You know JetBlue for their blue chips, but now they’ve decided to beef up their offerings. The airline quietly started launching buy-on-board meals this week and the result is underwhelming to say the least.

Let’s make one thing clear. The ample selection and large variety of snacks will stay. That’s not changing at all. But there are some people who want something more substantial, so that’s the point of these meals, which cost $6 a piece and are available on A320 flights of over 3 hours and 45 minutes. You would think that an airline like JetBlue would go with something different and exciting, but you’d be wrong. They’ve gone with shelf-stable crap.

There are five different “meals” and only two (maybe one and a half) look even remotely healthy. Even those aren’t exactly appealing. Here’s my list, in order, of the ones that I’d be tempted to try.

Shape Up
This is what they’ve decided passes for something healthy. It includes pita chips, hummus, raisins, almonds, fruit crisps, and snack mix. Is this healthy? Somewhat, but I’d imagine that some of this stuff is, as a friend calls it, “salty death mix” with a healthy look and feel. I’d rather stick with the free cashews, blue chips, fruit crisps, and cookies that they’ll still hand out.

Cheer Up
They have wine on board, so why not have fruit and cheese as well? Delta actually does a good job with that, but then again, they actually have fresh fruit and tasty cheese. JetBlue is going with dried fruit and what I assume to be shelf-stable Swiss, Smoked Cheddar, and Hot Pepper. Not exactly inspiring at all.

Power Up
After the Cheer Up package, this drops off a cliff pretty quickly. Power Up has chips and salsa, some beef jerky, and some pretzels with dip. If they serve this, they better have that drink service going nonstop, because the salt in these will make you thirstier than a ramp agent in Phoenix in July.

Wake Up
For those who want breakfast, you can pretend by ordering this drek. Yep, a croissant in a bag served with jam and butter alongside a Dole fruit cup, chocolate milk, and . . . Cheez-Its? Who decided Cheez-Its were breakfast food? This one is enough to make you ill.

Beef Up
The clear winner (loser?) in the race for the worst meal is this one. Start with what we used to call “funny salami” as a kid (that stuff that would outlast Twinkies in a nuclear blast), add in some crackers and bagel chips, and finish it off with two types of cheese “spread” and some fruit crisps to give it the appearance of being healthy and you’ve got nastiness. I remember when Southwest used to give out something like this on their long hauls, but they’ve stopped, I believe. Probably because it’s awful.

So, really JetBlue? Is the best you can do? I know that people like crap, but you guys don’t usually seem to stoop to this level. I’ll be curious to see if enough people pay for this to make it worthwhile. I certainly won’t.

The SkyTeam alliance got together in New York yesterday to shake hands, kiss babies, and generally feel good about things. See, they were celebrating the alliance’s ten year anniversary with a meeting in New York. While I couldn’t be there, I did get 15 minutes on the phone with Leo van Wijk, the SkyTeam Chairman. (You might remember him from his days running KLM.) Leo had a lot to say, so let’s stop dawdling. Here’s my latest Across the Aisle interview.

Cranky: One of my big questions is always, how do you measure yourself against other alliances? What do you look at to say, this is how we want to prove that we’re the best alliance out there?

Leo: There are two dimensions. One is global coverage. How many destinations can you open to your customers globally? That’s easy to measure. The second one is of course, the quality of the service, which is more difficult to compare and also not easy on an alliance basis to really get reliable feedback from the customers. We work on interviewing the customers and trying to get their feedback but it is, so far, next to impossible to compare them on an objective basis with the other alliances. You can only have the individual preferences of the customers which may be very much determined by where they live and what level of service is available by the various airlines in their hometown.

But generally speaking we recognize that SkyTeam, in terms of global coverage, the number of destinations, is lagging somewhat but not much, behind Star. They have a larger number of carriers but to some extent they’re overlapping, which is something we try to avoid. We look to only attract members where they add something to the existing network, so it’s complementary not overlapping.

Passengers carried, Star is bigger. There’s no doubt about it. In terms of quality of service, it’s extremely difficult to get a good picture. All in all, we see our position as a very clear number two, just behind Star and significantly ahead of oneworld.

Cranky: When you hear from your customers and you look at what Star is doing, what are your priorities? How are you going to become number one?

Leo: Our mission is to be the leading alliance. You become the leading alliance by offering a better level of service, consistency, and seamlessness in connections. Alliances are about connections. For every customer, generally speaking, a direct service with one carrier is preferred over a stopover or a transfer. But once that is not available, and in many cases, that is not available if you fly complex international and intercontinental itineraries, the ease of connectivity and the level of service consistency is the key differentiating factor.

