I’m sure many of you were hoping to see a post today on Republic winning the auction for Frontier thanks to labor thwarting the Southwest bid, but I didn’t have enough time to do the research last night to write a post. I’ll have more next week either here or on BNET.
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Every so often an airline comes out with a great promotion that catches people’s attention. It’s easy to put out a fare sale, and those don’t usually get much attention, but JetBlue has put out something that’s certainly eye-catching this week. It’s the all-you-can-fly pass. One month, $599 (plus international taxes and fees), and you can fly anywhere you want in the JetBlue system.

First, I have to say that this isn’t exactly a JetBlue invention. Others have tried it in the past (some in the very distant past), and there are other types of passes like this that still exist today. Most notably in the last decade has been Air Canada’s plethora of pass products, but JetBlue’s effort here is still a great one. For $599 plus international taxes and fees, you can fly anywhere JetBlue flies between September 8 and October 8.

Want to fly every single day? Go right ahead. As long as you can afford the taxes, you’re welcome to do it. You might expect that there would be a bunch of restrictions here, and you’d be . . . wrong. If there is a seat to sell, it’s all yours. The only real restrictions are that you need to make your bookings and changes at least three days before departure. Any changes within three days (or no-shows), and you have to pay $100. That’s a deal. And you get 35 TrueBlue points so you’re a third of the way to a free ticket.

Why the heck is JetBlue putting out such a rich offer? September 8 is the day after Labor Day, and that’s when traffic tanks. Kids are back in school, there are no more holidays in September, and it’s too early for kids to be pulled out of school again for a vacation. For an airline with a huge leisure focus like JetBlue, this is an awful time of year. It’s particularly bad in Florida and the Caribbean where it’s peak hurricane season. Those are JetBlue’s bread-and-butter markets.

So they figure that they can get some people on airplanes with this move. It fits with their brand, and it will get them great press. It already has. Anyone want to take bets on how many blogs pop up with people documenting their 30 days of travel?

I like this move a lot, because it’s creative and it’s simple. Great stuff.

[Updated 8/14 @ 849a to reflect that only international taxes and fees are charge - domestic ones are included]

Isn’t August supposed to be a pretty light month for airline news? This week has been absolutely packed with headlines, and I’m getting tired. Today I’m rolling a couple stories together that involve slot swaps. One (between US Airways and Delta) is huge while the other (between Continental and AirTran) is more of a minor thing. But one thing is clear – things are really moving these days.

The big news is the Delta/US Airways slot swap. Remember the good old days when US Airways was the “big bad predator” and Delta employees wanted to “Keep Delta My Delta”? Apparently those wounds have healed and now they’re playing nice with each other. The basic plan is this – Delta gives its Washington/National (DCA) operation to US Airways and US Airways gives its New York/LaGuardia (LGA) operation to Delta. Delta also had to throw in route authorities for Tokyo and Sao Paulo and they wanted a Pete Rose rookie card to even things out.

Why are they doing this? Well, Delta wants to “win” New York (if there is such a thing). US Airways, meanwhile, thinks the DCA slots can make them a lot more money. Ok, fine. It’s probably a smart move for both considering their strategies. I talk about that more over on BNET today.

US Airways will give up 125 slot pairs (one pair = one takeoff and one landing) at LaGuardia along with its terminal. Those slots are currently used for US Airways Express flights that buzz around the Northeast, primarily in turboprops. Here is what stays and what goes:

Everything else will go to Delta, and it remains to be seen how exactly they’ll use them. They do say, however, that they’ll add or preserve service to 30 smaller cities, including a dozen cities not currently served by US Airways from LaGuardia. They also say they’ll upgrade the props to jets and end up squeezing more than 2 million additional people a year through the airport without increasing flights. Hmm.

So Delta will set up what they’re calling a domestic hub at LGA with an international one at JFK. That’s, uh, not ideal, especially when compared to Continental’s single facility at Newark. But JFK will apparently continue as is for now and LGA will just see more flying to smaller cities. Delta really thinks they can make a go of it.

