What is an airline selling these days? Food? Baggage transportation? In flight entertainment? Mood lighting? Opportunities to upgrade to business class?
It’s kind of hard to tell these days what an airline is selling with the dilution that has occured as a result of de-bundling services. The truth is, airlines are more frequently in the news for some subsidiary service they’ve de-bundled than they are for their primary service product.
The primary service product is transporting passengers reliably between point A and point B and if you don’t do that, no manner of any fees is going to make you profitable. It won’t matter how many channels of TV you have if the customer can’t get where he/she is going on time frequently enough to build trust, you aren’t going to make a profit.
Think I’m wrong? Ask yourself why Southwest succeeds with a very basic service product even compared to many other LCC airlines.
It’s about the customer getting where they want to go when they wanted to get there, stupid.
The US Airline Pilots Association representing all of US Airways pilots is calling for the resignation of US Airways Vice President of Safety and Regulatory Compliance Paul Morell citing unaddressed lapses in safety as the primary reason.
This is what happens when you don’t have respectable relations with your labor union groups. Safety is popular target for airline unions because it is very difficult for the airline to address the topic without appearing to be on the defense for something that may not have even been going on.
And airline unions target their company when they haven’t gotten a deal and it looks as if they aren’t going to get one soon. It applies pressure.
Is US Airways unsafe? No, it isn’t. The airline is clearly running a safe operation. Whether or not it could be even safer is a question I cannot answer (and nor can the airline pilots either.) That calls for an objective third party audit of US Airways safety. Coincidentally, it appears that US Airways declined to participate in such a study because that is what USAPA talks about in its public complaints.
I am a big advocate for there being as much transparency and objectivity possible in evaluating safety at airlines. I think participation in programs where pilots can self report safety incidents without consequence is an excellent idea and I firmly believe that airlines should participate wherever possible in third party studies.
That said, US Airways may have had an excellent reason for declining participation and we’ll leave that up to them for a response.
I have to take a shot at USAPA for this: It is no less responsible to make safety a political issue than it is for an airline to decline participation in third party safety studies. There are plenty of issues to talk about but casting aspersions on the safety of airline to apply pressure is over the line.
Jon Ostrower has written about a conversation he had with Southwest Airlines VP Operations Coordination Jeff Martin. Mr. Martin says they need an efficient replacement aircraft for their 200+ 737 Classic aircraft and they need it sooner than 2019/2020 and, no, a re-engined 737 Next Gen does not meet the criteria they have for such a replacement.
Actually, Southwest has two subfleets to think about. The 737-300/500 fleet and the 717 fleet. The former because it is just aging and aging quickly and the latter because it isn’t sustainable as a fleet over time since it isn’t being made anymore and obtaining additional aircraft would be difficult at best.
Would Southwest consider another aircraft maker? Absolutely. This idea that Southwest wants one fleet type is somewhat silly. This is an airline with over 500 aircraft and one aircraft type doesn’t fit all situations as well as 2 or 3 fleet types.
I’ll also point out that since Gary Kelly has taken over as CEO, Southwest has embraced a lot of change and they’ve succeeded despite predictions to the contrary.
In addition, I recall Southwest getting a bit lathered up over what they saw regarding the Frontier Q400 fleet when doing their due diligence almost two years ago. If there is one thing Southwest likes to do, it’s save money.
I think Bombardier products will get a strong look. I think the CSeries and the Q400 might get looked at quite closely. Dispatch reliability is going to be a key point, however. But there are at least 2 cities that SWA operates from in which a fleet of Q400 aircraft could make very profitable bases: Chicago and Dallas.
In addition, I think Embraer will have a shot at pitching their aircraft (current and future) and I think Airbus will get its feet in the door as well over the A320NEO. Thing is, the very fact that it is the A320NEO that Airbus has to offer is what, in my opinion, makes them an unlikely player at SWA. Southwest doesn’t want a warmed over design to tide them over. They want revolution over evolution when it comes to efficiency.
Revolution is potentially the CSeries with both enough capacity and range to fill almost all of Southwest’s requirements. They also have enough seating range to make it an effective aircraft in both the 110 and 130 seat range. That is going to be a sweet spot for Southwest for some time to come. Yes, they need an aircraft that will seat 145 to 170 as well (and that aircraft will also need continental range as well) but they’ve got that in a fairly new fleet of 737-700/800 aircraft. The nice advantage to the CSeries / Boeing approach is being able to have a range of sub-types across a two type fleet. You get effective 4 needs met with two basic types and doesn’t that approach sound frugal?
