Steve Lott

Steve Lott
Articles
Arrivals Column: Passengers Key to Defining U.S. Hubs 

Not all hubs are created equal, and the industry needs to take a fresh look at the definition of a hub because data reveal vast differences across the U.S. airlines. By measuring hubs differently from the government's methodology, some airlines may lose their long-held claim of having some of the largest hubs in the U.S.

Navigating the Operational Landscape of U.S. Hubs 

Flattening the operational peaks and valleys of a large U.S. hub is crucial to improving productivity and cutting costs. A new analysis by Aviation Week's Aviation Daily and partner Eclat Consulting indicates that American Airlines is still leading the way in this work since it first "depeaked" its Dallas-Fort Worth (DFW) hub two years ago. Other carriers are lagging, however, and may be paying a hefty price as a result.

777s To Replace Korean 747s Converted for Freight 

Korean Air's order for 25 Boeing aircraft sets the carrier on a course toward replacing many of its 747-400s with smaller 777-300ERs and introduces the 747-8 into the fleet as a freighter, leaving open the chance of later purchases of the passenger version.

The Nov. 20 deal, which the airline valued at $5.5 billion at catalog prices, also boosts Korean's freight fleet, already the world's largest among passenger carriers, with 10 new freighters in addition to 747-400s now being converted for cargo work.

Delta, Northwest Adjust Fleets for International Growth 

U.S. network carriers are increasingly hitching their futures to international flights, which lately have garnered higher fares and more revenue than domestic services. Delta, in particular, is planning a multi-year global expansion more aggressive than many expected as a key part of its strategy to thrive after it emerges from bankruptcy protection next summer.

U.S. Regional Airlines Must Also Cut Costs 

The growth of U.S. regional airlines has come to a screeching halt in the past year, and without some significant cost reductions, some regional carriers may lose the cost advantage they've held over their network partners.

U.S. Airlines Make Aggressive Push to Mexican Markets 

U.S. airlines' international service expansion to regions with higher demand and revenue don't necessarily have to come in the form of long-haul flights across the world's oceans. Partially thanks to a liberalized government agreement, many carriers--especially low-cost airlines--are increasingly looking closer to home and making an aggressive push across the southern border to Mexico.

Fundamental Market Change Bigger Than 9/11 

Many used the five-year anniversary of the Sept. 11, 2001, terror attacks to discern clues as to what the searing day will come to mean for the troubled airline industry.

But possibly lost in that approach is a curious fact: Ascendant low-cost and low-fare carriers have gained as many market-share points since 9/11 as they did in the previous 10 years. That suggests that the attacks might be better understood as a terrible pause for the network carriers that nonetheless failed to alter the trajectory of fundamental change already underway in the 1990s.

For Sale: Reorganized MRO Company 

Air Canada Technical Services (ACTS) hit a low point this summer when it posted a C$18 million operating loss for the first six months of the year, but a significant restructuring is underway led by a new management team that gives hope to parent ACE Aviation Holdings that the unit will soon be in position to go public or be sold.

LCCs Keep Maintenance Cost Advantage Over Network Carriers 

U.S. network carriers have made great strides in cutting many areas of their cost structures to be more competitive with low-cost carriers (LCCs), but a new analysis shows that's not enough.

Network airlines have reduced maintenance costs 6.4% since 2000, adjusted for seat size, but Aviation Week's Aviation Daily and Eclat Consulting found that the low-cost competition has slashed maintenance expenses 17.1%. Basically, LCCs have a 22% maintenance cost advantage over network carriers, up from 8% six years ago.

Midwest Airlines Deep Into Fleet and Product Strategic Review 

Midwest Airlines in the coming months will make several significant fleet decisions that will guide the carrier through a planned network and schedule expansion. This marks a significant turnaround for the airline, which barely averted bankruptcy three years ago.

U.S. Network Airlines Turning into International LCCs 

While anticipation is growing for U.S. and European low-cost carriers to start transatlantic operations, it's actually traditional U.S. network carriers that are grabbing the role of international LCCs, thanks to dramatic cost reductions, a new analysis shows.

The continued strengthening of transatlantic yields has enticed carriers on both sides of the ocean to add capacity, with total seats this summer nearly matching the 2000 peak. Unlike in 2000, however, U.S. carriers reached the level with new, leaner cost structures.

Top-Performing Companies: Gol Trumps Industry Giants Southwest, Ryanair 

When Gol launched intra-Brazil flights in 2001, the carrier wanted to set the industry benchmark for high-quality, low-cost, low-fare passenger transportation by 2005. Not only did the relatively new airline meet that mark, it did so with impressive cost control and operating margins of more than 20%, positioning it as the top-performing company among carriers with $1-4 billion in revenue last year.

Singapore Airlines Foremost Among Asia-Pacific Carriers 

Even with rising fuel prices and the threat of growing low-cost carriers throughout the region, seven of the 10 top-performing airlines in 2005 are from Asia-Pacific region countries, showing the strength of the airlines' management to adapt to crisis and thrive.

Economy Plays Major Factor In Airline Recovery 

The U.S. airline industry is grasping at any optimistic news that comes along, most recently the report that domestic yields in March and April reached the highest point in more than five years, but there's a major battle that many have overlooked or chosen to ignore--the economy.

Continental, JetBlue Top J.D.Power Airline Satisfaction Study 

The keys to satisfying skeptical airline passengers--an efficient operation and friendly, knowledgeable employees--are lacking among many North American carriers, a new survey shows, but Continental Airlines and JetBlue are leading the race to keep travelers content.

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