Well, That was Fast...

Just a day after announcing that it planned to buy out Frontier, opening the door for a possible exit from bankruptcy, Republic Airways decided to purchase a second carrier, Midwest, from TPG Group for the princely sum of $31 million. This was down just slightly from the roughly $450 million TPG and its partners (including Northwest) paid for Midwest less than two years ago. And then today, Frontier announced that it will make schedule changes, adding mainline frequencies to several mostly leisure markets, as well as frequencies on Lynx to Salt Lake City, Omaha, and Albuquerque. Service to El Paso and Grand Junction, however, will be discontinued in September. This latter move is welcome, and a possible sign that the market may have bottomed or is coming close to bottoming. For an airline to add new flights during the fall months, let alone in the midst of a recession, is impressive. Obviously, it's anyone's best guess as to whether the new flights will be successful, and the stiff competition they will certainly face from Southwest can't help.

But let's examine the first move more closely. Republic essentially bought what has quickly become an airline in name only. Midwest is rapidly retiring its 717s, and plans to continue to do so even after yesterday's announcement. Instead, Midwest will use E-170s and E-190s operated by a little-known carrier called Republic, an arrangement in place well before yesterday's buyout. So why bother buying Midwest? Aside from being able to exert greater control over their lift, and being able to purchase a well-respected brand for a bargain price, there doesn't seem to be as much point to this move as there did with Frontier. At least Frontier is a well-regarded carrier which has managed to hold its own, if not expand (the announcement above notwithstanding), in the face of Southwest. Although it has adopted a more proactive attitude towards charging for services, Frontier hasn't taken away seat pitch, assigned seating, or onboard television, which are its signature amenities. But Midwest, although it has a well-respected brand, has significantly cut back on its amenities and service as a way to compete, adding more seats to its planes and drastically reducing its onboard food service.

At the end of the day, unfortunately, Midwest simply can't cut it against a strong Delta/Northwest and a nimble carrier with extremely low costs, AirTran. Midwest is bleeding money, unlike Frontier which has reported some small, but significant, profits. Republic's purchasing of Midwest will do little to change the situation at that carrier. Republic has not announced any major operational or strategy changes, and I fear that the end could be near as a result. Service will continue to suffer in the wake of cost cuts, and smaller jets will become uncompetitive in the marketplace since they have higher ASM costs than the larger 717s and 737s which AirTran operates. Many of the routes Midwest services have competing AirTran service, which is cheaper for customers and actually makes money. Midwest should have died long ago, absorbed as part of AirTran. But that opportunity has come and gone, and now it's time to recognize that Midwest, no longer what it once was, will end its days as a small, regional operator before eventually being shut down, with the jets likely going to other airlines Republic contracts with.

Frontier to Exit Bankruptcy, Become Subsidiary of Republic Airways

Republic Airways announced today that it will purchase 100% of the equity in Frontier Airlines for nearly $109 million, allowing Frontier to exit bankruptcy protection as a wholly-owned subsidiary of Republic. The unexpected move is in part a testament to the attitude of many at Frontier who were far less defeatist than I was about their company. Frontier made many sacrifices and changes, including cutting staff, adding new fees, and trimming flights, but in the end, it appears to have paid off. Or has it?

Frontier is still in a relatively weak competitive position in Denver. Although United has taken serious hits as well, Frontier seems unlikely to grow capacity much at Denver due to the inroads being made by Southwest, Alaska, and other carriers. Of course, the economic downturn and the public's reduction in air travel don't help matters much either if Frontier is looking for traffic growth. Frontier does still have a strong, loyal customer base in the Denver area, and the company's superior product gives it an advantage. But the name of the game is bringing in revenue, and although Lynx seems to be helping, competitive pressures are likely to continue to depress yields at Denver for some time. This is not to say Frontier is down and out. But let's be clear. Even when Frontier was doing well in the earlier part of this decade, well before Southwest entered Denver, the company struggled to find markets outside of Denver to expand to. Various point-to-point routes from Los Angeles were tried, the Memphis focus city was quickly abandoned, routes to Mexico and the Midwest were started and pulled. Unfortunately, Frontier found itself boxed in, and without significant name recognition beyond Denver, the carrier had difficulty making inroads elsewhere. Even if Frontier continues to fly as it does, there will be limited room for mainline expansion outside of Denver. From Denver, however, Frontier could continue to expand its Lynx services to new cities in the West. But there is no reason to think that the presence of Republic will help Frontier further mainline expansion plans.

