Sky Talk

JetBlue tops customer satisfaction index, United on the bottom

JetBlue Airways and Southwest Airlines continue to please passengers with their air service while United Airlines continues to struggle to satisfy customers.

According to the American Customer Satisfaction Index, the airline industry improved its overall customer satisfaction score by 3 percent to 69. However, it still has one of the lowest customer satisfaction rates of the industries surveyed, beating only subscription TV and Internet service.

"Crowded seating, rising ticket prices, extra fees and poor service all contribute to a rather dreary travel experience," says ACSI founder Claes Fornell. "Airlines continue to improve service for business travelers, which is important since they are the most profitable customer group. Still, their satisfaction remains at a level slightly below that of other passengers."

The survey is based on interviews with almost 9,000 customers contacted between January and March about their experiences. JetBlue's score of 83 placed it in the top spot of the airline industry.

Southwest increased its score by 5 percent as it has worked on integrating AirTran Airways which it purchased in 2011. Fort Worth-based American Airlines ranked third from the bottom with a satisfaction score of 65.

Passengers were very satisfied with airlines' on-time performance and the ease of the check-in process, according to the ACSI survey. Air travelers were less happy with seat comfort and the quality of in-flight services, the survey found.

Airline	2012 score	2013 score	% change
JetBlue	81	83	2
Southwest	77	81	5
All Others	74	72	-3
Delta	65	68	5
American	64	65	2
US Airways	65	64	-2
United	62	62	0
Entire industry	67	69	3

-Andrea Ahles

Monday Midday Must-Reads

-The Supreme Court has agreed to hear a case that could decide whether airlines should be protected from lawsuits after mistakenly reporting a security threat. According to USA Today, the case involves Air Wisconsin Airlines reporting concerns about a pilot's mental state before he boarded the aircraft as a passenger. For full details of the case, read this blog post.

-The Paris Air Show is currently going on in France with both Boeing and Airbus touting pledges for big purchases of long-haul, wide-body jets. The Associated Press reports that Qatar Airways has put in orders for the Boeing 777 and Airbus announced that Doric Lease Corp. has pledged to purchase 20 A380s.

-And Airfarewatchdog.com founder, George Hobica, has new column on Huffington Post that provides the ins and outs on how to get elite frequent flier status quickly. "Airlines are competing for your business especially when carriers merge and become stronger. They know they can lure flyers away from other airlines because of their expanded network, and many flyers take the bait especially when media coverage touts the new airline's program," Hobica writes.

-Andrea Ahles

 

Bell to hire contract labor

Fort WORTH -- As early as Saturday, Bell Helicopter is expected to bring in contract labor because the company says machinists and other members of United Auto Workers Local 218 have refused to work voluntary overtime.

About 2,500 members of UAW Local 218 are working without a labor agreement while the union’s leadership continues to negotiate with the company, company officials said Friday. Union members soundly rejected the company’s contract offer on Sunday, 85-15.

“Unfortunately, for the past week, we have offered employees represented by the UAW Local 218 an opportunity to work voluntary overtime, but in nearly all cases they have refused that offer,’’ Bell Executive Vice President, Integrated Operations, Pete Riley wrote in an memo to employees.

Efforts to reach union leaders was unsuccessful Friday afternoon. Local 218 President Steve Andrews and other union officials did not return a request for comment. But a company memo said that the union has advised the employees to not work voluntary overtime.

Bell says it needs additional workers to meet its deadlines on work order and products. Contract laborers are scheduled to work at a limited number of Bell facilities and only the weekend, Riley said.

“While the union and our employees have the right to refuse to work voluntary overtime, we also have the right to support our customers -- who simply cannot afford a decrease in productivity or a slow down,’’ Riley wrote.

Union employees are encouraged to work overtime and earn extra pay, he said.

A sharp increase in healthcare premiums and a reduction in holiday pay were among the factors that prompted union workers at Bell to overwhelmingly reject a new contract offer, according to several workers.

While Bell said the “world-class” contract would provide pay increases of 9 percent over three years, the workers said many veteran employees would receive far less — no raise in the first year and 2 percent in each of the next two years.

Some workers, though, said the contract offer had many takeaways, including increased healthcare costs and reduction in job classifications that would outweigh the wage increase and could lead to layoffs.

Numerous workers have taken issue with information released by the company Sunday touting a proposed wage increase of 9.1 percent over three years.

They said the figure includes “wage progression” increases slated for some employees, such as new hires, that would provide automatic increases of $2 an hour. Others have salaries that rise by 75 cents an hour every six months.

But they said many longtime employees would see a salary increase of 4 percent by 2016. For an employee who makes $30 an hour, that is about $2,496 more a year, workers say, based on the current wage schedule.

On average, the Bell union workers earn base wage rates of more than $66,518 per year, according to the contract proposal.

Bell spokesman Bill Schroeder released a statement on Friday saying that the company would continue to negotiate in good faith.

“The offer the company presented employees represented by UAW Local 218 is a highly-competitive, world-class offer that provides industry-leading compensation including, on average, $15,682 in increased compensation per employee over the life of the agreement,’’ he said. “It also includes a best-in-class benefits package to support the well-being of UAW Local 218 represented employees and their families aligned with the one provided to Bell Helicopter’s non-bargained employees.”

Company officials did not respond to a request for clarification on the proposed wage increases or a request for comment on whether reduced job classifications would spur layoffs.

Because negotiations are ongoing, it’s “inappropriate” to discuss further details publicly, Schroeder said in a statement earlier this week.

Yamil Berard

F-35 program to ramp up production

After years of mishaps, including cost overruns, design snafus and delays, the Pentagon’s F-35 program leaders are now hoping to ramp up production of the costliest jet fighter program in U.S. history.

“We are cautiously optimistic that we will be able to raise production (in the fall) as planned,’’ Frank Kendall, under secretary of Defense for Acquisition, Technology and Logistics, told a room of reporters and other Pentagon officials at Lockheed Martin Aerospace Corp.’s factory headquarters on Thursday.

“This is not the program I saw in 2010,” Kendall said. “It’s much more stable, the design is much more stable, issues have been fleshed out and we have a path to try to resolve them.”

Kendall and several other Department of Defense officials were in Fort Worth on Thursday to attend an annual CEO business roundtable between the aerospace giant and its major customers.

Production is expected to reach 30 aircraft in fiscal 2014, which begins Oct. 1, and should exceed that rate by several times over the next several years. More than 2,300 planes are expected to be built for the military.

Lockheed Martin’s F-35 stealth fighter jet program has been mired in controversy almost from its inception more than a decade ago. Cost overruns exceeded cost projections and delays resulted in production delays. As a result, the estimated $400 billion defense program has drawn criticism from watchdog oversight groups, the U.S. Government Accountability Office and key leaders at the Pentagon.

The criticism also has been focused on the management of the program by former Lockheed head Larry Lawson who retired from the company earlier this year to accept a job at another aerospace firm.

At Thursday’s press conference, Pentagon leaders expressed satisfaction over new leadership at Lockheed. Even a former vocal critic said he was encouraged by the progress made in the last few months under the company’s new head of aerospace Orlando Carvalho.

Lt. Gen. Christopher C. Bogdan, who attended Thursday’s press conference, said his opinions are shifting.

“When I first came on the program ... I was pretty vocal about the relationship the government had with Lockheed Martin,’’ including another contractor, he said. “I can tell you there have been significant changes in leadership (at Lockheed). ...

“We believe our working relationship is definitely improving,’’ Bogdan said. “We are communciating much, much better with each other now.

“I”m encouraged by what I’ve seen over the last few months,’’ he said.

Kendall, however, also cautioned that it was still too early to declare victory. While F-35 program costs appear to be under control, risks are still associated with the program.

“We still have a long way to go ... I don’t want to be euphoric about this ... there’s a good deal of work to be done,” Kendall said.

Some of the progress with the F-35 program have been due to the government’s shift to fixed-price contracting, Kendall said, which shifts more of the risk associated with costs and overruns to Lockheed Martin. He also said that the negotiations for Lot 6 of aircraft were proceedingt more smoothly than for prior lots of planes.

In December, Lockheed received a Pentagon contract guaranteeing a final installment of about $127.7 million for the fifth production lot of F-35 fighters. It later received Pentagon contracts worth up to $3.67 billion for 31 additional F-35 jets, according to news reports.

