As usual, there was great discussion at the Phoenix Aviation Symposium last week, but one in particular grabbed me. Steven Kavanagh, Chief Commercial Officer for Aer Lingus in Ireland has an interesting way of looking at his airline. He wants to be “an expert at producing seats” and then make that a platform for others to peddle their wares. It’s a view that certainly isn’t shared industry-wide, but for an airline in Aer Lingus’s position, it probably makes sense.

This piece of the discussion came up during a back and forth about inflight internet. Steven argued that airlines shouldn’t have to pay to install internet at all and that the internet company should take all the risk. In his mind, Aer Lingus has a captive audience of people on the airplane and other companies, like internet providers, should pay a price to be able to have access to those people. So internet would be installed at the provider’s expense and in addition, a small royalty would be given to the airline for each sale. The bulk of the revenue goes to the internet provider.

You could repeat this with all kinds of products and services. Meals? Sure. Inflight shopping? Why not? Entertainment options? Yep. It’s an interesting way of looking at what an airline does. I imagine the view is colored by the fact that Aer Lingus has tremendous competition from Ryanair on nearly all its short haul routes. It’s tough to compete with those guys, but this kind of model lends itself well to that effort.

Of course, this biggest issue here is one of branding consistency. If you use this model, you’re going to be offering all different kinds of brands on top of your brand and the message can be muddled. That might not be an issue for Aer Lingus or other carriers where brand isn’t considered that important. After all, people make choices based primarily on schedule and price, right? So if Aer Lingus has a good fare at the right time (and it runs an on time airline), then it may think it’s got the idea right.

Others, however, disagree. Take a look at Southwest, for example. Gogo inflight internet has a model that’s somewhat similar to what Steven suggests. That company handles the pricing and takes on some of the risk. They also brand the service as Gogo. Southwest hates that idea, and that’s one of the main reasons it opted to go with a different provider, Row 44. It wanted to control the experience and have it branded as Southwest. Southwest wants to own the entire customer experience; the opposite of what Aer Lingus proposes.

Part of that may be that Southwest has one of the better brands out there (despite the recent problem of holes in 737s), so it wants to cultivate it and protect it. Opening the airline up to look similar to an app store for your mobile phone doesn’t work for that purpose.

But even those airlines that like this model only like it when it benefits them. Let’s say, for example, that Expedia pitches itself as a provider of travelers who want to book tickets and that if you want access to those travelers, you have to pay for placement. This is exactly the opposite of what American has suggested should happen. American has said that maybe Expedia and others should pay for the privilege of having their information available for the customers. It’s the opposite argument. Something tells me that we’ll only hear this argument when it means airlines don’t have to spend money.

In the end, this strategy isn’t right or wrong in general. It’s an airline-specific thing. And for Aer Lingus, which competes hard with low fare airline Ryanair, it probably makes sense. But it does come at the expense of the brand.

[Original photo via Flickr user UggBoy?UggGirl [ PHOTO // WORLD // SENSE ]/CC 2.0]

I’m going to go out on a limb and say that both United and Aer Lingus made a big mistake yesterday when they announced a joint venture that I can best describe as goofy. But that’s about the closest I can get to saying something nice. More importantly, United has decided that yes, labor relations can (and apparently should) get worse. Aer Lingus not only agrees, but it also has proven that it has no clue what to do with its business. I actually worry that in the long run, this could be the end of United. So for that, they’ve certainly earned themselves the Cranky Jackass award. Let me explain.

First, let’s talk details. Aer Lingus and United will join forces to first fly Washington/Dulles to Madrid in summer of 2010 (that’s a lot of notice) and then fly elsewhere the following summer. All costs and revenues will be shared between the two on the joint venture routes. Aer Lingus will be responsible for actually flying the route with three A330s (1/3 of its existing long haul fleet, though 6 more A330s are coming in starting this year) that will have Aer Lingus branding on the outside and apparently both United and Aer Lingus branding on the inside. United will be in charge of actually filling the plane. It appears the crews will come from the US but won’t be United employees. I’m not entirely sure how that will be structured yet, but my guess is that it will be low cost, non-union labor.

Let’s look at the math for both airlines here, so we can understand why this is a disaster waiting to happen. United, you’re up first.

