AIRline News

According to an early-June Associated Press report, Mesaba Airlines’ pilots are suing the company for violations of the Railway Labor Act, which governs collective bargaining in the airline industry. Mesaba Pilots have been working under a seven-year concessionary contract signed in 1996. The Air Line Pilots Association’s (ALPA’s) federal court lawsuit accuses the Minneapolis-based commuter affiliate of Northwest Airlines of engaging in practices over two years of negotiations designed to undermine and draw out the bargaining process.
The union claims Mesaba has failed to respond to ALPA proposals or offer timely proposals of its own, has taken erratic and inconsistent bargaining positions, and has offered substandard and regressive bargaining proposals. ALPA also alleges the airline has tried to subvert its representational rights by calling on individual pilots to meet with managers to discuss contract negotiations.
In a prepared statement June 3, Mesaba denied the allegations. “We have conducted good faith negotiations at every step of the process against the backdrop of the most difficult period in the industry’s history. Our negotiations have been lengthy and complex, as is generally the case in our industry, and both sides have represented themselves vigorously.” Mesaba is one of the largest regional carriers in the United States, serving 106 cities as a Northwest Airlink partner.

Frontier Airlines announced June 10 an agreement with GE Capital Aviation Services (GECAS) to lease two additional Airbus 318 aircraft, scheduled for May 2004 and March 2005 delivery. The carrier is also leasing one additional Airbus 319 for delivery in February 2005. Including the new lease orders, Frontier will operate 35 Airbus aircraft by the end March 2005.
The airline said it has secured financing for its first four purchased A318s via an European lender. The airline plans to take delivery of four A318s during the fiscal year ending in March 2004 and a fifth A318 in April 2004.
“It is an honor to be the launch customer of the new Airbus A318 aircraft. When we first selected the Airbus A320 family as our aircraft of choice, we were impressed with the operational synergies of the A319 and A318 aircraft. From flight operations to maintenance, we believe incorporating the world’s first A318 aircraft into our fleet will be seamless, and will provide the excellent air travel services our customers have come to expect from Frontier,” said Frontier President and CEO Jeff Potter.

JetBlue Airways Corporation stated June 10 it had placed an order for 100 Embraer 190 regional jets, with options for an additional 100 aircraft.
Embraer values the firm contract at $3 billion, with a potential value of $6 billion if all options are exercised.
JetBlue plans to take delivery of the first seven aircraft in 2005, with the remainder to be delivered through 2011 at a rate of about 18 per year. Options begin in 2011. Including the new Embraer order and the low-cost airline’s current fleet of 42 Airbus A320 aircraft plus orders and options for future Airbus deliveries, JetBlue said its fleet could grow to 290 aircraft by the end of 2011. Lease financing has been arranged for the first 30 ERJ190 aircraft.

Midwest Express Holdings, the parent of Midwest Airlines, said June 12 it hopes to restructure deals with workers, suppliers and lenders by mid-summer. Should the effort fail, the carrier said it may seek court protection from creditors.
Midwest Express, based in Milwaukee, said it its continuing talks with suppliers, airplane financiers and workers to cut costs and avoid joining other U.S. airlines in bankruptcy. A drop in travel following the Sept. 11, 2001, attacks has hit the airline industry.
“Significant progress has been made, but much more needs to be accomplished,” Chief Financial Officer Robert Bahlman said in a statement. “The full participation of our lenders and lessors, unions and employees is absolutely essential.”

Pilots at Delta Air Lines, represented by ALPA, said June 13 they would enter into talks over the carrier’s proposal to cut pilot pay, the Associated Press has reported.
In April, Delta proposed hourly wage cuts of 22 percent, cancellation of pay raises due in 2003 through 2004 totaling 4.5 percent and reduction of some benefits. The union has not stated what its bargaining strategy would be or its position on the wage concessions.
Also on June 13, ALPA announced it would file a grievance challenging the furlough of 50 additional pilots in June. The carrier said the furloughs were consistent with the force majeure clause in the pilot contract—a contention the union disputed.
“The grievance will assert that the continued furlough of these pilots is no longer justified by the effects of the war and other factors,” the union said in a statement to members.

The U.S. Senate on June 12 rejected by a margin of 52-44 an amendment to the FAA reauthorization bill which would have raised the mandatory retirement age for commercial pilots. Currently, the mandatory age is 60; had it passed, the amendment would have raised the age immediately to 63 and incrementally to 66. The amendment was opposed by ALPA.

Continental Airlines on June 10 said the company’s plan to reduce costs by $400 million this year and $500 million in 2004 is moving ahead better than planned, according to a Reuters report.
“The $400 million is completely in the budget for this year, and we’re exceeding that at this point,” Chief Financial Officer Jeff Misner said at an analyst conference in New York. “We’re well down the path of getting that additional $500 million.”
Misner said the airline is looking into ways other than labor concessions to trim expenses, such as reducing airport fees and increasing Internet ticket sales.

