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

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

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

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Airbus has racked up over 780 firm orders for the A320NEO since announcing its availability and even I have to say that I’m quite surprised at how fast that happened.  It would appear that airlines vocalized a desire for a new aircraft and ordered the re-engine like it was the best thing to happen since the Concorde.

There is absolutely, positively, no question that Boeing needs to get back in the game ASAP.  Theoretically, they did with the American Airlines order but . . . both Boeing and all other airlines have largely been silent on the 737RE since that order.

I was certain that we would hear other airlines grumble about being kept out of the loop or shout with joy that they, too, wanted to order the aircraft.  Instead, we learn at Southwest Airlines’ earnings call that they were kept in the loop and . . .

Nothing.  They were kept in the loop and  they endorse the aircraft but no other talk of an order.

The 737RE doesn’t have board approval to offer . . . yet .  However, in this particular case this really is a formality.  The lack of any other orders even getting mentioned as rumours tells us just how fast the AA deal was put together.  No one else is any farther along. 

I repeat, Boeing really needs to get back into the game.  Numbers are perception and Boeing knows how well it did when it was running up the 787 numbers in the early days.  Perception is as important as facts when it comes to whether or not an airline views your aircraft as leading edge.

Right now, we don’t even know what the 737-RE will be called and that’s kind of bad.

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The Allied Pilots Association, union of pilots with American Airlines, has never been very well organized but now they’re out to give USAPA (US Airways Allied Pilots Association) a run for their money in the stupid department.

Chairmen of certain bases in the North East and who are on the APA board of directors went rogue by writing and then sharing email that heavily criticized ALPA and ALPA’s providing services to APA in the negotiations with American Airlines.  The short version is that ALPA decides to pick up its toys and go home by terminating its services to APA after the email was circulated, commented on and not refuted by anyone at APA except the APA President and his team.  If you want the full details, read THIS and THIS  entry from the Dallas Morning News Aviation Blog.

I do not blame ALPA and its leader, Lee Moak, one tiny bit.  No good deed goes unpunished when dealing with APA and ALPA was merely the latest victim.  Why engage when the organization your servicing has a board populated by people who all think they’re in charge and they’re vision of leadership is the right one?  It’s a no win situation.

This is highly representative of the behaviour that APA President David Bates has tried to abate.  It was his promise when campaigning for the job that dysfunctional behaviour would be addressed.  Bates & his team have actually worked hard at this and everyone agrees that negotiations between APA and American Airlines were finally moving along productively.

Now APA is faced with having to regroup and find someone else to negotiate on their behalf and has to prove to American Airlines and the National Mediation Board that it can manage itself.  Right now, I don’t think they can do that.  So these rogue base leaders have shot themselves in the foot . . . again.

Which is why I now compare them to USAPA.  The self harm being done in both organizations is astounding.

Ironically, ALPA has some of the best leadership going for itself these days and Lee Moak is the guy who understands the issues that unions face with today’s airlines.  APA, under its current structure, will never get what it wants because it resembles a farce and nothing more. 

The very best thing that could happen is for the silent majority to start reorganizing pilots to be under ALPA and rid themselves of the non-leadership that APA provides.  Call it a coup.  Trying to work with rogue base chiefs is never going to yield success.

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Let’s summarize where Republic Airways is today with its strategy of purchases over the past few years,.

1)  Bought Midwest Airlines and traded away its mainline aircraft for E-170 and E-190 aircraft.

2) Bought Frontier Airlines, chased away the CEO making that enterprise cash positive.

3) Merged brands and used a mish-mash of aircraft to provide service in both Denver and Milwaukee focus cities causing confusion among consumers.

4) Unable to get Frontier to earn money and now is seeing it as such a drag on Republic earnings that they’re making deals with labor where they trade equity for labor savings.

I’m not against Bryan Bedford (CEO of Republic Airways) or even against Republic Airways itself.  Not in general.  However, I cannot see what it got for its money by buying Midwest Airlines and I don’t believe anyone else saw the value there either.  He didn’t turn it around and it didn’t provide a very good footprint in Milwaukee that made competing against Airtran and Southwest very viable.  The truth is, Midwest should have gone to Airtran.  On the other hand, did Airtran dodge a bullet?

I do think that Frontier’s success was based upon its people and, more specifically, Sean Menke.  I do not think that Republic understood that substituting available aircraft in for Frontier branded and operated aircraft for a hodge podge of flights was a *bad* idea.  Brand is everything in an airline.

Brand stands for what, exactly, the consumer can expect when he/she buys a ticket on them.  The lack of consistency and lack of focused marketing and the lack of a coherent route plan has made it possible for Southwest Airlines to start taking away market share in Denver.  Even United may be benefitting. 

There was a reason why SWA wanted Frontier.   Frontier (pre Republic) was the airline that SWA couldn’t seem to knock down.  SWA thrived in Denver at United’s expense rather than Republic’s.  The airline that can fight off SWA is one that SWA is interested in.  SWA knew that Frontier’s model was working and working well despite hard competition from SWA.

