Trump: I Ran a Great Airline: Exclusive




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


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


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


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


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


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


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


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


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


'We Spent Too Much Money'


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


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


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


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


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


The Problem Wooing Women


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


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


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


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


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


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


The Lighter Side of Working With Trump


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


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


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


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


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


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


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


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


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

Southwest, AirTran merger approved by DOJ



Dayton Business Journal - by DBJ Staff  Date: Wednesday, April 27, 2011, 8:52pm EDT


Southwest Airlines' merger with AirTran has been given approval by the Department of Justice, clearing antitrust and other regulatory hurdles.


Southwest Airlines Co. said the U.S. Department of Justice has given its approval of the planned merger with AirTran Holdings.

The merger with AirTran (NYSE: AAI) will bring Southwest (NYSE: LUV) to the Dayton International Airport, long a goal of Dayton-area officials.


"AirTran stockholders approved the acquisition of AirTran by Southwest Airlines on March 23, 2011, which, when combined with DOJ approval and other regulatory clearances, constitutes one of the final steps toward closing the transaction," Southwest said in a press release Wednesday.
The airline previously said it plans to close the merger on May 2.

"Next steps also include beginning work on securing a Single Operating Certificate (SOC) from the Federal Aviation Administration, which is currently projected for completion in the first quarter of 2012," according to Southwest.


Southwest also said the merger will benefit consumers through the expansion of low-fare competition in airline markets across the United States, the creation of broader network offerings with a wider range of consumer choices, improved quality and service, and the overall creation of a platform for new growth.
AirTran is the second-busiest carrier flying out of Dayton. Atlanta-based Delta Air Lines (NYSE: DAL) is the busiest. Other top carriers at the airport include US Airways Group; AMR Corp.’s American Airlines unit; and United Contintnental.

Air France A380 Superjumbo Clips Commuter Jet at Kennedy Airport



By Andrea Rothman and Mary Schlangenstein - Apr 12, 2011 7:09 AM MT


An Air France Airbus A380 lands at John F. Kennedy International Airport in New York. Photographer: Daniel Acker/Bloomberg


An Airbus SAS A380 superjumbo operated by Air France hit a Delta Air Lines commuter jet while taxiing at New York’s John F. Kennedy International airport, spinning the smaller plane and its occupants through 90 degrees.


The A380’s wing, measuring 262 feet (80 meters) from tip to tip, clipped the tail of the Bombardier Inc. (BBD/B) CRJ700 from Delta’s Comair unit. The impact rocked the 106-foot-long CRJ and whipped it round before the A380 moved clear, video footage shows.


While none of the 520 people on the superjumbo or the 66 on the Bombardier plane were hurt in last night’s incident, the A380 was unable to fly to Paris and has been immobilized, Air France spokeswoman Brigitte Barrand said in a phone interview. Passengers will be rerouted with partner airlines, she said.


“It would have been a very interesting ride for the passengers on the CRJ,” said Paul Hayes, director of safety at London-based aviation consultancy Ascend. Though accidents while taxiing cause significant damage “once or twice a year,” the size of the A380 produced a more “spectacular” outcome, he said.


Passengers departed the Bombardier plane using mobile stairs, the standard procedure for Comair at JFK, said Anthony Black, a Delta spokesman. The CRJ700 was taxiing to a gate under its own power when the incident occurred, having just landed at 8 p.m. local time following a flight from Boston, he said.


‘Structural Repair’


“There is damage to the tail,” Black said of the 65-seat Bombardier jet. “In terms of classifying that, I can’t. Obviously it’s going to need some structural repair.”


The CRJ700, operating as flight 6293, probably also damaged its undercarriage as it was spun around, Ascend’s Hayes said, while the end portion of the wing on the superjumbo, the world’s largest passenger plane, may have to be removed and replaced.


The A380, which was operating Air France flight AF7 and taxiing toward the runway at the time of the collision, is one of four so far delivered to the carrier by Airbus. Barrand said it isn’t immediately clear how long it will take to repair the jetliner, which is always deployed on the New York route.


Officials from the U.S. Federal Aviation Administration were “immediately” on scene and are investigating with the National Transportation Safety Board, aided by Delta, Comair and the Port Authority of New York & New Jersey, which runs JFK, Black said, adding that he didn’t know whether the planes were under ground-control guidance when the accident happened.


A330 Clash


Air France suffered an earlier incident involving an A380 on Oct. 30, when one of its planes was brushed by the wing of an Airbus A330 while parked at Paris Charles de Gaulle airport, putting the bigger plane out of action for about two weeks.


Barrand said it’s too early to speculate on what led to the collision, while Comair didn’t comment on the cause.


“Crew are meant to be aware of where their wingtips are,” Ascend’s Hayes said. “But then again if you’re taxiing cleared for takeoff with your nose gear on the center line of the taxiway you should expect there’d be clearance.”


Air France-KLM (AF) Group also uses A380s to serve Johannesburg and Tokyo, and will take delivery of two more of the planes by the end of May for services to Montreal and San Francisco.


The European company is a partner of Atlanta-based Delta in the SkyTeam airline alliance. Toulouse, France-based Airbus is as unit of European Aeronautic, Defence & Space Co.


To contact the reporters on this story: Andrea Rothman in Paris at aerothman@bloomberg.net; Mary Schlangenstein in Dallas at maryc.s@bloomberg.net


To contact the editors responsible for this story: Benedikt Kammel at bkammel@bloomberg.net; Ed Dufner at edufner@bloomberg.net

Southwest’s Troubles Aren’t Over



Apr. 4 2011 - 5:09 pm


By JOHN GIUFFO


After Friday’s much-publicized mid-flight fuselage hole and depressurization scare, Southwest Airlines is still struggling with maintenance issues, as well as a public relations nightmare. As you’ll recall, a five-foot hole was ripped in the ceiling of a Southwest Boeing 737 flying from Phoenix to Sacramento, forcing an unscheduled landing at a Marines air base in Arizona.

