All flights canceled to two airports for 2½ days, word of 71 percent fewer flights to the New York area, mergers and bankruptcies, and rising airfares, new fees and surcharges. And those are just the things impacting Tucson International Airport.

A lot has happened in the four weeks since the last Inside Business Travel column appeared in the March 24 issue.

It’s a sign of the turbulent times facing business travelers these days. Earlier this month, analysts at JPMorgan and Calyon Securities forecast the airline industry will lose at least $4 billion this year, and fuel prices have only escalated since then.

Delta Air Lines CEO Richard Anderson told the Associated Press April 22 the nation’s airlines need to raise fares by 15 percent to 20 percent just to break even at current fuel prices.

Delta and Northwest announced April 14 a $17.7 billion plan to merge their two carriers, assuming federal regulators agree.

Since Dec. 20, airlines have raised fares nine times, according to BestFares.com. But that’s not all, airlines are tacking on fuel surcharges, most have announced plans to charge $25 to check a second bag and last week US Airways said it will tack on a $5 charge to reserve certain seats in coach.

Like a baseball game, different things are happening all over the field that can impact the outcome. This week, we run down the situation as it involves airlines serving Tucson International Airport, including first-quarter financial data if it was reported as of April 24.

Aeroméxico Connect

Maybe no airline in this hemisphere has had a rougher go of it the past two years than parent company Aeroméxico, but that’s changing. In October, Mexico’s government sold its 62 percent stake in the carrier for $249 million plus assumption of $1 billion in debts to an investor group that included Banamex, a subsidiary of Citigroup. They’re pumping in another $250 million to upgrade the airline.

Aeroméxico Connect is getting rid of its SAAB 340 turboprops and replacing them with Embraer 145 regional jets. As of this month, the jets are flying the route from Tucson to Hermosillo, Son., on Mondays and Saturdays. The plan is to increase that to seven days a week by the end of the year. Also good for Tucson, the airline lowered its fares about 40 percent and has seen more than a 70 percent jump in passengers.

• 2007 financial data unavailable. 2006 losses totaled $47 million from $1.9 billion revenue.

• Fleet to Tucson: Embraer 145 regional jets, average age: 6.6 years, and SAAB 340 turboprops, average age: 17.1 years. Average age of entire fleet: 8.5 years.

Alaska Airlines

For an airline that’s been flying since the 1930s, Alaska tends to be under the radar of those looking at what might happen to the big carriers. Because of its West Coast routes, fleet of Boeing aircraft, and staffing levels - a lot of ground handling at airports is outsourced - Alaska makes a good merger target for several airlines, including Continental and Southwest, but the one that gets talked about the most has been American Airlines. That might not be good for Tucson. Since 1987, American has taken over what was once Air California, Reno Air and TWA - but all were swallowed by American and disappeared.

What could turn out to be one of the few announcements of upgraded air service in Tucson this year, Alaska says it will add a second daily round-trip flight to Seattle starting June 8.

• 2007 operating profit of $212 million from $3.5 billion revenue. Cash reserves: $713 million. First quarter 2008 loss of $36.3 million from $839 million revenue. First quarter 2007 was a loss of $15.8 million from $759 million revenue.

• Fleet to Tucson: Boeing 737-900, average age: 4.1 years. Average age of entire fleet: 8.7 years.

American Airlines

American is the only big legacy airline never to have gone through the purging process of a Chapter 11 bankruptcy, which could explain why, in the midst of this month’s groundings of MD-80s, its pilots union was buying full-page newspaper advertisements and sending out press releases about the company’s bad management. An obvious sign contract negotiations were underway.

Tucson was severely impacted by the groundings of the MD-80s because that is the only type aircraft American flies to this market. They’re older and not as fuel efficient as newer aircraft and American now says it is going to accelerate plans to get rid of them, which it hopes to accomplish within two years. The catch is they’re not taking deliveries on new planes fast enough to replace the retirements so there will be fewer airplanes in the air. American says its system-wide capacity will be 4.5 percent less by the fourth quarter of this year.

• 2007 operating profit of $965 million from $22.93 billion revenue. Cash reserves: $4.6 billion. First quarter 2008 loss of $328 million from $5.7 billion revenue. First quarter 2007 was a profit of $81 million from $5.43 billion revenue.

• Fleet to Tucson: MD-80, average age: 18.2 years. Average age of entire fleet: 15 years.

