Panama Jack
22nd Feb 2005, 13:49
US Airways Cashing In On Region - Sunday 20, February-2005
by Bernard Babb
The Caribbean has emerged as an attractive market for struggling United States airlines and more recent upstarts – the low cost carriers.
With the global aviation industry facing the most turbulent period ever, leading US airlines have been steadily expanding service to the region, seeking to capitalise on relatively high volumes of leisure and VFR traffic (visiting friends and relatives) in and out of the Caribbean.
According to experts, the Caribbean offers some of the highest passenger revenue per seat-mile in the business and European carriers have also been expanding south, with BMI (formerly British Midlands) being the latest out of Manchester, England.
In addition, in the post-September 11 (2001) period, yield in the Caribbean was not as badly eroded as in the domestic United States market, where too much capacity is chasing less demand.
For US Airways, the seventh biggest carrier in North America which has sought Chapter Eleven (bankruptcy) protection twice in three years, the Caribbean has emerged as a critical element of its transformation strategy.
Only last week, the airline officially opened a new hub in Fort Lauderdale to service the Caribbean and Latin America and also began new direct flights from Charlotte, North Carolina, to Barbados, St Lucia and Costa Rica.
The Charlotte to Barbados service is the second direct service by US Air to the island and local tourism marketers deem it critical to opening new markets in the Midwest and southeastern United States.
“You can say that the Caribbean is a key component of our transformation plan . . . the worst is behind us in our efforts to turn around the airline,” said Joe Ondrus, a senior executive with US Airways.
In 1994, US Airways’ service to the Caribbean included jet flights to Nassau, San Juan, St Thomas, St Maarten, Cayman Islands and Jamaica.
However, in recent years the airline’s Caribbean and Latin American network has grown 400 per cent.
At present, US Airways serves 23 Caribbean and Latin American destinations from its Charlotte hub and offers another 19 non-stop flights to the region from its Philiadelphia hub.
With the creation of the Fort Lauderdale hub, the airline has expanded significantly and more than doubled its daily flights while connecting 10 Caribbean and Latin American destinations with key cities in the Northeast and Florida.
US Airways also plans to introduce new service from Fort Lauderdale to Guatemala City, Kingston (Jamaica), Panama City, San Salvador, Santo Domingo, San Juan and San Jose Costa Rica.
“With nearly 30 destinations in the region by the end of this month (February), US Airways is committed to bringing our customers even greater access to the Caribbean and Latin America,” said Douglas D. Leo, US Airways vice-president for International Sales.
Last year US Airways lost US $611 million and was forced to seek bankruptcy protection as rising fuel prices dealt more harsh blows to the industry.
Amercan carriers reported losses in excess of US$5 billion in 2004, with American Airlines, the world’s largest airline, reporting a loss of US $821m and Continental, US$363 million.
Having recently concluded cost-savings agreements with all its labour groups, totalling US$1b a year in savings, US Airways expects to emerge from Chapter Eleven protection by June 30 this year.
Continental Airlines, which also boast strategic alliances with a number of smaller regional carriers, have also expanded swiftly in the region over the last three years, taking a route charted long ago by established player American Airlines.
American Airlines, with a hub in Puerto Rico that saw an increase in traffic of 11 per cent in 2004, offers the most expansive coverage of the region, using both jet service and smaller American Eagle aircraft.
In recent times, Continental flew to just eight Caribbean destinations but now serves more than 50 in 24 countries in Latin America and the Caribbean.
Seeking to carve a bigger slice of the pie, it added Barbados to its schedule in December 2003 and also owns a 45-per cent stake in Copa Airlines of Panama, along with being a partner in Cape Air of Puerto Rico.
Delta expects to begin new service to St Lucia in April and has also been eyeing Barbados and Trinidad in its expansion efforts.
Tourism traffic
Together these carriers account for a major percentage of tourism traffic to the Caribbean and could likely take advantage of contractions in service by struggling regional airlines, such as Air Jamaica, which has been restructuring and closing some of its North American routes.
With airlift so vital to the multi-billion-dollar Caribbean tourism industry, destinations have also been wooing carriers in different ways.
While some have offered direct cash support, Barbados has devised a model of attracting capacity through cooperative marketing arrangements which has been the buzz of the regional tourism industry.
In 2002, the Barbados Government committed BDS$25 million to working with airlines in joint marketing partnerships, to drive business and fill seats from the major tourist markets.
In the most turbulent of times in aviation history, carriers are compelled to find new profit centres in order to stay in the sky and the Caribbean continues to be a target area.
