Security here in the United States, particularly after the events of September 11 2001, are a frequent topic in the media and often the target of criticism.  Recently, we’ve seen the introduction of new scanning image machines that can be used to “search” our bodies and invasively at that.  The TSA has ruled that if you decline to enter these machines, you’re now subject to a much more intrusive “pat down” search that seems designed to make entering the scanning image machine pleasant.

The reason people get upset with these security measures is because they are mere theater.  Ask anyone what it is and has been like traveling from Europe to the United States since the 1970’s and particularly since the 1990’s when it comes to security.  It has always been very serious business in Europe and I find it ironic that we dictate security terms to Europe since the truth is that much of what we engage in here wouldn’t meet muster in Europe.

Arguably, the security regimes are much the same now.  The difference is in the not-so-subtle details.  In Europe, those performing security checks are professionals behaving professionally while doing a very professional job.  Anyone who has passed through European security knows exactly what I’m talking about. 

Sadly, here in the United States, we rightly perceive much of our security being performed by people who strike us as the cheapest available for the job and who rarely strike us as being professionals doing a professional job. 

I found myself highly irritated when I was at DFW airport awaiting the arrival of a family member and watched TSA security people do what  could only be described as a bad job routinely.  Clearly someone had told these people that being “cheerful” and “friendly” would help.  First off, we don’t expect security people to be cheerful and friendly.  We really don’t and you won’t find them behaving that way in other places in the world.  We expect them to be professional. 

And not for nothing, “professional” isn’t defined as “macho cop” with a chip on his/her shoulder either.

In the time I spent watching these TSA team members, I noticed that the first woman performing ID checks was looking at the IDs but was NOT looking up at  the passengers faces.  If anything, she appeared intent on detecting a fraudulent ID.   Sadly, she misseed every opportunity to match that ID to a face and do a “gut check” on their intent. 

Next, there were two TSA team members attempting to marshal people’s goods into the x-ray machines and people through the metal detectors.  Well, actually, one of those two was doing that.  That person, a man, was doing a credible job of directing people on what to do to pass through security.  He was, however, again not looking at the faces of anyone he was addressing.  If anything, he appeared to be looking anywhere but at these people.  The other person, a man, spent most of his time flirting with the woman who was running the x-ray machine. 

Which brings us to the woman who was running the x-ray machine.  I have no idea of how you detect suspicious objects in luggage when you’re flirting with anyone.  It would seem to me that focus and attention would be the watchwords when it comes to this duty.   There were two lines and another person watching the other x-ray machine who was not flirting with anyone but who didn’t seem any more interested in focusing on the screen displaying people’s personal items either. 

Finally, there were three more post-metal detector TSA team members who were just talking *loud*.  When I say loud, I mean loud enough for me to clearly understand them from a good 40 to 50 feet away.  They were loud in barking at passengers, they were loud in discussing whether or not to eat at TGI Fridays and they were loud in their instructions to people they had to pat down.

Doesn’t sound very professional, does it?

Then I think about the time I was traveling from Belgium back to my home in the DFW area.  At the screening, the security people found a multi-tool in my briefcase.  A tool that had been in my briefcase since I left and which I had forgotten was in an interior pocket.  Suddenly I was “covered” on both sides by security personnel and escorted away (as I shouted to my wife to just get on the plane) to a secure area.  I was asked why I had the multi-tool and I explained it was literally a tool of my business at that time ( I was a general contractor) and had simply left it in the briefcase foolishly.  I was polite and direct with my response.  They continued to talk to me for another 2 minutes until satisfied I wasn’t a threat.  Then they escorted me back to the front of the airport to box and check in my tool for the flight.  Once done, I was escorted back to the security line where I once again went through all their security including a second pat down. 

Never once was it “macho cop” or “airy friendliness”.  It was entirely serious and professional.  And that, my friends, was in 1998.

That’s why we consider these procedures a joke here in the US.  They are theater rather than professional and even though we aren’t security professionals ourselves, we quickly detect that the people who are supposedly “guarding” us aren’t taking their own jobs seriously.  I am not a security professional and I cannot offer how the procedures could be better.  I can, however, argue that the front line people performing this job aren’tprofessional and its communicated day in and day out.

What’s more, when we hear of these same TSA personnel engaged in theft, intimidation and practical jokes while working, it doesn’t improve our sense that this duty and job are being taken seriously by anyone actually performing the role.  

