Could American Airlines ditch its Bermuda route?

FRIDAY, DECEMBER 2: Obviously the big news this week is American Airlines filing for bankruptcy. There’s little danger that the company will go belly-up as it is more of a move to shed costly overheads to make it more competitive against the other US airlines.

While most of the industry has had profits the last two years, American has been bleeding money.

It lost half a billion dollars in 2010 and lost $162 million in the third quarter of 2011. It has reported losses in 14 of the last 16 quarters.

American’s management blames high labour costs as the main culprit to the huge losses saying it has to spend $600 million a year more than other airlines.

This may be true.

Most of its competitors (Delta, US Airways, United) have filed for bankruptcy in the last 10 years to help rid themselves of previously negotiated union deals and be more competitive with newer airlines like Southwest and JetBlue that aren’t saddled with contracts that inflate the price of an air ticket.

Look at it this way, if it costs JetBlue $300 per seat to fly to Bermuda and American $400 per ticket because of labour costs, American is at a distinct disadvantage (those figures are just there as an example and are not actual costs).

If JetBlue offers tickets for $350, there’s no way for American to compete.

If it sells tickets for $350 it’s losing money on each ticket. If it sells it at $450, it loses sales to JetBlue because travellers will generally pick the better deal, and thus loses money because the planes aren’t full.

The restructuring is expected to take place over the next 18 months and the airline will reduce some routes, if Bermuda were to lose a route, it won’t happen until next year sometime.

Your American Airline AAdvantage Miles should be safe. You don’t have to rush out and use them.

Delta SkyMiles

If you have to do a lot of shipping this holiday season, Delta is offering up to 4,500 SkyMiles for using Fedex. If you use it twice, you earn 250 miles; the fourth shipment earns 500 miles; the sixth 1,000 miles; the tenth shipment 1,250 miles; and the 12th 1,500 miles. You can read more about it here: http://www.fedex.com/us/ship-and-fly/

Mobile boarding passes

On my last flight with Air Canada, I used its mobile boarding pass, which I downloaded to my iPad. The eBoarding pass replaces the paper boarding pass and can be downloaded to your phone, tablet or other mobile device.

It saved me some time at the airport and I felt ‘hip’ using it to show at security and to board the plane (not that many people would call me hip).

The bonus is I have a penchant for losing documents so it’s a bit more difficult for me to lose my iPad (but not impossible).

Delta has recently expanded the number of cities where you can use an EBoarding pass from 69 to 75. That includes Atlanta, Boston and various locations across the globe like London Heathrow and Gatwick, but sadly Bermuda is not on the list — yet.