The Arizona Daily Star has THIS story about Southwest Airlines modifying their contract of carriage to state that mechanicals causing delays are now acts of God.  Southwest now says that mechanicals causing delays are beyond their control. 

Yeah, I don’t think so.  And I don’t think a court would either. 

Southwest says they made the change to limit their liability and fall more within industry standards of practice.  The problem is, a review by the Daily Star of the contracts of carriage for the 4 other major airlines (American Airlines, Delta Airlines, Continental Airlines and United  Airlines), none have such a clause.

Further, Southwest also says they don’t intend to change their current practices.

When Southwest was consulted again, it said this revised contract of carriage section was to cover “airport” mechanicals and such that were beyond their control.  The problem is, that limitation isn’t in the contract and its vague wording seems to cover all mechanicals.  Regardless, an airport mechanical (jetway failing, etc) isn’t an act of God either.   Southwest has made a post on their own blog clarifying this issue.  You can read it HERE.

I can see other major airlines adopting this practice very quickly.  It’s attractive and certainly has possibilities when it comes to refusing responsibility to customers that they already enjoy with weather events. 

But is it right?  If I’m driving to the airport and suffer a flat tire that makes me late and I miss my flight, I’m pretty sure the airline isn’t going to see that as an act of God.   They may or may not choose to help me out but they aren’t going to see this as a contractual obligation to accomodate me. 

It is wrong for airlines to continue down this path of treating customers as an inconvenience to their business.  Regardless of the fare paid, there are obligations on the part of the airline and one of them is to keep their equipment in good working order and be capable of making repairs when something does go wrong in a timely manner.  Mechanicals aren’t an act of God and shame on Southwest for doing this particularly in light of their run-ins with the FAA over their maintenance practices over the past 3 years.

Is a flight that crashes because a mechanic didn’t perform the proper maintenance on a hydraulics system an act of God?  No.  And no court will see it that way either.

But you know what, folks?  This abuse will not be reigned in until you voice your objections.  I get to do so here (and based on the various domains referring traffic to this site, I can count at least 7 major airlines that have readers) but you need to do so with both your voice and wallet. 

Just to make it a little bit easier for you, here is Southwest’s customer service phone number and email:

Phone:  1-800-I-FLY-SWA
email: Go Here.

Just to put my money where my mouth is, I’ve made a complaint via the email form myself.  Go ahead, it took me 2 minutes to fill out it out and express dissatisfaction and it’s worth making your opinion known.

Filed under: Airline News by ajax
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Over the past year and particularly over the past 6 months we have heard a great deal about NextGen Air Traffic Control Systems using GPS for guidance.  GPS will allow aircraft to fly more precise routes and permit distances between aircraft to be reduced which should allow more “capacity” into our system.

Increased precision should permit a “redesign” of approaches to airports that will allow aircraft to enter a “pattern” earlier and perform continuous descent approaches that will save fuel and even reduce the workload on pilots.

On flights over oceans, aircraft could use GPS to precisely locate  themselves and then automatically report back their position(s) to traffic control centers which could then “tighten up” routes across those oceans and allow more aircraft to follow an optimal route. 

There is no doubt that GPS is overdue in this game but it isn’t necessarily the “no downside” solution to our problems either. 

GPS signals are provided by satellites and things can happen to those satellites to either block or severely degrade the signals.  Sunspot activity can affect their signals,  for instance.  It’s also not unheard of to suddenly find satellites decommissioned because they were hit by space debris or such intense solar storms.   Suddenly loss of those signals could result in a very intense situation where we find tightly space aircraft without the ability to precisely locate themselves.  The chances for this are, admittedly, statistically very low.  It’s worth an acceptable risk provided aircraft retain guidance redundancy with other systems not dependent on satellites.

Indeed, not all GPS signals are actually emitted from satellites.  There are ground based augmentation systems that permit a finer degree of precision in certain areas.  In fact, one such use is in Instrument Landing Systems being designed for the future.

But there is a security problem with GPS.  First, it is possible to “spoof” GPS signals.  In fact, it’s relatively easy to “spoof” these signals and a reason why the military doesn’t rely completely on GPS signals for guiding munitions and why they’re developing other systems that are not satellite based but which do provide accurate relative navigation.  