Though no one was seriously hurt, Southwest grounded 300 flights over the weekend to look for stress cracks similar to the one that caused Friday’s hole, and 70 more flights on Monday. Adding to the company’s woes, the New York Times reported that after a process of inspecting some of the fleet’s 737 aircraft, a third plane was found to have the same type of stress fractures. This follows a 2008 FAA fine of $10.2 million for Southwest’s failure to follow inspection guidelines, even allowing six planes to fly that the company knew had stress cracks.


Salon’s Patrick Smith, a pilot himself and author of the terrific airplane-related column “Ask the Pilot,” is also on the case, pointing out the ways in which journalists can get these types of stories wrong, while unfairly playing up the dangers of such incidents.

Smith says that while “a hole in the airplane is always serious,” Friday’s incident wasn’t particularly dangerous. He admits that mid-flight incidents such as this one can lead to explosive decompression, or in rare instances, “a small crack or fracture can propagate to the point of large-scale structural fracture.” But in this case decompression wasn’t explosive, but gradual, and the pilots were able to guide the plane down to the 10,000-foot ceiling called for in decompression episodes, and the plane was able to make a safe emergency landing at the Arizona base.


That’s not to say that maintenance failures can’t lead to catastrophic incidents, or that the FAA shouldn’t look into this particular fuselage tearing, just that the media hype over “harrowing” landings or explosions that “rocked the cabin” may have been overblown. Smith’s cool-headed assessments of in-flight scares and emergencies are always a calming curative to worst-case scenario fantasies – something to remember the next time your flight is punctuated by a violent series of turbulence-related bumps and drops.

Smith himself has survived two decompression incidents in one day, and while these types of failures can be frightening, only two plane crashes have been definitely attributed to fuselage stress fractures. Which should provide some measure of comfort if you’re ever traveling over the continental U.S., and a large hole is suddenly torn from the ceiling – insofar as anything can provide comfort in that situation.

NTSB: Cracks found in 3 grounded Southwest planes



NTSB: Cracks similar to those found in damaged Southwest Airlines jet found in 3 other planes




Bob Christie, Associated Press, On Sunday April 3, 2011, 11:57 pm


YUMA, Ariz. (AP) -- Inspectors have found small, subsurface cracks in three more Southwest Airlines planes that are similar to those suspected of causing a jetliner to lose pressure and make a harrowing emergency landing in Arizona, a federal investigator said Sunday.


Southwest said in statement that two of its Boeing 737-700s had cracks and will be evaluated and repaired before they are returned to service. A National Transportation Safety Board member told The Associated Press later Sunday that a third plane had been found with cracks developing.


The cracks found in the three planes developed in two lines of riveted joints that run the length of the aircraft.


Nineteen other Boeing 737-300 planes inspected using a special test developed by the manufacturer showed no problems and will be returned to service. Checks on nearly 60 other jets are expected to be completed by late Tuesday, the airline said.
That means flight cancelations will likely continue until the planes are back in the air. About 600 flights in all were canceled over the weekend.


NTSB board member Robert Sumwalt said Boeing was developing a "service bulletin" for all 737-300 models with comparable flight cycle time as the Arizona jet, which was 15 years old and had about 39,000 takeoff and landing cycles.


There are 931 such models in service worldwide, 288 of which in the U.S. fleet.


Boeing's bulletin would strongly suggest extensive checks of two lines of "lap joints" that run the length of the fuselage. The NTSB has not mandated the checks, but Sumwalt said the FAA will likely make them mandatory.


Friday's flight carrying 118 people rapidly lost cabin pressure after the plane's fuselage ruptured -- causing a 5-foot-long tear -- just after takeoff from Phoenix.
Passengers recalled tense minutes after the hole ruptured overhead with a blast and they fumbled frantically for oxygen masks. Pilots made a controlled descent from 34,400 feet into a southwestern Arizona military base. No one was seriously injured.


The tear along a riveted "lap joint" near the roof of the Boeing 737 above the midsection shows evidence of extensive cracking that hadn't been discovered during routine maintenance before the flight -- and probably wouldn't have been unless mechanics specifically looked for it -- officials said.
"What we saw with Flight 812 was a new and unknown issue," Mike Van de Ven, Southwest executive vice president and chief operating officer, said. "Prior to the event regarding Flight 812, we were in compliance with the FAA-mandated and Boeing-recommended structural inspection requirements for that aircraft."


Sumwalt said that the rip was a foot wide, and that it started along a joint where two sections of the plane's skin are riveted together. An examination showed extensive pre-existing damage along the entire tear.


The riveted joints that run the length of the plane were previously not believed to be a fatigue problem and not normally subjected to extensive checks, Sumwalt said.


"Up to this point only visual inspections were required for 737s of this type because testing and analysis did not indicate that more extensive testing was necessary," Sumwalt said.


That will likely change after Friday's incident, he said.


The FAA declined to say if it was requiring other operators to check their aircraft for similar flaws.


The NTSB also could issue urgent recommendations for inspections on other 737s if investigators decide a problem has been overlooked. The agency's investigation has not determined that the cracks caused the rupture, but it is focused on that area.


Federal records show cracks were found and repaired a year ago in the frame of the same Southwest plane.


