Thursday, October 30, 2014

Cancelled flights cost airlines big bucks

In the past 30 days, Southwest Airlines has cancelled 707 U.S. flights, more than any other major carrier. United Continental Holdings Inc. has cancelled 518, American Airlines Group Inc. has cancelled 423 and Delta Air Lines Inc. has cancelled 38. Those 1,686 cancellations represent just under 19% of the 9,000 U.S. flights cancelled in the past 30 days.

The data come from masFlight, a data and analytics company focused on aviation operations that integrates multiple data sources to create reliable, end-to-end records for global flight operations.

The company has modeled different aircraft types and configurations, different costs for domestic compared with international flights, financial impact on leisure vs. business travelers, low-cost carriers compared with legacy carriers and rebooking options for passengers to arrive at an overall average of $5,770 per cancelled flight segment.

Each of those 9,000 cancelled flight segments in the past 30 days cost the airlines an average of $5,770 and that runs to a total of nearly $52 million for just the past 30 days. And that’s during a time of the year when the weather is not particularly nasty.

Costs vary widely. A large wide-body jet like a 777 or 747 from Boeing Co. or the A340 from Airbus that flies international routes can cost nearly $43,000 for a flight that is cancelled due to an event the airline should have been able to control (e.g., missing crew or maintenance) compared with about $13,000 for a cancellation due to an uncontrollable event like weather.

Canceling a small regional jet flight costs $2,750 if it could have been controlled and about $1,000 if the cancellation was due to an uncontrollable event.

There are a few other observations we noted. Regional jets cancel 2.6% of their scheduled flights compared with just 1% of narrow-body jets (the Boeing 737 and Airbus A320) and 1% of the wide-bodies. More than two-thirds (69%) of cancelled flights on regional jets are of the uncontrollable variety, while that number falls to 58.2% for narrow-body jets and declines to a very low 42.8% of wide-bodies.

There are a couple of good things about a cancelled flight, from the carrier’s point of view: no fuel is used and no airport and landing fees have to be paid. But those are included in the calculations from masFlight.

The costs include paying a crew that isn’t going anywhere, paying for maintenance for no reason, perishable food, airport fees and parking, refunds and rebooking fees, passenger accommodations and displaced revenue from having to put those passengers on another flight.

The takeaways: low-cost carriers don’t get punished as badly as legacy carriers; the more business/first-class customers on a cancelled flight the more it costs the airline; lower fuel costs mean a smaller offset against the costs of cancelling a flight; and difficulty in booking passengers later due to full planes (load factor) makes matters worse.

(Paul Ausick - 24/7 Wall St.)

Tuesday, October 28, 2014

Virgin Atlantic looks to exercise 787 options

Virgin Atlantic intends to exercise its Boeing 787-9 options and is looking at the -10 variant as a potential replacement for leased London Gatwick-based 747s.

Firming of the airline's four -9 options would bring its 787 fleet to 21 aircraft by the end of 2018, notes chief executive Craig Kreeger. "We have not exercised those last four options but we are communicating very clearly that we plan to," he says.

Kreeger also discloses that a follow-on order for the largest 787 variant, the -10, is being considered as the airline proceeds toward a decision on how to adapt its fleet after leases on seven Gatwick-based 747s expire in 2019.

While the -10, with 323 seats, is smaller than other candidate aircraft, the 777 and Airbus A350, it offers the advantage of fleet commonality and the attendant efficiency in pilot training among other areas, he notes.

asset image
(Rex Features)

Virgin is set to put its first 787-9 into revenue service tomorrow, flying the aircraft to Boston. The airline is the first in Europe to operate the variant.

The second of the 17 firmly ordered 787s – which are replacing A340s and London Heathrow-based 747s will enter service with Virgin by year-end.

Washington DC, Newark and New York JFK have been earmarked as the carrier's next 787 destinations, after Boston. Kreeger says the plan is to "stay on the East Coast in the early days as we build up our number of pilots who have done many landings on that airplane".

But while the 787 is flying to "places that are shorter-haul – for Virgin Atlantic for the first several months", Kreeger stresses that "it will move", noting that "it’s a great airplane for places like Hong Kong, places like Johannesburg".

He adds: "The aircraft is a great airplane from an economic perspective on any route that we fly it; it’s a particularly good airplane the longer you fly it, where the benefits and fuel savings get bigger. So the West Coast of the US and Asia are two great examples"

But as "a great product" the 787 will be "very valued" in any markets "that have a good amount of upper-class demand, particularly", suggests Kreeger.

