As US Airways Plans a Sixth Merger, Ed Colodny Recalls the First Four

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By Ted Reed12/24/12 - 06:05 AM EST

 

CHARLOTTE, N.C. (TheStreet) -- Ed Colodny knows mergers, particularly mergers involving US Airways(LCC_). As head of USAir from 1975 to 1991, he presided over four of them and considered a half dozen more.

"Putting together any merger is difficult," said Colodny, who is 86 years old and sharp as a tack, in an interview. "When you have large organizations like this, it's (hard) to try and figure out where the future is going to be."

"Mergers work best when one (carrier) is weak and one is strong and the weak one appreciates being bought up so they can all survive," he added. "Merging two strong airlines is inherently a culture clash, particularly at the top."

Nevertheless, Colodny said the impending merger between US Airways and American(AAMRQ.PK) will "probably be a great combination if it does occur -- just don't expect (a successful integration) to happen in six weeks or six months."

"American has a very proud heritage going back to its earliest days, and US Airways is equally proud if not more so," he said. "It had to come up the hard way because it did not start out as one of the chosen trunk airlines; it was a small regional carrier."

Colodny joined US Airways-predecessor Allegheny, previously called All American Airways, as its first staff attorney in 1957. The carrier had begun flying passengers in 1949. It was based at National Airport and had routes from Washington north to Buffalo and west to Pittsburgh.

Colodny was deeply involved in four mergers starting in 1967, when Allegheny merged with Indianapolis-based Lake Central Airlines. At the time, the Civil Aeronautics Board encouraged mergers to reduce subsidies. "Lake Central was the easiest, a friendly deal with few problems," he said. In 1971, Allegheny merged with Utica, N.Y. -based Mohawk Airlines. "Mohawk was in trouble and the banks forced it into a merger," he said. "It worked out fairly easily."

In 1987, USAir bought PSA. "That worked out easily too," Colodny said. "They wanted to do it. But from a cultural standpoint, there were differences, and when we took the smile off the PSA planes, there were screams up and down the West Coast."

The fourth and best-remembered USAir merger came in 1987 with Piedmont Airlines. Today, it is often cited as an example of an extreme case of corporate culture clash. As Jerry Orr, director of Charlotte Douglas International Airport, once said: "When you buy somebody, you ought to save the good parts and throw away the bad parts, but USAir did the opposite." Orr added: "They thought the sun rose and set in Pittsburgh."

Colodny said the merger was not so bad, despite the challenge of merging two successful airlines. "There was a very proud group of employees and managers at Piedmont," he said. "They had built a wonderful airline and they weren't anxious to lose their identity. As with many things, there was emotional resistance, and they thought US Air people were imposing USAir operating policies on their systems.

"But it did come together," he said. "When we merged with Piedmont we doubled the size of the airline and Charlotte became a wonderful hub."

Still, leadership conflicts simmered. A few years before the buyout, USAir had sought a friendly merger. "It fell apart largely over the issue of leadership," Colodny said. At the time, Bill Howard was Piedmont CEO. "I was willing to let Bill be CEO first for a couple of years, but then, at 65, he would retire and become chairman and I would take over as CEO. But he claimed he had a deal with his board to be CEO until he was 67. I said 'I am sorry, I can't buy that deal' and we walked away from each other." When US Air acquired Piedmont, Howard left. Recalled Colodny: "I would not say we parted on lovey-dovey terms."

Additionally, Colodny said, a dispute with the International Association of Machinists made it difficult to merge work forces. And one other thing: a small, Phoenix-based airline slowed things down. The airline was America West, and CEO Ed Beauvais thought he could obtain slots at Washington National as part of a merger divestiture. "He went to court to try to break up the merger," Colodny said: "It caused a delay; we lost over a year. That particularly hurt the Piedmont operation because management people started to defect."

Now the America West people, who have run US Airways ever since a 2005 merger, have more slots at Washington National than they ever dreamed of. They also have bigger fish to fry.

 

Delta Air Gets 22,000 Applications for 300 Attendant Jobs

 By Mary Schlangenstein - Dec 21, 2012 2:17 PM MT.

Delta Air Lines Inc. (DAL), the world’s second-largest carrier, received 22,000 applications for about 300 flight attendant jobs in the first week after posting the positions outside the company.

“We’re hunting for foreign-language speakers as we continue to expand to all points around the globe,” Richard Anderson, chief executive officer of Delta Air Lines Inc. said. Photographer: Chris Rank/Bloomberg
.
The applications arrived at a rate of two per minute, Chief Executive Officer Richard Anderson told workers in a weekly recorded message. Applicants will be interviewed in January and those hired will begin flying in June, for the peak travel season.

“We’re hunting for foreign-language speakers as we continue to expand to all points around the globe,” Anderson said. “We are experiencing a phenomenal response to the job posting.”

Delta’s applicant rush reflects the demand for jobs amid a 7.9 percent U.S. unemployment rate and the interest in an industry where flight privileges are a prized employee benefit. The Atlanta-based carrier received 100,000 applications for 1,000 jobs when it last hired flight attendants in October 2010.

While Anderson put the number of positions in the latest round of hiring at about 300, Betsy Talton, a spokeswoman, said it could reach 400. As many as 30 percent will speak languages including Japanese, Hindi, Mandarin and Portuguese, she said.

Delta has said it plans to develop Seattle into a U.S. West Coast gateway for flights to Asia, adding service to Tokyo’s Haneda airport and to Shanghai. In October, the Atlanta-based airline said it would add flights between Paris and 11 U.S. cities in 2013.

US Airways Group Inc. (LCC) attracted 14,000 applicants when it hired 420 attendants in December of that year.
 
Airline Employment

U.S. passenger airlines employed 384,310 workers in October, down 1.3 percent from a year earlier, the U.S. Transportation Department’s Bureau of Transportation Statistics said in a report today. The total for October, the latest month for which government statistics are available, was the lowest since May 2011, the agency said.

Five so-called network airlines that include Delta and United Continental Holdings Inc. employ two-thirds of the total workers. They reported 1.4 percent fewer full-time equivalent employees in October from a year earlier.

