Airlines 1Qtr 2007

Emirates Air
plans to equip its entire fleet by mid-2007 to give passengers the option to use mobile phones in flight, subject to approvals.

Emirates will turn off the system at certain times, limit the number of concurrent calls to five or six and encourage passengers to use the silent or vibrate modes.

United
is considering a pricing plan called “bare fares,” in which some customers would be offered a base fare with the option to pay extra for seat assignments, checked bags, Mileage Plus credit and other extras.

The idea was revealed December 12 by Greg Taylor, United’s senior vice president
for planning, at United’s first Investor Day in six years. In his presentation, Taylor said unbundling with bare fares was one of the pricing ideas United officials were “doing some work around” and “hope to roll out in the next year or so.” He did not indicate whether value-added options would be offered at booking or at check-in.

The idea of bare fares he said is to apply the add-on options to promotional
fares or other cheap leisure fares.

He said that United officials were convinced that offering bare fares would enable the airline to offer customers a competitive fare while generating a revenue premium for United. Bare-fare add-ons that United could roll out within the year include:

  • Elite status for a single trip. Buyers would get priority check-in, priority security line access and priority boarding.
  • Flight flexibility or the right to make a change in their tickets between purchase time and time of departure without paying the $100 change fee. Taylor said United believed that, at the right price point, this option would result in more revenue than just the change fee alone.
  • A one-day pass for Red Carpet lounges. United could use the data it has on passengers, such as a long layover between flights, to proactively offer this option when they check in at an airport kiosk or online.

All of these options, Taylor said, “could be nice revenue generators” while “providing a better experience for our customers.” Taylor said the premium customer was still United’s focus and that there were customers at the other extreme who just wanted basic transportation at a low price.

Taylor added that “there’s clearly this constituency in the middle who would be very happy to do a value exchange where they pay a little bit more for an improved travel experience. We think these types of products just perfectly target that audience.”

Delta and Montana-based Big Sky Airlines
have signed a memorandum of understanding for Big Sky to operate Delta Connection carrier service beginning in the second quarter of 2007. As part of the agreement, Big Sky initially will fly eight 19-seat Beech craft 1900D aircraft, an 18 percent increase in departures.

Specific routes and frequencies will be announced later this winter.

Continental partnered with US Helicopter
to offer shuttle service between New York’s Downtown Manhattan Heliport at Wall Street and the airline’s Newark hub at a one-way fare of $159 plus security fees.

Apple
has teamed with Air France, Continental Airlines, Delta Air Lines, Emirates, KLM and United Airlines to deliver what it calls the first seamless integration between iPods and in-flight entertainment system.

These six airlines will begin offering their passengers iPod seat connections that will power and charge their iPods and allow the video content on their iPods to be viewed on back seat displays.

In-flight connectivity will be available in mid 2007 and Apple is working to provide iPod connectivity to more airlines in the future.