So what's in this deal for Republic? Why would they want to own a carrier which nearly liquidated and which has few opportunities for growth? The answer is pretty simple. They're desperate. Regional jets are expensive. Very expensive. And with oil prices breaking $70 a barrel recently, combined with failed efforts at raising fares, regional jets are simply not going to be as widely used going forward as they once were. As a result, legacies are working hard to break contracts with vendors of regional lift and squeeze remaining suppliers. The old days, of little risk and steady returns for lift providers, are over. In its stead will be a much more competitive marketplace, with vendors desperately competing for remaining contracts and scrambling not to be left with extra jets.

How are lift providers trying to solve this problem? One way is by starting their own carriers. ExpressJet started its own (now defunct) carrier two years ago, Mesa's Go! continues to provide low-cost air service in Hawaii, and Atlantic Coast Airlines created the spectacular failure that was Independence Air. Why are these companies, which operate high-cost aircraft that don't provide good economics outside of a hub network, starting their own carriers? Not to repeat myself, but they were desperate, and alternative solutions (such as those described below) may not have been readily available.

For carriers that want to avoid the trap of starting their own scheduled service operations, there is another solution to keeping jets under contract. They can put equity in their customers (eg. legacy airlines). Republic has done this with Midwest and US Airways. Air Wisconsin did it with US Airways during that carrier's darkest hour a few years ago. Companies which fail to work with their airline partners to create environments where their lift will be needed will increasingly find themselves in trouble.

But here's the thing: Republic withdrew all its jets from its Frontier contract over a year ago, citing the need to redeploy the jets to other carriers. So why did Republic suddenly decide that they needed Frontier? Because the alternatives—including the real possibility that those jets they pulled won't stay very long in the hands of other carriers—are too disconcerting. Republic already has had experience putting equity in carriers it does business with. This move is simply a logical extension of that. And unlike starting its own branded service, Frontier is a well-known business with an established customer base. Frontier, if it comes back, should have a steady business in Denver, one which will be increasingly dependent on the use of smaller, regional aircraft for its revenues, and one in which Republic can use its aircraft to earn a steady, if modest, revenue stream. Perhaps, if Republic plays its cards correctly, it can spin off Frontier at a later date and recoup its investment.

Although Republic may not have wanted to own Frontier, it's quite possible that in this liquidity environment, very few investors would be willing to invest in a bankrupt airline, and Republic decided to take the chance. We clearly don't have the full picture on how the decisions about this move got made, but I suspect that it's an interesting story. But until that happens, continue to watch the regional lift vendors and what they do to secure positions for their jets. Carriers such as Midwest or even US Airways (once again) could be next in line for equity infusions.

JetAmerica Makes a Splash With New Service

JetAmerica, a new discount brand, will start service from Toledo, Lansing, and South Bend to various cities including Minneapolis, Newark, and Melbourne, Florida (as an alternate for Orlando). The brand will commence service in July and will offer 9 seats on every flight for just $9. Not surprisingly, such an offer has received lots of buzz in the media eager for stories about ways to travel cheaply in the recession. I am specifying that this company is a brand and not an airline, because neither the planes nor the crews will be under company ownership. Instead, JetAmerica is conducting a public charter operation with planes owned by Miami Air International. A technicality, perhaps, but it is also likely an indication that this is likely a method of "testing the waters", for the brand owners to see if these markets warrant additional service. The flights are modeled after Ryanair and (the late) Skybus, with no-frills and lots of fees for extra amenities. Skybus, if you remember, was a valiant attempt at the Ryanair model in the States serving a variety of cities from Columbus, Ohio, but unfortunately buckled under external forces that affected all carriers early last year. JetAmerica is aiming at the same market as Skybus, albeit in a slightly safer way for the owners.

