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Okay, anyone else out there see LeBron James' performance tonight in the NBA playoffs? Wow. 109-107 double-overtime -- and one of the most spectacular personal performances I've seen in a long time.
Oh, that's right. We have an issue to post.
It's done!
PlaneBusiness Banter subscribers can now access this week's issue here.
It's Thursday. Do you know where Holly is? Yep, that's right. She's writing. Look for this week's issue of PlaneBusiness Banter to be posted as usual, later today.
Free of bankruptcy shackles, that is.
Today the management team of Northwest had the honor of ringing the opening bell at the New York Stock Exchange -- in celebration of the fact the airline has now officially left the shackles of bankruptcy protection.
Shares of the airline opened at 24.97, and ended the day at 25.15.
Ticker: (NYSE:NWA)
Just had a note sent to me asking me why it is that I think it is a good thing for Southwest to make more of a public effort at courting the gay traveler. I have to assume that either he is questioning the decision based on personal issues, or he is not aware of just how valuable the gay travel market segment is.
Ah, but the answer is an easy one. The gay travel market is one of the highest disposable income travel markets. As a demographic group gay men and women tend to travel more often (what Southwest is interested in) and when they do travel, they tend to spend more money than most other demographic groups (what hotels and restaurants are interested in.)
Or to put it another way, this is not the "Winnebago and hot dog" crowd we used to see roll into New Orleans for certain Sugar Bowl contests. (I'm going to be nice and not mention any football affiliations directly.) You know -- the type who come into town and raid the A&P for toilet paper, Miller Lite, and luncheon meat. Or hot dogs. Then, when they finally do "eat out," they don't leave a tip.
Bad. Bad tourists.
What do they say -- the third time's the charm? Yes, but just barely.
It was announced today that flight attendants at Northwest Airlines have voted to ratify their latest tentative contract with the airline.
This was the third attempt at a contract, and the flight attendants last chance to get lump sum payments from the airline. Northwest is scheduled to emerge from bankruptcy Thursday, and had agreed to give the flight attendants an unsecured bankruptcy claim of $182 million if the contract was ratified. This amount comes to about $15,000 per flight attendant. But if the contract had been turned down -- the claim would have become null and void.
The contract was approved by only 104 votes, 50.9% to 49.1% of the total votes cast. The union said 6,442 flight attendants were eligible to vote, and 484 ballots were voided.
Interesting tidbit buried in the information released about the vote in a piece by the Associated Press: According to the AFA, only 6442 flight attendants were eligible to vote. But there are about 8100 current Northwest flight attendants. According to the AP, "Some flight attendants could not vote because their union dues were not current."
I'd say almost 2000 flight attendants is a bit more than "some."
I said in last week's PBB I thought this one was too close to call. Even with the bankruptcy claim "sweetener" I was not sure it was a sure thing.
Ticker: (NYSE:NWA)
A good friend and longtime PBB subscriber, who also just happens to be gay, and who also just happens to be a flight attendant for Southwest, sent me a note last night with a rather short and eye-catching subject line. It read, "OMIGOD!"
The thing that caused him to utter such a profound comment?
The fact that Southwest Airlines has debuted a new Gay Travel section of its website. Complete with pictures of Southwest employees celebrating at the DC Pride event in 2006.
While American Airlines has been a consistent corporate donor to gay events and AIDS-related causes -- this marks the first time that a U.S. carrier has been so "open" in its support of the gay community and its travel needs that I know of. And, I might say, of their own gay employees.
Kudos to Southwest.
Too bad the Rev. Jerry Falwell is no longer with us. I'm sure he could have easily linked the airline's falling fuel hedge advantage, or Prudential analyst Bob McAdoo's recent downgrade of the airline's stock to the fact it has now put a gay travel section on its website.
In fact, the more I think about it, the more I would have liked to have seen an arm-wrestling match between Jerry and Herb over the issue.
Now, you have to admit. That would have been great theater.
Ticker: (NYSE:LUV), (NYSE:AMR)
Heh. Trebor Banstetter from the Ft. Worth Star-Telegram sent me a note this morning saying, "You called it."
He then explained that perhaps I needed to send a consulting bill to AirTran's Joe Leonard.
In case you guys missed the AirTran response to Midwest's innovative news yesterday, here is a short clip:
"AirTran to Midwest: Imitation is the Sincerest Form of Flattery
AirTran Airways, Inc., a subsidiary of AirTran Holdings, Inc. (NYSE: AAI), today announced that the company is flattered by Midwest Air Group's (Amex: MEH) latest move to put multiple seating classes on all of its aircraft by the end of 2008. The proposed seating configuration for Midwest Airlines is the very same approach that AirTran Airways has employed for ten years.
"At AirTran Airways, we've always believed in offering our customers choice," said Joe Leonard, AirTran's chairman and chief executive officer. "Midwest's announcement today is an endorsement of AirTran Airways' business model, but without the efficiencies, cost structure or market strength of a larger, more dynamic route network."
Tickers: (NYSE: AAI), (AMEX:MEH)
Jonathan, our web editor and frequent Midwest flier, is right. Midwest serves fresh-baked cookies on both Saver and Signature flights. So, no problem with the smell of freshly baked cookies wafting out towards the unwashed masses in the back of the plane. They will still get cookies too.
However, as he also told me in a note,
"They are definitely diluting their product, but only on the 717s and only for 59 passengers. They are actually enhancing the MD-80 product by adding Signature seats back in to these planes -- that were removed in 2003 (I think that was the year). Their Saver seats will have more leg room than anything in AirTran's fleet, akin to JetBlue and American's "More Room" seating.
I think the overall change is questionable, but if it means there is increased revenue, decreased cost, and an increase in keeping the Midwest name and number of flights in Milwaukee and Kansas City, how can anyone really be against that?
