Category Archives: airline biz

Kojo Nnamdi show episode about airports

This one slipped by me until this evening, but last week the Kojo Nnamdi show did a show about how airports are affecting development of cities.  One of the guests was John Kasarda, the author of the book “Aerotropolis: The Way We’ll Live Next,” which sounds like an interesting read.  The podcast of the show is highly recommended as well.

Listening to the podcast reminded me of a couple of other interesting stories that I read recently.  There one part where a listener calls with a question about airport noise over neighborhoods near airports.  The Cranky Flier recently wrote an article describing NextGen air traffic control and navigation that JetBlue has installed.  It seems like not only could the technology help save fuel, but maybe it could be used to perform maneuvers (safely) that avoid neighborhoods.

 

On the topic of residential noise, someone mentions in the podcast that in many cases, neighborhoods were built around airports that already existed, and then people who live in these neighborhoods complain about noise.  I’m guessing in some of these cases, people move here because property is cheaper near airports (for the noise reason), so it seems short-sighted on the part of those people to not factor in the reason that for the housing cost being abnormally low.  There are exceptions, as in some cases, runways get added, approach patterns change, etc.  But in general, it just seems like a poor plan to live near an airport.
Another post at Cranky Flier covered how people in Memphis are clamoring for a low cost entrant to bring down the fares Delta charges in the city.  Memphis is a major Delta hub (inherited from the Northwest days),  but it just barely seems to make sense as a hub these days, given the consolidation in the airline industry, and Delta having a couple of nearby hubs already.  I commented on that article, and asked about what the effect of FedEx operating out of that city and airport has (Fed Ex is based in Memphis, and runs a major hub out of Memphis.  I might not’ve used the right words there, but I figured that combination would convey the right idea).

United’s layoffs in Houston

I unfortunately didn’t get around to posting this earlier, but as has been reported in several places, United recent announced layoffs in the Houston area because the city approved allowing Southwest to build an international terminal at Houston’s Hobby airport, and being international service.  Now, for those of you who follow Southwest, their international destinations are likely going to be Mexico and the Caribbean.  They won’t be flying to Australia or Asia or any of that, most likely. However, United made this sound like the end of the world, and in addition to the layoffs, they even cancelled their proposed upcoming Houston-Auckland (New Zealand) service on 787s.

I agree with Cranky Flier on this one (who award United his “Cranky Jackass” award).  These were probably planned or needed layoffs, which are typical after a merger, and United is trying to win some points by blaming these layoffs on what the city of Houston has decided to do.  Sure they will face some more competition as a result of the vote, but I highly doubt thinks like Houston to Auckland would be affected by that (plus Southwest will not even be flying out of Hobby internationally for several years).  I think United overplayed their hand on this one…

Taking advantage of elite status lines (tastefully)

TPG posted a video last week an answer to a question about someone asking whether it was appropriate to use elite status lines to skip the lines.  The answer was yes, but he did offer a few tips to do so tastefully.

However, there was  one point in particular that I identified with.  He mentioned people that start crowding the gate at the beginning of board, referring to them as gate lice.  That’s one thing that annoys me so much.  I am usually able to board with one of the earlier boarding groups, and I tend to stand back from the gate until my turn comes up.  However, half the time when I walk up, there’s tons of people standing all around the area, and I can never tell who is in line, or who is just being a “pest” by blocking the path well before they can board.  I suspect part of why people are so early to board is because of their carryon bags, which I believe the airlines are wrongly incentivizing people to bring on the plane).

An aside, I was reading about Spirit’s policy of baggage fees recently, and I learned that they do charge for carry-ons.  Unfortunately, I can’t seem to find the link I was reading, but there was a lot of controversy over their newly announced $100. Crank Flier wrote about the media hubbub over Spirit’s $100 carry-on fee. Realistically it’s not $100 as long as you know to pay for your carry-on ahead of time (and there are multiple opportunities to do so, but if you decide to try and sneak your bag on, they slap you with a $100 fee (or I guess if you’re completely ignorant, though I supposed some people that don’t travel often will get caught up in this rule).  Anyway, the important thing is, someone does successfully charge for carry on bags, which as I outlined before in the past post linked above, should be what airlines are doing to properly incentivize customers to make the boarding process smoother.

Um, that was a long aside.  I was also going to share another random story about elite lines and boarding.  While boarding a flight leaving Las Vegas last year, there was a huge group of elites waiting to board a CO flight.  They had called elites to board with first class.  Some lady seemed flustered off to the side, and exclaimed, “There can’t possible be that many first class passengers,” and she got a reply of “elites!” from out 10 people in unison.  I think she was trying to figure out whether she should get in line (and was probably worried about her carry-on).

