Monthly Archives: March 2007

Robert Martens Surfaces

Isn’t it amazing how folks just disappear for a while and then pop up again?

Put Ex-American Eagle CEO Robert Martens in that category, as today it was announced he is the new Senior Vice President and President, US Airways Express.

From the release announcing his appointment,

“In his new position, Martens, 61, will oversee the US Airways Express program, which consists of 2,300 daily flights and includes nine regional airlines. He will have direct oversight of the airlines’ two wholly owned regional subsidiaries, Piedmont Airlines and PSA Airlines, and will report to US Airways President Scott Kirby.”

Where Are They Update

Thanks for the guesses you’ve submitted on just where those three smiling American Airlines’ ramp workers are located that I posted for Foto Friday.

But alas, we don’t have a winner yet.

Keep trying! Send me your guesses at hhegeman at

Bankruptcy Tuesday: Delta Air Lines


Delta CFO Ed Bastian told investors and analysts today that Delta Air Lines forecasts an operating profit of $816 million this year.

Bastian also said that the airline anticipates exiting bankruptcy in late April and that the airline will launch a stock-exchange listing in early May.

The deadline for creditors to vote on Delta’s reorganization plan is April 9, with a bankruptcy court confirmation hearing set for April 25.

While Bastian said the airline has decided which stock exchange the new shares will trade on, he would not disclose the decision publicly.

Delta expects to carry forward about $7.8 billion in net operating losses.

As for the “C” question, (are you as tired as I am of the word, consolidation?) Bastian no doubt got a few tongues wagging today after he reportedly said that “airline industry consolidation will be one of the top issues for discussion by Delta’s board once the bankruptcy case is over.”

“The question is how long is it going to take,” said Bastian. “I think consolidation is eventually going to occur.”

However, Gerry Grinstein was quoted later as saying that he saw Delta more as the acquier, not the acquiree — and that he would not rule out the possibility of Delta acquiring a low-cost carrier.


One final note. Delta also talked Tuesday about how it plans to spend big bucks to upgrade its operations at JFK in New York.


What about all those nice new gates up in Boston?

Okay, I’ll behave.

It does not appear that anyone at the meeting brought up the new “grand global marketing scheme” for the airline, nor gave any hints as to what is going to replace the “drapes” on the tails of the Delta aircraft, as CEO Gerry Grinstein described them in a recent employee question and answer session.

But Bastian did, apparently, more or less confirm that Delta subsidiary Comair could be up for sale rather shortly.

“We will, once we’re out of bankruptcy, look at whether owning that business makes a lot of sense,” Bastian said at the


During a conference call later with reporters, Bastian elaborated that Delta’s effort to maximize returns for shareholders may mean “spinning off certain assets, such as Comair.”

Raise your hand if you are surprised.

Grinstein also said today that the airline expects to have its new 11-member board announced by the end of the week.

Bankruptcy Tuesday: Northwest


Both airline bankruptcy beefcakes are in the news today, as they continue to make progress in their efforts to leave the halls of bankruptcy court for the last time.

On the Northwest Airlines’ front, Monday U.S. Bankruptcy Judge Allan Gropper ruled that the airline can begin seeking creditor approval of a plan to exit bankruptcy. The deal values the airline at about $7 billion.

Gropper said that once Northwest revises its disclosure statement to incorporate agreements reached Monday, the statement could be released to creditors along with a restructuring plan.

Northwest has said that it plans to cancel all existing shares in the company and issue 272 million new shares. A stock offering will also offer a percentage of shares at an estimated $27 a share.

Another hearing will be held this week to determine whether an examiner will be appointed to investigate merger discussions that may have taken place with Northwest. This is in response to a complaint filed with the court by a group of funds that invested heavily in shares of the bankrupt stock — anticipating a potential merger.

A reorganization plan could be mailed to creditors as early as April 6.

A hearing to confirm the company’s reorganization plan is scheduled for May 16.

The group of funds, along with the Association of Flight Attendants and the Air Line Pilots Association argued that the company’s disclosure statement did not go into enough detail about management compensation and stock options that will be a part of the deal.

At the judge’s instruction, Northwest consulted SEC lawyers, who approved the airline’s plan to wait until 20 days before the voting deadline to release more details.

While the SEC said it was okay, I wish the airline had issued the details now – and not at the last minute. The fact they are doing so can only mean that they anticipate a heavy cry of opposition over whatever the plans are.

Was Gerald Grinstein’s recent example made in vain?

Good News for Employees

Aside from the management payout details that are still not known, there was some good news for employees Monday.

Northwest will give 4,000 non-union employees $77.4 million in cash and stock as part of a bonus program after the airline emerges from bankruptcy.

