Delta + AirElite Charter Operation = Corporate Bigwig Airlines – BNET
Delta’s looking to combine corporate charter with commercial ops. Good stuff.

Airline satisfaction at three-year high – Marketplace
JD Power came out with its annual survey results. You know how I feel about these things, but I’m always willing to comment.

Airports Council International – North America Marcom Conference
Thanks are due to Addison over at IAG for filming about 7 minutes of our panel this week at the ACI conference.

Why Airlines Need to Focus on Winning the War of Words on Congestion -BNET
April was a great month for on time performance, but it shows something about why airlines should be more aggressive at talking about congestion.

May Air Traffic Shows Early Signs of a Strong Summer as Unions Start to Ramp Up Campaigns – BNET
May traffic numbers are in, and they are very strong. It’s going to be a good summer, and that means unions will start ramping up campaigns for raises.

US Airways: How Not to Cope With Bickering Pilots After a Merger – BNET
US Airways east pilots are claiming victory in the latest battle with the west, but this is a temporary victory that’s likely to simply drag the process on longer and complicate the whole situation.

Virgin America CEO: Why Traditional Carriers Can’t Innovate – BNET
At the ACI conference in San Diego this week, David Cush gave the keynote, and while I agree with some of what he said, I disagree with other points.

Anyone been paying attention to things down under lately? Virgin Blue has a new boss, and he’s apparently bringing his previous experience with Qantas with him. There are going to be a lot of changes in the next year, and those will all be aimed at targeting the business traveler. Virgin Blue is movin’ on up . . .

Lately, Virgin Blue has been under fire for having weak profits as demand softened and capacity continued to grow. (Attention US airlines: profit is what you get when you actually bring in more money than you spend. Yes, it’s possible.) New CEO John Borghetti has come in pledging to shake things up. In fact, it appears that his version of shaking things up is to move closer to Qantas, his former employer.

John had been with Qantas for ages, and he left after he lost in the race to replace the last Qantas CEO. What better way to say “I love you” than go to your company’s nemesis? Nice move.

So now at Virgin Blue, John is trying to bring some Qantas over and that’s something of a gamble. John confirmed that he will be bringing a business class product onboard instead of just a premium economy. New 737s that are on order will get the upgrade first, it seems. They will be focusing on the business traveler now, which is an extension of what had been cautiously started awhile ago.

Why are they doing this? Well, he thinks there’s money to be had. I thought it strange when he suggested, “we must reduce our reliance on [the leisure] segment if we are to reduce the earnings volatility that goes with it.” Throughout this recession, it has been business travel that has seen the greatest volatility. Maybe things are, um, upside down in Australia.

But he’s not ignoring the leisure market which has strong competition from Jetstar and a lot less strong competition from Tiger. It really does sound like he wants to be all things to all people. That’s a strategy that has rarely worked well.

We do know that he’s hoping to rally around the Virgin Blue name. Thanks to an agreement around the Virgin name, the airline isn’t allowed to use it outside of Australia. That’s why South Pacific and New Zealand flights fall under the Pacific Blue name while long haul flights are as V Australia. John seems to be hoping to find a way to use the one Virgin Blue brand and created a unified presence.

We also know that the airline is trying to cozy up with Air New Zealand for Trans-Tasman flying. This could be their effort to harmonize products between the two.

In the end, I find myself wondering how this strategy is going to work. I understand that with earnings suffering, you have to do something. (Take note, American.) I don’t know enough about the market to know if this is the right thing to do, but it is a big change and it does carry some risk that instead of serving one segment well, they’ll serve all segments poorly.

Delta’s promised wifi updates have been few and far between, but yesterday we found out that the airline is basically done with its plans. Now that they have an armada of wifi-equipped planes, what are they going to do with them?

The A319, MD88, MD90, 737, and 757-300 fleets are completely done. There are only three 757-200s and five A320s that don’t have it. All the 767s that are going to be outfitted (the ones that fly domestically) have been completed. It’s only the DC9-50 fleet which lags with 25 airplanes left.

We know that people can use airborne wifi to surf the web, but we also know that for the most part, people aren’t using it very much yet. But with this entire fleet outfitted, Delta has shelled out millions. There has to be a way to make that money back, right? Here are some ideas, some uh, more serious than others.

