With the QANTAS A380 fleet being grounded for several days, one thing was clear when it comes to this aircraft.

When one of these aircraft becomes unavailable, there can be a huge number of people needing to be cared for.   QANTAS’ A380 carries as much as 450 passengers and their typical equivalent 747 carries just 307 passengers.   For most routes that the A380 would fly, you would require generally 2 other long haul aircraft to deal with the extra burden.  By 2 extra, I mean you would need two 747-400s to get passengers cared for on a LA-Sydney route or two 777-300’s or at least two 777-200s.

But my larger point is that when you fly this aircraft, a cancellation can inconvenience from about 450 to 550 passengers with just one flight cancellation.  That’s a lot of people to take care of and airlines had best have a contingency plan to deal with such an eventuality because it is not like a single 737-800 cancelling.  It’s not even remotely like a 767 or 777 cancelling.  

It doesn’t appear that QANTAS has had much of a handle on dealing with their customers problems either.  To be fair, it’s not easy to ground those aircraft and then dispatch 747s to outlying destinations to take care of passengers.  The flight time alone between Sydney and LA is generally well in excess of 14 hours.  And it’s not easy to keep a spare A380 laying around either.  It’s not even easy to keep a used 747 lying around for backup. 

Then  again, it’s not like there will ever really be a huge fleet of A380s in the world either.  Unless Emirates defies all predictions and really does take delivery on all of their orders.

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Over the past few months, we’ve seen a few airlines announce their intention to carefully stick their foot into the DFW market.  First it was Virgin America with flights from both San Francisco and Los Angeles to DFW.  Next up, Spirit Airlines decided to try things out a la Allegiant style to Las Vegas and Fort Lauderdale.

I think Virgin America has every chance of making a go at this and, frankly, may be just a bit late in their timing.  This is the perfect time to go against American Airlines with a superior service product and Virgin has it.  The trick will be in enticing business customers in the DFW area and with the right kind of local advertising, they’ve got a shot.

Spirit Airlines has visited DFW, briefly, once before.  This time they’re offering flights to Fort Lauderdale where passengers can connect to their Caribbean flights.   Then they have their Las Vegas run which should potentially do OK given the current fares to Las Vegas from American Airlines.  I suspect that with any challenge from AA at all, they’ll drop that route like a man pulling weeds who finds his hand full of rattlesnake.

The real question is will Dallas embrace an Ultra Low Cost Carrier?  Maybe.  This is a fickle city that has firm ideas on what airline service is.  Southwest has spoiled us and I don’t know if Spirit’s “Ryanair-like” attitude will go down well here.  I’m personally intrigued by Spirits offerings because if they schedule things right, I might be interested in trying them out all the way from DFW to Colombia.

I’m glad to see some new airlines show up but let’s not get carried away.  These airlines are simply sticking a toe into market to see the temperature is right.

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The first order for the Airbus A380 in Japan is being announced and isn’t an order from All Nippon Airlines or Japan Air Lines.  Instead, it comes from tiny Skymark Airlines who operates the 737-800 (although they did operate the 767-300 for a while) and who is hubbed at Tokyo’s Haneda airport with an additional focus on Kobe.

The order is for 4 aircraft with options for an additional 2.  Delivery dates are unknown and this order still has to be “firmed up” within the next few months. 

It’s difficult for me to call this a vanity order or a political one for that matter.  This airline is too small for either condition.  With the order book for the A380 essentially covering the next several years, this is like an order that will be scheduled far in the future. 

But it doesn’t make sense.  This airline doesn’t have a network to feed an A-380 and using the A-380 for domestic flights essentially abuses it capabilities.  It would be much easier and offer more flexibility to use 2 767-300s or 777-200/300s for domestic use than it would be to use one A-380.  Supposedly Skymark will use these for international flights but, if so, I have to ask where they’re going to use them and just what kind of network do they plan to have to feed these animals day in and day out?

Filling a 500 passenger aircraft for international flights every day is no trivial task and given Skymark’s business model, they may well be thinking of well in excess of 500 seats per flight.  Yes, on a theoretically full flight, your flights would be incredibly profitable.  The problem is, it’s unrealistic to plan for “full” year round. 

This may be just a fancilful pursuit that will never be realized and I wouldn’t be surprised if we find that out in another 3 to 4 years.

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Update(Nov. 9th, 2010) :  According to the Vancouver daily newspaper, the couple was contacted last night (Monday, November 8th) and offered full compensation for their ordeal.

