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Taxpayers could foot airline pension bills
If carriers transfer liabilities to PBGC, system would be overwhelmed, airline retirees would face poverty
By Marilyn Geewax
Cox News Service
WASHINGTON - It's white-knuckle time for airline shareholders, workers and creditors as major carriers fight to pull out of their financial tailspin. And taxpayers should be worried, too.
They could be in for a very bumpy ride if carriers declare bankruptcy and transfer their $31 billion worth of pension liabilities to the Pension Benefit Guaranty Corp.
The pension agency, a federally backed insurance agency that protects the private retirement plans of more than 44 million workers, is itself running a deficit of $9.7 billion after years of absorbing the pension obligations of bankrupt employers.
Piling on the aviation industry's obligations could overwhelm the system and potentially lead to a massive taxpayer-funded bailout.
``If we get corporations dumping these vital pension plans, we're going to see one or more generations of Americans retiring in poverty,'' said John Hotz, deputy director of the Pension Rights Center, a nonprofit group that supports retiree rights. ``You're going to see our children having to bail us out.''
But with jet fuel selling at extremely high prices, labor negotiations floundering and competition growing, several major carriers may not be able to avoid bankruptcy reorganizations that could let them terminate their pension plans.
United Airlines, a unit of UAL Corp., already is bankrupt. In recent court documents, the No. 2 U.S. carrier has said it plans to skip nearly $500 million in pension contributions this fall. Moreover, it says it will probably have to terminate its four pension plans covering about 119,000 pilots, mechanics, bag handlers and other workers and retirees. The plans are underfunded by $8.3 billion.
If United were to walk away from those obligations, it would represent the largest such default ever by a U.S. employer.
Beyond United Airlines
But the problem goes far beyond United. US Airways Group Inc., which spent seven months in bankruptcy in 2002 and 2003, may be on the brink of insolvency again.
In March 2003, the carrier forced the pension agency to assume control of its pilots' pension plan, which was underfunded by about $2.5 billion. If US Airways were to declare bankruptcy again, the remainder of its pension plans ``potentially could come to us,'' agency spokesman Jeffrey Speicher said.
In an ominous sign earlier this month, US Airways asked the Internal Revenue Service for permission to defer $67.5 million in 2004 pension payments for its flight attendants and machinist unions.
Delta Air Lines, which has lost $5.6 billion over the past three years, also is in danger of bankruptcy.
If the pension insurer had to assume control of the pension plans of United, US Airways and Delta, healthier carriers might get dragged into bankruptcy too. That's because they might not be able to compete effectively against reorganized airlines that aren't burdened with pension costs.
James Klein, president of the American Benefits Council, a trade group for companies offering pensions, sounded a warning in a statement issued after United revealed its intentions.
``If United Airlines calls it quits on its plans, that is a very bad message,'' Klein said. ``It puts pressure on other companies in the same industry to consider their options,'' such as declaring bankruptcy and dumping their pension plans.
The Pension Benefits Guaranty Corp., created by Congress in 1974, is privately funded with the insurance premiums paid by companies sponsoring pension plans. ``PBGC does not enjoy the full faith and credit of the government,'' Speicher said.
So if it runs out of cash to pay the pension benefits of failed companies, the retirement safety net would unravel, leaving Americans with no assurance of getting the employer-backed pension checks they earned.
Pressure on Congress
However, Congress would be under tremendous political pressure to act, Speicher said. Potentially, it may face a financial mess as big as the savings-and-loan debacle of the late '80s.
Between 1986 and 1995, 1,043 thrift institutions failed, overwhelming the resources of the Federal Savings and Loan Insurance Corp. In the end, taxpayers had to cover about $124 billion in commitments made to insured depositors.
``It will be an absolute outrage if American taxpayers are stuck with a multibillion-dollar tab for another S&L-style bailout because of Washington's failure to adequately update pension laws,'' Rep. John Boehner, R-Ohio, chairman of the House Committee on Education & the Workforce, said in response to United's legal filings.
The House has held numerous hearings on reforming pension laws to reduce the likelihood of a PBGC default, but Congress has not acted. Because the agency has enough cash to make benefit payments for the pension plans it has taken over, the urgency of the situation may not be registering with lawmakers. ``I don't think anyone expects there to be any action this year,'' Speicher said.
In April, President Bush signed legislation that updated the formula that companies use to calculate pension-fund requirements, but it ``was not designed to shore up the PBGC,'' Speicher said.
The nation's pension problems started in 2000 when the stock market bubble burst. Since then, pension providers have been hurt by low interest rates, stock market losses, lower corporate earnings and an increase in the number of retirees. The PBGC estimates the private pension system is underfunded by more than $350 billion.
At one House hearing on pensions, PBGC's then-director Steve Kandarian said that ``if companies do not fund the pension promises they make, someone else will have to pay -- either workers in the form of reduced benefits, other companies in the form of higher PBGC premiums, or taxpayers in the form of a PBGC bailout.''
By C. J. CHIVERS MOSCOW, Aug. 25 — Investigators picked through the scattered wreckage today of two Russian passenger jets that crashed nearly simultaneously Tuesday night after leaving Moscow, and reported that they had found flight data recorders for both flights, officials said.
At least 89 people died in the crashes, according to the latest tally provided by Domodedovo International Airport, from where both planes took off late Tuesday.
As airport security was tightened throughout Russia, it remained unclear whether the crashes were an awful coincidence — a case of two jetliners leaving the same airfield and suffering catastrophic mishaps only minutes apart — or a carefully coordinated terrorist act that originated in Moscow's most modern airport. Russian officials emphasized that the causes for the crashes had not been found, and urged patience and calm.
"The experts are working," Dmitri Peskov, a spokesman for President Vladimir V. Putin, said in a telephone interview. "They are in the field. But it is a little bit early to be clear of the cause of this great tragedy."
Earlier in the day the Russian news service Interfax, citing an anonymous official, reported that minutes after the first plane went down, the second jet issued a distress signal indicating it had been hijacked. Then it, too, disappeared from radar.
Mr. Peskov said he was aware of the report, and that it was being investigated. "It is part of the job of the experts," he said, but neither dismissed nor endorsed the account. "There is no necessity now for speculation," he said.
Mr. Putin, who has been vacationing and working in the Black Sea resort of Sochi, and had ordered the F.S.B., one of the successor agencies to the K.G.B., to investigate the crashes, did not publicly discuss them today.
He was expected to meet Russia's transportation minister later in the day, and to make a statement after the meeting. The transportation minister is leading a state commission looking into the crashes.
Wreckage of the first plane, Volga AviaExpress Flight 1303, a Tupolev-134 en route to Volgograd, was found in the Tula region near the village of Kulchaki, about 100 miles south of Moscow, after disappearing from the radar at about 10:56 p.m.
The Domodedovo airport press service said the plane carried 35 passengers and a crew of 8; an official at the scene said the plane carried a crew of 9. Interfax reported that the plane was flown by the airline's general director, whom the company described as an experienced pilot.
Witnesses told authorities that the plane exploded before it crashed. The chief of the region's Ministry of Emergency Situations, Gennady Skachkov, told the RTR television news channel that there had been no distress signals or indications of trouble from the crew before the plane went down.
The second aircraft, Sibir Airlines Flight 1047, a Tupolev-154 bound for Sochi, disappeared from the radar over the Rostov-on-Don region, about 500 miles south of Moscow near Russia's border with Ukraine, minutes after the first jet crashed.
The Sibir Airlines flight carried 38 passengers and 8 crew members, according to the airport press service.
Sibir Airlines said it had little insight into the crash, and knew only that the flight had suddenly gone missing. "Flight 1047 disappeared from the radar of air traffic controllers at around 23:00," Yevgeny Selyanin, a spokesman for the airline, said in a telephone interview.
Both planes left in clear weather from the Domodedovo, which has only one terminal for domestic flights — circumstances that suggested the possibility of terrorism.
Sergei Ignatchenko, a spokesman for the F.S.B., said on NTV television that several theories were being explored, including pilot error, bad weather along the flight routes, low-quality fuel or terrorist acts. A spokesman for Domodedovo International Airport said all proper preflight procedures had been followed.
Russia has been engaged in a protracted war with its breakaway republic of Chechnya, from where terrorists have carried out several high-profile terrorist attacks in recent years. Shamil Basayev, a prominent rebel commander who is considered a terrorist by both Moscow and Washington, recently threatened more attacks.
A special election is scheduled for this weekend to replace the former Chechen president, Akhmad Kadyrov, who was assassinated in the spring. Chechen rebels, who tried and nearly succeeded in killing the interim president a few weeks ago, have vowed to assassinate whoever wins the election.
When Russia's ambassador to the United Nations, Andrey Denisov, was told of the initial report of the crashes, he said, "Now we have to see if there's terrorism," The Associated Press reported.
In Washington, a senior State Department official said the circumstances surrounding the crashes were being closely watched. "We are obviously concerned by the news," the official said. "We're following developments closely and trying to determine the facts."
In Moscow, the American Embassy said it had no reports of American citizens on either flight, but had not yet been able to confirm the information. A spokesman for Domodedovo airport told Interfax that a review of passenger lists found no foreign citizens on either plane.
The airport was open and functioning normally today, and providing emergency psychological services to relatives of victims, an airport official said in a telephone interview.
Tupolevs are the backbone of the Russian domestic passenger fleet, and have been in service for more than three decades. The Tupolev-134, used on shorter routes, can carry more than 90 passengers, depending on its configuration; the Tupolev-154 is a medium-range jet that can carry more than 160 passengers.
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By MICHELINE MAYNARD To the long list of things that used to be free but that airlines now want you to pay for, add walking up to the counter to buy a ticket.
Northwest Airlines said yesterday that starting on Friday, it would charge a $10 fee for issuing a ticket at its airport check-in desks. A fee of $5 will be charged on every ticket purchased over the phone from its reservation lines.
The only way to buy a ticket directly from Northwest without paying an extra fee will be through the airline's Web site. It sells about 16 percent of its tickets that way; 22 percent are bought over the phone, and only about 2 percent in person at airports.
The rest are sold through travel agents, or through travel-booking Web sites like Expedia.com or Travelocity.com.
Northwest said it did not think customers would be inconvenienced. "If you still want free, free is available," said Tim Griffin, the airline's executive vice president for marketing and distribution.
Mr. Griffin said the move "gives customers control over how much personal service they'd like to receive when buying a ticket." He said it was akin to the common industry practice of charging an extra fee for a paper ticket instead of electronic ticketing.
Customers who pay the booking fees when originally buying tickets will not be charged fees a second time if they change their travel plans, beyond the fee that the airline already charges for doing so.
Terry L. Trippler, a longtime industry consultant, said that Northwest's move, which has not yet been tried by any other major airline in the United States, would backfire. "I can't see where the consumer benefits from this in any way, shape or form," Mr. Trippler said.
Predicting that the new fees would become fodder for late-night talk show hosts, he said, "I'm not often speechless, but when I saw this, I sat back and said, 'What?' "
Northwest executives defended the fees as part of a broader effort to reduce distribution costs by $70 million a year, and said that the new policy was similar to those of low-fare airlines like JetBlue Airways and Independence Air. Northwest said those airlines charge $6 to $10 extra for round-trip tickets not purchased through their Web sites.
That is not how JetBlue and Independence Air would put it. Rather, their Web sites offer discounts for travelers who buy tickets electronically - $3 each way on JetBlue, $5 each way on Independence Air. Tickets bought at the airport or from airline reservations lines are simply sold at the advertised fare with no extra charge or discount.
Mr. Griffin said Northwest customers were smart enough to figure out that the discount airlines were charging more for buying tickets offline than online. "The math is the math," he said.
American Airlines, a unit of AMR and the nation's biggest carrier, said it did not plan to match Northwest's policy but would study it. Other airlines did not comment.
Mr. Trippler said he was surprised by Northwest's attempt to charge more for some tickets, given that the airline industry has had almost no luck in trying to raise prices to cover the high price of jet fuel, which has raised their collective costs by billions of dollars this year.
"Northwest has been afraid to sell an around-the-world ticket for $5 more than anybody," he said. "So I can't see that this will stick."
Mr. Griffin, for his part, said he saw no danger of a negative reaction to the charges from travelers who do not own computers or have Internet access, many of them low-income or elderly. He said he believed that the access issue had long ago been resolved.
During a recent local power interruption that disabled his home computer, Mr. Griffin said, his 14-year-old daughter simply went to a nearby library for access to the Internet.
"It's publicly available, only a library card away," Mr. Griffin said. "It's part of what we all do in 2004 in the United States."
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SINGAPORE (Reuters) - Singapore Airlines Ltd., the world's second most valuable airline, said on Wednesday it planned to buy up to 31 Boeing Co 777-300ER planes worth about US$7.35 billion to support growth plans.
The aircraft, 18 of which are to be ordered for delivery between 2006 and 2010, will be powered by huge engines from General Electric Co., Asia's most profitable airline said.
The remaining 13 are subject to the exercise of purchase rights, it said.
Singapore Airlines, known for a young fleet and premium service, had asked airframe manufacturers Boeing and Airbus SAS
in February to tender for an order.
The 777-300ER is the world's largest twin-jet, offering low maintenance by having just two enormous engines but long range and almost the seating capacity of the four-engine Boeing 747-400 jumbo. It competes with Airbus's A340-600.
``With its use of new generation avionics and materials, and its higher operating efficiency, the B777-300ER will deliver lower operating costs,'' said Singapore Airlines' Chief Executive Officer Chew Choon Seng.
The order would allow the airline to achieve capacity growth of 4 to 6 percent a year, the company said. It would cover the medium- and long-haul needs of the 57 percent government-owned airline over coming years.
Singapore Airlines, Boeing's largest customer for the 777 aircraft, has a fleet of 89 planes, including 55 Boeing 777s, 29 Boeing 747s and five Airbus A340-500s, with firm orders for an additional four B777s.
The airline also has 10 of Airbus' colossal 555-seat A380s on order, and plans in the spring of 2006 to become the world's first carrier to fly the plane.
Rolls-Royce Group Plc. supplies engines for Singapore Airlines' other 777s but does not offer an engine for the 777-300ER, a heavyweight version.
The order should help Boeing, currently number-two maker of jetliners, in its fight to regain some market share from Airbus, the world's largest maker of civilian aircraft.
Chew said the evaluation process had been comprehensive and the competition between Airbus and Boeing for the order had been very keen.
In less than a decade, Boeing's share of the market for large commercial aircraft has dropped from 80 percent to less than half, while Airbus' share has shot to just over 50 percent.
Chew said the acquisition would be financed largely from internal cash flows but the airline might consider options such as leasing or debt financing if terms were attractive.
The carrier also said it had decided not to place new orders for regional aircraft despite asking for proposals from the manufacturers earlier.
It said the airframe makers have offered the Airbus A330-200 and the new Boeing 7E7 for evaluation but the proposals did not meet the carrier's financial criteria. Airbus is co-owned by European aerospace company EADS and Britain's BAE Systems.
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By MICHELINE MAYNARD Members of a federal loan board said they felt that United Airlines' bid for $1.6 billion in assistance was based on a faulty business plan and they believed that helping the airline could hurt the rest of the industry, newly released minutes of the board's deliberations show.
The minutes were posted yesterday on the Air Transportation Stabilization Board's Web site. They provide a view into two meetings in June, when United's second and third applications for federal assistance were turned down, forcing the airline to seek private financing.
In turning down United's application, the board said that the company could find financing elsewhere and that it had not proved that the loan was needed to maintain a viable air transportation system. The minutes, however, show that members of the board also debated the financial underpinnings of United's case.
A United spokeswoman, Jean Medina, said yesterday: "We disagree with the decision. Our business plan is built on very realistic assumptions. We know we have more work to do. We need to meet the challenges of the changing environment and extraordinarily high fuel costs."
Last week, United, the operating unit of the UAL Corporation, said it was likely to terminate its four employee pension plans, and it has said it will not make required contributions while it is in bankruptcy. The threat has raised the ire of United's unions, and some of their leaders have blamed the loan board for United's decisions to stop the contributions.
The three-member loan board was formed after the September 2001 terrorist attacks to administer $10 billion in loan guarantees made available by Congress to help the struggling airline industry. United's application would have been the biggest awarded by the board, which has provided assistance to US Airways, Frontier and America West, among others.
United filed for bankruptcy in December 2002, after the loan board rejected its original application for $1.8 billion in guarantees.
A year later, it applied for $1.6 billion, which it planned to supplement with $400 million in financing from J. P. Morgan and Citibank.
But on June 17, Brian C. Roseboro, under secretary of the Treasury, joined Edward N. Gramlich, a Federal Reserve governor, in voting against United's application.
The day before that decision, United's chief executive, Glenn F. Tilton, traveled to Washington to offer changes in United's business plan that the airline hoped would ease the package's approval.
The appeal made no difference to Mr. Roseboro, according to the minutes. He said he did not think that a loan package for United was necessary to maintain the nation's commercial aviation system, and also said that outside financing was "reasonably available" to United.
The minutes showed that Mr. Roseboro said he did not think United would face liquidation and that "providing a subsidy to a high-cost air carrier would likely have very negative long-term effects on the industry and competition," the minutes said.
Mr. Roseboro also said that the Treasury Department "determined that the obligation would not be prudently incurred, specifically that the underlying business plan was built on unrealistic assumptions and the restructuring was insufficient." The minutes were not more specific.
The board's executive director, Michael Kestenbaum, predicted that private investors "would likely require further changes to United's business plan," according to the minutes.
Mr. Kestenbaum also said that asset sales could play a part in United's ability to raise capital for any restructuring.
But United has said throughout its bankruptcy that it would not sell its assets. It told a United States Bankruptcy Court last week that its assets are pledged to secure its bankruptcy financing, which must be repaid when it emerges from bankruptcy.
At the June 17 meeting, Mr. Gramlich, the board's chairman, praised the airline for progress it had made in bankruptcy, saying it was a "much improved airline" compared with the one that had applied for loan guarantees in December 2002.
But Mr. Gramlich said airlines' access to capital markets was also much better than it had been immediately after the September 2001 attacks.
According to the minutes, Mr. Gramlich said "there is a strong possibility that United would successfully emerge from bankruptcy without" a loan guarantee package, and thus he voted against the plan.
The board's third member, Jeffrey N. Shane, an under secretary in the Transportation Department, abstained from voting, saying he wanted to defer a decision until the board could further examine Mr. Tilton's suggested changes. The rejection provoked a political storm that came to involve the White House, Congress and the Treasury Department.
United ultimately cut its request to $1.1 billion, promising to find an additional $500 million in equity or equity-based financing on top of the $400 million already arranged.
Treasury Secretary John W. Snow, who had received appeals on United's behalf from House Speaker J. Dennis Hastert and a senior Bush administration official, asked the board to consider a revised application from the airline. Mr. Hastert is a Republican from Illinois, which is United's home state.
The action caused speculation that Mr. Roseboro might resign from the board in favor of someone who would back United's application, but he remained a board member.
At another meeting on June 28, the board voted unanimously to reject United's third application. At that meeting, Mr. Kestenbaum said that United "did not address the statutory criteria under which its loan guarantee request had been denied," which was that a loan to United was not necessary to maintain the nation's commercial air system.
HARRY R. WEBER
Associated Press
ATLANTA - Some of Delta Air Lines Inc.'s creditors are insisting the struggling carrier provide more information on its turnaround plan before they will respond to the company's proposal for more flexibility in restructuring its debt.
A committee of 34 financial institutions holding roughly $1.3 billion of Delta debt said Tuesday that it wants substantial information on the Atlanta-based airline's business plan, financial condition and restructuring plan.
The committee said it believes other debtholders also will seek the information before responding to Delta's debt proposal.
Delta spokeswoman Peggy Estes said the airline had no comment on the developments.
Last week, Delta outlined a proposal that involves certain equity certificates issued by investor groups that lease aircraft to the airline to assist in financing the planes' cost. Delta is asking the holders of those certificates to remove any restrictions that would prevent the airline from buying or holding the securities.
One option Delta is considering is swapping some of its debt for equity in the company.
Delta's debt stands at more than $20 billion.
In addition to wanting to restructure its debt, the nation's third-largest airline is trying to get $1 billion in concessions from its pilots, make changes to its fare system and improve customer service as part of a broad turnaround plan.
The airline has warned of the possibility of bankruptcy if it doesn't get the pilot cuts.
The creditors' committee said it will not respond to Delta's consent solicitation before the company's Aug. 31 deadline. The creditors have asked Delta to extend the deadline, as well as provide the information they are looking for.
The committee consists of insurance companies, pension funds, bond funds and money managers. Its members have substantial interests in 169 of Delta's aircraft.
Michael Reilly, a lawyer representing the creditors, said in an interview that the creditors' request for information is "fairly customary." He said Delta could submit the information to creditors confidentially to make sure it doesn't get out to the public.
Asked about the possibility of a bankruptcy filing at the airline, Reilly said, "I think only Delta can tell us that."
Anthony Sabino, a lawyer and bankruptcy expert in Mineola, N.Y., said Delta needs to restructure its debt to avoid bankruptcy. The statement by Delta's creditors doesn't necessarily make it impossible for Delta to get what it wants, he said.
"The creditors are sitting back and watching Delta very carefully," Sabino said. "They are telling Delta that, 'If you want us to do this, we want to know more.' Delta is trying to do this while revealing as little as possible."
Standard & Poor's also has raised questions about Delta's debt restructuring plan.
On Thursday, the agency dropped Delta's credit rating to a lower degree of junk status and warned that the rating could be lowered to default.
S&P is concerned that a swap of debt for equity in the company could be viewed as coercive if the debtholder has no other choice and ends up receiving less financial consideration than originally owed.
Delta's low credit rating hampers its ability to raise additional financing.
Shares of Delta rose 7 cents to close at $4.26 in trading Tuesday on the New York Stock Exchange.
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PHOENIX (AP) -- A new breed of hybrid charter airlines is offering scheduled service like commercial carriers but without the security requirements. The Transportation Security Administration says because the airlines fly light, single-engine aircraft, they are unlikely to become terrorist targets -- a claim critics dismiss.
Two hybrid charter services began offering limited scheduled flights in Arizona in June.
Western Express Air flies to Scottsdale, Bullhead City and Riverside, Calif. Dynasty Air flies to Scottsdale, Lake Havasu City, Tucson, Las Vegas and three destinations in Mexico.
Standard charter companies are not required to run passengers through stringent security like commercial airlines, but some security is required.
But these "quasi-charter" companies that offer scheduled service are exempt from any security checks.
That's because they operate nine-passenger turboprop planes that have a maximum takeoff weight below TSA security rules.
George Williams, former director of the Federal Aviation Administration's Western Region Air Traffic Division, said the exemption is a concern.
"You don't have to have a 737 to make a big bang," said Williams.
He noted there are also concerns about what happens after the plane lands since some airports allow charter passengers to deplane in terminals also served by commercial airlines. Charter passengers are therefore allowed in secure areas without ever having their carry-on luggage screened, he said.
TSA regional spokesman Michael Fierberg said the agency has looked at the issue and will continue to do so. But he's not aware of any imminent plans to change the rule.
"What has been determined is that larger aircraft that weigh more and carry more fuel pose a much higher risk," Fierberg said.
The Aircraft Owners and Pilots Association, a lobbying group for general aviation, applauds the TSA's decision not to overregulate.
Jeff Myers, an association spokesman, said the group supports the idea that local communities should be able to decide what security is appropriate.
"You can rent cars and all kinds of things that are potential weapons," Myers said. "I believe there is an emotional overload when it comes to airplanes of any kind whether it's a 172 or 767. This is not fair."
Bruce Tully, owner of Dynasty Air, said his company uses screening devices when they are available at destination airports even though it is not required to do so.
He also said he hired a TSA-trained security expert to train staff to recognize suspicious behavior and baggage.
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By: Jaime Fettrow, News 14 Carolina
CHARLOTTE, N.C. -- Just days after US Airways asked its pilots to take a pay cut of as much as 30 percent, talks between the pilots union and the carrier have broken down.
The Airline Pilots Association announced the end of its dialogue with the carrier Monday, following a recent announcement that a new labor agreement could be struck.
US Airways said new labor deals with unions are necessary to avoid a return to bankruptcy court and possible liquidation – which CEO Bruce Lakefield said could happen as soon as September if other arrangements are not made.
"It's obvious that our current negotiations with our labor union are a critical aspect of reducing our costs and returning out airlines to sustained profitability," Lakefield said at the end of July.
"It's necessary to have all our labor unions engaged in active negotiations and conclude them by late summer."
The airline's chief said the labor deals are the carrier's last opportunity to control the fate of the airline and its employees' careers. But labor unions have said previously that the concessions the airline proposed were unrealistic.
"We have witnessed a disturbing trend by the company to seemingly dismiss several significant proposals from our pilot negotiators," said a spokesman for the pilots union.
The airline is looking to cut $295 million in pilot costs. The union said that is not possible.
Meanwhile, talk of possible bankruptcy has many travelers leery, though some travel agents are taking a wait and see attitude.
