'Revenue challenges' prompt Southwest to adopt assigned seating
July 26, 2024
US low-cost carrier Southwest Airlines intends to drop its long-standing open-seat, single-class cabin policy, and begin assigning seats and offering "premium seating options" to customers. "We are taking urgent and deliberate steps to mitigate near-term revenue challenges and implement longer-term transformational initiatives that are designed to drive meaningful top and bottom-line growth," Southwest chief executive Bob Jordan states. "Our implementation of assigned and premium seating is part of an ongoing and comprehensive upgrade to the customer experience, one that research shows customers overwhelmingly prefer." Southwest reported second-quarter unit revenue that was 4% down versus the second quarter 2023, a decline that the Dallas-based company says is an outcome of "industry-wide domestic capacity growth outpacing demand". Southwest forecasts that third-quarter unit revenue will be flat to down 2% year on year. Its second-quarter operating profit of $398 million slid 50% from the $795 profit made in the second quarter of 2023, on $7.4 billion in total revenue and expenses of $7 billion. Capacity in the second quarter had been raised 9% year on year. Like its rival US carriers, Southwest is scaling back its capacity plans for the rest of 2024 to counteract falling ticket prices. It estimates that it will raise third-quarter capacity 2% versus the same period in 2023, and reduce fourth-quarter capacity 4%. The timing of its new offerings and cabin layout will be discussed during the carrier's investor day in late September. Jordan, who has lately been fending off calls for his removal by activist investor Elliott Management, adds: "Our second-quarter performance was impacted by both external and internal factors and fell short of what we believe we are capable of delivering. "The Southwest Airlines board of directors, our leadership team, and I are all aligned and committed to serving the interests of and creating lasting value for our shareholders, who have provided us with highly valuable and candid feedback on our performance and path forward." Southwest ended the second quarter with $10 billion in cash, cash equivalents and short-term investments, and current liabilities of $14 billion. During the period it received five Boeing 737 Max 8 aircraft and retired six 737-700 aircraft and one -800 aircraft. The all-737 carrier ended the second quarter with 817 aircraft. "Given the company's ongoing discussions with Boeing and expected aircraft delivery delays, [we continue] to plan for approximately 20 [Max 8] aircraft deliveries in 2024," Southwest says.
Eritrean authority suspends Ethiopian flights from 30 September
July 25, 2024
Ethiopian Airlines has received a notice from the Eritrean civil aviation authority "indicating the suspension of all Ethiopian Airlines flights to Eritrea", effective 30 September 2024. The carrier says in a LinkedIn post that the specific reasons for this suspension have not been disclosed to it. It adds that it is seeking clarification from the authority and is "committed to resolving any issues amicably and promptly".
JetBlue boosts winter capacity out of New England
July 25, 2024
JetBlue Airways is expanding its network in the New England region by adding 20% more seats this northern winter from Boston Logan International and other airports, primarily connecting to leisure destinations in Florida. The carrier will operate daily seasonal flights from Providence in Rhode Island to Fort Myers and Tampa from 27 October, while daily year-round flights to San Juan will begin on 28 October. Daily year-round flights between Presque Isle in Maine and Boston will also start from 5 September. The airline will also launch year-round daily flights from Manchester-Boston Regional airport to Orlando from 25 January, and seasonal flights to Fort Myers and Fort Lauderdale will be operated thrice a week and four times weekly from 23 January and 24 January, respectively. Moreover, the airline is also planning to commence thrice-weekly seasonal service between Portland International and Orlando from 28 October. With this, the airline that its seats at Providence will nearly triple this northern winter compared to last, while seats at Hartford will increase 30%. The airline will average 18 new daily departures from New England this winter, with six new routes between New England and Florida. Beginning in October, JetBlue will launch nonstop service from Buffalo Niagara International to Palm Beach International airport on a seasonal basis. JetBlue will also commence flights for the first time from Long Island MacArthur airport, offering daily flights to Orlando, and four-times weekly flights to Fort Lauderdale and West Palm Beach starting in October. The airline will also add a second daily Boston-Phoenix route, with both services to be operated by aircraft featuring its Mint business class product.