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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In the Cleveland Plain Dealer, Continental President Jeff Smisek was quotes as saying that Continental may re-visit the idea of merging with United Airlines in the future.  The story can be read HERE.

Continental has experienced a rather rough dip in unit revenues over the past year even compared to other US legacy airlines.  The airline was much more devoted to the business traveler (particularly in the international segment) and the decline in business travel has hurt it more than some other airlines.   A merger with another airline could help Continental diversify its revenue sources and experience synergies much like the Delta/Northwest merger appears to be providing that mating.   To date, Delta / Northwest has not been profitable but it does appear to be weathering the economic recession in the airline industry quite well and its new found flexibility with both equipment and passengers seems to have benefited the airline.

However, I didn’t like the idea of Continental merging with United in 2008 and I don’t like it now.  United is saddled with a lot of debt, an angry labor pool and aging aircraft.  Continental, on the other hand, is much the opposite.   While Continental has a well trained management corps and their own employees are much happier, I don’t see what United brings to the table that they can’t already develop on their own over time.   The Denver hub would be of little value to Continental and is already a battleground between two LCC carriers and United.   United does have the better system over the Pacific but lacks the aircraft to modernize it while Continental has the better product for Pacific travel, it doesn’t have the spare equipment to spruce up those routes to compete against the likes of Delta/Northwest. 

To me, it seems that Continental would benefit more from smaller, more tactical mergers that dovetail more closely with their service and aircraft fleet.  Alaska Airlines is one partner that, in my opinion, would be an excellent fit for Continental.  It would give them an West Coast route structure, a fleet that meshes (mostly) with Continental’s, an employee group already accustomed to be treated well and a management corps that is doing remarkably well and which could augment Continental’s own management leadership nicely.    Even more important, Alaska Airlines is profitable at present.

The next best strategy for Continental is to start planning for the future.  They have a number of new long haul aircraft due over the next 4 years and despite how everyone feels in the airline world, this recession will be over someday in the future.  Continental could capitalize on their strengths and aircraft fleet by targeting United Airlines and its Pacific destinations for 2011 or 2012.  By selectively targeting United and US Airways, Continental could fair very well without taking on all the baggage any other legacy airline has to offer it. 

Joining up with United Airlines really doesn’t offer Continental much that it can’t already achieve except the Chicago hub for both domestic and international flying.  Continental’s Cleveland hub is a very distant second to United’s Chicago but I wonder if having that kind of market dominance in Chicago is worth the trouble of bad labor relations, old aircraft fleets and a group of executives that have shown themselves to be mediocre in everything they execute.   In fact, by joining the Star Alliance, I suspect that Continental will reap almost as much benefit with little trouble.

Continental’s new home in the Star Alliance is interesting to me in that Continental’s product seems to much more closely match that of other Star Alliance partners (Lufthansa, Singapore Airlines, Thai, Air Canada, Air New Zealand) than either existing US based Star Alliance member aka United Airlines and US Airways.   I suspect that member airlines will be quite willing to book more traffic on Continental for US domestic destinations than on United or US Airways.   If anything, US Airways becomes the odd man out and should begin considering finding a new home.  I’d suggest OneWorld.   Nonetheless, I’ll be monitoring Continental’s experiences in the Star Alliance for the next year as I do think it’ll make a positive difference in their fortunes.

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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.

Filed under: Airline Fleets, Airline Service by ajax
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The Cranky Flier had a post today discussing Continental’s new moves in LAX which include new flights to Hawaii.   Continental will have an all 737 base in the Los Angeles area with two 737’s serving new flights from Orange County to Hawaii.  It made me think.

Back in the pre-regulatory days, flights from the mainland US to Hawaii were served by large aircraft such as the 707, DC-8 and, later, the 747, DC-10, L-1011 and even the 767.  The routes allowed airlines to serve huge numbers of customers with large aircraft and make money.  Braniff International had the franchise for Dallas to Honolulu in the 1970’s and served it with a 747 and an amazing 16 hours per day utilization.  

Then deregulation came and airlines slowly began to develop new routes.  It was no longer necessary to fly to a “gateway” city to catch a flight to Hawaii.  More and more cities found themselves being served with those routes to Hawaii.  Again, Braniff International, at one time, had a 747 flight from Portland, OR to Hawaii.  (It carried little traffic, however.)

