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Singapore launches SINCAIR Programme to enhance aviation safety
SINGAPORE : In a bid to boost aviation safety, individuals can now report aviation incidents and safety deficiencies anonymously.
This was announced by Minister of State for Transport Lim Hwee Hua at an aviation safety seminar on Thursday.
The information provided will be gathered into a database.
The aviation community can then get extracts of such cases through periodic publications.
Called the Singapore Confidential Aviation Incident Reporting or SINCAIR Programme, it is meant to prevent accidents.
The programme is in line with the International Civil Aviation Organisations' recommendation for a non-punitive reporting system which offers protection to the sources of information.
It also complements mandatory incident reporting systems.
The programme, established by the Air Accident Bureau of Singapore, starts from Friday.
The bureau is responsible to the Transport Ministry for local and overseas air accident investigations. - CNA
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Brussels considers new tax on aviation fuel
By Stephen Castle in Brussels
Jacques Barrot, the incoming European Union transport commissioner, yesterday sent a tremor through the aviation industry by suggesting a curb on the tax exemption for jet fuel.
M. Barrot said that, once the surge in oil prices has subsided, the issue of taxing aviation fuel for internal EU flights should be examined. In a hearing at the European Parliament in Brussels, M. Barrot said: "We need to come back to the problem of the tax exemption for jet fuel when tensions on the oil price abate. Would it not be possible to introduce a low rate of tax on intra-EU flights not exposed to international competition?"
M. Barrot is due to take over the transport brief on 1 November. His ideas echo those of environmentalists who argue that trains and other forms of transport are not competing with the airlines on a level playing field because the air operators do not pay tax on aviation fuel.
But, with airlines in the US exempt from fuel taxes, European governments know the new duty would put their airlines at a competitive disadvantage. Applying a levy only for internal EU flights would reduce that problem, since only European airlines operate these routes. But all 25 EU governments would have to back the plan, and that is unlikely. Alternatively countries could reach bilateral agreements, levying the same tax on flights between them.
M. Barrot's initiative might prove difficult to administer if airlines had to operate under two regimes, with international flights exempt, but EU routes liable to the new duty.
Steve Double, the head of news for British Airways, said: "It would be unwelcome and would add costs at a time when everyone is ... struggling to keep their heads above water."
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Airline caterers to strike after mediation fails
More than 400 union members at airline catering company LSG Skychefs will strike for eight hours or refuse overtime over the next week after mediation failed to settle a wage dispute.
Union staff at Auckland, Wellington and Christchurch airports will take part in the strike action, Service and Food Workers Union national secretary Darien Fenton said today.
The union is claiming to have all overtime paid at time-and-a-half and members previously rejected the company's offer of 4 percent increase for two years, she said in a statement.
LSG Skychefs did not want to comment on the industrial action.
The company is the major player in airline catering in New Zealand, supplying Qantas, Air New Zealand, and many other international airlines that fly here.
- NZPA
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Oil prices spare no airline
Liz Fedor
Star Tribune
The five low-fare airlines that serve the Twin Cities are expected to lose money this quarter, proving that few carriers can escape the financial carnage wrought by $50-a-barrel oil.
The losses likely to be incurred by some previously profitable low-fare carriers could force executives to lessen the sting by raising ticket prices, a move that probably would be followed by Northwest Airlines and other major carriers.
AirTran Airways and Frontier Airlines already have warned that they'll lose money in the quarter that ends today, even though it includes the peak summer travel season. Analysts are projecting a loss of 45 cents a share for America West, and Indianapolis-based ATA Airlines is scrambling to slash expenses in order to avoid a bankruptcy filing.
Fuel costs at Sun Country Airlines, based in Mendota Heights, rose 40 percent in August alone, and the company said it may lose up to $1.5 million this quarter.
Analysts also expect profits to be down at industry stalwarts Southwest Airlines and JetBlue Airways, neither of which serves the Twin Cities.
That marks a sharp turnabout for many low-fare airlines, which appeared invincible in recent years while the big carriers, such as Eagan-based Northwest and United, tallied big losses.
"The assumption is they can't lose money, but they can," said Joel Denney, an airline analyst for Piper Jaffray & Co. in Minneapolis.
Low-fare carriers have been making money by flying on high-volume routes with new airplanes and younger labor forces that typically are paid less than many of their counterparts at the big airlines.
"Fuel happens to be a great equalizer," said Joe Hodas, a spokesman for Denver-based Frontier, which saw its fuel costs rise 34 percent, to $1.25 a gallon, in the past quarter.
High fuel prices carry a stiff financial burden for low-fare carriers, most of which are rapidly expanding their fleets and their routes in order to compete more directly with the major airlines.
At Frontier, for example, the spike in fuel prices occurred while it was locked in a bitter fare war with Northwest on new nonstop service between the Twin Cities and Los Angeles. Frontier ended up retreating in the Twin Cities and also reduced new nonstop service between Los Angeles and St. Louis and Kansas City.
August was a particularly brutal month for Frontier. It increased the seat miles it flies by 40 percent in August, but revenue per seat mile dropped by 19 percent.
Michael Boyd, an aviation consultant from Colorado, said that there are several business differences among the five low-fare carriers that provide service to the Twin Cities. But he said the price of fuel is having an adverse effect upon all of them.
Boyd also stressed that high fuel prices aren't the only major culprit in the losses for the third quarter.
"You have a fuel whammy and a consumer aversion to going to Florida," Boyd said. Among the low-fare carriers, AirTran Airways, based in Orlando, was severely hurt by the four hurricanes that hit Florida.
Denney noted that the pain will continue for AirTran and other carriers serving Florida, because many leisure travelers will take vacations elsewhere until rebuilding efforts are completed.
The third quarter typically is a weak one for Sun Country Airlines, which experiences its heaviest traffic between December and April, when Minnesotans are traveling to warm-weather destinations.
Still, escalating fuel costs guarantee a larger-than-expected loss of $1 million to $1.5 million, said Shaun Nugent, Sun Country's CFO. It also lost about $450,000 in the second quarter, after paying 32 percent more per gallon of jet fuel.
On Friday, Sun Country said it would boost fares in some markets to offset the continuing rise in its fuel costs.
Terry Trippler, who operates the Web site Hubcitymsp.com, said he has watched low-fare airlines institute small fare increases in a smattering of markets. But he also has watched fare increases, such as one recently introduced by American Airlines, fall apart when low-fare competitors fail to match and keep raises in place.
Trippler, whose Web site promotes travel on the low-fare airlines serving the Twin Cities, said consumers have benefited from the low fares being offered by all sizes of carriers. But "if airlines continue to sustain losses, the consumer loses in the long term," he said.
The major airlines have been unable to raise fares, largely because of intense competition from low-fare airlines. Once the quarterly losses are revealed at low-fare airlines, Trippler said, "I don't think they'll go very long without raising fares."
But there still is too much seat capacity on the market, Boyd said, and low-fare carriers have new airplanes on order and they'll quickly move to pick up routes that may be dropped by big airlines. For example, AirTran took delivery in June on the first of 50 new Boeing 737s.
At America West, spokeswoman Janice Monahan said every penny increase in the price of fuel per gallon translates into a $4.5 million rise in annual fuel expenses. In the second quarter, America West paid an average of $1.16 a gallon for fuel, up 41 percent over the 2003 quarter.
America West, like many of the low-fare carriers, had some hedges in place to guard against huge increases in fuel prices. But the carrier saved only $7.7 million as a result of fuel-hedging transactions in the first half of this year.
Southwest Airlines, the largest low-fare carrier, locked in substantially lower fuel prices on four-fifths of its supply. But even Southwest and JetBlue Airways expect lower profits because they are being hurt by high fuel prices.
Analysts don't expect a return of $20-a-barrel oil. Boyd, for one, doubts that oil will drop below $35 a barrel, and that may not provide much relief to weakened carriers, be they major airlines or low-fare operators.
"Our fundamental outlook for the industry has dimmed for at least the next four to six months," analyst Michael Linenberg said in a Merrill Lynch research report. If that scenario plays out, he wrote, it will be "most problematic for the industry's financially weakest airlines." ATA and Frontier were among the low-fare carriers considered financially "weakest."
ATA Airlines declined to comment on oil prices or the carrier's financial condition. The airline, which offers daily flights between the Twin Cities and Chicago's Midway Airport, posted an operating loss of $32.9 million for the first half of this year, and it has slashed costs to try and fend off a Chapter 11 bankruptcy filing. Its fuel price per gallon rose 28 percent last quarter.
The Air Transport Association, the industry's trade group for the major airlines, has urged federal officials to tap the Strategic Petroleum Reserve, but Boyd predicted that won't occur. The Bush administration has strongly resisted that move and instead has continued to expand the oil reserve.
Sun Country's Nugent isn't focused on what Washington politicians might sponsor. Right now, he's trying to adapt to the financial havoc at his airline. He's not optimistic about fuel prices. "It is getting worse," Nugent said. "In the last two weeks, we've seen an increase of almost 20 cents in our per-gallon cost."
UPDATE 2-EU's Barrot says to look at aviation fuel tax
By Jeff Mason
BRUSSELS, Sept 29 (Reuters) - Incoming European Union Transport Commissioner Jacques Barrot said on Wednesday the EU executive would examine tax exemption on aviation fuel once the oil market, currently at record highs, cools down.
"When fuel prices have settled down we'll be able to look at the question of the tax exemption for aviation fuel because there, too, there are risks of distortion of competition," he told EU lawmakers.
Environmentalists favour a tax on aviation fuel as a way to discourage people from flying and polluting the air, but European airlines oppose a levy on the grounds that it would create an unfair financial burden that other international airlines do not share.
Oil prices dropped from record highs above $50 a barrel on Wednesday as weekly U.S. inventory data showed a surprise increase in crude stocks, easing fears over stretched international supplies.
This is not the first time the idea of levying a tax on airline fuel has been suggested before the parliament. Previous proposals have focused on a tax for flights within the EU.
Barrot, a Frenchman, told journalists later such a tax would level the playing field between aviation and other modes of transport like rail.
Pending parliamentary approval, Barrot is to become the next transport commissioner in November, succeeding Spain's Loyola de Palacio, whose term expires.
OPEN SKIES, SAFER ROADS
Speaking before the European Parliament's transport and tourism committee, Barrot also said he would go to Washington to continue talks on an open skies agreement with the United States after the U.S. presidential election in November.
The latest aviation deal has been rejected by EU ministers largely because it lacked significant opening of U.S. domestic routes to European airlines.
Barrot said the United States had "three times" more rights in transatlantic aviation than the EU does. "We have to rebalance that," he said.
A deal would allow European airlines to fly to the United States from any EU city, while giving U.S. airlines more access to EU airports. Ownership rules would also be loosened.
Barrot also said he aimed to halve the number of road deaths in Europe from 40,000 by 2010.
He also pledged to help reduce the amount of environmentally-harmful carbon dioxide emissions from the transport sector and ease the problems of urban congestion.
He called for European rail operators to modernise and for EU member states to implement EU laws pertaining to the rail sector.
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Pilot's partner had airline safety roles
Air Adventures pilot Michael Bannerman appointed his inexperienced partner to three crucial safety roles in his company just one year before a crash claimed the lives of eight people.
Jan Williams was the safety officer, quality assurance officer and maintenance controller at Air Adventures and told a coroner's inquest yesterday that she had little experience in any of the jobs and was appointed to fulfil Civil Aviation Authority regulations.
Ms Williams held all three positions on June 6 last year when the Air Adventures plane crashed just short of Christchurch airport.
The crash killed Mr Bannerman and Crop & Food Research employees Howard Bezar, 55, Katherine Carman, 35, Alistair Clough, 37, Richard Finch, 41, Desma Hogg, 41, Andrew Rosanowski, 37, and Margaret Viles, 53.
Christchurch coroner Richard McElrea this week reconvened a hearing into the deaths.
The court heard that Ms Williams had little experience in any of the positions but had passed a CAA test to become the maintenance controller.
She described the role as "mainly paperwork". "I had experience with keeping manuals up to date but as far as basic requirements go, I had not done anything like that before."
She relied on her partner's aviation expertise and fulfilled an administration role within the company.
Ms Williams told the court she had not seen at least two CAA documents sent to Air Adventures early last year concerning safety issues.
The first was an audit raising concerns about pilot duty times being exceeded at Air Adventures, the second was a CAA letter to pilots warning of anecdotal evidence that some pilots were flying too close to the weather limits.
Ms Williams admitted many aspects of the company's own exposition (rule book) were not followed.
Lawyer Jonathan Eaton, representing family members of Crop & Food victims, questioned Ms Williams on the company's financial position.
Despite a $3500 debt to the Civil Aviation Authority, Ms Williams said, the financial prospects for Air Adventures were bright.
She said finances would not have been a factor in Mr Bannerman's decision to continue a flight in rough weather. Ms Williams described her partner as a "wonderful" man with whom she shared an interest in aviation.
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Civil aviation safety record for 2003 lauded
Canadian Press
MONTREAL -- The international agency that governs civil aviation says last year was the safest in nearly 60 years.
"One measure of our collective success is the safety record achieved in 2003, when the number of accidents involving fatalities on the world's scheduled operations was the lowest since 1945," Assad Kotaite, president of the Montreal-based International Civil Aviation Organization, said yesterday.
"Even with the quantum leap in the number of flights and passengers over six decades, aviation safety in 2003 was safer than when ICAO was created."
There were no successful hijackings on international flights and no loss of life on the three domestic hijackings that occurred, he told the opening of the organization's 35th session assembly.
Another official said civil aviation was 100 times safer in 2003 than when the organization was created in 1945. The assessment was based on the number of flights and passengers and the number of passenger-kilometres travelled.
Federal Transport Minister Jean Lapierre told the assembly that government has no greater responsibility than protecting citizens from harm.
He said Ottawa has spent nearly $8-billion since 2001, primarily to prevent terrorist attacks.
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Airline Passenger Attacks Pilots with Axe
A passenger on a Norwegian commuter plane attacked both pilots and at least one passenger with an axe as the aircraft was landing today.
The pilots suffered serious but not life-threatening injuries and were able to land the Kato Air Dornier 228 safely in the northern town of Bodoe.
The attacker, who was wielding a fire axe that was part of the aircraft’s emergency equipment, was arrested after it touched down, police official Bjarte Wala said. Seven passengers were on board.
“The two pilots were injured. I know that at least one passenger was also injured, but I don’t know if there were others,” Wala said.
The twin engined aircraft – capable of carrying 16 passengers – was flying from the northern town of Narvik to Bodoe, 530 miles north of Oslo.
Wala said the attack happened as the plane was making its final approach.
“Despite their injuries, the pilots managed to land the plane safely,” said Wala. “We don’t know the extent of their injuries yet.”
Wala said he had no immediate information about a motive for the attack, the events leading up to it, or personal details about the suspect.
Greek airline diverted in Ireland over new bomb alert
LONDON, Sept. 28 (Xinhuanet) -- A Greek airline bound for New Yorkwas diverted Tuesday to Shannon airport in Ireland after a second bomb alert to affect Olympic Airlines within three days.
The plane, carrying 295 passengers and 12 crew from Athens, safely made an emergency landing at Shannon Airport shortly after 1600 GMT) following an anonymous call to an Athens newspaper saying a bomb was on the plane, reports reaching here said.
An army bomb disposal team and emergency personnel were put on standby upon the plane's landing, said the reports.
A spokeswoman for Ireland's airport operating company Aer Rianta said passengers were being evacuated from the plane which was being searched in a remote section of the airport.
"The newspaper got a call at 1:45 pm UK time saying a bomb was on board and would explode in an hour. Nothing has happened," Olympic Airways spokeswoman Melina Pitta said.
"After a meeting it was decided the plane would make an emergency landing at Shannon as it was the nearest airport," she was quoted by a Sky News report as saying.
The Shannon Airport has been reopened to inbound and outbound traffic, she added.
On Sunday, another Greek passenger plane was diverted to London's Stansted airport by a similar bomb scare but nothing suspicioushas been found during a six-hour search of the aircraft and its baggage. The plane was given the all-clear to continue its flight to New York on Monday morning.
Senior Greek officials from the country's police, civil aviation authority and Olympic Airlines have held an emergency meeting to discuss the threat, according to reports reaching here.
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Airline says it may liquidate
September 28, 2004
ALEXANDRIA, Va. — US Airways Group Inc. warned in a bankruptcy court filing that it may have to liquidate by February if a judge does not impose a temporary 23 percent pay cut on its union workers.
The airline asked a judge on Friday to impose the pay cuts by Oct. 14 at the latest. Yesterday, US Bankruptcy Judge Stephen Mitchell scheduled an Oct. 7 hearing.
Without the reductions, the airline’s cash reserves will dip so low by February that its lenders will likely withdraw the financing that has allowed the company to operate while in bankruptcy. The filing also indicates in a footnote that the airline will now seek $950 million in permanent annual cost reductions from its unions. Before it filed for bankruptcy, the company had sought $800 million a year in cost cuts. Average pilot pay would drop from $155,000 a year to $119,000 a year, while flight attendants’ average salary would drop from $36,975 to $27,701, according to the motion.
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Olympic Airways jetliner diverted to Ireland: airline
ATHENS : An Olympic Airways jetliner bound for New York with 295 passengers aboard was being diverted to Shannon airport in Ireland after an Athens newspaper received warning of a bomb on board, a company spokesman said.
The aircraft, which has a crew of 12, took off from Athens at 1:13 pm (10h13 GMT).
Soon after 4 pm (13h00 GMT) while the aircraft was flyong over the Atlantic, an unidentified called telephoned the Athens newspaper Eleftherotypia saying a bomb was on board and would go off an hour later.
- AFP
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Airline loss projections revised
Global group says they won't be as bad -- except in the U.S.
BLOOMBERG NEWS
The International Air Transport Association is forecasting "significantly" narrower losses for the global airline industry this year as reduced costs and rising demand for air travel help counter higher fuel prices.
IATA, which represents more than 270 airlines worldwide, expects record fuel prices to lead airlines to losses of between $3 billion and $4 billion this year on domestic and international routes, the Montreal-based group said in an e-mailed statement.
The association estimated Aug. 4 that fuel-price increases would cause combined losses of as much as $6 billion this year on international air routes alone.
Air France SA, Europe's biggest carrier, predicted Sept. 2 that a "substantial" rise in fiscal-year profit because of cost reductions as well as hedging contracts protecting it from rising oil prices.
The global outlook belies challenges facing the U.S. airline industry, which by some estimates may almost double its losses this year because of rising jet-fuel prices and competition.
U.S. airlines will lose about $6 billion this year, and "that may be too conservative and require a negative adjustment," said John Heimlich, chief economist of the Air Transport Association, a Washington-based trade group for major carriers.
Carriers in the United States lost $3.6 billion last year.
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Midwest Airlines expands nonstop offerings from KCI
By RANDOLPH HEASTER
The Kansas City Star
Midwest Airlines said it will add seasonal, nonstop flights to Fort Lauderdale, Fla., and New Orleans from Kansas City beginning in December.
Timothy E. Hoeksema, Midwest's chairman and chief executive officer, made the announcement Monday at a news conference at the Kemper Museum of Contemporary Art.
The two new destinations will mean that Midwest will fly nonstop to eight cities from Kansas City International Airport. The seasonal service to Fort Lauderdale and New Orleans will run from Dec. 4 to April 17, Hoeksema said.
As part of the expansion, Midwest also is making its seasonal Kansas City-San Francisco service a permanent flight. Hoeksema said one of Midwest's two flights from Kansas City to Orange County, Calif., will be eliminated Oct. 31 to accommodate the new service.
Once the schedule change is completed, Midwest will have 16 flights daily from KCI, Hoeksema said. The Milwaukee-based airline has 88 area employees.
“We love the Kansas City market,” he said. “We've been in Kansas City since 1989. It's an important base of operations for our airline.”
Fort Lauderdale and New Orleans currently are the most-traveled-to destinations from KCI that do not have nonstop flights.
“We're looking at both leisure and business destinations for the future,” Hoeksema said after the news conference. “Leisure travel is growing a little more than business right now, so it's more on our radar.”
Hoeksema said that if response to the flights is strong, Midwest could make them permanent KCI routes, particularly New Orleans.
Midwest has converted its fleet to Boeing 717s, which are more fuel-efficient than the DC-9s that have been retired, Hoeksema said.
Nevertheless, Midwest, like other airlines, continues to lose money, posting just three profitable quarters in the last 15.
“It's been another tough year for the industry; almost everybody's going to lose money in the third quarter,” Hoeksema said. “This industry is not designed to make money with oil at $40 a barrel, much less $48 a barrel.”
Midwest underwent a financial restructuring last year, and the company's cash position at the end of second quarter was $103 million.
