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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

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

Americ