Delta and USAirways try again in DC and NY

Delta and USAirways, who previously (as we discussed here) tried to swap slots and gates at New York's LaGuardia and Washington Reagan National airports but were ultimately blocked by competitive concerns are at it again.

In the plan announced today, DL and US will still trade a similar number of slots and cash and will open up some additional slots for new competition and destinations from both LGA and DCA.

One major change this time around is Delta's plan to continue to operate the Delta Shuttle from the Marine Air Terminal at LGA (last time it was going to become USAirways home). USAir, Shuttle and all, will remain their current home at Terminal C at LGA in the new plan.

As before, Delta plans to operate 132 slots worth of flights (that is 66 departures and arrivals for those of you counting) with regional jet equipment vs. the prop-jets that USAirways utilizes on most of these departures. The cities may change, of course, but we expect that they will look largely as they do today.

One odd part of the press release is that the USAirways Shuttle is described as the "popular hourly Shuttle service between LaGuardia, Reagan National and Boston that is operated on dual-class mainline jets will remain unchanged as a result of the transaction." However, a quick scan of Sabre from our friends at Expertflyer.com reveals that while the LGA-DCA flights are, indeed, all operated with dual-class mainline jets, the service to Boston with the exception of the 6AM departure is actually operated with Regional Jets - USAirways' unions will probably have a field day with this...

Accuracy aside, we view this as a great move for both airlines, consumers and the cities served by USAirways from LGA today. Regional Jets will provide significantly more lift into LGA than the Dash-8s and such that USAirways operates today and Delta's much larger presence at LGA will create substantially more connecting opportunities from those smaller bergs than USAirways offers today. USAirways offers very limited connecting opportunities today unless you happen to want to fly from Portland, ME to Norfolk and such. Delta will offer those same connections from Portland to Norfolk but will also offer connections to many larger cities that Delta serves from LGA such as Orlando, Tampa, Fort Lauderdale and the like. This is good for those cities and good for consumers who gain more choice and competition.

As for Cincinnati and Memphis - we expect the aircraft Delta will require to operate these flights will come from those operations. Both are largely duplicative with Delta's hubs in Detroit and Atlanta, respectively. Delta certainly is not going to acquire new regional jets to "fund" this expansion in New York and the small amount of flights they are giving up in DC are not nearly enough. Look for a final de-hubbing in CVG and MEM following the inevitable approval of this transaction.

DOT: LGA and DCA Slot Swap is a Go for Delta and USAirways

The DOT has just issued a tentative waiver that will allow USAirways and Delta Air Lines to swap their landing slots at New York LaGuardia and Reagan Washington National airports. As we discussed previously, this will allow Delta and USAirways to greatly increase their dominance at these two airports, respectively, by allowing them to effectively transfer under-utilized landing slots between themselves. USAirways operates a large operation at DCA which will grow larger while their operations at LGA will shrink dramatically when they cede slots over to Delta. Delta will pick up many of the small routes which US currently operates (often with small propeller aircraft) and be able to better integrate them into Delta's growing New York operation.

However, the DOT is mandating that US and DL give up some slots to "carriers with no or limited service" at DCA and LGA. 14 pairs at DCA and 20 pairs at LGA (a pair is required since take-offs must generally equal landings for a successful operation.) have been marked for re-distribution. To be sure, this is a small number of the 42 slot-pairs USAirways originally stood to gain at DCA and 140 Delta was expecting at LGA.

Let the jockeying begin but we expect JetBlue, Southwest, AirTran and maybe Frontier to be at the top of requesting parties.

And as we've said before, get ready for the final shut-down of Cincinnati by Delta as a hub or focus city. The airlines are only trading slots, not aircraft. Those 120 slots will need a substantial number of aircraft for operations - we bet they are going to come from the operation in CVG.

First Airline Bankruptcy of 2010: Mesa Airlines

Yesterday, we discussed the first airline mileage promotion of 2010. Today, we bring you news of the first airline bankruptcy filing of 2010: Mesa Airlines.

Never heard of Mesa? You are not alone, but chances are pretty good you've flown on them at one point or another. Mesa operates ~130 aircraft under the codeshare colors of United, Delta and USAirways from coast to coast. Mesa also operates a small operation in Hawaii linking the major airports there under the go! brand.

Mesa has fallen victim to falling demand and rising fuel costs which have caused the major airlines to cancel contracts with Mesa for codeshare flying.

In November, United announced that they would cancel contracts covering 26 CRJ-200s currently operated by Mesa no later than April of this year. With fuel prices back up and airline yield softness continuing, these 50 seat aircraft have become some of the least desirable aircraft in the skies. Mesa also is scheduled to terminate a similar contract with United for 10 Dash-8 props at the same time.

Mesa is also embroiled in a contract dispute with Delta whereby Delta is attempting to return another 22 regional jets to Mesa.

There are no homes for these aircraft with the majors right now in the current climate. With over 40% of the Mesa Air fleet potentially side-lined in the coming months, one can understand the need for a reorganization.