“It's the strongest cash position in our company's history,” Hoeksema said. “We're working to get back to profitability. We're confident we'll be one of the successful airlines going forward.”
City and business officials at the news conference lauded Midwest's decision to add new service.
“Anytime we can get new nonstop service to another destination, we increase the possibility that another major company will decide to do business in Kansas City,” said Bob Marcusse, president of the Kansas City Area Development Council.
In other developments, Midwest said Robert S. Bahlman has been appointed to the new position of executive director of the Kansas City region.
Bahlman will be responsible for developing Midwest's Kansas City operations. The city is considered the airline's second base of operations.
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Airline traffic soars but airlines to lose billions this year: IATA Allan Swift
MONTREAL (CP) - Despite a jump of 19 per cent in world air traffic so far this year, airlines are expected to lose as much as $4 billion US in 2004 due to high fuel costs, says the International Air Transport Association.
IATA director general Giovanni Bisignani said Monday the association had predicted a profit of $3 billion in 2004, the industry's first annual net profit since 2000, but the sudden jump in the price of oil will spoil the gains. Airlines have collectively lost $30 billion since 2001 due to terrorism, wars and international health scares.
IATA, an industry association which has most of the world's airlines as its members, said international passenger traffic for the first eight months of 2004 rose by 18.7 per cent and cargo by 14.2 per cent. In 2003, traffic was down significantly due to the SARS health crisis.
"Unfortunately, the balance sheets of airlines are not so impressive," Bisignani said.
Bisignani admitted there is an over-capacity in aviation partly responsible for the weak results.
But he said government-owned airports and navigation services have not done their part to reduce costs and share the burden of aviation's troubles.
He also called on governments to adopt more liberal policies to allow airline competition and consolidation.
"This industry cannot wait any longer for the basic freedoms that other businesses take for granted," said Bisignani, at a news briefing before an assembly of the International Civil Aviation Organization, a UN body also based in Montreal.
"We are not asking for subsidies, or any special treatment, just to be able to run our business as any other normal business."
Bisignani said he will meet Tuesday with Jean Lapierre, Canada's new transport minister, to tell him this country's airports and air navigation services are abusing their monopoly. IATA has had a public feud with the Toronto Airport Authority over what the industry considers its excessively high fees.
Bisignani said barring crises, the best airlines have profit margins of four to five per cent and aerospace manufacturers have margins of 10 to 12 per cent, while airports and air navigation services earn 20 to 30 per cent profit margins.
"It's not possible that we do the flying and everybody else makes the money."
Bisignani said Toronto's Lester B. Pearson International Airport is among the worst in the world for fees. It has raised landing fees by 208 per cent since 1998, while its debt went from zero to $6 billion to pay for a major expansion.
"The situation is out of control at Pearson."
John Morris, spokesman for Nav Canada, said the not-for-profit company which looks after air navigation in Canada ran deficits in its 2002 and 2003 fiscal years "to ease the burden of the traffic downturn on our customers."
Aviation's tough talker lets fly
Michael Boyd has made a business reputation of being painfully blunt about the airline industry. So what does the consultant see ahead?
By Kelly Yamanouchi
Denver Post Staff Writer
Evergreen - From a tiny two-story building facetiously named the "Moosehaven Business Tower," Michael Boyd has made a reputation as a nationally known aviation consultant with a penchant for voicing biting criticisms of airlines and security officials.
But he makes no apologies.
"We get hired because clients know that we will tell it like it is," he said.
His clients have included small airports, airlines, unions and aircraft manufacturers. Next month, his six-person aviation consulting firm, The Boyd Group, will hold its ninth annual aviation forecast conference, bringing together airline executives and analysts to discuss where the industry is headed.
Boyd's research has covered issues ranging from aviation security to regional jets. He says he has his sights on a new area of study: aviation in China.
The son of an airline pilot and a flight attendant, Boyd started his career as a ramp agent for American Airlines at LaGuardia Airport in New York.
He went on to work as a regional director at Braniff International Airways; as a vice president of planning at Bar Harbor Airlines, a commuter airline in New England; and as a vice president at American International Airways, a startup jet carrier based in Philadelphia.
Then, he decided to get out of the airline industry.
"It's hard work. There's not a lot of money in it," Boyd said. "It's not a growth industry right now."
With his wife Marian, whom he met at Braniff, he decided "we wanted to live in Colorado."
So in 1984 they opened an office in Idaho Springs and founded The Boyd Group. Eventually, they built the office in Evergreen.
His clients include Brazilian aircraft manufacturer Embraer and he has worked recently with Continental, Delta and Northwest airlines.
As a small independent consultancy, "We don't have to worry about being politically correct," Boyd said.
In late 2001 for example, Boyd railed at federal officials about problems with security.
"After all the window dressing that (Transportation Secretary Norman) Mineta and the FAA (Federal Aviation Administration) have placed on us, no one is going to believe what they say ever again," he said then.
He has also openly criticized United Airlines, particularly its low-fare operation Ted, which he has called "a paint job and a press release."
Some who have borne the brunt of his remarks are not happy about his comments, but were not willing to speak on the record. But others say his candidness has its benefits.
"I think Michael Boyd is probably one of the most respected airline experts in the country," said Andrew Hudson, a spokesman for Frontier Airlines. "He calls it like it is, and I think sometimes the truth hurts."
The schedule for Boyd's conference at the Hyatt Regency in downtown Denver next month features a lineup of airline executives including Frontier Airlines chief executive Jeff Potter, AirTran Airways president Robert Fornaro, JetBlue president Dave Barger, airline analyst Ray Neidl and America West chief executive Doug Parker.
The Oct. 10-12 confab includes three forecast sessions: on airline trends and emerging strategies; airport traffic and air service trends; and aircraft demand.
"The aviation industry is on a very different path than it was just a year ago," Boyd says in a summary of events planned.
Those attending will hear hard predictions, Boyd promises, and "political correctness is not allowed into the room."Staff writer Kelly Yamanouchi can be reached at 303-820-1488 or kyamanouchi@denverpost.com .WHAT MIKE BOYD IS SAYING
Three key issues to watch in the aviation industry, according to Evergreen consultant Mike Boyd:UNITED AIRLINES
"There's a severe directional issue at the top. Their biggest problem is they haven't had a clear plan."DENVER INTERNATIONAL AIRPORT
Its biggest challenge could be if Southwest Airlines decides to fly to Colorado Springs. "Colorado Springs fits their template perfectly," Boyd said of the no-frills airline.AIR TRAFFIC CONTROL
"The air traffic control system is a mess," Boyd said, adding that airlines could save billions each year if the system were more efficient.
DETAILS
Michael Boyd
Title: President, The Boyd Group
Age: 56
Born: New York
Personal: Married to Marian Henley Boyd since 1983
Education: Michigan State University, bachelor's degree in social science
Years in Colorado: 20
What they're saying: "He calls it like it is." - Andrew Hudson, Frontier Airlines spokesman
Will the demand for airline pilots take off soon?
By Jay Fitzgerald
Major U.S. airlines are hitting rough financial turbulence due to tough times within the troubled industry.
But job prospects for young commercial pilots actually may be set to take off in coming years - due largely to mandatory retirement of thousands of airline pilots and the growth of smaller regional and corporate carriers, experts say.
``It's definitely picking up,'' saidyle Szary, a flight instructor at East Coast Aero Club at Bedford's Hanscom Air Force Base.
Szary, 23, just landed a co-pilot job with American Eagle, a regional carrier, starting next month.
A recent graduate of Embry-Riddle Aeronautical University in Prescott, Ariz., he might - or might not -part of a trend.
Industry officials stress that the future of the aviation industry - and the commercial pilots' profession in particular - hinges much on the tumultuous events now unfolding within the airline sector.
Delta Airlines is teetering on the brink of bankruptcy, while United Airlines and US Airways are desperately trying to get out of Chapter 11.
If any of those companies go under, thousands of pilots could lose their jobs and flood the market. Pilots at regional airlines that have strong ties to the major airlines could find themselves jobless, too.
``No one knows what the industry is going to look like in two to three years,'' said Lenni Lee, manager of career services at Embry-Riddle.
But Lee and Phil Poynor, chairman of the aviation division at Daniel Webster College in Nashua, N.H., cautiously say that the trend points to increased pilot hiring over the next two to three years.
Poyner said regional carriers and corporate-service firms hiredfive flight instructors from his college in recent weeks.
Small regional carriers, such as American Eagle and Express Jet, are now flexing their muscles on so-called ``point-to-point'' routes.
Point-to-point routes - eliminating stopovers at hub airports - use smaller passenger jets that seat 50 to 70 passengers.
``If carriers (continue to) go with smaller airplanes, they're going to need more pilots,'' Poynor said.
The plus for young pilots is that these jobs offer valuable experience flying commercial twin-engine jets made by companies such as Bombardier Inc. of Montreal.
The negative is these pilots get paid far less than their major-airline counterparts, who receive six-figure salaries for flying larger and more complex jets on major routes.
Salaries for first-year regional-carrier pilots start as low as $20,000, officials say.
But the young pilots get to move up the ranks, either to major airlines or to other fields, such as cargo shipping or lucrative corporate services.
Helping younger pilots is the mandatory 60-year-old retirement age for the nation's more than 60,000 pilots at major airlines.
Thousands of baby boomer pilots are expected to retire in the near future, allowing younger fliers to move up the ladder, officials say.
Also helping younger pilots: older fliersfurloughed by major carriers usually don't want to give up their seniority in case they're called back to work. So they don't touch the lower-paying regional jobs during furloughs.
As a result, said Becky Dean, vice president at Atlanta's Air Inc., a pilot-consulting firm, about 6,000 younger pilots have been hired this year - despite as many as 9,000 major-airline pilots grounded due to furloughs.
Even if one of the major airlines went out of business, some predict, many of its pilots would opt to leave the profession rather than take lower-paying jobs.
Drew Steketee, president of National Be A Pilot, a nonprofit foundation for pilots, said all air carriers - whether big airlines, smaller regionals or cargo carriers - took a hit after the 9/11 terrorists attacks three years ago.
But business is almost back to its pre-9/11 levels, helped by an improving economy.
Air traffic is expected to increase in five to seven years, Steketee noted, driven by a global economy and increased demand for corporate, law enforcement and other air services.
Mark Holzwarth, owner of East Coast Aero Club in Bedford, said the number of students seeking licenses has been steady over the past two years, at about 200 to 300 students per year.
But Holzwarth said he is anticipating an increase in business.
``If you train when it's bleak, you're trained when you're needed,'' he said.
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Airline: pay cut is only hope
By Steve Halvonik
US Airways says it will go out of business early next year if a federal judge does not impose a temporary 23 percent pay cut on the airline's 28,000 workers.
The carrier laid out the scenario in court documents filed Friday night with U.S. Bankruptcy Court for the Eastern District of Virginia. US Airways asked Judge Stephen S. Mitchell to hear its case Oct. 7. The pay cut would extend until the end of March.
For the second time in two years, US Airways filed for bankruptcy protection Sept. 12, after workers failed to accept $800 million in wage and benefit cuts. US Airways hopes to use court protection to get the labor agreements its executives say it needs to complete a $1.5 billion makeover of the nation's seventh-largest airline into a profitable, low-cost carrier.
A 23 percent wage reduction would save $38 million a month, according to court documents. Without the rollback, US Airways faces "the real threat of liquidation" by February, documents said.
"I think their financial hardships are real," said Marick Masters, a University of Pittsburgh business professor who is following the airline's labor relations. "There are hard decisions that have to be made, and they're looking for labor to provide them enough cash to survive over the next six months."
Officials of two key unions offered divergent views on the carrier's plea.
The Air Line Pilots Association believes the airline is suffering a cash crunch, and will meet with company representatives beginning Monday in Pittsburgh to negotiate a long-term concession agreement, said spokesman Jack Stephan.
"With no long-term solution, there is no US Airways," Stephan said.
Teddy Xidas, president of Association of Flight Attendants Local 40 in Pittsburgh, said the airline wanted workers to provide the bankruptcy reorganization financing that other lenders would not.
"At 38 million a month, interest-free, I consider us DIP (debtor-in-possession) financiers, and I want to know where is our return on investment?" Xidas said.
A spokesman for the mechanics' union declined to comment.
In its bankruptcy filing, US Airways said it was strapped for operating cash because most of its tangible assets are pledged as collateral for $717 million in bank loans guaranteed by the U.S. Air Transportation Stabilization Board. US Airways must maintain certain cash levels to avoid defaulting on the ATSB-backed loans.
US Airways said it was negotiating to continue drawing on the ATSB loans through January and was optimistic that an agreement could be reached.
To maintain its mandated cash levels into next year, the carrier said it needed an additional $200 million in cash over the next six months. Slashing labor costs is the only available option to get the extra money, the airline said.
US Airways officials said the carrier must make $260 million in aircraft debt and lease payments in January and February.
Spending cash collateral without cost reduction is just "burning the furniture," US Airways said.
The airline said it also is implementing $5 million a month in management cost reductions. It lists under those cuts $1.1 million in management benefits and $2 million in capital spending, such as the purchase of regional jets, a cornerstone to US Airways' planned transformation into a low-cost carrier.
Even with those savings, the airline still could fail if it loses more passengers than expected, or if fuel prices remain stubbornly high.
According to court documents, hurricanes Ivan and Frances cost US Airways $20 million in lost revenue. The airline said it expects passenger revenue to decline by $100 million through the first three months of next year as skittish travelers shun US Airways and book flights on competing carriers.
US Airways said the temporary labor cuts would help it survive until April, when passenger traffic starts to pick up again -- unless fuel prices go up substantially. The airline said it had based its six-month financial projections on the assumption that fuel prices would average about $44 a barrel through April.
Prices have ranged from $37.50 to $48 a barrel over the past three months, according to the airline, which said that every $1 increase over its projection adds up to an additional $2 million a month.
If US Airways waited until January to cut costs, it would need to slash employee wages by 90 percent, or $150 million a month.
"As a practical matter, that would not be feasible," documents said.
Besides pay cuts, the company also is seeking to reduce pension payments, modify the minimum number of aircraft it must fly and permit it to outsource maintenance on all Airbus narrow-bodies and wide-bodied aircraft. US Airways had moved this work from Pittsburgh to Alabama, and the International Association of Machinists is challenging that action.
The 23-percent pay cut is higher than what the company had been demanding from most labor groups, documents noted. But even with the reduction, US Airways' salaries would be competitive with those at the low-cost carriers it seeks to emulate, such as America West and JetBlue.
The reduction would drop annual wages to an average of $46,000 for all employees, including $119,000 for pilots and $27,700 for flight attendants, US Airways said.
Chief Executive Officer Bruce Lakefield said the company still hoped to negotiate new cost-saving contracts with its four major unions.
"We have had constructive discussions this past week with all of our labor groups and we will continue to seek consensual agreements with our unions, pending the court's ruling on this motion," Lakefield said.
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Precautions you should take if bags are lost
By Marshall Loeb
CBS MarketWatch
So the unexpected has happened: You've arrived at your destination only to find that your luggage has not.
Certain actions can make a big difference in how quickly your bag is recovered or in what kind of reimbursement you'll receive if it's lost.
• Report the problem to your airline before you leave the airport, advises the Transportation Department's Aviation Consumer Protection Division. Insist on filling out a missing-luggage form -- even if the airline officials can immediately find your baggage or assure you it will arrive on the next flight. Describe the luggage and its contents as fully and accurately as possible. Be sure to get a copy of the form.
• While at the airline desk, ask for the baggage to be delivered to you, without charge, once it is found. Most airlines will do this.
• If you haven't packed a carry-on with toiletries and other immediate necessities, ask to be reimbursed for the things you'll need within the first 24 hours. Some airlines can provide you with toothpaste, brushes, razors and other items, while other airlines will give you a cash advance.
• Give the airline representative your name and contact information. Write down his or her name and the phone number to call about lost luggage. To avoid frustrating yourself and the airline, ask when and how often to call.
• Check your airline's reimbursement policy. Luggage on domestic flights can be reimbursed up to $2,500 per passenger. For international flights, the limit is $9.07 per pound -- another reason you should keep a copy of the baggage claim tickets that list the bags you checked and their weights. Additionally, airlines may have varying policies on items that are and are not covered.
For a reimbursement claim, make a full list of items that were in the baggage. Be specific as to brand, make, model and value. Collect receipts if you still have them. Supplement your claim with statements from people who know the value of your items, such as jewelers or tailors.
Last major airline matches fare boost
By Bobby White
Knight Ridder Newspapers
FORT WORTH, Texas — Airlines apparently pushed through a fare increase yesterday after months of unsuccessful attempts to raise prices, helping to offset record-high jet-fuel costs.
Continental Airlines became the last of the major hub-and-spoke carriers to match an increase launched Wednesday by American Airlines. Fares are $5 higher for one-way trips and $10 higher for round trips.
Tom Parsons, who runs the Bestfares.com Web site and magazine, said he wouldn't be surprised if airlines tried to raise prices again next week.
"The floodgates may have just opened," he said.
The airlines have tried several times to raise fares, but rescinded the increases after at least one major competitor — often, Northwest Airlines — didn't follow suit.
This time, Northwest went along with the increase.
"Traditionally, it was Northwest which reined in efforts," Parsons said. "Not this time. Carriers are probably saying, 'Hey guys, we just got the green light.' "
Discounters such as Southwest Airlines didn't match the increase. That means markets served heavily by discounters, such as Los Angeles, won't feel the price increase as much, Parsons said. But he expected the price increases to stay in effect elsewhere.
In a recent financial update, American said its unit revenues for the third quarter will be down as much as 3.5 percent from the same period last year. Conversely, unit costs for the quarter are expected to rise compared with last year. The reason for the cost increase was fuel prices.
The company reported that rising fuel costs actually cost it an additional $1 billion in 2004.
The third quarter typically is marked by uplifting results, given July and August travel. But this year, Florida, a popular destination for travelers, was pounded by hurricanes.
Airline to seek court-imposed cuts
US Airways asking 23% reduction in union workers' pay
The Associated Press
ARLINGTON US Airways Chief Executive Bruce Lakefield said yesterday that the airline would, as expected, ask a bankruptcy judge to impose temporary pay cuts on its union workers to conserve cash during the slow fall travel season.
The filing had not occurred as of late yesterday afternoon, but Lakefield told employees in a recorded message that the filing would be made yesterday. Bankruptcy courts typically allow parties to file motions electronically after hours.
The company is seeking 23 percent pay cuts from all its union workers, according to union leaders who received the request. The airline has refused to discuss the details of its request.
Lakefield told employees that "I truly regret that the company's financial position has put us in this position," but said the company desperately needs to conserve cash in the coming months.Click here to Find Out Your IQ!
The airline has not asked its 2,300 executives and managers for the same 23 percent pay cut, Knight Ridder Newspapers reported.
US Airways officials said most nonunion employees already earn the same or less than their counterparts at the low-cost carriers that US Airways is trying to emulate.
Still, many US Airways' nonunion employees could be asked to work for lower salaries or have their benefits cut, but details of that plan aren't available yet, Senior Vice President Chris Chiames said.
"We've set management targets consistent with what we've asked from the unions," he said.
If US Airways' cash balance falls below certain levels in September and October, the company could lose the financing that has allowed it to operate during bankruptcy.
The bankruptcy court has the power to impose pay cuts and set aside the unions' labor deals with the Virginia-based airline. A hearing will be scheduled on the issue, possibly on an expedited basis. The pilots' union already has said it will oppose the company's effort.
Lakefield said the airline plans to continue negotiations with the unions on temporary concessions as well as permanent agreements. Talks are scheduled Monday with the Air Line Pilots Association and the Communications Workers of America, which represents reservations agents and other passenger service employees.
About 84 percent of US Airways employees are covered under labor agreements, according to the company's annual report. The company employs 28,000 in its mainline operations and 34,000 overall.
The company filed for bankruptcy Sept. 12, its second filing in two years, after it failed to extract $800 million in annual concessions from the unions that it said it needed to stay afloat.
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SIA cabin crew take to the stage to raise $600,000 for charity
SINGAPORE : Singapore Airlines' cabin crew took to the stage on Friday night to sing and dance to raise funds amounting to the tune of $600,000 for charity.
The 70-minute musical tells the story of 3 girls from India, Japan and Singapore, who fight the odds to pursue their dream becoming a Singapore girl.
Forty cast and production crew members were "grounded" for a month, so they could rehearse for the musical, produced and directed by professionals.
And it looked like they all had fun, including their audience of corporate sponsors who paid between $5,000 to $30,000 for a table.
The money goes through the Community Chest to the Asian Women's Welfare Association and Chao Yang School. – CNA
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Judge sides with airline's unions
A federal bankruptcy judge ruled against United Airlines on Friday, siding with unions that said the company submitted unsubstantiated claims about how employees would be affected if their pension programs were terminated.
