Major Expansion for DayJet

After a couple of shaky months during the capital-markets crunch (and the layoff of 100 of its 260 employees), the air-taxi start-up DayJet has evidently found some new traction.

DayJet, based in Boca Raton, Fla., said today is will open two new "DayPorts,"-- its main regional airport bases. With the two new bases, it has 14 DayPorts and numerous other secondary locations in Florida and surrounding states.

DayJet flies new Eclipse 500 very-light jets. The new DayPorts are in Orlando and St. Petersburg.

"The rapid contraction of regional transportation options is causing many Southeastern communities to become increasingly isolated," said Ed Iacobucci, the CEO of DayJet, whose strategy is to provide on-demand, per-seat air transport to business travelers whose options -- and patience -- with commercial scheduled air transport are running out.

DayJet says that nowhere is the "crisis" in air transportation more evident than in "short-haul, small and medium-sized markets," including current DayJet markets in Gainesville, Naples, Orlando, Pensacola, Sarasota and St.Petersburg-Clearwater in Florida, and Montgomery, Ala., and Savannah, Ga.

The new Orlando DayPort is at Sheltair Aviation Services at Orlando Executive Airport; the St. Petersburg DayPort is at St. Petersburg-Clearwater-Clearwater DayPort is Sheltair Aviation Services at St. Petersburg-Clearwater International Airport.

###

Fewer Delays in May, U.S. Says

Airline on-time performance improved in May, to 79 percent compared with 77.9 petcent in May 2007 and 77.7 percent in April of 2008, the Bureau of Transportation Statistics says in a report today.

Another indicator – mishandled (including delayed, damaged or lost) bags – also showed improvement. In May, 4.59 of 1,000 bags were mishandled, compared with 5.94 per 1,000 in May of 2007 and 4.99 in April of 2008.

So that’s good news, right? On the other hand, the system is being used less by passengers. Airline operating data for June generally show a continuing decline in the number of passengers, load factors and individual flights. More detail on that later.

***

Airline On-Time Arrival Pct May 2008
	Carrier	On-Time Arrival Pct.
1	Hawaiian	88.89
2	Pinnacle	85.93
3	AirTran	84.69
4	Skywest	84.47
5	Delta	84.06
6	Atlantic Southeast	83.83
7	US Airways	83.62
8	Southwest	80.92
9	Alaska	80.35
10	JetBlue	79.24
11	Northwest	78.89
12	Comair	78.44
13	Mesa	76.90
14	Frontier	76.46
15	American Eagle	76.28
16	ExpressJet	76.06
17	Continental	75.39
18	United	72.42
19	American	67.28
	All Airlines	79.02
Source: Bureau of Transportation Statistics

Airline On-Time Arrival Pct Year-to-Date Jan-May 2008
	Carrier	On-Time Arrival Pct.
1	Hawaiian	92.24
2	US Airways	80.00
3	Alaska	77.95
4	Southwest	77.78
5	Delta	77.56
6	Frontier	76.74
7	SkyWest	76.21
8	AirTran	75.84
9	JetBlue	74.26
10	Pinnacle	74.16
11	Atlantic Southeast	73.83
12	Continental	73.00
13	Northwest	72.72
14	ExpressJet	72.17
15	Mesa	71.55
16	Comair	70.66
17	United	68.91
18	American Eagle	68.82
19	American	64.56
20	Aloha*	94.33
	All Airlines	73.90
Source: Bureau of Transportation Statistics
* Aloha stopped reporting on-time data after February

###

U.S. Court Declines to Hear Amazon Mid-Air Collision Damages Case

A U.S. court has declined to hear liability lawsuits brought by relatives of the 154 victims in the Sept. 29, 2006, mid-air collision over the Amazon between a Brazilian Gol 737 airliner and a Legacy 600 business jet, whose two pilots and five passengers survived the disaster.

(I was one of the passengers).

This means that the civil lawsuits now will be heard in Brazil, where damage awards traditionally are much lower than in American courts.

Meanwhile, the two Legacy pilots, Joe Lepore and Jan Paladino, remain on criminal trial in Brazil, in absentia, on charges cooked up by Brazilian authorities in what I have argued since practically day one is an attempt to cover up manifest errors of the Brazilian Air Force in running the air-traffic control system over the Amazon. Every international pilot I know who flies there says "Beware over the Amazon."

The relatives of the dead sued the following: Excelaire, the Long Island charter company that had just taken delivery that day of the $27 million business jet in Brazil; the pilots, Lepore and Paladino; Honeywell, the supplier of avionics equipment in the Legacy, primarily its transponder and anti-collision warning system; Raytheon, Lockheed Martin and Amazon Tech, all U.S. companies that developed the radar-control system over the Amazon for Brazil (which considers that system part of its national-security apparatus); and a company called ACSS, which actually manufactured the Legacy's transponder.

