33 Across : Eclipse
36 Drown : HUD

Some airlines have a significant fuel hedging program that buffers them from the ups and downs of the oil market. Southwest has fuel hedged through the summer I think which is incredibly smart. It’s a gamble that has paid off for them. Other airlines haven’t hedged nearly that much.

The size of UAL means that they’ll have a significantly larger bill for fuel than smaller carriers. Usually the economics of scale will account for that with normal operations but when you’re trying to leave bankruptcy or get another financial bailout it becomes more of a factor. They’re attempting to secure a $1.6 billion loan of which there would be $750 million less due to the increase in fuel cost. That leaves them with only $850 million to float the company and exit bankruptcy which isn’t nearly what they planned on having available when they made preperations at the end of last year.

The one way to adjust for that change would be to liquidate assets. Less planes, hubs or routes would allow any bailout $$ to carry further in saving the remaining company. Up to this point UAL hasn’t sold off anything. They’ve furloughed employees and parked some aircraft but that doesn’t necessarily save money. There seems to be some talk of UAL selling off Pacific routes which would explain why Northwest Airlines isn’t allowing any industry fare increase. They want to put pressure on UAL and see those Pacific routes become available to strengthen the NWA presence. NWA would rather burn a few million by keeping ticket prices down and force the already bleeding UAL to sell off assets.

If UAL can hold out longer than USAirways they might have a chance. The collapse of USAirways solve the excess industry capacity which would boost returns for the rest of the airlines. That in turn would ease the pressure on UAL. It’s a race to the bottom for UAL and USAirways.

Callsigns are one of those interesting symbolic names that airlines have that only pilots in the industry or hardcore aviation nuts know about. There is also a lot of historic or just interesting meaning behind them too that sometimes isn’t apparent.

One of them on this side of pond is the callsign of Atlantic Southeast Airlines, which is a feeder for Delta Airlines out of Atlanta as well as Cincinnati. The Callsign for ASA is “Candler.”

The land that the first Atlanta city airport was built on was owned by a Mr. Asa Candler. Mr. Candler was one of the original founders of Coca-Cola which is based in Atlanta as well as a mayor for the city. That first Atlanta airport was named after Mr. Candler and was called Candler Field. That airport eventually became the Hartsfield-Atlanta International Airport that we know now.

Atlantic Southeast Airlines was started in Atlanta and took the name of the original airport as its callsign. Another interesting item is that Mr. Candler’s first name was Asa which is also the common name for Atlantic Southeast Airlines (ASA).

Our callsign is “Jetlink” which is pretty lame. Our ICAO identifier is BTA due to the original certificate of operation that was used was borrowed from Brit-Airways back in the early ’80’s when Continental Express was formed from the merger of 3 small regional airlines.

There have been trips where I have kept an aircraft for 3 days and others where I’ve switched nearly every leg. A few of the deciding factors are type of flying, length of sit time and length of overnights. At my company even though we fly only one type of aircraft we have 5 different versions that can be dispatched. We have the following:

EMB-135ER
EMB-135LR Increased engine power, fuel capacity and weight limits over ER
EMB-145ER
EMB-145LR Increased engine power, fuel capacity and weight limits over ER
EMB-145XR Increased engine power, fuel capacity and weight limits over LR

Type of flying: Long segment length requires the long range aircraft. Short segments with a lot passengers with large bags require an aircraft that has the highest zero-fuel weight. Short segments with moderate cargo weights will get a different series of aircraft. An EMB-145XR can be used for any type of flying but not every aircraft we have is an XR model. That means that we can run into problems where aircraft limitations will lower the amount of pax or cargo we can take. Less pax/cargo = less $$ which isn’t good. For us the EMB-135/145 ER’s really suck. We’re constantly running to zero-fuel weight issues on certain routes and at times those are the only aircraft available in the system.

Those types of issues are pretty unique to our type of operation.

Length of sit time: If a crew has been scheduled a several hour sit time in a hub most likely their previous aircraft will be redispatched and they’ll switch to a later inbound aircraft for their next leg. Short turns in a hub usually mean you keep the same plane but no always as your next leg might require a different type of aircraft.

