U-Turn's News You Can UseJetBlue CEO takes 50% pay cut as revenue falls Frontier secures debtor-in-possession financing US Airways posted a loss of $567 million, or $6.16 per share, for the second quarter. For the same period last year, the airline posted a profit of $263 million, or $2.77 per share. The loss includes $640 million in special charges related to a write down of goodwill and spare parts. Associated Press (7/22)US Airways CEO shares bleak vision for future of air travel US Airways CEO Doug Parker acknowledged the coming year will be difficult for the Philadelphia-based airline, with fuel costs alone eating up an average of $299 per passenger. If fuel costs stay at the same level, he predicts flights will soon run $650-$700 per ticket, and airlines will fly only to major cities. As for the future of US Airways, Parker says: "If there are other airlines whose strategies are based on US Airways going away, they'd better find a different strategy. We are going to be fine, and we are going to get through this. We can compete as well as anyone." The Philadelphia Inquirer (7/20)Northwest adds $80 fuel charge at bizjournals.com(Fri 1:05pm)No more free coffee, sodas on US Airways US Airways announced it will begin charging $1-$2 for coffee, sodas and other non-alcoholic beverages on flights. The Association of Flight Attendants objected to the new charges, which the flight attendants are required to enforce. US Airways estimates the beverage charges and other new fees will generate $500 million in annual revenue. The New York Times/Bloomberg (8/1)Pilots at Delta, Northwest move closer to seniority agreement Leaders of Delta Air Lines' pilots union say they are close to reaching an agreement with Northwest Airlines pilots that would merge the two carriers' seniority lists. The two sides hope to reach an agreement by the first week of August. The Street.com (7/15) United requests injunction to stop "sickout," no-overtime campaign United Airlines has asked a federal judge for an injunction that would stop its pilots union from encouraging pilots to participate in an unlawful "sickout" and no-overtime campaign. The company said the unlawful job actions have forced the cancellation of more than 300 flights. United said the pilots union has urged members not to work overtime as part of a plan to pressure the company to renegotiate the current contract. The Wall Street Journal (subscription required) (7/31) , Chicago Tribune (free registration) (7/31) , The New York Times (7/31) , AviationWeek.com (7/30)Labor relations suffer at U.S. carriers Labor-management relations are suffering in the airline industry as carriers face a challenging economic model. Workers at some carriers are frustrated about working under concessionary contracts, a union at Northwest Airlines is trying to block the proposed merger of Northwest and Delta, and two pilots unions at US Airways are at odds over a contract. USA TODAY (7/30)Oxygen cylinder fragments grounded Qantas flight Investigators determined that exploding oxygen cylinder fragments forced an emergency landing of a Qantas flight last Friday in Manila. The fragments tore off a door handle after exploding through the floor, but the door remained in the closed position. The Boeing 747-400 landed safely with no injuries to the 365 passengers and crew. Yahoo!/Agence France-Presse (7/30) , USA TODAY/Associated Press (7/30) , Travel Weekly (free registration) (7/30) , CNN/Associated Press (7/30)Hawaiian Airlines posts $54.3 million profit for second quarter Hawaiian Holdings, the parent company of Hawaiian Airlines, posted net income of $54.3 million for the second quarter. The airline picked up 21% more passengers in the second quarter after competitors ATA Airlines and Aloha Airlines folded. The company posted a net loss of $3.9 million last year in the second quarter. Air Transport World (8/1) , Forbes/Associated Press (7/30) , Honolulu Star-Bulletin (7/31)Southwest Airlines reports 15% increase in second quarter profits Southwest Airlines posted a 15% increase in profits with net income of $321 million in the second quarter. The airline's fuel-hedging program allowed Southwest to lock in the price of around $2.50 a gallon for fuel while other airlines were forced to pay market prices. Southwest has not reported a loss since the first quarter of 1991. The Wall Street Journal/Dow Jones Newswires (subscription required) (7/24) , The Washington Post/Associated Press (7/24) , USA TODAY (7/24)United reports Q2 loss, will cut more jobs United Airlines on Tuesday reported a second-quarter loss of $151 million, excluding special charges. A year ago, the company earned a profit of $274 million. United also said it will cut at least 7,000 additional jobs by the end of 2009. The company blamed its weaker results on the soaring cost of jet fuel. Chicago Sun-Times (7/23) , CNNMoney.com (7/22) , The Street.com (7/22) , Yahoo!