'Undercover Boss' role opens Republic Airways CEO's eyes
10/16/2010 3:00 PM'
Undercover Boss, featuring Bryan Bedford, of Republic Airways Holdings, airs at 9 p.m. ET Sunday on CBS.

ABOUT BRYAN BEDFORD
Title: Chairman, president and chief executive officer of Republic Airways Holdings.
Age: 48.

Education: Graduated from Florida State University with a bachelor's degree in accounting and finance. Earned his master's in business administration from the University of South Florida. He also is a certified public accountant and holds commercial, multi-engine and instrument flight ratings.

Career: Bedford joined Republic in 1999 as president and CEO. From 1995 to 1999, he served as president and CEO of Mesaba Holdings (a Northwest Airlines carrier). From 1994 to 1995, he was president and CEO of Business Express Airlines, a New England-based regional air carrier. He also has held senior executive positions at Express Airlines, Westair Holdings, Aspen Airways and Continental Express.

Service: Board of directors of the Regional Airline Association, the Metropolitan Milwaukee Association of Commerce, the Greater Milwaukee Council and St. Theodore Guerin Catholic High School in Noblesville.

Personal: Bedford and his wife, Maria, have eight children, ages 2 to 17. In their free time, the couple volunteer at their church.

"'Undercover Boss' role opens Republic Airways CEO's eyes";
var articleSummary = "He went from head honcho of an airline company to the guy dumping the lavatory waste from the aircraft."

INDIANAPOLIS — He went from head honcho of an airline company to the guy dumping the lavatory waste from the aircraft.

He went from, well, how can we say it? Bald to hairy.

It all happened when Republic Airways Holdings' Chairman, President and CEO Bryan Bedford disguised himself to work undercover on the front lines with employees at his Indianapolis-based company. He did it for an episode of the TV series "Undercover Boss" that will air at 9 p.m. Sunday on CBS.

Though the show aims to entertain, it became quite serious for Bedford, whose billion-dollar-a-year business ranks as one of the top air carriers in the country.

He said he learned all sorts of things during the August taping, including how tough it is to be a flight attendant (he contributed to a flight's late departure) and how companywide pay cuts were affecting his employees' lives.

But perhaps most important, he learned what he was doing wrong as a boss.

"What was eye-opening, the most noticeable thing was just the disconnect and (poor) communication between the management team and front-line employees," Bedford said.

While working in different roles for the company — including cleaning aircraft, checking baggage, dumping aircraft toilets and standing at the ticket counter — he asked fellow employees why they didn't take their complaints to management to implore change.

The same response came time and time again: "No, I've talked to management about this stuff, and they never listen," Bedford said.

Though that was shocking and a bit hurtful to hear, it prompted Bedford to plan some solutions for the near future. They include having other executives work the front line with employees and gathering teams of bosses to meet with small groups of employees.

Those types of changes are exactly what a gig like "Undercover Boss" should bring about, said Karl Ahlrichs, a human resources consultant at Gregory & Appel Insurance in Indianapolis.
"There's nothing like putting on sheep's clothing and going out amongst the flock," he said.
And in the end, the employees learn something as well.

"Business gets a bad rap in contemporary cultures," Ahlrichs said. "One of the key messages in these shows is that the people who are running businesses aren't really different from the people who are four levels down."

Sometimes in the daily grind, that gets forgotten, Bedford said.

"When you are the boss, you are sort of sitting in the office running business based on spreadsheets and revenues versus cost. It's very impersonal," he said. "When you are actually working side by side and hearing about their struggles, it's very personal. It's life-changing. You can never go back to thinking of them as anything other than family."

And, as often takes place on "Undercover Boss," Bedford happened upon some employees with personal challenges, and, in the end, helped them out.

He couldn't reveal details of that or other things that happened during taping.

"I would be crucified," he said, laughing.

But he could reveal what lengths he went to not to be recognized by employees, who were told the company was being filmed for some other reason.

"The disguise was significant. I'm follicle-y challenged," Bedford said. "I wore a wig and some sort of very dorky-looking glasses and grew some facial hair."

All to be undercover and low key, which is exactly how he will watch the show Sunday night — at home with his family, including wife Maria and their eight children.

Delta to Add 700 Flight-Attendant Jobs as Travel Demand Improves, CEO Says
By Mary Jane Credeur - Oct 15, 2010 9:30 AM MT

Delta Air Lines Inc., the world’s second-largest air carrier, is adding about 700 flight attendant jobs as demand for travel improves, Chief Executive Officer Richard Anderson said.

Delta first offered the jobs to flight attendants who were on furlough and 425 accepted, which “still leaves a few hundred positions to fill,” Anderson said in his weekly recorded message to employees. The company expects to interview about 90 candidates a day through the end of the year as it goes through the 60,000 applications it received, he said.

Delta has about 20,000 flight attendants, and the new positions would be a 3.5 percent increase for that work group. Flight attendants are voting through Nov. 3 on whether to be represented by the Association of Flight Attendants union, which represented the Northwest group before Delta bought the smaller airline in 2008.

Pre-merger Delta flight attendants have twice rejected union drives. A change by the U.S. National Mediation Board now allows the majority of votes cast to determine the outcome of an election. Previously, abstaining from voting was counted as a “no,” setting a higher threshold for unions to win approval.

United Airlines and Continental Airlines merged in October to form United Continental Holdings Inc., surpassing Atlanta- based Delta as the world’s biggest carrier.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net.

U.S. Department of Transportation Tentatively Grants Antitrust Immunity to American Airlines and Japan Airlines

The Two
Airlines Will Enter Into Joint Venture After Final DOT Order is Issued and Japan Ministry of Land, Infrastructure, Transport and Tourism Grants Approval

FORT WORTH, Texas and TOKYO, Oct. 6 /PRNewswire-FirstCall/ -- American Airlines and Japan Airlines, both members of the oneworld® Alliance, today welcomed an order issued by the United States Department of Transportation (DOT) tentatively approving the antitrust immunity application filed by the two airlines in February.

By this action, the DOT has moved another step closer to granting antitrust immunity to the two airlines as allowed under a provision of the Open Skies agreement initialed by the United States and Japan last December. Open Skies allows new service between the U.S. and Tokyo International Airport at Haneda (HND).

