Washington Dulles finally gets a break – Frontier Airlines announces new services

by: Siva Vayali - May 14th, 2014   Filed under: Airlines, Airports Add Comment

Frontier Airlines (F9) has announced plans to start new services from Washington Dulles International (IAD) airport. The ultra low fare carrier will start nonstop flights to fourteen destinations, with the first being planned on August 19, 2014. All destinations, except Orlando (MCO) will be served anywhere between four times a week to six times a week. Orlando will be served daily.

While international passenger traffic has consistently increased every year with the arrival of new carriers, Dulles has been steadily loosing domestic passenger traffic to the close-in Ronald Reagan National Airport (DCA). Airlines have been shifting services from Dulles to Reagan National because of the availability of new slots as well as the sale of existing slots by US Airways (US) and American Airlines (AA) to get their merger approved. United Airlines (UA), which operates a hub at Dulles has trimmed its domestic services as well. The airport authority, which manages both Dulles and Reagan National, has been trying hard to bring in new domestic carrier at the airport. With a mega construction project to bring Metro rail to the airport underway, it is imperative to bring in new carriers to improve traffic volume at the airport.

Frontier sees an opportunity at Dulles as the airport has ranked as one of the most expensive airports in the country every year. Its low fares should bring in enough passengers to sustain the services.

It will be interesting to see how United would respond to this new development. Anyone remember Independence Air (DH)? United’s own contract carrier Atlantic Coast Airlines turned against it by taking a new avatar as Independence Air (DH) with a hub at Dulles. Oh, I remember that period. It was fun times for the travelers and the airport (Dulles became one of the top ten busiest airports in the country and home to the largest low cost operation in 2005). United matched Independence Air’s ultra low fares and made the later to bleed cash and eventually shut down. But, I don’t think, Frontier’s operations at Dulles is a threat to United. United operates a medium sized hub at Dulles with multiple daily flights to most East Coast destinations. Also, Dulles is United’s second biggest transatlantic hub (after Newark Liberty). With lots of corporate contracts and frequent flyers, United would easily hold its court.

Tags: , , , , , , ,

American Airlines Bows to Pressure from US Airways – Agrees to explore all possible options

by: Siva Vayali - May 11th, 2012   Filed under: Airlines Add Comment

AMR Corporation, the parent of American Airlines today agreed to its unsecured creditors to explore all possible options including consolidation. The airline, in Chapter 11 Bankruptcy Protection, since November 2010, in a statement released today, AMR did not mention US Airways by name. But it is suffice to say that it is finally relenting to exploring the possibility of merger with US Airways.

American Airlines B737-800 - Courtesy: American Airlines

The statement said “The purpose of this collaborative joint agreement with the Committee is to reinforce and assure what we have stated before: what’s best for our company, our people and our financial stakeholders will be determined by the facts in a disciplined manner and process. And this includes whether American will choose to pursue any combination down the road. This is the charge of the board of directors and the leadership team to be done in close collaboration with the creditors committee. It is best for all that this process be very clear so that we are not distracted or diverted by anything that does not serve the best interests of all our company’s financial and other stakeholders. To be clear, American has committed to work in collaboration with the Committee to develop only potential consolidation scenarios and this agreement does not in any way suggest that a transaction of any kind or with any particular party will be pursued.”

As always we will continue to watch this developing story and report to our readers with detailed analysis.

Tags: , , ,

US Airways Pushes for a merger with American Airlines – WSJ

by: Siva Vayali - April 3rd, 2012   Filed under: Airlines Add Comment

US Airways is pitching a plan to some creditors of American Airlines for a merger, the Wall Street Journal reported online. According to the report, US Airways claims at least $1.5 billion could be gained in terms of revenue and cost savings.

If the story is true, there could be more stringent scrutiny from the anti-trust regulators and it could delay AA emerging from  bankruptcy.

We will follow this story closely and report if more details are available.

Tags: , ,

US Airways announces flights to Jackson, MS from Reagan but no details yet on the route for its long distance slot

by: Siva Vayali - March 5th, 2012   Filed under: Airlines, Airports Add Comment

I received few emails from our readers about announcement from US Airways about nonstop flights from Washington Ronald Reagan National Airport to Jackson, MS (JAN). I think they are under the impression that US Airways is utilizing the long distance slot to start service to Jackson. This is not correct. US Airways has not yet announced its plan for the usage of one slot pair permitted by DOT under the FAA Reauthorization Bill to start service to a destination exempted by the perimeter rule. The Jackson flight will be operated using the slots it gained by the slot-swap deal with Delta. I confirmed this with the US Airways Corporate Communications department.