Read more here: http://www.star-telegram.com/2013/03/05/4662895/impact-of-sequester-on-defense.html#storylink=cpy

Lockheed Martin employs more than 14,000 employees at its west-side factory. More than 9,300 employees are working on the F-35 fighter jet program.

Yamil Berard

Only two-thirds of American Eagle flights arrived on-time in April, government report says

American Eagle had only two-thirds of its flights arrive on-time in April, the worst on-time performance of the major carriers surveyed by the government every month.

The regional carrier, owned by AMR Corp., also had the highest rate of canceled flights, cancelling 5.3 percent of its scheduled flights in April.

All of the airlines experienced a decline in on-time performance in April. According to the Bureau of Transportation Statistics, 77.3 percent of flights arrived on-time, down from the 86.3 percent on-time rate the carriers posted in April 2012.

Hawaiian Airlines remained in the top spot with 93.0 percent of its flights on-time. Dallas-based Southwest Airlines posted a 78.4 percent on-time rate for ninth place while American Airlines had 72.3 percent of its flights on-time for twelfth place.

The carriers also lost more luggage in April as they reported a mishandled baggage rate of 3.08 reports per 1,000 passengers, up from a rate of 2.63 in the same month last year. The Department of Transportation also received 1.8 percent more complaints from passengers, receiving 1,076 complaints about air service up from the 1,067 complaints filed in April 2012.

There were two flights that had tarmac delays over three hours in April: a Delta Air Lines flight from New York LaGuardia to Orlando delayed for 183 minutes on April 19 and a United Airlines flight from Pittsburgh to Denver on April 8, delayed for 182 minutes.

Rank	Carrier	Percent of Arrivals On-Time
1	Hawaiian Airlines	93.0
2	Alaska Airlines	86.8
3	Delta Air Lines	85.6
4	AirTran Airways	81.2
5	US Airways	81.0
6	Virgin America	80.7
7	Skywest Airlines	79.7
8	Pinnacle Airlines	79.7
9	Southwest Airlines	78.4
10	Mesa Airlines	77.2
11	United Airlines	76.1
12	American Airlines	72.3
13	JetBlue Airways	71.8
14	ExpressJet Airlines	71.0
15	Frontier Airlines	68.6
16	American Eagle	66.9
	Total	77.3

Source: Bureau of Transportation Statistics

-Andrea Ahles

Bell wins contract for 99 tilt-rotor aircraft

FORT WORTH --Bell Helicopter has been awarded a second multi-year contract to build 99 V-22 Osprey tilt-rotor aircraft, the company announced Thursday.

The five-year contract for the production and delivery of the aircraft is valued at about $6.5 billion, officials said. The contract is with the U.S. Naval Air Systems Command and includes a provision to produce 23 additional aircraft.

“Signing this contract speaks volumes towards the confidence our services have in the V-22 Osprey,” said Marine Corps Col. Greg Masiello, V-22 Joint Program Office program manager in a press release.

“Since 2007, the V-22 has been continuously forward-deployed in a range of combat, humanitarian and special operations roles,’’ Masiello said. “Ospreys continue to transform our Marine Corps Air Ground Task Force and Air Force Special Operations by enabling missions not possible with conventional aircraft, and helped save lives where others could not.”

The V-22 Osprey uses tilt-rotor technology to combine the speed and range of a fixed-wing airplane with the vertical performance of a helicopter.

Bell produces the tilt-rotor aircraft in partnership with Boeing Co. The aircraft is assembled in Amarillo with many part and components made in the Fort Worth area.

More than 200 Ospreys are in operation, Bell officials said.

“The versatile V-22 Osprey is the ideal aircraft for an era when global militaries are being asked to do more with less,” said Vince Tobin, executive director, Bell Boeing V-22 Program.

The aircraft had a rocky development period that took more than two decades and included huge cost overruns and crashes that claimed 30 lives.

For example, its deployment to Iraq's Anbar province from 2007 to 2009, where as combat waned it was used mainly to transport people and cargo, won it criticism from the Government Accountability Office over maintenance and performance issues.

But recently in Afghanistan, the V-22 tilt-rotor has received positive reviews as Marines have been able to use it more widely, carrying freight or loads of Marines into or out of landing zones, often under intense fire.

This article contains material from McClatchy Newspapers.

Yamil Berard

 

American plans to add more seats to MD-80 and 737s

American Airlines plans to add more seats to its Boeing 737 and MD-80 fleets, according to a government filing made on Wednesday.

Vice president of flight services, Lauri Curtis, outlined the news in a letter sent to employees, saying the carrier hasn't determined yet how many seats it will add.

"On Tuesday, at a DFW Town Hall meeting with the newly announced Leadership Team for the new American, there was discussion about a decision to add seats to the MD-80 and 737 fleets and I wanted to share a recap of that with all of you. As you probably know, we are constantly taking a look at what our operation needs, and that includes how our fleet is configured. And sometimes, we make adjustments when we think it helps match supply to demand but can still be competitive. So from where we stand today, we expect to add seats to the 737 and MD-80 fleets, but we haven’t yet determined the right number of seats, and as a result, the impact on revenue and cost.

"Of course we are talking about adding seats and that automatically means the additional FA on a 737 regardless of the number of seats added. This will allow us to provide a higher level of onboard service while meeting the FAA staffing requirements. While this would obviously be good news for all of us, we are still working through the specific details and timing. So stay tuned! I’ll keep you posted!"

American's current 737 aircraft have 148 or 150 seats and it operates 195 of that aircraft type. The carrier also has 190 MD-80s, although it has been retiring those planes at it receives newer Boeing 737s and plans to add Airbus A319s to the fleet later this year.

Southwest Airlines has been squeezing six more seats into its Boeing 737s as part of its interior remodeling of the cabins that started in 2012. Its renovated 737s now have 143 seats.

-Andrea Ahles

99 more V-22 Osprey on the way

FORT WORTH -- Bell Helicopter is expected to get an order for 99 new V-22 Osprey tilt-rotor aircraft this week, according to an article published by Reuters.

The U.S. Navy plans to sign a five-year contract valued just under $6.5 billion to buy the new aircraft, which is built by Bell Helicopter in partnership with Boeing Co.

Talk of a second multi-year contract has been “a longtime coming,’’ aerospace analyst Richard Aboulafia said on Tuesday. Looming cuts to defense budgets have “prevented it from being signed earlier than now.”

Bell/Boeing’s current multiyear contract with its military customers is to build 30 tilt-rotor aircraft a year over five years. That contract ends in 2015.

Marine Corp. Col. Gregory Masiello told Reuters that the government’s decision to sign a second, five-year agreement showed its confidence in a program that had once been threatened with cancellation.

He said 92 of the aircraft in the new order would be built for the Marine Corp., while the Air Force would be set to receive seven aircraft, according to the article. The second, multi-year contract would end in 2017, and includes options for 22 additional aircraft.

Reuters also reported that the Navy is exploring the possibility of a third, multiyear contract for 100 or more aircraft.

Yamil Berard

Horton says he's grateful for departing American executives work as the airline operated in bankruptcy

American Airlines chief executive Tom Horton told employees that he is grateful for the work performed by departing American executives while the Fort Worth-based carrier has been in bankruptcy.

He also acknowledged in a message sent to workers on Monday that the new leadership team was made up primarily of executives from US Airways, which will merge with American later this year. US Airways chief executive Doug Parker will lead the newly combined carrier.

"As CEO of the merged company, Doug's first role is to choose the people to execute his plans to build a strong and successful future for the new American," Horton said.

Keep reading for the full letter from Horton.

-Andrea Ahles

 

Dear American Team:

 

Today marks an important milestone toward completion of our merger with US Airways. Doug Parker announced the leadership team who will lead the new American when the merger is complete, and we also named the new Board of Directors for the combined company. 

The new leadership team is composed mostly of leaders who have worked closely with Doug over the years, along with senior leaders who now serve on American’s team. As CEO of the merged company, Doug’s first role is to choose the people to execute his plans to build a strong and successful future for the new American.

Many on our current leadership team will be leaving the company after the merger closes later this year. To them I offer my gratitude for their extraordinary dedication over many years, and in particular, over the past year and a half to turn our airline around, creating a strong and renewed American poised for a successful merger.  In the weeks and months ahead, these leaders will continue to work with their counterparts at US Airways to ensure a successful merger integration.

