American Airlines and WestJet Airlines have announced an interline agreement yesterday and, once again, I didn’t see this coming. If anything, I would have expected this to develop between WestJet and Delta, not American Airlines.
The agreement will allow customers to connect seemlessly (with one ticket) to 25 new Canadian destinations with American Airlines (and American Eagle) feeding that traffic to six gateway cities in Canada. Presumably it will work both ways (Canada to the US) and it is notable that the press announcement mentions a “phase 2” which will feed traffic back and forth to WestJet flights from the US to Canada as well.
This is a pretty good win for American. It gives Oneworld (via AA) an entrance into Canada where they’ll compete against the Star Alliance and Air Canada. It leaves Delta sitting out in the cold with no other airline in Canada for them to connect with. That, alone, is a bold move.
It also kind of swats at Southwest and its original intentions on Canada via an earlier codeshare agreement it had with WestJet but which was terminated earlier this year after a disagreement with WestJet.
That sound is the door slamming shut.
This will sting other carriers in the US and it’ll force them to access Canada through a much more expensive pathway: flying there themselves.
With both this agreement and the earlier one AA did with jetBlue, it’s clear that there is some innovative thinking going on at American suddenly and now I wonder what comes next. I’ve been pretty hard on AA this year but I have to say that I like this move and I think it will benefit them and WestJet a great deal.
British Airways Business Class subsidiary, OpenSkies, is introducing a money back guarantee to encourage new people to try their services between Newark/Washington D.C. and Paris. Since their internal customer satisfaction surveys indicated that more than 96% of respondents would recommend OpenSkies, this seems like a rather safe bet to be making.
Offering such a thing is a relatively unheard of act in the airline business and it is a hint at the fact that airlines still need to attract customers, particularly business customers, in a rather innovative way. It’s a rather satisfying guarantee because by its very nature, it’s unusual. I suspect it will get some people to notice them and, perhaps, pay attention to them. Especially if current Oneworld members are permitted to earn frequent flier miles on these flights. I presume this will be possible since OpenSkies participates in BA’s Executive Club program.
But at the end of the day, OpenSkies is a tiny airline serving just two routes and this money back guarantee is unlikely to spread among larger airlines. If they were serving more routes, it is possible that other airlines would match it on some limited basis.
What would be nicer to see among airlines is a money back guarantee on the so called “services” that are now requiring extra fees such as the baggage fees or priority seat fees, etc. Sadly, there is no sign of that developing at any airline.
The merger between TAM of Brazil and LAN of Chile offers some interesting possibilities for the new airline group that will be operating under separate names in South America. One big question is which alliance will the group adopt. Currently, TAM belongs to the Star Alliance and LAN is a member of Oneworld.
This new airline will have a bit more bargaining power when it comes to alliances and they have a few choices to make going forward. The first is to participate in both under the respective brands just as before. I’m extremely doubtful that that will happen.
The second is to pick an alliance between Star Alliance and Oneworld. In this scenario, I would give Oneworld the upper hand simply because in this merger, LAN will control more and it is the Oneworld partner. American Airlines won’t want to let them go since they fit nicely into the AA system. In addition, TAM might offer Oneworld quite a bit of access to other parts of South America it really doesn’t have at this point. However, the Star Alliance has a lot to lose and a lot to gain. Especially with the Continental United merger going forward. One could see the Star Alliance attempting to bring the LAN system over to the Star Alliance with some incentives.
Finally, there is SkyTeam who has a lousy representation in South America presently. SkyTeam a la Delta lost a big fight on the trans-Pacific side when it failed to win over JAL. A TAM/LAN entry into SkyTeam would be a huge win for that alliance and I suspect we might just see this dark horse try to bring them over to their side. This is exactly the right time for SkyTeam to woo such a company because there will already be integration efforts going on between the two as they consumate their merger.
In now way does this new merged company go ignored as a participant in an alliance. I do think it will be a fight and I do think all 3 alliances will be offering significant incentives to win LATAM over.
American Airlines is in discussions with its transatlantic Oneworld partners, British Airways and Iberia, to consolidate in Terminal 8 at JFK airport. This would be a good counter-move to Delta’s intention to renovate and expand at the same airport.
It’s about market share in New York and now we find the SuperLegacy airlines moving to own the most they can in that market. AA (Oneworld) and Delta (SkyTeam) at JFK and ContiUnited at Newark. It’s a fight that is sure to get bloody over the next few years.
If AA can move to bring its partners under the same banner and make things even more convenient for connections, it may have a grip on JFK that resembles British Airways’ at Heathrow Airport in London.
It also makes me wonder what ContiUnited might do at Newark. While Continental plainly dominates at Newark Airport, it also presently stands to have the least pleasant facilities and since it’s new to the Star Alliance, it may take quite some time to bring its Star Alliance partners under its umbrella at Newark.
While a number of Star Alliance carriers to have flights to Newark, a number don’t. And things aren’t well organized at Newark for Star Alliance. Will they be? I don’t see how ContiUnited can afford *not* to get their act together at Newark to compete.
Newark is actually a bit more convenient to Manhattan and that is, after all, where the high dollar traveler is going to or coming from. It makes sense for the Star Alliance to cooperate and consolidate and ensure good feed to those international flights but they’re going to have to get some airlines to move over, I think. Airlines such as ANA.
Others, such as Lufthansa and SWISS and Singapore Airlines are all in Terminal B. Continental has Terminals A and C. What ContiUnited really needs is a revised Terminal C and/or a portion of B while giving up A to others.
But will the other airlines cooperate? Don’t bet on it. Keeping Newark in disarray would be a good thing.
It’s been a bit over a week since American Airlines, British Airways and Iberia (along with Finnair and Royal Jordanian) received anti-trust immunity approvals from both the EU and the DoT. What it means is that each of those airlines will be able to cooperate closely with each other on a variety flights between the United States and Europe.
What closely cooperate means is that these airlines will start marketing their respective flights between cities under the various brands but each airline will be responsible for certain flights. For example, British Airways may begin operating more of the capacity between DFW and London while American Airlines retasks the aircraft they were using for some of those flights to other flights. Iberia Airlines may begin operating the flight(s) between Miami and Spain. BA, AA and IB will be selling seats on all of those flights as their own just as you already see done as codeshares.
The difference is that now these airlines will also begin cooperating on scheduling. In other words, American Airlines might start scheduling its “feed” for a British Airways flight from DFW to London. American Airlines might do the same for an Iberia flight from Miami to Spain. On the other side of the ocean, British Airways might schedule its “feed” for London to Chicago to mate up with an AA flight. These airlines will start acting almost as if they are one company so to speak.
Is that good or bad? If you ask the airlines, the customer will get to see more choices to more destinations on Oneworld flights and that choice is good. In most cases, it is good and air fares are likely to be unaffected on many routes because of competition from other alliances such as SkyTeam and Star Alliance.
