May 26, 2016 on 3:31 pm | In Airline News, Airports, security | 2 Comments
So the TSA doesn’t have enough staff to manage itself appropriately at major airports and expects things to be particularly bad this summer.
Their go-to solution? Dear Airlines: Can you drop baggage fees?
Give me a break. I hate baggage fees at least for the first bag checked and even I think that’s a stupid idea. The revenue impact that has on the airline is so large that I would actually suggest it more economically smart for the airlines to just fork over money to the TSA to hire people instead.
The TSA hasn’t managed itself competently. It has a long history of criminal behavior by its officers. The agency has never competently staffed itself at many airports.
I am reminded of the year I spent one afternoon in San Francisco last fall. I needed to change terminals at SFO and had to leave the security area to move from the International Terminal to Terminal 2. That took about 3 hours primarily due to standing in line for security.
Was the hold up due to that many people? Nope. If you had staffed the other 4 scanning machines I would imagine that things would have proceeded in a timely manner. But instead we had a 2.5 hour line wait at a major international airport on a Tuesday afternoon.
We don’t take security seriously and we don’t staff for it seriously. We don’t even use all the money taxed for it. Instead, we re-allocate taxes raised for security to reduce the deficit.
Care to guess who is responsible for that exceptionally anti-business move? That would be the Republican led Congress.
When we don’t adequately staff something like this, it is a billion dollar impact to our economy. We literally impede commerce within this country. This isn’t about people who should just shut up and wait an extra 10 minutes before taking a trip to Disney World.
To the contrary, most air travel is business related and contributes heavily to our economy.
We should have a big problem with how travel is impeded in this country. It’s not a “this is the wealthy” moment. It’s a “this is an economic driver for this country” moment. All too often we think the only people using the airlines and airports are the elite. That’s just not true. We think that only travelers are affected by what happens in our airline transportation network. That’s not true either.
So what are you going to do about it?
October 11, 2013 on 1:59 pm | In Airline News | 1 Comment
Last week, Delta CEO Richard Anderson made the comment that there was no apparent effect from the government shutdown on airline business. While the effect was not immediate, I truly think we’re going to see some down times (again) for the airlines in this country.
Economic uncertainty leads people to defer purchases, travel and seek alternatives to face to face meetings in business. We have seen this time and time again. Corporate America’s reaction to the 2008/2009 economic crisis shouldn’t be forgotten by now but it seems to be.
The shutdown introduces uncertainty about our future. Economies aren’t just driven by the stock price on Wall Street or the unemployment numbers calculated by the government. They are a kind of living, breathing creature.
And not a smart creature either. Economies tend to be dumb and emotionally reactive. They are not nuanced and subtle and they do not act with patience. One would like to think that they reflect the whole of those participating in them but they don’t. They just don’t.
So, when uncertainty from a government shutdown is combined with the uncertainty and growing fear that a failure to raise a debt ceiling introduces, I do worry for the industry.
Creatures that are kind of dumb and reactive don’t do well when Congressmen who are veterinarians by trade start making statements that they have “read a lot” about the economy and believe that “nothing will happen” if the nation defaults on its debt.
No, it isn’t emotionally upsetting to anyone when the most financially strong country in the entire world defaults on its debt.
Anyone who wants to vote Congressman Ted Yoho out of office for saying things too stupid for Congressmen to say is welcome by me. The alternative is that Florida should get exactly what it asked for in electing such person to that office. Your choice, Florida. Make it soon.
Congressman Ted Yoho – He’s read about economy and knows what’s best for the United States photo from Wikipedia
Business travel is one of those expenses companies very quickly act to restrain when uncertainty or hard times come about. You can bet that CFOs and CEOs are already instructing people within their company to curtail expenses, especially travel.
Because in times of uncertainty, it’s best to hold on to what you have as tightly as possible.
The political stalemate over the shutdown and the debt ceiling is going to be the undoing of 2014 for the United States left to continue much longer. Whether you approve or disapprove of the Affordable Healthcare Act or not, that piece of legislation was not the law to fight over and put our country at risk.
I personally think that there are far greater issues that could have been debated over than whether or not greater healthcare coverage for all in this country was a good or bad idea.
I also think that the failure to acknowledge that a great deal of our debt resulted from an economic crisis of global proportions and which originated from a fundamental failure to properly oversee and regulate financial markets is egregious on the part of both houses of Congress.
What happened in 2008/2009 wasn’t ordinary by any stretch. Entire industries which are huge i this country were literally at stake. Extraordinary times have extraordinary consequences that take time to get past.
It’s beneath the dignity of this country to threaten shutdowns that hurts its businesses and citizens and it’s beneath the dignity of this country to threaten default on debt simply to force a change in a law.
September 14, 2013 on 1:00 am | In Airline Fleets | 2 Comments
A study was done on which airlines in the US were most fuel efficient and the scores are in. First, let’s take a look at them:
||FUEL EFFICIENCY SCORE
||EXCESS FUEL PER UNIT TRANSPORT SERVICE
I find a few interesting and anecdotal observations to make in this list. Be aware that this study was done using 2010 data.
First, notice that the “happiest” airlines are nearer the top. That doesn’t mean all of them are happier places to work, it means that it is notable that many of the leaders are also airlines who take reasonably good care of their airlines.
