US Airways is open to the idea of an alliance with British Airways, Chief Executive Stephen Wolf told reporters at a shareholders meeting yesterday, but his airline would have to be a "major competitor" at London Heathrow, a U.S.-U.K. open-skies pact would be required, and other issues would have to be resolved. Answering a domestic alliance question, he said code sharing "by nature is deceptive...if you buy a Chevrolet, you don't want a Ford," but said if others proceeded with them, "we would have no choice" but to do the same.
Senate Commerce aviation subcommittee member Bill Frist (R-Tenn.) urged DOT Secretary Rodney Slater to start open-skies talks with the U.K. "at the earliest possible date." The last talks were in February 1997, and there are no signs they will resume in the near future. Frist wrote Slater yesterday that the lack of progress with the U.K., "our largest aviation trading partner overseas," stood in "stark contrast" to the substantial progress achieved in recent years on services to other parts of Europe, Asia and Latin America.
Delay in Joint Aviation Authority certification of the Rolls-Royce-powered Tu-204 is due to the unavailability of information that has been requested from Russian authorities, according to Klaus Koplin, JAA secretary general. At Aviation Week's MRO Europe conference in Berlin this week, Koplin suggested that large Commonwealth of Independent States countries with long aviation traditions ought to investigate creating their own joint authority because integrating such countries into the existing JAA would be very difficult.
US Airways yesterday asked DOT to impose sanctions on British Airways immediately, saying US Airways' problems at London Gatwick show no sign of being resolved. US Airways filed a formal complaint saying it could not acquire a commercially viable Gatwick slot, and DOT on May 11 extended its deadline to act within 30 days.
Australian government, which to date has leased 17 airports, is transferring its remaining airport holdings from the Federal Airports Corp. to a new government-owned structure, Sydney Airports Corp. Ltd. The airports affected - Sydney Kingsford Smith, Bankstown, Camden and Hoxton Park - will be corporatized, and Essendon Airport will be set up as a subsidiary. All existing FAC staff and assets of these airports will transfer to Sydney Airports Corp. Ltd.
Senior officials of the Justice Department and DOT promised a House committee yesterday they would scrutinize the three announced domestic alliances of major carriers, but they gave little indication as to how they were leaning so far. The Northwest-Continental alliance, which involves Northwest purchasing an equity stake in Continental, has been under Justice Department antitrust review and DOT fitness review for some time. Reviews of the more recently announced alliances - United-Delta and American-US Airways - still are in the early stages at both departments.
Alitalia applied at DOT for a two-year exemption to operate all-cargo service between Italy and Atlanta. Cargo service to additional U.S. points, including Atlanta, by a designated Italian carrier is permitted under the 1991 U.S.-Italy memorandum of understanding. Alitalia wants to begin the service June 19, using its own 747-200F aircraft, on an initial routing of Milan-New York-Atlanta-Milan. In addition to allowing scheduled foreign combination service to various U.S.
Rep. William Lipinski (D-Ill.), ranking Democrat on the House Transportation aviation subcommittee and subcommittee member Peter DeFazio (D-Ore.) wrote Air Transport Association President Carol Hallett late Monday objecting to ATA's advertising campaign attacking DOT's airline competition guidelines and seeking an extension of the comment period (DAILY, May 15).
Teal Group analysts are predicting that commercial jet transport production in 1998-2007, impacted by a "vicious" war between the two main manufacturers, will peak next year with 799 aircraft and will result in a substantial "oversupply" of equipment. Some 750 will be produced this year, and production will drop off to only 402 aircraft by 2002, according to the forecast.
United withdrew its application for all-cargo service to France, including Paris, clearing the way for award of the authority to United Parcel Service. Polar Air Cargo has a separate, non-competing application for all-cargo service to points outside Paris (DAILY, May 14). FedEx already serves U.S.-France. United did not explain its reason for the withdrawal. UPS had portrayed the United application as an expedient one based on reduced use of aircraft in the Pacific.
Poorer countries were unsuccessful in getting the International Civil Aviation Organization (ICAO) to support an International Aeronautical Monetary Fund to finance new Communication, Navigation and Surveillance/Air Traffic Management systems (CNS/ATM). The fund, proposed by the 53 African contracting states at last week's CNS/ATM Implementation Conference in Rio de Janeiro, is supported by a large number of states, including Bolivia and Pakistan (DAILY, May 18). Proponents suggested imposing a $1 global ticket tax to create the fund.
