Updated: 4:42 p.m. May 28, 2009
Delta, pilots agree on severance deal
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Thursday, May 28, 2009
The pilots union at Delta Air Lines has agreed to a program offering incentives for pilot retirements to help the company cut pilot staffing.
Delta management had proposed the retirement incentive program to the Air Line Pilots Association at Delta to address “what management perceives to be a pilot staffing overage,” according to the union.
The union’s leadership voted Wednesday to approve the retirement incentive program. It will be offered from June 1 until July 15 to active pilots with at least 10 years of service and whose years of service and age total at least 55.
Pilots with less than 20 years of service will get six months of severance pay, while pilots with 20 years of service or more will get nine months of severance pay. The program also includes certain coverage of COBRA or retiree health care, as well as retiree travel benefits.
Delta pilots were not eligible to participate in the company’s buyouts this year and last year, which Delta used to cut about 6,500 employees.
The airline said in a written statement that it “continues to take every step possible to avoid involuntary reductions of front-line employees as a result of current economic conditions.”
Delta has about 12,000 pilots, including pilots from Delta and merger partner Northwest. Delta closed its deal to acquire Northwest in October.
Thursday, May 28, 2009
Friday, May 22, 2009
US Airways pilots' seniority fight goes to jury
Dawn Gilbertson - May. 13, 2009 12:00 AM
The Arizona Republic
The bitter seniority dispute pitting some US Airways pilots against their new union is now in the hands of a federal jury.Jurors began deliberating late Tuesday after a day of closing arguments in the two-week trial in U.S. District Court in Phoenix.
The trial featured detailed background on how the dispute developed after the America West-US Airways merger in 2005 and the intricacies of union merger policies and politics. The case even offered a little star power in the testimony of the pilot and co-pilot of the US Airways plane that landed in the Hudson River in January.
At issue for the jury to decide: whether the year-old US Airline Pilots Association (USAPA) has been fairly representing all 5,000-plus pilots of the new US Airways.A group of six former America West pilots, representing their 1,800 co-workers, filed the lawsuit last year, alleging that the new union is ignoring their interests by pushing for date-of-hire seniority instead of a seniority system issued by an arbitrator two years ago.
The union says it is being fair to all because it has proposed several job protections for America West pilots in its new seniority proposal, some that go beyond those on the arbitrated list. America West pilots have packed the courtroom every day during the trial, some accompanied by spouses.Seniority is critical to pilots because it determines their pay, promotions, work schedules.
A big theme in the America West pilots' case is that the arbitrator's decision was final and binding and that pilots from both America West and US Airways and their then union, the Air Line Pilots Association, knew that from the start.
They say the new union was formed to try to get around the decision because pilots of the former US Airways didn't like the outcome. They generally fare better on a date-of-hire system because US Airways has been around so much longer than America West.
"No one said, "I'm willing to sign up for these rules but only if it goes my way," pilots' attorney Marty Harper said in his closing arguments.Harper used a gambling analogy, noting that you never hear the losers in a poker game say they were all in only if they won."That's sort of what's happening here," he told jurors.Harper took a swipe at the testimony, for the defense, of Capt. Chesley Sullenberger from US Airways Flight 1549.
Sullenberger told a story on the stand about how his daughter asked in grade school about the meaning of integrity, and he replied that it's doing the right thing if it's not convenient.Harper suggested that that's what the pilots of the former US Airways aren't doing by ignoring the arbitrated list."You can go back on your word under (a) certain set of circumstances," he said.Lee Seham, the union attorney who delivered its closing arguments, said the former US Airways pilots thought the arbitrated seniority list was "terribly, terribly unfair."
They didn't like the fact that many America West pilots were ranked ahead of US Airways pilots with much more seniority and that US Airways pilots out of work at the time of the merger were put at the bottom of the list.
There was such a strong sentiment against the arbitrator's decision that US Airways pilots would never ratify a contract that included that seniority list, Seham told jurors. The old union tried to get the two sides together to work out their differences, he said, with the added encouragement of US Airways executives, but the America West side wouldn't budge, he said.
"It takes two to tango," he said, suggesting that it could be argued that it was the America West pilots that were acting in bad faith.Seham said USAPA was acting in good faith because it was formed to resolve the impasse over seniority and get a long-awaited joint contract for all pilots of the new US Airways.
The two sides are still operating separately, under different pay rates and can't fly each other's planes. He said the pilots did not need USAPA to get rid of the arbitrated list because the old union was effectively doing that with its policies. Harper said the union has tried to downplay the sole reason it was formed - to get around the arbitrator's seniority list - because attorneys they consulted early on said it could land them in legal trouble.
He noted that an e-mail union officials brought up to show that they were balancing the interests of both pilot groups with the protections for America West pilots was sent after the lawsuit was filed. There are nine members on the jury, and their verdict must be unanimous.
Dawn Gilbertson - May. 13, 2009 12:00 AM
The Arizona Republic
The bitter seniority dispute pitting some US Airways pilots against their new union is now in the hands of a federal jury.Jurors began deliberating late Tuesday after a day of closing arguments in the two-week trial in U.S. District Court in Phoenix.
The trial featured detailed background on how the dispute developed after the America West-US Airways merger in 2005 and the intricacies of union merger policies and politics. The case even offered a little star power in the testimony of the pilot and co-pilot of the US Airways plane that landed in the Hudson River in January.
At issue for the jury to decide: whether the year-old US Airline Pilots Association (USAPA) has been fairly representing all 5,000-plus pilots of the new US Airways.A group of six former America West pilots, representing their 1,800 co-workers, filed the lawsuit last year, alleging that the new union is ignoring their interests by pushing for date-of-hire seniority instead of a seniority system issued by an arbitrator two years ago.
The union says it is being fair to all because it has proposed several job protections for America West pilots in its new seniority proposal, some that go beyond those on the arbitrated list. America West pilots have packed the courtroom every day during the trial, some accompanied by spouses.Seniority is critical to pilots because it determines their pay, promotions, work schedules.
A big theme in the America West pilots' case is that the arbitrator's decision was final and binding and that pilots from both America West and US Airways and their then union, the Air Line Pilots Association, knew that from the start.
They say the new union was formed to try to get around the decision because pilots of the former US Airways didn't like the outcome. They generally fare better on a date-of-hire system because US Airways has been around so much longer than America West.
"No one said, "I'm willing to sign up for these rules but only if it goes my way," pilots' attorney Marty Harper said in his closing arguments.Harper used a gambling analogy, noting that you never hear the losers in a poker game say they were all in only if they won."That's sort of what's happening here," he told jurors.Harper took a swipe at the testimony, for the defense, of Capt. Chesley Sullenberger from US Airways Flight 1549.
Sullenberger told a story on the stand about how his daughter asked in grade school about the meaning of integrity, and he replied that it's doing the right thing if it's not convenient.Harper suggested that that's what the pilots of the former US Airways aren't doing by ignoring the arbitrated list."You can go back on your word under (a) certain set of circumstances," he said.Lee Seham, the union attorney who delivered its closing arguments, said the former US Airways pilots thought the arbitrated seniority list was "terribly, terribly unfair."
They didn't like the fact that many America West pilots were ranked ahead of US Airways pilots with much more seniority and that US Airways pilots out of work at the time of the merger were put at the bottom of the list.
There was such a strong sentiment against the arbitrator's decision that US Airways pilots would never ratify a contract that included that seniority list, Seham told jurors. The old union tried to get the two sides together to work out their differences, he said, with the added encouragement of US Airways executives, but the America West side wouldn't budge, he said.
"It takes two to tango," he said, suggesting that it could be argued that it was the America West pilots that were acting in bad faith.Seham said USAPA was acting in good faith because it was formed to resolve the impasse over seniority and get a long-awaited joint contract for all pilots of the new US Airways.
The two sides are still operating separately, under different pay rates and can't fly each other's planes. He said the pilots did not need USAPA to get rid of the arbitrated list because the old union was effectively doing that with its policies. Harper said the union has tried to downplay the sole reason it was formed - to get around the arbitrator's seniority list - because attorneys they consulted early on said it could land them in legal trouble.
He noted that an e-mail union officials brought up to show that they were balancing the interests of both pilot groups with the protections for America West pilots was sent after the lawsuit was filed. There are nine members on the jury, and their verdict must be unanimous.
Thursday, May 21, 2009
Southwest Airlines sells 3 planes for $104 million, then leases them back
Thursday May 21, 2009, 3:25 pm EDT
DALLAS (AP) -- Southwest Airlines Co., trying to pad its cash balance amid a downturn in travel, said Thursday it sold three planes for $104 million and leased them back.
It was the second such transaction in just over a month at Dallas-based Southwest, bringing to six the number of planes it has sold.
Southwest said in a filing with the Securities and Exchange Commission that on Tuesday it closed a sale-leaseback deal with a third party aircraft lessor involving three Boeing 737-700 jets. It immediately leased the planes back for 16 years.
Southwest said it will make monthly payments of about $4.4 million for the first six months of the leases. It didn't identify the lessor in the transaction.
The low-fare airline had a string of profitable quarters from 1991 until last year, the longest streak in the U.S. airline industry. But it has lost money the last three quarters, with falling traffic hurting its results so far in 2009.
Airlines have had a difficult time borrowing money to finance aircraft purchases and other purposes. The chief executive of American Airlines parent AMR Corp. said, however, that the credit squeeze seems to be easing.
Southwest shares fell 18 cents, or 2.6 percent, to $6.75 in afternoon trading.
Thursday May 21, 2009, 3:25 pm EDT
DALLAS (AP) -- Southwest Airlines Co., trying to pad its cash balance amid a downturn in travel, said Thursday it sold three planes for $104 million and leased them back.
It was the second such transaction in just over a month at Dallas-based Southwest, bringing to six the number of planes it has sold.
Southwest said in a filing with the Securities and Exchange Commission that on Tuesday it closed a sale-leaseback deal with a third party aircraft lessor involving three Boeing 737-700 jets. It immediately leased the planes back for 16 years.
Southwest said it will make monthly payments of about $4.4 million for the first six months of the leases. It didn't identify the lessor in the transaction.
The low-fare airline had a string of profitable quarters from 1991 until last year, the longest streak in the U.S. airline industry. But it has lost money the last three quarters, with falling traffic hurting its results so far in 2009.
Airlines have had a difficult time borrowing money to finance aircraft purchases and other purposes. The chief executive of American Airlines parent AMR Corp. said, however, that the credit squeeze seems to be easing.
Southwest shares fell 18 cents, or 2.6 percent, to $6.75 in afternoon trading.
Monday, May 11, 2009
May 11, 2009, 9:32 AM ET
Captain’s Training Faulted In Buffalo Crash That Killed 50
By WSJ Staff
The captain of a commuter plane that crashed Feb. 12 near Buffalo, N.Y., had flunked numerous flight tests during his career and was never adequately taught how to respond to the emergency that led to the airplane’s fatal descent, according to people close to the investigation, The Wall Street Journal reports.
Reporter Andy Pasztor writes:
All 49 people aboard were killed, as well as one person in a house below, when the plane crashed just a few miles short of the Buffalo airport en route from Newark, N.J. The Bombardier Q400 turboprop in the crash, which will be the subject of a National Transportation Safety Board hearing Tuesday, was operated by commuter carrier Colgan Air Inc., a division of Pinnacle Airlines Corp.
Capt. Marvin Renslow had never been properly trained by the company to respond to a warning system designed to prevent the plane from going into a stall, according to people familiar with the investigation. As the speed slowed to a dangerous level, setting off the stall-prevention system, he did the opposite of the proper procedure, which led to the crash, these people said.
Additionally, his 24-year-old co-pilot, Rebecca Shaw, had complained before takeoff about being congested and said she probably should have called in sick, according to people who have listened to the cockpit voice recording.
The circumstances surrounding Continental Connection Flight 3407 have prompted investigators and regulators to examine Colgan’s hiring and training practices. At the NTSB hearing, witnesses are expected to provide new allegations about training shortcomings, as well as the prevalence of chronic pilot fatigue and lapses in cockpit discipline. The NTSB also is expected to be critical of the Federal Aviation Administration’s oversight of the airline. The FAA, which has said it is investigating the airline over pilot scheduling, declined to comment on issues likely to be raised the hearing.
Pinnacle has said its pilot training programs “meet or exceed regulatory requirements for all major airlines” and crews “are prepared to handle emergency situations they might face.” On Sunday, spokesman Joe Williams confirmed in an email that Capt. Renslow had five “unsatisfactory” training check rides in his career — including two at Colgan — but passed a subsequent series of training tests and was “fully qualified in the Q400″ aircraft.
In recent weeks, Colgan’s top two training officials resigned; Mr. Williams has said their decisions were voluntary and not connected to the accident. Darrell Mitchell, Colgan’s departing director of training, is slated to testify at Tuesday’s hearing.
At the start of Tuesday’s hearing, the NTSB will open its public docket on the Colgan accident. Readers will be able to download the file, which includes reports, interview transcripts, cockpit voice recorder transcripts, flight data recorder information and other documents, once the hearing gets underway.
An agenda for the three-day hearing is available here.