It comes as no surprise to me that pilots (and other flight crew) are objecting to their treatment in lines.  It comes as no surprise to me that passengers are hostile to the procedures either.  I doubt seriously that anyone would object to these very same procedure *if* they were performed in a serious and professional manner.

But they really aren’t, are they.  Oh, occasionally we see it being done right.  The next time you do see that, notice that no one is arguing or complaining or groaning over the security they’re being asked to endure.  The people doing it are taking it seriously and the people going through it tend to take it seriously at that point too.

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Virgin Atlantic and Sir Richard Branson has hired Deutsch Bank to look at all strategic options available to Virgin Atlantic and that includes what the company is potentially worth.  Virgin Atlantic is already 49% owned by Singapore Airlines and 51% by Sir Richard.  Singapore Airlines has reportedly indicated its dissatisfaction with its investment’s performance in the past.  Branson indicated last May that in light of the industry consolidation taking place, it may no longer be possible for Virgin Atlantic to remain an independent entity.

Some of the questions to be answered is whether or not Virgin is an attractive property to another airline and whether or not there are other airlines out there that might be attractive to Virgin.  Virgin had been intensely interested in purchasing the airline BMI which was ultimately bought by Lufthansa who are heavily engaged in restructuring it back to profitability.

Virgin’s problem is that of no network.  It continues to be a great value to those who wish to fly its long haul flights but it has no “feed” from destinations within Europe (and in particular the UK) to provide passengers for its long haul flights.  In addition, it does not closely cooperate with its cousins at Virgin Blue and Virgin America so that it is not accused of violating laws governing ownership and competitiveness in Australia and the US. 

One has to wonder at this point why Virgin was so against joining an alliance.  They did, at one time, have quite a bit to offer various alliances but they are a property that has already lost quite a bit of shine.  Since only one alliance has substantial penetration in the UK (Oneworld), it’s possible that Star Alliance or Sky Team could still be interested on some level.  The Star Alliance actually feels a bit more like a fit and would potentially put BMI in place to offer that necessary feed to Virgin Atlantic. 

However, this is a case where Virgin really needs to pursue this rather than the alliances.  European partners in those alliances already have the opportunity to operate in the UK as a function of being part of the European Union.  In other words, Virgin needs to sell itself if it goes this route and it can.

Virgin Atlantic is an airline that really may be running out of runway very soon.  This isn’t a move out of desperation but it is a smart move to make on their part as they could benefit from a point of view that isn’t so closely tied to the Virgin hype.

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American Airlines is threatening to stop making their tickets available through Orbitz.  Instead of supply this data through a global distribution system provider, it wants Orbitz (and ultimately companies just like Orbitz) to make a direct connection to AA instead. 

At first glance, this would appear to be much ado about nothing but it isn’t.  When Orbitz and others like them get their data through a GDS, they get all the info and they’re able to display fares with a reasonable amount of transparency and thereby show the most competitive fare(s) available.  If they begin to make direct connections, airlines will suddenly have the ability to control what is fed into systems like Orbitz and Orbitz doesn’t like that.

Orbitz (and the others) are popular with the consumer because they are offering competitive choice and that service product promise is to show the lowest fare currently available.  What if an airline is able to decide that those people will only see somewhat competitive fares on those systems and reserve the best values for display on their own website?  That will ultimately drive traffic away from the travel agencies (Orbitz, etc) and towards the airline’s sites where only partner companies will participate in access to the customer.

Furthermore, by eroding the value of the travel agency websites, the airlines would be able to make the picture for what a competitive fare is a bit more “fuzzy” to the consumer.  The last thing airlines want is a competitive marketplace.  The first thing that you, as a consumer, want is a competitive marketplace. 

But it’s that competition that is making it so hard for airlines to raise prices.  Right now, one airline essentially “bids up” the price of a fare and then waits to see if other airlines match it.  If they don’t, the first airline will drop its price back to the old market price.  If they do match it, then suddenly all fares are raised but they are once again perfectly competitive which means market share for those customers doesn’t change. 

Airlines want things as fuzzy as possible and as difficult as possible to price shop because that potentially allows them to raise the prices more.  Right now, airline A might have 10 flights on a route and airline B may only have 3.  But if airline B sells at a lower price, airline A has no real choice but to match it.  This is because we see all the lowest fares displayed on a website and a price differential as little as $5 can change market share quite a bit. 

