Pilot Of TWA 800 Just Before Fateful Flight Questions Official Conclusions
http://twa800.com/news/cimisi-9-6-00.htm
Associated Retired Aviation Professionals
Post Office Box 90, Clements, Maryland 20624 USA


It is no surprise to anyone on either side of the TWA Flight 800 controversy that the National Transportation Safety Board declared at its final, just concluded hearing that the doomed plane that exploded four summers ago was brought down by an electrical spark which had ignited vapors in the empty or near empty center wing fuel tank.

Unfortunately, the NTSB said, its investigators have not been able to locate the spark or wire that originated the explosion.

Among the many who contest the NTSB scenario is the last pilot to fly the 747 and live to talk about it.

In a phone interview some days after the NTSB hearing, now retired TWA pilot Al Mundo, who had brought the plane into New York from Athens late on the afternoon of July 17, 1996, explained not only the fuel system of the plane, but detailed his reasons why the center wing fuel tank would not have been the initiating cause of the explosion or explosions that destroyed Flight 800.

"We had left Athens that Wednesday morning," said Mundo. "The center wing tank would have been full."

The center wing fuel tank is just that: a tank of fuel that is directly in the middle of the plane, beneath the passenger cabin.

Before going into the reasons why the fuel in that tank would not have been full on arrival in New York, Mundo explained the fuel system of the 747.

"There are four main tanks of fuel, and two reserve tanks, to feed into four engines. If you're sitting in the cockpit, from left to right, you have on the edge of the left wing, the number one reserve tank. Then, in sequence, you have the number one main tank, number two main tank, number three main tank, number four main tank, then on the tip of the right wing, the number four reserve tank."

Mundo went on to say that the fuel flow of the plane is maintained so that the weight of fuel throughout the wing span will be balanced. Fuel is normally fed from each tank to its corresponding engine, although, said Mundo, when the combined fuel in the number one main tank and its reserve, and the number four main tank and its reserve equals 25,000 pounds (the fuel is measured in pounds, not gallons), cross feeding fuel procedures are initiated.

"We turn on both of the center wing tank fuel pumps. The center wing tank has two pumps, which work at twice the capacity of the other four main tank pumps; their fuel flow is at fifteen pounds per square inch (psi), the center wing tank pumps put out fuel at thirty psi.

"The cross feed valves are open, which allow fuel from the center wing tank pumps to go to the number one, two, three and four engines. We shut off the pumps from the number one main and its reserve and the number four main and its reserve. We leave the pumps on from two and three as back up, though because they are working at a rate only half that of the center wing tank, it's the center wing tank that is supplying fuel to the engines. At that point the two and three main tank feed is there as a backup. Anyway, at this point the center wing tank is supplying fuel to all the engines.


"Eventually, as the center wing tank burns down to about 3,000-4,000 pounds of fuel, the fuel begins to feed from the number two and three main tanks."

When the fuel quantity in the center wing tank gets low, a light for each pump begins to blink on the flight engineer's panels. "When the light gets steady," said Mundo, "you turn off the pump for that light.

"Then you turn on the fuel/water scavenge pumps in the center wing tank to drain any liquid remaining. "

With the feed from the center wing tank now turned off, all four engines are being fueled from the number two and number three main tanks. At the point where there are about 25,000 pounds of fuel in each of the main tanks (again, with number one main and reserve tanks and number four and reserve tanks totalling 25,000 pounds each), so there is an even balance across the wing. Cross feeding is terminated so that main tank one and its reserve will be going into its respective engine, number two into its respective engine and so forth.

Mundo went on: "When the plane landed in New York, the center wing tank guage in the cockpit would have read zero pounds. It is possible that the underwing center wing tank fuel gauge could have read 300 pounds, which would be about fifty gallons. This is not an unusual discrepancy."

In the first few days after the Flight 800 investigation Mundo asked a TWA official what exactly the fuel use log had shown in regards to the quantity of fuel in the center wing tank upon arriving in New York. "He told me," Mundo said, "that the log, which is placed in the Flight Document Envelope and normally kept for ninety days, could not be found. This was an abnormality."

He added that whatever level of fuel existed in the center wing tank at that time would not be entirely composed of fuel. "All fuel contains some water. It's the same with the gas in your car. Fuel is 6.7 pounds per gallon; water is heavier, 8.34 pounds, so the water goes to the bottom of the tank. This combination of water and fuel is what the scavenger pumps transfer to the number two main tank."

Mundo said, "When 747's undergo a heavy maintenance check, and the nose wheel strut is deflated which tilts the plane downward, all the liquid in the center wing tank fuel goes to the front of the tank where it is drained out. The amount drained is usually close to fifty gallons or around 300 pounds."

In sum, the center wing tank of the plane that was about to become Flight 800 was empty or nearly empty before leaving New York in the late afternoon prior to its evening takeoff to Paris.

Because of prevailing winds, planes usually carry more fuel when going west than when going east. "And then," said Mundo, "you also have to consider the distance youâ ¬!"re travelling. Athens to New York is a lot farther than New York to Paris."

Now we get to one of the crucial points of the NTSB theory about the volatility of the center wing tank. Mundo said, "There is the assumption by the NTSB that the fuel was heated by the air conditioning packs below the plane to a temperature that caused the fuel and fuel vapors to reach an explosive level."

This is an assessment with which the majority of the media concur. A New York Times article from Wednesday, August 23, the day after the NTSB hearing began, stated, "the nearly empty tank, which had been heated to an explosive state while the twenty-five year old jet sat baking in the sun for nearly three hours before taking off."

Mundo said, "I left two of the packs running, as was common practice." He added that with the flight time between Athens and New York at about ten hours, "for at least nine and half hours the metal of the tank was, at the altitude we had been flying, exposed to temperatures that were about minus fifty-five degrees Celsius. Now metal will cold soak when your car is outside through the night in January you know it takes the metal some time to warm up.

"This is something they should have tested, but they didn't, exactly. The NTSB flew a plane across the continental United States, trying to duplicate the conditions of the Athens to New York flight, but in the summer the air over the land would be warmer than over the North Atlantic and of course the plane would not be in the air for as long as on an Athens to New York run. Nobody knows exactly what the temperature in the fuel tank was when Flight 800 took off from New York. Commander Donaldson took a reading from a 747 at Kennedy the summer after the accident, and he found the temperature of the fuel drained from the center wing tank which had been on the ground an equivalent amount of time as 800 was, to be a degree above the ambient [outside] tempertaure." (Retired Navy Commander William S. Donaldson has been a longtime critic of the government's investigation of Flight 800.)

"Flight 800 took off for Paris at about 8:15 p.m. on the evening of July 17, 1996. A nearly empty tank has more fuel vapor than a tank that is full. Government investigators speculate that the vapor-ridden center wing full tank was ripe for an explosion instigated by the as-yet unfound electrical source.

But Mundo pointed out that the center wing fuel tank is vented to relieve the pressure inside the tank. "With an aircraft in flight," Mundo said, "you have a Venturi effect over the vent outlet. The more the speed, the less the pressure. When you're in a car and someone's smoking and you open a window, the air pressure outside is less than the pressure inside and the greater pressure inside pushes the air outside; the smoke will be sucked out of the car. The air rushing outside the plane would create a great suction that should have decreased or eliminated any buildup of vapor in the tank." _____

Former TWA pilot Al Mundo then talked about another aspect of the electrical spark theory: on Good Friday, 1995, when he was flying the plane that would become Flight 800 in July, 1996, the aircraft was struck not once but twice by lightning.

The plane did not explode.

"We were descending into Rome. We were at about 13,000-11,000 feet. There were two strikes of lightning, about three minutes apart. There was a loud bang, and a yellow flash; initially there was no indication of anything wrong in the cockpit."

But a photoelectric cell activated an inerting gas whose purpose was to smother any fire or smouldering that could be caused by an electrical spark. This was done on the first lightning strike.

Mundo said, "Upon landing it was discovered there was not only substantial damage to the right wingtip, it was also found that an electrical charge had gone all the way into the wing area, causing circuit breakers in the cockpit to pop and the wheel brake temperature indicators to register full scale when the brakes had scarcely been used. It is quite evident from this that a strong surge of electricty went through the wing.

"The damage incurred was extensive. The plane was out of service for a week," said Mundo.

But despite the damage that had been inflicted by the two lightning strikes, the plane was able to land safely. The inference is obvious: if the plane that expolded fifteen minutes out of JFK in the summer of 1996 was brought down by an electrical spark igniting the center wing fuel tank, why didn't two lightning strikes, which would certainly supply infinitely more voltage to the electrical system of the plane than the theorized stray spark, cause the aircraft to be blown apart?

Early on in the Flight 800 investigation, Mundo learned that there had been sooting found on the right wing vent system. "It seemed strange to me that if the explosion was initiated by the center wing tank, why would there not be sooting on both sides of the wing? I contacted personnel in the investigating team and suggested they check those records from the 1995 flight to determine if the sooting came from the lightning strikes. I was later informed that the records could not be located."

Mundo was questioned by investigators "about five days after Flight 800," he said, but the extent of the questioning was solely on the character of the Athens to New York Flight. The former pilot continues to feel that government investigators have not pursued the obvious lines of inquiry raised above or, if they have, such tests or studies have not been made public.


© 2000 William S. Donaldson III. All rights reserved

US Airways to cut 600 airport positions
US Airways cutting 600 positions at airports this fall, saying economy is forcing cost-cutting
By Joshua Freed, AP Airlines Writer
On Tuesday July 14, 2009, 4:38 pm EDT

MINNEAPOLIS (AP) -- US Airways is cutting 600 ground jobs this fall as it continues to struggle with the slow economy.

The airline said on Tuesday that the biggest cut will be 340 customer service agents around the U.S., who will lose their jobs on Sept. 14. Other layoffs come from closing its Las Vegas US Airways Club on Sept. 13 and reducing staffing at its club in Phoenix.
The airline will also shut its walk-up ticket counter at its headquarters in Tempe, Arizona, its last counter outside an airport.

US Airways also said it will shift to outside contractors for ramp service work at nine airports around Oct. 5, mostly those served by US Airways Express regional carriers.
Capacity cuts combined with a more efficient operation will make it possible to operate with fewer customer service agents, US Airways spokesman Morgan Durrant said.

"We're running a more efficient airline than we have in years past," he said.
Employees who will lose their jobs were informed on Tuesday, according to a memo laying out the cuts written by Chief Operating Officer Robert Isom.

He wrote that the company had hoped staff numbers would fall through retirements and departures for other jobs. But he wrote that attrition has fallen sharply from last year, and the airline needs to shrink faster.

Cuts to the flight schedule and the addition of fees beginning last year have helped, he wrote. "Today's economy demands we continue to look for ways to control costs."

US Airways is also asking 400 flight attendants to take voluntary furloughs in an effort to avoid layoffs in that group.

Airlines in the U.S. have been struggling with plummeting business travel, and US Airways executives have said passenger revenue has fallen further than after the attacks on Sept. 11, 2001.

U.S. carriers are expected to report another round of losses beginning with American Airlines parent AMR Corp. on Wednesday. Analysts surveyed by Thomson Reuters are expecting US Airways Group Inc. to report a second-quarter loss of some $88.5 million, or 80 cents per share, on July 23.

US Airways shares fell 7 cents, or 3.3 percent, to close at $2.04.

London Financial Times
Virgin America plans shake-up
By Justin Baer in New York

Published: July 9 2009 21:39

Virgin America, the carrier founded by Sir Richard Branson, is seeking US approval for a new slate of domestic investors it expects will end a rival’s bid to challenge the company’s ownership structure.

Under the plan submitted to the Department of Transportation, the airline would receive new capital from a group of investors that includes Cyrus Capital Partners, people familiar with the matter said. Cyrus, a New York hedge fund, was one of Virgin America’s original shareholders.

Virgin America began service in 2007 after a battle in Washington over rights to operate domestic flights and its ties to Sir Richard’s Virgin Group, which owns 24 per cent of the US airline.

Alaska Airlines, which competes with Virgin America on routes to Seattle and other west coast cities, has questioned the carrier’s “US citizenship” and petitioned transport regulators in February to investigate its ownership structure. Federal laws cap foreign ownership of domestic airlines at 25 per cent.

“This is a meritless petition,” Virgin America said at the time. “Nothing has changed in our ownership structure, which was approved by the DOT.

“Should our ownership structure change in the future, we will of course notify the DoT in advance, so they can confirm our continuing compliance.”

Alaska’s petition came as Black Canyon and Cyrus, Virgin America’s two US shareholders, exercised an option to recall their $150m investment in the company.

Virgin America had hired Lazard, the investment bank, earlier in the year to recruit new domestic investors.

The new round of capital may be less than $150m, reflecting the steep falls many US airline stocks have endured as demand slumped. Shares of Delta Air Lines, the world’s largest carrier, have lost half their value since the start of the year.

People familiar with Virgin America’s structure note that its agreement with the DoT enabled it to keep Black Canyon and Cyrus as stakeholders and remain in compliance with foreign-ownership rules even if the two firms recalled their capital.

Virgin Group plans to transfer the two firms’ stakes to its new US investor group once the structure plan is approved.

By May, Virgin America was in talks with at least five US funds. Virgin America and Cyrus did not return calls.

Copyright The Financial Times Limited 2009

United Denies Claim For Broken Guitar, Passengers Sings for Revenge
By Scott McCartney
July 8, 2009, 1:48 PM ET

Musician Dave Carroll watched in horror as United Airlines baggage workers at Chicago’s O’Hare International Airport manhandled his $3,500 guitar last year. When he and his band arrived in Nebraska, the guitar was broken.Thus began Carroll’s sad song.

Filing a claim for reimbursement for the guitar proved futile; airlines often exempt “valuables” including musical instruments from damage coverage in their contract of carriage. So Carroll and his band, Sons of Maxwell, decided to seek revenge instead of reimbursement. He told the last person to deny his claim, Ms. Irlweg, that he “would write and produce three songs about my experience with United Airlines and make videos for each to be viewed online by anyone in the world.”

He put together a catchy song and cute video describing his nine-month hassle and posted it. Although United saved $3,500 by denying his broken guitar claim, the music video likely will generate far more than that in negative publicity for the airline.Many travelers can relate to Carroll’s frustration.

Even if you don’t like country music, you probably can appreciate his video.

Here is the link for his song

http://www.youtube.com/watch?v=5YGc4zOqozo

Boeing to buy plant from 787 supplier

CHICAGO (Reuters) – Boeing Co (BA.N), the world's second-largest plane maker, said on Tuesday it will pay $580 million for a plant that makes part of the fuselage of its long-delayed 787 Dreamliner.

The South Carolina facility is owned by Vought Aircraft Industries and release it from obligations to repay money previously advanced by Boeing, the company said in a statement.

The deal, which is expected to close in the third quarter, may give Boeing more control over its supply chain. Boeing last month announced a further delay of the first test flight of the carbon-composite 787. The latest delay was caused by a structural flaw, while previous delays have been related to suppliers.

"Integrating this facility and its talented employees into Boeing will strengthen the 787 program by enabling us to accelerate productivity and efficiency improvements as we move toward production ramp-up," said Scott Carson, chief executive of Boeing Commercial Airplanes.

Boeing will buy the plant, its assets and inventory and will assume operation of the site. After the transaction, Vought will continue its work on several Boeing programs, Boeing said.
Vought is owned by Carlyle Group (CYL.UL).
(Reporting by Kyle Peterson; Editing by Derek Caney)

British Airways to severely cut capacity, delay new A 380 aircraft and mothball others
Fri Jul 3, 3:09 pm ET

LONDON – British Airways PLC announced Friday it will ground aircraft, slash seat numbers and postpone taking delivery of a dozen new Airbus A380 superjumbos as it faces a recession-driven decline in passengers.

The airline said it carried 2.93 million passengers in June, 5 percent fewer than in June 2008.

BA said that in response to the "challenging economic conditions" it was cutting its summer capacity by 3.5 percent, rather than the originally forecast 2.5 percent. Capacity for October through March 2010 is expected to be down by 5 percent.

The airline said it would ground three Boeing 757 aircraft in mid-2010, and three Boeing 747-400s the following winter.

BA also said it was postponing by an average of five months delivery of its first six A380s, the first of which is still due to arrive in 2012. Delivery of a second batch of six is being delayed by an average of two years, with the final plane due to arrive in 2016.

BA's planes were 79.6 percent full last month compared with 81.4 percent a year earlier. The steepest falls were in first- and business-class traffic and on routes between London and Asia.

