% profit margin for that kind of service isn’t really common. 

Second, companies tend to get addicted to fuel surcharges.  They are the airlines way of grabbing more money in lieu of getting more productive as times passes by.  A surcharge also levels the playing field among airlines and why should an airline who properly manages it fuel hedges not benefit more than airline who chooses to simply pass the penalty on to the passengers?

I think airlines would love to introduce fuel charges and I think if they could get away with it with respect to the FAA, they would all introduce surcharges instantly.  It would resemble the Great Baggage Fee rush we saw 2 years ago.  The problem is, this is just one more pricing complexity to be introduced for the consumer when it comes to choosing an airline flight. 

The typical consumer will have to find a price for a flight, weigh the option on baggage fees and then determine if the fuel surcharge raises the cost of that flight above an alternative flight.  Since an airline flight involves traveling from one place to another, I’ve got a better idea.

How about we start recognizing that some baggage is part of the bargain and how about we recognize that fuel prices (and their fluctuations) are also a part of running an airline business and get back to offering a *real* price for a trip instead of surprising consumers (and annoying them) on every trip?

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USA Today’s Today in the Sky had THIS story about US and European airlines no longer being the biggest airlines.   The criteria is based on market capitalization and it said:

Citing the airlines’ market capitalization values, IATA says they are Air China ($20 billion), Singapore Airlines ($14 billion), Hong Kong’s Cathay Pacific ($12 billion), China Southern ($11 billion) and LATAM ($11 billion). LATAM is the holding group for the recently announced merger that would combine Chile’s LAN and Brazil’s TAM airlines.

Let’s take a look at this.  First, it’s notable that none of these airlines (with the possible exception of Singapore Airlines) plays in very competitive home markets and all (except for Singapore Airlines) receive forms of market protection and support from their home governments.  Further, each of these is able to buy aircraft and finance these purchases through low cost financing being provided by import-export banks.   Finally, all of them benefit from relatively inexpensive labor compared to other parts of the world. 

Market capitalization really doesn’t mean much in terms of size except for how people are valuing the company.  It is the value of a share of stock in the market place times the number of shares out standing and often market caps are distorted by individual owner perceptions of the company and the market it plays in.

Some like to measure airlines by fleet size or the number of markets it flies to but each of those measures can be distorted too.  Are we to equate a fleet of 250 regional jets with a fleet of 250 mainline aircraft?  Similarly, is an airline that flies to 50 markets with one flight a day going to be the same as an airline that flies to those same 50 markets 5 times a day?

A far better measure would be revenue passenger miles.  That is the number of passengers times the number of miles the airline flew those passengers.  In other parts of the world, the measure is revenue passenger kilometers but it is the same measurement. 

By that measurement, European and US airlines continue to dominate the world’s airlines.  They also enjoy a wider mix in their fleets and tend to travel to far many more markets as well.  They are airlines that are typically broad based in everything that they do. 

These airlines, however, don’t enjoy the same market caps because their governments have engineered open skies agreements with most other places or at least liberal travel treaties.  They see far more competition compared to these other airlines and most do not benefit from low cost financing for their fleets either. 

Do we really want to believe that Air China is capable of buying and operating Delta Airlines?  It isn’t.  Even Singapore Airlines would be challenged by owning and operating a US or European Airline.  It is a bad idea to compare airline size and speculate about the future on the basis of what an airline is being valued at in the marketplace.

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The Dallas Morning News Airline Biz Blog has this comment from US Airways President Scott Kirby where he asserts that a la carte fees will represent 100% of their profit for their fiscal year.  He cites those fees as making a huge difference in US Airways and the airline industry as a whole.

The part I object to is characterizing those fees as “new” revenue”.  Those services have always been provided and they’ve always had a cost and that cost has always been a part of pricing.  The difference is in the unbundling and that doesn’t make it “new revenue.  It makes it more identifiable but I question whether airline profits we are seeing now are truly a result of a la carte fees. 

