Skift Take

Network planners often salivate over new-generation aircraft, and with good reason. New technology allows airlines to profitably fly routes that might not have worked in the past.

When Lukas Johnson led the group that chose routes for Allegiant Air, his team couldn’t schedule MD-80s to fly more than 200 miles from their Las Vegas base on hot, summer afternoons.

The old airplanes, which were retired last month, had serious performance limitations. But Johnson, a wizard of network planning, made them work, finding the right mix of markets to produce big margins for Allegiant, one of America’s most profitable airlines.

At his next job, Johnson won’t be so limited. As I wrote Tuesday, Johnson is leading commercial strategy for David Neeleman’s new U.S. airline, which should fly by 2021. Neeleman has committed to 60 Airbus A220-300s, the best-performing single-aisle aircraft available.

“This is a plane that can do seven or eight types of different network missions,” Johnson said. “It’s super economical. It is also smaller gauge than a 320 or 737, and it also has better runway performance. You basically have the most flexible narrow-body plane out there.”

Neeleman wants to fly point-to-point routes that aren’t served today. That’s what Johnson did at Allegiant, but now he’ll have new airplanes and more options. He told me he could send the A220s to Hawaii, Europe, and South America, as well as within North America.

He’ll also have a better product. While some travelers may worry Johnson will bring an Allegiant-style no-frills approach to the new airline’s product, that won’t happen. Neeleman has a record of building pro-customer airlines, and for the startup, he’s planning a hybrid low-cost, high-service approach.

“People kind of have to dissociate with the Allegiant brand,” Johnson said. “It’s more about, can you take the concept of stimulating traffic and bring it to something new?”

For more details, read the story.

— Brian Sumers, Senior Aviation Business Editor [[email protected], @briansumers]

Best of Skift

David Neeleman Taps Ex-Allegiant Air Exec for Top Strategy Role at His New Airline: Before Lukas Johnson joined Allegiant, no one thought of Punta Gorda, Florida, as a robust air market. Other airlines preferred to fly into nearby cities, like Sarasota and Fort Myers. But Johnson crunched the data and thought otherwise. Now, Punta Gorda is one of Allegiant’s best markets, with more than 40 routes. Given that Neeleman also wants to fly from underserved airports, it’s no surprise he made Johnson one of his first hires.

Delta Air Lines Doesn’t Want to Be Pigeonholed as a Transport Company: Earlier this year, Delta Air Lines pulled its discount for National Rifle Association members. It was big news, not because it affected many members but because a big brand took a stand. It turns out, it was a good marketing decision. Delta wants to attract more millennials, and they have different expectations for brands than older customers, Delta Chief Marketing Officer Tim Mapes said last week. “They will switch and buy more from someone they see as not only socially responsible but outspoken and actively engaged in the causes that are important to them,” he said. Mapes wants to refine Delta’s brand so consumers see it as more than a transportation company.

Google Is Filling In the Missing Pieces With Mobile Flight-Delay Notifications: Google knows everything about you, right? Much of the time, it knows your travel plans, so now the company will alert consumers when their flights are delayed, Skift’s Dennis Schaal writes in this piece. Creepy or cool?

New Ultra-Low-Cost Carrier Swoops Into Canada: Skift freelancer Kristin Majcher reports on Canada’s newest discount airline, which is owned by WestJet Airlines. Just a few years ago, WestJet had a simple, Southwest Airlines-style business model. Now, it has decided it wants to be all things to all people, and Swoop is part of that strategy.

Airline Weekly Podcast: Expect the Unexpected in the Aviation Industry: My colleagues at Skift-owned Airline Weekly know more about airlines than just about anyone, and they go deep in their weekly podcast. In their most recent edition, they discussed Wow Air’s troubles, Russia’s booming air market, and SAS’ resurgence, among other topics.

Higher Standards for Airline Elite Status Don’t Bother Elite Travelers: U.S. airlines are requiring customers to spend even more money than ever to reach top-level elite status, Skift contributor Grant Martin writes. But many frequent flyers told Martin they don’t mind. “I welcome the changes,” said Jim Anderson, a business and regulatory consultant based on the West Coast who flies regularly on United Airlines. “There seemingly are too many elites, so I support efforts to help thin the herd, so to speak.”

Amadeus and Partner to Scale Loyalty Tech for Airlines: This deal is noteworthy because it represents a recent industry shift in the gravity of airline sales efforts, Skift Travel Tech Editor Sean O’Neill writes. Work that used to happen on computers that interact mainly with travel agencies is now shifting toward computers that mainly power an airline’s site and other direct sales channels.

Best of The Rest

JetBlue Founder David Neeleman on How New Airline Moxy Will Change the Way We Fly: Few journalists know how Neeleman’s brain works as well as Barbara Peterson, who wrote a 2004 book about JetBlue’s frenzied startup days. She interviewed Neeleman for Conde Nast Traveler, and there’s some interesting stuff in here, including more details on his timeline. While the first aircraft won’t come until 2021, he plans to file with the Department of Transportation by the middle of next year. Also of note: He doesn’t expect to compete directly with JetBlue on any route.

Air Italy Flights to Chicago Risk Rekindling Row With U.S. Carriers: We’re about to hear a lot more about Air Italy, the European carrier 49 percent owned by Qatar Airways that is expanding rapidly in the United States. Later this year, it will add Los Angeles, San Francisco, and Chicago, all from Milan. U.S. airlines are not happy. You may remember they have accused Qatar Airways of taking illegal subsidies from its government.

Spirit Airlines Is the Most On-Time Airline in America. Here’s Why: After three years leading the airline, Spirit CEO Bob Fornaro is fewer than two weeks from retirement. Folks in the industry often credit him for improving the airline, but he has gotten little credit elsewhere. Fornaro took over an operational mess and turned into an efficient operation, as Vox writes in this piece. Let’s hope his successor keeps it up.

Oneworld Confirms It Has Sounded Out China Southern Airlines to Join the Alliance: No surprise here. Since China Southern left SkyTeam, the rumors have had the airline joining Oneworld. It makes sense, considering American Airlines, Oneworld’s anchor, is an investor. Still, nothing official is in the works, Oneworld’s CEO told the South China Morning post. (Related: Oneworld Prepared for Qatar Airways to Leave But It Is Not Giving Up on Trying to Convince It to Stay Put.)

United Airlines Expands in San Francisco With Flights to Melbourne, New Delhi, Toronto: With less than 24 hours notice, United Airlines emailed reporters last week to announce a conference call with CEO Oscar Munoz to discuss a “historic package of new and expanded international routes.” Are these historic? We’re not sure, but maybe you can judge. USA Today has the story.

Happy Holidays!

This concludes the first full calendar year of this newsletter, the Airline Innovation Report. We will take a short break for the holidays and return the first week in January.

I am grateful to all of you for reading. Thank you.

Contact Me

Skift Senior Aviation Business Editor Brian Sumers [[email protected]] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send him an email or tweet him.

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Tags: airline innovation report, allegiant air, david neeleman, lukas johnson

Photo credit: Allegiant Air had a lot of range-limited MD-80s when Lukas Johnson ran its network. Allegiant Air Facebook

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