Filed in archive
Aircraft
, Aviation News
on July 29, 2010
©
Axel Schwenke
The increase in profits are interpreted to mean that previous losses have been somewhat mitigated. The earnings are a concerted effort from the various companies under Lufthansa namely: Lufthansa Passenger Airline, the logistics unit and recently acquired Austrian Airlines.
To date, the airline's revenues have reached EUR6.9 billion while second quarter net profits are at EUR194 million. These are attributed to high demands for First and Business Class passenger bookings and from heavier long-haul traffic. These are further boosted by the EUR94 million capital gains from the transfer of 8.5% of its shares to German airport operator Fraport AG.
Analysts have estimated Lufthansa's profits to reach EUR403 million against earlier estimates of EUR198 million.
Filed in archive
Aircraft
, Aviation News
on July 28, 2010
©
dear Edward
Records show that the average first quarter fare is $328 for the period January to March. This is by far the highest since the year 2001 and the highest in the past fifteen years in terms of inflation adjustments.
Second quarter earnings reports for all airlines show a definite recovery within the industry based on monthly performances.
Among the 100 biggest airports in the United States of America, Huntsville, Ala still had the highest fares at $500 while the lowest fares belong to Atlantic City, New Jersey with $188.
On the other hand, the highest fare increase of 16% was seen for Charleston, South Carolina and the biggest drop was for Milwaukee's 17% decline.
Filed in archive
Aircraft
, Aviation News
on July 28, 2010
©
Deanster1983
Except for the impact of fuel hedging, this means a $0.29-per share earning. Revenues totaled $3.17 billion, outperforming the industry at a time of economic recession. The predicted income of the airline was pegged at only $3.15 billion by analysts polled by Thomson Reuters.
Reported numbers also show that the airlines' per gallon fuel costs jumped 32% to $2.37 outside of taxes. Similarly, load factor increased to 79.3% from last year's 77% while traffic is at 2.7% as capacity dipped 0.3%.
Well-known in the industry as the discount giant, Southwest Airlines is believed to have greatly benefited from a recovery that lifted airline performance recently. The airline's discount program is believed to have been responsible for the income growth.
Filed in archive
Aviation News
on May 3, 2010
Well after what amounted to a week-long hiatus from publishing this blog, I'm back. And I picked the right time... Because today, United and Continental announced their long rumored merger. This wasn't any sort of surprise, as the two airlines had been dating each other on and off for the past few years, and just finally consummated the relationship. The merger will be done as an all-stock deal, valued at $3 billion. The merger will form the world's largest airline, 10% larger than Delta. The new corporation will keep the United name, but in a surprising twist, Continental's logo and livery.
Which brings me to the first major question I have about the merger...
Who's Gonna Be in Control?
This is one of the major questions that is going to be answered in the next few weeks as details become clearer. But from what I've gathered, the new airline will have its headquarters in Chicago, but Continental's Jeff Smisek will be the head honcho. To me this signals that the airline is looking to combine the employees of the two brands, rather than allow just one to lead. This is a wrong decision on so many levels. Despite the job UA's top people have done in turning around that company, Continental's have done a better job. Just looking at their finances will prove my point. CO has been much closer to a profit than UA in the past 15 quarters or so. With Continental making the decisions, it is my belief that the airline could easily succeed, unfortunately that's not the case.
Are They Keeping First Class?
United is one of only two US airlines to still offer a first class product internationally. Makes sense, considering that they're hubbed in some of the most business-centric towns in the US. But Continental has a great Business Class product, BusinessFirst, and converting all those birds into three class aircraft would take a serious investment. Not to mention, a lot of markets can't handle the three classes. I think that United should actually keep the two classes, as it would allow them to better mix the routes they serve.. Lufthansa and British Airways both operate mixed fleets abroad.
