Archive: March, 2011
UPDATE: We posted this news yesterday, and included a bad link to a news story. Today's news is that the House passed the Republican versioin of the bill, including FAA funding cuts and changes to the rules on labor organizing. The bill now goes to a House-Senate conference. The Senate previously passed a vastly different bill that Obama supports. Here is the latest news.
This is yesterday's post, without the bad link. President Obama threatened to veto legislation being debated in the House that would cut funding for the FAA and rescind a change made by the National Mediation Board to make it easier for airline workers to vote for a union. But the odds of those provisions staying the bill don't appear good.
A mysterious offer to buy American Airlines came in this week, from an investment outfit no one has ever heard of. The bid, if it is one, was not only sent to American's Fort Worth headquaters but it was also forwarded to the reporters for local newspapers at the same time -- just the opposite of what serious takeover artists usually do when making a run at a company. What does it all mean? Here is an excellent analysis by the Centre for Asia Pacific Aviation, an Australian service with veteran U.S. correspondents working for it.
And is the idea that AA could be a takeover target so far-fetched? No it's not. Remember what I (and some analysts who know a lot more than I do) have suggested here before: Someday PHL's big kahuna, US Airways, could make a run at American. Among other things, PHL would make a great European gateway alternative to the more-congested JFK in New York for AA and its oneworld alliance.
A really interesting debate is going on between the U.S. Department of Transportation and two airline consultants over whether the federal tarmac-delay rule is leading to more flight cancellations than would be the case without the harsh penalties in the rule. The consultants, who published a study on the issue yesterday, contend that more people have been inconvenienced and delayed by flight cancellations than DOT says. Here's a story with a little more detail on their conclusions.
One thing is quite clear: Very few people are being held on planes on airport tarmacs for hours anymore. It seems to us that airlines should be glad that's the case. Those incidents in the past have made terrific TV news fodder, and made the carriers involved seem insensitive, stupid, venal or worse. The consultants who did this study, by the way, usually work for the airlines.
Airlines certainly appear to be preemptively canceling more flights to avoid violating the tarmac rule. But as I've said before, let's give this rule a little more time -- and perhaps a winter without the snowstorm cancellations we had this past year -- before concluding that it's hurting more than it's helping. I really can't see how we can honestly evaluate what's going on after airlines wiped out hundreds of flights a day last winter whenever severe weather threatened. Did they do that because they've become overly cautious in the face of heavy fines, or have they become smarter and overly cautious when severe weather threatens because preemptive cancellations are ultimately less costly and inconvenience fewer customers than taking a chance that the weather will seriously delay operations?
Oh what else can we say ... Spirit Airlines is back with another wrinkle to its bag fees. Read more here.
The largest airlines pulled back on another fare increase over the weekend after Southwest and other low-cost carriers failed to match. The industry has largely succeeded in repeatedly increasing fares so far this year, and especially in the last six weeks since fuel costs began to move higher. Read a little more about the latest effort here.
The apparent ability of the airlines to continue raising fares while not increasing the number of seats for sale during the first quarter is being called "a defining moment" for the industry by some. Have we reached a point where the major U.S. carriers' revenue and profits have really stablized? Read an analysis by Ted Reed of Thestreet.com at this link.
AirTran Airways moved another step closer to being acquired by Southwest Airlines with approval of the deal by AT's shareholders. Read more here ...
This story, naturally, has been blasted about the airwaves for a day now and this is the update: The Washington Reagan National air traffic controller who didn't respond to two airline pilots, who then landed without his help, has admitted he fell asleep on the job just after midnight yesterday. He's been suspended and federal safety officials are investigating the incident. Think the rules will change so that a major-airport FAA tower isn't manned by just one person? Stand by for that to happen, and read the latest here.
In case you missed this story by the Inquirer's Linda Loyd on the airlines' plans to trim some more capacity to deal with rising fuel costs and travel disruptions caused by the Japanese disaster, you can find it here.