Interesting Reading Material

La Belle Caravelle  ..a little history of United's "prettiest" plane. How many of you flew it.  Send me a note. (Thanks, many told me funny stories. ) AvN

There is a lot of reading on this page. I try to save articles that are timely but you have to scroll down quite a bit to read them all.  ed. Avn

February 24, 2009

Inside this issue: Remembering United 811

By: Sharon McKarcher

The Story of United Flight 811

Aniversaries of events mark the lives of each of us. Dates carved into the soul of who we are, were, or what we have experienced. This anniversary date marks a moment of survival, of instincts, of pulling a calm from your core. Then calling upon your skills to do what is needed to save yourself and the lives of those entrusted to you.

Twenty years ago, in the early hours of February 24, 1989, United flight 811 was preparing for departure at Gate 10 in Honolulu. The eighteen year old Boeing 747-122 was bound for Auckland and continuing on to Sydney after having flown in from Los Angeles a few hours earlier.

Thirty-five year veteran, Captain Dave Cronin, just 2 months from an age 60 mandatory retirement, was going over weather details of his flight plan with 25 year veteran First Officer Greg Slater (age 48) while Second Officer Randall ’Mark’ Thomas (age 46) completes his routine visual walk around the aircraft.

Purser Laura Brentlinger and Aft Purser Sarah Shanahan, had briefed their Honolulu based crew on the in-flight details and were well into their paces. The other 13 working crew members busily got underway with their own safety checks and equipment setups.

Ricky Lam, working the forward galley “pit,” and John Horita in the aft galley pit had all four of their cart elevators alternating the transport of carts and supplies to the main deck galleys above. The shuffling sounds of the floor boards above them as passengers moved through the aisles during the boarding process faded into the mechanical noises of the elevators and the cargo bays being loaded next to them.

Sharol Preston unloaded the dumbwaiter to the upper deck a final time in order to greet her passengers and settle them in with a pre-departure beverage. Ricky Umehira and Ed Lythgoe were doing the same for their First Class passengers in the nose of the aircraft below.

This was an experienced crew both on the Flight Deck as well as in the cabin. Nearly every crew member was in their 30’s or 40’s at the time, and had flown for a number of years, save 2 f/a’s and Captain Cronin himself. Robin Nakamoto was the ‘baby’ of the crew at 26, still in her first year of flying for United.

The arming lever at 5L caused a brief 3 minute delay, but as soon as S/O Thomas saw that all cabin and cargo door warning lights were out, the aircraft proceeded with it’s departure from the gate. Though the 747 held a capacity of 400 passengers, it would leave this night with 337 in the passenger seats, 1 dead heading f/a, 15 cabin crew members and 3 on the Flight Deck.

Captain Cronin was at the controls when 811 was cleared for takeoff on the Reef Runway (8R) at 0152:49 HST. The Flight Crew observed thunderstorms both visually and on the radar so they requested and received clearance for a deviation just left of their planned course. Capt. Cronin elected to leave the seatbelt sign on due to these thunderstorms. This would later prove to be a life saving decision for many as the following unthinkable events were about to occur.

The cabin crew members are up and preparing their carts for evening service. Climbing out between 22,000 and 23,000 feet on its way to 33,000, both the Flight Deck and the cabin crew hear a loud “thump” which begins to shake the plane. Unknown to all, it is the forward cargo door releasing itself from it’s normal locked and secured position.

Black Box transcript codes are C-Captain, F-First Officer, X-undetermined, R- tower control, E- engineer.

907 -C- WHAT THE # WAS THAT?
908 -F- I DON'T KNOW.
929 -X- THE ENGIN
931 -F- OKAY AH IT LOOKS LIKE WE'VE LOST NUMBER THREE ENGINE
934 -F- AND AH WE'RE DESCENDING RAPIDLY COMING BACK
938 -R- UNITED EIGHT ELEVEN HEAVY ROGER KEEP CENTER ADVISED.
941 -C- CALL THE (A/AFT) FLIGHT ATTENDANT.
944 -X- *
946 -C- GOIN' DOWN.
947 -E- WE’VE LOST NUMBER THREE

As the gull-like open cargo door raises, it rips away 1.5 seconds later from the aircraft. It takes with it part of the adjoining fuselage above it, peeling airframe skin all the way up to the upper deck windows. This causes a tremendous explosion to occur, an explosive decompression.

The passenger seats from 8GH through12GH break away at the rivets near the aisle and carry eight passengers into the black of night. Another missing person is a man who was seated across the aisle in 9F, for a total of nine. Only a flapping seatbelt and a bent arm-rest telling point to the direction he has been taken.

At this altitude, the loss of cabin pressure causes catastrophic hurricane force winds throughout the cabin. Anything in the aircraft that isn’t tied down has become a flying object. Aircraft panels, oxygen masks, wiring, baggage, service items, even carts and bins go flying. The cabin is over taken with debris and fog.

Cold air rushes in from the outside and breathable oxygen is lost. Those that still have oxygen masks above them, reach desperately for needed air. Aft aisle F/A Curt Christiansen reports that he reaches for a nearby mask, only to gag on the stagnate nicotine drenched odor from a mask in the smoking section. There is no oxygen. The cargo door separation damaged the emergency oxygen lines throughout the aircraft.

On the flight deck, Captain Cronin and crew reach for their O2 masks only to find they are in the same situation.

1016 -C- I CAN'T GET ANY OXYGEN-
1018 -F- (DID WE AH)
1019 -X- *

1034 -F- YOU OKAY?
1035 -C- YEAH.
1036 -F- ARE YOU GETTIN' OXYGEN?
1037 -F- WE'RE NOT GETTIN' ANY OXYGEN

Thrown violently, the cabin crew members make all attempts to sit down and gather themselves.. A couple of f/a’s have been hurt by flying debris. A bloodied Ilona Benoit is helped to a seat by Purser Laura Brentlinger while Business Class passengers help an injured Mae Sapolu. She is seen clinging to a seat rung on the floor near the gaping hole.

Captain Cronin immediately descends to 15,000 feet in search for breathable O2 while trying to stabilize the aircraft. He begins procedures for an emergency 180 degree return to HNL. 7700 is dialed in on the radar beacon transponder and an emergency is declared at 0220 HST. Engine #3 has ingested the bulk of what flew out of the aircraft and has to be shut down due to vibration and no (N1) compressor indication.

1129 -F- I THINK WE BLEW A DOOR (* THINK WE BLEW A) - OR SOMETHIN'.

1159 -C- OKAY WE LOST NUMBER AH THREE.
1207 -C- LET'S AH SHUT IT DOWN
1212 -F- YEAH OKAY.
1214 -F- READY FOR NUMBER THREE.
1216 -F- SHUTDOWN CHECKLIST.

With Captain Cronin’s okay, Second Officer Thomas then leaves the cockpit and descends the spiral stairs to inspect the cabin. He returns to inform Captain Cronin that a large portion of right side of the cabin fuselage from 1R to 2R is missing. In the meantime, F/O Slater finds that indications of fire are apparent in engine #4. S/O Thomas confirms this upon his return to the Flight Deck. Fuel dumping is initiated during the descent to reduce the aircraft’s landing weight.

1732 -F- YOU GOT A FIRE OUT THERE
1734 -C- THERE'S A FIRE OUT THERE?
1735 -F- YEAH LOOKS LIKE IT'S ENGINE NUMBER FOUR
1736 -C- WHICH ONE
1737 -F- LOOKS LIKE NUMBER - NUMBER FOUR HOLD ON A SECOND -
1739 -C- YEAH WE GOT A FIRE IN NUMBER FOUR
1741 -C- GO THROUGH THE PROCEDURE SHUT DOWN THE ENGINE

Laura Brentlinger and Leonard Jenkins are relieved to see S/O Thomas descend the stairs. It means that the cockpit members are unhurt. They have control of the aircraft. As the cabin crew gains an understanding of what is happening, thoughts of Lockerbie only 2 months prior form. It must have been a bomb. S/O Thomas returns to the Flight Deck.

1753 -E- THE WHOLE RIGHT SIDE...
1759 -E- THE RIGHT SIDE IS GONE FROM ABOUT THE AH ONE RIGHT BACK IT'S JUST OPEN YOU'RE JUST LOOKIN' OUTSIDE

1759 -R- UNITED EIGHT ELEVEN HEAVY ROGER
1807 -C- WADDAYA MEAN PIECES-
1808 -E- LOOKS LIKE A BOMB
1809 -F- FUSELAGE-
1810 -E- YES FUSELAGE IT'S JUST OPEN
1812 -C- OKAY IT LOOKS LIKE WE GOT A BOMB AH THAT WENT OFF ON THE RIGHT SIDE
1815 -C- AH THE WHOLE RIGHT SIDE IS GONE
1817 -E- FROM ABOUT ONE RIGHT BACK TO AH-
1820 -F- ANYBODY-
1822 -E- SOME PEOPLE ARE PROBABLY GONE - I DON'T KNOW
1824 -C- WE GOT A REAL PROBLEM HERE

The situation on the flight deck continues to worsen. It is clear that aside from losing engine #3 to debris and #4 due to fire, there is a loss of some aircraft controls due to the cargo door shearing off into the wing. The right outboard leading edge of the flaps has sustained damage. The flaps on this side of the aircraft will not properly extend and an indication of asymmetrical flaps will further hampered them. Additional damage to the rudder controls is soon noted.

1836 -C- WE SHUT DOWN NUMBER FOUR
1838 -C- WE'RE ON TWO ENGINES.

1903 -F- WE EVIDENTLY HAD A BOMB OR SOMETHING AH A BIG SECTION OF THE RIGHT SIDE OF THE AIRCRAFT IS MISSING.
1906 -R- UNITED EIGHT ELEVEN HEAVY ROGER DO YOU HAVE THE AIRPORT IN SIGHT CLEARED FOR A VISUAL APPROACH

Keeping the aircraft from descending is impossible as two engines were never the intended to keep a 700,000 lb plane aloft. It is not a certainty that 811 will even make it back HNL. A ditching, was on the minds of all of the crew members in the aircraft. A water landing with an aircraft with a huge hole.

1939 -R- YES SIR YOU SAY YOU'RE MISSING THE RIGHT SIDE IS THAT AH THE FUSELAGE OR THE WING
1943 -C- YEAH
1944 -F- THAT'S AFFIRMATIVE THE WE'RE MISSING A SECTION OF THE RIGHT SIDE OF THE AIRPLANE
1948 -F- PART OF THE FUSELAGE IS MISSING
1950 -F- AND WE'VE GOT AH WE'VE LOST ENGINE NUMBER THREE
1952 -F- WE'VE GOT ENGINE NUMBER FOUR SHUT DOWN 'CAUSE IT APPEARED LIKE AS IF WE HAD A FIRE OUT THERE
1956 -F- WE WANT ALL MEDICAL EQUIPMENT WE CAN GET AND THE AH ALL THE EQUIPMENT WE CAN GET STANDING BY.
1955 -F- WE'D LIKE ALL THE MEDICAL EQUIPMENT WE CAN GET
2002 -R- UNITED EIGHT ELEVEN HEAVY ROGER

Nevertheless, the cabin crew members focused on preparing the cabin for an evacuation. Life vests were put on and sought out for passengers. Through the deafening wind, Laura Brentlinger attempts to convey this through the use of a megaphone. The PA/interphone system was rendered unusable. Signing and the use of body language becomes an important tool of communication.

The cabin crew tries to ensure that everyone has a life vest and clears away from the doors some of the debris that would impede an evacuation. They eye their terrified passengers, enlist possible helpers in the event they should become incapacitated, and then strap themselves in for whatever may lie ahead. It is a time of deep inner thought, mental preparation of steps to be taken, reassurances, and for some, prayer.

2004 -E- I WOULDN'T GO ANY FASTER THAN YOU HAD TO BECAUSE THAT THAT HOLE
2009 -E- I WOULDN'T GET IT OVER TWO HUNDRED AND FIFTY KNOTS - THAT'S A BIG-
2011 -F- WHAT'S THE MINIMUM MANEUVERING AH MINIMUM MANEUVERING FOR WHAT WE GOT HERE?
2015 -F- WE DON'T KNOW WHAT THE #'S GUNNA HAPPEN WHEN WE START TO...
2018 -R- UNITED EIGHT ELEVEN HEAVY SEARCH AND RESCUE HAS LAUNCHED A HELICOPTER INTERCEPT
2022 -F- AH SAY AGAIN
2024 -C- THEY LAUNCHED A HELICOPTER
2025 -R- SEARCH AND RESCUE HAS LAUNCHED A HELICOPTER TO INTERCEPT AND AID YOU IN AH RETURNING BACK TO HONOLULU

Ricky Umehira silently notes the bravery of Ed Lythgoe seated in his jumpseat at 1R. In front of Ed’s feet lies the cavern of blackness and water. The silence of the wind whistles in the background of deep thought as the wires and guts of the disabled aircraft hang from the ceiling.

2251 -R- UNITED EIGHT ELEVEN RUNWAY FOUR RIGHT YOU'RE CLEARED TO LAND
2254 -C- IS THAT THE LONGEST RUNWAY
2255 -F- OKAY WE NEED A LONG RUNWAY

2430 -C- I NEED A LONG FINAL
2432 -C- TELL HIM WE NEED A LONG FINAL
2435 -F- AND UNITED EIGHT ELEVEN HEAVY AH WE'D LIKE AS LONG A FINAL AS YOU CAN GIVE US
2438 -R- UNITED EIGHT ELEVEN TURN AH FIFTEEN DEGREES LEFT
2442 -F- FIFTEEN LEFT NOW UNITED EIGHT ELEVEN HEAVY
2449 -F- OKAY I GOT LIGHTS OVER HERE
2502 -C- OKAY
2504 -F- OKAY YOU CAN SEE IN A MINUTE

Soon excited passengers point toward the windows. Lights! Just a few at first as they near Barber’s Point, but soon, the twinkling beautiful lights of the City of Honolulu. If it wasn’t for the terror, they would be swept away by the beauty below.

2601 -R- UNITED EIGHT ELEVEN I NEED AH SOULS ON BOARD IF YOU HAVE IT
2604 -F- OKAY SOULS ON BOARD

2723 -F- HOW DO THE CONTROLS FEEL
2724 -C- ALRIGHT SO FAR

3032 -C- OKAY WELL LET'S TRY THE GEAR
3034 -F- OKAY TRYIN' THE GEAR
3035 -F- YOU READY?
3035 -E- OKAY
3035 -F- YOU'RE HIGH ON THE GLIDE SLOPE
3036 -C- YEAH
3036 -F- THAT'S FINE
3037 -C- YEAH I WANNA BE HIGH

3054 -F- TWO ENGINE APPROACH
3055 -E- I HEAR PEOPLE SCREAMIN' BACK THERE
3056 -C- I THINK * -
3058 -F- SHE'S YELLING FOR 'EM TO SIT DOWN

Flying on two engines and descending, Captain Cronin and crew must now nurse the crippled aircraft toward their approach to HNL. Runway 8L is selected because it is the longest runway, 3,000 feet longer than the 12,000 ft long Reef Runway.

Captain Cronin will need every square foot of the runway as he must come in faster than normal due to his lack of flap and rudder control. He is also keenly aware that the structurally weakened aircraft may buckle under it own weight. His descent through the sky has to be precise, direct and gentle.

3157 -C- WE GOT BRAKES?
3158 -E- NORMAL HYDRAULICS
3200 -F- SO WE GOT BRAKES
3202 -F- BUT YOU'RE ONLY GUNNA HAVE REVERSING ON ONE AND TWO

Laura and crew begin their commands in unison. “Grab your ankles. Keep your head down ‘til the plane stops. Stay down, stay down.”

Coming in at such a fast speed with only two engine reversers will require a long time to wait for the aircraft to stop. The cabin crew continue their commands. Captain Cronin tells S/O Thomas it is time for him to spin his side facing jumpseat around and prepare for the landing.

3358 -F- LOOKS GOOD SO FAR
3359 -F- ONE HUNDRED
3400 -F- BRAKE PRESSURE'S AH HOLDING BRAKE -
3402 -C- LET'S GO THROUGH THE PROCEDURE
3404 -F- BRAKE PRESSURE
3405 -C- AS SOON AS I LOCK THE AH
3406 -E- SPOILERS ARE COMIN' IN
3407 -F- OKAY
3408 -C- I'M GUNNA LOCK THE BRAKES.
3409 -F- OKAY HOLD ON
3412 -F- AH SPEEDBRAKE PARKING BRAKE -
3416 -E- SHUTDOWN THE ENGINES
3418 -F- START LEVERS
3419 -C- SHUT 'EM DOWN
3420 -C- SPEEDBRAKES
3421 -C- WE'RE EVACUATING

Twenty minutes after the explosion, flight 811 makes a picture perfect touch down.

When the flight 811 comes to a stop near the end of runway 8L, the cabin crew goes through the paces for which they have trained. “Release Seatbelts and Get Out!” The f/a’s at each of the main deck doors rise, assess their conditions, and rotate all 10 door handles. All passengers and crew members make it out of the aircraft within 45 seconds while emergency personnel wait for their cue to move in to assist.

In addition to the nine passengers that were lost in-flight, two passengers and three crew members had serious injuries and were rushed to nearby hospitals. 20 other passengers and 12 crew members suffered minor injuries and all injuries were related to either the explosive decompression or the evacuation slides.

The National Transportation Safety Board began it’s investigation immediately. The aircraft was gone over with a fine tooth comb to find the cause and any other information as to the mystery of what had happened to flight 811.

Some of the surviving family members found solace in the NTSB findings of human remains in the engine blades of #3. It meant their family member was killed instantly instead of perhaps traveling strapped to their seat for the 5 minute fall into the ocean. No bodies were ever recovered.

A final determination did not come until after the cargo door could be located and salvaged by a Navy deep-submergence vehicle. It came up in two pieces on separate dives and was sent to Seattle to be examined by Boeing.

After twenty-two months of exhaustive research and testimony, the final analysis led to a determination that a short circuit in the electrical system (a stray electrical signal) caused a known design flaw in the locking mechanism to allow the cargo door to open after it was in the locked position. It had happened before on a Pan American 747 in 1987 while on climb out from Heathrow.

Boeing and United decided not to contest liability and agreed to jointly share payment of damages in any lawsuits arising from the accident. No contest was essentially accepting no blame.

Boeing would make a directive for airlines to replace the aluminum locking sectors with steel locking sectors for the cargo doors. United would later take the extra step of having it’s ramp personnel disconnect the cargo-door circuit breakers before each flight of a jumbo jet.

After $14 million in repairs, the aircraft was brought back into service at United in 1990. It’s identification number was changed, but crew members familiar with the aircraft always knew when they were on her. She was later parked, sold through private parties and began another life and history in the West African country of Gambia.

Council 14 would like to salute the crew members of United flight 811 and pay tribute to the nine passengers lost, who left behind family members and friends with lives now forever changed.

Passengers: Anthony Fallon and wife Barbara, Harry and Susan Craig, Lee Campbell (24), Dr. John Crawford, John Swan, Rose Harley and Mary Handley-Desso.

Flight Deck Crew Members: Captain Dave Cronin, F/O Greg Slater, S/O Randall ‘Mark’ Thomas.

Cabin Crew Members: Purser Laura Brentlinger, Aft Purser Sarah Shanahan, Ricky Lam, John Horita, Curt Christensen, Tina Blundy, Jean Nakayama, Mae Sapolu, Robin Nakamoto, Ed Lythgoe, Sharol Preston, Ricky Umehira, Darrell Blankenship, Linda Shirley, Ilona Benoit.

Ramp Personnel: Lead Ramp Serviceman Paul Engalia, Daniel Sato, Brian Kitaoka.

In 1989, the Flight Crew received the Secretary's Award for Heroism from the Secretary of Transportaion for their actions.

To read the NTSB report, the entire Black Box transcript or see a video story of the event, go to the provided links.

April 28, 2008

New York Times
Continental Abandons Merger Talks With United

By ANDREW ROSS SORKIN and MICHELINE MAYNARD
Continental Airlines said Sunday that it had abandoned merger talks with United Airlines and was planning to remain an independent carrier, a blow to lengthy efforts by United to find a merger partner.

Continental’s decision, announced by the airline Sunday afternoon, will change the complex game of musical chairs that the airline industry is playing after the merger announcement last week by Delta Air Lines and Northwest Airlines.

Continental’s move was a stunning development for United’s parent, UAL, which had been negotiating in expectation of reaching a deal by late this week. As recently as Friday, it looked as though Continental, based in Houston, and United, based outside Chicago, were on the way to reaching a merger agreement.

Continental decided to drop the discussions after UAL announced worse-than-expected earnings, which sent shares falling last week. On Tuesday, United said it lost $537 million during the first quarter, on sharply higher costs for jet fuel. The airline, which spent more than three years under bankruptcy protection earlier this decade, said it would cut flights and eliminate a further 1,000 jobs.

Directors at Continental, who met Sunday afternoon, feared that a merger with United could put their company in peril. Continental, which had been expected to take management responsibilities in a deal with United, survived two bankruptcy filings of its own in the 1980s and 1990s, and has been considered one of the industry’s best-run carriers.

With the United-Continental deal scrapped, a new set of pairings is likely to take place. UAL is expected to push to reach a deal with US Airways, with which it had also been discussing a merger, people involved in the talks said.

In a statement, United's chief executive, Glenn F. Tilton, said on Sunday night: "Consolidation is under way. Ensuring you have the right partner is everything. We will pursue all options to ensure a strong, sustainable future for our airline and will not shy away from the touch choices necessary to create value for our shareholders and benefit our employees and customers."

Meanwhile, Continental is expected to press ahead with preliminary talks to create a three-way alliance — short of a full merger — with American Airlines and British Airways.

In a letter to Continental employees, Lawrence W. Kellner, the airline’s chief executive, and Jeffery A. Smisek, its president, wrote: “The board very carefully considered all the risks and benefits of a merger with another airline, and determined that the risks of a merger at this time outweigh the potential rewards, as compared to Continental’s prospects on a stand-alone basis.”

They said they worried a deal would put company’s operational and financial strengths “at risk.” They also hinted at forming a new alliance, saying, “We are considering alternatives to SkyTeam” — an alliance with Delta and Northwest — “as we carefully evaluate which major global alliance will be best for Continental over the long term.”

The executives did not mention American or British Airways.

The two sides had agreed on several issues in their talks. Mr. Kellner would have run the combined company, while United’s chief executive, Mr. Tilton, would have stepped away from day-to-day operations.

Mr. Tilton had advocated strongly for industry consolidation, saying it was the only solution to help the struggling airlines become consistently profitable. US Airways’ chief executive, W. Douglas Parker, has also pushed for consolidation, making an unsuccessful hostile bid last year for Delta before it emerged from bankruptcy protection.