Today’s announcements move us a step closer to a new chapter at American. I’m looking forward to serving as Chairman of our new Board after the merger closes. As Chairman, my first role will be to bring the new Board together in its mission to help guide the new American to a very bright future. 

There are no doubt more changes and challenges ahead, but the people of both companies have every reason to be optimistic about the future of American and the opportunities it will create. As we bring the restructuring to a successful close, we are building momentum which will only grow with the merger.

The American team across the world has shown tremendous spirit and strength. You should be very proud of your hard work to put American back on top.  

Thanks for all you do!

Tom

 

Monday Midday Must-Reads: The Cliburn edition

-Traveling to France? Be prepared for a few headaches. According to Reuters, French air transport workers unions are planning to strike from Tuesday to Thursday, leading several European carriers to cancel flights out of major French airports.

-Light sabers, even if they belong to the actor who played Chewbacca, get a little extra scrutiny by TSA agents. The Associated Press reports that Peter Mayhew, the seven-foot-tall actor was detained briefly as security agents at the Denver Airport inspected his walking stick which is in the shape of a light saber.

"Mayhew tweeted "Giant man need giant cane" from his verified Twitter account when the incident happened June 3. He also posted photos showing a TSA agent holding the replica laser sword, which comes up to his chest," the article said. Mayhew was allowed to continue on to board his flight to Dallas/Fort Worth.

-Some Sky Talk readers have wondered why I hadn't been posting as much to the blog lately and it's because I was listening to Beethoven, Prokofiev and Rachmaninoff for the past two weeks. I was on temporary assignment to cover the 14th Van Cliburn International Piano Competition. The winners were announced on Sunday evening (congrats to gold medal winner Vadym Kholodenko).

Here's some of the coverage from the Star-Telegram's Cliburn team, including a profile I wrote of Cliburn juror Liu Shih Kun, a pianist who came in second to Van Cliburn at the 1958 Tchaikovsky competition and later spent six years in Chinese prisons during the Cultural Revolution.

-Andrea Ahles

No strike for now, Bell and union continue talks

Hundreds of members of United Auto Workers Local 218 went back to work on Monday after an 85-15 vote to reject a Bell Helicopter proposal on a three-year contract.

Bell Helicopter officials announced Monday that the company will resume talks with the union’s bargaining committee, and union leaders say they are also interested in trying to hammer out an agreement before they call for strike.

UAW leadership had said it had not been prepared to strike on Sunday afternoon.

“In the event that we did strike, you would see picket lines,” service representative Wendell Helms said Sunday afternoon. “The union has not determined when there will be one (strike) or should there be one. All of those are processes that we go through.”

The company issued a statement on Monday saying that it would allow union workers to work on a temporary basis while Bell and the UAW continue to negotiate.

“Bell has and will continue to negotiate in good faith,’’ the statement said. “The offer the company presented employees ... is a highly competitive and world-class offer that provides industry-leading compensation.”

Sunday morning, an estimated 2,500 union members spent three hours reviewing a 90-page-plus contract that would offer a cumulative wage increase of 9.1 percent. On average, the contract would provide an average $15,682 in increased compensation to each employee over its three years.

But a number of the company’s proposals were almost instantly rejected before members walked out of the meeting in red T-shirts that said: “It’s your job. Protect it.”

“We’re not ready to make concessions,” Local 218 President Steve Andrews said on Sunday after the membership vote.

Union leaders had recommended that employees reject the contract because it proposes to eliminate job classifications, which could lead to hundreds of layoffs. Union officials also balked at cuts in the company’s defined benefit plan and employee benefits, and changes in overtime and holiday pay.

One proposal could trigger hundreds of layoffs in upcoming months, union leaders said. The company wants to combine a number of jobs and eliminate others. For example, it is proposing to eliminate sandblasters to allow all certified employees to perform those duties. Those employees who may be affected include wrappers, packers, dispatchers, material inventory clerks, saw operators and others.

In 2009, the company eliminated janitorial positions and contracted with an outside company, one union member said.

The company is also proposing to end Bell’s defined benefit plan for new employees. Those employees hired after June 10 would have to depend on a defined contribution or 401(k)-style pension plan.

Bell and union members have been meeting since April 18 to negotiate a contract. The local’s four-year agreement expired Sunday at midnight.

Helm said the best option was to return to the bargaining table.

“In essence, the membership is saying this is not an acceptable offer,’’ he said. “It triggers options for both sides ...(but) that’s exactly where we need to be at the bargaining table to get a fair acceptable package for these employees.”

Hourly workers last declared a strike in 2009, when Bell offered a proposal to boost healthcare costs by raising weekly employee premiums and doubling many deductibles.

Dozens of members streamed into the hall of Will Rogers Memorial Coliseum to vote. Some were pleased that the company had placed the contract on its website before the Sunday meeting. They said it allowed them plenty of time to review it before voting.

But others said the company had violated the terms of the negotiations by making the offer public before the meeting.

Yamil Berard

Parker thanks departing American executives, says it's time to move forward

In a letter sent to employees of US Airways and American Airlines, US Airways chief executive Doug Parker thanked departing American executives and said it is time to keep moving forward.

"We anticipate naming additional officers in the weeks ahead and will have the entire officer team selected by the time the merger closes, if not sooner. Looking ahead, I am confident that the new American will continue to provide great leadership opportunities for managers from both companies. In the meantime, please keep up the great work in support of our customers," Parker said in the letter.

Keep reading for the full letter from Parker.

-Andrea Ahles

 

June 10, 2013 

Dear American and US Airways Team Members,

Today I am pleased to announce the senior leadership team that has been selected to lead the new American Airlines. The team we are naming today is comprised of senior leaders from both American and US Airways. As individuals, they each have outstanding industry expertise and experience. Collectively, they form the best team in the industry. The team will be comprised of:

 

• ·         Scott Kirby: President
• ·         Elise Eberwein: Executive Vice President, People and Communications
• ·         Bev Goulet: Chief Integration Officer
• ·         Robert Isom: Chief Operating Officer and Chief Executive Officer of US Airways, Inc. post-close
• ·         Steve Johnson: Executive Vice President, Corporate Affairs
• ·         Derek Kerr: Chief Financial Officer
• ·         Maya Leibman: Chief Information Officer
• ·         Will Ris: Senior Vice President, Government Affairs

 

Scott, Elise, Robert, Steve and Derek will join the new American from US Airways. Bev, Maya and Will join from American.

I also wanted to let you know that Dan Garton will step down as President and Chief Executive Officer of American Eagle Airlines later this year. We will name a successor prior to Dan’s departure.

I could not be happier about this team. They are an intelligent, results-oriented and energetic group who enjoy working collaboratively. They are experienced airline executives who understand and love our business. They care about our customers and are dedicated to providing industry leading customer service with an unwavering commitment to safety. They understand they work for the shareholders of the new American and that their job is to reward the shareholders’ confidence in all of us.

And…they know that the only way they can accomplish all of those things is by engaging, motivating and respecting the more than 100,000 hard-working team members of the new American. Our job is to support all of you – to give you the tools and information you need to do your jobs and then let you do it as the exceptional and experienced group of aviation professionals you are. This team was built to do just that.

Mergers unfortunately result in departures, and there are some on both teams, but I want to use this opportunity to specifically thank some of the outstanding senior executives at American. The American restructuring is far and away the most successful in aviation history and it would not be possible without the exceptional and dedicated work of people like Dan Garton, Bella Goren, Gary Kennedy, Denise Lynn, Jim Ream, Jon Snook and Virasb Vahidi. We are grateful for their phenomenal work and dedication and are committed to building on the foundation they have put in place.

It is time to move forward and this announcement is a key step on the path. The merger is progressing well and we continue to expect it will close in the third quarter of this year. We anticipate naming additional officers in the weeks ahead and will have the entire officer team selected by the time the merger closes, if not sooner. Looking ahead, I am confident that the new American will continue to provide great leadership opportunities for managers from both companies. In the meantime, please keep up the great work in support of our customers.

I am excited about today’s announcement but even more excited about the years ahead and the opportunity to work with all of you. In fact, I can’t wait to get started. Thank you so much for your support and your commitment to the new American Airlines – we will be one team soon.

