Continental opts for charging for in-flight meals, WestJet CEO stepping down, Republic lower

The wider market pushed North and South American carriers’ shares lower on Monday (15-Mar-2010). The drop came despite a decline in oil prices (-1.8%) to back below USD80 per barrel (to USD79.80).

The Dow (+0.2%) gained only slightly after a late day rally. Earlier in the day, shares were down following a warning from Moody’s that the US was moving closer to losing its 'AAA' credit rating on increasing debt concerns. Energy stocks suffered the most.

Continental opts for charging for in-flight meals

A carrier that has set its customer service above the fray - and won kudos from most organisations assessing customer service - Continental Airlines (shares +1.0% yesterday) is changing its in-flight food service policy. The last of the carriers to eliminate complementary meals in Economy, Continental will change its in-flight meal service this Autumn by introducing a “variety of high quality, healthy food choices”, for purchase in Economy Class on many US/Canada flights, as well as certain flights to Latin America.

"Our traditional free-food model has served us well for many years, but we need to change to reflect today's market and customer preferences," said Jim Compton, Executive VP and Chief Marketing Officer. The carrier will retain complementary Economy cabin service on all intercontinental and certain other international routes and on long-haul domestic routes over six hours, it said.

It is also upgrading food service in the premium cabins. "We are improving our economy meal service with a high-quality, industry-leading food-for-purchase program that is consistent with the strong brand image and high service standards for which our customers recognize us”.

Menu choices and pricing are currently in development and will be announced prior to implementation. Continental will offer food and snack selections that are appropriate for the length of the flight and the time of day. Traditional non-alcoholic beverages and accompanying snacks like pretzels will continue to be complimentary on every Continental flight.

Republic deals with mix grievances, appoints new marketing head

Frontier Airlines maintenance workers have gone to court to block Republic Airways’ (-1.3%) plans to shift their jobs from Denver to Milwaukee, consolidating the work with that done on Republic’s aircraft. However, Republic only offered Frontier mechanics the jobs on the condition the union would be eliminated. The International Brotherhood of Teamsters, representing the maintenance workers, filed last week with the US District Court in Milwaukee for a judgment enforcing the contract.

The argument has delayed the opening of Republic’s Milwaukee maintenance base, with only 35 Frontier employees opting for both the move and the conditions. Republic said it needs 125 to do the work.

In other news, Republic named Ian Arthur VP Marketing and Branding, the company announced yesterday. In addition to marketing and branding for the Frontier/Midwest operations, Arthur will oversee all communications strategies, including government and public relations as well as employee engagement throughout the company.

Arthur oversaw the process for Frontier Airlines that led to the development of the airline's wildly successful "A whole different animal" branding campaign. He was also responsible for rebranding the Beaver Creek ski resort into one of the leading resorts in North America through the "Not Exactly Roughing it" campaign, and he developed the successful "There's no place like together" brand for Exclusive Resorts. He also served as Director of Marketing for Nike, one of the most recognised brands in the world.

The appointment comes on the heels of the company naming James Reichart, a 24-year veteran of Midwest Airlines, vice president of sales, distribution and loyalty programs. He is responsible for agency and corporate sales; the Company's e-commerce Internet presence; loyalty and reward programs, including direct marketing to its frequent flyer members; sponsorships; and distribution, including online travel agencies.

WestJet CEO retires

In Canada, WestJet (-0.9%) President and CEO, Sean Durfy, announced his resignation after markets closed, effective 01-Apr-2010. Mr Durfy cited personal reasons for his departure. Current VP Operations, Gregg Saretsky, will become the LCC’s new President and CEO.

Investors expecting positive FedEx results

Elsewhere, FedEx (+1.9%) was the day’s biggest gainer as analysts expect big things from the carrier when it reports its 3Q2009-10 results on Thursday (18-Mar-2010). Barclays Capital analyst, Gary Chase, stated that while the focus will be on FedEx’s 4Q2009-10 guidance, analysts will turn their focus to earnings expectations for UPS (+0.6%).

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North & South America selected airlines daily share price movements (% change):  15-Mar-2010