Aeroposte

Note to Readers

2006-06-28T23:33:00.000-04:00

Due to extended travel and work circumstances, the Aeroposte staff regrets that posts will be less frequent until late August.

KLM CEO Weighs in on Northwest/Delta Merger

2006-06-14T13:09:00.000-04:00

In a recent statement, Leo van Wijk, chief executive of KLM, told reporters that a merger between North American carriers Delta and Northwest was a “real possibility.” According to Wijk, a merger would benefit KLM, which is part of the Air France Group, as it would “"It would be easier to deal with one entity." The Air France Group, Delta, and Northwest are all part of the airline alliance known as Skyteam.

Leo van Wikj isn’t the only one predicting a Northwest and Delta merger. United States Transportation Secretary Norman Mineta has a similar belief. He conjectured at a recent meeting that a merger is a likely course of action in the “latest round of restructuring.” Aviation analysts, murmuring rumors about the consolidation of the two for some time, have been buoyed by Wijk’s and Mineta’s comments.

Proponents and opponents of the merger are sharply divided. Those in favor cite the route structure of the two carriers, which barely overlap and complement each other. Delta currently has hubs in Salt Lake City, Cincinnati, and Atlanta, while Northwest has large operations in Detroit, Minneapolis, and Memphis. Northwest is a leading American carrier on flights to Asia, an area where Delta hardly competes. Likewise, Delta is strong internationally in the European and African sectors.

Opponents paint a much darker picture, saying that the financial states, company cultures, and unions will make a union of the two airlines impossible. The management teams of both carriers have used Chapter 11 to force salary reductions and cut pension plans; some speculate that the frontline employees will be unwilling to concede anything more. There was evidence of such a sentiment at Northwest a few months ago, when their pilots threatened strike up until the eleventh hour, when the union finally conceded.

Due to industry-wide capacity reductions, airlines are enjoying the highest load factors since 9/11. Even with this boon, the question remains: will Delta and Northwest go it alone, or tie the knot in their quest for survival?

British LCC Ryanair Files Complaint with EU over Air France

2006-05-11T16:56:00.000-04:00

As British carrier Ryanair prepares to launch a new base in Marseille, France, the carrier has also taken steps to file a complaint with the European Union over an alleged $1.28 billion in government subsidies given to Air France. Specifically, Ryanair is accusing the French government of giving the flag carrier substantial tax breaks over the past few years. In retaliation, Air France responded that "Ryanair's complaints were primarily a publicity-seeking maneuver and pointed out it was the state that fixed taxes." Ryanair has come under fire recently for overworking its flight crew and possibly violating British aviation codes; however, many herald the entry of Ryanair into the French market as a major step towards lowering airfare prices in France. Traditionally, Air France has been to able to thwart the efforts of low-cost carriers from gaining any foothold in their nation by aggressively undercutting other carriers. In addition, the carrier leverages the benefits of their efficient hub and spoke operation, centered at modern Charles De Gualle International in Paris. Still Ryanair, with one of the lowest cost-structures in the world, poses a formidable challenge to Air France as it tries to wrestle away market share from one of the most profitable legacy carriers in the world.

Delta Works to Terminate Leases at Cincinnati and Los Angeles Airports

2006-04-30T11:28:00.000-04:00

On the heels of recent agreements with its pilot and flight attendant unions, Delta Airlines is now seeking to reject leases at Cincinnati/Northern Kentucky International Airport and at Los Angeles International Airport. Citing a desire to lower its real estate costs under bankruptcy protection, the carrier is working to void some of the leases at both airports. In Cincinnati, which is Delta's second largest hub, the carrier wants to release some of its gate space in Terminal 3 and Concourse B. In a written statement to the Associated Press (AP), Delta urged customers that their desire to be released from commitments to some of their real estate would not affect passengers directly. Delta is merely attributing these moves, which came after failed negotiations with the respective airport authorities, as a necessary component of their plan to shave three billion in total costs. Still, some aviation analysts are warning that the desire to reject leases at Cincinnati is the opening stage in a concerted effort to cut back the number of flights arriving at and departing from Delta's second largest hub. Within the past year, Delta Airlines has bolstered the number of flights it operates from New York City's JFK and Salt Lake City's SLC airport, while trimming back the number of flights originating from and arriving at Dallas Fort Worth Airport. With the collapse of low-cost subsidiary Song back into Delta mainline, the carrier's latest moves are the rationalization of a legacy carrier formally bloated by high wages and over-expansion.

Delta Pilots, Management Avert Strike

2006-04-15T10:05:00.000-04:00

Up until midday Friday, many analysts and Delta employees were convinced that Delta's pilots would go on strike over the Easter weekend. Such a strike would have the potential to bring the legacy carrier to its knees; however, late Friday afternoon a tentative agreement was forged between the pilot's union (ALPA) and Delta management. Representatives from both parties were tight-lipped about specific details, but the deal likely means that both sides made concessions, ultimately moving toward their goal of making Delta Airlines profitable again. The agreement still must be ratified by Delta's 5930 pilots. A few weeks prior to the tentative agreement, 95% of Delta's pilots voted to authorize a strike. Delta pilot Keith Rosenkranz, senior Delta pilot, summarized the rationale for Delta pilots to strike: "There does come a point when you have to stand up for your profession and the things that you negotiated in good faith, and if the company is not willing to recognize that then I'm not going to vote for something that continues to take." Bolstered by the favorable news, a Delta spokesperson encouraged passengers to "book with confidence." Still, Delta has to overcome a multitude of issues, like the restructuring of one of its regional affiliates, Comair, before it can eke out a profit. The road to profitability is long for Delta, and as Lee Moak, the chairman of the union's executive committee at Delta, said: "We will not hurry... but will proceed in an unrushed, methodical manner."

Continental Develops Plan to Deal with Venezuela-U.S Dispute

2006-03-18T11:00:00.000-05:00

In response to the Venezuelan government's threat to revoke the operating rights of U.S airlines as of March 30, Continental Airlines announced on Friday that they had drafted plans to accommodate passengers booked from April until the crisis was resolved. The carrier plans to allow all passengers to exchange tickets without penalties, in addition to issuing full refunds for those who plan to cancel their trips to Venezuela entirely. The dispute between Venezuela and the United States stems from a disagreement over aviation rights. In a bid to convince the U.S FAA to allow Venezuelan airlines to enter U.S airspace, which were banned a decade ago, the Venezuelan government has threatened to refuse entry to all American flights as of March 31st. Currently, Continental, which serves Venezuela from Houston, Texas, and Newark, New Jersey, is the only carrier that flies nonstop to the South American country of Venezuela. Although Continental has not altered its schedules in anticipation of a ban on American carriers, Americans can still gain admittance to Venezuela if they fly on carrier's of a different nationality, like Air France of France or Lufthansa of Germany.

Northwest Pilots Strike Tentative Deal

2006-03-05T13:18:00.000-05:00

Photo: Aeroposte Editor

Northwest Airlines and union officials representing pilots at the nation's fourth largest airline reached a tentative pay-cut deal late Friday night. Although few details of the agreement have been released, Northwest management reported that they successfully negotiated the $358 million in savings they sought at the onset of the arbitration process. Both sides most ratify the pact before the cost-savings can be implemented. The agreement defused the potential for a strike, which had been authorized by the Air Line Pilots Association (ALPA) if the bankruptcy court judge imposed these cuts without union consent. Mark McClain, the head of the Northwest branch of ALPA , characterized the agreement as "a painful but necessary part of a successful restructuring of Northwest Airlines." Following in the footsteps of embattled legacy carrier United Airlines, which recently emerged from Chapter 11 bankruptcy, Northwest has used its bankruptcy status as leverage against the traditionally strong unions representing airline employees. These pay-cuts are the second round of salary adjustments at Northwest, which slashed pilot pay 15% in 2003. According to Airline labor relations expert Daniel Petree of Embry-Riddle University, Northwest is hardly out of danger though: "If I were on either side of the bargaining table I wouldn't assume my work is done", he quipped in an Associated Press article.

Jetblue Shares Rise on News of Song Cutbacks

2006-02-25T14:54:00.000-05:00

Jetblue Airways shares rose six percent on the news that Delta Airlines plans to further cutback the number of flights between New York to Florida. Jetblue competes heavily with Delta low-fare subsidiary Song on these routes. Delta attributed the reduction in frequency of flights to "a seasonal pull down in capacity for May, which is one of the lowest demand periods to Florida." Some analysts belief the changes will be permanent, as Delta prepares to shutdown Song and fold its aircraft back into the mainline Delta fleet. Despite Delta's statement that the changes would only be temporary, brokerage JP Morgan upgraded Jetblue's rating from "underweight" to "neutral." In addition to the cuts in Florida, Delta plans to slightly reduce the number of flights to Los Angeles and Seattle. Delta spokesman John Kennedy said these changes were "partly due to the airline integrating Song into its network and adding first-class seats to its flights." Even so, with less competition on its bread and butter New York to Florida flights, Jetblue Airways expects the move to boost the carrier's financial fortunes.

International Coalition Investigates Cargo Price-Fixing

2006-02-15T21:05:00.000-05:00

Investigators acting on behalf of the American government and the European Union conducted a series of raids on more than twelve airlines yesterday. Although spokespersons for the European Commision and the US Department of Justice refused to provide details about the probe, reports of the investigation have emerged through formal press releases sent out by the targeted airlines. It is believed that the joint coalition is trying to determine whether "there has been collusion in the air cargo industry to fix prices on surcharges for fuel, security and insurance." The investigation has targeted the cargo divisions of several high-profile air carriers, including American Airlines and Air France. A host of other airlines are being investigated, including United Airlines, UPS, SAS Airlines, Atlas Air Worldwide Holding Inc.'s Polar Air Cargo unit, Japan Airlines Corp., Hong Kong's Cathay Pacific Airways Ltd., British Airways PLC, Germany's Lufthansa AG, Luxembourg's Cargolux Airlines and Lan Chile. Sources familiar with the investigation report that most airlines are closely cooperating with the authorities, although there are complaints that the investigating bodies have not fully disclosed their intent. Although currently there is little public information to support the claims of price-fixing and collusion, the discovery of illegal cooperation may serve to tarnish the reputations of some of the most respected airlines in the world. The bottom-line of these airlines may be affected as well, as harsh penalties will be dealt out to offending carriers who tried to further their profits in the burgeoning air cargo market.

Continental Readies for Newark Reopening

2006-02-12T19:44:00.000-05:00

In a press release issued late Sunday night, legacy carrier Continental Airlines announced that it plans to begin resuming operations at its East Coast hub, Newark Airport, on Monday. Buried under nearly two feet of snow, Continental was forced to shutdown its hub and strand thousands of passengers at the airport, which is located just outside of New York City. The storm that forced Continental Airlines to shutter its operations at Newark affected a large swathe of the East Coast, causing delays from Washington D.C to Boston. The effect of the storm was dampened by the actions of most airlines serving the Northeast region. Carriers took a proactive approach, waiving booking fees and canceling flights days in advance in preparation for the storm. Expect operations to gradually normalize over the next few days as planes are returned to their typical schedules.

