Flight Blog

 

AMR logoThis morning's news about American Airlines is almost anti-climatic — the airline's parent company, AMR, has filed for Chapter 7 bankruptcy protection. In the past ten years AMR has made a profit only twice. It has lost money for the past three years in a row.

American flies from Springfield to Chicago and Dallas. What does today's news mean for that service? Probably not much. Bankruptcy proceedings in the airline industry are old hat. In the past ten years we've lived through the bankruptcies of United and Delta without a hiccup. American says it intends to do the same—customers should see little, if any, difference. The fact that American has $4.1 billion in cash should help things out...

Based on our analysis of American's service in Springfield, we expect no changes. That being said, we'll definitely be monitoring things closely. I've had more than one person ask why the airlines have such a hard financial time?

It's a brutal, cut throat business, with very small margins. And despite what you hear on the news all the time, the airlines are not making money hand-over-fist. It seems that bankruptcy has almost become an acceptable means of getting an airline's financial house in order. United did it; so did Delta. Both emerged from the process in much better long-term financial shape. The process allowed them to shed costs, and renegotiate labor contracts. American, as you may know, has had a heck of a time making its unions happy.

 

0 Comment(s) | Add comment

Oct 07 2011 Why in the World! BY adminTAGS Fares

 

wingsdollars1Valeri sends us this via Twitter: "Why in the world is it $1500 2 fly 2 Chicago but only $500 to go thru Chicago 2 practically any other city?? Robbery!"

We feel your pain Valeri! You've discovered an aspect of airline economics that I call, "The Business Person Catcha." It works like this... Airlines have historically tended to charge more for two kinds of trips: one-way trips, and two-way trips that do not involve a connecting airport. This second example is the kind of trip you're talking about. Why do the airlines do this? Because trips with these sorts of itineraries are frequently booked at the last minute by business people. Airlines know they're much more likely to pay more $$$. Sometimes savvy frequent flyers try to beat the game.

Here's an example... Suppose someone wants to fly from Springfield to Chicago. Instead of buying that expensive ticket, they buy a ticket for Cleveland that connects through Chicago. When they reach Chicago, they just don't bother with the connecting flight to Cleveland. It sounds like a good way to beat the system, but it frequently doesn't work. When our savvy flyer tries to fly back to Springfield, from Chicago, the airline won't let them on the plane without a ticket change fee. Those fees can be very expensive--easily more than a hundred bucks. What gives? It has to do with what the airlines call, "non-sequential use of ticket segments." If you really want to dive into it, type that phrase into Google. The subject will give you a headache...

To read more generally on this subject, and the Business Person Catcha, try these stories from the New York Times and Los Angeles Times.

FOLLOW-UP, OCTOBER 8, 2011

Valeri responds: "Small biz loses again. Boo. But, I can fly 2 ORD from any other airport around here for $1000 less. Who's fault airport or airline? I just want 2 know who I voice my concern to. The airport and its airlines will suffer because we're all switching to Branson."

Airlines set fares, not airports. Why do fares tend to be higher in Springfield? There are several reasons. Begin with a fact: Springfield is a small air market. Here are some more reasons:

  • Fares tend to be higher in small markets and cheaper in big markets. Remember the economic law of supply and demand? Small air markets have a small supply of seats. Big markets (like Tulsa, Kansas City and StL) have a bigger supply.
  • A bigger supply of seats generally means lower fares.
  • In bigger markets airlines have more competition. Example: three airlines fly to Denver from Kansas City: Southwest, United and Frontier. The competition forces those Denver fares down. Only one airline flies from Springfield to Denver: United. Since it has a monopoly on the Springfield/Denver route, it charges higher fares.

Why are fares sometimes lower at the Branson airport? Since it's a very small air market, shouldn't fares always be higher? The Branson airport is privately owned. As a private business, it has the ability to pay the airlines to fly to Branson. Since the airlines in Branson are being paid to fly there, they can charge a lower fare. The payment from the airport makes up the difference. The Springfield airport, and the bigger airports mentioned here, are publicly owned. It's illegal for publicly owned airports to pay for airline service.

The Branson airport says it's the only privately owned airport in the country with commercial air service. It is, if you will, a grand experiment. If it wasn't paying the airlines, the airlines wouldn't be there; it wouldn't make airline economic sense. Those are the bottom line answers to your questions. I realize you may not care why...you just want lower fares. It you don't know about them already, I'd suggest checking out some tips for finding lower fares. You can find them on the airport website, or try these from Farecompare.

 

0 Comment(s) | Add comment

Sep 29 2011 Airport Wins Safety Award BY adminTAGS Uncategorized

 

Our airport has received the Airport Safety Enhancement Award from the Federal Aviation Administration (FAA). Airport staff received the award Tuesday at the annual Airports Conference in Kansas City. We earned the award by having a perfect score for three consecutive years during the FAA’s annual safety inspection. During the inspections, the FAA checks the airport’s compliance with federal safety rules. Among other things, it reviews runway pavement condition, airfield marking and lighting, the airport emergency plan, the readiness of the airport fire department, and snow and ice removal procedures. Getting a perfect score on the annual inspection is a huge accomplishment in itself. Getting a perfect score three years in a row is testament to the hard work and dedication of airport staff. They truly make our customers’ safety priority one every day.

 

At the FAA awards ceremony. Left to right: Bruce Clegg, Airfield Maintenance Supervisor. Stu Acosta, Supervisor, Aircraft Rescue and Firefighting. Steve Eggers, Airport Operations Supervisor

 

0 Comment(s) | Add comment

 

"Is a bankruptcy filing on the horizon for AMR Corp.?" That's the question put forth this week by the Ft. Worth Star-Telegram.

"The Fort Worth-based carrier has had only two profitable years in the past decade, its stock has slipped to a one-year low near $3 and credit-rating agency Moody's downgraded AMR's outlook to "negative" last week. Some industry analysts think that the company is running out of cash and that a bankruptcy filing is possible. But others say the airline still has another year or two to turn its finances around."

Read the rest of the story here.

 

0 Comment(s) | Add comment

Sep 16 2011 Rare Bird Comes for Bears at SGF BY adminTAGS Misc.

 

We sent the Missouri State Football Bears on their way this morning to Eugene, Oregon. Tomorrow they'll play the Oregon Ducks at Eugene. The type of airplane taking them there is rare around here because the airlines rarely fly them to small air markets like Springfield. So take a good look at these photos of the Boeing 757-200. Go Bears!

 

The 757-200 gets ready to power back from the terminal. Click any image for a larger version.

The 757-200 gets ready to power back from the terminal. Click any image for a larger version.

 

Right this way!

Right this way!

 

0 Comment(s) | Add comment