Browsing Posts published in November, 2010

It’s been a busy year south of the US border with all three alliances trying to make big land grabs in Latin America. So far, it looks like Star Alliance and oneworld are doing the best with Skyteam coming in a sad third. But these alliance loyalties are not static, and we could see more changes soon.

Let’s start with a map showing in which countries each alliance has a presence. This assumes that all announced members actually become members and it doesn’t include non-alliance partnerships. (For example, Gol may work with American but it’s not part of oneworld.)

Latin America Alliance Representation

Now let’s think about some of the major changes that altered this map in recent months. The list is enormous.

And that’s all pretty recent. Crazy stuff, right? So now we see Star Alliance having a stranglehold on Central America now that TACA and Copa will be in the same alliance. LAN rules the southwest of the continent with Avianca-TACA making strides in the northwest. And then there’s Brazil.

All eyes are on the most important market in Latin America these days. The big player in the country, TAM, is currently part of Star Alliance, but there is plenty of speculation about what will happen after its merger with LAN is completed. Will LAN come to Star? Will TAM go to oneworld? Or will the airlines both keep their respective alliances? My money is on the latter, if they can figure out a way to walk that tightrope.

Then again, Star has given itself a little cushion here. If TAM goes to oneworld, then Star will have the option of trying to help Avianca grow its Brazilian subsidiary, if it thinks it’s necessary. And LAN might want to bring TAM into oneworld to try to push off American’s growing relationship with Gol, right? This is better than a Mexican soap opera.

The one thing we can all agree on now is that Skyteam is mostly left out of this game. Sure, Aeromexico is a part of Skyteam but that’s far from where this fight is taking place. It’s a different market entirely. And Aerolineas Argentinas? Yeah, that’s one mess of an airline. As a government-owned entity, it’s not going anywhere, but it’s not exactly the alliance prize of Latin America.

Latin America is booming and there are a handful of very well run airlines down there (most prominently, LAN). This is going to be a fascinating area to watch as alliances look to cement relationships to give the best coverage in the region.

Bad news for fans of transparency. According to PlaneBusiness, Both Comair and Pinnacle, regionals operating primarily for Delta, will stop reporting their on time performance information to the Department of Transportation (DOT). That sucks, but it’s somewhat understandable considering the circumstances. Let me explain.

Comair Pinnacle Stop Reporting On Time Info

First of all, let’s start with the rules. The DOT requires that airlines report their operational stats for public consumption if they have more than 1 percent of total domestic scheduled service revenue. Lame, right? I mean, every airline should be required to report. I’m all for transparency. But that’s a different story. Why are these two pulling out?

Well, Comair has been the incredible shrinking airline lately, and it’s now less than 1 percent of revenues so it no longer has to report. Pinnacle, meanwhile, has never been big enough to be required to report, but it did it out of the kindness of its heart. Now it’s decided to change course. Bummer.

But what would prompt this? My guess is that it’s related to the way the DOT makes airlines report, and Pinnacle and Comair don’t like it. I know we’ve talked about this before, but let’s talk about it again. On time performance and other operational stats are reported by operating airline. So if you bought a ticket on Delta to fly from LA to Atlanta, it will show up as Delta. But if you bought a ticket on Delta to fly from Atlanta to Greensboro, it’ll show up under Comair’s stats and not Delta’s.

Now tell me this, do you care what Comair’s on time performance is? No. You bought a ticket on Delta, so you care what Delta’s stats look like, and that should include all of its regional partners. After all, it says Delta (Connection) on the side of the airplane.

But why would that make Comair and Pinnacle stop reporting? It’s because they are, as regionals, doomed to be near the bottom in general. When the weather goes bad, airport capacity goes down. The mainline airline (let’s stick with Delta since we’ve been using it so far), has to make decisions about what flights can go and when. The goal is to displace as few passengers as possible in those situations, and that usually means the regionals take the brunt of the delays and cancellations because they fly smaller planes.

Let’s look at the November Air Travel Consumer Report, while we’re at it. It doesn’t help to look at the overall numbers, but it does help to look at airport-specific ones because that’s where the weather issues really pop out. And what better airport to look at than JFK, the king of weather problems?

Now, the most recent report was for travel in September and the weather was mostly good this month, but you can still see this effect:

JFK On Time Performance

It’s possible that Pinnacle and Comair are just running worse operations than Delta, but even if they’re running the best operations around, they’re still at the whim of Delta when flights need to be impacted. So why deal with that when you can just not report? Apparently that’s what Comair and Pinnacle have decided to do. That leaves ExpressJet as the only reporting airline that isn’t actually required to report, but since it’s going to be merged into Atlantic Southeast, that’s a moot point anyway.

I really wish the feds would require all airlines to report. This arbitrary threshold of 1 percent of scheduled service revenue is just goofy.

Qantas A380: Airline Earns Black Eye for Poor Customer Response to CrisisBNET Headwinds
The Qantas A380 problems continue, but this time it’s not the airplane that I’m talking about. It’s the customer response.

Executive guide: From delays to fold-out trays – sites that let you vent your spleenFinancial Times
Cranky got a great mention in the FT saying that my site is “the website of choice for business travellers focused on airports and airlines.”

