Delta Air Lines and US Airways Announce New Agreement to Transfer Flying Rights in LaGuardia Airport and Reagan National Airport

Delta Air Lines and US Airways today announced a new agreement to transfer takeoff and landing rights at New York’s LaGuardia and Washington D.C.’s Reagan National airports. The agreement, filed today with the Federal Aviation Administration (FAA), revises a 2009 transaction agreed between Delta and US Airways and approved by the DOT, but under terms not acceptable to the carriers, and never completed. The new agreement enables Delta and US Airways to expand service and increase competition at two of the nation’s key cities, and provides the opportunity for additional access to LaGuardia and Reagan National for new entrants and airlines with a limited presence at the airports.

Under the agreement, Delta would acquire 132 slot pairs at LaGuardia from US Airways and US Airways would acquire from Delta 42 slot pairs at Reagan National and the rights to operate additional daily service to Sao Paulo, Brazil in 2015, and Delta would pay US Airways $66.5 million in cash. In addition, the transaction could result in the divestiture of up to 16 slot pairs at LaGuardia and eight slot pairs at Reagan National to airlines with limited or no service at those airports. The completion of the transaction is subject to certain closing conditions, including government and regulatory approvals. A slot pair is the authority to operate one takeoff and one landing.

“With this agreement, Delta will enhance competition in New York, which is already one of the most competitive aviation markets in the world, by expanding the passenger capacity at LaGuardia by as many as 4 million seats annually without increasing congestion,” said Richard Anderson, Delta’s Chief Executive Officer. “Our expanded presence at LaGuardia will double our available destinations, offering customers more frequent and convenient service at New York’s preferred airport for business travel.”

US Airways’ Chairman and Chief Executive Officer Doug Parker said, “This agreement further strengthens our commitment to increase service and create more options for our customers wishing to travel to and from Washington, D.C. As a result of this transaction, many communities, including several smaller ones, will be able to enjoy additional nonstop service to our nation’s capital.”

The proposed transaction will provide significant direct benefits to consumers flying to and from New York and Washington, as well as consumers traveling to other destinations along the East Coast as the two airlines enhance their networks. These benefits are generated by improved connectivity, enhanced service and increased efficiency at both airports.

In addition, the competitive landscape in both cities has changed significantly since the transaction was first proposed in 2009. New entrants and smaller carriers, including AirTran Airways, JetBlue Airways and Southwest Airlines, have gained considerable access to slots at both LaGuardia and Reagan National and expanded service at these and other airports in the New York and Washington regions. Also, mergers between United Airlines and Continental Airlines and Southwest and AirTran have dramatically sharpened competition on the East Coast generally and particularly in the New York and Washington regions. Nonetheless, to address concerns previously raised by the Department of Transportation, the agreement provides for the divestiture of up to 16 slot pairs at LaGuardia and eight at Reagan National if required by the regulatory authorities.

The proposed transaction has generated significant support from elected officials and community leaders in New York and Washington. In addition, the City and State of New York, and both U.S. Senators from New York have supported the proposal, as have members of Congress representing New York, elected leaders in small communities and airports across the nation.

The airlines will dismiss their appeal of the DOT’s order regarding the original 2009 transaction that is currently pending in the U.S. Court of Appeals in Washington. Dismissing the appeal clears the way for DOT to consider the revised application.

New York

Delta’s expanded operation at LaGuardia will allow more and improved connecting service in New York, and ensure economically viable service to small communities, while creating an expanded network that will be particularly valuable for New York business customers. The airline will approximately double the number of nonstop destinations it serves from LaGuardia, including top business destinations and many cities not currently served nonstop by Delta or US Airways.

Delta will replace turboprop aircraft currently operated by US Airways with larger jets, adding as many as 4 million additional roundtrip seats available at LaGuardia without increasing congestion.

As part of the agreement, Delta will take control of US Airways’ Terminal C to create an expanded main terminal for customers. Delta will operate a total of 18 gates in Terminal C, and add one additional gate at Delta’s Terminal D, for a total of 29 gates in the two terminals. A 600-foot connector will be built to connect the two terminals. Delta also will convert the existing US Airways lounge in Terminal C to a Sky Club, while continuing to operate its current Sky Club in Terminal D.

Delta will continue to operate its popular hourly Delta Shuttle from its six gates at the Marine Air Terminal. In addition, Delta will spend up to $117 million to expand, renovate and consolidate terminals C and D over the next two years. Overall, the transaction will directly and indirectly generate an estimated 6,000 new jobs in New York.

Since making a strategic decision to build New York into a hub earlier this decade, Delta has made major investments across the region, boosting its economic impact to more than $13 billion annually. The airline is currently constructing a $1.2 billion project that will enhance and expand Terminal 4 at John F. Kennedy International Airport, creating a state-of-the-art facility for New York’s fastest growing global airline.

