Flight attendant's job is hard, challenging, wonderful



Sunday, December 12, 2010


By ERIC TORBENSON / The Dallas Morning News


etorbenson@dallasnews.com

It's a two-Hershey-bar trip for Kristen Heller.

Nine flights hop-scotching six cities over 48 hours; for fliers, it's an itinerary that reads like a dare.

For Heller, it's long enough to earn her two of her guilty pleasure treats.But the 6,450 air miles isn't an unusual "sequence" for the American Airlines Inc. flight attendant to fly. As the breadwinner in her family at the moment, Heller flies as many hours as she can each month since flight attendants, like pilots, get paid only for the time the planes are moving.

The candy bars – she likes them with almonds – are her special treat on the road to help take the edge off what's become a grinding career for flight attendants.

Gone are the jet set days where the job was its own passport to exotic shores – when flight attendants were the stars of air carrier advertising. Now most airline flight attendants, having given back money and benefits to help keep their carriers financially aloft last decade, work more hours to earn their old salaries and face new security-related duties and planes that are fuller than ever.

Heller, who has been a flight attendant for nearly two decades, still loves the job.

"It is still fun," she said. "I still even get excited about takeoff, isn't that so corny? I'm totally about the takeoff."

Some flight attendants are more about the landing and exit. When a JetBlue Airways flight attendant in August screamed at passengers, grabbed beers from a beverage cart and slid down an evacuation chute, it put a spotlight on a profession and its pressures.

Globe-trotting whimsy, adventure and even high fashion have given way to a job that can be a grind.

Heller's average schedule has her flying 80 to 85 hours a month and, while that might sound cushy, it actually puts her on the road for 16 to 18 days a month. When she flew an international schedule from American's Miami base, she was often out for 21 days a month.

The glamour attracted her to the job as a 21-year-old; today, at age 40, it's a bit harder to find the thrill.

"This doesn't happen every day, but I just got a bag of vomit handed to me," she said in the back of an MD-80 flying from Dallas/Fort Worth International Airport to Portland, Ore. Later in that same flight, a passenger hands her a dirty diaper to throw away.

As the airline industry has been squeezed for profits, flight attendants find themselves up in the air longer, managing more irate passengers and scanning rows for suspicious behavior.

"If there's glamour still in this job, I don't really see it," said Laura Glading, a New York-based flight attendant who serves as the president of the Association of Professional Flight Attendants. Having to work harder to earn the previous levels of income, coupled with more responsibilities and a coarser flying public, can create fatigue.
"I feel very motherly about it, but in my position I think our members are flying a very, very unhealthy lifestyle," Glading said. She has a hard time recommending the profession to people interesting in flying. "I think it's gotten tougher for the fliers, too, but for our members the job has been a real struggle."

On her feet

Heller's feet pay a heavy price for the job's long work hours; she wears 2-inch Aerosoles heels and is on them for much of every flight, pushing a beverage cart up and down the aisle and walking the cabin at least every 15 minutes.

With carriers such as American and its competitors having eliminated niceties for coach passengers, she's forced to help passengers understand the new economic reality.

"'Yes' is really easy," Heller said. " 'No' takes a lot more explanation. I get to say 'I'm sorry' a lot," she said. " 'I'm sorry we don't have a pillow or a blanket for you.' "

Among the annoyances she faces are passengers asking for help lifting overstuffed carry-ons into overhead bins. Heller suggests that there could be chivalrous men on board to help; she can't afford a back injury that would sideline her and eat into her pay.
The proliferation of electronics on board keeps flight attendants busier than ever on takeoffs and landings, as safety rules require such gadgets be turned off. "I've literally had to show people how to turn their iPods off," she said.

Heller's weapon in this never-ending battle: an inexhaustible smile supply.

A little back-of-the-beverage-napkin work on her part estimates that on an MD-80 flying four times in a day she's bringing at least 1,100 smiles a day, and they come naturally. She brushes aside shoulder-length hair to show them off when she leans in for a drink order.

That's a lot of smiles for not a lot of pay.

American says flight attendant pay ranges widely, from under $24,000 for someone flying the minimum number of monthly hours needed to get full benefits to more than $73,000 for a senior flight attendant who flies international routes.

American's top-scale flight attendants earn $46 to $49 an hour depending on whether they fly internationally or not – but remember that they're flying 70 to 80 hours a month. Southwest Airlines and Continental Airlines flight attendants have the only higher hourly wage rates.

For Heller, the nine flights on this trip will net her about 18.5 hours of paid flight time, plus $1.25 an hour per diem for the time she's on duty.

She says a flight attendant with her experience and schedule usually earns about $38,000 a year, which is just above the pay range for an average flight attendant given by the APFA.

Flight attendants at American can control their schedules through the bidding process, where they tell airline schedulers what kind of flying and generally what days they'd like to work.

The airline's scheduling program takes in all the bid requests and crunches out a schedule; flight attendants soon figure out what kind of work they can "hold" with their seniority, since the most senior workers get their pick of American's routes.

If flight attendants don't like what the computer gives them, they can try to trade out of trips they don't want or add more flying than they're given.

Many flight attendants pick a sequence of flights like the one Heller did and do it several times a month because they like the routine; others like the variety of different airports and routings each month. And most flight attendants must fly as "reserves" that can be called upon on short notice to fly.

Heller typically bids the "No. 1" position out of three on her crew, meaning she serves first class and deals with more frequent fliers. She's still among the more junior ranks of American's 16,000 flight attendants but has enough seniority to hold that position. Some flight attendants don't like working the "front of the plane," but for her, it's a chance to interact more with fliers and shape their experience.

"They're really easy to please up there," she said. "When we're delayed, they know there's really nothing that any of us can do to make it go away or make it go any faster."

Heller usually bids for flights on weekends and those that start early in the morning, as she's often up at 5 a.m. This trip, she was up even earlier to see her family off on a trip.

First of two

Her first flight on this trip leaves a bit late at 4:57 p.m. First stop is Memphis, then it's back to Dallas before flying on to Portland, where she'll be at a Radisson hotel at 1:30 a.m. Dallas time. It's the first of two overnight stays on the trip; she'll spend the next night in Minneapolis and will also make stops in Austin and Chicago.

The hotels and airports go by fast enough that there's barely any time to feel a sense of place when you're on the road. Portland didn't feel much different from Minneapolis the next night except it wasn't as cool. Memphis didn't even smell like barbecue, as the airport often can.

Heller remembers her favorite layover – a sunny trip to Bainbridge Island near Seattle where she and her fellow crewmembers sipped micro-brews while overlooking a harbor. But most of the trips she flies are like this one: busy, with sleep at a premium.
"I'm surprised how good I feel," she said on board the flight to Portland as the first day nears an end. She's helped by an ability to fall asleep almost immediately to catch crucial winks before Friday morning's check-in at Portland International Airport.

