AviationLover

World's Busiest Airports-Traffic Trends in 2009

2010-03-22T16:44:00.001-04:00

The traffic reports from 2009 have just begun to be finalized. Among those to be finalized, are the traffic figures for the world's ten busiest airports. Now the figures are usually pretty mundane, reflecting general trends in the aviation business. And the list reads like a Who's Who of global cities, with household names such as London, Tokyo, Paris, and Los Angeles. But I'm sure many would be surprised to know some of the other names on the list. For instance, who would have guessed that Denver, or Dallas-Fort Worth would be on the list? And, for those of us outside the US, would you have known that Atlanta is the world's busiest airport, by quite a large margin. For many of you, I doubt that. Anyway, the world's 10 busiest airports, are an indicator for the broader aviation industry. A Dow Jones of commercial airline traffic if you will.

Here is the list of the world's ten busiest airports, with traffic figures, and % change from last year.

1. Hartsfield-Jackson 87,993,451 -2.3 percent
(Atlanta)
2. London Heathrow 66,037,578 -1.5 percent

3. Beijing Capital 65,329,851 +16.8 percent

4. Chicago O’Hare 64,397,891 -8.8 percent

5. Tokyo/Haneda 61,903,656 -7.2 percent

6. Paris Charles De Gaulle 57,884,954 -4.9 percent

7. Los Angeles 56,518,605 -5.5 percent

8. Dallas/Fort Worth 56,030,457 -1.9 percent

9. Frankfurt 50,932,840 -4.7 percent

10. Denver 50,167,485 -2.1 percent

source: http://www.ajc.com/business/hartsfield-jackson-still-no-378885.html

Now these figures are a little misleading, as Tokyo has another airport (Narita), and London has 4 others (Gatwick, Stansted, Luton, and London City), but their basic function is the same. The drop in overall O&D traffic, especially leisure traffic is reflected in the relatively larger drops at Paris and London Heathrow. The depressed European premium traffic is shown through drops at London-Heathrow and Frankfurt. The major US connecting hubs, saw traffic shifts from O&D, but still posted decent traffic numbers, e.g. Atlanta, Denver, and Dallas-Fort Worth. The weak Japanese economy is evidenced by Haneda's drop in traffic. Stricter slot controls at congested US airports led to the huge drop at Chicago O'hare. And last but not least, the roaring Chinese economy gave Beijing double digit growth, and a precipitous rise to the #3 spot.

Atlanta Airport 2007- source:

ssmsa.com/61.html

As you can, traffic at major airports can be a strong indicator of economic and aviation trends. But, broader traffic statistics can give a more accurate picture, as the top 10 airports are limited geographically. Strong economic growth for developing economies in Latin America, Africa, the Middle East, and Asia, led to high growth at airports such as Dubai, Sao Paulo, Istanbul, Mumbai, Johannesburg, Addis Ababa, Jakarta, and Mumbai. While stagnation in developed nations led to large drops at airports like Amsterdam, Zurich, Madrid, Detroit, Washington DC, and Newark. As for why Atlanta's the world's number one airport, you can read about that at The Aviation Weblog, where I have just been named an editor!!!!

Travel Agency-The Cranky Concierge

2010-03-21T11:09:00.000-04:00

note: all images off Cranky Concierge site

I don't know if I mentioned this, but I have recently started work as a part- time intern for a travel agency, The Cranky Concierge. I decide to do a profile on it for the readers of this blog (few in number as you are). The Cranky Concierge is a revolutionary new travel business, started by my fellow aviation enthusiast, Brett Snyder, creator of the Cranky Flier blog. The service can be had for as low as $25, and offers the most comprehensive help in the travel industry.

What makes the Cranky Concierge different from all the other travel agencies out there?
First of all, the Cranky Concierge doesn't provide traditional travel agency service. We are not going to find you a hotel room, rental car, or group discounts for tourist attractions. What we will do, however, is provide you with peace of mind as you travel. From the start, we give you discounts for other travel sites, such as expertflyer and KVS tool which allow you to check availability and airfares. From there, we search for the lowest fare possible under your conditions, and the onboard product that best suits you. We then show you where to book, and answer any questions before you fly. On the day of travel, we send you a pre-flight email with your flight info, and follow your aircraft and weather patterns in order to find any potential delays, and research other travel options. If by any chance you are stranded, we will search for alternatives to get you home, including other modes of transport. If we can't get you out quickly, we'll find restaurants and hotels for you to help pass the time. And if something does go wrong, after your trip, we'll research what the airlines owe you, and help in drafting complaints.

How much will it cost you?
The Cranky Concierge is one of the most affordable travel services out there, with prices ranging from $25 for basic assistance, to just $100 for global assistance the day before travel!!

Testimonial
Taken off site:

Emergency in Eureka

Cranky has always been our go-to guy for advice on how to travel. Never has that been more true than when my stepfather died unexpectedly while I was out of town in Eureka, California. Obviously I was online, searching through various sites looking for a reasonable way to get out of Eureka to the east coast, and then back to Los Angeles. This was complicated by the fact that I didn't know how long I'd have to be out there. Frustrated with the lack of clarity I felt about the situation, I called Cranky. He immediately suggested that instead of booking both flights I just concentrate on getting to Washington D.C. one-way. He also pointed out that if I could fly to Baltimore, I could save $300 and arrive at the same time.

This turned out to be exactly the right thing to do. I didn't have to worry about when I was coming back, or change fees, or finding one airline that both flew out of Eureka and could get me back from D.C. to Los Angeles. When the time came to fly back I was able to book another one-way flight, and the total I spent on both flights was actually lower than the cost of the flights I'd been looking at before talking to Cranky. In addition I was able to book the return flight out of Reagan National airport, which was more convenient. That wasn't even an option in the plans I had been looking at before.

In short, Cranky knew exactly the right thing to do, and helped me make a difficult situation much easier, and saved me about a hundred dollars besides. Cranky, I owe you dinner.

Geoff C.

So visit http://crankyconcierge.com/ to get started.

Just Some Pictures @ Hong Kong Airport

2010-03-20T19:59:00.000-04:00

Dragonair A330-300

HKG Ramp

Cathay Pacific 777-200

Northwest 747-400

Eva Air 777-300

"Big Dog"

ANA to Operate Service to Denver from 2012

2010-03-20T11:42:00.000-04:00

Well, its finally official. The long rumored service between Tokyo and Denver will come in 2012, on the Boeing 787-8 aircraft. This service has been bounced around for a long time, and the city of Denver even sent a delegation to Tokyo last year(including Governor Bill Ritter) to discuss this flight and other economic ties.

found at http://www.visitingdc.com/images/denver-airport-address.jpg

People may question the validity of the flight, but given that Denver and Tokyo are both huge Star Alliance hubs, the route will probably work. The bloodbath that exists on short-haul flights at Denver is magically cleared when considering international flights. There are currently no nonstop flights between Denver and Asia. With onward connections on ANA, the route should have more than enough passengers to work. I'd estimate Denver-Asia O&D at 100-150 passengers daily each way. With connections from the US through Denver on United, the route could achieve consistent 70-90% load-factors.

There are, however a few potential pitfalls for this route. First, United and ANA do not offer System-wide upgrades, meaning that potential Premium traffic might not be fully realized. A system wide upgrade means that frequent flyers on United and ANA can reciprocally upgrade to a higher class of service on the flight. Also, Delta currently operates a seasonal route to Tokyo from its western hub in Salt Lake City. The routes could compete for the same connecting passengers from the Rocky Mountains region, but Denver is a much larger O&D market to Asia.

found at www.tokyotopia.com/flights-to-tokyo.html

Denver is an airport that consistently ranks near the top in quality for connecting passengers. It is far more convenient to connect over DEN, than it is Los Angeles or San Francisco. If United and ANA operate this route under the umbrella of a joint venture, it is sure to succeed.

