The long-awaited part three of our look at what’s wrong with American is now live. This week, we talk about the importance of leadership and what’s lacking at the airline. You get an extended director’s cut this week since there was some confusion with our producer who didn’t cut it down to make it more succinct as we had originally asked. So, enjoy the bonus content and let us know what you think.
DOT Takes Aim at Mexican Air Service
The U.S. Department of Transportation issued an order to cancel 13 routes between the United States and Mexico and end all service between the two countries that operates from the Mexican government’s newest boondoggle airport Mexico City/AIFA.
The routes getting the axe include MEX to San Juan and NLU to both Houston/IAH and McAllen on Aeromexico. Volaris’s MEX-Newark flight is gone, which, admittedly, might be the best thing for U.S. – Mexican relations since Fernando Valenzuela, while Viva’s proposed flights from AIFA to Austin, Chicago/ORD, Dallas/Fort Worth, Houston/IAH, Los Angeles, Miami, New York/JFK, and Orlando are gone before we hardly knew ye.
The DOT also proposed banning Mexican passenger carriers from carrying cargo between Mexico City and the U.S. That would take effect 108 days after being finalized, but would have a carve out built in for basic economy passengers — despite being nothing more than cargo to the airlines, they’d still be allowed to travel.
Southwest’s First Lounge Could be Coming
The Hawai’i state government might have let the cat out of the bag this week that Southwest is going to build its first-ever lounge in Honolulu when a lease agreement between the state and Southwest from October 9 appeared online.
The question now is what the airline will do with its lounge(s) once open. Will it allow lounge guests to choose their own seating based on what’s available when entering the lounge, or will seats be pre-assigned? Will bringing bags into the lounge be complimentary, or to keep the aisles and other spaces clear, will luggage need to be checked upon entry — for a fee? Who will have access? A List Preferred members? Credit card holders? Will there be a bundle you can buy at purchase that includes access?
We can rest assured that Elliot will advise the carrier to do whatever makes the most short-term revenue — maybe we’ll see access for everyone flying out of HNL on the carrier, with all tickets carrying a mandatory $50 lounge fee. The possibilites are limitless!
JetBlue’s Summer Finances Weren’t the Worst Ever
It wasn’t a profitable Q3 for JetBlue, but it was a step moderately in the right direction as the carrier came in at the better end of both its revenue and cost guidance with $2.3 billion revenue. Despite the positive momentum, the telltale sign of an airline that’s losing money was evident in its earnings report — it led with reliable service during the quarter, then boasted about its East Coast leisure network, the customer value it delivered,and its financial future, before getting down to the actual information.
Then, once we got to financial results, the top bullet was a capacity increase of 0.9% YoY, then operating revenue, and a bunch of other metrics, and you then have to scroll all the way down to the chart to see that it lost $100 million during Q3, significantly more than the $38 million it lost last summer. The loss comes out to 40 cents per share, slightly better than the projected loss of 43 cents.
Looking forward, B6 expects Q4 unit revenue to be flat to down 4%. It says it can achieve a break-even margin next year and begin to make money by 2027, but that is a long way away. When asked about the earnings report, United CEO Scott Kirby refused comment, claiming the t-shirt he was wearing that said “United Hearts JetBlue” with an image of a “Merge” highway sign was merely a coincidence and that he didn’t realize he put it on that morning when getting dressed.
Delta, Aeromexico Try Again
Delta Air Lines asked a U.S. appeals court to stop the the federal government‘s order to compel it to end its joint venture with Aeromexico. In the filing, Delta told the 11th Circuit Court of Appeals that it would face major costs that it will not be able to recover, even if the court later upholds the JV, and that the losses would be so great no amount of SkyMiles devaluation would be able to make up the difference.
The two airlines combine for about 60% of the passenger traffic from Mexico City to the United States, but only about 20% of the share of the U.S. – Mexico market. AA has about 21% of the share in between the two countries, while LOT, JAL, and Air New Zealand combine for 0%. The DOT says Delta would not be required to sell its 20% stake in AM, simply that the two could not coordinate on schedules and pricing.
