Four bidders vying for Nunavut’s new air travel contracts

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The Government of Nunavut is just a few months away from signing new agreements it hopes will change air travel for the better.

The GN recently closed its request for proposals for new medical and duty travel contracts .

Following both a study and public consultations, it opted to combine medical and duty travel for its new round of contracts, while allowing companies to bid on up to seven routes throughout the territory.

This new set of contracts also includes air freight for general cargo and a public travel component, which requires bidders to offer a percentage of seats to be made available to the general public at an economy-class fare.

The final register lists four applicants that have filed a total of 20 proposals: 16 from Calm Air, two from Canadian North, one from First Air and one from North Star Air, owned by the Northwest Company.

Now, Nunavut’s Department of Community and Government Services will go through those proposals, with the goal of signing new agreements by the summer.

The new contracts would come into effect on January 2020.

The request for proposals represents a major shift in how the government approaches its own air travel.

This time around, the GN is looking for airlines to bid on seven different geographical regions or routes, including Nunavut’s three main regions plus major southern connections, like Iqaluit−Ottawa and Rankin Inlet−Winnipeg.

The GN plans to award the majority of the business in each region or route to a single carrier.

That sets the territory up for another potential monopoly, as the North’s two largest airlines—First Air and Canadian North—move themselves into position to merge.

With no Nunavut stake in either of those two Nunavik- and Inuvialuit-owned airlines, the GN is hoping to use its own buying power to influence ticket prices, through the contract’s public travel component.

The new contract does not require airlines to operate as many weekly flights to Nunavut communities as the current contract does; in some cases, dropping that requirement from eight to three per week.

But the Nunavut government has said it cannot say what flight schedule changes will be implemented until contracts are signed with the successful carriers.

Nunavut spent more than $60 million on medical travel and about $15 million on duty travel in 2017-18.

New contracts would be for three-year periods, with the option to renew those contracts twice, first for two years and then for one year.

Air Travel: New Flights to Europe, Africa and Asia

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A number of new flights to Europe, Africa and Asia lead this week’s top air travel news. 

This week Delta and its partners, KLM, Virgin Atlantic and Korean Air, launched a number of flights from Boston’s Logan International Airport. On March 31, KLM began operating a route to Amsterdam, adding to Delta’s existing twice-daily service; on April 1, Virgin Atlantic launched daytime service from Boston to London – Heathrow, bringing service on that route to three times daily between the two airlines. Officials said that the new morning departure would enable better in-flight workday productivity for London-bound business travelers. 

Looking ahead, on April 12 Korean Air will start new, nonstop service between Boston and Seoul, one of the first additions to the Korean Air – Delta joint venture’s transpacific network since the partnership was launched last May. Later this spring, Delta will begin seasonal service out of Boston to Lisbon and Edinburgh. 

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In 2020, Delta and Virgin Atlantic will also begin flying to London – Gatwick from Boston, as well as from New York – JFK, bringing the two airlines to 18 flights daily to the UK from the two cities. Full Gatwick schedule details will be announced later this year. 

In other Europe flight news, this week Air France launched its new service between Dallas – Fort Worth and Paris – Charles de Gaulle, which will operate up to five times weekly throughout the summer on Airbus A330 aircraft. Dallas is the airline’s 13th destination in the United States. 

On the West Coast, this week Air Italy inaugurated its new nonstop service between Los Angeles and Milan, marking the third destination in North America served by the airline. On April 10, the airline will also launch a new service to Milan from San Francisco. 

The new Milan – Los Angeles flight also marked the launch of Air Italy’s new Business Class product. Business Class now includes a new dine-on-demand service that allows passengers to choose from an a la carte menu at any time. The new product is set to roll out across the airline’s network in the coming weeks. 

In other new flight news, South African Airways increased its frequency on nonstop flights between Washington – Dulles and Accra, Ghana, this week. The service now operates five times weekly, on Monday, Tuesday, Wednesday, Thursday and Saturday. The route also offers continuing service to Johannesburg, South Africa. 

Finally, in other onboard product news, this week marked the launch of American Airlines’ new A321neo aircraft, which made its debut on a flight between Phoenix and Orlando. The new planes offer customers power at every seat, free wireless entertainment and live TV streamed to guest devices, high-speed Wi-Fi from gate to gate and built-in seatback holders for tablets and phones. The planes have a capacity of 196 seats — 129 in the Main Cabin, 47 extra-legroom Main Cabin Extra seats and 20 first class seats — as well as a number of features that improve fuel efficiency. American has ordered a total of 100 A321neos and plans to continue flying the aircraft on additional routes through the rest of the year. 