The Northeast USA Shuttle- a Concept Presented by Vinay Bhaskara

2010-03-18T22:06:00.000-04:00

I mentioned earlier in my article about the new Indian regional turboprop, that a potential market for the RTA-70, was the Northeast Shuttle. I didn't really elaborate on the idea at that time, but I have now fully thought out the idea. Basically, the idea is to fly direct routes to and from secondary markets in the Northeast, eschewing traditional connecting hubs. O&;D traffic to the major business centers will be handled through secondary airports. The routes will be operated by 50-80 seat aircraft, with the hope of reducing congestion at major airports in the area (as spoken by Kate Hanni on the Cranky Flier). So, without further ado, here are the basics:

Service Area: The area bounded by Rochester to the north, Pittsburgh to the west, and Raleigh to the south.

Major Airports: bases with 20+ flights
Richmond- large O;D, close enough for southern DC suburbs
Raleigh-Durham- southern boundary of the shuttle, largest O&D airport on list
Harrisburg- Decent O&D and good location for a scissors hub
Atlantic City- Strong O&D and tourist market
Rochester- Major business city
Syracuse- College town with large population
Buffalo- fourth largest O&D airport on list, regional business hub
Manchester- minor gateway to Boston
Providence- third largest O&D airport, minor gateway to Boston
Hartford- 2nd largest O&D airport on list
Stewart International Airport- gateway to New York City
Portland Maine- north bound of the service region
Burlington- gateway to Vermont's ski country
Piedmont Triad Airport(Greensboro)- large business town
Wilmington-New Castle- gateway to Philadelphia
Manassas Regional Airport- gateway to Washington DC
Martin State Airport- gateway to Baltimore/Washington DC
Allentown-secondary airport of Philadelphia
Erie-major business center
Albany- state capital of New York
Tweed New Haven: service for New Haven/Bridgeport
Allegheny County Airport- gateway to Pittsburgh
Norfolk/Newport News- major city in VA.

Route Network/Business Model : The network calls for at least one route daily between each of the airports above, with a larger proportion of flights operating between larger O&D centers. The carrier itself would be no frills, and needs to operate outside of the current carriers in the Northeast. On flight product would be minimal, with food and drinks purchased a-la-carte. The airports mentioned above, would be asked for an initial cut in fees, to build passenger base and offer as low fares as possible. It is suggested that the airline tie itself to one or more large carriers as feed providers...

Aircraft: The preferred aircraft is a turboprop with medium speed, and short runway requirements. The initial cost range should be 10-20 million dollars. Additionally, used aircraft of Dash 8 or ATR 72 can be used supplementarily to add capacity quickly. A regional jet would require extraordinary fuel efficiency to be considered. Aircraft would need a 1000 nautical mile range at maximum payload. By my calculations, the three possible aircraft are the Dash 8-Q400, ATR 72-500, and RTA70(future). Also possible is the ARJ-21(future), and Sukhoi Superjet (future).

found at www.x-plane.org/home/coanda2k4/Dash8Q400.htm

Startup Capital: With new planes, the airline would require $80 million in startup cash+ credit line of $100 million, $50 million if starting with used aircraft.

Employees: For the airline to succeed, initial salaries would have to be low, therefore in today's depressed job market, one can get workers at depressed rates. The workers would also have to have less benefits till the airline can get on its feet.

Summary: The Northeast Shuttle is a proven market with an estimated 20 million passengers of yearly demand(excluding the large airports) between said airports. With a low cost structure, ancillary revenues, and proper advertising, the airline could hit profitability in 2-3 years of operations. It would also serve to reduce congestion at the nation's most crowded airports.

You Better Get Down to Bolivia Soon- To Fly the Last of the 727s

2010-03-17T22:44:00.000-04:00

Ah the Boeing 727, a flag-bearer of aviation. The patronly tri-jet is nearing its twilight, soon it will be night, and the 727 will cease to fly passengers world-wide. Many will lament the loss of what many consider to be the most beautiful airplane ever flown.

History: The Boeing 727 was the world's first true short haul aircraft; fully converting the last airlines using props for domestic and short international routes. Boeing developed it as a companion to the 707, and it, along with its stablemate the 737 went on to become amazing sellers. The aircraft's different components were determined by a compromise of its three initial customers. United Airlines wanted 4 engines for operations to high-altitude airports. Eastern needed three engines for over-water flights to the Caribbean (due to restrictions on twinjets). And American wanted a twinjet for efficiency. Finally, Boeing settled on 3 engines, instantly creating an iconic airliner. Other capabilities of the 727 included the ability to take-off and land on short runways, and pushing back from the gate under its own power. The plane first flew in 1963, with the extended 727-200 starting in 1967. It entered service in 1964 with United Airlines. Other airlines soon followed; the initial three, plus Northwest, Delta, and many others. the 727 proved invaluable for start-up airlines, who loved its capabilities. Many charter operators, such as Sun Country in the US, got their starts with the 727 as well. In all, 1,832 planes were built, with production ending in 1984. But the 727 still formed the base fleet of many American and European airlines. However, after 9/11, in the ensuing downturn, carriers anxious to improve costs rid themselves of the fuel-chugging 727. Delta Airlines became the last major carrier to retire the type when it did so in 2003. Many of the retired aircraft were converted to freighters, where they do business today. The accelerated retirement continued throughout, and now there are only two carriers left with the type.

Today, Syrian Arab Airlines of Syria, and Aerosur of Bolivia are the only two passenger airlines remaining with 727s in scheduled service. And, Aerosur will not be flying them for long, as the Bolivian government has passed a decree requiring all airline service to its country be served by aircraft younger than 25 years old. Unfortunately, their 727 fall above the threshold. But one can still fly the 727 on Aerosur. The 727 operates service to Miami from La Paz and Santa Cruz, and on domestic services between the three big cities of La Paz, Sucre, and Santa Cruz. With 6 aircraft, they also sub in on other destinations for Aerosur. The reason I say Aerosur is your best bet, is because Syrian Air operates with almost no regularity or conformity. And, Miami is an easy airport to access for more people than Damascus.

So be sure to head down to Bolivia today, in order to fly the last of one of aviation's queen. The Bolivian gov. may have its reasons for banning the 727, but one cannot help but feel a bit saddened at the slow death the 727 has faced. If you truly are an aviation lover (like myself), then you can fly in the back of one of FedEx's birds.

pictures from http://www.syriaair.com/AboutSAA/Fleet.aspx
http://airlineinsidersblog.com/
http://leonardo.museumofflight.org/aircraft/boeing-727-223
http://www.aerosur.com/index.php?cat=197&pla=1
http://www.gschneiderphoto.com/gallery/v/aviation/niagara/GDS_6396_copy.jpg.html

Continental Cuts Free Meals- "And then there were none"

2010-03-15T18:24:00.000-04:00

Note: I got power back
Note: Images courtesy of the Airchive

On March 15, 2010, Continental Airlines sent the following bulletin to its employees:

HOUSTON, March 15, 2010 – Continental Airlines (NYSE: CAL) will change its in-flight meal service this fall by introducing a variety of high quality, healthy food choices for purchase in economy class on many U.S./Canada and certain Latin American routes. The airline will continue to offer complimentary food in the economy cabin on all intercontinental and certain other international routes, and on long-haul domestic routes over six hours.
Continental will also continue its award-winning complimentary food in the front cabin (first class and BusinessFirst) on routes worldwide. New first-class lunch sandwiches (such as a chicken parmesan Tuscan sandwich) and updated first-class dinner pasta dishes (such as spinach & cheese cannelloni with pomodoro sauce) will debut April 1.
“We are improving our economy meal service with a high-quality, industry-leading food-for-purchase program that is consistent with the strong brand image and high service standards for which our customers recognize us,” said Jim Compton, executive vice president and chief marketing officer. “Our traditional free-food model has served us well for many years, but we need to change to reflect today’s market and customer preferences.”Menu choices and pricing are currently in development and will be announced prior to implementation. Continental will offer food and snack selections that are appropriate for the length of the flight and the time of day. Traditional non-alcoholic beverages and accompanying snacks like pretzels will continue to be complimentary on every Continental flight.

(source: http://finance.yahoo.com/news/Continental-Airlines-to-Offer-prnews-720770646.html?x=0&.v=1)

Why Continental Airlines, why??? As of yesterday, Continental was the only US-based airline to offer free food on domestic flights. The actual offering wasn't much; a sandwich or piece of meat, salad, and perhaps a cookie or brownie. But it was a reminder of days past, when aviation wasn't just about offering the lowest fare, or a-la-carte pricing. Though I am not old enough to remember that time, I have heard many nostalgic descriptions from aviation enthusiasts. And whether or not pre-Deregulation aviation was as glorious as it is described, one has to admit that it was cool to have the option. I myself have been grateful for the food option many times when flying the 4hr+ EWR-AUS shuttle for Longhorn games (Hook 'em Horns!!!).

Continental Airlines is considered to be the finest airline in the United States, and pulling the free meal isn't really going to change that. To be fair, the meals were purely added cost, probably not pulling in enough revenue to justify the expense. The average traveler doesn't care about food, just pricing; and switching to an a-la-carte method will allow Continental to drop fares, while still giving food options to those who want it. Being the only airline offering free meals may have been a quirky marketing trick, but it gave no additional gains. And overall, it is part of a bigger shift in US airline service; pay as you go. With baggage fees, curbside check in fees, exit row seat fees, and now food-for purchase, what is there to distinguish Continental from all the other US legacy carriers. As a side note, are there even such things as legacy carriers anymore? At this point, service levels are basically the same as low-cost carriers, with a few exceptions (free drinks anyone??). One, US Airways, has even become a low-cost carrier.

This announcement does not affect premium passengers at all. The premium passenger, who pays to sit up front, will enjoy expanded meal choices, and still get free meals. These passengers do care whether or not they get food on their flights. Continental will still offer meals on domestic flights longer than 6 hours; essentially Newark to the west coast, Hawaii, and Anchorage. The airline will also still offer free meals on its service to Latin America and the Caribbean, which is more than can be said for most airlines (cough... American...... cough.... United).

At the end of the day, this is probably a good move for Continental; a way to add ancillary revenue. And the majority of the American traveling public would probably prefer to have a-la-carte options on Continental. But aviation enthusiasts like myself will lament the loss of another perk on what many consider to be the last true legacy carrier in the US. Makes you wonder, what's left for them to charge for? Anyone want to pay for toilets?

Delta's New Terminal- Why It's Absolutely Necessary to Replace Terminals 2 and 3

2010-03-14T21:22:00.000-04:00

note: I am writing this from my local library, because my house has lost power till Tuesday. Funnily enough, only four houses on our street have not regained power. We all use the same energy provider, PSE&G

note: All photos not mentioned from my friend Chris Sloan at the Airchive. Some photos in previous posts from there as well.

For those of you who have been travelling from New York's JFK airport on Delta Airlines frequently, what do you think of their terminals??? To put it bluntly, the places are absolute dumps. I mean, I traveled through Terminal 3 in 2003, and it was pretty bad back then, overcrowded and dingy. One can only imagine, then how bad it has become in the 7 years since. Terminal 2 probably has not fared much better. What is the problem? Well, Terminal 3 was built in the 1960's for Pan Am's fast-expanding international operations. The terminal was noted for its distinctive flying saucer roof, and was considered an architectural landmark. For a while, it was even the world's largest passenger terminal. However, after the onset of the Airline Deregulation Act in 1978, explosive passenger growth quickly began to render the terminal obsolete. In 1991, Delta took over Terminal 3, in addition to Pan Am's transatlantic routes. After 9/11, the increases in security requirements have definitively illustrated the problems facing Terminal 3. Due to the increased security, lines often end up outside the door, and waiting areas for passengers are extremely cramped. The terminal was not designed for maximum efficiency for connecting passengers, reducing the amount of traffic that can be flowed over JFK by Delta. Terminal 3 has 18 gates (16 jetway 2 hardstand). Terminal 2, with 24 gates( 7 jetway 17 hardstand), was built in 1962 for Northeast, Northwest, and Braniff. It was taken over by Delta after the demise of Braniff and Northeast. Terminal 2 is showing its age as well.

Currently, Delta Airlines is in talks with The Port Authority of New York, about redeveloping Terminals 2 and 3 into one large mega- terminal. The airline is seeking about 1.5 billion dollars in financing, which would be the cost for the terminal. Though their first hope is the Port Authority, the capital budget constraints faced by the PA over the World Trade Center project makes them an unlikely candidate.

The second option, would be to use passenger facility charges, or PFCs to finance the project. PFCs are fees that airports collect on each plane ticket. Using PFCs to finance the terminal project would require approval from the Federal Aviation Administration (FAA). Approval for using PFCs may extend lines of credit to Delta , as bonds can be issued based on these PFCs.

Regardless of financing for the project, many might ask why a new terminal is necessary at all? In terms of passenger traffic, Delta lags behind Continental Airlines throughout the total NYC airport system, and Jetblue at JFK. In recent years, both American Airlines, and Jetblue have built spacious, modern terminals at JFK. As aviation industry expert Brett Snyder, who writes the Cranky Flier blog, put it, “It's a shame because they've done a lot to improve their on-board experience. But it is incredibly hard to win in New York when you have a miserable facility. And they know that.” (taken from the following article) And Brett is right. Delta Airlines has made great strides in their onboard product, which at this point, lags behind only Continental among US legacy carriers. And, as the world's largest airline, Delta has plenty of feed for its routes. But in a premium market like New York, terminal quality does matter. And Delta will continue to lose high-yielding business passengers unless it brings its terminal quality up to the standards of American's or Jetblue's.

At JFK airport, the terminals are operated directly by the airlines, who lease out gates to other operators. Delta Airlines is currently the operator of Terminals 2, 3, and 4. As the terminal is being rebuilt, Delta will shift some more of its flights to Terminal 4, and others will be moved to hardstand gates. A I wrote earlier, Terminal 3 is considered an architectural landmark. Unfortunately, it cannot be maintained in its current shape, unlike JetBlue's new Terminal 5, which used the TWA Flight Center's facade, while still building a modern terminal inside, all for a cost of just $850 million.

(found here)

The way terminal space is allocated currently, completely destroys JFK's viability as a connection point. There are no common gates for any of the alliances and/or codeshare partners of the American airlines. If the airport were reconfigured into 5 large terminals, instead of the current 8 smaller terminals, then JFK could become a significant connection point for the USA. Here's how it could work.

(found here)

Terminals 1, 2, and 3 could be separate in name only, with a single continuous land-side terminal and shared check-in facilities and baggage claim. This terminal could function with three concourses, each with Customs and Immigration. The terminal would house all flights for the SkyTeam Alliance, and for airlines partnered with them. Terminal 4's East concourse could be fully built out, then, the Terminal could be used for all Star Alliance international flights, and the flights of international carriers that are unaligned. Terminal 5 would remain as Jetblue's hub, with Customs and Immigration. Terminal 6 would be rebuilt and used as the terminal for United, US Airways, and unaligned domestic carriers. Terminals 7 and 8 could be linked land-side, and the concourses of Terminal 8 fully built out, yielding the terminal for American, British Airways, OneWorld Alliance airlines, and their codeshare partners. Restructuring the airport like this would achieve major efficiency gains. But the current terminal owners would have to be willing to change.

Rebuilding Terminals 2 and 3 is a necessary project, which will give Delta the fuel it needs to compete with other major airlines in NYC. But, a cathedral of aviation must be destroyed in the process. If the Worldport can somehow be preserved in the process, then its all for the best.

How Exactly Will all the Strikes and Strike Threats Affect You??