Second, let’s take note that those that are better than the industry average are airlines who are far less involved in “hub” flight operations. This makes sense as the airplanes are flown more efficiently in a point to point orientation. Why does this make a difference? Part of the fuel efficiency measure is centered on the airline making fewer connections to get between a city pair.
Third: Old fleets made of old MD-80 aircraft are clearly not performing well for airlines. That said, two of the more profitable airlines out there have them (Delta and Allegiant).
Fourth: Hubs with less weather impact and with more central locations may be best. Continental Airlines had Houston, United had Chicago and Denver and Southwest uses secondary airports for focus cities (Chicago, Dallas).
Fifth: Newer fleets clearly are favored and the reason is obvious, I think.
Sixth: No matter how many “advantages” you might have, bad leadership shines through nontheless. I’m talking about American Airlines.
September 6, 2013 on 1:29 pm | In Airline Service, Airports, Deregulation, Mergers and Bankruptcy | 2 Comments
Over the past week, I keep thinking about a few things related to the US Government’s stance on the US Airways / American Airlines merger and, specifically, their cited concerns about the merger. Here they are in no particular order:
- The DoJ was remarkably absent when the Wright Amendment undoing was being done. Love Field Airport was essentially made a single airline airport . . . forever.
- American Airlines now controls the following terminals at DFW International Airport: Terminal A, Terminal B, Terminal C and parts of Terminal D. The remaining terminals available to other airlines are . . . Terminal E
- Delta . . . Atlanta . . . enough said.
- No one seems to be trying to preserve flights to and from small cities in other parts of the country but anyone who wants to remove silly flights into Reagan National is deemed a danger.
- Delta . . . Minneapolis . . . enough said.
- Delta . . . Detroit . . . enough said.
- United . . . Houston . . . stranglehold.
- Southwest . . . Love Field and Midway airports
By the mandate cited by the DoJ, the antitrust department would appear to have a strong duty to investigate and correct these defects as soon as possible.
August 19, 2013 on 1:00 am | In Airports, Mergers and Bankruptcy | No Comments
This very same government, the Obama administration, along with this very same set of Congressmen who all profess great dismay at airlines and who offer that they are there to protect the consumer have ignored their role in what I would describe as a blatant shakedown.
It’s called the ever increasing taxes on airlines and travel.
Taxes have increased so much that they can represent from 15% to 20% of the cost of an airline flight to someplace in the United States. Taxes are focused directly on the consumer and the consumer, the person who is actually flying, is being asked to bear the whole burden of the infrastructure necessary for commercial airlines.
The taxes are so great that they now *do* impact the decision to travel. In fact, the taxes are often so egregious that they represent the highest portion of the increased cost to travel today. They are grossly impacting the ability of airlines to win customers and stabilize their business.
Indeed, our current government’s inability to get its act together on sequestration has materially and substantially affected the airline industry this year in that we are seeing slight negative growth as a result.
The argument that a user should pay for an airport seems logical to many at first glance but consider the rather dramatic and powerful economic impact a major airport has on an area. Consider what the D/FW area would be if DFW airport did not exist today. Would ExxonMobil be headquartered here? Would we be a major tech center? Would bankers still want to bank here? Would we have not one but 2 major airlines here?
We all benefit from these airports and airlines and the ability to travel. It’s time we all share the burden of that.
So, if we truly are worried about the consumer and the financial impact on them. . .
. . . Could we please redistribute the taxes in place and share the burden more fully all around?
March 13, 2013 on 10:50 am | In Airline Service | No Comments
Airlines are pushing hard to use XML for defining and exchanging fare data instead of the current standard which is more than 4 decades old. One company, Farelogix, is showing just how smart it can be to use this because it allows airlines to define an entire fare by more than just a base price.
Airlines will be able to use this data presentation to present a more full picture of what is available and the traditional GDS (Global Distribution System) companies do not like this one bit. They want their death clutch on the data in the form of the industry proprietary standard and they want it fuzzed up.
Truth be told, I took airlines to task for trying to eliminate GDS companies from the equation a couple of years ago. Now I would like to take GDS companies to task for not being a part of the solution.
So much of the airline industry relies upon what is, at best, very much legacy IT systems. Even the most modern reservations systems aren’t so much modern as they are just not as old as others.
A good deal of my day job involves understanding the various propositions involved in IT systems for both transmitting as well as processing data. I’m on the airlines’ side.
XML is the right choice and, frankly, there really shouldn’t be debate on this question. It’s smart, it’s flexible, it’s an open standard and it’s used by every modern IT system.
Yes, GDS companies are going to have to re-engineer their entire systems. Tough. This is the kind of thing that should have been done 10 years ago and was done by many other industries.
Yes, it’s going to present more opportunities to present data in more ways tailored to a customer. Yes, it could be tailored in ways that might seem threatening. My response is that the more we encourage information and options in this system on the part of both airlines as well as GDS companies, the better things will get for a customer. Seriously.
Information is power. Why do you think a better, more open and more complete standard for data is so threatening to incumbent GDS companies?