Signals by which aircraft would navigate are encrypted but that encryption is somewhat out of date for this era.  While a terrorist wouldn’t necessarily be able to spoof the signal, a foreign country could conceivably do so.  And you can do such “spoofing” by sending a signal from the ground, air or space with equipment that isn’t very costly and not very hard to engineer. 

While aircraft aren’t necessarily going to experience their guidance being impacted by pranksters or terrorists, the risk for it being a target of a foreign nation who decides its at war with the United States or some other country does exist.   Any country capable of doing the math and engineering technology from the 1980’s can potentially engage in this.   That might include countries such as North Korea or Iran.

In addition and quite unfortunately, China has shown its willingness to strike at satellites with missiles.  Again, any country capable of building an intercontinental ballastic missile is now capable of striking at GPS satellites in space.  And don’t think that those won’t be targets in a conflict, they will be.

While we have some safeguards and the United States Air Force works very hard at securing and protecting the existing satellite system, we really need a global commercial navigation system that is secured by a larger, more redundant grid of satellites.  A system that is owned and maintained by responsible nations of the world and one that is designed for air and sea navigation.  A system that is encrypted with modern encryption and upgradeable for the future.   And a system that can be “turned off” selectively for certain regions or countries in times of conflict. 

I’m thrilled we seem to be moving forward with a new generation of navigation systems.  It’s long overdue but I do wish that we would consider the security risks inherent with these systems just a bit more.

Filed under: Air Traffic Control, Airports, security by ajax
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We often read stories about companies and businesses going green and being happier for it.  We see governmental regulations aimed at being cleaner “emitters” and taxes and credits being structured to force people to be pollute less.   A few years ago, the airline industry was being targeted by various “green” groups for being big polluters and being particularly damaging to the atmosphere.

So, is going green really good? 

As matter of fact, it is.  At least for the airline industry.  One reason you see a variety of airlines embracing the idea of being “green” and becoming involved in a variety of experiments is that, for the airline industry, almost every “green” effort translates into cost savings for the airline.

American Airlines discovered several years ago that by being just a little bit more proactive in their engine maintenance, they could extract a 1 to 2% gain in fuel efficiency.  Less fuel burned translates into less emissions in the atmosphere. 

Several airlines have participated in experimental flights using various “bio” fuels to see what does work and how well it works.  Interestingly enough, several of those experiments have revealed that the “bio” fuels often are *more* efficient than the petroleum based fuels.  They have more “energy” and therefore an aircraft burns less fuel per mile using the bio fuel.   We only lack the technology to mass produce some of these fuels at a cost effective price. 

Other airlines have been experimenting with continuous descent approaches to airports.  In the simplest sense, this is an airliner “gliding” from the top of its cruise altitude all the way to the runway.  Currently, airlines have to make “step” approaches to airports where they lose a few thousand feet of altitude and wait.  Then they are cleared to another lower level and when they reach that, they wait.  This results in a lot of throttle “jockeying” that wastes fuel.  Continuous descent approaches have been shown to reduce emissions by *tons* on a long haul flight.  And they are one reason why airlines are embracing the idea and pushing on the FAA hard to find ways to employ these at airports. 

Every time an engine manufacturer manages to eek out another 1 to 3% fuel efficiency these days, the gains aren’t just in reduced fuel burn but also in reduced toxic emissions.  Essentially, these gains come from burning fuel more completely and the more completely the fuel is burned, the fewer toxic emissions that result. 

Some airlines have discovered that just by washing their aircraft a little bit more results in a little less drag and that results in a little less fuel burn which then results in fewer emissions.  Others have figured out that aircraft sitting at gates running their APU (Auxiliary Power Unit aka a small jet fuel engine producing electrical and hydraulic power) units is wasteful.  Now they hook up ground power and ground airconditioning to the aircraft and that means fewer emissions.  Running a jet fuel engine to produce power on the ground results in lots of dirty emissions and its wasteful of fuel. 

