Forbes: America's Worst Airlines

photo courtesy of tizzie

Forbes magazine recently released a list of the country's "Worst Airlines", based upon flight delays, lost bags and cancellations. ASA came in worst, although Forbes noted that air traffic control is more likely to delay flights with fewer passengers, and because ASA flies smaller jets, they're more prone to being delayed. And weather was also a factor - several storms at Dallas affected American Eagle's performance, and Comair, which has a large presence in the Northeast, is also affected by severe weather. (Note that Hawaiian Airlines and Aloha Air aren't listed on the 'worst 10' - in fact, they're near the top for on-time performance, mostly due to a lack of severe weather.)

1. Atlantic Southeast Airlines: On-time performance: 63.3% (worst), Baggage mishandling: 16.9 per 1,000 passengers (worst), Cancellations: 4.4% (second worst)
2. Comair: On-time performance: 66.6% (second worst), Baggage mishandling: 11.9 per 1,000 passengers (third), Cancellations: 5.4% (worst)
3. American Eagle: On-time performance: 69% (fourth worst), Baggage mishandling: 13.5 per 1,000 passengers (second), Cancellations: 4.4% (third)
4. Mesa Airlines: On-time performance: 72.5% (seventh worst), Baggage mishandling: 10.1 per 1,000 passengers (fourth), Cancellations: 2.7% (sixth)
5. ExpressJet Airlines: On-time performance: 73% (ninth worst), Baggage mishandling: 8.9 per 1,000 passengers (fifth), Cancellation rating: 3.4% (fourth)
6. US Airways: On-time performance: 68.3% (third worst), Baggage mishandling: 8.6 per 1,000 passengers (seventh), Cancellations: 1.9% (ninth)
7. American Airlines: On-time performance: 69.9% (fifth worst), Baggage mishandling: 5.8 per 1,000 passengers (11th), Cancellations: 2.0% (eighth)
8. United Airlines: On-time performance: 72.4% (sixth worst), Baggage mishandling: 5.4 per 1,000 passengers (12th), Cancellations: 2.1% (seventh)
9. Delta Airlines: On-time performance: 75% (fifth worst), Baggage mishandling: 6.6 per 1,000 passengers (eighth), Cancellations: 1.5% (13th)
10. Alaska Airlines: On-time performance: 72.8% (eighth worst), Baggage mishandling: 6.6 per 1,000 passengers (ninth), Cancellations: 1.2% (15th)

British Airways orders 787, A380

British Airways announced last Thursday that it would order 12 Airbus A380s and 24 Boeing 787s, with options for 7 more A380s and 18 more 787s. The planes will be delivered between 2010 and 2014. "This is an exciting day for British Airways with our largest fleet order since 1998," said Willie Walsh, BA's chief executive. "It's great news for our business, our customers and the environment." Walsh also pointed out that the two new types are environmentally friendly and also produce a quarter of the noise of a Boeing 747-400.

BA has said that they will use the A380 to "provide more capacity for the airline's key high-density markets and [to] maximise use of scarce Heathrow slots", while the 787 will "be used to start new routes and increase frequencies in existing markets". The airline also announced that it is looking to replace the 747-400 and is looking at the 787-10, 777-300ER and A350XWB models as potential replacements.

Singapore announces first A380 commercial flight

Singapore Airlines has announced the day of the first commercial flight of the A380. The flight, SQ 380, will be on October 25, from Singapore to Sydney. ""Everyone at Singapore Airlines is keenly anticipating the delivery of this new plane, and our people are working hard on final preparation for its entry into service," said Singapore CEO Chew Choon Seng. "The first flight promises to be one of the most exciting occasions in aviation history."

All of the proceeds from ticket sales for the flight will go to charity. (Apparently, ExxonMobil is also donating fuel for the trip. ) If you're interested in purchasing a seat on either the first flight (or the first return flight the next day), you'll be able to bid for one on eBay starting August 25.

AirTran isn't done with Midwest yet

Apparently AirTran isn't quite yet ready to give up on acquisition target Midwest Air, even though two days ago Midwest announced that it would go ahead with a deal led by TPG Capital. While the TPG offer was $16 a share, AirTran's latest offer, of $445 million in cash and stock, is valued at $16.25 a share. (Its old offer was $15.75 a share.) Midwest's board said earlier today that they would take the "revised offer under consideration".
Even though Midwest was expected to strike a formal agreement with the TPG-led group on Wednesday, AirTran might get its way in the end. Over half of Midwest shareholders were for the original AirTran deal, and Pequot Capital Management, the largest shareholder in Midwest, said today that they had "significant concerns" about a deal with TPG. Pequot's managing director said that in the long term, a deal with AirTran might be more valuable because the two airlines would be able to eliminate overlaps in their route networks - a move that would save a lot of money.