2010-03-12T21:23:00.001-05:00

Earlier today, Unite, the union representing British Airways said that it would strike on March 20th for 3 days, and on March 27th for 4 days, with the threat of further strikes after April 14th if their demands are not met. This strike has been ordered by the union because an earlier strike planned during Christmas was ruled invalid by the British High Court. I do understand, that many of you feel panicked about the strike, especially those of you who are booked on British Airways during the dates specified. However, I want to point out, that the majority of your flights will not be cancelled. British Airway has stated, that they will still operate 70% of their long-haul flights, and 60-70% of their short haul flights. Though that is still not very reassuring for BA passengers, we should evaluate the strike before making any judgement.

1) Why exactly are they striking?

The British Airways union is unhappy about pay cuts, such as a pay freeze in 2010. Of Unite's 30,000 members, about 3,000 will be switched to part-time jobs. Also, cabin crew will be reduced to 14, from 15 on long haul flights from London-Heathrow. This crew cut will affect the salaries of flight attendants as well, because they are indirectly paid by the amount of hours worked.

2) Can this strike be stopped?

Technically speaking, yes... British Airways has made its final offer to the employees, which if they accept, will end the strikes. However, I doubt the employees will. Frankly, I'm surprised that the militant leaders of Unite even allowed such an option to be considered. And while I'm sure that there will be voices of reason who cast the vote in favor of British Airways, this proposal will probably be denied. edit: I've just learned that it has been revoked by British Airways CEO Willie Walsh.

3) So where does that leave me?

Well, British Airways has leased 23 aircraft from charter operators, with crew, in order to defray the effects of the strike. They are also training other employees to be able to handle flight crew duties. If, the dates you travel on are not as important, then you can simply rebook your flight on British Airways or another carrier, with a full refund if flying from London Heathrow. For those of you flying from London City and London Gatwick, the normal rebooking rates will apply. British Airways will also be able to flow affected passengers onto flights operated by their partner airlines Iberia, Malev, and Finnair. Though it may require additional connecting time, they will get you where you need to go. And, the most time sensitive of passengers, business traffic, will not be affected by this much, as the timings they frequent should not be affected. On the minimal long-haul disturbances, most likely third or fourth daily flights into markets, passengers can be flowed onto OneWorld partners, American, Royal Jordanian, Cathay Pacific, Qantas, LAN, Japan Airlines, and Mexicana. But the bigger question is....

4) What effects will this strike have on British Airways?

In the short term, British Airways will probably lose significant revenue due to the following reasons:

1. Lost revenue from passengers booking elsewhere.
2. Cost of leasing a/c & crew
3. Training volunteer cabin crew

But the more interesting question, is what this will do to British Airways' revenues and profits in the long term. Until such time that Unite and British Airways do sign an agreement, the threat of strikes will constantly be hanging over their operations. Travelers, especially high-yielding business passenger, will be hesitant to book on BA, for fear of their flights being cancelled. Also, British Airways cannot continually lease aircraft and crew from charter companies, as it will be too costly, so BA may be forced to reduce flight schedules. But to get the full scope of the potential problems for BA, we must first look at what brought BA to the point where its flight attendants were angry enough to strike. First of all, we are in a recession, and employees everywhere, with a few exceptions, are taking pay cuts. Secondly, and perhaps more importantly; BA's costs are exponentially higher than its short-haul competitors. The advent of low cost carriers, or LCCs, in the EU has really hurt BA, by driving down fares all over the EU. In order to compete, BA was forced to lower its fares. But because of their pension obligations, and higher cost structure, the fare cuts have lead to losses. As of now, BA's position on long-haul routes is still relatively unchallenged, but if that changes, then they'll face real trouble. And as the LCC's continue to expand, unless BA can get its costs under control, their short haul operations will be decimated. And, without the valuable feed for their long haul ops, those will soon collapse as well. Something that seems as simple as these strikes, could potentially cripple an airline respected worldwide. I wonder if Unite, in all their infinite wisdom, understands, that the concessions they are asking for, could potentially destroy the jobs of 30,000 union members.

As you have read, these strikes could have far reaching consequences. So what do you think? Would you feel comfortable flying on British Airways after this?

Who Exactly Should Get the Slots to Haneda from the US

2010-03-11T23:47:00.000-05:00

First off all; sorry for the delay between my posts, but as you can see, this analysis took a crapload of research. Second, I'm proud to announce that I have gained my second follower, the first being myself of course. Thank you Hawk21M, for being the first of many more to come(...I hope). Thirdly, people, if you visit my site and like it, just be sure to leave a brief comment so I know you were here... Anyway, now to the post...

As many of you know, Tokyo's Haneda International Airport was recently opened up to international flights. There are going to be 8 total daily slots awarded from Haneda to the US, 4 on US carriers, 4 on Japanese carriers Previously, international carriers had to serve Narita Airport in the neighboring Chiba prefecture. Why is serving Haneda Airport so attractive??? Well, if you'll just take a look at this wonderful diagram created by my friend Brett at the CrankyFlier, it should be obvious.

The only problem with the proposed service is that the schedules are very poorly timed. Because International Flights are required to operate between 11pm and 7am, meaning that arrivals can work just fine, but departures to US airports result in poor timings for connections. If you take a look at Delta's flight schedule, the flights to the west coast and Honolulu arrive to late for connections to the East Coast. For example, the SEA-HND flights depart in Seattle at 7:25 pm, and arrives the next day at 10 pm, which means a full day of business is lost. The return flight is a midnight departure that arrives in Seattle at 5:10 pm, too late for transcon connections. The same is true for the proposals of all the other airlines. So without further ado, here are the basic details of applications by US airlines:

United Airlines
San Francisco-Tokyo Haneda
1x daily on Boeing 777-200ER

Continental Airlines
Newark- Tokyo Haneda
1x daily on Boeing 777-200ER
Guam-Tokyo-Haneda
1x daily on Boeing 767-400ER

Delta Airlines
Seattle- Tokyo Haneda
1x daily on Airbus A330-300 aircraft
Detroit-Tokyo Haneda
1x daily on Boeing 747-400 aircraft
Los Angeles- Tokyo Haneda
1x daily on Boeing 747-400 aircraft
Honolulu-Tokyo Haneda
1x daily on Boeing 747-400 aircraft
(Is anybody else surprised that Delta didn't apply for Atlanta here, as their motto in recent years has seemed to be, "If they aren't willing to fly through Atlanta, the we aren't willing to fly them)

American Airlines

Los Angeles- Tokyo Haneda

1x daily on Boeing 777-200ER aircraft
New York JFK- Tokyo Haneda
1x daily on Boeing 777-200ER

Hawaiian Airlines

Honolulu-Tokyo Haneda

2x daily on Boeing 767-300ER aircraft

For those of you who have been counting, that's 11 applications for 4 daily slots. Meaning that not all carriers are going to get a slot. For the sake of my replies, I would like to also note that the following routes can support a daily to Haneda, but haven't been applied for by US carriers...

Washington Dulles-Tokyo Haneda

Chicago O'hare- Tokyo Haneda

Since only two Japanese carriers have the aircraft and network to operate HND-US(Japan Airlines-JAL, and ANA) lets assume that each carrier is granted two daily slot pairs each. Now each airline is definitely going to use one daily slot pair to Los Angeles(the most important business market from Tokyo), leaving each airline with one each. At that point, I would expect one route to definitely be operated to Honolulu by ANA, leaving JAL to operate the final route. Normally, I'd say that they'd operate to Honolulu as well, but since American didn't ask for a route to Chicago O'Hare(their largest International gateway), I'm going to assume that JAL will operate this route for them, as the two airlines will soon be granted Anti-Trust Immunity, or ATI across the Pacific. ATI allows carriers to act as one airline, sharing costs, revenues, and rationalizing capacity. In additon, carriers are granted exemption from prosecution under antitrust laws to set schedules and sometimes prices for the public benefit. Continental, United, and ANA will also have ATI across the Pacific. Therefore, I will treat the application as though there are four competitors, Star Alliance, OneWorld, Delta Airlines, and Hawaiian. On that note, here is my response to each of the proposals by US airlines

United

San Francisco-Tokyo Haneda:

What's Good: United Airlines offers the only true hub on the West Coast through their operations in SFO. San Francisco is a large O&D market, with 273,636 passengers enplaned in 2009. United Airlines provides the best connectivity on the West Coast, with one- stop flights to 27 major business markets across the US. Their 777s are one of two aircrafts to offer First Class Seating to HND

What's Bad: The 777 United is proposing to operate on the route has only 252 seats, vs. the larger Delta aircrafts. Also, the aircraft have no IFE in Economy class (not something the DOT will account for, but I use it to judge), which on long trips really sucks. The aircraft also has the old interiors, which I have heard many a UA frequent flyer complain about. Also, the United brand is consistently rated very poorly among airlines, as I mentioned earlier.