Every “green” movement in the airline industry yields costs savings.  In this industry, even tiny savings on a per mile basis can result in millions of dollars saved every year.  That’s why you don’t hear about airlines protesting about being pushed towards being more efficient and less polluting.  The same is true for aircraft manufacturers and engine makers:  every effort made in this area means their customers save money.  A customer that can save just a few dollars per flight using your equipment potentially saves millions of dollars each year and that’s a huge sale advantage.

At the end of the day, being “green” has literally no downside for the airline and it’s a model industry for looking at ways to embrace it further.

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Bloomberg BusinessWeek had a story a week ago about the brewing brawl in Australia over passengers which can be read HERE.  In Australia, a country of about 24 million people (about what Texas has) and the size of the United States, three carriers are starting fight for passengers.

You know two of them: QANTAS and Virgin Blue.  The third is a new entry named Tiger Airways.  QANTAS is fighting with Jetstar, it’s low cost carrier. 

What is brewing is a battle of LCC carriers over a market that, by population, should barely be able to support 2 carriers.  In fact, a third carrier almost never survives these battles. 

QANTAS is, by far, the biggest player.  Virgin Blue holds some status for having fought for ground and held it in Australia but Tiger Airways is coming in with lower costs than the othe two and hubs established in both Melbourne and Adelaide.

Melbourne I get.  Adelaide makes me scratch my head.  Adelaide isn’t a city of great commerce or international business.  Adelaide has a population of 1.2 million people but it falls in an awkward place for hub.  Situated in southern Australia between Melbourne and Perth, it remains distant from the traditional battlegrounds of Melbourne, Sydney and Brisbane.  It’s not even a logical stop on the way to Perth.

Bloomberg BusinessWeek reports that Tiger Airways’ costs are just about half of Jetstar’s on a per seat kilometer basis (2.75 cents Australian) and it would probably surprise you to learn that Virgin Blue has the highest seat-kilometer costs of 6.75 cents.

Who survives?  It’s anybody’s guess.  Tiger is definitely the underdog still until they gain more market share and more credibility. 

In the meantime, Virgin Blue’s new CEO (formerly of QANTAS) has decided not only to stay in the fight but also go head to head with QANTAS in business class.  With the highest LCC costs, I have to wonder if Virgin Blue isn’t the one that may get squeezed out of the market this time. 

Virgin Blue has good coverage of Australia but poor feed internationally despite operating subsidiary brands V Australia, Pacific Blue and Polynesian Blue since those serve routes that are predominantly leisure oriented. 

Each airline is going to suffer from excess capacity and fare wars to fill those aircraft.  Tiger Airways has just 9 Airbus A320 aircraft now but plans a fleet of 30 for Australia in the near future.  What’s worse, QANTAS will be adding capacity with the arrival of new aircraft from both Airbus and Boeing in the form of A320’s (31 orders), A330 (7 orders) and the 787 (15 orders).  Virgin Blue has 85 737-800’s on order and 3 Embraer E195 jets too. 

That is a *lot* of capacity.  Imagine all those aircraft serving Texas. 

Time will tell but unless Virgin Blue can operate with lower costs and keep their market share, Blue may go red.

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Continental Airlines is testing a new self-boarding process in Houston that is based on the passenger “swiping” or “displaying” their boarding pass at a kiosk and which then allows access to the jetway via turnstile that “unlocks” if the boarding pass is OK.

This test is described as controversial in a time when airlines are decreasing more and more human contact with the passenger.  I actually don’t see it that way.  First, this isn’t something that passengers are going to have trouble with as we already are subject this kind of process elsewhere in our lives.  Second, I’m all for it if the turnstile won’t unlock if YOUR BOARDING GROUP HASN’T BEEN CALLED.  We don’t need a free-for-all at the gates with people attempting to board out of their sequence.

Finally, I”d rather access a live human at the reservations number to give me info I need.  I don’t need someone to smile at me as I enter the jetway.  That is superfluous and unnecessary to a good service experience.

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You’ve never heard of David Warren, have you?  Well, Mr. Warren was the inventor of the flight recorder.  The so called “black box” that is actually painted flourescent orange on most aircraft today.   Mr. Warren passed away last week in his native Australia.  You can see a photo of him HERE.

Mr. Warren, a radio and electronics nut, was invited to participate in a probe about one of the first jetliner crashes in the world and during that probe, he suggested that with a recording of what was going on in the cockpit, finding out what happened would be a lot easier and much more accurate.