Low-cost carriers such as Southwest Airlines Co. and JetBlue Airways Corp. reported a 1.6 percent increase, BTS said.

Delta fell 0.7 percent to $11.86 at the close in New York as most other members of the Bloomberg U.S. Airlines Index (BUSAIRL) also declined. The shares have risen 47 percent this year.

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.net

9 easy ways to make a flight attendant go insane

An anonymous airline crew member lets rip on passengers' most annoying habits

 

Sure, she's smiling now. But just wait till you try and go to the toilet when the seat belt light is on. (File photo)I’ve been working for a well-known commercial airline in Asia for a few years now. On a good day, it’s a five-star hotel in Shanghai, shopping in Paris or winning a game of roulette in Las Vegas. On a bad one, it’s emergency landings, 12-hour long delays and an endless stream of obnoxious/annoying passengers.

 

Don’t let our svelte figures, exquisitely tailored uniforms and perfect smiles fool you. You do not want to get on the bad side of the person who serves you food, brings you drinks and keeps you safe when you’re stuck in a tin can flying at 35,000 feet.

 

I’ve put together a list of the nine things that really get under a flight attendant’s skin. Worst of all these crimes against aviation are so common sense -- yet they happen on every single flight.

1. Adopt an 'I paid for my ticket so I can whine all I like' attitude

“My seat is too small.”

“The flight is delayed.”

“The coffee is too hot.”

“The tea tastes weird.“

"The airplane is ugly.”

 

Stop it right there! I’m sorry your bottom is too big for the seat. Next time upgrade to first class.

And you know what? The plane is delayed because your fellow passenger couldn’t decide which bottle of vodka he wanted to buy at the duty free shop, so he was 30 minutes late to the gate.

Keep complaining and your next drink will be a gin and tonic stirred with a high heel.

 

2. Play it like Nintendo

Unless it's an emergency, for the sake of all flight attendants worldwide, just pretend that little call button doesn't exist. Just keep on pumping that flight attendant call button. Mario & Luigi aren’t coming to rescue you but the angry King Bowser will.

According to international regulations, one flight attendant is responsible for up to 50 passengers. This means that, worst-case scenario, the cabin crew could be giving someone CPR or delivering a baby while you or your precocious little darling is jamming on that button.

Here’s my advice: just get up and walk to the nearest galley and ask for what you need. Stretching your legs, getting up and walking around the cabin may even help prevent complications such as blood clots, cold feet and the breakdown of your skin.

 

3. Pretend you’re in a restaurant

“Today, we have beef steak with lemon grass and barbecue pork with Japanese rice. Which would you prefer?” asks the beautiful flight attendant.

The man turns to her and says, “I’ll have fish. Do you have fish? I want fish. I can’t eat anything else but fish.”

First of all, a galley on a plane is not a kitchen. We do not cook.

Here’s how to get your fish: send the request when your book your flight if you wish to have a specific meal.

4. Ask unintelligent questions

The dreaded glass of mystery liquid. Also known as water.When faced with a glass full of dark water with bubbles and ice, what do you think it is? That’s correct, it’s cola. How about that clear liquid? Yes, that’s water.

Let’s imagine the whole row is asking these mundane questions, even though they are sitting next to each other. After being asked by around 50-plus people, I am eventually so depressed I just stop answering.

A passenger once even asked me if we had iPads on board. I was speechless.

5. Laugh and whisper

Talking behind someone’s back is rude. It’s even ruder to look at someone and laugh in their face, and then whisper/giggle to the person beside you in your own language.

Last time that happened, I accidentally parked a drink cart in front of the restroom and trapped that funny man inside. Karma comes fast.

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6. Talk on the phone after the plane has left the gate

"I'm pretending I didn't hear you tell me to switch off my electronic device as I think that whole 'communication interference' stuff is a load of poppycock."Not turning your phone off is a surefire way to make the cabin crew go berserk. I have to admit, I take great pleasure in yelling at people to switch off their phones. I make a really serious face, then point at the phone and say “OFF NOW.”

 

The fact is: communicating with the control tower is difficult enough. Pilots aren’t sitting there chit chatting about fashion or pop stars. They are trying to take off and not get struck by another plane that might be landing seconds later, all while your phone’s signal is potentially interfering with communications.

7. Be an irresponsible parent

A young mother once asked me put some coffee creamer in her baby’s bottle. Really. For your information: formula can be carried onto the plane with you.

Meanwhile, some parents assume flight attendants will happily babysit their kids for them while they do something else, like nap or watch a movie.

That’s not in my job description. Not every flight attendant loves children. Babysitting you is already hard enough.

8. Complain that your bags are too heavy

Flight attendants are happy to close the overhead bins. Cramming things into them is another story. (File photo)You came all the way from home, dragged your bags down the stairs to the door, put them in the trunk of the car, drove all the way to the airport, dragged them through security and all the way to your seat.

Suddenly, the bags are too heavy for you to put into the overhead compartment by yourself.

Passengers don’t realize that flight attendants don’t get compensated for any injuries that come of this common situation. The deal is: you brought it, shove up there yourself or we throw it out the door and under the plane.

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9. Ignore the seat belt sign

“When the seat belt sign is on, please take your seat and fasten your seat belt.”

Pretty obvious, isn’t it?

Yet on every single flight there will be people getting up to go to the washroom when the seat belt sign is on. This is somewhat understandable -- if you’re about to wet your seat. Or worse.

And then there are the passengers who just want to walk around and talk to people.

When the sign is on during takeoff, landing or during turbulence, it’s very dangerous to be wandering off. Your face could be smashed into the sink or another passenger’s head.

6 in-flight myths, busted

Why do you always get sick on a flight? Why do we "brace?" Why do flight attendants talk like that? We have the answers

By Jane Leung 5 January, 2012

 

From the moment you enter an aircraft you are pummeled with instructions: turn your phone off, put your window blind up, put your seat upright, eat this slop.

How often do you stop to question why?
Airlines aren’t trying to make travel painful. There’s a good reason for nearly every in-flight burden.

She, and flight attendants, know how to make you listen.