While it won't halt United's bid to shed its pension obligations, the ruling suggests that parent company UAL Corp. may have a rough time winning court approval to do so.
Judge Eugene Wedoff granted an emergency motion filed by United's machinists and flight attendants.
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Airline resumes talks
By Steve Halvonik
TRIBUNE-REVIEW
US Airways' unions are resuming negotiations over $800 million in wage and benefit givebacks after the company asked a federal judge on Friday to impose 23-percent salary cuts on 28,000 workers.
The Air Line Pilots Association said it will return to the bargaining table this weekend. The union representing gate and reservations agents said it will negotiate three days next week.
Spokesman for the flight attendants and mechanics unions said they will meet with company officials after completing responses to the court filing.
Marick Masters, a University of Pittsburgh business professor who is following US Airways' labor relations, predicts that most unions will strike deals soon.
"There is a high probability of their reaching concessions,'' Masters said.
The only holdout could be the mechanics union, which has put up the most resistance to more givebacks, Masters said.
U.S. Airways, the nation's seventh-largest airline, asked U.S. Bankruptcy Judge Stephen S. Mitchell to impose temporary 23 percent pay cuts. The company, which filed for Chapter 11 protection for a second time on Sept. 12, said it needs to preserve cash during the slower fall and winter travel seasons.
US Airways is using Chapter 11 reorganization to reduce its costs by $1.5 billion and to try to transform itself into a profitable, low-cost carrier. The plan calls for workers to provide more than half of the cost savings. Organized labor has resisted more concessions after having returned $1.2 billion during the airline's first Chapter 11 bankruptcy two years ago.
Bankruptcy experts said it could take days or weeks for Mitchell to hear the company's request.
US Airways executives reminded union leaders that the 23 percent pay cut can be avoided if new labor agreements are reached before the judge has ruled.
Masters said the company's strategy of asking for emergency pay cuts is forcing the unions to act swiftly.
The pilots leaders voted 12-0 on Wednesday to resume negotiations. Master Executive Council Chairman Bill Pollock said the unanimous vote showed the union is finally united.
A new campaign to force four Pennsylvania representatives off the council board could indicate that the in-fighting is far from over.
Lance Svendsen, an Air Line Pilots Association Council 90 official in Charlotte, N.C., has launched a drive to remove the Pittsburgh and Philadelphia representatives from the executive council.
Svendsen said he will demand the resignations of Fred Freshwater and John Brookman, of Pittsburgh and Daniel Von Bargen and John Crocker, both of Philadelphia, at a meeting next week in Charlotte.
The four state reps vetoed a company proposal on Labor Day. US Airways filed for Chapter 11 bankruptcy five days later.
Some angry pilots blame the Pennsylvania representatives for the company's action. However, airline Chief Executive Bruce Lakefield seemed to undercut that contention earlier this week when he said the company might have sought bankruptcy protection even if pilots had accepted the company's Labor Day offer.
In an Internet posting for pilots, Svendsen said the Pennsylvania Four "have misled this pilot group using e-mails, phone calls, resolutions and council letters. ... Their reckless and careless agenda ... has already cost this pilot group millions of dollars in lost income and benefits.''
Freshwater said he won't resign, but has informed pilots he won't seek re-election in February.
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Keeping a little airline under wing
Carrier-in-a-carrier idea still gets lots of mileage with some big players
By ERIC TORBENSON / The Dallas Morning News
LONDON – A series of high-profile washouts – including Continental Lite, Shuttle by United and US Airways' MetroJet – gave the "carrier-within-a-carrier" concept a bad name.
But the world's major airlines still see value in trying to build their own separate carriers to face the growing onslaught of low-cost rivals, executives at a global aviation conference here said Wednesday.
Traditional carriers continue to turn to the concept because they can't risk losing passengers, officials said. So they create new operating units with more seats per plane or cheaper labor rates – and sometimes both.
Delta Air Lines Inc. surprised many industry experts in its reorganization announcement earlier this month by breathing new life into its Song unit, which was widely thought to be on the chopping block.
One reason that Delta continues to like Song is it can serve as a testing ground for new ideas.
"With a company our size, it takes six to seven years to completely change the culture," said John Selvaggio, president of Song, speaking at the World Low Cost Airline Congress.
"We want to make Song an incubator for that change," he said.
Delta chief executive Gerald Grinstein was a Song doubter when he took over the job in late 2003, but he was persuaded that the concept has long-term merits.
In the United States, both Delta's Song and United Airlines Inc.'s Ted have performed better than expected, according to their parents. Neither breaks out the results.
Critics of the carrier-within-a-carrier concept say it dilutes the brand of the parent by confusing travelers and doesn't really save much money over the long run.
Fort Worth-based American Airlines Inc. has said it's studied the concept, but there is little executive support for the idea.
Chairman and chief executive Gerard Arpey likes to say American wanted to fix its "700-plane problem" – referring to its whole fleet not just adjust a smaller part of its operations.
Although Song planes offer only one class of service and operate more hours each day, they're still flown by Delta pilots at regular union wages that remain the highest in the world.
Still, Mr. Selvaggio points to Song's growing list of awards for customer service as evidence that it's the strongest of the new batch of low-cost units of traditional carriers.
The strategy is spreading quickly worldwide. British Midland Airways intends to expand its Bmibaby subsidiary, launched in January 2002.
"Airlines like this have a tendency to over-promise and under-deliver," Bmibaby managing director Tony Davis said at the conference. "We've tried to under-promise and over-deliver on it."
Australia's Qantas Group recently started Jetstar to help fight Virgin Blue, the low-cost sister airline of Virgin Atlantic. With 17 Boeing 717s, Jetstar has boosted off-peak travel to some Australian markets by 40 percent or more, said Alan Joyce, Jetstar's chief executive.
"We've allowed a lot of the tourist operations to remain open even though it's off-season," he said, and Jetstar's influence will grow because of its recent order for 23 Airbus planes.
In Thailand, Thai Airways started Nok Air to counter a low-cost threat OnetwoGo, which flies large jets on relatively short trips and charges a low flat fare – often less than one U.S. dollar.
Low-cost carriers lose a crucial cost-cutting tool in Thailand because of comparatively little Internet use.
So Nok customers book on the phone and pay cash for tickets at 7-Eleven stores or through automated teller machines.
"We think that it's not going to be all about price," said Patee Sarasin, Nok's chief executive. "We have to win the hearts of Thai travelers."
One lesson for the potential of the carrier-within-a-carrier concept comes from British Airways.
Alarmed by the rapid growth of low-fare rivals such as Ryanair and EasyJet, British Airways in 1998 started its own carrier-within-a-carrier, Go.
However, British Airways spun off Go in 2001, and EasyJet bought it a year later. So a carrier launched to help its parent compete against low-fare competitors wound up being owned by one.
Struggling Swiss airline secures loan
THE ASSOCIATED PRESS
BASEL, Switzerland -- Switzerland's struggling national airline Friday announced it had agreed to a 325 million Swiss franc ($258 million) loan from an international banking syndicate.
The deal still needs the consent of unnamed "third parties" before it can be finalized and the company can draw on the credit, Swiss International Air lines said.
Talks were steered by Halifax Bank of Scotland and Barclays Capital, the airline said.
Under the deal, Halifax Bank of Scotland is set to provide 100 million francs and Barclays Capital 55 million francs.
Credit Suisse and UBS will provide 75 million francs each, while the Zurich Cantonal Bank's contribution is set at 20 million francs. All three Swiss-based banks are major shareholders in the airline.
Swiss has suffered massive financial problems since it was created out of the defunct Swissair in March 2002.
The company hopes to reduce annual costs by 1.6 billion francs and has slashed the number of full-time staff by more than 3,000 since the end of 2002, to the current 7,252. It has cut its fleet from 132 to 85 aircraft.
Last month, Swiss reported its first-ever quarterly profit in its two-year history - 45 million francs (then $35.6 million) for the April-June period. The figure was boosted by a legal settlement in France, which injected 68 million francs into its accounts.
The airline's announcement Friday came after markets had closed in Switzerland.
Airline will ask to hire outside help if needed
STAN CHOE, KERRY HALL AND ADAM BELL
Staff Writers
As US Airways prepares to ask a bankruptcy judge today to temporarily slash employees' pay, it also will seek permission to hire outside workers in the event of labor disruptions.
In letters sent to two unions Wednesday, the airline said it wants that ability to protect itself from potential work slowdowns or disruptions in service. The airline said it also would want to hire outside help if it sees more workers quitting than usual.
US Airways spokesman David Castelveter said the company does not anticipate any problems.
Labor and legal experts say the judge handling US Airways' case likely would grant the airline's requests unless labor and management can first negotiate their own terms.
The company plans to ask Judge Stephen Mitchell in the Alexandria, Va., court to impose temporary 23 percent pay cuts for all major union workers. The airline has not yet said how much it will cut management's pay.
Workers and union leaders on Thursday lashed out at the company's request.
"A 23 percent pay cut is hideous," said Mike Flores, president of the Charlotte flight attendants' local. "People couldn't afford to pay their bills. It would be devastating to morale."
A flight attendant with 14 years of experience would see his salary drop to $28,499 from $36,945, said David Kameras, spokesman for Association of Flight Attendants.
At least one worker said she'd quit before taking such a sizeable punch.
"I will not work for 23 percent less," said Charlotte-based flight attendant Holley Greene, 45, a 20-year veteran with the airline.
Greene has spent the past year preparing; she earned her real estate broker's license and already sells residential real estate on her days off.
US Airways, Charlotte's dominant carrier, is trying to wrest concessions from its workers for the third time in two years. On Wednesday, it gave unions two days to accept wage, pension and work-rule concessions.
Experts aren't anticipating a massive exodus of workers.
"History shows they are doomed to nail their flag to the mast and go down with the ship," said George Hopkins, a history professor at Western Illinois University, who has written three books about pilots unions.
But work slowdowns have occurred regularly in airline disputes. In 2001, United Air Lines accused its mechanics of writing excessive numbers of repair orders to delay flights and gain bargaining advantage, a charge the mechanics union denied. In 2000, Delta Air Lines said it was forced to cancel hundreds of flights when pilots refused to sign up for voluntary overtime as part of a contract battle.
US Airways employs 5,700 of its 28,000 workers in Charlotte, home of its busiest hub where it carries nearly 90 percent of passengers. The company filed for Chapter 11 bankruptcy protection last week, saying it was losing customers to low-cost carriers.
Cutting labor costs is an essential piece of US Airways' turnaround plan. To compete with carriers such as JetBlue and America West, US Airways wants to pay its workers comparable wages, spurring the request for the 23 percent cuts.
Such a cut would knock a top-scale customer service agent down to $15.63 an hour from $20.30. Many of US Airways' customer service agents earn top scale after younger workers with less seniority were laid off in recent years.
Without agreements by today, US Airways also said it would ask the judge for authority to stop making contributions to some employee retirement plans and cut its fleet below the level agreed to with its unions.
Any reductions to pay would not happen immediately. If the airline files its request today, a judge would schedule a hearing, which unions believe could happen within two weeks. The cuts would also only be temporary as the airline continues to negotiate permanent reductions.
On Thursday, the airline met with only the union representing customer service and gate agents, union leaders said.
The Communications Workers of America agreed to three days of negotiations next week, said union spokeswoman Candice Johnson. The CWA has been trying to push some of its own cost-cutting proposals, such as buyouts for older workers.
Bob Lemon, a customer service agent and 26-year US Airways veteran, is hoping for a buyout. At 51, Lemon was planning to retire at 55 to try a new career in city planning. But a 23 percent pay cut, he said, would make him want to leave earlier.
The Association of Flight Attendants' negotiating committee finds US Airways' proposal excessive but still wants to discuss it with the company before a hearing is held in bankruptcy court, said Kameras, the union spokesman.
Flight attendant Patty Tobi, 45, of Waxhaw said she prays daily for the airline's financial health. If the cuts go through she figures she'd have to sell her home or find a roommate. "I'm a little old for a roommate," she said.
Of the airline's four major unions, the Air Line Pilots Association appears closest to a longer-term deal, as union leaders this week directed negotiators to secure an agreement members could vote on.
"While ALPA plans to oppose the motion in court, ALPA remains committed to reaching a permanent solution with management that will return the airline to sustainable profitability through engaging in earnest discussions with management on a comprehensive, consensual agreement," said Capt. Jack Stephan, spokesman for the US Airways ALPA Pilots.
The International Association of Machinists, which represents mechanics and fleet-service workers, has no talks scheduled with the company. The union has asked for financial numbers to prove the airline needs such steep cuts.
Airline's Requests
• 23 percent pay reduction for major unions.
• Eliminate some company contributions to workers' retirement plans.
• The ability to cut its fleet size, which could result in furloughs.
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Airline passengers face dual strike disruption
By Paul Marston, Transport Correspondent
Thousands of air passengers face serious delays today because of a strike by fuel workers at Heathrow.
The 48-hour stoppage, which was due to begin at 4.30 this morning, is likely to disrupt the schedules of more than 30 overseas airlines and could have knock-on effects on British carriers.
The dispute involves 40 airport tanker drivers employed by one of Heathrow's largest fuel suppliers, AFS. The drivers, members of the Transport and General Workers Union, unanimously rejected a revised pay offer yesterday. Talks aimed at averting a separate strike by baggage handlers at Gatwick tomorrow also failed to produce a settlement.
As the Heathrow strike neared, airlines scrambled to reorganise their refuelling arrangements. Last night, both British Airways and Virgin said they expected to avoid cancellations, but officials warned that refuelling delays for other carriers could hold up flights that had refuelled normally.
BA also announced plans to hire 200 more customer service staff at Heathrow to prevent the kind of shortages that led to widespread cancellations last month.
BMI British Midland, Heathrow's second biggest user, said it did not expect to be affected by the fuel dispute because it does not use AFS.
The worst impact is expected to fall on American, Far Eastern and other long-haul carriers, which may have to divert to refuel at other airports. Transatlantic operators may land at Shannon, while Asian and African airlines may stop at Paris, extending journey times by two hours or more.
The TGWU said the rejection of AFS's latest offer reflected resentment at changes in the pay structure and the ending of final-salary pensions. It estimated some workers were more than £9,000 a year worse off.
At Gatwick, 600 baggage and maintenance staff - also members of the T&G - are threatening to walk out for 24 hours from 3am tomorrow in a dispute over the suspension of a shop steward.
The action will cripple the ground handling agent Servisair, which serves more than a dozen airlines.
Ryanair has banned passengers from bringing hold luggage. Easyjet said it was preparing contingency plans but urged customers not to bring hold luggage.
British Airways has its own ground staff at Gatwick, and will operate a normal timetable. Thomas Cook and MyTravel said that if the strike went ahead they would bring in their own baggage handlers.
Alitalia Chief Says Airline Will Survive
Associated Press
ROME - Alitalia will survive barring unexpected difficulties, the financially shaky airline's CEO said Thursday, indicating optimism over the possibility of forging a domestic partnership as part of strategy to save the state-run carrier.
Alitalia "can make it" because the "company will do its all," chairman and chief executive Giancarlo Cimoli said at an Italian Senate hearing. "I am also convinced that ... we can do it if we're not unlucky and nothing difficult happens."
Alitalia has been battered by competition from new discount carriers and consolidation among established airlines.
On Monday, the airline formally approved a four-year plan which includes 3,700 layoffs as part of restructuring aimed at averting collapse. Earlier this month, the airline had reached accords with labor unions.
The company is still working to win union backing for a plan to spin off the company's ground-service operations from its flight business, and Cimoli said he hoped to win that support within a week.
Cimoli also sounded optimistic about reaching a deal with one of Italy's few domestic carriers. "It is possible that we can enter in an alliance, even in the very short term," he said, indicating three possibilities: Air One, Volare and Meridiana.
Cimoli also said Alitalia's alliance with Air France would continue.
The restructuring plan permits Alitalia to access a 400 million euros($488 million) loan approved by the Italian government and the European Union.
Airline parent seeks new credit line because of sluggish finances
American Airlines is reducing some flights and considering charging for onboard food amid increasing fuel prices and intensifying competition from low-cost carriers, the company's chairman and chief executive said Thursday.
Gerard Arpey's comments to financial analysts in New York came one day after American's parent, AMR Corp., said it was discussing refinancing an $834 million line of credit. AMR said in a filing with the Securities and Exchange Commission that it needs additional relief since August revenues fell short of expectations.
The disclosure further worried analysts already uncertain about American's outlook.
J.P. Morgan analyst Jamie Baker predicted that AMR would lose $1.70 per share -- about $270 million -- in the third quarter, instead of the 30 cents per share that he had previously forecast. Until Friday, Baker had been more optimistic than his counterparts -- the consensus prediction of 10 analysts surveyed by Thomson First Call was a third-quarter loss of 50 cents per share.
Similar concerns prompted Merrill Lynch analyst Michael Linenberg to lower his ratings on Continental, Delta and Air Tran airlines, citing concern about overcapacity on their East Coast routes. He maintained "buy" ratings on Southwest Airlines Co. and JetBlue Airways, saying that the two low-cost carriers could capitalize on the problems of older carriers.
AMR shares fell 68 cents, or nearly 8 percent, to close at $8.06 Thursday on the New York Stock Exchange.
Finances for AMR, which avoided bankruptcy last spring and reduced its annual costs by $4 billion, remain fragile.
Arpey said Thursday that American Airlines is making cautious plans for 2005, including reducing some midweek and Saturday night flights at its Miami and Dallas hubs respectively. He said American is considering new sources of revenue, including charging for onboard food and renting portable entertainment systems.
American, in response to high fuel prices, raised its fares $5 each way on Wednesday in another attempt to pass costs along to travelers. But major carriers' earlier attempts to raise fares have failed. Other carriers are still considering matching the latest increase.
In its SEC filing Wednesday, Fort Worth-based American also said that its total debt load exceeds $22 billion, including aircraft leases, and it must increase profit to service that debt.
AMR's cash balance of $3.6 billion meets the minimum required under its existing credit line, the airline said. But its financial results won't meet a provision in its loan agreement regarding the ratio of its pretax earnings to debt payments.
AMR now wants to refinance or replace the loan.
In the filing, the company also said September revenue will be hurt even more by the series of strong storms that hit Florida and the Gulf Coast.
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Fog forces cancellation of airplane flights in Fargo
Associated Press
Dense fog led to the cancellation of airplane flights out of Fargo early today, forcing airlines to use buses or limousines to shuttle passengers to Minneapolis to make their connections.
Airport director Shawn Dobberstein said about half a dozen flights were canceled early today. Some also were canceled Wednesday night.
Mike Jandro and Mark Walker, who were headed to a softball tournament in Las Vegas, were among those who planned to take the bus to Minneapolis after their flight was canceled. It would cut into some recreational time, Walker said.
"It would be more fun if it was work, but when it's fun, you miss that time," he said.
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'Ample' flier sues airline for saying he needed 2 seats
- Henry K. Lee, Chronicle Staff Writer
An Oakland man who describes himself as being of "ample proportion" is suing Southwest Airlines, accusing the carrier of humiliating him by asking him to buy a second seat.
Lionel Bea, 40, said in a lawsuit filed in Alameda County Superior Court that a Southwest employee asked him whether he could fit in one seat before boarding a flight from Oakland to Los Angeles on Sept. 28. When Bea, a Southwest frequent flier, said, "Yes, is there a problem?" the employee said he would have to sell him another seat because of company policy "regarding passengers too large to fit in one seat," according to the lawsuit filed earlier this month.
Bea, a self-employed promoter of entertainment, sports and business events, objected to having to buy a second seat and boarded his flight. The suit said the employee also sent Bea to the wrong gate, causing him to be late for a business meeting.
Later that day in Los Angeles, as Bea prepared to fly back to Oakland, another Southwest employee said an entry in the computer showed that he would have to buy a second seat.
Bea asked for a supervisor, who "refused to let plaintiff fly without purchasing a second seat. She was insulting and rude," the suit said.
Bea decided to fly back to Oakland on a United Airlines flight instead. "Plaintiff had no problem fitting in one seat," the suit said.
Southwest spokesman Ed Stewart said Wednesday, "I'm not aware of a situation like that occurring, because our people make sure that they treat people with dignity and respect."
Whitney Eichinger, a Southwest spokeswoman, said the airline's policy is designed with safety in mind and ensures that passengers of all sizes are comfortable.
Those deemed too large to fit in one seat can buy a second at a "deeply discounted rate," Eichinger said. The money is refunded if the plane ultimately takes off with empty seats.
Bea's attorney, Vernon Goins of Oakland, said Wednesday, "I think the real issue is uniformity, just having a clear-cut policy as it relates to how you treat people."
