Alaska, JetBlue Get Creative to Satisfy Government Stimulus Requirements

Alaska Airlines, JetBlue

The absurdity of the government stimulus minimum service requirements continue to cause problems, but Alaska and JetBlue are getting creative in finding ways to comply. With Alaska especially, it shows just how ridiculous this mandate is.

The final order is out, and the rules have been modified slightly. If the airlines want to take advantage of the stimulus grant and/or loan money, they have to meet these minimum service requirements through September 30, 2020. (DOT may extend this, but they’d have to let the airlines know by August 1.)

  • All domestic cities must continue to be served
  • If an airline flies to multiple airports in a city, it only needs to continue serving one
  • A new provision is that seasonal routes only need to be served during the regular season for service (binary winter or summer) which is a good enhancement
  • Flights need to operate 1 day, 3 days, or 5 days weekly depending upon a couple factors, and they can operate from any other city in the US
  • Airlines can apply for exemptions

This is an improvement from the original proposal, but it still means airlines are going to have to provide far too much service for the demand that’s out there. They get to fight over scraps.

If you look through the final order, you can see all the minimum service requirements, but let’s highlight a couple. Do eight airlines really need to serve Kahului, Maui when all visitors require being quarantined for 14 days for the near future? Does Kalispell, Montana really need service from five airlines? I know it’s less than daily service, but this is still too much.

I expect more airlines will try to get creative, but for now, JetBlue and Alaska are the ones that have really taken things into their own hands.

JetBlue Picks Its Favorite Airports

The rules say that airlines only need to serve one airport per city, so JetBlue is taking that to heart. Here is its plan through June 10:

  • Boston – Serve only Boston, suspend Providence
  • Los Angeles – Serve only LAX and Long Beach, suspend Burbank and Ontario
  • New York – Serve only JFK and Newark, suspend LaGuardia, Stewart, and Westchester
  • San Francisco – Serve only SFO, suspend San Jose (Oakland was already permanently abandoned)
  • Washington – Serve only National, suspend Baltimore (Dulles was already permanently abandoned)

Ok, so maybe I’m giving JetBlue too much credit here for being creative. This is just taking advantage of the provision in the rule that requires airlines to serve only one airport in each city.

This appears to be the extent of what JetBlue can do, even though it considers other airports to be “co-terminals” that serve the same point. For example, it has to keep serving both Fort Lauderdale and West Palm Beach as well as Tampa and Sarasota. And in what is probably the most ridiculous requirement, JetBlue has to keep flying to Worcester even though it’s closer to Boston than Providence.

Don’t worry, JetBlue has an answer for that. It was the first to submit its list to the DOT to request exemptions. It wants to end service in all these markets through June 10:

  • Aguadilla
  • Albuquerque
  • Bozeman
  • Dallas/Fort Worth
  • Houston/Intercontinental
  • Minneapolis/St Paul
  • Palm Springs
  • Ponce
  • Portland (Oregon)
  • Reno
  • Sacramento
  • Worcester

It will be most interesting to see what exemptions are granted, because we really don’t know at this point.

Alaska Brings Milk Runs to the Lower 48

When it comes to actual creativity, Alaska takes the cake. Alaska has decided to go old school and fly the way airlines used to… with stops along the way so it can consolidate destinations into a single route.

Alaska already does plenty of this up in the State of Alaska. You might remember when I flew the milk run a couple years back. Alaska flies several different routes between Anchorage and Seattle that stop in multiple cities along the way. These literally bring milk and other essentials to those communities.

To be fair, this is not what Alaska is doing in the lower 48, but it probably wishes it could carry more cargo since its flights will be empty. Here’s a visual of the plan via the Great Circle Mapper:

Maps generated by the Great Circle Mapper – copyright © Karl L. Swartz.

Other than the round-robin up in Montana where the airplane goes in a circle, these are all tag flights where they stop in the same city in each direction. All of the tags heading east are operated by mainline airplanes and leave Seattle in the middle of the day. They spend the night at their final destination before turning back around in the morning. The Montana (on a Skywest Embraer 175) and California (on a Horizon Q400) flights all start and end the day in Seattle.

I asked Alaska if these were solely chosen based on geography or if there were other factors, and I was told this:

When looking for tags, we looked for geographic proximity so that a stopover point was not too far out of the way for those continuing. In a demand environment this depressed, it’s hard to say there was much economics factored in but we picked good sized markets where we think there was complimentary demand.

Of course, there are other markets that retain regular nonstop service in the network, so these must have just been the thinnest markets with the least competition that were easy enough to combine.