A March 2010 inspection found 10 instances of cracking in the aircraft frame, which is part of the fuselage, and another 11 instances of cracked stringer clips, which help hold the plane's skin on, according to an AP review of FAA records of maintenance problems for the Arizona plane.


The records show the cracks were either repaired or the damaged parts replaced. Cracking accounted for a majority of the 28 problem reports filed as a result of that inspection.


It's common for fuselage cracks to be found during inspections of aging planes, especially during scheduled heavy-maintenance checks in which planes are taken apart so that inspectors can see into areas not normally visible.


The Arizona jetliner had gone through about 39,000 cycles of pressurizing, generally a count of takeoffs and landings. Cracks can develop from the constant cycle of pressurizing for flight, then releasing the pressure.


Southwest officials said it had undergone all inspections required by the FAA. They said the plane was given a routine inspection Tuesday and underwent its last so-called heavy check, a more costly and extensive overhaul, in March 2010.


The decompression happened about 18 1/2 minutes after takeoff from Phoenix Sky Harbor International Airport after the pilots reached their cruising altitude. They immediately donned their oxygen masks, declared an emergency and briefly considered returning to Phoenix before the cabin crew told them of the extent of the damage, Sumwalt said.


"They discussed landing in Phoenix, but quickly upon getting the assessment decided to divert to Yuma because it was the closest suitable airport," he said.


The plane's voice and data recorders were being examined in Washington, and Sumwalt said they worked well and showed no sign of a problem before the incident.


Southwest operates about 170 of the 737-300s in its fleet of 548 planes, but it replaced the aluminum skin on many of the 300s in recent years, a spokeswoman said. The planes that were grounded over the weekend have not had their skin replaced.


Southwest said "based on this incident and the additional findings, we expect further action from Boeing and the FAA for operators of the 737-300 fleet worldwide." Boeing did not immediately return messages left Sunday.


US Airways' website shows that the Arizona-based airline also operates 737-300s, but it did not immediately respond to a call from the AP.


In July 2009, a football-sized hole opened up in-flight in the fuselage of another of Southwest's Boeing 737s, depressurizing the cabin. Sumwalt said the two incidents appeared to be unrelated.


Associated Press writers David Koenig contributed from Dallas; Joan Lowy from Washington, D.C.; and Terry Tang, Walter Berry, Mark Evans and Bob Seavey from Phoenix.

Inspectors found "widespread cracking" in Southwest plane



By Colleen Jenkins Colleen Jenkins – 1 hr 9 mins ago


ST. PETERSBURG, Fla (Reuters) – National safety inspectors have found evidence of "widespread cracking" and fatigue on the fuselage of a Southwest Airlines Boeing 737 that made an emergency landing in Arizona with a hole in the cabin, a government official said on Sunday.


"Was the aircraft well maintained and should it have been maintained better? That is exactly why we are here, to look at why this problem occurred," National Transportation Safety Board Member Robert Sumwalt said at a press conference broadcast from Yuma, Arizona via internet streaming.

As a result of the incident, Southwest has grounded part of its fleet for inspections. The airline canceled 300 flights on Saturday and said it expects to cancel another 300 flights on Sunday as the investigation continues into what caused the hole to develop during Southwest Flight 812 on Friday.


The flight from Phoenix to Sacramento landed at a military base in Yuma, Arizona, after the hole appeared suddenly at about mid cabin.


The cancellations are likely to continue for the next few days, said Southwest Airlines spokeswoman Whitney Eichinger.


Airline mechanics soon will saw out the portion of the plane skin that fractured, and it will be shipped overnight to Washington for further inspection, Sumwalt said.
The piece is expected to be about eight to nine feet long and two feet wide and will weigh about three to four pounds.


"We did find evidence of widespread cracking across this entire fracture surface," said Sumwalt.


But determining exactly where the cracks are is "a very involved process," he said.

Recorders from Flight 812 arrived at NTSB's headquarters on Saturday night.

They indicated that the decompression occurred approximately 18 1/2 minutes after takeoff, Sumwalt said. The flight crew donned oxygen masks and declared an emergency.
The plane descended from its cruising altitude of 36,000 feet to 11,000 feet in approximately 4 1/2 minutes, Sumwalt said.


An inspection of the oxygen generators that supply oxygen to passengers indicated that the generators all had been activated, Sumwalt said.

(Reporting by Colleen Jenkins; Editing by Greg McCune)

Southwest grounds about 80 planes after mishap



By TERRY TANG and WALTER BERRY, Associated Press Terry Tang And Walter Berry, Associated Press – 1 hr 12 mins ago


PHOENIX – Flight attendants had just begun to take drink orders when the explosion rocked the cabin.


Aboard Southwest Flight 812, Shawna Malvini Redden covered her ears, then felt a brisk wind rush by. Oxygen masks fell, the cabin lost pressure, and Redden, now suddenly lightheaded, fumbled to maneuver the mask in place.

Then she prayed. And, instinctively, reached out to the stranger seated next to her in Row 8 as the pilot of the damaged aircraft began a rapid descent from about 34,400 feet in the sky.


"I don't know this dude, but I was like, 'I'm going to just hold your hand,'" Redden, a 28-year-old doctoral student at Arizona State University, recalled Saturday, a day after her Phoenix-to-Sacramento flight was forced into an emergency landing at a military base in Yuma, Ariz., with a hole a few feet long in the roof of the passenger cabin.


No serious injuries were reported among the 118 people aboard, according to Southwest officials.


What caused part of the fuselage to rupture on the 15-year-old Boeing 737-300 was a mystery, and investigators from the National Transportation Safety Board arrived Saturday in Yuma to begin an inquiry.