American will begin daily flights between New York's John F. Kennedy International Airport (JFK) and Haneda on Jan. 20, 2011, while Japan Airlines will commence daily flights between Haneda and San Francisco (SFO) as well as Honolulu (HNL) starting Oct. 31, 2010.

Under an immunized agreement, the two airlines will cooperate commercially on flights between North America and Asia while continuing to operate as separate legal entities. Consumers will benefit by, among other things, improved schedule and routing choices, and will continue to receive reciprocal frequent flyer benefits and airport lounge access. Employees and shareholders also will benefit as the airlines will have greater ability to sustain existing service and launch new routes, and improve their overall competitive position.

Obtaining antitrust immunity for their proposed trans-Pacific joint business will allow American Airlines and Japan Airlines to better compete with the two other global alliances that serve the United States – Asia market.

"An immunized joint business will benefit the U.S. and Japanese economies, promote increased cultural exchange and provide more travel choices and greater access to discounted fares for millions of consumers," said Will Ris, American's Senior Vice President – Government Affairs. "Once DOT and the Ministry of Land, Infrastructure, Transport and Tourism of Japan issue final approvals for the joint venture, then officials from the U.S. and Japanese governments will sign the Open Skies agreement.

"American is appreciative of the support its application received from Senate Assistant Majority Leader Dick Durbin of Illinois and Ranking Member of the Senate Commerce, Science and Transportation Committee Kay Bailey Hutchison of Texas," said Ris. "We also thank the Chairman of the Senate Commerce Committee, Jay Rockefeller of West Virginia, for his consistent support of alliances.

"And we thank the 18,000-member Association of Professional Flight Attendants and the 25,000-member Transport Workers Union of America who submitted letters of endorsement to DOT," Ris added.

"We appreciate that DOT recognizes the value in our application. Upon receiving immunity, Japan Airlines and American Airlines will cooperate more closely with the common goal of serving our customers better," said Tsutomu Ando, Executive Officer of International Affairs at Japan Airlines. "These new opportunities afforded by developments in the aviation landscape in Japan will allow us to optimize flight schedules, pricing, and enhance operational efficiency to ultimately benefit the customers."

Pilot who landed damaged 747 dies

In 1989, Cronin brought the United jet back to Honolulu after a cargo doorblew off.

By Gregg K. Kakesako
Oct 07, 2010

David Cronin, the pilot of a United Airlines Boeing 747 who was able to landthe plane at Honolulu Airport after a cargo door blew off while en routefrom Honolulu to Auckland, New Zealand, in 1989, has died. Cronin had beenon his second-to-last flight when he captained the flight.

David Cronin, the hero pilot who landed a crippled United Airlines Boeing747 in Honolulu 21 years ago, died Monday at his home in Minden, Nev. He was81.

Cronin was the captain on United Flight 811, which left Honolulu forAuckland, New Zealand, on Feb. 24, 1989. The 747 was 23,000 feet over thePacific 85 miles south of Oahu when a forward cargo door blew out, creating a gaping hole in the right side of the aircraft.

The explosion knocked out two of the plane's four engines. Nine passengersseated in business class died when their seats were sucked out of the plane. Despite the damage, Cronin and his crew were able to make an emergency landing at Honolulu Airport about 22 minutes later.

There were 336passengers and 18 crew members on board."He not only brought the plane back safely, but he invented many of the safety procedures used today," Ben Mohide, a passenger on the flight, told the Star-Advertiser yesterday. "He was a remarkable man. He will be missed greatly."He learned of Cronin's death from a woman who was a purser on Flight 811.

Mohide also kept in contact with other survivors living in Australia.Cronin, who joined United Airlines as a pilot in 1954, was 59 and on his second-to-last flight before mandatory retirement when he captained Flight811.

His ability to land the plane safely prompted a discussion over raising themandatory retirement age. The Federal Aviation Administration raised the ageto 65 in 2007. Investigators later determined faulty wiring and a short caused the cargo door to open mid-flight, causing explosive decompression. The jet was 19 years old at the time with more than 15,000 takeoffs and landings.

The cargo door later was recovered from a depth of 17,000 feet. Mohide, who kept in touch with Cronin over the past two decades, once asked him how he handled the situation, with so many emergencies taking place at the same time."'I just prayed,'" Mohide said Cronin replied. "'I just prayed and got on with it.'"In 1993, Mohide consulted with Cronin before writing the book "Hawaiian Nightmares" about the air disaster. "He helped me get the terminology and details correctly," he said. Mohide wrote and published the book at the urging of several counselors who told him it would help him get over the guilt of surviving the air disaster.

He last talked with Cronin last year, calling him to explain that illness kept him from attending a 20th anniversary event sponsored by an Australian television station."We've exchanged Christmas cards and birthday cards and kept in touch over the years," Mohide added. Mohide said he has not returned to the islands since his 1989 visit.

The incident occurred nearly a year after Aloha Airlines Flight 243 betweenHilo and Honolulu lost the top half of its fuselage on April 28, 1988, butwas able to land safely at Maui's Kahului Airport. Flight attendant C.B.Lansing, who was blown out of the airplane, was killed. After his retirement from United, Cronin flew competitively in sport races in Reno, Nev.

Funeral services will be held at Hilltop Community Church in Carson City,Nev., on Monday.

American Air Says Venture Creates NYC-London `Shuttle'
By Mary Schlangenstein -
Oct 6, 2010 4:59 PM MT

American Airlines will step up competition in New York City by coordinating flights with joint- venture partner British Airways Plc to offer London departures every half hour each evening.
The carriers’ trans-Atlantic business alliance, formally kicked off in London today with partner Iberia Lineas Aereas de Espana SA, lets travelers book flights from any of their websites.

American and British Airways will mesh timing of their 11 daily Heathrow airport departures at New York’s Kennedy and three flights at New Jersey’s Newark.

“It will be like a shuttle service between JFK and Heathrow,” Tom Horton, American’s president, said in an interview today. “Nobody else, even the merged entities in the U.S., can come anywhere close to that.”

