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Jetblue to begin Boston to Seattle Service August 31, 2005

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Despite sky-high fuel prices and intense competition, Jetblue continues to expand at a voracious rate. Beginning November 3, Jetblue will fly between Boston and Seattle once daily. Initial fares will go on sale for $99 one way; however, regular one-way fares will range between $149 and $349 one way. According to a press release, Jetblue’s fares will be up to 31% less than other competitors current fares on the Boston to Seattle route. Indeed, Jetblue CEO David Neeleman has kept his promise to expand Jetblue operations at Boston Logan International, as Seattle is the tenth destination Jetblue serves from Boston. Massachusetts’s Governor Romney praised Jetblue’s new service to Seattle, congratulating the airline “on its growth thus far.” Washington State governor Christine Gregoire echoed the same sentiments, adding that she was “excited about the new opportunities JetBlue is bringing to [her] state.” The new flights cater towards business and red-eye travelers, as the outbound flight departs from Boston at 8:45, and does not arrive back in Boston until 9AM the following day. If the route performs as well as other Jetblue flights out of Boston, expect greater flight frequencies and more attractive departure times in the near future.

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United Arranges New Financing August 26, 2005

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United Airlines, amid a scurry of recent activity, announced today that it has lined up $3 billion in new lending from a variety of financial firms. Citibank, J.P. Morgan, Deutschebank, and GE Commercial Finance all will contribute toward the lump sum of roughly three billion dollars. Today, United also won approval for an extension to file its reorganization plan. Bankruptcy court will now require United to file a plan detailing its reorganization by the first of November. The carrier hopes to emerge from bankruptcy in late 2005 or early 2006. United latest financial statements were not particularly positive for the last quarter, as United Airlines parent company had a net loss of $274 million. The key measure of the airline’s health, unrestricted cash, lies at roughly two-thirds of $2.8 billion.

Just in: Skywest to Merge with Atlantic Southeast Airlines August 15, 2005

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Delta Airlines, seeking to raise enough capital to settle a dispute with two credit card processors, sold regional subsidiary Atlantic Southeast Airlines (ASA) to Skywest Airlines, which is a regional partner of the legacy carrier. Skywest bought ASA for $425 million, which is significantly less than what Delta paid when it purchased the carrier for $700 million in 1999. Skywest Airlines will pay $350 million immediately, with the additional $75 million contingent on Delta maintaining its current contract with Skywest. Delta made this sale in desperation, as it is racing to raise $750 million so that it will be able to continue processing Visa & Mastercard credit cards. Skywest CEO Jerry Atkin “acknowledged that the structure of the deal was engineered to protect his company from any repercussions from a Delta bankruptcy situation.”

American Airlines Introduces New Business Class Seats August 15, 2005

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Buoyed by recent profits, American Airlines announced today its plans to install new “lie-flat” seats in a select portion of its international fleet. Initially, the installation will be limited to the Boeing 767 & 777 fleet. The installations will vary in the two aircraft, as American plans to upgrade its 767 business class seats to lie-flat seats beginning in 2006, while more triple sevens will receive the airline’s new and widely popular Flagship suites located in first class in 2007. With constant profitability in sight, despite ever-rising oil prices, American is now in the position to offer a first and business class product comparable to it’s Asian and European counterparts. In an effort to survive the tumultuous climate following September 11, American legacy carriers neglected their premier products in order to cut costs. While low-fare carriers can offer products superior to the legacy carriers domestically, the same does not apply to international flights, which are the uncontested domain of legacy carriers. International routes remain the sole area where carriers can largely avoid costly fare wars; so, with deepening pockets, legacy carriers are beginning to further build upon their successes in this one last frontier. Amenities, particularly in first and business class are more important due to longer flight times than domestic flights, as Garton, Executive Vice President of Marketing at American points out: “We know how important it is to our passengers to be comfortable on their international flights, whether they are working, enjoying a meal and a movie, or just relaxing.”