"Market conditions continue to be very challenging with trading at levels well below last year," BA said in a statement. "However, on an underlying basis both premium and non-premium volumes and seat factors have now been stable for more than three months."

The airline is seeking to cut 3,500 jobs and bring in a pay freeze as part of a cost-cutting package. Talks with unions have failed to reach agreement, and more negotiations are planned next week with a government-backed mediator.

British Airways, which employs 40,000 people, is looking to cut 2,000 flight attendants and 1,500 ground workers.

The airline's shares rose 6.5 pence to 125.5 pence Friday on the London Stock Exchange.

Clear airport security fast-lane program shuts down

Clear security system allowed passengers to use different security lines
Clear was operating in 18 airports and served 250,000 passengers
Air Transport Association said the program offered few benefits to travelers
"It's going to cost me time," says one traveler who relied on the Clear program

By Stephanie Chen CNN

(CNN) -- Verified Identity Pass Inc.'s Clear security system -- the program that expedited airport security line waits for paying customers -- ended operation Monday night because the company couldn't reach a consensus with its senior creditors, according to its Web site.

Clear promised to help passengers avoid security lines like this one at San Francisco International Airport.

The New York-based company founded by entrepreneur Stephen Brill targeted business flyers, promising passengers that they would whisk through tedious airport security lanes more rapidly by being placed in private lines.

Verified Identity Pass officials couldn't be reached for comment.

Clear's fast-lane program began at Orlando (Florida) International Airport in 2005. By the time the company shut down, it was operating in more than 18 locations, including major airports in Atlanta, Georgia; Denver, Colorado; San Francisco, California; and Washington. USA Today reported that the company had about 250,000 members.

With nearly 700 million passengers traveling domestically in 2006, Clear company officials touted their program as a way to help avoid bottlenecks and, in some instances, reduce the wait time in security lines to as little as five minutes.

Passengers using the Clear program doled out more than $200 a year. After announcing the shutdown, the company released no information on whether customers would receive refunds.
John Harrington, a freelance photographer in Washington, renewed his Clear membership for the next two years about a month ago. He said he was disappointed to receive an e-mail from Clear officials saying the program had been terminated.

Harrington relied on the quicker lanes when he traveled for assignments out of Reagan National Airport and Washington Dulles International Airport.

"With Clear, I could get into my gate in less than 15 to 20 minutes," said Harrington, who is flying to San Francisco next week and will now have to arrive at the airport an hour earlier. "Try that with regular airport security. It's going to cost me time."

The Clear program required applicants like Harrington to provide information such as a Social Security number and previous address for a background check. The applicant's fingerprints and iris were scanned. The information was placed into a credit-card-size pass and for scanning at an airport Clear booth.

After checking in at the Clear booth, customers were shuttled into a separate line overseen by the Transportation Security Administration. In some airports, Clear members were taken to security lanes reserved for them. In other airports, they used employee security lanes.
Clear members went through the same security procedures; they had to take off their shoes and take out laptops.

Clear arrived at Atlanta's Hartsfield-Jackson International Airport, the busiest airport in the United States, last fall, officials said. At the same time, the airport added 12 security lanes, cutting the average security wait time to 10 minutes, airport spokeswoman Katena Carvajales said.

"Clear shutting down is not impacting our passengers at this airport," Carvajales said, adding that customer service officials are stationed near the Clear booths to instruct members on where to go.

Some critics argued that the Clear lines were no faster than regular security lines.
The Air Transport Association, the industry representing the major U.S. airlines, said the program didn't enhance security. Spokesman David A. Castelveter said airlines already offered frequent travelers and elite members separate lines with no charge.

In 2008, the TSA also began expanding its free Black Diamond Self-Select Lanes program to Logan International Airport in Boston, Massachusetts, Orlando and Spokane (Washington) International Airport.

The program features a series of lanes broken down into categories for expert business travelers who fly frequently, casual travelers who don't fly as often, and skiers or families with strollers who need special assistance.

The program has helped decrease wait times at pilot locations in Denver and Salt Lake City, Utah, according to a TSA statement.

"Clear was a personal decision by travelers," Castelveter said. "If they could afford it, then they could buy it, but it didn't offer anything that wasn't already there."

Seven years ago, Congress approved the creation of a speedier airport clearance system that would make the skies safer after September 11 rattled the travel industry. Government officials wanted to vet passengers and put those with a clean history into a separate, quicker line. But government officials worried that potential terrorists could sneak onto the approved list.

The government program was handed off to private companies, like Verified Identity Pass, that saw the convenience factor as something they could sell.

Delta to cut capacity more than expected as declining revenue overtakes merger benefits
Harry R. Weber, AP Airlines Writer
On Thursday June 11, 2009, 12:29 pm EDT

ATLANTA (AP) -- Delta Air Lines Inc. will shave additional capacity later this year as it warns that more than $6 billion in benefits it expected from lower fuel prices, its merger with Northwest Airlines and previous capacity reductions will be overtaken by declining revenues.

The reduction in available seats could mean further job cuts at the world's largest airline operator.

Delta also said it projects it will take a $125 million to $150 million revenue hit in the second quarter because of the impact on air travel from the swine flu virus. The quarter ends June 30.

Delta executives told employees in a memo Thursday ahead of a presentation at an investor conference in New York that Delta will reduce system capacity by 10 percent this year compared to 2008. That is up from Delta's previous plan to cut system capacity by 6 percent to 8 percent.

Delta also will reduce international capacity 15 percent, up from a previous plan to cut it by 10 percent.

Delta said capacity reductions will begin in September. Some routes will be suspended, while the number of weekly flights to other destinations will be reduced.

"The additional capacity reductions mean we again must reassess staffing needs," Chief Executive Richard Anderson and President Ed Bastian said in the memo. "While the challenges of the current environment preclude us from making guarantees, our goal remains to avoid any involuntary furloughs of frontline employees."

Delta said staff levels will be down more than 8,000 jobs by the end of 2009 compared to spring 2008. It was not immediately clear if that was the total of previously announced cuts involving Delta and Northwest, or if it includes yet to be announced cuts.

Delta, which acquired Northwest in October, has already shed thousands of jobs over the last year in connection with previously announced capacity reductions.

The rise in unemployment and hits Americans have taken to the value of their homes, coupled with the meltdown in the financial markets, has caused a significant slowdown in air travel. Airlines also have lost business from the swine flu, which has caused some people to cancel travel plans to Mexico. The swine flu scare also has hurt Delta sales to customers in Asia, who may be worried following the global outbreak of SARS in 2003, executives said. The overall drop in demand has coincided with a recent increase in fuel prices.

The Delta executives said industry passenger revenues have declined nearly 20 percent in the first four months of the year compared to the same period in 2008. That trend is expected to continue in the near term, they said. Delta said in slides it prepared for Thursday's investor conference, which it filed with the Securities and Exchange Commission, that the airline has seen a significant reduction in demand for premium class seats. Corporate travel also is down significantly.

"On top of this, cost pressures from rising jet fuel prices up more than 20 percent since the start of the year -- coupled with softer travel demand due to the spread of the H1N1 virus, have created a difficult business environment," the executives said in their memo to employees.

At Thursday's Bank of America-Merrill Lynch Global Transportation Conference, Bastian said that if fuel prices continue to climb into the fall, airlines will be under pressure to raise prices or cut more capacity to cover their costs. He said Delta has made a decision not to "put seats out into the marketplace if we can't recover the cost of that seat."

Delta now expects to end the second quarter with $5.3 billion in total liquidity, compared to its previous projection of $5.6 billion.

Delta said its fall capacity reductions will target routes that have experienced losses in the current economic climate and with higher fuel prices.

Among the reductions, Delta will:
--suspend nonstop service from Atlanta to Seoul and Shanghai and instead route customers for those flights over Detroit or Tokyo, or on nonstop partner flights.
--suspend nonstop flights from Cincinnati to Frankfurt, Germany, and London-Gatwick.
--reduce weekly frequencies connecting Atlanta and Detroit to Mexico City and postpone some previously planned seasonal service between non-hub cities and Mexican beach destinations due to the impact of the swine flue virus on customers' travel plans.
Delta said it is still adding more than 20 new markets to its international network in 2009.

A330 airlines distance themselves from sensors
Airlines seek distance from speed sensors suspected in crash, others say working on retrofits
Adam Schreck, AP Business Writer
On Tuesday June 9, 2009, 1:45 pm EDT

DUBAI, United Arab Emirates (AP) -- Several airlines flying the type of plane involved in the Air France crash said Tuesday they use a different brand of airspeed sensor than those aboard the doomed flight, distancing themselves from instruments seen as a possible factor in last week's accident.

At the same time, other carriers that use probes similar to those on the flight -- including Delta Air Lines Inc. and the Middle East's Qatar Airways -- said they are working to upgrade the devices on dozens of Airbus planes.

The plane disappeared over the Atlantic Ocean while on a flight from Rio de Janeiro to Paris, killing 228 people on board.

Focus on the sensors known as Pitot tubes intensified after Air France issued a statement last week saying it was in the process of replacing the instruments on the Airbus A330 model.

The cause of Air France Flight 447's crash on May 31 remains unclear. But one theory is that the sensors became iced over and gave incorrect readings. That could have caused the plane to fly either too slow or too fast.

The sensors aboard the plane were made by France's Thales Group and had not yet been replaced. Thales spokeswoman Caroline Philips confirmed the company made the Pitot tubes on the jet that crashed. The defense and aerospace manufacturer did not provide details on the devices or say how many other planes use them.

Emirates, the Middle East's largest airline and one of the biggest A330 operators, said the Pitot tubes aboard its planes were made not by Thales but by U.S. manufacturer Goodrich Corp. of Charlotte, North Carolina.

"We have not experienced any issues with our probe units," said Adel al-Redha, Emirates executive vice president for engineering and operations. "Emirates is in full compliance with all standard operating procedure recommendations issued by aircraft manufacturers, as well as with requirements stipulated by international air safety and regulatory authorities."

The Dubai-based carrier operates 29 of the A330-200 variant, more than any other airline. The model is the same used on Air France Flight 447.

Abu Dhabi's Etihad Airways and Australia's Qantas Airways said their A330s are also equipped with Goodrich speed sensors.

"We are not concerned because it's a different system in our aircraft," Qantas General Manager for Government and Corporate Affairs David Epstein said.

A Goodrich spokeswoman could not be immediately reached for comment.
Pitot tubes and accompanying sensors feed crucial airspeed data and other information into cockpit computer systems. The sensors work in the same basic way, but may be designed differently depending on the plane type and manufacturer.

"It's like (aircraft) brakes. Some people use carbon, some people use steel," said independent airline consultant Bob Mann.

Concerns over the Thales sensors led an Air France union Monday to urge its pilots not to fly Airbus A330s and A340s unless at least two of the three Pitot sensors had been replaced. The Alter union represents about 12 percent of Air France pilots.

In a reflection of the growing concern surrounding the instruments, Qatar Airways posted a statement on its Web site Tuesday saying it is completing an "Airbus-approved modification" of Thales probes on all of its Airbus A319, A320, A321, A330 and A340 aircraft. The over 50 planes account form the bulk of the carrier's fleet.

Qatar Airways said the retrofit began last year, with 21 planes modified so far.
Atlanta-based Delta is currently installing new Pitot tubes from Thales on its A330 aircraft per the manufacturer's recommendation, spokeswoman Betsy Talton said.

"Until these installations are complete, we are communicating with our flight crews to reiterate the correct procedures to be used in the event of unreliable airspeed indications," Talton said.
Delta subsidiary Northwest Airlines also has installed new Pitot tubes on its A319/320 aircraft, Talton said.

Delta, the world's largest airline operator, owns 11 A330-200s and 21 A330-300s. It owns or leases 57 A319-100s and 69 A320-200s.

Tempe, Arizona-based US Airways, the other major U.S. A330 operator, has begun replacing the Pitot tube component on its A330s out of an abundance of caution, spokeswoman Michelle Mohr said, though she declined to identify the manufacturer. Nine of the carrier's 11 A330s are in regular service.

In Brazil, the private Agencia Estado news agency said the country's largest airline, TAM Linhas Aeras SA, has already replaced the Pitot tubes on its Airbus jets. TAM made the replacements after a 2007 recommendation from Airbus, Chief Executive David Barboni told Agencia Estado.
Brazil's air force, meanwhile, said that technicians would replace the Pitot tubes on an Airbus A319 used by President Luiz Inacio Lula da Silva because of a recommendation from the jet's manufacturer more than a month before the Air France crash.

Air force Col. Henry Munhoz said the tubes will be replaced during regular maintenance now under way, but insisted the work was not being performed because of the crash.

About 70 airlines operate versions of the 600 twin-engined A330s in use around the world.

Associated Press Writers Greg Keller in Paris, Eileen Ng in Kuala Lumpur, Malaysia, Alan Clendenning in Sao Paulo and Harry R. Weber in Atlanta contributed to this report.

Airlines: Coach Class Becomes Cattle Class
Scott Reeves Jun 05, 2009 2:40 pm
Passengers given less space than average pig on the way to Baconland.

Suck in your hips, travelers, because some airlines are squeezing more seats into existing planes in an effort to boost revenue. But wedging your bovine butt into a smaller space on the redeye may be offset by another marketing trend: The size of many food products, such as candy bars, continue to shrink as the price rises. This may cause some to gobble fewer calories and, with luck, to leave their clothes untorn when squeezing into an airline seat in cattle class. American Airlines (AMR) recently added 12 seats to its new jets, the Wall Street Journal reports.

Some airlines have removed galleys to install extra seats. This may mean that semi-putrid airline meals can no longer be microwaved; only a sociologist could crack the profound implications of that tactic. Here’s a guess: Cold airline food won’t taste any worse than warm airline food.

In fact, no taste probably beats any taste. In some instances, airlines have moved the rows of seats closer together to increase capacity. This means you’re in greater danger of being knee-capped if the 300-pound lummox in front of you suddenly reclines - assuming you’re not already sitting with your knees under your chin. Other airlines are installing slimmer seats.

The irony: many discount carriers now offer more space than some legacy airlines. JetBlue (JBLU) offers a whopping 34 inches of space in each row, including the seat, while Southwest (LUV) typically offers 32 to 33 inches in its Boeing 737s. It appears that United (UAUA), Delta (DAL) and Continental (CAL) are slimming down to 31 inches in domestic coach. Note: The American Meat Institute requires that every hog on its way to Bacon-land get at least 6 square feet of space. A 150-pound sheep must be given 5 square feet.

Your average interstate commuter? 31 inches is more than enough, says the FAA.Conspiracy buffs will say the great seat squeeze is part of an effort to encourage coach passengers to upgrade and get more space while dropping more moola in the airlines’ grubby mitts. This seems an odd bet in a downbeat economy, even for grassy knoll habitués.

Smaller seats for broader bottoms plays out against the proliferation of extra fees for checked bags, seat location, flight changes, blanket, pillow - you name it. If airlines keep nickel and dime-ing their customers -- well, $10 and $15-ing -- more people may decide to stay home. The upside: That would mean lot of folks will have more bucks to spend on those tiny little candy bars.

Air France jet likely broke apart above ocean
AP
By FEDERICO ESCHER and BRADLEY BROOKS, Associated Press Writers Federico Escher And Bradley Brooks, Associated Press Writers – 24 mins ago

FERNANDO DE NORONHA, Brazil – Military planes located new debris from Air France Flight 447 Wednesday while investigators focused on a nightmarish ordeal in which the jetliner broke up over the Atlantic as it flew through a violent storm.

Heavy weather delayed until next week the arrival of deep-water submersibles considered key to finding the black box voice and data recorders that will help answer the question of what happened to the airliner, which disappeared Sunday with 228 people on board. But even with the equipment, the lead French investigator questioned whether the recorders would ever be found in such a deep and rugged part of the ocean.

As the first Brazilian military ships neared the search area, investigators were relying heavily on the plane's automated messages to help reconstruct what happened to the jet as it flew through towering thunderstorms. They detail a series of failures that end with its systems shutting down, suggesting the plane broke apart in the sky, according to an aviation industry official with knowledge of the investigation, who spoke on condition of anonymity because he was not authorized to discuss the crash.

The pilot sent a manual signal at 11 p.m. local time saying he was flying through an area of "CBs" — black, electrically charged cumulonimbus clouds that come with violent winds and lightning. Satellite data has shown that towering thunderheads were sending 100 mph (160 kph) updraft winds into the jet's flight path at the time.

