Just a little heads up before we get to the weekly links … I’ll be at the National Business Travel Association NBTA conference next week so my posting schedule may be a little off. I will do my best to keep a regular schedule. If you’ll be at the show, let me know!

Labor Issues Thwart Southwest’s Efforts to Buy Frontier – BNET
Southwest lost its chance to buy Frontier thanks to labor issues. It shouldn’t be a surprise, but it still is.

LAX Rent Increase Ruled Not Discriminatory, But Fight Continues – BNET
LAX tried to increase its rent for those airline not under long term lease, and they just won the first round of the battle. But there’s more to come.

In Search of the Elusive Power Port – NileGuide
I wrote this guest post for NileGuide about which airlines have power outlets and where you can find them. It ain’t easy.

Air Traffic Controller Union, FAA Agree on Labor Deal – BNET
It’s taken years, but the new administration has finally started working with the air traffic controllers. They have a tentative agreement.

June Premium Traffic Drops “Only” 21.3 Percent – BNET
It’s premium traffic monitor time again, and it’s ugly . . . again. But things are getting a bit less bad.

Delta’s Partnership with Virgin Blue Causes Pain for United in Australia – BNET
Virgin Blue is walking away from its United codeshare down under.

Volaris brought its first flight into LAX yesterday, and I headed out to the airport for the airline’s press conference celebrating the event. I must admit that I liked a lot of what I heard about Volaris, but these are some incredibly uncertain times for the airline right now.

Volaris is now flying a single daily trip from LAX to Toluca (outside Mexico City) and another one to Guadalajara. They’ll be starting flights to those cities from Oakland as well, and at the press conference yesterday, Volaris Managing Director and CEO Enrique Beltranena (bottom left in the picture, though I’ll certainly understand if you’re distracted by those flight attendants) announced that they had just received approval to fly from Oakland to Tijuana as well. He also said that he expects Volaris to be flying to more than 10 cities in the US in the next two and a half years. So this is no small plan.

How the heck are they planning on being the first successful low cost carrier flying between the US and Mexico? A huge part of the plan is the Southwest codeshare that was announced earlier. In fact, it’s such a large part of the plan that Kyle O’Neil, Southwest’s Director of Alliances (the tall, white dude in the middle of the picture) was there at the podium today for the event.

Of course, the question on my mind was whether or not the codeshare was still proceeding as planned, especially considering that the WestJet deal had been delayed. So, I asked them to elaborate on details. Kyle said that Southwest was still planning to launch the codeshare in 2010, but he couldn’t announce a date. Original plans were for the codeshare to go on sale in early 2010, so this looks like there might be a little slippage in my mind. But Kyle reiterated that they were very committed to the partnership, something that was evident by his mere presence at the event.

For Volaris, I imagine the codeshare can’t start soon enough. They are coming off a disastrous traffic plunge in Mexico following the swine flu outbreak that began in April. Enrique admitted that Volaris has been suffering, but he said that he believes Volaris was the only airline in Mexico to be breakeven over the last six months. (Warning: He answered that question in Spanish, so I’m trusting that my Spanish skills haven’t failed me.)

In the end, Enrique presented a very nice plaque (at left) to LAX commemorating the start of their service. He said that they’ve presented this to each city they fly as a symbol that they intend to be there for a long time. I like the symbolism.

So Volaris is pushing ahead, and LAX is a huge part of their commitment to making flying in the US work. They will be flying out of Terminal 2 here at LAX (convenient since Northwest flights all moved to Delta’s terminal yesterday), and while it’s not going to provide connections behind security to Southwest, it will at least be right next door.

What might you expect to see onboard? If you’re looking for legroom, you won’t find much. I’m told their A319s are equipped with 144 seats while the A320s have 172. For comparison, JetBlue’s spacious configuration has only 150 seats on an A320, but I think Volaris’ configuration makes sense for the airline. They do have leather seats and overhead TV screens, so the product is still quite nice. (You can see a photo of the inside of their aircraft on airliners.net.)

