“American Airlines Inc. wants to train 4,000 managers to replace its flight attendants in case Association of Professional Flight Attendants members walk off the job.”
That’s the lede in a story from the Dallas Morning News.
Let’s hope it’s all just a blustery bluff, of the double-dog-dare-you variety, that’s meant to give the union second thoughts!
Three years ago American Airlines got permission from China to fly between Beijing and Chicago. The service has been delayed several times, most recently because the Chinese government wanted American to use operating slots in the middle of the night. “Slots” is industry jargon for arrival and departure times.
The service is now scheduled to begin May 25 and the slots are no longer in the middle of the night. They’re late in the evening: 9:30 pm and 11:59 pm, Beijing time. That’s according to the Dallas Morning News.
The bnet blog has a good overview of the situation.
Why does any of this matter to us? Because easy connectivity to Asia is increasingly important for economic development. The American Airlines service between Chicago and Beijing is great for us because it means you can fly from Springfield to Beijing with just one connection, through Chicago. When Asian companies come to the United States, looking for a place to set up shop, this is the sort of connectivity they look for.
Another point…
The American Airline slots in Beijing can affect the price we pay to fly there. That’s because United Airlines also flies from Springfield to Beijing, via Chicago. The airline that has the best slots will likely charge the highest fare.
American and JetBlue airlines will soon work hand-in-hand. The American press release sums it up this way:
No word on whether JetBlue will become part of the oneworld Alliance, of which American is part.
Japan Airlines will stay with the Oneworld Alliance and, by extension, American Airlines. Read more about the decision from the New York Times.
Read more about why you should care in this previous flight blog post.
Beginning May 1 American Airlines begins charging eight dollars for a blanket and pillow on flights lasting more than two hours. Read more about it from the Dallas Morning News.
The past few weeks we’ve been reading about the financial woes of Japan Airlines (JAL).
The Associated Press sums up JAL’s plight: “The airline incurred its biggest-ever quarterly net loss of 99 billion yen ($1 billion) in the three months to June, and has forecast a net loss of 63 billion yen ($701 million) for the current fiscal year to March 2010.”
American Airlines, Delta and Air-France have apparently been pursuing investing in JAL. American already has a lot of interest because it’s a JAL codeshare partner.
Against the backdrop comes a cheeky story from TheStreet.com. The website reports that Delta is trying to replace American as a JAL codeshare partner. TheStreet quotes aviation analyst Michael Boyd, who puts the codeshare struggle in context:
Why should we care about any of this? East Asia is one of the fastest growing parts of the world (speaking from a business point-of-view). It’s also a region underserved by the world’s airlines, so there’s lot of potential for airline growth. That’s why American and Delta are duking it out.
Keep in mind that Springfield is served by both American and Delta. So the outcome of the fight will directly affect our air access to East Asia. That’s important from an economic development perspective. When businesses consider moving to Southwest Missouri, some of them want to know how easy it is to travel to other parts of the world — particularly places like East Asia. If the outcome of the fight between American and Delta diminishes our East Asia access…or dramatically improves it….well, you get the idea!
The American Airlines web site is returning some bargain Springfield fares this morning. These are fares for this weekend only…
You know what? A year ago fares to those small Texas cities were routinely running between $800-$1000.
See if you can get one before they’re gone: http://www.aa.com/aa/netsaaver/viewNetSAAverHome.do
Jason says:
“With all the cuts American Airlines have made over the years in STL, I would like to know what you think the issue(s) is. And what the airport could do to improve and possibly attract another airline to have a large presence located there?”
The most recent American cuts in St. Louis are due to the the recession and the resulting decline in airline revenue. But to really understand what’s going on we need some historical perspective…
Remember the airline TWA? Before the American buy out of TWA, in April 2001, St. Louis was a major hub airport. It was one of three TWA hubs: Atlanta, New York Kennedy and St. Louis.
When American bought TWA St. Louis lost it’s major hub status. From our point-of-view, at least, that status transferred to Dallas/Ft. Worth International (DFW). Before 2001, TWA flew hundreds of Springfield customers every day to St. Louis to make connections. Now those Springfield customers fly American to DFW to make connections. Bottom line: American uses DFW as a major hub rather than St. Louis. That’s a simple way of putting it, but from our point-of-view it’s accurate. The buy out of TWA brought on a long and slow decline of air service in St. Louis that continues to this day.
