What if you have to re-schedule your travel while in the middle of it?  Any regular flier dreads any changes to their flight schedules before leaving on their trip but needing to make a change in the middle of a trip is positively terrifying.

But should it be?  Perhaps not.  Legacy airlines are charging exorbitant fees to change flights with some reaching $150 just for the privilege of ringing the airline and asking to return a day later or two days earlier.   On American Airlines (and most legacy airlines are similar), if you change your ticket, you’ll be liable for the new one way fare plus a change fee ($150 in most cases for domestic travel) which, if you bought a non-refundable advance fare, could be exorbitant.    But you do you have options if you are willing to work a bit.

Recently, a friend traveled to the Northeastern US for Thanksgiving.  While visiting family, one of his parents was injured and he decided he should stay over a while longer to help out.  Changing his ticket cost him a small fortune and, unfortunately, he didn’t think to look outside the box.   If he had abandoned that ticket and simply shopped for a new ticket on Airtran, jetBlue or even Southwest Airlines, he would have saved hundreds of dollars.  Ironically, there were sudden last minute fare sales for immediate travel instituted on the very day he chose re-ticket.  

Flexibility, as always, is the key.  Yes, you may have to accept 1 or more connections or even explore ticketing on two different airlines but the savings is often far greater than what your time is worth.  If you feel intimdated by having to do battle with the airlines or pressured by the need to resolve the issue quickly, I highly recommend trying the Cranky Concierge service that I’ve blogged about HERE.    Airline geeks are creative thinkers and the fee you’ll pay Cranky for thinking for you will be paid for in huge savings in most cases.    What could take you 3 or 4 hours to explore (even if you’re relatively sophisticated at searching for airline fares) can be solved by someone like him in a matter of an hour or less in many cases.

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A couple of weeks ago I wrote about Airtran’s decision to enter the Milwaukee – Dallas / Ft. Worth market using Skywest Airlines.  That post is HERE.

I noted that American Airlines has virtually owned this market with Midwest also having a nice chunk and AA hasn’t really had much in the way of competition for that route.  Well, the American Airlines of old has responded.  According to the Airline Biz Blog, AA is adding flights to that route using American Eagle and those flights match up closely to Airtran’s announced times.  No one should be too surprised that AA has responded this way since it’s been their strategy to flood new competition with capacity and frequency and to capitalize on their hub connections. 

Will it work?  Many would give AA the advantage in this battle because they do have a tremendous number of connections through Dallas.  The problem is, my sense is that the main part of this route is traffic that originates and ends at those two cities.   I’m not sure there is a whole lot of connecting traffic.  Certainly there is some. 

However, American Airlines has kind of abused Milwaukee for several years charging very high fares for that route and Midwest has never challenged them much instead choosing to enjoy an uneasy level of detente.  Now we see Midwest, Airtran, American Airlines and, indirectly, Southwest Airlines in this market.  Interesting. 

The next move is up to Airtran.  If they keep Skywest aircraft (50 seat CRJ-200)on this route and don’t upgrade it to their own aircraft, I suspect American Airlines will win this fight.  If Airtran chooses to move their B717 or even their B737 (I suspect the former is a better fit) on to the route, I think American Airlines might just see their traffic erode badly.  Milwaukee to Dallas consumers are accustomed to the B717 and, I think, would enjoy the relative comfort and opportunity to upgrade to Business Class (cheap and easy to do on Airtran). 

Midwest is the unknown.  Frankly, they are using their Embraer E-170 aircraft (76 seats, all coach) on this route now and while it is certainly better than American Eagle’s ERJ-145s (50 seats, cramped coach), they still aren’t what those customers are accustomed to enjoying on that route.   Until less than a year ago, Midwest flew very comfortable 717 aircraft that included both a comfortable business class as well as a comfortable coach seat.  Airtran can offer that now.

Would AA add MD-80 or B737 aircraft to the route?  No, they don’t have aircraft available and the best they could do is, perhaps, a CRJ-700 via American Eagle.  However, those aircraft are already very busy on other routes. 

American called Airtrans’ bluff and even raised the stakes, so to speak.  American Airlines is not in the habit of giving up either so we can expect that they’ll keep these frequencies (and the lower prices) as long as they think they can to preserve the market share.    Right now, they are offering a matching $89 fare (each way) for advance purchase.  However, their remaining economy fares are $678 and $863 each way (there is a First Class fare for over $1700 each way but which requires a connection to someplace like Chicago so you can fly on a mainline aircraft).   I think we see where Airtran can offer real value here. 

So, we know two things.  First, it is up to Airtran to make another move or accept the status quo.  Second, there is way too much competition going on for Milwaukee traffic.  Some airline will have to quit.

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Michael O’Leary, CEO of Ryanair in Europe has been demanding a new deal for up to 200 Boeing 737 aircraft between 2013 and 2016 according to Reuters.  Keep in mind that up to 200 aircraft likely means a firm order for between 50 and 100 aircraft with options for more.   Boeing, on the other hand, has so far refused to negotiate what is by all accounts a rock bottom deal on their 737.   More amusing is that Airbus has so far refused to offer a better deal on their aircraft since they’re already familiar with Mr. O’Leary’s tactics when it comes to negotiating.  He likes to play one manufacturer off another.

