Tuesday, May 31, 2011

Main terminal of Washington Dulles Internation...
Plane returns after fistfight between passengers

By JOAN LOWY, Associated Press Joan Lowy, Associated Press – 2 hrs 41 mins ago

WASHINGTON – Government and airline officials say a United Airlines plane with 144 people aboard returned to Washington-Dulles International Airport for an emergency landing escorted by two F-16 fighter jets after a fight broke out between passengers.

Federal Aviation Administration spokeswoman Laura Brown says Flight 990 bound for Accra, Ghana, returned to Dulles in Chantilly, Va., just after midnight Sunday after a fistfight in the cabin.
Government officials confirmed that fighter jets were scrambled from Andrews Air Force Base in Maryland.
United spokesman Mike Trevino said Tuesday that the Boeing 767 dumped fuel as a safety precaution to lighten its weight on landing.

The Washington Post, which first reported the incident, reported that the fight began not long after takeoff when a passenger lowered his seat and a passenger behind him objected.
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AMR: We Are Building More Miami's

By Ted Reed 05/31/11
DALLAS (TheStreet) -- American (AMR_) says it is building an international route system for premium travelers, step by step, following the example it set when it took over Eastern's Miami hub in 1989.

The manner in which we are trying to build share is unconventional, in the sense that historically airlines have built franchises through buying them, or built them when the market was soft," said Vasu Raja, American's managing director of corporate planning, in an interview with TheStreet. "But we have done this before (in Miami). We have a line of sight on how we will build five world class hubs, and we have partnerships in place to help us do that."

In part, Raja responded to a recent, critical report by Avondale Partners analyst Bob McAdoo, which said that American loses $1 billion a year by placing too much capacity on routes where competitors are able to produce higher unit revenue by offering less capacity.

While he disputed McAdoo's math, Raja acknowledged that the carrier realizes it takes time to build traffic on new routes and to fully integrate its recently approved partnerships.

Raja sketched out American's global approach, drawing on the evolution of the Miami hub, widely recognized as one of the domestic airline industry's most successful hub operations. As even McAdoo noted, "American clearly has a broad productive hub in Miami." Dominance in Miami has enabled American to dominate an entire continent.

In building trans-Pacific and trans-Atlantic networks, however, American's competitors got a head start. United(UAL_) bought a Pacific network from Pan American World Airways , while Delta (AMR) acquired Northwest in order to get a Pacific network. Continental built a European network at its Newark hub, then merged with United. Both United and Delta also received anti-trust immunity in the trans-Atlantic long before American did, and both have lower labor costs.

It was not until July 2010 that American won approval for its trans-Atlantic joint venture immunized against anti-trust violations. In the Pacific, American has had to build from scratch, after winning approval for an immunized joint venture last year and starting implementation in April. "It is no great secret that we have a smaller Asia network than the others," Raja said.

In this context, it is no wonder that American has about a quarter of the market capitalization of its two peers: at the same time, it seems foolish to assume that American will never approach its two peers' network capabilities.

Miami growth has taught American how to build, Raja said. "It has been so strong for so long because we invested for the long run," he said. "We built relations with community leaders and travel agents and premium travelers. And today, India and China look to us like Miami did 10 years ago."

Among American's recent steps: A code-share agreement with India's Kingfisher Airlines was implemented this year. And last week, JAL said it will launch non-stop Tokyo-Boston service in April 2012. The flight will be operated as part of the two carriers' immunized trans-Pacific joint venture. As a sign of the flight's importance to the two airlines, this is the route JAL has selected to fly its first Boeing(BA_) 787.

Regarding specific routes that McAdoo said were unprofitable, Raja declined to discuss route profitability. However, while McAdoo said Chicago-Shanghai is unprofitable, Raja noted that American began Los Angeles-Shanghai service on April 5: he strongly implied that the airline would not add a second Shanghai route if the first was unprofitable. McAdoo said American flies too many New York/Los Angeles flights, Raja said Kennedy-Los Angeles "is one of the strongest premium fare markets anywhere in the world, we are the preferred airline for premium travel and the cabins are packed."

McAdoo said Dallas-Buenos Aires is unprofitable: Raja said Buenos Aires is among the best markets in South America. McAdoo said some London Heathrow flights are unprofitable: Raja said American operates Heathrow like its other hubs, and needs frequencies to key markets. "At the end of the day, Heathrow is our market, in the same way Dallas or Chicago or Miami is our market," he said.

In general, Raja said, airlines tend to look at revenue per available seat mile on an overall basis, not a route specific basis. He also noted that McAdoo's analysis does not take into account the necessity to compete on fares while building new routes. "We do have some routes out there losing money, but you cannot look at routes in isolation when you're trying to build a hub network," he said. "You can't look at any single route and make month to month decisions on it. We know what it takes to build a network over a long period of time.

