Category Archives for Airlines.
It’s difficult to see how United can stand alone, though, with the most draconian restrictions among the largest US airlines. With Delta’s claim that American and United basic economy were driving revenue to them, and with American abandoning their own carry on restriction, it’s just a matter of time before United must react.
On American’s earnings call this morning the airline tried to get ahead of disappointing financial performance both in absolute terms and relative to its largest competitors by announcing new aircraft deferments (reducing, or pushing into the future, capital expenses) and making other changes to their fleet in order to reduce the amount of product (seats) they sell.
On July 3rd I shared that American was poised to relax the most draconian restriction on their lowest-price Basic Economy fares, once again allowing customers on these lowest fares to bring both a personal item and a full sized carry on bag onto the plane. American refused to comment.
However this change has now been announced in this morning’s earnings release, and points to the failure of the business strategy of making your product worse in hopes of generating more revenue.
Air Canada along with Aeroplan’s financial partners has made an offer to buy Aeroplan, the spun-off frequent flyer program with which Air Canada has an exclusive agreement through June 2020.
The market seems to like this deal, or at least believes that the move signifies some deal will occur at a price premium over prior-day trading.
Aeroplan has now issued its response.
Pittsburgh was abandoned as a hub by US Airways starting around 2004. Twenty years ago they flew to about 120 destinations from Pittsburgh. By the end of the decade they had only half that number of flights and were using just 10 gates.
The airport has attracted new service from low cost carriers, but is no longer a hub. They haven’t had service to London since US Airways eliminated Gatwick service in 2004. Today the only transatlantic flying from Pittsburgh is seasonal Frankfurt service (Condor), seasonal Paris service (Delta) and year-round Reykjavík flights (Wow Air).
This morning I wrote that Air Canada made an offer to buy Aeroplan at a $2.25 billion valuation.
Aeroplan was spun off from Air Canada 13 years ago. It’s a separate, independent business that’s part of Aimia, a loyalty company which several other interests as well. Air Canada announced last year that they were going to start their own program and no longer work with Aeroplan.
Here’s more on what the proposed deal for Air Canada to re-acquire the Aeroplan program would look like.
This would allow Air Canada to start with all of Aeroplan’s members, instead of starting from scratch. It would take the pressure off of Air Canada to offer as rich a value proposition to members in order to compete with Aeroplan.
There’s a certain irony to spinning off the program, realizing income, driving down the value of that program and then acquiring it on the cheap.
It’s been over 3 years since I wrote about American’s ‘Goldilocks Problem’ boarding planes too early (before stated boarding time on boarding passes) and updating customers about delays too late.
I find that American won’t post flight delays until boarding time for an aircraft, even when those delays are blindingly obvious. And they won’t update delays until revised departure times have passed. Even when fuel is spilling onto the tarmac.
Former American Airlines CEO Bob Crandall thinks that the airline industry should never have been deregulated (1978) and the recent round of airline mergers (2008-2013) should never have been allowed.
Crandall is wrong on both counts.
American’s CEO Doug Parker and Delta’s CEO Ed Bastian agreed to sit in coach in the back of a Boeing 777-200 and talk about their coach products.
Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel -- a topic he has covered since 2002.
Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »
