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Jan 28, 2007. United's TED Heading For The Hangar?

From the "Boyd Group"

It appears that effective in March, United may have stopped filing "TED" flight schedules with the OAG as distinct from from those of other United flights. Why they did this in the first place is a mystery, since TED was nothing more than mainline United flights with a different paint job.

Nevertheless, as noted earlier, it's pretty clear that the fascination at United with this concept has faded. The whole silly hype, burlesque, and tacky, totally inanetedsign2. JPG (10709 bytes) promotions (who can forget the web-based "salute to macaroni & cheese" in the initial ad blizzard?) - none of which succeeded in getting the public fired up - all died out late last year.

In light of huge compensation cuts and termination of employee pensions, it's hard to understand why United spent so much money to create a concept that had no real purpose and no real definable market niche. Fares didn't change. Costs didn't go down, either. Most Ted-painted airplanes operated within the United hub system.

Millions were questionably wasted on things like re-signing airports (which costs plenty at big places like Denver, LAX, and SFO), installing dual jetways at the Denver hub for "fast turns" that weren't needed, redoing backwalls, silly plastic in-flight cards announcing "Ted Tunes" and orange gate signs with incomprehensible statements like "Ted is happy to see you." Stuff that never registered with the flying public or anybody else, except maybe with the B-schoolers who probably convinced United management that Ted was, like, really, really a totally rad idea, dude.

Best guess, it's possible that there could be an announcement later this year to the effect that "TED has been successful beyond all our expectations, and is now no longer needed as a part of the re-structuring of United..." Or a slow quiet dissolution of the concept. Anything to divert attention from the fact that as a marketing program, Ted's become the airline equivalent of New Coke.

More United, Delta Combination Stories

By THE ASSOCIATED PRESS November 15, 2007 from the NYTimes

ATLANTA (AP) -- United Airlines and Delta Air Lines have been
discussing a combination between the nation's second- and
third-largest carriers that would keep the United name and the
corporate headquarters in Chicago, according to an official with
knowledge of the talks.

The reported talks come as all airline executives are wrestling with
the implication of oil prices hovering close to $100 a barrel. That
has sharply boosted jet fuel expenses -- and accelerated a search for
ways to cut costs, which typically are the result of airline takeovers.

Earlier Wednesday, Delta said its board established a special
committee to work with management to review and analyze strategic options for the airline. Top executives have said recently they are trying to determine whether consolidation makes sense for Delta.

Delta issued a statement denying ''published reports that it had
engaged in merger talk with United.'' CEO Richard Anderson was quoted as saying, ''There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions. ''

United called the report of recent talks ''wholly inaccurate.' '

The Wall Street Journal's online edition, citing unidentified people,
reported Wednesday that Anderson has informally talked about
consolidation possibilities with counterparts at other airlines,
including senior executives at United and Northwest Airlines.

Then-Delta CEO Gerald Grinstein said during a stop in New York on Oct. 12, 2006, that he had previously received ''feelers'' from United about a possible merger.

There is a sense of urgency in the most recent talks, which have been going on for some time and continued as recently as a week or so ago, the official with knowledge of the talks said Wednesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly. The official stood by the assertions about the talks after learning of the statements by Delta Air Lines Inc. and United, a unit of UAL Corp.

''They want to get something done before a new administration gets in and so they get the clock ticking on'' federal regulatory approval,
the official said.

Financial details were not clear. But the talks involve United being
the name of the combined airlines, the headquarters staying in Chicago and Delta's Atlanta hub being an operational center for the two carriers, the official said. One possible scenario involves Delta's
Anderson being the chief of the combined airline, the official said.

Delta also has had talks with other airlines, the official said,
without specifying which airline or the status of any such talks.

Shares of Delta rose 77 cents, or 4.1 percent, to $19.52 Wednesday
while UAL shares gained 67 cents, or 1.5 percent, to $44.17.

When Anderson was named in August as Delta CEO to replace Grinstein, there was immediate speculation in the investment community that Delta and Northwest might eventually merge. Anderson is a former CEO of Northwest Airlines Corp.

Anderson immediately tried to dispel such speculation, telling Delta
employees he wasn't coming to Delta to facilitate a deal with Eagan,
Minn.-based Northwest.

Delta's initial statement Wednesday about the establishment of a board committee followed the release of a letter by a hedge fund that owns 7 million Delta shares that called on the airline to consider combining with UAL.

Pardus Capital Management LP said in the letter to Delta's top
management that it is ''imperative' ' that the company undertake a
merger transaction with another airline in view of soaring fuel prices
and what it described as the increased risks of going it alone.

''Consolidation is needed to de-risk the industry and time is of the
essence as now is the right regulatory environment, '' said Karim
Samii, president of Pardus, and Shane Larson, a principal.

The hedge fund executives said they had determined since making a
similar recommendation in a Sept. 7 letter that ''the most attractive
and practical combination would be a Delta and United Airlines
combination. ''

It cited figures from a consulting firm estimating that the benefits
of such a pairing would be about $585 million and said a combined
Delta-United would boast a broader network than any other combination.

Pardus also owned 5.6 million shares of Chicago-based UAL as of Sept. 30.

Pardus executives said a Delta combination with Northwest would
produce even bigger benefits of about $1.5 billion, primarily from
combining the smallest hubs -- Detroit/Cincinnati and Memphis/Atlanta.

''However, Northwest may not enable Delta to complete the breadth of network that business travelers require, resulting in the need for a
potential follow-on transaction at a later date in order to achieve
the same breadth of network that UAL would provide out of the box.''

Pardus, citing information provided by the air transport consultancy
Simat, Helliesen & Eichner Inc., said a third potential combination,
with Continental Airlines Inc., would produce no synergies and would raise other challenges.

Robert Mann, an airline consultant in Port Washington, N.Y., said
United's broad Pacific network and Delta's huge Atlantic presence
would complement each other. However, he said, combining fleet
information systems and labor could pose challenges. The biggest
problem would be that neither carrier has any recent track record of
integration, he said.

''I would see this as a very risky move from the standpoint of the
actual implementation, '' Mann said.

Sen. Byron Dorgan, D-N.D., a member of the Senate Commerce Committee's subcommittee on aviation operations, safety and security, issued a statement saying he was troubled by the hedge fund's push for a merger.

''I hope the hedge funds and the airlines will both understand that
there will be substantial resistance here in the U.S. Congress to a
merger between two of the largest three airlines in America,'' Dorgan
said.

AP Business Writer Dave Carpenter in Chicago contributed to this report.
------------ --------- --------- -
November 15, 2007
Rumors, Merger Talk and Denial by Airlines
By JEFF BAILEY NYTimes

Long-simmering talk of an inevitable round of airline industry mergers heated up again yesterday. By the end of the day, after a spike in their share prices, the central players in any merger talks, dismissed the rumors as just that.

Many airline executives have said they are in favor of consolidation,
in theory, to help reduce costs and improve historically meager profits.

And they were given a push by Pardus Capital Management —a New York hedge fund that holds big stakes in UAL, parent of United Airlines, and in Delta Air Lines — which sent Delta a letter Tuesday night suggesting that the two carriers merge soon.