However, in some cases, I think this is bad. For instance, American Airlines already effectively “owned” the DFW to London market and really the DFW to Europe market. So much so that previously they weren’t allowed to code share with British Airways on such routes at all. There is very little competition in the DFW market to Europe. Some exists, yes, in the form of flights by KLM and Lufthansa to Amsterdam and Frankford respectively. One flight each a day. Now, with even closer cooperation allowed, I do fear that KLM and Lufthansa may find such flights simply uneconomical. There is no real Star Alliance and/or SkyTeam presence at DFW anymore.
In the short term, I do think there are markets that are going to see much higher air fares for non-stop flights to Europe. As with all things, those higher air fares may one day drawn in more competition, though. It is conceivable that if the fares rise considerably, another alliance may target such a market for competition. For instance, the Star Alliance may decide that Dallas needs some competition and suddenly we may find ContiUnited or US Airways providing some feed to that destination in order for a European carrier such as Lufthansa to justify a route between Dallas and Germany.
I think such developments are a good 5 years away at least. Fundamentally, I think these alliances are bad for consumers and bad for the industry but they were instituted a long time ago and that genie is out of the bottle now. Since it would be nearly impossible to break up those alliances, it is fair that Oneworld be permited to establish their own now. SkyTeam pioneered such things and Star Alliance is also far ahead of the curve.
Regrettably, now we have to manage competition between alliances rather than companies. I think that is bad because those alliances potentially let airlines that would otherwise go out of business remain in the game longer. We need to see this industry periodically purge itself of the weaker players. If you think that didn’t happen under regulation, you’re wrong. It did. Airlines did file bankruptcy and if they didn’t, they were forced into mergers of convenience by the CAB. In any case, the weaker players still went away. All too often, we don’t allow that to happen anymore and that hurts us more than helps.
Air Berlin will be joining Oneworld sponsored by British Airways it has been announced. I would like to announce something myself:
Huh? Air Berlin?
Air Berlin is European continent based LCC carrier and while they get generally good marks as an LCC carrier, I’ve a hard time figuring out how their service product harmonizes with the rest of Oneworld. Particularly with British Airways, American Airlines, QANTAS, Finnair and Cathay Pacific. Is Oneworld just that eager to have more feed on the European continent?
That’s a less than thrilling announcement. To be fair, American Airlines has lost a great deal less money for Q2 this year than the previous year’s Q2. This year’s Q2 loss is a bit over $10 million while last year’s was $390 million.
The problem is that while this is an improvement, it also highlights just how far behind the curve AA is compared to its brother legacy airlines in the United States. With Delta and United reporting huge profits for Q2 and Continental sure to follow with impressive numbers, American Airlines’ disadvantage is only highlighted.
American blamed much of its Q2 losses on higher fuel prices. The problem with that is that the fuel price to AA is essentially the same price it is to every airline in the United States. The only mitigation for that is hedging and AA does engage in hedging. So, higher fuel prices over this time last year isn’t really a very satisfying answer for what remains a result that is staggeringly far behind other US legacy airlines.
AA has attempted to mitigate that stark contrast by saying that, over time, other airlines’ costs will begin to approach AA’s again and the gap will narrow considerably. Well, that sounds good but . . . that’s going to take years and years for that to happen. What about investors today? In addition, whether or not that gap narrows is contingent upon how each airline manages itself. Is the airline doing mortal combat with its labor groups or is it finding common ground and securing productive contracts? In other words, AA has good PR for that gap but it doesn’t have a substantive answer.
Or does it? AA also just got DoT and EU anti-trust immunity to form closer partnerships with its Oneworld brothers, British Airways and Iberia Airlines. In addition, it is on track to receive the same in a partnership with Japan Air Lines across the Pacific Ocean. AA says that these partnerships could as much as $500 million in revenue by 2012. That sounds like a lot until you realize that that is a 2+% revenue gain. And that’s revenue, not profit.
At the end of the day, we hear a lot about strategies AA has involving new partnerships and re-focusing on core cities. We hear a lot of mitigation of cost gaps between AA and the rest of our legacy airlines. We sometimes hear analysts praise AA for avoiding bankruptcy . . . usually right before the analyst highlights just how much that put AA at a disadvantage today.
What we don’t hear about is substantive and real progress made towards reducing costs. We hear noise and we see somewhat halfhearted attempts to paint a picture that something is being done but we haven’t heard about the real progress made towards not just containing costs but reducing them.
At what point do analysts and investors require AA’s executive team to show them the money?
The Dallas Morning News Aviation Blog has this post HERE about analysts beginning to like the idea of a merger between American Airlines and US Airways. This marriage occurred to me back in April and you can read my post HERE. Eric Torbensen at the Dallas Morning News thinks it is a terrible idea and I disagree.
The real reason to perhaps not do a merger between these two airlines is that American Airlines is terrible at mergers. Their employees don’t embrace them and their executive corps approaches them like predators. As a result, mergers at AA tend to be plain “consumption” rather than growth or partnership.
Now, if they could embrace a merger, I believe one such as this could be good for them. First, a merger like this wouldn’t definitely not be sexy. The sexy merger partners are now fully occupied and, frankly, there was perhaps just one that really would have qualified as sexy and doable for AA and that was Northwest Airlines. They’re gone. But just because an AA / US Airways marriage isn’t the sexiest thing on the planet and just because it doesn’t necessarily bring the gains that another partner would have provided doesn’t mean that it doesn’t make financial sense.
This one could. Look at the route maps first. US Airways offers a hub presence in two areas of the United States where AA is actually a bit weak. Phoenix is a nice hub in the web and while it isn’t the strongest hub in the country, it does pretty well. Yes, Southwest is there but guess what? AA knows how to compete with Southwest.
Charlotte is a nice Southeastern US hub that pvovides coverage in area that AA hasn’t gotten much traction. AA tried having a hub in Raleigh (didn’t work) and has, from time to time, tried to expand Nashville. It has Miami but that really is more of an international gateway city than it is a domestic hub. So AA has presence in some weak(ish) focus cities for the SE that the Charlotte hub could change for them.
So, in terms of a domestic network, it works. It really is quite complementary to AA’s existing system.
There is some compatibility between the executive leadership of the two companies. Doug Parker is a former AA manager, for example (and his wife still is an AA flight attendant) and some of the other executive staff has roots in AA as well. Some that don’t are from Northwest and the cultures between Northwest and American Airlines aren’t dissimilar either.
But let’s talk about the romantic international part of this. No, US Airways doesn’t offer much to AA that it doesn’t already have. It’s US Airways weakest area. But it isn’t a money loser and there are some hidden benefits. American can probably either A) redirect feed for those flights to one of their existing gateway cities or B) bolster the US Airways international product and make the US Airways international flights a bit more of a competitor. The smart team would do both.
