Sky Talk

Spirit Airlines offers $9 fares for its new service at D/FW

Spirit Airlines decided to throw its own royal wedding on Friday, marrying Dallas/Fort Worth Airport to "Kate Middleseat."

The mock wedding took place at Terminal E to celebrate the low-cost carrier's launch at D/FW. Nonstop twice-a-day service to Las Vegas and Fort Lauderdale begins on May 5.

"They bring a spirited sense of fun to the airport," said D/FW chief executive Jeff Fegan. "Low-cost carriers can grow and thrive at D/FW Airport."

Spirit announced that it will offer $9 fares on its routes for a limited time as part of the new service launch.

Check out the quick three-minute wedding in this video.

 

-Andrea Ahles

Former Miss USA says she was "physically violated" by TSA at D/FW airport

A former Miss USA says she felt violated following a TSA pat-down at Dallas/Fort Worth Airport last week.

Susie Castillo, who was returning from Rio De Janeiro, Brazil to Los Angeles, said she does not like the body scanners and opted out of the scan, which meant she had to undergo a pat-down.

"As a host and actress, my work requires me to travel often and I don't want to get molested (or irradiated by those body scanners) every time I have to fly," Castillo said.

She went on to say that the female TSA officer touched her "private area" four times. You can read her description of the incident on her blog.

The TSA told NBC News it has reviewed Castillo's complaint and "found that the officer followed proper procedures."

In a statement, Kristen Lee of the TSA's public affairs office said: "We welcome feedback and comments on the screening procedures from the traveling public as we are constantly evaluating and adapting our security measures, and are always seeking to strike the right balance between privacy and security while providing the security that the American people want and deserve."

Castillo also posted a video that her husband shot while she was at D/FW Airport, that shows her visibly upset by the incident and describes the TSA public comment card that a TSA supervisor gave her after the incident.

 

-Andrea Ahles

AirTran CEO Bob Fornaro to get $2.9 million after Southwest merger

AirTran Airways chief executive Bob Fornaro will get an estimated $2.9 million cash payout following his carrier's merger with Southwest Airlines.

According to AirTran's 10-K filing with the Securities and Exchange Commission on Thursday, top executives at AirTran will receive lump sum cash payouts that are equal to two times their base salaries.

Chief financial officer Arne Haak and executive vice president of operations Klaus Goersch will each receive cash payments of about $1.3 million.

Any outstanding restricted stock awards and performance shares held by the executives will also vest sooner than previously reported because of the merger. Fornaro's awards are assumed to have a value of $1.3 million, the annual report filing said.

Southwest said it expects to close its $1.4 billion purchase of AirTran on Monday.

-Andrea Ahles

Star-Telegram columnist says AMR execs are taking home less pay than reported

AMR executives are earning less money than proxy statements report, according to an analysis by Star-Telegram columnist Mitchell Schnurman.

In his business column in Thursday's Star-Telegram, Schnurman asserts that American executives, including the Fort Worth-based carrier's chief executive Gerard Arpey, are being paid less since the company's performance has been poor. Since 2001, the named executives have received less than 60 percent of their targeted.

"Over the past five years, however, Arpey's actual income turned out to be a little more than half the reported amount. How can this be?

"It's the difference between the compensation that's reported, or targeted, and the income that's realized. In proxy statements filed with the Securities and Exchange Commission, American reports base salary, bonuses and other compensation. But the biggest chunk of the package -- 85 percent, in Arpey's case -- is incentive pay whose value won't be clear for three years or longer.

"The payoff may be much higher than initially projected or much less. The value of those incentives is estimated on the date the shares are granted, under the assumption that parent company AMR will hit its financial targets.

"For the past decade, the airline has suffered billions in losses and a lagging stock price. So the incentives rarely paid off much."

Schnurman includes the following chart in his column, which shows in the past five years, only in 2007 did Arpey receive more than the reported amount in the proxy filing.

Pay	2010	2009	2008	2007	2006	Five year total
Stated	$5.23	$4.72	$5.12	$6.59	$5.44	$27.10
Actual	$1.09	$1.22	$2.61	$8.89	$1.10	$14.91

*The amounts are in millions of dollars.

