Category Archives: Airplanes and Airports

Analysis – The Battle For Seattle: Alaska vs. Delta – Part Two

By: Vinay Bhaskara / Published June 29, 2015

An Alaska Airlines Boeing 737 departing from Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

An Alaska Airlines Boeing 737 departing from Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

On the face of it, Alaska Airlines has held up relatively well to the face of an onslaught at its largest and most important hub. In the first quarter of 2015, Alaska reported yet another record net profit of $149 million (post taxes), and as I mentioned in Part One, Alaska has certainly managed to hold its own. The current fight in the Seattle market is a bit like a guerilla war, with Alaska playing the role of the Vietcong (or whatever your preferred ragtag group of misfits is) and Delta playing the role of the US. Through its superior knowledge of the local market and inbuilt sympathy of the populace (as well as a whole bunch of strong business execution) Alaska is staying in the fight.

ANALYSIS: The Battle For Seattle: Alaska vs. Delta – Part One

But despite Alaska’s admirable strategic positioning and focus on winning customers with quality, at the end of the day, its “victory” thus far has been almost entirely about fuel, more precisely the rapid fall in fuel prices over the second half of 2014 and the uneasy plateau at $60-65/barrel of WTI crude in 2015. Alaska’s first quarter 2015 numbers were certainly pretty: $238 million operating profit, 18.8% operating margin, 20.1% ROIC. But beyond the headlines, two numbers stand out: 5.7% and $123 million. The former is the decline in PRASM for Alaska in Q1 and the latter is the savings it accrued from the drop in fuel prices YOY. Alaska’s net profits (pre and post tax) would have declined substantially YOY if not for fuel to $117 million and $23 million respectively. A year and a half ago, I said that all of the Delta capacity being added in Seattle would harm yields and compress margins at Alaska because Seattle was its most important and highest margin hub. That’s exactly what happened in Q1. But thanks to a pissing contest between American shale producers and the Saudis, Alaska instead gets to trot out a bunch of pretty numbers and go about its business without an investor revolt.

A more charitable description of Alaska’s current position would note that many industry observers and analysts now believe that the price of oil has settled into a “new normal” with a peak price between $60-70 per barrel. And until the next recession, that’s probably a fuel price point that will allow Alaska to sustain its current level of competitive capacity and growth without harming margins too much. But the threat to its highly profitable core at Seattle is not something that Alaska can ignore. The reduction in fuel prices has merely bought Alaska more time to respond.

Alaska diversifies while going long and thin

I am loath to further overburden the guerilla warfare analogy but it fits the narrative of Alaska’s recent moves in Seattle and elsewhere incredibly well. Indeed Alaska’s response to Delta’s invasion of its home base, an event that “shocked” Alaska executives, has been remarkably measured. There was one major head-on strike (Alaska’s out-of-character buildup in Salt Lake City), but beyond that Alaska has largely stayed out of direct confrontations with Delta (Seattle – New York JFK notwithstanding). Instead, it has focused on leveraging its strength up and down the West Coast with new point to point routes such as Eugene – San Jose and Los Angeles – Baltimore while also reinforcing its secondary hub in Portland.

Photo Courtesy JDL Multimedia

Photo Courtesy JDL Multimedia

In Seattle, Alaska has conformed to a guerilla-esque strategy of indirect confrontation. Because Delta’s commitment to Seattle has been strong enough to prevent Alaska from bleeding Delta dry with price wars on new Delta routes, Alaska has instead focused on increasing its relevance for Seattle-based O&D customers through new, organic destinations. The recent announcements and additions of New York JFK, Raleigh-Durham, Washington Dulles, and Charleston to Alaska’s already powerful Seattle route portfolio are not direct shots across Delta’s bow. But they make it harder for the widget to compete with Alaska and build a sustainable hub in Seattle all the same.

In the meantime, Alaska has continued to cozy up to a hodge-podge of foreign carriers, aiming to replicate a small part of what Delta offers through nonstop long haul travel on its own metal. The more interesting partnership has come with American Airlines, who was only too happy to step in and leverage Alaska’s strength in the Western United States to boost its revenues. The most visible tie between the carriers was Alaska handing the lucrative Los Angeles – Mexico City route over to American, but overall, American has seemingly offset, if not entirely filled the void left by Delta’s sudden disengagement.

In Part 3 of this analysis, I tackle how things will shake out in the Seattle market

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ANALYSIS: United Buys a Stake in Azul

by Vinay Bhaskara / Published June 26, 2015

Azul's flagship Airbus A330-200 aircraft / Image Courtesy of Alexf.

Azul’s flagship Airbus A330-200 aircraft / Image Courtesy of Alexf.

United Airlines is making an aggressive play for the Brazilian market. The Chicago-based carrier will be purchasing a 5% stake in Azul Brazilian Airlines, the Sao Paulo based low cost carrier that is Brazil’s third largest airline after oneworld alliance member LATAM Airlines Group (South America’s largest airline) and low cost carrier Gol. United will spend $100 million for its minority ownership stake, valuing Azul at $2 billion. The two airlines will also deepen ties through code sharing in both the US/Caribbean and Brazil, optimization of schedules in Brazil, and reciprocal frequent flyer program earnings and benefits.

Initial Network Synergies might be Sub-Optimal Due to mismatch

United is by far the most Sao Paulo-centric of the three US legacy carriers in its Brazilian long haul network, with daily service from Houston, Chicago O’Hare, Newark, and Washington Dulles. It also serves Houston – Rio de Janeiro nonstop to feed into Houston based oil traffic. By comparison, Delta has double daily service from Atlanta to Sao Paulo (daily to Detroit/New York JFK), as well as daily Atlanta service to Rio and Brasilia. Delta will also be adding nonstop service from Orlando to Sao Paulo and Brasilia.  And American Airlines is of course in a different hemisphere, with service to 10 different Brazilian destinations thanks to its hub at Miami.

Azul for its part, primarily offers nonstop service from its hub at Viracopos International Airport in Campinas, about an hour north of Sao Paulo, where it operates nearly 170 peak-day departures to 48 domestic destinations. It will also operate 12 flights per week to Fort Lauderdale and 14 to Orlando this winter, leveraging its recently delivered fleet of Airbus A330-200 aircraft. In addition, Azul will offer daily nonstop service from Belo Horizonte (its second largest hub with ~80 daily departures) and Sao Paulo Guarulhos (GRU – Sao Paulo and Brazil’s primary international gateway) to Orlando. And while it has not yet announced schedules or frequencies, Azul also plans to add nonstop service from Viracopos (VCP) to New York JFK later this year.

This represents a fundamental network mismatch. United’s Brazil operations are concentrated on GRU, and while Azul does have roughly 50 daily departures to 16 domestic destinations at GRU (it’s fourth largest base by capacity), connectivity for United’s four arriving flights (between 10:40 and 11:40 am) isn’t quite as expansive. In terms of feasible connections (i.e. more than 1.5 hours connecting time [which is cutting it close] and fewer than 4-5 hours), United customers at present will have convenient connections to Belo Horizonte, Brasilia, Cascavel, Curitiba, Goiania, Porto Alegre, Rio de Janeiro (Santos Dumont), Salvador, and Vitoria. Feed for United’s northbound flights from GRU (Which all depart after 11:00 pm) is more expansive, adding Campo Grande (barely), Maringa, Navegantes, and Recife to the aforementioned destinations. But there are still enormous gaps, with suboptimal or nonexistent connectivity to Recife (unidirectional), Fortaleza, Belem, Florianopolis, Natal, and Foz de Iguacu amongst major Brazilian origin centers for US demand.

Theoretically Azul could re-time some of its GRU flights or add destinations, but given the scarcity of slots at GRU, an en-masse re-timing and/or the addition of new destinations could be difficult. When compared to Gol (who Delta code shares with and owns 3% of) with 109 daily departures to 31 domestic destinations (and 13 daily departures to 8 South American ones) or TAM (closely tied with American) with 90 daily departures to 25 domestic destinations (and 26 to 10 South American ones), Azul is clearly suboptimal for feed at GRU. Theoretically, United could add service to VCP. Campinas is an important and growing economic center in its own right, and the Sao Paulo metropolitan area increasingly resembles Tokyo, New York, or the Pearl River Delta in that is getting so spread out that multiple airports are more than justified by demand dispersal. Still, VCP is far less preferred by premium travelers than GRU or Congonhas in Central Sao Paulo, and that will work against United. Nonstops from VCP to Chicago O’Hare and Washington Dulles are absolutely out of the question. Houston and Newark would have a better shot at success, but so far the only US airport that has proven its ability to sustain a US airline flight to VCP is Miami for American Airlines.

At Rio de Janeiro’s Galaeo airport, Azul is a nonentity, with just 10 daily departures, mostly to VCP. Once again Gol (69 daily departures/23 domestic destinations) and TAM (46 departures/16 destinations) provide far better connectivity. United can of course layer Azul’s connectivity with that of its Star Alliance partner Avianca Brasil (a subsidiary of Colombia-based Avianca) in Rio (16 departures/9 destinations) and Sao Paulo (36 departures/14 destinations), but even so, United will be at a severe disadvantage when it comes to feed.

Image courtesy of JDL Multimedia

Image courtesy of JDL Multimedia

On the US side, United isn’t doing much for Azul either. Azul’s US operations are currently concentrated in South Florida, and both Fort Lauderdale and Orlando are spokes for United, with little connectivity beyond United’s hubs. And of course United is exiting the New York JFK market entirely, so they’re not much help there. One immediate fix would be for Azul to alter its New York plans to focus on United’s hub at Newark Liberty International Airport, where United offers a massive amount of connectivity (roughly 430 daily departures and close to 150 destinations). Newark might not be as preferred for New York travelers as JFK, but the feed should more than offset that.

JV Seems Imminent, Star Alliance Less So

The US-Brazil market will be liberalized through an Open Skies agreement beginning in October of this year, which would enable US and Brazilian carriers to secure antitrust immunity (ATI) for joint venture (JV) partnerships. Assuming alignment along current partnerships, United and Azul would be prime JV candidates, as would Delta/Gol and American/TAM, which would solve the network misalignment problems by allowing better coordination, planning, and marketing through a profit-sharing agreement. Service from United’s hubs to VCP would also be a lot more viable under a JV.

Whether Azul would join United in Star Alliance is less immediately clear. Azul founder David Neelman’s recent acquisition of Portuguese Star Alliance carrier TAP (who operates a massive long haul operation from Lisbon to Brazil and will open 10 new US routes as per Neelman’s announced plans) would point towards deepening ties for Azul and Star Alliance. The counter is that Star Alliance already has a major Brazilian presence in Avianca Brasil (admittedly a distant fourth in market share), and the history of two airlines from the same country co-existing in an alliance is mixed. It remains to be seen whether Azul will formally tie itself to Star Alliance, but United’s investment is unquestionably a step forward for the global alliance in the all-important Brazilian market.

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Contact the author at vinay.bhaskara@airwaysnews.com

 

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Analysis – The Battle For Seattle: Alaska vs. Delta – Part One

by Vinay Bhaskara / Published June 22, 2015

Delta and Alaska jets at Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

Delta and Alaska jets at Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

When Delta Air Lines announced its traffic results for May 2015 earlier this month, the 5.5% decrease in unit revenue (as measured by passenger revenue per available seat mile [PRASM]), it once again shined the spotlight, albeit indirectly, on Delta’s madcap dash to build a viable hub in the highly competitive Seattle market.

