Delta to flight attendants: come back!

by Tom Johansmeyer on

Delta’s looking for 1,000 flight attendants, some of whom will be furloughed workers recalled for international assignments. Some will be new hires. But, it’s going to take some time get them in the door: they’ll be working the aisles by the middle of 2011. In particular, the airline is looking for flight attendants fluent in Japanese and Mandarin, which narrows the field a bit.

Delta already has 20,000 flight attendant, and they are currently in the process of deciding whether to be represented by the Association of Flight Attendants union.

The hiring at Delta follows a similar move by American Airlines, which is recalling close to 800 flight attendants who were furloughed and pilots to help accommodate network expansion internationally.

So, those baggage fees are paying off for a few people!

[photo by Augapfel via Flickr]

Five indicators of the airline industry’s future: start with first and business class

by Tom Johansmeyer on

Airlines are getting a little lucky. The big bucks and wider margins that come from first- and business-class fares are coming in faster than the nickels and dimes from economy class. This will delight the various airline industry employees who think that passengers aren’t paying enough, and it’s also a growth indicator.

According to the International Air Transport Association, an industry trade group, year-over-year growth slowed down in August relative to previous months, though this is due in part to the fact that August 2009 was the first month of the industry’s recovery, setting a higher bar for year-over-year growth than in the few months prior.

Nonetheless, airline sector growth is slowing down a bit, and not just because of the higher base in August for relative measurement. The total number of passengers traveling fell a little over 1 percent from July to August this year.

In August, first- and business-class passenger traffic surged 9.1 percent, following a 13.8 percent jump in July. Behind the special curtain that separates the elite from the proletariat, passenger traffic climbed 6.2 percent in August, following 8.8 percent in July.

So, where is the airline industry going this year? Here are five indicators to watch:

1. According to IATA‘s 230 members, demand for premium travel is up 17 percent relative to 2009 … but 99 percent of that hit in the first quarter of 2010.

2. Premium-class travel has leveled off since the end of Q1, but it’s uncertain if this is only a temporary state.

3. Business confidence is still positive, but it is inching downward. Premium markets remain 11 percent below the early 2008 peak, MSNBC reports.

4. Leisure travelers are even trying to help, with total economy travel up 11 percent from the depths it hit in 2009.

5. Month-over-month stagnation now may not say much about the future, according to IATA. Leading indicators point to growth of 5 percent to 6 percent a year.

[photo by Let Ideas Compete via Flickr]

One three-hour airline delay this summer … and the industry survived

by Tom Johansmeyer on

The latest data from the Department of Transportation suggests that airlines are figuring out how to survive in a world of on-the-ground delays that can last no more than three hours. The summer travel season had only one delay that was affected by the rule. This is a 98.5 percent decline from the summer of 2009.

The airline industry mobilized, when faced with the prospect of the three-hour rule, to counter that there would be a substantial increase in canceled flights, as the threat of hefty fines would cause them to pull the plug. Yet, this hasn’t really happened either. Cancellation rates for the spring and summer were:

  • May: 1.24 percent
  • June: 1.5 percent
  • July: 1.43 percent
  • August: 1 percent

In fairness, May, June and July had cancellation rates higher this year than last, but August held steady, suggesting that it is possible to comply with the three-hour delay rule without sending cancellation rates sky-high.

According to MSNBC:

That’s an acceptable tradeoff, says DOT. “Although the rule has been in effect only a short time, we’ve seen no tangible increase in flight cancellations,” said spokeswoman Olivia Alair, “which means airlines are taking action to prevent delays without canceling flights, as some industry critics claimed they would.”

So, what were the dire consequences forecasted by the airline sector?

Those critics would no doubt include airline consultants Darryl Jenkins and Josh Marks, who published a report in July stating that the new rule would lead to an additional 5,200 cancellations per year (both directly and indirectly), at a cost to the public welfare of $3.5 to $3.9 billion over the next 20 years.

Jenkins and Marks stand by their projections, creating a situation in which the same data is leading to two perspectives. But, one thing is clear: in terms of percentage, flight cancellations have stayed consistently under the 15-year average for four consecutive months.

[photo by nafmo via Flickr]

Department of Transportation mulls expanded passenger delay rule

by Tom Johansmeyer on

The Department of Transportation is thinking about getting even stricter with the airlines. After implementing a rule last spring that involves heavy fines for carriers that keep passengers on a plane on the ground for at least three hours, the DOT is already considering expanding the scope to small airports and international flights.

MSNBC reports:

“The situation is much worse than the [official] statistics indicate,” said George Hobica of AirfareWatchdog.com. “We have to include every airport, every type of plane and every type of flight.”

Unsurprisingly, the International Air Transport Association isn’t crazy about Hobica’s approach, with spokesman Steve Lott saying, “If DOT goes ahead with this, they’re going to cause a much larger problem than the one they think they’re trying to solve.”

The final rule won’t come down until the spring, so there’s plenty of time for both sides to fight this out.

For the airline sector, this measure seems to be seen as a signal of something much worse – the prospect of broad regulation and constraints on its ability to operate effectively in the manner to which it has become accustomed.

For its part, DOT won’t announce a final rule until next spring, but you can expect a lot of others to weigh in before then. Hundreds of last-minute ideas were lobbed over to the DOT, according to MSNBC, addressing all kinds of passenger and watchdog hot buttons, such as: advertising, fee disclosure and compensation for those denied boarding. The big one, of course, was the issue of delays on the tarmac.

International carriers oppose the expanded rules – shocking, right?! Lott, taking the standard industry stance, raises the issue of cancellation instead of risking a $27,500 per passenger customer fine, telling MSNBC, “I don’t think getting stranded in a U.S. city for a day or more is necessarily helping passengers.”

This may be a risk, but the data tells the only reliable story:

Meanwhile, as the airline industry and consumer advocates press their points of view, two truths regarding tarmac delays remain. Delays of three hours or more for domestic flights are down substantially since the original rule went into effect – there were only three in July, says DOT, compared to 161 during the same period last year – and international flights do present a much more challenging scenario.

[photo by williamcho via Flickr]

Southwest uses AirTran for access to business travelers

by Tom Johansmeyer on

The key to success in the airline industry is the business traveler. This category flies often, has less flexibility in pricing and spends more on flights than a leisure traveler could possibly imagine. So, it’s hardly surprising that Southwest‘s acquisition of AirTran – a $1.42 billion transaction – could help deliver greater share of the white collar travel crowd to the low-cost carrier.

According to MSNBC:

Southwest – which currently serves key cities such as Dallas, Chicago, Denver, Phoenix and Baltimore – has long been considered a vacationer’s airline. But it has lured corporate road warriors with offers like Business Select fares that cost more but promise priority boarding, extra frequent-flier credit and a free drink.

So, we’re looking at an expansion of Southwest’s strategy into a more lucrative market. Southwest has already proved that it can thrive in the volatile leisure market, ostensibly more challenging than catering to the business crowd. It seems as though this strategic shift is as close to a “sure thing” as one can imagine in the airline industry.

The acquisition also provides Southwest with international routes, as it picks up AirTran’s access to Mexico and the Caribbean.
[photo by AGeekMom via Flickr]