The U.S. District Court Eastern District declined to hear the case on Wednesday , effectively sending it to Brazil.

As usual, Richard Pedicini in Brazil has been on top of things from Sao Paulo. Here is the text of the U.S. District Court ruling:

brazil-jul-08.pdf

Incidentally, the blog I'd previously set aside for my voluminous Brazil posts, sharkeyonbrazil.blogspot.com, fell into disuse earlier this year through sheer exhaustion. However, anyone interested in the record can look it up, as they say.

As usual, Brazilian media leap to defend the powerful. For example, here's O Estado de Sao Paulo the other day summarizing the Brazilian military and police investigation into the crash, and in failing to address the issue summarily absolving the Brazilian Air Force of blame in a disaster that was triggered and made almost inevitable by operational faults and errors in Brazilian air-traffic control that awful day:

" ... No evidence was found that radar coverage in the area of the accident had an influence in the tragedy -- removing the suspicion of a "black hole" in the region."

Whoa, Scoop: As any reporter -- or cop -- knows, the absence of evidence is not evidence, even in an honest investigation.

O Estado goes on, saying that once the pilots received their order to fly to Manaus at 37,000 feet, on what would be the fatal collision course with the 737:

"It's from that instant on that the air traffic controllers' conduct becomes preponderant for the tragedy. On losing contact with the LEgacy, they should have programmed into their consoles five alternate radio frequencies, which wasn't done, according to the examination done on the equipment. This ... suggest[s] a flaw in the controllers' training. Everything leads to believe that they did not know how to act in these cases."

The Air Force and the authorities, of course, share no blame. Just two straight-arrow American pilots and a handful of low-ranking Brazilian military schlubs who has the misfortune to be on duty that godawful day.

###

Your Tax Dollars at Work...

...with more empty words.


The U.S. Transportation Secretary, who comes out of the interstate trucking industry, repeats the much-ridiculed initiative from last Thanksgiving to open up some air lanes used by military aircraft for commercial traffic over the July 4th holiday.

The move "will help ensure that travelers don’t have to celebrate Independence Day by being stuck on an airplane,” she said.

Opening up military airspace, of course, is akin to adding an extra lane on I-95 for about 100 miles. Inevitably, of course, the traffic merges at a bottleneck.

Here's the announcement from DOT. Note how they always have to get the name of the glorious Boss in at the start of the headline:

***

U.S. Transportation Secretary Peters Announces Opening of Military Airspace for July Fourth Weekend

The U.S. military will again make airspace available for commercial airline flights off the East Coast during the July Fourth weekend to help reduce delays for air travelers, U.S. Transportation Secretary Mary E. Peters announced today. The airspace released by the military over the upcoming weekend will allow airlines to plan alternate routes in one of the country’s most heavily flown aviation corridors.

“Today’s announcement will help ensure that travelers don’t have to celebrate Independence Day by being stuck on an airplane,” said Secretary Peters.

The Department of Defense (DOD) is releasing airspace off the eastern seaboard from 6:00 p.m. EDT on Thursday, July 3, to 6:00 a.m. on Monday, July 7, the Secretary said. This is similar to what was done over Memorial Day, Christmas and Thanksgiving. The military continually works with the Federal Aviation Administration to release the airspace anytime it is not being used for military missions, the Secretary noted.

The DOD will release airspace off the east coast from Maine to Florida above 24,000 feet, and will continue to control airspace below 23,000 feet for training operations."

###

Back in Business

A technical glitch shut this blog down for about a week. It's fixed.

Here is some catchup:

Jul 3

21st Fare Hike of the Year Underway (But Who’s Counting?)

Well, Rick Seaney and Tom Parsons are counting, that’s who.

From Rick, at Farecomare.com, last night:

“Before the paint could dry on the 20^th attempted airfare hike of 2008 initiated late last week, United decided to kick off the long holiday weekend by firing out the 21^st attempted airfare increase of 2008.

Tonight at 8 p.m. EDT United hiked airfares by $20 to $40 roundtrip (mostly $20) across the bulk of it’s route system – this year United has not been bashful about test firing increases as they have initiated 10 of the past 20 attempted airfare hikes this year.

Today was a very volatile airfare filing day as Delta earlier raised prices on dozens of smaller cities by $10 to $20 – not enough to be considered a full blown attempted hike but possibly the trigger for United’s move.

Recently we have seen an unusually high amount of airfare filing activity in every airfare distribution with a variety of “unexplainable changes” with wild price swings up and down for travel later in the fall as carriers react to other airlines pricing or attempt to initiate new higher pricing.