I'd say that having a conference call to explain it all was probably more than they needed, but these guys are not one of the big boys with a huge marketing staff or budget.
AirTran will probably be all over this like a buzzard circling, but they still don't offer anywhere near the same product, so they continue to have no leg to stand on."
Hot from the PlaneBuzz Mailbag:
"Did you see Midwest’s “big announcement”? They’re putting two classes on their aircraft. An “innovative” approach.Ah, yes. I did note the use of the word "innovative" in their press release. That was a bit of a stretch. Yes.
Gee, can you think of another US airline flying 717s with two-class service? Oh yeah, AirTran. If I was AirTran I’d have a press-release out in minutes entitled “Midwest Airlines validates AirTran strategy…”
These fricking morons have just destroyed the one thing that really did separate themselves from the rest of the industry. It’s an admission that their previous strategy didn’t work, and that what AirTran wants to do is correct."
Midwest Airlines announced this afternoon that it is going to modify all of its aircraft to a rather sharply defined set of choices - Signature or Saver. Cookies or no cookies. (Which begs the question of what those poor slobs in the back with their cramped seats are supposed to do when they smell the cookies baking in the front of the aircraft for the pampered Signature flyers, but I digress...)
The dual-seating option will be available this fall on the airline's MD-80 aircraft and in mid-2008 on its Boeing 717 fleet.
According to the airline,
"In current Saver markets, the company expects to generate additional revenue from the sale of higher-value Signature seats. In current Signature markets, added revenue generation is expected to result from capturing market share currently lost due to lack of capacity in high load factor markets or those that are slot-constrained, like Washington, D.C. Reagan National and New York La Guardia. The added capacity will also provide the seating needed to accommodate passengers connecting from other Midwest Airlines flights, Midwest Connect flights and the new codeshare partnership with Northwest Airlines, as well as additional demand stimulated by the added low-fare Saver seating. Overall, the implementation of seating choices is projected to generate $30-35 million in annualized revenue."Wonder what AirTran's Joe Leonard thinks about all this? I'm sure we'll find out shortly.
While most airline stocks moved upward today (in small part due to a drop in the price of oil) shares of Southwest Airlines were one of the few exceptions.
While the price of crude was down almost $2 on the day, closing at 63.15, shares of Southwest were down almost 2%, ending the day at 14.24 and change. (I'm writing this before the end of day numbers are final.)
So what was the instigator to this drop while most airlines frolicked?
Prudential Equity Group analyst Bob McAdoo downgraded Southwest shares to "underweight" from "overweight," saying Southwest's "model doesn't appear to be working anymore."
He said the carrier continues to add aircraft at a rate of 35 or more a year, even while most of the 73 new markets it's entered since early 2003 have been "consistent money-losers."
"Lacking some new direction, we believe LUV shares are going nowhere," he wrote in a note to investors.
This shouldn't come as news to anyone -- as questions over the airline's continued growth push, in the face of continued lessening demand at higher fares, first cropped up last fall, as I commented on at the time. The event then was the airline's media day, and I was a little surprised at CEO Gary Kelly's comments then that seemed, well, a bit overly exuberant, concerning the airline continuing its planned growth targets in 2007. Actually he said then that if the airline could find more airplanes on the secondary market that met their needs, they would grab them as well. And they have done just that -- picking up another pair of aircraft in addition to the new Boeing 737-700 aircraft already in the pipeline for this year.
Then, as the airline reported first quarter results, the earnings call for Southwest became one of the most contentious of the season, as analyst after analyst peppered Kelly with questions concerning the airline's continued emphasis on more growth.
Now this is a great Foto Friday specimen. (For a minute there I thought we were going to have to change this to "Cat Foto Friday.")
Thanks to Eric Olesen from Amadeus Revenue Integrity who sent this great shot of the "Star of Switzerland." Nice shot of the TWA Constellation. This silver beauty can be found at the Pima Air/Space Museum in Tucson.
It must be a holiday weekend.
Jonathan here, talking to you from Washington Reagan National Airport. I'm flying tonight to Indianapolis, on my way with several friends to tomorrow's Cards-Nats baseball game at Busch Stadium in St. Louis.
And, like I said, it's definitely a holiday weekend. Check-in lines at Midwest, AirTran, and ATA were quite long when I walked off the shuttle bus and in to terminal A. Northwest's line was thankfully short and I breezed through my bag check and through security. Hot on my heels though was one of a few large student groups in the building. I didn't watch them go through security (that seems like something the TSA would frown upon) but I would never want to be the chaperones responsible for a trip on its way through TSA screening. Talk about a nightmare in the making.
Even taking the school groups out of the picture (Wait, where did they go? I hope they're not all lined up at the Jerry's Pizza & Subs counter...) the terminal is plenty crowded for all of the airlines represented here.
Ahh, another strong indicator of heavy weekend travel -- oversold flight needing one volunteer. Northwest is giving one passenger on my flight a free round trip ticket to take a connecting flight and it looks like they got their man shortly after the announcement.
Today is the beginning of my first of two three-leg trips for the summer. This trip's routing is DCA-IND, IND-DTW-GRB, GRB-MSP-DCA between now and June 4. In July, I'm headed DCA-LAS, LAS-DEN-MCI, MCI-ORD-DCA. Toss in a week-long trip out to SFO in mid-June and it's turning in to quite a busy summer.
The last time I was here waiting for a flight, you might recall, it was raining ice pellets and we were delayed on and on. Today the forecast is hazy, but overall nice. I'm watching a cadre of Airbus, Boeing, MadDogs, Bombardier, and Embraer jets lift off to the South.
Here's hoping the rain holds off in St. Louis tomorrow.
