Airlines preparing for cargo-checking deadline
Airlines gearing up for Aug. 1 deadline to screen all cargo
AP Airlines Writer, On Friday July 16, 2010, 4:55 pm EDT
FORT WORTH, Texas (AP) -- Airlines are buying giant X-ray machines and other machinery to meet an Aug. 1 deadline to begin screening all cargo that goes on passenger planes.
Federal officials say the new rules will close a large security gap. Just four years ago, only half of all cargo was inspected.
But the system to guard against terrorists getting a bomb on a plane is far from airtight. Cargo coming into the U.S. from other countries is still often not inspected.
In a sweltering warehouse next to Dallas-Fort Worth International Airport on Friday, American Airlines workers were being trained in the use of a 12-foot-high black box, an X-ray machine that was installed just two weeks ago.
Nearby, another airline employee traced a wand over boxes, looking for traces of explosives. The worker said fertilizer sometimes triggers an alarm.
To reduce the load on airlines, about half of all domestic cargo is being screened at more than 800 facilities run by companies certified by the Transportation Security Administration. The TSA relies on those operators to ensure that cargo isn't opened before reaching the airport.
Without those 800 centers taking half the load, it would take American hours longer to screen each cargo shipment. It also would force shippers to deliver their goods to the airport several hours earlier, defeating the advantage of speedy air freight, said Dave Brooks, president of American's cargo division.
For cargo that American screens, the airline is raising its charge and forcing shippers to get to the airport two hours earlier, starting Aug. 1.
Douglas Brittin, general manager of the TSA's cargo division, said security of cargo aboard passenger planes -- long identified as a threat -- has steadily improved. Since the beginning of 2009, the TSA has approved 77 new pieces of equipment to screen cargo for explosives, chemicals and other threats.
Last month, the Government Accountability Office said the TSA was making progress toward the requirement to screen all cargo on passenger planes. But the GAO said the TSA could lack resources to properly monitor those 800 independent inspection centers, and had no technology for inspecting large shipments consisting of many packages.
The TSA is talking to aviation officials in other countries to close another gap -- cargo on planes arriving in the U.S. from other countries. The TSA's top official told Congress in March that it could be years before all inbound cargo is screened.
Inbound shipments that the TSA deems high risk -- officials won't say how they decide -- must be screened before the plane heads for the U.S. In other cases, shipments must be inspected after landing in the U.S. before being loaded on another plane.
For example, if the airline can't prove that produce being shipped from South America to Japan through the U.S. has been screened to TSA standards, "they're going to have to take it apart and screen it before it flies to Japan," Brittin said.
Friday, July 16, 2010
Patient buyers retain high hopes for 787
By Pilita Clark, Aerospace Correspondent
Published: July 16 2010 19:35 Last updated: July 16 2010 19:35
The threat of more delays for Boeing’s already overdue 787 Dreamliner has cast a shadow over the world’s newest passenger jet as it heads for its first public appearance outside the US at England’s Farnborough air show this weekend.
Flight test holdups could push deliveries to Japan’s All Nippon Airways, the Dreamliner’s launch customer, back from the end of this year to the first weeks of 2011, the US manufacturer said, though it still hopes to meet the original deadline.
The latest potential setback follows a series of costly production hiccups that have caused delays of more than two years for the aircraft, Boeing’s first new model jet in nearly 15 years.
But when it finally enters service, the fuel-saving 787 promises to shake up the landscape for the 50-plus customer airlines which have ordered a total of 863 of the aircraft, making it, according to the US manufacturer, the fastest-selling model it has produced.
Unlike traditional aluminium aircraft, nearly 50 per cent of Boeing’s Dreamliner, including its wings and fuselage, will be made of light, carbon fibre composites, similar to the material used in golf clubs and tennis racquets.
While experienced observers warn that new aircraft sometimes fail to meet promised claims, customers hope this and other technical advances will allow them to connect distant cities more efficiently.
“We’re quite ambitious to expand our destinations,” says Keisuke Okada, the ANA board member who guided the airline’s decision to become the 787’s first customer, adding that he hoped it could be used on routes from Japan to the west coast of the US and Europe.
Like most 787 customers, Mr Okada was reluctant to give rivals a detailed idea of precisely which new routes ANA might open.
Continental Airlines of the US is an exception. It says it will start a pioneering nonstop flight from its Houston hub to Auckland in New Zealand once it gets its first 787 next year.
All the Dreamliner buyers believe the jet will offer a competitive edge.
“Given fuel is now the biggest single item in an airline’s operating cost, a 25 per cent saving per seat is a big change in the economics of the aircraft,” says Edmond Rose, commercial director at Virgin Atlantic in the UK, which is due to get its first Dreamliner in 2014 and is looking at routes to Asia, Africa and Latin America.
“We expect the 787 to make it possible to fly some routes that with our current fleet would be uneconomic,” he said, citing, for example, the fact that a Honolulu service would be economic.
Virgin could be beaten to that route by Tui Travel, Europe’s largest travel group. Its UK airlines are due to see Britain’s first 787 Dreamliner in January 2012.
“It will open up any number of destinations,” says Mark German, Tui’s head of aircraft management. Beyond distance, he hopes Boeing’s claims of better internal pressurisation and humidity levels in the 787 will deliver a better flying atmosphere, making it popular with the group’s holidaying passengers.
“If people get off after a 12 hour flight feeling better than after a 12 hour flight on a legacy carrier flight, they should be able to say, ‘You know what? I’m going to go on that again. I wasn’t groggy, I wasn’t dried out, it was a complete change in how I’ve done this holiday before’.”
By Pilita Clark, Aerospace Correspondent
Published: July 16 2010 19:35 Last updated: July 16 2010 19:35
The threat of more delays for Boeing’s already overdue 787 Dreamliner has cast a shadow over the world’s newest passenger jet as it heads for its first public appearance outside the US at England’s Farnborough air show this weekend.
Flight test holdups could push deliveries to Japan’s All Nippon Airways, the Dreamliner’s launch customer, back from the end of this year to the first weeks of 2011, the US manufacturer said, though it still hopes to meet the original deadline.
The latest potential setback follows a series of costly production hiccups that have caused delays of more than two years for the aircraft, Boeing’s first new model jet in nearly 15 years.
But when it finally enters service, the fuel-saving 787 promises to shake up the landscape for the 50-plus customer airlines which have ordered a total of 863 of the aircraft, making it, according to the US manufacturer, the fastest-selling model it has produced.
Unlike traditional aluminium aircraft, nearly 50 per cent of Boeing’s Dreamliner, including its wings and fuselage, will be made of light, carbon fibre composites, similar to the material used in golf clubs and tennis racquets.
While experienced observers warn that new aircraft sometimes fail to meet promised claims, customers hope this and other technical advances will allow them to connect distant cities more efficiently.
“We’re quite ambitious to expand our destinations,” says Keisuke Okada, the ANA board member who guided the airline’s decision to become the 787’s first customer, adding that he hoped it could be used on routes from Japan to the west coast of the US and Europe.
Like most 787 customers, Mr Okada was reluctant to give rivals a detailed idea of precisely which new routes ANA might open.
Continental Airlines of the US is an exception. It says it will start a pioneering nonstop flight from its Houston hub to Auckland in New Zealand once it gets its first 787 next year.
All the Dreamliner buyers believe the jet will offer a competitive edge.
“Given fuel is now the biggest single item in an airline’s operating cost, a 25 per cent saving per seat is a big change in the economics of the aircraft,” says Edmond Rose, commercial director at Virgin Atlantic in the UK, which is due to get its first Dreamliner in 2014 and is looking at routes to Asia, Africa and Latin America.
“We expect the 787 to make it possible to fly some routes that with our current fleet would be uneconomic,” he said, citing, for example, the fact that a Honolulu service would be economic.
Virgin could be beaten to that route by Tui Travel, Europe’s largest travel group. Its UK airlines are due to see Britain’s first 787 Dreamliner in January 2012.
“It will open up any number of destinations,” says Mark German, Tui’s head of aircraft management. Beyond distance, he hopes Boeing’s claims of better internal pressurisation and humidity levels in the 787 will deliver a better flying atmosphere, making it popular with the group’s holidaying passengers.
“If people get off after a 12 hour flight feeling better than after a 12 hour flight on a legacy carrier flight, they should be able to say, ‘You know what? I’m going to go on that again. I wasn’t groggy, I wasn’t dried out, it was a complete change in how I’ve done this holiday before’.”
Airlines Cruise to Profits With Newfound Strength
By SUSAN CAREY
Two years after U.S. airlines were pounded by soaring fuel prices followed by the recession, the industry appears poised to post its first meaningful profit since 2007's third quarter.
The major U.S. carriers will begin reporting second-quarter results next week, led by Delta Air Lines Inc. on Monday. Analysts expect all but one of the nine largest carriers—AMR Corp.'s American Airlines—to be in the black for the quarter and all of 2010, thanks to moderate fuel prices, an improving U.S. economy, fewer seats on offer and increased revenue from checked luggage and other optional services.
Analyst Michael Derchin of CRT Capital Group LLC even foresees a slight profit for American, although Wall Street's mean estimate calls for a quarterly loss of three cents a share. Mr. Derchin forecasts that the largest airlines will report net income of $1.7 billion in the June quarter, compared with a loss of nearly $1 billion a year earlier.
"Clearly, the economy is providing a considerable amount of lift for all...carriers," Delta President Ed Bastian said at an investor conference last month.
Still, nobody's breaking out the bubbly. That's because unit revenue—the key metric of revenue taken in for each passenger flown a mile—is only now approaching levels last seen two years ago. UAL Corp.'s United Airlines, which has been posting industry-leading unit revenue gains in recent months, said it rose 31% in June versus the year-ago month. Compared with June of 2008, unit revenue was up between 5% and 6%.
The Air Transport Association trade group says unit revenue for the 12 months ended in May was 10.9 cents for each seat flown a mile among airlines that report such data. In the same period ended in May 2008, the number was 11.5 cents, a sign the industry still is climbing out of a hole.
John Heimlich, the ATA's chief economist, sounded cautionary notes in a speech this week to the International Aviation Club. "Better does not equal good," he said, noting the high U.S. unemployment rate and the failure of U.S. gross domestic product to snap back to 2008 levels.
Fuel prices, while moderate, remain higher than last year, he said. Airlines have poor credit ratings and loads of debt. And the mature domestic market isn't likely to provide future growth opportunities.
Airlines are benefiting from a return of premium business travelers, who curtailed travel sharply during the depths of the recession, especially on international routes. Delta last month estimated its second-quarter unit revenue was 20% higher than a year ago, and its June unit revenue on Asian routes leapt 50% from a year ago.
The Atlanta-based carrier, the world's largest by traffic, said revenue from corporate contracts, which accounts for about a fifth of its total sales, was up 63% in May from the prior year.
Also helping are cuts that airlines have made to fleets and available seats. U.S. carriers are expected to deploy 8% less capacity domestically in the second half of 2010 than in 2007, according to Daniel McKenzie, an analyst for Hudson Securities Inc. Including overseas flights, carriers are flying 5% fewer seats overall. Airlines have dropped many unprofitable flights and don't have to fill planes with as many leisure fliers on cheap tickets.
Carriers also are raking in new revenue by imposing fees on services such as checked luggage, blankets, early boarding and seat selection. The federal Government Accountability Office estimates these fees brought in at least $3 billion last year. The ATA puts the figure closer to $5 billion when ticket-change and cancellation fees are added. Either way, it's a drop in the bucket compared with the industry's $155 billion in 2009 revenue.
Michael Linenberg, a Deutsche Bank analyst, estimates that United, Delta, Alaska Air Group Inc. and Southwest Airlines Co. will post double-digit operating margins for the period. Investors also seem upbeat, having driven up share prices for most big airlines since the end of 2009.
AMR seems to be the odd man out. Its stock has fallen about 11% since then, and most analysts don't expect it to be profitable for 2010. Mr. McKenzie of Hudson Securities said in a research note that he's beginning to worry AMR "may prove an earnings zombie over this next cycle," as the company struggles with high debt, labor conflicts and a fleet strategy that isn't as effective as those of rivals.
Gerard Arpey, AMR chairman and chief executive, said in an investor conference last month that he expects big payoffs from the company strengthening its market position in the four largest U.S. cities, along with its efforts to deepen its partnership with members of its Oneworld marketing alliance. Together, they should provide $500 million in annual cost and revenue benefits by 2012, he said.
Mr. Arpey said American's labor-cost disadvantage should ease as rivals reach new contracts with workers. And this week, the European Union granted American antitrust immunity to cooperate more closely with British Airways PLC and Iberia Líneas Aéreas de España SA across the Atlantic, a step that will give them the same benefits two other big airline groups already enjoy.
Write to Susan Carey at susan.carey@wsj.com
By SUSAN CAREY
Two years after U.S. airlines were pounded by soaring fuel prices followed by the recession, the industry appears poised to post its first meaningful profit since 2007's third quarter.
The major U.S. carriers will begin reporting second-quarter results next week, led by Delta Air Lines Inc. on Monday. Analysts expect all but one of the nine largest carriers—AMR Corp.'s American Airlines—to be in the black for the quarter and all of 2010, thanks to moderate fuel prices, an improving U.S. economy, fewer seats on offer and increased revenue from checked luggage and other optional services.
Analyst Michael Derchin of CRT Capital Group LLC even foresees a slight profit for American, although Wall Street's mean estimate calls for a quarterly loss of three cents a share. Mr. Derchin forecasts that the largest airlines will report net income of $1.7 billion in the June quarter, compared with a loss of nearly $1 billion a year earlier.
"Clearly, the economy is providing a considerable amount of lift for all...carriers," Delta President Ed Bastian said at an investor conference last month.
Still, nobody's breaking out the bubbly. That's because unit revenue—the key metric of revenue taken in for each passenger flown a mile—is only now approaching levels last seen two years ago. UAL Corp.'s United Airlines, which has been posting industry-leading unit revenue gains in recent months, said it rose 31% in June versus the year-ago month. Compared with June of 2008, unit revenue was up between 5% and 6%.
The Air Transport Association trade group says unit revenue for the 12 months ended in May was 10.9 cents for each seat flown a mile among airlines that report such data. In the same period ended in May 2008, the number was 11.5 cents, a sign the industry still is climbing out of a hole.
John Heimlich, the ATA's chief economist, sounded cautionary notes in a speech this week to the International Aviation Club. "Better does not equal good," he said, noting the high U.S. unemployment rate and the failure of U.S. gross domestic product to snap back to 2008 levels.
