Sky Talk

OnePass going away, frequent flier program will be Mileage Plus

Mileage Plus will become the frequent flier program for the merged United Continental, the company said on Wednesday.

Continental's OnePass loyalty program will end on December 31 and members of that program will be automatically enrolled in Mileage Plus with their award miles being transferred as well. Customers who are members of both OnePass and Mileage Plus will be able to link their accounts.

"Moving to a single loyalty program is a significant milestone in the integration of the two airlines and will provide a more consistent travel experience for customers," the company said in a statement.

United Continental said it will announce details of Mileage Plus, such as elite levels and qualifications and benefits in the coming months.

-Andrea Ahles

Airline stocks fall on disappointing revenue estimates from American, United

One day after airline stocks soared on the news that oil reserves were being released, shares of American Airlines’ parent AMR Corp. and United Continental Holdings dropped when the carriers released disappointing revenue forecasts.

In a report to investors, American said mainline unit revenue is expected to increase between 4 to 5 percent compared to the second quarter of last year but added that hail storms in the Metroplex hurt second quarter revenues.

“Our revenue results reflect about $60 million in lower revenue due to extreme weather events during the quarter in Dallas-Fort Worth and the continued impact of the earthquake that struck Japan in March.

The Fort Worth-based carrier added that it expects to pay $3.13 per gallon for jet fuel in the second quarter, up 32 percent from the $2.37 a gallon it paid in the second quarter of 2010.

Shares of AMR [ticker: AMR] declined almost 7 percent on Friday, closing down 41 cents at $5.64.

United Continental Holdings [ticker: UAL] also saw its shares drop 8.6 percent, down $2.15 on Friday to close at $22.99. The Chicago-based carrier had announced on Thursday afternoon that its revenue growth had slowed in June.

Revenue per available seat mile rose between 3 and 4 percent in June compared to the same month a year earlier, United Continental said in an investor update released after the market closed on Thursday. That figure had been between 14 to 15 percent in May when compared to May 2010.

Delta Air Lines shares [ticker: DAL] dropped 51 cents, or 5 percent to $9.43 while US Airways shares [ticker: LCC] declined 22 cents, or 2 percent to $8.69. Southwest Airlines [ticker:LUV] only decreased slightly, down 5 cents to $11.36.

-Andrea Ahles

 

Airlines change bag policies for military personnel

Military personnel will be able to check up to five bags for free on American Airlines, two more than under the Fort Worth-based carrier’s previous bag policy

The change to American’s policy, announced late Wednesday on its Facebook page, comes as Delta Air Lines was publicly criticized for charging an Army unit $2,800 in extra bag fees as they returned from a training center in Kabul, Afghanistan.

American, like Delta and other carriers, had previously allowed military personnel to check up to three bags free with additional bags incurring fees. American spokesman Tim Smith said the airline is in the process of implementing its new policy over the next few days.

“Given the potential confusion with different military units carrying different amounts of bags depending on their mission, we have elected to proceed with our 5 free bag limit in all cabins,” said American spokesman Tim Smith. “We think it just makes good sense and eliminates possible confusion.”

Smith added that military service men and women are allowed to use the bag policy whether they are traveling on work orders or for personal travel. They are also allowed to have one free bag that weighs up to 100 pounds and 126 linear inches.

Delta changed its bag policy for military personnel on Wednesday as well following the backlash from a YouTube video posted by two Army staff sergeants who said their unit was told it would be charged $200 a piece to check a fourth bag on a Tuesday morning flight from Baltimore to Atlanta. United Airlines and Continental Airlines have also announced changes to their bag policies for the military.

“Military personnel traveling on orders typically do so under the General Services Administration ticketing program, where the federal government negotiates rates and conditions for military and government transportation,” said Victoria Day, a spokeswoman for the industry trade group, the Air Transport Association. “But like all fare setting and service policy determinations, those decisions are made independently by the individual airlines involved, and several have already announced more accommodating changes.”