Okay, I know. I've dropped the ball on this one of late. Kind of hard to go searching through photos when we're in the midst of writing an issue or doing an interview.
But now we're back to our usual Friday routine.
This means?
This means I need some PICTURES.
C'mon guys. Several of our American Airlines' readers have been very good at sending me shots -- but this is not the American Airlines' Foto Friday.
So -- for next week -- send me your shots. Airplanes, people you work with, the barbecue pit out there under the Southwest gates in Phoenix I spied last week, (if you don't do it, I will because I have the shots) the rumba competition you had in reservations two weeks ago.
Just send your submissions to me care of hhegeman (at) planebusiness.com.
Foto Friday in the subject line will also help me pick them out from the rest of the usual fodder.
A hearty welcome to yet another addition to the airline-related blogosphere.
Today the folks at the Ft. Worth Star-Telegram unveiled their new airline-related blog, SkyTalk.
Acting in the role of Sky King is Star-Telegram airline reporter Trebor Banstetter.
Trebor tells us the blog will be updated regularly by his partner in crime David Wethe, business editor Scott Nishimura, and, of course, Trebor.
Now we have dueling airline blogs in the Dallas Ft-Worth Metroplex, as Terry Maxon and Suzanne Marta unrolled the Dallas Morning-News aviation blog, Airline Biz, earlier this month.
Welcome to the neighborhood boys.
Surprise, surprise.
AMR's American Airlines and Continental Airlines will be able to cut their employee pension contributions by $2 billion under a provision that has apparently been written into the House version of an Iraq war spending bill.
The bill, approved by the House of Representatives Thursday night, would permit the airlines to assume an 8.25% annual discount rate in calculating the value of their pension obligations, rather than the 6% they use now.
Higher discount rates lower the pension obligation and pension expense.
This effort goes back to the pension legislation that was approved in 2006 that allowed both Delta and Northwest use a higher rate of 8.85%. While both AMR and Continental benefited from the legislation, in that both airlines were given extensions of time in which to fund their pension requirements, the discount rate for both was not raised.
Bloomberg reported tonight that AMR and Continental aren't named specifically in the Iraq bill. The proposal cites carriers with "non-frozen pension plans." American and Continental didn't freeze all their defined-benefit pension plans from accruing future liability, so they didn't qualify for the higher rate extended to Delta and Northwest.
Other, smaller carriers with unfrozen defined-benefit pension plans also would qualify for the higher rate, including Alaska Air Group.
This bill now moves to the Senate, where earlier this evening their version of the Iraq funding bill was passed.
Tickers: (NYSE:AMR), (NYSE: CAL)
Okay -- subscribers of PlaneBusiness Banter can now access this week's issue by clicking here.
We're back on schedule this week. No cross country travels to compensate for. Look for this week's issue of PlaneBusiness Banter to be posted later tonight.
An interesting little new widget finally came out of beta this week and I think it's safe to say airline revenue management folks are probably not too happy about it.
The application is called Yapta and it is a little downloadable program that will track air fares for you, letting you know if prices are going up, going down, or staying the same.
Oh, and if you're wondering, Yapta stands for Your Personal Travel Assistant.
As AppScout.com reported today,
"It's very easy to input the flight information, but Yapta makes it even easier with a widget that you can download called Yapta Tagger. The browser add-on integrates into airlines' websites; when browsing through available flights on, say, American Airlines' site, you'll see a little button next to each flight that says "Tag it with Yapta." Click the button and Yapta will add the flight to your list of tracked flights.
All this is fairly helpful when shopping, but it's even more helpful once you've already purchased your tix. Input your flight info and how much you paid for the tickets, and Yapta will continue to keep track of the price until your plane takes off. Why is that so cool? Because airlines will refund the difference if the price drops below what you already paid.
I spoke with Yapta President and CEO Tom Romary a few weeks ago, and he said the airlines are not going to be happy about a service that lets consumers track their prices day to day. Romary, a former airline guy himself, also said airlines try to keep the refund policy under wraps, and here's Yapta building a whole business out of publicizing it."
"By enabling travelers to tag the exact flights they want from leading travel sites and receive e-mail alerts when prices drop, we're providing complete price transparency and presenting them with the opportunity to save a significant amount of money," Romary added in a press statement this week.
Yes, if that name sounds familiar it should. Romary was vice president of marketing at Alaska Airlines prior to starting up Yapta.
For that favorite pilot on your gift list, a reader suggests that one of these might just be the thing for Father's Day.
Hey, you know we love you guys. Really.
According to a DOT release today, the number of daily passenger flights between the United States and China will more than double by 2012 and air cargo companies will have greatly expanded commercial freedom by 2011 as part of a new civil aviation agreement reached by U.S. Secretary of Transportation Mary E. Peters and Chinese Minister of Civil Aviation Yang Yuanyuan.
Starting this year, Peters said, the new agreement will allow for 13 new daily flights operated by U.S. carriers to and from China within five years. One new daily flight will be added in 2007 and 2008, four new daily flights in 2009, three more daily flights in 2010, and two new daily flights in 2011 and 2012 for a total of 23 per day. Under the current agreement, U.S. airlines today can operate only 10 daily flights into Beijing, Shanghai, and Guangzhou.
In addition, this agreement will allow the U.S. to designate three additional U.S. carriers to operate to China: one in 2007 and two in 2009. The deal also will provide U.S. cargo carriers with virtually unfettered access to Chinese markets by lifting all government-set limits on the number of cargo flights and cargo carriers serving the two countries by 2011, Secretary Peters added.
The Secretary also stated that, as part of today's agreement, U.S. and Chinese officials have committed to resume negotiations in 2010 to establish a timetable to achieve the mutual objective of full liberalization.
Thanks to Donald Mamula who let us know that we had a typo on our earlier Forbes link from today. It's fixed. We'd dropped the "h" in "http."