You can buy tickets on the tag portion alone if you’d like, but then again, you shouldn’t be out there joy-riding right now. Just keep this option in mind if you have essential travel.

Of course, this points out the absurdity of the DOT rule. Is anyone really going to fly Alaska to Houston with a stop in Dallas? No. They should just let United be the one airline to fly the route and then have everyone codeshare.

I’ll be curious to see how airlines like Allegiant and Frontier handle this mandate with their highly-variable schedules. Spirit has already requested exemptions from 26 cities, including big ones like San Francisco and New York. The rule is friendlier in its final state than it was previously, but it’s still not something that works well for any airline’s network strategy. It’s also not something travelers need.

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40 comments on “Alaska, JetBlue Get Creative to Satisfy Government Stimulus Requirements

  1. I think the DOT making Alaska fly to Houston is a good thing. Pax who are in a hurry will clearly choose United for the non stop, but Alaska flying the tag on will keep United reasonably honest and avoid the monopoly scenario. The number of banks that other airlines will have at their hubs is going to reduce significantly – so any ticket involving a change of plane will be much less competitive

    1. I agree with that in a long term scenario…. but in the short term, airlines are struggling to fill an airplane to 20% and fares are low because of that… In sports, sometimes the plays have to be rewritten if a game isn’t going the way it was envisioned, it doesn’t mean that the old plays are scrapped forever. Same thing applies here, when the regulations were written, and business contingency plans were created, I don’t think anyone had the idea that there would be a 90% reduction in travel for a significant period of time… right now there should be some out of the box thinking, and allowing codeshares/interlines to to keep travel moving while not requiring a flight with 2 people to operate may need to be done. Now this has to be very short term while demand is suppressed, and should be reviewed like every 30 days so it does not turn into a permanent monopoly, but the status quo is causing airlines to burn through gas unnecessarily and collectively lose hundreds of millions of dollars a day….not sustainable.

  2. We will have to see what the DOT says about these efforts to consolidate route networks and how long they last. In a very low demand environment, they make sense from an economic standpoint but demand will have to return or entire airlines themselves won’t be sustainable and the amount of money the Treasury throws at them won’t make a difference.
    Serving points throughout the country favors network/legacy airlines so it is possible to see some argument for allowing smaller carriers to do this – but then the smaller airlines like AS and B6 have the cost advantage so I would bet there is some behind-the-scenes “look what they are doing going on.”
    We could see a longer term network carrier advantage play out even after Oct 1 if carriers like AS and B6 can’t support all the cities it once flew with nonstop service from its hubs.
    And, of course, we have Spirit that has wholesale cancelled service to some cities.

  3. *Is anyone really going to fly Alaska to Houston with a stop in Dallas?*

    In normal circumstances, sounds interesting to me… it would be another sector and line on my map.

    I do wish I’d flown JFK-YVR-HKG on CX when I had the chance.

  4. Some of the DOT’s market definitions need to be refined, perhaps by using a mileage rule instead of arbitrary “markets”. The example you give of TPA/SRQ is a perfect example – I live in Tampa, and I used to live in Bradenton, and people from Sarasota and Bradenton drive to TPA all the time for more flight options and (usually) lower fares. Airlines that serve TPA shouldn’t have to maintain SRQ.

    Wouldn’t be surprised if we see airlines making short-term arrangements with small lift providers to fulfill some of these requirements too. For example, JetBlue could get Silver to make a TPA-SRQ-TPA run once a day, or a TPA-JAX-MCO-SRQ-TPA milk run to maintain service at JAX and SRQ.

    1. I agree with your argument for TPA/SRQ, but find the Boston/Providence grouping a bit fuzzier. Are Manchester, NH and Portsmouth, NH also included in the definition of “Boston”? Both are as close or closer to downtown Boston than Providence is, and both draw pax from the Boston area, yet both also draw pax from points further north… Point is, it’s fuzzy and tough to draw the lines for things like this, which therefore means it becomes an issue of politics and lobbying.

      It would be much more objective if the airlines were required to serve 1 least one airport within, say, a 50 mile drive of all the airports that they had served previously.

  5. This brings to mind the domestic flights TWA and Pan Am operated to feed their hubs at JFK. A friend of mine based in Denver would, if he had to take a late flight to Salt Lake City, take the continuation of TWA’s flight from JFK on an almost always empty L-1011.

    1. Or TWA back in the day JFK-PHX-TUS. It was another of TWA’s infamous “change-of-gauge” flights: L10-/PHX/-72S. There were occasions when it got to PHX and you went to the next gate to board your 72S “thru flight,” it had already departed! Seems if they had waited for the late L10, they’d take a crew rest delay the next morning on the origination of the TUS-PHX-JFK flight that also had the same change-of-gauge in reverse.