Will JetAmerica find markets that it can thrive in? The answer to this question I feel is an unequivocal no. There is already a surfeit of capacity in our air transportation system. It is true, that JetAmerica will be serving smaller markets, the same markets in which Allegiant has succeeded at spurring new demand and growing traffic (Allegiant offers service from two of JetAmerica's three focus cities at Toledo and South Bend and offers service to Grand Rapids, roughly an hour from JetAmerica's third focus city at Lansing), even with less-than-daily flights. However, it is really debatable whether JetAmerica will find enough other demand to stimulate. Most of Allegiant's traffic is leisure traffic, and the company tailors its flight schedule accordingly, which it can do, because it has older aircraft which it can easily park. JetAmerica, however, plans on using newer 737-800s and acquiring them on a fixed schedule, making it hard for the company to easily reduce service if demand weakens.

Moreover, JetAmerica plans on serving three markets from its Midwest focus cities, Minneapolis, Newark, and Melbourne, markets which have competition or may not be able to stimulate the requisite demand. I am quite skeptical about the demand to Minneapolis, as it is hardly a leisure destination and is already well served from airports near Toledo (namely, Detroit), although to be fair, airfares are quite high because of the dominance of Northwest between MSP and DTW. Nevertheless, I suspect this route will quickly come to an end. The two other markets could potentially stimulate leisure traffic, and I would be a bit more optimistic about them. But as noted above, Allegiant offers competing service from JetAmerica's focus cities, including flights to Orlando Sanford Airport, which is closer to Orlando than Melbourne. Moreover, as the incumbent in the market, Allegiant may be difficult to unseat, since it has a reputation for friendly and reliable air service that makes it popular with customers. The Newark service could prove attractive, and that may be the most successful market for JetAmerica. But whether fares will be low enough to stimulate demand (without customers defecting to larger, nearby airports) remains questionable.

However, aside from the New York City area and Orlando, there are few other large, leisure-oriented markets near Toledo, South Bend, and Lansing that are suitable for this business model. Chicago is well-served by Southwest (and so is Baltimore, which could possibly serve as an alternate for DC, a city that has a huge tourist flow in the summer months). Allegiant dominates services to Florida and currently offers what it sees as a suitable schedule for the market, a market where low fares have already stimulated demand considerably. Whether JetAmerica will find success with Newark, possible service to the DC area, or some other market that does not have significant low-fare competition, I feel that it is unlikely that the company can expand to anything beyond a small niche airline, and I would not be surprised if it ceased operations within a year.

Southwest's Milwaukee Service and Its Impact on the Future of Air Travel in the Midwest

Southwest announced at its annual meeting today that it intends to serve Milwaukee in the near future. Services will start after the summer travel season. Destinations and schedules have yet to be announced. This is a surprising move from a carrier that, in the past few years, has surprised many industry observers. Although Milwaukee is one of last large markets Southwest has yet to enter, it is relatively small compared to some of the other cities Southwest still has yet to make inroads in--such as Cincinnati, Charlotte or Atlanta. However, given the recent efforts of AirTran to expand its presence in Milwaukee, replacing some services previously offered by Midwest Airlines, Southwest may have felt this was an opportune time to make its move--before AirTran becomes too dominant in the market. As with some of Southwest's recent expansion efforts, such as in Minneapolis, Milwaukee will likely see roughly ten daily flights initially from Southwest, probably to such destinations as Baltimore, Kansas City, Fort Lauderdale, Orlando, Denver, Phoenix, and Las Vegas.

Travelers in Northern Illinois and Southern Wisconsin should be celebrating the addition of new services to their city. However, like many cities, Milwaukee has seen its fair share of service cuts recently, and the new services by AirTran and Southwest are unlikely to replace all of the withdrawn capacity--at least in the short term. With the economy in a slump and business travel plunging, few cities are in line to see increases in their air service. Nevertheless, this is welcome news and hopefully an indication of future sustained growth at MKE. However, such an announcement reflects the wider changes in commercial air service in the past few years, not merely with the expansion of Southwest into business-oriented markets, but also the gradual decline of service to the Midwest.