Perhaps the most interesting thing offered by Volaris is unique in this industry. As Enrique said (to many laughs), “We guarantee on-time performance or your money back so I hope your airport delivers.” That’s right. If your flight is late by more than 30 minutes, you get your money back, regardless of the reason for the delay. As a marketing campaign, I love this idea. It will certainly stand out and it’s a huge differentiator. On the other hand, remember why Domino’s dropped their 30 minute guarantee? They had drivers getting in accidents because they were rushing to beat the deadline. I really hope we don’t see any pressure on pilots to beat the deadline here. That makes me a little nervous.

Overall, it was a good event at LAX. Enrique seems like a very smart man, and he’s already built an airline that not only has to be the frontrunner of the low cost carriers in Mexico, but is also a great place to work. In fact, the biggest smile I saw from him all day was the one he let out when he was introduced as leading an airline that has been recognized as one of the top places to work in Mexico.

Would I try them if I were heading down to Mexico? Absolutely. And the low fares that they’re trying to bring into the market should help them stimulate additional traffic, assuming the burdensome taxes don’t overwhelm their efforts. I tend to think this can work, but this is not exactly the ideal time to be trying it. Still, they pushing ahead at full speed.

So what’s next for Volaris? Well, there was some pressure from LA officials for the airline to start service to Ontario as well (which is operated by the same folks that run LAX), but Enrique responded that “there is nothing more we would like to do than start service to Ontario. So if we are able to, and you are able to reduce the cost of the airport . . . .” Ah, smart man. Keep an eye on these guys, and if you have the chance to fly them, let me know your impressions.

Delta Starts Consolidating Regional Carriers
Delta is taking pieces of Compass, Comair, and Mesaba and mashing them together. Seems like a good idea to me.

Why is Hawaiian Installing In-Seat Video?
Hawaiian is putting in seat video on its long haul fleet, but the case for installation is different in this market than in others.

Billions of Stimulus Funds Will Go to Transportation
The stimulus is now law, and the government is starting to dole out the funds quickly. How will the world of transportation benefit?

Mesa Makes Progress in Hawai’i with Mokulele on the Brink
Big changes could be in store for Hawai’i as a couple of airlines show very mixed results.

December Premium Air Traffic Down More Than 13 Percent
It’s time for the December premium traffic update, and guess what? It’s not pretty. Traffic continues to drop, but which area is getting hit hardest?

LAX Modernization is On the Wrong Track
LAX continues to push how proud it is that they’ve designed an architecturally-significant building for the airport expansion. It’s just sad to see how wrong that strategy is.

Frontier Has a Good December
I’m a little late with this, but I wanted to talk about Frontier’s good December. While the results are good, they’re not as good as you may think.

Despite all the skepticism around my initial post, Allegiant did, in fact, announce this week that it’s coming to LAX and not any of the other surrounding airports. Glad to see that my source is as reliable as I thought. It’s definitely some new territory for the airline, and I imagine that they’ll do very well here, or shall I say they’ll do very well bringing people here. Let’s get the details out here for all those frozen Midwesterners who want a little sun and sand (today’s weather: 71 and partly cloudy).

Allegiant is a very simple operation. They will be basing two aircraft here at LAX and those planes will usually each do a morning roundtrip to some far flung destination followed by a second roundtrip in the afternoon every day of the week. That’s right. They’ll serve twelve destinations from LAX with only two airplanes, but that’s normal for these guys.

Allegiant doesn’t try for business traffic. They just want to bring leisure travelers to a destination, and in this case that destination is Southern California. It’s cheap (some flights for as low as $39 each way), but you have to fly on their terms. Make sure you pay attention to all the extra fees – almost nobody escapes without paying more – but it’s still a really good deal overall. Each destination will be served only two or three times per week. Here’s the rollout schedule:

Starting:
May 1 – Grand Junction (Colorado) on Monday/Friday
May 1 – Medford (Oregon) on Monday/Friday
May 2 – Bellingham (Washington – near the Canadian border) on Monday/Wednesday/Saturday
May 2 – Missoula (Montana) on Wednesday/Saturday
May 3 – Monterey (California) on Tuesday/Thursday/Sunday
May 3 – Springfield/Branson (Missouri) on Thursday/Sunday
May 22 – Billings (Montana) on Tuesday/Friday
May 23 – Fargo (North Dakota) on Tuesday/Saturday
May 23 – Sioux Falls (South Dakota) on Wednesday/Saturday
May 23 – Wichita (Kansas) on Wednesday/Saturday
May 24 – Des Moines (Iowa) on Thursday/Sunday
May 24 – McAllen (Texas) on Thursday/Sunday

