Kayak.com stopped displaying American Airlines' fares in search results after the two companies clashed over how Kayak and its subsidiary, SideStep.com, refer consumers to sites for booking American flights. American wanted Kayak to direct consumers only to its own site for booking its flights. Kayak, however, shows results from Priceline, Expedia, Travelocity and other third-party sites, and it refused to suppress those options for American flights.
TO KEEP PLANES ALOFT in a challenging market, some carriers have eliminated flights, reduced staff or tacked new fees onto customers' tickets. Now several are looking at their vendor contracts too. Creatively designed, or thoughtfully restructured, these supplier agreements have become effective sources of additional liquidity, yielding quick cash or debt relief. Often, they can sustain financial benefits over time.
On July 24, 1988, a 747 carrying 260 passengers and 15 crewmembers was speeding toward takeoff at Indira Gandhi International when a signal light warned of an engine fire. The crew decided to abort the takeoff and the aircraft overran the runway and plowed through 1,000 yards of mud before it could stop. Fortunately, everyone onboard survived, but the impact caused the main gear to collapse and tore up the underbelly. Nearly 70% of the aircraft required repair or replacement.
MWW Group Executive VP and Global Corporate Communications Practice Head Matthew Rose recently spoke with Airline Procurement about MWW's deal with JetBlue Airways to provide contingency planning and training services, incident response support and issues management counsel. (Edited for clarity and length.) AP: Can you please describe MWW's background and expertise, particularly as it relates to the aviation industry?
WHILE FEW FORESAW THE LATEST economic shock to shake commercial aviation "sustained per-barrel crude oil prices well over $130" one of the consequences of the "fuel crisis" has been all too predictable: US airlines, particularly the big legacy carriers, are taking the hardest hit. The largest and most profitable airlines in Europe, Asia and other parts of the world generally navigate through crises with their bottom lines and service levels intact even if earnings become temporarily modest, but US carriers drop to the depths of economic despair during periods of turmoil.
THE FIRST CONFERENCE to be held in the US devoted exclusively to airlines and the environment attracted a diverse audience committed to understanding and reducing the air transport industry's impact on the environment, from greenhouse gas emissions to deicing fluid. Held June 18-20 in Washington, Eco-Aviation was sponsored by ATW and Leeham Company.
HERB KELLEHER has never met Wang Zhenghua, and the legendary co-founder and former chairman and CEO of Southwest Airlines might be surprised to know that he inspired Wang to launch a low-fare airline in China that is built upon the same uncomplicated business model as SWA. "Kelleher is my idol as I learned a lot from him on how to operate a low-cost carrier, so Spring Airlines can only be the student of Southwest Airlines to some degree," the chairman of the Shanghai-based new entrant tells ATW here.
THE FIRST THING YOU NOTICE when you board a Virgin America A320 is the subdued mood lighting. There are 12 different shades that can be changed according to, well, the mood. There are plush leather seats in the two-class cabin and, following in the tradition of an earlier trendsetting transcontinental startup, free live television at every seat. VX also offers more than a dozen pay-per-view movies and streaming audio and claims to have more than 3,000 MP3s onboard, plus AC power for laptops.
DEAN DUVALL IS A NUMBERS GUY who wants to keep open multiple lines of communication. He likes to come to the negotiating table and say, "Here's what we see happening in the marketplace." The managing director of Supply Chain Management for Alaska Airlines and Horizon Air is a true believer in informed perspective, outlook predicated on fine-grain documentation. If knowledge is indeed power, then the two-dozen souls who work in the Alaska/Horizon procurement shop are armed to the teeth.
Ryanair said it will cancel all bookings made through screen-scraping Web sites. "We believe this is a quicker and more effective way of discouraging this unlawful activity and we hope that by getting rid of screen-scrapers we will speed up passenger processing times on Ryanair.com, as well as ensuring that Ryanair passengers are not paying unnecessary handling charges or higher fares to screen-scrapers," the carrier said.
The launch of a new aircraft engine or airframe program is always a historic event, so last month's Farnborough Airshow, while it may have lacked the frenzied commercial atmosphere of recent shows past, nevertheless will be remembered for many years to come for having had two such occurrences (p. 11). CFM International has joined Pratt & Whitney in the competition to supply the engine for the successor to the A320 and 737 whenever those platforms become available and Bombardier is attacking the bottom of that market with the CSeries aircraft, which also received the go-ahead.
