Three views from the FlightGlobal and Airline Business team.
Podcast – March 26 Industry Roundup
By IAG | March 26th, 2008 | Posted in 787, aloha, boeing, f-35, hawaiian airlines, kc-x, mesa, podcast, skybus, starling antenna, united | No CommentsUnited's managers against the wall
By IAG | April 27th, 2007 | Posted in unions, united | No CommentsToday United's ALPA MEC sent this message:
"Whereas, United Airlines continues to financially under perform in relation to its competitors, specifically American Airlines, which has not been through a bankruptcy while continuing to fund its employees pensions, and
"Whereas, United Airlines is the only major US airline which has not announced orders for new aircraft, and
"Whereas, the day-to-day operation of the airline continues to suffer due to poor planning and inadequate staffing,
"Therefore be it resolved that the UAL- MEC has no confidence in the senior management of the corporation, and
"Be it further resolved that the Master Chairman will communicate this to the CEO and Board of Directors at
the earliest opportunity."
Maybe you want to think about your summer travel plans on another airline. Short staffed, the airline's employees are (dare we say it?) pi**ed off. The pilots have not agreed to the proposed deal. The airline's managers are apparently seriously out of touch with the staff. The message above will only serve to harden positions.
United's managers against the wall
By IAG | April 27th, 2007 | Posted in unions, united | No CommentsToday United's ALPA MEC sent this message:
"Whereas, United Airlines continues to financially under perform in relation to its competitors, specifically American Airlines, which has not been through a bankruptcy while continuing to fund its employees pensions, and
"Whereas, United Airlines is the only major US airline which has not announced orders for new aircraft, and
"Whereas, the day-to-day operation of the airline continues to suffer due to poor planning and inadequate staffing,
"Therefore be it resolved that the UAL- MEC has no confidence in the senior management of the corporation, and
"Be it further resolved that the Master Chairman will communicate this to the CEO and Board of Directors at
the earliest opportunity."
Maybe you want to think about your summer travel plans on another airline. Short staffed, the airline's employees are (dare we say it?) pi**ed off. The pilots have not agreed to the proposed deal. The airline's managers are apparently seriously out of touch with the staff. The message above will only serve to harden positions.
Virgin Blue, Qantas and United
By IAG | March 22nd, 2007 | Posted in qantas, united, virgin blue | No CommentsAustralia’s Virgin Blue announced an order for six 777-300ERs yesterday. The order going to Boeing was expected. The reason for the order was also expected and it’s the reason which is the basis for this story.
The announcement states “it accelerates plans for long-haul flights to the United States”. Qantas makes a lot of money on its Australia-US routes (~15% to 30% of its profits from various sources) and it has never had domestic competition to the US. Its only competitor on the route is United Airlines (though Singapore wants in real bad). Previously American Airlines and Continental Airlines both tried and failed. This is a non-stop route and requires a specific performance in terms of aircraft. American and Continental both used DC10s which had to stop in Hawaii – they were doomed. Qantas and United use 747-400s and United also uses 777-200ERs. Since they are able to fly non-stop, they have managed to keep customers happier. The cozy relationship is about to end. Virgin Blue has big designs and it will force itself into a spot commercially between these two giants.
The product is the key on a long haul flight. Virgin Blue flies some regional international service but nothing yet like the 14 hour flights across the Pacific. Virgin Blue will not be lowest priced, and this will force United lower down the scale. Qantas will have to move up market.
Clearly Qantas and United will see market revenues fall as they have to accommodate Virgin Blue. Though the new comer will not have anywhere near the capacity to compete with incumbents head on, there will be an impact. Much of the revenue impact will depend on Virgin Blue’s product offering. It would seem that Virgin Blue's product is likely to follow the lead of other things Virgin – edgy and better than average. There likely will be a premium product to extract more dollars. There is is the issue if the service will even have the Virgin word in it since this is overseas service (Pacific Blue again?). By taking this approach, we see Qantas having to go upmarket and upgrading its product to justify prices. On the other hand, wither United? United could follow Qantas, but we expect it not to do so. Rather, we expect United to continue to be the bottom feeder. It is going to be interesting to see where this goes.
Virgin Blue, Qantas and United
By IAG | March 22nd, 2007 | Posted in qantas, united, virgin blue | No CommentsAustralia’s Virgin Blue announced an order for six 777-300ERs yesterday. The order going to Boeing was expected. The reason for the order was also expected and it’s the reason which is the basis for this story.
