Monthly Archives: May 2005

Secret CIA Airline?

The NY Times has a long but interesting article about a company called Aero Contractors, which essentially acts as a secret airline for the CIA.  Need a terror suspect shuttled off to Libya?  These guys can do it.  Need to move Saddam Hussein somewhere?  Sure, they can handle that.  I won’t bore you with the details, but the reporters have uncovered a web of shell companies that all seem to point to Aero Contractors providing flights whenever the US government needs to do something sketchy.  It’s a good read on your first day back in the office after the long weekend…

Air Zimbabwe Knocked for 1 Passenger Flight

Zimbabwe’s government (which it’s best not to take seriously) has actually made a legitimate complaint, noting that a recent Air Zimbabwe flight from Dubai to Harare departed with 1 passenger.  My wife and I flew Air Zimbabwe a few years back and the 737 had 6 people on it, so this doesn’t particularly surprise me.  What does surprise me is that I’m actually agreeing with someone in Zimbabwe’s government, which has complained about the airline’s management.  On the positive side, the flight TO Dubai had 49 passengers.

Bye Bye Northwest Pretzels

Oh Pretzels, We Hardly Knew Ye…

As a cost-cutting measure, Northwest Airlines is eliminating pretzels on domestic flights.  Shame—they had good pretzels.

Song Records & American Airlines Hates Love

I know I said I wouldn’t post before I left, but there were 2 good stories today:

1) Song Airlines is launching a record label.  So ridiculous that I love it.  Actually, I think it’s a great idea.  Seems like little risk for them, and adds a nice brand association.  Well done.

2) Not so well done is American Airlines’ ridiculous (or pathologically ridiculous) press release denouncing a House of Representatives bill that would repeal the Wright Amendment and allow full access rights to flights from Dallas’ Love Field (ie, Southwest’s home in Dallas):

"This is a double-whammy for North Texas.  If Southwest gets their way
again, both the economy and the environment will surely suffer.  First,
repealing the Wright Amendment will be a setback to the region’s growth.
Second, the inevitable and dramatic rise in air traffic at Love Field will
harm the environment in the neighborhoods around the airport.  Make no
mistake, the number of flights from Love Field will increase to levels never
planned.

"This push by Southwest reflects the understandably selfish intentions of
a company that today is roaming the halls of Congress seeking special favors.
If Southwest were sincere about growing and competing, they would be flying
from DFW Airport — and they wouldn’t need an act of Congress.  We’re
confident the community will not let Southwest risk the quality of life for
North Texans just to preserve and expand their monopoly at Love Field."

Frankly, it’s so stupid that it’s not worth commenting on.  OK, one part is worth commenting on…the line about how if Southwest were sincere about competition it wouldn’t need an act of Congress.  Hasn’t American benefitted from the Wright Amendment (an act of Congress) for 30 years?  Am I crazy?

Ryanair’s $2 Flights

I was just thinking how odd it was that there’s really been nothing interesting in the way of news this week.  It seems to me that editors must be bored after the America West merger coverage and decided that there’s nothing to say about airlines this week.  Or not.  Maybe it’s just because of the holiday. 

Doesn’t really matter, does it?

If you’re in London (or traveling to London, which you can still do pretty cheaply if you buy tickets at 1800flyeurope.com), Ryanair has $2 tickets (GBP .99) for sale for flights to a good chunk of Europe.  Taxes and credit card fees bring those prices up about tenfold.

And in some site news, I’m off to El Salvador for the long weekend, so there won’t be any posts until next Tuesday.  Not that there’s been anything to miss…Have a great holiday weekend.

All-Business-Class Airline to Launch London-New York?

A former British Airways executive is hoping to launch Fly First, an all-business-class airline flying 757s from London’s Luton airport to Newark.  The aircraft will be configured to hold 48 passengers, instead of the 200+ in a coach layout, and feature lie-flat seats (not surprisingly, as this is the same executive who brought lie-flat seats to British Airways).  Fares are about $6100 round trip, which is about on-par with regular business class, and include limo service to the airport.  The one catch:  they need to raise $45 million by June 10th.  If you send your checks to me, I promise to pass them on.

JetBlue Launches Service to Burbank

For every traveler who has griped about the misery that is LAX, today brings a bit of good news (at least if you live in New York):  JetBlue is launching nonstop service to Burbank.  Burbank is to LAX as Westchester Airport (HPN) is to JFK—a delightful alternative (OK, I admit, it was a slow news day here at OTR headquarters).  Seriously, though, Burbank is about a billion times more pleasant than LAX, as anyone who has flown into it can attest.

In other JetBlue news, there was a ridiculous article in the NY Times over the weekend that asked "Is Passngers’ Romance with JetBlue Cooling?"  The answer it turns out is, "not really."  This will be the first of many of these types of articles, so feel free to ignore them.  Load factors are near an alltime high for the airline, and their product is still better than everyone else’s (except Song, perhaps). 

Frequent Flyer Sale to Belfast and Bristol

Continental has a short-lived but great frequent flyer sale to Belfast, Northern Ireland, and Bristol, England.  For only 25,000 miles, you can get a flight to either of those cities through June 15th—that’s half the normal number of miles required, and an absolutely amazing bargain, especially if you’re flying from the west coast.

Lighters Permitted Onboard

You may remember that the US government banned lighters from flights because they were deemed a security threat.  Well, they’ve changed their mind.  And you’ll be happy to know that they changed their mind because the Zippo lighter corporation called them and told them that their sales would drop.  And then the Zippo corporation called Rick Santorum, their pro-family-values senator, who lobbied on their behalf.  Then the law got changed.  So, in case you were wondering who is helping to decide US security policy, it is the Zippo lighter people.  Keep up the good work.

America West & US Airways Merger Announced

You can read the details of the US Airways & America West merger here.

Or you can read the summary here:

The new airline will be called US Airways, but it will be based in Tempe (America West’s headquarters) and be lead by America West CEO Doug Parker.

The airlines will operate separately for 2-3 years, but integration of schedules and frequent flyer plans will begin soon.

The combined company will have about $10 billion in revenues and $2 billion in cash putting it in pretty good financial shape, amazingly.  The press release notes that the combined group will be profitable with oil at $50/barrel.

Investors (read the release for the details) will infuse about $1.1 billion in cash into the company, showing an incredible faith that this will work out. 

The airline will eliminate almost 60 planes from its fleets, and have primary hubs in Charlotte, Philadelphia, and Phoenix, with secondary hubs in Las Vegas and Pittsburgh.

America West, which was trading at $4.80 today has an implied valuation of $6.12 per share.  Trading is currently halted.

There you have it.  The press release talks a lot about synergies between the two companies, and study after study have shown that these synergies tend to never appear.  However, I’m going to give these guys the benefit of the doubt because I have great faith in Doug Parker.  Even so, integrating these two incredibly different cultures will be difficult, and it’s going to be a rocky ride for passengers for a little while as they iron out the kinks.  In the meantime, though, the two airlines will continue flying on their own, and, here’s the best news, your US Airways dividend miles will actually be worth something again.