A preview of my trip(s) on US Airways today:

Wow.

So far anyway.

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And who cares?

China is and its very own aircraft manufacturer, COMAC, says it is about to deliver the first ARJ-21 aircraft to customers.

I suspect the customers cringed at the idea of having to take delivery.

The ARJ-21, for those of you who don’t know, is China’s attempt at a regional jet.  To be fair, the aircraft has a lot of US content in it in the form of avionics from Honeywell and Rockwell Collins as well as a GE engine (the CF34 used by many regional jets and which is being replaced with Pratt & Whitney GTF engines by other regional jet manufacturers.)

Nominally, the aircraft is designed to compete in the 70 to 100 seat class also known as Embraer and Bombardier country.  It won’t.

The airliner, despite China’s protestations to the contrary, is a copy of the McDonnell Douglas MD-80 series aircraft that was assembled in China as the MD-90 for a brief while.  Admittedly, Chinese MD-90s are reportedly just as good as any other but they were also made from kits.  It even will share the 5-abreast seating the DC-9/MD-80 series had.

It does have some new bits:  the airliner got a new wing courtesy of Antonov and “fly by wire” courtesy of Honeywell.  But if you think the latest generation of intellectual property was given to China for this airliner, you would be wrong.

The only companies who have ordered this airliner are Chinese airlines, Chinese lessors, an Indonesian airline, a Myanmar airline and GECAS.  I’m betting GECAS ordered its token 5 to keep doing business in China.

I’m somewhat surprised that North Korea or Cuba or Iran hasn’t ordered one.

I’m pretty sure the Myanmar order is political as this airline (Myanma Airways) also recently made a much more real order with GECAS for 6 Boeing 737-800 and 4 Boeing 737-MAX8 aircraft.  It already is leasing the Embraer 190AR.  One suspects that China felt it needed some “international” orders and went out and strongarmed a couple.

The Indonesian airline, Merpati Nusantara Airlines, does operate a Chinese airliner.  It operates the AVIC MA-60 which is a kind of revised Antonov which kind of looks like an ATR-42 turbo-prop.  This airline also has some old 737 aircraft.  Given what we know about the state of airlines in Indonesia, I think we can assume that this airline has ordered what it did simply because it couldn’t get airliners from anyone else.

Still, the ARJ-21 is important if for only one reason:  It’s a very educational exercise for China who will use it to build the also inferior COMAC C919.  The so called Boeing/Airbus competitor that China is already late on as well.

China won’t build a competitive airliner in this decade.  It probably won’t build one in the next decade either.  You can bet that if they stick with it, they will be building a competitive airliner in the decade after that.  The one thing that the ARJ-21 does signal is that China is serious about figuring out how to capture that aviation market which is theirs and a piece of the global market as well.

Filed under: Aircraft Development by ajax
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In the airline industry, mergers are a mixed bag of successes and failures.   Continental Airlines, for instance, nearly died twice due to poorly executed mergers.  Northwest Airlines was impacted for years and years from its merger with Republic.

In more recent history, those mergers have been more successful such as US Airways (from America West and US Airways) and Delta (Delta and Northwest).  The jury remains out on Southwest and Airtran (although this is trending towards success) and US Airways and American Airlines.  Sadly, I think the trend on United is that it is failing as a merger.

Delta is the rock star of airline mergers and I think there two great reasons why.

First, Delta engaged in an airline merger that built a powerhouse network.  Delta and Northwest had hubs that were truly complementary and which brought together a strong domestic network and a strong international network.

That union of networks provided genuine revenue synergies that you rarely see in a merged airline.  The networks supported each other and built upon strengths and didn’t merely see capacity reduction on common routes.

The second reason Delta hit the right pace is financial.  This airline watched its capital costs and set financial targets for performance that, for the first time, included paying for the cost of capital at an airline.  Instead of buying all new aircraft, the airline has managed its fleet carefully using aircraft that had low capital costs but which also provided near competitive fuel efficiency.

The airline also managed its revenue appropriately by focusing on doing something that my own father was a vocal advocate for:  treating each city pair and route as a business that should be profitable.  Instead of asking that a sum of routes make some kind of profit, Delta expects its routes to ultimately become profitable or to be removed from its system.

The airline is no loner focused on being the biggest airline nor the airline with the greatest frequencies.  It’s focused on being the most profitable airline and managing to that goal by ensuring what it does brings a return on investment to the company.

And who embodies this same kind of approach?

Definitely Southwest although they continue to be on my watchlist.  Before anyone says it isn’t the same Southwest Airlines from 20 years ago, let me offer this:  I wouldn’t want it to be.

Southwest does watch its routes carefully still and does work hard to ensure it’s city pairs are profitable.  However, they are clearly going more network than ever before and I do wonder if the complexity is going to overwhelm their good senses.  Time will tell.

I think the American Airlines / US Airways merger has the potential to be more profitable than Delta in time.  And I think it will have one key advantage over Delta:  Better aircraft.

Delta is walking a very fine line on its fleet ages and will be in danger of getting into trouble from a fuel spike as a result.  American will have one of the newest, most fuel efficient fleets around and that will help mitigate against fuel spikes quite a bit.

