It always comes in waves.

Back before 9/11, air traffic had hit record high levels and airports were starting to feel the strain. Stories like the one where Northwest flights sat on the ground in Detroit for hours on end during a major snowstorm caused customer anger to reach new heights.

It got to the point where Congress began debating a customer bill of rights. In the end, the airlines narrowly averted regulation by agreeing to a voluntary customer service commitment called Customers First. The commitments were worded basically the same for every domestic airline because it came from the ATA. Instead of listing them here, I’ll give you links to a handful if you’d like to check them out:

• American
• Continental
• Delta
• Northwest
• US Airways
• United

After 9/11, most people forgot about these commitments. There were fewer flights in the air and a lot fewer passengers which meant less congestion and better on time performance.

As you can see from the DOT traffic info, traffic really started climbing again in 2003 and delays began to mount. There have been periodic reports about how the airlines haven’t really kept their promises, but it took something major to get people really talking about this again.

Thanks to a horribly delayed American flight and a well-timed article by Scott McCartney in the Wall Street Journal, the issue has returned to center stage. This particular flight was diverted to Austin due to thunderstorms and sat on the ground for 8 hours. McCartney’s vivid description certainly fanned the flames. The article begins:

After hours of sitting on the runway, the toilets on the American Airlines
jet were overflowing. There was no water to be found and no food except for a
box of pretzel bags. A pregnant woman sat crying; an unaccompanied teen sobbed.
The captain walked up and down the aisle of the MD-80, trying to calm angry
passengers. At one point, families with children lined up to be bused to the
terminal, but a bus never came.

Now, a movement is underfoot once again to regulate the airlines and their customer service commitments. This latest movement can be found under the banner of Coalition for Airline Passenger’s Bill of Rights. If you’re interested in seeing the details, head on over to their blog and read the bill of rights in the column on the right side.

What do I think about all this? Now, I’m generally not a fan of piecemeal government regulation. When the airlines came out with their Customers First commitment, I thought that would be the end of it. Unfortunately, the airlines didn’t take it seriously and have not lived up to the commitments they made, so it makes it harder to defend them. If the airlines made commitments, there should be some requirement that they actually abide by them.

Some of the new requested commitments should still be left to market forces. If one airline is quicker at responding to customer complaints than another airline, customers will choose that first airline if it’s really important to them. Of course if an airline doesn’t respond to any complaints at all, Dateline will pull out a hidden camera and give them all the bad press they could hope for.

Same thing goes for delay notification. That is one of my pet peeves, and if I knew that one airline was better at keeping customers informed, I would probably shift my business that way.

That being said, there are some basic commitments here that I think should be regulated by the government because they involve health and safety. These include providing for special needs passengers and ensuring access to food, water, restrooms, and medical help during long delays.

In the end, I’m not a fan of the government meddling in bits and pieces unless it involves health and safety. Beyond that, if you’re going to reregulate the industry, do it completely instead of poking your head in wherever it’s politically desirable. If the government really wants to encourage improved customer service, some sort of incentives (ie mail contracts, new route awards, etc) or tax credits (ie tax credit for RFID investments for bag tracking) should be used unless they want to back up and regulate the entire industry all over again.

AirTran has a lot going on these days. First and foremost, they continue to beg and plead Midwest to let them buy the airline. But that doesn’t mean that everything else is standing still. Nay. In fact, they’ve announced some route expansion in the last couple of days. And once again they’re under attack by JetBlue. Never a dull moment for TAFKAV (That would be, The Airline Formerly Known as Valujet.)

So how is that merger attempt going? Not so well. Apparently Wisconsin laws are pretty strict when it comes to hostile takeovers. Since Midwest doesn’t want to marry AirTran, those laws are coming in handy right now. The latest is that Midwest won’t hand over its shareholder list to AirTran and AirTran is suing them under a New York statute requiring they do so. Wisconsin laws, however, may prevent Midwest from having to comply. In short, this merger is going nowhere fast right now. Midwest continues to move forward with its plan to stay independent, and the airline just announced new Seattle flights yesterday.

