Airline Weekly Lounge

Skift Airline Weekly Editor Madhu Unnikrishnan caught up with Anders Lindström, Norwegian's director of communications for the U.S., at San Francisco International Airport on Monday when the carrier launched San Francisco-Barcelona flights. Lindström explained why Norwegian is moving some flights from Oakland to SFO, and what routes in the U.S. are doing well for the carrier. He also talked through the third-quarter results and why he thinks the carrier has turned the corner from its tough year.

The UK government this week engages in another set of inquiries on why Thomas Cook went bankrupt, which is the perfect time to ask Skift Europe Editor Patrick Whyte, who has been covering the story, what happened. How did the "booking clerk to the empire" go belly-up after more than 150 years? Whyte explains that the company was struggling under a massive debt load and had struggled with maintaining a large number of travel agencies as booking habits changed. But Whyte noted that parts of the business remain — Condor, in Germany, and the subsidiary in the Nordic countries. European and UK holidaymakers may see fares rise in the short term as airlines backfill the capacity hole left by Thomas Cook's bankruptcy, but Whyte believed the capacity shortfall would be filled by next summer. 

Back in the aughts, Airlines for America's Chief Economist John Heimlich often showed a slide with an alarming statistic: Coffee giant Starbucks' market capitalization was more than that of the entire U.S. airline industry combined. So much has changed in the last 10 years, as the airline industry recovered from the 9/11 terrorist attacks, SARS, and oil prices of $148 per barrel, among other trials and tribulations. Skift Airline Weekly Editor Madhu Unnikrishnan and Heimlich had a chance to catch up at the Boyd Group's International Aviation Forecast Summit in August. Unnikrishnan reminded Heimlich of that slide and asked him if those turbulent times could return. Heimlich explained how the industry has changed: different management, improved aircraft technology, and consolidation being among the most important factors. But he warned that the airline industry is uniquely exposed to exogenous shocks, like geopolitical turmoil, weather, and the price of oil. The airline industry is continuing to evolve, with new aircraft technology, like the Airbus A321 XLR, making low-cost, long-haul a better business proposition, Heimlich said. But will anyone crack that low-cost, long-haul code? And what about small-community air service in the U.S. and Canada, now that airlines have retired or are in the process of retiring their smallest aircraft?

In this episode of the Skift Airline Weekly Lounge podcast, Skift Travel Senior Aviation Business Editor Brian Sumers and I discuss the interviews we did on stage at Skift Global Forum in New York City, Sept. 18–19. Air France/KLM CEO Ben Smith told us how he's trying to rationalize and simplify Air France's network (while leaving KLM largely alone). American Airlines Chief Financial Officer Derek Kerr promised the carrier would recover from a difficult summer. And Delta CEO Ed Bastian spoke about transforming the airline into a trusted global brand. Sumers and I chew on our conversations at Skift Global Forum and wonder just why Smith's favorite aircraft is the B747.  —Madhu Unnikrishnan, editor, Skift Airline Weekly  

Andrew Watterson, Southwest's chief revenue officer, had a few minutes to talk  to Skift Airline Weekly Editor Madhu Unnikrishnan and Skift Travel Senior Aviation Business Editor Brian Sumers at the Boyd Group's International Aviation Forecast Summit in Las Vegas last month. Watterson still is bullish on Hawaii and says Southwest will expand its service to the state from California. He explained why Southwest pulled out of Mexico City and how its international network is optimized to take U.S. residents to Mexican and Caribbean leisure destinations. Watterson also explained that Southwest is seen as a leisure carrier in the Eastern half of the country and a business carrier in the West.

Rosemary Vassiliadis, director of aviation for Clark County, Nevada, leads operations at Las Vegas McCarran International Airport and oversees four other airports in southern Nevada. Vassiliadis thinks airlines are flat wrong in their opposition to raising the passenger facility charge, or PFC. Airports have long argued for raising this fee to a maximum of $8.50 per passenger, up from $4.50 today, but airlines say doing so would crimp demand for travel. This isn't true, Vassiliadis argued in this interview, pointing to the many — and higher — ancillary fees that airlines already levy that haven't dampened demand. Airports are pushing for the increase, ultimately, in order to better serve the passenger, she noted. Vassiliadis also told Skift Airline Weekly about McCarran's new air service and plans for a new airport on the California-Nevada border.  

Hawaiian Airlines CEO Peter Ingram isn't too worried about increasing competition from U.S. and Japanese carriers on routes to Hawaii. During an an interview with Skift Airline Weekly Editor Madhu Unnikrishnan in Las Vegas on Aug. 26, Ingram said  Hawaiian has been competing fiercely on those routes for 90 years, so this is nothing new, Ingram said. What is new, at least since Aloha and Go went bankrupt, is competition on inter-island routes. Southwest recently began flying limited routes between the Hawaiian islands, but Hawaiian's deep routes in the community, its long history serving what Ingram calls "the neighbor islands," and the frequency of its routes will stand it in good stead. Ingram also admitted that he may be among the 717's last defenders, and argues that the airframe's engineering is perfectly suited to Hawaiian's needs. To hear more, listen to this week's episode of the Skift Airline Weekly Lounge.

AirBaltic was an early adopter of the Airbus A220, back when it was the Bombardier CSeries. The aircraft is perfectly designed for the Baltic carrier's missions, and CEO Martin Gauss is enthusiastic about the model. He took a few minutes to talk to Skift Airline Weekly editor Madhu Unnikrishnan and Skift Senior Aviation Business Editor Brian Sumers at the IATA Annual General Meeting in Seoul in June. Gauss said for now AirBaltic's focus is on its region of Latvia and neighboring countries, and the airline has no plans to establish bases in Western Europe. Gauss, however, pointed to the example of Finnair, which, like AirBaltic, has a small home population but outsize international traffic. This is the kind of operation he thinks AirBaltic can grow into. Listen for the full interview with AirBaltic CEO Martin Gauss:

Just before stepping down as CEO of British regional carrier Flybe, Christine Ourmieres-Widener took a minute to talk to Skift Airline Weekly at the IATA Annual General Meeting in Seoul. Ourmieres-Widener’s two years at the helm of Flybe were tumultuous, she acknowledged, and culminated with the carrier’s acquisition by Virgin Atlantic. But she noted that she focused on saving the airline and getting it back on its feet, even if that meant selling it. And she pointed out that her first priority was saving jobs, and of that Ourmieres-Widener said she’s very proud. With Ourmieres-Widener’s departure, the already small circle of women airline CEOs gets even smaller. She said the industry has to do better to attract and mentor young women as they rise through the ranks. She also said efforts have to begin earlier — at school, to encourage girls to study STEM (science, technology, engineering, and math) subjects. Listen for the full interview with Skift Airline Weekly Editor Madhu Unnikrishnan

Singapore Airlines CEO Goh Choon Phong said he envies American Airlines CEO Doug Parker for the scale and potential for profitability that U.S. carriers have from a large domestic market. Parker, the chief of the U.S.’s largest carrier, once famously said the era of airlines reporting losses is over. In its most recent quarter, Singapore Airlines reported profit margins lower than analysts expected and lower than the company had previously reported. Much of this is explained by the region in which Singapore operates. Unlike Parker, Goh said his company has no domestic market to provide a valuable feed of passengers to its long-haul routes. Speaking at the inaugural Skift Forum Asia in Singapore in May, Goh said he is confident that the company is headed in the right direction. The group is taking steps to keep so-called CASK (costs per airline seat kilometer) down by, among other measures, hedging against fuel price volatility and managing fleet leases. Listen for the full interview with Skift Airline Weekly Editor Madhu Unnikrishnan.