It’s been awhile since I last put together an Across the Aisle interview. Sure, I’ve spoken with plenty of people, but I haven’t done the straight interview format lately. So, when I was contacted to see if I would be interested in talking to LAN’s VP of North America and Caribbean, Pablo Yunis, I was certainly interested to kick start this series again.

See, LAN just announced it would begin flying to San Francisco from Lima four times a week beginning July 1. LAN is also looking at growing elsewhere in the US and in Peru and Brazil. Beyond that, with oneworld having its share of issues in Asia, I thought it would be great to get a South American perspective on things.

Cranky: Thanks for taking the time to speak with me today. I’m really curious about the San Francisco route because Los Angeles has been on the network for years but San Francisco never has been, right?
Pablo: No, it’s the first time and we are very excited because we’ve been planning this for a very, very long time. We needed to grow in the US and flying directly to a very important gateway like SFO was a huge step for us.

Cranky: How did you determine this was the right time to fly to San Francisco?
Pablo: That’s a good question, because we’ve been planning this for a couple of years and we were seriously thinking about starting it up last year. With the crisis and especially the decreased demand in the cargo business, we put it on standby. In the end, we realized that it’s going to be good timing now because the demand has improved.

It’s a very important gateway because we are not only bringing clients to South America from the US but also from Canada and Asia on the same route. When you combine all those demands, and of course, there are no other carriers flying nonstop to South America, you see the opportunity.

Cranky: Are you taking new 767 deliveries or is this just taking the place of some other flying?
Pablo: We are receiving some 767s this year and also at the same time we are making some changes so we have some more availability in the US. There will be some growth this year that we didn’t expect a year ago.

Cranky: Is this a route, maybe Los Angeles too, that would see 787s? You’re taking delivery of them sooner now, right?
Pablo: The original plan was for 2013. Some rumors are on the news, because of what is happening with some Japanese carriers, we might have something sooner, but it’s not confirmed. I don’t have any dates or anything.

Cranky: Oh, so these are just rumors?
Pablo: I read it myself online like you. We would like to have those 787s as soon as possible. We have a very important growth plan for the next 5 years, so it’s strategic for us to have those planes or alternatives. And we are open to alternatives with either Boeing or Airbus.

Cranky: How did you decide to fly this with LAN Peru aircraft? I know that from LAX, you have one from LAN Peru and one from LAN Chile.
Pablo: This is kind of the way we’ve been growing in South America. In this case, LAN Peru is very well established in Peru, having very good relations with the authorities. Peru looks like the most important in terms of demand from Asia and from the US. That’s why we decided that this project should be under the LAN Peru umbrella. In the end, all this is very internal. In terms of the commercial part, we have only one brand, which is LAN and that’s it. That’s what we want to communicate to our clients. We are one airline, one brand, one service, flying and connecting all of South America to the world.

Cranky: I’m curious about Peru right now especially with all the floods around Machu Picchu and the railroad tracks being washed away. Some people anticipate this will hurt tourism. Is that going to hurt you?
Pablo: It’s important but it’s not as big as you might think. Peru is important to us as a destination and as a way to connect people to other parts of the world. We have been talking to the Peruvian government and the authorities there. The impacts of this could be very large, but for us and for passengers going and coming from Peru it shouldn’t be that that big. They expect to have the railroad fixed within the next 6 to 7 weeks.

On the other hand, Cusco is fully operating and has a lot of attractions different from Machu Picchu. You can go to Cusco today and there is no problem there. Of course, we know that Machu Picchu is an important attraction, so we are doing different things. We are working together with the government tourism group in Peru. We are launching a contingency plan campaign where we lowered our fares aggressively to Peru. We are actually promoting to go to Peru now, because people are very focused on Machu Picchu, but you can go to the rest of Peru. So we have these very low fares already on the web and through travel agencies. We pretty much expect that by March we should have traffic back to normal.

Cranky: My wife and I went to Peru two years ago and flew LAX to Lima on LAN and we went to Cusco and loved it, but in the US people think of Macchu Picchu first.
Pablo: You mention that, it’s very important. The campaign we just talked about, the focus is to say that Peru is much more than Macchu Picchu. Something like “discover the rest of Peru.”

Tomorrow we’ll finish up here with talk about a growing Lima hub, TAM and Brazil, as well as oneworld.

Allegiant Earnings Down on Lower Fares, Flat Ancillary Revenue – BNET
Allegiants earnings were down in the fourth quarter. Should we panic?

Episode 83 – Aviation Jetpardy – Aviation Geeks Podcast
For those who missed our fun-filled game of Aviation Jetpardy, you can listen to me take the crown. That was fun.

JetBlue Finishes Converting to Sabre Reservation System – BNET
JetBlue has finished its conversion, and it looks like they’ve come through relatively unscathed. Very impressive.

choose your bin space wisely – antibride
You probably have plenty of things that you think about when you pick a flight, but bin space may not be one of them. If you have a lot to bring, you should consider it.