His first prototype was capable of recording about 4 hours of voice and cockpit instrumentation.  After a few years, his invention was being installed on virtually every modern aircraft.  I would argue that this invention has contributed more to safety than any other single invention in the industry.  Flight voice and data recorders have made it possible to find out exactly what happened prior to a crash and attribute an accurate cause of a wreck instead of leaving  it up to speculation. 

And how many times have we found out something else entirely was happening during an event versus what popular speculation focused on?  All the time.  There is no doubt that the things we have learned from his invention have improved air safety by an order of magnitude.

Rest in Peace, Mr. Warren, and thank you very much.

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I’m still a bit in awe deep down inside that an aircraft of this size can take flight.  Not only take flight but fly as many as 500 people for as much as 8000 miles.  It really is a wonder.  Here are some videos about the A380:

A380 Crosswind Landing in Iceland

The A380 Brake Test (laboratory)

The A380 lands hard in Oshkosh, Wisconsin

The A380 lands at JFK airport the first time.

First A380 landing at LAX airport.

And the first landing of the A380 at London Heathrow airport.

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Virgin Atlantic has remained steadfastly independent over the past 20 years despite emerging airline alliances forming around them left and right.  Richard Branson has been an outspoken critic of these alliances and managed to be a big player in keeping British Airways and American Airlines from partnering up for over 15 years.

That said, they’re starting to look awfully lonely on the playing field and even a bit anemic.  This strategy of going it alone has worked in the past but I’m not so sure it works for them in the future.  They need more “feed” for their flights and, frankly, they could stand to make it a bit more attractive to potential customers by offering more choices too.

Sir Richard, it’s time you start looking for some strategic alliances. 

Virgin Atlantic has even kind of failed at making strategic alliances with its own brands around the world.  They do not cooperate closely with Virgin Blue, V Australia or Virgin America (in the last case it was a condition upon granting permission for Virgin America to start up so we’ll give them that one.) 

But it’s time.  It’s time for more strategic alliances and there are opportunities out there.  SkyTeam might actually be an excellent fit for Virgin Atlantic since they have no real UK market penetration.  It might work even better if the airline group controlling Virgin Blue and V Australia brands were to join it as well.   Such an alliance would be well served in the US-UK market as well as throughout Europe and it would establish better competition in the US-Australia-New Zealand markets too. 

I’ll stand with Sir Richard on the fundamental wrongness of these alliances still.  However, it’s time to acknowledge that these alliances are here to stay and start finding a way to compete within their structures instead of hoping for another 2 column inches of press by objecting to them.

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It’s been a bit over a week since American Airlines, British Airways and Iberia (along with Finnair and Royal Jordanian) received anti-trust immunity approvals from both the EU and the DoT.  What it means is that each of those airlines will be able to cooperate closely with each other on a variety flights between the United States and Europe. 

What closely cooperate means is that these airlines will start marketing their respective flights between cities under the various brands but each airline will be responsible for certain flights.  For example, British Airways may begin operating more of the capacity between DFW and London while American Airlines retasks the aircraft they were using for some of those flights to other flights.  Iberia Airlines may begin operating the flight(s) between Miami and Spain.  BA, AA and IB will be selling seats on all of those flights as their own just as you already see done as codeshares.

The difference is that now these airlines will also begin cooperating on scheduling.  In other words, American Airlines might start scheduling its “feed” for a British Airways flight from DFW to London.  American Airlines might do the same for an Iberia flight from Miami to Spain.  On the other side of the ocean, British Airways might schedule its “feed” for London to Chicago to mate up with an AA flight.   These airlines will start acting almost as if they are one company so to speak.

Is that good or bad?  If you ask the airlines, the customer will get to see more choices to more destinations on Oneworld flights and that choice is good.  In most cases, it is good and air fares are likely to be unaffected on many routes because of competition from other alliances such as SkyTeam and Star Alliance. 