Bombardier Shelves Next Generation C-Series Aircraft

2006-01-31T16:34:00.000-05:00

Canada's Bombardier Inc. announced today that it has stopped development of it's newest commercial aircraft, the C-Series. Attributing the canceling of the program to weak demand and poor market conditions, Bombardier's board voted to kill the $2.1 billion program. Backed by Canadian and British governments, Bombardier hoped to develop a long-range aircraft that could seat between 110 and 130 passengers. Pierre Beaudoin, president and chief operating officer of Bombardier Aerospace, said that the aerospace manufacturer would "now concurrently continue to explore the CSeries' potential as well as pursue opportunities in the regional aircraft market." Only Northwest Airlines, currently in Chapter 11 bankruptcy protection, had signaled interest; however, the carrier had no firm orders. Even so, within the last few years, Bombardier's Aerospace division has reached a crossroads. With many carriers parking their fifty-seat regional jets due to high fuel costs, the manufacturer can no longer reap profits from the once prosperous regional jet market. At the same time, Bombardier's main competitor, Embraer, has introduced a new family of regional jets, that seat between 70 and 110 passengers. Despite their recent introduction, these airplanes have earned high regard from both passengers and their operators. Without any direct competition in this market, Embraer is poised to profit tremendously from this rapidly burgeoning portion of the market. Ironically, Bombardier's saving grace may be their turboprop division. Often maligned as loud and slow, within the last few years Bombardier has developed a turboprop aircraft that rivals jets in speed and matches them in comfort. Dubbed the Q400, the aircraft seats upwards of seventy passengers and can fly over one thousand miles. Although currently in operation with only a few carriers, the Q400 is competitive with regional jets on legs of up to 500 miles in terms of time, and burns nearly half the fuel. In an era of high jet fuel costs, those cost savings are tremendous. A half decade ago, the fortunes of Bombardier and Embraer were reversed. Facing lagging sales in its turboprop market and fierce competition in the fifty-seat regional jet market, Embraer took a huge gamble and launched the Embraer 170 family with a clean slate design. Bombardier will undoubtedly try the same eventually, even though some touted the C-series as Bombardier's means to ascend to the top of the regional jet market. Today, though, Bombardier's management gave a vote of no confidence in the program, choosing to bide their time before firmly committing to a capital intensive endeavor.

Virgin America Moves Closer to Launch

2006-01-20T11:27:00.000-05:00

Media mogul and CEO of Virgin Atlantic Airways Richard Branson has moved one step closer to receiving Federal Aviation Administration (FAA) approval for the launch of his newest low-fare airline, Virgin America. Playing off of the success of popular transatlantic carrier Virgin Atlantic, Branson plans to launch an airline that will "unite Virgin's world renowned customer-focus... to create an airline that offers more- more options, more comfort, more entertainment." Due to federal regulations requiring those who hold a majority ownership to be US citizens, Branson will not be a full time member of the airline's board. Although the upstart airline has been quiet about the routes it plans to serve, it is believed that the airline will be based in the San Francisco area and will operate Airbus A320 aircraft. Some sources believe that Virgin America will be a near copy of Jetblue Airways, but with a chic British personality. Either way, the entry of Virgin America into the highly competitive US domestic market bodes badly for other carriers. Even with the recent shutdown of Washington D.C based Independence Air, another airlines entry into the market will erode the revenue of current players in the market. With some legacy carriers turning the corner financially in the past few months, Virgin America's entry will benefit the customer, but at the same time may force several more carriers into bankruptcy.
Additional Source: Virginamerica.com

Northwest Pilots Vote to Freeze Pensions

2006-01-12T16:38:00.000-05:00

Photo: Aeroposte Editor

Concerned with the tenuous financial condition of bankrupt legacy carrier Northwest Airlines, the airline's five thousand pilots overwhelmingly voted to approve a freeze of their pension plan today. Eighty-two percent of Northwest's pilots, represented by the Air Line Pilots Association (ALPA) backed an immediate freeze of the program. The latest agreement allows Northwest management to begin transitioning from the current pension plan to a more cost effective one, in which "pilots and the company will contribute a portion of their salary to a retirement account, with no promise for a fixed payout." Although the latest agreement is a positive step for the ailing carrier, further agreements must be forged between Northwest and the unions representing the airline's flight attendants and ground personnel. If an impasse remains by January 17, the carrier will ask the bankruptcy court to reject all unfavorable union contracts. In retaliation, the various unions have threatened to strike if their contracts are rejected by the bankruptcy court.

Independence Air to Cease Operations this Thursday

2006-01-02T14:26:00.000-05:00

Ferocious competition and high fuel-costs claimed another American airline today. Low-fare carrier Independence Air (Flyi), which operated as a regional feeder for United Airlines before abandoning the legacy carrier, published a press release outlining its shutdown in the coming weeks. All operations will cease by Friday, December 6, and all airline employees will be terminated Thursday evening. Customers with future flights after the shutdown may rebook with Independence Air free of charge if they plan to return before the airline shuts down. Otherwise, passengers are encouraged to look to other airlines, as congressional law requires other domestic carriers to accommodate stranded passengers. Although Independence Air's business plan was tragically flawed, for a span of a year and a half, the crafty carrier dramatically lowered ticket prices across the nation. In particular, those in the Washington D.C area benefited, as Flyi operated its central hub at Washington Dulles, in direct competition with legacy carrier United Airline's hub there as well. Passengers should be prepared for dramatic airfare hikes to all destinations Independence Air served, but in particular smaller regions like Burlington, Vermont or White Plains, New York.

Delta Posts One Billion Dollar Loss Since Bankruptcy

2005-12-04T11:17:00.000-05:00

Since declaring bankruptcy six weeks ago, major American legacy carrier Delta Airlines Inc. said that has lost $1.14 billion. Delta management attributed most of the costs to fuel, salary, and interest expenses. Due to bankruptcy proceedings, the carrier was forced to spend an additional $17 million on legal fees. Excluding reorganization costs, Delta lost $472 million in the past six weeks, although the carrier spent over $2.61 billion. Delta's losses are more than three times that of competitor Northwest Airlines, which filed for Chapter 11 bankruptcy on the same day as Delta. Nonetheless, both carriers are in equal peril of being forced to cease operations unless they undergo equally drastic restructuring. In Delta's quest to save $3 billion in overall costs, it plans to ask for $325 million in concessions from its pilots. The Air Line Pilots Association (ALPA), the union that represents Delta pilots, has countered that it will only except $90.7 million in wage concessions. If the two parties are unable to agree, ALPA has stated that it will instruct Delta pilots to strike. All in all, with the termination of Delta's in-house low-fare carrier Song, Delta is on the right path towards profitability. Unfortunately, it will take more than the redistribution of planes to right Delta's course.

Southwest Decides to Expand Operations in Philadelphia

2005-11-28T14:43:00.000-05:00

Encouraged by its success at US Airways hub Philadelphia International Airport, Southwest Airlines plans to double the number of scheduled flights in the coming months. Southwest is in the process of acquiring six more gates, bringing it to a total of twelve gates. The additional gates will be acquired from legacy carriers United and Delta Airlines, who are currently downsizing their domestic operations under fierce pressure from low-cost carriers such as Southwest and Jetblue. At its predicted peak, the low-fare carrier will operate 106 flights per day. US Airways presence will still be four times that of Southwest at Philadelphia, even after the two-fold increase in flights. Since Southwest entered the Philadelphia market, average one-way airfare has dropped twenty-six percent. Apparently unconcerned with the increasingly competitive environment, US Airways spokesman Philip Gee told "The Philadelphia Inquirer that the airline wasn't fazed by Southwest's expansion plans." He added that "America West Airlines, which acquired US Airways out of bankruptcy court, has competed for years with Southwest in Las Vegas and Phoenix, where both airlines have hubs."

Jetblue Pioneers Online Bag Check

2005-11-23T12:53:00.000-05:00

While airlines have been offering online check-in for passengers for nearly half a decade, cutomers with baggage still had to wait in the traditional lines to check their luggage. This week Jetblue Airways extended its online check-in policy beyond ticketing, allowing passengers to print baggage tags for their luggage and drop them off at a specialized Jetblue counters. While passengers cannot actually print the bag tags applied to their luggage away from the airport, they are issued a specific code, which when entered into a self-service kiosk, prints the tags. A Jetblue crewmember assigned to the area then applies the tags. The implementation of online bag check is the natural extension of online check-in, as it allows a passenger to take care of their ticketing and luggage needs before arriving at the airport. At Jetblue's hub, John F. Kennedy International, the airline has devised a separate area for passengers to leave their checked bags. At all other Jetblue destinations the airline advises passengers to leave their checked luggage with a Jetblue customer service representative near the self-service kiosks. Other airlines are expected to follow Jetblue's suit, as this new service makes check-in less chaotic for passengers and provides practical advantages for carriers.

Boeing Elects to Launch Larger 747 Variant

2005-11-15T16:45:00.000-05:00

Capping months of speculation in the aviation industry over whether Boeing would update its venerable 747, the aircraft manufacturer announced today that it would indeed launch an updated 747. Although the program was given the 747 Advanced moniker while Boeing was debating whether to launch the program, the new version of the aircraft will be called the 747-800, to demonstrate the technology and expertise borrowed from the revolutionary 787, a completely new Boeing aircraft currently in development. According to Boeing chairman Allan Mullaly, "The 747-8 will use the technologies of the 787 Dreamliner to significantly increase the passenger and freighter capabilities of the 747, and offer greater fuel efficiency, improved operating economics, and be more friendly to the environment with reduced noise and emissions." While the 747-800 is a stretched version of the current 747-400, it is not meant to compete directly with the largest commercial jet in the world, the Airbus A380. The 747-800 fits in a niche between the 747-400 and Airbus A380. The 747-800, which is significantly more efficient than the 747-400 and in some cases the Airbus A380, derives most of its efficiency from an updated wing, a greater use of composites to reduce weight, and more fuel-efficient GeNX engines. As of launch, Boeing has confirmed that it has orders from Cargolux and Nippon Airlines valued at $5 billion. Both carriers only ordered the cargo version of the aircraft, but orders for the passenger version are expected shortly.

Independence Air Elects to File for Chapter Eleven Bankruptcy

2005-11-07T16:54:00.000-05:00

Hurt by a poor business plan, high jet-fuel prices, and inept management, low-fare carrier Independence Air (Flyi) agreed to file for voluntary Chapter 11 bankruptcy today. Launched one year ago under the premise that the former contract carrier could provide low-fares with high frequency flights to a variety of East coast locations, the airline has consisently lost money since it declared "independence" from United Airlines. Although Independence Air was the best financed airline startup in US history, it went from having $350 million one year ago to $24 million as of Monday, November 7. Flyi CEO Kerry Skeen attributed the bankruptcy filing to "going independent in what has been described as the most challenging economic environment in airline industry history, including record high fuel prices and extreme revenue weakness." He added that "these circumstances have prevented us and virtually all U.S. airlines from meeting financial goals." On the positive side, he professed his belief that the carrier would be saved because it had a "good, loyal fan base" in the Washington D.C area.
Independence Air, which is based at Washington Dulles International in the Washington D.C metropolitan area, won accolades for its inflight service; however, it's excellent service could not save it from its disastrous financial condition. The carrier never seemed to have a clear direction; first it expanded to western cities with efficient Airbus A319 aircraft, then Independence Air retracted from these cities despite high loads, citing high fuel costs. The root of the carrier's demise was its reliance on fifty-seat regional jet aircraft. These aircraft, which have inherently higher costs per passenger than larger jets, are rapidly being pulled from service by airlines worldwide due to high fuel costs. Coupled with unprecendented low-fares, the load-factors Independence Air had to achieve to turn a profit were nearly impossible in the current climate of the American airline industry.
Rick Delisi, Flyi spokesman, said that the airline would operate on a typical Monday schedule and that he did not expect any immediate disruptions. While in bankruptcy, the carrier plans to renegotiate aircraft lease rates, restructure its costs, and trigger a sixty-day court-supervised auction. Essentially, the carrier has put itself up for sale; if there are no serious offers before mid January 2006, the carrier likely will be forced to liquidate. Flyi's assets aren't of much value to other carriers, as most of its aircraft and gate space are leased. Although not officially confirmed by Independence Air management, there is a rumor circulating that Virgin Atlantic CEO Richard Branson may purchase the assets and flight certificate of Independence Air to speed the launch of his proposed low-fare airline, Virgin America.