NTSB board member Robert Sumwalt said investigators were going to cut a piece out of the fuselage, which would be studied for fracture patterns. He said they would also examine the plane's black box and flight recorders, which arrived Saturday at NTSB headquarters in Washington, D.C.


Southwest, meanwhile, grounded about 80 similar planes so that they could be inspected, and said that as a result some 300 flights were being canceled Saturday. Airline spokeswoman Linda Rutherford said it was too soon to estimate the cost of grounding a portion of its fleet.
Southwest operates about 170 of the 737-300s in its fleet of about 540 planes, but it replaced the aluminum skin on many of the 300s in recent years, Rutherford said. The planes that were grounded Saturday have not had their skin replaced, she said.


"Obviously we're dealing with a skin issue, and we believe that these 80 airplanes are covered by a set of (federal safety rules) that make them candidates to do this additional inspection that Boeing is devising for us," Rutherford said.

Julie O'Donnell, an aviation safety spokeswoman for Seattle-based Boeing Commercial Airplanes, confirmed "a hole in the fuselage and a depressurization event" in the latest incident but declined to speculate on what caused it.

A total of 288 Boeing 737-300s currently operate in the U.S. fleet, and 931 operate worldwide, according to the Federal Aviation Administration. "The FAA is working closely with the NTSB, Southwest Airlines and Boeing to determine what actions may be necessary," the FAA said Saturday.


Southwest officials said the Arizona plane had undergone all inspections required by the FAA. They said the plane was given a routine inspection Tuesday and underwent its last so-called heavy check, a more costly and extensive overhaul, in March 2010.

An Associated Press review of FAA records of maintenance problems for the plane show that in March 2010 at least eight instances were found of cracking in the aircraft frame, which is part of the fuselage. Those cracks were repaired, the records indicated.


It's not uncommon for fuselage cracks to be found during inspections of planes that age, especially during scheduled heavy maintenance checks in which they are taken apart so that inspectors can see into areas not normally visible.


The 737-300 is the oldest plane in Southwest's fleet, and the Dallas-based company is retiring 300s as it takes deliveries of new models. But the process of replacing all the 300s could take years.


Seated one row from the mid-cabin rupture, Don Nelson said it took about four noisy minutes for the plane to dip to less than 10,000 feet. "You could tell there was an oxygen deficiency," he said.


"People were dropping," said Christine Ziegler, a 44-year-old project manager from Sacramento who watched as a flight attendant and a passenger nearby fainted. Nelson and Ziegler spoke Friday after a substitute flight took them on to Sacramento.


Brenda Reese described the hole as "at the top of the plane, right up above where you store your luggage."


At an altitude above 34,000 feet, the Southwest pilots would have had only 10 to 20 seconds of "useful consciousness" to get their oxygen masks on or pass out, said John Gadzinski, an airline pilot and aviation safety consultant.

"The higher you are the less useful consciousness time you have," said Gadzinski, president of Four Winds Consulting in Virginia Beach, Va. "It's a credit to the pilots that they responded so quickly."


A loss of cabin pressure just after takeoff knocked out the pilots of a Helios Airways Boeing 737 in August 2005. The plane flew into a hillside north of Athens in Greece, killing all 121 people aboard. In that case, an investigation found the pilots had failed to heed a warning that the pressurization system wasn't working correctly.


In this case, the hole and subsequent depressurization wouldn't have affected the pilots' ability to control the plane as long as they had their oxygen masks on, Gadzinski said.


"The fact that you have a breach hole doesn't affect the aerodynamics of the plane. The plane still flies exactly the same," he said.


A similar incident happened in July 2009 when a football-sized hole opened up in-flight in the fuselage of another of Southwest's Boeing 737s, depressurizing the cabin. The plane made an emergency landing in Charleston, W.Va. It was later determined that the hole was caused by metal fatigue.


In response to that incident, Southwest changed its maintenance plan to include additional inspections, which FAA reviewed and accepted, said John Goglia, a former NTSB member and an expert on airline maintenance. The details of the plan are considered proprietary and aren't made public, he said.


The latest incident "certainly makes me think there is something wrong with the maintenance system at Southwest, and it makes me think there is something wrong with the (FAA) principal maintenance inspector down there that after that big event they weren't watching this more closely," Goglia said.

There was "never any danger that the plane would fall out of the sky," Goglia said. "However, anybody on that airplane with any sort of respiratory problems certainly was at risk."

Four months before that emergency landing, Southwest had agreed to pay $7.5 million to settle charges that it operated planes that had missed required safety inspections for cracks in the fuselage. The airline inspected nearly 200 of its planes back then, found no cracks and put them back in the sky.


In 1988, cracks caused part of the roof of an Aloha Airlines Boeing 737 to peel open while the jet flew from Hilo to Honolulu. A flight attendant was sucked out of the plane and plunged to her death, and dozens of passengers were injured.

After that incident, Boeing made changes to its designs "to prevent the airplane from ever coming apart in that way again, by using different materials and manufacturing methods," Goglia said.


Three years ago, an exploding oxygen cylinder ripped a hole the fuselage of a Qantas Boeing 747-438 carrying 365 people. The plane descended thousands of feet with the loss of cabin pressure and made a successful emergency landing.


As for Friday's flight, there was obvious relief when it touched down safely. When the pilot emerged after the landing, passengers "clapped and cheered," Redden said.


"If overhead bins weren't in the way, I'm pretty sure we would've given him a standing ovation," she said. 