United, I think, is a growing failure and the truth is that while I think this has a great deal to do with poor management, I also struggle to find a compelling argument for merger these days.  The synergies don’t seem to be there and I don’t see the two parts adding up to a sum greater as a whole.  The jury may still be out on this merger but the jury foreman is taking final votes and it’s not looking good presently.

Filed under: Mergers and Bankruptcy by ajax
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Both Airbus and Boeing have next generation updates to their single aisle products on track for delivery in the next few years.  The Airbus A320NEO is arguably the better seller over the 737MAX but both are succeeding well enough to continue sales for quite some time.

But who will blink first?

That is, who will build the next completely re-designed single aisle aircraft that will replace the Airbus A320NEO and Boeing 737MAX aircraft in the market?

In the greater scheme of things, I continue to believe that if Boeing had built a new 737 replacement, it would have ultimately won The Single Aisle Wars for a decade or more.  They would have sacrificed some sales today but . . . I think they would have cemented dominance in that market for years to come.

Sadly, that didn’t happen.

Airbus has been making the right calls lately and I think they’ve done a great job in estimating what the market wants as well as being willing to step forward and build what the market wants.  Boeing hasn’t shown much courage.

Yet, I think it will be Boeing who builds that next aircraft.  I think Airbus will focus on its A320NEO and I think their next project will be an A330NEO and they still have considerable work to finish on the A350 series aircraft.

Boeing has the 787-10 to complete which will be an unsatisfying derivative instead of a hit (it won’t have enough range/payload to really attract customers to it, in my opinion).  Nonetheless, the 787-10 will be pretty easy to bring to market.  They have the 737MAX to get done and that will be a low risk effort as well.  The 777-8/9 will also be a fairly low risk aircraft, too.

Boeing has all low risk programs with everything getting to market by 2020.   By 2020, Boeing will have realized that the 737MAX isn’t quite making it for the single aisle airlines.  To remain in business and truly engage with the airlines of the world, Boeing will have to commit to a new 737 replacement and it will have to push the envelope pretty far.

I believe that 737 replacement will start at about the 160 seat capacity (standard 2 class) and run up to 210 to 220 seat capacity.  I think all variants will have trans-continental range and I believe that at least the top two variants will have intercontinental range with ETOPS at introduction.

I do think there will be 3 variants but I also suspect many will speculate that there will be 4 variants.  My expectation will be:

Variant 1:  150 – 160 seats, 3600nm range

Variant 2:  180 – 190 seats, 4200nm range

Variant 3:  210-220 seats, 4200nm range

I think we’ll see a geared turbo fan a la Rolls Royce on the aircraft or a Pratt & Whitney engine.  What I don’t think we’ll see is a CFM engine.  The CFM design isn’t going to make the leap into the next generation.  It held up for the NEO and MAX but only barely.  The Pratt & Whitney is more likely the future.

What else will be different?  The fuselage will not be metal although it likely won’t be like the 787 either.  The wing will be much more efficient and the cockpit will be harmonious with the 787 and the 777-8/9.

What it won’t be is a 757.  As much as everyone hopes for another overpowered 757 to show up, it won’t be that.  Instead, it will be an aicraft uniquely designed to answer a question for 20 or more years.  It might look like a 757 but its design and requirements will make it entirely different.

But first someone has to blink.

Filed under: Aircraft Development by ajax
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About a week ago, I received a comment posted here on FlyingColors that was both rude and offensive.  That post came from a long time Braniff fan located here in Dallas.

Sadly, Brooke Watts isn’t a nice man.

I have found his website (The Braniff Pages) and associated Facebook page to contain a wide array biased comments on Braniff over the years with a vitriol marked for former Braniff CEO Harding Lawrence that borders on rabid.  Frankly, the things said about the Harding era are bizarre and don’t actually reflect many facts.  Hey, that’s my opinion and you’re free to ignore it.

But I don’t think that Brooke is one to really rely upon facts to support arguments.

The bias tends to change the story of the airline, particularly in the Harding years, but I’ve tended to maintain an attitude that it’s his website and his opinions and he’s free to shout them out as he wants.

I regret to inform all of you that Brooke doesn’t really extend the same courtesy to anyone. else.

That’s a shame because he does have quite the collection of items and he could be a great advocate for the airline’s history.

Instead, Brooke tends to threaten and abuse people and does it with such regularity that I cannot ignore it anymore.

About a year ago, Brooke decided that he would attempt to bully me away from a comment on his Facebook page by posting my name and address publicly and demanding to know if I was that person.  Only after he did this did I find out that he’s done it to others several times.   Unfortunately, Brooke has the habit of deleting anything that disagrees with him on his Facebook page.

Fortunately, I kept a screenshot of his bullying for posterity before he deleted it since I had noticed that he had that habit some time earlier.

Still, I tend to look at people acting like that and just leave it be.  After I replied firmly to Brooke suggesting he acted inappropriately in taking that action, he banned me from his Facebook page.

This had the effect of . . . nothing.

I’ve ignored Brooke since then and I’ve counseled a number of other people that he’s attacked both privately and publicly to do the same.  Specifically, I’ve suggested that there is no arguing with someone who spews hate and its best to leave it be.

