Alexander Corey

Reflections on the Pilot Shortage Over the last few months, the major airlines' formerly frantic pace of pilot hiring seems to have eased somewhat. United recently paused its hiring due to aircraft delivery delays. American, Southwest and Delta have all indicated they will hire fewer pilots in 2024, although American has stated it will continue to need about 1,300 pilots per year for the foreseeable future (Maharishi, 2024). But what does this mean from a big-picture perspective? Are these occurrences mere anecdotes, or are they indicators of a significant change in pilot demand? I’ve been asked variations on this question many times over the last few months, and several people who are considered authorities on hiring and retention have opined that the demand for pilots is waning. https://lnkd.in/dbYferjm

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It's behind a paywall, but the gist: SWA is terminating BLI, IAH, SYR, and CZM effective August 4, and reducing exposure (not yet further defined) to ORD and ATL. Looking at SWA route profitability via our EPIC(sm) tool for the year ended Q3 2023 (latest fully available data from DOT until Form 41 is updated for Q4), the three dropped US cities all had substantially negative operating margins (even to nearby focus cities over which SWA could funnel significant connecting traffic), and no obvious path to profitability. So these were relatively easy decisions for SWA to make. It gets tougher at ATL and Chicago, because of the magnitudes both of SWA's investments and of SWA's losses. At ATL, despite significant investment of aircraft over a dozen years, SWA has only a handful of domestic markets that are profitable. and in the aggregate SWA loses a moderate nine figures annually. To make money at ATL, SWA probably has to eviscerate its operation (think, over half its capacity) and focus on winning ATL customers from other markets where it is the dominant carrier rather than competing for Atlanta MSA customers. DL's ATL hub is already the most profitable domestic hub for any airline; life is about to get even better for DL at ATL. As for Chicago, SWA's losses at ORD and MDW combined were roughly double the operating profit of the company for those four quarters, meaning minor reductions to ORD won't suffice. To be fair, no Chicago hub carrier makes money on domestic operations, and until one of the three de-hubs completely none of them will. We have expected that carrier to be AA, allowing them to focus capacity on DFW and MIA which should be two of the most dominant hubs the rest of this century. But as reducing its ORD exposure will not make Chicago profitable for SWA, it might not make a lot of sense for them to stop there. Will they abandon MDW as a focus city? Probably not, but they will need to identify and then vigorously execute a strategy -- some combination of route cuts, route enhancements, and new flying they can make profitable quickly -- to improve MDW P&L by something on the order of $500M annually. That wouldn't be prosperity for SWA at MDW, but it would stanch the bleeding. Which markets will SWA cut at ORD (and MDW?) and ATL? With few exceptions, if you have SWA service to one or both and SWA isn't your dominant carrier, your service is probably at risk. What do you think?

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Although travelers have happily bid farewell to pandemic-related restrictions and returned to the skies en masse, #airlinestocks seem to have missed the memo on bouncing back to pre-COVID levels. To that point, the Dow Jones U.S. Airlines Index has returned roughly -35% since the start of the pandemic. This cumulative performance figure is despite a surge in the index in the wake of vaccine announcements in late 2020, as well as the fact that that this summer may be the busiest travel season the U.S. has ever seen. These dynamics can be observed in this week’s #chartoftheweek by Lauren Smith. Read it here: https://lnkd.in/gbWT7Gn4

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The flight delay compensation process can be confusing to be sure so, we made a little video to help everyone understand how much compensation you can get, how to get it, and the easiest way to file compensation claims. #Flight #AirAdvisor #Flightdelay #flightcompensation https://lnkd.in/g2s6JMWz

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Introducing ATPCO's Distribute the Offer leadership team - looking after airline product content data collection, distribution to data subscribers, and new distribution solutions (including #NDC). All of this in the context of ATPCO's industry utility model as we all move, #bettertogether, toward modern airline retailing through airline offers and orders. We spent time yesterday talking through strategy, 2024 outcomes (3, 6, 9 month) for each of the three areas, best-in-class team habits, championing cultural pillars at the heart of ATPCO, and leveraging the best of Artificial Intelligence. Most importantly, we talked about what we need, and how we can support each other, to be better at what we do, achieve the success outcomes we've committed to, and help each other out. Anne Kolodziej (Collection), Aruna Punya (Distribution), Cheikh FALL (New Distribution Solutions) - thanks for having my back; you're a super team of leaders to work with. Between the 4 of us, we have over 100 years of airline industry experience in technology, revenue accounting, performance data, distribution, pricing, taxation, strategy, customer service, and more; it's gratifying to work with people who use that tenure and knowledge to have a universally open and 'gritty' mindset, and embrace innovation together, to make the industry better. Let's make it a great 2024. #airlinedistribution #genAI #startwithwhy #startwithpeople #findyourwhy #distributetheoffer Jacquelyn Ingros, MS OD