Continental Airlines

Arguably the most efficiently run major carrier in the air these days but now even Continental’s management says a merger might be necessary to survive. Analysts and the media have focused mostly on a hook-up with United Airlines but there is no deal and with United’s big losses announced last week, it makes less financial sense. Continental has been modernizing its fleet of aircraft on a regular basis and that makes it a potential attractive merger partner with American. Also, Continental’s most obvious domestic weakness is in serving the west, which makes Alaska a potential partner.

Continental says it will reduce capacity by about 2 percent the next two years as it retires older aircraft.

• 2007 operating profit of $687 million from $14.23 billion revenue. Cash reserves: $2.8 billion. First quarter 2008 loss of $80 million from $3.57 billion revenue. First quarter 2007 was a profit of $22 million from $3.18 billion.

• Fleet to Tucson: Boeing 737-300 and 737-500, average age: 16.2 years; Boeing 737-700, average age: 7.1 years. Average age of entire fleet: 10.2 years.

Delta Air Lines

To hear Delta CEO Richard Anderson these days, the merger of his airline with Northwest is the future for the industry. Unlike some other airline mergers, both of these two carriers are about as healthy as any in the industry. The argument, though, is the industry needs consolidation into bigger airlines in order survive and borrow money. The Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights began hearings on the proposal Thursday (April 24) and a similar committee in the House is scheduled to do the same next month.

Delta has mostly looked kindly on Tucson, gradually increasing service here to its hubs at both Atlanta and Salt Lake City. A potential boost from the merger could come from using its recently introduced flights to Los Angeles International Airport to connect with what are now Northwest flights across the Pacific to Japan and Hawaii.

• 2007 operating profit of $1.09 billion from $19.1 billion revenue. Cash reserves: $2.79 billion. First quarter 2008 operating loss of $274 million from $4.76 billion revenue. (The airline’s reported net loss of $6.39 billion included $6.1 billion in accelerated depreciation taken in anticipation of its announced merger with Northwest.) First quarter 2007 was a loss of $130 million from $4.24 billion revenue.

• Fleet to Tucson: Boeing 757, average age: 15.9 years. Average age of entire fleet: 14 years.

ExpressJet

At Tucson International, this airline has three identities: ExpressJet flying to eight different non-stop destinations, Continental Express to Houston and Delta Connection to Los Angeles. About 80 percent of its business is contract flying under the names of other airlines and that is profitable. But Continental, its biggest customer, is continuing to negotiate lower rates.

The two-year plan to launch ExpressJet’s own "branded" service is beginning to show some positive signs. Although the airline won’t talk specifics, flights from Tucson to Kansas City, Sacramento and Ontario, Calif., appear to no longer be money losers judging by average fares and the numbers of seats that are being filled.

All totaled, ExpressJet filled 65 percent of its outgoing seats from Tucson in March, which included El Paso, a destination now dropped because flights were averaging less than 10 percent full. System-wide, ExpressJet’s branded operations flew 72.5 percent full in March.

The airline says the rising costs of fuel are going to force it to make decisions about unprofitable routes quicker.

• 2007 operating loss of $106.9 million from $1.68 billion revenue. Cash reserves: $189.3 million.

• Fleet to Tucson: Embraer 145 regional jets, average age: 6.4 years. Average age of entire fleet: 6.4 years.

Frontier Airlines

Try as it might, Frontier hasn’t been able to do much more than fly back-and-forth to its nest at its hub in Denver. Attempts last year at route expansions into Mexico, California and the Southeast all failed. Frontier filed for Chapter 11 bankruptcy protection April 11 because its primary credit card processor said it was going to start withholding more money from customer transactions.

In the scope of the entire airline industry, Frontier may be an insignificant factor but it carries more than half the passenger traffic between Tucson and Denver.

Further complicating matters, Frontier and Republic Airways said April 23 they are ending an agreement. It’s a decision that will directly impact Tucson since Republic Airways (see separate item) is currently operating all of Frontier’s flights from Tucson.

The bottom line is that Denver could become a whole lot more difficult to get to from Tucson this year.

• 2007 operating loss of $7.1 million from $1.34 billion revenue. Cash reserves: $170 million.

• Fleet to Tucson: Airbus A318, average age 3.2 years; Airbus A319, average age: 4.2 years. Average age of entire fleet: 4 years.

JetBlue

As has already been reported, JetBlue is pulling out of the Tucson market entirely after May 12 and will reduce its capacity system-wide by 2.8 percent by the end of the year.

• 2007 operating profit of $169 million from $2.84 billion revenue. Cash reserves: $835 million. First quarter 2008 loss of $8 million from $816 million revenue. First quarter 2007 was a loss of $22 million from $608 million revenue.