Mr. Kellner, in his letter, at least seemed sympathetic to the industry’s plight, telling employees, “Every U.S. carrier, including Continental, is under enormous pressure from record high fuel prices, a slowing U.S. economy and a weak dollar.”

United’s stock closed at $21.43 on Monday. That evening, Delta and Northwest announced their merger plans. On Tuesday, United’s shares closed below $14. They ended the week at $15.21, off 29 percent for the week.

On Tuesday, United’s chief financial officer, Frederic F. Brace, said repeatedly that the airline was in compliance with the covenants of its bank agreements. But, Mr. Brace added, “With the recent spike in fuel prices and the softening economy the trajectory of our covenant coverage is downward.”

Because of steps the airline was taking to cut costs, he said, “it’s really very difficult to predict whether we will have an issue or not.”

On Wednesday, after the sharp drop in its stock, United issued a statement saying that it was in compliance with the terms of deals governing its credit arrangements with banks, including JPMorgan Chase, Citibank and Credit Suisse.

Analysts said the situation created doubt about United’s health, an issue that has hovered around United since it emerged from bankruptcy protection in early 2006. That concern was a reason talks between Delta and United, which took place while Delta was under bankruptcy protection earlier this decade, never gained traction.

Meanwhile, Continental’s next steps are far from clear. Although it planned to pursue discussions with American about joining its alliance with British Airways, the corporate cultures of Continental and American differ significantly. American, as the nation’s biggest airline until the Delta-Northwest deal is completed, is likely to want to dictate the terms under which the much-smaller Continental comes on board.

At the same time, Continental’s membership in the SkyTeam alliance could offer much greater reach than a deal with American and British Airways. The new Delta will be bigger than American, and other members in SkyTeam include KLM and Air France, which have a broader base than American and British Airways across Europe and the rest of the world.

Meanwhile, in a further sign of the industry's problems, Eos Airlines, a business-class carrier, said Sunday that it had filed bankrupcy protection and ceased flying. Eos said it filed for Chapter 11 protection in New York on Saturday. Eos offered business class flights between New York's JFK Airport and Stanstead Airport in London. It was the latest in a series of small airlines to file for bankruptcy protection in the last few weeks.

Eos made its final flights from London to New York on Sunday, and canceled flights in the opposite direction. It began flying in 2005.

What's Next in Airline Mergers?

April 15, 2008
By Susan Carey, Paulo Prada and Melanie Trottman
Companies Featured in This Article: Delta Air Lines, Northwest Airlines, UAL, AMR, Continental Airlines, US Airways Group, Frontier Airlines Holdings

U.S. airlines -- abuzz over the blockbuster merger deal between Delta Air Lines Inc. and Northwest Airlines Corp. -- are already focusing on the next potential pairing as the fragmented industry struggles to cope with a harsh operating environment.

Both United Airlines parent UAL Corp. and AMR Corp.'s American Airlines could do deals that would quickly eclipse the proposed Delta-Northwest combination, which would be the world's biggest carrier. United, now the No. 2 carrier by traffic, has long coveted Continental Airlines Inc. American, now No. 1, could make a counter-bid for Northwest or try to woo Continental.

Meanwhile, US Airways ...

Delta pilots tentatively approve merger

Published: April 11, 2008 at 1:25 PM

ATLANTA, April 11 (UPI) -- Delta Airlines Inc. and its pilots union reached an agreement that could allow merger talks with Northwest Airlines Corp. to resume, U.S. sources said.

The agreement is tentative, Crain's Business Journal reported.

The agreement, which may be announced Monday, could be the catalyst for a merger between United Airlines and Continental Airlines, Inc., the report said.

Continental has said it would consider a merger if Delta and Northwest consummated a deal.

Washington lobbyist Steve Hart said any merger should be announced by May 30 "or there's no way to get a deal through" in time for the U.S. Department to review it before President George Bush leaves office.

A change in administration would, otherwise, delay any decision on a merger, analysts said.

Delta Urged to Merge

Familiar face pushes merger: Hedge fund's point man tried to unite
Delta, Continental

By Russell Grantham
The Atlanta Journal-Constitution
Published on: 12/02/07

Gordon Bethune has a knack for popping up in Delta Air Lines' affairs, even though he's never worked there.

The blunt-spoken former Navy mechanic made his name 13 years ago when he led Continental Airlines' transformation from a twice-bankruptbasket case into one of the industry's best-run carriers.

Twice during his 10 years as Continental's CEO, he was involved in talks aimed at merging the two carriers. He was quick to give his
views on why they didn't work out, once citing the then-Delta CEO's "stupidity" in insisting on controlling labor integration.

Late last year, Bethune appeared again on Delta's radar as a hired adviser to its bankruptcy creditors as they mulled a buyout bid from
US Airways, getting paid $250,000 for every 10 days of work.

Now Bethune, 66, is once again in the middle of merger talk swirling around Delta. Pardus Capital Management hired him to help make its
case that Delta and United Airlines need to merge as the industry faces record jet fuel costs.

Pardus, a New York hedge fund with stakes in both Delta and United, urged executives at the airlines in a mid-November letter to pursue a
stock-swap merger that would create the world's largest carrier, with hubs in the world's two busiest airports, Atlanta's Hartsfield-Jackson
and Chicago's O'Hare, and extensive routes to Europe and Asia.

In the weeks since, Bethune has pitched the idea to other investor groups, although it remains unclear whether any will line up behind
the Pardus proposal.

Asked why the investment firm chose him, Bethune half-jokingly answered: "They looked for all the guys who have been successful in
the [airline] business and they found only one: me."

Bethune has a point, said Mike Boyd, a longtime aviation consultant. "He's got more credibility than anyone in this industry, period," said
Boyd, of the Boyd Group in Evergreen, Colo.

"He just tells it like it is," Boyd added. "The problem is, he tells it like it is."

This is how Bethune tells it: The industry has too many players to remain prosperous as the cost of fuel —- most airlines' biggest
expense —- follows the price of oil skyward. He says the routes and hubs of Delta and United have little overlap that would cause job
losses or political opposition.

Despite almost immediate expressions of opposition from Delta's pilots—- its only large union group —- and workers' vociferous opposition to
the US Airways deal, Bethune thinks employees will ultimately support the merger because they would get stock in the combined airline and
job opportunities would grow. He believes he knows how to address employees' worries, having won widespread worker support for his 1990s
turnaround at Continental despite cutting thousands of jobs.

He says most of the job losses from a Delta-United merger would be confined to the airlines' regional carriers (such as Atlanta-based
Atlantic Southeast Airlines and Delta-owned Comair in Cincinnati).

Delta's and United's executives have both "publicly talked about the need for consolidation," Bethune said. "It's time to do it."

Both Delta's and United's managements favor consolidation, and Delta's directors formed a committee to study that and other scenarios. But
the carriers say no negotiations have occurred, and Delta says it's only interested in deals in which it's the surviving company.

Even if managements favor or oppose a deal, they have to step delicately. Top executives have lost jobs for floating a merger
proposal without first clearing it with the board of directors. And while they have a legal and financial duty to investors who see
mergers as a path to higher stock values, intense opposition from other constituencies has shot down many a deal that seemed pretty on paper.

Indeed, Delta's pilots union has already said it will fight Pardus' "poisonous vision" of a United merger.

If investors pressure Delta's management to look at a potential merger, "they're going to look at it," said Boyd, but he gives it low
odds of happening anytime soon.

Continental did no major deals under Bethune, but he wasn't shy about engaging in talks —- or opining about why they failed.

Growing up in Texas, he dropped out of high school at 17 to join the Navy. He stayed in the service 20 years, finishing school and getting
a college degree. He bootstrapped his way to the airline executive suite, starting as a maintenance manager at Texas-based Braniff. He
once worked at Western Airlines with then-CEO Gerald Grinstein, who later became Delta's CEO. Grinstein gave him the nickname "Oil Can."

Under Bethune, Continental approached Delta in 1996, but then-Delta CEO Ron Allen wouldn't bite. Two years later, with Leo Mullin at
Delta's helm, Delta made a merger bid that failed when Continental opted instead to sell a stake to Northwest Airlines and form a
marketing alliance. It was then that Bethune said his job was saved by Mullin's "stupidity" regarding labor issues. Later, when given a
chance to backpedal, he softened the term to "ignorance."

When Delta reacted to the Continental-Northwest link by seeking a similar alliance with United, Bethune quipped, "That's why ugly people
always marry each other. ... There's no one left to talk to."

That alliance was later scaled back dramatically after Delta's pilots opposed it.

Bethune now says just the opposite when arguing that United and Delta should merge before some other airline steps in.

"It's like when you go to a dance and pick the prettiest girl and all the other guys get the leftovers," he said. "Why wouldn't you want to pick first?"

Bethune said he and a consulting firm hired by Pardus made presentations to roughly 100 investors and potential backers in
mid-November in a New York meeting sponsored by Merrill Lynch. That was followed by smaller meetings in Boston with "a bunch of
institutional [investors] like Fidelity," Bethune said.

The giant mutual fund company is Delta's third-largest shareholder, with a 14 percent stake. Pardus and dozens of other hedge funds own
more than 50 million Delta shares, or about 20 percent, while institutional investors own most of Delta.

Bethune said Pardus is waiting to see what investors and the airlines' managements do. The firm says it isn't soliciting investors' votes or
putting together an investor group to wage a proxy battle —- actions that would require disclosure filings with the Securities and Exchange
Commission.

But the rising power of hedge funds and private-equity investors could be helping to change the dynamics in the top levels of the airline business.

Activist investors such as hedge funds flocked to Delta and other big carriers as they went through bankruptcy reorganizations. That
effectively hit the reset button, pitching out much of their previous management teams, boards of directors and investor bases.

Many of Delta's current investors were also its bankruptcy creditors and got Bethune's advice on the US Airways bid last winter. US
Airways' offer was "clearly a higher value" than Delta's stand-alone plan he said. But it came with higher risk, he added, because Delta's
and US Airways' operations overlap extensively, which would have brought big job cuts and lots of political opposition and regulator scrutiny.

Since Delta emerged from bankruptcy in the spring, its market value has dropped substantially from management's earlier projections,
Bethune said. As a result, he said, Delta's investors are "not really happy campers."

United Employee Group: Pay Workers, Not Investors

An employee group voiced harsh opposition to United Airlines' recently announced plan to pay hundreds of millions of dollars to shareholders of United parent UAL Corp., saying the carrier should be paying workers -- not investors. The Union Coalition at United Airlines, which includes the unions that represent United's flight attendants, pilots, mechanics and other workers, responded Tuesday night to the company's announcement that UAL is seeking creditor approval of a plan under which the airline would prepay $350 million of its long-term debt, in return for permission to implement $500 million in "shareholder initiatives." Those initiatives, which United hasn't detailed, are expected to come in the form of a large-scale share-repurchase plan, or possibly a dividend to stockholders.

Air Mergers Gaining Steam

The head of United Airlines' parent company said Tuesday he no longer feels like a voice in the wilderness in arguing that airlines must consider consolidation to withstand competitive challenges, including rising fuel costs. "We at United have been talking about this for the past three to four years, and there's been very little company among us," UAL Corp.'s Glenn Tilton said after delivering a speech to business leaders at the Boston College Chief Executives Club. "Now, we have virtually everybody saying the same thing," Tilton said, noting that several rival airline CEOs suggested on third-quarter conference calls that the time may be right for industry mergers and acquisitions. "I think we've come a long way, when you consider that early on, we were the only people saying that." United, the largest carrier at Denver International Airport, has been the focus of industry merger rumors, including a possible pairing with Delta Air Lines Inc.

Aviation Workers Soon To Get More Criminal Checks
More than a million aviation workers — including pilots, mechanics and flight attendants — will begin undergoing more thorough background checks in January as the U.S. focuses on preventing insider terrorist attacks. The Transportation Security Administration will take over the job of checking backgrounds of 1.2 million aviation workers, TSA spokeswoman Ellen Howe said. The agency will also check anyone applying for a job requiring a federal aviation license. Since the Sept. 11, 2001, attacks, background checks have been done by the Federal Aviation Administration (FAA). The increased scrutiny comes as the Homeland Security Department cracks down on the possibility of attacks by workers who don't have to go through security checkpoints to get on a plane or enter sensitive areas. Last month, a former Comair airline worker was sentenced to 15 years in prison for sneaking guns and marijuana onto a Delta Air Lines plane in Orlando's airport in March. The TSA takeover means every licensed aviation worker will be checked against the government's complete terror watch list, which the FBI runs, instead of a partial list the FAA has used, Howe said. The FAA licenses 21 types of workers including flight instructors, air-traffic controllers, dispatchers and flight engineers, FAA spokesman Les Dorr said.

US Airways Declares Holiday Weekend A Success

US Airways, hoping to send a signal that its operations are improving, is trumpeting its on-time performance during the Thanksgiving travel rush. The Tempe airline said that between Wednesday and Sunday, 86.6 percent of its flights on average arrived within 14 minutes of their scheduled time. That was the best of any Wednesday-Sunday period since the America West-US Airways merger two years ago. US Airways also said it completed 99.6 percent of scheduled flights and had fewer mishandled bags than expected. Airlines don't usually tout their performance over such a short period - Northwest is the only other major airline to issue a news release with Thanksgiving stats - but US Airways has a lot to prove this year. The airline has been struggling mightily with on-time flights and other key customer-service measures.

By Ted Reed
TheStreet.com Staff Reporter
11/14/2007 3:31 PM EST

A hedge fund has called for a merger between two airlines that have strongly backed industry consolidation -- Delta (DAL - Cramer's Take - Stockpickr) and United Airlines parent UAL (UAUA - Cramer's Take - Stockpickr - Rating).

In a letter sent to Delta executives, hedge fund Pardus Capital Management urged Delta to "enter into a merger transaction with another carrier" and suggests that the other airline be United.

A merger is "imperative" because of the rapid rise in fuel prices and "the increased risk to the business as a standalone entity," said the letter from Pardus president Karim Samii and principal Shane Larson.

Shares of Delta were lately jumping 12% to $20.99, and UAL was up 10% at $47.79.

However, even flexible Bush administration antitrust regulators might have a hard time approving a tie-up between the nation's second- and third-largest airlines. In the past, internal Delta consolidation studies have concluded that regulators would not permit a merger with United, a source told TheStreet.com.

Points in favor of a United merger were that "United has the Pacific and is lacking in the Southeast," qualities that match up well with Delta's Pacific weakness and Southeast U.S. strength, the source said. "But the combined size would be too big to pass a regulatory test," he said.

At any rate, helpful Pardus even took the liberty of designing a methodology for Delta, suggesting that it issue 2.395 shares for each share of United. Additionally, Pardus nominated the Delta management team to run the combined companies. Pardus holds 7 million Delta shares and 5.6 million UAL shares, said a spokesman for the firm.

Delta CEO Richard Anderson issued a noncommittal response Wednesday to the Pardus proposal, although he agreed that high fuel costs increase the need for consolidation.

"We appreciate receiving Pardus' views on the best course for Delta's future," Anderson said. "Delta believes that the right consolidation transaction could generate significant value for our shareholders and employees and that strategic options should be evaluated."

Delta also disclosed that its board has established a special committee to review strategic options, including consolidation. The committee is headed by Daniel Carp, nonexecutive chairman. Delta has also retained financial and legal advisers to assist in the review.

United spokesman Jean Medina declined to comment specifically on the Pardus letter, but noted: "We have said for the last four years that we believe consolidation is necessary for the industry, and others independently are reaching the same conclusion."

In the past, internal studies by Delta have concluded that a merger with Continental (CAL - Cramer's Take - Stockpickr - Rating) would make the most sense, while a deal with Northwest (NWA - Cramer's Take - Stockpickr) could also have value because it would provide access to the Pacific, sources said.

Delta bid unsuccessfully for Continental in 1998, then acknowledged it was again studying a merger effort in 2000.

But the Pardus letter panned Continental and Northwest combinations, based on analyses done for the firm by consultants Gordon Bethune, a former Continental CEO, and by Simat Helliesen & Eichner.

A combination with Northwest would offer savings, but wouldn't create as expansive a network as a United merger would. The letter said joining with Continental would raise costs and create management succession issues, the letter said.

Delta has become a backer of consolidation since Anderson took over as CEO in September, while United CEO Glenn Tilton has long supported the concept. By contrast, Anderson's predecessor, Jerry Grinstein, has said mergers are last resorts enabling carriers to survive when they would otherwise fail.

Last year, Grinstein told reporters that he had rejected an approach by Tilton some time before Delta's 2005 bankruptcy filing. "He said, 'Are you interested in talking [about a merger] ?' And I said not at all," Grinstein recalled.

Note:  It's time for Tilton to take the money and run; his job is done. He was the BK GUY, not an airline CEO. The stocks will boom, and likely bust, after this run is hyped. Who you gonna believe? Denis

Delta says not in merger talks with United Airlines

Delta Air Lines CEO's statement trims share prices for both carriers.

By Laura Mandaro, MarketWatch Last Update: 4:07 PM ET Nov 14, 2007 SAN FRANCISCO (MarketWatch) -- Delta Air Lines Inc.'s Chief Executive Officer Richard Anderson said Wednesday the carrier is not talking to United Airlines about a merger, throwing cold water on merger speculation that caused a brief spike in both carriers' shares. http://tinyurl. com/3cn5ex

Plane Business Banter
Airline Analyst Holly Hegeman, Editor
November 9, 2007

... Back to New York for a minute, where Goldman Sachs held their annual Transportation Conference this week. Clearly, the comments that seem to have generated the most buzz from the conference were those uttered by United Airlines CFO Jake Brace, who said this week that United has a little more than 100 aircraft unencumbered by debt, including 50 Boeing 737s, "that we could ground whenever we needed to if the demand environment were such that it didn't make sense to fly those planes."
Not surprisingly, these comments were then followed by a "clarification" message to employees from Jake as the United Corporate Communications office embarked on a mission to "make more clear" what Jake really meant to say.

If you are wondering why all this was necessary, well, here's one big reason. Under the recently-concluded CBA Section 1-F-1 negotiations and unanimous ratification by the pilots' ALPA MEC, United is prohibited from doing precisely what Jake Brace suggested. United is required to operate a minimum of 1.689 million block hours. As a result, United would be in violation of its recent agreement with ALPAif it up and decided to ground 100 airplanes.

Speaking of United, the airline issued a release this week saying it was instituting a "fuel surcharge" of $5 each way on its domestic flights. As one observant reader pointed out, there is no such thing as a fuel surchage. It's a fare increase. "There’s no such thing as a fuel surcharge in the U.S. context, because all non-avoidable fees must be included in the base fare (with certain exceptions such as PFCs, etc)."

But as he also added, it wouldn't be the first one. Not only that, but this week the cruise operators jumped into the fuel surcharge pool, as Carnival Corporation announced it will now assess a $5 per day surcharge, per passenger, on its North American cruise ships after Feb. 1. This applies to all of the company's lines: Holland America, Princess, Seabourn, Costa, and Cunard.

Finally, we had some news Friday on the continuing efforts to get a pilot retirement- age extension bill passed by Congress. APAAD, Airline Pilots Against Age Discrimination, sent out an update Thursday announcing that it had received word that the House Transportation Appropriations Committee had reached agreement with their Senate counterparts in the appropriations conference committee deliberations.

The age language present in S. 1789, previously lacking in the House version (H.R. 3074) was to be included in the revised Transportation Appropriations bill and was scheduled to go to a vote by the House Transportation Committee that evening. "It is expected that the full House will pass the revised Transportation Appropriations bill next week – with our age language intact. It is unknown at this time when the Senate will take action on the revised appropriations bill," the group advised in their update.

As the group noted in their update, "This gives us two venues for further advancement of our efforts to change the Age 60 Rule: FAA Reauthorization and Transportation Appropriations, in play in both the House and Senate."

Finally, in breaking news as we posted this on Saturday, the Chicago Tribunereports that FAA caps on flights into Chicago's O'Hare International Airport will notbe lifted by FAA officials in November 2008.

According to the Tribune, Henry Krakowski, the FAA's new chief of air-traffic operations, told the paper that the decision to extend controls on airline arrivals at O'Hare is aimed at keeping flight delays and cancellations in check.

"The new runway will get traffic on and off the airport faster," Krakowski said. But it won't lead to a significant increase in flights, he said.

Say what?

Krakowski's disclosure that the flight caps won't be lifted a year from now took city officials by surprise. Especially since the FAA had originally said that it would back off the caps after the new runway was completed.

"When flight caps were proposed for O'Hare, the city was assured that they would sunset in 2008," said Karen Pride, spokeswoman for the city's Department of Aviation. Rosemarie Andolino, director of the O'Hare expansion project, said that based on city projections, O'Hare would be able to handle an additional 50,000 flights annually after the first new O'Hare runway opens and an existing runway is extended.

Had to love Ms. Andolino's comment, when she said, "I think we need to sit down with Mr. Krakowski because he is new to this position.The flight caps are not supposed to be in place for perpetuity."

Yeeow.

Two airlines that cannot be happy about this news are JetBlue and Virgin America.Both had been expecting to get a crack at adding new service after the caps were lifted.

And clearly, two other airlines -- United and American, who saw their schedules into O'Hare slashed as a result of the caps -- are not dancing for joy over this news either.

This one will be interesting to watch.

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SAN FRANCISCO (MarketWatch) -- United Airlines parent UAL Corp. is considering selling a stake in the division that maintains aircraft for its planes and those of other carriers, as the company continues to tweak its operating structure after exiting bankruptcy last year.
The unit, called United Services, employs about 6,900 people, with the largest concentration of technicians, engineers and support staff in the San Francisco area.
"We are contemplating bringing in third parties who can invest in the maintenance, repair and overhaul business," spokeswoman Jean Medina said via e-mail Friday.
("Invest" means: give us money for working funds to be used to pay-off the CEOs and Boards of the merging airlines and the WS Banks that will put it together. Somehow the judges in Cook County and the Regulators will need to see the cash waving around too. All the profitable parts of the business will disappear.)

She said an outside investment could help the airline operator improve maintenance materials costs, streamline its supply chain and improve its infrastructure.
UAL has been working with consultants McKinsey & Co. on finding ways to improve the maintenance division. And it has been culling low-margin clients from its roster, a strategy that weighed on the company's second-quarter revenue. See full story.
United Services maintains, overhauls and repairs aircraft for more than 130 commercial and military customers globally, including Air China and Korean Air.
Any moves to unwind the division could meet with resistance from its union, which is already smarting from job cuts while the operator worked through a bankruptcy reorganization.
In the wake of UAL's exit from bankruptcy in February 2006, Wall Street analysts have been looking for ways the carrier could raise money by selling off some of its assets.
United's frequent flyer program has garnered some interest for its potential value as a stand-alone company. Last week, Bear Stearns analyst Frank Boroch said "now is an appropriate time to explore a frequent flier spin-off" of the division, which makes about $800 million in annual sales. End of Story
Laura Mandaro is a reporter for MarketWatch in San Francisco.