"We believe it is imperative that you seek to enter into a merger
transaction, " Karim Samii, president of Pardus, wrote to Richard
Anderson, chief executive of Delta. The topic line of the letter said:
"Time is of the essence to announce a transaction with UAL."

Pardus hopes that a merger of the second- and third-largest airlines
would capture more business travelers and help the carriers navigate
the fuel prices that threaten to snuff out the industry's nascent
recovery.

Delta promptly responded that it was, indeed, in favor of industry
consolidation, but that it was not involved in merger discussions with United.

Delta said the airline's board had previously appointed a special
committee to evaluate, among other strategic options, merger
possibilities and that it had retained financial and legal advisers.

Thus, after the companies' shares briefly rallied when an Associated
Press report said United and Delta had actually been discussing a
combination — a report subsequently denied by both companies — the shares showed only modest gains yesterday. Shares of Delta rose 77 cents, to $19.77. Shares of United rose 67 cents, to $44.17.

Both companies are valued at approximately $5 billion. A
stock-for-stock deal, with no premium, as Pardus proposed, would
create a company with a roughly $10 billion market capitalization,
depending on investors' reaction to the combination.

Although most executives acknowledge the need for mergers to reduce costs, the reality of doing so gives them pause.

The industry has a long history of difficult mergers. The most recent
example is US Airways, the product of a merger two years ago with
America West Airlines.

There, pilots are battling over how to reconcile union seniority
lists, a sticking point that is holding up the company's ability to
operate as a single airline. Combining computer systems has led to
severe service disruptions.

Shares of US Airways have plunged from their 12-month high of $63.27, reached around the time it made an unsuccessful $10 billion bid for Delta a year ago, to $23.48 late yesterday.

Workers at Delta and United would most likely be skittish about any combination that reduced employment or job security, having just made huge pay and benefit concessions to survive separate bankruptcies.

To be sure, since the initial US Airways bid for Delta a year ago, big airlines have had tentative discussions with one another about
merging. Delta talked to Northwest Airlines at one point. United
talked to Continental Airlines. But nothing concrete came of those talks.

Pardus said in its letter that it owns 7 million Delta shares, or
about 2.6 percent. And Securities and Exchange Commission filings
indicate it owns 5.6 million shares in UAL, or about 4.8 percent. The industry has been modestly profitable last year and this year and was building a cash cushion until fuel prices soared in recent weeks.

Pardus said in its letter that the rise in fuel costs could hurt
Delta's financial prospects next year. Airlines are trying to raise
fares to make up for the higher cost of fuel, which accounts for about one-third of expenses, but with only limited success.

Pardus said in its letter that it had consulted with Gordon M.
Bethune, a former chief executive of Continental Airlines, and with
consultants at Simat, Helliesen & Eichner to conclude that United was the best merger partner for Delta.

Combined costs could be reduced by $585 million a year, it said. And the airlines' complementary strengths would give it the breadth to capture more business travelers. United, after all, has a big presence on Asia routes, in the western United States and at Heathrow Airport, serving London. Delta is strong in the southern United States, at Kennedy International Airport in New York and in Europe and Latin America.

A combination of Delta and Northwest Airlines would allow more
cost-cutting — $1.5 billion a year because of enormous overlap in
domestic hubs — but provide less international breadth, Pardus said.

The US Airways takeover proposal for Delta was also mostly aimed at reducing domestic costs and ran into opposition from labor groups and from some politicians, fearful that service would have been reduced in some cities.

Pardus mentioned that "the current regulatory environment, " meaning the Bush administration as opposed to a possible Democratic president, is favorable and thus a merger ought to happen soon.

Micheline Maynard contributed reporting.
============ ========

Isakson: Delta would be 'survivor'

By JIM THARPE
The Atlanta Journal-Constitution
                  Published on:    11/14/07
U.S. Sen. Johnny Isakson (R-Georgia) said Wednesday he was personally given assurances by Delta CEO Richard H. Anderson that Anderson would back a merger only if "Delta is the survivor" and the carrier continued to be based in Atlanta.

Isakson, a leading voice on aviation issues during his time in the Georgia State House, the U.S. House of Representatives and now the U.S. Senate, said he invited Anderson to his office to discuss rumors that Delta Airlines and United Airlines were in merger talks.

Anderson has denied the two are in any active talks, and Isakson said news reports surfaced Wednesday because hedge funds heavily invested in the airlines "floated a letter [speculating about a merger] for a quick hit."

The two men met for about 30 minutes, Isakson said. Anderson was in Washington to testify before a House subcommittee about airline preparations for the holiday travel season.

"Richard said, 'We want Delta in Atlanta. We want Delta to be the surviving airline. We want the employees to be for it. And that's the only way it will end,'" Isakson said.

November 14th 2007

Delta Air Lines denies reports of merger talks with United Airlines

SAN FRANCISCO (Thomson Financial) - Delta Air Lines Inc. on Wednesday denied published reports it has engaged in merger talk with UAL Corp.'s United Airlines.

In a statement, Delta Chief Executive Richard Anderson, 'There have been no talks with United regarding any type of consolidation transaction and there are no such ongoing discussions. '

The Atlanta-based carrier said it wouldn't speculate on possible airline consolidation and has reiterated its position on the issue.

Earlier, Delta responded to a letter from hedge-fund investor Pardus Capital Management LP calling for a consolidation of the airlines.

'We appreciate receiving Pardus' views on the best course for Delta's future,' said Anderson in the statement. 'We have been consistent in our public statements that Delta believes that the right consolidation transaction could generate significant value for ourshareholders and employees and that strategic options should be evaluated.'

Delta said that, prior to receiving Pardus' letter, it had established a special committee of the board to review strategic options to ensure Delta maintains its leadership position, including potential consolidation transactions.

Delta shares closed Wednesday's regular session up 4.3% at $19.56 and United's stockwas up 1.5% at $44.17%.

Katherine Hunt

On United's 3rd Quarter

United Airlines opened up this week of earnings with good numbers. But – going forward, the airline's cost guidance was less than encouraging.

For the quarter, UAL Corp., parent of United Airlines announced better than expected results, as third quarter earnings came in at $295 million, or $1.96 per share adjusted to exclude one-time items, on $5.5 billion in revenue. Consensus had the airline coming in at $1.88 a share.

Including special items, the airline posted net income of $334 million or $2.21.

Operating revenue was up 6.8%, while operating expenses were up 5.9%. Operating income was up 96% to $656 million.

Revenue passenger miles dipped 0.3%, while available seat miles were down 1.5%. Load factor increased 1.1 points to 84.7%.

Yield was up a hefty 9.1% to 13.73 cents/mile, while passenger revenue per ASM was up 10.6% to 11.67 cents/ mile. Both very impressive numbers.

Cost per ASM was up 1.3% to 11.28 cents/mile, while cost per ASM, excluding fuel and special items was up 5.8% to 7.71 cents/mile.

The airline ended the quarter with $4.2 billion in cash.