The coordinated Kennedy-Heathrow flights, starting in April, will depart at 8 a.m., 9:30 a.m., 6 p.m. and then every half hour into the evening. They will compete with offerings from United and Continental airlines, which merged on Oct. 1 to create the world’s largest carrier, and Delta Air Lines Inc., which acquired Northwest Airlines Corp. in 2008.

The venture lets travelers earn and redeem frequent-flier miles on each airline’s flights and gain access to a broader range of connecting service and fares, the companies said.

Regulatory Approval

It puts the three carriers on equal footing with rivals in the U.S. and Europe that already secured regulatory approval to coordinate flight schedules, pricing, frequent-flier benefits and customer service. Costs and revenue will be shared among the three on flights between the European Union, Switzerland and Norway and the U.S., Canada and Mexico.

“We have 15 years of experience cooperating with trans- Atlantic partners, which is what has allowed us to grow to be the clear leader in the total European market,” said Kent Landers, a spokesman for Atlanta-based Delta. The carrier is part of the SkyTeam alliance.

United Continental Holdings Inc. and its Virgin Atlantic partner will offer 10 daily flights between Heathrow and New York starting this quarter, serving both John F. Kennedy International and Newark Liberty, said Julie King, a spokeswoman for the combined carrier.

Average ticket prices are likely to increase as the carriers coordinate flights to attract more business travelers, who generally pay higher fares, and drop the lowest available fares from the market, said Michael Derchin, an analyst with CRT Capital Group LLC in Stamford, Connecticut.

Business Travelers

A larger number of business travelers “might come out of Delta’s or United’s or somebody else’s hide,” Derchin said in an interview.

United Continental, with Continental’s major hub at Newark, holds the largest market share among four New York City-area airports, based on number of destinations from New York, weekly departures and weekly seats in the market, according to Dan McKenzie, a Hudson Securities analyst. Delta ranks second, followed by American.

American, a unit of Fort Worth, Texas-based AMR Corp., and British Airways had sought antitrust approval for their joint venture in two earlier attempts dating back to 1997. Iberia and British Airways plan to merge later this year.

The U.S. Transportation Department today gave tentative approval for a similar antitrust agreement between American and Japan Airlines Corp. for flights across the Pacific.

Pilot Recalls

American also said today it plans to recall 545 flight attendants and 250 pilots, in part to staff international service being added under the business alliance. American is at least the fourth major U.S. carrier to announce employee recalls since July as business travel returns following the recession.

AMR rose 10 cents, or 1.6 percent, to $6.21 at 4:15 p.m. in New York Stock Exchange composite trading. The shares have fallen 20 percent this year.

American will add flights between Kennedy and Budapest, and Chicago and Helsinki next year, and increase the frequency of flights between Kennedy and Barcelona, and Miami and Madrid. British Airways will offer a new London-San Diego flight and Iberia will begin a flight between Madrid and Los Angeles.

The combined route network of American, British Airways and Iberia will serve more than 400 destinations in 105 countries with about 5,200 daily departures, the companies said.

American is continuing talks with the Port Authority of New York and New Jersey to move British Airways and Iberia into its overhauled terminal at Kennedy. The plan would require an expansion of Terminal 8, where American completed a $1.3 billion renovation in 2007. The 1-million-square-foot facility is American’s primary international gateway in the eastern U.S.
“We’re working closely with the Port Authority,” Horton said. “We have a great working relationship with them.”

He declined to comment on progress in the talks, which began after the three carriers won U.S. approval for their business venture. A Port Authority spokeswoman didn’t immediately return a call seeking comment.

To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

BA, Iberia and American Airlines launch tie-up
British Airways, Iberia and American Airlines announce new routes under transatlantic deal

Jane Wardell, AP Business Writer, On Wednesday October 6, 2010, 9:35 am

LONDON (AP) -- American Airlines, British Airways and Iberia launched their transatlantic joint business Wednesday, unveiling new routes and detailing benefits for customers that include a shared frequent flyers program.

BA Chief Executive Willie Walsh said the strengthening of the trio's relationship was about "generating revenue synergies" but declined to put a figure on cost savings or revenue gains.
The three carriers have placed codeshares on more than 2,600 additional flights -- passengers will be able to buy tickets for all three airlines on each of the carriers websites.

Walsh said coordinating schedules has allowed the airlines to change flight times to offer customers a wider range of options and better connecting journeys.

Four new routes were unveiled: New York to Budapest, Chicago to Helsinki, London to San Diego and Madrid to Los Angeles.

The new arrangement follows BA's merger with Iberia this year that created Europe's third-largest airline. It strengthens the trio's existing relationship under the oneworld alliance but stops short of a full financial deal with American Airlines because of stringent U.S. regulation that bars foreign ownership of airlines.

The closer ties between the trio have worried rival airlines -- Virgin Atlantic Airways is concerned about BA's dominance at Heathrow Airport.

Gerard Arpey, chief executive of American Airlines parent AMR Corp., said the deal had allowed the U.S. airline to recall around 800 employees -- 250 pilots and around 550 flight attendants.
"This is exactly the kind of growth we're looking for and my hope is that trends like this will continue."

Iberia Chief Executive Antonio Vazquez said that Madrid's Barajas airport still had excess capacity and he expected the hub to become one of the main gateways for flights between North America and Europe "in the very near future."

The three airlines will coordinate their call centers as well as websites and will also create new oneworld customer transfer desks at key airports.

BA, AMR Start Atlantic Accord With New Routes, 2,700 Codeshares
By Steve Rothwell -
Oct 6, 2010 6:30 AM MT

We’ve been waiting for 14 years and it’s great news that we can now put our plans into action,” AMR Chief Executive Officer Gerard Arpey said at a press conference in London. Photographer: Harry Page/Bloomberg

British Airways Plc, American Airlines and Iberia Lineas Aereas de Espana SA of Spain began their trans-Atlantic alliance by sharing booking codes on more than 2,700 services and adding four new routes to their network.

British Airways and AMR Corp.’s American won antitrust approval for their part of the tie-up in July after similar plans were blocked by regulators in 1997 and 2001. The venture will give the Oneworld group allies control of almost 50 percent of U.S. flights at London Heathrow airport, Europe’s busiest in.