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United Airlines Defeats Online Booker Expedia’s Injunction Motion in Contract Row | New York Law Journal

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Expedia website.

The online travel service Expedia on Friday was denied a motion to keep United Airlines from cutting off booking and flight information after September 2019 in a contract battle that could sever the relationship between the companies.

U.S. District Judge P. Kevin Castel of the Southern District of New York denied the injunction request, which would have prevented the airline from removing its information after the Sept. 30 contract expiration date..

The injunction would have eased the threat Expedia claims it faces should United be allowed to follow through with its plans to end the contract and eliminate now any possibility of having flights past that point available on Expedia’s site.

In denying the injunction request, Castel found that most of Expedia’s reasons were expressions of the reality they would ultimately face should the contract simply expire, which failed to give rise to the grave need for the court stepping in.

“The parties contracted for a fixed term and did not include provisions discussing customer service of tickets purchased through Expedia after the expiration of the Agreement,” Castel wrote. “Such ‘self-inflicted’ harms are not considered irreparable.”

According to court filings, the two companies have been under the current contract since 2011, which was amended twice and set to expire Sept. 30. United allows customers to book flights months in advance of departure, which Expedia was granted access as part of the contract.

Expedia claims United breached this contract after the airline sought to renegotiate in October 2018, threatening to curtail Expedia’s ability to sell United flights in 2019 if it didn’t agree. Negotiations broke down, and United stood firm in February with its plan to cut off access to future flight information beyond the contract deadline.

Despite the court finding that Expedia has demonstrated a probability of success on the merits, based on United’s obligations under the contract, Castel nonetheless found the online company had not show the potential for irreparable harm.

The judge noted that, absent an injunction, United would “immediately … cease” providing Expedia with flight schedule information after Sept. 30. The company was sure to suffer monetary loss, but that could potentially be rectified in the future through

As to reputational harm, Expedia is likely to face whatever harm there will be as a result of the agreed-upon contract ending. No evidence showed the company would suffer a material different outcome if the injunction wasn’t provided, the court found.

“To the extent Expedia alleges that customer confusion and delay in customer service resulting in loss of goodwill are the irreparable reputational injuries it faces, such injuries are not cured by injunctive relief,” Castel wrote.

Expedia is represented in the litigation by a team led by Friedman Kaplan Seiler Adelman partner Christopher Colorado. He declined to comment, deferring to spokespeople at the company.

In a statement sent by a spokesman, the company expressed disappointment at the decision but said it was pleased the court appeared to recognize that United’s threatened actions would breach the contract.

Kirkland Ellis partner Atif Khawaja led United’s legal efforts. He, too, deferred comment to a spokeswoman, who provided a statement from the company that welcomed Castel’s ruling.

The decision “will minimize the risk of disrupting our customers’ travel plans and ensure we can effectively serve customers who need to make changes to their itineraries purchased through Expedia,” the company said in its statement.

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United Airlines’ Move To Stop Publishing MileagePlus Award Levels Is Unfriendly But Not Surprising

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United Airlines is following Delta Air Lines, and for flights on or after November 15, 2019, there will no longer be an award chart listing a fixed amount of miles needed for a free ticket to the places it flies using its MileagePlus loyalty program. It will move to dynamic pricing, which is based on demand. An award ticket to Paris might cost 50,000 miles or it might be 500,000 miles depending on when you want to go and when you are ready to buy.

It’s a 180-degree turn from where frequent flier programs started. The promise then was, fly our airline, earn X miles, and get a free ticket to Hawaii. That was nearly 40 years ago, so clearly, times have changed.

United Airlines decision to stop publishing fixed award levels and instead pricing mileage redemption flights based on supply and demand means frequent fliers won’t know how many miles they need for those tickets to Hawaii until they are ready to buy them. Photocredit: Getty

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Back in the early days of frequent flier programs, about 40% of airline seats went unfilled. At the same time, low-cost start-ups like People Express, New York Air and Air Florida were threatening the legacy carriers that were trying to figure out how to re-invent themselves after the industry was deregulated.

The challenge was real. Among the largest U.S. airlines of the day, some of the biggest and best known failed or were swallowed up in mergers. From an industry that had a number of significant players, names like Pan Am, TWA and Eastern went away then with the latest round of consolidation, US Airways, Northwest and Continental disappeared as well.

