The International Association of Machinists began negotiations yesterday with Southwest over a new contract for the airline's customer service and reservation agents. The current IAM agreement at Southwest becomes amendable Nov. 10 and has been in effect since 1997.
American and United have backed away from funding Chicago O'Hare's ambitious World Gateway terminal expansion project, asking the city to postpone construction. They say it makes little sense for them to spend large sums of money on the terminals while they are being forced to cut operational costs drastically. Construction on the $3.6 billion project, which was to be financed to a large part by the airlines and passenger facility charges, was scheduled to begin next year.
Northwest yesterday increased its paper ticket surcharge for customers on leisure fares and frequent flyer award tickets from $10 to $25. The fee to convert existing e-tickets priced at leisure fares or free tickets into paper will also increase from $10 to $25. Northwest in June started the $10 fee for paper tickets in markets where e-tickets were available. The carrier said the $25 surcharge will not apply to customers flying on business fares.
Alaska Airlines next week in Seattle will dedicate two new Boeing 737-900s named in honor of former CEOs Ron Cosgrave and Bruce Kennedy. "The two men were chosen for the honor for playing key roles in the history of Alaska Airlines," the airline told employees. Cosgrave led the airline to profitability in the early 1970s, and Kennedy guided it through deregulation and growth in the 1980s. Currently, Alaska has one aircraft that carries a name: The Spirit of Alaska. The 737-400 is dedicated to all Alaska employees.
The old FAA aircraft control tower at Portland, Ore., Airport last week was dismantled and hauled away after more than 40 years of service. Demolition workers positioned scaffolding around the sides of the tower and used welding torches to disassemble the structure piece by piece. The 100-foot-tall control tower, one of the oldest structures at the airport, was used from 1958 to 1999. FAA's new 255-foot tower replaced the building Dec. 5, 1999.
Air Canada has installed the Passur radar and software system at its London Heathrow hub. Passur uses a system developed by its parent company, Megadata, that listens to FAA radar and aircraft responses to provide aircraft location updates every 4.6 seconds. The additional software used by Air Canada and most recently Continental Airlines (DAILY, Aug. 16) takes the updates from the Passur system and provides airline employees with arrival data, position information and irregular operation alerts.
Delta next month plans to start code-share service on South African Airways' flights from Johannesburg to Kampala, Uganda. The flights will begin Sept. 1 and operate three times per week with Boeing 737s. Delta and SAA provide direct code-share service from New York Kennedy and Atlanta to Johannesburg and Cape Town. Delta also code shares on SAA flights from Johannesburg and Cape Town to Durban, Port Elizabeth, East London and George, South Africa; Nairobi, Kenya; Windhoek, Namibia; Dar es Salaam, Tanzania and Lusaka, Zambia.
International Association of Machinists (IAM) claims that money Boeing has used for stock buy-backs to bolster its position on Wall Street would more than meet demands the union is seeking in current contract negotiations. "Boeing has pulled US$10 billion cash out of the company in the last five years," said IAM spokesman Matt Bates. "They're proposing another US$2-$3 billion this year. A fraction of that money would settle all the issues in these talks."
DOT is extending for 30 days, until Sept. 23, the period for its informal review of the proposed United-US Airways reciprocal code-share and frequent-flyer agreement, but it has not opened a docket on the carriers' request despite industry urging. In a notice to be published in today's Federal Register, DOT said it "concluded that we need additional time" to determine whether the agreements "would significantly reduce competition." DOT noted it has "been consulting with the Justice Department," which last year turned down the proposed merger of United and US Airways.
Lufthansa surprised financial analysts yesterday by more than tripling its operating profit in the first half of 2002, to EUR332 million, confirming the relative recovery of major European carriers compared with their U.S. peers. "Despite the sluggish economic climate and the aftermath of the terror attacks, we performed outstandingly and thus strengthened our leading position in international competition," said the group's chairman, Juergen Weber.
United plans to start new seasonal Saturday-only service between Denver and Mexico City. The service will operate between Dec. 14 and April 26, 2003, with Airbus A319s. With the addition of service from Denver, United will serve Mexico City from all its domestic hubs.
American Trans Air next month will stop operating its underused L-1011s as part of its schedule service operation as the aircraft have been a drag on earnings. As a result, the airline's planned capacity will start falling next month, and executives vowed to reduce capacity through 2004 in addition to trimming more costs and conserving cash. "The airline industry must match capacity to demand immediately if the revenue environment is to improve," said CEO George Mikelsons.
Austrian Airlines churned out a profit in the first half of 2002 and aims for an operating profit of EUR24 million for the whole year thanks to successful restructuring, the carrier said this week. AUA posted earnings before interest and tax (EBIT) of EUR29.7 million, compared with a loss of EUR31.5 million a year ago. Pre-tax profit was EUR 4.3 million, up from a loss of EUR70.2 million, while sales fell 0.4% to EUR1.03 billion.
Boeing yesterday named Paul Walters to the new position of regional VP-Southeast Asia. Based in Kuala Lumpur at the Boeing-Southeast Asia headquarters, Walters will help expand Boeing's profile and presence in the region beyond Singapore and Malaysia, where Boeing is now well-represented.
The Port Authority of New York and New Jersey said it supports efforts to change the name of Newark Airport to Liberty International Airport to commemorate the events of Sept. 11. The Port Authority said it "will work with Governors McGreevy and Pataki, our Board of Commissioners and the city of Newark to see that this fitting tribute becomes a reality."-AS
Raytheon announced it has achieved initial operational capability (IOC) status for a limited production version of its Standard Terminal Automation Replacement System (STARS) in Albuquerque, N.M. This is the eighth limited production version of STARS to be given IOC by FAA.
Although FAA is pushing for a quick decision, the Broward County, Fla., Commission this week decided to defer any action on a proposed extension of the south runway at Fort Lauderdale-Hollywood Airport.
Qantas, steering clear of last year's travel slowdown and the failure of Australian domestic airlines Impulse and Ansett, registered a net profit of A$428 million (US$214 million) for the year ended June 30. This was a marginal increase of A$12.6 million from the previous year's A$415.4 million. Revenue totaled A$11.3 billion, a jump of 11.1%. Passenger revenue grew 13.7%, while revenue passenger kilometers increased 6.5% and yields 6.7%.
Systemwide unit revenues for the U.S. major airlines fell 6.8% in July, according to the Air Transport Association, and were unchanged compared with the June decline of 6.9%. Domestic RASM fell 8.7% in July, an improvement from the 9.6% drop in June. "However, it is clear that the business traveler has still not returned to the skies," according to Merrill Lynch. Despite the news, most airline stocks rallied yesterday.
Emirates recently started service from Dubai to Perth with Boeing 777-200s. The flight will operate in a three-class configuration and will fly every Monday, Wednesday, Friday and Saturday. "We are confident that these flights mark a new chapter in trade and tourism relations between the Middle East and Australia," said Commercial Operations Director Ghaith Al Ghaith.
DOT Secretary Norman Mineta this week said he is filling two long-vacant seats on FAA's Management Advisory Committee air traffic services subcommittee. Appointees Kip Hawley and Philip Brady have extensive transportation experience in industry and government. Brady is president of the National Automobile Dealers Association, a position he will retain. He has also been VP and general counsel for the American Automobile Manufacturers Association.
