Delta Air Lines to Benefit After Increase Airline Ticket Prices

After years of financial difficulties, major airlines were finally flush with cash in 2010, and 2011 is shaping up to continue its path to profitability for the industry.

Earlier this week Delta Air Lines and United Airlines increased fares on flights within the United States.

Delta raised prices on roundtrip domestic tickets by as much as $20, and United increased its prices by $10 roundtrip, according to an announcement sent out by Rick Seaney, chief executive officers of the site FareCompare.com. Airfare for shorter flights did not see a significant price hike as compared to longer flights.

Competing airlines will usually respond to fare hikes within a day and a half, and if most of a carrier’s competitors do not match its rate hike, the initiating carrier eventually backs down.

Seaney said in an e-mail late Monday that he had seen a large amount of price matching going on among airlines.

“Continental and US Airways matched the United Airlines version of the hike ($4 to $10 roundtrip), while American matched both United and Delta ($10 to $20 roundtrip),” Seaney wrote. “Southwest matched Delta in a relatively small number of markets.”

According to FareCompare, this is the fourth time airlines have tried to increase fares since mid-December and the second time since January 1.

On Tuesday, Delta reported fourth-quarter profits of $19 million and over $300 million in profit-sharing expenses. Expenses could increase by as much as $1 billion for fuel this year if oil prices do not eventually fall.

Richard Anderson, Delta’s chief executive officer said, “These results are a direct reflection of the success of our merger, cost discipline and debt reduction strategy and give us momentum to deal with the rising fuel prices we face in 2011.”

“Industry-wide fare increases, combined with growth in Delta’s ancillary products and services, will provide a more long-term, revenue-based solution to addressing the high fuel environment,” added Ed Bastian, Delta’s president.

High fuel prices going back to 2008 meant many airlines began cutting back on the number of flights they offered. Since then, they have been slow to expand.

Airline Industry on Track : Major Airlines Enter 2011 with New Fee

Several major airlines are headed into 2011 with new fees, including Charlotte’s major carrier, US Airways.

United Airlines and Continental Airlines are adding a $10 one-way peak travel day surcharge, while American Airlines, Delta and US Airways are adding a $20 roundtrip surcharge.

The airline industry is on track to see its most profitable year in at least a decade, with U.S. profits topping $7 billion. In 2008, the airline industry lost more than $5 billion.

The cost for airfares has gone up and many airlines have been adding fees for luggage, seating and even carry-on bags.

Eyewitness News talked to travelers at Charlotte Douglas International Airport about the latest hit to their wallets.

“Baggage is already $25, so it’s like what else? Pillows and blankets, (are) they going to charge for that, too?” Jay Ly said.

Traveler Peggy Behar said people will just have to accept the fees and spend the money.

“I guess if you really have to travel, you’re going to have to pay the fees,” she said.

Some airlines already charge $7-$10 for pillows and blankets. Experts predict major airlines may also add a fuel surcharge for passengers, since the cost of crude oil has drastically increased.

Airlines New Flight Services : United Airlines Add Flight Schedule Washington Dulles – Lagos on December 12

United Airlines (Chicago) has announced the schedule for the airline’s new service between Washington and Lagos, Nigeria, United’s second destination on the African continent, beginning Dec. 12, 2010.

United flight UA 990 will depart Washington Dulles International Airport daily at 10:43 p.m. (2243), arriving at Lagos’ Murtala Muhammed International Airport at 5:35 p.m. (1735) the next day after a stop in Accra, Ghana.

U.S.-bound service from Lagos begins December 13 with the departure of United flight UA 991 at 9:30 p.m. (2130). After a stop in Accra, the flight will arrive in Washington the next day at 6:11 a.m. (0611).

Flights to Lagos will be operated with Boeing 767-300 aircraft. The Boeing 767-300 features six seats in United First, 26 seats in United Business, and 151 seats in United Economy®, including 74 United Economy Plus® seats with added legroom and more personal space.

Source : seattlepi.com

U.S. Airlines Converging on Suddenly Summer Season in Mexico

Leading American airlines are stepping up to give Mexico the airlift it needs as tourism increases and in the wake of Mexicana Airlines folding this past summer.

Continental Airlines, United Airlines and Delta Air Lines have all announced plans to launch a slew of new flights to Mexico from several important North American travel hubs. The flights come hot on the heels of Mexico Tourism’s announcement of a 19.2 percent increase in international tourist arrivals via air to Mexico from January to August of this year.

The new flights are a welcome addition to already planned flights by AeroMexico, British Airways, US Airways, Frontier Airlines, Virgin America and China’s Hainan Airlines.

From January to August of this year, the number of international tourists arriving in Mexico by air increased by 19.2 percent, in comparison to the same period last year and 6 percent in comparison to 2008, one of Mexico’s strongest tourism years on record. From January to August 2010, Mexican airports received 7.1 million foreign visitors. The U.S. continues to be the main market source for travelers into Mexico. In the first eight months of 2010, 4.33 million American travelers arrived in Mexico, a 15.7 percent increase in respect to the same period in 2009 and a 1.9 percent increase over 2008.