While in the last decade, we have invested primarily and focused on trying to reach global coverage, now that we have achieved that to a large extent . . . I think for the next decade going forward, the competition between the alliances will be in the area of service consistency and seamlessness in connections and transfers.

Cranky: Do you have any specific projects in particular to help facilitate that?

Leo: One that’s very important but not easy to achieve in the short term is co-location at airports. . . . we’re working very hard at this point in time to have a program where we try to build co-location situations, which means all the SkyTeam airlines, or a large part, in one and the same terminal at major international airports.

From there . . . is it a home base of the one carriers, or is it an important business city? For instance, like in London where we have no home carrier in SkyTeam, we jointly operate a facility in Terminal 4, operate a joint lounge, which kind of creates the connectivity and the seamlessness that we’re looking for. So we have used the Terminal 4 London/Heathrow situation as a showcase and a template for future development.

Cranky: And what have you found with London? Is the facility working well? Is there anything you’d change?

Leo: I would say that the lounge and the new standards that we’ve introduced, we’re all very happy with. The joint check in service as a first step is quite good, but what we have not been able to achieve at this stage but we will be able to introduce at a later stage, is to have joint IT applications for check-in, E-services, etc where currently the level of development and interchangeability between SkyTeam partners is not fully at par. So that’s an area where we certainly will focus our attention to focus that further.

Cranky: Here in the US, Delta is branding its premium customers under the SkyPriority name, but that doesn’t translate to people who get benefits throughout the alliance. Is there an effort to standardize the definition of elite or from the alliance perspective do you just have to deal with what the airlines give you?

Leo: One of the complexities in operating in the different parts of the world is that the situations are not necessarily identical. So you have to allow for flexibility to adapt to the local circumstances and the competitive circumstances, but generally speaking, within SkyTeam we have aligned the various frequent flier groups and it is one of the elements for new members that is mandatory to align your frequent flier program . . . to the SkyTeam standard.

So whether you are with Air France/KLM or Vietnam Airlines as our newest member, . . . they aren’t identical . . . because of local circumstances, but the basic setup is identical throughout SkyTeam.

Cranky: You mentioned Vietnam Airlines. A lot of activity is in Asia lately – you have China Eastern coming in, Vietnam just joining, of course you already have China Southern. It would seem there is some overlap there. I know you said you’re trying to avoid that, so what is the strategy in Asia right now?

Leo: Well, between China Eastern and China Southern, there is very little overlap to be honest. China Southern has its main hub in Guangzhou, in the southern part of China whereas China Eastern has its main hub and stronghold in Shanghai. They jointly have a number two position in Beijing so collectively we will see that they have a network that covers all of China.

It is not so different as what we’ve seen in the US with . . . Delta which has a total coverage with multiple hubs in the US and Air France/KLM having a dual hub situation in Europe where KLM covers the northwest part of Europe and Air France the southwestern part of Europe and they’re highly complementary. That’s the same case in the Chinese market which is rapidly growing and geographically as big if not bigger than the US and Europe. I don’t see it as an overlap. They’re very much complementary.

Cranky: So where do you see the biggest holes in terms of coverage right now?

Leo: We did not have a partner in Southeast Asia. With Vietnam Airlines in, the region is covered very well but we can see further additions in Southeast Asia. Clearly the Indian subcontinent . . . is a market where we have not positioned ourselves yet so that’s a white spot we’re strategically focusing on. The two other areas where we feel we can improve our competitive position is in Latin America and Africa.

We have a good position with Kenya Airways in Nairobi, basically the only real hub in Africa. But we believe that with the further growth of the African market, additions to the position in SkyTeam in Africa are certainly, maybe not necessarily the highest priority, but certainly something strategically we’re looking for.

Cranky: What about Australia? I know there’s not much of a presence there yet, but with Delta and V Australia working together and a lot of talk about what Virgin Blue is about to become, is that an area that you’re keeping an eye on as well?

Leo: No, not really to be honest. It is a market that is very difficult to get access to. It is clear that the only real operator with a market position that is of interest is Qantas and they’re in oneworld, so . . . . But there are different ways to deal with access to Australia and Australian markets. So we’re looking at ways to enhance our position not necessarily by finding an Australian partner because that’s not necessarily there, but there are different ways to deal with it.

Cranky: One last question before I let you go. How important are the antitrust agreements and joint ventures to SkyTeam? Do you expect to see more of that between other carriers?

Leo: Yes. Going forward I think that where the differentiating factor is going to be the seamlessness of the service and the effectiveness of the cooperation. We have seen mergers within the different continents, Air France/KLM and Delta/Northwest, we might see more. . . . I don’t beleive that we’ll see mergers between different continents because of the complexity and the manageability of that on the one hand.