"There is that area of concern, but that concern right now is not imminent," said travel agent Wilna Eury, of All In One Travel.
"People are still booking US Air. They're booking their packages on US Air. They're going out as far as December on US Air. They're doing it with somewhat confidence."
Charlotte/Douglas International Airport, out of which 482 flights depart a day, serves as a hub for US Airways.
Airline will assist senile travelers
NORTHWEST PROGRAM TREATS ADULTS LIKE UNACCOMPANIED MINORS
Ed Perkins
If you've had to take over full or even partial life management for an adult who can't quite cope, you know what a hassle that person's travel can be. More often than not, you'll either go along yourself, drive rather than fly, or simply forgo a trip.
Now, Northwest Airlines offers a better solution: an Adult Assistance program that treats adults who need help the same way it treats unaccompanied minors. Although anyone age 18 or over can use the program, I expect that the vast majority of users will be senior travelers with early Alzheimer's or similar senility problems. If you're dealing with such a situation, Adult Assistance could be the solution to many travel problems.
The basic rule is, ``at no time will participants in the Adult Assistance Program be left unsupervised.'' That means Northwest will escort the traveler on and off airplanes, provide gate-to-gate escorts at connecting points, provide a positive handoff during transfers and connections, positively identify the designated person who is meeting the airplane at the destination airport, and contact a designated adult in the event of any disruption of normal schedules.
Other requirements: At the time of reservation, you must provide full information on the traveler who requires assistance, personal contact information for the person who delivers the traveler to the originating airport and personal contact information for a person designated to meet the traveler at the destination airport. Northwest's Web site has several pages of additional details (www.nwa.com/services/onboard/adult).
Useful as it is, the program isn't a substitute for medical or nursing assistance. Northwest will not assist with personal hygiene or eating, nor will it administer medication. It will not accept assistance passengers on the last connecting schedule of the day or on overnight red-eye flights. And service is limited to domestic flights operated by Northwest or one of its commuter affiliates; it does not apply to alliance partners or code-shared flights operated by other airlines.
Prices for the service are the same as those for unaccompanied minors: $40 each way for non-stop flights or $75 each way for trips that require a connection.
Although all airlines are required by law to make provision for physically disabled travelers, hardly any had anything to say about travelers with senility or other similar problems. Only United specifically mentions travelers with ``cognitive'' problems; United requires a ticketed adult companion for those travelers.
If your only previous alternative has been to accompany a family member who needs help, or get someone else to do it -- and buy separate round-trip tickets -- you'll eagerly welcome Northwest's new program. And it will allow some travelers to take trips they wouldn't be able to take without assistance.
If some adult in your family needs help with traveling, Northwest is now your obvious first place to look. If Northwest doesn't go where your traveler wants to travel, you can certainly ask another line if it will provide ``unaccompanied minor'' service for an adult, but you can't count on it. However, given the ``me, too'' nature of the big airlines these days, there's a good chance that other big lines will copy Northwest's program.
One further recommendation: Even though Northwest will assist travelers on connecting schedules, a non-stop flight -- or at least a through flight with no plane changes -- is far less risky than connecting flights. Try to find a non-stop, even if it means extra driving to a bigger airport at either end or both ends of the trip.
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Dire finances dash visions of Chicago home for airline
Could the Chicago area be headquarters to another financially strapped airline?
Perhaps. But maybe the better question to ask is whether Chicago really wants to be home to another financially strapped airline.
The answer to that may be "perhaps" as well. Jobs are jobs, after all. But that all may be moot now.
A particularly dire financial outlook from low-cost carrier ATA Airlines last week could cut short a reconnaissance mission that has been under wraps for months and had some business executives and officials with the city and state thinking big.
Sources say Indianapolis-based ATA Airlines and its consultants have been kicking the tires in Chicago during recent months and have had meetings with Mayor Richard M. Daley's folks, and other officials.
ATA, run by Chairman George Mikelsons, has reached out before and then decided to keep the home base in Indianapolis.
But discussions were getting more plentiful. There had been talk of possibly bringing lots of jobs to the region, maybe tying in with a new maintenance facility somewhere in the area, and looking at headquarters space downtown or closer to its operations at Midway.
Moving everything to Chicago would make sense in many ways. In Chicago, the airline could have everything in one place. ATA, despite its finances, says it's still committed to its end of a $100 million training facility near Midway that would include a $25 million city subsidy as well as money from the state.
But the company said a move, to anywhere, is not imminent.
"We've got plenty on our plate right now; we certainly have no plans to relocate the company," a company spokeswoman said Friday, refusing to address questions about meetings sources said the company has had about possibly moving its headquarters.
Of course, Chicago isn't the only city ATA is not moving to right now. It wasn't alone in this chase.
Insiders said ATA was considering other sites, including possibly out East and in the South, perhaps Jacksonville, Fla.
Until ATA's recent troubles were revealed, Chicago and state officials may have considered playing footsy with the carrier to be worthwhile because it could have paid big dividends for the local economy in the long term.
But last week, bad news got worse for ATA.
The carrier, which is one of the dominant airlines at Midway, is all but saying bankruptcy is looming.
It reworked its debt in January and secured new aircraft lease arrangements with its three major lessors--Boeing Capital Service Corp., General Electric Capital Aviation Services and International Lease Finance Corp.--resulting in close to $70 million in lower cash payments in 2004. But it's not enough.
In announcing its second-quarter earnings last week, ATA, which lost $26.7 million in the quarter, said it faces additional liquidity concerns and could run out of cash sometime in the first quarter of 2005 if its existing aircraft lease obligations don't change.
With ATA firmly grounded in Indianapolis for now, Chicago officials can shove their plans back into a file folder and hope the airline industry can find a way out of its troubles.
At this rate, Chicago will just be happy if ATA follows through on its promise to build its training facility.
In the meantime, the business community can focus its worry on the survival of United Airlines, the financially strapped airline that already calls Chicago home.
Airline points to savings in replacing its pension plans
By Leslie Wines, CBS.Marketwatch.com
SAN FRANCISCO (CBS.MW) -- United Airlines' pilots have the most to lose if their bankrupt employer carries through with threats to terminate all four of its worker pension plans and replace them with less generous benefits.
For the past month, the Chicago-based airline (UALAQ: news, chart, profile) has warned in court filings and letters to workers that it is "likely" to request permission to terminate the plans - a cost the airline estimates at $4 billion over the next four years.
According to airline analyst Ray Niedl of Blaylock & Partners, the judge presiding over United's bankruptcy case would be inclined to approve such a request if the carrier can show it is an essential step in its efforts to emerge from Chapter 11.
"United would have to prove that it doesn't have the financing it needs and has no other way to get it. ... But the judge also could modify the request or abandon it altogether," the analyst said.
"The whole process could move pretty quickly if the court approves it," Niedl added.
Randy Clerihue, media director for the Pension Benefit Guaranty Corp, said his agency would immediately become trustee of United's abandoned pension plans if the company receives court permission to terminate them.
Under U.S. law, the agency can pay up to $44,000 a year to workers who retire at 65 and up to $28,500 to 60-year-olds.
This would be a big step down for some pilots, by far the highest paid of union airline workers, who under Federal Aviation Administration rules must retire at 60.
Information on United pilots' individual pensions is confidential and varies according to length of service and other factors, but pilots typically enjoy retirement packages that pay out more than the $28,500 annual cap set by the PBGC.
Clerihue pointed out that US Airways (UAIR: news, chart, profile), as part of its 2002 restructuring plan, terminated pension plans for union pilots -- sorely impacting some who had built up retirement packages worth as much as $100,000 a year.
The spokesman said that the 1974 federal law that created his agency was designed to protect middle-class workers, providing payments that roughly match what retirees would have received under their company-sponsored plans.
However, some of the US Airways' pilots were forced to accept severe reductions when bankruptcy pulled the rug out from under their retirement plans, he added.
United pilots are represented by the Airline Pilots Association, one of the carrier's seven unions.
United Airlines skipped a $73 million payment to its employees' pension plans in mid-July, and has also said that it also will not make scheduled payments on Sept 15 and Oct 15.
The company indicated that its decision to stop funding the pension plans stems from a revised agreement with lenders, whose financial support is crucial following the federal government's refusal to back new loans to the airline.
At the same time, United's machinists have filed a motion with the federal bankruptcy court in Chicago to block any move by United to cancel existing pension programs.
What's more, the Pension Benefit Guaranty Corp. last week called on the bankruptcy court to block any move by United to stop funding its pension plans, saying such a move would skirt federal retirement-security regulations.
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Pension insurance already at deficit
By LEIGH STROPE, The Associated Press
WASHINGTON -- The deficit at the government's cash-strapped pension insurance program could grow to about $15 billion if United Airlines dumps its four plans, prompting renewed calls for reform and election-year finger-pointing.
The Pension Benefit Guaranty Corp. has filed an objection in bankruptcy court, saying United's action would put the agency at financial risk. Earlier this year, congressional investigators designated the agency as "high risk," requiring urgent attention to operate effectively.
United cleared another hurdle Friday when a bankruptcy judge refused to block its interim financing plan, rejecting union arguments that United didn't try hard enough to find an alternative plan to continue paying into employee pension funds.
The airline warned a day earlier that it likely will have to terminate the plans to get loans to emerge from bankruptcy.
"It will be an absolute outrage if American taxpayers are stuck with a multibillion-dollar tab for another S&L-style bailout because of Washington's failure to adequately update pension laws," Rep. John Boehner, R-Ohio, chairman of the House Education and Workforce Committee, said Friday, noting that he has held more than a half-dozen hearings on pension reform.
But the committee's top Democrat said Republicans were to blame for gridlock on reform.
"We should have begun our reform efforts at the first sign of this crisis over two years ago," said Rep. George Miller, D-Calif., who said he has been pushing for changes. "Instead, we've just held hearings, which is no substitute for real action. I'm glad to hear that Chairman Boehner finally plans to move on pension reforms, but it shouldn't have taken United Airlines to convince him to do so."
United faces half a billion dollars in pension payments in the next two months and $4.1 billion by the end of 2008.
United's plans are underfunded by about $8.3 billion, and the agency would have to pick up $6.4 billion in pension obligations, said Jeffrey Speicher, a spokesman for the Pension Benefit Guaranty Corp. The agency had a $9.7 billion deficit as of March 31.
The Pension Benefit Guaranty Corp. "believes the company has a legal obligation to continue to pay for those pension promises," Speicher said. The plans' 120,000 participants still would lose $1.9 billion in retirement benefits.
Should United dump its plans, it would be the largest pension default, topping Bethlehem Steel's $3.6 billion in underfunding in 2002. This spring, the agency assumed control of US Airways pilots' pension plan, which was underfunded by about $2.5 billion.
The agency was created in 1974 to guarantee payment of benefits earned in employer-provided pension plans, which promise workers a set benefit based on salary and years of service. Workers are not required to make contributions, as they do to 401(k) plans.
Current law allows private companies to postpone contributions to their plans for years, a provision the agency and some in Congress want changed as part of a reform package.
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By Steve Halvonik
TRIBUNE-REVIEW
US Airways and its pilots' union failed to announce a tentative labor agreement on Friday, but both sides said they remained optimistic that a bargain would be struck soon.
"We think both parties are committed to reaching a deal," said David Castelveter, a US Airways spokesman.
Jack Stephan, a spokesman for the pilots' union, said that both sides were still negotiating late Friday, which he characterized as a positive sign.
Labor talks continued yesterday amid growing concerns that the financially troubled airline would be unable to complete its $1.5 billion cost restructuring and be forced to file bankruptcy.
In addition, Standard & Poor's said yesterday it was lowering US Airways' credit rating one notch to CCC, from CCC+. S&P said the downgrade "reflects an increasing risk that crucial labor negotiations will not be completed successfully by Sept. 30."
US Airways officials have said that the company may default on federally guaranteed loans, forcing Chapter 11 bankruptcy protection, if employees do not approve $800 million in labor concessions by Sept. 30.
Castelveter said the S&P downgrade "reflects the greater difficulty we are having in this low-fare environment and reinforces the rapid need for us to reduce our costs to operate."
The company, however, could end up in bankruptcy sooner than Sept. 30. It is obligated to make about $130 million in payments to two union pension funds on Sept. 15. Chairman David G. Bronner told the Tribune-Review earlier this week that the company may not be able to make the payment without violating terms of the loan agreements.
Analyst Ray Neidl, with Blaylock & Partners in New York, said the credit downgrade was mostly symbolic, since US Airways' debt was already rated at junk status.
"At this point, (US Airways' credit rating) is not very significant," Neidl said.
Like the credit rating, US Airways' inability to reach an agreement with the pilots yesterday was symbolically important. The two sides had negotiated intensively all week. US Airways had wanted an agreement by this weekend so that rank-and-file pilots could approve it by Sept. 8.
However, US Airways' demand of $295 million in labor concessions is meeting unexpected resistance from within the pilots' union.
In spite of a financial analysis prepared by their own investment banker that said the company could go bankrupt within a month, many Air Line Pilots Association members remain skeptical of the company's dire forecasts. They also said they would not be hurried into a quick deal by the company's "artificial" deadline.
"The company has used deadlines to their advantage for as long as I've been here," said Fred Freshwater, a local ALPA leader. "Some were manufactured, some not."
US Airways has not backed down from its demand of a 16.5 percent pay cut; pilots, which gave back $565 million in concessions two years ago, have offered to accept a 12.5 percent pay cut.
"No doubt, there is a division within the union," said Marick Masters, a University of Pittsburgh business professor who is following US Airways' labor situation.
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Associated Press
A second prominent Democrat in Congress says he's been singled out for extra security at airports.
Congressman John Lewis of Georgia says it's because a name similar to his was on a "watch list" maintained by the airlines.
Lewis says he couldn't buy an electronic ticket, and that he had to show extra identification to security -- which also hand-checked all of his luggage.
Yesterday, Massachusetts Senator Ted Kennedy he had been stopped several times for the same reason.
Homeland Security officials have since apologized to him.
Lewis says he's also complained to the Homeland Security Department -- and even considered filing a lawsuit.
By Gunna Dickson
NEW YORK (Reuters) -- At an altitude of 39,000 feet, taste buds lose sensitivity. With a traveler's ability to taste 33 percent gone, airline meals must be more robustly seasoned on the ground and wines more aggressive on the palate.
Since no one consumes more airline food than business travelers, menu planning for repeat passengers is a constant challenge for airlines with long-haul routes.
"We are treating in-flight dining like in-flight entertainment, because the food has to work hard to keep passengers entertained," said James Boyd, spokesman for Singapore Airlines.
"We need to satisfy a number of objectives. It's also a vehicle for creating a point of contact. The way a meal is presented creates an opportunity to interact with passengers."
To meet the taste challenge, carriers conduct costly and labor-intensive tests, some in kitchens that have a sealed room to replicate in-flight pressure and humidity conditions.
On long-distance flights, menus are changed regularly and tailored to ethnic preferences on given routes, which requires considerable research and attention to very specific guidelines.
"Meals must taste like this, look like this ... exactly, according to detailed instructions," said Bob Ferguson, vice president of aircraft catering for Emirates in Dubai, who in March spent 180 hours traveling and sampling food.
Emirates employs three food managers -- Swiss, German and Arab chefs -- to design menus for the international network.
Market research and self-analysis
"We do a tremendous amount of market research. Also a lot of self-analysis. We bring in samples without producers' knowledge and compare them with what we said we wanted," said Ferguson, himself a trained chef.
Singapore's food and beverage manager works with an international culinary panel -- famous chefs of well-known restaurants -- to produce an "insanely detailed" catering checklist of "every hors d'oeuvre, main course, cheese, beverage, fruit, baked goods and standard items, such as water, butter, salt and pepper," Boyd said.
"Each item is identified and numbered, with specified serving size or weight. Presentation should be perfect -- down to the grill marks on a chicken breast or whether berries are suspended in aspic or yogurt. Photos of dishes are circulated to galleys as a plating guide," he said.
One dish was shipped back six times for recrafting and perfecting sauce color and drizzling, Boyd said.
As carriers cater to an ever-wider variety of cultures, dietary restrictions or laws must also be observed.
Israeli carrier El Al, the world's largest kosher airline, serves only glat kosher meals, or food certified by rabbinical laws.
"In Platinum Class, we combine very upscale food together with it being kosher. To give the feeling El Al is an Israeli carrier, there is lots of fruit and also vegetables, so people feel good after eating on board," said Nira Dror, vice president and general manager of El Al North America.
Kosher service is up to 30 percent more expensive because separate kitchens, ovens, dishwashers and meat/dairy china are required. But El Al does not charge extra, she said.
"Menus are rotated monthly. During Jewish holidays, we add typical dishes, like honey cake for New Year, doughnuts for Hanukkah, matzos for Pesach," said Dror. "All food is freshly prepared. Our New York flight kitchen produces more than 15,000 meals a day."
"On Emirates, all meals are prepared in a manner that is suitable for Muslims," said Ferguson. "And we have a very good selection of wines, which surprises people, who think they may not get any alcohol at all."
As part of an annual Finland-wide campaign, Finnair observes Heart Week by providing meals with heart-friendly ingredients. In April, Business Class passengers were served lime-marinated whitefish with dry rye bread, grilled chicken breast with mango sauce and wheat risotto, and black currant pastry.
Hot chocolate and warm cookiesBritish Airways' Sleeper Service for Club World passengers, on selected overnight flights from North America and the Middle East to London's Heathrow, offers several dining options.
In North America, the Terraces Lounge has a preflight selection of gourmet entrees, soups, salads and desserts, plus an extensive wine list. In New York's JFK airport, travelers can choose a freshly cooked meal from the carving station or pasta bar.
On board, there is NightCap service of hot chocolate and warm cookies.
Individuals or groups on Blue Star private jets, increasingly popular with corporate travelers, get full bar and snack tray service and whatever meals they choose -- from a restaurant or private caterer.
"We work around what customers want, as opposed to them getting what we serve," said Debbie Dickinson, vice president of marketing and public relations in New York.
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By KIRSTEN TAGAMI, ROBERT LUKE
The Atlanta Journal-Constitution
As Delta Air Lines struggles to avoid bankruptcy, its more than 17,000 retirees wonder how a dramatic retooling of the company will affect their pension checks and health care benefits.
"I've heard everything from 'Oh, no, nothing will happen to us,' to people who are wondering how much of their pension they'll end up with," said Alison Scott, who retired last year at age 52 from Delta's corporate training department. The Mableton resident is one of about 8,000 Delta retirees in Georgia.
Scott and others worry about reductions to their pensions, higher out-of-pocket health care costs and changes in flight benefits. Retirees who worked at Delta during better years are shocked by its once-unthinkable financial swoon.
"It's very upsetting," Scott said. "I just can't believe they're at this point."
According to Delta and pension experts such as Ron Gebhardtsbauer of the American Academy of Actuaries, retirees have little reason to worry about their checks if Delta keeps its existing pension plans alive.
"Generally, accrued benefits are protected by ERISA and cannot be reduced by plan changes," the company said in a response to questions about its pension plans. The federal Employee Retirement Income Security Act governs most private industry pension and health plans and provides legal protections for participants.
However, if the company terminated its pension plans, some higher-wage retirees could face reduced payouts. That's because the federal Pension Benefit Guaranty Corp. guarantees pensions only up to a maximum of $44,386 a year for people at age 65. The guarantees are lower for early retirees.
Drastic steps by others
Terminating pension plans is a drastic step usually made only by companies deep into bankruptcy proceedings. United Airlines, flying under Chapter 11 protection for 20 months, said Thursday it will "likely" have to terminate its plans as it struggles to survive. That would dump billions of dollars in future pension obligations for United retirees onto the Pension Benefit Guaranty Corp.
US Airways, which emerged from Chapter 11 reorganization last year, terminated its pension plan for pilots but not for other workers.
Even if Delta never gets to the point of ending its pension plans, the airline is expected to consider steps to reduce outlays to future retirees.
One option is to freeze the company's defined-benefit plans for pilots and other workers, leaving pensions in place for people already getting them.
New "defined contribution" plans would be adopted, in which the company, the employee or both put money into an account. The worker still has a pool of retirement money, but the company's costs can be greatly reduced.
Delta has proposed such a change for pilots as part of a broader concessions package that is under negotiation, according to the pilots union.
If applied company wide, such a shift could shave Delta's pension costs by about $300 million a year, estimated Robert Mann, an independent aviation consultant in Port Washington, N.Y.
So far this year, Delta has contributed $325 million to the Delta Retirement Plan, $71 million to the Delta Pilot Retirement Plan and $14 million to a frozen pension plan for former Western Airlines pilots. The company anticipates making additional contributions of about $50 million toward the end of the year.
Those payments go directly into the pension funds, where they are invested by professional money managers. At the end of last year, total assets of Delta's pension funds approached $6.82 billion. But current and future benefit obligations totaled $12.48 billion, resulting in a shortfall that Delta will need to fill over time, even if it freezes its pension plans.
Health care concerns
Scott and other retirees also fret about their health insurance and other benefits. While pension funds are federally protected, the other benefits are not.
If history is a guide, Delta's retirees aren't likely to lose their medical benefits altogether but would have to pay more.
For example, United this spring negotiated cuts in retiree health care benefits with its unions that it said would save the airline $300 million a year.
In a worst-case scenario of Delta going completely out of business — as happened to Eastern Airlines — retirees could lose their health insurance.
That possibility most worries Alden Sewell, 63, a retired Delta aircraft inspector who took early retirement in 1995. He lives in rural Monroe County with his wife, Kathy.
"If you lose your health benefits, it puts you in a lifestyle bind," Sewell said.
The prospect of reduced health benefits also concerns Tom Jenkins of Peachtree City, whose wife, Barbara, was a meetings and conventions coordinator for Delta.
The couple is healthy, he said, but no one can predict what the future holds. "And nobody likes to get pinched in their health care costs," he said.
Scott, who works part time as a receptionist in a veterinarian's office, said she could get health coverage through her husband, who works in heating and air conditioning.
While she's concerned about her medical benefits, she also fears the loss of one of the most highly prized benefits of an airline career: free flight passes for active and retired employees and their immediate families.
"I'd hate to lose those," Scott said. "It's a wonderful privilege."
Again, if United's experience is any guide, that perk won't disappear, but could be modified.
United now assesses a service charge to fly in what otherwise would be empty seats. Retirees had been exempt from those fees, a spokeswoman for United's flight attendants said.
Web site established
Scott follows developments by talking to other retired and current Delta workers, closely monitoring the news and checking a Web site started last year by concerned retirees: www.dalrc.org.
Many other retirees "are not aware their benefits could be reduced," said Cathy Cone, a retired flight attendant who chairs the Delta Air Lines Retirees Committee, which runs the Web site. The committee isn't affiliated with the company.
"We were of a culture that Delta would take care of us," Cone said. "We didn't ask enough questions, and that's our fault."
Milly Hastings of Ellijay was a Delta flight attendant for 22 years and took early retirement in January 2002 when she was nearly 55. One of the inducements was that Delta would pay her health insurance premiums.
Hastings and her friends, some on fixed incomes, are nervous about their pensions no matter what assurances they hear.
"Everyone is really worried," she said, especially about the possibility of a federal pension bailout. "If United already is putting strains on the PGBC, we're wondering how much of our pensions we'll get."
The mood of the retirees she talks to? "Heartbroken."
Staff writer Matt Kempner contributed to this article.
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CHICAGO An attorney for United Airlines told a federal bankruptcy judge in Chicago today that he believes the carrier is within its legal rights to terminate employee pension funds.
United Airlines attorney James Sprayregen (SPRAY'-ray-gehn) says federal bankruptcy laws trump employee benefit rules that require companies to make regular contributions to their pension plans. But he emphasized that no final decision has been made to actually terminate the pensions that cover 119-thousand United employees and retirees.
The Elk Grove Village-based airline has already announced it would no longer contribute to its pension funds as it struggles to find financing to emerge from Chapter Eleven.
United's unions are expected to present their side in bankruptcy court this afternoon.
By MICHELINE MAYNARD united Airlines said today that it was likely to terminate and replace its four employee pension plans with less-generous benefits, a drastic move that the airline said was necessary to attract the financing that would allow it to emerge from bankruptcy.
In a 26-page filing with the United States Bankruptcy Court in Chicago, United stopped short of actually ending the plans and said it had not made a final decision to do so.
But the warning from the airline was the sternest threat yet of its intention to shed its pension obligations. United's unions had no immediate comment.
United's move came on the eve of a court hearing, at which Judge Eugene C. Wedoff planned to hear motions from the federal pension agency, United's machinists and its flight attendants challenging the airline's efforts to get out from under its pension liabilities.
In late July, United said it would make no further contributions to its plans while it remained under court protection. It filed for bankruptcy in December 2002, and hoped to based its restructuring on a package of federally backed loans.
But the Air Transportation Stabilization Board rejected United's application for a third time on June 28, forcing the nation's second-largest airline to seek private financing.
The disclosure by United was a milestone in recent airline history. No other airline has terminated all of its pension plans, short of a liquidation. US Airways terminated only its pilots' retirement plan in 2003, before it emerged from Chapter 11 bankruptcy, taking that step at the direction of the loan board.