-Andrea Ahles

 

 

Reports say India has dropped F-16, F/A-18 from fighter jet competition

UPDATE: Loren Thompson of the Lexington Institute think tank and a consultant to Lockheed Martin says he has been told by company officials that both the F/A-18 and F-16 have been dropped from consideration by India. 

And here's Lockheed's not very informative but perhaps telling statement: "The US Government has informed Lockheed Martin that they have received a letter from the Indian MOD concerning the MMRCA competition. We understand that the US Government is working on a response to the letter from the Indian government. Lockheed Martin remains committed to our relationship with the Indian Air Force, Ministry of Defense and the other Services.  Lockheed Martin has several world-class products offering the most advanced and reliable technology we believe is suitable for India's security needs."

Reports out of India today indicate that country's government has narrowed down the list of planes it is considering buying as the next next front line fighter jet and that both Lockheed Martin's F-16 and the Boeing F/A-18 Super Hornet have been eliminated from the competition.

If that is the case it could mean the days of the F-16 being produced in Fort Worth are nearing an end. Company officials said in their conference call Tuesday they only have orders booked to carry production through mid-2013.

The very good DewLine blog has more here. About the only thing official on the subject at this point is that Sweden's Saab has confirmed that it has been eliminated. But one blog reports it has confirmed that India has asked two bidders, France's Dassault and the European Eurofighter consortium to extend the terms of their bids.

Lockheed has not yet commented to the Star-Telegram. A Boeing spokesman said he had not heard anything official from his corporate ranks.

But Washington defense analyst Loren Thompson, who has many good sources in the world of defense contractors, said he has heard similar but unofficial reports.

"My understanding is the F-16 and F/A-18 have both been disqualified by India," Thompson said. "It may just be a negotiating tactic. They've (India) done stuff like this before."

India has for years been tantalizing fighter jet manufacturers with its plans to spend something on the order of $10 billion to buy 126 Medium Multi Role Combat Aircraft.

- Bob Cox

 

 

Boeing CEO says Southwest plane incident was a "workmanship issue"

On Boeing's earnings conference call Wednesday, the aircraft manufacturer's chief executive Jim McNerney was asked about the investigation of Southwest Flight 812.

The Boeing 737-300 had a hole rip open in its fuselage along the lap joints midflight on April 1.

Here's what McNerney had to say.

"I think we’re still sorting through it. There is not yet a final conclusion as you know...I think the initial data that I think we’re all seeing is suggesting a possible workmanship issue on an airplane rather than a design issue across a fleet of airplanes, in any case we want to get to the truth as quickly as possible and support the inspection and any rework that’s needed to make sure that the flying public is as safe as possible.

"I’m in a tough position here. I don’t want to make a conclusive statement because we’re not done with the investigation but I would say the initial data points more in that direction," McNerney said.

On Monday, federal investigators said they were examining irregularities in the rivets and rivet holes of the Boeing 737-300 involved in the incident and that the problems may have occured during the production of the aircraft.

-Andrea Ahles

S&P watching Southwest's credit profile

With federal regulators approving Southwest Airlines' purchase of AirTran Airways, the ratings agency Standard & Poor's said it is watching the carrier's debt level.

"Southwest's ratings remain on CreditWatch Negative due to the incremental debt it will assume, which we believe will weaken its financial profile - the strongest among U.S. rated airlines - as well as involve integration costs and operational risks," the ratings agency said on Wednesday.

As part of its purchase of AirTran, Southwest said it would assume the other carrier's $2 billion debt.

Southwest currently has a BBB rating while AirTran has a B- rating.

-Andrea Ahles

DOJ approves Southwest-AirTran deal

As Southwest Airlines executives telescoped on the carrier's first quarter earnings call last week, Southwest has received government approval for its purchase of AirTran Airways.

The Dallas-based airline announced that it had been notified by the Department of Justice that government regulators had concluded their review of the $1.4 billion transaction.

AirTran shareholders had already approved the deal on March 23. Southwest said it expects the transaction to close on May 2.