Doug

 

American-US Airways name new board of directors

The combined American-US Airways named their new board of directors on Monday, bringing on three existing US Airways directors and two American directors.

The new board also consists of five independent directors. The merger of the two carriers is expected to close in September.

Alberto Ibarguen and Ray Robinson were selected from American's current board while Matthew Hart, Richard Kraemer, Denise O'Leary were picked from US Airways existing board.

The independent directors named to the board include John Cahill, executive chairman of Kraft Foods, James Albaugh, senior advisor to Blackstone Group and a former Boeing executive, Jeffrey Benjamin, a senior adviser to Cyrus Capital Partners, Michael Embler, chief investment officer of Franklin Mutual Advisers, and Richard Schifter, a partner at Fort Worth's TPG Capital.

American's creditors committee and an ad hoc committee of creditors were involved in the process of selecting the five new independent board members.

As previously announced, American chief executive Tom Horton will become non-executive chairman of the board while US Airways chief executive Doug Parker, who will lead the new American, will also have a seat on the board.

-Andrea Ahles

American-US Airways announce new management team, includes 5 US Airways execs and 3 American execs

American Airlines and US Airways announced their new executive team on Monday morning, naming five US Airways executives and three American executives to lead the combined carrier.

"This announcement is another step forward in creating the new American Airlines and opening a new chapter for its more than 100,000 team members," said US Airways chief executive Doug Parker, who was previously announced as the new CEO of the combined carrier. American chief executive Tom Horton will become non-executive chairman of the board, which was stated when the merger was announced in February.

The new executive team includes:

-Scott Kirby,45, as president. He is currently US Airways president.

-Elise Eberwein, 48, will be executive vice president of people and communications. She is US Airways' EVP of people, communications and public affairs.

-Beverly Goulet, 58, will take on the role of chief integration officer. She is currently American Airlines' treasurer.

-Robert Isom, 49, will become chief operating officer. He currently holds the position at US Airways.

-Stephen Johnson, 56, will be executive vice president of corporate affairs, a position he currently has at US Airways.

-Derek Kerr, 48, was named chief financial officer. He is currently the CFO at US Airways.

-Maya Leibman, 47, as chief information officer. She is currently CIO at American.

-William Ris, 65, will be senior vice president of government affairs, a position he has at American.

"As we bring the restructuring to a close, the new American is strong, renewed and positioned for a successful merger," Horton said in a statement on Monday.

American Eagle chief executive Dan Garton plans to step down from leading the regional carrier owned by AMR Corp. later this year. Parker said he will name a replacement for Garton at that time.

Not included in the executive team are several American executives including chief financial officer Bella Goren, general counsel Gary Kennedy, senior vice president of people Denise Lynn, senior vice president of operations Jim Ream, senior vice president of customer service Jon Snook and chief commercial officer Virasb Vahidi.

-Andrea Ahles

Union rejects Bell contract

FORT WORTH Hundreds of members of Auto Union Workers Local 218 on Sunday overwhelmingly rejected a three-year contract proposal by Bell Helicopter.

An estimated 2,500 union members spent three hours reviewing a 90-plus page contract that would offer up a cumulative wage increase of 9.1 percent. On average, the contract would provide an average $15,682 in increased compensation to each employee over the life of the contract.

But a number of the company’s proposals were almost instantly rejected as members walked out of the meeting in red T-shirts that said, “It’s your job. Protect it.”

“We’re not ready to make concessions,’’ Local 218 President Steve Andrews said.

The contract was rejected by 85 percent of voting members, according to a 3:30 p.m. posting on the union website. Union officials will now decide whether to declare a strike. Another alternative is for both parties to continue discussions at the bargaining table.

Strikers may be seen picketing as early as tomorrow, union leaders said.

Union leaders had recommended that employees reject the contract because it proposes the elimination of job classifications, which could lead to hundreds of layoffs. Union officials also balked at cuts in the company’s defined benefit plan and employee benefits.

One proposal could trigger hundreds of layoffs in upcoming months, union leaders said. The company wants to combine a number of jobs and eliminate others. For example, it is proposing to eliminate sandblasters in order to allow all certified employees to perform those duties. Those employees who may be affected include wrappers, packers, dispatchers, material inventory clerks, saw operators and others.

In 2009, the company eliminated janitorial positions and contracted with an outside company, one union member said.

The company is also proposing to end Bell’s defined benefit plan for new employees. Those employees hired after June 10 would have to depend on a defined contribution or 401-style pension plan.

Union members have been meeting with the company since April 18 to negotiate a contract. The membership’s current four-year agreement expires Sunday at midnight.

Bell Helicopter spokesman Bill Schroeder also did not return a request for comment on Sunday.

Hourly workers last declared a strike in 2009, when Bell offered a proposal to boost healthcare costs by raising weekly employee premiums and doubling many deductibles.

Wendell Helms, service representative for the union, said as many to 200 to 400 jobs could be terminated under the proposal. But nobody knows for sure, he said.

If the contract is rejected, Helm said before the vote count, “our hope is that the company will go back to the bargaining table.”

Before the vote, dozens of members streamed in to the hall of the Will Rogers Memorial Coliseum. Some were pleased that the company had placed the contract on its website prior to the Sunday meeting. They said it allowed them plenty of time to review it before casting a vote.

But others said the company had violated the terms of the negotiations by making it public prior to the meeting.

Yamil Berard

AMR says passenger traffic rose slightly, up 0.8 percent in May

AMR Corp. said its consolidated passenger traffic rose slightly, up 0.8 percent for May as it kept capacity relatively flat.

Its consolidated load factor was a record 84.0 percent, up 0.4 percentage points compared to May 2012.

The parent company of American Airlines said its unit revenues dropped 1.8 percent compared to the same month last year.

International passenger traffic grew 5.2 percent as it increased capacity by 4.5 percent. The load factor on international flights was 82.6 percent, up 0.6 percentage points.

Domestic traffic dropped 2.1 percent as capacity was cut 2.9 percent. The domestic load factor of 86.1 percent was 0.7 percentage points higher than May 2012.

-Andrea Ahles

 

Aug. 15 hearing set for AMR's reorganization confirmation

American Airlines' creditors could begin voting this month on the company's turnaround plan and proposed merger with US Airways, The Associated Press reported. A federal bankruptcy judge in New York gave American's parent company, AMR Corp., approval Friday to send solicitation material to creditors by June 20.

They'll have until July 29 to vote.

If creditors go along, the judge could confirm the reorganization plan at a hearing scheduled for Aug. 15, clearing the way for AMR to combine with US Airways and emerge from Chapter 11 protection.

AMR CEO Tom Horton said his company was “in the home stretch of our restructuring.”

The merger is still being reviewed by antitrust regulators at the Department of Justice. Based on current figures, American would become the biggest airline in the world, surpassing United Airlines in passenger miles.

Judge sets August 15 date for AMR bankruptcy confirmation hearing

U.S. bankruptcy judge Sean Lane has set an August 15 date for AMR Corp.'s confirmation hearing.

At the hearing, the court will consider confirming the plan if enough creditors have voted in favor of the plan that will allow AMR to exit bankruptcy.

American Airlines' parent company is now allowed to begin soliciting votes for its reorganization plan which includes merging with US Airways. The Fort Worth-based carrier will send out voting packages by June 20.

The voting deadline is July 29, the court order filed on Friday said.

"This is a significant step forward in our efforts to complete the most successful restructuring in aviation history," said AMR chief executive Tom Horton. "The proposed merger is expected to maximize recoveries for all of the company's economic stakeholders."

The judge approved AMR's disclosure statement at a court hearing earlier this week but did not rule on Horton's executive compensation package of $20 million. 

US Airways chief executive Doug Parker, who will be chief executive of the newly merged carrier, has not yet announced the new executive team for American-US Airways, although an announcement could come early next week.

-Andrea Ahles

Lakota supporters rally to restore funding

Hundreds of supporters of the Army’s UH-72 Lakota helicopter rallied Friday at the helicopter’s manufacturing plant in Grand Prairie to urge Congress to restore its funding.

Under the Pentagon’s proposed cuts to defense spending, funding for the Lakota will be terminated by the end of 2014, said Bob Cox, spokesman for American Eurocopter, EADS North America, which produces the helicopter.