Result: The route itself and connection opportunities are very strong, but the aircraft and brand are very poor. There is little chance that one of the Japanese airlines will operate this route, but it is necessary. Overall, I'd rate the proposal a 7 out of 10. I'd assume ANA chooses to operate to HNL, a huge Japanese market, over JFK, which can be served by Continental out of EWR, or SFO. So at this point, I will say that this route deserves tentative approval

Continental

Guam- Tokyo Haneda

What's Good: Japanese tourists get a convenient ride to and from Guam, Continental's bottom line improve.

What's Bad: It offers nothing to the vast majority of Americans, as Guam isn't an effective connecting point, and its O&D is skewed towards Japan .

Result: No Way in Hell. This route shouldn't even be awarded in the next round. 1 out of 10.

Newark- Tokyo Haneda

What's Good: This is a route to the second most important Japan-US business destination, and Continental has the strongest hub in the New York airport. Connections are possible up and down the Eastern seaboard, and New Jersey-Tokyo traffic can be shifted onto the route. O&D is strong, with 235,902 passengers enplaned New York-Tokyo on US carriers alone. Traffic from Latin America can be sent through EWR. Continental is a very strong brand, generally tops amongst US airlines in quality. The onboard product of their 777-200ERs is strong as well, with AVOD in all classes, and lie flat seats in Business Class.

What's Bad: I guess the only qualm, is that there's no First Class on the aircraft. But that's a very minor consideration.

Result: The New York- Tokyo Haneda market needs at least 1 daily nonstop, and Continental presents the best chance for a viable route. The O&D is huge, and connecting traffic ensures that this flight will always be full. I give this a 9 out of 10, and say that this route should definitely be awarded.

Hawaiian Airlines

Honolulu-Tokyo Haneda

What's Good: Remember what was said about Guam? Well HNL is much the same, with the exception that HNL offers slightly better connections.

Whats Bad: Guam, verbatim

Result: 2 out of 10, HNL is not a convenient connecting point for much of the US, and Hawaiian doesn't have a great aircraft, with only 18 business class seats. I've also predicted that ANA will serve HNL. SO absolutely NO at this point

American Airlines

New York JFK- Tokyo Haneda

What's Good: American has a very strong frequent flyer base in the New York Area. They have plenty of corporate contracts, with feed from major business destinations. As the dominant carrier at Miami International Airport, they can flow significant traffic MIA-JFK-HND. Dominant carrier from JFK to Sau Paulo as well, with flows GRU-JFK-NRT. American's 3 class 777s offer a very competitive First Class product.

What's Bad: American is a middle of the pack airline as far as quality goes. As I have previously mentioned, I don't like their onboard product at all, though the 777s do offer IFE. With only 243 seats, American's 777 are the smallest aircraft proposed to HND. The unions could be a potential pitfall, as AA has very poor employee relations, and the pilots have blocked routes such as Dallas-Shanghai before. AA is only the fourth largest airline in the NYC market, and though they do have feed, the flights are very poorly timed for connections.

Result: If only American were applying to fly this route, I'd approve it in a heartbeat. But, the small size of AA's operations at JFK (when viewed relative to CO at EWR), is a significant reason to pause. I'll give this route a 7 out of 10, if only because, the New York market needs two routes, and I've already predicted that neither ANA nor JAL will serve it. But, to keep the competitive balance between alliances, I'm going to say that this route should be denied in this round.

Los Angeles-Tokyo Haneda

What's Good: American Airlines is the single largest carrier at LAX, though they are by no means dominant. LAX is the second largest market from Japan to the US, and the most important business one, with 343,553 passengers enplaned on US carriers in 2009. American's First Class offering to LAX, is the only one, as Delta's 747's are 2 class only. Again, there is IFE on the aircraft.

What's Bad: The stuff I said above about the American brand and unions still applies. American's proposed flights arrive too late in LAX for significant connections American had lower loadfactors on the LAX-Japan routes than United and Delta.

Result: Since any connections are lost because of the arrival time, we must look at this route purely on O&D. And in that scenario, Delta wins; as they are the dominant carrier on this route, and have been operating it the longest (previously as Northwest Airlines). I've also predicted that JAL operates 1x HND-LAX, making AA's proposal redundant. The proposal nets 7.5 out of 10, but should be denied

Delta Airlines

Detroit- Tokyo Haneda

What's Good: Detroit is the only major connecting hub for which service has been applied for by US airlines. Due to its location, Detroit is convenient for flowing traffic to Tokyo from the Midwest, Northeast, Mid-Atlantic, and Southeast. The arrivals to Detroit are timed such, that connections can be offered to the entire Delta domestic network. Detroit has significant business ties to Japan, due to the auto industry. Detroit is also a strong O&D market to Tokyo, with 260,537 passengers enplaned in 2009. Delta's 747-400, is the largest aircraft on any single service, with 403 seats. The aircraft will feature lie-flat seats in business class. As the largest airline in the world, Delta will be able to flow significant traffic through DTW.

What's Bad: Detroit's economy is currently in the doldrums. Delta as well is a middling brand. Detroit is not as large a market as some of the other applications.

Result: This service provides perhaps the greatest access to Haneda for the majority of the American public. Detroit could potentially be the only US-HND service not to the west coast or New York. This application warrants a 9.5 out of 10, and should definitely be granted.

Honolulu-Tokyo Haneda

What's Good: Not much, as I covered earlier with Hawaiian Airlines, though HNL is the largest O&D airport to Japan. Delta also, is the largest carrier from HNL to Japan.

What's Bad: Again, I've already covered this, and Delta is smaller out of HND than Hawaiian

Result: 1 out of 10. If this application is awarded, then the DOT should not be a part of the government.

Seattle- Tokyo Haneda

What's Good: Seattle is a strong O&D market to Tokyo, with 193,211 passengers enplaned on US airlines in 2009. Combined with Alaska Airlines, whom Delta interlines with, there is significant feed to Seattle from all over the west coast. Seattle is a more convenient airport to transit through than LAX or SFO. Delta's A330-300 is also larger than the other applications' aircraft with 298 seats. Delta's A330 has AVOD as well.

What's Bad: Again, Delta is a middling brand, and the A330 doesn't have a great business class cabin either. Seattle is a smaller market than any other application.

Result: I give this application a 4 out of 10, and say that it doesn't warrant a grant in this round.

Los Angeles- Tokyo Haneda

What's Good: I went over a lot of this with my response to American's application, so I'll just make a couple of points. One, Delta is the largest carrier from LAX to Japan. Two, Delta is offering the largest aircraft to and from Los Angeles, with their 747-400.

What's Bad: Delta is a smallish airline at LAX, and they have very little feed (from Alaska Airlines). Also, there will most probably be a lot of competition from Japanese Airlines.

Result: This proposal results a 7.5 out of 10, but in order to keep the competitive balance, SkyTeam needs two frequencies to HND, therefore, this should be the fourth and final route awarded.