However, in some cases, I think this is bad.  For instance, American Airlines already effectively “owned” the DFW to London market and really the DFW to Europe market.  So much so that previously they weren’t allowed to code share with British Airways on such routes at all.  There is very little competition in the DFW market to Europe.  Some exists, yes, in the form of flights by KLM and Lufthansa to Amsterdam and Frankford respectively.  One flight each a day.  Now, with even closer cooperation allowed, I do fear that KLM and Lufthansa may find such flights simply uneconomical.  There is no real Star Alliance and/or SkyTeam presence at DFW anymore. 

In the short term, I do think there are markets that are going to see much higher air fares for non-stop flights to Europe.  As with all things, those higher air fares may one day drawn in more competition, though.  It is conceivable that if the fares rise considerably, another alliance may target such a market for competition.  For instance, the Star Alliance may decide that Dallas needs some competition and suddenly we may find ContiUnited or US Airways providing some feed to that destination in order for a European carrier such as Lufthansa to justify a route between Dallas and Germany. 

I think such developments are a good 5 years away at least.  Fundamentally, I think these alliances are bad for consumers and bad for the industry but they were instituted a long time ago and that genie is out of the bottle now.  Since it would be nearly impossible to break up those alliances, it is fair that Oneworld be permited to establish their own now.  SkyTeam pioneered such things and Star Alliance is also far ahead of the curve. 

Regrettably, now we have to manage competition between alliances rather than companies.  I think that is bad because those alliances potentially let airlines that would otherwise go out of business remain in the game longer.  We need to see this industry periodically purge itself of the weaker players.  If you think that didn’t happen under regulation, you’re wrong.  It did.  Airlines did file bankruptcy and if they didn’t, they were forced into mergers of convenience by the CAB.  In any case, the weaker players still went away.  All too often, we don’t allow that to happen anymore and that hurts us more than helps.

Filed under: Airline News, Airline Service, Airlines Alliances by ajax
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I know that these days it seems as if I’m at war with American Airlines but the truth is, they just keep running into walls.

ABC News has THIS story about a woman named Danielle Covarrubias who became pretty angry at American Airlines losing her bag.  However, when they also refused to refund her bag fee, she decided to sue American Airlines for $5 million.  The class action lawsuit was filed in Washington state, where Ms. Covarrubias lives.

But after a few days, it’s come to light that, according to American, Ms. Covarrubias wasn’t on the AA flight.  It was cancelled and she was re-booked onto another airline which lost her bag.  That was from Grand Rapids to Chicago.  No one disputes the bag was lost but it appears it was returned to her the following day.

AA says that they do allow a refund claim in these events as a part of a lost bag claim and it is unclear if Ms. Covarrubias filed such a claim.  Regardless, it points up what I’ve been saying for more than a year.  If you’re going to charge a bag fee, be prepared to deliver or refund that fee when you don’t deliver it on time or at all. 

Travelers are enraged and there is enough traction for a class action lawsuit such as this.  Even if this one doesn’t end up in court, I do believe there will be another that does.  When it does, the issue will be over whether or not an airline is entering into a contract to carry that bag with guarantees and I don’t think their fine print will save them.  There is plenty of law to show that there is an implied contract and that breaking the contract means you owe a refund of some sort.

Revenue from ancillary fees such as this looks great to airlines but they haven’t yet really felt the pain of what those fees imply.  To be honest, I’m a bit surprised that it has taken this long to see something like this. 

More important, it’s another case of airlines shooting themselves in the foot.  This problem was easy to solve and even easier to avoid.  Give a refund instantly when you lose or misplace a bag for which a customer has paid a fee. 

That much is a no-brainer.  It isn’t hard to empower an employee to do so.  You only have to ask 2 questions to arrive at an appropriate action:  1) Did the customer pay a checked bag fee and actually check a bag?  2) Did the bag arrive with the customer?   If the answers are Yes and No respectively, make that refund immediately.  Credit it back in exactly the same manner for which it was paid and do it instantly and with sincere regrets over the trouble caused. 

Denying that refund automatically is not only a bad PR strategy, it’s just simply wrong.  In this country, we do not expect people to pay for things they didn’t get.  Airlines are styling these fees as “services” and, in this case, service is exactly what the customer didn’t receive.

Filed under: Airline Fees, Airline News, Airline Service by ajax
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Air Berlin will be joining Oneworld sponsored by British Airways it has been announced.  I would like to announce something myself:

Huh?  Air Berlin?