• Integrate wifi capability into the seatback screens where available. Virgin America is working on this as we speak. It will allow all those people who don’t carry smart devices to pay to surf the web.
• Open up an off track betting outlet for people on the plane who love them some horse racing.
• Allow crews to use wifi to deal directly with Delta in order to reaccommodate passengers who are going to misconnect when they land.
• Instead of the old smoking vs non-smoking, open up porn vs non-porn sections.* (*Should only be done on airplanes with leather seats.)
• Have cached entertainment options on a server on the airplane that can be streamed to each seatback system or computer via wifi.
• Start sending spam from Delta email addresses to people on the plane for cheap Viagra and penile enlargement.
• Enable random chat with other GoGo users on other aircraft. Talk about cloud computing . . . (Rimshot, please.)

I know you’ve got better ones than I do. What say you?

And we’re back with part two of my interview. By this point, we were furiously bouncing down the 101 on our way to SFO, so I had to work hard to fit all my questions in.

Cranky: Talking about the onboard product. I saw the new seats yesterday in Business, but nothing is changing in First Class, right?
Harry: On the A340-300 it’s not changing. On the A330-300 we have a completely new redesigned first class. The reason for this on the A340 is that we did a customer survey that said, “should we do something with First Class” and customers were saying that we didn’t need to do anything. We will do some slight modifications there, but why should we reinvest in something which is not bringing real added value for the customers? Maybe in five years, we’ll learn that the next cycle of product innovation is there that we really should do something. But the product innovation from where we are now with the A340-300 is not that big.

Cranky: So there’s no concern that the product on the A330s is different than the A340s?
Harry: No

Cranky: In economy, it’s a coach seat, big screen. But what are the trends in economy? Do you need to address the product or is it just price?
Harry: Price is very much an issue and that’s why I think the trend is to have a high density economy, with 30 inch pitch and that’s it. We differentiate by having 32 to 33 inch pitch and better service.

Cranky: What about premium economy? Would you consider that?
Harry: No. I don’t think that will ever be a successful product. You have business which is high value and people are willing to pay for it and you have economy which is based on price.

Cranky: But I think we’ve seen business class go upmarket and economy go down.
Harry: Actually, we haven’t seen economy go down. It’s stayed about the same but the price has gone way down, so the value is better now. I remember when we first started offering 999 euro fares to North America and people said that was going to bankrupt us.

Cranky: Now you wish you could get that.
Harry: That’s right. [Laughs] We should all be so lucky.

Cranky: So you don’t see a gap between the two?
Harry: No. People who care about the product will pay for business class and those who care about price will pay for economy.

Cranky: What about connectivity? Are you looking at internet? I know Lufthansa is bringing back internet. Is that something you’re looking to do?
Harry: Not now. We will wait and see how it works for Lufthansa. The question is, how successful will it be? Then we will evaluate again later on.

Cranky: What about mobile phones, people making calls on airplanes?
Harry: No. Our customers have clearly told us that they do not want to hear people talking on the phone.

Cranky: Now, you used to be with Lufthansa, right?
Harry: Yes

Cranky: So how much influence does Lufthansa have on Swiss? What sort of cooperation is there and what about the cultures?
Harry: They’re actually very similar but very different. We’re a smaller company and Lufthansa is very big. For example, Lufthansa comes to us looking for rules and regulations and we don’t have them. We haven’t created them. But we do work together and that’s a good thing.

Cranky: I’d like to go back to Europe for a minute. You were at Thomas Cook, right?
Harry: Yes, that’s right.

Cranky: So what do you see for the European market? Some have said that the premium market is in structural decline in Europe. You have the low cost carriers, and you have the tour operators. It’s a very crowded place. Where do you see the Swiss European operation going?
Harry: Our European business is doing very well. We are trying to provide high value at a good price. The low cost carriers provide a low price but not high value. We provide value to our customers. So I can fly Swiss for an attractive price, which is based on the low cost structure we have, while getting the full service package.

Cranky: And what about the premium cabin?
Harry: It’s very much under pressure, so we have to rethink it. But, business class has an important value with hub connecting itineraries. You can’t fly someone in business class from San Francisco to Zurich in business class and then within Europe in coach.

Cranky: United did that when they had Ted
Harry: Maybe not a good idea
Cranky: Yeah, well it’s gone now fortunately. You could fly over the Pond in business class and then you’d have to fly coach for the 4+ hours to Las Vegas on Ted.
Harry: [Shakes his head]

Cranky: Now, you were talking about cost structure, people naturally start talking about labor. I believe you’re the only airline in Europe to not have had a strike this year, right?
Harry: I think that might be true. [Laughs]

Cranky: As you’re working to reduce your cost structure, are the employee groups helpful with you on that?
Harry: Unions are always complicated. Unions have a very simple approach and this makes it complicated. The approach of the unions is to promise more money for less work and more vacation. The thing you have to do is make them understand the situation. What we’ve been doing is saying, “this is the development of the market and this is what we have to do.” Then we have a discussion where we also get good feedback. They can find a different way to meet the same targets and that’s good. Some of the unions are a little bit stuck in the ’90s which can be a problem. But the overall relation, and this has to do with being a small entity, the overall relation between let’s say the workforce and the bosses is much closer than at a big company. This is positive.