Unlike this reporter, who caught two cat-naps over the trip sequence, Heller can't nod off on the job. Her caffeine intake also can't interfere with her sleeping, so when she has to drink coffee she mixes American's basic brew with powdered decaffeinated grounds, plus some 2 percent milk and a single sugar packet – a concoction that a few passengers have asked her to make for them, too, once they tried it.

Heller also has a survival strategy for food in the air, as the airline long ago stopped providing meals for flight attendants.

For this trip she packs two bananas and two apples and puts peanut butter in little reusable containers. A burrito at Chicago's O'Hare International Airport's Burrito Beach will be a welcome treat between flights.

Consuming fiber and staying hydrated is key when you're on the road that much; she's not a fan of just plain water, so she takes hers with a slice of lemon.

Pleasant job

Through almost 19 years of flying, Heller said the pleasant has outweighed the weirdness.

When she first started at American, Heller flew the New York to Los Angeles trips because her "base" was New York. Barely 21 at the time, she lived with four other flight attendants in a small Manhattan apartment where she could see the New Year's ball drop in Times Square out of a window.

Over the years, there have been some brushes with the stars: During a frantic warm-cookies-and-milk service on a flight to LA, a fellow flight attendant barked to a passerby to help finish the service before they landed. Actor Denzel Washington apparently didn't blink an eye and started handing over plates with fresh cookies to passengers.

Post-Sept. 11, flight attendants have to balance friendliness with vigilance. Heller had an incident where passengers alerted her to some men in the back of the plane acting suspiciously; they were taken off the plane but weren't deemed dangerous. "They were wrapped in a lot of clothes and we didn't know where they were coming from, but it turned out just fine," she said.

She's felt threatened on a plane only once, early in her career, when a passenger in the aisle wouldn't get out of her way and gave her a strange vibe.

A few of Heller's passengers have had on-board seizures, but she's never had to help use the on-board defibrillator for someone having a heart attack. Beyond a blown engine in her first training flight, Heller has never had an emergency landing.

Planes are a big part of the Hellers' lives; her husband is a former American flight attendant, and they met at work and even flew together.

She and her husband currently live near Meacham Field, with daughters Kate, 4, and Abby, 2.

"I think their first words were plane," she says of her daughters.

Heller may return to international flying as she gains more seniority. With Kate and Abby getting a bit older, it will be easier for her to take longer international trips, which will boost her income.

For Heller, coming home is the best part of her travels.
"When I walk off a plane at the end of a trip, I don't take any of my work home with me," she said. "And that is wonderful."

US Airways Draws 14,000 Applicants for 420 Flight-Attendant Jobs



By Mary Schlangenstein - Dec 17, 2010 2:09 PM MT


The influx follows a similar experience in October at Delta Air Lines Inc., which received 100,000 submissions for 1,000 such jobs. Both carriers offered furloughed employees the chance to return to their jobs before hiring new workers.

The hiring at US Airways and Delta contrasts with total employment by U.S. passenger airlines, which has fallen for 28 straight months on a year-over-year basis through October, according to the U.S. Bureau of Transportation Statistics.


“We’re obviously thrilled, not just with the volume but also the quality and passion and enthusiasm these applicants have for these jobs,” Jim Olson, a spokesman for Tempe, Arizona-based US Airways, said today in an interview. “The response also shows that being a flight attendant is a highly desirable position.”




US Airways is adding attendants and pilots next year to cover expected retirements and attrition, the integration of larger planes into its fleet and more international flying.

 
Among the US Airways job candidates, 2,535 were flight attendants at other carriers, the airline said in an employee newsletter. The carrier is still sorting through applications, Olson said. All of the new employees will be on the job by the middle of next year.

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

US Airways' Merger Hopes Shape Contract Talks



By Ted Reed 12/17/10 - 02:14 PM EST

TEMPE, Ariz. (TheStreet) -- Finally, in the fourth year of contract talks between US Airways(LCC_) and its flight attendants, the two sides have started to talk about the most critical issue: compensation.



Mike Flores, president of the US Airways chapter of the Association of Flight Attendants, said he is displeased with the company's first pay proposal, delivered Tuesday, which offers the majority of members little more pay improvement than increases negotiated during the carrier's 2005 bankruptcy. The company has, however, offered an increase in paid vacation time as well as a salary increase.


The compensation negotiations are complicated both by management's belief that a merger with a Big Three airline is likely in the next several years, and by the separate contracts still in place for the two flight attendant groups following the 2005 merger between US Airways and America West.


Throughout 2010, US Airways executives have said that during the next several years, the carrier could well enter merger talks with American(AMR_), Delta(DAL_) or United(UAL_).


"Looking out over four or five years and recognizing that a merger is a possibility, we want to make sure we have the company in an advantageous position," said Steve Johnson, US Airways' executive vice president, in an interview. "There are very significant benefits for shareholders and employees in a merger, so we don't want to make mergers complicated or unattractive."


Johnson noted that while US Airways would be perfectly content to continue to operate as a stand-alone carrier, it also wants to be prepared should a merger present itself. It therefore is seeking to reduce merger protections currently included in flight attendant and pilot contracts. Those restrictions, which offer wage snap-backs to high, pre-bankruptcy levels, "would add significant costs to a merger [and therefore] would prevent or inhibit discussions," Johnson said. "We're interested in doing everything we can to be in a position to negotiate a merger should the opportunity arise."


A corollary to the expectation of a merger is that without one, US Airways operates at a 10% unit revenue disadvantage to the Big Three because it lacks a powerful hub like Atlanta, Chicago or Newark, CEO Doug Parker has said. Until a merger occurs, the carrier must maintain a labor cost advantage around 10% so that it can compete, Johnson reiterated.


Flores said US Airways flight attendants do the same work as flight attendants at the Big Three and should receive the same pay. "We paid for the merger we have," he said, referring to contract concessions that enabled the carrier to emerge from bankruptcy. "Why should we pay for another one now?"


The company's first contract proposal offers already-promised increases: 1% in January 2011 and 3%, slated for January 2012, although Johnson said the company would move up the 3% increase by a full year.


The approximately 4,000 flight attendants from pre-merger US Airways, known as "the east," have different perspectives than the approximately 2,000 flight attendants from the former America West. Flores said west flight attendant raises would range between 13% at the top of the scale and 43% at the middle. "All the airline wants to do is to give the west pay parity," he said. "Not a single east flight attendant would vote for this."


But Johnson said moving up the scheduled increase would boost the payout to east flight attendants by "a significant seven figure amount" in the first year. He also said that increasing east vacation time to the level in the America West contract would cost the airline more than $10 million annually and would give 8 to 14 more paid vacation days annually to east flight attendants with eight or more years of experience. "It is effectively a big pay increase for east flight attendants," he said.


Flores said the proposal is unacceptable and the US Airways chapter will formally request to re-open its contract negotiations on Jan. 2, a move permitted under the current contract, which becomes amendable on Jan. 2, 2012, but has an early-open provision. Unlike the current negotiations, which are aimed at securing a joint contract, formal Section Six negotiations would be conducted under the Railway Labor Act process that enables mediation and potentially a job action if the talks fail.