1. Why flight attendants talk like cyborgs

Myth: Flight attendants are bossy robots.
Fact: Flight attendants need you to listen and cooperate.
Does your flight attendant remind you of “Seven of Nine” from “Star Trek -- Voyager”? Flight attendants often take on the hot Borg’s direct and robotic demeanor to make passengers listen.
They “will go ahead and put your seat in the up-right position” and they’re going to “need you to take your seat.”
A recently published article at Forbes, written by staffer Jeff Bercovici, took an inquisitive look at the assertive vocabulary used by flight attendants.
The article found that the extraneous words like “will go ahead” are linguistic techniques to catch the passenger’s attention early in a sentence so the request doesn’t have to be repeated, which is especially handy in an emergency.


"I'll just make do for the last 30 minutes."

2. Why we open window blinds and put seats upright

Myth: We do this to “reset” the plane for the next round of passengers.
Fact: It's a subtle safety feature. Pulling up the blinds makes us alert to potential hazards.
Elin Wong, corporate communications manager for Cathay Pacific, explains, “We ask all passengers to pull up the window shelf before landing, so that any abnormalities outside the aircraft can be duly observed by the cabin crew or passengers and be reported to the cockpit crew if necessary.”
As for that stiff 90-degree seated incline, it's all about reducing impact. A former Air Canada flight attendant tells us that shifting those few centimeters forward reduces the distance from your head to the seat in front of you.
It also makes it easier for the passenger behind to evacuate.


That arm rest is dirtier than what's going through that mask.

3. Why we get sick from planes

Myth: Re-circulated air in a plane makes us sick.
Fact: Re-circulated air is actually very sanitary; we get sick from what we touch.
According to Boeing, cabin air is constantly being replaced by pressurized fresh air from outside. That air also passes through filters that remove 99.97 percent of any airborne pathogens like bacteria and viruses.
But frequently used surfaces like tray tables, pillows, seat arms, seats, toilets and sinks are less sanitary, often contacted by hundreds of passengers in a single day.
Popular science and technology blog iO9 consulted microbiology experts who explained that one toilet per 50 passengers is a far more likely reason you'll fall ill than the air.
The answer -- don't bother with the facial mask, opt for disinfectant wipes and hand sanitizer instead.
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Silence makes the taste grow fonder.

4. Why airline food tastes bad

Myth: Airline food is disgusting because it's cheap and pre-processed.
Fact: Airline food actually tastes OK; it's the noise from the engine that distracts us.
It’s hard to comprehend at first, but the University of Manchester research article, “Effect of background noise on food perception” published by the BBC, reported that if background noise is too loud, it might draw attention away from the taste of food and towards the noise.
In the article, researcher Andy Woods fed various foods to people while they were listening to nothing or noise through headphones. He found that noisy conditions caused the subjects' perception of saltiness and sweetness to lower, and their perception of crunchiness to increase.
So the loud and constant noise from an aircraft's engines could have the same effect, he explains.


A proven position for injury minimization.

5. Why we brace during an emergency

Myth: We brace to make us feel like we have a chance of surviving; we brace to ensure we are still and calm during an emergency; we brace to preserve our dental records so coroners can identify us after a crash.
Fact: The Australian Government Civil Aviation Safety Authority clarifies, “It has been proven that passengers who assume the brace position sustain substantially less serious injuries than other passengers.”
Furthermore, the Federal Aviation Administration regulatory guideline says bracing is meant to reduce secondary impact, by positioning the body (particularly the head) against the surface it would strike during impact.
The other reason to brace is to reduce flailing around. And we all know that flailing -- in any situation -- will get you hurt.


"Words With Friends" can get you, and your airline, into trouble.

6. Why we turn off cell phones

Myth: Cell phone signals interefere with aircraft electronics.
Fact: Airlines are adhering to aviation guidelines that restrict the use of personal electronic devices (PEDs), even though evidence that they interfere with aircraft systems is lacking.
Airlines aren’t actually 100 percent sure that phones will interfere with aircraft systems. After all, a recent study claimed nearly 6.5 million people in 12 months left their phones on while they flew in and out of the United Kingdom without any problems.

But most aviation authorities, such as the Federal Aviation Administration (FAA), prohibit the use of cell phones and other PEDs unless it can be proved they definitely do not interfere.
To get approval to use a mobile, the airline would have to test every single model of phone with every single model of aircraft to make sure it doesn’t interfere with both the plane and ground networks -- which would be just a little too time consuming and expensive.
It's far easier just to ask people to turn their phones off.

More Things Your Flight Attendant Won’t Tell You

Flight attendants reveal their pet peeves and share travel etiquette tips.

By Michelle Crouch

1. Do not poke or grab me. I mean it. No one likes to be poked, but it’s even worse on the plane because you’re sitting down and we’re not, so it’s usually in a very personal area. You would never grab a waitress if you wanted ketchup or a fork, would you?



2. We’re not just being lazy. Our rules really say we aren’t allowed to lift your luggage into the overhead bin for you, though we can “assist.”


3. Is it that difficult to say hello and goodbye? We say it 300 times on every flight, and only about 40 people respond.


4. I don’t care if you want to be in the mile-high club, keep your clothes on. Who decided the mile-high club was something that everyone wants to do anyway? It’s cramped and dirty in those bathrooms.


5. If you hear us paging for a doctor or see us running around with oxygen, defibrillators and first aid kits, that’s not the right time to ask for a blanket or a Diet Coke.


6. The only place you are allowed to pee on the airplane is in the lavatory. Period.


7. Don’t ask us if it’s okay to use the lavatories on the ground. The answer is always yes. Do you think what goes into the toilet just dumps out onto the tarmac?


8. You really expect me to take your soggy Kleenex? Or your kid’s fully loaded diaper? I’ll be right back with gloves.


9. Sure, I don’t mind waiting while you scour the seatback pocket and the floor for candy wrappers and other garbage, then place them in my bag one by one. I only have 150 other passengers to serve.


10. I’m sorry it’s taking forever to get you a wheelchair, but that’s one thing you can’t blame the airline for. The wheelchair service is subcontracted to the cities we fly into, and it’s obviously not a top priority for many of them.

