AirTran's CEO says airline can remain profitable

photo by James Willamor

Robert Fornaro, AirTran's CEO, was recently interviewed by the Associated Press. He mentioned how the airline had faced a troubling time last year when oil prices shot up. But in the first quarter of 2009, despite a weak economy and lowered travel demand, AirTran managed to post a profit. I'll post a clip from the interview at the end of this post, and more can be read in the original article, but here are some interesting points:

• He doesn't see further consolidation, at least for a while: " Clearly we've seen Northwest and Delta come together, but I'm not sure we're going to see another merger over the next two or three years. The financial condition of the carriers now is weak, and there's probably some real big issues that need to be resolved with the labor contracts."
• Even though AirTran attempted a hostile takeover of Midwest Airlines a few years ago, Fornaro (who has been in the top job for a year) is moving away from acquisitions: "We now feel that we can be much more successful going in on our own. Over the next two years, thinking about acquisitions will be very very low on our priority list."
• How did AirTran responded to the economic crisis? "We stepped back, we reassessed our operation, we adjusted our capacity and obviously managed our costs and have very quickly rebounded."
  

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Canadian airlines create passenger bill of rights

photo by caribb

Canadian carriers Air Canada, Air Canada Jazz, Air Transat, and WestJet have come up with new legally binding operating rules, or "airline tariffs," that give passengers more options if their flight is delayed or canceled. As part of the new set of rules, the four airlines must:

• Distribute meal vouchers for delays of four hours or longer
• Let passengers off the aircraft if the plane is delayed on the ground for more than 90 minutes
• Pay for hotel rooms for passengers affected by overnight delays or cancelations

Not bad - if I was a delayed or stranded passenger, I'd say that those rules are a pretty good improvement. But the four airlines, which have formed a lobby group known as the National Airlines Council of Canada, aren't exactly doing this unprovoked, however. A Canadian MP proposed a bill that would fine airlines $1200 per traveler who was bumped off of a flight longer than 3500km (about 2175 miles). Airlines would also have to start giving $500 an hour to passengers stuck on a plane on the ground for more than 60 minutes after the doors close.

Naturally, the airlines are keen to avoid having to pay such exorbitant fines, and are thus rolling out their own "bill of rights" in advance. And it's doubtful whether the proposed bill would actually pass; as the lobby group's president stated: "The compensation requirements are grossly punitive and do not recognize the cost/revenue environment that air carriers face today. In the current economic downturn, airlines are already struggling to provide service to their customers." The fines outlined in the proposed bill do seem rather "grossly punitive"; but at the same time, passengers who are stuck for hours on a plane on the tarmac should be compensated fairly. The National Airlines Council of Canada is proof that even if it takes the threat of a harsh bill to do it, airlines still have the capability to ensure that their customers are compensated in a fair manner.

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Ryanair considers "fat tax"

photo by wicho

European budget airline Ryanair has apparently been mulling over the possibility of a "fat tax" following the results of an online poll in which the airline asked passengers to come up with a winning "cost reduction" idea. Ryanair has been known in the past to use things like this as free publicity. For those who are interested, the results are as follows:

1. 29% - Excess fees for very overweight passengers
2. 25% - €1 for toilet paper – with O’Leary’s face on it
3. 24% - €3 to smoke in a converted toilet cubicle
4. 14% - Annual subscription to access Ryanair.com
5. 8% - €2 “corkage” fee for passengers who bring their own food onboard

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Another way to spoil your pet: Pet Airways

Even though you'd think that now would be a lousy time to start an airline, it's no secret that pet owners are spending more and more on their pets these days. So a couple of pet-loving entrepreneurs have come up with "Pet Airways", "a pet-only airline dedicated to pet-friendly travel" where "your pet will be safe and comfortable flying in the main cabin - not in cargo!" According to their website, you drop your pet off at the airport and they board the plane, where they're looked after by "Pet Attendants" who check up on all the pets every 15 minutes. Then you pick up your pampered dog or cat at the destination airport, "knowing he or she has traveled comfortably and safely in the main cabin of our plane."

Pet Airways will initially be serving New York, Washington, Chicago, Denver, and Los Angeles (although none of the big airports at these cities are used; they'll be using smaller, "executive" airports around the cities instead). But those pet owners who have visions of dogs sitting on seats in a Boeing 737 will be disappointed; pets will be flown on the distinctly less-glamorous looking Beech 1900 with the seats stripped out and replaced by "private pet carriers". The flights will be operated by Suburban Air Freight (Pet Airways certainly does sound better, doesn't it?).

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American takes delivery of new 737s

photo by caribb

American Airlines has taken delivery of its first new planes since 2006 - seventy-six additional Boeing 737-800s. AA plans to use them to phase out out about a quarter of their MD-80 fleet, which are older, less efficient, and more prone to maintenance issues than the 737s. The new 737s will also carry more passengers (160) than the airline's previous 737s (sometimes as low as 134); this will be accomplished by a thinner divider between first class and coach and using thinner seats, which AA claims are more comfortable than the old ones. The galleys in coach class are also gone, since meals aren't served anymore in coach.

American is also going to base some of the new 737s out of its Chicago hub. Previously, it had kept almost all of its 737-800s flying out of its Dallas and Miami hubs, and kept the MD-80s at Chicago. But when the MD-80 faced serious mechanical issues last year, the airline was forced to scrub hundreds of flights at O'Hare. The introduction of 737s there should lower their reliance on a single aircraft type for the bulk of their domestic flying.

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Continental gets approval to join Star Alliance

photo by bribriTO

Continental Airlines yesterday received a tentative OK to join Star Alliance, although the US Department of Transportation will require Continental, United, Air Canada and Lufthansa to release an 'annual report' on the alliance. Star Alliance is already by far the largest airline alliance, and the addition of Continental just makes it even bigger. As such, the US government has expressed concern about the impact on competition - and so has Delta, Continental's current partner in the SkyTeam alliance, which has complained that the impact on US domestic routes would be too large, given that United and US Airways are already members.

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Southwest's rapping flight attendant

A few recent news stories have highlighted David Holmes, the Southwest Airlines flight attendant who makes the pre-flight safety announcement a bit more entertaining by rapping it.

"You will not get that on United Airlines, I guarantee."

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