The Airline Crew Report Blog...Lunacy in the Air

2012-01-26T20:54:00.000-07:00

Factory, design flaws caused A380 cracks

Reuters – Thu, Jan 26, 2012
DUBLIN (Reuters) - Airbus acknowledged a combination of manufacturing and design flaws on Wednesday as it confirmed the discovery of more examples of wing cracks on the A380, while insisting the world's largest airliner is safe to fly.

A top executive said the European planemaker had come up with a solution to the cracks on a small number of parts inside the superjumbo's wings, which prompted European safety authorities to order inspections last week.

Airbus confirmed a Reuters report that more examples of the cracks had been discovered during the compulsory inspections, but declined to give further details before a Friday deadline for completing an initial phase of checks.
"The A380 is safe to fly," Tom Williams, executive vice president of programs at Toulouse-based Airbus, said.
The cracks were caused by factors including the choice of aluminum alloy for some of the 4,000 brackets in the wings as well as a type of bolt that put too much stress on the metal.

Engineers have ruled out metal fatigue, Williams said.

Airbus moved to shore up confidence in the world's largest jetliner amid a drip-feed of disclosures about cracking on components used to fix the outside of the wing to its ribcage.

Williams flew to Dublin to give an unscheduled address at an industry conference to dampen any concerns about safety.

European authorities have ordered inspections on almost a third of the superjumbo fleet, or 20 aircraft, after two types of cracks were discovered within weeks of each of other.

Since then, similar cracks have been found inside the 9,100-square-foot wings of at least one of the superjumbos examined under the directive, industry sources told Reuters on Tuesday.
Airbus officials said that having understood the problem, they expected most of the aircraft being tested would show similar evidence of cracks, but that repairs would solve this well before they became a potential hazard.

It declined to say which airline had reported cracks during inspections but the spotlight is expected to fall on Singapore Airlines, which has said it is inspecting six aircraft under phase one of checks involving the most heavily used jets.
The airline opened up the debut A380 service in December 2007.

TECHNICAL FIX
Singapore Airlines said it was carrying out inspections as required and would give an update once they were completed. The checks involve emptying and venting fuel checks for about 24 hours followed by a visual check via a manhole under the wing.
The cracks first came to light during repairs, lasting over a year, on a Qantas A380 severely damaged by a dramatic engine explosion in November 2010 that punched holes in the wing.

At first engineers were unsure what had caused the cracks but the initial microscopic flaws led to the discovery of a second and potentially more serious type of crack, some of them up to two inches long, in the central part of the wing.

The findings caused concern at the European Aviation Safety Agency which turned down Airbus's request for limited extra time to examine the data and ordered mandatory inspections last week.

Designed just before the latest generation of mainly carbon-composite jetliners like Boeing's newly delivered 787 Dreamliner, the A380 is about 60 percent aluminum, the main material used for making aircraft for decades.

"All aluminum structures have cracks. It is the nature of the beast. Each component is designed and modeled according to the desired capacity," Williams said. If one part breaks the structure is designed so that the load is spread elsewhere.

To deal with the unforeseen cracking problem, Airbus is changing its manufacturing processes to ensure smooth operation until at least the next four-year maintenance checks.

Longer term, it plans to switch to a different alloy, restoring the aircraft to its normal lifespan of 25 years-plus.
The wings were designed and built in Britain, which prides itself on state-of-the-art wing assembly. Unions there recently objected to some work being outsourced to South Korea.

Industry executives at the Dublin conference welcomed the clarification and said the problem had been understood.

"When they had the second round of cracks, that got more people's attention and a few airlines were asking questions," an executive said, speaking on condition he was not identified.

An Australian engineering union last week called for all A380s to be grounded pending more investigation. Airbus has dismissed this by saying regulators would be quick to ban flights if they believed safety to be at risk.

(Reporting by Tim Hepher, Editing by Elaine Hardcastle, Gary Hill)

2012-01-26T06:48:00.000-07:00

Flight diverts after 'unruly' smoker battles attendant
By Ben Mutzabaugh,
USA TODAY

Updated 17h 55m ago

Passengers on a United flight operated by Continental Airlines made an unexpected stop in San Antonio last night. That came after a man on the flight apparently couldn't make it the whole way to California without a cigarette.
At least that's according to the San Antonio Express-News, which writes:

A Continental Airlines flight traveling from Houston to California had to be diverted here Tuesday evening because of an "unruly passenger" who reportedly lit a cigarette in the cabin and refused to put it out then fought with a flight attendant, officials said.

There were few details on the man's identity, but KHOU TV of Houston says the FBI took him into custody before Flight 1287 resumed its journey to the Ontario airport in Southern California.

The man could face federal charges, San Antonio police Capt. Cris Andersen tells the Express-News.

The incident delayed the flight's arrival by about two hours.

Continental, of course, is now part of a merged United Airlines under the parent company United Continental Holdings. In its story from November, The Associated Press writes that "the so-called single operating certificate means that, as far as the FAA is concerned, United and Continental are one airline."

2012-01-18T19:43:00.001-07:00

The World's Longest Flight, in Coach
By SCOTT MCCARTNEY
January 19, 2012

Over the Pacific Ocean

It's 2 a.m. aboard Qantas Airways Flight 7 from Sydney to Dallas. The sun is rising. Time for a quick stretch, then a couple of episodes of "30 Rock." Are we there yet?
Five hours remain on the 15-hour trip, the longest flight in the world with a coach cabin. It's an eternity when shoehorned into space with a mere 16 inches of hip width inside the armrests.
Nonetheless, long-haul nonstop flights like this one are increasingly popular among business travelers and high-end tourists who are willing to pay about 20% more to avoid a layover.

Airlines are adding longer and longer non-stop flights but 15 hours in the air can be painful. McCartney on Lunch Break discusses his ride on one of the longest flights in coach and how many episodes of "30 Rock" a person can watch in one sitting.

Qantas launched its Sydney-to-Dallas nonstop flight last year four times a week and will move it to daily service this summer. Delta Air Lines offers Johannesburg nonstop from Atlanta, offering an alternative to European connections. Emirates is expanding its fast-growing network geographically, reaching Los Angeles from Dubai nonstop, for example, and Dallas next month.
"There are a certain amount of people in long-haul markets willing to pay extra to get there quickly, even though it takes a long time," said Bob Cortelyou, Delta's senior vice president of network planning.

The nonstops are possible as more commercial airlines add more ultra-long-range jets to their fleets. The latest offerings from Boeing and Airbus all can travel more than 9,000 miles before stopping for gas. And older models have extended range with strengthened bodies and bigger landing gear and wheels to carry the weight of more fuel. Qantas bought a few 747-400s from Boeing Co. specially fitted with extra fuel tanks to extend their range by about 500 miles, making it possible to reach Dallas from Sydney.
Likewise, passengers are prepared for the long haul.

"You have to know how to pace yourself," said architect and interior designer Beatrice Girelli. For her, the Los Angeles to Singapore 18-hour nonstop she takes about six times a year on Singapore Airlines is like a "spa day." Working long hours on the ground, she finds that time spent six miles above Earth becomes her escape: She sleeps, relaxes, avoids work and enjoys three meals plus Italian or French movies.

Real-estate executive Gerald Giannini, another regular on Singapore Air, has his own routine. Dinner after departure from Los Angeles is followed by a sleeping pill. He wakes up after a full eight to nine hours of sleep—something he never gets even on 12-hour trips to London.

"People hear 18 hours and they freak out. Once you're on it, you understand," he said. "It's a lot less wear and tear on my body than the old way."

Singapore Air pioneered ultra-long nonstops when it began flying 18 hours from both Newark, N.J., and Los Angeles to Singapore seven years ago. Most Singapore Airlines flights stop in Tokyo or Frankfurt to get from the U.S. to the other side of the globe, but the nonstops have found a devoted following among frequent travelers.
The airline launched nonstop U.S. flights offering both business-class and a premium-type coach cabin. But demand for business class tickets was much stronger. For the first time in the airline's history, business class saw higher percentages of seats filled than coach, said Singapore spokesman James Boyd, so the airline switched to a luxurious all-business-class configuration, with 100 lie-flat beds on a plane big enough to carry more than 300 passengers.

Singapore said it charges, on average, about a 20% premium for the nonstop flight over one-stop trips. The flights save about four hours over flights with a Tokyo or Frankfurt stop.

For a trip at the end of this month, for example, the business-class fare from Newark nonstop to Singapore was priced at $8,446 round-trip, while business-class from New York's Kennedy Airport with a stop in Frankfurt for the same dates was $7,446.

The convenience has overcome passenger fears of being airborne so long. Some travelers worried about the safety of flying 15 hours or more. Others worried about dehydration in arid airplane cabins and the risk of blood clots from deep-vein thrombosis.

"Ten years ago, people were hesitant or fearful. Now they're going more and more long-haul. We are seeing more and more acceptance, and fewer queries on the phone" with concerns, said Singapore Air Vice President Mohamed Rafi Mar.

Delta loads up extra water, drinks, snacks and two full meals for passengers on its Johannesburg flights, which actually cover a shorter distance than the Qantas Dallas-to-Sydney flights, but take longer because of wind differences. Also, the cruise speed of the twin-engine 777 is a bit slower than the four-engine 747. The Delta flight is the longest in the world on a plane with two engines.

Flight attendants get two 2½-hour breaks during the flight; pilots work half the flight. Crews have bunks in the ceiling of the 777.

Qantas has six 747s with extended range of about 8,800 miles (7,670 nautical miles) and uses them to fly to Buenos Aires as well as Dallas. The planes take off at speeds 5 knots faster than regular 747-400s because wings have to produce more lift for the heavier plane. Flights from Sydney to London still have to make a stop—no commercial airliner can yet do that without making a stop.

Adding the Dallas flight let Qantas tap into the huge hub of its partner, American Airlines, adding 59 additional routes to the Qantas network. As a result of all those connections, the flights have been performing well since they started in May, said Stephen Thompson, executive manager of global sales for Qantas. Round-trip fares on that route typically cost $1,500 to $2,000. For a trip in early February, for example, a nonstop flight from Dallas to Sydney and back cost $2,052, while connecting service through Los Angeles cost $1,692.

Because of headwinds going back to Australia, the Qantas 747 has to stop in Brisbane for fuel. When weather has been bad, flights have had to make occasional fuel stops, but Qantas said it hasn't been any different than other long routes.

Mr. Thompson said service on the ultra-long flight is much the same as on 12-hour trips to Los Angeles. "The key is to entertain people and get them to relax," he said.
On board the trip in November, Mary Paulus of Okeechobee, Fla., curled up in two seats in coach to sleep. She paid $40 extra to reserve an aisle seat, then had an empty middle seat next to her. She slept, ate and still had time to watch three movies.
"What are you going to do? You know when you get on it's going to be long," she said.

Still, Earl Russell, like so many other passengers, was restless. After being airborne for 12 hours, it seemed well past like time to land, but there were still three hours to go. Mr. Russell, a government employee on his way home in Leavenworth, Kan., tossed a blanket over his head and tried to go back to sleep.

"It's just a very long flight," he sighed.

Write to Scott McCartney at middleseat@wsj.com

2012-01-10T23:54:00.009-07:00

Non Stop Flights Stop For Fuel
By SUSAN CAREY And ANDY PASZTOR

January 11, 2012

Dozens of Continental Airlines flights to the East Coast from Europe have been forced to make unexpected stops in Canada and elsewhere to take on fuel after running into unusually strong headwinds over the Atlantic Ocean.

The stops, which have caused delays and inconvenience for thousands of passengers in recent weeks, are partly the result of a decision by United Continental Holdings Inc., the world's largest airline, to use smaller jets on a growing number of long, trans-Atlantic routes.

United's strategy works when the winds are calm, and it allows the airline to operate less expensive aircraft with fewer cabin-crew members to an array of European cities that wouldn't generate enough traffic to justify larger planes.

But by pushing its international Boeing Co. 757s to nearly the limit of their roughly 4,000-nautical-mile range, United is leaving little room for error when stiff winds increase the amount of fuel the planes' twin engines burn.

Last month, United said, its 169-seat 757s had to stop 43 times to refuel out of nearly 1,100 flights headed to the U.S. A year earlier, there were only 12 unscheduled stops on roughly the same volume of 757 flights.

Such stops are safer than eating into the minimum amount of reserve fuel pilots are required to keep on board, which guarantees that a plane can fly 45 minutes past its destination or alternate landing spot.

The resulting delays can cause passengers to miss connections; require them to be put up at hotels by the airline; and sometimes prompt them to seek compensation for their troubles.

A United spokesman said the company has been offering compensation as a gesture of good will in situations where customers' experiences warrant it.

Remote Canadian fields at Gander and Goose Bay are the primary places to top off the tanks, but United confirmed that some of its 757 jets were also diverted to Iceland; Ireland; Nova Scotia; Albany, N.Y.; and Stewart International Airport, 60 miles north of Manhattan.

"Headwinds returning from Europe are more extreme than we have seen in 10 years," said a United spokeswoman. For the past decade, December headwinds averaged 30 knots, according to United data. But last month, the winds averaged 47 knots, and, on the worst 15 days of the month, 60 knots.

The winds didn't abate this month. In the first eight days of January, United said it made unplanned refueling stops on 14 flights on the six routes most prone to refueling, including four on the Stuttgart-Newark run, four on Paris-Washington Dulles and two each on Stockholm-Newark and Barcelona-Newark. Those routes tend to be nearly as long as the plane's maximum range.

For remote airports such as Goose Bay and Gander, which have been largely bypassed in recent years by jetliners' longer range capabilities, fueling stops can bring in tens of thousands of dollars in landing fees and other revenue a month.

The United spokeswoman said it hasn't substituted larger aircraft on the affected routes because those planes are being used on other parts of the route network of the Chicago-based carrier, which was formed by the 2010 merger of United Airlines and Continental Airlines.

According to industry estimates, a nearly full 757, operating with fewer flight attendants, can be more profitable than a larger plane such as the Boeing 767 carrying the same number of passengers but more attendants.

The refueling-stop issues haven't posed any safety hazards, according to government and industry experts. But a Federal Aviation Administration spokeswoman said agency officials are "aware that United aircraft have made more unscheduled fuel stops this year than last year, and we are looking into the issue." Capt. Jay Pierce, chairman of the pilots union representing Continental pilots, said last week that he asked the union's safety officials to look into the matter.

The fluky weather pattern, which AccuWeather.com meteorologist Henry Margusity blames on La Niña, or cooler-than-normal equatorial ocean temperatures in the Pacific, has also created problems for other airlines using single-aisle 757 jets across the Atlantic.

USAirways Group Inc., which uses 757s between Philadelphia and some European cities, said that in December it diverted four of 112 trans-Atlantic flights due to strong headwinds. Three Amsterdam-Philadelphia flights and a flight from Brussels to Philadelphia gassed up in Bangor, Maine, the company said. Early in January, two more had to stop in Bangor. But the carrier, which has a much smaller European route map than United, has some flexibility to switch to Boeing 767 jets, and a spokesman said it tries to do so in the winter.

AMR Corp.'s American Airlines, which serves six European routes with 757s, said it has had "a few" unplanned fuel stops on westbound flights, but it's "not a daily occurrence." Delta Air Lines Inc., which also flies 757s to Europe, said it didn't experience a single diversion due to fuel constraints in December or so far this month.

United's Continental unit—which relies on 757s to link its Newark, N.J., hub to numerous European destinations—has been most adversely affected. And recently, Continental began deploying some of its 757s on two traditional United routes out of Dulles—to Paris and Amsterdam—that used to be served by larger planes, exposing some westbound fliers to the same diversions that have played havoc with its schedule and reputation.

Jesse Hoy, a TV producer in Los Angeles, was traveling back from Paris with his pregnant wife on Jan. 3 on a Continental plane. Shortly before takeoff, Mr. Hoy said, the pilot said the jet was going to make an unscheduled fuel stop in Gander due to high winds but would try to get passengers to Dulles in time to make connections. Mr. Hoy said the plane landed at 9:50 p.m., the exact time his United flight to Los Angeles was scheduled to take off. The couple didn't make it home for two more days.

The workhorse 757, which entered airline service in 1983 and was produced until 2004, can carry more than 220 passengers in one class. In the U.S., it was initially used for domestic flights, including coast-to-coast trips, and for trips to nearby overseas destinations. But once the FAA in the early 1990s granted airline operators permission to use it on over-water routes, carriers including American, Northwest, US Airways and Continental found the 757 a fuel-effective way to serve cities in Western Europe that had previously been reached with larger, more costly wide-body planes that consume more fuel but have greater range.

Continental's enthusiasm for the 757 came under scrutiny four years ago when federal officials determined the carrier was responsible for nearly two-thirds of all the minimum fuel or fuel-emergency incidents reported annually by airliners landing in Newark. There were minimum fuel issues on 23 flights arriving from Barcelona over the course of a single year. When pilots make those calls, air traffic controllers give them landing priority. The Transportation Department's inspector general didn't find any safety violations, however.

Write to Susan Carey at susan.carey@wsj.com

2011-12-31T10:11:00.001-07:00

It's never been safer to fly; deaths at record low

The past 10 years have been the safest in American aviation history; deaths are at record low

By Joshua Freed, AP Airlines Writers
AP – 27 minutes ago

NEW YORK (AP) -- Boarding an airplane has never been safer.
The past 10 years have been the best in the country's aviation history with 153 fatalities. That's two deaths for every 100 million passengers on commercial flights, according to an Associated Press analysis of government accident data.

The improvement is remarkable. Just a decade earlier, at the time the safest, passengers were 10 times as likely to die when flying on an American plane. The risk of death was even greater during the start of the jet age, with 1,696 people dying — 133 out of every 100 million passengers — from 1962 to 1971. The figures exclude acts of terrorism.

Sitting in a pressurized, aluminum tube seven miles above the ground may never seem like the most-natural thing. But consider this: You are more likely to die driving to the airport than flying across the country. There are more than 30,000 motor-vehicle deaths each year, a mortality rate eight times greater than that in planes.

"I wouldn't say air crashes of passenger airliners are a thing of the past. They're simply a whole lot more rare than they used to be," says Todd Curtis, a former safety engineer with Boeing and director of the Airsafe.com Foundation.

The improvements came even as the industry went through a miserable financial period, losing $54.5 billion in the past decade. Just to stay afloat, airlines eliminated meals and added fees for checked luggage.

But safety remained a priority. No advertisement of tropical beaches can supplant the image of charred metal scattered across a field.
There are still some corners of the world where flying is risky. Russia, the Democratic Republic of the Congo and Somalia have particularly high rates of deadly crashes. Russia had several fatal crashes in the past year, including one that killed several prominent hockey players. Africa only accounts for 3 percent of world air traffic but had 14 percent of fatal crashes.

Still, 2011 was a good year to fly. It had the second-fewest number of fatalities worldwide, according to the Flight Safety Foundation, with 507 people dying in crashes. Seven out of 28 planes in fatal crashes were on airlines already prohibited from flying into European Union because of known safety problems. (There were fewer fatalities in 2004 — 323 — but there were also fewer people flying then.)

There are a number of reasons for the improvements.

— The industry has learned from the past. New planes and engines are designed with prior mistakes in mind. Investigations of accidents have led to changes in procedures to ensure the same missteps don't occur again.

— Better sharing of information. New databases allow pilots, airlines, plane manufactures and regulators to track incidents and near misses. Computers pick up subtle trends. For instance, a particular runway might have a higher rate of aborted landings when there is fog. Regulators noticing this could improve lighting and add more time between landings.

— Safety audits by outside firms. The International Air Transport Association, an industry trade group, started an audit program in 2003. Airlines prove to the industry and each other that they have proper maintenance and safety procedures. It's also a way for airlines to seek lower insurance premiums, which have also dropped over the past 10 years.

— An experienced workforce. Air traffic controllers, pilots and maintenance crews — particularly in North America and Europe — have been on the job for decades. Their experience is crucial when split-second decisions are made and for instilling a culture of safety in younger employees. Former US Airways Capt. Chesley "Sully" Sullenberger — who spent three decades as an airline pilot — was praised for his skill after safely ditching a plane in the Hudson River in 2009. Both engines died because of a bird strike but all 155 passengers and crew survived.
— Luck. Safety experts discount the effect of chance. However, it takes just one big accident — especially now with mega-jets such as the Airbus A380, which is able to carry up to 853 passengers — to ruin an otherwise good period for safety.

"Was Chesley Sullenberger lucky or skillful?" says Perry Flint, a spokesman with the International Air Transport Association. "It was luck that it was daylight, but how many geese do you know that are flying south in the pitch black of two in the morning? So it was also luck that he hit them. Bad luck."

The most recent fatal U.S. crash was Colgan Air Flight 3407, a regional flight operating under the name Continental Connection. The 2009 crash killed all 49 people on board and a man in the house the plane hit.

In fact, all fatal crashes in the U.S. in the past decade occurred on regional airlines, which are separate companies flying smaller planes under brands such as United Express, American Eagle and Delta Connection. The most recent deadly crash involving a larger airline was American Airlines Flight 587 in 2001. It crashed moments after taking off from New York, killing 265.

There have been some near misses.

In April, a Southwest Airlines aircraft had a rapid loss of cabin pressure after part of the fuselage ruptured, leaving a five-foot-long hole in the ceiling. There were no serious injuries.

The prior year, a Southwest jet came within 200 feet of colliding with a small Cessna at a California airport. In December 2009, an American Airlines jet landing in the rain in Jamaica was unable to stop on the runway, crashing through an airport fence, crossing a street, finally stopping on a beach. And in December 2005, a Southwest jet skidded off a Chicago runway. No passengers died, but a 9-year-old boy riding in a passing car was killed.

A poor economy might also have improved safety.
Bill Voss, president of the Flight Safety Foundation, says that during a boom period, airlines tend to quickly grow. That, he says, can mean weaker standards for safety and for pilots.
"We tend to see people being pushed forward perhaps a little too early, before they're ready," Voss says. "There's not as much time for captains to create new captains by tapping a guy on the shoulder and telling him when he's out of line."

2011-12-25T00:24:00.003-07:00

Smoke Screening

As you stand in endless lines this holiday season, here’s a comforting thought: all those security measures accomplish nothing, at enormous cost. That’s the conclusion of Charles C. Mann, who put the T.S.A. to the test with the help of one of America’s top security experts.

By Charles C. Mann

Not until I walked with Bruce Schneier toward the mass of people unloading their laptops did it occur to me that it might not be possible for us to hang around unnoticed near Reagan National Airport’s security line. Much as upscale restaurants hang mug shots of local food writers in their kitchens, I realized, the Transportation Security Administration might post photographs of Schneier, a 48-year-old cryptographer and security technologist who is probably its most relentless critic. In addition to writing books and articles, Schneier has a popular blog; a recent search for “TSA” in its archives elicited about 2,000 results, the vast majority of which refer to some aspect of the agency that he finds to be ineffective, invasive, incompetent, inexcusably costly, or all four.