• Fleet to Tucson: Airbus A320, average age 3.9 years. Average age of entire fleet: 3.4 years.

Mesa Air Group

When you fly US Airways Express from Tucson to Phoenix or Las Vegas, it’s Mesa, which is based in Phoenix. Like ExpressJet and SkyWest, the pressure is on airlines flying mostly regional jets and there are industry analysts forecasting fallout among these carriers.

Mesa is vulnerable. It’s short of cash after an $80 million judgment against it in Hawaii where its inter-island subsidiary, go! airlines, is losing money. Earlier this month, Delta said it wants to end a $250 million-per-year contract with Mesa to fly routes from Los Angeles. (Mesa has filed a lawsuit trying to stop the cancellation.)

In the meantime, Mesa is trying to raise cash and is considering selling its parts inventory and issuing more stock to cover some bond repayments that are coming due.

Anything that might cause Mesa to reduce service could manifest itself by reduced US Airways flights to Tucson.

• 2007 operating loss of $92.9 million from $1.28 billion revenue. Cash reserves: $90.9 million.

• Fleet to Tucson: Canadair Regional Jet, average age: 6.4 years. Average age of entire fleet: 7.1 years.

Northwest Airlines

Potentially the problem portion of the Delta-Northwest merger. The pilot group and other unions at Northwest are not happy the merger announcement was made without agreements from them. The problem stems from Northwest having more pilots who could bump Delta pilots in senority when the two merge because many senior Delta pilots retired before the airline filed bankruptcy two years ago. Delta pilots reached an agreement before the merger was announced to secure their seniority spots.

Northwest’s flights to Minneapolis generally fill up with fares that, in the past, have paid their way so it’s not likely they would be jeopardized in a merger. There is also the hope the merger might improve the chances for a non-stop flight from Tucson to Detroit, one of Northwest’s hubs.

The one thing that will impact Tucson is that Northwest’s operations here are mostly outsourced and the logical presumption is that after the merger those operations would be taken over by Delta, which has its own employees handling its own flights as well as those of Alaska.

• 2007 operating profit of $1.1 billion from $12.53 billion revenue. Cash reserves: $3.03 billion. First quarter 2008 operating loss of $191 million from $3.1 billion revenue. (The airline’s reported net loss of $4.1 billion included $3.9 billion as a "non-cash goodwill impairment charge" in anticipation of its announced merger with Delta.) First quarter 2007 was a profit of $73 million from $2.87 billion revenue.

• Fleet to Tucson: Airbus A319, average age: 6.1 years. Average age of entire fleet: 11.4 years.

Republic Airlines

You thought you were flying Frontier Airlines to Denver, but no, it’s really Republic Airlines if you’re on an Embraer 170 - and under the current schedule that’s the only kind of plane Frontier is flying from Tucson. Republic and Frontier announced April 23 that deal involving 12 planes will end. The first four planes will be taken out of the schedule May 1, followed by six more June 2 and then the last two on June 23.

Frontier says it will reallocate some of its Airbus aircraft to fill the void in markets such as Tucson but end service entirely to five other markets and not start service to Missoula, Mont.

In retrospect the deal wasn’t good for Frontier because fuel costs were a pass-through item that Frontier had to pay.

• 2007 operating profit of $230.3 million from $1.29 billion revenue. Cash reserves: $164 million. First quarter 2008 profit of $20.2 million from $363.9 million revenue. First quarter of 2007 was a profit of $19.3 million from $290.4 million revenue

• Fleet to Tucson: Embraer E-170s, average age: 2 years. Average age of entire fleet: 2 years

SkyWest

Again you wouldn’t know it by looking at their planes, but SkyWest is one of the busier airlines at Tucson International with 13 daily departures: five to Salt Lake City as Delta Connection and four to Los Angeles, three to Denver and one to San Francisco as United Express. As is the case with both ExpressJet and Mesa, industry analysts are forecasting fallout among airlines flying most regional jets but SkyWest is in the best financial position among its direct competitors. SkyWest has deep and solid ties to both Delta and United, which is good for Tucson because it also has a significant aircraft maintenance hangar at the airport.

• 2007 operating profit of $34.5 million from $3.37 billion revenue. Cash reserves: $645.7 million.

• Fleet to Tucson: Canadair Regional Jet, average age: 5 years. Average age of entire fleet: 6.4 years.