Captain’s Training Faulted In Buffalo Crash That Killed 50
By WSJ Staff
The captain of a commuter plane that crashed Feb. 12 near Buffalo, N.Y., had flunked numerous flight tests during his career and was never adequately taught how to respond to the emergency that led to the airplane’s fatal descent, according to people close to the investigation, The Wall Street Journal reports.
Reporter Andy Pasztor writes:
All 49 people aboard were killed, as well as one person in a house below, when the plane crashed just a few miles short of the Buffalo airport en route from Newark, N.J. The Bombardier Q400 turboprop in the crash, which will be the subject of a National Transportation Safety Board hearing Tuesday, was operated by commuter carrier Colgan Air Inc., a division of Pinnacle Airlines Corp.
Capt. Marvin Renslow had never been properly trained by the company to respond to a warning system designed to prevent the plane from going into a stall, according to people familiar with the investigation. As the speed slowed to a dangerous level, setting off the stall-prevention system, he did the opposite of the proper procedure, which led to the crash, these people said.
Additionally, his 24-year-old co-pilot, Rebecca Shaw, had complained before takeoff about being congested and said she probably should have called in sick, according to people who have listened to the cockpit voice recording.
The circumstances surrounding Continental Connection Flight 3407 have prompted investigators and regulators to examine Colgan’s hiring and training practices. At the NTSB hearing, witnesses are expected to provide new allegations about training shortcomings, as well as the prevalence of chronic pilot fatigue and lapses in cockpit discipline. The NTSB also is expected to be critical of the Federal Aviation Administration’s oversight of the airline. The FAA, which has said it is investigating the airline over pilot scheduling, declined to comment on issues likely to be raised the hearing.
Pinnacle has said its pilot training programs “meet or exceed regulatory requirements for all major airlines” and crews “are prepared to handle emergency situations they might face.” On Sunday, spokesman Joe Williams confirmed in an email that Capt. Renslow had five “unsatisfactory” training check rides in his career — including two at Colgan — but passed a subsequent series of training tests and was “fully qualified in the Q400″ aircraft.
In recent weeks, Colgan’s top two training officials resigned; Mr. Williams has said their decisions were voluntary and not connected to the accident. Darrell Mitchell, Colgan’s departing director of training, is slated to testify at Tuesday’s hearing.
At the start of Tuesday’s hearing, the NTSB will open its public docket on the Colgan accident. Readers will be able to download the file, which includes reports, interview transcripts, cockpit voice recorder transcripts, flight data recorder information and other documents, once the hearing gets underway.
An agenda for the three-day hearing is available here.
Sunday, May 10, 2009
Airlines bank on fees in down times
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, May 10, 2009
The onslaught of more airline fees on everything from checked bags to seat assignments is helping airlines bring in more cash, but for travelers it can mean muddled comparison shopping when seeking the lowest cost for a flight.
Add-on fees have become an effective way for airlines to boost revenue at a time when recession-weakened travel demand compels them to drop fares.
Atlanta-based Delta Air Lines in July starts charging passengers on international flights a $50 fee each way for checking a second bag. Other airlines are studying the move but have not yet matched. That means travelers who check two bags may find a lower fare on Delta compared with other carriers, but their cost for traveling could end up higher.
Various airlines have baggage charges that can add up fast. Pack a third bag on an international flight and Delta will tack on another $200 fee each way, for example. Overweight bags on a Delta international flight would each cost at least $300 extra round trip and oversized bags would each cost $350 extra round trip.
Even on domestic flights, “your $78 airplane ticket can be $600 or $700 in a New York minute just because you didn’t pay attention” to fees for extra, overweight and oversized bags, said Tom Parsons, founder of Bestfares.com.
The fees enable airlines to win bookings from customers using travel Web sites to compare prices and choose the lowest fare, then collect more revenue when travelers arrive at the airport with extra bags or seek other services.
Bill Swelbar, a researcher at the International Center for Air Transportation at the Massachusetts Institute of Technology, said airlines have had to look for other revenue sources because fares alone don’t cover the cost of travel.
“The airline seat is a commodity product,” Swelbar said. Airlines believe they must offer the lowest fares “because so many decisions on travel are based on price and price alone.”
AirTran Airways chief financial officer Arne Haak has said travelers will spend hours searching for fares online to save $8, then “come to the airport and spend $20 to buy a soda, a bag of chips, a candy bar and a magazine that they could have bought for half the price.”
Parsons said “John Q. Traveler” seems much more concerned about finding the lowest base fare. “All the other incidentals they don’t seem to be upset with,” he said.
While most airlines already charge for checked bags on domestic flights, baggage rules have been more liberal for international travel, where longer trips may require more bags and fares often are already much higher.
“Now they’re telling you you’ve also got to pay for bags,” Parsons said. “I remember when they used to give you bags. Where’s my old PanAm bag?”
Delta, which reported a $794 million loss for the first quarter, said it took in more than $160 million from baggage fees in the quarter. It expects the new international second checked bag fee to generate about $100 million annually.
Chicago-based United Airlines said it takes in about $14 in ancillary revenues and fees per passenger.
One carrier —- Southwest Airlines, which does not fly to Atlanta —- has held back on charging many of the extra fees, and it promotes the difference.
But other discount airlines, including Spirit and Allegiant, have gone further than the big carriers, including a fee for bookings made online and charges for non-alcoholic beverages.
And US Airways is adding a fee on top of a fee. On July 9, the carrier plans to begin charging $5 for paying checked bag fees at the airport instead of online. US Airways also charges for international checked bags to and from Canada, Latin America and the Caribbean, but not to and from Europe and Asia.
A consumer’s only defense at this point is careful research and adjusting plans to avoid fees.
Technology is in the works to make it easier for travelers to compare prices. The technology is being developed for reservations systems that airlines and travel agencies use to sell airline tickets.
Some travel Web sites also offer fee comparisons. TripAdvisor in February launched a flight search engine with a fees estimator that asks travelers how many bags they will check, whether they have elite frequent flier status —- which can affect which fees apply —- and if they will want food, drinks or entertainment in flight.
Other travel sites, including Orbitz, Expedia and Travelocity, offer charts that compare different airlines’ fees. Another site, flyingfees.com, compares airline fees.
According to a TripAdvisor survey, 36 percent of respondents said they have been surprised by the cost of checked baggage fees at the airport.
“I thought there would be more backlash from the traveling public over the payment of fees than there has been,” Swelbar said.
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, May 10, 2009
The onslaught of more airline fees on everything from checked bags to seat assignments is helping airlines bring in more cash, but for travelers it can mean muddled comparison shopping when seeking the lowest cost for a flight.
Add-on fees have become an effective way for airlines to boost revenue at a time when recession-weakened travel demand compels them to drop fares.
Atlanta-based Delta Air Lines in July starts charging passengers on international flights a $50 fee each way for checking a second bag. Other airlines are studying the move but have not yet matched. That means travelers who check two bags may find a lower fare on Delta compared with other carriers, but their cost for traveling could end up higher.
Various airlines have baggage charges that can add up fast. Pack a third bag on an international flight and Delta will tack on another $200 fee each way, for example. Overweight bags on a Delta international flight would each cost at least $300 extra round trip and oversized bags would each cost $350 extra round trip.
Even on domestic flights, “your $78 airplane ticket can be $600 or $700 in a New York minute just because you didn’t pay attention” to fees for extra, overweight and oversized bags, said Tom Parsons, founder of Bestfares.com.
The fees enable airlines to win bookings from customers using travel Web sites to compare prices and choose the lowest fare, then collect more revenue when travelers arrive at the airport with extra bags or seek other services.
Bill Swelbar, a researcher at the International Center for Air Transportation at the Massachusetts Institute of Technology, said airlines have had to look for other revenue sources because fares alone don’t cover the cost of travel.
“The airline seat is a commodity product,” Swelbar said. Airlines believe they must offer the lowest fares “because so many decisions on travel are based on price and price alone.”
AirTran Airways chief financial officer Arne Haak has said travelers will spend hours searching for fares online to save $8, then “come to the airport and spend $20 to buy a soda, a bag of chips, a candy bar and a magazine that they could have bought for half the price.”
Parsons said “John Q. Traveler” seems much more concerned about finding the lowest base fare. “All the other incidentals they don’t seem to be upset with,” he said.
While most airlines already charge for checked bags on domestic flights, baggage rules have been more liberal for international travel, where longer trips may require more bags and fares often are already much higher.
“Now they’re telling you you’ve also got to pay for bags,” Parsons said. “I remember when they used to give you bags. Where’s my old PanAm bag?”
Delta, which reported a $794 million loss for the first quarter, said it took in more than $160 million from baggage fees in the quarter. It expects the new international second checked bag fee to generate about $100 million annually.
Chicago-based United Airlines said it takes in about $14 in ancillary revenues and fees per passenger.
One carrier —- Southwest Airlines, which does not fly to Atlanta —- has held back on charging many of the extra fees, and it promotes the difference.
But other discount airlines, including Spirit and Allegiant, have gone further than the big carriers, including a fee for bookings made online and charges for non-alcoholic beverages.
And US Airways is adding a fee on top of a fee. On July 9, the carrier plans to begin charging $5 for paying checked bag fees at the airport instead of online. US Airways also charges for international checked bags to and from Canada, Latin America and the Caribbean, but not to and from Europe and Asia.
A consumer’s only defense at this point is careful research and adjusting plans to avoid fees.
Technology is in the works to make it easier for travelers to compare prices. The technology is being developed for reservations systems that airlines and travel agencies use to sell airline tickets.
Some travel Web sites also offer fee comparisons. TripAdvisor in February launched a flight search engine with a fees estimator that asks travelers how many bags they will check, whether they have elite frequent flier status —- which can affect which fees apply —- and if they will want food, drinks or entertainment in flight.
Other travel sites, including Orbitz, Expedia and Travelocity, offer charts that compare different airlines’ fees. Another site, flyingfees.com, compares airline fees.
According to a TripAdvisor survey, 36 percent of respondents said they have been surprised by the cost of checked baggage fees at the airport.
“I thought there would be more backlash from the traveling public over the payment of fees than there has been,” Swelbar said.
Saturday, May 09, 2009
American Airlines global alliance soon to be OK'd?
12:00 AM CDT on Saturday, May 9, 2009
By DAVE MICHAELS / The Dallas Morning News dmichaels@dallasnews.com
WASHINGTON – The U.S. Department of Transportation looks poised to approve antitrust immunity for American Airlines' alliance with British Airways, Iberia and other carriers.
"These alliances are life savers for airlines," Transportation Secretary Ray LaHood said Friday. "That is the premise from which we start. We believe it. The airlines believe it. And so we are going to continue to pursue those kinds of opportunities where we have them."
Two other global alliances have antitrust immunity, allowing them to cooperate on schedules, fares and cargo prices.
House Democrats are much more skeptical than LaHood of airline alliances, saying they are anti-competitive and drive up prices for international routes. Minnesota Rep. Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, has said immunized alliances amount to a "de facto merger" of airlines.
American says alliances have resulted in more trans-Atlantic service and better frequent-flier benefits for travelers.
Legislation to fund the Federal Aviation Administration passed Oberstar's committee in March and included a provision that would retire existing antitrust exemptions after three years. It also would direct government auditors to study whether such alliances have hurt competition and whether applications should be subject to a merger analysis by the Department of Justice.
However, LaHood on Friday supported the idea that alliances are needed to achieve efficiencies in today's market. Last month, his department proposed to grant antitrust immunity to Continental Airlines for its participation in the Star Alliance, which includes United Airlines, Air Canada and Lufthansa Airlines.
"When I called the chairmen of United and Continental and told them our department was going to move ahead with their alliance, you know what they said?" La Hood said. " 'This is a life saver for us.' "
Parties interested in the Oneworld application have until May 18 to submit comments about it. American and British Airways have until May 28 to respond. The department would make a preliminary ruling after that and has until Oct. 31 to issue a final ruling.
The European Union recently began investigating the Oneworld and Star alliances for possible violations of antitrust rules.
12:00 AM CDT on Saturday, May 9, 2009
By DAVE MICHAELS / The Dallas Morning News dmichaels@dallasnews.com
WASHINGTON – The U.S. Department of Transportation looks poised to approve antitrust immunity for American Airlines' alliance with British Airways, Iberia and other carriers.
"These alliances are life savers for airlines," Transportation Secretary Ray LaHood said Friday. "That is the premise from which we start. We believe it. The airlines believe it. And so we are going to continue to pursue those kinds of opportunities where we have them."
Two other global alliances have antitrust immunity, allowing them to cooperate on schedules, fares and cargo prices.
House Democrats are much more skeptical than LaHood of airline alliances, saying they are anti-competitive and drive up prices for international routes. Minnesota Rep. Jim Oberstar, chairman of the House Transportation and Infrastructure Committee, has said immunized alliances amount to a "de facto merger" of airlines.
American says alliances have resulted in more trans-Atlantic service and better frequent-flier benefits for travelers.
Legislation to fund the Federal Aviation Administration passed Oberstar's committee in March and included a provision that would retire existing antitrust exemptions after three years. It also would direct government auditors to study whether such alliances have hurt competition and whether applications should be subject to a merger analysis by the Department of Justice.