What Your Flight Attendant Won’t Tell You

By Michelle Crouch

1. Want to start off on the wrong foot with me?

Put your carry-on in a full overhead bin, leave it sticking out six inches, then take your seat at the window and wait for someone else (me!) to come along and solve the physics problem you just created.

2. Yes, passengers are incredibly rude...

but stealing a beer, cursing out passengers, and jumping out of a plane is not the way to handle it. You disarm an unruly passenger by introducing yourself, asking his name, and saying something like ‘I’ve been incredibly nice to you for three hours. Why are you treating me like this?’ Generally that gets the other passengers on your side—and sometimes they’ll even applaud.

3. We don't have a boyfriend in every city.

And our median age these days is 44.

4. An all-too-common scenario?

I hand you a cup of coffee and say, ‘Cream and sugar?’ You say, ‘What?’ I say, ‘Cream and sugar?’ You say, ‘What?’ Come on, people. What do you think we’re going to ask after we’ve handed you coffee? Your favorite color?

5. If you’re traveling with a small child and you keep hearing bells, bells, and more bells,

please look to see if it’s your child playing with the flight attendant call bell.

6. The lavatory door is not rocket science.

Just push.

7. If you have a baby, bring diapers.

If you’re diabetic, bring syringes. If you have high blood pressure, don’t forget your medication. That way, I’m not trying to make a diaper out of a sanitary pad and a pillowcase or asking over the intercom if someone has a spare inhaler.

8. Just in case you hadn’t noticed, there are other people on the airplane besides you.

 

So don’t clip your toenails, snore with wild abandon, or do any type of personal business under a blanket!

9. If you’re traveling overseas, do yourself a favor and bring a pen.

You would not believe how many people travel without one, and you need one to fill out the immigration forms. I carry some, but I can’t carry 200.

10. Passengers are always coming up to me and tattling on each other.

‘Can you tell him to put his seat up?’ ‘She won’t share the armrest.’ What am I, a preschool teacher?

11. I hate working flights to destinations like Vail and West Palm Beach.

 

The passengers all think they’re in first class even if they’re not. They don’t do what we ask. And the overhead bins are full of their mink coats.

12. Do you really have to go to the bathroom right now, while we’re wrestling a 250-pound food cart down the aisle?

You can’t wait 90 seconds for us to pass?

13. Is it that difficult to say hello and goodbye?

We say it 300 times on every flight, and only about 40 people respond

How NOT to Act When Flying

Published: Friday, 25 May 2012
1:11 PM ET By: Darren Booth


It seems like every week there's a news story about an airliner being diverted. Or someone being booted off a flight, due to questionable passenger behavior.

This week's examples include a US Airways [LCC 12.22 0.06 (+0.49%) ] jet that was diverted to Bangor, Maine because a passenger claimed she had a surgically implanted device. She handed a flight attendant a note, written in French, seeking help and stated that she had an object in her body that was out of her control, according to reports.


The other example was a woman being told she couldn't fly due to her "offensive attire." The T-shirt she was wearing read, "If I wanted the government in my womb, I’d f--- a senator." The expletive was fully spelled out and pro-choice, political sentiment aside, American Airlines denied her boarding. American's contract of carriage allowed them to refuse transport of the passenger since she was, “clothed in a manner that would cause discomfort or offense to other passengers.”




A little common sense goes a long way. But it seems many people need a reminder of how NOT to act on a plane. Here are a few tips.


Do NOT get drunk. This type of passenger makes the news most often, it seems, as it's the easiest way to make a fool of yourself. While having a cocktail before your flight may relax you, remember you're about board a flight and have a hundred or so other people around you. Flying should not be considered a party scene.


Do NOT curse at flight attendants. Being belligerent will get you no where and often can get you a one-way ticket off the airplane. I boarded a flight once where a passenger told the flight attendant to "F- off" when being asked to change seats. The captain decided the passenger wasn't fit to fly and booted her off the flight.


Do NOT allow your kids to act out. Traveling with children can be stressful for parents, but it's important to ensure their actions aren't causing discomfort to fellow passengers. Kicking seatbacks or climbing over seats should probably be restricted.


Do NOT attempt to get into the cockpit. As I type this there is breaking news a passenger aboard an American Airlines flight bound for Miami attempted to gain access to the flight deck. This is a sure fire way you'll find yourself in zip-tie handcuffs until authorities cart you away after landing.


Do NOT wear offensive clothing. I'm all for free speech, but there's a time and place for making a statement. Save it for a rally — airports and airplanes are not appropriate places to wear clothing with expletives written on them.


Do NOT mention the 'B-word'. No, I'm not talking about a female cow, but rather the b-o-m-b word. It has no place in conversation in this post-9/11 world.


Finally, if you're approached by authorities for any reason when flying, simply remain calm and answer their questions. I was stopped by two Federal Air Marshals last month for a totally harmless reason, but politely answered their questions and was on my way.

AMR bankruptcy: Analysts see US Airways merger as American's next step

By JOHN STANCAVAGE Tulsa World Business Editor



Published: 5/20/2012 2:38 AM


Last Modified: 5/21/2012 6:42 PM


American Airlines steadfastly resisted filing bankruptcy for a decade before finally succumbing last November. Is a merger the next inevitable step for the fiercely independent airline?


Several industry analysts think so, but leaders at parent AMR Corp. are sticking with a wait-and-see outlook.


Undoubtedly, financial officers at many airlines are running the numbers to see what a combination with their particular carrier would produce.


The possible merger partner that has received the most attention so far is US Airways, mainly because its CEO, Doug Parker, won't stop talking about American.


In a move that some observers call unprecedented, Parker already has cozied up to American's three major unions, offering a rough version of what a contract with his airline would look like. The terms are attractive enough that American's pilots, flight attendants and mechanics have said they'd support joining with US Airways.


"Doug Parker wants to conquer the world," said Bob Herbst, founder of AirlineFinancials.com. "Right now he wants American Airlines. All his comments in the press are because he wants everyone to know he's ready to make a deal."


Herbst, who was a commercial airline pilot for 35 years, said he guesses there's a 95 percent chance US Airways will merge with American.


