easyJet's in-flight weddings won't be taking off

photo courtesy easyJet

Those of you looking forward to getting married mid-air will have to wait; easyJet's request earlier this month to have its pilots be authorized to wed couples in flight was turned down. The Luton, UK-based low-cost airline, one of Europe's largest, claimed that it received many requests from couples seeking to tie the knot on board, and was aiming to be the first airline to offer in-flight weddings. But the Luton Borough Council axed the proposal, saying that "current law does not permit a civil marriage or civil partnership taking place on board an aircraft... But we would be happy to consider licensing easyJet's ground facilities at London Luton Airport.”

easyJet's Andrew McConnell was less than pleased with the outcome. "We are of course very disappointed by this news. It would appear that faceless bureaucrats in windowless offices have scuppered the dreams of many who wished to get married in the air."

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Virgin Atlantic posts profit, but can it last?

photo courtesy Virgin Atlantic

Only a few days after arch rival British Airways posted a record loss, Virgin Atlantic Airlines announced some surprising news this week: it made a profit for the 2009 fiscal year. Even more surprisingly, pre-tax profits doubled from £34.8 million to £68.4 million ($109.3 million). And to rub it in even more to British Airways, Virgin claims that the increase in profits came from an increase in premium passengers, a demographic that BA is particularly reliant upon. Because price-cutting, Virgin was able to keep load factors in its first and business class seats solid. "We are winning market share from our competitors during the toughest trading environment ever," said CEO Steve Ridgway. "Our load factors remain resilient as travelers take advantage of these bargain fares, proving the value of vigorous competition."

But Virgin's reported recent financial success isn't as simple as just an increase in passengers. Virgin Atlantic locked in its fuel prices two years ago, meaning that the airline didn't have to deal with the steep rise in prices that occurred last year. And Virgin Atlantic, unlike most of its competitors, isn't publicly listed, meaning that it doesn't have to disclose detailed financial information. The Times' Ian King notes that Virgin released the numbers two months earlier than they did last year, which "raises the suspicion that their release has been timed not only to embarrass the old enemy but also to emphasize the airline’s strength to the trade at a time when the battle for corporate clients is more ferocious than ever."

While Virgin might be in a comparatively good spot right now, especially when viewed in light of British Airways' abysmal financial performance, they might not be able to keep it up for much longer. The transatlantic price war that Virgin is taking part in has started to take a toll on profits, and the state of the industry as a whole isn't solid (as Virgin's CEO has admitted). Check back in a couple of months - I'm sure that we'll see a much more subdued financial announcement from Virgin Atlantic then.

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Long-haul a loser for SAS

photo courtesy SAS

Intercontinental (or 'long-haul') routes account for 12.7% of sales at Scandinavian Airlines, but account for almost a whopping 50% of their losses, according to a boarding.no article. The recent economic downturn, which has seen a slump in business travelers, has only made a bad situation worse for SAS. "Half of our most recent quarterly deficit of one billion Swedish kronor [comes] from our inter-continental business," said CEO Mats Jansson in a takeoff.dk article.

This is really serious - if the long-haul routes only account for less than 13% of sales but half of the losses, then something needs to be done. A couple of factors are at work here. One is that the planes that they're flying - the A330 and A340 - aren't flying full. SAS might consider upgrading its inflight service product (it really isn't anything special). Right now SAS offers a "low-cost" service for high prices; it should try to do the opposite. In other words, "we need to look at costs," as CEO Jansson said. That's difficult when Denmark, Norway and Sweden have some of the highest average wage rates in the world. Not to mention, SAS has a fleet that could be euphemistically labeled "diverse"; it needs to simplify. After all, how much sense does it make to fly the A321 next to the 737-800? (It should be pointed out that the MD-80 fleet will be gone by 2010.)

Another problem that Scandinavian faces is that there really isn't much originating and departing traffic at its main international hub in Copenhagen, which is similar to other European cities such as Madrid, Dublin, and Lisbon in that they're large enough to support non-stop service to a few international destinations, but not large enough to become a big international hub. London and Paris, on the other hand, have sufficient O&D traffic to ensure that they're successful international hubs. That said, SAS has the potential to transform Copenhagen into a relatively successful international hub. It might not be able to be anything on the scale of Lufthansa's Frankfurt or even KLM's Amsterdam, but it could promote Copenhagen as a less-congested way to connect from, say, North America to Asia. But a handful more of destinations from Copenhagen might be a good idea (right now Chicago, New York, Washington, Tokyo, Beijing, and Bangkok are the only long-haul routes flown from Copenhagen; Seattle is currently flown as well but will be dropped later this year).

And SAS should also consider flying a handful of international routes from Oslo, which it has neglected in terms of long-haul flights, and increase service from Stockholm (at present, only Chicago and Newark are served). They should probably be able to get enough traffic for some of these to justify point-to-point service.

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After Skybus, there's JetAmerica

photo courtesy JetAmerica

No, this isn't the original JetAmerica Airlines, which operated a bunch of MD-80s out of Long Beach in the 1980s until it was bought by Alaska Airlines. This is a brand-new start up public charter carrier flying one wet-leased Boeing 737-800 from Miami Air International between cities like Lansing, Michigan and South Bend, Indiana from its base in Toledo, Ohio.