There is another benefit: A more diversified fleet. There is some overlap between the two companies (737, 757 and 767 equipment but the US Airways mainstay aircraft are Airbus aircraft now. The A320 series aircraft could be useful to redeploy onto AA routes currently being served by the MD-80 fleet. The Airbus A330 equipment could be redeployed to AA routes requiring a little more capacity than a 767 but which aren’t in need of a 777’s size or range.
Finally, such a merger would offer Oneworld domestic coverage in areas of the US where it is definitely weak. The Oneworld alliance leans on AA only in the US and the other two alliances were bolstered by at least 2 airlines domestically. This is a great opportunity to improve the Oneworld alliance.
There is value in such a marriage. The problem is, the people who know how to do this kind of marriage and make it work are at US Airways, not AA. Doug Parker and Company understand the value of a union like this and know that you embrace the partners strength and use it. Gerard Arpey and Company come from a school that is more about being a predator and consuming your competition without really embracing them as partners. Since AA is so much larger than US Airways, it’s Arpey who would lead such a merger and I don’t think he’s the right one.
Actually, I think Doug Parker could do fantastic things for AA. If he can succeed with US Airway’s assets and weaknesses, he very likely could do wonders for an airline like AA with its resources. But the AA board would have to want him and despite the recent flare ups against Arpey from analysts, Gerard Arpey still holds the full confidence of AA’s board of directos. He isn’t going anywhere anytime soon.
Continental Airlines announced their first route to use their soon to arrive 787 aircraft. It will be from Houston to Auckland, NZ and if nothing else, this is just fun to think about. Tentatively scheduled for November of 2011, it’s a long way off still and I would regard it as being subject to a lot of things going right such as the aircraft arriving in time.
This is exactly why I believe aircraft such as the A380 and 747-8 have a very limited role in the future of air travel. We now have aircraft that, in the broad scale, are medium sized but very long range capable. The 777-200LR was the first but even that aircraft is a touch big for some routes. Not so for the 787-8. The 787-8 is a 767/A330 sized aircraft capable of handling longer, thinner routes that, frankly, really don’t get flown today.
Houston to Auckland may strike many as a little weird but it really isn’t. It puts Auckland within range of the middle of the United States with a full load and margin for safety. Suddenly there are a whole lot of cities on the East Coast and in the Midwest that can enjoy 1 stop service to New Zealand. Previously those people had to fly to the West Coast and, in many cases, had to make 2 stops before arriving in LA. Even if they had to make one stop, this flight will mean less travel time “door to door” than ever experienced before.
Houston might seem an odd gateway to Auckland but it isn’t. Consider the hub cities the new ContiUnited will have. You can feed traffic from NYC, Philadelphia, Washington DC, Cleveland, Chicago and Houston to that flight. That’s probably not enough to fill a 747-800 but it’s plenty to fill a 787-8 aircraft and I suspect a lot of that traffic will tend towards a more premium customer.
The United part of the airline will continue to handle West Coast to Australia trips. Air New Zealand will probably keep their routes from New Zealand to the US but ContiUnited will now be the first to open up the eastern half of the US to Down Under. That’s huge and a bit of a blow to both Delta (SkyTeam) and American Airlines (Oneworld). This could potentially see Delta and/or AA opening up routes using the 787 to similar destinations Down Under.
Will it happen? I think so but it does have a certain fairy tale quality to it. I remember Aviation.Net members discussing such fantasy routes as far back as 2005 I think and when such things get fantasized on Aviation.Net, I tend to believe they’re too good to be true. However, I believe this has a better than 50% chance of happening because it fits well within how Continental is run, the Star Alliance network and its what a SuperLegacy network airline should be flying when it comes to long haul destinations.
American Airlines is a pretty conservative organization. It doesn’t hire from outside the airline very often and it manages itself pretty closely. It is, in many ways, the IBM of the US Airline industry. Well, the IBM of the 1970’s anyway.
Mergers and acquisitions haven’t been a very successful pathway for American. One look at the TWA “merger” which was really a purchase and you’ll understand why. They tend to focus on their core strengths and it is particularly difficult for them to adopt new staff and destinations. Purchases, for them, seem to be more about keeping dominance in a particular area rather than growing their business.
When Delta and Northwest started off on their merger, it was easy to understand why AA was unruffled by the development. There was no assurance of success on any level be it financial or operational. Being the biggest isn’t AA’s game nearly as much as being the strongest and I’m sure their management corps looked at that merger and decided it wasn’t something to worry too much about.
But Delta has had better financial success than AA and it seems to be “right sizing” aircraft to routes and enjoying better yield and that has got to be attention getting on some level. It got Continental’s attention apparently. If the Continental / United deal does go through, I have to wonder who AA starts to look at. It’s one thing to have an aberration in Delta but it is a whole other bag of bananas to have Delta/Northwest and United/Continental next door to you.
So, is it US Airways? They aren’t just the logical choice because they’re the only legacy airline left. There is a certain sensibility to the idea. AA has no hubs out west (just a large presence at LA) and, in fact, has no dominance in any of the areas where US Airways does operate. Well, Philadelphia is close to Washington DC and NYC but it isn’t the DC or NYC market either. AA has no southeastern presence either. Miami is a hub but it isn’t an regional hub like Atlanta or Charlotte.
There isn’t much fleet compatibility there and I’m not sure there needs to be. Delta has shown that as long as you have an economy of scale in the aircraft type, you can have it in the fleet and use it to your advantage by rightsizing your aircraft to the route.
Labor problems? Well, AA is kind of used to labor problems and their labor unions are so strong that I kind of wonder if they wouldn’t smack all those US Airways EAST/WEST conflicts into shape. If nothing else, it would give the EAST/WEST unions something to unify over.
Say, did you know that US Airways CEO Doug Parker used to work for AA? His wife still does. Guess who US Airways’ President Scott Kirby used to work for? Sabre when it was a division of AMR, the holding company for AA. Two more of the executive team come from Northwest Airlines from an era when they really weren’t that different from AA culturally speaking.
Both airlines have a lot of debt. The US Airways team has actually proven itself to be pretty scrappy in many areas. They cleaned up the Philly problem from US Airways EAST, managed their finances carefully and have continued to be a player despite unresolved challenges. Neither has really made money though.
However, a real merger, not just a purchase and dissolution but a merger, has some potential even if AA’s team retains most of the control. It has some of the same potential that Delta / Northwest had and fewer of the risks that a United/Continental merger has. It helps the Oneworld alliance as well.
While I think AA could do it, I also think the chances for them to screw up a real merger are far higher than I would give many other airlines. I think they would approach it as a takeover and attempt to dominante everything. And as a result, I think we would see the hubs in Phoenix, Philadelphia and Charlotte slowly fade away over time with nothing much to show for its effort after 10 years.
It’s been announced that India’s airline, Kingfisher Airlines will be joining the Oneworld alliance, probably in about 18 to 24 months. While Oneworld and Kingfisher are playing this up big in today’s news, it puzzles me and, frankly, I have some doubt as to whether or not it will actually come about.