XML defined data open up possibilities for more efficient IT systems using the latest in protocols such as DDS (Dynamic Data Distribution) to be built. This means IT systems get less costly for airlines, more robust for consumers and if GDS companies want to remain in the game, they can figure out how to add value just like the rest of us in the real world.
This really is what we want as consumers and we would be well advised to break this GDS hold on this data.
January 5, 2013 on 1:00 am | In Airline Service | 1 Comment
Airfarewatchdog.com has a survey indicating that American Airlines has the rudest employees followed closely by United Airlines and then to a lesser extent Delta and US Airways.
It comes as no surprise that the legacy airlines would have these higher “rudeness” ratings given the trials that their service staff have been through in comparison to others.
But there is more to it, in my opinion. These top dogs are legendary for being micro-managers of their service staff. There is no empowerment at these organizations that permits employees to solve problems and win customers. There is a fear that employees will give away the farm if permitted to do so.
Curiously, that has never been the case at Southwest Airlines where employees are quite empowered. Employees know when someone is trying to scam their airline and generally will defend the airline and its values quite well when given the chance. Employees know that just handing things out to placate people isn’t the answer in many cases and they do know that the more they hand out, the more impact it has on the profitability of the company and therefore their salaries.
But I also think that legacy airline infrastructures just don’t care very much about service. They see themselves as selling a commodity rather than a service.
Is an airline trip a commodity to you? Or a service you’re buying?
July 19, 2012 on 1:00 am | In Airline News, Airline Service | 3 Comments
Yesterday, I discussed how the pilot shortage is unfolding domestically for airlines and the growing problem it will become in the very near future.
If the problem shows up in 5 years, we are already late in addressing the problem. It takes time for people to move through the various levels of experience needed to become an airline pilot. You cannot make an airline pilot in a few weeks or months.
In my view, there are a few things that could be done to start mitigating the problem.
1) Find a way to apprentice pilots into the airlines. Pay for the training and education in return for a commitment and a living wage that sees salary growth on a slower curve.
2) Revisit this 250 hours vs 1500 hours required rule. Raising it to 1500 hours was in response to the Colgan Buffalo accident and, in my view, an inappropriate reaction to a single event. Lower the hours to 500 or 750.
3) Turn regional airlines into these apprentice shops and tie upgrades between the regionals and national airlines.
4) Attract new entrants with bidding and seniority systems that reward productivity. Currently, there is no incentive to become a pilot for a legacy or SuperLegacy airline as you’re likely to sit in the same seat for 10 to 15 years in many instances. Find ways to reward productivity because it is a win for the airline and a win for the pilot willing to work hard for his / her upgrades.
5) Find ways for pilots to make their skills and their seniority more portable to other airlines. If airline A needs to furlough 300 737 pilots and airline B needs 100 more 737 pilots, there has to be a way to allow those needs to get met without punishing the pilots with entry level salaries again. ALPA, you could work this out if you wanted to. The point is to facilitate supply transferring to where there is demand. Otherwise, pilots tend to “hang on” at existing airlines in the hopes of keeping their seniority while seeing their skills wane from lack of use.
6) Find ways to sponsor flying clubs at the high school level. That’s where the bug for flying is best started. The teens who learn to fly at 15 and 16 are teens you can recruit out of college when you need them. The industry should be doing this already but doesn’t. Flying is expensive and horribly so compared to 20 or 30 years ago. Many who would willingly be attracted to the profession get diverted from it due to the entry costs.
Nothing here is revolutionary. Most of it embodies steps that could be implemented in one year or less. All of it requires the industry to acknowledge the looming problem and to be allowed to cooperate with each other to foster a better supply of new entrants when they’re needed.
July 18, 2012 on 1:00 am | In Airline Service | No Comments
There has been increasing chatter in the airline world about an impending pilot shortage. This is a shortage that some regions of the world are already beginning to feel. Here in the United States, there is no real pilot shortage but largely due to industry consolidation and bankruptcy as well as new FAA regulations that extended pilots’ careers from age 60 to age 65.
But the shortage is coming. Those pilots whose career got extended (and by default who stalled the careers of those pilots who are junior to them) are now approaching retirement age again. That alone will flush out an ever increasing number of pilots. In addition, the pilots left standing after industry bankruptcy and consolidation are the most senior and that leaves the balance who are working for legacy airlines pretty senior compared to the rest of the world. Again, those people will only be leaving in ever increasing numbers.
At the bottom, there are ever increasing barriers to entry for new pilots. Frankly, why someone would choose to be a pilot today has to be questioned quite a bit. It typically costs in excess of $100,000 to get the education and training just to position oneself to start accumulating hours necessary to become an entry level pilot at an airline. New law requires new pilots at airlines to have 1500 hours intead of 250 hours just to start work.
Let’s not forget what should attract a person to the career: A reasonable salary, reasonable benefits and reasonable job security. None of those exist for pilots who are beginning their career. Today’s typical pilot starts out in extremely low paying positions (less than $25,000 / yr) at airlines such as regional carriers whose position in the industry is tenuous at best. There is no reasonable salary (and often no reasonable salary for a decade or more after entering the industry), the benefits remain fairly good at most airlines but the job security is no longer there either. Many pilots find themselves laid off, furloughed or dismissed over and over again.
Tomorrow, how this problem might be fixed.