Southwest Airlines allows military personnel to check an unlimited number of bags as long as they are under 100 pounds and less than 80 inches, said Southwest spokesman Chris Mainz.

-Andrea Ahles

Extra fees generate $22 billion for airlines in 2010, new report says

Airlines around the world are raking in the cash with extra fees, according to a new report.

In 2010, airlines generated almost $22 billion from ancillary revenues streams, including baggage fees, co-branded credit cards and premium club passes. That is a 775 percent increase from the $2.45 billion in ancillary revenue reported by airlines in 2007.

The newly-merged United Continental topped the global list with $5 billion in ancillary revenue in 2010. Delta Air Lines came in second with $3.7 billion while American Airlines came in third with $1.95 billion in extra fee revenue.

"Difficult airline economics are driving this activity," said Jay Sorensen, president of IdeaWorks Co. which authored the report. "Carriers can boost revenue through a la carte fees to balance damage brought by recession, new competitors, traveler demand for low fares - due to the culture prompted by low-cost airlines - and rising oil prices. Today, ancillary revenue has grown well beyond its low-cost airline beginnings and is practiced around the globe."

IdeaWorks, an airline and travel research firm in Wisconsin, partnered with global travel distribution company, Amadeus to put together the report. Amadeus sells software solutions to airlines and other travel firms to help them maximize their ancillary revenue streams.

Here's the top ten from 2010:

1. United Continental $5 billion

2. Delta Air Lines $3.7 billion

3. American AIrlines $1.95 billion

4. Qantas Airways $1.53 billion

5. US Airways $1.13 billion

6. Ryanair $1.13 billion

7. easyJet $926 million

8. Emirates $603 million

9. Alaska Airlines $552 million

10. TAM Airlines $509 million

-Andrea Ahles

 

United Continental and Houston partner up for $1 billion airport renovation

Dallas/Fort Worth Airport is not the only one getting a makeover.

On Monday, Houston officials announced that it will begin the first phase of a $1 billion redevelopment project at Bush Intercontinetnal Airport in partnership with its main tenant United Continental holdings.

The project will begin by the end of the year and the initial phase will create a new Terminal B south concourse for regional jet operations. The $161 million first phase should be completed by 2013.

Future phases of the project include renovations of the Terminal B lobby and baggage claim area and a new north concourse that is capable of handling international flights

United Continental also announced that it will extend its lease on Terminal C at the airport until 2027.

-Andrea Ahles

Airlines' customers and employees give millions to Japan disaster relief

Airlines passengers and workers have huge hearts.

Since Japan's earthquake and tsunami disaster, thousands of customers and airline employees have stepped up to donate millions of dollars to relief efforts in the Asian nation.

On Monday, American Airlines announced that over 16,000 AAdvantage members had donated over $1.6 million to the Red Cross for its Japan disaster relief fund. And with bake sales, hot dog sales and raffles, American's employees have contributed more than $43,000 through the airline's American Giving program to help Japanese victims.

“The devastation in Japan is truly overwhelming, and we are extremely moved that our customers and employees continue to step up to help the victims of the earthquake and tsunami,” said American's vice president-international, Kurt Stache.

United Continental Holdings said on Tuesday that more than 23,000 customers and employees have donated more than $2.5 million to the American Red Cross for Japan disaster relief.

"We are pleased to join our customers and employees in the outpouring of support," said United Airlines Foundation president Sonya Jackson. "Through their exceptional generosity, we have surpassed $2.5 million in cash donations and 63 million frequent flyer mile donations in just one month since this tragedy struck Japan."

Last month, Delta Air Lines announced it was pledging $1 million in cash and in-kind support to relief efforts. The airline's charitable foundation provided a $250,000 cash donation to the Japanese Red Cross Society and committed to match up to 5 million miles against customers' donations to World Vision Japan which transported relief workers and supplies to Japan.

"Japan is a core part of our global network and we are committed to finding ways to help those in need following last week's devastating earthquake," said Delta's senior vice president-Asia-Pacific, Vinay Dube. "Delta's 1,200 employees in Japan, backed by the support of 80,000 worldwide, are rallying together to do what we can to make a difference and we encourage our customers to join us by donating money or miles to our dedicated charities."