Continental's Fortunes Turn

2005-11-05T11:19:00.000-05:00

On the heels of past profitable quarters, Continental Airlines CEO Lawrence W. Kellner said that the carrier lost $115 million in October alone. In a recorded phone message to employees, Kellner said that the fourth quarter loss could widen, but that he hoped "that a recent pullback in fuel prices would mean losses in November and December losses wouldn't be as large." The carrier had previously warned that a fourth quarter loss would very possible; however, this statement was the first time Continental management gave a quantifiable figure. Currently the number five U.S carrier, Continental's fourth quarter performance likely will be disappointing because of exceedingly high fuel costs induced by the series of hurricanes in the Gulf region of the United States. According to analysts, other airlines are likely to post similarly dismal earnings reports. Even low-fare upstart Jetblue Airways, which has been profitable since its creation in 2000, predicts a fourth quarter loss.

Continental Contributes Additional Money to Pension Plans

2005-10-15T12:47:00.000-04:00

As major US carrier Delta Airlines warned that it would default on pension payments to its retirees without a congressional bailout, the Atlanta-based airline's fierce rival Continental Airlines announced that it would contribute an additional $84 million to its employees pension plans on Tuesday. In a statement found in a Continental press release dated October 10, Larry Kellner, Continental's chairman and chief executive officer wrote that "Continental's recent $84 million pension contribution demonstrates that we are working hard to fulfill our obligations and keep our promises to employees." Despite an industry-wide downturn that began following September 11, 2001, Continental has contributed over $800 million to its pension plan program. The one-time $84 million contribution brings Continental to the $304 million minimum set for the 2005 plan. As Northwest Airlines and Delta management are working to stem an exorbitant negative cash flow, Continental is looking towards the future with a firm order for ten of Boeing's revolutionary 787 aircraft.

New York Stock Exchange to Delist Delta Airlines

2005-10-10T12:44:00.000-04:00

Photo: Aeroposte Editor

The New York Stock Exchange (NYSE) has submitted a formal request to the Security & Exchanges Commission for the delisting of Delta Airline's stock from their stock exchange. Pending approval, NYSE intends to delist Delta's stock by October 13. Delta received notification on October 4, as the "average closing price of its common stock fell below the continued listing minimum share price standard of $1 over a consecutive 30-trading-day period." The legacy carrier responded that it would not seek to rectify this problem and would not fight the delisting. The removal of Delta from the New York Stock Exchange is indicative of the airline's current state and it's need to restructure into a leaner enterprise. Rival United Airlines faced bankruptcy twice over the past four years, yet sources close to the matter report that that carrier will emerge from bankruptcy protection within the next few months. Delta likely will follow the same steps of its rival by drastically cutting salaries, inefficient aircraft in operation, and destination served.

Horizon Air Reaches Agreement with Mechanics

2005-10-10T12:36:00.000-04:00

Horizon Air, the regional subsidiary of Seattle based Alaska Air Group, announced Friday evening that it had signed a tentative agreement with its mechanics. The contract will last for three years and cover over four- hundred mechanics and fleet service agents. Futher details are unavailable at present, as terms are being withheld pending the ratification of the agreement by the mechanics union, the Aircraft Mechanics Fraternal Association. This new agreement is one of the steps parent company Alaska Air Group, the owner of Alaska Airlines and Horizon Air, is taking to lower costs and increase profitablity.

Continental Airlines Reinstates Houston Service

2005-09-25T16:50:00.000-04:00

Continental Airlines is rapidly reopening its hub at Houston Bush Intercontinental Airport (IAH) following its recent shuttering due to hurricane Rita. The legacy carrier plans to operate 249 of its 274 regularly scheduled departures on Sunday, with all flights departing on Monday. Continental was able to resume operations at IAH because Hurricane Rita came ashore earlier than expected and largely spared the city of Houston. Chairman and CEO Larry Kellner thanked his employees, saying that the airline's "ability to achieve this successful resumption of service was made possible by careful planning and execution by co-workers working together throughout the company." To prepare for the buildup of service, Continental ferried in 14 empty planes full of Continental employees and TSA screeners. Continental Airlines is allowing all passengers affected by hurricane Rita to reticket without penalty, through October 3.

Jetblue Flight 292 Successfully Completes an Emergency Landing at LAX

2005-09-21T21:41:00.000-04:00

Moments ago, a Jetblue Airways Airbus A320 completed an emergency landing at Los Angeles International Airport. The flight crew of Jetblue flight 292, initially inbound to John F. Kennedy International in New York, noticed a malfunction with the aircraft's landing gear shortly after takeoff. Inflight instrumentation indicated that the nosegear at the front of the aircraft never fully retracted; after a flyby of the control tower at Burbank Airport, the aircraft's point of departure, photographs indicated that the front gear was fully rotated towards the left and locked in position. Subsequent attempts to correct the malfunction proved unsuccessful, so the captain declared an emergency. The Jetblue aircraft took off from Burbank, California, just outside of Los Angeles, at 3:17 pm PST. The flightcrew and passengers aboard the aircraft were forced to endure over two hours of circling over the Pacific ocean though, as the Airbus A320 was forced to burn off most of its fuel before landing. Emergency officials and the crew of Jetblue flight 292 elected to land at Los Angeles Airport (LAX) instead of Burbank, as LAX had longer runways and more emergency equipment available. The crew of the Jetblue flight performed a perfect soft-landing: a technique in which the pilot tries to keep the nosegear off the runway as long as possible. Once the front nosegear touched the runway, sparks and fire showered the underbelly of the aircraft. Finally, with 95% of the runway used, Jetblue flight 292's captain guided the aircraft to a stop, with only the nosegear appearing to have endured significant damage. Throughout the landing, the aircraft remained perfectly inline with the center-line, an indication of the proficiency of the flightcrew of Jetblue flight 292.

Independence Air: The Little Carrier that Strived to Be So Much More

2005-09-20T21:56:00.000-04:00

Photo: Aeroposte Editor (Flyi Airbus A319)

Tired of operating regional aircraft under the United Express banner for parent company United Airlines, Independence Air CEO Kerry Skeen broke ties with the legacy carrier fourteen months ago, with the belief that he was steering the airline toward bluer skies. Instead, he may have sent the airline in for a fiery crash landing, as Independence faces either a Chapter 11 filing or Chapter 7 liquidation in the near future. Independence Air, commonly referred to by its stock symbol “Flyi”, was to serve East coast, and eventually West coast cities with scrappy Bombardier regional jets and plush Airbus A319 aircraft. Even though regional aircraft are well-known by airline executives to be expensive to operate without high load factors, Independence Air executives showed no fear as they worked to convert the outfit from the bastard child of United to a low-fare contender. Provided of course, oil stayed at $35 per barrel, as it was at the time, the airline had a fighting chance.

Instead, Independence Air has struggled to make a profit. While its in-flight product has won accolades from various travel magazines, the bottom-line of the airline has been less than stellar. The introduction of larger, more efficient Airbus A319 aircraft has had a positive effect financially, but their effect has not been profound enough to turn the fortune of the carrier. Eight months after Flyi’s so-called “Independence Day”, management reached a restructuring agreement with its creditors. The process entailed selling off a large portion of its Bombardier CRJ-200 regional jets to other airlines while expanding its Airbus fleet. With the latest cutbacks in capacity and destinations served, Independence Air seemed in prime position to reposition itself. Then, the FAA slapped the airline with maintenance fines for violations when the airline flew for United Airlines. Load factors didn’t exactly pan out either, and now, Independence Air is at a crossroads. Since nearly all of property is leased, the airline doesn’t have many assets. Without assets, the airline doesn’t have capital to continue operations in its current state. Indeed, as Kerry Skeen was quoted, “There are tough times ahead” for the little carrier that strived to be so much more.

Independence Air May File for Bankruptcy Soon

2005-09-20T21:45:00.000-04:00

Several sources are claiming that an Independence Air bankruptcy filing within this week is imminent. There are indications that the carrier may file for either Chapter seven or eleven bankruptcy as early as tonight. Independence Air management has been decidely mum; no press release has been circulated yet. Although it is highly unlikely, there is speculation that Richard Branson may purchase Independence Air, rehabilitate it, and use it as the foundation for his proposed (and slowly developing) Virgin America. Stay tuned for more news...

Delta Bankruptcy Filing Within this Week Likely

2005-09-12T19:45:00.000-04:00

Photo: Aeroposte Editor

Delta may file for bankruptcy as early as Wednesday, sources close to the matter say. Aeroposte recommends it's readers follow this rapidly developing story through one of the provided links.

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US Airlines Donate their Time & Resources

2005-09-03T09:45:00.000-04:00

One would think that as jet fuel prices continue to spiral forward, US domestic carriers would take further action to cost their costs. Yet, in a tremendous show of patriotism, some American carriers are assigning aircraft to ferry supplies into areas affected by Hurricane Katrina, and to extradite refugees from the hopeless situation in the New Orleans area. Low-cost carrier Airtran Airways has so far delivered 52,000 pounds of supplies to the Gulfport area, while Northwest Airlines has concentrated on airlifting refugees from troubled areas. Hip Denver-based Frontier Airlines has created a program that allows its frequent-flier members to donate some of their accrued miles so that Red Cross personel and those affected by the storm can be transported free of charge. Other carriers have banded together to provide a shuttle service to move the homeless from the New Orleans area to shelters scattered across the nation. However, it's unclear how long the airlines will provide these services. Many airlines, in particular Airtran, which has the largest presence at decimated Gulfport, Mississippi, have spare aircraft due to the closure of commercial service at the major airports within a 90,000 sq mile area destroyed by Hurricane Katrina. Some carriers may pullout in the coming days as the situation in the Gulf region stabilizes, and as less national attention is given to the cleanup efforts. More importantly, the closure of many refineries has squeezed jet-fuel production; at least one airport, Washington Dulles, has reported the beginnings of a fuel shortage. Many airlines have reacted by enacting a process called "reverse-tankering", where an aircraft is filled up with as much fuel as possible at the airport with the greatest supply, despite cost. Traditionally, carriers that utilize the hub and spoke prefer to fill up their airplanes at their hub's, as they have a lower jet-fuel price locked in with their suppliers. Nonetheless, Hurricane Katrina has worsened the plight of all US carriers. The airline industry will endure the economic effects of the hurricane for many months to come, just as many other fuel-dependent industries, such as the trucking industry. But Katrina has also demonstrated that in times of intense need, the airline industry can be counted on to pool its resources and help out when a major disaster occurs. As Delta spokeswoman Benet Wilson said, "Extraordinary times call for extraordinary measures. We saw a need that needed to be filled, and we stepped in to help."