May 29, 2012 on 11:18 am | In Airline Service | No Comments
There have been a few people out there attempting to get into the scheduled commercial airline business over the past year. A recent example is the group attempting to start a new People Express with 737-400 aircraft. All have been aiming at niche markets and I think that is doomed to failure.
It’s attractive to look at the old Southwest Airlines / Ryanair model of flying to secondary airports and think that you too could succeed with this by flying into an airport near a major city. That did work when airfares where stunningly high in such markets. Today, not so much.
The problem is that these niche carriers have to compete with the likes of Southwest, JetBlue and even Allegiant and Spirit Airlines. These airlines are flying into major(ish) airports with low fares and offering rock bottom fares in most cases.
Even flying into major markets with a superior service doesn’t always guarantee profits. Take a look at Virgin America who began service in 2007 and has not yet earned a sustained profit. They hang on and even incrementally improve their performance but even after 5 years, the airline does not earn a return on investment yet.
If you want to succeed with a new airline, you have to first have a monstrous amount of capital. It’s capital that gets the deals done for things like aircraft and facilities. You have to have a good service product at fares that are competitive. Competitive fares exist across the board among airlines, however. Even legacy carriers are offering extremely competitive fares in most markets.
You have to be brave enough to go up against the largest airlines in the world. In the United States, that means competing against Delta, United, American Airlines and Southwest. Not a single one of those airlines is afraid of competing and all have learned lessons in not ignoring a newcomer.
New airlines will be started but now isn’t the time. The US airline industry needs time to digest its changes and time to let things settle on the markets each airline is serving. Even when they are started and successfully so, they will have to be managed by people who want to grow the business.
JetBlue was the major up and coming airline in the industry right up to the moment the board of directors panicked over operations due to winter storms and fired David Neeleman. Now it’s an airline that is looking for routes to feed into existing structures and it ventures outside its home areas rarely.
Speaking of David Neeleman, he is the one I expect to see back in the United States one day. I think we’ll see him starting a new airline sometime in 2015 to 2017 and it will be a refinement of his JetBlue and Azul (Brazil) airlines but with even more capital that he has raised in the past.
But most will fail. The attraction to starting, owning and operating an airline is strong but it requires a very special leader and those people come along only a few times each generation.
January 4, 2012 on 1:00 am | In Airline News | No Comments
2011 wasn’t the worst year for airlines and 2012 won’t be either. Instead, I think we’ll see more of the same in most respects.
Airlines will continue to constrain their capacity and that will show more discipine than I thought they had 3 years ago. They’ve proven me wrong and I think the results are too good for them to not to continue over the next 12 months.
Fuel costs will continue to be a difficult thing for airlines to manage. There will continue to be volatility but I don’t think we’ll see anything like 2008/2009. The financial crisis in Europe will reduce some demand on oil but I see no real economic growth in any part of the world that will drive demand either. The truth is that the emerging economies are largely dependent upon demand from both Europe and North America and neither of those economies will see high growth in 2012.
Airlines will continue to make large orders for more fuel efficient narrow body aircraft. This only makes sense as the gains are more than enough to justify the purchases and now is the time to gain an advantage in bargaining with both Boeing and Airbus. Furthermore, airlines need to hedge against their labor costs which will only grow over time.
Aircraft manufacturers have a much more sure path for the next 10 years now. Boeing will be biding its time on improvements to the 777 until it sees more definition of the A350-1000 and it will throw its resources into ramping up 787 production, 787-9 development and 737MAX development. It’s possible that we’ll see a real 787-10 announcement in 2012 but, if so, probably not until the latter part of the year.
Airbus has to get its act together on the A350 and try very, very hard to prevent too much schedule slip. Despite its efforts, I think we’ll see more schedule slip and it won’t reveal the entire picture as that unfolds. While I don’t expect quite the same delay as the 787 saw, it will be a significant delay and it will impact Airbus. They’ll also try to flog the A380 as much as possible and may even succeed with small orders in parts of the world it hasn’t penetrated much to date. I do not see any US based orders for the A380. Furthermore, Airbus made some big promises for the A320NEO and it’s got to work hard to deliver on those. They’ve made it out like the A320NEO is a no-brainer for development and while it is an incremental improvement, the engineering to deliver is non-trivial.
Bombardier will work its tail off to sell more of the CSeries and I think it may even succeed. The sweet spot its lineup offers will become more attractive to airlines once they see Bombardier actually perform in the development and test of this aircraft. The CS100 isn’t the attractive aircraft but its the one that will fly and deliver first. Once the performance of that aircraft is established, I think we’ll see orders from US and European airlines come in large numbers.
Embraer has got a nice grip on the regional airliner business but it also has a problem in that, right now, there is no growth path into a larger plane for purchasers. It has plans to work on re-engining the E-Series but I think they’ll concede the need to develop a larger airliner as well. The Bombardier CSeries presents just a touch too much threat in the future.
I don’t think we’ll see much from the other regional airliners being developed. The Mitsubishi MRJ doesn’t feel quite right for airlines to me and doesn’t offer a growth path into a larger airliner. The orders its racked up so far are fairly paltry and at risk, in my opinion.