Boeing needs to wake up just a bit and get a little more aggressive. To believe that SWA is a Boeing customer now and for the future ignores a great deal of change when it comes to SWA and its needs.
Last week, a total of three Muslim imams were denied travel to Charlotte, North Carolina by two different airlines. One in New York City by American Airlines (who offered no real reason why) and two more by Atlantic Southeast Airlines operating for Delta Airlines (because a pilot felt that some passengers remained uncomfortable with their presence despite not one but two security screenings.)
I’ve already posted about this and I’ve already said shame on Delta. I’ll say shame on American Airlines as well.
Focusing on someone’s religion as a security risk is extremely foolhardy. Ignorance is not an acceptable excuse even where security is concerned. More importantly, we’ve already experience far too many of these incidents in the past 10 years to excuse flight crew or security personnel behaviour on this subject.
Denying these people the ability to fly is tantamount to making them second class citizens (whatever their nationality) for no other reason than their religion. As a nation, we have historically resisted allowing religion to be a reason to persecute someone but in the case of muslims and particularly Muslims wearing traditional robes and headgear, we seem to have suddenly accepted that that is OK. Just because someone speaks a foreign language (Arabic or any other language indigenous to a Muslim culture), we’ve almost enthusiastically treated those people as security risks.
This is sheer stupidity for two reasons. First and foremost, it goes against the very grain of our nation and our constitution and the gains we’ve made with respect to civil rights over the past 50 years. It’s an insult to our national culture and our national laws.
Second, it shows we aren’t being objective about our security concerns. Good security comes from good objectivity, not subjectivity. You can no more point to Muslims as a risk by virture of their terrorist acts than you can point to Catholics as being a risk by virture of the terrorist acts of the IRA. In fact, I would point out that if that was valid criteria, you would actually be at greater risk from Irish Catholics than you would a Muslim from Yemen because the Irish Catholic can far more easily “blend in” with our national background.
As far as I can tell, we don’t ban Irish Catholics from flights because of their religion or accent. Oddly enough, we do not even ban Hindi people because of their association with violent Hindu extremists.
I blame the government for promoting this behaviour but I particularly blame the airlines for allowing their staff to practice it. The best and only response to either of the incidents from last week would have been to find a flight crew that has good sense and board these people for their flights. Tolerating this racism within a company is stupid and bad business.
An abundance of cautiou doesn’t mean you get to give into predjudice. And let me point out that if we continue to tolerate this, there is no reason that some other class of people can’t be identified in the future to practice this predjudice against. That class could be white women over 50 or black children or hispanic males over 20 or white men between 30 and 40. You aren’t immune to this potential.
Then there is Rageh Al-Murisi, the man who banged on an American Airlines cockpit door on a flight to San Francisco. It’s notable that this man wasn’t dressed in a way that would particularly identify him as a Muslim or an imam and he got onto his plane.
The name International Airlines Group, holding company for both British Airways and Iberia and managed by BA’s Willie Walsh, couldn’t have a more appropriate name. Or more bland. But that is the stated purpose since IAG is about managing brands across the world rather than conquering the world with one brand.
That kind of makes other airlines and industry watchers wonder who the next target is. Many considered QANTAS a target but that almost seems illogical to me despite the close ties between QANTAS and BA. It doesn’t get them much more in QANTAS’ part of the world. But it is true that it is a strong brand.
Instead, I think IAG is looking for strong brands in parts of the world that they want more access to. I think that means Asia and I think that means North America. Those are the two centers of commerce that Europe does business with and adding a brand in each of those areas only helps grow the business.
The challenge is adding a brand from another country because most countries still have laws governing ownership of their airlines. So that, to me, means targeting brands in countries with liberal, commerce centered laws and/or in British Commonwealth nations.
It’s the Cathay Pacifics, Air Canadas and Air New Zealands that would, to me, appear to be more attractive on a global basis. Strong brands with strong customer loyalty.
It won’t be about access to facilities or fleets. It’ll be about identify brand strength with a service product that harmonizes reasonably well with IAGs current brands. It will be about getting strong executives who’ve crafted strong business plans for their regions. It won’t be about getting a firesale price on airline because, frankly, those airlines have nothing to offer but a few assets and assets are easy to buy.