"This isn't a math exercise," Raja said.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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Monday, May 30, 2011

American Airlines Center, home of the Dallas S...
American Airlines wins either way in NBA Finals

It's a slam dunk: No matter who wins, American Airlines has its name on NBA champion's arena

David Koenig, AP Business Writer, On Sunday May 29, 2011, 4:16 pm EDT

DALLAS (AP) -- If you're a basketball fan, you'll hear the name of American Airlines a lot over the next couple weeks.

American slapped its name on the arenas of both teams playing in the NBA Finals -- the American Airlines Arena in Miami and the American Airlines Center in Dallas.

Whether the Miami Heat or the Dallas Mavericks win the championship, American figures to get a lot of TV time. The same thing happened in 2006, when the Heat defeated the Mavericks in six games.
American bought the naming rights to those arenas a decade ago. According to published reports at the time, which American wouldn't confirm or deny, it agreed to pay $195 million over 30 years for the Dallas rights and $42 million over 20 years in Miami.
Stadium-naming rights were a hot commodity then and reached a fever pitch in 2006, when Citigroup agreed to pay $20 million a year to christen the New York Mets' baseball home Citi Field. Sports sponsorships became harder to sell during the recession, and the business hasn't fully recovered.
The Texas Rangers baseball team hasn't found a name sponsor since ending a deal with mortgage lender Ameriquest in 2007. Today, it's still simply Rangers Ballpark in Arlington.

New football stadiums in Dallas and New York still don't have sponsorships. Dallas Cowboys owner Jerry Jones might have missed his best chance when his new stadium hosted the Super Bowl in February. Now, with a looming NFL lockout this fall, there might be no games and no fans to sell to potential corporate name-droppers.

Recent deals have been underwhelming. Miami did a 1-year deal to rename the home of the NFL Dolphins Land Shark Stadium after a beer promoted by singer Jimmy Buffett, then it cut a 5-year agreement with a Canadian company. It's now Sun Life Stadium.

In Jacksonville, Fla., the football stadium had no corporate name for two years after a deal ended with Alltel, a phone company acquired by Verizon. Finally, a local bank ponied up for EverBank Field.

Andrew Zimbalist, a sports economist at Smith College, said the financial crisis and recession hurt the market for naming rights. As consumers cut back, he said, companies questioned ever-higher prices for sponsorships.

"I don't think that the market is collapsing, it's just not as rich as it used to be," Zimbalist said. He suspects that some teams, including the Cowboys, are turning down reasonable offers in hopes that sky-high prices come back.

Marc Ganis, president of Chicago-based sports business consulting firm Sportscorp Ltd., said CEOs may be gun-shy about naming deals after Citigroup was criticized for paying the Mets while getting $45 billion in federal bailout money.

American Airlines considered giving up its Dallas and Miami arena rights in 2003, when it hovered near bankruptcy. Company officials said such a move has not been considered since. American's parent company, AMR Corp., has lost nearly $12 billion in the last decade.
It's hard to determine the value of a company's name on a stadium or arena, but that doesn't stop marketing experts from trying.

Front Row Marketing Services estimates that American Airlines will get more than $10 million per game in national advertising. That's based on the number of times the company's name appears on screen or is mentioned by broadcasters.

But Front Row, which represents venues in naming-rights deals, assumes that a picture of LeBron James dunking is the same as a national advertising spot for American Airlines as long as there's an American logo in the background.

"We don't know if that's right," American Airlines spokesman Tim Smith said of the 8-figure estimate, "but there's value in it, and we're sure it's a large amount."

American has big airport hubs in both Dallas and Miami, and many out-of-towners going to the games will fly on its silver-skinned planes.

"It's great exposure, and it's fun," Smith said. "We've got home-court advantage every game."

Koenig can be contacted at http://twitter.com/airlinewriter
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Wednesday, May 25, 2011

Boeing 777 at Airport Dallas/Fort Worth
AMR Cancels 20% of Daily Flights as Hailstorms Batter Aircraft

By Mary Schlangenstein - May 25, 2011 1:36 PM MT

American Airlines and American Eagle canceled 707 flights, or 20 percent of their daily schedule, and pulled 89 planes from service after hail battered the carriers’ biggest hub and storms raked across the central U.S.

The cancellations included 326 flights into and out of Dallas-Fort Worth International Airport today as repairs began, and the AMR Corp. (AMR) units are scrapping 188 flights for tomorrow. Getting all the aircraft back in service may take several days, Tim Smith, a spokesman, said in an interview.

