Trend Watch: Airline Take-up of Live Television/Connectivity Grows

The adoption by US carriers of in-seat live satellite television – together with connectivity services - is growing leaps and bounds.

This trend is “really exciting”, says Panasonic director of strategic product marketing David Bruner. “The US market could end up in the next couple of years with a totally different experience when you get onboard the airplane than what you saw a couple years ago.”

A strategy launched at inception by JetBlue Airways through its LiveTV subsidiary is being copied on a broad scale. Frontier and WestJet are long-time customers of LiveTV’s in-flight television system. Continental Airlines recently announced plans to install LiveTV across a large portion of its Boeing narrowbody fleet.

Delta Air Lines, through its Song experiment, followed JetBlue's lead when it began offering Panasonic Avionics-manufactured in-flight entertainment (IFE) systems – with live television – onboard domestic flights. It later announced it would extend the offering to its entire transcontinental fleet.

Start-up Virgin America, meanwhile, offers television and (video on demand) VOD onboard its Airbus A320s.

Added to this, JetBlue, Frontier and Continental have all gone public with plans to offer connectivity over LiveTV technology, while Virgin America plans to offer AirCell connectivity.

That the combo of live television and connectivity is proving hard for carriers to resist is evident by the number of requests for quotations (RFQs) in the market right now, say Bruner.

Although LiveTV intends to offer live television and light connectivity to airlines, Panasonic is going a different direction. In addition to television and VOD, the company is offering satellite-based “full Internet connectivity and the broadest broadband in the world”.

A customer has not yet been announced but Panasonic is confident installations will begin on a US airline by year-end. “The airlines are now very focused on not what is the cost of the system, but what is the net cost of the system if it generates revenue. It may pay for itself and make its customers happy and bring you more customers. That's a positive thing,” says Bruner.

So are the Canadians next to introduce connectivity? As mentioned earlier, WestJet's aircraft are equipped with LiveTV. Air Canada, on the other hand, offers Thales IFE.

(Photo above right of JetBlue's LiveTV system)

Shit Or Get Off The Pot: Post-bankruptcy Majors Said to be Merger Sniffing Again

As reports surfaced today that Delta Air Lines is once again in the merger market, who among us felt a rather nauseating case of déjà vu? One need only Google the words “Delta merger” to see just how much ink has been wasted on the “will they/won’t they” debate (arguably first started when US Airways made an ultimately failed bid for Delta). Is anything different this time around? Possibly!

First of all, if reports hold true, Delta has whittled its choices down to two other post-bankruptcy US majors – Northwest Airlines and United Airlines (hey, at least they all have something in common). The former is a partner with Delta in the SkyTeam alliance, and has been rumoured to be a likely match for quite some time.

Star Alliance member United, on the other hand, is the same United that Delta CEO Richard Anderson rejected as a would-be partner in November.

“There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions,” Anderson said at the time, following calls by common shareholder Pardus Capital management for the two US carriers to consolidate.

Delta’s pilots feel pretty convinced that management is seriously considering a merger this time around. The Delta chapter of the Air Line Pilots Association (ALPA) has written a veritable treatise to members discussing just how calmly they’re going to handle the news - open a strike operations center and mobilize the strike preparedness committee.

Should anyone assume that Delta’s pilots are flatly against a merger, the union assures that “the flexible nature” of the strike preparedness committee will also allow union officials “to task them in support of a consolidation effort - but if and only if it is the right consolidation, a merger opportunity that provides the Delta pilots with the protections and equity we have communicated so clearly and unambiguously from the outset”. Well that’s a mouthful indeed. But the message seems rather clear – you’re not doing anything without our stamp of approval.

It’s a message that American Airlines’ pilots union, the Allied Pilots Association, made loud and clear to management in December 2006. At that time, APA officials approved a resolution to oppose any future company merger that would integrate another pilot group into the employee group’s seniority list. American in April 2001 acquired TWA’s assets. Merging the two carriers’ pilot seniority lists proved a thorny issue during the integration.

Merging the flight attendants’ lists proved a disaster. Thousands of former TWA flight attendants lost their seniority after American acquired the carrier and were furloughed after September 11.

Hoping to ensure that this never happens again, US Senators Claire McCaskill and Kit Bond last month secured a provision to the Senate’s omnibus spending bill – since signed into law - to provide air carrier employees with a base level of protection during mergers. This provision would make it harder for one airline or union to add the employees of another airline or union to the bottom of the seniority list.

Interestingly, the APA did not support the measure. “While this legislation is no doubt well-intentioned, APA does not favour legislative branch involvement in any aspect of labor negotiations,” said APA president Lloyd Hill in a recent statement.