Midwest CEO to employees about TPG offer

This was posted online, and I thought I'd re-post it here on The Airline Blog:

To: All Midwest and Skyway Airlines Employees
Date: August 12, 2007
From: Timothy E. Hoeksema
Subject: Board of Directors Update #4

The Midwest Air Group Board of Directors today said that it has unanimously determined to pursue an all-cash offer from TPG Capital, L.P. on behalf of an affiliate of TPG and one or more partners to acquire all of the outstanding shares of Midwest for $16.00 per share.

The board took this action after receiving a letter from AirTran Holdings that stated the airline was making its best and final offer to acquire all of the outstanding shares of Midwest common stock at $15.75 per share, valued at Friday's closing price of AirTran's common stock. In reaching its determination, our board concluded that the TPG offer presented greater value and certainty for Midwest shareholders than the AirTran offer.

Under the terms of the offer from TPG, the private equity investor indicated that its acquisition "would permit the Company to continue its rich legacy as a leading provider of customer oriented quality air service." The board expects that Midwest and TPG will execute a definitive merger agreement no later than August 15, 2007.

TPG is one of the largest private equity investors in the world and the most experienced in the airline sector. It has invested in Continental Airlines, America West Airlines, Ryanair, Hotwire and Sabre with the goal of helping management teams build long-term value for stakeholders. TPG's offer to Midwest is set forth in a letter that was received by the Midwest board on August 12. The letter is attached at the end of this memo for you to read.

This announcement is sure to result in intense media coverage. I will again remind you that news coverage is often highly speculative. Be assured that we will inform you of any developments as there is news to report.

Northwest-backed group offers takeover bid for Midwest

photo: "Midwest N905ME", by Drewski2112

A group of investors, led by TPG Capital and which includes Northwest Airlines, said that it would buy Milwaukee-based Midwest Air for $400 million. The TPG-led bid was announced right after AirTran, which coveted a Milwaukee hub, said that it would no longer pursue its hostile takeover of Midwest. AirTran's final offer of $15.75 a share was less than TPG's $16.

Beyond the per-share figures, though, there might be another reason that Midwest might go for the TPG bid. The airline code-shares with Northwest, which is a key player at Milwaukee. Northwest didn't want another airline to move into the market, so Midwest's rejection of the AirTran bid is good news for them. However, Northwest said in a statement that they would not take part in managing Midwest (if the TPG bid is successful, of course).

The deal still needs to clear the anti-trust regulators, and AirTran CEO Joe Leonard has voiced, unsurprisingly, pessimistic views about this, saying that the "Midwest board has chosen a path that will benefit current senior management by selling out to a private equity firm and a so-called 'passive' investor whose involvement will surely raise antitrust concerns, casting doubt for shareholders on whether a transaction can, in fact, close." But a Midwest spokesperson was more upbeat, saying that the airline expected the deal to go through.

United international route rumors

photo: "N646UA", by Drewski2112

There have been a few rumors floating around that United Airlines might start some new international routes. Among them:

• Chicago - Moscow. Aeroflot used to fly this route but stopped in 2001, and United holds the dormant route authority for the route, which it obtained in a deal with Pan Am back in 1991. (If United did fly this route, it would probably skip Moscow's Sheremetyevo Airport (SVO) and instead fly to Domodedovo Airport (DME) because its fellow Star Alliance carriers fly there.) But the US-Russia market is currently served by a lot of routes - Delta flies Moscow - Atlanta and Moscow - New York (JFK), and Aeroflot flies Moscow - New York (JFK), Los Angeles, and Washington (IAD).
  
• Chicago - Milan. If United did fly this route, it would compete with Alitalia.
• Chicago - Düsseldorf. United used to fly this route but stopped in 2001. Star Alliance partner Lufthansa flies it with an Airbus A319, but is supposed to upgrade the route to an Airbus A330 in May.

It has also been rumored that United would upgrade some of its Boeing 767-300s, including a switch from a two-class domestic configuration to a three-class international one, and an engine upgrade. These upgraded 767s would be used on the route.