Milwaukee, and indeed, many other Midwestern cities struggling with air service cutbacks (Columbus, Cleveland, Cincinnati, Indianapolis, Kansas City, St. Louis, and others) will see permanent losses in air service due to a continued lack of population and economic growth. These reductions will especially affect the shorter regional routes that low-cost carriers will not replace. This is not to suggest that individuals in small cities in the Midwest should worry that they will lose air service altogether. For most communities, that is unlikely, and in fact, the success of both low-cost carriers in larger markets like Milwaukee, and niche carriers like Allegiant in smaller markets, demonstrates that the Midwest has continued demand for point-to-point air service. But such service will increasingly be to larger markets where low-cost carriers can effectively lower fares and fill planes.

Milwaukee will not become a hub anytime soon, and will not replace Midwest Airlines in this sense. While Southwest and AirTran may have some limited East-West connecting flows, those will pale in comparison to the hubs 100 miles to the South in Chicago (including Southwest's operations at Midway where they handle a great deal of connecting traffic). Cities like Milwaukee that have successfully functioned as small hubs for years are likely to face the most severe cutbacks because they have limited originating traffic, and thus must be served with smaller, higher cost aircraft. Since the industry is more competitive than ever, and yields are continuously getting squeezed, high-cost hubs are not going to fly. Travelers in places like Green Bay, Des Moines, Grand Rapids, South Bend, and other small markets will start to feel the pinch because their connectivity options--to places like Cleveland, Cincinnati, Indianapolis, and St. Louis, are likely to be in jeopardy if legacies are forced to trim service further. Cutbacks have already taken place in Cleveland and Indianapolis (where Northwest once had a small focus-city operation that, like MKE, offered connectivity, though on a limited scale). And Delta recently trimmed service from its Cincinnati hub to Chattanooga, TN, Sioux Falls, SD, Asheville, NC, and White Plains, NY while adding flights to larger markets.

Thus, the Midwest as a whole will see fewer planes. Larger markets will see fewer planes, but some of those they do see will be mainline, 737-sized planes, increasingly from low-cost carriers. Smaller markets will see fewer planes period, and those they do see will be headed to such wonderful places as Newark and Atlanta. At the end of the shakeout, there will probably only be three cities in the Midwest with significant levels of regional service--Minneapolis, Chicago, and Detroit. The other cities, soon-to-be former hubs, will see more services from low-cost carriers to a scattering of large business destinations and leisure markets as well as continued service from legacies to their respective hubs. But the days of midsize Midwestern hubs are gone, and today's announcement by Southwest is merely a step towards the demise of one of those hubs.

Three Carriers Report Results--And A Note About Checked Luggage Policies

Alaska Air, US Airways, and JetBlue all reported first quarter earnings today. Alaska and US Airways reported quarterly losses, whereas JetBlue reported a profit, albeit a small one. The results were hampered by fuel hedge losses recorded in the quarter, though most carriers have detached themselves from most of their fuel hedge obligations, so in future quarters these losses will diminish (assuming the price of oil stays low). The results were a bit better than expected, and a promising sign for the upcoming summer months.

I wouldn't post about these earnings, because I don't have too much insight into them, except for one thing I found interesting in the results of both Alaska and US Airways. Both carriers used the date of their earnings releases to announce revisions to their baggage policies, and both policies will ultimately result in greater revenue for each carrier. US Airways will offer the option of online payment for checked baggage fees. If a passenger chooses not to pay online, there will be an additional $5 fee at the airport. Alaska will add a $15 fee for a first checked bag, bringing it in line with legacy carriers, though distancing itself from Southwest, which currently permits passengers to check two free checked bags. However, the nature of these moves differed.

US Airways added an additional restriction in their policy without adding any value to it whatsoever. Customers that had checked bags before for $15 or $25 will now have to pay more if they don't pay online. Not only is there no value added, but ostensibly, there is no reason why US Airways needs to add this charge now. The summer travel season is coming, meaning higher revenues, and fuel prices are at low levels. The economic crisis has been hurting airlines for the past several months, and though it's not clear things will get much better anytime soon, the business travel environment doesn't seem to be getting significantly worse. A more reasonable policy that would have added some value might have been to add the charge, but then offer customers who pay online a discount on the bag fee or bonus frequent flyer miles for the first few months. That way, US Airways could have seen whether the charge would be added by other carriers and either retreat from it if they were at a competitive disadvantage, or get rid of the discount after other carriers had added it.