Ten minutes later, a cascade of problems began: Automatic messages indicate the autopilot had disengaged, a key computer system switched to alternative power, and controls needed to keep the plane stable had been damaged. An alarm sounded indicating the deterioration of flight systems.

Three minutes after that, more automatic messages reported the failure of systems to monitor air speed, altitude and direction. Control of the main flight computer and wing spoilers failed as well.

The last automatic message, at 11:14 p.m., signaled loss of cabin pressure and complete electrical failure — catastrophic events in a plane that was likely already plunging toward the ocean.
"This clearly looks like the story of the airplane coming apart," the airline industry official told The Associated Press. "We just don't know why it did, but that is what the investigation will show."

French and Brazilian officials had already announced some of these details, but the more complete chronology was published Wednesday by Brazil's O Estado de S. Paulo newspaper, citing an unidentified Air France source, and confirmed to the AP by the aviation industry source.

Air France spokesman Nicolas Petteau referred questions about the messages to the French accident investigation agency, BEA, whose spokesman Martine Del Bono said the agency won't comment. Brazil's Defense Minister Nelson Jobim also declined to comment, saying that the accident "investigation is being done by France; Brazil's only responsibility is to find and pick up the pieces."

Other experts agreed that the automatic reports of system failures on the plane strongly suggest it broke up in the air, perhaps due to fierce thunderstorms, turbulence, lightning or a catastrophic combination of events.

"These are telling us the story of the crash. They are not explaining what happened to cause the crash," said Bill Voss, president and CEO of the Flight Safety Foundation in Alexandria, Va. "This is the documentation of the seconds when control was lost and the aircraft started to break up in air."

Voss stressed that the messages alone were not enough to understand why the Air France jet went down, noting that the black boxes will have far more information to help determine the cause.

One fear — terrorism — was dismissed Wednesday by all three countries involved in the search and recovery effort. France's defense minister and the Pentagon said there were no signs that terrorism was involved, and Jobim said "that possibility hasn't even been considered."

A U.S. Navy P-3C Orion surveillance plane, a French AWACS radar plane and two other French military planes joined Brazil's Air Force in trying to spot debris and narrow the search zone.
Brazil's Defense Minister Nelson Jobim said debris discovered so far was spread over a wide area, with some 230 kilometers (140 miles) separating pieces of wreckage they have spotted.

The floating debris includes a 23-foot (seven-meter) chunk of plane and a 12-mile-long (20-kilometer-long) oil slick, but pilots have spotted no signs of survivors, Air Force spokesman Col. Jorge Amaral said.

"Oil stains on the water might exclude the possibility of an explosion, because there was no fire," Defense Minister Nelson Jobim told reporters Wednesday.

The new debris was discovered about 55 miles (90 kilometers) south of where searchers a day earlier found an airplane seat, a fuel slick, an orange life vest and pieces of white debris. The original debris was found roughly 400 miles (640 kilometers) northeast of the Fernando de Noronha islands off Brazil's northern coast, an area where the ocean floor drops as low as 22,950 feet (7,000 meters) below sea level.

Brazil lacks the equipment needed to reach the ocean floor. If the black boxes are at the bottom of the sea, their recovery will have to wait for the arrival early next week of a French research ship with remotely controlled submersibles that can explore as deeply as 19,600 feet (6,000 meters).

The sturdy black boxes — voice and data recorders — are built to give off signals for at least 30 days, even underwater, and could keep their contents indefinitely.

But the head of France's accident investigation agency, Paul-Louis Arslanian, said in Paris that he is "not optimistic" about recovering the recorders — and that investigators should be prepared to continue the probe without them.

"It is not only deep, it is also mountainous," he said. "We might find ourselves blocked at some point by the lack of material elements."

Arslanian said investigators didn't have enough information to determine whether the plane broke up in the air or upon impact with the sea, and that in the absence of black box data, they are studying maintenance and other records.

"For the moment, there is no sign that would lead us to believe that the aircraft had a problem before it took off," Arslanian said.

He said investigators did not know the exact time of the accident or whether the chief pilot was at the controls when the plane went down. Pilots on long-haul flights often take turns at the controls to remain alert.

If no survivors are found, it would be the deadliest crash in Air France's history, and the world's worst civil aviation disaster since the November 2001 crash of an American Airlines jetliner in the New York City borough of Queens that killed 265 people.
___
Bradley Brooks wrote from Rio de Janeiro. Associated Press writers Alan Clendenning in Sao Paulo; Marco Sibaja in Brasilia; Slobodan Lekic in Brussels, Belgium; Shawn Pogatchnik in Dublin; Emma Vandore in Bourget, France; and Angela Charlton in Paris also contributed to this report.

Updated: 4:42 p.m. May 28, 2009
Delta, pilots agree on severance deal
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Thursday, May 28, 2009

The pilots union at Delta Air Lines has agreed to a program offering incentives for pilot retirements to help the company cut pilot staffing.

Delta management had proposed the retirement incentive program to the Air Line Pilots Association at Delta to address “what management perceives to be a pilot staffing overage,” according to the union.

The union’s leadership voted Wednesday to approve the retirement incentive program. It will be offered from June 1 until July 15 to active pilots with at least 10 years of service and whose years of service and age total at least 55.

Pilots with less than 20 years of service will get six months of severance pay, while pilots with 20 years of service or more will get nine months of severance pay. The program also includes certain coverage of COBRA or retiree health care, as well as retiree travel benefits.
Delta pilots were not eligible to participate in the company’s buyouts this year and last year, which Delta used to cut about 6,500 employees.

The airline said in a written statement that it “continues to take every step possible to avoid involuntary reductions of front-line employees as a result of current economic conditions.”
Delta has about 12,000 pilots, including pilots from Delta and merger partner Northwest. Delta closed its deal to acquire Northwest in October.

US Airways pilots' seniority fight goes to jury
Dawn Gilbertson - May. 13, 2009 12:00 AM
The Arizona Republic

The bitter seniority dispute pitting some US Airways pilots against their new union is now in the hands of a federal jury.Jurors began deliberating late Tuesday after a day of closing arguments in the two-week trial in U.S. District Court in Phoenix.

The trial featured detailed background on how the dispute developed after the America West-US Airways merger in 2005 and the intricacies of union merger policies and politics. The case even offered a little star power in the testimony of the pilot and co-pilot of the US Airways plane that landed in the Hudson River in January.

At issue for the jury to decide: whether the year-old US Airline Pilots Association (USAPA) has been fairly representing all 5,000-plus pilots of the new US Airways.A group of six former America West pilots, representing their 1,800 co-workers, filed the lawsuit last year, alleging that the new union is ignoring their interests by pushing for date-of-hire seniority instead of a seniority system issued by an arbitrator two years ago.

The union says it is being fair to all because it has proposed several job protections for America West pilots in its new seniority proposal, some that go beyond those on the arbitrated list. America West pilots have packed the courtroom every day during the trial, some accompanied by spouses.Seniority is critical to pilots because it determines their pay, promotions, work schedules.

A big theme in the America West pilots' case is that the arbitrator's decision was final and binding and that pilots from both America West and US Airways and their then union, the Air Line Pilots Association, knew that from the start.

They say the new union was formed to try to get around the decision because pilots of the former US Airways didn't like the outcome. They generally fare better on a date-of-hire system because US Airways has been around so much longer than America West.

"No one said, "I'm willing to sign up for these rules but only if it goes my way," pilots' attorney Marty Harper said in his closing arguments.Harper used a gambling analogy, noting that you never hear the losers in a poker game say they were all in only if they won."That's sort of what's happening here," he told jurors.Harper took a swipe at the testimony, for the defense, of Capt. Chesley Sullenberger from US Airways Flight 1549.

Sullenberger told a story on the stand about how his daughter asked in grade school about the meaning of integrity, and he replied that it's doing the right thing if it's not convenient.Harper suggested that that's what the pilots of the former US Airways aren't doing by ignoring the arbitrated list."You can go back on your word under (a) certain set of circumstances," he said.Lee Seham, the union attorney who delivered its closing arguments, said the former US Airways pilots thought the arbitrated seniority list was "terribly, terribly unfair."

They didn't like the fact that many America West pilots were ranked ahead of US Airways pilots with much more seniority and that US Airways pilots out of work at the time of the merger were put at the bottom of the list.

There was such a strong sentiment against the arbitrator's decision that US Airways pilots would never ratify a contract that included that seniority list, Seham told jurors. The old union tried to get the two sides together to work out their differences, he said, with the added encouragement of US Airways executives, but the America West side wouldn't budge, he said.

"It takes two to tango," he said, suggesting that it could be argued that it was the America West pilots that were acting in bad faith.Seham said USAPA was acting in good faith because it was formed to resolve the impasse over seniority and get a long-awaited joint contract for all pilots of the new US Airways.

The two sides are still operating separately, under different pay rates and can't fly each other's planes. He said the pilots did not need USAPA to get rid of the arbitrated list because the old union was effectively doing that with its policies. Harper said the union has tried to downplay the sole reason it was formed - to get around the arbitrator's seniority list - because attorneys they consulted early on said it could land them in legal trouble.

He noted that an e-mail union officials brought up to show that they were balancing the interests of both pilot groups with the protections for America West pilots was sent after the lawsuit was filed. There are nine members on the jury, and their verdict must be unanimous.

Southwest Airlines sells 3 planes for $104 million, then leases them back
Thursday May 21, 2009, 3:25 pm EDT

DALLAS (AP) -- Southwest Airlines Co., trying to pad its cash balance amid a downturn in travel, said Thursday it sold three planes for $104 million and leased them back.
It was the second such transaction in just over a month at Dallas-based Southwest, bringing to six the number of planes it has sold.

Southwest said in a filing with the Securities and Exchange Commission that on Tuesday it closed a sale-leaseback deal with a third party aircraft lessor involving three Boeing 737-700 jets. It immediately leased the planes back for 16 years.

Southwest said it will make monthly payments of about $4.4 million for the first six months of the leases. It didn't identify the lessor in the transaction.

The low-fare airline had a string of profitable quarters from 1991 until last year, the longest streak in the U.S. airline industry. But it has lost money the last three quarters, with falling traffic hurting its results so far in 2009.

Airlines have had a difficult time borrowing money to finance aircraft purchases and other purposes. The chief executive of American Airlines parent AMR Corp. said, however, that the credit squeeze seems to be easing.

Southwest shares fell 18 cents, or 2.6 percent, to $6.75 in afternoon trading.

May 11, 2009, 9:32 AM ET
Captain’s Training Faulted In Buffalo Crash That Killed 50

By WSJ Staff
The captain of a commuter plane that crashed Feb. 12 near Buffalo, N.Y., had flunked numerous flight tests during his career and was never adequately taught how to respond to the emergency that led to the airplane’s fatal descent, according to people close to the investigation, The Wall Street Journal reports.

Reporter Andy Pasztor writes:
All 49 people aboard were killed, as well as one person in a house below, when the plane crashed just a few miles short of the Buffalo airport en route from Newark, N.J. The Bombardier Q400 turboprop in the crash, which will be the subject of a National Transportation Safety Board hearing Tuesday, was operated by commuter carrier Colgan Air Inc., a division of Pinnacle Airlines Corp.

Capt. Marvin Renslow had never been properly trained by the company to respond to a warning system designed to prevent the plane from going into a stall, according to people familiar with the investigation. As the speed slowed to a dangerous level, setting off the stall-prevention system, he did the opposite of the proper procedure, which led to the crash, these people said.
Additionally, his 24-year-old co-pilot, Rebecca Shaw, had complained before takeoff about being congested and said she probably should have called in sick, according to people who have listened to the cockpit voice recording.

The circumstances surrounding Continental Connection Flight 3407 have prompted investigators and regulators to examine Colgan’s hiring and training practices. At the NTSB hearing, witnesses are expected to provide new allegations about training shortcomings, as well as the prevalence of chronic pilot fatigue and lapses in cockpit discipline. The NTSB also is expected to be critical of the Federal Aviation Administration’s oversight of the airline. The FAA, which has said it is investigating the airline over pilot scheduling, declined to comment on issues likely to be raised the hearing.

Pinnacle has said its pilot training programs “meet or exceed regulatory requirements for all major airlines” and crews “are prepared to handle emergency situations they might face.” On Sunday, spokesman Joe Williams confirmed in an email that Capt. Renslow had five “unsatisfactory” training check rides in his career — including two at Colgan — but passed a subsequent series of training tests and was “fully qualified in the Q400″ aircraft.

In recent weeks, Colgan’s top two training officials resigned; Mr. Williams has said their decisions were voluntary and not connected to the accident. Darrell Mitchell, Colgan’s departing director of training, is slated to testify at Tuesday’s hearing.

At the start of Tuesday’s hearing, the NTSB will open its public docket on the Colgan accident. Readers will be able to download the file, which includes reports, interview transcripts, cockpit voice recorder transcripts, flight data recorder information and other documents, once the hearing gets underway.

An agenda for the three-day hearing is available here.

Airlines bank on fees in down times
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, May 10, 2009

The onslaught of more airline fees on everything from checked bags to seat assignments is helping airlines bring in more cash, but for travelers it can mean muddled comparison shopping when seeking the lowest cost for a flight.

Add-on fees have become an effective way for airlines to boost revenue at a time when recession-weakened travel demand compels them to drop fares.

Atlanta-based Delta Air Lines in July starts charging passengers on international flights a $50 fee each way for checking a second bag. Other airlines are studying the move but have not yet matched. That means travelers who check two bags may find a lower fare on Delta compared with other carriers, but their cost for traveling could end up higher.

Various airlines have baggage charges that can add up fast. Pack a third bag on an international flight and Delta will tack on another $200 fee each way, for example. Overweight bags on a Delta international flight would each cost at least $300 extra round trip and oversized bags would each cost $350 extra round trip.

Even on domestic flights, “your $78 airplane ticket can be $600 or $700 in a New York minute just because you didn’t pay attention” to fees for extra, overweight and oversized bags, said Tom Parsons, founder of Bestfares.com.

The fees enable airlines to win bookings from customers using travel Web sites to compare prices and choose the lowest fare, then collect more revenue when travelers arrive at the airport with extra bags or seek other services.

Bill Swelbar, a researcher at the International Center for Air Transportation at the Massachusetts Institute of Technology, said airlines have had to look for other revenue sources because fares alone don’t cover the cost of travel.

“The airline seat is a commodity product,” Swelbar said. Airlines believe they must offer the lowest fares “because so many decisions on travel are based on price and price alone.”
AirTran Airways chief financial officer Arne Haak has said travelers will spend hours searching for fares online to save $8, then “come to the airport and spend $20 to buy a soda, a bag of chips, a candy bar and a magazine that they could have bought for half the price.”

Parsons said “John Q. Traveler” seems much more concerned about finding the lowest base fare. “All the other incidentals they don’t seem to be upset with,” he said.

While most airlines already charge for checked bags on domestic flights, baggage rules have been more liberal for international travel, where longer trips may require more bags and fares often are already much higher.

“Now they’re telling you you’ve also got to pay for bags,” Parsons said. “I remember when they used to give you bags. Where’s my old PanAm bag?”

Delta, which reported a $794 million loss for the first quarter, said it took in more than $160 million from baggage fees in the quarter. It expects the new international second checked bag fee to generate about $100 million annually.

Chicago-based United Airlines said it takes in about $14 in ancillary revenues and fees per passenger.

One carrier —- Southwest Airlines, which does not fly to Atlanta —- has held back on charging many of the extra fees, and it promotes the difference.

But other discount airlines, including Spirit and Allegiant, have gone further than the big carriers, including a fee for bookings made online and charges for non-alcoholic beverages.

And US Airways is adding a fee on top of a fee. On July 9, the carrier plans to begin charging $5 for paying checked bag fees at the airport instead of online. US Airways also charges for international checked bags to and from Canada, Latin America and the Caribbean, but not to and from Europe and Asia.

A consumer’s only defense at this point is careful research and adjusting plans to avoid fees.
Technology is in the works to make it easier for travelers to compare prices. The technology is being developed for reservations systems that airlines and travel agencies use to sell airline tickets.

Some travel Web sites also offer fee comparisons. TripAdvisor in February launched a flight search engine with a fees estimator that asks travelers how many bags they will check, whether they have elite frequent flier status —- which can affect which fees apply —- and if they will want food, drinks or entertainment in flight.

