AMR's $8 Blanket Bungle: Firing Line
By Matthew Buckley, Contributor 02/10/10 - 08:37 AM EST

While profitable Southwest(LUV Quote) continues to poke at the legacy carriers in its national ad campaign, it appears the executives at AMR are taking a page out of President Obama's PR book. "We know you don't like all the extra fees, but your problem is that you aren't hearing us. You need to listen louder," AMR seems to be saying.

I must fully disclose my relationship with AMR. My first scheduled flight as a pilot for this airline was Sept. 11, 2001. I was supposed to fly from Dallas/Fort Worth to Miami and from Miami to Cancun. I was supposed to be in a conga line that evening. My mother-in-law called from the East Coast to give us a heads up that something had happened with an airplane in New York.

As I stood there watching the TV going through my mental aviation checklist of how an aircraft could've flown into the World Trade Center on such a clear day, I saw the second airliner hit.
I immediately knew we were under attack and I reached in the closet and pushed my never worn American Airlines uniform out of the way for the familiar feel of my well-worn Navy flight suit. I broke the land speed record and got out to Naval Air Station JRB Fort Worth just as the base was closed and it went to a combat posture. I flew the F/A-18 Hornet for the Naval Reserve in addition to being a pilot for American.

We connected with NORAD (North American Air Defense Command) and hooked up with the F-16 squadron next door. We then set up a combat air patrol for the southwestern United States. I went from flying in an airliner that day for the first time to possibly shooting one down.
Amazingly, three days later, crew scheduling called to inform me that I was scheduled for my first trip the following day. I thought it was a prank a squadron mate was playing since I had just landed from launching on an alert and forcing a small plane to land that had violated the no-fly rule and was heading for presidential airspace.

Realizing the guy from crew scheduling wasn't joking, I asked the guy if he had any access to the outside world from where he was sitting. AMR had just made an ill-advised purchase of beleaguered TWA and all of its pilots had been placed on top of me on the seniority list. I was one of the most junior pilots and I knew I was toast at a minimum. I also had my doubts that AMR as a company would survive the attacks (see bailout, government series of).

But since I still worked there I showed up early the next morning, flew a plane with a couple of stranded AMR employees back to Miami and went to the crew hotel where the captain informed me that crew scheduling had called to inform him that I was now furloughed (polite airline code for "laid off"). The captain seized my ID card. I didn't even get a flight back home.

So it doesn't amaze me that the leadership at AMR made such a hilarious business decision as to start charging for blankets. Why?

Let me count the ways.

Will AMR order pilots to lower the cabin temperature to increase sales? "Captain Buckley, we notice that your blanket sales are low this month. Can you explain why? The flight manual says to keep the cabin temp at or below 32 degrees (except on flights to south Florida ... we can't afford the liability of older passengers and their conditions, but we expect you to use your judgment if they look like a healthy bunch)."

Maybe the thousands of furloughed pilots could start a business. Sell blankets outside of security for $4, thus undercutting the market by 50%.

Or as a frequent business traveler on AMR (executive platinum a year ago, dropped to unwashed masses gold status recently), I'm going to pack my carry-on full of space blankets. I'll sell those for $2 onboard, selling ad space on them to rival carriers for a premium.

Seriously AMR. Find a business plan that actually sells a product that makes more than what it costs to produce.

Firing Line: I want my former employer to succeed. The employees were the best team I ever worked with (for a day). But a business so focused on the tactical generation of revenue rather than developing a strategic business plan that makes sense is a business that is destined for trouble.

Written by Matthew Buckley in Boca Raton, Fla.

Raw Video: Biggest-ever 747 takes flight
The biggest jumbojet Boeing has ever made lifted off Monday on its first test flight at Paine Field at Everett, Washington. The 747-8 is 250 feet long, 18 feet longer than current jumbo 747s. (Feb. 7)
http://link.brightcove.com/services/player/bcpid42806346001?bctid=65634394001

Body found in airplane wheel well at Tokyo airport

By MARI YAMAGUCHI, Associated Press Writer Mari Yamaguchi, Associated Press Writer – 2 hrs 41 mins ago

TOKYO – Japanese authorities said Monday they are trying to identify a body found inside one of the landing gear compartments on a Delta Airlines plane flight that arrived in Tokyo from New York.

The body of the apparent stowaway, identified only as that of a male with dark skin, was clad only in a long-sleeved, plaid shirt and jeans, police at the Narita International Airport said Monday.

A mechanic found the body lying inside the landing gear compartment of the Boeing 777-200 during maintenance after Delta Flight 59 from New York landed at Narita on Sunday night, police official Zenjiro Watanabe said.

"All we know is that he must have sneaked in just before departure, because it is impossible for him to enter the storage during flight," Watanabe said.

The body had no visible injuries except signs of frostbite, and the man might have died of hypothermia during the flight, Watanabe said.

The temperature in that part of the plane falls to about minus 58 degrees (minus 50 degrees Celsius) during flight.

Police are investigating the case both as an accident and a possible crime, Watanabe said.
"It's quite bizarre," he said. "I've never handled a case like this before."

Delta officials were not immediately available for comment.

There have been similar cases in the past.

In 2007, a man who appeared to be Asian and in his 50s, was found dead in the nose gear wheel well in an on a United Airlines Boeing 747 that arrived at San Francisco International Airport from Shanghai. He too was thought to be a stowaway.

JAL to stay with American, end Delta talks: report

TOKYO (Reuters) - Japan Airlines Corp (Tokyo:9205.T - News) will keep its partnership with American Airlines (NYSE:AMR - News) in the Oneworld alliance and end talks with Delta Air Lines (NYSE:DAL - News) and the rival SkyTeam group, the Asahi newspaper reported.

The two U.S. carriers have been courting Japan Airlines for months with offers of financial aid and close cooperation on international routes, looking to gain access to its vast network in Asia and benefit from the expansion at Tokyo's Haneda Airport.

JAL had been leaning toward joining hands with Delta before filing for bankruptcy last month and bringing in new management under the auspices of a state-backed fund, the Enterprise Turnaround Initiative Corp of Japan (ETIC).

JAL's new chief executive officer, Kazuo Inamori, and officials of the ETIC have decided that switching alliances is too risky and could hinder their ability to turn around the airline quickly, the Asahi said on its website.

JAL will make an official announcement this week, the Asahi said. A JAL spokeswoman declined to comment. No one at the ETIC could be reached for a comment.

In addition to the burden of upgrading computer systems and other costs, the risk that JAL and Delta would not be able to receive regulatory approval for anti-trust immunity also played into the decision, the Asahi said.

Anti-trust immunity allows airlines to work closely on pricing, flight scheduling and in other areas to boost revenue and lower costs. This is now a possible under the "open skies" treaty recently agreed to by the United States and Japan.