You see, I keep looking at the airlines who essentially have no fees or minimal fees and those airlines continue to be rated best for service and enjoy some of the highest profits in the business. 

More likely, airline profits are coming much more from capacity restraint and let’s not kid ourselves, there was a huge amount of capacity removed from the market(s) at the start of this crisis and it continues to be closely managed by airlines so far.  So much so that most airlines are seeing historically high load factors on their flights.  Load factors that arguably cannot be sustained forever. 

Why?  Because an 85% load factor indicates that you’re actually leaving money on the table in the form of passengers who are not flying because A) the prices are too high or B) they cannot get on the flights they need to be on.  Airlines know this and while they’re enjoying the profits, someone will blink eventually. 

Most likely, airlines such as Southwest or jetBlue will start to add capacity and growth to their systems to take advantage of those deferring travel presently and that will force legacy and SuperLegacy airlines to reconsider their capacity management. 

Consolidation has made that capacity restraint easier for now but that won’t last and I still see one airline who arguably could either be removed from the market or who will go through bankruptcy organization and then the game changes again.  That’s American Airlines, by the way. 

This business is highly cyclical and we’re just seeing the beginning of the top end of a cycle.  Don’t kid yourself into believing that airlines have finally figured out how to manage themselves in this market.

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Milwaukee has had 14 consecutive months of record traffic and if you ever doubted whether or not airline competition in a market is good, you should get over that.

Airtran, Frontier and Southwest have all been battling it out there and it has been good for passengers and businesses alike.  Yes, there is such a thing as too much competition but in this case we’ll see Southwest rationalize with Airtran and Milwaukee will continue to benefit from two airlines who want their business.

Markets with healthy traffic are always marked by health competition.  Witness what it is like in NYC, Los Angeles, Chicago and even Atlanta.  Now consider what it is like in places like DFW, Cleveland, Houston and Cincinatti. 

I’ve no objection to airlines earning a profit and you shouldn’t either.  But strong competition keeps airlines lean and well managed.  It’s notable that American Airlines probably experiences the least competition overall among the SuperLegacy airlines and is also the least healthy.

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Airlines had a lot of challenges 2 years ago but none more challenging than the volatility and high prices  of oil.  That got a lot easier to deal with as the economies of the world melted down but the price of a barrel of oil is slowly rising again.

Oil went over $90 a barrel this week and it’s likely to go up a bit more.  Why?  Well, it isn’t because demand for it is increasing.  It’s because it is a popular speculation in the markets since it is dollar denominated (priced in dollars) and the US dollar has been pretty weak.  If you got a stack of dollars that, in the world market, is eroding in value, speculating oil (rising in price) can be a smart hedge against that loss of value.

Will it rise again to $140+ soon?  That’s anybody’s guess.  My guess is that it won’t go that high but I don’t think it is going to sink to $50 or $60 a barrel either.  Our world economies have stabilized in their fall but they aren’t necessarily robustly growing either.  Lots of countries have bought US debt and have a lot of dollars or dollars invested in that debt and they need to mitigate against the low value of the dollar to preserve their money. 

Oil speculation is starting to resemble speculation in gold and while I do think that we need to stabilize that market in the future, it requires the cooperation of *all* the major oil producing countries and that’s a tough thing to get. 

Airlines are, hopefully, already engaged in strategies to mitigate against fluctuating fuel prices through hedging.  They’ve got some profits coming in now and they can rebuild their cash holdings and start planning their fuel strategies with a more long term view.  Or, at the least, most of them can. 

Ultimately, oil prices will stabilize when the US (and the rest of the western nations) have stabilized their economies, their currencies and have a more solid foundation on which people can plan their investments.  The more uncertain the economies are, the more uncertain oil prices are going to be. 

The United States has largely stemmed its economic free fall and has even enjoyed some very modest gains in growth and unemployment.  The current administration hasn’t received the credit it deserves for reacting quickly and forcefully and without reserve.  Had they not done that, oil would have been much cheaper but only because we would be in a great depression and experiencing deflation and double digit unemployment. 