Virgin's 787s will make up almost 60% of its aircraft inventory by the end of 2018. Today, the in-service long-haul fleet comprises 10 A330s, 15 A340s, 12 747s and one 787.

(Niall O'Keeffe - FlightGlobal News) 

Monday, October 27, 2014

Pratt & Whitney tightens grip on bizjet market with Gulfstream win

Pratt & Whitney Canada lifted the veil on its 16,000-pound-class PW800 engine, which has been selected to power the new Gulfstream G500 and G600 large-cabin business jets, thus finding a new application for its PurePower family. The engine manufacturer said that the PurePower engine brings major improvements in fuel burn and maintainability. The program is well advanced, as certification of the new turbofan is expected by year-end.

We have nine engines in the development program,” Mike Perodeau, v-p of corporate aviation and military engines, told AIN on the eve of the NBAA show. These engines have run a combined 2,500 hours. This can be added to more than 4,400 hours of experience with the core engine, as the PW800 shares its high-pressure spool–an eight-stage compressor and a two-stage turbine–with the PW1500G that powers Bombardier’s CSeries. On the company’s Boeing 747SP flying testbed, the PW800 has run more than 250 flight hours in over 35 flights since April 2013, Perodeau said.

The 50-inch diameter fan is a titanium, single-piece design. Linear friction is used to weld the blades to the hub. The turbomachinery is the same on the two variants: the G500’s PW814GA (15,100 pounds of thrust) and the G600’s PW815GA (15,680 pounds).

Asked how the new Gulfstreams’ high-cruise speed influences engine design, Perodeau answered that the engine has to provide more thrust in cruise. “Speed is a factor of thrust and drag,” he pointed out.

This was one of the factors that led to the Gulfstream’s PW800 employing direct drive, rather than the geared turbofan design used by other members of the PurePower family that are intended for commercial aircraft such as A320neo, Bombardier CSeries, Embraer E2 and Mitsubishi MRJ.

Perodeau noted that his company is in charge of the integrated powerplant system and therefore has responsibility for nacelle aerodynamics.

Specific fuel consumption is reduced by “two digits” over previous-generation engines. The Talon X combustor yields “a double-digit margin” to anticipated CAEP/8 regulations for reduced nitrogen-oxide (NOx) emissions. It provides “ultra-low” levels of unburned hydrocarbons and smoke.

Pratt & Whitney Canada has designed the engine to be more efficient and ergonomic from a maintenance standpoint. The PurePower PW800 introduces a 10,000-hour time between overhauls and scheduled maintenance requirements are reduced by around 40 percent. Scheduled inspections are reduced by 20 percent.

Ease of access was a key driver in the design, resulting in four large access panels being provided in the nacelle, which is supplied by Nordam. Each panel is large enough for a technician to comfortably work inside the engine, and the lower panels incorporate steps for a safe foothold. It is also possible to remove the inner cowls for deeper access.

Numerous borescope ports are incorporated in the engine for internal inspections. Engine accessories are placed singly around the engine, rather than being stacked, allowing one to be removed in a typical time of less than 30 minutes.

Furthermore, the PW800 features a new Fadec system that offers expanded recording of engine parameters, in turn allowing more sophisticated fault analysis and trend monitoring. Pratt & Whitney Canada has yet to finalize its engine support plans and how retrieved in-flight data will be processed, but it is working on this support aspect as the engine moves toward a 2018 entry into service.

On Pratt & Whitney Canada’s turboprop front, Perodeau announced the PT6 family has reached the 400-million-flight-hour milestone.

Additional PT6 models or upgrades may be expected. Asked if one possibility would be to add a Fadec, Perodeau answered positively. “The Fadec would have to be developed for the engine and integrated at the aircraft level,” he said, but ultimately it would be a cost-benefit question.

(Thierry Dubois - Aviation International News)

Sunday, October 26, 2014

Norwegian Air International center of US and EU meeting

European Commission and US officials will meet in Washington, DC next month to discuss Norwegian Air International's (NAI) controversial application for a foreign air carrier permit from US authorities, sources tell Flightglobal.

The unprecedented "extraordinary" meeting of the EU-US joint committee that oversees the EU-US open skies agreement will take place on 25 November, say sources close to the situation.

