This week’s featured link
JetBlue’s initial London play: Stansted and Gatwick – PaxEx.aero
JetBlue has the slots, and that means London is coming. It’s strange to see a split airport strategy, but I suppose Gatwick was the first choice (behind Heathrow, of course), so they started there and then filled in as needed. If this info is right, that’s a very light level of density on that airplane. I really look forward to seeing how this does.
Two for the road
Delta Skirts Trump Tariffs by Sending Airbus Jets on Tour – Bloomberg
The people who figured this out deserve a raise for what they’re saving the airline.
Alaska Airlines’ next CEO optimistic on recovery and ‘pent-up demand for Hawaii’ – Honolulu Star-Advertiser
Here’s a little chat with Ben Minicucci, Alaska’s incoming CEO.
7 comments on “3 Links I Love: JetBlue’s London Jaunt, Tariff Evasion, Hawai’i Demand”
Rules on duties, taxes, international transfer pricing, and so forth are (from what I understand) often very arcane and subject to multiple possible interpretations, or at least allow for some creativity in saving money if one really reads into the rules and finds loopholes like Delta apparently did. I hope Delta gives a fat bonus to whoever suggested exploiting that loophole; if not, I doubt they will have much trouble finding higher-paying jobs elsewhere with a “Saved company [9-figure dollar amount]” as one of the highlights on their resume.
As the great economist Ludwig von Mises quipped: “Capitalism breathes through those loopholes.”
Paying the lowest legal tax is the goal of any citizen.
The widebody aircraft fly the same routes that foreign airlines fly; it is hard to argue they aren’t being operated on the same basis as other airlines since Delta has legal overseas maintenance bases. Those planes for now are not used to fly domestic revenue flights; while harder to do, the A321 built in Europe is doing the same thing flying routes to the Caribbean.
It makes you wonder why other airlines weren’t able to figure out how to do the same. The strategy has been used by other aviation companies before even if not recent US airlines.
As for B6 it is hard to believe that a split secondary London airport strategy will really work. If they can’t acquire LHR slots or won’t spend the money for them, then the chances of their success to London – and ultimately Europe are much lower. If LHR slots don’t become available or B6 won’t buy them now in the middle of a pandemic and the beginning of airline failures, then LHR is not an option.
Tim,
Don’t forget B6 started serving secondary airports such as OAK & LGB rather than fighting in the primary spots in LAX & SFO. As time went on they moved over to play in the big pool. What we are seeing is a replay of that, but also we don’t know what price B6 had to pay to get into LHR & was it worth it to them.
@Sean,
Perhaps I missed it, but I didn’t get that B6 has obtained any LHR slots.
They continue to seek LHR remedy slots but “latest updates from the US DOT and UK regulators suggest that those slots won’t come on the market until the IATA Summer 2022 season at the earliest.”
Stokie,
yes, other airports could work but no US carrier has sustained service since Open Skies with the UK was initiated at any airport besides LHR. That doesn’t mean that B6 can’t make other airports work but starting at two secondary airports will be an uphill battle. Multiple US airlines only operated at LGW for years, AA started STN service which didn’t last long but they had LHR access.
If you wish to travel to the UK and would like to do so in some comfort without breaking the bank, B6 appears to be a great option to consider. While LHR is most definitely the favored airport for business travelers and those connecting to flights beyond London, LGW and STN have their advantages too. Not everyone needs to go into Central London, but for those who do, LGW isn’t that bad. If your destination is beyond London but elsewhere in the UK, you can just as easily catch a train from either LGW or STN as from LHR. And everything else is less crowded and less expensive. I think it’s a good niche strategy that can pay off over time.
The London slots should be contingency play. They’d have to be crazy to try 2x BOS-STN. With DY going into bankruptcy, I’d imagine the worst case scenario is that they end up flying to LGW from both BOS and JFK. My guess is they end doing BOS-LHR + JFK-LGW in the near term.