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Old July 17th, 2008, 03:40 AM   #21
Magellan
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Sweet Spot

Quote:
Originally Posted by Alex Von Königsberg View Post
If US Airways, Delta and American Airlines cannot fly domestically, then maybe it's time for the US government to let others (KLM, Lufthansa, etc) operate domestically under their own banner in the USA?
I think that increased competition from more efficient overseas-based airlines will only drive the existing US majors out of business. However, it is something that the USA Government is committed to delivering within two years following the launch of the OpenSkies agreement. It can of course back out, but then the EU will retaliate by withdrawing the rights won by US airlines within the EU.

The least "unpleasant" solution would be to remove the restrictions on foreign ownership of US airlines that prevent non-US companies from taking control.

Either way, airlines operating in the US will have to raise their income per passenger-kilometre to both cover increased fuel costs, and to cover the necessary reinvestment in more fuel-efficient models. The market is unlike to be able to support the level of ticket price increases that are necessary so the airlines will have to move tentatively to see how far they can go with price increases before they precipitate a major drop-off in traffic. At that point it will become clear how much money the US Government will need to inject into the industry in order to maintain the mobility of the workforce.
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Old July 17th, 2008, 03:54 AM   #22
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Quote:
Originally Posted by Alex Von Königsberg View Post
I am not sure why the overseas airlines are not affected as much. However, to prove the point, read on Virgin America that started domestic operations in the USA in 2008. Of course, it must be a US-based airline (i.e. Virgin group owns only 25% of stocks), but still it is Virgin, and it's fleet includes only Airbuses.
The cut-throat ticket-price competition in the US has lead to the airlines tending to under-invest in newer, more efficient aircraft models. The MD-80 for example costs less to maintain than an A320/A319 but is considerably less fuel efficient. The airlines have also been cutting margins to the extent that there is little fat left to survive the bad times. One other factor; most European airlines derive a significant proportion of their income from more profitable long-haul flights, were as most of the US carriers are overwhelmingly dependent on the domestic market.

One upside to the US airline market is that they are not subject to competition to any great extent from domestic and regional high-speed rail services, and so anyone wanting to take a journey of more than a few hours will have to go to them.
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Old July 17th, 2008, 04:16 AM   #23
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Originally Posted by FM 2258 View Post
Yeah I don't ever read about Transavia, KLM, Ryanair, British Airways, Lufthansa, Swiss, LTU, Iberia, SAS, Aer Lingus or any other European airline struggling amid high fuel prices. Aren't prices for fuel much higher in Europe than the United States?

Air France KLM has already reported that it will make a significant loss next year if prices continue to remain high.

BA have also indicated that their profits will be wiped out (BA took the hit in 2006/7 and eliminated all low margin sectors and so in 2007/8 was able to benefit from having high margin returns on all operations; if they had not done that they would now be in the same boat as Air France KLM and Lufthansa).

There is speculation that Austrian Airlines will be the next to crash/disappear after Alitalia, followed shortly there after by SAS - it is only a matter of time until their average fuel charges per passenger exceed the income. The main problem here is the lack of robust fuel-hedging.

BMI is likely to disappear next year. It has been profitable until now, but it has a size disadvantage and so it does not benefit from economies of scale. Lufthansa has rights to the controlling block of shares should the owner decide to sell.

Virgin appears to be about to announce a tie-up/merger with a Middle-Eastern airline - once your part of the family you possibly get access to fuel discounts - nice one Richard :;

The strength of the Euro against the Dollar has provided some protection to the EU based airlines, but it, and fuel-price hedging, is only delaying the inevitable impact of high fuel prices. What is most significant is that they will have sometime to weather the storm and to adjust their operations unlike the US airlines which are having to react precipitously.
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Old July 17th, 2008, 04:23 AM   #24
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This is why high speed rail is needed more than ever now. Allow HSR to serves as the means of long distance transport (500 miles or less) which will enable the airlines to focus on the more profitable long haul routes between major hubs.
HSR will not provide a short term-fix - the delvery timescales are very long, and they are not cheap. I think SNCF is in debt to the tune of around $40 Billion Euros for the TGV network which has been built up over an extended period (not sure when they started). If they had to start today, the bill would be considerably greater, perhaps by at least a factor of two.
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Old August 5th, 2008, 04:47 AM   #25
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US airline adds surcharge for pillows, blankets
4 August 2008
Agence France Presse

Cut-price JetBlue airline on Monday announced a seven-dollar blanket and pillow charge on flights longer than two hours, the latest in a series of surcharges US airlines are introducing to offset a slump in the business.