The federal Pension Benefit Guarantee Corporation estimates United's four plans are underfinanced by about $8.3 billion. Earlier this year, Congress passed legislation allowing airlines to stretch out overdue pension contributions, a move that United said at the time would address its pension issues.
But the airline skipped a $72.4 million payment owed to three of its plans last month, triggering its pension crisis.
United, in its bankruptcy court filing, said the rejection of its loan guarantee application, along with record prices for jet fuel, had forced it to move against its retirement plans. United, which until recently was not protected by fuel hedging contracts, estimates it will spend $1 billion more on jet fuel this year than it anticipated at the end of 2003.
The airline said it "must have the cash flow and liquidity that the capital markets are willing to finance."
"We have taken every effort to restructure our business without affecting accrued pension benefits, and will continue to explore every other option," the company said. "However, given the magnitude of further cost reductions needed to create a viable business plan and attract exit financing, termination and replacement of all our defined-benefit pension plans likely will be required."
Since its bankruptcy filing, United's unions have granted $2.5 billion a year in wage and benefit concessions, out of $5 billion a year in savings that the airline has identified.
Yet its operating costs, not including fuel, remain higher than those at its competitors, particularly American Airlines, the nation's largest airline, which won wage and benefit cuts from its unions last year by threatening to file for bankruptcy protection.
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By STEPHEN KINZER CHICAGO, Aug. 18 - The nation's two largest airlines, American and United, announced on Wednesday that they would cut flights at O'Hare International Airport to ease congestion that has been delaying flights from coast to coast.
"O'Hare no longer will be the place where on-time schedules go to die," said Marion C. Blakey, administrator of the Federal Aviation Administration, who signed an order for the restrictions as passengers squeezed by her at an O'Hare terminal here. "As Chicago goes, so goes aviation. And as of today, Chicago is headed in the right direction."
Ms. Blakey predicted that the new schedule would cut the waiting minutes at O'Hare by 20 percent and reduce the number of long delays, exceeding two hours, by 34 percent.
The schedule cuts are a result of an accord between the Bush administration and airline executives. Transportation Secretary Norman Y. Mineta said his office had approached American and United and told them, "We need your voluntary, so to speak, contribution."
After a period of debate, American, which has 550 arrivals at O'Hare, agreed to cancel or reschedule 17. United, with 650, is to cancel or reschedule 20.
The restrictions are to take effect on Nov. 1, in time for the holiday travel season. They are to expire on April 30, but may be extended.
Under the order, the number of flights using O'Hare each hour from 7 a.m. to 8 p.m. is to be capped at 88, with minimal flexibility for private and military planes. The current schedule has up to 132 flights an hour.
Executives from both airlines said they doubted that there would be much effect on their revenue. They said savings in overtime and other costs that come with delays would offset their losses from canceling flights.
"I don't think I would anticipate fare increases out of this," Bernie J. DeSena, a vice president of American, said
Mr. DeSena conceded that travelers were "likely to see a few more customers on the planes that remain."
"There isn't much alternative, because we all agree that something must be done here," he said. "It's the best thing we can do for the moment."
Mr. DeSena and Peter D. McDonald, chief operating officer of United, said they had not decided which flights to cut or reschedule.
Smaller airlines at O'Hare have not agreed to trim their schedules, but they will be frozen at current levels or allowed just very modest growth. Ed Faberman, executive director of the Air Carrier Association of America, which represents several small airlines, said the F.A.A. asked American, a unit of the AMR Corporation, and United, a unit of the UAL Corporation, to reduce schedules because "they created these problems by steadily increasing their flights through O'Hare."
"If this is only for six months, we can live with it," Mr. Faberman said. "But we wouldn't want to see it extended, and we certainly don't want to see it imposed at other airports. The last thing we want is for the smaller low-fare carriers to be told, 'We now have to add airports where you can't enter or grow,' because the large guys have saturated them with flights."
Kevin Mitchell, chairman of the Business Travel Coalition, whose members are corporations that buy large numbers of plane tickets, said the order "in effect locks in the level of competition at O'Hare and locks out new entrants."
"There is some benefit to travelers through the reduction of delay," Mr. Mitchell said, "but there's a prospect of higher fares down the road. The government is regulating supply."
O'Hare is a crucial link in the air transport system because United and American, along with other lines, use it as a principal hub. It also serves the nation's third-largest metropolitan region.
The aviation agency reports that O'Hare had 928,691 takeoffs and landings last year, more than any other airport in the world. That number has been steadily increasing. In the first seven months of 2004, the number of planes using O'Hare was up 8.7 percent over the same period last year, federal figures show.
Administration officials and airline executives at the ceremony on Wednesday repeated support for major expansion at O'Hare. Mr. Mineta, however, said it was unrealistic to expect substantial expansion before 2014.
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By MICHELINE MAYNARD The chairman of US Airways, David G. Bronner, said yesterday that its employees must agree to a third round of wage and benefit cuts worth $800 million in the next 30 days or the airline could be liquidated.
Separately, the chief executive of another troubled airline, Delta Air Lines, told employees that it planned to cut jobs, pay and benefits as part of its restructuring plan. But in a memorandum late yesterday, the executive, Gerald A. Grinstein, also said employees would be offered a share in the airline and other compensation as the airline reinvents itself.
Absent a deal with US Airways' unions, Mr. Bronner, who runs Alabama's pension fund, said he would not invest any more money to rescue the airline. The Alabama fund is the largest shareholder in US Airways. Mr. Bronner's comments came as US Airways made a new contract proposal to its pilots' union, the only labor group in formal talks with the airline. Other unions, notably the International Association of Machinists and Aerospace Workers, have been reluctant to grant more cuts on top of the two rounds made while the airline was in bankruptcy.
US Airways emerged from bankruptcy last year, financed in part with $240 million invested by the Retirement Systems of Alabama. Some analysts have speculated that the Alabama fund would come up with new capital rather than have the airline seek a second Chapter 11 filing.
But in an interview yesterday, Mr. Bronner disputed that thinking. "Why would you put new money in, if they won't make a deal?" Mr. Bronner asked.
Mr. Bronner said agreements with the airline's unions were needed well before Sept. 30, when US Airways faces a series of covenants in its federally guaranteed loans, which secure its arrangements with aircraft lenders. To be assured that cost cuts will be coming, unions have about 30 days to draw up agreements, he said.
In response, the pilots union said yesterday that it would not be pushed into making a quick deal. "We know where we are, and we know where we need to be," said Jack Stephan, a spokesman for the Air Line Pilots Association.
Robert Roach, a machinists' union vice president, reiterated his union's willingness to help US Airways save money, short of reopening its contracts, and said the two sides would meet Aug. 31. But in an interview, Mr. Roach said that Mr. Bronner, whose fund had not invested in airlines before taking the controlling stake in US Airways, did not "fully appreciate or understand this industry."
Mr. Bronner said many union members thought the airline was acting like Chicken Little, falsely proclaiming that the sky was falling. These people believe that US Airways "can go into Chapter 11 again and try to find somebody willing to throw so much money at it and see what drain it goes down," he said. "Good luck."
He said union members were mistaken to think that successful reorganizations were commonplace. "What most people don't understand is that when companies go into bankruptcy, they don't come out," he said.
The debate at US Airways came as Delta's management presented the first pieces of a restructuring plan to its directors yesterday. In his memo to employees, the chief executive, Mr. Grinstein, said Delta was striving to carve out "new and previously uncharted network airline territory," which he did not specify.
He said the plan would include both pain and gain as the airline becomes a leaner competitor. "Regrettably, one of the consequences will be fewer jobs and additional changes to pay and benefits for all our employees as we make operational changes to achieve the necessary cost savings," Mr. Grinstein said.
But he promised the airline's employees would share in a combination of equity, profit sharing and payments tied to productivity improvements. Delta executives are set to meet with pilots' union leaders today to discuss the airline's latest offer. The pilots have offered concessions worth as much as $705 million; Delta insists its pilots, who are the best paid in the industry, must agree to cuts worth a minimum of $1 billion.
The airline, which posted its biggest loss in a quarter-century during the second quarter, has warned it may be forced to seek bankruptcy protection unless it can reduce costs and renovate its balance sheet. Delta has retained the Blackstone Group, a private investment firm often involved in debt restructurings, as an adviser but has not discussed efforts it plans to take.
At US Airways, Mr. Bronner said he agreed with a report by the pilots' union's financial adviser, which warned last week that the airline was in danger of a second bankruptcy filing and could end up going out of business unless it can reduce costs and adopt a new business model similar to that of low-fare airlines.
Mr. Bronner said he and other investors would potentially be better off with the airline in liquidation, where they could snap up its planes, gates and routes at fire sale prices but not have to take on labor contracts.
"It's a whole lot cheaper for me to have the assets and start over than to have the liabilities," Mr. Bronner said. He jokingly said that he could use the remains of US Airways to start a new carrier named for his home state: "Bama Air."
Mr. Bronner acknowledged, however, that such a dire situation would be tragic for the airline. "I don't know why anyone would want to do it," he said. "That's terrible for the employees. It's what you want to avoid."
Mr. Bronner has raised the prospect of a Chapter 7 bankruptcy liquidation before as a tool against US Airways' unions. In December 2002, Mr. Bronner, who had then proposed becoming the airline's biggest investor, warned unions that he would not make his investment if the labor groups did not grant a second round of concessions.
"What's the alternative? If they don't want to do this, we'll Chapter 7 it," Mr. Bronner said at the time.
Ultimately, unions gave in and Mr. Bronner's pension fund took a 37 percent share of the airline, gaining voting control and 8 of 15 seats on the airline's board.
One of those directors, Bruce R. Lakefield, became chief executive last spring, after his predecessor, David N. Siegel, was unable to persuade unions to grant wage and benefit cuts.
Mr. Bronner's liquidation threat is "the only card he's got," said Robert W. Mann Jr., an industry analyst based in Port Washington, N.Y. "He's the investor of last resort. He'll ultimately decide whether he wants to go forward."
But Mr. Roach at the machinists' union said such threats could easily backfire on the airline by scaring customers away. "How do they say to passengers, 'Fly US Airways' and then say it may not be in business next month?" Mr. Roach said.
Despite the airline's problems, Mr. Bronner said he did not regret his investment. He said the pension fund, which has assets of about $25 billion, lost $300 million in two days last week when the stock market dropped, more than he has put in the airline. "I've made a lot of dumb mistakes," he said.
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Senator tells of screening stops at airport
From Ed Henry and Mike Ahlers
WASHINGTON (CNN) -- -- Sen. Edward Kennedy, D-Massachusetts, may be one of the most recognizable politicians in the world, but that didn't stop some airport screeners from treating him as a potential security risk.
At a Senate Judiciary Committee hearing on border security Thursday, Kennedy revealed that he was held up at Boston's Logan International Airport several times -- starting in March -- after his name somehow was placed on a security watch list.
During the first incident, Kennedy said someone at the US Airways ticket counter refused to take his Visa credit card and said he couldn't fly to Washington.
"I said I've been getting on this plane for 42 years," Kennedy said to laughter. "Why can't I get on the plane back to Washington?"
Kennedy spokesman David Smith told CNN that the person at the counter called a supervisor, who quickly recognized Kennedy and made sure he was allowed on the flight.
A spokesman at the Department of Homeland Security said Kennedy was pulled aside and put through secondary screening before being allowed to fly. The spokesman said the senator was put through secondary screening because there was a "name likeness" to somebody who was of concern.
The same scenario played out two more times before Kennedy's staff finally called DHS officials, according to Kennedy's office. "They promised that steps would be taken to take him off the list," Smith said.
But the same mistake occurred a few more times, Smith said, and Homeland Security Secretary Tom Ridge "called to apologize" that the situation had not been rectified.
Smith said the senator mentioned his experience at Thursday's hearing to Undersecretary of Homeland Security Asa Hutchinson because the lawmaker wants to "make sure innocent Americans are not being unfairly treated" by new security measures.
Despite the frustration, Smith said of the senator, "I think he handled it all with good nature."
A DHS spokesman stressed that Kennedy's name is not, and has never been, on a "no-fly" list. The spokesman said Kennedy was pulled aside for secondary screening because he was identified through CAPPS (Computer Assisted Passenger Pre-Screening System) criteria.
While CAPPS criteria is officially confidential, it is widely known that passengers are subjected to secondary screening if they pay with cash, buy one-way tickets or buy a ticket at the last minute.
"We have acknowledged in the past the system is an antiquated screening system, and we need a new system that will alleviate situations like this," the DHS spokesman said.
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SAN FRANCISCO (Reuters) - An airline that forced an elderly woman to check her bag with her medical devices bears responsibility for her subsequent death after losing the bag, a U.S. appeals court ruled on Thursday.
A lower court ruled in 2002 that Americans Airlines parent company AMR and BWIA International Airways should pay $226,238.81 to Caroline Neischer's relatives because she died soon after her bag was lost.
The plaintiff's lawyer, Bruce Altshuler, said it was the first case of its kind. "The significance of the case is that never before has an airline been held liable for the death of a passenger caused by delayed or missing baggage."
Neischer, who spent most of her life in her native Guyana, died at age 75 after flying from Los Angeles to Guyana in 1997. After Neischer transferred from an American Airlines flight in New York, a ground agent the court said likely worked for American forced her to check a bag that contained a breathing device to treat her respiratory problems.
The agent promised she would be given the bag immediately upon arriving in Guyana. However, the bag was lost and Neischer died days later.
Neischer's five children sued AMR and BWIA Airways, which had proposed paying the $2,000 maximum for lost baggage set by international standards. The lower court ruled the airlines were responsible for a "willful misconduct" death, and thus even the Warsaw Convention limit of $75,000 for an airline death should not apply.
"The seizure of Neischer's bag meets the standard of willful misconduct," the 9th Circuit Court of Appeals ruled. "The district court therefore properly concluded that the seizure of Neischer's bag proximately caused her death."
In its ruling, a three-judge panel sent the matter back to a lower court for additional review as to whether the woman was also partially responsible for her death since replacement medication may have been available in Guyana.
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Associated Press
FORT WAYNE, Ind. -- A broken bottle of a perfume ingredient leaking from an unclaimed bag sickened an airport worker and closed down the Fort Wayne International Airport's terminal for nearly 10 hours Wednesday, delaying about 40 flights.
The liquid was spotted leaking from a bag no one had picked up about an hour after an American Eagle flight arrived from Chicago at 1:50 a.m., airport officials said.
Airline workers noticed an odd odor after taking the bag to a secure area, where they opened it and found the broken bottle, said Lisa Bailey, spokeswoman for American Airlines, the sister airline to American Eagle.
"When the agent came in contact with the substance, the agent became violently ill, began vomiting," Bailey said.
Seven people -- three emergency workers and four airport workers -- were treated after exposure to the liquid, but only the agent became ill from the smell, said Tory Richardson, the airport's executive director.
Bailey said the bag's owner was traveling to Fort Wayne from London, and was scheduled to change to the American Eagle plane in Chicago.
But weather problems delayed the Tuesday night flight from Chicago by nearly five hours, and the traveler was rebooked to a Wednesday flight instead. Meanwhile, his bag went on ahead of him on the American Eagle flight, Bailey said.
Dan Nielsen, the FBI's acting assistant special agent in charge for Indiana, said tests determined that the liquid that leaked from the bag was likely concentrated rose water, a mixture containing oil from rose petals.
Nielsen said the man, whose trip originated in Lebanon, cooperated with FBI agents and faces no criminal charges. His name was not released.
None of the 28 passengers and three crew members on the American Eagle flight from Chicago's O'Hare International Airport were affected, Bailey said.
Fort Wayne airport officials reopened the passenger terminal about 1:30 p.m. after it had been closed for nearly 10 hours. The airport's charter and cargo flights continued without interruption.
Richardson said the delay affected 16 arriving flights and 24 departures.
Bailey said the airline handled the bag correctly even though its owner was not on the flight to Fort Wayne.
"Because his bag had been checked and was already secure, it went on the flight," she said. "It's not uncommon that a bag that's already been cleared and secured would go onto the flight."
Travel Chaos Looms as Airline Union Vote for Strike
By Alan Jones, Industrial Correspondent, PA News
Thousands of holidaymakers were tonight facing the threat of travel chaos over the August bank holiday after the biggest union at British Airways called a 24-hour strike over pay.
The Transport and General Workers Union said thousands of its members at the airline, including baggage handlers and check-in staff, will walk out at 4.30am on Friday, August 27 after voting overwhelmingly for industrial action.
Rail travellers were also warned of disruption after workers at Eurostar backed strikes in a separate row over pay.
The BA dispute worsened after the TGWU announced that two thirds of check-in staff and over 84% of baggage handlers had voted to take industrial action in protest at a three-year pay deal worth 8.5%.
The airline tonight repeated its call for workers to be balloted again after a fresh offer was tabled of an extra £1,000 provided sickness absence was halved.
Operations director Mike Street said it would be “absurd” for a strike to go ahead on the basis of an old offer.
Talks between the two sides will continue tomorrow but the clock is now ticking on a one-day strike which would cause massive disruption at airports including Heathrow, Gatwick, Birmingham, Manchester, Edinburgh and Glasgow.
Brendan Gold, chief negotiator of the TGWU, said workers were not prepared to accept a pay offer linked to sickness leave because they were concerned they would miss out if they were genuinely ill or had an accident.
He said the size of the vote should send a clear message to BA that workers were “angry” about their pay at a time when the airline was making improved profits.
Mr Gold said the two sides were not far apart but he accused BA of being “hostile” towards unions and said the company seemed more interested in having a dispute.
The offer of £1,000 was a move in the right direction but it was not acceptable to link it to sickness absence.
Mr Gold admitted that the strike would cause disruption throughout the bank holiday weekend and he appealed to BA’s chief executive, Rod Eddington, to intervene.
“Taking strike action is always a last resort but the consistent failure by BA to address the issues seriously have led to our members feeling they have no alternative,” he said.
“Passengers have a right to be worried because disruption to their travel arrangements is a real concern.
“We don’t want to disrupt people’s holidays and we are determined to reach a settlement.”
BA said its staff should be given an opportunity to vote on the new “substantially improved” offer.
Mr Street said: “We believe our staff must have an opportunity to make themselves heard fairly.
“It defies belief for the unions not to listen properly to their members on this vital issue.”
The GMB union is also threatening a 24-hour strike over the bank holiday weekend after its members, who work mainly as check-in staff at Heathrow and Gatwick, voted for industrial action.
Around 100,000 people will travel with BA every day over the bank holidays weekend which is one of the busiest periods of the year for air travel.
Meanwhile members of the Rail Maritime and Transport Union at Eurostar voted by 2-1 to strike over pay.
The union will announce a strike date later this week, warning of disruption over the bank holidays weekend.
Eurostar insisted that the strike would not affect services.
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By JAMES BOVARD
Last week four screeners for the Transportation Security Administration were arrested at Kennedy and La Guardia airports for stealing money, jewelry and other valuables from checked bags. The agents were caught in a sting operation after a torrent of complaints about luggage thefts. These arrests likely represent only a fraction of the abuses nationwide.
In April, four agents in Detroit were arrested for stealing laptop computers, cameras and other items from checked luggage. In June, four agents were arrested at the Fort Lauderdale, Fla., airport on charges of stealing cameras, laptop computers, perfume, CD players and money. Also in June, one screener was arrested in Philadelphia for stealing $335 from a passenger passing through his checkpoint, and 13 screeners were arrested in New Orleans on charges of stealing valuables from checked luggage. Many have been suspended with full pay while awaiting the outcome of the cases. According to the transportation agency, more than 28,000 claims of loss or damage have been filed.
While there have been some successful prosecutions, in at least one case the T.S.A. let a screener off the hook. Last year, video cameras recorded a Miami screener stealing CD's from checked luggage. But criminal charges were dropped after the screener's lawyer made it clear that he planned to ask a government official about T.S.A. operations at the trial.
The possibilities for mischief are considerable. Congress requires the transportation agency to check all airline baggage with bomb-detection machinery or with hand-held bomb detectors. More than $5 billion has been spent by the government and airports to purchase and install the new equipment. Unfortunately, the machines are unreliable. In 2002, Transportation Secretary Norman Y. Mineta told Congress that the machines have a false-positive rate of 35 percent - and if a bag tests positive, it must be searched by hand. To do this, agents routinely examine baggage in closed areas, far from prying eyes.
To complicate matters, the agency initially recommended that all passengers not lock their baggage to facilitate searches. The agency has since recommended that people buy T.S.A.-approved locks, but these have often been cut by screeners despite the agency's seal of approval.
The T.S.A. denies that a nationwide theft problem exists, and stresses that the vast majority of its 45,000 employees have not been accused of wrongdoing. It has nevertheless worked hard to limit its liability for baggage thefts and damage. According to the Air Transport Association, which represents the major United States airlines, the T.S.A. seeks to limit its total liability to $3 million a year - regardless of how much damage travelers incur.
In some ways, the thefts are not surprising. The transportation agency has done an abysmal job of managing its workforce. In June 2003, the agency admitted that it had failed to screen its own screeners and fired more than 1,200 employees after they failed criminal background checks or other internal investigations.
Some Americans may believe that luggage thefts are a small price to pay for making air travel safe. But the safety is a mirage. Tests by the Government Accountability Office and other federal agencies have found that the airport safety net continues to be full of holes. Clark Kent Ervin, the inspector general of the Department of Homeland Security, told Congress in April that T.S.A. screeners performed poorly in response to covert tests. More recently, the 9/11 commission report warned that "major vulnerabilities still exist'' in aviation security.
Airport security must be overhauled. Instead of relying on thousands of federal agents following often pointless routines (like treating grandmothers as potential hijackers), aviation security can be improved by relying on innovative procedures, including the use of private screeners trained to higher standards than T.S.A. agents, focusing on passengers who pose the greatest apparent risk and ceasing to shield airports and airlines from liability law suits if they fail to protect their customers.
President Bush said in 2002 that the law that created the T.S.A. "greatly enhanced the protections for America's passengers.'' But it takes more than long lines and delays at airport checkpoints to defeat terrorist threats. Is it wise to trust the T.S.A. to make air travel safe when it has a hard time protecting Americans from its own agents?
(This story contains corrected material, published Aug. 17, 2004.)
The 74 passengers and crew of a United Airlines flight bound for Vancouver used the emergency chutes to exit the aircraft Monday at O'Hare International Airport after sparks were seen coming from one of its engines (this sentence has been corrected to identify the plane's location).
Flight 1035 was taxiing to a runway just after 8 p.m. when the pilot of an airplane in line to take off reported the sparks to the air-traffic control tower, said Chicago Department of Aviation spokeswoman Kristen Cabanban. The 69 passengers, two pilots and three flight attendants slid down the inflatable emergency gear of the Airbus A319, said United Airlines spokeswoman Jenna Obluck. A flight attendant and two passengers suffered minor scrapes and bruises, Obluck said. Two of them were transported to Resurrection Medical Center.
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Associated Press
INDIANAPOLIS - The parent company of low-cost carrier ATA Airlines has warned it likely will run out of cash in early 2005 and might sell some assets or restructure.
ATA Holdings Inc. lost $90.7 million during the first half of this year while contending with soaring costs of jet fuel and declining business for its military charters, the Indianapolis-based company said in a filing Monday with the Securities and Exchange Commission.
ATA, while continuing a full schedule of flights, is negotiating with its pilots and flight attendants unions to gain concessions and cost savings.
"Under current operating assumptions and absent any changes to existing aircraft lease obligations, the company does not expect to have sufficient cash to meet its cash obligations in the first quarter of 2005," ATA Holdings Corp. said in its report to the SEC for the quarter ending June 30.
As of June 30, ATA had $150 million in cash on hand, down from $186 million at the same time last year.
ATA's cash flow problems have been compounded because the bank that processes the airline's MasterCard and Visa payments has started holding onto the entire amount charged by a passenger until the flight takes place, according to the company's filing. Previously, the company would receive a portion of the ticket purchase in advance.
This change, ATA estimates, will cut the company's cash balance by $20 million.
For the first half of 2004, ATA had $778.1 million in revenues, up, a 2.1 percent from the first six months of 2003. Total passengers increased by about 6 percent to 5.9 million.
The company blamed its financial problems on rising fuel costs and heavy competition that has kept fares low. For the first half of 2004, the company spent $168.1 million on fuel and oil, a 17.4 percent increase from the same period in 2003.
After laying off about 200 of its 8,000 workers, ATA has asked those still on the payroll for concessions. ATA pilots last month agreed to $43 million in contract concessions, but the company has come back to them this month to raise the idea of additional concessions, said Erik Engdahl, executive council chair for the Air Line Pilots Association unit at ATA.
Flight attendants rejected $8.9 million in contract cuts.
To boost revenue, the company is launching business-class seating this month. Also, the company said it might begin service to Europe next year.
"Even with these potential initiatives, the company faces significant risks beyond its control that could affect its long-term viability," the company stated.