I’ll admit that the cumulative effect of his actions has upset me at several points for he seems to have a flair for attacking people who actually have nothing to do with him.

And then his latest remark came in the form of a comment made to the FlyingColors blog.  Specifically, he wrote:

“Yes, and you have NO airline experience. You are a tool and an idiot.”

I approved the comment because I’ve generally had a policy of approving all comments that didn’t include blatantly foul language.  This one was borderline but it seemed more right to approve it than not.

I’ve let this be for a period of time because I wanted some clarity before responding, if I did at all.

I think the bullying and insults needs to stop, frankly.  So I’m making it public.  As many pointed out to me when I was growing up, how you act in public really is a direct reflection on upon yourself and what you stand for.

Brooke is free to comment all he wants on his forums.  He’s free to ban people from his websites and forums.  He can send private emails and insult anyone he wishes to.  Including me.  Brooke can shout and denigrate a wide variety of people from the Braniff era if he so wishes.

But I won’t tolerate someone like him being like a low-brow and a cretin.   So his comment gets published here and any other insults he cares to push onto my site will be published as well provided they meet the guideline that I don’t care to have intentionally foul language.  However, there is one caveat:

From here on out, I shall be giving them a place of prominence so that those associating with Brooke can see his behavior clearly.

And for those of you wondering if that could have been Brooke, the IP number of the person who made the post traces back to his home address which, coincidentally, I had available due to a purchase I made on Ebay.  So, it was Brooke, his wife or his dog, I would imagine.

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Virgin America appears to be the winner of the 2 gates at Love Field according to numerous reports in Dallas media.  There is no official city announcement to date but reporters are citing two unnamed sources in the City Manager’s office confirming this outcome.  Dallas media is rarely wrong with such sources.

It’s an acceptable outcome for Dallas.  It won’t really increase competition in this marketplace very much except on a few long haul routes out of Dallas but it will be quite interesting to see the effect Virgin America has on those routes as I think it will provide justification for pursuing even more competition in the marketplace.

When I’m asked who I would like to see get those gates, that’s a tough question.  Frankly, after much thought I’ve begun to think that Dallas might have actually been best served with common use and better served by Delta Airlines or American Airlines flying out of those gates.

Let me make an announcement:  There is room in the DFW marketplace for a shorthaul provider using the Q400 or ATR72 to serve markets in the Texas regional area out of DFW.  In my opinion, you could very well make a killing with this airline.

Particularly if you base out of DFW.

From DFW, you could serve:  Houston (2 airports), Austin, San Antonio, Corpus Christi, Brownsville-Harlingen, McAllen, Abilene, Laredo, Midland-Odessa, El Paso, Lubbock, Amarillo, Little Rock, Fayetteville, Tulsa, Oklahoma City, Shreveport, Memphis, and New Orleans.

You can string together low frequency cities for a better load factor and you can do high frequency turns at larger city airports.  And you could probably do a deal with some of the other airlines serving DFW to interconnect.

Your seat costs would be superior, your weather would be more than acceptable and your price would make your competition whimper.

In the meantime, let’s be glad the The Great Gate Fight is over (we hope) and see what comes next.

Filed under: Airline Service, Airports by ajax
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The City of Dallas promises a decision on the Love Field gates held by American Airlines at this time.  Their plan is to have a briefing on the LEK Consulting report, an executive session briefing by the City Attorney and then there will be an open discussion.

In my opinion, the City of Dallas is marching blindly towards major lawsuits from a number of parties.  The City Council has apparently chosen to believe that the sudden demand for these gates means they get to be the big players.

Careful what you ask for.  Airlines have vastly more powerful legal resources and the US Justice Department is never amused at amateur hour getting in the way of a Justice Department decision.

If Dallas chose to acknowledge the lease currently held by American Airlines and permit a reasonable sub-lease, it would be ironclad in its ability to withstand challenge.  Maintaining the status quo, so to speak was its safe and legally appropriate choice.

By choosing to dangle these gates around on the pretext of benefiting The Citizens, Dallas is opening itself up to at least 3 lawsuits by my count.  Lawsuits that will cost Dallas and find Dallas having to bow to a legal settlement that could well be far worse than the present proposed outcome by The Leaseholders (aka American Airlines).

Evidently Dallas has a lot of extra money laying around these days and doesn’t mind the costs to its citizens.  It has already spent $50,000 on consulting to expose itself to these (potential) lawsuits.

If the City of Dallas wishes to promote the welfare of its citizens in this airport, the City should publicly and strongly advocate for a (needed) expansion of Love Field with gates held for common use by all airlines (including Southwest) on a periodic auction basis (annual is best).  That’s what would best benefit the city and certainly that is a “best investment” for The Citizens.

Filed under: Airports, Mergers and Bankruptcy by ajax
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I honestly think it’s only a matter of time before the American Eagle spinoff, Envoy, is shut down.  Unable to get an agreement with the pilots, American Airlines has decided that Envoy will not receive new aircraft for new flying.

Instead, new aircraft will go to other regional airlines and Envoy now faces a 3 to 4 years dry season and a wind-down of the EMB-140 fleet.

In part, I do think that pilots wrongly played tough in their latest negotiations.  I think that getting an agreement that kept them in the game was a far smarter bet than to reject the agreement and find themselves in a business that has no prospects.