Fuel prices, while moderate, remain higher than last year, he said. Airlines have poor credit ratings and loads of debt. And the mature domestic market isn't likely to provide future growth opportunities.
Airlines are benefiting from a return of premium business travelers, who curtailed travel sharply during the depths of the recession, especially on international routes. Delta last month estimated its second-quarter unit revenue was 20% higher than a year ago, and its June unit revenue on Asian routes leapt 50% from a year ago.
The Atlanta-based carrier, the world's largest by traffic, said revenue from corporate contracts, which accounts for about a fifth of its total sales, was up 63% in May from the prior year.
Also helping are cuts that airlines have made to fleets and available seats. U.S. carriers are expected to deploy 8% less capacity domestically in the second half of 2010 than in 2007, according to Daniel McKenzie, an analyst for Hudson Securities Inc. Including overseas flights, carriers are flying 5% fewer seats overall. Airlines have dropped many unprofitable flights and don't have to fill planes with as many leisure fliers on cheap tickets.
Carriers also are raking in new revenue by imposing fees on services such as checked luggage, blankets, early boarding and seat selection. The federal Government Accountability Office estimates these fees brought in at least $3 billion last year. The ATA puts the figure closer to $5 billion when ticket-change and cancellation fees are added. Either way, it's a drop in the bucket compared with the industry's $155 billion in 2009 revenue.
Michael Linenberg, a Deutsche Bank analyst, estimates that United, Delta, Alaska Air Group Inc. and Southwest Airlines Co. will post double-digit operating margins for the period. Investors also seem upbeat, having driven up share prices for most big airlines since the end of 2009.
AMR seems to be the odd man out. Its stock has fallen about 11% since then, and most analysts don't expect it to be profitable for 2010. Mr. McKenzie of Hudson Securities said in a research note that he's beginning to worry AMR "may prove an earnings zombie over this next cycle," as the company struggles with high debt, labor conflicts and a fleet strategy that isn't as effective as those of rivals.
Gerard Arpey, AMR chairman and chief executive, said in an investor conference last month that he expects big payoffs from the company strengthening its market position in the four largest U.S. cities, along with its efforts to deepen its partnership with members of its Oneworld marketing alliance. Together, they should provide $500 million in annual cost and revenue benefits by 2012, he said.
Mr. Arpey said American's labor-cost disadvantage should ease as rivals reach new contracts with workers. And this week, the European Union granted American antitrust immunity to cooperate more closely with British Airways PLC and Iberia Líneas Aéreas de España SA across the Atlantic, a step that will give them the same benefits two other big airline groups already enjoy.
Write to Susan Carey at susan.carey@wsj.com
Thursday, July 15, 2010
Continental Airlines Completes Installation of New Flat-Bed BusinessFirst Seats on 25 Aircraft
Press Release Source: Continental Airlines On Thursday July 15, 2010, 11:35 am EDT
HOUSTON, July 15 /PRNewswire-FirstCall/ -- Continental Airlines' (NYSE:CAL - News) 25th aircraft with new flat-bed BusinessFirst seats and additional upgraded amenities took to the skies this week.
The carrier's flat-bed seats made their operational debut in November 2009 and are being installed on aircraft used on long-haul international routes. Currently the seats are being installed on Continental's Boeing 777 and 757-200 fleets, with 11 777s and 14 757-200s completed. In addition, Continental will take delivery of two new Boeing 777 aircraft outfitted with the flat-bed seats by the end of July. The seats will also be installed on many of Continental's Boeing 767-400 aircraft starting in 2011 and on the Boeing 787 fleet as the new aircraft are delivered to the company.
The BusinessFirst flat-bed seat reclines 180 degrees and provides 6 feet 6 inches of sleeping space in the fully extended position on the Boeing 777 (6 feet 4 inches on the Boeing 757-200). It is one of the widest business-class seats in the air, measuring up to 27 inches (25 inches on the 757-200).
Laptop power, headset and USB plugs are conveniently tucked above the customer's shoulder. iPod connectivity allows each customer to view their personal videos and enjoy their music while their iPod is charging. The new seats feature 15.4-inch video monitors for customers to enjoy on-demand movies, music and games.
"Our new BusinessFirst flat-bed seat is highly popular with our customers, and is a feature that makes our award-winning BusinessFirst product even more enjoyable," said Jim Compton, Continental's executive vice president and chief marketing officer. "Continental continues to invest in products that our customers want and value."
Continental currently operates the Boeing 777 on international routes between Newark and Beijing, Delhi, Frankfurt, Hong Kong, London/Heathrow, Mumbai, Shanghai, Tel Aviv and Tokyo, and between Houston and Frankfurt, London/Heathrow and Tokyo.
BusinessFirst on the Boeing 757 is currently offered on routes between Newark and Amsterdam, Barcelona, Belfast, Berlin, Birmingham, Bristol, Copenhagen, Dublin, Edinburgh, Glasgow, Hamburg, Lima, Lisbon, London/Heathrow, Madrid, Manchester, Oslo, Paris, Shannon and Stockholm.
Continental utilizes the Boeing 767-400 on routes between Newark and Athens, Brussels, Geneva, Paris, Rome and Zurich; and between Houston and Amsterdam, Paris and Rio de Janeiro.
Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,600 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance, which overall offers more than 21,200 daily flights to 1,172 airports in 181 countries through its 28 member airlines.
With more than 40,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year.
Continental consistently earns awards and critical acclaim for both its operation and its corporate culture.
For nine consecutive years, FORTUNE magazine has ranked Continental as the top U.S. airline on its "World's Most Admired Companies" airline industry list. For more company information, go to continental.com.
Press Release Source: Continental Airlines On Thursday July 15, 2010, 11:35 am EDT
HOUSTON, July 15 /PRNewswire-FirstCall/ -- Continental Airlines' (NYSE:CAL - News) 25th aircraft with new flat-bed BusinessFirst seats and additional upgraded amenities took to the skies this week.
The carrier's flat-bed seats made their operational debut in November 2009 and are being installed on aircraft used on long-haul international routes. Currently the seats are being installed on Continental's Boeing 777 and 757-200 fleets, with 11 777s and 14 757-200s completed. In addition, Continental will take delivery of two new Boeing 777 aircraft outfitted with the flat-bed seats by the end of July. The seats will also be installed on many of Continental's Boeing 767-400 aircraft starting in 2011 and on the Boeing 787 fleet as the new aircraft are delivered to the company.
The BusinessFirst flat-bed seat reclines 180 degrees and provides 6 feet 6 inches of sleeping space in the fully extended position on the Boeing 777 (6 feet 4 inches on the Boeing 757-200). It is one of the widest business-class seats in the air, measuring up to 27 inches (25 inches on the 757-200).
Laptop power, headset and USB plugs are conveniently tucked above the customer's shoulder. iPod connectivity allows each customer to view their personal videos and enjoy their music while their iPod is charging. The new seats feature 15.4-inch video monitors for customers to enjoy on-demand movies, music and games.
"Our new BusinessFirst flat-bed seat is highly popular with our customers, and is a feature that makes our award-winning BusinessFirst product even more enjoyable," said Jim Compton, Continental's executive vice president and chief marketing officer. "Continental continues to invest in products that our customers want and value."
Continental currently operates the Boeing 777 on international routes between Newark and Beijing, Delhi, Frankfurt, Hong Kong, London/Heathrow, Mumbai, Shanghai, Tel Aviv and Tokyo, and between Houston and Frankfurt, London/Heathrow and Tokyo.
BusinessFirst on the Boeing 757 is currently offered on routes between Newark and Amsterdam, Barcelona, Belfast, Berlin, Birmingham, Bristol, Copenhagen, Dublin, Edinburgh, Glasgow, Hamburg, Lima, Lisbon, London/Heathrow, Madrid, Manchester, Oslo, Paris, Shannon and Stockholm.
Continental utilizes the Boeing 767-400 on routes between Newark and Athens, Brussels, Geneva, Paris, Rome and Zurich; and between Houston and Amsterdam, Paris and Rio de Janeiro.
Continental Airlines is the world's fifth largest airline. Continental, together with Continental Express and Continental Connection, has more than 2,600 daily departures throughout the Americas, Europe and Asia, serving 132 domestic and 137 international destinations. Continental is a member of Star Alliance, which overall offers more than 21,200 daily flights to 1,172 airports in 181 countries through its 28 member airlines.
With more than 40,000 employees, Continental has hubs serving New York, Houston, Cleveland and Guam, and together with its regional partners, carries approximately 63 million passengers per year.
Continental consistently earns awards and critical acclaim for both its operation and its corporate culture.
For nine consecutive years, FORTUNE magazine has ranked Continental as the top U.S. airline on its "World's Most Admired Companies" airline industry list. For more company information, go to continental.com.
Wednesday, July 14, 2010
Airline fees make it hard to shop for best deal
Feds: Airline fees make it hard for consumers to shop for the best deal when buying tickets
Joan Lowy, Associated Press Writer, On Wednesday July 14, 2010, 5:55 pm EDT
WASHINGTON (AP) -- Finding the best deal on a flight has become a lot more difficult, thanks to hefty baggage and service fees that consumers often don't know about until they show up at the airline counter, congressional investigators say.
Those fees are not part of the ticket price, meaning they can easily go unseen until it's too late for the consumer to shop around. Amounting to billions of dollars for the airlines, the fees also are exempt from an excise tax, and some lawmakers want to reclaim that money for the Treasury.
Airlines, travel agents, online travel services and other ticket distribution channels should be required to disclose fees for checked baggage, changed reservations and other services in a clear and consistent manner, the Government Accountability Office said in a report out Wednesday.
Since 2007, many airlines have been charging for services that were traditionally included in the price of a ticket. That's improved airline bottom lines in a tough economy but raised the ire of travelers who find themselves nickeled-and-dimed to substantially higher costs.
Besides checked bags, some airlines charge fees for seat selection, extra leg room, prime spots in boarding lines, blankets, pillows, drinks and meals. "Those fees can be an unexpected shock totaling hundreds of dollars," said Charles Leocha, director of the Consumer Travel Alliance.
In the last budget year, 10 U.S. airlines collected $7.8 billion in such fees, congressional accountants say. The leader was Delta Air Lines, the world's largest airline, with $1.6 billion.
Rep. James Oberstar, D-Minn., who led a House hearing Wednesday on the matter, told airlines that the public will push back "and then Congress will act" if the industry does not show restraint with the fees. "That's not a threat," he said. "That's history."
Airlines say fees benefit passengers because they allow airlines to keep ticket prices down and consumers pay only for services they use.
"This is a deregulated industry and this is an industry that should be able to charge whatever it opts to charge for services," said David Castelveter, a spokesman for the Air Transport Association, which represents major airlines.
"There is no reason why one passenger should subsidize another for a service he or she doesn't consume," Castelveter said. He said airlines already disclose the fees consumers are most concerned about, like checked bag fees, on their websites.
But the GAO's Gerald Dillingham told the hearing airline fees "are not very transparent."
American, Continental, Delta, US Airways and United all charge $25 for the first checked bag, and $35 for the second, according to the booking website Kayak.
JetBlue charges $10 and up for additional legroom. AirTran charges $6 for passengers to get seat assignments in advance, and sells exit row seats for $20 extra. Snacks at most airlines run $2 to $5, meals a bit more.
The Transportation Department is considering requiring airlines to disclose two ticket prices to passengers: a "full fare" with all mandatory charges like taxes, and "full fare-plus" with the extras.
Computer reservation systems used by travel agents and ticketing services are capable of providing clear information on fees that allows consumers to compare total trip prices. That hasn't happened because airlines won't supply the travel industry with fees, Kyle Moore, vice president of Sabre Holdings, which owns Travelocity, told the House Transportation and Infrastructure Committee.
Ben Baldanza, president and CEO of low-cost carrier Spirit Airlines, acknowledged that his airline doesn't provide ticketing services with fee information because he doesn't want to be at a competitive disadvantage with other airlines whose prices might appear lower because they exclude the cost of extras.
Moore said there would be no such concern if all airlines were required to supply ticketing services with the information.
The vast majority of consumers buy tickets based on the lowest fare, witnesses told the committee. About half the airline tickets sold in the U.S. are bought through ticketing services.
The government charges a 7.5 percent excise tax on airline tickets to pay for the air traffic system. The IRS ruled last year that optional fees aren't subject to the excise tax.
The report says the government could have raised $186 million last year if the checked bag fees alone had been taxed, an amount likely to grow as airlines charge more fees.
AP Transportation Writer Samantha Bomkamp in New York contributed to this report.
Online:
Government Accountability Office: http://www.gao.gov
House Transportation and Infrastructure Committee: http://transportation.house.gov/
Feds: Airline fees make it hard for consumers to shop for the best deal when buying tickets
Joan Lowy, Associated Press Writer, On Wednesday July 14, 2010, 5:55 pm EDT
WASHINGTON (AP) -- Finding the best deal on a flight has become a lot more difficult, thanks to hefty baggage and service fees that consumers often don't know about until they show up at the airline counter, congressional investigators say.
Those fees are not part of the ticket price, meaning they can easily go unseen until it's too late for the consumer to shop around. Amounting to billions of dollars for the airlines, the fees also are exempt from an excise tax, and some lawmakers want to reclaim that money for the Treasury.
Airlines, travel agents, online travel services and other ticket distribution channels should be required to disclose fees for checked baggage, changed reservations and other services in a clear and consistent manner, the Government Accountability Office said in a report out Wednesday.
Since 2007, many airlines have been charging for services that were traditionally included in the price of a ticket. That's improved airline bottom lines in a tough economy but raised the ire of travelers who find themselves nickeled-and-dimed to substantially higher costs.
Besides checked bags, some airlines charge fees for seat selection, extra leg room, prime spots in boarding lines, blankets, pillows, drinks and meals. "Those fees can be an unexpected shock totaling hundreds of dollars," said Charles Leocha, director of the Consumer Travel Alliance.
In the last budget year, 10 U.S. airlines collected $7.8 billion in such fees, congressional accountants say. The leader was Delta Air Lines, the world's largest airline, with $1.6 billion.
Rep. James Oberstar, D-Minn., who led a House hearing Wednesday on the matter, told airlines that the public will push back "and then Congress will act" if the industry does not show restraint with the fees. "That's not a threat," he said. "That's history."
Airlines say fees benefit passengers because they allow airlines to keep ticket prices down and consumers pay only for services they use.