Jetblue to begin Boston to Seattle Service

2005-08-31T14:06:00.000-04:00

Despite sky-high fuel prices and intense competition, Jetblue continues to expand at a voracious rate. Beginning November 3, Jetblue will fly between Boston and Seattle once daily. Initial fares will go on sale for $99 one way; however, regular one-way fares will range between $149 and $349 one way. According to a press release, Jetblue's fares will be up to 31% less than other competitors current fares on the Boston to Seattle route. Indeed, Jetblue CEO David Neeleman has kept his promise to expand Jetblue operations at Boston Logan International, as Seattle is the tenth destination Jetblue serves from Boston. Massachusetts's Governor Romney praised Jetblue's new service to Seattle, congratulating the airline "on its growth thus far." Washington State governor Christine Gregoire echoed the same sentiments, adding that she was "excited about the new opportunities JetBlue is bringing to [her] state.'' The new flights cater towards business and red-eye travelers, as the outbound flight departs from Boston at 8:45, and does not arrive back in Boston until 9AM the following day. If the route performs as well as other Jetblue flights out of Boston, expect greater flight frequencies and more attractive departure times in the near future.

United Arranges New Financing

2005-08-26T17:31:00.000-04:00

United Airlines, amid a scurry of recent activity, announced today that it has lined up $3 billion in new lending from a variety of financial firms. Citibank, J.P. Morgan, Deutschebank, and GE Commercial Finance all will contribute toward the lump sum of roughly three billion dollars. Today, United also won approval for an extension to file its reorganization plan. Bankruptcy court will now require United to file a plan detailing its reorganization by the first of November. The carrier hopes to emerge from bankruptcy in late 2005 or early 2006. United latest financial statements were not particularly positive for the last quarter, as United Airlines parent company had a net loss of $274 million. The key measure of the airline’s health, unrestricted cash, lies at roughly two-thirds of $2.8 billion.

Just in: Skywest to Merge with Atlantic Southeast Airlines

2005-08-15T21:27:00.000-04:00

Delta Airlines, seeking to raise enough capital to settle a dispute with two credit card processors, sold regional subsidiary Atlantic Southeast Airlines (ASA) to Skywest Airlines, which is a regional partner of the legacy carrier. Skywest bought ASA for $425 million, which is significantly less than what Delta paid when it purchased the carrier for $700 million in 1999. Skywest Airlines will pay $350 million immediately, with the additional $75 million contingent on Delta maintaining its current contract with Skywest. Delta made this sale in desperation, as it is racing to raise $750 million so that it will be able to continue processing Visa & Mastercard credit cards. Skywest CEO Jerry Atkin "acknowledged that the structure of the deal was engineered to protect his company from any repercussions from a Delta bankruptcy situation."

American Airlines Introduces New Business Class Seats

2005-08-15T10:24:00.000-04:00

Buoyed by recent profits, American Airlines announced today its plans to install new "lie-flat" seats in a select portion of its international fleet. Initially, the installation will be limited to the Boeing 767 & 777 fleet. The installations will vary in the two aircraft, as American plans to upgrade its 767 business class seats to lie-flat seats beginning in 2006, while more triple sevens will receive the airline's new and widely popular Flagship suites located in first class in 2007. With constant profitability in sight, despite ever-rising oil prices, American is now in the position to offer a first and business class product comparable to it's Asian and European counterparts. In an effort to survive the tumultuous climate following September 11, American legacy carriers neglected their premier products in order to cut costs. While low-fare carriers can offer products superior to the legacy carriers domestically, the same does not apply to international flights, which are the uncontested domain of legacy carriers. International routes remain the sole area where carriers can largely avoid costly fare wars; so, with deepening pockets, legacy carriers are beginning to further build upon their successes in this one last frontier. Amenities, particularly in first and business class are more important due to longer flight times than domestic flights, as Garton, Executive Vice President of Marketing at American points out: "We know how important it is to our passengers to be comfortable on their international flights, whether they are working, enjoying a meal and a movie, or just relaxing."

Delta Pins Survival Hopes on New Website

2005-07-31T14:11:00.000-04:00

Delta Airlines, which just reported a staggering loss of $382 million last quarter, hopes to attract more customers to its redesigned website. The website will be promoted by an extensive advertising campaign covering nearly all advertising mediums. According to chief marketing officer Paul Matsen, the website is their "primary focus of marketing for the second half of the year." Although Delta infused a large amount of money into the creation of a brand new website, Delta hopes to cut expenses in the long run by reducing the amount of reservations done through travel agents or over the telephone. Chief Marketing Officer Paul Matsen noted that "there are significant savings associated with getting people on Delta.com. It is a core part of our transformation strategy." Reservations booked over Delta's website cost less than $1, while tickets purchased over the phone often cost Delta from $8 to $10. Internal data shows that only 24% of Delta customers book through their website. By 2007, the airline aims to sell 40% of its tickets exclusively through Delta.com. The website alone, which features a flashier design and streamlined features, will not solve Delta's financial problems. Rather, it is the step in the right direction, for an airline that has a very long way to go before reaching greener pastures.

American Opens Phase I of New Terminal at JFK

2005-07-27T21:48:00.000-04:00

Photo: Aeroposte Editor

American Airlines opened the first phase of its new terminal, at John F. Kennedy International Airport today. The new terminal, which will cost $1.1 billion, covers just over 1.5 million square feet. It will feature sixty ticketing positions, a ten-lane security check point, inline baggage screening system, and a direct connection to the main terminal via a new elevated nine-lane freeway. With the completion of phase I of the terminal expansion, terminal D and concourse 9 will close. In later phases, the terminal is slated for additional regional jet gates, lounges, and a massive customs facility. According to American Airlines CEO Gerard J. Arpey, this project "represents one of the biggest, boldest -- and most expensive -- projects in American Airlines' history, and it underscores our commitment to JFK and our determination to preserve its status as one of the world's premier domestic and international gateways." The christening of the terminal, coupled with the tidy profit American earned in the last quarter, provides a glimpse of hope for other struggling legacy carriers.

America West- US Airways Merger Approved

2005-07-25T18:03:00.000-04:00

The Air Transportation Stabilization Board (ATSB) approved the merger of America West and US Airways today. This announcement will allow the two airlines to begin the final two steps before the merger can occur. The two airlines are waiting on a final bankruptcy court ruling and approval from US Airways board. The new airline, which will be predominantly run by America West management, will retain the US Airways name and livery. America West CEO Doug Parker, the future CEO of the merged airlines, was quoted as saying that "[he was] grateful for the board's unanimous endorsement of our proposed merger." Current US Airways CEO Bruce Lakefield added that they appreciated "ATSB working closely with [them]." The debt owed by the two airlines to the ATSB will be consolidated and payments will begin in September of this year. Combined, the airlines owe $1.08 billion to the Air Transportation Stabilization Board. Amid the cheery news of the ATSB's approval, America West, soon to be US Airways, announced direct service to Hawaii via Phoenix.

Auditions

2005-07-21T22:21:00.000-04:00

A preview (and an excuse for my lack of posting) for what's to come within the next few months. Prepare for aviation news in a 2nd dimension: audio.

Audition tape #1

Jetblue: Stepping on Continental's Toes

2005-07-17T22:39:00.000-04:00

Photo: Aeroposte Editor

Jetblue, the low-fare airline known for its airplanes equipped with free satellite television, has embarked upon a new chapter in its short history. David Neeleman, Jetblue's CEO, has sent shockwaves through the airline industry, as his airline has consisently turned a profit since its inception, all the while developing a very loyal customer base. Jetblue's sterling achievement, though, has been its ability to woo well-heeled business travelers away from the stodgy legacy carriers. This is no accident, as studies have shown that as legacy carriers have cut-back service, low-cost carriers (LCC's) service has frequently exceeded that of the entrenched legacy airlines. Key to Jetblue's success has been its approach to avoid highly competitive markets already dominated by the big five (United, Continental, Delta, Northwest & American). Like Southwest, Jetblue elected to fly to less-developed airport in big-city markets. For example, instead of flying into San Francisco International Airport, Jetblue operates out of its near neighbor, Oakland International. Jetblue doesn't like to get involved into heavily-competitive markets, as its pullout from Atlanta, the hubs of Delta and Airtran Airlines, demonstrated. So far Jetblue is sticking to what it does best: milking underserved markets that demand a high level of service for a low price. At first glance, the announcement that Jetblue will begin operating out of Newark International in New Jersey, the third airport the airline will serve in the New York City metropolitan area, seems contrary to its behavior thus far. However, this ploy is an extremely shrewd business move on the part of Jetblue management. By playing off of its strong customer base in New York City (Jetblue has its lone hub at JFK), Jetblue hopes to cut into the market of Continental Airlines, which maintains its east coast hub at Newark International. Essentially, Jetblue is trying to position itself as the domestic carrier for the New York area. In addition, the airline seeks to spread its explosive growth in the NYC area between the three airports, thus minimizing delays. Already Continental has made it extremely clear that it will not view this intrusion onto its turf lightly. The legacy carrier, which is the best positioned financially of the bunch, has slashed fares on all routes from Newark it will be competing with Jetblue on, and increased frequencies. The question remains: will Jetblue endure a war of attrition with Continental at Newark, or retreat back to its comfortable confines at John F. Kennedy International? This will be the first of many battles the fledgling airline will have to endure to prove its place in the hardened airline industry.

United to Expand Los Angeles- Sydney Service

2005-07-13T22:28:00.000-04:00

Between December 15, 2005, and April 27, 2006, United Airlines will offer three additional weekly flights between Los Angeles and Sydney. United's senior vice president of Worldwide Sales and Alliances remarked that "this flight addition also reinforces United's leadership position in the Pacific, on the U.S. West Coast and specifically at LAX." United attributes the increase in flights during this period to greater than expected demand for flights between the United States and Australia. The airline will operate a four-class Boeing 747-400 on this route, with 14 first class seats, 73 business class seats, 88 Economy Plus seats, and 172 standard economy seats. Although United only officially announced the additional flights today, seats have been on sale since July 9.

US Airways Receives Additional Investment from Investment Firm

2005-07-10T09:15:00.000-04:00

Photo: Aeroposte Editor

Tudor Investment agreed to invest $65 million into the soon to be merged US Airways on Friday. For this investment, Tudor Investment, a Connecticut based firm, will receive 3.9 million shares in the reformed airline. US Airways CEO Bruce Lakefield used this announcement as an opportunity to substantiate his claim that this merger would be successful: "The inclusion of Tudor as a new equity partner is a clear indication that investors continue to find great potential in our proposed merger with America West," he said. Since the merger was announced on May 20, the two airlines have received $1.5 billion in outside investment.The new carrier will maintain hubs in Charlotte, Philadelphia, and Phoenix, along with focus cities Las Vegas and Pittsburgh. The business plan of the consolidated airline calls for the emulation of Southwest Airlines low-cost, low-fare approach. Many airline analysts are skeptical, though, because it will be extremely challenging to transform two airlines with high costs into an enterprise capable of competing with Southwest. While this new plan is fraught with risk, the two airlines must make this drastic change to prevent extinction.

