It's not bad enough that air travelers are facing more and more delays, and airlines are canceling more and flights, but along comes airplane maker Boeing (NYSE:BA) announcing that its 787 Dreamliner is going to face a delay of at least 14 months until deliveries are made.
According to the AP report: "The Times of London reported on its Web site late Wednesday, quoting those familiar with the matter who asked not to be identified, that delays for 787 could reach 18 months, while the Seattle Post-Intelligencer put the delay at 14 months from the original goal."
What's with this industry? Why can't anything be on time?
With three airlines going bankrupt in the last week alone, the industry is a mess. It's no wonder Boeing announced the delay because it needs to really make sure that the plane is sound structurally. The Seattle Times had a story about airline woes and reported: "American, Delta and United airlines recently canceled flights to perform unscheduled inspections of certain aircraft, and US Airways found problems on some Boeing 757s after a wing part on one of its planes fell off during a flight."
With the busy summer travel season fast approaching, travelers better plan for even more delays.
Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 4/9/08.
American Airlines -- AMR Corp (NYSE: AMR) -- is once again canceling massive amounts of flights in order to inspect the bundling of wires in some of its airplanes. You may recall, that this is the same situation that led to around 400 cancellations last month, and this current inspection is estimated to affect even more flights, with up to 500 flights being canceled.
The current round of cancellations, which represents about 20% of total American flights, started late Tuesday afternoon, and was expected to last Tuesday night and into Wednesday, and possibly even beyond.
Passengers that were scheduled to fly the canceled American flights have been switched over to alternative American flights, or placed on other airlines that service the selected routes.
At some point last year did you find yourself stuck in a noisy, overcrowded airport terminal for hours on end waiting for your flight to take off? If so, you were by no means alone. According to the Transportation Department, last year was the second worst year in history for delayed domestic flights.
Splitting my time between America and Europe, I find myself on a lot of airplanes during the year, and luckily I only had one sizable delay on my domestic connections. While I found it rather irritating at the time, looking back on it I feel lucky that it happened only once. That is far better than the national average, which showed that 26% of all domestic flights were delayed during the year.
Granted, national averages have only been recorded going back to 1995, but last year ranked as the second worst year on record, with 2000 coming in slightly worse with 27.4% of flights seeing delays.
What reasons are we given for the excessive flight delays?
Fuel costs have spiked, forcing fare hikes, but business remains brisk for the nation's airlines. This morning, Delta Air Lines (NYSE: DAL) and Southwest Airlines (NYSE: LUV) issued their earnings results for the fourth quarter.
Delta posted a fourth-quarter loss of $70 million, or 17 cents per share, narrower than the year-ago loss of $1.98 billion (when the airline was still operating under bankruptcy protection). This per-share figure was a penny better than analysts were expecting. Excluding items, DAL lost $105 million. Revenue was 10% higher at $4.68 billion.
For all of 2007, Delta banked $1.61 billion, compared to a loss of $6.2 billion in 2006. Full-year revenue rose to $19.15 billion from $17.53 billion the prior year. The company failed to address rumors of a potential merger with Northwest Airlines (NYSE: NWA) or UAL Corp. (NASDAQ: UAUA), parent of United Airlines. For weeks, there has been speculation on the Street about a brewing merger in the crowded airline sector.
In late-morning action, DAL shares were half a percent higher.
When it comes to running a tight ship, new airline Skybus seems to have learned RyanAir's lesson on operating lean. According to an article by Marla Matzer Rose of the Columbus Dispatch, the startup is currently serving 80,000 passengers a month with only 5 planes.
The ultra-efficient service shuffles these planes through 11 airports each day on 28 separate one-way trips, for an average of 13.2 hours of flight per plane per day. The worldwide average for the A319 that Skybus uses is less than 9 hours. In the U.S., United and America West, using the same model, fly 11.9 hours a day.
Of course, starting with brand-new planes give the Skybus an advantage in this department, allowing them to shrink the turnaround time between arrival and departure to only 25 minutes.
As an example of this tight scheduling, the article follows the daily journey of one plane:
Picture this: You arrive for your Southwest Airlines (NYSE: LUV) flight early. You manage to avoid packing excessive amounts of liquids in your carry-on baggage. You remember your ID, you wait until your seat is called, you stow your bags properly. You're even prepared to turn off your electronic devices and stow your tray table and put your seat in its upright and locked position when ... you're asked to leave the plane because you're showing a little too much leg.
Haha! What is this, 1951? Nope. It's 2007, and a few months ago waitress Kyla Ebbert (who works at Hooters, where scantily-clad is a good thing) was escorted off a Southwest Airlines flight from San Diego to Tucson because her outfit -- a miniskirt, tank top, and cropped sweater -- was too revealing (I don't see any cleavage and she was wearing a bra). She put up a fuss and was eventually let back on the plane after a lecture on her dress, or lack thereof.