. . . like a family scorned.  Expecially a family that understands social media. 

I found out about a problem that a family recently experienced on Alaska Airlines and read the blog that was created by this family after their ordeal.  You can read it at:  http://alaskaairhatesfamilies.blogspot.com/

A lot of bloggers have spoken of the power of social media with airlines over the last year.  It offers a pathway for redress of certain grievances that previously would have been ignored by most airlines. 

First, all airlines make mistakes.  All airlines have employees who handle a bad situation badly.  The rules described by Alaska Airlines in defense of their actions are certainly true.  You’re expected at the gate and available to board at a certain time. 

But there is a difference between a gate agent standing there wondering where a passenger is who should nominally be there and available to board versus a gate agent who is being communicated with by a passenger who is experiencing a problem that will be solved in a few minutes time.  This is when you want your employees (even your contract employees) to show some good judgement. 

Allowing this man to board with his family would have cost *nothing* in terms of departure time and little extra in terms of stress on the gate agent.  When a passenger is communicating with you over a problem, stop and take the time to listen and work with them.   Why?  Because the costs in terms of reputation when that same family starts a blog that gathers national media attention are far greater than the costs of taking a few extra minutes to work this out. 

If you think the costs to your reputation when something like this goes viral in national media, you have no idea of the costs you incur when you respond with “these are our rules, here is a token payment to shut up”.  Again, you want your people at the airline examining these things and showing good judgement.  This was an opportunity to “win” in the eyes of the public and get back a reputation that is pretty good. 

All Alaska Airlines had to do was compensate the costs of the ticket and publicly apologize. This would have won the customer back and won the public opinion back, too.  Defending yourself by citing rules is only going to make things worse at this point and when you do that, you increase the public perception that you don’t play by real world rules and people begin to think that you’re just “out to screw them.”  When you behave that way, it’s hard to conclude otherwise. 

It wouldn’t have been necessary to over-compensate these people.  Just make their increased costs go away.  Make them feel as if they been listened to by ACTUALLY LISTENING TO THEM AND APOLOGIZING. 

One of the biggest mistakes Alaska Airlines made in all this was allowing the social media guy at Alaska address this by citing rules.  Use your executives to cite rules, use your regular PR representative to cite rules but don’t let your social media face get associated with this mud bath.  Social media is about being friendly and service oriented.   Not only did Alaska Airlines damage their general reputation, they damaged the reputation of their social media efforts in a way that now few people will have trust in it as an outlet for anything helpful or useful. 

And social media is only going to get more important in the next few years, not less.

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Virgin Atlantic and Sir Richard Branson has hired Deutsch Bank to look at all strategic options available to Virgin Atlantic and that includes what the company is potentially worth.  Virgin Atlantic is already 49% owned by Singapore Airlines and 51% by Sir Richard.  Singapore Airlines has reportedly indicated its dissatisfaction with its investment’s performance in the past.  Branson indicated last May that in light of the industry consolidation taking place, it may no longer be possible for Virgin Atlantic to remain an independent entity.

Some of the questions to be answered is whether or not Virgin is an attractive property to another airline and whether or not there are other airlines out there that might be attractive to Virgin.  Virgin had been intensely interested in purchasing the airline BMI which was ultimately bought by Lufthansa who are heavily engaged in restructuring it back to profitability.

Virgin’s problem is that of no network.  It continues to be a great value to those who wish to fly its long haul flights but it has no “feed” from destinations within Europe (and in particular the UK) to provide passengers for its long haul flights.  In addition, it does not closely cooperate with its cousins at Virgin Blue and Virgin America so that it is not accused of violating laws governing ownership and competitiveness in Australia and the US. 

One has to wonder at this point why Virgin was so against joining an alliance.  They did, at one time, have quite a bit to offer various alliances but they are a property that has already lost quite a bit of shine.  Since only one alliance has substantial penetration in the UK (Oneworld), it’s possible that Star Alliance or Sky Team could still be interested on some level.  The Star Alliance actually feels a bit more like a fit and would potentially put BMI in place to offer that necessary feed to Virgin Atlantic. 

However, this is a case where Virgin really needs to pursue this rather than the alliances.  European partners in those alliances already have the opportunity to operate in the UK as a function of being part of the European Union.  In other words, Virgin needs to sell itself if it goes this route and it can.