However, LaHood on Friday supported the idea that alliances are needed to achieve efficiencies in today's market. Last month, his department proposed to grant antitrust immunity to Continental Airlines for its participation in the Star Alliance, which includes United Airlines, Air Canada and Lufthansa Airlines.
"When I called the chairmen of United and Continental and told them our department was going to move ahead with their alliance, you know what they said?" La Hood said. " 'This is a life saver for us.' "
Parties interested in the Oneworld application have until May 18 to submit comments about it. American and British Airways have until May 28 to respond. The department would make a preliminary ruling after that and has until Oct. 31 to issue a final ruling.
The European Union recently began investigating the Oneworld and Star alliances for possible violations of antitrust rules.
Wednesday, May 06, 2009
May 6, 2009, 10:47 AM ET
Artist Allegedly Swigged Hand Soap, Tried to Bite United Flight Attendant
By Matt Phillips
Wow. It’s been a while since a tale of poor passenger behavior grabbed our attention as much as this one.
The Chicago Tribune’s Julie Johnsson reports:
United Airlines diverted a recent flight bound for London after an incoherent and disruptive passenger, apparently woozy from a combination of pills, alcohol and lavatory hand soap, allegedly tried to bite a flight attendant in the leg.
Galina Rusanova, a British citizen, was charged with interference with a flight crew and assault for allegedly disrupting United Flight 934 from Los Angeles to London Heathrow Airport on April 29, forcing the plane to land in Maine.
She could face up to 20 years in prison and a $250,000 fine.
In a Monday hearing in U.S. District Court in Bangor, Maine, Rusanova agreed to be detained pending trial.
Rusanova is described by the British press as a Russian-born artist, actress and author who rubs elbows with the rich and famous. She was returning home to the United Kingdom after traveling to California to visit a man she had met over the Internet, according to court documents.
“What wasn’t disclosed through the affidavit is that Ms. Rusanova is a very intelligent, charming woman,” said her attorney, Matthew Erickson. “This comes as a shock to her.”
Erickson added: “Her mistake was to mix prescription drugs with alcohol. After that, all bets were off.”
Of course the detail of this episode that really stands out is the hand soap. According to court documents filed May 1, a flight attendant approached Rusanova after passengers said the artist was being disruptive, “at which time she observed her drink a bottle of liquid soap that she had apparently removed from the bathroom.”
An affidavit also cites a written statement from a flight crew member “in which she reports that at one point while Rusanova was in the galley, she fell to the ground and began ’snapping like a dog’ and trying to bite flight crew member Donoho’s leg.”
Johnsson reports that while Rusanova could face a long stint in jail, guidelines for sentencing in cases like hers suggest jail terms ranging from time served to about six months, according to the artist’s lawyer.
Artist Allegedly Swigged Hand Soap, Tried to Bite United Flight Attendant
By Matt Phillips
Wow. It’s been a while since a tale of poor passenger behavior grabbed our attention as much as this one.
The Chicago Tribune’s Julie Johnsson reports:
United Airlines diverted a recent flight bound for London after an incoherent and disruptive passenger, apparently woozy from a combination of pills, alcohol and lavatory hand soap, allegedly tried to bite a flight attendant in the leg.
Galina Rusanova, a British citizen, was charged with interference with a flight crew and assault for allegedly disrupting United Flight 934 from Los Angeles to London Heathrow Airport on April 29, forcing the plane to land in Maine.
She could face up to 20 years in prison and a $250,000 fine.
In a Monday hearing in U.S. District Court in Bangor, Maine, Rusanova agreed to be detained pending trial.
Rusanova is described by the British press as a Russian-born artist, actress and author who rubs elbows with the rich and famous. She was returning home to the United Kingdom after traveling to California to visit a man she had met over the Internet, according to court documents.
“What wasn’t disclosed through the affidavit is that Ms. Rusanova is a very intelligent, charming woman,” said her attorney, Matthew Erickson. “This comes as a shock to her.”
Erickson added: “Her mistake was to mix prescription drugs with alcohol. After that, all bets were off.”
Of course the detail of this episode that really stands out is the hand soap. According to court documents filed May 1, a flight attendant approached Rusanova after passengers said the artist was being disruptive, “at which time she observed her drink a bottle of liquid soap that she had apparently removed from the bathroom.”
An affidavit also cites a written statement from a flight crew member “in which she reports that at one point while Rusanova was in the galley, she fell to the ground and began ’snapping like a dog’ and trying to bite flight crew member Donoho’s leg.”
Johnsson reports that while Rusanova could face a long stint in jail, guidelines for sentencing in cases like hers suggest jail terms ranging from time served to about six months, according to the artist’s lawyer.
Tuesday, May 05, 2009
Airlines: Where Capital Goes to Die
The big U.S. carriers have a broken business model and little relief in sight. Some long held assumptions about the industry could soon be upended
By Justin Bachman
As U.S. banks grapple with federal "stress tests" on their balance sheets, a similar process is playing out in the airline industry. Mix a deep recession with tight credit and fear of an influenza pandemic, and there's plenty of stress on airline balance sheets this spring. That has carriers conserving every last penny and hoping the summer travel months provide a sufficient cushion to last through to an economic recovery.
But what if the summer is not bountiful, or the global recession turns nastier? What if another health or terror scare further depresses flying? For most of their history airlines have been growth enterprises, with heavy capital needs but plenty of people willing to invest. That was then, however; today a share of most airline stocks costs less than a six-pack of microbrew.
Those shares serve as little more than a proxy for the price of crude oil—a trading stock that can turn a quick profit. Legacy airline debt yields a 20% or better return, but only because the risk is so high. The current times are sapping cash; maintaining liquidity has become a central job for airlines. "We have in this business been able to fund long-term losses with outside capital … and that is going to be harder to do in the future," US Airways (LCC) CEO Doug Parker said on May 4, citing "fundamental" changes for airlines' financial partners such as banks, aircraft makers, lessors, and other suppliers.
All Eyes on the Baby Boomers
So where will operating capital come from? It's a crucial question for airlines. If demand doesn't return to the same degree as in past recoveries—indeed, if in coming years aging baby boomers wracked by stock losses and shaky home prices fundamentally change their spending habits and don't travel as much as predicted—revenues could be severely crimped. That might combine with two rising expenses: higher payments to underfunded pension plans that cover older airline workers, and more capital to update aging jet fleets.
Yet as the recent experience of troubled American banks and car companies has shown, once far-fetched scenarios can quickly morph into solutions for vital yet ailing industries. U.S. taxpayers have been summoned repeatedly for aid, as have investors abroad. Uncle Sam has also offered enticing terms to spur certain investments—similar incentives could be devised for the airline industry. And for practical purposes, the Obama Administration has been managing General Motors (GM), Chrysler, and American International Group (AIG). Why not an airline or two?
If airlines are eventually forced into bankruptcy, pensions may be jettisoned, as US Airways, Delta (DAL), and United (UAUA) have all done in Chapter 11. But federal officials could require more funds from companies that wish to do so. As for aircraft, the U.S. lags Europe and Asia in terms of commercial fleet age because cash-strapped U.S. airlines have bought very few of the latest models (zero of the jumbo Airbus A380s, for example). Airbus and Boeing (BA) are themselves scrambling to keep business and tend to offer large customers attractive financing and other breaks, but that would hardly cover the needs of an industrywide order for 1,000 or more new planes.
Consolidation Among the Big Five?
"Looking ahead, with credit tight, where will capital—affordable capital—be found unless it is from another participant in the same industry?" Bill Swelbar, a research engineer with MIT's International Center for Air Transportation and a Hawaiian Airlines (HA) director, wrote recently on his blog. "If companies are struggling to realize any return on invested capital today, then what happens as interest rates continue to increase in lockstep with capital scarcity?"
As Swelbar suggests, the logical answer would be consolidation among the five big carriers. A new round of bankruptcies might even see one or more of a large airline's best bits sold off to a rival, or outright liquidations—steps that were largely avoided during the reorganizations that followed the 2001 terrorist attacks. Even after the capacity cutbacks spurred by crude oil's spike in the summer of 2008, many observers say far more—25% to 35% of the current capacity—must be removed before any meaningful profit-margin improvements will be realized.
"There are too many airlines," says Vicki Bryan, a senior bond analyst with Gimme Credit in New York. "Even last year when they were all just getting killed, slaughtered, massacred on fuel … the net reduction in capacity was just not significant."
Ownership Issues Coming to a Head
But airline consolidation remains a minefield that encroaches on union and political interests. Ditto for another potential source of capital, healthier European and Asian carriers. U.S. law restricts foreign airline ownership in U.S. carriers to a minority stake, but the International Air Transport Assn. and big European airlines have made that issue a central part of the debate over further liberalization in U.S.-European air links, with the matter coming to a head in 2010 when a second phase of the "Open Skies" treaty is set to be negotiated.
"From California to the eastern banks of Europe, this should be one market, and we should treat it as one market," Lufthansa (LHAG.DE) CEO Wolfgang Mayrhuber said Apr. 29 in a speech to the U.S. Chamber of Commerce in Washington. Lufthansa has been on the forefront of consolidation in Europe, taking controlling ownership since 2005 in various carriers: SWISS, Austrian, Belgian, and bmi, and a 19% stake in JetBlue (JBLU).
The long argument against foreign control of U.S. carriers, dating from the 1940s, has been based on national security and the government's ability to gain access to the civilian fleet in emergencies. Others worry that European or Asian operators would slash jobs and decline to serve small, less profitable U.S. cities. But nationalistic arguments may hold diminishing sway at a time when an Italian industrial group, Fiat (FIA.MI), is negotiating to acquire one of Detroit's iconic Big Three automakers, and the largest U.S. bank—Citigroup (C)—has sold a nearly 9% stake to investors in Abu Dhabi and Saudi Arabia.
Going Private Not Likely
One other option that might apply in other industries—going private—is unlikely to come to airlines. Jesup & Lamont analyst Helane Becker raised the question with United's management during a recent earnings call: With their public equity virtually worthless, why don't airlines seek funds from public debt? But to go private, airline executives would have to borrow heavily to buy their shares—and even if they did so, they'd be spending those funds on a severely distressed asset.
That's not a scenario lenders would care to see. As for an outside takeover, private equity firms have lost the financial firepower they deployed in 2006 and 2007 as the worldwide credit markets seized. And even if they had escaped the market collapse unscathed, an airline would be among the least favorable places to invest. Moreover, the legacy carriers already have substantial leverage on the books, leaving a takeover artist no space to add debt. "It becomes an opportunity cost, too," says Ben Baldanza, chief executive of privately held Spirit Airlines. "If you got a billion dollars are you going to go buy an airline?"
For cash-strapped airlines, the looming crisis could produce relief in many forms: a new European owner, a government-overseen industry consolidation that forces travelers to pay more, or the sort of terms that may make a large investment fund scramble for its checkbook. As recent history demonstrates, old problems in this environment have a way of attracting new solutions.
Bachman is deputy news director for BusinessWeek.com.
The big U.S. carriers have a broken business model and little relief in sight. Some long held assumptions about the industry could soon be upended
By Justin Bachman
As U.S. banks grapple with federal "stress tests" on their balance sheets, a similar process is playing out in the airline industry. Mix a deep recession with tight credit and fear of an influenza pandemic, and there's plenty of stress on airline balance sheets this spring. That has carriers conserving every last penny and hoping the summer travel months provide a sufficient cushion to last through to an economic recovery.
But what if the summer is not bountiful, or the global recession turns nastier? What if another health or terror scare further depresses flying? For most of their history airlines have been growth enterprises, with heavy capital needs but plenty of people willing to invest. That was then, however; today a share of most airline stocks costs less than a six-pack of microbrew.
Those shares serve as little more than a proxy for the price of crude oil—a trading stock that can turn a quick profit. Legacy airline debt yields a 20% or better return, but only because the risk is so high. The current times are sapping cash; maintaining liquidity has become a central job for airlines. "We have in this business been able to fund long-term losses with outside capital … and that is going to be harder to do in the future," US Airways (LCC) CEO Doug Parker said on May 4, citing "fundamental" changes for airlines' financial partners such as banks, aircraft makers, lessors, and other suppliers.
All Eyes on the Baby Boomers
So where will operating capital come from? It's a crucial question for airlines. If demand doesn't return to the same degree as in past recoveries—indeed, if in coming years aging baby boomers wracked by stock losses and shaky home prices fundamentally change their spending habits and don't travel as much as predicted—revenues could be severely crimped. That might combine with two rising expenses: higher payments to underfunded pension plans that cover older airline workers, and more capital to update aging jet fleets.
Yet as the recent experience of troubled American banks and car companies has shown, once far-fetched scenarios can quickly morph into solutions for vital yet ailing industries. U.S. taxpayers have been summoned repeatedly for aid, as have investors abroad. Uncle Sam has also offered enticing terms to spur certain investments—similar incentives could be devised for the airline industry. And for practical purposes, the Obama Administration has been managing General Motors (GM), Chrysler, and American International Group (AIG). Why not an airline or two?