There was some consolidation after airlines learned that not everyone in a particular city was dying to fly to Hawaii.  But the big change for Hawaii has been ETOPS or twin engine flights overseas.   This allowed airlines to serve smaller markets with aircraft both capable of the loads as well as the distance.  The truth is, when the airlines don’t have to feed 150 passengers a day to a gateway city but can fly them directly, they make more money.    20 years ago, I would have chuckled if someone told me that 737-700 aircraft would fly to Hawaii from the mainland. 

Boeing and Airbus have different views for the roles of widebody, large capacity aircraft.  10 years ago, Boeing forecast that the market would continue to fracture with more and more direct routes being employed as opposed to large capacity hub to hub flying.   Airbus, however, believed that the crowded skies would force more large capacity hub to hub flying onto the airlines.   It turns out that Boeing was more right. 

The markets drive these changes and when an airlines can make more pure profit using right sized aircraft flying direct, they will.  Yes, the legacy airlines of the US (and other parts of the world) continue to follow a hub and spoke model primarily but they’re all learning that more direct flying where the loads fully justify it is a good and profitable thing.

Accordingly, this is where I think Boeing continues to have a winning strategy with its 787/777 product line.  Yes, there are a few airlines capable of filling an A-380 and those airlines will make money from using that aircraft.  But as more and more nations open up their skies to more competition, that is going to change.   Having the right aircraft for the right route will be key to a manufacturer’s success and Boeing seems to have a better feel for the world market whereas Airbus seems more plugged into the Euro/Middle East markets they already do so well in. 

I’m no longer sure there is a real place for the new 747-8 aircraft.  Boeing’s 777-300 is just as capable in almost every case and carries a massive number of passengers without being so big that it adds risk during seasonal low periods.  The same is true for the 777-200. 

And what happens when aircraft such as the 787 family begin flying?  This family is roughly 767-sized in capacity but its range is far greater and that means even more markets can be accessed via long haul direct flying.   An international airline can probably make more money (through passengers *and* cargo) using the 787 and 777 families for more direct flying with aircraft that are “right sized” for the markets than they can using much of the Airbus family.

Airbus has one aircraft model suitable for this right now.  The A-330.  the A-340 is essentially dead since it under performs against the 777 in virtually any mission.  The A-330 is right sized for a number of the current markets and many more of the future markets.   The A-380 is suitable for only a few markets and those are already dwindling for some airlines.  For instance, QANTAS has introduced the A-380 on their routes to the US.  However, with a new Open Skies treaty between the two countries, there are also new entrants to the market like V Australia and Delta who are vying for customers with United and QANTAS very competively.  Those airlines understand that it will take a while to develop their routes and build relationships with airlines in both countries to feed traffic but it will happen.  As that traffic shifts from what was originally two airlines (QANTAS and United) to four airlines (QANTAS, United plus V Australia and Delta), what happens to each airlines’ loads? 

It’s notable that QANTAS flies the 747 and A380 to the US and United flies the 747 exclusively.  The new entrants are using the 777-300 and 777-200 for their flights.    The 787 and it’s longer range capabilities will quite possibly fracture that market even more by making it possible to fly from the interior of the US to Australia instead of having to use a west coast gateway city.  At that point, I don’t know that QANTAS has a use for very many A380s or 747s and, additionally, they don’t have any right sized aircraft for the route(s) until they start receiving their 787s which are late and somewhat deferred. 

The Airbus A350 is capable of competing on many 777 routes and while it does have slightly lower trip costs vs the 777, it also has less revenue capabilty because it can’t haul as much cargo on the same missions. 

The world’s airline routes are going to continue to expand internationally and at a far greater rate than traffic grows between any two nations.  Having the right equipment for the right moment is going to be key for any international airlines survival.  Those who don’t plan for it now and have it arriving in the next 5 to 10 years are going to wither to a slow death.

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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 is reporting that Alaska Airlines has announced that it will begin charging a 1st bag checked fee on July 7th.  This announcement comes after reporting more losses for this past quarter. 

I remain adamantly against the 1st bag checked fees being charged but must admit that if an airline was going to do one, it should do one in the manner of Alaska Airlines.  Alaska Airlines is going to offer a guarantee that your bag will be at the carousel within 25 minutes of arrival or you receive $25 or 2500 frequent flier points. 