Delta's CEO hire seen as sparking M&A
By Laura Mandaro, MarketWatch
Last Update: 4:01 PM ET Aug 22, 2007

SAN FRANCISCO (MarketWatch) -- Wall Street analysts lost no time Wednesday setting the odds of a coming mega-merger in the airlines industry, spurred by Delta Air Lines Inc.'s pick of an former Northwest Airlines Corp. boss as its next CEO.
Late Tuesday, Delta's board named 52-year-old Richard Anderson, a fellow board member and former chief executive of Northwest, to replace retiring Delta CEO Gerald Grinstein, age 75. The hiring adds another point in common to the two carriers, which declared bankruptcy on the same day in September 2005 and exited the courts' protection months apart earlier this year.
"Having two airline chiefs that understand one another may provide the best opportunity the industry has seen for reaching a friendly deal," said Bear Stearns analyst Frank Boroch in a note to investors Wednesday.
"With an intimate knowledge of [Northwest Airlines], Delta with Anderson at the helm could either be a difficult competitor or close partner," he said.
Calyon Securities analyst Ray Neidl increased his rating on Delta Air Lines to add from neutral, saying the stock looks cheap if ticket prices rise, oil prices fall, or investors get excited about industry consolidation.
The management shifts at Delta suggest the Atlanta carrier "is seriously preparing for industry consolidation and this should excite the markets over the coming days," said Neidl in a note to investors.
He said Delta is probably more likely to be a seller than a buyer, and that its system would fit well with network carriers such as Northwest and UAL Corp.'s (UAUA:

UAUA43.83, +0.99, +2.3%) United Airlines, particularly due to its strong Pacific operations.
Delta, the country's third-largest air carrier by revenue passenger miles earlier this year fended off a hostile takeover bid by US Airways. (LCC:
US Airways Group Inc
News, chart, profile, more
Last: 30.57+2.06+7. 23%
LCC30.57, +2.06, +7.2%)

That thwarted deal, spearheaded by the merger-friendly head of US Airways, helped drive up airline shares at the end of last year as investors bet on a string of transactions. But those expectations withered after Delta's management, supported by its bankruptcy credit committee, successfully blocked US Airways' offer.
Northwest, for its part, is coming off a rocky two months after its May 31 bankruptcy exit, as a spike in pilot no-shows in June and July caused it to cancel flights. The carrier, based in the Minneapolis- area town of Eagan, Minn., has since said it has made changes to pilot scheduling that should improve flight reliability.
And it's also involved in one M&A deal, on a small scale.
Last week, Midwest Airways (MEH:
Midwest Express Holdings, Inc. (Wisconsin)
News, chart, profile, more
Last: 15.89+0.08+0. 51%

MEH15.89, +0.08, +0.5%) said Northwest was acting as a minority investor in its takeover by private equity firm TPG Capital.
Delta also promoted its current chief financial officer Ed Bastion to the position of president, as well as CFO.
Anderson spent 14 years in management at Northwest.
Previously, he served as staff vice president and deputy general counsel at Houston-based Continental Airlines (CAL:
Continental Airlines Inc
News, chart, profile, more
Last: 31.57+0.84+2. 73%

CAL31.57, +0.84, +2.7%)
Delta shares rose 1.8% to $18.01 in late afternoon trading Wednesday. Northwest shares gained 3.2%. End of Story
Laura Mandaro is a reporter for MarketWatch in San Francisco.

 June 11, 2007

Airline Industry In A Jam

U.S. commercial flights were delayed a staggering 97.4 million minutes during 2006, according to Bureau of Transportation Statistics. That's the equivalent of 185 years of lost time for passengers stuck on jets or in airport terminals. And this year is shaping up to be even worse, as bad weather and simmering labor problems are expected to hammer travel during the summer. The peak is expected the week of June 21-27. That's when 1.7 million people are expected to traverse Chicago's O'Hare International Airport, about 14,000 more passengers than last year's peak period, according to the City of Chicago. Major U.S. airlines are still struggling financially despite the massive increase in air travel this decade: 78.3 million more passengers flew in 2006 than in 2000, according to the U.S. Department of Transportation. But domestic airline revenues, when adjusted for inflation, fell from $84.5 billion to $71.9 billion over that 7-year period as consumers sought the lowest fares, according to AirlineForecasts, a Virginia-based consulting firm. To offset that $13 billion drop in revenues, major carriers dumped older aircraft, deferred purchases of new planes and shed more than 150,000 full-time employees -- nearly 40 percent of their labor base.The result: jammed jets and grumpy employees, many of whom are working longer hours after losing one-third or more of their take-home pay in concessions. United ranks last among major carriers for customer service, and its marks have dropped the farthest of any airline from 2006 results, according to the University of Michigan's American Customer Satisfaction Index.

Flying Through Personal Darkness

Al Kent loved his job as a pilot for Air Wisconsin, but bouts of insomnia had left him feeling more and more lethargic in the cockpit. He sought help for the underlying depression - and opened himself to a more devastating turn of events. Under Federal Aviation Administration rules, he was grounded, and his flying career came to an end. "When I lost the ability to fly, I thought my life was over," said Kent. "I couldn't see anything else. That's what you live for, day in and day out." He wrote a book about the experience, "Ascent from Darkness." Yet even while baring his soul about the anguish, he was hesitant to reveal his identity. Al Kent is not his real name. It is a pseudonym he uses when writing about or discussing the subject. Seeking professional help is difficult for many people who feel depressed, but pilots face an even bigger disincentive: Some fear that doing so could permanently ground them.

Flight Attendants Feel Wrath of Fliers

Flight attendant Jackie Hamilton was stunned in March when a passenger allegedly spoke a racial epithet and spit on her shoe when getting off a United Express plane in Albany, N.Y. In her two years as a flight attendant, Hamilton, an African-American from St. Louis who filed a complaint with police, says she's flown more than 500 flights and never encountered such an offensive outburst from a passenger. "I was in shock for a minute," Hamilton says. "I remember the hatred in her voice." Passengers today complain of poor treatment at the hands of airlines trying to cut costs, but Hamilton and other front-line airline workers say abuse is a two-way street. They say tension between airline employees and passengers is rising, and passengers are ruder and more volatile than in the past. Packed planes, flight delays, security hassles and other factors already have made flying more unpleasant, and many airline employees are working harder for less pay than a few years ago. Angry confrontations between passengers and employees can delay flights, force emergency landings or pose safety risks in flight.

FAA Computer Glitch Causes Flight Delays

A cascading computer failure in the nation's air-traffic control system caused severe flight delays and some cancellations Friday along the East Coast. A computer system in Atlanta that processes pilots' flights plans and sends them to air-traffic controllers failed early Friday, Federal Aviation Administration spokeswoman Diane Spitaliere said. In response, the agency rerouted the system's functions to another computer in Salt Lake City, which overloaded because of the increased volume of data, magnifying the problem. The FAA could not immediately calculate the number of flight delays caused by the problem, which was made worse by bad weather, Spitaliere said. Airlines experienced thousands of delays, some lasting several hours, in what was shaping up to be one of the country's worst days this year for air travel. Although the computer malfunctions were fixed shortly before 11 a.m. Friday, their impact lingered on into the late afternoon, especially in New York, where computer systems took two extra hours to connect with the central system in Atlanta, the FAA said. Spitaliere said the flight delays in the rest of the country were not as severe. Delays for arriving flights at New York City's LaGuardia Airport averaged nearly four hours early Friday evening, the FAA said.

                              *       *       *       *       *

June 5, 2007

United Airlines said this morning that its passenger load factor -- or percentage of seats filled with passengers -- was 84.6 percent last month, the Chicago carrier's best-ever reading for the month of May. In the year-ago month, load factor was 83.8 percent. United's planes were fuller because the UAL Corp. unit carried more passengers, on fewer scheduled flights. The carrier noted that passenger traffic slipped 0.5 percent in the North America market, and declined by 1.8 percent on United's Pacific routes, while cuts in its relatively minor Latin America system contributed to a 16 percent decline in traffic in routes serving that continent. Despite such cuts, a hefty 12.5 percent increase in United's trans-Atlantic service gave the carrier a 0.5 percent overall increase in passenger traffic, to 10.21 billion revenue passenger miles. A revenue passenger mile is a standard airline yardstick which denotes one paying passenger flown one mile. Load factor in North America strengthened to 86.0 percent from 83.5 percent a year ago; on Pacific routes it declined a similar 2.5 percent to 81.2 percent.

Low-Cost Airlines Top Service Survey

Low-cost carriers such as JetBlue Airways, Southwest Airlines and Frontier Airlines received high marks from travelers for comfort, on-time performance and overall service in a Consumer Reports survey. The discounters handily beat larger, older airlines such as United Airlines and US Airways, which finished at the bottom of rankings covering 18 carriers. JetBlue led the results, followed by Midwest Airlines and Southwest Airlines. Denver-based Frontier came in fourth. Most of the carriers that received high marks "just seem to take a more personal approach," said Greg Daugherty, executive editor of Consumer Reports. "People report they are happier with checking in and with the service they get from the cabin staff. Maybe (it's) a combination of price and also a level of personal attention." United finished 16th. The carrier has ranked low in similar surveys in recent years but says it is working to improve its service levels.

--Related Story

June 2, 2007

United Selling Denver-Based Safety Auditor

United Airlines is selling a Denver-based safety auditing business to Cincinnati-based Aviation Research Group/U.S. Inc. The operational safety auditing business unit, Partners and Resources for Operational Safety, conducts International Air Transport Association safety audits for airlines around the world. Existing employees for Partners and Resources for Operational Safety in Denver and auditors in other locations will remain in place, according to Aviation Research Group. The decision to sell the business "supports our overall strategy of focusing on our core business," according to William Yantiss, vice president of safety for United Airlines, in a written statement.

Big Airlines Strengthened For Intense Market Struggle

With Northwest Airlines emerging from bankruptcy Thursday, the nation's largest carriers have reorganized to compete better in a world of discount carriers and higher fuel prices. Travelers munching pretzels for dinner, instead of a complimentary meal, on a crowded plane already know about some of the changes over the last few years, which included bankruptcy reorganizations by Northwest, Delta Air Lines, United Airlines, and US Airways. Most major airlines have trimmed unprofitable routes and fly fuller planes on the routes that are left. Workers took pay cuts at the bankrupt carriers as well as at American Airlines, which narrowly avoided bankruptcy in 2003. In recent years price competition from discounters held fares relatively low even as jet fuel prices rose and older airlines lost money because of heavy debt and the expenses of an older workforce, such as pensions and retiree health care. But bankruptcy helped them shed or reduce those costs. And full planes mean airlines are closer to something they covet: pricing power, or the ability to raise prices to cover their expenses.

Northwest Exits Bankruptcy

Shares of Northwest Airlines, newly emerged from bankruptcy protection, began trading on the New York Stock Exchange yesterday after the airline’s chief executive, Douglas M. Steenland, and other employees rang the opening bell. Northwest is the last carrier to exit bankruptcy since a wave of airline bankruptcies began after the Sept. 11 attacks. The shares traded at $25.25 after being offered to unsecured creditors at $27. Northwest has cut debt by $4.2 billion, trimmed $400 million a year in fleet costs and eliminated unprofitable routes. It also cut $1.4 billion a year in labor costs. The result is a slightly smaller, more efficient airline with some of the lowest costs among the major carriers.

NWA Expects Profits To Take Off

Northwest Airlines left bankruptcy Thursday and moved into a business climate with high fuel prices and a softening demand for domestic airline tickets, but CEO Doug Steenland expects that the carrier will remain profitable in the coming years. "We feel confident that we will still be able to meet our business plan," Steenland told reporters who gathered Thursday in the atrium of the airline's corporate headquarters in Eagan. That business plan includes pretax earnings of $986 million, or a 7.7 percent profit margin, for this year. The profit margin is projected to climb to 9.9 percent in 2010, when Northwest estimates it could achieve a $1.4 billion pretax profit.

TB Quarantine Raises Legal Questions

The case of a jet-setting tuberculosis patient might soon shift from the hospital wards to the courts. The patient, Andrew Speaker, an Atlanta personal injury attorney, could sue the federal government for being quarantined on the basis of federal regulations that some scholars see as unconstitutional. Or Speaker could be sued by fellow airline passengers, especially if any caught the disease from him -- which some legal scholars say is much more likely. ''He may be personally liable if someone contracts TB'' from being near him on his recent flights to and from Europe, said Peter Jacobson, a University of Michigan professor of public health law. ''I can see a jury coming down very hard on someone like that who willfully ignored advice not to travel.'' Speaker flew to Europe for his wedding and honeymoon after being advised by health officials not to make the trip because he had TB. Then, while he was in Rome, U.S. health officials told him to stay put because further tests showed he had an even more dangerous, drug-resistant type of TB than previously thought.

May 31, 2007

Union Chief Wants United To Start Talks

The head of United Airlines' unionized pilots, who is also a board member at United parent UAL Corp., said Chief Executive Glenn Tilton should open negotiations for new labor contracts in August, with the goal of putting agreements in place for every union by Feb. 1, 2008, the second anniversary of the carrier's emergence from bankruptcy protection. The request came in a scathing letter dated Tuesday by pilot Mark Bathurst, who is head of the United Master Executive Council of the Air Line Pilots Association and is the group's representative on UAL's board. The letter expressed "deep concern" about the company's future and "the deteriorating relationship between the management and employees." A copy of the letter was obtained by the Chicago Tribune. United, Bathurst told Tilton bluntly, is "not in a good place." But despite its troubles, he said, company officials appear content to let UAL remain stuck in a "fog of mediocrity." United's contracts with pilots and other union workers don't expire until late 2009, and reopening talks now would mark a major concession on the part of management. But UAL signaled it is not inclined to open contract talks anytime soon.

Northwest To Flex New Financial Muscle

Northwest Airlines, which came dangerously close to liquidation in 2005, is emerging from bankruptcy today with plans to use its restructured balance sheet to make major upgrades in its fleet and expand its international flying. And the airline's management, in a gesture meant to begin smoothing its frayed relationship with its workforce, will announce today that each employee is being granted a trip on the airline with family members or a companion. In an interview with the Star Tribune at his Eagan office, Chief Executive Doug Steenland said that Northwest will spend a total of $6.2 billion to acquire 32 new Airbus A330s and 18 Boeing 787s for overseas travel, modify 10 Boeing 757s for flights to Europe and add 72 new 76-seat regional jets for domestic flights. Some of the airplanes already have been added to the fleet, while others are on order.
NWA Workers Rally To Protest Execs' Stock

When Northwest Airlines emerges from bankruptcy today, it will be the first time since 2002 that no major U.S. carrier will be in Chapter 11. But Patricia Friend, president of the Association of Flight Attendants, told Northwest employees Wednesday that there is no cause for celebration because the restructuring there and at three other major airlines "occurred on the backs of airline employees who made crippling sacrifices." About 200 Northwest employees rallied at the State Capitol to oppose about $300 million in stock and options recently awarded to the carrier's 400 top executives.

TB On A Plane? Sign Of The Times

SARS on a plane. Mumps on a plane. And now a rare and deadly form of tuberculosis, on at least two planes. Commercial air travel's potential for spreading infection continues to cause handwringing among public health officials, as news of a jet-setting man with a rare and deadly form of TB demonstrates. ''We always think of planes as a vehicle for spreading disease,'' said Dr. Doug Hardy, an infectious disease specialist at UT Southwestern Medical Center in Dallas. In the latest case, a Georgia man with extensively drug-resistant TB ignored doctors' advice and took two trans-Atlantic flights, leading to the first U.S. government-ordered quarantine since 1963. The man, who officials did not identify, had been quarantined at Atlanta's Grady Memorial Hospital until Thursday morning, Grady Memorial Hospital spokeswoman Denise Simpson said. Neither Simpson nor William Allstetter, spokesman for Denver's National Jewish Hospital, where the man was expected to be taken for treatment, would confirm if he was transferred there.

May 30, 2007

United Pledges Time Limits On Ground Delays

After a tumultuous winter for airline travel, punctuated by tales of boarded passengers who were stuck on the tarmac for hours, United Airlines is changing its policies on ground delays. United, the largest carrier at Denver International Airport, said it now aims to limit taxi-out delays on the ground before takeoff to three hours or less and limit taxi-in delays on the ground after landing to 90 minutes or less. Any North American flights that have taxi-out delays longer than four hours, taxi-in delays longer than 90 minutes or on-ground diversion delays longer than four hours will be deemed by United as "flights of note." Passengers on such "flights of note" will get a note of apology, a certificate for 20 percent off a United round-trip economy-class ticket and a $10 airport meal voucher. "This is giving compensation where they historically have not," said David Stempler, president of the Air Travelers Association. But, he said, "we as passengers have to recognize there is no free lunch. We pay for these things at the end of the day, so if an airline is very forthcoming with money, it's going to affect fares at the other end."

Bumped Fliers and No Plan B

The summer travel season is under way, and so many planes are expected to be full that, if you are bumped, you could end up waiting days for a seat on another flight to the same destination. The number of fliers bumped against their will is expected to reach a high for the decade this year. True, those travelers — about 56,000 of them — still represent only a small fraction of all passengers. But the increasing difficulty of rebooking bumped passengers has made the experience more maddening for fliers, and for the airline workers who deliver the bad news. A look behind the scenes of US Airways at the widespread practice of airline overbooking shows the industry’s struggle to fill every possible seat, including those left empty by the millions of passengers who buy a ticket but then do not show up.

Last NWA Union Signs On ... By A Whisker

Northwest Airlines flight attendants, who have been battling with the airline since it entered bankruptcy 20 months ago, narrowly agreed to concessions on Tuesday, just two days before the carrier will leave court protection. By a 104-vote margin, the flight attendants became the last major work group at Northwest to agree to new contract terms. Their deal, approved by a vote of 2,966 to 2,862, provides the airline with $195 million in annual cuts through 2011, the same length of contract that Northwest negotiated with the other major unions.

May 25, 2007

Pilots Union Backs 65 As New Retirement Age

The Air Line Pilots Association, the nation's largest pilots union, on Thursday said it will support raising the retirement age of pilots to 65 from 60, a move that likely will hasten the end of a long-running dispute about how old is too old to fly a commercial jet. The switch risks dividing the union, which for the last 15 years has actively opposed efforts to raise the retirement age. The union, which represents 60,000 airline pilots, said 35 percent of its membership said in a survey that it should not change its stance, despite mounting indications that either Congress or the Federal Aviation Administration was going to raise the retirement age. The FAA said this year that it would issue new rules within two years extending the retirement age by five years. The House and Senate are considering legislation that would require the FAA to extend the retirement age sooner.

War Bill Helps Dairy Farmers, Airlines

In Washington, it pays to read the fine print. The Iraq funding bill is a perfect example, studded with provisions to help dairy farmers, airlines, salmon fisherman and rural counties hurt by cutbacks in federal logging. And that's just scratching the surface. Take dairy farmers, for example. They're receiving $1.2 billion in help in the Iraq bill as lawmakers clear the way to renew a subsidy program aimed at smaller milk producers. Then there are airlines like Continental and American, who won a last-minute battle with the White House over a plan that would allow them to together reduce the contributions to their pension plans by almost $2 billion over the next decade.

More Than Ever, It Pays To Be The Top Executive

As executive pay has surged in most American companies, attention has focused on the growing gap between the earnings of top executives and the average wage of workers in cubicles or on the shop floor. Little noticed, though, is how much the gap has also widened between the summit and the next few echelons down. “It’s executive pay chasing executive pay,” said Mark Van Clieaf, managing director of MVC Associates International, a consulting firm that develops compensation plans. “But nobody looked at the issue of internal pay equity, so the disparity just kept getting bigger.”

Airline's Pilots In Contract Dispute

About 100 US Airways pilots picketed Thursday morning for 2 1/2 hours at Phoenix Sky Harbor International Airport's Terminal 4, dressed in full pilot regalia and carrying placards protesting unfair treatment. Their message: They need fair wages and a joint pilot operating agreement. US Airways is in contract negotiations with four major employee groups - pilots, flight attendants, mechanics and baggage handlers - as it tries to combine its 36,000 employees into a single workforce. But contract negotiations with the pilots have been the most contentious by far. Pilots for US Airways and the former America West Airlines have been essentially operating as separate airlines.

May 22, 2007

Fliers, Get Ready For That 5:30 a.m. Flight

Attention passengers: Your early-morning flight is about to leave a lot earlier. In a bid to beat the summer congestion in the skies, Chicago-based United Airlines has scheduled 50 percent more 6 a.m. departures at Chicago's O'Hare International Airport in June than it did a year ago and is testing flights that leave as early as 5:30 a.m. in Atlanta, Baltimore, Boston and other cities. If passengers take a liking to it, United plans to expand the program. It is the airline equivalent to hitting the Kennedy Expressway long before traffic starts to build at 7 a.m. On the eve of what could be the worst summer airline travel season since 2000, United and other carriers are trying to wring new savings from flight schedules by minimizing delays. In a normal summer, delays soar as heavy air traffic meets tumultuous weather. But the financial pressure on airlines is greater this summer, the season when airlines typically make their biggest profit for the year.

Turbulence Over Executive Pay

American Airlines executives should have been celebrating last week during their annual stockholders' meeting, the first in six years at which they could spotlight an annual profit. Instead, chief executive Gerard J. Arpey spent much of the session fending off questions from irate employees. After agreeing to accept massive pay cuts in recent years to keep American flying, the employees said they were upset that the carrier's top officers have been given stock-based bonuses worth millions of dollars. One employee at the meeting called Arpey and other executives "arrogant, greedy, selfish and heartless individuals." The anger over airline leaders' pay is not unique to American. Employees who have taken pay cuts at United and Northwest airlines and US Airways are also battling their executives over similar deals. Labor groups say the unhappiness has led to at least two showdowns with managers over contractual issues. Some say demoralized workers could also hurt service. "When you have a bitter and angry workforce, that translates into a rough-and-tumble summer travel season," said Edward Wytkind, president of the AFL-CIO's Transportation Trades Department, an umbrella organization that lobbies on behalf of airline unions.

AirTran, Pilots Reach A Deal

AirTran Airways and its pilots union reached a tentative agreement for a four-year labor contract after more than two years of negotiations. The Orlando-based discount carrier said the pact will take effect in July if it is later ratified by the union's leaders and 1,519 pilots. "We are very pleased that we have reached a tentative agreement and we hope the pilots will ratify it and we can continue to build this great airline," said AirTran Vice President Tad Hutcheson. But neither side was revealing much before the union's leaders begin deliberating today in the union's Atlanta headquarters over whether to accept the deal. The airline and union did not disclose terms of the proposed agreement, which would not come up for renewal again until July 2011.