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US Airways Plans to Ask for Extension
By Keith L. Alexander
Washington Post Staff Writer
In an effort to conserve cash, financially ailing US Airways Group Inc. said yesterday that it plans to ask the Internal Revenue Service for permission to delay payments into the pension plans of two of its employee groups.
The Arlington airline said it would ask the IRS for permission to spread out $67.5 million in payments into its flight attendants' and mechanics' 2004 pension plans over five years. The payments are due over the next 18 months.
"Rescheduling these payments will help US Airways to conserve its cash so that we have sufficient liquidity to operate the airline," Jerold A. Glass, US Airways vice president of employee relations, said in a statement.
The airline said the proposed payment rescheduling would not affect retirees or employees' ability to retire under the plans.
Randy Clerihue, a spokesman for the Pension Benefit Guaranty Corp., said that for the IRS to agree to such a request, the airline must make available appropriate collateral. The IRS and the PBGC, the federal agency that monitors corporate pension plans, would decide on the type of collateral US Airways should offer, Clerihue said. After US Airways submits its request, a decision would take at least a month, he said.
Such requests of the IRS are not uncommon. Last year, Northwest Airlines Corp. won approval from the tax agency to stretch out payments of $454 million into its pension plan for its salaried and contract employees over five years.
US Airways is scrambling to avoid a second bankruptcy filing as it seeks to secure $800 million in pay and benefit concessions from its employees before the end of September. The carrier must meet certain financial requirements by that time under the terms of its federally backed guarantee on $900 million in loans. It emerged from bankruptcy in March 2003.
Last week a report issued by Glanzer & Co., an independent financial adviser hired by US Airways' pilots union, said the airline could file for bankruptcy as early as next month and could even face liquidation if it failed to reach new cost-cutting agreements with its unions.
Analyst Raymond Neidl of Blaylock & Partners said US Airways' decision to seek additional time to pay into its pension plans was a signal that the carrier was trying to find ways to preserve cash to continue operating if it goes back into bankruptcy.
In addition to its current pension payments, the airline has a $130 million pension payment for 2003 due next month.
Battling its own pension woes, United Airlines said this summer that it would stop contributions to its employee pension plan until it emerged from bankruptcy.
Joe Tiberi, a spokesman for US Airways mechanics, said the union's attorneys were reviewing the airline's IRS request. Tiberi said union officials did not see any reason to be alarmed.
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The Bush administration informed the European Union it wants to scrap a 12-year-old agreement that let E.U. members subsidize Airbus, the world's biggest plane manufacturer, a U.S. trade official said. Negotiations to replace that agreement are set to take place between U.S. and European trade officials next month. U.S. and European officials met in Brussels in July to begin working out their differences. Airbus of Toulouse, France, receives loans from the British, French and German governments that Boeing says carry below-market interest rates. President Bush told Boeing employees in Seattle last week that the Unites States will attempt to end the subsidies and will bring a case before the World Trade Organization if necessary. Democratic lawmakers have called for a WTO complaint since April.
By RACHEL L. SWARNS WASHINGTON, Aug. 16 — Homeland Security officials said today that they planned to begin screening airline passengers against a list of potential terrorists, taking over a responsibility now carried out by the airlines.
Advocates for tougher screening requirements as well as civil libertarians have sharply criticized the current system, under which airline employees check passenger names against government watch lists to ensure that terrorists do not board airplanes and that law enforcement officials are promptly notified of potential security risks.
The system has been described as ineffective because the government does not provide the airlines with a comprehensive set of watch lists, in part because some of that information is classified. It has also been criticized by civil libertarians who cite instances in which airlines have mistakenly denied innocent passengers the right to fly.
Under the new system, Homeland Security officials said, the airlines will provide the department with passenger lists and government officials will check those names against a more expansive watch list. Homeland Security officials declined to say when their department would assume that responsibility, but they said the shift would create a more thorough screening of passengers than is now possible, since the airlines currently lack access to names on some of the government's so-called no-fly lists.
The undersecretary for border security at the Department of Homeland Security, Asa Hutchinson, outlined the department's decision to take over the responsibility for airline passenger screening at a Senate Commerce Committee today. In its report, the independent commission on the attacks of Sept. 11, 2001, urged the government to take such a step.
"That is not the comprehensive check for security reasons, because it's an airline-based system," Mr. Hutchinson said of the current system during the hearing. "That's what has to change and we recognize that, agree with that recommendation, and we'll be taking steps to accomplish that."
Lawyers for the American Civil Liberties Union, which sued the government this year on behalf of passengers who had said they were wrongly placed on no-fly lists, cautiously welcomed the change.
One of the A.C.L.U. lawyers, Catherine Kim, said she believed the decision reflected an acknowledgment of problems in the current system. She said that she hoped that government involvement would bring more uniformity to the process and provide a centralized mechanism for passengers mistakenly identified as terrorists to remove their names from terrorist watch lists.
"On the one hand, we are glad to see the government acknowledging the problems in the current implementation of the no fly list and making efforts toward remedying those problems," Ms. Kim said.
"But it remains to be seen whether innocent passengers will continue to be identified and treated as potential terrorists repeatedly," she said. "To the extent that the government's decision would remedy that, it would be welcome."
In its report, the 9/11 commission called on the government to take over the screening of airline passengers, saying that the current process was limited because "concerns about sharing intelligence information with private firms and foreign countries keep the the U.S. government from listing all terrorist and terrorist suspects who should be included."
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The Aviation Tech Center was certified to train aviation maintenance technicians today by the Federal Aviation Administration.
The center began training airframe and power plant technicians in January. It is operated by Cowley College, with support from the Kansas Institute for Technical Excellence, a consortium of four area colleges and the Kansas Technical Training Initiative.
Classes start again Aug. 30. The center is located at 7603 E. Pawnee.
Previously, the Wichita Area Technical College had trained mechanics since the 1970s. The new program is 18 months long, and was created with the support of local aircraft companies.
-Katherine Leal Unmuth
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POSTED: 12:44 pm EDT August 16, 2004
NEW YORK -- A woman born with birth defects that left her without arms and legs has sued Air France, saying she was prevented from boarding a flight by an airline employee who insulted her by saying "a head, one bottom and a torso cannot possibly fly on its own."
Adele Price, of Mansfield, England, filed the lawsuit in Manhattan federal court, seeking unspecified damages and including the quote in her claim.
Price said she suffered emotionally, psychologically and endured large expenses as she tried to complete a trip from Manchester, England, to New York in August 2000. She said she paid someone else to fly with her and eventually completed the trip.
At a news conference outside federal court Friday, Price said an Air France employee in Manchester told her "one head, one bottom and one torso cannot and will not be allowed to fly on Air France" without someone to help.
Price said she was born with birth defects caused by the drug thalidomide, which was taken by her mother during pregnancy.
Chris Maio, a spokeswoman for Societe Air France, said she had just learned about the lawsuit and didn't have enough information to comment.
By MICHELINE MAYNARD
THE nation's airlines are hailing an agreement signed last month that could lead to a five-fold increase in the number of flights between the United States and China.
The news couldn't come at a better time for the airline industry, which has seen competition skyrocket and profits plummet everywhere except the Asian market. Airlines report a strong increase in demand this year, with about 800,000 people traveling between the United States and China. Though airlines say it is difficult to estimate the percentage of business versus vacation travelers, much of the traffic is believed due to the rush of American companies to start or expand ventures in China.
This year through April, travel between the United States and Asia in general rose 24 percent versus the same four months last year, when passenger levels fell sharply with the outbreak of Sudden Acute Respiratory Syndrome and a weaker economy, according to the Commerce Department's Office of Travel and Tourism Industries.
The agreement, announced July 23, will increase the number of passenger and cargo airlines allowed to fly between China and the United States by the end of the decade to nine from four. And the number of allowable flights a week will jump to 249 from 54 by then.
Transportation Secretary Norman Y. Mineta, in announcing the agreement, said further expansion is possible. Right now, United and Northwest are the only United States passenger airlines going to China, which also is served by Federal Express and United Parcel Service. But Secretary Mineta said another passenger airline and another cargo carrier might be selected next year.
Interested airlines include American, the world's biggest, which said it planned to lobby hard to be allowed to pick up China flights. Continental Airlines also is interested in flying to China. Delta Air Lines, meanwhile, began a code-sharing arrangement with Air China in April, allowing passengers to earn Delta miles on Air China flights.
The old agreement limited American carriers to five cities in China. (Chinese carriers, which are run by the government, are allowed to fly to 12 American cities.) The new agreement places no limit on the number of cities that the carriers can serve in either country.
Given China's vast size, however, it's still likely that Americans will head for a major destination, like Beijing, Shanghai or Hong Kong, and then take domestic flights from those cities.
Of the 195 potential new flights a week, 84 can be passenger flights, while 111 would be cargo flights. The expansion means there will be plenty of flights available in 2008, when Beijing is host to the Olympic Summer Games. But airlines are not waiting until then to expand their service.
Within hours of the agreement, United and Northwest announced service on two new routes. United, which recently began flights between San Francisco and Shanghai, said it would add seven nonstop flights a week between Chicago and Shanghai. Northwest is adding daily flights between Detroit and Guangzhou, via Tokyo.
Guangzhou is the third city in China to be served by Northwest, which began flying there in 1947, when it was known as Northwest Orient. The airline serves Beijing and Hong Kong through Tokyo.
Whether the new service to China means ticket prices will fall isn't clear. Robert W. Mann Jr., an airline industry consultant in Port Washington, N.Y., said the strong demand by airlines to add flights reflects American companies' expansion in China. General Motors, for instance, is pushing to make China its second-biggest market, behind the United States.
Given that China is one of the last markets offering airlines the opportunity to charge top dollar for premium service, Mr. Mann said he expected the carriers to focus much of their attention on business travelers.
The opportunity to attract high-paying customers is a reason American Airlines is pushing hard to start flights to China. The airline estimates that 45 percent of visitors to Asian cities pay full-fare prices.
"My only regret is that we don't have a bigger Asian network," American's chief executive, Gerard J. Arpey, said in July.
But in the long term, airlines will have to set fares that can appeal to a wide variety of customers. "You can bet that travelers in China will not be willing to pay those fares," Mr. Mann said.
Increased service will mean more Americans getting a chance to experience domestic aviation in China, which can be an unpredictable experience. China is in the midst of a restructuring of its airline market. In the 1980's, 10 carriers operated in China, all under government control. Two years ago, the General Administration of Civil Aviation of China, known as C.A.A.C., said it would combine the airlines into three: Air China, China Eastern and China Southern.
Delays in China are notorious: two of every five flights within the country do not take off on time, the aviation agency says.
A group of private investors hopes to create China's first privately owned airline this year, and there is talk in aviation circles that the government may create a low-fare carrier. But that is still down the road, giving American carriers a window of opportunity to fly to a part of the world that is still ripe for exploration.
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THE Fiji Islands Council of Trade Union has challenged Air Fiji's assurance to the public that it had enough manpower to continue operations.
Union general secretary Attar Singh said the advertisement by the airline on Friday was an attempt to hoodwink the travelling public into believing that everything was under control.
Thirty workers went on strike three weeks ago after the airline did not reinstate an engineer.
Chief executive officer Sialeni Vuetaki sacked 27 of them after they failed to return to work.
Mr Vuetaki said the striking union members had acted in defiance of a clear ministerial order and company directive and that the defiance was voluntary and deliberate.
In the advertisement, the airline said it was satisfied with its current team of 11 qualified licensed aircraft maintenance engineers, which would be increased within a week.
It said a complement of 43 pilots were with Air Fiji.
"Air Fiji is happy that operations are normal and the travelling public is being served well by our services," it said.
But Mr Singh said the number of personnel the airline claimed to be working for it was misleading.
"We have written to CAAFI challenging the contents of their statement and we hope to hear from them soon," he said.
"We believe that the number of people they claim to be working is misleading and in fact, the number is far less."
CAAFI chief executive Norman Yee could not be reached for a comment.
Wellington, New Zealand, Aug. 14 (UPI) -- New Zealand Aviation Industry Association President John Funnell said the aviation industry is headed toward a shortage of pilots and engineers.
He said the ageing workforce, industry growth, and competition for school-leavers were all contributing to the skills' shortage, the Wellington Dominion Post reported Saturday.
Industry leaders will meet August 25 in Wellington to establish how many pilots and engineers need to be trained over the next few years, and find ways of averting a crisis which could hamper industry growth.
Funnell said there were sufficient pilots at present, but competition for quality pilots meant some small operators were considering quitting the business.
"We are already tight for pilots now. We are in almost a critical situation for engineers."
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US Airways stock drops 22%; deep cuts needed, pilots' group warns
Bloomberg News
Shares of US Airways Group Inc., which is seeking employee concessions to avoid a second bankruptcy filing, fell 22 percent after a report commissioned by the pilots' union warned the company may fail without the cuts.
Shares dropped fell 56 cents to $1.98 on Friday.
The report, sent to pilots late Thursday by the Air Line Pilots Association, echoed the airline's statements that it would need to seek protection from creditors if it couldn't cut $800 million in labor expenses by the end of next month. Pension payments due Sept. 15 may precipitate a bankruptcy filing.
Labor concerns
"I think seeing specific dates is what kind of spooked the market," said Blaylock & Partners analyst Ray Neidl. "Time is getting short."
US Airways is seeking employee concessions for the third time in three years to cut costs by $1.5 billion a year to compete with discount carriers. The No. 7 U.S. carrier, last exited bankruptcy in April 2003 after the U.S. backed most of a $1 billion loan.
A July 14 report by the union's financial adviser, Glanzer & Co., said pilots can either negotiate an agreement to lower costs or reject negotiations and prepare for a liquidation – or less likely, the imposition of new contract terms at a weakened airline.
Critical timing
The airline has a payment on a government-backed loan that must be met by Sept. 30. The carrier could seek revised terms with the Air Transport Stabilization Board, the federal agency that grants loan guarantees, as it did earlier this year.
Financing agreements for regional jets with manufacturers Empresa Brasileira de Aeronautica SA and Bombardier Inc. and engine-maker General Electric Co. call for US Airways to meet cost-cutting terms by Sept. 30.
If the air-transport board "were to seek repayment in whole or in part, these creditors would do likewise or require deposits or cash collateralization," the report said. "The company will not be able to meet those demands, and the game would be over."
If US Airways files for bankruptcy, "it's probably never going to come out," said Mr. Neidl, the analyst. "It's not going to be able to attract creditors or investors. They need to do it now or it's never going to get done."
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By Alexander Coolidge
Post staff reporter
Offering fares as low as $59 for a direct flight to Washington Dulles International Airport, Independence Air expects to draw bargain-hungry fliers throughout Southwestern Ohio, Northern Kentucky and Indiana.
This Sunday, the low-cost airline that formally operated as a regional carrier for Delta Air Lines Inc. plans to extend cut-rate flights between its hometown and airports in Dayton, Columbus and Indianapolis.
The company, previously called Atlantic Coast Airlines, also plans to extend service to Louisville on Aug. 23.
Though officials at the Cincinnati/Northern Kentucky International Airport have courted low-cost airlines to extend service to the Hebron airport that Delta calls its second home, Independence officials say for now they are content to draw from the estimated 5,000 Cincinnati-area residents that drive elsewhere for cheap flights.
Delta, which operates its second-largest hub here, flies more than 90 percent of local departures.
"Cincinnati is not currently on the map though it's one of many cities we're looking at for potential future growth," said spokesman Rick DeLisi.
Analysts say though low-cost carriers are more aggressively competing against struggling legacy carriers like Delta, carriers like Southwest Airlines and AirTran usually target non-hub airports to siphon passengers from major markets.
"A lot of low-cost carriers focus on outlying areas," said Suzanne Betts, an analyst with Argus Research in New York, adding that Delta competes with discount carriers in many of its markets.
Low-cost carriers currently control about a quarter of the U.S. flight market and are projected to increase that share to 45 percent in the next five years.
Low-cost carrier Vanguard Airlines, which ceased operations in 2002, twice failed to penetrate the Cincinnati market, the last time in 2000.
Last year, AirTran listed Cincinnati on its Web site as a potential new destination but has not moved to site operations here.
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Ithaca to lose Pittsburgh option
ANDREW TUTINO
Journal Staff
ITHACA -- The Ithaca Tompkins Regional Airport will lose all of its flights to Pittsburgh as US Airways announced on Thursday it is cutting back on flights across the country.
The airport will pick up three new flights to Philadel-phia, bringing the total number of departures from Ithaca to 11. There were 12 departures previously, with four to Pittsburgh everyday.
Of the 11 flights, five will continue to fly to New York City's LaGuardia Inter-national airport, and six will fly to Philadelphia, said Bob Nicholas, the airport manager.
Nicholas said the cutbacks by US Airways are affecting smaller, regional airports across the country.
"I don't think losing a destination is ever a good thing," Nicholas said. "Those people who fly to Pittsburgh directly are going to have to do something else. It's not good."
Most of the Philadelphia flights are scheduled to be on larger, 50-seat, twin-engine jets as opposed to the 30-seat turbo props that flew to Pittsburgh, Nicholas said.
Overall, traffic at the airport is up, with both departures and arrivals climbing in the first six months of 2004 compared to the previous year.
Nicholas said the airport is still awaiting word on whether it will receive a federal aviation grant that will allow it to try to pursue other airlines to Ithaca.
"If we can get the grant, it will help tremendously and we will be able to talk with other carriers to let them know what Ithaca has to offer," Nicholas said.
US Airways will end nonstop service Nov. 7 to 20 routes from Pittsburgh, including Ithaca, Binghamton and Elmira-Corning.
In Elmira, officials said they regretted the decision, but reported numbers at the airport's other two carriers, Northwest Airlink and Continental, are up.
In Binghamton, the move will cut four flights from the daily schedule and trim capacity by 174 seats daily. US Airways accounts for about half of the 10,000 to 11,000 average monthly boardings at the Town of Maine airstrip.
According to the Bureau of Transportation statistics, 12 percent of the US Airways flights originating in Pittsburgh were late last year compared with 23 percent in Philadelphia. Pittsburgh is US Airways' third-largest hub. Philadelphia is the carrier's hub for trans-Atlantic flights, and Charlotte, N.C., is a hub for the company's profitable routes to the Caribbean.
US Airways, which is fighting a return to bankruptcy, had already signaled its intentions this summer to offer fewer flights to fewer destinations from Pittsburgh International Airport. The reductions are part of Pittsburgh's downward shift from a hub to a so-called "focus city."
The 20 routes affected by Thursday's announcement are served by US Airways or its affiliate, express carriers. The company said it would keep nonstop service to more than 50 markets and remain the airport's largest carrier. Link to external site
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HANOVER TWP. -- Several Florida-bound flights out of Lehigh Valley International Airport were canceled in anticipation of harsh weather associated with Hurricane Charley's landfall, LVIA officials said Friday.
Southeast Airlines, which offers direct service to three Florida cities, canceled its regular scheduled flights to St. Petersburg on Friday morning and Friday afternoon. The airline also canceled a Friday night flight to Orlando. Its flights to Ft. Lauderdale remained on schedule as of Friday afternoon.
George Doughty, executive director of the Lehigh-Northampton Airport Authority, said cancellations are common in the event of a hurricane, and Southeast had been anticipating them since early this week. "They've been calling passengers and rebooking them since Wednesday," he said.
Merck plans expansion
READINGTON TWP. -- Merck & Co. Inc. is planning a major expansion in the Philadelphia suburbs that could create at least 800 jobs.
The Hunterdon County-based drug maker said Wednesday it will begin construction next year on a 600,000-square-foot facility at a 154-acre site in Lower Gwynedd Township, Pa.
The facility will serve as the headquarters for Merck's U.S. Human Health division, which makes and sells vaccines and other medicines in the United States. Human Health made up 60 percent of Merck's $22.5 billion in global sales in 2003.From staff and wire reports
HERBERT G. McCANN
CHICAGO - The Pension Benefit Guaranty Corp. said Friday it will ask a federal bankruptcy court to throw out parts of a financing deal that United Airlines says prohibit it from making required contributions to its pension plans.
The agency also says it will file claims totaling $8.3 billion on behalf of pension plan participants in United parent UAL Corp.'s four defined-benefit pension plans.
"United's decision to stop funding its pension plans increases the risk of loss not only to the company's workers and retirees but to participants in other plans insured by the PBGC," executive director Bradley Belt said. "The bankruptcy court should reject this attempt to sidestep the statutory funding rules. Agreements between private parties must not take precedence over federal pension law."
In a statement, United said deferring contributions to its pension plans provides "critical liquidity, flexibility and stability as we continue our restructuring work and pursue exit financial without a federal loan guarantee.
"Our responsibility lies in successfully restructuring our business for the benefit of all United stakeholders in a way that ensures that we can thrive as a competitive, sustainable company post-exit," the statement said.
Both the Association of Flight Attendants and the International Association of Machinists and Aerospace Workers on Friday filed objections to United's motion that the court approve the proposed financing terms.
"The financing agreement should be denied because it is predicated on United halting its funding of employee pension plans, which the Pension Benefit Guaranty Corporation has said is inconsistent with federal law," said machinists union vice president Robert Roach.
Elk Grove Village, Ill.-based United had been facing more than $4 billion in required payments to the underfunded pension plans through 2008, including $725 million for 2004 alone.
United said a new, $1 billion interim financing package effectively prohibits further pension contributions before it leaves bankruptcy.
United sponsors four pension plans covering almost 119,000 workers and retirees, according to the PBGC, a federal corporation created under the Employee Retirement Income Security Act of 1974.
Of the $8.3 billion in underfunding, the agency estimates it would be liable for $6.4 billion if all four plans terminated. The $1.9 billion difference represents the benefits that United's workers and retirees would lose because they exceed guarantee limits set by Congress.
The PBGC guarantees payment of pension benefits earned by 44 million American workers and retirees in more than 31,000 private-sector defined benefit pension plans.
Austan Goolsbee, professor of economics at the University of Chicago Graduate School of Business, said the PBGC's payouts and deficit are growing as more companies dump their pension obligations on the federal government. He said the agency is concerned that if United is successful, other companies will attempt similar moves.
If that happens, he said, "It will require a huge bailout."
The International Association of Machinists and Aerospace Workers, which represents more than 20,000 United ramp workers and customer service agents, has filed lawsuits challenging the airline's stance. Other unions representing UAL workers also are angry over the airline's pension stance.
Earlier this week, the Air Line Pilots Association said its members will battle with every legal means to prevent the company from destroying the pilot pension program."
"The management at United Airlines and other carriers suffer from a lack of imagination in addressing economic challenges and have utterly failed to take advantage of the savings they have already received from pilots and other employees," ALPA president Duane Woerth said Friday.
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By Ben Mutzabaugh, USATODAY.com
WASHINGTON — Hurricane Charley, which is predicted to track up the East Coast over the weekend, will cause many airport closures and flight delays and cancellations. Most carriers have also instituted flexible rebooking policies for affected travelers. (Related items: Track your flight | delays map)
Below is an alphabetical airline-by-airline update of the latest "hurricane policies." Amtrak updates are also included.
AirTran Airways
AirTran has already cancelled two dozen flights because of Charley and Tropical Storm Bonnie, including flights between Florida and Georgia, Washington, D.C., Pennsylvania, Ohio and Mississippi. All of the airline's Friday flights to Fort Myers and Tampa are canceled.
Passengers scheduled to fly into or out of affected cities between for flights through Friday, Aug. 13, are being offered the opportunity to alter their flight itineraries without change fees or fare adjustments.
For more information, call -800-AIR-TRAN. In Atlanta call 770-994-8258. Or visit AirTran's Web site.
American Airlines
American is allowing customers to make one change to their itineraries without a fee. Certain dates restrictions apply, but changes are allowed for passengers whose itineraries involved travel to or from certain destinations.
Those destinations are: most Florida cities; New Orleans; Kingston and Montego Bay in Jamaica; Grand Cayman Islands; Port-au-Prince, Haiti; and La Romana, Punta Cana, and Santo Domingo in the Domincan Republic. Restrictions apply to both the dates of your original itinerary and to the days allowed for rescheduling.
For more information, call 800-433-7300 or visit www.aa.com.
Amtrak
Amtrak suspended train service between New York City and Miami for Friday and Saturday. Amtrak's Auto Train that operates between Lorton, Va. and Sanford, Fla., is also canceled.
For more information, call 800-433-7300 or visit Amtrak's Web site.
ATA Airlines
Customers scheduled to fly into or out of Florida on Aug. 12, 13 and 14, may voluntarily change travel dates (not routing) with no change fees or fare penalties, as long as rescheduled travel is completed by Sept. 15.
All travel changes must be made through ATA ticketing locations, or bycontacting ATA's Reservations Department at 1-800-I-FLY-ATA. For the most up-to-date information on flight status and availability, ATA advises customers may go to its Web site.
Continental Airlines
Continental warns that delays from Charley could also impact its New York-area operations, possibly delaying flights on other routes.
