Airline Industry

Several days a week, Brad Bartholomew climbs into the cockpit of a Southwest Airlines jetliner and begins his safety routine. He checks the instrument panel, radios the control tower, gets the latest update on the weather.And in perhaps the most important safety check of all, Bartholomew looks over at the co-pilot who will fly alongside him. That look -- a brief, imperfect observational moment -- along with whatever knowledge he may have of his colleague, is the best assurance he will get that the person flying next to him is fit enough to help carry scores of people through the skies.

MONTREAL -- Toronto businessman Gerald Schwartz and American Airlines parent AMR Corp. offered yesterday to invest C $1 billion (US$669 million) to take control of Air Canada and Canadian Airlines Corp., a proposal that would leave Canada's struggling airline industry with one major carrier.The Schwartz investment would come through Onex Corp., a publicly traded firm with stakes in airline caterer Sky Chefs and electronics maker Celestica Inc. Schwartz is president and chief executive officer of Onex.

US Airways became the latest airline to lower its estimated quarterly earnings yesterday, reacting to modest ticket sales that have prompted several major air carriers to scale back growth and reduce fares as much as 25 percent.In a letter to analysts and investors, the Arlington, Va.-based airline estimated second-quarter profit of $1.80 to $1.85 a share, down from an earlier estimate of $2.15 a share. It attributed the drop to "softer than anticipated" traffic in May and unexpected expenses.

FOR THOSE OF YOU planning to travel by air, here are some amazing statistics about the U.S. airline industry (motto: "We're Hoping To Have A Motto Announcement In About An Hour"). This year, U.S. airlines will carry a record 143 million passengers, who will be in the air for 382 million hours, during which they will be fed an estimated total of four peanuts.Yes, the airlines are cutting back on food service, as was dramatically demonstrated on a recent New-York-to-London flight wherein nine first-class passengers were eaten by raiders from coach.

WASHINGTON -- For the third year in a row, Southwest Airlines ranked No. 1 in the annual Airline Quality Rating survey.Second place went to Alaska Airlines, which was rated for the first time.Continental Airlines, which the authors called the most improved airline, rose to No. 3. It ranked last in 1994.United Airlines was ranked fifth, followed in order by Delta, Northwest, America West, TWA and US Airways. The survey considered only major airlines, defined as those with more than $1 billion in annual business.

ARLINGTON, Va. -- US Airways Group Inc. said yesterday that it will buy back preferred stock from British Airways PLC in a transaction valued at $126.2 million, a sign of renewed financial strength at the once-struggling U.S. airline.The buyback is a big step toward ending the three-year partnership between the sixth-ranked U.S. airline and Britain's largest air carrier, an alliance that went sour when British Airways jilted US Airways for rival AMR Corp. last year. The shares in the buyback represent about 26 percent of British Airways' holdings of preferred stock in US Airways.

WHAT WOULD Baltimore-Washington International Airport do without its prime tenant, US Airways? Officials at BWI are pondering that question as the airline threatens withdrawal if unions refuse its cost-cutting demands. Unless US Airways gains labor concessions, its long-term viability is very much in doubt.Given another rejection by the pilots' union, US Airways could sharply reduce flights at BWI or shut its operations here completely. That would be a bitter blow to BWI. Seven years ago, US Airways owned 70 percent of the local air market.

WHAT WOULD Baltimore-Washington International Airport do without its prime tenant, US Airways? Officials at BWI are pondering that question as the airline threatens withdrawal if unions refuse its cost-cutting demands. Unless US Airways gains labor concessions, its long-term viability is very much in doubt.Given another rejection by the pilots' union, US Airways could sharply reduce flights at BWI or shut its operations here completely. That would be a bitter blow to BWI. Seven years ago, US Airways owned 70 percent of the local air market.

ATLANTA -- Delta Air Lines Inc. Chairman and Chief Executive Ronald Allen announced unexpectedly yesterday that he will retire July 31, after clashing with board members over a bid to demote the airline's chief financial officer and leading a failed pursuit of Continental Airlines Inc.A career-long Delta employee, Allen's combative personality put him at odds with his board and made it impossible for him to get support for his vision for the airline.Though...

WASHINGTON -- The Federal Aviation Administration, acknowledging for the first time that its ability to enforce airline safety standards was in question, announced historic changes yesterday in the way it oversees the airline industry.Among them, Transportation Secretary Federico F. Pena recommended that Congress amend the FAA's legislative charter by eliminating its role in promoting air commerce and making safety its sole mission.In addition, the agency said its longtime safety czar, Anthony J. Broderick, would leave at the end of next week.

