Where It Was. Where It’s Going.
Watch American Airlines.
American Airlines just announced that bookings made through certain travel agency portals will no longer be eligible for frequent flyer miles. No word on which of these portals will be affected, but take it to the bank, this is the beginning of the final step in deleting most off-carrier airline sales.
AA also is restricting some services to members of its frequent flyer program. It’s all about circling the revenue wagons.
In trying to opine where this may go, it’s instructive to see how airline retailing has evolved over the years.
Yikes. When we say “travel agent” for some of us, it recalls a dark medieval time when airlines were dependent on brick-and-mortar entities for a substantial part of passenger revenues. Not just dependent, but at their mercy.
Until the mid-1980s, the process of determining itineraries, booking reservations (often inter-line itineraries), computing fares manually, consulting massive tariff books, checking routing guides, applying joint fares on multi-airline trips, and writing out complex tickets, was an ordeal. So, airlines found that paying an outsider some percentage of the fare was cost-effective in retailing their product. It was a necessity, not necessarily something that they preferred to do.
But these travel agencies represented all carriers, and they were fully aware that they were in control of the consumer decision regarding what airline the customer would fly. They had no qualms using this as a sledgehammer pitting airlines against each other to get the bookings. The official airline pablum line was that travel agents were “our valued partners.” But the reality was that it was just a fragile truce – the TAs generally played the consumer-decision card openly and brazenly.
So, for an airline, the care and feeding of these agencies was critical and expensive. Airline sales reps were responsible for visiting and pandering to these agencies with all sorts of bennies in hopes they would be less likely to book folks on another carrier. Lots of “travel agency appreciation” receptions (cheap white zinfandel and shrimp seems to have been the feeding of choice), fam trips to far off places, and other incentives.
All done with the sincerity one usually finds only at a used car lot.
Travel agencies knew they had juice, and they generally did not hesitate to let airlines know it. One airline CEO referred to these people as “extortionists” – give’em what they want or else.
It was not uncommon for a TA to indignantly declare they’d never book another client on a specific airline in retribution for some failure to pay homage properly. Luckily, “never” was usually not much more than a week or so, or until the next cheap-wine-and-shrimp event. Short memories, usually.
But with the evolution of computerization, the end of interline routings, and automatic faring, by the mid-1980s, these agencies weren’t needed. Not at all. Consumers could do it on-line. Airlines could now advise the formerly-arrogant TAs that they could take a hike.
The complex training to read tariffs and fill out time-consuming conjunction tickets were no longer needed. Actually, tickets went away completely. The commissions ended. The travel agent help desk at the airline was disconnected. There were no more sales reps walking through the door with crocodile smiles. Airline retailing had left brick and mortal travel agencies in the past.
So, now we’re in an age when airline retailing is far more efficient, and in the control – mostly – of the airlines themselves.
That brings us to AA’s leadership in honing costs further. Bet on it, any part of the system where outsiders are involved in the airline choice (or choice of airline product) is going to be under scrutiny.
You have to assume that entities such as Travelocity and Expedia and others are in the crosshairs of the march of progress. Airlines have their own web portals, and maybe these other channels aren’t all that necessary. Or at least some of them. American has been upfront in making it clear that consumers who are AAdvantge members and who use AA.com have “status.” Sort of.
So, the battleground is where the costs v benefits may be in using outside retailers. AA dabbled with being off of some of these channels and went back. But Southwest seems to have survived okay, not being accessible on these channels.
The open question is what retail channels are the most cost-effective for the airline. One thing they’d like to avoid is having competition in the booking process. On these electronic travel agency portals, consumers have the ability to compare.
There’s another sea-change (sky-change?) in the works in regard to airlines busting out of anything traditional in retailing their product.
Stand by. Let’s see what Delta and United do over the next few weeks.
RIP Ultra Low-Cost Carriers:
Evolving Into AOCs:
Alternative Option Carriers.
This hoedown is clearly coming to an end. Or at least the party is moving elsewhere.
We are talking about the concept of the ultra low-cost carrier, which was focused on plumbing net-new traffic mostly by low fares to leisure points.