Update: After apologizing to Ebbert, Southwest Airlines held a fare sale in honor of miniskirts -- it was fabulously popular with customers, but Kyla wasn't so pleased. To spite them -- or perhaps to take advantage of her 15 minutes of fame before it went away, leaving her still-penniless -- Kyla agreed to pose nude for Playboy.
Southwest Airlines has a history of questionable fashion judgment -- see here:
Gallery: Southwest Airlines: Wardrobe of the Past
I'm all for appropriate clothing, but personally saw nothing in Ebbert's outfit that was cringe-worthy. And if it was?
The move is bound to ruffle the feathers of competitors Aloha and Hawaiian (AMEX: HA), who filed a lawsuit late last year claiming Mesa had used confidential information the two had shared with Mesa as a potential investor to launch go!'s Hawaii service. The $1 promotion can only make the fare fight fiercer, good news for vacationers to the sunny islands.
Skybus, the newest RyanAir-model entry into the industry, has gained a great deal of attention for its practice of selling ten $10 seats on each flight. The remaining seats are sold, exclusively via its web site, on a sliding scale, growing more expensive as the plane approaches capacity.
Skybus's severely no-frills approach has put price pressure on budget competitors including Southwest (NYSE: LUV), Airtran (NYSE:AAI) and JetBlue (NASDAQ:JBLU). At a time when passenger traffic is softening and fuel prices skyrocketing, the prospect of a mini price-war among the bottom feeders doesn't seem strong. I can still hope, though -- I really would like to visit Hawaii.
The summer travel season is upon us, and you may be shopping for flights to those exotic, Blackberry-free getaway spots. Before you buy your ducats for Sardine Airlines, though, you might want to check out Seatguru.com to determine which flights offer the most comfortable seating.
According to Ed Perkins of Smartertravel.com, the differences between airlines can be significant. Most of the major carriers, in a quest to offer the lowest prices and maximize income, have tightened up the distance between seats front to back, the pitch, to a paltry 31 inches, tight enough to press your lap tray halfway through your sternum.
Seat width is also going the opposite direction of the average American waistline, with cushion widths of 17-18" the norm. By comparison, my dining room chairs measure 18 ½", while my recliner is a generous 23".
Seat comfort varies by plane type as well as airline, with the best being found in Boeing's (NYSE:BA) 777 and all the Airbus offerings.
Best in class for coach seating continues to be JetBlue (NASDAQ:JBLU), with 34-36" of legroom, along with the regional airline Midwest. Among the nationals there is little variation, except for a few United planes that offer a bit more space. Startup Skybus has taken the compression even further, to a mere 30 inch pitch, according to press contact Bob Tenenbaum.
Keep in mind, when you buy, that the hour-long flight you've booked could turn into an eleven-hour marathon on the runway, so a bit more legroom could be the difference between relaxation and an aneurysm.
Virgin Atlantic Airlines, the empire built by Brit Richard "Rocketman" Branson, is planning to grab a larger share of the world's most profitable air traffic, the business class North America-Europe traveler. According to Bloomberg.com, it will take advantage of the new 'open skies' agreement between the U.S. and the E.U. to commence service from continental airports within the next two years. This is part of its overall strategy to extend the Virgin brand worldwide.
The new agreement will permit Virgin to launch flights to the U.S. from any European airport. In the past, Virgin has been restricted to its home turf in the U.K. The change in regulations will allow other players in the trans-Atlantic picture, including Air France and Lufthansa, to expand their services as well. Almost 21,000 flights with 5.25 million available seats flew the route in January of this year.
Other than an occasional road trip back to the home office in Cincinnati, to which I safely venture in the confines of my own Volvo S-40, I don't have to do a whole lot of business travel. I'm part of a growing minority, however, as more and more female professionals are hitting the jetways and highways for business travel. The increased number of female travelers is having a palpable impact on business travel, from improved hotel rooms to enhanced safety features.
Typical hotel rooms have bettered their creature comforts, supplying better bedding, more palatable room service, and improved closets and work spaces. Improved lighting is helping business travelers of both genders feel more safe. Many attribute these changes to the ramped-up presence of female business travelers, who are more apt to share their experiences with friends and co-workers.
How many reports of overheating lithium laptop batteries must we hear before airport security agents start cracking down on my Dell Inspiron or your Apple MacBook? Sure, the damage intended by terrorists from a seemingly innocuous-looking bottle of liquid would be terrible. But today's reports of overheating -- and in some cases, spontaneously combusting -- laptop batteries brought the considerable specter of an exploding laptop at 30,000 feet.
"Most of the incidents reported to the CPSC occurred around the home, but transportation-safety officials have become increasingly concerned about the threat of a laptop causing a catastrophic fire aboard a commercial jetliner," said the AP version of the report. The New York Times article brought up a fire in the overhead bin of a Lufthansa jet while on the runway in Chicago (no one has confirmed whether or not this battery was housed in a Dell laptop).