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.
Friday, April 17, 2009
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.
Wednesday, November 26, 2008
NWA flight attendants union sues Delta
Tuesday, November 25, 2008 - 11:39 AM ESTDayton Business Journal - by Liz Riggs DBJ Contributor
The union representing Northwest Airlines flight attendants is suing Delta Air Lines Inc. to prevent the carrier from integrating the pre-merger Delta and Northwest seniority lists, saying the action is premature.
According to the suit filed Nov. 11 in U.S. District Court in Washington, D.C., the Association of Flight Attendants-CWA believes that moving ahead with integration before the combined group has the opportunity to vote on union representation constitutes “unlawful interference [by Delta] ... with the rights of those employees to choose their representative and to organize and bargain effectively.”
Atlanta-based Delta (NYSE: DAL) acquired Northwest on Oct. 29. Delta’s flight attendants are not represented by a union; Northwest’s are.
According to the suit, Delta has said it could take up to 12 to 24 months to fully merge the operations of the two carriers and obtain a single operating certificate from the Federal Aviation Administration. Because Delta has not yet received the certificate, the suit alleges the seniority integration process is inappropriate.
Delta is the largest airline flying out of the Dayton International Airport.
E-mail dayton@bizjournals.com. Call (937) 528-4400.
Tuesday, November 25, 2008 - 11:39 AM ESTDayton Business Journal - by Liz Riggs DBJ Contributor
The union representing Northwest Airlines flight attendants is suing Delta Air Lines Inc. to prevent the carrier from integrating the pre-merger Delta and Northwest seniority lists, saying the action is premature.
According to the suit filed Nov. 11 in U.S. District Court in Washington, D.C., the Association of Flight Attendants-CWA believes that moving ahead with integration before the combined group has the opportunity to vote on union representation constitutes “unlawful interference [by Delta] ... with the rights of those employees to choose their representative and to organize and bargain effectively.”
Atlanta-based Delta (NYSE: DAL) acquired Northwest on Oct. 29. Delta’s flight attendants are not represented by a union; Northwest’s are.
According to the suit, Delta has said it could take up to 12 to 24 months to fully merge the operations of the two carriers and obtain a single operating certificate from the Federal Aviation Administration. Because Delta has not yet received the certificate, the suit alleges the seniority integration process is inappropriate.
Delta is the largest airline flying out of the Dayton International Airport.
E-mail dayton@bizjournals.com. Call (937) 528-4400.
Tuesday, November 18, 2008
November 14, 2008, 11:12 amJetBlue Pilots Move To Form Union
Posted by Matt Phillips
On Thursday, JetBlue filed for U.S. regulatory approval to form the low-cost airline’s first labor union, a move that pilots say will position them to cope with future management that may be less friendly to labor, Dow Jones Newswires reports.
“We have complete faith in our current company leadership and believe that this will be a cooperative effort,” Michael Sorbie, the pilots’ spokesman, said in a letter to the National Mediation Board, the agency that oversees airline labor issues. Sorbie added that “as our airline matures, we want to ensure that the career expectations of our pilots will remain intact regardless of organizational changes.”
The letter was posted on the pilot group’s Web site.
JetBlue spokesman Bryan Baldwin said Thursday that “we have been advised that it is JBPA’s intention to file a petition for election, but have not yet been notified by the National Mediation Board. We believe direct relationship with the company is in our pilots’ best interest.”
The pilots group has asked to be an independent negotiator for JetBlue pilots, rather than join an existing union. A spokesperson for the pilots couldn’t immediately be reached for comment. Once the request is approved, pilots can vote on union representation.
The New York carrier was founded in 2000 as a non-union airline, a rarity in an industry where union organizing - particularly for pilots - has been the standard. David Neeleman, the innovative entrepreneur who started JetBlue, referred to all employees as “crew members”. The airline strove to foster a work-friendly atmosphere that circumvented typical labor-management confrontations.