Other combinations have been rumored, but Herbst discounts them.


"Due to the size of United and Delta, there is no way the (government) would approve either of those airlines becoming larger with American assets," he said.


American, meanwhile, was the nation's No. 1 airline until 2007. But declining fortunes and consolidation in the industry changed that.


"Fresh out of their own bankruptcies, Delta and Northwest Airlines merged in October 2008, creating the largest airline in the world," Herbst explained. "Not to be left behind, in September 2010, United and Continental Airlines merged to become the biggest."


Suddenly, American was the third-largest airline.


A merger with US Airways would put American back on top, the consultant said.


"Without merging, both American and US Airways will face major challenges moving forward as they attempt to compete against Delta Air Lines and the merged United/Continental Airlines," he said.


'Makes the most sense'


Sterne Agee analyst Jeffrey Kauffman said he thinks US Airways has a "reasonable chance" of merging with American.


Seth Kaplan of Aviation Weekly said American's stand-alone business plan appears workable, although its smaller size could pose some issues.
"Some of American's projections may be a little too rosy, but then you could say the same about US Airways' plan," Kaplan said.


Mergers are complex, the Aviation Weekly analyst said, and can take years to gel. Along the way, there can be a "cost creep," he said.


"A merger between American and US Airways would not be perfect," Kaplan said. "But the question really is: Would it be better for the two airlines to do it or not? And the answer is that it would be better do it."

US Airways seems not to be too worried that it will have to update contracts with its existing union members, who are among the worst compensated in the industry. AirlineFinancials.com calculates it will cost US Airways about $600 million to bring its labor up to parity with American's.


Other bidders may emerge, Kauffman said, but US Airways' chances of being the successful bidder are helped considerably by its tentative agreements with American's unions, he said.

"A deal with US Airways is what makes the most sense for creditors," another analyst, Hunter Keay of Wolfe Trahan & Co., told Bloomberg News.


"It's always struck me as odd that AMR was completely unwilling to listen to US Airways because the offer is probably compelling and US Airways is a motivated buyer."


'On our own terms'


AMR seems determined to complete its bankruptcy before discussing deals.

Kevin Cox, vice president of state and community affairs for American, said in a February interview with the Tulsa World that American wants to present a single business plan to the court and emerge as a "strong independent" carrier.


If a merger offer appeared at that time and was attractive, "we would be able to do it on our own terms," Cox said.


In recent weeks, AMR has softened its position slightly, saying that it would be willing to explore strategic options - including a merger - in response to requests from the unsecured creditors committee.

The committee would have a key role in the process. American currently has until late September to present its reorganization plan to the court. For any other proposal to be considered before then, a majority of the unsecured creditors would have to petition the judge, who would have to approve bringing the option forward for consideration.


Herbst said there's a big reason AMR's top leaders don't want to entertain a deal while still in bankruptcy.


"If AMR does the merger during bankruptcy, it means a monumentally smaller payout to executives," he said.

Herbst also contends a combination would be costlier in general after bankruptcy because the acquirer would have to deal with the stock that had been created, new debt and airplane leases.


American Airlines officials scoff at the idea that CEO Thomas Horton and his team are being driven by personal greed, and say Herbst's analysis is off base. The top leaders have a fiduciary duty to act in the best interest of creditors while in court and later must answer to shareholders, according to this argument.



Forecast for Tulsa workers


What would a merger with US Airways look like for Tulsa?



American employs about 7,000 in Tulsa, including 5,000 mechanics and related groups. The airline's estimate was 2,100 mechanics cut in Tulsa, plus several hundred other employees.


Officials decreased the number of mechanics targeted by about 1,000 in a "final, best offer" that was rejected last week by the Transport Workers Union.

US Airways, in contrast, projects it would cut 450 jobs at the local maintenance center and do what it could to protect pay.

Perhaps the key issue is the long-term outlook. Would US Airways stick with a system that keeps maintenance heavily in-house? Would Tulsa continue to be a key asset? And what would happen at the next contract negotiation, with no ticking clock on a deal or other incentive to "win over" the union?

Herbst said American Airlines employees must decide which vision of the future allows the airline to make the most revenue. The more profitable American is, the greater success unions should have in arguing for their share.


Many of American's union members still look back wistfully at their pay and benefits prior to a concessionary contract signed in 2003. But in those headier days, American was No. 1 in the industry, and just as important, controlled the high-profit business travel market.

"American could charge premium prices in those days," Herbst said.


The airline's passenger fare yield premium started to deteriorate in the first half of 2010, according to figures from AirlineFinancials.com.

A merger with US Airways might not only help American attract more business travel, but also the combo's sheer size would be formidable, the analyst said.


"Combining the revenues of American and US Airways would move the merged carriers to the top of the largest airline in the world list," Herbst said.
"History shows a long list of once-great airlines that failed. Each of those had one thing in common. They all failed to remain competitive. American and US Airways must merge to remain long-term competitive."



Advantages of an American Airlines-US Airways merger


Analysis by AirlineFinancials.com


$500 million to $700 million: Annual reduction in US Airways' core costs


$350 million to $450 million: Annual premium/business revenue increase.


10 percent to 20 percent: fuel expense reduction from newer jets currently on order for both airlines,


$1.8 billion to $2.5 billion: Total cost saving synergies within 12 months of merger.
Analysis by AirlineFinancials.com

Want to Sit With Your Family on an Airplane? That'll Be $25, Please

By Davis MacMillan May 24, 2012 12:58 PM 0 0
Back in February, we took note Florida-based carrier Spirit Airlines (SAVE), who saw themselves as a “poster child for extra fees.” CEO Ben Baldanza claimed to be proud of his company’s high fees and to view them as an issue of consumer choice.



Of course, lately, Spirit’s fees have gone from irritating to controversial.
First, the company refused to refund a dying veteran’s airfare, as they do not give refunds. After a week’s worth of protest, Baldanza agreed to pay for the man’s ticket himself, and gave a $5000 donation to the Wounded Warriors charity.


In another strong PR move, the company announced the prospect of $200 fees round-trip for a single carry-on bag.