In a statement the DOJ said:

"After a thorough investigation, the division determined that the merger is not likely to substantially lessen competition.  The merged firm will be able to offer new service on routes that neither serves today, including new connecting service through Atlanta’s Hartfield Jackson International Airport from cities currently served by Southwest to cities currently served by AirTran.  The division said that the presence of low cost carriers like Southwest and AirTran has been shown to lower fares on routes previously served only by incumbent legacy carriers.  

"Although there are overlaps on certain nonstop routes, the division did not challenge the acquisition after considering the consumer benefits from the new service.  Also, the airports affected by the overlaps are not subject to restrictions on slots or gate availability.  Where such restrictions exist, entry by other airlines may be particularly difficult."

-Andrea Ahles

 

 

Southwest Airlines plane skids off Chicago Midway runway into mud

No one was injured when a Southwest Airlines plane skidded off a runway at Chicago's Midway Airport on Tuesday afternoon and ended up in the mud.

According to the Chicago Tribune, Southwest Flight 1919 from Denver was carrying 144 crew and passengers.

"The incident happened at about 1:35 p.m., said Fire Department spokesman Quention Curtis. Passengers remained on the Boeing 737 while buses were dispatched to bring them to the terminal, according to fire communications.

"The plane landed on runway 13 Center and slid off the left edge near the end of the runway, according to the Federal Aviation Administration.

"It came to rest on a grassy area near 63rd Street and Cicero Avenue about 150 feet from a wall separating the airport grounds from the street, with the nose pointed directly at a White Castle drive-through across Cicero, officials said.

The Dallas-based carrier issued a statement said there was heavy rain in the area at the time the aircraft landed.

"The passengers have been safely deplaned from the aircraft using air stairs and have been bused to the terminal," the carrier said. "Southwest will be working with passengers to get them to their final destinations."

Southwest said the aircraft involved in the incident is a Boeing 737-700.

The last time a Southwest Airlines aircraft slid off the runway at Midway was in December 2005 during a winter storm. A six-year-old boy was killed in the incident as the plane's nose crushed the vehicle he was in on the road by the runway.

UPDATE: Southwest has issued a second statement saying that the carrier is experiencing some delays at Chicago's Midway Airport as a result of the incident.

Passengers on Flight 1919 were also given a refund of their roundtrip and issued them two complimentary rountrip passes, the carrier said.

-Andrea Ahles

Earnings roundup: Fuel was high and fares were higher

With Delta Air Lines and US Airways both posting earnings on Tuesday, we now have a clearer picture of the first quarter for the airline industry.

Fuel was much higher for all of the carriers, but so were airfares. And in some cases, such as Southwest Airlines and Alaska Airlines, the carriers were able to post a quarterly profit.

Delta reported a $318 million loss for the quarter as revenues rose 13 percent to $7.5 billion. US Airways, which does not have a fuel hedging program, posted a $114 million loss for the quarter with revenues growing 11.7 percent to $2.96 billion.

Of the seven major U.S. carriers, American Airlines' parent company, AMR Corp., had the largest quarterly loss and the smallest increase in revenues. Alaska Airlines, which posted the largest profit for the quarter did not have an increase in its fuel bill because of gains in its fuel hedging program.

Airline	Q1 income	% change
	(millions)
Alaska Airlines	$74	1300%
American Airlines	-$436	-14%
Delta Air Lines	-$318	24%
JetBlue Airways	$3	N/A
Southwest Airlines	$5	-55%
United Airlines	-$213	16%
US Airways	-$114	153%

Airline	Q1 revenues	% change
	(millions)
Alaska Airlines	$965	16%
American Airlines	$5,530	9%
Delta Air Lines	$7,747	13%
JetBlue Airways	$1,012	16%
Southwest Airlines	$3,103	18%
United Airlines	$8,202	11%
US Airways	$2,961	12%

Airline	Q1 fuel bill	% change
	(millions)
Alaska Airlines	$195	-6%
American Airlines	$1,840	25%
Delta Air Lines	$2,166	29%
JetBlue Airways	$353	39%
Southwest Airlines	$1,038	26%
United Airlines	$2,672	28%
US Airways	$734	37%

-Andrea Ahles