US Airways goal: survival

by Tom Johansmeyer on

US Airways offers a story of aimlessness searching for an identity. Its attempts to go low-cost in 2005 never panned not, nor did its hopes of being a global heavyweight two years later. Now, it sits uncomfortably in the middle and has the unfortunate goal of survival.

The CEO, Doug Parker, of course, has all the answers. He blames the industry analysts for making too much of the company’s woes … particularly as it has been able to squeeze an extra $160 million a year out of passengers – with 10 percent fewer seats – by implementing popular measures such as charging fees for preferred seats and checking luggage. Because of this, US Airways could turn a profit “even with a 15 percent drop in revenue this year.”

Fun!

Reasons for optimism must be balanced against, well, reality. Over the past two years, the airline has amped up its customer service. Why? It had nowhere else to go, ranking rock bottom (or close to it) on such trivial matters as on-time arrivals, customer complaints and mishandled bags. Nonetheless, progress is good!

Unfortunately, Wall Street‘s concerns aren’t dismissed with a $5 voucher for the food court and promises of a first class upgrade. After all, these are the same disgruntled passengers dismayed at having to pay for the “good” seats.

The company raised (and ostensibly burned through) $700 million it raised in credit markets in the fourth quarter of last year. While other airline stocks dropped an average of 70 percent, US Airways’ share price plummeted 93 percent.

If you invested $100 in this airline last year, you’d have $7 today. If you bought $100 in beer last year, you’d have: $100 in beer, a hell of a hangover and probably $7 from the deposits on the cans.

Which way would you go?

AirTran cuts flights to VT, nobody cares

by Tom Johansmeyer on

When AirTran‘s first flight touched down in Burlington almost a year ago, the airline’s director for strategic planning and scheduling, John Kirby, said, “This is going to be a home run.” I guess that didn’t work out.

It didn’t even last a year. AirTran’s nonstop service between Burlington, VT and the Washington, D.C. area is now but a memory “seasonal.” The route will now be serviced for around four months a year. The airline cites the economy as the reason it halted flights in early September. Flights to and from Baltimore are expected to resume in April or May 2010. Last year, 5.5 percent of passengers flying out of Burlington did so on AirTran.

Well, I guess it really isn’t “seasonal” after all. AirTran’s decision to run flights from May to August – with the possibility of April and September – seems to overlook the fact that ski season is the state’s big draw.

All hope is not lost, though. Burlington International’s airport director, Brian Searles, says the airport is in discussions with AirTran in the hopes of returning year-round service to the city. Vermont politicians, including Governor Jim Douglas and Senator Patrick Leahy have been getting in on the action as well. With AirTran’s $273.8 million loss last year, it seems these guys are wasting their breath.

42 million bags mishandled, more than 1 million lost for good

by Tom Johansmeyer on

Airlines around the world now have their incompetence measured! The same companies that get irritated when you try to carry on everything you own mishandled (i.e., lost) 42 million pieces of luggage in 2007, according to the Air Transport Users Council (AUC). This is an unbelievable increase from the 2006 level of 34 million and 30 million in 2005. Making matters worse, 1.2 million were “irretrievably lost” in 2007.

Not only are the raw numbers increasing, the rate of stupidity is accelerating. The amount of mishandled luggage grew 13.3 percent from 2005 to 2006. From 2006 to 2007, it sped up to 25.3 percent. Clearly, the airlines are getting better at being worse.

But, why should we dwell on the past when we can fear for the future instead? AUC worries that the number of bags mishandled could reach 70 million a year by 2019, based on forecasts of a 100 percent increase in the number of passengers flying annually over the coming decade.

With all this mayhem, there’s one thing you can count on: not being reimbursed fairly for your lost bags. The AUC says that passengers were not compensated appropriately “on too many occasions” because they did not have receipts for the items inside. Let this be a lesson to you. When you buy that new shirt, put the receipt in your suitcase – likewise for your hat, gloves, shoes and cell phone. This is clearly the only place where you’ll need them.

Oh, wait! Don’t put the receipts in your suitcase! Your suitcase will probably get lost! Stash them in your favorite carry-on instead.

As we stop flying, the boneyard becomes more crowded

by Scott Carmichael on

It is no secret that air travel is in a downwards spiral. The industry always manages to find excuses, it could be the crappy economy, high fuel prices, or a general sense of panic that is keeping people from flying.

And when air traffic drops, so does the demand for many of the planes operated by the airlines. When a route could once be served by a 747, low traffic may now demand a smaller plane, and when a 747 is idle, you can’t just pull into a parking spot at the local airport and throw some quarters in the meter.

There are several types of aircraft boneyards in the world – some specialize in ripping all the valuable parts out of the carcass, others devote their knowledge to preparing the plane for a long break, awaiting the return of paying passengers.

A plane that is destined for a long break will have all its fluids removed, as well as some instruments that don’t do too well when they sit still. The engines and other openings are then blocked, and the airline simply pays for the spot. Some airlines even pay to have the plane moved around a little, to keep the tires in good shape.

In total, 1200 planes were grounded and moved to the boneyard last year, with an additional 675 heading to a parking spot this year, making it one of the worst on record.

Airline biz to lose $2.5bn, but more flights on time

by Tom Johansmeyer on

MSNBC continues to publish the same story, and I continue to reblog it. Fortunately, author Sholnn Freeman managed to sneak in some interesting stuff at the end.

It’s no secret that airline prices are dropping as fast as they possibly can. Broader economic conditions are responsible for this fact. How do we know? The fine folks at MSNBC have developed the unique skill of telling the same story over and over with different words.

So, here’s the reality: you can find domestic one-way fares for under $100. I’ve seen several international fares (one-way) for under $200, usually to Latin America. According to Rick Seaney, Chief Executive of FareCompare.com, “If you are paying over $300 for an airline ticket right now, you are probably paying way too much.” He continues that these prices do not occur outside a recession.

Nonetheless, passengers remain cautious. You know the drill … the savings may be great, but if you can’t afford to take advantage of it, you save nothing. A lot of people are canceling or scaling back vacation plans.

Thanks, MSNBC; we had no idea …

But, there is good news, and this is stuff MSNBC hasn’t reported before.

Airline on-time rates are at their best levels in years. Since there are fewer flights taking off, congestion has declined. So, all that time waiting on the runway last year is time in the sky this year. Of course, efficiency comes at a cost: the International Air Transport Association expects the global airline industry to lose $2.5 billion this year.