Associated Press writers Lien Hoang, Don Thompson and Adam Weintraub contributed to this report from Sacramento, Calif.; David Koenig contributed from Dallas; Joan Lowy from Washington, D.C.; and Mark Evans and Robert Seavey from Phoenix.

Southwest Grounds 79 Boeing 737s, Cancels 300 Flights After Fuselage Hole



By Mary Schlangenstein and Dan Hart - Apr 2, 2011 10:49 AM MT


Southwest Airlines Co. (LUV), the world’s biggest operator of Boeing Co. (BA) 737 jets, grounded 79 aircraft after a hole developed in a plane during flight, forcing an emergency landing. About 300 flights were canceled today.


Flight 812, with 118 passengers and five crew, was en route to Sacramento from Phoenix yesterday when a loss of cabin pressure caused oxygen masks to deploy and prompted a landing in Yuma, Arizona, Southwest said in a statement today.


“The carrier has decided to keep a subset of its Boeing 737 fleet out of the flying schedule to begin an aggressive inspection effort in cooperation with Boeing engineers,” Southwest said.


Metal fatigue was blamed for an 18-by-12 inch rip in a Southwest 737 last July while it was flying at 35,000 feet, also forcing an emergency landing. In January 2010, the Federal Aviation Administration ordered fuselage checks for metal fatigue on 135 Boeing 737-300s, -400s and -500s in the U.S., after the planemaker recommended such checks in September 2009.


Passengers described a hole in the model 737-300 as being 1 foot (0.3 meters) wide by 3 feet long, said Linda Rutherford, a spokeswoman for Dallas-based Southwest. A flight attendant and a passenger were injured, Rutherford said.

The plane will be 15 years old in June; its fuselage skin had been inspected on March 29 and Feb. 5, Rutherford said.

Top of Aircraft
An inspection by Flight 812 crew members in Yuma found a hole in the top of the aircraft, toward the middle of the cabin, the airline said. The tear found last July, in another 737-300, also was in the top of the fuselage, near the tail.

“The safety of our customers and employees is our primary concern, and we are grateful there were no serious injuries,” Chief Operating Officer Mike Van de Ven said in the statement.


The airline is working with Boeing engineers “on an inspection regimen” that will look for “skin fatigue” on the aircraft over the next few days, Southwest said. The airline also is working with National Transportation Safety Board investigators who flew to Yuma, about 150 miles from Phoenix. The inspections will take place during the next several days at five locations, Southwest said.


Southwest has 552 737s in its fleet, Chief Executive Officer Gary Kelly said on March 22. According to the airline’s website, it had 171 737-300s, 25 737-500s and 352 737-700s as of Dec. 31, 2010. The average age of Southwest’s fleet of 737-300s was 19 years as of the end of 2010.


‘Fatigue Cracks’
In the July 2010 incident, “continuous fatigue cracks” on the inside of the fuselage helped create the hole, the safety board said. No passengers were injured. In March 2009, Southwest agreed to pay a $7.5 million fine for flying jets in 2006 and 2007 without some required fuselage inspections.


The Federal Bureau of Investigation is probing a possible bullet hole in the fuselage of a US Airways Group Inc. (LCC) Boeing 737 on March 28. The nickel-size hole was discovered on the left side of the plane near the tail during a pilot’s preflight check at the Charlotte, North Carolina, airport. The jet, which had flown from Philadelphia with 84 passengers and five crew, has since returned to service, said Michelle Mohr, a US Airways spokeswoman.

The hole in the US Airways plane extended from the jet’s skin into the cabin, Amy Thoreson, an FBI spokeswoman in Charlotte, said March 29.


On Oct. 26, 2010, an American Airlines Boeing 757-200 developed a hole in the fuselage while flying at 31,000 feet. The hole occurred just above the door on the left side near the front of the aircraft, causing a loss of pressure and forcing an emergency landing in Miami, where the flight began.


Separately yesterday, a partial loss of cabin pressure on American Airlines Flight 547 sickened six people on board and forced an emergency landing in Dayton, Ohio.

The aircraft, a Boeing 737-800, landed in Dayton at 8:20 a.m., about an hour and 10 minutes after taking off from Washington’s Reagan National Airport en route to Chicago, said Tim Smith, a spokesman for American, a unit of AMR Corp. (AMR)


To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Dan Hart in Washington at dahart@bloomberg.net.

Airlines' Quarter Signals Strength to Come



By Ted Reed 03/28/11 - 10:16 AM EDT
ATLANTA (TheStreet) -- The first quarter of 2011 may be a defining period in the recent history of U.S. commercial aviation, because it demonstrated that the industry has likely developed a capacity to weather sudden and dramatic cost challenges.


As fuel prices rose rapidly during the quarter, airline fares increased along with them, in "an unprecedented display of pricing discipline in this industry, to make sure we're getting the price of our product covered," said Delta(DAL_) President Ed Bastian at last week's J.P. Morgan transportation conference. "We've had eight [fare] increases since the start of the year, four of those led by Delta."


At the conference, both United(UAL_) CEO Jeff Smisek and US Airways(LCC_) US Airways President Scott Kirby proclaimed they had never seen anything like it. The industry has had "a round of price increases that has been faster than I've seen in 16 years in the industry," Smisek said.


Kirby noted that "the last six to eight weeks have given us one really good data point that the industry has restructured." After oil prices began to rise, "the industry responded more aggressively than I have ever seen," he said, adding that industry earnings this year are likely to be similar to down only slightly from last year. The industry made about $2.3 billion in 2010, reversing a year-earlier $3.2 billion loss.


