Before anything else, I’d like to announce that this is my 200th post to this blog.  Quite the milestone all in all.

USA Today’s Today in the Sky Blog is reporting that several airlines have removed their advance purchase requirement for bargain fares this holiday season.   Their source, Tom Parsons (CEO of BestFares.com), says that airlines such as American Airlines, Delta, United, Northwest, US Airways, Frontier, Airtran and Midwest have all removed the advance purchase requirement through January 4th.  Continental still has a 3-day advance purchase requirement.  This would seem to imply that holiday travel is extremely soft this season so far.

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CNN is reporting that British Airways has won an injunction against a 12 day holiday strike planned by the labor union representing cabin crew called Unite.   More on Unite and its recent actions in a post for tomorrow.  I suspect there are a few european airlines who are moving quickly to adjust their plans (again) for accomodating extra passengers.

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The Boeing 787 has just taken off making its first flight ever from Paine Field in Everett, WA. 

Track its flight HERE.

Edit #01:  Depending on the weather, this flight may be cut short.  Currently it is scheduled for 5 hours with the initial circuit being north of Everett, Washington.  However, with weather closing in, the flight could be cut short at any time.  The 787 will be landing at Boeing Field when it does return.

Edit #02:  A few moments ago (It’s 1:18pm CST), Flightaware.com showed the 787 slowing to just 87 kts (100mph) and then speeding up again, slowly, to nearly 200kts.  Ordinarily, I’d be inclined to think that speed reading a fluke.  Today, I think they really did slow it down that much.  I can only imagine what it must be like to be the test pilot that takes those chances with an aircraft that cost billions (with a “B”) to develop on its first flight.

Edit #03:  The 787 is flying patterns that take it over I-5 over and over again at relatively low altitude.  Anyone traveling on that highway may be getting quite a surprise now and then.

Edit #04:  Boeing is now saying that the 787 may land in about 30 minutes.   This would result in a 2.5 hours first flight and given the weather, a complete success.

Edit #05:  The 787 has nosed towards the south and should make a long loop heading south to approach Boeing Field from the south and land.

Edit #06:  Matt Cawby’s website has a photo of the 787 Dreamliner lifting off in the rain HERE.

Edit #07:  The 787 Dreamliner has landed at Boeing Field now.  There is a rumour that the second aircraft, ZA002, will fly on or about December 22.

Edit #08:  You can watch a short video clip of the 787 taking off HERE.  Notice the wing flex and the chase plane that flies right above/beside the 787 as it rotates.

Filed under: Aircraft Development, Airline News by ajax
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NPR did THIS story recently on various airlines’ secret “invitation only” frequent flier programs. In addition, the new movie, Up In The Air, mentions such a program on American Airlines. Lately, these programs are starting to get some publicity and, frankly, I wonder if the airlines aren’t encouraging this.

I have a small link to airline fame. My father created the first modern frequent flier program at Braniff. Yes, I know the popular wisdom is that it was done by Robert Crandall but it wasn’t. His program rolled out about 2 months after Braniff’s did. I still remember my brother and I being somewhat outraged that someone copied our father’s good idea. The original intent was to simply cement customer loyalty to one airline. Essentially, if you flew the airline a lot, you got some free trips via points accrued on the basis of miles. Now, while that exists still in each program, the truth is that these mileage programs lost their intent and value when they started awarding miles for things like credit card use and hotel affiliations.

Let’s face it, it’s a *lot* easier to be a mile pig than it should be. The loyalty isn’t to the airline anymore. It’s to the program and with programs working in concert with airline alliances, the loyalty is diluted even more. That, my friends, is why airlines have secret invitation only programs. You can bet that invitation to those programs is not mileage based but, rather, dollar and frequency based. I suspect that if you are traveling on full fare tickets in first and/or business class on a frequent basis, then you’re going to be considered a candidate by the airline. Do it several years in a row, and I”m sure you’re going to be invited into the program.

And I suddenly wonder how my father isn’t in one of those programs given the nature of his travel for the past 30 years. He’s exactly the kind of customer an airline wants and he really isn’t a mileage gamer either. He just buys a lot of tickets at full coach fares to go where he needs to go. Since he’s lifetime platinum on a couple of airlines (I believe), he is the guy that bumps most people from getting that upgrade.

Airlines want customers and I suspect that we’ll see a bit more of these programs come to light if only to speak to the business travelers a bit more. But I guarantee it won’t be based on how much you spent on your credit cards unless those purchases were full fare business class or better tickets. If your company is buying those tickets for you, I doubt you’ll be invited. They want the person who is buying his tickets based on his desires regardless of what a company is doing for him or her.

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A number of airline blogs are reporting and commenting on this story from the Consumerist found HERE.    I don’t have much to say that hasn’t already been said except that this kind of general hostility to passengers from American Airlines flight attendants is not an uncommon experience.  This story has legs and I suspect we may see American’s Broken Guitar moment.

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It is being reported on AVWeb (and other places) that the Northwest Airlines’ pilots who “missed” Minneapolis have filed an appeal to get their airmans’ certificates back. 