EU officials had requested for an "urgent meeting" after the US Department of Transportation (DOT) in September rejected NAI's application for exemption authority to operate to the USA, saying it was not in the public interest to approve the request. DOT said in September it was still reviewing NAI's application for a foreign air carrier permit.

EU officials plan to "clarify and resolve questions relating to the application of the EU-US Air Transport Agreement as regards the application of Norwegian Air International for an exemption and its request for a foreign air carrier permit", said European Commission acting director for aviation and international transport affairs Olivier Onidi in a 9 October letter to US Department of State deputy assistant secretary for transportation affairs Thomas Engle.

Onidi had proposed in the letter, a copy of which was seen by Flightglobal, for the meeting to take place in Brussels on either 11 or 20 November. It is not immediately clear why the meeting is now taking place in Washington, DC instead.

Besides discussions on NAI, EU officials are also seeking the urgent meeting with their US counterparts to resolve differences over restrictions on aircraft wet leases, according to Onidi's letter.

NAI is an Ireland-based subsidiary of Norwegian, which plans to transfer its long-haul operations to NAI. Norwegian already serves the USA non-stop through its Oslo-based subsidiary Norwegian Long Haul. These flights are not affected by the DOT's decision in September.

Norwegian had planned for NAI to take over the flights, but the airline's plans in the USA attracted a firestorm of protest from several airlines and labour groups, who accuse Norwegian of basing NAI in Ireland to escape stricter labour laws in Norway. NAI's critics also say that the carrier will benefit from lower labour costs by using crew based in Asia.

Norwegian chief executive Bjorn Kos is scheduled to speak in Washington DC on 20 November at an industry event, where he is expected to make a case for Norwegian's plans to an audience that will include representatives from the US government, airlines, labour and lobbying groups.

(Ghim-Lay Yeo - FlightGlobal News)

ATS and Southwest Airlines ink new maintenance deal

Southwest Airlines 737-7H4 (36617/2491) N905WN arrives at Los Angeles International Airport (LAX/KLAX) on September 25, 2014 sporting the carriers new livery.
(Photo by Michael Carter)

Aviation Technical Services (ATS) announces a new agreement with Southwest Airlines that will bring additional work to the MRO provider’s new facility at Kansas City International airport.

The agreement calls for ATS on begin providing MRO services to Southwest’s Boeing 737s later this year, and for the work to last three years, says ATS.

The company calls Kansas City a good fit for Southwest, noting that the carrier operates 67 daily flights from the city to 26 destinations.

Southwest is a longtime ATS customer; its aircraft have been maintained at ATS’ Everett, Washington, site for about 40 years, ATS notes.

The agreement is the latest win for ATS’s new 607,000ft (56,392m) Kansas City site, which the company formally opened in July.

At the site, formerly operated by American Airlines, ATS will perform heavy maintenance checks on Hawaiian Airlines’ Boeing 767s and modification work on Air Canada’s incoming Boeing 787s, ATS says.

(Jon Hemmerdinger - Flight Global News)

Spare parts now getting to Iran Air as Boeing takes advantage of eased sanctions

Iran Air 747SP-86 (20998/275) EP-IAA "Persian Gulf" captured in gorgeous sun on February 16, 2009.
(Photo by Robbie Shaw)

Commercial airplane manufacturer The Boeing Company had entered into an agreement with Iran Air in the second quarter of 2014 to sell airplane parts.

The deal was pretty significant as sanctions imposed on Iran after the 1979 U.S. hostage crisis had impacted the country’s civil airplane industry. Iran’s commercial airplanes were aging over the years, raising concerns regarding their safety.

In its third-quarter 2014 filing Boeing disclosed that it sold aircraft manuals, drawings and navigation charts and data to Iran Air, the country’s flag carrier airline. The company generated $120,000 in gross revenues and $12,000 in net profits during the third quarter from these sales.

License Granted Post Relaxation of Sanctions

In Nov 2013, Iran agreed to curtail its nuclear ambition in exchange of partial lifting of sanctions for six months starting Jan 20, 2014. In Jul 2014, the six world powers namely Britain, China, France, Germany, Russia and the United States agreed to extend the period for four more months.

The lifting of the embargo provided an opportunity for the commercial airplane manufacturers to again venture into the Iranian civil aviation markets legally. Iran, in the last three decades, had to depend on the grey markets to acquire spare parts for their commercial airplanes.

