United States of America
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- International Airlines serving this country (excluding codeshares)
Air Travel is frequently the most practical method of covering the large distances between cities in the USA. The domestic air system is extensive, with dozens of competing airlines, hundreds of airports and thousands of flights daily. The US is the world's largest aviation market. Domestic airlines have mostly rebounded since September 11. Delta (now merged with Northwest), United (merging with Continental) and US Airways (merging with American) have each entered and emerged from bankruptcy still flying, though mergers and downsizing have had an impact on the travel experience. The US has five major international airlines that function in a similar manner and size as a national carrier; American Airlines, United Airlines, Continental Airlines, Delta Air Lines and US Airways. The expansion of LCCs such as Southwest Airlines and JetBlue has increased competition and lowered prices domestically and in some cross-border markets.
The Federal Aviation Administration (FAA) is an agency of the United States Department of Transportation with authority to regulate and oversee all aspects of civil aviation in the US. The Transportation Security Administration (TSA) is the government agency responsible for security in all modes of transportation and is solely responsible for carrying out screening of passengers and their baggage (both checked and carry-on) at 450 airports across the US.
Airports in United States of America
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Operational improvement is a top priority for Spirit Airlines' new CEO, who has held the position for just six months. Data from the US government show that Spirit is making progress in some areas of operations, but still lags behind other US airlines. As the busy summer season kicks into full force, Spirit’s commitment to improving operations could be put to the test.
As Spirit’s rivals hone their product segmentation strategies to match Spirit’s low fares, operational improvement takes on a whole new level of importance for the ultra-low cost airline and its particular business model. Spirit’s ULCC rival Frontier is outperforming Spirit in some operational metrics.
Spirit is in undergoing other changes, including a change in its fleet mix to smaller-gauge Airbus narrowbodies. The company has intimated that it would examine smaller markets in the future to decrease competition with larger airlines. Many of the new routes that Spirit has introduced in 2016 feature Southwest and Delta as competitors and it appears that Spirit now has the largest network overlap with Southwest, rather than with American Airlines.
One of the most discussed aspects of the pending merger between Alaska Air Group and Virgin America is how Alaska would navigate the sensitivities of dissolving the Virgin America brand, given the fierce brand loyalty that Virgin America engenders among higher-yielding passengers. Now it appears that Alaska is giving serious consideration to retaining the Virgin America brand.
Although sustaining two brands post-merger is rare in the US industry, the combination of Alaska and Virgin America is unique in many aspects – most notable is that both brands generate strong positive sentiment among customers. That has not been the case for some US airline mergers, where in some cases a less popular or less prominent brand was retired.
Despite the complexities inherent in running separate brands, there are valid business reasons for Alaska to seriously evaluate the pros and cons of adopting that strategy. One important factor is preserving the levels of revenue that made the deal attractive in the first place.
Although Delta Air Lines is facing the same revenue pressure as other US carriers, the company is one of the most successful airlines worldwide by any other number of measures; including cash flow, return on invested capital and shareholder rewards. Delta started the product segmentation movement in the US, allowing the airline to create competitive gaps with its rivals, which are in the early stages of creating fare families.
But Delta also makes moves that trigger a certain amount of head-scratching, reflected in its recent decision to pull a long-term sponsorship of a local Atlanta theatre after Qatar Airways held a private event celebrating its recent launch of service to the city. The decision generated negative PR for Delta and underpinned the general perception of its protectionist philosophy – running counter to the globalisation necessary for the airline industry to thrive.
Not surprisingly, Delta’s new CEO appears to be adopting a status quo stance on some of the more controversial issues that the company has adopted, including the Gulf airline subsidy debate and the privatisation of the US ATC system. The perception is that Delta increasingly presents a go-it-alone attitude, which could hurt its brand and image over the long term, as well as its prospects for international expansion.
Singapore Airlines is reintroducing capacity into the US market in Oct-2016 as it launches a daily nonstop service to San Francisco. The new flight is strategically important because it enables SIA to accelerate the resumption of nonstop flights to the US by two years and compete more effectively against United, which launched nonstop flights on the Singapore-San Francisco route at the beginning of Jun-2016.
The new Singapore-San Francisco nonstop flight will increase SIA’s US operation from 40 to 47 weekly frequencies. However, its total capacity to the US will increase a relatively modest 9% as SIA is also downgauging seven frequencies from A380s to 777-300ERs.
The 9% increase only partially offsets a significant earlier reduction in capacity to the US. SIA reduced capacity to the US by 19% in late 2013 and by a further 5% in 2015. As a result, SIA’s US capacity in Nov-2016 will still be down 12% compared with the situation just over three years ago. Most of its main Asian competitors have significantly increased US capacity during this period.
Jacksonville International Airport represents Florida's largest city, one that has a comprehensive industrial and commercial presence as well as being an attraction to tourists of all kinds.
Despite the city’s commercial status, a five million ppa throughput, and a high degree of connectivity compared with a local airport peer group, the airport's traffic growth has stalled in recent years. Most domestic flights are to hubs. It is hoped that Cuban flights might start up shortly, placing Jacksonville strategically.
This report looks at present and future growth trends at the airport, local airport statistics, how it matches up to competing airports across a range of metrics, at construction activities and airport ownership.
Alaska, jetBlue and Southwest cost projections; good in the short term but long term challenges loom
Just as the large three global US airlines – American, Delta and United – work to contain their unit costs, their rivals Alaska, jetBlue and Southwest are committed to keeping their respective unit costs in line as the current revenue environment in the US remains weak.
The latter three airlines face different cost dynamics in the future. Alaska is attempting to embark on a merger with Virgin America, which will inevitably create some cost pressure as the full integration gets under way. Southwest is in the middle of complex pilot and flight attendant negotiations, which makes predicting its cost performance in the near- to mid-term difficult. At some point jetBlue will also conclude a new pilot contract that will affect its cost structure.
Cost performance results for Alaska, jetBlue and Southwest for 2Q2016 and the full year look reasonably favourable, although Alaska has refined its 2016 targets slightly, driven in part by increases in performance-based pay. But its costs should remain competitive compared with its peers, and solidly lower than those of the larger network carriers.