Consumers should be cautious about buying tickets right now for travel starting after early November as many airlines do not seem to be “set” on their price points yet for this time period as they make final decisions on flight cutbacks.

Air travelers should lock any tickets under $350 roundtrip for long trips and $225 roundtrip for shorter trips – price points are likely to be much higher in the coming weeks and months as more airfare hikes pile up.

We will continue to update as significant airfare activity occurs related to this increase.

The 2008 Airfare Hike Timeline is posted on my blog.”

***

And from Tom Parsons at Bestfares.com :

“The fireworks are starting early this 4th of July weekend with United Airlines raising airfares by adding an additional $20 in fuel surcharges on routes where they do not compete with low-cost airlines such as Southwest Airlines. American Airlines and Delta Air Lines have quickly matched this new $20 fuel surcharge hike initiated by United Airlines. This will be the 21st time the major airlines have attempted to raise their airfares or fuel surcharges since the week of December 20, 2007. Both business and leisure travelers now pay on short-haul and long-haul flights a whopping $170 roundtrip in fuel surcharges for travel within the 48 states and Alaska. The new fuel surcharge to Hawaii is now $260 roundtrip” - states Tom Parsons, CEO and founder of Bestfares.com, an internet discount travel website.

Since December 20, 2007, there have been seven successful airfare hikes, and if this fuel surcharge is successful it would be the ninth fuel surcharge hike. There also have been five additional airfare and fuel surcharge hikes that have failed. Travelers on coas- to-coast, non-competitive routes have seen their combined airfare and fuel surcharges increase by as much as $420 roundtrip in under seven months” - adds Parsons.

Travelers who live near small regional airports continue to receive bad news. From new airfare hikes, downsizing of flights, new baggage fees, new change fees, new soda pop fees, seat assignment fees and much more. It’s coming to a point where leisure travelers who live in small rural communities who want a decent airfare will have to drive to a more competitive airport” - states Parsons.

For a full list of the 21 airfare and fuel surcharge hikes that have been attempted since December 20, 2007, please click here.”

###

Jul 2

L’Avion Folded Into British Airways’ OpenSkies

Long-rumored, the deal is done.

British Airways said today it has an agreement to acquire French airline L’Avion and integrate the company with its new subsidiary OpenSkies. OpenSkies recently launched daily flights between Paris Orly and JFK.

The value for OpenSkies, I am told, is the hardware. OpenSkies needs a few extra 757s and British Airways doesn’t have them to spare. L’Avion operates two 757s between Paris Orly and Newark. The combined airline will operate up to three daily flights between Orly and JFK and Newark using 757s.

Dale Moss, managing director of OpenSkies, said, “L’Avion will provide OpenSkies with immediate scale [and] increased access to Paris Orly.”

British Airways said: “Once the two airlines are integrated, customers can expect to experience benefits that will further improve the Paris-New York offering, including an increased schedule and BA Executive Club privileges.”

L’Avion started flying in early January 2007. Its acquisition by British Aiways means that all four of the startup all-business-class airlines — MaxJet, Eos, Silverjet and L’Avion — have now disappeared.

L’Avion’s two 757s are configured with 92 all-business-class seats, each with a 140-degree recline. OpenSkies, however, has an odd configuration, with several rows of standard economy seats in the rear behind a business-class section with 140-degree-recline seats. For reasons of coding, OpenSkies calls its business class section Prem+, evidently as a marketing ploy to accommodate customers with corporate policies forbidding business-class travel.

The OpenSkies Prem+ does not fall into the premium-economy class that some other airlines offer. Premium economy is essentially a glorified coach class. OpenSkies is flying with business-class seats and service that British Airways pioneered in 2000 when it introduced its first generation of ClubWorld amenities. It’s widely suspected, by me and others, that the 30 token coach seats in the back are there to bolster the illusion of a three-class aircraft, and will disappear as soon as OpenSkies gets market traction. In an interview earlier this year, Dale Moss said that OpenSkies would consider removing the coach seats if it made sense.

Now that more 757s are available, Open Skies says that it is considering adding service between to Amsterdam, Brussels, Frankfurt and Milan.

###

Here's Your Free Ticket ... 50 Bucks Please

We have commenced upon another slippery slope.

Delta said it will ding customers $25 for frequent flier award tickets in North America and $50 for international award tickets starting Aug. 15. Delta calls it a "fuel surcharge."

Here's Delta's press release announcing the new charges for formerly free tickets. Note that it is headlined "Delta Continues to Adjust to Unprecedented Fuel Costs with Addition of Fuel Surcharge on SkyMiles Award Ticket Travel."