Delta has added dozens of new routes from Seattle over the last two years in its quest for connecting feed for its nonstop flights to Asia and relevance to Seattle-based customers. Once all of its announced routes are started, it will serve 47 nonstop destinations from the airport (33 domestic and 14 international). Overall, Delta’s capacity in Seattle is up 55% year over year (YOY) in terms of available seat miles (ASMs), and more in terms of seats (most of the recent expansion has been domestic or near international), and it’s not hard to draw at least a partial correlative relationship between that and the overarching PRASM weakness in the winter months.

Part of that is situational. Seattle probably makes money (or at least breaks even) in the summer, as with most US carrier hubs. Then again, in today’s US airline industry, everyone makes money in the summer. In fact, even TWA during the depths of the Carl Icahn Karabu era might have had a shot at breaking even in Summer 2015. But the winter months are a different story, and thanks to several different trends, Seattle’s inherent demand weakness in that period has been showing up clearly in the numbers. Asia’s macroeconomic weakness and the strength of the Dollar have combined with the cyclical demand weakness and low price of fuel emboldening Alaska to maintain capacity to drive down yields in the market. And because Seattle represents an ever-increasing share of Delta’s overall capacity (especially after drawing down Cincinnati, Memphis, and Tokyo Narita), these poor yields manifest in very public signals of PRASM decline

Every quarter on its earnings call, Delta tries to obscure this effect by referring to PRASM increases YOY in the Seattle market. This is a meaningless statistic, for two reasons. First and foremost, since there isn’t accurate publicly available data on Seattle PRASM (there is for O&D yields but that pre-dates most of the domestic buildup and ignores connections, which represent at least 50-60% of Seattle traffic, if not more), no one knows just how low of a base this “increase” is built on. Second, the capacity composition of Delta’s Seattle operation is continuously shifting towards shorter haul flying. This holds true for the overall hub because the long haul international flights were amongst Delta’s first major additions, but even if you isolate to domestic flying (Delta started with a bunch of flying from Seattle to hubs across the country like Detroit, Atlanta, and New York JFK), the recent addition of several west coast destinations has reduced the overall average stage length at the hub. For a variety of reasons, short haul flying has a higher PRASM than longer haul flying, and accordingly, Delta’s flights would have to be consistently less than half full for PRASM to actually decline after they added a bunch of these flights. All in all, Seattle’s effect on Delta’s revenues has been anything but pretty.

A desperate contest for O&D travelers

The strategic reasons for Delta’s buildup are well tread at this point: the need for a new Asian gateway given Narita’s long-term infeasibility, the inconsistency of feed from Alaska Airlines, etc. But a domestic buildup that started as targeted sources of feed for its East Asian flights has instead turned into an aggressive chase for Seattle origin and destination (O&D) customers, long the purview of partner turned rival Alaska Airlines and its subsidiaries. Delta has quickly realized that in today’s world, when airline investors are driven more by margins and ROIC than headline profits, it needs a viable standalone operation in Seattle. That means O&D passengers.

Jeremy Dwyer-Lindgren / AirwaysNews

Jeremy Dwyer-Lindgren / AirwaysNews

Delta’s latest route announcements are further proof of this axiom. Boston aside, many of its recent new routes offer little in the way of demand for travel to Asia or Europe, so they won’t serve the ostensible purpose of feeding Delta’s long-haul flights. Instead, they serve to increase Delta’s relevance to Seattle-based domestic travelers, the kind that would normally fly Horizon Air.

It’s a relatively low risk way of targeting additional O&D demand. Delta has already added most of the major markets in the Western US from Seattle. And rather than dedicating a narrow-body aircraft for four hours per leg to fly into competitive markets like Chicago or Washington DC, cities like Pasco and Victoria can provide incremental boosts in local revenue and traffic for a much lower trip and operating cost.

And this is crucial for Delta because Alaska is winning in Seattle. They’re not annihilating Delta by any means, and the battle is certainly taking a toll on the Eskimo (see Alaska’s PRASM figures for evidence of that). But Alaska is winning because it isn’t losing. Because by and large it has managed to maintain its share of domestic O&D traffic and avoided hemorrhaging revenue share. This is winning war in the guerrilla sense of the world, and while Delta has the flashy new destinations in Asia and Europe, Alaska has quietly expanded its reach in the Eastern half of the US.

Despite upbeat commentary (it’s not hard to record year over year gains in unit revenue when you start from a miniscule base) on every quarterly earnings call, for the moment, the only parts of the Seattle network that are clearly profitable are the hubs and London Heathrow. Paris, Tokyo, and Amsterdam probably break even during the summers. Everything else is a major work in progress. Unfortunately for Delta, domestic business traffic in Seattle is going to be a scale game. They don’t have the cost structure to substantially undercut Alaska in the long run so they have to compete on network. And despite Delta’s buildup, Alaska’s Seattle network blows Delta’s out of the water in terms of connectivity and scale (more on this in Part 3).

In Part 2 of this analysis, I take a look at the other big player in the Seattle market: Alaska Airlines

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United to Move from JFK Airport to Newark Hub in Delta Slot Swap

By Benét J. Wilson / Published June 16, 2015

United Airlines has decided to step away from the battle for dominance at New York’s JFK Airport. It is pulling up stakes and moving its p.s. premium trans-continental service to its hub at Newark-Liberty International Airport, effective Oct. 25, a move industry observer Mike Boyd of the Denver-based Boyd Group International applauds.

A United Airlines p.s. Boeing 757 taking off. Image: Courtesy of United

A United Airlines p.s. Boeing 757 taking off. Image: Courtesy of United

“This move is brilliant and makes a lot of sense for everyone,” said Boyd. “United has a hub in Newark and flights out of LaGuardia. It can go to its hub and leave others to fight at JFK.”

RELATED: The Transcon Wars: The Ultimate Airline Battleground

In this day and age, airlines want to dominate the bottom line not the world, said Boyd. “Why should United stay at JFK if American, JetBlue and Delta are fighting over it?” he asked. “United doesn’t need JFK now. They have everything covered in Newark.”

United's Terminal 6 at New York JFK. A terminal it has shared with British Airways since the 1970s. Image: Chris Sloan / AirwaysNews.com

United’s Terminal 6 at New York JFK. A terminal it has shared with British Airways since the 1970s.
Image: Chris Sloan / AirwaysNews.com

With the change, United says it will cement its role as the New York area’s trans-con flying, offering up to 17 daily round trips between Newark and San Francisco and up to 15 daily round trips between Newark and Los Angeles. The move will allow United to consolidate its operations at Newark, where, in 2014, it handled nearly 70 percent of the airport’s 35.6 million passengers.

RELATED: United and Houston Break Ground on New Terminal C-North

Overall, United offers nearly 500 daily flights out of the New York City region to more than 150 destinations around the world. It also operates 37 daily flights out of LaGuardia.

RELATED: United Highlights Changes Coming to Newark Airport’s Terminal C

United and Delta will switch their JFK and Newark slots, regulatory approval. United will also move several Boeing 757-200s flying on trans-Atlantic markets over to p.s. flights. At the same time, the airline will also add more 767s on trans-Atlantic flights.

Cover Image: Courtesy of United

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A “Quiet” Paris Air Show: Great for Attendees and Observers

By: John Walton / Published June 12, 2015

While the intelligence (and no little industry scuttlebutt) for this year’s Paris Air Show is that the event will be quieter than in previous years, there’s still plenty going on at Le Bourget.

What “quiet” really means is fewer of the massive aircraft orders we’ve seen in recent years — no hundred A320neo aircraft here, no two hundred 737 MAX there — not least because, with all the massive orders, delivery slots are far into the future. But that’s likely to mean that we see more current generation orders like Delta’s agreement to purchase 40 Boeing 737-900ER aircraft alongside 20 ex-Air Canada Embraer E190 regional jets as airframers seek to keep their current aircraft lines going even while they’re testing next-gen platforms like the 737 MAX and A320neo.

With these next-generation programs announced, and the shape of the next 15 years of the narrowbody and widebody market fairly clear now, it’s about incremental improvements to make both the aircraft and their cabin interiors more efficient. (Sorry, flyers: “efficient” means carving out an inch here and there that the airlines and interiors companies hope you won’t notice, like those new slimline seats, lavatories and galley areas.)

This year also features one of the best commercial flying display programs in recent memory, and what may be a great opportunity to delve deeper into the aviation industry.

Qatar's A350 will be on hand for a flying display

On offerings in the air: an exciting pair of dueling new-generation twinjets, as Qatar Airways is bringing an Airbus A350-900 for flying display, while Vietnam Airlines will fly a Boeing 787-9 Dreamliner resplendent in its new livery. If you think that’s “quiet”, tell that to the more than 300,000 people who have already watched Boeing’s 787-9 practice video:

Bombardier’s 135-seat CS300 will also perform in its first airshow, following its first flight this February. The Canadian airframer really needs some positive publicity for the CSeries, which is two years late and has picked up the “much-delayed” adjectival prefix. From a passenger experience perspective, the CSeries has some real benefits, but it’s understandable if airlines are reluctant to commit to being the next in line for a questionable delivery date when there are other options available.

The Bombardier CSeries CS300. Image: Courtesy of Seth Miller

The Bombardier CSeries CS300. Image: Courtesy of Seth Miller

RELATED: Bombardier CSeries CS300 Achieves First Flight

One of those other options is Embraer’s E2, the updated version of its popular 70-100 seater aircraft. Embraer will be demonstrating its new cabin, created in conjunction with design house Priestmangoode. Questions remain, however, about the extent to which the demonstrator cabin can look like the eventual product, especially in terms of the innovative tablet mounts, which may need to be refined for head impact testing purposes.

RELATED: Embraer Sees Success In North America With E175 and E2

RELATED: AirwaysNews High Flyer Interview: Luke Hawes of Priestmangoode

Bombardier is also bringing its CS100 for static display, painted into the livery of launch customer Swiss International Air Lines. Swiss has to be pleased that it will be getting some extra publicity for its new narrowbody, which it needs fairly quickly in order to refresh the smaller end of its European narrowbody fleet, much of which consists of aging BAe 146/Avro RJ aircraft. The CS100 is currently planned to be introduced into service in the first quarter of 2016.

Bombardier's CS100 is shining in its Swiss livery

Image: Bombardier

Airbus is also planning a flight display of the A400M military turboprop transport aircraft, despite a crash near its test site in Seville in March, reportedly resulting from a failure in the computer controls for three of the four engines.

There’ll also be an Airbus A380 on static display — will we see the much-derided 3-5-3 main deck seating configuration that débuted at the Aircraft Interiors Expo in Hamburg this April.

The Airbus-3-5-3 problem is in the window seat

Image: John Walton

Not currently expected: an A320neo, the next generation of Airbus narrowbodies, according to the WSJ, which suggests that the issue is with a component of the next-generation Pratt & Whitney PW1000G engine formerly known as the Geared Turbo Fan (GTF).

Airbus is also going futuristic, with its E-Fan 2.0 all-electric two-seater aircraft, a technology demonstrator that is still a large number of battery generations away from commercial flight use, but is likely to affect how this future tech develops. In the interim, the airframer may well have success with the two-seater and four-seater versions in general aviation settings.

Look also for a number of back-office announcements, particularly around MRO (Maintenance, Repair and Overhaul) facilities. There’s big money (and particularly big cost savings) to be had for western airlines in moving significant chunks of their maintenance to lower-cost sites, although public perception issues mean that big-name brands like Lufthansa Technik are reassuring for some passengers. Expect new operations in the Asia-Pacific region in particular.

The Internet of Things (IoT) buzzword will be thrown around a lot at Paris this year, and the media distribution list is already buzzing with companies hawking their wares. The large conglomerates who make their money selling networking systems that underpin the IoT would like airports to increase the amount of passenger tracking they do, but the question is whether these companies have realistic suggestions for flyers who have understandable and reasonable questions about how much privacy they will need to give up for a coupon for a discount in Starbucks or Auntie Anne’s Pretzels.