There are likely several things at play here.  First, Ryanair has often made a profit by “turning” their aircraft rapidly and selling them for a profit to other, smaller players.  A situation that has no doubt irritated Boeing as they are looking to sell to users, not distributors.  The original pricing for Ryanair was negotiated at a time when commercial aircraft sales for the industry and Boeing in particular were pretty flat and there is no doubt that Ryanair offered a serious opportunity for cash flow at a time when Boeing was in need of filling slots in its delivery schedule.

Not so much anymore.  Boeing has a health backlog of orders and many of them for airlines who will pay more per aircraft and be happy to receive their 737s early.  American Airlines has continued to up its orders for the 737 in light of the fact that no new next generation 737 replacement is due anytime soon from either Airbus or Boeing.   Other airlines are likely to do the same over the next year or two.  There is no incentive for Boeing to make an even better price to Ryanair.

And I think Mr. O’Leary knows it.  But by making his threats and going public with them, he has begun to set an argument for why Ryanair will likely do a couple of things in the next few years.  One will be slowing their growth.  The truth is, growth opportunities for them in their market(s) are becoming few and far between.  Second, they really can’t continue to “flip” aircraft in the next few years as there are plenty of other sources developing  for second hand NG 737 aircraft.  Slowing their purchases will give them a public rationale for slowing growth and reduced profits from sales of the 737. 

I also doubt that Mr. O’Leary will distribute money to either his executives (in the form of bonuses) or to his shareholders.  If there is one thing he knows, it is that an airline lives and dies by its cash holdings.   It’s a weapon that I don’t believe he would give up.  Instead, they may choose to invest it.

Mr. O’Leary has publicly spoken about creating a new trans-Atlantic airline in the future.   Whether or not it is just talk, we’ll never know unless he does it.  However, he does need the right kind of aircraft for developing his self-described premium/economy airline for the markets he thinks he can access.  Part of his plan includes flying to secondary airports again in the US to save money.  A plan that, I think, he’ll learn isn’t nearly as feasible as it might be on the European continent.   There are no secondary airports with good transportation to their major market centers.   You can take passengers to Hartford, Connecticut, for instance, but there isn’t a cost effective way to get from there to Boston or NYC. 

However, that doesn’t mean Mr. O’Leary can’t access a number of markets and do so profitably.  He is a master negotiator and there are plenty of US airports that would potentially welcome such an airline.  With lots of cash, reduced capital requirements for the Ryanair fleet and good timing, they can establish such an airline if they can find the right equipment to use. 

And that leads us back to Boeing.  I think Mr. O’Leary recognizes that the 787 might be just the right equipment for such an airline.  Both the 787-8 and 787-9 offer the right kind of efficiency, size and economics for make such a venture a success.  There is no way that he’ll buy second hand aircraft such as the 767 or the A330 for such routes.  Its difficult to find new(ish) aircraft on the used market that are worth purchasing and the A-330 probably is just too big for the routes.  But the 787 potentially offers the right package.  And I wonder if the current bluster about a deal isn’t about getting Boeing “prepped” to do a deal on the 787 with earlier delivery slots at great prices. 

Time will tell.  One thing I’m entirely certain of is that Michael O’Leary doesn’t have nearly as much contempt for Boeing as his bluster indicates.  Both companies have done very well with each other and both understand that its in their interests to find a way to continue to do business.

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Several airlines are implementing surcharges for peak travel days such as American Airlines and Continental Airlines but others too.

This strikes me a bit like the fees for checking the first bag.  In this case, airlines are advertising fares but charging surcharges for those peak days most attractive to the traveler.  It makes me wonder a bit on whether or not taxes are being collected on the surcharges and it makes me wonder if the surcharges aren’t a bit deceptive when it comes to advertising.   

If those surcharges are needed, why not just raise the fare $10 (or whatever the surcharge fee is) for those particular days.   Because then they would have higher fares when being shopped against airlines without surcharges.

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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.

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The Dallas Morning News Airline Biz Blog is reporting that Airtran is arranging for commuter airline SkyWest to fly new routes on behalf of Airtran from Milwaukee, WI to several destinations including Dallas / Fort Worth and Washington D.C.

SkyWest will be using 50 seat Bombardier CRJ-200 aircraft for these flights and that interests me for a few reasons.  Due to long time personal connections to Milwaukee and living in Dallas for the past 40 years, I’ve long monitored what various airlines offer between the two cities.  Strangely, it’s a city pair that does have a lot of traffic but it has never been served very well by any one airline.

I suspect the establishment of this route is really for a few reasons.  One, it allows Airtran to compete with the current “dominant” player on the route which is American Airlines.    American Airlines at one time had as many as 5 frequencies on the route until the current economic decline.  Presently, they are serving it with 3 flights a day using Embraer ERJ-145 aircraft.    The flights haven’t been well served that aircraft because the flight duration exposes a lot of discomfort for the passenger during the 2.5 hour flight.  In addition, it has often been necessary to deny boarding to passengers due to weight and balance issues for making the flight.   The airplane often cannot carry a full load and enough fuel for the flight.