As we came by the checkpoint line, Schneier described one of these aspects: the ease with which people can pass through airport security with fake boarding passes. First, scan an old boarding pass, he said—more loudly than necessary, it seemed to me. Alter it with Photoshop, then print the result with a laser printer. In his hand was an example, complete with the little squiggle the T.S.A. agent had drawn on it to indicate that it had been checked. “Feeling safer?” he asked.

Ten years ago, 19 men armed with utility knives hijacked four airplanes and within a few hours killed nearly 3,000 people. At a stroke, Americans were thrust into a menacing new world. “They are coming after us,” C.I.A. director George Tenet said of al-Qaeda. “They intend to strike this homeland again, and we better get about the business of putting the right structure in place as fast as we can.”

The United States tried to do just that. Federal and state governments embarked on a nationwide safety upgrade. Checkpoints proliferated in airports, train stations, and office buildings. A digital panopticon of radiation scanners, chemical sensors, and closed-circuit television cameras audited the movements of shipping containers, airborne chemicals, and ordinary Americans. None of this was or will be cheap. Since 9/11, the U.S. has spent more than $1.1 trillion on homeland security.

To a large number of security analysts, this expenditure makes no sense. The vast cost is not worth the infinitesimal benefit. Not only has the actual threat from terror been exaggerated, they say, but the great bulk of the post-9/11 measures to contain it are little more than what Schneier mocks as “security theater”: actions that accomplish nothing but are designed to make the government look like it is on the job. In fact, the continuing expenditure on security may actually have made the United States less safe.

The first time I met Schneier, a few months after 9/11, he wanted to bet me a very expensive dinner that the United States would not be hit by a major terrorist attack in the next 10 years. We were in Washington, D.C., visiting one of the offices of Counterpane Internet Security, the company he had co-founded in 1999. (BT, the former British Telecom, bought Counterpane seven years later; officially, Schneier is now BT’s chief security technology officer.) The bet seemed foolhardy to me. Defense Secretary Donald Rumsfeld had just told The Washington Times that al-Qaeda was dispersing its killers all over the world.

From an airplane-hijacking point of view, Schneier said, al-Qaeda had used up its luck. Passengers on the first three 9/11 flights didn’t resist their captors, because in the past the typical consequence of a plane seizure had been “a week in Havana.” When the people on the fourth hijacked plane learned by cell phone that the previous flights had been turned into airborne bombs, they attacked their attackers. The hijackers were forced to crash Flight 93 into a field. “No big plane will ever be taken that way again, because the passengers will fight back,” Schneier said. Events have borne him out. The instigators of the two most serious post-9/11 incidents involving airplanes— the “shoe bomber” in 2001 and the “underwear bomber” in 2009, both of whom managed to get onto an airplane with explosives—were subdued by angry passengers.
Schneier’s sanguine views had little resonance at a time when the fall of the twin towers was being replayed nightly on the news. Two months after 9/11, the Bush administration created the Transportation Security Agency, ordering it to hire and train enough security officers to staff the nation’s 450 airports within a year. Six months after that, the government vastly expanded the federal sky-marshal program, sending thousands of armed lawmen to ride planes undercover. Meanwhile, the T.S.A. steadily ratcheted up the existing baggage-screening program, banning cigarette lighters from carry-on bags, then all liquids (even, briefly, breast milk from some nursing mothers). Signs were put up in airports warning passengers about specifically prohibited items: snow globes, printer cartridges. A color-coded alert system was devised; the nation was placed on “orange alert” for five consecutive years. Washington assembled a list of potential terror targets that soon swelled to 80,000 places, including local libraries and miniature-golf courses. Accompanying the target list was a watch list of potential suspects that had grown to 1.1 million names by 2008, the most recent date for which figures are available. Last year, the Department of Homeland Security, which absorbed the T.S.A. in 2003, began deploying full-body scanners, which peer through clothing to produce nearly nude images of air passengers.
Bruce Schneier’s exasperation is informed by his job-related need to spend a lot of time in Airportland. He has 10 million frequent-flier miles and takes about 170 flights a year; his average speed, he has calculated, is 32 miles and hour. “The only useful airport security measures since 9/11,” he says, “were locking and reinforcing the cockpit doors, so terrorists can’t break in, positive baggage matching”—ensuring that people can’t put luggage on planes, and then not board them —“and teaching the passengers to fight back. The rest is security theater.”

Remember the fake boarding pass that was in Schneier’s hand? Actually, it was mine. I had flown to meet Schneier at Reagan National Airport because I wanted to view the security there through his eyes. He landed on a Delta flight in the next terminal over. To reach him, I would have to pass through security. The day before, I had downloaded an image of a boarding pass from the Delta Web site, copied and pasted the letters with Photoshop, and printed the results with a laser printer. I am not a photo-doctoring expert, so the work took me nearly an hour. The T.S.A. agent waved me through without a word. A few minutes later, Schneier deplaned, compact and lithe, in a purple shirt and with a floppy cap drooping over a graying ponytail.

The boarding-pass problem is hardly the only problem with the checkpoints. Taking off your shoes is next to useless. “It’s like saying, Last time the terrorists wore red shirts, so now we’re going to ban red shirts,” Schneier says. If the T.S.A. focuses on shoes, terrorists will put their explosives elsewhere. “Focusing on specific threats like shoe bombs or snow-globe bombs simply induces the bad guys to do something else. You end up spending a lot on the screening and you haven’t reduced the total threat.”

As I waited at security with my fake boarding pass, a T.S.A. agent had darted out and swabbed my hands with a damp, chemically impregnated cloth: a test for explosives. Schneier said, “Apparently the idea is that al-Qaeda has never heard of latex gloves and wiping down with alcohol.” The uselessness of the swab, in his view, exemplifies why Americans should dismiss the T.S.A.’s frequent claim that it relies on “multiple levels” of security. For the extra levels of protection to be useful, each would have to test some factor that is independent of the others. But anyone with the intelligence and savvy to use a laser printer to forge a boarding pass can also pick up a stash of latex gloves to wear while making a bomb. From the standpoint of security, Schneier said, examining boarding passes and swabbing hands are tantamount to performing the same test twice because the person you miss with one test is the same person you'll miss with the other.

After a public outcry, T.S.A. officers began waving through medical supplies that happen to be liquid, including bottles of saline solution. “You fill one of them up with liquid explosive,” Schneier said, “then get a shrink-wrap gun and seal it. The T.S.A. doesn’t open shrink-wrapped packages.” I asked Schneier if he thought terrorists would in fact try this approach. Not really, he said. Quite likely, they wouldn’t go through the checkpoint at all. The security bottlenecks are regularly bypassed by large numbers of people—airport workers, concession-stand employees, airline personnel, and T.S.A. agents themselves (though in 2008 the T.S.A. launched an employee-screening pilot study at seven airports). “Almost all of those jobs are crappy, low-paid jobs,” Schneier says. “They have high turnover. If you’re a serious plotter, don’t you think you could get one of those jobs?”

The full-body-scanner program—some 1,800 scanners operating in every airport in the country—was launched in response to the “underwear bomber” incident on Christmas Day in 2009, when a Nigerian Muslim hid the plastic explosive petn in his briefs and tried to detonate it on a flight from Amsterdam to Detroit. It has an annual price tag of $1.2 billion. The scanners cannot detect petn directly; instead they look for suspicious bulges under clothing. Because petn is a Silly Putty–like material, it can be fashioned into a thin pancake. Taped flat to the stomach, the pancake is invisible to scanning machines. Alternatively, attackers could stick gum-size wads of the explosive in their mouths, then go through security enough times to accumulate the desired amount.

Staffing the airport checkpoints, at least in theory, are “behavioral detection officers,” supposedly trained in reading the “facial microexpressions” that give away terrorists. It is possible that they are effective, Schneier says—nobody knows exactly what they do. But U.S. airlines carried approximately 700 million passengers in 2010. In the last 10 years, there have been 20 known full-fledged al-Qaeda operatives who flew on U.S. planes (the 9/11 hijackers and the underwear bomber, who was given explosives by a Yemeni al-Qaeda affiliate). Picking the right 20 out of 700 million is simply not possible, Schneier says.

After the airport checkpoint, an additional layer of security is provided, in theory, by air marshals. At an annual cost of about $1.2 billion, as many as 4,000 plainclothes police ride the nation’s airways—usually in first class, so that they can monitor the cockpit. John Mueller, co-author of Terror, Security, and Money, a great book from which I drew much information for this article, says it's a horrible job. “You sit there and fly and you can’t even drink or listen to music, because you can’t have headphones on. You have to stay awake. You are basically just sitting there, day after day.” Unsurprisingly, there’s a lot of turnover—“you’re constantly training people, which is expensive.” Worse, the program has had no measurable benefit. Air marshals have not saved a single life, although one of them did shoot a deranged passenger a few years ago.

Has the nation simply wasted a trillion dollars protecting itself against terror? Mostly, but perhaps not entirely. “Most of the time we assess risk through gut feelings,” says Paul Slovic, a psychology professor at the University of Oregon who is also the president of Decision Research, a nonprofit R&D organization. “We’re not robots just looking at the numbers.” Confronted with a risk, people ask questions: Is this a risk that I benefit from taking, as when I get in a car? Is it forced on me by someone else, as when I am exposed to radiation? Are the potential consequences catastrophic? Is the impact immediate and observable, or will I not know the consequences until much later, as with cancer? Such questions, Slovic says, “reflect values that are sometimes left out of the experts’ calculations.”

Security theater, from this perspective, is an attempt to convey a message: “We are doing everything possible to protect you.” When 9/11 shattered the public’s confidence in flying, Slovic says, the handful of anti-terror measures that actually work—hardening the cockpit door, positive baggage matching, more-effective intelligence—would not have addressed the public’s dread, because the measures can’t really be seen. Relying on them would have been the equivalent of saying, “Have confidence in Uncle Sam,” when the problem was the very loss of confidence. So a certain amount of theater made sense. Over time, though, the value of the message changes. At first the policeman in the train station reassures you. Later, the uniform sends a message: train travel is dangerous. “The show gets less effective, and sometimes it becomes counterproductive.”
Terrorists will try to hit the United States again, Schneier says. One has to assume this. Terrorists can so easily switch from target to target and weapon to weapon that focusing on preventing any one type of attack is foolish. Even if the T.S.A. were somehow to make airports impregnable, this would simply divert terrorists to other, less heavily defended targets—shopping malls, movie theaters, churches, stadiums, museums. The terrorist’s goal isn’t to attack an airplane specifically; it’s to sow terror generally. “You spend billions of dollars on the airports and force the terrorists to spend an extra $30 on gas to drive to a hotel or casino and attack it,” Schneier says. “Congratulations!”

What the government should be doing is focusing on the terrorists when they are planning their plots. “That’s how the British caught the liquid bombers,” Schneier says. “They never got anywhere near the plane. That’s what you want—not catching them at the last minute as they try to board the flight.”
To walk through an airport with Bruce Schneier is to see how much change a trillion dollars can wreak. So much inconvenience for so little benefit at such a staggering cost. And directed against a threat that, by any objective standard, is quite modest. Since 9/11, Islamic terrorists have killed just 17 people on American soil, all but four of them victims of an army major turned fanatic who shot fellow soldiers in a rampage at Fort Hood. (The other four were killed by lone-wolf assassins.)

During that same period, 200 times as many Americans drowned in their bathtubs. Still more were killed by driving their cars into deer. The best memorial to the victims of 9/11, in Schneier’s view, would be to forget most of the “lessons” of 9/11. “It’s infuriating,” he said, waving my fraudulent boarding pass to indicate the mass of waiting passengers, the humming X-ray machines, the piles of unloaded computers and cell phones on the conveyor belts, the uniformed T.S.A. officers instructing people to remove their shoes and take loose change from their pockets. “We’re spending billions upon billions of dollars doing this—and it is almost entirely pointless. Not only is it not done right, but even if it was done right it would be the wrong thing to do.”

2011-12-21T19:35:00.005-07:00

Why fliers really do need to turn off electronic devices

By Gary Stoller, USA TODAY

Updated 1h 38m ago

"What part of 'please turn your cellphone off' do you feel does not apply to you?" Peter Juhren asked a fellow passenger as their New York-bound Delta Air Lines flight taxied for takeoff Dec. 7 at Tampa's airport.

Juhren, a frequent business traveler from Salem, Ore., says the woman on the phone gave "a disgruntled look" but stopped talking and turned it off — after three times ignoring a flight attendant's request to do so.

Passengers have blamed airlines and the government for safety problems for decades, but now they might have to share some blame.

A USA TODAY investigation shows that passengers are frequently disregarding flight attendants' instructions to turn off portable electronic devices during takeoff and landing — two critical flight phases when a mistake by a pilot could lead to an accident.

Many passengers question the rationale behind shutting off electronic devices in-flight, but the investigation's review of thousands of pages of technical documents shows the gadgets emit radio signals that can interfere with cockpit instruments and electronic equipment and systems on an aircraft.

"Any device with a battery — including cellphones, e-readers, laptops, PDAs (personal digital assistants) and Game Boys — has some level of emission that has the potential to interfere with cockpit instruments or navigational equipment," says Boeing engineer Dave Carson.

Technical committees have evaluated many portable electronic devices and found the margin of safety is not sufficient to allow passengers to use them during takeoff and landing, says Carson, co-chairman of an RTCA committee that studied portable electronic devices on aircraft.

RTCA is a non-profit corporation that develops communications and navigation recommendations for the Federal Aviation Administration.
Carson says most devices used "in aggregate or independently" by passengers would not meet the RTCA's DO-160 standard, which sets emission standards for airborne equipment.

Electronics experts say they do not have such electromagnetic interference (EMI) concerns about an increasing number of Wi-Fi and entertainment systems installed by aircraft manufacturers and airlines, because those systems are thoroughly tested to meet standards.

EMI-related documents reviewed by USA TODAY include more than 25 papers by electronics experts; presentations, papers and advisories by government aviation officials in the USA, Canada, the United Kingdom and Europe; congressional testimony; and Boeing research and information for airlines.

Some findings:

•A 2008 RTCA study, considered the most recent definitive one on the subject, confirmed that spurious emissions from transmitting portable electronic devices onboard aircraft "could exceed interference thresholds for critical aircraft systems."
RTCA, which gave USA TODAY permission to access the study, says an aircraft's localizer and glide-slope systems — two systems used for landing — "show potential susceptibility to continuous wave interference," supporting the "prohibition on the use of portable electronic devices below 10,000 feet."
The operation of portable electronic devices "changes the electromagnetic environmentt" of aircraft radio receivers and "may introduce additional interference effects."

•A 2006 FAA study of 38 flights operated by two airlines observed that cellphone calls were made during all flight phases, and other wireless devices were used during landing approach "well after" flight crew instructions to shut them off.

The study said "considerable onboard radio frequency activity" from cellphones was observed, including some that could interfere with aircraft GPS equipment.

•In a March 2001 service letter to airlines, Boeing said it received "various reports of anomalies in airplane communication and navigation systems that operators suspected were caused by interference from passenger carry-on electronic devices."
Boeing said it sometimes acquired the suspected electronic device but couldn't repeat the anomaly in a lab or on an airplane.

USA TODAY's analsyis of NASA's Aviation Safety Reporting System, which lets airline employees report incidents confidentially, reveals that pilots and an air traffic controller reported 32 incidents of electronic device interference with aircraft systems from January 2001 through Dec. 2, 2011.

A pilot of a Canadair CRJ-200 regional jet reported compass system malfunctions after takeoff at an altitude of about 9,000 feet on a flight last May. The pilot says a passenger had an iPhone in standby mode; when the phone was turned off, the compass system operated properly.
A pilot of a Boeing 737 jet noticed that navigational radios were not updating after takeoff from San Francisco airport in August 2007. The radios started to update after a passenger shut off a handheld GPS.

USA TODAY surveyed more than 900 frequent fliers and asked them, among other questions, how often fellow passengers disregard flight announcements to shut off electronic devices.

Nearly half of 133 frequent fliers who responded to the question said they see fellow passengers disregarding the announcements on every flight or nearly every flight. More than three-quarters of respondents said they often, or always, see such disregard.

Frequent fliers report various tactics fellow passengers use to operate their electronic devices after being told to shut them off. Among others, they turn devices over so the screens aren't visible, and they operate the gadgets under blankets or after flight attendants sit down for takeoff or landing.

2011-12-21T19:27:00.002-07:00

Many fliers refuse to turn off electronic gadgets

By Gary Stoller, USA TODAYUpdated 1h 37m ago

Gadget-dependent fliers are turning a deaf ear to flight attendants' instructions to turn off their devices during takeoff and landing, despite decades of government warnings, a USA TODAY investigation shows.

Investigation finds many passengers ignore the flight attendants' instructions to turn off electronic devices for takeoff and landing.

Investigation finds many passengers ignore the flight attendants' instructions to turn off electronic devices for takeoff and landing.

The investigation, which reviewed thousands of pages of technical documents and surveyed hundreds of frequent fliers, also confirms that the worry about electronics on planes is not baseless: The devices emit radio signals that can interfere with cockpit instruments and flight systems.

"We really need to get the technical findings out to the public and tell them it's dangerous to use their portable electronic devices in-flight," says Bill Strauss, an electrical engineer whose doctoral thesis at Carnegie Mellon University studied use of electronic devices in-flight.

Documents reviewed by USA TODAY include: more than 25 papers by electronics experts; presentations, papers and advisories by government aviation officials in the USA, Canada, the United Kingdom and Europe; congressional testimony; and Boeing research and information for airlines. The investigation also included: a review of government accident reports and airline pilots' incident reports; a survey of more than 900 frequent fliers; and interviews with Boeing, NASA and independent electromagnetic interference (EMI) experts, flight attendants and pilots unions, and college electrical engineering professors.

Fortunately for air travelers, the probability of EMI is small, the technical papers say.

EMI has not been cited as the cause of any fatal U.S. airline accident, but pilots have reported incidents in which they suspected EMI caused cockpit instruments to go haywire.

Some electronics experts — including Douglas Hughes, an electrical engineer who worked for McDonnell Douglas and the Department of Defense— suspect it might have caused military aircraft accidents and been an undetected factor in some airline crashes.

Goverment accident investigators in New Zealand said a pilot used a cellphone in the cockpit before he and seven passengers were killed on a charter flight in 2003.

The New Zealand Transport Accident Investigation Commission said the accident was probably caused by the pilot becoming distracted from monitoring altitude during landing. They noted in the accident report that cellphone use can cause "random interference to the proper functioning of aircraft avionics such as navigation equipment and autopilots."

Two recent events have caused frequent fliers to question why they're required to shut off their devices in flight.

On Dec. 6, actor Alec Baldwin was removed from an American Airlines plane for playing a game on his cellphone after a flight attendant told him to turn it off. On Dec. 1, the FAA gave approval to American's pilots — after months of tests — to use electronic tablets in cockpits.

American's pilots can use their own iPads any time during a flight to access aircraft and flight crew operating manuals and navigational charts, says the airline's spokeswoman, Andrea Huguely. The device's Wi-Fi must be turned off.

Pilots' iPad use "involves a significantly different scenario for potential interference than unlimited passenger use, which could involve dozens or even hundreds of devices at the same time," the FAA says.

2011-12-16T15:45:00.001-07:00

Delta announces big LaGuardia expansion

Delta Air announces new flying schedule out of New York's LaGuardia, targeting competitors

By Joshua Freed, AP Airlines Writers
AP – 53 minutes ago
Delta Air Lines Inc. is boosting its flying out of New York's LaGuardia airport, adding routes that target American Airlines and put it in a better position to compete against United. (AP Photo/Mary Altaffer)

NEW YORK (AP) -- Delta Air Lines Inc. plans a massive flight expansion out of New York's LaGuardia airport, hoping to improve its competitive edge against its two biggest rivals in one of the nation's most important air travel markets.

Delta said Friday that the additions make it the biggest airline between the New York area and other cities in the U.S., as it adds routes that target American Airlines and put it in a better position to compete against United Continental. That should help it grab more high-paying business travelers, a critical passenger segment in major cities like New York.

The list of added cities reads like a map of the hubs of competing airlines. Delta is adding Miami and Dallas, both American Airlines hubs. It will also fly to Houston and Denver, which are United hubs, and Charlotte, N.C. — a hub for US Airways. In all, it will add more than 100 flights to 29 new destinations.
By next summer Delta expects to operate 264 daily flights from LaGuardia — the smallest of the New York area's three main airports. Those flights will go to more than 60 cities, which Delta says is more than any other airline. Currently Delta operates flights to 35 cities out of that airport.

United and Continental's merger into the world's largest airline put Delta in second-place by traffic. Expanding in a key business market like New York will help it compete against the larger airline.

"It's about increasing Delta's overall appeal and utility to the high-yield business traveler," said Henry Harteveldt, co-founder of Atmosphere Research Group in San Francisco. "Delta is going for scope of service, rather than always having the largest number of flights to a smaller network of cities."

Gail Grimmett, Delta's senior vice president of New York operations, thinks the convenience of LaGuardia will be a major deciding factor for business travelers debating between flying with Delta or United, which has a hub in nearby Newark, N.J

As it adds flights, Delta will expand into LaGuardia's Terminal C in addition to its existing operation at Terminal D. The Atlanta-based airline will spend $100 million on the expansion. Delta will continue its shuttle service to Chicago, Boston and Washington out of the airport's Marine Air Terminal.

Delta obtained the new flying rights in a deal with US Airways Group Inc. Delta gave up some of its flying rights at Washington's Reagan National airport, which US Airways wanted, in exchange for some of that airline's rights at LaGuardia. The exchange of flying rights happens in two rounds, on March 25 and July 11. As a result some of Delta's new LaGuardia flights start in May, the rest in July.
US Airways said it will announce its plans for expanded Washington flying in January.

Delta has said it will cut overall flying by as much as 3 percent next year. CEO Richard Anderson said the new flying at LaGuardia will be offset by reduced flying in Washington.

Shares of Atlanta-based Delta rose 43 cents, or 5 percent, to close at $9.02. Shares of United Continental Holdings Inc. rose 60 cents, or 2.9 percent, to close at $21.24. US Airways Group Inc. shares rose 47 cents, or 8.2 percent, to close at $6.18. ___

Freed reported from Minneapolis. AP Airlines Writer David Koenig in Dallas contributed to this report.

2011-12-14T22:56:00.000-07:00

Southwest Airlines' Stock Will Lag Peers
Does Charge For Oversize Bags

by: Adam Levine-Weinberg December 12, 2011

We are likely near the beginning of a long-term uptrend for airline stocks. The operating environment for airlines is improving due to capacity reductions and moderating jet fuel prices. All the major airlines are expected to see substantial profit improvement next year, in spite of a weak economic forecast. If the economy does continue to improve over the next few years, then airline stocks will have even more upside.

