Airline Division News Items
Republic Airways Holdings Wins Bid for Frontier in Bankruptcy Court Auction
In a surprise decision, the Frontier creditors decided to select Republic as the winning bidder in the bankruptcy auction process. The main reason seems to be that Southwest refused to remove from its bid a requirement that the pilot unions (SWAPA for Southwest and FAPA for Frontier) must agree on a method to integrate the seniority lists of the two groups for the purchase to go forward. The Southwest Airlines Pilots Association wanted to put Frontier pilots at the bottom of its seniority list, while Frontier pilots wanted to be dovetailed into the pecking order. They could not reach agreement by Wednesday night and Southwest did not seek an extension of time to bid from the bankruptcy court. Also Republic improved its initial $108.75 million offer, removing pre-closing conditions and agreeing to waive distributions on a $150 million claim, which is expected to result in a 94 percent increase in the distribution to Frontier's general unsecured creditors. Finally, Republic had received approval to purchase Frontier from the Antitrust Division of the Justice Department—something which Southwest had yet to obtain. Southwest Airlines, said its refusal to remove the labor condition from its proposal was key in the decision by Frontier's creditors that Southwest's $170 million bid was unacceptable.
Republic has said it intends to operate Frontier as a wholly owned subsidiary. "We keep our jobs and operate as a separate company," said Matthew Fazakas, president of Teamsters Local 961, which represents about 450 mechanics, freight drivers and other Frontier workers.
Amerijet Pilots to Meet Over the Weekend to Discuss Plans
On July 27 the National Mediation Board released the parties to a stalled contract negotiation between Amerijet International and its pilots to allow them to seek self help after a 30-day cooling off period. The cooling off period ends on August 27. Daisy Gonzalez, Business Representative at Local 769, has set up meetings with the pilots for August 15 and 16 to present an update on the 30-day cooling off period and to discuss strike planning.
Horizon Pilots Participate in FAA "Call to Action Initiative" On August 4, 2009, the FAA held a follow-on meeting in Seattle as part of their Call to Action initiative. The meeting included a discussion of issues related to pilot selection and hiring; management responsibilities for crew education and support; training standards and performance; professional standards and flight discipline; and mentoring. In attendance were Horizon pilots Trevor Bulger, Barry Maas, Mark Niles, Brock Bauder and Frank Brune, and Teamsters Local 747 Representative John Herron.
The meeting included a discussion of safety culture and what management can do to create a "just" safety culture. Included in that discussion was a review of ASAP (Aviation Safety Action Program), FOQA (Flight Operational Quality Assurance), LOSA (Line Operations Safety Audit), and AQP (Advanced Qualification Program) – the key point for these programs is that trend analysis and communicating the results of the analysis to crewmembers is key. Each program requires a collaborative effort between the stakeholders and requires commitment (buy-in) from everyone. Some are more expensive than others with ASAP being the least expensive to implement, but each strives to provide objective analysis for crewmembers.
There was also discussion about The Airline Safety and Pilot Training Improvement Act of 2009 (HR 3371) that focuses on fatigue and directs the FAA to update and implement new pilot flight and duty time rules and fatigue risk management plans within one year of passing.
Horizon Executive Council Chairman Trevor Bulger spoke often at the meeting on behalf of the pilots of Horizon Air. A panel member recognized the five Horizon pilots in attendance who presented a sharp professional appearance in their uniforms, and they received an impressive applause from the audience. They have since been invited to attend another Call to Action Meeting in Denver later this month.
Atlas Air World Wide Scope Subcommittee Met with Company
The parties met late Thursday morning August 6 when the Company presented its counter-proposal on Section 1. The Company has completely rejected the Union's May 13 Scope proposal. Instead, they proposed the existing Section 1 language from the current Atlas CBA that they altered to further diminish the job security of our Crewmembers. Consequently, the bargaining session lasted only two hours. The negotiating Committee is, "very disappointed with the Company's unacceptable position on Section 1".