Another part of the IoT puzzle is aircraft e-enablement, which (as ever with something prefixed by a “e-”), sounds like it’s from the 1990s, but really means connecting increasing parts of the aircraft to each other and to networks so they can be monitored and adjusted remotely. Just as the IoT hasn’t had everyone running out to buy a Nest thermostat or fridge that emails you or automatically orders more milk, the aviation IoT is still in its infancy. We may well see a number of new products and integrated systems that promise a bit of growth.

AirwaysNews will, of course, have staff on the ground at the Paris Air Show — follow us on Twitter and check out our Facebook page for all the latest.

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American, Qantas Expand Trans-Pacific Operations

By Seth Miller / Published June 10, 2015

American Air CEO Doug Parker and Qantas CEO Alan Joyce at a press conference announcing new trans-Pacific service. Image: Courtesy of Roberto Leiro

American Air CEO Doug Parker and Qantas CEO Alan Joyce at a press conference announcing new trans-Pacific service. Image: Courtesy of Roberto Leiro

MIAMI — Oneworld partners American Airlines and Qantas used the closing of this year’s IATA Annual General Meeting as an opportunity to announce a significant expansion of the pair’s trans-Pacific service.

American Airlines is returning to Australia after a decades-long absence, launching service on the competitive Los Angeles-Sydney route in December 2015 with a Boeing 777-300ER. Qantas will also be adding service, restoring its Sydney-San Francisco route. The new services will see a transition of the partnership between the two carriers. The four-year-old joint venture will, pending government approval, become a route revenue-share agreement, a move which takes into account the fact that American Airlines will now be operating some of the flights.

The announcement of new trans-Pacific service via American Airlines and Qantas. Image: Courtesy of Roberto Leiro

The announcement of new trans-Pacific service via American Airlines and Qantas. Image: Courtesy of Roberto Leiro

For American Airlines, this is a significant expansion into a market that has long been lacking. CEO Doug Parker acknowledged as much in the statement announcing the new service. “Our customers have asked us to expand to important business destinations across the Pacific, and flying our flagship aircraft, the Boeing 777-300ER, to Sydney will provide another world-class travel experience from our key gateway at LAX,” he said in the statement.

An American Airlines timetable covering the inauguration of its first overseas routes in 1970, 707 service to the South Pacific. Image: Courtesy of AirwaysNews

An American Airlines timetable covering the inauguration of its first overseas routes in 1970, 707 service to the South Pacific. Image: Courtesy of AirwaysNews

Qantas will reduce its five weekly Boeing 747 frequencies into Los Angeles from Australia — four from Sydney and one from Brisbane. These reductions will be used to free up the aircraft to work the Sydney-San Francisco route. In total, the pair will have eight additional weekly flights across the Pacific once the full schedule is implemented.

This sort of coordination in capacity and service is the goal of the joint ventures and key to their financial success. By working together on capacity planning and pricing, the two carriers can ensure that growth such as this occurs in a measured and profitable manner. And in the LA-Sydney market, where there is already significant capacity and many competitors, such measured growth is critical to profitable expansion.

American Airlines previously served Australia with flights via Hawaii, but that service has not operated in decades. Adding it back to the route map is a bit of a prestige move for what is now the world’s largest airline. It is also the first of what are expected to be several moves by the company to expand service across the Pacific Ocean from the Los Angeles hub, a move Parker has previously alluded to.

For Qantas the return to northern California fills a void created in 2011 when the Sydney-based carrier cut the route amidst a soft economy and financial instability for the carrier in general. It also coincided with the launch of the joint-venture relationship which has helped to stabilize traffic and yields for the two carriers and grow back into the market.

Cover Image: Courtesy of JDLMultimedia

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Is Seattle Is Under Attack?

By Seth Miller / Published June 9, 2015

Alaska Airlines CEO Brad Tilden. Image: Courtesy of Alaska Airlines

Alaska Airlines CEO Brad Tilden. Image: Courtesy of Alaska Airlines

MIAMI — When Alaska Airlines CEO Bradley Tilden sat down on the CEO panel for the 2015 IATA Annual General Meeting it is likely he knew something about his company’s viability was likely to be a topic. And the discussion’s moderator, CNN’s Richard Quest, is rarely one to shy away from probing statements or questions, so perhaps such a bold statement was to be expected. Still, the phrase “under attack” is not one commonly used in the industry. If there truly is an attack on-going it seems that Tilden is unconcerned.

RELATED: Alaska Grows in Seattle

Tilden acknowledges that the competitive landscape is changing but feels that his company is built to survive and even thrive with such challenges. Among the advantages Tilden sees is his company’s history operating in a market with significant cost pressures and very competitive fares. “We’re a west coast airline and fares on the west coast of the United States have always been among the lowest in the world, so we’ve always had a low-cost structure,” he said.

RELATED: Delta Launches Seattle-Hong Kong, and Seattle Hub

Delta and Alaska jets at Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

Delta and Alaska jets at Seattle-Tacoma International Airport. Photo: Jeremy Dwyer-Lindgren / AirwaysNews

It is not all about costs. In fact, Tilden suggests that fares are only a very small portion of the company’s plan for success. Alaska Air intends to be competitive on price, but there are other factors it considers to be at least as important if not marginally more so, he said.

“We’ve got a low-cost structure and we do offer low fares, but we also have got a big focus on on-time performance, we have a big focus on customer service,”  said Tilden. “Our belief is that if you operate safely, operate on time, give people great service and do it for a fare which works we’re going to have a future.”

As for the target customer market for the carrier, Tilden sees quality over quantity. “‘Bleisure’ is a word people use sometimes, the business market plus high-quality leisure [passengers].”

RELATED: Battle for Seattle Airport Continues As Delta Adds New Flights

Reliability is a noble goal and it is something which has worked for Alaska Airlines in the past as a differentiator. But Delta Air Lines has a similar focus these days, offering spectacular operational numbers and matching some of Alaska Airlines’ promotions and customer-focused actions like checked baggage delivery guarantees.

Alaska Airlines may be “doing just fine” as Tilden expressed, but that does not mean there is no attack there. And the outcome of the battle will likely not be known for some time.

Cover Image: Courtesy of Jeremy Dwyer-Lindgren / AirwaysNews

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American Airlines to Bring Its A321s to Hawaii

By Seth Miller / Published May 26, 2015

Virgin America will not be the first airline operating narrow-body Airbus jets to Hawaii. American Airlines intends to phase out its 757-200s on some Hawaii routes starting in August of this year, replacing them with its 2-cabin A321 layout. The A321s will have sharklets to increase range but are expected to still fly with weight restrictions in some cases, possibly due to shorter runways on a couple of the islands. These A321s will be a subfleet of the company’s rapidly expanding A321 operation with ETOPS certification to allow the long, overwater flights.146815-MSN-5834-American-Airlines

While American currently operates as many as 10 daily 757-200 flights from Los Angeles to the islands those are expected to be fully shifted to the A321 by the end of 2015. The 757-200s currently flying from Los Angeles will move to Phoenix where they will replace the older 757-200s currently operated by the US Airways subsidiary on the route. There are eight 757s in the US fleet which date back to the 1995-1999 era, the oldest in the combined AA fleet. These aircraft are expected to be retired as part of the move. Much like how United Airlines is retiring its oldest 757s from operation this move by American Airlines will create a more efficient and reliable operation, assuming the ETOPS certification works out.

Getting to ETOPs with the A321s should be easier for American than for Virgin America given the former’s experience with such processes on its existing fleets. Establishing a small ETOPS fleet goes counter to the efficiencies typically desired for operations but it is a necessary move in this situation in order to allow for the retirement of the older 757s. And American’s need for ETOPS-certified narrow-body aircraft is rather limited. Most of the longer over-water routes are operated by wide-body aircraft or the international configuration 757-200s. A few additional over-water routes exist which the A321s could serve but they do not require the full ETOPS levels of equipage which the Hawaii routes call for.

It should be noted that these deliveries are the “ceo” classic engine option. While the range is increased with the sharklets installed they do not have the newer engines and other improvements of the “neo” models. Moreover, they are not the long-range neo model with Airbus recently announced as a potential replacement for the 757-200s which serve intercontinental routes. American may do well to convert some of its future A321 deliveries to the LR version to take over flights from Phoenix to the islands eventually as the 757 fleet ages further but no firm progress has been announced in that direction yet.

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JetBlue CEO Meets With Cuban Officials

By Benjamin Bearup / Published April 20, 2015

On Monday, JetBlue’s President and CEO, Robin Hayes, was joined by many private sector and political leaders from New York on the “I Heart Blue York” logo jet for a special state trade mission flight to Havana, Cuba to discuss economic and political relations.

New York Governor Andrew Cuomo and JetBlue CEO Robin Hayes enter "I Heart Blue York" Photo Courtesy: Andrew Cuomo

New York Governor Andrew Cuomo and JetBlue CEO Robin Hayes enter “I Heart Blue York”  Photo Courtesy: Andrew Cuomo

This trip marked the first time that a current U.S. governor has visited Cuba since the recent thawing of relations began earlier this year.

A JetBlue spokesperson said in a statement to Airways News that “As New York’s hometown airline, we are pleased to participate in the nation’s first state trade mission to Cuba since the President began the process to normalize diplomatic relations, and we applaud the Governor’s effort to develop opportunities for New York companies there.”

JetBlue is one of six U.S. airlines with rights to operate special charter flights to Cuba. It flew its first charter flight to Havana from Ft. Lauderdale on September 17th, 2011 with additional frequencies added over the years. Currently, it also serves Havana and Santa Clara, Cuba from Tampa Bay, and it continues to fly between Ft. Lauderdale and Havana.

Once it is permitted for airlines to operate regularly scheduled air service between the two countries, the airline has big plans for the Cuba market, but it would not disclose its exact plans. However, the spokesperson did explain that “Cuba will one day play an important role in our overall Caribbean network, where we are the leading U.S. airline. Our focus cities in New York and Florida are natural gateways to Havana and other Cuban destinations from many of our existing cities. We have already built valuable experience operating in Cuba since 2011 with our successful charter program, and are interested in providing scheduled service from multiple U.S. cities as soon as legally permitted.”

By participating in the state trade mission, there could be many advantages for JetBlue; it could give Jetblue a jumpstart on negotiations with airport officials in Cuba when it comes to slots and real estate once it becomes legal to operate regularly scheduled service, despite the potential heavy government regulations that many analysts expect.

It is also worthwhile to note that JetBlue hinted that it is interested in offering service to multiple destinations throughout Cuba. In addition to Havana, the airline could start flights to:

  • Abel Santamaría Airport serving Santa Clara, Juan
  • Gualberto Gómez Airport serving the Matanzas province
  • Frank País Airport serving the city of Holguín
  • Jardines del Rey Airport serving the Ciego de Ávila Province
  • Ignacio Agramonte International Airport serving Camagüey Province
  • Antonio Maceo Airport serving Santiago.

All of the airports listed above currently receive regularly scheduled or seasonal service from airlines serving Canada and Europe.

The United States and Cuba market will be extremely competitive that could be filled with an incredible amount of untapped potential. With the visit of JetBlue CEO Robin Hayes, JetBlue is positioning itself to spearhead efforts to legalize flights between to Cuba in the coming year(s). What is exactly being discussed in these meetings we will never know. But we can reasonably say that JetBlue will be ready for the day that flights to Cuba are legalized and that JetBlue will position itself for a large chunk of the US-Cuba market.