However, far from distancing themselves from Spirit’s fee-obsessed business model, many air carriers are imitating it. Right now, travelers without frequent flyer status could be asked to pay as much as $25 to avoid getting a middle seat.



According to The Week, passengers on American Airlines (AMR), Delta (DAL), Frontier (FRNT), and US Airways (LCC) can all pay extra to guarantee a window or aisle seat. Spirit passengers pay between $5 and $15 for any seat assignment.



Customers can still get a window or aisle seat without paying in advance, but their chances are lower. This makes things especially difficult for families traveling together, who have to pay in advance to make sure they share a row.


Those looking to get a window or aisle seat without paying can wait until frequent fliers are bumped up to first class but they may wind up with nothing. The frequent fliers, by the way, have a vastly larger number of seats open to them when they purchase tickets. In general, airlines reserve a good number of seats for their regular customers.



Obviously, consumers are upset. The trouble is, there’s not a huge amount they can do as higher fees become the norm among airlines. On their end, airlines are looking to increase their bottom lines in the face of rising fuel costs and other expenses.



So what’s the solution? Drive. Or at least plan ahead.

American Airlines to explore merger options

By Soyoung Kim and Kyle Peterson

May 11 (Reuters) - AMR Corp, parent of American Airlines, bowed to pressure on Friday from its unsecured creditors, including its largest labor unions, and said it would explore merger options while it is still in bankruptcy.

AMR, which has been in Chapter 11 since November, had long said it intended to reorganize as a stand-alone carrier, shrugging off interest expressed by rival US Airways Group Inc .

The carrier, however, has faced mounting pressure from vocal members of its creditors committee who believe a better future for AMR can be secured by merging with US Airways.

In reversing its stance, AMR said it wanted to assure stakeholders that it would pursue the best possible outcome for the airline.


"To be clear, American has committed to work in collaboration with the (creditors) committee to develop only potential consolidation scenarios and this agreement does not in any way suggest that a transaction of any kind or with any particular party will be pursued," Beverly Goulet, AMR's chief restructuring officer, said in a statement.

US Airways has been courting AMR creditors, especially disgruntled labor unions that say an AMR/US Airways tie-up would create a stronger carrier and save more jobs than AMR's stand-alone plan.

"We look forward to engaging in the AMR process to demonstrate the significant advantages of our plan to maximize value for all constituents," US Airways said in a statement.

US Airways said in April that a merger with AMR would generate at least $1.2 billion a year in new value beyond the benefit that could be passed to employees of the combined carrier. AMR has said its stand-alone plan would generate $3 billion in new revenue and savings by 2017.

AMR's chief executive, Tom Horton, had said the airline was focused solely on its bankruptcy, calling those who would attempt to acquire the company in bankruptcy "opportunists." But he never ruled out taking a merger partner after bankruptcy.

Other potential suitors also have considered a deal with AMR, including Delta Air Lines and private equity firm TPG Capital, sources have told Reuters.

Robert Mann, an airline consultant and former AMR executive, said AMR's new openness to mergers could flush out more potential partners.

"I think it was already headed there anyway," he said. "It's a recognition of the inevitable that there would be some sort of transaction."


CREDITOR REVOLT


American's three labor unions, which are part of AMR's nine-member creditor committee, have said a merger with US Airways would create a stronger airline and save more jobs than AMR's stand-alone plan. US Airways has not made a bid for AMR, which has a court-granted right to reorganize without intrusion by outsiders. That right extends to September.


"The important point is that both the debtors and the committee are in alignment that it is incumbent on them to explore strategic alternatives on a collaborative basis as part of this chapter 11 case," Jack Butler, creditors committee counsel, said in a statement.

Unions representing pilots and flight attendants at American Airlines on Friday again denounced the company's stand-alone business plan, calling on the managers to explore merger options with rival US Airways.


The workers staged rallies in New York and Fort Worth, Texas, where AMR is based, to declare "no confidence" in the company's ability to produce a viable business plan.

The protests came as the two sides prepared to spar in court on Monday over AMR's request to void the labor contracts it has with the unions. The airline and its unions are on a two-week hiatus from their court battle over that request.


"US Airways management's plans for merging the two carriers call for preserving and enhancing the American Airlines brand, retaining our Fort Worth home and saving thousands of jobs that will be eliminated under AMR management's stand-alone plan," David Bates, president of the Allied Pilots Association (APA), said in a statement.

The airline, which has about 74,000 full-time and part-time workers, has said it must cut 13,000 union jobs.

The carrier won steep concessions from labor in 2003 as it dodged bankruptcy at the time. AMR had been locked in fruitless labor talks with unions for years before filing for bankruptcy.

The APA, which has been negotiating with management this week, has yet to reach a deal. The Association of Professional Flight Attendants also said it has had talks with management.

Meanwhile, the Transport Workers Union, which represents 26,000 ground workers, dispatchers and other groups, is voting on AMR contract proposals for its seven work groups.

The deals do not have the endorsement of union leaders, but if they are ratified, they would cut the number of TWU-represented jobs targeted for elimination to 6,400. That compares with 9,000 jobs AMR said it would cut if it voids the worker's current deal and imposes new terms.

Merger hangover continues to pain United



April 17, 2012: 11:46 AM ET


A battle is brewing in Houston between United Continental Holdings and Southwest Airlines. Consumers hoping to fly south of the border may end up the victors.


By Cyrus Sanati


FORTUNE -- United Continental Holdings is learning the hard way that it isn't wise to mess with Texas. The recently merged airline's decision to choose Chicago as its corporate headquarters over Continental's hometown of Houston appears to have resulted in a big loss of political capital with the city and its airport authority. The move could end up hitting United's bottom line hard as rival Southwest Airlines targets Houston to be its first international hub.

There are a lot of unintended consequences when it comes to merging two companies, especially two major international airlines. When Chicago-based United (UAL) announced its merger with Houston-based Continental at the end of 2010, the decision to move the newly combined airline's headquarters up to Chicago wasn't given much thought. United had struck what it had said was a sweetheart tax and rental deal with Chicago city officials a year earlier to keep the airline's headquarters in the Windy City in the event of a merger with a rival airline. Houston, apparently, never had a chance.