An Evaporating Market Strategy. The entire ULCC model was essentially based on being able to offer a new discretionary spend product – service to leisure and a few other markets where low fares could generate net-new impulse traffic.
That traffic is running dry. For two reasons.
One, it’s getting clear that markets such as Florida and Las Vegas and Phoenix are getting more capacity than can be stimmed but a cheap initial base fare.
The other is more ominous: the “U” in ULCC is evaporating fast. Cost advantages just aren’t as much in play as in the past.
New revenue streams are needed. Soon.
Think about it. ULCCs have no real advantage in fuel costs, or aircraft lease rates, or airport costs particularly as some continue to shift into major-density non-leisure markets. Labor costs are evening as well. New and expected gains across the bargaining table for pilots, flight attendants, maintenance and other classifications are leveling the cost ledger between ULCCs and major/hybrid airlines.
Take a look at the shifts in market strategy. Frontier is the most obvious example. It is pulling down capacity in Florida and Las Vegas. At the same time, they just announced a whole passel of expansion – into mostly major non-leisure markets – at PHL, DFW, MSP and CLT.
All, apparently, are markets where the incumbent’s high local fares could be in play. What Frontier is doing is offering an alternative air option. One with a much more bare product, a limited schedule, and fares lower than incumbents based on structural limitations on competitive responses.
The Key Is When The Incumbent Is Capacity-Trapped. It is going to take a lot more than an intro $19 fare to make these route print black ink. The local fares are high because in many – most – of the new markets targeted by F9 a lion’s share of the revenue is flow traffic over the major’s hubsite, and local O&D isn’t the main focus. In some cases, the incumbent may be reticent to fare-match for fear of spilling some of the more lucrative flow traffic over its hubsite.
So, the open question is determining the actual battle advantages of each player in these invaded hubsite local markets.
On one hand, there is the potential for F9 capturing some of the local O&D from the incumbent, due to the lower fares. In some of these markets, the incumbent major carrier is operating leased-in E175s, which have higher per-seat costs than the A320/321s Frontier will be operating.
Plus, these major airline flights tend to be at or above 80% load factors, giving little wiggle room for competitive response.
Again, this is particularly true when the majority of the passengers on the major are flow traffic that could be damaged in a local-market fare war.
Seat density – the last main expense refuge as other areas see increases – can be an advantage for F9, but they still must fill those 180-200+ seats, even with a day-of-week schedule, regardless of actual ASM costs.
Daunting. But Not Entirely Crazy. On the surface, by traditional thinking, what Frontier is doing is the airline equivalent of a bull moose charging an oncoming locomotive. The operative word here is “traditional” – that means old. That means – maybe – out of date.
The Stim Factor Is The Unknown. We took a look at Cirium data for one route involved – Grand Rapids-DFW. American enjoys an 80% load factor in the market with almost 230,000 passengers on board.
But over 65% of that high load factor is connect traffic over DFW, which is completely out of reach for Frontier. They will need to stimulate – or capture from AA and other incumbents, or both – a current local O&D traffic of about 91,000.
Okay, doing a fast pass at what F9 is planning, assuming three weekly A320 round trips DFW-GRR and assuming a need for an 80% load factor, the airline would need to board about 45,000 to make a go of it.
It leads to the conclusion that between diversion of some of the current O&D from American, and some stimulation due to lower fares (assuming they are still economic) this market entry may not be as daunting as it looks. Maybe. Grand Rapids is close to a boom market, as is most of Michigan’s Lower Peninsula. Point: this could actually work for Frontier.
The bottom line is this: for ULCCs to move into the future, it means moving some capacity into traditional and established markets where simply a low fare can both capture existing passengers and stimulate new ones. Lots of new ones. Their new niche needs to offer an alternative – a different product that can capture and stimulate traffic. It’s not direct competition, per se, but another product.
This means a whole new competitive picture, based on a model not yet proven. But it may be the only option left for the ULCC sector as cost advantages continue to be blurred.
The third quarter of 2024 should be really interesting.
Frequent Flyer Programs.
Some Big Changes Might Be Coming.