US Airways’ popular hourly Shuttle service between LaGuardia, Reagan National and Boston that is operated on dual-class mainline jets will remain unchanged as a result of the transaction. Also, US Airways will continue to offer its customers high-frequency schedules from LaGuardia to its Charlotte, N.C. and Philadelphia hubs and Pittsburgh with more than 60 daily weekday flights. All US Airways flights from LaGuardia will continue to arrive and depart from nine gates and parking positions in Terminal C and US Airways will build a new, state-of-the-art 5,000-square foot US Airways Club.

Washington, D.C.

At Reagan National, US Airways’ expanded operation will connect more small, medium and large communities with the nation’s capital and create additional flight options throughout the airline’s route network. US Airways expects to further increase its use of dual class mainline aircraft and soon to be dual class larger regional jets at Reagan National. The move will benefit customers by increasing the number of available seats between Washington and favorite destinations without increasing congestion.

US Airways plans to add at least 15 new destinations from Washington, to its network as a result of the transaction and competition will be further enhanced by US Airways adding service to popular destinations that are currently served by other carriers. As a result, business and leisure travelers as well as military and government employees will have more access to the nation’s capital and its downtown airport.

Following full implementation of the new schedule, US Airways will operate approximately 230 peak-day departures at Reagan National, a 20 percent increase over current service levels. The airline anticipates an increase of approximately 20 to 25 percent in passenger enplanements at Reagan National as a result of the new flights and schedule improvements. However, there will be no increase in congestion at the airport due to US Airways’ planned increase in scale and Delta’s reduction in slots.

The expansion is consistent with US Airways’ previously announced strategic plan to focus on growing its key, most profitable airports at its Washington focus city, its Phoenix, Philadelphia and Charlotte hubs and its US Airways Shuttle service. Once the transition is complete, more than 99 percent of US Airways capacity will be to or from its key airports.

Delta will continue to operate a robust schedule at Reagan National, with nonstop service between the airport and its seven domestic hubs and select cities. It also will continue to operate its Delta Shuttle between Reagan National and New York.

International Service

US Airways also will acquire from Delta in 2015 the rights to operate additional daily service at one of world’s most important business destinations – Sao Paulo, Brazil. As US Airways continues its strategic expansion into South America, the additional rights would allow it to operate two daily flights to Sao Paulo and continue its existing daily service to Rio de Janeiro, Brazil.

Since the 2009 transaction, Japan and the U.S. have made an Open Skies agreement that would enable US Airways’ service to Tokyo Narita International Airport. As a result, the transfer of slots at Narita from Delta to US Airways that was included in the 2009 transaction is not part of the new transaction.

Federal Investigators Taking Another Look Crash of UPS Airlines Flight

Federal investigators are taking another look at the crash of a UPS Airlines flight that went down while taking off from Dubai, United Arab Emirates last month, according to a report from MSNBC, which cited a report by its affiliate, NBC-TV.

The news comes a day after two bombs were found in cargo that originated in Yemen. One explosive device was found on a UPS Airlines plane in East Midlands, United Kingdom, and another was found on a FedEex flight at the Dubai airport.

Both packages were addressed to Jewish synagogues in Chicago, according to a White House press briefing.

Several news reports Saturday quoted officials saying the explosives were large enough to down the planes.

Late Friday, Louisville-based UPS Airlines, a division of Atlanta-based United Parcel Service, announced that it is suspending all operations from Yemen until further notice.

In a statement regarding the investigation, the company said it is cooperating with investigators and continuing to monitor “reports of potentially suspicious packages on board cargo flights.”

The NBC report quoted an unnamed U.S. official as saying, “People are obviously taking another hard look at why that plane went down, but no hard conclusions have been reached yet.”

As Business First previously reported, the Dubai crash on Sept. 3 involved a 747-400 that crashed while leaving the UAE for Germany. The crash killed Capt. Doug Lampe, 48, of Louisville, and First Officer Matthew Bell, 38, of Sanford, Fla.

No cause has been announced for the crash, which came about 45 minutes after the flight left Dubai International Airport and pilots reports smoke and fire in the cabin, according to a National Transportation and Safety Board report.

Karen Cole, a spokeswoman for UPS in Atlanta, told Business First that company officials do not believe the earlier crash is related to the events in Yemen, but she added that the investigation is ongoing.

Cole added that the decision to cancel package service from Yemen was a precaution as the company is on “high alert.”

She added that the company does not fly planes directly into the Yemen airport or have operations on the ground. Instead, it works with a third-party vendor for air and group operations in the country.

At this point, she said, the company cannot disclose when the package containing the explosive entered the UPS system.

