Federal Express has reached an agreement with Evergreen International Airlines to purchase Evergreen's all-cargo route authority to serve China for an undisclosed sum, and also has reached a deal with Evergreen to lease two 747s to use in the market, FedEx said Friday. If the route transfer is approved by DOT, FedEx will become the sole U.S.-based express carrier with aviation rights to China, FedEx said. The authority covers scheduled service to China, including to Beijing and Shanghai.
Airlines decline to say how much they expect to save by capping travel agent commissions, but the Allied Pilots Association at American reports that Chairman Robert Crandall has put his carrier's amount at $150 million per year.
Federal Express named Brooke Harwood general manager-China and William Logue VP-Memphis hub operations. Martinair Holland named Susan Grim manager-information services in Boca Raton, John Mahan cargo customer service supervisor in Seattle and Conrad Barreiro passenger sales representative in New Jersey. Virgin Atlantic appointed Paula Strelitz sales manager for Wisconsin and Illinois.
Recent trends of swapping wage concessions for stock and making significant cuts in the work force will not improve financial performance of the major carriers in the long run unless the airlines can improve productivity as well, according to a new study of airline labor costs. The study, written by Darryl Jenkins and published by George Washington University's International Institute of Tourism Studies, says carriers must focus on the tie between earnings and productivity if they are to return to profitability.
Along with recommendations for upgrading flight data recorders on aircraft in service, the National Transportation Safety Board issued a list of proposed parameters for FDRs on newly manufactured (DAILY, Feb. 23). The proposed FDR enhancements are recommended for aircraft operated under Parts 121, 125 and 135 (10 seats or larger) and certificated after Dec. 31, 1996. The board also urged that the FDRs have a 25-hour recording capacity. Proposed FDR Enhancements For Newly Manufactured Airplanes Acceleration Parameters:
The board of transportation equipment leasing company PLM International has authorized the repurchase of up to $500,000 worth of the company's common stock. The shares may be acquired from time to time on the open market or through private transactions, the company said. They may be used for corporate requirements, or they may be retied. PLM had about 11.7 million shares outstanding as of Jan. 31.
Moody's assigned a Ba3 rating to $600 million of convertible subordinated debentures issued by United parent UAL Corp. The debentures, which mature in 2025, are being issued in exchange for the company's Series A convertible preferred stock, which are rated "ba3." The Ba3 rating is at the high end of Moody's below-investment-grade ratings.
Domestic fares crept up quietly late last week as United boosted prices $5 each way on routes under 1,000 miles and $10 on those over 1,000. Most carriers, which have tried to increase fares in recent weeks following a discounting frenzy, matched most of the United fares in most markets.
Applied Dynamics International named Tom Erkkinen senior applications engineer, Tim Hoffman eastern regional sales manager, Cynthia Sheng development engineer and Uma Bangalore applications engineer. Air Cargo Management Group hired Jon Biggs as associate director. Aviation Sales Company appointed Paul Hawthorne VP-quality control. Comsat appointed Chris Leber VP and general manager of its Aeronautical Services unit. FlightSafety International promoted Britt Hoskins to director- government business.
VASP Brazilian Airlines is offering a special fare of $657 roundtrip from Miami to Recife. The fare, a 39% savings on the slow-season tariff of $1,026, requires a 14-day advance purchase and a stay of seven to 21 days.
Lufthansa has increased its stake in German tour operator DER to 33.2% from 24.8%. It declined to reveal the price of the extra shares, which it acquired from Hapag-Lloyd. DER will continue to be majority-owned by German railway Deutsche Bahn AG. Lufthansa subsidiary Condor plans to buy a stake in travel agent Kreutzer Touristik. Lufthansa believes growth in the tourism sector will outpace increases in business and other travel sectors.
Richard Mintz, assistant to the secretary and director of public affairs at DOT, will leave the department in mid-March to become a senior VP at Ogilvy Adams&Rinehart, a Washington-based public relations firm.
FAA, still expecting to decide in mid-May whether to grant early ETOPS approval to the Boeing 777, to date has seen "no occurrences" that would "preclude" granting the approval, Anthony Broderick, associate administrator for regulation and certification, said Friday.
