Tag Archives: CO

UPDATE: Crew rest lawsuit

BusinessWeek magazine published a non-subscription article about the lawsuit brought by a group of airlines against the FAA last month.

The airlines say that the Federal Aviation Administration bypassed usual rule-making procedures and denied them the right to comment before it notified American Airlines and Continental Airlines Inc. of the new rules in late October.

The petition was filed Dec. 24 in the federal appellate court in Washington by American, Continental, UAL Corp.’s United Airlines, US Airways, JetBlue and two smaller carriers.

In their filing, the airlines said the new requirements would saddle them with “substantial burdens and costs.” They charged FAA did not show how the rules would improve safety.

It’s interesting that JetBlue joined the suit, given that it doesn’t currently serve destinations outside the Americas. US Airways is adding flights to Tel Aviv in 2009 and has said it wants to serve Asian destinations from Philadelphia in the future.

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AA, CO sue FAA over proposed crew rest rules

The Wall Street Journal reports (article is subscription only; brief summary here) that American Airlines and Continental Airlines have sued the FAA over a proposal that would raise the minimum rest time for flight deck crew on “ultra long-range flights.” Pilots who work these routes, defined as 16 hours or longer, must currently rest 24 hours between flights; the proposal would require 48 hours.

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Port Authority, Continental agree to test GBAS at EWR

The Port Authority of NY&NJ has signed an agreement with the FAA and Continental Airlines to launch a test of the Ground Based Augmentation System (GBAS) at Newark’s Liberty airport. In this press release, the Port Authority said EWR will be the nation’s first major commercial hub to install the technology, which allows for tighter spacing and precision approaches by providing supplemental, real-time aircraft position data to controllers.

Continental will pony up $1.1 million to equip 15 aircraft with GBAS gear, while the FAA will chip in $2.5 million. Honeywell will install the ground equipment.

In reporting the story, the north jersey Record newspaper put in a call to the Newark NATCA chapter rep, with the following result

Ray Adams, vice president of the Newark-based chapter of the National Air Traffic Controllers Association, welcomed the new technology as long as the GBAS is phased in and backed up by the radar system. He said space debris and other related issues could interfere with the satellite signal.

“It can be disrupted very easily,” he said. “If you lose the signal and you have 5,000 planes in the air, you’re in deep doody.”

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Earnings report: Q3 fuel costs hit airlines hard

Three of the nation’s largest air carriers reported stiff underlying quarterly losses on Thursday, with American Airlines parent AMR reaching profitability only through the sale of financial firm American Beacon Advisors. (Stories here and here.)

AMR said its third-quarter net profit amounted to $45 million, or 17 cents per share. [..]
Excluding the sale of American Beacon Advisors and other items, AMR said it lost $360 million, or $1.39 per share, compared with forecasts for a loss of $1.36 per share, according to Reuters Estimates. [..]
The company reported revenue of $6.4 billion, an 8 percent gain over the year-ago period.

Delta, which is buying Northwest Airlines Corp (NWA.N: Quote, Profile, Research, Stock Buzz) to form the world’s largest airline by traffic, reported a quarterly net loss of $50 million, or 13 cents per share. [..]
Delta increased operating revenue 9 percent to $5.7 billion, even though it reduced its flying capacity in the quarter, helped by strong trans-Atlantic business, higher fares and more fees. But the airline’s operating costs increased $814 million, or 17 percent, almost entirely due to higher fuel.

Continental Airlines Inc. said Thursday it swung to a $236 million loss in the third quarter from a year-ago profit as it battled high fuel costs and weather disruptions at its big Houston hub.
Revenue rose nearly 9 percent to $4.16 billion, beating analysts’ $4.11 billion forecast. [..]
Hurricane Ike, which shut down Houston airports for more than two days last month, cost the airline about $50 million in operating profit. And the carrier had to contend with a 68 percent spike in fuel costs to $1.5 billion during the quarter, as crude prices flirted with $150 a barrel mark in July.

All players emphasized continuing cuts in capacity. Meanwhile, it’s noteworthy that operating revenue is up 8 to 9 percent across the board — looks like those higher fares and fees are having an impact.

UPDATE:  Southwest also announced a loss for Q3, though in this case underlying operations had been profitable. In a bit of a twist, the hit came from a big *drop* in oil prices. Details from AP:


Southwest lost $120 million in the third quarter due to $247 million in charges, mostly due to writing down fuel-hedging contracts that are less valuable now that oil prices have plunged more than half since July.
Without the write-down and other charges, Southwest said it earned an operating profit of $69 million. [..] Revenue rose 11.7 percent to $2.89 billion, beating analysts’ forecast of $2.83 billion.
Southwest has been more successful than any other airline at hedging against high oil prices. It buys options to lock in fuel at set prices, a strategy that has saved it several billion dollars this decade.
But accounting rules require Southwest to constantly update the potential value of some of those contracts, and their value tumbled as oil prices fell.

Believe it or not, this was Southwest’s first quarterly loss in 17 years.

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