But American’s only real competition for non-stop flights has been Midwest Airlines.   Midwest has flown about 4 frequencies per day using the Boeing 717 and now the Embraer E-190.   Anyone who has flown Midwest on that route knows that that is a very comfortable flight and generally staffed with much nicer people.  Midwest has a loyal following on that route and I suspect Airtran wants to try to eat into it using price. 

Finally, by offering the non-stop flights, Airtran gets to tweak the nose of its newest competitor in Milwaukee, Southwest Airlines.   By starting this route now, Airtran has an opportunity to grow the business and offer a competitive distinction between themselves and Southwest in the Milwaukee market.  Southwest Airlines cannot fly that route as a non-stop yet because of restrictions placed on it due to their using Love Field airport in Dallas instead of DFW. 

Airtran is likely to be very successful on that route because American Airlines has never treated it as anything but an unloved step-child and much of the traffic between the two cities is O&D rather than follow on traffic.   American may retain some passengers for follow-on travel to regional destinations around Texas but I suspect that will be done by using 2 flights a day in the near future. 

In addition, Airtran has managed to endear itself to Milwaukee despite the ugly picture painted about themselves when they were attempting to take over Midwest Airlines.   Locals in Milwaukee like them and have found them to be a real alternative to Midwest Airlines both on price as well as quality. 

I think Airtran will manage to grow this route (as well as the others being served by SkyWest) and ultimately take them over with their Boeing 717 aircraft in the future.    Airtran will likely erode AA’s traffic first and then take over some of Midwest’s loads on price allowing them to ultimately become the dominant player in that city pair.  It’s doable using a CRJ-200 for now and upgradeable to a Boeing 717 pretty quickly in the future.

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American Airlines announced that they will be closing the Kansas City Maintenance Base in about a year.  The maintenance base was begun by TWA and has existed for oer 50 years servicing aircraft that include the Lockheed Constellation, the Boeing 747 and the McDonnel Douglas MD-80.    The Kansas City newspaper has a photo gallery of this base HERE.

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Almost everyone who follows the airline business and the airlines themselves continue to insist that people buy overwhelmingly on price and there is quite a bit of evidence to support that general feeling.    The best example is that among legacy carriers serving a particular non-stop route, when one airlines lowers their price, the other airlines can and do see a drop in their bookings for that route if they don’t match that price.

There is a lot of truth that individual routes can be seen as nearly perfect competitive environments.  Any airline executive worth his salt will tell you that when an airline opens up a city pair, they look upon it as growing another business.  Each route is a “business” to be developed and nurtured and maintained.

Legacy airlines are the masters of being all things to all people.  Low cost carriers are the masters of high frequency/low cost models.  Leisure airlines have learned how to serve market with low frequency but high value.  

But what do most people want?  That isn’t ever as clear as people want to believe.  The dynamics between two cities change over time and adjusting to those changes is essential to maintaining that “business”. 

My father, once a very senior airline executive, told a story to me long ago that I’ve never forgotten.  His airline, Braniff, served the Dallas / NYC route with a daily late afternoon flight that for years was a huge money maker because it was flown primarily by businessmen.  In the mid-1970’s, they noticed that traffic on that route began to erode ever so slightly and even a small erosion worried an airline even back then.   Then he happened to take the flight to do some financial business in NYC on behalf of the airline and he realized the problem.

Business between the two cities had begun to change.  Traditional businessmen such as bankers or leaders of large corporations had continued to fly that flight because their model was to go to NYC the night before, conduct some business until 2 or 3 in the afternoon and then fly home to be in their own homes by mid-evening.   But entrepreneurship had begun to flower and more and more businessmen/entrepreneurs saw that as a waste of time for such a trip.  They wanted to work until late afternoon and fly home as late as possible in order to maximize their time there.

So Braniff added a second flight in the early evening that allowed businessmen to work until 4:30pm, go to the airport and catch the 7:30pm flight home which put them back in Dallas late at night but which met their needs to stay as long as possible to maximize their work.   As a consequence, both flights began to do much better because even the entrepreneurs could recognize that when their work was done, it was time to go home and if it was done at 2pm, they went to the airport and caught the early flight home.  Traditional businessmen began to be expected to be more efficient and when they couldn’t leave at 2pm, they knew they had another option for later in the day.  Braniff began to own that route again.  Frequency was the answer.

I would argue that when two or more airlines “own” a route, service is often going to be the discriminator.  But what form of service will be necessary?  Is it options in seating that allow a traveler to have more legroom?  Is it more frequency?  Is it some form of a meal?  Is it WiFi or video on demand?

For 30 years airlines have worked to harmonize their fleets, reduce the different number of equipment types and flatten their service offerings to the lowest common denominator.  Particularly the legacy airlines.  But for the past 10 years, we’ve seen new airlines offering more segmented choices on each flight and those airlines are the ones who continue to earn a profit, experience growth and satisfy shareholders.

There have been some half hearted experiments with increased choice and segmentation.  Delta had Song airlines offering more entertainment and a brighter, cheerier environment.  United had Ted airlines which was economy oriented.   But I suspect that it wasn’t necessary to change the brand so much as it indicated a need to offer more choice on the aircraft.