Winds of almost 70 miles (113 kilometers) per hour and hail as large as 4.25 inches (11 centimeters) in diameter were reported as storms moved through Dallas-Fort Worth last night, according to the National Weather Service. About 10,000 people were stranded overnight at the Dallas-Fort Worth airport, said David Magana, a spokesman for the facility.

Cancellations at American, the third-biggest U.S. airline, “are overwhelmingly driven by a significant group of domestic aircraft being out of service,” Smith said. “We’re thinking that for some number of those aircraft, it could be two or three days to get them repaired and flying again.”

Southwest Airlines Co. (LUV) said it scrubbed a dozen flights from Dallas, where the carrier is based, and grounded eight planes damaged by baseball-sized hail. United Continental Holdings Inc. pulled two aircraft from service out of Dallas- Fort Worth for damage inspections and canceled two flights.

American has completed inspections on about 10 of the 62 damaged aircraft and returned them to service. Twenty-seven planes flown by American Eagle, a commuter carrier, have been repaired and resumed flights, Smith said.

“It looks like a majority of the 62 are going to need some kind of repair,” he said.

Oklahoma Crews

The airline, based in Fort Worth, Texas, flew as many as 50 workers from its Tulsa, Oklahoma, maintenance base, along with tools and parts, to handle repairs. The damaged planes are at airport gates, on tarmacs and even on taxiways, Smith said.

American yesterday grounded 400 flights, primarily at the Texas airport as storms moved into the area.

Southwest, the nation’s largest low-fare carrier, operates from Love Field north of downtown Dallas. Buildings were damaged and trees blown down during the storm.

Damage to the Southwest Boeing Co. 737s was “minimal to moderate,” said Chris Mainz, a spokesman. The first of the repaired planes should return to flying tomorrow, and the rest by May 28, he said.

“The only issue is finding the parts and taking the time to replace or repair,” Mainz said.

American is letting customers traveling through Dallas-Fort Worth today through May 27 change reservations without paying a fee, Smith said.

American and American Eagle have more than 750 daily departures from Dallas-Fort Worth International Airport. AMR operates about 3,600 flights a day.

No damage was reported to the Dallas-Fort Worth airport facilities, Magana said. Cabs and cars parked at the south end of the airport were damaged by hail, he said.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.n

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American Airlines fleet at Dallas/Fort Worth I...

I was in the storm at DFW last night where 10,000 passengers were stranded due to the intense hailstorm, with hail the size of golf balls. All passengers were evacuted from all aircraft, including mine headed to Dayton, Ohio, at the gates in DFW and huddled around innner areas of the terminal.

Restaurants were jammed and people were frustrated and angry. We finally got a hotel room after nearly twelve hours on duty...remember, we only get paid when the plane is moving and nothing went anywhere last night...thanks goodness people are safe.

Hundreds of cars and trucks sustained hail damage and the DFW operation is slowly coming up to speed as planes and crews and scattered all over the country.

American Cancels Flights After Hailstorm

By Mary Schlangenstein - May 25, 2011 9:03

American Airlines and American Eagle canceled 594 flights, or 17 percent of their daily schedule, and pulled 89 planes from service for possible hail damage after a series of storms raked across the central U.S.

Southwest Airlines Co. (LUV), based at Love Field in Dallas, expects to cancel or delay an undetermined number of flights as it checks eight aircraft for damage, a spokesman said today.

Winds of almost 70 miles (113 kilometers) per hour and hail as large as 4.25 inches (11 centimeters) in diameter were reported as storms moved through Dallas-Fort Worth last night, the National Weather Service said. About 10,000 people were stranded overnight at Dallas-Fort Worth International Airport, said David Magana, an airport spokesman.

“Airlines conducted inspections of aircraft overnight, looking for hail damage,” he said. “Depending on the results, that may have a further impact on flight schedules.”

American and its Eagle regional carrier canceled 262 flights at Dallas-Fort Worth, its largest hub, said Tim Smith, a spokesman for the carrier, in an e-mail. The Fort Worth-based airline yesterday grounded 400 flights, primarily at the Texas airport as storms moved into the area.

American, the third-biggest U.S. airline, couldn’t immediately say how long the aircraft inspections would take or whether any planes had been found with damage, Smith said. The checks include 62 American planes and 27 Eagle aircraft. Both carriers are units of AMR Corp. (AMR)

“We expect to find damage on some aircraft that will have to be repaired, but I don’t know the results of that yet,” he said. Some flights also were canceled because crews and aircraft were diverted to other cities during the storm.

‘Expecting Delays’

Southwest, the nation’s largest low-fare carrier, operates from Love Field north of downtown Dallas. Buildings were damaged and trees blown down during the storm.

“While we were able to launch fully our originating schedule this morning, we are expecting delays and some cancellations as a result of these planes being out of the scheduled operation,” Brad Hawkins, a Southwest spokesman, said in an e-mail.
Southwest is assessing damage to its planes, and some may be out of service until May 28, said Chris Mainz, a spokesman.