American and its Oneworld partners have offered $1.4 billion in capital and Delta has offered about $1 billion in financial aid in an effort to woo JAL. However, the ETIC is not expected to invite another carrier to invest in JAL at this stage.

(Editing by Maureen Bavdek)

Ex-TWA flight attendants threaten to work during American Airlines strike

The Dallas Morning News - Airline Biz Blog Feb 04, 2010

A group of ex-Trans World Airlines flight attendants was warning Thursday its members would gladly work as replacements if American Airlines flight attendants walk off the job.

The St. Louis-based group, Coalition for Union Principles, told APFA president Laura Glading last August that the group's members would be willing to cross a picket line if the APFA walked off the job. That threat was repeated in a Thursday press release.

"If American Airlines calls, the majority of the former TWA attendants will respond," coalition spokesperson Nancy McGuire said. "They want to resume the careers that were stolen from them by a renegade union."

Consider this as a continuation of a dispute between the American flight attendants and the ex-TWA flight attendants, who joined American when American acquired TWA assets in 2001.
The APFA put all the TWA flight attendants at the bottom of the APFA seniority list.

That meant that a 40-year flight attendant who came over from TWA would be laid off before a flight attendant who was hired at American a month before the TWA acquisition.

In fact, the TWA flight attendants have all been laid off since 2001. In that group are more than 2,000 that lost all recall rights after they had been on furlough for five years.

American eventually agreed to extend the recall rights of many other flight attendants beyond five years. However, flight attendants who had already passed the five-year mark did not get recall rights given back to them, and they're gone, period.

The coalition in its press release said the ex-TWA group "have no loyalty to the union they blame for ending their careers."

"APFA has damaged the labor movement by their failure to respect the seniority of fellow union members," McGuire said. "The TWA attendants have no loyalty to a group masquerading as a labor union that does not respect the most basic tenet of unionism."

APFA and American are in the middle of contract talks overseen by the National Mediation Board. Glading has said the union will ask the NMB to declare an impasse if the next round of negotiations, set for Feb. 27-March 3 in Washington, don't result in a deal.

American has told the Federal Aviation Administration that it may train management employees to work as replacements if APFA members conduct a strike.

We asked American spokeswoman Missy Latham on Tuesday if American was considering using ex-TWA flight attendants to replace strikers, or if the airline had talked to McGuire about the subject.

Her answer: "I've confirmed that we have done neither ... at this time."

Northwest code officially retired
Northwest Airlines code officially retired with Delta merging reservation systems

On Tuesday February 2, 2010, 5:26 pm EST

ATLANTA (AP) -- Northwest Airlines' code has been retired.

Delta Air Lines combined the Northwest reservation system into its own over the weekend, changed the code on Northwest flights to Delta's code and took down the Northwest Web site.
It was one of the final steps in the integration following Delta's acquisition of Northwest in 2008 to become the world's biggest airline.

Delta, based in Atlanta, was green-lighted to retire the Northwest code after it obtained a single operating certificate from the FAA on Dec. 31.

Employees wear the Delta uniform and airport signs have been rebranded as Delta, but some pre-merger Northwest aircraft have yet to be repainted with the Delta livery.
Northwest got its start in 1926 hauling air mail in two rented biplanes.

Bloomberg
AMR May Train Attendant Stand-Ins in Case of Walkout (Update1)
February 01, 2010, 08:24 PM EST
MORE FROM BUSINESSWEEK

By Mary Schlangenstein and John HughesFeb. 1 (Bloomberg) -- American Airlines told U.S. officials it's studyingthe training of replacement workers in the event of a flight attendants'strike at the world's second-largest carrier, the Federal AviationAdministration said.

AMR Corp.'s American hasn't taken steps to implement such a plan, AlisonDuquette, an FAA spokeswoman, said today in an interview. Any shortenedtraining sessions for replacement workers would require clearance by theagency, she said.

"The airline has told us they are considering" training new attendants,Duquette said. "If they decide to go ahead with that, we would be approvingthat training as part of the process."Alerting the FAA about a possible training need highlights the tension atAmerican as it prepares for five days of talks with the Association ofProfessional Flight Attendants starting Feb. 27.

The union has said it willseek a release from further bargaining, a step toward a walkout, if nocontract is reached.American is "working to coordinate an approved contingency training program,should it be necessary," while focusing on reaching an agreement with theflight attendants, said Missy Latham, a spokeswoman for the Fort Worth,Texas-based carrier.

Such plans are "standard in the airline industry duringcontract negotiations, " she said.David Roscow, an APFA spokesman, said the union had no immediate comment.APFA represents about 16,550 active-duty attendants at American, which makes1,900 flights a day, excluding its American Eagle commuter unit. Americanhas 1,408 attendants on furlough, including 550 laid off in 2009.

1993 Training

In 1993, American trained about 1,300 managers and volunteers in an attemptto keep more planes flying during a five-day strike by attendants. The workstoppage, which occurred just before Thanksgiving and ended whenthen-President Bill Clinton intervened, cost the carrier at least $10million a day.

Replacements underwent a 10-day course that focused on safety and wasmonitored by the FAA. Federal requirements call for 1 flight attendant forevery 50 seats on an aircraft."It's hard to know how successful something like that would be," said RobertW. Mann of consultant R.W. Mann & Co. in Port Washington, New York. "It's aseffective as replacements can be with the proviso that customers usuallynotice the difference.

"American and the attendants' union have been in talks since June 2008.Eleven contract articles remained open when the two sides ended a focused11-day negotiating session on Jan. 21. After the new talks were scheduledthis month, the union delayed a strike-authorization vote set for as earlyas Jan. 22.--

Flying The Unfriendly Skies
Brian Deagon , On Friday January 29, 2010, 7:53 pm EST

Buffeted by a decade of terrorism, endemic influenza, volatile fuel prices and two economic downturns, the airline industry is hoping for smoother skies in 2010.

The International Air Transport Association last Wednesday said airlines suffered the largest-ever decline in passenger demand in 2009, down 3.5% despite a 4.5% year-over-year jump in December traffic.

Passenger revenue among leading U.S. airlines fell 4% in December vs. the same month a year ago, the 14th consecutive monthly decline, according to the Air Transport Association of America. For the year, U.S. passenger revenue declined 18%, the biggest drop on record, exceeding the 14% decline in 2001.

That plunge stemmed from a 6% decline in passengers and a 13% decline in the average price paid to fly one mile.

Airlines aren't out of the clouds just yet, but the outlook is brighter. Carriers have reduced capacity and cut jobs over the past two years to offset declining travel because of the recession. They also got some relief from lower fuel prices in the second half of 2009.
Vaughn Cordle, an analyst with AirlineForecasts, said U.S. airline revenue declined about 17% in 2009 from 2008 but should grow 7% to 9% in 2010.