Hit by spiraling fuel prices and shrinking airline travel, US airlines have been cutting back on expenses, canceling flights and adding surcharges on services previously included in the cost of a ticket.

At the weekend, US Airways announced a two-dollar surcharge for water and one dollar for coffee aboard their flights, adding that only first class passengers on transatlantic flights could expect free water.

Three other US airlines, American, United and US Airways have already introduced a surcharge of between 15 and 20 dollars for a second piece of luggage on domestic flights.

JetBlue in its marketing strategy for the new, seven-dollar surcharge said they have created "The World's Cleanest" travel pillow and blanket kit, made from "a fabric that blocks all micro-toxins ... such as dust mites, mold spores, pollen and pet dander."

The "take-home travel kit" fits in a carrying case "for use on future trips," the airline said in a statement.

"Replacing our old, recycled pillows and blankets with this state-of-the-art, high-quality take home kit is an eco-conscious, health-conscious and customer-conscious decision," said JetBlue Airways General Manager of Product Development Brett Muney.
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Old August 6th, 2008, 03:25 AM   #26
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Quote:
Originally Posted by Magellan View Post
HSR will not provide a short term-fix - the delvery timescales are very long, and they are not cheap. I think SNCF is in debt to the tune of around $40 Billion Euros for the TGV network which has been built up over an extended period (not sure when they started). If they had to start today, the bill would be considerably greater, perhaps by at least a factor of two.
There is no short-term fix to high gas prices.
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Old August 10th, 2008, 05:25 PM   #27
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On a related note, the effect on airports that rely on airline charges :

Industry woes threaten Chicago airport expansion
9 August 2008

CHICAGO (AP) - Soaring gas prices have claimed plenty of victims -- from SUV sales to stock market portfolios. They now threaten to claim another: the expansion of one of the world's busiest airports.

Chicago wants to complete the expansion of O'Hare International Airport, which relies heavily on revenue from cash-strapped airlines, by 2014 -- two years before the Midwestern U.S. city hopes to host the Summer Olympics.

But carriers serving Chicago now appear reluctant to put up more money to finish the job because high fuel costs have cut so deeply into industry revenue, forcing airlines to raise fares, slash flights and lay off workers.

Chicago officials say the expansion project is critical, and not just for the city and state economy. New runways and a new terminal envisioned in the project, they say, will greatly reduce delays that now gum up air traffic nationwide.

Critics have expressed skepticism for years about Chicago's ability to finance the project and meet its deadline, now just six years away.

Chicago vows not to use city tax money for the project, so airlines remain the only realistic revenue source.

In the early 2000s, airlines agreed to pay for the initial phase of the project, but they haven't yet agreed to finance the final phase. Chicago estimated the first phase would cost around $3 billion and the second around $5 billion, but analysts widely agree the final cost of the project will be $15 billion or more.

Financial hardships caused by oil prices are largely to blame for the unwillingness of airlines to step forward now, said industry analyst Michael Boyd.

"When these plans for O'Hare were first being put together, oil was nowhere near $50 a barrel, let alone $100," he said.

Rosemarie Andolino, the head of the project, said she's confident airlines will understand that expansion at O'Hare will benefit them financially.

"Airlines are challenged right now, and we at O'Hare want them to be able to get back on their feet," she said. "But for them to add more profitable routes, they need more runways here. O'Hare hasn't added a new runway since 1971."

Spokesmen for two airlines that control most of O'Hare's gates, American and United, said Friday that they continue to talk to expansion officials.

Boyd said the burden is on expansion officials to demonstrate that putting up the money will benefit airlines soon. But he's optimistic that O'Hare -- with some adjustments -- would secure the needed funds.