The Sukhoi SuperJet, on the other hand, has a real chance, I think. It’s Westernized, it’s flying and it does feel like its the right size. The real challenge in this aircraft is ensuring support and with Boeing as a consultant, it may well have some help in that arena. If it does succeed, that success will begin in Europe as well as for airlines of lesser developed areas such as the Middle East, India and the Far East. If any orders come from the US, it will be years in the making.
If anything stirs in the US airline industry, I think it will be in the LCC arena and I think it will be small(ish) if anything. I do not think we’ll see any legacy consolidation despite wishful thinkers for a US Airways / AA merger. Something like that becomes much more likely in 2013.
I think American Airlines will plod through its bankruptcy in 2012 with a bit of scandal here and there. I think its labor force is about to take a beating on wages and benefits and I think the resulting bitterness will last for years. I also think that United and Delta will be growing a bit more concerned about AA late in 2012 once they have a picture of what AA’s cost structures are likely to be.
2011 was largely a “rebuilding” year for the airline industry. 2012 will be largely so as well. Until the world economies recover, the best the industry can hope to do is manage its problems and earn a bit of money. That’s eminently possible for them to do.
December 26, 2011 on 1:00 am | In Airline Service | No Comments
I’ve had cognizance of the airline industry in one way or another for over 35 years and if there is one thing that stands out the most, it’s the inability of the industry around the world to manage their PR. The truth is, airlines are PR challenged and most couldn’t put positive spin out there for themselves even if it involved a direct competitor failing.
Airlines have done a terrible job when it comes to political lobbying and they mirror that performance with the flying public. The industry is bullied and overtaxed on a regular basis but the airlines response is often to get boisterously defensive in the public arena. If there is one thing I know, it’s that you will not beat a politician when it comes to a public argument.
Politicians are very saavy at this game and they know how to throw an airline under the bus way better than airline knows how to load a piece of luggage. It’s second nature to them and because of how the airlines handle themselves, they frequently become a target that politicians can use to score points.
Airlines are the opposite of, say, defense contractors. They do not know how to spend their money, make friends with politicians or how to make themselves important to a politicians consituents. When they do try, it makes one cringe frequently. As a result, airlines and their customers suffer greatly for it.
What’s worse is how airlines handle themselves with their customers. Airlines are always in a defensive crouch and certain that their customer is trying to one up them. When accused of poor service, particularly in a public forum, their response to either go silent or to lash out in a manner that just seems mean. The poor responses to public problems often stun me with their lack of empathy for the very people who ensure their business viability.
In one sense, airlines know that they sell a commodity in a fairly free marketplace and that passengers are overwhelmingly making their choices based on price first and schedule second. Airlines know that many people will be abused for years before changing airlines and voting with their pocketbook. Consumers are to blame here in their drive to save $10 instead of actually paying for what they say they want most: service.
The recent Alec Baldwin incident on American Airlines and Leisha Haley incident on Southwest Airlines causes me to pause and ask a question of the airlines. Do you not understand that employing some humour in these moments can greatly defuse the situation?
I’m always leery of these incidents because while I think there is always a grain of truth in what these celebrities are complaining about, I also think that their public behaviour is atrocious. It is the behaviour of a 3 year old rather than an adult and I resent that out of people who gotten past the age of 30.
Furthermore, I would argue to the airlines, you really do not have to be all things to all people. If someone has truly acted up on your plane, defuse it publicly with humour and ask the person to not fly your airline again. It is, after all, your house.
There is a flip side to this, though. I have noticed airlines adopting what I would call an interesting lean towards espousing “family values” in what they expect from their passengers. This shows just how naive an airline can be. We all like to think that we’re “average americans” in this world but the truth is, damn few of us really reflect that picture when it comes to the “family values” image.
We’ve all got skeletons in the closet. It truly is a diverse world that we live in. It bothers me considerably that a Muslim doesn’t fit within that picture. Nor does a gay or transgender person. Nor do many other non-Northern European races.
And that’s wrong. When you ignore that reality, you are actually ignoring the *majority* of your potential customers, not some small minority. It comes as no surprise to me that many minority groups travel by airline far less than that white male/female segment. The problem is, when you tally up all those minority groups, they encompass a group of people that greatly outnumber that white male/female segment.
In short, it’s bad business to try to enforce those values onto your customers.
By the way, inappropriate sexualized conduct on a plane is always inappropriate. I think that any adult over the age of 16 really does know what is and isn’t appropriate for what is a public area albeit enclosed with a fuselage. If you don’t. don’t be surprised when you get chastised for the behaviour.
Furthermore, when the rules say you can’t do something, you can’t do it. Not being able to play a game on your smart phone during takeoff isn’t an infringement on your “rights”. It’s a rule and a rather smart one at this time. If research and circumstances change, I’m sure the rules will to. But the customer needs to quit acting like a know-it-all jackass in this area.
Airlines could stand to evaluate their policies more completely and in the context of the times. All too often, they lag far behind of developments in the world and try to fit square pegs into round holes. It’s an unsatisfying experience for all. Every airline is guilty of this but some do behave better than others.
In the end, I cannot fathom why airlines do not do a better job of distinguishing themselves with better responses to their customers and government in the public. This isn’t an industry hidden from most of the public. To the contrary, it’s one of the most visible service industries out there. But airlines are ham-handed at best when it comes to dealing with PR challenges.
