Southwest’s Bid for Frontier Is Bad News for United
By Scott McCartney
It’s hard to run a huge hub at an airport where Southwest Airlines becomes a strong number two in market share. So the biggest impact of Southwest’s potential bid to buy bankrupt Frontier Airlines may fall on United Airlines.
If Southwest is successful in acquiring Frontier in bankruptcy court, the two airlines together will have about 30% of the market at Denver International Airport, with UAL Corp.’s United hanging on to 50%. But United is shrinking, and struggling financially.
A bigger fight in Denver with a stronger number-two airline could well weaken United. It might not be long before Southwest could overtake United as the largest carrier in Denver.
Southwest has always been a shrewd, opportunistic player. When Midway Airlines shut down years back, Southwest dispatched a virtual SWAT team to the Chicago airport to move in quickly.
Southwest jump-started its growth in the west by acquiring Morris Air, and took out a potential irritating competitor in Texas by buying Muse Air. Buying assets of bankrupt ATA Airlines gave Southwest slots and gates at important East Coast airports–plus more gates at Midway–at fire-sale prices.
The company has had a keen sense at pegging weak carriers not up for big battles to defend markets (viz. US Airways in Baltimore). Southwest has eaten away at entrenched hubs, weakening Trans World Airlines in St. Louis, for example, and Delta Air Lines in Salt Lake City.
As Southwest has grown at Los Angeles International Airport, United has shrunk, from some 240 daily flights to fewer than 100 departures a day. Airline hubs can better compete when Southwest is at a secondary airport, like Houston, Dallas, San Francisco and Chicago. But when the competition is head-to-head, it’s a lot tougher on incumbents.
Bob Jordan, executive vice president for strategy and planning at Southwest, notes that Southwest’s growth has already been strong in Denver. The airline started flying to DIA in January 2006 and in three-and-a-half years has grown to 113 flights a day. But combining with Frontier takes that operation to a whole other level.
“We’re in this to win,” Mr. Jordan said in an interview.
Be careful about betting against them.
Friday, July 31, 2009
Thursday, July 30, 2009
Southwest makes bid to buy Frontier Airlines
Southwest makes bid to buy Frontier Airlines
By DAVID KOENIG, AP Airlines Writer
DALLAS – Southwest Airlines Co. is seeking to trump a rival bid and acquire Frontier Airlines, a Denver-based carrier operating under bankruptcy protection.A court had already approved the sale of Frontier Airlines Holdings Inc. to the parent of Republic Airways for $108.8 million, but that deal can be nixed if a better offer comes along.
Dallas-based Southwest said it submitted a nonbinding bid of $113.6 million. Southwest hopes that making the bid will allow it to talk with Frontier and get information to help shape its final proposal.
Southwest said it faces an Aug. 10 deadline for submitting a binding bid. If there is more than one qualified bidder, an auction will be held the following day."We are excited about the opportunity to submit a bid," Southwest CEO Gary Kelly said in a statement. "We see a strong fit between our company cultures, a mutual commitment to high quality customer Service, and similar entrepreneurial roots.
"Southwest recently went back into the Denver market, where it competes against Frontier and United.Shares of Southwest rose sharply on the news. They were up 33 cents, or 4.4 percent, to $7.84 in afternoon trading.
Southwest makes bid to buy Frontier Airlines
By DAVID KOENIG, AP Airlines Writer
DALLAS – Southwest Airlines Co. is seeking to trump a rival bid and acquire Frontier Airlines, a Denver-based carrier operating under bankruptcy protection.A court had already approved the sale of Frontier Airlines Holdings Inc. to the parent of Republic Airways for $108.8 million, but that deal can be nixed if a better offer comes along.
Dallas-based Southwest said it submitted a nonbinding bid of $113.6 million. Southwest hopes that making the bid will allow it to talk with Frontier and get information to help shape its final proposal.
Southwest said it faces an Aug. 10 deadline for submitting a binding bid. If there is more than one qualified bidder, an auction will be held the following day."We are excited about the opportunity to submit a bid," Southwest CEO Gary Kelly said in a statement. "We see a strong fit between our company cultures, a mutual commitment to high quality customer Service, and similar entrepreneurial roots.
"Southwest recently went back into the Denver market, where it competes against Frontier and United.Shares of Southwest rose sharply on the news. They were up 33 cents, or 4.4 percent, to $7.84 in afternoon trading.
Inside a flight attendant's not-so-glam life
Story Highlights
Story Highlights
- Once considered glamorous, job now involves long hours, crowded planes
- Cost-cutting measures mean fewer flight attendants taking care of more passengers
- Flight attendants often battle hunger as airlines eliminate meals on shorter flights
- They're not paid for one of the hardest parts of their job: the boarding process
By A. Pawlowski
(CNN) -- As you encounter flights that leave you frustrated, hungry and tired this summer vacation season, chances are the person who greets you with a smile when you come on board could be feeling the same way.
A flight attendant serves beverages to passengers. A duty day can last up to 14 hours on domestic routes.
The glamour has long faded from the job of a flight attendant, but the occupation still captures the imagination of a public fascinated by the constant travel and work above the clouds.