This allows Alaska Airlines to compete better against legacy airlines by bringing their bag fees inline with the rest of them but offer greater value in the process.  This is a guarantee that I suspect will net a real response for Alaska.   No other bag check fee offers such a guarantee at present.  To the contrary, all other airlines charging such fees continue to do so in light of rather severe delays and losses for baggage. 

This addition also finds Southwest Airlines, last of the real majors and borderline legacy airline, the lone standout for baggage fees.  Gary Kelly, CEO of SWA, was even badgered by financial analysts during a recent conference call to discuss the most recent quarterly reports to consider adding such fees.  Kelly has steadfastly refused so far claiming that Southwest sees this move as being a strong negative among its customer base.  I actually agree since their customers remain some of the most price sensitive in the market.

It also stands in contrast to Delta Airlines’ recent announcement of a $50 first bag checked fee for international flights.   A move that I predict will ultimately be rescinded due to competition from both US and foreign based international carriers.

The question is whether or not other airlines currently charging such fees will be willing to offer similar guarantees.  Since so few compete with Alaska Airlines right now, I suspect it will be resisted as competition.  However, I also believe that one or more legacy airlines in the US will now begin considering the introduction of such a guarantee in order to bolster their position against their competitors.  My pick?  Delta Airlines or Continental Airlines.

Delta has an executive team that is  well aware that the a la carte pricing model is successful but they are also the most cognizant of presenting real value for their product.  Continental Airlines could steal a lot of press and thunder by making such a guarantee and it would also align them more close to Alaska Airlines, an existing Continental code share partner.

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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 CrankyFlier and the Delta blog have both alerted me to some new features coming on board with Delta.  Delta has added the ability to see status on upgrades and standby lists for flights to their main website and they intend to add these features very shortly to their mobile website for PDA Phone users.

Adding the ability to make these checks via cell phone or phone/PDA is a huge advancement for airlines and I suspect we’ll see more of these feature additions to most mainline airlines over the next year. 

For those of you interested in accessing Delta’s mobile site, you can go HERE for instructions.  I’ve already blogged about Continental Airlines’ system HERE.

Filed under: Airline News, Airline Service, Travel Hints by ajax
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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.

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Mitchell who?  Only airline aficianados, residents of MIlwaukee and airline employees generally know that Milwaukee’s airport is General Mitchell International Airport.  Named after General Billy Mitchell.

According to USA Today’s Today in the Sky Blog, they’ve launched a new mobile-friendly website at:  http://mobile.mitchellairport.com/

This is a good idea and one that I hope many other airports will follow.  Frankly, most airlines could stand to have a mobile friendly website.  While some claim they do, the only truly mobile friendly site I’ve seen so far is Continental’s. 

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The Dallas Morning News Aviation Biz Blog wrote THIS post yesterday about Continental’s business class passenger traffic being down.  Significantly, there is an abrupt drop in trans-Atlantic travel.  Continental has a reputation for being an excellent business class product and has a very loyal group of customers for their trans-Atlantic destinations.  I am, however, unsurprised at that sharp decline.  That is a cost that businesses address very rapidly in situations involving declining revenues and/or profits. 

The company I work for, a Fortune 500 DoD contractor as well as an aviation industry supplier, mandated coach travel for business trips overseas back in October.  In addition, all travel (including domestic) must be approved at the director level.   I must say that those rules have had a noticeable effect too.   Many people known for being routinely gone on business trips are now routinely in their office doing work. 

It has also imposed some hardships.  I have one co-worker who had to travel to Finland on business last Saturday.  He had to travel to New York City, connect to a flight to Helsinki, connect to another flight to a very northern town in Finland and then travel by car for 2 hours to the destination.  Now, ordinarily I do not approve of the rather lavish use of busines class even on transcontinental flights but I would have given him the business class seat on that trip.

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The Cranky Flier made this post to his blog last week. In short, CF decried a woman’s New York Times Op-Ed on the demise of the glory days of travel which she apparently experienced as a flight attendant for TWA.   The Cranky Flier reckons that the changes that deregulation has brought on are what has made air travel affordable and to bring back the high service given in the 50’s, 60’s and early 70’s would deny that access to most of us.   Quite honestly, I do agree with him but I think a point was missed in Ann Hood’s Op Ed as well.

I’m pretty sure that Ms. Hood was decrying the loss of the great meals, comforting flight attendants and more correct behaviour but I think what prompted her Op Ed was actually a perceived lack of service on *any* level by airlines today.  I don’t think anyone realistically expects air travel to include 3 choices of meals, pillows and blankets and free cocktails anymore.  However, what causes people to continue to get upset is the generally poor nature of any service provided by most airlines.