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Delta Holds on to Haneda Slots

By Seth Miller / Published March 30, 2015

Delta Air Lines fended off challenges from American Airlines and Hawaiian Airlines to maintain its Seattle – Tokyo-Haneda route authority, but the win comes with tremendously strict rules governing the operation.new-york-jfk-terminal-4-ramp-2011_15982

Last year, American challenged Delta’s holding of the limited route authority, claiming that the Atlanta-based carrier was not operating in a manner which was best suited to passenger needs while Delta claimed full compliance with US Department of Transportation rules. At issue was the number of flights which must operate during a 90 day period so as to not have the route considered dormant. Delta’s operating schedule for the Winter 2014-2015 season had the route scaled back significantly but still meeting the letter of the law with regard to flight frequencies.

Last week’s ruling allows Delta to continue operating the flight but also requires daily service without exception. And the DoT is watching closely.

Any failure, without a Department-granted waiver, to perform a Seattle-Haneda flight, and any failure, without a Department-granted waiver, to perform a Haneda-Seattle flight, on each and every day of every week (7 days a week, 365 days a year), will constitute a violation of Delta’s Seattle-Haneda authority subject to enforcement.

Any failure, without a Department-granted waiver, to perform Seattle-Haneda flights, and any failure, without a Department-granted waiver, to perform Haneda-Seattle flights, on two days of any seven-day period (365 days a year) will constitute a default of Delta’s Seattle-Haneda authority and that authority will automatically expire.

American gave up its Haneda slot in 2013; the carrier had previously operated from New York’s JFK airport. That operating authority is now used by United Airlines for service from San Francisco. American hoped to take over the Delta slot to begin service between Los Angeles and Haneda. Hawaiian Airlines applied to provide service from Kona. American’s application was deemed the runner up in the DoT ruling; should Delta’s operations falter American will receive the Haneda slot. By requiring daily service without a break the DoT has shifted the rules traditionally used to determine dormancy to a very high standard.

Read More: US DOT Evaluating Future of Delta’s Seattle/Tokyo Haneda Slots

While it is unlikely that Delta will be deemed in violation should weather or mechanical issues arise which prevent flight operations on specific dates, the ruling leaves the carrier closely scrutinized but the DoT for this route, much more than any route in the past. This is not the first time Delta has seen challenges with Haneda operations. Previously, the carrier had a route authority assigned to the Detroit-Haneda route but shifted it to the Seattle market in 2014. Even there, with better flight times, demand was soft and Delta cut the winter schedule to save cash.

Responding to the tentative ruling in its favor Delta affirmed its position that future operations will be year-round:

Earlier this month, Delta resumed its nonstop service between Seattle and Haneda after a temporary seasonal suspension. Delta will operate year-round, nonstop flights between Seattle and Haneda as we continue to grow Delta’s international gateway at Seattle-Tacoma International Airport.

Hawaiian Airlines CEO Mark Dunkerley’s response to the ruling was rather aggressive, notable more for the disappointment that American was selected as the second place finisher than for Delta winning the slot:

Hawaiian is the only airline to have operated Haneda service continuously and successfully since the slot rights were granted. Our proposal provided more seats and would have resulted in more travelers flying between Japan and the United States than either Delta’s or American’s proposal. Kona is the largest unserved market in this proceeding, and Hawaiian’s proposed route would have generated more economic benefit than that offered by either Delta or American. None of these facts are in dispute by the DOT.

Sadly, by dismissing Hawaiian’s proposed Kona route as just simply being additive to the routes already serving Hawaii, the DOT has once more failed to appreciate the geography of the 50th state. Kona and Honolulu are separate markets, separate communities and indeed are located on separate islands. The tentative ruling also reveals a long-held institutional bias among decision makers favoring the interests of U.S. business travelers over those of U.S. travel-related businesses and travelers in general.

This ruling is subject to objections from affected carriers received by 6 April.

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PHOTO SLIDESHOW: A Visit over the Seattle Museum of Flight

Story and Photos By Brandon Farris / Published March 12, 2015

SEATTLE, WASHINGTON: After the Museum of Flight shifted its air park across the street to a temporary home while they are building a new indoor facility for the aircraft, AirwaysNews went up to get a birds eye view of the new temporary home for the aircraft along with a special flight over the flight line at Boeing Field that was featured in a previous photo gallery.

EXTRA: PHOTO SLIDESHOW: AirwaysNews Explores Boeing’s Renton Plant

Located just south of downtown Seattle and to the left of Runway 31L at Boeing Field, the museum is the only one in the world to feature both a 787 and Concorde, along with the first-ever produced 747 that received a much need face lift of new paint.

EXTRA: Museum of Flight Welcomes Boeing 787 to Collection

Also with the frequent Boeing 737 test flights, when they are flowing runway 31 provides a great photo opportunity to get those brand new aircraft.

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FAA Updates Runway Safety Area Efforts at Airports

By Benét J. Wilson / Published March 11, 2015

Despite a Delta Air Lines MD-88 jet sliding off the runway at LaGuardia Airport last week, the FAA and airports have worked together to improve runway safety areas (RSAs). FAA recently released a fact sheet outlining what has been done and what will be done by the end of 2015.

An EMAS system under construction. Image: Courtesy of the FAA

An EMAS system under construction. Image: Courtesy of the FAA

Patrick Smith is an airline pilot and the host of www.askthepilot.com.  He is also the author of the New York Times best selling book “Cockpit Confidential.”

Although Smith declined to discuss any specific airline incidents, he did say that despite having twice as many planes flying today than 25 years ago, there has been a marked decrease in non-fatal runway incidents, thanks to aircraft and runway technology, along with better pilot training.

EXTRA: Building A Better LaGuardia

“We’ve managed to engineer away the most common causes of accidents,” said Smith. “These runway incidents are one of the few things left, so they tend to get a lot of media attention and they stick in the public’s consciousness.”

According to the FAA, a RSA is typically 500 feet wide and extends 1,000 feet beyond each end of the runway. It provides a graded area in the event that an aircraft overruns, undershoots, or veers off the side of the runway. EMAS uses crushable material placed at the end of a runway to stop an aircraft that overruns the runway. The tires of the aircraft sink into the lightweight material and the aircraft is decelerated as it rolls through the material.

But many commercial airports were built before the current 1,000-foot RSA standard was adopted approximately 20 years ago. In some cases, it is not practicable to achieve the full standard RSA because there may be a lack of available land or obstacles including bodies of water, highways, railroads and populated areas or severe drop-off of terrain.

There are two companies authorized by the FAA to install EMAS systems:

Engineered Arresting Systems Corporation (ESCO) of Logan Township, New Jersey, and Runway Safe of Linkoping, Sweden. ESCO’s EMASMA arrestor beds are composed of blocks of lightweight, crushable cellular cement material designed to safely stop airplanes that overshoot runways. Runway Safe EMAS used a foamed silica bed made from recycled glass and is contained within a high-strength plastic mesh system anchored to the pavement at the end of the runway.

“If an aircraft runs into this, it crushes and grabs the landing gear and slows it down,” said Smith. “It’s like driving a car into the sand.”

Airlines have placed a bigger emphasis on training pilots for runway incursions and excursions, said Smith. “There’s also a heightened awareness of flying into high-density airports,” he said. “Aircraft today have advanced braking systems, but ultimately it’s all about human factors with runway issues.

“My carrier has put a lot of emphasis on landing on icy, wet and snowy runways so crews know what to do and what criteria to use to determine whether a takeoff or landing is safe,” said Smith. “I don’t think that emphasis was as prevalent years ago.”

RSA Upgrade

Back in 2005, the FAA’s Office of Airports prepared an RSA improvement plan for the runways at approximately 575 commercial airports. Of the approximately 1,000 RSAs at these airports, an estimated 67 percent have been improved to full standards, and an estimated 96 percent have been improved to the extent practicable, not including the relocation of FAA-owned navigational equipment.

To date, there have been nine incidents where ESCO’s EMAS has safely stopped nine overrunning aircraft with a total of 243 crew and passengers aboard those flights, said the FAA.

Currently, ESCO’s EMAS is installed at 82 runway ends at 53 U.S. airports, with plans to install 15 EMAS systems at 12 more. This includes LaGuardia, which has two systems, installed in 2005 and 2014.  Runway Safe is installed on one runway at Chicago Midway Airport, with plans to add three more systems before the end of the year.

Cover Image: Courtesy of NTSB

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Could Perimeter Exceptions at Reagan National Foreshadow LaGuardia’s Future?

By Benét J. Wilson / Published February 26, 2015

Rush hour at LaGuardia Airport. Photo: AirwaysNews

Rush hour at LaGuardia Airport. Photo: AirwaysNews

As the Wall Street Journal reports on possible exemptions to the 1,500-mile perimeter cap out of LaGuardia Airport, AirwaysNews looks back at what happened when exceptions were put in place at Ronald Reagan National Airport, which has its own 1,250-mile perimeter rule. Exemptions out of LaGuardia could allow for direct flights to Los Angeles and San Francisco.

 

Since May 1966, a perimeter rule has been in place at Reagan National
restricting airlines from operating nonstop flights to airports beyond 650-mile perimeter, with an exception for seven cities between 650 and 1,000 miles away. The rule was originally put in place by the FAA, which cited jet noise concerns over Washington, D.C., and a potential conflict at the then-new Washington Dulles International Airport.

In 1986, Congress transferred authority over Reagan National and Dulles from the federal government to the Metropolitan Washington Airports Authority (MWAA). It also expanded the perimeter at 1,250 miles, which allowed nonstop flights to Houston and Dallas.

Ronald Reagan Washington National Airport. Photo: AirwaysNews

Ronald Reagan Washington National Airport. Photo: AirwaysNews

In 1999, thanks to the efforts of Sen. John McCain (R-Ariz), the FAA reauthorization bill included language that allocated 12 roundtrip slots for flights outside the 1,250-mile perimeter. The slots eventually benefitted McCain’s hometown airline, America West, which ended up offering three flights a day out of Reagan starting in 2004.

Six years later, in July 2005, McCain introduced a bill that would have gotten rid of perimeter restrictions at Reagan and prevented enforcement of the perimeter rule at LaGuardia. The bill failed, but McCain brought it back four years later, where it also failed.

Under the FAA Modernization and Reform Act of 2012, signed by President Obama on Feb. 14, 2012, eight daily slot exemptions (four roundtrips) at Reagan National were created for airlines with little or no service at the airport to serve cities farther than 1,250-mile perimeter.  from Washington. Since Congress first created slot exemptions at Reagan in 2000, DOT has added exemptions for 20 new roundtrip flights.

The Future of LaGuardia

Howard Mann, a vice president at Campbell-Hill Aviation Group, an air service consultancy in Alexandria, Virginia, sees the Port Authority of New York and New Jersey studying possible exceptions for flights to Los Angeles and San Francisco as natural. “The timing could be political to pave the way for a deal with airlines and other stakeholders,” he said. “But there certainly is interest in the proposal. And because the port manages all three New York area airports, they will have to analyze how what happens at LaGuardia will impact the other two facilities.”

Flights to Los Angeles and San Francisco are attractive because they are the largest source of O&D traffic for business and leisure travelers, said Mann. “But there are also other markets of interest out of LaGuardia, like Seattle, Las Vegas, San Diego and Phoenix,” he said. “A similar expansion happened at Reagan National under the perimeter rule. Any airline that is already at LaGuardia and maintains a national network would certainly be interested in service beyond the perimeter.”

The approach onto LaGuardia Airport Runway 13/31. Photo: AirwaysNews

The approach onto LaGuardia Airport Runway 13/31. Photo: AirwaysNews

Reports say that the port would do its study on longer-range flights out of LaGuardia in a fair and transparent manner, said Mann. “I think the Port Authority will always be required to do what it can to ensure the future of aviation in the largest O&D market in the country,” he said.