Revised Fliers' Rights Bill Draws Fire

Consumer advocates pushing legislation to prevent lengthy airline delays on the ground say the latest version of the so-called Passenger Bill of Rights has been so weakened that it may actually undercut efforts to protect fliers. Paul Hudson, who heads the Aviation Consumer Action Project, said the bill would do more harm than good and he now opposes the legislation unless it can be changed. "This would seem to give a green light legalizing very long airline confinements," Hudson said. Kate Hanni, a California Realtor-turned-advocate after her flight was delayed for eight hours last December, said she is pressing senators to change the legislation. Hanni stopped short of condemning the entire bill, saying it has enough new passenger protections to make it a partial victory. Earlier this month, the Senate aviation subcommittee approved an omnibus aviation bill that included provisions protecting passengers in the event of long delays. It required airlines to let passengers off of aircraft that have been held on the tarmac for longer than 3½ hours. However, the new legislation gave airlines an exemption from the requirement. The airlines will not face a deadline if they draw up a plan for how to deal with lengthy ground delays and file it with the U.S. Department of Transportation.

May 20, 2007

United Airlines announced this week that it will continue to shrink flights within the United States, continuing a long trend amid aggressive competition from low-cost carriers. The news doesn't come as a surprise: United executives recently acknowledged the carrier might have been a little too aggressive in adding capacity to its system last year, when it emerged from a 38-month bankruptcy. It's not that there isn't enough demand. United and other airlines are reporting record occupancy levels. Rather, the problem is that the domestic airfare environment is a bit weak because of heavy competition.

Worker Outrage Could Snarl Northwest's Chapter 11 Exit

Northwest Airlines got what it wanted out of its Chapter 11 bankruptcy case: dramatically lower operating costs that make it a more competitive carrier. But as the USA's No. 5 carrier, based in Eagan, Minn., completes what one analyst calls a "textbook example of a good bankruptcy," it appears to have made no progress on a critical front: the relationship with its unions. In fact, Northwest's chronically tense labor-management relations are worse than ever. In strict financial terms, the carrier's 20-month trip through bankruptcy court has been as successful as it has been quick. On top of $2.4 billion in annual cost savings, Northwest will emerge May 31 with $4.2 billion less debt. And, thanks to its huge presence in trans-Pacific and Asian markets, Northwest will still generate outsized revenue from its many long-haul business routes. But Northwest management was at odds with its unions going into bankruptcy reorganization, and it still is. Deep cuts in wages and benefits — some negotiated, some imposed by management — make improved relations unlikely. In the last month, employees' resentment has been stoked to unprecedented levels by the disclosure of a nearly $300 million incentive compensation plan for the airline's top executives that workers call outrageous.

U.S. Gives Final Approval For Virgin America

The U.S. Transportation Department said on Friday that Virgin America Airlines can begin service once it receives necessary safety clearances, concluding a stormy 18-month review of the airline's ties to British entrepreneur Richard Branson. Agency officials granted final approval of Virgin America's economic fitness application, initially rejected last December, after regulators determined the company would satisfy a law that restricts control of domestic airlines to U.S. citizens. Virgin America hopes to soon start selling tickets and plans a mid-summer launch with service from its San Francisco base to New York's John F. Kennedy airport. Operating a fleet of new Airbus A319s and A320s and promising amenities, Virgin America is taking aim at JetBlue Airways and other carriers that promote customer service. To win regulatory approval on appeal, Virgin America had to promise to reduce its exposure to overseas interests, including Branson's Virgin Group, which runs British-based Virgin Atlantic Airlines.

Is The Boss Fooling You --- For Safety's Sake?

James MacDougall, head of computer security for state agencies in South Carolina, has been phishing state employees. Andre Gould, who has a similar post at Continental Airlines, will do the same to employees at his company this summer. It shows what lengths companies will go to to keep their computer systems free of hackers, bugs and viruses. Phishing involves sending an e-mail that looks like it's from a trustworthy group but asks for information that could lead to a security breach. Employees may be outraged that their bosses are trying to dupe them. But Gould and MacDougall say that employees will be retrained for the information age, not fired, and that it's for everyone's security.

AirTran Wins Vote, Not Battle

AirTran Airways executives were elated to learn that Midwest Airlines shareholders voted 57 percent of the company's shares in favor of AirTran's hostile buyout bid. But majority backing for the tender offer, announced Thursday, doesn't end the battle. Midwest's top managers said they will keep fighting to stay independent, and they announced an alliance with Northwest Airlines on Thursday meant to expand the reach of their Milwaukee-based carrier. Financial analysts said AirTran's strong showing puts pressure on Midwest to sell, or at least negotiate. Midwest's extensive "poison pill" defenses remain, however, and company officials say they intend to keep them. "This fight is far from over," said William McGinnis, financial analyst at W. McGinnis Advisors in Milwaukee. "AirTran isn't giving up. Midwest isn't giving in. They both seem unlikely to change their positions based on [Thursday's] results." AirTran extended the tender offer to June 8, hoping to build on the majority. The result also makes it likelier an AirTran-backed slate of three new directors will be elected to Midwest's board later in June, adding to the pressure to sell.

British Airways Prepares For Fine

British Airways PLC on Friday admitted anticompetitive behavior while posting a net loss for its latest quarter. The airline said it has earmarked 350 million pounds ($690 million) to cover fines that are likely to stem from an investigation into whether senior staff had discussed fuel surcharges on tickets with rivals, after acknowledging "breaches" of policy. BA reported a net loss of 124 million pounds ($244.5 million) in the fourth quarter, compared to a net profit of 80 million pounds ($157.8 million) a year ago, after threatened cabin crew strikes in January and a new British tax on flights bit into the carrier's bottom line. Revenue dropped 6 percent to 1.9 billion pounds ($3.8 billion) after thousands of passengers canceled their reservations before the strike was dropped, costing the carrier 80 million pounds ($157.8 million).

Airports Woo Frontier Service

Airports across the country have put together thousands of dollars in incentives to attract Frontier Airlines service and are waiting for word from the carrier about where it will fly. Meanwhile, airports along the Front Range are trying to lure a Frontier maintenance hangar with incentives. Frontier subsidiary Lynx Aviation, which will operate a fleet of new Q400 turboprop planes to Rocky Mountain-region airports, is waiting for a waiver from the U.S. Department of Transportation to begin selling tickets and announcing routes. Meanwhile, the company has already listed job openings online for Lynx city managers in Wichita and Billings, Mont. Frontier had service to Wichita several years ago but discontinued it. Billings Logan International Airport, which Frontier already serves with regional jets, has a third daily flight from Frontier this summer. The airport's assistant director, Kevin Ploehn, said Billings may get Frontier service on Lynx.

May 18, 2007

United Airlines' parent company, UAL Corp., said Thursday it will trim its 2007 mainline domestic capacity by up to 3% from prior-year levels, as it adjusts to flagging domestic growth. The company said it will move some capacity to international routes, which have performed better than domestic routes recently. For example, United is adding Los Angeles-Hong Kong and Washington-Rio de Janeiro service in the fall. For the full year 2007, UAL said mainline domestic capacity will fall 2% to 3% from 2006 levels, while international mainline capacity will grow 3% to 4%. “Given the domestic market's slow revenue growth and excess capacity, we believe that removing marginal domestic capacity is the appropriate response,'' Chief Revenue Officer John Tague said in a statement.

Airlines Have A Long, Hot Summer Ahead

When the summer travel stampede starts here after Memorial Day, US Airways' Ross Bonanno says, his airline will be ready. US Airways has invested millions in smoothing operations at this sprawling old hub airport, badly neglected during two bankruptcy reorganizations and the 2005 merger with America West. US Airways has had a series of widespread service lapses since the merger, and its Philadelphia operation was notorious in past years for baggage carousel waits of an hour or more. "This summer, we're going to be in much better shape," says Bonanno, a vice president who oversees US Airways operations at 40 airports in the East. New $2 million bag-tag reader equipment that routes bags correctly 95% of the time has replaced old equipment that accurately read tags just 65% of the time, speeding bags to planes. With their finances improving, other U.S. airlines are also spending for the first time in years to brighten and staff up airports for summer, the year's busiest travel period. The government has tweaked the air-traffic control system to reduce disruptions from storms.

Executive Pay Proposals Rejected At American

Shareholders of AMR, the parent company of American Airlines, rejected at the annual meeting on Wednesday two proposals aimed at setting controls on executive pay. The Allied Pilots Association had sponsored a resolution to give stockholders an advisory vote on executive compensation each year. Votes representing about 59 percent of AMR’s shares went against the proposal. A second resolution that was also defeated would have required that 75 percent of stock options or restricted stock awards given to executives be based on performance. A third proposal, to change the way votes for directors are cast, was rejected.

Key Deadline Today For AirTran's Bid For Midwest

AirTran's dogged, slow-motion pursuit of Midwest Airlines reaches a revealing deadline today when Midwest shareholders are due to respond to a third takeover offer. Midwest shareholders in favor of AirTran's hostile, $15-a-share, $389 million, cash-and-stock bid must agree to tender their shares by midnight. The results are expected Thursday. Richard Magurno, AirTran's general counsel, said executives are hoping for a "substantial showing of interest" among Midwest shareholders that could pressure Midwest's board to sell — or at least prod them into detailed merger talks. "We're highly confident we'll have a substantial number of shares tendered," Magurno said.

May 17, 2007

Now Departing: Airline Careers

Workers at many airlines have been forced to take huge pay cuts in recent years, and they have watched 100,000 or so of their colleagues lose their jobs.But for many of them, the industry’s financial woes have taken another toll: a sense of love lost for the business. Some airline mechanics, for example, are fond of saying that they have jet fuel in their veins. For the Schalk family of Oceanside, N.Y., it even coursed through two generations. Until recently. Charlie Schalk, now 75, was a bank teller trainee when he enlisted in the Air Force in 1951 and was sent to Newfoundland and taught to fix planes. He took his new wife, Joan, along and became smitten with the DC-3s he was overhauling. After his service, he fell for the Boeing 707 while working at Pan Am. “I’ll never forget the day that screaming giant came rolling in,” Mr. Schalk said. “She was beautiful.” His three sons inherited his love of planes, and became airline mechanics, too. But as they approached middle age, the industry went into its steep downturn, and the joy they felt fixing planes turned to anger over the pay cuts, lost jobs and suddenly risky pensions. Each of the brothers vowed to start a new career.

NWA Unions Object To $2 Million Send-Off For Chairman

Northwest Airlines won’t get approval for its plan to leave bankruptcy without a battle over the legacy of the man who has been its chairman for the past 10 years. The airline’s unions expressed strong opposition Tuesday to a request Northwest made late Monday to pay Gary Wilson $2 million when he leaves the company’s board next month. Wilson, who sold more than $21 million of Northwest stock in the months leading up to Northwest’s 2005 bankruptcy filing, also would receive up to $75,000 a year for office expenses, lifetime medical and dental insurance coverage and lifetime travel privileges.

FAA: U.S. Airports Must Expand To Meet Demand (USA today

A number of major U.S. cities must expand existing airports in the next two decades, build new ones or find other solutions to meet an increasing demand for air travel, according to a federal report released Tuesday. The Federal Aviation Administration released the latest version of its study, titled "Capacity Needs in the National Airspace System." The report examined anticipated changes to airport capacity through 2025, and said city airports including Atlanta, Las Vegas, Chicago and San Diego need to expand soon. Against the backdrop of the world's busiest airfield, U.S. Secretary of Transportation Mary Peters on Tuesday praised Atlanta and Hartsfield-Jackson Atlanta International Airport for building another runway and new air traffic control towers. Peters also announced a $1 million grant to study further capacity expansion in Atlanta. "By 2025, cities like Atlanta, Las Vegas, Chicago and San Diego are going to risk the lost revenue, lost business and lost appeal that comes with chronic delay," Peters said. "Atlanta's leaders will have to embrace new airports and new ways of thinking." Federal Aviation Administration Administrator Marion Blakey said Tuesday that the current number of air passengers is "sounding a siren that must be responded to" with a regional approach.

United Ranks Last In Service

Bankruptcy can be a wake-up call for airlines about the need to run their operations more efficiently, but it also can shine a light on a more basic challenge, such as making customers happy. United Airlines and Delta Air Lines, both of which restructured under Chapter 11 in recent years, ranked last and next-to-last, respectively, among airlines in terms of customer satisfaction in a survey to be released Tuesday by the University of Michigan. Marks were only slightly better for American Airlines, which teetered on the verge of bankruptcy before winning employee concessions in 2003, and Northwest Airlines, which is in bankruptcy. "The first step in improvement here is to recognize that something is wrong," said Claes Fornell, a University of Michigan business professor and director of the research center that compiled the data. The airlines said they are working hard to improve the experience of their customers. United spokeswoman Robin Urbanski said the carrier knows it needs to do a better job giving customers what they expect.

Survey: Airlines Need Better Customer Ties

Bankruptcy can be a wake-up call for airlines about the need to run their operations more efficiently, but it also can shine a light on a more basic challenge like making customers happy. UAL Corp.'s United Airlines and Delta Air Lines Inc., both of which restructured under Chapter 11 in recent years, ranked last and next-to-last, respectively, among airlines in terms of customer satisfaction in a survey to be released Tuesday by the University of Michigan. Marks were only slightly better for AMR Corp.'s American Airlines, which teetered on the verge of bankruptcy before winning employee concessions in 2003, and Northwest Airlines Corp., which is currently in bankruptcy. ''The first step in improvement here is to recognize that something is wrong,'' said Claes Fornell, a University of Michigan business professor and director of the research center that compiled the data. The airlines said they are working hard to improve the experience of their customers.

Details Of NWA-Delta Merger Talks Still Secret

The details of preliminary merger discussions between Northwest Airlines and Delta Air Lines that occurred while both were in bankruptcy remained a secret Monday at the request of Northwest. U.S. Bankruptcy Judge Allan Gropper decided Monday that the bankruptcy examiner who explored that issue could file his report under seal. The examiner told Gropper that Northwest objected to the report being released to the public because it contains "highly sensitive business information." The examiner, Richard Nevins, was appointed by the court to assess how Northwest developed its projected valuation after a group of hedge funds argued that the airline had undervalued itself.

FAA Finds O'Hare Slip-Ups

Construction equipment blocked runway safety areas at O'Hare International Airport and severed power cables last year, creating potential collision hazards and knocking out navigation aids for pilots, federal inspectors have found. In one incident, work crews cut or crushed a utility line powering a vital safety system that warns pilots about dangerous wind-shear conditions close to the ground, according to Federal Aviation Administration documents obtained by the Tribune under the Freedom of Information Act. The documents indicate that FAA inspectors found numerous violations by the Chicago Department of Aviation, the O'Hare Modernization Program and O'Hare expansion contractors. The alleged infractions occurred between June and October 2006. "What occurred is unacceptable and it is not going to be tolerated," said Rosemarie Andolino, executive director of the $15 billion O'Hare expansion project. After an FAA construction inspection on June 23, the FAA issued a stern warning letter to Chicago Aviation Commissioner Nuria Fernandez.

Biggest U.S. Carriers Rescind $10 Fare Hike

The five largest U.S. airlines on Monday pulled back a $10 round-trip fare increase in domestic markets where they compete with discount rivals. US Airways became the first major carrier to withdraw the boost systemwide. American Airlines, United Airlines, Delta Air Lines, Continental Airlines and Northwest Airlines rescinded the increase in some areas after low-fare carriers, such as Southwest Airlines, didn't join in raising prices starting May 10. The pullback reflected the difficulty in making higher fares stick, with discounters available to about 78 percent of U.S. fliers, said LECG LLC economist Darin Lee in Cambridge, Mass. To stay competitive, airlines usually scrap increases that aren't matched by others. "The domestic markets don't seem to have the ability to sustain increases," said Neil Bainton of FareCompare.com, a Web site that tracks ticket prices. "It would be natural for them to go up at this time of year" as travel demand grows.

May 11, 2007

It was the first shareholder meeting for United Airlines in five years and might have been an event for employees to cheer the resurgent company's emergence from bankruptcy. Instead, it was a morning of labor unrest and drama, signaling what analysts predict could be a summer of discontent for airlines and travelers. About 400 United pilots, flight attendants and mechanics marched outside the main south entrance of Chicago's Field Museum, brandishing signs reading "Fix It Now" and "We Are United, They are Pigs" to protest a management team that union leaders contend is overpaid and out of touch with workers. At the meeting's close, when United Chief Executive Glenn Tilton walked past one group of 70 workers, uniformed pilots dropped their hats to the ground in a show of defiance, according to several different participants. "Certainly, a confrontation is brewing," said Roger King, airline analyst with CreditSights. Inside the meeting, Tilton responded to employee complaints, at times testily, while lauding the enormous improvement to parent UAL Corp.'s finances since 2002. The Chicago-based carrier has cut annual costs by $7 billion and turned 2002's $2.8 billion operating loss into a $447 million operating profit in 2006.

United Pilots Protest High Executive Salaries

Hundreds of United Airlines pilots and flight attendants demonstrated outside a shareholders meeting Thursday. They are not happy that executives are getting millions in compensation after the company has slashed the pay and the pensions of its workers. Thursday was an important milepost in United's history: its first shareholders' meeting after climbing out of bankruptcy. Its bosses say the airline is stronger, disciplined and focused on the future. But many of United's own employees say their bosses have lost sight of what made the climb from bankruptcy possible. They say they are spittin' mad. Their pay was dramatically cut. They've lost their pensions. And now their top bosses are getting compensation packages that United employees say defy the concept of shared sacrifice. "Of all the airlines that went into bankruptcy, no senior management team got as much out of a bankruptcy as United's people did," said Capt. Herb Hunter, United pilot/Union spokesperson.

UAL Corp. Chairman and CEO Glenn Tilton touted the once-bankrupt company's revival Thursday at the first shareholder meeting since 2002 for United Airlines' parent, but was partially upstaged by employees angry about executive pay.More than 200 pilots, flight attendants and other uniformed employees demonstrated outside the meeting and some inside challenged Tilton over what they see as excessive pay for the company's top managers and a shortage of personnel. "Employee morale is at an all-time low," said pilot Margaret Freeman, a 767 captain and 18-year veteran of United. "Your employees are no longer behind you" -- a remark that drew loud applause from some of her co-workers. Tilton, who oversaw the three-year bankruptcy restructuring that made United a smaller, more cost-effective airline, said employee morale matters but pointed to the airline's financial success and comeback from the brink of liquidation as a higher priority.

JetBlue's Leader Is Giving Up CEO Title

Everyone takes things personally, but David G. Neeleman is that rare corporate executive who admits to those feelings. Yesterday, after months of being beaten up over the February service meltdown at the company he founded, JetBlue Airways, Mr. Neeleman heeded the urgings of his board and reluctantly agreed to step aside as chief executive. Dave Barger, chief operating officer and longtime No. 2 at the airline, was named the new chief executive. Mr. Neeleman — one of the more unusual leaders in corporate America, who talks often of his Mormon faith and the attention deficit disorder he suffers from — vowed to stay on as chairman, working full time on industry and regulatory issues and some long-term strategic matters for JetBlue.

Delta Developing LAX As 'Future Hub'

Delta Air Lines said Wednesday it will add 21 new daily flights at Los Angeles International Airport, which it plans to turn into a future hub for service to Asia and Latin America. With the expansion, which begins July 1, Delta will have up to 100 daily departures to 48 cities from Los Angeles. The new Delta flights, which will be operated by regional partner Express, connect L.A. with cities such as Denver, Phoenix and Boise. The new flights will be served by ExpressJet's 50-passenger planes, which will be flying as a Delta Connection carrier. ExpressJet said it will be responsible for pricing and revenue management on the flights and maintenance of the planes. The arrangement limits Delta's risks on the new routes.

NWA To Senate: Don't Delay Pilots' Retirement

In a rare partnership, Northwest Airlines Corp. and the Air Line Pilots Association are lobbying to stop legislation that will alter the age restriction on active pilots. In a letter to Senator Bob Corker (R-Tenn.), NWA CEO Doug Steenland and ALPA's David Stevens write that they're strongly opposed to the legislative proposal to replace the Age 60 Rule for pilots. The proposed Age 65 Rule will replace one arbitrary age limit with another with no criterion-based process for determining pilot fitness, the two state in the letter. In addition, the new age restriction may jeopardize safety. NWA and ALPA claim there's no medical evidence to support later retirement for pilots. If passed, the rule will delay the retirement of numerous pilots, they say, and consequently delay the promotion of younger pilots. Northwest employs about 1,500 in its Memphis hub.

Delta Launches New Ad And Marketing Push

Fresh out of bankruptcy, Delta Air Lines is launching a new marketing campaign that amounts to a "pardon our dust" apology to customers and a promise to improve their travel experiences. The new campaign includes a minute-long TV commercial that starts Monday and seeks, in fast-changing snippets of video, to tell the story of the carrier's rebirth since the financial crisis that pushed it into Chapter 11 in late 2005. "We felt like the best message we could communicate to them is we have been changing ... and we will continue to change," said Jennifer Martin, director of global advertising and sales support for Delta. "We wanted to be really real and really human with our customers." The TV ad also will air in a 30-second version, and it will be accompanied by print ads. The campaign was created by New York ad agency Shepardson Stern & Kaminsky, which replaced Ogilvy & Mather as Delta's primary agency a year ago. SS+K previously was the agency for Delta's defunct low-fare unit, Song.
US Airways Had A Pretty Tardy March

In a bad March for the industry generally, US Airways registered the worst performance for the month among large airlines, U.S. Department of Transportation numbers out Monday show. Tempe, Ariz.-based US Airways ran just 56% of flights on time in March, vs. 73% for the industry as a whole. Among the major carriers, US Airways also had the worst baggage mishandling rate and the highest rate of complaints from passengers. US Airways' operations broke down at key airports on March 4, the day it switched to a new computer reservations system. The product of a September 2005 merger between America West and the old Virginia-based US Airways, the breakdown occurred as the airline implemented a long-planned shift to a single reservation system. The switch caused many US Airways airport check-in kiosks to crash, causing long lines of passengers waiting to check in for flights or to check bags. In mid-March, spring snowstorms, particularly in the East, complicated operations for airlines as the busy spring break season was getting underway.