"Making O'Hare more efficient is an incredibly important move for aviation infrastructure," he said. "It's a challenge for Chicago to finish O'Hare, but they have to press ahead. They have to be successful."
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Old August 22nd, 2008, 05:47 PM   #28
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Airlines Plan Big Job Cuts After Holiday
21 August 2008
The Wall Street Journal

The airline industry is set to suffer its biggest wave of job losses since 2001, as carriers prepare to shed tens of thousands of jobs after the Labor Day holiday to cope with high fuel prices.

Airlines have collectively announced plans this year to cut more than 36,000 jobs, according to the Air Transport Association of America, an industry trade group.

Most of the cuts will happen in the weeks and months after the summer flying season ends.

By year's end, the work force, which numbered 414,600 full-time equivalent employees in June, is projected to have been slashed by between 12% to 15%, according to U.S. Bureau of Transportation Statistics officials.

That would be the biggest wave of job losses in the industry since 25% of jobs were lost immediately after the Sept. 11, 2001, terror attacks.

Many of the staffing cuts are required by the elimination of flights. The bulk of those cuts will come after the summer travel season.

The cuts come as airlines have also reduced services and added fees to increase revenue.

"As the months of this year go by, the employment ranks in the U.S. passenger-airline sector continue to decline, which should not be any surprise, given the financial condition," said John Heimlich, vice president and chief economist of the trade group. "High energy prices have taken a toll on us in two ways -- higher fuel expenses and less disposable income for our customers to spend on air travel and shipping."

AMR Corp.'s American Airlines, the U.S. industry's largest employer, is aiming to cut its full-time equivalent work force by as much as 8%.

No. 2 United, a unit of UAL Corp., has said it will cut 5,500 jobs by year's end, and Continental Airlines Inc., which ranks fourth in size of work force, will shed 3,000 positions, mostly through voluntary buyouts.

They aren't alone, as most other big airlines have announced cuts.

"Our industry is shrinking to survive," said Mr. Heimlich.

Fuel prices appear to have already discouraged hiring. The Transportation Department's Bureau of Transportation Statistics reported Tuesday that airline employment increased a slight 0.1% in June from a year ago -- the smallest year-over-year increase since a decrease in January 2007. Employment has increased every year-over-year month since then. But then increases have been in the single digits, percentage-wise, and haven't been nearly enough to return staffing to pre-Sept. 11 levels.

The Air Transport Association estimates that airlines will spend $61 billion on fuel this year, $20 billion more than they spent in 2007. It blames fuel prices in part for the closing of 10 airlines since 2007.

Airlines have begun offering voluntary severance packages to employees in the hope of avoiding layoffs.

"Right now we're seeing flight attendants weighing their options, deciding if this is something they can do, they want to do," said a spokeswoman for the Association of Flight Attendants, which represents more than 55,000 workers at 20 airlines.
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Old August 22nd, 2008, 06:20 PM   #29
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Which airlines have most financial staying power?
21 August 2008
USA Today

The recent plunge in oil prices has brought airlines some relief, but they're still facing serious financial pressure from near- record jet-fuel prices and a weak economy. A new surge in oil prices would worsen their losses and force them to spend their cash faster or sell assets to raise money to stay in operation.

USA TODAY airline reporter Dan Reed produced this analysis of the 10 largest U.S. airlines' financial conditions as of June 30, drawing on interviews with industry analysts and the airlines' financial reports. Revenue is for the 12-month period ended June 30, 2008. Debt figures, also as of June 30, are adjusted to include off- balance-sheet leases on aircraft.

Gauging an airline's survival

Unrestricted cash and short-term investments as a percentage of an airline's revenue from the preceding 12 months is a common tool used by financial analysts. They use it to evaluate a carrier's liquidity and to determine how close an airline is to running out of cash. Calyon Securities analyst Ray Neidl considers a ratio of 10% or less to be the danger zone and ratios in the low and mid-teens worrisome. Neidl provided the ratios illustrated below, based on financial data as of June 30.