I think in the future we’re going to see more choices in seating on airlines.   The low cost only passenger wants price above anything else.  The business traveler needs an economy choice (to satisfy their company’s desire to economize) that offers a little more room.  I think we’ll see different seat pitches offered and different service choices (a la Frontier) offered as well.  This is an area where Frontier has pioneered change and seen positive results.  Same for jetBlue.  Those airlines continue to earn an operating profit and grow.

Legacy airlines are going to have to be more flexible in fleet, fleet configuration and they’ll even have to consider offering things like meals and entertainment.  There already is a move to do this among certain airlines.  Continental is adding LiveTV to their fleet.  Delta/Northwest has recognized that having a varied fleet allows them to “tune” their service to the demands and continue to earn a profit. 

When an airline can adjust capacity on a route by season, month or time of day, it can continue to make money.  When it has just two choices of aircraft to use on a route and both have more capacity than needed, they start to lose money.  (Hello AA.)

I think that one day one legacy airline will have the guts to start advertising in markets that speaks to “real world” experience on their line versus the airline that “owns” the city.   For instance, I think Continental could come into the Dallas market and already argue that yes, you have to connect in Houston to go to NYC but if you do, more often than not you’ll get there in the same time with better service than flying American Airlines who has an untrustworthy on-time record and who treats their passengers to old aircraft and little or no service.   Someone will have the guts to start trying to change the perceived value of travel.

The truth is that there is a great difference between legacy airlines on any two city pairs.  The key is to identify that difference and communicate it to the traveler.  Right now, that really doesn’t happen.   An airline such as Continental shouldn’t attempt to compete with AA on price alone.  They should offer the real differences such as a meal on flights of 3 hours or more, LiveTV, equipment that is as much as 10 years newer or more than AA and a staff that enjoys doing its job.    They should offer incentives for changing airlines and trying them once such as a guaranteed business class seat for the price of AA’s economy seat. 

It will happen in some form.  It has to.  The newer airlines such as Frontier, Airtran, jetBlue and Virgin America have all proved that offering more choice on the aircraft works.  Even Southwest has recognized that it has to offer more choice in order to retain their very valuable business traveler.   What’s more important is that even some passengers who buy on price alone have realized that the incremental extra cost of one or two of those “extras” is worth it once again.

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The Fort Worth Star Telegram’s aviation Blog, Sky Talk, writes about Delta beginning service from Dallas Love Field Airport to its Memphis, TN hub today.   The flights will be flown by Delta’s regional jet provider, Pinnacle Airlines, under the Delta Connection name.    They will start 3 daily flights on July 6 and use CRJ200 aircraft which are exempt under the Wrigth Amendment and Wright Agreement since they have less than 56 seats. 

It’s an interesting move for Delta and I do wonder how they identified that segment being of good potential.  Since it is a Delta hub (ex Northwest Airlines), it can provide connections to a wide variety of destinations but I’m not sure if the destinations are where the typical Dallas business traveler wants to go.

One thing is for sure.  If history is anything to go by, American Airlines may already be re-thinking its withdrawal from Love Field and trying to identify how to answer this challenge to its turf. 

I do wonder whose gates Delta is going to use.  Currently, AA and Continental hold the only usable gates in addition to Southwest’s.   Delta has not identified which gates it will use so far and American Airlines has said it has not negotiated any sub-leases either.  Continental perhaps?

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USA Today’s Today in the Sky Blog has written about American Airlines’ new 737-800.  Except, it isn’t new to the fleet.  AA has had quite a few 737-800 aircraft in the fleet for 10 years now.  What’s new is that they’ve started getting new deliveries and they’ve apparently found a way to reconfigure the aircraft for a total of 160 passengers (incuding Business Class) which is 12 more than their current configuration on the “old” aircraft.

So, how did they do that?  By using new seats and reconfiguring their gallies essentially.  What AA *claims* is that you, the passenger, will have just about as much room (31″ pitch so, no, not really) as what you might experience on a MD-80 aircraft (about 32″ and only a 1 in 5 chance of a middle seat versus a 2 in 6 chance).  Indeed, they suggest that you might be more comfortable with the new seating.

Maybe.  If you are young, slender and somewhat short in stature, I suspect they might be right.  If you are tall, older and heavier, I suspect you’re in for greater discomfort in the real world.   The seats are “slimmer” which means they’re a bit thinner both in their frame construction as well as their padding.  This means that for relatively svelt people, a change isn’t felt but for a man-sized, well, man, you’re probably gonna feel a harder, less comfortable seat.    In addition, the seats are a “cradle” type that is supposed to save the passengers knees behind you.   Maybe, just maybe that will happen.   I continue to call for reclining those 31″ pitch seats to be disabled.  They cause more hostility and problems than they offer in comfort. 

What really incenses me is the photo shown HERE on USA Today’s site.  Why?  Because it shows a svelt flight attendent sitting in an exit row seat.  Yeah, loads of room there.  What I would like to see is a 230lbs business man sitting in a conventional middle seat somewhere else on that aircraft.  Please take two photos: One distance shot and one of his face.  I want to know just how painful that seat is.

Here is an interesting fact:  When American Airlines had their More Room in Coach program going on, their 737-800 aircraft seated just 134 total people.  Now they’ve boosted that to 160 total seats.  I guarantee you that space was not carved out of Business Class so where did they achieve enough room to fit 26 more seats? 