Northwest Mechanics' Union Set to Vote on Strike

2005-07-02T11:23:00.000-04:00

Photo: Aeroposte Editor

The national executive council of the Aircraft Mechanics Fraternal Association voted today to authorize a strike vote. Members will have until July 19th to cast their votes. The mechanics union representing Northwest mechanics, AMFA, decided to authorize this vote because of Northwest Airlines "continuing refusal to take current contract negotiations seriously." The current disagreement between the airline and the union is over staff reductions and wage cuts. Northwest management wants "pay cuts of 25 percent from mechanics", while AMFA wants pay cuts of only 16.1%. The mechanics union would only save Northwest $140 million, in contrast to managements proposed savings of $1.1 billion. Northwest management expressed disappointed disappointment in the latest actions of the AMFA, however sources close to the matter indicate that Northwest is taking precautions to avoid a shutdown in the wake of a strike.

Southwest Expands Codeshare with ATA

2005-06-26T10:14:00.000-04:00

Passengers greeted the Southwest codeshare with American Trans Airlines (ATA) enthusiastically when the agreement was announced several months ago. Today, Southwest fulfilled its promise to expand its codeshare with ATA to include service to Hawaii. Beginning August 4, passengers will be able to fly to Honolulu from over 19 Southwest destinations. In the latest codeshare expansion, Southwest primarily expands upon its Las Vegas to Honolulu service, as Las Vegas serves as the connecting airport for all Southwest flights to Hawaii. One way fares to Honolulu will range from $199 to $299, excluding airport taxes and promotions. According to Stan Hula, vice president of ATA, "the addition of the Honolulu-to-Las Vegas connection service is the next logical step in our codeshare program. Many more of our Customers now have access and can take advantage of the great, low fares to a greater amount of destinations in the continental U.S.'' Southwest's move into the Hawaii market, via the codeshare, marks the end of legacy carriers domination on this particular route. These carriers can no longer afford to charge top-dollar prices, as passengers are now intent on paying the low-fares they're accustomed to seeing on Southwest flights within the Continental United States.

Japan, France to Develop Next Generation Supersonic Airliner

2005-06-15T11:02:00.000-04:00

Representatives on behalf of the French and Japanese governments signed an agreement to today to develop a supersonic jet to replace the recently retired Concorde. The countries will split the initial research costs between themselves for the first three years, until a decision is made whether to formally launch the aircraft. According to the newly founded consortium, the group seeks to make a supersonic airliner capable of flying the "Tokyo-to-New York route in six hours... with up to three times as many seats" as the Concorde. While the Concorde was an incredible engineering achievement and a status symbol for Great Britain and France, the aircraft never was able to be profitable for the few airlines that operated the aircraft. The fate of the Concorde was sealed at the turn of the millennium, after a horrific crash shortly after takeoff from Charles De Gaulle Aiport in Paris. Although Japanese officials outlined the Japanese companies to be involved in the project, French representatives were unwilling to elaborate on the European members of the newfound alliance. Analysts have greeted this announcement with skepticism, as American aerospace giant Boeing has twice investigated a similar supersonic aircraft, yet shelved it both times because it could not overcome obstacles such as poor fuel economy and the elimination of the sonic-boom. As airlines reel from high fuel-costs, the development of a fuel-guzzling aircraft seems contrary to the current status quo in the industry. Currently, airlines are lining up to purchase the Boeing 787, which Boeing promises will deliver fuel savings 30% greater than current aircraft in its class. It remains to be seen whether the airline industry will collectively shift towards an emphasis or speed or efficiency over the next few decades. Still, in an era where passengers are flocking to low-cost carriers such as Jetblue or Ryan Air, a shift towards speed in the short term is unlikely.

Future Absence

2005-06-09T21:59:00.000-04:00

The Aeroposte staff regrets that it will be able to only post new stories infrequently through June 23rd. However, please check back, as there are plenty of interesting stories in our archives.
Sincerely,
Aeroposte Staff

British Flybe to Purchase Embraer Jets

2005-06-06T12:52:00.000-04:00

According to a Reuters, a news agency, British low-cost carrier Flybe plans to purchase $1 billion worth of Embraer 195 aircraft to replace its aging BAE 146 jets. Flybe placed firm orders for fourteen aircraft, while alluding that it may purchase twelve more aircraft at a later date. The Embraer 195 is part of a new family of aircraft Embraer recently launched. The largest in its family, the EMB 195 will seat 118 passengers in a four abreast configuration. So far, the aircraft in this series have been extremely well-regarded by its operators, which include United Airlines, US Airways, and a host of European carriers. This order is a crucial win for Brazilian based Embraer, as Flybe initially sought to purchase 150-seat aircraft from either Airbus or Boeing. Flybe will be the launch partner for this aircraft, and expects to receive delivery of its first aircraft in August 2006.

Southwest Load Factor Dips in May

2005-06-03T17:25:00.000-04:00

Southwest Airlines, the poster-child of the airline industry, saw its load factor slip 1% in May when compared to last year. The airline carried 1.5% less passengers this May than it did in 2004. Total passenger traffic for Southwest grew in May, however the expansion of the airlines fleet ensured a drop in load factor for the month of May. As of May, Southwest's yearly load factor was down 1% from 2004. Even so, the feisty airline continues to eke out a profit, thanks to fuel hedging and an efficient route structure.

Airbus A380 Falters

2005-06-02T22:01:00.000-04:00

Qantas Airlines, a dominant Australian carrier that ordered twelve Airbus A380's, confirmed today that Airbus has delayed their first delivery by at last nine months. Singapore Airlines, the first airline slated to receive the behemoth aircraft, believes that delays are imminent for their aircraft as well. Under the current agreement, Airbus is liable to pay compensation for missed milestones. Qantas has publicly stated that they will seek compensation, while the other airlines that ordered the A380 have yet to comment. An Airbus spokesman was quoted as saying that the delay was "for a variety of things", not one specific issue. Airbus' parent company EADS stock dropped 1.2% on the latest bad news.

United Mechanics Avert Strike

2005-05-31T15:13:00.000-04:00

United Airlines management and their mechanics reached a tentative agreement today. The contract will be formally signed on June 17th. In total, the new contract will save United $96 million a year. Wages will be cut by 3.9%, while sick-time pay will be lowered as well. According to a United spokeswoman, "This is an important and necessary step in providing the cost savings United needs to finish its restructuring successfully." Mechanics reached an agreement with United Airlines management, as the rejection of the lastest contract would have allowed the bankruptcy judge to impose even harsher conditions at the next round of bargaining. The bankruptcy judge will rule later today whether to cancel any remaining unsettled contracts with other unions.

Rumor: United Mechanics May Strike On Tuesday

2005-05-30T11:12:00.000-04:00

According to a number of our sources, United Airlines mechanics are gearing up for a strike on Tuesday, June 1st. Negotiators are working furiously to avert this crisis; however, the two groups remain deadlocked. A strike would be disastrous for the airline, even a shortened one. In other disheartening news, eight lessors plan to repossess five of United Boeing 767 aircraft soon. Although there are indications that United has prepared for this inevitability, the removal of these aircraft from the fleet will hurt United on its international routes, which are consisently profitable for the legacy carrier.

Investment Fund Contributes $150 Million Towards US Airways Merger

2005-05-30T08:50:00.000-04:00

(Photo: Aeroposte Editor)

Wellington Management Co. plans to invest $150 million to ensure the smooth merger of US Airways with America West. Thus far, the two airlines have raised a combined half a billion dollars to bring US Airways out of bankruptcy. This latest infusion of money into the troubled airline was disclosed in court documents filed Friday. The proposed merger is set for May 19th; the synthesis of the two carriers will create the sixth largest carrier in the United States. This latest deal is remarkably similar to the other four past investments by outside companies; however, Wellington management will not be able to place a director on the board of the new airline. While Wellington Management is forfeiting some control in the new airline, the money it adds to the endeavor likely will be very important in turning around US Airways.

Northwest to Begin Charging for Pretzels

2005-05-28T10:18:00.000-04:00

(Photo: Aeroposte Editor)

Northwest plans to nix free pretzels on all of its US flights, claiming that it will realize cost-savings close to $2 million per year. This move comes a few months after the airline suspended free meals in economy class. Effective June 9th, passengers can buy the same pretzel bags previously available for free, for $1 per three-ounce bag.

Frontier Narrows Loss

2005-05-27T12:45:00.000-04:00

The outlook for Denver, Colorado based Frontier Airlines seems to be improving. The low-fare carrier cut its fourth quarter loss by just over $2 million when compared to this time last year. Frontier posted a $3.7 million loss for this year, compared to $5.8 million one year ago. Their management attributes their step towards profitability to a higher load factor, which crept up three percentage points to 73.6%. Nonetheless, Frontier expects to lose money in the first fiscal quarter of 2006, due to high fuel prices and an April blizzard in Denver that shut down the airport. As the low-fare airline, which offers satellite T.V in its aircraft for a small fee, continues to receive new aircraft from Airbus and expand its route structure, it will continue to plague legacy carrier United Airlines, which maintains a large hub in Denver as well.

Boeing Launches Cargo 777

2005-05-24T16:11:00.000-04:00

After all the hype for today's new product announcement, Boeing announced the official launch of the 777F, the cargo version of the Boeing 777. Although the Boeing 777 Freighter is not the revolutionary aircraft some analysts predicted Boeing would announce, the continued expansion of the triple-seven family speaks to the success of the Boeing's latest twin engine airplane. Air France will be the launch customer, ordering five 777F aircraft and placing options for three more. The French airline will use the aircraft to replace its aging 747-200 cargo fleet. According to the press release, "the 777 freighter, designed to carry 222,000 pounds of cargo up to 6,400 miles, is based on long-range 777-200LR passenger aircraft, [and] is scheduled to enter service early next year." Boeing stock jumped $.36 after the announcement.

Rumor Mill: Boeing 747 Advanced Launch Soon?

2005-05-23T17:42:00.000-04:00

According to several sources close to Boeing, the aerospace giant is set to unveil a new aircraft to the media at 9AM PST tomorrow (5/24). While the company is hush about what exactly the conference will entail, several sources are predicting either the launch of the 747 Advanced or an enlarged variant of the 737-900 (dubbed the 737-900X). Boeing is currently floating the 747 Advanced as an updated version of the 747, capable of carrying more passengers further due to technology currently being incorporated into the 787. If launched, the 747 Advanced would not compete with the Airbus A380; rather, it would fit in a niche between the current Boeing 747 and the Airbus A380. In contrast, the 737-900X would seat 15 more passengers than the largest variant of the current 737 family, while providing a range near that of its smaller cousin, the 737-800. Be sure to check Aeroposte tomorrow for complete details.

