I can’t imagine that the juxtaposition is lost on anyone. The British Airways flight attendants are celebrating the next round of strikes while BA goes and posts more than a £500 million loss for the year ending in March 2010. The dysfunction at this airline is frightening and it will have a huge impact on you, the traveler.

You can be excused for thinking of BA as an Egyptian company, because they seem to be getting hit with all of the plagues this year. They’ve had heavy snow and strikes (£43 million hit). Oh yeah, and then there’s the business travel meltdown. Volcanic ash? Yep, but that wasn’t until April so this won’t even hit until the next fiscal year. I wouldn’t be surprised to see locusts next, though that would have far less impact.

Revenue was down £1 billion. Seriously. But low fuel costs certainly helped offset some of that. Still, the airline is hemorrhaging and needs some serious help.

So what kind of help will they get? More flight attendant strikes starting today. They’ll be striking from May 24-28, May 30-June 3, and June 5-9. This time, BA has had more time to prepare, so all flights from London/City and London/Gatwick airports will operate. For Heathrow flight info, go to the BA strike page.

The schedule has been set for travel through May 29. The schedule for travel from May 30-June 4 will come out this Wednesday, and the schedule for travel from June 5-9 will come out on Tuesday, June 1. Remember, just because they aren’t striking on May 29 and June 4 doesn’t mean everything will operate as expected. Planes and crews will be out of place on those days and for a few days before and after the strikes so flights will be canceled. Just make sure to stay up to date on ba.com.

It really seems fairly crazy to me that the flight attendants are continuing on with this strike. There is little doubt in my mind that all the uncertainty around the strikes and the volcano have pushed some people to think twice before flying through London and in particular, on BA. This strike is simply going to hurt more, and BA has made it clear that it’s not going to budge any further. If the flight attendants keep this up, they’ll simply end up being replaced.

If there’s ever been an airline in need of large systemic changes, it’s BA. The flight attendants are fighting a losing battle, but they seem to be fine with that as long as they take the airline down with them. What a mess.

[Original Photo via Flickr]

Union-Vote Rule Change: Bad News for Non-Union Delta, JetBlue – BNET
The National Mediation Board made some rule changes recently and it may be causing some airlines to sweat.

Southwest Airlines’ March Meltdown — Less Than Meets the Eye – BNET
Southwest had a rough March, but it hardly means that things are heading south.

How will the new United-Continental treat customers? – Cleveland Plain Dealer
I talked about some of the issues that the combined United/Continental will face (in the infobox) on the side.

AirTran-Frontier: Once Friendly Airlines Are Now Kicking, Gouging Eyes -BNET
The hammer has finally dropped. The once-cozy AirTran-Frontier deal is now over. It’s been fun to watch the fight.

spice up your flight – antibride.com
If you’re traveling for your wedding, it can’t hurt to try to get some perks.

Mesa Air Group Loses Battle with Delta, and US Airways Must be Smiling – BNET
Mesa’s contract with Delta is toast, and that means US Airways has even more leverage.

Spirit Airlines: Why a Threatened Pilot Strike Could Take the Company Down – BNET
Not quite as dramatic as the title would suggest, but a strike threat at Spirit is a bigger deal than at a larger airline.

United-Continental Merger: Continental Is Taking the Reins, No Question – BNET
Another clue about the leadership team at United/Continental is out there. There is no trace of United President John Tague on the integration team.

Today I bring you the third and last installment of my interview with Republic CEO Bryan Bedford. In this piece, we spend a lot of time talking about religion. Why? Well, Bryan has really brought religion into the Republic business in a big way.

For example, the airline’s vision statement begins with “We believe that every employee, regardless of personal beliefs or world-view, has been created in the image and likeness of God.” It’s become even more of a topic with the integration of the Frontier and Midwest teams that didn’t choose to work for a religious company.