The airline is allowing customers the option to reschedule or reroute travel one time, without a penalty, who are ticketed to, from or through certain for travel through Wednesday, Aug. 18. Travel on the new itinerary be completed by Aug. 31. The impacted cities are: Charleston, S.C.; Daytona Beach, Fla.; Fort Myers, Fla.; Fort Walton Beach, Fla.; Fort Lauderdale; Grand Cayman Island; Gulfport/Biloxi, Miss.; Jacksonville, Fla.; Key West, Fla.; Kingston, Jamaica; Miami; Mobile, Ala.; Montego Bay, Jamaica; Myrtle Beach, S.C.; Orlando; Pensacola, Fla.; Sarasota/Bradenton, Fla.; Savannah, Ga.; Tallahassee, Fla.; Tampa/St. Petersburg, Fla.; and West Palm Beach, Fla.
For more information, call 800-525-0280 or visit www.continental.com.
Delta Air Lines
Delta is offering relaxed rebooking restrictions for travelers to affected areas through Aug. 14. Dates vary by city, but apply for flights to/from Brunswick, Ga.; Charleston, S.C.; Daytona Beach, Fla.; Freeport in the Bahamas; Fort Myers, Fla; Cayman Islands; Gainesville, Fla.; Jacksonville, Fla.; Key West, Fla.; Kingston and Montego Bay in Jamaica; Melbourne, Fla.; Orlando; Sarasota, Fla.; Savannah, Ga.; Tampa.
For more information, call 800-241-4141 or visit Delta's Web site.
JetBlue Airways
JetBlue will waive the $25 change fee plus any difference in fares for customers booked for travel into and out of Fort Myers, Tampa and Orlando from Friday, Aug. 13th, through Saturday, Aug. 14th. Rescheduled travel must be completed no later than Tuesday, Aug. 17th. Please call 1-800-JETBLUE if you wish to change your flight, or visit the airline's Web site for more information.
Independence Air
Independence Air will waive the regular $25 change fee as well as any fare differences for passengers flying to or from Jacksonville, Fla.; Savannah, Ga.; Charleston, S.C.; Columbia, S.C.; Raleigh-Durham, N.C.; and Greensboro, N.C.
For more information, call 800-FLY-FLYi. or visit Independence's Web site.
Northwest Airlines
Northwest Airlines has issued a weather waiver — effective immediately — for passengers with confirmed tickets for travel to, from or through any airport in the state of Florida beginning Aug. 11 through Aug. 14 may reschedule their travel plans through Aug. 16, 2004, without penalty or fees subject to availability.
For more information, call 800-225-2525 or visit Northwest's Web site.
Southwest Airlines
For Southwest customers holding reservations between Aug. 12-15 for travel to/from Tampa, Jacksonville and Orlando may rebook their travel in the original class of service, travel standby or request a refund. Southwest says its subsequent flight operations to/from these airports will depend upon the airports' operating status. For more information, call 800-435-9792 or visit Southwest's Web site.
Spirit Airlines
Spirit Airlines has cancelled several Friday flights into and out of Fort Myers, Tampa and Orlando. Customers traveling into or out of Florida through Aug. 18 may change their reservations at no charge through Sept. 15. Or, customers may request a future flight credit that may be used for a future Spirit Airlines booking. The flight credit is valid for one year from the date of the original booking.
For more information, call 800-772-7117 or visit Spirit's Web site.
United Airlines
United warns of delays from Hurricane Charley.
For more information, call 800-864-8331 or visit United's Web site.
US Airways
US Airways will allow passengers traveling to or select locations to change their flights without penalty. All changes must be made on or before the originally ticketed travel dates. The entire itinerary can be moved forward or delayed, up to seven days from the scheduled departure date. Or, the full value of wholly unused ticket(s) can be applied toward the purchase of a new ticket(s) to an alternate destination, with travel to originate within seven days of the scheduled departure date. Certain restrictions may apply.
Dates vary, but affected cities are: Charleston, S.C.; Fort Myers, Fla.; Fort Walton Beach, Fla.; Gainesville, Fla.; Grand Cayman Island; Hilton Head, S.C.; Jacksonville, Fla.; Key West, Fla.; Mobile, Ala.; Montego Bay, Jamaica; Orlando; Panama City, Fla.; Pensacola, Fla.; Sarasota/Bradenton, Fla.; Savannah, Ga.; Tallahassee, Fla.; Tampa
Christophe Guillemin
ZDNet France
Europe is to follow the UK's lead in issuing strict rules about photos to be used in biometric passports - smiling and headgear are forbidden
It's not just smiles that are forbidden on photos for Europe's forthcoming e-passports -- oversized glasses and headwear will also be out.
According to a specification from the International Civil Aviation Organisation, citizens of the 188 member countries will have to respect strict rules before getting into the photo booth -- including instructions to stop smiling too much, because it will affect the soon-to-be-introduced digital facial recognition systems.
Recently, the UK government put its head above the parapet by publishing instructions on the matter. The passport service has stipulated that it will only allow photos in which the face of the passport holder is shown in its entirety and looking straight at the camera, with a neutral expression and a closed mouth.
The directive will come into force in March 2005 in the UK and will form part of the Europe-wide drive towards biometric passports.
While biometrics can use a person's fingerprints, iris or face to identify them, Europe has opted for the face as its favourite biometric for identity documents.
So how exactly does smiling hamper the facial recognition systems? "The smile alters the position and the structure of the eyes and nose, which are the three principal identification points which characterise a face," according to Thales Security and Supervision, a subsidiary of the French security and defence technologies group,
"The haircut or beard have less effect on facial recognition," it continues, adding that facial recognition techniques currently use an average of 128 points of comparison.
Europe looks set to follow the UK's decision on the matter. Every country planning to introduce a biometric passport -- and therefore all the states of the EU -- will have to publish similar directives.
The need to keep a neutral expression is clearly written in the reference document that will be used as the foundation for all such processes. The document in question is appendix A of "the biometrics deployment of machine-readable travel documents", published in May by the ICAO.
The appendix gives clear instructions on how to take a photo that can be used for biometrics. As well as not smiling, the ICAO recommends looking straight at the camera, keeping eyes open, not having hair over the face, not wearing tinted sunglasses, not wearing hats or religious head coverings that obscure any part of the face from the bottom of the chin to the top of the forehead and being alone in the picture.
While wearing a hat or a baseball cap is forbidden, a headscarf that covers just the wearer's hair is permissible. In France, the law states that photos for identity purposes must never be taken with any form of headwear -- religious or not.
The first biometric passports will be phased in progressively from 2005. Biometric passports and visas are intended to improve authentication of the documents themselves and not, at least in the short term, to identify potential terrorists by means of automatic comparison between the individual and a blacklist of people stored on a distant server.
That kind of procedure is predicted in a second phase, when the technology will be more efficient, by using 3D comparisons and skin-texture analysis.
In 2005, European visas and passports will have to carry an RFID-type chip containing the digitised facial image of the rightful holder. When passing through customs, the document will be scanned by a reader, which will compare the image on the chip with the photograph on the document.
The stored image and the passport photo will be compared to the individual in person, either by customs officials or by technology. Link to external site
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WASHINGTON (Reuters) — Major airlines canceled some service to the Caribbean and Florida Wednesday and kept a close eye on other big airports as two storms churned through the Atlantic. (Check your flight status)
No. 1 American Airlines, Air Jamaica, British Airways and US Airways canceled flights to Jamaica due to Hurricane Charley, which was sweeping through the region and heading toward South Florida.
Low-cost carrier AirTran Airways also canceled flights to several cities in Florida and Mississippi due to Charley and Tropical Storm Bonnie, which is preceding the more powerful storm and targeting the Florida panhandle.
Airlines also offered passengers on some Caribbean and Florida routes the chance to rebook tickets to avoid potential travel disruptions.
United Airlines said late Wednesday that it, too, was giving passengers the opportunity to rebook. As of Wednesday night, No. 2 United had not canceled or rescheduled any flights.
Separately, Amtrak said it would suspend service Thursday between New York and Miami because of the storms and concerns over potential flooding and high winds that could damage signal systems.
The nation's only city-to-city passenger railroad said it would also halt service on the popular Auto Train that runs between Northern Virginia and the Orlando area.
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Washington, DC, Aug. 12 (UPI) -- Domestic airline traffic rose 6.3 percent between May 2003 and May 2004, the latest data from the U.S. Bureau of Transportation Statistics shows.
However, domestic airline traffic fell 2 percent between April and May 2004.
U.S. airlines carried 52.6 million passengers in May, on 802,602 domestic flights, up 0.6 percent from the previous year.
The number of seats sold and used rose 0.4 percentage points.
The average non-stop distance flown was also up 7.4 percent while the average passenger trip length went up 3.5 percent.
Among airlines, Southwest Airlines carried 7.14 million domestic passengers in May, the most of any airline, followed by Delta with 6.76 million passengers and American with 6.08 million.
Among airports, Hartsfield-Jackson International in Atlanta continued in May to be the busiest domestic airport, with 3.25 million passenger boardings.
Report data is compiled from monthly reports filed with BTS by commercial air carriers detailing operations, passenger traffic and freight traffic.
By MICHELINE MAYNARD The machinists union asked a bankruptcy court judge today to appoint a trustee to run United Airlines, ratcheting up what has become the most bitter labor-management conflict the airline industry has seen in over a decade.
The International Association of Machinists and Aerospace Workers also filed a separate motion against United's request that it be given four more months to draft a restructuring plan. United, which filed for bankruptcy in December 2002, made that request last week.
United has the exclusive right to file a restructuring plan through Aug. 30.
The move by the union was a response to United's announcement last month that it would not make required payments on its four employee pension plans while it remained in bankruptcy, and that it was considering a range of alternatives including termination.
On June 28, United's application for a federal loan guarantee package was rejected for a third time, forcing the airline to find billions of dollars in financing so that it can leave bankruptcy protection. United blamed the pension move on the unwillingness of lenders to finance the airline if its pension liability remained in place.
That action was denounced by United's pilots, who vowed in an angry statement earlier this week to use every legal means to fight the airline. United also has been criticized by its flight attendants' union.
"United Airlines management has thrown away the trust and respect of its employees," said Robert Roach, Jr., the machinists' union's general vice president of transportation.
"No airline can successfully exit Chapter 11 without employee support. This management team has placed UAL on a collision course with disaster," Mr. Roach said in a statement.
A United spokesman, Rich Nelson, referring to the airline's effort to exit from bankruptcy, said: "No amount of highly charged rhetoric or baseless legal filings will make the difficult issues standing between United and exit disappear. What we need now are constructive engagement and workable solutions."
The boiling conflict between United and its unions brought to mind the last great airline industry battle, at Eastern Air Lines. In 1990, a bankruptcy court judge removed Frank Lorenzo as Eastern's chief executive, and replaced him with Martin Shagrue, after unions and unsecured creditors joined forces to seek Mr. Lorenzo's outster. Eastern, then in Chapter 11 bankruptcy, ceased flying a few years later.
By contrast, the machinists were alone today in filing their motion, which came on top of two lawsuits filed by the union against United earlier this month. In those suits, and in its motion, the machinists' union charged that United's chief executive, Glenn F. Tilton, and other managers had violated their fiduciary duty to employees.
Labor experts viewed the dispute both as a battle between the machinists and United, and a bid by the union to emphasize its clout. In recent years, the machinists' union has been voted out at a series of airlines, including United, in favor of a rival group, the Airline Mechanics Fraternal Association.
At United, in fact, the machinists' union no longer represents mechanics, only ramp workers and gate personnel.
Because it has not yet been joined by others in the motion, and because there is a political note to the effort, the machinists may have a difficult time initially convincing United States Bankruptcy Court Judge Eugene C. Wedoff to grant their motion, said Gary L. Chaison, professor of industrial relations at Clark University in Worcester, Mass.
But Professor Chaison said the move nonetheless would put enormous pressure on United, which now faces a labor dispute that could drive away customers and perhaps even dissuade lenders from putting money in the bankrupt airline. "It chases passengers away pretty quickly. If they hear there is a labor dispute, they could go to another Web page" to book tickets, Professor Chaison said.
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By Jane Wharton
A SECOND Stansted runway is both "perverse" and "unworkable", according to MPs who have expressed doubts as to whether the expansion will happen.
During a parliamentary debate on the Aviation White Paper, several MPs raised doubts about the project, citing legal challenges and questions over its financial viability.
Shadow Transport Secretary Damian Green accused the Government of "fudge and incoherence" and said: "I think it is legitimate to question whether the Government's option of an early second runway at Stansted will ever come to pass."
During the House of Commons debate Mr Green was joined by Braintree Labour MP Alan Hurst and Bishop's Stortford Conservative MP Mark Prisk in attacking the White Paper.
Mr Green said it was significant that many of the legal challenges centred around the idea that the document was "fundamentally flawed."
He said: "There are four aspects to this flaw the lack of commercial justification for a second Stansted runway, the potential for mixed-mode use of runways at Heathrow, the failure to allow comments on proposals to extend the runway at Luton, and failure to give proper consideration of other options around the South-East."
A new Stansted runway would cost £4bn and questions were raised about its commercial viability. Stansted operator BAA has admitted prices are likely to increase but says this will not deter travellers.
Mr Green said the higher charges could drive away the operators and noted that if BAA tried to fund the expansion with cross subsidy from other airports, it could face more legal challenges.
He poured scorn on the lack of communication between Government departments, adding: "The Transport Secretary says he wants a second runway at Stansted within a few years because the surrounding area is thinly populated. County council planning officers have said the necessary road and rail improvements would cost the county £13 billion. These would need to be in place before the runway is scheduled to open by 2012."
Mr Prisk urged ministers to review their decision "before it is too late".
He said: "The decision is perverse because it ignores the views of the local community and of many people in business and the aviation industry. It is unworkable because of the large gaps in the road and rail plans and in the financing of the £4bn scheme.
"This is a runway that nobody wants, few can get to and even fewer can afford. That's the result of this misguided decision at Stansted."
A Department of Transport spokesman said it had considered a range of options before publishing the White Paper. "We stand by the White Paper and we will meet any legal challenges in court," he added.
BAA has said that despite the comments it was still confident of a second runway. A spokesman said: "We believe it will happen and we are pushing on regardless."
A flight attendant arriving at Perth Airport attempted to smuggle cocaine into Australia in his hand luggage and in packages strapped to his body.
The 32-year-old was a member of the cabin crew on a South African Airways flight from Johannesburg which arrived in Perth about 9am on Monday.
He was selected for a baggage examination and a swab taken from his luggage revealed high readings for cocaine, an Australian Customs Service spokesman said.
Customs officers subsequently found about two kg of cocaine in several packages in the flight attendant's hand luggage and inside a girdle strapped to his body.
Australian Federal Police arrested and charged him with importing prohibited imports.
He was due to appear in the Perth Court of Petty Sessions.
Air Canada cites restructuring cost
Revenue and capacity are up
CRAIG WONG
CANADIAN PRESS
Air Canada suffered a second-quarter loss of $510 million as the struggling carrier continued to restructure under creditor protection, which the airline said it is on track to exit by the end of September.
The Montreal-based company said yesterday it lost $4.24 per share in the three months ended June 30, compared with a loss of $566 million, or $4.70 per share, a year earlier.
Weighing on Air Canada's results was a $426 million restructuring charge in the quarter, compared with a $217 million restructuring charge in the second quarter of 2003.
Quarterly operating revenues were $2.22 billion, up from $1.95 billion.
"The labour-cost realignments completed this quarter in addition to the restructuring of supplier contracts and aircraft leases will effectively reduce Air Canada's operating costs by approximately $2 billion annually," said chief executive officer Robert Milton.
"However, current record-high fuel prices are a concern and a compelling reason to vigilantly continue reducing costs to ensure our viability going forward."
While Air Canada was able to reduce its operating expenses, fuel costs rose $82 million, or 28 per cent, from a year earlier to $374 million.
This was offset by reductions in salaries and wages, aircraft rent, maintenance materials and supplies and communications and information technology.
The airline said it earned an operating profit of $22 million in the quarter, compared with a year-earlier operating loss of $270 million.
Revenue passenger miles — the number of paid-for seats multiplied by the distance they flew — rose 19 per cent to 10.83 billion, while capacity rose 11 per cent to 13.93 billion.
The load factor — the percentage of seats filled — was 77.8, up from 72.1.
"We achieved record load factors for the quarter and revenues have recovered over-all following the devastating impact of SARS and the war in Iraq last year," Milton said.
He added that bookings for the remainder of August and September are strong, "and, despite high fuel prices, we expect to report improved year-over-year operating results for the third quarter."
Air Canada has been operating under creditor protection since April 1 last year.
Creditors — who under the restructuring plan could get as little as 6 cents for every dollar they claimed they were owed and who would be paid in the form of equity in the new company — will meet Aug. 17 to vote on the airline's restructuring.
If it is approved, the creditors would get a nearly 46 per cent stake in the new airline and the right to purchase an additional 42 per cent interest underwritten by Germany's Deutsche Bank.
Air Canada plans to a reduce its mainline fleet, operate with several thousand fewer workers and have no negotiations with unions on wages until at least 2006.
Suspect Passenger Actually Headed To Alabama
PHILADELPHIA -- Passengers on a flight from Dallas-Fort Worth to Philadelphia got quite a surprise when they landed. There were a lot of police officers and journalists there because of erroneous information from a security scare.
According to Transportation Safety Administration officials, a bag at the Dallas-Fort Worth International Airport had fallen off the conveyer belt. The bag was put through an X-ray machine, which revealed a suspicious device that looked like a pipe with wires and threaded caps. The airport was evacuated and the device was taken to a field on airport property and destroyed.
A problem with a barcode scanner made authorities initially think the passenger who checked the baggage was on American Airlines flight 562 headed to Philadelphia. But it turned out he was really going to Birmingham, Ala., where he has since landed and is being questioned.
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GRAPEVINE, Texas (AP) -- Part of an American Airlines terminal at the Dallas-Fort Worth International Airport was evacuated for several hours Thursday after baggage screening detected a suspicious object that turned out to be a vintage microphone, authorities said.
The terminal was reopened and airport operations resumed after a bomb squad used a robot to remove the pipe-shaped object that had wires running through it.
Ann Davis, a Boston-based spokeswoman for the Transportation Security Administration, said officials determined late Thursday afternoon that the microphone was harmless.
"We always err on the side of caution ... to ensure the safety of the traveling public," Davis said.
The bag had been dropped off for routine screening by a passenger who later boarded a flight to Birmingham, Ala. Investigators with dogs searched the plane when it arrived there and found nothing suspicious. The passenger was questioned.
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Ruling In Unprecedented Criminal Trial
A Japanese court has cleared a Japan Airlines pilot of professional negligence in a 1997 incident that led to the eventual death of a flight attendant and injury to 13 passengers.
Koichi Takamoto was captain on JAL Flight 706 from Hong Kong to Nagoya on June 8, 1997. Prosecutors accused him of making abrupt changes in the MD-11's attitude without disengaging the autopilot. That move is prohibited in the aircraft's operating manual, according to civil aviation investigators. Flight attendant Atsuko Taniguchi, 34, was thrown to the floor and then to the ceiling by the violent maneuver. She died 20 months later after sustaining severe head injuries.
While clearing Takamoto of criminal negligence, Presiding Judge Yoji Ishiyama blamed the pilot for shaking the aircraft so violently. At a news conference after the verdict was read, Takamoto said again and again, "It is not acceptable."
His lawyers argued that the severe jarring encountered by Flight 706 was caused by a brief computer malfunction and turbulence along the route of flight. They also argued that the 14 people who were hurt had disobeyed Takamoto's instruction to fasten their seat belts.
But what disturbed the Air Line Pilots' Association of Japan most was the use of a civil aviation investigative report in open court. Japan is a signator to the Convention on International Civil Aviation, which states in its bylaws that investigative reports should be used only to prevent future accidents.
But Judge Ishiyama ruled that the report was admissible so long as it had been made public.
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Airline executives warned to ease O'Hare delays that affect travel nationwide
WASHINGTON Federal officials will be meeting with airline executives again today to discuss the flight delays at Chicago's O'Hare International Airport.
Transportation Secretary Norman Y. Mineta says some progress was made in yesterday's meetings in Washington.
But he says more work is needed to reach a voluntary agreement that will truly ease delays at O'Hare.
Federal officials want the airlines to voluntarily reduce flight schedules at O'Hare. If not, Federal Aviation Administrator Marion Blakey says the government will do it for them.
Blakey says persistent delays at O'Hare have a cascading effect through the nation's air system.
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Bloomberg News
GENEVA -- Airlines will lose as much as a combined $6 billion this year on international routes if oil prices stay near record highs, the International Air Transport Association said Wednesday.
"We went from forecasting a gain of $3 billion at the beginning of the year to a $6 billion loss now," said spokesman Anthony Concil.
The price of oil dropped in New York and London Wednesday, but not before hitting a record high in both markets. On the New York Mercantile Exchange, oil settled at $42.83 per barrel after touching $44.25. In London, prices reached $40.99 before settling at $39.70.
The association, which represents more than 270 airlines worldwide, had based its original prediction for a profitable year on an average price of $30 per barrel for Brent crude oil. Giovanni Bisignani, the association's director general, said June 7 that the industry would break even if the price averaged $33 a barrel this year.
"Every dollar above $33 means a billion in costs, which is a billion in losses," Concil said.
If fuel stays at its current price, oil will absorb 24 percent of the revenue on international routes this year, Concil said, up from 19 percent last year.
Investors worry that the Organization of the Petroleum Exporting Countries won't be able to increase production to meet demand, even after OPEC raised production in July. OPEC is the source of more than a third of the world's oil. Increasing reports of terrorist threats also hurt airline shares.
"Rising oil prices do cause problems for airline stocks," said Andrew Milligan, chief strategist at Standard Life Investments.
Jet fuel, which is derived from crude oil, accounts for between 10 percent and 12 percent of airlines' operating costs. Airlines sometimes buy jet fuel and oil contracts months before the fuel is used, a process called hedging that protects against rising prices. Most European carriers that fly international routes are more than 50 percent hedged for the year.
Milligan said airlines had to be analyzed on a "stock-by-stock basis" because they were affected to different extents by rising oil prices, according to their hedge positions.
"Fuel is a major cost for airlines," said Adam White, a portfolio manager at First State Investments in London. "Some of the airlines are now coming into unhedged periods and that's a negative factor."
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US Airways diverts Boston-D.C. flight to pick up 24 in N.Y.
By Keith Reed, Globe Staff
US Airways passengers who left Logan Airport 20 minutes late were delayed further when their Washington-bound plane made an unscheduled stop in Albany, N.Y., to pick up President Bush's twin daughters.
Jenna and Barbara Bush were among 38 passengers stranded Saturday after an Albany-to-Washington flight was scrubbed because of maintenance problems. The presidential daughters and 22 others on the flight were rescued when the airline decided to send the plane from Boston, which was less than half full, to pick them up.
US Airways confirmed that it diverted the flight, but a spokesman said it did so under a policy designed to accommodate passengers on canceled flights when possible. The fact that the Bush twins were among the passengers in Albany had nothing to do with the decision, and airline officials may not have even known they were there, said US Airways spokesman David Castelveter.
"Our policy is to find the most efficient means of transporting those customers to other destinations," he said. He added that the airline received no complaints from passengers who were on the Boston flight.
"I have no knowledge of who knew about who was on that plane," he said. "I'm sure our customers onboard that shuttle flight would have appreciated it if they were in that situation and we came to get them."
The flight scheduled to leave Boston at 7 p.m. Saturday was delayed because some luggage had not been loaded onto the plane. Had the flight left on time, it was scheduled to land at 8:36 p.m. Instead, it got there 70 minutes late, at 9:46 p.m.
The Washington Post first reported the story yesterday.
Castelveter said the decision to divert the Boston flight was based on two factors: There were no more flights scheduled to leave Albany for Washington that night, and the Boston flight had plenty of room.
The diverted plane was an Airbus A319, which holds 126 passengers. That left 86 seats empty, with a total of 38 Washington-bound passengers stuck in Albany.
Of those, 22 opted to take the plane from Boston. The rest would have been entitled to hotel rooms or to have alternate transportation arranged by the airline, Castelveter said, although he did not know how many took advantage of that offer.
The airline said it is not unusual to send one plane to pick up passengers from another, but there are no hard and fast rules that govern under what circumstances that is done, Castelveter said. Decisions are made on a case-by-case basis, he said.
Dan Kasper, an airline analyst at LECG LLC, a Cambridge consulting firm, said it is not unprecedented for an airline to divert a flight in order to appease stranded passengers, especially if the affected flight has seats available.
It would be less costly for an airline to do that than to book flights on other airlines or arrange hotel stays, he said.
As for whether US Airways knew the Bush twins were involved, "Somebody would have known they were on the plane, but just how far up the chain that went, it's hard to say," he said.
The airline would probably know if Secret Service agents were on the flight, he said.
"You would think the Secret Service guys are going to go on armed. They're not going to check their pistols at the gate, so you would expect that the airline would know that."
A White House spokeswoman declined to comment, but confirmed the president's daughters always travel with a Secret Service detail.