December 6, 2011 on 1:00 am | In Airline News | No Comments
As a result of the October snow storm delays that occurred at several Northeast airports, the FAA is moving to address those delays rapidly as it finds itself entering the Winter season.
Does this mean more punitivie measures against airlines? No.
The delays experienced a month ago were the result of diversions to airports that overwhelmed the airports’ abilities to deal with the aircraft and passengers. Boston refused additional diversions, for instance, due to problems they were experiencing and that caused Hartford to become more overwhelmed than is usual.
How will they do it? By bringing those diversions airports into teleconferences and planning sessions when those areas are about to be affected by weather. Oddly enough, this isn’t done much to date. But if airlines and airports are part of the discussion as to what is happening at what airport, they’ll be much more aware of conditions at airports they are considering for diversions.
For example, if airlines had known that Hartford was becoming overwhelmed, they likely would have chosen any number of other airports in the Northeast to divert to. And if those airports knew they were becoming the airport of choice for diversions, they will be much more likely to manage themselves appropriately including communicating earlier on when they are becoming overwhelmed.
It’s a good, practical solution and fairly easy to implement. The people involved from the FAA to airlines to airports are all professionals and capable to making rapid decisions based on changing conditions.
October 31, 2011 on 1:00 am | In Airline Fees, Airline News | No Comments
Airlines are upset at new taxes and fees proposed in the United States and have protested them vigorously in public media and by even handing out barf bags urging people to contact their Congressmen. Their main contention is that rising taxes will hurt demand and cripple their businesses.
They’ve also raised fares twice in the last 2 weeks.
No one ever said airlines were politically smart.
August 22, 2011 on 1:00 am | In Airline News | No Comments
Christine Negroni, blogger and journalist, has written that foreign ownership restrictions of US airlines is due for a change that would permit cross border mergers. She points out that the five biggest airlines by market capitalization are *not* US based airlines but rather airlines such as China Airlines, Singapore, Cathay Pacific, China Southern and LATAM.
The problem with her argument about market capitalization and how foreign ownership could drive that for US airlines is that it ignores a critical element in why those airlines have such high market caps. They’re well run airlines in areas of the world where money have very few places to invest in well run businesses.
The problem with US based airlines and their market caps is that they’re not well run airlines. Foreign ownership doesn’t change that. Trans-border mergers don’t change that either. If you think a foreign airline is going to buy a legacy US airline and run it better, you’re kidding yourself. Those same named airlines are interesting in that they also have access to a far lower set of costs in operating as airlines than US based airlines enjoy. In addition, they enjoy density on their routes that few airlines do get to enjoy and they also enjoy a certain “protected status” in their respective regions that airlines in the United States don’t get.
Furthermore, if you think that a merger between parties like American Airlines and BA/Iberia means that the BA/Iberia leadership runs the show, think again. While BA/Iberia knows how to run a smallish network with a global long haul business, they don’t know how to run an airline in the very unique competitive environment that the US is. American Airlines knows how to do both and they have something that very few other airlines have and that is the cash management know how for a theoretical combined unit enjoying $48Billion plus in revenues.
Here’s the thing: The US market is literally unlike any other airline market in the world. Some markets see one or two LCC carriers and 1 or 2 legacy airlines whereas the US has 4 enormous legacy airlines that would compete on a revenue basis with any other airline in the world. In addition, the US market has the largest LCC style carrier in the world with several other major LCC carriers in its market too.
Furthermore, there is no other place with the kind of network flying going on that we see in the United States. And the competitive market that represents is unyielding and brutal when compared to any other region in the world.
The ability for foreigners to own a US airline or for a US airline to merge with a foreign carrier or carriers is not going necessarily improve the financial health of a US airline.
That said, I, too, think the rules should be amended as long as we preserve our strategic interests in having the airline system that we have. The US airline system is a strategic asset worthy of preservation for both economic and defense reasons. It’s a global marketplace but it’s not a globally ruled marketplace and that’s important to remember. There are just a tiny handful of countries that enjoy that kind of transparent marketplace that we provide for ourselves and preserving our interests is not counterproductive to the airline industry nor US interests.
August 10, 2011 on 1:00 am | In Airline Fees, Airline News | No Comments
The Cranky Flier wrote on Monday that the “tax holiday” on airport taxes caused by Congress’ inaction on funding the FAA might have caused capacity planning problems for airlines and that it was therefore sensible that airlines would raise fares to close that gap to maintain predictable demand.
What the hell?
In addition to sounding like an apologist for airlines, that post may well ought to be a candidate for his own Cranky Jackass award.
When reading his blog entry, one gets the sense that this brief pause in taxes would have sent airlines into a major tizzy when it comes to capacity planning for the winter season. I assure that that was not a fear and that airlines are quite a bit more flexible than that.
It was obvious that the brief elimination of those taxes was just that: brief. That meant that for a brief period in time, a rise in demand would not have overwhelmed their aircraft or flights in any major way. More to the point, while airline demand is price sensitive, it isn’t *that* price sensitive. If it were, airlines would be able to fill aircraft 100% by offering just a week or two of sales going into the next season. And it wouldn’t take a big sale.
