Monthly Archives: August 2006

Oh No — Tell Me It Isn’t So


First terrorist plots.

Then the TSA and no liquids or gels. (Don’t forget the gel in those gel-filled bras either.)

Now it’s clear the days of flying in peace and quiet are coming closer and closer to certain death.

Today Tom Espiner in CNET writes,

Ryanair plans to allow passengers mobile access to voice and text communications on all of its flights. The airline expects to launch the service in mid-2007.

The budget airline announced on Wednesday that it will partner with OnAir, an Airbus and Sita joint in-flight communications venture, which plans to fit the entire Ryanair fleet with technology called Mobile OnAir. Initially, 50 aircraft will be equipped by mid-2007, with further installations following.”

You can read the article here.

Meanwhile I’m sure this news is great for those companies like Bose and Sony, who make noise-canceling headphones. I would think demand for these will soar once major airlines start “offering” cellphone jabber and screaming all flight long.

As I’ve said in the past — text communications and the ability to web surf while flying would be cool. (Although I guess the airlines who ponied up big bucks to equip their aircraft with Boeing Connextion hardware are probably not too happy they chose to go that route now.)

Voice communications — ugh. It’s bad enough having to listen to obnoxious cell phone users at the gate — at least now we know that at some point they have to shut up.

Bad News for Delta


This is certainly not a good way to wake up on a Sunday morning when I’m supposed to be on vacation.

Or any morning for that matter.

I thought tracking Hurricane Ernesto yesterday was bad news enough. But while news about his future exploits seem to be more favorable to those of us in the New Orleans area this morning, unfortunately there was bad news of another kind.

This morning Comair flight 5191, which was on its way from Lexington, Ky., to Atlanta crashed shortly after take-off. The flight had 47 passengers and three crew members. One report says there is one survivor. Other reports say all aboard were killed in what was described as a “fiery” crash.

The aircraft was apparently a Bombardier CRJ-100.

As the Associated Press reminded us this morning,

“The crash marks the end of what has been called the “safest period in aviation history”. There has not been a major crash since November 12, 2001, when American Airlines Flight 587 plunged into a residential neighborhood in the Queens borough of New York City, killing 265 people, including five on the ground.

On January 8, 2003, an Air Midwest commuter plane operated by Mesa Air Group crashed on takeoff at Charlotte/Douglas International Airport, killing all 21 aboard.

Last December, a seaplane operated by Chalk’s Ocean Airways crashed off Miami Beach, Florida, when its right wing separated from the fuselage shortly after takeoff, killing the 18 passengers and two crew members. That plane, a Grumman G-73 Turbo Mallard, was built in 1947 and modified significantly in 1979.”

Delta’s Good News


I know, I know. I’ve been picking on the folks at Delta lately for their oh-so-stylish gushing press release.

Yes, well they need to be picked on for that.

But on the financial side, I realized that I had not talked about the airline’s recent earnings numbers here — numbers which we at PBB just analyzed as part of our PlaneBusiness Airline Industry Relative Performance Analysis for the second quarter.

Because Delta reported earnings so late in the quarter, and because they are in bankruptcy, the number that caught most people’s attention when the numbers were finally announced was the huge loss the airline reported for the quarter. The airline posted a loss of $2.2 billion. But net income before special items and reorganization was $175 million. More impressively, operating income was $369 million, up from a loss of $129 million for the same quarter last year. Operating revenue was up 9.6% while operating expenses were down 2.1%.

Nice combination.

Okay, let’s look at the operational numbers — which we took a harder look at in our quarterly analysis.

The airline saw yield up 15%, passenger revenue per ASM was up 17%, and cost per ASM was up 5%. Cost per ASM excluding special items and fuel was up 5.5%.

Bottomlne, Delta has now climbed out of the muck and mire of the basement. In fact, looking at the airline’s revenue performance quarter over quarter, we see an airline that took top honors of the group of airlines we track in our quarterly analysis. Besides Delta, that group includes JetBlue, Southwest, US Airways, Continental, Alaska, United, America West (AWA and LCC are still compared as separate entities), Northwest and American.

The airline that posted the lowest quarter over quarter increase in revenue? American Airlines.

But the news only gets better for Delta, as it not only posted the largest increase in revenues quarter over quarter, it also produced the lowest increase in expenses. (Continental posted the largest increase of the group.)