First, Kingfisher hasn’t exactly been the most financially solvent airline in a market with 2 other major competitors (Jet Airways and Air India) nor has it exhibited a very rational strategy on choosing its destinations. It has a couple of trunk routes from India to London and Singapore, a couple of route to leisure destinations in Asia and a domestic network that is reasonably extensive but not overwhelmingly competitive.
While I’m sure that Kingfisher offers Oneworld partners AA, BA and QANTAS some feed, it doesn’t appear that Kingfisher itself has the resources to make use of the partners in their home countries. Their fleet is comprised of A330 aircraft and while they’re scheduled for A380s and A350s, not a person around thinks they’ll actually take up the A380 and the A350 is scheduled for deliveries to start in 2014 but it’s unlikely that those will be on time either.
What also surprises me is that Jet Airways, Kingfisher Airlines major competitor, already had a good codeshare relationship with American Airlines and QANTAS. Their equipment and services better aligned with Oneworld so I’m puzzled why we are not hearing about Jet Airways joining Oneworld.
There certainly is a need for a Oneworld partner in India and with Air India joining Star Alliance, that left Jet Airways and Kingfisher. My guess is that they couldn’t make a good enough business case for Jet Airways who enjoys good relationships with SkyTeam members too. However, if I had to pick between the two, Kingfisher wouldn’t be my choice.
I suppose Kingfisher may work if it wants to be the domestic provider for Oneworld in India. They do have the domestic network to make that work. But they will likely become jealous of feeding all that high dollar traffic to AA, BA and QANTAS just to get the domestic traffic in India. It doesn’t feel equitable. One thing I’ll say for Oneworld, their partnerships do seem quite equitable for the most part with each partner airline appearing to bring a good strength to the table both domestically and internationally.
American Airlines and British Airways won tentative US government anti-trust approval to cooperate closely with each other on routes and pricing. Iberia Airlines, Finnair and Royal Jordanian are also a part of this package. The one caveat from the Department of Transportation is that the “partnership” yield 4 slot pairs at London Heathrow airport to other airline(s) that might provide service between Heathrow and the United States.
This partnership is still contingent upon EU approval but I suspect the EU will grant it as well.
Is this good for the consumer? Well, in the long run I suspect so. There is plenty of competition between the US and Europe in general and frankly I suspect travel to London Heathrow hasn’t been this competitive ever already. In this case, I think we’ll see some capacity reduction between AA and BA on those US-London flights and that might well be justified. There may be a few non-stop routes that see fares rise some but overall the general population of the US and the UK will likely find fares pretty reasonable or even unchanged in most respects.
This will be a huge plus for OneWorld members in that they’ll be able to find better coordinated schedules for a variety of destinations throughout Europe and the US. And it should put OneWorld on much more equal footing with both the StarAlliance and Sky Team.
Of course, Richard Branson finds it all outrageous but, then, if you follow Richard Branson and Virgin Atlantic, you knew that he would already, didn’t you. (I do think Richard Branson has finally cried wolf one too many times and no longer gets the credibility he might once have had. One thing is sure, it’s time for VA to start looking for a partnership.)
Both BA and AA might moan and grown over giving up 4 slot pairs at Heathrow but both know that 1) those pairs will yield a tidy sum in a sale and 2) they’ll still have plenty of maneuvering room to make lots of money.
I doubt very much either airlines’ unions will be happy about this though. AA pilots will worry about a reduction of flying on their part which, in my opinion, is only a worry if they continue to fight new ultra-long haul services that AA could use their aircraft on. This is a real concern given this agreement’s potential to free up 777 aircraft to fly to new destinations.
The real win for OneWorld will be gaining anti-trust immunity with JAL for trans-Pacific services. With that agreement and this one, OneWorld gets the opportunity to compete with the other two alliances on pretty good footing and they haven’t had that in quite a while. Both agreements would also make it more attractive for other airlines to join OneWorld now.
I would not be surprised if this development doesn’t suddenly make it a bit more attractive for OneWorld to approach US Airways about joining. US Airways would make for a very complimentary addition to OneWorld and it would allow them to leave an alliance where they are quite literally relegated to secondary status on all fronts. In OneWorld, US Airways could offer good domestic service to the other partners and cooperate well on both trans-Pacific as well as trans-Atlantic services.
It’s official, JAL is staying inside Oneworld and the folks at American Airlines can relax on that front.
The only thing that surprises me about this announcement is that it was done this quickly. I thought it would take a month or more for the airline to come around. That said, it was a smart move for two reasons.
First, the last thing JAL needs to be doing right now is agonizing over an alliance. Their problems were not going to be solved by being in the right alliance. They were going to get solved when the executive leadership started focusing on cutting jobs, slashing costs and rationalizing the routes. The new JAL Chairman and new president apparently decided to move that issue of their plates and get on with the real work.
Second, it’s a smart move because there were big anti-trust issues involved with a lashup with SkyTeam and Delta. The US government signaled as much a couple of weeks ago when it told Japanese negotiators for the new open skies treaty that approval for anti-trust agreements already applied for was not a “done deal”. By staying with Oneworld, JAL gets to preserve its alliance infrastructure, benefits from revenue guarantees for the next few years and has the time to focus on restructuring itself rather than wasting their time on fighting an anti-trust battle in the US.
One thing that has become clear from this fight. American Airlines has emerged as the leader of Oneworld. The other major partners, Cathay, QANTAS and British Airways, didn’t really step up in the way you would expect of such a partnership. Yes, this was a fight based in the US but those 3 airlines stood to benefit but didn’t really work terribly hard to win the fight on behalf of AA. Look for AA to become the Oneworld leader and the airline that starts setting the direction for Oneworld for the future.
That could be good or bad. Good because Oneworld really hasn’t had much leadership from any airline to date. However, American Airlines has to set a direction that other airlines want to follow and one that benefits everyone in the alliance. If they don’t take up the leadership reigns, look for Oneworld to melt away in 5 years or less.
These three alliances have been forming, growing and shifting for some time now and it is almost fair to say that they’ve reached a certain maturity that lets us take a look at what the future might hold.
There will always be shifts between alliances as time goes by but the major structures are now in place and let’s be honest in that airlines are not equal partners in these alliances. There are bedrock airlines and there are airlines who are really more associate partners.
In the Star Alliance, US Airways has definitely been more of an associate member than, say, United, Lufthansa or Singapore Airlines and with the recent addition of Continental and the close partnership its formed with United, US Airways is even more the redheaded step-child in this organization.
SkyTeam really has the strongest core though. Formed, in part, from the original Northwest / KLM alliance that began in the 90’s, it now has an extremely strong network that spans both the Pacific and Atlantic oceans. If it has a weakness, it is in South America among South American carriers and I’m not sure if that is really a weakness right now.
The Star Alliance and SkyTeam have both managed to work among themselves in pretty close partnership and develop strong networks playing on each others’ strengths. Schedules between those partnership airlines are pretty rational and they do tend to treat affiliate partners as having value in the organizations.
