3 Links I Love: Impact of Middle East Airlines, Pan Am, Southwest Exodus

Today’s featured link:
New Data Show Steep Decline in International Bookings in Orlando, San Francisco, and Chicago after Gulf Carriers Launch New Service – Partnership for Open & Fair Skies
Yes, this comes from a lobbying group, but the data is still interesting. In short, it shows what you might expect to be the case. In three US cities, when a Middle East carrier entered the market, US carriers and their partners lost a bunch of bookings in competitive markets.

That shouldn’t sound surprising, but it does contradict what we’ve heard others say – that the Middle East carriers are coming in and growing the pie, not taking away from existing airlines. There is one enormous caveat here though. This is only looking at travel from these cities to the Middle East (excluding Israel), Africa, the Indian Subcontinent, and Southeast Asia. That means the totals are smaller than you’d expect to see if you were looking at all international travel. I still find it interesting to see the data.

Links I Love

Two for the road:
Flying high: Remembering Pan Am – CBS News
This video is just one of those fun looks back at what Pan Am used to be, told by former flight attendants. It’s fluffy, but it’s enjoyable.

Southwest Vice President and Chief Marketing Officer Kevin Krone to Retire – Southwest Airlines
Southwest is losing a lot of experience at the top lately. First, Ginger Hardage, SVP of Culture & Communications, retired after 25 years. Then Teresa Laraba, SVP of Customers, died after 31 years with the airline. And now Kevin Krone, VP and Chief Marketing Officer, is retiring after 25 years with Southwest. That’s a lot of loss of institutional knowledge and culture.

Brett

14 responses to “3 Links I Love: Impact of Middle East Airlines, Pan Am, Southwest Exodus”

daniel.gooch

Jan 29, 2016

Hmmmm…. Well a few issues with this. First of all, it’s U.S. carrier and their partner bookings that are down. They don’t provide data for overall traffic on these routes, so the headline may be accurate or it may be grossly misleading. Of course if a new carrier enters a market, other direct options could see some decline. There is nothing remarkable about this. Did the pie grow? Can’t tell from what is provided.

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1. crankyflier
  
  Jan 29, 2016
  
  daniel – Well the Middle East carriers have been saying how they aren’t taking traffic away from the US carriers. They’re just growing the pie. So this is interesting only in that particular way.
  
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Jeruen

Jan 29, 2016

Just to nitpick, but the title of this post suggests that the link is about the impact of the airline based in Beirut.

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DougYWG

Jan 29, 2016

Emirates is the oldest, biggest and most successful of the bunch. I don’t believe for a minute that they are subsidized. Can’t comment on QATAR or ETIHAD. And doesn’t the U.S. Government subsidize these carriers’ purchase of Boeing aircraft? So who, exactly, is complaining about what?

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1. jskyz
  
  Feb 2, 2016
  
  noooo the U.S. carriers are not being subsidies for any aircraft purchases of any kind if that was the case airbus addition would not even been thought of. if the U.S. was subsidizing the airlines now it would be way cheaper to have an all Boeing fleet than to have an mix fleet of airbus and Boeing regardless if many of the A320 family fleet being made here in the U.S.
  
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Doug Swalen

Jan 29, 2016

Operative words for me from that slanted spine piece: “their joint venture partners”. How about a straight up 1:1 network comparison between the legacy carriers and the ME3 in those same airports? Bet the numbers aren’t anywhere near as down.

This is why I don’t take much anything these lobby groups say at face value. They spin the hell out of things in an industry well versed in spinning the hell out of things with a rich tradition of spinning the hell out of things. These guys will say and do anything if it gets them an extra dollar. Nothing wrong with that but at least be honest about it instead of masking this as anything other than naked protectionism.

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1. crankyflier
  
  Jan 29, 2016
  
  Doug – Did you read the piece? It does break out the legacy carriers from their JV partners. Without the JV partners, the decline is steeper.
  
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Dave Starr

Jan 29, 2016

A couple observations on the impact of the mid-east carriers at the person/passenger level. In particular distance flown doesn’t make nearly the difference one might think it would.

I live in the Philippines, don’t fly a lot, but when I do it’s commonly to visit family in Orlando. Now that there’s direct Dubai-Orlando service, various booking sites often offer up MNL-DXB-MCO flights at price competitive levels. It’s certainly farther going that way than a typical US carrier routing through perhaps NRT and ORD, but the convenience and lack of hassle of only transiting/plane changing at one international airport, plus arriving from a direct flight, claiming your bags and leaving the airport, no standing in line to re-check, etc. makes the longer flight time still seem very attractive.