Still, many people know little about the realities of a flight attendant's life, changed by the September 11, 2001, terrorist attacks, the efforts of a troubled airline industry to stay afloat and the recent economic downturn.
"When my mom was a stewardess in the 1950s, they wore white gloves and they learned to serve lobster thermidor table-side," said Rene Foss, a flight attendant for 25 years and the spokeswoman for the Association of Flight Attendants.
"Instead of wearing white gloves, I'm wearing rubber gloves; and instead of learning to serve lobster thermidor, I'm learning to put handcuffs on passengers."
The chance to see the world while offering an important service still lures many men and women to the job, and the flight attendants who spoke with CNN said they enjoy what they do. But they also described work that can be draining and sometimes given little respect.
Long days
Many flights are now full as airlines park planes to save money, leaving passengers spread over fewer aircraft in the system. At the same time, layoffs, furloughs and other cost-cutting measures mean fewer flight attendants taking care of more people on board.
Meanwhile, pay cuts are forcing many to work more hours to offset the difference.
"I made more money in 1998 than I make today," said Kim Kaswinkel, a flight attendant for 22 years who holds a legislative committee chair position at the Association of Flight Attendants.
Flying realities
• About 99,000 flight attendants work in the United States
• Their mean annual wage is $39,840
• The Atlanta area has the highest concentration of workers in this occupation
• Major airlines are required by law to provide flight attendants for the safety and security of the traveling public
• Flight attendants must be certified by the FAA Source: U.S. Bureau of Labor Statistics
The days can be long -- up to 14 hours of duty time on domestic routes and even longer on international trips -- and the layovers short, sometimes shorter than the workdays.
Flight attendants say they often battle hunger as airlines eliminate meals for passengers on shorter flights, which also means fewer food options for them.
"There are days, specifically domestically, you go 7, 8, 9 hours and have not gotten anything to eat because there's no food on the airplane; and when they're trying to turn these airplanes around quickly, there's no time to run off and get food," Kaswinkel said.
She carries protein bars and apples with her to help fend off hunger.
Flight attendants fly 70 to 100 hours a month, but they're only paid when a plane's engines are running, Foss said. So they receive no compensation for one of the hardest parts of their job: the boarding process.
It's now more aggravating than ever as passengers bring more carry-on bags to avoid paying fees for checked luggage, sometimes resulting in confrontations and delays when there is no space to accommodate them. Kaswinkel called the carry-on situation "out of control."
Frustrated passengers often take it out on the crew and sometimes each other. As she tries to enforce rules and resolve conflicts, Foss said she sometimes feels like a police officer, a baby sitter and a referee.
Flight attendants say they try to create a friendly atmosphere, but sometimes get little response.
"A lot of passengers complain that flight attendants don't smile, but I can't tell you how many times I've stood at the boarding door with a smile on my face greeting people and they will just ignore me," said Heather Poole, a flight attendant for 14 years who writes for the travel Web site Gadling.com.
'Cart toe'
Seniority determines many aspects of a flight attendant's life, including what routes they fly and whether they work in economy, business or first class. Surprisingly, some flight attendants consider economy easier even though they serve many more passengers. Coach usually requires only a drink service, while flight attendants in the other cabins work almost nonstop serving meals and drinks.
Shoes wear out quickly at this pace. Poole, who mostly works in business class, says she buys a new pair every three months. A particular problem is "cart toe," leather that wears out on the nose of the shoe where she pushes the brakes on the carts that hold drinks and meals.
There are many tales of strange passengers. Foss recalled waiting on the tarmac to take off from Tokyo, Japan, when a woman suddenly took off all her clothes and began running up and down the aisles. The plane had to return to the gate, where police were waiting to remove her.
Kaswinkel is amazed that people still try to smoke on planes and recalled a recent incident in which a passenger offered her $5 to not write her a warning after she caught her sneaking a cigarette in the lavatory.
Poole still remembers the passenger who removed a fire extinguisher from the plane to take as a souvenir.
With all the travel they do, you might wonder how flight attendants choose to spend their vacations. Some continue to fly even in their free time, while others cherish "staycations" or find ways to globe-trot without getting on a plane.
Poole was a frequent traveler until she got married and had a child. Now that her son is 3, she's ready to start jetting off with him on vacation.
Foss considers it a joy to sleep in the same bed for a few nights, but also likes train travel.
Kaswinkel's ideal vacation after being away from home for 16 to 18 days a month is also staying put. But that's not fun for her family, so she does travel occasionally during her time off.
"We enjoy cruising the most because I can relax and do nothing by the pool with a frozen drink, while they go tour the destination ports of call. It's a great compromise," Kaswinkel said.
Sunday, July 26, 2009
United Airlines Shows How Not to Run a Business
by: Shaun Rein July 26, 2009
This commentary originally appeared in Forbes
As the world now knows, last year a guitarist named Dave Carroll was sitting in a window seat on a United Airlines (UAUA) plane at O'Hare airport in Chicago when he looked out and saw baggage handlers hurling guitar cases through the air. He pointed it out to flight attendants; they responded with indifference. When he arrived in Nebraska, he found that his instrument had been smashed. After months of complaining to the airline and getting no response, he wrote and performed a song, "United Breaks Guitars," and posted it on YouTube. It was viewed more than 3 million times in its first 10 days.
Across the world in China, Wang Jianshuo, a famed blogger, posted about a United flight he took to the U.S. A surly flight attendant refused to help an elderly passenger stow his carry-on luggage. The audio on the movie channels didn't work. The overhead lights turned off and on the entire trip. His return trip was worse: The plane sat on the tarmac for three hours and then was cancelled until the next day because of a fuel leak.
How does a company perform so badly? United's stock price was tottering even before the financial crisis. Now that even stellar airlines like Southwest suffering, a weak player like United seems doomed to follow inGeneral Motors' and Circuit City's footsteps unless it makes major changes.
This week, United announced a quarterly profit of $28 million, but that included fuel hedges and other accounting gains, without which it lost $323 million. It also named a new president. The airline's missteps over the past decade provide a case study of what not to do when running a company.
Here are three key lessons we all can learn from United.
Create Brand Loyalty, Not Simply Satisfaction
It is doubtful that the millions who have watched Carroll's video or read Wang's blog will want to fly United anytime soon, unless they have no choice. That is terrible for the airline. It is fighting for every last passenger dollar, and trying to make inroads into the emerging Chinese travel market. Part of the problem is that the company, like many, makes satisfying customers part of its mission statement but fails to go nearly far enough beyond that.
Winning companies like Apple (AAPL) go past mere satisfaction to try to create true brand loyalty. Not only do loyal customers spend more, they are more likely to become brand ambassadors and bring along other customers. When everyone from the mailroom to the chief executive buys into the mantra of creating brand loyalty, the result is increased profits.
Consumers are more price sensitive in this economy, and they are trading down, but it's still a great time to capture loyalty. People don't want to waste money on brands that fail to meet their expectations. They're buying only what they trust, and they'll return to trusted brands repeatedly.
Instead of watering down its frequent flyer benefits to save costs, United should be taking the exact opposite tack. It should take a page from hotel stalwarts like Starwood and Marriott, which are offering more goodies than before to their most loyal clients. In consumer studies that my organization, China Market Research Group has conducted, we've found that the No. 1 reason people fly United regularly is because they have racked up points in United's Star Alliance loyalty program. Why would United want to disenfranchise its most loyal customers?
As consumers think harder about where to spend their money, aiming to satisfy them is not enough. Only striving to create true loyalty will work.
Don't Forget Why You're Here
Many companies forget their main purpose and become bogged down in just sustaining their operations. United forgets that it's not only selling a means of transportation that is faster than trains or cars. For vacationers, who make up most passenger traffic, it's selling dreams and memories. An airline flight is typically the first and last part of a newlywed couple's honeymoon, or a family's overseas trip in planning for years.
People remember such journeys forever. I fondly recall my own first flight on TWA when I was six years old, to Italy and Greece with my parents. Likewise, my childhood flights on Delta to see my grandmother in Florida. What United fails to get is that it is selling dreams, not just a form of transportation. Few United employees take pride in their jobs, and it shows.
One company that gets it right is Disney (DIS). A trip to Disney World is not simply an outing to an amusement park like Six Flags (SIX) or Universal Studios. It is a time when families can create memories that last a lifetime. Disney trains its employees, from the monorail drivers to the people selling fast food, to be more than just salespeople. They are weavers of dreams. That is one reason families repeatedly return to Disney World, according to research my firm has conducted with visitors from eight different countries.
Unilever (UL) got it right with its Axe deodorant. That company understands that it is not selling a way to stop sweat or to smell a little better. It's selling a way for young men to be more attractive. Axe put together a TV commercial that shows a dorky guy, who happens to use Axe, getting more glances from attractive women than Ben Affleck, the movie star. The spot uses humor to imply that you, too, can be as appealing as the Hollywood star who dated Gwyneth Paltrow and Jennifer Lopez and is married to Jennifer Garner.
To create real customer loyalty, you have to offer more than just functionality. And you have to train everyone in your organization to have the pride to sell an emotional connection, not just tools.
Don't Forget Employee Morale
United's workers have been a beleaguered group for years now. They have had their wages, pensions and benefits cut even as the chief executive officer, Glenn F. Tilton, has been paid nearly $20 million dollars over the last five years (despite United's stock dropping 43% during his tenure). Does that seem fair?
Employee morale has gone into the gutter. Unhappy workers mean terrible customer service--as Dave Carroll and Wang Jianshuo and millions of their followers know. The company may have no choice but to lay off workers and reduce benefits in the downturn, but it has to do so with respect and with effective communication to the rank and file about why such pain is necessary. Every company everywhere must have an effective strategy for ensuring that its remaining employees don't lose hope or happiness, just as it must maintain its focus on creating brand loyalty.
One thing to do is to make sure that all employees share the pain equally. If there are big cutbacks anywhere, senior management should take substantial pay reductions and limits on its privileges, such as fewer business class flights and trips on private jets. The troops look to senior management for direction. If those troops see the top brass caring for itself at the expense of others, the spirit of the entire organization erodes.