And what about AirTran’s new flights? Well, first of all they’re going to begin summer seasonal daily flights between Atlanta and San Diego on May 24. Not quite sure why that’s seasonal. You’d think San Diego would be big enough for year round service, but maybe they need those planes elsewhere during the winter.

Meanwhile, in their ongoing quest to find another minihub, they’ve decided to push in St Louis. Now there’s an airport with a lot of room. Ever since American gobbled up TWA, there has been plenty of open terminal space. AirTran moves in on May 8 with four daily flights to Atlanta. Beginning June 7, they’ll have a daily nonstop to Orlando as well. I imagine that if these flights do well, there will be a lot more coming. Then again, AirTran has a habit of starting and stopping flights at the drop of a hat, so this could go the other way as well.

And lastly, in yet another example of when copying is not considered to be the sincerest form of flattery, JetBlue announced they’ll start flying from White Plains (New York) on March 28. What does this have to do with AirTran? Well once again, JetBlue has entered markets right after AirTran starts them. These guys can’t get a break.

JetBlue will have two daily flights to Orlando, one to Ft Lauderdale, and one to West Palm Beach. Not surprisingly, AirTran has an identical schedule in those markets though the flights are at different times. JetBlue is making a habit of this, and I’m sure AirTran is not happy.

Just another week in the life of AirTran.

Spirit is definitely a unique kind of airline. Just a few years ago, they were a small airline flying ratty old MD80s out of their Detroit hub as well as sending cold weather travelers down south to warm up. Here is their route map from January 19, 2001.

It’s not much to talk about. They had pressure from Northwest in Detroit and ultra-competitive routes like Chicago - Los Angeles were certainly not helping the bottom line. Now 6 years later, it’s a very different airline. Here is the current route map.

As you can see, Detroit it still there, but the focus has moved south to the Caribbean. The airline has taken their all-new Airbus fleet (the MD80s have been thankfully retired) and based most of their operations in Ft Lauderdale these days. The seem to be happy with this strategy because they continue to expand at a rapid pace.

On Jan 16, the airline announced flights to Aguadilla (Puerto Rico) beginning in April. January 18 brought an announcement of flights to Port-au-Prince (Haiti) at the end of March. Just yesterday, Spirit said they’ll start flying to St Maarten (Netherlands Antilles) in April. They have enough planes to fly these routes now, but they clearly want to continue this aggressive expansion in the long run. That’s why today they decided to add 30 new Airbus A319s beginning in 2009.

This may all sound great, but that’s a lot of seats that need to be filled. How are they going to be able to pull it off? Well they’ve definitely gone for the lowest common denominator. The airline has decided to be an extremely low cost and low fare carrier.

At the beginning of the year, Spirit announced they were down to a 5 cent cost per available seat mile excluding fuel. That compares quite favorably with most airlines, so they do have an edge on that side of the equation. Of course, that means they can charge less and theoretically be able to profit at fare levels where other airlines can’t. That has been the strategy as of late.

The airline has had plenty of offers promoting low fares including one that Business 2.0 ranked the eighth dumbest moment in business in 2006. The airline launched a campaign to help find Jimmy Hoffa by digging for his remains online. The reward involved fares from $39. While it is clearly tasteless, it got the job done for the airline by generating a ton of press.

More recently, $39 would be considered an expensive sale fare. For awhile, they were stuck on the $8 fare sale, but this year has brought the 5 cent fare sale. Now they’re starting to sound like Ryanair and other European airlines that charge very little to get on board but then nickel-and-dime you for everything else you might want above the basic transportation. It’s a model that has worked very well in Europe but has never really taken hold here in the US. Along with Allegiant and the soon-to-be launched SkyBus, Spirit will try to see if the model can work over here.