While I have no doubt that Air Traffic Control was probably *not* 100% by the book that day or any other day, nor are most pilots.  To make this claim in an appeal makes me wonder if these two men aren’t in a little bit of denial about their egregious lack of situational awareness.  This wasn’t 5 minutes and 25 miles of flight of radio silence.   For  91 minutes these two pilots were situationally unaware and out of contact with both Denter and Minneapolis Air Traffic Control Centers.  Despite repeated attempts to contact them, they remained out of contact until they were about 150 miles *past* Minneapolis. 

There are mistakes and then there are MISTAKES.  This wasn’t an error made under stress in a situation requiring immediate action.  It wasn’t an honest mistake.  It was dangerous because if these two pilots were that unaware during their communications, how can we assume they were aware of anything going on in the cockpit such as a TCAS alert.  

If these two airmen every do get their pilot’s certificates back, I hope they are permanently restricted to serving as First Officers for the rest of their careers.  Becoming a captain should be reserved for those who understand that that situation is unacceptable under any circumstances within their control.

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The Associated Press is reporting that United has decided to order (25) Boeing 787-8 and (25) A350-900 aircraft with deliveries starting in 2016.   Options for 50 additional aircraft (of each type) are also included. 

The order isn’t a surprise in that it has been commonly known that United was considering a purchase.  Even the split between types doesn’t really come as a surprise.  United Airlines is already an Airbus customer and United Airlines is *not* a party to the gentleman’s agreement to buy only Boeing aircraft.  American Airlines, Delta Airlines and Continental Airlines are parties to that agreement which gives them access to early positions on the production line(s) and preferential pricing.   That is how AA managed to land early delivery slots when they made their order for the 787 earlier this year.

Some will be surprised that United didn’t buy more 777 aircraft but I’m not sure that would have made sense for them.  They don’t necessarily need the cargo lift that a 777 offers and, frankly, this order wasn’t for 777 replacement aircraft.   These aircraft will replace 747s (with more frequency) and 767s (one for one) as United retires those two types from its fleet. 

 I suspect United decided to not keep all their eggs in one basket and chose the A350 because it would be newer and more efficient for the type of routes United serves.  Nothing more, nothing less. 

Lack of a firm offering for the 787-10 is starting to become visible.   This is the dawn of that omission and it will be a glaring one in another 12 to 18 months.   Airlines would like to have some confidence that they can purchase a fleet that spans the three basic types for various missions and which doesn’t require a different pilot rating for each type.   Confirming the 787-10 and preparing an offer to airlines wouldn’t be an unwise thing on Boeing’s part.

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On November 18th, The Atlanta Journal-Constitution published THIS story of an account written by a man known as “Ted” or “Tedd” Petrunas claiming that there was a “terrorist dry run” on an Airtran flight (Flight 297) he purportedly took from Atlanta to Houston.  Journalist Terry Maxon of the Dallas Morning News wrote a post on the newspaper’s aviation blog which can be read HERE.

Frankly, the story immediately struck me as false and you’ll find my comments responding to the story on the Dallas Morning News blog entry linked above.  Anyone who has traveled regularly has seen odd things happen on a flight and I’m no exception.  However, the account was notably racist in my opinion and didn’t contain any of the “normal” reactions by airline crew and staff that one would see in such a situation.   The account of this man storming down aisles and taking charge is in direct conflict with any flight attendants normal reaction to a situation.  Flight attendants are not weak and frail creatures and even a FA who has only a year on the line has already become a immune to odd behaviors on the part of crew.   They don’t burst into tears when yelled at.  They certainly don’t allow passengers to take over for them.

But what really bothered me about the story was the racist descriptions of “muslims”.  First, how do you identify a muslim?  I’m sure that I cannot do so with any certainty.   And what is the attire of a muslim?  I ask because muslims quite literally come from around the world and a muslim from Indonesia or China is a very different person from one from Pakistan or Yemen.   In short, this story of a terrorist dry run stank. 

Terry Maxon followed up on the story on December 4th with a post that can be read HERE.   He noted a story done by TV station KHOU (found HERE) .  In this story a Chaplain Dr. Keith Robinson (no relation) is quoted extensively about witnessing some of this story and claims to have spoken to Mr. Petrunas.    It was notable that, by this time, Mr. Petrunas had refused to speak on camera to KHOU citing that financial considerations keeeping him from doing so.  Imagine my complete lack of surprise at that.   However, Chaplain Robinson’s account lacked a certain genuine feel to me as well.  If you watch the video, this is a person who does not seem to be relating a first hand account or even doing a good job of relating a second hand account given to him. 

I’ll also point out that Chaplain Robinson is in the uniform of a law officer in the video and a search on Google reveals that Chaplain Robinson has some kind of association with several right wing websites.  Just one example of that is HERE.  His own authored account on that website is quite self serving and lacks credibility when you read it in its entire context as well.  I would not be surprised to learn at some point of an existing relationship, even a slim one, between Mr. Petrunas and Chaplain Robinson.

Additionally, the KHOU story quotes Airtran saying that the account given by both Chaplain Robinson as well as Mr. Petrunas did not track with statements obtained from the flight crew.  Mr. Petrunas also said to KHOU:

Petruna stands by his statements, with the exception of his description of the men’s attire. He also said he never witnessed the men watching porn, as he said in the e-mail.