If I were a pilot at Envoy, I would move heaven and earth to get a job with a “major” and move on with life.  Only if I had retirement prospects over the next 2 to 3 years would I hang on.

The choices are slim out there.  Pilots cling to the idea that a pilot shortage will change things.

The so called pilot shortage has been spoken of for 10 years and never really has materialized.  Airlines have figured out how to deal with such shortages in ways that don’t count on pilots. I wouldn’t be betting on a shortage that has never materialized to date.  It’s possible that it will but betting on it only makes you look naive at this point.

I fully expect Envoy aka American Eagle will be shutdown in less than 4 years.  I do not think it has good prospects for a merger either.  They have nothing but a very senior pilot base that has shown intransigence towards the changes in the industry.  Why merge with that when you can just wait for the creature to die?

No, I think Envoy will join Comair (ex Delta) in a very undignified death.

Filed under: Airline Fleets, Airline History, Airline News, Mergers and Bankruptcy by ajax
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jetBlue hasn’t impressed me in a long, long time.  That’s a shame because this airline was quite literally the best funded, most successful start-up airline ever until the board panicked and asked David Neeleman to leave the leadership.

Neeleman has two qualities I really like when it comes to airlines.  He knows how to sport real opportunity and meet it with innovative solutions.  He also knows how to learn from mistakes.

Since his departure, jetBlue has worked on growing routes on some of the least profitable routes ever.  This airline has stuck to the northeast corridor and Florida like a bad stain on a white shirt.  There is no real growth and jetBlue let its relationship with American Airlines influence it’s strategies in ways that were laughable.

Laughable because American Airlines tossed aside that relationship instantly upon a change in the regime at AA.  There is no leadership at jetBlue, only stewardship.

With a still low cost workforce, an efficient fleet and an opportunity to draw upon the largest O&D markets in the world, it barely turned a profit.  Other airlines with far less advantages are doing dramatically better.

Without better leadership, I really don’t know where jetBlue goes.  I don’t even necessarily see added value in this airline when it comes to mergers.  Their position at JFK is somewhat valuable but only marginally so as that airport is less effective than La Guardia or Newark.   They have some valuable slots but they’re not ideal.

Spirit Airlines and Allegiant are going to nibble at their business from the bottom.  Southwest and SuperLegacy airlines are going to intrude on their marketshare more and more from the top and there is no great alliance to be had with anyone else in my view.

There was, in my opinion, one great merger opportunity but it would have required a very strong leader with a lot of courage.  I could have seen a merger between jetBlue, Virgin America and Frontier.  There was enough fleet harmony, relatively few seniority issues and core strengths in area of the United States to make that work.

The combined airline could have focused on the West via Virgin America and Frontier Routes using SFO, LAX and DEN and could have used jetBlue assets and strengths to make inroads in the midwest and tie together the East and the West.

But Frontier is going ULCC.  Virgin America has slowed its growth but improved its profitability greatly.  And jetBlue is just stagnant.

More importantly, I don’t see enough of a leader at any of those airlines and I don’t see enough of a leader sitting on the sidelines to make it happen.

jetBlue had its growth and had its momentum killed with the Neeleman ouster and that’s a shame.  It’s gone from jetBlue to jetWho? over the past 8 years and what a lost opportunity that is.

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The City of Dallas’ transportation committee met, deliberated behind doors and then decided to push the Love Field Gate Issue up to the full city council yesterday.  I noticed that one particular person was involved in the hiring of L.E.K. Consulting to determine who should get the gates:  Aviation Director Mark Deubner

Deubner seems intent on making a hash of managing Dallas Love Field in ways that go beyond the norm for this day and age.  Deubner is the same person who made a hash of the negotiations surrounding the Braniff Maintenence and Operations building on Lemmon Avenue last year.   It’s become quite clear that Dallas Love Field won’t be thriving under this man’s direction.

I think that the City of Dallas getting involved in this issue is going to backfire on the city in ways that City Council Members can’t entirely imagine.  First and foremost, it’s unwise to interfere with the United States Justice Department and the disposition of antitrust issues.  Second, the City Council has no legal standing to determine who gets those gets short of crazy arriving on the door step.

And Virgin America getting those gates isn’t crazy.

If the cities of this country want to control their airports better and do more for their local citizens (aka The Consumers), then they need to stop making long term, exclusive leases on gate space.  Auction it off on short term leases or control it on a flight by flight basis.  Keep your flexibility and sell your city like nobody’s business.

But you don’t get to make deals and then revisit just part of them.  If the City of Dallas attempts to control who gets those gates under the present circumstances, they’ll be a part to several lawsuits in which the only sure loser will be the City of Dallas.  And it will cost the city millions of dollars with zero possibility of an outcome that benefits its citizens (aka The Consumers.)

In fact, when Aviation Director Mark Deubner hired L.E.K. Consulting, he exposed the city to a lawsuit right there.  He forced the city into taking a position by virtue of asking a consulting company to establish what was best for the city when the city didn’t have any business asking that question at this point.

So, now it is entirely possible that even if the Dallas City Council leaves the issue alone and permits the gates to be sub-leased, other airlines may well sue the city because it doesn’t fit anyone else’s notion of what should happen.

