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February 4, 2013 on 1:00 am | In Airline Service, Mergers and Bankruptcy | No Comments
There are a couple of very striking things I notice about the world’s powerhouse airlines and particularly those who are not only surviving but thriving: They are heavily engaged in building global networks and constantly tweaking their domestic and/or regional networks to support these global networks.
Witness these airlines: Delta Airlines (who is arguably doing it better than anyone else at present), Emirates, British Airways, Air France | KLM, Lufthansa.
These airlines in one form or another have acknowledged that change in their regional networks is a constant process and that reaching around the globe is necessary.
What the US Airways / AA merger won’t have is a truly global network.
American Airlines has relied upon its Oneworld partners to provide this to them and that has reflected poorly on American Airlines. Domestically, it makes them appear to *need* these partners rather than being the case of providing a seemless service product around the globe. The only routes in which AA works on itself are to Europe and those routes involving the UK have been half maintained by British Airways still.
Consider that British Airways supplies almost half the seats between DFW and London Heathrow and this is on a route to and from AA’s most valuable hub. Chicago to London sees British Airways supply more than half the seats. In the New York to London market, British Airways supplies 7 of the 12 flights and even a greater proportion of the seats.
On the Pacific routes that AA does have, the partnerships of flights and capacity with Oneworld partners is a bit more equitable. Partners do about half of the capacity from my look into things. But it is notable that it took QANTAS to put a 747-400ER on a route between Dallas and Australia and that it is QANTAS who is enjoying that revenue far more than American Airlines is.
AA has some good core strength to Europe and South America. US Airways has the same strengths. There will be consolidation in this area. Expect New York, Philadelphia and Miami to be the gateway cities in this merger.
Expect Charlotte, NC to be downgraded to a domestic hub. Charlotte’s few European routes will transfer to Philadelphia and/or New York and/or Miami. Charlotte’s Caribbean and South American flights will transfer to Miami (and rightly so) and a some to DFW.
Expect Los Angeles to be the West Coast gateway city and Phoenix will be downgraded to a domestic hub with passengers route to Dallas for flights over the Atlantic and to Los Angeles for Pacific flights.
But that is what I expect them to do with the resources they have today. What they will also need to do is build core strength to new destinations with aircraft freed up from consolidation. USAmerican Airlines will need to deploy more strength to Asia and it should strongly consider operating flights to the Middle East and Africa. They will even have an opportunity to perhaps explore South Africa as an opportunity through its South American flights.
And whoever gets the 787 first, QANTAS or USAmerican, direct routes to Sydney and Melbourne need to be established from DFW. There should be multiple frequencies here.
Make no mistake, I do think Parker & Company is the right management team but they need to find a risk taker on the AA side to do strong business development in the above named areas. This is a weakness on both sides but much more so among the US Airways team. If the entrepreneurial spirit for this business development does not exist on either team, they need to hire it as soon as possible. I would hire a senior level executive from a multi-national airline as fast as possible and give him or her a budget of resources and money significant enough to build a strong revenue stream from these weak spots.
And I wouldn’t wait to do it. The longer USAmerican waits to address these core foreign route weaknesses, the more Delta will capitalize on them and the more chance there is that United will regain momentum.
Consolidate these foreign strengths quickly and immediately go to work on route development to destinations outside my core strengths. I would also stop relying upon Oneworld partners to give me circuitous and service unequal routes to these places.
Filed under: Airline Service, Mergers and Bankruptcy by ajax
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February 3, 2013 on 1:00 am | In Trivia | No Comments
February 2, 2013 on 1:00 am | In Mergers and Bankruptcy | No Comments
When US Airways and American Airlines merge, there will be a great deal of talk about synergies and how they are complementary. And if it isn’t about that, it will be people talking about how they aren’t complementary and that this is a shotgun wedding. Everyone will be critic and that includes me.
So I’m going to do it now.
I have actually liked the idea of an AA / US Airways merger for a while. I do see US Airways bolstering AA’s domestic network in certain areas. What I never liked was the idea of an AA executive running the show because the first thing that would be done is a shutdown Phoenix and probably Charlotte, NC, too. That’s what American Airlines executives do when they merge an airline.
