Ah, Thanksgiving. It’s easily my favorite holiday of the year. I’ve been stuffing myself over the last few days to keep myself in top shape for the big meal today.

But for the traveler, there is another reason to love Thanksgiving. Since 1998, my friend Robert Stack has issued his annual letter of joy for all to read. Now, in all its unedited glory, I offer you the true meaning of Thanksgiving for 2006.

Dear traveler,

The windows are opening and the air-con has finally earned a good long rest
for the long, chilly winter that will warrant the occasional sweater. And
with the change of season it is now time to reflect upon the True Meaning of
Thanksgiving.

Thanksgiving is not a time to give thanks.

Thanksgiving is a time to get bumped.

Nothing is ever easy for the airlines. While people rush to fill
seats like never before, the airlines are not yet basking in the glow of big fat
profits. What the economy giveth, fuel prices taketh away, and so we wait,
patiently and eternally, for the glory days of air travel to resume. And
this year brings yet a new fear: the fear of quart sized baggies
overflowing with liquids, creams, gels, and goos of all kinds, gumming up the
security checks and grinding down the patience of travelers and airline
employees everywhere. No, it will not be a beautiful travel dance this
year, since all beauty must fit inside teeny 3 ounce bottles, or be checked away
to airline bag heaven (known by many as “Philly”).

But for the dedicated bumpee, there is a great silver lining to this story.
Big fat profits mean nothing–and more people filling fewer seats means
everything. Bumping is up! Freebies flow forth furiously! All
hopes are pinned on a banner year for the devotee of the bump. While dark
spots persist–the little, er, not so little airline from New York still clings
to its quaint vision of one person, one seat; the desert laborers toil on to
bounce the phantom bookers–the trend is hopeful. For those at Indy have
been punished for their ancient ways; they are now a mere bump in the airline
history books, to be judged harshly for their myopic vision.

As for me, I am poorly qualified to lead the way for this joyous season
with so much potential. I will try my hand on Black Sunday, with a
perfectly jam packed midday flight home. But I am no role model, for I am
flying out on Thanksgiving Day, wimping out on the great potential of Black
Wednesday. And I am not flying on the airline with the big eyes, eating
bigger and bigger airlines at every meal. I may well be be punished with
empty hands and a deep sadness once the airport din subsides. But there is
always next year, and with any luck, the liquids, creams, gels, and goos spilled
over this momentous holiday will have finally been cleaned up by then.

With hopes for blisters on our fingers from signing so many vouchers,

..robert
–
Links to The True Meaning of Thanksgiving, years past:
http://www.rstack.com/thanksgiving/thanksgiving.html

Happy Thanksgiving to all. I’ll be back posting on Monday.

Hey, remember that whole anti-trust post yesterday? Yeah, well, it may have just gotten a little easier for US Airways.

The Wall Street Journal is reporting that Southwest has told Delta and US Airways that they would be more than happy to buy any assets that they would sell them as part of their anti-trust review. If this is true, US Airways should take advantage of this to the fullest.

It’s actually funny that these two airlines could help each other. The old America West management has battled Southwest for over 20 years, especially in its hometown of Phoenix and in Las Vegas. During that time, there have been some nasty spats, but America West certainly found a way to coexist with Southwest and be successful, something that has carried over to the new US Airways. That is no easy feat.

But now, they want to buy Delta, and there could be anti-trust concerns, rational or not. This gives US Airways the opportunity to appease the government regulators by offering to sell off assets to the largest and most well-respected LCC around, Southwest. Assuming US Airways and Southwest could agree on a price and the government doesn’t demand they sell too much, I can’t see how the government could shoot this deal down.

What assets would this involve? Well Southwest really is interested in the east coast, so you can bet Washington/National and New York/La Guardia are on their list. They would love to get their hands on enough slots to making flying there frequently workable. I bet they could also be convinced to take some Charlotte flying if necessary as well.

If US Airways sells slots at these congested airports to Southwest, it opens up low fare competition tremendously, and the government might be willing to overlook some of the smaller airport issues since the benefit to masses of consumers would be so great in this instance.

I’m beginning to think this could actually happen.

Now that it’s been a few days since the merger was announced, I thought I’d back up and take a look at the most questionable part of the deal - whether or not it would pass anti-trust review.

If you assume that the shareholders are motivated by how they can squeeze the most money out of a bad situation, then US Airways should be able to succeed on that front. Then it goes to anti-trust review, an issue which US Airways actually addresses directly in their investor presentation which you can find here.

In their argument (page 23), both the rise of low cost carriers (LCCs) and synergies of the merger should be enough to push this through governmental review. First, they say that the increased presence of LCCs around the country means that there is enough competition to keep fares low. They also say that the synergies occuring from the merger are how they plan on improving the bottom line, not by raising fares, even in markets where there is no competition.

Well, we could choose to believe that if we want, but why not dig in further? How much of an effect would it really have on competition? Are Delta and US Airways really competing hard right now and would this even make a difference? It’s tough to say for sure, of course, but I think US Airways does have a good argument here.