Back in October, two senators petitioned the Department of Transportation to investigate what they opined are anti-consumer actions on the part of airline frequent flyer programs.
Now, Buttigieg and crew are on it. Not good news, as it guarantees political grandstanding will come into play.
Cutting to the basic bottom line, the contention is that with airline affinity credit cards, consumers are awarded “miles” based on what they spend, whether it’s for travel or for groceries. That’s great.
The fly in the ointment is that the value and application of these miles gained in the spend process are at the mercy of airline decisions.
That, according to the thought patterns at the DOT, represents something close to bait and switch. Consumers spend, are awarded miles based on a reasonable expectation of their value. But when airlines can – and have – arbitrarily after the sale cut the value of these miles by increasing award levels, that could be considered as defrauding the consumer, at least by some.
Were it simply a matter of earning miles flown on the airline – which was the original program – the airlines’ contention that they can change these values at any time is clearly between them and their passengers. But when affinity credit cards are responsible for billions of spend, much based on consumers’ intent to acquire “miles,” then slashing the value of those miles takes another turn.
Let’s get clear here. The original intent of miles-derived frequent flyer programs was to build brand loyalty. Period. They were widely implemented to keep consumers from using another carrier.
For example, the American AAdvantage program was intended to attract passengers from Delta, United, Southwest, Continental, TWA, Braniff, Northwest, Ozark, North Central, USAir, Southern, and Texas International. Back then, airlines had plenty of seats available for award travel, and a gangbuster system load factor was 60%.
Let’s fast forward to today. All but American and the first three airlines listed are gone. No more. Not there. Plus, American, Delta, United and Southwest all have load factors in the roughly 80%-plus range. That means a lot fewer unsold seats to give away to award applicants. And possibly almost none except at off-peak times and circuitous routings to popular destinations.
Now, it doesn’t take an MBA from Wharton to conclude that it’s not good business to give away product that you can easily sell. So, that award chart now might be double or three times or more higher than five years ago.
Read: reducing the value of the miles earned when Fred Consumer uses his airline affinity card to pay for a burger and beer at the local gin mill is possible. Once awarded, there is no guarantee the value of those earned miles won’t be arbitrarily cut.
This does not make Fred real happy when he finds that after a couple of years charging everything on his Trans-Deficit Airlines Gold Card, the planned Hawaii trip with the kids is 50% more miles, and involves three connections to get to HNL from Omaha. (That is not an exaggeration.)
The conundrum facing airline FF programs is that the entire raison d’etre for them is gone, and now it’s the affinity cards that are the gold mine, instead of snarfing passenger demand from other airlines.
From that perspective, it is possible that the DOT and DOJ may have some legal leverage. Or think they do.
Ball is in the airlines’ court. They need to craft something beyond the claim that they have always made clear that the program is subject to change.
Fred thought he was getting a free trip. Now, maybe not. When he paid for that cheeseburger and beer, airline policies were not in play.
January 29, 2024
Been a big week …
Lincoln, Nebraska just got word that United is yanking IAH service, starting in May.
This could be the first drive-by victim of the 737 fiasco at Boeing. United will have fewer airliners this summer than it had planned on. The service ends at the start of the summer – when a lot of expected airplanes will still be unbuilt.
It’s Just Starting. The Fallout Is Spreading Fast. The FAA has approved operations for the 737-9. But that does not address the cumulative damage inflicted on the air transportation system by this – only the latest – collapse of trust in Boeing.
Listen up, y’all. The Boeing issues have already changed airline route planning and air service access across the entire USA air transportation system. There’s more to come.
Let’s start with this: there is going to be a shortfall in planned airliners at United, Southwest, American, Alaska and Allegiant. Boeing is constricted by the FAA from increasing production rates. That means customers need to put off adding capacity, and maybe reconsider what they have on order from Boeing.
Airbus is licking their chops. Despite a full production dance card into the next decade, don’t assume that they are out of the picture as an alternative option for airlines which are the victim of Boeing’s issues. We’ll tackle that in a moment.