So, let’s get on it with. (Click for Part 1, Part 2)

ON PARTNERING AND COMPETING WITH THE LEGACY AIRLINES

Cranky: With some of the bigger airlines, you’re flying for them and you’re competing against them. I mean, you could potentially have a codesharing agreement, then you’re flying for them on a contract and competing against them. It’s a tangled web. Does that cause any tension?
Bryan: I have to break it into the two geographies. Nobody cared about Midwest. The fact that Northwest had an equity stake in Midwest and we codeshared with them. Nobody cared about that. Obviously you know, with Frontier, United was obviously concerned about it. You know, people prefer less competition and not more, but there really wasn’t in our minds, there wasn’t going to be a strategy where Frontier was going to liquidate.

They were making money. Companies that make money in bankruptcy don’t go away. . . . Frontier wasn’t going away. I think that’s the message, whether they wanted to believe it or not. It was going to be around anyway, so hopefully better to have somebody around that’s rational at the controls than somebody who’s irrational.

Cranky: Although, they could have gone away if Southwest bought them. Then there would have been two airlines in Denver.
Bryan: Southwest was free to make an offer and compete, but at the end of the day, they didn’t lose because of insufficient consideration, they had labor issues. I guess in fairness they didn’t lose, they withdrew.

ON RELIGION AND BUSINESS

Cranky: I know you’re busy so just one last question. From a culture perspective, you said morale is high right now, people are pretty excited, you have a single brand. How has the integration been from the perspective of a Frontier employee or Midwest employee? I know you have a very strong culture here in Indianapolis and I know that you’re very religious. Have you seen any tension between Frontier people coming into this and saying “well what’s going on here. What are we getting involved in?”
Bryan: If there is tension out there, it’s pretty low and people are being civil. The Republic vision statement clearly addresses our feelings that we’re all created in the image of god. It calls us to a higher standard of treating people with respect and dignity. In my mind, it calls us to treat people fairly according to the work that they do. It wasn’t to convert people or proselytize. . . . There’s something more here than just a job. We have people of different faiths, different backgrounds, different ethnic cultures. Most airlines are melting posts. It’s just a recognition of who we are and as long as we work together, we’re going to be successful . . . .

Now, we’re not hiding our faith either. We take positions on issues. Abortion was an issue that we took a position on several years ago. It was very controversial, both internally and externally. But again, it’s down to, whether we believe in the sanctity of life or not. It’s not that we were saying that if you get an abortion, you’re fired. That wasn’t the issue. This is a big meaty issue in our culture and our society and people should understand what we think. And oh by the way, if you are in the position of having an unwanted pregnancy, let us know and we can help. And we had employees that did and we did, we arranged a couple of adoptions.

From a Republic perspective, it’s been such a large part of our culture. People who are looking at joining a company and see this either are turned off and don’t apply or they’re turned on and they come here. It’s our culture. Now you’re being bought as Midwest or Frontier and you’re being brought into this culture and clearly there were some folks that were very offended by that. A very, very small number of folks. Look, it’s America. Most of us have a Judeo-Christian world view, so I think we’re more likely to be aligned on this. That was certainly the case with Frontier and Midwest. Now the media talked about is it right or is it wrong? Should CEOs do this, should CEOs do that? It was very controversial according to the press, but that was good too. You know. I mean, at the end of the day, getting people talking about it is healthy.

Cranky: Well, there’s no reason you can’t do it. It’s a company that you can set it up however you want to set up. This isn’t the government.
Bryan: It is true, there’s no law against it. We certainly don’t have a box that you check on your application: “I believe, I don’t believe.” The only qualification to work here is “do good work.” You can believe in the tooth fairy.