If airlines are eventually forced into bankruptcy, pensions may be jettisoned, as US Airways, Delta (DAL), and United (UAUA) have all done in Chapter 11. But federal officials could require more funds from companies that wish to do so. As for aircraft, the U.S. lags Europe and Asia in terms of commercial fleet age because cash-strapped U.S. airlines have bought very few of the latest models (zero of the jumbo Airbus A380s, for example). Airbus and Boeing (BA) are themselves scrambling to keep business and tend to offer large customers attractive financing and other breaks, but that would hardly cover the needs of an industrywide order for 1,000 or more new planes.
Consolidation Among the Big Five?
"Looking ahead, with credit tight, where will capital—affordable capital—be found unless it is from another participant in the same industry?" Bill Swelbar, a research engineer with MIT's International Center for Air Transportation and a Hawaiian Airlines (HA) director, wrote recently on his blog. "If companies are struggling to realize any return on invested capital today, then what happens as interest rates continue to increase in lockstep with capital scarcity?"
As Swelbar suggests, the logical answer would be consolidation among the five big carriers. A new round of bankruptcies might even see one or more of a large airline's best bits sold off to a rival, or outright liquidations—steps that were largely avoided during the reorganizations that followed the 2001 terrorist attacks. Even after the capacity cutbacks spurred by crude oil's spike in the summer of 2008, many observers say far more—25% to 35% of the current capacity—must be removed before any meaningful profit-margin improvements will be realized.
"There are too many airlines," says Vicki Bryan, a senior bond analyst with Gimme Credit in New York. "Even last year when they were all just getting killed, slaughtered, massacred on fuel … the net reduction in capacity was just not significant."
Ownership Issues Coming to a Head
But airline consolidation remains a minefield that encroaches on union and political interests. Ditto for another potential source of capital, healthier European and Asian carriers. U.S. law restricts foreign airline ownership in U.S. carriers to a minority stake, but the International Air Transport Assn. and big European airlines have made that issue a central part of the debate over further liberalization in U.S.-European air links, with the matter coming to a head in 2010 when a second phase of the "Open Skies" treaty is set to be negotiated.
"From California to the eastern banks of Europe, this should be one market, and we should treat it as one market," Lufthansa (LHAG.DE) CEO Wolfgang Mayrhuber said Apr. 29 in a speech to the U.S. Chamber of Commerce in Washington. Lufthansa has been on the forefront of consolidation in Europe, taking controlling ownership since 2005 in various carriers: SWISS, Austrian, Belgian, and bmi, and a 19% stake in JetBlue (JBLU).
The long argument against foreign control of U.S. carriers, dating from the 1940s, has been based on national security and the government's ability to gain access to the civilian fleet in emergencies. Others worry that European or Asian operators would slash jobs and decline to serve small, less profitable U.S. cities. But nationalistic arguments may hold diminishing sway at a time when an Italian industrial group, Fiat (FIA.MI), is negotiating to acquire one of Detroit's iconic Big Three automakers, and the largest U.S. bank—Citigroup (C)—has sold a nearly 9% stake to investors in Abu Dhabi and Saudi Arabia.
Going Private Not Likely
One other option that might apply in other industries—going private—is unlikely to come to airlines. Jesup & Lamont analyst Helane Becker raised the question with United's management during a recent earnings call: With their public equity virtually worthless, why don't airlines seek funds from public debt? But to go private, airline executives would have to borrow heavily to buy their shares—and even if they did so, they'd be spending those funds on a severely distressed asset.
That's not a scenario lenders would care to see. As for an outside takeover, private equity firms have lost the financial firepower they deployed in 2006 and 2007 as the worldwide credit markets seized. And even if they had escaped the market collapse unscathed, an airline would be among the least favorable places to invest. Moreover, the legacy carriers already have substantial leverage on the books, leaving a takeover artist no space to add debt. "It becomes an opportunity cost, too," says Ben Baldanza, chief executive of privately held Spirit Airlines. "If you got a billion dollars are you going to go buy an airline?"
For cash-strapped airlines, the looming crisis could produce relief in many forms: a new European owner, a government-overseen industry consolidation that forces travelers to pay more, or the sort of terms that may make a large investment fund scramble for its checkbook. As recent history demonstrates, old problems in this environment have a way of attracting new solutions.
Bachman is deputy news director for BusinessWeek.com.
Friday, April 17, 2009
Will Southwest Lose Some of the LUV?
By WSJ Staff
Journal reporter Mike Esterl writes:Those famously cheerful smiles aboard Southwest Airlines could become a little more strained in the coming months.
The giant discount carrier has long had a feel-good vibe on board and at the check-in counter, partly because the company has never had layoffs in its 38-year history. Or any bankruptcy filings, which have caused other airlines to slash employee wages and benefits.
Southwest struck pay-hike deals with unions in recent weeks with a minimum of fuss. Contrast that with American Airlines, currently mired in protracted and poisoned negotiations with most of its workers.
But Southwest management is finding it tougher to be generous now that it has posted three straight quarterly net losses. On Thursday the airline said it plans to reduce staffing and will offer voluntary buy-outs, available to almost all of its 35,500 employees. It’s the third such offer in the past five years; a bit more than 1,600 took buyouts in 2004 and 2007.
CEO Gary Kelly, known for dressing up in funny outfits to keep spirits up at Southwest’s Love Field headquarters, says management hasn’t set a firm number for workers it must shed. Offer terms have not been made public and will reach employees in early May. But it’s quite possible a lot of them won’t be willing to walk in the midst of a prolonged recession.
That could force some tough decisions. Southwest management has long held that treating employees well means they’ll treat customers well and business will do well as a result, making shareholders happy.
Mr. Kelly says layoffs remain a last resort, but he also acknowledged in a conference call Thursday that all options are on the table during a dramatic downturn in travel.
Mr. Kelly said he could envision a scenario of forced layoffs if the company has to cut its fleet size by around 10%. Southwest isn’t there yet. But it has put fleet expansion plans on indefinite hold. That’s in contrast to previous industry downturns, when Southwest used the opportunity to aggressively gain market share. He also said if conditions continue to deteriorate, he could at some point ask workers for pay concessions.
Southwest’s overall cost structure remains low, thanks in part to the simplicity of its business model. But its labor costs — adjusted for capacity — were second only to American among 13 big carriers last September, according to the federal Bureau of Transportation. In the first quarter of this year, its workforce grew 2.1% and its labor costs rose 4.5% over the same period in 2008, even as capacity shrank 4.1% and revenue fell 6.8%.
Those kinds of numbers don’t usually put smiles on the face of shareholders or employees.
By WSJ Staff
Journal reporter Mike Esterl writes:Those famously cheerful smiles aboard Southwest Airlines could become a little more strained in the coming months.
The giant discount carrier has long had a feel-good vibe on board and at the check-in counter, partly because the company has never had layoffs in its 38-year history. Or any bankruptcy filings, which have caused other airlines to slash employee wages and benefits.
Southwest struck pay-hike deals with unions in recent weeks with a minimum of fuss. Contrast that with American Airlines, currently mired in protracted and poisoned negotiations with most of its workers.
But Southwest management is finding it tougher to be generous now that it has posted three straight quarterly net losses. On Thursday the airline said it plans to reduce staffing and will offer voluntary buy-outs, available to almost all of its 35,500 employees. It’s the third such offer in the past five years; a bit more than 1,600 took buyouts in 2004 and 2007.
CEO Gary Kelly, known for dressing up in funny outfits to keep spirits up at Southwest’s Love Field headquarters, says management hasn’t set a firm number for workers it must shed. Offer terms have not been made public and will reach employees in early May. But it’s quite possible a lot of them won’t be willing to walk in the midst of a prolonged recession.
That could force some tough decisions. Southwest management has long held that treating employees well means they’ll treat customers well and business will do well as a result, making shareholders happy.
Mr. Kelly says layoffs remain a last resort, but he also acknowledged in a conference call Thursday that all options are on the table during a dramatic downturn in travel.
Mr. Kelly said he could envision a scenario of forced layoffs if the company has to cut its fleet size by around 10%. Southwest isn’t there yet. But it has put fleet expansion plans on indefinite hold. That’s in contrast to previous industry downturns, when Southwest used the opportunity to aggressively gain market share. He also said if conditions continue to deteriorate, he could at some point ask workers for pay concessions.
Southwest’s overall cost structure remains low, thanks in part to the simplicity of its business model. But its labor costs — adjusted for capacity — were second only to American among 13 big carriers last September, according to the federal Bureau of Transportation. In the first quarter of this year, its workforce grew 2.1% and its labor costs rose 4.5% over the same period in 2008, even as capacity shrank 4.1% and revenue fell 6.8%.
Those kinds of numbers don’t usually put smiles on the face of shareholders or employees.
Monday, April 13, 2009
American Invests in Its Future With First Deliveries of New Boeing 737-800s
Despite Challenges, American Continues to Invest for the Long-Term With Fuel- Efficient Aircraft
Monday April 13, 2009, 12:30 pm EDT
CHICAGO and TULSA, Okla., April 13 /PRNewswire-FirstCall/ -- American Airlines today took an important step toward a significant investment in its long-term future by welcoming two Boeing 737-800 aircraft into its fleet on the eve of their maiden passenger flights.
As American begins the process of replacing its MD-80 fleet, employees, customers and public officials commemorated the arrival of its first new 737- 800s since December 2001 with ceremonies at company facilities in Chicago and Tulsa. The new airplanes, which go into service April 14, are the first of 76 737-800s that will arrive through the first quarter of 2011.
"Even as we battle many significant challenges, we must remain focused on our long-term future, which is what these new 737s represent," said Gerard Arpey, Chairman and CEO of AMR Corp., the parent company of American Airlines and American Eagle. "While our MD-80s remain an important part of our fleet and continue to serve our company and customers well, our new 737s are a vital investment that will benefit our customers, employees, shareholders and the communities we serve. They will help keep our product competitive while offering cost, environmental and operational benefits.
"With today's economic realities causing many companies, including American, to cut back, we must continue to find ways to control costs and boost revenues. While it is a big decision to spend money on new airplanes, especially in tough times, not doing so could be more expensive in the long run."
Arpey noted that the two locations chosen for today's ceremonial events also hold a special significance.
"Chicago, which is one of our vital network hubs, is where these two new airplanes -- and many other new 737s -- will be based," Arpey said. "Tulsa is one of our important maintenance bases and employment centers, and, unlike other airlines that outsource maintenance work and jobs, it is where our own employees will maintain and service these new airplanes for many years to come. This delivery represents the very essence of Made in America, Maintained by American."
AMR employs 7,000 people in Tulsa and 10,000 in Chicago, contributing $14.6 billion to the local economies of the two metropolitan areas.
In spite of an increasingly challenging credit market, Arpey noted that American has been fortunate to be able to secure financing commitments to cover the majority of its expected 737 deliveries. "With the financing commitments we have in place, we now have the ability to finance our expected 737 deliveries well into the fourth quarter of 2010, and we continue to pursue a number of additional financing opportunities," Arpey said.
The new airplanes, which will carry 160 passengers, offer many cost, environmental and customer benefits. They include numerous upgrades and enhancements from previous airplanes and a configuration aimed at improving the passenger experience and operational efficiency.
"Boeing is pleased to be a part of this new chapter in American Airlines history and we look forward to seeing these state-of-the-art airplanes in the skies," said Kevin Schemm, Vice President, North America Sales, Boeing Commercial Airplanes. "We're proud of the relationship we have with American Airlines, and we're excited about the superior product American's passengers will soon enjoy."
New First Class and coach seats will provide improved living space and comfort. In addition, new "big bins" for overhead storage will significantly increase passenger cabin luggage storage capacity by allowing roll-aboards to be loaded wheels first, increasing standard roll-aboards storage capacity by almost double.
Inflight entertainment will include 20 drop-down LCD monitors mounted in passenger service units under overhead storage bins. The new planes have 110V AC power available to all passengers -- a first in American Airlines fleet history and a customer convenience that ends the need for power adapters. Travelers can now plug in laptops and other portable electronic equipment just as they would at the home or office.
There is one power port per seat in First Class and two ports per three seats in coach class. Over time, American plans to equip these aircraft with AirCell's Gogo® Inflight Internet service, which will allow passengers to surf the Web, check e-mail, and send instant messages conveniently from the air.
The 737-800s will burn 35 percent less fuel than an MD-80 on a seat-mile basis. They will also be outfitted with Blended Winglets(TM), similar to those installed on American's current fleet. These wing tip extensions provide significant operating, fuel efficiency and environmental benefits, such as reduced noise on takeoff and approach and lower emissions through lower cruise thrust.
The new deliveries will be added to American's current fleet of 77 737- 800s and are intended to eventually replace American's fleet of approximately 270 MD-80s.
Despite Challenges, American Continues to Invest for the Long-Term With Fuel- Efficient Aircraft
Monday April 13, 2009, 12:30 pm EDT
CHICAGO and TULSA, Okla., April 13 /PRNewswire-FirstCall/ -- American Airlines today took an important step toward a significant investment in its long-term future by welcoming two Boeing 737-800 aircraft into its fleet on the eve of their maiden passenger flights.
As American begins the process of replacing its MD-80 fleet, employees, customers and public officials commemorated the arrival of its first new 737- 800s since December 2001 with ceremonies at company facilities in Chicago and Tulsa. The new airplanes, which go into service April 14, are the first of 76 737-800s that will arrive through the first quarter of 2011.