The cuts could endanger hundreds of jobs of employees at American Eurocopter, EADS North America, including 600 employees who work at the local American Eurocopter facility. The facility is the engineering site for Lakota modifications and upgrades.

Two North Texas lawmakers joined about 900 supporters in the rally in support of the Lakota, Cox said.

“The Lakota program has proved to be consistent and effective,” said U.S. Rep. Joe Barton, R-Ennis.

U.S. Rep. Marc Veasey, D-Fort Worth, said the Lakota program was “critically important” to the country’s national security.

“These cuts are hurtful and damaging – they hurt families who rely on these jobs and DFW businesses that work with the program,’’ Veasey said.

The Lakota is used for missions, including border security, search and rescue, medical evacuation, transport and pilot training.

The cuts would mean that 31 fewer aircraft than the Army planned to buy would be built. So far, 267 Lakota helicopters have been delivered to the military.

Yamil Berard

United Auto Workers Local 218 to vote on Bell contract

FORT WORTH — Members of United Auto Workers Local 218 are expected to converge Sunday at the Will Rogers Memorial Coliseum to vote on a contract offer by Bell Helicopter.

Union members have been meeting with the company since April 18 to negotiate a contract. The membership’s current four-year agreement expires Sunday at midnight, and workers could go on strike. Union members could ratify the contract agreement or declare strike, according to the union website.

The new contract would affect about 2,500 hourly employees at Bell.

Local 218 President Steve Andrews, who has been part of the negotiating committee, did not return phone calls seeking comment.

Bell Helicopter spokesman Bill Schroeder also did not return a request for comment.

Hourly workers last declared a strike in 2009, when Bell offered a proposal to boost healthcare costs by raising weekly employee premiums and doubling many deductibles. During that strike, workers represented by UAW Local 317, which represents a smaller work group of office workers, stayed out for two weeks before ratifying a new contract, while members of Local 218, which represents production workers, held out for six weeks.

That strike was the company’s first since 1987.

It’s unclear what issues are being discussed at the negotiating table. But it’s evident that tensions could flare up as money gets tighter in an industry that largely depends on big defense contracts.

Last year, thousands of aerospace workers at Lockheed Martin Aeronautics on the city’s west side walked the picket line for months over changes in employee benefits. The company has also had more than 300 layoffs in the last year, and offered an employee retirement program.

In recent months, Bell has also been working to reduce its workforce with about 140 layoffs and an early retirement program. Beginning in March, CEO John Garrison has issued memos in which he alerts employees of reductions in orders for the V-22 Osprey tilt-rotor aircraft that will affect operations in Fort Worth and Amarillo this year.

Also in March, the company announced an early retirement program for employees 55 and older, similar to a package offered last year.

Over several years, Bell and partner Boeing have been in production of the V-22 Osprey. Under Bell’s current contract with the government, which ends in 2015, the company is producing about 30 Ospreys a year.

It has delivered about 230 of the tilt-rotor aircraft to the military, including the Marines and Air Force. A second, multiyear contract calls for the production of about 20 tilt-rotor aircraft a year, according to Richard Aboulafia, an aerospace industry analyst in Washington, D.C.

The V-22, which takes off like a helicopter and flies like an airplane, is also part of a weapon package being offered to Israel. If the deal is completed, it would would mark the first foreign sale of the aircraft.

Yamil Berard

 

Read more here: http://www.star-telegram.com/2013/06/07/4917395/bell-workers-may-go-

on-strike.html#storylink=cpy

Only Fort Worth FAA functions being consolidated into new office building

The Federal Aviation Administration wants to clarify a comment from the real estate developer that will build the agency’s new regional office in north Fort Worth.

The Star-Telegram reported Wednesday that a joint venture between Trammell Crow Co. and USAA Real Estate Co. will build the FAA center on a 45-acre site in north Fort Worth. Construction of the six-story, 357,214-square-foot building will begin in September and be completed in October 2015.

The developer said the FAA was consolidating nine regional centers into three super-regional centers, including this new Fort Worth office, and that is not the case.

Previously, some functions from the nine centers were consolidated into three regions. The operations at those centers remain unchanged with the construction of the new Fort Worth office.

In that consolidation, some air traffic control functions were moved to Fort Worth, making it one of the FAA’s larger regional centers. The FAA has said the number of employees in Fort Worth has doubled since 2006, when it reorganized and moved its air traffic management services for the 17-state region here.

About 1,600 FAA employees located in different offices in Fort Worth will move to the new building.

_ Sandra Baker

Need a nap between flights? Minute Suites opens at DFW

Minute Suites opened its first private suite center at Dallas/Fort Worth Airport on Wednesday.

The facility, located in Terminal D near gate D23, has nine individual sleep suites and two showers.

"We are always looking for new ways to enhance our world-renowned customer service here at DFW, and Minute Suites certainly does that by offering a great way to refresh or get some serious work done during a layover," said DFW Airport chief executive Jeff Fegan.

Each suite includes a daybed sofa, a high-definition television and Internet access. Suites can be rented for $34 for a one-hour minimum stay and then $8.50 for every 15 minutes after the one-hour minimum. It will cost travelers $125 to rent a suite overnight.

Atlanta and Philadelphia airports also have Minute Suites. The company plans to open a second location at DFW in the next phase of renovations at Terminal A.

-Andrea Ahles

Judge approves AMR's disclosure statement

U.S. bankruptcy judge Sean Lane approved AMR Corp.'s disclosure statement which outlines the Fort Worth-based carrier's restructuring plan.

The parent company of American Airlines plans to merge with US Airways as it emerges from bankruptcy. With the approval of the disclosure statement, AMR will meet with creditors who will vote on the reorganization plan later this summer.

"We’re pleased the Court has approved the Disclosure Statement, allowing us to move forward with our restructuring and our planned merger with US Airways," said American spokesman Mike Trevino. "Our Plan of Reorganization will maximize recoveries for all of our economic stakeholders and provide the foundation for a stronger future for our people and our customers."

-Andrea Ahles

American announces $119.7 million private offering

American Airlines announced a $119.7 million private offering of "pass through certificates" on Thursday.

The "Class C" certificates will be secured by eight Boeing 737-800s, one Boeing 777-200 and two Boeing 777-300 aircraft that American currently owns. It will also be secured by two new Boeing 777-300 planes American is scheduled to receive this summer.

The certificates will rank below the Class A and Class B certificates that American issued for $663 million in March.

-Andrea Ahles

AMFA says NMB denied its efforts to be placed on American mechanics' union representation ballots

The Aircraft Mechanics Fraternal Association said federal labor regulators have denied its request to be a part of a union representation election of American Airlines' mechanics.

On Tuesday, the International Brotherhood of Teamsters filed for a representation election with the National Mediation Board. AMFA then asked the NMB to "obtain intervenor status" in the election.

Currently, American's 11,000 mechanics and related employees are represented by the Transport Workers Union. The Teamsters and AMFA have both undertaken campaigns to get the mechanics to switch unions as the Fort Worth-based carrier prepares to merge with US Airways. Mechanics at US Airways are currently represented by the International Association of Machinists.

AMFA says that the NMB applied a technical rule that required the union to present additional authorization cards from mechanics on the same day that the Teamsters filed of the election and American produced an eligibility list to the NMB.

The union's national director, Louie Key, said he was disappointed with the NMB's ruling.

"We were approached some time ago by mechanics at American Airlines who were unhappy with their current representation, and concerned about what representation would be like should the Teamsters be successful in their drive," Key said.

The NMB, which oversees union representation elections, will review the Teamsters' application to see if the union collected authorization cards from over 50 percent of the mechanics and related employees at American. If it is determined that the Teamsters met the requirement, a representation election would be held later this year.

-Andrea Ahles

AMR posts $105 million loss in April

American Airlines' parent company, AMR Corp., reported a $105 million loss in April.

The financial disclosure was part of AMR's monthly operating report filed with the bankruptcy court on Wednesday.

"I’m pleased to report that, excluding reorganization and special items, we posted a very strong improvement to our bottom line," said AMR chief executive Tom Horton in a letter sent to employees on Wednesday morning. "And if current trends continue, we are well on our way to a strongly profitable second quarter."

Excluding $119 million in reorganization fees and other accounting items, the Fort Worth-based carrier would have posted a monthly net profit of $14 million.