“We’ve been waiting for 14 years and it’s great news that we can now put our plans into action,” AMR Chief Executive Officer Gerard Arpey said today at a press conference in London. “Our revenue-sharing partnership will further boost Oneworld, and enable us to reduce costs and attract new business.”

The carriers announced four new services to begin in April, with flights to be introduced by American from New York JFK to Budapest and from Chicago to Helsinki, by British Airways from London to San Diego and by Iberia from Madrid to Los Angeles.

“Combined selling and scheduling means that we will able to operate routes that would not have been viable,” British Airways CEO Willie Walsh said at the press conference.

Central to the accord is the coordination of fares and timetables among the three airlines, with costs and revenue being shared on flights between the European Union, Switzerland and Norway and the U.S., Canada and Mexico.

‘One-Stop Shop’

The partnership amounts to a “one-stop shop” for trans- Atlantic travel, Walsh said, adding that while the in-cabin product won’t be completely harmonized, “we will look after you as if you are flying on one single entity.”

British Airways will add its code to 2,063 American and Iberia flights to 181 cities, with Iberia codesharing on 354 British Airways and AMR trips to 96 locations and American on 322 BA and Iberia flights to 101 destinations.

The companies say the pact will allow them to better compete with the SkyTeam grouping led by Air France-KLM Group and Delta Air Lines Inc. and the Star Alliance that includes Deutsche Lufthansa AG and United Continental Holdings Inc.’s United Airlines, both of which had already won immunity from antitrust regulators.

‘Single-Door Approach’

“This gives them a better single-door approach for the business market when corporate travel managers are coming to book flights, and it will increase competition in coach,” said Chris Tarry, an independent analyst who has followed the airline industry for almost three decades. “But in terms of the other alliances they’re playing catch-up rather than jumping ahead.”

Walsh said he sees no evidence to support concern about a possible double-dip recession, and that demand has “improved” from a year ago, albeit from a “very low base.” AMR’s Arpey said that the recovery remains “fragile.”

The event was also attended by Antonio Vazquez Romero, the chairman of Iberia, with which British Airways plans to merge by the end of this year.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net.
To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net.

American Air to recall nearly 800 workers

On Wednesday October 6, 2010, 8:59 am EDT
CHICAGO (Reuters) -

AMR Corp (NYSE:AMR - News), parent of American Airlines, said on Wednesday it will recall 545 flight attendants and 250 pilots to handle network expansion on international routes.

The company said its partnership with British Airways Plc (LSE:BAY.L - News) and Spain's Iberia (MCE:IBLA.MC - News), which begins on Wednesday, has created new opportunities. AMR also noted its pending alliance with Japan Airlines Corp (Other OTC:JALFQ.PK - News).
"This is exactly the kind of growth we're hoping to achieve with our network strategy, and my hope is that trends like this will continue," AMR Chief Executive Gerard Arpey said in a statement.

The company said the first group of 25 pilots will be recalled in mid-November. More will be recalled at a rate of about 30 per month.

Flight attendant recall notices will be issued to about 225 flight attendants in October, with more notices following.

The U.S. airline industry has been battered in recent years by an economic downturn that drained travel demand. Top carriers, including American Airlines, slashed capacity to match their supply with demand.

Demand has since begun to rebound.
(Reporting by Kyle Peterson, editing by Gerald E. McCormick)

Continental Attendants Spurn Merger-Contract Overture From Peers at United

By Mary Schlangenstein - Oct 5, 2010 10:10 AM

Continental Airlines flight attendants declined to join their peers at merger partner United Airlines in immediate contract talks at the combined carrier, possibly slowing work on a joint labor agreement. United attendants said in an exchange of letters that working together now would give employees more clout in talks with United Continental Holdings Inc., the new company created by the Oct. 1 merger.

Continental attendants want to vote first on a labor accord reached with their airline’s previous management, said Joseph Tiberi, a spokesman at International Association of Machinists and Aerospace Workers in Washington. The disagreement may imperil Chief Executive Officer Jeff Smisek’s goal of having joint contracts with all labor groups by the time United Continental Holdings, the world’s largest carrier, receives a single airline operating certificate in about a year.

“Getting a transition agreement would be important, both in delivering benefits to the company, which could conceivably be shared back, but also just to get agreement between the parties on some of the thornier issues before a single-carrier certificate,” Robert Mann, president of airline consultant R.W. Mann & Co., said today in an interview. Single contracts are “essential” as the combined airline works to achieve its goal of as much as $1.2 billion in annual savings and new revenue by 2013, Mann said.

Choosing Representatives Workers normally would vote on which union represents them and then negotiate a new contract to cover all employees in that labor group. The Association of Flight Attendants, which represents 16,000 United workers, instead wants to negotiate a joint contract that would be administered by the union selected later to represent the attendants, said Sara Nelson, an AFA spokeswoman. The AFA points to pilots at Delta Air Lines Inc. and Northwest Airlines Corp., who negotiated a joint contract with Delta before those two carriers completed their merger.

In contrast, pilots and flight attendants at US Airways Group Inc. continue to work under separate contracts five years after America West Holdings Corp. and US Airways combined. The lack of single contracts means US Airways must maintain separate scheduling and work rules, pay and benefit plans for each company.

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

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net

WestJet, American may strike code deal
American Airlines has emerged as a possible U.S. partner for WestJet Airlines Ltd. after the Calgary-based carrier struck its first code-share deal Monday with Cathay Pacific Airways Ltd.

Scott Deveau, Financial Post · Monday, Oct. 4, 2010

American Airlines has emerged as a possible U.S. partner for WestJet Airlines Ltd. after the Calgary-based carrier struck its first code-share deal Monday with Cathay Pacific Airways Ltd.
While the scope of the Cathay Pacific deal is somewhat limited, opening up six Canadian cities to the Hong Kong carrier in addition to Toronto and Vancouver, it is a significant milestone for WestJet, which holds future partnerships as the cornerstone of its growth strategy.

Such code-share agreements allow airlines to seamlessly pass passengers and luggage onto the each other’s planes using one ticket. In addition to Cathay Pacific, WestJet has laid the groundwork for a similar deal with Air France-KLM, and signed another memorandum of understanding with British Airways PLC.