Commercial aircraft manufacturers like Boeing and Airbus applied for a license from the U.S. Office of Foreign Assets Control (“OFAC”). Boeing received the required OFAC license and the parts sold to Iran in the third quarter were consistent with the conditions provided in the license.

Can Iran be a New Destination?

The ongoing talks with Iran and the super powers have opened up a small window for the commercial airplane manufacturers, with Boeing planning to sell more airplane parts to Iran Air. Boeing is also negotiating with Iran Air Tours, a subsidiary of Iran Air, for the supply of goods and other services.

However, the airplanes which are presently operational in Iran have aged considerably and simply replacing the parts would not make them adept to the most advanced technology. So, eventually Iran Air will have to replace the aging fleet with brand new aircraft.

If we look at the bigger picture, Iran could turn out to be a new hunting ground for the commercial airplane manufacturers. Iran Air will be needing hundreds of new airplanes to replace its aging commercial fleet. However, everything will depend on the conduct of Iran and the decision of the powers that be.

The global aerospace giants are looking for every opportunity to expand their operations. Apart from Boeing, the engine manufacturer General Electric Co. also received the requisite sanction from the U.S. government to export spare parts to Iran.


(Zacks Equity Research)

Alaska Airlines studies use of fingerprints to identify customers

Security experts have long predicted that airlines in the future will rely on biometrics — fingerprints or retina scans — to verify the identity of air travelers.
 
That has not happened yet, but Seattle-based Alaska Airlines began in August to use fingerprint scans to screen fliers at the airline’s four airport lounges, including one at Los Angeles International Airport.
 
After further testing, Alaska officials say they may expand the fingerprint screening to the ticket gate to identify passengers before they board planes.

Jerry Tolzman, manager of customer research and development for the airline, said passenger surveys show that travelers like using fingerprints to get access to the lounges.

“Customers who have tried it really like it,” he said. “You don’t have to carry a boarding pass or some other form of identification. It’s just one less thing to worry about.”

Expanding the fingerprint screening to gates and ticket counters may be more complicated because it will involve coordinating with the Transportation Security Administration, Tolzman said.


Alaska Airline travelers who want to use the fingerprint scanners must first register their prints at the lounges, Tolzman said.

The program began with the lounge at Seattle-Tacoma International Airport in August and was expanded to the lounges at LAX, Portland (Oregon) International and Ted Stevens Anchorage International Airport in September.
 
(Hugo Martin - The Los Angeles Times)

G500 and G600 **Another good look at Gulfstreams new jets**

After years of secrecy, Gulfstream, the aviation arm of General Dynamics, has finally raised the curtains on its project coded P42, and unveiled two new large business jets -- G500 and G600.

The company kept everyone in suspense till the last moment, having sent out nondescript invitations to the media to an unspecified event on October 14. The industry grapevine was buzzing with speculations that the plane maker might unveil a new plane at the event. Not only did the predictions come true, but Gulfstream stunned everyone by taking out the new G500 jet on its own power, signaling that it has progressed significantly with its development.

The company also gave a mock-up on the G600 jet. Why the secrecy? Why the new planes? What's Gulfstream's game plan? Let's find out.


G500 and G600
 (Gulfstream) 

The shroud of secrecy

It's been Gulfstream's policy to undertake new development programs quietly without much fanfare.

The company has followed a similar approach with its earlier jets like G650 or even the G280, where it announced the plane long after it started development. This is not an easy task. With numerous employees, suppliers, and other interested parties involved in a plane's development, maintaining secrecy is tough. But, Gulfstream has mastered this art to perfection -- though Wall Street analysts guessed the existence of project P42, very little was actually known about the planes till their launch.

Gulfstream's business jets – especially the large cabin models -- are enjoying excellent demand, and the company is careful to ensure that it stays that way. In 2013, Gulfstream sold the highest number of large jets in the industry. Of its total 144 deliveries in the year, large jets made up 121 units, and the key driver was the G650.

The G650 entered service in December 2012 and Gulfstream delivered 42 units in 2013. The two other large jets – the G450 and G550 are also witnessing solid demand. In the first half of 2014, the company has dispatched total of 59 large jets, up by four planes from the year-ago period. The secrecy around new planes ensures that the buyers' interest in existing models remain strong, prevents cannibalism, and doesn't allow competitors to become privy to the company's plans.
 