Air Berlin is European continent based LCC carrier and while they get generally good marks as an LCC carrier, I’ve a hard time figuring out how their service product harmonizes with the rest of Oneworld.  Particularly with British Airways, American Airlines, QANTAS, Finnair and Cathay Pacific.  Is Oneworld just that eager to have more feed on the European continent?

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A few days ago, I found THIS little news story about Thomson Airways and what they may choose to do with their 787 aircraft as they come online into their fleet.  Briefly, Thomson says they may choose to introduce a direct, non-stop flight from the United Kingdom to Hawaii.  Thomson is the third largest UK airline and focuses primarily on the leisure market. 

It interests me because it is more evidence of the direction I think airlines will take as they bring into their fleets aircraft that are more and more capable of long, thin routes.  The Boeing 787 and Airbus A350 will be those aircraft primarily although this new direction really started with the 777-200LR. 

It is also why I think ultra-large, long range aircraft have a limited market going forward.  Aircraft such as the A380 and 747-8i have the capacity to carry 400+ people over distances as long as 8000 nautical miles.  However, what has never been fully acknowledged is that previous large capacity aircraft, primarily the 747-400, were used as much for the range, if not more, than their total capacity. 

As airlines begin to explore more and more direct routes that by-pass traditional hubs, the efficacy of using an aircraft to transport 400+ people from hub to hub begins to wane.  Airlines such as Delta Airlines are already using the 777-200LR to fly routes such as Atlanta-South Africa and American Airlines (and others) are using the 777-200ER to fly routes from North America to India direct.  Those routes previously had stops in Europe or North Africa.   Emirates, the largest user of the A380 and who will by far have the largest fleet of A380s, has a model based on their mega-hub in Dubai.  The question is, is it better for a North American passenger to fly to Chicago, New York City or Atlanta and then take a direct flight to their destination or is it better to fly to Emirates’ hub and then onward on another long haul flight to their destination.

I think the former is the more likely model, particularly for the United States and Europe.  Witness the announcement that Continental plans to fly their first 787s to Auckland, New Zealand and Africa from Houston.  Routes that previously never existed and which previously required a stop in Los Angeles or New York or a European hub. 

That doesn’t mean the A380 and/or the 747-8i doesn’t have a place in the market place.  To the contrary, I think we’ll see aircraft such those on extremely dense routes of medium distance that are hub to hub as well as capital city to capital city.  The first, most logical route is NYC to London but there are others as well.  For instance, California to Japan is another great use for them.  Australia to the United States is another logical use as long as the competitors on those routes remain relatively few.  That could change as more airlines obtain the 787. 

At the end of the day, both the Airbus A350 and 787 (and the 777 for some time to come) will be the real players in long haul fleets over the next 20 years.  It’s notable that the 787 is the first long haul widebody aircraft that has the flexibility and economics to become attractive to forming a Low Cost Carrier that flies international routes.

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A new executive team for the merged airlines Continental and United Airlines has been announced.  We already knew that Glenn Tilton was moving up to non-executive Chairman and Jeff Smisek would be CEO.  However, now we officially know the fate of John Tague.  His position of President is going to Jeff Smisek. 

John Tague is largely credited for the operational turnaround at United and appears to have done a great job while there.  I think it is a shame to see him going away and I do hope another airline out there scoops him up. 

You know, someone like American Airlines who could use a little Tagueness. 

Also going away is Kathryn Mikells, current United Airlines CFO and also somone who has gotten a lot of credit for getting United’s financial house in order. 

Frankly, it bothers me to see the two shining stars of United leaving.

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One thing coming out of the 2nd Quarter financials from several airlines is, once again, just how much baggage fees are adding to revenues and, more importantly, profit.  United President John Tague is expecting that this kind of ancillary fee could soon be adding a billion dollars more to revenue and that is from its current levels of $350 to $400 million.

Like them or not, those numbers are hard to ignore. 

It does make me wonder how Southwest Airlines will continue to defend its no baggage fees approach going forward.  Load factors on airlines are at astonishingly high levels and that means that Southwest isn’t necessarily siphoning off customers from airlines with those fees.