If Mark Deubner had left things alone and the City of Dallas had left things alone, they would have been fairly protected and any outcome would have at least benefited the citizens (aka The Consumers) marginally more than the present situation.  Neutrality was the smart play here.  And an abiding desire to interfere on the part of City Management has exposed Dallas to consequences that will cost a great deal of money.

Filed under: Airline News, Airports, Mergers and Bankruptcy by ajax
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City of Dallas consultants, L.E.K. Consultants, has come out saying that it’s Southwest Airlines who should get the 2 American Airlines gates at Love Field Airport.  Their rationale boils down to the idea that Southwest will drive the most passenger traffic for the city and that is therefore the most economically sound justification.

Their criticism of the Virgin America lease is that it removes some flights from DFW airport and transfers them to Love Field.

You can’t look at this picture statically.  Driving passenger traffic isn’t necessarily what’s best for consumers.  It may well seem good for the city but it won’t necessarily be good for consumers.

As foolish as I think some of the Justice Departments moves have been in the AA bankruptcy, they aren’t incorrect in the idea that these things should drive competition and benefit consumers.

The consultants seem to be squarely aimed at the idea that what’s good for a business will be good for consumers.  I would disagree with that.

What Dallas has needed most for a long time is competition on a variety of long haul domestic routes in and out of Dallas to a variety of destinations.  Southwest will provide some of that sorely needed competition on October 13th.  And they will provide it regardless of whether or not they get those gates.

Virgin America will provide some of that competition too although I would argue that we could use a more creative and extensive LCC than Virgin America.

What is most needed at Love Field is . . . wait for it. . . . more gates.  20 gates just isn’t enough.  Absent more gates, Southwest should be relieved of its burden to give up gates to get gates at DFW.  The competitve landscape has changed and, unfortunately, that change occurred before the end of the Wright Amendment on October 13th.

But 20 gates at Love Field isn’t enough.  Chicago Midway serving as an adjunct airport very similar to Love Field has 43 gates.  Would I suggest that Love Field should have that many?  No.

But the airport cannot serve any other airlines very effectively despite being open to do so at this time.  6 to 10 additional gates would make sense at the airport.

Barring that, Southwest should not be required to give up gates in order to use gates at DFW airport.  In making the deal to lift the Wright Amendment, the parties involved essentially constrained Southwest Airlines from growth in the DFW area.  In fact, the deal was designed to penalize Southwest if it wanted to grow by using DFW airport.

Isn’t it time to quit taking swipes at Southwest for not moving out of Love Field Airport more than 35 years ago when DFW was opened?  Southwest is a huge employer in this area and a huge tax contributor and excellent corporate citizen.  Why do we want to exact revenge against the very kind of company we should want in our community?

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Continental and United Airlines announced their merger in 2010 and here in Q1 of 2014, I think that their earnings are shameful.

That’s because they didn’t have any earnings in Q1.  Instead, they had $609 million in net losses.

It’s been 3 years since they were able to close on the merger and begin integration.  It’s been more than a year since they acknowledged that they had problems in their integration.  This picture isn’t getting better, it’s getting worse.

Jeff Smisek famously joked that by having Continental merge with United, he saved United from having to marry the ugly girl. The ugly girl was US Airways.

The ugly girl married American Airlines and reported a Q1 net income of $408 million.  With the ugly girl management (Doug Parker & Company) in charge and they’ve barely gone to work on AA operations.

Seems to me that marrying the ugly girl would have been the smart thing.

Everyone looked at US Airways and sneered.  Delta, Continental and even American Airlines.  But the ugly girl kept earning money.  Big money for an operation that was nominally second to every other legacy airline when it came to advantages.

Jeff Smisek worked so hard to avoid the ugly girl that he made a compromised deal and the merger of equals ultimately resulted in a merger where United effectively took over Continental.

Let’s be clear about something:  Continental Airlines, at that time, had a great and profitable operation.  United Airlines did not.

United needed someone to move it past the Tilton Era and into competition with Delta.  Continental didn’t want to lose in the merger game but it had options.  At the least, Continental didn’t need to be the most eager bride around. I always thought it prescient that Smisek saw Continental as the bride rather than as the groom.  Sometimes our statements speak volumes.

Three years later, United doesn’t have it’s act together and it shows zero signs of getting its act together. I fully expect Jeff Smisek and his team to start getting smacked around pretty badly by financial analysts.  Particularly since even Southwest Airlines who merged with AirTran at the same time has now found itself experiencing great joy in the financials game.  The airline with the highest costs (Southwest) is beating an airline with lower costs (United).  Badly.

What to do?

In an ideal world, Smisek would take stock of whose departments ain’t making it and hire new people.  Go hire the best and get them from whoever he can.  Pay them what they need to make a jump.  And do it now, not 6 months from now.

The ranks need to see a new sheriff in town (even if he looks like the old one) and the executive team needs to get the message that performance does, in fact, count.

United employees are, traditionally, their own worse enemy and they remain so today.  They will sink that airline to spite their own faces and the worst part of it is that they will take very good Continental employees down with them.

