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Airlines’ New Pricing Strategy: Buy One, Get One Free

Airlines give away seats as they try to stop the cash burn and make travelers feel comfortable flying again

Airlines are resorting to a new tactic in navigating the pandemic-inspired collapse in travel: They are giving seats away.

Alaska Air Group Inc. ALK +2.77% ran 48-hour sales in August and September, offering an entire three-seat row for the price of a single ticket. Europe’s biggest airline, budget carrier Ryanair Holdings RYAAY +3.09% PLC, offered 2-for-1 specials for flights through mid-December. Southeast Asia’s AirAsia brand earlier this year sold “unlimited passes,” allowing customers in some markets to travel as much as they wanted for a few months.

The deals can drum up demand and get travelers comfortable with flying again. They are also keeping at least some cash coming in the door, as airlines keep much of their fleets parked. Alaska Airlines usually runs 10 to 12 big promotions a year; it has recently been offering three a month.

Alaska Airlines was already keeping the middle seat open for social distancing. Its buy-one-get-one-free offer allows a pair of passengers traveling together to get their own row for the price of a single seat. On days when the Seattle Seahawks play at home, the airline, which is based in that city, offers discounts of as much as 40% depending on how many touchdowns quarterback Russell Wilson makes. Overall during the third quarter, Alaska Airlines said ticket prices were down 17%.

Excerpt from WSJ
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The Jumbo Jet Was the Pinnacle of Air Luxury—Now Its Days Are Numbered

Boeing and Airbus are winding down production of the 747 and A380, planes that ended up being too big for their own good

It’s time to eulogize the passing of the 747 and A380, engineering marvels that defied gravity, tantalized travelers with luxurious cabin space and opened intercontinental travel to the masses by making cheap fares plentiful.

The pandemic sped up their demise, which seemed inevitable regardless. There’s little doubt air travel will see weaker demand for several years, which is a killer for enormous airplanes that require strong demand to fill seats. The losses will be mourned by many travelers, and will be particularly hard on airplane aficionados for whom these incredible machines represented jet nirvana.

But from the beginning, both jumbo jets were too big for most markets, and the only way airlines could fill them was by offering very cheap fares. And while travelers profit from cheap fares, airlines don’t.

Boeing announced at the end of July that it would discontinue 747 production in 2022 when it finishes building the last 15 freighters on order. The last passenger version of the 747 was delivered in 2017, though two planes built for an airline but never delivered will become Air Force One presidential transport.

Almost all 747s at passenger airlines are grounded, according to Cirium, an aviation data and analytics company. Several big airlines that fly the older 747-400 say those planes are done. The newer 747-8, flown by three airlines, likely will return to service. There are just 35 of those.

Airlines have grounded most 747s during the pandemic, and most won’t ever fly passengers again. Here’s a breakdown.

Airlines recently saying their 747s won’t return: British Airways, Qantas, KLM and Virgin Atlantic

Airlines that previously retired passenger 747s: United, Delta, Cathay Pacific and Singapore

Airlines with the newer 747-8: Lufthansa, Korean Air and Air China

Airbus announced in February that it will end production of its superjumbo A380 in 2021, again after the last remaining dozen or so airplanes on order are delivered. You might say airlines announced the end of the A380 long ago because big orders just never materialized, except at Emirates. “The A380 is not only an outstanding engineering and industrial achievement. Passengers all over the world love to fly on this great aircraft. Hence today’s announcement is painful for us,’’ Airbus said when announcing the end of production. “A380s will still roam the skies for many years to come.”

Excerpt from WSJ
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Former Top Boeing 737 MAX Officials Defend Design Process

Previous MAX program manager and chief engineer in closed-door congressional interviews stand by Boeing’s design of the plane

Two high-ranking executives who oversaw Boeing Co. development of the 737 MAX told House investigators the company’s design process wasn’t flawed despite two fatal crashes, a contrast to other company leaders’ concessions of past engineering errors.

The Chicago plane maker is approaching the final steps of getting its beleaguered MAX fleet returned to service. Lawmakers, safety experts and global regulators have previously identified technical and management lapses in the airplane’s development.

Transcripts of closed-door interviews in May with Keith Leverkuhn and Michael Teal, who directly managed MAX development through the aircraft’s 2017 debut, are part of a final congressional report slated to be released this coming week detailing a series of company and government missteps during and after certification of the MAX.

Their stance shows that nearly two years after the first fatal crash, there are differing views inside Boeing and a continuing debate across parts of the industry about the significance of pilot mistakes versus Boeing design flaws as factors in the MAX crashes.

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FAA, Boeing Blasted Over 737 MAX Failures in Democratic Report

Transportation Committee’s findings blame design errors, flawed aircraft certification system for fatal errors

House Democrats issued a sharply worded report revealing new details of how the combination of Boeing Co. BA 4.19% design errors, lax government oversight and lack of transparency by the plane maker and regulators set the stage for two fatal 737 MAX crashes.

The 238-page document, written by the majority staff of the House Transportation Committee, calls into question whether the plane maker or the Federal Aviation Administration has fully incorporated essential safety lessons, despite a global grounding of the MAX fleet since March 2019.

After an 18-month investigation, the report, released Wednesday, concludes that Boeing’s travails stemmed partly from a reluctance to admit mistakes and “point to a company culture that is in serious need of a safety reset.”

“We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Flight 302, and from the mistakes we have made,” Boeing said in a written response to the report, referring to the two fatal MAX crashes. The Chicago-based aerospace giant added: “We have been hard at work strengthening our safety culture and rebuilding trust with our customers, regulators, and the flying public.”

The findings released Wednesday also questioned whether pending changes inside the FAA would be sufficient to end what the report describes as fundamentally inadequate government reviews of new aircraft designs. Engineering and management errors on the MAX, according to the report, reflect a flawed approval process in which agency managers often undercut the authority of lower-level FAA engineers, giving industry undue influence over the process.

Excerpt from WSJ
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