The employees, who took pay and benefit cuts as the company reorganized, would get 40% of the bonus as cash when the company emerges from court protection.

The remaining 60% would be issued as new common stock in the company one year later, as long as the employee is still with the company.

It was also announced that flight attendants and certain workers represented by the International Association of Machinists could receive a claim of an undisclosed amount, partially restoring pay and benefits that the company extracted earlier. The company and union supported the move, and it will be considered in an hearing to be scheduled soon.

The IAM claim, estimated by the union to be worth $212 million today, would replace special Northwest shares issued as part of a 1993 deal when IAM workers made concessions in an effort to help the airline stay out of bankruptcy.

Foto Friday


Now, isn’t this a jovial looking group? I think so.

Thanks this week for this wide-angle contribution from one of our readers. Now, my question is this. Big-time brownie points for anyone who can tell me where this photo was taken.

Send me your guesses at hhegeman at

Sorry for the spell out. Have to try and thwart those bots that send me all that email from China.

PBB To Be Posted Soon

Home-Typewriter Copy-19

It must be time for our usual Thursday update.

For those of you who are PlaneBusiness Banter subscribers, this week’s issue should be posted in about an hour or so. I’ll let you know when it’s up.


Open Skies For All


Well, maybe. I’ll believe all of this when I actually see it happen. But it does seem we passed a major milestone in the bigger fight today.

The European Union today entered a deal with the United States that will boost competition and the number of passengers flying across the Atlantic, but said the accord was only a first step to prise open the US air travel market.

Under the so-called “open skies” agreement – the first of its kind – EU air carriers will be allowed to fly from any airport in the 27- member EU bloc to any airport in the US and vice versa.

The accord will replace bilateral pacts between the US and EU countries, ruled as illegal by the EU’s highest court.

German Transport Minister Wolfgang Tiefensee, whose country currently holds the rotating EU presidency, hailed the unanimous agreement as a “breakthrough” for trans-Atlantic aviation ties.

However, he acknowledged that the deal was only second-best for the EU, as it did not fully open the trans-Atlantic air travel market.

EU ministers said they were poised to immediately start negotations on a second deal with the US in a bid to gain more access to the closed US market.

For the rest of the story, please click here.

However, at Britain’s request, EU ministers agreed to delay plans to implement the deal from October this year to March 2008.

The UK had raised concerns that open skies reform did not go far enough on US airline ownership rights.

As most of you are aware, the US has insisted on limiting any foreign company from owning more than 25% of a US airline’s voting rights.

This is a huge deal folks. Especially for the cargo carriers. I’m sure the champagne is apoppin’ at FedEx, even if their numbers yesterday left a little to be desired.

One thing is for sure. It should certainly make for a very entertaining 12 months as the details of how this “big picture” change will be implemented in practice.

Kicking off that line of thinking this morning was Continental, which immediately filed with the U.S. Department of Transportation for rights to serve new routes to Europe, including a Houston-Heathrow route and a Cleveland-Paris route.

Bada Boom, Bada Bing. Let the fun begin!

Kudos To Delta’s Grinstein


Goodness knows I have not always been a fan of Gerald Grinstein at Delta Air Lines. I’ve questioned a number of his decisions over the last couple of years, and I have wondered why he didn’t do more at the airline when he was on the board of directors to change the direction in which the airline was headed.

But it’s hard to find fault with the airline’s proposed management compensation plan that was filed in bankruptcy court today.

Unlike the top-exec bloated compensation plan that management at United Airlines put forth, and largely saw remain intact after the airline came out of bankruptcy protection, Delta Air Lines is not going down that path.

Unlike United’s Glenn Tilton, who could walk away with as much as $60 million from the United bankruptcy, Delta’s Grinstein apparently will walk away with no additional stock options whatsoever.

In addition, the airline will pay all of its non-union employees about $480 million in stock and cash when it emerges from Chapter 11, plus a July 1 pay raise and future profit sharing awards. Pilots have a separate deal with similar elements.

Delta says the immediate stock and cash payout will be worth close to $13,000 for a typical worker if they sell the stock immediately.

More in this week’s PBB after we’ve read the rundown of the executive payouts. But again, kudos to Gerald Grinstein.

Tickers: (OTC: DALRQ), (UAUA:Nasdaq)

Nice Video of A380 Landing at O’Hare


Click here.

Hey, we’re all airline geeks this week. Forget the lack of orders, forget the weight issues, forget the employee strikes against Airbus.

This week we are all just gawkers of the latest thing that can fly. The fact it is so huge is just icing on the cake. Or would that be two cakes? Two cakes and one french croissant?