American is letting customers traveling through Dallas-Fort Worth today through May 27 change reservations without paying a fee, Smith said.

Dallas-Fort Worth International Airport is American’s largest hub, with more than 750 daily departures by the airline and American Eagle. AMR operates about 3,600 flights a day.

No damage was reported to the Dallas-Fort Worth airport facilities, Magana said. Cabs and cars parked at the south end of the airport were damaged by hail, he said.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg
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Tuesday, May 24, 2011

A Delta Boeing 757-200 taking off Ronald Reaga...
Delta Takes Aim at La Guardia Amid Competition

By Mary Jane Credeur and Mary Schlangenstein - May 23, 2011 9:01 PM MT

Delta Air Lines Inc. (DAL) sought federal approval to expand at New York’s LaGuardia Airport, saying industry consolidation has helped clear the way for a trade of landing rights with US Airways Group Inc. (LCC)

Delta wants to take over 132 pairs of LaGuardia flight slots held by US Airways, which would get 42 pairs in exchange at Washington’s Reagan airport. US Airways also would receive rights to fly to Sao Paulo and $66.5 million in cash, the two carriers said yesterday.
The plan, which needs clearance from the U.S. Department of Transportation, replaces a 2009 accord that met objections from regulators and rivals including Southwest Airlines Co. (LUV) A successful deal would allow Atlanta-based Delta to boost market share in New York, where no airline has a dominant position.

“It is likely that Delta and US Airways received some indication that the DOT would find the proposal acceptable,” said Jeff Straebler, a debt strategist at RBS Securities Inc. in Stamford, Connecticut. “Given the changed competitive landscape and Southwest’s growing presence in key East Coast airports, we think the DOT is more likely to approve this go-round.”
Southwest gained LaGuardia and Reagan flights from its purchase of AirTran Holdings Inc. (AAI) this month, and it added slots at New Jersey’s Newark airport that United Airlines and Continental Airlines divested as part of their October merger.
LaGuardia Growth

Delta would end up with almost half of the flight slots at LaGuardia, which chiefly serves domestic routes. The carrier’s 2008 purchase of Northwest Airlines helped push its share of passengers to 29 percent at the end of 2010 from 22 percent five years earlier. AMR Corp. (AMR)’s American Airlines slid to 21 percent from 24 percent in the same period.
For Tempe, Arizona-based US Airways, the trade would be a chance to focus on Washington and shrink LaGuardia operations, where it has said it can’t make money. While the government approved the airlines’ 2009 proposal, neither carrier accepted the regulators’ terms for that agreement to proceed.

“We plan to review their application,” said Bill Mosley, a Transportation Department spokesman, who declined to comment further.

Delta fell 28 cents to $11.23 yesterday on the New York Stock Exchange, while US Airways slid 17 cents to $10. They were little changed in extended trading after their agreement was unveiled.

The airlines, the second- and fifth-largest U.S. carriers by traffic, said yesterday they would shed 16 LaGuardia slot pairs and eight at Ronald Reagan Washington National Airport to smaller carriers with few or no flights there to help win regulatory approval.

Trade to Grow

That’s fewer than the 34 slot pairs they were told to give up in the Transportation Department’s May 2010 ruling that approved their earlier proposal. Flights are capped at both airports, so carriers have to trade to expand.
Industry mergers, including the Southwest-AirTran deal, have brought in new carriers in New York and Washington since their initial plan was unveiled almost two years ago, Delta and US Airways said yesterday.

“There has been increased competition in that part of the world since the first deal was announced that would help the argument,” said Michael Derchin, a CRT Capital Group LLC analyst in Stamford who recommends buying Delta and holding US Airways. “It will probably be approved.”

Under the original August 2009 plan, Delta sought 125 slots for LaGuardia round-trip flights held by US Airways, in exchange for 42 such slots at Reagan.

‘More Slots’

“We are still interested in more slots, which is good for competition and good for consumers,” said Whitney Eichinger, a spokeswoman for Dallas-based Southwest. “We’ll be analyzing this new deal with that in mind.”

JetBlue Airways Corp. (JBLU), which is based in New York and has its largest operations at the city’s Kennedy airport, didn’t immediately return a call seeking comment.
Delta proposes to take control of US Airways’ Terminal C at LaGuardia and build a 600-foot connector to link the facility to its existing terminal for main jet flights. That project and other upgrades will cost $117 million.
US Airways would need to cut 300 jobs at its Piedmont regional unit and an unknown number of additional jobs if the slot trade goes through, said Todd Lehmacher, a spokesman. Under the plan, US Airways would win the right to operate daily service to Sao Paulo in 2015.

