The Department of Transportation wants to raise the ceiling on foreign ownership of U.S. carriers from 25% to 49% (free registration required). This would give airlines greater access to world capital markets and invite more entrepreneurs (along with more innovation) to enter what is otherwise a pretty stagnant industry. As I previously noted there are no good arguments against this proposal — expect perhaps that there shouldn’t be any ceiling at all.
Monthly Archives
Monthly Archives for May 2003.
You’re welcome, taxpayers
UBS Warburg sees several airlines doing well financially on the backs of their federal welfare payments. Turns out this ’emergency aid’ came at a time when business was picking up anyway. “As carriers cash their welfare . . . er, security refund checks, it’s safe to do a little Monday morning quarterbacking on the economics of the more recent federal airline bailout,” Buttrick said. “Essentially, a $2 billion war investment netted the industry $2.5 billion. As wars go, this was a good one for airline economics. Now if airlines could only run their core business as well,” Buttrick said. Atlanta-based Delta Air Lines got the biggest security reimbursement, $390 million, and has received about $1 billion from the two aid packages combined. Buttrick is cutting his 2003 loss estimate for the industry to $7 billion…
Good news, one micro step at a time
I recently mentioned my hope for more flights out of Washington National. The House Transportation committee has taken one more small step towards increasing flights out of Washington National airport — although fewer than originally proposed.
How the world works
I subscribe to several travel e-newsletters, and while sometimes useful it’s also surprising how little many of these writers know about matters beyond their immediate purview — and how often this fact fails to stop them from commenting. David Rowell, a.k.a. “the Travel Insider,” complains about United’s $2.8 million payment to McKinsey & Co. for consulting services. I agree that United isn’t getting their money’s worth! But this statement bothers me: One assumes that the $2.8 million which McKinsey billed UA for their mystery work in December, January and February is not also being treated as an unsecured creditor outstanding, but rather has already been paid in full! I’m shocked. Shocked, I tell you! Or at least I would be if I didn’t know that expenses incurred by a company after entering bankruptcy take priority,…
Ouch. I can feel my knees aching already
American Airlines has announced that it will be adding seats to about 174 aircraft. This is a major retreat from their strategy to differentiate themselves from their competitors by offering a better coach product. (The aforementioned link is to the American website, so it may change with this new news.) Before you book your next flight, check the schedule, check the price, and make sure you check the legroom. Only American Airlines offers more room throughout the entire Coach cabin. Some airlines have more room in the first few rows of Coach. But ONLY American Airlines has removed seats from every plane to give you more room throughout the entire Coach cabin. Wherever you travel, choose American, and treat yourself to More Room and more comfort. (Emphasis added.) They are likely to deplot the new,…
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Malfeasance at Hawaiian
When United and USAirways declared bankruptcy last year, their bankruptcy proceedings permitted the existing management to stay in place. Not so for Hawaiian Airlines, where the bankruptcy court has appointed a trustee at the request of Boeing, it’s largest creditor. That’s a rare and significant move, showing no confidence in the ability of the existing management to turn around the airline. Boeing’s allegations against the airline are pretty shocking, actually: Boeing claimed that after receiving more than $30 million in federal grants to stabilize the airline industry following the Sept. 11, 2001, terrorist attacks, Hawaiian’s board of directors used the proceeds as a “reward” to shareholders, principally [Hawaiian Chairman and Chief Executive Officer John W.] Adams, and to other company insiders. Adams holds 50.9 percent of the company’s parent stock and has the right to…
E-Bay’s new reward points
I’m quoted this morning in a story on Ebay’s new points program. My thinking is probably a little more generous than the piece suggests, since my general take is that almost any new reward program from a major company is a good thing — but that I won’t be participating until the program becomes a little more generous. Frequent-flier-program enthusiasts gave the new program a chilly response. Gary Leff, who runs a frequent-flier Web site (www.webflyer.com/blog/), called the eBay program a “very bad deal.” Leff said that, once converted to eBay points, airline miles end up being worth less than a penny a mile. “But properly spent, those miles are worth far more,” Leff said in an e-mail. “I recently gave my grandparents two first-class tickets from Miami to Sydney. Those tickets would have cost…
What WAS the reason for federalizing airport security? Trying to remember…
Not only have TSA security screeners not all had background checks, butof those who had — and have been found to have criminal records — not all have been fired. “It is a concern because one of the reasons we federalized this in the first place was because there hadn’t been background checks, or standards for background checks, before Sept. 11,” [Rep. John] Mica said.
Naples Airport: RIP
USAirways, the last carrier at the Naples Municipal Airport on the West Coast of Florida, plans to pull out. But the airport plans to remain open. I always thought it was a great little airport. One gate — gate one — with an A door and a B door so that arriving passengers could enter differently from where departing passengers were cueing. And the airport has free parking. Last time I was there, though, American flew several flights a day to and from Miami, and if I recall correctly Cape Air also served the airport.
