Wednesday, August 24, 2016

United to Compete With Delta for Automotive Tech Travelers in San Francisco-Detroit Market

United Airlines will resume daily service to Detroit Metro Airport from San Francisco International Airport on June 8, 2017 after a 25 year hiatus. United will operate the route on the 128 passenger A319 aircraft.   

Airline
Route
Frequency
Aircraft
Departure
Arrival
Start Date
United
DTW-SFO
1x Daily
A319
5:30 pm CT
7:50 pm PT
June 8, 2017
United
SFO-DTW
1x Daily
A319
8:30 am CT
4:20 pm PT
June 8, 2017


Delta is currently the only airline flying nonstop between San Francisco and Detroit. Delta offers five daily flights operated on three different aircraft types (3x 737-9, 1x 757-200, 1x 757-300). Last year Delta carried around 350,000 passengers between the two cities. 

Automotive Tech Ties Deepen 
While a significant portion of the passenger traffic on Delta's DTW-SFO service consists of transiters, recent developments in the automobile industry are spurring O&D demand between the two cities.  

The big three automakers in Detroit (Fiat-Chrysler, Ford, and GM) are increasingly coming under pressure from Silicon Valley heavyweights who are intent on disrupting the industry either by, in the case of Google, developing a fully autonomous car or, in the case of Uber, creating a fully autonomous ride-share service 

These pressures have pushed automakers to forge alliances with tech companies, such as GM's partnership with the ride-sharing service Lyft, as a way to protect the future of their businesses. Automakers also have partnerships with silicon valley firms that help develop the software needed for the increasingly higher tech and connected cars that the auto manufacturer's are putting on the market today. 

The relationship between Detroit and Silicon Valley will only grow as technology becomes more integrated into automobiles. The important business relationship between Silicon Valley and Detroit provides airlines with a high growth domestic market with a strong passenger base of business travelers  

Delta's Turf   
United's entrance into the SFO-DTW market is a testament to the strong demand for travel between the two cities and the potential for future growth. However, United is timidly testing the waters of the market deciding to use the A319, which is the airline's smallest mainline narrow body aircraft, on the DTW-SFO route

Delta unquestionably holds the upper hand in the market. Delta has more frequencies on larger aircraft and a loyal base in Detroit. 

While Delta will continue to control the majority of the market share between the two cities, increased demand for travel between DTW and SFO should be able to support United's entrance into the market. 

Delta Upgrades Equipment on DTW-SFO Route 
According to Airlineroute.net, Delta will introduce its A330-200 aircraft into the DTW-SFO market beginning in March of 2017. Delta's use of wide body aircraft in the DTW-SFO market provides business passengers with an incentive to book with Delta due to the availability of the Delta One business class on a domestic flight. It also lowers the cost per seat which allows Delta to more aggressively price its fares in the face of competition 

Conclusion 
United will face major competition from Delta as the airline ends Delta's virtual monopoly on the DTW-SFO market. Strong demand for travel between the two cities should provide enough of a buttress for UnitedAs the route matures for United, expect larger equipment and more frequencies as the airline tries to court automotive tech business travelers.This is certainly an interesting route to watch in the coming years.  

Wednesday, August 17, 2016

Hawaiian Airlines Leads All U.S. Airlines in June On-time Performance


Hawaiian Airlines had the best on-time performance in June out of all the major airlines in the U.S. with 91.1% of its flights arriving on-time. 

Out of the big four legacy carriers (American, Delta, United, and Southwest) Delta was on top with 83.4% of its flights arriving on-time. United continued its recent trend of strong on-time numbers claiming 2nd place out of the legacies, and 4th overall, with 79.2% of its flights arriving on-time. 

American Airlines had a poor showing in June garnering last place with only 72.4% of its flights arriving on-time.  

Frontier Airlines led all U.S. LCCs with an on-time number of 75.6%. 

Tuesday, August 16, 2016

Delta Updates its Business Class Product

Delta has unveiled an updated version of its business class product. The new product, called Delta One Suite, is the first business class cabin in the industry with sliding doors at every seat. 


In addition to full-height sliding doors, the Delta One Suite product features modern business class staples such as universal power outlets, USB ports, customizable ambient lighting, a memory foam-enhanced comfort cushion, and an 18-inch HD IFE monitor. 


The Delta One Suite will make its debut on Delta's new A350 aircraft in 2017 and then be subsequently rolled out on the airline's 777 aircraft in the years after. 

The Delta One Suite is a big improvement over Delta's current business class and not only sets the bar for business class hard products in the U.S. but also around the world. 

Monday, July 25, 2016

The 2016 Farnborough International Air Show in Review

The 2016 installment of the Farnborough Air Show was a much tamer affair compared to the order bonanzas of 2014 at Farnborough and 2015 at the Paris Air Show. 607 order commitments and 135 options were placed by airlines and lessors at the 2016 Farnborough Air Show for a total of 742 aircraft. In 2015, there were 1,223 order commitments at the Paris Air Show.   