Cranky: Looks like we’re at the airport. I appreciate you taking the time to speak with me.
Harry: Thanks for your creativity of doing this on the ride to the airport.

So there you have it. I apologize that some pieces were edited down a bit, primarily the Lufthansa discussion, because bumps along the road made my recording inaudible.

Well, I was home for almost a week this time before hitting the road again. Fortunately, this time it didn’t involve a time change and it was a mere 1 hour flight up north.

I decided to take the trip in order to see the Swiss inaugural out of SFO. I was actually offered the opportunity to take the inaugural, but after such a busy travel month I just couldn’t bring myself to do it. But there was a lot to see, as I’ve written already on previous posts, so I snagged a roundtrip on JetBlue for a mere $119.40 and was on my way.

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June 2, 2010
JetBlue 1432 Lv Long Beach 1255p Arr San Francisco 223p
Long Beach (LGB): Gate 2A, Runway 30, Depart 2m Late
San Francisco (SFO): Gate A2, Runway 28L, Arrive 6m Early
N547JB, Airbus A320, Forever Blue, 100% Full
Seat 7F
Flight Time 57m

I left home an hour and 10 minutes early because I had to park myself in the remote lot. That was dumb. The shuttle was waiting for me and there wasn’t a soul in the security line. I had time to kill.

The terminal itself was a madhouse, made even worse by the cancellation of a flight to Oakland. Lots of people were in line trying to figure out what to do.

We boarded on time and had a long walk to the airplane. I can’t wait until all this construction work is done. I followed a parade of high school girls on to the plane, armed with their trendy sweatpants and big carry-on pillows. It was a large group of some sort, but I didn’t ask what they were doing.

We took off, I watched TV, we got some drinks, and then we descended. It was an uneventful flight and we had a nice and easy landing.

Our gate was still occupied, but the international gates are common-use. So we waited a couple of minutes and then they just did a swap and moved us to another. Nice. We were still a few minutes early and I went off for the Swiss festivities.

A couple days later, it was time to come back home. I had a friend drop me off at the international terminal at SFO and I quickly made a beeline for the kiosk and printed out my boarding pass. The security line wasn’t too long, but it was slow. I had plenty of time, so I wasn’t concerned. After a few minutes at the gate, it was time to board.

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June 4, 2010
JetBlue 1435 Lv San Francisco 1235p Arr Long Beach 203p
San Francisco (SFO): Gate A10, Runway 1L, Depart 6m Early
Long Beach (LGB): Gate 2A, Runway 30, Arrive 15m Early
N651JB, Airbus A320, BetaBlue, ~50% Full
Seat 8A
Flight Time 1h1m

The flight was about as empty as I’ve seen in a long time. It was probably little more than half full at most, and I had a row to myself. Nice.

As we boarded, I noticed that we were on BetaBlue, the one JetBlue airplane that had that narrowband wifi product which let you check email for free. I was told it was supposed to still be working, but I couldn’t even find the network on the ground.

Once in the air, we passed through some low clouds and had a nice view looking back at the airport. As usual, the second we took off, the TVs stopped working. These TVs, however, instead of simply showing that it was searching for the signal, just wouldn’t let you flip to channels with no reception. Consequently, we ended up just being able to see the four movie channels (pay per view) and the moving map.

The flight attendants came through with their express beverage service with snacks. I hate the express service because you can’t get ginger ale, but I did like the pack of animal crackers. After that, they reset the TV system but that took a good 10 minutes or so. When it came back on, it still didn’t work.

I tried out the wifi on my smartphone, and was able to connect to the server. Unfortunately, that’s where it stopped. I couldn’t get or send email or go to any websites. It just kept telling me that the website I’m trying to reach isn’t supported. I know that’s not true, because I was trying to go to Yahoo and there’s a huge Yahoo logo billboard painted on the plane. It would be nice to see a better error message, but this is going to be disabled soon anyway, so I’m sure they hardly care about it.

At one point, we made a soft right turn and I wondered if there was traffic ahead. Sure enough, an American bird was speeding by and I snapped it in this shot. Cool, huh?

The TVs came back to us when we were well into our descent. I thought that maybe the wifi would work at that point, but it still didn’t. So, I just watched the marine layer below as we drifted down. We landed early and I was at my car in just a few minutes, heading home.