The U.S. Braces for More Airline Competition. Finally.
The Skift Airline Innovation Report is our weekly newsletter on the business of airline innovation. We look closely at the technological, financial, and design trends at airlines and airports.
Brian Sumers writes and curates the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.
When an entrepreneur plans to start a new U.S. airline, insiders usually laugh.
Even the most successful investors often struggle with airlines, where barriers to entry remain high. Perhaps the outsider has a decent business plan, and a niche that needs servicing. Even then, it’s usually tough, because it’s so difficult to get an airline running and certified. (Just ask California Pacific Airlines.)
But no one is counting out David Neeleman. Reports indicate Neeleman, founder of JetBlue Airways and Brazil’s Azul Airlines, wants back in the United States, and is seeking investors in a startup that may fly point-to-point routes from smaller airports. Neeleman has been gone from the U.S. industry for about a decade, since he was pushed out as JetBlue CEO, and later left as board chairman.
Established airlines could lose share. Brett Snyder, who blogs as Cranky Flier, wrote in a recent post Southwest Airlines may be most at risk since it flies to many airports Neeleman may chose. But what about JetBlue? It still uses much of Neeleman’s playbook, giving passengers an above-average product at decent fares.
I asked JetBlue CEO Robin Hayes about it recently, but he said he’s nether surprised nor worried. “I think David will be successful in whatever he turns his hand to,” Hayes said. “If he sets up an airline in the U.S., we’ll compete with it just as we do with other airlines.”
What do you think? Will Neeleman succeed? And what U.S. airline is most at risk, if he does?
JetBlue Girds for New Competition as Its Founder Prepares to Start a New U.S. Airline: We’re not sure what JetBlue executives are saying behind the scenes. Perhaps they’re terrified at the idea of a new competitor. But publicly, they’re saying they welcome possible new competition from JetBlue’s founder. “In an industry that is dominated by a few very large carriers, it’s so important for customers to have a choice,” JetBlue President and COO Joanna Geraghty said.
JetBlue Eyes Europe and Airbus’ New Jet With Longer Range: For years, JetBlue Airways had an open secret. It was flying transcontinental routes with a jet, the Airbus 320, that couldn’t quite fly from Boston and New York to California, year-round, without a fuel stop. But the airline got by, and over time, it added newer A320s and A321s that don’t have the same problems. We don’t know if JetBlue will fly to Europe, but if it does, it almost certainly will start with the A321LR, an aircraft that could have similar range troubles. But eventually, it could fly an even longer range version of the popular jet.
Cathay Pacific’s Long View on Investing Outside of Its Jets: Skift columnist Colin Nagy acknowledges Cathay Pacific must improve its yields, but he writes that the carrier’s lounge game is impressive. “They feel clean, thoughtful, and far removed from the state of most lounges filled with morning croissant crumbs, luggage scuffs on white walls and bland, robot-made coffee,” Nagy writes.
Video: Why Lufthansa Group Helps Customers From Other Airlines Check In for Flights: Lufthansa Group, through its digital innovation hub in Berlin, developed a platform called airlinecheckins.com. Customers on many airlines — not just those from Lufthansa Group — can check in at the earliest time, and get the best seats. Not all of Lufthansa’s competitors love it, Chief Digital Officer Christian Langer said recently at Skift Forum Europe in Berlin. “Everybody is afraid of losing the touchpoint to the customer,” he said. “Check in is a very good kind of checkpoint because it’s about 24 hours before the flight.”
Video: Ryanair’s Chief Marketing Officer on the Power of Selling Direct: Ryanair Chief Marketing Officer Kenny Jacobs also spoke at Skift Forum Europe, and, predictably, he bragged about the airline’s distribution power. “We have done a pretty good job of protecting our product,” he said. “Other airlines have about 50 percent of their product sales coming from GDS, coming from travel agents, coming from outside their own platform. But everybody is coming in our front door. That’s a big, big asset. That’s what’s driving 2.5 to 3 million web visits a day.”
Airline Restrooms Really Are Getting Smaller and More Cramped: American Airlines has been criticized for putting cramped bathrooms on its new Boeing 737 Max aircraft. But these bathrooms aren’t much different than what other U.S. carriers have been installing in recent years. There’s only so much space on an aircraft, and airlines want to install as many seats as possible. To do that, they need to shrink galleys, closets, and bathrooms. Bloomberg has the story.
American Is Last of Big Three U.S. Carriers to Retire Turboprop Planes: It’s funny. Travelers like to criticize airlines for grabbing cash at all costs, and not worrying about passenger comfort. But the big three U.S airlines have all retired their turboprop fleets, in part because customers don’t like them. Bloomberg’s Justin Bachman has the story.
Air France-KLM Edges Closer to Naming New CEO: Bloomberg is reporting Air France-KLM may name Catherine Guillouard, who leads Paris metro operator RATP, as its new CEO. Not many women head major airlines, so this would be a big deal. But it’s still remarkable Air France-KLM won’t promote KLM Pieter Elbers, who ticks just about every box, except one. He’s not French, and the Air France pilot union doesn’t like that.
Southwest Airlines Will Stop Serving Peanuts in August: Old-timers will remember when Southwest sold “peanut fares.” That made sense for an airline that not only sold tickets cheaply, but also gave away peanuts. But times change, and Southwest is retiring the peanuts, according to Chris McGinnis. Oh, well.
KEEP IN TOUCH
Skift Aviation Business Editor Brian Sumers [email@example.com] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.
Photo Credit: When David Neeleman was pushed out of JetBlue Airways, he went to Brazil to start a new airline there called Azul. Now, he may want back into the U.S. market. Azul Airlines
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July 12, 2018 at 06:05AM