Airline Maniac

Less than two weeks ago, Silverjet abruptly halted operations and stranded hundreds of travelers. Due to cash flow problems, Silverjet no longer had any money left to continue operating flights.  Despite their shutdown, the luxury airline stated that they would be back in the air as soon as they received a rescue package. Analysts never thought they would come back, however.

To the surprise of almost everybody, on June 10, Silverjet announced it had found a company that would back it financially. Kingplace, the funding company, will acquire them in the process. It is currently unknown what will happen to the airline’s current administration.

Kingplace hopes to relaunch Silverjet as soon as possible.

After weeks of bad news in the airline industry, some good news is finally hitting the press.

Southwest Airlines, America’s largest low-cost carrier, announced their May results recently. They carried 7% more passengers in May 2008 than May 2007 with only a 5% increase in capacity. This increase came with a 0.9% year-over-year increase in load factor.

Airtran Airways, another large low-cost carrier in the US, also announced positive results for May. Airtran’s traffic surged 18% year-over-year with a 14% capacity increase. Load factor increased by 2.9% .

In these troubling times for airlines, these positive results hopefully signify that well-managed airlines can overcome the frightening cost of fuel.

Sometimes reading just one blog about airline’s just isn’t enough. I understand. Why not check out our recommended reads under the “Links” area in the right hand section of this blog?

If anybody knows any other good airline blogs, we’re all ears!

Hawaiian Airlines has announced that it will add four Boeing 717 aircraft to it’s fleet. They will lease the aircraft from Boeing Capital Corporation. The aircraft additions will be used to grow capacity in Hawaiian’s inter-island flights. Most inter-island flights now fly full after the demise of Hawaiian’s rival, Aloha Airlines. The new flights added with the incoming aircraft will help relieve the strain on the airline’s current flights and open up more seats.

With the increase in frequencies, Hawaiian will be challenging it’s last major rival, GO. GO is a low-cost inter-island airline owned by Mesa Airlines. The long-term success of GO is questionable, however, due to the possible bankruptcy of Mesa.

If all the recent cuts weren’t enough, more airlines have now announced that they will be reducing service to cope with higher fuel costs. Unfortunately, these reductions also represent loss of jobs.

Continental Airlines has decided to lay off about 3,000 people. In the process, they will get rid of 67 aircraft. The cuts represent about 16% of Continental’s total fleet.

United Airlines has taken more drastic measures, cutting the size of it’s fleet by more than 20%. The airline will get rid of 100 planes and more than 1,000 jobs. The planes that will be cut will include United’s Boeing 737’s, most of which are more than 15 years old.

In the next two months, Spirit Airlines could be making gigantic cuts. When I say gigantic, I mean GIGANTIC! Up to 60% of the airline’s flight attendants and 45% of the airline’s pilots could be given the unemployment notice. According to a report that Spirit sent to union leaders, bases in New York, San Juan, and Detroit will be eliminated. Spirit also plans to downsize their Fort Lauderdale base. The cuts have been blamed on the rising cost of jet-fuel.

It is unknown whether Spirit will keep it’s order for Airbus aircraft at this time. By the looks of it, most analysts would say no.

Sadly, the airline industry continues to spiral downward. As it does, thousands of jobs will be lost. This week, Delta has announced that up to 3,000 jobs could be cut. There is a plus side however. You say, a plus side? Yep! Those 3,000 people accepted to be disemployed. Of course, they didn’t do it to help Delta out. They all will get a buyout package. Altough the general public does not know the specific conditions of the package, it must be generous. Delta was expecting about 2,000 people to accept the buyout. Contrary to there belief, an overwhelming amount of people were “ok” with being left jobless. 3,000 people to be specific.

If only all corporations would eliminate jobs when people were “ok” with it.

In the last few weeks, American Airlines has announced drastic changes. Most, if not all, changes were blamed on soaring fuel costs. Funny thing is we don’t see other legacy carriers instituting similar changes (Watch For It!). Some of the biggest changes include:

1. Starting June 15, your first checked bag will incur a $15 fee. (This is a first for any legacy carrier.)

2. Thousands of jobs will be cut and more than 70 aircraft will be grounded by AMR, the parent of American and American Eagle.

3. Curbside check-in fees will be eliminated.

4. American’s hub in San Juan, PR will most likely be reduced to a focus city. (Not officially announced, yet likely due to the quickly diminishing amount of routes American offers from San Juan.)

In the last week, two major low-cost carriers deferred many of their future aircraft deliveries.

On May 27, Jetblue Airways announced that it was deferring delivery of 21 Airbus A320’s. The aircraft are now scheduled to be delivered between 2014 and 2015. For 2008,  Jetblue plans small growth around 4%.

Three days later, on May 30, Airtran Airways released a similar announcement. In Airtran’s press release, they deferred 18 Boeing 737 aircraft. The new aircraft are now seeing delivery dates in 2013 and 2014. Airtran plans to maintain flat growth through at least 2009.

With the airline industry sinking each day due to fuel costs, it is likely that many other carriers will catch on and defer aircraft deliveries themselves.  Look for a lot less planes in the sky soon!

United Airlines has desperately been seeking a merger partner in the last few months. First they flirted with Continental Airlines. Continental reviewed there options, and decisively replied with a “no”. With their tail between their legs, United approached US Airways. Interestingly, it seemed like United had found it’s merger partner. US Airways had merged with American West Airlines in 2005 and was also considering a merger at the time.

After weeks of intense negotiations, something odd happened. United backed up. They told the public that “issues that could significantly dilute benefits from a transaction” had caused them to change there mind. With this in mind, it seems as the only merger from 2008’s “Merger Mania” that could possibly be completed will be the Delta-Northwest one.