Wednesday, December 03, 2008

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

Tuesday, December 02, 2008

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.