Management and non-union employees at USAirways are eligible for merit raises and unions being asked for pay concessions are screaming bloody murder. In all, 3100 employees are eligible for up to a 4% increase in pay. Both sides have this one wrong. USAirways needs to keep its top people, and that means compensating them competitively. That’s important for the carrier to succeed and its important for all workers to continue to retain their jobs. But it’s also silly to believe that a substantial majority of nonunion workers at perhaps the weakest major airline in the country are indispensable and worth keeping at a higher than current cost. Even a money-losing carrier seeking wage concessions from its unions should make raises available to the top performers needed to emerge from a money-losing state. But they should…
America West Elite Fast Track Promotion
America West is offering silver elite for three first class roundtrips and gold elite for six first class roundtrips, purchased by June 30 and flown by September 6.Now that America West has slashed first class fares this isn’t all that unreasonable a promotion. In fact, Gold should be available for $2000 or less.
Emirates Skywards Signup Bonus
Emirates will give you 5000 miles for signing up for their frequent flyer program and flying within six months.They’re still giving double miles for flights booked online and flown by the end of this month.(Thanks to Free Frequent Flyer Miles for the link.)
Hooters Update
Hooters Air is looking to expand, mostly into underserved communities where the local government will guarantee revenue.
Travel to Haiti
American Airlines will resume flights to Haiti on Tuesday.Tyler Cowen explains why there’s little short-term hope for improvement in Haiti, and outlines the long-term challenges any leadership faces. In summary, So let’s say I was the president of Haiti. I have to keep the leading families happy or at least on board. I have to stop the drug smugglers from killing me or mobilizing opposition. I have to acquiesce in the drug trade, recognizing that most of those around me are on the take. I have to deal with the warlords who rule the local neighborhoods. I have to keep the U.S. President happy or at least neutralize him. I have to keep the population from starving. I have no resources and no tax base. Most of my public servants live from corruption. My country…
Joe B’s web links
I admit it, I haven’t read Joe Brancatelli’s columns in a couple of months, so I’m playing catchup. They really are indispensable (when they’re not a bit too cranky, natch).Last week he offered a series of excellent useful web links, some of which were new to me. My favorite: May I direct your attention to BroadwayBox.com? It doesn’t matter whether you care about the theater or whether you actually ever go to New York and see a play. If you’re a business traveler, BroadwayBox.com offers a dose of clarity. In case you don’t know it, the New York theater has inexplicably adopted the Big Six pricing model. That means the price of walk-up orchestra seats has surged past $100. But since almost no one wants to pay $100 a seat, theaters have resorted to an…
Joe B’s Second Thoughts About First
Joe Brancatelli’s column is dead on this morning. Conventional wisdom is that domestic first class is getting more affordable. He offers the but’s — But it’s getting more rare, as half the flights operated by major airlines are on regional jets or props, more flights are being turned over to one class products like United’s TED, and remaining first class cabins are being downsized. But the quality of first class varies widely across carriers and has been generally downgraded.But tjere are lots of terms and conditions and fineprint associated with these fares. It isn’t the case that consumers can buy what was once available, only for less money.At the same time, though, a couple weeks back I managed a no advance purchase Philadelphia-Los Angeles one-way ticket on Delta for only $500. I was pleased.
It’s the labor costs, stupid
Tyler Cowen, citing a Washington Post article, offers several explanations for the superior economic performance of low cost carriers. In general these explanations are on point but incomplete. The story they tell overemphasizes specific decisions about what aircraft and routes to fly and underemphasizes the compounding of poor labor decisions. The major airlines are often referred to as “legacy carriers” and it’s no coincidence that profitable carriers started in the era leading up to and after deregulation of the airline industry. Certainly many more airlines have failed (such is competition), but those that succeeded started with a blank slate with labor and no built in incentives to capitulate to labor demands. Prior to deregulation, increased wages were just passed along as higher fares which the entire industry had to go along with. While carriers which…
Independence Air: Low Fares and High Unit Costs?
Independence Air, the new name for Atlantic Coast Airlines, is taking a different tact from most of the other low cost carriers. It is flying regional jets which means it needs fewer passengers to break even but also that it will have higher unit costs.Ben Mutzabaugh says they are “trying a business plan that’s never been tested before.” He apparently forgets about Midway Airlines — something that’s easy to do because it’s no longer in business.Midway Airlines was so named because it started out at Midway airport in Chicago. In its second incarnation, it was a regional jet carrier based at Raleigh.Midway shut down after September 11th but restarted service once federal payments arrived. After struggling some more, they tried to convert themselves into a USAirways Express carrier but that didn’t last and now they’re…
Isn’t it supposed to be the other way around?
Several low fare carriers plan to oppose United’s request that the government back a $1.6 billion loan. United’s response: A spokeswoman for United, Jean Medina, said the airline was “flattered that these competitors consider us a competitive threat.” It’s incredibly indicative of how much the aviation world has changed when United is the underdog that might possibly challenge the dominance of JetBlue, America West, Frontier, Airtran, and Spirit.