The airline flourished in its early years, offering low ticket prices and good service. It grew as much as 30% a year, and became a Wall Street favorite, making a profit even as major U.S. airlines lost money and struggled to streamline their organizations during a long industry downturn.
JetBlue now is the major carrier at its New York hub at JFK International Airport, employing more than 9,000 workers.
November 18, 2008, 2:21 pmHas American Airlines Turned Around Its Operation?
Posted by Scott McCartney
Posted by Scott McCartney
As we’ve reported several times in different stories, AMR Corp.’s American Airlines has been struggling with its operation for more than the past year. American officials now admit they went too far in cost-cutting, and the lack of spare parts, spare employees and spare airplanes, combined with overly optimistic schedules, has led to bottom-of-the-industry dependability. Add in continued battles between labor and management and you have one late airline.
American is now trying to turn that around, primarily by building more cushion into its operation. The carrier has added minutes to scheduled flight times, bulking up because delays are measured by comparing actual arrival time at gates with scheduled arrival time. The airline says it has also sped up cruise speeds for flights it slowed down to save fuel, and increased the ground time between flights.
But has the airline turned around yet? On Tuesday, American’s public relations firm, Weber Shandwick, sent a pitch to reporters suggesting a pre-holiday trend story on “American’s Improving Dependability Ratings.” The pitch said American moved from 58.8% on-time performance in June to 83.6% “as of mid-October, advancing its ratings by about 16 percent on average between July and September.”
Comparing airline on-time results in June with mid-October is a bit like comparing the temperature in those months and declaring global warming concerns are dead. Air travel is impacted heavily by summer storms, summer crowds and summer congestion at airports and in the sky. Dependability has improved for every airline this fall as a result of severe schedule cuts that reduced a lot of congestion. And fall is a better flying season for airlines than summer.
So in proper comparisons, how is American faring?
The best way to compare dependability is to compare airlines, since they all fly more or less in the same weather and congestion. (Airlines with heavy presence in New York do have it tougher than others, as we’ve noted before.) According to the Department of Transportation, American ranked eighth among the ten major airlines for dependability in September, the most recent month the government has reported. According to FlightStats.com, a flight-tracking service, American was again eighth among ten majors in October. So far this month, FlightStats shows American with an on-time percentage of 80.32%, which ranks — you guessed it — eighth among ten majors.
But American is running better than it did a year ago. In September, for example, 81.5% of its flights arrived within 15 minutes of schedule, the DOT’s definition of “on-time.” In September 2007, only 78.5% of American’s flights arrived on time, according to DOT. In October, FlightStats counted 81.6% of American’s flights on-time, compared to only 74.3% in October 2007. In the first 15 days of November, American had 80.3% of its flights arrive on time, compared to 78.1% in the same period last year, according to FlightStats.
So dependability has been somewhat better. But it’s been better for other airlines as well.
The real proof, of course, is with the passengers.
Friday, October 31, 2008
Delta begins long integration with Northwest
Friday October 31, 5:58 am
ET By Joshua Freed,
AP Airlines Writer
Delta begins long integration with Northwest; says customers will see little change
MINNEAPOLIS (AP) -- One day after his airline swallowed Northwest Airlines, Delta executive Ed Bastian was in town with a polar bear tie and a smile in a bid to reassure travelers that little would change.
MINNEAPOLIS (AP) -- One day after his airline swallowed Northwest Airlines, Delta executive Ed Bastian was in town with a polar bear tie and a smile in a bid to reassure travelers that little would change.
Hubs? They all stay. Flights? Maybe fewer seats, but no outright cuts. Frequent flier miles? You'll keep them all.
Still, Bastian and the rest of the executives who will stir the two airlines together have plenty to do.
"It's probably going to take us two years before we can really operate as a single carrier," Bastian, who is Delta Air Lines Inc.'s chief financial officer, said Thursday. Bastian is also now the chief executive of Northwest, which became a subsidiary of Delta when their tie-up closed on Wednesday.