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Southwest CEO will add duties; president to change responsibilities
By ERIC TORBENSON / The Dallas Morning News
Dallas-based Southwest Airlines Co. Wednesday shuffled its management structure, giving more responsibilities to its new chief executive officer, Gary Kelly.
Company president Colleen Barrett, 59, will drop the title of chief operating officer in the new setup. But she will keep control of marketing, the airline's "People" department, communications, employee relations, as well as its audit and purchasing divisions.
Ms. Barrett will also control a new labor relations group. She doesn't expect to negotiate at the table with the carriers' unions but rather will steer the company's strategy going forward.
"The realigning of responsibility gives me more opportunities to have a clear focus in areas I can contribute the best," she said.
Ms. Barrett said the changes won't diminish her role at the airline, as she'll continue to work 13-hour days, take virtually no vacation time and carefully read mountains of letters and correspondence from customers.
She described herself as "giddy" with excitement because she'll have more time for the business aspects she has the most passion for.
Mr. Kelly will oversee Jim Wimberley, executive vice president of aircraft operations, and Donna Conover, executive vice president of customer operations. Both executives previously reported to Ms. Barrett.
Southwest chairman Herb Kelleher keeps the areas he's held since giving up day-to-day oversight of the airline in summer 2001. He'll focus on industry affairs, fleet planning and guiding the strategic path of the airline, including choosing new cities for the world's largest discount airline, which expects to add a new destination next year.
One analyst thought the move suggested Ms. Barrett may be setting up for a few more years at the carrier, where she's worked since 1978.
"She's probably looking on her own timetable for retirement," said Ray Neidl, an analyst with Blaylock & Partners. "She's not being pushed out or anything like that."
The carrier is still adjusting to the sudden retirement of Jim Parker as chief executive officer in July, who cited fatigue from the position and a series of other factors. Ms. Barrett and Mr. Parker succeeded Mr. Kelleher in 2001.
Southwest's well-documented corporate culture "needs a little bit of healing" in part because of bitter contract talks with its flight attendants, Ms. Barrett said. "Overall I'm happy with our companywide culture."
The new division of duties will give her more time to get out from under paperwork and into the field, she said. "I am as excited about this as I have been for anything in 15 years," she said.
The moves Wednesday represent the first major tactical management steps for Mr. Kelly, who has energetically been touring key Southwest cities around the country to meet employees.
His focus remains on keeping the carrier's low costs in check and bringing new technology to bear on operations to boost efficiencies.
The stock price remains a sore spot, as Southwest's 33,000 employees are the largest shareholder group.
The stock closed Wednesday at $14 after trading below that level most of the day, the lowest it's been since March. For the year, shares are down 12 percent.
"People are going to realize that Southwest has turned the corner and has great growth potential," said Mr. Neidl, who has a "buy" rating on the shares.
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COLOMBO: A Frenchman was sentenced to two years in jail, suspended for 10 years and ordered to leave Sri Lanka after he pleaded guilty to sexually harassing airline crew, court officials said yesterday.
The man identified as Tongio Yves Fernand, 48, was told by the Colombo High Court on Tuesday that he should leave the island within two weeks and not return for at least two years. His two-year jail term was suspended for 10 years. Fernand, who had been free on bail, pleaded guilty to five counts, including harassing three air hostesses and a steward, aboard a Sri Lankan airlines flight from Zurich to Colombo in June last year. The man was also fined $400 (BD151). Link to external site
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Photos Of Heathrow Airport And Other Sites Found
ISLAMABAD, Pakistan (AP) Pakistan gave British authorities images of London's Heathrow Airport and other sites that were found on the computers of two al-Qaida fugitives arrested last month, intelligence officials said Thursday.
The officials, however, could not confirm reports in British newspapers that the information helped lead to the arrests of about a dozen suspected terrorists in Britain this week.
Several news reports in Britain said one of the suspects arrested late Tuesday, variously identified as Abu Eisa al-Hindi or Abu Musa al-Hindi, was believed to be a senior member of al-Qaida and had been plotting an attack on Heathrow.
Britain's Metropolitan Police refused to say whether al-Hindi was among those arrested, and Pakistani officials contacted by The Associated Press had no information about the reported link.
Maps, photographs and other details of possible targets in the United States and Britain were found on computers belonging to Ahmed Khalfan Ghailani -- a Tanzanian indicted for his role in the 1998 bombings of U.S. embassies in East Africa -- and a Pakistani computer expert identified as Mohammed Naeem Noor Khan, said two officials, who spoke on condition of anonymity.
The British reports said al-Hindi, using the code name Bilal, had been in contact with Khan.
A Lahore-based intelligence official involved in the investigation after the July 13 arrest of Khan said his computer contained photographs of Heathrow airport, as well as pictures of underpasses that run beneath several buildings in London.
He said, however, that he was unaware of any information from Khan that led directly to the arrests Tuesday of suspected terrorists in and around London.
The other Pakistani official said information from Khan and Ghailani had also been shared with the United Arab Emirates, the country through which several al-Qaida men are believed to have passed -- including two South Africans arrested on July 25 along with Ghailani. He also was not aware of a link between the information and the British arrests.
Meanwhile, Interior Minister Faisal Saleh Hayyat told reporters that a total of 20 terror suspects -- including Pakistanis and foreigners -- had been arrested in recent weeks as part of a breathtaking sweep against al-Qaida.
Fourteen people were arrested along with Ghailani on July 25, and at least six other people have been taken in since then, according to security and intelligence officials.
Hayyat said that the arrests in Britain were not based on "specific information" passed on by Pakistan.
"There is no specific information that we gave to Britain," Hayyat said. "What we do is that whenever we feel the need that certain information could be relevant or of use for our coalition partners, we do exchange information and we do share information and intelligence."
The interior minister failed to clarify his statement earlier this week that Pakistan was holding an unnamed African al-Qaida suspect who has a multimillion dollar bounty on his head.
He said that two as yet unnamed al-Qaida suspects have been arrested in eastern Punjab, but that neither was on the FBI's most wanted list or carried a bounty. A third person, who Hayyat continued to refuse to identify, is also in custody and carries a bounty, he said.
"There are two other people, who were arrested from different locations in Punjab, who do not have any bounties to the best of our knowledge," Hayyat said. "There is another person who was also arrested sometime back who has a bounty of several million dollars on his head."
British police arrested 13 men, ages 19 to 32, in raids Tuesday in London, the nearby towns of Watford and Luton, and in Blackburn in northwest England, "on suspicion of being concerned in the commission, preparation or instigation of acts of terrorism." One was subsequently released.
Authorities in Britain have released few details of what they were believed to have been up to.
The news follows reports that two South Africans captured along with Ghailani were plotting attacks in their home country.
Raja Munawar Hussain, the police chief in the eastern Pakistani city of Gujrat, told AP that authorities found several maps of South African cities among the items seized after the raid.
South African newspapers quoted unidentified police sources there as saying that key landmarks in Johannesburg, Cape Town and Pretoria were among the likely targets, though those reports were strongly denied by South African officials.
The South African suspects were identified as Feroz Ibrahim and Zubair Ismail.
"They had some terror plans for South Africa," Hussain said. They are believed to have arrived in Pakistan on a flight from the United Arab Emirates just days before their arrest.
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NEW YORK - Doers and doings in business, entertainment and technology:
Donald J. Carty
Could Donald J. Carty be weaving his way back into the cockpit? Company documents reveal that the ousted chief executive of American Airlines (nyse: AMR - news - people ) has not only purchased $2 million worth of stock in Hawaiian Holdings, the parent company of bankrupt Hawaiian Airlines, but that he has also landed a seat on the holding company's board of directors. Because the faltering airline is currently controlled by a bankruptcy trustee, Hawaiian Holdings has no direct involvement in its operations, but it is one of several groups bidding to lead it out of bankruptcy. And should the holding company win the chance to nurse the airline back to health, Carty would be well positioned to inherit the role of chairman. In fact, the position was earmarked for him in March by John Adams, the head of the holding coruntil 1973. He said thousands of tmpany. But Adams has since sold his stake in the business, casting some doubt on Carty's ability to inherit the post. But don't count Carty out just yet: it would seem he might have decided to take the matter in his own hands.
ANCHORAGE, Alaska (Reuters) - Federal authorities said on Wednesday they were searching for a telephone caller who forced a Korean Air Co. passenger jet to make an unscheduled layover in Alaska by claiming a bomb was on board.
The bomb threat, received in New York, caused the jet with about 350 people on board to land in Anchorage, Alaska, early on Tuesday morning, said Bob Burnham, assistant special agent in charge of the local Federal Bureau of Investigation office.
The Boeing 747 jumbo jet had been flying from Seoul to New York, and was grounded for six hours while law-enforcement officials and bomb-sniffing dogs searched passengers, cargo and the aircraft, Burnham said.
No explosives were found, so the plane was allowed to continue on its flight, Burnham said.
"We assume that it was a hoax," he said.
The call that spurred the stopover included few details, he said. "(It) just stated that there was a woman on board with a bomb, and that was as specific as it got," he said.
Federal officials in New York have taken over the investigation, he said.
The person who phoned in the threat could be charged with interference with a flight crew or with making a terrorist threat, Burnham said. Both charges could result in prison time or fines, he said.
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AN Adelaide-bound Qantas airliner returned to Melbourne Airport this morning after reports of an odour at the back of the aircraft.
A Qantas spokesman said the pilot decided to turn back shortly after taking off from Melbourne Airport at 7.10am.
"Very soon after take-off there were reports of an odour in the rear of the aircraft," he siad.
"The pilot made a decision to return to Melbourne Airport and the aircraft landed without incident."
Passengers were transferred to another plane and left Melbourne shortly after 9.30am.
Qantas is investigating the cause of the odour.
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An air stewardess fell 15 feet from an aircraft door as it prepared to take off with 183 passengers on board.
Danielle Henry, 21, was badly hurt when she landed on the concrete apron at Corfu airport. She was given first aid by aircrew of the Thomas Cook Airlines Boeing 757 before being taken to Corfu General Hospital with a broken arm and ankle as well as other injuries.
Miss Henry was brought back to her home city of Newcastle upon Tyne yesterday by air ambulance and taken to Newcastle General Hospital.
The aircraft had been cleared for departure and the doors were being closed and secured when the incident happened on Tuesday afternoon. An inquiry has been launched into the incident by the airline and Greek authorities.
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Wed Aug 4, 2004 11:36 AM ET
(Adds U.S. controller comment)
LONDON, Aug 4 (Reuters) - Market rumours that a commercial aircraft flying from London to either Washington or New York had gone missing are untrue, British and U.S. air traffic controllers said on Wednesday.
"There are no reports of any aircraft in difficulties. As far as we know, everything is normal," a spokesman for Britain's National Air Traffic Services told Reuters.
"We've checked with everyone, including our Canadian and European couterparts, and no one has heard anything," said the U.S. Federal Aviation Administration's Glenn Godfrey, operations manager at the FAA's air traffic command center near Washington D.C.
The rumour swept through equity and money markets, becoming a talking point, but prices were largely unaffected.
British Airways (BAY.L: Quote, Profile, Research) , whose shares were down around two percent on the day, said it had checked its flights and everything was normal. (Additional reporting by Mark Egan in New York)
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LONDON : Police in Britain are holding a senior Al-Qaeda operative who was allegedly planning an attack on London's main Heathrow airport, major British newspapers reported.
In a front-page report, The Times said the man was arrested after a tip-off from Pakistani intelligence, which claimed that he was getting orders direct from Osama bin Laden "as head of Al-Qaeda operations in Britain".
It quoted Pakistani officals as saying that details about Heathrow -- the world's busiest international airport -- were found in the computer of an Al-Qaeda member arrested last month in Pakistan whose job it was to send coded messages to Al-Qaeda agents worldwide.
The Daily Telegraph, in a broadly similar front-page report, said the suspect used the alias Abu Eisa Al Hindi.
"He was planning some sort of attack in Britain and his capture is a good signal that intelligence obtained from Al-Qaeda operatives here (in Pakistan) is producing results," it quoted a Pakistani official as saying.
It added that police would not say whether the man was among the 12 terrorism suspects who were being held for a second night Wednesday following their arrest in "intelligence-led" raids in London and other parts of England.
A 13th man seized during Tuesday's raids was released Wednesday. All of the men were reportedly of south Asian origin, with at least some of them British citizens.
London's Metropolitan Police, which spearheaded Tuesday's operation, refused to comment on Thursday's press reports. "We aren't being drawn on any of this speculation," a spokesman told AFP.
The Guardian said British security sources were playing down any claims that they had foiled an imminent bomb plot, nor linking it to seizure of computer files in Pakistan which suggested a threat to US financial institutions.
But it quoted British government officials as saying that Tuesday's operation was "not insignificant".
The Sun newspaper, however, said the raids were prompted by detailed information about Heathrow pulled from the computer of Mohammed Naeem Noor Khan, a suspected Al-Qaeda agent nabbed in Pakistan in July after a gunfight.
According to The Times, Khan had visited Britain at least six times in recent years, and had disclosed after his arrest that the chief of Al-Qaeda operations in Britain went by the code name "Bilal".
"Officials insist that Mr Khan was in 'direct contact' with Bilal over the Heathrow mission," the newspaper wrote. "But only Bilal knew the identities of others in the UK who would be used in the Heathrow operation."
It said its Pakistani intelligence source would not divulge details of any timetable for a Heathrow attack, or say whether the perpetrators intended to fire missiles at an airliner or stike a terminal with a truck bomb.
Heathrow was ringed by troops and police last February in what security experts at the time said appeared to be a major security operation to prevent missiles being shot at a departing airliner.
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TAMPA - Tampa International Airport travelers will be among the first in the nation to test new explosive-detection technology designed to keep bombs off airplanes.
Transportation Security Administration officials are testing the $150,000 EntryScan3 machine for 30 days to see if it is sturdy enough to deal with the rigors of airport use. They also want to see how it performs in various climates.
Tampa is part of a test group that includes airports in Providence, R.I., Rochester, N.Y., and San Diego. The Gulfport, Miss., airport will start testing in the coming weeks.
``We want to help restore the confidence of the traveling public,'' TIA Executive Director Louis Miller said.
Air travelers will step into the phone booth-sized machine and get a quick blast of air to dislodge particles that are tested for any trace of explosives. The process can take 15 seconds per person, but airport officials say it could save travelers the headache of more thorough, random checks.
General Electric Infrastructure Security, which created the technology, has about 10,000 of the machines around the world.
Airports have explored new security technology since the Sept. 11 attacks. Explosives have not been a major problem on airliners, but officials remain concerned.
``We have to be a step ahead of the terrorists,'' said Dario Compain, the federal transportation agency's director in Tampa.
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WASHINGTON, Aug 4 (Reuters) - U.S. aviation regulators threatened on Wednesday to again cap commercial flights at Chicago's O'Hare airport to reduce delays that are slowing down the rest of the nation's aviation system.
"We are going to do something about this problem right here and now," Transportation Secretary Norman Mineta told airline executives before an unprecedented meeting with them aimed at achieving a third and broader round of schedule concessions.
"We are going to get schedules in line with present capacity at O'Hare," Mineta told officials from UAL Corp.'s (OTC BB:UALAQ.OB - News) United Airlines, AMR Corp.'s (NYSE:AMR - News) American Airlines, Delta Air Lines Inc. (NYSE:DAL - News) and a dozen other passenger and cargo carriers.
Both Mineta and Federal Aviation Administration Administrator Marion Blakey said the government was prepared to take the unusual step of limiting the number of flights during the busiest times of the day if the situation could not be resolved voluntarily.
"If we need to, we'll issue an order," Blakey said.
The Transportation Department said late Wednesday that day-long talks with the airlines had made progress but there was no resolution. "Unfortunately, we still do not have the kind of voluntary agreement that will truly ease delays at O'Hare," Mineta said in a statement.
More discussions were planned on Thursday.
O'Hare is the world's busiest airport as measured by the number of flights per day. On an average weekday, the airport handles nearly 3,000 arrivals and departures.
The FAA, which oversees air traffic control, has been severely criticized in the past for flight delays but had little or no recourse to challenge carriers on over-scheduling. But Congress gave the agency new powers last year to facilitate change and O'Hare is the first test of that authority.
O'Hare is the nation's prime connecting hub and a major center for international travel. Delays at O'Hare, many of which are caused by bad weather, regularly ripple through the U.S. aviation system.
With travel returning to pre-Sept. 11, 2001, levels, airline on-time arrival rates are plummeting in Chicago. Delays are on a record pace, with 59,000 recorded through the first six months of this year. A flight is considered delayed when it is at least 15 minutes late.
Over the past 10 months, more than 32 percent of flights arriving at O'Hare were delayed with a third of those more than an hour behind schedule. Bankrupt United says every minute of delay per flight costs it $30.
There are between 78 and 101 arrivals per hour at O'Hare, but the government wants to get that down to under 90, with a limit of 22 during any 15-minute stretch between 7 a.m. and 9 p.m. local time, the FAA said.
Previous government controls on arrivals and departures at O'Hare were lifted in 2002. The FAA regulates some or all flight operations at Washington's Reagan National airport, and John F. Kennedy and LaGuardia airports in New York.
No. 1 U.S. airline American and No. 2 United account for more than 80 percent of O'Hare's traffic and have already cut their peak-hour flight schedules this year by a combined 7.5 percent. But other carriers, like Continental Airlines Inc. (NYSE:CAL - News) and FLYi Inc.'s (NasdaqNM:FLYI - News) fledgling Independence Air, have added service while rivals were reducing flights.
American and United insist competitors cut their schedules, too. "Whatever comes out in the short-term has to be equitable and enforceable," said American spokeswoman Mary Frances Fagan.
Upstart Independence Air, which is taking aim at United with 12 flights per day to O'Hare from Dulles airport outside Washington, suggests the biggest airlines are bristling at discount competition. "We're bringing in low fares and there has been considerable push back from the legacy carriers about that," said Independence spokesman Rick DeLisi.
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(AP) It's a common traveler's lament: A flight is delayed for no apparent reason. But this summer, such delays are part of the Federal Aviation Administration's official playbook.
A new government program, known as "Growth Without Gridlock," aims to cut down on insufferable hours-long delays by spreading the delays out among many more flights nationwide. If, say, Chicago-O'Hare is hit by stormy weather or congestion, flights in up to a dozen or so cities elsewhere around the country are delayed briefly to give Chicago a chance to recover. The result is that more airports nationwide are hit with slowdowns, even if there's not a cloud in the sky -- something not done before.
The strategy is having mixed results. The FAA, which started the program this spring, does seem to be avoiding brutal five-hour delays. But the average length of delay hasn't been shortened at all. In May, the most recent month reported, the average length of delay was also almost identical to that in May 2000 -- the last time airports were as busy as they are today. Late flights this May arrived an average of 57.7 minutes past scheduled arrival time, according to the Bureau of Transportation Statistics. In May 2000 -- a month that marked the start of a horrendous summer for travel -- the average delay was a hair shorter, 57.3 minutes.
May was a good month to put the new strategy to the test. That month, numerous thunderstorms plagued airlines, particularly in the Chicago-New York-Atlanta triangle, where half of the nation's air traffic passes. The total number of delayed flights rose a remarkable 65 percent, to 133,039 from 80,601 in May 2003. That number (reflecting the U.S. Department of Transportation's definition of flights arriving more than 14 minutes past scheduled time) was even higher than in May 2000.
The FAA says it's handling more planes this summer than in 2000 and weather has been worse, so more delays are to be expected. While delays were up 8 percent in May compared with 2000, there weren't the extreme delays of many hours that prompted so much passenger backlash in 2000. (It got so bad that Congress began considering a "passenger's bill of rights.") Internal studies of days with similar traffic patterns and similar volumes show that delays are shorter than in 2000, the FAA said.
"The goal is to balance and equalize," says Russ Chew, chief operating officer of the FAA's Air Traffic Organization. By spreading delays around more and using more of the cushion airlines build into schedules, air-traffic controllers can "get rid of the really oppressive delays."
It works like this: Any time the wait for takeoff hits 90 minutes at a U.S. airport, the FAA slows down departures from other airports so that the clogged airport can launch more jets.
In addition, express lanes are set up for delayed flights. Once a thunderstorm passes by an airport, for example, arrivals from the west might be shut down so that twice as many planes can take off to clear the traffic jam on the ground. Storms in one part of the country might delay your flight even though it's sunny where you are, where you are going, and even in-between.
For consumers, it's possible to minimize chances of hitting some of the delays. Fly early in the day, if possible, since airline delays build and summer storms often come in the afternoon. If possible, avoid connections in congested hubs. At Chicago's O'Hare, only half the flights arrived on-time in May.
Some airlines say the new system has improved flying -- for them. AMR Corp.'s American Airlines and UAL Corp.'s United Airlines often squawked because O'Hare flights were slowed but Chicago Midway flights were not. But now they see other airlines suffering along with them. "It's working reasonably well," says Robert Reding, American's senior vice president of technical operations.
Continental Airlines used to complain that when storms reduced the number of jet highways in the sky in the Ohio Valley, its planes in Newark, N.J., couldn't get into the traffic flow. Now, a flight in Boston might be delayed to create space for a Newark departure. "Like any new program, it's had its glitches. But it's 1,000 times better than it was," says Jay Salter of Continental.
But carriers that avoid the most troubled airports aren't as thrilled and would like some changes in the program. Northwest Airlines, with hubs in Minneapolis and Detroit, now finds its flights slowed because of all the congestion at Chicago O'Hare. Northwest says it's unfair for it to be punished because of problems at distant airports "that are congested, overscheduled and lack adequate runway capacity," according to a statement issued by the airline.
Southwest Airlines says it has seen some problems and some benefits from the sharing of delays, and it has been talking to the FAA about changes. "It's encouraging that they are trying to find new methods," says Steve Hozdulick, director of flight dispatch for Southwest. "But it's going to take time to perfect."
One problem has been that the FAA has ordered ground delays for flights, giving crews tentative takeoff times, then shifted gears and imposed complete ground stops, Mr. Hozdulick said. That's frustrating to both airlines and customers, who may feel misled.
"We have seen times when delay didn't seem appropriate," said Mr. Hozdulick. "The jury is still out on the shared delay program."
Mr. Chew, a former American executive and airline pilot, has reorganized the FAA's air-traffic organization. The changes in how traffic is handled this year grew out of a three-day meeting in March with all FAA "customers" -- airlines, business-jet organizations, etc. One push the FAA has made is bringing business jets into its operational planning to make the system that much more equitable.
Passing delays plane-to-plane doesn't address the ultimate problem -- the U.S. needs more capacity, both at airports and in the sky. On the ground, that means pouring more concrete. In the air, it means the FAA needs better tools to handle air-traffic problems.
The Growth Without Gridlock program is a start. But as Mr. Chew says: "I don't want anyone to think there's a panacea here."
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NEW YORK (AP) -- The New York City Health Department is investigating a measles case that could have infected others on a plane ride from Hong Kong. Officials say a 2-year-old girl on Cathay Pacific Flight 830 on July 30 had measles.
The city health department and the U.S. Centers for Disease Control are working to notify the passengers on the flight.
The child arrived in New York City on July 30. The measles infection was confirmed the following day, though she may have been contagious as early as July 27. The child, who had not been previously vaccinated, is currently hospitalized and is in stable condition.
Health Commissioner Thomas Frieden says people on the flight who have not been vaccinated for measles should be aware of symptoms. He says measles symptoms include fever, cough, runny nose, red, watery eyes, and a rash.
People are immune to measles if they have received adequate vaccinations or if they have had measles in the past.
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Officials say move won't add to inconvenience
Additional security screenings. Random vehicle inspections. More uniformed and undercover law enforcement personnel. Bomb-sniffing dogs. Get used to all of it, because it's probably going to be in place at Salt Lake City International Airport through early next year.
Citing a need to address the terror threat looming over the run-up to Election Day, the Transportation Security Administration (TSA) is ratcheting up its anti-terrorism measures at the nation's airports - an effort that probably will extend through the holiday season and presidential inauguration in late January.
Earl Morris, TSA director for Salt Lake City International Airport, calls the decision to bolster airport security more of an "enhancement" than upgrading the threat response to Level Orange - as was done earlier this week at key financial institutions on the East Coast. The security increase also is at least partially voluntary; not every airport will implement all aspects of the upgrade.
But Morris says Salt Lake City International is participating fully - and travelers will notice a difference.
"It is enhanced, and it is specific in terms of the different things we do," Morris said Tuesday. "You're going to see more of a law enforcement presence [at the airport], and there will be an increase in nonuniformed personnel handling the covert aspects of security. We're going to continue to be vigilant, both at the main terminals and the general aviation areas."
TSA and airport officials say passengers won't be significantly inconvenienced by the security moves.
"Most of the changes implemented will be seamless to the users," said Salt Lake City International spokeswoman Barbara Gann. "We don't anticipate that they will cause delays.