"This is a deregulated industry and this is an industry that should be able to charge whatever it opts to charge for services," said David Castelveter, a spokesman for the Air Transport Association, which represents major airlines.
"There is no reason why one passenger should subsidize another for a service he or she doesn't consume," Castelveter said. He said airlines already disclose the fees consumers are most concerned about, like checked bag fees, on their websites.
But the GAO's Gerald Dillingham told the hearing airline fees "are not very transparent."
American, Continental, Delta, US Airways and United all charge $25 for the first checked bag, and $35 for the second, according to the booking website Kayak.
JetBlue charges $10 and up for additional legroom. AirTran charges $6 for passengers to get seat assignments in advance, and sells exit row seats for $20 extra. Snacks at most airlines run $2 to $5, meals a bit more.
The Transportation Department is considering requiring airlines to disclose two ticket prices to passengers: a "full fare" with all mandatory charges like taxes, and "full fare-plus" with the extras.
Computer reservation systems used by travel agents and ticketing services are capable of providing clear information on fees that allows consumers to compare total trip prices. That hasn't happened because airlines won't supply the travel industry with fees, Kyle Moore, vice president of Sabre Holdings, which owns Travelocity, told the House Transportation and Infrastructure Committee.
Ben Baldanza, president and CEO of low-cost carrier Spirit Airlines, acknowledged that his airline doesn't provide ticketing services with fee information because he doesn't want to be at a competitive disadvantage with other airlines whose prices might appear lower because they exclude the cost of extras.
Moore said there would be no such concern if all airlines were required to supply ticketing services with the information.
The vast majority of consumers buy tickets based on the lowest fare, witnesses told the committee. About half the airline tickets sold in the U.S. are bought through ticketing services.
The government charges a 7.5 percent excise tax on airline tickets to pay for the air traffic system. The IRS ruled last year that optional fees aren't subject to the excise tax.
The report says the government could have raised $186 million last year if the checked bag fees alone had been taxed, an amount likely to grow as airlines charge more fees.
AP Transportation Writer Samantha Bomkamp in New York contributed to this report.
Online:
Government Accountability Office: http://www.gao.gov
House Transportation and Infrastructure Committee: http://transportation.house.gov/
The Power Of Corporate Specific Emergency Training
July 14, 2010 - 5:17 pm
Susan C. Friedenberg has been very proactive in Business Aviation for 25 years and is the founder of Corporate Flight Attendant Training & Consulting Services. She is passionate regarding raising the educational and egress training standards for the business aviation flight attendant/third crew member.
www.corporateflightattendanttraining.com
I am quite certain that a pilot given the option to share his cockpit with a non-type rated pilot with no experience on that type aircraft would certainly decline. The same standards in choosing a flight attendant should apply. Any flight attendant who is not properly trained should not be on a corporate aircraft.
The following story clearly demonstrates the value of emergency and first-aid training. It was a Part 121/Commercial mission, but with that stated, it was a three-person crew. Some 99.9% of our missions are three-people crew IF they deem it per company standard operational procedures to have a trained person in the back.... or a "cabin server."
On Aug. 21, 1995, Robin Fech, a flight attendant for Atlantic Southeast Airlines, reported for work. The three-person crew on Flight 7529, an Embraer 120, took off out of Atlanta, GA, for Gulfport, MS, with 26 passengers onboard.
As crew members, we flight attendants always have in the back of our minds the knowledge that anything could happen at any time. Flight attendants who have the proper emergency training are prepared for a variety of scenarios.
For instance, if they are emergency-trained third crew members, they are well versed in a variety of taxi, takeoff, in-flight, approach and landing scenarios. And if they are well-trained third crew members, they are at all times conscious of any irregular smells and sounds onboard the aircraft. During takeoff and landing, well-trained third crew members methodically make a mental/silent review of coordinated procedures to follow in tandem with the cockpit crew in the event of an emergency situation.
On this particular day, the aircraft took off and climbed to 18,000 feet. Robin had commenced a beverage service and her forward galley was occupied with loose service items. Suddenly the aircraft shuddered and shook violently, followed by an explosion. Without hesitation, Robin immediately invoked her emergency training procedures. She secured herself as the aircraft dropped approximately 9,000 feet.
One of the engine propeller blades snapped off and went into the engine cowling, which caused a fire and the engine to peel like an onion. Later they would find only 16 inches of the missing five-foot propeller blade remaining, attached to the hub on the plane.
Robin began stowing items in the galley and the cabin, briefing her passengers and managing their panic. For a long three minutes there was no communication or signals from the cockpit because they were literally fighting to gain control of the airplane. At approximately 11,500 feet the cockpit signaled and alerted Robin to the fact that they were attempting to make an emergency landing in Atlanta.
As the plane rocked, rolled and continuously lost altitude, Robin repeatedly demonstrated the brace position, checked seat belts, repositioned able-bodied passengers, briefed passengers on the location and operation of all the exits, and managed passenger panic for six-and-a-half long minutes. She never stopped utilizing her time to brief and re brief her passengers.
They never made it to the Atlanta airport, but instead crash-landed in an open field after shearing through tree tops in Carrollton, GA. Robin was knocked unconscious on impact and she awoke to the sounds of a roaring fire, breaking metal, and small explosions all around her. She found herself completely turned around in her jump seat and engulfed in dense black smoke.
With burns, cracked ribs and a broken collarbone and arm, Robin found herself trapped and unable to see into the cabin. She heard passengers screaming and moaning outside of what was left of the fuselage. Robin made her way out of the burning aircraft through smoke and fire and found some passengers still alive and in shock.
She performed first aid and used parts of her own clothing on passengers who were on fire. She then directed her attention to the cockpit area. The captain died on impact but the first officer was still alive and trapped in the burning cockpit. His hands were severely burned and he was making a futile attempt to chip his way out of the cockpit with a crash ax. She personally directed his rescue with the help of a surviving passenger. She heroically saved the lives of 17 passengers and her second-in-command.
At the time of this crash, Robin had been a commercial flight attendant for two-and-a-half years. She had attended one initial emergency and first aid training class and two recurrent training classes. The surviving passengers were grateful for her knowledge; passenger Bryon Gaskill asserted, "I can't imagine anybody being more purposeful in doing her job." And passenger U.S. Air Force Major Chuck LeMay recounted, "Because of her, folks inside the cabin remained calm. No one was screaming. . . We did not panic. Robin behaved like a drill sergeant."
Click for NTSB accident report.
As a CEO with a manager in charge of your corporate flight department you clearly have a choice. You can hire a trained third crew member for full time or contract services with emergency/first aid training or a "cabin server." Try to envision the above scenario without a properly trained third crew member. A tad scary?
July 14, 2010 - 5:17 pm
Susan C. Friedenberg has been very proactive in Business Aviation for 25 years and is the founder of Corporate Flight Attendant Training & Consulting Services. She is passionate regarding raising the educational and egress training standards for the business aviation flight attendant/third crew member.
www.corporateflightattendanttraining.com
I am quite certain that a pilot given the option to share his cockpit with a non-type rated pilot with no experience on that type aircraft would certainly decline. The same standards in choosing a flight attendant should apply. Any flight attendant who is not properly trained should not be on a corporate aircraft.
The following story clearly demonstrates the value of emergency and first-aid training. It was a Part 121/Commercial mission, but with that stated, it was a three-person crew. Some 99.9% of our missions are three-people crew IF they deem it per company standard operational procedures to have a trained person in the back.... or a "cabin server."
On Aug. 21, 1995, Robin Fech, a flight attendant for Atlantic Southeast Airlines, reported for work. The three-person crew on Flight 7529, an Embraer 120, took off out of Atlanta, GA, for Gulfport, MS, with 26 passengers onboard.
As crew members, we flight attendants always have in the back of our minds the knowledge that anything could happen at any time. Flight attendants who have the proper emergency training are prepared for a variety of scenarios.
For instance, if they are emergency-trained third crew members, they are well versed in a variety of taxi, takeoff, in-flight, approach and landing scenarios. And if they are well-trained third crew members, they are at all times conscious of any irregular smells and sounds onboard the aircraft. During takeoff and landing, well-trained third crew members methodically make a mental/silent review of coordinated procedures to follow in tandem with the cockpit crew in the event of an emergency situation.
On this particular day, the aircraft took off and climbed to 18,000 feet. Robin had commenced a beverage service and her forward galley was occupied with loose service items. Suddenly the aircraft shuddered and shook violently, followed by an explosion. Without hesitation, Robin immediately invoked her emergency training procedures. She secured herself as the aircraft dropped approximately 9,000 feet.
One of the engine propeller blades snapped off and went into the engine cowling, which caused a fire and the engine to peel like an onion. Later they would find only 16 inches of the missing five-foot propeller blade remaining, attached to the hub on the plane.
Robin began stowing items in the galley and the cabin, briefing her passengers and managing their panic. For a long three minutes there was no communication or signals from the cockpit because they were literally fighting to gain control of the airplane. At approximately 11,500 feet the cockpit signaled and alerted Robin to the fact that they were attempting to make an emergency landing in Atlanta.
As the plane rocked, rolled and continuously lost altitude, Robin repeatedly demonstrated the brace position, checked seat belts, repositioned able-bodied passengers, briefed passengers on the location and operation of all the exits, and managed passenger panic for six-and-a-half long minutes. She never stopped utilizing her time to brief and re brief her passengers.
They never made it to the Atlanta airport, but instead crash-landed in an open field after shearing through tree tops in Carrollton, GA. Robin was knocked unconscious on impact and she awoke to the sounds of a roaring fire, breaking metal, and small explosions all around her. She found herself completely turned around in her jump seat and engulfed in dense black smoke.
With burns, cracked ribs and a broken collarbone and arm, Robin found herself trapped and unable to see into the cabin. She heard passengers screaming and moaning outside of what was left of the fuselage. Robin made her way out of the burning aircraft through smoke and fire and found some passengers still alive and in shock.
She performed first aid and used parts of her own clothing on passengers who were on fire. She then directed her attention to the cockpit area. The captain died on impact but the first officer was still alive and trapped in the burning cockpit. His hands were severely burned and he was making a futile attempt to chip his way out of the cockpit with a crash ax. She personally directed his rescue with the help of a surviving passenger. She heroically saved the lives of 17 passengers and her second-in-command.
At the time of this crash, Robin had been a commercial flight attendant for two-and-a-half years. She had attended one initial emergency and first aid training class and two recurrent training classes. The surviving passengers were grateful for her knowledge; passenger Bryon Gaskill asserted, "I can't imagine anybody being more purposeful in doing her job." And passenger U.S. Air Force Major Chuck LeMay recounted, "Because of her, folks inside the cabin remained calm. No one was screaming. . . We did not panic. Robin behaved like a drill sergeant."
Click for NTSB accident report.
As a CEO with a manager in charge of your corporate flight department you clearly have a choice. You can hire a trained third crew member for full time or contract services with emergency/first aid training or a "cabin server." Try to envision the above scenario without a properly trained third crew member. A tad scary?
American, BA Score Big For The Oneworld Alliance
By CAROLYN HENSON
BRUSSELS—British Airways PLC received a significant boost Wednesday after Europe's antitrust regulator cleared its merger with Spain's Iberia Líneas Aéreas de España SA and allowed much closer cooperation with Oneworld alliance partner AMR Corp.'s American Airlines on profitable trans-Atlantic routes.
BA's merger with Iberia, which would create Europe's third-largest airline by revenue, moved a step closer after the European Commission, the European Union's regulatory and executive arm, approved the deal. It was a rare approval of an airline merger without a requirement that the companies concerned divest assets.
Competition Commissioner Joaquin Almunia said Wednesday in Brussels the decision balances "the interests of the industry and of passengers."
BA and Iberia are still working on the final terms of the deal, with the Spanish airline looking at BA's plans to address its £3.7 billion ($5.61 billion) pension deficit. Iberia has until September to decide whether to agree to the merger.
The commission also cleared a pact allowing three partners in the Oneworld alliance—a group of 11 airlines—to work more closely together. The European clearance means American, BA and Iberia are immune from usual antitrust rules that forbid collusion between companies in the interest of providing more frequent services and lower prices for travelers.
The deal means the three airlines can proceed with plans to cooperate more closely on trans-Atlantic routes, which are BA's most profitable. They plan to share revenue, combine their marketing and flight planning, and collaborate on pricing.
However, the deal came at a price, with the airlines having to give up some of their coveted landing and takeoff slots at London's busy Heathrow Airport, allowing competing airlines to fly more routes between London and New York, Boston, Dallas and Miami.
The airlines will make seven takeoff and landing slots in London available each day to competing airlines.
These include three on the London-to-New York route, two on the London-to-Boston route, one between London and Miami and another one between London and Dallas.
If a rival airline taking up one of the Oneworld London-New York slots at Heathrow can't get a matching slot at John F. Kennedy International Airport, the airlines must make one available at JFK as well.
They will also allow rival airlines flying passengers on one leg of a trans-Atlantic route to sell tickets on BA, AA or Iberia flights for the return leg. Rivals could also sell tickets combining their own trans-Atlantic flight with an internal flight to another airport operated by one of the three Oneworld carriers.
These undertakings by the airlines are legally binding for 10 years.
The clearance ends a 10-month investigation by the European Commission, the EU's antitrust regulator, who feared the collaboration could give the carriers a dominance on transatlantic that could translate into higher airfares for passengers.
The EU's competition commissioner, Joaquin Almunia, said European policy over past years has been to accept joint ventures between airlines that bring advantages to an industry that has suffered disruption from terrorist threats and lately volcanic ash clouds.
"We think this decision strikes the right balance between the interests of the industry and of passengers" who will benefit from "more choice and more competitive airfares," he said.
Around 50 million people travel between the EU and the U.S. annually, a quarter of them via Heathrow.
The commission It had already given similar antitrust immunity to Oneworld's rivals—the SkyTeam alliance, including Air France-KLM SA and Delta Air Lines Inc., and the Star Alliance, including UAL Corp.'s United Airlines, Continental Airlines Inc. and Germany's Deutsche Lufthansa AG.
AMR Chief Executive Gerard Arpey and BA CEO Willie Walsh noted that the pact still needs a final decision from the U.S. Department of Transportation, but Mr. Walsh said the European clearance was "an important and vital step forward."
The airlines plan to launch their expanded trans-Atlantic joint business this autumn, he added.