Link to Article (http://www.nationnews.com/StoryView.cfm?Record=58026&Section=LO)
by Bernard Babb
The Caribbean has emerged as an attractive market for struggling United States airlines and more recent upstarts – the low cost carriers.
With the global aviation industry facing the most turbulent period ever, leading US airlines have been steadily expanding service to the region, seeking to capitalise on relatively high volumes of leisure and VFR traffic (visiting friends and relatives) in and out of the Caribbean.
According to experts, the Caribbean offers some of the highest passenger revenue per seat-mile in the business and European carriers have also been expanding south, with BMI (formerly British Midlands) being the latest out of Manchester, England.
In addition, in the post-September 11 (2001) period, yield in the Caribbean was not as badly eroded as in the domestic United States market, where too much capacity is chasing less demand.
For US Airways, the seventh biggest carrier in North America which has sought Chapter Eleven (bankruptcy) protection twice in three years, the Caribbean has emerged as a critical element of its transformation strategy.
Only last week, the airline officially opened a new hub in Fort Lauderdale to service the Caribbean and Latin America and also began new direct flights from Charlotte, North Carolina, to Barbados, St Lucia and Costa Rica.
The Charlotte to Barbados service is the second direct service by US Air to the island and local tourism marketers deem it critical to opening new markets in the Midwest and southeastern United States.
“You can say that the Caribbean is a key component of our transformation plan . . . the worst is behind us in our efforts to turn around the airline,” said Joe Ondrus, a senior executive with US Airways.
In 1994, US Airways’ service to the Caribbean included jet flights to Nassau, San Juan, St Thomas, St Maarten, Cayman Islands and Jamaica.
However, in recent years the airline’s Caribbean and Latin American network has grown 400 per cent.
At present, US Airways serves 23 Caribbean and Latin American destinations from its Charlotte hub and offers another 19 non-stop flights to the region from its Philiadelphia hub.
With the creation of the Fort Lauderdale hub, the airline has expanded significantly and more than doubled its daily flights while connecting 10 Caribbean and Latin American destinations with key cities in the Northeast and Florida.
US Airways also plans to introduce new service from Fort Lauderdale to Guatemala City, Kingston (Jamaica), Panama City, San Salvador, Santo Domingo, San Juan and San Jose Costa Rica.
“With nearly 30 destinations in the region by the end of this month (February), US Airways is committed to bringing our customers even greater access to the Caribbean and Latin America,” said Douglas D. Leo, US Airways vice-president for International Sales.
Last year US Airways lost US $611 million and was forced to seek bankruptcy protection as rising fuel prices dealt more harsh blows to the industry.
Amercan carriers reported losses in excess of US$5 billion in 2004, with American Airlines, the world’s largest airline, reporting a loss of US $821m and Continental, US$363 million.
Having recently concluded cost-savings agreements with all its labour groups, totalling US$1b a year in savings, US Airways expects to emerge from Chapter Eleven protection by June 30 this year.
Continental Airlines, which also boast strategic alliances with a number of smaller regional carriers, have also expanded swiftly in the region over the last three years, taking a route charted long ago by established player American Airlines.
American Airlines, with a hub in Puerto Rico that saw an increase in traffic of 11 per cent in 2004, offers the most expansive coverage of the region, using both jet service and smaller American Eagle aircraft.
In recent times, Continental flew to just eight Caribbean destinations but now serves more than 50 in 24 countries in Latin America and the Caribbean.
Seeking to carve a bigger slice of the pie, it added Barbados to its schedule in December 2003 and also owns a 45-per cent stake in Copa Airlines of Panama, along with being a partner in Cape Air of Puerto Rico.
Delta expects to begin new service to St Lucia in April and has also been eyeing Barbados and Trinidad in its expansion efforts.
Tourism traffic
Together these carriers account for a major percentage of tourism traffic to the Caribbean and could likely take advantage of contractions in service by struggling regional airlines, such as Air Jamaica, which has been restructuring and closing some of its North American routes.
With airlift so vital to the multi-billion-dollar Caribbean tourism industry, destinations have also been wooing carriers in different ways.
While some have offered direct cash support, Barbados has devised a model of attracting capacity through cooperative marketing arrangements which has been the buzz of the regional tourism industry.
In 2002, the Barbados Government committed BDS$25 million to working with airlines in joint marketing partnerships, to drive business and fill seats from the major tourist markets.
In the most turbulent of times in aviation history, carriers are compelled to find new profit centres in order to stay in the sky and the Caribbean continues to be a target area.
Link to Article (http://www.nationnews.com/StoryView.cfm?Record=58026&Section=LO)