"Business travel is coming back and with capacity coming out of the system, the industry has the opportunity to get load factors and yields up," which will boost profit, Cordle said.

1. Business
Simply put, the airline industry is all about filling enough seats to fly planes at 80% capacity or better.

To reach that level in a depressed economy, airline companies have been reducing the number of planes in their inventory and the frequency of flights. Globally in 2009, airlines cut the frequency of flights 3% and routes flown 8%.

As a sign of growing confidence, airlines worldwide have been adding more flights and seat capacity in recent months.

Globally, available seats rose 3% to 294.6 million in January from a year ago, with 2.37 million flights scheduled, up 2%, according to OAG Aviation Solutions. It was the fifth consecutive month in which airline capacity has shown growth. For low-cost airlines such as Southwest Airlines (NYSE:LUV - News) and JetBlue Airlines (NasdaqGS:JBLU - News), frequency and capacity rose 10% in January from a year ago.

"It's a sign that demand is increasing," said Mario Hardy, OAG analyst and vice president of UBM Aviation.

Unlike recoveries of times past, though, airlines have been more cautious in the amount and pace of capacity increases.

"During any sign of recovery in the past they put back a greater amount of capacity than they have this time," said Hardy. "Now they're very cautious, adding capacity gradually and slowly, and are really watching the market. It is a wise strategy, which should help them manage better yields as the economy recovers."

In January, U.S. airlines actually trimmed total flights 2.7% and seat capacity 2.8%, boosting profits.

In December, Continental Air-lines (NYSE:CAL - News) increased its load factor to 83%, up 3.1% from a year ago. In its most recently reported quarter, Continental earned 3 cents per share, or $4 million, the second straight quarterly net profit after six quarters of losses.
"We are a long way from being out of the woods, (but) we are seeing some signs that business travel is beginning to head in the right direction," said Jeff Smisek, chairman, president and CEO, in a conference call on Jan. 21 after earnings were posted.

American Airlines parent AMR (NYSE:AMR - News) reduced its available seat miles 5% in the fourth quarter and boosted its load factor to 81% from 78% a year ago. Delta Air Lines (NYSE:DAL - News) increased its load factor to 81.7% from 80.6% as capacity fell 8.2%.
Name Of The Game: Match airline capacity to passenger demand to keep flights full and squeeze out as much cost as possible to deal with swings in jet fuel and other sudden unexpected costs.

2. Market
An average of 2.5 billion passengers and 50 million tons of freight are flown annually, according to a report by Oxford Economics, published in June 2009. The industry employs about 5.5 million workers and has annual revenue of about $1 trillion.

Due to the downturn in the number of passengers flying in the past two years, airlines began cutting passenger and freight capacity in early 2008. But in the first half of 2009, demand fell much faster than airlines were able to cut capacity, causing a severe slump in load factors.
In the second half of 2008 and the first half of 2009 combined, the top 10 U.S. airlines lost $10 billion, Cordle says.

Additional capacity cuts and growing demand in the second half of 2009 allowed airlines to restore load factors back to 2007 highs, resulting in most major airlines earning a profit.
Demand for first- and business-class tickets, which account for nearly a third of most airlines' revenue, improved in November from October but remained weak by historical standards.
The IATA noted that more business travelers flew on economy seats, especially on short routes.
Economy travel accounts for 91% of total international passengers and is showing signs of growth, up 2.4% from a year ago.

Across the board, industry executives have voiced growing confidence.

"We've seen clear evidence that the revenue environment is improving," said Delta President Edward Bastian in a conference call after the company's Jan. 26 earnings report. "While the comps have certainly become easier as we closed out the year, we have seen tangible evidence of sequential demand improvement, which indicates the recovery has begun."

Emerging economies such as Brazil and China represent a new growth driver. The best-rated stocks in IBD's airlines Industry Group include the likes of Brazil's Gol Intelligent Airlines (NYSE:GOL - News) and Tam (NYSE:TAM - News), China's China Eastern Airlines (NYSE:CEA - News) and Chile's Lan Airlines (NYSE:LFL - News). On Friday, a Brazilian magazine reported that Tam is looking to take a stake in Lan; Lan shares rose nearly 4%, while Tam fell about 5%.

3. Climate
Labor and fuel have consistently ranked as airlines' top two costs, forming about half of operating expenses. During the recession, U.S. airlines cut employment for 17 straight months. Full- and part-time employment totaled 379,400 in November, down 3.3% from a year ago, according to the U.S. Department of Transportation.

Fuel costs can be much more volatile and may hinder recovery efforts.

Fuel prices surged in 2008 and peaked at about $3.50 a gallon in the third quarter. By the second quarter of 2009, prices dropped 50%, helping airlines return to profitability in the second half.

Though airline executives sound optimistic, a number of issues could trip them up.
One is airline security. U.S. airlines spend $2 billion a year on security technology such as baggage scanners and personnel -- money that comes from fees tagged onto ticket prices.
That cost, already expected to grow to $5 billion by 2014, may rise faster than airlines can hike prices.

4. Technology
Breakthroughs in aircraft body design and materials have made planes lighter and more fuel efficient.

And while airlines have focused more on cutting costs than beefing up entertainment technology, more offer in-flight wireless Internet access.

Delta said in January that it plans to spend $1 billion over the next three-and-a-half years to boost fuel efficiency, remodel existing aircraft and improve customer service. It will add in-seat audio and video-on-demand on more planes.

At the same time it plans to install "winglets," curved wingtip extensions that reduce drag, on more than 170 aircraft to boost fuel efficiency as much as 5%.

5. Outlook
"We are cautiously optimistic on the airline space entering 2010," wrote Stifel Nicolaus airline analyst Hunter Keay in a mid-January research note.

But given the fragility of pricing and the industry's mixed track record of capacity, caution is the order of the day, he adds.

Among his concerns: airlines adding capacity too quickly and price fragility, which might make increasing fares difficult if fuel prices rise.

Fuel prices, as always, will play a big role in the financial performance of airlines.
Cordle projects the top 10 airlines will earn a net profit in the range of $1.5 billion to $2 billion in 2010, based on his estimate that the price of a barrel of oil will average $78.

A $10-per-barrel swing in oil prices would have a $3.5 billion hit on profit. Depending on the direction, it's possible that the top 10 airlines could earn more than $5 billion for the year or show a loss of as much as $4 billion.

Upside: The airline industry has downsized to a level that's matching demand and has seen relief in fuel prices.

Risks: A high-profile terrorist attack, a surge in fuel prices or continued high unemployment could thwart the airlines' best efforts at running a profitable business.

American Air Attendants Delay Strike Vote as Talks are Extended
By Mary Schlangenstein

Jan. 22 (Bloomberg) -- American Airlines’ flight attendants delayed a strike vote and a federal mediator extended negotiations after the two sides failed to reach a contract agreement.
Talks will resume next month, spokesmen for American and the union said.