Historically, airlines as a group have been unable to move quickly to recoup lost revenue because someone always held out, limiting the scope of fare increases. In the early 1990s, floundering, bankrupt Eastern kept fares low as it spent its creditors' money. In the middle of the last decade, Southwest(LUV_), protected by wise fuel hedging at a time when few competitors had capital to allocate to hedging, resisted efforts to boost fares.


Those days appear to have ended, not only because the top seven airlines are financially healthy, but also because the three low-fare carriers -- soon to be two low-fare carriers following the Southwest/AirTran merger -- have generally signed on to more rational pricing.


Not only were airlines able to raise prices during the quarter and access billions of dollars in new revenue from fees for services, they also have continued to maintain an unprecedented level of capacity discipline. For instance, Bastian said Delta will move to reduce second-half capacity by four points "from where plans sit today," with most of the cuts coming in the transatlantic.


The impact of all these improvements is evident in the estimates of analysts surveyed by Thomson Reuters, who project that for the full year, only one of the big seven carriers will lose money. In the generally unprofitable first quarter, two airlines will make money while JetBlue (JBLU_) will break even, they project. In the second quarter, profits are expected at every carrier.


Without question, American(AMR_), the one airline expected to lose money for the year, is also the the industry's most intriguing story.


The expectation of a loss is logical, given that American was the only major carrier to lose money in 2010. Once the biggest carrier, American slipped to third as the other two members of the industry's big three expanded through mergers. American, the only carrier never to submit to bankruptcy, also has the highest labor costs.


An American Turnaround?


Nevertheless, it is possible that 2010 marked the start of a turnaround for American. The carrier finally secured anti-trust immunity for a transatlantic joint venture with partners, a privilege its rivals have enjoyed for years. Soon thereafter, regulators approved transpacific anti-trust immunity for a joint venture with partner Japan Air Lines. That arrangement will be implemented April 1. American has said that the immunities combined with a new route strategy should add $500 million in new income, most of it this year.


Additionally, during 2010, American's pilots elected to replace a union president who had systematically opposed every single change the airline sought to make during his tenure -- even when the changes clearly benefited his members.


So far, analysts are not buying the American turnaround story. Current year estimates range from a loss of $3.36 to a profit of 60 cents, the widest range of any airline, with a consensus loss of $1.17.


But the experts are not always right. Just as an example, they nearly uniformly failed to perceive that during its mid-decade bankruptcy, Delta was remaking itself into a profitable company.


In a report last week, Morgan Stanley analyst William Greene rated American overweight, but urged that the carrier follow Delta and others in reducing capacity. "It is clear to us that the seeming lack of urgency with respect to addressing higher fuel prices is weighing on investor sentiment in AMR," Greene wrote. "We believe that an incremental [second half] capacity revision is necessary to rebuild management credibility and thus, investor sentiment."


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


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

5 Fees Airlines Should Add Now



By Ted Reed 03/23/11 - 10:42 AM EDT


CHICAGO (TheStreet) -- We know that many people like to complain about airline fees, but for a change, let's look at this phenomenon in a different way.


It is in all of our interests -- since we can't personally invest in Amtrak -- that U.S. airlines make money. That way, they can continue to assure safe, reliable travel, buy more new airplanes and expand human interaction throughout the world.

Unfortunately, airlines historically have lost money. As US Airways(LCC_) CEO Doug Parker has said, it is counter to our national interest for an industry so important to be so fragile economically.


What we need, therefore, is to have more airlines add more fees -- and soon.


Sometimes it seems that airlines are hesitant to add fees because they fear the media will say bad things about them. But here at TheStreet, we have no fear.


We compiled a list of five fees the airlines should add right now. We had help from Jay Sorensen, president of the airline marketing consultant for Shorewood, Wis.,-based IdeaWorks, and Raphael Bejar, CEO of Paris-based Airsavings, which develops ancillary products for airlines.


Sorensen noted that if you look around the world, "whenever there is something that could be charged for, there is already a case where that is being done at some airline somewhere in the world. It's just that many of these [practices] are not prevalent in the U.S."


We should note, however, that U.S. airlines are testing various new fees and in some cases are routinely selling them. We say stop the tests. Implement the fees!


Read on for the five we most need, right now.


"When passengers can order a meal during the booking process, magical things happen," Sorensen said. "The airlines have to provide something attractive because suddenly, they are selling it. That means the food will be fresher, because airlines will not be so concerned about spoilage."


Today's airline food, by contrast, is selected partially on the basis that it is less likely to spoil quickly.


United(UAL_) is already testing this concept. Last year, the carrier introduced the sale of "champagne-style" brunches and premium meals for about $24.95, on 37 flights worldwide. The flights include transcontinental trips between New York's Kennedy Airport and both Los Angeles International Airport and San Francisco International Airport, as well as transatlantic flights to and from Frankfurt and London Heathrow.


"About 90% of the customers who bought the meals were satisfied or very satisfied," said United spokesman Rahsaan Johnson. "Of the 10% who weren't satisfied, many tied their dissatisfaction to the selection they chose rather than with the product overall."


Johnson said United is likely to expand its testing.


Many airlines already do this in one form or another.


For $9 to $19 each way, American Airlines(AMR_) offers a "boarding and flexibility package" upon buying tickets that includes early boarding and a $75 credit if passengers need to change their itinerary.


United offers a package, starting at $19, that includes early boarding and the ability to use a premium line to get through security at more than 70 airports as a well as a ticket counter line offered to premium passengers.


At Southwest(LUV_), you can pay $10 for Early Bird boarding, which enables you to board early and find the seat you want.