The G500 and G600

Demand for large jets is typically driven by range, speed, luxury, and comfort -- the new G500 and G600 deliver on all aspects. The two jets priced at $43.5 million and $54.5 million, respectively, would accommodate 19 passengers each on shorter trips and eight passengers on transcontinental journeys.

The G500 would offer a maximum range of 5,000 nautical miles (nm) and G600, 6,200 nm. Powered by latest PW800 engines from United Technologies' aviation arm Pratt & Whitney, the new jets will fly at a maximum speed of Mach 0.925, which is highest in the category and is similar to the G650. With such speed, executives could save roughly an hour of flying time compared with present jets. G500 and G600 are expected to enter service in 2018 and 2019.

The new jets might ultimately replace Gulfstream's existing G450/550. The G450, priced at $38.9 million, can fly 4,350 nm at a maximum speed of mach 0.88, carrying up to 16 passengers. G550, priced at roughly $56 million, can lodge two more passengers and cover 6,750 nm at a speed of mach 0.885. However, the company plans to produce the G450/550 duo till buyers discontinue ordering them.


G450 and G550
 (Gulfstream)
 
In the past, company president Larry Flynn has said that Gulfstream announces an aircraft only after ensuring that there is a market for it. There's big demand for long range super fast jets and the jet maker wants to capitalize on the trend.

Gaining an edge

The large cabin business jet segment is getting more crowded as manufacturers upgrade and add new planes. Dassault Aviation's developing two new large jets – Falcon 8X and Falcon 5X. The 8X will take on the G650 in terms of range, speed, cabin space, and enter service by the end of 2016. Falcon 5X that would enter service in the first half of 2017 would challenge the G450.

In terms of range, Falcon 5X will be comparable with G450 and Bombardier's Global 5000, but it will offer cabin space that's even longer than G650. Dassault is also confident that the operating cost of 5X will be much lower than competing jets.

Bombardier is bringing in two new models-Global 7000 and Global 8000. Global 7000, which is expected to enter service by 2016, would travel 7,300 nm, while Global 8000, slated for service in 2017, would cover 600 nm more than Global 7000.

Bombardier will be the first to use Honeywell's JetWave Ka-Band satellite connectivity platform in its Global family jets. This will allow passengers to experience high-speed Internet while flying. Bombardier expects to fetch an additional contribution of approximately $2 billion-$3 billion annually within the next five years from large jet deliveries.
 
In the middle of all the action, Gulfstream wants to maintain its competitive edge and retain the tag of the highest large jet seller. It perceived a product gap in the space between G650 and the G450/550 duo which the new jets would fill up. The company is also upgrading the G650 to add more range. The first delivery of the new version known as G650ER is expected by this year end.
 
Gulfstream's habit of keeping the development of new jets under wraps helps it maintain demand for its existing jets and leaves rivals guessing. The new G500 and G600 will instill greater strength into its already enviable portfolio and could take it to even greater heights.

( - The Motley Fool)

Saturday, October 25, 2014

Gulfstream G650 N646GA

Gulfstream G650 (c/n 6046) N646GA tbr N788AC upon delivery returns to Long Beach Airport (LGB/KLGB) on October 23, 2014 following a customer flight.
 
(Photo by Michael Carter)

Gulfstream G-V B-8092 and unidentified G550

DeerJet Gulfstream G-V (c/n 510) B-8092 previously operated by the BMW Corporation as N513NW is captured at the Gulfstream service center wearing weights on her nose gear indicating that her interior may have been stripped out. 

This unidentified Gulfstream G550 rests in the SoCal afternoon sun at the Gulfstream service center sporting only a Thai flag on its tail.
 
**Both photos taken at Long Beach Airport (LGB/KLGB) on October 23, 2014**
 
(Photos by Michael Carter)

Gulfstream G550 N34U

Operated by United Technologies Corporation, G550 (c/n 5400) N34U arrives at Los Angeles International Airport (LAX/KLAX) on October 22, 2014.
 
(Photo by Michael Carter)

United to launch 787-9 nonstop service between Los Angeles and Melbourne

On October 26, 2014, United Airlines is launching nonstop service between Los Angeles and Melbourne, Australia. United will be flying the Boeing 787-9 Dreamliner aircraft six times weekly.
 
This is United's first international deployment of this aircraft type. United and United Express jointly operate almost 200 flights daily from Los Angeles to more than 65 destinations. With the addition of the nonstop service to Melbourne, over 37 U.S. cities will be able to connect in Los Angeles to take advantage of nonstop service to Melbourne.
 
