Monday, August 11, 2008
Moving Day
Over the weekend Channel 9 completed a transition over to the Boarding Area -- the voice of the Business Traveler. This blog will be found in the Prior to Boarding section. We have a new look and a new address: http://boardingarea.com/blogs/channel9/. Please come check it out and all the other sites over at the Boarding Area.
Friday, August 8, 2008
MKE Pawn
This morning the Milwaukee Journal Sentinel reported that Northwest has written off its investment of Midwest Airlines. One could argue, as Northwest's spokesman does, that this is simply Northwest following the simple rules of conservative accounting. However, it is more than likely another sign of Midwest's impending demise (this has been coming since the end of June).
When this is all said and done, the MJS story goes on, Northwest will have spent a bit over $200 million to protect Milwaukee from AirTran. From a network perspective, it is probably better for the MKE traveler that Northwest felt compelled to defend this territory.
When this is all said and done, the MJS story goes on, Northwest will have spent a bit over $200 million to protect Milwaukee from AirTran. From a network perspective, it is probably better for the MKE traveler that Northwest felt compelled to defend this territory.
BA Microsite: T5 is Working (This Time)
So British Airways has a neat little micro-website out promoting its new terminal 5. It has a daily update on the average check-in time and a generic story about some customer's success story at T5. I appreciate British Airways understanding what it has to do to sway customers. But, sometimes I wonder, if it is just a little too much. See for yourself.
Thursday, August 7, 2008
Time Tackles Fees
Time is out with a survey on the latest round of airline fees attempting to answer "Who is the stingiest?" Their answer: US Airways. The list goes (from stingiest to least stingiest): USAirways, United, American, Northwest, Continental, JetBlue, Delta, Virgin America, Southwest.
A few comments:
1. I love seeing Southwest at the top of this list and USAirways at the bottom. I don't actually enjoy flying either carrier, but, from a business perspective it is a testament to the difference between good management and bad management.
2. I think Continental deserves better. They still have blankets and some meals at meal times. Is that necessary? I'm not sure, but if this is about stingiest then they deserve more.
3. United has a real problem on its hands. It is bad to be fighting to be the next USAirways.
3. I'm not sure what Virgin America is doing on this list. This a list about large carriers dealing with fuel costs. Virgin America is not a major carrier.
A few comments:
1. I love seeing Southwest at the top of this list and USAirways at the bottom. I don't actually enjoy flying either carrier, but, from a business perspective it is a testament to the difference between good management and bad management.
2. I think Continental deserves better. They still have blankets and some meals at meal times. Is that necessary? I'm not sure, but if this is about stingiest then they deserve more.
3. United has a real problem on its hands. It is bad to be fighting to be the next USAirways.
3. I'm not sure what Virgin America is doing on this list. This a list about large carriers dealing with fuel costs. Virgin America is not a major carrier.
Tuesday, August 5, 2008
$7 Pillows and Paying for Seats
Tom Parson's, CEO of Bestfares.com, did a solid job today refuting the non-sense that MSNBC was trying to report in regards to the JetBlue $7 pillow. If you ask me, the only reason this is a big story is because New Yorkers are semi-obsessed with JetBlue and thus the media, the majority of which lives in New York, is just naturally curious. Air Canada has been charging for a pillow for 3 years and I don't remember such a big deal being made over that, even in the Canadian media.
Regardless, I caught something at the end of interview which either got cut from the video or possibly occurred during a separate interview segment. Parson's was discussing how Spirit charges for all seat assignments and how that could be problematic for families traveling together -- Pay extra cash or roll the dice and see if you can get seats at the airport.
As more airlines charge for seat assignments (mostly for premium seats right now), it is important to keep in mind how this actually plays out in the market. Most people do not pay for seat assignments. Seats assignments matter to those that travel often, essentially business travelers, not families. I flew an Allegiant flight once where only 3 out of over 100 people paid for early boarding. I was on a ClickAir flight last month where only non-premium seats were occupied after everyone had boarded. Sure, these are anecdotal, but the point remains that the penalty is not on families. It may be nerve-recking but it is still way more likely that the status quo of close accommodations will occur rather than a family scattered amongst the plane. Disclaimer: This does not hold for families that pay no attention the specific check-in rules of its airline and those that choose to check in at the last possible moment. You still need to be aggressive.
Regardless, I caught something at the end of interview which either got cut from the video or possibly occurred during a separate interview segment. Parson's was discussing how Spirit charges for all seat assignments and how that could be problematic for families traveling together -- Pay extra cash or roll the dice and see if you can get seats at the airport.
