International passenger demand slowing?

Whatever trends the major airlines were enjoying over their low-cost domestic rivals could be slipping, as the lucrative transAtlantic and transPacific markets start to slow. Delta, Northwest, United and American all say international demand (and capacity) is rising faster than domestic U.S. routes. But could that flight have left the gate?


International passenger air traffic grew 6.3% on the first six months of 2007, higher than the 5.9% growth in all of 2006, the International Air transport Association said on Monday. Not bad, right? But there's a dark cloud: In the summer travel month of June, passenger travel grew much slower, by 5.3% - the lowest rate in 9 months, the group said. Load factors climbed to 75.7% in the first 6 months of 2007. Other highlights from IATA's announcement:

• Asia-Pacific’s carriers will receive the biggest share (35%) of the newly-delivered aircraft ove rthe next 18 months, to meet demand in the fast-growing Chinese and Indian markets.
• European airlines will take delivery of 26%
• North American airlines will take on 25%

The group also decried the British Airport Authority's security procedures, which they said would be under the microscope in the heavy travel month of August:

"A particular focus will be the UK, where unique screening policies inconvenience passengers with no improvement in security. The only beneficiary is the airport operator—BAA—that continues to deliver embarrassingly low service levels by failing to invest in appropriate equipment and staff to meet demand. This must stop.”

News you can use when you book an airline ticket

The good people over at Consumerist have highlighted a great item, on the intersection of data and anecdote. It's a study from Popular Mechanics and confirms what most flyers knew already: It's safer in the back.

Where detailed seating charts were available, we also calculated survival rates for various parts of the passenger cabin. Again, the trend was clear: The rear cabin (seats located behind the trailing edge of the wing) had the highest average survival rate at 69 percent. The overwing section had a 56 percent survival rate, as did the coach section ahead of the wing. First/business-class sections (or in all-coach planes, the front 15 percent) had an average survival rate of just 49 percent.

Consumerist post here.


Popular Mechanics article here

The 'Airline Quality Report' could use a little help

Read Michael Boyd’s criticism of the “Airline Quality Report” and see if you don’t end up agreeing with him about that group’s survey. A sample from Boyd:

"They (the airlines) just don't get it yet..."

No, its the authors of this lightweight report that don't get it. If they had a modicum of understanding of what's going on in the airline business, they'd not make such a stupid statement.

Boyd's comments can be read here:

For some more recent airline rankings, see yesterday’s post.

JetBlue scores poorly in February, as expected

JetBlue Airways was able to complete just 57.4% of its flights on time in February, ranking 19^th out of 21 airlines tracked by the Department of Transportation -- which isn’t news to anyone who was on one of its tarmac-stuck jets the week of Valentine’s Day.

In fact, the DOT recorded more complaints per passenger for JetBlue in February than any other airline.

JetBlue completed 68.6% of its flights in the last three months of 2006, about the same as in February 2007.

The DOT said that in February, 10% of JetBlue’s regularly scheduled flights were delayed 70% of the time, the poorest record of any airline that month. The airline also had 9.2% of its operations canceled in February.

The bright spot: JetBlue “bumped” the lowest rate of passengers in all of 2006.

Some other nuggets, according to the DOT’s report on April 2:

• U.S. Airways flight 154 from Philadelphia to San Francisco, scheduled to depart at 8:10 a.m., was late 100% of the time. Its 17 flights in February departed an average of 61 minutes late.
• 3 of the top 10 most delayed flights in February were scheduled to leave Newark, N.J., heading for Charlotte-Douglas.
• A little over half, or 53.1% of Northwest’s 452 arrivals in February at LAX were on time.
• For all carriers at Newark airport, arrivals were considered "on time" just 52.6% of the time.

Supreme Court declines to re-open United Airlines bankruptcy case for its pilots pension claim

The U.S. Supreme Court will not hear a case the Air Line Pilots Association appealed to the court, trying to reverse the takeover of their pension plan by the Pension Benefit Guarantee Corp. druing United Airlines' bankruptcy.

The pilots had already lost at the bankruptcy court level and again in the 7th Circuit Court of Appeals, both of which backed the PBGC, so this wasn't much of a surprise.

When the PBGC took over the plan in late 2004, the United Airlines' pilot pension plan was 49% percent funded, with $2.8 billion in assets to cover $5.7 billion in benefit liabilities, according to PBGC estimates.

Private equity and regional airlines

There’s an excellent and informative article on regional airlines, particularly Pinnacle Air, at SmartMoney.com’s “Under the Radar” column.

Pinnacle, flying as Northwest Airlink, recently acquired Colgan, which will be its platform for growth.

Airline consultant Michael Boyd is quoted as saying regional airlines are headed for a round of mergers.

Private equity leveraged buyouts are touching every industry. Expect them to push consolidation among regional carriers as well.

The end of “Does anyone have change?” on Frontier Air

A milestone in airline passenger service: Frontier Airlines, starting April 1, will start taking credit and debit cards only for in-flight entertainment and drinks.

Attendants will use PDAs with card readers to record purchases.

“Using this new technology and eliminating the complications that come with cash transactions will allow Frontier's flight attendants to get passengers watching TV with beverages in hand quicker than ever before,” the airline said.

Oops, I mean UPS

Did anyone else notice that in all the hoopla over the Airbus A380 superjumbo landing in the U.S. that the plane still carried a UPS logo?

UPS canned its order for the freighter version of the aircraft, the A380F, some time ago, but I guess there wasn’t time to paint over the “brown” icon.

In fact, Airbus is shifting its engineering staff to the passenger version to battle the behind-schedule mammoth plane, and has officially zero customers at the moment for the freighter version.

United Airlines' Chief Operating Officer almost got away

In a proxy filing after the markets closed Monday, United Airlines’ parent company, UAL Corp., listed the value of the 2006 compensation package of its Chairman and CEO Glenn Tilton at $23.8 million.

Peter McDonald, UAL’s chief financial officer, garnered a pay package of $13.2 million.

Neither executive received a bonus, but reading the fine print reveals McDonald’s salary and package was actually higher. Why?

“Mr. McDonald’s base salary was increased in response to a competitive job offer he received from a non-passenger airline,” according to the filing.

UAL signed a new employment agreement with McDonald on Sept. 29, 2006, giving him an annual base salary of $700,000, more than the $501,000 listed for 2006.

To get him to stay, UAL is also giving McDonald a $2.6 million payment that funds a trust, and he in turn, gives up some restricted shares.

There are two major non-passenger airlines in the U.S.: UPS Inc. and FedEx.

By comparison, Scott Davis, the UPS CFO, earned $500,000 in 2006. Alan Graf Jr., the CFO of FedEx Corp., earned a base salary in 2006 of about $778,000.

Live soccer on JetBlue

JetBlue has signed a deal with Setanta Sports to air live English permiership and international soccer and rugby matches. This a great development for fans. Setanta has most major international qualifiers and friendlies and is set to air the Rugby World Cup later this year.


Setanta has been a pay-per-view service for most games, but now, it'll be one of the 36 DIRECTV channels available on JetBlue. Just so you won't miss the game on your JFK to San Fran flight.