Skift Travel News Blog

Southwest Airlines will pay a dividend to its shareholders of record as of January 10, 2023. This may not seem like a notable move for a carrier that has paid dividends for most of 50-plus year existence but it is: Southwest will be the first U.S. airline to resume shareholder returns since the pandemic.

Shareholder returns, including dividends and stock buybacks, were barred at any airline that took federal aid under the U.S. CARES Act until this September. Most carriers have also returned to profitability on the back of strong travel demand. Dallas-based Southwest made a $277 million net profit in the third quarter.

Other U.S. carriers may not be far behind Southwest. Alaska Airlines Chief Financial Officer Shane Tackett said in October that the carrier’s management would discuss the possibility of resuming “potential shareholder returns” with Alaska’s board in November. There is no word yet on any decision from the Seattle-based carrier.

U.S. airlines, including Southwest and Alaska, are seeing strong travel demand into the new year. Delta Air Lines CEO Ed Bastian in October went as far as to claim that travel is “countercyclical” to the macroeconomic trends of high inflation and a potential U.S. recession.

Airlines practice of giving some cash back to shareholders was in the spotlight when the industry was pushing for federal relief in the CARES Act. Some noted that, had the industry not paid dividends our bought back shares in the years prior to the crisis, they may not need the government hand out. Airlines pushed back on this claim, rightly arguing that such returns were standard practice across businesses and not just airlines.

Southwest will pay its investors an $0.18 per share dividend for the fourth quarter on January 31, it said Tuesday. The carrier estimates the dividends will total roughly $428 million.

Volantio, an optimization startup that has many airline customers, said on Thursday it had closed a $6 million Series A fundraising.

DiamondStream Partners, an aviation and aerospace venture capital firm, led the round in the Atlanta-based company. Alaska Airlines, one of Volantio’s customers, also took an equity stake. JetBlue Technology Ventures, IAG, Amadeus Ventures, and Ingleside Investors also made follow-on investments.

“Volantio has already delivered well over $20 million in annual benefit to Alaska Airlines, and that number continues to grow,” said Shane Tackett, Alaska Airlines’ chief financial officer.

Volantio’s software uses deep learning to tackle optimization challenges. Airlines have been its flagship customers so far. Its software helps airlines pinpoint flexible passengers on full flights using data. It then prompts these flyers to switch, in return for vouchers and other incentives, to other flights, thus making seats available for more profitable last-minute bookings.

Volantio said it “recently expanded into the live events industry through a first-of-its-kind partnership with Disney Theatrical Group.”

The startup won Skift’s Air Pitch competition at Skift Global Forum in 2018.

Air travelers in the U.S. now have a one-stop shop when it comes to knowing what airlines will provide them with in the event of a lengthy flight delay or cancellation.

The new Airline Customer Service Dashboard by the Department of Transportation is designed to “ensure the traveling public has easy access” to airline commitments in the event of a disrupted trip, the regulator said Thursday. The commitments, which are largely a list of existing airline policies compiled together in one place, only apply to “controllable” events, or one where the airline is at fault, for example staff shortages.

“Passengers deserve transparency and clarity on what to expect from an airline when there is a cancelation or disruption,” U.S. Transportation Secretary Pete Buttigieg said. “This dashboard collects that information in one place so travelers can easily understand their rights, compare airline practices, and make informed decisions.”

For example, if a travelers flight is delayed more than three hours due to a mechanical problem with the aircraft, the dashboard shows that they are guaranteed a meal voucher on almost all major airlines except Allegiant Air. However, if their flight is cancelled, only American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, and United Airlines will rebook them on another carrier.

“Carriers welcome opportunities to simplify travel policies, clarify existing practices and increase transparency for travelers,” a spokesperson for trade group Airlines for America said.

The new dashboard follows a spike in flight delays and cancellations earlier this year that resulted in a blame game between airlines and authorities. While acknowledging their own staffing issues, airlines have claimed that air traffic control staffing has exacerbated the situation while the DOT has argued that the situation is primarily the fault airlines and weather. Whatever the reason, the regulator has moved to improve airline passenger protections, including a new rule that would guarantee cash refunds.

Spirit Airlines’ two-and-a-half year saga to expand at Newark Liberty International Airport has a happy ending. Late on Tuesday, the U.S. Department of Transportation awarded the discounter 16 peak “runway timings” — in short, rights to takeoff and land at an airport during a given hour — that Spirit sued for in December 2019.

The DOT said the award of the timings, which were only available to budget airlines, would boost “low-cost service options” and improve competition at the New York City-area airport. Alaska Airlines and JetBlue Airways also sought the takeoff and landing rights, according to the regulator.

Newark is a major hub for United Airlines, which operates more than 70 percent of all flights at the airport. The timings were previously used by Southwest Airlines until the carrier ended flights to Newark in 2019. And Southwest acquired them in 2010 as a condition of United’s merger with Continental Airlines.

The award comes amid a three-way war of words between JetBlue, Spirit, and United over congestion at Newark. JetBlue and Spirit blame United, and the Federal Aviation Administration, for over scheduling the already congested airport, whereas United has repeatedly made the argument that its much smaller competitors were the problem. In June, United cut its schedule at Newark by roughly 50 daily flights from July 1 through the end of the summer to combat delays.

In an interesting twist, the DOT may need to re-award the timings if JetBlue wins its hostile bid for Spirit. The former carrier has pledged to divest all of Spirit’s assets in Boston and New York — including Newark — if shareholders approve its plan over a competing proposal from Frontier Airlines. Spirit shareholders vote on the Frontier proposal Friday.

T-Mobile is getting heavier into travel with the debut of a discount travel website in partnership with Priceline.

The U.S.-based telecom services provider also announced Thursday it is offering free Wi-Fi on certain Delta, American and Alaska airlines flights for T-Mobile customers, and will be expanding its free Wi-Fi services to 210 countries and destinations to customers signed up for certain plans.

T-Mobile Travel is powered by Booking Holdings’ Rocket Travel, and potentially also leverages Booking’s $1.2 billion acquisition of hotel wholesaler Getaroom.

“To meet T-Mobile’s needs, Priceline curated a totally custom and unique combination of travel technology, sales and support services and product, most notably leveraging the technology capabilities of Rocket Miles and Priceline inventory,” a Priceline spokesperson said.

T-Mobile Travel claims to offer exclusive hotel discounts of up to 40 percent, as well as flights and car rentals. Skift didn’t see any short-term rentals in the mix.

Regarding the discounts, Skift found a listing for a queen-bed room at the Shoreham Hotel in New York City in early July for three nights for $730 that was 34 percent lower than on Expedia.com. T-Mobile claimed it was a 37 percent discount.

In addition to the new travel website, Delta, American and Alaska Airlines starting June 21 will begin offering free Wi-Fi for T-Mobile customers on select flights, T-Mobile said. “United Airlines will follow,” T-Mobile stated in its announcement. “And T-Mobile will continue to work hard to keep customers covered on even more airlines over time.”

T-Mobile will also will add certain streaming services on some of these flights for free or at a discount, the company said.

T-Mobile customers who have selected its Magenta Max or Business Unlimited Ultimate Plan will get 5GB of high-speed Wi-Fi, where available, for no extra charge in more than 210 countries and destinations, the company said.