This call opened up with fairly long intros from CEO Glenn Tilton, CFO Jake Brace, and EVP of Marketing and Sales John Tague.

Maybe it's my imagination, but it seemed that the intro comments from Glenn were more pithy than in the past. Instead of expounding with too many "corporate speak" platitudes, Glenn actually gave us a little bit of useful information this time. Nice change. Thanks.

I had no reason to worry though. Glenn redeemed himself later in the call.

On the call for the airline were Glenn, Jake, John, Pete McDonald the airline's COO, and Graham Atkinson, the airline's Chief Customer Officer. (CCO?)

No surprise that leading Tilton's comments was the fact the airline led the industry in its RASM performance for the quarter. Excluding special items, the airline's RASM was up 9.7% over last year.

Glenn was also fairly quick to point out that employees have earned more than $100 million in profit-sharing so far this year. While actual payouts will vary, depending on how well the airline does in the fourth quarter, given the employees' feelings toward the mega-payouts that management received as part of the airline's bankruptcy stay, I was not surprised to hear Tilton talk about the profit-sharing numbers so quickly in his comments.

In addition, as blatantly greedy as management was during the bankruptcy exit, Tilton did make one point that bears repeating. The profit-sharing plan at the airline now shares the same metrics for all employees -- with pay-out accruing essentially with the first dollar of pretax profit.

Unfortunately, Glenn then turned his attention to the business of "portfolio management" as opposed to running an airline, as he launched into his discussion of industry consolidation and how by "eliminating cross-subsidies we will strengthen these businesses and our core business." Speaking of portfolio management, I had to laugh when he actually used the word portfolio, as he said, "We are looking at every segment of our business to determine what is core and what is not, to eliminate cross- subsidies that mask inefficiencies. We are identifying how to unlock the value associated with the portfolio of businesses such as Mileage Plus and our maintenance division."

So, sports fans, there you have it. United Airlines is not an airline. It's a conglomerate of portfolio assets just ripe for the picking.

Obviously, this is where Glenn and company and I part company. Probably where I part company with a lot of investment bankers as well.

But that's another issue that we talk about almost every week. (See the US Airways, Republic, or JetBlue calls for calls that discuss running an airline, not an extension of a Wall Street investment house.)

Jake then took over the intro portion of the call and went into detail on many of the financial aspects of the airline's quarterly results.

Of course, no discussion would be complete without a look at the airline's amazing cash flow. As we all knew was going to happen, after the airline shed its pensions and less-than-advantageous leasing agreements, the airline is literally swimming in cash. This quarter it socked away another $342 million in cash flow -- 161% higher than last year. Free cash flow came in at $60 million this quarter, up from $38 million last year. Excluding the effects of the airline purchasing three aircraft during the quarter (they had been leased previously), the airline would have posted more than $200 million in free cash flow for the quarter.

On the balance sheet side, the airline saw its total debt reduced by $210 million. The airline ended the quarter with total debt of $12.2 billion. Year to date the airline has reduced its debt by $1.6 billion.

John Tague then came on the call and started talking about operational performance. Clearly, again, international is where the RASM sweet spot was, as the airline saw international PRASM up 10.8%. And here is an interesting stat. If you remember,American Airlines did not do that well this quarter on its trans-Atlantic RASM. United didn't have the same problem. United posted a 12.2% growth in trans-Atlantic PRASM. This was on top of a 4.4% increase in international capacity.

Anyone have a potential explanation for this? I do, but I'll wait and see what your great minds can come up with.

Speaking directly to American's numbers, Tague told those on the call that flights into Heathrow did quite well, with year-over-year RASM growth in the low double-digits.

As to the ever-asked question concerning declines in the economy and how this is affecting the airline industry, Tague told analysts this week, "From our perspective, we are not seeing any evidence of a slowdown in demand. Looking close in at the fourth quarter, we expect strong and balanced unit revenue growth both internationally and domestically. Bottom line is that we are encouraged about our revenue performance as we look forward to 2008."

John also came out with a notable phrase describing the industry's penchant for throwing capacity into a market -- but that will come up again later, as analyst Gary Chase had the same reaction to it as I did, apparently.

On the guidance side, Jake came back on the call at this point to tell analysts that the airline is purposely being conservative with its fourth quarter forecasts. Having said that, he then said "For the fourth quarter, we expect North American capacity to be down 4.5 to 5.5% while international capacity is expected to be up 4.5% to 5.5%. Overall for the quarter, main line capacity is expected to be down one-half to one and a half percent. Express capacities are expected to be up 2.5 to 3.5% resulting in fourth-quarter consolidated capacity flat to down 1%. For the full-year 2007, we expect main line capacity to be down .5% to 1.5% and consolidated capacity to be flat to down 1%. For 2008, we expect main line capacity to be flat to up 1% with domestic main line capacity down 3 to 4% and international capacity up 5.5 to 6.5%. We expect United Express capacity to be up 1 to 2% leading to consolidated capacity being flat to up 1%. Having said all that, we retain the abilities to further reduce capacity if necessary, as we have a large number of unencumbered aircraft and as well as some that come up for lease renewal next year."

On the cost side, Brace said, "We estimate that main line CASM, ex-fuel, and special charges, will be up 6 to 6.5% in the fourth quarter. Approximately half of the year-over-year increase is driven by higher maintenance cost due to increased heavy maintenance volumes, both air-frame and engine as well rate increases in some of our outsourcing contracts. Another one point of the increase is due to lower operating expenses in the fourth quarter of 2006 from the two favorable insurance settlements. Higher profit sharing expenses is causing one point of the year over year increase. Since the end of the second quarter, our earnings forecast has risen causing a substantial increase to our profit-sharing expectation. While we didn't provide explicit cost guidance in the fourth quarter, if you used the data we provided for the three quarters and the full year, you would have backed into an increase in fourth quarter CASM ex-fuel of 4.8% based on our previous guidance. That obviously at midpoint is being raised to 6.25%, an increase of some 1.4 points. There are three things that drive that. One, is we have further lowered capacity versus the previous guidance we gave you. Second, I just mentioned our profit-sharing expectations have grown for the year. I would note that we book profit-sharing a little differently than some of our competitors in that we estimate our full-year profit and then we book a proportion of that in each quarter and since our full-year profit expectations have gone up, the amount that we will book in the fourth quarter has also gone up. And then the third piece that has increased our guidance somewhat modestly is maintenance expenses and we can talk about that more in the Q & A. For the full-year 2007, CASM, ex-fuel, special charges and severance is expected to be up about 2.5%, slightly higher than our prior guidance, reflecting higher maintenance cost and increased profit sharing I just mentioned."

With that, the floor was open.

Frank Boroch with Bear Stearns was first on the call, as he asked Glenn to "maybe shed some light on the 250 initiatives you alluded to. Sort of what is first up in the five-year strategic plan you can share with us today?"

I couldn't help but stifle a choke.

Yes, tell us more about those 250 initiatives. (Notice, I left that out of my initial Tilton notes overview.)