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and I don’t care.  The customer was flying standby and even if you’ve boarded, you are subject to the whims of anything when you fly standby.  Don’t want to be subject to that?  Don’t fly standby.

Here is the STORY on the Consumerist blog. 

I don’t care if it was a 14 year old fat kid or a 44 year old giant of a man.  Southwest shouldn’t be apologizing for removing a standby passenger from their flight regardless of their frequent flier status or “normal” procedures.  My opinion would be different if this person wasn’t flying standby, yes, but that isn’t the case here.  In fact, this strikes me as one more spoiled frequent flier lashing out because they didn’t get what they want.

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Coming out of the latest financial reports from Delta, several news outlets noticed that Delta has plans to continue to acquire used MD-90’s for their fleet.  Unlike almost any other airline, Delta has found a use for these aircraft that beats the economics of the 737-800. 

Surely the low acquisition costs and high reliability of these aircraft make a good case for their purchase.  The MD-90 is a half generation newer than the MD-80 aircraft flying out there and since most were produced in the mid to late 1990’s, they have plenty of life left in them to be used for an economical period of time.   It’s clear that Delta prefers to bridge the gap between the current offerings of Boeing and Airbus and what future aircraft that may come along late in the next decade.

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The Seattle Post Intelligencer has THIS story on a new 3 Hour Rule study done and it being condemned by the DoT.  Two “consultants” did a fast and dirty study on the 3 Hour Rule and its effects by using the first month’s data available (May 2010) to conclude that airlines were canceling flights to avoid risking fines.

I’ve said it BEFORE and I’ll say it again:  We have no meaninful data on this rule and its effects and it will take 12 to 24 months to have enough data on its effects. 

To do a quick and dirty study like that and make it public that quickly is bad statistical science and makes it and its authors (Darryl Jenkins and Joshua Marks) highly suspect.  I would like to know who is paying these “consultants” and what their credentials are.  You can see more HERE. 

These two people are describing themselves as a collaborative research program between the industry and Marks Aviation LLC.  In addition to a study that is bad statistical science, their website is bad too.  If one looks up Marks Aviation LLC on Google, one finds another really bad website you can see HERE. 

Perusing that awful piece of HTML, one discovers that Joshua Marks real claim to industry knowledge is some brief employment by MAXJet Airways.  While Josh claims a good education at Harvard, it would appear he’s been out of a job since 2008 (who hasn’t?) and I’m guessing Josh read somewhere that if you did trade studies, you bolstered your credibility while looking for a job.  Working for MAXJet Airways isn’t much to claim for experience considering its extremely limited operations, failed business model and its nose-dive into bankruptcy. 

All in all, I think Josh is trying to land a job and I think he’s trying to do it by stirring things up publicly so that he might get some attention from a real airline.  I’ve no objection to trying to get a job and I’ve no objection to “consulting” in the aviation industry while you look for one.  I have no objection to Josh even claiming some airline experience.  However, I object loudly to his “study” based on 1 month’s data and the first month at that.  Someone with a Harvard MBA really ought to know better.

As for Josh’s partner in this criminal study, Darryl Jenkins, well, his WEBSITE is bad too.  If Darryl was as credentialed and seasoned as he claims, he wouldn’t have put his name on such a bad study.  So that calls Darry’s credentials into question.  Older and wiser should know better.

Sorry folks, there isn’t anything to see here.  Just a bad wreck on the Airline expressway.

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Recently the FAA has required operators of 767 aircraft to inspect the engine pylons on their fleet because cracking was found on a few pylons in the American Airlines fleet recently.  A co-worker expressed concern about this because they will be flying an American 767 in a few weeks and asked about it. 

I would have absolutely no worries about flying on a 767 of any type despite this discovery.  As aircraft age, they do develop new trends in how their structures age.  While the pylons found had cracked, very few, so far, have been discovered to have actual cracks.  I have no doubt that there will be increased inspections on this area of the aircraft and if pylons are showing fatigue, they’ll be replaced immediately. 