What this new policy indicates is US Airways' aggressiveness to nickel and dime its passengers. In a similar move to add a new fee without adding any benefit, US Airways added fees for onboard soft drinks several months ago. The carrier was forced to retreat from this policy after the charge wasn't adopted by other carriers and frequent flyers complained. Nevertheless, US Airways is basing its survival on being able to charge customers for added services, and will continue to try and take the lead in adding new fees and charges in order to raise ancillary revenues without giving customers anything in return.

Contrast this with Alaska's new policy that will charge customers $15 for a first checked bag. What is interesting is that, although Alaska may be putting itself at a competitive disadvantage against Southwest, the carrier is offering their customers something for that extra fee--namely, a $25 discount off future travel or bonus frequent flyer miles if a customer checks in a bag and it arrives at the carousel more than 25 minutes late. Yes, customers are paying for a first checked bag, but at least the carrier has made an attempt to save face, to offer a perception of value even though the value of discounted travel certificates and frequent flyer miles awarded under this policy will be far far less than the new bag revenues collected.

Adding ancillary fees does not mean that airlines cannot do it in a customer-friendly manner, where customers feel that they received something extra for a service that was previously free, even if that something extra is only a nominal cost to the airline. This is something Southwest might want to take note of. Southwest could still maintain a consumer-friendly image even while moving to make itself competitive with other carriers. They are the ones that are putting themselves at a disadvantage, by having to match the fares of their competitors without the lucrative ancillary revenue streams their competitors use. I wouldn't be surprised if in the not-so-distant future, Southwest adds some limited new fees, though not necessarily for checked bags. Perhaps when they report Q2 earnings, airlines seem to like to appease their investors that way...

Alaska Takes on Allegiant in Bellingham

Bellingham, WA has been one of Allegiant Air's most successful markets, drawing traffic from both sides of the US/Canada border, and even becoming an operations base for the company. But now, the market is being assaulted by the local heavyweight, Alaska, which dominates traffic at Seattle's airport, roughly 2 hours south of Bellingham. Alaska announced today that it will offer nonstop service on the Bellingham-Las Vegas route, one that Allegiant serves daily for much of the year. Alaska will serve the route three times weekly, and the carrier will continue to offer connections to Las Vegas via Seattle every day of the week. While some airlines have tried and failed to battle Allegiant (such as Northwest offering competing services between parts of the Dakotas and Vegas a couple years back), Allegiant has shown remarkable resilience and has managed to fend off its competitors.

However, Alaska may offer tougher competition than Allegiant has seen before. Not only is Alaska a well-regarded carrier in the region, but the lure of letting customers mix and match nonstop flights and connecting ones (if I want to, for instance, travel on a day when neither Alaska nor Allegiant serves the route nonstop) will help make Alaska's service more attractive. Moreover, as explicitly stated in this press release, though absent from most others, Alaska notes its free services in contrast to Allegiant, namely: "online reservations and advance seat selection... water, soft drinks, coffee, tea and snacks, or the use of pillows and blankets." Wow, you can select your seat, get a free snack, and don't have to go to the airport to buy your ticket if you want the lowest price! It sounds like a winning combination. But Allegiant has a big head start in the market, and the company has engendered loyalty in its own right, posting load factors of well over 90% in recent months, something Alaska can only dream of. Even after Alaska starts its nonstop Vegas service, Allegiant will offer more flights on the route and combined with the company's wide array of tour packages, many price-sensitive customers who couldn't care less about where they sit would fly with Allegiant.