But this problem isn’t going to go away for at least 5 to 7 years.  Oil will be unstable and fluctuating for some time to come and airlines would be wise to deploy a long term strategy to cope with that.  Fuel hedges and renewing fuel inefficient fleets are the best way to go and waiting even a short while could end up costing airlines all their profits.

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Unions attempting to organize Delta employees have been rejected over and over again and to the surprise of many.  While some elections have been somewhat close, the results were pretty clear in every case.  Despite new rules favoring organizers, unions have had no real traction at this airline.

Unions can claim intimidation all they want but that doesn’t really fly in the airline world, pun intended.  Airline employees are well accustomed to unions, even those at Delta, and I’m very skeptical that even Delta can intimidate employees away from asking for a union if they really want it. 

Furthermore, I think the idea that Delta offering criticism of these unions isn’t intimidation.  If the unions can call Delta management dirty names and criticize their performance, it’s only fair that Delta management be allowed to throw a little mud themselves.  It’s notable that one union thought it effective to liken Delta CEO Richard Anderson to Adolt Hitler and that just goes a bit too far.  Among US airline CEOs, Anderson is one of the best and certainly well respected. 

The truth is, the employee environment at Delta is working for both the employees and management for whatever reasons may exist.  A union is only going to add value when those employees feel they aren’t getting fair treatment at the table.  Obviously that condition doesn’t exist today.  Why pay union fees when you’re interests are being accounted for?

Union organizers would be better off waiting a few years rather than continuing to rabidly fight this battle.  In fact, unions carrying on with this are likely to put off employees rather than win them over at this point.  Witness the fact that Delta flight attendants are asking the AFA to leave them alone.  These people are annoyed now, not enchanted.

That isn’t to say that Delta management has a free hand now either.  It means they’ve won, for now but they’ve got to remain on their own best behaviour to keep these conditions.   Attempts to be arbitary in their treatment of these labor groups will result in a change of heart.  Right now, I think Delta management gets that and they’ll keep their eye on the ball.  Should that management corps turn over, it may become a different situation.

These unions would be better off attempting to organize some regional airlines that are non-union.  These are employee groups that may well see value in them and it’s a better place to start at this time.

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Volaris starts up service between Guadalajara, Mexico and Chicago on December 13th and, yes, they’re serving Chicago Midway Airport.  This is clearly part of the interline/codeshare agreement they’ve been working on with Southwest Airlines. 

They’re currently offering service to Los Angeles, Oakland and San Jose and I’m sure you see a theme here, too.  They are all Southwest cities.   The initial announcement on the partnership between Southwest and Volaris included just those cities and connections being offered on Southwest’s website are for Western states primarily. 

This is a partnership that will get expanded upon quickly.  Just as I’m sure that Chicago is a part of the strategy, I think we’ll also see potential connections offered in cities such as Houston, San Antonio, Denver and maybe even Atlanta.  It’s a good fit and with Mexico regaining Category 1 status in its air system again, they can only work harder to make it worth each airlines’ effort.

This does highlight the fact that Southwest needs a reservations systems that dates at least from the 1990s.  As badly as they need it, I suspect that the Airtran system might just end up being the answer for Southwest.  It would likely be easier to transition to that system than it would be to spend time, money and effort studying all the possibilities or even building their own.  Until Southwest has this fixed, they don’t have much to offer international partners and, yet, the potential in this area is huge for Southwest.

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Four months ago, Mexico got its air traffic system downgraded from a Category 1 to a Category 2 rating by the US FAA.  This came at the same time that Mexicana was melting down in a great fury and both events were an economic and psychological blow to Mexico.

Well, they just got upgraded back to Category 1 after just four months (nearly unprecedented) and with strong assistance from the FAA in the United States.  In fact, the FAA will continue providing assistance to ensure that Mexico maintains the changes it made and maintains it status, more importantly.