Crossair and Lufthansa CityLine will be launch customers for Fairchild Dornier's new 728JET family of regional aircraft. The airlines, which said they will support the program in all design stages, are considering a total initial order of 120 aircraft and options, with first deliveries in mid- 2001. Their decision enabled Fairchild Dornier to launch its new family formally yesterday at the International Aerospace Exhibition '98 in Berlin.
Virgin Express, the Brussels-based airline company of British tycoon Richard Branson, is setting up subsidiaries in Ireland and the U.K. in an attempt to escape Belgian taxes and social security charges. "We're very far advanced in buying a small airline in the United Kingdom," Branson said this week in London, at the inauguration of Virgin Express' service to London Stansted, where British Airways' low-cost Go subsidiary is due to start operations this week.
Boeing says it will develop smaller and larger versions of its 717, formerly known as the MD-95, to create a 717-base aircraft family, provided there is sufficient demand. "By experience, our customers prefer families of aircraft, and that is what we have in mind if there is strong and steady demand for the B717," Rolf Sellige, Boeing's product marketing director for the new aircraft, said this week at the International Aerospace Exhibition '98 (ILA '98) at Berlin-Schonefeld.
Air Carrier Association of America dismissed Air Transport Association arguments that it has not had time to assess DOT's proposed airline competition policy. ACAA's comments, filed before DOT's decision to extend the comment period by 45 days, were in opposition to ATA's motion to extend it by 120. (See story above.)
It would be "foolish" to expect a resumption of U.S.-U.K. open-skies talks any time soon, according to a Member of Parliament visiting Washington as part of a delegation exploring aviation issues. The last formal contact between the two sides was in February 1997.
German regional carrier Augsburg Airways has placed a firm order for six Bombardier aircraft - four 50-seat Dash 8Q-300s and two 37-seat Dash 8Q- 200s. Serving cities in Germany and neighboring countries, Augsburg also took options on seven more Dash 8Qs. The contract for the six aircraft is worth C$112.2 million (US$78 million). Bombardier said demand this year for Dash 8Q and its Canadair Regional Jet is strong, with seven airlines placing firm orders and options for 32 of the 50-seat CRJ 100s and 200s.
Pan Am and major creditor NationsBank reached an agreement yesterday that brings the struggling carrier one notch closer to recovering from bankruptcy. The pact calls for NationsBank to receive $20.5 million after a reorganization plan confirmation hearing scheduled June 29. The deal was made possible by Guilford Transportation Industries, Pan Am's white knight, which upped its offer by $1 million to purchase most of Pan Am's assets. Guilford now will invest $24.5 million, and unsecured creditors have agreed to defer some payments.
Continental yesterday became the second carrier this month to indicate a willingness to launch service from Dallas Love Field, an airport that most airlines ignored until former FAA Administrator Allan McArtor made plans to begin service there with a new carrier, Legend Airlines. Continental Express, which has the rights to two gates at Love Field, will begin service June 11 from Love Field to Houston Bush Airport with seven daily flights and will launch service July 1 to its Cleveland hub with three roundtrips.
United yesterday took a minority stake in Internet Travel Network (ITN), a Palo Alto, Calif.-based company that calls itself the leading independent developer of Internet-based travel planning products. Last year, ITN developed the reservations and ticketing component of United's web site, a project United said was received well by customers. "United wanted to build on this success, so we approached ITN regarding how we could strategically support their business," said United's Senior VP-Marketing David Coltman.
DOT will establish a task force on airport practices and their impact on airline competition, Secretary Rodney Slater told the Aero Club of Washington yesterday. He also said the department will extend the deadline for comments on its proposed airline competition policy by 45 days. Slater said interactions between carriers and airports can affect industry competition, and the airport task force will address concerns that can "diminish" competition, such as the use of passenger facility charges and long-term gate leases, often to dominant, incumbent carriers.
US Airways filed a motion asking DOT to insist on seeing documents British Airways has said are clearly irrelevant to the American-BA antitrust immunity proceeding. BA has turned over documents from the US Airways breach-of-contract suit, and DOT has been determining their relevance to the immunity proceeding. BA said it is highly unlikely that relevant information will be produced by TWA's request that additional materials be filed from the case. But US Airways said DOT, "not British Airways and not US Airways," should make the final determination.