-Andrea Ahles

United A320 forced to return to New Orleans after losing cockpit electronics

It's not just Boeing and Southwest Airlines having a rough start to the month of April.

A United Airlines A320 was forced to turn around and make a hasty return to Louis Armstrong New Orleans International Airport early Monday after the crew reported a loss of cockpit instruments.

Then the plane ran off the runway afte rlanding. 

The crew of Flight 497 that had just taken off for San Francisco reported smoke in the cockpit and then the loss of the instruments while turning back to the airport. Copilot Ronald Lee Young said that he landed on backup systems, with minimal steering and braking ability.

The plane veered off the left side of a 7,001-foot runway about 2,000 feet (610 meters) from the end.

- Bob Cox

 

Airlines to give update to investors at Tuesday conference

Every year, J.P. Morgan holds its annual Aviation, Transportation and Defense conference, giving companies in those sectors a chance to brief investors.

All the big names will be presenting on Tuesday including Delta Air Lines, American Airlines, Southwest Airlines and United Continental Holdings. Lockheed Martin will also give a presentation on Thursday.

We're likely to hear about the impact of the rising cost of jet fuel as well as capacity cuts to Japan because of the earthquake, tsunami and nuclear incident.

Most of these publicly-traded companies allow JP Morgan to webcast the sessions. So if you're so inclined and want to listen in, here's the schedule (all times are Central) with links to the webcasts. Sky Talk of course will be blogging Southwest and American's presentations in the morning.

7 a.m. to 7:40 a.m. - Delta Air Lines

7:45 a.m. to 8:25 a.m. - Southwest Airlines

8:30 a.m. to 9:10 a.m. - American Airlines

9:25 a.m. to 10:05 a.m. - U.S. Airways

10:10 a.m. to 10:50 a.m. - Air Line Pilots Association

11:05 a.m. to 11:55 a.m. - United Continental Holdings

12:10 p.m. to 12:50 p.m. - JetBlue Airways

12:55 p.m. to 1:35 p.m. - Alaska Airlines

-Andrea Ahles

Boeing moving toward 737 replacement

With rising costs for jet fuel the number one concern on airline executives minds these days, it seems that Boeing Co. is accelerating its efforts aimed at developing a much more economical replacement for the venerable 737 product line.

Boeing executive Mike Bair told Bloomberg News the company is reconsidering earlier priorities to move ahead with a 777 replacement in favor of a successor to the 737. 

A new plane probably would be wider than the 737 and seat about 150 to 220 people, said Bair. Once that jet enters service, as soon as 2019, Boeing could put new engines and wings on the 777.

“Six or nine months ago, we were leaning toward a bigger airplane sooner,” Bair said in an interview yesterday in his office near Boeing’s Everett, Washington, wide-body jet factory. Now, “most of the emphasis is on a new, small airplane.”

Airbus has already announced plans to overhaul its existing A320 series aircraft, the main competition of the 737, to begin turning out planes with new fuel efficient engines around 2016. Boeing officials have repeatedly said they would prefer to develop an all new airplane rather than merely an upgrade with new engine technology, something the company has previously said might not happen until after 2020.

But major 737 operators such as American Airlines and Southwest Airlines want Boeing to move sooner. 

Jon Ostrower at Flightblogger has more detailed insights on how Boeing will go about designing a more economical and efficient jet beyond using new engines.

- Bob Cox

United's Continental-looking paint livery

Nothing says "we've merged!" like a new paint livery.

On Thursday, United Continental Holdings showed off its new design on one of its Boeing 747 aircraft.

And even though aviation enthusiasts have seen mock-ups of the livery since United Airlines and Continental Airlines completed their merger in October, the paint job is still being discussed on message boards as boring.

It really does look like they decided to just slap some paint over the Continental name and write United. But this is their new corporate design, so look for it to be coming to an airport near you.

-Andrea Ahles