On June 12, US Airways made a similar announcement about charging $50 ($100 internationally) for award tickets.

The headline on its press release was: "US Airways Accelerates Business Model Transformation."

Hmmmm. "Continues to Adjust...with Addition" ... "Accelerates Business Model..." All these forward-sounding words!

Let me ask a question: Who the hell do these airlines think they're kidding? Why do they find it impossible to simply come out and say what they're doing in a straightforward manner?

I can't tell you the number of business travelers I have heard from lately who say: I wish the airlines would cut the crap, raise their fares to whatever it takes to stay in business, and stop nickel-and-diming us and insulting our intelligence. The leisure travel market is about to shrink substantially, and it's probably a really, really bad time to keep pissing off business travelers.

Hey airlines: Continue to adjust. To this.

###

Uh Oh (Cont'd): United Drops Some International Routes

Is that other shoe dropping?

United Airlines says it is killing a few international flights in the fall, including San Francisco-Taipei and Chicago-Mexico City, and reducing its Chicago-Tokyo flights to one a day from two.

Northwest Airlines, as noted here yesterday, also cut a few international routes, citing fuel costs and (uh-oh) sagging demand.

Most domestic network airlines are heavily invested in international travel, even as they slash domestic capacity. The thinking has been that international markets will hold up.

Place your bets, ladies and gentlemen.

###

Show Us Your Books: DOT Denies Virgin America Request to Conceal Operating Data

The Department of Transportation denied Virgin America’s strange request to be allowed to withhold from public disclosure the financial and operating data that airlines are required to submit to the government.

Competing airlines objected strongly to Virgin America’s request to be able to conceal its balance sheet, cash-flow position, and a list of other data, including traffic and passenger origin-destination information. Virgin America had asserted that public release of the data would cause “substantial competitive harm.”

Virgin America began flying last August to good reviews, but it has not been clear whether the start-up carrier’s load factors, especially in coach, were holding up.

Here’s a copy of the Transportation Department’s denial, issued late this afternoon, of Virgin America’s request:

dot-virgin-america.pdf

###

Northwest Drops Some International Routes, Citing Sagging Demand

Uh-oh.

The major domestic airlines -- more heavily invested than ever in international routes at the expense of domestic capacity -- have been extremely worried that international traffic might begin to sag as oil prices keep rising.

Is the other shoe dropping? This afternoon, Northwest said it was canceling two transatlantic flights and suspending another in its joint venture with KLM, a division of Air France-KLM.

"Decreased customer demand" was one of two reasons cited.

Here's the announcement, which I guarantee you received serious attention at Delta and among other major airlines that have bet the farm on international travel:

EAGAN, Minn.-- Northwest Airlines, with its trans-Atlantic joint venture partner KLM Royal Dutch Airlines, today announced a seasonal suspension of flights between Minneapolis/St. Paul-Paris and cancellation of flights between Detroit-Dusseldorf and Hartford-Amsterdam – effective October 1, 2008.

With oil reaching a record-breaking $140 a barrel today, the reductions come in response to soaring fuel costs and decreased customer demand. Customers with advance bookings for these flights will be offered alternate NWA or SkyTeam alliance flight re-accommodations.

Selective frequency reductions and aircraft type changes may also be implemented on additional trans-Atlantic flights, depending on oil prices and ongoing customer demand.

Seasonal Suspension

Minneapolis/St. Paul – Paris

Destination		Flight Number		Departs		Arrives		Effective Date of Suspension
Paris		NW 62 / KL 6062		3:45 p.m.		7:20 a.m. +1		October 1, 2008
Minneapolis/ St. Paul		NW 61 / KL 6061		12:50		3:25 p.m.		October 2, 2008

Flights will resume between Minneapolis/St. Paul and Paris on March 28, 2009.

Cancellations

Detroit – Dusseldorf

Destination		Flight Number		Departs		Arrives		Effective Date of Cancellation
Dusseldorf		NW 94 / KL 6094		9:45 p.m.		11:45 a.m. +1		October 1, 2008
Detroit		NW 93 / KL 6093		1:15 p.m.		4:15 p.m.		October 2, 2008

Hartford – Amsterdam

Destination		Flight number		Departs		Arrives		Effective Date of Cancellation
Amsterdam		NW 98 / KL 6098		5:25 p.m.		6:40 a.m. + 1		October 1, 2008
Hartford, CT		NW 97 / KL 6097		1:25 p.m.		3:25 p.m.		October 2, 2008

###

American Airlines: Buh-Bye Albany, Providence, Harrisburg

More details today from American Airlines on the fourth-quarter capacity and route reductions that will leave the carrier with about 12 percent fewer domestic seats this fall that last.