Other travel sites, including Orbitz, Expedia and Travelocity, offer charts that compare different airlines’ fees. Another site, flyingfees.com, compares airline fees.

According to a TripAdvisor survey, 36 percent of respondents said they have been surprised by the cost of checked baggage fees at the airport.

“I thought there would be more backlash from the traveling public over the payment of fees than there has been,” Swelbar said.

American Airlines global alliance soon to be OK'd?
12:00 AM CDT on Saturday, May 9, 2009
By DAVE MICHAELS / The Dallas Morning News dmichaels@dallasnews.com

WASHINGTON – The U.S. Department of Transportation looks poised to approve antitrust immunity for American Airlines' alliance with British Airways, Iberia and other carriers.

"These alliances are life savers for airlines," Transportation Secretary Ray LaHood said Friday. "That is the premise from which we start. We believe it. The airlines believe it. And so we are going to continue to pursue those kinds of opportunities where we have them."
Two other global alliances have antitrust immunity, allowing them to cooperate on schedules, fares and cargo prices.

House Democrats are much more skeptical than LaHood of airline alliances, saying they are anti-competitive and drive up prices for international routes. Minnesota Rep. Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, has said immunized alliances amount to a "de facto merger" of airlines.

American says alliances have resulted in more trans-Atlantic service and better frequent-flier benefits for travelers.

Legislation to fund the Federal Aviation Administration passed Oberstar's committee in March and included a provision that would retire existing antitrust exemptions after three years. It also would direct government auditors to study whether such alliances have hurt competition and whether applications should be subject to a merger analysis by the Department of Justice.
However, LaHood on Friday supported the idea that alliances are needed to achieve efficiencies in today's market. Last month, his department proposed to grant antitrust immunity to Continental Airlines for its participation in the Star Alliance, which includes United Airlines, Air Canada and Lufthansa Airlines.

"When I called the chairmen of United and Continental and told them our department was going to move ahead with their alliance, you know what they said?" La Hood said. " 'This is a life saver for us.' "

Parties interested in the Oneworld application have until May 18 to submit comments about it. American and British Airways have until May 28 to respond. The department would make a preliminary ruling after that and has until Oct. 31 to issue a final ruling.

The European Union recently began investigating the Oneworld and Star alliances for possible violations of antitrust rules.

May 6, 2009, 10:47 AM ET
Artist Allegedly Swigged Hand Soap, Tried to Bite United Flight Attendant
By Matt Phillips
Wow. It’s been a while since a tale of poor passenger behavior grabbed our attention as much as this one.

The Chicago Tribune’s Julie Johnsson reports:
United Airlines diverted a recent flight bound for London after an incoherent and disruptive passenger, apparently woozy from a combination of pills, alcohol and lavatory hand soap, allegedly tried to bite a flight attendant in the leg.

Galina Rusanova, a British citizen, was charged with interference with a flight crew and assault for allegedly disrupting United Flight 934 from Los Angeles to London Heathrow Airport on April 29, forcing the plane to land in Maine.

She could face up to 20 years in prison and a $250,000 fine.

In a Monday hearing in U.S. District Court in Bangor, Maine, Rusanova agreed to be detained pending trial.

Rusanova is described by the British press as a Russian-born artist, actress and author who rubs elbows with the rich and famous. She was returning home to the United Kingdom after traveling to California to visit a man she had met over the Internet, according to court documents.

“What wasn’t disclosed through the affidavit is that Ms. Rusanova is a very intelligent, charming woman,” said her attorney, Matthew Erickson. “This comes as a shock to her.”
Erickson added: “Her mistake was to mix prescription drugs with alcohol. After that, all bets were off.”

Of course the detail of this episode that really stands out is the hand soap. According to court documents filed May 1, a flight attendant approached Rusanova after passengers said the artist was being disruptive, “at which time she observed her drink a bottle of liquid soap that she had apparently removed from the bathroom.”

An affidavit also cites a written statement from a flight crew member “in which she reports that at one point while Rusanova was in the galley, she fell to the ground and began ’snapping like a dog’ and trying to bite flight crew member Donoho’s leg.”

Johnsson reports that while Rusanova could face a long stint in jail, guidelines for sentencing in cases like hers suggest jail terms ranging from time served to about six months, according to the artist’s lawyer.

Airlines: Where Capital Goes to Die
The big U.S. carriers have a broken business model and little relief in sight. Some long held assumptions about the industry could soon be upended
By Justin Bachman

As U.S. banks grapple with federal "stress tests" on their balance sheets, a similar process is playing out in the airline industry. Mix a deep recession with tight credit and fear of an influenza pandemic, and there's plenty of stress on airline balance sheets this spring. That has carriers conserving every last penny and hoping the summer travel months provide a sufficient cushion to last through to an economic recovery.

But what if the summer is not bountiful, or the global recession turns nastier? What if another health or terror scare further depresses flying? For most of their history airlines have been growth enterprises, with heavy capital needs but plenty of people willing to invest. That was then, however; today a share of most airline stocks costs less than a six-pack of microbrew.

Those shares serve as little more than a proxy for the price of crude oil—a trading stock that can turn a quick profit. Legacy airline debt yields a 20% or better return, but only because the risk is so high. The current times are sapping cash; maintaining liquidity has become a central job for airlines. "We have in this business been able to fund long-term losses with outside capital … and that is going to be harder to do in the future," US Airways (LCC) CEO Doug Parker said on May 4, citing "fundamental" changes for airlines' financial partners such as banks, aircraft makers, lessors, and other suppliers.

All Eyes on the Baby Boomers
So where will operating capital come from? It's a crucial question for airlines. If demand doesn't return to the same degree as in past recoveries—indeed, if in coming years aging baby boomers wracked by stock losses and shaky home prices fundamentally change their spending habits and don't travel as much as predicted—revenues could be severely crimped. That might combine with two rising expenses: higher payments to underfunded pension plans that cover older airline workers, and more capital to update aging jet fleets.

Yet as the recent experience of troubled American banks and car companies has shown, once far-fetched scenarios can quickly morph into solutions for vital yet ailing industries. U.S. taxpayers have been summoned repeatedly for aid, as have investors abroad. Uncle Sam has also offered enticing terms to spur certain investments—similar incentives could be devised for the airline industry. And for practical purposes, the Obama Administration has been managing General Motors (GM), Chrysler, and American International Group (AIG). Why not an airline or two?

If airlines are eventually forced into bankruptcy, pensions may be jettisoned, as US Airways, Delta (DAL), and United (UAUA) have all done in Chapter 11. But federal officials could require more funds from companies that wish to do so. As for aircraft, the U.S. lags Europe and Asia in terms of commercial fleet age because cash-strapped U.S. airlines have bought very few of the latest models (zero of the jumbo Airbus A380s, for example). Airbus and Boeing (BA) are themselves scrambling to keep business and tend to offer large customers attractive financing and other breaks, but that would hardly cover the needs of an industrywide order for 1,000 or more new planes.

Consolidation Among the Big Five?
"Looking ahead, with credit tight, where will capital—affordable capital—be found unless it is from another participant in the same industry?" Bill Swelbar, a research engineer with MIT's International Center for Air Transportation and a Hawaiian Airlines (HA) director, wrote recently on his blog. "If companies are struggling to realize any return on invested capital today, then what happens as interest rates continue to increase in lockstep with capital scarcity?"

As Swelbar suggests, the logical answer would be consolidation among the five big carriers. A new round of bankruptcies might even see one or more of a large airline's best bits sold off to a rival, or outright liquidations—steps that were largely avoided during the reorganizations that followed the 2001 terrorist attacks. Even after the capacity cutbacks spurred by crude oil's spike in the summer of 2008, many observers say far more—25% to 35% of the current capacity—must be removed before any meaningful profit-margin improvements will be realized.

"There are too many airlines," says Vicki Bryan, a senior bond analyst with Gimme Credit in New York. "Even last year when they were all just getting killed, slaughtered, massacred on fuel … the net reduction in capacity was just not significant."

Ownership Issues Coming to a Head
But airline consolidation remains a minefield that encroaches on union and political interests. Ditto for another potential source of capital, healthier European and Asian carriers. U.S. law restricts foreign airline ownership in U.S. carriers to a minority stake, but the International Air Transport Assn. and big European airlines have made that issue a central part of the debate over further liberalization in U.S.-European air links, with the matter coming to a head in 2010 when a second phase of the "Open Skies" treaty is set to be negotiated.

"From California to the eastern banks of Europe, this should be one market, and we should treat it as one market," Lufthansa (LHAG.DE) CEO Wolfgang Mayrhuber said Apr. 29 in a speech to the U.S. Chamber of Commerce in Washington. Lufthansa has been on the forefront of consolidation in Europe, taking controlling ownership since 2005 in various carriers: SWISS, Austrian, Belgian, and bmi, and a 19% stake in JetBlue (JBLU).

The long argument against foreign control of U.S. carriers, dating from the 1940s, has been based on national security and the government's ability to gain access to the civilian fleet in emergencies. Others worry that European or Asian operators would slash jobs and decline to serve small, less profitable U.S. cities. But nationalistic arguments may hold diminishing sway at a time when an Italian industrial group, Fiat (FIA.MI), is negotiating to acquire one of Detroit's iconic Big Three automakers, and the largest U.S. bank—Citigroup (C)—has sold a nearly 9% stake to investors in Abu Dhabi and Saudi Arabia.

Going Private Not Likely
One other option that might apply in other industries—going private—is unlikely to come to airlines. Jesup & Lamont analyst Helane Becker raised the question with United's management during a recent earnings call: With their public equity virtually worthless, why don't airlines seek funds from public debt? But to go private, airline executives would have to borrow heavily to buy their shares—and even if they did so, they'd be spending those funds on a severely distressed asset.

That's not a scenario lenders would care to see. As for an outside takeover, private equity firms have lost the financial firepower they deployed in 2006 and 2007 as the worldwide credit markets seized. And even if they had escaped the market collapse unscathed, an airline would be among the least favorable places to invest. Moreover, the legacy carriers already have substantial leverage on the books, leaving a takeover artist no space to add debt. "It becomes an opportunity cost, too," says Ben Baldanza, chief executive of privately held Spirit Airlines. "If you got a billion dollars are you going to go buy an airline?"

For cash-strapped airlines, the looming crisis could produce relief in many forms: a new European owner, a government-overseen industry consolidation that forces travelers to pay more, or the sort of terms that may make a large investment fund scramble for its checkbook. As recent history demonstrates, old problems in this environment have a way of attracting new solutions.

Bachman is deputy news director for BusinessWeek.com.

Will Southwest Lose Some of the LUV?
By WSJ Staff
Journal reporter Mike Esterl writes:Those famously cheerful smiles aboard Southwest Airlines could become a little more strained in the coming months.

The giant discount carrier has long had a feel-good vibe on board and at the check-in counter, partly because the company has never had layoffs in its 38-year history. Or any bankruptcy filings, which have caused other airlines to slash employee wages and benefits.

Southwest struck pay-hike deals with unions in recent weeks with a minimum of fuss. Contrast that with American Airlines, currently mired in protracted and poisoned negotiations with most of its workers.

But Southwest management is finding it tougher to be generous now that it has posted three straight quarterly net losses. On Thursday the airline said it plans to reduce staffing and will offer voluntary buy-outs, available to almost all of its 35,500 employees. It’s the third such offer in the past five years; a bit more than 1,600 took buyouts in 2004 and 2007.

CEO Gary Kelly, known for dressing up in funny outfits to keep spirits up at Southwest’s Love Field headquarters, says management hasn’t set a firm number for workers it must shed. Offer terms have not been made public and will reach employees in early May. But it’s quite possible a lot of them won’t be willing to walk in the midst of a prolonged recession.

That could force some tough decisions. Southwest management has long held that treating employees well means they’ll treat customers well and business will do well as a result, making shareholders happy.

Mr. Kelly says layoffs remain a last resort, but he also acknowledged in a conference call Thursday that all options are on the table during a dramatic downturn in travel.

Mr. Kelly said he could envision a scenario of forced layoffs if the company has to cut its fleet size by around 10%. Southwest isn’t there yet. But it has put fleet expansion plans on indefinite hold. That’s in contrast to previous industry downturns, when Southwest used the opportunity to aggressively gain market share. He also said if conditions continue to deteriorate, he could at some point ask workers for pay concessions.

Southwest’s overall cost structure remains low, thanks in part to the simplicity of its business model. But its labor costs — adjusted for capacity — were second only to American among 13 big carriers last September, according to the federal Bureau of Transportation. In the first quarter of this year, its workforce grew 2.1% and its labor costs rose 4.5% over the same period in 2008, even as capacity shrank 4.1% and revenue fell 6.8%.

Those kinds of numbers don’t usually put smiles on the face of shareholders or employees.

American Invests in Its Future With First Deliveries of New Boeing 737-800s
Despite Challenges, American Continues to Invest for the Long-Term With Fuel- Efficient Aircraft
Monday April 13, 2009, 12:30 pm EDT

CHICAGO and TULSA, Okla., April 13 /PRNewswire-FirstCall/ -- American Airlines today took an important step toward a significant investment in its long-term future by welcoming two Boeing 737-800 aircraft into its fleet on the eve of their maiden passenger flights.

As American begins the process of replacing its MD-80 fleet, employees, customers and public officials commemorated the arrival of its first new 737- 800s since December 2001 with ceremonies at company facilities in Chicago and Tulsa. The new airplanes, which go into service April 14, are the first of 76 737-800s that will arrive through the first quarter of 2011.

"Even as we battle many significant challenges, we must remain focused on our long-term future, which is what these new 737s represent," said Gerard Arpey, Chairman and CEO of AMR Corp., the parent company of American Airlines and American Eagle. "While our MD-80s remain an important part of our fleet and continue to serve our company and customers well, our new 737s are a vital investment that will benefit our customers, employees, shareholders and the communities we serve. They will help keep our product competitive while offering cost, environmental and operational benefits.

"With today's economic realities causing many companies, including American, to cut back, we must continue to find ways to control costs and boost revenues. While it is a big decision to spend money on new airplanes, especially in tough times, not doing so could be more expensive in the long run."

Arpey noted that the two locations chosen for today's ceremonial events also hold a special significance.

"Chicago, which is one of our vital network hubs, is where these two new airplanes -- and many other new 737s -- will be based," Arpey said. "Tulsa is one of our important maintenance bases and employment centers, and, unlike other airlines that outsource maintenance work and jobs, it is where our own employees will maintain and service these new airplanes for many years to come. This delivery represents the very essence of Made in America, Maintained by American."
AMR employs 7,000 people in Tulsa and 10,000 in Chicago, contributing $14.6 billion to the local economies of the two metropolitan areas.

In spite of an increasingly challenging credit market, Arpey noted that American has been fortunate to be able to secure financing commitments to cover the majority of its expected 737 deliveries. "With the financing commitments we have in place, we now have the ability to finance our expected 737 deliveries well into the fourth quarter of 2010, and we continue to pursue a number of additional financing opportunities," Arpey said.

The new airplanes, which will carry 160 passengers, offer many cost, environmental and customer benefits. They include numerous upgrades and enhancements from previous airplanes and a configuration aimed at improving the passenger experience and operational efficiency.

"Boeing is pleased to be a part of this new chapter in American Airlines history and we look forward to seeing these state-of-the-art airplanes in the skies," said Kevin Schemm, Vice President, North America Sales, Boeing Commercial Airplanes. "We're proud of the relationship we have with American Airlines, and we're excited about the superior product American's passengers will soon enjoy."

New First Class and coach seats will provide improved living space and comfort. In addition, new "big bins" for overhead storage will significantly increase passenger cabin luggage storage capacity by allowing roll-aboards to be loaded wheels first, increasing standard roll-aboards storage capacity by almost double.

Inflight entertainment will include 20 drop-down LCD monitors mounted in passenger service units under overhead storage bins. The new planes have 110V AC power available to all passengers -- a first in American Airlines fleet history and a customer convenience that ends the need for power adapters. Travelers can now plug in laptops and other portable electronic equipment just as they would at the home or office.

There is one power port per seat in First Class and two ports per three seats in coach class. Over time, American plans to equip these aircraft with AirCell's Gogo® Inflight Internet service, which will allow passengers to surf the Web, check e-mail, and send instant messages conveniently from the air.

The 737-800s will burn 35 percent less fuel than an MD-80 on a seat-mile basis. They will also be outfitted with Blended Winglets(TM), similar to those installed on American's current fleet. These wing tip extensions provide significant operating, fuel efficiency and environmental benefits, such as reduced noise on takeoff and approach and lower emissions through lower cruise thrust.

