I’ve been on vacation for the last week and a half but now I’m back and there are many things I want to comment on.   Instead of one subject, here are a few quick observations on recent airline news.

Mexicana:  Blaming labor is probably appropriate in some respects but this is an airline with other problems as well.  And let’s not forget that management allowed those salaries to climb as high as they did.  If the numbers being cited in media are anywhere near correct, salaries are outrageous and would have been ultimately untenable 8 years ago or more.  Is there a solution?  Only if labor unions are willing to negotiate new contracts that are probably 40 to 50 percent less than existing ones and only if another company is willing to come in and buy the airline.  Dubious on both points.

Frontier:  I see that Frontier Airlines is moving their Houston operations to Hobby Airport and this is probably smart.  They’ve already seen that they can compete with Southwest and it makes them more convenient for the HOU/DEN business traveler who is primarily concerned with oil.  It also makes me think of the current Love Field plan and just how restrictive it is for another airline to enter that market.  Dallas has hurt itself on that one but the hurt will only be realized in another 4 years.

JAL and American Airlines:  The Dallas Morning News Airline Biz Blog is reporting that JAL has sent 100 of its managers to American to learn, well, management.  AA is encouraging JAL to use the financial analysis systems that it uses and which were instrumental in weathering the financial storm.  While I agree that AA was more agile than many when it came to weathering that storm, they’re also somewhat boxed into a corner now too.  Delta would have taught them to suck it up, take the hit and get on with life instead of prolonging the status quo.

American Eagle:  There is now more talk of “spinning off” American Eagle from AMR and while that would put some money into AMR’s pockets (quite a bit, I suspect), it leaves both airlines with not a lot going for it.  American Eagle goes independent and has to fight for its contracts in a world of regional airlines that are becoming increasingly competitive with equipment that is largely dated and inefficient and a labor force that is pretty well paid compared to most.  American Airlines then has to find new partners (potentially) with lower costs but also with equipment to match existing scope clauses and the ability to work the American Way.  Keep American Eagle, it fits, it works and you don’t need that trouble right now.

Delays:  Here we are in August and, still, no real problems with tarmac delays.  Airlines seem to be able to restrain themselves and keep their ops going just fine.  Remember, the real problem occurs when customers start complaining about cancellations and that makes it news.  Right now, all seems to be going OK.  Let’s see how the Q3 financial numbers turn out too.

Filed under: Airline News by ajax