Week In Review News Items
Labor Developments
In a special hotline message sent out Thursday afternoon to American Airlines flight attendants, APFA president Laura Glading said it is unlikely that federal mediators will release the union from contract talks with the Fort Worth-based carrier…United Continental Holdings said that United Airlines’ technicians, represented by the IBT, have reached a tentative labor contract…and the union representing ground staff at Qantas has called for a “labour movement” to protect secure employment. The TWU has said that thousands of Qantas’ ground operations employees have indicated that job security is a key concern.
Legislative, Safety & Regulatory
The FAA on Thursday suspended the air traffic controller who was on duty when two passenger jets landed at Ronald Reagan Washington National Airport without clearance or guidance from the tower…firefighters extinguished a fire early Thursday that broke out in an area where fuel is kept at the Miami International Airport. The fire was reported around 11 p.m. Wednesday and was brought under control around 1 a.m.
A United Airlines plane with 112 people aboard was allowed to take off last May without repairs despite indications during two previous flights that the cockpit window was overheating, a condition long known to cause fires, according to evidence gathered by federal investigators…kudos to the U.S. Travel Association and its Blue Ribbon Panel for Aviation Security for stating the obvious in a polite and responsible way: The U.S. government can and should do a better job when it comes to passenger and baggage screening at U.S. airports.
Airline Industry Finances & Structure
Major U.S. airlines announced further 2011 capacity reductions on Tuesday to cope with increasing fuel prices…already struggling with high fuel prices, the big U.S. airlines now face a drop in demand for flights to Japan, a lucrative route and gateway for travel to Asia. The airlines' response: They're raising fares and eliminating unprofitable flights. Delta said Tuesday it will reduce flying to Japan by up to 20 percent through May because of falling demand as the country recovers from the March 11 earthquake and tsunami.
US Airways President Scott Kirby said the outlook for a merger remains positive, but suggested a time frame of five to seven years. He also said that if a merger requires a move out of the Star Alliance, where US Airways partners with United, Lufthansa and other global carriers, the cost to switch alliances would be "south of $100 million."
Miscellaneous
The aviation industry is inherently exposed to numerous external influences, such as fuel costs, the economy, exchange rate fluctuations, natural disasters and political instability, as recent world events highlight. Fraud is another external challenge facing the aviation industry, with major cost implications – although this can at least to some degree be controlled and monitored by aviation companies…in a clear sign that growth and change can be positive and problematic, Southwest Airlines grapples with its changed business model. As Southwest continues to grow and revise its business model, there is increasing evidence that the airline is beginning to manifest many of the problems that afflict its legacy peers.