[TABLE=8]

Under the FAA Reauthorization Bill, the four network careers (United, Delta, American and US) got exemptions to operate one round trip service to a destination beyond the 1250 statute miles limited by the perimeter rule. The careers did not get new slot pairs, but have to use one of their existing slot pairs to start this service. United, American and Delta already announced their routes for these exemptions.

Considering the fact that US Airways is the dominant career at Reagan National, it would take time to carefully evaluate its route options for the long distance slot. From Reagan National, it already operates three daily flights to Phoenix(PHX) and a one daily to Las Vegas (LAS). It would be very interesting to see how it would use the slot.

Tags: , , , , , , , , , , , , , , , ,

More long distance flights to Washington Reagan National – American to LAX and Delta to SLC

by: Siva Vayali - February 29th, 2012   Filed under: Airlines, Airports 5 Comments

The effects of the recently passed Federal Aviation Administration Reauthorization bill are already showing some positive signs for Washington’s Ronald Reagan National Airport (DCA). American and Delta announced new flights to the airport.

American Airlines yesterday announced a daily flight between Reagan National and Los Angeles International Airport (LAX) staring June 14, 2012. The flights will be operated by a 757 configured in two classes with 22 seats in First and 166 seats in Main Cabin. The route is already served by another daily non-stop from Alaska Airlines. The Los Angeles to Washington region flights are dominated by United Airlines with up to eight daily frequencies to between its hubs in LAX and Dulles and a daily flight between LAX and BWI. It has no flights between LAX and Reagan National. American operates up to three daily flights between LAX and Dulles. It would be interesting to see how United would respond to American’s new flight between LAX and Reagan National.

Starting June 7, 2012, Delta will be adding a second daily frequency between Reagan National and Salt Lake City (SLC). Though I haven’t seen a press release yet from Delta on this, I confirmed the news from its corporate communications office. This shows strong demand for the DCA-SLC route and Delta’s desire to lock in its status as the preferred airline between Salt Lake City and the National Capital Region. Delta already operates services from its Salt Lake City hub to all three airports in the Washington Baltimore Metro area: once daily to both Dulles and Reagan National and twice daily BWI. United operates a single daily frequency between Dulles and Salt Lake City. So does Southwest between BWI and Salt Lake City. With the addition of the second flight to SLC from Reagan National, Delta will reinforce its share between these sectors.

Reagan National Airport’s traffic is mostly O&D. The slots to the close-in, capacity constrained airport are strictly controlled by FAA and command a premium. The airport has set a passenger record for 2011 and this year will be another breakout year for many reasons: the recent slot-swap deal between Delta and US Airways would allow the latter to increase the service at the airport starting March 25; JetBlue announced additional frequencies to Boston Logan (BOS), Fort Lauderdale (FLL), Orlando (MCO) and new service to Tampa (TPA); the FAA reauthorization bill would eight new long distance flights.

Tags: , , , , , , , , , , , , , , ,

Lufthansa bringing in its subsidiaries BMI, Austrian and Swiss into Transatlantic Joint Venture

by: Siva Vayali - April 15th, 2011   Filed under: Airlines 1 Comment

Lufthansa is quietly bringing its European subsidiaries into the Transatlantic Joint Venture (formally called the A++ Joint Venture) it formed with United Airlines and Air Canada. The UK based subsidiary British Midland International (BMI) has joined the JV on April 1, 2011. Two other Lufthansa owned airlines Swiss International Air Lines (Swiss) and Austrian Airlines are set to join on July 1, 2011. Lufthansa is working to bring in Brussels Airlines also, but the date is not finalized because the airline is not yet completely owned by the German carrier.

Lufthansa Passenger Airline Group - Courtesy: Lufthansa

Lufthansa Passenger Airline Group - Courtesy: Lufthansa

Lufthansa wants to consolidate its position as a major force in the transatlantic market because competition is heating up. In addition to competing with other major European airlines, Lufthansa wants to prepare itself for the onslaught from the Middle East carriers, especially from Emirates Airlines, Qatar Airways and Etihad. Even though these airlines cannot directly serve the Europe – North America market, Lufthansa feels it is very important to offer the widest network choices so that it can maximize its revenue potential. According to one of its investor presentations, Lufthansa feels greatest threat from ever expanding Emirates Airlines. Bringing its subsidiaries into the Joint Venture will allow it offer wider choices for the corporate travel market.

US Airways Still not in the JV

Even though a part of the Star Alliance, US Airways is still a member of the Joint Venture. Its president Scott Kirby has indicated many times the willingness to join, but, I guess, United (still integrating the merger with Continental) is still not ready. The sooner US Airways joins the venture, the better for it. The reason is that all other major network carriers in the United States already have JVs – Delta Air Lines with Air France/KLM; American Airlines with British Airways and Iberia. US Airways will lose the revenue sharing opportunity if it takes more time to join the venture.

Tags: , , , , , , , , , , , , , , , , , , , , , ,