Many will see Phoenix get drawn down into insignificance in this merger because of AA’s focus on Los Angeles. I disagree. I think you’ll see a distribution of flights and the network between the two cities. I think Los Angeles will be used for a West Coast gateway to the Pacific and Asia but I think Phoenix will continue to be used to focus domestic connecting traffic in the Western United States. It’s a more practical hub to use for that. Los Angeles and particularly LAX is not the airport to use for that kind of thing. You use LAX to connect traffic in California and to foreign destinations. You don’t use it to connect traffic to Tuscon. Bottom line: I think both remain hubs.
Dallas and Chicago stay right where they are. They probably add some flights but nothing really changes in a big way.
Charlotte, North Carolina stays. It fits much better into the Southeast United States as a connecting hub than Miami. Miami is a miserable place to connect to anything but the Caribbean & South America. Charlotte is a great place to connect to cities all over the Southeast and will help AA bracket both Delta and Southwest Airlines in that area.
Philadelphia will remain a hub and may see more traffic connecting there for foreign destinations. New York is a miserable place to connect for anything including foreign destinations. Philadelphia will remain a strong domestic city and we may well see some expansion of flights to and from this city from AA strongholds.
New York City remains much as it is with some increased network feed to AA flights to Europe and foreign destinations. The new airline isn’t going to cede ground even more in this city and it has an obligation to work to feed its Oneworld partners there.
Miami is named as an AA hub. It’s really more a gateway city just like LAX and New York City are. Miami will neither increase nor decrease in importance. I expect more domestic feed to Miami to connect to foreign destinations but that’s it.
There isn’t really much route overlap between the two airlines. There isn’t much consolidation to see from this merger. This will be about redistributing resources to maximize revenue opportunities and domestic routes will get shifted around and replanned around new opportunities.
Filed under: Mergers and Bankruptcy by ajax
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February 1, 2013 on 9:24 am | In Airline News | No Comments
AA 777 Livery
Terry Maxon at the Airline Biz Blog of the Dallas Morning News has photos of the new 777-300ER in the new livery colors introduced by American a couple of weeks ago. It isn’t quite as jarring as that of the 737-800 we’ve already seen. That said, I still think it’s a very ugly tail and in conflict with the logo now in use. I still like the silver and I still think the stylized eagle implies a star more than an eagle.
Alaska Airlines
Alaska Airlines had a captain faint while in the cockpit on a flight over Oregon. The first officer declared an emergency and landed the aircraft on a priority basis in Portland. Another captain ferried to Portland and flew the flight the rest of the way. The captain who fainted was an industry veteran with a current medical certificate. He gained consciousness in the cockpit and removed himself from the cockpit to the back of the plane where he was tended to by an onboard doctor. The only real problem here is if Michael O’Leary of Ryanair gets wind of a 737-800 being landed by a single pilot.
All Nippon Airlines
All Nippon Airlines (ANA) says that its losses due to the 787 grounding are now up to just over $15million. Once the final effect of the grounding is known, ANA (and other airlines) will likely enter into discussions with Boeing over compensation for their losses. No doubt Boeing will see this an opportunity to book more orders for aircraft.
Filed under: Airline News by ajax
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January 31, 2013 on 4:46 pm | In Airline News, Mergers and Bankruptcy | No Comments
Short version: Non-disclosure agreements keep getting extended for more talks. Conventional wisdom has it that most issues have a solution framework and that there are perhaps one or two sticking points.
First, who owns how much of the new entity. The word on the street has the offer amounting to 70% of the entity being owned by AA creditors and 30% being held by US Airways shareholders. Part of me says this is a touch inequitable but it might be palatable enough for US Airways shareholders to do the deal.
Second: Who runs the show. Doug Parker would seem to have the inside track based on his performance at US Airways but apparently Tom Horton (and possibly others) are making an argument for Tom Horton to be Chairman and CEO or, at the least, Chairman, of the new company. This argument is based on the fact that Horton & Company have run a large international airline before and . . . Parker & Company has not.