Richard Anderson, CEO of Delta Airlines, has pointedly and consistently talked about managing an airline for a profit and while that seems like a no brainer, I’m not sure everyone does that.
Delta has recently announced cuts in capacity and while that, too, seems like a no brainer, I think people miss Delta’s point. If a route isn’t earning a profit it needs to go. Few airlines use this as their criteria. The larger point from Delta is that it isn’t about market share and I agree.
In addition to capacity cuts, Delta has also announced a program targeted towards early retirements to trim their labor force as well. This is to match capacity cuts and rightfully so. Oh, mind you, I think this is also about getting the work force to average a younger age in seniority as well but that is something airlines have to do on a regular basis as their work force tend to stay with not nearly as much “churn” as other large companies experience.
Southwest has always managed for a profit and it has proven it can be done. It’s kept its workforce levels consistent with its business and, more importantly, it doesn’t fly routes that cannot regularly produce profit. Not for nothing, this is one reason why several cities are worried that SWA will cut Airtran routes currently serving them with subsidies. SWA doesn’t see subsidies as a sustainable profit model.
There is something that I often remember my father telling me about the airline business (he’s a former EVP from an airline no longer in business and from 30 years ago. You have to look at ever route between two cities as a small, entreprenurial business. You have to invest in the business and you have to get a return on that investment in a timely manner. Failing that, you have to drop it and move on to other opportunities.
This is what Delta is doing. Instead of managing for surival, they’re managing for profit. Instead of managing for sheer size, they’re managing for profit. Instead of managing on the basis of what another guy is doing, they’re managing for profit. In Delta’s most recent earnings call, Richard Anderson made the comment: “This isn’t a hobby.” and I think that underscores the proper attitude about being results oriented.
This is not what we seeing American Airlines doing. It wasn’t my sense that United Airlines was doing this pre-merger with Continental and it isn’t necessarily my sense that even some LCC carriers such as JetBlue are making this their goal. Notably, I do think that US Airways is doing this and the results show.
So when does someone ask when AA’s management team plans to manage for profit? I haven’t seen AA manage their route system for profitability. I haven’t seen them manage their labor force for profits. I haven’t seen them manage their fleet for profitability. I’ve seen them managing for the status quo in the hopes that other airlines will return to AA’s fate when it comes to costs.
The question is, why should you expect that when there has been a fundamental change in your competitors attitudes towards managing their business for profit?
Happy Mother’s Day. Know how to get back at a hostile mother in law?
Book her a flight on American Airlines to come visit you.
Airport codes identify airports around the world. In the United States, airports are identified with a 3 letter code (smaller airports sometimes have letters and numbers.) There are many that are legendary.
JFK: John F. Kennedy (NYC)
ORD: Chicago O’Hare
LAX: Los Angeles
SUX: Sioux City
Airline workers know these codes by heart and many of you aficianados know them just as well.
Question: (without looking it up, of course) What airport is FFA?
It’s time we get over ourselves when it comes to Islam and clerics serving that religion and culture. Shame on Delta and ASA for not replacing the pilot instead.
American Airlines will be testing streaming video on two WiFi equipped airliners using the existing onboard GoGo system. Apparently the GoGo system was robust enough to store this video and rather than be streamed from a ground location, the content will be stored onboard the aircraft and distributed via the onboard WiFi system.
I think wireless is a great idea for aircraft. Weight is a fundamental issue on airplanes and WiFi allows this to be overcome in many cases. However, I’m not so sure WiFi is ripe for this yet. Streaming video is a bandwith hog even when sent to laptop devices (which in most cases can accept higher definition on screens that are often now as much as 17″. What happens when 50 people stream video from the same system at the same time on the same WiFi system?
Ensuring robust enough servers is easy. Ensuring robust enough WiFi is not. If customers experience buffering delays, this will be an epic fail in the test. Especially if they’re paying for this content. While you can boost WiFi bandwith by streaming it on an “N” standard, “N” standard is still pretty new. New laptop users will have it but not necessarily laptops that are as little as 3 years old. Bandwith is still a problem to solve.
I hope this is relatively successful. My instincts tell me that aircraft aren’t ready for streaming video via WiFi with the current technology. At minimum, I think you may need to be using “N” standard for this. In fact, the real solution might be a power outlet and an ethernet connection at every seat which is fundamentally cheaper and lighter than an entire IFE system at every seat.