 

and we have this:

In a statement to 11 News, AirTran said, “A number of the allegations included in the article posted by Mr. Petruna conflict with the statements obtained by the flight crew.”

 

A ha.  Suddenly we’re backing away from the most obviously outrageous parts of the account. 

By this time, I had decided that this had been a run of the mill conflict on the aircraft which required the airplane to return to the gate.   Airtran wisely decided to make a statement after investigating further which can be found HERE toward the bottom of the Dallas Morning News blog post.  However, conspiracy theorists were quick to mis-interpret Airtran’s statement with respect to the crew change.  Namely, Airtran said: 

The crews were swapped. This is a common occurrence in the aviation industry for any number of reasons. If a Crew Member cannot or will not continue a flight, we must replace that Crew Member.

My first thoughts were that Airtran may have made an error with the phrasing of that last sentence since it could lead to open speculation and it did.  Conspiracy theorists immediately grabbed on to that part of the statement as an “a ha” moment.  Again, any person who has traveled regularly on airlines and certainly any aviation enthusiast or airline employee knows that crew changes such as this can happen for many more plausible reasons such as the delay causing the crew to “time out” on its available duty time.  This happens almost daily and I suspect that is what happened this time as that flight was likely a “turn” from ATL to HOU (Houston) and back with no reserve crew available in Houston to take over.

But wait, there is more.  This morning the Atlanta Journal Constitution published this STORYand the Dallas Morning News (Terry Maxon) posted this entry on the Dallas Morning News Aviation Blog HERE.  In short, it seems that Airtran has discovered that Mr. Petrunas wasn’t even on the flight.    The Atlanta Journal-Constitution said:

In its continued investigation into the incident, the AJC made several attempts to speak to Petruna about the incident. He has declined throughout the week to respond to repeated e-mail and phone attempts by the AJC to talk to him.

Additionally, interviews between the AJC and people on the plane,  airline officials  and federal agencies did not corroborate his story of what occurred on the flight.

 

and also had this:

Nancy Deveikis was seated in seat 29A aboard Flight 297, directly behind an unidentified man who she believes spoke Spanish. Deveikis said the man was looking at pictures on a camera, and did not understand a flight attendant’s requests to turn the device off.

 

and also this:

Keith Robinson didn’t make it to the gate in time to board Flight 297 for its initial attempt to depart.

 

How many people miss their flight and notice something on a monitor that indicates a flight is coming *back* to the gate?  The short answer is no one does.  I’m even pretty sure that no status on an airport monitor would show that flight coming back to the gate.   Indeed, it takes airlines quite a long time to update status on those monitors when everything is going well. 

It would appear that anyone who decided to jump on this train and speak to the media early on decided to have their 15 minutes of fame instead of contributing to the truth.  Shame on both Mr. Petrunas and Chaplain Robinson for lying and contributing to racists fears when it comes to air travel.   Shame on them for their characterizations of the air crew and staff as well.

I offer a big thank you to the Atlanta Journal-Constitution for doing what a newspaper should do (investigate and get the truth) instead of buying into the sensationalism of fear.  In addition, kudos to Terry Maxon for following this and keeping it balanced rather than buying into the sensationalism of fear.   Shame on KHOU for racing in to fan the flames.    Finally, thanks to Airtran for being brave enough to investigate, make a statement and do their best to moderate this situation as well. 

I wish I could say I was shocked to read these revelatioins as the story unfolded but I am not.  This kind of fear mongering poorly serves the country and I do hope both of these men hang their head in shame but I somehow doubt that that will happen.    Nonetheless, it remains quite safe to fly in this country and I hope anyone who is flying soon has a great trip.

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Well, actually, the one thing that is certain about Southwest Airlines is that it continues to surprise everyone on a regular basis.  Almost always in a positive way. 

It wasn’t that long ago that quite a few people were very critical of Southwest and its CEO, Gary Kelly, for not being a lemming and following industry trends such as charging checked luggage, changing a ticket or even beverages.   Indeed, I’ve seen a number of posts on various airline websites offering glum predictions for both Southwest and Mr. Kelly.   It has grown a bit quiet in the past month, though.

Bucking trends and doing it their way is Southwest’s model.  It’s worked for them throughout the history of the company and while, yes, it is true that they’ve made a few mistakes here and there, they’ve also seen great success year in and year out.   By sticking to their plan for attracting customers on the basis of offering their base product at a great value and with no extra charges, they seem to be gaining quite a bit of steam.   The Associated Press is reporting that Southwest has announced a significant uptick in traffic and revenues for the last month.  Again.

Throughout the first part of the year and even through the summer, pundits and financial analysts have hammered Southwest for sticking to its strategy and Mr. Kelly has steadfastly reaffirmed that they’ll be sticking to their plan and that they are starting to see positive results from that plan.  I think those results are in and this is good for Southwest for a few reasons.

First and foremost, that uptick in traffic has to contain quite a few new customers for Southwest.  Customers that have either never tried Southwest or who tried it so long ago that they are, for all intents, new customers.  And I suspect people are discovering that it isn’t your father’s Southwest Airlines from the 70’s and 80’s and it is a great value for all kinds of travelers.   For the customer looking for a reliable airline with a good record of both safety and on-time arrivals a swell as a convenient schedule, Southwest is an excellent answer.  They’ve got good, new aircraft with comfortable seats (still some of the most comfortable in my opinion) with friendly staff.  That’s what people want. 