American says it will eliminate all of its service, flown by American Eagle, in Albany, N.Y., Providence, R.I., and Harrisburg, Pa. It will also reduce service at LaGuardia, and in Chicago, Dallas and St. Louis.

Here's the announcement from American:

FORT WORTH, Texas – American Airlines and its regional affiliate, American Eagle, today announced additional details of their capacity reductions for the fourth quarter of 2008. The reductions are in line with American’s previously announced (May 21) plans of cutting fourth quarter domestic capacity by 11 to 12 percent and regional affiliate capacity by 10 to 11 percent versus fourth quarter 2007 levels. The changes are being instituted to reduce costs and create a more sustainable supply-and-demand balance in today’s high fuel-cost environment.

Today’s announced reductions involve additional schedule changes taking effect in November. Previously announced (May 27) reductions will take effect in September.

American is reducing flights at most of its principal operations. This announcement, combined with the previously announced round of schedule reductions, means American will close its operations entirely at three of its airports, while Eagle will close five of its airports, out of a combined total of 250 airports for both. The airports/cities being closed are:

--American: Oakland, Calif. (previously announced); London Stansted (previously announced); and Barranquilla, Colombia

--American Eagle: Albany, N.Y.; Providence, R.I.; Harrisburg, Pa.; Samana, Dominican Republic (previously announced); and San Luis Obispo, Calif. American Eagle will also close its maintenance base in San Luis Obispo.

American plans to reduce its departures in Chicago by 28 flights with American Eagle reducing 34 departures. In St. Louis, American will reduce departures by 8 flights with American Eagle and AmericanConnection reducing 35 departures. American will reduce 19 departures at Dallas/Fort Worth along with 23 American Eagle flight reductions.

The company also has decided to eliminate five AA flights and 37 American Eagle jet departures at LaGuardia Airport. In addition to the expected cost savings, these changes, coupled with appropriate government action, could allow the airport to operate with less chronic disruption and improve customer experience at one of the nation’s most congested airports.

“Today, the dependability and delay issues that exist at LaGuardia have reached a crisis point and have a daily negative impact on the overall customer service and performance for every airline with flights at LaGuardia,” said Bob Reding, American’s Executive Vice President – Operations.

Historical data from the Bureau of Transportation Statistics on operational performance at LaGuardia highlights the issues. During the last five years, for example, delays at LaGuardia have increased 50 percent and now occur on one out of every four departures, with these delays averaging more than one hour. In large part, these delays are attributable to Air Traffic Control’s inability to handle the scheduled service levels.

Likewise, inbound delays have increased by 55 percent and occur on four out of every 10 arrivals, on average delaying arrivals by 60 minutes. In addition, cancellations at the airport now average over 5 percent, an increase of more than 50 percent.

American has called for the FAA and the Department of Transportation to reduce the number of operations allowed at LaGuardia by 20 percent – or approximately 15 operations per hour until FAA airspace redesign efforts, ATC modernization, and other steps increase the level at which LaGuardia can operate reliably.

“As airport utilization increases, on-time arrival performance at any airport declines,” Reding said. “The decline is particularly evident as airport utilization exceeds 80 percent. LaGuardia is scheduled at over 100 percent and has the worst dependability in the nation. With the retirement of American’s five operations per hour at LaGuardia, the DOT will be able to achieve more than one-third of the objective, and will be well on its way to providing a real solution to the operational problems plaguing LaGuardia today.”

American and American Eagle regret the potential impact these schedule changes will have on its people. The company is in the process of determining the overall impact on its employees, and it is the company’s intent to offer voluntary programs before moving to involuntary separations.

###

Repent!

Above: The Reverends Al Sharpton and Pat Robertson at the reception area, the first sight you beyond the Gates of Hell. (The ocean background is, of course, a cruel mirage.)

###

They Kill Horses, Don't They? ( But Who's Counting?)

The national disgrace that is modern thoroughbred racing continues without much further media disruption, now that the ... uh, unpleasantries that marked the Kentucky Derby are forgotten.

Yesterday, two more horses were killed after injuries in separate races at Churchill Downs, site of the Derby. The sportswriters, waiting for the next tray of shrimp to be brought to the press box buffet, like to say that such horses are "euthanized," as if a kindness had been bestowed upon them.

The Courier-Journal newspaper in Louisville doesn't give much play to these things, but at least it does cover them when they occur literally on the home turf.

The term the sportswriters like to use for "horses killed for sport" is "fatal breakdowns."

So far this year during the 41 days of the spring meet, six horses have been killed at Churchill Downs, which is by no means the only race track where these atrocities occur regularly. Last year, during 73 days of racing, 17 horses were killed at Churchill Downs, and in 2006 (during 78 racing days), 18 horses suffered these "fatal breakdowns," as the Courier-Journal says.

