Archive: October, 2010
Southwest Airlines used its annual media day, staged at its headquarters at Dallas Love Field today, to tout its "bags fly free" ad campaign, discuss plans for its purchase of AirTran Airways and announce its schedule when it starts flights from Newark next spring. In case you're concerned, Southwest officials said repeatedly that they love not charging for bags because it has distinguished them from competing airlines, and the company has absolutely no intention of changing the policy.
The AirTran deal got much of the attention, with a senior executive predicating that Atlanta, AirTran's main hub and a city Southwest doesn't yet serve, could some day be the airline's largest city in terms of flights per day. That's an indication of how important Atlanta is to Southwest in filling in a gap in its route network.
The Newark schedule, to start March 27, will involve just eight daily flights to start, six to Chicago Midway and two to St. Louis.
The Inquirer had a good story today about travelers' ho-hum attitude toward the first full-body security screening equipment installed at PHL
The National Transportation Safety Board is taking a hard look at the regional airline business, a vital and little-understood part of the U.S. aviation system. Roughly half of all domestic U.S. passengers fly on regional carrriers, the ones we in the media often still call commuter airlines, which usually operate using names like US Airways Express or American Eagle. These are separate companies that the major carriers have so-called "code-sharing" arrangements with. The big guys contract with the regionals to feed passengers into their hubs from cities, both large and small, where the big airlines don't have enough traffic to justify using a jet with 130 or more seats. It's the world of all those smaller planes, from 30-seat turboprops through 50-, 70- and 90-seat jets -- planes you often don't know you're going to fly until you get to the airport.
The NTSB is holding a two-day forum in Washington on safety issues arising from airline code sharing, both the domestic kind outlined above and sharing of codes between U.S. and foreign carriers for international flights. The board's concern about whether the regional are as safe to fly as the major carriers arose from the fact that the last six fatal airline accidents in this country have been operated by the smaller airlines. Read a good USA Today story about the forum here; it includes a link to a longer AP story.
The USA Today story also references a survey, conducted by our locally based Business Travel Coalition, for the NTSB forum of more than 200 business-travel managers and other industry officials, who say the regionals' safety issues worry them and their travelers. The survey results make important and disturbing reading and can be found at this link.
The Inquirer today took a look ahead after the good news that airlines reported this week in their third-quarter earnings reports. Read on here...
The good news about airline earnings continued today, with United-Continental, Southwest and JetBlue all reporting profits. The industry roared back this summer from last year's recession, attracting more business travelers paying higher fares, raising leisure fares sharply as well, and not adding new capacity or seats for sale that it couldn't sell. Fuel costs, while inching up recently, have also been stable. Rarely in the past, in fact very rarely, have those things all come together at the same time. Here is a good roundup from thestreet.com that relates Wall Street's happy reaction yesterday.
Reporting today in a joint announcement, United made $473 million in the third quarter and Continental had net income of $367 million. The airlines reported jointly under the United Continental Holdings Co. name as they prepare to fully merge. Among the other major carriers, JetBlue made $59 million and Southwest $195 million, both of them third-quarter records.
Airlines are in one of those periods -- and there have been many of them over the years -- when their business models allow revenue to pour in. Fortunately for the industry, the end of the recession, at least for people who have jobs, has enabled airlines to raise fares sharply this year. And the improving economy coincides with efforts by airlines to shrink their way to prosperity by cutting capacity and employees. A few billion dollars in fee revenue doesn't hurt either.
Analysts estimate that U.S. carriers will report total profits of about $2.4 billion in the third quarter, compared with a loss of $260 million a year ago. US Airways, Delta and American's parent AMR reported the 3Q results today.
For those who travel frequently, the results of a study commissioned by the Federal Aviation Administration won't be surprising: Airline flight delays have a major economic impact in terms of lost productivity and extra expense -- an estimated $16.7 billion impact. Read more here about why so much emphasis is placed by the FAA on efforts to reduce delays by changing air-traffic control technology and procedures and improving airports.
Delta Air Lines told employees last week that it plans to hire hundreds of new bilingual flight attendants, and already is processing tens of thousands of applications to fill the positions. How many attendants will be new and how many will be recalled from previous furloughs is murky. A Bloomberg report published in the Saturday Inquirer indicates new hires will be "several hundred" in addition to 425 recalled from furlough. Another article, published online by examiner.com says Delta is adding 1,000 total. The company hasn't issued a news release that's posted on its Web site with other news releases to clarfiy.
The examiner.com article includes some other background information, including some that begs for more explanation. Delta's 20,000 flight attendants are in the midst of a union-representation election; they haven't been unionized at the old Delta but were at the old Northwest before the airlines merged. Those are facts. Here's what needs expansion: When Delta says its flight attendants make an average of $41,000 a year after 12 years for working about 75 hours a month, that refers to "hard hours," or actual airplane flight time. It doesn't count the hours flight attendants spend in airports before, between and after flights, or travel to reach a hotel on out-of-town trips.
One other factoid in the examiner.com story that shouldn't surprise anyone these days: The starting pay for flight attendants in training is $1,746 a month, or just under $21,000 a year. That's higher than it is at many carriers. Like many workers in many industries these days, those in the airline industry are making about the same or less than they did after adjusting for inflation than they did a decade ago. On the plus side, airline jobs usually come with benefits, and there is the perk of being able to fly for free or very little. But in many cases airline employees are working harder than they used to; the total number of employees in the industry is 22 percent less today than it was 10 years ago, yet more people are flying, according to DOT's Bureau of Transportation Statistics.