The production delays at Boeing are just the latest events that have resulted in Southwest taking out any assumptions that the 737-7 will be delivered in 2024. They have 300 on order. The carrier is working to knit-in the 18 new airports they unilaterally added in 2020-2021. The -7 was a part of that program. Operative word: was. This is a financial issue for WN.
United is delaying the scheduling of 737-10s, which is also facing certification delays. The airline has indicated it is now looking at alternative options. It has over 200 on firm order. Or, maybe not so firm.
Alaska Airlines has estimated a $150 million loss from the -9 grounding, which took 27% of its fleet and over 30% of its seats out of the sky. Oh, by the way, they have 50 737-10s on order, too. Or maybe did.
A Couple Hundred Order Shifts To Airbus? Airbus, which is the only other mainline narrow-body game in town, is production-booked until 2030. But that could change. The Boeing problems could – as a very raw estimate – shift as many as 500 or more 737 orders their way. That could well justify new facilities. As one option they have another 70 acres at Brookley/Mobile that is ready for expansion.
Embraer Out In The Cold? Embraer might have some new opportunities for the E190E2. Up until now, however, USA airlines have shown little interest in the platform, beyond the smaller scope-compatible E175 versions ordered for operation by “regional” contractors, which is not a sector that will be expanding – for economic and labor reasons.
Boeing Front-Office Credibility Is The Issue. Scott Kirby of United said it loud and clear. These -9 fiascos are just the latest in a stream of problems at Boeing, and as he put it, it was the straw that finally broke the camel’s back. He’s already paid a visit to Toulouse, according to reports.
Captain Dennis Tajer of the Allied Pilots Association noted that there is trust in the 737 as an airliner, but no trust in what’s coming out of Boeing management. Describing the Alaska incident being the result of a “quality escape” by Boeing executives was right up there with the “wardrobe malfunction” description of what happened several years ago at the Superbowl.
It was the kind of babble that comes out of those billion-dollar consulting cabals staffed by MBA escapees who couldn’t boil an egg without clear instructions.
Captain Tajer pointed out a stream of production failures on the MAX over the past two years, all similar to the loose bolts found on the -9. Not comforting.
Boeing Is Big. So, Too Will Be The Effects On The USA Economy. This entire situation has tentacles reaching into lots of aviation sectors. Air service planning will be affected not only by Boeing production delays and order cancellations, but by the costs imposed on the airlines themselves in trying to deal with the situation.
Suppliers to Boeing will be adversely hit. A slowed production line means slowed demand for components provided by contractors for the airplanes.
The FAA Will Be Under A Microscope. This party is a long way from over. Remember that the FAA is on the hot seat, too. They cannot, and now will not, allow politics to get involved.
Boeing is a major military contractor, with powerful connections on Capitol Hill. Their phone calls to these entities just might not get answered.
Based on the fact that lives have been at stake with the entire MAX program, it’s not entirely out of the question that Boeings “friends” inside the Beltway may take a powder on this one.
Message To Airports: Keep A Watch On Airline Schedule Filings. The shifts in airline route planning will likely be subtle, and embedded in glowing press releases announcing new service additions. But count on it: the red pencils are out and working in market planning.
More to come…
In this earthquake of expected schedule revisions, airports need to assure that they can isolate and identify the effects of airline fleet strategy shifts.
Changes will be coming, and it will take expertise and hard numbers to plan accordingly. Forecasting means defining the future before it becomes reality.
Airline schedule filings are your early warning system. Cirium delivers it.
January 22, 2024
The Real Messages From The B6/NK Deal
It’s A Lot More Than Just A Court Case
The message here isn’t just that a poorly informed judge turned the B6/NK agreement down.
It’s the repeated observations from credible analysts that both carriers may be facing a dive into the financial yogurt. And it isn’t due to a court decision – it’s an indication that the air transportation industry is in for a lot more turbulence than ambient information may indicate.
The entire air transportation system in which B6/NK and all other airlines operate is facing market changes that demand airlines shift expected strategies. Those shifts are not yet in full evidence.
We just got word that NK is projecting revenues on the high side of its prior guidance, but with a negative margin of something like 12%. JetBlue is now pulling down some flying, including leaving the BWI market, to shore up the bottom line.