Air Cargo World Highlight Teamster Views on Legislation
In an article titled "Teamsters Call House Bill Step in the Right Direction", Air Cargo World covered the Airline Division's Role in supporting new safety legislation. The Article said, "The International Brotherhood of Teamsters Airline Division gave a thumbs up to U.S. House of Representatives Aviation Subcommittee Chairman Jerry Costello's legislation to improve requirements for pilot hiring, training and duty time."
The Teamsters Airline Division, which represents 26 commercial cargo and passenger air carriers, worked with officials with the Coalition of Airline Pilots Association and the Air Line Pilots Association to help craft recommendations tied to the legislation, the Teamsters said in a statement this week.
"This solidarity of Union leadership is unprecedented," the Teamsters said in a statement. The House lawmaker's decision to seek the advice of aviation experts, including pilots, reflects his commitment "to the safety of the travelling public," Local 1224 President Joe Muckle said.
The Airline Safety and Pilot Training Improvement Act of 2009 would place more restrictive duty times on pilots in an attempt to reduce fatigue and proposes a number of safety and training initiatives. They include creation of an Air Carrier Safety and Pilot Training Task Force, heightened FAA regulations and increased pilot training based on aircraft type.
David Bourne, IBT Airline Division Director said, "We had a voice in the process and view the legislation as a move in the right direction for industry safety."
Week in Review News Items
Labor Developments
Frontier Airlines will keep its name and possibly more jobs after Republic Airways Holdings was named Thursday as the winner in a two-way competition to acquire the Denver-based carrier. Frontier employees were "very happy," said Frontier spokesman Steve Snyder. "We keep our jobs and operate as a separate company," said Matthew Fazakas, president of Teamsters Local 961, which represents about 450 mechanics, freight drivers and other Frontier workers. FAA and NATCA have concluded a challenging mediation process that has produced a landmark labor agreement. The International Association of Machinists and Aerospace Workers said on Thursday that it wants a union election at Delta Air Lines to resolve representation for 12,700 workers at the carrier and its Northwest subsidiary.
Regulatory & Safety
A half-dozen elected officials lined up along the Hudson River Monday and called for changes in how the airspace above the river is controlled in the aftermath of Saturday's fatal collision of a plane and helicopter. Roughly 15 years ago, the federal agency that investigates air disasters made a plea for more data on the air-tour industry, to improve safety for helicopter, airplane, balloon and airship flights around the nation. Six years later, it asked again. In 2007 NTSB told FAA that it wanted to require air-tour operators to track complaints about pilot performance.
Airline Industry Finances
Asked last month how long American Airlines Inc. and other carriers can keep losing money before they run out of time and cash, AMR Corp. chairman Gerard Arpey had a short, glum answer. "Not forever." As the U.S. airline industry piles up quarter after quarter of huge losses, it's a question that investors and analysts have been pondering as well. The flow of red ink is draining the financial liquidity from a number of U.S.airlines, weakening their balance sheets. The Association of European Airlines (AEA) labeled recent declines in passenger volumes as "heavily negative". The association's airline members reported overall volumes down 6.5% in June year-on-year. "The June figures, while evidently not as extreme as the minus 8.3% recorded in May, remained heavily negative," the AEA said. This is the time of year when many travel companies, particularly airlines, generate their peak revenue. They make hay. But not this year. It's a scary time for cash-starved travel firms, but it might not be as scary as what happens next. What happens next is winter.
Miscellaneous
Talk about timing. Just as Congress is considering legislation that would force the airlines to deal better with passengers on airplanes that sit idle on tarmacs for hours, an aircraft operated under Continental Airlines — full of distressed passengers — sat parked all night on an airport apron in Rochester, Minn?The U.S. Congress will scrutinize more closely an application by British Airways PLC, AMR Corp.'s American Airlines and Spain's Iberia Lineas Aereas de Espana to get anti-trust immunity that will allow the three carriers to work more closely together, a person familiar with the matter said?JetBlue Airways is offering a $599 one-month pass for unlimited travel in a bid to get more passengers airborne and jump-start a sluggish summer for the airline industry.