This is great for Mexico and it is a well executed response to this problem.  It’s also great for US airlines because when that status got downgraded, US airlines were suddenly no longer able to codeshare with Mexican airlines and that probably accelerated Mexicana’s demise, to tell the truth.  Now, airlines on both sides can engage in codesharing again (Hello Southwest and Volaris)  and the world airline alliances can get busy in Mexico once more. 

Mexico shouldn’t have let itself get lumped into the ranks of countries like Croatia and Nigeria and their lapse in oversight was a bad thing.  But instead of acting outraged, they got busy and to their credit, they fixed the problems with lightning speed.  Give them credit.

Filed under: Air Traffic Control, Airline News by ajax
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KLM took on a bet with a group of Dutch Dance fanatics recently via Twitter.  If KLM could get enough reservations to fill a plane on the site http://www.fly2miami.nl/ before December 6th, KLM would agree to do a non-stop flight from Amsterdam to Miami for these folks.  It seems the Dutch Dance Scene really wanted to get to Miami because they filled the flight in less than 5 hours and they now have 351 reservations.  So it’s on.

Obviously this flight isn’t going to dramatically change KLM’s balance sheet but they get to do what is essentially a charter filled with non-refundable fares and make some money.  The Dutch Dance Scene gets to dance in Miami.  It’s win – win for both parties.

The power of social media has proven itself again and it’s a message that quite a few airlines in the United States could stand to listen to (do you hear me United/American/Delta?).

Filed under: Airline News, Trivia by ajax
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A French court has found both Continental (as a corporation) as well as a Continental mechanic guilty of involuntary manslaughter yesterday and it stinks on many different levels.

Even if we ignore the fact that all the French parties in this trial were acquitted while the only US based parties (Continental and the mechanic) were found guilty, it still stinks for air transportation.  This sets a bad precedent for future air disasters, particularly in France, since going forward there will be little if any incentive for any party to cooperate in an investigation. 

It’s a precendent that any airline has to pay attention to when it comes to operating on French territory now and in the future.  When you face criminal liability as an airline and when your employees are subject to that same liability, it has to make an airline think twice about operating flights within your country.   When your “verdict” is blatantly patriotic as this one is, you really send a signal to those airlines and it isn’t a welcoming one. 

There is now no good reason for any airline employee to cooperate with any investigation into an air disaster and frankly I think this even extends outside of French territory.  This will have implications even in the United States as far as attorneys are concerned and that’s wrong.  Investigating an air disaster is already a difficult and contentious process at best.  Subjecting *any* mistake at all made by an airline employee to criminal liability means that it is in all employees best interest to shut up and say nothing on the record.

Accident investigations frequently result in changes in how something is done when we reveal the mistakes or uknown factors involved and that’s good.  That’s the reason why air disasters, as a percentage of air travel, have decreased so much over the last 30 years.  This one decision sets that back decades.

But let’s not ignore the patriotism involved in this.  It’s a factor and anyone who doesn’t acknowledge that just isn’t using facts.  As in all things like this disaster, there were a number of factors involved in the final outcome.  To absolve anyone French from any responsibility badly damages the reputations of the French legal system, the French government, Air France and the governming authorities for air transportation in France.  How can you, as an individual or company, trust these entities in the future if you witness them throwing a US based company in front of a moving bus while saving themselves.

This kind of behaviour is the worst you can observe in France and I’ll point out that this kind of stuff isn’t limited to just France either.  France just happens to be very good at it and, maybe, better than most. 

If this is what we can expect from the French court systems and government, shouldn’t we consider this when it comes to EADS/Airbus’ particpation in the KC-X tanker contest?  What if they won this contest, performed poorly and then hid behind the French government to escape consequences?  We’ve just witnessed a willingness to preserve French interests over truth or facts so why should the US (or any other government) believe that fair treatment and real consequences are available under any conditions that threaten French national interests in the future?

Filed under: Airline News by ajax
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