Southwest and Air Tran to join forces?

by Grant Martin on

With merger and oil mania upon us, these days you can’t rule out any strange airline pairing. Just this week, Bob Fornaro, CEO of Air Tran mentioned in a conference call that they would be totally open to code-sharing and working with Southwest airlines in the future.

Does this mean that Air Tran and Southwest are up to something? As two of the largest low-cost carriers in the industry, their partnership could establish a dominant force in the domestic airline market and their complimentary routes could reinforce each other’s business. As Ray Neidl of Calyon securites is quoted in the article, “Crisis breeds strange bedfellows and the current economic malaise may be the incentive for them to do something even though they are competitive in some markets.”

Actually, from Fornaro’s verbage, it sounds like more of a cry for help than anything. I’m sure Air Tran has taken a big hit just like every other airline that has suffered in the last six months and would love a boost from Southwest’s business. Wouldn’t you want to buddy up with the only profitable carrier in the United States?

Despite Fornaro’s mewing, Southwest is being mum about the whole business and veritably shrugged off AirTran’s suggestions in this USA Today article. I suppose if you’re calling the shots you can make bedfellows with whomever you chose.

Which Airlines Will Cut Flights for Thanksgiving? (And Which Won’t?)

by Josh Lew on

If you’ve ever tried to fly on or around Thanksgiving, you would be inclined to agree that it is among the busiest travel times of the year. Unfortunately, this holiday season will kick off with most airlines cutting the number of flights they offer. This will lead to fuller planes, fewer options and, of course, higher fares. According to USAToday, the combined cuts will lead to an 11% overall drop from last years flights. That’s 2.5 million fewer seats than last year’s Thanksgiving season (between the 20th and 30th of November).

The biggest cutbacks come from USAirways, which will drop its service by 40% compared to last year. Delta will cut 26% of its flights. The only two major names bucking the trend are JetBlue and Southwest. JetBlue is upping its ante by 3% by the end of the month, while Southwest is planning 15 new flights for the same period. Still, these increases are quite modest when compared to the substantial cuts in the industry. The bottom line: Thanksgiving season travelers who haven’t booked their flight yet are in for higher prices and fewer options.

How’s that oil hedge working out?

by Grant Martin on

With airlines in their worst state since 9/11 and bankruptices posting left and right, one lone airline, Southwest, has prevailed in staying profitable for the last few years.

How have they done this? Sure, they’ve got a pretty interesting business model, friendly customer service and a comprehensive network across America, but is that what’s really keeping them on top?

Partially. It’s more got to do with the oil hedge that the airline locked in well before it spiked up to $140 a barrel. Purchasing their fuel at rock bottom prices while the competition had to pay through the nose helped give Southwest the competitive edge. They could set their fares at lower prices (thus forcing the competition to match), not instill any crazy baggage or superfluous fees and still make a profit while the others were getting crushed.

Now that oil has come down from the stratosphere though, the oil hedge can actually work against them — instead of paying the now $70/barrel of light sweet crude, they’re still pinned to their commitment. And this last quarter, Southwest finally broke and actually posted a loss. Yesterday’s Marketplace has an interesting piece to this effect.

So does this mean that the glory days of Southwest are now over? I doubt it. The airline had several consecutive quarters where they could stockpile cash above the competition, build their aviary and prepare themselves for the future. And lets face it — they’ve got a business plan that’s built around paying for jet fuel at that hedged price, so all they have to do is keep cooking.

Once oil rebounds and demand increases again, Southwest will be right back up on top.

Which airlines let you watch porn?

by Mike Barish on

Last month, fellow Gadling blogger Grant Martin wrote about airlines filtering in-flight wireless content. Now MSNBC has an article on exactly which airlines are filtering adult content. So, who is letting you join the mile high club alone?

Well, if you are flying on American or Delta, be prepared to pack your own copy of Juggs, because they have asked their wireless provider, AirCell, to filter adult content. Coincidentally, these are two of my least favorite airlines to fly. Southwest is currently testing the use of in-flight wi-fi and their partner, Row 44, will also be filtering content. You’re now free to move about the country. But not your own genitals.

Air Canada will begin offering wireless next spring and their spokesman said that it is too early to comment on filtering. Their fellow hosers at Alaska Airlines have no immediate plans to filter content but will include “a few key bullets in the terms of service area” that will outline what they mean by “appropriate use.” That sounds hot.

Meanwhile, those rebels over at Virgin America have no plans to filter their wireless access. And they also do not filter their seatback touch-screen entertainment. It’s basically a flying peepshow. Kudos to you, Sir Richard Branson. I’d give you a high five, but I think I know where your hand has been.

So there you have it. Armed with this knowledge, your laptop and a 3 oz. container of hand lotion, you are now prepared to indulge in whatever internet habits you deem appropriate while crammed inside a flying tube. Remember: The only safe travel is self travel.

Airlines Complain about Vegas Airport’s Plan

by Josh Lew on

Despite seeing a decrease in the number of arrivals, construction of a new terminal will go ahead as planned at McCarran Airport Las Vegas. Though the 2 billion dollar project will not be completed until 2012, some airlines are questioning the timing of the project. It’s not secret that airlines are struggling. Arrivals are down almost 5% at McCarran since last year. A drop of as high as 15% is forecast for next year.

Southwest Airlines has been the biggest critic of the expansion. Over 30% of Las Vegas arrivals fly Southwest. But the airline has been trimming back its service to Sin City. The airport expansion will mostly be funded by an increase in the fees that airlines pay to use the airport and its gates. No one wants to hear talk of higher prices right now, especially at a bread-and-butter location like Las Vegas. After the rapid growth that the city has been experiencing, no one seems to want to look at the facts. But things are slowing down. I guess McCarran is gambling that things won’t be so slow in a couple of years.