OK, to summarize, of the 8 Haneda-US frequencies, 4 will go to Japanese Airlines, which I have predicted will be used as:

2x LAX (ANA, and JAL)
1x ORD (JAL)
1x HNL (ANA)

The four US frequencies I say should be used on:

Los Angeles- Tokyo Haneda
Delta Airlines
1x daily Boeing 747-400

Detroit- Tokyo Haneda
Delta Airlines
1x daily Boeing 747-400

Newark- Tokyo Haneda
Continental Airlines
1x daily Boeing 777-200ER

New York-JFK- Tokyo Haneda
American Airlines
1x daily Boeing 777-200ER

Now, I want to hear what you guys think? Be sure to post your comments

Airport of the Month 1- Bangkok Suvarnabhumi Airport

2010-03-09T16:05:00.000-05:00

Similar to my livery of the month, I am starting a post called Airport of the Month. This month, I'm featuring Bangkok's Suvarnabhumi Airport. Suvarnabhumi Airport opened in 2006 to replace Bangkok's old airport, Don Mueang. The airport handles close to 40 million passengers a year, and is the home base for Thai Airways International, Bangkok Airways, Orient Thai Airlines, PBair and Thai AirAsia. Bangkok is a thriving metropolis of more than 10 million people, and is a major worldwide business hub. Suvarnabhumi serves as the gateway to Thailand, in addition to being a major connecting point for Southeast Asia, and the Kangaroo route. Here's just a few facts about the airport:

2 parallel runways (60 m. wide, 4,000 m. and 3700 m. long)
2 parallel taxiways
120 parking bays (51 contact, 69 remote)
5 A380 ready gates
130 passport control checkpoints for arrivals, 72 for departures.
26 customs control checkpoints for arrivals, 8 for departures.
22 baggage conveyor belts.
360 check-in counters. There are 100 additional counters for passengers without luggage.
107 moving walkways.
102 elevators.
83 escalators.
76 flight operations per hour
45 million passenger capacity
3 million tonnes of freight capacity

Why was BKK chosen?
Bangkok Suvarnabhumi is one of the airports I've been dying to visit since it opened in 2006. (Does anyone want to give me a good deal to fly through BKK?? Perhaps TH to India, hint hint...) In my opinion, it is among the world's most beautiful airports. The luxury and vividness, I feel, is unmatched by any other world airport. Though the airport can get very crowded at times, its large airy concourse is still quite enjoyable.

What's Going on at BKK??

The people at BKK are very smart. They recently signed an agreement with the 10 largest passenger airlines at BKK that entitles them to landing-fee rebates for carrying more international passengers. The scheme offers discounts of up to 30% to airlines that increase passenger volume through Bangkok's gateway airport. The rebates are based on a complex formula that compares a carrier's passenger volume this year with 2009. I think this is a brilliant plan, because by increasing passenger traffic, they should be able to gain more taxes per passenger. In addition, more passengers means that more money will be spent at airport businesses, giving the airport more ancillary revenue. The increased revenue from those streams makes the agreement a net gain for the airport and the airlines. Truly a win-win situation...

It was also recently announced, that Istanbul-based Turkish Airlines has plans to make BKK into its regional hub. Turkish, a member of the Star Alliance along with Thai Airways International, is the Middle East's third largest airline. They already have plans to introduce flights to Ho Chi Minh City, Kuala Lampur, Manila, Sydney, and Auckland from BKK, in lieu of operating direct flights themselves. From a business point of view, this makes sense, as Turkish may not have enough O&D from Istanbul to operate the routes, but can via Bangkok, and Thai will gain added revenue, and additional feed into their network on the second daily Istanbul-Bangkok route. It also should not cause too much of a disruption, as Turkish already sends almost 50,000 passengers a week on interlines through Bangkok, with a good proportion to Australia/New Zealand. But what does it do for the consumer? In reality, not much. While passengers will now have more options when travelling to and from Istanbul, at the end of the day, those passengers can be routed on THAI flights just as easily. And because both airlines engage in the legal form of collusion known as codesharing, its not as if prices are suddenly going to magically drop. So as a whole, we the people don't really gain much. Still, it is a cool bit of news... Enjoy some more pics of BKK!!!

Jet Blue's $10 fares... I'm loving it.

2010-03-09T14:30:00.001-05:00

JetBlue Airways recently ran a promotion for $10 fares from JFK airport, to the 10 destinations they initially served from there. The fares were $10 each way, excluding taxes, from JFK to FLL, MCO, TPA, PBI, RSW, BUF, ROC, OAK, BTV, and SLC. Notice how 5 of those airports are in Florida? Well I'll come to that later. First of all, the tickets had to be purchased before 11:59 pm EST on Monday March 8th for travel on Tuesday or Wednesday, March 9th and 10th. I personally love the idea. By selling tickets at a loss for just one day, they will recoup it ten times over with the good press. The sale also coincides with Jetblue's reputation as an airline that offers great bargains, and cares about its customers. Therein, I'd like to point out why it doesn't hurt them economically as well.

First of all, the sale only runs for one day, and only affects two days worth of flights anyway. Secondly, it is only the empty seats that are sold at this price, as pre-booked passengers would have already payed the full fare. Thirdly, and perhaps most importantly, these are high-frequency markets with low fares. Remember how I pointed out that 5 of the airports were in Florida. Well, lets just consider those 5 routes for a moment. The 5 airports named in Florida (FLL, MCO, TPA, PBI, RSW) are all characterized by the following characteristics:

Robust Demand: Each airport handles more than 840 passengers, one-way daily, with 4 (FLL,MCO,TPA,PBI) having over a thousand, and 2(FLL,MCO) having over 2000. In fact, FLL and MCO are the 5th, and 3rd busiest destinations out of JFK respectively.

Depressed Fares: The average one-way fare in these markets is no greater than 164.25(RSW) on any segment. And remember, this includes fares offered by full service airlines. So for the sake of this argument

lets define the average fare between JFK and Florida on JetBlue at $120 each way. This means that they are selling each ticket at 8.3% of its value. But as long as the airline is only selling seats at that cost, after its flights have some pax on board, then it should not result in too large a dip in profitability.

High Frequency: JetBlue operates a large number of flights to and from Florida. Just for an example, Jetblue offers 9 daily flights between JFK and Orlando daily, all on Airbus A320 aircraft. That's 1350 seats daily!! And if only 100-150 seats are sold at $10, the drop in profitability will be unnoticeable.

JetBlue is planning to offer special offers such as this all throughout the upcoming year, as they celebrate one decade of service from JFK. Keep tuned, and take full advantage of the deals. If they all make as much economic and intrinsic sense as this one, JetBlue's promos can do nothing but add to the brand.

Airline Livery of the Month-1

2010-03-09T13:29:00.000-05:00

Ok, so welcome to the 1st Airline Livery of the Month. This month, we're going to take a look at Cathay Pacific's, the Spirit of Hong Kong. This livery was first unveiled in 2000. The special livery depicts a young athlete overcoming a series of challenges to reach his goal. A special wording, "Same Team. Same Dream. " was painted on the left side of the aircraft and a traditional Chinese wording "積極進取飛越更高理想" was painted on the right side of the aircraft. Personally it is one of my favorite airline liveries ever, what do you think??

India's New 70 Seat Turboprop Could Find a Niche in an Already Crowded Market

2010-03-09T11:07:00.000-05:00

On March 8, 2010, Hindustan Aeronautics Limited (HAL), and a consortium of Indian company announced that they would begin developing a 70 seat regional turboprop that has been dubbed the RTA-70. Now the RTA-70 has entered itself into a very crowded market, which already has two strong players in the ATR 72, and the Bombardier Dash 8-Q400; aircraft that have combined for over 1400 sales (for the purposes of this post, we'll consider the turboprop and regional jet markets as separate entities). The main purpose of large turboprops like the RTA-70 is to provide medium frequencies over short to medium distances, and to provide capacity boosts in markets that cannot handle additional mainline frequencies. Horizon Air in the United States uses their Dash 8s for the former, and Kingfisher Airlines of India is very creative in adding capacity with its ATR 72s. This niche is especially apparent in markets such as India, Japan, and Europe. In order to prove my point, I want to break this down for you by answering a few questions about the aircraft.