But finding a U.S. partner has proven as problematic as it is pivotal in gaining access to the estimated $2-billion market such code-share deals have in Canada.

“It’s important to us to continue our expansion into the U.S., because our focus so far has been primarily [to leisure destinations],” said Hugh Dunleavy, WestJet’s executive vice-president of strategy and planning.

“With a U.S. partner you’d be able to look at more year-round destinations, which are probably a combination of both business or leisure, or just business. For that, you need a strong U.S. partner,” Mr. Dunleavy added.

If WestJet and American Airlines strike a deal, it will be the first major partnership in this country for the U.S. giant since its bid to bankroll the consolidation of the Canadian airline industry failed 10 years ago.

While WestJet is content to let its partners in Asia, Europe and Latin Ameria handle marketing and sales under their brands, with a U.S. partner WestJet would be looking to play a more active role, including selling tickets under its own name to destinations in its partner’s network, Mr. Dunleavy said.

In 2008, WestJet jumped the gun in announcing a preliminary deal with Southwest Airlines Co.
But earlier this year, Gregg Saretsky, WestJet’s chief executive, said that deal had been shelved and that WestJet was considering a tie-up with Delta Air Lines Inc. instead due to the inadequacies of Southwest’s reservation system.

The Delta deal has since hit some turbulence, however, after U.S. regulators rejected a planned slot swap between Delta and US Airways Inc. that would have granted five landing slots to WestJet at New York’s LaGuardia airport as an offshoot.

“Unless we can get some good slots, either working with a partner to share slots or to gain access to them, we’re not going to go down that path,” Mr. Dunleavy said. “We still keep our contacts going with Delta, but this is a relationship that they have to sort out, and we’ll see where that goes.”

Meanwhile, early talks have begun with AMR Corp., the parent company of American Airlines, he said.

Both U.S. airlines are not part of Air Canada’s Star Alliance, and as such, have essentially been left without the possiblity of a Canadian partner until WestJet implemented its new SabreSonic reservation system late last year.

“Delta is a potential partner, being a key player in Skyteam, and the same could be said of American [Airlines] as a part of Oneworld,” Mr. Dunleavy said. “With the consolidation going on in the U.S., Continental and United are now combined. There aren’t too many big airlines that are left that are not aligned with [the Star Alliance].”

WestJet has held talks with 70 airlines worldwide about potential code-shares, he said, but won’t implement another one until early 2011.

The goal is to have “three or four” in place by the end of next year, Mr. Dunleavy said.
scdeveau@nationalpost.comRead more:

http://www.financialpost.com/news/WestJet+American+strike+code+deal/3622610/story.html#ixzz11WzbcqFq

Delta Refocuses On Its Service
Carrier, No Longer the Biggest, Retunes Its Marketing

By MIKE ESTERL
ATLANTA—No longer the world's biggest airline, Delta Air Lines Inc. is shifting its focus—and marketing—from size to service.

After putting its energy into the 2008 acquisition of Northwest Airlines, the Atlanta-based carrier plans to spend more than $2 billion through 2013 to lure travelers with new flat-bed seats, video on demand and upgraded facilities in hotly contested markets such as New York.
Delta says it has a two-year head start on Chicago-based United Continental Holdings Inc., the industry's new biggest carrier by traffic, which only now is embarking on the difficult task of integrating two huge airlines.

"We ultimately believe the carrier providing the best customer service will win," Glen Hauenstein, Delta's head of network planning and revenue management, said in an interview.
United Airlines parent UAL Corp. and Continental Airlines Inc. closed their $3.2 billion merger Friday, supplanting Delta as No. 1 in size. AMR Corp.'s American Airlines is a distant third among U.S. airlines.

United Continental Chief Executive Jeff Smisek acknowledged the new carrier has "a lot of hard work ahead" as it melds operations but told reporters Friday, "We're going to have the world's best network." Executives of the airline also said a modern fleet and the world's largest frequent-flier program will help the airline win lucrative business travel.

From January through August, United and Continental flew a combined 142 billion revenue passenger miles, the number of revenue-paying passengers multiplied by the distance traveled. That was 8.7% more than Delta. United and Continental posted a combined net profit of $506 million in the quarter ended June 30, compared with $467 million at Delta. And United Continental is a member of Star Alliance, a partnership of international carriers that is larger than Delta's competing SkyTeam.

Delta began an advertising campaign in September that plays down size. "No one who flies is waiting for a bigger airline, they're waiting for one that's committed to making flying better," says a print ad developed by the Wieden+Kennedy agency. A television commercial says the best airline is the one whose employees "know how to put themselves on the other side of the counter."

Neither carrier boasts a significant edge, according to industry observers. United Continental and Delta each has nearly a 20% market share in the U.S. United Continental is larger in Asia and Latin America, but Delta is bigger on trans-Atlantic routes to Europe and Africa.
"I think both of them are on equal footing for the business traveler," said Dale Eastlund, a director at Carlson Wagonlit Travel, which advises companies on travel budgets.

Some of Delta's consumer rankings sagged after it combined operations with Northwest. The carrier had the highest percentage of consumer complaints in the first half of this year among 18 U.S. airlines, according to the Department of Transportation. Delta ranked 14th for on-time performance in the 12 months through July, while United and Continental ranked 3rd and 8th, respectively.

Separate consumer-satisfaction surveys published in June by J.D. Power and the American Customer Satisfaction Index ranked Continental ahead of Delta, with United behind both. United and Continental will continue to fly as separate airlines for as long as 18 months while they await regulatory approval to fly as one carrier.

Delta already enjoys an edge in one area: Internet service for domestic passengers. Fliers aboard more than 500 of its airplanes have Wi-Fi access, compared with 13 at United and zero at Continental.

But Delta is playing catch-up on other fronts. As part of its planned upgrades, Delta is installing video on demand for movies and TV programs in economy class on its larger jets. Continental already offers the service aboard many of its long-distance flights.

Delta also plans to have 50 of its transoceanic airplanes outfitted with flat-bed seats in business class by next summer, and double that number by 2013. Yet United Continental expects more than 100 planes, or about 65% of its international fleet, will have flat-bed seating by the end of this year.

