Sunday, June 8, 2008

Airline Rumors

* * * Please note that I've revised this entry a couple of times, so if you read it before without this header, it's been changed. Thanks - CV

Despite being a controller at the nation's fourth busiest airport, I am not usually privy to any unpublicized information about the airlines that we serve. Nonetheless, I do get occasional requests for the latest airline or aviation news. So here goes:

Continental has announced that they will reduce capacity (read that as 'no empty center seats') by 11 percent, retire 67 aircraft, and cut 3000 jobs.

United announced plans for 1,100 layoffs as well as retiring 100 of their least efficient aircraft, mostly B737's. In addition, merger talks with USAir have been broken off. This after previous merger discussions with Continental were unsuccessful. Meanwhile, United's Ted subsidiary is also being shut down, much as Delta did with its Song operation.

The Delta Song 757's have all disappeared; here's one at Terminal 5 last year.

American, who was most recently in the news for instituting a fee for the first checked bag, and still smarting from this spring's grounded MD-80 debacle, is now planning to park many of those same, now freshly-inspected, airplanes. It is noteworthy that American is the lone big airline in this country to have kept itself out of bankruptcy (so far). As much as I don't like them, I have to give them credit for managing that. It's probably going to come back on them though, as all their competitors have managed to dump their pension obligations, and American is still carrying theirs. One positive bit of news is that American has just begun service to Moscow, albeit from Chicago.

AirTran and JetBlue have both postponed orders and/or deliveries of new aircraft. JetBlue, which was to begin service out of LAX last month, announced that they were putting those plans on hold for the time being. AirTran, however, has expanded service at LAX, adding flights to Milwaukee and Indianapolis.

The on-again off-again Delta and Northwest merger is reportedly on again. The biggest stumbling block is combining the two carriers' pilots. Neither pilot group wants its members to lose seniority, which is an inevitable result of combining the two lists.

On the international scene, Quantas, Malaysia, China Eastern, and China Southern, all of whom operate at LAX, have all announced various retrenchment measures. An industry trade group, the IATA, has said that there may be as many as 50 European airlines in danger of receivership.

A number of carriers are suspected of being on the verge of shutting down. We've already seen ATA's sudden shutdown after their loss of a key military contract. That same week, Aloha, SkyBus, and Frontier all declared bankruptcy; Aloha and Skybus have ceased operations, but Frontier is still flying for now. Charter carrier Champion quit flying at the end of May. I've heard that ground transportation companies are refusing to honor vouchers from AirTran. A popular rumor is that Spirit Wings is another likely candidate for the bankruptcy court. There are questions about Virgin America, the recent start-up, but I expect that Richard Branson's gazillions will keep them in the air, at least for the short term. Last year's British start up, MaxJet, has already faded away, having suddenly stopped flying amidst the Christmas holiday season. I've also heard some questions about JetBlue's financial stability.

A Spirit Wings Airbus, taken back when they operated during the day at LAX. Now they're only here late at night.

The Virgin America gates at LA's Terminal 6

A MaxJet B767 arriving at LA's International Terminal, late last year.

The factors driving all this are the lousy economy and the escalating cost of fuel. The latter has a fair bit to do with the former, and I don't see either situation improving this year. My impression is that the best investment in aviation right now would be in aircraft storage and salvage facilities. With all the current and pending bankruptcies and fleet reductions there are a whole lot of airplanes getting parked. Some temporarily, and some probably forever. I've seen examples of each leave LAX recently. Just today we had a Northwest cargo 747 depart for the boneyard; probably on its final flight. It wasn't the first, either. Northwest in particular has some of the oldest aircraft in mainline operation in this country. Champion and ATA both had aircraft on the ground at LAX when their respective axes fell.

Final Flight: this Northwest cargo 747 departs runway 25 Right, headed for the boneyard

A Champion 727 on the Imperial Terminal ramp, a couple of weeks before they ceased operations

ATA was the last regular operator of L-1011's at LAX, one of which is seen here on the ramp along with one of their B757's, a few months before they shut down. Both of these aircraft are now parked in a desert storage facility.

1 comment:

  1. Makes me glad that I depend largely on walking for my daily transport.

    Cool plane shots, though.