That's just one race track. And that also tells you almost nothing about what goes on at the track when the crowds are not watching in thoroughbred racing, the so-called sport of champions.

The Associated Press, in a recent survey, found that U.S. thoroughbred tracks averaged more than three horse deaths a day last year and reported 5,000 deaths since 2003 -- and that's based on incomplete numbers, since some tracks didn't cooperate. The excellent AP story reporting the survey results last week was widely ignored by the media.

Nothing wrong with racing a soundly bred, full-grown horse under humane circumstances, as I have said. None of those modifiers apply to modern thoroughbred racing.

Horses love to run like hell, to a degree. If you ask me a quarter-mile is a good distance to gallop a horse. But then I'm a fan of quarter-horses, called that because after a quarter-mile or so of rip-ass galloping, they're likely to give you a look that essentially says, "If you want to keep running flat-out like this, Bucko, get the hell off my back and run along yourself, then."

On the other hand, I was once on an endurance-trained Arabian mare in Houston that willingly galloped in a small pack for three miles -- and when I say "willingly," I inferred that from the horse's disinclination to drop down to a nice sensible trot after two miles, despite my desperate pleading.

###

Airlines Take Aim at Transportation Department

I’m glad to see the Air Transport Association of America, the industry trade organization for the leading U.S. airlines, taking aim at elements of the sorry legacy of the U.S. Transportation Department and the F.A.A. for its dereliction of duty in managing the nation’s air-traffic control system.

This week, the ATA president, James C. May, testified before the House Committee on Transportation on the need to increase capacity and reduce congestion in New York-area airspace. ATA denounced the Department of Transportation (DOT) congestion pricing and slot auction proposals that would ration capacity. The DOT, said the airline trade group, needs to “to stop talking ideology and experiments, and start leaving a legacy that will help, not hurt, this country.”

“Instead of moving forward with capacity enhancements and airspace redesign using every available resource with all deliberate speed, the DOT is pushing congestion pricing and slot auctions – completely unproven textbook experiments that no one in the aviation world has used successfully,” May said. “DOT seems intent on leaving a legacy of failed, but extremely costly, experiments that do nothing to reduce congestion and flight delays in New York or anywhere else.”

Ouch. And it’s about time the airlines started hammering the DOT for its manifest failures in air traffic control modernization – marked by breathtaking cost overruns and delays, by betting the farm on questionable technology that still won’t be in place for years, and by consistently coming up with lame publicity stunts like those risible borrowed-from-the-military sky lanes at Thanksgiving.

The ATA is supported by the Port Authority of New York and New Jersey in opposing the DOT proposals on congestion pricing and slot auctions.

The ATA, obviously, represents the interests of the commercial airline industry. Its position here is strictly in regard to slot auctions and air-capacity reductions, incidentally. Others, including low-cost airlines and foreign airlines that might want to buy those auctioned slots, will disagree.

May’s testimony (transcript here) is worth a read for anyone who wants to keep up with the dynamics of the air-space allocation issues, and where the major airlines stand.

###

Good Times, Bad Times

Two items tonight illustrate the growing upstairs-downstairs separation in air transportation:


NetJets in $1.9 Billion Deal for New Gulfstreams

The business-jet leader NetJets said it will significantly expand its fleet of large-cabin Gulfstream G450s and Gulfstream G550s. In deal Gulfstream valued at $1.9 billion, NetJets will acquire 40 new Gulfstream jets - four Gulfstream G450s and four Gulfstream G550s to be delivered each year from 2012 through 2016.

NetJets has over 90% of the long-range cabin fractional-share market and is the largest operator of Gulfstream aircraft. NetJets’ worldwide Gulfstream fleet currently totals 110 -- with 21 Gulfstream G550/V; 55 Gulfstream G450/400/IV-SP and 34 Gulfstream G200s.

***

Boeing, Airbus Order Books 'At Risk'

Analysts estimate that 25-30% of the commercial aircraft backlog at Boeing and Airbus could be at risk as high fuel prices continue to batter airlines, Aviation Week reports in an article by Joseph C. Anselmo online today at http://aviationweek.com/aw/ and in Aviation Week & Space Technology's June 23 issue.

Many undercapitalized startups in Asia and Europe have overly aggressive growth plans that could cause the airlines to cancel or defer orders, Aviation Week reports. Robert Stallard, a director at Macquarie Capital, said, "The question that has yet to be answered is not whether there will be a downturn, but how bad it will be."