Not surprisingly Delta also posted, by a very wide margin, the largest increase in profit margin for the entire group.

This is good stuff.

We were also glad to see the airline put their regional flying up for bids this week. It sounds like Delta is going to mix up its current regional mix a bit — and that is also good thing. We had been critical of the airline previously because they had not yet renegotiated these contracts — so we see progress being made here as well.

Although I’m sure if you are an employee of one of the airline’s regional partners, this is necessarily good news.

Unless you work for SkyWest or ASA.

All that flying was reaffirmed shortly after Delta entered the dank and dark halls of bankruptcy court.

PBB is Now Posted; We’re On Vacation

Home-Typewriter Copy-1-4

Yea! It’s vacation time. Not only that but there’s no hurricane in the vicinity. Well, at least not yet.

This week’s issue of PlaneBusiness Banter, which includes our 25 page quarterly supplement, the PlaneBusiness Airline Industry Relative Performance Analysis (try to say that in one breath) is now posted.

A reminder for PBB subscribers. We are now officially on our two-week annual summer hiatus. We’ll see all of you again on Sept. 14.

As for PlaneBuzz, they’ll be some lurking around in here during our supposed “time-off.” We’ll also be moving some of the furniture around — changing up our column content, adding some stuff. That type thing.

So ….we’ll be around. Just don’t expect a lot. Kind of like flying on an airplane these days. Only we won’t require you to give up your liquids before reading.

Words Fail Me

This doesn’t even classify as a “Dead Tree” award nominee.

This is in a class by itself.

Tuesday Delta Air Lines issued this release:

From ‘Project Runway’ to Airport Runway, Delta Launches ‘Flying in Style’ Promotion to Celebrate Sponsorship of Bravo’s Hit Reality TV Show

Flight attendants will award stylish passengers with SkyMiles certificates, Crown Room Club passes and coupons for the airline’s signature cocktails on select Delta flights from Aug. 23 through Sept. 6

ATLANTA, Aug. 22, 2006 (PRIMEZONE) — From “Project Runway” to the airport runway, high fashion is taking flight on Delta Air Lines. Delta is launching a “Flying in Style” promotion on select transcontinental flights from Atlanta, Los Angeles and New York to celebrate the airline’s sponsorship of the new season of The Weinstein Company and Bravo’s hit reality TV show, “Project Runway,” and its role in two upcoming episodes on Aug. 30 and Sept. 6. On select flights between Aug. 23 through Sept. 6, Delta flight attendants will award passengers who are “flying in style” — sporting stylish, fashionable looks while traveling — with prizes that highlight the airline’s distinctive products and services. On Aug. 30, when Delta is featured on the first of two “Project Runway” episodes, special premium prizes also will be awarded.

“In support of Delta’s sponsorship of ‘Project Runway’ and our ongoing efforts to create a more entertaining on-board experience for our customers, we’re having some fun and recognizing our passengers who are spotted traveling in high style,” said Joanne Smith, vice president of Marketing for Delta. “It’s only fitting that our incredibly stylish flights attendants, wearing the sophisticated and elegant Richard Tyler collection for Delta, will be recognizing and rewarding our most fashionable customers.”

Delta’s stylish passengers will be awarded by stylish flight attendants sporting stunning new uniforms from world-renowned designer Richard Tyler. On May 1, Delta flight attendants, customer service agents and Crown Room Club began wearing the Richard Tyler Collection for Delta, which was inspired by the era of glamorous air travel and are designed to reflect timeless elegance.

Starting next month, Delta will unveil a new innovative domestic product on its transcontinental routes. The product, offered in both first and coach classes, will provide a distinctive on-board experience for customers, with comfortable all-leather seats, signature drink offerings and an industry leading in-flight entertainment system that features live television, movies and music (all available on demand), as well as a suite of video games. With this new product, Delta will be the only domestic carrier to provide customers with a two-class aircraft equipped with video on-demand entertainment available at every seat.

“It’s only fitting that our incredibly stylish flights attendants, wearing the sophisticated and elegant Richard Tyler collection for Delta, will be recognizing and rewarding our most fashionable customers.”

Delta’s stylish passengers will be awarded by stylish flight attendants sporting stunning new uniforms from world-renowned designer Richard Tyler. On May 1, Delta flight attendants, customer service agents and Crown Room Club began wearing the Richard Tyler Collection for Delta, which was inspired by the era of glamorous air travel and are designed to reflect timeless elegance.