Typically, the process takes years, but Flores said less time would be required because agreements exist on 25 of 33 contract sections.


Flight attendant negotiations have consumed about two weeks a month for the past 40 months. Johnson said the carrier wants a conclusion soon, after which it would step up talks with pilots. "We think an agreement with the flight attendants will be the inspiration to getting an agreement with the pilots," he said.


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

US Airways Draws 14,000 Applicants for 420 Flight-Attendant Jobs



By Mary Schlangenstein - Dec 17, 2010 2:09 PM MT inShare1More


US Airways Group Inc., the smallest of the full-fare U.S. carriers, received 14,000 applications for 420 flight attendant positions.


The influx follows a similar experience in October at Delta Air Lines Inc., which received 100,000 submissions for 1,000 such jobs. Both carriers offered furloughed employees the chance to return to their jobs before hiring new workers.


The hiring at US Airways and Delta contrasts with total employment by U.S. passenger airlines, which has fallen for 28 straight months on a year-over-year basis through October, according to the U.S. Bureau of Transportation Statistics.


“We’re obviously thrilled, not just with the volume but also the quality and passion and enthusiasm these applicants have for these jobs,” Jim Olson, a spokesman for Tempe, Arizona-based US Airways, said today in an interview. “The response also shows that being a flight attendant is a highly desirable position.”

US Airways is adding attendants and pilots next year to cover expected retirements and attrition, the integration of larger planes into its fleet and more international flying.
Among the US Airways job candidates, 2,535 were flight attendants at other carriers, the airline said in an employee newsletter. The carrier is still sorting through applications, Olson said. All of the new employees will be on the job by the middle of next year.

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

Airline Mergers Spur Rise in Paint Jobs



Industry's Willingness to Spend on Nonessential Items Like Marketing and Appearance Is a Sign Sector Is Coming Back


By SUSAN CAREY


VICTORVILLE, Calif.—As a motorized tug nudged a United Airlines 777 out of an airport hangar here one recent day, Sergio Garcia and his colleagues beamed.

The merger of United Airlines and Continental means all the planes in their combined fleet need a paint job.
The massive jet had gone into the hangar 11 days before wearing United's battleship gray. It emerged in the white, blue and gold of United's recent merger partner, Continental Airlines.

"It's nice to see the final paint job," said Mr. Garcia, 30 years old, who has been painting planes since 1997. "We know how much work it takes to paint an aircraft."


Mr. Garcia works for Leading Edge Aviation Services Inc. The company has never been busier, thanks to a slew of repainting contracts from airlines refreshing their colors and two big mergers, which have brought a surge of work.
The fact that the industry is opening its purse strings for nonessential items related to marketing and appearance is a sign it is finally recovering its financial health. Leading Edge repainted about 500 jetliners in 2009, and it has done about 450 already this year, says Mike Manclark, the founder, owner and chief executive.

When Delta Air Lines Inc. bought Northwest Airlines in 2008, Delta wanted the combined fleet to sport the Delta livery as soon as possible. Although Delta has its own paint shops, the carrier preferred to expedite the project for branding purposes, says a Delta spokeswoman.


So Mr. Manclark's company, which operates 24 hours a day, seven days a week, converted 400 Northwest planes to the Delta costume in just 14 months. In all, Leading Edge has painted  477 Northwest planes and 112 Delta aircraft into Delta's new livery in the past two years, Delta says.


Normally that would have taken years because airlines cycle their planes out of service and into paint shops at a much more leisurely pace. "In the old days, paint was an afterthought," Mr. Manclark says. "Nowadays, it's your calling card."


"Painting is really an art," he says, adding that "in painting commercial airliners, there is no cheating" because the paint must survive pressurization and depressurization, bitter cold at 35,000 feet, searing ground temperatures, as well as lightning and the elements.
A plane's manufacturer applies the initial coat of paint as part of the sale. But when airlines change liveries or refresh paint, which they generally do every five to six years, they frequently turn to outsiders.


Leading Edge is one of several paint shops enjoying the industry updraft. For instance, Dean Baldwin Painting LP just won a contract to paint for JetBlue Airways Corp. Maintenance providers also offer painting around the world, and some carriers, such as Delta and Malaysia Airlines, provide the service. Saltillo Jet Center near Monterrey, Mexico, opened in 2006.

A 777 paint job can cost $100,000 to $200,000, depending on the number of colors involved, and a smaller A320 can cost $50,000 or more. And resurfacing a slightly larger model, a 747, can take nearly two weeks and 180 gallons of paint.

First, technicians use special aluminized paper and tape to protect titanium and composite parts, the windows and engine intakes. Then they use chemicals to strip existing paint, wash the plane, sand composite areas and apply a precoat. Next comes primer, the base color and, after more masking and stenciling, accent colors, speed stripes and logo, and sometimes a clear coat.


Painters wear lint-free suits, hoods and full-face respirators, and they work on 60-foot-high cherry pickers to repaint the largest models. Guided by blueprints, they spray on paint—no brushes or rollers allowed—in ventilated, temperature-controlled hangars. The paint adheres easily because paint pots, painters and the plane itself are grounded negative while the paint guns are positively charged, creating an electrical attraction.


In 20 years in business, Leading Edge, Santa Ana., Calif., has painted more than 5,000 planes. Its clients have included UPS Airlines, Southwest Airlines, regional airlines, the U.S. military, and assorted planes from overseas carriers including Air Canada, Air India and Air France.

Now that United and Continental have merged, Mr. Manclark's painters are working flat out to repaint the United planes in Continental's colors with United's name on the fuselage. The first United plane to get the makeover, a 777, came out of Leading Edge's Amarillo, Texas, hangar in November.


United Continental Holdings Inc. awarded Leading Edge the contract to redo most of the big jets in the combined fleet. The goal is to have all Continental planes renamed by the end of 2011 and to have all United planes get the treatment by the end of 2012, a spokesman said. That is about 16 United and as many as 30 Continental planes a month. The airline declined to say how much it will cost.


Mr. Manclark expects next year to be his busiest ever and plans to hire more workers to augment the 1,000 he already employs. "We were pretty busy before," he says. "Now, with the mergers, we've turned the turbo on."

The company got its start washing corporate jets and now operates paint hangars in three U.S. cities, works on behalf of outside maintenance providers in four other locations, and sends "away teams" elsewhere. It had revenue of about $42 million in 2009 and expects to top $50 million this year.


In Victorville, 80 miles northeast of Los Angeles, Leading Edge leases space at a former Air Force base outfitted with four paint hangars. The 15,000-foot military runway can accommodate the biggest commercial planes when they come in for touchups.
Last week, Leading Edge's hangars here housed a Horizon Air regional turboprop being painted with Washington State University's red cougar logo, joining others Horizon has decked out in the regalia of Pacific Northwest schools as part of a marketing campaign. Another hangar had a Mesa Airlines regional jet getting a fresh coat. Once the United wide-body exited, a Delta 767 rolled in.