This route should be a United route all the way. It’s from the airline’s Washington/Dulles hub to a European spoke that has a limited Star Alliance presence. There are a couple ways to look at this. The innocent way is that United probably looked at Madrid and figured it either didn’t have enough planes to devote to the operation or it didn’t have the right number of seats on a plane to make the route work. My guess is that with Iberia already flying the route, it’s a marginal one at best. So here comes Aer Lingus to fly it for them in a better configuration and likely with lower costs (especially with new crews). Now United loyalists can fly to Madrid when they couldn’t before. Everyone’s happy. But there’s another way to look at it, and this is what scares me.

It’s entirely feasible in my mind that this could be a way to eventually drive out the pilots and flight attendants completely. It may sound far-fetched, but think about it for a minute. United has already been effective at giving smaller aircraft flying to regional carriers. For 2009, domestic mainline will be down at least 11.5%. On the other hand, Express flying will be up at least 8%. The pilots loosened up and allowed this when the airline was about to die a few years back, and I’m sure they now regret it tremendously since they’re seeing their jobs disappear.

Now United is effectively trying to do the same thing on the upper end of the scale with long haul, international flying. The airline has no new aircraft on order, so there’s no prospect for growth for several years out. Instead, United is looking to outsource its growth, and I could see this extending to the entire operation.

Now, if I were starting a new airline from scratch, I would seriously consider outsourcing my flying. (I’d keep my customer service folks employed, but that’s another discussion.) An existing airline, however, really doesn’t have that option, especially in a weak state. It’s not like United could just dismiss all their pilots and flight attendants one day and be up and running again the next. Think of it like a strike. An airline would have to go through some severe operational pain before it could get there, and an airline in United’s weak financial condition probably couldn’t weather a storm like it barely did in the summer of 2000.

All that matters here is what the unions think, even if it’s not the ultimate goal for management. If they see United’s end game as the end of all their jobs, they suddenly have nothing to lose. Do they worry about putting the company out of business by working to rule and hurting the operation? No, they don’t. Because if they think their jobs are gone anyway, they might as well bring down management with them.

We don’t know yet exactly how the unions will react, but we do not they aren’t happy. Take a look at the ALPA’s statement on the deal. Here’s a taste:

. . . This development, where United attempts to establish an airline operation without the use of United aircraft or employees, is nothing less than the outsourcing of jobs to an international company, and clearly demonstrates that this management continues to make business decisions without regard to its pilots and other employees.

The United pilots are exploring every option to put an end to the company’s blatant disregard and lack of loyalty to the United Airlines brand.

Flight attendants won’t be happy either here, of course. And I really do fear that this could be a major milestone for when we look back in 5 years. You may call me alarmist, but I’m looking way down the road and I don’t like what I see.

Now that’s look at Aer Lingus math.

Apparently, Aer Lingus has just run out of ideas. If you’re an airline with several widebodies on order, you’d think you’d have a good place to put them. But no, Aer Lingus has apparently decided that it has at least 3 airplanes that can do nothing better than fly some routes that it can’t market on its own. Not only that, but the airline has opted to try to staff the flights with employees from the US, so airline employees over there won’t benefit either.

I suppose when you have the Irish government behind you allowing you to make stupid decisions, then this doesn’t seem so bad. See, the Irish just turned down Ryanair’s bid to buy the airline again, so Aer Lingus can continue making dumb moves. I’m sure Ryanair could come up with far better uses for those widebodies than running them for United with somebody else’s employees. It’s hard to make Ryanair attractive to labor, but a stunt like this helps. I doubt we’ve seen the last of Ryanair’s chief Michael O’Leary on this one.

O’Leary, of course, loves it. And really, he should. He put out a press release today entitled, “Ryanair Congratulates Aer Lingus on Finding a Partner Which is Even Weaker and in Worse Shape Than Aer Lingus.” At least someone is happy about this whole thing.

I’m just afraid that this is a very short-sighted move that could have long lasting repercussions for everyone involved.

Lots of little things today compelled me to put out yet another edition of random bits of info. And yes, in case you didn’t know, today is the official Bob Marley Day in Jamaica. Also, I know there are a couple of Kiwis who read the blog, so happy Waitangi Day to you down there. (That’s a celebration of the founding of New Zealand through the signing of the Treaty of Waitangi.) Lots of things to celebrate and lots of news to talk about.

Expedia and American Find One Love – As some expected, Expedia and American have come to terms. You can now search Expedia for all American Airlines flights, but I don’t have an update on whether the same is true for Delta yet. The press release didn’t give us any insight into why the spat occurred, but it’s likely because American found Expedia cheating with its evil older stepsister. Tune in next week for another edition of As the Travel World Turns.