In today's economy you can't get by on decent prices or acceptable service. You have to stand out and win the hearts of your customers. To do that you have to go beyond satisfaction to true loyalty. You have to provide a compelling reason, beyond basic service and price, for consumers to choose you. And your organization must be unified in that mission. Otherwise, you may be the next to follow GM into Chapter 11.
by: Shaun Rein July 26, 2009
This commentary originally appeared in Forbes
As the world now knows, last year a guitarist named Dave Carroll was sitting in a window seat on a United Airlines (UAUA) plane at O'Hare airport in Chicago when he looked out and saw baggage handlers hurling guitar cases through the air. He pointed it out to flight attendants; they responded with indifference. When he arrived in Nebraska, he found that his instrument had been smashed. After months of complaining to the airline and getting no response, he wrote and performed a song, "United Breaks Guitars," and posted it on YouTube. It was viewed more than 3 million times in its first 10 days.
Across the world in China, Wang Jianshuo, a famed blogger, posted about a United flight he took to the U.S. A surly flight attendant refused to help an elderly passenger stow his carry-on luggage. The audio on the movie channels didn't work. The overhead lights turned off and on the entire trip. His return trip was worse: The plane sat on the tarmac for three hours and then was cancelled until the next day because of a fuel leak.
How does a company perform so badly? United's stock price was tottering even before the financial crisis. Now that even stellar airlines like Southwest suffering, a weak player like United seems doomed to follow inGeneral Motors' and Circuit City's footsteps unless it makes major changes.
This week, United announced a quarterly profit of $28 million, but that included fuel hedges and other accounting gains, without which it lost $323 million. It also named a new president. The airline's missteps over the past decade provide a case study of what not to do when running a company.
Here are three key lessons we all can learn from United.
Create Brand Loyalty, Not Simply Satisfaction
It is doubtful that the millions who have watched Carroll's video or read Wang's blog will want to fly United anytime soon, unless they have no choice. That is terrible for the airline. It is fighting for every last passenger dollar, and trying to make inroads into the emerging Chinese travel market. Part of the problem is that the company, like many, makes satisfying customers part of its mission statement but fails to go nearly far enough beyond that.
Winning companies like Apple (AAPL) go past mere satisfaction to try to create true brand loyalty. Not only do loyal customers spend more, they are more likely to become brand ambassadors and bring along other customers. When everyone from the mailroom to the chief executive buys into the mantra of creating brand loyalty, the result is increased profits.
Consumers are more price sensitive in this economy, and they are trading down, but it's still a great time to capture loyalty. People don't want to waste money on brands that fail to meet their expectations. They're buying only what they trust, and they'll return to trusted brands repeatedly.
Instead of watering down its frequent flyer benefits to save costs, United should be taking the exact opposite tack. It should take a page from hotel stalwarts like Starwood and Marriott, which are offering more goodies than before to their most loyal clients. In consumer studies that my organization, China Market Research Group has conducted, we've found that the No. 1 reason people fly United regularly is because they have racked up points in United's Star Alliance loyalty program. Why would United want to disenfranchise its most loyal customers?
As consumers think harder about where to spend their money, aiming to satisfy them is not enough. Only striving to create true loyalty will work.
Don't Forget Why You're Here
Many companies forget their main purpose and become bogged down in just sustaining their operations. United forgets that it's not only selling a means of transportation that is faster than trains or cars. For vacationers, who make up most passenger traffic, it's selling dreams and memories. An airline flight is typically the first and last part of a newlywed couple's honeymoon, or a family's overseas trip in planning for years.
People remember such journeys forever. I fondly recall my own first flight on TWA when I was six years old, to Italy and Greece with my parents. Likewise, my childhood flights on Delta to see my grandmother in Florida. What United fails to get is that it is selling dreams, not just a form of transportation. Few United employees take pride in their jobs, and it shows.
One company that gets it right is Disney (DIS). A trip to Disney World is not simply an outing to an amusement park like Six Flags (SIX) or Universal Studios. It is a time when families can create memories that last a lifetime. Disney trains its employees, from the monorail drivers to the people selling fast food, to be more than just salespeople. They are weavers of dreams. That is one reason families repeatedly return to Disney World, according to research my firm has conducted with visitors from eight different countries.
Unilever (UL) got it right with its Axe deodorant. That company understands that it is not selling a way to stop sweat or to smell a little better. It's selling a way for young men to be more attractive. Axe put together a TV commercial that shows a dorky guy, who happens to use Axe, getting more glances from attractive women than Ben Affleck, the movie star. The spot uses humor to imply that you, too, can be as appealing as the Hollywood star who dated Gwyneth Paltrow and Jennifer Lopez and is married to Jennifer Garner.
To create real customer loyalty, you have to offer more than just functionality. And you have to train everyone in your organization to have the pride to sell an emotional connection, not just tools.
Don't Forget Employee Morale
United's workers have been a beleaguered group for years now. They have had their wages, pensions and benefits cut even as the chief executive officer, Glenn F. Tilton, has been paid nearly $20 million dollars over the last five years (despite United's stock dropping 43% during his tenure). Does that seem fair?
Employee morale has gone into the gutter. Unhappy workers mean terrible customer service--as Dave Carroll and Wang Jianshuo and millions of their followers know. The company may have no choice but to lay off workers and reduce benefits in the downturn, but it has to do so with respect and with effective communication to the rank and file about why such pain is necessary. Every company everywhere must have an effective strategy for ensuring that its remaining employees don't lose hope or happiness, just as it must maintain its focus on creating brand loyalty.