Grand Rapids Airport Says Abused by Legacy Airlines – BNET
I can understand why Grand Rapids is happy to have AirTran come in, but I’m not sure why they feel the need to rip everyone else that serves the airport.

The Death of the Press Release – BNET
Press releases no longer make sense to me in this day and age. I’m calling for an end to them.

TSA Tells Richmond Airport to Give Convict Full Airport Access – BNET
TSA hires convict. TSA tells airport to badge him. Airport not happy.

The folks at Frontier announced their summer schedule yesterday, and there are a whopping 7 new cities joining the Frontier network. You know what they have in common? Not a single one of them is served by Southwest. Ah, very smart.

Here’s the list of newbies:

• Branson (Missouri)
• Grand Rapids (Michigan)
• Green Bay (Wisconsin)
• Long Beach (California)
• Madison (Wisconsin)
• Newport News (Virginia)
• Santa Barbara (California)

As you can see, not only are these not served by Southwest currently, but it’s highly unlikely that Southwest will start serving them any time soon. That’s a good strategy. And it won’t surprise you to know these are all being served by Embraer 190s. Those planes provide much greater comfort than the Bombardier regional jets that United flies on some of these routes and they’re much smaller than anything Southwest operates.

Long Beach is obviously the most exciting to me personally. Six slots were raffled off and Frontier picked up two. Allegiant also picked up two, and I find myself wondering what the heck they’re going to do with them (if anything) while SkyWest and JetBlue picked up one a piece. Southwest certainly won’t be coming in to Long Beach, though United could use commuter slots if they really wanted to fight Frontier.

Branson is the other really interesting one to me. When I visited those guys in 2008, Denver was one of the big markets they identified as being important to them. Sure enough, they’ve found their Denver entrant, the only flight that goes west from the new airport. It’s only operating four days a week for now, and I think it’s a good test. Even better, I know Branson has no qualms about offering exclusivity, so there’s no threat of competition coming in if it works out, at least not for awhile.

Newport News may seem kind of goofy, but I imagine there’s a fair bit of traffic on Lockheed Martin alone between the two cities. It just might work with all the military stuff going on there.

Grand Rapids, Madison, and Santa Barbara already see service from United Express, but that clearly doesn’t concern Frontier, and for good reason. They’re looking at different flight times and sometimes superior aircraft.

Grand Rapids sees a single daily Embraer 170 from United Express. Frontier will run it once a day at opposite times, so it provides a good balance. The equipment is basically the same on the inside, but the different times should help this out.

Madison and Santa Barbara are different. United flies Madison three times a day, but two of those are on cramped 50 seat CRJs and one is on an only slightly less cramped CRJ-700. That’s two long hours on those little tubes. Santa Barbara is similiar although it only sees two flights a day. So now Frontier can come in with one a day to Madison and two a day to Santa Barbara and provide a much better experience for a two hour flight.

They really are focusing on the onboard experience here, which is funny because they still haven’t addressed the fact that the onboard experience is much different on the Airbus aircraft with LiveTV than on the Embraers without. Why do I say they’re focusing on the onboard experience? The new routes are only part of the change here. They are also getting rid of their turboprops entirely – Lynx is toast. Yes, the 11 Q400s will go away and they will be replaced by either Embraer 190s or the smaller Embraer 170, something that hasn’t been seen flying out of the Denver hub yet. In the process, both Fargo (North Dakota) and Tulsa will lose Frontier flying completely.

Why are they doing that? In their words, “The transition to jet service will improve the Company’s ability to operate in highly contested markets in which the Q400 operates at a competitive disadvantage to jet service offered by competitors.” My guess is that they couldn’t find enough profitable markets in the West and figured the fleet was so small, they might as well just kill it off instead of trying to port it around the country looking for markets. Too bad. I like that plane.

They are also getting rid of their 7 orphan CRJ aircraft. They fly a boatload of Embraer regional jets, but they had this once 24-strong CRJ fleet buzzing around for Continental for awhile. It’s now down to 7, and there’s no reason to keep that either, so they can now unload one certificate (Lynx) and two aircraft types.

Lots of changes here, and I like what I see. Adding those non-Southwest competitive markets will not only strengthen the fares they get onboard the local flights, but it will also help with the mix on the flights to big cities. It will help them fight Southwest by not fighting Southwest. See, the more flights they have in these smaller markets, the more flights they can support in the larger ones even with the competition.

This is really the closest I’ve seen to a low cost carrier operating a true hub and spoke model. They have the large markets covered, and now they’re looking at the smaller ones. United should be concerned. I look forward to seeing their response.

Notes:
*Original Frontier Airbus photo via Flickr.
*I recently began a short term social media consulting stint with Long Beach Airport (full disclosure and all). It’s noted on my code of ethics page.