STRONGEST

28. 5%: Southwest

The industry's discount leader is No. 7 by revenue, but it's No. 1 in profitability.

Financials

Revenue for latest 12 months: $10.5 billion

Debt: $3.2 billion

Unrestricted cash and short-term investments: $3 billion

Unrestricted cash as a percentage of revenue for latest 12 months: 28.5%

Strengths

Strongest balance sheet in the industry, with lots of cash and ready access to capital marketsSterling brand image; highly rated for customer service despite its no-frills approach

Best hedged against high fuel prices through 2012

Weaknesses

Cost pressures rising as growth slows

High fuel prices are pushing fares higher, threatening to send price-sensitive travelers Southwest's core customers to their cars.

Potential cash sources

Banks and others will gladly lend to only U.S. carrier with an "A" credit rating

Equity in its fleet of 540 Boeing 737s that could be posted as collateral on loans.

LIKELY SURVIVORS

21.6%: AMR

The world's largest airline company, with broad global reach, AMR is the parent of American Airlines and American Eagle.

Financials

Revenue for latest 12 months: $23.5 billion

Debt: $14.8 billion

Unrestricted cash and short-term investments: $5.1 billion

Unrestricted cash as a percentage of revenue for latest 12 months: 21.6%

Strengths

Most cash in the industry

In U.S., strong hubs at Dallas/Fort Worth, Chicago and Miami, strong positions in New York and Los Angeles markets; leading carrier between U.S. and Latin America, one of largest between U.S. and London's Heathrow Airport

Weaknesses

Middle-of-the-pack costs would be much lower but for high labor and fuel costs

Poor and deteriorating labor relations, especially with pilots

Mostly old, fuel-inefficient fleet of 960 mainline and regional planes inflates costs; will take years to replace.

Potential cash sources

Airplanes: Many could be sold and leased back to raise cash

Other assets: World's biggest aircraft maintenance operation; American Eagle regional airline; the AAdvantage frequent-flier program

27.4%: Alaska

The USA's eighth-largest airline by revenue is a long-running success story in the West, where bigger carriers largely have been content to leave it alone.

Financials

Revenue for last 12 months: $3.6 billion

Debt: $2.8 billion

Unrestricted cash and short-term investments: $990 million

Unrestricted cash as a percentage of revenue for last 12 months: 27.4%

Strengths

Strong cash position

Lowest costs among the seven conventional network airlines

Strong market position in the Pacific Northwest and West Coast niche market

Weaknesses

Limited assets that can be used to raise cash

Limited geographic market reach

Potential cash sources

Horizon Air regional airline subsidiary

23.2%: Continental

The fourth-largest U.S. carrier by revenue, Continental is seeking government approval for a new marketing alliance with United Airlines.

Financials

Revenue from latest 12 months: $15 billion

Debt: $2.8 billion

Unrestricted cash and short-term investments: $3.4 billion

Unrestricted cash as a percentage of revenue for latest 12 months: 23.2%

Strengths

Strong cash position for its size

Houston hub serves booming energy market; Newark hub serves huge New York market and is a major access point to Europe

One of the youngest fleets among the big carriers

Weaknesses

Little equity in planes, limiting ability to raise cash through sale/lease-back deals

Minimal presence in major foreign destinations such as London, Paris, Tokyo

Potential cash sources

Airport gates and facilities, and international route rights could be sold or collateralized for cash

16.1%: Delta

The USA's third-largest airline by revenue emerged from Chapter 11 bankruptcy reorganization last year and is waiting for government approval to merge with Northwest Airlines.

Financials

Revenue for latest 12 months: $20.2 billion

Debt: $10.9 billion

Unrestricted cash and short-term investments: $3.2 billion

Unrestricted cash as a percentage of revenue for latest 12 months:16.1%

Strengths

Operating costs lowered via Chapter 11 bankruptcy in 2005-2007, though still among the highest

Refocused route network to increase international service and reduce domestic flying

Powerful Atlanta hub is complemented by East Coast shuttle, Salt Lake hub and most U.S.-Europe service of any airline.