US Airways Agrees to Merge with America West

2005-05-21T09:25:00.000-04:00

(Photo: Aeroposte Editor)

In a huge gamble, America West agreed today to merge with US Airways. Phoenix based America West and Washington D.C located US Airways plan to merge to create a "buffer against the new era of low-cost rivals, high fuel costs and a flood of cheap fares." Doug Parker, America West Holdings' president and CEO was quoted as saying that "These two airlines are so much stronger together." Industry-wide skepticism remains, as the merger of two companies is likely to be complicated by many unforseen factors and the new airline will not likely bear a profit for many years. The two companies agreed to adopt the US Airways name, as it is more well-known than west-coast oriented America West. Combined, the two airlines owe more than $1 billion in loans to the Air Transportation Stablilization Board. Both companies cite the growing dominance of low-fare carriers as reasons to unite. In particular, they fear Jetblue and Southwest , which continue to gobble up the domestic market. After merger, The combined workforce will total nearly 45,000 employees; however, there will be cuts in management positions as US Airways eliminates its headquarters near Washington D.C. The two airlines plan to transform themselves into a low-fare alternative to legacy carriers, but both airlines will continue to keep first class seating. Little information has been released about the future of US Airways international flights.

United Machinists Move Forward in Negotiations

2005-05-18T22:11:00.000-04:00

The International Association of Machinists and Aerospace Workers, the union that represents United Airlines ramp-workers and customer-service agents, reported significant progress in talks with United management today.The two parties still remain divided over long-term job security and pension plans. Both parties seek to avert a strike, a disruption that most likely would put United out of business for good. A deal with IAMA would solidify United's goal of achieving $700 million in wage concessions from its employees. Over the past few weeks, United has concluded negotiations with its pilots, flight attendants, and mechanics unions.

United Nears Deal with Unions

2005-05-14T15:54:00.000-04:00

(Photo: Aeroposte Editor)

According to an associated press story (AP), United Airlines is close to completing a deal with its mechanics and baggage handling unions. United is seeking pay cuts valued at close to $176 million, a concession that management maintains is necessary to survive. The largest obstacle, valuation has been overcome; however, negotiators still have to work out a few of the finer details before the agreement is signed. Both parties are working to sign the contract by the end of next week, before the United bankruptcy judge releases a ruling giving United the ability to break tentative contracts. If Judge Wedoff decides to implement the new rules, experts predict that many of United's unions will strike. Nonetheless, United Chief Financial Officer Jake Brace hopes that the "good tone and nature of the talks [will] continue."

US Airlines Unilaterally Agree to Raise Fares

2005-05-13T21:13:00.000-04:00

All of the major US Airlines, except Jetblue and Southwest, agreed to boost round-trip ticket fares by at least $10. Fare increases will be capped at $20; however, the price increase is determined by the length of the flight. Bargain hunters need not worry: these fare hikes are unlikely to affect the cheapest fares, according to Bob Harrell of New York-based Harrell Associates. The carriers who adopted the price hikes will determine over the weekend whether they plan to institute these fares for an extended period of time. If one airline decides to lower its fares to try to undercut the competition, the fare hike will collapse as other carriers will be forced to follow suit.

United Posts $1.1 Billion Loss

2005-05-11T19:20:00.000-04:00

Even though United Airlines continues to cut employee benefits and passenger amentities, it still hasn't found the formula to turn a profit. According to its quarterly report, United Airlines lost $1.1 billion dollars in the first quarter, double the amount one year ago. Management blamed the loss on high fuel costs and expenses tied to the elimination of the pensions system. In total, United spent $768 million on reorganization and bankruptcy charges. Even though the airline continues to reduce the size and complexity of its fleet, operating costs rose by 1% over the previous year. Recently, a bankruptcy court judge gave lessors the ability to repossess any of United's planes without court mandate if the carrier defaulted on an aircraft payment. While it seems unfathomable that the second largest American carrier may not survive, United now must contend with angry lessors in addition to frustrated stock-holders in order to remain solvent

American Airlines Releases April Traffic Numbers

2005-05-03T20:08:00.000-04:00

The world's largest airline, American Airlines, reported a load factor of 77.4%, an increase of nearly 3%. International traffic grew 13.9%, while domestic traffic only climbed 0.3%. The growth in international traffic was the result of the expansion of American Airline's international service, a sector that has performed well for most legacy airlines. Legacy airlines are currently focusing on shoring up their international routes, as low-cost carriers are dominating the domestic market.

US Airways Posts Loss

2005-04-29T20:36:00.000-04:00

April 29- Today US Airways joined a burgeoning group of legacy airlines posting heavy first quarter losses. Echoing the industry-wide mantra, "high fuel-costs", US Airways blamed its $191 million loss on exceedingly expensive jet-fuel and weak revenue. Even though the airline cut "its personnel costs by 26 percent, or $164 million, from $641 million in the year-ago quarter to $477 million", the airline still sustained heavy losses. US Airways attributes its flagging revenue to intense competition with Southwest Airlines. Revenue is likely to continue to fall, as Southwest gears up to invade another one of US Airway's hubs, Pittsburgh. US Airways chief executive Bruce Lakefield was quoted as saying that "We find ourselves in the same situation as most of the industry, where fuel costs cannot be fully recovered through traffic growth and incremental fare increases." While high fuel costs may be indicative of the current plight of the industry, US Airways needs to reverse its fortunes as it readies to attempt a merger with America West Airlines.

Airbus A380 Editorial

2005-04-29T20:29:00.000-04:00

(Photo: French Frogs AirSlides)
Aeroposte plans to post an editorial within the next few days on the role that the Airbus A380 will play in the airline industry.

Air Canada Defects to Boeing

2005-04-25T19:48:00.000-04:00

(Photo: Aircanada.com)

In a momentum swinging turn of events, Air Canada announced today that Boeing would be the exclusive provider of aircraft for the renewal of its long-haul fleet. The agreement, which totals $6 billion dollars, includes a mixed order of eight Boeing 777's and fourteen 787's. Air Canada also has the option of purchasing up to 64 more 777's and 787's. This latest order is the most harsh blow to the Airbus A350 program, which has yet to garner an order from a major carrier. According to several sources, Air Canada entertained purchasing A350's; however, management decided that the 787 was a superior aircraft that could be delivered at an earlier date. These aircraft will largely be utilized on European and Asian markets, and likely will bring in an additional "$300 million of improved annual profitability by 2010."

Jetblue Impresses Wall Street Even Though Its Profit Drops

2005-04-21T18:24:00.000-04:00

All too often, companies try to please Wall Street by inflating their financial information. Ironically, Jetblue Air's profit dropped for the first quarter, but stock investors were jubilant that the airline was able to make a profit at all. While the rest of the industry collectively loses billions of dollars, Jetblue and a select few airlines have developed a formula that leads to consistent profitability. Shares of Jetblue stock rose $1.28 on the news that Jetblue earned $ 7 million in income for the first quarter. According to the press release, "last quarter, JetBlue expanded its total capacity by 22.5 percent, and planes were 85.8 percent full compared with 79.9 percent occupancy the year before. However, the amount JetBlue earned for each passenger mile, or yield, declined 2.7 percent to 8.07 cents." Jetblue executives cite fuel costs as the major factor that lead to lower profits. The Associated Press reported that "JetBlue spent $86.6 million on aircraft fuel last quarter, an increase of 76 percent from $49.2 million spent a year ago. The average fuel cost swelled 42.6 percent to $1.31 per gallon, JetBlue said." Wall Street is likely to be bullish on Jetblue stock for the forseable future. Jetblue is expanding at a voracious rate, all the while maintaining profitablity without significant fuel hedging. The airline will begin receiving delivery of 100 seat Embraer 190 jets, which will allow Jetblue to enter markets not viable with its Airbus A320 aircraft.

Southwest Attains Huge Profits

2005-04-16T13:14:00.000-04:00

Southwest Airlines, frequently cited as one of the most fiscally responsible companies ever, reported a profit of $76 million for the first three months of 2005. Southwest tripled its earnings when compared to precisely a year ago. The no-frills carrier even managed to exceed the expectations of a generally bullish Wall Street. According to a press release, the airline has "insulated itself from rising oil costs by hedging, taking options to buy most of its jet fuel in advance at lower prices." Due to its healthy financial position, Southwest was able to hedge its fuel at $26 a barrel, roughly half the price most carriers are forced to pay today. All in all, the fuel savings for the first quarter were $155 million, nearly twice the carrier's first quarter profit. Even so, Southwest warns that it will probably need to increase fares by $2 to $6 round trip to offset the rising cost of their hedged fuel, which will increase to $32 a barrel in 2006. In addition, the airline will continue to spend more on fuel, as its adds 29 Boeing 737 aircraft to its fleet.

Northwest Nears Completion of 787 Deal with Boeing

2005-04-12T21:24:00.000-04:00

Editor note: I wrote a fairly detailed article about the imminent Northwest Boeing 787 purchase. Blogger, the service that powers this website, crashed and lost the article. Due to imminent deadlines, I can't reproduce the article; however I will provide my sources so that my work was not completely in vain.

Marketwatch article: http://http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BD17D1D5C%2DF698%2D4E69%2DB2B9%2D029A1B5AC842%7D

Current and lively discussion of the Northwest 787 Purchase: http://www.airliners.net/discussions/general_aviation/read.main/2047951/

Independence Air Reports Highest Load Factor Ever

2005-04-05T21:52:00.000-04:00

Washington D.C based low-fare carrier Independence Air reported its highest ever monthly load factor today: 70.7%. Airlines determine load factor by dividing the number of seats sold by the total amount of seats available. According to the press release: "The airline generated 255.9 million revenue passenger miles (RPMs), while available seat miles (ASMs) were 361.9 million. Independence Air load factor for March was 70.7 percent -- the highest since the airline began service last year. For the month, 515,611 passengers were carried." Although the load factor is well below that of the industry standard, and even further below that of low-cost carriers Jetblue and Southwest, Chairman and Chief Executive Kerry Skeen was quoted as saying that "nine months since the launch of Independence Air, we have achieved our first monthly load factor above 70%, which is a testament to the overwhelmingly positive reaction we're receiving from our customers, as well as the dedication and enthusiasm of our employees." Although this latest announcement is a positive step for the airline, it is the result of a tremendous cut in capacity and staff at Independence Air. While the financial health may be improving, it remains to be seen if the airline will be able to continue to recover from the emotional toll that personnel furloughs are exacting on the morale of the staff at Flyi.

Airlines Try to Tack on $10 to Domestic Fares

2005-04-02T11:50:00.000-05:00

For the fourth time this month, the major legacy carriers are seeking to boost round trip tickets by ten dollars for domestic flights. Citing high jet fuel prices, the airlines believe that it is necessary to cover their additional costs with a surcharge. This tactic only succeeds if all the legacy airlines adopt this policy; if one airline chooses not to comply, the other airlines are forced to revert to drop the fare hike. According to the press release, "Delta Air Lines Inc. and UAL Corp.'s United Airlines led the way with increases of $10 per round trip Thursday night, and US Airways Group Inc., Northwest Airlines Corp., AMR Corp.'s American Airlines and America West Airlines matched the higher fares Friday." Low fare carriers Jetblue and Southwest did not match the latest price increase.

Judge Give U.S Airways More Time

2005-03-31T19:38:00.000-05:00

A bankruptcy judge today gave US Airways until May 31 to file a reorganization plan "without interference from its creditors." The judge also approved the $125 million investment in US Air by Republic Airways, a regional airline that operates US Airways Express flights. Until this last minute injunction, the deadline was set for March 31. US Airways now says it can be out of bankruptcy by August of 2005. The latest infusion of cash adds to the previous $125 million pledged by Air Wisconsin, another regional airline. Chris Chiames, US Airways senior vice president of corporate affairs was quoted as saying that "We're making good progress. Three months ago, people were ready to write our demise." Bankruptcy court has put the airline's demise, at least temporarily, on hold.