Glenn responded, "Frank, there are two types of initiatives -- we appreciate the question -- that we are focusing on. Strategic as I mentioned in my comments and I think Jake and John have both referred to them. We discussed with the Board. We are further along in developing the possibility of the MRO transaction than we are with Mileage Plus. We've said previously that we are focusing both as businesses within the portfolio of businesses at United so we can clearly make a distinction as to their value. We hope to have a P&L for Mileage Plus developed by the first of the year and then we will run the business accordingly. But we are further along with the maintenance division. The 250 initiatives really speak to the issue of the core business. We have initiatives all across the business that are a function of the $4 billion capital budget we have allocated across the strat plan, and they cover the full spectrum of the margin from revenue, all of John's initiatives he alluded to in his comments, to Peter and the management of the operation and Graham in the customer experience initiative we have under way. The point we want to make with 250, we have reached the point that the improvement we expect of ourselves throughout the five-year plan is going to come in smaller increments than those you might be accustomed too. For a company that has just come out of restructuring we got used to talking of increments of value in large numbers. These are going to run the full spectrum from tens of thousands up to millions. And I think that is the point we wanted to make with 250. We also wanted to make the point that we are very transparent in the way we account for the accountability around these initiatives, Frank."

Got that?

We had a great example of "Glenn-Speak" on the next response as Glenn responded to another question from Frank. Frank asked, with oil at $90 a barrel, has the likelihood of industry consolidation increased?"

Glenn responded with a fairly long rambling response, at the end of which he concluded, "With respect to recession, John spoke to the fact that in our business anyway, we aren't seeing any evidence of it, Frank, but my view is that at some point, we are all going to do the work that we are able to do -- independent of one another -- and at some point we should turn our attention at the synergies that exist between us in the industry which we would classify at our vernacular here at Unitedas unnecessary waste."

To which Frank responded, "Great, okay."

Gary Chase from Lehman Brothers then came on the call and wondered about the "slavish reliance on marginal economics" that John had mentioned earlier. Ah...could he explain this a bit more.

To which Glenn said, "That is exactly what he said."

At which point Gary responded,"Ah, well, can you explain to us on the international side, what is the opportunity that is driving, you know, the need to dial up the growth there, because it seems like that is what you are doing is supplanting domestic for international."

John responded,"Yes. I think as it relates to the capacity guidance, while we are not providing quarterly guidance for next year, you should assume the capacity reduction is coming out of the first six months of next year as we dialed our capacity down throughout 2007."

To which Gary said, "Right."

John then followed up with, "We think that is the right place to be. We simply reject the idea that capacity plans should remain stagnant regardless of the price of fuel. It just doesn't calculate, but we are quite comfortable but retain the flexibility as Jake said to move up or down. We have been relatively cautious in terms of international growth as compared to some of our peers but are growing at a rate that is greater than others. I think as Glenn pointed out we continue to have significant opportunities to re-optimize within the existing fleet so we are eliminating some marginal performing routes in favor of greater opportunities. We are also improving our asset utilization as we relook at some of our maintenance criteria. So we are getting good economics out of the existing fleet. We, too, are cautious as to whether these unit revenue growth rates will continue to run at the level they are, and consequently, I think that is reflected in a relatively modest growth rate for international next year. But international margins are recovering quite nicely."

Gary was undaunted in his quest. "Is there any way to characterize what you are doing domestically? Does it come disproportionately from one area?"

John answered, "I think as we have done really throughout the last three to four years, we have worked very hard to maintain the depth and breadth of our schedule and the scheduled quality particularly for our corporate customers. That has been achieved by effectively utilizing the 70-seat regional jet capability, moving our wide- bodies into more effective use internationally and consequently, simply down gauging the domestic network and that has been the answer in terms of margin performance. Others are pursuing up-gauging in pursuit of lower marginal cost to then again in our view accept unprofitable marginal demand. We are just going to continue down this path, and we are very pleased with the results. I will point out that we don't think we are executing as well as we will be able to in the future on the revenue side, and there are lots more make our luck opportunities on the revenue side of United."

Gary then asked, "So, no big red zones we need to be aware of, right?"

John said,"We are seeing a very, very balanced outcome across the entities that tells us our capacity allocation is on target right now. But you know, we are, you know, we are very, very keen to re-evaluate. The wonderful thing about airplanes is that they are movable."

There's a quote.

Gary then asked John to clarify on the airline's strong trans-con performance: "And then just a quick question on the 13% trans-con gain, is that in Virgin overlap markets only or is that for the entire trans-con entity for United?"

John responded that it was for the entire trans-con entity. The only info he would give concerning Virgin overlap markets was to say that during the quarter both JFK and San Francisco, which would have the most Virgin overlap, posted positive revenue growth year-over-year. But he did not say how much.

There was a funny moment in the call when the speakers went dead. Robert Barry from Goldman Sachs was trying to ask a question. Everything was finally fixed, and he came back on. "Let me see if I can remember my question."

Glenn responded, "Robert, it wasn't anything you said."

On the issue of selling off Mileage Plus, Jake reaffirmed that the airline wants to get a more transparent accounting of the unit done by the first of 2008. "Where we go from there we haven't determined yet because the first step really, want to see what that business looks like, what the opportunities are, but we will look at that and move quickly beyond -- once we have visibility into the P&L and what that entity really looks like. Not -- we don't have a specific timing. We haven't decided what to do and whether to share the P&L information. Obviously our bias is to both share the information and to do something that creates shareholder value with that entity. That is our bias and we intend to act pretty quickly after January 1."

Mike Linenberg from Merrill Lynch came on the call and asked a question that helped to explain why it was that United could have outperformed American to such an extent on its trans-Atlantic, and particularly Heathrow, service.

Last year, United still had its New York service in place.

John agreed that the airline is benefiting from the elimination of its New York service.

Bill Greene from Morgan Stanley brought up the question of dividends. While Glenn kind of waffled and wandered around on the topic, Jake came in and explained pretty quickly that the current covenants in the airline's bank agreements prohibit the airline from paying a dividend or doing a buyback. "We are talking to them right now about that. Obviously don't have a resolution yet. So we are pushing the ball down the field in that regard. So obviously with what happened to the -- with the sub-prime meltdown -- this didn't help our situation in getting an amendment, but we are trying to work through those issues with the bank."

Not too long after this we had another Tilton tidbit for the growing archives, as, in answering a question from analyst Ray Neidl in connection with pricing, Glenn opined, "Ray, we think it triangulates back to the benefit of disaggregating the businesses so you don't have the intrinsic subsidy issue in the portfolio which could actually extend to the subsidizing effect of a fuel hedge."

Glenn, we love you.

Kevin Crissey from UBS came on the call and asked a number of questions concerning a possible Mileage Plus spin-off. Nothing really new in the back and forth between Kevin and Jake on that matter.

Jamie Baker from JP Morgan then came on the line with a little bit of humor, as he said, "Good morning gentleman. Your earlier technical delay would have been more entertaining if you piped in channel 9."

Baker then asked a few questions concerning a possible MRO spinoff, which concluded with Jake saying, "It wouldn't be any commitment until we actually had a deal with the union."