BA said it expected U.S. regulators to make their final ruling on the expanded Oneworld pact "soon." The Department of Transportation in February gave tentative approval to the partners' request for antitrust immunity in return for Oneworld giving up four daily pairs of Heathrow slots. It also eschewed "carving out" any routes from the alliance, a remedy suggested by the U.S. Justice Department.
Long-term BA rival Virgin Atlantic Airways Ltd. described the commission's decision and remedies package as "woefully inadequate." The slot remedies are too few and are offered on a lease-hold basis for only a limited period, it said, which it said would put off any new airlines wanting to enter the market.
"We have fought this monster monopoly for the past 13 years and are still resolute in our belief that this decision is shameful and consumers will suffer greatly as a result of this deal," said Virgin Atlantic President Richard Branson.
BA has had a difficult year so far due to a protracted disagreement with cabin crew over working conditions. Cabin crew have held 22 days of strikes so far as they protest changes to working conditions on long-haul flights from Heathrow that the airline says are essential to cut costs and compete with industry rivals.
With most airline stocks lower in Europe Wednesday amid a wider market decline, shares of BA rose 0.4% in London, while Iberia gained 0.6% in Madrid. —Kaveri Niththyananthan in London, David Tidmarsh and Alessandro Torello in Brussels and Doug Cameron in Chicago contributed to the article.
Write to Carolyn Henson at carolyn.henson@dowjones.com
By CAROLYN HENSON
BRUSSELS—British Airways PLC received a significant boost Wednesday after Europe's antitrust regulator cleared its merger with Spain's Iberia Líneas Aéreas de España SA and allowed much closer cooperation with Oneworld alliance partner AMR Corp.'s American Airlines on profitable trans-Atlantic routes.
BA's merger with Iberia, which would create Europe's third-largest airline by revenue, moved a step closer after the European Commission, the European Union's regulatory and executive arm, approved the deal. It was a rare approval of an airline merger without a requirement that the companies concerned divest assets.
Competition Commissioner Joaquin Almunia said Wednesday in Brussels the decision balances "the interests of the industry and of passengers."
BA and Iberia are still working on the final terms of the deal, with the Spanish airline looking at BA's plans to address its £3.7 billion ($5.61 billion) pension deficit. Iberia has until September to decide whether to agree to the merger.
The commission also cleared a pact allowing three partners in the Oneworld alliance—a group of 11 airlines—to work more closely together. The European clearance means American, BA and Iberia are immune from usual antitrust rules that forbid collusion between companies in the interest of providing more frequent services and lower prices for travelers.
The deal means the three airlines can proceed with plans to cooperate more closely on trans-Atlantic routes, which are BA's most profitable. They plan to share revenue, combine their marketing and flight planning, and collaborate on pricing.
However, the deal came at a price, with the airlines having to give up some of their coveted landing and takeoff slots at London's busy Heathrow Airport, allowing competing airlines to fly more routes between London and New York, Boston, Dallas and Miami.
The airlines will make seven takeoff and landing slots in London available each day to competing airlines.
These include three on the London-to-New York route, two on the London-to-Boston route, one between London and Miami and another one between London and Dallas.
If a rival airline taking up one of the Oneworld London-New York slots at Heathrow can't get a matching slot at John F. Kennedy International Airport, the airlines must make one available at JFK as well.
They will also allow rival airlines flying passengers on one leg of a trans-Atlantic route to sell tickets on BA, AA or Iberia flights for the return leg. Rivals could also sell tickets combining their own trans-Atlantic flight with an internal flight to another airport operated by one of the three Oneworld carriers.
These undertakings by the airlines are legally binding for 10 years.
The clearance ends a 10-month investigation by the European Commission, the EU's antitrust regulator, who feared the collaboration could give the carriers a dominance on transatlantic that could translate into higher airfares for passengers.
The EU's competition commissioner, Joaquin Almunia, said European policy over past years has been to accept joint ventures between airlines that bring advantages to an industry that has suffered disruption from terrorist threats and lately volcanic ash clouds.
"We think this decision strikes the right balance between the interests of the industry and of passengers" who will benefit from "more choice and more competitive airfares," he said.
Around 50 million people travel between the EU and the U.S. annually, a quarter of them via Heathrow.
The commission It had already given similar antitrust immunity to Oneworld's rivals—the SkyTeam alliance, including Air France-KLM SA and Delta Air Lines Inc., and the Star Alliance, including UAL Corp.'s United Airlines, Continental Airlines Inc. and Germany's Deutsche Lufthansa AG.
AMR Chief Executive Gerard Arpey and BA CEO Willie Walsh noted that the pact still needs a final decision from the U.S. Department of Transportation, but Mr. Walsh said the European clearance was "an important and vital step forward."
The airlines plan to launch their expanded trans-Atlantic joint business this autumn, he added.
BA said it expected U.S. regulators to make their final ruling on the expanded Oneworld pact "soon." The Department of Transportation in February gave tentative approval to the partners' request for antitrust immunity in return for Oneworld giving up four daily pairs of Heathrow slots. It also eschewed "carving out" any routes from the alliance, a remedy suggested by the U.S. Justice Department.
Long-term BA rival Virgin Atlantic Airways Ltd. described the commission's decision and remedies package as "woefully inadequate." The slot remedies are too few and are offered on a lease-hold basis for only a limited period, it said, which it said would put off any new airlines wanting to enter the market.
"We have fought this monster monopoly for the past 13 years and are still resolute in our belief that this decision is shameful and consumers will suffer greatly as a result of this deal," said Virgin Atlantic President Richard Branson.
BA has had a difficult year so far due to a protracted disagreement with cabin crew over working conditions. Cabin crew have held 22 days of strikes so far as they protest changes to working conditions on long-haul flights from Heathrow that the airline says are essential to cut costs and compete with industry rivals.
With most airline stocks lower in Europe Wednesday amid a wider market decline, shares of BA rose 0.4% in London, while Iberia gained 0.6% in Madrid. —Kaveri Niththyananthan in London, David Tidmarsh and Alessandro Torello in Brussels and Doug Cameron in Chicago contributed to the article.
Write to Carolyn Henson at carolyn.henson@dowjones.com
Tuesday, July 13, 2010
Jet makes emergency landing in Aleutians
American Airlines jet makes emergency landing in Aleutians after fire indicator light flashes
American Airlines jet makes an emergency landing at Eareckson Air Station on Shemya Island, Alaska. The plane made the landing on the remote island in Alaska's Aleutians after a fire warning light malfunctioned, the airline said Monday.
Rachel D'Oro, Associated Press Writer, On Tuesday July 13, 2010, 8:25 am EDT
ANCHORAGE, Alaska (AP) -- An American Airlines jet made an emergency landing on a remote island in Alaska's Aleutians after a fire warning light malfunctioned, the airline said Monday.
Flight 175, traveling from Dallas-Fort Worth to Tokyo, landed safely at Eareckson Air Station on Shemya Island shortly before 4 p.m. Sunday, said Tim Smith, a spokesman for American. The island base has a 10,000-foot runway.
It turned out there was no fire, despite the warning light from a cargo compartment of the Boeing 777.
Smith said the 197 passengers were evacuated while cargo was removed. No injuries were reported.
Once on the treeless, tundra-carpeted island, the mood among the passengers ranged from fear to the thrill of such an experience in the middle of nowhere, said Maj. Spencer T. Van Meter, 611th Air Support Squadron commander at Elmendorf Air Force Base in Anchorage. He also described passengers as "very happy and appreciative."
The jet later flew to Anchorage, arriving Monday. Smith said another jet will bring a new crew and depart Anchorage for Tokyo on Tuesday.
The Coast Guard said it initially was told the plane was on fire. Petty Officer Chris Gauthier said a C-130 was on standby on Kodiak Island, but it was not used.
American plans an internal investigation and has notified the Federal Aviation Administration. Smith said all signs point to a faulty indicator system.
"This is extremely rare but not at all unprecedented," he said.
The jet's fire suppression system was activated after the warning light went on in the cockpit, according to Smith.
Since the system was used, the flight was prohibited from continuing to Tokyo with its cargo load without suppression chemicals on board.
The luggage was left at Shemya, on the western tip of the Aleutians, and the jet flew about 1,500 miles to Anchorage instead of heading for Tokyo some 2,000 miles away.
Passengers were placed in hotels, and the luggage was being retrieved.
American Airlines jet makes emergency landing in Aleutians after fire indicator light flashes
American Airlines jet makes an emergency landing at Eareckson Air Station on Shemya Island, Alaska. The plane made the landing on the remote island in Alaska's Aleutians after a fire warning light malfunctioned, the airline said Monday.
Rachel D'Oro, Associated Press Writer, On Tuesday July 13, 2010, 8:25 am EDT
ANCHORAGE, Alaska (AP) -- An American Airlines jet made an emergency landing on a remote island in Alaska's Aleutians after a fire warning light malfunctioned, the airline said Monday.
Flight 175, traveling from Dallas-Fort Worth to Tokyo, landed safely at Eareckson Air Station on Shemya Island shortly before 4 p.m. Sunday, said Tim Smith, a spokesman for American. The island base has a 10,000-foot runway.
It turned out there was no fire, despite the warning light from a cargo compartment of the Boeing 777.
Smith said the 197 passengers were evacuated while cargo was removed. No injuries were reported.
Once on the treeless, tundra-carpeted island, the mood among the passengers ranged from fear to the thrill of such an experience in the middle of nowhere, said Maj. Spencer T. Van Meter, 611th Air Support Squadron commander at Elmendorf Air Force Base in Anchorage. He also described passengers as "very happy and appreciative."
The jet later flew to Anchorage, arriving Monday. Smith said another jet will bring a new crew and depart Anchorage for Tokyo on Tuesday.
The Coast Guard said it initially was told the plane was on fire. Petty Officer Chris Gauthier said a C-130 was on standby on Kodiak Island, but it was not used.
American plans an internal investigation and has notified the Federal Aviation Administration. Smith said all signs point to a faulty indicator system.
"This is extremely rare but not at all unprecedented," he said.
The jet's fire suppression system was activated after the warning light went on in the cockpit, according to Smith.
Since the system was used, the flight was prohibited from continuing to Tokyo with its cargo load without suppression chemicals on board.
The luggage was left at Shemya, on the western tip of the Aleutians, and the jet flew about 1,500 miles to Anchorage instead of heading for Tokyo some 2,000 miles away.
Passengers were placed in hotels, and the luggage was being retrieved.
American Airlines' alliance may win antitrust OK this week
07:34 AM CDT on Tuesday, July 13, 2010
By TERRY MAXON / The Dallas Morning News tmaxon@dallasnews.com
American Airlines Inc. and its allies may finally win approval this week to form a closer partnership with exemption from antitrust laws.
American and four of its partners in the Oneworld global airline alliance – British Airways PLC, Iberia, Finnair Oyj and Royal Jordanian Airlines – are seeking antitrust immunity to work together more closely on operations and marketing.
In addition, American, British Airways and Iberia are seeking permission to form a joint business arrangement that would allow them to jointly coordinate schedules, set pricing, market flights, offer frequent-flier benefits and otherwise collaborate.
Reuters reported Friday that the European Commission was expected to take up the application today. The Wall Street Journal also reported that in its own story posted on its website Monday.
An insider has told The Dallas Morning News that a decision is more likely to come Wednesday. An American Airlines spokesman declined to comment Monday afternoon.
A decision on their separate application with the U.S. Department of Transportation is expected this month,, perhaps also this week.
Since the parties filed their application with the Department of Transportation in August 2008, British Airways and Iberia have agreed to merge. That proposal is still before regulators.
The applicants have argued that they need the ability to work together to put them on par with the other two major alliances – SkyTeam, led by Delta Air Lines Inc. and Air France KLM, and the Star Alliance, led by United Airlines Inc. and Lufthansa German Airlines.
Both SkyTeam and Star have had antitrust immunity across the North Atlantic for years, and the Star Alliance recently added Continental Airlines Inc. to its lineup.
But Virgin Atlantic Airways Ltd., which is not a member of any of the three alliances, has vigorously fought the latest proposal, as it had two previous applications filed by American and British Airways.
Virgin has warned that American and British Airways already control too much of London Heathrow Airport, the world's busiest airport for international passengers. Approving the alliance would increase their concentration and be anti-competitive, Virgin has argued in its filings on the case.
In a preliminary decision Feb. 13, the DOT said the applicants would have to give up a few landing and takeoff slots at Heathrow to win final approval.
Separately, the applicants had proposed some concessions on trans-Atlantic routes to the European Commission.
07:34 AM CDT on Tuesday, July 13, 2010
By TERRY MAXON / The Dallas Morning News tmaxon@dallasnews.com
American Airlines Inc. and its allies may finally win approval this week to form a closer partnership with exemption from antitrust laws.
American and four of its partners in the Oneworld global airline alliance – British Airways PLC, Iberia, Finnair Oyj and Royal Jordanian Airlines – are seeking antitrust immunity to work together more closely on operations and marketing.
In addition, American, British Airways and Iberia are seeking permission to form a joint business arrangement that would allow them to jointly coordinate schedules, set pricing, market flights, offer frequent-flier benefits and otherwise collaborate.
Reuters reported Friday that the European Commission was expected to take up the application today. The Wall Street Journal also reported that in its own story posted on its website Monday.
An insider has told The Dallas Morning News that a decision is more likely to come Wednesday. An American Airlines spokesman declined to comment Monday afternoon.
A decision on their separate application with the U.S. Department of Transportation is expected this month,, perhaps also this week.
Since the parties filed their application with the Department of Transportation in August 2008, British Airways and Iberia have agreed to merge. That proposal is still before regulators.
The applicants have argued that they need the ability to work together to put them on par with the other two major alliances – SkyTeam, led by Delta Air Lines Inc. and Air France KLM, and the Star Alliance, led by United Airlines Inc. and Lufthansa German Airlines.
Both SkyTeam and Star have had antitrust immunity across the North Atlantic for years, and the Star Alliance recently added Continental Airlines Inc. to its lineup.
But Virgin Atlantic Airways Ltd., which is not a member of any of the three alliances, has vigorously fought the latest proposal, as it had two previous applications filed by American and British Airways.
Virgin has warned that American and British Airways already control too much of London Heathrow Airport, the world's busiest airport for international passengers. Approving the alliance would increase their concentration and be anti-competitive, Virgin has argued in its filings on the case.
In a preliminary decision Feb. 13, the DOT said the applicants would have to give up a few landing and takeoff slots at Heathrow to win final approval.