One thing, however, is clear. Allegiant tries to avoid picking fights. The airline has a good sense of which fights it will win and which it will lose. It beat Northwest in the Dakotas, but it withdrew quickly when JetBlue and AirTran added service to Orlando at Newburgh/Stewart. Allegiant has a lot invested in Bellingham, and it probably won't give up anytime soon. But Western Washington is also a key market for Alaska, unlike the Dakotas were for Northwest, and Alaska, even if it loses money for awhile on the route, probably will be in for the long haul. Is this market big enough for the two of them? The answer, sadly, is probably not, and while Allegiant may continue to offer some services on some other, thinner routes, such as to Palm Springs, I worry about Allegiant's future in Bellingham. Yet I have been wrong about Allegiant before, they have been more resilient than I have expected, and they may surprise me yet again.

Fees, Fees Galore, Online Booking, Web Check-in, and More

As airlines face increased pressure to offer ever lower fares in this lousy economy, they have become increasingly creative with their charges. A few years ago, many airlines began to add fees to customers who booked via phone or via an airport ticket counter. Allegiant took that a step further, adding fees to customers who booked on the internet and imposing additional fees on those who book over the phone (now known as a "convenience fee"). However, the airline simultaneously removed fees on those who book via airport ticket counters--arguably the least convenient option for most customers. Now, Spirit is taking a page out of the Allegiant playbook, and plans to charge customers $4.90 each way in the form of a "Passenger Usage Fee" in order to book tickets online. Customers who book at airport ticket counters will pay no fee. Not surprisingly, Spirit hasn't exactly publicized this widely, encoding the fee in language that makes it sound like a government-imposed tax. The change is reflected in the fine print at the bottom of Spirit's booking page:

All fares are subject to change until purchased. All fares listed on spiritair.com are per customer for each way of travel and include the base fare plus a federal excise tax. Fares do not include (a) a segment tax of $3.60 per U.S. domestic flight segment (a flight segment is defined as one takeoff and landing) of a passenger's itinerary; (b) up to $18 per round trip in local airport charges; or (c) a September 11th Security Fee of $2.50 per enplanement originating at a U.S. airport; (d) $4.90 Passenger Usage Fee per one way of travel; and (e) fees from $15 for the first (1) bag (fare shown does include one free carry-on)... (emphasis added)

And now, in the infinite wisdom of Ryanair, Europe's largest low-fare carrier, passengers will "pay" for another previously free service--online check-in. Arguably, passengers are not paying extra for this privilege, as it will be a unavoidable charge on all tickets (except what Ryanair defines as "promotional fares"). Ryanair is using its transition process of removing airport check-in desks (in a bid to cut costs) to stick customers with a hidden fare increase--not a surprise from this company, but unfortunate for passengers nevertheless. Ryanair even plans to charge for restroom use on the aircraft, an idea that I suspect will have many unintended consequences, few of them pleasant to deal with.

And so this begs the question: How far will other carriers go in imposing such charges? Allegiant, Spirit, and Ryanair are all unabashedly no-frills, deep-discount carriers, and hence more likely to be early adopters in making such changes. But, even though passengers are increasingly confused by all the added charges and fees, other carriers, including so-called "legacy" carriers, will impose them, because they ultimately equate to added revenue. While I was skeptical that legacies in the US would charge for checked baggage, they have done so with far greater success than I could have imagined. Other charges, for food and priority seating, have also been similarly successful.

I suspect that if airlines in this country started to charge for checking in at an airport desk (with exceptions for travelers with special needs, travelers in large groups, and those checking baggage), customers would probably not be too surprised, nor too upset. That charge is easily avoidable by checking in online, an offering of nearly every carrier that flies within the US. And if customers were not able to print their boarding passes out online, they could check-in at the airport using automated kiosks.

But some added fees may be a bit of a stretch. We have already seen that if airlines go too far to nickel and dime passengers, it can be problematic for the carrier's reputation. US Airways has retreated from its position to charge for beverages after other airlines have not followed suit. (On a side note: I flew US Airways last week and unexpectedly enjoyed one of the best travel experiences I've had in awhile, though it may have been because the plane was half-empty). I suspect that charging for ticket purchases online will be a tougher sell for airlines. Carriers which once offered customers incentives for booking online, because it it cheaper for the company (it often costs carriers less than fifty cents to take an online reservation) may soon argue that taking web bookings is unduly expensive, and customers need to help pay for it (even though taking a reservation at the airport is, in many cases, more expensive for the airline.