It’s good for Gary Kelly too.  He’s coming into his own as the leader of Southwest and, to his credit, he has shown little inclination to engage in change for change’s sake and he’s demonstrated quiet confidence both in himself and the direction of his company.  I have no doubt that he’s earning even greater respect from his employees as well as his shareholders.

Sure, Southwest has made a few mistakes.  Most notably their fuel hedges have been a liability a few times in the past 18 months and, of course, there was that little Frontier Airlines fiasco last summer.  One thing that bothered me about their attempt to win Frontier Airlines was that it was *too* much of an amateur performance for the Southwest executive team.   That team is not a bunch of huckleberries.  They are a very saavy group of managers that would be an enormous credit to any airline in the world.  In hindsight, I wonder if the Frontier purchase attempt wasn’t just an attempt to get a great bargain with the approach of “it isn’t a deal if it isn’t a deal”.   Certainly you didn’t see Southwest walking away hurt or pouting.  Instead, they continued on with their business and never looked back.

One minor prediction:  I would be wholly unsurprised to learn that Southwest either adjusts or deletes their new priority boarding option.  Overwhelming conclusions to date are that it doesn’t really net you all that much advantage with the way it is presently structured.   I suspect a fee change (lower) or a rules change may come along after another 6 to 12 months of it being deployed.

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1. It seems to me that our government and Congress in particular has far bigger pressing problems to deal with than attempting to swat at airlines over frequent flier miles.  
2. Levying fines on Continental, ExpressJet and Mesaba for the Rochester, Minnesota incident is surprising everyone because it lays blame on everyone we, ourselves, would blame. 
3. Voting Midwest as a best airline (Zagat) is just strange given that it really isn’t an airline so much as a brand now. 
4. Nothing sells an aircraft like the head of state for the manufacturer.

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A couple of weeks ago I wrote about Airtran’s decision to enter the Milwaukee – Dallas / Ft. Worth market using Skywest Airlines.  That post is HERE.

I noted that American Airlines has virtually owned this market with Midwest also having a nice chunk and AA hasn’t really had much in the way of competition for that route.  Well, the American Airlines of old has responded.  According to the Airline Biz Blog, AA is adding flights to that route using American Eagle and those flights match up closely to Airtran’s announced times.  No one should be too surprised that AA has responded this way since it’s been their strategy to flood new competition with capacity and frequency and to capitalize on their hub connections. 

Will it work?  Many would give AA the advantage in this battle because they do have a tremendous number of connections through Dallas.  The problem is, my sense is that the main part of this route is traffic that originates and ends at those two cities.   I’m not sure there is a whole lot of connecting traffic.  Certainly there is some. 

However, American Airlines has kind of abused Milwaukee for several years charging very high fares for that route and Midwest has never challenged them much instead choosing to enjoy an uneasy level of detente.  Now we see Midwest, Airtran, American Airlines and, indirectly, Southwest Airlines in this market.  Interesting. 

The next move is up to Airtran.  If they keep Skywest aircraft (50 seat CRJ-200)on this route and don’t upgrade it to their own aircraft, I suspect American Airlines will win this fight.  If Airtran chooses to move their B717 or even their B737 (I suspect the former is a better fit) on to the route, I think American Airlines might just see their traffic erode badly.  Milwaukee to Dallas consumers are accustomed to the B717 and, I think, would enjoy the relative comfort and opportunity to upgrade to Business Class (cheap and easy to do on Airtran). 

Midwest is the unknown.  Frankly, they are using their Embraer E-170 aircraft (76 seats, all coach) on this route now and while it is certainly better than American Eagle’s ERJ-145s (50 seats, cramped coach), they still aren’t what those customers are accustomed to enjoying on that route.   Until less than a year ago, Midwest flew very comfortable 717 aircraft that included both a comfortable business class as well as a comfortable coach seat.  Airtran can offer that now.

Would AA add MD-80 or B737 aircraft to the route?  No, they don’t have aircraft available and the best they could do is, perhaps, a CRJ-700 via American Eagle.  However, those aircraft are already very busy on other routes. 

American called Airtrans’ bluff and even raised the stakes, so to speak.  American Airlines is not in the habit of giving up either so we can expect that they’ll keep these frequencies (and the lower prices) as long as they think they can to preserve the market share.    Right now, they are offering a matching $89 fare (each way) for advance purchase.  However, their remaining economy fares are $678 and $863 each way (there is a First Class fare for over $1700 each way but which requires a connection to someplace like Chicago so you can fly on a mainline aircraft).   I think we see where Airtran can offer real value here. 

So, we know two things.  First, it is up to Airtran to make another move or accept the status quo.  Second, there is way too much competition going on for Milwaukee traffic.  Some airline will have to quit.