The Association of Professional Flight Attendants had set today as the earliest date for balloting on a walkout. The union is “re-evaluating its options and consulting with our board” on when to take such a vote, Laura Glading, APFA president, said yesterday.

“Although APFA came to this session determined to reach an agreement, the company responded with nothing but concessions on top of concessions,” Glading said in a message to members on the union Web site. “Apparently the company believes this round of bargaining is 2003 all over again, and is demanding what it could not get from us seven years ago.”

AMR Corp.’s American is trying to reduce its industry- leading labor expenses while avoiding a dispute that could cripple operations. The attendants, who struck the airline for five days in 1993, are pushing to recoup pay and benefits ceded to help the company avoid bankruptcy in 2003.

The APFA represents 16,550 active attendants. Contract talks opened in June 2008, and a federal mediator joined the discussions a year ago to try to speed progress. The union and company agreed to a focused round of talks that began Jan. 11 in hopes of reaching a contract. A strike vote, if approved by members, would give leaders the authority to call a walkout.

“While the teams did not reach an agreement during this time, the company stays committed to the process and we are ready to move ahead with any proposal that makes good economic and operational sense,” American said in a statement posted on a company negotiations Web site.
Five Days of Meetings

David Roscow, a union spokesman, said the mediator scheduled five days of meetings starting Feb. 27 in Washington. An American spokeswoman, Missy Latham, confirmed that the mediator plans more negotiations between the two sides in February.

The union said it would ask the National Mediation Board to declare talks at an impasse, moving it a step closer to a possible strike, if an agreement isn’t reached when the next round ends.
Talks with the attendants may prove pivotal in American’s efforts to reach contracts with its 11,500 pilots and 25,000 employees represented by the Transport Workers Union. All three labor groups are seeking to win back pay and benefits ceded in 2003 to save AMR from bankruptcy.

American and the attendants agreed to the focused round of talks in hopes of reaching agreements on 11 remaining contract articles, including compensation, vacation and medical and retirement benefits.

No Favorable Odds
Robert Mann, president of aviation consultant R.W. Mann & Co. in Port Washington, New York, said he “wouldn’t give favorable odds on a settlement outside of super mediation.”

So-called super mediation is a last-ditch effort to reach agreement before a strike could begin. Before that can happen, the National Mediation Board would have to declare the talks at an impasse. Both sides would then be asked to agree to binding arbitration to reach a contract. If either side declined, a 30- day cooling-off period would be triggered.

Without an accord in super mediation during the 30 days, the union would be allowed to strike and American could hire replacement workers.

“I doubt any carrier could successfully fly through a reasonably effective flight attendant strike,” Mann said.

Then-President Bill Clinton ended the 1993 walkout by persuading both sides to agree to binding arbitration. American lost $300 million in revenue during the strike.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net

Airline Union, APFA, to Begin Charging Those on Military Leave for Membership Dues Accrued While Defending Their Country
FOR IMMEDIATE RELEASE
PR Log (Press Release) – Jan 12, 2010 – (Euless, Texas) —

Change will require all members on Military Leave of Absence to pay back dues upon returning to work in order to maintain employment.

In an unprecedented move, the flight attendants at American Airlines, represented by the Association of Professional Flight Attendants (APFA), have voted to change the rules governing unpaid leaves of absence as they pertain to our nation's active military reserves. The change, soon to take affect, will require all members on Military Leave of Absence to pay back dues upon returning to work as a requisite for maintaining their current airline employment.

The union, suffering economically from years of attrition brought on by the company's 2003 Restructuring, decided that there's no room for free riding members anymore, and that includes those returning from active duty in the wars in Iraq and Afghanistan. The resolution states that dues are the "near-exclusive source of revenue" for the organization, and without the much needed financial boost the union fears it would be forced to cut back on much needed services.

While the organization understands the cost of freedom may come at the ultimate price — one's own life — the cost of a convention in one of the nation's metropolises can cost more than one-hundred thousand dollars. Voter turnout was less then expected with only 42% of the members taking time during the holiday season to cast ballots — the majority of those ballots flooding in from the airline's headquarter base, D/FW.

As one flight attendant put it, "The state of Texas has a major military presence, and many of the Airline's employees have relatives and spouses in the armed forces. For us, billing veterans on their return from service was a no-brainer: What better way to acknowledge their service to our country than by handing them a bill on the union's embossed letterhead." But not all flight attendants agree with this new policy.

While most understand the need to cinch the union's fiscal belt, some don't see how billing a dozen or so veterans for union services never rendered addresses the union's economic crisis. To them it appears more like political posturing than it does a sound business decision.

As flight attendant Tracey Crullers put it, "Why is the union placing so much focus on non-active employees when it should be focusing on active ones?" further adding that "even American Airlines gives our servicemen a free First Class upgrade when available, and nothing less than a complimentary sandwich, premium snack or a frosty beverage. It's the least we can do for those protecting our freedom. The idea of billing veterans is disrespectful."

The union, when asked about the timing of the referendum, stated that "the holiday season is a time when members are so busy trying to juggle schedules that they have little opportunity to zero in on the real issues pending their careers. Had the union waited until after the holidays, voter turnout would have jumped considerably. Given the sensitive nature of the issue — billing those defending our freedom — we just couldn't risk waiting until January.

Japan Airlines files for bankruptcy protection
By TOMOKO A. HOSAKA, Associated Press Writer Tomoko A. Hosaka, Associated Press Writer

TOKYO – Japan Airlines filed for one of the country's largest bankruptcies ever Tuesday, entering a restructuring that will shrink Asia's top carrier and its presence around the world.
Staggering under a $25.6 billion debt mountain, the carrier applied for protection from creditors under the Corporate Rehabilitation Law — Japan's version of Chapter 11 — with the Tokyo District Court.

Japan's flagship airline will slash nearly 16,000 jobs, reduce pensions for retired staff, cut routes and shift to more fuel-efficient aircraft as part of its restructuring.

Some $10 billion of government cash will keep JAL's planes in the air during the reorganization. Lenders will forgive $8 billion in debt, and JAL shares will be removed from the Tokyo Stock Exchange on Feb. 20, wiping out investors.

There was no word on the outcome of a fierce tug-of-war between Delta Air Lines and American Airlines for a slice of JAL's business. Despite its woes, the airline's access to Asia is a mouthwatering prize for foreign airlines.

A state-backed turnaround agency pledged 900 billion yen ($10 billion) in financial support for JAL — 600 billion yen in credit lines and a 300 billion yen cash infusion. The bankruptcy is the fourth-largest in Japan, according to figures from Teikoku Databank, which tracks corporate failures.

"This is not the end of JAL," transport minister Seiji Maehara told reporters. "Today is the beginning of a process to keep JAL alive."