The new deliveries will be added to American's current fleet of 77 737- 800s and are intended to eventually replace American's fleet of approximately 270 MD-80s.

Continental Move to Star Alliance: Will it Heighten Competition with Delta?
April 8, 2009, 10:46 AM ET

By WSJ Staff
The U.S. Transportation Department on Tuesday gave Continental Airlines preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances, The Wall Street Journal reports.

Journal reporters Christopher Conkey and Paulo Prada write:
The administration’s decision will allow Continental to join the Star Alliance with UAL Corp.’s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.

But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.

The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn’t be reached to comment, says these alliances limit competition and hurt consumers.

A DOT spokesperson declined to comment on Mr. Oberstar’s proposal…
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta, which flies to many of the same markets in Europe and Latin America as Continental.

By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.

As we noted in a previous post, it’ll be interesting to watch how Continental’s move to the Star alliance will play out in the New York market. For instance, Delta recently has touted its promotional links to the New York Yankees and Mets, while it opted not to renew its sponsorship of the Atlanta Falcons. Some said part of that decision might be an effort at Delta to try to connect with Continental fliers — who frequent the carriers major New York-area hub in Newark and have gotten used to SkyTeam — and keep them from switching to Star with Continental.

Southwest Airlines set to upset its NYC rivals
Discount carrier offers low prices for its first routes from LaGuardia
By Christopher Hinton, MarketWatch
Last update: 12:27 p.m. EDT April 7, 2009

NEW YORK (MarketWatch) -- New Yorkers who make frequent flights to Chicago and Washington, D.C., are about to find themselves paying less for airfare.

On Tuesday, Dallas-based Southwest Airlines (LUV:
LUV 6.84, -0.50, -6.8%) said it would begin eight daily flights from New York City's LaGuardia Airport to Chicago Midway and Baltimore-Washington airports, beginning June 28.

The low-cost carrier also offered historically low ticket prices on its LaGuardia routes, with one-way flights to Chicago for $89 and to Baltimore-Washington for $49. That's bound to put pricing pressure on rivals like AMR Corp.'s American Airlines and UAL Corp.'s United.
UAUA 5.53, -0.33, -5.6%) United and JetBlue Airways.

Many carriers out of New York City have offered similar fares during sales over the past three months to increase demand in a recessionary economy, but the "Southwest effect" of bringing permanently lower prices is well known across the industry, analysts said.

"They most definitely bring in a lower cost structure," said Vaughn Cordle, chief analyst with AirlinesForecast LLC.

More groundbreaking have been Southwest's walkup fares for LaGuardia, priced "substantially lower" than competitors at a range of $225 to $425, according to Rick Seaney of Farecompare.com.

"This may be in part to compensate for the legacy airlines' advantage with frequent nonstops to several popular business destinations out of New York where Southwest must connect with a one-stop," Seaney said.

Southwest announced last year that it would purchase LaGuardia time slots from bankrupt ATA.

At the time, Chief Executive Gary Kelly said he was confident his airline could maintain its high standard for on-time efficiency despite the airport's reputation as a traffic bottleneck.

Shares of Southwest were down 6% at last check to $6.94. Christopher Hinton is a reporter for MarketWatch based in New York.

Here is information to assist the (former TWA) AA flight Attendants who were recently furloughed again.

TIME IS OF THE ESSENCE, SO DO IT NOW! DO YOUR HOMEWORK AND READ EVERYTHING. ALL YOU NEED TO KNOW IS RIGHT HERE IN THESE LINKS.

PBGC Pension Benefit Guaranty Corp (USA)
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx

Links to HCTC Health Care Tax Credit
http://www.irs.gov/individuals/article/0,,id=109960,00.html

IRS Partial Coverage of Cobra
http://www.irs.gov/individuals/article/0,,id=109956,00.html

Seniority issue could be expensive for Delta

APSeniority issue could be expensive for Delta
Friday March 20, 5:00 pm ET

Seniority issues could force Delta Air Lines to hire workers it doesn't need

ATLANTA (AP) -- Delta Air Lines may be in the costly position of hiring employees it ideally wouldn't need, spending precious cash the carrier wants to preserve in the uncertain economy.
That's because two key work groups haven't resolved seniority issues resulting from the combination of Delta and Northwest Airlines into the world's biggest airline operator.

Seniority determines schedules, vacations, work rules and the way employees bid for flights. Pilots have a merged seniority list and joint contract, but flight attendants and ground workers, such as baggage handlers and reservation agents, don't.

In April, Delta will begin flying its planes in Northwest markets and vice versa. This cross-fleeting is about using the right size aircraft on a specific route based on the demand in that market, and Delta has said one of the key benefits of its acquisition of Northwest was the flexibility to use each carrier's aircraft on the other's routes.

However, flight attendants from one carrier won't be able to work on the other's aircraft because of outstanding seniority and representation issues.

For example, a new international flight on a pre-merger Delta aircraft may require flight attendants who speak a particular language. If Delta attendants aren't available, the airline may need to hire people with that capability even if pre-merger Northwest flight attendants who spoke the language were available. And Delta wouldn't necessarily switch to a Northwest aircraft on that route because it may be inefficient to do so.

Delta currently can't estimate the cost, and experts won't speculate without wage data from the airline and the number of employees to be hired.

Passengers may not notice much right away, but eventually friction between workers could affect morale and, perhaps, hurt customer service.

Jerry Glass, a former US Airways executive who is now president of human resources and labor-management relations consulting firm F&H Solutions Group, said Delta wants to resolve seniority for business reasons, and customer service is a part of that.

If there is a lengthy battle over seniority at Delta "there may be enhancements they want to make that may take them longer and there may be workarounds they may have to do to get that completed," Glass said.

Delta has publicly urged the two groups to resolve the integration of the seniority lists soon. Unions that represent the flight attendants, baggage handlers and reservation agents who worked for Northwest before the Oct. 29 buyout have resisted.

Vital information for former TWA flight attendants getting furloughed for the second time at American Airlines on April 1, 2009

If you have a Verizon Wireless card and only Verizon...You can mothball (turnoff with no payment due) your Broadband card for three months by calling Verizon. The fee is $15.00 and your wireless card will be mothballed for three months.

BEFORE THE END OF THE THREE MONTHS YOU CAN CALL AGAIN, pay the $15.00 fee again and mothball your card for another three months for a total of six months AND you can convert your wireless account to a family plan...and get out of the contract, by adding an additional phone for $9.99 a month to a qualifying account. If you have a used cell they can activate that or you can but a cheapie from Verizon and activate that for a small fee.

All the info we need to process out is available on the flight service website. As much as we are all disgusted with this nonsense, take care of your stuff NOW and do NOT wait till the end of the month.AA will send you the form for deciding what coverage you want if you choose Cobra.

The IRS adminsters the tax credit for the HCTC, not the PBGC!

IF YOU ARE OVER 55 AND COLLECTING FROM THE PBGC, THE IRS administers the tax credit covering 80% OF THE COBRA COST FOR life...NOT THE RECENT OBAMA PLAN WHICH COVERS ONLY 9 MONTHS. DO YOUR HOMEWORK. HERE ARE THE SITES FOR THE PBGC AND THE HCTC FOR THE COBRA 80% COVERAGE OF THE INSURANCE PREMIMUM. (insurance only) WE ARE ALL IN THIS TOGETHER.

I am wearing my TWA wings on my uniform till the last trip.


HCTC Latest News, Overview and Background
http://www.irs.gov/individuals/article/0,,id=109960,00.html


PBGC link
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx

What is the HCTC and who is eligible?

The Health Coverage Tax Credit (HCTC) is an important benefit that pays 80% of a qualified health plan premium for eligible individuals. The HCTC is a unique tax credit that individuals can receive either monthly as their health plan premium becomes due or yearly as a credit on their federal tax return.

The Internal Revenue Service (IRS) administers the HCTC. The following individuals are potentially eligible for the tax credit:

1. Pension Benefit Guaranty Corporation (PBGC) pension recipients who are at least 55 years old

What is the monthly HCTC?
Most tax credits are paid out when you file your federal taxes. However, health plan premiums can be expensive and some people need help to pay them each month as they become due instead of when they file their taxes.

The monthly HCTC allows you to receive the HCTC in the form of a payment to your health plan on a monthly basis as your premium payments become due after you have paid your portions of the health insurance premiums to the HCTC Program.

What is the yearly HCTC?
The yearly HCTC is paid out when you file your federal taxes. You must complete and submit IRS Form 8885, Health Coverage Tax Credit, to claim the yearly HCTC on your federal tax return. The instructions on the form provide guidance on who may claim the HCTC and what documents you must provide with IRS Form 8885.

If you do not have all the required documents, you may not receive the HCTC as a refund or a credit against any taxes you owe. You can get IRS form 8885 on the IRS website or by calling the IRS at 1-800-TAX-FORM

American Airlines furloughs 323 more flight attendants April 1. 87 jobs saved, all involved are former TWA flight attendants

American Airlines Inc. plans to furlough up to 323 flight attendants April 1 as it did not get enough volunteers to take leaves, early departures or other steps to reduce their ranks.

The Association of Professional Flight Attendants informed its members Wednesday afternoon via a hotline message that it learned of the impending layoffs from Lauri Curtis, American's vice president of flight service.

Curtis had advised the union "that, despite the attempts over the last several months to accommodate the flight attendant manning overages caused by schedule reductions and reduced passenger loads, the company has been unable to sufficiently absorb the expected additional flight attendant headcount," the union said.

"It is therefore notifying the 410 most junior of our members that they are subject to furlough effective April 1, 2009," the union said.

American spokeswoman Sue Gordon said the potential furloughs are the result of less attrition than usual, not an effort by American to cut more jobs and capacity.

The airline had hoped to attract enough volunteers in January to avoid layoffs, she said. The airline had offered leaves of absence, travel privileges for people quitting and partnership flying – the sharing of one job by two flight attendants.

However, the airline hasn't been getting the number of requests for short-term leaves, retirements or resignations that it usually gets, and Gordon attributed it to the poor economy.
"The environment is changing rapidly," she said. "People are choosing to stay employed longer than we would have historically seen in terms of retirements and resignations. I think the economy is playing a factor where people are making different choices than they may have under a different economic environment."

The union also said American has agreed to give furloughed flight attendants an extra two years in which they have the right to be recalled by the airline.

AP
Sullenberger: Pay cuts driving out best pilots
Tuesday February 24, 11:57 am ET
By Joan Lowy and Michael J. Sniffen, Associated Press Writers

US Airways pilot Sullenberger says pay, benefit cuts are driving out experienced pilots

WASHINGTON (AP) -- The pilot who safely ditched a jetliner in New York's Hudson River said Tuesday that pay and benefit cuts are driving experienced pilots from careers in the cockpit.
US Airways pilot Chesley "Sully" Sullenberger told the House aviation subcommittee that his pay has been cut 40 percent in recent years and his pension has been terminated and replaced with a promise "worth pennies on the dollar" from the federally created Pension Benefit Guaranty Corp. These cuts followed a wave of airline bankruptcies after the Sept. 11, 2001, terrorist attacks compounded by the current recession, he said.

"The bankruptcies were used to by some as a fishing expedition to get what they could not get in normal times," Sullenberger said of the airlines. He said the problems began with the deregulation of the industry in the 1970s.

The reduced compensation has placed "pilots and their families in an untenable financial situation," Sullenberger said. "I do not know a single, professional airline pilot who wants his or her children to follow in their footsteps."

The subcommittee of the House Transportation and Infrastructure Committee heard from the crew of Flight 1549, the air traffic controller who handled the flight and aviation experts to examine what safety lessons could be learned from the Jan. 15 accident which all 155 people aboard survived.

Sullenberger's copilot Jeffrey B. Skiles said unless federal laws are revised to improve labor-management relations "experienced crews in the cockpit will be a thing of the past." And Sullenberger added that without experienced pilots "we will see negative consequences to the flying public."

Sullenberger himself has started a consulting business to help make ends meet. Skiles added, "For the last six years, I have worked seven days a week between my two jobs just to maintain a middle class standard of living."

The air traffic controller who handled Flight 1549 said thought he was hearing a death sentence when Sullenberger radioed that he was ditching in the Hudson.
"I believed at that moment I was going to be the last person to talk to anyone on that plane alive," controller Patrick Harten testified in his first public description of his reactions to last month's miracle landing.

"People don't survive landings on the Hudson River. I thought it was his own death sentence," the 10-year veteran controller testified.

But Sullenberger safely glided the Airbus A320 into the river after it collided with birds and lost power in both engines.

Harten, who has spent his entire career at the radar facility in Westbury, N.Y., that handles air traffic within 40 miles of three major airports, struggled vainly to help get the airliner safely to a landing strip.

Making lightning-quick decisions, Harten communicated with 14 other entities in the three minutes after the bird strike as he diverted other aircraft and advised controllers elsewhere to hold aircraft and clear runways for 1549.

First, Harten tried to return the plane to LaGuardia Airport, asking the airport's tower to clear runway 13. But Sullenberger calmly reported: "We're unable."

Then Harten offered another LaGuardia runway. Again, Sullenberger reported, "Unable." He said he might be able to make Teterboro Airport in New Jersey.

But when Harten directed Sullenberger to turn onto a heading for Teterboro, the pilot responded: "We can't do it .... We're going to be in the Hudson."

"I asked him to repeat himself even though I heard him just fine," said Harten. "I simply could not wrap my mind around those words."

At that moment, Harten said he lost radio contact with flight and was certain it "had gone down."
Afterward, Harten said he told his wife, "I felt like I had been hit by a bus."

NTSB investigators have said bird remains found in both engines of the downed plane have been identified as Canada geese.

Sullenberger and Skiles said anyone who's spent much time in cockpits has encountered bird strikes but that this one was exceptionally severe in knocking out both engines. Some gulls don't even dent the airplane, Skiles said, but this "was a bigger bird than I've ever hit before."

The crew and passengers of a helicopter that crashed en route to an oil platform on Jan. 4 weren't as lucky. The National Transportation Safety Board reported Monday that investigators have found evidence birds were involved in the accident near Morgan City, La., that killed eight of nine people aboard.

February 20, 2009, 9:04 am
More Passengers With Issues + Longer Flights = More In-Flight Medical Problems
Posted by Matt Phillips

Medical events in the cabins of commercial carriers are increasing in frequency as more people with medical conditions travel, the British medical journal the Lancet reports.

An article by Danielle Silverman and Mark Gendreau in the journal’s current issue — the article reviews the literature on air travel and illness — says flights are associated with a number of health issues including venous thromboembolism, or blood clots in veins, cosmic-radiation exposure, jet lag, and cabin-air quality. Also, according to the article summary: “In-flight medical events are increasingly frequent because a growing number of individuals with pre-existing medical conditions travel by air.”

The BBC took a closer look at the article. Here are some of the more interesting items the venerable British news agency spotlighted: Several outbreaks of “serious infections such as influenza, measles, severe acute respiratory syndrome (Sars) and tuberculosis have been reported on commercial flights. However, risk of on-board transmission, the researchers noted, is mainly restricted to within two rows of the passenger carrying the infection.” Keep that in mind next time you find yourself sharing a seat with someone with a nonstop cough. (The BBC also quoted Dr. Ray Johnston, head of the UK’s Civil Aviation Authority’s Aviation Health Unit who said that while there has been a rise in recent years in the number of on-board medical emergencies “aviation still has an excellent safety record.”)

On a more serious note, the research clearly shows a link between air travel and venous thromboembolism (VTE), dangerous blood clots:

Some 75% of air-travel cases of VTE have been linked to lack of movement while on board - although economy passengers are no more likely to develop clots than their counterparts in business, the review found.

Risk was at its highest in flights of eight hours or more, but one study found the risk started to climb at four hours, the Lahey Clinic Medical Center team, led by Dr. Mark Gendreau, found.
The best ways to avoid clots include changing position regularly, walking through the cabin and performing calf exercises. (How much can you calf press?) Also, stay hydrated. No excuses. That means planning ahead if your carrier charges for water.

Airlines see largest employment drop in five years
The Business Review (Albany)

Full-time employment at Frontier Airlines declined 15.7 percent between December 2007 and the same month on 2008, the steepest drop of 14 large and low-cost airlines, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics.