One thing to do is to make sure that all employees share the pain equally. If there are big cutbacks anywhere, senior management should take substantial pay reductions and limits on its privileges, such as fewer business class flights and trips on private jets. The troops look to senior management for direction. If those troops see the top brass caring for itself at the expense of others, the spirit of the entire organization erodes.
In today's economy you can't get by on decent prices or acceptable service. You have to stand out and win the hearts of your customers. To do that you have to go beyond satisfaction to true loyalty. You have to provide a compelling reason, beyond basic service and price, for consumers to choose you. And your organization must be unified in that mission. Otherwise, you may be the next to follow GM into Chapter 11.
Sunday, July 19, 2009
Recession cuts Delta’s worldwide flight plan
Drop in international fliers revises timetable for global growth.
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, July 19, 2009
There’s nothing like a global recession to make the best-laid plans go awry.
A little over a year ago, Atlanta-based Delta Air Lines was on an international growth streak started in 2005, rapidly expanding with more flights to Africa, Europe and elsewhere around the world.
Executives had their eyes on an even bigger prize: their merger with Northwest Airlines, whose expansive Asia network, including a Tokyo hub, would fill in an area where Delta was lacking. Delta looked forward to being the No. 1 carrier to Asia and touting itself as a “truly global airline.”
Fast-forward to today. International travel is slumping —- far more than domestic travel. Asia is one of the hardest hit regions. Delta is now cutting international capacity by 15 percent.
International flights have long been cash cows, but some have become burdens to be unloaded as quickly as possible as business travelers cut back, taking with them the high-end fares that subsidize tourist-friendly discounts.
In good economic times, international markets have higher operating margins than domestic markets where airlines like Delta face heavy competition from low-cost carriers, said airline consultant Robert Mann. Now, those international margins are shrinking.
Some of the highest-profile international route cuts Delta is making are in Asia —- including a much-ballyhooed Atlanta-Shanghai route, which will be discontinued this fall. Delta is also axing service between Atlanta and Seoul; Mumbai; and Cape Town, South Africa.
“Customer demand for international travel has fallen significantly,” Chief Executive Richard Anderson and President Ed Bastian said in a joint memo to employees last month. The capacity cuts target “routes that have experienced losses in the current economic climate and with higher fuel prices.”
Other international routes being cut include Cincinnati to Frankfurt and London-Gatwick; and New York’s John F. Kennedy International to Edinburgh, Scotland.
“Business travel in general is slowing and all international destinations are just much more difficult,” said Avondale Partners analyst Bob McAdoo. “Delta and every other carrier who flies internationally is having to look at how much capacity to actually offer this year.”
Anderson and Bastian aren’t admitting defeat in their international offensive.
“In keeping with our long-term business plan, we continue to grow the global footprint that is a cornerstone of our successful strategy,” Bastian and Anderson wrote.
Though Delta is cutting international capacity and eliminating routes, it is adding some new routes in other areas.
“Having this globally-balanced international network is what gives you a hedge to economic conditions around the world,” said Delta spokesman Kent Landers.
But even if Delta is still moving forward, the strategy’s execution has involved a running series of revisions. Last October, Delta said it was continuing to expand international capacity but would trim growth plans by about 2 percentage points from its previous plan for 15 percent international growth in the fourth quarter of 2008.
By December 2008, as the economy worsened, Delta’s forecast for 2009 was for an international capacity cut of 3 percent to 5 percent. In March, the outlook worsened to a 10 percent international capacity cut for this fall. And in June, Delta revised its plans again to a 15 percent slash of international capacity.
McAdoo said he doesn’t expect Delta to abandon its international push, which was born of concern that peers such as American, United and Continental were pulling bigger shares of the high-margin international travel market.
Once the economy turns, “I imagine Delta will go back and rebuild and increase frequency in those markets where it cut capacity, and reinstate international service it had for a while before the economy fell apart,” he said.
Hartsfield-Jackson International Airport is inextricably tied with Delta and its international growth plans. Delta, which has its biggest hub at the airport, is in talks with the city over a new multiyear lease for its operations at the airport.
Hartsfield-Jackson is also building a new $1.35 billion international terminal to accommodate expected growth in international flights, particularly at Delta. The airport got city council approval this month for an $800 million bond deal to complete the terminal and plans to go into the market for financing in August.
International traffic at Hartsfield-Jackson is down about 5 percent this year.
“Taking the long view, we know this is a very good decision,” said Hartsfield-Jackson general manager Ben DeCosta. “We’re confident that the local economy will sustain and traffic will return.”
Delta said that though it is cutting back flights in some areas and downgauging to smaller aircraft in others, it is maintaining roughly the same level of about 1,000 daily departures from Hartsfield-Jackson it had a year ago. It’s unclear what effect Delta’s international slowdown could have on the plans for the international terminal.
“Maybe it’s delayed a year or two in terms of when it gets fully utilized,” McAdoo said.
Last month, as Delta executives made a presentation at an investor conference, Bastian said “we’re building a plan not anticipating any consequential recovery for the balance of this year.”