Mr. Garcia, one of the veteran painters at Victorville, estimates he has applied at least 30 different liveries in his career. A favorite was a purple-and-orange Phoenix Suns-themed 757 for America West Airlines. "That was cool," he recalls. "The colors, the graphics, the sun on the tail, the basketball."

Does he ever leave his signature on a completed airplane? "No way," interjects his boss, Pete Robertson, Victorville's general manager. "If it's not on the blueprint, it better not be on the airplane."

Write to Susan Carey at susan.carey@wsj.com

What Is the Ugliest Airport in the U.S.?



By Ted Reed 12/16/10 - 07:00 AM EST 6 CommentsAdd Comment


CHARLOTTE, N.C. (TheStreet) -- TheStreet readers showed a lot of interest in our story on the four most beautiful U.S. airports/terminals.



It's no wonder why. Airline travel can can involve lots of unpleasant moments, and one way that airlines and airports can enhance the experience is by making terminals pleasant places to be.


Now we want to move onto the next step, which, of course, is a story about the four ugliest U.S. airports (or terminals). We're looking for nominations for spaces that seem cramped, dark or filled with windows that offer crummy views, as opposed to airports where delays are common or where the weather is bad.


We have a few in mind. For instance, the Delta(DAL_) terminal at JFK has long needed help. Delta knows work is needed so it can compete with the new American(AMR_) and JetBlue(JBLU_) terminals: it has committed $1.2 billion to the effort.


We also hear frequent complaints about Philadelphia International Airport, the principal international gateway for USAirways(LCC_).

What is the ugliest airport in the U.S.? You decide...these are the first choices

Lambert-St. Louis International Airport

Los Angeles International Airport
Miami International Airport

New York's Kennedy (old terminals)

New York's La Guardia

Philidelphia International

Boeing Puts the Screws to Customers



By Rich Smith
December 15, 2010


Did I say Boeing (NYSE: BA) was at risk of sacrificing profit margin in its race to land customers? Please excuse the typo. What I meant to say is that Boeing is putting the screws to its customers, raising prices, and plumping out its profits.

Or so it seems this week.


Yesterday, Boeing made the surprising announcement that it's raising the prices it charges on its planes -- yes, tossing its challenge into the teeth of a global recession. In its first price increase in two years, the company's jacking up prices on its planes an average of 5.2% -- twice the hike of its last, circa-2008 price increase.


What's it mean to investors?


Now, before you get too excited, and start adding 5% to your annual profit projections for the company, there are a few caveats to consider. For one ... you have to wonder who's going to be ordering new planes at these higher prices. Sure, Ryanair (Nasdaq: RYAAY) is still waiting in the wings with a potential 200-plane order. But at this point, it's more the exception than the rule.

Excited by the prospects of owning Boeing's new line of 737s, and its wholly new 787 Dreamliner, airlines including AMR (NYSE: AMR), Delta (NYSE: DAL), and United Continental (NYSE: UAL) placed orders for hundreds of planes at fixed prices -- usually scoring steep discounts from Boeing. Boeing's and Airbus' combined backlog of planes to be built now stretches out seven years in the future, and none of these planes is going to sell for the new-and-improved pricing.

It's also worth noting that Boeing's price rise is to a large extent an exercise in "damage mitigation." Delays in delivering the 787 to its long-suffering customers has Boeing facing the prospect of millions -- perhaps hundreds of millions -- of dollars in contractual "penalty payments" for late execution on its contracts. Rather than adding to Boeing's net, therefore, any higher prices the company charges on planes newly sold may be earmarked for simply replacing revenues lost to the lawyers, with their niggling obsession over details like the "promised date of delivery." And speaking of niggling, there's also the fact to consider that Boeing almost never gets its actual asking price for its planes. Discounts for big buyers are simply the order of the day.


Still, raise a price 5% -- and that does give you an extra bit of wiggle room when negotiating to get a customer to sign on the dotted line. Even if this week's news isn't quite as good as it sounds, it's still a far cry from bad.

See A Boeing 737-700 Built With Time Lapse Photography

Boeing 737-700 Built In 2:30 Time Lapse   Click on this link and enjoy!

Boeing Raises Prices On Jets By An Average Of 5.2%



December 15, 2010


CHICAGO (AP) — Boeing Co. said it is raising prices on its jets by an average of 5.2 percent, and that it is no longer offering a shorter-range version of its new 787 jet.


Boeing had said in January that it was reevaluating plans for the shorter-range 787-3 after the only customer for that variant switched its order to other Boeing jets.


The price increases include a 5 percent increase for its popular 787-8, bringing it to $185.2 million. Customers have ordered 847 of the new 787s, even though none have been delivered yet.


Boeing customers usually get discounts from the list prices posted on its website, but they're still a barometer of the direction of its pricing. Its last price increase was in 2008.
Both Chicago-based Boeing and competitor Airbus of Europe are increasing production of their most popular jets. For Airbus, that's the A320, which it aims to produce at a rate of 40 per month by 2012. Boeing is raising production of its 737 to 38 planes per month by mid-2013. Boeing is also speeding up production of its 777.


Boeing shares rose $1.06 to $64.85 in midday trading Tuesday.

American Airlines makes final exit from Kansas City International Airport overhaul base



Kansas City Business Journal - by Krista Klaus


Date: Wednesday, December 15, 2010, 12:16pm 


American Airlines has completed its takeoff from the overhaul base at Kansas City International Airport.
In early December, the airline vacated the base’s dome-like “wide-body” hangars, the last of its occupied space. At its peak, American Airlines occupied more than 1.7 million square feet at the former Trans World Airlines maintenance facility. Several years ago, the base employed 1,000 workers; in the months before work ended there, it employed 450.

TWA operated the maintenance base from 1954 to 2001, when American Airlines purchased TWA and located its maintenance operations there.


Since October 2009, when American announced plans to vacate the overhaul base, the space has been divided for use by multiple tenants, including Frontier Airlines, Jet Midwest and Smith Electric Vehicles U.S. Corp.


The overhaul space reconfiguration is part of an economic development approach at KCI (Code: MCI) that blends aeronautical and non-aeronautical tenants and development. The effort includes the 800-acre KCI Intermodal BusinessCentre, a mixed-use development managed by Dallas-based Trammell Crow Co.


“Several years ago, the Aviation Department embarked on an ambitious plan to spur aviation- and non aviation-related development at KCI Airport to attract greater numbers of well-paying jobs to the area,” Mark VanLoh, director of the department, said in a statement. “As the KCI Overhaul Base is being reverted back to the city, we are committed to putting that space and Kansas Citians back to work.”


The base concluded aircraft maintenance work in late September, the last day of work for most employees. Some had stayed to prepare the facility to be turned over to the city.