Southwest Airlines (LUV) has long been considered a leader in the airline sector, and for good reason. While competitors Delta (DAL), United (UAL), US Airways (LCC), and now American (AMR) have all declared bankruptcy over the past ten years, Southwest has enjoyed 38 consecutive years of profitability (and this year should be year 39, though just barely).
However, the bankruptcies of all of these competitors have allowed them to drastically reduce their cost structures. Southwest's CEO, Gary Kelly, told employees in a memo last week that competitors are finally catching up to Southwest. Kelly claimed that the cost gap between Southwest and the legacy carriers has been cut in half. This has pressured Southwest's profits in recent years.

Aside from the overall narrowing cost differential, there are two major reasons why Southwest shares are not likely to rise as quickly as those of United, Delta, and US Airways. First, Southwest has invested in offering better service than other carriers, yet has been unable to thereby achieve a revenue premium. The most important way in which Southwest has tried to differentiate itself from competitors has been in its "Bags Fly Free" campaign. All of the legacy carriers charge for the first and the second checked bag, while JetBlue (JBLU) charges for a second checked bag.

The legacy carriers earn about $60 each way for passengers who check two bags, while Southwest does not charge such passengers unless their bags exceed the size/weight limits. The result is that Southwest has less ancillary revenue than its competitors. Free checked baggage is essentially an amenity that Southwest offers. Southwest (like the other airlines) needs to support a baggage crew on the ground, but unlike other carriers, has to pay these costs out of the base airfares it charges, instead of baggage fees.

The problem is that most customers just look at the base airfare when choosing which ticket to purchase. Super low-cost carriers like Allegiant (ALGT) rely on this, as they sell base airfares at or below cost, and make their profit on fees and commissions. Sure, passengers might get angry when they feel like they are being nickel-and-dimed. But ultimately, they will pay up, and will do the same thing again the next time they fly. This idea is supported by comparing airline revenue statistics.

Last quarter, pro forma PRASM (the key airline revenue metric) grew 6.4% for Southwest, while the same figure grew 10.1% for United and 10.9% for Delta. Thus, Southwest cannot charge a higher base airfare than competitors, and since it has fewer ancillary revenue streams, it ends up taking in less revenue than competitors. Given the cost pressure that all airlines have felt this year due to high jet fuel prices, it is no wonder that Southwest's profits have been falling.

The second issue for Southwest is the integration of AirTran. Merger integration processes are traditionally difficult for airlines. One typical stumbling block is the integration of seniority lists between the two carriers. Fortunately, this issue has been resolved, after initial difficulties lead executives to float the idea of operating AirTran as a separate, wholly-owned subsidiary. However, it is still unclear how the integration will affect overall costs. AirTran pilots (and other employees) tend to be paid below the industry average, whereas Southwest employees have industry-leading compensation plans. For equivalent positions, Southwest pilots can make anywhere from 30-100% more than their colleagues at AirTran.

When the pilots sign a joint contract, don't expect them to meet in the middle; AirTran pilots will get a substantial salary bump that will cut into the "merger synergies" that Southwest expects to achieve. A second issue is the transition of AirTran's Atlanta hub into a Southwest "point-to-point" focus city. While Southwest expects this move to generate substantial additional revenue, it is not clear that the company will be able to replace all of AirTran's connecting traffic with nonstop customers immediately. While Southwest builds its presence in Atlanta, it will likely face an initial decrease in traffic, as connecting passengers from smaller markets (that Southwest is exiting) and those who want business-class seating defect to Delta.

I have no doubt that Southwest will sort through all of these issues over the long haul and will continue to be an industry leader in the airline sector. If you want exposure to the airline sector but can't tolerate the risk inherent in the legacy carriers' balance sheets, then Southwest may be worth a look. But until Southwest catches up with its peers on the revenue side, I think other airlines have better near term profit growth potential. I recommend United, US Airways, and Delta as better picks than Southwest.

2011-12-13T14:09:00.004-07:00

Boeing logs big order from Southwest

Reuters – 3 hours ago

(Reuters) - Boeing Co (NYSE:BA) bagged its first firm order for the new 737 MAX fuel-efficient, narrowbody plane, as part of a $19 billion deal with Southwest Airlines (NYSE:LUV) that the jet maker calls its largest order ever.
The order for 208 narrowbody planes includes 150 MAX aircraft and puts Southwest, a loyal Boeing customer, first in line to take delivery of the upcoming revamp of the best-selling 737, which will feature a new energy-efficient engine.
The order reflects robust demand for fuel-efficient planes as the airline industry struggles to rebound from a painful downturn and cope with volatile oil prices. The Southwest deal is also one of the last major aircraft orders up for grabs from U.S. carriers looking to replace aging models.
"It's been a very good year for orders, really driven by the re-engined platforms for Airbus and Boeing," said Peter Arment, an aerospace and defense analyst with Sterne, Agee & Leach. "We do expect that to continue in 2012."

He said Boeing would likely garner more orders for its 737 MAX from existing customers, and noted the company was currently competing with chief rival Airbus (Paris:EAD.PA) for an order from United Continental Holdings (NYSE:UAL) , the world's largest carrier.

Delta Air Lines (NYSE:DAL) ordered 737-900ER 100 Next-Generation extended-range 737 planes in August, following a giant order in July from now-bankrupt American Airlines (NYSE:AMR) for 460 single-aisle jets worth up to $40 billion, an order Boeing split with Airbus.

The MAX orders, combined with a strong existing backlog for other 737 models, will allow Boeing to raise production rates to record levels on one of its most profitable plane programs, Arment said.
"Longer term, it's going to help generate some additional earnings power for the company," Arment added.

MORE ORDERS EXPECTED
Boeing reported commitments for 948 MAX airplanes and said the figure could climb to 1,500 by the end of next year. It said the Southwest deal was its largest firm order ever in dollar value and the number of airplanes.

"It truly is Christmas come early for the Boeing Co," Jim Albaugh, Boeing's chief executive for commercial planes, told a press briefing held in Dallas on Tuesday to announce the Southwest order.

Southwest also said it will buy 58 737 Next-Generation aircraft. The traditional discount carrier has a fleet of 699 planes, including 88 Boeing 717s acquired when it bought AirTran this year.

The planemaker said the MAX, which is competing with Airbus's re-engined A320neo family, cuts fuel burn by an additional 10 ercent to 12 percent over current single-aisle airplanes. CFM International, a joint venture between General Electric Co (NYSE:GE) and France's Safran (Paris:SAF.PA) , is providing the MAX engines.
Boeing on Tuesday also announced inaugural list prices for its 737 MAX aircraft. The 737 MAX 8 will sell for a catalogue price of $95.2 million, Boeing said on its website, while the larger 737 MAX 9 will sell for $101.7 million.

2011-12-13T13:55:00.000-07:00

Things Your Flight Attendant Won’t Tell You

By Michelle Crouch from Reader's Digest

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

2011-12-09T18:04:00.000-07:00

Ask Alec Baldwin: Ignore flight attendants at your peril

By Bart Jansen, USA TODAYUpdated 41m ago Comments

Ignoring directions from flight attendants, as actor Alec Baldwin did while awaiting takeoff last week, can be no laughing matter.
By Stephen Morton, Getty Images

Airlines can pursue civil fines against unruly passengers through the Federal Aviation Administration or, in the most egregious cases, even criminal charges.

"I think the lesson here is you've got to listen to the flight attendants," says Michael Krzak, a partner who practices aviation law at Clifford Law Offices in Chicago.
Baldwin was removed from an American Airlines flight Tuesday in Los Angeles after a confrontation with flight attendants over playing a cellphone game after being told to shut it down.

The incident became a social media sensation after the star of NBC's 30 Rock tweeted about the incident and American took to Facebook to respond, saying "an extremely vocal customer" was removed after being "extremely rude to the crew, calling them inappropriate names and using offensive language."

And Lonny Glover, the safety and security director for the Association of Professional Flight Attendants, a union representing American crew members, told New York's Daily News that Baldwin should be fined, put on the airline's no-fly list and have his TV show removed from in-flight entertainment unless he apologized.

There's no indication Baldwin will face further punishment. The FAA wouldn't comment. But Tim Smith, an American spokesman, says the airline hasn't pursued any more action.

Others passengers have faced more. The FAA fines more than a hundred passengers each year for disobeying crew members after complaints are filed. Regulations state that "no person may assault, threaten, intimidate, or interfere with a crew member in the performance of the crew member's duties."
Common violations include assaulting a crew member or becoming drunk and belligerent. The potential fine for each violation is up to $25,000. Each incident can result in multiple violations.

In the worst cases, an airline can ask a federal prosecutor to pursue criminal charges. The criminal code prohibits "assaulting or intimidating a flight crew member" under penalty of fines and up to 20 years in prison. If a "dangerous weapon" is used, a life sentence is possible.

"That is typically not done unless there are pretty extreme circumstances, things like weapons or actual assaults," Krzak says.

2011-12-05T18:25:00.000-07:00

FAA head Randy Babbitt placed on leave after drunk driving arrest in Fairfax

Posted at 12:52 PM ET, 12/05/2011
By Mary Pat Flaherty and Ashley Halsey III

The head of the Federal Aviation Administration is on administrative leave after being charged with drunk driving Saturday night by Fairfax City police, according to the Department of Transportation.
FAA Administrator Jerome Randolph “Randy” Babbitt, 65, was arrested after being spotted driving on the wrong side of Old Lee Highway, according to the arresting officer.

Babbitt requested the leave and DOT officials are in discussions with legal counsel about Babbitt’s employment status, according to an agency statement. Neither the White House nor the Department of Transportation learned of Babbitt’s arrest until Monday afternoon, administration officials said.
Police pulled him over in the 3900 block of Old Lee Highway, about nine miles from his home in Reston at about 10:30 p.m. He was driving alone and cooperated with police, authorities said. Babbitt, 65, was taken to the adult detention center, where he was charged before being released on his own recognizance.
Deputy FAA Administrator Michael Huerta will take command of the federal agency, according to a statement from the Department of Transportation early Monday afternoon. The statement said the department had learned of the arrest just an hour earlier. Fairfax City police issued a press release on the arrest Monday morning.
(Manuel Balce Ceneta - AP) Babbitt was alone in his vehicle and was not involved in any accident, police said.
Babbitt did not return a call left with the FAA press office.

Babbitt was sworn in as the FAA’s 16th administrator in June 2009. He is a veteran pilot and flew for 25 years for Eastern Airlines, according to his official biography.

Babitt’s arrest information was made public in accordance with a Fairfax City police general order that says the arrest of public officials, including federal officials, for “any criminal charge or serious traffic charge (e.g. driving under the influence, reckless driving)” will be released.
Babbitt faces a Feb. 2 court appearance, said Sgt. Joe Johnson, a Fairfax City police spokesman.
Faiirfax Police do not release the blood-alcohol level of those charged, or the results of roadside sobriety tests, said Johnson. State law defines DWI as a .08 blood alcohol concentration.

Staff writer Ed O’Keefe contributed to this report.

2011-11-29T07:13:00.001-07:00

American Airlines parent seeks Ch. 11 protection

By DAVID KOENIG and SAMANTHA BOMKAMP
AP – 10 mins ago

FORT WORTH, Texas (AP) — American Airlines and its parent company are filing for bankruptcy protection as they seek to cut costs and unload massive debt built up by years of high jet fuel prices and labor struggles.

The third-largest U.S. airline also said Tuesday that CEO Gerard Arpey had stepped down and was replaced by company president Thomas W. Horton.

AMR Corp. has continued to lose money while other U.S. airlines returned to profitability in the last two years.

Horton said the board of directors unanimously decided to file for bankruptcy after meeting Monday in New York and again by conference call on Monday night.

American said it would operate normally while it reorganizes in bankruptcy. The airline said it would continue to operate flights, honor tickets and take reservations. It said the AAdvantage frequent-flier program would not be affected.

Horton said, however, that as the company goes through a restructuring it will probably reduce the flight schedule "modestly," with corresponding cuts in jobs.

The company will delay the spin-off of its regional airline operation, American Eagle, which was expected in early 2012. AMR Eagle Holding Corp. also filed for bankruptcy.

American was the only major U.S. airline that didn't file for bankruptcy protection in the aftermath of the 2001 terrorist attacks that triggered a deep slump in the airline industry. The last major airline to file for bankruptcy protection was Delta in 2005.

Speculation about an AMR bankruptcy grew in recent weeks, however, as negotiations with pilots and other workers over cost-saving labor contracts seemed to stall. The company said that labor-contract rules forced it to spend at least $600 million more per year than other airlines.

Horton said, however, that there was no single factor that led to the bankruptcy filing. He said the company needed to cut costs in view of the weak global economy and high, volatile fuel prices. The average price of jet fuel has risen more than 50 percent in the past five years.

American was the world's biggest airline as recently as 2008, but has fallen behind United and Delta after those two companies bought other airlines.

Fort Worth-based AMR lost $162 million in the third quarter and has posted losses in 14 of the last 16 quarters.
AMR has about $4 billion in cash and has announced plans to order 460 new narrow-body planes used primarily in the U.S., plus other jets for longer flights.

American was founded in 1930 from the combination of more than 80 smaller carriers. It now flies about 240,000 passengers per day and has about 78,000 employees.

The airline operates out of five major hubs in New York, Los Angeles, Dallas/Fort Worth, Chicago, and Miami. It has major international partnerships with British Airways and Japan Airlines.
Bomkamp reported from New York.

2011-11-28T07:00:00.000-07:00

NYPD cop intervenes in scuffle on JetBlue flight

AP – 8 hrs ago

Wed, Nov 23, 2011See latest photos »NEW YORK (AP) — An off-duty New York City police officer subdued and handcuffed an intoxicated passenger who attacked a flight attendant Sunday during a scuffle aboard a JetBlue plane.

Officer Anibal Mercado intervened after Antonio Ynoa of Brooklyn punched a flight attendant in the face early Sunday on JetBlue Flight 832 from the Dominican Republic to John F. Kennedy International Airport, the NYPD said.
About a half hour before the plane was scheduled to land at about 12:30 a.m., the flight attendant approached Ynoa and told him to stop drinking duty-free alcohol, police said. Ynoa became angry and punched the attendant in the face, police said.
Mercado, a patrol cop in the Bronx, told reporters that he felt compelled to intervene.

"Everybody was very alarmed," Mercado said. "I could see the fear in the passengers' faces."
Mercado told Ynoa that he was a police officer, then wrestled him to the ground and restrained him with a pair of plastic handcuffs stored on the aircraft, police said.

"He struck me a few times in the face as I was trying to restrain him," said Mercado, who is an 18-year veteran of the police force. "He was still yelling profanities. I was just telling him to calm down."

A JetBlue spokesman said the plane landed safely. When the flight landed, Ynoa was escorted off the plane by the FBI. The FBI says Ynoa, 22, will be arraigned Monday in federal court in Brooklyn on charges of assault and interference with a flight crew.

2011-11-23T00:51:00.003-07:00

Delta cutting international routes
Monday, November 21, 2011

By Kelly Yamanouchi
The Atlanta Journal-Constitution

Just as Hartsfield-Jackson International Airport prepares to open a gleaming new international terminal next year, its flagship carrier Delta Air Lines is cutting back on international routes.
It's unfortunate timing that Atlanta's Maynard H. Jackson International Terminal will open as international travel is on the decline, with Atlanta-based Delta trimming overseas routes amid high fuel prices and economic uncertainty.

Delta plans to discontinue several routes from Atlanta, including its route to Shanghai that garnered much attention when it launched with daily service in 2008. Since then, Delta has tried cutting back on the route and discontinued it in 2009. It then resumed the Atlanta-Shanghai route last year with just two flights a week, only to find that the route has still "performed poorly," according to Delta. That led to the decision to once again suspend the service as of Jan. 18.

The airline will also discontinue five other routes from Atlanta -- to Athens, Greece; Copenhagen, Denmark; Moscow; Prague; and Tel Aviv, Israel -- that it had earlier cut back to seasonal service but now will not resume next summer as previously planned.

The cuts are part of Delta's previously announced plan to cut its flight capacity by 2 percent next year, with much of the reduction concentrated in weak trans-Atlantic markets.

Delta said it will continue to fly to nearly 70 international destinations from Atlanta next summer and is "excited" about the new international terminal opening next year. The new terminal will "provide a great foundation for Delta's continued long-term international growth," Delta spokesman Trebor Banstetter said.

Hartsfield-Jackson General Manager Louis Miller said in a written statement that the international terminal is for expected "international growth for the Atlanta region over the next two decades," and airport management is confident Delta will grow in the future.

The airline also said travelers will still be able to reach all the cities by connecting through other hubs or on Delta's partner carriers, and it will assist passengers on the discontinued routes.

"We're hopeful that we'll be able to resume service in the future," Banstetter said in a written statement, "and we'll continue to look for opportunities to begin successful new international service from Atlanta in the future."

Several seasonal routes from New York will also be cut by Delta, including routes to Manchester, U.K.; Budapest, Hungary; and Berlin.
Meanwhile, Delta plans to start a new seasonal international route from Detroit to Paris next summer, and it is taking over a Seattle-Paris route previously operated by its joint venture partner Air France.

2011-11-08T21:18:00.008-07:00

Travelers forget everything from passports to false teeth

By Gary Stoller, USA TODAY
Updated 7h 37m ago

Frequent business traveler Joyce Gioia forgot more than $20,000 worth of jewelry in her hotel room in Italy last year.

Luckily for Gioia, the jewelry was in a room safe, and staff at the Rome Marriott Grand Hotel Flora shipped the items to her home in Austin.

"I had done such a dumb thing, and I was very happy to get the jewelry back," says Gioia, a management consultant.

Travelers annually leave millions of personally important items such as wallets, keys, cellphones and eyeglasses behind in hotels, airports, airplanes and rental cars. Fortunately for the forgetful, many belongings — including very valuable and unusual ones such as Gioia's jewelry — are returned.

Many, however, aren't, and they are given away or sold if their owners don't retrieve them or their owners cannot be found.

Gioia and other travelers scold themselves for their forgetfulness, but psychologists say it's commonplace even among the most veteran of travelers.

"When traveling, people tend to have lots on their minds, and there are often many unexpected distractions," says David Meyer, a University of Michigan psychology professor. "The combination of too much to keep track of, limited attention for doing so and being in relatively unusual circumstances outside familiar work and home locations promote forgetting about the small stuff being carried along the way."

Forgot something?

Travelers leave practically everything imaginable behind in airports, on planes and in hotel rooms, say airports, airlines and hotels. Among what they’ve found:

Dallas/Fort Worth airport: Bowling pins, bowling balls, a chain saw, a dog, a cooler full of frozen fish.

Detroit airport: Bicycles, a set of Eastern European dolls.

Las Vegas airport: Human ashes, a prosthetic leg.

Oregon’s Portland airport: A dog, a baked potato cooking in a crock pot, a stair climber and tools for a fire dancer.

Southwest Airlines: A cooked Thanksgiving turkey, human ashes in an urn, a pink marble sink, prosthetic limbs, a suitcase filled with boxes of cereal.

Hawaiian Airlines: A birth certificate, breast pump equipment.

Virgin America: An embalmed baby shark, bullhorns.

Candlewood Suites in Cleveland: French coins, human ashes.

Candlewood Suites Polaris in Columbus, Ohio: A saddle, a 2-foot-tall Buddha statue.

Country Inns & Suites in Brooklyn Center, Minn.: Huge Styrofoam lollipops.

Country Inns & Suites in Bloomington, Minn.: A litter of kittens.

Crowne Plaza in downtown Orlando: A pet snake.

Fearrington House Inn in Pittsboro, N.C.: One shoe, “strange” chargers for electronic devices.

Grand Hyatt San Francisco: Dentures, toupees.

Grand Hyatt Seattle: $16,000 in cash, two dogs, human ashes, a lizard.

Hotel St. Germain in Dallas: Sleep masks, small keys for handcuffs, a five-year sobriety coin from Alcoholics Anonymous left next to an empty champagne bottle, unusual lingerie, boxes of live sleeping butterflies, a mannequin head, a toupee.

Hyatt Regency Chicago: Adult toys, intimate apparel.

Hyatt Regency Resort & Spa in Scottsdale, Ariz.: Firearms.

New York Marriott Marquis: A prosthetic leg.

Radisson Plaza Minneapolis Hotel: A bloody ax costume prop.

The Surrey in New York: A coin collection.

USA TODAY contacted several airlines, airports, hotels and car-rental companies and, among other things, asked how many items are left behind by their customers yearly.

Southwest Airlines, which carried 88 million passengers last year, reported the largest number. The airline takes possession of up to 10,000 items a month that are left behind at airports and in planes, says spokeswoman Katie McDonald.

Books, cellphones, clothing and reading glasses are the most common items left behind, she says.

The most valuable items? A $10,000 diamond engagement ring, an NFL Super Bowl ring and professional video equipment — which all were returned to their owners.

Southwest stores items in a 4,000-square-foot area within a Dallas warehouse. Unclaimed items stay there 30 to 90 days, and the majority is then donated to the Salvation Army, McDonald says.

Most items left behind don't contain an owner's contact information and aren't reported lost, she says. Also, many electronic devices are locked, making it difficult to determine who owns them.

Airport security

American Airlines tries to reunite items with their owners "for several weeks," says airline spokesman Tim Smith. And, if that cannot be done, he says, items are sold to a salvage company.

The cost of returning items to owners is "significant," he says, much more than the income received from the salvage company. "Lost and found is a customer service — not a money maker," Smith says.

McCarran airport in Las Vegas says about 30,000 items — an average of 82 a day — are left behind each year.

Most are left at Transportation Security Administration checkpoints and turned over to the airport, says McCarran spokeswoman Candice Seeley. The most common forgotten items: cellphones, eyeglasses, belts, watches, wallets and other belongings that "travelers shed in preparation for screening," Seeley says.

Most of the 15,936 items logged into the lost-and-found office at Oregon's Portland International Airport last year also were left at TSA checkpoints, says airport spokesman Steve Johnson.
After 30 days, many unclaimed items are donated to charity, he says. Items valued at more than $100 are kept for 90 days, then auctioned at a state surplus website.

The airport employs a full-time worker to handle lost items and incurs mailing costs of $10,000 to $20,000 yearly to return items, Johnson says.

Many hotels told USA TODAY that at least one item a day is left behind by guests.

Many see more. The Hyatt Regency in Chicago reports about 7,300 items a year, or about 20 a day, are left, according to Shaheryar Adil, a manager at the hotel.

At Hyatt hotels generally, passports, credit cards, state ID cards, computers, wedding rings and other jewelry, MP3 players and cash are most often left behind, says Hyatt spokeswoman Lori Alexander.

Other hotels see other trends. Novotel last year surveyed its 31 hotels in Britain and found that more mobile phone chargers were left behind by guests than any other item.