At the same time, Morris says those going to the airport should be aware that they may face some additional scrutiny from TSA personnel. Among the possibilities:
l Secondary screenings, like those employed in the aftermath of 9-11 - meaning that passengers could be required to submit to additional searches after passing through the initial security checkpoints.
l Random vehicle inspections, with searches conducted both before cars enter the arrival/departure areas and in the parking garage.
l Aggressive enforcement of curbside restrictions. Morris says lingerers will be asked to leave, then cited or even have their vehicles impounded.
Explosive-sniffing dogs also will be deployed on a random basis, creating what Morris calls an overall environment of heightened awareness.
"Salt Lake City International is one of the top 25 airports in the nation," he said. "We're going to do everything we can to ensure that it is as safe an airport as it can be."
Morris dismisses any notions that the latest security upgrades, occurring with the presidential election just three months away, are somehow politically motivated. The local TSA director says his agency is acting on real-time events and intelligence in making its security level decisions.
"We're doing this for all the right reasons," he said. "To say this is political is really naive on the part of the people making those statements."
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By Associated Press
FORT WORTH, Texas (AP) _ The former chief executive of American Airlines has bought two (m) million dollars worth of stock in the parent of bankrupt Hawaiian Airlines.
Hawaiian Holdings says Donald Carty has also been named to the company's board of directors.
The moves could signal Carty's return to the airline industry.
Hawaiian Holdings is one of several groups bidding to lead Hawaiian Airlines out of bankruptcy.
The airline is controlled by a bankruptcy trustee, Joshua Gotbaum, and Hawaiian Holdings has no direct involvement in its operations.
Carty resigned from American Airlines under pressure in April of 2003. In the midst of negotiating steep wage cuts from employees, it came out that American's top executives had been given bonuses and pension perquisites.
WASHINGTON - A government safety watchdog group criticized the Federal Aviation Administration on Tuesday for backing away from a pledge to require infants and toddlers to be safely secured while flying on airliners.
The National Transportation Safety Board said the FAA's apparent policy shift on "lap babies" was unacceptable.
FAA officials said that instead of requiring special restraints for babies, the agency is focusing on a coming campaign to better educate parents about the dangers of traveling on planes with children age 2 and younger on their laps.
The safety board voted unanimously to retain its recommendation for the FAA to require child restraints on the NTSB's most-wanted list of aviation safety improvements.
Separate airline seats are required for passengers who are at least 2 years old.
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PHOENIX Hot temperatures and a hot tempered passenger are being blamed for ten people becoming ill on an America West Express flight from Phoenix to San Antonio, that never left the ground.
The air conditioning went out on the aircraft making for some heated moments aboard the flight.
A Mesa Air spokeswoman says the aircraft started to push back from a Sky Harbor gate when an irate passenger became unruly.
The captain decided to return to the gate and contacted security.
It took about 15 minutes for security to reach the aircraft.
During that time, Mesa air says ten passengers became ill.
Eighty-four passengers were on flight 6162, ten were treated for heat exhaustion, and two were hospitalized.
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An Iraqi man pleaded not guilty Tuesday in St. Paul to federal charges of giving false information after he was arrested July 7 at Minneapolis-St. Paul International Airport after getting off a flight from Amsterdam.
Ali Mohammed Abboud Almosaleh was ordered to remain in custody by U.S. Magistrate Judge Arthur Boylan pending a Friday detention hearing in St. Paul.
Boylan also appointed a federal public defender to represent the 40-year-old Almosaleh. The slight, balding defendant made his brief court appearance Tuesday in St. Paul wearing an open collar shirt and slacks without a belt. He used an interpreter to communicate in court.
He is accused of lying to airport customs officers July 7 by saying that he had been out of the country for one month while visiting Syria when in fact he was gone for five months and had visited Iraq.
He also told officers that digital video discs he was carrying just contained music. They contained images of militant Iraqi Iman Muqtada Al-Sadr and his militia, accompanied by calls for resistance against the United States, according to court documents.
A law enforcement official has said that Almosaleh was carrying a note that hinted at public suicide. Authorities are trying to determine whether Almosaleh's activities might be terrorism-related.
Almosaleh also faces charges that he violated immigration laws by misrepresenting information when he applied for a permit to come to the United States and not having valid documents to come into the country.
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WASHINGTON (Reuters) — Aviation regulators are rolling back the deadline for a key safety rule and are considering a significant extension for another that would save airlines, particularly carriers with older fleets, an estimated $200 million, officials said Monday.
The Federal Aviation Administration said the changes would not affect aircraft safety but would give the cash-strapped airline industry, which supports the changes, breathing room to better coordinate its maintenance and inspection schedules.
In a regulatory filing, the FAA said it will permit carriers four additional years, until 2008, to develop programs for inspecting and conducting stepped up maintenance on fuel tank systems.
"The FAA recognizes that operators will have difficulty meeting their obligations before the Dec. 6, 2004, compliance date," according to the regulatory notice signed by FAA Administrator Marion Blakey.
The agency said the unprecedented regulation, issued in 2001, was not specific enough. Regulators also said there was confusion about how to integrate airline maintenance schedules with the new inspection standards.
The rule stemmed from the mid-air destruction of TWA Flight 800 in 1996 off New York that killed 230 passengers and crew and other explosions and fires on the ground that were blamed on fuel tank problems.
Regulators also are considering important changes to a proposed regulation that was widely publicized in 2002 for closer structural inspections of aging jetliners and other commercial planes that seat 30 or more people.
The FAA may extend the compliance deadline from 2007 to 2010 for airlines to formulate more streamlined inspection and maintenance schedules for structural problems on aircraft 14 years and older.
Extending the deadline to inspect planes for fuel tank problems and age-related cracks, in the near term, relieves airlines of additional maintenance requirements that take jets out of service and cost them money.
Other plans under consideration by the FAA to redraw proposals on inspections for aircraft corrosion, wiring and hydraulics problems will save air carriers even more money. The FAA estimates the extended fuel tank deadline and its other proposed changes will save airlines $200 million.
The FAA is satisfied for now that current safety requirements for fuel tank and structural inspections and maintenance are adequate for now.
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SAN FRANCISCO (AP) - A Virgin Atlantic flight from San Francisco to London was grounded Monday after an unruly passenger was removed from the plane.
The unidentified passenger was drunk and started a disturbance on the plane before it was scheduled to leave San Francisco International Airport at 4:30 p.m. for Heathrow Airport in London.
Shortly after that person was removed, passengers told the San Francisco Chronicle that five people with Romanian passports were brought to the front of the plane and removed.
Passenger Joe Snyder of Carmel Valley told the Chronicle that the flight captain announced, "There are some people on the plane that we do not feel comfortable flying with."
The rest of the passengers were then taken off the plane and the flight was canceled.
Authorities then boarded the plane and searched under seats and all over the 747 plane. Sgt. Larry Ratti, a spokesman for the San Francisco Police Department, said one disorderly passenger had been detained but not arrested.
"My information from the officers that boarded the plane is that there was just one unruly passenger," Ratti said. "It was enough that for the safety of all the passengers we decided to search the entire plane. It's a big plane. You want to search it thoroughly, and it takes a while to search something like that."
Ratti said officers did not find anything suspicious onboard the flight.
The other passengers were offered free hotel stays Monday night and the flight is now scheduled to take off Tuesday.
Security is on heightened alert after the Department of Homeland Security announced Sunday that five East Coast financial institutions were targets of a terrorist plot.
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LONDON (Reuters) - Shares in European airlines have taken a beating as oil prices at record highs above $44 a barrel spell earnings worries for the beleaguered sector, already fighting cut-throat competition and deep cost cuts.
Air France AIRF.PA was the sector's top loser on Wednesday, falling 3.7 percent to 12.2 euros, while British Airways BAY.L lost 2.8 percent to 222.6 pence and Spain's Iberia IBLA.MC shed 2.4 percent to 2.0 euros. Scandinavian airline SAS SAS.ST weakened 1.9 percent to 52.2 Swedish crowns.
Airline stocks were among the big losers in a weak broader market in Europe where the FTSE Eurotop 300 index .FTEU3 of pan-European blue chips was off 1.0 percent.
Oil prices surged to a fresh peak at $44.28 a barrel on Wednesday, the highest since crude oil futures were launched on the New York Mercantile Exchange.
Jet fuel is the second-biggest cost for airlines after labour and accounts for 10-20 percent of operating expenses. However, this will rise further if the price of crude hits $50 a barrel, which some analysts predict.
"All network airlines are having a weak day on the further increase in fuel prices and at the moment, the sector has a perfect negative corelation" with stocks falling as fuel prices rise, said Chris Avery, analyst at JP Morgan.
"The market is not differentiating between different hedge positions of carriers."
Shares in Germany's Deutsche Lufthansa AG LHAG.DE declined 2.7 percent to 9.5 euros and were trading close to a 14-month low of 9.38 euros hit on Monday.
The latest boost in oil was triggered on Tuesday when the head of the OPEC producers' cartel said there was no spare oil immediately available to cool red-hot prices, which have risen by more than a third this year.
European airlines are scrambling to review fuel hedging policies as the surprise hike in prices forces carriers to lock in contracts at record highs or gamble on crude retreating.
"If oil prices stay at current levels, it means some airlines will struggle to keep earnings moving upwards," said Mike Powell, aviation analyst at Dresdner Kleinwort Wasserstein.
"Oil is the biggest piece of bad news."
Low-cost carrier easyJet EZJ.L shed 1.2 percent to 142.0 pence.
Its rival Ryanair RYA.I RYA.L , Europe's largest low-cost airline, managed light gains of around 0.5 percent, supported by figures which showed July passenger traffic was up 22 percent from a year ago.
Shares in Ryanair, which has been cutting ticket prices to fill seats amid cut-throat competition, had weakened on Tuesday on fears about exposure to high oil prices, despite beating estimates with higher first-quarter earnings.
The Irish-based airline said it was only hedged against oil price rises till October.
An Iraqi man pleaded not guilty Tuesday in St. Paul to federal charges of giving false information after he was arrested July 7 at Minneapolis-St. Paul International Airport after getting off a flight from Amsterdam.
Ali Mohammed Abboud Almosaleh was ordered to remain in custody by U.S. Magistrate Judge Arthur Boylan pending a Friday detention hearing in St. Paul.
Boylan also appointed a federal public defender to represent the 40-year-old Almosaleh. The slight, balding defendant made his brief court appearance Tuesday in St. Paul wearing an open collar shirt and slacks without a belt. He used an interpreter to communicate in court.
He is accused of lying to airport customs officers July 7 by saying that he had been out of the country for one month while visiting Syria when in fact he was gone for five months and had visited Iraq.
He also told officers that digital video discs he was carrying just contained music. They contained images of militant Iraqi Iman Muqtada Al-Sadr and his militia, accompanied by calls for resistance against the United States, according to court documents.
A law enforcement official has said that Almosaleh was carrying a note that hinted at public suicide. Authorities are trying to determine whether Almosaleh's activities might be terrorism-related.
Almosaleh also faces charges that he violated immigration laws by misrepresenting information when he applied for a permit to come to the United States and not having valid documents to come into the country.
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By Karen Attwood, PA News
Ground staff axed from low-cost airline Buzz following its takeover by Ryanair have won “considerable compensation”, a union announced today.
One hundred and forty baggage handlers and other ground service workers at Stansted Airport in Essex were sacked after Dutch airline KLM sold Buzz to the Irish carrier last April.
Following the move the GMB took Ryanair and KLM to an employment tribunal over what it called the “unnecessary sackings” of its members.
All cases have now been settled out of court, the GMB said today.
Ed Blisset, senior organiser at the GMB, said the union had got justice for the workers.
“However, this satisfactory compensation package is cold comfort for our members who were sacked,” he said.
“Ryanair’s unnecessary sackings paint an accurate picture of a callous and malevolent employer who doesn’t give a damn for anyone or anything apart from making a profit.
“The GMB will distribute the considerable compensation to our members.”
One of the sacked workers, who did not wish to be named, indicated that the payout was equivalent to three weeks’ wages for each person.
By JULIA PRESTON A federal judge has ordered the Occupational Safety and Health Administration to disclose for the first time the company names and the worker injury and illness rates of the American workplaces with the worst safety records.
The ruling, issued Friday but released yesterday, came in response to a Freedom of Information Act request filed in October 2002 by The New York Times. The Times asked the agency, known as OSHA, to release the injury rates for 13,000 sites it had identified as having unusually high numbers of worker injuries and illnesses.
Up to now, the agency has published the names of the sites with worker injuries above an established norm, but not the injury rates for specific sites or any ranking to identify the worst offenders. In practice, it was difficult for reporters or the public to know where it was riskiest to work and whether the agency was effective in bringing about improvements.
The agency argued that releasing the injury rates would involve disclosing confidential commercial information. The agency said that based on the injury figures, which were expressed in terms of lost work days, competing companies could calculate how many hours employees worked, a figure companies have long considered confidential.
OSHA said that before releasing the injury figures, it would have to get clearances from all 13,000 workplaces, which would be too burdensome. In court papers, the agency said The Times was demanding that it "squander its limited time and resources in gathering information for its reporters."
The judge, Shira A. Scheindlin of United States District Court for the Southern District, in Manhattan, said the agency's arguments were "misplaced" and "illogical." Judge Scheindlin noted that since February 2003, the agency had required companies to post at work sites the number of hours employees worked, so that information was no longer confidential. She also pointed out that after an earlier, more limited request by The Detroit Free Press for injury data from the auto industry, most carmakers did not object to the release of the figures.
David E. McCraw, a lawyer for The Times, said the ruling forces the agency to "reveal information that we think should be public: what workplaces are America's most dangerous." The ruling applies only to injury figures for 2002.
Ed Frank, a spokesman for the Labor Department, which includes OSHA, said, "We are reviewing the decision and options to determine what approach best advances the department's mission to protect workers."
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A computer crash that grounded American Airlines flights across the country yesterday morning for two hours delayed more than a dozen flights at Logan International Airport, officials said.
``It affected 15 or more flights, but they were back online somewhere around 9 o'clock,'' said Logan spokesman Phil Orlandella.
The computer operating system for the airline's flight plans went down because of a technical glitch about 7 a.m. local time, an American spokesman told The Associated Press. The glitch, which affected about 150 American flights in total, also affected US Airways flights - about 100 total - because the airlines use the same database.
U.S. airspace and airports are more crowded and delays are increasing, the U.S. Department of Transportation says, as an economic recovery prompts airlines to add flights at the fastest rate since 2000.
About 22 percent of U.S. flights arrived at least 15 minutes late in May, compared with 15 percent in the previous year's month, according to the most recent department figures.
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By David Jonas
AUGUST 02, 2004 -- Airline traffic in the domestic system has rebounded significantly this year from the depressed levels of spring 2003. Though passenger numbers at most U.S. airports have not yet reached peak levels observed in the gridlocked summer of 2000, the increase in systemwide traffic already is impacting business travelers, their managers, airport operators and the airlines.
The federal government now is enacting measures on the ground and in the skies to ease air traffic congestion and, thanks to new technologies that streamline airport processes, passenger wait times at checkin counters are not nightmarishly long, as they had been in 2000. Though lines at security checkpoints have been lengthy at certain airports during peak times—prohibitively long, in isolated cases—some industry observers said general concerns about passenger inconveniences have been exaggerated.
That does not mean travelers have not been faced with frustrations this summer at the nation's airports, or that such frustrations will fade with the arrival of autumn. Increasing traffic means more crowded planes, less likelihood of travelers arriving to their destinations on schedule and a greater likelihood of having baggage mishandled. It also could mean more difficulty in redeeming reward tickets and upgrades obtained through frequent flyer or airline business programs.
In the first half of 2004, major U.S. airlines increased traffic levels between 7 percent and 14 percent from 2003. "Traffic increases, of course, are a good thing for the airlines," said Robert Mann of R.W. Mann & Co., an airline industry consulting firm in Port Washington, N.Y. "There always will be a ton of demand at the right price."
The right price apparently is being set by the likes of AirTran, JetBlue and Southwest, which further lowered many of their fares and have been matched by most competitors on most routes (BTN, July 19). Though travelers may experience difficulty in booking that lower-price seat on their flight of choice, airlines are adding capacity nearly as quickly as traffic is rising. Nevertheless, airline load factors are running higher than last year, and in some cases at record levels, so limited availability on certain flights should be expected.
Meanwhile, the International Air Transport Association said May 2004 traffic grew 38 percent across all international routes and just shy of 20 percent for the first five months of the year. IATA's comparison to the equivalent five months in 2000 showed an 8.8 percent increase in passenger traffic. "Traffic growth for the first five months of 2004 is testimony to the resilience of air transport," said IATA CEO and director general Giovanni Bisignani. "Not only have we fully recovered from the impact of SARS and war in Iraq, all major regions of the world are reporting traffic levels above those of 2000—the last normal year for our industry."
In general, an increase in passenger traffic can present problems for travelers attempting to redeem a frequent flyer reward ticket or attain an upgrade. Upgrades, in particular, have become scarce as airlines reduce premium cabin seating and fill elite frequent flyer program levels with more travelers (BTN, June 7). Difficulty with redemption availability, however, may be overstated, according to Randy Petersen, editor of Inside Flyer magazine.
"A greater number of people are willing to pay more miles," he said. "We are finding that, other than business class, coach reward tickets generally are available, even in top city pairs. The firestorm around reward redemption is more emotional than anything else."
The situation at the nation's airports—though occasionally horrendous—also is not nearly as bad as it was in the summer of 2000, when an overburdened system left tens of thousands of travelers heavily delayed.
For starters, many more travelers now opt to use electronic tickets. With paperless nearly ubiquitous in the domestic market, travelers can check in online before leaving for the airport or make use of one of a rapidly growing number of self-service kiosks deployed by carriers at airports.
Meanwhile, queues at security checkpoints have moderated and, in most cases, subsided, at least for domestic flights. Though it still is not too difficult to compile horror stories from travelers, they appear to be exceptions rather than the rule.
"We have not seen any indications that one-hour security delays have returned," Petersen said. "The reaction has been overblown and [the Transportation Security Administration] has done an extraordinary job that it probably won't get credit for."
Beyond security checkpoints, however, things get dicey, at least from an operational perspective. With load factors running at or above record levels, involuntary denied boardings are on the rise. The industry total for the January-March 2004 time period was 1.07 per 10,000 passengers, up from 0.90 during the comparable time last year, according to the U.S. Department of Transportation. Alaska, Delta and Southwest bumped the most passengers, as a percentage of their totals.
High load factors also mean more crowded planes, forcing more business travelers into completely filled rows or, worse, the dreaded middle seat.
For many travelers, getting onboard and settling in doesn't mean victory. On the contrary, recent DOT numbers showed an across-the-board surge in late arrivals. Indeed, more crowded skies have translated into more delays and deteriorating on-time performance for nearly every major carrier and most of the nation's busiest airports.
United Airlines seems to typify the concurrent trends of increased traffic levels and worsening on-time performance. It reported first-half traffic growth of 13.4 percent—the largest of any major carrier—and said its June load factor of 86 percent was the highest monthly figure it ever has recorded. On-time performance in May, however, was 10.8 percentage points below April and 11.1 points below last May, in both cases marking the industry's steepest declines. Continental Airlines' on-time performance in May also nearly was 11 points below last year. Its first-half traffic increase was 12.9 percent, trailing only United among major carriers.
The industry as a whole had an on-time performance in May of 77.6 percent, down more than five points from April and more than seven points from last year. Severe weather was a factor in May, but the Bureau of Transportation Statistics reported an aggregate increase in delays for the first five months of the year. Late departures grew more than 3 percent, compared with one year earlier, to 15.4 percent. Late arrivals increased more than 4 percent to 19.3 percent of all domestic flights.
While mounting passenger levels is a primary factor, it is not the only one, according to SideStep consumer advocate Terry Trippler. "There will be air traffic control problems as long as the legacy airlines keep buying regional jets and insist on running hourly service on busy city pairs," Trippler said. "The RJs will backfire on them."
Indeed, major airlines increasingly are deploying regional jets on routes between their hubs and bigger spoke airports, and even between two hubs, rather than only to secondary and tertiary markets. That strategy increases flight operations at busier airports already facing air traffic control congestion.
Last month, the Federal Aviation Administration said nine of the nation's 35 largest airports were operating above Sept. 11, 2001, levels. By year-end, that number is expected to increase to 15, including seven of the 10 largest airports. FAA specifically cited five airports that immediately require additional capacity: Hartsfield Jackson Atlanta International, Newark Liberty International, New York LaGuardia, Chicago O'Hare International and Philadelphia International.
The Bureau of Transportation Statistics this month reported worse on-time performance in the first five months of the year for the vast majority of busy airports. Chicago O'Hare fell the furthest, nearly 16 percent, to finish the period with on-time performance below 63 percent. Only Charlotte and Cincinnati among the group managed to improve performance numbers.
Meanwhile, a recent Accenture survey of 429 business travelers found that 48 percent in the past six months experienced airline maintenance-related delays and/or cancellations.
The traveler headaches do not necessarily end when they finally reach their destination. The airlines as a group in May had a higher ratio of mishandled bags, 4.13 reports per 1,000 passengers, up from 3.65 a year earlier. Those majors with the largest increases included Alaska, American, Continental, Northwest and US Airways.
The airlines did improve in one DOT-measured customer service metric: passenger complaints. The industry's aggregate ratio in May was 0.54 complaints per 100,000 enplaned passengers, down from 0.70 one year ago. Three of the only four carriers with higher complaint ratios than last year were low-cost carriers: ATA, JetBlue and Southwest. The fourth was US Airways.
Corporate Negotiating Impact
Sources had mixed opinions about the negotiating environment for corporations—influenced as always by their locations and traffic patterns—amid this period of rapidly growing volumes. One travel manager at a multinational firm said airlines recognize that traffic increases could be short-term and therefore won't play hardball. "Everyone knows that this all goes to hell in a hand basket if there is another act of terrorism," he said, speaking on the condition of anonymity. "Airlines are positioning themselves for the long term, realizing the situation is not back to normal, and won't gouge you."
Laurence Smith, an attorney with Wolff & Samson in West Orange, N.J., who advises corporate travel departments, agreed. "In recent requests for proposals for clients, we still see very aggressive pricing," he said. "It still is a buyer's market."
SideStep's Trippler offered an opposite viewpoint. "It is a seller's market, and it will be harder to get deals for corporate contracts because of record load factors, even with the increase in capacity," he said. "Legacy carriers do not have to beg for the business, and it has never been tougher for corporate travel managers."
"Two of our three main domestic airline vendors have renegotiated terms in the past 12 months or so, both of which worked to our financial disadvantage," said one Boston-area travel manager. "Increased price for decreased service can be a tough pill to swallow."
No matter the negotiating stance by their preferred airlines, travel managers still will hear about inconveniences from their travelers as long as airports and air traffic control routes fill with more flight operations. While some expect heavily discounted pricing to extend peak traffic levels past Labor Day, others were less concerned about the autumn, expecting the typical traffic fall-off. "This is July and August will be the same story, with load factors a few points higher," Mann predicted last month, "but come September, you won't have trouble finding seats."
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CHICAGO (AP) — A Japanese man flying to Ohio on business was arrested Sunday at O'Hare International Airport after he wrote the words "suicide bomb" on a piece of paper, police said.
The 60-year-old man, however, was released without being charged after he explained to investigators that he came across the words in a newspaper and wanted to look up their meaning, police spokeswoman Alice Casanova said.
"He teaches himself English by reading newspapers," she said. "It was all just a miscommunication."
United Airlines flight 1184 was en route to Dayton, Ohio, when a passenger spotted the words and alerted a flight attendant, Casanova said.
The plane then returned to a terminal at O'Hare where the man was taken into custody and all of the flight's 120 passengers were deplaned and rescreened.
Investigators also conducted a routine search of the plane, Casanova said. No bomb was found.
"Nothing panned out and he was released," she said.
Transportation Security Administration spokeswoman Andrea McCauley said travelers need to be mindful of how they behave on airplanes because potential security threats are treated very seriously.
"We caution people not to write about bombs because if they're going on vacation, their travel plans will be disrupted," she said.
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CABIN crew on a Ryanair jet which caught fire weren't properly trained in opening exit doors, an official report revealed today.
And the budget airline's safety regulator has been told to review training after cabin crew struggled to evacuate passengers from the burning jet.
Ryanair cabin crew wrestled with the emergency exits during the fire at Stansted Airport.
Aviation chiefs investigating the incident found most of the new staff were not properly trained to open exit doors, and 40 passengers were evacuated on the wrong side of the Boeing 737.
The Air Accidents Investigation Branch report said the evacuation had "hindered the firefighting operation".
The incident happened in February 2002, but the AAIB report has only just been published after a two-year probe.
The report comes amid claims the airline is contracting out cabin crew training to centres across Europe, including Poland and Latvia.
Applicants are said to have to pay for the course, plus other expenses, at a total cost of about £2000.
But a spokeswoman denied Ryanair contracted crew out to European centres to cut costs. She said: "Ryanair operates out of 11 European bases and holds regular training courses from these bases.
"The airline is running a UK training course for new recruits and, when appropriate, will continue to do so to meet growth requirements."