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The Dallas Morning News Aviation Blog is has a story about Continental reporting exceptionall dramatic declines in unit revenues over the past month.  This is, I believe, the third time Continental has reported rapidly declining unit revenues in the past few months. 

At first, one might question what is going on in the industry that shows one legacy airline reporting such poor numbers and there seems to be no similar dire reports from other legacy airlines.  Indeed, most others are meeting expectations (remember that expectations as domestic industry aren’t that high to begin with right now) and yet Continental seems to be struggling.  

After thinking about this for a couple of days, I think I might have realized what is going on here.  First, every airline earns its money from different hubs.  There are very few overlapping airline hubs in the US.  Continental has hubs in Houston, Newark and Cleveland, for instance.  American has their major hubs in Dallas and Chicago.   Delta has major domestic hubs in Atlanta and Salt Lake City.  What this means is that each airline derives a good portion of its revenue in markets where they are dominant and if those markets are doing poorly, they will too.

Now, Continental has Newark and Houston to contend with and both of those areas are large banking and financial centers.  Both are suffering a little bit worse than many in this economy and I suspect that business travel has been reduced dramatically in those areas.  Business class travelers are downgrading to economy and economy fliers just aren’t getting their trips approved at all. 

So far, Chicago and Dallas have weathered this storm a little better than expected and I think both American Airlines and United Airlines are managing to maneuver just enough to continue to meet financial expectations.  Atlanta is also doing just a little bit better as is Minnesota which means Delta continues to have maneuvering room.  Delta is exposed in Detroit, however.  Their subisidiary, Northwest Airlines dominates all of Michigan and industries in that area are being heavily impacted by the economy. 

Continental has made its success story from providing excellent service to business travelers.  It was (and will be again one day) a successful strategy due to focusing on attracting full fare or near full fare passengers and they focused a lot less on chasing the lowest fare passengers.  With economizing being the watchword at every company, I suspect many of the usual passengers are either deferring travel or quite possibly moving it to LCC competitors of Continental. 

The key to Continental’s (and other airline suffering this kind of revenue problem) surviving is being able to weather the crisis while maintaining their superior service.  That becomes doubly difficult with no end in sight for this economic crisis.  However, their management team is extremely capable and very tuned in to the needs of an airline.  If there is a team that can manage this event, it is Continental’s. 

I continue to watch for signs that United is weakening more financially and, so far, there are very few public hints.  This strikes me as odd since United is a bit more exposed than most.  They have a generally less fuel efficient fleet, they are subject to more direct competition from both legacy carriers and LCC carriers at more of their hubs and they have what may well be the most acrimonious relationship with their labor of all the legacy carriers.   It makes me wonder what, if anything, they might be successfully concealing in their financial health. 

American Airlines is reporting numbers that suggest that they are struggling to maintain their cash reserves at this point.  They are, however, taking steps to reduce their costs by cutting their fleet numbers and renewing more of their fleet than originally planned.  However, they too, have bad relationships with their labor organizations.  In fact, every major union at AA is now actively lobbying for the opportunity to move closer to a strike.  There is not one word of any agreement on any contract issue and AA’s strategy appears to be delay, delay, delay.  At some point, you really do have to come to agreement with your unions and get on with other important management issues of the day.

I think Continental will recapture its regular business traveler as things improve.  They do too good a job of taking care of their customers at a competitive price.  Other airlines, however, may discover that their customers have found better options.  After all, if you are going to be abused, why not be abused for the lowest price possible?

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The Dallas Morning News is reporting that American Airlines has decided to close its operations at Dallas’ Love Field airport . . . again.   American has tried a number of different strategies at the airport including the most recent exercise of flying EMB-145 jets from DAL to ORD (Chicago).   By all reports, this latest strategy actually was successful but in a case of winning the battle and losing the war, those flights will now go away.

Why did they go away if successful?  Because they were only successful in a very small way.  AA never had much luck in operating any other flights from Dallas to other destinations including Austin, Kansas City or St. Louis.  They needed more than 6 successful round trip flights a day to make operating at Love Field a worthwhile enterprise.

Notably, AA has apparently signed a new long term lease that keeps keeps their 2 gates at Love Field in their hands.  Why sign a long term lease and then leave?  Because the brokered dissolution of the Wright Amendment gives 16 gates to Southwest and 2 each to American Airlines and Continental.  If AA were to give up those 2 gates, they would likely be snatched up by another low fare carrier to be used to further infiltrate AA’s routes.  My guess is that it is a blocking exercise.  Besides, they are valuable property and may offer AA the opportunity to sub-lease them to other airlines if they don’t use them.

Why didn’t AA stick with the Chicago flights?  Because while those flights were successful, they could only be flown with aircraft that have 56 seats or less (for now.)  That means that the only growth available was more frequency.  Airlines such as AA really can make much more profit by flying more capacity on such a route.  In other words, they could do much better if they were able to use MD-82 or Boeing 737-800 aircraft on the route.  They won’t be able to until 2014.

I would, however, speculate that AA could have made more money on this route using reconfigured CRJ-700 aircraft from American Eagle.  These aircraft could have been reconfigured with a business class and economy section down to 56 seats and probably flown much more profitably.  However, these aircraft probably don’t lend themselves to being reconfigured in such a way.  How do you efficiently place business class seating in an aircraft that is already limited to 2+2 seating in economy?