Rather than identifying the value that Frontier had in its operating model, Republic just did what they wanted and lacking the knowledge of how to operate a mainline branded airline, they made some real amateur moves.  This is where we learn that just because you can operate a regional airline working contracts for legacy airlines successfully doesn’t mean you know *anything* about running a mainline airline itself.

But to Bedford & Co’s credit, they are trying to solve problems well in advance of when those problems become almost unsolvable.  At least cost wise and those guys know how to manage costs, I think.

Yet, there is something missing and that is coherent, focused brand leadership in the form of a relatively independent president of the company.  It won’t be Sean Menke but you can find talent elsewhere.  There are plenty of airlines who’ve got people who do understand what’s needed. 

I think ego, however, will preclude that happening and we’ll see Frontier sold off to another airline eventually.  My guess?  Jetblue.

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Right on the heels of Southwest terminating flights between Spokane and Seattle (due to low loads), Alaska Airlines / Horizon has announced that it will be filling that gap with Horizon flights.   Alaska already services that route but they are offering more flights and should be doing so with its Bombardier Q400 fleet which is ideally suited to that route and which will provide just as quick service but costing the airline far less than it costs Southwest to operate 737s.

This is why I believe that Southwest has to start looking at aircraft that can operate such fleets with less cost.  The 717 can’t offer the cost savings that a right size regional jet and/or Q400 can.  And, frankly, I think the Q400 could be operated *very* effectively by Southwest in its smaller markets. 

While Southwest says it doesn’t operate hubs (and it really doesn’t), it does operate focus cities that would benefit greatly with feed.  For example, imagine Wichita, KS flights to Kansas City, Oklahoma City, Tulsa and Denver.  Or flights from places such as Boise, Spokane, Salem or Salt Lake city to Portland and/or Seattle.

There are plenty of places where those aircraft could operate not only very efficiently but at no loss of schedule time either.  Think flights into focus cities such as Dallas, Houston, Chicago, Denver, Seattle, Phoenix, Atlanta, Baltimore, and several cities in Florida.

If Southwest is prepared to be a multi-type fleet, then the Q400 and Embraer E-170 series have something to offer them.

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Airtran has been serving Williamsburg / Newport News  Virginia for many years now.  Originally with regional jet aircraft and later with Boeing 717s and fairly successully.  The airport is an excellent alternative to Norfolk, VA’s airport which is difficult at best to access when you’re across the bay. 

It’s a personal hit as I’ve used the flights to go to Williamsburg, VA to visit my own family there.  The airport is easy to access and just 20 minutes from Williamsburg vs 1.25 hours from Richmond and .75 to 1 hour from Norfolk. 

Airtran says it is economics.  I find that just a touch too hard to believe since Airtran had a total of 7 flights to the airport.  I think this has to do with it being competitive with Southwest Airlines’ service into Norfolk (ORF) airport.  Left alone, SWA would end up with flights to Norfolk, Newport News and, potentially Richmond (served by Airtran presently.)

If you had to keep one airport, you’d want to keep Norfolk since it better serves a massive amount of business travel into and out of the city.  Look for more route rationalization going on with Airtran as time passes.  Particularly in the fall and winter.

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A United Airlines flight from Washington, D.C. to Cancun had to divert to Havana, Cuba yesterday after pilots smelled a strong electrical odor in the cockpit. 

How often does that happen?  No one is sure it ever has with a US airliner.  US and Cuba don’t have formal diplomatic relations but the air agencies of each do cooperate as a matter of course.  (Cubana flights overfly the United States, for instance.) 

United Airlines sent another aircraft to accomodate the passengers since you can’t exactly book people on the next Cubana flight out to Mexico.  What’s happened with the first airliner hasn’t exactly been revealed but I would guess that mechanics were sent and the aircraft ferried to the nearest base possible. 

Was it legal?  Sure.  Captains have the discretion to make such decisions and I’m sure this one wasn’t taken lightly.

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Air India’s inability to meet its minimum entrance criteria set by its contract to enter the Star Alliance means that the two parties have mutually agreed to “suspend” the integration of Air India.

Or have they?  One person speaking for Air India says Air India received notice from a Star Alliance project manager that all the minimum critieria had been met. 

Some say that this is about politics and, specifically, about India protecting the market share of Air India by being very cautious (to use the politically correct saying) in granting traffic rights into and through India.   It’s no surprise as many airlines have indicated a desire to fly more to India.  In addition, no airline with the A380 has yet been able to fly to India with it because airport authorities say the airports aren’t ready (while airport managers scratch their heads and say “Yes, we’re ready.”) 

Air India is owned by the Indian government and entry into the Star Alliance was a part of its plan to have Air India stand on its own and, eventually, become a private airline.  This hurts Air India far more than India’s refusal to grant flights into its country hurts other airlines.

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