Fallen American Airlines could be next to merge … with JetBlue?

by Tom Johansmeyer on

American Airlines used to be the largest airline in the industry – now it’s third. Merger activity has narrowed the field, with Southwest–AirTran and United-Continental the latest deals that hit the sector. So, all eyes are on who will succumb to the urge to merge next, and American is being eyed as the next player.

According to a Forbes blog post, analysts from Morningstar believe that American Airlines “needs to make a big splash” to remain a player in an increasingly competitive market. The post continues:

“Once the industry’s largest carrier, [American Airlines] is now the third-largest…and any scale advantage it may have garnered is gone,” the Morningstar analysts write. “Ironically, AMR is at a substantial disadvantage, given that it steered clear of bankruptcy during the recession,” [Basili] Alukos and [Adam] Fleck say, pointing out that American’s labor rate is the industry’s highest on an equivalent basis.

So, who’s the right partner for American? The analysts at Morningstar are looking at JetBlue, especially given the latter’s “lighter cost structure.” Notes founder of Training the Street and former M&A investment banker Scott Rostan, “Three dominoes have fallen – Delta/Northwest, UAL/Continental and Southwest/AirTran.” He sees Alaska, Frontier and JetBlue as likely to make some noise.

[photo by Andrew Morrell Photography via Flickr]

United Airlines flight attendants create new cocktails – passengers pick the best

by Scott Carmichael on

Last week, United airlines held an event for their most important passengers, and presented them with ten different cocktails, all designed by flight attendants. In total, United crew members submitted 64 different cocktails, and the top ten entries ended up on a table at Trader Vic’s in Chicago.

The ten finalists:

  1. Sunset-Sunrise : Finlandia Vodka, cranberry apple cocktail, splash of orange juice, lime wedge
  2. Sky High Delight : Finlandia Vodka, orange juice, cranberry apple cocktail, sprite, lime wedge
  3. Friendly Skies Spritzer : Finlandia Vodka, ginger ale, orange juice, cranberry apple cocktail, seltzer, lime wedge
  4. Cloud 9 Cosmo : Finlandia Vodka, Sprite, cranberry apple cocktail, lime wedge
  5. Jack and the Bean Stock : Jack Daniels, Ginger Ale
  6. My Style High : Courvoisier VSOP Cognac, orange juice, cranberry apple cocktail, sprite
  7. Bon Voyage! : Bacardi Rum, orange juice, cranberry apple cocktail
  8. Flirty Smile : Finlandia Vodka, cranberry apple cocktail, ginger ale, lime wedge
  9. Island Dream : Bacardi Rum, cranberry apple cocktail, ginger ale, lime wedge
  10. Gin Buck : Tanqueray Gin, ginger ale, lime wedge

The event was very casual and was attended by several members of the United Airlines management in charge of the in-flight service. As for the drinks, I actually managed to try all ten of them, and found it very hard to pick a favorite. The lime wedge was a very nice touch, and made for delightful drinks.

The winning cocktail will end up on all United Airlines flights with full beverage service towards the end of the year. In addition to drinks, United also served some of the newest food choices from their coast to coast P.S. service.

The winning drink as picked by members of Flyertalk.com and the United Fliers Community is drink number 1 – Sunset Sunrise. If you’d like to make one of these for yourself, here are the instructions:

  • Pour 25 ml Finlandia vodka over ice
  • Fill glass with Minute Maid Cranberry Apple Cocktail
  • Add a splash of Orange Juice
  • Finish with a Lime wedge

Sunset-Sunrise was created by LAX based flight attendant Tita Martin. Events like this show a new thinking within United Airlines, and I have to say that I’m quite impressed by the time and effort put into listening to their customers. Granted, the event was not really open to everyone, but an airline that is open to ideas from its customers is one that deserves a pat on the back, especially if it involves serving free cocktails.