The overall full-time employment decrease of seven low-cost airlines over that period was 3.3 percent, the BTS said in its monthly “Passenger Airline Employment Data.”
For seven larger, “network” airlines, the decrease was 6.3 percent.

Southwest Airlines, the largest carrier at Albany International Airport, had 35,499 full-time quivalent employees at the end of 2008, putting it in the top of the seven low-cost carriers on the BTS list.

BTS counted two part-time employees as a single full-time worker.

Among seven “network” airlines, United saw the biggest employee reduction, 12.7 percent, between the two Decembers, BTS said, followed by Northwest Airlines (6.9 percent) and Delta Air Lines (6.2 percent). Northwest and Delta (NYSE: DAL) are combining operations. Both serve Albany International Airport.

Overall — among large, low-cost and smaller regional airlines — employment levels experienced their largest year-to-year decrease since December 2003, BTS said.

Employment levels dropped 6.7 percent in December 2008 compared to the same month in 2007, the sixth straight decline in full-time equivalent rates compared to the same month the previous year.

February 19, 2009, 10:22 am
Southwest Takes Aim at Boston Logan
Posted by Matt Phillips

With its announcement last night that it will start service to Boston’s Logan International Airport, it seems like Southwest is continuing to shift its focus from secondary airports into the heart the country’s major hubs.

Southwest says it intends to start service to Logan International this fall. The carrier has not released specific details of new service, saying only that it will start with a “conservative number of flights that will complement its 64 airport network.”

Southwest’s plans for Boston are only its latest foray into primary airports in major markets. In November, Southwest announced plans to begin service to and from New York’s LaGuardia airport, bidding $7.5 million to purchase defunct carrier ATA Airlines’ takeoff and landing spots at LGA. Southwest also plans to add service at Minneapolis this year, as well as Canada and Mexico through partnerships with other airlines.

Such moves reinforce the sense that CEO Gary Kelly is running a very different airline from the one fashioned by Southwest’s co-founder, Herb Kelleher.

Kelly hasn’t been afraid to tear up the old Southwest playbook by attacking competitors’ fortress hubs, such as Philadelphia, Denver and Minneapolis, something Kelleher generally avoided. He also has explored code-sharing to a greater extent.

“This is another step back in a long line of moves that changes Southwest’s historical business model,” wrote aviation consultant Scott Hamilton, of Leeham Co., in an e-mail to the Terminal. “Southwest used to avoid big city, congested airports and/or hubs of other airlines by focusing on secondary airports. It’s run out of secondary airport and now has no choice but to go into the big-city airports. With rising labor costs—Southwest now has one of the highest labor costs-to-expenses in the industry—Southwest has to go where the passengers are chasing revenue.”

Delta’s Paint Job on Northwest 747-400
Posted by Matt Phillips

http://vidego.multicastmedia.com/player.php?v=v6119lu6

See the Northwest 747-400 painted in 3.5 minutes to Delta livery

Judging from the sheer number of comments to our paltry post on Delta dipping the first of Northwest’s red-tailed 747-400s in Delta blue, we figured we’d follow up a little and offer a new picture, which Delta posted in its Flickr pool. (As a side note, the Middle Seat Terminal has one too. And we need more people to contribute.) One of our commenteers on that previous post raised the issue of whether it might be tricky for Air Traffic Control to keep Delta and Northwest flights straight as the two gradual become one “new” Delta. “I wonder how much confusion this will cause when ATC tells pilots to look for an NWA aircraft which may or may not be painted in Delta colors.

I guess the controllers will have to ask what paint scheme the [aircraft] has,” wrote one commenter, who identified himself as “Bob the NWA Pilot.” As it turns out, the John Croft over at FlightGlobal wrote a bit about that not too long ago:

Until the merging operating certificates under the Delta banner is complete, pilots and controllers handling Northwest flights will continue to use the “Northwest” aircraft call sign and the “NWA” three-letter identifier in flight plan, regardless of the paint scheme of the aircraft, says the FAA.

The policy calls for pilots of flights carrying Northwest call signs but painted in Delta colours to include the phrase “Delta colours” at the end of certain radio calls and on written flight plans.
FAA says the temporary policy, effective for one year starting 14 December, is required to avoid confusion when Delta and Northwest aircraft “are communicating with air traffic control but are not painted in the colours of the airline matching the call sign they are using.”

Ah the joys of merging. For more on other aspects of operations that can get tangled when two airlines decided to tie the knot, check out this post that follows .....

Five Issues Delta-Northwest Marriage Could Face
Posted by Matt Phillips

It’s well established that airline mergers aren’t always smooth affairs. Here are five things that the executives tasked with creating a “new” Delta out of the Atlanta-based carrier and Northwest have likely been considering for months — and why travelers should care.
Reservation glitches: Merging hundreds of routes and reservations is no easy task. It took quite a while for US Airways, which merged with America West back in 2005, to straighten out its schedule.

Back in October 2007, Scott wrote a column in which US Airways CEO Doug Parker said some issues arose as a result of an effort to unify US Airways and America West’s reservation system. “Reservations were lost, flights were delayed and many customers fumed in long lines. For many months, US Airways had two separate check-in lines depending on whether your reservation was made through the old US Airways system or the America West system,” Scott wrote.

Pilot issues: In past mergers, seniority integration has been a major sticking point leading to litigation and years of bad feelings. (Seniority determines pay and schedules for pilots.) Some Northwest pilots have been around long enough to remember the hostility that followed that carrier’s 1986 acquisition of Republic Airlines. The deal doubled Northwest’s size, but the integration led to months of lost baggage and years of worker infighting. Senior pilots at the airline still identify themselves as “red book,” meaning they were covered by the old Northwest contract, or “green book,” Republic’s contract. Why should you care?

Well, back in 1999, after American Airlines acquired tiny Reno Air, an integration dispute triggered an illegal pilot sickout that disrupted travel nationwide for 11 days. As Susan Carey and Paulo Prada wrote in the Journal, this is one issue in the Delta/Northwest tie-up that isn’t yet resolved. But Delta’s 6,000 pilots and Northwest’s 5,000 already have voted for a common labor contract and agreed to abide by an arbitrator’s ruling if they can’t agree by next month.

Cranky Workers: Poor customer service has been a problem with airline mergers before. Generally speaking, the ongoing uncertainty of mergers can sap employee morale. (After all, one rationale behind combining two airlines — cost savings — often translates into job cuts.) The list of potential merger problems can seem endless. For instance, during the US Airways/America West integration, one sticking point was how empty seats on flights were given to employees. America West employees got to ride in empty seats on a first-come, first-served basis, while US Airways, employees got seats based on seniority. While this might seem like inside baseball, all these issues play a role in employee attitudes, and consequently, passengers’ experience with those employees.

Generalized confusion: As Northwest joins Piedmont, AirCal, Republic, and Mohawk in the great airline-brand scrapyard in the sky, it’s crucial that the “new” Delta makes it clear which airline’s terminals, gates and check-in counters will be in use for customers. It sounds simple, but sometimes airlines can take an extremely long time to iron this stuff out. In a November 2006 column, Scott wrote how Delta’s terminal at New York’s Kennedy was still waiting for full merger integration 15 years after Delta bought Pan Am’s European business, making Delta’s Kennedy operations confusing — even for some cab drivers.

The false start: After airlines merge, it often takes awhile before they’re ready to enact major changes in operations and procedures. Again, the US Airways/America West deal may serve as an example. The integration of the two started off smoothly but ran into large operational snags — poor on-time and baggage handling, people stranded at airports — that inconvenienced customers. (It’s important to note, however, that US Airways has made big strides in straightening most of them out.)

That said, there are plenty of reasons to believe that the integration of Delta-Northwest will be less rocky than other airline marriages. For one, Delta’s CEO Richard Anderson — who will lead the combined carrier — has been in charge of both companies, which may give him special insight into how the two cultures will blend.
Readers, we know many of you are airline experts. What other unexpected bumps lie down the road?

November 25, 2008
Ex-TWA attendants decry Delta/NW integration

An American Airlines flight attendant who led the fight to extend recall rights to former TWA flight attendants said he's worried that attendants affected by the Delta/Northwest merger could experience similar problems.

Roger Graham helped organize a successful grassroots effort to extend recall rights past five years to the TWA flight attendants who worked for American after that airline was acquired in 2000. TWA attendants were added to the bottom of the American seniority list, and many were laid off in the months following Sept. 11, 2001. By 2006, many began to lose their right to return to work, which expired after five years.

Graham said Tuesday that the Delta/Northwest merger had the potential for similar problems, pointing out that Delta attendants aren't unionized, while Northwest attendants are represented by the Association of Flight Attendants. Delta has formed employee committees to plan the integration, but Graham said the airline should wait until employees can vote on whether to unionize.

"Delta’s attempt to undermine that legislation and process is reprehensible," he said. "If Delta implements their plan of a 'fair and equitable' integration without first having a union vote, it will most certainly lead many of these flight attendants down the same flight path as the TWA attendants."

Trebor Banstetter

British Airways in merger talks with Qantas

Tuesday December 2, 10:10 am ET By Jane Wardell, AP Business Writer

British Airways says it is in talks with Australian airline Qantas about a potential merger
LONDON (AP) -- British Airways PLC said Tuesday it is in talks with Australia's Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry.

BA, which is already pursuing a revenue-sharing deal with American Airlines and Spain's Iberia SA, said it is exploring a "potential merger" with Qantas "via a dual-listed company structure."
In a brief statement released in response to market speculation, BA did not provide any reasoning for the prospective deal but chief executive Willie Walsh has long advocated industry consolidation, arguing that closer cooperation will help airlines cut costs in the current difficult economic climate.

BA, the third-largest airline in Europe, added that its discussions with Iberia on a potential merger are continuing.

"There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate," BA said in the statement to the London Stock Exchange. It provided no further detail on the structure of the potential deal with Qantas, Australia's largest airline.

The London-based carrier's stock jumped more than 12 percent after the announcement to 156.7 pence ($2.35).

The two airlines are already code sharing partners in the oneworld global alliance, which brings together 10 of the world's carriers including Japan Airlines.

The confirmation from BA on the talks comes a day after the Australian government revealed that it plans to increase the level of foreign ownership allowed in Qantas, but will not permit a takeover. Australian law currently limits a single foreign holding to 25 percent, while a group of foreign holdings can total 35 percent.

A federal government policy paper released Monday proposes lifting the foreign ownership limit -- whether by one company or a group of companies -- to 49 percent. That would allow Qantas and BA to swap equal stakes in each other.

Qantas last month slashed its full-year profit forecast to around 500 million Australian dollars ($316 million), down from an August forecast of AU$750 million. It also said it would cut flights to cope with plummeting demand, despite a recent easing in the oil price.

Walsh last month warned that that the industry was still "heading into the eye of the storm," shortly after BA reported a first-half net loss of 49 million pounds ($77 million).
Analysts have been expecting greater consolidation in the airline industry after the global economic crisis combined with soaring oil prices earlier this year to severely crimp passenger demand.

The International Air Transport Association has reported international passenger traffic declined 1.3 percent in October compared with 2007, following a 2.9 percent drop in September, and forecasts industrywide losses of $2.3 billion this year.

Budget airline Ryanair Holdings PLC on Monday launched a new takeover bid for Aer Lingus, seeking to capitalize on labor unrest at its Irish rival along with the country's economic difficulties.

BA has already filed for worldwide antitrust immunity from U.S. authorities for a revenue-sharing deal with American and Iberia that would see the trio set prices together and share seat capacity on trans-Atlantic flights. American would be the non-merged member of the BA-Iberia linking.

The agreement is the closest alliance the trio can form under strict U.S. airline ownership laws that all but rule out a full merger and follows two earlier failed attempts by BA and AMR Corp.'s American to forge closer ties.

Rival carrier Virgin Atlantic Airways has bitterly opposed that proposed deal, claiming it will seriously damage the competitiveness of the lucrative trans-Atlantic route and increase fares for passengers.

But American and BA contend that the partnership will merely allow the trio to better compete with the other major airline alliances, Star and SkyTeam, which already have antitrust immunity on trans-Atlantic flights and a large presence at other European airports.

BA and American have failed in the past to win an exemption from U.S. competition laws to work more closely together because of their dominance at London's Heathrow Airport, where the pair have more than half the capacity to and from the U.S.

Walsh has argued that the competitive situation has changed since the "open skies" agreement between the U.S. and the European Union came into force in March, allowing airlines to fly to and from any point in the U.S. and any point in the EU.

NWA flight attendants union sues Delta
Tuesday, November 25, 2008 - 11:39 AM ESTDayton Business Journal - by Liz Riggs DBJ Contributor

The union representing Northwest Airlines flight attendants is suing Delta Air Lines Inc. to prevent the carrier from integrating the pre-merger Delta and Northwest seniority lists, saying the action is premature.

According to the suit filed Nov. 11 in U.S. District Court in Washington, D.C., the Association of Flight Attendants-CWA believes that moving ahead with integration before the combined group has the opportunity to vote on union representation constitutes “unlawful interference [by Delta] ... with the rights of those employees to choose their representative and to organize and bargain effectively.”

Atlanta-based Delta (NYSE: DAL) acquired Northwest on Oct. 29. Delta’s flight attendants are not represented by a union; Northwest’s are.

According to the suit, Delta has said it could take up to 12 to 24 months to fully merge the operations of the two carriers and obtain a single operating certificate from the Federal Aviation Administration. Because Delta has not yet received the certificate, the suit alleges the seniority integration process is inappropriate.

Delta is the largest airline flying out of the Dayton International Airport.
E-mail dayton@bizjournals.com. Call (937) 528-4400.

November 14, 2008, 11:12 am
JetBlue Pilots Move To Form Union
Posted by Matt Phillips

On Thursday, JetBlue filed for U.S. regulatory approval to form the low-cost airline’s first labor union, a move that pilots say will position them to cope with future management that may be less friendly to labor, Dow Jones Newswires reports.

“We have complete faith in our current company leadership and believe that this will be a cooperative effort,” Michael Sorbie, the pilots’ spokesman, said in a letter to the National Mediation Board, the agency that oversees airline labor issues. Sorbie added that “as our airline matures, we want to ensure that the career expectations of our pilots will remain intact regardless of organizational changes.”

The letter was posted on the pilot group’s Web site.

JetBlue spokesman Bryan Baldwin said Thursday that “we have been advised that it is JBPA’s intention to file a petition for election, but have not yet been notified by the National Mediation Board. We believe direct relationship with the company is in our pilots’ best interest.”

The pilots group has asked to be an independent negotiator for JetBlue pilots, rather than join an existing union. A spokesperson for the pilots couldn’t immediately be reached for comment. Once the request is approved, pilots can vote on union representation.

The New York carrier was founded in 2000 as a non-union airline, a rarity in an industry where union organizing - particularly for pilots - has been the standard. David Neeleman, the innovative entrepreneur who started JetBlue, referred to all employees as “crew members”. The airline strove to foster a work-friendly atmosphere that circumvented typical labor-management confrontations.

The airline flourished in its early years, offering low ticket prices and good service. It grew as much as 30% a year, and became a Wall Street favorite, making a profit even as major U.S. airlines lost money and struggled to streamline their organizations during a long industry downturn.

JetBlue now is the major carrier at its New York hub at JFK International Airport, employing more than 9,000 workers.

November 18, 2008, 2:21 pm

Has American Airlines Turned Around Its Operation?
Posted by Scott McCartney

As we’ve reported several times in different stories, AMR Corp.’s American Airlines has been struggling with its operation for more than the past year. American officials now admit they went too far in cost-cutting, and the lack of spare parts, spare employees and spare airplanes, combined with overly optimistic schedules, has led to bottom-of-the-industry dependability. Add in continued battles between labor and management and you have one late airline.

American is now trying to turn that around, primarily by building more cushion into its operation. The carrier has added minutes to scheduled flight times, bulking up because delays are measured by comparing actual arrival time at gates with scheduled arrival time. The airline says it has also sped up cruise speeds for flights it slowed down to save fuel, and increased the ground time between flights.

But has the airline turned around yet? On Tuesday, American’s public relations firm, Weber Shandwick, sent a pitch to reporters suggesting a pre-holiday trend story on “American’s Improving Dependability Ratings.” The pitch said American moved from 58.8% on-time performance in June to 83.6% “as of mid-October, advancing its ratings by about 16 percent on average between July and September.”