At the same time we have proven that if you can operate under antitrust immunity in joint ventures with an intense form of cooperation, [that can] provide a very good alternative. . . . that is probably the model going forward – to intensify the cooperation within the alliance between carriers on different continents rather than seeing mergers.

Cranky: Thanks very much for your time

Leo: My pleasure

I’ve got a nice big backlog of Ask Cranky posts, and I thought this would be a good time to starting clearing that out. Today, we’re talking consolidators.

Can you do a piece on consolidators/consolidator fares? It’s probably the largest aspect of the industry that I’m in the dark about. I’d like to see something with a bit of depth. How do they work? Why do they even exist? At the basic level, I understand that they buy blocks of tickets at a discount. But why can’t the airline just sell them through their own systems with whatever restrictions they want? Are all online agencies consolidators? If not, how can you tell? When are they just fronts for the same thing you can buy directly from the airline? Are there any real differences between Expedia, Travelocity, Orbitz, Cheaptickets, Cheapoair, and others that I’ve forgotten?

Dan L

Ah yes, consolidators. It’s sort of the mystery of the travel world for many people. They have this reputation as being amazing sources of cheap fares, but how can you find them? Are they reliable? What’s the catch? Let’s get started.

For you as a traveler, when you hear about consolidators, bucket shops, and wholesalers, it means the same thing. Discounted airfare. You’ll have the best luck finding these on international routes, in particular in premium cabins, and you can save a lot of money.

For example, we had a Cranky Concierge client who recently needed to fly from Chicago to Hong Kong in business class. American was showing an option on its website for $9,000 roundtrip. We found those same flights on Webjet.com for a mere $3,500 roundtrip. Yeah, big difference.

There are a couple things to keep in mind about these fares. Yes, you can save a ton but there are nearly always additional restrictions. The change fee on this, for example, is $400 plus a $50 Webjet fee, so it’s not entirely flexible. Any changes are required to go through the agency and not the airline, so that can cause issues while you’re traveling. Often you won’t be able to earn miles on cheap seats like these either.

In this particular case, the deal appears to be that Webjet isn’t even allowed to show the airline name. It simply says “Major Airline.” Of course, it’s easy to figure out since it shows flight numbers and flight times. Not hard to put two and two together.

Often the biggest question about something like this is . . . why? The idea is that airlines can find non-traditional outlets to help sell seats that they wouldn’t have sold otherwise. Go to your nearest Chinatown and you’ll find great deals on flights to China at bucket shops around the area. That’s the best way to reach a large audience that can help fill your airplanes. In many places, this is the way they book travel every time.

With the web, things have become more complicated. Cheap fares are offered to the world as soon as they go online, so you would think that this practice would disappear. But it still continues, likely as a legacy of the past. There are good deals to be found, for sure.

But how do you know if these guys are reputable? It’s a lot easier now in the world of e-tickets. Pay with a credit card and as soon as it’s booked, go directly to the airline to check on your reservation. If all looks good, then you’re set. If not, then you can immediately dispute it with your card.

Another thing to keep in mind is that you aren’t necessarily dealing with a consolidator directly. Consolidators will often sell to travel agents, so you can buy fares through retail agents who get the fares through consolidators and you’ll never know the name.

Some places only sell consolidator fares. If you go to Airfare.com, for example, you’ll see that there are very few options given. That’s because published fares aren’t shown. Others just mingle the fares shown, as you’ll see on a site like Travelocity or Expedia. You wouldn’t know if it was a consolidator fare or not at first blush.

I’ve had good luck with Airfare.com, Webjet.com, Cheapoair, and others in the past. You can also go to a travel agent to do the legwork for you, or to Cranky Concierge, of course. In the end, it’s worth checking out because it can save you a lot.

When it comes to mergers in the airline industry, I’ve generally been mildly in favor. I’m not exactly a fan boy, jumping up and down with excitement, but I hadn’t really seen enough negatives to make a compelling counter-argument. Now, I can say that I’ve seen one that’s definitely thought-provoking at the very least.

Last year, Hubert Horan wrote a guest post here on why consolidation over the North Atlantic was bad. Now he’s extended that thought process to oppose the United/Continental merger. In fact, he testified in front of Congress this week and he was kind enough to send me a transcript of what he said.

In short, he argues that these mergers will cause great harm to travelers. I’ve heard that argument before, but it’s never really struck a chord with me until now. His argument breaks down into four pieces.

1) Consumer Welfare Losses From Anti-Competitive Pricing Power Already $5+ Billion and Rising

Hubert argues that since airlines have been granted antitrust immunity over the Atlantic, fares have risen dramatically. This chart says it all:

In 2004, the number of competitors on the North Atlantic decreased, and that led to higher fares. More than just higher fares, it led the Atlantic fares to decouple from the domestic fares that they used to track with. This seems crazy because there was also a dramatic increase in capacity, but it happened and the lower number of competitors are the best way to explain that.