The attorney said Southwest employees arbitrarily look at large passengers in deciding whether they need to buy a second seat.
"It's unfair, and it's subjective," Goins said. "What it does is it creates these types of circumstances, where you have people who are humiliated."
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US goes ahead with system to screen airline passengers
AFP , WASHINGTON
Anxious to avoid another Sept. 11, the US government has moved toward creating a controversial airline passenger screening system designed to filter out potential terrorists and prevent them from boarding planes.
The Transportation Security Administration notified carriers on Tuesday that it intended to proceed with a test of its Secure Flight program sometime in late November or early December and released a draft order compelling carriers to deliver personal information on their passengers.
"This is an important moment in aviation security," Assistant Secretary of Homeland Security Rear Admiral David Stone said in a statement. "We are advancing a vital tool to combat terrorism and checking off another recommendation from the 9-11 Commission."
The proposed order directs domestic US airlines to provide data on all their passengers who flew last June. That would include full names, addresses, telephone numbers and other information usually requested when reservations are made.
If the test goes ahead as expected, the data will be checked against a giant database compiled by the Department of Homeland Security, an operation that, according to a department document, will allow to winnow out "individuals known or reasonably suspected to be or have been engaged in conduct, in preparation for, in aid of, or related to terrorism."
The government will also be able to make use of databases compiled by banks, mortgage and credit rating agencies that contain extensive information on transactions by individuals and their financial situation, officials said.
The release of the draft initiates a 30-day consultative period, during which the airlines will be able to provide their comments and suggestions.
But the administration made clear the final order will be issued in late October, to be followed by a test of the entire system in November.
The Secure Flight program is expected to be become fully and permanently operational early next year and replace watch lists used by individual carriers.
Stone said the advance posting of the order was testimony to the government's "commitment to maintaining an open and transparent environment for the development of this important security tool."
The administration also assured the airlines it intended to stick to the strictest privacy protection standards.
The American Civil Liberties Union urged Congress late last month to use extreme caution in expanding passenger profiling systems, saying they could unnecessarily intrude upon the privacy of Americans while doing little to make the skies safer.
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Airline admits security slip-up in bomb scare
Virgin Blue today admitted a baggage handler failed to follow proper procedure by taking an unlit firebomb found aboard a passenger plane at Sydney airport into the domestic terminal.
Baggage-handlers at Sydney airport discovered the device in the cargo hold of a Virgin Blue 737-300 jet on Monday morning.
An initial NSW police report concluded it contained thermite, a chemical used in grenades. It was found wrapped in a cardboard toilet roll tube with a firework sparkler attached as a 30-second fuse.
Virgin's head of commercial operations David Huttner said the baggage handler who found the device had not followed proper procedure.
"The guy who informed the Australian Protective Service took the device to them," Mr Huttner said. "While he was trying to do the right thing, he didn't follow procedures properly."
Mr Huttner rejected reports that the airline delayed informing police for more than an hour after the device was found. "We informed the Australian Protective Service within 15 minutes," he said.
He said the airline believed an airport worker with an agenda was responsible and probably meant for the device to be found.
"We believe it was an airport worker with an agenda," Mr Huttner said. "It was not something that goes boom, it was something that burns which means somebody had to be there to light it.
"It was clearly placed there by somebody who had access to the airfield because it didn't go through checked baggage.
"It wasn't taken on by a passenger because it was in the cargo hold and we don't know if it flew from Maroochydore to Sydney or if it was placed on the plane in Sydney.
"We believe it was placed in a way that it would be found and draw the attention that it did today. Somebody is trying to make a show out of this whole thing in our view."
Mr Huttner said the aircraft was allowed to fly back to Queensland because authorities had made no request for the aircraft to be held until it was searched.
Unions have been critical of the government over airport security in the lead-up to next month's federal election.
The Transport Workers Union claimed Virgin Blue had not trained its workers to cope with an emergency like this week's incident.
TWU airport organiser Glenn Nightingale said Virgin Blue had not trained its workers in security procedures.
"They're not trained. They're not aware," Mr Nightingale told radio 2UE. "They wouldn't know what a bomb, or a typical home-made bomb or a professional bomb looks like. And they're not aware of it. They need to be made aware through proper training."
A former United States counter-terrorist official said the thermite device ranked about four on a danger scale of 10.
Larry Johnson, who worked for the Central Intelligence Agency and as deputy director of the US State Department office of counter-terrorism, said the description of the device indicated it would be very difficult for it to self-ignite in an aircraft cargo hold.
Mr Johnson, now a private consultant on aviation security, said there might not have been enough oxygen in the hold to set it alight.
"On a scale of one to 10, let's call it a four because it requires someone to set it on fire in order to initiate," he told ABC Radio.
"It is not on the same scale as if you had an actual explosive device where you were going to punch a hole in the side of the aircraft to get a potential catastrophic decompression."
Mr Johnson said the fact that a potentially dangerous device got on aboard an aircraft highlighted the need for full screening.
He said there was a breakdown at some point in the security screening system at the airport.
"I don't want to say that there is no real danger with a fire," he said. "We don't want to have this device or any other similar device aboard a plane. That is the bottom line."
Labor's opposition transport spokesman, Martin Ferguson, said the Australian Federal Police needed to do a full investigation.
"And worse still, if there was a prank, how were those responsible allowed to get away with this prank," he told ABC radio. "The responsibility of the federal police is to fully investigate the incident, to learn from any security breach, and if there has been a prank, to fully enforce the letter of the law to send a message, once and for all, we cannot allow these incidents to occur."
U.S. orders full month of airline records
Matthew L. Wald/NYT
Data on passengers sought for test of antiterror system WASHINGTON The Transportation Security Administration has said that it will require each airline in the United States to turn over records on every passenger it carried domestically in the month of June, so that it can test a system to match passenger names against lists of known or suspected terrorists.
The data that will be ordered varies from airline to airline. It includes the passenger's name, address, telephone number and flight number. It may also include the names of others traveling in the same party, meal preference, whether the reservation was changed, method of payment and comments of all types by airline employees, such as whether a passenger was drunk or belligerent.
The department placed several documents related to the proposal in the Federal Register on Wednesday, for public comment, a first for the agency. The transportation security agency is promising to listen to airlines, privacy advocates and others who opposed an earlier system.
"We're giving them a chance to comment on the order, which we almost never do," said Justin Oberman, director of the transportation security agency's Office of National Risk Assessment. "We want to do this collaboratively."
The agency plans to issue the new order 10 days after the comment period ends, and begin the program sometime in the spring.
By demanding the entire airline record, the agency will receive not only the travelers' names, phone numbers and addresses, but also information like "whether you ordered the low-salt, kosher meal and who is sleeping in your hotel room," said Barry Steinhart, of the American Civil Liberties Union. It was just that broad sweep that led the European Parliament to ask the European Union's highest court to annul a treaty between the EU and the United States for sharing information about trans-Atlantic airline passengers. The European Commission, the EU's executive body, and EU governments signed an agreement with the United States in May on sharing such information, despite privacy objections from Parliament. The agreement compels European airlines to turn over 34 pieces of information about each passenger.
The U.S. agency says that its goal for the new plan is to reduce the number of people selected for more intensive screening at airports, including "wanding," pat-downs and hand-searches of carry-ons, and to increase the chance that people on government "watch lists" will be searched.
Under the current system, the airlines check their passengers' names against government lists of suspicious persons.
But the government, fearful that the lists could fall into the wrong hands, does not give the airlines all the names.
The new order, which will take effect after a 30-day comment period, would require airlines to provide the same kind of information on passengers that several airlines, including JetBlue and Northwest, turned over voluntarily to the government or to a private company. The airlines were embarrassed by the disclosure that they had been voluntarily doing that.
"We believe the government needs to have a legal order to compel production of this data," said Jack Evans, a spokesman for the Air Transport Association, the trade group of the major carriers. He added that delivering the passenger information under government order would protect the carriers from lawsuits from their passengers.
The proposal for a new program, called "Secure Flight," replaces a controversial program that was to be called Capps 2, which stands for "computer assisted passenger prescreening system." But the new program appears to contain some of the elements that privacy advocates found objectionable in the first proposal.
In the documents in the Federal Register, the transportation security agency said that it had dropped Capps 2 because of objections of "mission creep," which means it had expanded to include things outside of its original purpose. Capps 2 would have been used not only to determine who should be subjected to additional scrutiny before boarding and who was on the "no fly" list, but also to apprehend people for whom there were outstanding warrants for violent crime. The new program would not be used to apprehend people wanted for violent crimes, officials said.
Steinhart, of the American Civil Liberties Union, said that there was nothing to prevent the government from reviving the idea of using the airport security system to apprehend people wanted for unrelated crimes. But he added that his group had never opposed the idea of having the government check passenger names against a watch list, rather than the airlines.
"The question is not whether TSA should do the administration, it's what program they should be administering," he said, referring to the transportation security agency. He said he was struck by the argument that the agency did not trust the airlines with all the names of possible terrorists. "If they weren't giving the worst names to airlines, what were they doing? Who were they screening then?" he said.
The New York Times
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Airplane Incident
Pottstown/Limerick, PA Sept. 22, 2004 — A state police helicopter forced a pilot to land at a suburban Philadelphia airport Wednesday after his plane got too close to President Bush, who was visiting the area.
Police questioned the pilot of the single-engine plane, who apparently didn't know he was entering air space that was restricted because of the president's appearance in nearby King of Prussia, said Chris Jordan, the Pottstown-Limerick Airport's operations manager.
"He was in the wrong place at the wrong time," Jordan said. "The gentleman was just going for a cup of coffee in Chester County and didn't quite make it."
The man's name was not released.
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Airline advert ruled foul play
AN advert for a low-cost airline was labelled "irresponsible" today for encouraging football fans to harass the Swiss referee Urs Meier, who presided over England’s controversial exit from Euro 2004.
The airline, Flybe.com, sent an e-mail advert the day after England lost in the quarter-finals of the tournament following a disallowed "goal".
The e-mail read: "As a mark of respect to our lads, and some of the worst refereeing in years, we have suspended services to Switzerland."
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Airplane parts rain on neighborhood
By Darren A. Nichols / The Detroit News
GARDEN CITY — Airplane parts fell from the sky into yards and driveways of a neighborhood over the weekend.
A Northwest Airlines 747 jet bound for Tokyo with 355 passengers aboard had to return to Detroit Metropolitan Airport after losing an air-conditioning panel shortly after takeoff about 3:30 p.m. Saturday.
Garden City resident Wynona Denning said she was inside her home on Elmwood Street when the air-conditioning panel fell into three neighboring back yards.
Denning said she saw a young man pushing a child in a stroller when the pieces fell on the neighborhood north of the airport.
“The boy had it in his hand. I thought, What in the world is that?’”
Another resident, Diane Ryan, said her daughter, Cindy Gardner, 40, was on her cell phone near the back door of her home when the plane flew over. Ryan said one piece landed in her neighbor’s driveway, and a larger piece landed in Cathy Forma’s yard.
“I saw the piece falling,” said Ryan, 65. “I came running out, and here are these things falling down. It was just fascinating. You can’t believe these things are falling off a plane.”
Mary Stanik, a Northwest Airlines spokeswoman, said no one was injured.
Stanik was not able to provide details about the size of the panel that fell.
“There was no safety issue aboard the craft,” Stanik said.
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No end is seen to airline woes
Congress doesn't appear eager to intervene for the big guys
By ROBERT DODGE / The Dallas Morning News
WASHINGTON – The pain is not over for the beleaguered U.S. airline industry. Not for the stockholders. Not for the employees. And not for the rest of the travel and tourism industry.
That was the conclusion of aviation policy-makers and airline executives who attended a half-day seminar Tuesday sponsored by the George Washington University School of Business.
Few had answers to the central question posed at the event: Should the government be doing something different?
"We either adapt and change, or we perish," said D. Scott Yohe, a senior vice president of Delta Air Lines Inc. of Atlanta.
The nation's traditional legacy airlines continue to pile up huge losses as they struggle to gain wage and benefit concessions from workers. And even as the carriers slash costs, airfares continue to fall, resulting in shrinking revenue and more losses.
According to the Air Transport Association, the average fare for a 1,000-mile trip dropped to $115 in June, down from $145 in June 2000.
With United Airlines Inc. and US Airways Group Inc. in bankruptcy, and Delta threatening to file Chapter 11, officials had little hope for a Washington solution.
Regulators said they would continue to ensure safety. And a Justice Department lawyer said officials would be vigilant to protect consumers.
Policy-makers were less certain about Congress.
They said that although lawmakers care deeply about air service to their states and districts, there is little political appetite to provide the carriers with tax relief, ease the cost of airport security or change labor laws so airlines can pool their resources to withstand a strike.
Sam Whitehorn, a senior Democratic aviation counsel on the Senate Commerce Committee, predicted that lawmakers would eventually be forced to help the airlines again.
Slug it out
While members of Congress want the airlines to slug it out, many also are highly sensitive to the effect on voters and local economies when air service is threatened.
"There is a schizophrenia in Washington about how to look at the airline industry," said Delta's Mr. Yohe.
While executives and regulators did not come up with new ideas, industry experts have suggested steps the federal government could take:
• Enact tax changes for the airlines. A commission appointed by President Bill Clinton recommended that in 1993. Some experts say it is still a good idea. The industry estimates its federal tax bill at $14 billion, much of which is added to each airline ticket.
• Ask taxpayers to pick up more of the airport security costs added since the 9-11 terrorist attacks. Airline officials contend that airport security is a national defense expense.
• Raise the limit on foreign ownership in U.S. airlines to 49 percent from 25 percent to attract new sources of capital. Such a provision is a negotiating point in a proposed open skies agreement with the European Union.
• Amend the 1926 Railway Labor Act to allow binding arbitration so labor cannot use its power to threaten a strike most airlines could not withstand. Other experts suggest allowing the carriers to pool financial resources as a strike defense fund.
Uncertain timing
While Congress will revisit the industry's woes, Mr. Whitehorn said the timing was uncertain: Lawmakers already have provided two assistance packages and are now focused on the Nov. 2 elections.
"It will not be the last time that Congress steps in," he predicted.
All the proposals have varying degrees of support on Capitol Hill, where many lawmakers remain skeptical of providing the industry with a third bailout. But proponents said the tax and regulatory changes would help reduce the risk of taxpayers being asked to underwrite a bailout.
Kenneth Mead, the inspector general at the Transportation Department, said Congress would find it increasingly difficult to give the airlines a break on security costs when the government is running large annual deficits.
Airline executives did not agree on the importance of getting more help from Congress.
Mr. Yohe said it was important to Delta. But Chris Chiames, a senior vice president at US Airways, said his airline is in its second Chapter 11 bankruptcy and has a much shorter time to obtain about $800 million in labor concessions.
"We have a much shorter leash," Mr. Chiames said.
http://www.dallasnews.com/sharedcontent/dws/news/washington/stories/092204dnbusairlines.b261a.html
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AM - Dick Smith takes aviation regulator to court
[This is the print version of story]
Reporter: Sarah Clarke
TONY EASTLEY: In an unprecedented move, a former chief of the Civil Aviation Authority in Australia, Dick Smith, is taking the national aviation regulator to court over its decision to rollback the contentious airspace rules that he helped support.
Mr Smith, who authored the US-style aviation plan, will this morning go to the Federal Court.
Sarah Clarke from the ABC's Investigative Unit reports.
SARAH CLARKE: Since the new airspace rules were introduced last November, the chair of Air Services Australia has resigned, two senior air traffic controllers have quit and last month the aviation regulator declared some of the reforms unsafe.
As a result it voted to have the changes wound back. That's infuriated the driving force behind these reforms, and today Dick Smith's taking his fight to the Federal Court.
DICK SMITH: Well, I'm taking Air Services to court to see if I can somehow stop the reversal of the airspace reforms, which will mean that controllers will have to operate as if they were blindfolded, without radar, which is the old 1930's system.
It's an attempt to stop us winding back the reforms which have been very successful.
SARAH CLARKE: It's an extraordinary step for the former CASA chief, and one even he describes as bizarre. The motion is listed in his name as a private pilot and as an official adviser to the Government on airspace reform.
He describes the regulator's decision as "so unreasonable that no reasonable person could have made that decision".
Air Services Australia will fight his action vigorously, with the support of the Australian Federation of Airline Pilots, who believe Dick Smith's airspace changes put passenger aircraft at risk.
President, Richard Higgins.
RICHARD HIGGINS: It's akin to the behaviour of a spoilt child who doesn't get his way, so he's got to try and have a go, legally, and all it's doing is putting the travelling public, together with my pilots, putting them at risk of an imminent collision, and that's absolutely insane that he should be doing that.
SARAH CLARKE: This series of events has delayed attempts to reform aviation rules over the last 12 months.
Mike Caplehorn runs Broome International Airport, and says this latest step into the Federal Court is an act of "lunacy" and the final straw, and the Transport Minister John Anderson must take control.
MIKE CAPLEHORN: It is just absolutely ridiculous. How can a minister allow one of his advisers to take Federal Court action against one of his own authorities that work under his portfolio? He's got an adviser running amok, he's got to stop it.
TONY EASTLEY: Chairman of Broome International Airport, Mike Caplehorn, ending that report from Sarah Clarke.
http://www.abc.net.au/am/content/2004/s1203614.htm
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Safety of airplane drinking water is questioned
BY SETH BORENSTEIN
FREE PRESS WASHINGTON STAFF
WASHINGTON -- Water on some of the nation's airplanes may not be fit for drinking or even hand-washing, a preliminary federal study found.
The water on more than 1 out of every 8 airplanes that the U.S. Environmental Protection Agency randomly tested was tainted with fecal coliform -- evidence, the government said, that human or animal waste is in the water.
Federal officials disclosed Monday that the coliform was found in water samples drawn from the restrooms and kitchens of 20 airplanes tested between Aug. 3 and Sept. 9. In all, 158 airliners were tested.
On two of the planes, E. coli bacteria were discovered in the water. That form of bacteria can cause serious intestinal illness.
Even though the tests were preliminary, EPA acting enforcement chief Thomas Skinner said his agency made the data public because fliers had the right to know about potential health problems with the water. He called the findings surprising.
The tainted water was found mostly in bathrooms, EPA officials said. More than half the flights with tainted water originated overseas, pointing to a possible problem outside of U.S. environmental control, they said.
Skinner suggested that airline passengers who have weakened immune systems avoid drinking airline water, coffee and tea, and use bottled water instead. Those people also should avoid using airline water to wash their hands, added Benjamin Grumbles, the agency's acting water director.
Doug Wills, a spokesman for the airline industry, said water on planes is safe and that the EPA study was flawed. He said the airline industry's own study and an earlier study this year by the Food and Drug Administration gave airplanes a clean bill of health, but the chief of the FDA survey said it wasn't nearly as broad as EPA's and it came to no conclusion about health.
"No one has gotten sick from airline drinking water," Wills said. "Airline drinking water is as safe as municipal drinking water across the U.S."
In 2003, the EPA found that 3.5 percent of Americans got their drinking water from public systems that contained coliform. Airplanes had a 12.5-percent rate of coliform in the preliminary tests.
Airline passenger advocate David Stempler said the study results are disturbing, adding that "bottled water is our mantra here."
Skinner declined to identify the airlines with the tainted water, citing the enforcement negotiations and the preliminary nature of the tests.
Federal officials said the study showed that they need to tighten the 18-year-old regulations that govern water on airplanes and develop better methods of disinfecting airline water and water systems.
Contact SETH BORENSTEIN at sborenstein@krwashington.com
http://www.freep.com/money/business/water21e_20040921.htm
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Teen's airline-water tests stir action
By Linda Davis
CONTRA COSTA TIMES
ALAMO - More than two years ago, Zach Bjornson-Hooper was on yet another long airplane trip with his globe-trotting family when he saw flight attendants serving passengers with water poured from pitchers.
"Up until then, I just assumed that airlines were using all bottled water," said Zach, of Alamo, who was 12 then. "It got me to thinking."
While the boy never got sick himself, his mother and father have had intestinal upsets from their travels -- written off to jet lag, foreign water or food.
But it occurred to Zach, a science-minded boy who begun doing experiments at the age of 3, to test the airplane water for bacteria. On seven of the nine flights on various airlines he tested in 2002, he found contamination of E. Coli, fecal coliform or salmonella. In one sample, he even found insect eggs.
His mother, Sheri Bjornson-Hooper, was so impressed she posted her son's findings on an online bulletin board for travelers. It was there that the Wall Street Journal noticed Zach's research and launched its own investigation in late 2002, with similar results.
On receiving word Monday of the EPA involvement, Zach, now 15, said, "This is very rewarding news, that government agencies took an interest and will be creating regulations. I am really surprised it has gone further than just a media thing."