UPS has kept all other facilities and flights operating as usual and returned to service three flights that were quarantined Friday.

“We really have had very minimal impact,” Cole said.

FAA Investigating Southwest Airlines Navigation System Failure as Landed at Los Angeles International Airport

The Federal Aviation Administration is investigating what caused a Southwest Airlines jetliner to lose its navigation system as it landed at Los Angeles International Airport last week, officials said Wednesday.

The pilot of Southwest Flight 1445, carrying 92 passengers from San Jose to LAX, found that some of his instruments had failed while on approach to LAX around noon on Oct. 20, said Brad Hawkins, a spokesman for Southwest Airlines.

The plane’s first officer took control of the Boeing 737 as the pilot radioed for assistance to the air traffic control tower, Hawkins said.

The cause of the navigation system’s failure remained under investigation, said FAA spokesman Lynn Lunsford.

Hawkins said mechanics found that a tripped circuit breaker was the cause of the problem. The plane’s instruments were operational after the breaker was restored to its position, he said.

Incoming flights were ordered to circle around as the plane was guided in with help from two veteran air traffic controllers, said Ron Geyer, head of the controller’s union that oversees Southern California’s air space.

American Airlines to Challenge Proposed Penalty by FAA

Federal officials have hit American Airlines with a record penalty of $24.2 million over maintenance lapses that caused thousands of canceled flights in 2008.

The Federal Aviation Administration said Thursday that American failed to take steps to prevent chafing of electrical wires in the wheel wells of its McDonnell Douglas MD-80-series jets.

The FAA says the wiring could have led to fires and fuel-tank explosions.

American vowed to challenge the proposed penalty. Airlines routinely challenge FAA penalties or negotiate to reduce them.

“These events happened more than two years ago, and we believe this action is unwarranted,” said American spokesman Tim Smith. “We are confident we have a strong case and the facts will bear this out.”

American officials have said the dispute is over a minor matter of leaving too much space between clips that held bundles of wire together. Smith said passenger safety was never threatened.

A large safety penalty would add to American’s financial and image problems. Parent AMR Corp. was the only major U.S. airline company to lose money in the second quarter, and it has lost more than $4 billion since the start of 2008 as it struggled against high fuel costs and a slump in travel.

American is also beset by labor issues, with unions representing mechanics and flight attendants talking about going on strike, and pilots openly criticizing the company.

The new penalty stems from early 2008, when FAA inspectors said they spotted problems with the wiring on two MD-80 planes. The FAA says American failed to correctly fix the problem, and inspectors found improper work on most of the planes they checked during follow-up visits to American maintenance facilities.

The airline ended up grounding its entire fleet of about 300 MD-80s and canceling thousands of flights in April 2008 while mechanics worked on the planes.
The FAA said Thursday that American operated 14,278 passenger flights on 286 planes that didn’t meet the wiring standards.

“We expect operators to perform inspections and conduct regular and required maintenance in order to prevent safety issues,” said Transportation Secretary Ray LaHood, whose department includes the FAA. “There can be no compromises when it comes to safety.”

American has since been retiring some of the gas-guzzling MD-80 planes and replacing them with more fuel-efficient ones. The FAA said safety officials had made progress working with American to improve the airline’s “maintenance culture.”

If upheld, the penalty against American would top the previous record of $9.5 million that the FAA levied against Eastern Airlines in 1987 for delaying required maintenance work. Eastern went out of business after paying only about $1 million.

As the FAA was focusing on American in 2008, it also proposed a $10.2 million penalty against Southwest Airlines Co. for operating about 1,400 flights before inspecting the planes for cracks. Southwest negotiated that down to $7.5 million.

The actions against American and Southwest came after whistle-blowers in the FAA and members of Congress criticized the agency for being too cozy with the airlines.

Federal Aviation Administration Close to Fine Against American Airlines

The U.S. government is close to proposing a substantial fine against American Airlines, a unit of AMR Corp, for alleged maintenance and inspection violations that led to the grounding of hundreds of planes and the cancellation of thousands of flights in 2008.

A source familiar with the matter said the decision by safety regulators was expected soon and the fine would likely be significant.

The Wall Street Journal reported on Thursday that the Federal Aviation Administration fine could reach $25 million.

The FAA said it would not comment on a pending enforcement investigation.

American said it was unaware of any possible fine.

“This is something that happened more than two years ago, and we haven’t received any notification by the FAA about any pending action, nor do we believe any action is warranted,” an American Airlines spokesman said in a statement.

Aviation industry and safety insiders have long expected the FAA to slap American with a penalty that would at least rival the record $10 million fine proposed against Southwest Airlines for alleged inspection shortcomings on certain Boeing 737s in 2006 and 2007. As part of a settlement, Southwest agreed to pay $7.5 million.