Separately, the applicants had proposed some concessions on trans-Atlantic routes to the European Commission.
Monday, July 12, 2010
DOT fines Delta $40K for trade name violation
Delta to pay $40,000 to DOT for leaving 'Delta Connection' name off tickets on feeder carriers
On Monday July 12, 2010, 3:52 pm EDT
MINNEAPOLIS (AP) -- The Transportation Department is hitting Delta Air Lines with a $40,000 penalty for failing to tell some customers that their flights would be operated under the "Delta Connection" name.
Some Delta flights are operated by feeder airlines with the "Delta Connection" name painted on the plane. Delta's own website, as well as other ticket vendors, correctly showed the airline operating the flight, but did not tell travelers it would be under the "Delta Connection" name. The government says the mistake could confuse travelers.
The order on Friday also covers Northwest Airlines, which Delta bought in 2008.
Delta fixed the problem when it found out about it, and agreed to the compromise penalty. Another $40,000 will be due if Delta does it again.
Delta to pay $40,000 to DOT for leaving 'Delta Connection' name off tickets on feeder carriers
On Monday July 12, 2010, 3:52 pm EDT
MINNEAPOLIS (AP) -- The Transportation Department is hitting Delta Air Lines with a $40,000 penalty for failing to tell some customers that their flights would be operated under the "Delta Connection" name.
Some Delta flights are operated by feeder airlines with the "Delta Connection" name painted on the plane. Delta's own website, as well as other ticket vendors, correctly showed the airline operating the flight, but did not tell travelers it would be under the "Delta Connection" name. The government says the mistake could confuse travelers.
The order on Friday also covers Northwest Airlines, which Delta bought in 2008.
Delta fixed the problem when it found out about it, and agreed to the compromise penalty. Another $40,000 will be due if Delta does it again.
The Star Treatment: Flying Like Jennifer Aniston
How the Air-Travel Industry Pampers and Protects VIPs; Paying for Celebrity Status
MIDDLE SEAT
By SCOTT MCCARTNEY (reprinted from 2008 but worth posting again)
Elite-level frequent fliers get lots of perks and attention from airlines. But it's nothing like the "star" treatment.Despite massive cost-cutting and shrinking service, airlines still roll out the red carpet for celebrities. Many carriers have "special service" staffers to speed stars and VIPs through airports and on to planes, or out back doors to limousines. Special rooms, some hidden behind unmarked doors adjacent to gates and some private lounges inside airport clubs, are reserved for politicians, movie stars, sports heroes and other dignitaries.
Celebrities receive special pampering from airlines including priority service and special meals.
"We are left to our own devices in terms of creativity," said Philip Williams, a British Airways PLC special-services representative at Los Angeles International Airport, which is ground zero for airline star treatment. British Airways recently slipped a major movie star out of the airport "completely avoiding photographers by devious, but legal, means," Mr. Williams says with pride. He can't say who, but airport officials say Angelina Jolie was a recent airport patron.
In general, if you have to ask for it, you probably don't qualify for special-services treatment. But even if you haven't won an Oscar, you can purchase a bit of special coddling for yourself for as little as $100.
AMR Corp.'s American Airlines has special concierge handling called "Five Star" service available at LAX and New York's Kennedy International Airport where an airline representative meets you, shuttles you quickly through check-in and security screening and on to a gate or airport club. The airline set up the service for movie studio VIPs and American doesn't advertise the service, says Mark Mitchell, American's managing director of customer experience.
You won't find mention of it on the airline's Web site. But it is available to anyone in the know.
(The phone number is 877-578-2702 )
Two private firms, Airport Assistance Worldwide and LJR & Associates, offer similar services to the public as well as the rich and famous. Both are based in Los Angeles, but serve other airports as well.
Amy Goldsmith, a public-relations executive, received a certificate for use of LJR's service as a gift from a friend and used it for a trip with her husband, baby and nanny. The family was met at the curb by a man who bypassed baggage check-in lines, security lines and then, once inside security, watched their belongings while they slipped into Starbucks. "It was amazing," she said, and has since used LJR for a second trip with her infant. The service cost about $110, including tips.
Actress Jennifer Aniston arrives at LAX.
"It made me uncomfortable when everyone was watching us move to the front of the line,
because I'm not that person," said Ms. Goldsmith. "But you get over it pretty quickly.
"Private services said they can't guarantee clients will be able to bypass lines -- that's up to Transportation Security Administration officials and airline workers. "Our reps are pretty aggressive when they need to be," said Michelle Kohler of Airport Assistance, whose prices at LAX start at $95.
The airlines' celebrity wrangling efforts can go much further. American's terminal at Washington's Reagan National Airport, an unmarked door in the concourse opens Oz-like to a private waiting room with a wall of autographed photos of members of Congress and movie stars. At some key airports, American has motorized privacy carts to ferry VIPs to gates with fringe hanging down from the roof that "obscures the faces of the VIPs," a spokesman says.
Airlines allow celebrities to order special meals -- and some travel internationally with their own chef who is allowed to cook in airplane galleys. Stars get private phone numbers to airline officials for help with bookings.
Carriers sometimes even send employees to stand in long lines at immigration and border security checkpoints if agencies won't grant special status for traveling stars.
For airlines, star travel is big business. In the early days of jet travel, photos of celebrities on aircraft stairs or smiling at the door to a plane amounted to extraordinary advertising, highlighting the glamour of air travel back then and confirming the credibility of airlines to a public unaccustomed to everyday air travel.
Airlines had their own photographers, and made sure company names and logos were perfectly placed over airplane doors or on staircases so they'd show up in the background of pictures.
Trans World Airlines billed itself as the "Airline of Stars," and owner Howard Hughes took extraordinary care of celebrities.
"He could stop an airplane at the drop of a hat for Elizabeth Taylor. And he did," said Maggie Anderson, who became TWA's first "ground hostess" in Los Angeles in 1965 and spent 10 years as manager of special services at LAX for American as well.
These days the glamour is gone from air travel, but the benefits of carrying celebrities remain. Besides the secondary perks of rubbing elbows with the famous, Hollywood is a big buyer of travel, particularly high-dollar first-class travel.
Being the carrier of choice for stars, or having your name show up in celebrity photos, can be a public-relations windfall."Airlines definitely want celebrities on planes," said Nancy Suey Castles, director of public relations at LAX.
Yet the challenges of handling stars have grown for carriers, both from dealing with tighter security and from swarms of paparazzi staking out keys star airports like LAX and London's Heathrow Airport.
Everyone boarding a plane has to go through government screening, although many airports have set up special screening lanes for first-class customers that can be used to speed through VIPs. At LAX, airlines say they used to be able to fax a list of a few people for whom they wanted to arrange expedited handling by U.S. Customs and Border Protection, such as slipping them through inspection lines reserved for airline crews.
But, now, CBP grants that only if the agency deems there would be a disruption in the line if VIPs stood waiting with everyone else.
Last July, even Victoria Beckham, aka pop singer "Posh Spice" and wife of soccer star David Beckham, was sent to the end of the immigration line as 200 photographers waited outside for her arrival. (British Airways did whisk her children and their nanny out a back door so they'd avoid the media crush.)
Airport police say they try to keep paparazzi from disrupting passenger flow by aggressively enforcing traffic rules and towing paparazzi cars. "We're laboring under the same problems as the city of Los Angeles -- what to do with these people?" said Sgt. James Holcomb of the airport police.
The LAX police force has a dignitary-protection squad that handles mostly heads of state, diplomats and politicians, and officers who can respond quickly when stars unexpectedly cause commotions in terminals.
A swarm of 60 photographers once greeted Jennifer Aniston after a flight from London, airport officials say, and trapped her as she tried to exit. Officers responded and created a "bubble" of protection to move her."After that we had three weeks fending phone calls from celebrities asking for security to get them through," said Ms. Castles of LAX. "The main issue for us is, who is a celebrity?" she said. In other words, who is "big" enough to merit special treatment?
Sgt. Holcomb notes that giving celebrities police protection at airports can sometimes worsen passenger flow -- the entourage draws attention and propagates the frenzy.Though many celebrities have long ago abandoned commercial airlines in favor of private-jet travel, they frequently turn back to airlines for international trips.
And some have begun using commercial jets more frequently because of environmental concerns about private jets -- it is tough to champion green causes and then get back on a jet with four people."They don't like to be seen in a bad light, no matter what," said Mr. Williams of British Airways.At LAX, most celebrities come and go without any fanfare or glad-handing. The airport says on average at least one A-list celebrity comes through every day, many partially shielding famous faces under ball caps. Before her legal troubles, Paris Hilton was able to fly Southwest Airlines Co. to Las Vegas without causing a stir, airport officials say. But no more.
Airport and airline officials say gate agents or skycaps who check in celebrities often tip off photographers -- and earn a percentage of the revenue a photo generates. Paparazzi have elaborate networks of photographers around the globe, so a tip that a star is on a certain flight means photographers will be waiting at the destination."Their intelligence is incredible," Sgt. Holcomb said. He refers to it as "legalized stalking."Of course, many times the tips come from the celebrity's publicist.
While some stars ask airlines to help them avoid photographers, others covet the attention and ask airline special-service representatives for help with hair and makeup before facing swarms of cameras.
At times, juggling the demands of stars can be difficult for airlines. Multiple celebrities on a flight can create uncomfortable situations if one gets more attention than the other. Sometimes heads of studios or corporate CEOs are on flights with stars and actually command more airline attention than an actor or actress since companies buy many more tickets.And sometimes stars don't want special attention.
At Virgin Atlantic Airways' posh "Clubhouse" at Heathrow, celebrities regularly use the same facility reserved for "Upper Class" customers who pay $10,000 or more for a round-trip ticket. The Clubhouse offers facials, haircuts and massages, plus a restaurant, hot tub and secluded seating area that can be commandeered for celebrities."More often than not, they just sit somewhere out in the open with everyone else," says Deborah Tanner, a concierge at the Country Club.
How the Air-Travel Industry Pampers and Protects VIPs; Paying for Celebrity Status
MIDDLE SEAT
By SCOTT MCCARTNEY (reprinted from 2008 but worth posting again)
Elite-level frequent fliers get lots of perks and attention from airlines. But it's nothing like the "star" treatment.Despite massive cost-cutting and shrinking service, airlines still roll out the red carpet for celebrities. Many carriers have "special service" staffers to speed stars and VIPs through airports and on to planes, or out back doors to limousines. Special rooms, some hidden behind unmarked doors adjacent to gates and some private lounges inside airport clubs, are reserved for politicians, movie stars, sports heroes and other dignitaries.
Celebrities receive special pampering from airlines including priority service and special meals.
"We are left to our own devices in terms of creativity," said Philip Williams, a British Airways PLC special-services representative at Los Angeles International Airport, which is ground zero for airline star treatment. British Airways recently slipped a major movie star out of the airport "completely avoiding photographers by devious, but legal, means," Mr. Williams says with pride. He can't say who, but airport officials say Angelina Jolie was a recent airport patron.
In general, if you have to ask for it, you probably don't qualify for special-services treatment. But even if you haven't won an Oscar, you can purchase a bit of special coddling for yourself for as little as $100.
AMR Corp.'s American Airlines has special concierge handling called "Five Star" service available at LAX and New York's Kennedy International Airport where an airline representative meets you, shuttles you quickly through check-in and security screening and on to a gate or airport club. The airline set up the service for movie studio VIPs and American doesn't advertise the service, says Mark Mitchell, American's managing director of customer experience.
You won't find mention of it on the airline's Web site. But it is available to anyone in the know.
(The phone number is 877-578-2702 )
Two private firms, Airport Assistance Worldwide and LJR & Associates, offer similar services to the public as well as the rich and famous. Both are based in Los Angeles, but serve other airports as well.
Amy Goldsmith, a public-relations executive, received a certificate for use of LJR's service as a gift from a friend and used it for a trip with her husband, baby and nanny. The family was met at the curb by a man who bypassed baggage check-in lines, security lines and then, once inside security, watched their belongings while they slipped into Starbucks. "It was amazing," she said, and has since used LJR for a second trip with her infant. The service cost about $110, including tips.
Actress Jennifer Aniston arrives at LAX.
"It made me uncomfortable when everyone was watching us move to the front of the line,
because I'm not that person," said Ms. Goldsmith. "But you get over it pretty quickly.
"Private services said they can't guarantee clients will be able to bypass lines -- that's up to Transportation Security Administration officials and airline workers. "Our reps are pretty aggressive when they need to be," said Michelle Kohler of Airport Assistance, whose prices at LAX start at $95.
The airlines' celebrity wrangling efforts can go much further. American's terminal at Washington's Reagan National Airport, an unmarked door in the concourse opens Oz-like to a private waiting room with a wall of autographed photos of members of Congress and movie stars. At some key airports, American has motorized privacy carts to ferry VIPs to gates with fringe hanging down from the roof that "obscures the faces of the VIPs," a spokesman says.
Airlines allow celebrities to order special meals -- and some travel internationally with their own chef who is allowed to cook in airplane galleys. Stars get private phone numbers to airline officials for help with bookings.
Carriers sometimes even send employees to stand in long lines at immigration and border security checkpoints if agencies won't grant special status for traveling stars.
For airlines, star travel is big business. In the early days of jet travel, photos of celebrities on aircraft stairs or smiling at the door to a plane amounted to extraordinary advertising, highlighting the glamour of air travel back then and confirming the credibility of airlines to a public unaccustomed to everyday air travel.
Airlines had their own photographers, and made sure company names and logos were perfectly placed over airplane doors or on staircases so they'd show up in the background of pictures.
Trans World Airlines billed itself as the "Airline of Stars," and owner Howard Hughes took extraordinary care of celebrities.
"He could stop an airplane at the drop of a hat for Elizabeth Taylor. And he did," said Maggie Anderson, who became TWA's first "ground hostess" in Los Angeles in 1965 and spent 10 years as manager of special services at LAX for American as well.
These days the glamour is gone from air travel, but the benefits of carrying celebrities remain. Besides the secondary perks of rubbing elbows with the famous, Hollywood is a big buyer of travel, particularly high-dollar first-class travel.
Being the carrier of choice for stars, or having your name show up in celebrity photos, can be a public-relations windfall."Airlines definitely want celebrities on planes," said Nancy Suey Castles, director of public relations at LAX.
Yet the challenges of handling stars have grown for carriers, both from dealing with tighter security and from swarms of paparazzi staking out keys star airports like LAX and London's Heathrow Airport.