Phone chargers apparently are easily forgotten. Matthew Humphreys, an assistant manager at the Grand Hyatt in San Francisco, says he's worked at nine Hyatt hotels and the housekeeping staff in each had a large box of chargers.

"If you are traveling and find yourself in need of a phone charger, definitely call down and ask housekeeping," Humphreys says.

Next to chargers, Novotel found underwear was most forgotten, followed by false teeth and hearing aids, shoes and clothing, keys, toiletries, adult toys, electric toothbrushes, laptops and jewelry.

"We continue to be mystified by the random collection of items left in our rooms by guests," says Melissa Micallef, Novotel's marketing manager. "Our lost property departments really are treasure troves."

Respecting privacy

Many hotels say they respect guests' privacy and won't return an item unless the owner asks for it. That prevents them from getting caught in such sticky situations as a spouse learning that a mate may have spent the night with someone else.

Considering that "intimate apparel" and "adult toys," according to Adil, are some of the most unusual items left behind at the Chicago Hyatt Regency, the policy may make sense.

The Surrey hotel in New York reaches out to people who leave valuables behind, says Shan Kanagasingham, general manager of the hotel.

About 30% of the roughly 500 items left at the luxury hotel each year are returned, he says. Items are kept for three months. If they can't be returned, they're given to the people who found them.

The Ritz-Carlton, which only returns items requested by guests, keeps items up to 120 days, depending on value, and gives unclaimed items to the employees who found them, says Sandra Estornell, the chain's corporate director of rooms' development.

Many hotels charge guests for returning items because the costs of returning them can run high.

A mess contributes to forgetting It's easy to understand why belongings are left.

Claire Heymann, owner of the small luxury Hotel St. Germain in Dallas, says some rooms are in "such disarray" that guests don't see an item before leaving and some items are hidden for "safekeeping" and then forgotten.

A guest once lost a $1 million earring in the courtyard during an evening cocktail reception, but it was found, Heymann says.

Among other items left there: sleep masks, keys for handcuffs, boxes of live sleeping butterflies, a mannequin head, a toupee and a five-year sobriety coin from Alcoholics Anonymous left next to an empty bottle of champagne.

Hertz spokeswoman Paula Rivera says "thousands" of items are left behind in Hertz cars annually, particularly mobile phones, laptops and cameras.

Every Hertz location has a person responsible for lost items, and about 75% are returned to their owners, she says. Unclaimed items are donated to charity.

Travel disrupts a person's habits at home or work, where a coat, keys and briefcase may regularly be placed in a particular place, says Robert Bjork, a UCLA psychology professor.
"We do things in a certain order as we depart from home or work," Bjork says. "Those habits protect us from forgetting things, and they are disrupted by travel."

Frequent business traveler Lori DeFurio of Jordan, N.Y., calls herself "the queen of leaving stuff behind."

In December, she left a new winter coat and leather gloves in the overhead bin on a Southwest jet.

"I remembered five minutes after I left the airport," says DeFurio, who works in the computer software industry. "I called the airline from the taxi and had the concierge at the hotel keep trying, but I never got it back."

Some frequent business travelers have formulated strategies, or routines, to prevent leaving things behind.

Flight attendant Jennifer Welch of Hillsborough, Calif., says her last actions before checking out are shutting off her computer and then conducting "a sweep" of the room.

"I've noticed that on the occasions when I forgot items, it happened when I was tired and did things in a different order than I normally would," she says.

2011-11-07T19:44:00.001-07:00

Southwest Airlines Pilots Approve Seniority Integration Agreement

DALLAS, Nov. 7, 2011 /PRNewswire-USNewswire/ -- Today pilots from Southwest Airlines and AirTran Airways voted to approve an agreement that will merge the two carriers' pilot seniority lists into one. Southwest pilots approved this deal by 83.56 percent with 95.1 percent of their pilots voting. AirTran's pilots approved the new agreement by 83.58 percent with 93.99 percent voting. Southwest Airlines' purchase of AirTran was finalized on May 2, 2011.

"I am extremely proud of our negotiators' efforts to preserve and enhance the career value of every Southwest Airlines pilot and proud of our membership for demonstrating leadership by voting in favor of this negotiated list," said SWAPA President, Captain Steve Chase. "While SWAPA's preference will always be for fleet growth and not growth through acquisition, we trust that our company leaders will continue to take us in a profitable direction. Gary Kelly has stated that in combining these airlines 'one plus one should equal more than two.' Now with the certainty of an integrated seniority list, we are all looking forward to the continued success and growth of Southwest Airlines."

Airline acquisitions require the task of merging the seniority lists of work groups. The integration of the lists determines the order in which the pilots are placed. A pilot's position on a company's seniority list can determine career aspects such as earnings, city base and days worked. With an agreement finalized between the pilots, Southwest Airlines has one less roadblock toward full integration of the two airlines.

"The history of seniority list integrations is a contentious one and the combination of work groups brings with it significant challenges," continued Captain Chase. "The fact that these two pilot groups were able to set aside differences, dedicate themselves to this formidable task and come to an agreement that ensures the success of Southwest Airlines is remarkable and rare in our industry."

Pilots from AirTran will spend the next three years transitioning from AirTran operations to Southwest. Groups of pilots will be transitioned into Southwest training classes in a process expected to last through the end of 2014. Soon leaders from both pilot groups will begin work with the many transitional and union representational issues that are still required moving forward.

Located in Dallas, Texas, the Southwest Airlines Pilots' Association (SWAPA) is a non-profit employee organization representing the more than 6,100 pilots of Southwest Airlines. SWAPA works to provide a secure and rewarding career for Southwest pilots and their families through negotiating contracts, defending contractual rights and actively promoting professionalism and safety. For more information on the Southwest Airlines Pilots' Association, visit www.swapa.org.

2011-10-31T21:41:00.000-07:00

Arrest Made in Death of Flight Attendant
Oct. 31, 2011

Police used hotel security cameras to identify and arrest a suspect in the murder of an American flight attendant who was found naked, bound with a belt and strangled in a Mexico City hotel room, his mother said.
Nicholas Aaronson, 27, of Phoenix, Ariz., was found dead in a hotel room early Saturday morning. His luggage was strewn about the room, and there was no sign of forced entry, according to a notice posted by Aaronson's union.

Aaronson's mother, Anita Aaronson, said she was alerted to an arrest on Sunday.

"The FBI called [other son] Jason at 2:30 a.m, and told him they have arrested Nick's killer," she wrote today on her Facebook page.

The mother told Phoenix news station KPHO that police had used surveillance video from the hotel to find and arrest the suspect.
"I wish they had the death penalty in Mexico. He took the bright light out of my life. He was only 27 and he had so much to live for and he was so charming and was just a really nice man," Anita Aaronson told the station.

Anita Aaronson wrote on her Facebook page that Jason Aaronson was greeted by many of his brother's co-workers as he went through Phoenix airport en route to Mexico City to bring the body back to the U.S.

"Jason was in Phoenix airport tonight to get the plane to fly to Mexico and he said flight attendants were lining up to give him condolences for Nick," she wrote. "He had an escort of 4 people taking him through the airport and the flight attendants were coming from everywhere to hug him, what wonderful friends my boy had."
Deborah Volpe, president of Association of Flight Attendants Council 66, remembered Aaronson fondly.
"This is so difficult. We all worked with him, we all knew him. He was just in my office a week ago," Volpe said. "And it's that smile, we all knew his smile. He was a very compassionate individual."

Aaronson's coworkers organized a Nov. 10 memorial at the airport chapel in Phoenix.
Aaronson also worked with gay rights advocacy groups in Phoenix, where he participated in the NOH8 campaign by posing for a campaign photo.

Aaronson graduated Rio Salado College in Tempe, and began working for U.S. Airways in 2006.

2011-10-29T09:56:00.000-07:00

Qantas Airways grounds global fleet due to strikes

By ROD McGUIRK - Associated Press
AP – 6 mins ago

A Qantas Airbus A380 sits on the tarmac at Heathrow Airport, London Saturday Oct. …Brothers Kevin and Chris Crulley, sit on the floor at the Qantas check-in counter …

CANBERRA, Australia (AP) — Qantas Airways grounded its global fleet Saturday, suddenly locking out striking workers after weeks of flight disruptions an executive said could close down the world's 10th largest airline piece by piece.

The Australian government called for an emergency arbitration hearing, which was adjourned early Sunday morning after hearing evidence from the unions and airline. It will resume Sunday afternoon when the government will argue that the airline be ordered to fly in Australia's economic interests.

Planes in the air continued to their destinations, and at least one taxiing flight stopped on the runway, a flier said. Among the stranded passengers are 17 world leaders attending a Commonwealth summit in the western city of Perth.

When the grounding was announced, 36 international and 28 domestic Australian flights were in the air, said a Qantas spokeswoman, who declined to be named citing company policy.
Qantas said 108 airplanes were being grounded but did not say how many flights were involved. The spokeswoman could not confirm an Australian Broadcasting Corp. television report that 13,305 passengers were booked to fly Qantas international flights within 24 hours of the grounding.

The lockout was expected to have little impact in the United States. Only about 1,000 people fly daily between the United States and Australia, said aviation consultant Michael Boyd. "It's not a big deal," he said. Qantas is "not a huge player here."

Los Angeles International Airport spokeswoman Diana Sanchez said Saturday that she was not aware of any passengers stranded at the airport because of the strike. Five Los Angeles-bound Qantas flights were already in the air when the lockout began and were expected to arrive as scheduled, she said.
Sanchez said Qantas has indicated it plans to cancel the handful of flights scheduled to depart from Los Angeles on Saturday.
The real problems for travelers are more likely to be at far busier Qantas hubs in Singapore and London's Heathrow Airport, says another aviation consultant, Robert Mann.
Booked passengers were being rescheduled at Qantas' expense, chief executive Alan Joyce said. Bookings already had collapsed after unions warned travelers to fly other airlines through the busy Christmas-New Year period.

He told a news conference in Sydney the unions' actions have caused a crisis for Qantas.

"They are trashing our strategy and our brand," Joyce said. "They are deliberately destabilizing the company and there is no end in sight."
Union leaders criticized the action as extreme. Qantas is among the most profitable airlines in the world, but Joyce estimated the grounding will cost Qantas $20 million a day.

Qantas already had reduced and rescheduled flights for weeks after union workers struck and refused to work overtime out of worries a restructuring plan would move some of Qantas' 35,000 jobs overseas.

The grounding of the largest of Australia's four national domestic airlines will take a major economic toll and could disrupt the national Parliament, due to resume in Canberra on Tuesday after a two-week recess. Qantas' budget subsidiary Jetstar continues to fly.

Prime Minister Julia Gillard said her government would help the Commonwealth leaders fly home after 17 were due to fly out of Perth on Qantas planes over the next couple of days.

"They took it in good spirits when I briefed them about it," Gillard told reporters.

British tourist Chris Crulley, 25, said the pilot on his Qantas flight informed passengers while taxiing down a Sydney runway that he had to return to the terminal "to take an important phone call." The flight was then grounded.

"We're all set for the flight and settled in and the next thing — I'm stunned. We're getting back off the plane," the firefighter told The Associated Press from Sydney Airport by phone.

Crulley was happy to be heading home to Newcastle after a five-week vacation when his flight was interrupted. "I've got to get back to the other side of the world by Wednesday for work. It's a nightmare," he added.

Qantas offered him up to 350 Australian dollars ($375) a day for food and accommodation, but Crulley expected to struggle to find a hotel at short notice in Sydney on a Saturday night.

Australians Len and Christie Dunlop were stranded at London's Heathrow Airport when their flight to Sydney was grounded.

The couple, who have lived in Leeds for four years, said they would have to catch up with fewer friends when they return to Perth for three weeks for a friend's wedding.

"We've got dinners and lunch booked every day, so now we've missed two or three days worth of catching up with friends," Len Dunlop told ABC television. "It just a lot of frustration."

Gillard said her center-left government, which is affiliated with the trade union movement, had "taken a rare decision" to seek an end to the strike action out of necessity.

"I believe it is warranted in the circumstances we now face with Qantas ... circumstances with this industrial dispute that could have implications for our national economy," Gillard told reporters.

Transport Minister Anthony Albanese described the grounding as "disappointing" and "extraordinary." Albanese was angry that Qantas gave him only three hours' notice.

All 108 aircraft in as many as 22 countries will be grounded until unions representing pilots, mechanics, baggage handlers and caterers reach agreements with Qantas over pay and conditions, Joyce said.
"We are locking out until the unions withdraw their extreme claim and reach agreement with us," Joyce said, referring to shutting staff out of their work stations. Staff will not be paid starting Monday.

"This is a crisis for Qantas. If the action continues as the unions have promised, we will have no choice but to close down Qantas part by part," he added.

Richard Woodward, vice president of the pilot's union, the Australian and International Pilots Association, accused Qantas of "holding a knife to the nation's throat" and said Joyce had "gone mad."

Steve Purvinas, federal secretary of the mechanics' union, Australian Licensed Aircraft Engineers Association, described the grounding as "an extreme measure."

Long-haul, budget airline AirAsia tried stepping into the void with what it called "rescue fares" for Qantas passengers. The offer was valid for ticket-holders flying within 48 hours to AirAsia destinations, the airline statement said.

The recent strike action in which two unions have had rolling four-hour strikes on differing days has most severely affected Qantas domestic flights.
In mid-October, Qantas grounded five jets and reduced domestic flights by almost 100 flights a week because aircraft mechanics had reduced the hours they were prepared to work.

Qantas infuriated unions in August when it said it would improve its loss-making overseas business by creating an Asia-based airline with its own name and brand. The five-year restructure plan will cost 1,000 jobs.

Qantas announced in August that it had more than doubled annual profit to AU$250 million, but warned the business environment was too challenging to forecast earnings for the current fiscal year.
___
Associated Press writer Katie Oyan in Los Angeles and AP Economics Writer Paul Wiseman in Washington contributed to this report.

@yahoonews on Twitter, become a fan on Facebook

2011-10-28T21:35:00.000-07:00

American-US Air Merger Would Bolster The Industry

Vaughn Cordle Seeking Alpha
October 27, 2011

Apparently, my short note on the potential for bankruptcy at American Airlines (AMR) struck a nerve, given the volume of emails and calls received. As a follow-up and to encourage debate, it may be useful to throw out a few thoughts about a post-bankruptcy scenario.

AMR management appears to be using the bankruptcy scare as a means of influencing labor contract negotiations. Analysts are discussing the potential for bankruptcy because of liquidity concerns.

If the company ultimately files for bankruptcy protection and emerges successfully, its creditworthiness and ability to secure new aircraft improve. However, the airline will likely continue to be one of the weakest competitors with too much debt, unhappy employees, and a route network with revenue-generating potential that has been surpassed by larger competitors.
A merger with another airline, after or during bankruptcy, would produce valuable cost and revenue synergies, and further increase industry market concentration. This is an important consideration, as the Obama administration wants to dump $36 billion in higher security and user fees upon the industry, and it appears that neither political party can be counted on to understand the impact those higher costs will have on the industry's size and structure.
Our recent market concentration work shows that industry concentration has increased 40% from its historic nadir, since the rash of recent mergers, which includes Southwest and AirTran. However, it's still too low in my estimation to allow the industry to earn its cost of capital over a full business cycle. Stated differently, more consolidation and mergers are needed.

A cross-border merger between American Airlines and one of its alliance partners makes the most sense, but current laws of foreign ownership are a major barrier. This restriction is a rule that doesn't make sense in a global economy, especially for the overleveraged U.S. network airlines that are not cost- (or service-quality) competitive.
Of the six non-merged U.S. airlines we have examined, a combination of US Airways and American Airlines produces the most value post-bankruptcy and -merger. Labor benefits in this scenario because the synergies produced can be shared with all stakeholders, including the airlines' passengers. An important benefit is that with the merger there is an increased industry market concentration that increases pricing power for all airlines.

The industry has underinvested for the last decade, and it's hard to justify next-gen investment when paying down debt and higher government-imposed costs are the greater priority. Both the merger and higher industry concentration from the merger allow the restructured airlines to pay higher wages than would be the case otherwise. And just as important, this is something capital providers will support, because share prices and market values will soar. Hence my suggestion that AMR pilots, as well as other employees, negotiate an equity stake in the new airline before it emerges from bankruptcy.

Of course, this assumes that American eventually files. Without a filing, the company can continue to muddle through with a business that is not fit for longer-term investment. In fact, the company has been in a slow liquidation for over a decade. This is reflected on the balance sheet with the large negative net worth and 15-year-old, on average, aircraft fleet.

The real problem for AMR is the $13 billion in defined benefit pension plan obligations and $3 billion in health care benefit obligations. Pension plan assets are $7.7 billion, and the funding status, the difference between plan assets and obligations, is a negative $5.5 billion. Unfortunately, and given a more current discount rate and using actual returns on plan assets, the funding status is understated by approximately $1.5 billion.

With the updated pension plan accounting, the company will be required to increase plan cash contributions, which will result in lower earnings and a more negative net worth in 2012. The final numbers will not be known until the end of the year. AMR’s pension plan assets and obligations would be taken over by the PBGC if the company files bankruptcy.
In terms of magnitude, it’s the pension and health care liabilities and costs that get to the heart of AMR’s inability to earn its capital cost, invest in competitive resources, restore lost wages and grow the airline.

Key Points

Post-bankruptcy, AMR's new, less leveraged capital structure could better handle higher capex and new aircraft. Throw in a merger with U.S. Airways, and it's a win/win/win scenario -- for the two airlines, labor, as well as the industry and its capital providers.

Of course, what looks good on paper may be impossible to implement because of various pockets of resistance, especially from labor. The devil is in the details, and I'm simply making the case that from a strategic fit perspective, the merger scenario makes the most sense. It meets the various tests of consistency for all stakeholders. Moreover, it improves the industry’s ability to absorb the massive new costs that are likely imposed upon it by a government that must reduce an unsustainable federal deficit.

AMR management will obviously want to remain in control in any merger scenario. This may not be the best outcome. Many, at least on Wall Street, believe that the best candidate to run the combined company would be US Airways’ Doug Parker. He is a realist who has nothing invested in maintaining American's self-image that it is the leading airline in the industry. This was once correct, but is no longer so, with the industry's competitive evolution. In my view, Parker would manage American for an optimal outcome for all stakeholders, not attempt to achieve a standing that is no longer achievable.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

2011-10-28T21:10:00.000-07:00

Transaero to fly A380 superjumbo with 700 seats

By Tim Hepher and John Bowker
Reuters – 2 hrs 44 mins ago
PARIS/MOSCOW (Reuters) - Airbus unveiled a provisional deal on Friday to sell four A380s worth $1.5 billion at list prices to Transaero Airlines, marking the first sale of Europe's superjumbo to a Russian airline.

The country's second-biggest carrier plans to introduce the double-decker jetliner on long-distance flights seating 700 people in three classes, Airbus said.

It will be the second airline to opt for a high-density layout after France's Air Austral, which has said it will use close to the maximum capacity of 853 seats.
The world's largest airliner, which entered service four years ago, has the capacity to carry 525 passengers in a standard three-class layout.

It was initially branded as a cruiseliner with open areas and space for first-class suites, but a market is also opening up for high-density travel to offset high fuel prices while creating some uncertainty over how this should be marketed.
"The passenger is still getting a wider and more comfortable seat than on another plane," an Airbus spokeswoman said.
Airbus said the economy seat on its A380 is 5 cm wider than on a Boeing 747 using similar cabin layouts.

Boeing disputes this and says the latest version of its most recognized aircraft, the 747-8, will use an airy design with softer LED lighting, more spacious bins and a redesigned entry-way comarable to its all-new 787 Dreamliner.

"Seat widths on the 747-8 are comparable to the A380, within 2 cm," company spokesman Jim Proulx said.
As well as the A380, Transaero is also considering buying the 747-8, which is due for first delivery in 2012.

"We are in deep talks with Boeing about a potential order for the 747-8. The order for A380s is a separate order and does not have an impact on the talks," an airline spokesman said.
The 747-8 Intercontinental will be the world's longest passenger jet and is designed to seat 467 people in a standard three-class layout. Boeing has applied to have the plane certified to seat 605 people in high-density mode.
It has sold 36 of the passenger aircraft with another 15 committed provisionally to an unidentified customer.
Transaero carried 6.65 million passengers last year, 32.3 percent more than in 2009. It has a fleet of 64 aircraft, almost all of them Boeing.
It will now be considered the launch customer for the A380 in Russia, the CIS and eastern Europe, Airbus said.

Its Domodedovo base outside Moscow is the only Russian airport currently capable of handling the huge plane.

Airbus believes traffic in the region will increase at an average rate of 5.6 per cent per year over the next 20 years.

Transaero will announce its choice of engines for the A380s in the near future, Airbus said. The two rival suppliers are Rolls-Royce and Engine Alliance, a joint venture between General Electric and Pratt & Whitney .
Airbus has sold a total of 236 A380s worldwide.

Industry sources said last month it would sell another 5 aircraft to Qatar Airways, doubling that airline's A380 order, at the Dubai Air Show next month, when the same airline would also opt for Engine Alliance engines.

(Editing by David Holmes, Greg Mahlich)

2011-10-27T20:18:00.000-07:00

First Dreamliner passengers sing new jet's praises

By Ben Mutzabaugh, USA TODAYUpdated 3h 26m ago
ABOARD THE BOEING 787 DREAMLINER

– Boeing's much-ballyhooed but long-delayed 787 Dreamliner finally entered commercial service this week, flying paying passengers for the first time on an All Nippon Airways flight from Tokyo to Hong Kong on Wednesday.

The ultramodern 787 is being hailed in the aviation industry for its technological innovations, including the carbon fiber construction that makes it the first jetliner not made of traditional aluminum and steel.

But while the 787 is drawing acclaim from industry observers, how will it go over with ordinary passengers?

The Dreamliner — which Boeing designed with passenger comfort as a priority — drew nearly unanimous positive reviews from the roughly 240 passengers lucky enough to secure a seat on its inaugural flight.
Those passengers, however, might not be a good barometer for how the jet is received by the average traveler. Nearly all of them were on board because they enthusiastically sought it out.

Only 100 seats on the 264-seat jet were made available to the general public, and ANA received more than 25,000 applications for those. The other 140 on board were a mix of journalists, airline officials and other industry workers.

Also among those 140: six business-class fliers who bid for their seats on Flight 7871 via auction. One passenger — Gino Bertuccio of Miami — paid more than $33,000 via that auction to get his spot on the inaugural flight. He also flew on the inaugural flight of the Airbus A380 in 2007.

So will the glowing reviews of the 787 hold up as the Dreamliner's passenger counts soar and as more airlines begin to fly the jet — possibly in less customer-friendly configurations than Boeing had envisioned?