Mega-pilot union ALPA, meanwhile, supports the law, which only applies to mergers going forward. “The legislation does not have any impact on US Airways and America West,” notes an ALPA spokesman. You’ll recall that even though US Airways and America west merged in September 2005, their major labor groups continue to work under terms of transition agreements reached after the merger. You want to talk about thorny!

But despite all the possible headaches stemming from mergers, it seems that major US airlines are hell-bent to come together.

Should Delta merge with current-partner Northwest, it would have access to, among other things, some very nice Boeing 787 delivery slots, some new Airbus narrowbodies and widebodies and a crop of old McDonnell Douglas DC-9s (some as old as 40 years – see one of my first blogs “40 Years Old But Still No Virgin”).

Should Delta opt for a merger with United, it.....SHEESH I'm worn out. Let's tackle this another time. I need a Guinness. Who's with me?

(Photo above right from Delta ALPA portal at http://crewroom.alpa.org/dal/DesktopDefault.aspx?tabid=2421)

American Airlines Mulls Satellite-Based Airborne Connectivity Options

By now it’s well known that American Airlines will test AirCell’s air-to-ground (ATG) broadband solution next year on board its transcontinental Boeing 767-200 aircraft.

But the Oneworld alliance member is also “actively engaged" with connectivity suppliers in the satellite area, says American manager of in-flight communications and technology Doug Backelin.

You may recall that American was one of three US majors, including Delta Air Lines and United Airlines, to sign on as equity partners in Boeing’s now-defunct Connexion (CBB) in-flight broadband service. All three carriers pulled out of the project following 9/11.

AirCell can offer ATG service across the USA, and expects to expand to Canada and Mexico. But overseas flights require a satellite link.

“We’re concentrating most of our efforts right now to make the AirCell test a success, but at the same time keeping an eye on satellite solutions, talking to satellite providers,” says Backelin.

Nutter Takes the Cake; Convinces US Airways to Hold-off on Decision to Withdraw Philadelphia-Beijing Plan

Philadelphia’s Mayor-elect Michael Nutter must be a powerfully persuasive guy. He has apparently succeeded where Senators Arlen Specter, Bob Casey and a host of state and local officials have floundered – convincing US Airways to delay a decision on withdrawing plans for offering nonstop service between Philadelphia and Beijing.

“Mayor-elect Nutter has asked us to ‘refrain from taking action’ until he and his staff have time to study the gate issue and we will honor that request,” says US Airways in a statement.

No doubt US Airways is glad he asked. The request could not have been any better timed. For the moment, it relieves US Airways from making good on a threat to scuttle Philadelphia-Beijing service should Delta Air Lines move over to Terminal A-East – which Delta did last night!

Just what remedy might Nutter produce to satisfy US Airways, which claims its international growth is being hampered by Delta’s move?

Previous ideas that have been floated – and ceremoniously rejected by one party or another - include constructing an additional wing, as well as building a brand new terminal at the airport.

Referring to the latter plan, Specter last week said: “Well I don’t know that I’m going to back federal expenditures on a new terminal for Philadelphia with the way that this company [US Airways] conducts itself.”

According to US Airways, Nutter and his team will “evaluate options that would meet the dual goals of expanded domestic gate capacity for new domestic service and dedicated gates to allow US to jointly grow Philadelphia as an international hub”.

It all sounds so simple. And maybe it will prove to be just that.

Does anyone really believe US Airways will give up its China rights, flying in the face of all those Philadelphians who supported its application to the DOT? Or that US Airways will allow Maxjet Airways to slip in and take the authority?

Maxjet has already called on the DOT to investigate US Airways’ threat, and to give the all-premium operator back-up authority to fly Seattle-Shanghai.

From The Horse's Mouth: US Airways Confirms Plan To Scuttle Philadelphia-Beijing if Delta Makes Terminal Move

Lest there be any lingering doubt that US Airways has in fact threatened to scuttle plans for serving Philadelphia-Beijing, the carrier released the following statement to employees:

“…The Philadelphia Inquirer reported on Wednesday [November 7] that US Airways may give back its authority to fly PHL-China because international gates may not be available. This is the result of decisions by PHL airport officials to boost domestic flying in Terminal A at the expense of international operations.

“These news reports are true, and may become an unfortunate reality. We’ve told the airport authority, city and Commonwealth officials that if the airport moves Delta domestic flights to three international gates, we will 1) have to reconsider international expansion from PHL next year, and 2) withdraw our authority for PHL-China service that we hoped to begin in spring of 2009.”

“We’ve pledged that we wouldn’t subject our customers or employees to an unreliable international operation again. We haven’t given up. US Airways and Philadelphia worked hard to win this award together, and in that spirit of partnership, we hope to find a solution.