JAL President Haruka Nishimatsu resigned, bowing deeply as he apologized for the company's troubles. Kazuo Inamori, a Buddhist monk and founder of Kyocera Corp. and Japan's No. 2 mobile carrier KDDI Corp., has been tapped as its next leader.

"This is our last chance," Nishimatsu said. "I believe we can be reborn as an airline that can represent Japan again."

JAL said flights will continue uninterrupted and that frequent fliers would not lose their miles. Tokyo asked foreign governments for cooperation to keep JAL flying around the world.

The day's events culminate a process that began in October when JAL — saddled with debts of 2.32 trillion yen ($25.6 billion) — first turned to the Enterprise Turnaround Initiative Corp. of Japan for help. Under the prepackaged reorganization, it will embark on a massive overhaul to shed the fat and inefficiency that hobbled its finances.

Maehara said the turnaround would involve 15,661 job cuts — a third of JAL's payroll — by March 2013.

The carrier will retire all 37 of its Boeing 747 jumbo aircraft and 16 MD-90s, which will be replaced by 50 small and regional jets. As of March, JAL's fleet consisted of 279 aircraft, mainly from Boeing Co. It served 220 airports in 35 countries and territories, including 59 domestic airports.

JAL shares, which have lost more than 90 percent of their value over the last week, tumbled another 40 percent Tuesday to 3 yen before finishing flat at 5 yen. The company is now essentially worthless, with a market capitalization of about 13.7 billion yen ($150 million) — the price of one Boeing 787 jet.

Nevertheless, American and Delta have continued to battle over JAL.

Delta and its SkyTeam partners have offered $1 billion, including $500 million in cash to lure JAL away from American's oneworld alliance. American Airlines and its partners say they would inject $1.4 billion cash into the Japanese airline.

"Delta and SkyTeam fully support Japan airlines and stand ready to provide assistance and support in any way possible," the Atlanta-based airline said in a statement following JAL's bankruptcy filing.

Maehara declined to comment on which U.S. carrier the government preferred and said it is "not in a position to force any partners on JAL."

The bankruptcy represents a humbling outcome for Japan's once-proud flagship carrier which was founded in 1951 and came to symbolize the country's rapid economic growth. The state-owned airline expanded quickly in the decades after World War II and was privatized in 1987.
But it soon became the victim of its own ambitions.

When Japan's property and stock bubble of the 1980s burst, risky investments in foreign resorts and hotels undermined its bottom line. JAL also shouldered growing pension and payroll costs, as well as a network of unprofitable domestic routes it was politically obligated to maintain.

More recently, JAL's passenger traffic has slowed amid the global economic downturn, swine flu fears, competition from Japanese rival All Nippon Airways Co. and a spate of safety lapses that tarnished its image. It lost 131.2 billion yen ($1.4 billion) in the six months through September.
Geoffrey Tudor, a principal analyst at Japan Aviation Management Research and former JAL employee, said the airline needs to be leaner and meaner.

"It wasn't commercially brutal enough in dealing with the facts of economic life," said Tudor, who spent 38 years at the Japanese carrier and now watches its collapse with a mixture of sadness and frustration.

Its four government bailouts since 2001 only exacerbated JAL's problems, officials now say.
Passengers seemed to agree as much.

"I guess they did not work in earnest and so fell into this situation," said Isao Sasaki, 72, who waited in line Tuesday at a JAL check-in counter at Tokyo's Haneda Airport. "Weren't they spoiled as they always had protection from the government?"
___
AP Writers Jay Alabaster, Yuri Kageyama and Mari Yamaguchi, and APTN staffer Kaori Hitomi contributed to this report.

FDA finds roaches, listeria at airline caterer

FDA cites LSG Sky Chefs airline food facility in Denver for roaches, listeria
By David Koenig, AP Airlines Writer , On Monday January 4, 2010, 8:24 pm EST DALLAS (AP)

-- A company that prepares food for major airlines says it has cleaned up its Denver kitchen after federal inspectors found live and dead roaches and listeria bacteria at the facility.The Food and Drug Administration warned the company, LSG Sky Chefs, that it could be barred from selling food to the airlines at the Denver airport if it flunks further inspections.

LSG Sky Chefs said Monday it took the FDA's comments seriously, fired the general manager and head chef, and believes it will pass a follow-up review.LSG is owned by Deutsche Lufthansa AG, the big German carrier.

Its U.S. subsidiary provides food to Delta, American, United and other airlines from 43 kitchens around the country.According to an FDA letter to the company, inspectors who examined the Denver facility found live and dead roaches "too numerous to count" in several areas of the kitchen, including at least 40 live insects in the silverware station.

The FDA said inspectors saw employees touching food with bare hands or while wearing unwashed gloves. They also noted problems with the building, including water dripping from the ceiling into utensil-cleaning areas and holes in walls that could house insects or vermin.

H. Thomas Warwick Jr., director of the FDA's Denver office, said in an interview that such conditions were more common 10 to 15 years ago but are seen rarely today because of better sanitation practices and more inspections by federal, state and local agencies.LSG "has been pretty good" over the years, Warwick said.

"This one sort of slipped a little. We will be back very shortly."LSG spokeswoman Beth Van Duyne said the company took the FDA's findings seriously and fired the general manager and executive chef in Denver. When chemical treatments failed to kill listeria found in a kitchen floor drain, the company replaced the pipes and drain, she said.

Listeria is a bacteria linked to food-borne illness."We make no excuses for this report," Van Duyne said. "We've taken immediate and aggressive actions after we received the initial findings in October. We're confident we'll pass" the follow-up inspection.

Van Duyne said the company hasn't received any reports of airline passengers becoming ill from its food. She said FDA inspectors were back in the Denver building on Monday.

Mesa Air files for Ch. 11 bankruptcy protection
Mesa Air files for Chapter 11 bankruptcy protection, will restructure its business

On Tuesday January 5, 2010, 8:07 am EST

PHOENIX (AP) -- Mesa Air Group Inc., whose operations include flying regional routes for major airlines like Delta, United and US Airways, has filed for Chapter 11 bankruptcy protection, hoping to shed financial obligations for leases on airplanes it no longer needs.

Mesa, which currently runs 130 aircraft, said the filing will allow it to reorganize its operations and allow it to get rid of its extra planes and become more competitive.

Mesa said Tuesday that its go!-Mokulele Hawaiian joint venture with Mokulele Airlines is not included in the bankruptcy filing and will run a full flight schedule.

It said the rest of its operations are expected to run normally during the restructuring process, with Mesa anticipating it will win court approval to continue paying workers and the fulfilling code-share partner agreements within the next few days.

In November, United Airlines chose not to extend a deal under which Mesa ran 26 regional jets for that carrier. The Phoenix company also runs regional flights for carriers including Delta Air Lines and US Airways.

