U Turn News You Can UseConsolidation won't save carriers from soaring fuel prices, Crandall says Wednesday June 18, 4:27 pm ET US Airways Group Chief Executive Douglas W. Parker buys 197,000 shares of stock US Airways Group CEO buys 197,000 sharesAP (Wed, Jun 18) Schedules cause excessive pilot fatigue Even the best pilots can't fight off fatigue caused by flight schedules, writes Thad Osburn, a pilot, in USA TODAY. "Putting the onus to manage fatigue cannot fall solely on the pilot. The effects of fatigue are insidious and hamper good judgment," he writes. "Also, self-policing creates a serious conflict of interest among career, financial and safety concerns." USA TODAY (6/20) US Airways will shed more jobs, capacity US Airways on Thursday said it will cut 5% of its workforce, add new fees and cut more capacity than planned. The carrier's move comes as the industry continues to contend with high fuel prices and a weaker economy. "Our industry is profoundly challenged by the dramatic increase in fuel prices, and we must write a new playbook for running a profitable airline in this new and challenging environment," US Airways CEO Doug Parker said. The airline said it will start charging for soft drinks in August. Reuters (6/12) , Air Transport World (6/13) , The Street.com (6/12) , The Wall Street Journal (subscription required) (6/13) , USA TODAY (6/13) , The Sun (Baltimore) (free registration) (6/13) US Airways will pay $2B more for fuel in 2008, CEO says US Airways will pay $2 billion more in fuel costs in 2008, CEO Doug Parker said. He also expects higher fuel costs to force the industry to cut capacity 9% in the fourth quarter and 9% next year. BusinessWeek/Associated Press (6/11) , American City Business Journals (6/11) United, Continental form partnership United Airlines and Continental Airlines said they have formed an agreement that will allow them to boost revenue and lower costs. The agreement will allow seamless ticketing between the two airlines and calls for Continental to switch to United's Star Alliance from the SkyTeam alliance. It could take the carriers a year to secure regulatory approval, observers say. Houston Chronicle (6/19) , The Wall Street Journal (subscription required) (6/19) , The New York Times (6/20) , Air Transport World (6/20) , Reuters (6/19) , The Washington Post/Associated Press (6/19) Southwest may expand fleet in 2009, CEO says Southwest Airlines CEO Gary Kelly said the carrier may expand its fleet next year. Meanwhile, soaring fuel prices are forcing other airlines to scale back capacity. "We're all curious to see what the effects of the cutbacks in the fourth quarter will be," Kelly said. "We're willing to grow the fleet, and that's very different than what's going on with most of our competitors." Bloomberg (6/17) U.S. airlines project $7B-$13B loss this year Delta plans to cut capacity 13% by the second half of 2008 Delta says 4,000 workers take voluntary buyouts Surging fuel prices will force Northwest Airlines to reduce capacity by up to 9.5% in the fourth quarter, the airline said. Northwest said it does not know how many jobs will be affected by its plans. It will pull 14 Airbus and Boeing jetliners from service as well as reduce its fleet of DC-9s from 94 planes to 61 by the end of the year. CEO Doug Steenland said Northwest does not plan to cut any cities from its schedule and will instead operate fewer frequencies. MarketWatch (6/17) , The New York Times (6/18) , Air Transport World (6/18) , USA TODAY/Reuters (6/18) , The Detroit News (6/18) Southwest expects profit but postpones aggressive growth Southwest Airlines will post a modest profit on record revenue despite the difficult environment for U.S. airlines, CEO Gary Kelly said. However, he noted that soaring fuel prices will force the carrier to postpone its aggressive growth plans. "At this time, we are not thinking seriously about an acquisition," Kelly said. The Wall Street Journal (subscription required) (6/18) AirTran in good shape despite soaring fuel prices, former CEO says The airline industry will have to cut capacity by up to 20% to handle higher oil prices, said Joe Leonard, the former chief executive of AirTran Airways. He said AirTran is prepared to face higher costs. Leonard recently retired from his post after more than nine years. "It has the best fleet in the industry, morale has never been better, and [CEO Bob Fornaro] is ready," Leonard said. The Street.com (6/10) Virgin America to cut capacity this fall United Airlines and Delta Air Lines Inc. both discussed the possibility of further cutbacks in capacity, jobs and other areas, even as Southwest Airlines Co. said it still sees modest growth through the coming year. The measures already taken by carriers to cut costs and raise additional revenue still aren't enough to cover fuel costs, and the Air Transport Association has said that the industry could lose as much as $13 billion this year. The Washington Post/Associated Press (6/18) United sees annual fuel bill of nearly $10B United Airlines expects its 2008 fuel bill to climb to $9.5 billion, up $3.5 billion from year-ago levels. The airline is among the carriers supporting legislation that would allow for additional regulation of oil futures trading and made its forecast in a statement backing the measure. The airline also said it expects to record significant charges in the second quarter. Houston Chronicle/Associated Press (6/17) Continental will retire jets, cut 15 cities Continental Airlines said it will retire all its 737-300s by 2009 and exit 15 cities as part of a plan to offset the surging cost of jet fuel. Executives noted that the high price of fuel makes mergers risky but said the carrier will not rule out consolidation. The Star-Ledger (Newark, N.J.) (6/18) Continental pilots hope to recover concessions during contract talks Continental Airlines pilots demanded better pay and benefits as they picketed outside the airline's headquarters on Wednesday. The union and the company are currently negotiating a new contract, and the union hopes to recover previous concessions. The airline declined to comment on the picketing but a spokeswoman said it remains "committed to open and honest communications with our pilots." Yahoo!/Associated Press (6/11) Airline flight reductions, higher fares bad news for Las Vegas Las Vegas is starting to feel the pinch as skyrocketing fuel prices cause airlines to cut capacity to the city's main airport. Major airlines are curtailing flights to the city, and the average cost of plane tickets increased more than 10% in March. The Wall Street Journal/Dow Jones Newswires (subscription required) (6/16) Carriers ask DOT to extend rights to fly to China for two years U.S. carriers want to maintain their rights to fly to China but say they cannot afford to maintain all service or add new routes. Airlines, which are facing record fuel prices, asked the White House to preserve their rights for two years in a joint application. They expect a DOT decision soon. The New York Times/Reuters (6/15) Consolidation won't save carriers from soaring fuel prices, Crandall says Former American Airlines CEO Bob Crandall on Thursday said he doesn't believe consolidation will save the airline industry. "Mergers will not lower fuel prices, they will not increase economies of scale for already sizable major airlines. They will require major capital expenditures and are likely to increase labor costs," Crandall said. Crandall made the remarks at The Wings Club in New York. BusinessWeek (6/11) Delta pilots union chairman says concessions unlikely The chairman of Delta Air Lines' pilots union said yesterday pilot concessions are unlikely, even as oil prices have soared above $130 a barrel. Delta pilots are currently trying to negotiate a joint contract with Northwest Airlines' pilots as part of an acquisition deal. Yahoo!/Associated Press (6/9) BigJetCity.com |