Aer Lingus and JetBlue: Is This Love? – Remember that whole thing about Aer Lingus leaving oneworld and pursuing a life of relgious fulfillment? Well, they’ve taken that first step, by becoming partners with JetBlue. This is JetBlue’s first real partnership, and it seems like a good one to me. Now Aer Lingus can send its Boston and New York customers on JetBlue flights. I’m assuming that means codesharing, but I could be wrong. It will at least involve baggage transfers and the ability to book the itinerary on Aer Lingus’ website.

Spirit Says No Baggage, No Cry – You knew that 5 cent fares on Spirit meant they’d have to make their money elsewhere, right? Then it shouldn’t be a surprise that you’re going to have to pay if you need more than one checked bag. Starting Saturday, your first bag is free, your second is $10, and any more than that should be sent ahead. Why do I say that? It’ll cost you $100 per bag to bring it with you. Of course people are complaining, but those people are also the ones who snapped up 5 cent fares. What was that about a free lunch again?

Get Up, Stand Up and Honor Lamar – Lamar Muse, one of the original founders of Southwest back in the day, passed away last night from cancer at the age of 86. Lamar’s story was an interesting one, because he and the other two founders – Herb Kelleher and Rollin King – had a falling out years ago. He left the airline early on and started Muse Air (nicknamed Revenge Air). Southwest bought the airline and turned it into TranStar before effectively shuttering it. The grudge had lasted for a long time, but I believe they buried the hatchet finally. Herb announced that $150,000 would be donated in Lamar’s name to his hometown YMCA, which Lamar helped build and to which he donated $350,000 when he died.

That’s all for today. Happy birthday to Axl Rose who has amazingly lived all the way to his 45th birthday. Another year goes by without releasing Chinese Democracy. I’m SURE it’s coming this year . . . .

Today was a big day for new additions to global alliances. To be fair, these are just the announcements of additions but in the near future oneworld and SkyTeam fliers will have more options for mileage earning and redemption.

First up, SkyTeam. Air Europa, Copa Airlines, and Kenya Airways all signed up as associate members. Air Europa is based in Spain and flies to sun spots around the world so that frozen Europeans can warm up. Copa, formerly partially owned by SkyTeam member Continental, connects North and South America through its hub in Panama. Kenya Airways is probably the most exciting addition because it opens up an entire new continenta. From its Nairobi home in East Africa, the airline flies to Europe, Asia, West Africa, and Southern Africa.

Now, I’m not exaclty sure it was it means to be an associate member, but it probably means they have to get coffee and pick up dry cleaning for the primary members. I imagine the rules for joining as an associate are less strict so it’s easier to join. In the end though, they will have earn/burn ability for frequent flier miles, codesharing, and lounge sharing so the customer will benefit.

SkyTeam’s US members are Northwest, Continental, and Delta, at least until some merger happens and changes everything around.

Next up is oneworld. They said yesterday that as of April 1, Malev, Royal Jordanian, Japan Airlines (JAL), and all its affiliates will join the group. Also that day, Aer Lingus will leave the alliance and go it alone saying that everything is just fine, they’re at the controls, flying the plane, free to pursue a life of religious fulfillment.

Malev is based in Budapest (Hungary), Royal Jordanian in Amman (Jordan, duh), and JAL in Tokyo. They all fly to destinations on several continents. American is the US airline in this alliance.

Hong Kong’s Dragonair, along with LAN Ecuador and LAN Argentina will join sometime later this year as well marking a pretty strong expansion by the alliance.

The British Isles are abuzz today with Ryanair’s announcement that they want to buy Aer Lingus, Ireland’s national airline.

You may know Ryanair as the largest low cost carrier in Europe. They’re famous for their extremely low fares (sometimes, free) and their crazy PR stunts. Their CEO, Michael O’Leary, has been a very controversial figure and never fails to surprise people. Somehow, today’s announcement tops anything he’s done before.

He’s always been critical of Aer Lingus in the past, but when the government decided to sell just under 75% of the airline this week, he found his chance to change things. Ryanair has already bought 16% of the airline and they are making a very fair bid for the rest. The government says they won’t sell their remaining 25.1% stake, but who knows for sure.

What does this mean? Well, it could mean the low fare Ryanair model would debut over the Atlantic.

Aer Lingus currently flies to New York, Boston, Chicago, and Los Angeles from Ireland. O’Leary says the airline would be run separately, but that doesn’t mean he wouldn’t try to use some of their tactics for transatlantic flights including really low fares and extra charges for just about everything. This could get interesting.