The New York region lacks a dominant carrier, with air traffic spread among LaGuardia, Kennedy and New Jersey’s Newark. United and Continental airlines led the area with 27 percent of passengers in 2010, according to the Port Authority of New York and New Jersey. Delta had 20 percent, and Fort Worth, Texas- based American had 13 percent.

“Approval of this deal will sorely challenge” American in New York, said Straebler, the RBS debt strategist. “United already has the only true hub in the area at Newark. Now Delta would be far larger than American when combining LaGuardia and JFK.”

To contact the reporters on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

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Wednesday, May 18, 2011

The Minutiae of an Airline Merger

James Estrin/The New York Times

Pilots from United and Continental Airlines picketed at LaGuardia Airport in New York this month to mark the one-year anniversary of the announcement of the merger of the airlines.


Published: May 18, 2011

Airline mergers are complex and tough to pull off — witness the troubled marriage of People Express and Continental Airlines in the 1980s or the continuing problems in integrating America West and US Airways six years after their merger. So when Delta Air Lines acquired Northwest three years ago, executives knew they would have to resolve major labor, technology and financial issues.

What they had not fully anticipated were the thousands of tiny details that go mostly unnoticed by passengers but can make the difference between a successful merger and a failed one.

All airlines have their own way of doing things, developed over time and through labor negotiations. All have specific working rules, flying procedures, maintenance schedules and computer programs. And all have their own cultures. Delta always thought of itself as the gracious host. Hence its flight attendants poured the requested drinks. Northwest was the practical carrier; its attendants just handed over the can.

“It was like Noah’s ark out here,” said Peter Wilander, an executive at Delta responsible for in-flight services. “We had two of everything.”

Delta executives agreed earlier this month to discuss the minutiae of the Northwest merger to make the broader point that combining two airlines is an incredibly difficult task. The Delta-Northwest tie-up is now widely seen as a success, and that view laid the groundwork for two other, more recent mergers: United Airlines with Continental last fall and Southwest Airlines and AirTran, which was completed just last week.

“If you look at the history of mergers, the assumption was that you couldn’t do them successfully,” said Richard Anderson, Delta’s chief executive. “Everybody had come to the conclusion that these things are too big, too complex and too unwieldy to manage.”

Delta’s merger with Northwest was announced in April 2008 and closed in October of that year after receiving regulatory and shareholder approval. And yet it still took 14 more months for the airlines to fly as a single carrier, in January 2010.

Delta scored a major point by getting its pilot unions to agree to a common contract by the time the merger closed. Many analysts said this gave the airline a critical advantage by getting a crucial labor group on board from the start.

But that did not put an end to Delta’s labor issues. Flight attendant representatives accused the airline of using intimidation tactics after they lost a bid to unionize the carrier’s work force in November. The matter is under review by the National Mediation Board, which could call a new election.

Meanwhile, flight attendants from Delta and Northwest continue to work under separate contracts, each with their own work rules, and cannot be scheduled to fly on the same airplanes.

And some merger-related work is still going on. The last Northwest plane was repainted only six weeks ago. Delta expects to spend another year completing an inventory of all airplane parts and maintenance procedures into a new database.

Each airline has hundreds of different technologies that book seats, print tickets or dispatch crews that need to be integrated. Failure here can leave thousands of travelers without a seat if bookings are misplaced.

Delta’s chief information officer, Theresa Wise, said the airline had to merge 1,199 computer systems down to about 600, including one — a component within the airline’s reservation system — dating from 1966.

The challenge, she said, was to switch the systems progressively so that passengers would not notice. Ms. Wise, who has a doctorate in applied mathematics, devised a low-tech solution: she set up a timeline of the steps that had to be performed by pinning colored Post-it notes on the wall of a conference room.

A major switch happened when the new airline canceled all Northwest’s bookings and transferred them to newly created Delta flights in January 2010. It required computer engineers to perform 8,856 separate steps stretched out over several days. 

More than 140,000 electronic devices, including printers, had to be replaced. The size of the paper at airport kiosks was even checked to make sure it could print boarding passes for Delta’s new flights.

This sounds insane,” Ms. Wise said. “But each reservation system has its own personality.”

Financially, the merger provided a big boost to Delta’s bottom line. Delta posted its highest profit in a decade last year. But even as the integration into a single carrier was hitting its stride, Delta’s operations struggled.

The airline had the worst record among large carriers for on-time arrivals last year, and it accounted for a third of all customer complaints, the worst of any airline, for categories like service and lost bags, according to the Transportation Department.