It will cost to fire some of that executive team.  It won’t cost nearly as much as keeping them on.  Right now, it’s costing $609 million a quarter.

Filed under: Airline News, Mergers and Bankruptcy by ajax
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Well, in an unofficial official announcement by Virgin America at Love Field Airport in Dallas, Virgin America says it will get the two gates at Love Field.  The airline says it has approval from the Justice Department and American Airlines and needs only to get approval from the City of Dallas.

And I think they will get such approval, too.  Strangely, the City of Dallas has never treated Southwest Airlines with the deference you might expect.  Furthermore, I have long thought that giving the gates to Southwest (legal or not) was probably a step too far in creating an airport monopoly for a single airline.

Is Virgin America the right candidate?  I kind of think not.

I think that they are supported by the Justice Department because they favor LCC carriers and Virgin America purports to be that.

I think they are supported by American Airlines because they are a weak(ish) competitor to American Airlines.

Virgin America will only offer flights that are long haul and to major destinations such as San Francisco, Los Angeles and New York.  They might get a few flights in to Chicago, a route so dominated by American Airlines that they have near hourly flights.

American likely saw Virgin as having the least impact to them in the market.  If that’s true, then it probably isn’t that good for consumers in the DFW area.

Virgin America will be good for people who want to fly to Los Angeles, San Francisco, New York, Washington D.C. and Chicago.   It’s notable that AA is the powerhouse on all of those routes while Southwest Airlines will be starting similar routes out of Love Field on October 13 of this year.

But the frequencies will be low enough that it is unlikely to have impact on fares, I think.  To the contrary, I think that this is great for Virgin America as they will experience high yields from these routes as a result of the other two airlines maintaining course.

And this decision could drive me to write yet one more article on why we should auction off gates and slots at airports that are constrained.

Filed under: Airline Service, Airports, Mergers and Bankruptcy by ajax
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There is the prospect of new found competition in the Dallas area when we see Southwest able to fly where it wants domestically starting October 13 of this year.

The problem is, the more I think these developments through, the more I think that we won’t see much of that competition in 2014.

Right now, Southwest is selling itself on convenience and doing well with that story.  I think they will sell their new routes as convenience based options and I’m sure I’m not the only one to notice that their route announcements are focused on the business traveler.

Repeat after me:  Business travelers value convenience over price.

Delta is also focused on the idea of serving Love Field by connecting to Delta’s hubs.  Frankly, I don’t see that being a very good strategy because . . . do you want to fly to Atlanta to connect somewhere else or do you want to fly Southwest or American Airlines and just get there.  Delta, I think, may well not even fly their intended routes.

American Airlines is in an odd place as well.  The airline must focus on integration intensively and can’t afford to pick a fight in Dallas right now.  While they exited bankruptcy in pretty good shape, there are some fences to mend in Dallas over service.  I think that 2014 and, possibly, 2015 will be spent on getting the airline’s act together.

Airlines have figured out that fighting for marketshare is a losing proposition for everyone involved.  Each CEO has made his mark (Gary Kelly, Richard Anderson and Doug Parker) by showing restraint.  That trend should continue for some time.

However, if Southwest is able to lure away the business traveler from the SuperLegacy airlines in the Dallas area on its new routes, I think all bets are off.  That is a target market worth fighting for.

But it will take time for Southwest to make its case to the traveler that it’s a worthwhile choice to fly from Dallas to Atlanta, New York, Baltimore, Chicago and elsewhere.  You have to get a passenger to try the service and Southwest cannot afford to make a mis-step with those passengers.  Service must be excellent and comfort must be of high value.  It will take time to get travelers to try them out on the new routes and Southwest has to figure out how to do that while its local competitor (American Airlines) deploys fresh new aircraft and fixes it service issues at its home hub at DFW.

Look for late 2015 to be the real moment of competition if there is any.

Filed under: Airline Service by ajax
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Airbus may be embracing the idea of creating an A330NEO offering for customers and it would appear to have some acceptance from some customers.  To date, Airbus’ official approach has been to discount the A330 and show it as a cost conscious solution for airlines when balanced against the Boeing 787 offerings.

While airlines such as Delta seem to embrace the idea, one wonders if the investment in an re-engined widebody really is wise at this point.   Airbus doesn’t have the answer to the 787 and it appears the A350-800 won’t be a future answer either.  A lower cost development of an A330NEO would appear to offering something that slots in between the A321 and the A350.

I honestly do not think so.

The 787 clearly was the right size in the -8 variant as many, many airlines adopted this aircraft right from the beginning.  The -9 variant is similarly widely accepted.  Those two, together, are what Airbus has to compete against with the A330 or an A330NEO.  In some missions, it may do OK but it won’t be the long term answer that an investment in a widebody asks for.

It would be foolish for Delta to drive a multi-billion dollar investment in an aircraft that Boeing has a better and just as tested answer for when such an airplane would be available.

It’s become clear that a certain generation of airliners are nearing their end now.  The 767/757 is clearly on a rapid decline with passenger airlines and the A330 will begin that decline shortly.  It’s not a new airliner and the A350 series should have been slotted to replace it better.