Along with the impact of the recession, Bastian said Delta also expects a $125 million to $150 million drop in revenues due to H1N1 flu concerns. “And we did see bookings in the month of May fall off in a very dramatic manner across Asia,” Bastian said.
Delta had underestimated how large the traffic drop in Asia would be. In June, Delta’s traffic in its Pacific region fell 17.3 percent —- the largest drop among its regions —- even though it had only cut flight capacity by 5.9 percent in the Pacific.
But Delta has not been alone in rushing to keep up with the fall in passenger traffic, according to the International Air Transport Association. Other airlines’ cuts have also trailed behind declines in traffic.
Benefits from lower fuel costs have been outweighed by drops in traffic and fares across the airline industry, according to the report. “The expectations reported for the next 12 months have dipped into pessimism once more,” according to IATA’s business confidence index.
Although analysts have speculated about the solvency of some airlines, Delta has been seen as stronger than some of its competitors.
That’s partly because of Delta’s moves to cut back flights amid slow demand.
“They have been far more proactive eliminating flights that are not paying for themselves,” McAdoo said.
Drop in international fliers revises timetable for global growth.
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, July 19, 2009
There’s nothing like a global recession to make the best-laid plans go awry.
A little over a year ago, Atlanta-based Delta Air Lines was on an international growth streak started in 2005, rapidly expanding with more flights to Africa, Europe and elsewhere around the world.
Executives had their eyes on an even bigger prize: their merger with Northwest Airlines, whose expansive Asia network, including a Tokyo hub, would fill in an area where Delta was lacking. Delta looked forward to being the No. 1 carrier to Asia and touting itself as a “truly global airline.”
Fast-forward to today. International travel is slumping —- far more than domestic travel. Asia is one of the hardest hit regions. Delta is now cutting international capacity by 15 percent.
International flights have long been cash cows, but some have become burdens to be unloaded as quickly as possible as business travelers cut back, taking with them the high-end fares that subsidize tourist-friendly discounts.
In good economic times, international markets have higher operating margins than domestic markets where airlines like Delta face heavy competition from low-cost carriers, said airline consultant Robert Mann. Now, those international margins are shrinking.
Some of the highest-profile international route cuts Delta is making are in Asia —- including a much-ballyhooed Atlanta-Shanghai route, which will be discontinued this fall. Delta is also axing service between Atlanta and Seoul; Mumbai; and Cape Town, South Africa.
“Customer demand for international travel has fallen significantly,” Chief Executive Richard Anderson and President Ed Bastian said in a joint memo to employees last month. The capacity cuts target “routes that have experienced losses in the current economic climate and with higher fuel prices.”
Other international routes being cut include Cincinnati to Frankfurt and London-Gatwick; and New York’s John F. Kennedy International to Edinburgh, Scotland.
“Business travel in general is slowing and all international destinations are just much more difficult,” said Avondale Partners analyst Bob McAdoo. “Delta and every other carrier who flies internationally is having to look at how much capacity to actually offer this year.”
Anderson and Bastian aren’t admitting defeat in their international offensive.
“In keeping with our long-term business plan, we continue to grow the global footprint that is a cornerstone of our successful strategy,” Bastian and Anderson wrote.
Though Delta is cutting international capacity and eliminating routes, it is adding some new routes in other areas.
“Having this globally-balanced international network is what gives you a hedge to economic conditions around the world,” said Delta spokesman Kent Landers.
But even if Delta is still moving forward, the strategy’s execution has involved a running series of revisions. Last October, Delta said it was continuing to expand international capacity but would trim growth plans by about 2 percentage points from its previous plan for 15 percent international growth in the fourth quarter of 2008.
By December 2008, as the economy worsened, Delta’s forecast for 2009 was for an international capacity cut of 3 percent to 5 percent. In March, the outlook worsened to a 10 percent international capacity cut for this fall. And in June, Delta revised its plans again to a 15 percent slash of international capacity.
McAdoo said he doesn’t expect Delta to abandon its international push, which was born of concern that peers such as American, United and Continental were pulling bigger shares of the high-margin international travel market.
Once the economy turns, “I imagine Delta will go back and rebuild and increase frequency in those markets where it cut capacity, and reinstate international service it had for a while before the economy fell apart,” he said.
Hartsfield-Jackson International Airport is inextricably tied with Delta and its international growth plans. Delta, which has its biggest hub at the airport, is in talks with the city over a new multiyear lease for its operations at the airport.
Hartsfield-Jackson is also building a new $1.35 billion international terminal to accommodate expected growth in international flights, particularly at Delta. The airport got city council approval this month for an $800 million bond deal to complete the terminal and plans to go into the market for financing in August.
International traffic at Hartsfield-Jackson is down about 5 percent this year.
“Taking the long view, we know this is a very good decision,” said Hartsfield-Jackson general manager Ben DeCosta. “We’re confident that the local economy will sustain and traffic will return.”
Delta said that though it is cutting back flights in some areas and downgauging to smaller aircraft in others, it is maintaining roughly the same level of about 1,000 daily departures from Hartsfield-Jackson it had a year ago. It’s unclear what effect Delta’s international slowdown could have on the plans for the international terminal.
