A breakdown in U.S.-U.K. open-skies talks is not grounds for dismissing an application by American and British Airways to form an alliance, the two carriers said in a DOT filing last week. The carriers responded to a motion filed Nov. 10 by Continental, Tower Air, TWA, US Airways and United to throw out their application. American and BA said the motion was based on the mistaken premise that an open-skies agreement between the U.S. and the U.K.
Consolidation of Europe's aerospace and defense industry "appears to be gaining momentum" but is unlikely to result in the single umbrella organization envisioned by some advocates, Moody's Investors Service said yesterday. The most likely outcome is "agglomeration of the major companies into a few huge groups," according to Senior VP Tassos Philippakos. Facing continued low levels of defense spending worldwide and increased competition for exports, "none of the European players...wants to risk eventually being shoved aside by the U.S.
Association of Flight Attendants (AFA) wants documentation explaining why the U.S. National Administrative Office (NAO) has refused to review its request to investigate Mexican President Ernesto Zedillo's interference with a May 31 strike by AeroMexico flight attendants. Under the terms of the North American Agreement on Labor Cooperation, AFA requested a review of Zedillo's actions, which NAO refused.
United flew more electronic-ticketed than paper-ticketed domestic passengers in October, the first month that has happened.E-ticketing attracted 53% of domestic passengers and 44% of the carrier's 7.55 million passengers worldwide. By yearend, United will offer e-ticketing to 10 more countries, bringing paperless travel to 91% of the cities it serves.
BFGoodrich and Coltec Industries yesterday announced their boards approved terms of a merger under which Coltec shareholders will receive 0.56 shares of BFGoodrich common stock for each share of Coltec. Based on the closing price of $35.94 Friday for BFGoodrich, the transaction was valued at $2.2 billion including assumption of Coltec debt. The companies expect to achieve annual cost savings of $60 million by 2001. John Guffey, Coltec chairman, will become a member of BFGoodrich's board, an executive VP of BFGoodrich and president of the industrial business.
General Service Administration (GSA) has amended Fly America regulations to reduce the connecting time for use of a U.S. flag carrier at an overseas interchange point. It also requires that airline tickets issued under a code-share agreement identify the U.S. flag air carrier's designator code and flight number and removes references to "gateway airports." GSA reduced connecting time from six hours or more to four hours at overseas points for determining whether U.S. flag service is unavailable. This move was opposed by at least two U.S.
Avianca has signed a wet-lease agreement with World Airways to provide daily MD-11 passenger service between New York Kennedy and El Dorado Airport in Bogota. The $3 million contract, approved by Colombian authorities, runs between Dec. 10 and Jan. 17.
Delta and Delta Express announced sale fares to Florida starting at $69 one way. Tickets must be purchased by Dec. 11 and are good for travel through Jan. 31. Fares on Delta require roundtrip purchase, but fares on Delta Express do not. Blackout dates during the Christmas and New Year's holidays apply.
The Aircraft Mechanics Fraternal Association (AMFA) won the right to represent Northwest mechanics and related employees Friday. In results subject to certification by the National Mediation Board, an initial tally showed that AMFA won a representational election against the incumbent International Association of Machinists (IAM) by 56%. Of 9,079 ballots cast, 5,160 were for AMFA and 3,905 for IAM.
DOT made final its decision to withdraw four U.S.-France frequencies allocated to Tower Air and allocate seven weekly frequencies to American for Los Angeles-Paris service, seven to United for Chicago-Paris and seven to U.S. Airways for Philadelphia-Paris, all beginning next spring. The action follows a show cause order issued last month (DAILY, Oct. 22).
Singapore Airlines has been ranked the best international airline in four surveys during the past month. Conde Nast Traveler magazine rated SIA the top international route airline for the 10th time in 11 years. SIA scored 82.5 points out of a possible 100, outdistancing second-place Swissair by 8.3 points. Japan Airlines was third with 72.1. The 1998 French Business Travel Survey, which charts 29 categories from punctuality to cabin design, named SIA best long-haul airline for the second straight year. Cathay Pacific and Japan Airlines were second and third.
Ansett Australia asked DOT for an exemption for scheduled mail service between Japan and two points in Australia, Sydney and Melbourne, under a mail code share with Northwest. It asked that the exemption remain in effect as long as the code share. Northwest will transport mail from eight U.S. points to Japan, where it will be transferred to flights Ansett already operates to Australia. (Docket OST-98-4773)
Debonair has launched twice-daily BAe 146 service from London Luton Airport to Pontoise Cormeilles (Paris Express) Airport, 35 kilometers northwest of the city. U.K.-based Debonair, which has offered low fares on European routes since June 1996, expanded its product last month with the introduction of Affordable Business Class (ABC) offering flexible and refundable tickets, Fast Track check-in, a dedicated reservations line, complimentary bar service and fares 30-35% less than business-class tickets on major carriers.
Continental, joining competitors, reduced travel agent commissions on international flights to 8% with a $100 cap on roundtrip and $50 on one-way tickets.
Northwest completed its purchase of Continental stock Friday, saying the deal will bring more competition to the Big Three. Northwest bought 8.66 million shares of Class A Continental stock from Air Partners, headed by David Bonderman, and its affiliates. The stock was deposited in a voting trust. Under the deal, originally announced in January, the two carriers will code share on 850 domestic and international flights to 95 cities. International code sharing will require government approvals. Reservations for code-share bookings will be accepted starting Dec.
US Airways and its US Airways Shuttle flight attendants, represented by the Association of Flight Attendants, have reached an "agreement in principle" in contract negotiations. The agreement is subject to approval by the US Airways Shuttle AFA Master Executive Council and ratification by the membership.
Northwest is offering holiday sale fares for travel Dec. 17-Jan. 4 in the continental U.S., Canada, Mexico City and Cancun. A seven-day advance purchase is required. Sample one-way fares include $79 New York-Milwaukee, $139 Miami-Toronto and $189 Boston-Seattle. The deepest discounts are available for travel Dec. 17, 25 and 31 and Jan. 1.
Continental and its flight attendants, represented by the International Association of Machinists, reached a tentative agreement Friday on extension of their contract. The deal will improve pay, benefits and job security. The current agreement was scheduled to be reopened late next year. The extension is subject to ratification by the rank-and-file and will become amendable December 2001.
American buys fuel in forward-purchase contracts rather than the hedge programs used by many airlines. "Our experience in the airline business is that when the price of fuel increases, our ability to get our prices up involves a delay or time lapse," Chief Executive Don Carty said in a talk with BT Alex Brown analyst Susan Donofrio. American layers swaps and call options to lock in fuel costs as much as 24 months in the future.