The port will look at everything from slots, to new facilities, to studying runway capacity, said Mann. “These are all things they should do, as the agency tasked with looking at the future of aviation in New York.” he said. “It needs to look at service to different communities and what airlines can expect in the short and long term.”

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By the Numbers: Airlines and the Winter Storms of 2015

By Benjamin Bearup / Published February 23, 2015

As U.S. carriers dig out from this weekend’s Winter Storm Pandora, AirwaysNews looks back at the thousands of cancelled flights across the country this winter and how the airlines managed operations during brutal conditions during what has shaped up to be a challenging storm season.

Two months into 2015 have brought several major winter storms. While severe winter storms, such as Marcus and Octavia in February, each caused major delays across the east coast of the United States, Winter Storms Linus and Juno each crippled much of the Eastern seaboard, causing tens of millions in economic impact on airlines.

Winter Storm Octavia brought snow and ice across the Midwest and into the Southeast. Major U.S. airports, including Memphis and Charlotte, were affected, with hundreds of flights cancelled. This storm took a more southern path and hit airports that are usually not accustomed to severe winter weather. For this reason, large delays and cancelled flights were forced as proper equipment for treating airfields and aircraft often was not available to meet demand.

Winter Storm Juno hit the Northeast hard in late January. This monster dropped more than two feet of snow in Boston and forced the cancellation of more than 8,900 flights,. In turn, the storm affected more than 700,00 passengers, costing them upwards of $350 million.

Chart: Courtesy of masFlight

Chart: Courtesy of masFlight

According to data and analytics firm masFlight, in 2015 alone, U.S. airlines have cancelled more than 28,800 flights due to severe winter weather. The flying public has lost an estimated $1 billion in out-of-pocket expenses and lost productivity as a result of cancelled flights. So far, two million passengers across the country have had their travel plans disrupted due to winter storms.

“So far, the cancellation impact of the 2015 winter season is trending slightly higher than what we are used to seeing during this time of year,” according to Edmund Otubuah, managing director at masFlight.  “I think this really highlights how brutal the 2014 winter season was to airline operations, where the U.S. airlines cancelled over 42,300 flights during the same period.”

A JetBlue Airbus A320 at JFK Airport. Photo: Benet J. Wilson / AirwaysNews

A JetBlue Airbus A320 at JFK Airport. Photo: Benet J. Wilson / AirwaysNews

The Northeast has been the hardest-hit region in 2015. Major airports such as New York LaGuardia, New York JFK, Newark, Boston and Philadelphia have all seen major flight cancellations and delays.

Jetblue Airways, which operates its only hub at New York JFK and its largest focus city at Boston Logan, has been the heaviest-hit airline this winter. The cancellation rate during this time reached an astounding 11.5 percent. American Airlines/US Airways, with hubs in Philadelphia and New York JFK, had a cancelation rate of 6.9 percent. United Airlines, with its large Newark hub, rounded out the top three with a 6.3 percent cancellation rate.

Airlines across the country helped the more than two million travelers by waiving change fees on impacted routes during a short time frame. Nearly all domestic U.S. carriers operating in the Northeast region offered impacted passengers support in varying degrees.

One such carrier is Southwest Airlines who allowed impacted customers a one-time change in their itinerary and no fee. This only applied as long as passengers flew within 14 days of their original flight and to the same city pairs. “Safety is our number one priority. If it’s not safe to fly, we won’t fly. We are working with Customers to reaccommodate them on different flights,” said spokesman Dan Landson. “We are also keeping everyone updated with a travel advisory that’s being updated as needed at Southwest.com. We encourage customers to visit the travel advisory for details and reaccommodation policies.”

With more than two million passengers impacted and nearly 30,000 flights cancelled so far, the winter of 2015 continues to challenge airlines and passengers across the country.

Cover Image: Courtesy of BWI Airport

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JetBlue Will Land in Daytona Beach In 2016

By Jack Harty / Published February 13, 2015

Photo: AirwaysNews

Photo: AirwaysNews

DAYTONA BEACH, Florida: JetBlue Airways will launch daily flights between Daytona Beach, Florida, and New York JFK Airport with an Airbus A320 starting in February 2016. Daytona will become JetBlue’s eighth destination in Florida and the city’s only nonstop service to New York.

JetBlue’s announcement is a big sigh of relief and a celebration for Volusia County, which has been trying to recruit the carrier for several years. There have been dozens of face-to-face visits between airline officials, airport staff and local business leaders, and 30 local business have pledged guarantees of $250,000 in pre-paid airline tickets for the first year of service in a travel bank managed by the Daytona Regional Chamber of Commerce.

The airport is offering an incentive of $400,000 in advertising, with the costs shared by the airport, the Daytona Beach Convention and Visitors Bureau, the Southeast Volusia Advertising Authority and the West Volusia Advertising Authority.

Other New York City Attempts

Although this will be Daytona’s only nonstop service to New York City, it will not be the first time that an airline has attempted to serve the market. Continental Airlines offered daily nonstop flights between Daytona Beach and Newark for close to 18 years, but the airline cut the flights when the 2008 recession occurred.  AirTran AIrways launched daily service to New York JFK AIrport in March 2008, but eventually ended it.

Delta Air Lines attempted to fly Saturday-only seasonal flights between New York LaGuardia and Daytona Beach with an Embraer E170/175 when it was first known that the airport and JetBlue entered talks about possibly starting flights. Unfortunately for Delta and the airport, it was difficult to make the flights work, and the service was subsequently cancelled.

A Sigh of Relief

“This is great news for this community and our airport. This is the result of the community’s support that County Council has received to recruit JetBlue as an important new business partner at Daytona Beach International Airport,” said Jim Dinneen, Volusia’s county manager in a press release.

Image: Courtesy JDL Multimedia

Image: Courtesy JDL Multimedia

“We couldn’t be more excited to launch yet another route that shows our deep commitment to Central Florida,” said Scott Laurence, JetBlue’s senior vice president of airline planning in the release. “We also have a long-standing relationship with Embry-Riddle Aeronautical University and are pleased to give the academic community there a new option for travel.”

The new service to Daytona Beach will create a direct link between JetBlue’s hub in New York and Embry-Riddle Aeronautical University. In 2007, JetBlue partnered with Embry-Riddle to launch the University Gateway Program, a unique opportunity that creates a path to a career with the airline for aspiring aviators.

“This new route will provide a much needed service for our growing community and strengthen an already great relationship between Embry-Riddle and JetBlue,” said Dr. John P. Johnson, president of Embry-Riddle in a statement.

The airport is currently served by Delta and US Airways/American Airlines. Will JetBlue be able to survive on the route? Many are optimistic. Plus, JetBlue will inaugurate flights just before the Daytona 500 and the spring break season.

Cover image: Courtesy of JDL Multimedia

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Contact the author at Jack.Harty@AirwaysNews.com

Contact the editor at Benet.Wison@AirwaysNews.com

JetBlue Airways (NASDAQ: JBLU), New York’s Hometown Airline™, will launch a new route to Florida’s Daytona Beach International Airport (DAB) in February 2016. The airline will offer daily service from its home at John F. Kennedy International Airport’s (JFK) Terminal 5 — providing the Daytona Beach area with its only nonstop service to New York City. Daytona Beach will be JetBlue’s eighth in the Sunshine State. Tickets will be available for sale closer to launch date.

“This is great news for this community and our airport. This is the result of the community’s support that County Council has received to recruit JetBlue as an important new business partner at Daytona Beach International Airport,” said Jim Dinneen, Volusia County Manager.

“We couldn’t be more excited to launch yet another route that shows our deep commitment to Central Florida,” said Scott Laurence, JetBlue’s Senior Vice President of Airline Planning. “We also have a long-standing relationship with Embry-Riddle Aeronautical University and are pleased to give the academic community there a new option for travel.”

The new service to Daytona Beach will create a direct link between JetBlue’s main base of operations in New York and Embry-Riddle Aeronautical University, the world’s largest, fully accredited university specializing in aviation and aerospace. In 2007, JetBlue partnered with Embry-Riddle to launch the University Gateway Program, a unique opportunity that creates a path to a career with the airline for aspiring aviators.

“This new route will provide a much needed service for our growing community and strengthen an already great relationship between Embry-Riddle and JetBlue,” said Dr. John P. Johnson, President of Embry-Riddle.

JetBlue’s flights to Daytona Beach will be operated on a 150-seat Airbus A320 — the largest aircraft to serve the airport on a regular basis — and will offer the airline’s award-winning service featuring assigned and comfortable seating; complimentary and unlimited name-brand snacks; more than 100 channels of free SIRIUSXM® radio programming and 36 channels of free, live DIRECTV® programming on personal seatback televisions; and the most legroom in coach. (a)

Customers traveling between Daytona Beach and New York can enjoy onward connections to several cities in the Northeast with JetBlue as well as cities across the globe through JetBlue’s three-dozen international airline partners.

- See more at: http://otp.investis.com/clients/us/jetblue_airways/usn/usnews-story.aspx?cid=981&newsid=28632#sthash.JIecwbd6.dpuf

JetBlue Airways (NASDAQ: JBLU), New York’s Hometown Airline™, will launch a new route to Florida’s Daytona Beach International Airport (DAB) in February 2016. The airline will offer daily service from its home at John F. Kennedy International Airport’s (JFK) Terminal 5 — providing the Daytona Beach area with its only nonstop service to New York City. Daytona Beach will be JetBlue’s eighth in the Sunshine State. Tickets will be available for sale closer to launch date.

“This is great news for this community and our airport. This is the result of the community’s support that County Council has received to recruit JetBlue as an important new business partner at Daytona Beach International Airport,” said Jim Dinneen, Volusia County Manager.

“We couldn’t be more excited to launch yet another route that shows our deep commitment to Central Florida,” said Scott Laurence, JetBlue’s Senior Vice President of Airline Planning. “We also have a long-standing relationship with Embry-Riddle Aeronautical University and are pleased to give the academic community there a new option for travel.”

The new service to Daytona Beach will create a direct link between JetBlue’s main base of operations in New York and Embry-Riddle Aeronautical University, the world’s largest, fully accredited university specializing in aviation and aerospace. In 2007, JetBlue partnered with Embry-Riddle to launch the University Gateway Program, a unique opportunity that creates a path to a career with the airline for aspiring aviators.

“This new route will provide a much needed service for our growing community and strengthen an already great relationship between Embry-Riddle and JetBlue,” said Dr. John P. Johnson, President of Embry-Riddle.

JetBlue’s flights to Daytona Beach will be operated on a 150-seat Airbus A320 — the largest aircraft to serve the airport on a regular basis — and will offer the airline’s award-winning service featuring assigned and comfortable seating; complimentary and unlimited name-brand snacks; more than 100 channels of free SIRIUSXM® radio programming and 36 channels of free, live DIRECTV® programming on personal seatback televisions; and the most legroom in coach. (a)

Customers traveling between Daytona Beach and New York can enjoy onward connections to several cities in the Northeast with JetBlue as well as cities across the globe through JetBlue’s three-dozen international airline partners.

- See more at: http://otp.investis.com/clients/us/jetblue_airways/usn/usnews-story.aspx?cid=981&newsid=28632#sthash.JIecwbd6.dpuf

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Industry Leaders Share Passenger Experience Trends for 2015

By Benét J. Wilson / Published January 28, 2015

The passenger experience was a hot topic in 2014 as airlines and airports worked to make the travel process better. But despite these efforts, industry observers interviewed by AirwaysNews feel there is still more work to be done and offered up trends they expect to see in 2015 and beyond.

EXTRA: AirwaysNews High Flyer Interview: Luke Hawes of Priestmangoode

Craig Stark is AirGate Solutions’ managing partner and Robert Cook is a co-founder and member of the advisory board of AirGate Solutions. Stark said he and Cook got together to look at strategies in vertical industries like travel. “We saw a need for data analytics and data in support of the passenger experience,” he said.

