Washington Dulles International Airport

US carriers to slash fourth quarter trans-Atlantic capacity as Europe's outlook dims

Increasing economic uncertainty in Europe has resulted in US carriers pulling back capacity to the continent later this year to proactively contain losses and a drop-off in traffic that could result from the increasing likelihood of Greece’s exit from the euro zone and the Euro falling to a two-year low against the US dollar. Delta has already stated its goal to reduce capacity 5% across the Atlantic during the fourth quarter, while United has already instituted schedule changes that show a pull-down in secondary European markets. US Airways, which during the last year has enjoyed marked success in its trans-Atlantic business segment, has not declared any plans regarding its capacity to Europe later in the year. But the carrier is launching several seasonal services on the back of its strong performance in the European market.

Trade group Airlines for America (A4A) estimates that during the fourth quarter of this year US carriers will reduce their capacity to Europe by 7.8% as they attempt to better manage seasonality and stave off effects of a recession on the continent. This change is significant as Western Europe is still the largest international market from the US.

Union support of US Airways' quest to take over American is a first step in a long merger process

Public support by American’s unions of a merger with US Airways is an unprecedented move, and reflects the years-long frustration that has built among American’s employees towards previous and current management. The employees see an opportunity to start fresh, and work with a management team that will cease blaming labour for the carrier’s plight. US Airways sees an opportunity to completely overhaul American’s lacklustre revenue management that has consistently produced results that pale in comparison to its peers. But many questions remained unanswered over the perceived strength of a combined network, and many tasks have to be completed before a merger gets remotely close to reality.

US Airways formally declared it was examining its options regarding American earlier this year, and tactically began courting the carrier’s unions to gain support for a merger of the two companies that would entail US Airways’ management taking charge of the new American. Unlike US Airways' attempt to take over Delta Air Lines in 2006 when it was restructuring under Chapter 11 and Delta employees rallied to block the deal, American’s employees are exhausted with methods management has adopted in negotiating new collective bargaining agreements during the last few years.

United continues international network shifts and drops service to Accra in Ghana

United is moving international capacity around its largest hubs in what appears to be an effort to maximise its network now that a crucial passenger service system cutover is complete. The IT system cutover allows United and Continental, whose merger is now complete, to fully utilise the combined networks and properly cross-fleet to operate optimal-sized aircraft in United’s markets. One of the more prominent changes is the elimination of flights from United’s Washington Dulles hub to Accra, which was the carrier’s first point in Africa when the route was launched in 2010. Other changes include the seasonal elimination of flights from Washington to Moscow and from Newark to Rome.

The changes will support an overall revised capacity forecast for United this year. The carrier has refined its 2012 capacity guidance from an overall decrease of 0.5% to 1.5%, compared with a previous estimate of between growth of 0.5% and a drop of 0.5%. United’s international capacity is now projected to grow this year by 0.3% to 1.3%, but some of that will be driven by new long-haul flights from Washington Dulles to Doha beginning in May, followed by Dulles to Manchester and Dublin.

SkyWest to acquire ExpressJet in continued US regional consolidation

It takes a lot to overshadow Republic Airways Holdings, but SkyWest managed to do just that yesterday as it literally stepped on RJET’s second quarter conference call when it announced not only its second quarter profits but its acquisition of ExpressJet Airlines (XJT). SkyWest Inc Executive Vice President and CFO Brad Rich said the acquisition and merger with SkyWest subsidiary Atlantic Southeast Airlines (ASA) means SkyWest Inc will be the largest provider to the nation’s two largest carriers – Delta and the combined United-Continental entity.

JetBlue's surprise first quarter loss. Focusing on strengthening network for new partnerships

Despite its surprise first quarter net loss after four consecutive profitable quarters, President, Director and CEO Dave Barger, was very optimistic during yesterday’s analyst call as he briefed participants on the company’s strategy to gain new partners.