For an airline that has done a good job of avoiding inflight entertainment like the plague, Southwest sure is diving right in when it comes to wireless internet service. The deal is done and wifi will start rolling out aggressively next quarter.

Don’t get me wrong. They’ve been incredibly slow in actually getting to this point, but from now on, it’s going into overdrive. There are currently four test planes outfitted with wifi, but it’s been that way for about a year now. That’s one long test period.

Southwest has now signed an equipment purchase agreement and that means two things:

1) Wifi provider Row 44 is peeing its pants with joy now that it has a huge paying customer

2) The last hurdle between Southwest and the rollout is gone

Beginning in the second quarter of this year, Southwest will start outfitting a plane every other day. They hope to ramp that up to 25 per month soon after. With around 550 airplanes in the fleet, it’s going to take them about 2 years to get it completely done. When it’s done, however, they’ll be one of the largest wifi providers in the sky.

How much will they charge? They aren’t saying just yet. According to their blog, “We’re still testing a variety of price points on the four aircraft that currently have wi-fi. We’ll have a decision on price in the second quarter of 2010 . . . .”

Fair enough, but I think it’s safe to assume that the Business Select crowd won’t pay a dime while the rest of the herd will have to pay something. We just don’t know what yet. Heck, if they can get enough advertising revenue from a sponsor, maybe they’ll go that way from time to time. The good news is that they have complete and total control of the content, so they can do pretty much whatever they want on that end. That’s why they went with Row 44’s satellite option even though the ground-based option from AirCell would have fit their network just fine.

For Southwest, this is the perfect technology. They’ve long avoided inflight entertainment because it adds cost. Airlines haven’t been able to charge for overhead movies for a long time, and in-seat video is costly. It’s not just the content but also the weight and the extra pieces that can break in each seat. It’s just not a Southwest way of doing things. But wifi is different. It does add a little weight, but it only gets installed in one place so you don’t run the risk of having a problem at every seat.

More importantly, the test they’ve been running apparently shows them that they can make money on this, or at least make it cost neutral. (I have to assume that’s what the test showed.) That means that for the customers, it’s a nice perk that they’re willing to pay for. It also helps business people with productivity (even if they don’t want it, but that’s another story).

This combined with Business Select and Earlybird boarding makes it sound like Southwest is once again trying to The Company Plane for more and more people.

I had heard rumblings of this nearly six months ago, but now it’s official. United is offering one way award redemptions, and we should all be happy about that. Not only that, but they’re letting you pay with cash plus miles. These changes make your Mileage Plus miles much more useful, but of course, there are some restrictions. Let’s dig in a little bit more.

American has been doing one way awards for awhile, and my guess is that’s what spurred United to follow as well. Even though Delta may be the largest airline around these days, American and United have always seen each other as chief competitors. The shared O’Hare hub and long history certainly contributes to the rivalry. So United is matching American with one way awards and stepping up with cash plus miles.

Like American (and unlike some international carriers), United will simply charge you half the number of miles required for a roundtrip ticket to go one way. That means you can get a one way domestically for only 12,500 miles. This makes your miles much more useful.

For example, when we found an inexpensive one way fare to Indiana for the holidays, we wanted to use miles to get back home. I actually would have preferred to use my United miles, but they didn’t have one way awards. So I used American miles instead. Now I have a choice.

This also creates an opportunity to mix and match awards. Before this change, if you found saver awards available one way but only standard (double price) awards the other, you have to pay the full standard award amount. But now, you can simply buy two separate one way awards at different levels. That saves you a lot. You can also go one way on United and the other way on American, if availability dictates it.

But what if you don’t have enough miles for your trip? Well, you can use miles plus points. This to me seems like the beginning of moving toward a revenue-based mileage system. Right now, it looks like the miles and cash are zone-based, but eventually I would bet it would be able to move toward a dollar per mile valuation. Let’s see how it works now.

A roundtrip from LAX to Chicago is 25,000 miles on random dates. You can also do 15,000 miles plus $110 (actually $131 after taxes). The same award from LAX to New York is 15,000 miles plus $120. For LAX to San Francisco, it’s 10,000 miles plus $90. Nonstops versus connections don’t seem to make a difference, but these are only available on roundtrip saver awards on some routes. So it is restricted now, probably to see how it works.

Is this a good option? For LAX to San Francisco, I’d say not at all unless you’re traveling at the last minute. If you bought a ticket on those flights today, you’d save $83. That means you’re getting less than a penny per mile. For the JFK option, you’d save $266 so that’s up near 2 cents a mile. The point is, you really need to look at your specific flight to see how much it would cost to just buy it. You just can’t make a blanket statement here.

No matter what, this is a really nice option to have. I know some people are sad that this means the death of stopovers (you now need 3 one way awards), but that’s only for awards using United. If you do Star Alliance awards, then the old rules are still in tact.

This adds a lot of value for fliers and doesn’t take much away. I always like to see that.