"I think the 787's benefits will be appreciated mostly by frequent travelers and aviation enthusiasts," says Henry Harteveldt, co-founder of San Francisco-based travel research firm Atmosphere Research Group. "Passengers may have a better flight but may not know why, since some of these benefits are somewhat subtle."

Among the potentially "subtle" passenger-experience upgrades that were put before fliers on the 787 inaugural:

•Bigger windows. In what was hands-down the top new feature cited by passengers on the inaugural flight, the Boeing 787's windows are now the biggest of any commercial passenger airliner. Boeing says the 787's windows are 30% bigger than those on a Boeing 767. The windows also are now positioned closer to eye level for most passengers, meaning fewer strained necks from looking out the window.

"The windows," said Flight 7871 passenger Stephanie Wood of Davie, Fla., when asked about her favorite feature on the 787.

"You really notice it and it makes the plane feel so bright and like you're not shut in," added Wood, who also joined the flight via the charity auction after she and her husband, Dean, successfully bid on a pair of business-class tickets. The couple would not divulge the price they paid.

In addition to the well-received larger size, the windows on the 787 do not have manual shades. Instead, they are darkened by a button control that can electronically dim the light partially or entirely.

•Storage bins. Boeing says they were designed to accommodate the wheeled roller bags that have become ubiquitous. The bins on ANA's 787 — which are about 30% bigger than on Boeing 777 aircraft — easily accommodated even large roller bags, though irregularly sized luggage could mean a less-than-optimal fit.

In addition to making it easier for customers to fit their bags into the bins, Boeing thinks that will help more flights take off on time, because — in theory — passengers won't need as long to hoist their bags into the overhead bins.

•Cabin environment. Thanks to new technology on the Dreamliner, flights are pressured to the equivalent of 6,000 feet in elevation, lower than the 8,000-foot mark that's typical for commercial passenger aircraft. Boeing says that — coupled with the higher humidity levels possible on the 787 — should alleviate headaches, fatigue and reduce the general wear and tear travelers often feel from flying.

•Protected lap space.Patrick Smith, an airline pilot and Salon.com columnist, wasn't on the inaugural flight but says he's intrigued by "ANA's shell-style economy-class seats. They have double-wide armrests and recline by sliding forward, not by hinging backward, meaning you never impinge on the legroom of the person behind you, even in the full recline position."

•Cabin aesthetics. Vaulted ceilings between luggage bins and over galley areas help play off the larger windows to make the cabin feel more spacious. Despite that, the aisles on the 787's inaugural flight still felt clogged when passengers got up in bunches.

•Gadget friendliness. ANA's configuration offered USB ports and electric outlets at every seat, allowing customers to charge a cellphone or access music or movie files via the in-flight entertainment console. Power outlets mean laptops now can stay charged for an entire flight.

•Quieter cabin. Boeing has said cabin noise on the Dreamliner will be lower than on other jets that typically fly on long-haul routes. While that was hard to quantify on the inaugural 787 flight to Hong Kong, most passenger conversations seemed to flow easily.

Another advantage for airlines (and environmentally concerned passengers): The Dreamliner's reduced weight and aerodynamic profile will increase fuel efficiency up to 20%.

Still, Smith of Salon.com warns that even with all of those perks, not all Dreamliners will be created equal.

"In the end, though, how the plane is received will mostly come down to the way its operators tailor and customize the experience," Smith says.

Chris Sloan, another inaugural flight passenger, suggests the Dreamliner has been subject to overhyped expectations lingering from the 2007 debut of the Airbus A380 — now the world's biggest passenger jet. During that rollout, the A380's selling point was obvious: size. Sloan says the 787's significance is just as important, albeit it more subtle.

"Superficially, the windows are great. The high ceilings are great. And the bins," Sloan says of the 787. But, speaking about possibly inflated expectations, Sloan adds, "Do people really think all of a sudden economy class is going to become first class? No, it's not."

Sloan and others say the 787's strengths will get a chance to shine once the carrier begins flying the ultra-long-haul flights it was designed for — flights of more than 10 hours that will be significantly longer than the Dreamliner's four-hour debut flight between Tokyo and Hong Kong.

"We'll really see those advantages on a 14-hour flight," Sloan say. "A lot of these features will be much more apparent on ultra-long-haul flights. When you're exposed to those sort of conditions for 13 or 14 hours, that's when the Dreamliner will be at its best."

The first such service for the Dreamliner will start in January, when ANA will deploy the aircraft on a route between Tokyo and Frankfurt. Starting next year, United hopes to put its first Dreamliner on a long route of its own: Houston to Auckland, New Zealand.

Until then, however, that leaves the question of whether ordinary travelers will be savvy enough to notice the 787's differences — such as the double armrests that will keep middle-seat customers from fighting over a single armrest.

Stephanie Woods says she isn't sure.

"Will people notice those things? I don't know," she says. They're nice features, but — for some — they may not."

2011-10-27T18:48:00.000-07:00

Is Delta Air Lines Hiding Weakness?

By Rex Moore
October 27, 2011

Delta Air Lines (NYSE: DAL ) carries $14.5 billion of goodwill and other intangibles on its balance sheet. Sometimes goodwill, especially when it's excessive, can foreshadow problems down the road. Could this be the case with Delta Air Lines?

Before we answer that, let's look at what could go wrong.

AOL blows up

In early 2002, AOL Time Warner was trading for $66.27 per share. It had $209 billion of assets on its balance sheet, and $128 billion of that was in the form of goodwill and other intangible assets. Goodwill is simply the difference between the price paid for a company during an acquisition and the net assets of the acquired company. The $128 billion of goodwill in this case was created when AOL and Time Warner merged in 2000.

The problem with inflating your net assets with goodwill is that it can -- being intangible, after all -- go away if the acquisition or merger doesn't create the amount of value that was expected. That's what happened in AOL Time Warner's case. It had to write off most of the goodwill over the next few months, and one year later that line item had shrunk to $37 billion. Investors punished the stock along the way, sending it down to $27.04 -- or nearly a 60% loss.

In his fine book It's Earnings That Count, Hewitt Heiserman explains the AOL situation and how two simple metrics can help minimize your risk of owning a company that may blow up like this. Let's see how Delta Air Lines holds up using his two metrics.
Intangible assets ratio

This ratio shows us the percentage of total assets made up by goodwill and other intangibles. Heiserman says he views anything over 20% as worrisome, "because management might be overpaying for the acquisition or acquisitions that gave rise to the goodwill."

Delta Air Lines has an intangible assets ratio of 33%. This is well above Heiserman's threshold, and you should keep a close eye on just how the company is fueling its growth. It's also useful to compare it to tangible book value.

Tangible book value

Tangible book value is simply what remains after subtracting goodwill and other intangibles from shareholders' equity (also known as book value). If this is not a positive value, Heiserman advises you to run away because such companies may "lack the balance sheet muscle to protect themselves in a recession or from better-financed competitors."

Delta Air Lines' tangible book value is -$13.7 billion, so we have another yellow flag.

By the way, I asked Heiserman about the tendency for some large-cap blue chips -- names like Procter & Gamble, IBM, and Altria -- to have a high intangible assets ratio and negative tangible book value. He says this can be OK, provided the company has (1) modest or no net debt, (2) persistent and rising levels of free cash flow, and (3) stock buybacks at a discount to intrinsic value.

Foolish bottom line

To recap, here are Delta Air Lines' numbers, as well as a bonus look at a few other companies in its industry.

Delta Air Lines 33% ($13,723)

US Airways Group (NYSE: LCC ) 6% ($403)

Southwest Airlines (NYSE: LUV ) 5% $5,515

United Continental Holdings (NYSE: UAL ) 24% ($7,396)

Data provided by S&P Capital IQ.

If you own Delta Air Lines, or any other company that fails one of these checks, make sure you understand the business model and management's objectives. You can never base an entire investment thesis on one or two metrics, but there is a yellow flag here. I'll help you keep a close eye on these ratios over the next few quarters by updating them soon after each earnings report.

2011-10-27T16:58:00.000-07:00

(T)hey (S)tand (A)round And...

By Ed O'Keefe
The Washington Post

TSA screener removed for inappropriate note

A Transportation Security Administration screener who wrote a personal message on the back of a formal inspection slip placed in a female passenger’s bag is no longer checking luggage, the agency said Wednesday.

The screener at Newark Liberty International Airport wrote the message on the back of a Notice of Inspection slip that TSA places in bags that require a physical search.

“Get your freak on girl,” the message said, allegedly in response to a sex toy packed in the luggage of Jill Filipovic, a Manhattan blogger and lawyer.

Filipovic discovered the personal message on the back of the inspection slip when she unpacked her bags after arriving in Ireland last Sunday. In response, she tweeted the photo and blogged about it: “Total violation of privacy, wildly inappropriate and clearly not ok, but I also just died laughing in my hotel room.”

Amid media inquiries, TSA initially questioned the allegations, but Wednesday announced it had identified the employee responsible for the message.

“That individual was immediately removed from screening operations and appropriate disciplinary action has been initiated,” the agency said in a message posted on its blog. “The handwritten note was highly inappropriate and unprofessional, and TSA has zero tolerance for this type of behavior,” the agency added.

TSA said it has reached out to Filipovic to apologize for the incident.

An agency spokesman could not say whether the screener had been reassigned, put on leave or fired, citing federal personnel privacy rules.
The incident is just the latest in a series of unrelated episodes involving inappropriate or criminal behavior committed by TSA screeners. Here’s a sampling:
Oct. 4, 2011: TSA apologizes to a breast cancer survivor subjected to a public patdown at New York’s Kennedy Airport even though she offered to produce documentation about her medical implants.

Jan. 3, 2010: A TSA agent was arrested at Los Angeles International Airport for behaving erratically. The guard had just gotten off duty and was heard saying, “I am god, I’m in charge.”

Jan. 6, 2010: An internal investigation discovered that four LAX TSA agents used drugs at an after-hours party. All four were tested for drugs and one came back positive. That employee was fired.

Jan. 22, 2010: A screener lost his job after pretending to plant a plastic bag of white powder in the carry-on luggage of a passenger at the Philadelphia International Airport. A spokeswoman called the behavior “highly inappropriate and unprofessional.”

Jan. 28, 2010: A screener was put on desk duty after she was photographed sleeping in plain sight at LaGuardia Airport.

2011-10-26T19:37:00.000-07:00

JetBlue to ‘Aggressively’ Bid for LaGuardia, Reagan Slots

By Mary Schlangenstein - Oct 26, 2011 2:50 PM MT

JetBlue Airways Corp. will bid for takeoff and landing slots being auctioned at New York LaGuardia and Washington Reagan airports, possibly tapping its $1.24 billion cash balance in the effort.

The U.S. Federal Aviation Administration is preparing to auction 16 pairs of slots at LaGuardia and eight at Reagan under a plan by Delta Air Lines Inc. and US Airways Group Inc. to swap assets at the airports. JetBlue wants to expand at both facilities.

“We have a plan to aggressively bid and win those slots,” Chief Executive Officer Dave Barger said today in an interview. “We’re interested in both airports.”

JetBlue is based in New York and has the most daily domestic departures from the city’s John F. Kennedy International Airport. It operates as many as 11 daily flights from LaGuardia and nine from Reagan. The airline likely would face competition for the slots from Southwest Airlines Co., the largest discount carrier, which has said it’s studying whether to bid for them.

“JetBlue is concerned about Southwest’s further incursions into what it views, in a geographical sense, as its turf,” said George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Virginia. Even with additional slots, JetBlue would “end up with such a small market footprint that they’re not going to get much traction.”

Bidding Process

Barger declined to comment on how many slots it will seek at each airport. Because takeoffs and landings are limited at both airports, airlines must buy or trade slots in order to expand. In the pending auction, the slots are being sold in bundles instead of individually.

“With how the bidding is taking place and our balance sheet strength, we do not believe we’ll have an issue at all in terms of actively participating in the bidding process at both airports,” Barger said. The airline had $1.24 billion in cash and short-term investments at Sept. 30.

Barger commented as JetBlue reported that third-quarter net income tumbled 41 percent to $35 million as increased spending for fuel eclipsed higher fares and passenger traffic. Profit of 11 cents a share fell from 18 cents a year earlier.

Excluding the cost of retiring some debt early, the per- share profit was 12 cents, missing the 13-cent average of 15 analyst estimates compiled by Bloomberg.

Embraer Cancellations

JetBlue canceled the deliveries of 12 Embraer SA E190 aircraft that had been scheduled for delivery in 2014, 2017 and 2018 under a previously announced plan to limit its E190 fleet to no more than 75 planes, the airline said today on a conference call. JetBlue said in June it was working with Embraer to remarket 25 remaining E190s it had ordered.

The airline also deferred the delivery of seven E190s to 2018 instead of 2013 and 2014 as previously planned. JetBlue will take two E190s in 2013 and two in 2014. The changes will reduce JetBlue’s aircraft obligations by about $200 million, the company said.

JetBlue’s fuel expense climbed 55 percent to $454 million in the third quarter and was the company’s largest cost, the company said in statement. The average price JetBlue paid for each gallon of jet fuel rose 44 percent from a year earlier to $3.25.

The airline managed a sixth straight quarterly profit as it bucked the industry trend by adding capacity while other carriers trimmed seating and flights to help reduce operating costs.

Sales rose 16 percent to $1.2 billion on an 8.2 percent increase in traffic. Yield, or average fare per mile, gained 7.7 percent. JetBlue has focused its growth on Boston, where the company is trying to win more business travelers, and in the Caribbean.

JetBlue rose 1.4 percent to $4.42 at the close in New York. The shares have tumbled 33 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

2011-10-26T19:12:00.001-07:00

Return of Pan Am, for a Weekend

By SCOTT MCCARTNEY

Flight attendant Lola Torres used to pack seven pairs of white gloves on trips so she never wore one soiled. Carmen Reyes met airline-imposed weight limits with a "caviar diet"—four servings a day of the delicacy acquired cheaply on layovers in Tehran.

Scott McCartney on Lunch Break discusses a reunion of Pan Am employees last weekend in Miami, where they reminisced about the glam days of travel as a new TV show glorifies it "Mad Men" style and debated about why Pan Am died.

.At a reunion of 600 Pan American Airlines alumni last weekend in Miami, former employees got together to share stories of glamour and history, from the Beatles, kings and presidents to Vietnam orphan airlifts and hijackings. The memories flowed as freely as the Dom Pérignon they used to pour. And they can still do a perfect "clipper dip," where a flight attendant royally bends at the knees to pour beverages rather than leaning over passengers.

"We were shoehorned into history just by showing up to work," said Rebecca Sprecher, who became a stewardess in 1972 two weeks after graduating from college. "You never knew who you were going to meet or what was going to happen."

A stroll down the Pan Am memory runway highlights the dramatic changes in air travel since the airline was founded in 1927 by Juan Trippe to carry mail to South America. Within a year, he realized that putting wicker chairs and passengers on planes would improve the finances, paving the way for carriers around the world. Pan Am crossed oceans with flying boats and launched the jumbo-jet Boeing 747 in 1970.

Bonnie Hinck, a Pan Am flight engineer and pilot from 1987 to 1991, and Mario Baldatti, a Pan Am pilot from 1964 to 1991, posed for a friend at the Pan Am reunion in Miami Saturday. The two met at a dive shop in Key Largo, Fla., and were married in 2004.

In its heyday, the airline served seven-course meals cooked on board and sported perfectly coiffed flight attendants assisting passengers in suits and ties. The era is depicted on TV with ABC's "Pan Am," a Sunday night drama that had a promising start this fall but has slipped to about 5.7 million viewers in its most-recent episode, according to Nielsen ratings.

Pan Am, which ceased operations in bankruptcy in 1991, represents an era of sky-high fares that made flying available only to the well-to-do. A ticket from New York to Buenos Aires on Pan Am cost $1,000 in 1974, and today costs about $1,000, notes Zsolt Monostory, who met his wife, a flight attendant, on a Pan Am flight in 1978. "I'm not surprised things have gone downhill," he said. "First class now is not the same as first class then. Don't fool yourself."

The market does still exist for grace in the sky, but it's very small. Singapore Airlines, which still maintains strict grooming standards for flight attendants, offers private first-class cabins on its A380 jumbo jets. Lufthansa has a first-class terminal in Frankfurt with white-tablecloth dining, bathtubs with rubber duckies and luxury-car rides right out to airplane stairs.

The Pan Am Worldwide Family Reunion was organized by Pan Amigo News, a newsletter that has operated since the airline folded. The gathering was held in Pan Am's original seaplane terminal in Miami and included tours of city hall led by Miami Mayor Tomas Regalado. The event, one of several periodic Pan Am reunions, culminated in a gala held in a former Coast Guard hangar.

Carmen Ongay, who started working for Pan Am in 1962 and learned tricks like fluffing scrambled eggs with soda water for coach passengers, put off a scholarship offer to the London School of Economics after college in Puerto Rico to take an offer from Pan Am. She thought it might be fun to be a flight attendant for six months, but once she got a taste, she couldn't give it up. She's been a flight attendant for 50 years, now flying for Delta Air Lines.

"It was a way of life," she said. "There were flights where you would take your long gown because we were always getting invited to the passengers' parties—and even a coronation" for the shah of Iran.

But not all the memories were crowned with caviar. On one refugee charter flight out of Vietnam, a passenger unsuccessfully tried to give her baby away to Ms. Ongay or other crew members in hopes of giving the child a more stable upbringing. There were long stretches away from home when the airline sent employees on short notice around the world. And there were many uncomfortable flights where flight attendants deflected the sexual advances of passengers. "The nights got longer and longer," Ms. Ongay said.

Ken McAdams, Pan Am's chief pilot for many years, flew the last U.S. commercial flight out of Tehran in 1979 when the shah fled into exile, and the first U.S. commercial airline flight into China after President Nixon reopened relations in 1972.

He was on duty during two terrorism hijacking attempts. In 1970, pilots raced to land and evacuate a jet minutes before bombs rigged with timers exploded in Cairo. Another time, terrorists armed with machine guns attacked a Pan Am flight in Pakistan before it departed. Mr. McAdams, in contact with the crew by high-frequency radio, told the crew to escape out cockpit windows so the plane couldn't get airborne.

"No one realizes all that Pan Am did for this country."

Mr. Topping, who was Pan Am's station manager in Saigon, facilitated orphan airlifts from Vietnam with 747s fitted with 300 cardboard boxes on seats for diaperless babies. He also promised the airline's 61 Vietnamese workers that they and their immediate family members would be airlifted to the U.S. if Saigon fell. The 61 people turned in 700 names of "immediate" family members. On April 24, 1975, he put 463 people on a 747 that had 375 seats. People were put in bathrooms and galleys and on the floor for what would be the last U.S. flight out of Saigon.

Pan Am suffered a long, painful money drain and corporate death. It over-expanded with the Boeing 747, forcing it to discount prices just as oil prices skyrocketed with OPEC oil embargoes. It competed against subsidized foreign airlines and new low-cost start-ups and found itself ill-prepared for U.S. airline deregulation because it lacked a domestic network to feed passengers to its international flights. The 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, caused bookings to evaporate. In 1991, what little was left of the airline was liquidated at bankruptcy auction.

To Jackie Knackstedt, who started as a Pan Am stewardess on the Boeing 707 in 1973 and currently works as a Delta flight attendant, the end of Pan Am meant younger passengers and airline workers will never know what travel once was or could be.

Instead of five-day layovers in Fiji and three-day layovers in Sydney, most of her stops now amount to only nine hours before returning to duty, Ms. Knackstedt said. Instead of cooking and serving gourmet meals, she now sells snacks and sandwiches.

"The other day a passenger said to me, 'You don't look like you're enjoying this,' " Ms. Knackstedt said. "If I wanted to sell food, I'd work in a supermarket."

2011-10-22T22:26:00.000-07:00

Southwest to run AirTran separately if pilot vote fails

By Mary Schlangenstein and Mary Jane Credeur Bloomberg News STLtoday.com

Southwest Airlines Co. told pilots that it would keep operating newly acquired AirTran Holdings Inc. as a stand-alone carrier if union members don't agree to combine seniority lists.

Southwest briefed pilots on a "Plan B" for 'separate and unintegrated" operations after that union declined to hold a membership election on a seniority proposal, according to an AirTran union summary obtained by Bloomberg News. Pilots at both airlines are now voting until Nov. 7 on a new agreement.

Keeping AirTran flying on its own would run counter to the goal of folding the discount carrier into Southwest, the biggest low-fare airline. Dallas-based Southwest paid $1 billion in cash and stock in May to buy AirTran, winning access to fly into Atlanta, home of the world's busiest airport.

Winning pilots' approval of one seniority list would give Southwest a timeline to blend workforces and fleets, and set union members' rankings for pay, schedules and the types of aircraft they fly. For AirTran pilots, ratification will mean "certainty of integration," Southwest said in a Sept. 22 letter to union members.

Beth Harbin, an airline spokeswoman, declined to discuss the AirTran union summary or what options that Southwest would consider if pilots don't accept the new seniority agreement.

Jim Morris, a spokesman for the Air Line Pilots Association at AirTran, declined to comment, as did Jacob North, a spokesman for the Southwest Airlines Pilots' Association. AirTran has about 1,700 pilots, while Southwest has more than 6,000.
The seniority agreement now being voted on by pilots was crafted after AirTran's union decided against sending the original version to rank-and-file members. Under the new plan, current Southwest pilots' seniority rights would be protected, and AirTran pilots would get pay raises.

Pilots' failure to agree on an integration plan can scuttle mergers or keep airlines from operating as a single carrier after a tie-up.

Southwest's 2009 bid for Frontier Airlines Holdings Inc. faltered when the carriers' pilots couldn't agree on seniority.

Copyright 2011 STLtoday.com.

2011-10-22T11:33:00.004-07:00

How does the "Pan Am" television series compare with real life travel?

Overhead Bin MSNBC

If you watched the Sunday night premiere of "Pan Am," you might be wondering if the idyllic version of 1960s air travel matches the reality of those who worked for the iconic airline.

Overhead Bin wondered, too. So we asked two former Pan Am flight attendants to watch the show and tell us if their experiences were anything like those portrayed on-screen.

Bronwen Roberts was hired at Pan Am in 1958 shortly after graduating England's University of Leeds with a degree in French. She flew until 1989 and kept in a scrapbook the advertisement listing the 15 qualifications required of flight attendant applicants. "You had to have a pleasant personality and speaking voice, excellent health and you had to be single," said Roberts. "Really single. Not widowed, divorced or separated."

A weight between 110 and 135 pounds was another qualification. Roberts said the pre-flight weigh-ins and grooming inspections depicted on the show were true-to-life.

"When you checked in for a flight you'd go into the office and there'd be a grooming supervisor on duty all the time," said Roberts. "She could say, `Your hair is too long' or `You are overweight' and send you home until you fixed it. Just like the TV show, you could get grounded for uniform violations."