I experienced that service as an airline brat from the late 1960’s to the early 1980’s and it really was pretty remarkable in many respects.  However, I don’t miss the Chateau Briand on Braniff flights between Dallas and Portland and I really don’t seem to miss the first class seat or the pillows or drinks.  OK, I do miss the seats but that is because I’m a 6’2″ man weighing 260lbs with long legs. 

What drives this perceived lack of service is airlines not keeping promises made when you buy a ticket.  Those promises are outlined by airline advertising which is quite good at showing a relaxing customer on an airplane enjoying a drink as he or she flies to their destination with the expectation that the airplane will be kept at comfortable temperature and will arrive on time.

Let’s look at what an airline passenger might enjoy from the time they decide to book a flight to the time they arrive back home from their trip.   First, they must book their flight online.  Most people not only don’t mind this, they prefer it these days.  However, none of us are amused when we attempt to book a flight online only to find the website overloaded from a fare sale or network disruption caused by weather.   If the customer tries to phone the airline to book they’ll be faced with long phone queues, surly reservations agents and the threat that their airline ticket is now going to cost them a bit more for booking via phone.

The customer is gratified at being able to check in early through the web but when they arrive at the airport they discover that checking in their suitcase requires them to stand in another long line in order that they might essentially check-in a second time so they can check a bag.  Even if they only have one bag, they’ll have to pay a fee to check it unless they are a road warrior with some sort of privileged status with the airlines’ frequent flier clubs.   Then they get to stand in yet another line while watching those same privileged fliers go through an express line with the TSA. 

Once at the gate, they’ll have to work to find an open seat to sit in while waiting for boarding call because aircraft are flying much more full these days and most gates at most airports aren’t designed to accommodate the loads that many airlines serve on their narrowbody aircraft.   At the boarding call, they get to watch those same privileged fliers board first onto the aircraft (even if they aren’t flying first class that day with their free upgrades they still get to board first) and then wait for their group to be called while some fellow passengers cheat and just board early anyway.  Since most customer service agents at the gate are unwilling to enforce the rules in many cases, these cheaters get away with that move.

If the passenger has a boarding call in the last 1 or 2 groups, they get to discover that all the other passengers have apparently carried their life’s possessions with them and occupied all the overhead luggage space.  If they say anything about the lack of space, some flight attendant will inform them that they might have to gate check their bag or put it under the seat in front of them.  Putting a bag under the seat in front of you hasn’t really been possible for adults since the early 80’s when airlines reduced seat pitch in coach from an accommodating 34 to 38 inches of space down to a tight 30 to 32 inches of space.   So, they put their coat in a crammed overhead bin and hand over their luggage to a surly flight attendant who is annoyed that they now have to catch the attention of ground personnel so the bag can be loaded in the luggage compartment.

Once seated, the passenger waits and waits for departure from the gate which is delayed a few minutes.  Finally after watching their watch for an additional 13 minutes, someone hurriedly closes the door and the pilots get a pushback.  Technically, the flight has left on time at this point.  Only the pushback results in them taxiiing slowly towards the runway where they run into a traffic jam of aircraft waiting to take off because most airports are woefully lacking in the infrastructure to accomodate the number of flights trying to depart at the same time. 

After another delay of 20 minutes, the aircraft takes off.  As it levels off, the surly flight attendants go to work immediately to serve their one beverage service during the 2 hour flight.  Now, the passenger knows that soft drinks (and virtually any other beverage) now costs money so they ask for water when it is their turn and find a surly flight attendant telling them that will be $3 for the half litre bottle of water they offer.   The passengers declines the water and tries to recline their seat only to discover that while the seat may recline, it reclines right into the knees of the passenger behind them who objects loudly. 

Upon arrival at their destination, the passenger collects their things and moves slowly towards the door.  In some cases, they now must wait on the airbridge for their gate checked luggage to be brought up to them and in other instances they must now trudge off to find the baggage carousel to collect their things.  Because these aircraft are flying so full, this amounts to another delay of 20 minutes or more. 

Once they have their baggage, they make their way to the curbside and take out their cell phone to call the person picking them up to tell them they are at the curbside now.  They have to do this because security no longer allows anyone inside the terminal and the airport management is now charging $7 to park in the parking structure for less than an hour to pick up their party.  