Attachments

Monday April 16, 2007

United Unions Oppose Nominees Over Pay

The unions representing United Airlines pilots and flight attendants urged their members who hold stock in parent UAL Corp. to oppose the company's nominees for the board of directors, angered by the rich bonuses and stock awards granted top executives. The two unions said they are taking a stand against the election of the 10 nominees for independent directors, who include Chairman and Chief Executive Glenn Tilton, at the company's May 10 annual meeting. "The significant bonuses and stock increases awarded senior management clearly violates the concept of shared sacrifice/shared rewards that all employees expected after the turmoil of bankruptcy," the United chapter of the Air Line Pilots Association said in a statement. UAL said in a regulatory filing last month that Tilton received compensation worth $39.7 million in 2006, its first year as a standalone company after emerging from three years of bankruptcy protection. The bulk came in the form of stock and option awards granted in February, including an award the company valued at $20 million when it was issued Feb. 2, one day after UAL emerged from bankruptcy.

FAA Bans Disputed Landing Procedure

The Federal Aviation Administration has ordered a halt to a controversial practice in Memphis that allowed arriving aircraft to fly directly over planes on another runway. The procedure, disclosed by USA TODAY on Friday, had nearly led to midair collisions. Starting today, the agency will direct controllers to space out arriving flights at Memphis International Airport so that planes about to land no longer pass directly over flights that have just touched down on a nearby runway, FAA spokeswoman Laura Brown said. Pilots and controllers, who had sought for months to end the practice in Memphis, applauded the decision. "It certainly would be an improvement over what we're doing now," said Pete Sufka, president of the Memphis chapter of the National Air Traffic Controllers Association. "It would be much safer."
Airlines Running Scared

As a spring snowstorm barreled toward Denver on Thursday, airlines canceled more than 140 flights scheduled to arrive at or depart from DIA that evening and Friday morning. The only problem: The storm skipped over the Mile High City, meaning the flights likely could have gone ahead as scheduled. In the meantime, an estimated 10,000 passengers were left trying to reschedule their flights. Is this the new airline policy in which flights are canceled at the hint of snow? And how does this bode for a city that can often be blanketed in snow? "There is no exact science to canceling flights," said Darryl Jenkins, a Virginia-based airline consultant. "You can never forecast with 100 percent accuracy, so this becomes an incredible experiment in making decisions under uncertainty."
Delta Pilots Take Cash Over Stock

More than 90 percent of Delta Air Lines pilots decided to cash in their claims rather than take new stock in the airline after its expected emergence from bankruptcy court later this month. The move means pilots will get checks averaging about $186,000, probably in the first couple of weeks of May, as compensation for deep pay cuts and other concessions their union agreed to almost a year ago. In a letter to pilots Thursday, Air Line Pilots Association Chairman Lee Moak said the union sold 92 percent of a $2.1 billion unsecured claim at pilots' request. The resulting $1.16 billion — which works out to 60 cents for each dollar of claims — will be divvied up among roughly 6,200 pilots who opted to cash out, the union said. Payouts are based on seniority, pay rates and other factors.
Outgoing Delta CEO Looks Back

Gerald Grinstein, the chief executive officer of Atlanta-based Delta Air Lines Inc., spoke in a recent interview with The Associated Press about a wide range of issues related to his tenure at the carrier.

April 13, 2007

U.S. Hopes For 'Open Skies' Deal With China By May

The United States is confident it can reach an agreement with China by May on broadening airline service between the two countries, U.S. Secretary of Transportation Mary Peters said on Friday. Peters told reporters in Beijing that her trip was aimed at laying the basis for an aviation liberalization deal that could hopefully be finalized when Washington hosts the next round of their ``strategic economic dialogue'' (SED) in May. ``I do believe that we can reach a meaningful agreement by May at the next SED event and then consummate that agreement, we would hope, by the end of the calendar year,'' Peters said. She said the United States was hoping the agreement could eventually resemble one it reached with the European Union last month. That deal permits carriers to fly from any city in the EU to any city in the United States and vice versa.
Deadly Spring Snowstorm Grounds Flights

More snow fell across the northern states Thursday as a deadly storm that already had grounded hundreds of flights, postponed a baseball game and disappointed those longing for the warmth of spring moved east. A jet trying to land at Traverse City, Mich., skidded 50 feet off a runway in the heavy snow early Thursday. The plane remained upright, and the 46 passengers and three crewmembers were unhurt, Pinnacle Airlines spokesman Phil Reed said. In Chicago, more than 550 flights were canceled at O'Hare International Airport because of poor visibility on Wednesday, though operations were mostly back to normal Thursday, said city aviation spokesman Gregg Cunningham. Colorado was expecting the worst of the storm Friday, when up to 18 inches of snow was expected to fall in the Rocky Mountain foothills. Denver International Airport brought contractors in early to help move snow. United Airlines canceled 80 flights Thursday night and 40 Friday morning ahead of the storm and was rebooking passengers, spokesman Jeff Kovick said.
Airlines Carried More Passengers in January

The number of passengers flying on U.S. airlines rose from year-ago levels for the fourth straight month in January, according to a government tally released Thursday. The Transportation Department's Bureau of Transportation Statistics said U.S. airlines carried 57.1 million passengers in January, up 2.8 percent from the same month last year. American Airlines carried 7.7 million domestic and international passengers in January, the most of any airline. American beat out Southwest Airlines Co., which carried 7.3 million passengers. Rounding out the top five were Delta Air Lines Inc., UAL Corp.'s United Airlines and Northwest Airlines Corp. Southwest remained the top domestic carrier, followed by America, Delta, United and Northwest. Shares of Southwest dipped 4 cents to close at $15.20 in afternoon trading Thursday , while American parent AMR Corp. fell $1.62 cents, or 5 percent, to $30.68, both on the New York Stock Exchange. Shares of United Airlines parent UAL Corp. dropped 32 cents to $42.25 on the Nasdaq Stock Market.

April 10, 2007

Delta, Northwest Shares Poised To Be At Head Of Pack

Delta Air Lines Inc. and Northwest Airlines Corp. are set to emerge from bankruptcy as two of the highest valued airlines in the United States, but softening travel demand and rampant competition could send them crashing down again. After a year and a half in Chapter 11, Delta and Northwest will issue new shares within weeks of each other and test Wall Street's appetite for airline stocks. The timing is good with resurgent demand fueling profits in the industry for the first time in years. The Amex airline index shot up about 36 percent between August and January, but in the last three months, the sector has given back some of those gains, falling 14 percent. Despite the recent solid performance, airline stocks often end up worthless -- there have been more than 160 bankruptcies since the U.S. airline industry was deregulated in 1978 -- and skepticism is high. ``These are not buy-and-hold stocks,'' said Brian Nelson, an airline analyst with Morningstar. ``Unless you're a speculator, trader, or a technician, you shouldn't be involved in these stocks.''

Creditor Filings An Obstacle For Delta

Delta Air Lines executives remain confident the carrier will emerge from bankruptcy later this month, though more than a dozen creditors filed objections to its restructuring plan by a Monday deadline. Among them was the Georgia Department of Revenue, which complained in a court filing Monday that Delta's plan leaves it uncertain when the carrier will satisfy claims related to $62.9 million in unpaid withholding, corporate, sales and other taxes. A lawyer for the agency declined to comment on the filing, which mainly expresses concern about the timing and method of repayment. Delta spokesman Kent Landers said such "procedural" objections are not unusual, adding, "We hope to resolve this and other objections." Monday also was the deadline for creditors to vote on Delta's plan, which calls for the carrier to emerge from Chapter 11 on April 30. Delta doesn't expect to release results of the voting for another 10 days or so. An April 25 hearing is scheduled in Delta's New York bankruptcy court, where Delta will ask its judge to confirm the plan.

US Airways Expects Small Profit After Problematic First Quarter

US Airways expects to post a small profit in the just-ended first quarter, despite a trio of problems that plagued the airline's operations. The Tempe airline, which posted some of the industry's best profits last year, said late Friday that a mid-March ice storm and a botched reservations-system changeover hurt revenue and expenses in March. February results also were negatively impacted by an ice storm.
"From an operational standpoint, we are happy to have the first quarter of 2007 behind us," President Scott Kirby said in a statement. The airline's stock was off sharply in early trading Monday, but rebounded and closed up 1.6 percent, at $47.81. US Airways didn't provide specifics on its first-quarter results, which will be reported later this month. Wall Street analysts, though, quickly slashed their earnings estimates based on the airline's general cost and revenue comments. Several now expect earnings of between 10 and 15 cents per share, excluding special items. That's down from previous estimates as high as $1 a share and a consensus estimate of 68 cents per share.
Mesaba Bankruptcy Exit OK'd

U.S. Bankruptcy Judge Gregory Kishel approved Mesaba Airlines' reorganization plan Monday, clearing the regional carrier to exit bankruptcy during the last week of April. Kishel said that he watched the toll on employees who lost their jobs when the steel industry declined and that he did not want to see Mesaba "go down on my watch." Mesaba employs about 3,200. The carrier filed for Chapter 11 in October 2005 -- a month after Northwest Airlines entered bankruptcy. Northwest was Mesaba's sole customer, and the big carrier had skipped payments to Mesaba and later cut Mesaba's fleet in half. Northwest's actions prompted Mesaba to file for bankruptcy, but now it is Northwest that is allowing Mesaba to remain a viable business by buying it and structuring a deal acceptable to Mesaba's creditors and owner.

Airlines Filling More Seats

Most of the USA's biggest airlines operated their planes fuller last month than in any previous March, virtually snuffing out hope among passengers for an empty middle seat to sprawl across. American, Delta, Continental and United last week each reported their highest-ever percentages of filled seats for March. US Airways (LCC), the product of a late-2005 merger, filled a higher percentage of seats last month than in March 2006, the only comparable month. Northwest was close to a record March. Each airline ran more than 80% full on average, meaning that many flights on the most popular routes at the most popular times ran full. As the big airlines have clawed their way out of the deep financial losses that followed terrorism and recession earlier in the decade, they've aggressively moved to fill every seat possible with a paying passenger. In March, spring break vacationers and bad weather jammed even more people than normal into planes.

March 27.2007

United Could Add Flights To London

United Airlines will reconsider the possibility of adding flights between Denver and London in light of a new agreement that partly liberalizes trans-Atlantic travel. The agreement, approved Thursday by the European Union, relaxes most restrictions on service between the U.S. and Europe. United expressed some interest two years ago in flights from Denver to London's Heathrow Airport but said its hands were tied by those restrictions. Now, though, "the regulatory barriers to Denver-Heathrow service have been removed," said Michael Whitaker, United's senior vice president of alliances, international and regulatory affairs. "For competitive reasons we're very careful not to discuss new routes . . . but we're certainly going to look at new opportunities" in Denver and elsewhere.
Air Treaty With EU A Boost For Delta

Delta Air Lines and other proponents hailed a deal to liberalize the trans-Atlantic airline market, saying it will both boost airlines' bottom lines and drive down prices for consumers. European Union transport ministers unanimously approved the long-sought "open skies" agreement with the United States at a meeting in Brussels, Belgium, but delayed the pact's effective date from this Oct. 28 until March 28, 2008. The agreement will allow EU airlines to fly from any city in the 27-nation bloc to the United States and vice versa, replacing extremely limiting air treaties that date back 60 years. U.S. airlines will also be able to continue flights within the EU after arriving from the States, while European carriers will still be barred from flying domestic U.S. routes.

Are Extra Fees In Southwest's Future?

Discount king Southwest Airlines, appreciated by fliers for not charging the kinds of fees common at other carriers, may start charging for extra services. CEO Gary Kelly says the airline needs to generate more revenue without "nickel-and-diming our customers" or raising fares again. "Things will be different in the future," he said in a speech last week at an investors conference. Kelly was mum on specifics. But he said that Southwest's operating costs have jumped 25% in the past five years because of higher fuel prices, and that it needs to generate more revenue to offset those and other rising costs. Southwest's year-over-year revenue rose only 1% in January and February. After six price increases last year, Southwest's average one-way fare is now $104, a record high for the airline. Jim Parker, a Raymond James & Associates analyst who closely follows Southwest, says it will have to change. In a report, he says that Southwest, which does not assign seats now, could soon start using technology to sell assigned seats for an extra $10 to customers who want them.

FAA Promotes Runway Navigation System

The Federal Aviation Administration said Friday it plans to adopt new rules that would make technology used to prevent runway accidents more affordable for airlines. The agency, responding to industry criticism about the high cost and complexity of certifying the technology, said the move would reduce the cost of installing global positioning systems used to navigate runways by roughly 90 percent, or $180,000 per device. The FAA said the new policies for certifying the systems, which can be installed on most planes, should be in place by late April. "Aviation is about to have a breakthrough application of a very familiar technology, something that could change how pilots safely navigate runways -- the way GPS changed the way we drive cars," said Marion Blakely, administrator of the FAA.
Originally, the devices were intended to be used while in flight and on the runway, but "the certification process has proven very difficult and very expensive for manufacturers," Blakely said. Under the new rules, carriers will only be allowed to use the devices on the runway.
Airline Sees Role of DIA Growing

Denver International Airport has not yet become a big transfer spot for cross-country travel on Southwest Airlines, but it will eventually, predicted Southwest chief executive Gary Kelly. "There's not enough flight activity yet to really envision it that way, but as time goes by and we have more flights, it will be a natural connection point, geographically," Kelly said. "So that certainly enhances our ability to continue to add more flights here." Southwest's Denver flights are not as full as they were after the carrier first started flying to Denver in January 2006, Kelly acknowledged. "Our load factors are down only because we've added more flights and we simply haven't absorbed those new flights yet," Kelly said. "What we're doing is growing the market." Southwest will continue to add flights in Denver this year, but Kelly is hesitant to make a firm commitment on new gates to be built at Denver International Airport. Other airlines may compete for the eight or more additional gates DIA plans to build on Concourse C, where Southwest operates.

March 22. 2007

United Sees Expansion Outside U.S.

United Airlines will continue to look outside the U.S. for future growth, focusing on new flights to other countries rather than on domestic routes. "The growth opportunities tend to be international," Jake Brace, United's chief financial officer, said Wednesday during a JPMorgan Chase & Co. transportation conference in New York. "We don't think that it makes a lot of sense to add capacity in the domestic market." United scaled back domestic flights significantly during its recent three-year bankruptcy. The company, which emerged from Chapter 11 in February of last year, focused its growth internationally where it faces less competition. United, the nation's second-largest carrier and the dominant airline in Denver, thinks it can "average up" its profit margins by adding even more routes to regions such as Asia, Brace said. That strategy could get a boost from tentative plans to open up air travel between the U.S. and the European Union.
United Fined Nearly $400K For Air Quality Violations

Regional air-quality regulators fined United Airlines nearly $400,000 for ignoring pollution requirements and failing to ensure properly functioning filtering equipment at its maintenance facility. The $382,500 fine was meant to discourage "careless" behavior by United and other major companies, said Alexander Crockett, assistant counsel for the Bay Area Air Quality Management District. The agency said Tuesday that United had agreed to pay the fines as part of a settlement. The payment stems from a series of air-quality violations at the airline's San Francisco International Airport maintenance facility, from September 2003 to the middle of 2005, according to the air district. More than half the fine stemmed from United's failure to ensure the proper functioning of an exhaust system meant to clean the air during the chrome-plating of airplane parts, the air district said. United technicians operated the exhaust system improperly for eight months and failed to fix it for several more months after inspectors pointed it out, it said. The violations "showed a pattern of disregard for some of the basic features of United's air quality permit," air district counsel Brian Bunger said.

A Flight Plan Through Open Skies

If the air transport agreement is approved, as expected, many rules on Europe and the U.S. will be lifted. But does it favor U.S. airlines? On Mar. 22, European Union transport ministers are expected to approve a deal to liberalize air travel between the European Union and the U.S. If approved, the Open Skies air transport agreement will remove restrictive rules on flights across the Atlantic and end three decades of fierce political wrangling between Europe and the U.S. Despite the apparent progress, the issue is still highly contentious and complicated. Proponents of the deal say it will increase competition in a market currently worth $18 billion, drive down fares, create new jobs, and boost economic growth. But there remain critics on both sides of the Atlantic. Europeans charge that the treaty is biased in favor of the U.S., and both Europeans and Americans complain about the lack of clarity on legal restrictions to foreign ownership of U.S.-based airlines.

UK May Vote Against Transatlantic Air Pact: Sources

Britain will vote against a transatlantic aviation deal between the European Union and the United States unless two key conditions are met, industry sources said on Wednesday. EU transport ministers meet in Brussels on Thursday to decide whether to approve a draft EU-U.S. ``open skies'' agreement aimed at liberalising transatlantic air travel, which comes after years of negotiations. London has reservations about the deal. It wants guarantees Washington will negotiate a follow-up agreement giving European airlines more freedom to invest in U.S. airlines and operate domestic U.S. flights. One industry source said Britain wanted a delay in implementation of the ``open skies'' deal until March 2008 and automatic termination of the deal if the United States was not negotiating on a second-phase agreement by 2010.

Boeing 747-400 Officially Out Of Production

With the stroke of a pen, the production life of the Boeing 747-400
passenger jet came to an abrupt end last week, but it’s hardly the
end of the line for the aircraft family that started the jumbo
movement in 1969. According to the Seattle Post-Intelligencer, Boeing
technically had four more -400s to build but it appears Philippine
Airlines changed its order and asked for 777s instead. That brought
the 747-400 line symbolically to an end (about 450 were delivered),
but there are dozens and perhaps hundreds of other types of 747s on
the order books that will keep the folks in Washington state busy for
years to come. Boeing still has freighters to build while
it develops the 747-8, a modernized version of the jumbojet that uses
a new wing and the efficient engines developed for the 787
Dreamliner. There are about 60 orders for the freight version of the
747-8 and Lufthansa has placed an order for 20 passenger versions,
called the Intercontinental, which will seat 466 peop

Continental Airlines Inc. and AMR Corp.'s American Airlines are balking at providing extra rest periods and other special safety measures for pilots who fly their longest international routes, four months after rival Delta Air Lines Inc. agreed to such steps, industry and government officials said in The Wall Street Journal. The crux of the argument is over the amount of rest necessary for pilots once aircraft arrive overseas. Airlines that keep pilots sitting idle for shorter periods at foreign destinations could enjoy significant labor-cost savings, thereby gaining a competitive edge over rivals. On the other hand, pilot unions and other critics worry the result may be an erosion of safety margins if tired crews have to cope with unusual or emergency situations.

Delta Workers Get Cash For Sacrifice

After weathering years of cutbacks and anxiety, a typical Delta Air Lines ground worker or flight attendant will get nearly $13,000 in cash and stock when the airline emerges from Chapter 11 this spring, the company said Monday. The payouts are part of a post-Chapter 11 compensation plan that Delta says puts more money and benefits into the hands of rank-and-file workers — and less into the hands of top executives — than in most bankruptcy cases. Delta is expected to file details of the plan today in bankruptcy court. The airline also plans to raise base pay levels on July 1 — the first in a series of raises intended to bring levels to "industry standard." Top-scale rates will rise 4 percent, with amounts varying at other levels. Meanwhile, Delta Chief Executive Gerald Grinstein has declined any payout other than his $338,000 salary, and said Monday he plans to earmark any extra financial rewards he might have gotten to two new charitable funds to help needy employees and give scholarships to their kids. The other executives among Delta's top five get stock grants and other perks valued at about $29 million over several years. Still, Delta says that's well below what executives got at United Airlines and other large companies after they emerged from bankruptcy. Describing the plan Monday in advance of the filing today, executives said Delta's internal trauma over a 2003 executive pay and bonus controversy did not drive the structure. But they acknowledged it was colored by the "sensitivity" over top executive pay.

• Amounts that Delta employees will get

Delta Says Top Executive Won't Receive Stock Package
Delta Air Lines said yesterday that its chief executive, Gerald Grinstein, who has shepherded the carrier through reorganization, would not receive any stock, incentive payments or severance when the company exits bankruptcy protection this spring. Mr. Grinstein, 74, is expected to retire once a new board chooses a chief executive. His two top lieutenants, Edward H. Bastian, chief financial officer, and James M. Whitehurst, chief operating officer, will each receive stock packages valued at $8.4 million that include restricted shares, options and share grants tied to performance, Delta said. The stock compensation vests over three years. The packages announced yesterday are aimed at returning to employees some of the compensation lost through pay cuts and to give workers an incentive as Delta exits bankruptcy, possibly as early as next month.
NWA Flight Attendants Demand Data On Exec Pay

Northwest Airlines flight attendants objected on Monday to the airline's failure to disclose how much its executives and directors will be paid when it comes out of bankruptcy protection this year. Northwest filed financial details -- called a disclosure statement -- for its reorganization plan on Feb. 15. But it left out the part about executive pay and stock in the reorganized airline, saying those details would be filed later. The Association of Flight Attendants argued in a bankruptcy court filing on Monday that it's impossible to evaluate Northwest's reorganization plan without knowing how much executives and directors will be paid, and how directors will be selected.

O'Hare Awaits Big Bird

East winds forecast for Tuesday will probably keep the world's largest passenger plane miles away from Boeing's downtown Chicago headquarters when the Airbus A380 flies over Lake Michigan and lands at O'Hare International Airport for the first time. Still, the European-built super-jumbo jet is making its presence felt as forcefully as the turbulence it creates while slicing through the air.
Thousands of people lined up to catch a glimpse of the double-decker's maiden test flights to the U.S. by Lufthansa Airlines and Airbus when virtually identical super-jumbos landed within minutes of each other at Kennedy International Airport in New York and Los Angeles International Airport. The giant aircraft was greeted in New York by a media horde and a throng of onlookers in and around Kennedy. The airplane glided in quietly, the roar of its four engines seemingly drowned out by the whirring of shutters of the more than 100 reporters and cameramen who were bused out to a taxiway.
On The Road Column

Airline Moves Dead Body To First Class

A first-class passenger on a flight from Delhi to London awoke find the corpse of a woman who had died in the economy cabin being placed in a seat next to him, British Airways said Monday. The economy section of the flight was full, and the cabin crew needed to move the woman and her grieving family out of that compartment to give them some privacy, the airline said. The first-class passenger, Paul Trinder, told the Sunday Times newspaper that he was sleeping during a February flight from India and woke up when the crew placed the dead woman in an empty seat near him. "I didn't have a clue what was going on. The stewards just plonked the body down without saying a thing. I remember looking at this frail, sparrow-like woman and thinking she was very ill," the newspaper quoted Trinder as saying. "When I asked what was going on, I was shocked to hear she was dead." British Airways said in a statement that about 10 passengers die each year in flight and that while each situation is dealt with on an individual basis, safety is paramount.