Everyone boarding a plane has to go through government screening, although many airports have set up special screening lanes for first-class customers that can be used to speed through VIPs. At LAX, airlines say they used to be able to fax a list of a few people for whom they wanted to arrange expedited handling by U.S. Customs and Border Protection, such as slipping them through inspection lines reserved for airline crews.
But, now, CBP grants that only if the agency deems there would be a disruption in the line if VIPs stood waiting with everyone else.
Last July, even Victoria Beckham, aka pop singer "Posh Spice" and wife of soccer star David Beckham, was sent to the end of the immigration line as 200 photographers waited outside for her arrival. (British Airways did whisk her children and their nanny out a back door so they'd avoid the media crush.)
Airport police say they try to keep paparazzi from disrupting passenger flow by aggressively enforcing traffic rules and towing paparazzi cars. "We're laboring under the same problems as the city of Los Angeles -- what to do with these people?" said Sgt. James Holcomb of the airport police.
The LAX police force has a dignitary-protection squad that handles mostly heads of state, diplomats and politicians, and officers who can respond quickly when stars unexpectedly cause commotions in terminals.
A swarm of 60 photographers once greeted Jennifer Aniston after a flight from London, airport officials say, and trapped her as she tried to exit. Officers responded and created a "bubble" of protection to move her."After that we had three weeks fending phone calls from celebrities asking for security to get them through," said Ms. Castles of LAX. "The main issue for us is, who is a celebrity?" she said. In other words, who is "big" enough to merit special treatment?
Sgt. Holcomb notes that giving celebrities police protection at airports can sometimes worsen passenger flow -- the entourage draws attention and propagates the frenzy.Though many celebrities have long ago abandoned commercial airlines in favor of private-jet travel, they frequently turn back to airlines for international trips.
And some have begun using commercial jets more frequently because of environmental concerns about private jets -- it is tough to champion green causes and then get back on a jet with four people."They don't like to be seen in a bad light, no matter what," said Mr. Williams of British Airways.At LAX, most celebrities come and go without any fanfare or glad-handing. The airport says on average at least one A-list celebrity comes through every day, many partially shielding famous faces under ball caps. Before her legal troubles, Paris Hilton was able to fly Southwest Airlines Co. to Las Vegas without causing a stir, airport officials say. But no more.
Airport and airline officials say gate agents or skycaps who check in celebrities often tip off photographers -- and earn a percentage of the revenue a photo generates. Paparazzi have elaborate networks of photographers around the globe, so a tip that a star is on a certain flight means photographers will be waiting at the destination."Their intelligence is incredible," Sgt. Holcomb said. He refers to it as "legalized stalking."Of course, many times the tips come from the celebrity's publicist.
While some stars ask airlines to help them avoid photographers, others covet the attention and ask airline special-service representatives for help with hair and makeup before facing swarms of cameras.
At times, juggling the demands of stars can be difficult for airlines. Multiple celebrities on a flight can create uncomfortable situations if one gets more attention than the other. Sometimes heads of studios or corporate CEOs are on flights with stars and actually command more airline attention than an actor or actress since companies buy many more tickets.And sometimes stars don't want special attention.
At Virgin Atlantic Airways' posh "Clubhouse" at Heathrow, celebrities regularly use the same facility reserved for "Upper Class" customers who pay $10,000 or more for a round-trip ticket. The Clubhouse offers facials, haircuts and massages, plus a restaurant, hot tub and secluded seating area that can be commandeered for celebrities."More often than not, they just sit somewhere out in the open with everyone else," says Deborah Tanner, a concierge at the Country Club.
EU Likely to Clear Alliance of American, BA, Iberia
By DANIEL MICHAELS And P KIVINIEMI
European Union competition authorities are likely to approve Tuesday a long-debated commercial alliance among AMR Corp.'s American Airlines, British Airways PLC and Spain's Iberia Líneas Aéreas de España SA, according to people familiar with the case.
A green light from the EU for the linkup could be the first of several positive events in coming weeks for BA, which has been battered for two years by falling traffic, labor strife and other woes. BA may be poised for breakthroughs in its relations with cabin-crew employees, funding its huge pension deficit and finalizing its planned merger with Iberia.
If BA manages to resolve these issues favorably, the British carrier and its chief executive, Willie Walsh, would achieve a degree of certainty in critical business areas that has eluded the airline for more than a decade. Last week, Mr. Walsh told a gathering in London that he was confident the alliance and the merger "will be confirmed in the near future, [and] will be massive strategic landmarks for British Airways."
BA's flight operations posted their biggest loss ever for the financial year through March 31 amid weak demand and plunging business traffic. In April, BA was one of the carriers hardest hit by the closure of European airspace due to the eruption of an Icelandic volcano. And a string of strikes this year by cabin-crew employees has cost the airline £204 million ($307 million), BA says.
One sign the worst may have passed: BA says it is seeing a pickup in passenger revenue, particularly in high-margin trans-Atlantic corporate bookings. The carrier said it expects to break even this fiscal year at the pretax profit level and predicts a 6% rise in revenue.
For a bigger boost, Mr. Walsh is looking to regulators and unions. EU competition authorities have said they could decide this month on the alliance among BA, American and Iberia. The European Commission, the EU's executive arm, meets Tuesday, and the case is on its confidential agenda, a copy of which was seen by The Wall Street Journal.
People familiar with the case expect the commission to clear the alliance if the carriers meet certain conditions. The current effort marks the third time since 1998 that BA and American have attempted to get closer. U.S. regulators, who in February granted provisional approval for the alliance, are likely to finalize their consent in coming days, according to people familiar with the discussions.
The application for immunity from antitrust prosecution would let BA, American and Iberia join their commercial operations, such as marketing and network planning, in ways normally forbidden as collusion.
Big rivals, including Air France-KLM SA, Germany's Deutsche Lufthansa AG, Delta Air Lines Inc. and UAL Corp.'s United Airlines already have such immunity, and so have been able to compete more aggressively across the Atlantic than BA and American.
The Iberia merger, meanwhile, would give BA heft to compete better with Lufthansa and Air France-KLM.
EU regulators have said they will either approve the merger plan by Thursday or push their review to a second phase of deeper analysis. People familiar with the process said the EU is likely to green-light the deal, in part because the duo since 2005 have had an EU-sanctioned joint venture involving flights between London and Madrid.
Executives from BA and Iberia say they expect the deal to close by year end. Each carrier will maintain its brand identity within a new British-Spanish holding company, International Airlines Group. The structure mirrors those used by Air France and Lufthansa in their European acquisitions.
One of the last big hurdles in the merger has been sorting out BA's £3.7 billion deficit in its retirement plan. In a mark of progress on that front, BA last month submitted to Britain's Pensions Regulator a blueprint for closing the gap. Staff and external trustees of the program have already approved the approach.
BA Chief Financial Officer Keith Williams said in a statement that the regulator's initial response was positive. A spokeswoman for the regulator declined to comment on the plan or when a final ruling might be delivered.
Apparent progress on the pension deficit comes as Mr. Walsh may finally be cracking one of BA's toughest nuts: labor costs. The airline and Unite, the union representing its cabin crews, have been locked in a bitter fight for roughly 18 months over Mr. Walsh's efforts to change staffing practices and work rules that predate the carrier's privatization in 1987. Unite has opposed Mr. Walsh's moves, fighting BA in court and calling several strikes.
After a recent round of negotiations, Unite agreed to let its members review BA's latest offer, potentially a first step toward resolving the conflict. Unite leaders are remaining neutral on the proposal. Responses to the "consultative ballot," which Unite's mailed to members on July 5, are due next week.
A Unite spokesman said the union will use the vote to guide its next moves.
Unite joint general secretary Tony Woodley said last month that although the new offer marked an improvement, "acceptance of the offer [is] uncertain" because it didn't address some key concerns. Mr. Woodley accused BA of trying "to beat its employees into submission" by imposing contract terms and hiring new, less expensive staff.
Mr. Walsh said last week the proposal is "a fair and reasonable offer."
By DANIEL MICHAELS And P KIVINIEMI
European Union competition authorities are likely to approve Tuesday a long-debated commercial alliance among AMR Corp.'s American Airlines, British Airways PLC and Spain's Iberia Líneas Aéreas de España SA, according to people familiar with the case.
A green light from the EU for the linkup could be the first of several positive events in coming weeks for BA, which has been battered for two years by falling traffic, labor strife and other woes. BA may be poised for breakthroughs in its relations with cabin-crew employees, funding its huge pension deficit and finalizing its planned merger with Iberia.
If BA manages to resolve these issues favorably, the British carrier and its chief executive, Willie Walsh, would achieve a degree of certainty in critical business areas that has eluded the airline for more than a decade. Last week, Mr. Walsh told a gathering in London that he was confident the alliance and the merger "will be confirmed in the near future, [and] will be massive strategic landmarks for British Airways."
BA's flight operations posted their biggest loss ever for the financial year through March 31 amid weak demand and plunging business traffic. In April, BA was one of the carriers hardest hit by the closure of European airspace due to the eruption of an Icelandic volcano. And a string of strikes this year by cabin-crew employees has cost the airline £204 million ($307 million), BA says.
One sign the worst may have passed: BA says it is seeing a pickup in passenger revenue, particularly in high-margin trans-Atlantic corporate bookings. The carrier said it expects to break even this fiscal year at the pretax profit level and predicts a 6% rise in revenue.
For a bigger boost, Mr. Walsh is looking to regulators and unions. EU competition authorities have said they could decide this month on the alliance among BA, American and Iberia. The European Commission, the EU's executive arm, meets Tuesday, and the case is on its confidential agenda, a copy of which was seen by The Wall Street Journal.
People familiar with the case expect the commission to clear the alliance if the carriers meet certain conditions. The current effort marks the third time since 1998 that BA and American have attempted to get closer. U.S. regulators, who in February granted provisional approval for the alliance, are likely to finalize their consent in coming days, according to people familiar with the discussions.
The application for immunity from antitrust prosecution would let BA, American and Iberia join their commercial operations, such as marketing and network planning, in ways normally forbidden as collusion.
Big rivals, including Air France-KLM SA, Germany's Deutsche Lufthansa AG, Delta Air Lines Inc. and UAL Corp.'s United Airlines already have such immunity, and so have been able to compete more aggressively across the Atlantic than BA and American.
The Iberia merger, meanwhile, would give BA heft to compete better with Lufthansa and Air France-KLM.
EU regulators have said they will either approve the merger plan by Thursday or push their review to a second phase of deeper analysis. People familiar with the process said the EU is likely to green-light the deal, in part because the duo since 2005 have had an EU-sanctioned joint venture involving flights between London and Madrid.
Executives from BA and Iberia say they expect the deal to close by year end. Each carrier will maintain its brand identity within a new British-Spanish holding company, International Airlines Group. The structure mirrors those used by Air France and Lufthansa in their European acquisitions.
One of the last big hurdles in the merger has been sorting out BA's £3.7 billion deficit in its retirement plan. In a mark of progress on that front, BA last month submitted to Britain's Pensions Regulator a blueprint for closing the gap. Staff and external trustees of the program have already approved the approach.
BA Chief Financial Officer Keith Williams said in a statement that the regulator's initial response was positive. A spokeswoman for the regulator declined to comment on the plan or when a final ruling might be delivered.
Apparent progress on the pension deficit comes as Mr. Walsh may finally be cracking one of BA's toughest nuts: labor costs. The airline and Unite, the union representing its cabin crews, have been locked in a bitter fight for roughly 18 months over Mr. Walsh's efforts to change staffing practices and work rules that predate the carrier's privatization in 1987. Unite has opposed Mr. Walsh's moves, fighting BA in court and calling several strikes.
After a recent round of negotiations, Unite agreed to let its members review BA's latest offer, potentially a first step toward resolving the conflict. Unite leaders are remaining neutral on the proposal. Responses to the "consultative ballot," which Unite's mailed to members on July 5, are due next week.
A Unite spokesman said the union will use the vote to guide its next moves.
Unite joint general secretary Tony Woodley said last month that although the new offer marked an improvement, "acceptance of the offer [is] uncertain" because it didn't address some key concerns. Mr. Woodley accused BA of trying "to beat its employees into submission" by imposing contract terms and hiring new, less expensive staff.
Mr. Walsh said last week the proposal is "a fair and reasonable offer."
Sunday, July 11, 2010
Airline Industry: Growth Returning
by: Robert Herbst July 11, 2010
Is “growth” really returning to the airline industry? Based on almost daily press releases, airlines appear to be adding new destinations every week.
Analysis by AirlineFinancials.com shows most airlines are not adding any significant growth, but simply moving the chairs around the deck, as opposed to adding new ones. In other words, most airlines are – transferring - aircraft and resources from one route to another opposed to – adding – capacity.
Airline industry for this report includes the nine largest US airlines: Delta (DAL), American (AMR), United (UAUA), Continental (CAL), US Airways (LCC), Southwest (LUV), JetBlue (JBLU), Alaska (ALK), and Air Tran (AAI). Except where noted, data represents mainline operations.
Mainline Operations - 1st Half 2010 Compared to 1st Half 2009
Contrary to popular belief, available seat mile capacity (ASMs) shows Alaska, Air Tran, and JetBlue as the only major airlines actually adding capacity compared to last year. Collectively the nine airlines covered in this analysis flew 5.8 billion less ASMs in the first half of 2010 than they flew in the same time period a year ago.
United had the largest year-over-year capacity decline at 3.8%, followed closely by Southwest at a 3.3% decline. JetBlue had the largest increase at 5.8%.
Full-Year 2010 Capacity Projections Compared to 2009
Based on each airline’s investor updates, Air Tran, Alaska, and JetBlue will once again lead the industry in 2010 capacity growth compared to 2009. Only Southwest and United are projected not to add any capacity for 2010
Regional Affiliates – YOY Change 2007 - 2010
Another current misnomer is that the legacy mainline airlines have all increased their regional affiliate capacity while shrinking the mainline. Reality is, United is the only airline to have continuous increases in their regional affiliate capacity. Regional affiliate capacity for Delta, American, Continental, US Airways, and Alaska has been flat to declining over the last three years.
As a ratio of total consolidated capacity for 2010, US Airways is projected to have the highest regional impact, closely followed by United and Delta. American has by far the least amount of regional capacity compared to other legacy competitors.
