The disastrous results of SkyMiles 2015 are in – Delta earned more money in the first quarter of 2015 than in any other Q1 in its history. From Delta’s press release:
- Delta’s adjusted pre-tax income for the March 2015 quarter was $594 million, an increase of $150 millionover the March 2014 quarter on a similar basis. Delta’s adjusted net income for the March 2015 quarter was $372 million, or $0.45 per diluted share, and its adjusted operating margin was 8.8 percent.
- On a GAAP basis, Delta’s March quarter pre-tax income was $1.2 billion, operating margin was 14.9 percent and net income was $746 million, or $0.90 per share.
- Results include $136 million in profit sharing expense, recognizing Delta employees’ contributions toward meeting the company’s financial goals.
- The company used its strong cash generation in the quarter to return $500 million to shareholders through dividends and share repurchases and to make $904 million in pension contributions.
Even more telling for the quarter to come is this – “Delta’s business is performing well, producing the best March quarter, both operationally and financially, in Delta’s history,” said Richard Anderson, Delta’s chief executive officer. “While the strong dollar is creating headwinds with international revenues, it also contributes to the lower fuel prices which will offset those headwinds with over $2 billion in fuel savings this year. We are looking at June quarter operating margins of 16-18 percent (emphasis mine) with over $1.5 billion of free cash flow—these record results and cash flows show that the strong dollar is a net positive for Delta.”
This was a fairly impressive quarter for Delta, and the tailwinds of declining fuel prices are improving the bottom lines of all airlines. Looking ahead, capacity will tick up a bit over the summer, but flatten for the winter quarter. Delta is taking action to drastically reduce capacity in select markets most impacted by the strengthening dollar and lower oil prices.
Overall, 2015 is shaping up just about as I expected. My joke about “disastrous SkyMiles 2015″ aside, Delta remains a strong airline with a weak loyalty program relative to the competition. At the moment, that is a combination that is working for Delta, and I’m not surprised. People (including this blogger) fly Delta for a host of reasons, with the loyalty program being somewhere down the list. You’ve read my reasons before. For most, it’s a combination of schedule, price, and operational reliability along with living near a Delta hub or in a region well-served from one of those hubs.
That works for me, but I won’t pretend that I haven’t changed some of my travel and mileage earning habits in response to a few of the less than wonderful habits I’ve seen develop at SkyMiles. What I’d like to see from Delta is an investment of a tiny fraction of these profits in openness and transparency in the SkyMiles program. Be forthright about where you are headed with SkyMiles and stop the surprises. And until you make the jump to a totally revenue-based program, publish the award chart already.
-MJ, April 15, 2015
Logo image courtesy of Delta Air Lines
If you were wondering what Southwest had in store after its teaser Tweet yesterday, wonder no more. The airline has selected seats from B/E Aerospace for its new 737MAX fleet as well as upcoming 737-800 deliveries beginning in mid-2016. Here’s a look at the seats. (Images courtesy of Southwest Airlines)
“The new aircraft seats are the widest economy seats available in the single-aisle 737 market, and offer a unique design that gives our Customers what they asked for: more space,” said Bob Jordan, Southwest’s Executive Vice President and Chief Commercial Officer. “Serving as the launch customer for this seat is just one of several upcoming milestones related to our bold, new look launched in September of last year, and is specifically aimed at enhancing our Customer Experience.”
Southwest says these will be wider than current seats (a good thing for narrow-body Boeings), offer enhanced legroom and storage, and still allow the airline to reduce the overall weight of the seat. From a personal perspective, the seats look nice, but how tightly they pack them in will tell us how comfortable they really are. Finally, I had hoped to see a power solution from Southwest, perhaps a USB charging solution. Looks like that is an amenity that Southwest will continue to lack. The bottom line – the new seats look pretty nice, but we’ll see how they work out comfort-wise once they’re installed and flying.
Press release including links to additional photos of the seats.
-MJ, April 14, 2015
Around an hour ago I was catching up on the evening news when a “breaking report” came in. An Alaska Airlines flight had experienced an emergency landing. The reason – loud banging and screaming from the cargo hold after takeoff! I immediately turned to MrsMJ and said “betcha he was asleep.” Alaska is now out with a statement on their blog.