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Michael O’Leary, CEO of Ryanair in Europe has been demanding a new deal for up to 200 Boeing 737 aircraft between 2013 and 2016 according to Reuters.  Keep in mind that up to 200 aircraft likely means a firm order for between 50 and 100 aircraft with options for more.   Boeing, on the other hand, has so far refused to negotiate what is by all accounts a rock bottom deal on their 737.   More amusing is that Airbus has so far refused to offer a better deal on their aircraft since they’re already familiar with Mr. O’Leary’s tactics when it comes to negotiating.  He likes to play one manufacturer off another.

There are likely several things at play here.  First, Ryanair has often made a profit by “turning” their aircraft rapidly and selling them for a profit to other, smaller players.  A situation that has no doubt irritated Boeing as they are looking to sell to users, not distributors.  The original pricing for Ryanair was negotiated at a time when commercial aircraft sales for the industry and Boeing in particular were pretty flat and there is no doubt that Ryanair offered a serious opportunity for cash flow at a time when Boeing was in need of filling slots in its delivery schedule.

Not so much anymore.  Boeing has a health backlog of orders and many of them for airlines who will pay more per aircraft and be happy to receive their 737s early.  American Airlines has continued to up its orders for the 737 in light of the fact that no new next generation 737 replacement is due anytime soon from either Airbus or Boeing.   Other airlines are likely to do the same over the next year or two.  There is no incentive for Boeing to make an even better price to Ryanair.

And I think Mr. O’Leary knows it.  But by making his threats and going public with them, he has begun to set an argument for why Ryanair will likely do a couple of things in the next few years.  One will be slowing their growth.  The truth is, growth opportunities for them in their market(s) are becoming few and far between.  Second, they really can’t continue to “flip” aircraft in the next few years as there are plenty of other sources developing  for second hand NG 737 aircraft.  Slowing their purchases will give them a public rationale for slowing growth and reduced profits from sales of the 737. 

I also doubt that Mr. O’Leary will distribute money to either his executives (in the form of bonuses) or to his shareholders.  If there is one thing he knows, it is that an airline lives and dies by its cash holdings.   It’s a weapon that I don’t believe he would give up.  Instead, they may choose to invest it.

Mr. O’Leary has publicly spoken about creating a new trans-Atlantic airline in the future.   Whether or not it is just talk, we’ll never know unless he does it.  However, he does need the right kind of aircraft for developing his self-described premium/economy airline for the markets he thinks he can access.  Part of his plan includes flying to secondary airports again in the US to save money.  A plan that, I think, he’ll learn isn’t nearly as feasible as it might be on the European continent.   There are no secondary airports with good transportation to their major market centers.   You can take passengers to Hartford, Connecticut, for instance, but there isn’t a cost effective way to get from there to Boston or NYC. 

However, that doesn’t mean Mr. O’Leary can’t access a number of markets and do so profitably.  He is a master negotiator and there are plenty of US airports that would potentially welcome such an airline.  With lots of cash, reduced capital requirements for the Ryanair fleet and good timing, they can establish such an airline if they can find the right equipment to use. 

And that leads us back to Boeing.  I think Mr. O’Leary recognizes that the 787 might be just the right equipment for such an airline.  Both the 787-8 and 787-9 offer the right kind of efficiency, size and economics for make such a venture a success.  There is no way that he’ll buy second hand aircraft such as the 767 or the A330 for such routes.  Its difficult to find new(ish) aircraft on the used market that are worth purchasing and the A-330 probably is just too big for the routes.  But the 787 potentially offers the right package.  And I wonder if the current bluster about a deal isn’t about getting Boeing “prepped” to do a deal on the 787 with earlier delivery slots at great prices. 

Time will tell.  One thing I’m entirely certain of is that Michael O’Leary doesn’t have nearly as much contempt for Boeing as his bluster indicates.  Both companies have done very well with each other and both understand that its in their interests to find a way to continue to do business.

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Several airlines are implementing surcharges for peak travel days such as American Airlines and Continental Airlines but others too.

This strikes me a bit like the fees for checking the first bag.  In this case, airlines are advertising fares but charging surcharges for those peak days most attractive to the traveler.  It makes me wonder a bit on whether or not taxes are being collected on the surcharges and it makes me wonder if the surcharges aren’t a bit deceptive when it comes to advertising.   

If those surcharges are needed, why not just raise the fare $10 (or whatever the surcharge fee is) for those particular days.   Because then they would have higher fares when being shopped against airlines without surcharges.

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The Associated Press is reporting that US Airways pilots are asking for mediation in their contract negotiations, a step which is one of several on the path to going on a strike ultimately.   No, this doesn’t mean a strike is imminent.  I suspect that a federal mediator is going to be held off until the courts decide who actually represents the pilots. 

US Airways pilots have been in a dispute between the former America West pilots and the former US Air pilots since the merger of the two airlines.   Former US Air pilots refused to recognize a binding arbitration ruling that integrated the seniority lists and ultimately they held an election to de-certify their original union and create their own in the model of American Airlines pilots.   Originally, the two groups were represented by different branches of ALPA originally and the former America West pilots have refused to recognize the new union and have so far won court battles against the new union. 