Weaknesses

U.S. route system still heavily dependent on smaller markets, where revenue often doesn't cover operating costs

Exposure to lower-fare competition from AirTran in Atlanta

Merger with Northwest would create a short-term cash drain before benefits appear.

Potential cash sources

Airplanes: Substantial value in wide-body fleet for sale/lease- back deals

Other assets: Maintenance division, Comair regional carrier subsidiary and equity stakes in other regional carriers, and SkyMiles frequent-flier program

24.5%: Northwest

The fifth-largest U.S. airline by revenue, it's counting on a merger with Delta to form the world's largest carrier, topping American.

Financials

Revenue for latest 12 months: $13.2 billion

Debt: $9.9 billion

Unrestricted cash and short-term investments: $3.2 billion

Unrestricted cash as a percentage of revenue for latest 12 months: 24.5%

Strengths

A premier U.S.-Asia route system

No. 2 in unit revenue thanks to international network popular with business travelers and strong hubs in Detroit and Minneapolis- St. Paul that face relatively little competition from low-fare carriers

Large fleet of high-capacity wide-body jets

Weaknesses

Highest unit costs among big airlines despite bankruptcy reorganization in 2005-2007

History of difficult labor-management relations; integration with Delta could be contentious

Long-standing reputation for below-average customer service, despite evidence of recent improvement.

Potential cash sources

International route rights

Equity in wide-body fleet

Regional airline and vacation package subsidiaries

STRUGGLING

19.5%: AirTran

The No. 10 U.S. carrier by revenue has the second-lowest operating costs in the industry, but reduced growth and debt are problems.

Financials

Revenue for latest 12 months: $2.5 billion

Debt: $2.8 billion

Unrestricted cash and short-term investments: $485 million

Unrestricted cash as a percentage of revenue for latest 12 months: 19.5%

Strengths

Established low-fare niche carrier in large Atlanta market

Young, fuel-efficient fleet

Largest operator of Boeing 717s, which few carriers fly, giving Boeing a vested interest in keeping AirTran afloat.

Weaknesses

High debt load

Exposed to potential increase in competitive pressure from Delta at Atlanta hub

Slowed growth threatens to push operating costs higher

Limited ability to expand without running into fierce competition from rivals

Potential cash sources

Boeing

29.1%: JetBlue

A onetime Wall Street darling, the No. 9 carrier by revenue, has turned into an underperforming stock due to losses, reduced growth and operational difficulties.

Financials

Revenue for the latest 12 months: $3.2 billion

Debt: $4 billion

Unrestricted cash and short-term investments: $924 million

Unrestricted cash as a percentage of revenue for the latest 12 months: 29.1%

Strengths

Leading discount carrier in the huge New York City market

Lowest operating costs among the 10 largest U.S. carriers

Weaknesses

High debt, with many delayed orders for new aircraft still on its books

Rising costs as a result of slowed growth, air traffic congestion and delays in the New York market

Small market presence outside New York

Potential cash sources

Delivery positions for popular new Airbus and Embraer jets could be sold; LiveTV subsidiary is already on the auction block

Lufthansa could increase its 19% stake

14.1%: UAL

United Airlines' parent, the USA's second-biggest airline company by revenue, emerged from bankruptcy reorganization in 2006.

Financials

Revenue for latest 12 months: $20.6 billion

Debt: $11.1 billion

Unrestricted cash and short-term investments: $2.9 billion

Unrestricted cash as a percentage of revenue for latest 12 months 14.1%

Strengths

Best global service network, with big hubs in Chicago and Denver and a strong position at London Heathrow; a premier network between U.S. and Asia

Recently extended credit card partnership and banking relationships with Chase Bank to raise $600 million in cash and improve liquidity by nearly $600 million more

Weaknesses

Less cash on hand as of June 30 than Delta, Continental and Northwest, all smaller airlines

Aging fleet

Increasingly contentious labor-management relations; pilots union calling for CEO Glenn Tilton's resignation

Potential cash sources

Airport gates and landing rights, and international route rights, can be sold or used as collateral

Company claims more than $1.billion in unencumbered aircraft and other assets

17.4%: US Airways

The USA's No. 6 carrier by revenue, it is the most exposed to low- cost carrier competition.