Ten-Year Look Back
Capacity Change – 2nd Quarter 2010 Compared to 2nd Quarter 2000
The last major profitable growth period for the airline industry ended nearly ten years ago. Year 2000 was the last full year following approximately five years of record profits and growth for the airline industry.
Even after accounting for the 45% capacity increase from Alaska, 73% increase from Southwest, 345% increase from Air Tran, and the 8.7 billion ASM increase from upstart JetBlue, these nine airlines plus their merged partners, cumulatively operated 6.4% less ASM’s than they did in the same time period ten years ago.
Note for 2nd quarter 2000 capacity: Delta includes Northwest, American includes TWA, and US Airways includes America West.
Load Factor Change – 2nd Quarter 2010 Compared to 2nd Quarter 2000
One of the most significant industry changes over the last decade is the increase in every airlines’ load factor. Specifically for the 2nd quarter, Southwest’s 6.7% change in load factor was the industry’s smallest increase compared to ten years ago. All other airlines increased load factors from 10.3% to 14.6% Note: Load factor is the percentage of passenger seats sold.
Conclusion: It is the opinion of AirlineFinancials.com that passenger demand reconciled with little to no increase in capacity will continue to provide record load factors for at least the 3rd quarter of 2010. Further, this historically high traffic demand combined with lower fuel costs than previously projected will lead to significant profits for most of the airline industry.
by: Robert Herbst July 11, 2010
Is “growth” really returning to the airline industry? Based on almost daily press releases, airlines appear to be adding new destinations every week.
Analysis by AirlineFinancials.com shows most airlines are not adding any significant growth, but simply moving the chairs around the deck, as opposed to adding new ones. In other words, most airlines are – transferring - aircraft and resources from one route to another opposed to – adding – capacity.
Airline industry for this report includes the nine largest US airlines: Delta (DAL), American (AMR), United (UAUA), Continental (CAL), US Airways (LCC), Southwest (LUV), JetBlue (JBLU), Alaska (ALK), and Air Tran (AAI). Except where noted, data represents mainline operations.
Mainline Operations - 1st Half 2010 Compared to 1st Half 2009
Contrary to popular belief, available seat mile capacity (ASMs) shows Alaska, Air Tran, and JetBlue as the only major airlines actually adding capacity compared to last year. Collectively the nine airlines covered in this analysis flew 5.8 billion less ASMs in the first half of 2010 than they flew in the same time period a year ago.
United had the largest year-over-year capacity decline at 3.8%, followed closely by Southwest at a 3.3% decline. JetBlue had the largest increase at 5.8%.
Full-Year 2010 Capacity Projections Compared to 2009
Based on each airline’s investor updates, Air Tran, Alaska, and JetBlue will once again lead the industry in 2010 capacity growth compared to 2009. Only Southwest and United are projected not to add any capacity for 2010
Regional Affiliates – YOY Change 2007 - 2010
Another current misnomer is that the legacy mainline airlines have all increased their regional affiliate capacity while shrinking the mainline. Reality is, United is the only airline to have continuous increases in their regional affiliate capacity. Regional affiliate capacity for Delta, American, Continental, US Airways, and Alaska has been flat to declining over the last three years.
As a ratio of total consolidated capacity for 2010, US Airways is projected to have the highest regional impact, closely followed by United and Delta. American has by far the least amount of regional capacity compared to other legacy competitors.
Ten-Year Look Back
Capacity Change – 2nd Quarter 2010 Compared to 2nd Quarter 2000
The last major profitable growth period for the airline industry ended nearly ten years ago. Year 2000 was the last full year following approximately five years of record profits and growth for the airline industry.
Even after accounting for the 45% capacity increase from Alaska, 73% increase from Southwest, 345% increase from Air Tran, and the 8.7 billion ASM increase from upstart JetBlue, these nine airlines plus their merged partners, cumulatively operated 6.4% less ASM’s than they did in the same time period ten years ago.
Note for 2nd quarter 2000 capacity: Delta includes Northwest, American includes TWA, and US Airways includes America West.
Load Factor Change – 2nd Quarter 2010 Compared to 2nd Quarter 2000
One of the most significant industry changes over the last decade is the increase in every airlines’ load factor. Specifically for the 2nd quarter, Southwest’s 6.7% change in load factor was the industry’s smallest increase compared to ten years ago. All other airlines increased load factors from 10.3% to 14.6% Note: Load factor is the percentage of passenger seats sold.
Conclusion: It is the opinion of AirlineFinancials.com that passenger demand reconciled with little to no increase in capacity will continue to provide record load factors for at least the 3rd quarter of 2010. Further, this historically high traffic demand combined with lower fuel costs than previously projected will lead to significant profits for most of the airline industry.
Friday, July 09, 2010
Probe Into Missing Guns Shifts to Los Angeles
By SEAN GARDINER
The focus of the investigation of four guns that went missing after Israeli Prime Minister Benjamin Netanyahu's security team checked its luggage at John F. Kennedy Airport Sunday has shifted to Los Angeles International Airport, according an official with knowledge of the investigation.
On Sunday, Mr. Netanyahu's security detail flew into John F. Kennedy Airport in advance of the prime minister's arrival to the U.S. this past week. Two hard carrying cases, containing a total of seven Glock handguns, went through a Transportation Safety Administration screening point. One of the cases with four handguns in it was opened by the TSA agents, the official said.
After the agents ascertained that the officers had the permits allowing them to transport the weapons, the case was closed and a sticker acknowledging that the case had been inspected was placed on it, the official said. The other carrying case, which had three guns in it, wasn't opened, according to the official.
Both cases were then turned over to baggage handlers from AMR Corp.'s American Airlines, officials have said. When the Israeli security team arrived in Washington, the case with the three guns was there but the case with the four guns wasn't.
The official says that investigators have reviewed videotape surveillance from JFK and saw the carrying case with the now-missing guns being loaded onto the wrong, Los Angeles-bound American Airlines plane. The official said that investigators now believe that the case was mistakenly routed to Los Angeles and that the guns disappeared there.
The case had on a wrong routing tag that may have been left on the case from past airline trips.
The official said that the carrying case was found sometime Monday morning, not Tuesday night as was originally reported. The case was then sent on an American Airlines flight to Chicago and then onto Washington. When the Israeli security officers opened the container, the four guns were not in it.
American Airlines and TSA officials declined to comment on Friday as did a spokeswoman with the Israeli Consulate.
Write to Sean Gardiner at sean.gardiner@wsj.com
By SEAN GARDINER
The focus of the investigation of four guns that went missing after Israeli Prime Minister Benjamin Netanyahu's security team checked its luggage at John F. Kennedy Airport Sunday has shifted to Los Angeles International Airport, according an official with knowledge of the investigation.
On Sunday, Mr. Netanyahu's security detail flew into John F. Kennedy Airport in advance of the prime minister's arrival to the U.S. this past week. Two hard carrying cases, containing a total of seven Glock handguns, went through a Transportation Safety Administration screening point. One of the cases with four handguns in it was opened by the TSA agents, the official said.
After the agents ascertained that the officers had the permits allowing them to transport the weapons, the case was closed and a sticker acknowledging that the case had been inspected was placed on it, the official said. The other carrying case, which had three guns in it, wasn't opened, according to the official.
Both cases were then turned over to baggage handlers from AMR Corp.'s American Airlines, officials have said. When the Israeli security team arrived in Washington, the case with the three guns was there but the case with the four guns wasn't.
The official says that investigators have reviewed videotape surveillance from JFK and saw the carrying case with the now-missing guns being loaded onto the wrong, Los Angeles-bound American Airlines plane. The official said that investigators now believe that the case was mistakenly routed to Los Angeles and that the guns disappeared there.
The case had on a wrong routing tag that may have been left on the case from past airline trips.
The official said that the carrying case was found sometime Monday morning, not Tuesday night as was originally reported. The case was then sent on an American Airlines flight to Chicago and then onto Washington. When the Israeli security officers opened the container, the four guns were not in it.
American Airlines and TSA officials declined to comment on Friday as did a spokeswoman with the Israeli Consulate.
Write to Sean Gardiner at sean.gardiner@wsj.com
Thursday, July 08, 2010
American Airlines Applies for Authority to Fly Nonstop From Dallas/Fort Worth to Rio de Janeiro
Route Will Complement American's New Service to Brasilia from Miami and to Rio de Janeiro from New York Kennedy
Press Release Source: American Airlines On Thursday July 8, 2010, 3:50 pm
FORT WORTH, Texas, July 8 /PRNewswire-FirstCall/ -- American Airlines today applied to the U.S. Department of Transportation (DOT) for authority to fly nonstop from Dallas/Fort Worth International Airport (DFW) to Rio de Janeiro (GIG) three times a week beginning Nov. 18, 2010.
"We are pleased to offer flights from American's largest hub at DFW to the second largest city in South America," said Peter Dolara, American's Senior Vice President – Mexico Caribbean and Latin America. "Most existing service to Rio flies from gateways along the East Coast, and flights from DFW to Rio will provide substantial benefits to passengers and shippers, particularly because of the ability to make easy and convenient connections to and from dozens of cities via Dallas/Fort Worth.
"Brazil is an important Latin American marketplace and will host the 2014 World Cup. Rio is a cultural and commercial financial center that will be home to the 2016 Olympic Games.
American offers more flights to more destinations in Latin America than any other carrier and is committed to investing its resources to serve this important part of the world."
"Strengthening the scope of service offered at DFW is important to Dallas, Fort Worth, and the Metroplex," said Dallas Mayor Tom Leppert. "We encourage the U.S. Department of Transportation to grant American the right to offer these new flights, which will be very beneficial to travelers and boost economic ties between Dallas and South America."
"We support American in its bid to win approval for service between DFW and Rio," said Mayor Mike Moncrief of Fort Worth. "These new flights would be of great benefit to the travelers and shippers of North Texas and to those who make easy connections through DFW to Latin America."
American will fly the route using Boeing 767-300 aircraft configured with 28 Business Class and 191 Economy Class seats.
Here is the proposed schedule:
From DFW to GIG (Tuesdays, Thursdays and Saturdays)
Depart: 7:45 p.m.
Arrive: 10:25 a.m. (next day)
From GIG TO DFW (Wednesdays, Fridays and Sundays)
Depart: 11:15 p.m.
Arrive: 6:25 a.m. (next day)
American recently was granted DOT approval to offer daily nonstop service between New York's John F. Kennedy International Airport (JFK) and Rio de Janeiro and 4-days-a-week nonstop service between Miami and Brasilia starting Nov. 18. American also offers daily nonstop service from DFW and JFK to Sao Paulo and multiple flights from its hub at Miami International Airport to Sao Paulo, Rio de Janeiro, Belo Horizonte, Recife, and Salvador. In 2009, American entered into a codeshare alliance with GOL, which will offer service beyond Rio de Janeiro and Sao Paulo to other cities in Brazil.
Route Will Complement American's New Service to Brasilia from Miami and to Rio de Janeiro from New York Kennedy
Press Release Source: American Airlines On Thursday July 8, 2010, 3:50 pm
FORT WORTH, Texas, July 8 /PRNewswire-FirstCall/ -- American Airlines today applied to the U.S. Department of Transportation (DOT) for authority to fly nonstop from Dallas/Fort Worth International Airport (DFW) to Rio de Janeiro (GIG) three times a week beginning Nov. 18, 2010.
"We are pleased to offer flights from American's largest hub at DFW to the second largest city in South America," said Peter Dolara, American's Senior Vice President – Mexico Caribbean and Latin America. "Most existing service to Rio flies from gateways along the East Coast, and flights from DFW to Rio will provide substantial benefits to passengers and shippers, particularly because of the ability to make easy and convenient connections to and from dozens of cities via Dallas/Fort Worth.
"Brazil is an important Latin American marketplace and will host the 2014 World Cup. Rio is a cultural and commercial financial center that will be home to the 2016 Olympic Games.
American offers more flights to more destinations in Latin America than any other carrier and is committed to investing its resources to serve this important part of the world."
"Strengthening the scope of service offered at DFW is important to Dallas, Fort Worth, and the Metroplex," said Dallas Mayor Tom Leppert. "We encourage the U.S. Department of Transportation to grant American the right to offer these new flights, which will be very beneficial to travelers and boost economic ties between Dallas and South America."
"We support American in its bid to win approval for service between DFW and Rio," said Mayor Mike Moncrief of Fort Worth. "These new flights would be of great benefit to the travelers and shippers of North Texas and to those who make easy connections through DFW to Latin America."
American will fly the route using Boeing 767-300 aircraft configured with 28 Business Class and 191 Economy Class seats.
Here is the proposed schedule:
From DFW to GIG (Tuesdays, Thursdays and Saturdays)
Depart: 7:45 p.m.
Arrive: 10:25 a.m. (next day)
From GIG TO DFW (Wednesdays, Fridays and Sundays)
Depart: 11:15 p.m.
Arrive: 6:25 a.m. (next day)
American recently was granted DOT approval to offer daily nonstop service between New York's John F. Kennedy International Airport (JFK) and Rio de Janeiro and 4-days-a-week nonstop service between Miami and Brasilia starting Nov. 18. American also offers daily nonstop service from DFW and JFK to Sao Paulo and multiple flights from its hub at Miami International Airport to Sao Paulo, Rio de Janeiro, Belo Horizonte, Recife, and Salvador. In 2009, American entered into a codeshare alliance with GOL, which will offer service beyond Rio de Janeiro and Sao Paulo to other cities in Brazil.
More private planes are being repossessed
By Charisse Jones, USA TODAY
The recession isn't just stripping the middle class of their prize possessions. The wealthy are losing out, too.
In the past few weeks, Ken Cage, who specializes in repossessing private planes, says he's recovered two jets worth a combined $7.1 million.
And while business has ebbed a bit compared with last year, it remains four times what Cage saw before the recession.
"I think we picked up 15 (planes) that were $1 million or more, including one $20 million jet," says Cage, president of International Recovery & Remarketing Group in Orlando, reflecting on the past 12 months. "We'd never picked up anything close to that before."
It shouldn't come as a surprise that the nation's steepest economic downturn since the Great Depression has also struck the rich. One indicator has been the number of private planes repossessed from owners who can no longer pay the notes or who are buried under liens stemming from unpaid maintenance and fuel bills.
"The small, single-engine Cessnas and Pipers are being repossessed all the way on up to 747s," says Terence Haglund, founder of the Aviation Law Center in Williamsburg, Va., who represents many lenders. "It's definitely recession-related, and it's been increasing for the last couple of years."