This is one reason why I believe Southwest should seriously consider getting back on the grid, so to speak.  They offer competitive prices (particularly when you consider their policies on bag fees) that aren’t displayed alongside all the other airlines on these travel agency websites.  In fact, they offer the two things that most customers want:  low fares (or at least competitive) and frequency. 

Ultimately, I expect that American Airlines will have to accomodate Orbitz in some manner.  I say this because no other airline is making this attempt at the same time.  Not having their fares displayed alongside their customers in the present circumstances will mean a potential loss of market share.  Things would look worse for Orbitz if the other airlines were trying to do the same thing.

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It was disappointing to hear of the rather dramatic engine failure on the QANTAS A380 yesterday morning but it also caused me to ponder what the real implications are.

First, QANTAS’ grounding of this aircraft is likely unnecessary and way premature in light of the service history of the aircraft so far.  At least with respect to technical reasons for doing so.  However, QANTAS’ grounding is probably a wise choice with respect to public relations.  This company has a long standing reputation for no lives lost in a jet aircraft incident and rightly so.  Preserving this image is particularly important to an airline that by definition is frequently traveling over oceans to reach their destinations.  In other words, don’t presume the grounding as an indictment against the aircraft or even the aircraft engines.

Second, after viewing a number of pictures of this incident, it is striking in that it was an uncontained failure.  However, it also shows just how robust and just how much safer jet airliners of today are versus those of the 1960’s and 1970’s.  An uncontained failure shouldn’t happen but even when it did, things were fairly non-eventful with respect to keeping the aircraft under control and getting it back on the ground.

Third, an uncontained failure in this Rolls Royce Trent engine is somewhat distressing.  Even an engine with modest design mistakes typically will not reveal these problems for a long, long time.  The pictures are dramatic and the amount of debris from this engine is also a bit impressive.  This engine deserves rigorous investigation at this point.

The bottom line is that the aircraft remains safe.  In fact, more Airbus A380s are actually flying with a different engine, the Engine Alliance engine from GE and Pratt & Whitney.  Take the media drama and even the QANTAS dramatic reaction with a large grain of salt for now.  One event does not make a trend.

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And I’ll admit that I’m mildly surprised by this development.

It turns out that unionization of Delta flight attendants was rejected by a vote of 53% against the idea.  I speculated in a post found HERE that this might actually happen but I did wonder about the results since those former Northwest Airlines flight attendants are a battle hardened crew.

This is good news.  It’s good news for Delta flight attendants and it is great news for Delta management.  The best thing management could do is to make sure they continue to treat their cabin crew with respect.  Keep them compensated well and ensure those needs are getting met.   Most of all, don’t gloat and don’t threaten.  Management got what it wanted and it is best to be magnanimous about it.

I don’t blame the NWA cabin crew for wanting a union.  They needed one when doing combat with NWA management.  I think that the movement to put a union in place will actually slow some as long as management stays the course. 

In some ways, the people who get dinged the most from this development is American Airlines.  Why?  Because Delta will continue to get better productivity and enjoy more harmonious labor relations than AA and AA has been counting on the new SuperLegacies getting hit over the head.

In addition, to those who believed the new labor organization would be easier at airlines as result of the rules changes, I think you’re wrong.  This most recent vote showed that flight attendants, even ones who weren’t that emotional about the decision, do know how to vote when it counts.

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maybe.

It’s been announced that the Pan Am name is being resurrected (again for the 5th time) for an airline that plans to base itself from Brownsville, TX and which will fly to Latin American destinations initially as a cargo airline.

This won’t be the first time for Pan Am to stage flights from Brownsville either.  The original Pan Am flew flights to Latin America via Brownsville in its heyday.

Company president, Robert Hedrick, says their first flight will be to Monterrey, Mexico. 

I find this plan a bit weird, myself.  Brownsville is a large port for international goods but it isn’t a very strategic location for international flights to Latin America.  Not anymore, anyways. 

It might work as a cargo location, it won’t work as a passenger hub.  So, for those of you waiting for another glory era of Pan Am, I would suggest you not get too excited about this one.

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Southwest Airlines CEO Gary Kelly speculated that Southwest could one day be flying to Hawaii and that has tongues wagging in the airliner world.   Kelly mentioned this possibility in connection with their decision to purchase the 737-800 which they should arrive at very soon.

The fact that no one confirmed that Southwest would in fact buy the 737-800 at their recent media day leads me to believe that they are still in negotiations with Boeing and probably it has to do with price more than anything.