“Flight 448, bound for Los Angeles, returned to Seattle shortly after departure today after it was discovered that a ramp agent was still in the cargo hold. The aircraft was in the air for 14 minutes.
After landing, the agent, an employee of Menzies Aviation, walked off the aircraft from the front cargo hold, which is pressurized and temperature controlled. Upon exiting, he told authorities he had fallen asleep. The agent was transported to a local hospital as a precaution. We are actively investigating this matter.”
How’d That Happen?
Even a big airline at a busy hub sometimes has a little slack in the schedule. While I’m fairly sure Alaska and its contractor, Menzies Aviation, have a rule about not sleeping on the job, even if you are on a break, sometimes things happen. A ramp employee with a little spare time, a cargo hold, maybe even with a few bags to hide behind, nap. Unfortunately for this individual, things didn’t quite go as planned. Perhaps his fellow ground crew wasn’t looking out for him either. In any event, I’ll bet there are a lot of suits walking around the ramp in Seattle right now. I’m just glad no one got hurt. (Image courtesy of Alaska Airlines)
-MJ, April 13, 2015
The latest Airline Quality Rating (AQR) report is out, and the news is another black eye for the airline industry. Or is it? As far as I can tell, the AQR takes statistics already published elsewhere, assigns some numbers to them, and spits out a rating. Here’s what the AQR is in the words of its authors.
“The Airline Quality Rating (AQR) is a weighted average of multiple elements important to consumers when judging the quality of airline services. Elements considered for inclusion in the rating scale were screened to meet two basic criteria; 1) an element must be obtainable from published data sources for each airline; and 2) an element must have relevance to consumer concerns regarding airline quality. Data for the elements used in calculating the ratings represent performance aspects (on-time arrival, mishandled baggage, involuntary denied boardings, and 12 customer complaint areas) of airlines that are important to consumers. All of the elements are reported in the Air Travel Consumer Report maintained by the U.S. Department of Transportation.”
I don’t question that those things are not important to consumers, I question why this report gets so much media play? It’s essentially a repackaging of already publicly reported data, perhaps in a slightly more digestible format. It also provides some cute sound bites for media to use to bash airlines….again. Of course, sometimes the airlines deserve it, and sometimes, they don’t. Either way, the annual AQR is not the biggest bit of air travel news ever, even if it is easy for the media to harp about.
-MJ, April 13, 2015
I’ve always regretted never having the opportunity to fly Pan Am. An airline and a brand that represented the best of America. Thanks to the Air Hollywood Studios, I no longer have to wonder what I was missing. Join me and a group of first class travel enthusiasts as we embark on the Pan Am Experience! Our group has chartered Air Hollywood’s Pan Am 747 for an evening of first class travel!!!
Our 4+ hour event includes:
- Check-in Experience
- Champagne / Cocktail Hour
- Gourmet four-course meal
- Airline Uniform Fashion Show
- Air Hollywood tour (Showing off sets and props from Movies such as Bridesmaids, The Wolf of Wall Street, and the hit television show Lost)
This is a private ticketed event, and there are just a few seats left. Our group would love it if an MJ on Travel reader could join us for a great evening reminiscing about a bit of aviation history while enjoying some great food and drink. The upper deck is sold out, but there are a few tickets left for the First Class cabin at $277 each. I hope you can join us for a fun-filled AvGeek evening on May 16th!
Click here for details. Password BREADPLATE.
Images courtesy of Air Hollywood
This week, I’ll be heading to DFW on Friday for Frequent Traveler University. It’s been a while since I’ve attended an FTU, and I’m looking forward to seeing some old friends and making new ones. If you’re headed to FTU, please be sure to say hello! Let’s look at the posts from last week at MJ on Travel.
Enjoy what’s left of your weekend!