AMR (AA parent company) to consider sale of company

After resisting sentiment from creditors, unions, and others to sell/merge the company before exiting bankruptcy, apparently AMR will now consider merger options.  It’s an interesting development, especially considering how many people have recently been getting shifting business to AA (myself included).  Somewhat related,  as View from the Wing wrote about Randy Petersen’s AAdvantage comments at the Frequent Traveler University a few weeks back, AA hasn’t mentioned much about the value of the AAdvantage program, which is potentially a huge asset (considering it is the oldest and largest frequent flyer program around).

P.S. My trusty Bloomberg iPad app actually alerted to me about this story yesterday morning 🙂  As i was waking up, I grabbed my iPad, and this article was showing on my lock screen 😛

State of Business Travel from NY Times and Airfares

The NY Times recently ran an article about the general state of things in the business travel world.  It seems that business travel is recovering the recent recession, but it is expected to fall this year compared to 2011, since economic recover is still uncertain.  I’ve personally noticed that airfare is higher this year than the previous few years, and I have to book a number of plane tickets still for this summer (I’m very tempted to start booking flights using points on domestic flights, even though the redemption rate isn’t quite where i’d want it to be).  That could definite be a drag on business travel.  The main factors that seem to be contributing to the airfare increase is consolidation in recent years, airline capacity reductions (i.e. fewer flights, which partially contributes to massive plane graveyards), and of course, rising fuel prices.

For what it’s worth (probably not much), according to charts from the DOT (via Things in the Sky), airfares adjusted for inflation are still well below what they were 15 years ago.  I dunno, I’m still not liking $500 transcon airfares, especially considering the AA mileage runs I did just a few months ago 🙂

UA/CO merger

Well, the merger of United and Continental(CO) is complete.  The last CO flight took off late last night, and the last CO flight to land will arrive in Houston today at 12:35 P.M. central time.  The merger was legally completed quite some time ago, but the airlines operated as separate airlines until today.  I will miss Continental.  They had more comfortable first class seats, better food, live television via direct TV on most domestic flights, and systemwide upgrades (SWU’s, earned by elite passengers) that could be used to upgrade any paid airfare (such as coach to international business class).  I also thought CO had above-average customer service and slightly better lounges than United.

Unfortunately, most of the good things about CO are being lost in the merger.  Of particular dismay to me is that SWU upgrades now can only be used on more expensive booking fares, which means you have to pay about $400 more for a long-haul plane ticket to try to upgrade it, which is really frustrating because you usually don’t know if an upgrade will clear.  It really sucks to pay $400 more for a ticket then end up in coach anyway because the upgrade didn’t clear.

United used to be one of the few airlines not to charge for booking last-minute award tickets.  Of course after the merger, they decided to be more like CO and charge up to $75 for booking an award ticket less than 21 days before departure.  That is BS because on a lot of flights, award seats are not even available until the last minute.

One good thing on United that did survive the merger is Economy Plus.  The first ten or so rows of the economy cabin have a few extra inches of legroom.  Elite passengers can sit up there for free.  Economy plus is gradually being added to former Continental aircraft, although so far very few have gotten it.  As a top-tier elite on Continental, I usually would get upgraded to first class on domestic flights for free, or at least get an exit row seat, so I didn’t need economy plus that badly.

For now, I will keep flying the new United, as I’ve got top-tier elite on them and want to continue enjoying elite benefits.  And even after the changes, I still think the merged airline has the best mileage program.

Indian airlines pricing themselves into oblivion?? :-P

Most likely, most people reading this don’t give a hoot for Indian airlines, but it is a mildly amusing story.

Via this post at Live from a Lounge, apparently the Indian airlines have been pricing themselves into oblivion by charging money-losing fares.  Apparently rising fuel prices and a weakening Indian rupee, along with predatory pricing by Air India, are to blame (in case you’re not familiar with predatory pricing, see this article).  Airlines are known to engage in this practice, for example, to protect a fortress hub from a potential new competitor.  An airline that has a large operation at a particular airport can cut their fares out of that airport to a level that is not sustainable for a smaller competitor to cut their price too (this isn’t truly predatory pricing, because of the cost structure of running an airline as well as economies of scale that an airline may have means the fares may not truly be money losing).

Anyway, semantics and details aside…a well run company isn’t supposed to price themselves into the ground.  A well run airline should also probably be hedging fuel prices, seeing as how that a large portion of its costs.

Kingfisher was set to join the oneworld alliance while Air India had reentered talks to join Star Alliance, so this business could have potential affects on alliances.