Prompted by a doubling of fuel prices, a slowing economy and decreasing fares, SAS Group sent a letter to suppliers in late May requesting a 10% price reduction for goods and services. The company plans to strengthen relations with suppliers that help out with price cuts. The initiative is part of SAS's Strategy 2011, which will see a cutback in the number of suppliers.
Delta Air Lines customers no longer have to wait in long and time-consuming security lines at airports in New York and Los Angeles this summer as a national program using innovative security identification enables passengers to speed through checkpoints in a matter of minutes.
HE ASSUMPTION THAT YOU ARE going to get really intense, severe, cutthroat competition just seems to be unrealistic when you are talking about a small number of carriers who meet in one market after another. I just do not see any reason to believe that the airline industry cannot prosper and attract capital--Alfred Kahn, "father" of US airline deregulation, testifying before Congress in 1977.
United Airlines' decision to ground all of its 737 Classics in the coming months, a total of 94 aircraft ( ATWOnline, June 5), is expected to have a significant impact on lease rates for the type, Genesis Lease Ltd. CCO Cian Dooley confirmed. Speaking to ATWOnline at the recent Farnborough Airshow, Dooley said he "would not be surprised to see Classic lease rates drop 10% over the next 12-18 months." Rates for A320s older than 10 years also may be affected.
ANA Group yesterday reported a ¥6.6 billion ($61.1 million) net profit in the fiscal first quarter ended June 30, down a steep 92.4% from the ¥87.3 billion earned in the year-ago quarter, with the drop due largely to the gain realized from the sale of its hotel assets in June 2007.
AirBaltic will launch daily Riga-Amsterdam on Oct. 26 aboard a 737-500. It also reached a codeshare deal with Brussels Airlines under which the Belgian carrier will place its code on airBaltic's Riga-Brussels service beginning Aug. 4.
Ryanair's announced fiscal first quarter profit of €21 million ($32.7 million) did not include a €93.6 million writedown in the value of its stake in Aer Lingus nor €17.9 million in accelerated depreciation on 15 aircraft scheduled for disposal during the 2009-10 fiscal year. As a result, the actual result for the three months ended June 30 attributable to equity holders was a steep €90.5 million loss. The company's operating profit was €7.9 million, down from €157.5 million in the year-ago period.
Vueling Airlines reported a pre-tax loss of €12.5 million ($19.5 million) in the second quarter, an 8.9% improvement from the €13.7 million loss reported in the year--ago period, citing implementation of an "improvement plan" based on cost reduction and increased flight revenue for the "substantial" gain.
TAM's Paraguayan subsidiary, formerly known as TAM Mercosur and now called TAM Airlines, said yesterday that it will cut 120 employees and transfer 133 to TAM as part of an "administrative restructuring."
Avio-Diepen, Interturbine Logistik and Satair entered a joint venture to form Blue Sky Alliance for aftermarket spares including consumables, expendables and standard hardware materials to be handled through a single point of contact. The trio endorsed a potential partnership with Airbus Spares Support & Services. TIMCO Aviation Services said Icelandair selected it to perform C checks on 757s. First check took place last month at TIMCO's Macon facility.
Hawaiian Airlines parent Hawaiian Holdings, benefiting from a legal settlement with Mesa Air Group and the abrupt collapse of two competitors, posted second-quarter net income of $54.3 million, reversed from a net loss of $3.9 million in the year-ago period.
Gol and VRG parent Gol Linhas Aereas Inteligentes submitted a request to Brazil's National Civil Aviation Agency for authorization to integrate Gol and VRG into a single airline company. "The proposed reorganization will simplify the corporate structure of Gol's subsidiaries, maximizing administrative efficiencies, optimizing revenues and reducing financial and operational costs, besides greater operational flexibility," it said. The Gol and Varig brands would be maintained, Gol said.
Martinair appointed Frank de Jong as VP-planning and Harm Winkeler as VP-Asia Pacific. Former Jet Airways CEO Nikos Kardassis, who ran the carrier from 1993 to 1999, will return to Jet as head of its North American operation as senior VP-the Americas and senior adviser to the chairman for corporate strategy and finance. Jet has launched four daily North American services in the past year.