Approximately 61 percent of international tourists to Mexico are Americans, according to Mexico’s Tourism Secretariat (Sectur).

Flight Plans

In October, Continental announced its plans to launch a daily nonstop service between Los Angeles International Airport (LAX) and Leon/Guanajuato, Mexico (BJX) beginning November 1, pending Mexican government approval. This new service will complement Continental’s existing service to Leon/Guanajuato from Houston. In fact, no other carrier offers more departures from the U.S. to the Leon/Guanajuato airport. In addition, Continental Airlines has filed an application with the U.S. Department of Transportation (DOT) for permission to launch weekly nonstop flights to Cancun from Austin and San Antonio in Texas and Raleigh-Durham in North Carolina. Once approved, this service would begin on February 19, 2011. Currently, Continental Airlines serves 30 Mexican destinations, more than any other American airline. The airline presently serves Cancun 76 times weekly from its travel hubs in Houston, Newark and Cleveland.

In addition to the new flights planned by Continental, United Airlines is boosting service into Mexico City from hubs in Chicago, Denver, Los Angeles and San Francisco. United will launch a second daily flight from Los Angeles to Mexico City beginning October 15, and a third daily flight starting January 14, 2011. Starting November 4, United will up its current Saturday-only service from Chicago to Mexico City to twice-daily service and their daily service from San Francisco to Mexico City to twice-daily, as well. United will also begin offering once-daily service to Mexico City from Denver between December 16 and January 3, 2011, perfect for a holiday getaway. In regards to other Mexican destinations, United Airlines currently serves Cancun 31 times weekly from its hubs in Denver, Los Angeles, Chicago, San Francisco and Washington-Dulles.

Rounding out the announcement of new flights is Delta Air Lines, who plans to launch new nonstop Saturday flights from Memphis, to Mexico City starting January 8, 2011, pending Mexican government approval. The short 3.5 hour flight will leave Memphis at 9:15 a.m. and arrive in Mexico City International Airport (Benito Juarez International Airport) at 12:40 p.m.

Return flights are scheduled to leave Mexico City at 1:42 p.m. and arrive in Memphis at 5 p.m. Mexico is currently the city of Memphis’ second-largest trading partner, and the new flight will not only be a hit with tourists, but with business leaders seeking to strengthen ties to Mexico. This new flight will add to Delta Air Lines’ already existing seasonal flights to the Mexican beach resort cities of Cancun and Cozumel.

United Airlines and Continental Airlines to Start Passenger Service Operation Next Year

UAL Corp.’s United Airlines and Continental Airlines Inc. will start blending passenger-service operations early next year as they merge to create the world’s largest carrier.

Shared check-in kiosks and airport signs will appear next year in a process the companies call “Customer Day One” as the new airline adopts the United name. Operational changes such as joint websites probably won’t occur until about 2012, when United gets a single flying certificate from regulators.

UAL and Continental shareholders voted Friday to approve the $3.22 billion all-stock merger, which is scheduled to close by Oct. 1. The carriers are being advised by Bain & Co., the consultant Delta Air Lines Inc. hired to help mesh operations with Northwest Airlines Corp. beginning in 2008.

“On Customer Day One, Continental and United will be able to conduct key customer processes, such as airport check-in and upgrades, for any traveler, regardless of whether they are on a Continental- or United-operated flight,” said Julie King, a spokeswoman for Continental, based in Houston.

Passengers won’t see many immediate changes when the deal closes, King said. The websites for both carriers will continue to operate as they do now, and each company will run its own customer-service and marketing activities, she said.

United’s Mileage Plus and Continental’s OnePass frequent-flier programs will operate independently until after the closing. Members’ reward points will be combined, and the plans will be blended in the first half of 2011, according to the airlines.

United and Continental have decided to keep United’s Chicago headquarters. They will incorporate Continental’s globe logo on the tails when they repaint planes.

Continental Chief Executive Officer Jeff Smisek will run the company, while United CEO Glenn Tilton will become non-executive chairman.

It took Delta about a year and a half to fully combine operations with Northwest after their merger in October 2008.

Within a month, Delta and Northwest began aligning customer policies and fees for services such as taking pets onboard.

Delta installed new signs with its name and logo at all major hubs by March 2009, and the companies were granted a single operating certificate from the Federal Aviation Administration in December, which allowed them to integrate pilot groups and flight procedures.

They combined websites and reservation systems in January, and finished meshing technology and dispatch systems in April.

Virgin America Airlines to Start Nonstop Flights From San Francisco Airport to Mexico

Virgin America Inc. is expanding south of the border.

The Burlingame-based airline said Tuesday it will start flying to San Jose del Cabo and Cancun from California this winter.

Nonstop flights begin from San Francisco International Airport to San Jose del Cabo on December 16 and from Los Angeles International Airport to Cancun on January 19.

San Francisco-to-Cancun service begins Jan. 20.

In offering flights to Mexico, Virgin America is expanding its leisure destinations. Already Virgin America flies to Ft. Lauderdale and Orlando, Fla.