Boeing Company released its 2003 Current Market Outlook at the Paris Air Show June 16.
The airframer said it anticipates a $5.2 trillion market for new commercial airplanes and aviation services over the next 20 years.
Boeing estimates the world fleet will more than double to 34,000 jets by 2022, comprising approximately 18,400 airplanes for market growth; 5,900 for replacement, and the 9,700 currently in service. The mix of current and new aircraft accompanies a forecast of 5.1 percent per year growth rate in world air travel. Regional growth varies between 4 and 7.3 percent, with Latin America expected to be the fastest-growing region.
“The progression from a regulated to liberalized market has increased competition among airlines and is forcing them to operate at much higher levels of efficiency to remain profitable, said Randy Baseler, Boeing Commercial Airplanes’ vice president of marketing. “Passenger preference for more frequent, nonstop flights with shorter trip times will continue to drive market evolution and airline strategies. After all, air travel is all about passenger convenience and saving time.”
Boeing projects that airlines will invest $1.9 trillion in new commercial airplanes, which equates to 24,275 aircraft deliveries over the next 20 years. Of that total, 18 percent (or 4,300 deliveries) will be for smaller regional jets (below 90 seats); 56 percent (or 13,645 deliveries) will be for larger regional jets and single-aisle airplanes; 22 percent (or 5,440 deliveries) will be for intermediate-size aircraft and four percent (or about 890 deliveries) will be for 747 and larger size airplanes.

Emirates Airlines placed a $12.5 billion order for 41 airliners from Europe’s Airbus on June 16, Dow Jones News has reported.
The carrier also announced it signed a $6.8 billion lease order for 26 Boeing 777-300ER wide-bodied jets from General Electric Capital Aviation Services and International Lease Finance Corp. The Airbus order comprises two A340-500s, 18 A340-600s and 21 A380 superjumbo jets, as well as the leasing of four planes from International Lease Finance.
Deliveries begin at the end of 2004 and will continue through spring 2009.

Embraer announced June 16 the successful maiden flight of the ERJ-175, the second member of a family of four new-generation commercial jets designed for markets optimized for 70- to 110-seat equipment. The other members are the Embraer 170, -190 and -195.
The aircraft departed the company’s Sao Jose dos Campos facility June 14 for a 120 minute flight during which it performed a range of systems validation tests.

Skywest Airlines announced June 10 it has signed a memorandum of understanding with United Airlines expanding Skywest’s regional contract flying for United.
The 11-year agreement will also expand Skywest’s fleet to 140 aircraft. The deal must be approved by the board of directors at both carriers and by the bankruptcy court overseeing United’s reorganization.

Boeing announced June 12 that its new B-7E7, dubbed the “Dreamliner,” will largely be made of advanced composite materials—including the wings and fuselage.
According to the manufacturer, the main component will be graphite combined with a toughened epoxy resin. Also included in wing construction will be so-called TiGr composites, a combination of titanium and graphite. Aluminum will still likely be used in smaller structural units of the new aircraft.
“Composites offer us a variety of advantages including better durability, reduced maintenance requirements and increased potential for future developments,” said Mike Bair, senior vice president of the 7E7 program at Boeing.

The Military Airlift Command on June 18 formally discontinued the current phase of its Civil Reserve Air Fleet (CRAF) program; the Aviation Daily reported. CRAF was activated to facilitate use of commercial aircraft for support of the Iraq war. Since its inception Feb. 8, United Airlines operated 215 CRAF missions; American Airlines operated 169 CRAF flights. According to American, CRAF generated $67.5 million for the carrier. American plans to continue operating a reduced schedule of military charters beyond CRAF deactivation.

Southwest Airlines stated June 17 it will add performance-enhancing blended winglets to its current and future fleet of Boeing 737-700s.
According to the carrier, the winglets improve performance by extending the airplane’s range, saving fuel, lowering engine maintenance costs and reducing takeoff noise. The winglets are expected to save Southwest up to 92,000 gallons of fuel per aircraft per year.
“Southwest, the industry’s low-cost provider, is keen on finding innovative ways to keep our operating costs in check so we can continue to provide low fares to millions more Americans,” said Laura Wright, Southwest’s vice president of finance. “This technology is one way we can gain efficiencies in our operation and save money while we grow.”
Aviation Partners Boeing, a joint venture between Aviation Partners Inc. and Boeing, will provide 169 blended winglet shipsets to Southwest. The first installation for Southwest is expected to begin October 2003 with all 169 installations to be completed within two years. Southwest has options to acquire 373 additional Blended Winglets through 2012.

Northwest Airlines (NWA) was scheduled to take delivery of the first of 14 Airbus A330-300s July 7 at the Paris Air Show. The aircraft is expected to enter revenue service in September on transatlantic routes.
The carrier is expected to receive the remaining 13 A330-300s over the next five years. The new aircraft will eventually replace Northwest’s fleet of DC-10-30s. NWA also is expected to receive the first of 10 A330-200s in the summer of 2004.