  6. JetBlue should not get most of the exemptions its requesting for. PR airports will probably get exemption for obvious reason. If other carriers have to play by the rules to get the money, so should JetBlue. And the final order already made things a lot easier on small carriers like B6/AS and ULCCs by only mandating them to fly 3x weekly only the previous daily served destinations. AS’s approach is novel. But they are not canceling nearly enough flights. JetBlue is canceling around 85 to 90% of flight to conserve cash. Most of the ULCCs are at canceling 90 to 95% of their flights. I don’t know if they will get what they asked for. They really shouldn’t. AS should be canceling 85% of their flights to conserve cash.

    As it stands, the legacy carriers are in huge disadvantage. Their fixed cost are way too high and they are still operating too many flights. I mean why is AA still running 350 flights a day out of DFW? That’s called blowing money away. Will AA even make it to November with its cash on hand?

    And Delta just told its employees it’s got enough cash (close to $6 billion) to last 90 days and even with CARES grant, that only gets it to Q4. The amount of flying that legacy carriers are still doing is unsustainable.

    1. Maybe it shouldn’t get most of its exemptions, but why not ask anyway? (And I’m surprised that other carriers haven’t asked for some exemptions such as for airports that are close together but not in the same city or short flights that are driveable).

  7. One other interesting thing of note, JetBlue has a interlining agreement now with AA/AS for re-accommodation and they are looking to have this continue once this trouble is over (who knows when that will be!). Another example of a smaller carrier taking advantage of AA when they are desperate.

  8. The DOT requirement for duel service at both SRQ & TPA highlights the question I brought up a few days ago involving LGB Vs LAX, JFK Vs HPN in that how viable will these small airports be for passenger service in a suppressed demand world? There are so many small airports across the country & I wonder how many of them could survive long-term in this climate.

    Now that said, not all small airports are created equal & despite there small size & scope, they are necessary as there isn’t a large airport within driving distance. Also HPN as noted the other day serves a cluster of communities that are among the wealthiest in the country, therefore there maybe some utility for it despite objections by local residents.

  9. The AS DFW-IAH tag is rather interesting because, with the AA codeshare that’s already in place, AA could drop frequency on both of those legs and help AS fill their plane. AA’s still going to serve DFW-IAH, and probably DFW-SEA, but I’m sure they’d welcome not having to take one more money pit flight.

    Catch with a mileage based coterminal perimeter is at 75 miles it makes AUS and SAT coterminals. At that point SAT loses G4, F9, and SY immediately, and maybe AS as well, though it increases the probability that AUS will keep those airlines since at that point they’d have to file for two DOT exemptions rather than none. At which point F9 runs a 319 to DEN and G4…CVG maybe?

    Speaking of CVG, has DL dropped that airport down to a spoke yet?

        1. Robb – The article clearly states that Spirit has “requested exemptions from 26 cities, including big ones like San Francisco and New York .” The DOT is not using airports in its metrics but rather metro areas. The exemption request is for the San Francisco metro. Please make sure you understand the process before jumping on others.

  10. When I saw the Alaska map, I rather felt as if I was on North Central Airlines again, flying from Duluth to Chicago with a stop in Green Bay! That’s the way it was done before 1978.

    On the broader issue of what’s multiple airport markets, that’s a tricky one. Does MCO, SFD and MLB all count as one market — especially since Melbourne is about an hour away from MCO and they really are two distinct markets.

    The grandfather of all adjoining markets in Chicago and Milwaukee. Suppose Delta is serving Mitchell, Midway and O’Hare (I think it is, actually). Milwaukee has worked over the years to attract passengers from Lake County and extreme northern Cook County in Illinois. They’ve tried really hard to be “Chicago’s third airport” and even have an Amtrak station to facilitate Mitchell’s usage.

    All this notwithstanding, Chicago and Milwaukee are separate markets, with separate media and very separate governments. If Delta reached and said, “gee let’s terminate Milwaukee and focus on Chicago,” I can only imagine how aggravated the Cheeseheads would be. But it’s 55 miles between the airports, an airline could argue!

    In fact, it’s barely further from MKE to ORD than it is from IAD to BWI!

    Not going to happen, I realize, but that’s the impact of a liberalization of the rule.

    1. I’ve flew MKE to ORD a few years ago (believe it was on United, may have been American). After we landed the pilot noted that that route was the shortest regularly scheduled mainline route in the airline’s network. Not sure how true that is/was, but still.