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Course Correction: American Airlines abandons aggressive distribution strategy against indirect channels ✈ 🔄 📉   American Airlines recently decided to change its approach to how it sells tickets. Previously, the airline tried to cut out middlemen and aggressively pushed for a new ticket distribution system called New Distribution Capability (NDC). However, this strategy received a lot of criticism from both intermediaries and customers who complained about a lack of transparency and reduced consumer choice, and has now led to a noticeable drop in revenue. According to AA CEO Robert Isom, “the changes that we have made to our sales and distribution strategy” have partly caused this decline. In response, Isom promised that American Airlines will reconsider its aggressive approach and make sure its tickets are available wherever customers prefer to buy them.   This shift highlights that airlines and the intermediaries who sell their tickets are more reliant on each other than some industry leaders initially thought. Overall, these changes suggest that for the best customer experience, airlines need to ensure their tickets are widely accessible and easy to book. Read more about American Airlines’ announcement here: https://lnkd.in/eEDgQiEy

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A great piece of analysis on cobrand cards from Jay Sorensen. A startling statistic for me is that American Express pays $6.8B, an estimated 4% of its $168B revenues from the cobrand card to Delta Air Lines. And no great surprise but Qantas continues to excel commercially achieving $96 in revenue per member. No wonder Qantas is trying to recapture hearts and minds from its flagging members by releasing new reward seats to continue to feed the QFF cash machine. And all this against the backdrop of 20 years of interchange fee regulation in Australia which appears to have done little to benefit the consumer, with reduced rewards and increased bank fees, whilst merchants have pocketed the benefits. Globally, cobrand cards represent a great opportunity for operators of large scale loyalty programs, especially airlines, but all too often money is left on the table, relationships sour or the value proposition is negotiated away from members and the brands in favour of the banks. Urban Leopard Ventures has seen the pitfalls and pleasure of cobrand cards firsthand from the different perspectives in multiple markets, and helped our clients benefit from successful delivery of this powerful piece of loyalty program strategy. For expert advice on cobrand cards and all things loyalty please follow and contact us. #nextgenloyalty #urbanleopardventures #ffp #loyaltyprograms #cobrandcards #creditcards

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Some very interesting news for all of our clients who act as couriers (or simply travel by air for other reasons) who face unforeseen delays or flight cancelations: The Biden-Harris Administration today announced that the U.S. Department of Transportation (DOT) has issued a final rule that requires airlines to promptly provide passengers with automatic cash refunds when owed. The new rule makes it easy for passengers to obtain refunds when airlines cancel or significantly change their flights, significantly delay their checked bags, or fail to provide the extra services they purchased. Under the rule, passengers are entitled to a refund for: Canceled or significantly changed flights: Passengers will be entitled to a refund if their flight is canceled or significantly changed, and they do not accept alternative transportation or travel credits offered. For the first time, the rule defines “significant change.” Significant changes to a flight include departure or arrival times that are more than 3 hours domestically and 6 hours internationally; departures or arrivals from a different airport; increases in the number of connections; instances where passengers are downgraded to a lower class of service; or connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability.   Significantly delayed baggage return: Passengers who file a mishandled baggage report will be entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or 15-30 hours of their international flight arriving at the gate, depending on the length of the flight.   Extra services not provided: Passengers will be entitled to a refund for the fee they paid for an extra service — such as Wi-Fi, seat selection, or inflight entertainment — if an airline fails to provide this service. #AirlineTravel #TSA #PassengerCompensation