American is doing what is good for American.  However, what would be better for Dallas is another airline taking over and using those gates for a good purpose.  Yes, even Southwest Airlines could use a little competition these days.  Imagine jetBlue offering Austin / Dallas flights that connect back to the East coast through Austin.  Or how about Airtran connecting through Little Rock or Houston?

In the end, Love Field will not see much if any real competition develop.  Not while 3 very successful and very large airlines control all the gates there.

Filed under: Airline News, Airports by ajax
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Southwest Airlines started service between Minneapolis / St. Paul and Chicago today according to the Minneapolis / St. Paul StarTribune.  The newspaper reports that Southwest managed to kick off the new service with their trademark attention to customers.  Passenger Service Agents even managed to get their first customers to sing a song before boarding.

This marks Southwest’s first of several new routes for this year into new markets.  New York City (La Guardia) and Boston Logan are the next to receive Southwest routes. 

For now, Southwest will be linking MSP to Chicago only but I do foresee them adding routes to other Southwest focus cities such as Denver, St. Louis, Indianapolis or Detroit.  Typically, Northwest Airlines fights back against intruders on their mainstay routes but with the takeover by Delta, one wonders if their is enough attention being paid to the new competition versus integrating the operations.  Other airlines have entered the Chicago / MSP route and left it months later badly bruised from fare wars instituted by the dominant three legacy carriers at the two airports, Northwest Airlines, United and American Airlines.

Filed under: Airline News, Airline Service by ajax
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USA Today’s Today in the Sky Blog is reporting that Richard Branson, billionaire backer of V Australia (Virgin Blue) as well as Virgina Atlantic, Virgin America and Virgin Nigera has pronounced that one of the new or future competitors on the US – Australia routes will have to drop out.  I myself predicted someone would have to fall out in this post HERE.  The difference is that I predicted it would be United or V Australia. 

I agree that United Airlines is probably the most vulnerable on this route system but even United has something that V Australia doesn’t and that’s a network feed.  United can route its considerable network to flights departing for final destinations in Australia and that’s tapping a country (the United States) with a population of over 300 million. 

V Australia, on the other hand, does have the network feed from Virgin Blue but it pales in comparison to QANTAS and it has no firm partners in the United States at present.  (I don’t count a very weak agreement to sell seats on Alaska Airlines from Los Angeles to Seattle.)  Even if V Australia entered into an agreement with its US cousin, Virgin America, it still isn’t tapping into a major network.  Virgin America can feed some traffic from major cities and that’s good but those major cities (New York, Bostin, San Francisco) are exactly where their competitor may be strongest.  United has the San Francisco market, QANTAS and Delta has both NYC and Boston covered. 

QANTAS also has the powerful OneWorld alliance to help as well.  Airlines such as American Airlines help feed it traffic from their networks to destinations in Australia.  V Australia has no such alliance or even a single dominant partner.  Delta, on the other hand, has never flown to Australia but has a huge network in the United States, modern equipment to fly to Australia and a will to do so. 

After 2 to 5 years, I would expect QANTAS and Delta to be the dominant airlines on these routes and potentially the only airlines.  I agree that United may well be the first to go but I don’t think V Australia has that much greater a chance of sticking out to success. 

Filed under: Airline News, Airline Service by ajax
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I received the NetSAAver Fares from American Airlines today.  Sao Paulo, Brazil is on special for just $428 each way.  Now, yes, that is still a lot of money but it’s cheap for the route and this is a great time to visit Brazil. 

The next most interesting destination is Paris, France for $289 each way.  I once flew to Paris, stayed for 50 hours and flew back to Dallas.  It was worth every penny at $600 round trip.  It was actually an unplanned trip.  I bought the ticket and left the next day.  I went for the ’99 to ’00 Millennium New Year’s Eve on the spur of the moment.  Would I do it again?  You bet.  Even without some special event?  Absolutely. 

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I got a new Olympus SP550-UZ camera at Christmas time. With 18x optical zoom, it was a huge improvement over my previous camera, an Olympus C2100-UZ. But after testing it out at DFW at the end of December, I realized I needed just a hair more “oomph” and bought an Olympus TCON-17 1.7x teleconverter. That did it.

Plane spotting at DFW is always a bit boring for long stretches because you get to watch American Airlines’ MD-80 and B737 aircraft land all day long with very few other airlines to break things up. On this visit, I managed to catch the AA PinkRibbon Susan G. Komen Embraer RJ once more. I captured a Sun Country Airlines 737, an Airtran 717 and a Lufthansa A340 all taking off or landing on the far runway from Founder’s Plaza. Previously, they would have been a tiny spec in my camera.

I also saw a hawk standing in the field at the foot of the runway watching both us, the spotters, and the aircraft landing. It seemed like it wondered what the big deal was. One of the DFW fire trucks came by on the service road and goosed his fire pump as he went by much to my surprise. I just happened to be taking a photo of him anyway and got the water spraying out although only close up instead of from far away.

The other catch was a China Airlines Cargo B747-400. We visit a secluded area to shoot from that requires us to drive past the air cargo area on the west side of the airport. As we drove by, we saw this huge aircraft parked and pulled over to take photos. While doing so, I noticed it was buttoned up completely and running its APU and figured it would be taking off soon. It did but took nearly an hour to do so.