Virgin Atlantic is an airline that really may be running out of runway very soon.  This isn’t a move out of desperation but it is a smart move to make on their part as they could benefit from a point of view that isn’t so closely tied to the Virgin hype.

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American Airlines is threatening to stop making their tickets available through Orbitz.  Instead of supply this data through a global distribution system provider, it wants Orbitz (and ultimately companies just like Orbitz) to make a direct connection to AA instead. 

At first glance, this would appear to be much ado about nothing but it isn’t.  When Orbitz and others like them get their data through a GDS, they get all the info and they’re able to display fares with a reasonable amount of transparency and thereby show the most competitive fare(s) available.  If they begin to make direct connections, airlines will suddenly have the ability to control what is fed into systems like Orbitz and Orbitz doesn’t like that.

Orbitz (and the others) are popular with the consumer because they are offering competitive choice and that service product promise is to show the lowest fare currently available.  What if an airline is able to decide that those people will only see somewhat competitive fares on those systems and reserve the best values for display on their own website?  That will ultimately drive traffic away from the travel agencies (Orbitz, etc) and towards the airline’s sites where only partner companies will participate in access to the customer.

Furthermore, by eroding the value of the travel agency websites, the airlines would be able to make the picture for what a competitive fare is a bit more “fuzzy” to the consumer.  The last thing airlines want is a competitive marketplace.  The first thing that you, as a consumer, want is a competitive marketplace. 

But it’s that competition that is making it so hard for airlines to raise prices.  Right now, one airline essentially “bids up” the price of a fare and then waits to see if other airlines match it.  If they don’t, the first airline will drop its price back to the old market price.  If they do match it, then suddenly all fares are raised but they are once again perfectly competitive which means market share for those customers doesn’t change. 

Airlines want things as fuzzy as possible and as difficult as possible to price shop because that potentially allows them to raise the prices more.  Right now, airline A might have 10 flights on a route and airline B may only have 3.  But if airline B sells at a lower price, airline A has no real choice but to match it.  This is because we see all the lowest fares displayed on a website and a price differential as little as $5 can change market share quite a bit. 

This is one reason why I believe Southwest should seriously consider getting back on the grid, so to speak.  They offer competitive prices (particularly when you consider their policies on bag fees) that aren’t displayed alongside all the other airlines on these travel agency websites.  In fact, they offer the two things that most customers want:  low fares (or at least competitive) and frequency. 

Ultimately, I expect that American Airlines will have to accomodate Orbitz in some manner.  I say this because no other airline is making this attempt at the same time.  Not having their fares displayed alongside their customers in the present circumstances will mean a potential loss of market share.  Things would look worse for Orbitz if the other airlines were trying to do the same thing.

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It was disappointing to hear of the rather dramatic engine failure on the QANTAS A380 yesterday morning but it also caused me to ponder what the real implications are.

First, QANTAS’ grounding of this aircraft is likely unnecessary and way premature in light of the service history of the aircraft so far.  At least with respect to technical reasons for doing so.  However, QANTAS’ grounding is probably a wise choice with respect to public relations.  This company has a long standing reputation for no lives lost in a jet aircraft incident and rightly so.  Preserving this image is particularly important to an airline that by definition is frequently traveling over oceans to reach their destinations.  In other words, don’t presume the grounding as an indictment against the aircraft or even the aircraft engines.

Second, after viewing a number of pictures of this incident, it is striking in that it was an uncontained failure.  However, it also shows just how robust and just how much safer jet airliners of today are versus those of the 1960’s and 1970’s.  An uncontained failure shouldn’t happen but even when it did, things were fairly non-eventful with respect to keeping the aircraft under control and getting it back on the ground.

Third, an uncontained failure in this Rolls Royce Trent engine is somewhat distressing.  Even an engine with modest design mistakes typically will not reveal these problems for a long, long time.  The pictures are dramatic and the amount of debris from this engine is also a bit impressive.  This engine deserves rigorous investigation at this point.

The bottom line is that the aircraft remains safe.  In fact, more Airbus A380s are actually flying with a different engine, the Engine Alliance engine from GE and Pratt & Whitney.  Take the media drama and even the QANTAS dramatic reaction with a large grain of salt for now.  One event does not make a trend.

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And I’ll admit that I’m mildly surprised by this development.

It turns out that unionization of Delta flight attendants was rejected by a vote of 53% against the idea.  I speculated in a post found HERE that this might actually happen but I did wonder about the results since those former Northwest Airlines flight attendants are a battle hardened crew.