Southwest Airlines

The poster child of profitability in the airline industry. With its first-quarter profit announcement, Southwest has now made a profit each of the past 68 quarters - that’s 17 years. But even Southwest is changing its business model, eliminating what were marginally profitable flights because of increased operating costs. So far, the only cut in Tucson is the elimination of one of six daily round-trips to Las Vegas as of May 10.

For the rest of the year, Southwest says it will continue to grow capacity as it takes posession of 29 new planes it had ordered but it is cutting 2009 deliveries in half to 14, putting off the rest until 2015. It will also delay deliveries of 12 other planes it had planned to take in 2012.

Southwest has grown its Tucson operations every year since it started flying here in 1994 and now carries more passengers than any other carrier.

• 2007 operating profit of $791 million from $9.86 billion revenue. Cash reserves: $2.8 billion. First quarter 2008 profit of $34 million from $2.5 billion revenue. First quarter 2007 was a profit of $93 million from $2.2 billion revenue.

• Fleet to Tucson: Boeing 737-300 and Boeing 737-500, average age:17 years; Boeing 737-700, average age: 4.9 years. Average age of entire fleet: 9.9 years.

Sun Country Airlines

A new arrival in Tucson this past winter bringing snowbirds twice a week from Minneapolis. That service ran from Dec. 17 until April 7. Sun Country has furloughed 45 of its 156 pilots until November and cut 28 full-time and 97 part-time jobs, about 11 percent of its workforce.

• 2007 operating loss of $34 million from $234 million revenue. Cash reserves: Unknown, privately owned by Minneapolis business man Tom Petters.

• Fleet to Tucson: Boeing 737-800, average age: 5.8 years. Average age of entire fleet: 5.8 years.

United Airlines

United CEO Glenn Tilton has made no secret of his belief his airline needs to be part of a consolidation movement. United emerged from Chapter 11 bankruptcy on Feb. 1, 2006 - after spending an industry-record 38 months under protection. The carrier’s first-quarter $537 million loss not only ate away 15 percent of its available cash but it sent its market capitalization value down to the point that its most widely rumored merger partner, Continental, became worth more than United ($1.6 billion for United, $1.7 billion for Continental).

United is attractive only because of its sheer size. In recent years, the airline has put off deliveries of new aircraft. Continental, while smaller, has younger aircraft. With United’s new financial headaches, analysts are growing skeptical over a United-Continental merger. On the other hand, some are beginning to talk of United pairing up with US Airways.

With last week’s poor earnings announcement, United said it will cut 1,100 jobs and otherwise reduce expenses that will amount to a 9 percent reduction in service by the fourth quarter of this year. The airline has already asked for permission to delay for one year the start of flights between San Francisco and Guangzhou, China.

• 2007 operating profit of $1.04 billion from $20.14 billion revenue. Cash reserves: $3.55 billion. First quarter 2008 loss was $537 million from $4.71 billion revenue. First quarter 2007 was a loss of $152 million from $4.35 billion revenue.

• Fleet to Tucson: Airbus A319, average age: 8.2 years; Boeing 737-300, average age: 18.4 years. Average age of entire fleet: 13.7 years.

US Airways

Not only does US Airways continue to have a poor reputation for customer service, it has been more than two years since the former America West and US Airways were combined in the industry’s most recent merger. But they’re still not fully merged with the two former pilot groups still working under separate contracts.

CEO Doug Parker last week said he still believes the airline industry needs consolidation. But his airline is apparently not a sought-after merger partner, although there has been some discussion of a hook-up with United. Wall Street isn’t enamored with that because both airlines are struggling.

Throughout its history US Airways and America West have treated Tucson as a secondary market mostly shuttling passengers back-and-forth to its Phoenix hub and lately nearly all of that is on regional jet flights contracted through Mesa. The relationship changes in a most significant way, come June 3, when US Airways introduces non-stop flights to what is now the airline’s biggest hub, Charlotte, N.C.

System-wide, US Airways is planning to reduce capacity by 2 percent to 4 percent by the fourth quarter and return six Boeing 737s as leases expire later this year and next year.

• 2007 operating profit of $427 million on $11.7 billion revenue. Cash reserves: $2.17 billion. First quarter 2008 loss of $239 million from $2.84 billion in revenue. First quarter 2007 was profit of $66 million from $2.73 billion revenue.

• Fleet to Tucson: Airbus A319, average age: 7.5 years; Boeing 737-300, average age: 19.2 years. Average age of entire fleet: 12.3 years.

Contact David Hatfield at dhatfield@azbiz.com or (520) 295-4237. Inside Business Travel appears the fourth week of each month.