Glenn added, "Jamie, when you think about it, the answer to your question is probably contingent upon who the interested party that succeeds would be and what their perception would be about the economics of such a transaction, including the labor transaction."

Got that Jamie?

Dan McKenzie with Credit Suisse then came on the line and asked if the airline had seen any cutbacks in corporate travel spending.

Answer? No. In fact, as Glenn said, the airline has been actively looking for them. But nothing substantial had been seen. "It actually seems the economic concern is driving them to compete on a face-to-face basis looking for an edge, such at least in the near term in this period as to we are not yet able to call the next economic cycle as to when it begins and when we now experience significant change. We are actually seeing a sustaining experience."

Glenn, you're killing me.

Dan then asked about the "c" word again. "United has clearly been a strong advocate of industry consolidation, but two counter arguments have been that the political window has closed and then separately, concern has been expressed about consolidating at the peak of the earnings cycle. I am just wondering how do you respond to these industry concerns."

Glenn replied, "Two -- two points, first is, I think I said in the last call that we haven't really tested the political window at all other than in the context of a hostile attempt. So -- any perception that is consistent with that which you mentioned a moment ago is hypothetical. We haven't gone to Washington and tested the antitrust and the political window with the proposition of a constructive and accretive to all stakeholders transaction. Until we do, until the industry does, I don't think we are going to know the answer or not going to know the outcome. I do think at the smaller airline level, there has been some activity that led to constructive consolidation that was resolved with the various regulatory authority. So I am still of a mind that there is a tremendous amount of redundant overhead and redundant expenditure that amounts to waste that we, independent of consolidation, are pursuing on our own. It would be hugely accretive to stakeholders if we pursued it in context of consolidated industry to run that waste out of the industry."

Bad waste. Bad, bad waste.

Sorry, I couldn't resist.

Jake then added, "I would just add that the case where the economy is slowing and fuel is high, if that's all true, then that only makes the case for consolidation even stronger."

That was about it for the call.

My take on the airline's results? Revenue was clearly good. You can't argue with this, but expenses were higher than expected and going forward that is not going to change in the fourth quarter. The biggest news here was the continued shift in capacity from domestic to international markets. The airline has stepped up its 2008 targets in this regard.

Listening to all the airline's talk about its "five-year plan" reminds me of a failed run for governor that just took place here in Louisiana. One candidate never did give hard and fast responses to what he would actually do if elected. He would merely steer people to his "plan" that was posted on his website.

I found the whole thing rather uninspiring, as did the rest of the voters as he fell to defeat in the primary. I find repeated allusions to United's "five-year plan" similarly disengaging. And enough of the potential 250 ways to improve the airline.

Let's concentrate on maybe...10. And tell us what they are.

Other than that, we have to love Glenn Tilton. He gave us more entries in our expanding collection of Tilton Tidbits. Clearly I'm going to have to work on my "disaggregating of my triangulation of waste."

Good quarter for the guys in Chicago. Just wish we could have heard more about IT improvements, passenger enhancements, and other things that improve the life of an airline passenger -- and revenues -- instead of ways to spin off assets.

United Airlines Applauds Appointment of Captain Hank Krakowski, Chief Operating Officer for the FAA

CHICAGO, Sept. 17 /PRNewswire-FirstCall/ -- UAL Corporation (Nasdaq: UAUA), the holding company whose primary subsidiary is United Airlines, today applauded the appointment of Captain Hank Krakowski, United Airlines vice president of flight operations, by the Federal Aviation Administration (FAA) as its new Chief Operating Officer.

"The FAA plays a critical role in the management and modernization of our air traffic control system, the most pressing issue for the US airline industry today. We are proud of our ongoing commitment to safety and to addressing ATC issues, and are pleased that the FAA has chosen a member of the United team for this important role," says Pete McDonald, executive vice president and Chief Operating Officer. "Hank's unwavering commitment to the safe operation of our airline -- and his contributions to safety across the industry -- set him apart as a leader in aviation. We thank him for his many contributions during his 29 years at United and look forward to working with him going forward."

United's search for a new vice president of Flight Operations begins immediately. In the interim, senior Flight Operations managers who reported to Krakowski will report directly to Sean Donohue, senior vice president of Flight Operations and Onboard Service.

Aug 26th 2007 - Summary -- Starting 11/1 no more coach service charges for employees and retirees, and reduced service charges for First and Business.

United Airlines could sell maintenance stake (stake?)
By Laura Mandaro, MarketWatch
Last Update: 12:57 PM ET Aug 24, 2007

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.)

United (UAUA:
ual corp com new
Last: 43.90+0.19+0. 43%
1:52pm 08/24/2007
Delayed quote data

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.

SPECIAL NEWSREAL

Please Post Promptly Tuesday, January 22, 2008 and keep posted through 1/24
----------------------------------------------------
Today's Special News:

1. UAL Corp. Reports Highest Annual Pre-Tax Income Since 1999

2. Employees Earn 170 Million Dollars in Payments Related to Performance in 2007, Including 110 Million in Profit Sharing

3. Fourth Quarter and Annual Success Sharing Results

----------------------------------------------------
UAL Corp. Reports Highest Annual Pre-Tax Income Since 1999
----------------------------------------------------
UAL Corporation reported pre-tax income of 695 million dollars for 2007, the highest since 1999. Pre-tax income excluding special items was 606 million dollars, 665 million dollars higher than 2006.

The company's fourth-quarter results were negatively affected by the sharp rise in the price of fuel. While the company reported passenger unit revenue growth that was among the best in the industry, the strong revenue performance alone was not enough to counter the impact that rising fuel costs had on margins, as fuel prices rose more than 25 percent versus last year. As a result, the company reported an operating loss of 64 million dollars for the fourth quarter of 2007, a pre-tax loss of 98 million dollars and a net loss of 53 million dollars, 8 million dollars better than the fourth quarter of 2006.

The company:

* Reported annual diluted earnings per share of 2 dollars 79 cents despite a basic loss per share of 47 cents in the fourth quarter.

* Increased annual mainline passenger unit revenue (or PRASM) by 7.1 percent year-over-year, excluding special items, through continued capacity discipline and revenue execution, with fourth quarter mainline PRASM increasing 13.1 percent year-over-year.

* Continued its focus on controlling costs, with 2007 annual operating expenses increasing 1.1 percent versus 2006.

* Generated operating cash flow of 2.1 billion dollars in 2007, a 37 percent increase from 2006.

* Strengthened its balance sheet in 2007 by reducing on and off balance sheet debt by 2.3 billion dollars, including a reduction of nearly 700 million dollars in the fourth quarter. The company ended the year with an unrestricted cash and short-term investments balance of 3.6 billion dollars as of Dec. 31, 2007, and restricted cash of 0.8 billion dollars.

* Announced a special distribution of 2 dollars 15 cents per share of UAL common stock, or approximately 250 million dollars, to holders of record as of Jan. 9, 2008. The distribution will be made on Jan. 23, 2008.

