Archive for May, 2008

  • Our leading Daily Departure is an item from the Wall Street Journal (hidden behind the firewall). Deloitte reports that British Airways and BMI have added the value of their precious slots at crowded European airports to their balance sheets as assets. According to the report, a pair of slots at Heathrow (one for coming, one for going) are worth up to £25-30 million. With London airport capacity strained and with Open Skies increasing demand for slots at Heathrow, these slots are likely to grow in value.
  • Congressman John Mica (R-Fla.), a powerful Transportation Committee member, has said that the Delta-Northwest merger is likely to be approved. [Aero-News.Net]
  • The company managing highly-regarded Vancouver International Airport is bidding for the fifty-year contract to run Chicago’s Midway Airport [Globe and Mail]
  • Three years on, US Airways finally has all its ramp workers and baggage handlers on a single contract. The pilots? That’s another battle. [Today in the Sky]
  • Holly Hegeman advances some merger speculation regarding Southwest Airlines and its surprising $600 million. [PlaneBuzz]

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Herb Kelleher, the legendary founder of Southwest Airlines, proponent of low fares, and friend of deregulation, delivered the Charles A. Lindbergh Memorial Lecture tonight at the National Air and Space Museum in Washington, D.C. He reflected on his long career in aviation, on the fundamentals of Southwest, and offered a few comments about the future of the airline industry. As usual, Kelleher’s lecture was full of humor — most of it at his own expense.

Kelleher recounted a number of critical moments in Southwest’s history, from the four years of litigation just to get started to the fight to operate out of Dallas’s Love Field. When Southwest launched with $26 fares, its competitors undercut the price by half. Kelleher said that he would still offer the same fare, but that every customer would get a bottle of whiskey. “We became the largest liquor distributor in the state of Texas!” he chuckled.

Even though almost all the major airlines opposed deregulation, and although observers thought Southwest would get stomped in a competitive environment, Kelleher said, “Southwest Airlines supported deregulation of the airline industry throughout the 1970s.” A sign of deregulation’s success? When Southwest launched, only 15 percent of American adults had been on a commercial airline flight. Today, 85 percent have, although this is not only due to lower fares but also a growing economy and general better standards of living. (more…)

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Greenhouse gas emissions from domestic commercial aviation have fallen 13 percent between 2000 and 2006, according to recently released figures from the Environmental Protection Agency. I blogged about a USA Today article on this report last week, and I finally tracked down the original, cleverly obscured on the EPA website. (The aviation-relevant sections are here and here.) The pattern of greenhouse gas emissions from aviation mirrors consumption of fuel. Carbon dioxide is by far the most common greenhouse gas to be emitted, although relatively small amounts of methane are emitted , especially during takeoff and landing, along with nitrous oxides. (Newer engines have to comply with EPA rules limiting nitrous oxide emissions.)

Energy Information Administration; Environmental Protection Agency

The relationship between jet fuel consumption and all aviation emissions (including general aviation and military flights) is even more closely mirrored.

But did emissions fall just because of the 2000-2001 recession and September 11, both of which did a number on the airline industry? That is not clear. As the chart below shows, with the exception of a post-9/11 slump, passenger totals grew even as emissions declined: (more…)

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  • If it can get slots, Virgin America’s next destination will be Chicago O’Hare. [Today in the Sky]
  • China unveiled the newly formed state-owned firm, CACC, that will construct that country’s large jets. See here for background. [Xinhua]
  • Nigeria is acting to modernize its aviation sector. See this WSJ article for background on West Africa’s flying woes. [Aviation Safety Network]
  • The European Commission has OKed the “grey market” in airport slots that has long been a feature of congested hubs like Heathrow. [ATW Daily News]

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[Alfred] Kahn and the [Civil Aeronautics Board] were facing not just one but three airline mergers in the summer of 1978. In addition to the battle for National, Continental Airlines and Western Air Lines had filed for approval to merge, and two local service carriers — North Central Airlines and Southern Airways — also wanted to combine forces.

Kahn was deeply troubled by all this merger activity. After all, the CAB has in practice given carriers virtual carte blanche to serve any domestic markets they wanted. “This is the last time in the world anyone needs to merge to gain new routes,” the CAB chairman told a reporter later that summer. “We are strongly motivated to let anyone fly wherever they want. But instead of grasping the opportunities we’re offering, this disease, this psychology, is getting abroad that airlines ought to merge.”

— Barbara Sturken Peterson and James Glab, Rapid Descent: Deregulation and the Shakeout in the Airlines (New York: Simon and Schuster, 1994).

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One of my favorite blogs, Strange Maps, posted an entry I submitted — Swiss International Airlines’s map of its American destinations, which is gloriously ill-informed about American geography. Apparently Hudson Bay is now a landmass, Sacramento is in Nevada, Memphis swapped places with Chattanooga, and . . . the errors continue. Just look at the map below. As a commenter on the blog noted, “Wow, this is almost beauty-pageant-contestant bad.”

I just hope Swiss’s navigational charts are correct, or else flights to “Pittsburg” better be equipped with pontoons.

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According to an article in USA Today, an EPA report indicates that the U.S. commercial aviation industry, despite having expanded substantially since 2000, has reduced its greenhouse gas emissions by 13 percent. I’m trying to track down the EPA report (which is not readily available online) to probe these numbers further.

These findings dovetail with testimony provided by the FAA at Tuesday’s hearing on aviation emissions. Even so, I was surprised at the news. I suppose I shouldn’t be — airlines have a huge financial incentive to emit less by using less fuel.

I’ll write more about this soon.

UPDATE: Found it!

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I recently recorded a podcast with Addison Schonland of IAG. Click here to listen!

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At 2:30, the Senate voted down a cloture motion on the FAA reauthorization bill amendments offered by Senator Jay Rockefeller (see here). Majority Leader Harry Reid deployed a procedural tactic to prevent any amendments he didn’t approve, and, as promised, Republicans mustered forty-two votes (two more than necessary) to keep the Senate from ending debate on the legislation.

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The House Aviation Subcommittee is holding a hearing today on the environmental impact of aviation, especially emissions. I won’t be able to cover the entire session, but I’ll give you what I can.

Representative Jerry Costello (D-Ill.) offers his opening statement. He emphasizes that the need to reduce emissions is a corollary of the need to increase fuel efficiency for financial reasons. He is interested in hearing about alternative fuels. “We provided historic levels of funding” in HR 2881 to improve environmental performance, upgrade air traffic control, improve efficiency, and support aviation research.

In light of the European Union’s emissions-trading scheme (ETS), he says, “due to the global nature of aviation, any effort to reduce emissions must be done through ICAO” without affecting economic growth.

Ranking Member Tom Petri (R-Wisc.) praises recent technological achievements that will improve fuel efficiency. Raises concern that including U.S. airlines in European ETS would violate the recently-signed Open Skies agreement.

Panel I

Costello introduces the first panel. (more…)

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