The company said it spent $52 million on aircraft financing renegotiations and rejections and $11million on professional fees during the month. It also spent $3 million on "other" reorganization items which are not detailed in the report.

AMR also said that its mainline carrier, American Airlines, had passenger revenues of $1.5 billion with its regional affiliates, including American Eagle, bringing in $233 million in revenues. Total revenues for the month were $1.99 billion.

The company ended the month with $657 million in cash and $3.7 billion in short-term investments for a total of about $4.4 billion on hand. That number does not include $852 million in restricted cash.

-Andrea Ahles

Teamsters file for representation election of American mechanics

The International Brotherhood of Teamsters have filed with the National Mediation Board for a representation election of American Airlines mechanics.

American has over 11,000 mechanics and related positions who are currently represented by the Transport Workers Union. The Teamsters have been campaigning to oust the TWU from American.

"After enduring 20 years of concessions, outsourced jobs, bankruptcy, frozen pensions and an overall lack of respect, we are coming together to bring in the bargaining power of the Teamsters Union, which has the strongest record representing mechanics in our industry," said Bill Wheeler, an American mechanic.

The Teamsters made a similar filing to represent US Airways 3,200 mechanics earlier this month. US Airways mechanics are currently represented by the International Association Machinists.

US Airways and American Airlines are seeking government approval to merge the two carriers as American emerges from bankruptcy.

The National Mediation Board, which oversees union representation elections, will review the Teamsters' application to see if the union collected authorization cards from over 50 percent of the mechanics and related employees at American. If it is determined that the Teamsters met the requirement, a representation election would be held later this year.

TWU International Air Transport Director Garry Drummond criticized the Teamsters' move, saying the Teamsters have allowed airlines to outsource mechanic jobs to China.

"Changing unions is particularly risky while all the critical issues connected with establishing one agreement with uniform rates of pay and working conditions still must be negotiated as part of the American-US Airways merger," Drummond said. "Many mechanics signed cards calling for an election between unions because they believe in democracy, ironically a vote for the Teamsters means that democracy would be suspended."

The Aircraft Mechanics Fraternal Association is also courting American mechanics but has yet to file for a union representation vote with federal mediators.

American Airlines spokesman Paul Flaningan said its workers have the right to choose which union represents them.

"We hope our mechanics will examine the options and take the time to vote on the path they believe is best for them, their families, and the company," Flaningan said.

-Andrea Ahles

On Memorial Day

It's a day to remember those who have fallen in service to our country.

A couple of a years ago I visited the USS Arizona Memorial in Hawaii. Every day, thousands of visitors view the wreckage of the USS Arizona which became the final resting place for many of the 1,177 crewman who lost their lives on December 7, 1941.

 

-Andrea Ahles

 

Job Fair on Wednesday in Fort Worth

 FORT WORTH – Job seekers are invited to a May 22 job fair for the aerospace industry.

The fair, beginning at noon on Wednesday at the Hilton Garden Inn Fort Worth Alliance Airport, will be an opportunity for job seekers to learn more about AAR, a global aerospace and defense contractor. The company has 200 immediate openings across the country and will be recruiting prospective applicants at the fair, officials said.

AAR hopes to start conversations with skilled aircraft maintenance technicians.

Job fair participants, especially those affected by recent workforce reductions in the area, can also take advantage of some critical career guidance and industry search tips.

 AAR’s maintenance facilities are located in Duluth, Minnesota; Indianapolis; Miami; Oklahoma City and Hot Springs, Arkansas. If you cannot attend the fair, you may fax your resume to 405-218-3611.

The company employs more than 6,000 people in 17 countries.

More information can be found at www.aarcorp.com.

Yamil Berard

 

 

A little break

Sky Talk will be on a short break this week as I am on a scheduled furlough from the Star-Telegram.

If you have any aviation news that you would like to share with the Star-Telegram while I am out this week, please contact business editor Steve Kaskovich at skaskovich@star-telegram.com

-Andrea Ahles

KLM restarts daily service between DFW and Amsterdam

Dallas/Fort Worth Airport welcomed back KLM on Friday as the Dutch carrier restarted its seasonal daily service to Amsterdam.

Flight 669 arrived at 1:37 p.m. to a traditional "shower of affection" from DFW's fire engines on the tarmac. The Airbus 330 has two classes of service.

"DFW was the top service for customers worldwide for KLM," said Jacques Malot, vice president of airport customer service in the U.S. for Air France/KLM. "Everything was telling us we had to return."

Over 85 percent of the customers on KLM flights connect through Amsterdam on to other destinations in Europe, Malot said. The service is expected to last through October.

Last year, KLM's service had load factors in the high 80s and low 90s, he added.

"We expect the same load factor or even more. The first flight was oversold and is arriving almost full," Malot said.

Eventually, DFW hopes KLM will keep its service year-round, said Luis Perez, vice president of air service development at DFW Airport.

"Of course, it's all based on economic factors here as well as Europe but they seem pleased with the results," Perez said.

 

-Andrea Ahles

With AMR's stock up, executives sell some shares

Since AMR's merger with US Airways was announced, the Fort Worth-based carrier's shares have soared over 400 percent to $6.85.

Now, a few executives are selling shares, that were likely worthless when the company entered bankruptcy, and generating some cash.

According to documents filed with the Securities and Exchange Commission, three AMR executives acquired stock options and then sold some of their existing shares over the past week.

-chief financial officer Bella Goren acquired 13,007 shares of common stock at $6.13 on May 15 and then sold 33,979 shares on May 15 and 16 at prices ranging between $6.33 and $6.88, for a total sale price of $222,028.22. It is unclear how much Goren profited from the transactions since the filing did not say how much she might have paid for some of the shares she had previously acquired.

-executive vice president Dan Garton, who also runs American Eagle, acquired 19,514 shares of common stock at $5.83 on May 14 and then on the next two days sold those shares for $120,168.03 at prices ranging from $5.91 to $6.82. His profit from the transactions was $6,401.41.

-AMR's general counsel Gary Kennedy acquired 11,112 shares on May 14 at $5.83 and then sold those shares for $68,419.39 over the next two days at prices ranging from $5.91 to $6.82. His profit from the transactions was $3,636.43.

AMR plans to complete its merger with US Airways some time in the fall, pending government regulators and US Airways shareholder approval.

-Andrea Ahles

American and US Airways want authorization for more stock as part of its merger

American Airlines' parent company, AMR Corp., and US Airways want authorization for more shares of stock than it had originally proposed as part of its merger agreement.

In documents filed with the Securities and Exchange Commission on Thursday, the carriers said it wants authorization for an additional 100 million shares of preferred stock than before.

The amendment to the merger proposal now calls for authorization of 1.75 billion shares of common stock and 200 million shares of preferred stock.

-Andrea Ahles

 

Only one personal carry-on item? American will let you board early

American Airlines announced a new boarding process that allows passengers with only one small personal carry-on item to board before those that have larger roller bags that need to go in overhead bins.

The Fort Worth-based carrier said it will let customers who have one personal item that can be stowed underneath the seat in front of them to board before Group 2. American said the new process speeds up the boarding time allowing the plane to depart the gate on-time.

American said it tested the process in Austin, Baltimore, Denver, Fort Lauderdale, Kansas City, Minneapolis and Washington D.C.'s Dulles airport earlier this year.

"Our tests indicate that this new boarding process will improve our dependability and on-time performance, while being eaiser and more enjoyable for our customers," said American's vice president of customer planning Carol Wright.

American said customers who want to board before Group 2 but have a larger carry-on bag can check the carry-on bag at the gate at no charge. The carrier's Group 1 includes premium frequent flyer passengers and first class travelers.

-Andrea Ahles

Southwest increases quarterly dividend, restructures contract with Boeing

At its annual shareholder meeting on Wednesday, Southwest Airlines announced it has increased its quarterly dividend to 4 cents per share, up from a penny.

The board of directors increased the carrier's share repurchase authorization from $1 billion to $1.5 billion. Since Southwest began buying back its stock in 2011 the company has repurchased $725 million in shares, reducing its outstanding shares by 10 percent, said Southwest chief executive Gary Kelly.

Southwest also announced it is restructuring its aircraft purchase contract with Boeing, deferring several options until after 2019 when it can get the Boeing 737MAX-7 aircraft.

