Airline Division News Items
Republic To Move Frontier’s Teamster Mechanics from Denver to Milwaukee
Frontier's parent company, Republic Airways Holdings, announced Tuesday that about 200 mechanics now based in Denver and some of the 118 employees of the airline's reservation center in Las Cruces, N.M., will be moved to Milwaukee. Indianapolis-based Republic has been working to consolidate operations since acquiring Frontier on Oct. 1 and Milwaukee-based Midwest Airlines on July 31.
Republic will be eligible to receive up to $27 million in Milwaukee and Wisconsin tax credits through the end of 2021 based on its promise to keep more than 700 existing jobs and add 800 full-time positions – half of which will involve relocations of Midwest and Frontier workers.
Denver tried to keep the mechanics. Included in the joint Colorado-Denver package were cash incentives, job-training incentives, forgiveness of some of Frontier's property taxes owed to the city from the airline's bankruptcy, and offsets for Denver's 3.62 percent sales tax on parts brought in to repair aircraft.
Although the city wanted to keep the Frontier jobs, the mayor said "there would be bloodshed in the streets" if the city suffered more cuts while simultaneously offering tax incentives to a business.
Gov. Bill Ritter said in a release that the state and city offered a competitive package to keep as many jobs as possible. "While we respect Republic's business decision, it's still disappointing," Ritter said. "But we shouldn't lose sight of the fact that Frontier Airlines remains Colorado's homegrown, low-fare airline and is helping to keep our economy strong."
Matthew Fazakas, president of Teamsters Local 961, which represents about 275 mechanics, was angered by what he called a failure of Colorado and Denver leaders to step up.
Republic's Bedford said the moves, which will be completed by mid-2010, "will help us to further lower the costs of operating our branded business, better positioning us to compete over the long term."
Denver will remain the site of reservation, marketing, flight-crew and administrative jobs, said Republic spokesman Carlo Bertolini. "Denver will have the largest employment base of Republic Airways," Bertolini said. "Denver is a major hub of our network. By no means are we exiting Denver."
No deadline has been set for relocation decisions. Workers who decide to relocate will receive moving aid. Those who don't want to move may apply for open company positions or be eligible for severance.
DOT Forum Thursday Looks to 'Fix' Airline Industry
Transportation Secretary Ray LaHood held a closed-door meeting Thursday that he hopes will be the first step towards "fixing" the airline industry. The invitation to aviation stakeholders was not open to the public, or the press.
The Obama administration reached out to the nation's airlines and their unions and other industry groups for solutions on how to restore health to the ailing industry, which is losing billions of dollars, shedding jobs and blamed for using a business model critics say undermines safety.
"U.S. aviation is facing severe economic uncertainty, and an open and frank conversation will help begin a continuing dialogue about the industry's future," Transportation Department spokeswoman Sasha Johnson said. This was an initial meeting and the discussions were wide ranging but also general in nature. Secretary LaHood announced the formation of a Federal Advisory Committee on Aviation to develop a roadmap for the future of the industry. He asked participants for additional feedback about the composition and direction of the Advisory Committee, which will be formed in the weeks ahead. The IBT intends to be an active participant in this process.
Airlines are offering the fewest seats to passengers, measured by available seats and distance traveled, in more than a decade. They have shed more than 158,000 full-time jobs since employment peaked in 2001 and lost an estimated $33 billion over the past decade. Thirteen airlines have filed for bankruptcy in the past two years.
The deregulation of airlines in 1978 has helped lower air fares for consumers. But other trends have raised concerns about whether airlines are offsetting low fares at the expense of safety and service quality.
A report last year by a government watchdog said nine large U.S. airlines farm out 70 percent of major maintenance. Overseas repair shops handled one-quarter of the work, challenging the ability of U.S. inspectors to determine whether it is done properly, the report said.
United Promoting Employee Participation in Capt Jason Dahl Scholarship Fund
United just recently authorized employees to donate to The Capt Jason Dahl Scholarship through the United Charity Giving Program. The Captain Jason Dahl Scholarship Fund is a 501(c) 3 Non-Profit Corporation, FEIN # 68-0519470, established to provide scholarships for qualified students who wish to attend accredited commercial flight training schools in the United States. Captain Dahl himself received a $2,000 scholarship toward his flight school tuition at San Jose State University in California, after completing and winning an essay contest with the subject entitled, “Why I Want to Fly.”