After stories appeared in the Wall Street Journal and the Times, Zach also was interviewed by the "Inside Edition" television show about his findings.
"I didn't go any farther with the airplane water tests, because the results would have been consistent.
"After the tests I did, we never drink airplane water . . . just soda or bottled water."
http://www.contracostatimes.com/mld/cctimes/living/science/9719601.htm?1c
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Airline alliance downed in court
By Scott Rochfort
Sydney
Qantas' plans to take a 22.5 per cent stake in Air New Zealand were finally abandoned yesterday after the airlines lost their appeal against the New Zealand Commerce Commission's rejection of their proposed trans-Tasman alliance.
More than two years after both airlines first flagged the idea of forming an alliance, and after spending tens of millions of dollars in legal costs, Qantas chief executive Geoff Dixon said it was time "to move on" after the NZ High Court dismissed the appeal.
But given Qantas' recent focus on Asia and growing speculation it could merge with an Asian carrier after its majority shareholder British Airways sold out this month, some industry sources said Qantas' priorities had already moved on anyway.
With most analysts already seeing the decision as inevitable, Air NZ shares rose 2 ¢ to $1.75 and Qantas 1 ¢ to $1.41. Both airlines said they would still look at saving costs by forming a closer operational relationship but would remain competitive.
Mr Dixon, who is due to meet Air NZ chief executive Ralph Norris on Friday, said both airlines were considering a series of potential cost-saving options.
Given talk that Qantas wants to use Air NZ's maintenance facilities to take advantage of NZ's cheaper labour costs, Mr Dixon would only single out "inventory rationalisation" as an area of possible co-operation.
Both airlines have Boeing 737s, 747s, 767s and Airbus 320s in their fleets, and Mr Dixon said it was logical for both airlines to share parts.
He said no Qantas jobs would be lost from any deal between the airlines.
While Air NZ has spent $NZ20 million ($A19 million) on legal costs appealing against the Australian Competition and Consumer Commission's and the NZCC's rejection of the alliance, Qantas has not disclosed its court costs.
Air NZ chief executive Ralph Norris said he was confident both airlines could still save tens of millions of dollars from closer co-operation.
Yet Mr Norris said the savings from the rejected alliance would have been "significantly greater" than the $NZ30 million a year cited by the NZCC.
Given Air NZ's strong turnaround over the past two years and ongoing efficiency drive, Mr Norris said he was "confident of our prospects in the short to medium term".
After being saved from bankruptcy with a $NZ885 million rescue package from the NZ Government in 2001, Air NZ now has more than $NZ1 billion in the bank. On a unit cost basis, it is now even more profitable than Qantas.
But looking beyond 2010, Mr Norris said the biggest challenge would be for Air NZ to find $NZ3.5 billion to $NZ4 billion to replace its fleet of eight 747-400s.
He said Air NZ had no plans to find another potential airline suitor.
Despite both airlines failing to convince the NZ High Court of the competitive threat posed by Pacific Blue and carriers such as Emirates on the trans-Tasman route, Mr Norris said air fares on the route were unsustainable.
"If you look at sector prices of $NZ99 to $NZ129, they are too low, in my view," Mr Norris said.
FLYING INTO A STORM OF CONTROVERSY
2002 · May 30. Qantas says it is in talks to acquire a minority shareholding in Air New Zealand. · Nov 25. Qantas says it is to take a 22.5 per cent stake in Air NZ in a wide ranging strategic alliance. The Australian Competition and Consumer Commission warns that alliance appears anti-competitive. · Dec 9. Air NZ says the alliance with Qantas is needed to avoid a "war of attrition". · Dec 18. NZ Government says it supports alliance, but awaits competition ruling.
2003 · Sep 9. ACCC says the alliance not in the public interest. Qantas, Air NZ announce appeal to Australian Competition Tribunal. · Oct 23. NZ Commerce Commission rejects the alliance proposal, citing the likelihood of increased airfares. · Nov 20. The two airlines announce an appeal to the NZ High Court.
2004 · May 3. Qantas and Air NZ front the Australian Competition Tribunal to begin their appeal. · Sep 20. NZ High Court rejects the joint Air NZ, Qantas appeal against the NZ Commerce Commission's earlier rejection of their planned strategic alliance.
Budget airline battle heats up in Asia
Reuters
Singapore
Airline ticket prices in Southeast Asia have fallen below bus fares, with a one-way ticket between Singapore and the Thai resort city of Phuket advertised for as little as 17 US cents.
But just as most people will never get to fly at such impossibly low prices because of an array of hidden costs ranging from airport taxes to service fees, some airlines trumpeting the deals ultimately may not survive the price war.
"Not everyone is going to make it," said associate director of equity research at DBS Vickers Securities in Singapore, Chris Sanda.
Last week, no-frills airline Thai AirAsia Co offered one-way flights between Singapore and Phuket at 29 Singapore cents (17 US cents) for the first 3,000 seats. The price did not include taxes and fees of about S$61 for insurance, a fuel surcharge and airport taxes.
The tickets were snapped up within two days.
Tiger Airways, a venture between Singapore Airlines Ltd. and the founder of Irish discount airline Ryanair, started the price war last month with one-way S$1 fares to Thailand for a limited period, which when added to taxes and fees amounted to S$62.
Singapore Airlines, the world's second-most-valuable airline, is offering return fares between Singapore and Bangkok ranging from S$178 to S$268 each compared with its normal ticket price of S$358.
"Definitely people who want to be in this airline business need to have the stomach (for it)," said Patrick Gan, chief executive officer of Tiger Airways, which launched its inaugural service last week.
PLACE YOUR BETS
Tiger is the second budget carrier to fly from Singapore's Changi Airport after Valuair Ltd, which was set up by former staff of full-service carrier Singapore Airlines.
The budget airline of Australia's Qantas Airways Ltd, which has yet to be named, also plans to begin flying from Changi.
No-frills Malaysian airline AirAsia Bhd has applied for a licence in Singapore even though its Thai venture with Shin Corp, Thai Air Asia, flies between Thailand and Singapore.
Discount airlines are making it easier for Southeast Asia's 500 million people, commanding gross domestic product of $700 billion, to take to the skies.
Because they encourage intra-regional tourism, which governments are keen to promote, they are pressuring countries to revise international landing rights pacts and drawing support from government investment vehicles, such as Singapore's Temasek Holdings.
Temasek has equity investments in two budget carriers. Though it owns 57 per cent of Singapore Airlines, it also holds 11 percent of Tiger Airways and 19 per cent of Qantas's budget carrier.
"Basically, you know it's just serving the national interest. The government has said it wants to develop the low-cost carrier industry," said one industry analyst.
Temasek's strategy seems to be to cover all bets until a winner emerges. "Each one has the same business model but somebody's going to be really good at it," Sanda said, citing the dominance of discount carriers such as Southwest Airlines Inc in the United States and Ryanair in Europe.
Budget airlines drive down their costs by selling through the Internet, not assigning seats, providing no free food or drinks.
Sanda said budget airlines in the region could easily grab 30 per cent of the Southeast Asian market in just a few years, as Virgin Blue Ltd did in Australia.
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Row over Bulgarian budget airline
There is turbulence in the skies over Bulgaria, where the country's first budget airline says that the government is driving it out of business.
Economic police last week shut down the offices of Bexx Air, arguing that the firm was operating without a licence.
Bexx Air, which offered tickets to Germany and Belgium from 50 euros (£34; $61), says it is being victimised.
"The action against Bexx Air and its cheap tickets was illegal," insists company chief Dirk Wiesemann.
"We will prove this in court and claim for losses above 5.2m euros."
In a message to clients, posted on the company's website from a Sofia internet cafe, Bexx Air management says flights will resume on 8 November, and that the 900 ticket-holders left without flights will be compensated.
Off licence
Bexx Air has dropped hints about running into opposition from vested interests in Bulgaria.
In particular, the company has cited the national travel-agents' association and state-owned Bulgaria Air, whose fares to Western Europe are usually 200 euros and more.
The government, however, says the decision to close Bexx Air was strictly legal.
Dimitar Dimitrov, a spokesman for the transport ministry, points out that Bexx Air lacked any of the four possible types of licence necessary to operate a legitimate tourism business.
"If they want to become legal, we'll do everything possible to help them," he says.
"We'll skip all the bureaucracy."
Different strokes
But Mr Wiesemann argues that Bexx Air should not need any kind of special licence.
His firm is a peculiar one: it does not own or lease planes, instead chartering jets from its local partner, Hemus Air. It sells tickets online and through a tiny telesales operation.
The ministry insists it does not have any particular problem with unconventional tourism businesses, but said it had been tipped off by hundreds of customer complaints about Bexx Air's services.
In general, bureaucratic difficulties have hindered the growth of budget airlines in Eastern Europe, in theory a region of strong potential.
So far, only three airlines have made a mark - Poland's Polonia, Wizz Air of Hungary and Slovakian SkyEurope.
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Unions say airline won't really bargain
Workers think aim is to get bankruptcy court to break contracts
BINYAMIN APPELBAUM AND SCOTT DODD
Staff Writers
US Airways union leaders contend that they never had a real chance to negotiate new labor agreements with the airline before it filed for bankruptcy.
They say the airline's real aim was to break its union contracts in bankruptcy court, not to seek negotiated settlements.
After a fruitless summer, union leaders said they're ready to fight the company before a judge if necessary.
"Right now we're in more of a legal battle than negotiations," said James Root, president of the Charlotte chapter of the Communications Workers of America, which represents ticket agents.
The company, which filed for bankruptcy Sept. 12, says it needs $1.5 billion in cost savings to survive and wants more than half of those cuts from its work force.
"Every union in this company has been given ample opportunity and still have ample opportunity" to negotiate, said US Airways spokesman David Castelveter.
But leaders for both the pilots and flight attendants say whenever they've moved toward the company's position during talks this summer, executives have always come back asking for more.
As they prepare for the possibility of court, the unions' strategy is simple: Express willingness to negotiate, even if no one is on the other side of the table. Make it clear they're willing to talk but not to capitulate.
Unions usually don't want their contract agreements to be fought out in court. But the willingness of US Airways' unions to plead their case before a judge highlights the depth of their dispute with the airline.
It's jobs, not just money
Their battle is not just about money. They're trying to protect their jobs as US Airways presses for a cheaper, smaller and more flexible work force as part of its transition into a low-cost carrier. In interviews, more than a dozen leaders of the company's four major unions said they believe the company has failed in its current form mostly because of poor management and inefficiency.
They are hoping the court will accept their recommendations for cost-cutting before allowing the airline to void their contracts.
"We are not interested in the company's desire to remake this `legacy' carrier," Fred Freshwater, a pilots union leader based in Pittsburgh, wrote in an August letter to his constituents. "We are not ... young, non-union employees who hope at some later date to gain some benefits befitting their initial sacrifices."
Freshwater and three other Pennsylvania-based pilots union representatives prevented a vote last Friday by the union membership on a company contract proposal. US Airways says the union's decision forced it to file for bankruptcy last Sunday.
Since then, the carrier has pledged its willingness to negotiate with the unions. But it also has said time is short. The New York Times reported Saturday that the company will seek emergency cost-cutting permission from a court on Oct. 7 if the unions do not yield.
There is some reason for the unions to feel confident about their chances in court.
Continental went to bankruptcy court for the sole purpose of breaking its contracts in 1983. After that, Congress changed the law.
"No airline since Continental has been able to persuade a bankruptcy judge to tear up a contract," said Paul Dempsey, an expert on aviation law at McGill University in Montreal.
Now a company can ask a judge for relief only after following federal rules designed to demonstrate transparency and a willingness to make a deal. The judge must then find the request critical to the company's survival.
The unions say management has refused to consider their cost-cutting proposals, such as reductions in the ranks of middle management. The unions also say the company could save money by giving workers greater decision-making responsibility.
The International Association of Machinists has presented the company with a plan it says would save $100 million. The flight attendants union and the union representing ticket agents both have submitted their own cost-cutting suggestions. All say management has issued no formal response.
There is no way of knowing what a judge would do because the situation is unprecedented. But some experts think a US Airways' petition would have a good chance. They note that companies in other industries have succeeded in convincing judges to cancel labor agreements.
Machinists refused to talk
Some of the unions have been reluctant to even come to the table.
The International Association of Machinists has refused to negotiate altogether. It is traditionally the most militant of the unions because the skills of its members are highly transferable.
When the airline asked the machinists for $263 million in concessions, the union responded with various cost-cutting proposals. There has been no further progress.
The Air Line Pilots Association is effectively controlled by a block of Pennsylvania pilots, Freshwater among them, who say they see no chance that further negotiations with the airline will succeed. US Airways wants $295 million in concessions from its pilots.
The controlling faction of the pilots union was swept into office by pilots angry about the last round of concessions. Leaders could risk their jobs by compromising now.
"(Leaders) don't want to be seen as weak or giving in," said Gary Chaison, professor of industrial relations at Clark University in Worcester, Mass. "There are always people who are willing to fight to take their job."
The Association of Flight Attendants says the proposal delivered by the airline to their bargaining committee last Friday was "too outrageous" to even consider. The airline said it was seeking $116 million in concessions from the flight attendants. The union says the proposal would have cost far more.
"We're still working off the belief that we can negotiate," said Mike Flores, president of the flight attendants' Charlotte chapter. "But it seems like we're negotiating with a ghost."
CWA's Root said his union doesn't even know what the company's going to be asking for at this point. A meeting scheduled for last Wednesday was cancelled, just like two other meetings over the past three weeks.
"The idea that the unions held out and just rode this thing into bankruptcy -- I don't think the unions had much choice," Root said. "They weren't negotiating with us."
About 28,000 workers are hoping the airline and unions can find a way to keep the company alive.
"You can't find work when everybody else is laying people off," said David Peterson, a Charlotte-based mechanic who is about to turn 50. "It's stressful. Work is just not a fun place to go into."
But while some workers want the company to survive at any cost because they don't feel they can find jobs anywhere else, others say they're ready to leave if the airline takes too much.
"I started with a commuter (airline)," said Kathy Flanagan, a customer service representative based at Charlotte/Douglas International Airport. "I really don't want to go back to that."
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The head of U-S Airways says the airline will thrive again
PITTSBURGH
Chief Operating Officer Bruce Lakefield told the Pittsburgh Post-Gazette the airline wants to bring low fares to Pittsburgh and be fair to its employees. Lakefield says he plans to stay with the airlines through the bankruptcy.
Lakefield says the airline is burning cash every day and every day the situation is getting worse.
The nation's seventh-largest airline declared bankruptcy September 12th for the second time.
More than 12-thousand of U-S Airways' 27-thousand employees work in Pennsylvania. The airline has hubs in Philadelphia and Pittsburgh.
Airplane 'lap children' high on list of safety issues
By Bruce Mohl
The Boston Globe
During takeoffs and landings, federal safety regulations require passengers to buckle in, stow their bags, and place their tray tables in the upright and locked position.
Those same passengers, however, are allowed to hold on their laps, without any restraint, an infant or toddler under age 2.
It doesn't make sense, and last month the five-member National Transportation Safety Board said as much. After a unanimous vote, the board said it was unacceptable that the Federal Aviation Administration had failed to act on earlier recommendations that infants and small children be restrained on takeoff and landing, and in turbulence. Barring so-called ``lap children'' on planes is one of the board's ``Ten Most Wanted'' safety improvements.
The FAA largely agrees. A spokeswoman said, ``We want children off laps and into child safety seats,'' but the agency is refusing to issue rules to make that happen because it is concerned that families forced to buy another ticket (lap children fly free) will instead drive a car and face greater risk of being in an accident.
``We've struggled from a policy point of view on what kind of impact a rule would have on parents who can't afford to purchase another ticket,'' said Alison Duquette, the FAA spokeswoman. ``Driving is 25 times more dangerous than flying.''
Duquette said the FAA is continuing to review the issue, but for now it is urging parents to voluntarily buy a ticket for their child and use a child safety restraint approved for airline use.
Lap children, an estimated 1 percent of all airline passengers, were allowed initially for practical reasons. In the early days of commercial aviation, seat restraints couldn't accommodate infants and toddlers so they were allowed to fly on their parents' laps.
The situation is different today. All U.S. states require young children to be restrained in safety seats when traveling in an automobile, and most of those seats are certified for use on airplanes.
As the NTSB said in an Aug. 3 report, ``The resulting reality is that many of the approved safety restraints now used to transport infants to and from airports end up flying as checked baggage while those infants ride in the cabin unprotected.''
Because air travel is so safe, lap children are not in grave danger. But accidents do happen.
In 1994, the NTSB investigated an accident in Charlotte, N.C., where a 9-month-old infant slammed into several seats and died when her mother was unable to hang onto her when their plane crashed. The board said the child would have survived had she been restrained.
``Both laboratory testing and real-world accidents have proven that under high load-force events, when restraint is most important, arm strength is not sufficient to protect even a small child,'' the NTSB said in its report.
The Charlotte incident prompted the safety board to ask the FAA to forbid lap children, but the FAA responded with a report suggesting that such a rule would divert more children and parents to cars and result in more accidents.
In December 1999, Jane Garvey, the FAA administrator then, reversed course. She said the agency planned to issue a rule requiring all passengers, including infants and toddlers, to be restrained during takeoff, landing and turbulence. But the rule was never issued, primarily, Duquette said, because of lingering concerns about the diversion issue.
In its report last month, the NTSB said those concerns were largely unwarranted. The board looked at the period before and after the 2001 terrorist attacks, which had a dramatic impact on air travel. From 2000 to 2002, domestic air travel declined 8.3 percent while driving increased 4 percent. Over the two-year period, driving fatalities increased by just over 1 percent while driving injuries declined 8.7 percent. Among children under age 5, fatalities were down 12.4 percent and injuries down 11.9 percent.
``In total, there does not appear to be a clearly defined relationship between diversion from air travel and highway accidents or injury,'' the board said.
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Airline ticketing fees
From Tribune news services
For travelers who prefer to speak with an agent rather than book their airline tickets on the Web, that service increasingly comes with a price tag. In recent weeks, several airlines have announced new fees for booking frequent-flier awards and, in some cases, paid tickets through an airline representative.
Effective Oct. 15, United will charge a $15 handling fee for award tickets booked through a United representative, either by phone or at the airport. The fee will not apply to awards used to upgrade to a higher class of service, or to frequent-flier tickets that travelers book at www.united.com.
On Aug. 27, Northwest began charging a $5 "call center ticketing fee" for both award tickets and paid tickets purchased through a Northwest reservations agent, or a $10 fee for tickets purchased through an agent at the airport. It does not apply to tickets booked at www.nwa.com. American Airlines essentially matched Northwest's policy on Sept. 6, when it began charging $5 for tickets purchased by phone through its reservation agents, and $10 for tickets purchased through a ticket agent at the airport. The new fees apply to paid tickets and frequent-flier awards.
Soon after, US Airways and Continental added a $5 fee for booking on their toll-free reservations systems and $10 on tickets purchased at airport ticket counters; there will be no fee on tickets purchased at airport kiosks and at www.usairways.com or Link to external site.
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Concern for airline jobs
While Charlotte Bobcats owner Bob Johnson is not a regular customer of US Airways -- he flies private planes between his Washington, D.C. home and Charlotte -- he does have a vested interest in the airline's survival.
He's on the board of directors.
The Big I caught up with the billionaire NBA owner Wednesday when he held a reception for the second annual Charlotte Jumper Classic on the lawn of his condominium complex, The Ratcliffe.
I asked him if he thought -- in the event US Airways fails -- that losing a major airline hub would hurt Charlotte's business community. He said the major impact will be to the people who lose jobs, not the established companies.
But Johnson did acknowledge some companies might not want to locate their U.S. headquarters in a city where there are no nonstops to Europe. And, he said, corporate suits might think twice about locating a plant in a region where nonstops are scarce.
"Business travelers want nonstop flights," Johnson said. "They want nonstops or one-stop in the same terminal."
Michael Almond, president of the Charlotte Regional Partnership, said that, given the state of major airlines today, losing a hub might not be the blow it would have been in the recent past.
"If you asked in the context of the way things were five years ago, it would be a big deal," Almond said. "I believe with point-to-point flying, we have enough (business) to justify flights to London and Frankfurt."
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Airline may ask court to void labor pacts
By Steve Halvonik
TRIBUNE-REVIEW
US Airways may ask a U.S. bankruptcy judge this week to void its union contracts, clearing the way for massive layoffs at Pittsburgh International Airport, union leaders and industry experts said.
"Nothing US Airways does at this point would surprise me," said Craig Conroy, a local aviation analyst.
Canceling union contracts would help the company preserve cash by slashing payroll immediately. Continental Airlines used emergency bankruptcy power to decertify unions and fire all 12,000 employees in 1983, said Michael Boyd, an aviation analyst based in Evergreen, Colo.