Financial analysts see the consensus that this is not what should happen. The key risks there are that Tom Horton has no employee support and particularly none from unions and lacks a certain credibility with this plan to grow capacity as much as 20% in saturated markets. I’ll go one further: Horton and his team have never focused on the revenue side of the business. It’s always been about managing money and assets as opposed to growing the business.
Parker & Company have a strong reputation for returning value to shareholders, managing their operations closely and responding to problems with solutions that work. Moreover, Parker & Company haven’t exactly been managing some 20 airplane LCC carrier either. US Airways may not be quite the size of AA but it’s no small entity. It’s the 10th largest airline in the world by fleet size (AA is 6th). In Revenue passenger miles, US Airways is 11th and AA is 2nd.
US Airways does fly a number of international routes. They just don’t fly to quite as many destinations or with as much frequency. It’s not like Doug Parker doesn’t know how to establish a route to a South American city. His team established a route from Charlotte, NC to Rio de Janeiro, Brazil and made it work. That’s saying something and I want to see what they can do with AA resources.
I also think that the Horton Team just might have overplayed their hand recently with these rapid fire introductions of branding, uniforms, aircraft liveries, etc. These acts were, in my opinion, designed to help bolster their argument that they should be in charge. Now I think they are starting to sound shrill and I think many who care (such as the unsecured creditors) aren’t impressed with this team putting the cart before the horse several times over the past 2 months.
At this point, I rate a merger probability as nearly certain. I think that the most that will be given to Tom Horton is a non-executive Chairman role (such as Glenn Tilton) set to expire after a few years. Maybe. If he stops futzing around. I think many very capable AA executives will be retained. I think some won’t be. The truth is that there is a rich garden of talent at AA that can be mined. There is a reason why Virgin Atlantic hired their next CEO from AA and why Virgin America got theirs from AA too.
I think we’ll hear the merger announcement sometime between now and February 15th. That’s a pure guess on my part based only my sense of timing and mood in this affair.
The only thing that could make me happier in that announcement would be the news that that awful livery will be stopped and redesigned immediately.
Filed under: Airline News, Mergers and Bankruptcy by ajax
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January 28, 2013 on 1:00 am | In Airline Fees | No Comments
Southwest Airlines CEO Gary Kelly made a statement in a TV interview where he said never say never when it comes to adding baggage fees at Southwest Airlines.
Before anyone over interprets: He also said that there are no plans to do so in 2013.
He also said that he believed that Southwest’s customers would tell SWA if it wanted that unbundled fee added and he is absolutely right. The customers will indicate to Southwest just how much of an unbundled carrier it wants it to be and that is as it should be.
It occurs to me that Southwest could soundly smack airlines such as Delta, American and United by lowering its fares and adding a baggage fee. I doubt the revenue picture would change much at all on a per passenger basis but the fundamentally lower fares would put real pressure on the SuperLegacy airlines (with or without their lower costs.) Why? Because those carriers have a unique disadvantage against Southwest with respect to costs: The SuperLegacy Airlines all incur the hub & spoke network costs that Southwest avoids. And while Southwest pays some of the highest labor rates in the industry now, they also get the highest productivity in the industry as well. That offsets those costs considerably.
Imagine you are American Airlines and Southwest lowers fares against you on the top 25 routes out of the DFW area and adds a baggage fee that is $5 cheaper than yours. If I’m the AA CEO, I reach for the Tums.
Filed under: Airline Fees by ajax
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January 27, 2013 on 1:00 am | In Trivia | No Comments
I found this video on Facebook (Braniff Flying Colors). I never knew it existed and it’s got some rare treats for airline enthusiasts. Some of the most unique views of Concorde in flight, for instance. And you’ve heard about Harding Lawrence but in this film you get to *hear* Harding Lawrence. I had forgotten what he sounded like.
