Sky Talk

JetBlue beats out Southwest for top spot in ACSI survey

After 18 years of leading the American Customer Satisfaction Index, Southwest Airlines relinquished its title to JetBlue Airways this year.

JetBlue had a score of 81 out of 100 for customer satisfaction compared to Southwest's score of 77. The index, which is compiled by the University of Michigan, said Southwest's merger with AirTran affected their passengers' satisfaction.

"Airline mergers tend to create significant passenger dissatisfaction in the short term as operations are combined and consolidated," said ACSI founder Claes Fornell. "Southwest's share value has declined 20 percent over the past year while the rest of the market stayed largely unscathed with most major airlines flat or improving.

Fort Worth-based American Airlines came in sixth with a score of 64, up 1.6 percent from last year while United Airlines ranked the worst with a score of 62.

Airlines continue to remain in the bottom 3 of the 47 industries that the ACSI studies. Airlines average score of 67 is the third worst, followed by subscription TV service, 66, and the newspaper industry, 64.

Here is the full list from ACSI:

1. JetBlue, 81

2. Southwest, 77

3. All other carriers, 74

4. Delta Air Lines, 65

4. US Airways, 65

6. American, 64

7. United, 62

-Andrea Ahles

US Airways exec says ready to work out a deal with American

US Airways President Scott Kirby is bullish about the airline industry and about the prospects for combining his airline with American Airlines.

Speaking to a Bank of America-Merrill Lynch investors conference in Boston on Thursday, Kirby said a merger of US Airways and American "would create a company that can compete with United and Delta," the two airline heavyweights created by prior mergers.

A rebuilt American would as a result of the merger have a much stronger route network with greater efficiencies and capacity for creating revenues, particularly from premium business travelers.

"You have to have a route network like Delta and United if you're going to compete with Delta and United," Kirby said.

Americans announcement last week that it was at least willing to discuss a possible merger while it is in bankruptcy was a positive step. "We're encouraged that we're able to work with American and the creditors committee," Kirby said. "At the end of the day we hope to get the deal done."

Kirby was asked why US Airways believes it can pull of a merger with american and integrate the two airline's operations when it hasn't fully completed the integration with America West. The company does not have new labor agreements with its pilots because the two groups of pilots have not come to an agreement on seniority issues, and are involved in a court fight.

US Air pilots would have a "huge incentive" to get a deal done and to work one out with American's pilots, Kirby said. The terms of the proposed deal US Air has worked out with the Allied Pilots Association, the American pilots union, US Air pilots would be in line for sizable pay raises if the two carrier are merged.

A replay of Kirby's presentation is available on the US Airways web site.

Meanwhile, MIT airline analyst William Swelbar is, to say the least, a tad skeptical of the idea of US Airways-American marriage working out nicely. He thinks USAir officials are wearing rose colored glasses, somehow claiming that under their the combined airline could compete with United despite having thousands more employees.

In its quest to acquire American Airlines, US Airways sounds like a teenager with its first credit card, spending money it doesn’t have.  Paper wealth.  What cracks me up about this “plan” is the new math I mentioned. Critics pan AA’s goal of creating $1 billion in new revenue as bogus because, among other issues, it assumes no competitive response.  Does anyone really think United and Delta are going roll over and let US Airways improve its revenue generation at their expense? Not a chance.

 But neither United nor Delta are afraid of competition much less the threat posed by the paper tiger US Airways/American combination.   Smisek and Delta’s Richard Anderson are smart. They know the synergy formula US has seduced some media and AA’s unions with is but a calculation at this point.  Even American’s own pilots admitted in bankruptcy court this week its faux “deal” with US doesn’t include cost assumptions or valuations.

- Bob Cox

 

 

 

More from the APA on American bankruptcy proceedings

Here's an interesting bit posted on the Allied Pilots Association daily hotline report.

BANKRUPTCY COURT HEARING CONTINUES:The bankruptcy court hearing continued today on AMR management’s request to terminate the company’s collective bargaining agreements. APA Director of Industry Analysis Allison Clark testified that management is understating by $90 million the amount of money its latest contract offer would reduce pilot-related costs. Ms. Clark cited analysis that illustrates management has undervalued cuts they plan to make in medical and pension benefits and in various other areas. In addition, Ms. Clark testified that APA has concluded management plans to cut more pilot jobs during the next several years than they have publicly acknowledged.

 The current phase of the hearing is scheduled to continue for the rest of the week. As noted yesterday, APA has submitted a series of written declarations and filings with the court summarizing our case, which you may review by clicking here. The blacked-out sections you will see are intended to preserve confidentiality of information that AMR has determined to be competitively sensitive.