Comparing airline on-time results in June with mid-October is a bit like comparing the temperature in those months and declaring global warming concerns are dead. Air travel is impacted heavily by summer storms, summer crowds and summer congestion at airports and in the sky. Dependability has improved for every airline this fall as a result of severe schedule cuts that reduced a lot of congestion. And fall is a better flying season for airlines than summer.
So in proper comparisons, how is American faring?

The best way to compare dependability is to compare airlines, since they all fly more or less in the same weather and congestion. (Airlines with heavy presence in New York do have it tougher than others, as we’ve noted before.) According to the Department of Transportation, American ranked eighth among the ten major airlines for dependability in September, the most recent month the government has reported. According to FlightStats.com, a flight-tracking service, American was again eighth among ten majors in October. So far this month, FlightStats shows American with an on-time percentage of 80.32%, which ranks — you guessed it — eighth among ten majors.

But American is running better than it did a year ago. In September, for example, 81.5% of its flights arrived within 15 minutes of schedule, the DOT’s definition of “on-time.” In September 2007, only 78.5% of American’s flights arrived on time, according to DOT. In October, FlightStats counted 81.6% of American’s flights on-time, compared to only 74.3% in October 2007. In the first 15 days of November, American had 80.3% of its flights arrive on time, compared to 78.1% in the same period last year, according to FlightStats.

So dependability has been somewhat better. But it’s been better for other airlines as well.
The real proof, of course, is with the passengers.

Delta begins long integration with Northwest

Friday October 31, 5:58 am

ET By Joshua Freed,

AP Airlines Writer

Delta begins long integration with Northwest; says customers will see little change
MINNEAPOLIS (AP) -- One day after his airline swallowed Northwest Airlines, Delta executive Ed Bastian was in town with a polar bear tie and a smile in a bid to reassure travelers that little would change.

Hubs? They all stay. Flights? Maybe fewer seats, but no outright cuts. Frequent flier miles? You'll keep them all.

Still, Bastian and the rest of the executives who will stir the two airlines together have plenty to do.

"It's probably going to take us two years before we can really operate as a single carrier," Bastian, who is Delta Air Lines Inc.'s chief financial officer, said Thursday. Bastian is also now the chief executive of Northwest, which became a subsidiary of Delta when their tie-up closed on Wednesday.

Although dozens of teams with members from both companies have been working together for months toward the integration, several items still have not been decided yet, Bastian said from behind a "Delta" podium above a ticketing area dominated by Northwest counters. That includes whether Delta will continue to allow a single checked bag for free (Northwest charges a fee), and which planes will go on which routes.

Bastian did not rule out the possibility that Delta would add a checked-bag fee. In any case, both airlines will have the same fee structure soon, he said.

He said Delta would arrange its fleet and schedule in the spring. Only one airplane, the 757, is common to both carriers.

Airline mergers have a checkered history. AMR Corp.'s American closed on a buyout of TWA months before the Sept. 11, 2001, attacks turned the industry upside-down. And US Airways Group Inc. is still struggling with its integration with America West.

"In the past it's been like trying to integrate oil and water," said Mo Garfinkle, who runs airline consulting firm GCW Consulting.

Delta and Northwest will have to integrate different corporate cultures, different software for ticketing and schedules, different fleets, different unions (most of Delta's workers are not unionized) -- and it all has to be done without missing a beat in a 24-7 operation that includes hubs from Tokyo to Amsterdam.

Garfinkle says he is optimistic, because of all the work that the two airlines have already done, and because they seem willing to take it slow.

"I think this is going to be the poster child for successful airline mergers," he said.
Bastian said that regional subsidiary Comair would remain a part of the airline. Comair's future has been uncertain, in part because it flies 50-seat jets that are money-losers when oil prices are high.

"Comair is an important part of the family, just as they've always been," he said.
The airlines have been cutting domestic capacity while in many cases adding international routes. Bastian said that's on hold now because of the economy.

"The growth will be slowed if there's any growth at all on the international seats," he said.
On Wednesday, before the deal closed, Northwest said it had arranged $500 million in loans backed by its remaining unencumbered assets, which had included its old DC-9 planes. Bastian said the borrowing won't change Delta's ability to park or fly the planes as the schedule requires. He said Delta has not settled on a replacement for the DC-9.

Delta is also negotiating with the state of Minnesota over bond debt backed by the state. Northwest signed agreements promising to repay the debt, at a cost of about $230 million, if its headquarters leaves the state. That hasn't happened yet because it's still a Delta subsidiary.
Northwest has its headquarters in Eagan, Minn. The combined carrier will be based in Atlanta.
Minnesota Rep. Debra Hilstrom, D-Brooklyn Center, said she would call a Nov. 13 hearing about the matter in the House Local Government and Metropolitan Affairs Committee, which she chairs.

October 31, 2008, 9:10 am
Five Issues Delta-Northwest Marriage Could Face
Posted by Matt Phillips

It’s well established that airline mergers aren’t always smooth affairs. Here are five things that the executives tasked with creating a “new” Delta out of the Atlanta-based carrier and Northwest have likely been considering for months — and why travelers should care.

Reservation glitches: Merging hundreds of routes and reservations is no easy task. It took quite a while for US Airways, which merged with America West back in 2005, to straighten out its schedule.

Back in October 2007, Scott wrote a column in which US Airways CEO Doug Parker said some issues arose as a result of an effort to unify US Airways and America West’s reservation system. “Reservations were lost, flights were delayed and many customers fumed in long lines. For many months, US Airways had two separate check-in lines depending on whether your reservation was made through the old US Airways system or the America West system,” Scott wrote.

Pilot issues: In past mergers, seniority integration has been a major sticking point leading to litigation and years of bad feelings. (Seniority determines pay and schedules for pilots.) Some Northwest pilots have been around long enough to remember the hostility that followed that carrier’s 1986 acquisition of Republic Airlines. The deal doubled Northwest’s size, but the integration led to months of lost baggage and years of worker infighting. Senior pilots at the airline still identify themselves as “red book,” meaning they were covered by the old Northwest contract, or “green book,” Republic’s contract. Why should you care? Well, back in 1999, after American Airlines acquired tiny Reno Air, an integration dispute triggered an illegal pilot sickout that disrupted travel nationwide for 11 days. As Susan Carey and Paulo Prada wrote in the Journal, this is one issue in the Delta/Northwest tie-up that isn’t yet resolved. But Delta’s 6,000 pilots and Northwest’s 5,000 already have voted for a common labor contract and agreed to abide by an arbitrator’s ruling if they can’t agree by next month.

Cranky Workers: Poor customer service has been a problem with airline mergers before. Generally speaking, the ongoing uncertainty of mergers can sap employee morale. (After all, one rationale behind combining two airlines — cost savings — often translates into job cuts.) The list of potential merger problems can seem endless. For instance, during the US Airways/America West integration, one sticking point was how empty seats on flights were given to employees. America West employees got to ride in empty seats on a first-come, first-served basis, while US Airways, employees got seats based on seniority. While this might seem like inside baseball, all these issues play a role in employee attitudes, and consequently, passengers’ experience with those employees.

Generalized confusion: As Northwest joins Piedmont, AirCal, Republic, and Mohawk in the great airline-brand scrapyard in the sky, it’s crucial that the “new” Delta makes it clear which airline’s terminals, gates and check-in counters will be in use for customers. It sounds simple, but sometimes airlines can take an extremely long time to iron this stuff out. In a November 2006 column, Scott wrote how Delta’s terminal at New York’s Kennedy was still waiting for full merger integration 15 years after Delta bought Pan Am’s European business, making Delta’s Kennedy operations confusing — even for some cab drivers.

The false start: After airlines merge, it often takes awhile before they’re ready to enact major changes in operations and procedures. Again, the US Airways/America West deal may serve as an example. The integration of the two started off smoothly but ran into large operational snags — poor on-time and baggage handling, people stranded at airports — that inconvenienced customers. (It’s important to note, however, that US Airways has made big strides in straightening most of them out.)

That said, there are plenty of reasons to believe that the integration of Delta-Northwest will be less rocky than other airline marriages. For one, Delta’s CEO Richard Anderson — who will lead the combined carrier — has been in charge of both companies, which may give him special insight into how the two cultures will blend.

Readers, we know many of you are airline experts. What other unexpected bumps lie down the road?

Reuters

Delta buys Northwest to create biggest airline

Wednesday October 29, 9:58 pm ET
By John Crawley

WASHINGTON (Reuters) - Delta Air Lines (NYSE:DAL - News) swallowed rival Northwest Airlines Inc on Wednesday in a $2.6 billion merger that created the world's biggest airline and prompted new speculation about further industry consolidation.

The all-stock transaction, the first domestic airline combination in three years, closed after clearing its biggest and last regulatory hurdle earlier in the day -- U.S. Justice Department antitrust review.

Justice officials cited the likelihood of "substantial and credible efficiencies" without harming consumers or competition.

Government approval was expected. Industry vigorously made the case to regulators earlier this year, when airline finances were rockier than they are now, that consolidation was an important tool for remaining viable with fuel prices high and the economy worsening.

"The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead," said Richard Anderson, the Delta chief executive who will head the combined entity.

The new, larger Delta will be an international powerhouse with unparalleled scheduling and pricing strength with service to 375 cities worldwide, experts said. The company estimates a combined $2 billion in cost savings and revenue enhancements annually.

An ambitious plan is to link the long-established strength of Northwest in Asia with Delta's expanding overseas network, and leverage benefits from the transatlantic SkyTeam alliance that includes AirFrance/KLM.

"There are global corporations but no global airlines. The race to become the first truly global airline has an incredible reward to it," said consultant Darryl Jenkins. "The revenue potential is something that we have not seen yet. That's the synergy that will make this very lucrative."

Jenkins and other experts said the deal's potential may reignite merger fever, which burned this year until fuel prices started their dramatic rise this summer to record heights and prompted sharp airline cost cutting.

Doug Parker, chief executive of US Airways Group (NYSE:LCC - News) and a long-time proponent of consolidation, said last week that he still believes mergers are right for the industry. US Airways failed last year in its bid for Delta.

Calyon Securities analyst Ray Neidl said that economic wild cards could impede consolidation. A credit crunch and fuel price volatility must diminish before airlines can explore mergers, he said.
"Down the road, there will be more consolidation or attempts," Neidl said.

INTEGRATING OPERATIONS

Northwest's history dates to 1926 and its common stock first traded in 1941. But the company now operates as a wholly owned subsidiary of Delta until the two fully integrate their operations. That process is expected to take up to two years and cost no more than $600 million.

Integration can be tricky. For instance, US Airways Group Inc (NYSE:LCC - News) has yet to fully combine its work force after merging with America West in 2005.

Delta said customers should continue to check-in and do business directly with the airline operating their flights just as they did before the merger.

For the time being, the carriers will maintain separate web sites as well as two reservation systems and loyalty programs.

The new company will retain the Delta brand and be headquartered in Atlanta, where Delta is based. The new Delta begins operations with 75,000 employees.

In the coming days, Delta will distribute an equity stake to substantially all U.S.-based employees with international employees participating through cash payments in lieu of stock. The pilots' unions of both airlines have agreed to a unified contract but still must negotiate a seniority arrangement, a detail that almost derailed merger prospects earlier this year.

The new Delta has said no frontline employees will be involuntarily furloughed as a result of the merger and that no hubs will be closed. The old Delta's strength was in the South while Northwest operations are based in the northern cities of Minneapolis and Detroit.

As approved by shareholders at both companies earlier this year, Northwest stockholders will receive 1.25 Delta shares for each Northwest share they own. Based on Delta's closing stock price on Wednesday, this exchange ratio is the equivalent of $9.99 per Northwest common share.
Delta shares closed down 2.1 percent at $7.99 on Wednesday on the New York Stock Exchange, while Northwest finished 0.6 percent higher at $9.90.

Government approval of the deal comes as airline finances begin to improve with fuel prices falling sharply off record highs. But carriers are now cutting back service to save money as travel demand softens due to economic weakness.

Northwest posted a $317 million third-quarter loss due to writedowns on its fuel hedging. Without the adjustment, the company earned $93 million and beat Wall Street share price estimates. Delta's third-quarter loss was $50 million.

(Additional reporting by Diane Bartz, Randall Mikkelsen and Kyle Peterson in Chicago; Editing by Gary Hill)

US Airways, AirTran and JetBlue report steep losses
By Christopher Hinton, MarketWatch
Last update: 4:46 p.m. EDT Oct. 23, 2008

NEW YORK (MarketWatch) - Fuel costs and non-cash charges related to its hedging program helped push US Airways into a significant third-quarter loss.

The Tempe, Ariz., legacy carrier wasn't alone. Also reporting swings to quarterly losses Thursday were low-cost carriers JetBlue Airways Corp and AirTran Holdings.

The smallest of the six so-called legacy carriers, said it swung quarterly loss of $689 million, or $8.45 a share, from a gain of $177 million, or $1.87 a share, in the year-ago period.
Total operating revenues rose 7.4% to $3.26 billion from $2.13 billion, while passenger-unit revenue jumped 4.6% to 12.71 cents.

Excluding items, the airline said it would have lost $2.35 a share. Analysts polled by FactSet Research expected, on average, a loss of $2.30 a share.

Shares of US Airways plunged nearly 16% to close at $7.14, along with the broader sector as investors brace for a possible oil-production cut among OPEC members. The stock hit its lowest point on record at $1.45 when oil hit $147 a barrel in July.

US Airways' total fuel bill in the quarter rose 60% to $1.11 billion due to those record oil prices. Since then prices have crashed to below $70, resulting in significant mark downs for the airline's fuel hedging program that's meant to buffer higher oil prices.

It's a scenario felt across the industry as the world's oil and jet fuel market remain volatile. Over the last two weeks, Northwest Airlines Southwest Airlines Co.
all reported losses due to the sharp rise and then falloff in oil prices.

Still, falling oil prices and steep seat-capacity cuts are expected to benefit the industry next year, and US Airways said Thursday its expects 2009 a "much better" year for the company as well.

Further, the carrier said it secured an additional $950 million in financing.
AirTran and JetBlue also report quarterly losses on fuel

Along with US Airways, JetBlue and AirTran were also predicting clear skies ahead.
"The great industry guide-up continues, with AirTran and JetBlue adding their voices to the chorus of airlines this season painting a brighter view of the fourth quarter and beyond," said J.P. Morgan analyst Jamie Baker in a note to investors.

AirTran Holdings said it swung to a third-quarter loss of $107.1 million, or 91 cents a share, compared to a profit of $10.6 million, or 11 cents a share, in the year-ago period.
The Orlando, Fla., airline said revenue rose 11% to $673.3 million.
Analysts polled by FactSet expected, on average, a loss of 41 cents a share on sales of $671.1 million.

The company cited record-high fuel costs, which accounted for more than 50% of its expenses for the quarter, as a significant contributor to the loss.

Downgrading the company Thursday was Standard & Poor's Equity Research, saying the carrier's wider-than expected loss raises concern over its financial position. Further, the AirTran is more exposed to leisure and short-haul markets, which are likely to fare worse in a sustained downturn.

In an interview with MarketWatch, Chief Financial Officer Arne Haak said passenger numbers has slowed down a "little bit" for October, and for the first week of November. December so far looks "pretty good," he said.

Nonetheless, S&P cut its rating to hold from buy, with a 12-month price target of $4, down from $5.50. Shares of AirTran fell 7.2% to close at $3.20.

Meanwhile, JetBlue ( said it lost $4 million, or 2 cents a share, in the third-quarter. In the same period a year ago, the Forest Hills, N.Y., carrier earned $23 million, or 12 cents a share.
Operating revenue for the quarter totaled $902 million, up 17.9%.

Analysts polled by FactSet Research estimated, on average, a loss of 5 cents a share and sales of $896 million.

In the near term, JetBlue said it sees continued strength in bookings.

In an investor, note, J.P. Morgan upgraded the low-cost carrier to overweight from neutral.
"JetBlue remains one of the least-liked large jet operators, and has materially lagged the sector's recent sprint to the upside," the research firm said in a note. "In light of a significantly boosted 2009 outlook and continued liquidity improvements, we suggest investors focus on this laggard."
Shares of JetBlue bounced back with the broader market to end up 1 cent at $5.02.

Christopher Hinton is a reporter for MarketWatch based in New York.

World's Largest Airliner Lands at LAX
Monday, March 19, 2007 6:23 PM
Airbus A380 Will Undergo Tests

LOS ANGELES, Mar. 19, 2007 -- The world's largest airliner made its West Coast debut today, touching down at Los Angeles International Airport to complete its bicoastal American unveiling.
The massive Airbus A380 descended out of a dank, gray sky and made a picture-perfect landing just before 9:30 a.m. as spectators cheered from both sides of the airport.