About 200 of the 450 workers were expected to retire; others went to other locations for work or were laid off.
Airport officials estimate KCI contributes $5.5 billion to the area economy annually and provides more than 60,000 jobs.

American Leads Airline Price Boost, FareCompare Says



By Juliann Neher and Mary Schlangenstein - Dec 15, 2010 2:22 PM 

American Airlines raised domestic fares as much as $10 round trip, sparking an industrywide increase in ticket prices, according to travel website FareCompare.com.


Pushing up base prices has been difficult because low-cost carriers don’t always go along, Rick Seaney, chief executive officer of Dallas-based FareCompare, said today in a telephone interview. Carriers “can’t afford to be a buck more” than competitors, he said.


The Dec. 13 move by Fort Worth, Texas-based American was matched by U.S. carriers including Continental Airlines, Delta Air Lines Inc., United Airlines, US Airways Group Inc. and Southwest Airlines Co., the largest discounter, FareCompare said. The industrywide participation may make this rate hike one of the few successful ones this year, Seaney said.
“I’ve never seen an airfare hike that Southwest joined that didn’t stick,” he said. “It’s the bellwether.”
The struggle to raise domestic prices across the board has led U.S. carriers to charge higher fees for high-demand periods and sell fewer lower-cost seats, while keeping planes at their fullest since World War II.
American parent AMR Corp. declined 17 cents, or 2.2 percent, to $7.56 at 4 p.m. in New York Stock Exchange composite trading. The Bloomberg U.S. Airlines Index fell 2.3 percent.


To contact the reporters on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net; Juliann Neher in Washington at jneher1@bloomberg.net






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

Delta Continues Expansion of First Class on Domestic Flights

(ed. Most Other Airlines, Including American Did This Years Ago)

Airline increases First Class seating by 13 percent, creating up to one million new upgrade opportunities annually for SkyMiles members
Press Release Source: Delta Air Lines On Thursday December 16, 2010, 9:00 am


ATLANTA, Dec. 16, 2010 /PRNewswire/ -- Delta Air Lines (NYSE:DAL - News) is expanding the First Class cabin on more than 60 percent of its mainline domestic fleet – approximately 350 aircraft – as it responds to business customers' requests for more premium cabin seating.


By summer 2013, Delta will add more than 1,200 First Class seats to its domestic MD-88, MD-90, Boeing 757-200 and Boeing 767-300 aircraft as it retrofits and upgrades the aircraft interiors. The initiative, which follows the addition of First Class cabins to all Delta Connection regional jets with more than 60 seats, does not impact Delta's previously announced capacity guidance.


"Delta already offers more First Class seats than any other U.S. airline. This investment in our fleet bolsters our position as the industry leader in First Class seating, and is a significant advantage for our business customers," said Glen Hauenstein, Delta's executive vice president – Network Planning, Revenue Management and Marketing. "It is part of a much larger investment – more than $2 billion – that we're making in our fleet, airports and product through 2013 to position Delta as a leader in customer service."


Including the installation of First Class seats on larger Delta Connection aircraft completed earlier this year, Delta by summer 2013 will have nearly 2,000 more First Class seats on its domestic fleet – a 13 percent increase in premium seating. For SkyMiles members, the expansion means one million more opportunities to upgrade to First class every year.


SkyMiles members enjoy unlimited complimentary domestic upgrades – an industry leading benefit.
Delta already offers more First Class seating than any other U.S. airline, with 11 percent of the carrier's domestic seats in First or Business class on its two-class aircraft. Delta also is the only U.S. carrier to offer a First Class cabin on every domestic flight longer than 750 miles, or approximately 2.5 hours.

Delta's First Class investments are the latest in the airline's previously announced plan to invest more than $2 billion in enhanced global products, services and airport facilities through 2013. In addition to upgrading its domestic fleet, Delta will offer full flat-bed seats on more than 100 widebody aircraft, feature personal, in-seat entertainment for both BusinessElite and Economy class customers on all widebody flights, and complete new terminal facilities for international customers at its two largest global gateways – Atlanta and New York-JFK.


The upgrades come as Delta focuses its network on the leading markets for business travelers, providing customers worldwide with convenient service to top destinations for business across the globe.

Lufthansa Will Fly A380 to Kennedy, Not Newark



By Ted Reed 12/13/10 - 03:08 PM EST Add
NEW YORK (TheStreet) -- Lufthansa said it will fly the Airbus A380, the world's largest passenger aircraft, to New York starting in February.


The largest European Airline will fly the 526-seat aircraft to New York's Kennedy Airport, rather than to Newark, where it could offer dozens more connections, because Newark is unable to accommodate the A380.


At Kennedy, A380 passengers will be able to connect to transcontinental flights on United(UAL_) and to 22 destinations on JetBlue(JBLU_), also a partner.


"Newark is not ready for the A380, but we believe the JFK-Frankfurt route has the potential to fill the plane," said Lufthansa spokesman Martin Riecken. Revenue from the A380 flight will be available to partners including United under the carriers' anti-trust immunity agreement.


Aviation consultant Robert Mann said it would be nice if the A-380 could fly to Newark, but Lufthansa "has a lot of feed at Frankfurt and a huge local market in New York, so this is probably the best strategy."


Mann said the Port Authority of New York-New Jersey spent the money to upgrade JFK for the 380, but money is tight and Newark is a tightly constrained airport. "You can't upgrade everything," he said. "Kennedy was more feasible."


Lufthansa's fifth 380 will fly Frankfurt-JFK starting Feb. 8. 2011. Initially the flight will operate twice a week, on Mondays and Fridays, departing Frankfurt at 11:05 a.m., arriving JFK at 1:35 p.m. The return flight will leave JFK at 4:10 p.m. and arrive in Frankfurt at 5:50 a.m.


By mid-April, service will be daily, Lufthansa said. The carrier also uses the A380 on flights to Tokyo, Beijing and Johannesburg. "New York is one of the most important markets for Lufthansa, so it was imperative for us to launch transatlantic flights on our flagship aircraft to this U.S. gateway," said Jens Bischof, vice president for the Americas, in a prepared statement.


The A380 is becoming increasingly common at U.S. airports. Air France has flown the aircraft to JFK from Paris since Nov. 20 and will begin daily service to Washington Dulles from Paris in June 2011. Emirates has flown to Kennedy from Dubai since Oct. 31. Qantas had flown to Los Angeles from Sydney, but discontinued those flights after its A380 engines experienced problems. It is unclear when the flights will resume.


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


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

Veteran Flight Attendant Leader Steps Down



By Ted Reed 12/08/10 - 01:24 PM EST 16 CommentsAdd Comment


WASHINGTON (TheStreet) -- During a 44-year airline industry career, Pat Friend became a leader in a world shaped by two key societal trends: the emergence of women and the diminution of the labor movement.


