As of today, there's a new airline in the skies: Virgin America. That's right folks: British Billionaire Richard Branson has expanded his Virgin Atlantic fleet across the pond. The new San Francisco-based start-up will use a fleet of Airbus A320's to fly two routes: San Francisco to J.F.K in New York and San Francisco to Los Angeles International.

While Virgin America will only open with those two routes, they plan on ramping its schedule fast. In the next three months, Virgin will add Las Vegas and Washington Dulles to the schedule and move up to a total 10 U.S. destinations a year from now. The fleet plans to service 30 destinations within the next five years.

Northwest Airlines (NYSE: NWA) believes that a reduction in flights may restore orderly service after a week of massive cancellations last month. The airline blamed those cancellations on severe weather, air traffic control problems and pilot absenteeism, which was an astonishing 80% higher last month than in 2006. The Air Line Pilots Association's Monty Montgomery told Reuters that it would be more accurate to attribute the cancellations to inadequate staffing during the peak summer travel season.

The number five U.S. airline said last Friday that it would cancel one of its Detroit-to-Frankfurt flights starting July 18th to free up pilots, and would cut its domestic mainland capacity by 3%. "I think this is better than last-minute cancellations, but we would prefer that we have enough pilots to fly all the revenue flights," says Montgomery.

The cancellations come shortly after Northwest's exit from Chapter 11 during which relations between management and workers had been far from stellar – mainly due to the forced pay cuts for many workers. Instead of looking ahead, workers have focused on the millions in stock awards given to CEO Doug Steenland, while rank-and-file sacrificed to keep the company afloat.

At a time when pilot salaries are seemingly continuously cut, executives decided to give themselves a hefty raise. One day, executives will figure out that it was the workers who helped to pull the company out of bankruptcy, and that maybe they should get a raise, too.

Two weeks ago, Southwest Airlines Co. (NYSE: LUV) CEO Gary Kelly said that Southwest may miss its earnings targets due to fuel costs and weak revenue growth.

Yesterday, Kelly promised a number of changes to help improve upon the company's 34 straight years of profitability. He said that to compete, Southwest needs to make changes to create $1 billion in additional revenues over the next several years.

Among the changes are:

• Seating: Southwest will more than likely drop their legendary open seating system. The company has been experimenting with assigned seating during recent months, and will announce its new boarding plan before the end of the year. The company may increase the price of aisle seats like some competitors previously have.

Northwest Airlines Corp (NYSE: NWA) disclosed yesterday that it canceled 10.7% of its flights from Friday to Monday. One of the main reasons for the debacle? The higher-than normal-rate of pilot "sick calls." Northwest said in a statement it was "working to remedy the situation and expects shortly to operate a normal summertime schedule."

I'm sure that made all the delayed travelers so forgiving.

It's a problem that Northwest pilots warned management of in the past. In the concessionary labor contract that was signed last year, the limit on monthly flight hours for pilots jumped from 80 to 90. Wade Blaufuss, a spokesman for the Air Line Pilots Association, told the AP many Northwest pilots are finding themselves flying maximum hours and don't get adequate rest. The Muskegon Chronicle said the airline pilots' union expects this problem to continue throughout the summer.

Northwest emerged from bankruptcy in May with less enthusiasm than when Delta Air Lines (NYSE: DAL) came out earlier last month. Instead, workers have been focused on the $26.6 million in stock awards given to CEO Doug Steenland – while rank-and-file took pay cut after pay cut to keep the company afloat.

Does this mean that pilots are staging a sick-out? Probably, but don't expect them to admit it. It's the summer-time - kids are graduating, people go on vacation and some just need to rest.

Sadly, that's exactly what people who paid for a Northwest flight have been trying to do as well.

Kevin Shult is a writer for TheFlyOnTheWall.com (subscription required).

If you invest in turn around situations, you will have spent a lot of time focused on airline stocks during the last five years.

When interviewing airline executives, they universally say the same thing: the airline industry is different than other industries, as you grow there is point at which your costs substantially increase as a percent of sales. The old concept of economies of scale does not work the same way in the airline industry.

This appears to be happening at JetBlue Airways Corporation (NASDAQ: JBLU). When asking airline executives about JetBlue as a competitor, many said that at some point its costs are going to have to go up.

The JetBlue irony is that the start-up airline is having trouble when legacy airlines are actually raising prices. There is no price war going on.

What are the reasons cited for JetBlue's blues? Regulation, as pilots need to follow federally established rest rules; poor communications -- a big expense; failed reservation systems -- very expensive; employees are in locations where they are unable to provide a helping hand -- more expenses.

JetBlue appears to have reached a size where it needs massive infrastructure investment. It will be interesting to hear if management comes clean on how much all the investments will cost.

The airline had scheduled 600 flights for Presidents Day, more than the 550 to 575 flights on a typical Monday. So far, 139 flights have been canceled.