Airbus led all manufacturers with 405 order commitments and options with 208 of those firm orders. Airbus was buoyed by Air Asia's massive $12.6 billion order for 100 A321neo aircraft with options for 100 more. Boeing received 179 order commitments and options with 78 of those firm orders. COMAC received 90 order commitments, all for its ARJ21 regional aircraft. Embraer received 25 order commitments and options while Bombardier only received a total of 3 orders 

Airbus dominated Boeing in the narrow body section with 390 order commitments and options to Boeing's 150. Airbus received 375 order commitments and options for its A320neo family while Boeing received 116 orders for its 737MAX family of aircraft.  

In the wide body segment, Boeing received 29 orders and commitments to Airbus' 15 orders. Boeing was boosted by an order for 16 747-8F by Russian freight company Volga Dnepr, which was announced before the air show but was finalized at Farnborough. When the 747-8F order is excluded, Boeing received only 13 wide body orders to Airbus' 15.  

Other News From Farnborough 

Boeing plans to lengthen the 737MAX 7 to accommodate more seats from the current 126  to 138 seats in the new lengthened version. Boeing also said it is looking at lengthening the 180 seat 737MAX 9 as well.  

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It was a busy week for Qatar Airways' investment arm as the gulf carrier announced it will acquire a 10% stake in LATAM worth $613 million and a 49% stake in Italian airline Meridiana. 

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Sukhoi unveiled a sport jet version of its fledgling Superjet 100 aircraft at the Farnborough Air Show. The Sukhoi SportJet, which is designed to ferry around the world's best athletes and their teams, will feature seats that can monitor heart rate, hydration and oxygen levels, and an in-flight media system loaded with video analysis, motivational videos, and training videos. The SportJet  also features a recovery zone and physical therapy and training areas. The first SportJet is expected to be completed in 2018.  

*** 

Airbus announced a major rate cut for its struggling A380 program. The production rate of the A380 will drop to only one plane a month in 2018, down 50% from the current rate 

*** 
Total Order Commitments and Options 
Boeing 
Airline/Lessor
Aircraft Type
Quantity
Order Type
Xiamen Airlines
737 MAX 200
30
Order LoI/MoU
Donghai Airlines
737 MAX 8
25
Order LoI/MoU
Air Europa
737 MAX 8
20
Firm Order
Volga-Dnepr
747-8F
16
Firm Order
Undisclosed Chinese customer
737 MAX
15
Order LoI/MoU
Undisclosed Chinese customer
737 Next Gen
15
Order LoI/MoU
Standard Chartered
737-800
10
Firm Order
TUI Group
737 MAX 8
10
Firm Order
Kunming Airlines
737 MAX 7
10
Order LoI/MoU
EgyptAir
737-800
9
Firm Order
Air Lease Corp.
737 MAX 8
6
Firm Order
Ruili Airlines
787-9
6
Firm Order
Donghai Airlines
787-9
5
Order LoI/MoU
TUI Group
787-9
1 (+1 Option)
Firm Order

Airbus

Airline/Lessor
Aircraft Type
Quantity
Order Type
AirAsia
A321neo
100 (+100 options)
Firm Order
GoAir
A320neo
72
Order LoI/MoU
Synergy Aerospace
A320neo
62
Firm Order
Germania
A320neo
25 (+15 options)
Firm Order
Jetstar Pacific
A320ceo
10
Order LoI/MoU
Virgin Atlantic
A350-1000
8
Firm Order
Wow Air
A321ceo
4
Firm Order
Air Lease Corp.
A350-900
3
Firm Order
Arkia
A330-900neo
2
Firm Order
Aer Lingus
A330-300
2
Firm Order
Air Lease Corp.
A321ceo
1
Firm Order
Air Côte d'Ivoire
A320neo
1
Firm Order
Embraer 
Airline/Lessor
Aircraft Type
Quantity
Order Type
Arkia
E195-E2
6 (+4 options)
Order LoI/MoU
Kalstar
E195-E2
5 (+5 options)
Firm Order
Nordic Aviation Capital
E190-E2
4
Firm Order
Japan Air Lines
E190
1
Firm Order

COMAC 
Airline/Lessor
Aircraft Type
Quantity
Order Type
China Aircraft Leasing
ARJ21
60
Order LoI/MoU
AVIC Leasing
ARJ21
30
Order LoI/MoU

Mitsubishi 
Airline/Lessor
Aircraft Type
Quantity
Order Type
Rockton
MRJ90
10 (+10 options)
Order LoI/MoU

Bombardier 
Airline/Lessor
Aircraft Type
Quantity
Order Type
Porter Airlines
Q400
3
Firm Order

Source: FlightGlobal