“Maybe it’s delayed a year or two in terms of when it gets fully utilized,” McAdoo said.
Last month, as Delta executives made a presentation at an investor conference, Bastian said “we’re building a plan not anticipating any consequential recovery for the balance of this year.”
Along with the impact of the recession, Bastian said Delta also expects a $125 million to $150 million drop in revenues due to H1N1 flu concerns. “And we did see bookings in the month of May fall off in a very dramatic manner across Asia,” Bastian said.
Delta had underestimated how large the traffic drop in Asia would be. In June, Delta’s traffic in its Pacific region fell 17.3 percent —- the largest drop among its regions —- even though it had only cut flight capacity by 5.9 percent in the Pacific.
But Delta has not been alone in rushing to keep up with the fall in passenger traffic, according to the International Air Transport Association. Other airlines’ cuts have also trailed behind declines in traffic.
Benefits from lower fuel costs have been outweighed by drops in traffic and fares across the airline industry, according to the report. “The expectations reported for the next 12 months have dipped into pessimism once more,” according to IATA’s business confidence index.
Although analysts have speculated about the solvency of some airlines, Delta has been seen as stronger than some of its competitors.
That’s partly because of Delta’s moves to cut back flights amid slow demand.
“They have been far more proactive eliminating flights that are not paying for themselves,” McAdoo said.
Thursday, July 16, 2009
Continental CEO Kellner to step down at year end and be replaced by company president Smisek
By David Koenig, AP Airlines Writer
On Thursday July 16, 2009, 9:47 pm EDT
DALLAS (AP) -- Chairman and CEO Lawrence W. Kellner will leave Continental Airlines Inc. at the end of the year to return to the private-equity business and will be replaced by company president Jeffery Smisek.
Continental, the nation's fourth-largest airline, announced the change late Thursday.
Kellner, 50, has spent 14 years at Continental, including the last five as CEO. His tenure included discussions with United Airlines over a combination, but talks collapsed last year when United's finances worsened.
In one of Kellner's last achievements, the company this month won antitrust immunity from federal officials for its plan to work closely with United Airlines and other partners in setting prices and schedules for international service.
"It is the right time for this transition," Kellner said, citing the antitrust immunity, which he said "will allow us to continue as an effective global competitor."
Smisek, 54, will take over both of Kellner's jobs on Jan. 1. He has been president and chief operating officer.
Smisek has been responsible for overseeing flight operations, maintenance, labor relations and other duties. A corporate finance and securities lawyer, he joined the airline in 1995 as general counsel and was promoted to president in 2004 and chief operating officer in 2008.
Henry Meyer, the lead director on Continental's board, said it was Kellner's decision to leave.
In recent years, Continental has performed financially better than many other so-called legacy airlines, those that date back before 1978, when carriers were closely regulated by the federal government. It earned profits in 2006 and 2007.
"Larry, Jeff and their team have run the best-performing network airline with the best labor-management trust relationship in the business," said Robert Mann, an airline industry consultant in Port Washington, N.Y.
But like others, Continental was hurt last year by record-high fuel prices -- it lost $585 million -- and this year by plunging demand for air travel, especially among high-ticket business travelers.
Mann said Kellner was leaving at a difficult time in the airline industry. But, he said, the company was in good hands with Smisek and others who helped manage through the fallout from the 2001 terror attacks and a restructuring.
Kellner faced one of his toughest decisions last year whether to merge his airline with UAL Corp.'s United.
Delta Air Lines Inc. was in the process of buying Northwest to become the world's largest carrier, and some analysts believed other carriers needed to consolidate too. But Kellner broke off the talks.
"He made the right call," said Darryl Jenkins, an airline consultant who knows executives at both companies. "Continental's product is much better, and it would have been very difficult to integrate the two products."
Continental under Kellner tried to preserve amenities including food service in coach and free blankets, which he believed set his airline apart.
Although Continental and United did not merge, they will soon be partners in the Star Alliance. This month, the U.S. Transportation Department approved antitrust immunity for the airlines to work together on setting prices and schedules on many international routes. The arrangement could be a precursor to a later merger.
United CEO Glenn Tilton said of Kellner that he "appreciated his leadership as we partnered to gain antitrust immunity to the benefit of our customers and the communities we serve."
When Kellner took over as CEO from Gordon Bethune in 2004, Continental was still recovering from the recession and terror attacks of 2001 plus increasing competition from low-cost airlines such as Southwest, JetBlue and AirTran.
In a restructuring, he extracted concessions from labor groups while avoiding bankruptcy.
Before joining the airline, Kellner was executive vice president and chief financial officer of American Savings Bank, owned by a member of the Bass family investors in Texas. He had also been CFO of real estate and construction firm The Koll Co.
Kellner will leave Continental to lead a new Houston-based private investment firm called Emerald Creek Group LLC.
According to the company's proxy filed with regulators in April, if Kellner resigned other than for "good reason" he would get a lump-sum supplemental retirement benefit estimated at $5.3 million last Dec. 31, plus health insurance and lifetime family travel benefits on Continental.
Last year, Kellner was paid a salary of $296,875, down from $712,500 the year before. The company valued his compensation package at nearly $5 million, but it could be worth much less today because his stock and option grants have lost value as Continental's stock price has tumbled.