Forbes, "Nightmare at 30,000 Feet."
"If the US MEC cannot bring the problems of the US pilots to this governing body for redress, where should it turn?"
So ends a 21-page presentation filed Monday with ALPA by the US Airways East pilot group.
The ugly situation with the seniority process of the old America West pilot group and the US Airways East pilots took yet another turn Monday when the US Airways East pilot group filed a formal complaint to ALPA, in which it claims the recent seniority decision by ALPA arbitrator Nicolau "violates the requirements of ALPA Merger Policy and should be invalidated and remanded to another arbitrator for resolution consistent with merger policy."
You can download a copy of the document here.
As one PlaneBusiness Banter subscriber wrote to me today,
"Did you catch that very last sentence in the presentation given to ALPA National yesterday by U-ALPA? Was that not a shot across the bow?
This thing will come down one of two ways… either ALPA National vacates the award because the arbitrator did not follow ALPA Merger Policy, or ALPA will cease to exist on LCC property. It’s really quite as simple as that. It has nothing to do with the argument for a random outcome as the AWA pilots seem to suggest. You have to ask yourself, what would happen if the arbitrator had decided to integrate the list by hair color? Would ALPA National be bound by his decision as the AWA pilots seem to suggest? Of course not. So now we will wait to see how the Executive Council rules. I don’t place much faith in ALPA to do the right thing… but in this case, it has been made clear to them that either they fix this atrocity, or they will lose 5,000 dues paying members. In the end, it’s always about the money. Remember the cliché, “follow the money”. I think that may be apropos here."
Tickers: (LCC:NYSE)
Skybus flew its first flight today. From Columbus to Burbank.
I dunno. Maybe I'm just getting too old and set in my ways, or maybe I just know better. But this whole concept does absolutely nothing for me -- either from a passenger perspective, or a potential investor perspective. And certainly not from the perspective of what more low fare capacity is going to do for the current domestic RASM situation in the U.S.
Oh, and if you want to become a flight attendant with Skybus, be aware that you will be paid $9/hr. or roughly $16,000 a year, but you will make 10% in commissions off the "products" you sell in the cabin.
Or as Mark Tatge describes the set-up today in Forbes, "Nightmare at 30,000 Feet,,"
"There's no such thing as a free lunch--especially on Skybus Airlines, a carrier starting service in late May. Sure, you can get a $10 fare to travel one way from Columbus, Ohio to such cities as Los Angeles, Fort Lauderdale and Boston.
But you'll pay in peace and quiet. Skybus flight attendants will be hawking not only food and water but also such sundries as suntan lotion and jewelry to an extremely captive market. And the attendants will have incentives aplenty to tap you on the shoulder. Paid only $9 an hour, or $16,000 a year, they'll get a 10% commission on any merchandise sold in this flying souk. (Pilots, paid $75,000, don't get a cut, but we can only imagine the infomercial-like announcements.)
'If the flight attendants could sell real estate onboard, we would do it,' jokes Skybus Chief Executive William Diffenderffer, 56, who says the list of items for sale is going to get longer."
Rah rah. Power on boys.
Think I'll pass.
Was reading an interview in the Rocky Mountain News with United's SVP of Planning, Kevin Knight that Chris Walsh did this last weekend, and at the end of the question and answers, I saw this comment from Knight.
Chris Walsh: "Speaking of Ted, how is it doing?
Kevin Knight: "Ted was developed very specifically for certain markets where our customers are traveling primarily for leisure. That's how we deployed Ted. In Denver currently it's nine markets. We think Ted's probably about the right size at the present time."
Uh-huh. Right. Anyone else notice the past tense use of "deployed"?
Anyone willing to make a bet that United suddenly announces an expansion of Ted?
Nah, I didn't think so.
Ted, another fine product of the "Feed the Hungry Consultants" project. (This is an ongoing for-profit venture the airline industry continues to generously fund year in, year out.)
Ticker: (UAUA:Nasdaq)
Heh.
I just had someone send me a note and inquire, "What, that is all you can say about that game?"
Yep.
Frankly I found the fourth quarter Friday night nothing short of excruciating. Stop Steve. Just stop. I don't want to see it go from the Suns being down 20 to them only being down 5, to them going down 10, back down to 6, and so forth. Meanwhile the clock ticks ...
Just call up the airlines, make the vacation reservations and go. Stop making it so darn painful!
It was just a shame how the series went down -- it wasn't just the game Friday night. But then again, the game Friday night is what I had pretty much expected.
Translation? NBA Commissioner David Stern is still on my list. And I'm not talking the "good" list either.
I am not all that interested in the rest of the games, although I'll probably check in from time to time to see what's going on.
Kudos to San Antonio's Tim Duncan, who told the reporter after the game Friday night when asked about the suspensions, "It's unfortunate the way the whole thing happened."
Yes, indeedy.
I've now heard from quite a few folks who were at the American Airlines' annual meeting last week -- and given what snippets I've been told from a number of folks -- Mitchell Schnuman's column in the Ft. Worth Star-Telegram is spot on in terms of capturing the sense that most felt who were there.
Entitled "What is Gerard Arpey Up To Now?" the column discusses Arpey's attempt to simply "stonewall" the issue of executive bonuses.
"For months, employees have slammed the chairman and chief executive of American Airlines for the $160 million in stock awards given to management, so he couldn't have been surprised when the subject came up repeatedly Wednesday. But he offered almost no defense.
"In all likelihood," Arpey said, "this is an issue on which we may have a hard time finding common ground."
He used the no-common-ground line all morning, as shareholders and reporters asked how he would rebuild the trust with American workers. It was a nonanswer answer, a way of saying: "There's nothing to talk about. Move on."