Mayor of Fort Worth, Mike Moncrief, with the agreement of Dallas’ Mayor Dwaine Carraway, says that Southwest needs to pull Airtran out of DFW much faster than what has been so far indicated. There is a belief that Southwest might not have Airtran exit DFW until December.
Southwest, under the agreement over Love Field, is supposed to lose one gate for every gate it operates at DFW. Everyone with an opinion agrees that it was not practical to expect SWA to stop Airtran flights to DFW upon the day they consummated the merger. Gary Kelly has said from the beginning that there is an urgent intent to transition away from DFW as quickly as possible but has never stated what the date is for that.
Now quite a few parties in Dallas want to see Southwest commit to an expeditious transition and one that doesn’t see December as a target date.
You wouldn’t think that an entire community would be so hostile towards an airline that by anyone’s measure has done so much for the community. This is the other, uglier side to Southwest’s history in Dallas and I’ve always found it entirely distasteful. It’s in poor taste to engage in this hostility towards an $11billion company that has remained loyal to the Metroplex and which has certainly behaved as a far better corporate citizen than another Metroplex based airline that happens to sit within Fort Worth city limits.
Advertising Age had a brief interview with Herb Kelleher of Southwest Airlines recently and one thing about it struck me quickly. It’s a lesson many businesses could stand to learn.
When things got tough for Southwest, they spent more, not less, on advertising and marketing.
It’s a lesson I learned myself more than 10 years ago when I was partners in a construction firm and new construction jobs dried up. You don’t fold up, you go hunt the business even harder.
It seems like an obvious thing but it really isn’t. Just take a look around you and at what has happened with a great many businesses over the past 3 years. The first reaction to bad times is to stop spending money . . . period. People retrench and hunch down to try to withstand the storm about to hit.
And a few others go and innovate. With Southwest, it’s advertising but it is much more as well. They innovate. They look for smart savings. They embrace change and they empower people to use good judgement in executing that change. In the 1990’s, when fuel prices spiked as a result of the first Gulf War, Southwest pilots suddenly started requesting higher altitudes on their flights to the surprise of other airlines and air controllers. In fact, they got downright aggressive about getting optimal altitudes for their flights. Why? Because it saved money.
Now, among US airlines, Southwest is virtually the only one embracing the need to invest in GPS technology to be prepared for NextGen air traffic control. Other airlines are making statements to the press about its expense and how the US government should pay for it. Southwest has it, is implementing it and benefitting from it. It saves them money now and it will save them more money in the future.
When Boeing was designing the cockpit for the Next Generation 737 aircraft, Southwest (Boeing’s biggest customer for the 737) asked that the new flat panel cockpits be designed to emulate the “steam” gauges being used in their 737-200/300 fleet so that there would be no transition between the aircraft for its pilots. Why? Well, training was one reason but there was a better one underlying that: Pilots would be able to seemely switch from aircraft to aircraft during their flight day without having to slow down and re-think what they were doing each time they took over a new aircraft. That made turning flights quickly still doable.
What do you do when it gets tough? Innovate and advertise. That’s what Southwest does.
Southwest and Airtran are now one airline legally although both will continue to operate separately in varying degrees during their transition to one operation. Once change that will come sooner than later and one that will disappoint me at that is Airtran leaving DFW airport. Southwest isn’t permitted to fly from both airlines because of a clause in the law(s) governing operations from Love Field Airport.
It disappoints me because Airtran was my “Southwest Alternative” when it came to flying to destinations on the East Coast. It was faster and easier to fly Airtran via Atlanta to many of those destinations and it was just as inexpensive. Now, those flights will have to be on Southwest which is hamstrung with the Wright Amendment law(s).
I’ll also be disappointed to see Airtran’s business class go away. It was a great value to upgrade to and offered what was most important (to me) which was better seating. It’s not about the food or being addressed by my name or a mint, it’s about being more comfortable for what was a great price.
Over the past 3 years, we’ve seen a proliferation of WiFi on airlines throughout the United States. Some airlines such as Virgin America, Delta and Airtran have already installed it fleet wide and some are already working on fleetwide installations (Southwest). Others have installed it on a smaller sub-set of their fleets such as American Airlines, United Airlines and US Airways.
I like it. I’ve used it and even a few years later, I kind of marvel that I live in an age where we can have internet access on an aircraft for what is a pretty small fee. Remember the age of $3.00/min phone calls on airliners?