Delta Flight Attendants Reject Unionization Following Northwest MergerBNET Headwinds
Delta flight attendants have rejected unionization, and that’s a big deal.

Virgin America Finally Posts Its First Profit, But It’s No SurpriseBNET Headwinds
Congrats to Virgin America for posting its first profit but it’s not a surprise considering how good things are in the industry right now.

In the Trenches: Handling the Surge From Good PressIntuit Small Business Blog
We had some great Cranky Concierge press in the LA Times recently, but that made me a little nervous.

Qantas A380: Rolls-Royce Faces Uncertain Future After Engine FailuresBNET Headwinds
Rolls-Royce may be an engine giant, but some high-profile problems lately leave the company on shakier ground.

Four Challenges to Virgin America’s Long Term SuccessBNET Headwinds
Just because Virgin America is profitable now doesn’t mean it will be for long. Here are some major challenges.

You guys know that I love writing Cranky, but there’s one problem. I’m spending too much time writing it and not making enough money in return. So, I’m going to do a little experiment between now and the end of the year. Instead of daily Cranky, I’m going to cut back a little and see how things go.

Beginning next week, I’ll write posts Monday, Tuesday, and Thursday (with Saturday having “Cranky on the Web”). Wednesday will now be dark, and I’m going to try something a little different on Friday. Instead of writing a post, I’m just going to put up an open thread. Quite the community has developed around this site, so I figure that every Friday, it’ll be a good place to get together and talk about anything you’d like in this industry in the comments section. For example, want to talk about Star inviting Avianca-Taca and Copa to join? Start the thread down below. Besides, sometimes the comments sections is far more interesting than the post. (Look at the body scanner radiation thread this week for proof.) I’ll certainly jump in, but I won’t be leading the discussion on Fridays as I usually do with my posts.

Let’s see how things go until the end of the year and then I’ll re-evaluate to see if it’s something to continue.

As I mentioned, though I love writing Cranky, it’s not easy to make much money directly from the site. (I really hate ad sales.) Though I have no doubt that nearly all of my success in writing, consulting, and Cranky Concierging (let’s pretend that’s a real word) has stemmed from writing the blog, I just can’t commit to writing as much as I do without being able to, frankly, make more money. I need to spend more time focusing on things like Cranky Concierge (and I have some exciting stuff in the pipeline over there).

That being said, I can’t imagine simply abandoning the blog. I love it too much. I could try charging readers, but let’s be honest, 99% of you wouldn’t pay. I don’t blame you. That’s how things go in the age of the internet. And if 99% of you leave, then this stops being much fun.

So let’s see how things go between now and the end of the year. I’m going to try to put together a reader survey in the next couple of weeks to get some feedback from you, so I hope you’ll participate. But for now, consider this the first open thread. Start your comments below.

It’s time for an Alitalia update, and I can’t say I’m happy about this one. Not only is Alitalia making money, but it may try to sell itself to Air France/KLM (even though success seems unlikely). This airline just haven’t given me much to Alitalia Worst Airline Everwork with in the way of screwing people over lately, and that’s no fun at all.

By the way, just to set the record straight, Alitalia is still the reigning Worst Airline Ever. You might recall the recent post where Mexicana became the new holder of that title, but Mexicana is gone. And as we all know, if the winner is unable to fulfill its duties as Worst Airline Ever, the runner-up steps into its place. So, Alitalia, welcome back.

But Alitalia isn’t acting like the airline that we used to know and hate. In fact, in the third quarter, Alitalia made €39 million. I realize that in this climate, every airline should be able to make money, but if you want to be the worst airline ever, certainly you should still post a loss. And the load factor climbed to a somewhat-respectable 76 percent. Ah, come on. That’s just not right.

At least the first 9 months of the year still showed up €125 million in the red, so there is hope that this is just a temporary blip. But what if Alitalia doesn’t stay around long enough for us to know for sure? Apparently, CEO Rocco Sabelli is revealing in an upcoming book that he’s going to try to sell the airline to Air France/KLM, an airline conglomerate which already owns 25 percent of Alitalia.

Now, this has been a possibility for ages. With Alitalia a member of SkyTeam and firmly entrenched in the Air France/KLM sphere of influence, a takeover seems quite logical. We’ve seen Lufthansa do it with airlines like Swiss and Brussels. It takes over airlines but runs them separately. I wouldn’t be surprised to see that happen with Alitalia.

But Rocco does say in this book (what kind of weird book is this?) that he thinks shareholders won’t go for this anyway. Whew. Without Alitalia around, I wouldn’t know who to pick on. Other bad airlines (like Mexicana) actually go away, but Alitalia, like a diamond, is forever. Then again, if Alitalia keeps up its recent performance, I may have to go fishing for another candidate here. Aerolineas Argentinas, you busy these days? It might be time to pay a visit.


About | Directory | Shop | Awards | In the News | Ethics | Cranky Concierge
Powered by WordPress | SRS Solutions | © 2006-2012 Brett Snyder All Rights Reserved | Terms of Use | Privacy Policy

Bad Behavior has blocked 11575 access attempts in the last 7 days.