Go through that kind of experience each way and it is no wonder that passengers are decrying service from airlines left and right.  If you only experienced half of what I’ve described just now, you’ll loathe and hate the airline you just flew.  Not because you weren’t served a 3 course meal but because the airline who implicitly promised you a safe, relatively pleasant and on time experience didn’t even really pretend to try to deliver that promise. 

What people want is for an airline to be honest in what they’ll provide and to honestly deliver it with the possible exception of extraordinary circumstances.  Oh, there are a few airlines who do deliver on such things and they quite rightly also make a profit.  Southwest, jetBlue and Continental all come to mind as airlines that really do delivery almost every time.  However, for much of the US traveling public, those three airlines aren’t an option nearly as often as they would like. 

Indeed, the situation I just described is almost precisely what I experienced flying Airtran last year from Dallas to New York City.   It’s disappointing at the least and offensive in most respects.   Did I like the ticket price?  Sure.  But if you accurately described the more likely service scenario and then asked if I wanted to pay $50 more to just get where I wanted to go without that scene playing out, I’d happily dive into my wallet and hand over the cash.  

The problem isn’t that we’re addicted to the lowest fares possible.  We’re not.  We, the passengers, are too stupid to realize that the airlines aren’t really going to deliver on those implicit promises.  Like the co-dependent wife who keeps taking back her alcoholic husband, we keep going back to the airlines and expecting a different experience.  The truth is, if we would examine our last service experiences with various airlines and seek a different choice until we found an airline that treated us well, airlines would pay attention. 

Why?  Because it quite literally costs nothing extra to deliver what an airline generally promises today.  jetBlue, in particular, gets that concept and that is the biggest reason why they have succeeded flying from JFK airport in spite of all the known obstacles to flying from that airport.  So does Continental as they have huge hubs at weather delayed airports too but they understand that giving the customer the implicitly promised service leads to greater success on their part.  Southwest promises less service than either of those two airlines but has some of the highest customer satisfaction of any airline because they DO DELIVER ON WHAT THEY DO PROMISE. 

It isn’t the glory days of service that we miss.  It’s the constant disappointment we experience on airlines today that causes us to lament a lack of service.  It simply doesn’t exist for most passengers.  We are treated better, on average, at an inexpensive restaurant where we spend about $9 for for a meal than we are on an airline where we spend $200 or more for a flight.  Most airlines’ attitude is to chastise the passenger for complaining.  That’s the motivator for the glory days.   In the glory days, airlines didn’t act like you should be grateful just to have a seat on their aircraft.  They acted grateful that you chose them to make you trip on.

Filed under: Airline Service, Deregulation 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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It’s always fun to make predictions about the coming year, right?  Of course, I may well review my predictions in December of 2009 and decide against doing it again.

Boeing 787:

This aircraft will finally experience its first flight and I believe it will occur on or about its new scheduled time (early April).  For Boeing, credibility is now at stake and they really do have to begin meeting deadlines.  Financial analysts are becoming too skeptical of the company for comfort and airlines want their airliners.  Boeing does have a reputation for being able to pull itself together and get something done in a crisis and that should serve them here. 

I also believe we’ll see both static airframes begin their tests and new build airframes begin to flow from Boeing in about 6 months.  My prediction?  The 787 will prove to be a very capable aircraft and will meet or exceed its performance promises.

Airbus A380:

Airbus met its revised schedule of delivering 12 A380 airliners in 2008 . . . barely.  Originally it was scheduled to deliver 13 in 2008 and 25 in 2009.  Now Airbus says it will deliver 21 in 2009.  However, it is becoming clear that Airbus is now quickly learning how to build these aircraft and turn them out.  I predict they’ll exceed their 21 goal in 2009 by at least one aircraft.

Boeing and Airbus:

Both aircraft makers will begin to speak about the future of short to medium haul aircraft again.  With milestones for the 787 and A380 being met, I suspect they’ll become more comfortable in speaking of the future of their aircraft lines.  Look for discussions on both the 737 and A320 aircraft families and what interim technologies might be employed to improve their performance.  I suspect we’ll hear about both weight saving materials being adopted as well as the potential of new incremental improvements on existing engines.  Particularly the CFM-56 engines used by both makers. 