“We’ll continue to work for an agreement right up until the time the airport finalizes its decision, and we’ll keep employees posted as these events unfold.”

US Airways’ threat is being made in response to Delta's move tomorrow from Philadelphia’s Terminal E to Terminal A-East, which will make more room for Southwest Airlines at Terminal E, and strip US Airways of three of 16 widebody gates at the international concourse.

Last week, during a heated joint press conference between Senator Arlen Specter and US Airways CEO Doug Parker, the former likened US Airways' threat to extortion. At that time, Parker did not outright confirm the accuracy of the Inquirer's report, but said: "What we have simply said, and very careful to say in a way that we’re not trying to threaten anybody, simply to give facts that if indeed we have fewer gates than we had last summer, not only can we not expand, we are going to have to contract on our international operations."

Delta confirmed today that it plans to move to Terminal A-East tomorrow.

Parking in a Pile: US Airways CEO Faces the Specter of Common Sense

Every now and then, when I emerge from my home office in Lancaster County, outside of Philadelphia, Pennsylvania, I catch a whiff of the Dairy Farm down the road. It’s a powerful scent, but it’s no longer entirely unpleasant. My tolerance for shit, it seems, has increased.

Why then did I find yesterday’s joint press conference of Senator Arlen Specter and US Airways CEO Doug Parker so uncomfortable to watch? Perhaps it’s because a 77-year lawmaker, who has battled a brain tumor, bypass heart surgery and Hodgen’s Disease, with somewhat halting speech was able to back Parker into a corner, and make his carefully tailored explanation for why US Airways is threatening to withdraw plans for Philadelphia-Beijing service seem, well, foul-smelling.

US Airways’ threat, by the way, is being made in response to Delta Air Lines' move next week from Philadelphia’s Terminal E to Terminal A-East, which will make more room for Southwest Airlines at Terminal E, and strip US Airways of three of 16 widebody gates at the international concourse.

It’s a deal struck by Philadelphia a couple of years ago when US Airways was floundering under its second Chapter 11 bankruptcy filing, and made sense for the airport at the time, Parker admits. Now-profitable, the dominant carrier at Philadelphia doesn't quite see the sense anymore. In addition to its warning about Beijing, the carrier says it may have to shrink its entire international operation at Philly, and divert service to its Charlotte and Phoenix hubs.

The most-talked-about moment of the press conference came when Specter – still furious over US Airways’ planned draw-down at Pittsburgh – responded to the carrier's new Phillly threat by saying: “In talking to Mr Parker, I said to him, and I don’t use this word lightly, it sounds like extortion.”

But for me, things turned most interesting at the end.

Asked repeatedly by Specter if US Airways – which claims to have a bevy of solutions to solve the gate problem - has ever in fact offered to give up two or three of its total 67 domestic gates to facilitate Delta’s plans, Parker hemmed and hawed and finally said: “I don’t know that we said that specifically because there are other airlines flying less domestic than we do.”

Specter retorted: “You don’t know. That’s the answer.”

Out of the Tub…JetBlue Overflies Hub

Just as my mother used to push the boundaries of our tub’s capacity by squeezing at least three of her five children in a bath at one time, so too have airlines stretched New York JFK to its scheduling limits. To unmuddy the waters, the US government has vowed to intervene at JFK and is expected to release details of a scheme after meeting with airlines today and tomorrow in Washington DC. Inhabitants at JFK already know what to expect; the FAA last week released a set of proposed schedule reduction targets for peak hours at the facility.

US major airlines, represented by lobbying group the Air Transport Association, hit back today, saying it’s clear the government intends to cut or cap flights rather than to allow the carriers to agree on schedule changes. A calm voice amidst the clatter, however, was a somewhat unlikely subject. JetBlue, which alongside Delta is largely responsible for JFK’s evolution from a international gateway to a domestic hub, said it welcomes the government’s assistance. And one more thing, it’s going to focus on over-flying JFK – meaning, the carrier is going to increasingly avoid it’s own hub by adding point-to-point service down the East Coast such as between Syracuse, New York and Orlando, Florida.

JetBlue CEO Dave Barger says that of the 12 new routes being introduced between November and January, only two – to Puerto Plata, Dominican Republic and St Maarten – will “touch JFK”. Plans are in place to terminate service at Columbus, Ohio (home of no-frills start-up Skybus Airlines) and Nashville, Tennessee, two markets “tied to” JFK. Tied to? Barger's verbiage begs the question: With all the problems at JFK, is JetBlue rethinking its choice of tub? Check out my article at http://www.flightglobal.com/articles/2007/10/23/218864/jetblue-to-axe-columbus-and-nashville-focus-on-jfk-over-flights.html