Yes, it stirs up pictures of a certain DC-10 from the 1970’s in Chicago.  However, there are differences between the two aircraft.  First, the DC-10 cracks developed because of improper maintenace procedures.  The cracks found on the 767 result from simple metal fatigue.  How is that different?  In the latter case, the progression is much more preditable typically.  In the former situation, severe stress was being placed on parts and in areas where it wasn’t supposed to be.  It is kind of like feeling sore and tired and how you got that way. If you were beat up by someone, you’re sore and tired and you may have other injuries.  If you’re just old, it’s a natural consequence of age and something you can do something about but it doesn’t necessarily indicate catastrophe or other injuries either.

Yes, fly the 767 with confidence.  It’s an aircraft that will be around for some time to come.

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Continental Airlines and US Airways have gone from red to black in their latest 2nd quarter earnings reports and it’s a remarkable performance for both airlines.  Continental wobbled a bit in the 1st quarter but came back with a strong report of $233 million report and when you combine that with United Airlines earnings, you see a potential competitor to Delta that is the equal if not superior. 

Delta Airlines, American Airlines and the proposed ContiUnited merger all will result in airlines with revenues between $23 billion and $28 billion and it just strikese a yellow highlighter across American that it had a gap of over $400 million in profit this past quarter.

US Airways’ result, however, is even more impressive.  In fact, US Airways in general is becoming more and more impressive.  Operationally, they’re hitting high numbers on completing flights on time, losing baggage and just generally making people feel good about their choice.  This is not the airline you saw even 2 years ago and if I were asked about flying them today, I would highly recommend them at this point. 

US Airways came in with a net profit of $257 million this quarter and they did this with the least relevant hubs in the industry.  They did it despite the fact that after nearly 5 years their pilots still haven’t decided upon a union and negotiated a contract.  They did it despite becoming the third wheel among the Star Alliance’s US based partners.  They did it despite making Las Vegas, at best, a focus city instead of a hub. 

I would love to see some of that DNA move over to American and get things sorted for once.

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That’s a less than thrilling announcement.  To be fair, American Airlines has lost a great deal less money for Q2 this year than the previous year’s Q2.  This year’s Q2 loss is a bit over $10 million while last year’s was $390 million. 

The problem is that while this is an improvement, it also highlights just how far behind the curve AA is compared to its brother legacy airlines in the United States.  With Delta and United reporting huge profits for Q2 and Continental sure to follow with impressive numbers, American Airlines’ disadvantage is only highlighted. 

American blamed much of its Q2 losses on higher fuel prices.  The problem with that is that the fuel price to AA is essentially the same price it is to every airline in the United States.  The only mitigation for that is hedging and AA does engage in hedging.   So, higher fuel prices over this time last year isn’t really a very satisfying answer for what remains a result that is staggeringly far behind other US legacy airlines.

AA has attempted to mitigate that stark contrast by saying that, over time, other airlines’ costs will begin to approach AA’s again and the gap will narrow considerably.  Well, that sounds good but . . . that’s going to take years and years for that to happen.  What about investors today?  In addition, whether or not that gap narrows is contingent upon how each airline manages itself.  Is the airline doing mortal combat with its labor groups or is it finding common ground and securing productive contracts?   In other words, AA has good PR for that gap but it doesn’t have a substantive answer.

Or does it?  AA also just got DoT and EU anti-trust immunity to form closer partnerships with its Oneworld brothers, British Airways and Iberia Airlines.  In addition, it is on track to receive the same in a partnership with Japan Air Lines across the Pacific Ocean.  AA says that these partnerships could as much as $500 million in revenue by 2012.   That sounds like a lot until you realize that that is a 2+% revenue gain.  And that’s revenue, not profit. 

At the end of the day, we hear a lot about strategies AA has involving new partnerships and re-focusing on core cities.  We hear a lot of mitigation of cost gaps between AA and the rest of our legacy airlines.  We sometimes hear analysts praise AA for avoiding bankruptcy . . . usually right before the analyst highlights just how much that put AA at a disadvantage today. 

What we don’t hear about is substantive and real progress made towards reducing costs.  We hear noise and we see somewhat halfhearted attempts to paint a picture that something is being done but we haven’t heard about the real progress made towards not just containing costs but reducing them. 

At what point do analysts and investors require AA’s executive team to show them the money?

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