A million miles away. Award tickets on Delta Air Lines now cost up to a million miles after it stopped publishing fixed redemption levels. At the same time, some award levels are lower than before.

Flyertalk.com screenshot

Today there are only three network airlines in the U.S., and profits and profit margins are robust. In fact, Doug Parker, the CEO of American Airlines said back in 2017, “I don’t think we’re ever going to lose money again. We have an industry that’s going to be profitable in good and bad times.”

With limited competition of significance, the big three, Delta Air Lines, United Airlines and American, have been playing the part. While introducing newer and better seats for customers who pay as much as $10,000 to fly in international business class, they’ve been on a mission to let everyone else know they can pound salt, so to speak.

Sure you can still join their frequent flier programs for free, but if you buy cheap fares, you’ll earn fewer miles, or sometimes none at all. You’ll also pay extra to check your bags, get a window or aisle seat, or a sit near the front of the cabin, and of course, an exit row. For the most part, free meals in coach on domestic flights went away years ago. So did pillows.

Seat rows are closer together and more seats are in the same space. In fact, on some planes, the airlines even found a way to add seats in each row by making aisles and seats themselves narrower. Even the size of those narrow toilets is getting smaller.

While it’s not the airlines’ fault that getting through airports often means long security lines, for the vast majority of domestic fliers air travel today is at best a means to an end, the way to get there and to be avoided if at all possible.

Flights today often go out full, and if you miss your connection at a hub, you might have to wait until the next day to get on another flight.

Yes, frequent flier programs give you more ways to earn miles, and it’s not uncommon to be able to score 100,000 miles by opening up an affinity credit card tied to a frequent flier program, however, those bonuses are less meaningful.

Award prices have been going up for years, however, Delta’s move to go to dynamic pricing for its SkyMiles program four years ago took it to a new level. No longer did Delta publish charts telling you how many Skymiles it would cost you for that ticket to Hawaii.

Every flight and every day could be something different, based on demand. What’s more, the price you see now for a flight next January might be different next week or even tomorrow.

The idea was while some award costs would go up, others would go down. Let’s take the kids to Bismarck, North Dakota in January. It’s a great deal. Supply and demand.

On various blogs, you can find screenshots showing business class tickets to Australia and Asia for as much as a million miles. Even when those aspirational awards went from 70,000 to 90,000 to 110,000, 130,000 and even 150,000, the road warrior whose company mandates cheap fares or even the occasional traveler could imagine sipping champagne and reclining their way to Sydney or Paris.

If you’re flexible, United promises you will have opportunities to fly using fewer miles. That probably eliminates any of their customers who have to plan vacation trips around school holidays. If you need to change your travel plans, you will have to pay the going rate for the new flights, something that could possibly preclude you from making the trip as those alternatives could mean a significant but unknown increase.

For anyone who has ever worked in sales, they will tell you the first thing they look at is the targets for which they earn specified commissions and bonuses. The idea is by providing a goal line, a salesperson will work hard knowing if they move X amount of cars or carrots, they earn Z rewards in return.

The new normal for airline programs if American follows Delta and United will be that you have no idea how many miles you need to go anywhere until you are ready to make your reservation. It could well be that while your dream trip to Greece is now 500,000 miles, Budapest is 100,000 miles, and well, Budapest is a nice place to visit, too.

By minimizing the number of redemption seats on popular routes at popular times, or at least charging an exorbitant amount of miles, the airlines may, in fact, be helping fulfill Parker’s profit prediction. In doing so, they may be making decisions that prove beneficial for both investors and employees who share in the profits.

Airline executives may be right in thinking they don’t need to offer price shoppers anything more than the lowest advertised fare, and they can win their share of business travelers via corporate contracts.

Of course, the pitch for those cobranded credits cards the airlines flog on every flight is still filled with promises of free travel, palm trees, Paris and sandy beaches. Flight attendants get a commission for each passenger they sign up. My guess is they have a specific sales target, not some speculative level.

Not publishing award charts is just another indication why it doesn’t make much sense to love your airline. While airlines will counter more people redeem more seats to more places, chances are if you want to make the programs work for you, be prepared to tell the kids instead of Disney World, Dollywood is also lots of fun. Flexible is the word of the day.

Why India’s IndiGo, Air Vistara, SpiceJet cannot fill up seats

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Even in turmoil, India’s aviation industry has been adding new capacity faster than the growth in air passenger traffic.