We also saw three corporate jets take off one after the other. You can see them HERE, HERE and HERE. Both my wife and I had the odd feeling of almost a race the way they took off and quickly turned south by southeast. About 20 minutes later, my wife guessed it. They were the wealthy taking off for Tampa and the Superbowl. I’m sure she is right. They took off so fast that I was only able to get one good photo of each.

Take a look at this PHOTO.  The aircraft seems to either be coming straight at me or aimed just to the left of me.  In fact, the runway was to the right of me.  The crosswinds for that runway (13R-31L) must have been pretty high today.

One final observation. I’ll be sorry to see the Northwest Airlines livery fade away into Delta. Northwest has, in my opinion, one of the handsomest liveries on a US Airliner and it is a shame that Delta isn’t even retaining some small portion of the logo.

You can view all of the photos HERE.

Filed under: Airplane Spotting by ajax
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There isn’t any industry shaking news right now.  4th quarter / annual financial results are coming out on a variety of airlines but the news is much what you would expect.  Lots of losses, lots of hope for 2009.  So, a few things of interest that are going on but aren’t worth a post of their own.

Airtran

Airtran, interestingly enough, posted its first annual loss since 1999.  What is remarkable to me is that in 10 horrific years in the airline industry, they made a profit until the end of 2008.  That is impressive to me given where they hub from (Atlanta) and who level of competition they experience on almost all of their routes.  You can read more HERE in a USA Today / Associated Press story.

United Airlines

United Airlines posted a rather stunning loss of $1.5 billion (with a “B”) for 2008.  Those losses are a result of both declining revenue *and* being on the wrong side of a lot of fuel hedges.  To a degree, this was already expected.  However, UAL’s unrestricted cash reserves have declined to $2 billion (with a “B”) and while that seems like a lot, it really isn’t.  Yes, the airline industry is in the dumps right now but at some point sooner than later, United needs to earn some money.  Their status quo attitude isn’t helping with that goal.

Virgin Atlantic

The Telegraph newspaper in the UK is carrying THIS rather creative complaint letter from a passenger written to Sir Richard Branson himself.  It’s funny and it points out some flaws that should be addressed.  If for no other reason than humour, it is worth the time to read it.

Southwest Airlines

Southwest Airlines has announced $49 one-way fares between Chicago and its new destination, Minneapolis / St. Paul.  Between Southwest, American Airlines, United Airlines and, most of all, Delta/Northwest Airlines, this is surely going to spark a capacity and fare war between these two cities.   There is no doubt in my mind that the legacy airlines will defend their flights on that route to the utmost.  Most particularly, Delta/Northwest will likely get downright ugly about it and while Southwest does understand the need to spend time growing a new market, they won’t necessarily try to win by wearing down Delta/Northwest with fare sale after fare sale.  If customers don’t embrace Southwest in a reasonable time, that route will get dumped.

Filed under: Airline News by ajax
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American Airlines has a contest titled One Big Million offering one million frequent flier points to those who are AAdvantage Members, register for the contest and purchase one ticket between now and March 5th, 2009. 

http://www.aa.com/onebigmillion/

Look for other contests and bonuses for other frequent flier programs and do register.  Why?  Because it quite literally costs you nothing and could well offer you more points.  Many airlines offer “bonuses” for traveling on certain routes or to certain destinations but you must register for the bonuses BEFORE booking the trip.  One coach trip to Belgium once netted me 21,000 miles total.  Another to Baltimore earned me 7,000 miles total. 

Ordinarily I no longer believe in hunting miles but if airlines offer these kind of bonuses, it really is quite possible to get yourself a domestic ticket in short time even if you are the casual flier.  The trick is, don’t horde the miles, use them instead.

Filed under: Airline News by ajax
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Maybe.  News media yesterday and today have been full of stories about various airline fare sales.  A friend of mine managed to book a business class fare from Raleigh/Durham to NYC for just over $100.  He also booked two round trip tickets on Airtran to Las Vegas (for travel in May) for just $198 / ticket.  American Airlines has sent me not one but two emails in the last 24 hours advertising fares as low as $39 / each way.

Reading over the AA email, that low price of $39 each way is to fly from DFW to Tulsa.  I’m pretty sure that is a fairly small market but let’s give them credit for drawing us in to read the email.   Here is a sample of some of there other teasers:

• Chicago to Detroit:  $43
• San Jose to San Diego:  $49
• Boston to NYC (LGA): $59
• Chicago to Kansas City:  $63
• Dallas to New Orleans:  $64
• Chicago to Orlando:  $78
• Washington D.C. to Miami:  $101
• Atlanta to Dallas:  $104

Now, all of these fares are one-way based on round-trip purchase.  I’m sure that most of the other airlines are advertising similar fares on similar routes with similar restrictions.   The part that interests me is that some of those fares AA is advertising are primarily business routes (DFW to TUL, ORD to DET, ORD to MCI) and those aren’t customarily the routes you discount that much.  Some of the others are to leisure destinations and that makes a bit more sense. 