The loss of Houston as Continental's headquarters meant moving most of its major corporate functions to Chicago. Continental's then chief executive, Jeff Smisek, not even a year into the job, became the combined airline's chief executive. Smisek was quick to make the move out of Houston but the mood at Continental's headquarters in downtown Houston was somber, as much of the staff did not want to move to Chicago.

Continental has always enjoyed a very good relationship with the city of Houston. The airline's chief executives were tight with the city's mayors and the airline got basically whatever it wanted – both big and small. When the airline's logo on its downtown headquarters violated a city ordinance that banned corporate advertising on skyscrapers, Houston's city council quickly voted to change the law, allowing Continental's blue logo to fly high. The city let Continental build itself a whole new terminal at Houston's Bush Intercontinental Airport last decade and is contributing a third of the $1 billion needed to build out another terminal for the airline, which is currently under construction.

The strong relationship helped the airline flourish. Eventually, Continental controlled around 80% of the air traffic in and out of Houston's Bush Intercontinental Airport, which is located on the north side of town. This total domination in air traffic gave Continental strong pricing power that has padded its bottom lines for years. Its only real competition in the city was with Dallas-based Southwest Airlines, but it operated out of Houston's smaller airport, Hobby, located 30 miles southeast of Intercontinental, and was limited to only short-haul domestic flights.


Perhaps most importantly, Continental dominated Houston's international market. The vast majority of these flights were jumps into Mexico, the Caribbean, Central America and the Northern part of South America. Eventually, Continental controlled 97% of the short to medium-haul international air traffic out of Houston. Its position as the main feeder airline into the city's only international airport allowed it to have a virtual monopoly on all international air traffic going to and from the city.


Gordon Bethune, former CEO of Continental, recently said that while he was chief executive, he had a sort-of gentleman's agreement with the mayors of Houston that Intercontinental would be the city's only international gateway and that Hobby, which was the hub for Southwest Airlines, would only be a domestic airport. In return, Continental would continue to be a good corporate citizen and work to improve air traffic at the big airport.

But all that intangible political capital was trashed when the airline merged with United. The loss of the Continental name was bad enough for the city, but the loss of the headquarters was a big blow to its ego. While Houston is still United's largest hub with over 17,000 employees living and working in the city, the loss of the C-suite appears to have been an unforgivable sin.

Southwest Airlines (LUV) is hoping to cash in on United throwing away its golden goose. It has brazenly asked Houston's airport authority to pay nearly $100 million to upgrade Hobby to receive international flights. The upgrade would allow Southwest to use Hobby to launch truly competitive international air service to the same locations where Continental has held an almost near-monopoly in non-stop service for years. This would, invariably, force Continental to lower prices on competing routes or to even pull out of some them completely if Southwest is able to put enough pressure on its margins.

This possible Southwest expansion also has larger implications for the airline industry. Southwest inherited international air service to a few destinations south of the border and to the Caribbean when it acquired AirTran in 2010. It has just started to put plans in motion to expand international service - under the Airtran banner, for now - launching routes to Mexico from Orange County, CA and San Antonio, TX. But unlike those locations, Houston is a major hub for Southwest and is seen as a major gateway to Latin America. If Hobby does go international, Southwest will be able to fill its Latin America-bound planes with passengers from any of the 36 domestic destinations it already serves through Hobby.

United is understandably upset about Southwest's attempt to move in on its cash cow. Southwest could target 85% of United's international routes out of Houston if the city signs off on the expansion at Hobby. United says that a Southwest expansion could force it to lay off hundreds of workers and could force it to end its support for the $1 billion expansion at Intercontinental that is already underway. The airline would also discontinue plans to introduce air service to four new international destinations and would not add to additional frequencies in existing markets in Houston over the next three years, a United spokesperson told Fortune.

Southwest believes United is overreacting and says that competition would be good for Houston. It would only have five gates dedicated to international service at Hobby- with expansion up to nine if all goes well. United currently serves 54 destinations in Mexico, the Caribbean and South America, with 103 daily departures. With five gates, Southwest claims that it could offer just 25 international flights out of Hobby per day, a quarter of that of United.

But it could still do damage if those flights were targeted at Continental's biggest money makers, which it surely would. It its defense, Southwest has launched a website dedicated to its struggle to "free" Hobby Airport. The airline plays up its Texan roots and makes it a point to say that it is competing against "Chicago-based United-Continental Airlines," and not the beloved Houston-based Continental.


Last week, Houston's airport authority recommended that the city council approve the Southwest expansion, saying that it would add millions to the local economy and would create, not decrease, jobs in the Houston area. United has struck back saying that the Airport authority's study was flawed. The city council is expected to vote on the matter in May. It looks like, for now, that Southwest is going to get their wish. Meanwhile, United executives are left wondering how different things would have played out if they had just chose to stay in Texas.

Cracks in the Cover-Up
Helen Davey
Psychoanalyst and psychotherapist



Posted: 04/13/2012 11:29 am


The recent very public emotional meltdown of a JetBlue pilot -- just weeks after an American Airlines flight attendant broke down in front of passengers waiting for take-off -- has many people wondering about the psychological health of pilots and flight attendants. What is going on with the employees in our airline industry?

As a former Pan Am flight attendant for 20 years, and now a psychotherapist and psychoanalyst for 25 more, I've been writing at length to sound the alarm about the decline of the American airline industry. In particular, I've discussed the traumatic emotional consequences to employees due to the massive changes they've had to endure.


In addition to ensuring the safety of passengers, pilots and flight attendants understand that their major role is to create the illusion of the flight crew's emotional invincibility. In other words, they reinforce the denial of death. This is what I mean by the words "cover-up." On board every aircraft are passengers who wonder how in the world this huge machine can actually fly. Moreover, they depend upon the comfort of knowing they have a fearless and confident crew taking care of them. Not always an easy task for the flight crew.


Having been a flight attendant, I know how psychologically stressful that job can be. Even in the glory days of American aviation, when all employees got to share in the largesse of the industry's perks, the emotional demands of the work could be grueling. Maintaining an outward persona of friendliness, calm, and utter fearlessness for countless hours on end can be very difficult indeed.