These are decisions based on market conditions and are not entirely due to factors internal to the carriers themselves. If discretionary spending slows, which is the natural case with increased inflation, it will affect demand for air travel. And impulse travel – the foundation of the ULCC model – is at the outer margins of where these dollars are spent.
As it stands today, data from our friends at Cirium indicate that within the USA, airlines are planning to produce just under 5.5% more seats in 2024. Within this, the ULCC sector – again, which focuses on a different consumer travel sector than the four majors – is indicated to add close to 7.5%, if first quarter data is any indication.
But the fact remains that the Spirit performance – projecting a 12% negative margin – clearly indicates that the foundational economics of the ULCC sector are shifting out from under the sector. That expected 7%+ capacity increase may not play for the second half of 2024.
Recommendation: Watch for projected results in the 2Q of 2024. If Spirit and JetBlue are facing the need to cut capacity, the driver for this will be more than competition alone. If traffic demand continues to drive yields down, and the effects of new labor contracts come increasingly into play, it does not take a supercomputer to conclude that the ULCC sector will materially evolve.
With due respect to the folks in the financial world intimating things like Chapter 11, or even liquidation for either NK or B6, the real outcomes of this (should the carriers’ legal appeal be rejected) will more likely be that the carriers will materially restructure. In the case of Spirit, the declining metrics for the traditional ULCC market will be the cause.
January 15, 2024
Rural Air Service:
The Southern Airways Model:
A Square Plug In A Square Hole
Avelo just pulled out of Dubuque. It was recruited subsequent to American leaving the market.
Presumably, the subsidy ran out. This is indicated by the drop in load factors from 90%+ to under 60% in September.
The ULCC Placebo For Air Access. Despite the hopes of the community, even if successful, Avelo could only deliver a single impulse-leisure destination for Dubuque. Great – if it had worked – but it still didn’t deliver air access to the community. That’s not the business Avelo is in.
A number of communities are in the same boat as Dubuque. They just don’t have the traffic demand horsepower by themselves to support the skyrocketing financial hurdle to support traditional network airline service. The main option is Cedar Rapids, about 75 minutes distant.
All the king’s market studies and all the king’s leakage analyses won’t change these geographic and economic realities. The issue is whether DBQ can develop scheduled air access that meets the needs of a limited and carefully-targeted business demand sector.
Enter what we call the Southern Airways model: limited and low-capacity nonstops to a major airline hubsite, with complete and transparent interline capability. This can be made possible when, a) the market is geographically with in the range of a Cessna 208 or similar, and b) is understood to be founded on specific business traffic that can and will use nonstops connecting at a specific airline hubsite.
No, it isn’t mass-transit flying. It is not intended nor can it be very low-fare service. It can work when there are specific sectors of the local business community have specific travel demand – mostly inbound – where a connection over a major hub and flying in a single-engine airliner can make sense.
For businesses from across the globe that may have communities of commercial interest with the DBQ region, this is an option that may have value.
On the table are Williamsport and Purdue. Both have specific business travel demand to which this type of service is valuable. Think the four professors from Japan who will be doing lectures at Purdue. Think the six component manufacturers coming from Mexico to negotiate with Lycoming’s offices at Williamsport.
Think specific and targeted travel demand. The hard fact is that markets like DBQ and TOL and YNG and others cannot compete on a full-out basis with other larger airports in their regions. So focus.
The Economics of Local Air Service Define Opportunities. We know this: the chances of Dubuque, or Youngstown, or Topeka, or several other similar airports attracting back mainline-branded E175s or CRJ700s are hair thin. In an airline system where fuel costs are going up, pilot pay is aimed at 30%-40% increases, and where similar jumps will be in cabin safety staff (a.k.a. flight attendants) and technicians, the economics for a lot of rural air service are simply out of reach.
Community Understanding of Air Service Realities Is Critical. Naturally, there are specific criteria necessary to make the Southern Model work, not the least of which is assuring the civic community is fully informed on air service realities, and not continually be swan-songed by Rasputin consultants with promises that continually lead nowhere.