The Atlanta-based carrier's biggest push is in the New York area, where Continental is the market leader through its hub at Newark Liberty International Airport in New Jersey. Delta is breaking ground this autumn on a $1.2 billion overhaul of its outdated terminals at John F. Kennedy International Airport and expects to be finished by 2013.

United Continental notes that Newark's airport is only half an hour by train from Manhattan. Its customers in New York can fly "without enduring the hassles and delays of a major construction project," a United Continental spokeswoman said.

Delta also is updating dining options at its terminal in New York's LaGuardia Airport. Delta had hoped to get dozens of US Airways Group Inc.'s slots at the airport this year, but the deal was rejected by regulators. Delta has appealed and is "very hopeful" of a favorable ruling, Mr. Hauenstein said.

Jim Corridore, an airline analyst at Standard & Poor's Equity Research, thinks United Continental has an advantage with hubs in bigger markets, such as Chicago and Los Angeles.
But he also believes Delta enjoys an edge by having already completed its integration of Northwest. "These things don't always go smoothly," Mr. Corridore said. Other analysts also caution that United Continental will have its hands full as it tries to combine fleets, computer systems and employees. And pilots at the merging airlines haven't agreed on new contracts, injecting additional uncertainty.

Mr. Hauenstein said both carriers' hubs "have their strengths." But he likened Hartsfield-Jackson Atlanta International Airport, the world's busiest, to "the Boardwalk," referring to the prime spot on the game Monopoly.

—Susan Carey contributed to this article.

Continental Airlines brand destined for the dustbin
Sunday, September 26, 2010 Last updated: Sunday September 26, 2010, 3:11 PM
BY RICHARD NEWMAN
The Record
STAFF WRITER

The Continental Airlines brand, which former Chief Executive Officer Gordon Bethune famously took "from worst to first," will soon follow Pan Am and TWA into the pages of aviation history.
For more than 10 years Continental has been flying more trans-Atlantic flights from the New York area than any other airline and has earned the respect of high-paying business travelers around the world. The Houston-based carrier's "Work Hard, Fly Right" slogan is ubiquitous on New York-area billboards.

But within a year the name that dates from 1937 — when aviator Robert F. Six changed it from regional carrier Varney Speed Lines — will be removed from such ads and from the airline's fleet of more than 500 aircraft, replaced by the United Airlines brand name.

"Continental has been a major presence in New Jersey and the East Coast for a long time,'' Rutgers Professor Joseph J. Seneca said of Continental's pending union with United Airlines, expected to be made official by Friday. "But the industry has gone through so many changes, people have come to expect them."

Under the latest airline merger agreement announced in May, Continental's globe logos on the tail fins will survive and the company will be run by Continental CEO Jeff Smisek. But the headquarters will be in United's hometown of Chicago.

The deal, valued at more than $3 billion, will allow the new United Airlines to overtake Delta, Air France-KLM and American Airlines to become the world's largest carrier based on traffic when the stock swap is completed. The parent company will be called United Continental Holdings Inc. and will trade under the ticker UAL on the New York Stock Exchange. United shareholders will hold 55 percent of the shares.

Executives at both airlines expect the merger will generate $1 billion to $1.2 billion in savings and new revenue by 2013.

The merger of the country's third- and fourth-largest airlines is a sign of the times for so-called legacy carriers, the hub-and-spoke players that predate the 1978 deregulation of an industry whipsawed by the Sept. 11, 2001, terrorist attacks, the SARS outbreak in Asia and the oil price shocks of two years ago.

At the same time, competition from domestic airlines with lower operating costs — among them Southwest, JetBlue and Spirit — whittled away at the legacy carriers' market share, forcing them to lower their fares.

Taken together, these forces compelled United and Continental to combine. The carriers lost more than $900 million last year while generating a combined $29 billion in revenue and serving 144 million passengers. In the second quarter, both airlines returned to profitability. The two carriers employ 88,000, including Continental's 14,000 at Newark, where United has a much smaller presence.

"The Continental name will be gone, but it will be a stronger airline," aviation consultant Mike Boyd said. "United is strong in Asia, Continental is strong in Latin America, and there is little overlap."

Antitrust lawsuit

Shareholders approved the merger on Sept. 17, but another obstacle remains. About 50 passengers and travel agents filed a lawsuit in San Francisco and have asked a federal judge to issue an injunction to block the merger. They argue it violates antitrust laws and will result in less competition, higher fares and less service.

"[The merger] creates the largest airline in the history of the industry, creates monopolies in 13 separate markets, it will reduce capacity, service will be less, prices will rise," said Joseph Alioto, attorney for the plaintiffs. The plaintiffs include one from New Jersey, Ted Friedli, owner of Excel Travel in Long Branch, who declined to comment while the case is pending.

Alioto said he represented travelers and travel agents in a similar suit in 2008 to try to stop the Delta-Northwest merger and negotiated a settlement with the carriers shortly before that deal closed. He declined to discuss the terms of that agreement.

According to a report by Bloomberg News, Smisek appeared in court last month to respond to plaintiffs' allegations and acknowledged in his testimony that the merged airline would be the only choice for consumers seeking to fly non-stop between some cities, including Denver and Newark. Smisek said the two airlines each have about 3,000 employees at their respective headquarters and the merger will result in 1,500 to 1,800 of those employees losing their jobs. Elimination of "front-line" employees — flight attendants, reservation agents and pilots — will be "very modest indeed," Smisek said.

At Newark, it is possible the deal will actually result in lower fares on some well-traveled routes. That is because the airlines agreed to give up 18 round-trip slots at Newark to Southwest Airlines to appease federal government antitrust watchdogs at the Department of Justice, who surprised many industry experts by ruling relatively quickly on the merger request.

The agency completed its review last month and decided not to stand in the way. The Justice Department said on Aug. 27 that the merger would result in "a limited number of routes where United and Continental offer competing non-stop service" and that the divesture of slots to Southwest "resolves the department's principal competition concerns."

Joining workforces

Continental carries one in every seven passengers at Newark, where fares are higher than the national average and above the average at the two major New York City airports, where there is more competition.