Length of Overnight: Just like sit time, if you have a long overnight the aircraft you brought in the previous night will most likely depart on an early morning flight and you’ll end up taking out an aircraft that arrives later in the day.

If your schedule is pretty similar day to day you’ll have a better chance of keeping the same plane. I also think the more you like the airplane you’re flying the more likely you are to have it taken away and be redispatched some hunk of junk. 😉

Great pictures!

Is the viewing area inside or does it have an outdoor platform? The few I’ve tried to visit in the US only allow you to stand within a glass room while their outdoor platforms are still off limits.

Continental may cut jobs as fuel prices soar
By Kevin Done, Aerospace Correspondent
Published: May 19 2004 18:43 | Last Updated: May 19 2004 18:43

Continental Airlines, the fifth largest US carrier, is considering lay-offs and cuts in wages and pension benefits in the most drastic response yet by the struggling US aviation industry to the impact of the surging oil price.

The airline announced that it had raised its fares worldwide with immediate effect with increases of $10 for each leg of a flight up to 1,000 miles and $20 above 1,000 miles.

It warned that with fuel prices at current levels and the present weak fare environment, it expected to make a loss in the second quarter to the end of June and “a significant loss for 2004 and beyond”.

Continental faces a nervous wait to see whether its lead in raising fares is followed by other leading US airlines, or whether competitive pressures will force it to rescind the increases.

US carriers have been seeking for many months to increase domestic fares to reflect higher oil prices but have encountered tough resistance from passengers and have found it difficult to make the increases stick.

Gordon Bethune, Continental chairman and chief executive, said last week “in the US you’re only as good as your dumbest competitor, and there are some dumb competitors out there”.

The US aviation industry is facing its fourth successive year of heavy losses as the high oil prices and the lack of any revenue recovery have blown away hopes expressed at the start of the year that the sector could return to a modest profit in 2004.

Many leading US airlines have simply been too poor after three years of crippling losses to put hedges in place, and the continued pressure from low cost carriers, has made it harder for the airlines to have much pricing power to pass on costs.

A growing wave of airlines outside the US have started to impose fuel surcharges or to raise fares during the past two weeks led by British Airways and Qantas. Others to follow suit include Virgin Blue in Australia and Air France, KLM, SN Brussels Airlines SAS Scandinavian Airlines and Virgin Atlantic in Europe.

In Hong Kong Cathay Pacific said on Wednesday that it had applied to impose a surcharge on passenger flights due to compensate for the surge in jet fuel prices.

James Hughes-Hallett, Cathay chairman, warned, however, that the surcharges could dampen demand in the short-haul leisure market, if they remained in place for more than six months.

Hong Kong-based Dragonair has also applied to the authorities to impose a HK$65 ($8.33) surcharge per one-way flight.

Continental said that its fare increases would only cover 15-20 per cent of the full impact of the present level of oil prices.

Mr Bethune said that if the airline was not able to pass on the extra fuel costs through higher fares it would ultimately be forced to seek “significant wage and benefit concessions and furloughs”.

Continental had originally expected to break even this year after improving operating income by $900m through measures to cut costs and generate increased revenues during the past two years.

A year ago it had budgeted for average jet fuel prices in 2004 of 68 cents per gallon, however, compared with current prices of $1.14 per gallon.

An airline’s fuel bill typically accounts for 12-16 per cent of its total expenditure and is second only to labour costs.

Best airline depends on who you ask. The employees aren’t too thrilled at all. The pilots are still working under concessionary pay scales that were established during their exit from bankrupcy in the early 1990’s. Now there is the threat of concessions on their already 10 year old conession pay?

I’m also not too thrilled by the lack of proper fare increase to cover the increased fuel cost. As Gordon is quoted saying, Continental Airlines is only willing to squeeze 20% of the increased fuel cost out of the passengers and then look to the employees to cover the rest. That’s like a department store offering a sale on shoes by requiring their salesmen to pay the different between the original and sale price so the company doesn’t lose any money. How about raising the cost of tickets as operational costs increase instead of looking to the employees to give up their income so some chump from West Virginia can still buy a coast to coast ticket for $59.