These criteria were covered in our latest Touch & Go™ vision letter. If you’re not on the subscription list, drop us an email.
The point is that there may be solutions for opening business air access to points such as DBQ. But clinging to the hope that branded network service will return is fantasy.
January 8, 2024:
What Would A Long-Term 737-9 Grounding Mean To Air Service?
It Is Unlikely, But, Let’s Think About It
The fallout from the Alaska incident, when an exit-door plug blew out after take-off from Portland, could have effects on not just Alaska and United (the only USA operators), but on dozens of communities across the nation.
Probably, a lot less effect on the national air transportation system than it may appear. At this point, the only airliner affected are 737-9s at Alaska and United. It’s a total of 144 airliners out of over 6,000 in USA airline service.
In the hopefully unlikely event a long term grounding is inflicted, both carriers would be facing some challenging re-structuring of schedules, disrupting thousands of flights and tens of thousands of passengers. But both carriers, particularly United, would adjust fairly quickly.
At UA, there are 79 737-9s in the fleet, with seven more on the order book. These aircraft represent only about 8.3% of United’s fleet, assuming that all are in active service, which is unlikely due to routine maintenance programs. More cogently, the 737-9 fleet comprises less than 12% of the carrier’s mainline narrow-body fleet.
The percentage of system ASMs these airliners represent is much smaller, but the real issue is dealing with flight schedule adjustments.
It would be tough, but taking into account the leased-in E175 lift in the United fleet, the airline would likely be able to readjust schedules relatively quickly for a long-term -9 grounding. Expensive, complex, and with reductions in some frequencies. But not a total body-blow to United’s customers.
Alaska Airlines is a different situation. The -9 fleet involved in this affair represent almost 30% of the operating AK fleet, which in the case of a longer-term grounding would entail some significant route system surgery. The most likely immediate move would be a slashing of significant percentages of the carrier’s trans-con markets in order to get aircraft time to support the rest of the AS system.
It would be a very real challenge for the carrier and some of the cities it serves.
It would likely result in diverting substantial E175 flying away from smaller markets, reducing frequency and possibly cessation of service entirely, depending on the length of the grounding.
All this tossed on the table, the NTSB preliminary findings should be out in the next week. If it does indicate a long-term (say, several weeks) grounding, then we’ll dive into a more granular analysis of the effects on air service.
January 1, 2024:
Aviation Dynamics To Watch
Watch the first six weeks of 2024 to determine where the economy is headed. Nobody seems to be sure, depending on political viewpoint. So, consumer spending will be the metric. A metric that will determine growth or non-growth in air traffic.
According to our friends at Cirium, traditional mainline carriers are planning on a 5% increase over last year. ULCCs as a group are at @7.8%, but it’s all over the chart depending on airline.
On the mainline carrier side, some of the five per cent capacity increase is due to shifts in fleet mix, as more 50-seaters are sent to the desert.
But on the ULCC ledger – which comprises a fundamentally different airline business – the projections range from less than 2% growth (Allegiant) to almost 20% at Frontier. Percentage comparisons with Breeze and Avelo are not meaningful as both airlines were in start-up mode.
Airplane Order Books: Strategic Planning Indications. There are some telling data when fleet plans at ULCCs are compared, from over 200 new units on order (over several years) at Frontier to no hard future fleet numbers at Avelo, which still has just 16 737-700/800s operating.
For subscribers of the Touch & Go vision newsletter, we’ll be covering this in more detail at the end of the week.
The embarrassing fiasco of Red Way, which was a semi-charter attempt at Lincoln, Nebraska, just got more embarrassing. A state agency pilloried the scheme, describing it as a “riverboat gamble” and outlining how it never got within several galaxies of its glowing traffic projections.
Red Way was the embodiment of a lot of the amateur Pied Piper ASD consulting that’s being inflicted on some airports. Pander to and take advantage of local lack of knowledge of air service and consumer economics.