In terms of facilities, US Airways Shuttle will use the Marine Air Terminal (where Delta currently flies its Shuttle) and the other flights will go into Terminal D gates 7, 8, and 9. Delta will take over US Airways’ current terminal and pour some money into it to fix it up. (Hey, maybe you guys should pour money into that dump over at JFK instead.)

Down at DCA, it’s a different story. US Airways will pick up 42 slot pairs to add to the 175ish that they currently have. Here’s what they’ll add:

They will operate these with Embraer 190s or A319s, so it’s going to involve bigger aircraft than what Delta is using today. As far as facilities go, they need to ask the airport for facilities – Delta doesn’t own anything to give to US airways there, but this shouldn’t be a problem. US Airways is currently profitable at National and they expect this move to add to the bottom line to the tune of $75 million.

Delta will keep flying to its hubs and “select small communities.” Man, Delta is really being cryptic here, and it’s a pretty stark contrast to US Airways. I wish Delta was nearly as open as US Airways has been, but until then we’ll have to just keep guessing at exactly what they’re going to do.

But this slot swap wasn’t quite even, so US Airways has also received a route authority to fly to Sao Paulo. (They’ll go from Charlotte.) They also get slots to fly into Tokyo/Narita which they’ll run from Phoenix . . . eventually. The plan for Tokyo is to start in 2012. Until then, the slot will be subleased back to Delta. They can really start whenever they want, but they figured that it will be 2012 before air travel to Asia has recovered.

And that’s it. No cash changed hands or anything else. It’s just a swap that works for both airlines. This is subject to government approval, and it likely won’t happen until 2010, so transition plans aren’t known just yet.

We also have to talk about Continental and AirTran. AirTran will be pulling out of Newark completely. Its 10 slots will go to Continental. In exchange, AirTran will get what looks to be 6 slots at LaGuardia (for flights to Indy and Orlando) as well as six slots at National (to be used for Orlando and Atlanta). This one makes perfect sense as they play to their strengths. Continental fortifies Newark while AirTran builds in LGA and DCA. AirTran’s service in Newark ends on 10/25 and picks up in DCA/LGA on 11/4.

What a week – my head is spinning.

[Original photos: http://www.flickr.com/photos/tiagochediak/ / CC BY 2.0 and http://www.flickr.com/photos/can10kon10/ / CC BY-SA 2.0]

I was just saying to someone the other day that Virgin America had been really quiet lately, and I wondered what they were up to. Apparently they’ve been working the old Jewish grandma market – they’re heading to Ft Lauderdale from LA and San Francisco. That’s kind of a weird move, but it wasn’t nearly as weird as JetBlue’s announcement of the same route a couple hours later.

Thanks to the early demise of Virgin America’s relationship with Direct Air, the airline has some airplanes lying around. So they’ve decided the best place to put that is on two daily flights between Ft Lauderdale and both LAX and San Francisco beginning November 18, just in time for Thanksgiving. LAX flights leave at 1045a and 10p while the returns leave at 7a and 720p. San Francisco flights leave at 1110a and 1140p while the returns leave at 1030a and 830p.

I don’t really get this one. In the past, David Cush told Ben Mutzabaugh over at Today in the Sky, “I think we’ve been pretty clear with people that we want to go to major business centers and primary airports.” Um, right. Ft Lauderdale is definitely not the primary airport in the region. That title falls to the insanely expensive airport down in Miami. So I asked Virgin America spokesperson Abby Lunardini what the rationale was and whether or not this meant they would now consider Midway in Chicago.

When we looked at demand and competition in the South Florida markets, we saw there was no direct service from FLL-SFO and little on FLL-LAX. Also, only about 1/3rd of Bay Area travelers are taking non-stops at present to South Florida – so we saw a pretty compelling competition story. Secondly, Miami has a significantly higher cost per passenger – so to keep fares low this was a consideration as well. Finally, when we looked at the market we found that FLL’s central, convenient location feeds the entire South Florida market and has a larger catchment demographic that fits with our model of service. We’re focused on population centers where our flights resonate with travelers that typically have higher expectations of service and amenities – and we think this is a perfect fit.