Then there is Oneworld. Oneworld isn’t so much a partnership alliance as it is a looser affiliation of airlines. To be sure, at one time Oneworld’s members represented a very strong core of airlines who were profitable and very strong on a global level. To a degree, they still are but this has definitely become the weak alliance over time and with the fight over JAL taking place, its now fighting for its life.
Oneworld doesn’t know how to work well with each other. Partners American Airlines and British Airways have dominated that relationship and because of their obstinance over trans-Atlantic routes and slots at Heathrow, they haven’t been able to work closely together over time and develop those relationships that have been grown in other alliances. Because of their dominance, other potential strengths in their network, QANTAS, JAL and Cathay Pacific for instance, haven’t really been exploited fully either.
Oneworld is, for most intents and purposes, an old style Anglo-American relationship with AA, BA, QANTAS and Cathay Pacific dominating that alliance. (If you don’t think Cathay Pacific is Anglo, look up its history and its executive team.)
If Oneworld loses JAL, I’m not sure this alliance survives in the long run. It cannot afford to be an alliance with two dominant partners (AA and BA) and it cannot afford to lose even one trans-Pacific partner. If JAL moves over to SkyTeam, then I suspect over the next few years we’ll see one or more “majors” in that relationship find homes elsewhere.
No matter what Oneworld does, they lose a major network in Japan if JAL leaves the alliance and they have no hope of luring ANA over to their alliance either. The best they can hope to do is build their routes systems into Japan with more direct flights from outside Japan. That isn’t very satisfactory.
They already lack a major partner in China itself (Cathay Pacific isn’t quite that kind of partner) and lack a major partner centered in Korea and Southeast Asia/India.
I suspect we’ll see one or more core partners in Oneworld slip away to one of the other alliances. It wouldn’t be too hard to attract LAN away from Oneworld, for instance. Nor would it be difficult to perhaps walk Cathay Pacific away from Oneworld. That would leave three basic Anglo American core partners who have no harmonized strategy and not much to offer smaller affiliate partners either.
What’s more, JAL doesn’t need their money now that they’ve gone into bankruptcy. The Japanese government is financing them and will provide all the capital they need at this point since they have little choice to do anything else. That means JAL is free to consider a long term strategy and if it can get some real signal that anti-trust immunity would be granted to a partnership between Delta and JAL and the rest of SkyTeam, that’s their best deal.
It has occurred to me that the reason there hasn’t been more worry about the dominance such an anti-trust immunity would grant is that, maybe, Delta has signaled its willingness to draw down its legacy network to and inside of Japan that it gained in its Northwest Airlines purchase. Northwest Airlines not only had a strong system to Japan, it also had a strong network system of flights originating from Japan to regional Asian destinations.
If Delta is willing to let JAL fly that system on its behalf, that may well satisfy regulators in the United States.
So, the Dallas Morning News Aviation Blog has THIS entry about the United States telling Japan to slow down on their assumptions that all alliances applying for antitrust immunity in anticipation of a new Open Skies treaty between our two fine country will receive approval. Apparently the Japanese government has been presuming that any and all applications are a done deal and approval is just pro forma. So the United States went to Japan and essentially said “Yeah. Not so fast. Not only do we not choose the alliance for our companies, but we actually don’t just rubber stamp things either.”
With all the talk over the past two weeks about how it was all but announced that JAL would switch to an alliance with Delta and SkyTeam, I could not understand how everyone could regard that as a done deal. Such an alliance meant that 50% or more of the trans-Pacific traffic between the US and Japan would be owned by a cooperating alliance. In the airline world, that’s market power.
To put my puzzlement in perspective, the trans-Pacific BA/AA/Iberia alliance wouldn’t come to close to controlling that much of the UK/US traffic and, yet, the DoJ and DoT have *not* given blanket approval to that application. The DoJ asked for modifications and the DoT (which actually gives the approval and which is more friendly in general to airlines) is waiting for more comments.
So, as I’ve already written a couple of times, I didn’t see an anti-trust immunity agreement between JAL and Delta as necessarily anything genuinely possible. Frankly, I don’t know why Delta thinks it so doable either but from their perspective, there is no harm in trying to form the alliance.
This is the cultural difference that exists between Japan and the United States. In Japan, government still very much has a hand in the direction of businesses and, in particular, the airline industry. Japan, despite its size, remains essentially a two airline country where one of those airline (JAL) has been a government arm for its entire existence. From Japan’s point of view, if the US wants an Open Skies agreement and knows that granting immunity is essential to that agreement, then surely the US will make that happen regardless. Obviously, our government doesn’t work that way.
I suspect that was a rather stunning reveal for the Japanese government and the executives at JAL. I also suspect that the CEO of American Airlines, Gerard Arpey, smiled yesterday despite everything else slamming into AA this week. Now that I understand what was going on on this subject, I reaffirm my belief that, ultimately, JAL will stay with Oneworld if only because of anti-trust issues and the extreme difficulties and logistics of getting such an agreement to pass in Washington, DC.
And that isn’t exactly breaking news, is it? Everyone knew it was coming and now it has happened. Japan Air Lines must now face the music, reorganize and find a way to survive.
It isn’t as if they were a shining example of profitability over the years. Indeed, it was yet another airline formed as a national flag carrier that was ultimately privatized and which ultimately went into deeper and deeper debt. Its cousins are airlines like Alitalia and Olympic, not British Airways and American Airlines.
The blame lies in the company culture and by that I mean it went too long in a regulated and semi-regulated environment and then got set free into the competitive winds of the world with a crew of executives that never knew any real competition. Its one positive attribute was its service level which by most accounts was impeccable.
There has been a lot of criticism for the CEO, Haruka Nishimatsu, over the past few weeks. Particularly when it was announced that he was ultimately going to be replaced by Kazuo Inamori, founder of the Kyocera Group. I wrote about that announcement HERE. Tonight I remembered a video that was passed around among many airline enthusiasts as a kind of great example of what an airline CEO should be. Mr. Nishimatsu is shown riding a bus, eating in the general cafeteria of the company and generally being one of the people. I remember many people posting on other blogs about him earning just $90,000 in salary after cutting all his perks when he had to slash budgets and staff at JAL. (See below)
Let’s remember that this guy at least tried to do the right thing which is quite unlike many in this business at times.
So, what’s next? Well, JAL has to layoff thousands of employees, reduce costs at every level, probably purchase some new aircraft and find a way to claw itself back into profitability. That’s a tough thing to do even in good times.
I’ve some doubt about their choice of CEO to do it with. This is a man who plans to work for no salary and put in “3 or 4 days” a week as well as choose a second-in-command from the current airline ranks. Huh? Really?
What JAL needs is a seasoned airline executive who has extensive experience in competitive environments and who understands what it means to run both a national and international airline. There are plenty of those around in this world but, yes, it does potentially mean hiring someone who isn’t Japanese to run the airline. Or at least to lead the airline out of its current problems.