-MJ, April 12, 2015
Yesterday, Royal Caribbean International officially accepted delivery of the line’s newest ship, Anthem of the Seas. “There’s a new tune in the air today as global cruise line Royal Caribbean International officially took delivery of its 23rd ship, Anthem of the Seas. Royal Caribbean Cruises Ltd.’s Chairman and CEO Richard D. Fain officially received the new ship from Meyer Werft Yard’s Managing Partner Bernard Meyer in a signing ceremony held in Bremerhaven, Germany. Anthem of the Seas is the world’s most advanced cruise ship and reflects the best of Royal Caribbean’s history of innovating cruise ship design and cruise vacations.”
Anthem of the Seas will initially homeport in Southampton, UK for the spring and summer Mediterranean season. In November, Anthem will reposition to her permanent home of Cape Liberty, NJ, USA, offering cruises to Bermuda, the Caribbean, and New England/Canada. (Image courtesy of Royal Caribbean International)
Much like her sister ship, Quantum of the Seas, Anthem will offer exciting onboard activities “such as the North Star aerial observatory, a glass capsule that takes guests more than 300 feet above the ocean for incomparable panoramic views, and the RipCord by iFLY skydiving and FlowRider surfing simulators. Guests will be dazzled with the ships’ transformative venues, such as the Two70 lounge, a great room by day and an immersive, multimedia entertainment spectacle at night. SeaPlex changes throughout the day to offer bumper cars, disco roller skating, circus school, and basketball and other sports. Guests also will delight at the expansive array of delicious fare in 18 distinctive onboard restaurants and enjoy Royal Caribbean Productions’ industry-renowned entertainment in Music Hall, the Royal Theater, and the Royal Esplanade.”
Personally, I’m actively looking for itineraries aboard Anthem of the Seas, and can’t wait for my next Quantum-class cruise experience.
Anthem of the Seas Statistics
- 16 decks
- 167,800 gross registered tons
- 4,180 guests (based on double occupancy)
- 2,090 staterooms
Revenue-based or mileage-based, the frequent flyer space is always interesting. Right now, there is no program more interesting to me than AAdvantage. While being the “father” of all the airline mileage programs always rates a certain amount of respect, it’s more than that. We should not be surprised that American didn’t follow Delta and United and institute a revenue based program this year, or likely even next year. The world’s biggest airline has a lot on its plate, and making the technological changes behind the scenes that are required to convert to a revenue based program are no doubt daunting. The act of merging two big programs, just as daunting, if not more.
So far, American has done right by AAdvantage. They’ve taken a staged approach to merging, and while I know there were a few nits here and there, I think the way the AAdvantage and Dividend Miles merger was counducted yielded near miraculous results. With its recent elite qualifying point promotion, AAdvantage has found a way to acknowlege the revenue contribution of big spenders without annoying others.
There is more than one example on the blog of my calling the “elite qualifying point” an alternative way to do things. American’s latest promo offers bonus EQPs for premium cabin travel. This is just one example of finding a way to provide superior rewards to high revenue customers to compete with Delta and United, who reward based on spend, in the context of a mileage based program.
The bottom line this Friday afternoon – the GrAAndDaddy still rules. While I remain unconvinced that we will not see a more revenue-based AAdvantage in 2017, perhaps sooner, I’ve always said they could go their own way. The advantage (no pun intended) of being last is you get to watch what works and what doesn’t for everyone else.
-MJ, April 10, 2015
Quantum of the Seas features Felicia the bear. What sort of statuesque animal art will Anthem of the Seas offer? Anthem, meet GiGi the giraffe. Offered without comment on this beautiful Thursday evening.
There is still time to take advantage of a tremendous travel opportunity from Southwest Airlines if you live in Atlanta. As I’ve posted before, Southwest is offering an amazing promotion to Atlanta residents. Fly three roundtrips before May 17, 2015, and receive a Companion Pass good through the end of the year.
While I’ve never had occasion to earn a Companion Pass, in my opinion, it’s easily the best frequent flyer benefit out there for domestic travelers that can fly Southwest. There’s still time to fly those roundtrips and pick up a Companion Pass to call your own. Visit southwest.com/atlanta to view the terms and conditions of the promotion and to register.
-MJ, April 9, 2015