Now each group is awaiting an appeal to be heard by the  9th Circuit Court of Appeals and the legacy US Air pilots are hoping to see the original ruling against them overturned.    The central issue at stake is that the legacy US Air pilots favor merging the pilots’ lists strictly on seniority.  This move would favor them because most of those pilots (legacy US Airways)  have considerably more seniority based on hire date than the former America West pilots.  The America West pilots favored a “blending” of the seniority lists with some jobs and opportunities fenced off for each group and that is basically what the binding arbitration ruled for.  Since that date, US Airways has been unable to completely merge their operations because each pilot group has been working under a different contract.

It’s my guess that the National Labor Relations Board will wait to assign a mediator until the 9th Circuit Court rules on who actually represents the pilots and under what conditions.  My suspicion is that the 9th Circuit Court will in fact rule in favor of the former America West pilots again mostly because the arbitration between the two groups was legal and binding and won’t want a precedent which allows for nullifying an agreement and changing unions if you don’t like the result.   In some ways, I’ve been surprised that US Airways hasn’t gotten involved in this dispute if only because it keeps their potential savings from fully integrating the two airlines from being fully exploited.  Given that this conflict has been going on for almost 4 years, I would think that the company would have lost patience by now.

Ordinarily, a company would not want to be involved in such conflicts because they’re a bit like getting in between husband and wife during a domestic dispute.  They’ll both turn on you.  However, enough time has passed that the company could legitimately advance the argument that they are being materially harmed by a group of employees who are advancing their own interests against both the companies as well as the other pilots.    There is no doubt that there is “economic harm” at this point. 

This situation is precisely why many airline executives view mergers unfavorably at this point.  Pilots’ unions hold the most power of any labor group and obviously  hold the power to severely impact a company’s ability to operate profitably to the detriment of every other  interested party.  A problem that has existed since the 1960’s really and a problem that should be solved if this industry is to find a way to thrive in competition.

Even if the 9th Circuit Court does find in favor of the former America West pilots, it is likely that the legacy US Air pilots will file an appeal with the Supreme Court.  However, that case is unlikely to be heard and most likely will get settled quicly with the Supreme Courts refusal.   Unfortunatley, the legacy US Air pilots have harmed their case at every turn with rash behavior.  First they rejected binding arbitration, then they filed suit against their national organization and when it appeared they may lose, they then de-certified their union and established a new one to represent their interests by holding a company wide vote in which they were the numerical majority in hopes that that would resolve the issue.   Courts don’t really like venue searches like that. 

What is certainly also sad is that both groups of pilots have been operating under old contracts and have had no opportunity to enter into contract discussions with management.  This has, so far, been to the management’s advantage in that if those discussions had been held 4 years ago and a contract in place 2 years ago, they would likely have seen raises and not had to negotiate under the cloud of the worst economic recession in decades.  No one won here and a pox on all three houses for not settling this 2 years ago. 

I’ll add a personal note by saying that I think the worse part about this is the US Air pilots refusal to even acknowledge that without the merger they would likely have gone bankrupt a third time.  So far, no airline has survived a 3rd bankruptcy and given the dire straits that US Airways was in prior to the merger, a third bankruptcy would have almost certainly meant liquidation and the loss of pensions and other benefits for all the employees.  It is never nice to admit that you were in a weak position to begin with but sometimes its necessary for succeeding in the future.   The only people in sympathy with them are themselves and their families.

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USA Today’s Today in the Sky blog is reporting that Vietnam Airlines is ordering 4 A-380 and 2 A-350XWB aircraft from Airbus and this strikes me as a bit odd.   The airline says it will use the aircraft for possible long haul routes to the United States and Europe but a little background into the airline tells me this might either be a vanity order or a political order.

First, while Vietnam Airlines does own and operate Airbus aircraft already (A-320 series and A-330 series), it’s chosen high capacity, long haul aircraft is the 777-200 at present (it owns 12) and has orders for the 787-800 and 787-900 (16 total with an original entry into service of 2010).   The 777-200 is an excellent aircraft for the airline for long haul, high capacity routes it might fly to both Europe and the United States already and if additional range or capacity is needed, they could add the 777-200LR or 777-300ER to the fleet and keep commonality in their fleet.  In addition, their soon to be arriving 787 aircraft are also already capable of the distances needed and engine type selections (not yet indicated) could already permit them to experience savings from similar (although not exactly the same) types being operated between the two aircraft (GE or RR).

In addition, the current economy has reduced leisure travel to Vietnam from both Europe and North America so much that one really does wonder how Vietnam Airlines expects to keep those A-380 aircraft full year round.  It is an aircraft that best serves high density, long haul routes that see lots of traffic all year.  In addition, the A350-900XWB doesn’t really offer them more in capacity over the 777 and offers less lift for cargo on similar long haul routes.   The kinds of routes that Vietnam Airlines is most likely to fly are already best served with a fleet in place (777) and a fleet about to arrive (787).

I have an odd feeling that this order is political.   Airbus hasn’t seen a new order for the A-380 since 2006 and its been a very dry season for the A-350 as well.  With the political ties that exist between France and Vietnam and the report that Vietnam will also see Airbus contract to have certain parts made in Vietnam, this feels like France once again bolstering Airbus and a much smaller state with economic ties to France giving in to pressure.  I suspect the likelihood of an Airbus A-380 ever showing up in Vietnam Airlines blue livery is very small if at all.  