There is some precedent for this. Nissan’s CEO is Carlos Ghosn, a Lebanese-Brazilian man who came to Nissan from, of all places, Renault. He made enemies until he surprised everyone by bringing Nissan back to profitability. If they can’t stand to hire outside of Japan, then they would do well to find someone at ANA to take over.
If the Japanese government and JAL’s board want to be serious about recovery, they need someone who is the best, not someone who is politically safe.
JAL will likely rid itself of its 747 fleet in favor of a 777 / 787 fleet for its international operations. It is time for those Airbus A300 aircraft to go too. It will have to eliminate stupid routes like flying from New York City to Rio de Janeiro. Their focus on First Class and Business Class will have to be realigned. (An amazing portion of some of their international aircraft is dedicated to these two classes leaving only a small portion for Economy Class.)
But I have to say that I think this is going to turn much uglier before it gets better. I think JAL will flounder and I think the Japanese government will continue to pump money into it (and, in a way, they kind of have to since they provide the only competition to speak of for ANA.)
“We believe it is important to secure customer convenience by the injection of public funding. However, we are also highly concerned that the fair and competitive environment would not be secured under the financial support and injection of public funding.”
That kind of criticism is rare in Japan but ANA has had to fight for its success since its inception. They have a point but strangely even I find such a statement a bit tacky on this day.
Everyone says it is Delta and SkyTeam who will lure JAL away from the Oneworld alliance. I must say, given all the talk, I’m beginning to be swayed. However, I remain skeptical that they can enter into the SkyTeam alliance, particularly with Delta, without their being some anti-trust issues on the part of both governments. If they are leaning that way, I believe it is because someone in the Japanese government is leading them to believe there will be no issues. I do not think that that will be the case in the United States, however. One look at the criticisms of the AA/BA/Iberia anti-trust case and you’ll see what I mean.
Reuters is reporting HERE that JAL has announced a new CEO. The founder of Kyocera probably most known here for cell phones, Kazuo Inamori, has been named as the new CEO in place of Haruka Nishimatsu who agreed to step down as part of a restructuring by a Japanese government fund.
I see a few potential problems here. First, Mr. Inamori is 77 years old and in his statement regarding this new position, he said:
“I am old and a full-time job is hard for me, so I would like to work three or four days a week and I will work for free.”
That doesn’t inspire my confidence. The airline business is punishing and requires constant care and attention. Anyone who will guide a successful restructuring really needs to be making a comittment to long hours for the next 3 to 5 years.
Second, Mr. Inamori doesn’t have any prior airine or even transportation and/or hospitality experience. His background is in electronics. I’ve said it before and I’ll say it again, the airline business is a service industry. One of the things that often confounds outsiders to the business is just how much cash it takes to run an airline even on a *daily* basis. The amount of money flowing through an airline is staggering and newcomers often believe that simple “tweaks” will yield profit. They don’t.
Yes, there have been outsiders that have come into the airline industry and succeeded nominally. United Airlines is rather famous of seeking its CEOs from outside the business and most recently with its current CEO Glenn Tilton. However, many would argue that Glenn Tilton is the perfect example of why it should NOT be done and I would tend to agree.
JAL needs a dynamic leader with excellent ties to the Japanese financial world but who is also capable of leading JAL’s staff through what will be a very painful restructuring. Jobs will have to be cut. Routes will have to be restructured and new alliances found. Japan is in need of an LCC carrier and someone who could identify how to start one would be an excellent candidate for JAL. Sadly, LCC business models are outside the knowledge of most Japanese airline executives. (If you think JAL Express is an LCC, read THIS and you’ll find it really isn’t.)
JAL also have to figure out its international routes which just boggle my mind at times. For instance, JAL flies Tokyo-NYC-Rio de Janeiro and offers flights with 5th freedom rights between NYC and Rio. Now, flying JAL between those two cities might sound attractive but it strikes me as silly. JAL would be far better off flying to NYC and allowing AA (via the Oneworld alliance) carry their follow on traffic to Rio.
JAL just announced a closer partnership with Oneworld member, Mexicana, for carrying traffic from the US to Mexico. While there are strong ties between Japan and Mexico, this makes sense for JAL.
At one point, JAL was flying to destinations such as DFW, Cairo, Beirut and Copenhagen. That kind of flying reflects someone acting as a national flag carrier but not an airline acting in its own best interest. The new leadership will have to rationlize the routes, rationalize the fleet and figure out which of two major airline alliances to participate in.
The fleet is comprised of a mix ranging from Boeing 737s to Boeing 747Ds and capacity will have to be reduced and aircraft interiors reconfigured to reflect the accomodation of more coach class traffic. JAL is in the enviable position of having 2 airline alliances, Oneworld and Skyteam, court their membership and offering generous financial packages in return. But choosing the right alliance isn’t just about how much financial rescue packages offer, it is about identifying who can offer the best revenue improvements over the long term. I still believe that JAL will ultimately remain with Oneworld if only because fighting anti-trust issues by joining Skyteam is not what an airline should be doing during the fight of its life.
There is a huge battle taking place over who gets to have Japan Air Lines (JAL) business. The financially struggling airline has suddenly become a hot property and American Airlines (OneWorld) and Delta Airlines (SkyTeam) are fighting over JAL like it’s a supermodel. Both airlines are offering hugely attractive financial packages to JAL and I suspect the poor airline has no idea of who to nod their head towards.
Ultimately, I think JAL will stay in Oneworld. There is more at stake here than what is offered as a financial rescue package. Japan is still a very nationalistic country and keeping the identify of what is, for most purposes, its flag carrier will be important. It has a solid relationship with Oneworld and American Airlines and compared to the risk of joining with SkyTeam and the possibility of being a second tier player in that relationship, JAL has a safer bet with Oneworld.
In addition, I don’t think JAL can afford to wait for anti-trust immunity to act with airline partners and it won’t have to by staying with Oneworld.
The Middle East:
I continue to think that the major international airlines (Emirates, Qatar, Etihad) of the Middle East are more at risk than they claim. Yes, they’ve experienced phenomal growth and, yes, they continue to purchase aircraft like a 5 year old buys candy but what’s next for them and their route systems?
The Middle East doesn’t offer a good connecting point for North or South America. Airlines in North America can reach their markets non-stop with existing aircraft and why would a passenger choose to connect via an airport in the UAE (United Arab Emirates) when they can fly non-stop at a competitive price. Better service product won’t attract these customers.
There is very little business between South America and Africa, India, The Middle East or Southeast Asia and, so, South America isn’t a place that could serve as a growth area for those airlines.
Emirates, Qatar and Etihad have succeeded by offering a hub between Europe and the Middle East, India, Southeast Asia and (to some extent) Australia/New Zealand. However, even European airlines are adding longer range aircraft and are able to reach each of those destinations non-stop more and more with the exception of Australia and New Zealand.