With the addition of this new service, United will operate more flights to more destinations in Australia than any other U.S carrier.
 
The Boeing 787-9 Dreamliner aircraft operating from Los Angeles to Melbourne will feature a total of 252 seats: 48 are in United Business/First and 204 in United Economy, including 88 Economy Plus seats with additional legroom. The aircraft has an extended range of 8,550 miles, enabling it to fly nonstop to Melbourne. This will be the longest Dreamliner route in the world to date.
 
United Airlines will also be launching three other new Pacific routes in the forthcoming week.
 
Besides Los Angeles to Melbourne service, United will be adding routes between San Francisco and Tokyo's Haneda Airport tomorrow followed by a launching of two new routes from its Guam hub to Seoul, South Korea, on Oct. 27 and Shanghai on Oct. 28.
 
"These four new routes further strengthen United's presence in the Pacific, already the most extensive among U.S. airlines," said Brian Znotins, United's vice president of network. All four routes will be providing convenience and options not equaled by any other airline in the Pacific market.
 
United Airlines and United Express operate an average of 5,100 flights a day to 374 airports across six continents.
 
(Karin Leperi - Examiner.com)

Allegiant Air posts 3rd quarter results

Las Vegas-based Allegiant Travel Co., parent of Allegiant Air, is reporting third-quarter net income of $14.2 million, down 17.2% from net income of $17.1 million in the year-ago quarter.

Total third-quarter operating revenue was $265 million, up 15.8% year-over-year, while expenses were $236.2 million, up 18.3%, producing an operating income of $29 million, down 1.2% compared to the year-ago period.

Allegiant chairman and CEO Maurice Gallagher said, “During this quarter we saw the departure of Andrew Levy, our president and COO. … He has left the company in great shape. His legacy includes building a solid, capable management team which ensures the company will maintain its strong performance into the future.

In addition, we have also welcomed back Kris Bauer as the airline’s SVP-operations and COO while we conduct our search for a replacement. Earlier this week, our board of directors approved an increase to our share repurchase authority to $100 million from its current level of $7.4 million. We continue to see strength in the business model and are demonstrating that confidence by actively returning cash to shareholders.”

Scheduled traffic during the quarter was up 11% to 1.84 billion RPMs on an 11.5% increase in capacity to 2.03 billion ASMs, producing a load factor of 90.5% down 0.3%.

Yield was up 1.2% to 9.07 cents.

Allegiant said it had 70 aircraft in its fleet at the end of the third quarter, comprising 53 MD-80s, six Boeing 757s, four Airbus A319s and seven A320s. It plans to add nine more aircraft, comprising six A319s and three A320s by 2016.

(Linda Blachly - ATWOnline News)

Boeing 737-900(ER) helps keep Alaska Airlines in the black

Alaska Airlines 737-990(ER) (41732/4296) N408AS arrives in Anchorage at Ted Stevens International Airport (ANC/PANC) on May 5, 2013.
(Photo by Michael Carter)

Alaska Airlines added 8% in capacity year-over-year in the third quarter, but most of the increase was due to replacing smaller aircraft with larger ones and adding seats to existing fleets, the carrier’s executives said in a conference call with analysts this week.
                                                                       
Alaska has taken delivery of 10 Boeing 737-900ERs so far this year and by 2017 will add 36 more. The 737-900ERs are replacing the carrier's 27 older 737-400s and have 37 more seats at roughly the same fuel burn, CFO Brandon Pedersen said. 

“We ended the quarter with 22 of these impressive airplanes, and they allowed us to generate up to 15% more capacity on high load factor routes without additional frequencies,” said Andrew Harrison, senior vice president of planning and revenue management. 

Alaska also said it has added new slimline seats to 55 of 61 Boeing 737-800s, which has allowed to add one row to the aircraft. The final six aircraft will be fitted with new seats later this year. Alaska estimates the additions will give it an incremental revenue boost of about $25 million in 2015. 

The third quarter was successful for Alaska, with the carrier reporting net income, excluding special items, of $200 million. Load factor was 86%, roughly flat compared to a year ago.
 
Alaska made fewer changes to its network in the third quarter compared to recent reporting periods. Three cities--Detroit, Baltimore and Albuquerque, New Mexico—were added. Alaska is operating to the new cities from its Seattle hub, where it is fiercely competing with Delta Air Lines. Two other new routes, from Las Vegas to Mammoth Lakes, California and another from San Diego to Kona, will start soon as leisure routes but will not be flown daily.
 