This is good news.  It’s good news for Delta flight attendants and it is great news for Delta management.  The best thing management could do is to make sure they continue to treat their cabin crew with respect.  Keep them compensated well and ensure those needs are getting met.   Most of all, don’t gloat and don’t threaten.  Management got what it wanted and it is best to be magnanimous about it.

I don’t blame the NWA cabin crew for wanting a union.  They needed one when doing combat with NWA management.  I think that the movement to put a union in place will actually slow some as long as management stays the course. 

In some ways, the people who get dinged the most from this development is American Airlines.  Why?  Because Delta will continue to get better productivity and enjoy more harmonious labor relations than AA and AA has been counting on the new SuperLegacies getting hit over the head.

In addition, to those who believed the new labor organization would be easier at airlines as result of the rules changes, I think you’re wrong.  This most recent vote showed that flight attendants, even ones who weren’t that emotional about the decision, do know how to vote when it counts.

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maybe.

It’s been announced that the Pan Am name is being resurrected (again for the 5th time) for an airline that plans to base itself from Brownsville, TX and which will fly to Latin American destinations initially as a cargo airline.

This won’t be the first time for Pan Am to stage flights from Brownsville either.  The original Pan Am flew flights to Latin America via Brownsville in its heyday.

Company president, Robert Hedrick, says their first flight will be to Monterrey, Mexico. 

I find this plan a bit weird, myself.  Brownsville is a large port for international goods but it isn’t a very strategic location for international flights to Latin America.  Not anymore, anyways. 

It might work as a cargo location, it won’t work as a passenger hub.  So, for those of you waiting for another glory era of Pan Am, I would suggest you not get too excited about this one.

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Southwest Airlines CEO Gary Kelly speculated that Southwest could one day be flying to Hawaii and that has tongues wagging in the airliner world.   Kelly mentioned this possibility in connection with their decision to purchase the 737-800 which they should arrive at very soon.

The fact that no one confirmed that Southwest would in fact buy the 737-800 at their recent media day leads me to believe that they are still in negotiations with Boeing and probably it has to do with price more than anything.

Still, even if they add the 737-800, it doesn’t mean they’ll do Hawaii.  Flights to Hawaii require more than just that aircraft.  It means proving you can do ETOPS flights and it means keeping a sub-fleet of aircraft that can do ETOPS flights.  ETOPS means flight crews get more training and aircraft are specially equipped and specially maintained. 

Alaska Airlines is doing such flights at present and they appear to be succeeding well enough that they’re adding flights to Hawaii from other cities.   It is doable and it may well be profitable.

However, if this does happen, I think it might happen in 4 or 5 years, not next year or the following.  Southwest has a bunch of things to chew on at present such as their merger with Airtran, phasing in new IT systems and just adopting not one but two new aircraft types:  the 737-800 and the 717. 

If this does happen, it’ll happen once they’ve managed to digest their other challenges.  Don’t go looking for that Honolulu destination on their website just yet.

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Southwest has been pretty candid with people attending the Southwest media day and has made a number of comments and announcements that offer more clarity than we’ve seen in a while.

First up:  Southwest and Volaris Airlines will begin interlining on December 1st.  This is quicker than I would have guessed based on the radio silence we’ve heard on this subject for months now.  It’s not a codeshare because you won’t be able to buy a Southwest ticket to fly on a Volaris flight.  You will, however, be able to seemlessly transition between a Southwest flight and a Volaris flight to Mexico.  You wouldn’t be able to do codeshares at present anyway since Mexico’s air traffic system got downgraded to a Category 2 recently. 

Southwest sees the seniority list integration between its pilots and Airtran pilots as their number one issue.  I agree.  The rational people out there would have you believe that Airtran pilots should be happy no matter what since it is almost guaranteed that they’ll get a pay raise with this merger.  Sadly, rational thought doesn’t enter into the equation when it comes to these discussions.  In addition, pay raises aren’t the only factor when it comes to seniority.  Seniority also determines the type of aircraft you’ll fly and where you’ll be based out of.   I doubt it will be a “date of hire” integration and I doubt it will be a mere stapling integration either.  There will probably be some sort of weighted integration and possibly jobs in the ATL area (and perhaps a few other bases) will be “fenced” off for Airtran pilots for a period of time. 