What Routes Are Going to See Equipment Changes
Part of the point of this merger is to consolidate and reduce capacity. The other thing it does is allow them to "right size" certain routes, ie. putting the right capacity on the route. So where do I see capacity being cut? The obvious one is Cleveland. Cleveland actually performed an important role for Continental by allowing them to flow lower-yielding connecting passengers to the East through Cleveland, leaving the higher yielding O&D to Newark. But now Washington Dulles, and Chicago O'hare can perform the exact same function, and as stronger bases can support more flights. Therefore, in the short term, I'd expect some of the longer regional routes to be cut, bringing the hub down to around 150 daily flights. Longer term, it'll probably shrink down to around 50 or so flights that can support themselves on O&D. The other thing that should occur immediately happen, is international flights will see aircraft changes to add or reduce capacity. Some examples are Newark-Tokyo, and Houston-London, which may be shifted to larger aircraft.
Over the next few days I'm going to take a longer look at this merger
Here's a site about the merger:
http://www.unitedcontinentalmerger.com/
Filed in archive
Aviation Resources
on April 27, 2010
Ever since the United States aviation market shifted from the point to point transport model, airlines have made hubs, and destroyed them. The hub and spoke model is " a system of connections arranged like a chariot wheel, in which all traffic moves along spokes connected to the hub at the center," as per an official definition. The hub and spoke model was pioneered by Delta in 1955 at Atlanta (no surprise there), then after airline de-regulation in 1978, everybody else followed.
How does the hub and spoke model work? Well, look at it this way. Lets say that an airline operates a 50 seat jet between St. Louis, and Aspen. Well, most likely, only 10-15 of those people are actually going to Aspen. But if five people from Atlanta, Boston, Hartford, Detroit, and Pittsburgh respectively get on that plane, then suddenly it could be full. And vice versa, maybe there aren't enough people to fill a plane from Aspen to any of those places.
Here is a model depicting the phenomenon:
So to start off, I'd like to define what exactly makes an airport a hub for an airline
To be a hub, under my definition, an airline's operation at an airport must fit one of the following categories
- They hold a marketshare of at least 45% at an airport with more than 5 million enplanements in 2008.
- They operate at least 150 daily flights at the airport, when combined with their regional partner
- They enplane at least 5.5 million passengers a year at the airport
Under those definitions, here are airline hubs in 1990, and in 2010
1990
America West:
Las Vegas
Phoenix
American:
Dallas Fort Worth
Raleigh- Durham
Nashville
Chicago O'hare
San Jose
Braniff (2):
Kansas City
Continental:
Cleveland
Denver
Houston
Newark
Delta Airlines:
Boston
Cincinnati
Dallas Fort Worth
Atlanta
Orlando
Salt Lake City
Los Angeles
Eastern Airlines:
Atlanta
Miami
Midway Airlines:
Chicago Midway
Midwest Airlines:
Milwaukee
Pan Am:
New York- JFK
Miami
TWA:
St. Louis
New York-JFK
United:
Denver
Chicago O'hare
Los Angeles
Tokyo-Narita
San Francisco
Washington-Dulles
US Airways:
Pittsburgh
Baltimore-Washington
Philadelphia
Charlotte-Douglas
2010
Alaska:
Seattle Tacoma
Air Tran:
Atlanta
Orlando
American Airlines:
Dallas Fort-Worth
Miami
Chicago O'hare
New York-JFK
New York- La Guardia
Los Angeles
Continental Airlines:
Cleveland
Newark
Houston Intercontinental
Delta Airlines:
Atlanta
Cincinnati
Detroit-Metro
Minneapolis- St. Paul
Salt Lake City
Memphis
Tokyo-Narita
Frontier Airlines:
Denver
Milwaukee
JetBlue Airways:
New York- JFK
Southwest Airlines:
Las Vegas
Los Angeles
Baltimore-Washington
Chicago- Midway
Denver
Orlando
Phoenix
San Diego
Tampa
United Airlines:
San Francisco
Denver
Los Angeles
Chicago O'hare
Washington-Dulles
US Airways:
Philadelphia
Charlotte-Douglas
Phoenix
Washington-Reagan
Original Image Credit: http://www.delta.com/planning_reservations/plan_flight/aircraft_types_layout/crj-200/- CRJ layout
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