Alaska Airlines

Allegiant’s latest round of Hawaii flights reflects its network strategy

Allegiant Air’s latest round of Hawaiian routes is more representative of the carrier’s historical service patterns rather than the Las Vegas-Honolulu route debuting in the initial roll-out during Jun-2012. While launching its first flights to Hawaii from Las Vegas was driven more by operational considerations, the second batch of flights Allegiant is introducing in November are small markets that are largely shielded from legacy competition.

After a lengthy process to obtain ETOPS, Allegiant now has all the requisite approvals to inaugurate service to Honolulu in June from Fresno, California and Las Vegas, Nevada with 223-seat Boeing 757s, a new fleet type for the carrier. Beginning in Nov-2012 the carrier is introducing flights from Eugene in Oregon and Santa Maria and Stockton in California to Honolulu. Other new service includes flights from Bellingham, Washington to Honolulu and Maui.

The protracted ETOPS approval created marketing obstacles for Allegiant in launching its highly-anticipated flights to Hawaii.

US carriers gain access to their strongholds through new Washington National slot allocation

Four US carriers have won rights to launch flights from slot-controlled Washington Reagan National Airport to serve markets where they are dominant or have a strong presence. Southwest Airlines and Virgin America are gaining access to National for the first time, while JetBlue will expand its blossoming presence at the airport. The new services should usher in some fare rationalisation in those markets as the carriers seek to challenge United’s dominance in the Washington market from its hub at Dulles International Airport, which is about 56km from National.

US lawmakers in the latest FAA Reauthorisation bill signed into law earlier this year included a provision freeing up four outside perimeter (beyond 2,011km) slot pairs for new entrant or limited incumbent carriers at National, which is located only about 6km from the US capitol. Carriers already having an ability to operate flights outside the perimeter were also allowed to trade in a single pair of inside perimeter slots for new outside perimeter service. A slot pair consists of one take-off and one landing slot.

American quietly relaunches Miami-Seattle as high costs force Alaska to Fort Lauderdale

American Airlines has opted to quietly backfill flights from Miami to Seattle being abandoned by Alaska Airlines, which has chosen to transfer flights to lower-cost Fort Lauderdale International Airport. It appears American believes it can capitalise on its dominant carrier status at Miami to operate flights to Seattle profitably.

The new flights were rolled softly, placed on a list of new routes featured on American's website and loaded into its schedules. American opted not to unveil the routes through a normal announcement.

American Airlines defends USD1 billion revenue growth plan

American Airlines has been under pressure to explain how it will increase annual revenue by USD1 billion by 2017. While the number may be daunting, it represents only a 4.2% increase in 2011's overall revenue of USD23 billion. Additionally, American has made revenue leaps before: a USD1.8 billion increase from 2010 to 2011 and USD2.3 billion from 2009 to 2010. It is difficult to separate out previous adverse trading conditions from structural changes, but American has outlined a very achievable agenda independent of revenue growth from any possible merger or acquisition.

US airlines’ ancillary revenues continue to grow, but at a slower pace for legacy carriers

The US Department of Transportation (DoT), through the Bureau of Transportation Statistics (BTS), has released second quarter data which provides some interesting numbers for consideration. Looking at the ancillary revenue collected by carriers, we find that the amounts collected continue to grow, but for most legacy airlines at a slower pace. The overall year-on-year total increased only 5%.

However, passengers flying Spirit had a quite different experience and despite its general “no fees” image, Southwest has increased its take from fees by 10% over the year.

Hedging halves Alaska Airlines' 3Q2011 profit

Were it not for fuel hedging losses, Alaska Airlines would have posted record net income during the third quarter. But unlike Southwest, which was pushed into the red, Alaska retained profitability by posting USD77.5 million in net income, down from the USD122.4 million posted in 3Q2010. Excluding special items, the company would have bested 3Q2010 income of USD118.1 million by posting net income of USD131.1 million.

Analysts expected USD118.5 million in profits for the quarter. The company noted a 12% increase in operating revenues of USD130 million as fuel prices offset traffic gains. Higher advanced bookings and load factor boosted Alaska’s confidence that demand is remaining stable.