Mar 16, 2007

UAL Chief Says Industry Mergers Still Possible

A failed bid by US Airways Group Inc. for bankrupt Delta Air Lines Inc. has not dimmed the outlook for airline mergers, the chief executive of UAL Corp.'s United Airlines said on Thursday. ``Nothing has changed, as far as I am concerned in the context of the case for consolidation,'' Glenn Tilton told reporters after a speech to a Federal Aviation Administration conference. Some experts have forecast there would be less pressure on airlines to merge after US Airways failed in its hostile takeover attempt of larger Delta. Tilton, who runs the second-largest U.S. airline, has long been an outspoken advocate for consolidation in a fiercely competitive industry where low-fare companies have put enormous pressure on bigger rivals, such as United, to overhaul their businesses.
House Members Cool To Open Skies

The chairman of a House transportation panel said he doesn't support the draft aviation agreement the United States and European Union reached earlier this month.
Rep. James Oberstar, D-Minn., chairman of the committee on Transportation and Infrastructure, said in a March 14 letter to Transportation Secretary Mary Peters that the agreement "is ambiguous" on whether greater foreign control of U.S. airlines will be permitted. "Without further assurance that the law ... on foreign control of U.S. airlines will not be changed, we cannot support the agreement," the letter said. Reps. Jerry Costello, D-Ill., and Frank LoBiondo, R-N.J. also signed the letter. The letter did not threaten legislation to block the pact, but said that if the agreement is finalized, the three members would consider legislation to block individual deals approved by the Transportation Department if those deals allow greater foreign control of U.S. airlines.

JetBlue Cancels Dozens Of Flights

JetBlue canceled 215 flights Friday because of a winter storm on the East Coast, aiming to avoid the days of cancellations and criticism that followed a storm last month, an airline spokesman said. The cancellations affected about one-third of all JetBlue flights. More than 200 of them involved flights to or from New York's John F. Kennedy International Airport, said company spokesman Sebastian White. He said a few flights also were affected at New York's LaGuardia Airport, Newark Liberty International Airport in New Jersey, and Boston's Logan International Airport. In addition, the airline had canceled 15 flights Thursday night, White said. The storm is expected to dump more than a foot of snow on parts of the Northeast.
--Related Story

Airlines Going First Class At DIA

Dozens of additional ticketing kiosks. Extra curbside check-in stations. New boarding lanes for elite frequent fliers. Travelers will notice some big changes at Denver International Airport this summer, at least if they're flying on one of the city's two largest carriers. United Airlines and Frontier Airlines, which account for more than 75 percent of DIA's passenger traffic, are upgrading their ticketing areas and adding other amenities in Denver. The moves will help speed up check-in and boarding, enhance customer service, lower costs and, ideally, boost revenues.

March 11, 2007

European Union Urges Britain Not To Scuttle Open-Skies Agreement

European transportation officials urged Britain Wednesday not to scuttle a landmark deal on trans-Atlantic air travel because of opposition by its biggest carriers to opening up Heathrow Airport, which serves London. Officials expressed dismay over remarks by the British transport secretary, Douglas Alexander, who implied this week that London would not support the draft “open skies” agreement, announced Friday, in its current form. “Seeing the importance of this issue, we sincerely wish for a consensus agreement,” said Michele Cercone, a spokesman for the European Union transport commissioner, Jacques Barrot. “Mr. Barrot will certainly be working toward having that consensus.” Less than a week after the European Union and the United States announced a breakthrough agreement to open up air travel, British Airways and Virgin Atlantic, which stand to lose from increased competition on lucrative trans-Atlantic routes, have begun an intense effort to quash the deal ahead of a vote by European transport ministers this month.

DIA Bats Its Eyes Overseas

Nonstop international flights are sought- after jewels for airports - enticements that deliver more business travelers and commerce. Denver International Airport offers a relatively paltry selection of nonstop international flights overseas, serving only London and Frankfurt, Germany, with direct routes. But DIA and economic-development officials are giddy about the prospects of the airport's first Denver-Munich route that will begin operating to the German city March 31. They say the nonstop flight will enhance Denver's ability to lure business travelers, companies on the move and cargo business.

AMR Looks On The Bright Side

American Airlines isn't happy about last week's tentative agreement to lift many restrictions on trans-Atlantic flying, but CEO Gerard Arpey said the carrier could benefit if regulators alter the way they view global alliances. Because American, a unit of AMR, is one of just two U.S. carriers at London Heathrow, "more airlines into Heathrow by definition is not a good thing," Arpey said Thursday during an investor conference. "But I do see an opportunity in all this [because] one of our objectives for a long period of time has been to get antitrust immunity across the Oneworld alliance," he continued. Oneworld is a group that includes American, British Airways, Qantas, Cathay Pacific and other airlines. The pact is meant to make it easier for fliers to use various carriers during their travels.
Airline Industry Expects To Turn Profit

The airline industry will turn the corner and show a small global profit of $2.5 billion this year, a top industry executive said Friday in Seattle. "Airlines have done an amazing job at lowering costs and reinventing themselves, but challenges remain," said Giovanni Bisignani, inspector general of the International Air Transport Association, which represents about 250 of the world's biggest international airlines. He said new jets such as Boeing's 787 Dreamliner and the Airbus A380 will help airlines be more profitable because the planes are much more fuel-efficient than current jetliners. "The theme for 2007 and beyond will be efficiency, efficiency and more efficiency," he said in a speech to the Seattle Trade Development Alliance.
Since 2000 the airline industry has lost more than $40 billion.

March 1, 2007

Flight Turns Into An 8-Hour Ordeal

The trouble with United Airlines Flight 907 started small. A last-minute switch to a smaller aircraft on Saturday meant some passengers who had traded frequent-flier miles for first-class seats found themselves downgraded to coach. A few were angry—very angry. Boarding halted while the matter was straightened out. Tempers soothed. And as the last passengers stepped onto the full airliner bound for San Francisco, the first snowflakes—ice pellets, really—started to fall at Chicago's O'Hare International Airport. That small glitch, United says, was the difference between leaving before a snow-and-ice storm raked O'Hare and getting caught in the mess that ensued. No flight fared worse in that storm than UA907. The Boeing 757 languished on the tarmac for seven hours before the pilots finally canceled the flight. It took another agonizing hour to get the plane back to the gate, where exhausted and frustrated passengers stumbled off the jet after midnight. What is striking is that United's marathon flight to nowhere occurred as the airline industry pledged to take better care of grounded passengers after a Feb. 14 storm left JetBlue Airways passengers stranded on planes at New York's John F. Kennedy International Airport for up to 10 hours.

UAL Joining The NASDAQ 100 Index

UAL Corp., the parent of United Airlines, said Thursday it is joining the Nasdaq 100 Index next week. The company, which will replace American Eagle Outfitters Inc. March 8 as a component of the Nasdaq 100 Index, Nasdaq 100 Equal Weighted Index and Nasdaq 100 Ex Technology Index. UAL also will join the Nasdaq 100 Index Tracking Stock, which represents ownership in the Nasdaq 100 Trust. The trust holds a portfolio of equity securities that comprise the NASDAQ 100 Index and aims to provide investment results that generally correspond with the performance of the index.

Pilots Sue US Airways Over Merger

The pilots union at US Airways filed a lawsuit against the Tempe airline Wednesday, alleging that the airline is trying to get the full benefits of the America West-US Airways merger before it negotiates new union contracts. It is the second lawsuit this week filed by one of the airline's unions, with both stemming from frustration over the lack of progress in contract negotiations. The latest lawsuit, filed in U.S. District Court in Philadelphia, seeks to prevent the airline from merging the America West and US Airways reservations systems. The critical changeover, scheduled for this weekend, will result in some computer-code changes that the pilots say will allow US Airways to more easily operate as a single airline and reap merger savings. The union says federal labor law and an agreement the two sides signed after the 2005 merger prevent a full integration until a single contract is reached.

Keeping NWA Flights Moving

The forecast was filled with ice and snow when Sue Hamre-Smith arrived at work at 3:45 a.m. last Saturday at Minneapolis-St. Paul International Airport, long before the Northwest Airlines passengers who would rely on her efforts so they could escape winter's brutality for Mexico, the Caribbean or elsewhere. Hamre-Smith's duties at Northwest are akin to quarterbacking a chaos-prevention team. Her title is director of System Operations Control, the nerve center of Northwest's flight operations, where dispatchers, planners and others decide how to keep the airline running in foul weather.

Midwest CEO: AirTran's Business Is 'Deteriorating'

AirTran Airways' takeover bid for Midwest Airlines is a desperate move to shore up its own "deteriorating" business, Midwest's chief executive said Wednesday. "AirTran's low-cost business model is in trouble," Midwest CEO Timothy Hoeksema said in a letter to his company's shareholders. "By virtually any metric, AirTran's business is deteriorating. AirTran is desperate to buy Midwest and stave off further erosion of its business." The letter, which contained Midwest's sharpest rhetoric yet in the takeover battle, came after AirTran on Monday laid out plans to build a Milwaukee hub if the takeover succeeds. AirTran, which has its main hub in Atlanta, promised a 215-flights-per-day hub in Milwaukee that would significantly boost the city's air service and add jobs and activity to the local economy.
Tad Hutcheson, AirTran Holding's vice president of marketing, called Hoeksema's comments "out of line," adding that AirTran has been profitable for the last eight years in a turbulent market.

Feb 28, 2007

Airline Workers Face More Checks

Airline passengers are no longer the only people getting extra scrutiny at the city's two airports. A new program steps up the screening of airport workers, the federal transportation security chief in Chicago said Tuesday. The move is aimed at closing a security loophole in which workers such as city employees, food vendors and delivery truck drivers did not face random inspections before being admitted to secure areas of O'Hare International and Midway Airports, including onto the airfield, officials said. Pilots, flight attendants and passengers have long been required to pass through X-ray machines and have carry-on items scanned for weapons and other prohibited items. Those security checks intensified after the terror attacks against the U.S. in 2001.

Labor Language Threatens Antiterror Bill

President Bush and his Senate allies will kill a Sept. 11 antiterror bill if Congress sends it to the White House with a provision to let airport screeners unionize, the White House and 36 Republicans said Tuesday. ''As the legislation currently stands, the president's senior advisers would recommend that he veto the bill,'' said White House spokesman Scott Stanzel. Senate Republicans swiftly backed up the threat with a pledge by more than enough senators to block any veto override attempt. ''If the final bill contains such a provision, forcing you to veto it, we pledge to sustain your veto,'' they wrote to the president. Sen. Jim DeMint, R-S.C., planned to offer an amendment to strip the provision from the bill.

Transportation Secretary To Review Airline Policies

The decision by JetBlue and American Airlines to leave passengers stranded aboard planes for several hours this winter during storms has led the Transportation Department's top official to call for an investigation. "I have serious concerns about airlines' contingency planning that allows passengers to sit on the tarmac for hours on end," Transportation Secretary Mary Peters said Tuesday in a statement. "It is imperative that airlines do everything possible to ensure that situations like these do not occur again." Jenny Dervin, a spokeswoman for the Forest Hills-based JetBlue Airways, said early Wednesday that the company would cooperate fully with the investigation. "JetBlue has been very open and forthcoming regarding our operations during and following the Valentine's Day ice storm in New York," she said. A call to American Airlines early Wednesday was not immediately returned. Peters asked Calvin Scovel, the Department of Transportation's inspector general, to examine why JetBlue passengers were stranded aboard a plane at New York's John F. Kennedy International Airport during the recent Valentine's Day storm, which caused the airline to cancel about 1,000 flights and sparked a massive corporate mea culpa campaign.

NWA-Mesaba Deal Gets One OK, Awaits One More

Northwest Airlines won permission from the judge overseeing its bankruptcy case to buy Mesaba Airlines, a regional carrier also in bankruptcy. U.S. Bankruptcy Judge Allan Gropper in New York approved a sale agreement Tuesday under which Mesaba's creditors would receive a $145 million claim against Northwest, the fifth-largest U.S. airline. "Based upon the record before me and the lack of objection from any party, I'll approve the agreement," Gropper said at a hearing in New York.

February 22, 2007,

American aims to expand its NY presence

Some history here. American's new terminal at JFK is located partly
over United's former JFK terminal. United had moved into British Air's
terminal, as part of an aborted plan to create an alliance.

Now United has discontinued all international flying out of JFK.

American Airlines, formerly based in NYC before moving to Dallas, now
is re-establishing its dominance of JFK. United is nowhere in sight.
Apparently United is betting on the Washington area, in preference to
the New York area.

These are management decisions. They deserve the credit and blame.

Pete Sofman
============ ========= ==
American takes aim at Delta and JetBlue
BY JAMES BERNSTEIN jim.bernstein@ newsday.com

February 22, 2007, 7:31 PM EST Newsday

American Airlines said Thursday it plans to beef up service at Kennedy
and LaGuardia airports, a move that will put additional pressure on
Delta Air Lines and JetBlue Airways Corp., which is just beginning an
effort to recover from its icy meltdown last week.

Fort Worth, Texas-based American, the world's largest carrier, will
open the second phase of a $1.1-billion terminal expansion and
renovation at Kennedy in the middle of this year and now plans to
broaden its footprint in the area by adding domestic and international
flights from Kennedy and LaGuardia, beginning in April.

"New York is the largest aviation market in the world," David Cush, an
American senior vice president of passenger service, said in an
interview. "New York is also the most competitive and fragmented
market. But it's also very lucrative because of all the Fortune 500
companies."

Cush said American's plans are unrelated to JetBlue's troubles and his
company began planning to expand service in the area more than a year
ago. Bryan Baldwin, a JetBlue spokesman, said he doubted American
Airlines' plan would have much of an impact on JetBlue. "There's
always competition in the airline industry, which makes it better for
consumers," he said.

American's move does come at a difficult time for JetBlue, which was
forced to cancel more than 1,000 flights after a Valentine's Day
storm, stranding more than 100,000 passengers, some of whom were
trapped on grounded planes for up to 10 hours.

JetBlue took out a full-page ad in Newsday and other New York papers
Wednesday, apologizing once more for its performance. On Tuesday the
airline unveiled a passengers' "bill of rights" it said is aimed at
compensating passengers delayed or trapped on planes as well as
assuring that such a meltdown doesn't recur. JetBlue said that in the
future it will take passengers off a plane that has been sitting on
the ground for five hours.

American said its new LaGuardia flights will be to Cincinnati and
Louisville, Ky. The airline also will start flying to Las Vegas from
Kennedy and will add a sixth daily flight between Kennedy and San
Francisco. American said it will increase from seven to 12 the number
of weekly flights between Kennedy and Port-au-Prince, Haiti, and from
three to five the weekly flights between Kennedy and Caracas.

More destinations from the two Queens airports may be added later this
year, Cush said, and American will spend at least $2 million on an
advertising campaign in New York to promote the new flights and as
much as $7 million more for advertising in the years ahead.

American's competitors will not be standing still. Atlanta-based Delta
plans to add 18 U.S. destinations from Kennedy by July. Delta will
also have added 17 international cities since 2005. Delta is operating
under court-supervised bankruptcy but plans to emerge from Chapter 11
in the next year.

JetBlue, one of the nation's leading low-cost carriers, will begin
flying to eight new cities from Kennedy this year. JetBlue is
currently the largest operator at Kennedy. American is second, and
Delta is third, according to statistics compiled by the Port Authority
of New York and New Jersey.

Alan Bender, a professor at Embry Riddle Aeronautical University in
Daytona Beach, Fla., said American offers travelers first-class
sections, one of the world's biggest frequent flier programs, and
business and first class lounges at airports. All that will make
American a tough competitor going forward.

Ray Neidl, who follows the airline industry for Calyon Securities in
Manhattan, said American's expansion in New York is very likely to be
successful. "American has a great facility" at Kennedy "and this is a
rich market," he said.

Copyright 2007 Newsday Inc.
============ ========= ========= ===

Feb 21, 2007

Pilots Concerned On Plan To Raise Retirement Age

Tom Woodburn was a little boy in 1959 when the Federal Aviation Administration made 60 the mandatory retirement age for airline pilots. "The whole age-60 rule came into effect because they wanted to get rid of the high-priced help," said Woodburn, a veteran of 20 years as an American Airlines pilot. "Things haven't changed much since 1959." Woodburn, 52, and other Virginia-based pilots recently expressed concerns about the FAA's new proposal to raise commercial pilots' retirement age to 65. Among their most pressing questions: Will pilots have to work until age 65 to qualify for full pension benefits? How will the rule affect senior pilots already concerned about maintaining their fly- ing skills? FAA Administrator Marion Blakey wants to bring U.S. rules into compliance with international standards that allow one pilot per plane to fly up to age 65. The new federal standard is modeled on the International Civil Aviation Organization, which requires pilots over age 60 to be accompanied by a co-pilot under that age threshold.

JetBlue Revises Guidance Downward

JetBlue Airways Corp. expects to post an operating loss for the first quarter, due to higher fuel prices and the lingering effects of service interruptions from a Feb. 14 ice storm in the New York area.
JetBlue said Wednesday it expects first-quarter operating margin of negative 4 percent to negative 2 percent, based on assumed fuel costs of $1.89 per gallon. The company previously forecast a quarterly operating margin of 2 percent to 4 percent on assumed fuel costs of $1.90. Operating margin measures operating income as a percentage of operating revenues. A negative operating margin indicates that the company's operating costs are rising faster than projected sales. Analysts polled by Thomson Financial forecast a first-quarter loss of 9 cents a share on revenue of $652 million before the company lowered its guidance on operating margins on Wednesday. JetBlue also now estimates that it will report an operating margin in the full year of between 8 percent and 10 percent, based on assumed fuel costs of $1.94 per gallon. The company previously forecast a full-year operating margin of between 10 percent and 12 percent on assumed fuel costs of $1.93.

JetBlue Vows To Win Back Customers

JetBlue Airways introduced a customer bill of rights on Tuesday that promises vouchers to fliers who experience delays, hoping the move wins back passengers after an operational meltdown damaged its brand and stock price. Founder and chief executive David Neeleman described the crisis as ''a huge bump in the road'' but said JetBlue would move past it. He said he had no intention of resigning in the wake of the worst corporate mess in the airline's 7-year history. JetBlue's shares fell 66 cents, or 4.87 percent, to close at $12.90 on the Nasdaq Stock Market Tuesday. ''I think I'm uniquely qualified to deal with these issues,'' Neeleman said. JetBlue said the first step in getting people to fly on the airline again was its introduction of a new customer bill of rights. Under the bill, if JetBlue cancels a flight within 12 hours of its departure because of problems within its control, customers can ask for a full refund, a credit or a voucher. If the airline delays a flight in a situation within its control, passengers would receive vouchers ranging from $25 to the full amount of a round-trip ticket, depending on the length of the delay.

US Airways CEO Gets A Day In Jail On DUI

The chief executive of US Airways will spend one day in jail for a drunken driving charge he incurred shortly after his airline's $9.8 billion bid for Delta Air Lines was rejected. Doug Parker, 45, pleaded guilty Tuesday morning in Scottsdale City Court to one DUI charge, according to the court clerk's office. Prosecutors asked that a second DUI charge and a speeding charge be dismissed. Municipal Court Judge Joseph Olcavage ordered Parker to spend 24 hours in jail on March 15. Olcavage also fined Parker $1,646.25 and ordered him to be screened by a doctor to determine if he has a problem with alcohol addiction. Parker was pulled over at about 11:30 p.m. on Jan. 31 after leaving a party at the FBR Open golf tournament in Scottsdale. That morning, US Airways Group Inc. dropped its hostile bid for Delta after courting the Atlanta-based carrier for three months.

Airlines Seek Ways To Smooth Storm Ills - Feb 17, 2007

Big Freeze, No Shows Left United In The Cold

Mix outsourcing with notoriously bad weather at O'Hare International Airport, and airlines and customers can end up frozen in their tracks. United Airlines' operations at the busy Chicago airport slowed to a crawl early last week as many of the contract workers hired to fuel its aircraft failed to show up for work in the bitter cold, sources say. The airline's ability to ride out wintry weather could be tested again with another storm expected to sock the region Tuesday and Wednesday. As temperatures dipped to 10 below zero on Feb. 5, equipment broke down on the trucks that pump jet fuel into United's planes. There also was a shortage of workers manning equipment. Contract employees for Penauille Servisair, the company United hired in 2005 to fuel its aircraft at O'Hare, called in sick or didn't report for shifts, sources say.

New Pay Plan For Control of Air Traffic Is Proposed

The Bush administration proposed Wednesday to eliminate the tax on plane tickets and air cargo shipments, shifting the cost of the air traffic control system largely to user fees and increased taxes on fuel.
The proposal would shift some of the burden from airlines to corporate and private aviation. Because the plan would increase taxes on aviation fuels by 250 percent, even people who fly their own small planes would face higher costs, although they do not use air traffic control services so heavily. In the highly organized world of aviation, nearly every group except the airlines reacted negatively. The proposal would require approval by Congress, where the outcome is uncertain, though Congress is likely to take some action on aviation taxes this year because they are to expire on Sept. 30.

$6.2 Billion Loss By Delta Really A Gain In Recovery

Only in the upside-down world of bankruptcy court could a $6.2 billion annual net loss mean things are going well. Delta Air Lines on Wednesday posted that eye-popping figure for 2006, along with a $2 billion deficit for the fourth quarter alone. But as it has done throughout its flight through Chapter 11, the airline said the huge losses were largely a result of one-time restructuring charges rather than daily operations. The bulk of those charges reflect the value of monetary claims Delta settled as part of its bankruptcy case, and thus serve as a measure of progress. Meanwhile, financial results that come from operating the airline now continue to improve, the airline said. It touted a $58 million "operating profit" — a measure that excludes all restructuring charges, as well as certain other expenses — for last year, marking the first such profit since 2000.

Airlines Operations Get Back To Normal Speed As Storm Eases Its Grip

Air travel was returning to normal late Thursday as a winter storm that caused hundreds of canceled flights over the previous two days eased its icy grip on the Midwest and Northeast. There were still problems with runway snow and high winds, especially in the New York area, but major carriers expected conditions to improve by today. Analysts said airlines would lose some revenue because of this week's storm, but the carriers had enjoyed relatively mild weather for the first six weeks of the year. Demand for air travel is usually a bit slack during the first quarter. American Airlines, the nation's biggest carrier, expected to cancel 30 to 40 flights Thursday, many at New York's Kennedy Airport, after canceling more than 700 flights nationwide the previous two days. Port Authority crews at JFK were struggling to clear runways, said Tim Wagner, a spokesman for American. Ice on the runways triggered tighter federal rules about airplane loads at takeoff, which further complicated operations, Wagner said.