National Route Program, restructured Jan. 9 after becoming "unmanageable," now is providing the "infancy of free flight," according to Steve Vuocolo of FAA. The altitude for direct trajectories, being lowered steadily from 39,000 feet, is expected to reach 31,000 feet by Sept. 1, and FAA will "assess expansion" of the program below 29,000 feet altitude, Vuocolo says.
British Airways Holidays is offering African safaries, with air-inclusive rates starting at $2,809 per person, based on double occupancy, for a 12- day safari to Kenya. For the first time, BA Holidays is offering its own selection of three air-inclusive packages to Kenya, Tanzania and Zimbabwe.
- In Federal Register dated Feb. 17...Proposed an airworthiness directive on certain Bombardier CL-600 series aircraft to require inspection for proper operation of the uplock latch of the air-driven generator...Proposed an AD on certain Jetstream 4101 aircraft to require inspection of a travel stop screw on the flight control assembly...
Antitrust immunity for code-sharing carriers to better market their service is expected to become a hot potato in open skies talks with European countries.It was too hot for the U.S. in talks with Switzerland and did not make it into the agreement. U.S. negotiators are seeking advice from the Justice Department "as we think through this difficult question," a senior DOT official said.
Canadian Airlines International last week extended for another four weeks its special "Reunion" fare promotion for passengers aged two to 11 and 60 or over traveling within Canada. The fare is C$345, or 60% of full coach, whichever is less. Canadian extended the fare because of demand. Travelers can purchase the fare up to seven days before travel, which must be taken by April 13. Passengers 60 or over may travel with a companion at the same fare, but children must fly with an adult at the regular fare.
Bilateral talks with China begin tomorrow and are expected to last through the week, and U.S. negotiators will be trying to get China to deliver on its promise of new frequencies. China is looking to trade in a cargo frequency for service for startup carrier China Southern. The U.S. seeks greater flexibility in operations - for example, to allow Northwest to operate service between Detroit and China.
FAA has broadened a crackdown on unapproved aircraft replacement parts and will "aggressively enforce" regulations governing approval of such parts, Associate Administrator Anthony Broderick said Friday. The agency is publishing a Federal Register notice giving manufacturers 90 days to apply for approval to manufacture parts. FAA will not use any information in PMA (parts manufacturer approval) applications submitted during this period to begin enforcement proceedings, Broderick said.
President Clinton, meeting recently with senior political appointees, cited FAA's pending rule to bring all carriers' safety standards up to Part 121 levels as a prime example of why a congressional moratorium on government regulations might be harmful to public safety, according to FAA Administrator David Hinson. Hinson, who was present at the meeting, said FAA has an "ongoing AD" to ensure a "safe flight environment" that could be impacted by a moratorium. The House approved a moratorium Friday but exempted air safety (see Page 310 of the hard copy of this issue.)
Air Canada will launch twice-daily Toronto-Atlanta service on Sunday as a result of the signing last week of the U.S.-Canada open skies agreement. But new or expanded service by either major Canadian carrier to New York or Chicago likely will not occur for at least a few weeks, industry sources say. In the middle of last week, Transport Canada was expected to rule quickly, possibly as early as today, on competing Air Canada-Canadian Airlines International applications for the 24 Chicago and New York slots it has authority to allocate.
Continental said it still plans to work toward an airport lease pact with Denver despite a lawsuit filed Wednesday in federal court by the city seeking $1.37 million in net delay costs at the new Denver Airport. "We had to preserve and protect our rights," city attorney Lee Marable told The DAILY. Talks with Continental have been aimed at new rates and charges for Concourse A, Marable said. Continental said it will use only four of the 20 gates it planned to lease two and a half years ago.
As President Clinton oversees the signing of the new U.S.-Canada bilateral agreement today, U.S. negotiators are preparing for further open skies talks, beginning next week, with the designated European countries. Talks with Belgium are slated for Feb. 28 and March 1, Iceland March 2-3, Austria March 7-8 and Luxembourg March 9-10. Negotiations with Finland are expected to occur March 21-22 or 23-24. All the sessions will be in Washington. Dates for talks with Sweden, Denmark and Norway have not been set.