"Even as we battle many significant challenges, we must remain focused on our long-term future, which is what these new 737s represent," said Gerard Arpey, Chairman and CEO of AMR Corp., the parent company of American Airlines and American Eagle. "While our MD-80s remain an important part of our fleet and continue to serve our company and customers well, our new 737s are a vital investment that will benefit our customers, employees, shareholders and the communities we serve. They will help keep our product competitive while offering cost, environmental and operational benefits.
"With today's economic realities causing many companies, including American, to cut back, we must continue to find ways to control costs and boost revenues. While it is a big decision to spend money on new airplanes, especially in tough times, not doing so could be more expensive in the long run."
Arpey noted that the two locations chosen for today's ceremonial events also hold a special significance.
"Chicago, which is one of our vital network hubs, is where these two new airplanes -- and many other new 737s -- will be based," Arpey said. "Tulsa is one of our important maintenance bases and employment centers, and, unlike other airlines that outsource maintenance work and jobs, it is where our own employees will maintain and service these new airplanes for many years to come. This delivery represents the very essence of Made in America, Maintained by American."
AMR employs 7,000 people in Tulsa and 10,000 in Chicago, contributing $14.6 billion to the local economies of the two metropolitan areas.
In spite of an increasingly challenging credit market, Arpey noted that American has been fortunate to be able to secure financing commitments to cover the majority of its expected 737 deliveries. "With the financing commitments we have in place, we now have the ability to finance our expected 737 deliveries well into the fourth quarter of 2010, and we continue to pursue a number of additional financing opportunities," Arpey said.
The new airplanes, which will carry 160 passengers, offer many cost, environmental and customer benefits. They include numerous upgrades and enhancements from previous airplanes and a configuration aimed at improving the passenger experience and operational efficiency.
"Boeing is pleased to be a part of this new chapter in American Airlines history and we look forward to seeing these state-of-the-art airplanes in the skies," said Kevin Schemm, Vice President, North America Sales, Boeing Commercial Airplanes. "We're proud of the relationship we have with American Airlines, and we're excited about the superior product American's passengers will soon enjoy."
New First Class and coach seats will provide improved living space and comfort. In addition, new "big bins" for overhead storage will significantly increase passenger cabin luggage storage capacity by allowing roll-aboards to be loaded wheels first, increasing standard roll-aboards storage capacity by almost double.
Inflight entertainment will include 20 drop-down LCD monitors mounted in passenger service units under overhead storage bins. The new planes have 110V AC power available to all passengers -- a first in American Airlines fleet history and a customer convenience that ends the need for power adapters. Travelers can now plug in laptops and other portable electronic equipment just as they would at the home or office.
There is one power port per seat in First Class and two ports per three seats in coach class. Over time, American plans to equip these aircraft with AirCell's Gogo® Inflight Internet service, which will allow passengers to surf the Web, check e-mail, and send instant messages conveniently from the air.
The 737-800s will burn 35 percent less fuel than an MD-80 on a seat-mile basis. They will also be outfitted with Blended Winglets(TM), similar to those installed on American's current fleet. These wing tip extensions provide significant operating, fuel efficiency and environmental benefits, such as reduced noise on takeoff and approach and lower emissions through lower cruise thrust.
The new deliveries will be added to American's current fleet of 77 737- 800s and are intended to eventually replace American's fleet of approximately 270 MD-80s.
Wednesday, April 08, 2009
Continental Move to Star Alliance: Will it Heighten Competition with Delta?
April 8, 2009, 10:46 AM ET
By WSJ Staff
The U.S. Transportation Department on Tuesday gave Continental Airlines preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances, The Wall Street Journal reports.
Journal reporters Christopher Conkey and Paulo Prada write:
The administration’s decision will allow Continental to join the Star Alliance with UAL Corp.’s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.
But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.
The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn’t be reached to comment, says these alliances limit competition and hurt consumers.
A DOT spokesperson declined to comment on Mr. Oberstar’s proposal…
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta, which flies to many of the same markets in Europe and Latin America as Continental.
By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.
As we noted in a previous post, it’ll be interesting to watch how Continental’s move to the Star alliance will play out in the New York market. For instance, Delta recently has touted its promotional links to the New York Yankees and Mets, while it opted not to renew its sponsorship of the Atlanta Falcons. Some said part of that decision might be an effort at Delta to try to connect with Continental fliers — who frequent the carriers major New York-area hub in Newark and have gotten used to SkyTeam — and keep them from switching to Star with Continental.
April 8, 2009, 10:46 AM ET
By WSJ Staff
The U.S. Transportation Department on Tuesday gave Continental Airlines preliminary approval to join a global alliance that cooperates on scheduling and revenue sharing, a sign the Obama administration may not support a congressional effort to limit such alliances, The Wall Street Journal reports.
Journal reporters Christopher Conkey and Paulo Prada write:
The administration’s decision will allow Continental to join the Star Alliance with UAL Corp.’s United Airlines, Air Canada, Deutsche Lufthansa AG and other carriers. It also grants the alliance antitrust immunity, in essence giving the carriers permission to act as a single airline on international routes. The approval was expected and is consistent with policy under previous administrations.
But the Continental action comes as Rep. James Oberstar, a Minnesota Democrat who serves as chairman of the House Transportation and Infrastructure Committee, is pushing legislation that would curtail international airline alliances.
The agreements, especially when fortified by antitrust immunity, enable airlines to act in ways that would otherwise be considered collusive. Mr. Oberstar, who couldn’t be reached to comment, says these alliances limit competition and hurt consumers.
A DOT spokesperson declined to comment on Mr. Oberstar’s proposal…
For Houston-based Continental, the switch to the Star alliance will give it a bigger and more strategic role than it currently has in SkyTeam, where many of its routes overlapped with Delta, which flies to many of the same markets in Europe and Latin America as Continental.
By aligning itself with United, whose main international routes lie across the Pacific, and Lufthansa, one of the biggest carriers in Europe,the airline is expected to enjoy a greater volume of transfer traffic and broader international reach than it does now. Continental expects to make the switch to Star later this year, after it modifies sales and reservations systems so they can communicate directly with those of its new partners.
As we noted in a previous post, it’ll be interesting to watch how Continental’s move to the Star alliance will play out in the New York market. For instance, Delta recently has touted its promotional links to the New York Yankees and Mets, while it opted not to renew its sponsorship of the Atlanta Falcons. Some said part of that decision might be an effort at Delta to try to connect with Continental fliers — who frequent the carriers major New York-area hub in Newark and have gotten used to SkyTeam — and keep them from switching to Star with Continental.
Tuesday, April 07, 2009
Southwest Airlines set to upset its NYC rivals
Discount carrier offers low prices for its first routes from LaGuardia
By Christopher Hinton, MarketWatch
Last update: 12:27 p.m. EDT April 7, 2009
NEW YORK (MarketWatch) -- New Yorkers who make frequent flights to Chicago and Washington, D.C., are about to find themselves paying less for airfare.
On Tuesday, Dallas-based Southwest Airlines (LUV:
LUV 6.84, -0.50, -6.8%) said it would begin eight daily flights from New York City's LaGuardia Airport to Chicago Midway and Baltimore-Washington airports, beginning June 28.
The low-cost carrier also offered historically low ticket prices on its LaGuardia routes, with one-way flights to Chicago for $89 and to Baltimore-Washington for $49. That's bound to put pricing pressure on rivals like AMR Corp.'s American Airlines and UAL Corp.'s United.
UAUA 5.53, -0.33, -5.6%) United and JetBlue Airways.
Many carriers out of New York City have offered similar fares during sales over the past three months to increase demand in a recessionary economy, but the "Southwest effect" of bringing permanently lower prices is well known across the industry, analysts said.
"They most definitely bring in a lower cost structure," said Vaughn Cordle, chief analyst with AirlinesForecast LLC.
More groundbreaking have been Southwest's walkup fares for LaGuardia, priced "substantially lower" than competitors at a range of $225 to $425, according to Rick Seaney of Farecompare.com.
"This may be in part to compensate for the legacy airlines' advantage with frequent nonstops to several popular business destinations out of New York where Southwest must connect with a one-stop," Seaney said.
Southwest announced last year that it would purchase LaGuardia time slots from bankrupt ATA.
At the time, Chief Executive Gary Kelly said he was confident his airline could maintain its high standard for on-time efficiency despite the airport's reputation as a traffic bottleneck.
Shares of Southwest were down 6% at last check to $6.94. Christopher Hinton is a reporter for MarketWatch based in New York.
Discount carrier offers low prices for its first routes from LaGuardia
By Christopher Hinton, MarketWatch
Last update: 12:27 p.m. EDT April 7, 2009
NEW YORK (MarketWatch) -- New Yorkers who make frequent flights to Chicago and Washington, D.C., are about to find themselves paying less for airfare.
On Tuesday, Dallas-based Southwest Airlines (LUV:
LUV 6.84, -0.50, -6.8%) said it would begin eight daily flights from New York City's LaGuardia Airport to Chicago Midway and Baltimore-Washington airports, beginning June 28.
The low-cost carrier also offered historically low ticket prices on its LaGuardia routes, with one-way flights to Chicago for $89 and to Baltimore-Washington for $49. That's bound to put pricing pressure on rivals like AMR Corp.'s American Airlines and UAL Corp.'s United.
UAUA 5.53, -0.33, -5.6%) United and JetBlue Airways.
Many carriers out of New York City have offered similar fares during sales over the past three months to increase demand in a recessionary economy, but the "Southwest effect" of bringing permanently lower prices is well known across the industry, analysts said.
"They most definitely bring in a lower cost structure," said Vaughn Cordle, chief analyst with AirlinesForecast LLC.
More groundbreaking have been Southwest's walkup fares for LaGuardia, priced "substantially lower" than competitors at a range of $225 to $425, according to Rick Seaney of Farecompare.com.
"This may be in part to compensate for the legacy airlines' advantage with frequent nonstops to several popular business destinations out of New York where Southwest must connect with a one-stop," Seaney said.
Southwest announced last year that it would purchase LaGuardia time slots from bankrupt ATA.
At the time, Chief Executive Gary Kelly said he was confident his airline could maintain its high standard for on-time efficiency despite the airport's reputation as a traffic bottleneck.
Shares of Southwest were down 6% at last check to $6.94. Christopher Hinton is a reporter for MarketWatch based in New York.
Tuesday, March 31, 2009
Here is information to assist the (former TWA) AA flight Attendants who were recently furloughed again.
TIME IS OF THE ESSENCE, SO DO IT NOW! DO YOUR HOMEWORK AND READ EVERYTHING. ALL YOU NEED TO KNOW IS RIGHT HERE IN THESE LINKS.
PBGC Pension Benefit Guaranty Corp (USA)
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx
Links to HCTC Health Care Tax Credit
http://www.irs.gov/individuals/article/0,,id=109960,00.html
IRS Partial Coverage of Cobra
http://www.irs.gov/individuals/article/0,,id=109956,00.html
TIME IS OF THE ESSENCE, SO DO IT NOW! DO YOUR HOMEWORK AND READ EVERYTHING. ALL YOU NEED TO KNOW IS RIGHT HERE IN THESE LINKS.
PBGC Pension Benefit Guaranty Corp (USA)
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx
Links to HCTC Health Care Tax Credit
http://www.irs.gov/individuals/article/0,,id=109960,00.html
IRS Partial Coverage of Cobra
http://www.irs.gov/individuals/article/0,,id=109956,00.html
Friday, March 20, 2009
Seniority issue could be expensive for Delta
APSeniority issue could be expensive for Delta
Friday March 20, 5:00 pm ET
Seniority issues could force Delta Air Lines to hire workers it doesn't need
ATLANTA (AP) -- Delta Air Lines may be in the costly position of hiring employees it ideally wouldn't need, spending precious cash the carrier wants to preserve in the uncertain economy.
That's because two key work groups haven't resolved seniority issues resulting from the combination of Delta and Northwest Airlines into the world's biggest airline operator.
Seniority determines schedules, vacations, work rules and the way employees bid for flights. Pilots have a merged seniority list and joint contract, but flight attendants and ground workers, such as baggage handlers and reservation agents, don't.
In April, Delta will begin flying its planes in Northwest markets and vice versa. This cross-fleeting is about using the right size aircraft on a specific route based on the demand in that market, and Delta has said one of the key benefits of its acquisition of Northwest was the flexibility to use each carrier's aircraft on the other's routes.
However, flight attendants from one carrier won't be able to work on the other's aircraft because of outstanding seniority and representation issues.
For example, a new international flight on a pre-merger Delta aircraft may require flight attendants who speak a particular language. If Delta attendants aren't available, the airline may need to hire people with that capability even if pre-merger Northwest flight attendants who spoke the language were available. And Delta wouldn't necessarily switch to a Northwest aircraft on that route because it may be inefficient to do so.
Delta currently can't estimate the cost, and experts won't speculate without wage data from the airline and the number of employees to be hired.
Passengers may not notice much right away, but eventually friction between workers could affect morale and, perhaps, hurt customer service.