When there is a fare sale, I like to price DFW to PDX (Portland) because American Airlines dominates this route with non-stops and has exceptionally high fares for those flights.  If those prices have dropped, then I know they’re hurting.  I did so today and AA is proud to offer me a $278 roundtrip (with taxes, $320) which is actually pretty good.  A year ago that fare was being offered for over $400.  But there is a catch.  AA wants me to fly from DFW to LAX,  change planes to either Alaska Airlines or Horizon Airlines, and fly to Portland.  Transit times range from 7 hours to more than 9 hours.   Would I do it for the fare?  Perhaps.  I’d certainly think about it. 

A quick check with Travelocity.Com shows fares for that route at $327 and up and AA advertises the non-stop routing for $378.  The $327 fares on Travelocity are those same AA fares I found at AA.Com so the next non-American Airlines best price is actually Continental Airlines for $356 changing planes in Houston and with approximately the same transit times that AA has through LAX.

Would I go?  Probably not.  Why?  Because the cost to me in vacation time, actual flight costs (more than $40 more than the advertised price once I pay taxes) and the sheer agony of spending about 8 hours making the trip just isn’t worth it.  What would be worth it?  A fare of about $200 to $250 (taxes included) I suspect. 

The point of my analysis is that while those fare teasers are interesting and very attractive, they really aren’t all that good for where most of us want to fly in the next 3 to 4 months.  If you want to fly from DFW to TUL, you’re set.  If you want to fly from DFW to just about anywhere else, the prices really haven’t come down much if at all.  These sales are, I suspect, airlines scrambling around and yelling “Look At Me” but without much substance.  If I were going to shop for a mid to late spring flight, I’d probably wait a few weeks.  The reality of spring / early summer bookings will be more clear to the airlines and then I think you’ll see some real discounting. 

Filed under: Airline News, Travel Hints by ajax
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I want you to imagine waking up at 5:00am on a Monday morning and then being at work by 6:30am.  Once at work, you’ll be climbing into another car and driving 1 hour trips across a busy metropolitan area such as Chicago or Dallas or Los Angeles.  At each stop you’ll have about 5 to 10 minutes to go to the bathroom or to get something to drink or munch on through the day.  You do this from 7:30am until 7:30pm at night. 

Once finished, because you are far away from your home, you get a motel room and go someplace to eat like Chili’s.  You do get to sleep by 10pm (and mind you I just gave you only 2.5 hours to find a motel, get something to eat and then get yourself prepared to sleep which sounds like a lot but really isn’t) but you are in a strange, hard bed and your sleep is disturbed somewhat. 

You get up at 5:00am again, shower and pack and get a ride back to your duty station and climb back into a car to drive from 7:30am to 7:30pm again under the same conditions described above.  Once done, you do get to go home and sleep and arrive home at around 9pm.  You have to eat, get to sleep and, once more, get up at 5:00am to do this routine one more time all day.

How tired are you going to be on that third day of duty?  Almost anyone, physically fit or not, is going to be pretty exhausted.  He or she will be prone to make mistakes in their daily work and will find it difficult to stay awake at the wheel at certain points of the day.  That’s the life of a domestic airline pilot.  It’s really not any different for flight attendants, by the way.   Oh and before we go on, I want to point out that that pilot working those duty hours will actually only be paid for about 8 or 9 of the 12 hours they’ll be working on such a schedule. 

Now, some people might be tempted to say they could or did handle such a schedule and it wasn’t any big deal.  Really?  No big deal?  Well, I’ll agree that many of us have had to work such a fatiguing schedule (including myself during my courier driver days 20 years ago) but let’s not act like it isn’t a big deal.  It is.  Under such situations, most people will make bad mistakes, act irritable towards fellow workers or even customers, they’ll eat poorly and they’ll be prone to falling into micro-sleeps (nodding off for brief moments) during their work. 

Is that who you want flying you from Chicago to Cedar Rapids?  Well, you have probably a 2 in 3 chance that your pilot on such a flight will be just that fatigued.   Think about that for a few moments.

 Earlier in 2008, two pilots (an experienced captain and first officer) fell asleep while flying a go! Airlines (a subsidiary of Mesa Airlines) commuter flight in Hawaii.  The NTSB has released a final report on that incident which can be found HERE.  In short, both the captain and first officer had flown schedules not unsimilar to the scenario I described at the start of this post and both fell victim to fatigue.  While there was no harm suffered from their falling asleep, it is a disturbing development.   Mesa fired both pilots as a result of this incident which, in part, ultimately came to light from their self reporting the problem (as well as the problem being originally identified by ATC when they tried to clear them to their destination.)

It highlights a problem that is growing among pilots over the past 20 years.  Fatigue and work rules to mitigate it are a major subject of many, if not most, union contract negotiations.   Airlines are fighting new work rules as proposed by the FAA in court now.  Pilot unions are refusing to cooperate with work rule variances on many new ultra-long haul routes that have the potential to be major money makers for airlines.   Two years ago, American Airlines bid to fly a route from DFW airport to China and ultimately had to amend their proposal because the pilot’s union refused to give a work rule variance for the 18+ hour flight.  American Airlines lost the bid as a result. 

In Part 2, I’ll discuss the opportunities to make a real change in this problem that could benefit both pilots and airlines. 

Filed under: Airline News, Airline Service, Deregulation by ajax
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