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US Airways' Pilot Battle Simmers

Ted Reed
The Street.com
09/04/09 - 10:30 AM EDT

CHARLOTTE, N.C. (TheStreet) -- Seventeen months ago, a new pilots union at US Airways took over management of a seemingly unsolvable seniority problem which, not surprisingly, it has failed to solve.

In fact, in May a Phoenix federal jury found against the U.S. Airline Pilots Association in a case that challenges its very existence, making it fair to question whether the union can achieve its key goals of securing an acceptable seniority agreement and a new pilot contract. The existing contract, signed during bankruptcy in 2003, left US Airways with the lowest pilot pay among the 11 largest cargo and passenger airlines.

Meanwhile, USAPA has achieved only limited success in reaching out to opponents in the seniority dispute that divides the airline's 4,200 active pilots. In the Phoenix case, the jury found that USAPA failed to represent all of its members.

At the same time, the fledgling union has recorded a series of successes. It established a functioning alternative to the powerful, long-established Air Line Pilots Association. It got high marks for its supportive role following the crash of US Airways Flight 1549, which made heroes of two of its members, and it was heavily involved in the National Transportation Safety Board investigation.

It oversees an active grievance procedure, representing all pilots. In a recent case, an arbitrator required US Airways to fund a $30 million retirement account, for pilots on disability, with cash instead of notes.

In the Phoenix case, the Ninth Circuit Court of Appeals, moving quickly on USAPA's appeal, will hear oral presentations in December.

"Nobody thought we would remove the largest, most powerful pilots union without a legal battle," said USAPA president Mike Cleary, an Airbus A320 captain. "We started with a blank sheet of paper and made this happen, and 17 months later this place is firing on all cylinders.

"The two major functions of any union are to negotiate a contract and to enforce a contract," Cleary declared. "In enforcement, we have been successful." In negotiations, not so much.

Said Cleary: "We're disappointed with the progress of talks, (but) let's not fail to observe the elephant in the room" -- by which he means the seniority ruling that has splintered US Airways pilots.

Following the 2005 merger of US Airways and America West, pilot seniority integration went to binding arbitration. The 2006 ruling appears to favor America West pilots who typically emerged with better seniority rankings than US Airways pilots with more years at the carrier. The arbitrator based his ruling on pilot's "career expectations" and on a premise that US Airways was a failing carrier rescued by a financially healthy America West.

USAPA Vice President Randy Mowrey says "the most egregious example" of the list's inequity is this: The pilot at the bottom of the US Airways list is 56, has 17 years at the airline and has never been laid off. Yet he falls behind an America West pilot, 35, with a few months on the job, and he "has that guy in front of him for the rest of his career."

In the Phoenix case, pilots from US Airways, known as "the east," argued that a seniority agreement is nothing more than a section in a contract. Pilots from America West, known as "the west," said binding arbitration is just that. East pilots, in the majority, ousted ALPA in a 2008 election. But the dispute means the two groups continue to have separate, low-wage contracts.

A settlement to the seniority dispute would inevitably lead to a new, higher-cost contract for US Airways. In 2007, the airline made an opening offer to increase pilot compensation by $122 million annually.

In the meantime, the conflict has been such a burden, in terms of pilot morale and the continuing delay of financial and logistical benefits associated with flying as a single carrier, that in two subsequent merger efforts major airlines took pains to avoid a similar outcome.

When Delta and Northwest agreed to merge in 2008, they made sure to work out pilot seniority integration methodology before they signed. And last month, Southwest decided not to pursue a merger with Frontier because pilots could not agree on seniority.

Cleary says he has made continued efforts to reach out to west pilots. "We take it very seriously," he said. "We want them to know we're an open, democratic union." Last week, USAPA leaders traveled to Phoenix to meet with about five dozen west pilots. "The tone, all in all, was respectful," Cleary said. "They had boycotted the union, but now, 17 months later, they are starting to join." Currently, 300 to 400 of 1,500 west pilots, and about 90% of 3,200 east pilots, pay dues. (Not all are active.)

A west pilot, who attended the Phoenix session and asked not to be named, said USAPA officers "just came out here to go through the motions, and then say 'we've been to Phoenix, we heard what you have to say, and now we don't have to come to Phoenix for another year.' The truth is that any pilot who doesn't speak along USAPA's lines is labeled a traitor."