AMR Corp., parent company of American Airlines, might be a buyout target of a group including Goldman Sachs and British Airways, according to the February 26 edition of BusinessWeek magazine. The proposed bid is said to be between $9.8 billion, or $46 a share, and $11.1 billion, or $52 a share, Gene Marcial wrote in his ``Inside Wall Street'' column, quoting people familiar with the matter. It is uncertain that a bid for the company will materialize, BusinessWeek said, citing the sources. AMR declined to comment. Goldman Sachs was not immediately available for comment. A British Airways spokesman said: ``We never comment on rumor or speculation.''
Northwest Expects To Be Worth $7 Billion After Bankruptcy

Northwest Airlines said Thursday that it expected to be worth roughly $7 billion when it emerged from bankruptcy later this year and that it would pay unsecured creditors roughly three-quarters of what they were owed. Continental, which follows Northwest on the list of major airlines, is worth just over $4 billion based on Thursday’s stock valuation. In a filing Thursday in Federal Bankruptcy Court in Manhattan, Northwest said it expected to issue new common stock that would cover about 74 percent of what its unsecured creditors were owed. Secured creditors will be paid in full, Northwest said.
Some unsecured creditors could get as much as 91 percent of what they are owed if they choose to buy additional shares, which Northwest is hoping will raise another $750 million.
Fliers' Misery Stings JetBlue

Congressional leaders excoriated JetBlue Airways on Thursday for forcing hundreds of passengers to sit aboard grounded airplanes for up to 10 hours because of weather-related delays in New York City, and they vowed to investigate airline customer service. The delays Wednesday at John F. Kennedy International Airport sparked renewed interest in a "passengers' bill of rights" that would allow air travelers to deplane if an aircraft is on the ground more than three hours. "No one should be held hostage on an aircraft," said Sen. Barbara Boxer, D-Calif., who plans to propose a bill giving passengers a right to deplane. House Transportation and Infrastructure Committee Chairman James Oberstar, D-Minn., called Wednesday's incident "just unconscionable." He plans to hold hearings in March or April on how airlines treat customers. JetBlue said nine flights at Kennedy — five waiting to depart and four that had just landed — sat on runways for six hours or more during Wednesday's ice storm.
Frontier's Pilots Union OKs New Contract

JetBlue Airways Corp. tried to calm a maelstrom of criticism Thursday, after passengers were left waiting on planes at a New York airport for as long as nine hours during a snow and ice storm. The airline said 10 incoming and outbound flights at John F. Kennedy International Airport were "significantly delayed" with customers on board during Wednesday's storm. Reasons included congestion, frozen equipment and an effort to keep planes ready to go in case the weather broke, said JetBlue spokesman Bryan Baldwin. Calling the delays "unacceptable," the airline planned to offer the affected passengers refunds and free flights. To Cheryl Chesner, 26, "unacceptable" was hardly the word for the 11 hours she said she and her husband, Seth, 27, spent trying to take a JetBlue flight to Aruba for their honeymoon. "It was the worst. It was horrific," she said. Baldwin said the Aruba flight, scheduled to leave at about 8 a.m. Wednesday, ultimately left late Wednesday night. But the Chesners went home to the Bronx. While they waited to take off, John Farrell waited to arrive. His JetBlue flight from Fort Myers, Fla., landed at 10 a.m., but passengers didn't get off until nearly 7 p.m., he said.

Frontier Airlines pilots approved a new labor contract in a vote that concluded Thursday. Of pilots voting, 67.4 percent were in favor and 32.6 percent were against, said Frontier Airline Pilots Association president Jeff Thomas. The four-year agreement freezes pay for a year for most of Frontier's estimated 650 pilots, Thomas said. Of the 553 pilots eligible to vote, 289 were in favor and 140 were against. The contract includes future cost-of-living pay increases and future pay-scale reductions, making it essentially "cost-neutral," Thomas said when the tentative agreement was reached. The pilots union agreement adds a defined-contribution retirement plan and includes some changes in work rules and productivity improvements, Thomas said.

After struggling through crippling holiday blizzards, Frontier Airlines and United Airlines are working to improve their ability to inform and rebook frustrated travelers. They are considering improvements such as adding circuits to allow more call volume during emergencies and new technology that automatically retickets passengers whose flights have been canceled. In December, United had the nation's highest complaint rate of airlines ranked, reporting nearly twice the industry average in data compiled by the U.S. Department of Transportation. Passengers cited the most problems with flights, baggage, reservations/ticketing/boarding, and customer service. Back-to-back holiday-season blizzards canceled about 3,000 flights to and from Denver International Airport, forcing about 5,000 passengers to spend the night at the airport and interrupting the travel plans of as many as 300,000 people. Even after Denver International reopened, thousands of passengers stood in line for hours to check in for new flights and to get through security.

Comair Delays Pilots' Concessions, Receives Proposal From Union

Comair delayed its plan to implement wage cuts and other concessions on its pilots Friday after receiving a new contract proposal from the pilots' union, a spokeswoman for the regional airline said. Comair was poised to impose $15.8 million in cuts on the 1,500 pilots at 11:59 p.m. Friday. Union spokesman Paul Denke would not discuss details of the union's plan, except to say that it was presented by phone and that a financial expert helped the group repackage its proposal. Comair spokeswoman Kate Marx said the cuts would be postponed until at least 11:59 p.m. Monday. "The delay is in order for the company to evaluate a proposal that we received from the pilots' union this evening," Marx said. The Delta Air Lines Inc. subsidiary has said concessions were necessary as part of its restructuring plan to save $70 million annually. Comair, along with its Atlanta-based parent, filed for bankruptcy in September 2005.

United Airlines said Thursday it will begin the first nonstop daily flights between Washington, D.C., and Beijing next month, with tickets going on sale Saturday. The nation's second-largest carrier said it received final approval from the Department of Transportation, giving UAL Corp.'s United a route coveted by executives and government officials and thought to be worth more than $200 million a year. Flights between Washington Dulles International Airport and Beijing Capital International Airport are scheduled to start March 28. The government last month tentatively gave United permission to start direct service to China. United beat out AMR Corp.'s American Airlines, which sought to fly between Dallas/Fort Worth and Beijing; Continental Airlines Inc., which applied for service between Newark, N.J., and Shanghai; and Northwest Airlines Corp., which applied for Detroit-Shanghai service.

U.S. May Look To Private Sector To Fund ATC System

The U.S. government may look to financial institutions and other investors to help finance the multibillion-dollar modernization of the air traffic system, a senior Bush administration official said on Thursday. ``We're looking at a lot of options,'' Transportation Secretary Mary Peters told reporters after a House of Representatives committee hearing that examined the administration's proposals for air traffic funding. ``One option would be if the private sector would be willing to bring the capital forward and build the system and then be paid back through user fees or taxes or whatever way we ultimately decide to fund the system,'' Peters said. ``There may be opportunities to do that,'' she said of debt and other financing options for modernizing the air traffic infrastructure. Peters said the government would continue to run the network, even if private funds were used to finance part of it.

Delta Gets Okay To Buy Regional Jets

Delta Air Lines Inc. received permission from the bankruptcy court Thursday to spend $1.1 billion to buy 30 Bombardier regional jets. Delta took options on another 30 CRJ900 aircraft, Bombardier said in a press release. If Delta makes the additional purchase, the value of the contract could rise to $2.3 billion. "The acquisiton of these aircraft will help Delta meet is network and operational needs for 2007 and 2008," the press release quoted Shawn Anderson, vice president of Delta Connection, as saying. Delta said the 76-set CRJ900 jets will be used at its Atlanta, Cincinnati and Salt Lake city hubs.

NWA Attendants Left Out Of Payments

Northwest Airlines ground workers got special payments this week that averaged about $2,000, but flight attendants received nothing because they don't have a ratified contract. The money for the ground workers came from selling part of a bankruptcy claim that was included in the union's contract, which members approved last year. The different treatment was pointed out explicitly in a letter that Northwest sent Thursday to its flight attendants. While other Northwest unions are selling bankruptcy claims worth millions of dollars, flight attendants are blocked from getting any money because they haven't approved a concessionary deal.

US Airways CEO Arrested In DUI Incident

US Airways chief executive Doug Parker was arrested on suspicion of drunken driving just hours after his airline's $9.8 billion bid for Delta Air Lines was rejected last week, police said. Parker, 45, was pulled over at 11:30 p.m. Jan. 31 after leaving a nightly party at the FBR Open golf tournament in Scottsdale, police Sgt. Mark Clark said. Parker was pulled over for driving 20 mph over the posted speed limit of 45 mph. According to a police report, Parker told police he had three beers during a two hour period. After taking roadside sobriety tests he was arrested and taken to a DUI task force post for booking and to have blood drawn for an alcohol-level test. Those results are not yet available.Parker was not immediately available for comment Friday, but vice president of communications Elise Eberwein said late Thursday he "is embarassed beyond words and knows more is expected of him." Eberwein said Parker expects the blood tests will show he was not legally drunk at the time of the arrest. She said he was taking taking two friends home who had had too much to drink.

Feb 8, 2007

For the first time, the U.S. government is asking foreign countries to allow pilots to carry guns in the cockpit when they fly overseas. The Homeland Security Department, working with the State Department, is trying to expand a 4-year-old program that allows thousands of pilots to carry guns on domestic flights. "It's obvious that there's a threat internationally," said Conan Bruce, spokesman for the Federal Air Marshals Service, which runs the armed-pilots program. "We want to work toward having (armed pilots) be able to perform their duties on international flights." Some countries may block U.S. efforts because they don't want guns on airplanes, even if they're carried by trained pilots who have been sworn as law officers. "Sweden would rather not see any weapons aboard airplanes," said Michael Mohr, homeland security liaison at the Swedish Embassy in Washington. "There's a concern about arms and very sensitive equipment inside airplanes."

Delta Bankruptcy Exit Plan Clears Hurdle

A week after defeating a hostile takeover bid, Delta Air Lines got clearance to start taxiing toward a departure from bankruptcy court this spring. After a short hearing Wednesday in New York, U.S. Bankruptcy Judge Adlai Hardin approved Delta's description of its reorganization plan, allowing the Atlanta carrier to begin seeking creditors' backing for the plan. The decision marks a "momentous" milestone in Delta's nearly 17-month-long trip through Chapter 11 proceedings, said the airline's lead lawyer, Marshall Huebner. Delta, which said it plans to seek final approval of its reorganization plan at an April 25 hearing, plans to mail notices to creditors in about two weeks. Creditors will have until April 9 to vote on the plan, which includes the company's plans for issuing new stock to creditors when it emerges.

        Air Travel Got Worse in '06, Report Says

A report issued Wednesday confirms what many travelers already suspected: 2006 was a tough year to fly, and in December it was toughest at Chicago's O'Hare International Airport. The performance of U.S. airlines in categories such as on-time arrivals, baggage handling and passenger bumping was the worst in years, according to the annual industry report card released by the Transportation Department. Despite improvements in some areas--flight cancellations and overall consumer complaints fell compared with 2005--some experts said the numbers bear out the feeling of many travelers that flying has become an ordeal. After years of financial turmoil and cutbacks, "the airlines just can't provide the same kind of service experience that they did 10 years ago," said Dean Headley, an associate professor at Wichita State University and co-author of an annual survey of airline quality. About 75 percent of domestic flights arrived on time last year, the lowest since 2000, according to the report.

Northwest Airlines Is Offered Big Break On Fees

Northwest Airlines will get a $239 million break on airport charges in return for keeping its hub and headquarters in the Twin Cities after it clears bankruptcy, a divided Metropolitan Airports Commission decided Wednesday. Other airlines would reap $40 million from the plan, which would lower the fees that the airlines pay from 2006 to 2020 in the hopes of making the Minneapolis-St. Paul International Airport competitive in the troubled airline industry. The Airports Commission's 8-4 vote in favor of the agreement comes close to forgiving a loan of $290 million that the struggling Northwest received from the agency 15 years ago -- by giving the airline most of the money to repay the debt.

Feb 7, 2007

United Pays Down Debt From Bankruptcy

United Airlines said Monday that it paid off $972 million of the borrowings it used to exit bankruptcy a year ago and refinanced the remaining $2 billion, reducing interest costs. The new financing will save about $70 million annually before taxes, the Elk Grove Township-based carrier said. It includes a $1.8 billion term loan and a $255 million credit line. The refinancing marks another United milestone since it emerged from Chapter 11 protection on Feb. 1, 2006. The airline posted two consecutive profitable quarters after its exit and narrowed its loss in the fourth quarter as it raised fares and added more international flights. "It's clearly a big positive development in terms of United's credit quality," said William Warlick, a debt analyst at Fitch Ratings in Chicago. "It will give them a lot more financial flexibility if they need it, or if there's another shock to the industry." Fitch rated United's bank loan debt at BB-minus, or three levels below investment grade, with a "stable" outlook.
United's Traffic Grows 2% in January

United Airlines said Monday its January traffic grew 2% on a 1.6% capacity expansion, with growth in European and Asian capacity offsetting shrinking Latin American operations. The airline said overall traffic rose to 9.22 billion revenue passenger miles from 9.03 billion in January 2006. A revenue passenger mile is an industry unit measuring one paying passenger flown one mile. Capacity grew 1.6% to 11.82 billion available seat miles from 11.63 billion. The sharpest percentage gains were to Europe, with capacity expanding 6.1% to 1.57 billion available seat miles. That helped offset shrinking capacity to Latin America, down 14.3% to 502.8 million available seat miles. Capacity to Asia rose 1.1% to 2.66 billion available seat miles, while North American capacity rose 2.2% to 7.08 billion.
Landing Plane Hits Brakes to Avoid Plow

Denver International Airport dodged a potential catastrophe on Friday when an arriving United Airlines jet employed emergency braking to avoid hitting a snowplow that had entered an active runway. United Airlines Flight 1193 from Billings, Mont., to Denver, with two pilots, three flight attendants and 96 passengers aboard, had just landed on DIA's Runway 26 at 5:38 p.m. when "one of the pilots noticed a snow plow on the runway," the National Transportation Safety Board said Monday in a preliminary report on the incident. "The crew used maximum braking power and full use of the thrust reversers to bring the aircraft to a complete stop," NTSB said. Initial reports indicated the plane missed the snowplow "by about 200 feet," according to NTSB. But later on Monday, Federal Aviation Administration spokesman Allen Kenitzer said ground radar data indicated the distance between plane and plow was 697 feet. No one was injured.
On The Road Column

Grinstein Stood Tall As Delta's Defender

At first glance, the battle for Delta Air Lines seemed likely to be a rout. The youthful, dynamic executive team at US Airways seized the initiative last fall when it launched a surprise takeover bid that caught a wounded Delta off guard. The group had already transformed a second-tier airline, the Tempe, Ariz.-based America West, into a major player by buying US Airways and taking its name a year earlier. By snatching Delta from bankruptcy court, 45-year-old Chief Executive Officer Doug Parker would get a tarnished gem and create the world's biggest airline in a single audacious stroke. All that stood in the way was lame-duck Delta CEO Gerald Grinstein who, at 74, already planned to step down as soon as the Atlanta icon got out of bankruptcy court. He led a corps of untested executives who got their jobs when the previous executive team bailed out with controversial bonuses and protected pensions. Delta's 45,000-member work force had been battered by a string of layoffs, pay cuts and benefit reductions. Grinstein vowed to resist the US Airways offer, but some wondered if the opposition would wilt. Many airline analysts — always eager to see fewer players in the fractious industry — thought the deal would be a long-awaited catalyst for consolidation.

--Related Article
Northwest Pilots Press For Share of Recovery

The head of the Northwest Airlines pilots union contends that the pilots' relationship with management recently hit a "new low" because management has failed to address pilot concerns about work rules and other issues since the airline's financial recovery began to gain momentum. Dave Stevens, chairman of the Northwest branch of the Air Line Pilots Association (ALPA), said Friday in a memo to pilots obtained by the Star Tribune that ALPA has been working for months to get Northwest to reverse some aspects of its latest contract. Their concerns included "the most onerous work rule changes, which so adversely affect a pilot's schedule, days off, fatigue and health."Our efforts to improve quality-of-life issues have mostly fallen on deaf ears," Stevens wrote. He also said Northwest resisted the pilots' request to sell another 20 percent of its bankruptcy claim unless the pilots agreed to three Northwest conditions. Those terms included endorsing Northwest's plan of reorganization and regional jet award to Mesaba Airlines, but Stevens said Northwest recently stopped linking those issues to the claim sale.

JANUARY 29, 2007 Business Week

NEWS & INSIGHTS
http://tinyurl. com/2vjwmu (you might have to register to read the
article)

One Jet, 16 Owners, Big Problems

NetJets, Flexjet, and other fractional operators have severe growing pains

By Adrian Schofield/Aviation Daily

United CEO Glenn Tilton yesterday fired a broadside at critics of transatlantic open skies and domestic airline mergers, saying they are helping to keep U.S. airlines from competing with their foreign competitors.

The dilemma facing the industry is whether it can find a way to compete effectively, or "default to the same cycle of dysfunction and bankruptcies, and continue to lose ground to our foreign competitors, " Tilton said at an American Bar Association conference. This question has been addressed in Congress recently and needs further debate, Tilton believes.

Deregulation has delivered significant benefits to the U.S. economy, but "has yet to be comparably effective in the international arena .... U.S. carriers are losing competitiveness globally because of such international restrictions, " said Tilton. "Completing the job of deregulation" will help the industry break out of the recurring pattern of "financial crisis and bankruptcy."

Proposals to increase foreign investment in U.S. airlines have been defeated over the past year, and "those who favor the status quo are having some success," said Tilton. Among this group are those "celebrating the disruption" of U.S.-EU open-skies talks, as well as those who fought to kill the Transportation Dept.'s attempt to reform airline ownership rules or are attempting to block domestic consolidation.

These "status quo" proponents need to propose another way for the U.S. industry to compete better at home and abroad, Tilton said. Since the status quo has resulted in the loss of more than 170,000 jobs and $35 billion from U.S. carriers since 2001, this begs the question of whether the status quo is worth defending, he said.

"The only winners in this situation are our foreign competitors, who would enjoy nothing more than to see the U.S. network carriers remain in a state of fragmentation and relative weakness, unable to invest in our product and aircraft, falling further behind in the competition for the global passenger," said Tilton.

Asked about the prospects for further airline merger attempts after the apparent collapse of US Airways' bid for Delta, Tilton said the next wave could see different types of merger. He pointed out that US Airways essentially launched a hostile bid, but now airlines may consider mergers that are in the interests of both companies.

Thursday January 25, 9:06 am ET
By Jane Wardell, AP Business Writer
Business Class-Only Airline Silverjet Begins Flights Between London and
New York

LONDON (AP) -- Business class-only airline Silverjet began operating
between London and New York Thursday, billing itself as the world's
first carbon neutral airline in a bid to differentiate itself in an
increasingly crowded market.

Silverjet is starting operations with a one flight per day service
between London's Luton airport and Newark in New York. It plans to
launch a second daily flight in July.

The airline joins Maxjet and Eos, which both fly between London's
Stansted and New York's JFK, in targeting business and high-end flyers.

All three are hoping to challenge the pre-eminence of carriers such as
British Airways PLC, Virgin Atlantic, Continental Airlines Inc. and
United Airlines on the trans-Atlantic route by offering luxury services.

Silverjet offers passengers a check-in time of just 30 minutes and
onboard services including wireless Internet and plasma TV screens.

It is also playing the green card, highlighting the mandatory offset
contribution included in its ticket prices.

Return fares start at 999 pounds (US$1,927; euro1,481), with promotional
flights from 799 pounds (US$1,573; euro1,209) return.

"For too long, long-haul airline travel has been associated with hassle,
disappointment and environmental damage," said Chief Executive Lawrence
Hunt, who founded the company in 2004 and floated it on London's junior
AIM stock market last May. "We've spent the past three years talking to
customers and feel confident that Silverjet addresses their biggest
concerns."

Each Silverjet aircraft has 100 business class flat beds, with
individual food service, personal in-flight entertainment systems and a
separate ladies toilet.

Eos has 48 seats that recline into flat beds on Boeing 757, which
normally carries 180 passengers, while Maxjet which has 102 seats, all
with double the normal legroom, on its Boeing 767.

Eos fares start at 3,550 pounds (US$6,996; euro5,379.47) return, while
Maxjet, which called itself the first low-cost business airline, offers
fares starting at 395 pounds (US$779; euro599) one-way.

However, analysts have warned that the new airlines face an uphill
battle to take customers away from the big carriers because of their
inflexible flight schedules, a lack of incentives such as frequent flyer
miles and their reliance on the more marginal London airports.

Silverjet shares gained 6.8 percent to 164.5 pence (euro2.50; US$3.25)
in London.

Jan 19, 2007

Delta Managers To Discuss US Airways' Bid With Directors

Delta Air Lines Inc. plans to discuss US Airways' increased bid to buy Delta with its board of directors soon, the company said Friday as it filed an amended reorganization plan that details how it would satisfy claims against its subsidiary, Comair. Beyond that statement, the nation's third largest carrier offered no new insight into the fate of a hostile bid by Tempe, Ariz.-based US Airways Group Inc. to buy Delta in a deal valued at $10.2 billion. Delta management has said repeatedly it opposes a merger with US Airways, but reiterated Friday it was obligated to review US Airways' increased offer, which was made Jan. 10. Its board rejected US Airways' initial offer, which was made Nov. 15. The current offer is about 20 percent higher than the original.

Delta Applies For China Route

Delta Air Lines Inc. on Friday applied to offer nonstop service between Atlanta and Shanghai. The route would connect Delta's biggest hub with the Chinese financial center and offer the first service to China from the U.S. Southeast, the airline said. Delta, which is operating in Chapter 11 bankruptcy protection, said it hopes to begin service on March 25, 2008 using a Boeing 777 jet. Airlines have been aggressive in hopes of serving the burgeoning Chinese economy. United Airlines recently won tentative approval to fly between Washington and Beijing, beating out bids from Northwest Airlines Corp. and others. Congressional members from Michigan, home of one of Northwest's biggest hubs, recently asked the Department of Transportation to reconsider the decision.

TSA Chief Hits Plan To Check Cargo

Requiring inspection of all cargo on passenger planes could potentially make them more vulnerable to terrorist attack while also hindering commerce, the nation's aviation security chief said Wednesday. In his first public comments on a bill approved by the House Jan. 9, Transportation Security Administration (TSA) chief Kip Hawley said inspecting all passenger-plane cargo would add "a very small, incremental benefit for security." Hawley said it also could divert airport screeners from other activities such as screening airport employees, inspecting passenger travel documents and looking for suspicious travelers. "If you spend all your resources opening boxes and not applying your resources more generally, that opens up another vulnerability," Hawley told the Senate Aviation Subcommittee. "The adaptive terrorist will go there." Passenger planes carry about 6 billion tons of cargo a year, typically goods that need fast shipment such as seafood and auto parts. The items are held in the belly of jets with passenger luggage, which is inspected for bombs. Only a small portion of such cargo is checked by bomb-detection machines or dogs.