US Airways most certainly can ask the court for emergency relief, Boyd said.
Union leaders expect the company to move later this week because it gave the pilots union until Wednesday to negotiate $295 million in wage and benefits cuts. The pilots are expected to miss that deadline.
"I wouldn't be surprised at all'' if US Airways tried to terminate labor contracts this week, said spokesman Jack Stephan of the Air Line Pilots Association. "They certainly have these tools at their disposal."
Airline spokesman David Castelveter declined comment on whether US Airways would seek to terminate union contracts this week.
"Our desire is still to reach consensual agreements," Castelveter said.
US Airways, the nation's seventh-largest airline, filed for bankruptcy protection last Sunday, less than 18 months after emerging from its first bankruptcy reorganization. The company is seeking $800 million a year in labor concessions as part of a $1.5 billion restructuring into a profitable, low-cost carrier.
If US Airways fails to reorganize in bankruptcy court, it will be liquidated. More than 28,000 jobs, including 7,000 in Western Pennsylvania, would be eliminated. That's the worst-case scenario. For Western Pennsylvania, the best-case scenario isn't a lot better.
Even if US Airways survives, it will be doing a lot less flying at Pittsburgh International Airport. Business experts and labor leaders agreed that the airline may eventually reduce local service to about 60 flights a day -- down from 373 at present -- and slash its payroll to about 1,500.
A retrenchment of that size may wipe out up to another 6,500 jobs at local companies doing business at the airport, said the Allegheny Institute. The local think tank said that US Airways' downsizing could take more than $1 billion a year out of a $50 billion local economy.
"It's going to be a huge hit," Boyd said.
The company already has announced plans to reduce local flights this fall by about 37 percent, to about 240 a day, but it has not revealed its plans for 2005.
Fred Freshwater, president of the pilots association's Council 94 in Pittsburgh, predicted that US Airways will shrink the number of pilots based here from about 750 to about 200. Teddy Xidas, president of Association of Flight Attendants Local 40, said her membership could drop from 1,150 to about 400.
"We will do our best to minimize any loss of jobs," Castelveter said.
The promise is cold comfort to local US Airways' employees.
"I am damned concerned that (job cuts) are going to happen -- and soon," said pilot Tim Baker, of Coraopolis.
"I'm beyond nervous -- I'm numb," said gate agent Jim Drummond, of Paris, Washington County.
Drummond, who started with US Airways in 1968 as a reservations agent, said he had hoped to work for the company for three more years, until his 62nd birthday. Instead, he has decided to retire at the end of this year, rather than face another round of layoffs.
"I like the people I work with -- they're like family," Drummond said. "But I have only bitterness toward upper management. It's unbelievable the way they have run this company into the ground."
Italian airline company agrees crucial labor deal with trade unions
ROME, Sept. 18 (Xinhuanet) -- Italian airline company Alitalia unions and management on Saturday agreed on new contract terms for flight assistants, ending a tense round of negotiations involving the airline's workers.
Thanks to the deal, Alitalia should now be able to draw on a 400-million-euro emergency loan from the government, which is intended to sustain the near bankrupt airline as it undergoes radical restructuring.
Saturday's deal on flight attendants' contracts cuts the number of planned lay-offs from 1,050 to 900 and keeps the 80 million euros of savings for 2005-06 requested by Alitalia management.
Alitalia chief Giancarlo Cimoli has pushed unions hard to accept his restructuring plan, insisting that the airline does not have the cash to pay staff and continue operations beyond this month.
The restructuring initially entailed 5,000 job cuts but the trade unions have brought the number down to some 3,679.
Savings for the next two years have been reduced from 315 million euros to 282 million.
The airline lost some 380 million euros in 2003 and is set to lose almost 400 million this year. Its share value has lost some 30 percent since the start of the year.
After Saturday's deal with flight attendants was announces, Italian Industry Minister Antonio Marzano indicated that an emergency loan worth 400 million euros from state coffers could be made available soon.
The six-month bridging loan, which can be renewed only once, has been approved by the Italian parliament and the European Union but on the condition that industrial disputes are settled and the restructuring plan is put into action.
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More than 1 kind of airline security
By The Sentinel, September 18, 2004
When it comes to air travel, there's no longer any such thing as too much security.
Since 9/11, every crash, every suspicious incident leads to further screening of passengers. There's simply too much at stake to do otherwise.
This week, the federal Transportation Safety Administration announced further measures are being taken in response to the bombings of two Russian airliners by Chechen rebels last month. Passengers now must doff their jackets before passing through metal detectors and more travelers will be pulled aside for pat-down searches. Carry-on luggage also will be more closely screened with explosives-sensitive equipment.
The 9/11 commission report is also responsible for the tighter security, as it recommends that anyone pulled aside for a pat-down search should be screened for any possible contact with explosives.
Readers no doubt groaned at this story when it appeared in Friday's newspaper, especially those who have plans to fly anytime soon. But there's unlikely to be any further reaction from the flying public, and few, if any, quiet oaths to avoid airplanes.
The depression in the air travel business that followed 9/11 is behind us now. The Associated Press notes that Sept. 2 was the busiest air travel day in history, and the industry projects a 24 percent increase in the number of planes in the sky over the next 10 years.
This statistic should make readers look twice at the other air travel-related story in Friday's Sentinel. The Federal Aviation Administration's budget for buying new air traffic control equipment is being cut 12.6 percent despite the growth in air traffic mentioned above.
Word of the funding reduction comes in the wake of an incident at Los Angeles International Airport earlier this week, in which the communications system between air traffic controllers and pilots went down for a few hours. At least five near-misses between planes were reported, and fears of worse incidents caused hundreds of flights to be canceled or delayed. These problems, of course, rippled through to other airports.
The president of the air traffic controllers union in Los Angeles said requests for backup equipment have been refused for years because of funding issues, but an FAA spokesman claimed L.A. already had two backup systems. Critics cite aging equipment as a problem, but the FAA claims the oldest systems are only nine years old.
Similarly, the issue is being framed in he-said, she-said terms in Washington. A Democratic congressman on the House Aviation Committee denounces the funding reductions, while the Republican chairman of that committee replies any problem can be solved with better business practices at the FAA.
While we're willing to give equal weight to both arguments regarding the air traffic control issues, it does occur to us that not much is gained by the aggressive screening of malefactors out of the passenger mix if we aren't certain we can keep the planes from bumping into one another.
Boeing, Hawaiian reach deal on airplane leases
Boeing agrees to sell its claims to RC Aviation
David Segal
Hawaiian Airlines, which filed for bankruptcy 18 months ago after being unable to restructure its aircraft leases with Boeing Capital Corp., finally has a deal.
Trustee Joshua Gotbaum, who is overseeing the carrier’s Chapter 11 reorganization, and the carrier’s primary lessor announced today that they have reached agreement on new lease terms following 13 negotiation extensions.
Terms were not disclosed on the leases, which cover 11 Boeing 717-200s — representing Hawaiian’s entire interisland fleet — and three Boeing 767-300ERs that are used for trans-Pacific flights. Hawaiian also leases seven Boeing 767s from Ansett Worldwide and four 767s from International Lease Finance Corp.
In addition, Boeing Capital announced it has agreed to sell its claims against the airline to RC Aviation LLC, which is one of three groups that have filed reorganization plans. RC Aviation is headed by Lawrence Hershfield, who was instrumental in the lease discussions. He became chairman of Hawaiian Airlines parent Hawaiian Holdings Inc. after RC Aviation bought 35 percent of the holding company’s stock in a private purchase. That $41.4 million deal established RC Aviation, a unit of Ranch Capital LLC, as the top shareholder.
“This agreement is good for both Hawaiian Airlines and Boeing,” said Gotbaum, who plans to request a court decision by Sept. 30. “It means we have the aircraft we need at lease rates we can afford.”
Hershfield’s involvement in the deal and his group’s pending purchase of Boeing Capital’s claim further establishes RC Aviation as the leading group to have its reorganization plan approved by creditors. RC Aviation, Gotbaum and the unsecured creditors’ committee are proposing a plan that fully repays creditors through a $160 million investment from RC Aviation.
Boeing Capital withdrew a competing plan last week.
The amount of Boeing Capital’s claim was not disclosed, but it earlier filed a $40.4 million claim for two Boeing 717s that were returned to it from Hawaiian and for the rejected delivery of a Boeing 767. Boeing Capital’s additional claim for its remaining 14 aircraft in Hawaiian’s fleet was to have been determined after the terms of the restructured leases were known.
Last month, RC Aviation purchased a $107 million claim from Ansett Worldwide at a reduced value.
“We reviewed a number of plans to reorganize Hawaiian Airlines and found the plan proposed by RC Aviation and the trustee to be a comprehensive financial solution that strikes a good balance among the interests of Hawaiian Airlines, Boeing Capital and all other stakeholders,” said Scott Scherer, Boeing Capital’s vice president and general manager of aircraft financial services.
Delta auditor raises doubts on carrier
Also, airline says bankruptcy filing possible in 'near term'
By Matt Andrejczak, CBS.MarketWatch.com
SAN FRANCISCO (CBS.MW) -- The auditor for Delta Air Lines raised doubts about the future of the nation's third-largest carrier in a regulatory filing late Wednesday as the company also sharpened its warning about filing for bankruptcy protection.
Delta said in a statement it has revised its 2003 annual report to reflect its previously disclosed deteriorating financial condition. The airline is facing a cash crunch, lately exacerbated by an exodus of senior pilots taking early retirement.
"The annual report has been revised to disclose these events and the possibility of a Chapter 11 filing in the near term," Delta added.
Delta Air Lines (DAL: news, chart, profile), based in Atlanta, has suffered $5.6 billion in losses since 2001. In the latest quarter, it lost $1.96 billion.
The airline's recurring losses and liquidity issues "raise substantial doubt about the company's ability to continue as a going concern," auditor Deloitte & Touche said in a regulatory filing.
Last week, Chief Executive Gerald Grinstein unveiled a transformation plan that seeks to cut the airline's annual costs by $5 billion over the next 18 months. It involves slashing 12 percent of the company's workforce, dropping Dallas-Fort Worth as a hub and trimming its fleet.
Yet Grinstein said bankruptcy could be a possibility by the end of the month if the airline and its pilots union could not reach an agreement to stop a record number of pilots from opting for early retirement.
Delta has proposed cutting its pilots' wages and benefits by $1 billion. Pilots have countered with a deal valued as much as $705 million.
Faced with a big pay cut, Delta pilots eligible for retirement are leaving, taking up to 50 percent of their pension payouts in lump-sum payments.
The exodus of senior pilots may affect the number of flights the airline can offer, especially the more-lucrative international routes.
Shares of Delta closed at $4.10, up 1 cent Wednesday.
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Federal Aviation Administration Fixes Radio Mishap
Associated Press
The Federal Aviation Administration says a radio problem that grounded some flights in the West has been fixed.
Air traffic controllers at a facility north of Los Angeles found they could monitor planes on radar, but couldn't talk to them.
Other facilities picked up some of the slack, but departing flights in the Los Angeles area, including Orange and San Diego counties and Las Vegas, were grounded. So were flights at San Francisco International Airport destined for Southern California.
Some planes had to be held as long as three hours. Planes in the air were allowed to land.
The F.A.A. stresses there are no safety problems.
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Update 4: Alitalia Airline Seals Accord With Pilots
Around-the-clock negotiations between Alitalia and unions over a crucial rescue plan continued Wednesday, a day after the airline sealed a deal with pilots that increased its hopes of averting collapse.
The deal sent Alitalia's stock soaring for a third straight day. At midmorning trading in Milan, the shares were up 9 percent.
Signed Tuesday night at the company's Rome headquarters, the agreement was a breakthrough in talks over the rescue plan. It came just hours before the Wednesday deadline set by the company for the approval of the plan.
"The accord is a turning point for the positive solution of Alitalia's grave crisis and represents a real cornerstone of the overall accord that unions intend to reach with Alitalia," the labor federations said in a joint statement.
Alitalia said the deal marked a "further significant step toward the company's reorganization and relaunch."
After days of negotiations, Alitalia pilots agreed to fly about double their current 450 hours per year and to have a larger part of their salaries based on how much they work - an incentive to fly more.
Alitalia had planned 450 pilot layoffs as part of its overall job cuts, but the deal only includes 289. However, about 100 pilots would retire or be given early retirement.
The deal was expected to allow Alitalia to save some euro52 million (US$63 million) in 2006.
Negotiations continued through the night and Wednesday morning. Unions representing ground staff and cabin crew were negotiating similar productivity gains for Alitalia before moving onto the last - and most difficult - talks concerning job cuts.
The unions said in the statement they were "certain" that these workers, too, would be able to reach a deal with the management.
Alitalia Chairman and Chief Executive Giancarlo Cimoli had set Wednesday as the deadline for the approval of the relaunch plan, which includes laying off about a fourth of the company's 22,000-person labor force and spinning off the company's service operations from the flight business.
The approval of the recovery plan is crucial to the company's survival as it would allow Alitalia to access a euro400 million (US$488 million) loan approved by the Italian government and the European Union. Alitalia says it has only enough liquidity to pay salaries until the end of this month.
However, final agreement could be delayed by a few days to allow the government, which owns 62 percent of Alitalia, to decide on unemployment benefits to ease the pain of the layoffs, Transport Undersecretary Mario Tassone has said.
Still reeling from the massive crisis that hit the airline industry after the Sept. 11, 2001, attacks, Alitalia has been struggling amid cutthroat competition from discount carriers and consolidation among established players. The company has posted an annual profit only four times in the last 16 years.
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NASA Develops New Tool For Airline Accident Prevention
Michael Braukus
Headquarters, Washington
(Phone: 202/358-1979)
Michael Mewhinney
Ames Research Center, Moffett Field, Calif.
(Phone: 650/604-3937)
Laurent Bloch
SAGEM Avionics, Grand Prairie, Texas
(Phone: 972/314-3603)
A "tool" created by NASA scientists to alert airline analysts to potential, unanticipated problems and to enhance safety and reliability in the industry is available for licensing.
Scientists at NASA's Ames Research Center (ARC), Moffett Field, Calif., developed a "Morning Report" of atypical flights. It automatically identifies statistically extreme flights to airline flight operations quality assurance (FOQA) analysts. The new software may help analysts identify the precursors of incidents or accidents.
"The Morning Report offers a promising method for identifying unanticipated problems and opportunities in flight data recorded by commercial aircraft," said Thomas Chidester, Aviation Performance Measuring System manager at ARC. "The Morning Report implements concepts from flight science and statistics into practical applications usable in industry," he added.
"Our goal is to focus the limited time of experts on analyzing the most operationally significant events, while broadening and deepening their analytical capabilities," Chidester said. "The challenge is finding and understanding key information from the mass of data generated by aircraft and collected by data recorders," he said.
Only a small portion of the data generated by flights are analyzed through the identification of situations where aircraft operate outside pre-defined ranges. The Morning Report tool may be able to interpret more aircraft data for improved analysis. Unlocking information contained in data sets has the potential to enhance safety, reliability and the economics of flight operations.
The Morning Report tool has attracted the attention of industry-leading providers of flight data analysis software, looking to improve their analysis tools. SAGEM Avionics of Grand Prairie, Texas, is the first to license the technology.
"The licensing of this analysis tool from NASA to SAGEM Avionics is another shining example of how NASA developed technologies are transferred to the private sector to help benefit the American people," said Lisa Lockyer, chief of the Technology Partnerships Division at ARC.
The tool provides airline quality assurance personnel with a list of atypical flights in an easy tabular format, highlighting the most extreme five percent. These flights may include groups of flights experiencing an operational problem or unique situations encountered by single flights. Highlighted flights are examined by FOQA analysts to determine whether they represent operational problems.
The Morning Report tool was developed by NASA's Aviation System Monitoring and Modeling project under the Aviation Safety and Security program. NASA's Aeronautics Research Mission Directorate, Washington, manages it.
For information about the Aviation Performance Measuring System and the Morning Report, visit:
For information about NASA on the Internet, visit:
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US Airways' parts may hold more value than airline as a whole
By Dan Fitzpatrick, Pittsburgh Post-Gazette
If US Airways cannot make it out of bankruptcy again and has to liquidate, would a sale find any buyers?
Yes -- and no.
In a weak aviation industry, no one is likely to purchase the entire operation and keep a high-cost, money-losing airline intact, analysts said. Even US Airways, which will cease its common stock trading next Wednesday, acknowledged this in a recent bankruptcy filing, saying there "is no white knight waiting in the wings to purchase a high-cost airline that cannot compete."
But there may be companies willing to take a look at the airline's parts -- its planes, gates, slots and engines. Most of these assets have been pledged as collateral on loans, making the entire operation ripe for liquidation if creditors give up hope.
While such an event would be horrific for US Airways' 28,000 employees, local airline analyst Bill Lauer said liquidation might be a good for creditors, who would "come close to being made whole."
Here are some of the more valuable pieces that could be in play:
New York and Washington
US Airways controls 250 "slots" at New York LaGuardia Airport and 334 at Ronald Reagan Washington National Airport. Awarded by the Federal Aviation Administration, slots provide the right to take off or land, and there are two for every flight. Analysts place a high value on the slots at LaGuardia and Reagan, because that is where most carriers want to be, feeding off the huge traffic in both cities, and because the airports are slot-restricted -- that is, new slots can't be added.
"Given the attractiveness of those East Coast markets," said Fitch Ratings airline analyst Bill Warlick, the slots "could command fairly attractive values.
How attractive? This month, American Appraisal Associates valued the slots collectively at $462.2 million. Another appraiser, Back Aviation Solutions, valued them at $355 million last December.
Slots in both cities also form part of US Airways' New York-Washington-Boston shuttle, which was a big money maker for US Airways in the 1990s and has been eyed in recent years by American Airlines.
But Warlick predicts that low-cost carriers such as JetBlue Airways or AirTran could see the shuttle as an opportunity to increase their market presence in key East Coast cities, although JetBlue's chief executive said Monday his airline is "not really prepared" to take over some US Airways routes. Still, "JetBlue could become huge if they operated the shuttle," Warlick said.
American, one of the few large carriers with a lot of cash left, could still buy part of the shuttle, and Continental Airlines could use a US Airways liquidation to strengthen its hand in the New York area. It already has the right of first refusal on US Airways' terminal at LaGuardia.
The planes
Analysts believe that US Airways -- more precisely, its lenders who own them -- may have more problems selling its planes than the slots or gates. A lot of the industry's older airplanes are already sitting unused, in deserts out West. Only the newest and most attractive jets are likely to be sold.
"I think the planes can be disposed of, but the market is more limited, that's for sure," Lauer said.
US Airways has 283 jets. Of those, its Airbus planes are in highest demand, according to Warlick of Fitch Ratings. US Airways has 118 narrow-body Airbus jets and nine wide-body A330s, which fly trans-Atlantic routes. The rest of the fleet is comprised of Boeing planes that are older and less desirable, Warlick said.
Philadelphia
Southwest Airlines, which recently challenged US Airways by moving into Philadelphia, may be interested in buying more assets there if US Airways goes under. US Airways controls two-thirds of the 120 gates at Philadelphia International Airport.
Its Dallas-based low-fare competitor, on the other hand, flies 41 flights out of four gates but wants more.
Others may, too, if US Airways goes away. Because Philadelphia is such a large market, drawing from a population base as large as 10.8 million, US Airways' gates there "could be sought after," Warlick said.
Airline's crisis hurts Alabama
By Elliot Blair Smith, USA TODAY
In Alabama, the Crimson Tide now refers to US Airways' losses.
State pension chief David Bronner saw a big upside when he paid $240 million for a 36.2% stake in the distressed airline in 2002.
Since then, Bronner, 58, has pledged hundreds of millions of dollars more in pension loan guarantees and lease obligations to US Airways on behalf of the plan's more than 290,000 active and retired state employees, teachers and judges. He also has taken a second job as US Airways' chairman.
Despite being named Alabama's "official airline" in November, however, US Airways nose-dived into bankruptcy court for a second time this week. Bronner now faces the possibility his pension plan could take a major hit.
In an interview Tuesday, Bronner said state retirees' exposure to US Airways is less than 1% of their total $25 billion in savings. "That don't even show up, it's a 1% deal," said Bronner, a towering red-headed intellectual who favors blunt talk and Cuban cigars.
But the setback galls a man who has enjoyed a Midas touch for most of a three-decade career. Alabama's three state pension funds have performed near the upper 25% of their peer group for the past 10 years.
Wilshire Associates managing director David Jack said Alabama's attempt to invest in US Airways on the cheap wasn't a bad contrarian bet. But he says the decision to snap up the distressed airline's stock and debt directly, rather than through partnerships with experienced professionals, exposed the state to embarrassment as well as losses.