Top five reasons you’ll pay more for flights

by Tom Johansmeyer on

It looks like flight deals are a thing of the past. The airline sector is starting to recover, as evidenced by an aggregate $1.3 billion in earnings for the six largest U.S. carriers last quarter, and more profits are said to be on the horizon. Of course, we’re still in the early stages, and those earnings do pale in comparison to the $22.7 billion in losses sustained in 2008 and 2009. So, the airlines are making up for lost time and taking advantage of a swing in the economy … that means you’re going to pay for it.

Good news for the airlines, of course, translates to a thinner wallet for you, but it indicates that you’re at least willing to handle the higher cost, since airlines tend to be price-takers rather than price setters.

Why are you going to pay more for flights? Here are the top five reasons:

1. Extra fees no longer “extra”: they’re part of the package now. Airlines raked in $13.5 billion from fees in 2009, a 43 percent spike year over year. They aren’t going away. As the industry recovers, this will help keep fares higher.

According to the Associated Press:

United and American led the way on “ancillary revenue,” including fees, at about $1.8 billion apiece last year, according to IdeaWorks. United Airlines President John Tague calls fees “an unequivocal success,” and suggests his airline could still double the amount it’s bringing in with baggage fees.

2. The market supports higher prices: airlines charge what they can get, as it is a consumer-driven market. So far, consumers are responding favorably to price increases, with fares up an average of 18 percent this summer.

3. Airlines to hold the line this fall: demand is expected to decline through the end of summer, and the airline will try to keep from offering deep discounts. In fact, many are offering deals to get passengers interested but are able to convert into higher-priced seats.

4. Shared armrests the norm: the planes are full. Delta filled close to 90 percent of its seats last month, with Continental at 87 percent and American at 86 percent. This means there are more fares covering the cost of the flight, which delivers favorable financial results.

5. Temptation to add flights resisted: rather than bring more planes out to handle this increase in demand, the airlines seem to be fighting the urge, because bookings are sluggish and the economic recovery is tenuous.

[photo by Ma1974 via Flickr]

United creates Optathlon games for day-of-departure prizes

by Grant Martin on

It’s a long shot, but if all of your attempts to find a better seat, upgrade and improve your upcoming trip on United Airlines have failed then there’s one last thing you can do. Last week, United launched a series of video games on their website with prizes aimed at traveling customers.

What can you win? Among other things, it’s possible to earn the opportunity to skip those pesky long lines at the TSA checkpoint or maybe even win an upgrade to economy plus. All you have to do is play for an entry.

Obviously, United’s new games are targeted at educating the consumer on their full host of products and upgrades, including economy plus (more leg room and closer to the front of the plane) and elite status. And you will have to install a little game widget into your browser to make the games work. But for the chance to win a sweet little upgrade either on the plane or at the airport, it’s definitely worth a shot. Besides, the games are kind of fun.

You can check out the full series of games over at Optathlon.com.

[image credit to flickr’s lovely lemur]

Turbulence hurts: leading cause of in-flight injury

by Tom Johansmeyer on

If you aren’t splattered in a fatal crash, you’re most likely to be injured by severe turbulence. Don’t get shaken up by this, though, odds are the biggest risk you’ll face is a middle seat sandwiched by garlic-eater and a heavy talker (choose which way you want to read that one). While you can’t be saved from the people around you, you can protect our body from a bouncing plane: put on your seatbelt.

The discussion of people getting smacked around in flight on a plane has arisen (again) because of the 21 people injured on United Flight 967 because of severe turbulence. According to USA Today:

Some passengers were tossed around the plane like dolls, passenger Kaoma Bechaz, 19, told The Denver Post. One woman’s head struck the side of the cabin, leaving a crack above the window, and a girl was flung against the ceiling, Bechaz said.

Last year, according to data from the NTSB, 15 of the 22 people seriously injured on flights in 2009 (e.g., broken bones) had turbulence to blame.

Flight attendants, of course, are at greater risk, given that they are more mobile in flight than passengers. Sixty-two percent of serious injuries were experienced by flight attendants, according to an FAA study.

Are you feeling sufficiently alarmed? Yeah, it’s not worth getting upset about. But if you’re wearing a helmet on your next flight, we’ll know why.

[photo by mockstar via Flickr]