The article suggests two possible outcomes: the optimistic view that "Boeing and Airbus can afford to lose orders and still make it to the industry's next up-cycle with minimal pain;" and the more negative answer "that a steep change in global energy demand has created a permanent era of high prices and sent the airline industry into uncharted territory."

###

Who You Callin' Cowboy, Cowboy?

My driver's license now says "Arizona" on it, which gives me even more cause to protest -- once again -- this continuing use of the word "cowboy" as a pejorative.

It's bad enough when they call George Bush a cowboy and mean it as an insult. It's a well known fact, as I have pointed out before, that the current president is not only unable to ride a horse, but is actively afraid of them. Plus have a look for yourself and see how much W behaves in a cowboylike manner, at least according to ol' Gene Autry, as quoted here in the Cowboy Code blog.

Now we have Arizona's own Sen. John McCain deriding the alleged "cowboy diplomacy" of Sen. Barack Obama. (Link via the breathless Drudge, who is not a cowboy, neither, despite his hat.)

Read Gene Autry's famed "Cowboy Code" and you'll see there's no reason for any sensible person to take offense at being called one.

In fairness, Sen. McCain, a former Navy bomber pilot, lives near spiritually chi-chi Sedona, Arizona, in an 8,300 square-foot house that the media hilariously refers to as "rustic," on 6.6 acres that the media equally hilariously refers to as a "ranch."

Sen. McCain is married to a rich beer distributor -- which, come to think of it, is a naval aviator's dream, not to mention a cowboy's.

###

Can They Spell 'A-n-t-i-t-r-u-s-t?'

…They can spell it, but some observers don’t seem to grasp the historical concept in their eagerness to swallow everything the airlines tell them these days.

Way back in April, the tone was set for what is now developing when the Transportation Department announced a six-way antitrust-immunity deal for Northwest and its SkyTeam partners — Delta, Air France, KLM (Air France and KLM are owned by the same company, incidentally), Alitalia (stop that snickering right now!) and CSA Czech Airlines.

This wonderful gift was modeled on an exemption Northwest got from antitrust law in an alliance with KLM 10 years ago, followed by a similar deal Delta got from the feds in an alliance with Air France this year.

Dunno, I’m just a simple reporter who probably spends way too much time in the desert, but I seem to recall that antitrust law, as applied to airlines, essentially prevents them from colluding, especially in the matter of setting prices. International alliances have always operated in a kind of legal gray area in price fixing. But don’t forget, with Open Skies, the borders between international and domestic markets are disappearing.

And today we have word of still a new antitrust-law exemption — the new so-called “alliance” between United and Continental. Continental will join the Star Alliance, yada, yada, yada. All subject to (expected) approval from the feds. No downside at all, the experts proclaim.

O.K., you can call these things “marketing alliances” if you want, as if they’re just more of the same. But I call them quasi-mergers on select routes. And the key component of all these wondrous new partnerships, and the anti-trust exemptions that accompany them, is that the involved airlines will be able to collude to a degree that previously would have been illegal. Two words: Set prices.

I’d also suggest that the successive series of 14 across-the-board fare hikes this year by the major airlines — all done in remarkable lock-step — could arguably be looked at as price fixing. I know they didn’t all get in the same location to do it. With fancy technology and shared assumptions, they didn’t have to book a conference room at the Marriott. Res ipsa, as the tort lawyers say.

As I have said repeatedly, airlines obviously cannot survive charging last year’s fares with this year’s fuel bills. The days of cheap airline fares have ended. More fare hikes are inevitable, and by this fall we will be contending with a domestic air-transportation system that is significantly smaller and less reliable than we have been used to.

But that doesn’t have to mean that the days of airline competition in a free market need to be declared over. Not without some debate about antitrust law, it doesn’t.

I wouldn’t be surprised if Southwest, JetBlue, AirTran, Frontier, Virgin America and some of the other formerly low-cost carriers didn’t start pointing out more clearly some of the nuances of antitrust law which seem to be lost in the rush to ensure that the major airlines can avoid more bankruptcies.

I think they, at least, can spell a-n-t-i-c-o-m-p-e-t-i-t-i-v-e.

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More Domestic Cuts at Delta

More than any other U.S. airline, Delta is betting the farm on robust international travel. This summer, 40 percent of Delta’s capacity will be seats flying internationally.

Meanwhile, like other U.S. airlines, Delta continues to shrink domestically.

Delta said today that it now expects to reduce domestic capacity 13 percent in second half of 2008 while “international growth remains on track.”

Delta had previously said it would cut domestic capacity by about 10 percent. As previously announced, Delta plans to remove 15-20 mainline and 60-70 regional jets from service by the end of the year.