"One of the classic lessons of the US Air investment is as a case of headline risks," says Jack. "It wasn't a big dollar loss — meaningful, but not all that significant to their plan — but you get on the front pages of the nation's newspapers for five days in a row. Most institutional managers try to avoid that."
Bronner is far from shy.
"If you are afraid of failing all the time, you are equating yourself, and the best you ever can be, with mediocrity," Bronner said, whose career brought him from his father's pool hall in southern Minnesota to the University of Alabama, where he simultaneously pursued a law degree and a Ph.D. in finance.
While teaching law at the university in the 1970s, he went after the pension fund job.
"He was obviously very bright and willing to stake out positions," recounts Paul Hubbert, a pension fund trustee and executive secretary treasurer of the Alabama Education Association. "We decided to take a chance on him."
Bronner developed a unique vision for transforming the state's woefully underfunded pensions — only 25 cents had been saved per $1 in obligation to state workers — and for developing Alabama's backward economy. He discovered his stock-picking clout could be wielded to persuade CEOs to invest in his adopted state. Two prizes: Mercedes-Benz and Hyundai, whose auto plants helped replace disappearing textile jobs.
Bronner also built premier golf courses, hotels and the state's largest office tower with pension funds. And he erected a small empire of broadcast and newspaper properties that he aggressively employs to promote the state.
"Frankly, I think he has done more for Alabama than any of the next five or 10 people put together," says Bell Microproducts CEO Don Bell, who built a factory in Alabama in exchange for a $180 million pension loan in 2000.
Bronner's not ready to throw in the towel on the US Airways stake.
"If you could tweak it or change it a little bit," says Bronner, who intends to continue participating in US Airways' turnaround efforts, "you have an opportunity that is really quite exceptional."
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Fla. firm plans zero-gravity airplane flights
J. LYNN LUNSFORD, The Wall Street Journal
Since the beginning of the space age, anybody who wanted to experience weightlessness either had to be an astronaut or have connections to get a ride on the National Aeronautics and Space Administration's vaunted "Vomit Comet" jetliner, where the weightless scenes for the movie "Apollo 13" were shot.
Starting today, a company called Zero-G Corp. will begin selling rides to all comers who want to see if their stomachs have the right stuff to endure two hours on a modified Boeing 727 named G-Force-One. Like NASA's aging research and training plane, G-Force-One will be flown through a series of 10,000-foot-high roller-coaster arcs called parabolas. At the top of each arc the passengers become weightless and can flip, float and tumble inside a padded section of the cabin for about 25 seconds.
"For the first time, average people will be able to feel what it is like to be weightless," says Peter Diamandis, co-founder and chief executive of closely held Zero-G.
Zero-G officials initially expected to fill two trips on their plane during the first month of operation, but through advance word of mouth and selective marketing they already sold out 20 flights before the public launch of the business. Individual tickets are $2,950 for a full day of training and the airplane ride.
It isn't without risks. Passengers must sign forms attesting to their medical fitness. People with certain conditions such as heart ailments as well as pregnant women won't be permitted to join in. Those who are accepted are warned that even the toughest astronauts sometimes get sick to their stomach in zero gravity.
So far, the largest demand is coming from companies that book employee-incentive awards for corporations and "are tired of golf classics or cruises," Dr. Diamandis says. Zero-G also has received numerous inquiries from movie studios looking to secure the plane for filming weightless scenes, he says.
Diet Rite, a unit of Cadbury Schweppes PLC's Cadbury Schweppes Americas Beverages, has signed on as Zero-G's launch sponsor to help publicize its zero-calorie, zero-caffeine soft drink. Today, Zero-G plans to fly the first of a series of promotional flights for the soda maker from Newark Liberty International Airport in New Jersey; passengers will include bottlers, reporters and a few radio listeners who won call-in contests. During the next few weeks, the plane also will be taken to Los Angeles, Dallas, Detroit, Atlanta and Fort Lauderdale, Fla., for Diet Rite promotions.
Although a ride on the aircraft might seem riskier than one on a commercial flight, the maneuvers are well within a Boeing 727's safe operating range, Boeing and the Federal Aviation Administration say. The airplane, leased from cargo carrier Amerijet International Inc. of Fort Lauderdale, will be operated and maintained under the same basic FAA standards that apply to major commercial carriers.
Both Amerijet and Zero-G spent the past five years working with the FAA to obtain certification for the airplane and the company's operating requirements, including flying more than 1,000 parabolas. "Because it is the first commercial operation like this, we obviously paid close attention," an FAA spokesman says.
With the exception of the promotional tour, all of Zero-G's flights are scheduled to depart from Fort Lauderdale, where the company is based, and travel through a specially allocated airspace over the Gulf of Mexico that is 100 miles long and 10,000 feet deep. Dr. Diamandis calls the space the boundaries for "the world's largest roller coaster."
The plane has room for 27 paying passengers, and the trips will be led by a veteran astronaut. The airplane is divided into two zones. Passengers will start the flight buckled up in a standard cabin setting with normal airline seats. Then, as the plane prepares to enter the parabolas, passengers will move to an empty area of the fuselage that is nearly 70 feet long and has padding on the walls, floor and ceiling. On a typical flight, customers will experience varying degrees of weightlessness, from that likely to be felt on the moon and Mars to total lack of gravity.
NASA's modified KC-135 earned the name Vomit Comet in part because, as a research and training jet, it sometimes would go through as many as 60 parabolas during a flight. Dr. Diamandis says Zero-G's experience has shown that most people can hold their cookies for about 20 parabolas, so Zero-G will limit most flights to that duration or less. "The idea is for people to walk away remembering what a blast it is to be weightless," the California physician says.
The company's investors include Elon Musk, the co-founder of online payment service PayPal. It is the latest of Dr. Diamandis's efforts to feed a growing demand among adventure travelers for space-related experiences. He founded Zero-G in the mid-1990s, about the same time that he co-founded the $10-million Ansari X-Prize Foundation, which is holding an international competition among 27 privately funded teams who are vying to become the first to repeatedly launch a three-person spacecraft to an altitude of 62 miles, the edge of space.
Court: Government must make argument public in airline ID case
PAUL ELIAS
Associated Press
SAN FRANCISCO - The federal government must argue its case in public against a privacy advocate who challenged a directive requiring identification before boarding an airplane, an appeals court has ruled.
The U.S. Department of Justice has refused to even confirm or deny the existence of such a rule. It has argued that national security requires directives dealing with transportation be kept secret.
The DOJ said it needed to file under seal its court papers detailing why the appeals court should throw out Oakland resident John Gilmore's challenge.
The 9th U.S. Circuit Court of Appeals ruled against the government late Friday, attorneys involved in the case said Monday.
"It's wild that the government can't even confirm this most basic security directive that every passenger in the country knows exists," said Susan Seager, a lawyer who was preparing to argue on behalf of several news organizations, including The Associated Press, against the government's bid to seal.
The government is scheduled to file its legal arguments to the court in two weeks, said Gilmore's attorney, James Harrison of Sacramento. A Department of Justice spokesman declined comment.
Gilmore is an Oakland resident who made millions as a founding employee of Sun Microsystems Inc.
He also is an active member of the Libertarian Party and a co-founder of the Electronic Frontier Foundation, a civil liberties group.
On July 4, 2002, Southwest Airlines employees at Oakland International Airport barred Gilmore from boarding a flight to Baltimore after he refused to produce a government-issued, photo identification.
He also refused to allow security personnel to pat him down and search through his luggage instead of producing the identification.
Gilmore went through a similar experience with United Airlines employees at San Francisco International Airport later that same day. Both airlines said they were following federal directives.
Gilmore, who hasn't flown since, sued the government and the airlines in federal court, alleging among other things that the identification requirement violates his right to freely assemble because he can't travel by air.
"Mr. Gilmore's First Amendment rights have been compromised by what appears to be no law at all," Harrison said.
A lower court judge had earlier tossed out Gilmore's lawsuit. He appealed to the appeals court, which is considering the case.
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Analysis: High-flying airline fell to hub costs
By Dan Fitzpatrick, Pittsburgh Post-Gazette
Once a profitable airline, US Airways is again struggling for its very survival in bankruptcy court.
How did this happen?
As it turns out, the story of the company's transformation from industry high flier to an inefficient, money-losing enterprise is two decades old. Founded 67 years ago as All-American Aviation, US Airways is a relic of a time when airline prices and routes were set by the federal government.
When the United States deregulated the industry in 1978, it opened the door to unfettered competition and ushered in a new set of problems not only for US Airways, but for all the so-called "legacy" airlines that can trace their origins back to the dawn of aviation.
Beginning as a short-hop air mail carrier financed by a member of the duPont family and taking its first paying passengers on a 1949 flight from Washington, D.C., to Pittsburgh, US Airways was one of the nation's most successful airlines in the years immediately before and after deregulation, when it changed its name from Allegheny Airlines to US Air, dominated short-haul routes on the East Coast and enjoyed a near-monopoly in Pittsburgh, its largest hub.
In the early 1980s, it was also one of the most profitable airlines around, praised on Wall Street for its management strategy. Under Chief Executive Officer Ed Colodny, known to employees as "Uncle Ed," it built large bases in Charlotte and Philadelphia, using a "hub-and-spoke" system to bring passengers from smaller cities into larger ones, connecting them to almost any place in the United States.
But its slow slide began in the latter half of the 80s, when a merger frenzy forced Colodny to spend almost $2 billion acquiring California carrier Pacific Southwest Airlines and North Carolina carrier Piedmont Aviation. The purchases saddled US Airways with high labor costs, debt, an array of fleet types and a clash of cultures. It also made the fateful decision to raise wages at Piedmont and PSA in an attempt to maintain labor peace -- a decision US Airways would later try to undo.
The mergers left turbulence that trailed well into the early 1990s.
In 1991, US Airways abandoned most of PSA's routes in California and the Pacific Northwest it had acquired only three years earlier, not able to match prices offered by Dallas low-fare pioneer Southwest Airlines, which kept its costs down by flying from one point to another, bypassing expensive hub operations.
In 1993, the airline predicted that ultra-efficient Southwest would expand to the East Coast, but then was slow to respond when Southwest launched service that year from Baltimore, a US Airways hub. Airline Chief Executive Officer Seth Schofield said in March 1994, "I don't think anyone anticipated how quickly . . . these low-fare, low-cost operators would intrude in our territory."
Schofield pared routes, created new scheduling systems to help fill planes and speeded the turnaround of jets between flights, but he failed to pry $500 million in concessions he had sought from unions.
The airline made money again in 1995, as the national economy recovered, and the arrival of Stephen Wolf as CEO in 1996 coincided with the best run by the carrier since the 1970s and early 1980s. Wolf eliminated the redundancies from the mergers in the 1980s, replacing many of the aging, costly-to-maintain planes with new European-made Airbus jets, and changed the name, colors and logo. of the airline in an attempt to shed its regional roots and portray it as a national carrier with global cachet.
The airline continued to earn profits through the latter half of the 1990s, but it plunged into the red again in the spring of 2000, as it pushed for a merger with the much-larger United Airlines. The deal collapsed amid antitrust concerns in August 2001, followed a month later by the 9/11 terrorist attacks.
While all airlines suffered from the drop-off in travel after 9/11, US Airways arguably was hit the hardest, with business travel plunging in New York and Washington, D,C., two US Airways strongholds. Eleven months after the attacks, the airline filed for bankruptcy and emerged in March 2003 with $900 million in federal loan guarantees and $2 billion in savings wrested from unions, aircraft lessors and suppliers.
Still, that was not enough to solve US Airways' problems.
Less than a year later, the airline still had the highest costs in the industry and went back to its unions, asking for more.
Many analysts now say that US Airways did not cut enough in its last bankruptcy. But its larger dilemma is one facing all "legacy" airlines -- how to make money competing against a new class of carriers such as Southwest and JetBlue Airways that operate without the costly hub-and-spoke systems that require lots of gates and personnel.
For US Airways, which can no longer afford to cover its high costs with high prices, the answer is to dismantle part of the system it built in the 1980s, cutting flights and service in Pittsburgh this fall by a third, and adding more point-to-point flying in big East Coast cities and the Caribbean.
Pittsburgh, in fact, is suffering most from US Airways' reorganization, having lost its "hub" status and dropping from almost 13,000 airline employees before 9/11 to fewer than 8,000 today. Local officials expect more to lose their jobs in the months ahead.
But will it be enough? Or, is it too late?
"US Airways has spent the past 10 years trying to chip away at costs without fundamentally reorganizing its model," said Tom Petzinger, author of the 1995 book "Hard Landing: The Epic Contest for Power and Profits That Plunged the Airlines into Chaos." In a free market, he added, "even the most potent monopolies don't survive."
Latest mystery about airline food is if you'll get any
Jane Engle, Los Angeles Times
Figuring out what and even whether you'll be fed on a flight is becoming almost impossible because the rules are complicated -- and constantly shifting. Even airlines have trouble keeping up.
Carol Scrivner of San Gabriel, Calif., found herself on the losing side in the airline food fights in June when she and her husband, Joe Parker, flew Alaska Airlines from Ontario, Calif., to Seattle.
They didn't pack a meal for their 2½-hour, 12:29 p.m. flight because their ticket documents listed "lunch."Lunch" turned out to be a tiny cup of vanilla ice cream, Scrivner said.
When she complained to a flight attendant, he said, " 'We don't do that anymore,' snickered and walked away." A delayed departure stretched the couple's on-board stay to 3 1/2 hours.
When I told Scrivner's story to Alaska Airlines spokesman Sam Sperry, he said the airline's policy since late last year had been to serve snacks, not meals, in coach on flights that are expected to last 1 1/2 to three hours and occur during mealtimes. But the company hadn't updated its reservation system to reflect that policy.
"This is our fault," Sperry said. "It was clearly a mistake."
In a flurry of industry changes, some trends have emerged: Free food and special meals are disappearing. It won't be long before coach fliers in the United States will have to carry a lunchbox or cash to get what they want to eat on board -- or to get anything at all.
That's the situation at US Airways, which ended free meals in coach on domestic flights more than a year ago. You can buy In-Flight Cafe food on most flights of 700 miles or longer, said spokeswoman Amy Kudwa. A snack box costs $5, breakfast $7, lunch or dinner $10. Cash only.
Outsourcing the meals saves the airline money, Kudwa said, although predicting demand isn't easy. As of a few months ago, about 30 percent of passengers bought meals, but the rate varied widely by such factors as flight length and whether the flight was at mealtime.
"Some flights you sell out; on some you have food left over," she said. As a result, there's no guarantee you'll get a chance to buy food even where the program is offered, especially if you're sitting in the last row.
US Airways, which once served 16 types of special meals, such as vegan and gluten-free, no longer offers them in coach, and starting Wednesday, it's putting a halt to them in first class, too, ending all special meals on domestic flights.
"We realize this does represent an inconvenience to customers with specific dietary needs," Kudwa said. But she said special meals were "very seldom used."
"The cost of supplying this service and the demand from customers don't match," she said.
US Airways has gone further than some competitors in shrinking free food service. But the practice is widespread as cash-hungry major airlines, squeezed in the vise of high fuel costs and the low fares they must charge to compete against low-cost carriers, hunt for savings.
Here are some airlines that have made recent, noteworthy changes in their food policies; these apply to domestic coach flights except where otherwise stated, and exceptions are frequent:
Alaska: A couple of years ago, the airline explained its policy as "meals at mealtimes," except on some short flights.
Now the general rule, Sperry said, is to serve a snack on flights that are expected to last 1 1/2 to three hours and occur during mealtimes; a hot entree on transcontinental flights and some others; and a sandwich at mealtimes on non-transcontinental flights that are longer than three hours. Special meals are available with notice.
Continental: You can expect a free snack or meal on flights lasting three hours or longer, even if the flight is outside normal meal hours, said spokeswoman Julie King. Otherwise, expect food in coach on flights of more than two hours that occur during a mealtime, such as 11 a.m. to 1 p.m. The airline runs its own on-board catering and doesn't offer food for sale.
More than a dozen special menus are available, including Hindu, Muslim, kosher and diabetic. But last year, the airline began limiting special meals to certain flights, mostly long-haul transcontinental or foreign routes. (The list is posted at www.continental.com.)
"We look in every nook and cranny to cut costs," King said in explaining the changes. She also noted that fewer than 5 percent of Continental's passengers order special meals.
Northwest: The airline serves free food on flights from its hubs in Detroit, Memphis and Minneapolis to the West Coast and Hawaii (but not to the East Coast) that occur at mealtimes, also on flights from Milwaukee and Indianapolis to Los Angeles. Special meals can be ordered. First class gets free food on flights of at least two hours that occur at mealtimes.
Meals can be purchased for $5 to $10, cash only, on about 220 flights, up from a dozen when Northwest began the program in January 2003.
United: For flights shorter than 3 1/2 hours, spokeswoman Robin Urbanski said, free beverages and cocktail snacks are served on United; the company's low-cost carrier, Ted, adds some buy-on-board items such as cookies and potato chips.
On most longer flights, up to five hours and before 8 p.m., on both United and Ted, there are no free meals, but you can buy food on board. Transcontinental flights still offer free food, including 17 special meals.
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Airline's retirees adjust to lost pay
US Airways pilots, promised $120,000, may now get $28,585
KERRY HALL
Staff Writer
Don and Patricia Burrows dreamed they'd spend retirement traveling and riding their Harley-Davidson motorcycles.
But five years after Don retired as a US Airways pilot, the hogs are gone, sold to trim expenses. Now, the Denver, N.C., couple worries they may outlive their money.
Like many of the 13,700 US Airways retirees nationwide, the Burrows depend on company pension payments to help keep them comfortable.
But the retirement payments US Airways promised its pilots are disappearing. And with the airline in danger of entering bankruptcy court a second time, other employees' pension benefits are now at risk -- along with retiree health benefits and life insurance.
More than 2,300 US Airways retirees live in North Carolina, and more than 200 are in South Carolina.
When companies enter bankruptcy, a growing number are cutting back on promises they made to support their workers in retirement.
US Airways has not made public any changes it may make to retirement benefits. But some industry observers say most major airlines -- including US Airways -- simply can't afford the expensive retirement packages they promised workers years ago.
"The money isn't there," said Mike Boyd, an aviation consultant. "The airline industry can no longer support the kind of benefits and the kind of salaries that it could at one time."
In 2003, US Airways eliminated its pilots' pension plan, replacing it with a less-generous package. A typical pilot who retired at 60 and was promised $120,000 in annual pension payments may now get about $28,585.
"We have no idea when the next shoe is going to drop," said Don Burrows, 65. "I think it's a moral quandary that corporate America has. When you say you'll do something, you've got to do it."
James Klein, president of the American Benefits Council, a Washington-based trade group representing the employee benefits system, said a bigger problem may be companies dropping their retiree medical benefits.
During the past 15 years, the number of employers offering retiree health benefits dropped from 66 percent in 1988 to 38 percent in 2003, Klein said.
Under bankruptcy protection, a company must prove good cause for reducing retiree benefits, a case that's fairly easy to make, said Lynn LoPucki, a UCLA Law School professor.
"There's just no special treatment for the pension rights of employees," LoPucki said.
Burrows flew with US Airways for 15 years and retired in 1999. Five years ago, he had almost $100,000 in stock options and US Airways stock.
In April 2003, his monthly annuity payment dropped from $1,700 to $580. Months later, it stopped altogether. His stock options and US Airways shares are now worthless.
When the Burrowses moved to Charlotte in 1996, he knew the airline was struggling. They chose a smaller house on Lake Norman, across from Duke Power's McGuire nuclear station.
To help pay bills, Patricia, 60, works as a house supervisor and emergency room nurse at Presbyterian Hospital.
Last month, US Airways asked the Internal Revenue Service for permission to defer $67.5 million in 2004 pension payments for flight attendants and machinists.
Don Ramsey, a retired mechanic and production supervisor, spent more than 30 years with US Airways and its predecessors.
He took a management position 14 years ago thinking his benefits would be better.
Three years into retirement, his monthly benefits have dropped from $3,500 to $1,200. That includes his monthly management pension, which Ramsey calls "a joke" at $119.
Like many US Airways workers, Ramsey sunk much of his salary into US Airways stock. Years ago he had stock worth $500,000. Today, he says, those shares are worthless.
"I could see if I didn't plan (for things), but I did plan," he said. "And it went in the toilet."
Ramsey works part-time at Costco, helping stock inventory and greeting customers. He and his wife used his $35,000 (pretax) severance check to buy a franchise that lets them sell cruise and vacation packages from their home. The family frets over the thought their health insurance could vanish. Already, monthly premiums have risen from $75 to $400.