Now if you factor in the level of customer service on Emirates compared with Delta or United’s “cattle prod and warmed over dog food) level of “customer care” I’m certainly going to try the “long way ’round” next time.

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TC

Jan 29, 2016

Sorry, but that piece on Middle East Carriers is propaganda at its best. Take the angle you want to get across, and report heavily on it. Any carrier coming into a market will show a decrease of business to existing carriers already there. Eventually, there may be increased business overall, but that may take some time. Why did they focus on Orlando, San Francisco, and Chicago? Orlando is not a hub for anyone unlike Miami. When Qatar came to Miami, it was a new service overall as no one flew to the Middle East Direct from Miami and all connections to Asia, Africa, and India were through other hubs.

The Big Three – AA, DL, and UA need to offer a better product than they have now to entice customers on these long haul routes. I travel annually to SE Asia and used to fly NW, then DL after the merger. I won’t touch any of the three mentioned after first flying KE a few years back. Now I look towards any foreign carrier and have used CX, KE, and BR since. Along with better pricing, I have found the seats more comfortable, IFE more modern (except BR), better food, and the flight crews more friendlier. I think how the unions of the American based airlines protect substandard employees and also set assignments based on longevity, rather than employee performance; are reasons for the surlier employees on these longhaul routes.

WN-I don’t think it’s an exodus, just as an airline ages, the core people are going to retire and new blood comes in. Sometimes this is good as new ideas on how to continue to grow come forth or bad as the people who take over are so engrained into the culture, the airline remains stagnant. Many execs have been there since the 80’s, and it’s time for them to retire. I am also sad to hear that some lost their life before getting to enjoy a period of life not having to worry about their careers.

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Ted

Jan 30, 2016

People are choosing with their wallet. It’s a good thing. And the non-US JV partners aren’t doing bad at all.

US airlines need to understand that awful service, decrepite aircraft, and fees galore is driving people away whenever they are given a choice.

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Flyer

Jan 30, 2016

I have flown in business class on 2 of the 3 Middle Eastern carriers mentioned. All of my flights were better than any AA, UA, or BA flight I have ever taken. I know that offends some folks, but it’s not close. The flight attendants were more “attendant” and had very positive dispositions (not always a given on AA, UA, and BA). The seats are way more comfortable than the little “pods” on AA/BA. And, wider in the shoulders too! Plus, especially for Etihad when connecting to India, there is the option to leave the USA in the mid-morning and therefore arrive in India the following evening, rather than at 2 to 4 a.m. It’s hard to blame any government subsidy for causing a better schedule. But, Heathrow has no “bank” at midnight, so no option to change there! Lastly, the 12-14 hour flight means the service is done slowly and at the customer’s pace, rather than the super-fast, completely scheduled service on the 6-7 hour flights from the USA to the UK.

Subsidized or not, the experience is just better, even the parts that don’t cost anything (like being pleasant to passengers).

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1. David Starr
  
  Jan 30, 2016
  
  That’s about the most profound thing any of us has said in this discussion, Flyer. Being pleasant to passengers. Now that US cabin crews believe themselves to be deputy US federal officers, empowered to have one imprisoned at will for “Interfering with a flight crew member”, flying on US flag airlines has become, to me, like a horror movie where, wrongly accused I am slapped into some clandestine Federal holding pen, keeping my mouth shut and avoiding all contact with others until my lawyer can hopefully get me “sprung” at the end of the trip”. It costs nothing to be nice to people, especially when those people are spending thousands to spend the night in your “holding cell”.
  
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Georjet

Jan 30, 2016

Yeah no….too bad for the American carriers and their boohooing about decreased booking. The bottom line is the service in the USA on the bigs sucks. Period. The quality of the inflight experience boders on horrific. There is no quality customer service standards to speak of. You really don’t know what you’ll get from flight to flight even in a premium cabin. So too damn bad. I am glad their are other options out there. I would never fly a US carrier internationally.

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Murali

Feb 11, 2016

The reason why American carriers lose passengers when Middle East Carriers enter the market – is because all American carriers SUCK. United at the top of the list, followed by everyone else. Infact, the middle eastern carriers charge MORE than the American carriers. This is truly – the passenger paying with his / her wallet. I have paid multiple times upto $300 / person to travel on an non-American carrier when I fly internationally.

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