You ask what this airport can do to regain St. Louis service? Very little. The connections most Springfield customers need to make are no longer available in St. Louis. They’re to be found at DFW or elsewhere. In the final analysis, there simply isn’t enough customer demand for an airline to currently justify a Springfield to St. Louis flight.
If you’d like to really dive into a business anaylis of what’s going with American and St. Louis, check this out.
“Southwest Airlines will temporarily halt flights on three routes early next year as it deals with a decline in air traffic and tries to bend its schedule to fit seasonal demand.”
That’s the gist of a story today from the Associated Press and it’s a sure fire sign of how weak the airlines expect air travel to be during the next few months.
Along with that bad news comes word of more job cuts at American Airlines. Read more here.
Mike blogs this:
“Hey what’s going on? I hear about Branson getting AirTran with service to Atlanta and Milwaukee. Now they got Sun Country airlines with service out of Minneapolis on a 737s and to add AirTran uses 717s. What do you think will happen? Do you think their fares will be consistently lower b/c they use large aircraft? Are any of the airlines at SGF talking about lowering prices?”
Let’s cut to the chase and then explain why. We don’t think the airport south of Branson will have much impact on our airport. Why? Because it caters to a very select crowd and the service will be very limited (in terms of options that if offers customers).
There will be SW Missourians who use it, but probably not in significant enough numbers for Springfield airlines to notice. If (and it’s a big if) significant competition does emerge, it’s likely that Springfield airlines will respond by cutting fares. And that would be good for customers at both airports.
Mike…I’m not picking on you, but I need to challenge a couple of your assumptions. First of all, a larger airplane does not, in and of itself, mean lower fares. Fares are determined by the fare structure, or, if you will, the business model being used by the airline. Simply put, an airline can have “low fares” on either big planes or small planes–depending on the business model and fare structure that the airline uses. There are dozens of variables that an airline juggles that help determine fares. The variables include the average distance traveled on an airline’s route system, the size of its route system, the cost of fuel, the cost of labor, the cost of airplane maintenance, airport fees and charges, and, in the case of Branson, the amount of compensation received from the airport. The list goes on.
I sense that you’re assuming that fares will be lower at the Branson airport and that they will be consistently lower. That’s a huge assumption.
With all airlines prices go up and down. They have fire sales. They have introductory fares. And then there are the factors that customers sometimes forget about. For example, let’s suppose you see an advertisement for AirTran that says you can fly from Branson to Atlanta for $79 one way. Well, that’s good if you just want to go to Atlanta. But what if you’re ultimate destination is somewhere else? Let’s say you want to go to San Francisco. What’s it going to cost you to fly to San Francisco from Atlanta? Is the total cost of flying from Branson to San Francisco less than the cost of flying from Springfield to San Francisco? Probably not. Of course, right now, we don’t have anyway of knowing because the Branson service doesn’t have a track record.
Now let’s talk a little bit about what we do know about: the service in Springfield.
Our airport has non-stop service to 12 destinations (on May 3, when we start service to Los Angeles, we’ll have 13 non-stop destinations). Five of those 13 destinations are on a low-cost airline, Allegiant Air. It’s not unusual to find roundtrip fare on Allegiant for less than a hundred bucks. That means that sometimes you can go to Las Vegas, Orlando, Phoenix, Tampa/St. Petersburg and Los Angeles for less that $100.
As for the other three airlines in Springfield (American, Delta/Northwest and United), there are good deals out there. In the past week I chatted with someone who found roundtrip fare between Springfield and Cozumel, Mexico for $330. That’s on American! Another person told me about just booking roundtrip fare between Springfield and Seattle for $340.
Don’t believe it? Check out one of those web sites that hunts for low fares. Here’s some of what airfarewatchdog.com found on Friday:
• $185 roundtrip to Chicago O’Hare on American. No minimum stay
• $213 roundtrip to Houston IAH on American, No minimum stay.
Or how about the weekend sales? Here’s a sampling:
• Albuquerque, NM $202 roundtrip. United.
• Chicago O’Hare $186 roundtrip. United.
• Dallas/Ft. Worth, TX $200 roundtrip. American.
• Manchester, NH $264 roundtrip. United.
• Missoula, MT $266 roundtrip. United.
• Spokane, WA $274 roundtrip. United.
• Washington Dulles, DC $220 roundtrip. United.
• White Plains, NY $250 roundtrip. United.
People who say fares are always higher in Springfield are out-of-touch!
That’s probably more answer than you wanted Mike; I hope it all made sense within the context of your questions.