1) Who is Building the Plane?

The aircraft is going to be built by a consortium of companies including HAL, National Aeronautics Lab (India), and some private contractors. The consortium will be lead by the retired chairman of the Indian Space Research Organization (ISRO). The ISRO has an excellent track record, and is known for its relative lack of bureaucratic red tape.

2) When Exactly Can We Fly This Thing?

No one knows for sure when the aircraft will come out, but India hopes to roll out a test version by 2014 or so. Assuming everything goes according to plan, the best case scenario is that commercial service begins in 2015. That's assuming that nothing goes wrong....

3) Will the Plane Actually Fly?

Your guess is as good as mine in this category. India has already built one turboprop transport aircraft, the NAL Saras, though that is mostly a military aircraft. In that sense, the Saras program has been an abject failure, as it took almost 13 years to come into production (1991-2004). The problems with the project cannot all be blamed on NAL, who lost support from the Russians soon after the project started, and later ground to a halt, due to economic sanctions for India's nuclear tests in 1998. And, the aircraft has good capabilities as well; similar to those of the RTA. With a research cost of only 30 million dollars, the Saras program is extraordinarily cheap, and if similar costs are achieved on the RTA, then only 50 or so sales would be needed to break even. No one doubts that HAL and NAL have the technological know-how to build this plane, as HAL has already proven with the Dhruv, one of the world's finest transport helicopters. But India's bureaucratic nature is a significant pitfall.

4) What Sets This Plane Apart From All the Other Ones?

As a new design, the RTA-70 has the advantage of flexibility over the Dash 8 Q400 and ATR 72-500 which are basically updates to a 20+ years old design. By using composite materials, they will be able to reduce the aircraft's weight significantly, leading to gains in fuel efficiency. HAL and co. are aiming for a 25% gain in fuel economy over current turboprops. They also claim that better parts and sophisticated flying systems will lead to a 25% reduction in Operating Costs, and 50% reduction in maintenance. I for one don't believe those numbers, but even a 10% reduction in all those costs will make the plane useful. The RTA-70 is planned to be the first turboprop to employ Fly-by the Wire control systems, allowing airlines to operate more efficiently. It will also include a significant MTOW (Maximum Take Off Weight) increase, allowing more lucrative cargo to be carried in its belly. And with an eye to the Asian Market, they have given the aircraft the ability to take off on runways as short as 2950 ft, or 900 m, when fully loaded. By comparison the Dash 8 requires 1400 m, and the ATR 72, 1200 m. This will allow the RTA 70 to operate in a larger group of airports than the other two. The aircraft is said to
have a range of 2000 km, between the ATR and Dash 8, with a crusing speed of 300 knots, close to the Dash 8's, and faster than the ATR 72. With its better cost structure, this aircraft could dominate the future of the 70 seat turboprop.

5) Who's Going to Buy It

Ok, lets assume for a second that it is now 2014, and the aircraft has lived up to its specification claims, and proven its effectiveness on routes it is designed to handle. That being said, who will buy this aircraft. Well first off, there's the obvious; India. The RTA 70 is perfect for India, with its relatively backwards air infrastructure, and fast -growing markets. I have created a chart to illustrate where the RTA 70 could derive its sales.

Tier 1 Markets- Markets that have proven Demand on Sectors that currently operate with similar aircraft.

India (100-600 frames)- The obvious one. India is the market the RTA 70 is designed for. Many Airlines use turboprops extensively- replacing all turboprops
Intra Caribbean (50-100 frames)- The RTA 70 can be used to perform island-hopper operations, especially because of its short runway requirement. In addition, O&D demand Intra-Caribbean will need 70 seat airplanes in order to reach full potential.
Southeast Asia (100-150 frames)- RTA 70 can be used in high density configuration to vacation destinations, and on smaller domestic routes as ATR 72 is current used.
Africa Domestic(80-120 frames)- RTA 70 can be used to replace older ATR 72/Dash 8, and upgauge capacity on current routes.
Australia (150-200 frames)- turboprops used significantly in Australian domestic market

Tier 1 Airlines- Airlines with significant ops in the markets specified above:

NACIL
Jet Airways
Kingfisher
SpicJet
Paramount Airways
IndiGo
BWIA
Caribbean Airlines
American Eagle
Bangkok Airways
Druk Air
Lion AIr
Garuda Indonesia
Malaysia Airlines
Air Asia
Thai Airways International
Most African Airlines
Qantas Group
Virgin Group
Regional Express
Air New Zealand
Air Fiji
Air Vanatau

Tier 2- Markets with proven demand, but not much capacity in turboprops yet.

Japan (30-100 frames)- short distances, + good O&D means RTA 70 could find niche in certain markets
Eastern China (30-50 frames)- airports are closely spaced on China's East Coast, the RTA 70 could be used to explore smaller markets
China (100-500 frames)- on a broader scale, can be used to provide cheap service to all varieties of Chinese airports
Eastern Europe(100 frames)- mainline transporter among smaller Eastern European airlines
Scandinavia (50 frames)- replacement for turbos operated by SAS group etc.
Europe Regional (50-600 frames)- replacement for turbos operated by regional airlines, and upgauge over previous turboprops..

Tier 2 Airlines:

JAL group
ANA group
Air Hokkaido
China Eastern
China Southern
Air China
Hainan Airlines
Shenzhen Airlines
Chinese startups
Aeroflot
S7 Airlines
Roissya
Russian airlines
Aerosvit+ Ukraine Air International
Belavia
JAT
Aegan Airlines
Tarom
Montenegro Airlines
Croatia Airlines
Malev
CSA
Air Italy
Olympic Air
Turkish Airlines
SAS Group
Air France- KLM group
British Airways Group
Lufthansa Group
Iberia Group
European Regionals/Startups

Tier 3 Markets: Places with minimal demand, but future growth, and or ideas not implemented yet

Northeast USA shuttle (50-100 frames): This is an idea of mine that I will discuss in a later post, but essentially it is transporting pax between secondary Northeast markets, similar to the shuttles operated between Philly, DC, New York and Boston. The RTA 70 would be a right-sized aircraft for this operation
Midwest USA shuttle(35-75 frames): Same as above, except in the Midwest USA.
Mexican Domestic (50-100 frames): would require more point to point flying, but can see it working from places like Tijuana, Guadalajara, and Monterrey
USA-Mexico (75 frames): Would provide significant efficiency upgrade over current routes operated by regional jets out of IAH, DFW, PHX, etc. Would also allow for direct service to such markets as Austin, San Antonio, El Paso, Albuquerque, Reno, etc.
Central America (25-70 frames): Could work for TACA and Copa Airlines on routes to secondary destinations
South America (50-300 frames): Could be used in high frequency domestic markets such as Colombia and Brazil from secondary hubs such as Porto Allegre and Cali.
Turkey Domestic(25-50 frames): Large number of airports and medium distances allow RTA 70 to be a frequency booster.
Middle East shuttle(50-100 frames): Also an idea that I've developed, similar to Northeast and Midwest US shuttles, but international as well
Domestic Routes in Korea/Taiwan/Philippines (50-100 frames): domestic capacity and efficiency booster

Based on the above information, I have pegged the market at anywhere from 1250 frames, to 5000+. If the RTA 70 can capture 25% of the market or more, it should be fantastically profitable.

Tier 3 Airlines:
Startups
US regional airlines
Aeromexico Group
Mexicana Group
Aero California
Viva Aerobus
Azul
GOL
TAM
Mid East startups
Avianca
Aires
LAN
Turkish Airlines
Fly Dubai
Korean Air
Asiana
Air Philippines
Air Asia
China Airlines
Eva Air
Asian startups

5) What Can Stop the Plane's Eminent World Domination?