It will be very interesting to see how United/American/Alaska react to direct competition on routes they fly nonstop. Scratch that – there really isn’t much competition here, but will it be perceived that way? Those United and American flights from Monterey to LAX are there mostly to feed other flights and not for local traffic. This thrice weekly flight on Allegiant really won’t take much traffic from the existing airlines but rather stimulate new traffic. It’s a little different in Medford where Horizon gets local traffic, but it still won’t be much competition with only two flights a week. Of course, Alaska (Horizon’s parent) has shown that it is all for strong reactions when threatened lately (right, Virgin America?), so there’s no guarantee they will ignore this either.

Another interesting thing is what you find when you pick through the schedules to look for holes. When a plane goes to Monterey on Tuesday, Thursday, and Sunday, it looked like it was sitting on the ground for more than four hours. A little more digging shows that Allegiant is squeezing in a roundtrip down to San Diego from Monterey before it comes back to LAX again. Same thing goes for flights to Grand Junction, but from there the plane is just going back to Vegas, probably so they can swap aircraft through the system.

Also, one of the airplanes has a gaping hole on Monday, Tuesday, Wednesday, and Friday afternoons. The plane arrives back at LAX at 140p on Monday, 235p on Tuesday, 355p on Wednesday, and 135p on Friday and does nothing else for the rest of the day. Something tells me they could launch another route or two in the not-too-distant future. There’s no reason for that plane to sit idle.

One more thing. If you’re trying to put the schedules together yourselves, you may have a little trouble until you realize that the Wednesday and Saturday flights to Bellingham are actually flown by an airplane based in Bellingham and not one of the LAX planes. That’s how they can squeeze out an extra morning flight on those days.

Allegiant will use Terminal 6 at LAX, and they won’t need a ton of space. In fact, the flights are scattered so that this entire thing can be operated from only one gate. So, welcome to LAX, Allegiant. We look forward to seeing you bring many pasty white Midwesterners here to spend money and help us out of our budget hole.

Reliable sources tell me that Allegiant will announce in the coming days that its new “sun destination” is LAX. With the exception of its original base in Las Vegas, Allegiant has specialized in turning secondary airports into big funnels for people traveling from small towns to resort areas. It appears that strategy is going to see a slight alteration with this move, and I look forward to seeing how it performs.

All Allegiant is saying publicly is that it will open a new base to a “sun destination” with initial service to twelve cities, and they’re running a contest for everyone to guess what destination that may be. The twelve cities are:

• Bellingham (Washington)
• Billings (Montana)
• Des Moines (Iowa)
• Fargo (North Dakota)
• Grand Junction (Colorado)
• McAllen (Texas)
• Medford (Oregon)
• Missoula (Montana)
• Monterey (California)
• Sioux Falls (South Dakota)
• Springfield (Missouri)
• Wichita (Kansas)

My initial thought was that it would be San Diego, but that was proven wrong when the airport manager in Sioux Falls let it slip that it would be to the LA area. At that point, I figured Allegiant would try the currently empty San Bernardino Airport since those guys would likely pay Allegiant to fly there. But recently, I learned that LAX would actually be the chosen airport.

This surprises me, and not for the reasons you might think. Allegiant has shown that it isn’t afraid of flying to larger airports. Obviously Las Vegas is one, but they’ve also recently ventured on to routes like Bellingham to Oakland and San Diego. As long as there’s a smaller airport on one end, it shouldn’t be an issue.

What does surprise me is that flying out of LAX means they’ll be entering routes that already have nonstop service. Monterey is served by United and American and Medford is served by Horizon. Allegiant historically has not liked to go head to head with other airlines, so this is an interesting move, assuming it proves to be true.

There’s no question that bringing people from small towns to LA a couple times a week could be a lucrative business, and I think there’s a very good chance that Allegiant can be successful with this move. Their unique model has shown that it can work with a handful of tweaks to it, and I don’t see why this tweak won’t be successful. I will, however, be closely watching those towns with competing nonstop service to see if the incumbent airlines feel the need to respond or not. That will probably make or break those routes.