Financials

Revenue for latest 12 months: $11.9 billion

Debt: $8.3 billion

Unrestricted cash and short-term investments: $2 billion

Unrestricted cash as a percentage of revenue for latest 12 months: 17.4%

Strengths

Updated, fuel-efficient fleet

Recent climb from worst to first in on-time performance; also big improvements in other customer-service categories

Strong presence in heavily traveled Eastern USA

Weaknesses

Highly exposed to competition from low-cost carriers, especially Southwest at US Airways' Phoenix and Philadelphia hubs

Second-weakest balance sheet among top 10 U.S. carriers

Feuding between employees of the old America West and the old US Airways has delayed some of the benefits of 2005 merger and created tense internal relations

Small international market presence leaves US Airways more exposed to volatile, less-profitable domestic market

Potential cash sources

Could sell some assets, such as takeoff and landing rights or renegotiate loans

Sources: Calyon Securities, the airlines, USA TODAY research
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Old August 22nd, 2008, 06:26 PM   #30
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Quote:
Originally Posted by Magellan View Post
Air France KLM has already reported that it will make a significant loss next year if prices continue to remain high.

BA have also indicated that their profits will be wiped out (BA took the hit in 2006/7 and eliminated all low margin sectors and so in 2007/8 was able to benefit from having high margin returns on all operations; if they had not done that they would now be in the same boat as Air France KLM and Lufthansa).

There is speculation that Austrian Airlines will be the next to crash/disappear after Alitalia, followed shortly there after by SAS - it is only a matter of time until their average fuel charges per passenger exceed the income. The main problem here is the lack of robust fuel-hedging.

BMI is likely to disappear next year. It has been profitable until now, but it has a size disadvantage and so it does not benefit from economies of scale. Lufthansa has rights to the controlling block of shares should the owner decide to sell.

Virgin appears to be about to announce a tie-up/merger with a Middle-Eastern airline - once your part of the family you possibly get access to fuel discounts - nice one Richard :;

The strength of the Euro against the Dollar has provided some protection to the EU based airlines, but it, and fuel-price hedging, is only delaying the inevitable impact of high fuel prices. What is most significant is that they will have sometime to weather the storm and to adjust their operations unlike the US airlines which are having to react precipitously.
That's interesting to know. For some reason I had the feeling that all those airlines you mentioned except for Alitalia and BMI were rock solid stable airlines. I hate seeing airlines go especially Alitalia. I was told it was a rarity but I had excellent service when I flew them round trip from Rome to Catania back in 2007.
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Old August 22nd, 2008, 06:33 PM   #31
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That's interesting to know. For some reason I had the feeling that all those airlines you mentioned except for Alitalia and BMI were rock solid stable airlines. I hate seeing airlines go especially Alitalia. I was told it was a rarity but I had excellent service when I flew them round trip from Rome to Catania back in 2007.
In that case you might want to have a look at these threads:

EU Airlines, Regulation, and Consolidation:
http://www.skyscrapercity.com/showthread.php?t=622947

Alitalia Financial Woes:
http://www.skyscrapercity.com/showthread.php?t=134146
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Old September 3rd, 2008, 06:32 AM   #32
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United Airlines reverses course, trans-Atlantic coach passengers food still free
2 September 2008

CHICAGO (AP) - United Airlines travelers across the Atlantic can leave their money in their pockets when the food cart comes down the aisle.

The nation's second-largest carrier on Tuesday backed off from a plan to begin charging for coach-class meals on its flights to Europe after some customer backlash. The carrier's letter to customers on Tuesday began "Thank you for your direct, candid feedback."

"We heard loud and clear from our corporate and our Elite frequent fliers that they value our hot meal service," United spokeswoman Robin Urbanski said.

Although many carriers have stopped serving free food on coach domestic flights, customers on long-haul flights have been able to count on being fed.

The letter said that with fuel prices so volatile, United would "continue to be proactive in testing new ideas."

