Hello earthlings. I hope you all had a wonderful weekend. It certainly was a gorgeous one here in the DFW Metroplex. I love this time of year. I wish the clock could just stop and let us enjoy it all just a bit longer.
The latest issue of PlaneBusiness Banter is now posted.
This week we are all over the place. Literally.
Last week I traveled to Mexico City where I participated on a panel discussion as part of the Travelport e-Volve 2013 conference. More than 1000 folks signed up for the event. I’ll tell you why I think the event was not only a positive in terms of Travelport and its attempts to build client relationships, but because it was an effective and efficient way for developers and buyers to meet one-on-one.
Speaking of corporate travel, this week I follow up with my rather short, yet cryptic comment last week in PBB about the Global Business Travel Association. This week I explain why I think the organization needs an extreme makeover — as it has strayed way too far from what its role is as a industry organization and morphed into a money-making machine.
I have news for GBTA — for-profit entities can do the “tradeshow” conference better. And they are. That’s not why people pay GBTA dues. Nor is it why they belong to GBTA chapters.
In other news, JetBlue announced its new city last week (Detroit) and American Airlines announced it was shutting down its Haneda/JFK route. The airline also announced new nonstop service between DFW and Hong Kong and Shanghai.
This week we have a great new piece of analysis by our PlaneBusiness airline dork, analyst, and contributing editor, Brett Snyder.
With all the flak out there these days about just how “low” the fares at Southwest Airlines are or are not, we decided to take a look at how fares and total revenues have fared (pun intended) at both Southwest, as well as its competitors, over the last few years.
I think subscribers will find the graphs quite telling.
First, fares and total revenues have shot up at Southwest at a much higher rate than any other airline in the U.S. since 2009. Second, this has helped to create a nice “comfy” pricing umbrella for the likes of Spirit, Allegiant, and Frontier to position themselves under.
It also means that the rest of the industry has benefited as well, as other airlines have also been able to raise fares.
But the third point is this one — just how much higher can Southwest raise fares? It would seem the airline is now in a rather precarious pricing situation.
So why did all of this start in 2009? Simple. That is when the previously-advantageous fuel hedges at Southwest turned in the opposite direction.
To put it another way, it’s when the airline finally had to deal with fuel costs on a similar level as its competitors. Result? Fares have rocketed.
Airline stocks enjoyed one heck of a great week last week, with shares of Spirit Airlines and bankrupt AMR leading the pack. We update you on the latest analyst musings about those bankrupt AMR shares.
A heads-up. This week U.S. airlines begin to report 3Q13 earnings. Seven airlines will report between Tuesday and Thursday.
Lucky us. 🙂
All of this and more in this week’s issue of PlaneBusiness Banter.