Cranky Weekly Review Presented by San Francisco Bay Oakland International Airport: DOT Implements Loyalty Tests, AA’s AAdditions

DOT Places Loyalty Programs Under Scrutiny

The Department of Transportation opened an investigation into frequent flier and loyalty programs, specifically targeted at American, Delta, Southwest, and United. The government will be “seeking more specific data to better understand the largest rewards programs and identify potential competition or consumer protection issues or risks,” as detailed in a letter sent to each of the four carriers.

The DOT plans to specifically focus on four aspects of the programs:

• Devaluation
• Hidden pricing
• Fees
• Reduction in competition and choice

Carriers have 90 days to turn over documents to the government. The DOT has not hinted at what repercussions could result from its investigation, but here’s to hoping it ends up like a class action and we all get 1,000 Delta SkyMiles, because that’ll fix everything.

AA AAdds Five

American Airlines announced five new long-haul, international routes to debut next summer from four of its hubs with all five new routes to operate daily. Most of these routes are just connecting the dots between hubs and existing cities, but there is one new dot added to the map. Don’t get too excited… that long-awaited Washington/National – Moscow flight is not happening.

Beginning March 30, Chicago/O’Hare will be connected to Madrid on a B787-8 Dreamliner. Two flights will commence on May 23, with AA’s return to Edinburgh, with service from Philadelphia, and to Milan/MXP, also from Philly. Both of these routes will also be operated by American’s fleet of Dreamliner aircraft. June 5 will see B777-200 service from Charlotte to Athens begin, while Miami to Rome will begin July 5 on the same aircraft type.

AA is also bringing back other transatlantic service that had been shuttered including Philadelphia to Copenhagen, Naples, and Nice.

Cathay Pacific’s A350 Troubles

Cathay Pacific canceled nearly 70 flights this week after an “engine component failure” was discovered shortly after takeoff on Flight 383 to Zurich. The aircraft, a five-year-old A350-1000 returned to Hong Kong about an hour after departure without incident.

Since the incident, the airline inspected its entire fleet of A350 aircraft — 48 in all — and discovered 15 had faulty parts that created a potential danger. All of Cathay’s A350 fleet are equipped with Trent XWB-97 engines from Rolls-Royce.

The European regulator EASA is requiring a one-time inspection of all A350 engines to ensure this problem isn’t more widespread beyond Cathay Pacific’s 15 airplanes. The airworthiness directive from EASA specifically will require fuel-line checks and for carriers to replace any compromised high-pressure fuel hoses, which potentially is good news for anyone who’s in the airplane engine fuel hose game.

Elliott Passes 10% Threshold

The latest in the saga between Elliott Investment Management and Southwest Airlines is that Elliott has now acquired enough shares of the carrier — 10% — to call a special meeting, which it plans to do if Southwest’s leadership does not meet its ransom demands desired changes.

The special meeting concept is designed to force a shareholder vote on an issue or issues that are so urgent they cannot wait until the next general meeting. In this case, Elliott is likely interested in calling a special meeting to discuss those new morning graham cracker snacks and maybe another one to vote to replace two-thirds of the board if it has time.

The two sides are scheduled to meet on Monday in what will surely be a pleasant gathering with no threats or ultimatums made on either side. If Elliott is unhappy with how Monday’s meeting goes, it is expected to push for the special meeting sometime later this fall.

Air Canada Pilot Strike Looms

Two weeks after Air Canada pilots voted overwhelmingly to approve a strike, the likelihood of a work action is growing with a September 17 deadline rapidly approaching.

The carrier’s 5,400 pilots must provide at least 72 hours notice of their intention to strike, and the ALPA is hopeful that the Canadian government will not intervene to prevent the pilots from striking to push its desire for an updated agreement. Charlene Hudy says AC pilots are making half what their American counterparts make, but she fails to take into account the significant bonus payments offered to AC pilots in both Tim Horton’s gift cards and poutine futures.

Air Canada is confident it will strike a deal to avoid a labor action, but it has implemented a waiver allowing customers scheduled to fly between September 15 and September 23 free changes as a hedge against a possible disruption.

• Aegean is investing €25m in Volotea.
• Aeromexico will begin a daily nonstop flight to Cartagena in February.
• airBaltic will see the Latvian government retain a 25% stake in the carrier despite its IPO listing.
• Air Botswana received its first E175.
• ANA‘s first B777 with low-drag Aeroshark film which supposedly reduces emissions entered service.
• Azul says its near a deal with its lessors and is not in danger of filing for bankruptcy.
• Cyprus Airways added a third A220.
• Delta seatback TVs are developing a very British accent.
• Discover discovered that Marco Goetz began as its CCO.
• Etihad is adding flights to both Prague and Warsaw.
• Finnair celebrated 70 years of flying to London/Heathrow this week by overpaying for perfume and chocolate at Duty Free.
• FlyGabon is finally beginning to operate domestically.
• Hawaiian took delivery of a new Dreamliner.
• ITA is returning to Tel Aviv.
• KLM feels good about the current plan to reduce nighttime noise at its Amsterdam hub.
• Lufthansa Cargo named Elodie Berthonneau as its VP for Asia-Pacific after a heated battle.
• Malaysia Airlines is going to Paris.
• Norse Atlantic is shifting its strategy to more wet-leases and charter ops.
• Oman Air is adding a stopover program for travelers who have an itch to visit Muscat. Premium class travelers will receive a complimentary hotel night, while economy class passengers will receive a free night with the purchase of a second night. Anyone who has ever purchased Basic Economy for any flight in their life on any airline is not eligible.
• PIA is making 75% of itself available on the open market. Go for it. Extra points if you’re a fake pilot.
• Qantas will take over flying between Melbourne and Honolulu from Jetstar in May.
• Ryanair might enter the package holiday market. It also might not. It also might only do it if it can win a lawsuit to do so.
• Starlux began flying to Jakarta.
• Thai will add a second daily frequency to Bali next month.
• United is the first U.S.-cased carrier to resume flying between Los Angeles and Shanghai.
• Virgin Atlantic is adding service to Accra, Riyadh, and Toronto.
• Wizz Air‘s first A321XLR route will be from Milan/MXP to Abu Dhabi.