In the call, Alaska downplayed the competition with Delta, but executives acknowledged that codeshare revenue continues to decrease. Harrison said Delta interline and codeshare revenue declined about $38 million during the quarter.

Alaska said it recovered all but 5% of that revenue by more aggressively selling its own flights and by taking advantage of codeshare and interline agreements with other airlines. With American Airlines, codeshare and interline revenue was up 10%. 

On a route-by-route basis, some are not performing as well since Delta entered the market, Harrison said. "Obviously, where this heavier competitive capacity comes into our market, they tend to marginally underperform our system average," he said. 

In the second quarter, Alaska opened a focus city in Salt Lake City, which has not yet fully matured, Harrison said. "What we've found generally with Salt Lake City is we perform much better when it's into our core Pacific Northwest hubs," he said. "The other West Coast key city flying, they're a little bit more challenging, obviously. We're continuing to work that." Harrison said the airline is working on better marketing itself in the new market.
  
Also on the call, Alaska said it is earning increased revenue on its new discounted first class fare bucket introduced earlier this year. The goal is to stimulate demand during weak periods. Only about half of Alaska's markets now have the new fare, but Alaska said the new fare should be fully rolled out by early 2015.

(Brian Sumers - ATWOnline News)

Thursday, October 23, 2014

Southwest Airlines reports record 3rd quarter profits

Southwest Airlines will see most of its capacity growth in the fourth quarter of 2014 and next year come from expansion at two airports, Dallas Love Field and Washington National Airport (DCA), and upgauging as it removes its remaining Boeing 717s from its fleet.
                                                                       
International routes, which launched in the third quarter of this year, now constitute about 1% of the carrier’s capacity. “Our 2015 international growth plans are modest,” CEO Gary Kelly told analysts.

But the new international routes are a “drag on our results right now,” he said. “We have some work to do,” before those routes perform as well as Southwest’s domestic network.

The carrier expects to add “three or four” new international cities next year, although Kelly did not define where those new destinations will be. Southwest is expecting to expand its international route network in the fourth quarter of 2015 when the new terminal at Houston Hobby Airport opens.

But Love Field and DCA represent a significant expansion for the Dallas-based carrier. On Oct. 13, when the Wright Amendment restrictions at the airport expired, Southwest added 22 new daily departures, the largest single-day route launch in its history.

Next month, Southwest will add eight more cities from Love Field. The long-haul flights enabled by the Wright Amendment’s expiration have seen load factors of more than 90%. “I would not be surprised if load factors at Love Field hover around 90%,” Kelly said, because the facility is limited to 20 gates and demand from the area remains high. 

Southwest plans to limit connecting flights from Love Field, focusing on the Dallas origin and destination (O&D) market.

At DCA, Southwest next month will have 44 daily departures to 14 cities. This completes the schedule changes begun earlier this year when Southwest bought slots at DCA that American Airlines was ordered to divest as a condition of its merger with US Airways. The new flights will not add capacity at the airport, but will be a significant capacity expansion for Southwest, Kelly said.

Southwest had no presence at the airport in 2010 before it acquired AirTran Airways, but it will by next month be the second-largest airline at the slot-constrained facility.

Southwest took delivery of 11 new Boeing 737-800s and two used Boeing 737-700s in the quarter and retired one Boeing 737-500. The fleet grew by a net of two aircraft in the quarter, taking into account the 737 retirement and the removal of 11 AirTran Boeing 717s from the fleet.

By the end of the year, Southwest will have added 33 new 737-800s to its fleet, which accounts for some of the planned 5% increase in capacity in the first quarter of next year, Kelly said. Southwest expects to hold its fleet steady at 685 aircraft through the end of next year, CFO Tammy Romo said.

Kelly noted the “plunge” in fuel prices in the third quarter, and the carrier said it paid $2.94 per gallon of jet fuel for the period, compared with $3.06 in 2013. The volatility of crude oil prices concerns the Southwest CEO, however. “We can’t count on $80 [per barrel] crude prices going forward.” The price for the benchmark West Texas Intermediate crude oil fell from $106 per barrel on July 1 to $80 on Oct. 22, according to the US Energy Information Agency.