When United and Continental announced their own tie-up, in May 2010, they picked a hybrid approach to emphasize that the combination was a merger of equals: the new airline would keep its headquarters in Chicago but would be led by Jeff Smisek, Continental’s chairman, who was a driving force behind the merger. The carrier’s new livery combines Continental’s globe on the tail with United’s name on the fuselage.

United and Continental continue to operate as separate airlines until they receive a single operating certificate from the Federal Aviation Administration by the end of the year. At that point, the new United will overtake Delta as the nation’s largest carrier.

Unlike Delta, however, United has not secured a new contract for all its pilots yet, some of whom recently picketed in front of nine major airports across the country, including Los Angeles International Airport. Mr. Smisek said during a recent conference call that the airline had made some progress in the merger. Passengers can now print boarding passes from either airline at all United and Continental kiosks, and loyalty programs are getting more closely aligned.

“I remain committed to reaching agreements that are fair to our co-workers and fair to the company,” Mr. Smisek said on the call. “And I want to reach those agreements promptly.”

Likewise, Southwest closed the purchase of AirTran on May 2, and quickly appointed a new leadership team to handle the combination.

“All good things take time and change won’t be immediate, many important decisions are ahead, many questions still need answers,” Gary Kelly, the chief executive of Southwest, said in a video statement after the deal closed. “Once integration is complete, we will have one brand, one customer experience, one livery, one operation under a single operating certificate and one mission.”
If Delta’s experience is any indication, it will be a long road for Southwest and United, littered with seemingly trivial questions.

Pilots at Delta, for instance, used to ring the cabin bell four times as they began their final approach, while those at Northwest rang it twice. The merged airline now signals just two times.

Likewise, the food catering operations of both airlines had 8,000 pages of one-line codes describing everything from soda orders to the price of strawberries. Each airline had different codes, however, and paid different prices for everything.

No decision, seemingly, was too small. Before the merger, Delta used to cut its limes in 10 slices while Northwest cut them 16 ways. The lime debate was even mentioned at a meeting attended by Mr. Anderson, the chief executive, who was told it saved Northwest about $500,000 a year. In the end, Delta stuck with its 10 slices. But the airline also realized that it had been loading more limes on its flights than it needed. So it is now carrying fewer limes.

Delta, based in Atlanta, used to serve the hometown drink, Coke. Northwest, Pepsi. “That was an easy one,” Mr. Anderson recalled. The airline stuck with Coke but adopted Pepsi snacks.

One other issue has apparently stumped everyone. Delta and Northwest each used different trash bags in their cabins. Northwest’s was large, held up better and was easy to use. Delta’s was smaller, like a high-end shopping bag. The airline is still working on finding the perfect bag.

The amount of work is boring beyond belief,” Mr. Wilander said. “It is also critical to the airline.”

Monday, May 16, 2011

A typical digital flight data recorder and coc...
Black box data from crashed Air France jet said to be intact

 Mon May 16, 9:22 am ET

PARIS (Reuters) – Investigators have pulled data from the black boxes of an Air France jet which crashed in the Atlantic in 2009, boosting efforts to explain what caused the disaster and killed all 228 people on board.

France's BEA air crash investigation agency said on Monday it had managed to transfer all the information stored in devices hauled from the seabed two weeks ago, almost two years after the Airbus A330 vanished in an equatorial storm.

The transfer -- carried out at the weekend and filmed in front of investigators from four countries and French judicial officials -- is the most important breakthrough yet in efforts to find out what caused the mysterious crash.

The BEA brought forward its target date for publishing a new report on the crash by around six months and said it may be able to issue interim findings in the summer.

"The most interesting thing will be to find out what the crew were seeing and understanding and how they were reacting and managing their responses," said Paul Hayes, safety director UK-based aviation consultancy Ascend Aviation.

Flight 447 from Rio de Janeiro to Paris vanished in the storm on June 1, 2009, triggering an international hunt for the wreckage and black boxes that might contain clues.
The recorders were hauled nearly 4 km (2.5 miles) to the sea's surface in early May after a search operation costing $50 million and shipped to Paris, where they arrived on Thursday.
At first it was unclear whether the data would be readable.

The successful data transfer includes all information from the flight data recorder, which monitors aircraft systems, and a loop containing the last two hours of cockpit voice recordings.

The operation took place after the memory cards and chips containing the recordings were dried out in carefully controlled conditions at BEA labs just outside Paris.
The data will now be analysed in detail, the BEA said.

"This work will take several weeks, after which a further interim report will be written and then published during the summer," it said in a statement.

Investigators had earlier said any information gleaned from the black boxes would take months to process and that they did not expect to issue a report until early in 2012.

Relatives of some of the 228 people killed in the crash have voiced hope that their two-year wait for an explanation may soon be over.

The next stage of the investigation is expected to focus on whether any systems were at fault, cross-checking with alerts sent out by the aircraft's automatic messaging system, and what information was available to the pilots before the disaster.