The main cabin of American Airlines' Airbus A321. Photo: Chris Sloan / AirwaysNews

The main cabin of American Airlines’ Airbus A321. Photo: Chris Sloan / AirwaysNews

One trend is passengers are still being herded despite initiatives like IATA’s Fast Travel to simplify passenger travel, said Cook. “The primary focus is to get to the gate in the least amount of time, but there’s been no change on how to facilitate the process and make it easier for passengers,” he said. “There’s a disconnect between airlines and airports, because airlines don’t give enough information to airports to help passengers to the gate. I hope they will cooperate eventually.”

EXTRA: Use of Beacons to Improve the Passenger Experience Grows

Another trend noticed by Cook is that airline loyalty program are becoming less valuable and less positive. “You see people having trouble redeeming travel awards, you see points being devalued and airlines moving toward how much you spend rather than how much you travel,” he said. “And there will be an increased focus on the top five percent of travelers, who will continue to get perks like early boarding and free checked bags.”

But the industry can improve the passenger experience by helping those in the back of the aircraft, said Cook. “There’s a huge opportunity for airports, like operating lounges because airlines only focus on the five percent,” he said. “We already see airports starting to do this with products like Priority Pass.”

A Transportation Security Administration checkpoint at BWI Airport. Photo: Benet J. Wilson

A Transportation Security Administration checkpoint at BWI Airport. Photo: Benet J. Wilson

A big pain point for travelers is airport security checkpoints. “I see an expanded trusted traveler program that will speed up checkpoints, which are a major choke point in the travel process,” said Cook. “Programs like PreCheck and Global Entry are a welcome change. If more countries agree to have similar processes, we’d see a much better passenger experience.”

Having healthy food available in airports is another trend. “We did a project in Canada on restaurants attempting to steer people to nutritional labeling so they can be aware of what they’re eating,” said Stark. “We spoke with officials at Toronto-Pearson International Airport as part of that research. They noted that they worked hard to have a balance of 40 to 50 percent of airport restaurants offering healthier food, and we see more airports doing that.”

EXTRA: Alaska Airlines Introduces New Inflight Entertainment System and Other Small Upgrades

Jeff Klee, the CEO of CheapAir.com, feels that the network airlines are looking at the passenger experience because they finally don’t want to be seen as just commodities. “When you look at United, Delta and American, they have been more profitable and are investing that money back into their products,” he said. “The large airlines are trying hard to create a differentiated experience, while low-cost carriers are taking a different approach by not adding bells and whistles.”

The network carriers have really been focusing on premium cabins, said Klee. “In first and business class, they have invested in things like lie-flat beds and upgraded food. It’s much better than its ever been,” he said.  “And even in economy, inflight entertainment has been a big focus. We see things like carriers streaming movies and television to smartphones and tablets, adding personal video monitors with live TV and adding more WiFi access.”

EXTRA: American Airlines to Spend $2 Billion on Passenger Upgrades

The IFE system on JetBlue. Image: Courtesy of JetBlue

The IFE system on JetBlue. Image: Courtesy of JetBlue

With airports, there has been a big focus on improving food options, said Klee. “Options are much better, but there’s no pressure to offer free and better Wi-Fi,” he said. “Everything on the ground is getting better, which is good news, because passengers need it to get better.”

The airline industry will continue to split into two tiers — full-service and ultra-low-cost carriers, said Klee. “It used to be that passengers chose airlines based on who had the lowest fares, and the products and service available were pretty consistent,” he said. “But the rise of LCCs like Spirit Airlines and Frontier Airlines are giving passengers a lower fare never seen before without offering any extras, but with the ability to pay for an upgraded experience.”

Image: Courtesy Spirit Airlines.

Image: Courtesy Spirit Airlines.

EXTRA: Delta Unveils New Inflight Cabin Family of Products

Jason Rabinowitz, an AirwaysNews contributor, is the data research manager for travel data company Routehappy. “I think we’re finally at the tipping point with airlines, which have been making gradual changes over a number of years,” he said. “Enough passengers have experienced those changes first hand so they can offer an impression of the passenger experience and how it impacts them. They are finally aware of how these changes can help them find a better flight.”

A lot of the changes airlines have made have been on the technology side, said Rabinowitz. “For example, airports are finally offering free Wi-Fi that actually works,” he said. “We’re seeing airlines and airports investing in their terminals like what United is doing at Newark and what Delta has done at LaGuardia, with things like iPads, power outlets and USB chargers. There are even little things like Southwest putting cushy seats in its gate areas.”

EXTRA: JetBlue Touts Benefits of New Airline Seats Despite Less Pitch

With the airlines, passengers are seeing things like streaming Wi-Fi and internet connectivity that wasn’t possible two years ago, said Rabinowitz. “United has announced that its regional jets will be Wi-Fi capable, offering entertainment,” he said.

Jon Glick, director of transportation and logistics for Pricewaterousecooper, said the way to think about this is how travel is becoming increasingly stressful. “So some of the airlines feel if they can improve the passenger experience, it may translate into more loyalty and a willingness for a repeat purchase,” he said. “The idea is that if we can ease travelers’ stress, we’ll be able to gain more market share.”

Virgin America is especially known for its cutting edge innovation in inflight-entertainment systems. While other carriers are just now introducing advanced seat-back IFE’s on domestic U.S. Flights, every Virgin America seat has had this since the airline’s 2007 launch. Their system, known as RED leaped frogged jetBlue’s pioneering LiveTV system which is only now in the midst of its first upgrade since the airline’s 2000 launch. On May 21, 2009, Virgin America became the first U.S. airline to offer Wi-Fi access via Gogo Inflight Internet on every flight. VX’s Panasonic Avionics' IFE’s are already being updated to their 3rd version in 2013. Image courtesy: Virgin America

Virgin America’s RED IFE system. Image: Courtesy of Virgin America

If travel is stressful, airlines can differentiate their product to alleviate that pain, said Glick. “Looking inflight, inflight entertainment is something that can distract from their discomfort onboard. Customers live in an always connected world, and they are tied to their devices,” he said. “Business travelers are willing to pay to deliver that experience, but airlines are challenged to improve the quality of it. They are competing with terrestrial experiences, like streaming a movie.”

EXTRA: United Highlights Changes Coming to Newark Airport’s Terminal C

A restaurant that will open in United Airlines' Newark Airport terminal. Image: Courtesy of United

A restaurant that will open in United Airlines’ Newark Airport terminal. Image: Courtesy of United

From an airport perspective, some people want to minimize their time in terminals, said Glick. “But others don’t want to feel rushed. If airports and airlines work together to help maximize the experience that a passenger has while in the airport, it’s a great opportunity to take the stress of travel away,” he said. “Whether that’s things like traditional airport lounges, separate lounges for families or shopping and food concessions, these amenities help travelers enjoy the airport.”

Looking ahead, Pricecooperwaterhouse’s Glick says he sees more airlines moving toward self-bag tagging and self-boarding. “Putting some of the tasks that have been traditionally done by airline and airport employees now puts it in the hands of customers,” he said. “It will help eliminate long lines and put passengers in control of their time.”

Onboard flights, airlines will continue to experiment with inflight entertainment and Wi-Fi connectivity  products, said Glick. “They will begin to really answer whether these items are enhancers or revenue generators,” he said. “I think airlines will finally get the right balance.”

Looking at the past 20 years, the airlines have been a mess, said Klee. “But after bankruptcies and the basic struggle to survive, they now have a model that works. Fares are higher, capacity is lower and they’re making money,” he said. “Travelers prefer to see this returned in lower fares, but the airlines will continue to invest in their product.”

Editor’s note: What are the benefits of subscribing to our weekly newsletter? You’ll get a summary of our top stories of the week, along with our exclusive Weekend Reads column and a Photo of the Week from the extensive AirwaysNews archives. The newsletter comes out every Friday afternoon. Click here to subscribe today!

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Contact the editor at benet.wilson@airwaysnews.com

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Best of Airways Magazine – Good Jets Gone Bad

By Michael Zoeller / Published January 28, 2015

This article was originally published in Airways magazine in August 2012

International airports in the sixties and early in the seventies were home to arrays of gleaming Boeing 707s and 720s operated by the likes of Pan Am, TWA, Lufthansa and United Airlines. By the mid-seventies many of these aircraft had migrated to secondary carriers, cargo or charter outfits, perhaps no longer working out of a major airport but still plying the skies and making (or trying to make) a profit for their owners.

Former JAT 707-321 N723PA (msn 17601/ln 76, ex YU-AGA) parked on the south side of London-Heathrow by the Pan Am hangar on a gloomy day in November 1974. Oddly, the registration is painted on the nose. A close inspection revealed ‘Afric...’ titles under the white paint. All Images Courtesy of

Former JAT 707-321 N723PA (msn 17601/ln 76, ex YU-AGA) parked
on the south side of London-Heathrow by the Pan Am hangar on a
gloomy day in November 1974. Oddly, the registration is painted
on the nose. A close inspection revealed ‘Afric…’ titles under the
white paint. All Images Courtesy of Michael Zoeller

Toward the latter part of the seventies newer types were introduced, fuel prices had increased, and the once-proud first-generation jetliners were retired from frontline service and offered for sale. Some soldiered on, carrying passengers and cargo on a regular basis until time, literally, ran out. A handful of others ended their days flying for less-than-respectable owners to locations where ordinarily no questions would be asked as to the reason for the aircraft’s visit, its payload, maintenance history, or for whom it was flying.

Pan Am started phasing out its non-turbofan 707s in 1970 when the value of the aircraft would have been around $1.5 million (equivalent to $8.7 million today). Many were sold in the United Kingdom, Turkey, the Philippines, Yugoslavia, and of course the USA. Ten years later one could be acquired for less than $500,000 (now $1.4 million).

One such aircraft was Pan Am’s former Jet Clipper Aurora, 707-300 N725PA. It saw service with THY-Turkish Airlines, followed by a two-year stint with UK-based leasing company Tempair (Templewood Aviation). When the latter firm was liquidated at the end of 1976, the 707 was parked at Ostend, Belgium.

In December 1977 Lieutenant General Maurice F. Casey, trading as Burbank International, acquired the aircraft. At one stage during payment negotiations in Miami, a gun appeared on the table and the buyers tried to pay with Australian black opals. On February 17, 1978, wearing its new registration N725CA, the airplane was ferried from Ostend to Luton, England, for checks. Casey’s intention was to operate livestock flights between Miami and Venezuela, which was always going to be problematic because the aircraft was not equipped with a main cabin cargo door.

A special certificate was issued to ferry the aircraft from Luton to Miami via Gander, and the flight took place on March 8. Freelance navigator Dave Welch (Airways, January 2012, May 2011, July 2003, May 2002 & June 2001), who was on the flight, described the 707 as “a flying heap of sh*t.” Before its departure on March 8, N725CA carried out a test flight from Luton, during which a hydraulic cable broke loose, dumping a load of fluid over new cars parked at the nearby Vauxhall plant. This prompted the national press to refer to the aircraft as ‘The Luton Carwash Bomber’.

Welch adds: “We just managed to get the 707 airborne [on March 8] before a bailiff arrived at Monarch Engineering’s operations intending to slap a writ on it for all the damage. Vauxhall made a million pounds [£4.5 million/$6.8 million] insurance claim against Templewood, plus a large number of the population of Luton claimed that their cars were ruined too. On the way to Gander it developed the worst Dutch roll I ever experienced—twice at least. One problem was that one of the outer engines wasn’t giving full power.”