Southwest made significant changes, including increasing turn times on some of its flights, to its schedule in August to address its poor on-time performance. Kelly said it is too early to determine if the measures have reversed the problem fully, but he said he is encouraged by the trends.  

Southwest reported third-quarter net income of $382 million, up 62% from the same period in 2013, on revenues of $4.8 billion, or 5.6% more than during the same period a year prior, for an operating margin of 13.5%. Unit revenues rose 4.9%, while unit costs excluding fuel rose 2.5%.  Traffic in the quarter rose 5.6% on capacity that was up about 1% from 2013.

(Madhu Unnikrishnan - ATWOnline News)

Southwest Airlines international service continues to struggle along

Southwest Airlines chairman and CEO Gary Kelly told analysts and media Thursday that its new international service has been “in line with our expectations,” but not great.

 “I will admit to you all they are a drag on our results. Right now, we’ve got some work to do,” Kelly said.

Southwest has already announced Baltimore-Costa Rica service to launch in March 2015, and the carrier will add a “handful of other destinations next year, all with low frequency.”

Southwest began taking over the AirTran Airways international system on July 1 and will finish that takeover before AirTran flies its last flight, Atlanta-Tampa, on Dec. 28. Southwest acquired AirTran in May 2011.

He said international growth in 2015 will be “very modest, particularly considering that Houston doesn’t open until late next year.”

He was referring to a five-gate international terminal under construction at Houston Hobby Airport. It is scheduled to open around the end of third quarter 2015.

UPDATE, 12:55 P.M.: Late on the earnings call, Kelly took up the question of the international routes again. He said one should view it as a question of transitioning the routes from the AirTran network to the Southwest network and setting up the schedule to take full advantage of the international routes.

“We are phasing in our international operations gradually, and right now, the financial performance isn’t what one would expect once those markets are mature. There is nothing unusual about this.
 
There is nothing unexpected. It’s a brand new venture for us. It really has nothing in other words to do with macro issues or whether there is too much supply or too little supply,” he said.

“Those routes were performing very well on AirTran, and I expect by this time next year, they will be performing very well on Southwest Airlines,” he said.

BACK TO ORIGINAL ITEM: The comments on international service were the only ones that were less than buoyant by Kelly and CFO Tammy Romo.

On a happier note, Kelly reported strong results from the Oct. 13 launch of long-distance service from Dallas Love Field. The 22 added flights to seven cities have had load factors in excess of 90 percent, meaning that less than 10 percent of the seats remained empty.

Oct. 13 was the date that the 1980 Wright amendment expired, allowing Southwest and other carriers to fly nonstop beyond Texas and eight other states to which they had been limited prior to Oct. 13.

On Nov. 2, Southwest will grow the non-stops beyond the Wright amendment area by 27 flights and eight destinations. At that time, it will cut 118 flights inside the Wright amendment area to 100, and have 49 flights beyond the Wright amendment area.

On another matter, Kelly thanked the leadership of the International Association of Machinists and Aerospace Workers for agreeing to a tentative agreement covering airport and reservation agents. The IAM was one of seven open contracts among Southwest’s labor groups.

“I hope there will be more tentative agreements that will follow quickly,” Kelly said.

(Terry Maxon - The Dallas Morning News)

Thursday, October 16, 2014

Gulfstream G550 N550AV

Gulfstream G550 (c/n 5490) N550AV, ex N590GA rests on the Gulfstream service center ramp at Long Beach Airport (LGB/KLGB) on October 16, 2014.
 
(Photo by Michael Carter)

Gulfstream G550 M-BJEP

Gulfstream G550 (c/n 5070) M-BJEP, ex HB-JEP, and N870GA rests on the JFIJets ramp at Long Beach Airport (LGB/KLGB) basking in the early morning SoCal sun on October 16, 2014.
 
(Photo by Michael Carter)

Wednesday, October 15, 2014

Gulfstream G650 B-KEY

Got this record shot of G650 (c/n ?) B-KEY this afternoon at Long Beach Airport (LGB/KLGB). This is the first G650 to wear a Chinese registration.
 
(Photo by Michael Carter)

Gulfstream G650 N788AC

Gulfstream G650 (c/n 6046) N788AC is captured resting on the Gulfstream service center ramp at Long Beach Airport (LGB/KLGB) on October 14, 2014.
 
Good thing I got this photo yesterday as they removed the customer registration this afternoon and put the Gulfstream registration (N646GA) back on.
 
(Photo by Michael Carter)