A Delta spokesman would not comment on the record, but we did learn that the two have never coordinated on price. “We use dollars and they use pesos. The math never adds up. And don’t get me started on SkyPesos,” he said while slinking to the relative safety of Delta’s Biscoff Tunnel in Atlanta.
Frontier Expands Mileage Redemption Choices
Frontier Airlines is adding a new option for members of its Frontier Miles loyalty program, letting them spend their hard-earned miles on bundles that will add to the already luxurious Frontier experience.
The new bundles come in three levels and include: carry-on bag, standard seat selection and no change or cancellation fees at 2,000 points; an upgrade to 4,000 includes everything at 2k plus a premium seat selection, and if you’re feeling especially fancy, spending 8,000 Frontier Miles will get you a carry-on, two checked bags, an UpFront seat, no change or cancellation fees, and you can pick which animal will be on the tail of your plane.
Realistically, flying Frontier is what it is — and its loyalty program is never going to be confused with one that you can redeem for premium travel across the world. But at the very least, this offers greater flexibility for customers who might fly Frontier once in a while and have a few orphaned miles that are just collecting dust. When asked to comment on whether or not this offered a good value for passengers, Delta SkyMiles executive Nick Pajisco said he “wishes Frontier luck, but you’re not a real mileage program until you can redeem 800,000 points for a one-way business class ticket from New York to Paris.”
- Air Canada is cutting about 400 corporate positions.
- AirJapan is shutting down early next year. and will be absorbed by ANA. For those of you keeping score at home, this AirJapan is a brand that flies long-haul routes for ANA on two economy-only B787s. Air Japan, another ANA subsidiary that operates flights on behalf of ANA, is still kicking.
- Air Peace is flying to London/Gatwick.
- Cebu Pacific is leasing two A320s from Bulgaria Air.
- China Airlines expects it first B787 delivery early next year.
- Connect Airlines plans to connect Waterloo with cities in the U.S. Service is expected to begin once its confirmed whether or not Waterloo is a real place and Connect is a real airline.
- Delta appears to be restarting both Atlanta and Boston to Tel Aviv. It’s also adding Saturday-only, summer seasonal service from Austin to Bozeman, Destin, and Kalispell.
- Eastern was grounded this week as it ran out of money. This is not the first time this exact sentence has been written before.
- EVA is increasing its frequencies to North America.
- Fiji Airways named Paul Scurrah as its new CEO. Poor guy has to move to Fiji now.
- Lufthansa Group is rolling in the deutschmarks.
- JetBlue is moving forward with lounges in both Boston and New York.
- Norse Atlantic raised about $11.4 million, presumably from some people with name Bjørn and some with other names.
- Norwegian took delivery of the first of 80 B737 MAX 8 aircraft it has on order.
- Qatar is adding new service to Red Sea International Airport, its 12 destination in Saudi Arabia.
- SWISS is grounding much of its A220-100 fleet in order to strip them for parts to keep its A220-300 fleet flying.
- Tunisair‘s former CEO Khaled Chelly was sentenced to three years in prison for his role in a fake diploma scheme and suspicious hiring practices at the carrier.
- United is adding three new cities: Alexandria (AEX), Montgomery (MGM), and Roswell (ROW). AEX and MGM will be serviced from Houston/IAH while Denver wins the Roswell lottery.
- Vietjet finalized an order for 100 more A321neos.
- Virgin Atlantic decided to just Phuket and fly to Thailand.
- Virgin Australia‘s first E190-E2 entered service.
- ZIPAIR will operate four one-off charters from Orlando to Tokyo/Narita, which MCO is using to claim the title of first Florida airport with non-stop service to Asia which might be technically true but feels a bit much.
What do you get when you divide the circumference of a jack o’lantern by its diameter?
Pumpkin Pi.