The owner doesn’t support embedding the video so here it is:
Braniff Concorde
Filed under: Trivia by ajax
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January 26, 2013 on 1:00 am | In Mergers and Bankruptcy | No Comments
American Airlines announced yesterday that they will be developing new uniforms for its service staff. Pilots, flight attendants, customer service agents and others will be given a new look and AA has engaged the designers Ken Kaufman and Isaac Franco to do the work.
This isn’t about the need to urgently rebrand the airline. This is about AA attempting to create a story to send their message to the unsecured creditors that everything will be OK if they permit a stand alone bankruptcy exit. AA and its executive team has been working frantically from a PR point of view to send this message and particularly so this month.
The problem is that it is becoming rather shrill. Yet, they manage to do this while choking off US Airways with a non-disclosure agreement. That NDA doesn’t prevent US Airways speaking privately though.
What bothers me is how they’re working so hard to stay on script and timing without paying attention to feedback. For instance, the overwhelming poor feedback on their livery would, in my opinion, ordinarily ask for a pause in the efforts.
But that’s the problem with the current team: They are extremely deaf to critical feedback and particularly so when it comes to external sources and even external stakeholders. If I’m a member of the UCC, I’m going to be annoyed with the persistence being shown here without regard to putting first things first.
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January 25, 2013 on 1:00 am | In Airline News, Mergers and Bankruptcy | No Comments
United Airlines has posted a $620million loss for the 4th quarter and a 2012 loss of $723 million and that, my friends, isn’t trivial. Conventional wisdom has it that this is the cost of a poor integration. I think the integration has gone poorly and has impacted the company but I think the poor integration is an indicator of something else.
This management team isn’t working very well together.
We are at the point where United should be seeing its operations mesh together nicely and, instead, we’re seeing ever greater impacts from the merger on the bottom line. Good, strong management working together makes this airline work better, not worse. It’s notable that the combined operation earned $840 million in profit for 2011 when it really wasn’t integrated. In one year, there is a direction change equivalent of 180 degrees.
This is a management problem. Various management groups are executing the integration of their parts without regard to whether or not other parts are ready for that integration. This is the source of their reservations integration. It was pushed forward despite other parties not being ready so that a box could be checked on integration progress.
At some point, this becomes intolerable to external stakeholders. In the meantime, I would hope that leadership calls a halt to integration efforts and executes a 360 degree review of each department and what its progress has been to date and what each expect to accomplish before allowing anyone to move forward any further. In that process, I would hope that managers who are executing without coordination are replaced with managers who understand that this is a dance party that needs to work together rather than just a group of individuals seeking an ultimate payout as reward for checking the box.
Jeff Smisek described the integration being particularly tough in 2012 but also declared that things were back on track. My problem with that is that just because you say it, doesn’t make it so. Time will tell but, for the moment, a huge 4th quarter loss contrasted against other airlines who’ve had great years doesn’t signal that things are “back on track.”
Filed under: Airline News, Mergers and Bankruptcy by ajax
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January 24, 2013 on 8:19 am | In Airline Fleets, Airline News, Mergers and Bankruptcy | No Comments
American Airlines has inked a deal with Republic Airways to flying under the American Eagle brand. Republic will operate 53 Embraer E-175 jets with 12 first class seats and 64 coach seats. The contract will last 12 years from the time the aircraft are put into service and the full complement won’t be in service until 2015.
If I were American Eagle or an employee of American Eagle, this would worry me.
It’s clear that no matter who runs AA in the future, contracting out American Eagle services will only increase, not decrease. In addition, it will likely go to regional airlines that either have the equipment today or the orders for the equipment already in place.
American Eagle has neither. It’s fleet is primarily comprised of the ERJ-135/140/145 aircraft although they do have 47 Bombardier CRJ-700 aircraft. If the team at American Eagle wasn’t getting ready for a new world order, they should be doing so as of this morning.