Jerry Glass, a former US Airways executive who is now president of human resources and labor-management relations consulting firm F&H Solutions Group, said Delta wants to resolve seniority for business reasons, and customer service is a part of that.
If there is a lengthy battle over seniority at Delta "there may be enhancements they want to make that may take them longer and there may be workarounds they may have to do to get that completed," Glass said.
Delta has publicly urged the two groups to resolve the integration of the seniority lists soon. Unions that represent the flight attendants, baggage handlers and reservation agents who worked for Northwest before the Oct. 29 buyout have resisted.
APSeniority issue could be expensive for Delta
Friday March 20, 5:00 pm ET
Seniority issues could force Delta Air Lines to hire workers it doesn't need
ATLANTA (AP) -- Delta Air Lines may be in the costly position of hiring employees it ideally wouldn't need, spending precious cash the carrier wants to preserve in the uncertain economy.
That's because two key work groups haven't resolved seniority issues resulting from the combination of Delta and Northwest Airlines into the world's biggest airline operator.
Seniority determines schedules, vacations, work rules and the way employees bid for flights. Pilots have a merged seniority list and joint contract, but flight attendants and ground workers, such as baggage handlers and reservation agents, don't.
In April, Delta will begin flying its planes in Northwest markets and vice versa. This cross-fleeting is about using the right size aircraft on a specific route based on the demand in that market, and Delta has said one of the key benefits of its acquisition of Northwest was the flexibility to use each carrier's aircraft on the other's routes.
However, flight attendants from one carrier won't be able to work on the other's aircraft because of outstanding seniority and representation issues.
For example, a new international flight on a pre-merger Delta aircraft may require flight attendants who speak a particular language. If Delta attendants aren't available, the airline may need to hire people with that capability even if pre-merger Northwest flight attendants who spoke the language were available. And Delta wouldn't necessarily switch to a Northwest aircraft on that route because it may be inefficient to do so.
Delta currently can't estimate the cost, and experts won't speculate without wage data from the airline and the number of employees to be hired.
Passengers may not notice much right away, but eventually friction between workers could affect morale and, perhaps, hurt customer service.
Jerry Glass, a former US Airways executive who is now president of human resources and labor-management relations consulting firm F&H Solutions Group, said Delta wants to resolve seniority for business reasons, and customer service is a part of that.
If there is a lengthy battle over seniority at Delta "there may be enhancements they want to make that may take them longer and there may be workarounds they may have to do to get that completed," Glass said.
Delta has publicly urged the two groups to resolve the integration of the seniority lists soon. Unions that represent the flight attendants, baggage handlers and reservation agents who worked for Northwest before the Oct. 29 buyout have resisted.
Wednesday, March 11, 2009
Vital information for former TWA flight attendants getting furloughed for the second time at American Airlines on April 1, 2009
If you have a Verizon Wireless card and only Verizon...You can mothball (turnoff with no payment due) your Broadband card for three months by calling Verizon. The fee is $15.00 and your wireless card will be mothballed for three months.
BEFORE THE END OF THE THREE MONTHS YOU CAN CALL AGAIN, pay the $15.00 fee again and mothball your card for another three months for a total of six months AND you can convert your wireless account to a family plan...and get out of the contract, by adding an additional phone for $9.99 a month to a qualifying account. If you have a used cell they can activate that or you can but a cheapie from Verizon and activate that for a small fee.
All the info we need to process out is available on the flight service website. As much as we are all disgusted with this nonsense, take care of your stuff NOW and do NOT wait till the end of the month.AA will send you the form for deciding what coverage you want if you choose Cobra.
I am wearing my TWA wings on my uniform till the last trip.
HCTC Latest News, Overview and Background
http://www.irs.gov/individuals/article/0,,id=109960,00.html
PBGC link
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx
What is the HCTC and who is eligible?
The Health Coverage Tax Credit (HCTC) is an important benefit that pays 80% of a qualified health plan premium for eligible individuals. The HCTC is a unique tax credit that individuals can receive either monthly as their health plan premium becomes due or yearly as a credit on their federal tax return.
The Internal Revenue Service (IRS) administers the HCTC. The following individuals are potentially eligible for the tax credit:
1. Pension Benefit Guaranty Corporation (PBGC) pension recipients who are at least 55 years old
What is the monthly HCTC?
Most tax credits are paid out when you file your federal taxes. However, health plan premiums can be expensive and some people need help to pay them each month as they become due instead of when they file their taxes.
The monthly HCTC allows you to receive the HCTC in the form of a payment to your health plan on a monthly basis as your premium payments become due after you have paid your portions of the health insurance premiums to the HCTC Program.
What is the yearly HCTC?
The yearly HCTC is paid out when you file your federal taxes. You must complete and submit IRS Form 8885, Health Coverage Tax Credit, to claim the yearly HCTC on your federal tax return. The instructions on the form provide guidance on who may claim the HCTC and what documents you must provide with IRS Form 8885.
If you do not have all the required documents, you may not receive the HCTC as a refund or a credit against any taxes you owe. You can get IRS form 8885 on the IRS website or by calling the IRS at 1-800-TAX-FORM
If you have a Verizon Wireless card and only Verizon...You can mothball (turnoff with no payment due) your Broadband card for three months by calling Verizon. The fee is $15.00 and your wireless card will be mothballed for three months.
BEFORE THE END OF THE THREE MONTHS YOU CAN CALL AGAIN, pay the $15.00 fee again and mothball your card for another three months for a total of six months AND you can convert your wireless account to a family plan...and get out of the contract, by adding an additional phone for $9.99 a month to a qualifying account. If you have a used cell they can activate that or you can but a cheapie from Verizon and activate that for a small fee.
All the info we need to process out is available on the flight service website. As much as we are all disgusted with this nonsense, take care of your stuff NOW and do NOT wait till the end of the month.AA will send you the form for deciding what coverage you want if you choose Cobra.
The IRS adminsters the tax credit for the HCTC, not the PBGC!
IF YOU ARE OVER 55 AND COLLECTING FROM THE PBGC, THE IRS administers the tax credit covering 80% OF THE COBRA COST FOR life...NOT THE RECENT OBAMA PLAN WHICH COVERS ONLY 9 MONTHS. DO YOUR HOMEWORK. HERE ARE THE SITES FOR THE PBGC AND THE HCTC FOR THE COBRA 80% COVERAGE OF THE INSURANCE PREMIMUM. (insurance only) WE ARE ALL IN THIS TOGETHER.I am wearing my TWA wings on my uniform till the last trip.
HCTC Latest News, Overview and Background
http://www.irs.gov/individuals/article/0,,id=109960,00.html
PBGC link
https://egov3.pbgc.gov/mypba/login.aspx?ReturnUrl=%2fmypba%2fprivate%2fcustomer%2fhome.aspx
What is the HCTC and who is eligible?
The Health Coverage Tax Credit (HCTC) is an important benefit that pays 80% of a qualified health plan premium for eligible individuals. The HCTC is a unique tax credit that individuals can receive either monthly as their health plan premium becomes due or yearly as a credit on their federal tax return.
The Internal Revenue Service (IRS) administers the HCTC. The following individuals are potentially eligible for the tax credit:
1. Pension Benefit Guaranty Corporation (PBGC) pension recipients who are at least 55 years old
What is the monthly HCTC?
Most tax credits are paid out when you file your federal taxes. However, health plan premiums can be expensive and some people need help to pay them each month as they become due instead of when they file their taxes.
The monthly HCTC allows you to receive the HCTC in the form of a payment to your health plan on a monthly basis as your premium payments become due after you have paid your portions of the health insurance premiums to the HCTC Program.
What is the yearly HCTC?
The yearly HCTC is paid out when you file your federal taxes. You must complete and submit IRS Form 8885, Health Coverage Tax Credit, to claim the yearly HCTC on your federal tax return. The instructions on the form provide guidance on who may claim the HCTC and what documents you must provide with IRS Form 8885.
If you do not have all the required documents, you may not receive the HCTC as a refund or a credit against any taxes you owe. You can get IRS form 8885 on the IRS website or by calling the IRS at 1-800-TAX-FORM
Tuesday, March 10, 2009
American Airlines furloughs 323 more flight attendants April 1. 87 jobs saved, all involved are former TWA flight attendants
American Airlines Inc. plans to furlough up to 323 flight attendants April 1 as it did not get enough volunteers to take leaves, early departures or other steps to reduce their ranks.
The Association of Professional Flight Attendants informed its members Wednesday afternoon via a hotline message that it learned of the impending layoffs from Lauri Curtis, American's vice president of flight service.
Curtis had advised the union "that, despite the attempts over the last several months to accommodate the flight attendant manning overages caused by schedule reductions and reduced passenger loads, the company has been unable to sufficiently absorb the expected additional flight attendant headcount," the union said.
"It is therefore notifying the 410 most junior of our members that they are subject to furlough effective April 1, 2009," the union said.
American spokeswoman Sue Gordon said the potential furloughs are the result of less attrition than usual, not an effort by American to cut more jobs and capacity.
The airline had hoped to attract enough volunteers in January to avoid layoffs, she said. The airline had offered leaves of absence, travel privileges for people quitting and partnership flying – the sharing of one job by two flight attendants.
However, the airline hasn't been getting the number of requests for short-term leaves, retirements or resignations that it usually gets, and Gordon attributed it to the poor economy.
"The environment is changing rapidly," she said. "People are choosing to stay employed longer than we would have historically seen in terms of retirements and resignations. I think the economy is playing a factor where people are making different choices than they may have under a different economic environment."
The union also said American has agreed to give furloughed flight attendants an extra two years in which they have the right to be recalled by the airline.
American Airlines Inc. plans to furlough up to 323 flight attendants April 1 as it did not get enough volunteers to take leaves, early departures or other steps to reduce their ranks.
The Association of Professional Flight Attendants informed its members Wednesday afternoon via a hotline message that it learned of the impending layoffs from Lauri Curtis, American's vice president of flight service.
Curtis had advised the union "that, despite the attempts over the last several months to accommodate the flight attendant manning overages caused by schedule reductions and reduced passenger loads, the company has been unable to sufficiently absorb the expected additional flight attendant headcount," the union said.
"It is therefore notifying the 410 most junior of our members that they are subject to furlough effective April 1, 2009," the union said.
American spokeswoman Sue Gordon said the potential furloughs are the result of less attrition than usual, not an effort by American to cut more jobs and capacity.
The airline had hoped to attract enough volunteers in January to avoid layoffs, she said. The airline had offered leaves of absence, travel privileges for people quitting and partnership flying – the sharing of one job by two flight attendants.
However, the airline hasn't been getting the number of requests for short-term leaves, retirements or resignations that it usually gets, and Gordon attributed it to the poor economy.
"The environment is changing rapidly," she said. "People are choosing to stay employed longer than we would have historically seen in terms of retirements and resignations. I think the economy is playing a factor where people are making different choices than they may have under a different economic environment."
The union also said American has agreed to give furloughed flight attendants an extra two years in which they have the right to be recalled by the airline.
Tuesday, February 24, 2009
AP
Sullenberger: Pay cuts driving out best pilots
Tuesday February 24, 11:57 am ET
By Joan Lowy and Michael J. Sniffen, Associated Press Writers
US Airways pilot Sullenberger says pay, benefit cuts are driving out experienced pilots
WASHINGTON (AP) -- The pilot who safely ditched a jetliner in New York's Hudson River said Tuesday that pay and benefit cuts are driving experienced pilots from careers in the cockpit.
US Airways pilot Chesley "Sully" Sullenberger told the House aviation subcommittee that his pay has been cut 40 percent in recent years and his pension has been terminated and replaced with a promise "worth pennies on the dollar" from the federally created Pension Benefit Guaranty Corp. These cuts followed a wave of airline bankruptcies after the Sept. 11, 2001, terrorist attacks compounded by the current recession, he said.
"The bankruptcies were used to by some as a fishing expedition to get what they could not get in normal times," Sullenberger said of the airlines. He said the problems began with the deregulation of the industry in the 1970s.
The reduced compensation has placed "pilots and their families in an untenable financial situation," Sullenberger said. "I do not know a single, professional airline pilot who wants his or her children to follow in their footsteps."
The subcommittee of the House Transportation and Infrastructure Committee heard from the crew of Flight 1549, the air traffic controller who handled the flight and aviation experts to examine what safety lessons could be learned from the Jan. 15 accident which all 155 people aboard survived.
Sullenberger's copilot Jeffrey B. Skiles said unless federal laws are revised to improve labor-management relations "experienced crews in the cockpit will be a thing of the past." And Sullenberger added that without experienced pilots "we will see negative consequences to the flying public."
Sullenberger himself has started a consulting business to help make ends meet. Skiles added, "For the last six years, I have worked seven days a week between my two jobs just to maintain a middle class standard of living."
The air traffic controller who handled Flight 1549 said thought he was hearing a death sentence when Sullenberger radioed that he was ditching in the Hudson.
"I believed at that moment I was going to be the last person to talk to anyone on that plane alive," controller Patrick Harten testified in his first public description of his reactions to last month's miracle landing.
"People don't survive landings on the Hudson River. I thought it was his own death sentence," the 10-year veteran controller testified.
But Sullenberger safely glided the Airbus A320 into the river after it collided with birds and lost power in both engines.