Allegiant has more justification for this fee than Spirit, since Allegiant operates out of smaller airports close to the cities they serve, which often have free parking, and are easy to get into and out of quickly. Spirit, on the other hand, operates mostly from large airports in major cities. Most legacy carriers fall closer to the Spirit model, which would make booking a ticket inexpensively quite challenging for customers if such a fee were implemented. This is not to say such a fee could not be implemented--if this industry faces another crisis, with fuel, liquidity, or an unforeseen hazard, then over consumer objections, purchasing tickets at the airport may, unfortunately, become the cheapest way to book.

Southwest to Serve Boston Logan

By now you may have heard the news that beginning in Fall 2009, Southwest will commence service to Boston Logan Airport. Southwest, which has long avoided Logan, preferring to serve the region through Providence, RI and Manchester, NH, plans to start its operations with only two gates, an indication that the carrier will probably not have more than 15-20 flights a day to start. Like most Southwest expansion announcements, the airline has not released routes or a timetable yet, though it is likely that the first flights from the airport will be to Chicago and Baltimore, with other cities such as Philadelphia, Las Vegas, Denver, and Phoenix also in contention for early flights. Boston appears to be a candidate for rapid expansion for Southwest, because, while there is no dominant carrier at the airport, and hence, little loyalty among business travelers (especially those looking for nonstop flights), fares are still relatively high, enabling Southwest to make a dent in the market quickly.

This announcement is not really a surprise; Southwest has changed course in the past few years, opting to serve busier airports in order to get more business traffic. What will be interesting, however, is seeing not only how quickly Southwest expands, but whether it will succeed in stealing business travelers from JetBlue and AirTran, both of which offer competing low-fare services from the airport. Both carriers pose tough competition, and have the advantage of being the incumbents in the market. JetBlue, especially, offers nonstop flights to many business markets, such as Chicago, Washington DC, San Francisco, and Los Angeles. However, Southwest will likely find its niche, provided that the carrier offers reasonable fares and does not rely simply on the connectivity of its Chicago and Baltimore hubs, but offers a wide array of nonstop flights to suit the needs of business travelers.

Another question posed by this expansion is the fate of both Providence and Manchester. Both of these airports will almost certainly remain within Southwest's network, but they could see reduced growth (and perhaps even a few flights leaving the airports) as more passengers closer to Boston proper choose Southwest's Logan services. But even with reduced growth, Southwest will still be the dominant carrier at both airports. At Providence Southwest currently has approximately 33 daily flights, at Manchester, approximately 29. These airports have proven that they can sustain these levels of flights even with lower fares at Logan from JetBlue's and AirTran's presence. Provided most passengers are using these airports for their convenience, and not simply because Southwest serves them, then these service levels should not be adversely impacted in any material way from Southwest's addition of services at Logan.

Keep your eyes peeled for an announcement from the carrier in the months ahead about destinations from Logan. The competition could heat up come fall.

Spirit Airlines Sinks to New Low

It was revealed today that Spirit Airlines plans to ask flight attendants to use aprons emblazoned with beer advertisements during in-flight service. Spirit, which has tried to cut costs and increase ancillary revenues through the sale of advertising, defends the move. But though the company has a history of tasteless promotions, asking flight attendants to actively promote alcohol crosses the line in the view of the Bulletin. If management wants to use sexual innuendos in their marketing campaigns, as unfortunate as that is, it does not place a significant burden on the carrier's employees, since Spirit's marketing hardly impedes job function. But asking flight attendants to promote a product that is not only objectionable in the eyes of many, but is actually a leading cause of in-flight passenger disruptions, not only deprives the dignity of flight attendants, but poses a safety risk to passengers.

Now the question could logically be asked: Booze is still readily available on the plane and most of those who will get intoxicated probably don't need an advertisement to buy it, so why all the fuss? Fair enough. I don't claim to be an expert on the effects of advertising (though anyone who is should feel free to comment!) but I would argue that anything which is bound to exacerbate onboard disruptions needs to be removed. Advertising is designed to spur gratuitous consumption, and spurring excess beer consumption seems inappropriate in an in-flight setting.