* Reported that employees had earned about 170 million dollars of payments related to 2007 performance, composed of approximately 110 million dollars in Profit Sharing, 40 million dollars in Success Sharing incentives and 20 million dollars from the special distribution.
----------------------------------------------------
Employees Earn 170 Million Dollars in Payments Related to Performance in 2007, Including 110 Million in Profit Sharing
----------------------------------------------------
* On March 5, the company will issue checks to most U.S.-based employees for our Profit Sharing program, or, in the case of AFA-represented employees, contributions to their 401(k) plan accounts.

* Eligible employees can expect to receive a Profit Sharing payout of approximately 1,200 dollars before withholdings for every 30,000 dollars of eligible earnings.

----------------------------------------------------
Fourth Quarter and Annual Success Sharing Results
----------------------------------------------------
As announced in our fourth-quarter 2007 results, with 1.0 billion dollars in operating earnings for the year, we exceeded our annual operating earnings threshold for our Success Sharing program. This equates to an award level of 72 percent of target on our financial goal, which represents one-third of each individual's total Success Sharing opportunity. Most employees will receive this award on March 5 -- at the same time as their Profit Sharing award.

* The annual financial portion of the Success Sharing award is subject to an individual performance modifier for SAM and IFPTE-represented employees, based on their 2007 performance ratings. Thus, these employees will receive their Success Sharing payouts on April 9, shortly after the completion of the performance review process.

* We did not meet our goals for United Promoters and reliability results for fourth quarter 2007. As a result, there will be no payout for the quarter against those goals.

* Reliability for the quarter (or on-time departure :00) came in at 50.6 percent, 11.3 points below our goal of 61.9 percent. October, November and December results were 58.9 percent, 56.6 and 36.5 percent, respectively.

* United Promoters, our customer satisfaction rating, was 22.3 percent for the quarter, 9.4 points below goal. Results for October, November and December were 23.6 percent, 24.4 and 19.0 percent, respectively.

* For the Success Sharing program in 2008, we will move to an annual payout for all eligible employees on all goals, rather than a quarterly payout for on- time and United Promoters, and an annual payment for the financial goal. As a result, employees will receive one, more substantial check for meeting our goals, rather than up to five smaller checks, which the company believes will be better received, based on employee feedback about the program. For more detail on the 2008 program, see the December 18th NewsReal.
Jan 21, 2008
Category Daily Goal
On Time +00 34.9% 56.9%
Arrivals OT +14 47.2% 72.0%
Star OT +00 58.3% 75.0%
Completion Rate 97.4% 98.2%
Load Factor 77.7% --
Psgrs. Boarded 172354
Sch. Departures 1426

--~--~---------~--~----~------------~-------~--~----~

Top Civil Air Patrol Officers Killed  - Nov 8th 2007

The FAA and NTSB are investigating how two seasoned pilots, both senior officers in the Civil Air Patrol, flew into a mountain near Las Vegas Thursday evening. Col. Edwin Lewis, director of operations for CAP's western region, and Col. Dion DeCamp, commander of the Nevada unit, died when their CAP Cessna 182 hit 8,500-ft. Mt. Polosi, about 12 miles southwest of Las Vegas. According to the FAA preliminary report visibility was listed as 10 miles when the aircraft crashed about 7:15 p.m. Lewis retired from Pan Am in 1989 and was a NASA test pilot at Edwards Air Force Base. He'd been the for 50 years and was a former deputy national commander. DeCamp retired from American Airlines in 1994 and was a key organizer of the search for Steve Fossett. They were flying to Lewis's California home after delivering a display aircraft to Aviation Nation, an air show at Nellis Air Force Base in Las Vegas.

More on ED LEWIS from Dan Eikleberry.

While Ed Lewis was not a United pilot, he was a good friend to MANY United pilots, especially well known to those former Pan Am pilots who came over with the Pan Am mergers to United, and to those UA pilots who are members of the Secret Society of Quiet Birdmen.

I would like to comment because Ed and I were very good friends. I probably exchanged 4 or 5 email per day with him, because we have so much in common. Ed was born almost exactly 10 years before me, and we celebrated a joint 60th/70th birthday in May 2006 when I retired from United. Ed was still (and still was) flying as a test pilot for NASA at Edwards AFB (NASA facility there known as Dryden Research Center). He was current in at least the DC-8, the King Air, the Gulfstream G-II, the F-18, and various other strange aircraft. He flew over to Las Vegas in his personal Harmon Rocket (basically an RV-4 with a huge engine) for the party.

Ed was a member of the Quiet Birdmen, a 'secret' society of oh, about 35,000 pilots, and so am I. Ed and I are also on the QB national Executive Committee of 9 members, sort of like a board of directors for the organization, and to that extent we communicated 7 days a week. Ed also worked with two classmates of mine at NASA. And we were both members of the SFO QB's for 11 years until I moved to Vegas. Last year, Ed and I flew a formation of Yak-52's out of Denver Front Range airport.

On the day he died, Ed had flown the NASA DC-8 and a NASA King Air, then he jumped in a strange Australian aircraft known as the GA8, which is basically a box with wings, about the size of a Cessna 206, but without the turbo-prop engine of the Cessna Caravan, used by the CAP as a search and rescue aircraft. Ed flew the GA8 to Nellis AFB to position it for static display at the Aviation Nation airshow (Thunderbirds, all the great warbirds, etc -- great show). Then, he and the local commander of the CAP jumped in a new glass-cockpit Cessna 182 owned by the CAP in Las Vegas, took off from North Las Vegas airport and apparently tried to stay beneath the TCA (Class B airspace) and that took them right into Mt. Potosi, about 4 miles SW of my house, SW of Las Vegas, west of Jean, NV, east of Pahrump, NV.
They crashed into the side of 8500' Mt. Potosi at about the 6000' level.
A "TWA" (not the TWA we knew) airliner with Carole Lombard on it crashed at almost the exact same spot in 1942. Clark Gable come out to climb the mountain on foot.

DUBAI AVIATION EXPOSITION

EDITOR'S COMMENT

The greatest sum of orders at an airshow ever and the single biggest airline
order of all time are grabbing the headlines at the Dubai Air Show today.
From the moment the ruler of Dubai Sheikh Mohammed bin Rashid al Maktoum cut  the ribbon to open the 10th edition, manufacturers were lining up to confirm  orders and reinforcing the show's claim to become the world's number one show,  with more than $50 billion of business announced.
The greatest of the record-breakers was Emirates, which placed orders and
options worth some US $34.9 billion “ beating the total for the whole of the previous record of “breaking 2005 show by almost US $15 billion The orders were  for 120 Airbus A350s, 11 A380s and 12 Boeing 777-300ERs which opens the way for Emirates to become the world’s largest 777 operator within the next few years. Qatar Airways will not be far behind. The Gulf airline confirmed its $13.5 billion order for Boeing 787 Dreamliners and Boeing 777 aircraft“ and announced five additional orders for the freighter version of the 777. The long known about but unconfirmed deal for 27 GE powered 777s and 30 787s with
options on 35 more was finally formalised at the show.

The rest of the orders included Embraer regional jets for Virgin Nigeria, business jets from Cessna, Bombardier and Embraer and VIP helicopters for Agusta Westland. Petrolheads were swooning when Formula 1 driver Felipe Massa dropped in to sign for a Piaggio Avanti turbo-prop.