In addition, each of those airlines is bankrolled to some extent with oil profits and the uncertainty of those profits and the uncertainty of other investments in the Middle East has to raise the risk for that continued bankrolling. I don’t see any of these airlines failing in the next year but I do see them perhaps deferring orders and re-organising their fleets.
India:
What a catastrophe! No airline in India will do well for now and there has to be some consolidation in this market in the near future. Kingfisher and Jet Airways are both excellent candidates for takeovers and, perhaps, they are excellent candidates for each other. Kingfisher bet on Airbus by ordering A330 and A340 aircraft first. Their A330 fleet doesn’t quite have the range it really needs to expand outside of its current markets and the A340 was a terrible choice for long range flights. So much so, it got rid of the aircraft on order.
Now, Kingfisher has a few A350 and a few A380 aircraft on order for deliveries starting in 2014. While it could desperately stand to have the A350 now, I don’t see how it can wait until 2014 for the aircraft. I also seriously doubt it will ever take up the A380 both because of cost and an inability to fill the aircraft enough for regular flights.
Jet Airways also has a great service product but bought too big of an aircraft for the routes it needed to compete on. Jet Airways purchased the 777-300ER when it really needed the 777-200ER/LR for the international routes it proposed to serve. Now 4 of the aircraft are leased to Turkish Airlines and 3 are going to Royal Brunei leaving just 3 for Jet Airways.
Both Kingfisher and Jet Airways have a great service product and good networks across India and neighboring countries. They would be better served by merging and using one brand for their national service and another for their international services. Kingfisher for India and Jet Airways for international service.
The Far East:
China has a lot of problems coming to roost with the inevitable decline in their economy which is heavily dependent on North America and Europe. Look for some consolidation in this market. I do think that Chinese airlines face potential issues from government mandates to purchase indignenous aircraft being developed now. There is little chance that the aircraft being built will be competitive internally or externally. At least for this first round of development.
While JAL is suffering and ANA (All Nippon Airlines) isn’t performing that great at present, I see no major changes in the Japanese markets. This is an area that will bounce back but only after a long fight. The same is true for Korea.
Oceania:
Australia will be interesting to watch. I’m tempted to guess that the status quo will remain in most cases. The competition between the US and Australia only continues to grow more fierce and something has to give. I still think that United Airlines may well be the airline to withdraw from this market and only because of the rather unique market relationship formed between Delta and V Australia (and Virgin Blue).
QANTAS will continue to own a large piece of all air travel from its home nation and they could be helped along with some deliveries of the 787. At some point, QANTAS must grow and growth means a lot of long and thin routes to be added.
South America:
I don’t think there will be any major news from this continent over the next year. LAN will continue to succeed by operating smart and honest. Brazilian airlines will continue to fight things out but there is enough international business for each of them and their real threat comes from Azul on a domestic basis.
Look for Azul to consider adding a larger aircraft to its fleet and don’t count Boeing out on that deal. It would be easier for David Neeleman to add the Boeing 737 to his fleet in Brazil because he could outsource maintenance more easily.
Aerolineas Argentinas: Well, what can I say? This disaster is much like the country itself. It won’t go away but it won’t perform either. No outside airline will consider taking it over after what happened with Grupo Marsans’ ownership. They lack an appropriate fleet for their flying, a strategic plan for stabilizing their revenues and no clear plan for future growth. But the Argentinian government also won’t let them go away. It is a matter of national pride.
LAN Argentina is growing in Argentina but somehow I remain skeptical that it will be allowed to succeed too well. Why? For one reason, the government of Argentina owns Aerolineas Argentinas and it has a vested interest in that airline earning money. For another reason, LAN Argentina is owned by the LAN Group of Chile. Look up how Chileans and Argentinians feel about each other.
Colombia and Venezuela:
Avianca Airlines has joined hands with Grupo Taca and I suspect that will be a good thing for both airlines. Avianca could benefit by the exellent managment of Grupo Taca and Grupo Taca could benefit from greater access to South American markets. Its almost certain that the two will harmonize their fleets and service products for greater economies while maintaing the two identies for greater acceptance throughout Central and South America.
Venezuela: All airlines erode further due to the increasing interference of the Venezuelan government and, more specifically, Hugo Chavez. I lost hope for Venezuela’s airline industry when they forced Conviasa (in partnerhsip with Iran Air and originally using an Iran Air 747-SP) into a route between Caracas and Tehran with an intermediate stop in Damascus. This is the ultimate in “this route makes no sense.” If the government can do that, then they’ll do other things to damage the industry.
Europe:
The European continent’s airlines are hunkered down just as much as the US based airlines. There isn’t much to be expected in Europe for the next 12 months but let’s look at it anyway.
British Airways is kind of the American Airlines of the UK. They’ll always somehow manage to survive and generally pretty well. They have their own labour troubles but, again, they seem to be capable winning these for now. British Airways needs to cut costs a bit more so I wouldn’t be surprised at some order deferrals and/or hastening the exit of the 747-400.
The one airline I continue to wonder about in Europe is Lufthansa. While they have a good service product and an excellent reputation, they also seem to have some weaknesses. Lufthansa continues to purchase weaker sisters in Europe such as SWISS, Brussels Airlines, Austrian Airlines, Lauda Air and, now, BMI.
20 years ago, this would seem reasonable in that European countries were pretty nationalistic. Now, not so much. Yes, there are some pockets of nationalism that exist but I wonder at maintaining so many different brands, fleets and networks now. It would seem that the brands could be pared down to 2 or 3 mainline airlines and 3 to 5 regional airlines. BMI wasn’t an airline that was succeeding in any great way and what does Lufthansa get for their purchase? I see little of value. I don’t know that BMI gets Lufthansa an entry into the UK that is of any more value than the Lufthansa brand itself.
I also wonder about their fleet. They have a large fleet of A340 aircraft serving medium to long haul routes and that cannot be very efficient or profit enhancing. Yet, Lufthansa has made no real move to correct this problem. Their one major aircraft order in the past several years was for the four engined 747-8i. They have no orders for the 787 (although Boeing would no doubt happily accomodate them with early delivery positions) nor the A350 (and I’m certain Airbus ould love to add them to the order book as well.)
This puts Lufthansa into competition with British Airways who has moved towards operating more twin engine, long haul aircraft (777 and 787) as well as KLM/Air France (777). Yes, they do own some A330 aircraft but their true long haul equipment is the A340 and 747.
KLM / Air France: Not much here. I don’t see an order for aircraft coming from them unless Airbus magically announces a GE engine for the A350-1000. Otherwise, I seem them holding their cards close to their vest and waiting to see what happens in Europe.
The BA/Iberia merger: I never saw the attraction myself. It’s a low rent copy of the KLM/Air France union and I suspect there are many issues to resolve before the two really combine. Personally, I think the odds of this merger actually taking place is, at best, 50/50.