He doesn't see the repossessions dipping significantly any time soon. "I think it'll continue," he says. "It has not slowed down yet."
The beleaguered owners include businesses that have acquired corporate jets, affluent professionals who may choose to cruise the skies in small Pipers, and the fabulously wealthy who once had their pick among all of the above.
"A lot of what we're seeing is ... their aircraft are no longer worth what they were when they paid for them (and), they can no longer afford to operate and maintain them," Haglund says. Some owners, he says, also get into trouble when they lease their planes to charter companies that then fail to pay what they owe for fuel, airport access and other services. That leads to liens on the aircraft.
"Banks can repossess the airplanes because some third party didn't pay the bills," he says. "The owner is stuck with either paying the bills someone else incurred or letting the bank take it back. It's a bad situation."
Cage says he repossessed roughly 350 planes in 2009 and a little more than 100 so far this year. Business Aircraft Sales' Ken Hill, who specializes in general aviation aircraft and whose recent recoveries include a Gulfstream IV, says he worked on nearly 100 cases last year. He's wrapped 45 cases so far in 2010 and has 22 more that are open.
It's impossible to determine how many private planes are at risk of being repossessed, how many owners are delinquent on payments and what effect that's had on values.
But Brian Foley, a general aviation management adviser who follows the market closely, says that of all the business jets flying a year ago this month, 18% were for sale. That's a "phenomenal" percentage, he says, because the norm is 12%.
Currently, 15% are for sale. Repossessed aircraft have been part of the glut, some observers say.
"Part of that bubble ... was both people selling their aircraft, as well as some repossessions," says Ron Gunnarson, vice president of marketing and communications for general aviation aircraft manufacturer Hawker Beechcraft in Wichita.
Generally busier
Some say the tide of repossessions of business aircraft has begun to turn.
Foley says defaults on business jets are traditionally very low, and the rise in repossessions happened a year ago.
"It did go up by a very low level, but it's not anything like home foreclosures," he says. However, for those who specialize in that area, "I'm sure those folks are busier. The repossession business for airplanes probably isn't a very active segment, so I'm sure they've seen an increase."
In the meantime, sales and production of new business aircraft remain down from 2008, a peak year, with a meaningful rebound not expected until 2011 at the earliest, some manufacturers say.
"We really don't see an uptick in significant activity until late 2011, and that's across the board from single-engine pistons, as well as business jets," says Doug Oliver, spokesman for aircraft maker Cessna.
Cessna will deliver roughly 225 business jets in 2010 compared with 489 in 2008. The company had expected to deliver more than 500 business aircraft last year, but because of the recession, delivered 289, Oliver says. "We had a considerable backlog of orders where people had put down non-refundable deposits, and because of the downturn, they ended up just walking away," he says.
Still, the daily use of business jets is on the rise, the charter business is improving, and the number of used aircraft for sale is starting to decline. "We're cautiously optimistic that we're ... here with the worst behind us," says Gunnarson of Hawker Beechcraft.
Higher-end repos
For those who chase aircraft dogged by delinquent payments, it's not just the number that's stood out, but their value.
"In 2007, we picked up a lot of single-engine planes worth $20,000 to $40,000," Cage says. "This year, the average value of the aircraft we've picked up was $400,000."
Cage, who also pursues other high-price items, such as yachts, says that it appears to be the collapse of the real estate bubble that's led many private owners to lose their planes.
"I would say 70% of the people we repossess from ... are in the real estate market," he says, noting that they range from salespeople to those in construction and related businesses. "A lot of people made good money in '04 and '05 and '06. By '08 or '09, things just collapsed around them. It was such a deep hit so quickly after a high point that it caught a lot of people."
But he and Hill say the pace of repossessions has slowed, in part because lenders have become more lenient.
Lenders sometimes wait up to six months before going after the aircraft, often because they don't want to be stuck with a depreciated asset that they now have to resell.
"When we're finally in touch with the aircraft owner, oftentimes the lender will still try to work out a deal with the owner ... because the lenders don't necessarily want the aircraft back," Haglund says. "In too many cases, the aircraft are worth less now than they were when they were financed — or worth less than what's owed on the debt. It's exactly like houses, except we're talking (values of) anywhere from $50,000 to $50 million."
Not a toy, but a tool
General aviation aircraft is the focus of Hill's business, and he balks at the idea that his trade is similar to that of those who reclaim cars or other items, noting that private aircraft play a key function in the nation's economy.
"General aviation is a great part of the economic development of this country," he says. "There's always the person who thinks airplanes are a toy. They're not a toy. (They're) a tool."
Hill says he's spending more time trying to help people figure out a way to keep their planes and maintain them.
"I do see a little bit of improvement in people being able to do that," Hill says. "I see more planes being saved, and more loans being kept current without going into total foreclosure."
But dozens of owners still can't pull out of their financial free fall, and some would rather hide the aircraft than see them seized. They'll stash them in hangars that could be halfway across the globe.
Tracking down an errant plane often requires flight-tracking websites, a network of contacts, a good pilot and plain, old-fashioned shoe leather.
"I've got four or five right now that I'm on the hunt for, but I'll find them," Hill says. "I have two outside the country, and we're tracking them and watching them. Sometimes you have to be patient, and you have to wait until it surfaces."
Rarely do defaulting owners know he's coming. "It's kind of like (the) grim reaper," says Hill, who's come to be known by that moniker. "You don't know he's there until he knocks on your door."
Hill says he's gone 35 to 40 days at a clip on many trips, and he's reclaimed planes from as far as Germany.
A licensed pilot with 12,000 hours under his belt, Hill's the one who usually flies the planes back. "I could fly anything that I repossess," he says.
Finding the aircraft is half the battle. The plane needs to meet certain criteria, such as having logbooks documenting that it's received required annual inspections and maintenance checks before it can be flown. A special ferry permit, allowing it to travel from one location to another, could be obtained if other records aren't available, but only after a mechanic deems the plane airworthy.
"Most of the time the batteries are dead, and things are going wrong," Cage says. "Planes are best when they're run frequently, and if folks are running out of money, they're not using the airplane. They're not paying for maintenance, so that's the biggest issue." Sometimes, he says, getting the plane in shape and back in the air can take months.
Some owners will resort to violence to hold onto their planes.
For cases that look particularly tough, Cage, a licensed private investigator, takes along Randy Craft, a former WWE wrestler, also known as Rockin' Randy.
Once, Cage says, an irate owner hit Craft with a car — though he was only driving at a few miles per hour. He and Craft have also been chased with shovels.
But Cage says that even the rich deserve some sympathy.
"I think that ego is still the biggest part of it, because they were really wealthy a couple years ago, and now the one thing they thought would never happen is staring them right in the face," he says. "A big part of the job is making sure that we treat these people properly. Allow them their dignity. Allow them their pride. Don't try to take that away from them
By Charisse Jones, USA TODAY
The recession isn't just stripping the middle class of their prize possessions. The wealthy are losing out, too.
In the past few weeks, Ken Cage, who specializes in repossessing private planes, says he's recovered two jets worth a combined $7.1 million.
And while business has ebbed a bit compared with last year, it remains four times what Cage saw before the recession.
"I think we picked up 15 (planes) that were $1 million or more, including one $20 million jet," says Cage, president of International Recovery & Remarketing Group in Orlando, reflecting on the past 12 months. "We'd never picked up anything close to that before."
It shouldn't come as a surprise that the nation's steepest economic downturn since the Great Depression has also struck the rich. One indicator has been the number of private planes repossessed from owners who can no longer pay the notes or who are buried under liens stemming from unpaid maintenance and fuel bills.
"The small, single-engine Cessnas and Pipers are being repossessed all the way on up to 747s," says Terence Haglund, founder of the Aviation Law Center in Williamsburg, Va., who represents many lenders. "It's definitely recession-related, and it's been increasing for the last couple of years."
He doesn't see the repossessions dipping significantly any time soon. "I think it'll continue," he says. "It has not slowed down yet."
The beleaguered owners include businesses that have acquired corporate jets, affluent professionals who may choose to cruise the skies in small Pipers, and the fabulously wealthy who once had their pick among all of the above.
"A lot of what we're seeing is ... their aircraft are no longer worth what they were when they paid for them (and), they can no longer afford to operate and maintain them," Haglund says. Some owners, he says, also get into trouble when they lease their planes to charter companies that then fail to pay what they owe for fuel, airport access and other services. That leads to liens on the aircraft.
"Banks can repossess the airplanes because some third party didn't pay the bills," he says. "The owner is stuck with either paying the bills someone else incurred or letting the bank take it back. It's a bad situation."
Cage says he repossessed roughly 350 planes in 2009 and a little more than 100 so far this year. Business Aircraft Sales' Ken Hill, who specializes in general aviation aircraft and whose recent recoveries include a Gulfstream IV, says he worked on nearly 100 cases last year. He's wrapped 45 cases so far in 2010 and has 22 more that are open.
It's impossible to determine how many private planes are at risk of being repossessed, how many owners are delinquent on payments and what effect that's had on values.
But Brian Foley, a general aviation management adviser who follows the market closely, says that of all the business jets flying a year ago this month, 18% were for sale. That's a "phenomenal" percentage, he says, because the norm is 12%.
Currently, 15% are for sale. Repossessed aircraft have been part of the glut, some observers say.
"Part of that bubble ... was both people selling their aircraft, as well as some repossessions," says Ron Gunnarson, vice president of marketing and communications for general aviation aircraft manufacturer Hawker Beechcraft in Wichita.
Generally busier
Some say the tide of repossessions of business aircraft has begun to turn.
Foley says defaults on business jets are traditionally very low, and the rise in repossessions happened a year ago.
"It did go up by a very low level, but it's not anything like home foreclosures," he says. However, for those who specialize in that area, "I'm sure those folks are busier. The repossession business for airplanes probably isn't a very active segment, so I'm sure they've seen an increase."
In the meantime, sales and production of new business aircraft remain down from 2008, a peak year, with a meaningful rebound not expected until 2011 at the earliest, some manufacturers say.
"We really don't see an uptick in significant activity until late 2011, and that's across the board from single-engine pistons, as well as business jets," says Doug Oliver, spokesman for aircraft maker Cessna.
Cessna will deliver roughly 225 business jets in 2010 compared with 489 in 2008. The company had expected to deliver more than 500 business aircraft last year, but because of the recession, delivered 289, Oliver says. "We had a considerable backlog of orders where people had put down non-refundable deposits, and because of the downturn, they ended up just walking away," he says.
Still, the daily use of business jets is on the rise, the charter business is improving, and the number of used aircraft for sale is starting to decline. "We're cautiously optimistic that we're ... here with the worst behind us," says Gunnarson of Hawker Beechcraft.
Higher-end repos
For those who chase aircraft dogged by delinquent payments, it's not just the number that's stood out, but their value.
"In 2007, we picked up a lot of single-engine planes worth $20,000 to $40,000," Cage says. "This year, the average value of the aircraft we've picked up was $400,000."
Cage, who also pursues other high-price items, such as yachts, says that it appears to be the collapse of the real estate bubble that's led many private owners to lose their planes.
"I would say 70% of the people we repossess from ... are in the real estate market," he says, noting that they range from salespeople to those in construction and related businesses. "A lot of people made good money in '04 and '05 and '06. By '08 or '09, things just collapsed around them. It was such a deep hit so quickly after a high point that it caught a lot of people."
But he and Hill say the pace of repossessions has slowed, in part because lenders have become more lenient.
Lenders sometimes wait up to six months before going after the aircraft, often because they don't want to be stuck with a depreciated asset that they now have to resell.
"When we're finally in touch with the aircraft owner, oftentimes the lender will still try to work out a deal with the owner ... because the lenders don't necessarily want the aircraft back," Haglund says. "In too many cases, the aircraft are worth less now than they were when they were financed — or worth less than what's owed on the debt. It's exactly like houses, except we're talking (values of) anywhere from $50,000 to $50 million."
Not a toy, but a tool
General aviation aircraft is the focus of Hill's business, and he balks at the idea that his trade is similar to that of those who reclaim cars or other items, noting that private aircraft play a key function in the nation's economy.
"General aviation is a great part of the economic development of this country," he says. "There's always the person who thinks airplanes are a toy. They're not a toy. (They're) a tool."
Hill says he's spending more time trying to help people figure out a way to keep their planes and maintain them.
"I do see a little bit of improvement in people being able to do that," Hill says. "I see more planes being saved, and more loans being kept current without going into total foreclosure."
But dozens of owners still can't pull out of their financial free fall, and some would rather hide the aircraft than see them seized. They'll stash them in hangars that could be halfway across the globe.
Tracking down an errant plane often requires flight-tracking websites, a network of contacts, a good pilot and plain, old-fashioned shoe leather.
"I've got four or five right now that I'm on the hunt for, but I'll find them," Hill says. "I have two outside the country, and we're tracking them and watching them. Sometimes you have to be patient, and you have to wait until it surfaces."
Rarely do defaulting owners know he's coming. "It's kind of like (the) grim reaper," says Hill, who's come to be known by that moniker. "You don't know he's there until he knocks on your door."
Hill says he's gone 35 to 40 days at a clip on many trips, and he's reclaimed planes from as far as Germany.
A licensed pilot with 12,000 hours under his belt, Hill's the one who usually flies the planes back. "I could fly anything that I repossess," he says.
Finding the aircraft is half the battle. The plane needs to meet certain criteria, such as having logbooks documenting that it's received required annual inspections and maintenance checks before it can be flown. A special ferry permit, allowing it to travel from one location to another, could be obtained if other records aren't available, but only after a mechanic deems the plane airworthy.
"Most of the time the batteries are dead, and things are going wrong," Cage says. "Planes are best when they're run frequently, and if folks are running out of money, they're not using the airplane. They're not paying for maintenance, so that's the biggest issue." Sometimes, he says, getting the plane in shape and back in the air can take months.
Some owners will resort to violence to hold onto their planes.
For cases that look particularly tough, Cage, a licensed private investigator, takes along Randy Craft, a former WWE wrestler, also known as Rockin' Randy.
Once, Cage says, an irate owner hit Craft with a car — though he was only driving at a few miles per hour. He and Craft have also been chased with shovels.
But Cage says that even the rich deserve some sympathy.
"I think that ego is still the biggest part of it, because they were really wealthy a couple years ago, and now the one thing they thought would never happen is staring them right in the face," he says. "A big part of the job is making sure that we treat these people properly. Allow them their dignity. Allow them their pride. Don't try to take that away from them
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