Instead, Airbus made the mistake of Bigger is Better.  It’s made that mistake twice now.  Upgauging its offerings made the -800 less attractive to airlines because of performance, not because it was the wrong size.  The truth is that Airbus needed an range that spanned probably 4 aircraft and that’s hard to do.

In the competitive lineup, Airbus needed:

• A350-700 | 787-8
• A350-800 | 787-9
• A350-900 | 787-10
• A350-1000 | 777-200ER
• A350-1100 | 777-300ER

There is no -700 or -1100 and the -800 is a bit heavy for the mission and no one wants it.  That leaves Airbus with (2) attractive medium sized widebody aircraft for customers and the A380.

That isn’t enough.  The A330 could be stop gap but it has to compete against a much more modern, efficient product lineup that Boeing will offer.  Look at Boeing’s potential now and over the next 10 years:

• 787-8
• 787-9
• 787-10 / 777-200ER/LR
• 777-300ER / 777-8
• 777-9

Boeing wins.  It’s got the right sized aircraft with the right efficiency for a 20+ year investment that ranges the entire sweet spot for widebody aircraft.  Even the “older” 777 models in that line-up purportedly “beat” the corresponding A350 models on the “total” package of performance.  At worst, they hold their own against the A350 and that’s still pretty good.

Airbus needed 2 widebody families.  It has one and I think cobbling together a stop-gap measure for one of those in a A330NEO model is unwise.  The widebody technologies are here and they are useful now.  To not use them in an airliner would be folly, in my opinion.  They are maturing every day in the 787-A350-777 developments being done and that means that airlines in general will want those technologies rather than designs that date back to the late 1980’s.

Filed under: Aircraft Development, Airline Fleets by ajax
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It might come as a surprise that you really can’t sue an airline in a state court.  For just about anything.

Instead, you have to file your lawsuit in Federal court which means you have to have a basis of your lawsuit that is founded on Federal law.  Since Federal law generally doesn’t address nuances (that’s generally left to states) and sets a high bar (because a lower bar is what States are for), lawsuits against airlines generally lose.

Oh, it’s quite possible to do a personal injury suit against an airline in Federal court when there is a crash.  But that has as much to do with the bad publicity as it does the law.

You see, airlines managed to have most issues against them (for all practical purposes, all issues) moved to Federal court by an act of Congress back when Deregulation was occurring.

This sets the bar very, very high for winning a lawsuit against an airline.  It is a very protected place to sit as an industry.

And unfair. You can sue Exxon wherever you want but you can’t sue American Airlines wherever you want.

As a result, airlines are able to write egregious contract terms and abuse passengers on a daily basis with the clear knowledge that virtually all passengers can’t sue them.  Imagine the change in attitude and service an airline might experience when it has to face a jury of its peers in East Texas after losing luggage, holding people hostage in an airplane and then arbitrarily cancelling their flight.

I honestly struggle to find the justification for airlines to have such a protected status in 2014.  Virtually all other service oriented industries manage to do just fine without such protections.

We shouldn’t forget the purpose of a civil lawsuit:  It’s to correct a wrong *and* take punitive action against an entity when it intentionally does that harm.  By design, this is to give incentive to companies (and individuals) to Be Nice and Behave.

Wouldn’t that be a near revolution in the airline industry?

Filed under: Airline Service, Deregulation, Trivia by ajax
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Emirates has announced it plans to serve Dallas with its flagship A380 on October 1st of this year.  The aircraft will replace a Boeing 777-200LR and will offer 223 more seats than the current 777.

Why?  Houston has service to the Middle East because of the oil business.  Dallas has it because of the IT business.

The Middle Eastern carriers are the airlines of choice for entire families from India and Pakistan when traveling between the United States and the Indian sub-continent.  Currently, many going to India actually travel down to Houston to fly home because the seat availability is better and the prices are cheaper.

Emirates knows it can reliably fill the A380 by lowering prices.

Quite frankly, I think this is being put into place today rather than next year or the following to ensure that a base of travelers is built up before American Airlines can deploy its 787 aircraft on a direct route to India.  (American’s 777 aircraft don’t quite have the range for the trip but the 787 will).

I think this is a powerful pre-emptive action on Emirates part to subdue QATAR, Etihad and American Airlines and it will likely work very well for them.

Filed under: Airline News by ajax
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I am disturbed by the rather harsh criticism laid upon Malaysia by China and Chinese families with respect to MH370.  I can certainly make allowances for people in distress and I have both empathy and compassion for those people.

But for China to imply that Malaysia has been irresponsible or incompetent is just grossly unfair.

For Chinese citizens to insist that the aircraft is intact and its passengers alive but hidden by Malaysia is . . . stupid. No matter how much grief you feel.

A person or person(s) commandeered an aircraft over a sea, artfully steered it past two nations and then steered a course into one of the most remote oceans in the world.

My point is that this wouldn’t be easy for anyone.  There have been up to 12 aircraft from at least 5 nations assisting in the search.   Nations with satellite imaging capability have scoured the seas over and over trying to sense wreckage and debris.  The United Kingdom and IMMARSAT went to great lengths to establish where this aircraft went and have continued supporting the search.

Many, many nations have lent support in a variety of meaningful ways.  If this airplane has not been found, it’s not because anyone is behaving slow, without care or without a sense of urgency.