UAL Friend, 64, will step down at the end of this month as president of the Association of Flight Attendants, the largest flight attendants' union with about 50,000 members, 84% of them women. President since 1995, Friend has served four four-year terms; she is also one of eight women on the 47-member AFL-CIO Executive Council. She has tirelessly fought regulatory and legislative battles, often to alter policies that affirm workplace gender inequalities, and she was often victorious.

At the same time, although it provided Friend with a platform to enable change, the labor movement lost influence during her career. Her biggest disappointment, in fact, came last month, when an effort to unionize Delta(DAL_) was defeated in a narrow vote.


"It's not for me that I am disappointed," Friend said. "It's really for the Northwest flight attendants, and the destruction of their 63 years of collective bargaining, and for the core group at Delta, who have been fighting for this since 1996. "


Friend reminded that the union is appealing the result, but said the potential loss at Delta "is not the way I thought [my career] would end."


Nevertheless, since Friend came to the union's Washington headquarters, "we have been successful legislatively," she said. "We were able to raise the profile not just of our union but of the entire flight attendant profession. Of the things that will still be here after I am gone, one is the recognition that we can take a lot of things off our bargaining table through legislation."


One big achievement involves the Federal Medical Leave Act, which protects workers' jobs by requiring large employers to offer unpaid leaves for reasons such as illness or care of a newborn. When the law passed in 1993, it defined the number of hours required to qualify, leaving out flight attendants whose hours are calculated in a way that makes them appear to be minimal.


"We were forced to negotiate with each employer the number of hours to qualify a flight attendant to use the law," Friend said. "Finally, this year, we got legislation passed that defined a full-time flight attendant in the law." Friend worked first with New York Senator Hillary Clinton, then with Sen. Patty Murray, D-Washington.

Q&A: American's former CEO Carty is having fun building his own airline at Virgin America



10:14 PM CST on Sunday, December 5, 2010
By TERRY MAXON / The Dallas Morning News
tmaxon@dallasnews.com


Former American Airlines Inc. chairman and chief executive Donald J. Carty was among the many people waiting when the first Virgin America Inc. airplane rolled up Wednesday at Dallas/Fort Worth International Airport.


Donald J. Carty Carty, however, was not scouting the enemy, but welcoming his own.


Carty, who left American and parent AMR Corp . in 2003, is chairman of Virgin America, a low-fare, high-frills carrier that began flying in August 2007. He's also chairman of Toronto-based Porter Airlines Inc. and a board member of Hawaiian Holdings Inc., parent of Hawaiian Airlines Inc.


At American, Carty ran an air carrier that existed long before he arrived, an organization well set in its ways. At Virgin America and Porter, he has been on the ground floor of their creation. At Hawaiian, he has participated in the reinvention of a carrier that remade itself in bankruptcy court.


In an interview at the Virgin America ceremonies, Carty reflected on his new life and how airlines have changed. Here are some of his comments, edited for length.


Why can't the older carriers like American, United Airlines Inc. and Delta Air Lines Inc. embrace the Virgin America practice of providing a lot of frills for all passengers?


It's hard for legacy carriers today. ... Since deregulation, they've been in such a battle to get their costs down so they could be more competitive in the marketplace that they've kind of lost track of the customer a little bit.


For years after deregulation, their primary competition was people who entered the market with very low costs and a very low-service model. As they competed toward those prices, they pulled a lot of their services out of their product as well.


What that's created is an opportunity for people to enter the market with a low-cost but high-service model. The first great example of that was JetBlue [Airways Corp.]. What we're trying to do at Virgin America is have a JetBlue on steroids – more of the same.


It must be great fun for you to help create an airline from nothing, as opposed to dealing with an airline that was already established.
It absolutely is. What you have in a legacy carrier is a lot of legacy. You've got a lot of history – a lot of history in process, procedure, employees' ways of thinking about things, which by the way, they were trained to think that way by their managers. There's a lot of good historical reason. This isn't to point a stick at anybody.


This is an opportunity to start over with a fresh piece of paper and say what is it that really needs to be happening in the airline business to appeal to customers.


How is Hawaiian Airlines like Virgin America?

Hawaiian is like a new airline because they went through, like many of the legacy carriers did, the travails of bankruptcy and all the challenges that come with that. But they're a small enough carrier, and they've always been a very family-oriented kind of company


So to rebuild the Hawaiian culture was quite a bit different than what happens at far bigger, far more complex, far more geographically dispersed carriers.
Tell us about your other carrier.


I'm a chairman of an airline in Toronto called Porter Airlines that is offering service out of downtown Toronto to a number of airports all within two hours of Toronto, and it's doing very well. Very similar service model – a complete focus on customer and product delivery.

With Virgin America, Porter and Hawaiian, you've done the domestic United States, you've done Canada, you've done U.S.-Hawaii. When are you going to start an airline in Latin America or Europe?


I don't know. I'm kind of running out of airline time. I've done a lot of airlines over my time, and I've been involved with Canadian Airlines, TWA, Porter – I've probably been chairman of more airlines than anyone in the history of aviation

Pushing 40, Southwest Is Still Playing the Rebel

Matt Nager for The New York Times


Southwest has kept maintenance costs low by using only Boeing 737s. But it is about to absorb AirTran’s 717s.


IT’S halftime at Southwest Airlines’ annual Halloween party — a ritual meant to celebrate the carrier’s exuberant employees and freewheeling culture — and Gary Kelly is feeling a bit wistful.


“I was determined to be a man this year,” he says.


Gone is the flamboyance of his previous costumes. He has attended as Edna Turnblad from the musical “Hairspray” (for which he had to shave his legs, don a wig and wear a pink dress) and as Dorothy from the “The Wizard of Oz.” In one particularly memorable impersonation, he was Gene Simmons of the hard-rock band Kiss.


This year, Mr. Kelly, who also happens to be Southwest’s chairman and chief executive, is dressed as Woody, the friendly pull-string doll from “Toy Story.”


“As long as you don’t mind being ridiculed all day,” he says of his Halloween outfits, “it’s part of the routine.”


Nearby, Mike Van de Ven, the chief operating officer, is rolling on the floor, posing for pictures, and greeting children and parents with a wide grin in his Buzz Lightyear costume. “This shows you how little we have to do to run the airline,” says Mr. Van de Ven. “The less we do, the better it runs.”


Southwest doesn’t quite fly on auto-pilot, but as it prepares for its 40th birthday next year, it is flush with success. Last year, it flew 86 million passengers, more than any other airline within the United States. It operates 3,200 flights a day, owns a fleet of 544 planes and serves 69 domestic cities from Seattle to Fort Lauderdale, Fla., and from Lubbock, Tex., to Buffalo.


When rival airlines were bleeding billions of dollars, Southwest was churning out consistent profits as a low-cost carrier — even when fuel prices soared.


And in September, in its boldest corporate move since it started flying outside of Texas, Southwest announced that it would buy AirTran Airways for $1.4 billion, increasing both its revenue and its capacity by nearly 25 percent in a single stroke.