The Dallas-based carrier has converted five Boeing 737-700 firm order into 737-800s, exercised five options for 737-800s and relinquished five purchase options in 2014. It has also relinquished five purchase options in 2015.

Southwest has agreed to buy ten pre-owned Boeing 737-700s for delivery in 2014 and 2015 and has deferred 41 737 next-generation aircraft options from 2014 to 2018 and converted them into 737MAX options to beyond 2024. An additional 20 Boeing 737 next-generation firm orders in 2017 and 2018 were converted into 737MAX firm orders in 2019 through 2021.

Kelly said the changes will save the carrier more than $500 million in capital spending for firm orders over the next five years and has pushed $2 billion in optional aircraft spending beyond 2017.

"We believe we have ample opportunities to maintain our fleet and also to grow our in service fleet in 2015 and beyond should the right opportunities arise," Kelly said.

-Andrea Ahles

TWU, IAM agree to jointly represent mechanics and ground workers at merged American/US Airways company

The Transport Workers Union and International Association of Machinists announced on Tuesday that the two unions have agreed to jointly represent mechanics and ground workers at the new carrier once American Airlines and US Airways merge later this year.

The unions said the partnership will represent about 30,000 employees and will be called the TWU/IAM Employee Association. After the merger between American and US Airways closes, the unions said they will ask government regulators to hold a union representation election among the affected work groups.

Currently, TWU represents mechanics, store clerks and fleet services workers at American while IAM represents the same work groups at US Airways.

"This agreement allows us to use our combined strength and resources on behalf of all our members as we move forward at the new American Airlines," said TWU International president Jim Little.

Under the agreement reached this week, the unions designated which one will conduct post-merger business in a specific city. For example, in Dallas/Fort Worth where the TWU currently has more members than the IAM, the TWU will keep its union facilities in place and work with employees. In Charlotte, the IAM will do the same.

"These agreements protect our members' representation, pensions and seniority," said IAM International president Tom Buffenbarger. "Working jointly with the TWU, we will ensure both unions' members are rewarded in this merger."

The partnership does not cover aircraft dispatchers, flight crew training instructors or flight simulator engineers as the TWU represents those work groups at both carriers. It also does not include the maintenance instructors at US Airways which are represented by the IAM.

Recently, the Teamsters filed for a union representation election of US Airways' mechanics and has said it plans to file a similar application for American's mechanics as well.

-Andrea Ahles

Lockheed & Bell announce jet fighter/marketing leadership

A pair of longtime Lockheed Martin employees have been named to head up one of the company’s leading jet fighter programs, the company announced Monday.

Nineteen-year Lockheed veteran Roderick “Rod” McLean was named vice president and general manager of the F-16/F-22 Integrated Fighter Group (IFG). Michael Cawood was named vice president and deputy for IFG.

Both appointments are effective immediately, officials said.

Orlando Carvalho, executive vice president of Lockheed Martin Aeronautics, said that McLean is ready for his new responsibility.

“Rod’s most recent special assignment as vice president and program manager for the next-generation trainer (T-X) program, combined with his past experience as vice president and deputy for IFG, perfectly prepares him to lead the IFG team into the future,” Carvalho said in a prepared statement.

McLean previously served as F-16 deputy vice president and F-16 program director for various countries in the Middle East, North Africa, and Southeast Asia.

Cawood most recently served as vice president of F-16/F-22 IFG Product Development.

In other industry news, Bell Helicopter said that Anthony Moreland is returning to lead sales and marketing activities as managing director, North America. Moreland most recently led North America and global accounts for Sikorsky Aircraft.

Yamil Berard

Monday Midday Must-Reads

-Even though Virgin America has yet to post an annual profit, the carrier is thinking about a public offering in late 2014, early 2015, chief executive David Cush told the Associated Press. The carrier narrowed its fourth quarter loss to $25 million.

-The Federal Aviation Administration has reconsidered its decision to shut down 149 air traffic control towers as part of its budget sequester cuts. Republicans had argued the closures were not necessary since legislation was passed last month allowing the FAA to move funds from other areas of its budget, The Hill reported.

-Belting Whitney Houston songs on a flight is apparently not acceptable. An American Airlines flight from Los Angeles to New York made an emergency landing in Kansas City on Friday after an unruly passenger refused to stop singing Whitney's tunes. Here's the full report with a video from KCTV5.com.

-Andrea Ahles

American reopens job posting for flight attendant positions

Flight attendants wanted.

American Airlines re-opened its flight attendant job posting on Friday as it expects to add 1,500 new flight attendants this year.

The carrier had previously accepted flight attendant applications in November and over 20,000 job applicants submitted their resume in less than a week.

"Our focus remains on finding great people that can deliver the level of service our customers expect of the new American," the carrier said in a memo to employees on Friday.

It is also looking for flight attendants that speak Italian, German, Portuguese, Korean, Japanese, Mandarin Chinese, Finnish, Spanish and French.

-Andrea Ahles

Judge officially approves American-US Airways merger

The signed court document from U.S. bankruptcy judge Sean Lane that approves the American Airlines-US Airways merger was filed on Friday.

The court order finalizes Lane's ruling at a March 27 hearing to approve the merger agreement with the exception of American chief executive Tom Horton's $20 million pay package.

"Notwithstanding anything to the contrary in this Order, for the reasons stated by the Court in the Decision, the American CEO Letter Agreement is not approved; however, this Order is without prejudice to the consideration and approval of the American CEO Letter Agreement or any of the other matters provided for therein at a later date, subject to the rights of all parties in interest to object thereto," the document said.

The merger still needs to be approved by government regulators and US Airways shareholders. The carriers expect to close the deal sometime this fall.

-Andrea Ahles

American/US Airways integration team says it could take more than 18 months after merger close to get single-operating certificate

It's going to take a long time to integrate American Airlines and US Airways, executives at the two airlines told employees in a merger update.

In a letter sent to workers on Friday, US Airways chief operating officer Robert Isom and American treasurer Bev Goulet said it will likely take at least 18 months after the merger closes for the new company to receive its single-operating certificate from government regulators. 

They reiterated the merger is expected to close in the third quarter and that a new executive team will be named in late May, early June.

"Consider the numbers: Our integration will include more than 110,000 people serving 187 million customers a year flying to and from 336 destinations on more than 1,500 planes. Boil that down, and we will need to align thousands of systems, applications, procedures and policies as we implement the merger. And we want to get every one of them right," the pair wrote.

Keep reading for the full letter from Goulet and Isom.

-Andrea Ahles

 

May 10, 2013  

Fellow Employees:

We’re pleased to report the latest on our progress in planning the integration of American Airlines and US Airways. Ours is a big, complex task guided by a team of committed professionals from both airlines who have joined forces to create not just the biggest, but the best airline in the world.

Consider the numbers: Our integration will include more than 110,000 people serving 187 million customers a year flying to and from 336 destinations on more than 1,500 planes. Boil that down, and we will need to align thousands of systems, applications, procedures and policies as we implement the merger. And we want to get every one of them right.

The Integration Management Office (IMO) – the “nerve center” of our integration effort – has been firing on all cylinders since we last provided an update. As we have previously shared, there are 29 teams planning the integration of our commercial, customer-facing, operations, and corporate and staff functions for our two airlines. We’ve also created several cross-functional taskforces that will work on specific objectives. One, for example, is preparing a joint crisis response plan, while another is already focusing on obtaining a single operating certificate for the combined carrier.

This week several teams – those who have tasks that must be accomplished leading up to legal close or that otherwise will enable us to capture and deliver value to customers and employees – gathered in Dallas/Fort Worth to discuss and align objectives, set milestones, and properly sequence activities. Ultimately, we are working to create an airline that keeps our current customers happy, brings in new customers, provides a great place to work, and achieves the financial value that will make it all possible.

We know this planning process raises many more questions than answers at this time. How long will this take? What changes might affect you and when? As a guideline, we are planning toward a third-quarter transaction close. Between now and then, the leadership team for the new company will be named; this week Tom Horton and Doug Parker shared that they expect to name the senior team around the end of May or early June. And, once the merger closes, you will start to see things change as we begin to implement our integration plans. 