The announcement states “it accelerates plans for long-haul flights to the United States”. Qantas makes a lot of money on its Australia-US routes (~15% to 30% of its profits from various sources) and it has never had domestic competition to the US. Its only competitor on the route is United Airlines (though Singapore wants in real bad). Previously American Airlines and Continental Airlines both tried and failed. This is a non-stop route and requires a specific performance in terms of aircraft. American and Continental both used DC10s which had to stop in Hawaii – they were doomed. Qantas and United use 747-400s and United also uses 777-200ERs. Since they are able to fly non-stop, they have managed to keep customers happier. The cozy relationship is about to end. Virgin Blue has big designs and it will force itself into a spot commercially between these two giants.
The product is the key on a long haul flight. Virgin Blue flies some regional international service but nothing yet like the 14 hour flights across the Pacific. Virgin Blue will not be lowest priced, and this will force United lower down the scale. Qantas will have to move up market.
Clearly Qantas and United will see market revenues fall as they have to accommodate Virgin Blue. Though the new comer will not have anywhere near the capacity to compete with incumbents head on, there will be an impact. Much of the revenue impact will depend on Virgin Blue’s product offering. It would seem that Virgin Blue's product is likely to follow the lead of other things Virgin – edgy and better than average. There likely will be a premium product to extract more dollars. There is is the issue if the service will even have the Virgin word in it since this is overseas service (Pacific Blue again?). By taking this approach, we see Qantas having to go upmarket and upgrading its product to justify prices. On the other hand, wither United? United could follow Qantas, but we expect it not to do so. Rather, we expect United to continue to be the bottom feeder. It is going to be interesting to see where this goes.
Branding, product and premium fares
By IAG | February 19th, 2007 | Posted in aviation, qantas, singapore, united | No CommentsWe published some pictures of the new Singapore Airlines seats. More like couches! Anyway, Qantas, which traffics in many competitive markets with Singapore, reacted quickly.
As an aside, Qantas is apparently not trying to compete with a new in-flight service to steal a march on Singapore Airlines legendary service. Couldn't resist the temptation. Sorry.
 |
 |
 |
 |
 |
 |
The images are stock and we did not want to edit them. That said, the Singapore product looks streets ahead of Qantas'. If Singapore does get access to the SYD-LAX route, premium traffic will flow over to them.
That said, United will be thrashed. Its product simply will be outclassed. Below is United's first class seat.
Even if United's seat is competitive, on long haul flights seat comfort has to be backed up with appropriate service. This area is where US carriers are weakest. On long haul flights, US carriers are seriously uncompetitive in terms of cabin service. Consequently, US carriers sell their products at a discount. Their branding is therefore relegated appropriately.
Singapore (and other Asian carriers in particular) have continued to invest in product upgrades ensuring their brands are regarded as premium and they get more money per square foot from premium cabins. Whereas US carriers are second to none in terms of aircraft maintenance and flight deck crew skills, cabins where customers are seated are sadly sub-par.
Branding, product and premium fares
By IAG | February 19th, 2007 | Posted in aviation, qantas, singapore, united | 3 CommentsWe published some pictures of the new Singapore Airlines seats. More like couches! Anyway, Qantas, which traffics in many competitive markets with Singapore, reacted quickly.
As an aside, Qantas is apparently not trying to compete with a new in-flight service to steal a march on Singapore Airlines legendary service. Couldn't resist the temptation. Sorry.
|
|
|
|
|
|
|
|
|
The images are stock and we did not want to edit them. That said, the Singapore product looks streets ahead of Qantas'. If Singapore does get access to the SYD-LAX route, premium traffic will flow over to them.
That said, United will be thrashed. Its product simply will be outclassed. Below is United's first class seat.
Even if United's seat is competitive, on long haul flights seat comfort has to be backed up with appropriate service. This area is where US carriers are weakest. On long haul flights, US carriers are seriously uncompetitive in terms of cabin service. Consequently, US carriers sell their products at a discount. Their branding is therefore relegated appropriately.
Singapore (and other Asian carriers in particular) have continued to invest in product upgrades ensuring their brands are regarded as premium and they get more money per square foot from premium cabins. Whereas US carriers are second to none in terms of aircraft maintenance and flight deck crew skills, cabins where customers are seated are sadly sub-par.
Southwest Fare Increase Feb 9
By IAG | February 12th, 2007 | Posted in American Airlines, fares, northwest, southwest, united | No CommentsAs reported in Reuters today, the increase on Saturday by Northwest, American, and United was in response to an increase started by Southwest Airlines on Friday.
In my report last night I indicated that the increase had been started by Northwest Airlines.
While indeed Southwest officially launched the increase, you can see in the chart below that both Northwest and Continental Airlines opted to use this round of increases to cover additional markets where Southwest does not have service. Northwest raised fares in an additional 1,824 markets on top of the 987 markets where Southwest has service. In the case of Continental the ratio was basically 1 to 1.
Neil Bainton, FareCompare.com