Although dozens of teams with members from both companies have been working together for months toward the integration, several items still have not been decided yet, Bastian said from behind a "Delta" podium above a ticketing area dominated by Northwest counters. That includes whether Delta will continue to allow a single checked bag for free (Northwest charges a fee), and which planes will go on which routes.
Bastian did not rule out the possibility that Delta would add a checked-bag fee. In any case, both airlines will have the same fee structure soon, he said.
He said Delta would arrange its fleet and schedule in the spring. Only one airplane, the 757, is common to both carriers.
Airline mergers have a checkered history. AMR Corp.'s American closed on a buyout of TWA months before the Sept. 11, 2001, attacks turned the industry upside-down. And US Airways Group Inc. is still struggling with its integration with America West.
"In the past it's been like trying to integrate oil and water," said Mo Garfinkle, who runs airline consulting firm GCW Consulting.
Delta and Northwest will have to integrate different corporate cultures, different software for ticketing and schedules, different fleets, different unions (most of Delta's workers are not unionized) -- and it all has to be done without missing a beat in a 24-7 operation that includes hubs from Tokyo to Amsterdam.
Garfinkle says he is optimistic, because of all the work that the two airlines have already done, and because they seem willing to take it slow.
"I think this is going to be the poster child for successful airline mergers," he said.
Bastian said that regional subsidiary Comair would remain a part of the airline. Comair's future has been uncertain, in part because it flies 50-seat jets that are money-losers when oil prices are high.
"Comair is an important part of the family, just as they've always been," he said.
The airlines have been cutting domestic capacity while in many cases adding international routes. Bastian said that's on hold now because of the economy.
"The growth will be slowed if there's any growth at all on the international seats," he said.
On Wednesday, before the deal closed, Northwest said it had arranged $500 million in loans backed by its remaining unencumbered assets, which had included its old DC-9 planes. Bastian said the borrowing won't change Delta's ability to park or fly the planes as the schedule requires. He said Delta has not settled on a replacement for the DC-9.
Delta is also negotiating with the state of Minnesota over bond debt backed by the state. Northwest signed agreements promising to repay the debt, at a cost of about $230 million, if its headquarters leaves the state. That hasn't happened yet because it's still a Delta subsidiary.
Northwest has its headquarters in Eagan, Minn. The combined carrier will be based in Atlanta.
Minnesota Rep. Debra Hilstrom, D-Brooklyn Center, said she would call a Nov. 13 hearing about the matter in the House Local Government and Metropolitan Affairs Committee, which she chairs.
October 31, 2008, 9:10 am
Five Issues Delta-Northwest Marriage Could Face
Posted by Matt Phillips
Five Issues Delta-Northwest Marriage Could Face
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, October 29, 2008
Reuters
Delta buys Northwest to create biggest airline
Wednesday October 29, 9:58 pm ET
By John Crawley
By John Crawley
WASHINGTON (Reuters) - Delta Air Lines (NYSE:DAL - News) swallowed rival Northwest Airlines Inc on Wednesday in a $2.6 billion merger that created the world's biggest airline and prompted new speculation about further industry consolidation.
The all-stock transaction, the first domestic airline combination in three years, closed after clearing its biggest and last regulatory hurdle earlier in the day -- U.S. Justice Department antitrust review.
Justice officials cited the likelihood of "substantial and credible efficiencies" without harming consumers or competition.
Government approval was expected. Industry vigorously made the case to regulators earlier this year, when airline finances were rockier than they are now, that consolidation was an important tool for remaining viable with fuel prices high and the economy worsening.
"The airline industry faces a very difficult economic environment around the world and this merger gives Delta increased flexibility to adapt to the economic challenges ahead," said Richard Anderson, the Delta chief executive who will head the combined entity.
The new, larger Delta will be an international powerhouse with unparalleled scheduling and pricing strength with service to 375 cities worldwide, experts said. The company estimates a combined $2 billion in cost savings and revenue enhancements annually.
An ambitious plan is to link the long-established strength of Northwest in Asia with Delta's expanding overseas network, and leverage benefits from the transatlantic SkyTeam alliance that includes AirFrance/KLM.