Their alliance with AA over the Atlantic will continue to be a strong issue for the US Justice Department. The BA/AA strength on the US/UK routes and the the IB/AA strenght on the US/Spain routes is really a bit too much. I think the DoT/FAA is willing to let this alliance go forward but I think the DoJ is going to speak loudly and force a request for concessions. Concessions that I think, this time, BA and AA may meet with some negotiation.
You did book your air travel a couple of months ago, right? Don’t expect to find much available at this point for holiday travel because airlines are now either blocking their sale fares for those dates or adding a premium to them for certain days. In short, they intend to maximize the income from peak demand days any way they can.
That said, there are a few strategies you can employ for a less expensive trip. Traveling with a family? If so, see if you can send your family ahead of you on a non-peak day while you travel on a peak day later so you can finish your work week. Look for early departures to your destination. A 6:00am flight might not sound attractive but if you save $100 per ticket, that’s a tidy sum for a family of 4. Look for connections through a non-traditional city that might take longer but cost less.
What if you have a lot of air miles and you want to use them? Again, you’re likely out of luck but there are some thing you can check into. See if your frequent flier program has any partners that travel the route you want. They may have availability. The Star Alliance now has not 1, not 2 but 3 partner airlines in the US (United, Continental and US Airways) and Sky Team has the rather huge network of Delta/Northwest. Oneworld, I’m afraid, is limited to American Airlines but if you’re traveling to an international destination, you may still have a chance.
International destinations require some creative thinking for a cheaper fare. Perhaps if you are traveling to the UK you might ordinarily use American Airlines but they’re rather expensive for the dates you wish to travel. It might be possible to fly via one of the Oneworld partners using a different hub. You may make 1 or 2 connections instead of flying non-stop but, again, the savings may be worth it particularly if you have a family. It might be possible to fly Iberia to Spain and connect via Madrid or Barcelona for instance. Or if you ordinarily use Northwest Airlines, you may have better luck checking KLM or Air France’s schedules for connections via Paris or Amsterdam.
Holiday travel is also the time when checking luggage is certainly more of a risk. Try to send gifts ahead of you via UPS, FEDEX or the USPS. Consider what you are taking along for clothes. Maybe you need to wear nice, dressy clothes once on your trip. If so, considering wearing them for the flight so you can pack an extra shirt and tie into a smaller suitcase that you can carry on instead of checking. This is a good strategy for taking along a bulky sweater or coat too.
Finally, consider where your flight(s) may be connecting through. Try schedule your holiday travel connections through southern hubs such as Dallas, Houston, Atlanta, Memphis, Charlotte or Phoenix. This doesn’t completely eliminate the risk of bad weather but it does help mitigate it considerably. Try to leave as early as possible in the day as delays only get worse through the day when weather is involved. Check your flight status the day before your trip. Is there weather affecting one of the cities you are traveling to or through? If so and you find your schedule flexible, try calling the airline and seeing if you can change your schedule to something better without penalty.
If you find yourself stuck at a connection, look for opportunities to fly to a nearby city instead. For instance, if you’re traveling to Chicago and weather has massive delays being experienced, perhaps your airline also flies to Milwaukee. If so, they may let you change your destination to Milwaukee where family can pick you up or you can rent a car to travel down there. Even if your chosen airline doesn’t fly to someplace nearby, perhaps a partner airline of theirs does. Suggest that as a option to the gate agent if you are trying to re-book.
Have a strategy. See what your options are *before* you leave and have a couple of backup plans you can suggest to an airline agent in the event of a cancellation. Yes, they are supposed to have more resources than you in that situation but they also have limited time to think a problem through. If you have a suggestion or two they can try, you may make your life and theirs much easier since you are signaling some flexibility and trying to work with the system instead being in war with it.
I’ll also suggest this service. It’s Cranky Concierge found HERE. It is a travel service offered by Brett Snyder of the Cranky Flier blog. For a low price, you get an ultimate airline geek who will help you with all those strategies I named and more. I think for holiday travelers, this could be a huge value in the event something goes wrong with your flight(s). I myself do this kind of thing for friends and family but chances are you don’t have an airline geek in your circle. The Cranky Concierge can be your own personal airline geek and help get you there more reliably.
Yes, flying from point A to point B is a challenge these days. Particularly if you are connecting through a hub or traveling to or from one. Arm yourself with phone numbers.
Are you a frequent flier member of the airline you are taking? If not, join right away and you usually can do it online. If you are a member, good. Why? Because most frequent flier programs have dedicated phone numbers you can use to access a reservations agent. Get that phone number and access to those agents.
If you are flying internationally, get the phone number of the alliance (OneWorld, Star Alliance, SkyTeam, etc) your airline belongs to. Frequently member airlines will cooperate with you when you are having trouble with a connection.
Look for codeshare partners on flights you want to save money. For instance, when I was traveling to Moscow from Dallas, I saved over $200 by calling Finnair and booking the flight through them instead of American Airlines and the very same route using the same flights on American Airlines flight numbers was really that much more. In addition, because I was flying as a Finnair passenger, I got priority boarding *and* frequent flier points on American Airlines. I should also mention that when I called Finnair, I got a nice reservations agent immediately instead of an automated system hopelessly trying to recognize my voice. Sweet, huh?
When you are going to be in a foreign city, leave prepared with the booking phone number of your airline in that city. Even better, travel with a cell phone that you can access service globally if possible. That way, when you are stuck at London Heathrow with 20,000 other passengers, you can call the US and get a hold of your airline there. I use ATT (Cingular) service myself which is a GSM system that is compatible with most systems around the world. Yes, the fee to call the US can be a bit expensive but it is a lot cheaper than battling your way through problems locally . . . sometimes.
Consider traveling to a different hub than London or Amsterdam. The truth is, it takes about the same time to fly from DFW to Frankfurt and then on to another destination in Europe as it does to fly to London and use their preferred partners. There are plenty of hubs to choose from such as Frankfurt, Munich, Madrid, Brussells, Rome, Zurich and many others. Try a foreign airline that offers Frequent Flier points on your plan but which uses a less crowded hub to connect their traffic through.
That same strategy can be used domestically as well. Look for less congested hubs. Instead of Chicago or Detroit, consider St. Louis or Cleveland. Instead of Atlanta, consider Charlotte. And choose on the basis of seasonal weather. You do *not* want to fly into New York City in the summer unless it is your final destination for instance. Likewise, Chicago and Detroit can often be affected by weather in the oasisnaturalcleaning.com summer. DFW or Atlanta airport hubs can often be much more reliable because they eperience drier weather in the middle of the summer.
Check Weather.Com and see what the seasonal weather is like at your choice of hubs and plan accordingly. It usually doesn’t cost more to go through a different hub and you can save a great deal of time connecting through a hub that is slightly out of the way as opposed to trying to connect through a busy, weather affected hub. It isn’t a guarantee against problems but it does greatly mitigate against potential problems.
