Delta Air Lines Inc Archives

Southwest Airlines cuts revenue forecast

26 June 2024
by admin

A Southwest Airlines jet is parked Ellison Onizuka Kona International Airport at Kehole awaiting passengers on January 20, 2024 in Kailua-Kona, Hawaii.

Kevin Carter | Getty Images

Southwest Airlines shares fell roughly 4% in premarket trading Wednesday after the carrier cut its second-quarter revenue forecast, citing changing booking patterns.

Southwest expects revenue per available seat mile, the amount the airline brings in for every seat it flies one mile, will fall between 4% and 4.5% in the second quarter over last year, after previously estimating a 1.5% to 3.5% decline.

It also said its unit expenses, excluding fuel, would be up as much as 7.5% over the year-earlier period, after previously expecting no change.

It said its capacity would rise as much as 9% instead of the flat growth it had previously expected in how much it flies.

Southwest still expects record quarterly operating revenue in the second quarter.

Airlines are raking in record numbers of passengers but higher costs and growth in capacity have weighed on fares and profits.

“The reduction in the Company’s RASM [revenue per available seat mile] expectations was driven primarily by complexities in adapting its revenue management to current booking patterns in this dynamic environment,” Southwest said in a filing.

Other carriers like Delta and United, meanwhile, have been enjoying passengers’ return to international travel and have invested heavily in travelers’ willingness to pay more for roomier seats.

Southwest is under activist investor pressure from hedge fund Elliott Management, which has called for CEO Bob Jordan and Chairman Gary Kelly to be replaced, saying the company is underperforming and needs a change at the top.

The Dallas airline has expressed confidence in its leadership and reiterated that it is considering revenue initiatives like seating assignments or premium seating, which would be massive changes to the company’s simple business model that has been profitable for most of the last five decades.

“We will adapt as our customers’ needs adapt,” Jordan said at an industry event hosted by Politico earlier this month.

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Science & Environment

United Airlines starts serving passengers personalized ads on seat-back…

7 June 2024
by admin

Passengers on a Boeing 737 Max-8 plane during a United Airlines flight departing from Newark Liberty International Airport (EWR) in Newark, New Jersey, US, on Wednesday, March 13, 2024.

Bing Guan | Bloomberg | Getty Images

Now playing on United Airlines‘ seat-back screens: personalized ads.

The carrier on Friday said it launched a media platform to serve travelers personalized advertisements on seat-back screens and in its app, among other platforms, as it seeks to leverage customer data.

United said its new platform, Kinective Media, is already working with Norwegian Cruise Line, Macy’s, IHG Hotels & Resorts, TelevisaUnivision and JPMorgan Chase, which offers a host of co-branded credit cards with United.

The platform is the latest example of airlines trying to drum up new lines of revenue and leverage their lucrative loyalty programs. Delta Air Lines said in early 2023 that it would start offering free Wi-Fi to customers if they were registered members of its SkyMiles frequent flyer program.

“Unlike some commerce media platforms, United gives brands across a wide range of industries the ability to reach engaged customers throughout the entire marketing funnel — from brand consideration to conversion — in a way that’s highly personalized and relevant, and we’re already seeing impressive results,” Richard Nunn, CEO of United’s MileagePlus loyalty program, said in a news release.

United declined to provide projected sales from the initiative.

Customers can opt out of seeing targeted ads through a United web page, and United says advertisers can’t access customers’ personally identifiable information, the airline said.

“There is the potential for 3.5 hours of attention per traveler, based on average flight time,” United said.

The airline is in the midst of a massive upgrade of its narrow-body cabins, including its in-flight entertainment system with new screens and other features, though supply chain problems have delayed some of the aircraft revamps.

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Science & Environment

Frontier Airlines does away with change fees in budget…

17 May 2024
by admin

A Frontier Airlines plane lands at the McCarran International Airport in Las Vegas on Feb. 27, 2020.

Elizabeth Page Brumley | Tribune News Service | Getty Images

Frontier Airlines said it will stop charging customers a fee to change their flights, taking a page from larger competitors as the Biden administration issues stricter rules targeting so-called “junk fees.”

The change is part of an overhaul announced on Friday of the budget airline’s longtime pricing model, which brings customers in the door with eye-catching low base fares but charges a fee for everything else such as seating assignments and carry-on baggage. That model is shared by fellow discounter Spirit Airlines.

Frontier said it will start offering packages that include some of those add-ons, among others, such as early boarding. While some fares will still allow travelers to add on options a la carte, “we expect that option to be a minority of customers,” Frontier CEO Barry Biffle told CNBC.