      As with many big metro areas, however, depending on which side of the city you’re going to/from, traffic can be such that 50 miles is a long drive. I’m not familiar with the SE corner of Wisconsin, but from what I’ve heard (and seen, driving from Chicago to Milwaukee recently), it seems to be the equivalent to Chicago of what NE Pennsylvania (Allentown area) is to NYC. Both are locations that are relatively close to a major metro area or two, and with convenient highway access, but with less union-friendly laws and cheaper land and labor. As a result, both have distribution centers galore, with more sprouting up constantly.

      1. Allentown is actually an interesting comparison, because Continental actually replaced its ABE-EWR flight with a bus in 1995. United still runs that route as a bus today!

  11. One utterly bizarre aspect of the service requirements is that they don’t provide any exemption from running the flight if literally 0 passengers purchase tickets. Maybe that will be worked out later, but I certainly wouldn’t count on it.

    If I was at an airline, I would be looking for creative ways to drastically down-gauge flights right now. Adding more regional jets is not an option due to scope rules, but prop planes are exempt. I’d be looking to sign short-term agreements to turn as many air taxi operators as possible into “regional airlines” to meet my government-mandated community service.

    If this is forecast to continue for another couple months, maybe I even go with the “hail-mary” option and try to get some mainline pilots re-qualified on regional jets, so I can down-gauge more flights to those.

  12. The route planners at Breeze must have thrown away all their plans at this point. Any forecasting of demand or competition is just a big ??? at this point.

  13. Certainly interesting Act of Congress. Reminds me of the “public convenience and necessity” CAB-regulation days way back when

    Love the 48+ pages showing which airlines are serving which cities, with how many flights. Actually, the lists are not for places where the airline is doing anything with its own airplanes, pilots, and cabin crews. They are mostly to show places where it has put in and used contractors to do what it isn’t doing and has no intention of doing.

    But, surely it is important that we know that someone like UA is serving, and apparently wants to keep serving, and DOT insists it do so, Phillipsburg/State College, PA using the people and aircraft of Air Wisconsin to fly kids/students (the number of which today is probably zero) to the university (Penn State) and basically the only reason why State College exists, is closed now and probably will be for some time.

    So, the airline is going to get money under the guise that it is doing something itself (which it isn’t) for travelers (who aren’t traveling) to places (where there is no need to be). Same for AA and DL, and I guess, the most needy of all, Allegiant, with its twice weekly St. Pete. flight, getting.

    Not picking on these airlines or State College, and my beloved Penn State, but, what DOT is doing, and apparently what Congress is asking it to do, seems a waste of time and effort. In the end, why not just have the airlines wanting the funds to swear, or affirm that they will be grateful for it, promise that they will be good stewards of it, and will, in time, send us all a great big Thank You note (“additional bills from the US Treasury may follow.”)

    1. I see no reason to put any requirements on the airlines. They will obviously want to launch flights as soon as demand is there.

  14. This really highlights how much of a disadvantage the regional carriers are compared to the national carriers with this rule. The four majors can all eliminate the long, relatively thin flights; their flights to outstations a long way from their nearest hub (except AK and HI) are all international and therefore don’t have to be maintained. Not so with B6 and especially AS, which is why the tag flights make sense for AS but much less for the four majors.

    1. Not really – the network carriers serve many more destinations which need to be maintained which simply means more flights overall than the smaller airlines. Fuel is cheap now anyway, which is the main reason longer flights are more expensice.

      1. exactly, if you look at how many flights JetBlue was able to cut vs legacy carries, the burn rate for legacy carriers will be so much higher. Right now, the burn rate for legacy carriers are probably 5 to 6 times of JetBlue and probably 10 times of ULCC. Really tough time to be network carrier and fly 90% empty aircraft around so much.

        1. FC,
          Feel free to post the data to support your position but the burn rate and/or revenue loss for legacy/network carriers that have reported that statistic is in line with low cost and ULCCs relative to size.
          There is no evidence that any business model is doing any better than another in this current environment and quite a bit of evidence that demand across the board has fallen by 95% or more. Very few people are traveling for any reason.
          There are very low incremental costs to operate a flight right now; most airline employees are still on the payroll and working far less than they should be while fuel is low- not free but very low. Landing fees are minimal.
          The argument that airlines that operate more service are bleeding more cash is just not supported by data.
          Pollution is far better than in the past and there are minimal ATC issues, even with some controllers out with the disease.