Regional jets are smaller than the planes that large airlines use on most of their routes. They are often used to bring travelers to hub airports, where they can connect with other flights.
The company also expects its restructuring to help it more quickly resolve its lawsuit against Delta, in which Mesa is seeking more than $70 million in damages. Delta has tried to terminate their deal.

Chairman and CEO Jonathan Ornstein said in a statement that Mesa has spent the past two years working with lessors, creditors and others in order to restructure its financial obligations, which in turn helped it get rid of more than $160 million in debt obligations; rework inventory management and engine overhaul deals and return some planes.

Ornstein said the company has enough liquidity to support itself during the restructuring.
Mesa voluntarily filed its Chapter 11 petitions with the U.S. Bankruptcy Court for the Southern District of New York.

Mesa shares, which have traded between 1 cent and 36 cents over the past 52 weeks, closed Monday at 12 cents.

Mesa is a major commuter carrier and operates flights as Delta Connection, US Airways Express and United Express under agreements with Delta, US Airways Group Inc. and United Airlines.

Bye Bye Northwest Airlines, Pan Am, Eastern, Ozark, National, Braniff and Trans World Airlines

Northwest Airlines was founded on September 1, 1926, by Colonel Lewis Brittin. Based in Minnesota, the name for the airline referred to theNorthwest Territory, not it's early days as main carrier between the UnitedStates and the Orient.

Northwest did rebrand itself to Northwest OrientAirlines in the 1950s but did not change its legal name from NorthwestAirlines. They dropped "Orient" from their operating name and repaintedaircraft after buying Republic Airlines in the late 1980s.

That move createdthe three hub (Minneapolis, Memphis, and Republic's hub in Detroit) systemthat made them one of the nation's top airlines.

Delta clears final regulatory hurdle in NWA merger
Atlanta Business Chronicle - by J. Scott Trubey Staff Writer
12/31/2009
Another Legacy Carrier Bites the Dust

Delta Air Lines Inc. and Northwest Airlines are now officially one.

On Thursday, the Federal Aviation Administration approved a single operating certificate (SOC) for the merged Delta, the final regulatory hurdle, which in essence, makes it one airline.

The awarding of the SOC comes 14 months after government approval for Delta (NYSE: DAL) to acquire Eagan, Minn.-based Northwest and forge the world’s largest carrier.

But plenty of work remains before Delta has completely swallowed Northwest.

“While today’s change will go unnoticed by our customers, achieving the single operating certificate paves the way for the final stages of our integration throughout next year,” Delta Chief Operating Officer Steve Gorman said in a memo to employees.

In the first quarter of the New Year, Gorman said tickets and fares will be integrated in the Delta reservation system, eliminating any distinction between buying tickets and making “every flight a Delta flight.” Northwest's Web site, nwa.com, also will disappear.

“We accomplished the single operating certificate in record time and without negative impact to our daily operation,” Gorman wrote. “It is the people of Delta who continue to ensure our merger integration is thoroughly planned and well executed. Thanks for your dedicated focus and effort, and for continuing to provide excellent service to our customers.”

It has been an eventful 428 days for the airlines as they worked to integrate in the most challenging economic environment since World War II.

The combined Delta and Northwest has lost $2.6 billion (including special charges and goodwill) in the four quarters since the U.S. Department of Justice approved the merger Oct. 29, 2008. The carrier expects a $1.5 billion loss for full-year 2009.

But officials and analysts say the merger has made Delta among the strongest of U.S.-based airlines and positioned to gain more than $2 billion in annual cost savings. In 2009, the airline expects a $700 million cost benefit.

Since the carriers merged, Wall Street collapsed, setting off a global recession that gutted passenger demand among business travelers and consumers alike; the world was gripped by fears of the H1N1 flu pandemic, which further chilled demand; and just last week a Detroit-bound Northwest airliner was the subject of a foiled terrorist attack that could further shake a slowly recovering industry.

Delta has also announced a bold hub expansion into New York City, completed a groundbreaking transatlantic joint venture with Air France-KLM and made a bid to lure struggling Japan Airlines Corp. into its SkyTeam alliance away from rival American Airlines’ partnership.

The SOC allows Delta and Northwest to combine code and operate as a single entity, and in most cases its employees can work together as one. The certificate is approval of the combined Delta’s safety protocols, training, maintenance procedures, manuals, computer systems and flight dispatching.

Integrating systems as vast as two major airlines is an enormous undertaking.

The combined airline has more than 70,000 employees (many from Delta that were non-union and nearly all from Northwest that were organized), 385 manuals and scores of computer software and hardware systems, including distinct reservations platforms and Web sites.
The airlines worked aggressively for months to merge as many components as possible without the SOC.

Its frequent flyer programs have merged and more than 16,000 pre-merger Northwest employees are also now wearing Delta uniforms.

About 200, or close to 80 percent, of pre-merger Northwest mainline jets now are painted in Delta livery. More than 240 former Northwest jets sport Delta interiors.

And all but one of its 247 airport stations worldwide have been rebranded Delta’s colors. The last, Philadelphia, is expected to convert in the first quarter of 2010 following a facility upgrade.
“It’s important to have a single brand represented to our customers and a tremendous accomplishment,” Delta CEO Richard Anderson said in a call to employees Dec. 24.

Delta, Northwest one step closer to becoming one
By Kelly Yamanouchi
The Atlanta Journal-Constitution
Sunday, December 27, 2009

At the end of this month, Delta Air Lines expects to hit one of the most significant milestones in its merger with Northwest Airlines, more than a year after the deal closed.

The Atlanta airline expects to get a single operating certificate, which allows the two carriers not just to be a single airline on paper, but to operate as one.

The certificate from the Federal Aviation Administration clears the two operations to use a single carrier code and combine operations, culminating more than a year of paperwork and reviews. For passengers, it enables Delta to present itself and function fully as a single airline. Among employees, pilots from both airlines will be able to fly together and other workers can begin to join forces.

“It means there’s one airline instead of two,” said FAA spokeswoman Kathleen Bergen. “Everything’s merged from a safety standpoint.”

In order to accomplish that, an FAA team has reviewed Delta’s proposed combined operations, manuals and materials to ensure they meet safety standards.

The certificate means the FAA has decided the merged airline can safely operate under unified safety procedures, training, maintenance operations, flight dispatch systems, computer systems and manuals.

Delta has integrated about 385 manuals and completed more than 10,000 tasks. Teams at Delta “closely evaluated each Delta and Northwest program, process and operating specification to determine the best choice for the combined carrier,” said Delta spokeswoman Betsy Talton.
The FAA accepted the airline’s plan toward getting the certificate in September 2008, then monitored it as work progressed.

