2012 was a difficult year for Chicago-based full service carrier United Airlines, who reported a 2012 full year net profit of US$589 million excluding special charges of US$1.3 billion. For the last quarter of 2012, United lost US$190 million excluding US$430 million in special charges as the airline grappled with the effects of “Superstorm Sandy” and lingering customer unease over the carrier’s operational issues throughout the course of 2012. The …Read More
Change in SkyMiles reflects Delta Air Lines’ focus on profitability
Late last week, Atlanta-based Delta Air Lines announced a change to its SkyMiles frequent flyer programme (FFP) in which members will now have to meet minimum revenue requirements in addition to minimum distance requirements in order to reach an individual tier for so-called “elite status” in the SkyMiles programme. These various tiers of elite status offer progressively increasing benefit levels, including such perks as free checked bags, extra earnings of …Read More
Delta Air Lines deal brings unequal benefits to partners
When Atlanta-based Delta Air Lines announced a partnership with London-based Virgin Atlantic on 11th December last year, it marked an important shift in the transatlantic market dynamics. The deal for 49% of Virgin Atlantic that had been previously owned by Singapore Airlines, purchased in 2000 for £600 million (US$965 million), worth US$360 million, will expand connection opportunities for Virgin frequent flyers in the United States through Delta’s hubs, and on …Read More
Optimism returns to aviation
There is renewed optimism for the airline industry, going by the latest industry body Geneva-based International Air Transport Association (IATA) forecast that 2013 will see an improvement in global airline profitability from US$6.7 billion to US$8.4 billion. This has been revised from an earlier estimate of US$7.5 billion. IATA chief economist Brian Pearce said: “I think we are past the low point, which was earlier this year.” The positive mood …Read More
Delta’s interest in Virgin Atlantic starts a British war
The interest of the world’s second-largest carrier, Delta Air Lines in Virgin Atlantic has certainly caused some excitement in the aviation scene, if not started a British war between old rivals International Airlines Group (IAG) chief executive Willie Walsh and Virgin Group chief executive Richard Branson. The following looks at what the deal means to each of the key players, including those on the sideline. Singapore Airlines Delta has reached …Read More
Southwest Airlines faces challenges in AirTran integration
When Southwest Airlines reported its traffic results for December earlier this month, the results once again reflected a recurrent paradox in the US airline industry. Southwest Airlines, which was once the industry’s low-fare leader, recorded unit revenue gains of 7%-8%, its 15th straight month with a unit revenue increase of more than 5%. The carrier achieved these revenue gains despite a 1.8% higher capacity and a 0.3% drop in traffic as …Read More
US air travellers face higher airfares in 2012
Starting from January 26th, US air travel consumers will notice advertised fares for domestic travel appreciating significantly, as new rules mandated by the United States Department of Transportation (DOT) take effect. When the DOT announced a set of new “consumer protection” rules earlier this year, airlines predictably voiced their fierce opposition, especially to the new policy on taxes. Airlines will now be required to advertise fares with all government taxes …Read More
High operating cost, low productivity key factors behind American’s bankruptcy
In filing a Chapter 11 bankruptcy, Dallas, Fort Worth-based AMR Corporation, parent of US’s third-largest carrier American Airlines (AA) and its regional subsidiary American Eagle joined its peers in which every major US network carrier has gone through the bankruptcy process at least once in the past two decades in a drive to become competitive and solidly profitable by slashing costs and restructuring debt. As the US majors emerged from …Read More