Monthly Archives: May 2007

New Aviation Agreement with China Announced

China-Flag

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.

US Airways East Pilot MEC Says ALPA Arbitration Violates ALPA Merger Policy

Argue-1

“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)

For Those of You Who LIke to Keep Track of Such Historical Events

Skybusblurb

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.

Nightmare at 30,000 Feet

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.

Ted’s Dead

4919020 O

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)

Follow-Up on Suns-Spurs Game

Stern

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.

Mitchell Schnuman Column Hits The Mark

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.

Arpey2

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)

Northwest To Exit Bankruptcy Next Week

Nwa-3

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.

Monday Musings

Nbalogo1-3

“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.

Edie

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.