So far, some of the indicators are pointing in the right direction from a customer interest standpoint. Check out this chart from Alexa comparing the traffic rank of the Spirit website to both Northwest and AirTran.

As you can see, Spirit has really skyrocketed since the beginning of the year. They’re basically neck-and-neck with the much larger AirTran now in terms of traffic. That means they’re doing a good job of directing bookings to their lowest cost channel - their own website.

But the news is definitely not all good. Even though the airline isn’t public, they do have to release financial information to the government. The most recent release was for the 3rd quarter of 2006 and it doesn’t paint the prettiest picture.

For Latin flying, the airline had an operating loss of $3.3 m for the quarter. That’s worse than the $705,000 loss from Q2 and the $1.6 m loss from Q1. They’re losing even more on their domestic operation. Net loss for the entire airline for Q3 was almost $16 m. Clearly, that’s why they’re moving toward the Caribbean quickly. They at least lose less money there than they do in the US. That sort of strategy still doesn’t work. You’ll run out of money at some point.

Hopefully the airline has plans for turning this situation around, but it’s not going to be easy. Look for more Caribbean flying and cheap sale fares to lure people in to the website, but those fares will be very limited. They need to start charging more here soon or the money may run out.

I’ve had friends come back from vacations with harrowing stories about turbulence so bad they thought the wings were going to fall off. Of course, it didn’t happen, and it’s extremely unlikely that it could happen.

I came across this video this morning which is a 3:35 piece of the PBS series “21st Century Jet” about the 777 showing what kind of testing they did on the 777 wing.

As you can see, they bent that wing up more than 24 feet from level and only then did it break, at more than 150% of the strongest force that could expected in flight.

And this isn’t the only wing testing they do. They also flex the wings up and down for long periods of time to simulate sustained periods of turbulence.

Why is this the NFL playoffs edition? Well, because I want to watch the games this afternoon and I have a lot to talk about, so I’ll keep it short and sweet. (Go Bears and Colts)

• United Joins US Airways in Mileage Cutoff - Following US Airways’ lead, United has reduced its mileage expiration date from 3 years to 18 months. In other words, if there is no activity in your account over 18 months, your miles are gone. Remember, even buying flowers counts as activity, so you don’t need to fly.
• Delta Kicks Off Jockeying for 2008 China Routes - The ink is barely dry on the award to United for 2007’s China routes but the competition for 2008 is now underway. Though 2007 was only for airlines already flying to China, 2008 is for anyone. That’s why it’s no surprise that Delta kicked off the competition with a bid for its first China service - Atlanta to Shanghai. Though it’s too early to handicap this race, I’d say Delta has a decent shot here. if they handle it right.
• Continental Heads to Athens - Ramping up for the summer season, Continental announced daily flights between Newark and Athens starting June 7. This is going to be an interesting year in Athens as US Airways also announced Philly - Athens service. I’ll be surprised if all these flights do well.
• Frontier Announces First Embraer Flights - You may remember that Frontier announced they’d be contracting with a regional airline to fly the new comfortable Embraer 170 jets to smaller cities from Denver. Well, soon after announcing Republic had won the bid, Frontier announced that the first flights will be from Denver to Louisville twice daily beginning April 1. This is all part of Frontier’s strategy to find places where they can avoid Southwest. Though Southwest does fly to Louisville, I’d be surprised to see a nonstop flight between the two cities.
• United Beefs Up Denver As Well - Just 30 minutes after Frontier’s release, United came out with their own Denver expansion. Flights to Dayton on United Express begin April 24, flights to Raleigh/Durham also begin that day, and Express flights to Kalispell (Montana) begin June 7.
• A New Way from the West Coast to Germany - Germany’s LTU will begin scheduled flights between both Los Angeles and Las Vegas and Dusseldorf in Germany. Flights begin May 3 and operate 5 times a week to LAX and twice a week to Las Vegas.
• Merger Mania Begins - People have been talking about industry consolidation for a long time, but it now looks like it’s actually happening. Well, sort of. Caribbean Star and LIAT are well on their way to merging in the Caribbean. All flights will be sold under the LIAT code. All the other action involves Northwest. The airline has agreed to buy Mesaba, one of its regional airlines which has been knocking on death’s door. Also, Pinnacle, a Northwest regional, will buy Colgan Air, a small turboprop operator, for $20 million.
• Odd PR Firm of the Year Award - I’m guessing most people don’t see China Southern’s press releases, but they really are a sight to be seen. The headline on the latest release is “BOFFO! BOFFO! BOFFO! China Southern Airlines Close to 50 Mill PAX Mark in ‘06.” I’m not sure what kind of press the three “Boffo” mentions are going to get them, but it certainly got them a place in this
  