Some markets are losing service altogether. Delta’s statement said:

“Delta in December began adjusting domestic capacity in light of record fuel costs. Previously announced route cancellations have included service between Orlando and cities such as Las Vegas; Fort Lauderdale, Fla.; and Little Rock, Ark., as well as nonstop flights between Boston and cities such as Charleston, S.C. and Greensboro, N.C.

“While a small number of additional market cancellations are expected as fall schedules are finalized, most reductions are being achieved through frequency reductions and by eliminating a number of unprofitable routes with particular focus on point-to-point flights that can more profitably and efficiently be served via Delta’s hubs. Sample cancellations, effective late summer, include flights between:

--- Orlando, Fla. and Nashville, Tenn.; Key West, Fla.; Raleigh-Durham, N.C.; Birmingham, Ala.; Columbus, Ohio; Lexington, Ky.; New Orleans, La.; Panama City, Fla.; Richmond, Va.; Louisville, Ky.; and Knoxville, Tenn.;

---Boston and Jacksonville, Fla. and Norfolk, Va.;

--- Las Vegas and Los Angeles;

---Pensacola, Fla. and Fort Lauderdale and Tampa, Fla.

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Virgin America Trouble?

The only time I flew Virgin America was from San Francisco to New York earlier this year. I flew first class; the service was terrific, the seats were far more comfortable than most domestic first class seats, the food was great -- but the back of the plane was half empty.

Those shaky mid-week load factors have always been the big question about this airline, which started flying last August.

I'm rooting for Virgin America. But I don't like what I'm hearing: Unspecified capacity cuts of 10 percent, for one.

And now this, in the usually reliable Guardian newspaper in Britain.

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More Cuts at Northwest

As I said, this just gets worse. We are rapidly approaching a very real air-transportation crisis in this country, which depends on air transportation.

And if you hate the flying experience this summer, just wait till Fall.

Northwest Airlines just announced "reduced flying" for the 4th quarter:

---Systemwide capacity reductions, based on available seat miles: a decrease of 8.5 to 9.5 percent over last year's fourth quarter.

---Fleet reductions: 33 DC-9s, and a combined 14 Boeing 757s and Airbus narrowbodies.

In a statement, Northwest said it "has not yet finalized the specific employee impacts related to the reduced flying. However, vfor the resulting headcount reductions, NWA will first look to voluntary separation programs such as early-outs."

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Airlines to Public: This Ain't No Foolin' Around

I am the first to admit that, whatever public unhappiness might be associated with air travel, the airline industry is in one great, big fat fix -- and there are no easy ways out.

This just gets worse.

Oil at $130 a barrel is one thing. Oil at who-the-hell-knows a barrel is quite another. Airlines are up to their butts in alligators. But the airline trade association, the Air Transport Association, fixed today on one immediate and very-hard-to-pin-down problem: oil speculators. Basically, as David Castleveter, the group's spokesman, told me the other day, the industry needs some firm footing (at whatever level), to make any intelligent plans about how to get a grip on this mounting crisis.

Here's the full ATA report:

WASHINGTON, June 17, 2008 – The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today testified before the Senate Committee on Agriculture Nutrition and Forestry and Appropriations Subcommittee on Financial Services and General Government on the crisis facing the airline industry resulting from record-high jet fuel prices. ATA also called on Congress to act now to impose common-sense measures to ensure transparency and reel back the overwhelming odds now favoring index speculators and institutional investors, particularly those trading on foreign exchanges.

“The impact of these unprecedented jet fuel prices on the airlines is devastating and airlines may see 2008 losses nearing $10 billion, on par with the worst financial year in aviation history," ATA President and CEO James C. May said. “This year, airlines will spend more than $61 billion on fuel, slightly more than the total fuel bill combined for the first four years of this decade.”

May explained the inextricable link between the nation’s economy and the air transportation system and noted that if airlines continue to spiral downward, so too will the nation’s economy. Already more than 14,000 airline jobs have been eliminated and 100 communities have lost scheduled air service, with more job losses and service cuts inevitable. If oil prices continue their upward path, potentially 200 communities could lose all scheduled air service.

May stressed to Congress the importance of urgent, critical oversight by the Commodity Futures Trading Commission over the energy commodity futures market to curtail excessive oil speculation.

“Leading economic and commodities experts around the world believe crude oil prices today are unnecessarily high and distorted due, in large part, to market manipulation and excessive speculation,” said May. “We are asking for Congress to take steps now – not 60 to 90 days from now – to totally close the loopholes and make the market more transparent and balanced, to ensure a level playing field for all.” May concluded, “If Congress does not act soon, this country will not have a viable airline industry.”

ATA airline members and their affiliates transport more than 90 percent of all U.S. airline passenger and cargo traffic. For additional information about the industry, visit www.airlines.org.

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