So let me get this straight. With everything else going on in the industry these days, Delta has decided that it’s a good thing to reward those travelers who wear Jimmy Choo shoes with a Coach bag thrown over their shoulder, while attired in a Diane von Furstenberg wrap dress? All in an effort to recapture a sense of the days of “glamorous air travel.”

As I said, words fail me.

You know, I could have seen this working with Song. Because that product’s “brand” image would have fit right in with this promotion. But what I fear is that someone at Delta thought — “Oh, we can import some of those “good ideas” we had with Song to the mainline — this is perfect.”

Ahhhhhhhh……..don’t think so.

Now here is an example of the “glamorous days of air travel.”


Here we have the dining room of Pan American’s Yankee Clipper, a Boeing 314 flying boat, which flew Pan Am’s first transatlantic passenger flight in June 1939. The photograph’s caption states that the dining tables are made of black walnut, the upholstery features a “spirited blue pattern,” and the walls are silvery-beige.

Now, until Delta tells me they are putting in walnut dining tables and providing dining room seating attended to by attentive flight attendants dressed in those “glamorous stunning” uniforms onboard as part of their new “upgraded” service , I’m afraid this little promotion fails to make the cut.

Enroute travel report — who wants cognac?

SOMEWHERE OVER THE PACIFIC OCEAN — I don’t really have a lot to say in this post (so hopefully Holly won’t delete it while I’m sleeping in the almost-flat business seat), but I just wanted to say “Hello” from onboard ANA flight 2 as we fly from Tokyo to Washington Dulles.
I’m here onboard the Boeing 777-300ER enjoying the after-lunch chocolate and cognac while a very, very energetic toddler bounces back and forth, around, and between the first class cabin curtain.
ANA’s new style business class is quite amazing. Business travel definitely still has life.
While waiting in ANA’s lounge, I saw quite a variety of big Boeing metal. 747s, 777s, and 767s from ANA, JAL, Northwest, Lufthansa, Asiana, Korean, Singapore, Austrian (OK, actually that was an Airbus), American, and others… Very interesting assortment.

Ex-Boeing Auditors Allege Boeing Used Faulty Parts on 737


From MarketWatch:

“Two former auditors of Boeing have alleged that parts used to assemble the Boeing 737NG between 1994 and 2002 were made with parts the airline knew were defective, the U.K. television news channel Sky News reported Monday.

Former auditors Taylor Smith and Jeannine Prewitt told the news station that Boeing accepted defective parts from Ducommun, a Californian supplier, and installed them even though they knew them to be faulty and potentially dangerous, the report said. The components are crucial to the safety of an aircraft’s fuselages, the report added.

The auditors making the allegations were demoted and dismissed, the report said, and filed a lawsuit in 2005 under whistleblower laws, where evidential hearings haven’t taken place. Boeing said the auditors’ case didn’t have merit and said the airplane maker has a multi-tiered control process to maintain quality and safety.”

Political Climate Continues to Prove Difficult for Virgin America


Last week Steve Lott in Aviation Daily wrote about the mounting financial problems plaguing yet-to-fly Virgin America. The airline revealed last Wednesday that it has been forced to raise another $53 million in a disclosure to the DOT. This is in addition to the original $177 million raised more than a year ago that was supposed to be adequate for the start-up airline.

In addition to mounting start-up costs, and escalating legal fees, the airline continues to take new Airbus aircraft deliveries. According to Steve’s article, the airline is now sitting on eight aircraft — six Airbus A320s and two A319s.

But the airline remains much like the now dearly departed dodo. Flightless.

The airline filed its latest reply to concerns voiced by competitors to the DOT just last week, but there’s no question that now new questions will certainly be raised as to the nature and the origination of the additional cash infusion.

Meanwhile — while the airline has picked up some expensive legal eagle help of late, in an attempt to help the airline fight the “foreign ownership” issue, the airline has also begun to lay off some employees.

In Steve’s article the airline was quoted as saying that it may start to look for leasing opportunities for its now non-flying fleet.

