Company Watch
FBI investigates cause of punctures found in US Airways jets
The FBI is assessing whether punctures found in three US Airways planes were caused deliberately or by regular wear and tear. US Airways employees first discovered the holes during routine maintenance checks; an airline spokesman said the holes never posed a threat to safety. The Charlotte Observer (N.C.) (free registration) (10/20), The Washington Post (free registration) (10/21), USA TODAY/Associated Press (10/21)
American reports Q3 loss of $214 million, plans to cut capacity, jobs
American Airlines posted a third-quarter loss of $214 million, compared with net income of $1 million a year ago. American said increased competition from discount airlines, low fares and the high price of jet fuel contributed to its loss. The airline said it plans to cut capacity by 5% and eliminate an undisclosed number of jobs. The Dallas Morning News (free registration) (10/20), USA TODAY (10/20), The Wall Street Journal (subscription required) (10/21)
American to add seats back to coach section:
Faced with slipping revenue, American Airlines will add seats back into the coach section. Several years ago, American had pulled seats out of coach in an effort to create more legroom for passengers. The airline now says the more spacious cabin causes it to lose revenue. USA TODAY/Agence France-Presse (10/20)
Northwest loses $46 million in third quarter on high fuel prices
Soaring jet fuel prices caused Northwest Airlines to post a loss of $46 million in the third quarter. A year ago, Northwest reported a profit of $42 million. Compared to some of its competitors, Northwest's loss was relatively small, but CEO Doug Steenland said the airline will not be able to tolerate fuel prices at $50 a barrel for a long period of time. Star Tribune (Minneapolis-St. Paul) (free registration) (10/21), St. Paul Pioneer Press (Minn.) (free registration) (10/21), The Wall Street Journal (subscription required) (10/21)
SEC asks Northwest for pension information:
The Securities and Exchange Commission has asked Northwest Airlines to disclose its accounting practices for its pension plan. Northwest officials said the SEC's request is "informal" and that it is cooperating fully with the government. The company added that it has not been accused of any improprieties. Star Tribune (Minneapolis-St. Paul) (free registration) (10/21)
Delta, pilots plan weekend meetings; former workers sue carrier
Intent on reaching a contract agreement, Delta Air Lines and leaders from its pilots union will negotiate through the weekend. Delta hopes its the union will agree to concessions that would help the airline stave off a bankruptcy filing. Separately, three former Delta employees have sued the airline over losses related to Delta's stock price. The Wall Street Journal/Dow Jones (subscription required) (10/21), The Cincinnati Post (10/21)
US Airways pilots finish voting on contract proposal today
Officials for US Airways' pilots union expect a close vote on a proposal intended to save the troubled airline $1.8 billion over five years. Voting on the agreement ends today. If the pilots ratify the plan, they will take pay cuts of 18.25%. Pittsburgh Tribune-Review (10/20)
Fuel prices, low revenue leave ATA Airlines with little cash
Weak revenue and record jet fuel prices have left ATA Airlines with little cash, the airline said in a filing with the Securities and Exchange Commission. The airline's flight attendants recently took a 10% pay cut, but the airline said that will not be enough to help it conserve cash. The Washington Post/Associated Press (free registration) (10/20)
Delta TechOps Technical Training is the latest certificate holder under the Civil Aviation Safety Authority of Australia under CAR 30. TechOps Technical Training has also been certified under the European EASA 147 standards for 2 years, making Delta TechOps, the only organization in the world who can provide both the CASA and EASA certified training.
Inside Aviation
Upstart Primaris to order 40 Boeing jetliners
A report in the Wall Street Journal says upstart Primaris Airlines will announce that it will order 20 Boeing 7E7 Dreamliners and 20 737-800s. The order would make Primaris the first U.S. carrier to fly the 7E7. List prices value the order at $3.8 billion, with deliveries to start in 2007. A Boeing spokesman confirmed Primaris had ordered the planes. The Wall Street Journal (subscription required) (10/21)
Industry Trends
More airline employees line up fallback jobs
The possible implications of the legacy carriers' difficulties are not lost on their employees, many of whom are lining up second jobs in case the ax falls on them. Other workers are returning to school or starting their own businesses on the side to secure their futures in the face of possible job losses or furloughs. USA TODAY (10/21)