I think Midway vs [O'Hare] is a somewhat different story – in terms of competition, demographics, demand, etc. [O'Hare] is a market that currently has no low-fare carrier service from LAX or SFO to [O'Hare]. We do still hope to bring our award-winning, low-cost service to [O'Hare] in 2010.

I understand what she’s saying, but I’m not convinced there’s enough traffic to make this work. I’m also surprised that this is the next best option for the airline. In LA, there is more than just a little competition. Spirit and Delta both fly a daily redeye as does JetBlue out of Long Beach. On the return, Delta has a morning flight, JetBlue an afternoon flight, and Spirit an evening flight. Fares for random Wednesdays in October are showing up as low as $209 roundtrip including all taxes. Meanwhile, you can get a one way walkup tomorrow for $273, cheaper if you connect. I’m not convinced this is an underserved market. In fact, Delta has cut one frequency and shrunk the aircraft used. American has pulled out entirely.

If Virgin America is looking to stimulate the market with low fares, there isn’t much room to go lower. Out of Miami, however, it’s American that’s the only competitor with a half dozen flights a day – a very similar market to what they see at O’Hare except there’s only one mainline competitor instead of two. American can support its flights thanks to extensive connections to the Caribbean and Latin America, something Virgin America won’t have. Fares in the local market are a little higher than Ft Lauderdale, though as mentioned, the costs are way higher.

Out of San Francisco, there were no nonstops to Ft Lauderdale until today, but Virgin America’s schedule makes connections fairly competitive timing-wise. But now they’ll have to contend with JetBlue which announced nonstop flights today on the exact same route. What the heck? I’d be surprised if JetBlue made a rash decision here. When asked, the airline confirmed for me that this had been in progress before Virgin America’s announcement.

My guess? I’d say that JetBlue probably had the route on their list of possibilities, but Virgin America’s announcement moved it up. And the fact that they’re starting the flight the day before Virgin America and using the subheader in their press release “First nonstop service from SFO to Fort Lauderdale”? Pretty tacky if you ask me.

But JetBlue does have something that Virgin America does not, or so they say. The second subheading says it all. “Easy connections available to the Caribbean.” That’s a good way to fill up planes, though when you look at their schedules, only San Juan and Cancun have remotely acceptable connections this winter. (And those connections are really only good one way.) Hmm, this does seem rather hasty, actually.

So Ft Lauderdale is likely to be blessed with low fares to the west coast for awhile. Jewish grandchildren in California should be very afraid.

[Updated 8/12 at 1057a: Looks like Spirit has decided to welcome Virgin to Ft Lauderdale on its website. Take a look below]

Yesterday, Southwest submitted its complete bid to buy Frontier and I have to say that I like what I’m seeing here. There is a lot going on in this bid, and if they win, it will have a huge impact on customers. We could be looking at the possibility of Southwest coming to a slew of new, smaller markets on top of other big domestic and near-international ones. That doesn’t mean this would be an easy merger (they never are), but for the price, the benefits could be huge.

Southwest ended up putting its bid in at $170 million for Frontier and its Lynx subsidiary (more on that in a minute). Republic has also, as we know, submitted its bid. So, the two will bring their proposals on Wednesday and the auction should take place on Thursday. That’s when we’ll know who wins. At first look, the Southwest bid is better for creditors, but that’s the stuff I write about on BNET. Here, I want to talk about what will happen for the customer.

First, Southwest says that if it wins, it only wants to take 40 out of the 51 airplanes in the Frontier Airbus fleet. So my guess is that almost immediately you’ll see a cut in frequency on overlapping routes. Look at Denver to Vegas, for example, Combined they have 15 flights a day. They don’t need that, and it’s a similar situation on other overlapping routes as well. So then where will the 40 remaining planes go?