United said that on Oct. 1 it will still begin serving cold sandwiches or snack boxes instead of hot meals to business-class customers on about 16 domestic flights a day. United said it would "evaluate the results and determine next steps by the end of the year."
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Old September 3rd, 2008, 06:33 AM   #33
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good!
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Old September 4th, 2008, 01:17 PM   #34
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How much of a cost is inflight services anyway? I bet it is a small proportion of the total cost of a flight.

By depriving passengers of those small but much appeciaciated services would only turn more people away.

Same with their strategy of nickel-and-diming customers for small services.
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Old September 6th, 2008, 10:21 PM   #35
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Originally Posted by FM 2258 View Post
Yeah I don't ever read about Transavia, KLM, Ryanair, British Airways, Lufthansa, Swiss, LTU, Iberia, SAS, Aer Lingus or any other European airline struggling amid high fuel prices. Aren't prices for fuel much higher in Europe than the United States?
Europe is traditionally on a 3 month lag to the US (see credit crisis), so itll be hitting them.

However, one reason they might not be hit so hard is because many of the fees the american airlines are only just adding have been part of europe for awhile.

Take SAS. Only one bag allowed, and you pay something like 5 euros per every extra kg. That means, if your second bag weighs 20kg, you pay 100 euros, much higher than the 15$ fee US airlines have added.
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Old September 6th, 2008, 10:28 PM   #36
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United said that on Oct. 1 it will still begin serving cold sandwiches or snack boxes instead of hot meals to business-class customers on about 16 domestic flights a day. United said it would "evaluate the results and determine next steps by the end of the year."
Note to travelers: Continental still offers FREE HOT meals to coach class on domestic flights (over 3 hours). Overnight flights also give you a breakfast bread.

Support Continental because as far as I know, theyre the only airline still giving free hot food

(I have no relation to Continental)
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Old September 10th, 2008, 04:26 AM   #37
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American Airlines executive says capacity reductions permanent despite steep fuel price drop
9 September 2008

FORT WORTH, Texas (AP) - Despite the big drop in fuel prices over the last two months, domestic capacity reductions American Airlines has been making are permanent, Chief Financial Officer Tom Horton said Tuesday as he also suggested that the industry could see more consolidation in the future.

American, like other carriers, has announced U.S. capacity reductions due to the high price of fuel, which soared to more than $147 a barrel on July 11. American, a unit of Fort Worth-based AMR Corp., said it would cut domestic capacity by as much as 12 percent after the busy summer travel season.

But since its July high, the price of oil has retreated. Light, sweet crude for October delivery settled at $103.26 on Tuesday on the New York Mercantile Exchange, the lowest settlement price since April 1.

Even so, Horton said firmly in an interview with The Associated Press that the capacity cuts are for good.

"The airplanes that we're grounding are older generation planes," Horton said. "They burn 35 percent more fuel per seat than the new generation planes. So, when you ground those planes, it would be very difficult to bring them back, not just in operations cost but also in maintenance infrastructure."

He added, "So, I would characterize those as permanent capacity reductions."

As for consolidation, Horton said he doesn't think Atlanta-based Delta Air Lines Inc.'s pending acquisition of Eagan, Minn.-based Northwest Airlines Corp. is the last combination the industry will see.

"I think that the U.S. industry has more consolidation in its future," Horton said. "I don't know if it's today, or tomorrow or five years from now. And I think the entire global airline industry has more consolidation in its future."

Earlier this year, American had alliance talks with Houston-based Continental Airlines Inc., but Continental later struck an alliance deal with UAL Corp.'s United Airlines.

Asked if American might consider a full combination with another airline in the future, Horton said the airline tends to keep quiet about consolidation issues and the company's strategic activities.

"But, if you look at what we've done, when we see an opportunity that we think makes sense for our company and our shareholders and our employees, we'll do it," Horton said.

Asked if that meant that if down the road a merger makes sense for those constituencies, American would consider it, Horton responded, "Yeah. We never rule anything out that's in the best interest of shareholders, employees, customers."
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Old September 10th, 2008, 04:27 AM   #38
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US airlines not planning to cut fuel surcharges
9 September 2008

FORT WORTH, Texas (AP) - U.S. airlines have no immediate plans to reduce fuel surcharges they tack onto the price of a ticket. That's even with recent decreases of oil and fuel prices.