Smisek is well-known to Wall Street analysts and industry insiders, who expect a smooth transition.
"Smisek is an airline guy that has touched many facets of the company's functions during his professional growth," said William Swelbar, a director at Hawaiian Airlines' parent and an airline-industry researcher at MIT.
Mike Boyd, an airline consultant in Colorado, said the switch from Kellner to Smisek should be just as smooth as the one that brought Kellner in five years ago.
"It's a very rough job, being an airline CEO," Boyd said. "You might sometimes get a vacation, but you never get a day off."
By David Koenig, AP Airlines Writer
On Thursday July 16, 2009, 9:47 pm EDT
DALLAS (AP) -- Chairman and CEO Lawrence W. Kellner will leave Continental Airlines Inc. at the end of the year to return to the private-equity business and will be replaced by company president Jeffery Smisek.
Continental, the nation's fourth-largest airline, announced the change late Thursday.
Kellner, 50, has spent 14 years at Continental, including the last five as CEO. His tenure included discussions with United Airlines over a combination, but talks collapsed last year when United's finances worsened.
In one of Kellner's last achievements, the company this month won antitrust immunity from federal officials for its plan to work closely with United Airlines and other partners in setting prices and schedules for international service.
"It is the right time for this transition," Kellner said, citing the antitrust immunity, which he said "will allow us to continue as an effective global competitor."
Smisek, 54, will take over both of Kellner's jobs on Jan. 1. He has been president and chief operating officer.
Smisek has been responsible for overseeing flight operations, maintenance, labor relations and other duties. A corporate finance and securities lawyer, he joined the airline in 1995 as general counsel and was promoted to president in 2004 and chief operating officer in 2008.
Henry Meyer, the lead director on Continental's board, said it was Kellner's decision to leave.
In recent years, Continental has performed financially better than many other so-called legacy airlines, those that date back before 1978, when carriers were closely regulated by the federal government. It earned profits in 2006 and 2007.
"Larry, Jeff and their team have run the best-performing network airline with the best labor-management trust relationship in the business," said Robert Mann, an airline industry consultant in Port Washington, N.Y.
But like others, Continental was hurt last year by record-high fuel prices -- it lost $585 million -- and this year by plunging demand for air travel, especially among high-ticket business travelers.
Mann said Kellner was leaving at a difficult time in the airline industry. But, he said, the company was in good hands with Smisek and others who helped manage through the fallout from the 2001 terror attacks and a restructuring.
Kellner faced one of his toughest decisions last year whether to merge his airline with UAL Corp.'s United.
Delta Air Lines Inc. was in the process of buying Northwest to become the world's largest carrier, and some analysts believed other carriers needed to consolidate too. But Kellner broke off the talks.
"He made the right call," said Darryl Jenkins, an airline consultant who knows executives at both companies. "Continental's product is much better, and it would have been very difficult to integrate the two products."
Continental under Kellner tried to preserve amenities including food service in coach and free blankets, which he believed set his airline apart.
Although Continental and United did not merge, they will soon be partners in the Star Alliance. This month, the U.S. Transportation Department approved antitrust immunity for the airlines to work together on setting prices and schedules on many international routes. The arrangement could be a precursor to a later merger.
United CEO Glenn Tilton said of Kellner that he "appreciated his leadership as we partnered to gain antitrust immunity to the benefit of our customers and the communities we serve."
When Kellner took over as CEO from Gordon Bethune in 2004, Continental was still recovering from the recession and terror attacks of 2001 plus increasing competition from low-cost airlines such as Southwest, JetBlue and AirTran.
In a restructuring, he extracted concessions from labor groups while avoiding bankruptcy.
Before joining the airline, Kellner was executive vice president and chief financial officer of American Savings Bank, owned by a member of the Bass family investors in Texas. He had also been CFO of real estate and construction firm The Koll Co.
Kellner will leave Continental to lead a new Houston-based private investment firm called Emerald Creek Group LLC.
According to the company's proxy filed with regulators in April, if Kellner resigned other than for "good reason" he would get a lump-sum supplemental retirement benefit estimated at $5.3 million last Dec. 31, plus health insurance and lifetime family travel benefits on Continental.
Last year, Kellner was paid a salary of $296,875, down from $712,500 the year before. The company valued his compensation package at nearly $5 million, but it could be worth much less today because his stock and option grants have lost value as Continental's stock price has tumbled.
Smisek is well-known to Wall Street analysts and industry insiders, who expect a smooth transition.
"Smisek is an airline guy that has touched many facets of the company's functions during his professional growth," said William Swelbar, a director at Hawaiian Airlines' parent and an airline-industry researcher at MIT.
Mike Boyd, an airline consultant in Colorado, said the switch from Kellner to Smisek should be just as smooth as the one that brought Kellner in five years ago.
"It's a very rough job, being an airline CEO," Boyd said. "You might sometimes get a vacation, but you never get a day off."
Tuesday, July 14, 2009
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
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.
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.
Thursday, July 09, 2009
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
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
Wednesday, July 08, 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
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
Tuesday, July 07, 2009
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)
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)
Friday, July 03, 2009
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.
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.
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