About 15 minutes earlier, an A380 touched down on the other side of the country, at New York's John F. Kennedy International Airport.

The A380, which burns about one gallon of gas per passenger every 80 miles and can fly some 8,000 nautical miles, can seat as many as 550 passengers. Airbus has 166 orders from 15 airlines for the new plane, which has already made tests flights in Europe and to Asia.

The Los Angeles flight, operated by Australian airline Qantas, was devoid of passengers and crew, save for those in the cockpit.

Toulouse, France-based Airbus said that the plane will undergo tests at LAX, including airfield maneuvers, docking at the terminal gate and ground and gate handling exercises.

The New York flight carried 550 people, including four pilots, four Airbus crew members, 23 Lufthansa cabin crew and 519 passengers, mostly Airbus and Lufthansa employees along with some reporters.

The flight was operating just as if it were a commercial trek, with full dining and entertainment services.

Los Angeles officials fought hard to host the A380's inaugural landing, and wrote a letter to Airbus earlier this year urging executives to reconsider plans for an initial landing only in New York. Los Angeles officials contended Airbus was reneging on a promise to make the first U.S. stop in Los Angeles, which kept its word to speed up construction of new $9 million gate for the giant jet. Airbus relented just three weeks ago.

Los Angeles' airport agency ultimately plans to spend about $121 million to prepare for the A380, and has already written checks for about $50 million to improve runway and taxiway intersections. LAX, the fifth-busiest airport worldwide, is expected to be the first U.S. destination for the A380 when it enters commercial service.

(Copyright ©2008 by The Associated Press. All Rights Reserved.)

Airlines Who Have Departed For The Last Time

AMR Places Big Order for New Jets

AP

American Airlines to buy Boeing 787s

Wednesday October 15, 9:30 pm ET By David Koenig, AP Business Writer

American Airlines to buy new Boeing 787s to help make fleet more fuel-efficient

DALLAS (AP) -- American Airlines, suffering through one of the worst slumps to hit the aviation industry, is splurging on 42 new jets that have never flown a single paying passenger yet and come with a total sticker price of about $8 billion.

American, the nation's largest airline, said it also took rights to buy up to 58 more of the Boeing 787-9 aircraft.

Officials at American acknowledge that Wednesday's announcement is a bold move -- and a bit contrarian.

They are betting that the airline industry will be looking a lot better when the planes are ready for delivery, starting in 2012 and running through 2018.

"We've been criticized before for buying airplanes at the peak of the market only to have them delivered in the valley," said Daniel Garton, executive vice president of American parent AMR Corp. "Maybe this time we'll get the timing right."

Garton even compared American's move to the strategy of value investors such as Warren Buffett -- buy when everyone else is running from the market.

American also had important operational reasons for ordering the Boeing 787, which is to feature a fuselage made of new lightweight material instead of the traditional aluminum skin.

American has 150 wide-body jets that are used heavily on international routes. Many of

them are nearing retirement age. At a minimum, the 787s would be replacements for older planes that burn 20 percent more fuel.

That's a major consideration for an airline that spent $2.72 billion on fuel in the July-to-September period.

The new planes could even carry American's hopes to expand its international service, which has held up much better than domestic service in the current slump. The 787 is designed to carry up to 290 passengers and have a range of up to 8,500 nautical miles.

International routes are among American's most profitable, and they could get another boost if federal regulators grant American's wish for an antitrust exemption to expand its partnership with British Airways. Such approval would let American, BA and Iberia work together in setting prices and schedules on trans-Atlantic flights.

AMR Chairman and Chief Executive Gerard Arpey said the new plane represented a prudent investment for the long haul. It will reduce fuel and maintenance costs, and cut greenhouse gas emissions -- airlines may eventually face payments for those emissions.

Without discussing details, Arpey said the deal had "flexibility" built in to let American manage its fleet replacement and growth.

The order would be American's second big move to upgrade its fleet, among the oldest for U.S. carriers. The Fort Worth-based airline has already announced it will take delivery of 76 Boeing 737-800 aircraft in 2009 and 2010 to replace gas-guzzling MD-80s, which are used heavily on domestic routes.

AMR reported Wednesday that it had an operating loss of $360 million in the third quarter. That came on top of more than $1.7 billion in losses in the first half of the year. AMR has $15.4 billion in total debt -- $10.7 billion if you give the company credit for its cash and short-term investments.

So how will it afford planes that are worth around $8 billion, according to list prices? (Airlines usually get discounts, particularly on big orders, but American declined to give financial terms of the Boeing deal.)

It plans to borrow.

"We're pretty confident that we'll be able to find financing," Garton said in an interview.
American just completed lining up financing for 20 Boeing 737s that it had previously ordered.
The 787 purchase order is contingent on American's pilots going along. The union and management have clashed on many other issues, but Arpey said he believes the two sides can agree on how much pilots will earn for flying the new plane.

The order was welcome news at Boeing Co. facilities around Seattle. It could be Boeing's biggest plum of the year in dollar value, likely trumping Air China's announcement in July that it will buy 45 planes with a list price of $6.3 billion.

The orders indicate that Boeing's airline customers are not spooked by the machinists' strike that has closed Boeing's commercial airplane factories since Sept. 6. Some airlines are still making long-term fleet purchases.

The strike, however, will likely delay the first test flight of the 787, which had been planned for later this year. The production schedule has already been pushed back several times because of other glitches.

The first airline scheduled to receive the plane, All Nippon Airways Co., said late last month that it expected to get its first one next August.

**************************************

From "The Street.com" below

Deal

is contingent on American reaching an agreement with its pilots to fly the aircraft. 10/15/08 - 05:02 PM EDT

Ted Reed

Despite a volatile economy and a $360 million third-quarter adjusted loss, American Airlines parent AMR (AMR Quote - Cramer on AMR - Stock Picks) said Wednesday it has ordered 42 Boeing (BA Quote - Cramer on BA - Stock Picks) 787 jets and has options for 58 more. "This is a difficult decision in these incredibly volatile times, but it is fundamental to the long-term strategy of the company, and we felt it was a wise decision to make," said Dan Garton, executive vice president for marketing, in an interview. "

Airlines are often criticized for buying at the peak and having the airplanes delivered four years later, for buying when things are great and then having the [deliveries] when things are bad," he said. The order has a book value of $20 billion, but airlines invariably pay less than book value for new aircraft. Garton said American is not concerned about financing, since the first delivery is four years off. "It's very likely there will be some slippage to the original schedule," given delays in the 787 program and the ongoing strike at Boeing.

While it's rare for a carrier to acknowledge that an order might not be on schedule the day it's placed, Garton noted that "it's not ideal to enter into an agreement when you have uncertainty, but it's a reality we have to face." The planes would replace aging widebodies in the American fleet, including Airbus 300s, as well as 767s and 777s.

The first 42 deliveries are scheduled for 2012 to 2018, with the 58 option deliveries tentatively planned for 2015 to 2020. The deal is contingent on American reaching an agreement with its pilots to fly the aircraft. Meanwhile, AMR said its third-quarter loss resulted primarily from a fuel bill that was $1.1 billion higher than in the same quarter a year earlier. The loss was equivalent to $1.39 a share. Analysts surveyed by Thomson Financial had estimated a loss of $1.50. Revenue rose 8% to $6.4 billion, slightly ahead of expectations.

AMR to slash more capacity in 2009
Airline also sets plans to take delivery of more fuel-efficient aircraft
By Christopher Hinton, MarketWatch
Last update: 4:40 p.m. EDT Oct. 15, 2008

NEW YORK (MarketWatch) -- AMR Corp., the largest U.S. airline and owner of American Airlines, said Wednesday that it would slash more of its seat capacity next year to offset an anticipated economic recession.
The Fort Worth, Texas, airline also said it intends to take delivery of up to 100 more fuel-efficient aircraft beginning in 2012.

For the fourth quarter, AMR expects to pull down about 8.3% of its mainline capacity, with domestic capacity expected to decline 12.5% and international capacity to fall less than 1% compared to last year.

AMR said it expects its mainline capacity to decline 3.7% and plans to cut 9% next year, including a 14% reduction of mainline domestic capacity.

"These reductions will help to offset weakness in the revenue environment associated with a recessionary economy and... we think it makes sense to revise our capacity downward further for next year while at the same time accelerating our fleet replacement with more fuel-efficient aircraft," said Chief Financial Officer Thomas Horton on a post-earnings call.

In a note to investors, J.P. Morgan analyst Jamie Baker said that next year's capacity-reduction guidance is consistent with the airline's prior forecast, and said the industry in general has yet to undertake the unprecedented cuts needed to reflect the recent "global malaise."

However, Baker noted, "AMR guidance, while characteristically devoid of demand commentary, portends a fourth-quarter outcome modestly ahead of both our own forecast and that of consensus."

Shares of AMR slipped once cent to close at $8.78.

For the recent quarter, the carrier reported a profit of $45 million, or 17 cents a share, down from $175 million, or 61 cents a share, in the year-ago third quarter.

Excluding one-time items, such as a $432 million gain from the sale of American Beacon Advisors and a $27 million charge related to capacity reductions, AMR would have posted a third-quarter loss of $360 million, or $1.39 a share.

Analysts polled by FactSet Research had expected, on average, a loss of $1.44 a share.
Quarterly operating revenue rose 8% to $6.42 billion from $5.95 billion, helped by higher fares and new passenger fees.

AMR said it would buy up to 100 more fuel-efficient Boeing 787 Dreamliner aircraft beginning in 2012. The company intends to buy 42 Boeing 787s and has the rights to add 58 more starting in 2015.

Dreamliner is its next-generation, wide-body aircraft, built with lighter materials and more efficient engines to help reduce fuel burn.

"While fuel prices have fallen from record-high levels a few months ago, the economic uncertainty, and what that might mean for travel demand, is a serious concern," said AMR's Chief Executive Gerard Arpey. "It would also be shortsighted to conclude that fuel prices, which remain volatile, are no longer a challenge."

For the fourth quarter, AMR said it was planning for an average system price of $2.76 a gallon. The company has 38% of its anticipated jet fuel consumption hedged at an average price of $3.33 a gallon.

AMR paid $3.57 a gallon on average in the third quarter, up 65% from $2.17 in the same quarter last year.

The total fuel bill for the airline increased 56% to $2.72 billion.

AMR said its end-of-the-quarter cash balance was $4.62 billion, compared to $5.5 billion at the end of the second quarter.

United Airlines to lay off 414 mechanics

Wednesday October 8, 4:14 pm ET

United Airlines laying off 414 mechanics as part of previously announced cuts
MINNEAPOLIS (AP) -- United Airlines said on Wednesday it will lay off 414 mechanics at its San Francisco maintenance base.

The layoffs are part of 7,000 job eliminations announced previously by the Chicago-based carrier as it reduces its flying and eliminates the Boeing 737 from its fleet.

United spokeswoman Megan McCarthy said the notices went to the workers on Sept. 29, and the layoffs will take effect on Dec. 7.

"We feel it's reprehensible they're laying off people while work is being outsourced overseas where there are less-qualified mechanics working on the planes," said Paul Molenberg, a spokesman for Teamsters Local 856 in San Bruno, Calif., which represents the laid-off workers.

Every major work group at United is shrinking. Enough flight attendants volunteered for furloughs that it avoided involuntary layoffs, allowing it to reduce the cabin staff by 1,550 positions. McCarthy said efforts to reduce 950 pilot positions will continue into next year, and cuts of as many as 1,600 managers are continuing, too, she said.

That leaves the Teamsters-represented mechanics, as well as baggage handlers and customer service agents represented by the International Association of Machinists and Aerospace Workers. McCarthy said totals for those groups have not been announced.
United shares rose 14 cents, or 2.8 percent, to $5.16 in afternoon trading.

October 8, 2008, 4:14 pm
Air France Ends an ‘Open Skies’ Experiment
Posted by Scott McCartney

Air France is dropping its Los Angeles-London non-stop flight, taking with it some of the cheapest tickets available to London.

It’s rare for airlines to fly internationally without at least beginning or ending the flight at one of their hub airports. You usually need connecting passengers to fill big jets. But Los Angeles-London was an experiment for Air France, a trip the airline inaugurated with the passage of the Open Skies treaty between the U.S. and the European Union. Air France flies from Los Angeles to Paris, and decided to see if Los Angeles and London were big enough markets to support a once-a-day trip.

But there’s tough competition on this route from British Airways, Virgin Atlantic and American Airlines, all carriers with bigger bases of frequent flier program members and corporations with travel deals in either city. (Some cynically saw the flight as retaliation by Air France against British Airways for launching its Open Skies treaty experiment, the airline it calls “Open Skies,” from Paris.)

Just look at prices for a trip next week to see how poorly Air France is faring.

For a one-week trip leaving Monday, Air France offers a coach price of $954 including taxes and fees, according to Orbitz.com. That’s cheaper than flights from New York to London on the same dates, even though Los Angeles is obviously a longer trip. And it’s a whole lot cheaper than an Air France ticket from Los Angeles to Paris on the same dates: $2,897. Other airlines seem able to ignore Air France, too, in the Los Angeles-London market. British Airways’ cheapest Los Angeles-London fare for the same dates was $3,102, according to Orbitz.

(Travel tip: If you’re going to Paris from Los Angeles anytime soon, take the London flight and book a Chunnel ticket - you’ll save big bucks. Heck, if you’re going to London from just about anywhere in the U.S., think about going to LA and using the cheap Air France fare to get you across the Atlantic.)

The lack of passengers means Air France is surrendering and shifting the flight in its winter schedule to New York-London, where it will offer one daily non-stop.

(The L.A.-London flight will halt on Nov. 6. And the London-JFK route is expected to start in the summer of 2009.)

Its SkyTeam partner, Delta Air Lines, has two flights a day. New York-London is one of the most competitive markets in the world, with multiple major players and often competitive fares. It’s still an experiment for Air France to see whether a French airline can build enough traffic in the U.S. and U.K. without a hub.

With the move, pricing will become rational again. Los Angeles-London tickets will actually be more expensive than New York-London. At least until another airline starts experimenting

AP

American Airlines flight attendants to picket

Wednesday October 8, 3:50 pm ET

American Airlines flight attendants to picket at airports Friday over working conditions
FORT WORTH, Texas (AP) -- American Airlines flight attendants will protest poor working conditions by picketing at four airports on Friday, according to union officials.

The Association of Professional Flight Attendants said Wednesday that members face increasing challenges dealing with reduced flight schedules, crowded planes and collecting charges for food and beverages.

The union, which is seeking pay raises from labor negotiations with American, said attendants will picket at Dallas-Fort Worth International Airport, Los Angeles International Airport, New York's LaGuardia Airport and Miami International Airport.

American, the nation's largest airline, is a unit of Fort Worth-based AMR Corp. The union said it represents more than 18,000 attendants at American.

Shares of American Airlines parent AMR Corp. fell 20 cents, or 3 percent, to $6.55 in afternoon trading.

Sun Country files for bankruptcy (Sun Country is a sweat shop...Ed.)

By Shawn Langlois & Sue Chang, MarketWatch
Posted 6:11 p.m. EDT Oct. 6, 2008

SAN FRANCISCO (MarketWatch) -- Cash-strapped Sun Country Airlines filed for bankruptcy protection Monday after its owner of two years, Thomas Petters, was arrested last week for wire fraud, money laundering and obstruction of justice, The Wall Street Journal reported in its online edition.

Sun Country had run into cash problems after Petters became the target of a federal investigation for allegedly defrauding hedge funds, the newspaper said. He had resigned as chairman and chief executive of the company earlier last week, the report said.

Petters, through his company Petters Group Worldwide, bought Sun Country two years ago, adding to his portfolio of investments, which also include Fingerhut and Polaroid.
The Mendota Heights, Minn.-based low-cost carrier -- the second biggest in the state after Northwest Airlines, said it will continue to operate and doesn't expect the filing to result in any disruptions.

Sun Country, which had previously filed for bankruptcy in 2002 before emerging with new ownership, had been looking to get a short-term loan from its owner to help get it through a slow fall season of travel and into winter, when travel generally picks up.

But Stan Gadek, the airline's CEO, said last week that he needed to distance the company, which is not being investigated, from Petters, who allegedly fleeced investors for personal enrichment and to pay off other lenders.