Two Lufthansa jets were in the same area half an hour before the Air France crash, the World Meteorological Organization said at the time of the accident, but some passenger aircraft are reported to have taken different routes.

Initial investigations focused on apparently inconsistent readings from the aircraft's Thales speed sensors, as relayed by the aircraft's automatic maintenance message system. But investigators have said no single cause can be identified.

The BEA was expected to make two recordings of the black box data -- one for its own investigation and one for French judges probing whether anyone should be held criminally responsible.

Air France and Airbus, part of the European aerospace group EADS, have both been placed under formal investigation, a step short of charges but which can ultimately lead to trial.

(Reporting by Tim Hepher; Writing by John Irish; editing by Elizabeth Piper)
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Thursday, May 05, 2011

Donald Trump's personal 727 at Laguardia Aiport
Trump: I Ran a Great Airline: Exclusive

By Ted Reed 05/05/11 - 10:45 AM EDT

NEW YORK (TheStreet) -- During a year and a half in the airline business, Donald Trump leveraged up too much, defaulted on his loans, fired the airline's president and then wouldn't make good on the president's contract.

He also improved the property, won praise from the employees and made a little money. "It worked out well for me," Trump said in an interview with TheStreet. "I ran an airline for a couple of years and made a couple of bucks. The airline business is a tough business, [but] I did great with it."

With Trump considering a bid for president, it may be timely to review his stewardship of the shuttle, which he purchased from Eastern Airlines in May 1989 for $365 million, branding it with his name and seeking to bring a luxury to a largely utilitarian segment of the airline business that provided convenient, hourly service in two key markets: New York's LaGuardia/Washington National and LaGuardia/Boston.

In particular, Trump recalls the positive relations with Trump Shuttle employees, many of whom embraced him after moving over from Eastern Air Lines, which had an acerbic labor climate and rundown equipment and facilities. "I was tentative about it at first, but i ended up with some of the finest employees," Trump said. "They worked as hard as any employees I ever had, because they wanted to prove that what was said about them was not true.

"Even today, I sometimes hop on the shuttle, or on a plane back from Florida, and there are people who say 'Thank you, Mr. Trump, for the great job you did at the shuttle.'"

The positive view of Trump was not universal. "Donald was challenging," recalled Bruce Nobles, president of the Trump Shuttle from October 1988 until June 1990. "Like a lot of charismatic entrepreneurs, he tended to be intimately involved in a lot of the details, [although] he didn't interfere in the operations per se. He didn't really know much about the airline business.

"When I first met him, I told him that old joke about how the way to make a little money in the airline business is to start with a lot of money, and he thought I was kidding," Nobles said.

In fact, despite the industry wisdom, the late 1980s and early 1990s were a time when airlines, for some strange reason, were viewed by many as trophy investments. Even Warren Buffet bought in, later declaring that his US Airways (LCC_) investment was his biggest mistake. Trump's own airline itch intensified after the shuttle purchase. In August, 1989, the Miami Herald reported that Frank Lorenzo had several times solicited Trump to buy Continental. In October, Trump bid $7 billion or $120 a share for American Airlines(AMR_).
Trump said he thought about buying Continental and later American, but that was before he realized just how difficult the airline business is, primarily because of its extremely high fixed costs.

'We Spent Too Much Money'

Trump Shuttle service began in June 1989. Early on, Trump had the airplanes painted with big red T's on the tail. "He got upset with the first paint jobs because the T wasn't big enough," said Ray Belz, who was vice chairman of the Trump Shuttle chapter of the Air Line Pilots Association.

In seeking an image of Trump-style luxury, "we took old 727s and spent a huge amount of money stripping them down to the frame and refurbishing them with chrome seat belts, maple bulkheads and faux marble bathrooms," Nobles said. "It was a problem: we spent too much money on the airplanes."

But the Trump Shuttle had far bigger problems. Within months of the acquisition, the Northeast began to lead the economy into a recession. The total number of shuttle passengers was shrinking as the Trump Shuttle sought to grow. "Unfortunately, Trump got there at the wrong time," Belz said. "The economy was going south"

Moreover, Nobles said, "the acquisition was substantially overleveraged." Trump paid $365 million for about two dozen old 727s, parts, gates, and most importantly, slots at La Guardia and Washington National. He borrowed $380 million from a syndicate of 22 banks led by Citicorp(C_) and, according to Nobles, put in about $20 million of his own money. To satisfy its bank covenants, the airline had to spin off about $40 million annually.

In competition with the Pan Am shuttle, later sold to Delta(DAL_), the Trump Shuttle did well. It managed to get to about 50% market share, after starting from scratch with an operation that had been shut down. The venture actually operated profitably, but did not produce enough cash flow to pay debt.