Also, at US Airways, early boarding is offered to passengers with a US Airways Dividend Miles MasterCard. (Disclosure: this reporter lives in Charlotte and has such a card. His only complaint: "Why does every single person who lives in Charlotte have zone two boarding?")


"With the ability to get on the airplane first, you have a guaranteed shot at overhead bin space," said Sorensen.


Surely that is worth paying for, especially if you have one of those rollaboard suitcases that takes up too much space in the overhead bin.


To an extent, some airlines are already doing this as well. US Airways, for instance, enables passengers who book online to pay extra for an exit row seat. The practice was pioneered by AirTran(AAI_). Even JetBlue(JBLU_), which touts "more" legroom in every seat as well as free food and wireless, sells a product called "Even More Legroom," which includes four extra inches of legroom and early boarding, starting at $20.


At airport self-service check-in machines, American Airlines' "Express Seats" allows coach passengers to select a seat closer to the front of the plane. The service, which also includes Group 1 boarding, costs $19 to $39 one way depending on the length of the flight -- and availability.


Delta(DAL_) offers a product called "Economy Comfort," which is really not that economical: it costs $80 to $160 each way. The package includes extra legroom, extra seat recline, early boarding and free alcoholic drinks.


Sorensen said that going forward, "all seats will be assigned on a fee basis, which will vary by location." The fallback option will be to get an assignment at the gate right before departure.


This one is so obvious that US Airways tried it for seven months a couple years ago. The carrier gave up, beaten back by media hysteria and a lack of competitive response.


Obviously, it makes no sense for an airline to spend the money to lift 400 cans of soda on a fully-stocked Airbus A320 six miles into the atmosphere and fly them around, with fuel costs high, to only give them away.


At a 2008 investor conference, President Scott Kirby noted that without free drinks, "the cabin environment is much calmer and more efficient." In the past, he said, because drinks were free, nearly every passenger had one. The charge also meant that carts no longer clogged the aisles, restroom lines diminished, less trash was left on board and the frequency of aircraft catering diminished. This one is so obvious that US Airways tried it for seven months a couple years ago. The carrier gave up, beaten back by media hysteria and a lack of competitive response.


Obviously, it makes no sense for an airline to spend the money to lift 400 cans of soda on a fully-stocked Airbus A320 six miles into the atmosphere and fly them around, with fuel costs high, to only give them away.


At a 2008 investor conference, President Scott Kirby noted that without free drinks, "the cabin environment is much calmer and more efficient." In the past, he said, because drinks were free, nearly every passenger had one. The charge also meant that carts no longer clogged the aisles, restroom lines diminished, less trash was left on board and the frequency of aircraft catering diminished.


Airsavings' Bejar said the proper approach to selling insurance is "to show passengers the value, then they are happy to pay."


Among the products AirSavings has developed for the Czech carrier SmartWings is weather protection. A passenger flying from Prague to Nice to lie on the beach by the Mediterranean can pay about $17 to $28, and then, for each day it rains a quarter inch or more in Nice, can collect about $43. The airline collects 8% to 12% of the cost of this insurance, which is sold with the ticket.


U.S. airlines all sell travel insurance with tickets, but Bejar said only about 2 to 3% of passengers buy it. At SmartWings and Dublin-based Aer Arann, the purchase rate is closer to 20% or 30%. Why? "We increased the perceived value by including 30 minutes of free WiFi access during the trip, either in the airport or in the hotel" -- but not in the airplane -- he said.


Airlines get 20% of this revenue.


One more product, being prepared for Spanish carrier AirEuropa, is Genius 365, a concierge service. It provides assistance in finding anytime a traveler might need -- finding a cab, having a doctor visit the hotel, restaurant bookings, even rescheduling a flight in the event of a travel disruption. The cost is $35, for a trip, no matter what the length is.


Airlines get about 15% of the revenue.


What's not to like?


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

American Airlines to restart Chicago-Dublin route

American Airlines to restart route between Chicago and Dublin, Ireland


Friday March 25, 2011, 2:17 pm EDT


CHICAGO (AP) -- American Airlines is resuming daily nonstop flights between Chicago and Dublin, Ireland, starting April 5.
The airline said Friday that it will use a Boeing 767-300 plane that houses 225 seats for the route.
American Airlines said beginning April 6 it will move its operations to Dublin's new Terminal 2, giving travelers the ability to pre-clear U.S. immigration and customs before boarding their flight. Once passengers arrive at Chicago O'Hare International Airport they will be treated as domestic instead of international passengers.


American Airlines, American Eagle and AmericanConnection(at) serve 250 cities in 50 countries with more than 3,600 daily flights on average.

American Airlines Scraps 188 Miami Flights After Fire Causes Fuel Shortage



By Mary Jane Credeur and Sonja Elmquist - Mar 25, 2011 1:53 PM MT
AMR Corp. (AMR)’s American Airlines scrubbed 188 Miami flights today, almost a third of its daily schedule there, after a fire destroyed the main pumping system at the airport’s fuel farm.


The March 23 blaze at Miami International Airport forced American to use 10 tanker trucks to haul fuel to the tarmac, so refueling now takes as long as five hours on wide-body planes such as Boeing Co. (BA) 777s, said Andrea Huguely, an airline spokeswoman. The process usually takes 45 minutes, she said.


“We can’t utilize the underground system that would normally pump fuel into the planes,” Huguely said. Relying on the tankers is “like trying to fill up an aircraft with an eyedropper.”


Today’s cancellations added to 190 flights scrapped yesterday, and more delays and dropped flights are likely into next week, Huguely said in a telephone interview. Fort Worth, Texas-based American accounts for three-fourths of the airport’s traffic and has about 600 flights a day there.