Continental Airlines Pilots Ratify Pay Cuts

2005-03-30T18:59:00.000-05:00

Continental Airline pilots ratified a new contract today, conceding $213 million in pay cuts. The step inches the airline toward its goal of achieving half a billion dollars in concessions. This deal was greatly influenced by Continental management's recent threat that if they do not achieve the desired concessions, the airline will be forced to "pursue alternate survival strategies, including taking significant steps to reduce both our future financial commitments and current cash outflows. We would be forced to obtain annual pay and benefit reductions totaling $800m later in 2005." The airline has threatened to cancel all pending aircraft orders, which it considers vital to its success, unless its employees continue to accept salary cuts. Even the purchase of the Boeing 787, currently in development, has been put in question. Nonetheless, these agreements are a positive step forward in the financial health of legacy airline Continental.

Rumor Confirmed: Air France Will Buy 777 Freighter

2005-03-29T20:16:00.000-05:00

Source

Chalk up another rumor that Aeroposte sniffed out before the media conglomerates caught on.

Independence Air To Fly to Charlotte with A319's

2005-03-29T20:05:00.000-05:00

With the recent announcement that Independence Air will begin flying to Charlotte, North Carolina, the low fare upstart is taking a page from Southwest Airline's book. Independence Air has served the Charlotte area since October, however the airline will now serve Charlotte with 132 seat Airbus A319 aircraft. As of June 1, 2005, Independence Air will increase the total seats available at Charlotte by 46%. According to Chairman and Chief Executive Officer Kerry Skeen: "We are grateful for the overwhelming response we've received from our new customers in the Charlotte area and we're very pleased to say that Charlotte has been one of our best markets. From the first day we began offering low-fare service back in October of last year, it's been readily apparent that people are ready for a new alternative in air service. This expansion will make it even easier for our customers to take advantage of low-fare flights to the nation's capital and all the cities we serve from our hub at Washington Dulles." Analysts expect more Airbus A319 frequencies as Independence Air continues to receive new aircraft.

Northwest To Begin Service Between Minneapolis and Lexington

2005-03-28T10:41:00.000-05:00

Northwest Airlines will begin flying from its hub in Minneapolis, Minnesota to Lexington, Kentucky as of June 9th. Initially, there will be only one daily flight between the two cities. Lexington already has daily flights from the other Northwest hubs, Detroit and Memphis. The once-daily flight will be operated by Northwest Airlink partner Pinnacle Airlines Corp. The outbound and return flights, will each take approximately 1 1/2 hours. Pinnacle Airlines plans to utilize the fifty seat Bombardier Canadair Regional 200 aircraft for this route. In response to the press release, U.S. Rep. Ben Chandler (D-Ky.) said that "Today's announcement of nonstop service to Minneapolis/St. Paul is an important benchmark in the continued growth and diversity of our economy." According to Lexington Aiport Executive Director Michael Gobb, "over 300 Central Kentucky companies and individuals submitted letters of support to Northwest Airlines detailing the need for access to Minneapolis and beyond."

S&P Downgrades Delta's Credit Rating

2005-03-26T12:53:00.000-05:00

The Standard & Poor Index lowered Delta's credit quality to a developing rating on Friday. Previously, Delta Airlines held a positive stock rating, which "indicates that the airline's debt ratings could be upgraded, while a 'developing' stance indicates greater uncertainty as to the future direction of the ratings." Delta Airlines also has the lowest possible credit rating of a company not in bankruptcy, Double C. According to S & P analyst Philip Baggaley: "the CreditWatch revision to developing reflects renewed pressure on Delta's liquidity from sharply higher fuel prices, which could add up to $1 billion in costs during 2005." This news, coupled with a recent press release from Delta claiming that the company is unlikely to have a positive cash flow until 2007, is largely responsible for the declining fortune of the Atlanta based company. Although Delta had $1.8 billion in unrestricted cash as of December 2004, the company owes over $2 billion in capital expenditures and regional jet commitments to be paid by the end of 2005.

Rumor: Air France May Buy New 777 Freighter

2005-03-25T20:17:00.000-05:00

As reported by La Tribune, a French financial daily, Air France plans to be the launch customer for the recently announced 777-200 F. The 777-200 will provide unprecedented range for a commercial aircraft and be able to transport slightly less cargo than the 747. Essentially, the 777-200 Freighter is the cousin of the 777-200 LR, which had its first flight less than a month ago. The 777 Freighter program is expected to supplement the lackluster sales of the 777-200 LR aircraft, which only has only been purchased by two airlines.

More Information on 777 Freighter

Delta Plans Atlanta to Moscow Non-stop Route

2005-03-23T15:27:00.000-05:00

Delta Airlines announced today that it will begin flying from Atlanta Hartsfield Airport to Moscow Sheremetyevo International Airport beginning June 1st. Delta will utilize Boeing 767-300ER aircraft, which carry 204 people, for this route. Jorge Fernandez of Delta said that "as Russia continues to become an important global destination, Delta's new service will greatly benefit customers traveling between Russia and the U.S. Southeast as well as key business centers in the U.S. Southwest and leisure destinations in Florida." Delta seeks to give Russians greater access to the United States via Delta's largest hub, Atlanta. It remains the only US carrier to operate non-stop to Russia, with daily flights June through September and four times weekly service during the other months.

Aeroposte Exceeds 1000 Visitors

2005-03-17T22:30:00.000-05:00

Well, Aeroposte finally moved beyond the one thousand visitor threshold. The editors would like to thank our small core of loyal readers who visit the site everyday. Our plan to make updates more frequent will be implemented towards the end of March. As always, we encourage our readers to make greater use of the comments section of our website. Ultimately, Aeroposte is more focused on creating a dynamic and lively community than surpassing visitor milestones. In conclusion, Aeroposte promises that it will continue to deliver the latest aviation news via the Aero-post-e.

Southwest Celebrates Twenty Years at Chicago-Midway Airport

2005-03-17T22:06:00.000-05:00

Southwest Airlines held a twenty year anniversary celebration at Chicago Midway today, complete with extravagant festivities and free gifts. According to CEO Gary Keller: "'Southwest made Chicago Midway a main focus for growth in 2004. This dramatic increase in flights shows our dedication to that growth, and our new gates will help accommodate our expanding schedule,' said Gary Kelly, Southwest's chief executive officer. 'The ability to add these 18 new flights over the next five months is a testament to our Employees' hard work and our Customers' loyalty and dedication to Southwest Airlines.'" Due to its deal with Air Trans Air, Southwest gained enough gates to greatly expand their Midway hub. To celebrate the new flights, Southwest plans to sell introductory fares at as low as $39 one-way. As of July 5, Southwest will operate 192 non-stop flights out of Chicago.

United Extends P.S Service to all New York- California flights

2005-03-15T16:04:00.000-05:00

Photo: Manas Barooah

United Airlines, despite its continued bad fortunes, has elected to expand its trans-continental P.S service. P.S Service is one of the few divisions, besides United Airlines international operations, that continues to perform well for the legacy carrier. In response to the better than expected results, United announced today that they would expand the P.S product so that it would be available on all New York to California flights. United attributes this decision to better than expected performance and glowing passenger reviews of the recently unveiled service. The P.S Service fleet is comprised of specially outfitted aircraft that "offer 12 lie-flat seats in United First® -- the only domestic lie-flat seats between New York and the West Coast, 26 wide leather seats in United Business® and United Economy Plus® seating for all 72 seats in the coach cabin."

Jetblue Receives High Customer Satisfaction Marks

2005-03-14T18:29:00.000-05:00

J.D Power & Associates ranked Jetblue Airways number one in terms of customer satisfaction for 2004. This marks the first time Jetblue has managed to outperform its fiercest competitor and reigning champ in this category, Southwest Airlines. The study done by J.D Power & Associates revealed that customers most appreciate the highly efficient self-check in kiosks that Jetblue employs at all its airports.

Skywest Considers Buying Comair

2005-03-08T17:09:00.000-05:00

Industry insiders claim that Skywest is considering purchasing Delta's wholly owned regional airline Comair. If a deal was reached, Skywest would also buy Atlantic Southeast Airlines, a small regional airline that flies for Delta. Delta management has reportedly responded favorably to the dialogue, however it has not yet issued a press release outlining its intentions. Aviation analysts say that Delta is trying to create liquidity and recoup some of the $2.9 billion airline it forked over to purchase these two carriers. If Delta decides to sell Comair and Atlantic Southeast to Skywest, St. George Utah based Skywest will put itself in a dominant position in the airline industry. Already, Skywest has three main hubs, operates 217 aircraft, and employs 8100 employees.

Week in Review

2005-03-05T11:59:00.000-05:00

Due to the lack of updates this past week, Aeroposte presents you with a synopsis of the most important recent events in the airline industry. American carriers released their February traffic reports this week. In general, most airline reported a growth in traffic, with Mesa Airlines reporting a 29.4% increase when compared to January. Independence Air reported it's highest load factor ever- 62.9%. Based on better than expected performance, United announced that it would expand its low-fare cousin, Ted, by 20%. Lastly, in the most significant news of the week, Continental and its three major unions agreed on pay cuts and other cost saving measures. This paves the way for a Continental fleet expansion- more Boeing 737's and 757's. Continental shareholders will vote at the end of March on whether to firm their orders for the Boeing 787 Dreamliner currently in development.

Continental Barter with Unions Pays Off

2005-02-28T17:09:00.000-05:00

Continental Airlines reached a tentative agreement with its union groups today to dramatically cut costs. Continental, one of the leanest and most efficient legacy carriers, still needed to cut its costs further to put itself in a good position once the industry rebounds. Continental management struck deals with the pilot's, flight attendant's, and mechanic's unions. The changes will be ratified at the end of March, and soon after the wage and benefit reductions will go into effect. This labor agreement makes it possible for Continental to purchase new Boeing 737-800, 757-300, and 787 aircraft in the immediate future. The deadline on a board decision for the purchase of these new aircraft has been extended one month from February 28th. Chief Executive Officer Larry Kellner was quoted as saying "I know a reduction in pay and benefits is painful. However, these agreements, along with the reductions from the rest of our work groups, will put in place the tools we need to be successful and grow our company, securing the careers and retirement of all Continental employees. We will all continue to work together to deliver a strong future for Continental and its people."

Flyi Reports Huge 2004 Loss

2005-02-26T09:37:00.000-05:00

Independence Air, a former United Express feeder that converted itself to a low-fare airline, released its year end financial statements on Friday, the 25th of February. The airline lost $192.2 million in 2004, compared with a $82.8 million profit operating a UEX feeder in 2003. The huge losses were blamed on high fuel costs, the early retirement of turboprop aircraft, legal charges stemming from the need to protect themselves from a hostile takeover, and a plethora of other unforseen expenses. On this news, a powerful investor urged Independence Air management to put the airline up for sale.