But we know that airlines don’t experience such opportunities and to suggest otherwise and justify what was, at best, a greedy move is just wrong.
While I do not like the move on the part of the airlines, I’ll also say that that they were free to do it and they’re also free to experience the negative press from doing so. I don’t think they should “hold it” and give it back to the FAA either. This is business, they made their move and it wasn’t illegal or sneaky but it was greedy.
The point made by more than a few Congresscritters that airlines have been grousing about taxes for years saying they depressed demand and now they’re enjoying the largess of the absence of those taxes was also valid. But airlines like to bitch about those things that directly affect their demand and never seem to pound on the table over taxes that affect travel.
You’ll never hear an airline scream about the taxes on rental cars and hotel rooms imposed by municipalities and states. And, yet, those taxes are far more egregious in many cases than any airline tax.
Taxes are necessary and they are what pay for our infrastructure. Complaining about them doesn’t make them any less necessary.
But back to my original point: Cranky’s argument is disingenuous at best and far beneath him, in my humble opinion, compared to the body of opinion he’s shared over the past many years.
March 23, 2011 on 1:00 am | In Airline News, security | No Comments
A couple of weeks ago a 31 year old Muslim woman was removed from a Southwest Airlines flight due to a member of the flight crew “feeling uncomfortable.” The woman, a graduate student flying to San Jose, wore a headscarf and actually had done nothing. So what instigated this? The flight crew member “thought” she overheard the woman say “It’s a go.” on her cell phone when, in fact, she had said “I’ve got to go.”
Quite a common phrase among people using cellular phones as a flight nears departure.
The TSA searched her headscarf but quickly realized that this wasn’t a situation warranting further searches and left the rest of her possessions alone. Despite the TSA’s assessment, the woman was kept from the flight and told that the flight crew wasn’t comfortable with her flying with them.
Southwest Airlines has apologized several different ways and offered compensation for the experience in the form of a flight voucher but the woman says she doesn’t want to fly Southwest after that experience. I can’t say that I blame her.
For 10 years now, we have treated a class of people very badly when it comes to flying. Although you may believe that it’s Muslims that I’m speaking of, I’m not. That class of people is actually those who look Muslim and/or strange or and/or Middle Eastern / Asian. That’s a pretty big class of people.
This kind of treatment is a direct result of the Bush Administration’s “one percent doctrine” which is, simply stated, that if there is a 1% chance that something is going on, it will be treated as fact rather than speculation out of an abundance of caution. It is a political response to a terrorist threat.
I usually avoid being political in this forum because I think it serves little or no good when it comes to a dialog about an industry. In this case, it’s unavoidable. It’s not that I’m anti-Bush or anti-Republican. It’s that I’m anti-stupid when it comes to security. We have ground our Bill of Rights into dust over the perceived threat of terrorism with respect to political considerations in this country.
We grossly abuse that class of people I spoke of a few paragraphs earlier out of an abundance of caution and I’ll note that that class probably comprises nearly 2/3′s of all people in the world. It’s a pretty large class of people even in the United States and includes a significant portion of people who are US citizens. And by grossly abuse, I mean in a way that 20 years ago would have been soundly reprimanded by popular opinion as well as by courts.
We grossly abuse our Bill of Rights when it comes to unlawful searches and seizures with our current TSA security checks at airports. I cannot think of another situation where we demand (not ask) that people give up all rights in order to use what is a major and essential transportation system in this country. People are afforded no protections from these searches whatsoever and the only response to objections to this treatment is “you don’t have to fly.” Well, yes, in fact, in many cases you do in this 21st Century economy.
Oddly enough, we don’t even protect people from criminal prosecution(s) resulting from these searches which aren’t a security risk to a flight. We just pursue the perceived “bad people” in every way possible, legal or not.
Most of you who read this are likely *not* in that class of suspected people. I’ve seen comments in many forums by people saying things like “it is a small price to pay for feeling safe”. The abrogation of these rights is centered in public opinion that is, at the minimum, based on political responses to security problems rather than fact.
Most of you likely don’t care because you think you’re largely unaffected by this. Perhaps but perhaps not. It’s far too easy to use these tactics against anyone by using that very same argument: “You want to feel safe, don’t you?” The problem is, you aren’t safe. As a matter of fact, you’re far more at risk for wrongful prosecution, harrassment and even 1st, 4th, 5th and 9thAmendment rights violations.
We are and should be a better country than that. We should behave better than this. The most shocking thing of all to me is just how easily everyone folded to this one percent doctrine approach and accepted the implications towards citizens and visitors to this country alike.
As for the airlines who are responding this way towards customers: You’re better than this. You all have started issuing apologies publicly because they cost nothing and appear to be the right thing to do. Apologies for honest mistakes are right and proper. Continuing to abuse a class of people and then apologizing for it after the fact is shameful. If your flight crew is so poor at realistically identifying flight risks, I would suggest that they don’t need to be working for you anymore. They are unable to perform an essential part of their job. They are reacting to anything instead of being experienced professionals.
And anyone who has been involved in real security issues will tell you that people who just react wholesale to anything are actually some of the biggest threats to real security.