Southwest Airlines is scheduled to announce plans Tuesday to offer nonstop service from Baltimore to Boston, adding a second major market to its portfolio in little more than a week as it works to build business despite the downturn in travel amid the recession. Beginning Aug. 16, Southwest will schedule 10 flights daily to Boston's Logan International Airport, including five each from BWI Thurgood Marshall Airport and from Chicago. Last week, the air carrier began booking flights to New York's LaGuardia Airport from Baltimore and Chicago.

Airline passengers just can't catch a break. Or can they? Hundreds of thousands of people were forced to scramble for alternative travel arrangements recently after American Airlines, the nation's biggest carrier, canceled more than 3,000 flights for maintenance checks. Meantime, Aloha Airlines, ATA and Skybus shut down operations, leaving passengers high and dry. Charter airline Champion Air said it would shut down in the next few weeks. Amid all this chaos, it was easy to overlook a federal court's ruling last month that overturned a New York law guaranteeing airline passengers a "bill of rights" for when they get stuck on the ground during epic delays.

With her pink cell phone practically glued to her left ear, Renee Matos stood in the Baltimore airport yesterday tapping her foot and praying that the Southwest Airlines agent on the line would come through. They had to get her home to San Antonio that night. American Airlines wasn't in any position to do it. The company grounded more than 900 flights yesterday - on top of the 1,550 since Tuesday - so it could inspect and repair wiring on its planes. And executives said it would cancel about 570 more flights today, with more postponements tomorrow.

When an Indianapolis airline canceled its flights yesterday -- stranding thousands -- and announced that the company had filed for bankruptcy, the effects were felt all the way to Baltimore. ATA was supposed to expand BWI Marshall Airport's international operations by offering inexpensive flights to Europe through a partnership with Southwest Airlines, the airport's No. 1 carrier. The deal would have turned BWI into Southwest's international hub and boosted BWI's languishing foreign travel services.

FORT WORTH, Texas -- Not long after he was hired as lead labor negotiator last year for Southwest Airlines, Joe Harris was pulled aside by Herbert D. Kelleher in a hallway at the company's Dallas headquarters. The airline's chairman and co-founder had one directive regarding negotiations for the airline's new pilots contract. "Herb cornered me and said, `Don't screw this up, Harris,' " he recounted. Not long after, a Southwest pilot recognized him at an airport. The pilot "came up to me and said, `Don't let them screw this up.'" Harris got the message.

Northwest Airlines announced yesterday that it will shutter its Hanover reservation center, which employs 183, because of a shortage of qualified workers in the area. The center is slated to close March 31, 2008. "The challenges the airline industry is currently facing require Northwest to continually review its operations," Perry Cantarutti, Northwest's vice president of reservations sales and services, said in a statement. "While this was a very difficult decision to make, it was necessary given the inability to retain and attract sufficient numbers of qualified staff at the ... facility."

Blaming weaker traffic caused by last month's terrorist scare and other challenges, AirTran Airways said yesterday that it will throttle back its aggressive growth rates in 2007 and 2008. In a terse regulatory filing, the discount carrier, which has major operations at Baltimore-Washington International Thurgood Marshall Airport, said it began seeing softer demand last month. "This trend appears to be continuing into the month of September and likely resulted from the threat of recent terrorist events, Tropical Storm Ernesto, and capacity additions on the East Coast," said Stan Gadek, AirTran's chief financial officer.

JetBlue Airways Corp., once a darling of the airline industry, is now in a spot many industry experts once thought hardly possible: the red. For the first time since it began flying in 2000, the airline - known for its low fares and such extras as leather seats and individual TV sets - lost money, $42 million in the last quarter of 2005, an amount larger than expected. In reporting fourth-quarter results last month, JetBlue said, based on current and expected fuel prices, that it does not expect a profit this year.

In spite of having its planes in the air longer and taking off and landing off more frequently than its competitors, Southwest Airlines has logged one of the best safety records in the industry - in part by flying and maintaining just one model of plane, the Boeing 737. The single-aisle jet is the workhorse of the global airline industry and deemed one of the safest models ever made. While airlines rarely promote their safety records in advertising, the fact that Southwest had not had a fatal accident in its 35-year history until Thursday night - when a Southwest plane skidded off a runway at Chicago's Midway Airport and killed a 6-year-old boy as it crashed into a car on an adjacent street - was a point of pride internally for the Dallas-based carrier.

Those who hold bankrupt United Airlines' stock may joke that it's not worth the paper it's printed on. But it's no joke: Wall Street believes the stock is worth about 50 cents. At the same time, the going rate for the paper: $29.95, because unlike wanting a stake in the company, a growing number of people want to buy the paper. Those people are aeroscripophilists. They scour the Internet and tables at traveling fairs for financial papers such as stocks and bonds, specifically those with ties to aviation.