The first thing to look at is which markets are really affected. In my opinion, the South is really the area likely to be the hardest hit because that’s where you’re most likely to find flights by both US Airways and Delta but nobody else. Let’s look a small example here using the North Carolina cities of Jacksonville and New Bern. Both cities see eight daily flights to Charlotte on a mix of US Airways Express turboprops and regional jets. That is the only service into New Bern, but Delta Connection also flies a couple of regional jets per day into Jacksonville. Raleigh/Durham is the closest big metro area to both cities - 98 miles from Jacksonville and only 15 miles further to New Bern, so the impact of having lower fares at a nearby airport should be the same for both.

If there really is a fare benefit of competition, we should see it here. Thanks to FareCompare.com, I can look up fares in these cities. Below I’ve displayed the lowest fares offered for travel in February of 2007, after the holidays and before any Spring Break traffic would be traveling.

You might expect New Bern to have higher fares since there is no competition for US Airways there, but in fact that’s not true. Jacksonville, which has Delta flights, is either the same or slightly higher priced than New Bern.

I would expect that if US Airways bought Delta, they would probably reduce the number of flights from the combined ten per day to at least eight a day, but as you can see in New Bern, that wouldn’t necessarily impact pricing.

To be honest, markets like this are few and far between. There aren’t many cities around that are only served by Delta and US Airways these days, and those that are really aren’t very far from an alternate big city airport with more flight options and specifically, LCC options. In my opinion, the anti-trust concerns shouldn’t stop this deal.

Sadly, I don’t make the decisions, and my insight into the current climate in Washington isn’t that great. It’s entirely possible that the decision won’t fit with common sense, but I certainly hope that it does.

Saturday Night Live fans will get the title reference, but this story is actually no laughing matter.

Near-misses are a big problem at many airports around the country, and it’s an area we can expect to hear more about as new technology becomes available to help prevent the problem. Let’s just hope we can address it before a major accident occurs.

Yeah, it’s a crude drawing, but I think you get the point. It’s time for iPod + airplane.

Apple announced that they will be partnering with Air France, Continental, Delta, Emirates, KLM and United to let customers use their iPod with existing inflight entertainment systems. Customers will be able to plug their iPods in and charge them during flight. At the same time, they can watch videos through the personal seatback screens.

United confirmed they will be installing this, though it will have to be a very limited installation. There are only personal seatback screens on international 767s and 777s, so on other planes it’s not worth much. It’s unclear if you will be able to charge your iPod on other aircraft in the fleet even though there is no seatback screen.

In a very strange turn, Air France and KLM are saying that they have not agreed to install the system yet. They say only informal talks have taken place.

Of course, there are a million ways to answer that question. You could look at available seat miles, revenue passenger miles, number of flights, number of planes, etc. In most metrics, American is still the largest US airline, but if you look at total number of passengers, Southwest has now become the largest.

In August, Southwest carried 8.7m passengers. That passed American, with 8.5m, for the first time. Surprised? You shouldn’t be. Southwest has continued to grow at a healthy pace while other large airlines have stagnated or shrunk since 2001.

Southwest made a big schedule change today, and I think it’s worth analyzing a little further. First, the basics. From the press release, these flights all begin on March 11:

New Flights:

• Baltimore/Washington to Pittsburgh 3x daily
• Birmingham to Dallas/Love Field 2x daily
• Reno to San Diego 2x daily
• Cleveland to Orlando 2x daily

Additional Flights:

• Albuquerque to Las Vegas (+1 to 7x daily)
• Buffalo to Orlando (+1 to 3x daily)
• Burbank to Sacramento (+1 to 11x daily)
• Oakland to Spokane (+1 to 2x daily)
• Las Vegas to San Jose (+2 to 9x daily)
• Las Vegas to Sacramento (+1 to 8x daily)
• Los Angeles to Salt Lake City (+1 to 5x daily)
• Los Angeles to Tucson (+1 to 6x daily)
• Manchester to Orlando (+1 to 5x daily)
• Ft Myers to Orlando (+1 to 4x daily)
• Manchester to Philadelphia (+1 to 6x daily)
• Philadelphia to West Palm Beach (+1 to 2x daily)
• Portland to Sacramento (+1 to 7x daily)
• Philadelphia to Raleigh/Durham (+1 to 6x daily)
• Philadelphia to Tampa (+1 to 4x daily)
• Austin to Chicago/Midway (+1 to 2x daily)
• Dallas/Love Field to St Louis (+2 to 8x daily)
• Chicago/Midway to San Diego (+1 to 5x daily)

Also, on March 17:

• Chicago/Midway to Denver (+1 to 6x daily)
• Chicago/Midway to Seattle (+1 to 4x daily)

And lastly, on April 15:

• Chicago/Midway to Las Vegas (+1 to 12x daily)
• Chicago/Midway to Orlando (+1 to 8x daily)

As you can tell, that is a major change, even for an airline as large as Southwest. Thanks to the Southwest blog, we can now know a bit more about what they were thinking right here.