The aircraft never moved from Miami, although more than $73,000 (worth $220,000 today) of repair work, mainly to wing corrosion, was carried out during most of 1979. Three liens were placed on the 707 between March 1979 and October 1981, and at one stage it came close to being sold to a company in Wyoming. Finally the aircraft was bought by General Air Services in 1981, and broken up at Miami between September 1983 and January 1984.

‘The Bristol Cowboy’: the long-suffering 707-321, wearing the marks 9Q-CRY, at Lasham in August 1979, shortly before its departure for Bristol.

‘The Bristol Cowboy’: the long-suffering 707-321, wearing the marks 9Q-CRY, at Lasham in
August 1979, shortly before its departure for Bristol.

Meanwhile, the twilight years of sistership N723PA Jet Clipper Viking were anything but restful, and like Clipper Aurora, it gained national press coverage in the UK. After serving with JAT (Jugoslovenski Aerotransport) it was sold, via brokers, to United Trade International (UTI) and registered N711UT by the end of 1975. The president of UTI was Shirley Adams Soghanalian, wife of Lebanese-Armenian ‘merchant of death’ arms dealer Sarkis G. Soghanalian, and mother of Garabet Soghanalian, who ran Pan Aviation, an outfit that was at the center of a Federal Bureau of Investigation/Drug Enforcement Agency probe in the eighties on suspicion of drug running.

The 707 made an appearance at Stansted early in 1976 wearing an anonymous color scheme; it was in cargo configuration and reportedly had been operating out of Swaziland in 1974 for a company called Air Union, which might have been owned by Soghanalian too.

The airplane was seen at various locations between 1976 and 1979—Miami, San José (Costa Rica), Lisbon, Prague, Budapest, Sofia, and Athens—whence cargo flights to the Middle East were being operated. During this same period Sarkis Soghanalian was known to be selling arms to the Lebanese Christian Phalangist militia, and various factions in Ecuador, Mauritania,  and Nicaragua. But a blind eye was turned to much of this activity, such is the way of international politics.

A contemporary U.S. government report stated that the USA supplied a 707 plus crew to enable Christian forces in Lebanon to be equipped with arms. During one nocturnal delivery flight from Warsaw to Beirut without a flight plan, the aircraft refueled in Athens. When the 707 was ready to resume its journey, Athens Tower called and asked the crew to pull the airplane aside because two Greek customs officials wanted to inspect the cargo. Soghanalian asked the pilot if they could ignore the request and take off, but it was pointed out to him that the Greeks had an adjacent air force base and could deploy fighters.

The front section of the 707 had seating with the rear cargo area curtained off, where Soghanalian entertained the customs officials with Scotch and attempted to bribe them. But when they proved incorruptible, Soghanalian and the crew pulled guns on the Greeks, locked them in the airplane’s toilet, and took off.

Former TWA 707-331 N762TW (msn 17675/ln 74) in Air Tanzania colors, named Ngorongoro Crater, at London-Gatwick in May 1980. This replaced an ex-United 720-022 N62215 (msn 18080/ln 284).

Former TWA 707-331 N762TW (msn 17675/ln 74) in Air Tanzania colors, named
Ngorongoro Crater, at London-Gatwick in May 1980. This replaced an ex-United 720-022
N62215 (msn 18080/ln 284).

Upon arrival at Beirut the officials were released with the help of the Greek ambassador and sent home the next day on a commercial flight. Apparently the officials were not even missed in Athens. Luck ran out for this 707 when it was impounded in Helsinki in February 1979. However the airplane’s fraudulent activities were far from over, and it was about to take seat-of-your-pants flying to new levels. In the summer of 1979 the aircraft was released by the Finnish authorities to Air Union and ferried to Lasham, UK, for checks and a change of registration to 9Q-CRY (a fictitious one)—reportedly with its Yugoslavian registration YU-AGA still visible under a wing—while being readied for operations by ‘Khan Air’, flying livestock between the Arabian Gulf and India. Money for the maintenance work was not forthcoming, and the aircraft departed from Lasham for Bristol-Lulsgate with many defects still unrectified; for example, both compasses were unserviceable as were both HF (high frequency) radio sets.

The 707’s exit from Bristol for Kuwait on October 11 was spectacular, and even raised questions in the British Parliament. Using every inch of the runway upon rotation, it took out two 10ft (3m)-tall marker poles along with a portion of the airport boundary hedge. The crew consisted of a qualified British flight engineer, but the captain and first officer were a father and son team, Richard Khan Sr. and Jr., both with questionable 707 experience.

When the airplane subsequently received a 10-hour inspection in Kuwait with the help of Kuwait Airways, problems were discovered in the pressurization system, and metal bars were found hanging from the fuselage, wings, and landing gear, while gear locks were damaged, mainly by vegetation and undergrowth. Nevertheless it left Kuwait for Bombay (now Mumbai) in non-airworthy condition to complete a livestock charter.

For several months the aircraft operated cattle charters around the Arabian Gulf with the undercarriage locked down. On one occasion, despite being surrounded on the ramp at Sharjah to attempt to stop it from leaving, it managed to evade all of the ground vehicles and took off.

Destination was Luxembourg, but by the time the 707 was over Erzurum, Turkey, an emergency was declared as two engines had been shut down. The ailing airplane arrived at Ankara on January 25, 1980, and was hastily abandoned by the crew, who were unsure as to the true ownership of the aircraft or what to do with it. Eventually, the Turkish ministry of transport scrapped the 707 in 1984. As for the Khans, they were never heard of again.

TWA took longer than most other major carriers to phase out its 707s. Initially, some of the Dash 100 models were sold to Israel in 1971, but the later 707-300s did not leave the carrier until 1979 when they were almost at the end of their useful lives. One such aircraft was N762TW.

In March 1980 it was sold to Caledonian Airlines of Pennsylvania and flown to Miami for repainting in Air Tanzania colors before lease. Strangely, no color drawings of Air Tanzania’s complicated livery were available, so photos of one of the airline’s 737s were used for reference. The aircraft was delivered to Air Tanzania the following May.

No relation to the British airline with a similar name, this Caledonian was owned by George Hallak (aka George Khallaq), who also had an office in Beirut. Hallak was infamous among international law enforcement agencies for issuing illegal airline tickets and forged travel documents. As is well documented in a report by the U.S. Congressional Task Force on Terrorism and Unconventional Warfare, Hallak had helped the Palestine Liberation Organization form Caledonian Airlines and was involved in the PLO’s ‘investment strategy’ (he also facilitated the PLO’s purchase of part-equity in Transportes Aéreos da Guiné-Bissau). The former TWA 707-300 was seized by the Tanzanian authorities in July 1981 after Caledonian had defaulted on its contract with Air Tanzania; at the time it was the highest-time 707, with a total of 66,681 hours.

Air Tanzania’s earlier experience with Caledonian had also not been a happy one. A former United 720, N62215, was leased from December 21, 1979, arriving the following day in Dar es Salaam. Immediately upon arrival in ‘Dar’ it was pressed into service—not on the London-Gatwick route as the US flight crew expected, but flying troops from Mtwara, a Tanzanian coastal city, to Beira and Maputo in Mozambique, in connection with the transition of Rhodesia to Zimbabwe. When ‘conventional’ passenger services finally started, it became apparent that operating out of Kilimanjaro destined for Gatwick the 720 could carry only 29 passengers because of hot-and-high conditions at the Tanzanian departure point; an operational technicality that Caledonian had failed to mention to Air Tanzania. Consequently, the 720 operated only a handful of services before being replaced by the 707-300. Like the 707, the 720 ended its days rotting away in the African sun.

Although United started to dispose of its fleet of 29 ‘straight-pipe’ 720s in 1973, the majority served for many more years. One such aircraft was N7216U Jet Mainliner George R. Mann, which was sold to Aero Specialties in August 1973. The seats were removed, so ostensibly it became a freighter, but little happened in the way of flying until late in 1975, when it was sold to Dolphin Aviation of Sarasota, Florida, and was seen operating around the Arabian Gulf with ‘Pionair’ titles, the trading name of a small Ghanaian outfit called Pioneer Air Transport. The aircraft was returned to Dolphin at Bombay in March 1976 and was soon sold, via an agent, to Dick Wellman/Airmania, who operated ad hoc freight flights around the Middle East with two Douglas DC-7s, mainly for Air India. The agent took the money ($250,000, equivalent to $1 million today) and disappeared, never paying Dolphin.

But an agreement was somehow struck between Dolphin and Wellman, and although the 720 continued to fly in the region, it never returned to the USA. From 1976 onward the aircraft was seen at Abu Dhabi, Bombay, Dhahran, and Bangkok in a constantly deteriorating condition. But in April 1979 the Federal Aviation Administration, having inspected the 720 at Hong Kong, issued an emergency suspension of airworthiness because of its poor state. Since leaving the care of United, it had received only minimal attention. The 720 ended its days at Hong Kong-Kai Tak, with the question as to who the legal owner was remaining unanswered while the airframe’s value depreciated daily; it was finally broken up in April 1981.

During summer 1976, Lufthansa retired its Rolls-Royce Conway-powered 707-400s. Of the five the airline owned, four went on to work either directly or indirectly with infamous Biafra war mercenary pilot, Henry (Hank) Warton (aka Wharton). Born Heinrich Wartski in Germany in 1916, Warton emigrated to the USA in 1937. Postwar, he flew for or ran numerous freight airlines throughout Europe and beyond. During the Biafran conflict he operated a fleet of elderly and illegally registered Lockheed Constellations. Early in the seventies, he operated DC-7C freighters under the names North American Aircraft Trading and ARCO (Bermuda); the latter maintained bases at São Tomé and Príncipe, Basle, and Stockholm. Warton used his connections at Lufthansa to acquire, in association with M Marshall Landy, four of the former Lufthansa aircraft between September 1976 and August 1977 at scrap value prices.

The first was D-ABOG Bonn, which became N9985F. It had probably the most colorful career of all the ex-Lufthansa 707-400s. Upon delivery to Miami the 707 was converted to cargo configuration—or at least it was divested of its seats. Soon afterward Landy’s and Warton’s Air-Trans (a Bahamian corporation) leased the aircraft to International Aircraft Leases, which in turn subleased it to livestock specialists J D Smith Inter-Ocean of New York, which organized cattle charters to Central and Latin America, mainly out of Newburgh, New York. Occasionally the 707 flew for Lanica (Nicaragua). Some trans-Atlantic services were also operated to Ireland and France.

In August 1977 the aircraft was seized at Newburgh by the FAA for violations of Federal Aviation Regulations through poor maintenance procedures and inadequate safety equipment (with many safety placards still in German). But equally seriously in the view of the FAA, despite contracts stipulating that the aircraft would be operated under Part 121 rules, it was barely meeting Part 91 requirements. A hefty fine was paid by Landy, Warton, and J D Smith Inter-Ocean, and by the end of September Warton had the aircraft flown to Miami. (The FAA subsequently brought an action against Landy, IAL, Air-Trans, and the freight forwarder for operating without a certificate.)

By this time one of the other Lufthansa 707s had been written off. D-ABOB Hamburg had become 9Q-CRT and leased by Air-Trans to Pearl Air (Grenada), for which it carried out livestock flights around the Middle East (although there was speculation that other loads of dubious provenance were carried) until a hard landing at Sana’a, Yemen in August 1977 ended its flying days.

Meanwhile, Hank Warton had recruited a number of crews for a ‘secret’ arms flying operation out of central Europe to the Middle East and East Africa. A deal was struck for the US to clandestinely supply Soviet ammunition and guns to Somalia for its fight against the Ethiopians, with the USA’s aim of acquiring a bit of strategic real estate in the Straits of Hormuz. At the time Somalia had Soviet weapons but only US ammunition, while Ethiopia had US weapons with East Bloc ammunition. One of the recruits was John Lear, son of Learjet creator Bill Lear. He arrived at Frankfurt on October 22, 1977, and flew his first trip in N9985F on October 25, routing Budapest–Mogadishu; this was repeated three days later.