Filed under: Airline Fleets, Airline News, Mergers and Bankruptcy by ajax
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January 23, 2013 on 12:02 pm | In Airline News, Mergers and Bankruptcy | No Comments
While reporting and commenting on both 4th Qtr and 2012 earnings, US Airways CEO Doug Parker emphatically stated that they (US Airways) had nothing to say about a merger with American Airlines at this time since they continue to operate under a non-disclosure agreement. All of this is right and proper and I must say that I have been impressed that all parties seem to be honoring this pretty well with the exception of AA CEO Tom Horton who continues to say a lot without saying it by making passive-aggressive comments at each public event.
But Doug Parker and his team haven’t had to say much vocally because their performance, once again, continues to make the argument for them.
$37 million profit in the 4th Qtr despite Hurricane Sandy impacts and this contrasts with Delta announcing just $7 million. Revenue growth of 3.9 percent in 4Q as well.
A 2012 profit of $637 million on record profits of $13.8 billion. Again, this contrasts with a profit of $71 million for 2011.
These guys are killing it and they know it and this has to be getting the attention of creditors and other bankruptcy stakeholders.
Filed under: Airline News, Mergers and Bankruptcy by ajax
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January 22, 2013 on 1:00 am | In Airline News, Mergers and Bankruptcy | No Comments
I think it kind of got missed that the CWA union election for passenger service agents did not succeed for the union. About 6000 agents voted (out of approximately 7800 agents total) and the election did not pass by about 150 votes.
Did AA win? Actually, I think not. These kinds of elections are very difficult for unions and unions have to show real value to people who need every bit of their paycheck to live on.
If the US Airways merger does happen, expect another election potentially. US Airways passenger service agents are represented jointly by two unions: The CWA and Teamsters.
This issue isn’t over, the first couple of chapters in this story have merely been completed so far.
Filed under: Airline News, Mergers and Bankruptcy by ajax
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January 21, 2013 on 1:00 am | In Airline Service | No Comments
Delta Airlines has announced changes to its frequent flier program that will make it vastly more revenue driven. Their intent is to get a minimum spend from a flier before granting status in the program.
There are others who can discuss the nuances of the changes. I want to talk about what is more of a fundamental change than I think most appreciate.
This is a statement by a major airline, the second such statement to be made, that says your status is going to be connected more strongly to how much you actually benefit us (the airline) on an annual basis.
Southwest Airlines did this with its new, much more complex points system in its own program. If you buy full fare tickets and fly long distances (which are presumably more expensive than short distances), you’re going to be awarded far more points.
Delta didn’t quite go this far but it is saying that it wants a minimum amount of revenue from a customer before it grants status in its program. It’s no longer about how many points you’ve earned, not entirely anyway. Points aren’t that hard to acquire (although I would argue that acquiring is silly in the first place in most cases) and airlines are granting upgrades and free tickets to many people who fly quite infrequently and at the lowest economy fare possible.
Not only do I think Delta will stick with this change, I think we’ll see other airlines edge towards similar changes over the next 2 to 3 years.
Why? Because our airlines have made a clear decision to ensure that they are earning the cost of their capital and they don’t want or need anyone bleeding them of freebies without some basic level of revenue being paid.
Filed under: Airline Service by ajax
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January 20, 2013 on 1:00 am | In Trivia | No Comments
This flight is operated by Loganair in Scotland between two small islands in the Orkneys. The flight is between Westray and Papa Westray islands and apparently if the winds are right it could be done in as little as 50 seconds. Take a look:
[youtube http://www.youtube.com/watch?v=fwyVWaCAD2A&version=3&hl=en_US&rel=0]
I’ll bet you hope I don’t play a video of the world’s longest flight in its entirety.
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January 19, 2013 on 12:10 pm | In Airline Fleets, Mergers and Bankruptcy | 1 Comment
Terry Maxon at the Dallas Morning News made a post about Mike Boyd responding to American Airlines’ rebranding and livery change. The short version is that Boyd was scathing in his criticism of American Airlines management for doing this now.
And it mirrors some of my own feelings posted earlier today.
If one considers the priorities just prior to and during bankruptcy, rebranding efforts should have been suspended upon entering into bankruptcy. I assure you millions of dollars were spent on it leading up to the unveiling of the new livery.
