As U.S. Airlines Struggle, Foreign Carriers Innovate

Foreign carriers have been buying new planes and updating luzury offerings while U.S. carriers fall behind.


United, too, plans to upgrade its premium international service. The Elk Grove Village, Ill., carrier, which came out of Chapter 11 bankruptcy protection Feb. 1, plans to spend $165 million to retool its business and first class next year, and will install redesigned seats.

Sophisticated planes

Still, those efforts are falling short of the money foreign carriers are spending on new aircraft and amenities.

All Nippon Airways and Singapore Airlines, to name just two moneymakers, are snapping up the Boeing 787 Dreamliner, which will go into service in 2008. Of the major U.S. carriers, only Northwest, which last year ordered 18, and Continental, which last week ordered 10, are buying the sophisticated new plane in significant numbers.

Made from light composite materials -- chiefly advanced plastics -- the 787, according to Boeing, will burn 20 percent less fuel than other planes of similar size -- a big deal for airlines in an era when the price of crude oil is hovering near $70 a barrel.

Indeed, the world's airlines would have been profitable last year had it not been for the sky-high price of fuel, according to the international association. The trade group's prediction of $3 billion in worldwide losses this year is predicated on an average price of $66 per barrel for 2006.

Leading foreign airlines, including Singapore, Emirates and Virgin Atlantic, are also placing orders for Airbus' next-generation A380 super jumbo for long-haul routes. Although planned deliveries of the 555-seater have been slowed because of Airbus' vexing problems with electrical wiring and the rough wake churned up behind the huge aircraft, the A380 will start flying by the end of this year and could transform long-distance travel over time.

For United, busy righting itself after its long flight through Chapter 11, buying new planes is an unaffordable luxury. "We have to earn the right to be able to do that,'' said spokeswoman Jean Medina, who said United's planes average a relatively young 11 years old.

Most American carriers reduced their fleets after the Sept. 11, 2001, terrorist attacks and during the economic downturn. Some, such as JetBlue Airways, the stylish low-cost carrier that has had two successive losing quarters after several years of profit, are still doing so. Last week, JetBlue said it will sell five of its Airbus A320s, but expects to turn a profit for 2006.

Last year, more than half of the 93 orders by American carriers from Boeing came from low-cost and regional carriers. Alaska Airlines ordered 35 Boeing 737s last year, according to Boeing, and Southwest ordered 10. This year, Southwest will expand its fleet to 480 aircraft from 445 -- all are Boeing 737s, said Southwest spokeswoman Whitney Eichinger. The largest version of the 737 in Southwest's fleet, the 737-700, is used chiefly on domestic routes.

Used in normal conditions and well maintained, the Boeing 737 can be used for 15 to 20 years as a passenger aircraft, according to a Boeing spokesman. The wide-body 747 has a lifecycle of 20 to 25 years, while the 787 could be safely used to carry passengers for 40 or more years, thanks to its composite structure, which is more flexible and durable than aluminum. Converted to carry only freight, these aircraft can gain a few more years in the sky, the manufacturer says.

With few if any new aircraft on the tarmac, major U.S. carriers will have to be content with tweaking planes they already have, flying new routes -- such as United's daily flight between SFO and Toronto starting in September --

and rethinking in-flight service.

Battle for London

But even after upgrading their first and business classes, United, American and others may still struggle to match innovative foreign competitors such as Virgin Atlantic, which flew far ahead of U.S. airlines during the last five years.

Both United and Virgin fly between SFO and London's Heathrow airport -- but some United fliers have to change planes in the United States before continuing on, while both Virgin and its larger rival British Airways fly nonstop and direct.

And there's service and price to consider -- not only in business and first class, but also at the back of the plane.

We Recommend