- Bob Cox

 

Airlines's on time record improves vs. 2011 in March, but down from February

U.S. airlines's on-time arrivals rose in March from the year earlier, according to Dow Jones.

The Department of Transportation's Bureau of Transportation Statistics said the on-time rate for 15 reporting carriers stood at 82.2% in March, compared with 79.2% a year earlier. There was also a decline in canceled flights. The on-time rate was down from 86.2% in February.

The agency also reported cancellations declined to 1% of scheduled flights from March 2011's 1.3% rate. Cancellations in February totaled 1% of scheduled flights.

A flight is counted as on-time if it operated less than 15 minutes after the scheduled time shown in the carriers' computerized reservation system.

Hawaiian Airlines was the most on-time carrier in March with a 92.5% punctuality rate. ExpressJet Airlines booked the worst on-time performance at 74.1%.

Also Monday, the Department of Transportation said U.S. airlines booked their strongest first-quarter rate of punctuality in 18 years in the first few months of 2012 as roughly 84% of flights arrived on time. The 1.2% overall cancellation rate for the period was also the lowest in 18 years.

- Bob Cox

 

Most TWU work groups approve American contract offer

Five of the seven American Airlines work groups represented by the Transport Workers Union of America have voted to approve the airline's final contract offer.

The full story is here at StarTelegram.com.

The five bargaining units ivoting yes include the fleet service clerks, dispatchers, ground school instructors, maintenance control technicians and simulator technicians.

Aircraft maintenance and stores clerks bargaining units voted to reject the terms in the company’s last offer. Each bargaining unit's vote is binding on the workers in that specific contract group.

Voting was conducted by Internet and telephone balloting and certified by the firm BallotPoint Election Services. TWU members began voting Thursday on a last offer from the bankrupt airline’s management. Voting concluded at midnight Monday.

TWU detalied its agreements and differences with American Airlines in a news release. Read it here.

- Bob Cox

 

 

 

American Air touts first quarter revenue gains; analysts say it's not all that impressive

American Arlines officials, as the Star-Telegram reported Sunday, were busy last week touting what they say was the significant improvement in the company's revenue generation performance in the sifrst quarter of 2012 and following the Nv. 29 bankruptcy filing.

During meetings with Wall Street analysts in the past week, American executives touted the fact that the company performed better in its first full quarter under bankruptcy protection than other airlines, such as United and Delta, did after they filed for Chapter 11.

"We said all along that a lot of the investments we made in the network, the joint business agreements and all the investments we made in products and services, are going to take some time to materialize," Chief Commercial Officer Virasb Vahidi said in an interview Wednesday. "All of that is starting to show in our results. If you look, we had increases across every single entity and every single hub."

But analysts don't seem convinced that 90 days of unit revenue growth means American has caught up competitively to the rest of the industry.

Henry Harteveldt, an analyst with Atmosphere Research Group, said American started at a lower unit revenue number, about 11 cents of passenger revenue per available seat mile in the first quarter of 2011, and increased to about 12 cents this year. American's unit revenue still lags behind those of other major carriers like Delta Air Lines, which generates 13 cents per available seat mile.

"The good news is they are seeing a meaningful increase," Harteveldt said. "But there is still obviously a lot of work to do to narrow the gap with United [Airlines] and Delta."

One analyst Robert Herbst, of AirlineFinancials.com, has done his own look at American's numbers and finds them not all that impressive when compared to the to the past performance of major airline's following their bankruptcy filings or even the first quarter performance of American's biggest competitor, Delta.

For those inclined to delve into the financial details, Herbst's comparisons are below and attached as a pdf file Download Q1 unit revenue change post BK 2:

- Bob Cox

'Flight For Control': Pilot says her scary airline novel is based on real life in the business

Karlene Petitt wasn’t too surprised when a JetBlue Airways pilot snapped and launched into an in-flight tirade a few weeks ago.

The Delta Air Lines pilot and veteran of nearly three decades flying passenger jets, has written a thrilling page turner novel that revolves around over stressed, crazed pilots doing far worse things.

“Flight For Control” is a gut-wrenching, fear-of-flying inducing yarn that imagines the unimaginable. A series of unexplained airline crashes that kill hundreds of passengers.

The book is an exciting, if occasionally terrifying read. What makes it not quite plausible but still frightening, especially in the wake of recent events, is that Petitt says it reflects the upheaval in the airline industry and the frazzled emotional health of all its employees.

The lead character and ultimately heroine is Kathryn Jacobs, a former National Transportation Safety Board crash investigator. After a 10-year leave to try out wife and mother duties, the NTSB asks her to return to work to investigate the unexplained crashes.

Kathryn’s husband, Captain Bill Jacobs, is a senior airline pilot with a strong Machiavellian streak running for president of the pilots union. His real plan is far bolder, one with many victims.