US Airlines:

First, let’s take a look at my deathwatch candidates.  The sudden and precipitous drop of oil prices allowed each of them to take a breather.  Midwest Airlines, however, continues to speak little, fly only a little and its investors have got to be running out of patience.  I still believe that they’ll ultimately go away.  How they do it is the question.  Rather than bankruptcy, I believe it will either be a sale or as a subsidiary airline of Delta/Northwest with the latter being most unlikely.  Who will they be sold to?  Good question.   Perhaps Airtran will get what they wished for and develop indigestion.

Frontier continues to muddle along but faces rather intense labor strife still.  I think their situation improved not only because oil prices dropped but because United continues to offer some of the worst product in the industry and because Southwest slowed its growth and took a breather.  While I firmly believe United will do nothing to improve its product, I do think Southwest will return to its goal of killing Frontier as a Denver competitor some time in the late spring.   I suspect Frontier will emerge from bankruptcy this year but I also firmly expect them to be out of business or acquired by December of 2009.  Who buys them?  I’ll bet on Jet Blue.  The aircraft fleets are compatible and Jet Blue has to start building a hub somewhere else in order to continue to experience strong growth.  Frontier gives them that chance.  The long shot?  American Airlines.  Why?  Because Frontier is working with AMR’s Sabre Reservations system now. 

United Airlines, my favorite airline to hate.  The Cranky Flier loves to rag on Alitalia and I love to rag on United.  United has lost a tremendous amount of value over the last year and continues to have some of the highest hourly costs of any US airline.   They’ve done nothing to improve labor relations, their service product or their fleet efficiency.  Glenn Tilton is hated by airline pilots but I predict he is goint to be hated by investors before the end of summer.   What happens?  I’m really not sure.  The best thing that could happen is for them to liquidate.  However, I think some airline will see some value there and attempt to buy United and make use of its assets.  Who?  The logical choice is Continental but I believe they’ll hold on to their independent streak.  So my next guess is a US Air / United V 2.0 merger will come about.  Could it work?  I doubt it but Doug Parker (CEO of US Air) wants another merger and United offers hubs he doesn’t have and some aircraft fleet compatibility.   I’ll go “all in” and bet that we see a US Air / United Airlines merger announcement by December of 2009.

Moving on from the death watch, let’s look at other US Airlines for a few minutes.

American Airlines will maintain its status quo but will begin to feel pressure to conclude some union contract negotiations this year as financial analysts begin to view their lack of progress less and less favorably.  CEO Gerard Arpey will begin to feel the heat but barring a large mistake on his part, will retain his position as CEO.  One possibility, however, will be bringing on a potential successor as President of the airline.

Southwest Airlines will also mostly maintain its status quo but I will predict that by late summer its new CEO Gary Kelly will be under fire from both employees and investors for his shotgun approach to growth.  It is beginning to look like it is unplanned and what people most value in Southwest is its ability to form and execute a coherent plan.   There will be no mergers, no real growth and a sinking stock price by December but I think Mr. Kelly will hold onto his position until 2010 barring a major unforeseen development. 

Continental, the best kept secret.  Continental will maintain its status quo with, perhaps, very moderate growth in the international sector while it waits to see what happens domestically.  They’ll enter the Star Alliance (exiting from SkyTeam) but discover it offers little value to them as well.   I don’t think they’ll seek to merge with anyone in the next year but if they did, I’d pick them for going after someone like Alaska Airlines rather than United or US Air. 

Stay tuned for Part II.

Filed under: Airline Fleets, Airline Service, Airports, Death Watch by ajax
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I have a family member who will be flying to the DFW area on December 24th.  She lives in the PDX (Portland, OR) area and it has been snowing for several days now.  A weather forecast check reveals that it might still be snowing there on December 24th, her departure date.

Now, I first inquired as to whether or not the PDX airport ever closes for snow.  It turns out that they do not do so very often.  You see, PDX is nearly at sea level (next to the Columbia River) and it remains pretty warm down there so it’s quite easy to keep the flights moving.  However, this family member lives in the Southwest hills of Portland where the altitude is much higher.  In Portland, it is quite possible for the street conditions to be much worse in the hills than it is down by the river.  In fact, this family member has seen more than enough snow at her altitude that she hasn’t been able to drive her car both because of the snow as well as the icy conditions on steep roads.   PDX Airport has had little or no delays during that same time.