Airlines usually pay less than the government initially proposes.

The case against American stemmed from stepped up safety inspections of the carrier by the FAA, which at the time was under pressure from Congress to tighten oversight of the industry.

FAA inspectors said they found problems with wheel well wiring in MD-80 series planes, prompting the company to ground 300 of the workhorse jetliners and cancel flights affecting 300,000 passengers over several days in the spring of 2008.

American said it addressed the FAA’s concerns before putting planes back into service.

source : ABC News

American Airlines Fined $25 million by FAA as Aircraft Maintenance Errors

Wall Street Journal reported, the FAA gave a fine $ 25 million to American Airlines for aircraft maintenance errors that will be used to flight services. Aircraft maintenance errors made by American Airlines caused many flight cancellations in 2008.

The fine, which would be the largest levied against a U.S. airline, is being viewed as FAA’s demand for strict maintenance compliance by airlines. According to the Journal, FAA had an initial consideration of as much as $100 million in penalty, which was rejected by senior officials.

Citing people familiar with the matter, the Journal noted that American Airlines has not been officially informed about the case and an announcement is likely in the next few weeks.

In March 2008, Southwest Airlines Co.(LUV) was fined a $10.2 million by FAA for knowingly operating 46 Boeing 737s on 1,400 flights without performing mandatory structural inspections. The Airline negotiated and agreed to pay $7.5 million.

The airline was forced to temporarily ground its entire fleet of 300 McDonnell Douglas MD-80 jets for many days in 2008, due to an improperly fixed electrical wiring around landing gear of its plains. The Federal agency had noted that 280 of the jets were not in strict compliance. As per the law, FAA can consider a penalty of $25 thousand for each flight, the Journal said.

Further, the report noted that American Airlines would challenge the size of the penalty and negotiate for a settlement. A statement from the airline said that it “always maintained its aircraft to the highest standards.”

Alaska Airlines orders two Boeing Next-Generation 737-800s

Alaska Airlines on Thursday announced it will buy two additional Boeing Next-Generation 737-800s in a deal valued at approximately 3 million.

The order by Alaska Airlines was made in June but was not announced until Thursday. Previously, Boeing attributed the sale of two Next-Generation 737-800s to an unidentified customer.

“Alaska Airlines continues to execute a successful and strategic vision based on its expansive fleet of efficient and reliable Next-Generation 737s,” said Marlin Dailey, vice president of Sales for Boeing Commercial Airplanes. “Alaska celebrated its transition to a single fleet in 2008 and with these additional orders, is truly reaping the benefits represented by its slogan, ‘Proudly all-Boeing.’ Read more

Alaska Airlines Tests Flight Landing at Seatle-Tacoma International Airport

Alaska Airlines says it’s flown another test flight of landing procedures at Seattle-Tacoma International Airport that can save fuel, reduce noise and cut emissions by a third.

The procedures, already used in Alaska and at several Lower 48 airports, use satellite technology to guide a plane to a landing. That permits the aircraft to fly a shorter, more direct and slower approach.

Alaska Airlines is working with the Port of Seattle, Boeing and other airlines to get Federal Aviation Administration approval to use the techniques at Sea-Tac. If so, Alaska Airlines estimates that more than 2 million gallons of fuel could be saved each year. The project began last summer, and this week’s test involved a 737 jetliner making eight approaches to the airport.

FAA Awards 3 Nextgen Contracts Worth Up To $4.4B

FAA awards 3 NextGen air traffic control contracts worth up to $4.4 billion over 10 years

The Federal Aviation Administration said Wednesday it awarded three contracts for its new air traffic control system worth a total of up to $4.4 billion.

Under the contracts, Boeing Co., General Dynamics Corp. and ITT Corp. will perform large-scale demonstrations to see how procedures and technologies of the new system — called Next Generation Air Transportation System, or NextGen — can be incorporated into the current air traffic system.

The contracts will be carried out over a 10-year period.

NextGen, which features a satellite-based system to track planes, will replace the current radar-based air traffic control system, which relies on World War II-era technology.
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American Airlines Lobbied Congress to Delay Legislation Tarmac Regulation

American Airlines spent $1.58 million to lobby Congress and executive branch agencies in the fourth quarter on legislation to limit tarmac delays and other issues.

American weighed in on bills in the House and Senate that would require airlines to give passengers a chance to get off a plane if it’s stuck on the tarmac for at least three hours.

American Airlines spokeswoman Mary Frances Fagan said Monday the company would have preferred a 4-hour limit.

The Transportation Department beat Congress to the punch by announcing in December a new rule to take effect in late April that includes a 3-hour limit. The airline industry has argued that the rule will cause carriers to cancel more flights rather than risk fines of up to $27,500 per passenger.
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