Still, even if they add the 737-800, it doesn’t mean they’ll do Hawaii.  Flights to Hawaii require more than just that aircraft.  It means proving you can do ETOPS flights and it means keeping a sub-fleet of aircraft that can do ETOPS flights.  ETOPS means flight crews get more training and aircraft are specially equipped and specially maintained. 

Alaska Airlines is doing such flights at present and they appear to be succeeding well enough that they’re adding flights to Hawaii from other cities.   It is doable and it may well be profitable.

However, if this does happen, I think it might happen in 4 or 5 years, not next year or the following.  Southwest has a bunch of things to chew on at present such as their merger with Airtran, phasing in new IT systems and just adopting not one but two new aircraft types:  the 737-800 and the 717. 

If this does happen, it’ll happen once they’ve managed to digest their other challenges.  Don’t go looking for that Honolulu destination on their website just yet.

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It’s always been hard to make the case fo re-engining commercial airliners.  The government does it because their aircraft see far fewer cycles and are therefore used for a much longer duration. After 20 years, the government may well have another 20 years of service life left in the aircraft and re-engining makes sense.

I can’t honestly think of a re-engine program on a commercial airliner that was a financial success and that’s why both Boeing and Airbus are backing away from this idea.  Admittedly, Airbus isn’t exactly backing away yet but it is growing quieter and quieter about the subject.

Boeing has openly discussed building a new design as a 737 replacement and several airlines have openly expressed interest in the idea.  It is the obvious pathway to go forward on but the timeline is what is giving manufacturers fits.

Boeing and Airbus want to offer a quantum leap in efficiency with new aircraft and they sense that they don’t have the right technologies to make that happen on a small, single aisle aircraft yet.   It is going to be very difficult if not impossible to offer 30%+ gains in efficiency on the next airliner.  There has been too much learned in the art of making an airliner efficient now and that means the gains will be incrementally smaller as time goes forward. 

The engines are close enough to make that call.  With a firm build committment, engine makers could make an engine that would be a leap ahead of the rest in time for first flight.  It would require a big investment and hard work to make that happen but it is possible at this point.  Of course, the numbers of aircraft that would use these engines make the business case for that investment so the likely road block on engine development going into high gear resides with Boeing and Airbus. 

We already know quite a bit about wings and there isn’t much to be gained there.  Use of new materials could help with weight and that will help a bit but huge gains from new wing designs are likely a thing of the past.

Fuselages are one area that everyone speculatese about.  We see the gains to be had from CFRP (carbon fibre reinforced plastic) in the 787 project and assume we can get those in a 737 project.   Well, with the existing technology, those gains aren’t quite there.  That solution doesn’t “scale down” to a single aisle, 150 to 190 seat aircraft very well.  In addition, Boeing and its partners haven’t quite gotten their production to scale “up” to a level that would support high volume production that a 737 replacement would require from day one.

There are newer technologies emerging that may be satisfying for such a project’s fuselage but we’re not quite there yet and this is where the delay is coming from, I think.   I don’t think that Boeing and Airbus quite have a handle on whether or not the technologies are viable enough to pursue for production and I think that is requiring more study and thought before a committment.   The fuselage (and interiors) are the last place to make big gains and the “efficiency” needed is going to have to be won from that area. 

At the end of the day, it isn’t engines that is driving these decisions, it’s fuselages and their weight.  The manufacturers want to offer everything they can because this is an aircraft they’ll likely be building for decades and you want to have what people want when you make that kind of committment.

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For the past few months, I’ve seen a number of “quality” ratings go out on airlines in the media.  The criteria of these various media outlets seems to be out of step with reality in the airline world and I want to talk about that for a minute.

First, any one airline experience is a highly subjective event.  Complaints about airlines are usually driven by 2 or more bad experiences on flights rather than one and keeping statistics on single events to drive an evaluation doesn’t necessarily reveal whether or not airlines are offering good service. 

Second, the criteria being used to “rate” an airline is often based on the luxuries offered such as in-flight entertainment, WiFi, food or business class seats.   Three of those 4 criteria are often based on price as a function of the kind of ticket a person bought. 

Third, the loyalty programs of airlines tend to skew ratings as well.  It’s amazing how many passengers will continue to rate an airline as “good” in return for those almighty miles.  A “free” ticket excuses a lot of discomfort and abuse. 