If it were up to me, alcohol wouldn't be available on planes, because not only are drunken passengers at risk at hurting themselves or others in a confined cabin environment, but as shown by the US Airways incident two weeks ago, only when passengers are alert and thinking can they move quickly enough to escape during an evacuation. Had someone been blocking the aisle of the aircraft, the outcome of that incident could have been far different. Yet the sale of alcoholic beverages is an important revenue source for airlines, and perhaps a necessary evil, even though it puts added strain on flight attendants to monitor passengers for signs of intoxication.

Airlines have a right to sell advertising, and should seriously consider it as a way to supplement revenues. But advertising that compromises the safety of passengers or the dignity of the cabin crew is despicable. Even the pilots union at Spirit came out today in support of the flight attendants and against the management's use of sexually-suggestive advertising campaigns and its promotion of the beer patch onboard advertising. In a press release, the pilots said "management [should] stop these campaigns and run this company more like an airline than a frat house." That seems to say it all. Spirit really has hit a new low.

US Airways Plane Ditches in Hudson River

Okay, by now you've probably heard that a US Airways jet ditched in the Hudson River on Thursday, with first reports suggesting that the cause of the accident was a bird strike on both engines. Miraculously, all 155 passengers aboard survived. This accident does not appear to be the fault of US Airways, and should not be seen as an indictment of the company or its safety measures. Though this website has serious doubts about the viability of US Airways' business model, that is another discussion. In this case, US Airways seems to have done everything right, and the airline appears to be taking all necessary steps to cooperate with authorities. The pilots and flight attendants should be commended for their work in getting all the passengers out safely.

The only reason that this accident happened to US Airways, and not to another carrier, was because of chance. US Airways, along with Delta, has a sizable operation at LaGuardia, and so obviously, since they had more flights coming in and out of the airport, their planes were more likely to suffer such an accident.

Most commercial aircraft are designed to fly with only half their engines operational as a safety measure in the event that one or more engines fail. In most planes, this means that instead of using two engines, the plane can, if necessary, fly on one, though it is advisable for the pilots to land soon in such a situation to avoid the possibility that the other engine may fail. During a bird strike, the engine that is hit is designed to be shut down. This is done to prevent the engine from catching fire and creating a major safety hazard. However, in this incident, it appears birds were sucked into both engines. When that happens, you're essentially screwed, and a pilot must rapidly decide how to glide his plane to safety. Thankfully, in this case, the pilot acted with good judgment, and nobody was seriously injured as a result.

Although the reports on this incident rightly discuss the inadequate safety measures to prevent bird congregations at the airport, there have been few mentions of a recent incident with very strong parallels to this accident. On November 10, 2008, Ryanair flight 4102 descended into Rome's Ciampino airport. Soon before landing, birds were sucked into one of the plane's two engines. The pilot was instructed by air traffic controllers to do a go-around and make an emergency landing on one engine. During this go-around, birds were sucked into the other engine, and the pilots were forced to glide the plane down onto the runway. Passengers evacuated via slides, and all survived. However, it was a very close call, and it should have been a major red flag to airports and airlines. Of course, this Ryanair incident was not the only other bird strike in recent memory, several other incidents have occurred this decade, mostly in the US and Europe, though arguably, few as serious as the US Airways and Ryanair incidents.

However, although these two events ended well, that should not suggest that bird strikes are a minor safety hazard. Though they are not common, they have the potential to down an aircraft, and had the weather or visibility conditions been worse during either of these incidents, the outcomes could have been much different.

Perhaps most importantly, the message that the general public should take away from this incident is that it's much, much easier to prevent these sorts of incidents than to ensure that a plane safely lands and everyone gets out safely when they do happen. Many air traffic control system improvements and other airport safety measures have sat in a holding pattern for years. While airports have developed measures to prevent bird congregations, they are inadequate, and more funding is needed to help design and implement such projects. It's time for people to realize that if we want a safe air transport system, we have to pay for it. It should be noted that because of the past investments airlines, airports, and the government have made in ensuring safety in air travel, the US has been and continues to be the safest place in the world to fly. Once again, this nation must take the lead in finding new ways to keep air travel as safe as possible.