“We’ve had a lot of great work done by our operational teams,” said Delta’s chief operating officer, Steve Gorman, in recent comments to financial analysts. On Jan. 1, the “invisible curtain between the two certificates” in flight control, aircraft routing and crew tracking will disappear, he said.

The combined pilot procedures will go into effect, and pilots will “open up that cellophane on Jan.1 with new manuals,” Gorman added.

Delta has taken steps that did not require FAA safety approvals, such as blending frequent flier programs, repainting most of Northwest’s planes, outfitting Northwest employees with Delta uniforms and allowing customers to book flights from either Web site.

The single operating certificate —- or SOC, as it is known —- will allow Delta to move this winter to a single airline code so that all Northwest tickets will become Delta tickets and all Northwest flights will become Delta flights.

Northwest’s Web site, nwa.com, will disappear. Delta and Northwest pilots will be trained on each other’s aircraft and will be able to share a single cockpit, and the airline will gain full flexibility to schedule planes and routes from the two carriers interchangeably.

“We need to get SOC before we can make that change,” Talton said. “We’re taking a careful, phased approach to integrating the airlines to make the process seamless for customers.”
She said customers should expect travel plans to continue with no changes.

Having two Web sites and two carriers more than a year after the merger is “complex to the traveler,” said Glen Hauenstein, Delta’s executive vice president of network planning and revenue management, at the investor day. “We have not been able to maximize the value proposition of the merger yet.”

The single code will eliminate any remaining confusion from having two different airline operations that have been essentially operating under a single Delta name at airports, on employee uniforms, at airports and on planes, Hauenstein said.

“That is almost behind us. By the end of the first quarter we will eliminate any customer confusion as far as dual sites” and dual paths, he said.

In the cockpit, the certificate will simplify communications with controllers. Northwest crews have continued to use the “Northwest” call sign and the “NWA” identifier in flight plans. An FAA notice directs pilots to use terminology such as “Detroit Ground, Northwest 222 with you, Delta colors.” The words “Delta colors” are also filed with flight plans to avoid confusion when planes are designated as Northwest aircraft but painted with Delta’s paint scheme.

The certificate will also mean the virtual disappearance of the company that was built over decades from its Minneapolis headquarters.

But even with the single operating certificate, Delta still won’t be done with its integration. As is often the case with airline mergers, labor issues linger.

Delta had hoped to resolve the biggest last summer through elections among flight attendants and certain ground workers to determine if they will be unionized or not. Northwest workers in those groups are unionized while Delta’s are not. But a federal labor board proposed a change in election rules that could make it much easier for airline workers to unionize, and two key unions withdrew their applications toward union elections at Delta pending the change.

The rule change, if finalized, is not likely to take effect until next year, pushing the elections into 2010 and dashing Delta’s hopes of resolving labor issues quickly.

Flight attendants and ground workers will still work under different rules and job terms until representation elections are complete.

Still, getting the approval by year’s end will mean Delta accomplished the milestone more quickly than the last two big airlines to merge, US Airways and America West. US Airways took two years to get a single operating certificate.

Denver, St. Louis, Nashville, Seattle and Baltimore/Washington are the big winners in Southwest Airlines' new plans to add more flights to its summer schedule next year.
By Roger Yu, USA TODAY

Denver, St. Louis, Nashville, Seattle and Baltimore/Washington are the big winners in Southwest Airlines' new plans to add more flights to its summer schedule next year.

The discount carrier says it's adding 65 round-trip flights and eliminating 24 — a net gain of 41 — for its schedule from May 9 through Aug. 13. Many additions are going to markets where it has been beefing up operations recently.

At Baltimore/Washington Thurgood Marshall, where Southwest is the largest carrier, the number of daily flights will increase by 10, bringing its total daily departures to 181. Its new 2010 destinations from Baltimore include Los Angeles, Seattle-Tacoma and Panama City, Fla.'s, new airport, which will open in the spring.

Southwest will add nine more at Nashville, including new service to St. Louis, Seattle, Oakland and Panama City.

At Denver, Southwest has added nine more daily flights to its May schedule, including new Saturday-only non-stop service to New York LaGuardia. It has plans to add 15 more in August but won't release details until early next year.

St. Louis will get 10 added daily departures and eight new non-stop markets, including service to Los Angeles, San Diego, New Orleans, Nashville and Raleigh/Durham, N.C.
Seattle will get eight more flights.

Seattle's Sound Transit finished a 1.7-mile extension on Saturday of its light-rail line to Seattle-Tacoma International Airport, allowing people to ride public transportation to the airport from various parts of the metropolitan area.

Seattle opened the Central Link line in July, which connected travelers from downtown Seattle to Tukwila, a suburb near the airport. The airport had been using free shuttle service from the Tukwila station to Sea-Tac until now.

The newly opened SeaTac/Airport Station is located outside a parking garage.

Several airports are offering free gift-wrapping service this week, as travelers are advised to leave gifts unwrapped before checking them or taking them through security checkpoints to avoid secondary screening.

Volunteers at Phoenix Sky Harbor will offer gift wrapping past security Monday through Thursday. The Container Store and Southwest Airlines (LUV) are teaming for free wrapping service at the following airports on Monday: Dallas Love Field (Gate 5); Phoenix (D Gates); Denver (Gate C41); St. Louis (Gates 14 and 16) and Baltimore/Washington (Gates B1, B2 and B3).

U.S. Airways (LCC) launched daily, non-stop service last week to Honolulu and Rio de Janeiro from Charlotte, its largest hub.

The carrier also began four-times-weekly non-stop service to Montego Bay, Jamaica, from its home airport, Phoenix, last week.

JetBlue (JBLU) is adding its fourth destination in the Dominican Republic. Its new service to Punta Cana, a popular beach resort area in the easternmost part of the island nation, is scheduled to begin at New York JFK on May 6 and Boston Logan two days later.

A year after suspending its Boston-San Jose route because of high fuel costs, JetBlue said last week it will resume daily, non-stop flights between the two technology-centric cities on May 13.

AirTran (AAI) will resume scheduled service between Gulfport/Biloxi, Miss., and its hub in Atlanta on Jan. 8, replacing its current charter service between the two cities.

American Verses Delta Plus Japan Airlines

American Airlines (AMR) and Delta Airlines (DAL) are not waging war over Asia’s Japan Airlines to strengthen foreign relations, but to pad their own bottom lines. In the latest move, American said Wednesday it could again up the ante for JAL from its current bid of $1.1 billion.

The US airline, along with the OneWorld alliance, a contingent of 11 airlines, and the private equity firm TPG have tried to make the case that its proposal would be the best solution to JAL’s problems: Namely, $15 billion of debt, huge operating costs, tight competition, and its likely fourth annual loss.

"Conceivably there could be a bigger investment made by the Oneworld/TPG/American group depending on the circumstances that have to be worked out with the government and with JAL," said American Airlines Chief Executive Gerard Arpey in press conference Wednesday in Tokyo after a meeting with Japan’s Minister of Land, Infrastructure, Transport and Tourism.