Rumor: Ryanair Cuts Sweet Deal with Boeing

2005-02-25T09:23:00.000-05:00

On February 24th, Ryanair announced that it would order seventy more 737-800 aircraft from Boeing. The deal was valued at roughly $4 billion, but the price is well below the list price for the type of Boeing 737 Ryanair purchased. It's no secret that airlines use hardball negotiating tactics to get a good deal from the airplane manufacturers. The individual price paid per aircraft by Ryanair is not far below the list price- but industry insiders believe that Boeing agreed to fit winglets to the new 737's, normally an additional expensive option. If this rumor holds up- then Ryanair negotiators arbitrated a terrific deal. The winglets add several hundred miles to the 737's range, this in turn gives Ryanair an advantage over other competitors because it airplanes can fly further and more efficiently. With the addition of this order, Ryanair now has on order 255 737's, to be delivered through 2012.

Jetblue to Fly to Burbank

2005-02-24T07:46:00.000-05:00

Keeping with its slow, but focused nation-wide expansion, Jetblue Airways announced that they will start flying to Burbank, California, as of May 24. Initially, the only Jetblue flights to Burbank will originate from Jetblue's east coast hub, John F. Kennedy International. In the beginning Jetblue will offer three daily round trips, but the airline expects to increase that number to four by July 15. Introductory fares will start at $99 one way; however, the average one-way fares will be between $124 and $299. Burbank is the seventh destination Jetblue serves in California.

Independence Air Stock Soars on News of Refinancing Deal

2005-02-22T20:20:00.000-05:00

Independence Air, struggling to avoid liquidity, reached an agreement with the majority of its creditors to delay payments and vastly reduce its regional jet fleet size. Independence Air plans to return 24 of its Bombardier Canadair Regional 200 Jets by July. After July, the low-fare airline's fleet will be 1/3 smaller than it was when Independence Air ceased operating as a United Express operator. In addition, the Flyi was able to cancel the leases on 21 of the turboprops it used while flying for United Express, thus saving the airline an additional $13.5 million. The stock market responded favorably to the news, and Independence Air's stock climbed 14% on the day.

Continental Teams up with Air France

2005-02-21T14:36:00.000-05:00

Continental Airlines today announced that they would begin codesharing with France's national airline, Air France. Continental seeks to make Air France's extensive European and Middle-eastern route network available to its customers by initiating this codeshare. Passengers will be able to utilize Air France's network via Charles De Gaulle Airport in Paris, France. According to the release, miles can be accrued on Air France flights and then transferred to the Continental Onepass mileage program. This latest announcement is an extension of the Skyteam alliance, a codeshare network of seven airlines headlined by Continental and Delta Airlines.

Airtran Encroaches Upon US Air's Charlotte Hub

2005-02-20T13:09:00.000-05:00

Airtran, in a move strikingly similar to Southwest's invasion of USAir's Pittsburgh hub, has released a press release stating that "it is prepared for a tough battle on US Airways' home turf when it begins flying out of Charlotte-Douglas International Airport on May 4." AirTran President and Chief Operating Officer Robert L. Fornaro commented that "[Airtran] expect(s) US Airways to compete vigorously, (but) [Airtan] thinks [it]can compete with anybody." Atlanta based Airtran plans to drastically undercut other carriers exorbitantly high fares on the Atlanta to Charlotte route, when it begins offering four roundtrips between the two cities starting May 4. US Airways has not yet officially commented, although they are expected to match Airtran's fares, just as they matched Southwest's fares at their other hub, Pittsburgh.

Frontier Receives Two More A319's

2005-02-20T10:59:00.000-05:00

(Photo: Gerd Beilfuss)

Frontier Airlines, a low-fare carrier based at Denver, Colorado's super efficient airport, received on February 18th its 35th and 36th Airbus A319. The airline flies a mixed fleet of Boeing and Airbus narrow-body aircraft; however it is removing its old Boeing 737 aircraft in favor of an all Airbus fleet. Unlike Jetblue Airways, which operates Airbus A320's, Frontier flies the small cousins of the A320, the small A318 and the slightly larger A319. Frontier, best known for its aircraft's colorful tails adorned with animals, also unveiled the new tail livery, 'Mariner'. Mariner is a Crowned Conure, a species of parrot with extremely colorful feathers. Frontier Airlines will lease these 132 seat Airbus A319's from General Electric Capital Aviation Services (GECAS).

Aeroposte Poll

2005-02-13T09:51:00.000-05:00

In its effort to create a close-knit community of readers, Aeroposte requests that its readers posts any feedback they have about our website (design, tone of articles, etc.) under the comments section of this post. In honor of surpassing the 500 visit mark, Aeroposte is proud to unveil our new slogan: "Aviation news without the jargon." As always, Aeroposte will continue to deliver the latest aviation news and factoids to our loyal readers in our unique flavor, of course via the Aero-Poste.

Alaska Airlines Announces Service Between Dallas and Anchorage

2005-02-12T09:49:00.000-05:00

Beginning June 19, Alaska Airlines will offer twice-daily service between Anchorage, Alaska, and Dallas, Texas. The flight will stop in Seattle, Washington, to refuel and pickup additional passengers. Alaska Airlines will utilize its largest aircraft, the Boeing 737, for this route. Fares will be initially priced at $244 round trip, however, tickets must be purchased by February 28. According to Alaska's executive vice president of marketing and planning: "The addition of Dallas is a continuation of Alaska's strategy to selectively expand our network from Seattle and was facilitated by another carriers recent suspension of service between Seattle and Dallas/Fort Worth." The total flight time from Dallas Fort-Worth to Anchorage will be roughly five and a quarter hours.

Jetblue Celebrates 5th Birthday

2005-02-10T17:29:00.000-05:00

Five years ago, a tiny airline began flying from John F. Kennedy International to a few upstate New York cities with Airbus A320's. Lead by a young, crafty CEO, Jetblue Airways now operates 69 A320's and flies to over 30 destinations. Jetblue has been a thorn in the bloated legacy carriers side; an airline that believes in smart marketing and creating a fun, dynamic work environment. Even before its fifth birthday, Jetblue became a major airline faster than any other carrier in the world. While Jetblue's stock has faltered lately, certainly it's not the stock investor's sweetheart it used to be, the airline is one of the few that can consisently post a profit. Jetblue is not the modern People Express; rather, it's an airline that has made flying fun and trendy for the masses.

Skywest Experiences Boosted Revenue in 4th Quarter

2005-02-09T16:58:00.000-05:00

(Photo: Christopher Liao)

Skywest Airlines, which operates a regional feeder airline for Continental, Delta, and United Airlines, released a press release today that announced increased earnings in the 4th quarter of 2004. Despite high fuel prices, the airline managed to earn $4 million than in the same quarter of 2003. Skywest, which operates small Embraer 120 turboprops and Bombardier Regional Jet aircraft, attributes its increased earnings to increased capacity and lower overall costs. On the year, Skywest increased its revenue by over $100 million and its capacity by 37.6%. Even though its main line cousins, United, Continental, and Delta cannot post a profit, Skywest seems to be one of the few carriers tied to these flagging carriers that can persevere the harsh economic climate. Skywest seems to be disproving upstart Independence Air's theory that a regional operation tied to a bankrupt legacy airline could not survive in this industry.

Comair Mechanics Set to Take a Step in the Right Direction

2005-02-08T18:59:00.000-05:00

(Photo: Michael F. McLaughlin)

Next week, Comair, still recovering from a horrific holiday database mishap, will allow its mechanics to vote on pay increases. If the measure passes, union mechanics will earn two percent more than their current contract stipulates. The mechanics will vote on this wage increase next week, even as Comair asks pilots and flight attendants to take pay cuts. This step is the first part of Comair management's general plan to make the airline more competitive.

Independence Air Continues Westward Expansion

2005-02-07T17:36:00.000-05:00

Even though Independence Air filled less than half of the seats on their aircraft in January, today they announced that they will continue to embark on their major westward expansion. This announcement comes a few weeks after the airline began advertising nonstop service to Las Vegas from Dulles Airport in Washington D.C. In addition to Las Vegas, upstart Independence Air will fly to Seattle, San Diego, San Jose, Los Angeles, and San Francisco with their brand new Airbus A319 aircraft. The airline will begin flying to San Diego on April 14, and the other four cities on May 1st. Initially, there will be one round trip per day between Washington Dulles and each west coast city.

Southwest and Air Trans Air Announce Codeshare

2005-02-04T16:59:00.000-05:00

Southwest Airlines, the model of fiscal responsibility and efficiency for the airline industry, has thrown caution to the wind and announced a codeshare with Air Trans Air (ATA) for over 200 destinations. This announcement comes a few months after Southwest agreed to purchase some of ATA's assets, specifically the much coveted Chicago Midway Airport gates. The codeshare "will allow passengers to fly to over 200 new city pairs", and will enable "customers... significantly more access to both carriers' networks with the ease of a single ticket and a smooth and efficient transfer to a connecting flight." In addition, the airlines will allow mileage points to be accrued on codeshare flights, however the points can only be used in the frequent flier program the passenger has an active account with.

Alaska Airlines Spreads its Wings with New 737

2005-02-03T17:45:00.000-05:00

Boeing recently delivered the first of a series of revolutionary 737-800 aircraft to Alaska Airlines. Although the Boeing 737-800 aircraft has been in production for over half a decade, this particular 737-800 has winglets, which will allow the 737 to fly longer distances than initially envisioned. The winglets will also reduce takeoff and landing noise, in addition to cutting overall fuel consumption. Alaska Airlines plans to use these aircraft on their transcontinental flights from the west to the east coast. Although Alaska Airlines has not commented yet, a few industry insiders claim that the new 737-800 with winglets will replace the slightly larger 737-900 on long distance flights, as the larger variant could not always make the coast to coast trip without taking unplanned fuel stops. Alaska Airlines plans to save 110,000 gallons of fuel per aircraft every year with the addition of the new winglets. Alaska will receive two more Boeing 737's with winglets by the end of 2005.

Rumor: Huge Republic Airways Embraer Order on the Horizon

2005-02-02T18:16:00.000-05:00

(Photo: Eduardo Franca)

Republic Airways today offered six million shares to the general public. The company claims it will use this money for "general corporate purposes -- including working capital, acquisitions of aircraft and parts, and potential strategic acquisitions and investments." Several sources claim that the capital raise in the stock sale will be used to purchase a large number of Embraer aircraft, most likely the E170 or E190 aircraft. Republic Airways is a division of Chautauqua Airlines Inc, and currently flies Embraer's seventy seat E170 aircraft. A number of airlines have signed contracts with Embraer over the past past few months, and the popularity of the new family of jets has surged following better than expected fuel mileage for the E170/190 family. In a period of high gas prices, airlines are parking their older aircraft in favor of the Embraer 170 and 190 jets, which fly fewer people (this allows airlines to pay their pilots less) greater distances on less gas than their older predecessors.

Jetblue Slashes Fares to the Caribbean

2005-02-01T17:37:00.000-05:00

(Photo: Michael Carter)

Jetblue Airways, one of the few profitable airlines in the fourth quarter, announced that they will begin to fly to new Caribbean destinations from their hub at John F. Kennedy International in New York City. Jetblue will add more frequencies to San Juan, Aguadilla, and Nassau. The introductory fares will start at $75 one-way, although fares are likely to climb as the Caribbean routes become more popular in the vacation season. Fares will be capped at $299 dollars one way, but the average price of a ticket will hover between $139- $299.