No one on the board stepped forward to bail him out and justify the company's pay plan. Or to explain why workers shouldn't feel betrayed, after management cashed in on the airline's rebound and the rank and file didn't.
It was almost painful to watch, if you're an Arpey fan -- as I am. His critics, particularly Ralph Hunter of the pilots union and Bobby Gless of the Transport Workers Union, sounded more reasonable and more genuinely concerned about the company's welfare. In contrast, Arpey looked like a stonewaller with something to hide.
It was a disappointing, even baffling, performance, given the preparation time and the spotlight of the annual meeting. And it was reminiscent of how Arpey and American handled the Wright Amendment fight for more than a year.
Then, like now, they flew in the face of public sentiment, got labeled the bad guys and stubbornly refused to be drawn into any talk of a compromise. At times, they looked foolish, petulant and self-serving."
While as Mitchell argues, it could be said that the airline's behavior in the Wright mess ended up well for the airline, all things considered, is this same gameplan one that is going to work with the employees?
I think not. So does he, as he calls it a "a risky strategy -- more risky than Wright, because the showdown is with American's own employees, rather than with a rival carrier and politicians.
He then adds, "Making enemies of Southwest Airlines or Dallas Mayor Laura Miller is one thing. This is more akin to playing passive-aggressive with your spouse: You can win and still lose."
Mitchell -- I couldn't agree more.
Ticker: (AMR:NYSE)
Late Friday the judge in the Northwest Airlines' bankruptcy case gave the airline the all clear.
The airline is now expected to leave the shackles of bankruptcy next Thursday, May 31.
Oh, and note -- Northwest Airlines' shares will begin trading on the New York Stock Exchange with the new ticker symbol, NWA.
"It's just a game."
Yep. That's right. And Friday night the Spurs finally put an end to the extended misery that had become the Spurs-Suns playoff series.
RIP.
Meanwhile Sunday night "Sopranos" fans were treated to another great episode. I continue to be in awe of David Chase and his team of writers. There is so much that goes on in any one scene of that program, it takes ten minutes of dissection later to figure out all the angles.
And even then you sometimes forget something.
Case in point : "Lincoln Log Sandwiches."
With all the more "heavy" things that occurred in last night's episode -- it wasn't until later today when I remembered those things that Carmela put out for A.J. to eat.
Those things alone would be enough to push anyone to suicide.
Okay, I have a confession to make. I'm sitting here working on my laptop so I can watch the Suns-Spurs game.
Ahem. Yeah, not looking too good right now.
I'm going to go ahead and post this week's issue. But yes, please disregard any typos you may find, as we're still cleaning it up.
Subscribers can access this week's issue here.
What some companies will do in an attempt to stave off a merger.
This afternoon Midwest Airlines announced that it has entered into a codeshare agreement with....(drum roll please) Northwest Airlines.
According to the airline's press release:
"The new partnership will greatly expand the networks of both carriers by adding 250 city pairs and more than 1,000 new flight options for customers. Passengers can book their entire flight on a single ticket, with all segments earning mileage credit in either the Midwest Miles or Northwest WorldPerks frequent flyer programs.
Northwest routes that will include the Midwest Airlines "YX" code are destinations beyond Northwest's hubs at Detroit, Minneapolis/St. Paul and Memphis throughout the United States and Canada. Midwest will also place its code on Northwest flights from Indianapolis, a Northwest focus city. Additionally, Midwest's code will appear on a number of Northwest-operated flights to Hawaii and Alaska.
Routes operated by Midwest Airlines that will carry the "NW" Northwest code are flights that connect at Midwest's Milwaukee and Kansas City hubs, as well as Omaha -- a Midwest focus city. Northwest will also codeshare on Midwest Airlines-operated flights between Milwaukee and Kansas City to Atlanta, Boston, Hartford, Los Angeles and San Francisco that connect to the Northwest/KLM trans-Atlantic network and trans-Pacific network."
Ticker: (AMEX:MEH)
As I said when AirTran raised its offer last month -- it was going to be hard for Midwest Airlines to keep the bulk of its institutional owners from not taking the sweetened deal.
Today, AirTran announced that holders of nearly 57% of Midwest Airlines' shares now back its hostile takeover bid.
AirTran said 13.9 million Midwest shares, or 56.6% of its equity, were tendered under AirTran's cash and stock offer that expired Thursday. AirTran extended the offer, which is currently valued at about $15.89 a share, to June 8.
While AirTran seems happy with the shares already tendered, claiming that it represents a "no confidence" vote in Midwest management, Midwest says publicly it matters not. "It doesn't change anything," said Midwest spokeswoman Carol Skornicka. "The board continues to remain steadfast in its view that the offer is inadequate."
I think Midwest is on the wrong side of the slippery slope in this one. Then again, they do still have a "poison pill" they can unleash.
Yep, after this travel-shortened week we should be back on our normal schedule. But not quite yet.
As always, I'll let subscribers know when we are up and posted tomorrow.
I think one of the best sports columnists around is Bill Simmons of ESPN.com. If you haven't read him, you need to. He's alternatively insightful, irreverent and oftentimes hysterically funny. (Yeah, I know. Can't understand why I would like him.) He's a died in the wool Red Sox fan also -- which doesn't hurt. Here's part of his column on the NBA fiasco from Wednesday.
"Let's say you're one of the best seven players on the Phoenix Suns. You love Nash -- he's your emotional leader, your meal ticket to the Finals, the ideal teammate and someone who makes you happy to play basketball every day for a living. He's killing himself to win a championship. His nose was split open in Game 1. His back bothers him to the point that he has to lie down on the sidelines during breaks. He's battling a real cheap-shot artist (Bruce Bowen) who's trying to shove and trip him on every play. But he keeps coming and coming, and eventually everyone follows suit. Just as things were falling apart in Game 4 and you were staring at the end of your season, he willed you back into the game and saved the day.