France is one of Vietnam’s largest trade partners at present and it’s notable that this order came after France’s Prime Minister made a personal visit to Vietnam to promote trade between the two countries.  It has been quite common for French Prime Minister and French President to make visits to seal deals on behalf of Airbus in the past.

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The Dallas Morning News Airline Biz Blog is reporting that Airtran is arranging for commuter airline SkyWest to fly new routes on behalf of Airtran from Milwaukee, WI to several destinations including Dallas / Fort Worth and Washington D.C.

SkyWest will be using 50 seat Bombardier CRJ-200 aircraft for these flights and that interests me for a few reasons.  Due to long time personal connections to Milwaukee and living in Dallas for the past 40 years, I’ve long monitored what various airlines offer between the two cities.  Strangely, it’s a city pair that does have a lot of traffic but it has never been served very well by any one airline.

I suspect the establishment of this route is really for a few reasons.  One, it allows Airtran to compete with the current “dominant” player on the route which is American Airlines.    American Airlines at one time had as many as 5 frequencies on the route until the current economic decline.  Presently, they are serving it with 3 flights a day using Embraer ERJ-145 aircraft.    The flights haven’t been well served that aircraft because the flight duration exposes a lot of discomfort for the passenger during the 2.5 hour flight.  In addition, it has often been necessary to deny boarding to passengers due to weight and balance issues for making the flight.   The airplane often cannot carry a full load and enough fuel for the flight.

But American’s only real competition for non-stop flights has been Midwest Airlines.   Midwest has flown about 4 frequencies per day using the Boeing 717 and now the Embraer E-190.   Anyone who has flown Midwest on that route knows that that is a very comfortable flight and generally staffed with much nicer people.  Midwest has a loyal following on that route and I suspect Airtran wants to try to eat into it using price. 

Finally, by offering the non-stop flights, Airtran gets to tweak the nose of its newest competitor in Milwaukee, Southwest Airlines.   By starting this route now, Airtran has an opportunity to grow the business and offer a competitive distinction between themselves and Southwest in the Milwaukee market.  Southwest Airlines cannot fly that route as a non-stop yet because of restrictions placed on it due to their using Love Field airport in Dallas instead of DFW. 

Airtran is likely to be very successful on that route because American Airlines has never treated it as anything but an unloved step-child and much of the traffic between the two cities is O&D rather than follow on traffic.   American may retain some passengers for follow-on travel to regional destinations around Texas but I suspect that will be done by using 2 flights a day in the near future. 

In addition, Airtran has managed to endear itself to Milwaukee despite the ugly picture painted about themselves when they were attempting to take over Midwest Airlines.   Locals in Milwaukee like them and have found them to be a real alternative to Midwest Airlines both on price as well as quality. 

I think Airtran will manage to grow this route (as well as the others being served by SkyWest) and ultimately take them over with their Boeing 717 aircraft in the future.    Airtran will likely erode AA’s traffic first and then take over some of Midwest’s loads on price allowing them to ultimately become the dominant player in that city pair.  It’s doable using a CRJ-200 for now and upgradeable to a Boeing 717 pretty quickly in the future.

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In the Cleveland Plain Dealer, Continental President Jeff Smisek was quotes as saying that Continental may re-visit the idea of merging with United Airlines in the future.  The story can be read HERE.

Continental has experienced a rather rough dip in unit revenues over the past year even compared to other US legacy airlines.  The airline was much more devoted to the business traveler (particularly in the international segment) and the decline in business travel has hurt it more than some other airlines.   A merger with another airline could help Continental diversify its revenue sources and experience synergies much like the Delta/Northwest merger appears to be providing that mating.   To date, Delta / Northwest has not been profitable but it does appear to be weathering the economic recession in the airline industry quite well and its new found flexibility with both equipment and passengers seems to have benefited the airline.

However, I didn’t like the idea of Continental merging with United in 2008 and I don’t like it now.  United is saddled with a lot of debt, an angry labor pool and aging aircraft.  Continental, on the other hand, is much the opposite.   While Continental has a well trained management corps and their own employees are much happier, I don’t see what United brings to the table that they can’t already develop on their own over time.   The Denver hub would be of little value to Continental and is already a battleground between two LCC carriers and United.   United does have the better system over the Pacific but lacks the aircraft to modernize it while Continental has the better product for Pacific travel, it doesn’t have the spare equipment to spruce up those routes to compete against the likes of Delta/Northwest. 

To me, it seems that Continental would benefit more from smaller, more tactical mergers that dovetail more closely with their service and aircraft fleet.  Alaska Airlines is one partner that, in my opinion, would be an excellent fit for Continental.  It would give them an West Coast route structure, a fleet that meshes (mostly) with Continental’s, an employee group already accustomed to be treated well and a management corps that is doing remarkably well and which could augment Continental’s own management leadership nicely.    Even more important, Alaska Airlines is profitable at present.

The next best strategy for Continental is to start planning for the future.  They have a number of new long haul aircraft due over the next 4 years and despite how everyone feels in the airline world, this recession will be over someday in the future.  Continental could capitalize on their strengths and aircraft fleet by targeting United Airlines and its Pacific destinations for 2011 or 2012.  By selectively targeting United and US Airways, Continental could fair very well without taking on all the baggage any other legacy airline has to offer it. 