Dubai government also announced that it is to establish the world's largest
Maintenance, Repair and Overhaul (MRO) facility) , which will be part of the Dubai World Central Aviation City.

Alan Peaford
Editor, Flight Daily News

CHINA AIRLINES

Accident description: Date:  20 AUG 2007

Time:10:35

Flightnumber:120

Type Boeing 737-809

Operator: China Airlines

Registration: B-18616

First flight: 2002

Engines: 2 CFMI CFM56-7B26

Crew: Fatalities: 0 / Occupants: 8

Passengers: Fatalities: 0 / Occupants: 157

Total: Fatalities: 0 / Occupants: 165

Airplane damage: Written off

Location: Okinawa-Naha Airport (OKA) (Japan)

Departure airport:
Taipei-Taiwan Taoyuan International Airport (TPE/RCTP), Taiwan

Destination airport:
Okinawa-Naha Airport (OKA/ROAH), Japa

Narrative:
China Airlines flight 120 departed Taipei at 08:14. It landed at Naha Airport (OKA)

at 10:27 and taxied to the apron. Reaching the stand, ground engineers saw fuel gushing

from an area near the nr.2 engine pylon. The pilot shut off the fuel supply to the engines

after he was alerted by the ground engineer about the leak. Fuel from the leak flowed

beneath the aircraft towards the nr.1 engine. It remains unclear yet what ignited the fuel.

The fire engulfed the airplane.

When all occupants had evacuated, a large explosion occurred in the centre of the airplane.

The airplane burned out completely.

Investigation revealed a bolt from a right wing slat piercing the fuel tank.

The hole was about 0.8-1.2 inches in diameter.

.

Airline Industry Musings

By Ted Reed
TheStreet.com Staff Reporter
6/27/2007 10:14 AM EDT

The second biggest airline is by far the most puzzling.

Alone among the 10 largest carriers, United (UAUA - Cramer's Take - Stockpickr - Rating) has neither placed a major aircraft order recently nor expressed any interest in doing so. Instead, it seems singularly focused on finding a merger partner. The search has led nowhere -- not surprisingly, given that airline mergers rarely succeed.

Meanwhile, United's financial performance has been, to quote Winston Churchill, "a riddle, wrapped in a mystery, inside an enigma." Since it emerged from bankruptcy in February 2006, United has ridden a financial roller coaster. Its fortunes decline one minute, as they did in the first quarter, than rise the next, as they did last week.

Although it operates an imposing global route system at a time when international routes far outperform domestic ones, United sometimes appears to be floundering. "No analyst out there can figure out why they are not doing a better job," said aviation consultant Robert Mann. "This ought to be a gold mine."

Instead, United is viewed as having failed to get all it needed from a bankruptcy that consumed three years. By contrast, Delta (DAL - Cramer's Take - Stockpickr) spent 20 months in bankruptcy, yet remade itself. And United is often compared to American (AMR - Cramer's Take - Stockpickr - Rating), which has similar costs despite not entering bankruptcy at all.

United CEO Glenn Tilton came to the airline business with an outsider's perspective. Before joining United in 2002, he spent 32 years at Texaco, overseeing a 2001 merger with Chevron. Now, after less than four years in an insular industry staffed largely by lifers who are in love with it, he sometimes seems to tell airlines what to do.

United service has deteriorated. In 2006, United tied US Airways (LCC - Cramer's Take - Stockpickr - Rating) for highest complaint volume among the 18 largest airlines, according to the Department of Transportation. Also in 2006, United showed the industry's biggest service decline, according to the University of Michigan's American Customer Satisfaction Index.

Many United employees are unhappy. Hundreds demonstrated outside the annual meeting last month. Inside, others challenged Tilton over what they see as excessive pay and understaffing.

To be sure, there has never been a shortage of people with bad things to say about United management. By many measures, the airline's most successful CEO was Stephen Wolf. Between 1987 and 1994, he presided over unprecedented international growth and ordered hundreds of new airplanes, including the first 777 jets produced by Boeing (BA - Cramer's Take - Stockpickr - Rating). Yet Wolf was forced out, largely because of conflict with the pilots union.

Two weeks ago at an investor conference, CFO Jake Brace -- a Wolf lieutenant hired him from American in 1988 -- spoke of United's intentions. He defined what United wants in a merger partner, primarily strength in the Northeast and the South. He also said the carrier will not order airplanes for the foreseeable future.

United's 94 Boeing 737 jets average 18 years of age. They would normally be replaced after 25 years, Brace said, so United can wait until Airbus and Boeing come up with something new.

"We've been encouraging them to launch a new generation narrowbody, [to do] what the 787 and the A350 will do for the widebody," Brace said. "Our interest is in replacing them with that technology, which doesn't currently exist." Forrester Research analyst Henry Harteveldt says United is stalling, "hoping they will be bought before the airplanes would be delivered."

As for financial results, United's first quarter disappointed. The company lost $152 million and missed analyst expectations, just as it had in the fourth quarter. Yet in the third quarter, United led the industry, earning $190 million and producing better margins than its peers.

Recently, the news has been good. United's May unit revenue growth apparently led the industry. Last week, it forecast second-quarter unit revenue will rise, while costs will decline.

Subsequently, Cathay Financial analyst Susan Donofrio raised her price target for United to $40 from $30, while maintaining a neutral rating. Donofrio said the company's EBITDAR margin -- or cash flow as a percentage of revenue -- lags peers. She expects United to report a 2007 EBITDAR margin of 11%. Meanwhile, American, Continental (CAL - Cramer's Take - Stockpickr - Rating) and Delta will likely report margins of 17%, 15% and 15% respectively. United closed Tuesday at $38.61.

Standard & Poor's assigns United a rating of B stable, below investment grade. That puts it in the middle of the top 10 airlines, equivalent to Continental and Delta, with four carriers higher and three lower.

It is revealing to compare United with its peers.

American CEO Gerard Arpey has 25 years at the company. During his career, American has been involved in mergers with AirCal, Reno and TWA. All three are generally felt to have been failures, producing headaches but no value.

Arpey won't talk specifically about mergers, but American appears to be reluctant, more focused on winning by out-managing its competitors. Its unique initiatives include cutting costs by flattening seasonal flying, rather than chasing summer revenue.

Delta CEO Gerard Grinstein has 23 years in the industry. That includes time on Delta's board, which he joined in 1987 after Delta acquired Western Airlines, where he was CEO. The deal is considered a rare example of a successful airline combination, but Grinstein is no fan of mergers, calling them last resorts that enable failing airlines to survive. He rebuffed a 2005 approach by Tilton.

While they have low interest in mergers, both American and Delta have a high interest in new airplanes. American is ordering 737s to begin to replace its 300 MD80s -- which consultant Scott Hamilton notes are about the same age as United's 737s -- and talking about 787 orders. Delta, meanwhile, says it will likely order about 125 widebody jets this year.

For Mann, the consultant, seeking a merger means United "is swinging for the fences." Perhaps, he suggested, it should "try to hit a few singles.

