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Monday, October 29, 2007

Quick Takes – DOT, Q400, ATR, Porter, Alaska, ASA, SkyWest

DOT Concluding Late Flight Investigation
The department’s investigation into chronically delayed flights may end in fines, including regional airlines. The six-month investigation began in May and centers on deceptive scheduling practices. Related Story
It focused on flights that were at least 15 minutes late more than 70 percent of the time, and, according to the Associated Press, found 26.
“If any of those 26 flights also were delayed in the most recent quarter being reviewed, the responsible airlines will face ‘significant financial penalties,’ agency spokesman Brian Turmail told AP. The airlines are criticizing the threat saying they have all the incentive they need to do better since delays cost the industry $6 billion annually in addition to customer dissatisfaction. The final report has yet to be issued, according to DOT.

New Orders for Q400 from Europe, Down Under
An unidentified – but new – European customer has ordered 10 Bombardier Q400s, optioning 10 more, while Qantas Airways will be adding to its Q400 fleet in a new order announced last week. Qantas will be acquiring 12 firm and 24 options for the 72-seat Bombardier Q400, subject to a final contract potentially worth $400 million. The aircraft will be operated by the regional network QantasLink in Australia. Geoff Dixon, chief executive officer, said the Q400 aircraft, which offers jet-like speed, improved passenger comfort and lower operating costs, was central to QantasLink’s growth strategy. QantasLink expects to use the new aircraft to increase capacity and frequency on key routes. The airline currently operates seven Q400 aircraft and another two ordered in January 2007 are to be delivered in January 2008.
The undisclosed customer, according to Bombardier, also optioned 10 Q400s but the delivery dates for the firm order have yet to be set. The order brings total firm orders for the Q400 airliner to 264 with 164 delivered as of July 31, 2007. The Q400 airliner is now in service with, or has been ordered by 23 airlines and other operators in Africa, the Asia-Pacific region, Europe and North America.

ATR North American To Relocate Office
ATR North America is planning to relocate its U.S. offices about two miles from its current Herndon facility to a Dulles industrial park minutes from the Washington Dulles International Airport terminal. Its new location, the address of which has yet to be announced, will be at the Loudoun Gateway Business Park just north of the airport.

Porter Airlines at One
Porter Airlines celebrated its first anniversary on October 23 and marked the milestone by recounting its accomplishments since it launched its first flight between Toronto City Center Airport and Ottawa. It has flown 180 million available seat miles on 9,100 flights and in 10,300 hours. On-time performance is 97.1 percent. It now employs 271. It also inaugurated service to Montreal last December and Halifax in June.
“Porter’s success since our launch has been incredibly gratifying,” said Robert Deluce, president and CEO of Porter Airlines. “On behalf of the Porter team, I’d like to extend our thanks to the tens of thousands of passengers who have made the decision to fly Porter over the past year. Together, we have proven that there is demand for air service from downtown Toronto and that Porter is an attractive and preferred option for short-haul flights. We look forward to continuing our commitment to premium service and launching new destinations in 2008 and beyond.”
Porter’s growth continues with the extension of terminal facilities at TCCA and delivery of six new Bombardier Q400 aircraft in 2008, bringing the fleet total to 10. Early next year Porter enters the U.S. market with flights to New York, Boston, Chicago, Washington and Philadelphia.

Luggage Takes Flight
An Atlantic Southeast Airlines aircraft was forced to return to Chicago Midway Airport after indicators showed a problem with pressurization shortly after take off. The aircraft returned to the airport with no injuries to the 70 passengers on board. Ground crews noticed the forward cargo hold, used for valet luggage, was open and all but two pieces of luggage returned to passengers as they deplaned the cancelled flight. The two bags apparently left the aircraft in flight. One has been recovered but the other remains missing. A garment bag was found by a railroad worker at a switching yard less than a mile from the airport. Spokesperson Kate Modolo praised the worker to local press and called the incident “very rare.” The October 21 flight was Atlanta bound. The passengers were re-accommodated and the aircraft ferried to Atlanta for investigation.

Alaska Imposes Fuel Surcharge
Alaska Airlines raised fares between $5 and $10 in order to offset the nearly $100 million in additional fuel cost wrought by the $10 per barrel increase just in the last two weeks. Every $1 increase in the price of a barrel of oil adds $10 million in annual fuel costs for Alaska Air Group before the benefit of fuel hedges.
"With the price of a barrel of crude oil spiking more than 50 percent since this time last year, jet fuel is now our largest single expense, accounting for more than 30 percent of our overall operating costs," said Bill Ayer, chairman and chief executive officer of Alaska Air Group, the parent company of Alaska Airlines and Horizon Air. "Like other businesses, we need to offset at least some of our increased costs."
It is unclear whether or not the price hikes will stick in the hotly competitive markets Alaska services, especially with competition by Southwest which has not followed with increased fares.
Alaska Airlines and Horizon Air continually work to mitigate fare increases resulting from the cost of jet fuel through hedging. Currently, 50 percent of the two airlines' fourth quarter fuel consumption is hedged at $62 per barrel.
Fares for longer flights in the United States and to Canada and Mexico rose $10 each way. Shorter flights along the West Coast, within most of the state of Alaska, and between Southeast Alaska and the Lower 48 went up $5 each way.

United Offers UA Ex Service from LAX
United Airlines will launch new service between its Los Angeles hub and Des Moines, Iowa, and Austin, Texas on February 13 served by United Express SkyWest using Bombardier CRJ 700s with explus(SM) regional service that offers six United First and 60 Economy Plus seating. The new service takes on additional importance since the release had quotes from three of Iowa’s Congressional delegation including both senators and Rep Leonard Boswell, member of the Transportation Subcommittee on Aviation, and plugged the increased connections between Iowa and Asia and Hawaii. As part of its winter schedule change, United will also add an additional daily roundtrip flight between Los Angeles and Baltimore, Oklahoma City and Vancouver.

Monroe County Nixes DL Payout
The Key West Citizen reported that the $500,000 profit guarantee promised Delta for Atlantic Southeast, Delta Connection service to Marathon will not be paid because the airline dropped the service and breached its contract. Related Story Although Delta was guaranteed minimum revenue of $5,100 per flight, the county had not yet made a payment.
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