As more airlines charge for seat assignments (mostly for premium seats right now), it is important to keep in mind how this actually plays out in the market. Most people do not pay for seat assignments. Seats assignments matter to those that travel often, essentially business travelers, not families. I flew an Allegiant flight once where only 3 out of over 100 people paid for early boarding. I was on a ClickAir flight last month where only non-premium seats were occupied after everyone had boarded. Sure, these are anecdotal, but the point remains that the penalty is not on families. It may be nerve-recking but it is still way more likely that the status quo of close accommodations will occur rather than a family scattered amongst the plane. Disclaimer: This does not hold for families that pay no attention the specific check-in rules of its airline and those that choose to check in at the last possible moment. You still need to be aggressive.
July Traffic
A couple interesting things regarding July traffic:
1. Allegiant posted a ridiclious 95% load factor for July up from 91% year over year. That is a crazy number. The stock is up 14% up over the past week, jumping 11% today.
2. You might be seeing this headline out there: Traffic rises at AirTran, falls at Southwest. So you get the gist of it. However, I find the crucial number in this report to be Southwest's load factor which dropped 5.1 percentage points year over year, as LUV's capacity went up and it carried less passengers. Hey, they are paying below market value on fuel, but it is something to keep an eye on.
1. Allegiant posted a ridiclious 95% load factor for July up from 91% year over year. That is a crazy number. The stock is up 14% up over the past week, jumping 11% today.
2. You might be seeing this headline out there: Traffic rises at AirTran, falls at Southwest. So you get the gist of it. However, I find the crucial number in this report to be Southwest's load factor which dropped 5.1 percentage points year over year, as LUV's capacity went up and it carried less passengers. Hey, they are paying below market value on fuel, but it is something to keep an eye on.
Monday, August 4, 2008
Shopping at usairways.com
These turbulent times have led to some amusing marketing messages on websites. So if you happen to go check out usairways.com, you'll see some super relevant News. In case you missed it, US Airways has some new fees for bags, ALL beverages now cost money in coach, and, oh yeah, if your not busy, help fight skyrocketing oil prices now. After all that, you can meander over to US' new worldwide website.
I'm not a marketing genius, but it seems like it might make sense to leave at least one positive press release in the queue. None of the story's currently listed make me happy or confident in buying a US Airways ticket. A quick click on the News link and there is easily one recent release they could use. US Airways Leads Industry in Sustained On-Time Reliability. Business and leisure traveler alike could appreciate this. Especially, if they are going to be busy fighting the skyrocketing oil prices.
Ups and Downs
Quick note: You'll notice the chart at the top right of the page has been falling (near $120 today) and, thus, the chart below it is full of green today.
Friday, August 1, 2008
August 1999
On the first day in August 2008, I thought we'd take a look back nine years ago to August 1999. The airline industry was on the rise, hitting a stride that would carry it for only two more years.
In early August 1999, United unveiled plans for Economy Plus. The plan was simple. Rip out a row or two of seats and provide about 36 inches of pitch to the best customers: Mileage Plus status members and full fare coach passengers.
The full New York Times report from August 6, 1999 can be read here. And you can't help but think United was a little ahead of the game. Sure, the plan did not explicitly call for increased prices for the seating. But, they understood that business passengers were valuable, as the article notes, "Frequent business travelers make up about 9 percent of United's customers but account for 46 percent of its sales, not 36 percent. "
Today, as all carriers try to raise revenue, business passengers are the target. We have Southwest's Business Select and Virgin America's recently announced Main Cabin Select. This is about getting more money from the people (or their companies) that have it. And, although it didn't help keep United out of bankruptcy, they at least understood what the game was about.
In early August 1999, United unveiled plans for Economy Plus. The plan was simple. Rip out a row or two of seats and provide about 36 inches of pitch to the best customers: Mileage Plus status members and full fare coach passengers.
The full New York Times report from August 6, 1999 can be read here. And you can't help but think United was a little ahead of the game. Sure, the plan did not explicitly call for increased prices for the seating. But, they understood that business passengers were valuable, as the article notes, "Frequent business travelers make up about 9 percent of United's customers but account for 46 percent of its sales, not 36 percent. "
Today, as all carriers try to raise revenue, business passengers are the target. We have Southwest's Business Select and Virgin America's recently announced Main Cabin Select. This is about getting more money from the people (or their companies) that have it. And, although it didn't help keep United out of bankruptcy, they at least understood what the game was about.
AirTran Followup
It looks like I might have been a little hard on AirTran a couple days ago, kinda. It seems like they have a stronger cost-cutting plan than originally reported. Instead of parking planes, they are selling them off. The article somewhat oversells the strategy as it is really almost common sense to dump the 737-300s like everyone else. Read more here if you are interested.
Update (8/4): My mistake, per the comment below...AirTran only has 737-700s.
Update (8/4): My mistake, per the comment below...AirTran only has 737-700s.
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