Routes were initiated and then dropped like flies right from the start. Load factors were akin to transporting sailboat fuel. The only thing that appeared positive was that Global X, the actual operator, was apparently a lot more reliable than the jive numbers the Red Way folks forecasted. In fact, the state report indicated that just one flight – the first one out of LNK – was profitable.
The number of $3.7 million is reported to be the tab. What is of concern is that most of the local comments revolve around hot air claiming it was a good try, it was a noble attempt. It was just the start. The community won’t be denied. Then the perfunctory new consultant hired arrives and suggests that American and Delta should be prime targets. Nothing like illuminating the obvious.
Red Way was a major failure in judgement and in planning. To romanticize it as noble is outrageous. It’s a poster child for the need for communities to learn about the economics and structure of the airline business before diving into civic-pride sideshows like this. Yessir, we need that service, is the mantra.
But having any inkling of the actual needs and trends of air consumers isn’t part of the program.
Hopefully this will be a message in 2024 that civic gung-ho is no substitute for responsible and professional air service planning.
JetBlue Acquiring Spirit. Do a media search, and virtually all of the articles paint the B6 acquisition of Spirit assets (no, it’s not a route merger) as being an attack on the consumer.
The me-too reporting – even in the supposed aviation sector – has been more trendy than accurate in regard to what this deal represents in regard to actually increasing competition.
Then toss in the incompetence at the top of the DOT, the nonsense from consumer gadflies, and probably zero active support from anyone in the Marble Playpen (congress) and the betting here is the deal loses. And so does the consumer.
Alaska/Hawaiian. This is really a change in ownership, not a combination of competing route systems. It can bring a lot of financial stability to the Hawaiian part of the system. Unfortunately, the “M” word (merger) is involved, and knees are jerking across the usual media. No hard projections here, but the ill-advised mergers of he 1980s (TW/OZ, NW/RP, AA/Air Cal, US/PI, etc.) are now being used as bogey-man warnings.
The industry has changed, and these four-decades old deals are non-sequiturs and not even relevant to the two airline deals on the table. But consumerist jihadists will likely get their way.
Never assume that the folks at the top of the DOT will pass up anything they can use to put political spotlights on the airline industry.
There is no question that a lot of this is due to really short-sighted planning at some carriers. Namely, imposing all sorts of rules and fees and enforcement of same, often to be handled by gate staff that have less training than the guy operating the Slurpy machine at the local 7-11.
But that has generated a fertile field for both the media and the DOT to make press. We witnessed the sorry press conference a few months ago where Buttigieg and the occupant of 1600 Pennsylvania actually lied about a number of airline-imposed consumer issues. (Sorry if that statement offends anybody, as truth sometimes does.)
In 2024, unless the airline industry wants to have more regulatory interference which ultimately will harm consumers, it’s incumbent to assure that the air travel experience is simplified, de-ruled, and handled by trained and loyal staff. (That good deal in farming it out to Fred’s Ground Services is really a bad idea.)
Take a look at some of the coverage. There was the unfortunate one-off event where a six-year-old got boarded to the wrong destination. No argument, a giant service failure that could have had nasty repercussions.
But just this week, the media is burbling loudly about a 16-year-old kid that got on the wrong flight and ended up in San Juan instead of Cleveland.
A service failure, but a sixteen-year-old? The guy was old enough to drive himself to the airport. That’s not an unaccompanied minor, but the media coverage makes it look like the kid will be emotionally warped for life.
One network made this front-page above-the-fold website news, even to the extent of posting pictures of San Juan and of Cleveland to make the emotional point that the airline delivered him 2,000 miles away from Ohio. A 16-year-old kid, who according to the media had no responsibility for reading signs or hearing departure announcements or welcome announcements on the airplane.
Heck, when I was that age, I was fortunate to travel up and down the Pacific rim from our home in Taipei, often solo, without the benefit of a cell phone, internet or even a credit card. Scary and mind-warping it wasn’t. In this case, barring any mental challenges not mentioned in the panting articles, it is clear that this kid bears a lot of the responsibility.
The takeaway: air travel is a trendy treasure-trove for media attention. Most of it negative. The ball is in the airline industry’s court, but in some cases, there’s not much to be done to counter stupid media coverage.
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