Cranky: Wait, that’s not real?
Bryan: It is to my kids

Cranky: I think it’s perfectly fine. People can choose who to fly, who to work for, what they want to do. I just think about it from the perspective of someone who comes in from a high culture company like Frontier, has a really strong good positive culture, not to say that this isn’t positive, and coming into something else that’s a potentially different feel for someone. And removed as well since you’re in Indiana and they’re in Denver. Was there really a tough transition for people?
Bryan: I thought you were just talking from a religious aspect of the culture. Looking at culture in a much more broad sense of the word, prior to the brand announcement being made, there was tension between all cultures. I mean, for the Republic side, “how is owning Midwest and Frontier going to help me in my daily work?” Midwest people I think understood that the company would be gone had we not purchased it, but still trying to figure out, “who are we and what do we do?”

Same for Frontier. “We survived bankruptcy and we survived being taken over by Southwest. What does it mean now?” And so there’s a lot of post-transaction reflection that all three employment groups were doing and it has been a tough transition.

Making the brand announcement has been like a tonic. People can finally say that we know who we’re trying to be. You can make a decision on whether you like it or you don’t like it. If you say, “well, I don’t like the brand proposition with no first class seating.” Ok, well, act accordingly. We hope you stay, but if you don’t, god bless you. And the majority will stay because they love the industry, they love working for Frontier.

ON LABOR INTEGRATION

Bryan: We also have labor integration issues. It’s interesting that non-represented classes of employees, we were able to hire mediators arbitrators to sit down with both sides and within 90 days we’re integrated and everything is cool. People are now able to transfer around within the larger network and it’s working out pretty well. In cases where we have represented workers in different unions, it’s just a lot more conflict. It’s the classic US Airways east-west stuff.

Cranky: Hopefully it’s not to that extent.
Bryan: Well, it’s not. Look, our world view is if you don’t want to integrate the seniority lists, don’t integrate the seniority lists. We’re ok with that. We’re not merging the companies in the classic sense. We’re not merging Frontier into Republic. Yeah, we own it, but it’s the Airbus operator. It’s always going to be the Airbus operator and a CS300 operator, but it’s going to be a separate certificate. So we don’t care.

If merging the senoirity list is creating tension, then don’t do it. So there are answers. We’ll treat everybody the same. I think the whole seniority integration is just a red herring. It’s more union vs. union as opposed to employee vs. employee. We’re all going to sink or swim together. A lot of our Republic capacity is now in the brand operation, so the brand operation better work.

Cranky: I think I’ve probably kept you longer than you had anyway, so thank you.
Bryan: It was good meeting you.

This trip served a couple of purposes. First, I was meeting up with some airline friends in Chicago for a get together. Second, I was going to visit with a company who makes onboard meals (look for that past soon). And lastly, I was going down to Indianapolis to see my in-laws. It was a long and busy trip, and it couldn’t have come at a worse time. I’ve been incredibly swamped with work and just wanted to stay home and catch up.

In fact, I woke up the morning of the trip not even sure if I was going to go. I ended up deciding that yes, it was worth taking the trip, so I dragged myself together and called a cab to pick me up an hour before the flight. Yes, that’s the beauty of flying out of Long Beach, and JetBlue’s perfectly-timed mid-morning flight to Chicago fit the bill, especially at $144 one way.

I arrived at the airport, snagged my boarding pass (I couldn’t check in online), and realized I was at the north gates. Ugh. See, JetBlue primarily uses the south gates, but there are a couple random flights that they need to stick up north. The security lines there aren’t really able to handle it, so I sat there for 15 minutes waiting to get through. After I was through, I took a seat for just couple minutes before boarding.

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May 6, 2010
JetBlue 934 Lv Long Beach 1030a Arr Chicago/O’Hare 432p
Long Beach (LGB): Gate 24, Runway 30, Depart On Time
Chicago/O’Hare (ORD): Gate E8, Runway 28, Arrive 30m Early
N858JB, Airbus A320, Song Sung Blue, 100% Full
Seat 8A
Flight Time 3h15m

Our plane was parked fairly far away, so we had a nice walk in the pleasant sunshine. The only problem? It was a little warm and I was dressed for chilly Chicago. We pushed back right on time and launched out toward the ocean. After flipping around in the still skies, we pointed east and stayed on a southerly track until we got toward Albuquerque to ride the wind.