Domestic passengers flown every month by Indian airlines has grown in double digits for four-and-a-half years till February, according to the Montreal-based International Air Transport Association (IATA).

Despite this growth, the industry’s passenger load factor (PLF), a measure of capacity utilisation, has been falling recently as carriers expanded their fleet. In fact, from October 2018 to February this year, Indian aviation’s PLF has declined on a year-on-year basis, according to the latest IATA figures. 

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A high load factor means fewer seats on flights are being left empty. This is crucial for a price-sensitive industry, which has thin profit margins in India, even as PLF here is the highest among major aviation markets, including the US, China, and Brazil.

But since November, the Indian airlines’ PLF has declined the fastest. This is due to a greater rise in capacity than air traffic, said Ashish Nainan, aviation analyst at CARE Ratings, even at a time when many of the Indian carriers are either stuck in or emerging from the red.

Deliveries have begun rolling in on the massive orders that carriers such as IndiGo, Air Vistara, and SpiceJet had placed with aircraft makers. The airlines have also been increasing the number of their flight routes and frequencies amid a push by the Indian government to expand regional air connectivity.

Meanwhile, though still in double digits, the rate of growth in passenger traffic has fallen 5% since October as government policies have forced airlines to raise their fares, leading to a drop in the load factor, said Mark Martin, founder and CEO of Martin Consulting.

“After GST, the government has increased airport charges. Then there’s been an 18-20% rise in service charges, from catering to fuelling services,” he said. “The costs have gone up, so the fares will also go up.”

Flight cancellations by Jet Airways, which is reeling under a debt of over $1 billion, will most likely be reflected in the data for March, as will the Indian aviation regulator’s grounding of SpiceJet’s 13 Boeing 737 Max planes following the Ethiopian Airlines crash, Nainan said. 

These events, having hit capacity addition, may just have ended the decline in India aviation’s load factor without refurbishing the passenger growth rate.

7 Best Stocks to Buy to Make a Buck Off Air Travel

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Market value: $6.8 billion

Forward P/E: 7.0

Dividend yield: N/A

According to the Centre for Asia Pacific Aviation (CAPA), aircraft leasing accounts for half the world’s commercial aircraft. Commercial aircraft aren’t cheap, which explains why so many airlines prefer to lease rather than buy. As air travel continues to grow, aircraft leasing also should increase.

CAPA’s fleet database suggests that aircraft leasing is higher in Latin America, Europe and Asia, and lower in North America and Africa. Of the aircraft leased by lessors, most prefer regional jets and narrowbodies; widebodies are less favorable.

Ireland-based AerCap (AER, $47.92) is the world’s largest owner of commercial aircraft with 1,421 aircraft owned, managed or on order.

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Over the past five years, AerCap purchased leased or sold more than 2,000 aircraft. Its average remaining lease term on its planes is almost seven-and-a-half years, providing investors with cash flow certainty.

AerCap is good at turning a profit – it has done so for each of the past 12 years. AerCap did see revenues shrink 4.7% year-over-year in 2018, to $4.8 billion, but it managed to keep its earnings flat at $1.02 billion. And because the company prefers stock buybacks over paying a dividend, its earnings per share grew by 6.2% to $6.83.

The company will feel the “Boeing effect,” even if just to a small extent. The company presently has only five Boeing 737 Max 8s in its fleet, but it’s supposed to take delivery of 17 in 2019, 24 in 2020 and 58 beyond that, representing approximately 30% of its aircraft on order. The coming year could require some changes to its order book to account for expected delays. Long-term, however, this should not be a material concern. Investors don’t seem worried: AER shares have rallied 21% in 2019.

SEE ALSO: The 10 Best (And 10 Worst) Stocks of This 10-Year Bull Market

Chic Houston beauty brand takes off as new United Airlines skin care partner

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Houstonians love supporting local businesses. With that in mind, United Airlines has taken off with Houston-based Sunday Riley skincare products in its new in-flight amenity kits.

Using clinically proven ingredients backed by botanicals, and producing its line in small batches, Sunday Riley has created a skin-care empire that embraces green technology and high-performance. The line scents its products using flower and plant extracts and oils, not artificial fragrances, as well as choosing gentle and highly effective alternatives to mineral oil and sulfate cleansers.

Cabin chic
In other words, a line that can more than stand up to the dehydrating conditions in a plane on a 14-hours transpacific flight.