The blaze drama began when airport staff spotted flames at the rear of the aircraft as it landed after a flight from Dublin.
The pilot was advised to evacuate the plane's 115 passengers. But he did not hear a second message telling him to make sure passengers did not use doors on the starboard side, where firefighters were tackling the blaze.
Some crew, unable to open the doors, called on other staff to help them.
The report said: "The door opening forces encountered during training were considerably less than those that would be encountered in a real evacuation."
The AAIB said it had repeatedly advised airlines to use "realistic door operation" during staff training.
Four passengers suffered minor injuries during the evacuation, which was completed in about 90 seconds.
The AAIB has ordered the Irish Aviation Authority to review staff training.
The Ryanair spokeswoman welcomed the report, but denied staff were not properly trained to open emergency exits. Link to external site
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Los Angeles International's largest carrier said Monday it probably will negotiate deals made since filing bankruptcy to refinance aircrafts -- or else face repossession of some jets, Reuters is reporting.
United Airlines, part of UAL Corp., says it still needs to cut costs since the government denied its backing of an application for a $1.1 billion loan, the report stated.
Section 1110 of the U.S. bankruptcy code gives the aircraft fewer rights to repossess planes after 60 days from the initial filing, a time now long passed in United's case, the report states.
On Thursday, the International Association of Machinists and Aerospace Workers sued UAL company executives for saying the company will no longer contribute to employee pension funds while the airline remains in bankruptcy.
The suit followed a sour earnings report from the Chicago-based company that same day.
Since 2002, the company has operated in Chapter 11.
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SEOUL (AFP) - Pilots at Korean Air, South Korea's largest carrier, voted Monday to go on strike after wage negotiations with management broke down, officials said.
More than 75% of some 1,300 unionized pilots voted for the walkout, Korean Air spokesman Crimson Lee said.
"They have yet to specify schedules for the strike, which should be determined at a follow-up union meeting," Lee said after the vote.
While the pilots' union had demanded a 9.8% rise in their basic salary, management had only offered a basic-wage increase of up to 6%, he said.
A Korean Air pilot's annual average wage stands at 81 million won ($69,000), he added.
Korean Air officials say a strike could cause a daily loss of about $17 million for the company.
Unionized workers at South Korea's other airline, Asiana Airline, are also voting on a proposed strike over a failed wage deal. The ballot count is due Tuesday.
In 2001, the two companies launched a joint strike demanding higher wages.
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FAA is giving operators an extra four years to comply with a fuel tank safety rule after concluding carriers could face challenges in meeting its original December 2004 deadline.
FAA issued the rule in April 2001, requiring operators to develop procedures for inspecting fuel tank systems and changes to maintenance programs to ensure continued safety. Last week, the agency said the new compliance date is Dec. 16, 2008.
The agency said its guidance to the design approval holders wasn't specific enough to develop the maintenance inspection procedures, which means design approval holders haven't finished developing tasks for operators to use in the new inspection and maintenance programs. FAA said operators were also confused about how to approach the agency's requirement that the maintenance and inspection programs cover their specific aircraft configurations.
FAA's extension doesn't "delay correcting existing unsafe conditions," the agency said, adding that it simply gives operators more time to put programs into practice to prevent "unsafe conditions from developing in the future."
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Cabin crew struggled to open emergency exits as passengers "pushed and shoved" to get out of a plane that had landed with an engine on fire, according to an official accident report.
Some passengers on the the Boeing 737 operated by low-cost carrier Ryanair were evacuated on to the side of the plane where the fire was being fought.
Six of the passengers who had climbed on to the right wing of the plane at Stansted airport in Essex were ordered back into the aircraft to seek alternative exits, the report from the Air Accidents Investigation Branch (AAIB) said.
Eventually all 117 passengers on the Dublin to Stansted flight on February 27, 2002, were evacuated and the fire in the right engine extinguished. Four passengers received minor injuries in the evacuation.
The report said that two cabin crew members had had difficulty opening emergency doors and that some new entrant cabin crew personnel would not have had training in operating these heavy doors which had evacuation chutes attached.
There was some "ambiguity" about whether the training requirements included the need to operate exits in all modes of operation, said the report.
The AAIB also added that after the landing the cockpit crew had put the plane into a crosswind position with the right engine on the upwind side.
A crosswind had worsened the situation on an on-fire British Airways' Boeing 737 at Manchester airport in 1985 when 55 people died.
Of the Ryanair incident, the AAIB said: "Had the right engine developed an uncontained fire, the relative wind would have exacerbated the situation and adversely affected the survivability of such an event."
The report added that had the word "fire" been communicated to the flight crew initially, instead of "smoke", then it "may have triggered them into giving greater consideration as to where to bring the aircraft to a stop".
A Ryanair pilot who was among the passengers had noticed "some pushing and shoving in the cabin" during the evacuation but had generally felt that the procedure had run smoothly, the report said.
The AAIB made a number of safety recommendations including asking the Irish Aviation Authority to review cabin crew training.
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A UNITED Airlines jet aborted takeoff at Bangkok International Airport early today after a bird got caught in one of its engines, and four passengers suffered minor injuries as they evacuated the plane, the company said.
Flight UA838 headed for Tokyo also "experienced a tyre blow-out" during the aborted takeoff, United Airlines said in a statement. It wasn't clear what caused the tyre to burst.
"The takeoff was aborted due to a bird ingested into one of the engines," the company said. "For the safety of passengers and crew members, the pilot activated an immediate evacuation."
The Boeing 747's two pilots, 15 crew members and 346 passengers slid down evacuation chutes onto the tarmac, the statement said.
Four passengers who suffered minor injuries during the evacuation were treated by a medical team at the airport and two of them were later hospitalised, the statement said.
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DALLAS, Aug. 1 (AP) - A computer problem grounded American Airlines and US Airways flights from coast to coast on Sunday morning, causing delays that lasted all day. A computer company official said human error was the likely cause.
American had its planes back up after two hours, while US Airways flights resumed after about three.
"It appears to be unintentional user error," said Jeff Baum, spokesman for the Electronic Data Systems Corporation, the Plano-based company that runs the computer system used by both airlines.
A Federal Aviation Administration spokeswoman, Diane Spitaliere, said both carriers asked the agency's air traffic controllers to help communicate with planes to keep them on the ground until the problem were fixed.
A US Airways spokeswoman, Amy Kudwa, said the airline's flight-operation database malfunctioned. A similar problem affected American's flight plan system, grounding about 150 flights, John Hotard, a spokesman, said.
The problem forced US Airways, based in Arlington, Va., to delay about 100 flights. Separately, some flights were canceled Sunday in Philadelphia, an airline hub, and New York because of thunderstorms.
Mr. Hotard said flights for American, based in Fort Worth, most likely would not be on schedule until Monday.
"All flights could run up to two hours behind," Mr. Hotard said.
Mr. Baum said Electronic Data Systems and its clients took the computer system off-line when they noticed irregularities. He said the problems never posed a safety issue and dealt mainly with departure readiness, like flight scheduling, catering services and baggage processing.
Mr. Baum added that it was too early to confirm who or what caused the error and that Electronic Data Systems was conducting an internal evaluation.
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By: Jessica Schneider
The ticket counter was jam-packed just a week ago. But now that Independence Air has its feet on the ground, the crowd is thinning out.
Caroline Leslie of Virginia said, "Our plane wasn't full, but there were about 30 of the seats full."
Those numbers are worrying company executives. Last week, execs told analysts the airline sold fewer seats than initially expected, despite heavy marketing.
Most airlines this summer have been selling 80 percent of its seats. Independence Air, however, only filled 34 percent when it first launched in June and 47 percent in July. This month, spokespeople said they expect to sell 60 percent. Though numbers may be low, the airline counters that it is new and it's on the upswing.
Travel Consultant Amy Goldstein said, "It's only the first couple of weeks that they're here. I'm sure it'll definitely increase in the future."
But the lack of flyers doesn't mean a cut-back on falling prices. People traveling all over the country said they've seen the positive impact Independence Air has on cost.
Mark Levinson of Washington, D.C. said, "We look for the best value, and it looks like they're offering it."
Levinson and his wife live just minutes from Independence Air's hub at Washington-Dulles. They said the airline offers them more options, at a fraction of the price.
Ann Kamenstein of Washington, D.C. said, "It's making a big dent for someone like my family that does a lot of traveling to New York and to Florida."
Independence Air spokespeople said this is the largest roll-out of new service in the history of the airline industry, and they said it will just take time to feel the positive effects.
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By Gail Goodger
"I'm fed up with it," wheelchair-bound Peter Dalton said as he picketed Air New Zealand's office in central Dunedin yesterday.
"I get fed up with people telling me I'm a nuisance by wanting to travel. I'm only exercising my right, the same as anyone else . . . It's not a privilege, it's a basic right," Mr Dalton said.
Swaddled in extra layers of clothing and woolly hats to keep the cold at bay, Mr Dalton and five other people with disabilities were protesting Air New Zealand's new policy for wheelchair users.
Under the policy, anyone on domestic flights who needs help from two or more people to move between a wheelchair and an aeroplane seat when boarding or disembarking must have their own support person to lift their upper body while a staff member lifts their legs.
The support person does not have to travel on the flight.
The protest yesterday drew Air NZ airlines group general manager Rob Fyfe and spokeswoman Rosie Paul to Dunedin from Auckland. They were greeted by placards saying "Air New Zealand, the airline that discriminates" and "you will never get there if you need their help".
The protesters were accompanied by about six able-bodied supporters. One, Carol Taurua-McCready, said "who knows - tomorrow I might be injured and be in a wheelchair".
Another protester, Donna-Rose McKay, said 550 to 600 people signed a petition asking the airline to review its discriminatory policy. The petition would be delivered to Air NZ.
She was optimistic after discussions with Mr Fyfe yesterday, but said the proof would be "in the pudding" - based on Air NZ's actions.
Mr Fyfe said in a statement the company would enter mediation with disability groups which had lodged a complaint with the Human Rights Commission.
The airline was also reassessing checking-in and boarding procedures for people with disabilities, to ensure they were the most effective possible.
Air NZ was working with disabled people to test various techniques to develop a system which would provide them with appropriate service, while ensuring staff were not exposed to unacceptable risks of injury, he said.
Lifting passengers had injured 103 staff, rendering them unfit for work, in the year to May. About 1000 customers annually needed such help.
The specific challenges of lifting a disabled passenger in an aircraft's tight confines could not be mitigated by extra training, he said.
Qantas Airways does not require wheelchair users to provide their own assistance on domestic flights in New Zealand.
Mr Fyfe said Qantas used Air NZ ground staff to lift passengers in New Zealand. In Australia, Air NZ used Qantas ground staff, who would not lift passengers.
"Air NZ is very focused on this important issue and we are keeping an open mind on how best to service all our disabled customers," Mr Fyfe said.
By MARY WILLIAMS WALSH In an echo of the savings and loan industry collapse of the 1980's, the federal agency that insures company pensions is facing a possible cascade of bankruptcies and pension defaults in the airline industry that some experts fear could lead to another multibillion-dollar taxpayer bailout.
"The similarities are incredible," said George J. Benston, a finance professor at Emory University in Atlanta who has written extensively on the regulatory failures that led to the costly savings and loan bailout.
Deposits in savings institutions are, like pensions, guaranteed by a federal insurance program. The savings industry first sickened because changes in market conditions made the traditional way savings and loans operated unprofitable, but government delays and policy missteps then made the situation much worse. In the end taxpayers bailed out the industry — at a cost, according to various estimates, of $150 billion to $200 billion.
Now experts say they see similar forces gathering in the pension sector, with United Airlines perhaps the first to go down the path. Operating in bankruptcy, United is striving to attract the lenders and investors it needs to survive. It said last month that it would no longer contribute to its pension plans; United also seems intent on shedding some or all of its $13 billion in pension obligations as the only way to succeed in emerging from bankruptcy proceedings.
If United manages to cut itself loose from the costly burden of its pension plans, it might force others determined to keep their costs similarly under control to emulate its move. "Rivals may feel they are at a competitive disadvantage and follow suit, raising the specter of a domino effect in the industry," said Bradley D. Belt, the executive director of the government's Pension Benefit Guaranty Corporation, which insures pensions. If every airline with a traditional pension plan were ultimately to default, the government would be on the hook for an estimated $31 billion. Its insurance coverage is limited, so some employees would have their benefits reduced.
"The pension insurance program is there to protect workers' benefits," said Mr. Belt, who took over the agency in April. "It shouldn't be used as a piggy bank to help companies restructure."
Already, some airline employees are taking steps to protect themselves against future pension losses.
Each month, for example, about 30 pilots normally retire from Delta Air Lines. But in June, almost 300 did.
Andrew Dean, one of the new retirees, said he and his colleagues watched in dismay as the financial debacle unfolded at United. He said that he and many of his fellow pilots decided they had better grab their pensions right away - while the money was still there.
"These are very scary times right now for someone in my position," said Mr. Dean, who at 58 walked away from his job just as he was reaching the peak earning period of his career. His pension was also reduced because he retired early.
But his decision now looks prescient. On Friday, Delta asked its pilots for a 35 percent pay cut and proposed a smaller pension plan.
Foremost on the minds of the departing pilots, Mr. Dean said, were arcane pension rules that can offer advantages to workers who quit before a pension plan fails. At Delta, for example, as long as the pension plan stays afloat, pilots are allowed to take half of their benefit in a single check when they retire. But if the plan fails, the pilots lose their chance to take a big payout.
"What I've managed to do is secure half of my retirement," Mr. Dean said. He may still lose the rest if the government takes over the program and limits future payouts. "I really lose sleep over that," he said.
The Pension Benefit Guaranty Corporation is already hobbled by debt, having picked up the pieces of more than 3,200 failed pension plans in its 30-year life. The scale of the failures has risen sharply in the last three years, but the agency has few tools at its disposal to prevent the situation from becoming worse.
Now it faces a possible $5 billion default by United - which would be a record - and the possibility of more big airline defaults after that.
"The agency can't take a lot of $5 billion hits, multiple times per year, year after year, and survive," said Steven A. Kandarian, the pension agency's immediate past director. "Eventually, you'll run out of money."
It is impossible to predict the exact size of any pension bailout, although economic projections by the agency suggest that in the worst case, a bailout within the next decade involving failures beyond the airlines could cost taxpayers up to $110 billion.
But because pension obligations, unlike bank deposits, do not have to be paid off all at once, it is difficult to raise alarms about the threat.
"The real blowup doesn't happen right away; it happens over time," Mr. Kandarian said. "You've got to address it now, but it doesn't look like a crisis now. The crisis is always over the next hill."
The risk is that the longer the problems are avoided, the worse they can get.
"With the S.&L.'s, what was a relatively small problem in the early 1980's became over a $100 billion problem in the late 1980's," said Mr. Kandarian, who fears the same thing will happen to the pension system.
United, the nation's second-largest carrier behind American, is one of the worst off of the airlines. The entire industry has been coping with high fuel prices and flagging demand, particularly since the 9/11 terrorist attacks.
But United and the other five remaining major carriers that grew up in a world of regulated routes and ticket prices - American, Continental, Delta, Northwest and US Airways - face even more fundamental problems. In recent years, all of them have struggled to compete with the new, low-cost carriers like Southwest, JetBlue and AirTran that have much lower overhead.
United has been operating in bankruptcy proceedings since December 2002. Already, it has negotiated significant concessions from its workers, suppliers, landlords and others. United says it is still analyzing what to do with its pension plans.
In June, the Air Transportation Stabilization Board turned down United's request for federal loan guarantees, saying it believed the airline could get financing without government help. So far, United has not been able to. Until it does, it cannot emerge from bankruptcy proceedings.
It is an open secret that prospective financiers are turned off by the roughly $13 billion of pension debt United is carrying on its books - the one big block of debt that the airline has left untouched so far. That figure is the value, in today's dollars, of the pensions that United's pilots, flight attendants and other workers and retirees have earned. Once a pension has been earned, it cannot legally be taken away.
By law, this debt to the work force is to be secured by the money United sets aside in its four big pension funds. But as things have turned out, United had only about $7 billion in the pension funds as of last December.
The remaining $6 billion is unsecured debt. Pension law and bankruptcy law differ on the implications of this: pension law says the $13 billion owed to the workers cannot be taken away, while bankruptcy law says the workers are unsecured creditors with respect to the $6 billion shortfall. And unsecured creditors usually lose in a bankruptcy case.
If, in the coming months, United persuades its bankruptcy judge that it cannot survive without canceling its pension debts, then the airline will be allowed to unload some or all of its $13 billion obligation, helping it line up the financing it needs to emerge from bankruptcy proceedings.
The pension debt, and the $7 billion United has already set aside in pension assets, will go to the federal pension agency, which will pay the airline's retirees their benefits, but only up to certain limits.
Hard as that would be on the employees of United, it is also an alarming prospect to the employees of the other major carriers.
"Things start to set a precedent," Mr. Dean, the retired Delta pilot, said. "If a bankruptcy court allows a company to terminate its pensions, then that becomes a very tempting business tool."
That is what happened in the steel industry. LTV Steel's pension fund fell to the government in March 2002, and its unencumbered assets - steel mills, coke and lime plants, railroads and other properties - were snapped up at once. That put pressure on other tottering steel companies to shed their pension plans as well.
Seven more failing steel plans went to the government before the year was out, including the current record-holder among pension defaults, the Bethlehem Steel plan, which cost the pension agency $3.9 billion to take over.
It wasn't supposed to be this way. In 1974, Congress responded to an ugly string of pension failures in the auto industry by passing landmark legislation. From then on, any company that promised pensions to its workers would be required to set aside enough money to pay them. Rules were written to determine how much money was enough. To weave the retirement safety net even more tightly, Congress also created the pension insurance program.
Those protections were hailed as "the greatest development in the life of the American worker since Social Security" by Senator Jacob K. Javits, the New York Republican who died in 1986.
But for many workers, those protections no longer look so secure.
"You see that the whole thing could really be a house of cards that could come crashing down," Mr. Dean said.
United's pension plan developed its multibillion-dollar shortfall, in part, because pension law allows companies to fund their plans with the assets that any prudent investor would select. Over time, that has meant a shift away from the very conservative bonds that companies used to secure pensions before the 1974 law, in favor of more aggressive investments.
Stocks have become the investment of choice, but today many pension funds seek to bolster their returns even more by adding relatively small amounts of hedge funds, junk bonds and other risky assets. This investment approach can produce attractive returns over time, but can be very volatile and much more dangerous if companies are forced to pay off some of their pension obligations in a down market.
As the pension system has weakened, some specialists have called for measures that would discourage the riskiest investments. As director of the pension agency, Mr. Kandarian proposed charging higher insurance premiums to companies that invested their pension funds in riskier assets, particularly companies that were in bad shape themselves. No one paid attention.
"I was naïve," Mr. Kandarian said.
Along with Mr. Kandarian, current officials at the pension agency and at the Treasury Department have also been calling for a tightening of the rules requiring pensions to set aside enough money to meet their obligations. In April, Congress loosened the rules instead. The biggest flexibility was given to the most troubled industries, making their pension funds look healthier.
"Doctoring the numbers is all they're doing, and they're especially doing it for steel and airlines," Mr. Benston said. "Shades of the savings and loan crisis. Same darn thing."
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By ALAN COWELL LONDON
JOURNALISTS handcuffed, thrown into cells and deported; legislators harassed by incompetent officials.
Such images usually conjure thoughts of dark deeds in distant dictatorships. But episodes like those have come to symbolize the experiences of many friendly Europeans trying to enter the United States.
In recent weeks there has been some evidence that, after complaints from international journalism groups, the rough handling of foreign reporters chronicled by several European writers has stopped. And American authorities have sought to broadcast a message that their anti-terrorism measures are not supposed to be seen as hostile to outsiders.
"We are an open society,'' Robert C. Bonner, the commissioner of Customs and Border Protection, said in a recent statement in Washington after a series of news reports in Britain and the United States suggesting just the opposite. "And we want people to feel welcome here.''
But, for some, the damage has been done.
According to Reporters Without Borders, a Paris-based private policy group that monitors and protests infringements of news-media freedom, around 15 foreign reporters from Britain, France, Sweden and the Netherlands were harassed at American airports as security measures were tightened in 2003 and 2004.
Specifically, reporters like Elena Lappin, a freelance writer on assignment for The Guardian, a British newspaper, complained of being handcuffed, detained and subjected to verbal abuse in May after American authorities revived a long-dormant visa requirement for foreign journalists.
The delays associated with heightened security were cited in June as one factor in a decision by Spain's national airline, Iberia, to close its hub at Miami International Airport. The move came after American authorities began insisting that passengers get visas even if they are simply passing through Miami from one foreign country to another. The procedural changes had caused delays of up to four hours.
In general, some Britons argue that, even as the United States presses demands for new passports with digital identity information, security at American airports has become a recurrent nightmare. Not only are the rules tighter, the argument goes, but those who enforce them are badly prepared.
"It's a sort of general level of arrogant incompetence,'' said Gwyneth Dunwoody, a British legislator from the governing Labor Party who complained of being harassed by airport security officials in several cities, including New York, during an official visit to the United States last January.
Ms. Dunwoody's remarks prompted a torrent of letters to The Daily Telegraph from readers who told of experiences that included being held and handcuffed before deportation from Kennedy International Airport and other American airports.
In an interview in June, Ms. Dunwoody also criticized what she depicted as increasingly intrusive American demands for personal information about passengers on flight lists. Several British flights to the United States have been delayed for hours as American officials pored over the flight lists, according to pilots and airline officials.
The British Foreign Office said in May that it had complained to the United States authorities after one British tourist, David Pattison, a 52-year-old accountant, said he was held in leg chains at Kennedy for 24 hours in April and denied food and water.
Mr. Pattison told The Daily Telegraph that American immigration officials said his name appeared on an Interpol list in connection with $10,000 worth of outstanding debts in the Persian Gulf nation of Qatar, where he had worked in 1999. He denied the accusation but was deported to Britain.
In a similar case, Magnus Mulliner, the deputy head of sports and recreation at a college in Southampton, England, said he had been refused entry to the United States at Kennedy in 2002 after immigration officials told him his name was linked to narcotics offenses, which he denied. He told The Daily Telegraph that United States authorities had not responded to his protests.
American authorities say that shackling people is rare and that handcuffing is mainly used while detainees are being taken to another location. That was the experience of Ms. Lappin, who first chronicled her experiences at Los Angeles International Airport in an article in The Guardian on June 5. She complained of having her hands handcuffed behind her as she was transferred from the airport to a detention center 20 miles away. At the center, she wrote, she had no bed and no chair. "There was a toilet in full view of anyone passing by, and of the video camera watching my every move,'' she wrote.
The day after she was detained she was deported back to Britain. Her offense? Failing to get an I-visa, a form of visa rarely used since the 1950's but formally a requirement for all foreign reporters. Ms. Lappin said she had never been asked to get an I-visa on earlier trips..
There are signs that the United States is aware of foreigners' concerns. In June, the House of Representatives voted to postpone for one year an October deadline for 27 countries, mostly in Europe, to provide citizens traveling to the United States with so-called biometric passports, which use face recognition technology. And in May, Mr. Bonner, of Customs and Border Protection, announced a change allowing reporters to enter the country once without an I-visa.
In his statement, Mr. Bonner said his agency's "priority mission" is keeping terrorists from entering the country.
But, he said, "we realize there is a difference between fraud and failure to be informed of the legal requirements for entering the United States.''
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BLOOMBERG
Asia's aviation industry may expand and become more competitive after the region eases restrictions on air services, US Secretary of Transportation Norman Mineta said in Indonesia, after talks with APEC transport ministers.
Asian countries are "trying to boost their airlines to function efficiently," Mineta said in an interview during the APEC's transport ministers' meeting in Bali.
"What this does is to make airlines more competitive," push them "to be prompt with their schedules" and compel them to "have competitive fares," he said.
Singapore Airlines, Cathay Pacific Airways and other Asian airlines are enjoying a rebound in global tourism and economic growth, after the SARS outbreak deterred air travel last year. Eco-nomic growth in China, Japan and the US have led to more tourist arrivals and encouraged more business travel.
Singapore Transport Minister Yeo Cheow Tong said earlier this week that his city-state expects to reach an agreement by early next year with Australia to remove flight restrictions between the two countries. The agreement would allow Singapore Airlines to fly to the US via Australian cities. Singapore's Changi airport may handle as many as 30 million passengers this year, Yeo said.
The agreements "will benefit the incumbent players in the market because they are the most ready and most of them are supported by the governments," said Peter Harbison, managing director of the Centre for Asia-Pacific Aviation in a telephone interview from Sydney.
"The open skies agreements mean there will be a lot more routes in the region," he said.
The US and Indonesia signed a similar open-skies pact this week, taking away limits on flight frequencies, aircraft types and fares on passenger and cargo services.
The agreement lets Continental Airlines, the fifth-largest US carrier, add routes to Indonesia, while Northwest Airlines Corp, the fourth-largest US carrier, may cooperate with Indonesia's biggest carrier PT Garuda Indonesia on a new route.