I do think AA needed rebranding ultimately but whether it got done today or a year from now wasn’t really important. Delivering a great customer service product is the priority right now.
Filed under: Airline Fleets, Mergers and Bankruptcy by ajax
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January 19, 2013 on 1:00 am | In Airline Fleets, Mergers and Bankruptcy | 3 Comments
So, it’s been a couple of days now and I’ve had time to reflect more and time to look at the new AA logo and livery again with fresh eyes. Here are my final thoughts:
1) I think they *nailed* it with the silver paint for the fuselage.
2) I think the “blade” aka the stylized aircraft tail next to the name is growing on me some but I still think what is supposed to represent an eagle’s head actually implies a star more. It’s a touch too stylized, in my opinion. That said, it’s OK and I think that it is strong enough to be associated with the name going forward. As people see it, they’ll tag it as AA.
3) Hate the tail more than I did yesterday. I simply think it is way too generic and has no connection to the history or branding of American Airlines.
4) As much as I think the billboard title on the fuselage was absolutely the right way to go . . . I just don’t think it stands out enough against the silver fuselage. It needs a different color, I think.
It’s interesting to me that when asked if this branding would be redone in the event of a merger, Tom Horton said he didn’t think so. Well, I think it would be. I think you would see the silver paint retained. I think it’s possible the logo would be retained in some form. But I think there are two things you would see the US Airways crew change immediately.
The tail of the aircraft would be cleaned up considerably. The billboard “American” title on the fuselage would be made bolder. And the fact that Tom Horton’s good friend Doug Parker hasn’t paid a public compliment to AA over the re-branding kind of indicates that they are, at best, lukewarm to the concept. US Airways did issue this statment:
“We applaud our friends at American as the new brand elements and livery mark the culmination of a significant amount of work and coordination, and clearly those efforts have produced a compelling result.”
Make of that what you will.
Does AA need a new brand? Yes. Did it need one *today*? Nope. There were interim solutions that could have been employed. Does this new brand move them forward? Logo wise, yes, I think they’re there mostly. Does the livery do anything for them? No, I think if you parked that aircraft at a major european hub it would be lost in a sea of Euro Styling and particularly with those colors. Heck, I kind of wonder how it would stand out taxiing through Atlanta’s airport. I see a livery done by committee rather than a leader and its notable that they say this has been in the works for 2 years.
To misquote a certain financial analyst at JP Morgan Chase: “Really Tom? Is this all you’ve got?”
Filed under: Airline Fleets, Mergers and Bankruptcy by ajax
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January 18, 2013 on 1:00 am | In Aircraft Development, Airline Fleets, Airline News | No Comments
With the temporary grounding of the 787 and the program review kicking off on the design and certification of this airliner, there is more and more fear of it. I agree that the battery failure looks horrific. Some (Christine Negroni is sounding particularly shrill to me.) are derailing into what, to me, seems like hysteria, over the battery failure in Boston.
The battery issue in Japan was not a fire. It was found to be “swollen” and that it had leaked electrolyte. An important issue but not a fire.
Facts are important in this situation and there is one hell of a lot of speculation going on. So let me join in:
I find it very curious that these problems have cropped up suddenly and, so far, on one airline’s aircraft. I keep wondering if there is something being done incorrectly in the operation of the airliner to cause this problem. I would have expected more failures to occur at this point than what has occurred it was a fundamental flaw in the design.
It’s possible the quality assurance for the battery manufacturing is not very good. It’s possible that the battery design itself is flawed. It’s possible that the pilots are operating the aircraft in a manner that is overheating these batteries because of an unanticipated design issue. It could be a battery protection circuit issue or a design flaw in that circuit.
We’ll get the answers. The problem will be solved in one way or another.
I even think the comparisons to the DC-10 and AA Flight 191 are a bit amusing in one respect: Flight 191 happened because someone was performing an unapproved procedure to maintain an engine. In other words, the aircraft was being handled incorrectly during maintenance.
But to run around shrieking “Danger! Danger!” is really kind of foolish. Wait for facts, then make judgements.