Suddenly, he gets body-checked into a press table for no real reason on an especially cheap play. You're standing 20 feet away. Instinctively, you run a few steps toward the guy who did it -- after all, your meal ticket is lying on the court in a crumpled heap -- before remembering that you can't leave your bench. So you go back and watch everything else unfold from there. Twenty-four hours later, you get suspended for Game 5 because your instincts as a teammate kicked in for 1.7 seconds.
Think about how dumb this is. What kind of league penalizes someone for reacting like a good teammate after his franchise player just got decked? Imagine you're playing pickup at a park, you're leading a game 10-3, your buddy is driving for the winning layup, and some stranger clotheslines your buddy from behind and knocks him into the metal pole. Do you react? Do you take a couple of steps toward him? I bet you do. For the NBA to pretend it can create a fairy-tale league in which these reactions can be removed from somebody's DNA -- almost like a chemical castration -- I mean, how stupid is that?"
If you haven't read his entire take on the Suns-Spurs NBA suspension fiasco, you need to. You can catch the entire column here.
I know. Airplanes, airlines, unhappy employees, unhappy passengers. We'll get back in gear with the usual stuff here shortly....
Then the mayor tried to steal the New Orleans Saints in a rather rude example of "taking advantage of a situation" following Hurricane Katrina.
Then there were always those games between the Spurs and the Mavericks when I lived in Dallas. I began to harbor a distinct dislike for Tim Duncan and that perpetual "Who me?" look he has on his face years ago.
Now this. :-(
Heartbreaking game in Phoenix last night. Have to give the Suns credit -- they came out of the chute last night as though they were possessed. They played like maniacs.
Only one problem. There weren't enough guys to play like maniacs for the entire game -- and that eventually caused those who were playing like maniacs to get tired. Including Steve Nash -- who basically couldn't leave the court at all -- as none of the guys out there could lead the team as Amare Stoudemire does when Steve takes his infrequent back breaks on the floor.
I don't care if you are a Suns fan or a Spurs fan, this series has been irretrievably tainted.
Game six is in San Antonio Friday night. Final game seven (if there is one) will be in Phoenix on Sunday. I see courtside seats at the US Airways Center are going for more than $6000 a piece if you're interested. Yee haw!
In case you missed it, there was a fairly notable DOT judge's ruling that came down Tuesday that basically sided with the low fare carriers and international carriers who fly out of LAX. You may recall that earlier this year LAX began imposing much higher terminal fees on both groups. The airlines affected then sued the airport.
Much to the surprise of LAX, U.S. Administrative Law Judge Richard C. Goodwin sided with the airlines this week -- in a ruling that left little question he sees very little merit in the airport's arguments. Not only that, but he also cited what he called "systemic problems with the airport's budgeting system."
From the LA Times:
In a potentially costly setback, a judge for the federal Department of Transportation found Tuesday that higher terminal fees the city airport agency imposed on low-cost and international carriers at Los Angeles International Airport earlier this year are unreasonable and discriminatory.
The ruling, if upheld, could cost Los Angeles World Airports millions of dollars and throw into question how the agency would pay for added security since 9/11 and improvements at timeworn LAX.
The fee increase, imposed by the city Airport Commission, nearly quadrupled rent and maintenance costs for domestic carriers in Terminals 1 and 3. Airport officials argued that the jump was necessary because they were subsidizing the airlines. Carriers contended that the higher costs put them at a competitive disadvantage, because airlines with long-term leases would continue to pay lower terminal rent.
The carriers appealed the fee increase to the U.S. Transportation Department.
Carriers and agency officials both expressed surprise that U.S. Administrative Law Judge Richard C. Goodwin sided with the airlines, which had repeatedly argued that the increases would force them to raise fares and limit flights. The strongly worded, 78-page ruling also brought up broader concerns, including what Goodwin termed systemic problems with the agency's budgeting system.
The agency's "entire accounting system is suspect and cannot be relied upon to provide accurate and timely information," Goodwin wrote. Although the ruling isn't binding, its findings are so strong that many participants expect Transportation Department officials to take it to heart when they issue their final decision June 15.
During his seven-week investigation, Goodwin conducted a 15-day hearing in Los Angeles, during which numerous airport and airline officials testified. He also reviewed 11,000 pages of documents and 500 exhibits.
Low-cost domestic carriers in Terminals 1 and 3, including Southwest, Alaska, US Airways Group, Frontier and AirTran, issued a joint statement saying they are "very gratified" by Goodwin's decision.
"The ruling upholds clear and long-standing principles of law that are designed to protect consumers and airline taxpayers alike from excessive, unreasonable and discriminatory payments for the use of an essential public facility," they said.
An attorney representing 21 international carriers who operate out of the Tom Bradley International Terminal at LAX also applauded the ruling, saying it affirms their contention that existing leases bar the airport from unilaterally charging higher maintenance fees. In a separate complaint filed with the Transportation Department, the carriers are challenging increased rents imposed earlier this year.
According to a GAO report that was issued last week, more than four years after the process started, the Department of Homeland Security "lacks a comprehensive integration strategy with overall goals, a timeline, appropriate responsibility and accountability determinations, and a dedicated team to support its efforts.
"Despite some progress," the auditors for the Government Accountability Office concluded, "this transformation remains high risk."
"Managing the transformation of an organization of the size and complexity of (Homeland Security) requires comprehensive planning and integration of key management functions that will likely span a number of years."
But the DHS's implementation of such changes is lagging. Its "financial management systems still do not conform to federal requirements," and it "has also not institutionalized an effective strategic framework for information management," the GAO report said.