Southwest Q4 Profit Falls 19%

Southwest Airlines, the Dallas-based low-cost carrier, said its fourth-quarter profit declined 19 percent from a year ago as fuel prices and security costs increased, but operating profit rose on strong revenue growth. Fourth-quarter earnings: $57 million, or 7 cents a share, down from $70 million, or 9 cents, a year earlier. Excluding special items, profits were $96 million, or 12 cents, up from $81 million, or 10 cents, in line with analysts' estimates. Revenue: $2.28 billion, up 15 percent from $1.99 billion a year earlier.

Continental Reports a 4% Narrower Loss

Continental Airlines said yesterday that it narrowed its fourth-quarter loss by 40 percent as it flew more passengers and increased fares. The loss of $26 million, or 29 cents a share, compares with a year-earlier loss of $43 million, or 53 cents, the airline said in a statement. Sales rose 11 percent, to $3.16 billion. Continental joined other carriers in raising ticket prices 10 times last year as travel demand filled planes to record levels. The airline forecast the loss on Dec. 11, citing higher nonfuel costs and a revenue decline at its regional unit. Fare increases in 2007 may be smaller because “the easy fruit has all been picked,” Ray Neidl, an analyst at Calyon Securities in New York, said. “Demand will stay up and capacity will remain tight, so they’ll be able to increase revenue this year.”

Approach Boss With Caution

On a scale of one to 10, with 10 being the most volatile personality, Jonathan G. Ornstein, chief executive of the Mesa Air Group, cheerfully admitted, “I used to be an 11.” Mr. Ornstein, 49, will not hazard a guess as to his current level of hotheadedness, but some in the airline business say he still rates double-digits. “I don’t know that I’ve ever hung up on anyone in my life — except Jonathan,” said Scott Kirby, president of US Airways, which, employing Mesa to fly smaller planes on shorter routes, is Mesa’s biggest customer. Mr. Kirby said he had handled the Mesa relationship for nearly a decade “frankly because I was the only person who could deal with Jonathan at times.” “He’s loud, volatile, insulting, doesn’t listen to the other perspective.” College dropout, stock market fanatic, motorcycle enthusiast and, on occasion, an uninhibited dancer to hip-hop music, Mr. Ornstein is a throwback to an era when airlines tended to resemble the personalities of their chief executives.

Jan 11, 2007

United Awarded New Route To China

United Airlines has edged three rivals to nab a plum new route to Beijing that's expected to generate as much as $250 million in annual sales. The U.S. Department of Transportation on Tuesday tentatively granted United the right to launch service from Washington, D.C., to Beijing starting March 25. Federal regulators will issue a final decision by early February. American Airlines, Continental Airlines and Northwest Airlines also had submitted bids to add flights to China, a tightly regulated market that is among the fastest growing in the world. United's victory will give it and Minneapolis-based Northwest control over more than 75 percent of the flights to China from the U.S. That's a virtually insurmountable lead, analysts say. "It's going to take American and Continental a long time to catch up with those guys," said Roger King, senior analyst with CreditSights Ltd. "In fact, I don't think it's going to happen. It makes those two airlines, United and Northwest, that much more valuable as merger partners [to other airlines]."

U.S. Senate Panel Will Hold Airline Merger Hearings

U.S. Senate lawmakers said on Tuesday they would more closely examine potential airline mergers, including the hostile bid for Delta Air Lines Inc. by US Airways Group Inc. The Commerce Committee said it would hold a hearing on airline consolidation on January 24. The panel did not release a witness list and a spokeswoman would not say if airline chief executives would be called to testify. Lawmakers in both houses have expressed concern about the potential impact of new consolidation on consumers, especially the potential for higher fares and more erosion of service to small communities. ``I think we want to understand from the airlines what's happening here,'' Sen. Byron Dorgan, a North Dakota Democrat and member of the commerce panel, said in an interview.
US Airways Raises Delta Offer To $10.2 Billion

US Airways said Wednesday it had raised its bid to acquire Delta Air Lines out of bankruptcy to $10.2 billion in cash and stock, hoping to persuade Delta’s creditors to support its proposal over the stand-alone reorganization plan that Delta has endorsed. The new offer consists of $5 billion in cash and $5.2 billion in stock, based on US Airways’ closing share price on Tuesday. Its previous offer included $4 billion in cash and about $4.5 billion in stock based on Tuesday’s close, for a total value of $8.5 billion. US Airways’ higher bid comes as many analysts have been predicting that the nation’s airline industry might be poised for a round of consolidation. On Tuesday, the Senate Commerce Committee announced a hearing on Jan. 24 on the potential effects of airline mergers. A combination of Delta and US Airways would likely put pressure on other major carriers to find partners, analysts say. But some have suggested that antitrust issues would be an obstacle to a US Airways-Delta deal, citing overlap between the two airlines’ routes.

Mesaba Parent Agrees On Sale To NWA

MAIR Holdings Inc. said Tuesday that it has reached "an agreement in principle" to sell its Mesaba Airlines subsidiary to Northwest Airlines. Neither side revealed the terms that secured MAIR's support for the Northwest acquisition of Mesaba, which operates regional flights for Northwest. In December, Northwest said it intended to purchase Mesaba with a deal that primarily is a "noncash transaction." The crux of the transaction involves using Mesaba's claim against Northwest in the bigger carrier's bankruptcy case -- a claim Northwest values at $145 million -- to satisfy Mesaba's creditors. The deal also includes $10 million in cash for Mesaba.

Man OK After Airborne Scorpion Bite

The scorpion bit David Sullivan on the back of his right leg, just below the knee, crawled up through his crotch and down his left leg, he thinks, before getting him again in the shin. Not what he was expecting on his flight home from Chicago to Vermont. Sullivan, a 46-year-old builder from Stowe, was aboard the United Airlines flight as the second leg of his trip home from San Francisco, where he and his wife Helena had been visiting their sons. He awoke from a nap shortly before landing and noticed something strange. ''My right leg felt like it was asleep, but that was isolated to one spot, and it felt like it was being jabbed with a sharp piece of plastic or something.'' The second sting came after the plane had landed and the Sullivans were waiting for their bags at the luggage carousel. Sullivan rolled up his cuff to investigate, and the scorpion fell out.
Frontier Storm Tab Over $12 Million

A snowstorm that closed Denver International Airport for 45 hours and stranded thousands of holiday travelers, along with another snowstorm a week later, cost Frontier Airlines at least $12.1 million, the discount carrier said. December passenger revenue was down about $11 million because of the storms at Frontier's primary hub, President and Chief Executive Jeff Potter said in a statement Monday. The airline said it also spent about $1.1 million in storm-related costs, including deicer. "In addition, while we are unable to provide a definitive snowstorm cost estimate at this time, we do anticipate that there will be significant variable expenses," Potter said, adding that some of those expenses will be offset by costs not incurred while the airport was shut down. Denver-based Frontier said it carried 639,213 passengers last month, a 0.5 percent decrease from 642,663 passengers in December 2005.

Jan 10, 2007

United Adds Trotter To Spice Up Its Plane Fare

United Airlines has rehired celebrity chef Charlie Trotter to spruce up its menu for first- and business-class passengers, a sign the airline is serious about catering to consumers who pay top dollar to fly, analysts say. Trotter will work with Gerry Gulli, United's corporate executive chef, to create signature entrees to be served on flights to Europe as well on United's premium transcontinental flights between New York and California, known as "p.s." For United, the bet on the marquee chef is a no-brainer. "The money is on the front side of the curtain--business and first [class]," said Mike Boyd, a Colorado-based airline consultant. "For United, it's making a sharp service even sharper." The move is a throwback to the 1970s, when air travel was glamorous, and airlines like Pan Am were known for their celebrity chefs, Boyd said. "United is going back to the image of when flying was worth getting on an airplane for," he said.
A New Focus On Delta As Deal Bait

Delta Air Lines, in such dire straits a year ago that its chief financial officer called it “a company I’m not sure we could have given away,” is suddenly in great demand. US Airways increased its unsolicited bid for Delta by more than 20 percent early yesterday, to about $10.3 billion. Hours later, Northwest Airlines emerged as a potential suitor.Delta, according to people involved in the talks, is hoping to fend off US Airways, and has been in talks with Northwest for weeks. Both carriers are operating in bankruptcy, with plans to emerge later this year. A Northwest bid would probably be preferable to Delta managers because the two airlines’ route networks overlap less than with Delta and US Airways. A combination with Northwest is therefore likely to lead to fewer grounded planes, if any.

US Airways Pumps Up Hostile Bid For Delta

The merger plot just thickened at Delta Air Lines. US Airways bumped up its takeover bid for the Atlanta-based airline by 20 percent Wednesday, to $10.3 billion, adding a Feb. 1 deadline in a move to pressure Delta's bankruptcy court creditors — who have a big say in whether the deal goes through. Industry analysts said that should give Tempe, Ariz.-based US Airways a better shot at persuading the creditors to choose its hostile takeover bid over Delta management's plan to emerge from Chapter 11 as an independent carrier. But a report also surfaced that Delta and Northwest Airlines, also in Chapter 11 proceedings, have had talks about a possible merger after they both exit bankruptcy. Citing unidentified sources, the Wall Street Journal reported that the two airlines were talking at various levels of management.

Delta Price May Be Burden For US Airways

Delta Air Lines certainly would be a huge prize for US Airways, but its proposed $10.3 billion price tag could become a heavy burden on the company's finances. US Airways Group Inc., which was forged from the struggling America West Airlines and the bankrupt former US Airways, said Wednesday it will increase its offer for Delta by almost 20 percent and will borrow $5 billion to do it. Delta, which also is in bankruptcy, would be the biggest purchase ever for the Tempe, Ariz.-based carrier. But it would sink the company's finances, at least at first. US Airways officials estimate the combined debt of a merged carrier would be about $24 billion, including long-term leases for its aircraft. However, the company expects a merged carrier would save $1.65 billion per year by trimming its fleet of aircraft, cutting redundant routes and other synergies.

AirTran Raises Midwest Bid To $345 Million

AirTran Holdings Inc. raised its bid for Midwest Air Group Inc. by 19 percent to $345 million on Thursday, making the offer directly to shareholders and putting pressure on Midwest Air's management.
The parent of discount carrier AirTran Airways, the No. 10 U.S. carrier, made the move after Midwest Air last month rejected the initial offer of $290 million, saying the bid undervalued it. Midwest on Wednesday put forth a plan to add routes and update its fleet as it seeks to convince shareholders it should remain independent. Under the revised bid, AirTran is offering to pay $13.25 per Midwest share, including $6.625 in cash and 0.05884 shares of the airline's common stock. The new offer represents a premium of 61 percent over the 30-day average closing price of Midwest common stock at the time of AirTran's initial $11.25-per-share bid. Shares closed at $12.90 on the American Stock Exchange on Wednesday.

Jan 8, 2007

FAA Revamps Rules For Long-Range Flights

Federal aviation regulators will require jets that fly for hours over desolate oceans or polar regions where there are no airports to have a plan to take care of passengers and extinguish cargo fires in the event of an emergency. The Federal Aviation Administration regulation, announced Monday, spells out rules under which the latest generation of long-range jets can fly virtually any route in the world, including over the South Pole. Jets flying these routes must have the ability to extinguish cargo fires for as long as it takes to reach a diversion airport. In addition, airlines must have a plan to take care of passengers if a jet has to land at a remote airport. On some routes, a jet may be as far as 5½ hours from a suitable emergency airport. The frequency of long-range flights has grown more than fourfold since 1984. Last year, airlines scheduled nearly 16,000 flights a week that exceeded 3,000 miles. The Boeing 777-200LR has a flight range of 10,800 miles and Airbus' A340-500 can fly up to 10,300 miles.
Memo Pad Column

Mesaba Parent Fights Creditors' Sale Tactics

MAIR Holdings Inc., the owner of Mesaba Airlines, objected Monday to a legal maneuver by Mesaba's creditors designed to hasten Mesaba's purchase by Northwest Airlines. The creditors want U.S. Bankruptcy Judge Gregory Kishel to waive Mesaba's exclusive right to file a plan of reorganization by mid-February. Instead, the creditors want Kishel to approve a motion today that would allow them to file a reorganization plan by Jan. 15. That expedited timeline was set by Northwest, and the creditors want to meet it because they anticipate that the Northwest transaction could give them payment in full. Mesaba's bankruptcy claim against Northwest -- which Northwest values at $145 million -- would be used to satisfy the Mesaba creditors.

Jan 5, 2007

The nation's leading discount airlines are preparing a full-scale assault of the Chicago market in 2007, moves that should ratchet up competition and keep deals plentiful for budget-minded travelers. From Milwaukee's Mitchell International Airport to Chicago's Midway Airport, carriers like Southwest Airlines, JetBlue Airways and AirTran Airways are expanding operations and wooing customers. They will face a stiff fight from newly invigorated United Airlines and American Airlines, which can match them price cut for price cut after slashing billions of dollars from their overhead expenses, analysts say. And consumers should be the ultimate winners. "Chicago is a battleground," said Tom Parsons, travel expert and chief executive of BestFares.com. "You have every low-cost Tom, Dick and Harry coming to your market." The discount carriers are ramping up operations to take advantage of the region's central location, to step into routes where the major airlines have cut back service in recent years and to spur demand with unusually low fares.

Frontier Pilots Union To Vote On New Pact

Frontier Airlines' pilots union has reached a tentative agreement on a new labor contract with the company after more than a year and a half of negotiations. The four-year agreement freezes pay for a year for most of Frontier's approximately 650 pilots, according to Frontier Airline Pilots Association president Jeff Thomas. It includes future cost-of-living pay increases and future pay-scale reductions, making it essentially "cost-neutral," he said. "We adjusted the overall rates, but nobody will be taking any pay reductions as a result of it," Thomas said. "... It certainly doesn't look at all like one of the contracts that came out of the bankruptcy filings." The pilots union agreement adds a defined-contribution retirement plan and includes some changes in work rules and productivity improvements, Thomas said. Frontier has "industry-leading pilot productivity" and one of the most competitive crew- operating costs in the industry, Thomas said.
Delta To Buy Up To 60 New Mini-Jets

Delta Air Lines plans to buy 30 new regional jets from Bombardier Inc. and has asked for purchase options on 30 more of the 76-seat planes, according to a court filing Thursday. The Atlanta airline is also seeking its bankruptcy judge's clearance to get secured financing for the deal and to pay pre-delivery costs. The court filing, part of Delta's nearly 16-month-old bankruptcy restructuring, did not disclose financial terms for the deal. The orders are for Bombardiar's CRJ 900s, a larger version of the 50- and 70-seat jets that make up the bulk of Delta's regional jet fleet. Delta has long been expected to order bigger regional jets to feed its hub airports, in part because the smaller aircraft are less popular with customers when used on longer flights. In a contract deal last April, Delta's pilots union agreed to work rule changes that allowed the carrier to begin adding up to 30 of the 76-seat jets to its fleet this year.
Northwest Reaches Deal To Purchase Mesaba

Northwest Airlines has negotiated an agreement to acquire Mesaba Airlines in a proposed stock purchase deal in which Eagan-based Mesaba would become Northwest's wholly owned subsidiary. Northwest's board of directors plans to meet Wednesday to vote on the deal, and Mesaba's creditors committee filed a motion Thursday in bankruptcy court to support the deal. Both airlines have been operating under bankruptcy court protection for more than a year, Mesaba's financial woes triggered largely by Northwest missing payments to the carrier. Northwest said Thursday that the sale would secure Mesaba's future by locking in current flight operations and positioning Mesaba for growth.

Jan 4, 2007

UAL Stock Soars To New High

Shares in United Airlines parent UAL Corp. surged to a new high Wednesday following bullish reports by Wall Street analysts about its earnings prospects in 2007. UAL's stock jumped as high as $47.18 on the Nasdaq stock market before closing at $46.36, up $2.36, or 5.4 percent. The intraday high marked the stock's peak since it began trading at $40 in February following a three-year bankruptcy restructuring. The rise came amid a strong showing by airline stocks overall, as the American Stock Exchange airline index climbed nearly 4 percent on lower crude oil prices. Oil for February delivery on the New York Mercantile Exchange fell $2.73, or 4.5 percent, to a six-week low of $58.32 a barrel. Jet fuel is among an airline's top costs. UAL's jump was higher than those of its competitors, aided by a report by Goldman Sachs raising its price target, with expectations of strong earnings this year, and by an upgrade by Calyon Securities.

Who's Afraid of Virgin America

Note: Editorial

Virgin America planned to launch U.S. airline service this month with flights between San Francisco and New York. It would have added Los Angeles and Chicago later. Now that new service is up in the air because of outmoded U.S. rules banning foreigners from controlling domestic airlines. The U.S. Transportation Department decreed that Virgin America is too closely related to billionaire Richard Branson's Virgin Atlantic, so the feds late last month denied permission for Virgin America to operate until the airline can prove it's controlled by Americans. According to U.S. rules adopted in the 1930s, foreigners can't own more than 49 percent or control more than 25 percent of voting rights of U.S. airlines. The Transportation Department concluded that Virgin America's "close relationship" with British-based Virgin Group, parent of Virgin Atlantic, "indicates that the carrier is not under the actual control of U.S. citizens." This decision was hailed by organized labor and by some airlines, notably Continental. The Air Line Pilots Union raised the concern that changing the rules would create a national security problem.

Jan. 3, 2007

Southwest Plans Gradual DIA Growth

Even 50 daily flights out of Denver "isn't enough for a market of that size," Southwest Airlines chief executive Gary Kelly said Tuesday, but the carrier plans to grow slowly and in a "reasoned way." A year after it started operations here, Southwest has more than 30 daily departures from Denver, making it a distant No. 3 behind United Airlines and Frontier Airlines at Denver International Airport.
Southwest has a much larger presence at other airports - more than 200 daily departures in Las Vegas, Chicago and Phoenix, and more than 150 in Baltimore, for example.
"I think that is the potential for Southwest Airlines in Denver," Kelly said. "That's a theoretical answer. We're many years away from that, probably." At this point, he said, "We just don't know how big the market is." Southwest expects to begin using a fifth gate at DIA in March.

Budget Airlines Have Tough Job Convincing Skeptics

The proliferation of budget airlines across Asia has made air travel affordable for millions, but this week's aircraft disaster in Indonesia has underlined the challenge for governments to ensure safety standards are met. Analysts say there is no hard evidence that budget airlines are more accident-prone than full-service carriers, but admit they have a harder job convincing the public they are not cutting corners as well as costs. The biggest challenge, they say, is for government and regulatory agencies to ensure that infrastructure and safety norms are sufficient to meet a surge in demand for air travel.

I-PASS For Air Travelers

If you do a slow burn watching the airlines' "elite" customers breeze through the express lane at airport security, you may snort flames when the federal government's Registered Traveler service comes to an airport you patronize. That could be soon. The program, under which prescreened frequent fliers pay $100 a year for the right to cut in line, is expected to be up and running in five airports by the end of January. At least 20 more--including Chicago's O'Hare and Midway--have shown interest in the program.

Dec 14 2006

Once the frenzy has subsided, and all the airline industry consolidation has been digested, Chicago could find itself home to the country's biggest carrier, a supersize United Airlines, or home to none at all.
Passengers could be looking at higher fares or more bargains. They also could be in for a long, confusing period of service upheaval, industry analysts say. Tens of thousands of workers could be affected as airlines merge, with some getting bigger and others disappearing. Nothing was for certain Wednesday, except that it had been a remarkable 24 hours for airline takeover action and merger talk, as an industry that has appeared ripe for consolidation for years suddenly began moving toward one of the biggest, and maybe fastest, realignments ever seen in American business. "This is the big bang," said Kevin Mitchell, chairman of the Business Travel Coalition, a Radnor, Pa.-based advocacy group for corporate buyers of air travel. "Everything could happen from here."

Dec 8, 2006

Unrest In The Air At United

United Airlines' pilots union said Wednesday that it is establishing a "strike preparation committee," a signal that labor unrest is building at the world's second-largest airline. In a special session this week, union leaders for the Air Line Pilots Association unanimously voted to form the committee, typically used to coordinate activities during contentious contract talks, even though the present labor agreements for pilots and other union employees at United run through 2009. Union leaders said they are ratcheting up their rhetoric in reaction to growing anger by many pilots over what they see as a disparity between management and employee pay. "They're certainly sending a message to management that they're not going to roll over," said George Hopkins, a labor historian. While United pilots and other workers are locked into long-term contracts that forced steep pay cuts, some executives have reaped salary increases and other perks. Particularly contentious are the 40 percent pay raises granted by United's board in September to Chief Executive Glenn Tilton and Chief Operating Officer Peter McDonald.
United Pilots Flex Brawn

A strike-preparedness panel is being formed, suggesting a return to "hard-nosed tactics." The pilots union at United Airlines is forming a strike-preparedness committee, saying it wants improvements to its labor contract as the company returns to profitability and senior managers are awarded "huge pay raises." "We have always worked with this company under the protocol of shared sacrifice," Steve Derebey, spokesman for the Air Line Pilots Association at United, told members in a recorded phone message Tuesday night. "The company has clearly signaled that they have returned to profitability by granting some senior management individuals huge pay raises. "Pilots - the very group who saved this airline from the scrap heap of failed airlines - deserve the same return on our investment." United spokeswoman Jean Medina said in a written statement that the company has "been through a challenging time" and has "emerged from an extremely difficult restructuring."

UAL Suffers Setback in Foreign-Ownership Decision

A decision by the Bush administration to continue limiting foreign ownership of domestic airlines is a blow to United Airlines, a strong advocate of international consolidation. Transportation Secretary Mary Peters announced Wednesday that the current limit, which prevents foreign investors from owning more than 25% of a U.S. air carrier, would remain in place. Merging with a foreign carrier could provide United greater revenue and pricing power, more passengers, more destinations and more investment capital, airline analysts said. The decision prevents large infusions of foreign capital into U.S. carriers, said Michael Roach of Bay Area airlines consultancy Roach & Sbarra. It also limits United to U.S. carriers as potential merger partners. “That’s a negative for United, and a big negative,” Mr. Roach said.

Travelers Rank DIA No. 1

Thundershowers, heavy snowstorms and severe winds spiraling off the Rockies can make flying into and out of Denver a bit harrowing on any given day. But the traveling experience inside the confines of the city's main airport? First-rate, at least according to readers of Business Traveler magazine. Denver International Airport took top honors in the publication's 18th annual "Best in Business Travel Awards," the magazine said Monday. Readers chose DIA as the best airport in North America for the second year in a row. "I think the airport is exceptionally wonderful in both service and design," Adam Rodriguez, director of Business Traveler's North America operations, said in an e-mail. "Not only was it voted No. 1 in North America, but No. 4 in the world. This is quite the honor considering how often our readers travel." Readers also chose Denver-based Frontier Airlines as the country's best low-cost carrier, ranking it over bigger companies such as Southwest Airlines and JetBlue Airways.