As we’ve said from the beginning on this one, I’ve not been impressed by much with this effort. Not by the money the airline has spent, not with the way upper management is structured, not with stories I’ve heard concerning aircraft decisions, and just why they were made, not with what little has been disclosed about how Virgin America would be that much better than alternatives already in the air, and certainly not with the attitude the airline’s management has taken from the start with almost everyone — which has been — we’re going to do this — screw you.

Or as one longtime airline observer and consultant said Monday, “My negativity on Virgin is all about the top leadership. Reid is arrogant, he played the SFO card poorly (rich area to launch a company, but hey, he lives there), he played the DOT card poorly and should have anticipated all the ownership questions, he raised expectations too early (see the many proclamations about starting soon), he hired Stacy Geagan for PR (who’s hated by the media) when you desperately need positive PR to sell your case to DOT, he built a headquarters like the Taj Mahal, took planes too early, pressured DOT too stupidly, and they’re treating suppliers like crap.”

Meanwhile, as I wrote in this week’s PBB, the administration has now backed off its former “hell-bent” desire to go ahead with the DOT rule change concerning foreign ownership. It was rumored that the DOT was going to enact the change before the end of August, in an attempt to prevent Congress from derailing the change before Congress’ actions could take effect in October.

But as a result of the “foiled terror plot” in the U.K., the DOT has now said it will “wait” and proceed more slowly with the intended changes.

This will not only delay a new “Open Skies” agreement with the EU, but I think it clearly is going to continue to make an eventual DOT certification of Virgin that much more protracted. Meanwhile that high-priced list of expenses just continues to add up.

Oh, and one last tidbit. I think maybe there was one fact the high-powered PR machine for Virgin has been negligent on.

Today I found out the airline has been awarded its IATA code.

The code? VX.


VX, as in nerve gas.

Think I would have passed on this one and asked for another one.

Spend 13 hours working in a closed room: the ‘sensible alternative to business travel’

TOKYO — Columnist Lucy Kellaway suggests in her Monday column in the Financial Times (subscription required) that business travel should end. Why?

It is tiring. It is disorientating. It takes forever to get to the airport. Aircraft are horrible. You eat too much because you are bored. Your feet swell up. You get jet lag. You do not see your family. Then when you do see them again they are cross with you because they think you have been having a fun time and should now pull your weight. You are shattered and see no reason why you should pull your weight at all.
Business hotels are beastly with their dark wood panels, their overheated, over-airconditionitioned rooms with ugly curtains and windows that do not open. In them you feel lonely an alienated.

I could go on, but I’m getting bored reading this all again. Lucy does not present a strong argument against business travel, and never feels it necessary to give a perspective on how an end to business travel would affect the airline industry.
Instead, her “sensible alternative” to business travel is essentially using video conferencing. Yeah, surprise! But wait, there’s more. Instead of just going to the video conference room and talking to whoever it is in Los Angeles, Tokyo, London, or Hong Kong, you actually first spend “three hours, seven hours, 13 hours, or whatever” in a room that simulates flying.
These virtual flights would be idea for the businessperson who can only seem to get away from the office and get any actual work done while flying, says Kellaway. Once they land, and exit the virtual plane, they go do their video conference, and maybe stay at a local hotel too before coming back, uh, home on another virtual flight.
Just think about it, “The savings in costs would be prodigious, as would the saving in air fuel. There would be no jet lag, no flight delays, and no chance of being blown up in mid-air.”
Lucy, I agree that business travel is not a lot of fun, but I don’t think many executives really feel that the day spent flying is really all that productive. Video conferencing is going to cut down on the number of business trips, but it’s not going to replace them. People still need to meet in person and there’s usually only one way to do that over long distances… flying.
Business travel is here to stay.

DisConnexion: Boeing to Shut Off In-Flight Internet

TOKYO — It looks like I will have one more chance to use Connexion by Boeing before the company permanently shuts off the service when I fly back home next week.
On my flight to Japan, having the Connexion service was great and I used it extensively to chat with friends, family, and coworkers, surf the Web, and send e-mail messages. It was well worth the $26.95 for the 14-hour flight.
Now Boeing has announced they will take a $320 million charge through the third and fourth quarters of 2006 as they allow for “orderly phase out of the Connexion by Boeing service.”
The company expects to benefit by 15 cents per share starting in 2007 after killing Connexion.
No word on what will happen to the substantial infrastructure, including orbiting satellites that the company built for Connexion.