The 747 has been around for a long time. In fact, the 747-100 had its first commercial flight with Pan Am 37 years ago this Sunday. So as the plane approaches its fortieth birthday, you’d think it would be on its way out, right?

Not so much.

The program was given new life back in the late 1980s with the 747-400 version. That was the first version to have a new cockpit which required two instead of three people to fly it as well as other big improvements. As orders for that plane wind down, the 747-8 has been launched to carry the torch.

Just yesterday, Boeing announced that the interior on the 747-8 will be much improved. There is a new mockup which showcases these features.

Pretty slick, huh? This shows you the larger windows (equal to the size of windows on the 777) and overhead bins embedded into the ceiling to allow for more headroom and a more open feeling. You can also see the cool lighting that can be changed depending upon the time of day. There’s also a curved staircase up to the upper deck right as you walk in. Here are some more pictures if you’re interested.

As you look through these pictures, be careful. The seats are just what Boeing put on there and not necessarily what the airlines will choose to use. Any lounges or cool sitting spaces are completely at the discretion of the airline, so it’s not going to mean much.

In case you’re not impressed, how about this flashback to an old 747

(photo credit: http://members.tripod.com/~gerardfoley/olga.html)

Yeah, that’s what I thought.

It’s tough to tell exactly what’s going on at Expedia these days. First, it appeared that American had pulled their fares for international travel and premium cabins due to not being able to come to an agreement on costs with Expedia. Now it appears there may be more to it.

Expedia had initially responded that they pulled American’s flights because those were being sold through Worldspan and they don’t want to use Worldspan.

Now there’s word from The Beat (subscription required) that Delta is also having its flights restricted from displaying in Expedia. The article says Delta has confirmed that they had nothing to do with the change. It was all Expedia’s decision.

I’m not sure what these guys at Expedia are up to, but clearly they’re trying to reduce their costs and regain some leverage. Unfortunately, this means that customers using Expedia aren’t going to see a very good comparison when they use the site.

Apparently, Pacific Wings thinks there aren’t enough airlines in Hawai’i. To remedy the situation, they’ve decided to start up PW Express to fly between Honolulu and both Lanai and Molokai as well as between Kahului (Maui) and Molokai.

I’m not quite sure what makes them think they’re going to succeed here. That is not a big market and they plan on having up to 14 daily flights on the Honolulu - Molokai run! To be fair, it’s not like they’ll have many seats. They use the mighty Grand Caravan.

Oh yeah, that’s one sweet ride. If you do happen to find yourself needing to go to Molokai, definitely try these guys. It’ll be a nice scenic ride and all seats will go for $29 each way. Now let’s do the math. Nine seats at $29 means total revenue of $261 per flight. Ouch. That’s not much. To be fair, they do get government subsidies for the Molokai route - just over $330,000 a year - so that should help them make money, but 14 flights a day is way too much.

We’ll see how long this one lasts.

Man, looks like I posted too soon. This afternoon, Virgin America announced that they’ve made some pretty hefty changes to their ownership structure that should make it very difficult for the DOT to turn them down now. You can read the full 190 page order here (PDF).

