3 min read

Aviation Industry Updates: March 21, 2023

James Onieal : Mar 21, 2023 1:01:40 PM

Industry News Export

Is United’s Quarter Loss a Strategy To Temper Pilot Contracts?

KEY POINTS:

Put simply, a pilot contract matching what Delta and American are offering to their pilots would add significant labor expenses. So could it be that the strategic decision to revise the Q1 forecast from profit to loss could be aimed at ensuring that, at the very least, pilots at United do not demand an even more lucrative contract than Delta?
“Accruing expense” is arbitrary. While United CEO Scott Kirby apologized for the unintended update, this expense could have been accrued later. In other words, the loss was arbitrary and has negatively impacted United’s stock price. Taking the loss now rather than later in the year could be a strategic move to get the bad news out of the way and then report consecutive quarters of profit and record revenue, but why couldn’t it be a bargaining chip?
“See, we lost money last quarter. The economy is fragile. We cannot afford to pay you what Delta pilots make due to our route network.”

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Frontier Cuts 14 Routes | Pulls Out of 1 City; Latest Network Shake Up

KEY POINTS:

It's not all growth for Frontier Airlines, as the carrier has just quietly filed plans to exit a number of markets.
The Denver-based carrier will cut 14 routes from its network, and it'll also end service to Rochester, New York, on May 8, as first seen in Cirium schedules and Ailevon Pacific data, and later confirmed by a carrier spokesperson.
You'll find the full list of route cuts at the bottom of this post, but Frontier isn't giving much of a heads-up about these adjustments. The earliest route cut will become effective in just over a month, and the affected flights will be phased out through May 10.

The Points Guy

We Just Got A Pilot With A Gear Up Landing Hired At A Major

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JetBlue Reveals March Prepayment Date For Spirit Airlines Merger

KEY POINTS:

New York-based JetBlue will soon be making its March 2023 prepayment to low-cost carrier Spirit Airlines' stockholders, as JetBlue will be paying $0.10 per Spirit share on March 27th. An additional prepayment will be made a few days later on March 31st, and these two payments are part of the merger between JetBlue and Spirit Airlines.
At the end of the day, the Department of Justice could be asking JetBlue to sacrifice its Northeast Alliance with American Airlines before allowing the merger to happen. But seeing as how the New York-based carrier has been fighting the legal block, compromising might not be a choice it wishes to make.
But should the merger eventually bear fruit after all these legal issues are hopefully solved, JetBlue and Spirit Airlines will have an estimated 9% market share, which would still be much smaller than the big four US carriers.

Simple Flying

US Airlines Lobby To Restrict Foreign Airlines From Using Russian Airspace

KEY POINTS:

The ban on Russian airspace doesn’t apply to all flights to and from the United States, but rather applies to flights operated by US airlines, as well as flights operated by foreign airlines that US airlines codeshare on. Airlines from China, India, Qatar, Saudi Arabia, the United Arab Emirates, etc., can all fly to the United States via Russian airspace.
US airlines are now lobbying to get these airlines banned from Russian airspace, requiring that they take the same routes that US airlines do. The logic is that this puts US airlines at an unfair disadvantage, both in terms of costs and passenger demand.
For example, Air India can operate a flight from Delhi to New York a couple of hours faster than American and United can, while Air India can operate a flight from Bangalore to San Francisco, while United can’t, due to the distance a plane would have to fly while avoiding Russian airspace
In a bipartisan letter sent to the Biden administration in late February, Senator Robert Menendez (a Democrat) and Senator James Risch (a Republican) urged the government to ensure that no commercial airlines overfly a Russian territory when arriving or departing from a US airport. As you’d expect, this is being supported by US airlines through their Airlines for America lobbying group. Airlines for America estimates that this is causing US airlines to lose $2 billion in market share annually.

One Mile At A Time

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