I got myself a ginger ale and a meal. Wait, JetBlue doesn’t have meals? I beg to differ. They have a ton of different snacks and you can take as many as you want. I had cashews, plaintain chips, and chocolate chip cookies. It was a pretty good meal, and it was free. Then I sat back and remembered once again why I love LiveTV and don’t care about internet.

If I can go online, I’m going to do work. With LiveTV, I don’t have that choice and I watch things I wouldn’t otherwise watch. I saw a repeat of the previous night’s Stanford – Ohio St volleyball semifinals match. That was excellent.

There were a few cloud layers as we descended, and we headed out over the lake before looping around to land to the west where it was a very hectic week of work and play.

More than a week later, I was so excited to finally come home after being away for 15 of the last 22 nights, and man, was I tired. With such an early morning flight home, I tried to get about 5 hours of sleep, but even those hopes were dashed when the ash cloud rolled over London and I had to help a client out of a jam. (It was a success.)

We got to the airport at 545a for our $175 flight in the darkness with rain starting to fall. Having checked in, we went straight to security where we found a long, disorganized line. We got in the long “expert” line, but after 10 minutes, we were all redirected to the main line. Later, we found that it was still open on the other side so we were just frustrated. It took a whopping 30 minutes to get through security.

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May 17, 2010
Frontier 847 Lv Indianapolis 645a Arr Denver 733p
Indianapolis (IND): Gate B15, Runway 5L, Depart 5m Late
Denver (DEN): Gate A39, Runway 16L, Arrive 5m Early
N904FR, Airbus A319, Grace the Trumpeter Swan, 100% Full
Seat 5A
Flight Time 2h22m

There was a long line of people boarding, so we just got in it. When we were about halfway there (with very few people sitting down), they announced that they would now begin general boarding with rows 15 to 23. Huh? There’s no way all those people who had already boarded were preboarders. When the next rows were never called, the remaining few stragglers of us just walked on the plane and nobody said a word.

Once onboard, we had no trouble finding bin space and took our seats, one row behind Stretch seating. Hmm, does that mean we need to start calling the regular seats Squeeze seating? The legroom actually was perfectly fine and the dark green leather seats were quite comfortable.

We launched into the muck (I don’t remember the last time the weather was good flying out of Indiana) and went through several layers of clouds before finally peaking out just above the clouds at 30,000 feet or so. I love flying in the early morning light.

We had purchased Classic fares which meant pre-reserved seats and free TV. On Frontier, everyone gets free TV until you get in the air, so they give you a taste and hope you want to pay to continue your show. But since we were Classic, the flight attendant came by and swiped his card. He had a list of people who had Classic or Classic Plus fares so we didn’t have to show our boarding pass.

I had a glass of water in the air and then watched some TV. This time it was the Jetsons and Saved by the Bell. Of course, I alternated that with just staring out the window as the clouds fell away to reveal a beautiful early morning view.

We descended in blue skies as I drifted in an out of consciousness. We landed and taxied to the gate where we sat for awhile, waiting for the jet bridge operator to figure out how to make it work. No worries, we were still early and got off without any trouble.

We found our connecting gate and to my surprise, we were on a Midwest-liveried airplane. Despite having flown “Midwest” before, this was my first time on a plane that actually said Midwest on the side.

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May 17, 2010
Frontier 1011 Lv Denver 840a Arr Long Beach 1015a
Denver (DEN): Gate A42, Runway 17R, Depart 15m Late
Long Beach (LGB): Gate 22, Runway 30, Arrive 13m Late
N171HQ, Embraer 190, Midwest color, 85% Full
Seat 8A
Flight Time 2h20m

We entered the jet bridge to see a basket of earphones telling people their TV might be free. The people in front of us picked them up, clearly not knowing there were no TVs onboard the E-jet. I knew this was going to be a problem for the airline.