The question is, is it a viable revenue stream for airlines? It’s difficult to find out the “take” of revenue per flight but the percentages bandied about range from 5% to 10% so far and that is even on airlines who are offering it fleetwide. It costs about $100,000 to install the Aircell GoGo Inflight system on an aircraft. Reportedly even more for the Row44 kit that Southwest is deploying.
Remember when internet access began to pop up at hotels? The fees were, at times, almost outrageous at $30 / day and it was only found at the more “elite” hotels. Over time, that changed and now it’s more uncommon to find no internet access at your basic Motel 6. It’s prolific and, in most cases, free.
I think that is what is going to happen with airlines in the United States. I think we’ll one day see this service free or available for a fee so cheap ($1 to $2 per flight) that it will seem free. And that is why I think airlines such as American, United and US Airways remain somewhat hesitant to go with a fleetwide installation.
I believe they’ve seen the future and the future presents a kit of equipment on the aircraft that adds weight and generates, at most, $100 per flight. That isn’t a self sustaining model and it implies that airlines will one day have to sustain it with air fares. The very thing they’re working hard at de-bundling services from.
I do not think that WiFi is going away one day soon. To the contrary, this is just the kind of added value service a LCC can offer and competitively distinguish itself from legacy airlines.
The only kind of flights that I think WiFi has revenue potential on are long haul, overseas flights. Particularly those flights between the US east coast and Europe. Flights full of business people who work on those flights which are short enough to fly frequently but long enough to eat and also get something done as well as capture a nap.
Given the cost to install and maintain these systems, I cannot ultimately see airlines keeping this system in place to generate revenue that adds to profit. At most, the fees will pay for the initial installations and, perhaps, maintenance over time but this isn’t the holy grail for profits.
Evidently, there are rumours that British Airways may be giving the 747-8i a second (third?) look suddenly. The airline made orders for the A-380 and 777-300ERs instead a few years ago but now there is strong speculation that they are revisiting their fleet plans for the future.
At the time, the A-380 made sense and even today it still does to some degree. It’s a strong airliner and a proven earner now that we’ve seen several in a variety of fleets. But British Airways circumstances have changed and I think that might be what is driving these rumours.
British Airways has now “merged” with Iberia and they also have their trans-Atlantic partnership going on with American Airlines and other Oneworld partners as well as a strengthening partnership in Oneworld to the Far East and Australia. So why does the 747-8i make more sense?
Seats. The A-380 has an advantage *if* you can fill its seats. That’s a tougher prospect today. Even more difficult is the fact that the A-380 doesn’t offer a lot of flexibility on routes it can be deployed on. In fact, with the new Oneworld frequencies between JFK and London Heathrow, it doesn’t make sense.
At the same time, nor does the 777-300ER quite fill all the needs either. It is perfectly adequate for filling the role of older 747 routes but it isn’t quite up to the challenge of providing enough seats (in BA’s configuration anyway) one some of those routes where BA/IB/AA are partnering. The 747-8i offers enough seats and the promise of a high load factor that makes it potentially more cost efficient to fly.
It’s also a bit more flexibile on what airports it can fly to than the A-380 as well as the fact that it is just plain cheaper to buy and potentially cheaper to maintain. In the modern airline world, that’s real money to be saved.
Will they re-visit the idea of buying the 747-8i? I suspect they will at least take another long look at it internally and now is the right time. The 747-8i is quickly compiling hard data for airlines to look at and the airline will have some hard route data of its own in the near future. How seriously it will be considered is anyone’s guess.
Right now, BA is looking at operating the 787 soon, it has the 777-200ER, 777-300ER, 747-400 and orders for the A-380. That’s a lot of widebodies of varying types and styles. To add the 747-8i to the mix really, in my mind, requires thinning out that mix by one type.
So, yes, I wouldn’t be surprised if they took a long, hard look at it internally. I would, however, be surprised if there was an order in the next 12 to 18 months. Downright shocked, actually.
In the early 1960’s, two aircraft manufacturers made special performance versions of their initial aircraft models that ultimately were only sold to one airline each respectively.
One of those airliners was the DC-9-21, a special performance version of the -10 which combined the -10 fuselage with the -30 wings and engines. Scandinavian Air Systems (SAS) was the only buyer.
Question: What was the other aircraft and airline to receive this kind of special performance aircraft in the 1960’s?