"There are global corporations but no global airlines. The race to become the first truly global airline has an incredible reward to it," said consultant Darryl Jenkins. "The revenue potential is something that we have not seen yet. That's the synergy that will make this very lucrative."
Jenkins and other experts said the deal's potential may reignite merger fever, which burned this year until fuel prices started their dramatic rise this summer to record heights and prompted sharp airline cost cutting.
Doug Parker, chief executive of US Airways Group (NYSE:LCC - News) and a long-time proponent of consolidation, said last week that he still believes mergers are right for the industry. US Airways failed last year in its bid for Delta.
Calyon Securities analyst Ray Neidl said that economic wild cards could impede consolidation. A credit crunch and fuel price volatility must diminish before airlines can explore mergers, he said.
"Down the road, there will be more consolidation or attempts," Neidl said.
"Down the road, there will be more consolidation or attempts," Neidl said.
INTEGRATING OPERATIONS
Northwest's history dates to 1926 and its common stock first traded in 1941. But the company now operates as a wholly owned subsidiary of Delta until the two fully integrate their operations. That process is expected to take up to two years and cost no more than $600 million.
Integration can be tricky. For instance, US Airways Group Inc (NYSE:LCC - News) has yet to fully combine its work force after merging with America West in 2005.
Delta said customers should continue to check-in and do business directly with the airline operating their flights just as they did before the merger.
For the time being, the carriers will maintain separate web sites as well as two reservation systems and loyalty programs.
The new company will retain the Delta brand and be headquartered in Atlanta, where Delta is based. The new Delta begins operations with 75,000 employees.
In the coming days, Delta will distribute an equity stake to substantially all U.S.-based employees with international employees participating through cash payments in lieu of stock. The pilots' unions of both airlines have agreed to a unified contract but still must negotiate a seniority arrangement, a detail that almost derailed merger prospects earlier this year.
The new Delta has said no frontline employees will be involuntarily furloughed as a result of the merger and that no hubs will be closed. The old Delta's strength was in the South while Northwest operations are based in the northern cities of Minneapolis and Detroit.
As approved by shareholders at both companies earlier this year, Northwest stockholders will receive 1.25 Delta shares for each Northwest share they own. Based on Delta's closing stock price on Wednesday, this exchange ratio is the equivalent of $9.99 per Northwest common share.
Delta shares closed down 2.1 percent at $7.99 on Wednesday on the New York Stock Exchange, while Northwest finished 0.6 percent higher at $9.90.
Government approval of the deal comes as airline finances begin to improve with fuel prices falling sharply off record highs. But carriers are now cutting back service to save money as travel demand softens due to economic weakness.
Northwest posted a $317 million third-quarter loss due to writedowns on its fuel hedging. Without the adjustment, the company earned $93 million and beat Wall Street share price estimates. Delta's third-quarter loss was $50 million.
(Additional reporting by Diane Bartz, Randall Mikkelsen and Kyle Peterson in Chicago; Editing by Gary Hill)
Thursday, October 23, 2008
US Airways, AirTran and JetBlue report steep lossesBy Christopher Hinton, MarketWatch
Last update: 4:46 p.m. EDT Oct. 23, 2008
NEW YORK (MarketWatch) - Fuel costs and non-cash charges related to its hedging program helped push US Airways into a significant third-quarter loss.
The Tempe, Ariz., legacy carrier wasn't alone. Also reporting swings to quarterly losses Thursday were low-cost carriers JetBlue Airways Corp and AirTran Holdings.
The smallest of the six so-called legacy carriers, said it swung quarterly loss of $689 million, or $8.45 a share, from a gain of $177 million, or $1.87 a share, in the year-ago period.
Total operating revenues rose 7.4% to $3.26 billion from $2.13 billion, while passenger-unit revenue jumped 4.6% to 12.71 cents.
Total operating revenues rose 7.4% to $3.26 billion from $2.13 billion, while passenger-unit revenue jumped 4.6% to 12.71 cents.