This airplane had the Midwest blue seats along with the old extra-wide Signature seating up front. This really is the closest I’m going to get to flying Midwest, and you know what? Those coach seats were really comfortable. If you’ve never been on an E-jet, the cabin is narrower but it doesn’t feel that way. Here’s a shot I took of both cabins from the same perspective:

We took our seats and it looked like we would be on time, but we weren’t. No explanation was given but I did see a flight attendant messing with the water in the lav.

I was so tired that after pushback, I closed my eyes and drifted in and out of sleep until about halfway through the flight when they came around with their only drink service. I had ginger ale. The flight was uneventful, though I was surprised to see some thick clouds masking a wintry landscape on the way in to Long Beach.

The flight attendant up front was very friendly and put up with some rather obnoxious passengers on board. She also provided some comic relief when every time she tried to make an announcement, the captain would interrupt. The whole plane was laughing.

Coming in to Long Beach was fun with lots of low clouds that broke just as we came in over the city. Here’s a 5 minute video if you’re interested:

I’m back with part two of my conversation with Bryan Bedford, CEO of Republic (which owns Frontier, among others). In part one, we talked about the strategy that led the company to buy Frontier and Midwest. Today, we get a little more into the weeds with everything from inflight entertainment to competition in Milwaukee and Denver, fees, and more. (Part 3 on religion)

ON INFLIGHT ENTERTAINMENT

Bryan: The LiveTV take rate on sub 2 hour flights is low single digits. People really like it. We tried to get in on the [Embraer] 190s but when we looked at the mission of the 190s, which was thinner, shorter haul markets, we just couldn’t cost justify it. So the next thing was wifi and we’re rolling that out this summer.

Cranky: One of my concerns along those lines is you mix the fleets on routes. I know, out of Long Beach for example, there’s an A318 and an Embraer 190. That’s pretty common. So are you concerned about having the different product?
Bryan: A lot of it comes down to the message. There will be people on the Airbus who want wifi but we’re not planning on that this year. We’re going to see how it does on the E-Jets. So the brand promise is some form of inflight entertainment. Not necessarily LiveTV or wifi but some form will be available on the fleet.

Cranky: 70 seats and up
Bryan: Yeah. There is a connectivity option for wifi for small jets. The small jet brand will be differentiated whether it’s Lynx or Connect. There will be some marketing differentiation so people understand. It’ll be very clear when you’re on an E-Jet flight, this is what you’ll get. The only difference will be LiveTV on the Airbus and wifi on the E-jet. There’s a lot of value in the Ejet, but what it really does is that in a place like Milwaukee, 100 seaters are just too many seats for some of these long, thin markets and 137 seats is WAY too much. [laughs]

ON HUB COMPETITION

Cranky: Looking at the route network as it stands today, you have your two main hubs in the two most competitive cities in the country right now.
Bryan: Yeah, well, we didn’t start that fight.

Cranky: I think others expected you not to be around at this point, so that’s why this fight is going on. What are you seeing right now? Are you at a place where things are going well? Do you see a place where all these airlines can exist at their current levels?
Bryan: Well, first I would say that we were disappointed by our Q1 revenue results. How much of that would be brand confusion, our poor execution on managing technology systems, codeshare process . . . . We learned a lot of hard questions in Q1, took a lot of chances in Q1. We learned another hard lesson that it’s a competitive marketplace and if we aren’t prepared to compete on price, we aren’t going to get the business. We’ve absorbed all those lessons and we’ve hit the cover off the ball in March. We’ve hit the cover off the ball in April. Advance booking numbers into the summer are off the charts. So, it feels really good right now, actually.