What exactly did they change? Well, here’s what they’ve said in the press release with additional information I pulled from the actual order.

• Virgin Group will give up one board seat so that it now only holds two. The other six voting directors and one non-voting director will be US citizens.
• Virgin Group will give up most of its rights to veto and to give consent on “various aspects of Virgin America’s operations or decision making” while US investors will retain those rights.
• Virgin America will now have a relaxed brand license agreement with the Virgin Group. The DOT had originally objected partially because they interpreted the agreement as prohibiting Virgin America from flying outside of North America or from codesharing outside that area with anyone other than Virgin Atlantic. Virgin America’s response is that the interpretation is incorrect. In fact, the airline can fly or codeshare outside of North America as long as it doesn’t use the Virgin name. Now they’ve expanded the agreement to allow Virgin America to completely drop the Virgin America name if they so please and then the restrictions on brand usage would no longer apply within North America or outside.
• Virgin Group will put all its voting shares in a voting trust with a US trustee approved by the DOT. The trust can only be revoked with the permission of the DOT unless Virgin Group wants to sell its shares to a third party.
• If the DOT feels that ties between Fred Reid (CEO of Virgin America) and Richard Branson (CEO of Virgin Group) are too strong, Fred Reid will be removed from the board or even from the CEO position entirely.
• Both US investment funds will require investors to be US citizens in order to have voting rights.
• The US investors will make an additional $20 million loan to Virgin America that is not secured by Virgin Group.

I must admit that it’s an entertaining read. Virgin America seems to hold nothing back and is really harsh in dealing with the DOT. Though that hardly seems like the right tactic to take, they do address all of the issues raised by the DOT head on.

I can’t say I’m an expert at knowing what the DOT is truly looking for, but this application seems like it will be hard to deny with these additional changes. The thing that seems like it could be most objectionable is the brand license agreement. The fact that they cannot use the Virgin America name to fly outside of North America could still be construed as control over the airline, but I can understand why Virgin Group does it. They do need to protect their own brand, and it hardly seems unreasonable.

I’m impressed that they were able to make such drastic changes in such a short time. Hopefully this means we’ll see them flying sometime soon, but I wouldn’t be surprised to see many further delays.

Virgin America certainly thinks that they should be allowed to fly, so they’ve launched their campaign this morning at letVAfly.com.

They’ve decided that the best tactic is to take this one to the people. You’ll find banners on the site like you see above that are meant to be used on blogs. You can sign a petition on the site as well. The airline has even decided to open up its interiors to show them off and they’ve posted this video on YouTube:

It looks like Fred Reid, CEO of Virgin America is working overtime to look cool by using the word “hell” (oooooh) and saying that they’re “ready to rock.” Um, ok.

The interiors look cool. First class is comparable to an old style international business class, better than a domestic first for more airlines. It’s very strange that they have white leather in first. That’s going to get very dirty very quickly.

Coach has nice looking black leather seats with average legroom. The only real difference I see is in the mood lighting (again, oooooh) and the inflight entertainment system. Oh, and they do have powerports and USB jacks, something that everyone should have.

The system is nice - it has movies, tv, music, etc. In addition, you can enter chat rooms to talk to people on the plane and send instant messages as well. Lastly, you can order food through the system and flight attendants will bring it to your seat.

It’s all nice, as is the whole public campaign, but there’s one big problem here. . .

IT WON’T HELP

The issue is still foreign control, and this type of campaign isn’t going to change it. If anything, it will anger the people making the decisions since it completely ignores the problems that were presented initially. The DOT doesn’t make the law, they just enforce it. This is just another example of Virgin America spending money like a drunken sailor, and sadly it’s not going to get results.

Until the law on foreign ownership changes (as I wish it would), Virgin America won’t get anywhere unless they substantially change their ownership structure.