Filed under: Aircraft Development, Airline Fleets, Airline News by ajax
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January 17, 2013 on 9:15 am | In Airline Fleets | 3 Comments
Update 04: Best funny comment I’ve seen so far is: “So, I see AirFrance and Pepsi had a Cubana love child??” Seen on Airliners.net.
Update 03: I am amused. I’ve seen it suggested on Terry Maxon’s blog that the livery is inspired by Greyhound (which gave me a good laugh but no doubt really isn’t true.) On a third pass over the livery, now I’m feeling like it was designed for the United States Postal Service. What I’m not getting is any strong connection to the history of American Airlines. It didn’t inspire me forward and it didn’t connect me to all that is positive about AA’s history.
Update 02: So far, I am not seeing much in the way of positive response to this livery. I expected quite a few people to immediately dismiss it but I also thought I’d see some people speak out for it. Not yet.
Update 01: It would be very easy to see the US Airways logo embodied in that tail design, I think. What I’m referencing is the bar representation. I suspect Doug Parker would be OK with it mostly.
I also think that the billboard title is less obvious than it could be against that fuselage.
I’m still digesting it, however.
Here it is. A screenshot of their new livery captured from American Airlines’ website.

I think this new livery is going to spark a lot of controversy. My own thoughts: My first reaction to the tail wasn’t good but it’s already growing on me. I don’t like the highly stylized “aircraft tail” symbol in front of the billboard titles for American. For some reason, it reminds me of Lan Chile. I also don’t like how they’ve extended the red bars of the tail down below the horizontal stabilizer.
My first reaction is to give this a B or B+. I feel like I’ve seen better created by amateurs online. But let’s digest this one first before going all Pulp Fiction on it. I actually liked THIS and THIS one more.
Filed under: Airline Fleets by ajax
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January 17, 2013 on 9:00 am | In Airline Fleets | No Comments
There is now news chatter that AA is unveiling their new livery at DFW airport this morning at 9:00am. More as it shows up.
Reportedly it will be on a nearly new 737-800 done in Victorville, CA.
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January 17, 2013 on 1:00 am | In Trivia | No Comments
Tim Clark, CEO of Emirates, has made a variety of statements regarding the airline industry and the world as a whole to Gulf Business.
Clark sees another steep escalation of oil prices as being disastrous for the airline industry as a whole (I agree) and even for the world. He blames world speculation in oil as being the source of the problem and calls it greed.
I think speculation in oil has raised the prices significantly. What’s worse, that rise in cost is not well reflected in inflation values for both the United States as well as other nations. Inflation calculations don’t consider the rise in the cost of fuel for our cars.
But I’m not sure that I blame speculators entirely either. The truth is that we’ve had sustained financial crisis of one kind or another since 2008. The US Dollar has devalued considerably as has the Euro as well. Oil is a dollar denominated commodity presently. There has been some desire to sell oil in Euros as well but that wouldn’t fix the problem one iota. The Euro is, if anything, less “sure” than the dollar whatever its present value.
The key to lower oil prices is fiscal and monetary policies that are consistent, stable and sustainable over the long term in the United States and other western nations. The markets are attracted to oil because it is a hedge against inflation presently. We think there is little to no inflation at work presently and that’s just not the case. In fact, we have quite a bit of inflation presently which isn’t accounted for.
It’s not so much greed on the part of speculators or oil companies as it is a result of sustained economic crisis. When we handle our crisis and have plans in place that are sustainable for the long term, things will improve.
Lest any reader think I’m advocating a political party here, I’m not. The truth is that I believe that our crisis is a result of both sides of the aisle attempting to have it all their way. I think our solutions are to be found in the exercise of compromise and I think both sides have done us a great disservice in fighting this out in public. The truth is that if I blame anyone, I blame Congress and, in particular, the House of Representatives for acting like a pack of middle school aged teenagers. I see similar behaviors in Europe and elsewhere.
We deserve exactly who we vote for and apparently we deserve obstinate ideologists who would rather shoot both feet off to save face with their electors.
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