Yet Southwest finds itself at a pivotal moment. Its success was built on a signature cocktail of low costs, low fares, frequent flights and a rapid expansion into new cities. But with high fuel prices, growth has been harder to find, and analysts have questioned whether the airline can sustain its singular operating style.


Battered in part by Southwest’s growth, traditional airlines have restructured their operations over the last decade — often through painful bankruptcy proceedings — and have narrowed the gap.
Through mergers and global alliances, Delta Air Lines, which acquired Northwest in 2008, and the more recently merged United Airlines and Continental are now more formidable rivals. They can offer their passengers access to cities across the United States along with connections to the four corners of the world — something Southwest cannot do.

Newer rivals, meanwhile, often modeled after Southwest, are thriving at the other end of the spectrum. Thanks to efficient operations, lower costs and an attention to customer service, these carriers — such as JetBlue Airways and Allegiant Airlines — are threatening Southwest’s dominance in the low-fare trade.
“Southwest’s business has become more complicated than the simple model that served them so well for 39 years,” says William S. Swelbar, a research engineer at the International Center for Air Transportation at M.I.T. “They are at an inflection point. They are not a young and nimble corporation anymore. This is now a mature company.”


No longer the fiery start-up, Southwest now has the best-paid pilots, mechanics and flight attendants in the industry. Its unit labor cost — how much it pays its employees to fly one seat for one mile — rose 22 percent from 2002 to 2009, while the same measure dropped 34 percent at United, 7 percent at Continental, 26 percent at Delta and 11 percent at American Airlines.


Southwest’s 5,600 pilots earned $171,000, on average, in 2009, or 20 to 40 percent more than the average salary for pilots who fly bigger planes at those other airlines. The flip side, says Carl Kuwitzky, the president of the Southwest Airlines Pilots’ Association, is that the company expects its employees to be more productive.


Since Southwest typically flies shorter routes and schedules more daily flights, pilots can fly one hour longer each day than at other airlines, he says. This efficiency becomes a crucial component to the airline’s edge.


“We work very hard for our company,” says Mr. Kuwitzky. “And we recognize that we succeed if our company is successful.”

Despite labor, Southwest still has lower overall costs than its traditional rivals. In the second quarter of 2009, Southwest’s advantage could be seen in its total costs per available seat-mile. Those costs were 6 to 14 percent lower than at US Airways and American. (JetBlue and AirTran, on the other hand, have lower costs than Southwest.)


Still, Wall Street remains skeptical. Southwest’s stock price, like those of most other airlines, has languished. It has dropped 18 percent in the last five years — a generally rough period for the industry as oil prices surged and the economy slowed.

In an investment research note, analysts at Morgan Stanley recently asked a provocative question: “Is Southwest becoming a legacy airline?”


“REMEMBER what it was like before there was somebody else up there who loved you?”

In an ad from the early 1970s, a Southwest “hostess” — that’s what they were called at the time — wearing skimpy hot pants stood in the middle of a runway while a low-flying jet whizzed by and made a simple case for the new airline: We’re affordable.



Until then, air travel was largely the province of a smaller, affluent class of American travelers and business types. Fares, regulated by the government, were high.



Then came Southwest. From its modest beginnings, linking Houston, Dallas and San Antonio, it revolutionized air travel. Since 1971, the year of Southwest’s first flight, the number of air passengers has risen fourfold.



Larded with much higher costs, incumbent airlines immediately recognized the threat posed by the scrappy new competitor, which once famously offered a fifth of Chivas Regal scotch to entice customers to pay a $26 regular fare from Dallas to Houston. (That was instead of the discounted $13 ticket that was priced to compete with Braniff International Airways, now defunct.)


“It was personal,” says Ron Ricks, a Southwest senior manager who witnessed some of the airline’s early struggles to expand into new airports. “But I realize now that it wasn’t really personal for them. It was survival.”


The airline also prospered by remaining relentlessly focused on low fares.



“Southwest had a very profound impact on the industry,” says Robert Crandall, who led American Airlines in the 1980s and ’90s. “They disproved the notion that customers preferred service to low prices. And to their credit, they have sustained that.”



In the two decades after airline deregulation in 1978, Southwest developed a “cookie cutter” method of moving into a new city, sharply cutting fares and driving up traffic, says Mr. Ricks. “We are so consistent, it’s boring,” he says.

The “Southwest effect” became a major reason that overall fares dropped in its new markets, and the phenomenon was studied in business schools and the halls of government. The Department of Transportation marveled in a 1993 report: “The principal driving force behind dramatic fundamental changes that have occurred and will occur in the U.S. airline industry over the next few years is the dramatic growth of low-cost Southwest Airlines.”



Southwest continues to have that impact when it enters a new airport. After it began service to Baltimore-Washington International in 1993, fares dropped by 70 percent and passenger traffic increased sevenfold. Traffic between Philadelphia and Providence increased by more than 800 percent, and one-way average fares fell to $44, a drop of 83 percent, in the year after Southwest entered Philadelphia in 2004.



The company started flying to Denver in January 2006. It now has 141 daily departures there, reflecting the fastest growth in its network. Frontier Airlines, based in Denver but wedged between Southwest and rising fuel costs, couldn’t keep up. It filed for bankruptcy in 2008, though it kept flying.

In Las Vegas, Southwest effectively drove out most competition from US Airways, which retreated to Phoenix. With 212 daily flights, Las Vegas is now Southwest’s top city.



Competitors see Southwest as cold-blooded and ruthless.



“Their approach is to search out weak companies and contest them out of business,” says Bryan Bedford, the chairman and chief executive of Republic Airways, which bought Frontier out of bankruptcy last year. “It’s no different than Wal-Mart plunking a big-box store near a local family-owned grocery store; you either respond to the competition, or you get out.”



Robert Jordan, Southwest’s vice president for strategy and network planning, sees things differently.



“We never like to say we kicked somebody out of the market,” he says. “Everybody makes their own choices. But we can go into a new market, charge attractive prices and, given that people love our products, gain new customers.



“At some point, it becomes very hard for others to compete because they can’t make money at the prices we charge, and we can.”


There’s also the whole Southwest road show that is a feature of nearly every trip: Some flight attendants joke with passengers, others play games and sing, or, in the case of one flight attendant made famous in a YouTube clip, break into rap songs.



On one recent flight to Las Vegas, when a flight attendant learned that a couple were going to marry, she dimmed the cabin lights and led the whole plane in a loud toast.

Despite the fun and games, Southwest continues to deliver on its basic promise, says Walt Rose of New Orleans, who travels on the airline occasionally.


”They can get comical sometimes — and that’s a major understatement — but we don’t mind it,” says Mr. Rose, on a Southwest flight from New Orleans to Midland-Odessa, Tex. “They are on time, they are reliable, and they fly where we want to go.”



AS it reaches adulthood, Southwest insists that it can hold on to its teenage ways.