Replacing the previous system of 14 pumps will take at least two months, an airport spokesman, Greg Chin, said by telephone.


Miami International has been using temporary pumps that aren’t as fast as the original system, and will install high- performance units by next week with output similar to the peak flow of the destroyed system, Chin said.


Six Tanks


The airport has a three-day supply of fuel stored in six tanks holding 1 million gallons (3.79 million liters) each, and contracts its fuel services from New York-based Allied Aviation Services Inc., Chin said.


American is refueling planes at other airports when possible, and some flights are making stops at Orlando or Fort Lauderdale to take on fuel, Huguely said.


Passengers flying to, from or through Miami are being allowed to rebook flights without penalty, American said in a statement.


AMR fell 1 cent to $6.50 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have tumbled 17 percent this year.


Miami is the 12th-busiest airport in the U.S., with almost 36 million travelers last year, according to Airports Council International. American uses Miami as a gateway for its 29 daily flights to Mexico and the rest of Latin America, Huguely said.


Delta Air Lines Inc. (DAL), the second-biggest carrier at Miami International, hasn’t had to cancel any flights because it is fueling planes at its hometown hub in Atlanta, said Anthony Black, a spokesman.


Atlanta was the top U.S. destination from Miami in 2010, with about 11 percent of passengers, according to the federal Bureau of Transportation Statistics, followed by Chicago’s O’Hare airport, New York’s LaGuardia and Dallas-Fort Worth.


To contact the reporters on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net; Sonja Elmquist in New York at selmquist1@bloomberg.net 

American’s flight attendants forbidden to strike
March 25, 2011, 3:01 p.m. EDT 
By Christopher Hinton, MarketWatch


NEW YORK (MarketWatch) — The U.S. isn’t allowing flight attendants at financially strapped American Airlines to walk the picket lines any time soon, and that could change the tone of labor negotiations across the industry, some experts said Friday.


The National Mediation Board, the U.S. agency that referees labor-management relations for airlines, has ignored a request made a year ago by the Association of Professional Flight Attendants, asking the federal government to release it from negotiations for what’s called a 30-day cooling-off period, which then allows for a strike.
Profiling of Muslim-AmericansThe Michigan Chapter of the Council on American Islamic Relations has received dozens of complaints from Muslim-Americans about being targeted for harassment when crossing the Canada-U.S. border.


For almost three years, American Airlines flight attendants have been in talks with management, seeking improved wages and benefits as well as more job security. But management has refused to deal until the union allows it more scheduling flexibility for workers in order to increase productivity.


The NMB later said the carrier’s fragile finances and the weakened national economy would weigh heavily on its decision, according to the union.


The NMB said it would not comment on any ongoing labor negotiation.


“The political reality is, to a large extent, defined by the state of the economy,” said APFA President Laura Glading in a statement. “Consequently, it is clear to us that the White House will avoid any kind of disruption. And we cannot lose sight of the fact that the National Mediation Board answers to the White House.”


It’s a clear signal to any union, at American or elsewhere, that trying to win a contract that would result in an unsustainable outcome won’t be supported by the government, said Jerry Glass, a labor expert at F&H Consultants Group


“If a union has a demand on the table that can be shown by management that it is unsustainable, that it would put the airline at financial jeopardy... you will remain in negotiations,” he said.
“I think this will put people back at the table, and American will likely get the productivity changes it wants,” said Bill Swelbar, an airline industry expert at Massachusetts Institute of Technology.


American Airlines’ parent, AMR Corp. /quotes/comstock/13*!amr/quotes/nls/amr (AMR 6.50, -0.01, -0.15%) , is the only major carrier forecast to post annual losses over the next two years, based on a survey of analysts by FactSet Research.
“While American Airlines’ lagging performance is not our fault, it is clearly becoming our problem,” said Glading.
Christopher Hinton is a reporter for MarketWatch based in New York.

Boeing's new 747 completes first test flight


SEATTLE (Reuters) – Boeing Co's 747-8 Intercontinental, the new passenger version of its legendary jumbo jet, completed its maiden flight without a hitch on Sunday, marking a key milestone for the aircraft model more closely associated with Boeing than any other plane.

The behemoth began its first test flight from Boeing's Paine Field north of Seattle into clear blue skies at 9:58 a.m. local time. The take-off, witnessed by thousands of Boeing employees and aviation enthusiasts, occurred almost 42 years after the first flight of the original 747, which later became one of the most recognized planes in the world.


After almost four and half hours in the air, the red and white plane landed safely at Boeing Field just south of central Seattle.


The 747-8 Intercontinental will seat 467 passengers, 51 more than the current version of the 747. It promises to burn less fuel and offer more passenger comforts. The plane also boasts new wings, a new tail, state-of-the-art engines and a new cockpit.


The 747 was the world's largest airplane until 2005, when Airbus unveiled its 525-seat A380.


Boeing has taken orders for 33 747-8 passenger planes, according to the company website on Friday. The plane lists at $317.5 million.


Germany's Lufthansa has ordered 20 of the planes, and is set to be the first airline to bring the new jumbo into service early next year.


Production of the new 747 has been delayed as has the mid-sized 787 Dreamliner, a carbon-composite plane, which represents a bigger leap in technology than the revamped 747-8.


The stronger-selling freighter version of the 747 has already flown and is due to be delivered in mid-2011 -- 18 months later than first planned. Boeing has sold more than 70 747-8 freighters.


(Reporting by Bill Rigby in Seattle and Kyle Peterson in Chicago; Editing by Diane Craft)