“Sunday and her team really took the time to understand how travel and the aircraft environment affects our customers and formulated an in-flight remedy that complements their journey with United from beginning to end. By elevating the skincare products offered on our planes and in our lounges, we can continue to lift the experience customers have when traveling with United,” said United’s vice president of marketing Mark Krolick in a press release announcing the launch. “We are thrilled to be working with a trailblazing businesswoman and entrepreneur who is making a global impact from our Houston hub.”

United is hoping its passengers will be thrilled as well. While based in Houston, Sunday Riley sources its ingredients from suppliers based in the U.S., Japan, Germany, U.K., France, and Italy, and the company vets ingredients for purity and its suppliers for good manufacturing practices. The skincare line aims to offer the kind of cosmopolitan cache United wants to deliver in its higher-end flight offerings — which is where, no surprise, you’ll find the new amenity kits.

First class skincare
Travelers in United Polaris business class will have an amenity kit featuring four Sunday Riley products, including a lip balm with pomegranate seed oil and shea butter to boost hydration; a face cream with a blend of botanicals to hydrate and soothe skin in-flight; hand cream containing a nourishing blend of shea butter, cocoa butter, and rose hip seed oil; and a facial cleansing cloth containing peppermint extract to balance oil and invigorate skin.

In United’s Premium Plus cabin, they’ll find Sunday Riley’s lip balm and hand cream in the amenity kits. And those flying premium transcontinental get Sunday Riley’s lip balm in their kits.

In addition, the airlines’s premium cabin lavatories on dozens of aircraft will offer a face mist and hand cream formulated by Sunday Riley, as well as other new products, like the Garment Groom 2-1 spot cleaner and fabric freshener created by Murchison-Hume. United Polaris lounges, Arrivals lounges and United Clubs with shower facilities around the globe will feature Sunday Riley products as well, helping to create what United calls “an elevated lounge-to-landing experience.”

Expect to see products such as an invigorating hand wash with cucumber and green tea extracts, a hydrating shampoo of cucumber extract and rosehip seed oil, a replenishing conditioner containing green tea extract and pomegranate seed oil, a refreshing body wash with cucumber and green tea extracts, and a hand and body moisturizer with shea and cocoa seed butters. All of the line is designed to deeply hydrate and nourish skin and hair before or after long flights.

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The new Sunday Riley collection begins roll-out later this month onboard and in United Polaris lounges and United Club locations with shower facilities.

United Airlines to Hold Live Webcast of First-Quarter 2019 Financial Results

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CHICAGO, April 4, 2019 /PRNewswire/ — United Airlines will hold a conference call to discuss first-quarter 2019 financial results on Wednesday, April 17, at 9:30 a.m. CT/10:30 a.m. ET. A live, listen-only webcast of the conference call will be available at ir.united.com. The company will issue its first-quarter financial results and second-quarter investor update after market close on Tuesday, April 16.

The webcast will be available for replay within 24 hours of the conference call and then archived on the website for three months.

Every customer. Every flight. Every day.

In 2019, United is focusing more than ever on its commitment to its customers, looking at every aspect of its business to ensure that the carrier keeps customers’ best interests at the heart of its service. In addition to today’s announcement, United recently released a re-imagined version of the most downloaded app in the airline industry and made DIRECTV free for every passenger on 211 aircraft, offering more than 100 channels on seat back monitors on more than 30,000 seats. The multimillion-dollar investment in improving inflight entertainment options will benefit the more than 29 million people expected to fly United’s DIRECTV-enabled planes this year.

About United

United’s shared purpose is “Connecting People. Uniting the World.” We are more focused than ever on our commitment to customers through a series of innovations and improvements designed to help build a great experience: Every customer. Every flight. Every day. Together, United Airlines and United Express operate approximately 4,900 flights a day to 355 airports across five continents. In 2018, United and United Express operated more than 1.7 million flights carrying more than 158 million customers. United is proud to have the world’s most comprehensive route network, including U.S. mainland hubs in Chicago, Denver, Houston, Los Angeles, New York/Newark, San Francisco and Washington, D.C. United operates 779 mainline aircraft and the airline’s United Express carriers operate 569 regional aircraft. United is a founding member of Star Alliance, which provides service to 193 countries via 28 member airlines. For more information, visit united.com, follow @United on Twitter and Instagram or connect on Facebook. The common stock of United’s parent, United Continental Holdings, Inc., is traded on the Nasdaq under the symbol “UAL”.

SOURCE United Airlines

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