So, she might need a backup plan.  That might be simply taking a cab (most cabs will have chains or traction devices or at least be of sufficient size to navigate the roads safely) or an airport shuttle.   Another backup plan might include having someone drive her to an airport hotel the day before when it is possible to navigate the roads.  The real dilemma, however, is that it may be quite possible for her to be snowed in but for airplanes to continue to take off.  How do you think an airline might treat her non-arrival for the flight? 

Most likely, they may let her change her travel date but with a substantial charge.   She is flying a legacy airline (Continental) and they do charge for changing travel dates and that change is subject to availability *and* the difference in the cost on that leg.  Such a change could quite literally run to several hundred dollars more.

Not many people are faced with such a situation around the country.  At least few do in most major cities.  Yet, watching the weather and having a backup plan can save you hundreds of dollars too.  Airlines don’t have a lot of sympathy for the reason of your delays.   Their outlook is most likely to be determined on whether or not they could take off, not how the weather might be affecting your ability to get to the airport.  Plan ahead and save money.

Filed under: Travel Hints by ajax
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The Dallas Morning News Aviation Blog is reporting that American Airlines plans to test passenger check in via cellphones and PDAs.  Similar to Continental’s Cellphone / PDA  boarding pass program currently available in several Continental cities now, AA will first test their program in Chicago and then at John Wayne International and Los Angeles International airports next. 

Passengers will be able to receive a 2D barcode that will permit passengers to clear through TSA security and board the aircraft.  The limited availability of this does suggest, however, that passengers will still be printing and carrying paper boarding passes until these systems dominate airports.

Filed under: Airline News by ajax
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1)  Robert Forman Six, legendary CEO of Continental Airlines, once had a Wild West Fast Draw team called “The Six Guns”.  Made up entirely of Continental management, these men were genuine “fast draw” artists with western revolvers.  Bob Six was a “fanner” and unlike most fanners, he was particularly accurate.  One other team member was the future President and CEO of Braniff International:  Harding Lawrence.

2)  American Airlines was once owned and controlled by E. L. Cord who owned the Cord, Auburn and Dusenberg automobile brands.  It was E. L. Cord who elevated a young accountant in his late 20’s to the presidency of American Airlines.   That man was Cyrus Rowlett Smith, known universally as C.R. Smith and who lead American Airlines from 1934 to 1968 and then again from 1973 to 1974.  Mr. Smith is buried in the Arlington National Cemetery because he served in the US Army during World War II and reached the rank of Major General before leaving the service to return to American Airlines.

3) Most people, even aviation enthusiasts, believe that the second commercial jetliner to be built was the Boeing 707.  In truth, it was the Avro C102 Jetliner built in Canada.  The C102 was introduced just two weeks after the DeHaviland Comet in 1949 and years before the Boeing Model 367-80 prototype jetliner.   Resembling the DeHaviland Comet with 2 jet engines contained within each wing, it actually flew faster than the Comet and carrying about 50 passengers, it was ideally suited to short and intermediate routes in the U.S.   The plane was never built because the Canadian government ordered Avro to concentrate all their resources on the military jet interceptor, the CF-100.  No examples were ever preserved although the nose section of the prototype was saved and given to the Canada Aviation Museum in Ottawa.

Filed under: Trivia by ajax
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A fair fare would probably be identified by most people as an air fare that accounts for the true costs of flying from point A to point B non-stop using the right aircraft to supply the capacity.  As a matter of fact, that was what the Civil Aeronautics Board tried to adjudicate when setting fares. 

Now, such a model might sound familiar.  It sounds like what LCC carriers such as Southwest Airlines and Airtran do.  In many sense, yes it is.   Legacy carriers, focused on hubs, hurt themselves with those hubs every time they carry a connecting passenger.   The hub and spoke system demands that they carry more passengers a farther distance using more resources and economies of scale no longer allow them to make a profit doing so. 

Let’s use as an example travel from Midland / Odessa to Albuquerque.   You have 3 basic choices for travel in this scenario.  You can fly Southwest Airlines non-stop for about $260 round trip or you can choose another carrier for a non-direct, connecting route that starts at about $550 round trip.   Another carrier might be American Airlines, Continental Airlines or Delta Airlines. 