American stipulates that its proposition would be the most worthwhile for JAL because it already has a partnership in place under the OneWorld alliance --of which they're both members -- and that JAL would gain another $100 million in revenues annually from the alliance on top of the $500 million it already garners from the pairing.

“American Airlines has a strong interest in seeing JAL succeed because JAL's success ultimately means success for American Airlines,” said Arpey. “In short, our interests are aligned.” Yet, American faces a tough argument from Delta Air Lines and its SkyTeam partners, an alliance of 12 carriers, which countered with a $1 billion offer for JAL in November.

Delta argues that its Asian presence (it gained a hub outside Tokyo through the Northwest merger) would help it more easily integrate with JAL. American contends this alliance would impede competition in the country, giving only two alliances access to the region. “Our direct investment offer is worth more than twice to JAL as any other proposal.

The difference is even greater when you consider the commercial implications of JAL exiting a superior global alliance with the strongest U.S. network for a less desirable global alliance and US network,” added Aprey at the press conference in Tokyo. “We estimate this would cost JAL hundreds of millions of dollars per year.” Yet, it isn’t just what American has to offer JAL, but what the Japanese airline can do for the legacy carrier. A recent “Open Skies” agreement between the US and Japan opened up the sky competition (previous arrangements favored certain carriers over others).

This would make an alliance between Delta and JAL immune to antitrust regulations. It also paves the way for American to enter the market. All of the US carriers, legacy and discount alike, have been hit hard by fuel expenses, a slowdown in travel, and technological failings. The best way for each of these airlines to regain footing is to find ways of expanding their international dealings, which can garner premium prices for longer flights. Japan is one of the most attractive and untapped areas of the world for the aviation sector.

All of the legacy carriers would benefit from JAL’s expansive domestic network. It offers the US airlines a built-in infrastructure, as well as a locally well-known brand name to attach themselves to -- accounting for the high value that each of the carriers is willing to bid. “AMR has the most to lose and Delta the most to gain if JAL defects from OneWorld to SkyTeam,” said JPMorgan analyst Jamie Baker in a recent note.

Legacy carriers say they see premium-travel growth ahead
The high-paying business traveler is returning, but in smaller numbers
Dec. 9, 2009, 3:40 p.m. EST
By Christopher Hinton, MarketWatch

NEW YORK (MarketWatch) -- Legacy carrier executives from Delta to US Airways said Wednesday they are seeing early signs that premium-paying business travelers are returning to the skies, but cautioned growth would be slow.

The airline executives had gathered in New York for an analyst conference to highlight trends in their business following a horrific two years of surging jet fuel prices and a sharp economic contraction that sent demand plunging.

"This environment hasn't been like anything we've seen before," said US Airways President Scott Kirby. "All of us have been scared, frankly."

But things are starting to turn around and are expected to get better next year with positive industry unit-revenue growth, albeit due to a nearly catastrophic 2009.

"We speak of bouncing back, but only because 2009 was so bad that just an anemic move will be significant," Kirby said.

Slammed the hardest was high-yielding premium travel, specifically business travel, as corporations tightened spending in the uncertain economy. Leisure travel remains fairly steady, though carriers had to rollback ticket prices to keep demand going.

Following significant declines in business revenue late last year and for the first part of this year, US Airways saw its first month of growth in November -- up 5% from a year ago, Kirby said.
"This is very indicative of demand recovery," he said.

That observation was echoed among other legacy executives, the heads of the last five old school network carriers that also manage a significantly large number of corporate accounts.

It's also evident among investors, who have bid up the airline sector benchmark to near two-year highs. Since the end of October, the NYSE Arca Airline Index has jumped about 30%.

For Delta Air Lines corporate ticket volumes plunged 35% over April and May this year, with corresponding revenue down about 50%, according to the Atlanta carrier's chief financial officer, Hank Halter.

Corporate revenue represents about 20% of Delta's overall passenger revenue.

Since then, the erosion in volume sales have been decelerating, and crossed into ticket growth in mid-November, though business revenue was still down some 10% from a year ago.

"But that said, you can see a steady progression," Halter said. "It's certainly not a hockey stick, but it certainly is improving and that steady pace continues."

Delta expects to see a return to passenger revenue growth within the first half of 2010, Halter added.

Carriers more sensitive to corporate travel felt the change earlier than other. Over at United parent UAL Corp. corporate and premium travel began returning as early as May.

"Our networks are more closely aligned with corporate and premium traffic than most of our peers," according to Chief Financial Officer Kathryn Mikells. "Domestically, we have fewer seats to fun destinations like Florida and more deployed in places like...New York to L.A., as an example."

Since May, UAL saw steady improvement in both corporate revenues and premium cabin bookings," Mikells said.

"While the numbers clearly are still not where we would desire them to be, it is a very encouraging trend line," she said.

American Airlines parent AMR Corp. said its advance bookings for February are flat versus a year ago with international demand offsetting a decline in domestic sales.

"I think we are seeing improvement in both leisure and premium traffic at this point," said Beverly Goulet, AMR's treasurer.

Christopher Hinton is a reporter for MarketWatch based in New York.

Boeing 787 First Test Flying Next Week
Friday, December 11, 2009, 10:48am CST
Wichita Business Journal - by Daniel McCoy

The Boeing Co. announced Thursday that its long-delayed 787 Dreamliner would make its first flight next week.

The first flight could happen as early as Tuesday, depending on weather conditions, according to a report from the Wall Street Journal.

Wichita-based Spirit AeroSystems Inc. makes the forward fuselage section and engine pylons for the Dreamliner.

The 787, Boeing’s next-generation commercial airplane, has been delayed more than two years. The most recent delay was in June following the discovery of a design problem where the wing meets the fuselage during testing.

Even following a successful first flight, the plane will continue to undergo testing for up to as much as a year. The company still expects deliveries to begin in the fourth quarter of 2010.
On Tuesday, Boeing received an order for 25 Dreamliners from United Airlines, which also ordered 25 Airbus A350s.

British Airways cabin crews vote to strike

1 hr 17 mins ago
LONDON – British Airways cabin crews will strike over the busy Christmas period, throwing the plans of thousands of holiday makers into uncertainty.

The Unite union said Monday crew members plan to walk off the job on Dec. 22 and strike for 12 days.

The union says 92.5 percent of the workers who voted were in favor of the action.

BA staff members are unhappy about layoffs and changes in work practices that they argue have been illegally imposed by the airline.

BA has announced sweeping changes as part of its bid to cut costs after suffering big losses amid lower demand for travel during the global recession. It says plans to axe thousands of jobs, freeze pay for current staff and offer lower wages for new employees are necessary for its survival.