“We still have an underdog mentality,” says Mr. Kelly, the C.E.O. “It’s not a comfortable country-club environment for us.”


But some analysts say the airline has been slow to adapt in recent years, by failing to update its reservation software, for instance, or not scheduling flights to some leisure destinations favored by Americans, such as Cancún, in Mexico, or the Caribbean Islands. That has allowed others, particularly JetBlue, to build a lucrative franchise in the Caribbean.

 “They were too paralyzed in their in-the-box thinking about their airline,” says Mo Garfinkle, an airline consultant. “Maybe they got a little too comfortable in their niche. They didn’t appreciate that the world around them had changed.”



While shunning radical change, Mr. Kelly rejects the notion that Southwest has been standing still.



He points out that in the last year, the company has been in talks with its pilots to expand the fleet with Boeing 737-800s. These new planes offer 40 more seats than the airline’s current 737s and will allow Southwest to fly longer distances. The move is significant because it helps pave the way for the airline to fly to Hawaii, and, for the first time, to destinations outside the United States.


But getting overseas requires a tremendous amount of work for Southwest. Pilots need to endorse the move because it would mean a change to their contract. (Flight attendants agreed to the change last week.) Southwest also needs to update its software so it can, among other things, sell international tickets and provide passport information to federal authorities — something that its antiquated system cannot do.



While Southwest has ridden out spiking oil prices, it’s still an expense that could hamper growth, especially as oil prices rise above $80 a barrel again.



Initially, the company negotiated the spike better than most. It bought complicated financial hedges intended to mitigate the impact of high fuel prices, and gained a precious advantage over its competitors as oil prices soared.

But the bet backfired in the fall of 2008, when the economy slowed and oil prices collapsed. The company lost $120 million, its first quarterly loss in more than 17 years. (It still turned a profit, however, for the full year.)



Given its low operating costs — and an engrained philosophy not to furlough or lay off employees or cut salaries — Southwest found that it could not cost-cut its way out of the crisis.

Instead, it needed to bolster revenue while keeping its capacity flat. So the company followed a wider industry trend, by aiming to attract more business travelers with more perks and by getting passengers to pay for new services, such as priority boarding.


But here, too, Southwest sensed an opportunity to showcase its difference. While baggage fees generated roughly $1.7 billion for the industry in the first half of the year, Southwest drew the line. It made its “Bags Fly Free” policy a centerpiece of its advertising and marketing campaign.



“A lot of people have been trying to pickpocket and nickel-and-dime their customers,” says Kevin Krone, the company’s head of marketing. “We don’t think it’s right.”



The policy turned out to be a good business move.



Southwest’s revenue rose by $1.6 billion in the first nine months of 2010, compared with that period in 2007, even as its capacity declined by 1 percent. Part of that growth in sales, Southwest believes, came from new customers fleeing bag fees. Mr. Kelly calls his rivals’ approach “a gift.”



The policy yielded another advantage. It allowed Southwest to subtly shift the focus away from its fares. Although it still offers low fares to many destinations, Southwest doesn’t always have the lowest fares every day on every flight, says Bob McAdoo, an airline analyst at Avondale Partners.


“Southwest can offer pretty good prices on their Web site, but if you buy in the traditional business markets, 6 to 10 days in advance, it is not inexpensive,” according to Mr. McAdoo, who says he recently saved $350 to fly from Kansas City to Portland, Ore., by taking Continental instead of Southwest.

To attract more business travelers, Southwest also ironed out its chaotic boarding process, which had often been derided as a “cattle call.”


While it still does not assign seats, Southwest set up new boarding groups, giving priority to people who have checked in online. This allowed it to start charging to be in the earliest group to board.


SOUTHWEST’S biggest challenge will be in merging with AirTran, which Mr. Kelly described as “the single best idea we have for the next years.”


The acquisition fits into the company’s drive to attract more business travelers. It opens the door to Atlanta, the world’s busiest airport, provides expertise on international flights and expands its foothold in New York and Washington. It also brings the carrier into more direct competition with big players like United and Continental, as well as American and Delta.



But as Southwest enters more congested airports, especially in the Northeast corridor, analysts say it may suffer the same kinds of delays and performance shortfalls that plague its rivals. Today, about a third of all Southwest’s passengers connect somewhere along its network. That is well below the 50 or 60 percent connection rates at the more traditional hub-and-spoke airlines, but analysts point out that Southwest’s figure is growing.



Earlier this month, the Justice Department requested more information about the merger, which would cement Southwest’s lead as the top domestic carrier. Southwest still expects the deal to close in the first half of next year.



“Southwest got two big pluses from AirTran — 37 more destinations and taking out the lowest-cost carrier in the business,” says Robert Herbst, an independent analyst and a former commercial pilot.



The takeover will also mean some fundamental changes to another aspect of the vaunted Southwest model. The airline currently flies a single type of airplane, the Boeing 737, which allows it to minimize maintenance costs and pilot training.



With AirTran, Southwest will inherit a fleet of 86 Boeing 717s that it will have to integrate into its operations. Mr. Kelly says those planes will provide more flexibility, allowing Southwest to serve lower-traffic cities that would be uneconomical to serve with the larger 737.

Southwest will also have to absorb AirTran’s 8,000 employees into its highly unionized work force of 35,000.


That aspect has prompted considerable worries among Southwest employees, who fear that the merger will somehow dilute the company’s specific culture. Pilots often help clean up a cabin to speed up operations. Flight attendants have been known to lend a hand on their day off.



Thom McDaniel, the president of the Transport Workers Union Local 556, which represents the company’s flight attendants, says the issue is among the most discussed among his members. “When we wear the same uniforms, we need to be part of the same company,” he says.

Mr. Kuwitzky, the pilots’ union president, says, “The Achilles’ heel of this transaction is how our company will be able to maintain our culture, and keep it alive for the next 40 years.”


Few companies — and certainly fewer airlines still — have managed to foster such feelings of loyalty from their employees.



In the 1990s, at a time of rapid growth, it set up “culture committees” that helped propagate the “Southwest way” through the company.



It still strives to preserve its ethos by keeping a close eye on its hiring. Last year, for instance, it received 90,043 résumés but hired a mere 831 people, making it harder to get a job at Southwest than to get into an Ivy League college.

“Our culture is our biggest competitive strength,” says Mr. Van de Ven, the chief operating officer. “But we want to grow it, not protect it.”



Southwest wears its history on its walls. The headquarters here in Dallas features wall-to-wall displays of about 100,000 photographs celebrating the airline’s history, follies and successes. This bond culminates at Halloween, the biggest party of the year, and one of eight corporate functions Southwest deploys to bring its employees together.


NOW it’s a question of whether Southwest’s culture will continue to liberate it or will hold it back.



“The traditions can hobble you; I absolutely concede that,” says Mr. Kelly. But he says Southwest is just as scrappy as ever.



“We’re still a maverick,” he says.