"When Southwest comes in with a $200 fare, there is a hugely strong incentive for others to match it," said Kevin Mitchell, chairman of the Business and Travel Coalition in Radnor, Pa.
Separately, JetBlue Airways announced plans this month to start flying in the spring between Newark and Boston, a route on which Continental has charged more than five times what other airlines charge at John F. Kennedy International and La Guardia airports.

If the stock swap is completed by Friday, the combined carriers will start making decisions on which company's policies and procedures will prevail on everything from flight attendant hotel-stay policies on layovers to customers' frequent flier benefits.

"This is not a culture clash, it's a culture fit," said Mike Boyd, an aviation consultant in Colorado. Both airlines are focused on customer service and on building upon their already substantial international reach, he said. The most difficult part of the merger will be integrating workforces, Boyd said.

Different unions

That will be easier for the work groups that belong to the same unions, as is the case with pilots. But other groups belong to different unions. United flight attendants, for example, are represented by the Association of Flight Attendants and Continental's belong to the International Association of Machinists and Aerospace Workers.

Employee groups will have to agree on representation before joint contracts can be negotiated, a process that can take years. Continental, which unlike United has not been through a bankruptcy in recent years, also has had better relations with its unionized workers.
Meanwhile in Cleveland, local officials concerned Continental's hub there will be less relevant because of United's strong position in Chicago, recently announced an agreement with United and Continental to keep at least 90 percent of their flights operating for two years after they merge.

New Jersey travelers should hope Continental's standards of service will survive even though the name will not, said East Rutherford travel agent Rick Ardis. "To me, Continental has been a bit more stable and definitely more consumer friendly [than United]," he said. "Among the major carriers, they have the best customer service."

"A lot of corporate travel managers feel prices will go up," said Kevin Mitchell, chairman of the Business Travel Coalition in Radnor, Pa.

But they also expect fare hikes will be partially offset by fliers' ability to get corporate discounts within an expanded route system, he said. And at Newark, fares will likely come down quite a bit on some routes because of new service planned by low-cost carriers.

Airline officials say it's too soon to say which company's policies and service offerings will prevail and it will be a while before any changes are noticed by customers, Julie King, a Continental spokeswoman, said last week in an e-mail. The consolidation of the two companies under a single Federal Aviation Administration-approved operating certificate, with all employees guided by the same operating manuals, will take "at least a year," she said.

Until then, the companies will continue to operate separately, except that on what the airlines are calling Customer Day One, to be held "sometime in the spring," the carriers will begin to link reservation systems, kiosks, check-in systems and frequent-flier programs, she said.
Some employees' feelings about the merger are mixed.

"It's a good thing," Graziela Lindahl of Maplewood, a clerk in Continental's accounting office at Newark, said of the merger, as she made her way to an employee shuttle bus behind Terminal C. "I'll be proud to be working for the biggest airline in the industry."

"The anxiety level is high because we don't know what the future holds,'' said Ken Diaz, a United flight attendant and union leader stationed at JFK. United flight attendants hope for a contract with Continental wages, which are higher, and United work rules, which are less demanding, he said.

Some Continental workers at Newark who spoke on condition of anonymity last week said they were concerned about job security.

"People with 15 years' seniority have no concerns, but the others do," said a cargo agent.

American Wants to Fly LA-Shanghai
By Ted Reed 10/02/10 - 11:24 AM EDT

DALLAS (TheStreet) -- American(AMR_) filed Friday for its third nonstop China route, seeking approval to fly between Los Angeles and Shanghai.

Nonstop daily service on a Boeing 777 seating 247 passengers, including 16 in first class and 37 in business class, would begin April 5, 2011.

Los Angeles-Shanghai is the largest air travel market between the U.S. and China, but currently it is served only by China Eastern Airlines. "These new flights would be the only nonstops between Los Angeles and Shanghai operated by a U.S. airline," said Will Ris, American Senior Vice President for Government Affairs, in a prepared statement.

Currently, 28 unused weekly frequencies available are available under the U.S.- China Air Transport Agreement. Daily service from Los Angeles would require seven frequencies.
American currently flies from Chicago to both Shanghai and Beijing. Shanghai flights began in 2006 and Beijing began in 2010. American is 0 in comparison to Delta(DAL_) and United(UAL_), because the Oneworld alliance does not include a mainland Chinese airline.

The carrier has said it will compensate by using Hong Kong, a hub for partner Cathay Pacific whose Dragonair subsidiary serves 15 Chinese cities, and Tokyo, where hub carrier Japan Airlines serves six Chinese cities. Additionally, as Kenji Hashimoto, vice president of strategic alliances, has said, "There are a lot of airlines in China."
-- Written by Ted Reed in Charlotte, N.C. .

Southwest and AirTran: Excess Baggage?
By Fool TV September 29, 2010

Southwest Airlines (NYSE: LUV) is buying AirTran (NYSE: AAI) for $1.4 billion. This helps Southwest in some obvious ways, such as taking out a competitor (and leaving JetBlue (Nasdaq: JBLU) as its primary low-cost rival), and getting into Delta's (NYSE: DAL) home turf in Atlanta.

But Fool analyst Rex Moore says a question to ask for any merger is "Why now?" An analyst asked exactly that on the conference call announcing the merger. Southwest CEO Gary Kelly gave three reasons: 1) The financial health of the company, 2) there is little or no organic growth left with Southwest's route system, and 3) the right leadership team is in place.

Kelly says making this merger work depends "on whether or not we can make the networks work." The merger creates a larger low-fare airline with 74 airports that either Southwest or AirTran did not serve. This gives management the opportunity to create hundreds of new itineraries, including the possibilities of going to entirely new airports, but it will be challenging to do it efficiently.

The bottom line here: Mergers are tough to pull off. (And the "Why now?" question should also be asked of the proposed "merger of equals" between UAL (Nasdaq: UAUA) and Continental Airlines (NYSE: CAL).) Southwest risks damaging its very valuable brand if the customer experience degrades. But this has been the best-managed airline over the past several years, and as an investor Rex gives it the benefit of the doubt.