Excluding items, the airline said it would have lost $2.35 a share. Analysts polled by FactSet Research expected, on average, a loss of $2.30 a share.
Shares of US Airways plunged nearly 16% to close at $7.14, along with the broader sector as investors brace for a possible oil-production cut among OPEC members. The stock hit its lowest point on record at $1.45 when oil hit $147 a barrel in July.
US Airways' total fuel bill in the quarter rose 60% to $1.11 billion due to those record oil prices. Since then prices have crashed to below $70, resulting in significant mark downs for the airline's fuel hedging program that's meant to buffer higher oil prices.
It's a scenario felt across the industry as the world's oil and jet fuel market remain volatile. Over the last two weeks, Northwest Airlines Southwest Airlines Co.
all reported losses due to the sharp rise and then falloff in oil prices.
Still, falling oil prices and steep seat-capacity cuts are expected to benefit the industry next year, and US Airways said Thursday its expects 2009 a "much better" year for the company as well.
Further, the carrier said it secured an additional $950 million in financing.
AirTran and JetBlue also report quarterly losses on fuel
Along with US Airways, JetBlue and AirTran were also predicting clear skies ahead.
"The great industry guide-up continues, with AirTran and JetBlue adding their voices to the chorus of airlines this season painting a brighter view of the fourth quarter and beyond," said J.P. Morgan analyst Jamie Baker in a note to investors.
AirTran Holdings said it swung to a third-quarter loss of $107.1 million, or 91 cents a share, compared to a profit of $10.6 million, or 11 cents a share, in the year-ago period.
The Orlando, Fla., airline said revenue rose 11% to $673.3 million.
Analysts polled by FactSet expected, on average, a loss of 41 cents a share on sales of $671.1 million.
The Orlando, Fla., airline said revenue rose 11% to $673.3 million.
Analysts polled by FactSet expected, on average, a loss of 41 cents a share on sales of $671.1 million.
The company cited record-high fuel costs, which accounted for more than 50% of its expenses for the quarter, as a significant contributor to the loss.
Downgrading the company Thursday was Standard & Poor's Equity Research, saying the carrier's wider-than expected loss raises concern over its financial position. Further, the AirTran is more exposed to leisure and short-haul markets, which are likely to fare worse in a sustained downturn.
In an interview with MarketWatch, Chief Financial Officer Arne Haak said passenger numbers has slowed down a "little bit" for October, and for the first week of November. December so far looks "pretty good," he said.
Nonetheless, S&P cut its rating to hold from buy, with a 12-month price target of $4, down from $5.50. Shares of AirTran fell 7.2% to close at $3.20.
Meanwhile, JetBlue ( said it lost $4 million, or 2 cents a share, in the third-quarter. In the same period a year ago, the Forest Hills, N.Y., carrier earned $23 million, or 12 cents a share.
Operating revenue for the quarter totaled $902 million, up 17.9%.
Operating revenue for the quarter totaled $902 million, up 17.9%.
Analysts polled by FactSet Research estimated, on average, a loss of 5 cents a share and sales of $896 million.
In the near term, JetBlue said it sees continued strength in bookings.
In an investor, note, J.P. Morgan upgraded the low-cost carrier to overweight from neutral.
"JetBlue remains one of the least-liked large jet operators, and has materially lagged the sector's recent sprint to the upside," the research firm said in a note. "In light of a significantly boosted 2009 outlook and continued liquidity improvements, we suggest investors focus on this laggard."
Shares of JetBlue bounced back with the broader market to end up 1 cent at $5.02.
"JetBlue remains one of the least-liked large jet operators, and has materially lagged the sector's recent sprint to the upside," the research firm said in a note. "In light of a significantly boosted 2009 outlook and continued liquidity improvements, we suggest investors focus on this laggard."
Shares of JetBlue bounced back with the broader market to end up 1 cent at $5.02.
Christopher Hinton is a reporter for MarketWatch based in New York.
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