This week: AirTran challenges US Airways on a key route; Air Canada eliminates Roots Air after less than two months of competition; two of three United Shuttle flights between San Francisco and Los Angeles are delayed or canceled; a new terminal opens in Minneapolis; and much more.
COUNTER INTELLIGENCE: The Next Battle in the Competition War
Now that a federal judge has given the major carriers the right to pummel smaller competitors, it will be interesting to watch how US Airways responds to AirTran's decision to launch flights between Philadelphia and Pittsburgh. The route is a textbook definition of a captive market: US Airways controls 98 percent of the traffic between its two Pennsylvania hubs and Philadelphia is the airline's busiest destination from Pittsburgh. The Transportation Department says the average one-way fare on the 267-mile route is $220 and a consulting firm says the yield, 66.4 cents per mile, is more than four times higher than what US Airways' generates on its second-busiest route (Pittsburgh-Orlando). The day-to-day reality is even more gruesome: I tried booking a Philadelphia-Pittsburgh same-day itinerary this week and quoted fares ranged from $478 to $614 roundtrip. AirTran enters the market on July 5 with four daily flights. Introductory fares, available for purchase until May 29, are $49 one-way for travel until October 3. Standard walk-up fares start at $119 one way.
CANADIAN CORNER: Air Canada Stamps Out Another Competitor
Air Canada, the big, bad wolf that now controls about 80 percent of the traffic in the Great White North, has wasted no time in stamping out Roots Air, a new full-service carrier that launched less than two months ago. Air Canada last week bought a 50 percent voting stake in Skyservice, the parent company of the new airline, and then Skyservice immediately shut down all Roots Air flights. Air Canada's rationale: Skyservice will eventually launch Air Canada's low-fare airline. The move is fascinating because Air Canada immediately obliterated Roots Air, but there is no guarantee Air Canada will ever launch the low-fare airline. For one thing, Air Canada recently signed an agreement with its pilots that guaranteed Air Canada would create its own low-fare carrier. The Skyservice deal seems to violate the pilot's contract. "Air Canada is trying to circumvent a contract … we sat down to sign only a few weeks ago," complained Raymond Hall, who leads the pilot's union. And there are regulatory hurdles, too. Both Canadian transportation and competition authorities plan to investigate the Air Canada-Skyservice deal.
CYBERTRAVELER: The 'Fiction' at the United Shuttle
The horrendous operation of United Shuttle was masterfully described in last Sunday's edition of the San Francisco Chronicle. As the website edition of the story showed, two out of three Shuttle flights between Los Angeles and San Francisco are either canceled or delayed. The United Shuttle schedule "is a fiction verging on farce," concluded the Chronicle. As the paper explained, United has reacted in recent months by padding SFO-LAX schedules, increasing a flight time of about 54 minutes to as long as 93 scheduled minutes. Even then, however, 61 percent of the flights continue to be canceled or delayed. United's own assessment of its performance? "I am not convinced anybody could offer a better product," said Shuttle president Montie Brewer. Chronicle reporter Elizabeth Fernandez also noted that Brewer boasted the United Shuttle "is serving as a model for the airline."
ON THE FLY: Business-Travel News You Need to Know
Will an airline ever tell you voluntarily if flights are delayed? Probably not, concludes Kenneth Mead, inspector general of the Transportation Department. Airlines should tell travelers "without being asked" at the time of ticket purchase what percentage of flights are delayed. "Based on everything I've seen, I do not believe the airlines will do this voluntarily." … A new Humphrey Terminal opened at Minneapolis-St. Paul Airport last week. The $73 million facility opened with four gates and is used by Sun Country and charter carriers. … Laptop Lane has opened an Aerzone Business Center in Concourse B at Washington/Dulles Airport. Each of the four office cubicles offers a computer, printer, fax machine, multi-line telephone, Internet access and laptop-computer connections. All-inclusive usage charges are $5 for the first five minutes and then 65 cents for each additional minute. … U.S. nationals are now required to have transit visas for visits to Russia. Russian authorities introduced the visa program after the United States began requiring transit visas for Russian citizens.
STRIKE WATCH: A Lufthansa Strike Affects United and Air Canada
Pilots at Lufthansa have initiated a series of one-day strikes every Thursday in May as negotiations on a new contract have broken down. But the strike doesn't just affect Lufthansa flights. Two of Lufthansa's Star Alliance partners, United and Air Canada, put their codes on Lufthansa flights. United Flights 3500 to 3963 and Air Canada Flights 9100 to 9105 are actually operated by Lufthansa. Those flights will also be disrupted or canceled on every Thursday that the Lufthansa pilots strike. … The six-week work stoppage at Comair reaches another flash point this weekend as striking pilots vote on a contract offer proposed by the National Mediation Board. But don't expect the Cincinnati-based Delta Connection carrier back in the skies anytime soon. Union leaders have not endorsed the NMB proposal, so rank-and-file pilots may reject it.