Oskosh 2007

Witness: Signs of trouble prior to fatal warbird crash

By Bethany K. Warner
of The Northwestern

The pilot of a P-51 Mustang plane is dead after a collision with another P-51 Mustang on the north-south runway of the Experimental Aircraft Association's AirVenture Friday.

The two planes were flying in the Showcase flights, which is generally about an hour-long performance before the air show starts.

The P-51s were likely in the last group of showcase performers before the air show was to begin.

One of the planes came to rest on its nose on the side of the runway. The second plane ended upside about 100 feet behind the first plane.

After flipping upside down, witnesses said that plane burst into flames.

One pilot has been confirmed dead, according to a statement released by AirVenture spokesman Dick Knapinski. The second pilot had unspecified injuries, according to the release.

Witnesses said the pilot of the plane that ended up on its nose was able to walk away from that plane and first ran toward the burning plane before turning back and then falling to his knees.

Chuck Chall, of Brighton, Mich., saw the crash.

"I could see it developing," Chall said. "I could see it happening before it started."

According to Howell Herman, of Mt. Morris , Ill. , who also witnessed the crash, the second P-51 was coming in faster than the P-51 in front. He said at first, it looked like the second plane would overshoot the first.

Other witnesses said the second plane landed, but its propeller clipped the tail of the first plane, pushing it on to its nose. Witnesses said the second plane may have tried to swerve, but ended up flipping over the first plane, to finally land upside in the grass to the east of the runway.

"I was shocked," Herman said. "It's a tragedy. No one expects an accident. These guys are pros."

Onlookers said they realized that they had likely witnessed a fatal accident when they saw emergency responders begin to cover the airplane with a tarp.

“That’s what upset us most. You can replace the metal you can’t replace the man,” said Barry Morris from Georgia .

The Northwestern will update this story as it develops.

Bethany K. Warner: (920) 426-6668 or bwarner@thenorthwestern.com

Comparative Employee Question Answered

It was noted last week that as Delta emerges from Chapter 11, morale has probably never been higher.

At "coming out" parties, employees cheered and gave their CEO standing ovations. The CEO in return kept hammering back that it was the employees, not just he, that turned Delta around. At these events, presentations were given, showing how Delta has a clear, concise plan for the future, one of which its employees can be proud.

Compare and contrast the situation at United. Last week, that carrier's CEO appeared in front of hundreds of employees, too, who were attending an annual shareholders' meeting. He warned of dark, difficult times ahead for United, whose employees, unlike those at Delta, have completely lost most of their pensions. He again called for more airline consolidation, which, as we're seeing at US Airways, is just the thing to get morale up.

He defended his nearly $40 million benefit deal (plus nice goodies for his inner circle) claiming it was earned, even though United is losing money, and still, after three years in Chapter 11, has no real cost advantage over its competition. And he seemed to wonder why his employees are less then appreciative or proud of this fine track record.

Like at the Delta get-togethers, United employees applauded, too. But it was in response to statements from the audience including one from a UAL captain, who advised the CEO, "today, employees are no longer behind you." Signs carried by employees referred to management as "pigs" - likely due to stock deals that make it appear that senior management is feasting on the carrier while employees make do with 30%-40% pay cuts and a trashed pension.

The question is moot regarding which carrier has the best shot of survival.

At Delta, employees are toasting their management. At United, judging by what went on at the shareholders' meeting, employees feel management is toast

Click on this link for a page with more:

  Mid-Air Collision over the Amazon Basin. 

      The story from the Legacy Biz-jet passenger,

                 courtesy nytimes and more.

.

And also reports from the Lexington Crash.

And a report of the RJ200 flame-out and crash in Oct.2004

Nov 20, 2006

Ray Lahr wins TWA800 Freedom of Information Lawsuit on the Zoom Climb
(After 3 years of waiting for Judgment)
eMail from Ray Lahr and Bob Donaldson - TWA800.com ^ | 10/31/2006 | Ray Lahr

Zoom Climb Lawsuit

October 31, 2006

My individual battle to pry information out of the CIA, the NTSB, and
the NSA regarding TWA Flight 800 has been long, and lonely, and
expensive. But at last I have achieved a favorable judgment from the
federal court. Although Judge Matz emphasized that he is not expressing
any opinions pertaining to the underlying premise of a missile, he has
determined that I am entitled to most of the requested data and
calculations pertaining to the zoom-climb.

JUDGMENT OF THE COURT by Judge A. Howard Matz: Central Intelligence
Agency (CIA) shall produce to plaintiff the material set forth in
Exhibit A and the National Transportation Safety Board shall produce to
plaintiff the material set forth in Exhibit B.

Plaintiff may file a motion for award of attorneys fees and costs by not
later than 11/15/06. Defendants' response shall be filed not later than
12/20/06. Plaintiff's reply shall be filed by not later than 1/8/07.
Court will rule upon the papers without a hearing. Parties shall not be
precluded by the fact that they have approved this judgment as to form
from appealing any aspect of this judgment or of the orders dated
8/31/06 or 10/4/06 (See document for further details)(ir. )(Entered:
10/18/2006)

When and if I receive the requested information, I feel confident that
it will show that false assumptions were made regarding the zoom-climb
that was propounded in order to discredit the eyewitnesses who reported
seeing a missile. Namely, when the nose was blown off, the CG moved 10
feet aft, the aircraft immediately pitched up into a stall, and the
aircraft could never climb and then dive as depicted in the zoom-climb
scenario. This may be some vindication for this ALPA statement which was
included in the official NTSB TWA800 accident report:

"Furthermore, although ALPA does not doubt the technical capability of
the NTSB, we are concerned that this analysis was essentially
accomplished by only one individual at the Board, with little or no
party input or participation. It is a well known and accepted tenet of
engineering analysis that the output (results) can only be as accurate
as the input data."

Thus far, that input data has never been revealed. If it is released and
the zoom-climb is disproved, the government must then acknowledge the
eyewitness missile reports. Then the government must determine who fired
the missile.

Against all of the rules of evidence, the NTSB adopted the zoom- climb
conclusion without providing any supporting data or calculations. It is
unfortunate that the missile issue was avoided by this zoom-climb ruse.
If the missile issue had been squarely faced, TWA might be flying today.
Instead, TWA took the fall for allegedly operating an older aircraft
with maintenance that didn't detect a potential spark. Nonsense, that
accident wasn't TWA's fault. We can't role back the clock and reinstate
TWA, but we can, at least, clear TWA's name.

We don't know who fired the missile. But if it was terrorist missile,
and if that had become known, the country would have been alerted to the
terrorist threat, and 9/11 might possibly have been averted.

The defendants may appeal this judgment, and if they do, it will delay
the final decision. I would appreciate any support that ALPA might feel
free to give. In my opinion, it has always been apparent to pilots that
you can't blow apart the center section of the wing including the loss
of nose and cockpit, and still have the unbalanced and critically
damaged aircraft continue to fly and climb. There was no zoom-climb.
Three airline crews saw the airplane explode and fall down to the ocean.
Someday, the truth shall prevail.

Sincerely, Ray Lahr