Southwest says it will be charging $5 for WiFi access on its aircraft.  This is pretty cheap compared to the fees for Aircell on other airlines.  Apparently Southwest has done their homework and determined that’s the sweet spot for maximizing “take” on each flight.  There will be no graduated fee for varying durations of flights.  Southwest doesn’t know what it will do with Airtran aircraft equipped with Aircell because they don’t know what those contracts look like yet and they won’t until the merger is consummated.  I suspect that Aircell will remain in place until those contracts expire and then they will be replaced with R0w44 systems to harmonize the fleet.  That would be a good news for Row44 who hasn’t gained much in the way of market share when compared to Aircell.

Finally, Southwest thinks Atlanta could quickly become its biggest city once it has finished its merger with Airtran.  Las Vegas currently is the largest but Southwest execs see lots of additional route opportunity in Atlanta already.  They’ve identified at least 2 dozen new destinations that could be served and Atlanta is already pretty big for Airtran.  Look for more frequency and a net gain on routes once Southwest really takes over.

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jetBlue has announced its intentions on flying from Long Beach, California to Anchorage, Alaska next summer and, yes, this probably has some people rubbing their eyes to see if they read this right.

It’s an odd choice in my opinion since flying to Alaska requires a bit more general pilot knowledge and jetBlue doesn’t have any other traffic there.  That means they have to establish themselves in the city even if with contractors and without more flights headed there, I don’t know why one would do it.

One possibility is that this is about aircraft utilization.  Alaska flights are one of those things where you can get away with strange(ish) flight departures and arrivals.  Alaskans don’t seem to mind odd times and I wonder if this isn’t a flight that will depart late afternoon, arrive in Alaska in the evening and then do a quick(ish) turnaround for a “redeye” back to Long Beach where it will likely be used to fly a different flight during the day.  The flights times would make it work.

It’s notable that right now, Alaska Airlines doesn’t have a non-stop between LA and Anchorage.  In fact, it appears no one does.  That might just make the whole effort worth it or it might point out that there is a reason why nobody is doing it.

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British Airways has been working to resolve its labor trouble with the flight cabin crew union, Unite, for several months now.  It appears that both BA and United have finally come to enough of an agreement that a deal is on the table and it will be voted on.

The problem is, both parties here went a bit too far in these labor actions.  Unite went too far in trying to protect jobs by insisting on unproductive staff levels in the cabins.  BA went too far by punishing those who went out on strike.

Labor conflicts shouldn’t be treated as “personal” and when Willie Walsh & Co decided to punish those strikers by removing their travel benefits, that was over the line.  The strike was legal and you shouldn’t punish people for doing what was within their legal rights. 

In addition, remaining stubborn about restoring those benefits was just childish.  It’s insisting you were right when there is an opportunity to get what you originally wanted by just stopping your own foolishness. 

I’m actually somewhat skeptical that this vote on the deal will be approved.  BA has agreed to restore “90%” of the travel benefits and seniority would only be restored on the basis of “good behaviour” over 3 years.  That’s punitive and unnecessary.

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American Airlines remains the concern of every analyst when it comes to asking the question about its long term viability.  It isn’t that this airline is about to die, it’s that there remain so many things going against it still.

They have some of the highest if not the highest labor costs among the airlines and they have labor groups who are out to get what they had before the givebacks earlier in the decade.  What’s more, they don’t seem to have a coherent plan for dealing with that problem.

They have an aging fleet that puts them behind other airlines including the SuperLegacy airlines who did renew their fleet some over the last 7 years while American remained largely entrenched in the MD-80s until 2 years ago.  Even now, they’re a bit behind in keeping pace with the need for greater fuel efficiency.  It’s arguable that without the huge spike in oil prices a few years ago, American would still be sitting on their fuel hog MD-80s. 

They’ve been stymied on growth with other airlines “poaching” on their territories and others reducing their costs via bankruptcy and have only now started to, perhaps, grow their network organically. 

American did finally get their trans-Atlantic alliance with British Airways and Iberia Airlines.  Only time will show us if that alliance is worth it and while it may be worth something, American missed out on being able to take advantage of such a thing for more than decade by stubbornly clinging to the idea of mating up with BA. 

They also won their Japanese battle by keeping JAL in the OneWorld system and they’re on track to win immunity in a trans-Pacific alliance with them as well.  But JAL has a long way to go before it is a profitable and viable airline.  Delta and United, however, have good systems to Asia and a good network inside the Far East. 