          The primary reason why airlines should not be operating any more than possible is to minimize potential infection to crew members and other passengers – and yet there is no evidence that crew members on flights were infected at their job or that airline employees as a whole have a higher infection rate than the general population in cities where they are based or work. Of course, social distancing should be practiced by all and there are crew members that are infected and some have died but societal evidence is far stronger for infection via group gatherings and shared food and beverage than via any transportation method.

          Let’s all hope things improve soon but there is no evidence that any type of business model or any specific airline is holding onto revenue better than any other.

          1. On April 8th DL townhall, Ed Bastian told the employees they have $6 billion in cash which will last them 90 days. You can do the math on that one.

            The problem for network carriers is that while their burn rate is actually probably in proportion to their size vs LCC/ULCCs, their cash is definitely not. You want to compare WN’s cash position vs legacy carrier’s cash position at the moment?

            Everyone know that domestically the load factor is about 10% right now. So yes the more you fly, the more you lose money. That’s why ULCC’s are cutting their flights by 90 to 95%. That’s why B6 is cutting its flights by 85 to 90%. legacy carriers need to wise up and cut a lot more if they don’t want to file chapter 11. That starts with AA, but DL/UA are in danger also.

            Legacies are going to come out of this 25 to 50% smaller depending on how long this crisis last. That’s based on a conversation Neeleman had with a major us airline exec.

      2. Well sure, the bigger airlines are bigger. But they can serve Columbus from Chicago or Detroit rather than Seattle, etc. I doubt there’s a city in the lower 48 that any of the big four need to serve from a hub more than 1000 miles away, which is very much not true of Alaska or (to a lesser extent) JetBlue. Compare Alaska’s route changes to Cranky’s post on American’s network; they retreat heavily to serving most small airports only from the nearest connecting hub, having chosen four connecting hubs that are well geographically distributed, and flying only five days a week in many cases to meet the minimum requirements to serve each city from that nearest hub. Alaska can’t do that.

        If the fuel expense were dominant, airlines would maintain their long haul flights, and Alaska wouldn’t be doing these tag flights. Obviously cheap fuel helps, but staffing those empty SEA to eastern US flights isn’t cheap either.

  15. On the other hand, don’t we want load factors to be 20% or less, to maintain separation on board?

  16. So Crankster…how is it B6 decided to keep LGB, along with LAX? You have an “in” with some exec there?

    Or did they just not want to have that slots issue with the local politicos re-open its ugly self?

    1. Oldies – Beats me. The slot usage rules are suspended through May so that’s not a short term issue. I just assume that since they have the employees and infrastructure, they want to keep Long Beach operating. It’s only going to have a couple daily flights from what I can tell.

  17. Oh, good old Kalispell – a place where I spent quite a bit of time in my formative years. For the past 25 years, I have been flying in and out of FCA. Last summer there was more service to northwest Montana than I have ever seen! Four airlines flying to LAX non-stop? Unheard of! Heck, this upcoming summer AA even wanted to send a Saturday only plane from LGA (most likely cancelled now). For a city of barely 24,000, with the major tourist season lasting ~8 weeks, it was definitely impressive. I remember when AS to SEA (or even GEG) and DL to SLC were basically the only options, especially in winter. (NW did have a flight to MSP, but it was often seasonal/sub-daily). I have actually flown the routing via HLN (and also via MSO) which is how the services used to operate years ago. Delta used to have quite a few of these tag services from SLC on their 727s. When Allegiant launched non-stops to California a few years ago, even if it was only twice a week, it really changed things. Really hoping I can make it back this summer and not have to relive flying through Helena!

  18. Based on the Notice of Action Taken for the first two airlines ruled on by the DOT, Jet Blue and Spirit,

    it appears the DOT will not be granting any exemptions in the United States except those to cover errors for service that was never offered.

    Jet Blue and Spirit were only granted relief from their Puerto Rico requests (Aguadilla and Ponce) due to the Governor’s request to route all Puerto Rico flights to San Juan and Spirit had its service obligation removed for the three cities it had not previously served – Macon, Birmingham and Albuquerque.

    It appears Jet Blue will be required to service Palm Springs 3 times per week through the summer as its seasonal exemption request was denied.

    This does not bode well for Allegiant and Frontier – it will be interesting to see how Frontier’s service at Tyler TX and Mobile AL are handled as the airline had previously announced discontinuing those cities in late April.

  19. Are the AS tags even allowed under the final order? “…[I]f a covered carrier served a point with any degree of scheduled service from more than one other point, it would only need to provide service from that point to one of the previously served points as long as it met the above frequency requirements” Final order p. 8

    1. BS – I don’t know, but I would assume that this still counts as serving one of the previously-served points. It doesn’t say there can’t be an intermediate stop.

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