Joining up with United Airlines really doesn’t offer Continental much that it can’t already achieve except the Chicago hub for both domestic and international flying.  Continental’s Cleveland hub is a very distant second to United’s Chicago but I wonder if having that kind of market dominance in Chicago is worth the trouble of bad labor relations, old aircraft fleets and a group of executives that have shown themselves to be mediocre in everything they execute.   In fact, by joining the Star Alliance, I suspect that Continental will reap almost as much benefit with little trouble.

Continental’s new home in the Star Alliance is interesting to me in that Continental’s product seems to much more closely match that of other Star Alliance partners (Lufthansa, Singapore Airlines, Thai, Air Canada, Air New Zealand) than either existing US based Star Alliance member aka United Airlines and US Airways.   I suspect that member airlines will be quite willing to book more traffic on Continental for US domestic destinations than on United or US Airways.   If anything, US Airways becomes the odd man out and should begin considering finding a new home.  I’d suggest OneWorld.   Nonetheless, I’ll be monitoring Continental’s experiences in the Star Alliance for the next year as I do think it’ll make a positive difference in their fortunes.

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American Airlines announced that they will be closing the Kansas City Maintenance Base in about a year.  The maintenance base was begun by TWA and has existed for oer 50 years servicing aircraft that include the Lockheed Constellation, the Boeing 747 and the McDonnel Douglas MD-80.    The Kansas City newspaper has a photo gallery of this base HERE.

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Northwest Airlines pilots have their flying privileges revoked by the FAA.

The FAA has revoked the pilots’ certificates immediately.  They now have 10 days to appeal this emergency action (and no doubt will.)

More from the Dallas Morning News HERE.

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I  have a funny feeling that safety and getting those Delta/Northwest ops combined is about to become a big focus at the airline. 

Incident 1: NTSB INVESTIGATING LANDING OF COMMERCIAL JETLINER ON TAXIWAY IN ATLANTA
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The National Transportation Safety Board is investigating the landing of a Delta B-767 on an active taxiway at Atlanta Hartsfield International Airport (ATL).

According to preliminary information received from several sources, on Monday, October 19, 2009, at 6:05 a.m. EDT, a Boeing B767-332ER (N185DN) operating as Delta Air Lines flight 60 from Rio de Janeiro to Atlanta landed on taxiway M at ATL after being cleared to land on runway 27R. No injuries to any of the 182 passengers or 11 crewmembers were reported.

A check airman was on the flight deck along with the captain and first officer. During cruise flight, the check airman became ill and was relocated to the cabin for the remainder of the flight. A medical emergency was declared and the company was notified by the crew. A determination was made to land at the scheduled destination of ATL.

The flight was cleared to land on runway 27R but instead landed on taxiway M, which is situated immediately to the north and parallel to runway 27R. The runway lights for 27R were illuminated; the localizer and approach lights for 27R were not turned on. Taxiway M was active but was clear of aircraft and ground vehicles at the time the aircraft landed. The wind was calm with 10 miles visibility. Night/dark conditions prevailed; twilight conditions began at about 7:20 a.m. EDT and the official sunrise was at 7:46 a.m. EDT.

A team of four from the NTSB, led by David Helson, is investigating the incident.

The issue of runway safety has been on the NTSB’s Most Wanted List of Safety Improvements since its inception in 1990. Information on the NTSB’s work on runway safety is available at http://www.ntsb.gov/Recs/mostwanted/runways.htm
Incident 2: NTSB INVESTIGATING FLIGHT THAT OVERFLEW INTENDED MINNEAPOLIS AIRPORT
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The National Transportation Safety Board is investigating an incident where an Airbus A320 overflew the Minneapolis-St Paul International/Wold-Chamberlain Airport (MSP).

On Wednesday, October 21, 2009, at 5:56 pm mountain daylight time, an Airbus A320, N03274, operating as Northwest Airlines (NWA) flight 188, became a NORDO (no radio communications) flight at 37,000 feet. The flight was operating as a Part 121 flight from San Diego International Airport, San Diego, California (SAN) to MSP with 147 passengers and unknown number of crew.

At 7:58 pm central daylight time (CDT), the aircraft flew over the destination airport and continued northeast for approximately 150 miles. The MSP center controller reestablished communications with the crew at 8:14 pm and reportedly stated that the crew had become distracted and had overflown MSP, and requested to return to MSP.

According to the Federal Administration (FAA) the crew was interviewed by the FBI and airport police. The crew stated they were in a heated discussion over airline policy and they lost situational awareness. The Safety Board is scheduling an interview with the crew.

The cockpit voice recorder (CVR) and flight data recorder (FDR) have been secured and are being sent to the NTSB laboratory in Washington, DC.

David Lawrence, the Investigator-in-Charge, is leading the team of 3 in investigating the incident.

Parties to the investigation are the FAA and Northwest Airlines.

It would appear that pilots at the combined companies are allowing themselves to be a bit distracted these days.  I particularly hope that the CVR transcripts for that second incident become available one day.  Something tells me that policy talk wasn’t the problem.

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