Harten, who has spent his entire career at the radar facility in Westbury, N.Y., that handles air traffic within 40 miles of three major airports, struggled vainly to help get the airliner safely to a landing strip.
Making lightning-quick decisions, Harten communicated with 14 other entities in the three minutes after the bird strike as he diverted other aircraft and advised controllers elsewhere to hold aircraft and clear runways for 1549.
First, Harten tried to return the plane to LaGuardia Airport, asking the airport's tower to clear runway 13. But Sullenberger calmly reported: "We're unable."
Then Harten offered another LaGuardia runway. Again, Sullenberger reported, "Unable." He said he might be able to make Teterboro Airport in New Jersey.
But when Harten directed Sullenberger to turn onto a heading for Teterboro, the pilot responded: "We can't do it .... We're going to be in the Hudson."
"I asked him to repeat himself even though I heard him just fine," said Harten. "I simply could not wrap my mind around those words."
At that moment, Harten said he lost radio contact with flight and was certain it "had gone down."
Afterward, Harten said he told his wife, "I felt like I had been hit by a bus."
NTSB investigators have said bird remains found in both engines of the downed plane have been identified as Canada geese.
Sullenberger and Skiles said anyone who's spent much time in cockpits has encountered bird strikes but that this one was exceptionally severe in knocking out both engines. Some gulls don't even dent the airplane, Skiles said, but this "was a bigger bird than I've ever hit before."
The crew and passengers of a helicopter that crashed en route to an oil platform on Jan. 4 weren't as lucky. The National Transportation Safety Board reported Monday that investigators have found evidence birds were involved in the accident near Morgan City, La., that killed eight of nine people aboard.
Sullenberger: Pay cuts driving out best pilots
Tuesday February 24, 11:57 am ET
By Joan Lowy and Michael J. Sniffen, Associated Press Writers
US Airways pilot Sullenberger says pay, benefit cuts are driving out experienced pilots
WASHINGTON (AP) -- The pilot who safely ditched a jetliner in New York's Hudson River said Tuesday that pay and benefit cuts are driving experienced pilots from careers in the cockpit.
US Airways pilot Chesley "Sully" Sullenberger told the House aviation subcommittee that his pay has been cut 40 percent in recent years and his pension has been terminated and replaced with a promise "worth pennies on the dollar" from the federally created Pension Benefit Guaranty Corp. These cuts followed a wave of airline bankruptcies after the Sept. 11, 2001, terrorist attacks compounded by the current recession, he said.
"The bankruptcies were used to by some as a fishing expedition to get what they could not get in normal times," Sullenberger said of the airlines. He said the problems began with the deregulation of the industry in the 1970s.
The reduced compensation has placed "pilots and their families in an untenable financial situation," Sullenberger said. "I do not know a single, professional airline pilot who wants his or her children to follow in their footsteps."
The subcommittee of the House Transportation and Infrastructure Committee heard from the crew of Flight 1549, the air traffic controller who handled the flight and aviation experts to examine what safety lessons could be learned from the Jan. 15 accident which all 155 people aboard survived.
Sullenberger's copilot Jeffrey B. Skiles said unless federal laws are revised to improve labor-management relations "experienced crews in the cockpit will be a thing of the past." And Sullenberger added that without experienced pilots "we will see negative consequences to the flying public."
Sullenberger himself has started a consulting business to help make ends meet. Skiles added, "For the last six years, I have worked seven days a week between my two jobs just to maintain a middle class standard of living."
The air traffic controller who handled Flight 1549 said thought he was hearing a death sentence when Sullenberger radioed that he was ditching in the Hudson.
"I believed at that moment I was going to be the last person to talk to anyone on that plane alive," controller Patrick Harten testified in his first public description of his reactions to last month's miracle landing.
"People don't survive landings on the Hudson River. I thought it was his own death sentence," the 10-year veteran controller testified.
But Sullenberger safely glided the Airbus A320 into the river after it collided with birds and lost power in both engines.
Harten, who has spent his entire career at the radar facility in Westbury, N.Y., that handles air traffic within 40 miles of three major airports, struggled vainly to help get the airliner safely to a landing strip.
Making lightning-quick decisions, Harten communicated with 14 other entities in the three minutes after the bird strike as he diverted other aircraft and advised controllers elsewhere to hold aircraft and clear runways for 1549.
First, Harten tried to return the plane to LaGuardia Airport, asking the airport's tower to clear runway 13. But Sullenberger calmly reported: "We're unable."
Then Harten offered another LaGuardia runway. Again, Sullenberger reported, "Unable." He said he might be able to make Teterboro Airport in New Jersey.
But when Harten directed Sullenberger to turn onto a heading for Teterboro, the pilot responded: "We can't do it .... We're going to be in the Hudson."
"I asked him to repeat himself even though I heard him just fine," said Harten. "I simply could not wrap my mind around those words."
At that moment, Harten said he lost radio contact with flight and was certain it "had gone down."
Afterward, Harten said he told his wife, "I felt like I had been hit by a bus."
NTSB investigators have said bird remains found in both engines of the downed plane have been identified as Canada geese.
Sullenberger and Skiles said anyone who's spent much time in cockpits has encountered bird strikes but that this one was exceptionally severe in knocking out both engines. Some gulls don't even dent the airplane, Skiles said, but this "was a bigger bird than I've ever hit before."
The crew and passengers of a helicopter that crashed en route to an oil platform on Jan. 4 weren't as lucky. The National Transportation Safety Board reported Monday that investigators have found evidence birds were involved in the accident near Morgan City, La., that killed eight of nine people aboard.
Friday, February 20, 2009
February 20, 2009, 9:04 am
More Passengers With Issues + Longer Flights = More In-Flight Medical Problems
Posted by Matt Phillips
Medical events in the cabins of commercial carriers are increasing in frequency as more people with medical conditions travel, the British medical journal the Lancet reports.
An article by Danielle Silverman and Mark Gendreau in the journal’s current issue — the article reviews the literature on air travel and illness — says flights are associated with a number of health issues including venous thromboembolism, or blood clots in veins, cosmic-radiation exposure, jet lag, and cabin-air quality. Also, according to the article summary: “In-flight medical events are increasingly frequent because a growing number of individuals with pre-existing medical conditions travel by air.”
The BBC took a closer look at the article. Here are some of the more interesting items the venerable British news agency spotlighted: Several outbreaks of “serious infections such as influenza, measles, severe acute respiratory syndrome (Sars) and tuberculosis have been reported on commercial flights. However, risk of on-board transmission, the researchers noted, is mainly restricted to within two rows of the passenger carrying the infection.” Keep that in mind next time you find yourself sharing a seat with someone with a nonstop cough. (The BBC also quoted Dr. Ray Johnston, head of the UK’s Civil Aviation Authority’s Aviation Health Unit who said that while there has been a rise in recent years in the number of on-board medical emergencies “aviation still has an excellent safety record.”)
On a more serious note, the research clearly shows a link between air travel and venous thromboembolism (VTE), dangerous blood clots:
Some 75% of air-travel cases of VTE have been linked to lack of movement while on board - although economy passengers are no more likely to develop clots than their counterparts in business, the review found.
Risk was at its highest in flights of eight hours or more, but one study found the risk started to climb at four hours, the Lahey Clinic Medical Center team, led by Dr. Mark Gendreau, found.
The best ways to avoid clots include changing position regularly, walking through the cabin and performing calf exercises. (How much can you calf press?) Also, stay hydrated. No excuses. That means planning ahead if your carrier charges for water.
More Passengers With Issues + Longer Flights = More In-Flight Medical Problems
Posted by Matt Phillips
Medical events in the cabins of commercial carriers are increasing in frequency as more people with medical conditions travel, the British medical journal the Lancet reports.
An article by Danielle Silverman and Mark Gendreau in the journal’s current issue — the article reviews the literature on air travel and illness — says flights are associated with a number of health issues including venous thromboembolism, or blood clots in veins, cosmic-radiation exposure, jet lag, and cabin-air quality. Also, according to the article summary: “In-flight medical events are increasingly frequent because a growing number of individuals with pre-existing medical conditions travel by air.”
The BBC took a closer look at the article. Here are some of the more interesting items the venerable British news agency spotlighted: Several outbreaks of “serious infections such as influenza, measles, severe acute respiratory syndrome (Sars) and tuberculosis have been reported on commercial flights. However, risk of on-board transmission, the researchers noted, is mainly restricted to within two rows of the passenger carrying the infection.” Keep that in mind next time you find yourself sharing a seat with someone with a nonstop cough. (The BBC also quoted Dr. Ray Johnston, head of the UK’s Civil Aviation Authority’s Aviation Health Unit who said that while there has been a rise in recent years in the number of on-board medical emergencies “aviation still has an excellent safety record.”)
On a more serious note, the research clearly shows a link between air travel and venous thromboembolism (VTE), dangerous blood clots:
Some 75% of air-travel cases of VTE have been linked to lack of movement while on board - although economy passengers are no more likely to develop clots than their counterparts in business, the review found.
Risk was at its highest in flights of eight hours or more, but one study found the risk started to climb at four hours, the Lahey Clinic Medical Center team, led by Dr. Mark Gendreau, found.
The best ways to avoid clots include changing position regularly, walking through the cabin and performing calf exercises. (How much can you calf press?) Also, stay hydrated. No excuses. That means planning ahead if your carrier charges for water.
Airlines see largest employment drop in five years
The Business Review (Albany)
Full-time employment at Frontier Airlines declined 15.7 percent between December 2007 and the same month on 2008, the steepest drop of 14 large and low-cost airlines, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics.
The overall full-time employment decrease of seven low-cost airlines over that period was 3.3 percent, the BTS said in its monthly “Passenger Airline Employment Data.”
For seven larger, “network” airlines, the decrease was 6.3 percent.
Southwest Airlines, the largest carrier at Albany International Airport, had 35,499 full-time quivalent employees at the end of 2008, putting it in the top of the seven low-cost carriers on the BTS list.
BTS counted two part-time employees as a single full-time worker.
Among seven “network” airlines, United saw the biggest employee reduction, 12.7 percent, between the two Decembers, BTS said, followed by Northwest Airlines (6.9 percent) and Delta Air Lines (6.2 percent). Northwest and Delta (NYSE: DAL) are combining operations. Both serve Albany International Airport.
Overall — among large, low-cost and smaller regional airlines — employment levels experienced their largest year-to-year decrease since December 2003, BTS said.
Employment levels dropped 6.7 percent in December 2008 compared to the same month in 2007, the sixth straight decline in full-time equivalent rates compared to the same month the previous year.
The Business Review (Albany)
Full-time employment at Frontier Airlines declined 15.7 percent between December 2007 and the same month on 2008, the steepest drop of 14 large and low-cost airlines, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics.
The overall full-time employment decrease of seven low-cost airlines over that period was 3.3 percent, the BTS said in its monthly “Passenger Airline Employment Data.”
For seven larger, “network” airlines, the decrease was 6.3 percent.
Southwest Airlines, the largest carrier at Albany International Airport, had 35,499 full-time quivalent employees at the end of 2008, putting it in the top of the seven low-cost carriers on the BTS list.
BTS counted two part-time employees as a single full-time worker.
Among seven “network” airlines, United saw the biggest employee reduction, 12.7 percent, between the two Decembers, BTS said, followed by Northwest Airlines (6.9 percent) and Delta Air Lines (6.2 percent). Northwest and Delta (NYSE: DAL) are combining operations. Both serve Albany International Airport.
Overall — among large, low-cost and smaller regional airlines — employment levels experienced their largest year-to-year decrease since December 2003, BTS said.
Employment levels dropped 6.7 percent in December 2008 compared to the same month in 2007, the sixth straight decline in full-time equivalent rates compared to the same month the previous year.
Thursday, February 19, 2009
February 19, 2009, 10:22 am
Southwest Takes Aim at Boston Logan
Posted by Matt Phillips
With its announcement last night that it will start service to Boston’s Logan International Airport, it seems like Southwest is continuing to shift its focus from secondary airports into the heart the country’s major hubs.
Southwest says it intends to start service to Logan International this fall. The carrier has not released specific details of new service, saying only that it will start with a “conservative number of flights that will complement its 64 airport network.”
Southwest’s plans for Boston are only its latest foray into primary airports in major markets. In November, Southwest announced plans to begin service to and from New York’s LaGuardia airport, bidding $7.5 million to purchase defunct carrier ATA Airlines’ takeoff and landing spots at LGA. Southwest also plans to add service at Minneapolis this year, as well as Canada and Mexico through partnerships with other airlines.
Such moves reinforce the sense that CEO Gary Kelly is running a very different airline from the one fashioned by Southwest’s co-founder, Herb Kelleher.
Kelly hasn’t been afraid to tear up the old Southwest playbook by attacking competitors’ fortress hubs, such as Philadelphia, Denver and Minneapolis, something Kelleher generally avoided. He also has explored code-sharing to a greater extent.
“This is another step back in a long line of moves that changes Southwest’s historical business model,” wrote aviation consultant Scott Hamilton, of Leeham Co., in an e-mail to the Terminal. “Southwest used to avoid big city, congested airports and/or hubs of other airlines by focusing on secondary airports. It’s run out of secondary airport and now has no choice but to go into the big-city airports. With rising labor costs—Southwest now has one of the highest labor costs-to-expenses in the industry—Southwest has to go where the passengers are chasing revenue.”