He’s also clear to point out that it’s not the alliances that cause problems but rather the antitrust immunity that allows airlines to coordinate schedules and fares. They were still competitive in regular alliances, but once they started receiving antitrust immunity, competition went down.

2) United/Continental is Part of a Well-Planned, Ongoing Process to Consolidate Virtually All Legacy Network Airlines Into Just Three Competitors That Will Control 80% of US Airline Traffic

Knowing what we know from #1, this shouldn’t make a difference, right? I mean, Continental and United already have antitrust immunity for international flying, so a merger shouldn’t change much. I needed the link between that and domestic flying to understand where the harm would come from. Now I think I understand the argument.

Over the last few years, we’ve seen legacy airlines rush to send their fleets into the international market. Domestically, big markets are covered by the low cost carriers so competition is high, and smaller markets are, well, small. So the big profit potential is internationally for the legacy guys. The problem is that as these airlines grow internationally, they end up squeezing out other competitors from succeeding over the ocean. That in turn makes the domestic network less valuable and that leads us to . . .

3) Domestic Consumers Are Threatened by Weakened, Distorted Competition that Low Cost Carriers Will Not Address; United/Continental Directly Threatens the Independent Survival of US Airways

So here’s where we get into the meat of the argument. Domestically, the low cost carriers are most efficient, and then we see US Airways. (You might remember that they have a cost advantage to make up for their revenue disadvantage, and that means they produce seats more efficiently.) The other legacy carriers continue to grow and dominate the international arena, so they can use those profits to subsidize their domestic operations, but US Airways, despite its greater efficiency, will get squeezed.

US Airways is likely to see reduced feed from partner airlines in this new world. A great deal of US Airways Atlantic traffic comes from Star Alliance partners. Those partners will now be more likely to send traffic via their own joint venture partners, Continental and United because it’s better for them. If Continental and United merge, they can coordinate domestic schedules to make connecting even more efficient within the airline. This leaves US Airways out in the cold and reduces the value of its domestic operation as well.

And that’s why we see US Airways saying that it will merge with someone. It sees the writing on the wall down the road. So that gets us to three legacy competitors.

The low cost carriers will continue to provide great competition on the biggest routes, as they do today, but they have yet to figure out how to compete in smaller cities and internationally. As the legacy carriers bump up their international profits, they can subsidize their domestic operations and be more aggressive with low cost carriers.

Meanwhile, in smaller markets, with less competition, airlines will be less concerned about maintaining service and can cut back to profitable levels. Nobody will step in to fill that void in smaller markets.

But should anyone? I mean, isn’t the point to make airlines healthier? So unprofitable capacity should go away. But . . .

4) Mergers Such as UA/CO and DL/NW Cannot Be Justified on Efficiency/Synergy Grounds and Are Strictly Motivated by the Potential for Increased Anti-Competitive Market Power

In other words, mergers don’t provide increased cost efficiencies or enough “synergies” to make up for the “enormous acquisition and implementation risks.”

Hubert looked at the mergers since deregulation and found only four that were successful. US Airways/America West was because it happened as part of a bankruptcy proceeding which allowed for real gains. The rest happened years ago and were either because two airlines consolidated a hub into one to gain efficiency (TWA and Ozark) or it was a very small, easy integration (Southwest and Morris).

I think this is my favorite quote.

The industry does have financial problems, but those problems will not be solved by suspending the antitrust laws so that mediocre airlines clinging to obsolete business strategies can exercise artificial market power at the expense of consumers and more efficiently run airlines.

Ziiiiiiiiiinnnnnnnngggggggg!

You can read Hubert’s full testimony here and his reponse to Vaughn Cordle’s pro-merger arguments here. I’d recommend digging in, because it’s a good argument.

ExpressJet’s New CEO Targets Costs to Fix the Airline. Duh – BNET
ExpressJet’s new CEO is trying to make his mark by focusing on costs. Shouldn’t this have been the case all along?

Spirit’s Pilot Strike: Management Is Winning the PR Battle – BNET
Regardless of how the strike is going, management is easily winning the PR battle, even though they probably shouldn’t be.

Continental and United: This “Merger of Equals” Isn’t a Great Plan – BNET
They keep talking about a merger of equals, but I’m not a fan of that plan. There are better ways to do this.

When Airports Should Subsidize Airlines – BNET
Usually, airport subsidies fail miserably in attracting sustainable airline service, but every so often, they work.

Good Move: American Protects Its Elite Members From the Unwashed Masses – BNET
American rolls out “Your Choice” and it’s not a bad way to approach a la carte pricing.