The Problem Wooing Women

One more negative was that Trump became involved in a highly public affair with Marla Maples, whom he later married. "It was in the headlines every day and [as a result] we could not get women business travelers," said Randy Smith, an airline veteran who was hired as director of sales. "Most of them had gone through a divorce or a split-up, and so we couldn't grow in that market." One day, Nobles called Trump to discuss the negative impact of the coverage: "I said he had to get out of the headlines, and he said 'Why?' I said, 'business women are boycotting.' He laughed and said, 'the guys love it.'"

Given the bad economy, its impact on his other businesses, and the debt load, Trump "was under tremendous pressure," Nobles said. In June 1990, Trump moved to replace Nobles, telling The New York Times that the shuttle "will be a financial success, but right now I'm upset with the people running it."

Nobles said he chuckles when Trump, on his TV program, aggressively fires people. "He didn't walk into me and say 'you're fired,'" Nobles said. "Earlier, I had tried to resign, and he asked me to stay, but then he came in and said 'it's time to make a change' and I said 'okay, good, let's do a transition.' It was okay except he wouldn't honor my contract. He told my lawyer 'go ahead and sue me, it will drag out in court.'"

Nobles said he was owed an amount in the high six figures on his contract, which had a year and a half to go. Trump made a "lowball" and the two sides ultimately settled "for something higher, but still lowball."

Trump said he fired Nobles and disputed the contract terms because "I didn't like the job he did. If I had liked the job he did, I would have paid him."

The situation at the shuttle did not improve after Nobles left. In September 1990, Trump defaulted on the loan and the banks took over the property. During 1991, the price of oil surged to $32 as war raged in Kuwait. The banks searched far and wide for a buyer before they reached a long-term agreement with US Air to manage the airline until 1996, and then to buy it.
As far as defaulting on the bank loans, Trump noted that the shuttle business crashed in the bad economy. "When the markets crash, you negotiate with banks," he said. Has Trump earned a reputation for defaulting on loans? "In some cases," he said. But in other businesses, he reminded, "I've done lots of great work with banks."

The Lighter Side of Working With Trump

While it failed to survive an economic downturn, the Trump Shuttle was hardly a gloomy place. "Trump was pretty good to work for," recalled Belz. "Everybody liked Trump. He would come on the airplane and talk to us. Everybody thinks those two years with Trump were the best years of our careers. Trump made that thing spick and span. He said the shuttle was going to be the 'diamond in the sky.'"

Of course, the pilots' enthusiasm largely reflects the labor situation at Eastern. On March 4, 1989, pilots and flight attendants struck Eastern, agreeing to honor an International Association of Machinists picket line. In response, Eastern sought bankruptcy court protection. A few pilots trickled across the picket line, but most stayed out as the carrier shrunk. The 168 Eastern Shuttle pilots who went to the Trump Shuttle -- along with a close-knit team of flight attendants, fleet service workers, mechanics and agents -- considered themselves to be far better off.

With Nobles absorbing many of the punches, some of airline's middle managers also found the shuttle a good place to work.

Randy Smith recalls that Trump would suddenly call management meetings at the Trump Tower, with some staffers coming from an office near La Guardia Airport, a 30-minute drive. "He would suddenly call you all together," Smith said. "I would ask my boss, 'what's the topic?' and he would say 'I don't know.' Sometimes it would be something out of left field. "But he recognized that he was a real estate and casino guy, and he let the airline people run the place," said Smith, who has since left the airline business. "He had ideas, he would poke around asking questions, and he exhibited one of the things I love when I am hiring and promoting people: he has the curiosity gene. If you had the facts and approached him in the right manner, you could persuade him to a different position."

Ironically, Trump won the shuttle in a bidding war with America West, now part of US Airways -- meaning it would have ended up with US Airways in either case. Another irony is that the pilots from US Airways insisted on seniority integration that gave shuttle pilots little credit for their years at Eastern, said Belz, now retired from the carrier. The seniority formula was devised by arbitrator George Nicolau, who would later apply a similar formula in the integration of US Airways and America West. But the second time, the US Airways pilots opposed it.

Although Trump said in 1989 that he wanted to create ''the best transportation system of any kind in the entire world'' at the shuttle, aviation consultant George Hamlin said "One of the lessons of the shuttle is that you are providing basic transportation." Passengers would not pay extra for luxury. Moreover, the shuttles competed not only among themselves, but also with Amtrak, which kept a lid on fares.

As a historical lesson, Trump's involvement underscores the proposition that "when you burden an airline with debt, bad things off happen," Hamlin said. "Trump said the shuttle was going to be a diamond in the sky, but it turned into a lump of coal."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed
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