I probably don't need to remind you that DHS is the agency that supervises the TSA.
Yes, DHS, the same agency whose website has the tagline, "Preserving our Freedoms, Protecting America."
While there were, clearly, a couple of positive notes at the Southwest annual meeting this morning, it does not sound like that tone originated with the first airline to hold its meeting today in the metroplex -- American Airlines.
As many of you may be aware, both airlines usually hold their annual meetings on the same day. American usually starts at 8 AM, Southwest at 10 AM. And for all these years, neither side will give reporters a break (and a little extra time to get from one to another) by adjusting their schedules.
Some bizarre DFW turf war of sorts.
Anyway, as I hear it -- the security at the American meeting was, as one reader put it, "unprecedented." Including metal detectors. According to Ft. Worth Star-Telegram reporter Trebor Banstetter, "Airline officials said they increased security due to the recent killings at Virginia Tech."
Uh-huh. Well I guess that's a good excuse as any. Maybe the fact that many employees are not too happy also had something to do with it. Ya think?
On the agenda this year was a non-binding resolution that the Allied Pilots Association got put on the agenda, one that would have seen shareholders given the opportunity to voice approval or disapproval of executive compensation plans. The resolution failed, but probably by less than many might have thought. The measure was defeated by a 58% "no" vote.
Meanwhile, the TWU took advantage of the meeting to present 17,000 petitions from employees and customers critical of the management bonuses.
In addition, American pilots protested on Wall Street Wednesday in support of the union's proposed "say in pay" proposal.
Just another day in paradise.
Ticker: (NYSE:AMR)
Bye bye desert. Hello wind, rain, and ugly lightning.
Yes, yours truly is back in the swamp and well, it's a nasty rainy swamp today as a front moves through.
Speaking of ugly and nasty, I'd say that pretty much sums up the situation we now find between the Phoenix Suns and the San Antonio Spurs as we head towards the fifth game of their playoff series tonight. Whether you think the "punishment" handed out by NBA Commissioner David Stern to the Suns' Amare Stoudemare and Boris Diaw was right or wrong following Robert Horry's love pat to Steve Nash Monday night -- one thing is for sure. Stern can now say he single-handedly altered the outcome of this playoff series. No matter who wins. No matter what happens.
And personally I think that stinks.
I'm also not surprised that Stern has now apparently decided not to attend tonight's game in Phoenix as he was supposed to do.
Can't imagine why.
On the airline front, there was some news from the Southwest Airlines' Annual Meeting this morning. I was supposed to have been in Dallas this morning for the meeting, but alas, things here at home with the PlaneParents had me come home a bit early last night.
But the scoop is this. Southwest is now going to make its inventory available on Galileo GDS systems. Galileo and the airline announced a new 10-year distribution agreement this morning. The agreement will provide Galileo's Apollo agencies with access to Southwest's publicly available fares, but would exclude Web specials, special promotions and Ding alerts, which are sent directly to customer desktops.
The airline will apparently participate in the "basic level" Apollo system -- with the intent to move at some point to the "full connect" program.
The second bit of news concerned the announcement last week that Southwest is going to equip all of their aircraft with RNP (Required Navigation Performance) capability. Today the airline announced that it has partnered with Seattle-based Naverus to do so.
Following FAA approval to conduct RNP operations, Southwest and Naverus will work with the FAA, Air Traffic Controllers, and airport communities to develop and implement tailored approach and departure procedures at each of the airports Southwest serves.
That RNP is pretty cool stuff -- and is the cornerstone of the new FAA NextGen ATC planning.
Ticker: (NYSE:LUV)
Arrrggh,. I hate weeks like this. I'm swamped!
Okay earthlings. This week's issue of PlaneBusiness Banter is now posted. Or rather the first of our two issues this week is now posted.
Meanwhile yours truly is headed back to the Worldwide Headquarters tomorrow. And just when I was getting used to 107 degrees.
Talk to you later. I have to go send out emails.
PlaneBusiness Banter subscribers have no fear. The next issue of PBB will be posted Monday. It's a good issue. We have a column about the recent Phoenix International Airline Symposium, where yours truly was hanging out last week, the latest DOT numbers, and a quite good Lounge Lizard interview with US Airways CEO Doug Parker. And yes, we were drinking cold ginger ales while we talked. No beers.
Talk to you guys later!
Thanks to a previous PBB subscriber and a never-ending resource of Braniff history, Mr. RT Simpson of Phoenix, who wrote this trip down memory lane concerning what happened 25 years ago today -- on another airline geek list that I belong to.
"It was one helluva storm on May 12th.
As I left a meeting in downtown Dallas and got onto the turnpike to my home in Arlington, I turned on the radio to KRLD for an update on the weather. The windshield wipers were on their highest setting, yet mother nature was easily winning the battle of reduced visibility. I knew spring storms in North Central Texas could be quite severe, but nothing prepared me for what I heard on the radio.
KRLD reporters were interviewing Braniff employees who were packing up their personal belongings and told not to return to work. For the past several months the roller coaster known as Braniff International was one of the most followed news stories in the Metroplex. Delayed paychecks, route consolidations, 3 for 1 ticket sales, celebrity endorsements to save Braniff, the sale of Latin America routes and the impact of a possible shutdown on the local economy.
But none of that mattered anymore as for the first time ever it became apparent that Braniff had gone bust. As the thunderstorm pounded DFW International Airport, flights were routinely delay at all airlines. But only Braniff canceled flights and no one at the airport seemed to know why. Even Braniff employees weren't told.
Everyone at Braniff World Headquarters, a sprawling monument to the ambitions and ego of former CEO Harding Lawrence, were tight lipped. But after 5pm when the employees left the building, then word went out that due to business conditions Braniff was temporarily shutting down and a news conference would be held the next morning.