Why  not rate airlines on things like seat pitch available in economy seating?  And what about the costs to upgrade to a better seat and/or level of service?  Shouldn’t the ” a la carte” pricing scheme of airlines be included in such a rating? 

Imagine a rating system that offers negative points for less than 31″ of seat pitch, no points for 31″-32″ of seat pitch and positive points for anything 33″ or greater in seat pitch.  Let’s consider bag fees and offer negative points for anything costing over $25 or more for 1st bag checked, no points for $20 to $24 per bag and positive points for less than $20 per 1st bag checked.  You could do the same with food offerings as well. 

Let’s count things like baggage loss claims on annual basis and on time ratings as well.  Offer positive points for being in the top 3, no points from level 4 to level 6 and negative points for being below level 6.  Let’s evaluate how the airline accomodates passengers inside its hub terminals because airlines do have some control and influence over the environment they offer you in most cases. 

Why not include regional carriers in the evaluation of the legacy and SuperLegacy airlines?  They are, after all, selling you the ticket and their brand is what is being touted so shouldn’t those regional airline flights be included in evaluating the brand?

And let’s evaluate on the basis of economy, economy plus and business (and first class domestic) class.  First class, on an international basis, doesn’t really matter because I assure you that it will be top notch compared to any other service level you could experience.   On any given domestic flight, about 10 to 12 percent of the seats available are business/first class seats.  The rest are economy.  All too often we’re rating airlines on how well they’re treating the vast minority of passengers. 

And let’s leave loyalty programs out of it.  They cause passengers to act irrationally and only to the benefit of the airline. 

Wouldn’t it be nice to choose a flight based on such a rating system and the price for a fare?  You can bet that airlines would pay a lot more attention to the basics and a lot less attention to the 10% whose fares are generally being paid for by their business and who don’t have a financial stake in their choices.

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Southwest has been pretty candid with people attending the Southwest media day and has made a number of comments and announcements that offer more clarity than we’ve seen in a while.

First up:  Southwest and Volaris Airlines will begin interlining on December 1st.  This is quicker than I would have guessed based on the radio silence we’ve heard on this subject for months now.  It’s not a codeshare because you won’t be able to buy a Southwest ticket to fly on a Volaris flight.  You will, however, be able to seemlessly transition between a Southwest flight and a Volaris flight to Mexico.  You wouldn’t be able to do codeshares at present anyway since Mexico’s air traffic system got downgraded to a Category 2 recently. 

Southwest sees the seniority list integration between its pilots and Airtran pilots as their number one issue.  I agree.  The rational people out there would have you believe that Airtran pilots should be happy no matter what since it is almost guaranteed that they’ll get a pay raise with this merger.  Sadly, rational thought doesn’t enter into the equation when it comes to these discussions.  In addition, pay raises aren’t the only factor when it comes to seniority.  Seniority also determines the type of aircraft you’ll fly and where you’ll be based out of.   I doubt it will be a “date of hire” integration and I doubt it will be a mere stapling integration either.  There will probably be some sort of weighted integration and possibly jobs in the ATL area (and perhaps a few other bases) will be “fenced” off for Airtran pilots for a period of time. 

Southwest says it will be charging $5 for WiFi access on its aircraft.  This is pretty cheap compared to the fees for Aircell on other airlines.  Apparently Southwest has done their homework and determined that’s the sweet spot for maximizing “take” on each flight.  There will be no graduated fee for varying durations of flights.  Southwest doesn’t know what it will do with Airtran aircraft equipped with Aircell because they don’t know what those contracts look like yet and they won’t until the merger is consummated.  I suspect that Aircell will remain in place until those contracts expire and then they will be replaced with R0w44 systems to harmonize the fleet.  That would be a good news for Row44 who hasn’t gained much in the way of market share when compared to Aircell.

Finally, Southwest thinks Atlanta could quickly become its biggest city once it has finished its merger with Airtran.  Las Vegas currently is the largest but Southwest execs see lots of additional route opportunity in Atlanta already.  They’ve identified at least 2 dozen new destinations that could be served and Atlanta is already pretty big for Airtran.  Look for more frequency and a net gain on routes once Southwest really takes over.

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jetBlue has announced its intentions on flying from Long Beach, California to Anchorage, Alaska next summer and, yes, this probably has some people rubbing their eyes to see if they read this right.