Pilots have a particular problem in this arena, especially when it comes to seeking help. Due to antiquated 1940's FAA standards, it's very difficult, if not impossible, to get help for psychological distress. For example, given that statistics show that at least 10% of the population suffers depression at some time in their life -- and I think that number is vastly underestimated -- then what are pilots to do?

In 2010, four anti-depressants were approved by the FAA for pilot use, but he or she must be grounded for at least six months (usually a year), and subjected to constant re-evaluation for the rest of his or her career. I understand the flying public doesn't want to hear or think about this, but restrictive and sometimes punitive measures discourage pilots from seeking the help they need, even for "talk therapy." This creates an atmosphere of shame about needing emotional help, and is paralleled by the shame that so often accompanies combat-related trauma.

Despite the herculean efforts by EAP programs in unions and airlines to get proper help for vulnerable crew members before their behavior explodes into headlines, some people slip through the cracks. I personally would much rather put my life in the hands of a pilot who has received proper psychological treatment than one who suffers silently but has a "clean" record.

A salient factor that has been left out of media reports and pundit observations about the pilot and flight attendant incidents, is that what they have in common was that both employees began ranting about terrorism. In fact, the flight attendant screamed about having a friend killed in the 9/11 terrorist hijacking of an American Airlines plane, as well as about the recent bankruptcy of her company.

When you see airline crews walking across the terminal with their suitcase on wheels, just know that they are also carrying another kind of baggage. There is always the possibility of a hijacking, a bomb on the plane, or unruly and violent passengers on board. Most people who go about their daily lives and work don't have to be hyper-vigilant about terrorists. They have not had friends or colleagues murdered by political/religious extremists. They don't have to imagine ways in which they can protect their own lives and those who depend upon them in the air. Nor are they plagued by nightmares about getting stuck on another continent with no way to get home.

The "cover-up" of their vulnerability by pilots and flight attendants with a facade of emotional invincibility used to be all about the reality of occasional airline catastrophes, but it has now been extended to the nightmare of worldwide terrorism that is often aimed at airlines. Cracks in the "cover-up" are beginning to show.

There are many reasons for that, and one only has to look at the strained relationships between airline management and employees to understand what's happening. Not only are employees feeling attacked from the outside, but they are feeling equally attacked from the inside by their own companies as well. The executive hierarchy of airlines has changed dramatically, and we are long past the glory days of aviation when men like Juan Trippe led the way, and airline employees were all imbued with a passion for flying.


Long-promised wages, benefits, and pensions are being slashed, and flight attendants are increasingly on the front lines of an angry and disgruntled public with no tools to offer the public for passenger comfort. Mergers and takeovers and bankruptcies are forcing airline employees to adapt to a new and unfamiliar workforce in which many feel like the ugly, unwanted step-siblings in a blended family.

And on top of all these issues, there have always been expectable hardships for airline personnel that come with the job, requiring a stable, flexible person who is physically strong. Passengers take this for granted.

Working conditions have worsened to the point that along with emotional invincibility, physical invincibility is being demanded as well. Extremely long workdays, constant time changes, irregular schedules, and the feeling that their companies don't have their backs, are wearing down the employees to an extent I have not seen before. After all, no human being ever "gets used to" jet lag, exhaustion, sleepless nights, or the feeling of not being valued.


As I've mentioned in previous posts, similar things are happening to employees in other venerable old companies and industries in the past few years. In the wake of the recent economic turmoil, traditional emphasis on pride in one's company and loyalty to it is being replaced by concern only for profit. This has had a shattering impact on the emotional lives of many people.

And nowhere is this more apparent than in the current state of the airline industry. As long as it stays in denial about this massive undermining from within, we're going to see more cracks in the cover-up. Another airline employee succumbing to the pressure, captured on tape and broadcast tonight on your evening news!

Snake Crawls Over Pilot In Australian Cargo Plane While in the Air

(AP) CANBERRA, Australia - An Australian pilot said he was forced to make a harrowing landing reminiscent of a Hollywood thriller after a snake popped out from behind his dashboard and slithered across his leg during a solo cargo flight.


Braden Blennerhassett, unsure whether the snake was venomous, said Thursday that his heart raced as he tried to keep his hands still while maneuvering the plane back to the northern city of Darwin. The snake popped its head out from behind the instrument panel several times, Blennerhassett said, and then the ordeal worsened when the animal crawled across his leg during the approach to the airport.

"I've seen it on a movie once, but never in an airplane," Blennerhassett told Australian Broadcasting Corp., referring to the 2006 movie "Snakes on a Plane," in which deadly snakes are deliberately released in an airliner as part of a murder plot.


The 26-year-old Air Frontier pilot was alone in a twin-engine Beechcraft Baron G58 and had just left Darwin airport on a cargo run to a remote Outback Aboriginal settlement when he saw the snake on Tuesday.

Air Frontier director Geoff Hunt described Blennerhassett as a "cool character" who radioed air traffic control to report: "I'm going to have to return to Darwin. I've got a snake on board the plane."

But Blennerhassett admits he was shaken, telling Nine Network television that his blood pressure and heart rate were "a bit elevated."

"You're trying to be as still as you possibly can and when you've got your hands on the power levers," he told ABC. "You're kind of worried about the snake taking that as a threat and biting you."
"As the plane was landing, the snake was crawling down my leg, which was frightening," he told Nine.


Once the plane had landed, a firefighter spotted the snake but authorities were not immediately able to catch it, Air Frontier official Michael Ellen said. A trap baited with a mouse failed to catch the snake by Thursday, and the plane remained grounded.


Wildlife ranger Sally Heaton said the snake was suspected to be a golden tree snake, a non-venomous species that can grow up to 1.5 meters (5 feet).
Blennerhassett was back in the air Thursday and could not be immediately contacted for comment.


Hunt said he was not aware of a snake being found in a plane before in Australia, but that he had heard of a young chicken being found alive under the floor of a plane and of an escaped juvenile crocodile crawling under a pilot's rudder pedal.