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American Airlines has sharply reversed its #distribution strategy to mend fences with #travelagencies and #corporatetravel customers. What is likely to happen next? American has adopted a less aggressive strategy than United Airlines, which had been following American at a safe distance. American will scale back its EDIFACT content removal to just Basic Economy. It will add continuous pricing in #NDC later, confirming that it is *not* currently deployed. For the interim they've added a bonus 10% commission on NDC-enabled bundles and paid seats, which is likely of limited benefit to agencies. We assume more changes to commissions, private fare programs, and corporate discounts are happening or will happen. American's main goal is to recover its fair share of higher-yielding bookings, albeit at the risk of advancing modern technology less quickly. American's success will come down to how agencies react, which will likely differ by segment. Here's what we think most would say (in our words, not theirs): 1. #OTAs - "We did our NDC integrations long ago and frankly were never affected by American's recent changes anyway. It's business as usual for us. We'll keep booking AA outside the GDSs for the most part." 2. Brick & Mortar Leisure / Mom & Pops - "We tried to play along and some of us even met American's 30% NDC threshold by April. It wasn't easy. Not all the issues were worked out in our #GDS and it was difficult to get support from American. We were ready to press on, though, considering what was at stake. Now that American is putting everything but Basic Economy back in EDIFACT, we'll probably just avoid the hassle because the incentives aren't worth it." 3. TMCs - "It's like American is putting full content back into EDIFACT again. Our customers ask us to suppress Basic Economy anyway. In the short term, it's more efficient to book American through EDIFACT. NDC might still be the future, but we don't feel pressured to move as quickly. If we move forward with anyone, it won't be American after what they did. We need to see a long-term commitment to a renewed partnership (with lots of money attached!) before we would consider that." Of all the potential impacts, one is clearest to us: American's NDC progress will likely slow dramatically. The bigger question is whether their share of high-yielding bookings will increase materially more than their yields will be diluted by the reinstitution of lower fares in EDIFACT. According to AmTrav, American's NDC fares were 11.2% lower than EDIFACT in the first quarter. To have a noticeable impact on American's overall revenue results, they will have to grow their share of high yield bookings by 15-20 percent -- perhaps from well below 90 percent of fair share to a number which approaches fair share. To us, this feels like a task that may be too tall given the damaged status of American's agency/corporate relationships and lack of staff to rebuild them.

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The Airline Pilot Club: transforming how airlines find the pilots of tomorrow Airlines are currently grappling with significant challenges in recruiting and retaining enough pilots to meet growing passenger demand. While there are recent examples of carriers, notably United Airlines, offering pilots unpaid leave, these are certainly the exception. Most airlines, particularly in the United States (US), are being forced to find increasingly inventive ways to recruit pilots or enhancing pay offers to attract talent. According to CAE’s latest Aviation Talent Forecast (2023), the civil aviation industry will require 284,000 new pilots over the next 10 years. Read more at: https://lnkd.in/dcUcdaPb #AviationTalk #aviationnews #avgeek #aviation

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The call is urgent and the need is now to transform redundant and physically straining processes using robotics and Ai, But… 👩‍🚀 are we there yet? 🧗🏼‍♀️Are industries, R&D labs, universities and various other collaborators meeting at the right apex? 🙌🏼 How can we facilitate it? Read up in this exclusive interview the various perspectives of integrating robotics and Ai in aviation and I invite you to think along.

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Boeing Delivery Delays: United Airlines Pilots Take Unpaid Time Off and Frustration Grows Discover how Boeing's delayed deliveries are impacting United Airlines, leading to pilots taking unpaid time off. Find out how this situation is affecting the airline industry and the potential extension of this opportunity in the coming months. #BoeingDeliveryDelays #UnitedAirlines #AirlineIndustry #UnpaidTimeOff #AviationNews #PilotLife #AircraftDelays #TravelIndustry #BoeingProblems #AirlinePilots #aviationnews #aviationdaily

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Is NDC here to stay, or is it just a stepping stone to something greater? As many airlines have now integrated NDC into their operations, and transaction volumes continue to grow, the industry is poised to broaden NDC's reach. Our latest joint whitepaper with T2RL tackles the current state of NDC, uncovering both challenges and triumphs, and explains how small to medium-sized carriers can leverage these developments. Discover real-world applications and strategic insights for scaling NDC in our detailed analysis. Download the whitepaper here: https://ow.ly/GHoQ50SnXT3 #ModernRetailing #AirlineFirst #NDC

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In the latest podcast, Gordon Smith and Jay Shabat discuss why Southwest has cut its revenue outlook so drastically for the current quarter. Then they take stock for our Airline Weekly mid-year review, and ask what the coming six months could hold. https://hubs.li/Q02DMZ6w0

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