They’ve said that it will take 24 months for a full transition from Frontier to Southwest. So at the end of those 24 months, the Airbuses will be gone and they’ll have been replaced with 737s. Until then, they won’t be dropping any cities. (They will, however, be dropping Dallas/Ft Worth in favor of Southwest’s existing Love Field service.)

On a media call today, someone from Atlanta asked about their Atlanta plans. Southwest execs said that they do intend to keep flying to Atlanta initially under the Frontier name and eventually as Southwest. I asked them about Washington/National and whether they would be able to keep the beyond-perimeter slots that Frontier owns. They said that they think they’ll be able to, but they’re still studying it. So they want them for sure.

They will also be keeping Anchorage and Mexico flying. Of course, this could all change once the transition is done in 24 months, but for now it makes sense to try them out and see how they work. If they’re happy with the results, then they’ll keep them. If not, well, they won’t. It’s a great test bed for future opportunities. Oh, and Frontier is profitable right now so it’s a pretty nice testbed to have.

But the most interesting thing to me is the fact that they have decided to include Lynx in their bid. Originally, they weren’t sure about that, but they’ve decided to keep it. That means that they want those Q400s and they want to start offering service to smaller cities. It was more than a year and a half ago that I wrote this:

That’s why I think that ExpressJet could do very well if only they were Southwest Express. The connection to a large airline’s frequent flier program and access to passenger feed from a broader route network would be exactly what they’d need. Just look at the routes that are working here and you can see them fitting into the Southwest network quite nicely.

Now I have high hopes that this is what will happen. Though instead of the high cost Embraer regional jet, they will use the very cost efficient Q400 turboprop. This could be big if it works.

On the call, Southwest made it clear that it didn’t really know how this would play out. There was even discussion about having someone else possibly operate Lynx for Southwest, but none of that has been decided. I imagine that labor will dictate what happens there. If they can get reasonable rates from the flight crews, then they might try to keep it in house. I hope that’s what happens because an outsourced operation could be very problematic for Southwest.

All I know for now is that this acquisition could open up an incredibly large range of opportunity for Southwest. It gets them into Atlanta and probably Washington/National. It puts them in Mexico. And it gives them a second fleet type (Q400s) that can serve a ton of routes that aren’t currently on their map today.

Oh yeah, and they eliminate a competitor in Denver and make the place profitable. That alone makes Frontier worth buying for $170 million or more, but there is much more that’s possible. While the basic purchase of Frontier isn’t a bold move, what they might end up doing with it certainly is.

They just need to make sure that they keep the Southwest culture intact. The people piece is the most difficult and most important by far.

You knew it wouldn’t be long before the “Save Frontier” groups got together to rally for their airline. There are now a few efforts going, but I’m afraid that none of these are likely to have any impact.

Initial bids to bring Frontier out of bankruptcy were due by August 3 and only the Republic and Southwest bids were received. Assuming that both turn in complete final bids by the end of today, then the judge will have to decide which of the two is the winner.

The Republic bid keeps Frontier as a separate brand, so that’s the one that Frontier employees and fans are rallying around. An employee rally was organized last week, but turnout was 150 people at best (and probably less). At least one customer has taken the initiative to put out SaveFrontier.org (thanks, Things in the Sky). So will any of these help?

I doubt it. The judge is supposed to do what’s best for the airline’s creditors. Either of these bids is likely to produce a decent ending for the airline (though very different ones) but a higher price is better for the creditors. So, if you want to save Frontier, don’t bother with a rally or protest. Instead, get on an airplane to Indianapolis (Frontier and United will both you get there nonstop) and start talking to Republic management about increasing their bid.

If you’re an employee, you could talk about concessions and wage reductions. The more you can do to reduce costs, the more Republic could consider increasing their bid, I assume. Of course, if Southwest wants to win this one, they will. So your efforts could be futile, but it has a better shot at having an impact than just marching around.