It’s an odd choice in my opinion since flying to Alaska requires a bit more general pilot knowledge and jetBlue doesn’t have any other traffic there.  That means they have to establish themselves in the city even if with contractors and without more flights headed there, I don’t know why one would do it.

One possibility is that this is about aircraft utilization.  Alaska flights are one of those things where you can get away with strange(ish) flight departures and arrivals.  Alaskans don’t seem to mind odd times and I wonder if this isn’t a flight that will depart late afternoon, arrive in Alaska in the evening and then do a quick(ish) turnaround for a “redeye” back to Long Beach where it will likely be used to fly a different flight during the day.  The flights times would make it work.

It’s notable that right now, Alaska Airlines doesn’t have a non-stop between LA and Anchorage.  In fact, it appears no one does.  That might just make the whole effort worth it or it might point out that there is a reason why nobody is doing it.

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Delta Airlines has come to an agreement with Boeing on deferring its order for (18) 787 aircraft until the year 2020 or about 10 years from now.  Delta inherited the order when it merged with Northwest Airlines and there has been talk of this happening for over a year now.   It has also arranged to sell (4) 737-800 to third parties upon delivery from Boeing. 

Delta has new(ish) aircraft and it has really old aircraft.  What it doesn’t have is worn out aircraft that require replacement.  Not in the 787 category anyways. 

What’s going on?  Well, operating airliners is a funny thing.  You can buy new, operate new and sell relatively new.  Your costs to do that are generally worth it because you’re also getting a lot of efficiency and since the aircraft is new, maintenance is far cheaper.  Ryanair does this.  You can also hold on to old aircraft, refurbish them from time to time and while they aren’t very efficient with fuel, the capital costs to operate the aircraft are dirt cheap.   Northwest was in the habit of doing this with 40 year old DC-9 aircraft. 

Delta has been buying up used aircraft that fit its model such as the MD-90 and it is going to hold on to other aircraft that have lots of life in it.  Their 767 fleet will hold up for quite some time yet and there is some evidence that the 767 may be no more costly to operate on routes of about 5000nm or less than the 787 is.   In addition, they have a pretty young A330 fleet that was inherited from Northwest and it definitely won’t require replacement anytime soon either. 

Delta is clearly going to preserve its capital and work towards distributing profits from its revenue streams.  This hasn’t worked for airlines very well in the past but it is the stated intention of Delta CEO Richard Anderson.   Even it becomes necessary to change courses, they can.  Delta is a huge airline now and if it decides it wants to move up deliveries on aircraft or even just order more aircraft for timely delivery, Boeing and/or Airbus will happily accomodate them.  They have some flexibility here.

Is this the right move for every airline?  No, it isn’t.  Delta’s 767 fleet is pretty young with a considerable number of its 767 fleet having been delivered in the late 1990s and very early 2000s.  The A330 aircraft have all been delivered to the airline starting in 2003.  They don’t need to elbow their way to the front of the line to get their hands on aircraft. 

Is this the move for every airline?  No, it isn’t.  Other airlines have the bulk of their fleets being delivered in the 1980’s and early 1990’s and that means they are wearing out and do require replacement.   Each airline has to manage its money and its fleet and it can be a delicate dance.  In today’s airline world, flexibility is the key.

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British Airways has been working to resolve its labor trouble with the flight cabin crew union, Unite, for several months now.  It appears that both BA and United have finally come to enough of an agreement that a deal is on the table and it will be voted on.

The problem is, both parties here went a bit too far in these labor actions.  Unite went too far in trying to protect jobs by insisting on unproductive staff levels in the cabins.  BA went too far by punishing those who went out on strike.

Labor conflicts shouldn’t be treated as “personal” and when Willie Walsh & Co decided to punish those strikers by removing their travel benefits, that was over the line.  The strike was legal and you shouldn’t punish people for doing what was within their legal rights. 

In addition, remaining stubborn about restoring those benefits was just childish.  It’s insisting you were right when there is an opportunity to get what you originally wanted by just stopping your own foolishness. 

I’m actually somewhat skeptical that this vote on the deal will be approved.  BA has agreed to restore “90%” of the travel benefits and seniority would only be restored on the basis of “good behaviour” over 3 years.  That’s punitive and unnecessary.

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American Airlines remains the concern of every analyst when it comes to asking the question about its long term viability.  It isn’t that this airline is about to die, it’s that there remain so many things going against it still.