Will Republic Airways ride in as the white knight to offer DIP financing as they did with Frontier in attempt to further consolidate the regional industry? Republic and Mesa already have a joint venture in Hawaii with go! and Mokulele.

We doubt it, but we know Southwest will NOT be at the table this time...

Slot Swap: When the Dust Settles, Who Will Lose - We bet Cincinnati

We haven't yet discussed the current New York slot swaps yet because we wanted to take a little time and digest. For those of you not paying attention, this airline game of Wife Swap (a TV show, really) has got Continental and AirTran trading a few slots at Washington National/LGA for Newark and a huge transfer between Delta and USAirways at New York LGA and Washington National.

The Continental/AirTran deal is fairly straightforward. AirTran gets more slots at airports where they have a decent presence and need to continue fending off Southwest. Continental picks up a few slots at their super hub at EWR and, most importantly, removes a low-fare competitor from the market. Without the need to match pesky AirTran's fares not just to Atlanta but to many destinations beyond, Continental will be able to dramatically improve their pricing power at EWR. Yes, they'll still have to match JetBlue and may opt to match fares from other New York airports but it certainly cleans things up for them.

Delta and USAirways is a much more interesting deal which will allow each carrier to fortify their existing strongholds. USAirways has been relegated to serving smaller, second tier markets from New York LGA for sometime. They have not had the international presence or business market presence to command corporate deals in the New York marketplace. These smaller markets such as Norfolk, Buffalo and Richmond have been served largely with Dash-8 turboprop aircraft which have become increasingly difficult to operate in and out of LGA due to the constant Air Traffic Control delays - all in all, a relatively poor use of valuable LGA slots.

Meanwhile at DCA, USAirways has the opportunity to dominate the preferred airport in the nation's Capital. Not only will USAirways be able to build additional connecting traffic but they will be able to dominate the local origin and destination market. Having fellow Star Alliance partner United as the dominate carrier at the other major airport, Dulles, certainly helps as well as it enables frequent fliers to pool their mileage earning across both carriers to gain status etc.

The one thing that has not been discussed is where Delta is going to get the aircraft to operate the additional 125 flights to/from LGA. Delta has promised to operate regional jets vs. the Dash 8 turboprops that USAir currently operates. (A few flights today are also operated by Colgan Air for USAir using 19 seat aircraft)

Delta certainly is not going to go out and acquire new aircraft for these flights. Our rough estimation is that around 30-40 aircraft are required to operate these flights based on an average flight of around 90 minutes, standard aircraft utilization etc.

There is probably one place where Delta can easily come up with the aircraft: Cincinnati. Long rumored to be on the chopping block and already dieing a slow death, we expect that Delta will pull substantial resources from CVG to operate in New York. A great posting by our friends at Cranky Flier details Delta's current regional jet operations at CVG - currently expected to be around 180 weekday departures in November, down from a high of nearly 400 in 2007. Those 180 departures (leaving a handful for the traffic CVG naturally generates) could easily fund the 125 new departures from LGA.

We expect the final de-hubbing of CVG to be accomplished by moving the lion's share of these aircraft to the New York LGA markets if and when the slot swap is approved - and we are confident it will be approved.

Sorry, CVG - wish we had better news but our bet is that your hub is going the way of American Airlines in Nashville and Raleigh/Durham or USAirways in Baltimore or Pittsburgh. The upside for the industry is that this rationalization will remove substantial capacity - something which is desperately needed.

US Airways: OK, maybe the Ryanair model isnt for us...at least not without our competitors following

The AP is reporting that USAirways will stop charging customers for Cokes, coffee and juice... no date is mentioned, but one would think this will be sooner rather than later.

CEO Doug Parker acknowledged that "With US Airways being the only large network carrier to charge for drinks, we are at a disadvantage...." Um, yeah - ya think?

USAirways will continue to charge for other niceties such as pillows and blankets but at least you'll be able to get a free Coke and a smile (ok, the latter is debatable) on USAirways...

This sounds like typical airline codespeak for 'our competitors didn't match us like they normally do for fares, baggage fees, frequent flyer mileage changes, commissions, etc etc so we were left holding the bag....'

Or did USAirways lose the bag on this one?

YouTube monetization gone awry - Qantas advertises on footage of US Airways landing in the Hudson

Well, the WSJ is reporting that finally video has emerged showing the harrowing and heroic landing of US Airways flight1549 ditching in the Hudson River last week.

http://blogs.wsj.com/middleseat/2009/01/23/us-airways-jet-crash-hudson-landing-videos//

The videos are still quite grainy and it is hard to see the actual landing sequence but better than nothing.

However, what is shocking is the YouTube "overlay" ad from Qantas advertising the new Airbus A380! Its probably not the kind of display Qantas was looking for when they purchased the "airbus" keyword. The USAirways flight was an Airbus A320 so its not hard to see how the mash-up occurred but this example should give e-marketers plenty to think about when designing ad campaigns.