Helen Davey also found the on-screen grooming checks familiar. Now a psychotherapist in Los Angeles, she was hired as a Pan Am flight attendant in 1965 at age 21 and flew until 1986.

"Yes, we had to wear girdles," said Davey. "And if you were one minute late for a trip, they'd send you home."

In the first episode, a child is escorted into the cockpit mid-flight to visit the pilots. Passengers are also offered ashtrays so they can smoke. Roberts and Davey both said that those in-flight activities were once very common.

"We definitely took children into the cockpit so they could sit in the pilot's seat," said Roberts. "And in terms of smoking, we'd have little packets of cigarettes and matches that we'd go around with."

"Even flight attendants could smoke," added Davey. "But when they did, they had to be sitting down."

In the episode (spoiler alert), two of the flight attendants are shown doing work for the CIA. If this seems like the least plausible story line, Roberts and Davey both said it was realistic.

(Ed...Many CIA operatives were Pan Am station managers)
"That is definitely a true story," said Roberts, who during her tenure heard rumors that at least one flight attendant was involved with the CIA. "At one point she just disappeared. No one knew what happened to her."

Nancy Hult Ganis, an executive producer for the show and a former Pan Am flight attendant, told wired.com that her research turned up stories about the airline's involvement with State Department operations on behind-the-scene missions in dangerous locations.
The TV program also shows flight attendants with plenty of time to chit-chat, and at least one crew member involved in an off-duty affair with a passenger.

"Some of those flights were quite long – 15 or 20 hours – and there were fewer people, so you could get to know them," said Roberts. "People weren't glued to their laptops like they are now. And some people did end up marrying passengers they met on flights."

Roberts and Davey had only a few quibbles with the first episode. Both said their uniforms were a warmer, more subdued shade of blue than those worn by the TV actresses and that flight attendants in their day would never be allowed to have hair touching their shoulders.

But there's one moment that Davey said was spot on. "I liked the scene when they were ready for take-off and one flight attendant says to the new hire, `Buckle up. Adventure calls.' That's how it was. We all thought we had lucked into the best job into the world."

2011-08-30T19:58:00.000-07:00

Delta LaGuardia Growth Bid Spurs Southwest to Demand More Slots for Rivals

By Mary Jane Credeur - Aug 30, 2011 1:11 PM MT

Southwest Airlines Co. (LUV) and other carriers objected to Delta Air Lines Inc. (DAL)’s efforts to expand at New York’s LaGuardia airport through a proposed swap of takeoff and landing slots with US Airways Group Inc. (LCC)

The accord between Delta and US Airways calls for divesting 48 slots to smaller rivals, about 30 percent fewer than a previous plan that those two carriers walked away from last year. Dallas-based Southwest said in a filing that there is “no justification for such smaller divestitures.”

The Department of Transportation should “seriously consider even larger carve-outs in light of the severe -- and permanent -- negative impact that the proposed transaction will have on competition,” Southwest said in a regulatory filing posted today on the agency website.

JetBlue Airways Corp. (JBLU) and Virgin America Inc. also filed objections. The Airports Council International trade group based in Washington urged regulators to deny the proposal from Atlanta-based Delta and Tempe, Arizona-based US Airways, saying it would strip local airport authorities of control of their facilities.

Last month U.S. regulators tentatively approved the deal, which would give Delta 132 more slot pairs at LaGuardia and control of about half the flights there. In exchange, US Airways would get 42 pairs at Washington Reagan National Airport.

LaGuardia and National are so congested that they are under flight restrictions, meaning carriers must trade slots in order to grow.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

2011-08-30T12:37:00.001-07:00

American expects new 737 engines in 2018

Dallas Business Journal - by By Matt Joyce , Staff Writer
Date: Tuesday, August 30, 2011, 11:38am CDT

Boeing sees ‘overwhelming demand’ for 737 model with new engines
American Airlines said Tuesday, that it expects to start flying Boeing 737s with a redesigned engine in 2018.

The announcement from American (NYSE: AMR) followed a vote by the Boeing Co. Boeing Co.

Boeing names new 737 model: 737 MAX

In July, American Airlines announced plans to acquire 460 new aircraft from Boeing (NYSE: BA) and Airbus. The Fort Worth-based airline said the plan would give it the youngest and most fuel-efficient fleet in the industry.
American said it plans to acquire a total of 200 aircraft from the 737 family, with options for another 100. That includes taking delivery of 100 aircraft from Boeing’s current 737 family starting in 2013.
Starting in 2018, American expects to be a launch customer for Boeing's re-engined 737. American said the new engine enhance its fuel-efficiency gains.

American’s commitment to the plan was contingent on the Boeing board’s approval of the 737 engine re-design.
American has not detailed the financial arrangements of the acquisition, but said it will benefit from about $13 billion of “committed financing from the manufacturers through lease transactions that will help maximize balance sheet flexibility and reduce risk.”

2011-08-21T21:37:00.001-07:00

American: Large Order Ensures Job Security

By Darren Shannon
Aviation Week, a division of The McGraw-Hill Companies

American Airlines’ senior management believes last month’s order for at least 460 Airbus and Boeing narrowbodies not only affirms the airline’s commitment to sustained profitability, but also the job security of its employees.

The narrowbody order (Aviation Daily, July 21) is part of a wider fleet revival plan that simplifies the domestic fleet from four types to two families of aircraft, adds Boeing 777-300ERs in 2012 and 2013, and introduces at least 42 (and as many as 100) 787s from 2014. American’s parent company is also divesting its interest in regional affiliate American Eagle Airlines to allow the mainline carrier greater flexibility in contracting feeder services across its network.

American’s restructuring initiative, dubbed Flight 2020, also focuses the carrier’s efforts on five cornerstone markets—Chicago, Dallas, Los Angeles, Miami and New York—while integrating its long-haul operations with partners such as Japan Airlines and Europe’s International Aviation Group.

“We are protecting jobs and salaries,” explains Senior VP of Human Relations Jeff Brundage during a series of interviews with American executives. “This plan makes us a competitive, profitable airline.”

A key facet of American’s narrowbody order is an innate flexibility that allows it to adapt to shifts in demand. Not only do the first 230 aircraft arrive between 2013 and 2017 on lease, they also give the airline various integration options, be it a one-for-one swap out with the MD-80s primarily targeted in the first wave of retirements, a one-for-two replacement ratio or even a simple addition to the fleet.

Those initial deliveries also are on 10-year leases, which give American the choice of culling aircraft or extending their revenue service depending on demand. And as each of the leased aircraft come straight from the manufacturing line, American is provided with a “maintenance honeymoon” for the first several years of operation with no commitment to retain them into old age.

As an added bonus, notes one executive, this lease deal could also rotate out a large number of aircraft from American’s fleet in the mid 2020s just as Airbus and Boeing unveil clean-sheet narrowbodies, giving it an even greater advantage over competitors than the re-engined component of its recent order.

Airbus’s A320NEOs (new engine option) and a re-engined 737 that should be formally unveiled in the coming months form the second part of American’s narrowbody order, again giving it fleet flexibility.

The airline is keen to note, though, that its narrowbody order is not an expansion plan, and that the core intent is to quickly revive its aging single aisle fleet into the most fuel efficient in the U.S. “Reducing unit costs is important to us,” says Managing Director of Corporate Planning Vasu Raja.

This goal requires a large number of annual deliveries, and American is preparing to take up to 55 aircraft in some years. But as Raja notes, American has experienced such rates before, notably in the 1980s and 90s when the MD-80s and 757s (along with the retired fleet of Airbus A300-600s) now scheduled for replacement were introduced to the airline’s fleet.

There are still some elements to American’s fleet upgrade that need to be finalized, including union backing. Under current terms, American’s pilots are not authorized to operate the Airbus narrowbodies (and some of the 737s) nor the 777-300ERs and 787s as their current contract does not stipulate pay rates for these aircraft.

Pilot pay rates is one of the reasons the 787 deal from 2008 (Aviation Daily, Oct. 16, 2008) remains a memorandum of understanding, as the aircraft has the weight characteristics of one type currently provided for in the pilots contract but the range of another. By contrast, the Airbus and Boeing narrowbodies contained in the recent order and the 777-300ERs are similar to aircraft already contained in the contract, which executives say allows the carrier to place firm orders for these fleets.

American’s pilot and maintenance unions are currently in negotiations with the carrier, and expectations that a solution will be reached are high. For one, says management, the fleet plan shows the company’s commitment to remain in the top tier of world carriers, and in turn a commitment to its employees that the airline has a vision for the future. “There is a journey ahead of us, but it is not a road that is so twisted that we can’t get there,” says Brundage.

Copyright © 2011 Aviation Week, a division of The McGraw-Hill Companies.

2011-08-14T13:23:00.000-07:00

Sept. 11 changed everything about air travel, now more of a grind for passengers and industry
Scott Mayerowitz, AP Airlines Writer, On Sunday August 14, 2011, 3:31 pm

Five-year-old Frank Allocco is 37,000 feet above America, face pressed against the window.
"Cool," he says to his 6-year-old sister. "Francesca, look."

It's their first flight. They ignore a Harry Potter DVD and video games. Instead, there are rivers, mountains and tiny cars below.

Francesca chimes in: "Wow, Frank, look at that cloud."

For Frank and Francesca, soaring high above the country is magical. The kids from Park Ridge, Ill., are treated like stars. A flight attendant gives them wing pins. Mom and dad snap photos.

For most of us, though, the romance of flight is long gone -- lost to Sept. 11, 2001, and hard-set memories of jets crashing into buildings.

We remember what it was like before. Keeping all our clothes on at security. Getting hot meals for free -- even if we complained about the taste. Leg room.

Today, we feel beaten down even before reaching our seats. Shoes must be removed and all but the tiniest amounts of liquids surrendered at security checkpoints. Loved ones can no longer kiss passengers goodbye at the gate. And airlines, which have struggled ever since the day terrorists used airplanes as missiles, are adding fees, squeezing in passengers and cutting amenities to survive.

In interviews conducted during a week flying around the country -- nine flights totaling 8,414 miles -- many passengers expressed anger with air travel, which they said left them feeling like second-class citizens. Generally, the terrorism fears that prompted most of the changes were a distant afterthought.

"Anytime I walk into an airport, I feel like a victim," said Lexa Shafer, of Norman, Okla. "I'm sorry that we have to live this way because of bad guys."

Despite the aggravations, America's skies are busier than ever. Airlines carried 720 million passengers last year, up from 666 million in the year before the attacks.

There was little concern about terrorism even on a flight that was almost identical -- same route, airline, plane type and departure time -- to United Airlines Flight 93, which crashed in a Pennsylvania field on Sept. 11 after passengers fought the terrorists for control.
Instead, passengers were jockeying for position at the gate as if they were waiting for the doors to open on a day-after-Thanksgiving sale. They glanced at each other's tickets and mumbled complaints when somebody boarded before they were supposed to.
"Passengers have lost civility," said Karen McNeilly, of Gold Hill, Ore.

And it's not just the boarding process that would make Emily Post cringe.

On a flight to Houston, an oversized man stole a window seat. Why? Because in his assigned seat he would have spilled into the aisle. The rightful occupant couldn't really object since the seat-stealer was already firmly planted, tray table down, Burger King cup out.

It's easier now for passengers to get annoyed with each other. We're simply getting packed in more tightly by airlines that are reining in costs more than they ever did before the terror attacks.

A decade ago, an average of 72 percent of seats per flight were occupied. Today, 82 percent are. Passengers once had a shot at an empty middle seat. Now that rarely happens. Airlines have added rows, meaning less leg room. Smaller, regional planes now carry a quarter of all passengers, twice that of a decade ago.

"It is a dismal experience that you simply put up with because you have to get from point A to point B. It used to be the part of the trip you looked forward to," said Virgin America CEO David Cush. "As an industry, we've found a way to beat that joy of flying out of people."

In another effort to balance their books, airlines have added fees for once-free services. Last year, $8.1 billion in fees were collected, more than three times the $2.5 billion collected before the attacks, adjusted for inflation.

Checked-luggage fees accounted for $3.4 billion of the 2010 total. Without them, major airlines would have lost money last year rather than reporting a combined $2.6 billion in profits.

It's no wonder that for shorter trips, Americans now avoid flying. New inter-city buses have popped up and Amtrak now carries 37 percent more riders than a decade ago. Buses and trains don't have the security checkpoints that make it necessary for air passengers to arrive at the airport about an hour before domestic flights and two hours in advance for trips out of the U.S.

The days of arriving minutes before a flight are a distant memory, and lines are inconsistent. While one Transportation Security Administration checkpoint took four minutes to clear, another involved a 27-minute wait.

Frequent fliers know the ever-changing set of security rules. Most others don't.

Some people worry about radiation-emitting, modesty-eroding full-body scanners, although their use is still sporadic.

At Newark Liberty International Airport, the machines were shut down during the Monday morning rush. In Fort Lauderdale, Fla., two lanes were open. One had a full-body scanner. One didn't. Passengers could pick.

"I'm not really convinced that any of this security is doing anything other than making people feel safe," said Matthew Von Kluge, of Chicago. He was wearing a shirt created by his former boss, fashion designer Vivienne Westwood, saying: "I am not a terrorist. Please don't arrest me."

Diane Dragg, of Norman, Okla., said: "I'd rather do it than be blown up."

Not everything has been bad for fliers. Many planes now have individual TVs and Wi-Fi. Kiosks and websites make checking in easier. And with travelers arriving earlier and earlier at the airport, there are better shops and restaurants.

It's been harder for airlines to find a silver lining. They're out $54.5 billion in the U.S. over the last decade, having lost money in seven of the past 10 years.

At least 33 airlines have filed for bankruptcy protection, including Delta, Northwest, United and US Airways. Some, including ATA and Aloha, stopped flying.

It's not just Sept. 11 that hurt airlines, which were hit hard by spikes in oil prices and a drop in travel during the recession. But after the terror attacks, just getting passengers to fly again was a challenge.

In the first year, traffic fell nearly 8 percent. It took three years to return.

"People were just scared to fly," said F. Robert van der Linden, a curator at the National Air and Space Museum.

To keep planes in the sky, airlines burned through their cash reserves and borrowed heavily, said Jim Corridore, an airline analyst with Standard & Poor's. Fares were dropped to unprofitable levels to lure back passengers.

It worked, but vacationers now expect rock-bottom prices. Airfares today are 20 percent lower than they were on 9/11, when adjusted for inflation.

Airlines now operate on razor-thin margins, with fewer employees.

More than a quarter of the industry's 620,000 full-time jobs pre-9/11 were eliminated. Those that remain are less lucrative: The average pay for a pilot with 10 years of experience is now $145,000, down 13 percent when adjusted for inflation.
For passengers, the real legacy of the attacks might not just be more invasive security checks, new fees or other things we never had to worry about before -- like whether the name on our ticket precisely matches the name on our driver's license. It might just be losing our ability to relax in the skies.

Though children like Frank and Francesca can still feel the joy of flying, Ethan Estes of Louisville, Ky., could well speak for most adults.

"If the airline does everything perfect," he said, "the trip is just bearable."

Scott Mayerowitz can be reached at http://twitter.com/GlobeTrotScott

2011-07-23T10:09:00.001-07:00

American Airlines charts its future
July 22, 2011 10:35 pm
by Jeremy Lemer

Jet fuel in his blood: Gerard Arpey, American Airlines chief executive, joined the company in the 1980s

When Gerard Arpey joined American Airlines in the 1980s as a financial analyst, his arrival coincided with an aircraft-buying spree that would turn the carrier into one of the world’s largest.
Thirty years on and Mr Arpey, now chief executive, has just penned a deal that will in one fell swoop retire many of those same aircraft and chart a course for the US airline for decades to come. On Wednesday, the 52-year-old executive ordered more than 900 jets – counting options – in a deal worth nearly $40bn, badgered a supplier into developing a more fuel-efficient aircraft and stole a march on its main rivals.
Appearing at a news conference surrounded by local dignitaries and top Boeing and Airbus executives was a rare turn in the limelight for someone peers describe as a modest family man, quiet, thoughtful, and even a little cerebral.

Since taking the top job in 2003 – his predecessor was ousted for negotiating a lucrative bonus plan even as he extracted heavy concessions from workers – Mr Arpey has worked tirelessly to save money, cut debt and repair relations with employees, though to little avail.

He sold the company’s executive art collection and replaced it with photos of American aircraft, but net debt remains above $11bn. He set up joint leadership councils with unions, but the monthly meetings are sparsely attended.

Still, the symmetry of the aircraft order is fitting for Mr Arpey, who has spent his entire career at the airline, progressing from lowly analyst through the financial planning department before becoming chief operating officer in 2002.

He has jet fuel in his blood. His father was an airline executive and, as a student, Mr Arpey loaded bags for Delta Air Lines. In his spare time he flies a small Piper aircraft, although steering an airline through fuel spikes and recessions leaves little enough of that.

American in 2011 is a far cry from the carrier it was in the 1980s. Avoiding insolvency in the early 2000s has left it trapped: unable to reduce its debts or fix its labour problems until it makes money – and unable to make money without less debt and lower labour costs.

Then, the airline was spending to grow; now it is spending to survive. Mr Arpey and its team are gambling that, by replacing the old fuel-guzzling fleet and charting a path to growth, they can cut costs and win over disgruntled workers.

“This is something they had to do. With a 300lb jockey, even Sea Biscuit couldn’t win a race,” says Gordon Bethune, who led a turnround at Continental Airlines in the 1990s. Still, Mr Bethune worries that solving entrenched labour problems will be hard.

A chorus of analysts also remain sceptical.

“We understand that American’s fleet (and brand) are tired, but this announcement represents a ton of new capital being put into a failing business model,” one analyst wrote, demanding instant dividends.

Mr Arpey is well aware of the urgency. His office window looks out on the runways at Dallas Fort Worth International Airport and he winces when he sees American aircraft stuck in holding patterns because of bad weather, and burning expensive fuel.

But his preference, and strategy, is for the long term and the big picture. He has focused traffic on “cornerpost” cities, signed joint ventures, and ordered jets that will reduce costs as they enter the fleet. But it will take time to see results.

Whether American gets that time is a moot point. In the second quarter, the company again lost money, increased its debt load and generated less revenue growth than its peers.
Copyright The Financial Times Limited 2011.

2011-07-23T10:01:00.000-07:00

US Airways Captain Escorted From Airport

By Ted Reed 07/23/11 - 08:00 AM EDT
CHARLOTTE, N.C. TheStreet) -- The battle between US Airways(LLC) and its pilots over the airline's safety culture is continuing, this time focused on an incident in which a captain declined to fly a transatlantic flight.

LCC On June 16, captain Valerie Wells, a 30-year-pilot, was scheduled to fly an Airbus A330, which can carry nearly 300 passengers, on a flight from Philadelphia to Rome. But she declined to fly because of failures of both the auxiliary power unit, a backup source of electrical power, and the "hot battery bus," a primary source of electrical power.
After the crew and passengers had returned to the gate Wells, in a particularly unusual event, was escorted out of the airport by security officials. Subsequently, a second crew of three pilots also declined to fly; the aircraft was repaired and underwent a rigorous inspection, and a third crew took off about six to seven hours late.

In seeking to publicize the incident, the U.S. Airline Pilots Association took out a full-page advertisement in Friday's edition of USA Today. The ad proclaimed that US Airways put "revenues first, safety second.

"The intimidation of flight crews is becoming commonplace at US Airways, [which] works to maximize their revenues by pushing their employees to move their airplanes regardless of the potential human cost," said the text. The ad referred readers to a website, www.USAirlinePilots.org/SafetyFirst.

In a letter to employees on Friday, Robert Isom, chief operating officer, wrote that "USAPA has embarked upon a smear campaign that in reality is all about contract negotiations, not safety.

"I can tell you unequivocally the union's claims are outlandish, false and a disservice to the 32,000 hard-working employees of US Airways," Isom wrote. "Safety has been and always will be the top priority at US Airways, as it is at any airline."

Union spokesman James Ray said that initially, Wells could not possibly fly the airplane because it lacked cockpit electrical power, but a chief pilot nonetheless encouraged her to fly. He said the incident symbolized US Airways' desire to enhance on-time performance and revenues. "This is not just an isolated incident," he said. "It has been going on on a daily basis, and is the kind of practice we've been fighting for a number of years now."

Airline spokesman John McDonald said the incident is under investigation. He said "the fact that [Wells] was escorted off the property had nothing to do with safety," but declined to elaborate. Ray speculated the airline did not want Wells to tell the replacement crew of the problems she had with the aircraft.

2011-07-21T18:35:00.002-07:00

Frequent fliers, attendants share stories of rude travelers

By Kristin Stoller, USA TODAY

"Passengers are cramped, tired and petty," says Goltsch, an electrical engineer in West Caldwell, N.J. "It has gotten to the point now that the people who travel for business just don't enjoy it anymore."

Increasingly, business travelers and airline attendants complain about the lack of respect passengers have for fellow travelers. Among them: Passengers who talk too loudly on cell phones, bring smelly food on board or recline their seats too much in a cramped cabin.

In close quarters, it's almost impossible for savvy, frequent business travelers or infrequent leisure passengers to keep their cool and not become annoyed.

Goltsch, who is 6-foot-4, recalls one Continental Airlines flight from Newark to Puerto Rico.

Having bought a last-minute ticket, he was stuck in a middle seat, and his long legs were pressed against the back of the seat in front of him.

"The passenger in front of me kept trying to push his seat back, but there was nowhere for it to go," Goltsch says. "He got out of his seat, came back to our row and asked me to stop blocking his seat movement."

Goltsch says he explained that he was wedged into his seat with no spare room and wasn't purposely trying to cause discomfort. The passenger suggested Goltsch move his legs to the side. But a passenger sitting next to him protested that he'd be uncomfortable if Goltsch did that.

The passenger who wanted to recline his seat then called a flight attendant and asked her to make Goltsch move his legs. "One look at me wedged into the seat, and she knew there was little we could do," Goltsch says. "She tried to explain that I simply had nowhere to put my legs. He asked for another flight attendant or the pilot to come back, because this was unacceptable to him."

Eventually, Goltsch was moved to another seat: a window seat in first class. That worked out, but not all problems do.

"My expectations for travel have gotten so low that the highest praise I can bestow upon a trip is that it was 'uneventful,'" Goltsch says.

Self-centered fliers

According to flight attendant Kelly Skyles, the No. 1 thing passengers should understand is that they are not the only people on an airplane.

"Passengers come on board, and it's all about them," says Skyles, who is a national safety and security coordinator for the Association of Professional Flight Attendants union. "I realize in our society it has come to be like that, but space is very limited, it's confined and it's shared."

Many passengers, Skyles says, overestimate a flight attendant's power.

"We have limited abilities to fix things immediately," Skyles says. "If your reading light isn't working, it is very unfortunate, but we do not have the ability to fix the reading light. We will definitely write it up, but it's not our fault that we can't fix it immediately."