As Captain of United Flight 93 on September 11, 2001, Jason was among the first to give his life in a vain attempt to protect the passengers and crew of his ship. We have no doubt Jason would willingly serve again, because he was that kind of pilot, father and man. The Captain Jason Dahl Scholarship Fund was established the day after the national tragedy, and grew to a respectable sum within the first few months, thanks to the outpouring of support from family, friends, and other generous Americans. Awards are granted from annual proceeds generated by the Fund.
The Fund’s six-person board, whose membership includes his widow, Sandra Dahl, and friends UAL Captain’s Dave Dosch, Tom Bush, Steve Jacques, and Denny Flanagan, determine the annual scholarship awards. Currently two $5,000 aviation scholarships are awarded annually. With your participation we will be able to increase the number of recipient’s nationwide. All United employees can now join in the fundraising effort during OPEN ENROLLMENT.
Atlas Air Worldwide Holdings (AAWW) Pilots Negotiations Continuing
Negotiations were held in Washington on November 3 thru 6., with the last day devoted to scope issues. Proposals and counter-proposals were exchanged on seven different sections. No TAs were achieved. The company did not have a formal response to the union’s scope proposal and they wanted to put off further discussion to the end of negotiations. However, the company had agreed to negotiate scope in parallel with other items and the union will insist that scope negotiations continue. The next bargaining session will be in Washington on November 23 thru 25, with scope discussions on the 23rd.
Week in Review News Items
Labor Developments
DOT Secretary LaHood called a closed-door meeting Thursday at the behest of airline unions that he hopes will be the first step towards "fixing" the airline industry. While the media was shut out of the meeting, the Business Travel Coalition (BTC) released prepared remarks from its presentation at the forum. "If cheap intercity mass air transportation was the only objective advocates of deregulation sought to achieve, then success has been realized," the organization said. "The American people deserve a little respect for their ability to handle the truth and make rational choices," BTC said. They called for a debate over air transportation public policy objectives, "even if it's 30-some years overdue."
Regulatory & Safety
Police arrested a United Airlines pilot Monday who flunked a breathalyzer test at London Heathrow minutes before his Boeing 767 jet was to take off for Chicago. His arrest is the latest in a recent spate of pilot mishaps that has some aviation observers questioning whether the physical stresses of flying, combined with personal financial pressures, are beginning to take a toll on the profession. Kevin Mitchell, chairman of the Business Travel Coalition, says the series of incidents involving pilots is not random. "We have begun a long slide in terms of professionalism in the industry," he said. "This industry and its workers have been pushed to the limits, and I think they are a little ragged at the edges. "You have an industry of professional pilots whose pay had been cut, their work hours extended and their pensions slashed in many cases," he said. "They are demoralized. They tell their kids not to come into the profession."
Airline Industry Finances & Structure
Japan Airlines said Friday it racked up a $1.5 billion loss and was seeking government help to fend off creditors as the beleaguered carrier struggles to recover from the travel industry's deepest slump in years. American and Delta each continue to express a strong interest in financially troubled Japan Airlines, which reportedly is negotiating a ¥100 billion ($1.1 billion) short-term bridge loan with the Development Bank of Japan to fortify its cash position as it develops a longer-term restructuring plan. British Airways and Spain's Iberia announced on Thursday a preliminary agreement for a $7 billion merger to create the world's third-largest airline by revenue. For months, the rumor has circulated that US Airways might merge with American. And low-cost airlines have grown rapidly in the past 10 years at the expense of United and other traditional mainline carriers.
Airline Ancillary Revenue
United, a leader in generating ancillary revenue is marshalling its resources to come up with even more fees and better ways to package and market them. Looking for new ancillary revenue streams is vital to the airline, CEO Glenn Tilton said. Two leading travel organisations have joined forces to try and build industry standards on "unbundling." The UK and Ireland Institute of Travel and Meetings and the Business Travel Coalition are setting up an international Industry Solutions Group. This will aim to "develop and build consensus around standards and policies for airline product unbundling.”
Miscellaneous
The American Civil Liberties Union has dropped its lawsuit against the TSA after it revised its policy on searching travelers, telling screeners they can only investigate transportation-related issues, barring them from seeking evidence of crimes unrelated to air safety?thirty-five senators have signed on to a letter calling for the passage of a long-term FAA funding bill before the end of the year?uplift sells better than unpleasant facts, which is why William Langewiesche’s new book, “Fly by Wire,” has been published with an upbeat subtitle: “The Geese, the Glide, the Miracle on the Hudson.”