This represents Virgin America’s second attempt at entering Mexico. In 2008 the airline applied to fly to San Jose del Cabo from Los Angeles. The route was up for grabs after Frontier Airlines said it would stop flying there. United Airlines wound up winning that route.

Virgin America also flies to New York, Washington D.C., Seattle, Las Vegas, San Diego, Boston, Toronto and Dallas beginning in December.

Southwest Airlines to Increase Flight Service to New York City Area

The result of the merger of two largest airlines, Continental Airlines and United Airlines will add service competition flights to New York City.

Southwest Airlines is one airline that provides airline flight service to New York City. To anticipate competitive air service, Southwest Airlines will add the service number of flights to New York City.

Southwest Airlines may soon double the number of its flights to the New York City area as a result of a deal that would allow Continental and United to move forward with the carriers’ $3.15 billion merger agreement.

Dallas-based Southwest said it would lease 36 time slots at Newark Liberty International Airport from Continental Airlines, giving the domestic budget carrier first-time access to the constrained and busy facility.

“This will help [Southwest] establish a pretty good presence in the Northeast, and it’s enough to have the Southwest effect: substantially lower airfare,” said Terry Trippler, travel advisor with the consultancy Rules to Know, in a Monday interview.

Southwest already flies eight round-trip flights from New York’s LaGuardia Airport. It also operates 21 daily flights out of Islip Macarthur Airport, on nearby Long Island.

The new flights out of Newark would begin in March.

Southwest has a record of offering less expensive ticket prices because of a low-cost business model, which includes a strategy of using a single model of aircraft to keep training and maintenance costs down. Whenever the airline enters a new market, Trippler said, ticket prices generally decline.

Agreeing to the slot transfer cleared the way for the Justice Department to close its investigation into the competitive effects of the merger proposed between Continental and UAL Corp., the parent of United Airlines. See related story on Justice Department approval.

It “will likely significantly benefit consumers on overlap routes as well as on many other routes,” the Justice Department said in a statement. Continental has hub operations at Newark Airport.

Shares of UAL rose 1.3% to close at $20.71 and Continental added 0.4% to $21.89 in Monday trading. Shares of Southwest slipped 1.3% to $10.99.

Michael Derchin, analyst with CRT Capital Group, said that regardless of any decline in ticket prices from having to compete with Southwest, United-Continental will more than make up for this through some $800 million to $900 million in merger-related cost reductions.

“It’s such a good merger that it’s pretty small in the scheme of things,” Derchin said in an interview. “It’s a modest negative” for United and Continental, he said.

By contrast, Delta Air Lines and US Airways worked to exclude Southwest when they proposed swapping time slots at LaGuardia and at Ronald Reagan Washington National Airport. Shutting out the discount carrier in part led to the airlines withdrawing the plan in July, according to Derchin.

New York represents just a small part of Southwest’s total business, but it has a lot of potential for growth, according to Southwest spokesperson Katie Coldwell.

“We would love to have more slots at LaGuardia and Newark,” Coldwell said.

The airline currently operates Boeing Co. 737-300, -500 and -700 jetliners, but it’s considering the addition of the larger 737-800, with would increase its number of seats per flight.

Such an aircraft would be better suited for the New York area, which sees a high demand for traffic and yet is constrained by size of its three major airports.

Combined, Newark, LaGuardia, and John F. Kennedy International airports are No. 3 in terms of passenger traffic, just after Atlanta’s Hartsfield-Jackson and Chicago’s O’Hare, according to data from Airports Council International.

Source : MarketWatch

United Airlines Launches Summer Fares For Hong Kong, America

United Airlines is providing promotional summer fares for flights between Vietnam and the US, as well as to Hong Kong.

The discounted fares for Los Angeles and San Francisco start at US$770, with travel until June 14.

The American carrier is selling a round trip between Ho Chi Minh City and Hong Kong starting at US$138, with travel from April 1 till June 10 this year.

The summer promotion is applied for max stay of four days, and the booking class is L.

United’s regular fares for a round trip between HCM City and Hong Kong are also available, starting at US$188.

The airline operates daily direct flights between Vietnam and the US via Hong Kong. The service was launched in December 2004, making United the first American carrier to fly to Vietnam since 1975.
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United Airlines Places $10 Billion Plane Order

Taking advantage of down market prices, United Airlines said on Tuesday it placed a $10 billion-plus order for 50 wide-bodied jetliners divided between Airbus and Boeing Co, in a bid to slash fuel costs and emissions.

United, a unit of UAL Corp, has letters of intent to order 25 of Boeing’s 787 Dreamliners and the same number of A350 planes from its European rival Airbus, part of EADS, following a six-month contest. The carrier also has future purchase rights for 50 of each aircraft.
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FAA Proposes $9.2 Million in Fines for United, US Airways

Signaling a potentially tougher safety enforcement policy, federal aviation regulators proposed $9.2 million in civil penalties against US Airways and United Airlines for various maintenance lapses affecting more than 1,800 flights stretching back to early 2008.
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