A new “economy” bundle that comes with a carry-on and a seat assignment will start at $30 more than a basic fare, while a “premium” bundle that offers those perks plus earlier boarding will be $50 more than the basic fare. For at least $100 more than a basic fare, “business” bundle travelers will also be able to check two bags and get a seat at the front of the plane with more room.

Last month, the U.S. Department of Transportation issued a final rule that requires airlines to tell customers about fees, including those for checked or carry-on baggage, up front, a change the DOT said would save travelers more than half a billion dollars a year.

Frontier currently charges up to $99 to change flights if the change is made within a week of the trip, according to the airline’s website. Larger rivals Delta, American and United scrapped change fees during the Covid-19 pandemic for travelers who were booked in standard economy class and above. Southwest Airlines does not charge customers to change their tickets.

“The truth is the big four [U.S. airlines] all have no change fees on the majority of their products, so we were not as desirable,” Biffle said. He said change fees were a “top complaint” of travelers. Travelers who buy the cheapest option on Frontier will still have to pay to change their flights.

Frontier also said flight credits would be valid for 12 months, up from three months, starting with tickets issued on Friday, and that it will reintroduce live phone support for travelers flying within 24 hours or to elite members of its frequent flyer program.

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Science & Environment

Eclipse flights swarm airports: ‘We had to close the…

8 April 2024
by admin

An airplane passes during a partial solar eclipse seen from Queens, New York City, U.S., April 8, 2024.

Andrew Kelly | Reuters

Monday’s solar eclipse is giving some of the country’s smaller airports their moment in the sun.

The Federal Aviation Administration reported arriving flights at airports from Burlington, Vermont, to southern Illinois were briefly halted Monday morning ahead of the total eclipse.

Such disruptions are routinely caused by bad weather and heavy traffic in big-city hubs, but high demand for prime views of the phenomenon jammed some smaller airports on Monday. The best views of the solar eclipse in the U.S. span from Texas through Illinois, Kentucky and Ohio to northwestern New York and Maine, according to NASA.

Passengers and crew take a photo wearing solar eclipse glasses aboard Southwest flight 1252 from Dallas, Texas to Pittsburgh, Pennsylvania which passed through the path of totality on April 08, 2024 in Dallas, Texas.

Justin Sullivan | Getty Images

FAA traffic adjustments give airports time to catch up and avoid airplane parking jams on the ground.

“We had to close the runway to park planes,” Alyssa Connell, head of operations at Southern Illinois Airport in Murphysboro, Illinois, told CNBC. The airport, which has three runways, took reservations for eclipse flights and on Friday reached its maximum threshold for 230 small propeller aircraft and about 45 larger jets and larger turboprops. “This is by far the most aircraft we’ve ever seen.”

The Statue of Liberty is seen during a partial solar eclipse, where the moon partially blocks out the sun, at Liberty Island in New York City, U.S., April 8, 2024.

David Dee Delgado | Reuters

Patrick Leahy Burlington International Airport in Vermont is scheduled to receive between 100 and 130 general aviation planes on Monday, said Dave Carman, deputy director of aviation operations. It’s also expecting some scheduled commercial passenger jet traffic.

“It’s the most we’ve seen in a day,” Carman said. “It’s going to be hectic getting out,” he said.

A Southwest flight attendant wears solar eclipse glasses while giving a safety demonstration aboard Southwest flight 1252 from Dallas, Texas to Pittsburgh, Pennsylvania which passed through the path of totality on April 08, 2024 in Dallas, Texas.

Justin Sullivan | Getty Images

The eclipse was called out as a major event on the FAA’s morning planning call at its command center in Warrenton, Virginia, according to an agency spokeswoman. Other common obstacles include presidential travel, severe weather or major sports and entertainment events.

The FAA had previously warned pilots about possible disruptions and heavy traffic at a host of airports on or near the eclipse’s path.

Delta Air Lines sold special eclipse flights during which passengers could view it from the sky, one from Dallas/Fort Worth International Airport to Detroit and another from Austin, Texas, to Detroit.

A passenger wears solar eclipse glasses as she looks from a special Delta Airlines eclipse flight over the skies of the U.S., April 8, 2024.

Leonardo Benassatto | Reuters

Other airlines have called out flights that could offer views of the eclipse along the “path of totality.” United Airlines said bookings to San Antonio more than doubled around the eclipse compared with the same dates last year and surged in Cleveland and Little Rock, Arkansas.

The eclipse is expected to be a boon for hotels, house rentals and other businesses as tourists swarm in.

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Southwest Airlines cuts revenue forecast

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United Airlines starts serving passengers personalized ads on seat-back…

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Frontier Airlines does away with change fees in budget…

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Eclipse flights swarm airports: ‘We had to close the…

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