Airline Industry

As US airlines look back over 2005, they will no doubt hope that this year will go down as a particularly bad one. High fuel prices, large labor costs and tough competition from low-cost carriers have depressed results all round.

Next year however, may well be a little brighter. After all, a number of airlines have successfully managed to reduce their labor costs. UAL, for example, projects 2006 costs to be 44% lower than in 2002, according to BusinessWeek Online. Such cuts would enable them to offer much more competitive fares and win back some of the domestic market share they have lost to low-cost carriers.

Maybe I am mistaken, but I always though the reason hand-luggage was called hand-luggage, was because it could comfortable be carried by hand.

I was therefore rather surprised at the size of bags some of my fellow passengers were attempting to cram into the overhead bins on board a recent flight from LAX to JFK. Most of these bags were actually suitcases large enough to carry a good few days supply of clothes.

Aircraft maker Boeing pocketed some significant sales recently, with Cathay Pacific buying 12, and Emirates a whopping 42 of the long-haul 777’s, the Wall Street Journal reported.

That’s a big win for the Chicago based manufacturer.

Not only will rival Airbus be mourning the potential sale of 54 aircraft to these two airlines, but also the fact that it is unlikely to sell many of its 777 competitor plane to them in the near future.

The US and the EU made quite some progress in their meeting on transatlantic aviation liberalization when they met in Washington recently; brokering a deal that would pretty much allow airlines to fly freely across the Atlantic.

The deal is still somewhat tentative, in particular as the EU is ‘run by committee’, it still requires ratification by all member states, but nonetheless it’s certainly a gigantic leap in the right direction.

The airline making business is fiercely competitive, exemplified by the ongoing fight between the two biggest players, Boeing and Airbus, for customer orders and in the courts, over the legality of subsidies each has received.

Their behavior however, is not altogether unexpected. Getting and keeping market share is all about making the right aircraft, which unlike designing something like a new chewing gum flavor, involves huge fixed costs, and takes a long time. Aircraft makers need to predict today what types of aircraft will be in vogue in a few years time, and spend billions to develop them.

Airline’s with poor safety standards could soon be blacklisted in the EU, after the European Parliament voted in favor of compiling such a list, the Wall Street Journal reported this week.

Information on the safety of a public service can’t be bad, and in this instance is likely to encourage airlines to buckle up in an attempt to avoid a place on the list. So hopefully it should lead to a higher average safety level in the skies

Dubai might not be that big by size or population, but it’s increasingly featuring on the international business stage. Recently the Dubai Investment Group bid for the bankrupt futures brokerage unit of Refco as well as purchasing a fair bit of real estate, most notably, the Essex house, one of Manhattan’s top hotels.

But it is not just on the ground that Dubai is making their mark, they seem to be flourishing in the skies too. Emirates, a Dubai based airline that is owned by the ruling party seems to be doing pretty well at a time when other airlines are scrambling to survive.

Passengers on a recent Boeing flight might be excused for being confused on arrival. After all, they had just flown from Thursday into Wednesday and then back again, the Wall Street Journal reported.

On a test flight, Boeing’s new long-range 777, set off from Hong-Kong, headed due east across the Pacific, then across North America and finally the Atlantic before touching down at London’s Heathrow airport twenty-two hours later.

These days fewer and fewer people actually pay for their First Class seat, instead they have typically been upgraded from Business.

But who can blame them, First often costs as much as 70 percent more, and given that Business is not all that shabby, many are comfortable settling here.

A number of airlines actually no longer offer separate First and Business class section, but instead combine the two, such as Continental Airlines and Virgin Atlantic.

Delta Air Lines announced this week that it is going to charge for access to its airport clubs, which so far have been free to their top-tier members.

While the airline was actually one of the last to offer any free access and is therefore arguably only falling in line with its competitors, the move could be somewhat dangerous.

The overcapacity that continues to prevail in the American airline market is making it tough to keep, let alone boost customer numbers.

Northwest Airlines has plans to outsource some of the highly sought after flight attendant shifts on its transatlantic and other long haul flights, the Wall Street Journal reported.

The move comes as the bankruptcy protected airline is looking to cut flight attendant costs by $195 a year.

If the plan succeeds, and the company manages to use labor that is not in the Professional Flight Attendants Association union, it will certainly unburden itself from a sizable chunk of money, particularly as these routes are usually staffed by more senior and therefore expensive attendants.

On top of cabs, at bus shelters, sponsoring major sporting events and even in the gym - airline adverts seem to be mushrooming at a rapid rate in New York City.

But somehow this proliferation is rather single-colored – the adverts are all royal blue.

That's because Continental Airlines seems to be running a one-man race in advertising flight services.

Most likely they are actually one of the only few that can actually afford it, as many of their competitors are sheltering in chapter 11 protection.

A charity is urging people to black list low-cost carrier Ryanair after their refusal to transport a group of disabled passengers because of safety concerns, the BBC reported.

Carrying all nine of the blind and partially sighted group would have exceeded their quota for the number of disabled on board each flight, the airline said.

Soon seats on private jets will be bookable much as any seat on a commercial airline currently is. Executive Jet Management Inc. will soon be offering seats on two US routes the Wall Street Journal reported last week.

Apparently there is a speed appeal to this proposition, as flying on private jets is faster than traveling on commercial planes, even in first class. Presumably because you’re not delayed by the riff-raff slowly boarding the rear of the plane or your baggage winding its way from aircraft to the reclaim area.

Low-cost carriers, much as the name suggests like to keep costs down and one good way of doing so, is by using airports with cheap landing spots.
Now it’s probably no big secret that London’s Heathrow doesn’t rank among those. Instead it is the far more salubrious establishments dotted around the European countryside that provide airlines such offerings, in many cases in the form of re-opened old military airports.