I do like their interline agreements with jetBlue and WestJet and it would appear that someone at American is thinking “innovative” for once.  But will AA be patient enough for those to work and will they be entreprenurial enough to expand upon such concepts?  History says no but I say the decision on that can’t be made for at least a year.

This isn’t an airline that will go bankrupt in the next few years.  It is an airline that appears destined to remain very lackluster in comparison with basically all the other airlines in the United States.  And why would you invest in lackluster when you can have rock star in so many others?

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We’ve heard all about the soaring profits at airlines this past week but I wonder if many have noticed the other element in the news:  new flights being added at various legacy and SuperLegacy hubs. 

So far, these new flights have all the appearance of being targeted towards building core strengths at various hubs and focus cities.  American Airlines is building LAX (although mostly through American Eagle flights) for instance and United and American are starting long haul flights from LAX to Shanghai, too.

While we’ve seen very modest capacity growths in the first 2 quarters indicating that airlines were just (barely) keeping pace with demand, this most recent quarter finds announcements that indicate that everyone is trying to nudge themselves towards a bit more growth than before. 

Let me point out that even Southwest’s intentions on buying the 737-800 is a form of capacity growth.  They’ll use that aircraft on routes where there ability to fly frequency is constrained. 

The signs are there but it’s the 4th quarter results and announcements that should signal a trend.  We won’t really know where things are headed until announcements on intentions for next summer are made.

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Instead of engaging in analyst speak for the earnings results airlines are reporting this week and the next, let’s sum it up real quick:  Airlines are earning record profits this quarter (again) and American Airlines continues to appear the weak animal on the plains with not one but two lions starting to eye it. 

The “records” being set with these profits are a bit deceiving.  Delta has had record profits.  It’s also roughly twice the size it was before the economic crash.  United has record profits, ditto.  US Airways has record profits and, yes, they’re roughly twice the size they used to be too.  When Southwest adds Airtran to their company, we’ll likely see new record profits there too. 

What’s driving these profits?  Well, certainly some synergies from the mergers although I suspect they aren’t as great as they are touted to be when these airlines were lobbying for approval of their mergers.  US Airways doesn’t have all those synergies in their flight crews and they’re still performing impressively. 

Network?  Well, again, I think it certainly helps a bit.  I believe the larger networks are improving load factors somewhat and that’s good.  On the other hand, is it all about the network?  No, not really.  I refer you to the fact that US Airways has a lousy network and, again, they’re doing very, very well.

I think the continuing restraint on capacity growth is driving these profits.  That’s great and I am very impressed that the airlines have held themselves in check as well as they have.  It’s nice to see profits in this industry and there are a whole lot of people who need to be paid back for their investments.  This will help do that. 

The question is . . . Will it last?  I’m skeptical.  Very skeptical.  First, some of the load factors we are seeing as “averages” are astronomically high when considered against the past 30 year history of the business.  Even Southwest is enjoying exceptionally high load factors and their business model isn’t based on high load factors at all.  I don’t think such load factors are sustainable.  In fact, I think they are too high as an average for these legacy/SuperLegacy carriers. 

I think branded regional airlines and LCC carriers are going to see a lot of opportunity over the next few quarters to start whittling away at these profits.  Someone will blink and they will add capacity.  When one starts to grow their capacity, many will follow, at least on competitive routes, because self-restraint in this business is dependent upon everyone exercising some. 

If we do continue to see these profits for another year or two, I also think we’ll see new entrants into the market place.  The Sirens will be calling to investors and it will be an irrestible call. 

You can bet that each airline is analyzing their competitors right now and you can also bet that the question being asked is how can we grow or add capacity through better utilization of our fleet right now.  Tomorrow, the question will be about what they can add to their fleet to grow that capacity.  Those questions are being asked internally right now and I do think we’re looking at least a couple more financial quarters of self-discipline.  I also think someone will likely blink when they begin to plan and announce intentions for next year’s summer season.

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The Seattle Times is reporting that Turkish Airlines has indicated its interest in both the Boeing 747-8i and Airbus A380.  CEO Hamdi Topçu apparently has said they’ll decide before the year end on this order. 

Such an order strikes me as hubris for this airline.  Yes, they’ve done pretty well for the past few years and they aren’t a tiny airline but they aren’t so big that their network could possibly justify such a large aircraft in its fleet.   Despite their entrance into the Star Alliance, they’re still a 2nd tier player at best.  Even additional 777-300ER aircraft would cause me to raise my eyebrows questioning this. 