Skyles advises passengers to treat everyone with respect. They'll get it in return, she says.

Though many business travelers say rookie, infrequent travelers are most likely to annoy them during a flight, others say it's veteran travelers with entitlement issues.

Thom Coughlin of Cincinnati says the rookies are usually the quiet, meek or mild passengers on a flight.

"Business travelers are the most annoying," says Coughlin, a sales manager in the industrial supplies industry. "They feel they have earned the right to be first in line, first for attention, first for overhead space and first to complain."

Elizabeth Toedt, who lives in Olympia, Wash., and works in the aviation industry, says it's amateurs who create the most disturbances, especially when going through security.

"After 10 years of dealing with the Transportation Security Administration screenings, I have to shake my head at the numbskulls who don't have ID ready, still carry liquids, don't know they must remove their shoes, jackets and computers, and treat security like a school lunchroom social hour."

Skyles advises respect for another reason: In addition to being transportation, a plane is also someone's work environment.

"It really makes every flight attendant happy when people walk off the plane and say, 'Oh, man, this was a really pleasant flight,'" Skyles says.

Top 10 pet peeves of frequent business travelers

USA TODAY's Road Warriors, frequent travelers who fly many miles each year, have their gripes. Ten of them:

•Loud cellphone conversations.

•People who disobey the rules and try to carry on too many bags or carry too much liquid through security.

•People who play music so loudly, even with earplugs or headphones, that others can hear it.

•Disrespect that passengers show to flight attendants and gate personnel.

•Parents who don't try to control their children.

•People who think the "turn-off-all-electronics" message is not for them.

•Passengers who carry on and eat messy or smelly food.

•People who board with multiple or oversize bags and fill the bins in the front of the cabin when they're seated in the rear.

•Reclining a seat in a tight coach cabin.

•Leaving a window shade open when everyone else has closed theirs and is trying to sleep.

Flight attendants’ Top 10 pet peeves

Travelers can irk flight crews, too. Here — from members of the Association of Professional Flight Attendants union, which represents nearly 18,000 American Airlines flight attendants — are 10 ways:

•Walking around the aircraft without shoes, especially in the lavatory.

•Changing a diaper in the seat or on the tray table.

•Clipping fingernails and toenails on the aircraft.

•Keeping headphones on when you start talking to attendants.

•Speaking in a condescending and angry tone when it's not appropriate.

•Hanging arms or legs out in the aisle when the food and beverage cart is coming.

•Standing in the galley and restroom areas to stretch and do exercises.

•Keeping electronic devices on after the announcement has been made to turn them off.

•Bringing stinky food on the plane.

•Carrying on a bag you can't lift into the overhead bin.

2011-07-10T17:50:00.000-07:00

Jet Makers Crank Up Sales Pitches

By DANIEL MICHAELS, SUSAN CAREY and PETER SANDERS

A potential American Airlines order for more than 250 jetliners holds even higher stakes for the carrier, Airbus and Boeing Co. than the deal's giant size suggests.
Europe's Airbus is pushing hard for American Airlines to buy the A320neo.

Airbus wants to break Boeing's monopoly at American and has assembled a team of lenders and leasing firms to help the European company dangle almost $6 billion in preferential financing, people familiar with the proposal said.
Airbus's offer has a catalog value of almost $23 billion, but that is being heavily discounted, the people said. The unit of European Aeronautics Defence & Space Co., is offering American 130 of the current-generation A320s and 130 of the more fuel-efficient A320neo, the new engine option slated to enter service in 2015.

Boeing wants to keep Airbus out of American hangars but is treading a razor's edge in its offer that won't hurt its bargaining position at other airlines, a person familiar with the talks said. Jim Albaugh, chief executive of Boeing's commercial airplane unit, is expected to meet with American officials on Monday. Boeing is offering 737-800s and 737-900 Extended Range planes, people familiar with the matter said, but the price and financing terms were unclear.

Boeing, meanwhile, also is racing to develop a product strategy for its best-selling 737 model to compete with redesigns of the A320. Boeing faces intense pressure from American and other airlines to decide whether it will update or replace the single-aisle 737, a workhorse of American's short-distance fleet. The carrier already has more than 50 of the 737 on order.

"Right now, Boeing is in a tough situation," said Adam Pilarski, senior vice president at aviation consulting firm Avitas. "They need to try to convince the airline to give them a few more months to announce their intentions for the 737."

The board of American's parent, AMR Corp., might decide the duel as soon as next Wednesday, the people familiar with the matter said.

American must balance its need to replace hundreds of aging planes quickly and inexpensively against the risk of damaging close ties to Boeing, the carrier's sole jet supplier for 15 years. American has "most favored nation" status with Boeing under an exclusivity deal from 1996 that gives American preferential terms in buying planes from the Chicago aerospace company. If American buys Airbus planes, the carrier could lose that status at Boeing.

Adding Airbus A320s, and later A320neos, to American's all-Boeing fleet also would increase the complexity of training and scheduling pilots, handling maintenance tasks and stocking spare parts. But that could be offset by significantly reduced fuel consumption, eventual fleet simplification as American retires older models, and enhanced bargaining power by having two aircraft suppliers vying for orders.

Airbus is willing to offer American sweeter financing than the European company usually offers partly because of a thorny transition at its factories. As Airbus makes the switch to the A320neo, it wants to limit discounting of the final models of the A320, people familiar with the company's thinking said.

Updating jetliner models is dicier than rolling out a new car model or a fancier cellphone because planes are used for decades. Order negotiations for an airliner normally include calculations of its resale value, since aircraft often change hands during their life or are used as collateral for borrowing. But the final units of any model have lower resale value than usual because they will have to compete in the second-hand market with their successors.

Just as retailers mark down discontinued merchandise when a new product line arrives, Airbus is offering American a sweetheart deal to take the A320s, people familiar with the bid said. The package also includes excellent terms on the A320neo, the people said.

That situation presents a dilemma for Boeing because American isn't the only big carrier shopping for single-aisle planes. If American doesn't buy the end-of-line A320s, Airbus could offer them to United Continental Holdings Inc. or Delta Air Lines Inc., both of which already fly A320s and are big Boeing customers. Boeing therefore runs the risk that it could give American—the third-biggest U.S. airline by traffic, behind United Continental and Delta—billions of dollars in financing and discounts and then face the same competitive situation at other large customers.

Losing American's business, or even splitting an order with Airbus, "is not the end of the world for Boeing," said Mr. Pilarski, the Avitas consultant. As financially the weakest of the big U.S. carriers looking to replace their single-aisle fleets in the coming years, American is the least attractive customer, he said. Beyond that, the flip side of losing to Airbus could free Boeing from its exclusivity deal with American, allowing the aircraft maker to charge higher prices and set better terms on American purchases.

Gordon Bethune, a former Boeing executive and retired chief executive of Continental Airlines, said splitting the order "doesn't make sense" because it wouldn't help simplify American's fleet. But he sees American "switching sides for the right deal," said Mr. Bethune, who has no direct knowledge of AMR's bargaining and who once steered Continental into a similar exclusive arrangement with Boeing,

American, based in Fort Worth, Texas, wants to resolve the aircraft order this summer, people familiar with the matter said, and is negotiating intensely with both manufacturers, hoping to get an expedited delivery plan that would allow it to update its single-aisle fleet in about five years. Its directors are expected to meet later this month. It was unclear whether the directors would merely be updated on the aircraft talks or receive an order to approve.

In 1996 American, said it would buy passenger jets exclusively from Boeing until 2018 and began the relationship with an order for 103 jets, a mix of small, narrow-body 737s and 757s and large 767 and 777 long-range wide-body jets. The carrier also secured purchase rights for more than 500 additional jets with as little as 15 months' notice for the narrow-body deliveries and 18 months for the larger planes, a huge concession, as delivery dates typically are assigned to customers years after the order is placed.

2011-07-09T13:47:00.002-07:00

Can American Airlines Afford $15 Billion Worth of New Planes?

By Shubh Datta
July 8, 2011

Top aircraft carriers in the US are looking to overhaul their fleets. In the face of high gas prices, these carriers are planning to replace their old fuel-guzzling planes with newer more fuel-efficient aircraft.

Not to be left behind, American Airlines parent AMR (NYSE: AMR ) is planning to shell out close to $15 billion to reinvigorate its fleet with narrow-bodied craft.

Re-fleeting the hangars

The nation’s four largest carriers are all looking to add more aircraft to their hangars. Media reports quoting sources said American is planning to buy close to 250 narrow-bodied planes, splitting the $15 billion that it plans to spend between aircraft makers Boeing (NYSE: BA ) and Airbus.

Even the world’s largest aircraft carrier Delta (NYSE: DAL ) is planning to add close to 200 new aircraft by the end of the year. To complete the list, Southwest (NYSE: LUV ) and United Continental Holdings (NYSE: UAL ) are also mulling over adding new planes to their fleet.

The airline industry in the US is currently coming out of a long year in which it has had to face the pressures of high gas prices, capacity cuts, and consolidation in the industry. These factors led to a drop in American's revenues and bottom line and weighed on its financial position.

A look at the numbers

Unfortunately, AMR’s numbers don’t make for pretty reading. Though LTM revenues have increased by 12% to $22.63 billion, costs have shown a simultaneous jump, rising 7% to $17.44 billion. No wonder then that American reported losses of $402 million in the last twelve months.

From a balance sheet perspective, American’s free cash flow stands at a negative $622.3 million. American’s current ratio stands at 0.9 times, which means that it is not in a comfortable position to pay off its short term liabilities. Its interest coverage ratio stands at 1.9 times, hence the company is reasonably placed to pay off its obligations but is not in a comfortable position to assume further debt. The burden clearly can be understood, when we see that American’s total debt has risen to $12.1 billion in the last twelve months.

A string of losses have taken their toll on the balance sheet and the company needs help to finance this huge, $15 billion endeavor. Hence, the deal would require substantial financing from the manufacturers or leasing companies. Just where will the money come from? Given the industry’s volatile nature, I’m not going to be the first one to jump in line to finance this massive project.

Bidding war!

The major question here is whether or not American Airlines will choose Boeing or Airbus aircraft? According to reports, American first approached Airbus without informing Boeing (who currently supplies planes to American) and was happy with the offer it had made. Later, it approached Boeing, possibly throwing down the gauntlet by asking it to better Airbus’ offer.

Airbus has struggled to penetrate the US markets, with US Airways Group (NYSE: LCC ) currently being its biggest customer. Winning the deal would be a huge boost for Airbus. This would be an important step forward as the global passenger airplane market is expected to be worth $4 trillion in the next 20 years.

The future

Despite the deals’ massive price tag, it’s a necessary one. The purchase should eventually translate into lower costs. It should mean lower maintenance costs and considerably lower fuel costs. Plus, planes just need to be replaced.

The Foolish bottom line

If American Airlines can work out the finances and the deal goes through, it will help position the company for the next decade of transcontinental business. As an investment, however, this is not the type of news that gets me excited. Show me a few quarters of strong financial performance and then maybe we can talk.

2011-06-28T23:01:00.002-07:00

Is It Really Safe to Use a Cellphone on a Plane?

ABC NEWS

By BRIAN ROSS (@brianross) and AVNI PATEL

June 9, 2011

Like most airline passengers, you probably have serious doubts about those pre-flight announcements asking you to turn off your cellphones, blackberries, iPods and anything else electronic.

The announcements are flat-out ignored by many frequent fliers, who are skeptical that so-called "personal electronic devices" pose any safety threat to airplane. Some passengers openly rebel, like New York Sen. Chuck Schumer, who cursed out one flight attendant who demanded he turn off his cellphone.

But a confidential industry study obtained by ABC News indicates there really could be serious safety issues related to cellphones and other PEDs.

A report by the International Air Transport Association, a trade group representing more 230 passenger and cargo airlines worldwide, documents 75 separate incidents of possible electronic interference that airline pilots and other crew members believed were linked to mobile phones and other electronic devices. The report covers the years 2003 to 2009 and is based on survey responses from 125 airlines that account for a quarter of the world's air traffic.

A confidential airline industry report obtained by ABC News documents 75 separate incidents that aircraft pilots and engineers think are linked to cellphones or other electronic devices. Danger of Cell Phones During Takeoff and Landing Watch Video

Twenty-six of the incidents in the report affected the flight controls, including the autopilot, autothrust and landing gear. Seventeen affected navigation systems, while 15 affected communication systems. Thirteen of the incidents produced electronic warnings, including "engine indications." The type of personal device most often suspected in the incidents were cell phones, linked to four out of ten.

The report, which stresses that it is not verifying that the incidents were caused by PEDs, includes a sampling of the narratives provided by pilots and crewmembers who believed they were experiencing electronic interference.

"Auto pilot was engaged," reads one. "At about 4500 ft, the autopilot disengaged by itself and the associated warnings/indications came on. [Flight attendants] were immediately advised to look out for PAX [passengers] operating electronic devices. ... [Attendants] reported that there were 4 PAX operated electronic devices (1 handphone and 3 iPods)." The crew used the public address system to advise the passengers to shut off electronic devices "for their safety and the safety of the flight," after which the aircraft proceeded "without any further incident."

In other events described in the report, a clock spun backwards and a GPS in cabin read incorrectly while two laptops were being used nearby. During another flight, the altitude control readings changed rapidly until a crew member asked passengers to turn off their electronic devices. The readings returned to normal. "After an hour, changes were noticed again . . . Purser made a second announcement and the phenomena stopped."

Dave Carson of Boeing, the co-chair of a federal advisory committee that investigated the problem of electronic interference from portable devices, says that PEDs radiate signals that can hit and disrupt highly sensitive electronic sensors hidden in the plane's passenger area, including those for an instrument landing system used in bad weather.

"It could be you that you were to the right of the runway when in fact, you were to the left of the runway," said Carson, "or just completely wipe out the signal so that you didn't get any indication of where you are coming in."

Asked if a cellphone's signal could really be that powerful, Carson said, "It is when it goes in the right place at the right time."

To prove his point, Carson took ABC News inside Boeing's electronic test chamber in Seattle, where engineers demonstrated the hidden signals from several electronic devices that were well over what Boeing considers the acceptable limit for aircraft equipment. A Blackberry and an iPhone were both over the limit, but the worst offender was an iPad. There are still doubters, including ABC News's own aviation expert, John Nance.

"There is a lot of anecdotal evidence out there, but it's not evidence at all," said Nance, a former Air Force and commercial pilot. "It's pilots, like myself, who thought they saw something but they couldn't pin it to anything in particular. And those stories are not rampant enough, considering 32,000 flights a day over the U.S., to be convincing."

Nance thinks there are alternate explanations for the events. "If an airplane is properly hardened, in terms of the sheathing of the electronics, there's no way interference can occur."

But Boeing engineers told us that signals from PEDs could disrupt the navigation and communication frequencies on older planes, which are not as well shielded as the newer models. And anything that distracts the pilots in the cockpit is considered a true threat to safety.

2011-06-19T12:16:00.000-07:00

New, elongated Boeing 747-8 debuts in Paris

In standard layout, it will have 467 seats, 51 more than its predecessor

The new Boeing 747-8 was done up in red and orange livery to symbolize the importance of the fast-growing Asian aircraft market. By Kyle Peterson

E BOURGET, France — Boeing Co's 747-8 Intercontinental, the new elongated passenger version of its legendary jumbo jet, made its international debut on Sunday, showing its distinctive silhouette abroad for the first time.
The high-profile landing of Boeing's new 747 at the Paris Air Show — three months after its first flight — marks a show of engineering strength by the world's second-largest plane maker in a competition for control of the wide-body market.

"We've seen a great deal of interest in the last six to eight months as the market has gotten better," Randy Tinseth, Boeing's vice president of marketing at Boeing's commercial division, told Reuters.
In Boeing's standard layout, the new 747-8 will have 467 seats, 51 more than its predecessor, but fewer than the 525 of its main competitor, the A380 made by EADS unit Airbus. The actual seat number, however, will be determined by the airlines.
Boeing has taken 33 orders for the 747-8 Intercontinental, which will be joined in Paris on Monday by the better-selling freighter version of the plane, which has received 76 orders.

The new 747-8 — in red and orange livery to symbolize the importance of the fast-growing Asian aircraft market — flew to Paris without passengers but was stuffed with computers, test equipment and barrels of water to simulate passenger weight and to test balance.

The Paris Air Show is the venue of choice for aerospace and defense companies to strut their stuff, to the delight of aviation enthusiasts around the world.

The new 747-8 is more than 18 feet longer than its predecessor, with the added length mainly noticeable by the extended hump. The upper deck in the hump traditionally houses the business class section.
Plane spotters looking for other differences with the 747 will notice the jagged, clam-shell look of the 747-8's engine casing, which reduces noise. The 747-8 also lacks the upwards-curving winglets at the wingtip, but has raked wings that sweep slightly upwards. Boeing says the raked wings reduce wind resistance and enhance fuel efficiency.

The plane also features bigger windows and some design elements of the new 787 Dreamliner, such as interior lighting that changes colors to help passengers adjust more easily to time changes as the plane crosses time zones.

The first 747 made its maiden flight 42 years ago. Since then, the jumbo jet, with its distinctive hump, has become the world's most recognizable plane.

The 747 was the world's largest airplane until 2005, when Airbus unveiled its A380. The 747-8 Intercontinental, however, is more than 10 percent lighter per seat than the Airbus A380 and consumes 11 percent less fuel, Boeing says.

The Intercontinental lists at $317.5 million. Germany's Lufthansa has ordered 20 of the planes, and is set to be the first airline to bring the new jumbo into service early next year. Boeing says a VIP customer will take first delivery of an Intercontinental in the fourth quarter of this year.
Production of the 747-8 has been delayed, as has the mid-sized 787 Dreamliner, a carbon-composite plane, which represents a bigger leap in technology than the revamped 747-8.

Although the 747-8 and A380 will compete directly for years to come, analysts say airlines are mostly interested in lighter, wide-bodied planes in the 200- to 350-seat range, like the 787 and the future Airbus A350, which are designed to bypass crowded hubs and take passengers closer to their final destination.

Copyright 2011 Thomson Reuters.

2011-06-19T12:07:00.000-07:00

Man suspected of using fake identity to land flight attendant jobBy the CNN Wire Staff

June 19, 2011 9:26 a.m. EDT

Jophan Porter, 38, is suspected of using a fake ID to get a job with American Eagle Airlines.

"We don't really know who he is," assistant state attorney says

Federal official downplays the severity of the alleged breach

Employee is currently being held on a $1 million bond

Immigration and Customs Enforcement says it will deport him

Miami (CNN) -- Federal and local authorities are investigating an apparent airline security breach after an American Eagle Airlines employee allegedly used another man's identity to get a job as a flight attendant.

Jophan Porter, 38, has been charged with six counts of identity theft and three counts of forgery, among a lengthy list of other charges, according to the Miami-Dade corrections website.
American Eagle says the incident did not involve a customer and that they are involved in an investigation that includes the FBI, according to a statement from the airline.

When arrested at Miami International Airport on Friday, Porter -- a native of Guyana -- was carrying multiple forms of phony identity, including driver's licenses, a passport and a Department of Transportation identification card, CNN affiliate WSVN reported, citing the arrest report.

The presiding judge raised bail to $1 million after prosecutors described Porter as a flight risk, noting that authorities "don't know who he's connected to."

"We don't really know who he is," the assistant state attorney said. "When you are refusing to identify yourself to the FBI and you're working in an airline, that's a concern."

A spokesman for U.S. Immigration and Customs Enforcement said the agency plans to deport Porter, though he would not comment on Porter's residency status or where he will be sent.
"ICE lodged a detainer against him," said Ivan Ortiz-Delgado. "We will begin removal procedures once his criminal proceedings are complete."

Police: Fake ID used to get airline job Having an airline identification card or being an airline employee does not allow a person to circumvent security, according to the Transportation Security Administration.

Flight attendants' names are checked against the terror watch list, but it is the responsibility of airlines to verify potential employees' identities, including their legal status, the TSA said.

Meanwhile, airport traveler Camilla Diaz said she didn't understand how the apparent breach occurred.

"A big company like that -- they have to check that before," she told WSVN.
Others appeared stunned. "Wow that's incredible," Alejandro Hernandez told the network.

Porter is currently being held in Miami-Dade County jail and is represented by a public defender, who could not be immediately reached for comment.

CNN's Ross Levitt and Cristy Lenz contributed to this report.

2011-06-10T19:09:00.004-07:00

Down computer systems causing delays for US Airways

Phoenix Business Journal - by Mike Sunnucks, Phoenix Business Journal

Date: Friday, June 10, 2011, 6:13pm MST - Last Modified: Friday, June 10, 2011, 6:16pm MST

US Airways officials reported Friday evening that some of the airline's computer and online systems were down and that was causing some flight delays. The Tempe-based airline (NYSE: LCC) said in a statement the system outage occurred in its hometown market and efforts were underway to restore the down systems.

"Early reports indicate that the systems outage is the result of a power outage near one of the airline's data centers in Phoenix. Some airport computer systems are coming back online now and we are working to restore operational order," the airline said in a statement.
A US Airways official said the Phoenix outage was impacting the airline's systems nationwide and was causing some flight delays. The official confirmed some systems were coming back up but did not have a timetable for when US Airways' operations would return to normal.
US Airways officials reported Friday evening that some of the airline's computer and online systems were down and that was causing some flight delays. The Tempe-based airline (NYSE: LCC) said in a statement the system outage occurred in its hometown market and efforts were underway to restore the down systems.

"Early reports indicate that the systems outage is the result of a power outage near one of the airline's data centers in Phoenix. Some airport computer systems are coming back online now and we are working to restore operational order," the airline said in a statement.

A US Airways official said the Phoenix outage was impacting the airline's systems nationwide and was causing some flight delays. The official confirmed some systems were coming back up but did not have a timetable for when US Airways' operations would return to normal.

2011-06-09T22:12:00.005-07:00

Flight attendants: Bartenders or bad cops?

Hard-working airline crews juggling conflicting responsibilities

Given the agitation among both paying customers and the uniformed personnel, should the airlines formally and forcefully reaffirm the authority of flight attendants?
By Bill Briggs

msnbc.com

In an era of “current threat levels,” and within a tense flying environment that gives new meaning to “cabin pressure," is it smart to ask airline crews to juggle such outwardly conflicting responsibilities?

Flight attendants have recently demanded and won heftier federal fines for unruly customers, and have been officially designated “first responders” — someone certified to provide pre-hospital care in a medical emergency — by the Department of Homeland Security.
Yet they are earning less and sleeping less, harder-worked and higher-stressed — all while tending to a seemingly rising number of passengers who board toting an edgy “sense of entitlement,” according to associations representing both U.S. airlines and flight attendants.

While the trade groups carefully veer around the central question — does fluffing pillows and dishing pretzels erode a cabin crews’ vital onboard authority — one former flight attendant believes that’s precisely the psychology taking root in the minds of some fliers.

