By Daniel P. Kaplan, Senior VP, Glassman-Oliver Economic Consultants, Inc. The Civil Aeronautics Board began government regulation of airline-owned computer reservations systems in 1984 to limit the ability of carriers to use their computer systems to diminish competition in air travel markets. Without ever providing an assessment of the impact of the rules, the DOT now proposes to modify and continue CRS regulation regardless of system ownership.
TSA is warning airports that staff cuts mean the agency can no longer guarantee passenger screening of 10 minutes or less, revealed Stephen Van Beek, senior VP of Airports Council International-North America. But TSA contends that wait times at most airports are already well below 10 minutes, so the cutbacks shouldn't hurt too badly.
United created two new airport and sales divisions this week as part of continuing reorganization that it hopes will make it more globally oriented. The airline created a new Worldwide Airport Operations division and a Worldwide Sales and Alliances Division. Larry DeShon, currently senior VP-airport operations for North America, will assume responsibility for the company's airport operations around the world. Graham Atkinson, senior VP-international and alliances, will lead all sales, reservations and alliance activities.
German pilot union Vereinigung Cockpit (VC) expects Lufthansa to outsource large parts of its European operations to regional carriers and low-fare airline Germanwings. VC executive board member Michael Tarp told journalists Germanwings could grow to operating 40 to 70 aircraft within two to three years, according to internal Lufthansa scenarios. Germanwings declined to comment, and Lufthansa said this was pure speculation.
US Airways CEO David Siegel yesterday revealed his airline could see a $50 million revenue gain once the new code-share with Lufthansa is fully implemented, mostly from the code-share flights themselves. Siegel also suggested a $75 million benefit is in the offing if US Air becomes a full-fledged Star Alliance member. Star's board meets later this month in Washington to vote on admittance, which Lufthansa CEO Juergen Weber says he "strongly" supports.
Passenger traffic at Hong Kong International Airport plummeted 68.9% year-over-year in April due to the outbreak of the SARS pneumonia. Hong Kong Airport Authority (HKAA) CEO David Pang reported passenger volume for the month was only 909,000 and passenger flights were down 33.6%. Traffic and flights fell sharply after the World Health Organization issued a warning early last month for people to postpone their trips to Hong Kong and Southern China.
Snowflake, SAS' new low-cost unit launched last March, announced a string of new, eclectic destinations to be included in its winter schedule beginning Oct. 26. From Copenhagen, the carrier will serve Istanbul once a week; from Stockholm, it will serve Beirut once a week. Flights to Belgrade as well as Lyon will be offered twice a week. Snowflake claims its service to the former Yugoslavia is notching successes.
Delta, American and United will get a big liquidity boost today, as the three largest airlines collect nearly 45% of the total funds TSA will provide to U.S. carriers offset security costs. TSA sent out letters yesterday to 66 U.S. carriers informing them that their share of $2.3 billion will be electronically transferred into their accounts this week. The funds have been set aside for expenses and revenue forgone related to aviation security and are required by law to be disbursed by today.
Delta's AirElite Business Jets division renamed its fixed base operation at Cincinnati/Northern Kentucky International Airport the Delta AirElite Jet Center, effective immediately.
One of FAA's major unions says it would take FAA to court to challenge the legality of the agency's threat to send stalled contract negotiations to Congress for resolution. FAA said this week it would invoke a clause in the U.S. Code to send four outstanding contracts to Congress if a new round of negotiations does not lead to agreement by the end of summer (DAILY, May 14). FAA said it has never invoked this clause before but wants to wrap up contract negotiations that in some cases have been running for five years.
Air New Zealand plans to cut capacity by another 2% across its international network through the end of the current fiscal year and defer the addition of a new Boeing 767-300 due to a grim summer outlook due to the SARS pneumonia.
Citing strong traffic recovery in some markets, United plans to add 162 flights back into its June schedule, reinstating most of the frequencies cut in April and May due to the sharp drop in demand during the war in Iraq.
The Department of Homeland Security today will issue a report that advocates equipping commercial aircraft with anti-missile defense systems and names two manufacturers to develop prototypes. DHS will also send out a broad agency announcement soliciting proposals from high technology companies to develop other shoulder-fired missile counter-measures, Sen. Barbara Boxer (D-Calif.), who with Sen. Charles Schumer (D-N.Y.) co-sponsored a bill to provide commercial aircraft with the systems, said yesterday.
Cape Air plans to launch air service next month between Nantucket Island, Mass., and the cape tip town of Provincetown. The two daily flights will be operated with Cessna 402s and will begin June 12. The airline has operated year-round service from Provincetown to Boston for the past 12 years. In addition to operating regional service in Massachusetts, Cape Air has operations in Florida and the Caribbean. -SL
Mexicana last week reached deals with two unions for a 10% cut in labor costs through salary and workforce reductions. The Aviation Pilots of Mexico and the National Labor Union of Aviation Workers represent 894 pilots and 2,333 maintenance, reservation and operations staff. The airline said talks are still underway with the Association of Flight Attendants, which represents 1,397 flight attendants, but it expects a deal soon.
Hawaiian Airlines reached agreement -- subject to U.S. bankruptcy court approval -- with Ansett Worldwide to restructure leases on seven Boeing 767s. Hawaiian said it plans to seek an expedited hearing from the court to approve the agreement.
The Air Line Pilots Association told a House subcommittee last week it would go along with private training for the federal flight deck officer program as long as there is strict federal oversight. ALPA President Duane Woerth said "I think an accommodation can be reached" as long as Congress is satisfied a private facility can give the same quality training as the Federal Law Enforcement Training Center in Georgia.
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A new Eurocontrol air traffic management initiative should considerably boost efficiency and reduce delays for airlines throughout the continent, Eurocontrol Director-General Victor Aguado told The DAILY last week in Prague. Aguado said the project would enable dynamic management of Europe's airspace network and give an accurate up-to-date overview of the commercial aviation system. This should let airlines and air traffic controllers make much better operations decisions.
Even though the U.S. Air Force's fleet is about 30% smaller than it was in the 1980s, its domestic airspace needs are unchanged, says Fred Pease, the service's ranges and airspace director. But the decline does increase the time available for commercial traffic in set-aside areas.
JetBlue didn't bump a single passenger during the first quarter, according to the latest DOT Air Travel Consumer Report, and had only four voluntary denied boardings. Southwest had the highest rate among the major carriers with 1.29 per 10,000 passengers, and AirTran had a rate of 3.36.