Most carriers have topped their fare hikes with increases in fuel surcharges, ranging as high as $170 per round trip in the United States and more for international flights.

Fuel accounts for up to 40 percent of the budget at many of the biggest airlines, topping labor as their biggest single cost.

The price of oil slid today below $104 per barrel, its lowest closing price in five months.

Other than Dallas-based Southwest Airlines, all U.S. air carriers lost money in the first half of this year. They said today that it's too early to eliminate the surcharges.

Southwest Airlines doesn't have fuel surcharges, and legacy carriers like American and Houston-based Continental Airlines often waive the fuel surcharge on routes where they compete with Southwest.
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Old September 11th, 2008, 04:34 AM   #39
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TABLE - U.S. airlines August traffic data

CHICAGO, Sept 9 (Reuters) - The following table lists August mainline operational data for the 10 largest U.S. airlines by passenger traffic, compared with the same month a year earlier:


Code:
          ----Traffic----    ---Capacity---    --Load factor--
           RPMs   pct chg     ASMs  pct chg     pct     Change
American     12.16      -2.9    14.57     -1.1    83.5   -1.5 pts
Delta*       11.84      -0.5    13.89     -1.6    85.2   +0.9 pts
United       10.29      -5.1    12.18     -3.1    84.5   -1.8 pts
Continental   8.22      +0.7     9.69     +2.0    84.9   -1.0 pts
Southwest     6.63      -5.2     8.88     +1.5    74.6   -5.4 pts
Northwest     6.54      -1.6     7.44     -0.9    87.8   -0.7 pts
US Airways    5.72      -0.5     6.67     -1.3    85.8   +0.7 pts
JetBlue       2.56      +1.9     2.94     +1.2    87.1   +0.7 pts
Alaska**      1.79      -1.0     2.17      0.0    82.5   -0.8 pts
AirTran       1.97     +12.7     2.25     +8.8    87.3   +3.0 pts
NOTES: Traffic is measured in billions of revenue passenger miles, the distance traveled by paying passengers.

Capacity is measured in billions of available seat miles, reflecting the number of seats available for sale and the length of the flights.

Load factor is the percentage of seats occupied by paying passengers and change is in percentage points.

All data are from the airlines. *Figures for Delta include data for regional affiliates. **Alaska Airlines doesn't include unit Horizon Air.
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Old September 12th, 2008, 04:27 AM   #40
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Continental says luggage fee to generate $100 mln

CHICAGO, Sept 11 (Reuters) - Continental Airlines on Thursday said it expects to see $100 million in revenue and cost savings related to a new $15 dollar bag-check fee.

The fourth-largest U.S. airline also said it is comfortable with its bookings over the next six weeks. The outlook, which was issued in a government filing, came as experts speculate on how massive capacity cuts, fare increases and unpopular fees will impact travel demand.

Shares of Continental gained 9.52 percent to $17.60 in early trade on the New York Stock Exchange, outpacing a 4 percent gain in the Amex airline index <.XAL>. The rally in airline shares accompanied a dip in the price of oil to $100.10, its lowest price since April.

"Continental's language appears an effort to assuage largely misplaced investor fears that demand is poised to crater," JP Morgan analyst Jamie Baker said in a research note.

The airline industry has been struggling to offset the high price of jet fuel. A recent drop in oil prices has pressured fuel prices and given airlines some much-needed relief.

Continental introduced the fee to check a single bag last week, matching those implemented by rivals this year as carriers attempt to offset skyrocketing fuel bills. Continental said the $100 million would be generated through the new revenue as well as cost savings from not having to check as many bags.

The airline, which plans to trim its domestic mainline capacity 11 percent in the fourth quarter, said it expects that number to be down 2.9 percent in the third quarter.

Continental said consolidated domestic bookings for the coming six weeks were about 2 percentage points higher than last year.

The carrier also said it has hedged about 53 percent of its expected consolidated fuel needs for the third quarter.

The company expects to end the third quarter with about $2.8 billion in cash and short-term investments.
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