Ideally; nothing could. However, earlier I mentioned that India has problems with bureaucratic regulations and the like. And its true. India does have many problems with its civil servants. They can often hinder and slow a program down so much, that it can be doomed to failure. Also, the Indian Law is fraught with archaic rules from a past era. These rules do not encourage risk taking, and gov. employees are loath to take chances because they don't want to be liable for the problems.

My grandfather, who worked with the India Bureau of Mines estimated that only 30% of funds are actually used for research, development, and production, with the remaining 70% going to salaries, waste, and bribes. He even told me the following story to illustrate my point. An Indian businessman who owned a lead mine in Indonesia had the mining laboratory of India perform tests on the metal for him. He also wanted to build a lead production plant in Indonesia as well. However, when he asked the people at the lab, who he had hired as consultants to help him plan the factory, they refused on grounds that if something went wrong at the plant, they would be held liable. The business man, in his frustration, ended up buying $2.5 million worth of machinery. But he had no plan to use it, and didn't know how to set it up. So he went back to the lab and asked for their help in connecting the machinery. They once again refused him. In the end, the man was sent to my grandfather, who helped him set up the plant. But in the process, more than a million dollars was wasted, all because the gov. employees didn't want to take responsibility.

I tell this story to illustrate the pitfalls involved in working through the Indian Government. If the RTA 70 runs into some of the same problems as the businessman did, then its cost structure will spin out of control rapidly. A strict oversight committee will be necessary to keep the project in line.

The other thing that could hold the RTA 70 back, is India's marketing capability, or lack thereof. Earlier, I mentioned the Dhruv helicopter, and how it was comparable with western-developed helicopters. The problem is, that India has not marketed it actively, with only a token presence at most airshows. As a result, the orders are limited to mostly Asia and the Middle East. If the RTA 70 program is to succeed, they need to market it heavily to world airlines, show up at all the major airshows, and basically get the word out about its superior capabilities.

Conclusion: The RTA 70 is an aircraft that is far superior to present day turboprops. Its introduction could seriously change the world's short-haul aircraft market. The market for the aircraft itself is large and growing, with great future potential. But the RTA 70 is going to have to fight India's bureaucracy and be marketed effectively to world airlines, if the program is to be considered a success...

New American Service from AUS to JFK is bound to fail

2010-03-08T22:57:00.000-05:00

On September 17,2009 American Airlines(AMR) announced that it was going to begin once-daily nonstop service from New York's John F. Kennedy International Airport to Austin Bergstrom International Airport on a McDonnell Douglas MD-80. New York is the nation's largest business market, and Austin is a tech hub that was recently named the city to best withstand the recession by Yahoo(YHOO). Seems like a smart move right??? Upon further inspection, I don't see how this route will stay afloat short of a subsidy. JetBlue Airways currently offers 3 daily nonstops on their Airbus A320 air

In order to prove my point, I will analyze the route based on 3 different characteristics, Aircraft, Market, and Company/Service.

Aircraft:

In this category, there is no debate, Jetblue's A320 wins with its hands tied behind its back. American's MD-80, or Super 80 as they have dubbed it(S80), is the workhorse of their fleet. The S80 seats 140 passengers, with 16 First Class seats, and 124 Economy Class seats in 3-3 configuration. There is no Inflight Entertainment(IFE), or Wifi either. Jetblue's A320 meanwhile, seats 150 passengers in all economy class. The aircraft are in 3-3 configuration, but generally have one to two inches of pitch. All aircraft come equipped with state of the art DIRECTV(DTV) Inflight entertainment systems.

Being previously based in Austin, and also a former AA frequent flyer, I have flown on the S80s many times. As a whole, the Economy product is unappealing and worn down. The seats are slightly constrained, meaning that anyone with wide shoulders such as myself has a tough time fitting in one seat. The seat pitch is decent, but because of how close together the rows are spaced, even the slightest lean backwards will destroy the foot space of the passenger behind you. The lack of an IFE is particularly acute on long sectors such as JFK-AUS (3:30 min. of flight time), and the lack of WiFi compounds the problem.

I have not personally flown Jetblue's A320 but have heard many great things about it. The seats have on average 1-2 more inches of pitch than AA's and with rows that are spaced properly, one can use it to full benefit. The IFE offers plenty of options ,and is particularly useful for keeping children busy. Electronic Babysitter anyone?? They also have begun to roll out WiFi on some of their A320s. Overall, the A320 is a much fresher and nicer product than AA's S80.

Market:

The market between Austin and JFK is large, almost 750 passengers flew between the two airports every day in the third quarter of 2009, according to the US Department of Transportation, (DOT). And since I consider JFK, EWR, and LGA as one market, (New York), lets take a look at the data presented for all three combined. In Q3 2009, the 3 airports saw approximately 1660 passengers to Austin daily. When we look at traffic, for just one-way, the number is approx. 830 passengers. Now 830 passengers is very large, large enough to be the third largest market out of Austin after Dallas, and the Los Angeles Area. However, the problem is, that there are a bevy of competing services. Jet Blue currently offers 3 daily to JFK on A320s. Which is a total of 450 seats. Then, Continental Airlines(CAL) offers 3 dailies to Newark as well, on 737 aircraft comparable to Jetblue's A320s. Adding 342 more seats to the equation. This means that more than 95%, or 792 seats of 830, can be accounted for with present traffic. If you throw in connecting traffic, one can assume a market of approximately up to 950 seats. Some of this is covered by passengers connecting via other airports such as Atlanta on Delta, or Chicago O'hare on United. Therefore, American could probably fill anywhere from 100-120 seats, for loadfactors of 70-85%, as a best-case scenario. Also, by entering the market, American will be driving down their own yields. The average fare paid one way was $233 according to the DOT, with an average yield of 15 cents per passenger. Throwing new capacity into the market can only serve to dilute the yields further.

The one thing American does have in its favor is the First Class cabin it offers, and its large frequent flyer base in Central Texas. As the only airline offering premium seats between Austin and JFK, American should be able to fill its premium cabin. And a full premium cabin means that they don't need that many more economy passengers to break even, I'd say about 75 if all the premium passengers are paying full fare. The other thing going for AA is the fact that it has a sizable frequent flyer base in Central Texas. American was the second largest carrier by passengers carried, first among full-service airlines, with 21.5% of the overall market, ahead of 11.3% for Continental, and 5.5% for Jetblue. Many passengers in Austin prefer to make easy connections in Dallas-Fort Worth Airport, and use AA's hourly shuttle. At one time AUS was even a mini-focus city for AA, with service to ORD, STL, DFW and DAL, SNA, SJC, SEA, RDU, LGA, and LAX. Today, all that remains is DFW, ORD, and LAX. AA also has a sizable contract with the largest local employer, Dell Computers(DELL). If AA is able to tap into its frequent flyers and stops connecting pax to JFK over ORD, and DFW, they could make the service work.

However, overall, the New York-Austin market, though large, is already suffering from overcapacity. American is in a vulnerable position, and if premium demand tanks, then the route cannot be profitable for AA. Also, as the newest entrant to the market, American has a reduced brand loyalty when compared to its competitiors.

Company/Service:

American is a company that consistently finishes at the bottom of customer satisfaction rankings. From my personal experience, American ground staff is quite genial and professional. However, its flight attendants are notoriously poor, despite being paid higher wages to work fewer hours than their peers, though there are exceptions to this rule. The FA's are usually cranky, unsmiling, and unhappy with their work. They have rarely ever stopped to speak with me, and when I ask them questions about their job, the response is a monosyllabic answer. The on board product is quite cheap, with passengers paying $8 for a blanket, and food costing money money as well. In addition, the baggage fees are high, though in line with those at other legacies. At JFK in general, they operate from the nicest terminal in the airport. Terminal 8's two concourses are bright and airy, though short on eating options. Their operation at JFK as a whole is huge, but with early afternoon arrival at JFK, the flight isn't timed correctly to connect to the major evening bank of flights. In comparison, Continental connects pax far more efficiently through EWR.

Verdict:

The market is there for AA. However, because of its reliance on premium demand, the route is very tenuous at best.