They have some of the highest if not the highest labor costs among the airlines and they have labor groups who are out to get what they had before the givebacks earlier in the decade.  What’s more, they don’t seem to have a coherent plan for dealing with that problem.

They have an aging fleet that puts them behind other airlines including the SuperLegacy airlines who did renew their fleet some over the last 7 years while American remained largely entrenched in the MD-80s until 2 years ago.  Even now, they’re a bit behind in keeping pace with the need for greater fuel efficiency.  It’s arguable that without the huge spike in oil prices a few years ago, American would still be sitting on their fuel hog MD-80s. 

They’ve been stymied on growth with other airlines “poaching” on their territories and others reducing their costs via bankruptcy and have only now started to, perhaps, grow their network organically. 

American did finally get their trans-Atlantic alliance with British Airways and Iberia Airlines.  Only time will show us if that alliance is worth it and while it may be worth something, American missed out on being able to take advantage of such a thing for more than decade by stubbornly clinging to the idea of mating up with BA. 

They also won their Japanese battle by keeping JAL in the OneWorld system and they’re on track to win immunity in a trans-Pacific alliance with them as well.  But JAL has a long way to go before it is a profitable and viable airline.  Delta and United, however, have good systems to Asia and a good network inside the Far East. 

I do like their interline agreements with jetBlue and WestJet and it would appear that someone at American is thinking “innovative” for once.  But will AA be patient enough for those to work and will they be entreprenurial enough to expand upon such concepts?  History says no but I say the decision on that can’t be made for at least a year.

This isn’t an airline that will go bankrupt in the next few years.  It is an airline that appears destined to remain very lackluster in comparison with basically all the other airlines in the United States.  And why would you invest in lackluster when you can have rock star in so many others?

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We’ve heard all about the soaring profits at airlines this past week but I wonder if many have noticed the other element in the news:  new flights being added at various legacy and SuperLegacy hubs. 

So far, these new flights have all the appearance of being targeted towards building core strengths at various hubs and focus cities.  American Airlines is building LAX (although mostly through American Eagle flights) for instance and United and American are starting long haul flights from LAX to Shanghai, too.

While we’ve seen very modest capacity growths in the first 2 quarters indicating that airlines were just (barely) keeping pace with demand, this most recent quarter finds announcements that indicate that everyone is trying to nudge themselves towards a bit more growth than before. 

Let me point out that even Southwest’s intentions on buying the 737-800 is a form of capacity growth.  They’ll use that aircraft on routes where there ability to fly frequency is constrained. 

The signs are there but it’s the 4th quarter results and announcements that should signal a trend.  We won’t really know where things are headed until announcements on intentions for next summer are made.

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Something light for a Sunday. . . new Air New Zealand videos.

Story Time

The Intimate Art of Touch

Happy Hour

Dan and Dolly

Crazy About Rugby

All Black Livery

Bare Essentials

Nothing To Hide

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I want to take a moment to mention The Crew Lounge, a group of flight attendants doing a weekly podcast on a variety of subjects.  Hosted by Sara of the Flying Pinto blog and Bobby from Up Up and a Gay blog, The Crew Lounge talk about subjects ranging from how to become a flight attendant, sultry encounters in the air and industry news both quirky and serious.

I’ve been following both of their blogs for a while and I had been aware of their podcast being done for several months but I had not taken the chance to listen until a few weeks ago.  I had to take a series of long car trips to South Texas and took their library of podcasts along with me.

Both my wife and I found them entertaining, informative but most of all very funny.  Both Sara and Bobby are clearly professionals who see this business with both an experienced eye as well as a sense of humour.

I’ll admit that after listening to 4 or 5 podcasts, I turned to my wife and said: “If these guys ever talked to me they’d want to kill me.”  Never before have I been so conscious of my own opinions on the airline world being a bit in conflict with someone else’s. 

They are a fresh breath of insight into what it takes to be on the front line in the airline world and worth taking the time to listen to them.  You can find The Crew Lounge HERE and I hope you’ll take a moment to listen to their show.

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Instead of engaging in analyst speak for the earnings results airlines are reporting this week and the next, let’s sum it up real quick:  Airlines are earning record profits this quarter (again) and American Airlines continues to appear the weak animal on the plains with not one but two lions starting to eye it. 

The “records” being set with these profits are a bit deceiving.  Delta has had record profits.  It’s also roughly twice the size it was before the economic crash.  United has record profits, ditto.  US Airways has record profits and, yes, they’re roughly twice the size they used to be too.  When Southwest adds Airtran to their company, we’ll likely see new record profits there too. 

