Data/Airline Economics Channel

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SITA/ATW Self-Service Survey

By Aaron Karp

Passengers are responding positively to automated interaction with airlines and want more.

Southwest's RNP investment: Is $175 million pledge too far ahead of US government, industry?

By Aaron Karp

Southwest Airlines has committed boldly to investing $175 million to implement Required Navigation Performance fleetwide, an endeavor that includes retrofitting at least 115 737 Classics' cockpits, ensuring its more than 320 737-700s are equipped to be RNP-capable, training its pilots and working with US FAA to develop RNP procedures for the more than 65 airports into which it operates. But will the US government and other airlines similarly move forward, or will SWA within the next 2-3 years have aircraft and pilots capable of operating at a level of efficiency that FAA and much of the rest of the US industry is unable to reach for the foreseeable future?

Liberalizing air transport: Has frustration over ownership restrictions reached a tipping point?

By Aaron Karp and Christine Boynton

As the global airline industry struggles through one of the worst years in its history, with IATA projecting a collective full-year loss of $11 billion, dissatisfaction with restrictive ownership and control regulations is mounting. The complaint that airlines are hamstrung by a limited ability to pursue capital and mergers across borders is certainly not new, but industry leaders believe the current economic environment brings a higher level of urgency to efforts to ease nationality constraints.

High-performance airlines: What distinguishes air transport's consistently successful players?

By Aaron Karp

Consistently generating revenue and earning profits is perhaps more of a challenge in the airline industry than in any other global business. Air transport's high costs, cyclical nature and vulnerability to twists and turns in the general economy leave many carriers searching for answers. But there are a small number that, while not completely immune to financial pressures, have managed through the years to outperform their industry peers in good times and bad.

Forecast 2010: Shuffle the Cards

By Perry Flint

This looks to be a transition year for the struggling airline industry. Profits won't flow but traffic will start to recover.

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Another Shenzhen arrest leaves airline control up for grabs

Tuesday March 9, 2010

Shenzhen Airlines CEO Li Kun was arrested Saturday for alleged financial irregularities, allowing Air China to deepen its involvement in the country's fifth-largest carrier through the appointment of Shenzhen vice chairman and former CA VP Fan Cheng as acting CEO. [more]

United, AirTran add to storm tally

Tuesday March 9, 2010

United Airlines and AirTran Airways yesterday revealed the amount of revenue lost as a result of last month's record-breaking snowstorms in the Mid-Atlantic and Northeast US. [more]

China Southern to raise $1.5 billion through private share placement

Tuesday March 9, 2010

China Southern Airlines announced the private placement of CNY10 billion ($1.46 billion) in new A shares to a minimum 10 investors, including parent China Southern Air Holding Co., along with new H shares to CSAHC's Hong Kong subsidiary Nan Lung worth a reported CNY750 million. CZ said the funds "will help reduce the company's gearing ratio, improve its capital structure and enhance its ability to mitigate risk." CSAHC is investing the CNY1.5 billion it received from the Chinese government last month, the airline said (ATWOnline, Feb. 23).

Separately, CZ is selling five ATR 72-500s at auction. Bids, along with a $500,000 deposit, are due May 31.

DOT fines US Airways for fare disclosure violation

Tuesday March 9, 2010

US Airways was fined $40,000 by the US Dept. of Transportation "for violating rules that require airline price advertisements to disclose the full price consumers must pay for air transportation." DOT said its Aviation Enforcement Office found that US listed fares on its website "that did not include additional applicable taxes and fees, or any notice on that page that these additional charges would be required," on certain lists generated by customer searches for one-way flights. The agency reiterated that either the entire fare must be indicated on the first page listing price quotes or "the existence of additional government-imposed per-passenger charges must be prominently disclosed along with a hyperlink that takes consumers to a page that describes the additional charges."

Air Jamaica appears set for Caribbean acquisition

Tuesday March 9, 2010

Air Jamaica said it has "targeted" April 12 for beginning "the transition to Caribbean Airlines." The troubled carrier appears to be settled on an arrangement whereby its assets would be taken over by the Trinidad & Tobago airline, although no final agreement has been reached between the Jamaican government, which controls JM, and Caribbean. Finance Minister Audley Shaw previously said the government is "seeking to divest Air Jamaica on the best terms available" and to ensure that there is adequate air services to/from the island nation (ATWOnline, Jan. 28). While it has been speculated that most of JM's workers would be laid off following the Caribbean takeover, the airline said in the statement that the "transition to Caribbean Airlines will be phased over a period of up to one year [and]. . .Air Jamaica aircraft will continue to be utilized during the transition period. Current Air Jamaica pilots, flight crews and ground staff will operate the aircraft for the [spring/summer] schedule already published."

Tuesday March 9, 2010

Aer Lingus will not announce its 2009 results today as planned owing to its inability to list an accurate charge relating to cost reduction agreements it is attempting to reach with unions. Late last week flight attendants represented by Impact rejected proposals agreed upon by the union and EI (ATWOnline, March 8). The result of a vote by maintenance employees represented by the Craft Union had not been announced late yesterday. "Following the outcome of recent staff ballots it is necessary to revise the provision for restructuring costs and amend the preliminary results accordingly," EI said. It added that it is "determined to achieve the annualized cost savings of €97 million ($132.1 million) targeted by the cost reduction program over the period to 2012." The board is scheduled to meet today to approve next steps.

THY shies from LOT acquisition, covets SE Asia/Australia expansion

Monday March 8, 2010

Turkish Airlines was asked by the Polish government to make a major investment in LOT Polish Airlines, a source close to the THY board told ATWOnline, but the carrier rejected the offer because it is focused on its own expansion plans. [more]

Snow costs Southwest $15 million

Monday March 8, 2010

Southwest Airlines said the February snowstorms cost it an estimated $15 million in lost revenue but boosted passenger RASM by 16%-17% year-over-year as a result of the reduced capacity. SWA flew 4.99 billion RPMs in February, down 2.3% year-over-year, and capacity was down 8.7% to 6.75 billion ASMs. Load factor rose 4.8 points to 73.9%.

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