"I gave 38 1/2 years of my life with (US Airways)," he said. "And I got a slap in the face."
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Feds ask 9th Circuit to seal arguments in airline I.D. case
By The Associated Press
SAN FRANCISCO — The U.S. Department of Justice has asked an appellate court to keep its arguments secret for a case in which privacy advocate John Gilmore is challenging federal requirements to show identification before boarding an airplane.
A federal statute and other regulations “prohibit the disclosure of sensitive security information, and that is precisely what is alleged to be at issue here,” the government said in court papers filed Sept. 3 with the 9th U.S. Circuit Court of Appeals. Disclosing the restricted information “would be detrimental to the security of transportation,” the government wrote.
Attorneys for Gilmore, a 49-year-old San Francisco resident who co-founded the Electronic Frontier Foundation, a civil liberties group, said they don’t buy the government’s argument and that its latest request raises only more questions.
“We’re dealing with the government’s review of a secret law that now they want a secret judicial review for,” one of Gilmore’s attorneys, James Harrison, said in a phone interview. “This administration’s use of a secret law is more dangerous to the security of the nation than any external threat.”
Gilmore first sued the government and several airlines in July 2002 after airline agents refused to let him board planes in San Francisco and Oakland without first showing an I.D. or submitting to a more intense search. He claimed in his lawsuit that the I.D. requirement was vague and ineffective and violated his constitutional protections against illegal searches and seizures.
A U.S. District Court judge earlier this year dismissed his claims against the airlines but said his challenge to the government belonged in a federal appellate court.
Now in his appellate case, Gilmore maintains the federal government has yet to disclose the regulations behind the I.D. requirement to which he was subjected.
“How are people supposed to follow laws if they don’t know what they are?” Harrison said.
The government contends its court arguments should be sealed from public view and heard before a judge outside the presence of Gilmore and his attorneys. The government, however, said it would plan to file another redacted public version of its arguments.
A date for a hearing on the matter has not yet been set.
Security agency to pick up tab on airline-baggage claims
By Leslie Miller
The Associated Press
WASHINGTON — The Transportation Security Administration said yesterday that it will pay an average of $110 each to 15,000 airline passengers who claim their possessions were lost, stolen or damaged when their bags were screened for bombs and weapons.
The TSA began inspecting all checked bags at the end of 2002, a security measure ordered by Congress after the Sept. 11 attacks.
The requirement created a new chain of custody for checked bags that goes from the airline to the TSA back to the airline. Airlines previously had sole responsibility for bags after they were checked.
Passengers since have been caught between the TSA and the airlines, who have failed to agree on who would compensate them for missing or damaged items.
TSA spokesman Mark Hatfield said the agency took the initiative to come up with an agreement, but the airlines thwarted the effort.
"We still believe there's a way to divide this responsibility with the airlines, but until that agreement is met passengers deserve satisfaction on their claims so we will move unilaterally to settle their claims," Hatfield said. "It's time to get through the backlog."
The TSA settled 1,800 claims in the past 22 months. The agency now will pay $1.5 million to an additional 15,000 travelers.
Hatfield said 38 percent will be reimbursed fully, 32 percent will receive half what they claimed and 12 percent will receive less than half. Three thousand people will not be reimbursed because missing items were either prohibited or didn't belong to them in the first place.
Air Travelers Association President David Stempler said he's been flooded with passenger complaints about missing or damaged possessions. Many people don't even bother to make claims anymore because the process is so slow, he said.
"A lot of people are just throwing up their hands," he said.
Two dozen screeners in Spokane, New York, New Orleans, Detroit and Fort Lauderdale, Fla., have been charged with stealing from checked bags.
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Big gains, worrisome gaps in aviation safety
Passenger screening poses political dilemma -- attacks on Russian planes a 'wake-up call'
- Alan Gathright, Chronicle Staff Writer
Aviation security has been fortified since the Sept. 11 terrorist attacks, but experts and the federal commission that investigated events leading up to the devastating airliner hijackings warn that dangerous gaps persist.
Despite the government's spending more than $12 billion to improve security since 2001, the Sept. 11 commission warned that passengers are rarely screened for explosives, airport screeners still have trouble catching weapons, and the watch list used to keep dangerous people off planes doesn't include the names of all known terrorists.
Those warnings took on greater urgency after the simultaneous destruction of two Russian airliners by suspected suicide bombers Aug. 24, which lawmakers and experts called a "wake-up call" for the Transportation Security Administration.
"Those (Russian) events usher in a whole new era of threats to commercial aviation,'' Rep. John Mica, R-Fla., chairman of the House aviation subcommittee, told The Chronicle. "My greatest concern is that we have not deployed the technology to adequately detect explosives carried onboard an aircraft.''
Days after the Russian airliner bombings, Mica wrote to TSA chief David Stone urging him to speed up deployment of checkpoint equipment that could detect explosives on passengers' bodies. "We cannot afford to wait any longer,'' he said.
The TSA screens 100 percent of checked luggage for bombs but checks only some carry-on items and occasionally passengers' shoes for explosive traces. The Sept. 11 commission's report warned that the agency "must give priority attention to ... screening people for explosives, not just their carry-on bags.''
Above all, the commission said, the TSA must devise a plan that targets scarce resources against the greatest threats. Security experts say that means abandoning the philosophy that all passengers are equally likely to be a bad guy -- which can subject even little old ladies to additional checkpoint searches -- and instead focusing on those few travelers who fit the profile of likely terrorists.
As it is, Mica said, "We're wasting our time. We're spending 98 percent of our resources harassing people who pose no threat.''
Many security experts agree. "The only way to close these loopholes without bankrupting the country is to do it on a risk-based approach,'' said Robert Poole, a transportation expert at the Reason Foundation, a public policy think tank in Los Angeles.
Such profiling, however, can be a sticky issue. It would almost certainly be based on ethnicity or nationality, something opposed by civil liberties advocates. Current federal policy opposes racial profiling, and the government has fined airlines for practicing it.
Despite the unresolved problems, even critics acknowledge that aviation security has been strengthened since Sept. 11.
Faced with congressionally mandated deadlines to bolster security, the TSA was launched in January 2002 and in less than a year mobilized a 45,000-strong federal screener force to replace the airlines' poorly paid and poorly trained private screeners.
"We have deployed newly trained screeners and thousands of federal air marshals,'' Homeland Security Secretary Tom Ridge told the National Press Club in Washington on Tuesday. "We've hardened cockpit doors on the aircraft; we've introduced state-of-the-art technologies which, from curb to the cockpit, have made airline travel safer.''
The TSA is field-testing new measures at 14 airports. They include a walk-through bomb-screening portal that releases puffs of air, loosening microscopic particles from a passenger's body and clothing that are analyzed for explosive residue; machines that scan passenger boarding passes and driver's licenses to detect if travelers have handled explosives; and a registered traveler program to allow frequent fliers who submit to background checks to use "smart cards" to confirm their identity via iris and fingerprint scans to avoid secondary checkpoint screening.
"I'm looking forward to signing up,'' said Mike Psaros, a frequent business traveler from New York who passed through San Francisco International Airport this week. Post-Sept. 11 security measures "have made travel less convenient,'' he said, "but that's the price we pay for greater safety.''
Still, Mary Schiavo, former inspector general for the U.S. Department of Transportation, cautioned that Congress and the TSA appear too eager to rely on a technological "magic bullet'' to beat terrorists.
She warned the registered traveler program "is giving us a false sense of security,'' because it could be penetrated by an identity thief or terrorist who has lived undetected in the United States for years. "After all, the 9/11 terrorists had frequent-flier accounts, credit cards and a permanent residents' address," she said.
Critics point to other security gaps:
-- Covert government testing of federal screeners and private checkpoint guards employed in a two-pilot program at five airports, including San Francisco, found they performed "equally poorly.'' Last fall, a 20-year-old college student humiliated the TSA by planting bags with box cutters and other prohibited items on at least two flights, then notified the TSA in an e-mail about his crusade to bolster "public safety."
The 2001 law that created the federal screener force allows all airports to begin applying for a return to private screeners -- under strict TSA regulation -- starting Nov. 19.
-- The aviation watch list that airlines are required to consult to keep dangerous people off planes does not include the names of all known terrorists, because intelligence agencies fear a rogue airline worker could tip off terrorist suspects.
Privacy advocates have blocked the TSA's $100 million project to replace the Computer Assisted Passenger Pre-Screening system, which has flagged thousands of innocent fliers -- including Sen. Edward Kennedy, D-Mass. -- for more intrusive searches and questioning at airports.
The TSA will soon begin a less intrusive system, under which the government will adopt a key recommendation of the Sept. 11 commission: taking over name-checking duties from airlines to allow the terrorist watch list to be expanded.
-- While airline flight crews have to undergo the same security screening as passengers, nearly 1 million airport workers with access to planes, cargo and baggage don't.
"We continue to make arrests of ramp workers. There are drug smugglers, gun runners and cargo hijackers working out there,'' said Charles Slepian, a New York security consultant. "From a security point of view, failing to screen ramp workers is an egregious breach of duty to the traveling public.''
US airline industry in tailspin
By KATHERINE GRIFFITHS
NEW YORK - The impact of 11 September 2001 is still being felt in one of the US's largest industries: its airlines.
In the week when the third anniversary of the attacks falls, Delta, the third-biggest carrier, and US Airways, the number six in the industry, have warned that they are in danger of running out of cash.
They have said swingeing job losses and pay cuts are the only way to save the airlines from filing for Chapter 11 bankruptcy protection.
While the airlines' problems have been compounded by the rocketing cost of oil, the story of distress in the sector has become all too familiar in recent years, with most in the American aviation industry pointing to the events of 9/11 as the catalyst for difficulties they are still trying to deal with today.
In the aftermath of the terrorist atrocities, airlines have to deal with a combination of the global economic slowdown as well as problems specific to their industry.
Customer numbers plummeted as people feared follow-up hi-jackings of planes, while insurers hiked aviation premiums. The impact over the past three years has been sector-wide losses of US$23bn ($35bn), the US department of transport said.
The losses plunged the country's second-biggest carrier, United Airlines, into bankruptcy within a year of the 11 September destruction.
If US Airways has to file for Chapter 11 - possibly as early as this week - it will be the second time the company has run out of money.
To turn the airlines around will require dramatic and unpopular action, experts have warned. Indeed, unless they were to embrace radical restructuring, the long-established carriers face a "death spiral" which might see their brands survive, but not their current ownership, according to Vaughn Cordle, an analyst at the Washington-based think-tank Airline Forecasts.
He said: "There has been a confluence of industry-wide issues and micro-economic issues which are conspiring to force companies either to restructure or face liquidation."
While British and other airlines around the world have suffered in the past few years, in part thanks to 11 September, most major players have identified the challenges and are implementing wide-ranging programmes to deal with them.
In contrast, many industry experts believe their US equivalents have been slower to acknowledge the extent of their problems, in part because of the financial aid America's Congress put in place to help airlines in the immediate aftermath of 11 September.
The distribution of US$1.5bn of federal aid - one of the largest ever government bail-outs - was made to a group of airlines to cope with the short-term impact of the events.
That provided a prop to many players in need of drastic pruning, critics of the plan say.
Peter Fitzgerald, a Republican from Illinois and the only senator to battle the political tide and vote against the bail-out, said in a recent report: "There are no barriers to enter the airline industry. There shouldn't be barriers to exit.
"We have funnelled lots of money to the airlines but even with record traffic they are still financially unviable and riven with debt. The government took extreme measures to restore the health of airlines and it hasn't worked."
Those problems, analysts have said, were the huge operational costs that airlines incurred during the economic boom of the 1980s and 1990s, when increasing numbers of people made flying their preferred method of travel, especially in business, where margins are fattest.
Reflecting the lack of pressure on costs, the sector was able to pay its pilots not only hefty salaries, but also to grant them generous pension plans.
It is a different story now. Mr Cordle has just completed an analysis showing that, despite the fact that passenger numbers have climbed back above the pre-11 September levels, airlines' yields are falling.
"The mixture of business to leisure travel is worse as there are plenty of travel substitutes for companies now such as video-teleconferencing.
"There is also more transparency for consumers on travel costs due to the internet, which is destroying the legacy carriers' ability to charge a premium. Low-cost operators now make up 28 per cent of the market and are the price makers," Mr Cordle said.
Airlines have been hampered in their attempts to fight the increased competition because they are first trying to cut their historic costs. Pension liabilities alone are estimated at $30bn and are one of the main battlegrounds between airlines and the unions.
Delta, which on Wednesday unveiled a turnaround programme that includes slashing 7,000 jobs, or 12 per cent of its workforce, is also trying to push through US$1bn of cost savings by cutting wages and benefits.
US Airways is attempting to cut its salary and pension bill and United warned last month that it would probably replace its pension plans with less generous benefits in an effort to emerge from bankruptcy.
The proposals come on top of the retrenchment already implemented and, analysts believe, the major players are at last doing enough to see their losses narrow considerably next year.
So the oil price spike to US$48 to US$50 a barrel is particularly unwelcome. According to the International Air Travel Association, crude prices need to average $33 a barrel this year for the global airline industry to break even.
For most of America's aviation industry, breaking into the black seems a distant goal. But to get there at all, they know they have to convince employees as well as investors that their businesses must be radically restructured so that they can compete in the modern battle of the skies.
Airline must give job, pay and compo to sacked worker
Air New Zealand must reinstate a Christchurch worker who was sacked after admitting he may have played golf while on sick leave.
Check-in team leader John Wallace was fired in March after the carrier found details on a website of games he had played while listed as sick.
Mr Wallace told airport management that he may have played on those days, but was not sure, the Dominion Post reported at the weekend.
He said he remembered a day when he went home sick with flu and stress over his mother's death and his wife told him to play a round of golf.
But Air NZ did not accept his explanation and sacked him.
Mr Wallace took his case for unfair dismissal to the Employment Relations Authority, arguing Air NZ had not told him how serious his position was and had relied solely on the website for its information. He said it was possible the website had the wrong dates.
The company said it could not verify information on the website because his original scorecards had been destroyed.
But it concluded that he had played while on sick leave.
However, the authority found Air NZ had acted unfairly, having failed to consider whether Mr Wallace took days off to play golf, or was genuinely sick and later felt well enough to play.
It had also failed to look into his claim that he was stressed.
Air NZ was ordered to reinstate Mr Wallace and give him back-pay. He was awarded $5000 for humiliation, loss of dignity and injury to feelings.
Justice Dept seeks secret judicial proceedings of airline ID case
MAY WONG
Associated Press
SAN FRANCISCO - The U.S. Department of Justice has asked an appellate court to keep its arguments secret for a case in which privacy advocate John Gilmore challenges federal requirements to show identification before boarding commercial flights.
A federal statute and other regulations "prohibit the disclosure of sensitive security information, and that is precisely what is alleged to be at issue here," the government said in court papers filed Friday with the U.S. Ninth Circuit Court of Appeals. Disclosing the restricted information "would be detrimental to the security of transportation," the government wrote.
Attorneys for Gilmore, a 49-year-old San Francisco resident who co-founded the Electronic Frontier Foundation, said they don't buy the government's argument and that its latest request raises only more questions.
"We're dealing with the government's review of a secret law that now they want a secret judicial review for," one of Gilmore's attorneys, James Harrison, said in a phone interview Sunday. "This administration's use of a secret law is more dangerous to the security of the nation than any external threat."
Gilmore first sued the government and several airlines in July 2002 after airline agents refused to let him board planes in San Francisco and Oakland without first showing an ID or submitting to a more intense search. He claimed in his lawsuit the ID requirement is vague and ineffective, and violated his constitutional protections against illegal searches and seizures.
A U.S. District Court judge earlier this year dismissed his claims against the airlines but said his challenge to the government belonged in a federal appellate court.
Now under his appellate case, Gilmore, an early Sun Microsystems Inc. employee, maintains the federal government has yet to disclose the regulations behind the ID requirement to which he was subjected.
"How are people supposed to follow laws if they don't know what they are?" Harrison said.
The government contends its court arguments should be sealed from public view and heard before a judge outside the presence of Gilmore and his attorneys as well. The government, however, said it would plan to file another "redacted" public version of their arguments.
A hearing on the matter has not yet been set.
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Cabin Crew Member Suspended after Runway Accident
By Victoria Mitchell, Chief Reporter, Scottish Press Association
A cabin crew member has been suspended amid allegations he lost his temper with a senior colleague while treating a man who was injured during a fall down aircraft steps, it emerged today.
It is understood the crew member has been accused of shouting at the female member of staff while they were both attending to the injured man.
The 40-year-old holidaymaker, who has not been named, fell down 10 steps on to the runway at Tenerife airport on Friday evening.
The two crew members stemmed heavy bleeding with blankets from onboard the Boeing 757-200, which had come from Glasgow International Airport.
But, according to insiders, tempers flared and a complaint was made against the crew member by another member of staff.
Meanwhile the man from Paisley in Renfrewshire was rushed to a hospital accident and emergency department near the airport.
He is at the Costa Ager hospital where he received stitches and was being seen by a plastic surgeon.
The man is thought to have lost hair and skin from a large part of his head.
It is understood he was wearing sandals when he slipped and jumped about 10ft to avoid hurting other passengers in front of him, landing head first on the ground.
The TCX 519K flight with seven crew and 234 passengers on board was operated by Thomas Cook Airlines.
A spokesman said: “The cabin crew reacted quickly and professionally, making use of medical training skills and equipment on board the aircraft to attend the injured passenger.
“Paramedics were immediately called to the incident and the passenger was taken to hospital.”
Of the alleged incident the spokesman added: “I can confirm that a male steward has been suspended following a complaint of misconduct.”
The injured man is expected to be released from hospital tomorrow.
Airline is adding to cockpit security
United installs steel barriers
By Jon Hilkevitch
Tribune transportation reporter
United Airlines said Tuesday it is installing steel barriers that can be quickly fastened across front aisles of planes to protect pilots from attacks when the cockpit door is opened during flight.
The voluntary security move, the first by a U.S. airline, goes beyond the reinforced cockpit doors mandated by the Federal Aviation Administration after the suicide-hijackings of four airliners by terrorists on Sept. 11, 2001, authorities said.
"We've always been intent on taking security an extra step with a secondary barrier to prevent unauthorized access to the cockpit and protect passengers and crew members from potential harm," United spokesman Jeff Green said.
Terrorists commandeered two United planes in the Sept. 11 attacks, crashing one into the south tower of the World Trade Center in New York. The second plowed into a field near Shanksville, Pa., as passengers tried to prevent the hijackers from flying into a target thought to be the White House or U.S. Capitol.
The security barrier, which Green said looks somewhat like a child gate used in a home, is made of steel cables and extends from the aircraft's floor almost to the ceiling. The devices can be slid into a locking position to wall off the galley, forward lavatory and cockpit.
The airline has received FAA approval to mount the barriers, starting with United's Boeing 757 fleet, officials said.
Airline and federal security officials declined to say whether United's decision to build the double-protection system was linked to recent reports from some flight crews at several airlines about suspicious behavior among passengers.
Some individuals reportedly have made aggressive moves toward the cockpit area or disobeyed orders from flight attendants to return to their seats--situations that the crews interpreted as possible tests by terrorists of on-board security. In some cases, the passengers attempted to flush out any undercover federal air marshals on the flights, according to the Air Line Pilots Association.
The strengthened cockpit doors ordered by the FAA are bulletproof and designed to withstand a hand grenade exploding. But the flight deck still becomes vulnerable when the cockpit door is opened while pilots use the lavatory or receive meals.
Since Sept. 11 all airlines have instructed flight attendants to coordinate communication with the pilots and block access to the cockpit with beverage carts when the cockpit door is open. But the carts would have limited ability to slow down hijackers, officials said. In addition, unsecured carts pose a danger if they are bounced around by turbulence.
FAA officials said the steel barriers, while an improvement over the carts, are not impenetrable.
"The secondary barriers are a visual restraint as well as a physical one," FAA spokeswoman Diane Spitaliere said.
The barriers would delay an intruder from getting beyond the galley and into the cockpit, said Amy von Walter, a spokeswoman for the Transportation Security Administration. In tests at United's engineering base in San Francisco, the cables withstood the force of beverage carts rammed into the barrier.
Israel's El Al Airlines and some European air carriers have installed bulkheads containing walls at the front of aircraft that completely separate the pilots from the passenger cabin. Pilots enter and exit the aircraft by separate doors. But retrofitting would be extremely expensive to carry out on more than 6,500 planes in the U.S. airlines' fleets.
United declined to say how much the barrier system is costing to install on its 500 aircraft.
Green said United has installed the barriers on 25 of its 757s and plans to finish the 757 fleet of 97 planes in October. He said the rest of United's aircraft will be outfitted with the barriers over the next year.