We’re less interested today in what the competition is doing. We’re really just into what we’re doing. We’re running a really good airline – 99.9% completion factor, 87% on time rates so we’re putting out a great product in the second quarter and in the first quarter as well but we all suffered from weather events. I think you stay the course right now.

We still have a lot of integration work to do. The brand decision was hard for us to make and it was hard for Midwest, but it was also liberating because now it allows the commercial people to really focus on this is the brand. This is the brand promise. We don’t have to worry about messaging in different ways. That’s good for the employees. We now know that we are one and we are delivering this product. We’ve just gotta execute and the competition will take care of itself.

I do not see the competition exiting Milwaukee. We’re taking traffic from northern Illinois, and we’re paying a pretty price for it. Unfortunately, the discounted pricepoint is something like $60 off to get people to go up to Milwaukee. When they get there, they have a great experience. It’s just a smaller, better ease of use airport that’s more reliable.

It’s taken a lot of discounting to get people to come up there to try us but we hope once they try us, they’ll come back.

Cranky: This sort of goes back to what you were talking about before about people buying on price. What can you do to get people to buy on product or on service?
Bryan: If that’s what I said, I wasn’t clear. I think price is clearly #1, #2 is product.

Maybe it’s the win or tie strategy. As long as we’re price competitive, we believe that we can beat the other guys. We don’t believe our brand is strong enough today, I hate to say it, but the facts are the facts, to get a price premium.

ON WEB BOOKING AND DISTRIBUTION

Cranky: Is there anything in the way people buy that can change to help that?
Bryan: Certainly the other LCCs do a much better job of driving customres to their website.

There’s a huge gap in terms of distribution on our own, whether its via the call center or the IBE [internet booking engine], but that’s an opportunity for us to start selling products in ways where you’re going to find the best deals on frontier.com, we’re going to bundle some things that you can buy online.

Cranky: And that’s already there to some extent. I know for our flight home, we bought the Classic product. It shows it to you, but if someone books through a travel agent or online agent, they’re not even going to see if it’s an option.
Bryan: That’s true. We have a workaround on that but we’ve debated whether we want to roll it out or do we want to make Classic fares available on the GDS. It’s a debate that happens internally, but there is one side of the market that would drive us to make it available.

For example, all of our corporate accounts work through a corporate travel agent. [Classic Plus] is a product that they want. They want refundability, flexibility. They want one way pricing. They want seat assignments. They want free bags. That Classic [Plus] product is what they want, and the only way they can buy is through the GDS. We do have to make that product available to that segment of the market.

Cranky: It’s not today?
Bryan: No, not today. It should be by the summer. . . . Then do we take it out even further? Do we roll it out to all the GDS? But put distribution aside for a second.

ON FEES

Bryan: What we’re really trying to do is give customers choice. A lot of people talk about, “don’t charge me bag fees.” We’ll give you that option. We’ll give you the option to buy a la carte or to buy a bundle. You’re in control. If you really are offended by those fees, then by all means, we want you to buy the bundled product. We obviously want people to buy that.

It’s interesting. On our website we’re getting less than 40% of our sales there. But of that 40% that’s buying, almost 40% of those are buying the bundled product. So the take rate’s pretty high.

Cranky: It’s a huge revenue opportunity.
Bryan: Yeah, I think so. And certainly rolling that out to the Midwest network will help as well. There are lots of opportunities to gain share.

ON CODESHARING

Cranky: Is this something, ya know, you see people interested in codesharing like JetBlue going to SABRE to open up that opportunity. Is that something you’re interested in?
Bryan: Well, we’re SABRE-hosted.

Cranky: But are you looking to pursue codeshares?
Bryan: Well, of course we’re interested. You were in Phoenix so you heard the whole collaboration speech that was given. Just looking at companies that cover huge regions of geography that we don’t touch and the reverse is true. Looking at how we could expand the network. There were discussions pre-bankruptcy with Frontier but of course it takes a lot of time and energy.

I’ll have the final chapter in the next couple of days.