Flights to and from Budapest used the name ‘Fragtflug’, a defunct Icelandic operator owned by Loftur Jóhannesson, a billionaire arms dealer and friend of Hank Warton who had provided aircraft during the Biafran conflict. Over Yugoslavia, Air-Trans Miami became the operator. Flying over the Mediterranean the 707’s registration became the call-sign, and on contact with Jeddah, Saudi Arabia, Lear was instructed to use a Somali Airlines call-sign. The final leg from Jeddah to Mogadishu was flown under radio silence. If the crewmembers were questioned, they had been told to explain that were carrying ‘agricultural materials’ from Budapest to Jeddah.

Some 580 tonnes of arms were flown from Budapest to Somalia, and there is anecdotal evidence that N711UT was also involved in this operation. In October 1977, N64739, the former D-ABOC Berlin, which had been ‘converted’ to a freighter in a similar way to N9985F, joined the operation and was a regular visitor to Mogadishu for a month until November 4, when Lear flew it from Budapest to Stansted via Salzburg.

Evidently about this time the Somali operation ceased, as Lear collected another 707-400 at Stansted a few days later. It was 9G-ACK (formerly D-ABOF München), which was registered to Geminair in Ghana but flying mainly for Nigeria Airways with crews supplied by Air-Trans. From Stansted, Lear flew the 707 to Heathrow for a regular Nigeria Airways passenger service to Lagos.

Of all the ex-Lufthansa 707s, 9G-ACK was the most ‘above board’. Operating for established carrier Geminair it flew numerous leases and charters for DETA Mozambique, Sabena, Dan-Air, Monarch Airlines, British Airtours, and Britannia Airways between 1977 and 1980.

However, it was often called upon to operate for Warton during this period too, and for most of 1980 it flew on behalf of Nefertiti Aviation, a company heavily reliant upon Warton for aircraft and crews.

By July 1981, 9G-ACK had been returned to Air-Trans (if indeed it had ever really left in the first place) and was wearing the illegal registration N90498, earlier allocated to N64739, by then semi-derelict at Tripoli, Libya. Air-Trans applied for a special permit to ferry ‘N90498’ from Manston to Miami, but after leaving Manston the 707 never reached its purported destination; instead, it flew to Kano in Nigeria and was painted as ‘3C-ABH’ on one side and ‘3C-ABI’ on the other, under the control of another Warton company, Bata International Airways of Equatorial Guinea (a country familiar to Warton during his flights to and from Biafra).

John Lear returned to work with Air-Trans in October 1981 and flew this 707 Athens–Johannesburg–Cairo during the month, carrying arms and ammunition, and later Khartoum–Sana’a with cattle. Finally, as EL-AJC, the aircraft arrived at Bournemouth from Cairo in July 1983 in an anonymous all-white scheme, and was broken up at its final destination shortly afterward.

Meanwhile, N9985F had spent much of 1978 and 1979 one step ahead of the law, visiting Bucharest, Lisbon, Angola, and Ireland, all locations well known to Warton and in which he had contacts. Maintenance, such as it was, was carried out at Manston by Invicta Aircraft Engineering, whose Michael Harradine was the agent for Equatorial Guinea’s ‘flag of convenience’ register. Finally, the FAA caught up with the 707 at Manston in October 1979, when an inspection revealed numerous points of corrosion, including at the over-wing exits, a vertical stabilizer leading edge strip loose, and neither airworthiness certificate nor FAA-approved operating manual in sight. Unsurprisingly, the airframe was declared non-airworthy. Somehow the 707-400 was able to fly away from Manston and was noted early in 1980 flying cargo at Sana’a for Warton’s Anderson.

In August 1980 N9985F returned to Manston, where Anderson Aviation notified the FAA that the aircraft was being sold to Bata International—as 3C-ABH. From December 1980 the aircraft was painted in the same markings and registration as the other ‘3C-ABH’, even wearing two different registrations. The aircraft’s activities in its final days are difficult to trace, but what is known is that livestock flights were flown around the Middle East in 1982, and that by 1984 it was withdrawn from use at Tel Aviv in poor condition. By 1989 the remains were being used as a training aid by the Ben Gurion Airport fire service.

So, what of N64739, which had returned to the USA in November 1977 after its stint as a gun runner? It was registered in Ireland in August 1978 as EI-BFN with Intercon Air of Dublin, which already owned a Bristol Britannia and intended to use the 707 on long-haul livestock and general charters (N9985F had Intercon Air titles applied but never entered service); however, there were certification difficulties, and the aircraft returned to the US register with Landy at Manston as N90498 in January 1979.

That April it left Manson for Tripoli as 5A-CVA with STAC (Société de Transports Aériens Centrafricain), a company formed by Emperor Jean-Bédel Bokassa of the Central African Republic, to carry ivory for resale abroad.

Bokassa was overthrown in a September 1979 coup, and the aircraft was nominally transferred to United African Airlines, successor to STAC. The aircraft officially reverted to N90498 with Anderson Aviation in January 1980, but never left Tripoli, where it was broken up in 1988.

All these events took place three decades ago. After September 11, 2001, security around the aviation world was increased dramatically, but flights of a similar nature and dubious character are likely still taking place on a regular basis in less-regulated countries of the world.

Cover Image Courtesy of Michael Zoeller

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ANALYSIS: Fuel Buys Time for Alaska Air Group

by Vinay Bhaskara / Published January 27, 2015

An Alaska Airlines Boeing 737. Photo: Courtesy of JDL Multimedia

An Alaska Airlines Boeing 737. Photo: Courtesy of JDL Multimedia

Alaska Air Group reported a $148 million net profit for the fourth quarter of 2014 on January 22, delivering yet another quarter of record financial performance despite heightened competition. Excluding a $6 million fuel hedging gain and other special items, its net profit for the quarter (Q4) was still a record $125 million dollars.

For calendar 2014, Alaska reported another record net profit of $571 million excluding special items, up 49.1 percent YOY. Including a net $15 million mark to market fuel hedging gain and other special items, net profit for the year was also a record $605 million.

EXTRA: Lower Fuel Prices Help Alaska Air Double Its 4Q Profit

Quietly, as its larger peers underwent more aggressive and widely covered restructuring, Alaska has very quietly turned itself into a high-quality industrial company. Operating margins for 2014 expanded YOY to 17.9 percent on an operating profit of $962 million. Furthermore, Full year pretax margin came in at 17.2 percent (up 4.8 percentage points), while ROIC for the trailing 12 months totaled 18.6 percent. Admittedly, much of the gains were driven by fuel prices, but even without that headwind, the numerical improvement was substantial YOY.

For the full year, on an adjusted basis, lower fuel prices contributed $49 million, or 8.3 percent to Alaska’s bottom line on a decline in adjusted fuel price per gallon from $3.28 to $3.03. However in Q4, Alaska paid an adjusted fuel price of $2.58 per gallon, suggesting that Alaska has several million dollars worth of YOY expense reduction coming throughout 2014 if current prices persist (the IATA spot fuel price average for North America is $1.58 per gallon).

Photo: Chris Sloan / AirwaysNews

Photo: Chris Sloan / AirwaysNews

Alaska Airlines is still very much in a growth phase. Passengers carried rose 6.8 percent YOY, capacity as measured by available seat miles (ASMs) rose 7.1 percent YOY, and Alaska added more than two dozen new routes. In a normal environment, this would be margin dilutive due to its adverse impact on revenues, and you did see some of that with consolidated PRASM declining 2.4 percent YOY in Q4 (which cannot be fully explained by the after-Thanksgiving shift and increasing stage length). Furthermore, the strength of the local economy on the West Coast and especially in the Pacific Northwest helped buoy demand. But the massive reduction in fuel costs was the primary driver behind the scope of the expansion in Alaska’s margins.

Since Q2 of 2014, I’ve characterized Alaska’s network re-organization as a necessary project in diversifying its revenue base in the face of heavy competition from Delta at its highest margin hub. My reasoning was that while Alaska’s growth might dilute overall margins to some extent in the short run, the long run benefits of doing so would outweigh the short run travails, especially given the strong macroeconomic conditions in the U.S. But fuel prices will buy Alaska more time. Now, its new routes will have an extra year or so to mature in a low pressure environment, likely resulting in another yearly cycle of record profits.

There were several interesting items that came out of Alaska’s earnings call, and without diving too deeply into the details, here are a few that I found notable.

  • 2014 Free Cash Flow was $344 million, while operating cash flow was $1 billion.
  • On time performance was 86 percent, completion factor as 99.5%, and Alaska recorded a blended satisfaction score of 84 percent, a record.
  • Competitive capacity rose 7 percent in Alaska markets, 8 percent in Q4.
  • Alaska launched 16 new North American markets in Seattle (up to 79 total versus 26 for Delta). Seattle market share is 55 percent.
  • The seat retrofitting program on 737-800s and 737-900s has been completed, generating incremental benefit of $50 million annually.
  • Mileage Plan frequent flyer members were up 11.4 percent YOY.
  • Q1 2015 capacity growth projected at 11 percent, with 4 percentage points due to aircraft up-gauging. Calendar 2015 capacity growth is expected at 8 percent.
  • Paid first class traffic up 7 percentage pints in Q4 on roll out of discounted first class to 50 percent of markets by YE 2014.
  • Preferred seating product in Q2 for exit rows and bulkheads expected to add $15 million to the bottom line.
  • Revenue is management system being updated in Q1.
  • Profit sharing and incentive pay totaled $116 million, $14 million for operational performance rewards.
  • A large portion of the Q400 fleet is entering an engine overhaul cycle.
  • All 27 737-400s will be replaced by 737-900ERs by the end of 2017.
  • Mileage Plan growth has been highest in Salt Lake City and San Diego, new markets with a small base.
  • Oil prices have not had a major impact on volatility in State of Alaska demand. Alaska views the key oil towns as Anchorage and Prudhoe Bay on the North Slope, and it views North Slope projects as stable in the long run.
  • The 737-900ERs enable reasonably cost-neutral expansion in Hawaii.
  • Reduction in oil prices may hurt local consumer demand in Alaska.
  • Alaska wants to move up into the S&P 500.
  • Alaska’s fuel hedges versus those of Delta are not expected to affect competition in Seattle.
  • E175s expected to drive strength on long and thin routes.
  • Competitive capacity growth tails off over the course of 2015.
  • Business travel represents 30-35 percent of Alaska’s revenue.
  • Alaska is planning for the future as if fuel prices will be $2.90 per gallon.

Without diving too deeply into the specifics, the regional growth Alaska is pursuing is very interesting. Unlike the legacy airlines, Alaska is actually growing its regional business (3.6 percent YOY in 2014), and the recent decision to add yet more incremental Q400s and grow the E175 subfleet is interesting.

An Image Courtesy of JDL Multimedia

A Horizon Air Bombardier Q400 turboprop. Image: Courtesy of JDL Multimedia

The Q400s at least make some sense in that even if fuel rises, the fact that they are turboprops means that operating margins won’t suffer to deeply. The E175s on the other hand, while useful in a legacy sized network, might be difficult for Alaska to utilize during cyclical downturns. Remember, Alaska operated a subfleet of Bombardier CRJ700s on similar routes up until the global financial crisis, before largely abandoning those aircraft in favor of the Q400s. The structural conditions of the airline industry are infinitely better now than in 2009, but even so, this decision may prove unwise in the long run.

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Contact the author at vinay.bhaskara@airwaysnews.com

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