British Airways Accelerates Return of Jumbo Jets After Traveling Rebounds
By Steve Rothwell - Sep 29, 2010 7:25 AM MT

British Airways Plc will return to service two of the eight Boeing Co. 747 jumbo jets it grounded during the recession as demand for travel rebounds faster than the company had anticipated.

The 350-seat 747-400s have been retrieved from storage and are undergoing maintenance checks, with one to be reinstated at the end of January and the other a few weeks later, Chief Executive Officer Willie Walsh said today in an interview.

British Airways is among carriers that responded to the slump by idling jetliners near Victorville on the southern edge of the Mojave Desert in California, where the dry conditions hamper corrosion. The retrieval of the 747s reflects an outlook for demand that’s “more positive” than before, Walsh said.

“In some cases we’re just putting capacity back in where we had taken it out, but we are also looking at new destinations and will probably make some announcement in relation to that in the near future,” the CEO said on the sidelines of the MRO Europe aviation maintenance conference in London.

One of the 747s will be used instead of a Boeing 777 for flights from the U.K. capital’s Heathrow airport to Dallas, freeing up the smaller plane to operate a seventh daily flight to New York John F. Kennedy International Airport, as disclosed in August, British Airways spokesman James von der Fecht said.

“The second 747 is expected to be introduced into our summer 2011 schedule, but the destination it will serve hasn’t yet been decided,” he said.

Jumbo Fleet

British Airways has 49 Boeing 747s in its fleet, including the eight grounded, which are used for long-haul services to cities including Los Angeles, Johannesburg and Sydney.

Wide-body planes accounted for about 25 percent of the 200 aircraft retrieved from storage in May and June as carriers sought to tap rising demand for long-haul trips and a leap in cargo shipments. The number of 747s recalled in June exceeded those mothballed for the first time since January 2009, data compiled by aviation consultant Ascend Worldwide Ltd. shows.

Walsh said in the interview that he is “optimistic about the outlook for 2011,” with British Airways poised to begin services to Cancun in Mexico in November before adding Tokyo Haneda in February and Buenos Aires in March.

Europe’s third-biggest carrier is lifting winter capacity about 7 percent from a year earlier but says it will only add seats where it can do so without depressing prices.

CEO Calls

Walsh said his revelation earlier this month that British Airways and Iberia Lineas Aereas de Espana SA have identified 12 merger candidates they might pursue once their own combination is completed has provoked huge interest from industry leaders.

“I’ve had an incredible number of telephone calls from airline CEO’s asking if they are on the list,” Walsh said. “The pace of consolidation is going to accelerate.”

British Airways and Madrid-based Iberia have agreed to form a new company, International Consolidated Airlines Group SA, subject to the approval of both sets of shareholders, with votes planned for later this year.

The U.K. carrier, Iberia and AMR Corp.’s American Airlines have also signed an agreement to start their trans-Atlantic alliance next month, they said today.

Under the deal, approved by antitrust regulators in July, the three carriers will share revenue from flights between the European Union, Switzerland and Norway and the U.S., Mexico and Canada, irrespective of which of them takes the booking.

To contact the reporter on this story: Steve Rothwell in London at srothwell@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net
.

British Airways, American and Iberia agree joint business
Venture is worth a combined $7 billion in annual revenues
Sept. 29, 2010, 4:24 a.m.

MADRID (MarketWatch) — British Airways said Wednesday it has inked a transatlantic joint venture with American Airlines and Iberia that is worth a combined $7 billion in annual revenues.

The revenue-sharing deal will allow British Airways, American Airlines, owned by AMR Corp. and Spain’s Iberia to cooperate on flights between the European Union, Switzerland, Norway, the U.S., Mexico and Canada.

No matter which airline takes the booking, all companies will benefit under the terms of the deal, already agreed by regulatory authorities in the European Union and the U.S.

The joint business will launch in October and will also enable the airlines’ One World alliance to “compete on an equal footing” with other global alliances that have been allowed to operate similar businesses for years, British Airways said in a statement.

The airline also said the business will allow customers better access to cheaper fares and more convenient connections.

Shares of British Airways fell 0.4% in London and shares of Iberia dropped 0.5% in Madrid, tracking a broad retreat in European stocks.

A merger is already in the works between Iberia and British Airways, but it still needs to be approved by shareholders at the Spanish airline, which could take place in November.

Meanwhile, operations at British Airways were disrupted this spring by Iceland’s volcanic-ash cloud as well as strikes by cabin crew protesting pay and work conditions. Unite, the union representing the cabin crew, has threatened further strike action, according to media reports.

Stephen Pope, managing editor of Spotlight Ideas, said the deal announced Wednesday has to be seen as “good news” for the three airlines given the benefits of passenger traffic and reduced costs.

“The flag carriers such as BA and IB have to find ways to reduce costs, as the impact of the budget carriers and the recent strikes BA faced have severely dented the bottom line and caused worrying margin compression,” Pope said in emailed comments.

“Of course there will be detractors, e.g. Virgin Atlantic, as they see it creating a monopoly,” he said. “However, the deal was approved in the summer and is this relationship so different from structures of cooperation such as ‘One World’ or ‘Star Alliance’?”

Barbara Kollmeyer is an editor for MarketWatch in Madrid.

Some U.S. airports haven't regained all the service they lost in 2008 when airlines reduced domestic flying due to high oil prices. Large U.S. airports that have seen big reductions in scheduled seats on domestic flights: in September 2010 vs. September 2007

Airport Percentage change

Cincinnati -50%

Oakland -39%

Ontario, Calif. -39%

San Jose -29%

Kansas City -24%

Sacramento -22%

St. Louis -21%

Cleveland -20%

Las Vegas -19%

Tampa -19%

San Diego -18%

Raleigh/Durham -17%

Santa Ana (John Wayne) -17%

Chicago Midway -17%

Pittsburgh -16%

Albuquerque -15%

Orlando -15%

New York Kennedy -14%

Phoenix -13%

Newark -13%

Portland, Ore. -11%

Indianapolis -11%

Memphis -11%

Chicago O'Hare -11%

Houston (Bush) -10%

Nashville -10%

Source: USA TODAY analysis of airline schedule data from OAG -- Official Airline Guide