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Aviation Industry Updates: November 1, 2022

By November 1, 2022November 8th, 2022Industry News

Delta Pilots Overwhelmingly Vote to Authorize Strike

  • Delta Air Lines pilots overwhelmingly voted to authorize a strike on Monday if a new contract agreement with the carrier is not reached.

  • The Air Line Pilots Association (ALPA), which represents the pilots, said 99 percent voted to call a strike if necessary, with the vast majority of its members participating.
  • “Today, Delta’s nearly 15,000 pilots sent a clear message to management that we are willing to go the distance to secure a contract that reflects the value we bring to Delta Air Lines as frontline leaders and long-term stakeholders,” said Capt. Jason Ambrosi, who chairs Delta’s pilot union.
  • The union on Monday said its pilots are working under a contract negotiated in 2016, and discussions about a new contract that began in April 2019 have not borne fruit.

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Breeze Airways Announces Numerous Route Cuts

KEY POINTS:

  • The young Breeze Airways will be suspending many of its routes through early December as it anticipates a significant decline in demand. The airline will also cancel one of its transcontinental routes connecting Charleston International Airport (CHS) and San Francisco International Airport (SFO). The route has seen multiple suspensions since it launched earlier this year. The rise in route suspensions is likely the result of several factors.
  • The route between CHS and SFO will be terminated on January 4th. When it was launched in May, the airline was ecstatic about the route that would connect one of its East Coast hubs to the West Coast. Flown on an Airbus A220, the route has seen several suspensions throughout the year due to a lack of consistent demand. While currently operating, it will be once again suspended; this time, the suspension will begin in early November and persist through the first half of December.
  • A second route that the airline will terminate is the Tulsa International Airport (TUL) to Nashville International Airport (BNA) route. This route was initially scheduled to be terminated in January along with the SFO to CHS route. However, the termination date has been moved to late November as the airline does not expect sufficient demand through the holidays for this route. This will end all Breeze services to TUL until March when it plans to launch a TUL to Orlando International Airport (MCO) route.
  • In addition to the two routes scheduled for extermination, 13 additional routes will undergo temporary suspension in early December. From December 1st to the 14th, Breeze flights between Tampa International Airport (TPA) and SDF will be suspended. From the 1st to the 15th, flights connecting Provo Airport (PVU) with Los Angeles International Airport (LAX), LAX with CHS, CHS with John Glenn Columbus International Airport (CMH), and CMH with Palm Beach International Airport (PBI) will be suspended.

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The U.S. Regional Airline Industry Is Slowly Shrinking

KEY POINTS:

  • The U.S. regional airlines play a critical role in the nation’s air transportation system. While a few fly as their own brand, most capacity in this industry flies as feed for a larger carrier like United or Delta. A customer may buy a ticket on Delta, but board a flight operated by Republic airlines, for example. The big airlines pay for this feed by paying the regional airline, often on a “cost plus” basis. Over the last five years, the regionals have flown over 70 million passengers in the U.S.
  • The regionals are under lot of pressure, however. Water flows down hill, and for the regionals this means that pilot availability issues are most critical here. Mesa Airlines, a large regional flying for multiple U.S. airlines, may need to file for bankruptcy protection and may cancel their agreement with American Airlines. Even while total U.S. airlines fortunes look promising, for a number of reasons this sector of the industry is likely to shrink over the next few years.
  • If the only structural cost change happening for the regional airlines was in the pilot ranks, it’s possible this could be absorbed by the major airlines or mitigated in other ways. But this industry is facing labor issues for all kinds of roles, and yet they fly smaller planes that make this especially difficult.
  • The U.S. low-cost industry, led by airlines like Spirit, JetBlue, Allegiant, and Frontier, are growing at a much faster rate that than the higher-cost “big four” airlines. As these airlines grow, a larger percentage of the population gets access to low fares and more nonstop service. This growth makes the product that the regional airlines offer less desirable, due to its higher cost for consumers and almost mandatory connecting nature of its services. As the LCCs grow, the regionals will shrink.

Forbes

After 67 Long Years, American Airlines Just Made a Big Change. It’s the Start of the End of an Era

KEY POINTS:

  • Let’s start with the big news, which perhaps you saw last week: American Airlines says it’s doing away with first class. The reason? First class tickets just aren’t selling.
  • As American Airlines chief commercial officer Vasu Raja explained on an earnings call:
  • “First class will not exist on the 777, or for that matter at American Airlines, for the simple reason that our customers aren’t buying it. …
  • [F]rankly, by removing it, we can go provide more business class seats, which is what our customers most want or [are] most willing to pay for.”
  • In fact, according to an internal meeting at American Airlines reported by the airline news site View From the Wing, simply “having a product named first class” had become a problem.
  • That’s because many businesses won’t let their traveling employees buy “first class” tickets, and some of the widely used corporate booking tools wouldn’t even show “first class” fares as an option to purchase. So it makes sense to do as Raja suggests and give up first class seats in favor of more business class ones.

Inc.

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