Much of their success has been witnessed over the past 3 years and, on the outside, that would appear to make them attractive going forward.  The truth is, as competition with European and Middle East carriers heats up, I think this erodes their growth.  Furthermore, Turkey’s current political climate makes it somewhat less certain as a place to do business for the near future. 

Bottom line:  I don’t think they’ll actually order the aircraft and, if they do order such large aircraft, I don’t think they’ll actually take delivery.

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American Airlines and WestJet Airlines have announced an interline agreement yesterday and, once again, I didn’t see this coming.  If anything, I would have expected this to develop between WestJet and Delta, not American Airlines. 

The agreement will allow customers to connect seemlessly (with one ticket) to 25 new Canadian destinations with American Airlines (and American Eagle) feeding that traffic to six gateway cities in Canada.  Presumably it will work both ways (Canada to the US) and it is notable that the press announcement mentions a “phase 2” which will feed traffic back and forth to WestJet flights from the US to Canada as well. 

This is a pretty good win for American.  It gives Oneworld (via AA) an entrance into Canada where they’ll compete against the Star Alliance and Air Canada.  It leaves Delta sitting out in the cold with no other airline in Canada for them to connect with.  That, alone, is a bold move.

It also kind of swats at Southwest and its original intentions on Canada via an earlier codeshare agreement it had with WestJet but which was terminated earlier this year after a disagreement with WestJet. 

That sound is the door slamming shut. 

This will sting other carriers in the US and it’ll force them to access Canada through a much more expensive pathway:  flying there themselves. 

With both this agreement and the earlier one AA did with jetBlue, it’s clear that there is some innovative thinking going on at American suddenly and now I wonder what comes next.  I’ve been pretty hard on AA this year but I have to say that I like this move and I think it will benefit them and WestJet a great deal.

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In the world of airline union labor leaders, there is one guy who has stood out among all the others.  Lee Moak of Delta Airlines.

Captain Moak, leader of the Delta Airlines’ pilots union when Delta merger with Northwest Airlines, has consistently shown that he understands the changing business model of the airline industry.  He has embraced the idea that mergers don’t have to be anti-union and was critical in the peaceful integration of pilot’s seniority lists during the Delta/Northwest merger.   An almost unheard of accomplishment.

Moak approaches his leadership as an obligation to engage with parties as opposed to the far more common tactic of confrontation.   He allows his actions to speak for him rather than rhetoric and that has allowed him to succeed where many others have simply maintained a status quo that hasnt been working for years.

Now he’ll head the national leadership of ALPA and this is good for a lot of airlines.  He’ll have the opportunity to set a different tone and, perhaps, mentor others into his engagement approach. 

When I say it’s good for airlines, I mean that it is good for both labor and management.  All too often, there is little engagement between those two parties and way too much conflict.  Talking is good and moving off rhetoric and talking points towards real compromise and finding solutions to new problems will be good for everyone. 

It should be very satisfying to see him lead ALPA and he’s a critical person to watch in this industry.

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Southwest Airlines has reached a tentative agreement with its pilots union that, if ratified by the pilots, will permit Southwest to choose to adopt the 737-800 into the fleet.  Southwest says it is still evaluating the choice and will make a decision soon. 

Some have speculated that doing this and adding Airtran into the mix would be unattractive to Southwest.  I say it that aircraft is coming and sooner than later.  Despite Southwest’s potential gains (via the merger) at airports where this aircraft would be most useful, it still has great potential for the airline in those markets and others including, perhaps, some routes that Southwest will harmonize between itself and Airtran in the future. 

Ultimately, this means Southwest is suddenly looking at operating 2 types and 3 classes of capacity in its system in the near future.  The Boeing 717 on the bottom end w/ 117 passengers and the Boeing 737-500 sitting there right next to it at 122 passengers is the first “class” of capacity.  The Boeing 737-700 at 137 passengers will remain the mainstay aircraft for mst routes and represents the second “class” of capacity.  Finally, the Boeing 737-800 will offer increased capacity at about 175 passengers. 

I wouldn’t expect the Boeing 737-800 fleet to be that large for a long time.  Look for a sub-fleet of these that will probably range from 40 to 60 unless and until Southwest decides the entire fleet needs to bump up in size.

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