As the storm lifted and weather returned to normal, Braniff's fleet returned to DFW where the planes were parked around the semi circular terminal. As far as the eye could see were brightly colored Braniff 727s..some in the Ultra livery, but a lot in the older two tone combination. There wasn't enough money to repaint the entire fleet. The 747 to London never left the gate. The 747 to Hawaii was enroute to Honolulu and would return the next morning. The 747SP was ferried from Miami, where it flew to Latin America destinations. All the DC-8s went to Braniff's maintenance facility at Love Field as they would not be needed if the airline was to restart in the future.
At the stroke of midnight a Bankruptcy judge signed the three petitions putting Braniff into Chapter 11. A news conference in the morning revealed the ugly truth: All but around 100 employees were terminated. Paychecks issued in the past week were not negotiable. There would be no resumption of service in the near future. The debt was too great, the assets too few and the airline industry was in shambles. Even arch rival American Airlines was losing money.
Gone were Flying Colors. Gone were glamorous international destinations. Gone were Halston, Pucci, Girard, Calder and the style that set Braniff apart from all other airlines. And gone were the dreamers who never thought Braniff International would never end.
It was one helluva storm on May 12!"
As RT signs off on all of his emails, "Braniff International, Flying Colors forever!"
A very energetic and engaging young man showed up this morning with my room service breakfast -- and as he made a place for it on my desk here in my room -- I commented that he could just put the tray in and amongst the various notes, conference programs, laptop,and other items scattered about.
As he said, "Oh, trust me. I've seen much worse."
To which I said, "I'm sure you have lots of stories. When are you going to write your book?"
To which he replied, "Oh, well...I think most of my stories would come from my previous job. I was a flight attendant for four years."
Me: "For whom?"
Him: "A small airline -- Mesa Airlines."
Oh boy. Needless to say, after I assured him I was quite familiar with his former employer, I was treated to a fairly entertaining recap of several of his best stories.
And, in another case of how the airline world is a small one, guess who was speaking at the IABC dinner meeting last night in the room directly adjacent to where the Symposium was holding its closing dinner here at the Biltmore? Southwest Airlines' SVP of Corporate Communications Ginger Hardage.
IABC is the International Association of Business Communicators -- a great organization. I say that, of course, as the ex-President of the New York City chapter a few years ago. Yes, I'm biased.
It was great to see Ginger -- who was off to San Francisco today to do some work regarding the airline's new service there.
Meanwhile, the Symposium is over, and I am now packing up my things and heading over to US Airways, where I am scheduled to interview CEO Doug Parker later this morning.
More tidbits when I get resettled with connectivity later today.
Sorry guys. It's been a little busy around the Arizona environs this week. Yours truly was honored to participate once again in the Phoenix Sky Harbor International Airline Symposium. So that is where I have been hanging out.
Tonight we have about an hour off and then it's back to the grind of being social and talking airlines.
Once again the folks at Sky Harbor put on an engaging conference. And I think the venue this year better fits the conference. Instead of the huge J.W. Marriott in north Scottsdale, this year the symposium went back to its roots to the Arizona Biltmore. Nice place. And more cosy than the Marriott. The Marriott is a great hotel, but it's more suited to huge 1500 meetings and such.
About the only negative thing I could say about this year's conference is that the guest list was somewhat impacted by two things. One, the Bear Stearns Transportation Conference was this week in New York. That prevented at least one, if not two airline CEOs from participating today. And then there was JetBlue's Russ Chew, who was also supposed to be here today.
Yes, well, there was a bit of news that came out of the JetBlue board meeting -- and I'm sure you are aware of it. The board of directors asked David Neeleman to step down, and Dave Barger has replaced David as CEO. David will now assume the role of non-executive chairman. Meanwhile, as most of you also know, Russ Chew was recently hired by the company as its new COO. So alas -- Russ had some other things on his plate today to tend to.
My take on the Neeleman news? One thing is for sure. It certainly was a hot topic in the halls of the Symposium today.
But aside from that -- it was the right move. I am not surprised. In fact, I had written in PBB more than a year ago that I thought perhaps it was time for David to consider such a move.
But that didn't happen, and so here we are now.
I think the move came about a year too late, maybe a little more. Then again -- at least the good part of the decision is that it would appear there is at least one airline board of directors that has balls.
More than I can say for most of the others.
For PBB subscribers -- a reminder. This week's issue will be posted this weekend.
Next up, the pilots at US Airways and all those furloughed US Airways pilots now working for other airlines.
As most of you know, a crucial part of the merger between what was US Airways (US Airways East) and America West (US Airways West) is a merger of the two airlines' pilot groups.
While both groups are represented by ALPA, that is where any semblance of unity ends between these two groups.
Not surprisingly, the major issue here, as it has been since the merger was first announced, is the issue of how the two groups would be merged. The US Airways East pilot group has argued that Date of Hire (DOH) should be the way seniority is determined. Not surprising, in that you'd have most US Airways East pilots end up on top of the bulk of the US Airways West pilots. Remember that folks were flying for US Airways before America West even existed.
Friday, an arbitrator ruled on the issue of the merged seniority list.
In this case, I think it would be fair to say there is a little on both sides to make folks happy, and probably more on both sides to make some folks upset. Just depends on the individual pilot's situation.
In a nutshell, the very senior US Airways East pilots were placed above all US Airways West pilots, but that does not stay the same as the list moves through the middle and junior levels of the US Airways East pilot group.
In those tiers, both mid-level and lower US Airways East pilots were placed at a disadvantage to the US Airways West pilots.
So, if someone is currently a senior US Airways East pilot -- he or she should be pretty happy. If he or she is a senior US Airways West pilot, that is not the case. And so it goes.
But from the top tiers down, it appears