Sound familiar? Well, Toledo is just halfway across the state from Columbus, the home of the infamous Skybus, which went bust less than a year after it started flying. And Skybus' famous limited $10 fares are awfully similar to JetAmerica's $9 fares, although only a certain number of seats (9 to 19) on a flight will be at that price.

So, will JetAmerica (sometimes spelled Jet America) survive? The concept of the ultra-low-fare carrier (where pretty much everything carries its own fee) hasn't really taken off in the US. Sure, carriers like Spirit and Allegiant have managed to make the model work, but these airlines fly mostly vacation travelers to and from Florida and Las Vegas. JetAmerica might suffer because Toledo certainly doesn't have a lot of originating and departing traffic - something that helped contribute to Skybus' demise.

Yet JetAmerica is also being heavily subsidized by some of the airports that it flies to; Melbourne, Florida, Toledo, Lansing and South Bend airports are all giving JetAmerica $1.4 million in grants for a year, not to mention $1.1 million in marketing help and $867,000 in waived fees. These subsidies can help the airline weather any spikes in oil prices, but at the moment, oil prices are relatively low (sky-high oil prices helped to take down Skybus). And CEO John Weikle claims that JetAmerica's goal is to make money along the same lines as Allegiant, by "stay[ing] away from the competition."

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S7 Airlines to join oneworld alliance

photo courtesy S7

Russian carrier S7 (formerly known as Siberian Airlines) has announced today that it will officially join the oneworld alliance next year. British Airways has 'sponsored' the airline, which is Russia's largest domestic airline and a large player on international routes, too. S7 recently switched to an all-Western built fleet (no more smoky Russian jets) and is quickly expanding. Willie Walsh, CEO of British Airways, released a boilerplate statement with the usual "S7 is a perfect fit for oneworld," etc., etc., but also said that "oneworld's priority is the quality rather than quantity of member airlines." That's probably a subtle dig at oneworld rival Star Alliance, which is at least twice as large in terms of number of airlines. But perhaps when it comes to Russia, Walsh needn't be worried. The S7 announcement leaves Star as the only alliance without a significant presence in Russia (Aeroflot is a member of SkyTeam).

And speaking of Star, Greek carrier Aegean Airlines will become a full member of the alliance next year.

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Delta CEO: Goal of no layoffs

photo by sainz

Here's an interesting paragraph from an article in yesterday's Atlanta Business Chronicle:

Anderson credited employee for hard work despite an adverse economy, and said the carrier retains the goal of having no frontline layoffs. Delta and Northwest have offered buyout and early retirement packages to thousands over the past year, and officials have said 2,500 employees will leave the combined carrier after the busy summer travel season. “We just have to do our very best and work very hard,” Anderson said.

That's right! No 'frontline' layoffs at Delta, according to the CEO - except that that doesn't include Delta's wholly-owned regional subsidiary Comair, which has cut jobs through 'attrition' this past February. So, no layoffs? Well, maybe if you work for Delta mainline, but if you don't...

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British Airways posts record loss

photo by lrargerich

British Airways today posted the largest loss since it was privatized in 1987, and CEO Willie Walsh warned that he sees "no signs of recovery anywhere." "I'm 30 years in this business and I've never seen anything like this. This is by far the biggest crisis the industry has ever faced," he told CNN. The airline halted its dividend and Walsh announced that he would work without pay in July: "This is no stunt. I want to make a contribution in recognition of the extremely challenging position we face."

BA's posted a net loss of £375 million ($594.6 million) for the 12 months that ended on March 31, only a year after posting a record £712 million profit a year before. Its operating loss of £220 million was compared to year-ago results of £878 million in profit. BA's full year fuel costs are near £3 billion - something that Walsh pinned the loss on, along with "reduced passenger and cargo demand."

While the news of the huge loss is certainly surprising, especially in light of the fact that the airline posted record profits only last year, it wasn't altogether unexpected. BA has long been dominant in flying 'premium' passengers; some have argued that it was the airline that really made business class popular. The number of premium passengers that it flew dropped 13%, and while this number isn't far from the industry average, BA has more exposure to the premium market than other airlines; as such, it is adversely affected by the double-digit drop even more.

This has meant that, over the past year, the airline has had to put volume over yields. In other words, instead of focusing on 'profit per seat' figures that are boosted by premium-paying passengers ('yield'), it's focusing on filling seats, even if those passengers filling seats are paying less. "We're now saying it's getting that balance between yield and volume so it's more a focus on volume than it has been," said Walsh, who believes that going after increased market share "is sustainable in the long term and will be profitable."

BA also announced that it is still ordering the Boeing 777-300ER for delivery between 2010-12, the same time that its remaining Boeing 757-200s will leave the fleet and be replaced by aircraft in the Airbus A320 family. But BA will slash capacity by 4% next winter to reflect the lowered demand for travel as it parks 16 aircraft.

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