Airline Weekly Lounge Podcast

It's not other airlines. It's the bus. That's where Mexican ultra-low-cost carrier Volaris sees the most opportunity to grow: by poaching passengers from the country's long-distance bus network. In this episode of the Airline Weekly Lounge, Editor Madhu Unnikrishnan talks to Skift Travel Editor-in-Chief Tom Lowry about Volaris' growth strategy, how it allows passengers to pay for tickets, and why its employees are sometimes escorted out of bus stations by security.

Will there be a deal or won't there? The Indian government now says it wants to sell 100% of the state-owned carrier, but who will buy it? The airline is notoriously saddled with debt and has a restive labor force. Airline Weekly Senior Analyst Jay Shabat acknowledges Air India's problems but notes that the beleaguered carrier actually has some strengths and assets that a would-be buyer could find attractive. Will any company step forward to buy the Flying Maharajah? Listen to this week's episode to find out.

Skift Europe Editor Patrick Whyte joined Skift Airline Weekly Editor Madhu Unnikrishnan to share his insights on the latest in European airline news. First, of course, Whyte takes a look at why Air Europa's parent company Globalia would want to sell one of its largest business units to IAG. Is there a future for vertically integrated travel companies, especially after behemoth Thomas Cook went bankrupt? Whyte points out, however, that parts of the bankrupt Thomas Cook's empire have lived to see another day, including Condor and the company's Nordic operations. Even the travel agencies have a new lease on life. Whyte also discussed Air France/KLM's plans for the future.  Listen to the full podcast here, on iTunes, Google Play, or wherever you get your podcasts.

International Airlines Group (IAG) had a surprise for the airline industry this week: It stated its intention to buy Spanish carrier Air Europa. This wasn't a surprise to Skift Airline Weekly, however, which earlier this year reported on the rumors afloat about the acquisition. What's in it for IAG?  Skift Airline Weekly Senior Analyst Jay Shabat walked us through the rationale for the acquisition, the regulatory issues that may lie ahead, and just why Madrid may not be the next European megahub. Shabat also explained why IAG, which already owns Iberia, Iberia Express, Vueling, and Level, is getting its fifth Spanish airline. Listen to the full episode.

Skift Airline Weekly Editor Madhu Unnikrishnan caught up with Anders Lindström, Norwegian's director of communications for the U.S., at San Francisco International Airport on Monday when the carrier launched San Francisco-Barcelona flights. Lindström explained why Norwegian is moving some flights from Oakland to SFO, and what routes in the U.S. are doing well for the carrier. He also talked through the third-quarter results and why he thinks the carrier has turned the corner from its tough year.

The UK government this week engages in another set of inquiries on why Thomas Cook went bankrupt, which is the perfect time to ask Skift Europe Editor Patrick Whyte, who has been covering the story, what happened. How did the "booking clerk to the empire" go belly-up after more than 150 years? Whyte explains that the company was struggling under a massive debt load and had struggled with maintaining a large number of travel agencies as booking habits changed. But Whyte noted that parts of the business remain — Condor, in Germany, and the subsidiary in the Nordic countries. European and UK holidaymakers may see fares rise in the short term as airlines backfill the capacity hole left by Thomas Cook's bankruptcy, but Whyte believed the capacity shortfall would be filled by next summer. 

Back in the aughts, Airlines for America's Chief Economist John Heimlich often showed a slide with an alarming statistic: Coffee giant Starbucks' market capitalization was more than that of the entire U.S. airline industry combined. So much has changed in the last 10 years, as the airline industry recovered from the 9/11 terrorist attacks, SARS, and oil prices of $148 per barrel, among other trials and tribulations. Skift Airline Weekly Editor Madhu Unnikrishnan and Heimlich had a chance to catch up at the Boyd Group's International Aviation Forecast Summit in August. Unnikrishnan reminded Heimlich of that slide and asked him if those turbulent times could return. Heimlich explained how the industry has changed: different management, improved aircraft technology, and consolidation being among the most important factors. But he warned that the airline industry is uniquely exposed to exogenous shocks, like geopolitical turmoil, weather, and the price of oil. The airline industry is continuing to evolve, with new aircraft technology, like the Airbus A321 XLR, making low-cost, long-haul a better business proposition, Heimlich said. But will anyone crack that low-cost, long-haul code? And what about small-community air service in the U.S. and Canada, now that airlines have retired or are in the process of retiring their smallest aircraft?

In this episode of the Skift Airline Weekly Lounge podcast, Skift Travel Senior Aviation Business Editor Brian Sumers and I discuss the interviews we did on stage at Skift Global Forum in New York City, Sept. 18–19. Air France/KLM CEO Ben Smith told us how he's trying to rationalize and simplify Air France's network (while leaving KLM largely alone). American Airlines Chief Financial Officer Derek Kerr promised the carrier would recover from a difficult summer. And Delta CEO Ed Bastian spoke about transforming the airline into a trusted global brand. Sumers and I chew on our conversations at Skift Global Forum and wonder just why Smith's favorite aircraft is the B747.  —Madhu Unnikrishnan, editor, Skift Airline Weekly  

Andrew Watterson, Southwest's chief revenue officer, had a few minutes to talk  to Skift Airline Weekly Editor Madhu Unnikrishnan and Skift Travel Senior Aviation Business Editor Brian Sumers at the Boyd Group's International Aviation Forecast Summit in Las Vegas last month. Watterson still is bullish on Hawaii and says Southwest will expand its service to the state from California. He explained why Southwest pulled out of Mexico City and how its international network is optimized to take U.S. residents to Mexican and Caribbean leisure destinations. Watterson also explained that Southwest is seen as a leisure carrier in the Eastern half of the country and a business carrier in the West.

Rosemary Vassiliadis, director of aviation for Clark County, Nevada, leads operations at Las Vegas McCarran International Airport and oversees four other airports in southern Nevada. Vassiliadis thinks airlines are flat wrong in their opposition to raising the passenger facility charge, or PFC. Airports have long argued for raising this fee to a maximum of $8.50 per passenger, up from $4.50 today, but airlines say doing so would crimp demand for travel. This isn't true, Vassiliadis argued in this interview, pointing to the many — and higher — ancillary fees that airlines already levy that haven't dampened demand. Airports are pushing for the increase, ultimately, in order to better serve the passenger, she noted. Vassiliadis also told Skift Airline Weekly about McCarran's new air service and plans for a new airport on the California-Nevada border.