While her twin daughters are off at camp, and Bill is immersed in his campaign, Kathryn secretly begins her investigation and what she finds is shocking beyond belief. Would a pilot intentionally crash a plane loaded with passengers?

The what-happens-next and who-done-it makes “Flight for Control” gripping. It’s well written, especially for a self published novel by a first time author.

(To see more about Petitt or order her book go to her website: Flight to Success. It's also available through Amazon.com.

To cope with the strains of a deregulated, highly competitive and cutthroat business the airlines in “Flight for Control” are cutting wages and pensions, pushing employees to the brink. Pilots are financially and emotionally bankrupt due to fatigue, furloughs, and loss of seniority and the recent arrivals are being poorly trained and ill prepared for emergencies.

If it sounds familiar it should, Petitt said in an interview. It’s based on what she sees among her pilot and flight attendant colleagues and friends. We interviewed Petitt at the recent Women in Aviation conference in Dallas.

The idea for the novel, Petitt said, came to her a few years ago when her then employer, Northwest Airlines, was on the verge of bankruptcy. Pilots’ anger was boiling and morale sinking.

“One of these guys sent out a message that said, ‘I don’t give a damn what they give us at this point. We’re going to shut these guys down,’” Petitt said. “I thought how far would a pilot go? Would they really try to shut an airline down?”

Petitt, who has a master’s degree in counseling, got another glimpse into the emotional state of pilots while working with an employee assistance program for Northwest pilots.

“We got so many calls of personal crisis,” Petitt said. “Family stuff. Just stuff that you know is stress going on between finances and working too much and tearing relationships apart. They’re not home for their kids. Their kids are into drugs.

“These people have worked their entire lives and they’re losing it. They’re losing seniority. They’re losing income, homes and pensions.”

It makes you hope your pilot doesn’t lose it entirely in flight, at least not when they’re at the controls.

- Bob Cox

 

Community meeting set to discuss Houston Hobby expansion

Sky Talk probably doesn't have many Houston aviation readers...but for those who are out there, a community meeting is being held on Sunday to discuss the possible expansion of Houston Hobby airport.

The announcement of the meeting said an "all-star lobbying teams face off at city hall on behalf of Southwest and United Airlines regarding Hobby Airport expansion, Houstonians will voice their opinions at a community meeting this Sunday and have their questions answered by key stakeholders from both sides of the Hobby Airport expansion debate."

The meeting will include State Rep. Garnet Coleman and representatives from the city of Houston, Southwest Airlines and United Airlines. It will be held on Sunday at 3 p.m. at the Harbach-Ripley Neighborhood Centers in Houston.

-Andrea Ahles

American Eagle ground services awarded contract to handle United Express ground operations at 9 airports

American Eagle announced it has been awarded a contract to handle ground operations for United Express at nine airports.

The carrier's ground handling business will provide services for United Express at Texas airports in Waco, College Station, Killeen/Fort Hood, Tyler, Beaumont/Port Arthur, Del Rio and Dallas Love FIeld. It will also provide services at airports in Monroe, La. and Binghamton, New York.

"We are excited about this opportunity to expand our relationship with United Express," said American Eagle senior vice president Pedro Fabregas.

-Andrea Ahles

TWU says possible international hub at Houston's Hobby airport could mean hundreds of flight attendant jobs

I haven't written much about the proposal to turn Houston's Hobby airport into an international hub but on Friday the Transport Workers Union threw its support behind the idea.

TWU Local 556 president Thom McDaniel said the proposal could mean hundreds of jobs for the Houston area including for flight attendants. The TWU represents Southwest Airlines' 10,000-plus flight attendant workforce and the Dallas-based carrier could grow its hub at Hobby if international flights were allowed.

“Adding international flights would create jobs for flight attendants and other airline workers as well as providing tremendous benefits for our great city.” said McDaniel, who is one of the 1,000 Southwest flight attendants based out of Houston “International flying from Hobby is good for job creation, is good for our economy, and is good for Houston.”

The Houston City Council is scheduled next month to consider a proposal by Southwest that would allow the Dallas-based carrier to build a customs facility at Hobby. That would allow Southwest to fly to Mexico, the Caribbean and other Latin American destinations from Houston.

Speaking to the Houston Chronicle's editorial board earlier this week, Southwest chief executive Gary Kelly said the airline will cover the $100 million cost of the project by debt backed by Southwest and paid off through ticket charges. He said the carrier is not asking for any city investment in a terminal expansion and customs facility addition to Hobby.

United Airlines, which operates out of Houston's George Bush Intercontinental Airport that has international customs facilities, opposes Southwest's proposal to the city.

-Andrea Ahles