“Yes, in a way, the service that people see day in and day out does make people forget and it does undermine the ... responsibility that the crew members have for the safety and well being of the passengers,” said Carolyn Paddock, a Delta Air Lines flight attendant for 17 years.

At times, it is difficult to balance being helpful and a good host, and then having to police people,” added Paddock, who left Delta about three years ago, launching InFlightInsider.com, a website offering tips on traveling smart and stylishly.

But as flight attendants shove massive snack carts through the aisles, they offer passengers just a tiny glimpse of jobs that have gained deep complexity since Sept. 11 — jobs that pay an average of $35,000 a year, according to Corey Caldwell, spokeswoman for Association of Flight Attendants-CWA, a labor union representing more than 50,000 flight attendants at 22 airlines. "However," Caldwell noted, "most newly hired flight attendants and those who have only been at their carrier for just a few short years often make less than $20,000 a year."

What [travelers] never see, and what they’re not supposed to see,” Paddock said, “are the inner workings of what it takes to make a flight safe, secure, and work well.”

So what happens behind the curtain? “In the interest of your safety, I cannot reveal what goes on,” Paddock said. “But trust me when I tell you that there is more that meets the eye ... What I can say is the crew is making assessments. Who are the passengers most likely to help in an emergency? Who is acting or looks suspicious? Who looks unwell? Are they unwell enough to fly? Who is sitting next to that little unaccompanied minor and is she OK sitting next to that passenger? ... At times, being underestimated works to the crew's advantage.”

That “underestimation” — or, put bluntly, lack of respect — also reflects what flight crews see on the clock and off, at their hotels, at the mall, on the freeway, or in their neighborhood grocery store: a self-involved, me-first mentality, said David Castelveter, vice president of communications at the Air Transport Association of America. (The ATA is the nation’s oldest and largest airline trade group.)

“More than ever before, there’s a sense of entitlement in society and that’s what creates the challenges for these flight crew members,” Castelveter said. “At the end of day, we’re in the customer service business and the old adage ‘the customer is always right’ is still the norm. But we have to find that balance between the customer being right and [a flier who] does something that creates a potential hazard or inconvenience for another passenger.”

Msnbc.com contacted three domestic airlines to discuss the state of flight attendant authority. Southwest spokesperson Paul Flanigan said he would not discuss whether the Slater incident indicated that U.S. airlines, in general, needed to re-examine or address the command or clout held by flight attendants inside the cabin. "We, to date, have declined all media inquiries regarding the JetBlue incident," he said, and referred questions to ATA. United and JetBlue, meanwhile, did not respond to interview requests on the topic.

“It’s absolutely a rising factor,” said Beth Blair, a Southwest Airlines flight attendant until 2004 and now a travel writer whose job has put her in the sky as often as three times a month. “There are the people who are always looking for anything free. For example, passengers assume they deserve a complimentary upgrade just because a seat is available or they should be granted a free drink because their flight was slightly delayed.”
When such accommodations are not met, some passengers “simply stew in their seats while others react with an outburst which may or may not make the news,” Blair added.
The worst offenders? “Frequent fliers,” Blair said. They are “most likely to break safety rules such as cell phone use or not paying attention to safety briefings.”

Amid these ill-mannered trends — and following Slater’s famous meltdown last week (which may or may not have been sparked by bad passenger behavior) — has the time come for airlines to take pre-emptive action? Must they formally remind passengers of who is in charge in the cabin, and that it’s a federal crime, now punishable by a $25,000 fine, to disobey or interfere with flight attendants?
The question comes with two critical caveats. First, due to post-9/11 union concessions that helped keep airlines in business, flight attendants are paid about 30 percent less than they were before the attacks and they are working about 40 percent more. Fatigue and stress among flight crews are both high, industry experts acknowledge. Couple that with the anxieties many passengers are carrying: strenuous security checks, fewer flight options, jam-packed planes and general worries about terrorism.

“I’m not sure I would say [they must take] official steps,” said Caldwell of the Association of Flight Attendants-CWA. “On a whole, the traveling public understands the role of flight attendants. [But] it certainly doesn’t hurt to remind them again — that flight attendants are certified safety professionals who are required to enforce federal aviation regulations.”

Primary responsibility is to ensure the safety of the traveling public," ATA's Castelveter said. "If any passenger is interfering with the duties of the flight crew member, it's a federal crime."
Caldwell concedes, however, that she can envision a day when the service slice of the flight crews’ job is substantially reduced and attendants ride purely to keep the peace and enforce the safety rules.

“That’s definitely a possibility,” Caldwell said. “If you look at the current business model that airline management has sort of set up, yeah that could be a possibility.”
Although, she added, flight attendants always will remain the face of the airlines and, as such, “there will always be just that little customer service angle. It’s the flight attendants who are in the steel tube at 40,000 feet with the passengers.”

Perhaps some airlines ultimately will find the need to designate certain flight crew members as “hospitality” attendants and others as “safety monitors” — both squads with clearly separate duties, perhaps even wearing different attire. That’s unlikely to occur until the economy rebounds, said flight-attendant-turned-writer Blair.

“I think an onboard safety team is a great idea because it does give the crew members a specific role,” Blair said. “I’m not sure, though, if the airlines will see it as practical or financially feasible.”

Still, fliers already recognize that the “service” elements offered by flight crews are dwindling as pillows and blankets become scarce, and as beverages and snacks are cut or switched to pay-only, pre-boxed meals.

Other flight attendants, pilots and I used to joke that one day vending machines would replace the galley,” Blair said. “It seems like we may be heading in that direction.”

© 2011 msnbc.com

2011-06-09T22:01:00.001-07:00

Hang up and fly right: More evidence of in-flight interference

By Rob Lovitt, msnbc.com contributor

Maybe you really should turn off your cell phone when the flight attendant tells you to. No, really.

According to a confidential report obtained by ABC News, interference from cell phones and other personal electronic devices (PEDs) may, in fact, present serious safety concerns for aircraft.

The report from the International Air Transport Association (IATA), the global industry trade group, surveyed commercial pilots and crewmembers and cited 75 incidents in which the respondents believed PEDs may have created electronic interference that impacted flight systems.

Twenty-six incidents affected flight controls, while 17 affected navigation systems and 15 affected communication systems. Thirteen, says ABC, produced “engine indications” and other warnings. According to respondents, activated electronic devices caused GPS and altitude-control readings to read incorrectly and change rapidly.

“It could be that you were to the right of the runway when in fact, you were to the left of the runway,” Dave Carson of Boeing told ABC.

Although the report doesn’t confirm that the incidents were caused by PEDs, it does note that in several instances, instrument readings returned to normal after crewmembers made passengers turn off their devices.

"We can't say categorically that these devices cause interference," IATA spokesman Chris Goater told msnbc.com, "but there are enough anecdotal reports from pilots to raise the question."

Finding that direct link may only get more difficult, especially as the number and variety of PEDs increase and airplanes rely more heavily on “fly-by-wire,” or electric systems that may be more susceptible to interference than the mechanical systems found in older planes.

“The upshot is that those PEDs emit energy that could interfere with the signals from the control column to the control surfaces,” said aviation safety consultant Steve Cowell of SRC Aviation LLC. “There’s quite a bit of shielding, but it’s also possible that it may not be enough.”

2011-06-09T12:23:00.001-07:00

Saving Boeing's Bacon

By Rich Smith
June 9, 2011

Newsflash: Air India may just have saved Boeing's (NYSE: BA ) bacon.

As you know, Boeing's just about ready to deliver its first 787 Dreamliner to inaugural airline customer All-Nippon Airways. On the surface, that's good news, but two days ago, I described how it could turn into bad news for Boeing. As the company begins deliveries of the long overdue aircraft, the official amount of delay could become "fixed in time," permitting lawyers to draft their complaints and begin demanding penalty payments from Boeing.

Already, 787 suppliers like Spirit AeroSystems (NYSE: SPR ) have begun demanding penalties from Boeing. Now its customers are hitting up the company for payouts, too. One customer in particular, Air India, has publicly charged that Boeing's tardiness cost it $1.32 billion in lost revenues. If AI decides to seek redress from Boeing, it could imperil the 787's ability to earn a profit.

Or not

That's why this morning's news is so very good for Boeing. Citing a cash-crunch and consequent inability to pay for new planes, Air India is reportedly planning to ask Boeing to delay delivery of its 787s even more. The decision isn't official yet, but if this is the way it goes, it would echo a similar postponement by Delta (NYSE: DAL ) announced last year. And it would be great news for Boeing, for two reasons:

First, by stepping out of the receiving line for 787s -- however briefly -- Air India will allow other customers to move ahead. Thus customers such as AMR (NYSE: AMR ) and United Continental (NYSE: UAL ) could receive their 787s earlier than expected. This will make for both happier customers and lower penalty payments for Boeing.

And speaking of penalties, Air India alone is said to be seeking $840 million worth of 'em for its $1.32 billion revenue loss. This amounts to 10.4% of the value of AI's $8.1 billion 787 order. It's a number big enough to wipe out Boeing's 9.4% operating profit margin on commercial aircraft, and transform the 787 from "most successful airplane ever" into "Boeing's biggest loser."

Foolish takeaway

Worst case, by initiating a delay of its own, Air India should permit Boeing to offset some of the penalties it owes for late delivery to one customer, and reduce the risk of paying penalties to customers like AMR and United. Best case, Air India could undermine its case for demanding penalties at all -- and give Boeing a fighting chance at earning a profit on the 787.

Will Air India follow through, and delay delivery? Add Boeing to your Fool Watchlist and stay informed.

2011-06-09T12:10:00.000-07:00

AMR Is Said to Be in Talks With JetBlue Airways to Widen Booking Agreement

By Mary Schlangenstein - Jun 9, 2011 10:59 AM MT

American Airlines and JetBlue Airways Corp. (JBLU) are in talks to add more cities outside the U.S. to their joint booking and frequent-flier agreement, two people familiar with the discussions said.

An expanded accord would help AMR Corp. (AMR)’s American fill more seats on international flights from New York and Boston, and let JetBlue win domestic passengers by offering destinations it can’t reach with its own planes, said the people, who declined to be identified because the discussions are private.

New York is home to JetBlue’s headquarters and biggest base and American’s chief East Coast hub for trans-Atlantic flights. American is fighting for market share there after being eclipsed by the merger of United and Continental airlines and Delta Air Lines Inc. (DAL)’s purchase of Northwest Airlines.
“If they want to be a bigger player, they are going to need more presence and more feed,” said James M. Higgins, an analyst with New York-based Ticonderoga Securities LLC. “JetBlue is a way to get that.”

There is no timeline for Fort Worth, Texas-based American and JetBlue to decide on broadening their 15-month-old interline agreement, the people said.
The existing accord lets each airline sell tickets on specific partner flights and check bags on a full itinerary, with the revenue going to the flight’s operator. JetBlue travelers can book on American to 15 foreign cities from New York and Boston, while fliers to the two destinations on American jets from abroad can reach 26 U.S. cities via JetBlue.
JetBlue’s Interest

While those JetBlue airports aren’t in competition with markets served by American, JetBlue would like to expand the relationship to cities where the carriers do compete, one of the people said. JetBlue’s main U.S. airport is New York’s Kennedy, where American serves destinations such as London and Paris.

Spokesmen for American and JetBlue declined to comment on the talks.

“American and JetBlue continue to explore opportunities to expand commercial cooperation where it makes sense for both airlines,” American’s Sean Collins said. Alison Croyle, a JetBlue spokeswoman, said the airline would like to add more cities outside the U.S. to the agreement.

Deeper ties between the carriers may lead to an eventual merger, possibly in about two years, said Ticonderoga’s Higgins, who recommends buying JetBlue and holding AMR.

‘Further Cooperation’

“It definitely furthers cooperation between them,” Higgins said of the current discussions. “If the benefits to AMR of the JetBlue tie-up are as good as I think they’ll be, I also believe it increases the odds there may be a merger down the road.”

The challenge for American is to first resolve contract talks with its three largest unions, Higgins said. The current labor negotiations date back as far as September 2006, when bargaining began with pilots.

American and JetBlue unveiled their accord two months before United and Continental agreed to the tie-up creating United Continental Holdings Inc. The new United Airlines is the world’s biggest carrier by traffic, ahead of Delta, which overtook American with the 2008 Northwest acquisition.

After sitting out consolidation that included those deals and Southwest Airlines Co. (LUV)’s May 2 purchase of AirTran Holdings Inc. (AAI), AMR is the only large U.S. airline company likely to post a 2011 loss, based on analysts’ estimates compiled by Bloomberg.

Declining Shares

AMR tumbled 27 percent this year in New York Stock Exchange composite trading through yesterday, and JetBlue fell 17 percent on the Nasdaq Stock Market, joining declines for most of the U.S. industry.
While interline accords are common among U.S. carriers, the American and JetBlue linkage is unusual because it connects a carrier that collects travelers at hub airports to one focused on point-to-point flights. Interline agreements are used in cases such as an airline scrubbing flights and being unable to rebook passengers on one of its own planes.

Will Randow, a Citigroup Inc. analyst, expects that the carriers’ current accord may evolve into a so-called code-share arrangement, in which airlines agree to share some revenue for joint bookings, and stop far short of a combination.
Moving JetBlue employees to American’s higher union wage rates would be too costly and blending different aircraft fleets would be difficult, said Randow, who has hold ratings on JetBlue and AMR. JetBlue’s planes are from Airbus SAS and Embraer SA, while American’s main jet fleet is from Boeing Co. (BA)

‘Strong Presence’

“JetBlue’s strong presence at JFK can bolster American’s position and extend their network, which is a good thing,” Randow said. “American’s strategic vision is to solidify that relationship as much as possible.”

JetBlue has 10 interline agreements, two with U.S.-based carriers. It has two code-share arrangements, including one with its largest shareholder, Germany’s Deutsche Lufthansa AG. The code shares allow the international partners to put their designation on certain JetBlue flights.
American also agreed as part of the original accord to give eight pairs of takeoff and landing rights at Washington’s Ronald Reagan National to JetBlue in exchange for 12 pairs at Kennedy. The trade allowed JetBlue to initiate service at Reagan.

JetBlue has focused over the past two years on building its network in Boston and the Caribbean, markets where American has reduced service.

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

2011-06-08T20:16:00.001-07:00

Air France black box: Air France Flight 447 was brought down by a combination of faulty speed sensors and confusion in the cockpit, according to a preliminary analysis by French investigators.

One of the two flight recorders from the Rio-Paris Air France Flight 447 which crashed in 2009 is displayed for the media before a news conference at the BEA headquarters in Le Bourget, northern Paris, in this May 12 file photo. Pilots wrestled with the controls of the Air France airliner for 3.5-minutes before it plunged into the Atlantic with its nose up, killing all 228 people on board in 2009, French investigators said on May 27.

By Christa Case Bryant, Staff writer / May 27, 2011

A preliminary report on the Air France Flight 447 crash in the Atlantic Ocean two years ago suggests that while some equipment malfunctioned, the pilots’ inability to respond properly to key instruments sent the plane into a 3.5-minute plunge that killed all 228 people aboard.

Air France Flight 447 wreckage (but no black box) found in Atlantic Air France crash prompts changes in Airbus speed sensors Air France crash: Probe into two other A330 incidents The findings by France's Bureau of Investigations and Analyses, based on data recently recovered from the Airbus 330’s black boxes, bolster early suspicions that speed sensors known as Pitot tubes had iced over and malfunctioned. This was a problem on Airbus planes that Air France had been aware of at the time of the crash, which occurred en route from Rio de Janeiro, Brazil, to Paris.

But the findings indicate that it wasn't the malfunctioning speed sensors alone that brought the plane down. They also suggest that pilots had enough information at their fingertips to determine what was happening, suggesting that they were not experienced or not prepared to deal with the sudden crisis that developed two hours into the transatlantic flight. Cockpit displays remained accurate and the engines remained fully functional and responsive to the pilots throughout the flight.

When a plane such as the Airbus 330 in question gets conflicting information from various speed sensors, the autopilot and auto-thrust systems shut down – handing control over to the pilot.

That’s precisely what happened two hours and 10 minutes after Flight 447 left Rio, less than 10 minutes after the captain had left the cockpit for a routine break. He was quickly called back to the cabin to try to help the copilots respond to repeated warnings as the plane stalled, and began falling toward the ocean.

However, it was a 32-year-old co-pilot – the least experienced of three pilots on board – who was at the controls until the final minute of the flight. The plane hit the ocean 4-1/2 minutes after the autosystems disengaged, falling at a rate of nearly 11,000 feet per minute.

The Air France pilots apparently tried to bring the nose of the plane up when it stalled, contrary to the conventional wisdom that pushing the nose down will help increase airspeed and bring an aircraft out of a stall, according to an aviation expert quoted by Bloomberg.

“The question is why the pilot kept giving nose-up inputs when the plane was in a stall,” said Paul Hayes, director of safety at Ascend Worldwide Ltd., a London-based aviation consultant company. “You should put the nose down to recover speed.”

Air France praised the professionalism of the pilots in the final moments of the flights, but numerous reports suggest that the airline had failed to give them the training necessary to respond to such a crisis at high altitude – a fault it is now trying to remedy with new training procedures.

2011-06-08T17:28:00.000-07:00

Delta bag fees for soldiers ignites backlash

Delta Air Lines' $2,800 in bag fees for Army unit returning from Afghanistan ignites backlash

Reacting to public outcry, Delta said Wednesday, June 8, 2011, it will allow members of the military to check four bags for free. The news came after two Army soldiers returning from Afghanistan complained in an online video that Delta charged their unit a total of $2,800 when some of them checked a fourth bag.(AP Photo/Paul Sancya, file)

Joan Lowy and Joshua Freed, Associated Press, On Wednesday June 8, 2011, 7:00 pm EDT

WASHINGTON (AP) -- Delta Air Lines hastily changed its baggage fees for troops Wednesday after a YouTube video showed soldiers complaining that they had to pay $200 apiece to check extra bags as they made their way home from Afghanistan.

The video was posted Tuesday and was viewed almost 200,000 times before it was removed the next day by the person who put it up. By Wednesday afternoon, a Facebook page called Boycott Delta for Soldiers had sprung up, and the airline was backpedaling and apologizing to the soldiers.

In the video, titled "Delta Airlines Welcomes Soldiers Home," two Army staff sergeants say their unit was told it would cost $200 apiece to check a fourth bag on a Tuesday morning flight from the Baltimore-Washington airport to Atlanta -- a total bill of more than $2,800.

The Defense Department typically reimburses such costs, which the soldiers may not have known before they made their displeasure known. The airline said late Wednesday that it would refund the fees if the government doesn't cover the bill. By then, the public relations damage to Delta was done.
In the video, one sergeant, Robert O'Hair, wearing a camouflage uniform and sitting inside the plane, says his fourth bag was a weapons case containing an M4 carbine rifle, a grenade launcher and a 9-millimeter pistol that he had used in Afghanistan.

"The tools I used to protect myself and Afghan citizens while I was deployed," O'Hair says.

With a bite to his voice, the other sergeant -- Fred Hilliker of Allendale, Mich. -- closes the video: "Good business model, Delta. Thank you. We're actually happy to be back to America. God bless America. Not happy, not happy at all. Appreciate it. Thank you."
The soldiers say in the video that they had already endured an 18-hour layover and had Army authorization to carry four bags.

Initially, Delta apologized to the soldiers but didn't change its policy. It posted a blog item attributed to an anonymous customer service representative explaining that Delta allows troops traveling in economy class up to three bags free but charges for the fourth.

As the storm of online complaints about the incident grew, the airline posted a new blog item Wednesday saying fourth bags will now be free for troops traveling in economy class and five bags will be free for those traveling in business class.
In a blog post, Delta said it regretted "that this experience caused these soldiers to feel anything but welcome on their return home." Airline officials declined to answer further questions.

One sergeant in the video said the unit was returning from Afghanistan to Fort Polk in Louisiana. Paul Boyce, a spokesman for Army Forces Command, said the soldiers who made the video weren't available for interviews.
"I don't know if Delta is going to reimburse these individual soldiers or not, but I do know that we would," Boyce said. "In the past, the airlines, if there's been some sort of a misunderstanding, have done that."

At least some of the soldiers traveling on the flight were with an Army Reserve unit based in Oklahoma, Boyce said. He said troops on the plane were returning from a military training center in Kabul. He did not have the name of their unit.

It was not clear why the video was removed from YouTube. The soldiers in the video also did not explain the total bill of more than $2,800 in detail.

It's not unusual for returning soldiers to check weapons when flying on a commercial airline if the weapons have been certified as unloaded, said Joe Davis, a spokesman for the Veterans of Foreign Wars' Washington office, who was critical of the fee.

"A $200 bill for extra baggage by a government-contracted airline is the worst welcome home any soldier could receive," Davis said. He acknowledged the troops would be reimbursed but said, "The shock of even being charged is enough to make most servicemen and women simply shake their heads and wonder who or what it is they are protecting."

The incident underscored how quickly a company's reputation can be tarnished when a Web video, online picture or posting goes viral. And airline passengers have made no secret of their hatred of baggage fees, which have become common in recent years.

The lesson, said Jonathan Bernstein, president of Bernstein Crisis Management Inc., is that companies should let airline workers make decisions in the name of good customer service. In this case, the Delta employee who handled the fee was just following the rules of Delta Air Lines Inc.

"Then those situations never have to escalate into crises," Bernstein said. "They (Delta) end up with a hit on their reputation that they could have avoided."

On YouTube, Facebook and other websites, posts were overwhelmingly critical of the airline, some suggesting that Delta was insensitive to the tough conditions troops face in Afghanistan and that flying them home completely free was the least the airline could do.
At least one congressman joined the fray. Rep. Bruce Braley, D-Iowa, called on Delta to immediately reimburse the soldiers.

"Since being elected to Congress, I have logged hundreds of thousands of miles on Delta -- the only carrier serving my home airport in Waterloo," Braley said in a statement. "If Delta doesn't reimburse these soldiers and reconsider its approach to servicing our troops, I'll have to reconsider using their service."

Other airlines have policies similar to the one that got Delta in trouble. United and American both allow three checked bags for free for active duty military personnel.

Freed reported from Minneapolis. Associated Press writer Kimberly Hefling in Washington contributed to this report.

2011-05-31T19:42:00.003-07:00

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.

2011-05-31T09:58:00.002-07:00

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

2011-05-30T22:32:00.001-07:00

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

2011-05-25T14:49:00.001-07:00

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

2011-05-25T12:15:00.003-07:00

Editor...

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

2011-05-24T06:45:00.001-07:00

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.

2011-05-18T13:02:00.000-07:00

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.

By JAD MOUAWAD

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.”

2011-05-16T19:01:00.000-07:00

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.
HOPE FOR ANSWERS

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)

The Airline Crew Report Blog...Lunacy in the Air

Related articles

Related articles