/Associated Press (7/22) , Air Transport World (7/23) , The New York Times/Reuters (7/22)JetBlue CEO takes 50% pay cut as revenue falls In a show of solidarity with JetBlue's employees, the CEO of the company agreed to cut his salary in half from $500,000 to $250,000 for the remainder of 2008. JetBlue posted a $7 million loss last week due to rising fuel prices, and the low-cost carrier has also deferred delivery of new planes to offset the drop in revenue. The Washington Post/Reuters (7/28) , The Atlanta Journal-Constitution (free registration) (7/29)Frontier secures debtor-in-possession financing Frontier Airlines has secured a debtor-in-possession financing agreement that will allow it to raise $75 million. Under the agreement, Washington, D.C.-based investment firm Perseus will buy 79.9% of the reorganized airline for $100 million. Frontier is operating under Chapter 11 bankruptcy protection, and the agreement still needs approval from a bankruptcy court. AviationWeek.com (7/25)AirTran cuts capacity and shrinks Atlanta hub After posting a $13.5 million loss for the second quarter, AirTran is scaling back growth plans and shrinking service to its Atlanta hub. The low-cost carrier plans to cut capacity by 7%-8% this year, and 4%-8% in 2009. The airline has offered significant discounts on fares in Atlanta to compete with Delta, but now will concentrate on other markets and cut 15-25 flights from Atlanta. The Street.com (7/29) , The Atlanta Journal-Constitution (free registration) (7/30)Oil prices might drop by half near end of year, experts say Since peaking at $145 a barrel on July 3, oil prices have dropped 16% to $122 a barrel. Some experts predict oil may fall to $70 a barrel by the end of the year, which would be welcome news for American drivers as well as the transportation industry. Average gas prices peaked at $4.11 a gallon on July 17 but have since fallen to $3.94 a gallon. Star Tribune (Minneapolis-St. Paul)/The New York Times (7/29) , The Wall Street Journal (subscription required) (7/30)Fuel-efficient 757s enter FedEx fleet The Boeing 757-200 entered FedEx's fleet this week. The new planes will replace FedEx's aging 727-200s. They cost about 25% less to fly than the 727-200s and have 20% more cargo room. The company in 2006 announced plans to spend $2.6 billion on 90 retrofitted 757s. The Commercial Appeal (Memphis, Tenn.) (free registration) (7/31)Branson unveils spaceship carrier Richard Branson yesterday unveiled White Knight Two, a double-hulled, all-composite "mother ship" built to ferry travelers on the first leg of commercial flights into space. "Even though this is a pretty weird airplane, we expect it to fly pretty well," said aerospace expert Burt Rutan, whose design framework the plane was based on. View photos of the craft, dubbed "Eve" for Branson's mother. The Washington Post (7/29) , The Guardian (London) (7/29)YOUNG PILOTS GIVE NEW MEDICAL DURATION A POSITIVE DIAGNOSIS The FAA's recent move to extend third class medicals from three to five years and first class medicals from six months to one year for pilots under 40 was met with mixed emotions from the aviation community. "Not surprisingly, pilots under 40 loved the move, while those over the age limit were upset to miss out on fewer trips to the AME," said Andy Cebula, AOPA executive vice president of government affairs. "AOPA will continue to work to make medical standards better reflect today's environment." Read more on AOPA Online.Congress votes to ban in-flight cell phones The House of Representatives voted to make permanent the current FAA and FCC ban against using cell phones in flight. The European Union has moved to allow cell phones during flights, and many airlines are testing in-flight Internet access as well. Google/Associated Press (7/31) , Homeland Security Today (7/31) , CQ Today (7/31)CONGRESS FEARS PLANES, BOATS COULD CARRY NUCLEAR DEVICES In a Senate Homeland Security Committee hearing July 16, legislators questioned whether enough nuclear detection efforts were in place to prevent the devices from being smuggled into the country by private vehicles, general aviation aircraft, or small boats. "Any security measures would need to be transparent," said Andy Cebula, AOPA executive vice president of government affairs. "They should not be burdensome to GA pilots and should not impair pilots' ability to enter the country." Read more on AOPA Online.FRASCA TURNS 50 If you're like most pilots, you've spent at least a little time in a Frasca simulator. Its manufacturer, Frasca International, marked its fiftieth anniversary this month by inviting more than 600 people to a celebration at its Urbana, Ill., facility. Rudy Frasca, 77, an aviation icon, founded the company in 1958. His first product allowed the venerable Link trainer to be used for teaching VOR and ADF navigation. Frasca constructed his earliest simulators from wood in the garage behind his home. Read more on AOPA Online. BigJetCity.com |
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