It appears that the driving force in this schedule was the ability to begin connecting traffic to Dallas/Love Field. That would certainly explain the added flights to St Louis and the new service to Birmingham that was previously surprisingly absent from the Southwest system. Beyond just the local market, many changes have been made to improve connectivity between Dallas and the rest of the system.

You’ll also notice that Chicago is getting a big boost in service. Midway has effectively become a one-airline airport with Southwest truly dominating. This can only solidify their position. I was amazed to see that this will make the 12th daily flight between Chicago and Vegas. United only has 7 out of O’Hare, American has 5, and US Airways has 4. I can guarantee you that Southwest is really pushing a lot of connecting traffic over their Chicago operation on to those flights.

Overall, this is a really interesting change and one that I’m sure a lot of airlines, especially American in Dallas/Ft Worth, will be studying closely.

Did I say that Frontier/AirTran deal was big news yesterday? Um, I take that back. Today’s news is much bigger than that. US Airways launched an $8 billion takeover bid for Delta this morning, and Delta management isn’t happy.

Here are the basics. US Airways says it will offer $4 billion in cash and another $4 billion (at today’s share price) in US Airways stock in order to take full control of Delta. Citigroup will provide the financing for the deal. After the dust settles, the new airline will be called Delta. While Doug Parker, current US Airways CEO, would run the new company, it’s unclear where it would be based (I’d bet Phoenix/Tempe). US Airways says all existing routes would continue to be served but the fleet would shrink by 10%. Somehow, that would require no layoffs at all. If you’d like to read more, including Doug’s very interesting letter to Gerry Grinstein, read the press release here.

My initial thoughts are that this is crazy. They have yet to merge workgroups or even reservation systems in the US Airways/America West merger, and this just seems like a nightmare in the making for integration. The fleets have almost no overlap at all. US Airways is primarily Airbus with some older model 737s and 767-200s while Delta is all Boeing (but no older model 737s or 767-200s). The only shared aircraft is the 757 but they have different engines (Pratt & Whitney on the Delta birds and Rolls Royce on the US Airways ones).

As for route network, well, there seem to be some things that would concern the anti-trust folks at the DOJ. Within the US, this would consolidate a lot of power in the northeast. One of the shuttles between Boston-New York-Washington would need to be sold, but other than that, there is probably enough competition where it could pass. I’m more concerned about the South, personally. There are really only two big hubs in the south - Atlanta and Charlotte - and the New Delta would control them both. There are a lot of communities that would see reduced competition from that, and I’m not sure how the DOJ will feel about it. Internationally, Delta and US Airways have a presence in Europe and the Caribbean, but they don’t have much elsewhere.

On the labor front, US Airways (and America West) are highly unionized while Delta is not at all except for the pilots and some other small groups within the company. That could be an epic clash of cultures that could turn even uglier than the US Airways/America West workgroup integration currently being negotiated.

It’s even more interesting because Delta has effectively rejected the offer and says it will emerge from bankruptcy on its own in the Spring, but I wouldn’t be so sure. This offer was made to the creditors, and they’re likely to jump on it. Right now, there’s a chance they could be wiped out in the bankruptcy proceedings or at best get pennies on the dollar. This deal would give 50 cents on the dollar, and that has to be very appealing.

Greetings from the PhoCusWright conference here in LA. It’s nice to be a conference and still be able to sleep in my own bed at night. If you’re here, please come say hello.

I hadn’t planned on writing much today, but this place has wireless throughout and there was some interesting news involving AirTran and Frontier, so I’m compelled to write.

Today Frontier and AirTran announced a partnership involving two main areas:

• If a customer goes to either airline’s website and wants to make a booking for a city to which only the other airline flies, they will transfer that person over to the other site for booking. This isn’t a codeshare. You can’t buy a ticket using services from both airlines under one code. For example, if you go to www.airtran.com and search for flights from Denver to San Jose, they will tell you that Frontier operates that and send you over to that website. But, you can’t search for flights from West Palm Beach to San Jose because that would involve travel on both airlines.
• Anyone flying on Frontier can earn miles in AirTran’s program and vice versa on any flight.
  In addition, anyone with Frontier miles can redeem them in the AirTran program and vice versa.

This is a big deal, and I wouldn’t be surprised if it’s a sign of closer ties to come. Frontier has been backed into a corner ever since Southwest came to Denver. Though they have tried, they still haven’t been able to really build a viable business outside of Denver with the small exception of Mexican beach flying. On the other side, AirTran has hit some problems of their own. Their third quarter numbers were not good at all (they lost money), and they’ve announced they’ll be slowing their growth next year.

A real merger between these two, with the exception of fleet mismatch, might be a great opportunity for both of them. Let’s see if they go any further with this or if they think that they can gain enough from this limited partnership to make a merger not seem worthwhile. I would think that at least a true codeshare would be desirable, but it does add a level of complexity in every area from the technology integration to transferring baggage. We’ll see if they think it’s worth it.