February 26, 2011 on 1:00 am | In Airline News | 3 Comments
With the uprisings now occuring in North Africa and the Middle East, oil prices are rising quickly and we’re seeing prices as I write this topping $100 / barrel. Airlines are already sounding warning cries of higher fuel prices and their (potential) impact to revenues as well as fares and stock markets are reacting to this as well with airline stocks losing a fair bit of value. Analysts are speculating whether or not airlines correctly anticipated this rise and, in my opinion, already unfairly criticizing anyone they can point to.
No one can plan for these events. In fact, I don’t believe anyone can accurately plan for oil prices anymore. The idea that oil prices can stay stable is fantasy at this point. We cannot accurately predict what will happen to both demand and supply in the world at this time. An economic recovery and rise in production in one region might drive up demand. A political crisis in an oil producing region may well constrict supply. And to further complicate the issues, speculators in oil are not known for being very stable people either.
Furthermore, no one is going to stabilize current oil prices as the factors that influence the prices are far too great for anyone one country or groups of countries to try to influence effectively.
The best that airlines can do is manage in the “now” and let tomorrow worry about tomorrow. Not for nothing, that is exactly the approach US Airways has been taking and with great success. They have no fuel hedging in place and they’re realizing more from that than other airlines are from hedging strategies.
Should airlines continue to hedge? Absolutely but only with the goal of stabilizing and making their budgets for fuel costs predictable. To pursue a strategy to completely offset the volatility of oil prices only spells disaster for them. What that means is, yes, they should hedge some of their fuel costs to help stabilize their planning but to a certain degree they are at the whim of the market places.
Despite the doom for oil prices spelled out as a result of the uprisings previously mentioned, I think we’ll find that while there may be overthrows of government, the chances of reduced oil supplies are pretty slim. If anything, the chances for rising supplies in the medium term are great which would actually mean lower fuel prices. In the short term, they’ll be highly volatile and that’s life.
Expect rising airfares over the next 6 to 9 months and a slow reduction going forward after that. Rising airfares will be a function of 2 major factors: higher fuel prices and renewed capacity restraint on the part of most airlines in light of fuel price volatility.
In the long term, the only major airlines I see being negatively impacted by these uprisings and it is potential only for now are the UAE based airlines such as Emirates, Etihad and Qatar. Each of these airlines is heavily dependent upon their home countries being peaceful with strong economic growth and the certainty that those regimes have provided thus far. Given the volatility in Bahrain and Yemen, I would say that if those uprisings spread further into other UAE members, those airlines fortunes may well be very negatively impacted.
January 10, 2011 on 1:00 am | In Airline News | No Comments
Analysts say that airlines are betting that the recent surge in oil prices is temporary and they are not hedging their fuel costs any more at present. Airlines “hedge” their fuel costs by buying contracts on fuel oil that closely track with the price of jet fuel. If the price of fuel goes up, they earn more and that offsets the cost of jet fuel. However, if the price of fuel goes down, they earn less (or even a loss) and that raises the cost of their jet fuel.
Frankly, I don’t think oil will stabilize until both the dollar and euro stabilize as a function of recovering economies. The US economy is showing all manner of recovery now but it will remain slow and we still have an enormous debt to manage for the next few years. The dollar will remain weak for the time being and weak currencies make for more trading in things like oil right now. The more trading in oil, the more volatile its price is and the more likely it is to surge and retreat.
It’s a hard bet but it’s something they, the airlines, will have to revisit in a few months again.
December 27, 2010 on 1:00 am | In Airline News, Airline Service, Airports, Travel Hints | 1 Comment
We just saw what an impending storm can cause when it comes to flight cancellations. One thing that people often wonder at is the reason their flight was cancelled when it isn’t snowing yet in their departure city.
In fact, people are often left wondering what happened to their flight when it isn’t even forecast to snow in their departure city.
It has to do with with an airline’s network. An airline may have to cancel a flight in one city because the aircraft is stuck in another city due to weather. That’s really a common occurrence.
Sometimes an impending storm results in an airline cancelling flights in advance of the arrival of a snow storm. There are a lot of valid reasons for doing this. It may be unwise to send a flight out to a city where the airline doesn’t customarily overnight aircraft. Doing so potentially leaves the aircraft and its flight crew orphaned in an unknown city and unusable when weather does clear.
Since storms, particularly snow storms, can leave an airline’s network destroyed, it is attractive to the airline to keep its aircraft at its hub(s) so that when the storm does clear, it has the equipment to get people on their way immediately.
Another reason is that snow storms approach a lot of cities with a great deal of uncertainty. It’s poor safety to send aircraft to a city prior to a potential snow storm because that storm may arrive early causing the aircraft to divert or hazard a landing in poor conditions.
Flight cancellations are painful not because of the immediate inconvenience. They are painful because airlines often are incapable of taking care of a customer for days afterwards. That may be unacceptable. There isn’t anything that an airline is going to do about it unless forced to. The best alternative is to really weigh consequences of sticking to your travel plans.
Most airlines welcome a change to an earlier flight and offer the ability to do so without penalty in these situations. Take advantage of that. Sometimes no matter how much you want to go, you can’t. Skip your trip if you can get a refund and many airlines will offer such a thing during bad storms. Flex a little and avoid being that person stuck in an airport for 4 days clinging to the idea of taking a flight somewhere.