Cranky Weekly Review Presented by San Francisco Bay Oakland International Airport: Spirit’s New Frontier, JetBlue in the Black

A New Era is Coming for Spirit

The Spirit Airlines we all knew and loved — or at least loved to hate — is on its way out, and the world will never be the same again. The new Spirit is going classy, like when that Red Roof Inn you stayed at in college is a Westin now, but the rooms still kinda look the same. Free wi-fi? Check. Free snacks? Check. Free checked bags? Check. Blocked middle seat? Check — if you pay enough.

Beginning later this month, Spirit will divide itself into four classes of service — Go Big, Go Comfy, Go Savvy, and then the sadly named, “Go.” Go Big will include everything including a Big Front Seat with a blocked middle next to you, and as many snacks and drinks — booze included — as you can consume between Orlando and Myrtle Beach. That definitely won’t result in even more fights onboard. No way.

Go Comfy will come with a standard seat with a blocked middle, priority boarding, one carry-on and checked bag, one snack, and one drink. Go Savvy will come with one checked or carry-on bag, while just Go is basically Spirit’s current product with everything unbundled — or the equivalent of Basic Economy on other carriers.

The new options will be available to book on August 16 for travel beginning by August 27. Will it work? Check back in a year.

JetBlue’s Profitable Quarter

JetBlue Airways’s Q2 earnings report was released this week, and the carrier managed a profit for the first half of summer. It exceeded its Q2 guidance, ending up $25 million in the black. New CEO Joanna Geraghty said she would use the surplus to buy a steaming hot cup of Dunkin’ coffee for each of JetBlue’s employees at the Dunkin’ on Avenue C near the carrier’s home office.

Gross revenue for B6 was down nearly 7% to $2.4 billion, but the airline tightened its belt and saw expenses actually decrease — albeit about 0.1% — enabling it to squeak out a Q2 profit.

The forward-looking guidence for JetBlue indicates trouble could be ahead — it expects ASMs to drop as much as 6% in Q3 and 5% for the second-half of the year, while its CASM could go up by as much as 8.5% in the year’s final six months. It ended the first half of the year with $1.3 billion in cash and cash equivalents on-hand, most of latter being tied up in Go Big fares on Spirit.

Allegiant’s Busy Earnings Week

Allegiant announced it was profitable in Q2 to the tune of $35 million while also sharing that it will expand its Allegiant Extra offerings, and begin a strategic review of its Sunseeker Resort in Florida. While earnings were down by nearly 75% from a year ago, a profit is a profit, and Allegiant earned one. Its $666 million in gross revenue was down slightly from Q2 a year ago, while expenses jumped about 15% — welcome to the club.

With regards to its boondoggle resort in sunny Florida, outgoing CEO Maurice Gallagher said the destination offers greater value than is currently reflected, so it’s doing the one thing that is sure to fix it — bringing in consultants. Allegiant retained Prospect Hotel Advisors to hit on every high note in the consultant’s playbook — advise the company on strategies that maximize the value of Sunseeker Resort while the engagement aims to improve financial performance and help accelerate the strategic positioning of the hotel in conjunction with the existing experienced management team. Hooboy.

Lastly, Allegiant CRO Drew Wells noted the carrier will continue to expand its Allegiant Extra program across more markets. Eleven planes were retrofitted with the new seating this year already with another 26 expected to be updated by the end of next year.

Delta to Seek Compensation for Outage

Delta Air Lines has finally recovered operationally from the CrowdStrike outage of two weeks ago, but the financial repercussions could be very long lasting. For that reason Delta has chosen the time-honored airline tradition when things get tough — look for someone else to bail the airline out. It has decided to seek compensation from Microsoft and CrowdStrike.

The airline retained counsel as it begins to explore its options through the courts, hoping to find its search for compensation goes better than the one most the customers went through when stranded a couple weeks back. The disruptions to Delta’s normally solid operation cost Delta as much as $500 million — and that’s before considering lost future business and the 175,000+ compensation claims sitting on someone’s desk on Virginia Avenue in Atlanta right now.

While Delta goes on offense, it will also be forced to play defense as Transportation Secretary Pete Buttigieg said his department will be opening an investigation into what happened and the aftermath of the incident, including how Delta responded. Unfortunately for Delta this story does not seem to be going away any time soon — but maybe a decent compensation payout in the form of CrowdStrikeMiles will make it feel better.

Rex Enters Voluntary Administration, Future is Not Bright

Rex — Australia’s third largest airline — is in trouble after the carrier entered voluntary administration this week to attempt to right its financial ship and save the airline. The carrier is ending all B737 operations and its flights between major Australian cities where it attempted to compete with Qantas and Virgin Australia and failed, but it will continue to operate its smaller regional services to more remote parts of the country.

The regional flights, operated by Saab 340 turboprops, will continue to fly as normal, but as many as 600 jobs are on the line with the ending of 737 service. The bankruptcy will be handled by EY, which says its goal is to smack Rex on the nose with a newspaper, restructure the business so it can continue to service regional Australia, and running up major billable hours.

• Air Astana is leasing seven A321LRs.
• Air Europa will not be joining the IAG family of airlines anytime soon.
• Air New Zealand is facing reality.
• Air North and WestJet finally have an interline agreement for travel to all those Canadian cities which may or may not be real.
• Alaska‘s merger with Hawaiian now gave DOJ until August 15 to fight, a 10 day extension.
• Aloha Air Cargo is growing its fleet.
• Avelo is adding two – Ontario and Salt Lake City — both to be served from Santa Rosa.
• Bees Airlines plans to begin buzzing later this year.
• Cathay Pacific is renovating its lounge in Beijing.
• Copa is the first of likely several airlines to suspend service to Venezuela.
• Croatia Airlines took delivery of its first A220.
• Delta is offering employees two positive space confirmed passes as a make good for having to deal with the CrowdStrike meltdown that Delta had nothing to do with and is not responsible for at all.
• Emirates is putting a second Dreamliner on its Bali service.
• Etihad has a new specialty livery.
• Flybondi is adding winglets on its aircraft after unsuccessfully trying to add them to their luggage carts.
• FlyGabon will begin flying any minute now.
• Frontier cut 43 routes with Orlando, Cancun, and Cleveland among the hardest hit.
• JetBlue is deferring a bunch of airplanes.
• Korean is no longer serving ramen in economy class due to the increasing instances of passengers being burned during turbulence. The carrier will not stand for any non-basic economy passenger being burned during flight.
• Lufthansa joined the rest of the industry with an underwhelming Q3 outlook.
• Pakistan International Airlines might be for sale.
• Philippine Airlines might order a bunch of airplanes. Then again, it might not.
• Porter is adding two: San Diego (4x weekly) and Palm Springs (3x weekly), both from Toronto/Pearson.
• Qatar is interested in acquiring a piece of South African Airlink.
• Ryanair was a loser this time in court. We’ll see what happens next week.
• TUIfly Belgium is grounding its E2 fleet.
• United is adding the E175 to its United Express service to Aspen.
• Viva Aerobus is adding four to the United States from Guadalajara.
• Wizz Air is adding four.