What’s driving these profits?  Well, certainly some synergies from the mergers although I suspect they aren’t as great as they are touted to be when these airlines were lobbying for approval of their mergers.  US Airways doesn’t have all those synergies in their flight crews and they’re still performing impressively. 

Network?  Well, again, I think it certainly helps a bit.  I believe the larger networks are improving load factors somewhat and that’s good.  On the other hand, is it all about the network?  No, not really.  I refer you to the fact that US Airways has a lousy network and, again, they’re doing very, very well.

I think the continuing restraint on capacity growth is driving these profits.  That’s great and I am very impressed that the airlines have held themselves in check as well as they have.  It’s nice to see profits in this industry and there are a whole lot of people who need to be paid back for their investments.  This will help do that. 

The question is . . . Will it last?  I’m skeptical.  Very skeptical.  First, some of the load factors we are seeing as “averages” are astronomically high when considered against the past 30 year history of the business.  Even Southwest is enjoying exceptionally high load factors and their business model isn’t based on high load factors at all.  I don’t think such load factors are sustainable.  In fact, I think they are too high as an average for these legacy/SuperLegacy carriers. 

I think branded regional airlines and LCC carriers are going to see a lot of opportunity over the next few quarters to start whittling away at these profits.  Someone will blink and they will add capacity.  When one starts to grow their capacity, many will follow, at least on competitive routes, because self-restraint in this business is dependent upon everyone exercising some. 

If we do continue to see these profits for another year or two, I also think we’ll see new entrants into the market place.  The Sirens will be calling to investors and it will be an irrestible call. 

You can bet that each airline is analyzing their competitors right now and you can also bet that the question being asked is how can we grow or add capacity through better utilization of our fleet right now.  Tomorrow, the question will be about what they can add to their fleet to grow that capacity.  Those questions are being asked internally right now and I do think we’re looking at least a couple more financial quarters of self-discipline.  I also think someone will likely blink when they begin to plan and announce intentions for next year’s summer season.

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The Seattle Times is reporting that Turkish Airlines has indicated its interest in both the Boeing 747-8i and Airbus A380.  CEO Hamdi Topçu apparently has said they’ll decide before the year end on this order. 

Such an order strikes me as hubris for this airline.  Yes, they’ve done pretty well for the past few years and they aren’t a tiny airline but they aren’t so big that their network could possibly justify such a large aircraft in its fleet.   Despite their entrance into the Star Alliance, they’re still a 2nd tier player at best.  Even additional 777-300ER aircraft would cause me to raise my eyebrows questioning this. 

Much of their success has been witnessed over the past 3 years and, on the outside, that would appear to make them attractive going forward.  The truth is, as competition with European and Middle East carriers heats up, I think this erodes their growth.  Furthermore, Turkey’s current political climate makes it somewhat less certain as a place to do business for the near future. 

Bottom line:  I don’t think they’ll actually order the aircraft and, if they do order such large aircraft, I don’t think they’ll actually take delivery.

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American Airlines and WestJet Airlines have announced an interline agreement yesterday and, once again, I didn’t see this coming.  If anything, I would have expected this to develop between WestJet and Delta, not American Airlines. 

The agreement will allow customers to connect seemlessly (with one ticket) to 25 new Canadian destinations with American Airlines (and American Eagle) feeding that traffic to six gateway cities in Canada.  Presumably it will work both ways (Canada to the US) and it is notable that the press announcement mentions a “phase 2” which will feed traffic back and forth to WestJet flights from the US to Canada as well. 

This is a pretty good win for American.  It gives Oneworld (via AA) an entrance into Canada where they’ll compete against the Star Alliance and Air Canada.  It leaves Delta sitting out in the cold with no other airline in Canada for them to connect with.  That, alone, is a bold move.

It also kind of swats at Southwest and its original intentions on Canada via an earlier codeshare agreement it had with WestJet but which was terminated earlier this year after a disagreement with WestJet. 

That sound is the door slamming shut. 

This will sting other carriers in the US and it’ll force them to access Canada through a much more expensive pathway:  flying there themselves. 

With both this agreement and the earlier one AA did with jetBlue, it’s clear that there is some innovative thinking going on at American suddenly and now I wonder what comes next.  I’ve been pretty hard on AA this year but I have to say that I like this move and I think it will benefit them and WestJet a great deal.

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