If you choose American Airlines, you’ll fly EAST to DFW and then WEST again to ABQ and it will take  . . . wait for it . . . from 4.5 to 6.5 hours to complete your travel.  Since you are connecting via DFW, you’ll be making two take-offs and two landings and one of those landings (remember, part of an airline’s cost is a landing fee) will be at a major hub airport.  Take offs are expensive too.  They are the part of the flight that consumes the most fuel so two take-offs is bad.

If you fly Continental Airlines, you’ll connect through IAH (Houston) and the economics are the same but the distance flown is even greater.   If you fly Delta, you’ll first fly to Houston and then to Dallas and then to ABQ and your price will be in excess of $1000 round trip.  By the way, your total travel time using Delta will be over 10 hours.

Now, if American Airlines or Continental Airlines (let’s just leave Delta out of this because such a scenario is absurd) want to compete for the passengers traveling from Odessa to Albuquerque, they have to offer a fare that is somewhat competitive.  If they do, they’ll come at least close to matching Southwest’s fare of about $300 and that means that their costs are higher and they make less profit or no profit.   Since Southwest has the lowest costs, they get to set the price. 

Now, some people such as Robert Crandall advocate re-regulation of fares in some form.  In a speech to the Wings Club in June 2008, Mr. Crandall offered that this might take the form of mandating a “minimum fare” that is the sum of “locals”.   What he suggests is that a fare between two cities that connects via a hub should be the sum of the fare(s) between Point A to Point B (a hub) and Point B (a hub still) to Point C (the final destination.  In the alternative, he suggests that flights that connect via a hub be required to have a “connection” charge.  His goal is to remove any incentives airlines might have at present for operating a hub.  It becomes officially un-economic to fly that route via a hub.

Quite honestly, I find that a poor solution since he proposes to disrupt the systems of the very airlines that his solution purports to help in the long term.  It disrupts a 30 year institution among legacy carriers and assumes the staff and leadership who have operated in such a manner to be able to adjust to a new model that they have no experience with.  It is, at best, a very awkward solution to the problem and only addresses revenues (once again) instead of the whole equation.  Even more important, it is hard to imagine the political will required for such a change.

No doubt the adjustments have to be made and I would suggest that might need to take the form of actually allowing a large legacy carrier to go out of business (which then removes some barriers to entry for other, more efficient carriers) or you have to find a way to reasonably deregulate costs so that airlines no longer must use hubs to fight for their very existence.  Those costs are principally labor.  The latter solution is better (both in the short and long terms) because it doesn’t necessarily involve massive unemployment or relocation for employees. 

An airline needs to be able to efficiently locate staff at various “base” cities in a way in which costs are not concentrated in one particular city because it is merely a popular place to live.  You don’t want all of your high cost employees (i.e. the senior staff) to locate themselves in Miami where much of your traffic might be low yield leisure travel.   Second, an airline needs to be able to competitively bid for staff on an open market.   A seniority system as used by airline unions ties staff to one airline and forces the airline to “wait out” their term of employment (as much as 40 years) until they can hire new, lower cost staff to fill a particular position.  Further, it denies them access to qualified personnel for expansion because staff won’t leave another airline for a new job because they don’t want to start out at the bottom of the seniority list.

If we deregulated (by legislation) the seniority system in airlines as a first start, airlines could suddenly re-allocate labor and gain more productivity and reduce their costs on routes where necessary.   For a first round, you could even leave in a seniority system for earning pay and determining furloughs but just remove the seniority system as it pertains to bidding for line routes and it would allow the airline to locate their labor (by cost) where they most needed it and gain more productivity.  That change alone might well serve to offer legacy carriers a legitimate opportunity to earn a profit regularly (with all other things being operated effectively).  It would at least be a good first step in trying to solve the problem.

Filed under: Deregulation, Trivia by ajax
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My brother brought this site to my attention yesterday.  It is Continental Airlines’ PDA website and it has some handy features in a simplified format that make checking reservations and flight status, for instance, very easy.

http://pda.continental.com

Every airline should make it this easy.

Filed under: Travel Hints by ajax
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The Dallas Morning News had This Story this morning.  It seems that Continental Airlines has found itself unable to resist charging a fee ($15) for the first piece of luggage to be checked.  It was encouraging to me that they had resisted this up to now and it is disappointing to see them join the band wagon.  No doubt the argument is that they are leaving money on the table by not charging this fee.  This also changes my mind some on the idea that someone will break away from this pattern among the legacy carriers.  These fees may be around for a lot longer than I originally thought.

Filed under: Airline News, Airline Service by ajax
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