Southwest Takes Aim at Boston Logan
Posted by Matt Phillips
With its announcement last night that it will start service to Boston’s Logan International Airport, it seems like Southwest is continuing to shift its focus from secondary airports into the heart the country’s major hubs.
Southwest says it intends to start service to Logan International this fall. The carrier has not released specific details of new service, saying only that it will start with a “conservative number of flights that will complement its 64 airport network.”
Southwest’s plans for Boston are only its latest foray into primary airports in major markets. In November, Southwest announced plans to begin service to and from New York’s LaGuardia airport, bidding $7.5 million to purchase defunct carrier ATA Airlines’ takeoff and landing spots at LGA. Southwest also plans to add service at Minneapolis this year, as well as Canada and Mexico through partnerships with other airlines.
Such moves reinforce the sense that CEO Gary Kelly is running a very different airline from the one fashioned by Southwest’s co-founder, Herb Kelleher.
Kelly hasn’t been afraid to tear up the old Southwest playbook by attacking competitors’ fortress hubs, such as Philadelphia, Denver and Minneapolis, something Kelleher generally avoided. He also has explored code-sharing to a greater extent.
“This is another step back in a long line of moves that changes Southwest’s historical business model,” wrote aviation consultant Scott Hamilton, of Leeham Co., in an e-mail to the Terminal. “Southwest used to avoid big city, congested airports and/or hubs of other airlines by focusing on secondary airports. It’s run out of secondary airport and now has no choice but to go into the big-city airports. With rising labor costs—Southwest now has one of the highest labor costs-to-expenses in the industry—Southwest has to go where the passengers are chasing revenue.”
Friday, January 16, 2009
Delta’s Paint Job on Northwest 747-400
Posted by Matt Phillips
Posted by Matt Phillips
See the Northwest 747-400 painted in 3.5 minutes to Delta livery
Judging from the sheer number of comments to our paltry post on Delta dipping the first of Northwest’s red-tailed 747-400s in Delta blue, we figured we’d follow up a little and offer a new picture, which Delta posted in its Flickr pool. (As a side note, the Middle Seat Terminal has one too. And we need more people to contribute.) One of our commenteers on that previous post raised the issue of whether it might be tricky for Air Traffic Control to keep Delta and Northwest flights straight as the two gradual become one “new” Delta. “I wonder how much confusion this will cause when ATC tells pilots to look for an NWA aircraft which may or may not be painted in Delta colors.
I guess the controllers will have to ask what paint scheme the [aircraft] has,” wrote one commenter, who identified himself as “Bob the NWA Pilot.” As it turns out, the John Croft over at FlightGlobal wrote a bit about that not too long ago:
Until the merging operating certificates under the Delta banner is complete, pilots and controllers handling Northwest flights will continue to use the “Northwest” aircraft call sign and the “NWA” three-letter identifier in flight plan, regardless of the paint scheme of the aircraft, says the FAA.
The policy calls for pilots of flights carrying Northwest call signs but painted in Delta colours to include the phrase “Delta colours” at the end of certain radio calls and on written flight plans.
FAA says the temporary policy, effective for one year starting 14 December, is required to avoid confusion when Delta and Northwest aircraft “are communicating with air traffic control but are not painted in the colours of the airline matching the call sign they are using.”
FAA says the temporary policy, effective for one year starting 14 December, is required to avoid confusion when Delta and Northwest aircraft “are communicating with air traffic control but are not painted in the colours of the airline matching the call sign they are using.”
Ah the joys of merging. For more on other aspects of operations that can get tangled when two airlines decided to tie the knot, check out this post that follows .....
Five Issues Delta-Northwest Marriage Could Face
Posted by Matt Phillips
Posted by Matt Phillips
It’s well established that airline mergers aren’t always smooth affairs. Here are five things that the executives tasked with creating a “new” Delta out of the Atlanta-based carrier and Northwest have likely been considering for months — and why travelers should care.
Reservation glitches: Merging hundreds of routes and reservations is no easy task. It took quite a while for US Airways, which merged with America West back in 2005, to straighten out its schedule.
Back in October 2007, Scott wrote a column in which US Airways CEO Doug Parker said some issues arose as a result of an effort to unify US Airways and America West’s reservation system. “Reservations were lost, flights were delayed and many customers fumed in long lines. For many months, US Airways had two separate check-in lines depending on whether your reservation was made through the old US Airways system or the America West system,” Scott wrote.
Pilot issues: In past mergers, seniority integration has been a major sticking point leading to litigation and years of bad feelings. (Seniority determines pay and schedules for pilots.) Some Northwest pilots have been around long enough to remember the hostility that followed that carrier’s 1986 acquisition of Republic Airlines. The deal doubled Northwest’s size, but the integration led to months of lost baggage and years of worker infighting. Senior pilots at the airline still identify themselves as “red book,” meaning they were covered by the old Northwest contract, or “green book,” Republic’s contract. Why should you care?
Well, back in 1999, after American Airlines acquired tiny Reno Air, an integration dispute triggered an illegal pilot sickout that disrupted travel nationwide for 11 days. As Susan Carey and Paulo Prada wrote in the Journal, this is one issue in the Delta/Northwest tie-up that isn’t yet resolved. But Delta’s 6,000 pilots and Northwest’s 5,000 already have voted for a common labor contract and agreed to abide by an arbitrator’s ruling if they can’t agree by next month.
Cranky Workers: Poor customer service has been a problem with airline mergers before. Generally speaking, the ongoing uncertainty of mergers can sap employee morale. (After all, one rationale behind combining two airlines — cost savings — often translates into job cuts.) The list of potential merger problems can seem endless. For instance, during the US Airways/America West integration, one sticking point was how empty seats on flights were given to employees. America West employees got to ride in empty seats on a first-come, first-served basis, while US Airways, employees got seats based on seniority. While this might seem like inside baseball, all these issues play a role in employee attitudes, and consequently, passengers’ experience with those employees.
Generalized confusion: As Northwest joins Piedmont, AirCal, Republic, and Mohawk in the great airline-brand scrapyard in the sky, it’s crucial that the “new” Delta makes it clear which airline’s terminals, gates and check-in counters will be in use for customers. It sounds simple, but sometimes airlines can take an extremely long time to iron this stuff out. In a November 2006 column, Scott wrote how Delta’s terminal at New York’s Kennedy was still waiting for full merger integration 15 years after Delta bought Pan Am’s European business, making Delta’s Kennedy operations confusing — even for some cab drivers.
The false start: After airlines merge, it often takes awhile before they’re ready to enact major changes in operations and procedures. Again, the US Airways/America West deal may serve as an example. The integration of the two started off smoothly but ran into large operational snags — poor on-time and baggage handling, people stranded at airports — that inconvenienced customers. (It’s important to note, however, that US Airways has made big strides in straightening most of them out.)
That said, there are plenty of reasons to believe that the integration of Delta-Northwest will be less rocky than other airline marriages. For one, Delta’s CEO Richard Anderson — who will lead the combined carrier — has been in charge of both companies, which may give him special insight into how the two cultures will blend.
Readers, we know many of you are airline experts. What other unexpected bumps lie down the road?
Wednesday, December 03, 2008
November 25, 2008
Ex-TWA attendants decry Delta/NW integration
An American Airlines flight attendant who led the fight to extend recall rights to former TWA flight attendants said he's worried that attendants affected by the Delta/Northwest merger could experience similar problems.
Roger Graham helped organize a successful grassroots effort to extend recall rights past five years to the TWA flight attendants who worked for American after that airline was acquired in 2000. TWA attendants were added to the bottom of the American seniority list, and many were laid off in the months following Sept. 11, 2001. By 2006, many began to lose their right to return to work, which expired after five years.
Graham said Tuesday that the Delta/Northwest merger had the potential for similar problems, pointing out that Delta attendants aren't unionized, while Northwest attendants are represented by the Association of Flight Attendants. Delta has formed employee committees to plan the integration, but Graham said the airline should wait until employees can vote on whether to unionize.
"Delta’s attempt to undermine that legislation and process is reprehensible," he said. "If Delta implements their plan of a 'fair and equitable' integration without first having a union vote, it will most certainly lead many of these flight attendants down the same flight path as the TWA attendants."
Trebor Banstetter
Ex-TWA attendants decry Delta/NW integration
An American Airlines flight attendant who led the fight to extend recall rights to former TWA flight attendants said he's worried that attendants affected by the Delta/Northwest merger could experience similar problems.
Roger Graham helped organize a successful grassroots effort to extend recall rights past five years to the TWA flight attendants who worked for American after that airline was acquired in 2000. TWA attendants were added to the bottom of the American seniority list, and many were laid off in the months following Sept. 11, 2001. By 2006, many began to lose their right to return to work, which expired after five years.
Graham said Tuesday that the Delta/Northwest merger had the potential for similar problems, pointing out that Delta attendants aren't unionized, while Northwest attendants are represented by the Association of Flight Attendants. Delta has formed employee committees to plan the integration, but Graham said the airline should wait until employees can vote on whether to unionize.
"Delta’s attempt to undermine that legislation and process is reprehensible," he said. "If Delta implements their plan of a 'fair and equitable' integration without first having a union vote, it will most certainly lead many of these flight attendants down the same flight path as the TWA attendants."
Trebor Banstetter
Tuesday, December 02, 2008
British Airways in merger talks with Qantas
Tuesday December 2, 10:10 am ET By Jane Wardell, AP Business Writer
British Airways says it is in talks with Australian airline Qantas about a potential merger
LONDON (AP) -- British Airways PLC said Tuesday it is in talks with Australia's Qantas Airways Ltd. about a potential merger, sending its shares soaring as it confirmed expectations of consolidation in the hard-hit aviation industry.
BA, which is already pursuing a revenue-sharing deal with American Airlines and Spain's Iberia SA, said it is exploring a "potential merger" with Qantas "via a dual-listed company structure."
In a brief statement released in response to market speculation, BA did not provide any reasoning for the prospective deal but chief executive Willie Walsh has long advocated industry consolidation, arguing that closer cooperation will help airlines cut costs in the current difficult economic climate.
BA, the third-largest airline in Europe, added that its discussions with Iberia on a potential merger are continuing.
"There is no guarantee that any transaction will be forthcoming and a further announcement will be made in due course, if appropriate," BA said in the statement to the London Stock Exchange. It provided no further detail on the structure of the potential deal with Qantas, Australia's largest airline.
The London-based carrier's stock jumped more than 12 percent after the announcement to 156.7 pence ($2.35).
The two airlines are already code sharing partners in the oneworld global alliance, which brings together 10 of the world's carriers including Japan Airlines.
The confirmation from BA on the talks comes a day after the Australian government revealed that it plans to increase the level of foreign ownership allowed in Qantas, but will not permit a takeover. Australian law currently limits a single foreign holding to 25 percent, while a group of foreign holdings can total 35 percent.
A federal government policy paper released Monday proposes lifting the foreign ownership limit -- whether by one company or a group of companies -- to 49 percent. That would allow Qantas and BA to swap equal stakes in each other.
Qantas last month slashed its full-year profit forecast to around 500 million Australian dollars ($316 million), down from an August forecast of AU$750 million. It also said it would cut flights to cope with plummeting demand, despite a recent easing in the oil price.
Walsh last month warned that that the industry was still "heading into the eye of the storm," shortly after BA reported a first-half net loss of 49 million pounds ($77 million).
Analysts have been expecting greater consolidation in the airline industry after the global economic crisis combined with soaring oil prices earlier this year to severely crimp passenger demand.
The International Air Transport Association has reported international passenger traffic declined 1.3 percent in October compared with 2007, following a 2.9 percent drop in September, and forecasts industrywide losses of $2.3 billion this year.
Budget airline Ryanair Holdings PLC on Monday launched a new takeover bid for Aer Lingus, seeking to capitalize on labor unrest at its Irish rival along with the country's economic difficulties.
BA has already filed for worldwide antitrust immunity from U.S. authorities for a revenue-sharing deal with American and Iberia that would see the trio set prices together and share seat capacity on trans-Atlantic flights. American would be the non-merged member of the BA-Iberia linking.
The agreement is the closest alliance the trio can form under strict U.S. airline ownership laws that all but rule out a full merger and follows two earlier failed attempts by BA and AMR Corp.'s American to forge closer ties.
Rival carrier Virgin Atlantic Airways has bitterly opposed that proposed deal, claiming it will seriously damage the competitiveness of the lucrative trans-Atlantic route and increase fares for passengers.
But American and BA contend that the partnership will merely allow the trio to better compete with the other major airline alliances, Star and SkyTeam, which already have antitrust immunity on trans-Atlantic flights and a large presence at other European airports.
BA and American have failed in the past to win an exemption from U.S. competition laws to work more closely together because of their dominance at London's Heathrow Airport, where the pair have more than half the capacity to and from the U.S.
Walsh has argued that the competitive situation has changed since the "open skies" agreement between the U.S. and the European Union came into force in March, allowing airlines to fly to and from any point in the U.S. and any point in the EU.
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