It’s because this is a very hard thing to do.  Before anyone criticizes, we should remember that it tooks years to find Air France 447 in the middle of the Atlantic.  We knew far more about that flight and it was far easier to access the area and search.  Yet it was considered one of the toughest searches for an airplane done to that date.

What they’re doing in the Indian Ocean is nearly an order of magnitude more difficult.  The searches know next to nothing about flight path, motive or even the ocean area in which it went down.  But many nations continue going out day after day trying to find answers and doing so with utmost professional behavior.

Filed under: Airline News by ajax
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There has been some news now and in the recent past about a group of people (some originally from Eastern Airlines) forming a new startup in the Miami area (in the old Eastern building).  Most recently there have been reports about an RFP (request for proposal) for up to 10 used aircraft that this new company can purchase.

The company is to start as a charter and use either Boeing or Airbus equipment to start.  This would mean Boeing 737 or Airbus A320 aircraft.

Need I remind anyone how the charter world typically does for any new business?  Or how badly charter companies do when they attempt to transition to a scheduled carrier?

While these people may have some money and opportunity to get started as an airline, I’m extremely uncomfortable with the trade on the Eastern Airlines name to start with.  First of all, if anyone thinks that Eastern Airlines left people with great memories of travel, they would be wrong.  The airline left most people with a bad taste in their mouth and there is a reason why the airline went bankrupt.

That reason wasn’t Frank Lorenzo despite how many want it to be.  It had a lot to do with a bloated operation that didn’t focus on customer experience.  People didn’t fly the airline and didn’t like the airline.  There was no legend of greatness in that airline.  It never was known for that even when Eddie Rickenbacker led the airline.

New airlines can be great things to watch and I get excited by them too.  But this isn’t the one to get worked up over.

When someone like David Neeleman comes into the marketplace and starts using an innovative strategy focused on customer experience using the right aircraft, then we can talk.  That person hasn’t shown up yet.

Filed under: Airline News by ajax
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There is an opinion piece written by former Captain Les Abend on CNN’s website opining that the best explanation for what happened to MH370 is that there was a catastrophic event aboard the airliner that disabled all comms and then the pilots and that the plane simply flew itself until fuel exhaustion crashed the airliner.  You can read this opinion HERE.

Let’s review the ideas one by one:

1)  The airliner had a fire or similar event that disabled all radios and communications.

An event disabling all 5 radios would almost have to involve the cockpit being removed from the airliner.  We know this didn’t happen.  Boeing has built redundancy into these aircraft but has also gone to fair trouble to ensure that a problem in one part of the plane doesn’t take out all of a system.  Antennas are separated.  Power sources are different.  You really cannot lose all the radios simultaneously without something literally destroying the aircraft.  Could they go out one by one?  Yes.

2)  He suggests that the callout of 35,000 feet is what pilots do to remind ATC to give them a higher clearance.  Well, that’s true but what Mr. Abend neglects to mention is that 35,000 feet is a fairly high altitude and to go much higher so early in the flight wasn’t necessarily practical.  To make the callout several times when already at a very high altitude and when there was no weather to clear, is suspect.

3)  It’s suggested that a smoldering fire began to insidiously take out comms slowly, one by one.  What this ignores is the fact that the electronics bay doesn’t just provide communications.  It houses systems for the instrumentation of the entire aircraft.  A “smoldering fire” would have been taking out other systems that would have caused alerts left and right.  This aircraft is also a “fly by wire” system and those electronics reside, in part, in the electronics bay as well.   Fires aren’t selective in what they impact.  And electronics bays are heavily monitored for fire and smoke.

4)  A degraded autopilot maintains course to the next waypoint and then remains in “heading mode” at high altitude.  Pilots to do not stay at 35,000 feet in an emergency that they have to get an airplane onto the ground.  To the contrary, they descend, work the checklists and start communicating their descent so that they don’t collide with other aircraft.  Furthermore, the “nearest airport” wasn’t actually southwest and on the other side of the island.  One with a really long runway was in that direction.  Other commercial airports with sufficient runway length for landing existed.

Navigation of the airliner is dependent on many systems that include the autopilot and instrumentation such as GPS and other nav aids.  Absent these aids, that airliner will become lost.  A smoldering fire that disables pilots, doesn’t continue to smolder without affecting the airframe for 6 to 7 more hours.
I realize that its hard for commercial pilots to accept that a fellow pilot would do something nefarious.  Yet. . . . we know that that has happened many times over the course of commercial aviation history.  It happens.  it’s ugly and it’s terrible.  But it happens.

I also realize that it’s nice to make pilots out to be heros who die in action.  Yet, we also know that not every pilot is a hero.  There are limits to every person.

We don’t know what happened.  And we won’t know what happened over the Gulf of Thailand ever.  Not in the cockpit.  The voice recorder doesn’t record that long.  We will have some record of what was programmed, what the flight control inputs were and what was alarming and what wasn’t.  It will tell a story but it won’t tell the whole story.  It will tell the “what” but not the “why”.

And only if we find the aircraft.  But suggesting that this airliner was a ghost ship that crashed is foolish and fantastical does no one any good in looking at this event.

Filed under: Airline Service by ajax
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