Following close, we anticipate it could take at least 18 months before we operate as a single carrier. In the interim, we’ll begin to extend to customers some of the benefits they’ll see from the merger, including the ability to combine flights on a single itinerary and earn and redeem frequent flyer miles across airlines. We are committed to educating our employees on those changes so that you can provide the best service to our customers. Only later in the process will we combine, for example, reservations systems and combine our operations control centers.

Our goal is to make these transitions as smooth as possible at every phase. Please watch for regular updates from us as the work of the IMO continues, and we encourage you to read each weekly edition of our joint merger newsletter Arrivals, which you can find on Jetnet or Wings, to learn more about what’s happening across both airlines.

While our integration planning teams continue their work, the biggest priority for all of our employees is to stay focused on running both airlines safely while maintaining a reliable and convenient experience for our customers.

We have a great deal of work ahead as we plan to put the new American back on top. With the best people in the industry alongside us, we know we will succeed. A big thanks to all of you for your hard work and commitment to our customers as our busy summer travel season approaches.

Sincerely, 

  Robert Isom                                  Bev Goulet

 

American agrees to pay $24.9 million to settle FAA safety claims

American Airlines has agreed to pay the Federal Aviation Administration $24.9 million to settle $162 million in safety claims made by the agency.

According to bankruptcy documents filed on Thursday, American agrees to also perform additional training of its maintenance personnel and increase its oversight of third-party maintenance providers.

"This settlement recognizes the many changes, including enhancements to our maintenance and engineering processes, increased training, inspections, and audits that have taken place at American over the past several years that address past FAA concerns," said American spokeswoman Andrea Huguely. "The safety of our people and our customers always has been – and always will be – our top priority."

After American's parent company, AMR Corp., entered bankruptcy, the FAA filed several claims with the bankruptcy court to potentially fine AMR up to $162 million as part of ongoing safety investigations.

One of the claims relates to American's MD-80 fleet which the FAA grounded in 2008 after finding improper wiring around the landing gear of the aircraft. About 3,000 flights were canceled as a result during one week in April 2008. In 2010, the FAA proposed a $24.2 million fine against American.

An FAA spokesman said the agency agreed to reduce the claim amount in the settlement because American had made several safety and compliance improvements that have an estimated value over $50 million.

American did not admit to any wrongdoing as part of the settlement, court documents said.

The settlement with the FAA requires bankruptcy court approval. A hearing is tentatively set for May 30 with objections to the settlement due to the court on May 23.

-Andrea Ahles

 

 

Bankruptcy court approves $3.25 billion in financing for AMR

AMR Corp. received a bankruptcy judge's approval to borrow up to $3.25 billion as it prepares to exit bankruptcy protection.

The Fort Worth-based carrier had asked for the financing to reorganize and repay debt. The loans, approved by U.S. bankruptcy judge Sean Lane at a hearing on Thursday, will be backed by airport gates, take-off and landing slots and routes between the U.S. and South American, according to court documents.

AMR, the parent company of American Airlines, is set to merge with US Airways later this year upon emerging from bankruptcy. The merger still needs to be approved by government anti-trust regulators and US Airways shareholders.

-Andrea Ahles

American launches DFW-Seoul service

On Thursday, American Airlines initiated its daily nonstop service between Dallas/Fort Worth Airport and Seoul's Incheon airport.

The flight is the second non-stop daily flight to Korea out of DFW. Korean Airlines, which has been flying the DFW-Seoul route for years, recently increased its service from five times a week to daily.

"At DFW, it is our mission to deliver a world class travel experience for visitors to Dallas/Fort Worth as well as to expand our region's presence and visibility around the globe," DFW Airport chief executive Jeff Fegan said in a statement.

American will use a Boeing 777-200 aircraft with three classes of service on the route. The flight leaves DFW at 10:20 a.m., arriving in Seoul at 2:50 p.m. the next day. The return flight leaves Seoul at 4:50 p.m., landing at DFW at 4:05 p.m. on the same day, local time.

-Andrea Ahles

American inks new distribution deal with Amadeus

American Airlines announced it has a new distribution deal with Amadeus, a global distribution system.

Under the agreement, travel agencies that use Amadeus will be able to continue booking tickets on American through the Amadeus system. The two companies will also work on a new technology connections that will allow travel agents to book ancillary items such as Main Cabin Extra, an additional fee that gives passengers more legroom and can board the flight in the first group.

"Amadeus has shown an ability to adapt its technology to our business needs and we appreciate this spirit of partnership," said American's vice president of global sales Derek DeCross.

American has been trying to lower the booking fees it pays global distribution systems like Amadeus and Sabre. The carrier has also been working on technology for travel agents to directly connect to its reservation system, bypassing the GDSes.

-Andrea Ahles

AMR says passenger traffic dropped 1.1 percent in April

AMR Corp. said its consolidated passenger traffic declined 1.1 percent in April as the Fort Worth-based carrier increased capacity by 0.4 percent.

Its load factor dropped 1.3 percentage points to 81.6 percent. AMR said its unit revenues also decreased 2.9 percent when compared to April 2012.

Domestic traffic was 1.4 percent lower as capacity declined 1.5 percent, the parent company of American Airlines said. International traffic decreased 0.6 percent as capacity on international routes rose 3.4 percent.

-Andrea Ahles

 

DFW Airport executive honored by the White House as a "Transportation Champion of Change"

Dallas/Fort Worth Airport's executive vice president of operations, Jim Crites, has been honored by the White House as a "Transportation Champion of Change."

Crites is at the White House today and is being honored for overseeing DFW Airport's test and implementation of next-generation technology for the Federal Aviation Administration, including an airport surface detection system that helps air traffic controllers detect runway conflicts. He was nominated by the FAA for the honor.

"The mission to improve aviation safety and efficiency that is at the heart of NextGen does not succeed without a great deal of collaboration across the aviation sector, and our nation is already benefiting from the work we’re all doing together to improve our air traffic control systems," Crites said in a statement adding he was humbled by the White House distinction.

Crites will participate in a ceremony and panel discussion with 11 other honorees in Washington D.C.

-Andrea Ahles

Teamsters file for representation election of US Airways mechanics

The Teamsters filed with the National Mediation Board for a representation election of US Airways mechanics on Tuesday.

Currently, US Airways' 3,200 mechanics are represented by the International Association of Machinists. The union has been in contract talks with the Tempe-based carrier since July 2011 with no new contract in place.

"Because of the Teamsters’ solid, documented track record of excellent representation, the Teamsters Union is the best and most logical choice to represent us for the future as professionals in the airline industry," US Airways mechanic Jim Blanton said in a statement.

The Teamsters said they also plan to file for a representation election for American Airlines mechanics as well. American's 11,000 mechanics and related positions are currently represented by the Transport Workers Union.

The National Mediation Board, which oversees union representation elections, will review the Teamsters' application to see if the union collected authorization cards from over 50 percent of the mechanics and related employees at US Airways. If it is determined that the Teamsters met the requirement, a representation election would be held later this year.

-Andrea Ahles

 

US Airways looking to refinance $1.6 billion in debt, Bloomberg says

US Airways is looking to refinance $1.6 billion of its debt as it prepares to merge with American Airlines, according to a Bloomberg News report.

The article, which cites a source with knowledge of the deal, says Citigroup, Barclays, Morgan Stanley and Goldman Sachs are arranging the debt deal.

"The $1 billion loan will pay interest at 3.5 percentage points to 3.75 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark, the person said. US Airways may sell the debt to investors at 99 cents on the dollar.

"The $600 million piece will pay interest at 2.75 percentage points to 3 percentage points more than Libor, with a 1 percent floor, and may be sold at a discount of 99.5 cents on the dollar," the article says.

Click here to read the report.

-Andrea Ahles

 

Southwest wins DOT approval for slots at Reagan National

Southwest Airlines received approval from the Department of Transportation to operate new service between Washington's Reagan National airport and Houston's Hobby airport.

The slot exemptions became available when Spirit Airlines stopped using its slots for flights between Reagan National and Fort Lauderdale.

"Southwest's service will provide air travelers with a new, low-cost option when they fly between Reagan National and Houston," said Transportation Secretary Ray LaHood in a statement.

Southwest beat out US Airways and JetBlue Airways who had also applied for permission to use the slots. US Airways had proposed service to Oklahoma City while JetBlue wanted to start service to Jacksonville, Fla.

Southwest will have to begin its new service to Houston by August 5, according to the DOT ruling.

-Andrea Ahles