The Brazilian government has started legal proceedings against the country's Big Four -- Varig, Vasp, Transbrasil and TAM -- for forming a "sort of cartel" to increase fares simultaneously and reduce travel agency commissions unilaterally. If found guilty on fare increases, the carriers are subject to fines of 1% to 30% of their gross revenues. United, Continental, American, Delta, British Airways and Lufthansa also reportedly are being investigated, but The DAILY could not confirm this.
Internet travel web site developers Datalex and Sight&Sound Software unveiled plans yesterday to merge the two companies to create a powerful travel booking engine producer. Sight&Sound Software's product, BookSmart, is an online travel booking engine, and Dublin-based Datalex offers a wide range of technology packages to airlines and the travel industry, including the BookIt! booking product. The combined companies will be registered as Datalex Ltd., and the headquarters for the company will remain in Dublin.
The $77 million FAA supplemental request to fund a gap in operations arrived on Capitol Hill too late to be considered by the House and now will have to be addressed in conference -- if the Senate puts the $77 million in its supplemental appropriations, congressional sources said yesterday. The FAA request was not sent to Congress until last Thursday, the same day that the House approved the $13.2 billion supplemental by a 263-146 vote.
Canadian Airlines and its Air Line Pilots Association unit, which represents 1,280 pilots, reached a tentative contract deal on Friday. Details were unavailable. ALPA Master Executive Council Chairman Don Paxton said the deal "represents an important step for our members in gaining stability and growth within the new airline."
Delta unveiled plans Friday to launch a travel web site this summer dedicated to serving the needs of the small-business traveler. Named Mind Your Own Business Travel, or MYOB Travel, the new site targets businesses that have between five and 50 travelers. "MYOB Travel will be positioned to service the small-business market, which is one of the fastest-growing segments in the U.S. economy with billions of dollars in travel expenditures annually," said Senior VP of Sales and Distribution Vince Caminiti.
Spanish majority stockholder SEPI's business plan to salvage Aerolineas Argentinas, prepared with Boston Consulting Group and to be unveiled shortly, would concentrate on severe cost cuts in the absence of interested new investors, according to leaked reports picked up last week by local media in Buenos Aires. Aerolineas, debt-free when privatized 10 years ago, now owes $800 million and its future affects 8,000 workers. SEPI's plan would cut costs by $20 million per month and apply annual revenues of $1.1 billion to cover the deficit in three years.
USTR, in its year 2000 inventory of trade barriers, cites two with the European Union involving aviation. It says the EU's "design-restrictive regulation on aircraft equipped with hushkits is unfairly impeding U.S. sales. Substantial subsidies and promises of future subsidies provided to various EU industries, mostly notably to Airbus, also raise serious trade policy concerns."
Boeing engineers in its Wichita, Kansas plant, represented by the Society of Professional Engineering Employees in Aerospace (SPEEA), have reached a tentative agreement on a three-year contract. The 1,350 employees will vote tomorrow. Union negotiators unanimously recommended the deal, which has no benefit take-aways and gives all engineers a minimum 9% raise from a 17% pool over three years. Talks in Wichita had been on hold since Dec. 5, when engineers turned down the company's offer by a 99% margin and voted for a strike.
Boeing will offer all its maintenance and flight operations information via the Internet. The move follows a trial effort involving users of Boeing On-line Delivery (BOLD) service. BOLD was first offered in 1995 as a client/server-based online system that gave airlines and maintenance providers direct access to digitized maintenance information. It used an older software standard known as X-Windows and required user training and specialized hardware and network connections.
FAA Administrator Jane Garvey has not yet notified Congress of changes in the fiscal 2001 WAAS budget request of $111 million and has not moved to change fiscal 2000 funding, although she told a House subcommittee on March 22 of the plan worked out with industry for a scaled-back Wide Area Augmentation System, congressional sources said.
Lufthansa has reached an agreement with its union over a new wage contract. Lufthansa will pay its employees 2.5% more, retroactive to Feb. 1, 2000. The airline will add a one-time payment of 950 deutschmarks (US$475) and a bonus of 7% of the respective March salaries. It also will reduces the profit sharing from last year's level, when it paid 10% of a month's salary plus DM1,100.
Continental, is "probably the carrier that least needs a European partner," said President Greg Brenneman, notwithstanding its new ties with KLM and increasing closeness to Alitalia. After just three European cities served in 1994, Continental has 17 destinations now and envisions 30-35 in the next five years, mostly for point-to-point traffic with few passengers connecting beyond the Europe gateways.
Southwest has benefited greatly from across-the-board fare increase of $2-$4 earlier in the year, and first quarter revenues trends "look quite solid," according to Deutsche Banc Alex. Brown analyst Susan Donofrio. "This is going to be a year of double-digit earnings performance for Southwest, even in the face of high jet fuel prices," she said after interviewing CFO Gary Kelly.
Association of Flight Attendants on Friday failed in its second attempt to unionize flight attendants at Frontier Airlines. Frontier said of the 315 eligible flight attendants, 125 cast votes for AFA. A total of 158 votes were needed to organize.
SAirGroup Chairman Philippe Bruggisser expects jet fuel prices to "come down in the coming months, then shoot up again." The airline is hedged 70% currently against future price hikes, a much higher hedge level than most carriers. The global average hedge is 36%, according to Merrill Lynch.
Air Transport Association Cargo Traffic January 2000 Revenue Ton Miles (000) January January % 2000 1999 Change Domestic Freight 764,062 747,116 2.3 Mail 175,033 172,622 1.4 Total 939,095 919,738 2.1 International