The man in the middle of the east/west dispute is Brice LeCarre, elected in April as USAPA's Phoenix domicile chairman. "I thought it was time for somebody in the west to step up," LeCarre said. "Pilots here respect what I'm doing and see the importance of being engaged."

Two other west pilots also joined USAPA's 15-member ruling council. At meetings, "we get along," LeCarre said, and afterwards, "we have some good conversations around some chicken wings."

But fundamentally, LeCarre acknowledged, pilot leaders "do not share my perspective and I can't ask them to. We don't have to like each other. But we cannot pull one forward without the other."

About 500 east pilots opposed USAPA in the 2008 election, and still do. "USAPA said they would get a contract quickly: that hasn't happened," said Richard Obermeyer, a 21-year east pilot. "They said they would get rid of the ruling: that hasn't happened, and a lot of legal views say there's not a snowball's chance in a very hot place of winning the appeal." Possibly not, but USAPA attorneys are confident.

Would Obermeyer live with the ruling, although he might never reach captain and often fly as first officer to a younger, less experienced pilot? "I don't have any choice," he said. "I'm not going to quit my job. At some point you have to face reality, get the best contract you possibly can and go back to feeding your family."

Clearly, the appeal's outcome will shape USAPA's future. If the union wins, it prevails. If it loses, who knows? Said LeCarre, "The appeal is not a good idea, because the union is not representing all of its members. At the same time, it is the right of USAPA to appeal. But if USAPA loses, it should move on and accept the seniority ruling."

Cleary declined comment on union strategy should the appeal fail. Asked whether east pilots could live with the ruling, he responded grimly: "That would be a very difficult task."

 


 

Judge says American Airlines union can't ask pilots to avoid overtime

Dallas Morning News
12:00 AM CDT on Saturday, August 29, 2009
By TERRY MAXON
tmaxon@dallasnews.com

A federal judge has told the pilots union at American Airlines Inc. that the union can't encourage its members not to fly overtime.

The U.S. District Court in Washington, D.C., said that while American Airlines pilots have the right not to volunteer to fly extra flights, the Allied Pilots Association can't urge members to forgo volunteering. The court said such advice would violate the Railway Labor Act and harm the airline's operations. The Allied Pilots Association, which asked for a ruling last August, had wanted to avoid furloughs by making sure that pilots didn't fly extra trips – and thus reduce the number of pilots needed by American.

But the U.S. District Court in Washington, D.C., ruled that such advice would violate the Railway Labor Act and harm the airline's operations.

The court said that while members have the right not to volunteer to fly extra flights, the union can't urge members to forgo volunteering.

"There is a difference between an individual exercising his or her right under a contract and a union collectively encouraging its members to exercise those individual rights," Judge Alexander Williams Jr. said in his Aug. 17 ruling.

In a statement Friday, the airline said it is "pleased that judge supported our position in this case."

At issue is "open time" – the flights in the airline's monthly schedule that have no pilot assigned to operate them. American uses reserve pilots who don't have regular monthly schedules to fly many of those flights, but it also counts on its more senior pilots to volunteer to pick up the flights to make additional money.

According to the court ruling, American estimated it would have to hire 333 pilots at a cost of $59 million a year to avoid disrupting its operations if all nonreserve pilots didn't volunteer to pick up open time.

"APA has presented absolutely no evidence to show that its proposed actions would not interrupt commerce or American's operations," Williams' ruling said.

"Instead, the crux of APA's argument is its reliance on American's ability and obligations to use other mechanisms to cover open time if lineholders opt not to fly voluntary open time."

The union and American Airlines have been negotiating a new contract since summer 2006. As such, both sides must maintain the status quo, meaning they can't do something they haven't been doing all along.

In any case, the issue is moot for the moment. The issue came up in summer 2008 when American was warning it would need to furlough pilots in the fall. As it turned out, the airline didn't furlough any pilots, and it recalled a handful this year.

The union said Friday that the judge "also declined to rule – as management had sought – that APA had an improper purpose for initiating an open-time campaign. Management contended that APA was seeking to influence collective bargaining, rather than mitigate furloughs."

 


 

JULY 29, 2009
House Proposal Aims to Boost Airline Safety

By CHRISTOPHER CONKEY and ANDY PASZTOR
The Wall Street Journal

WASHINGTON -- A bipartisan group of lawmakers plans Wednesday to introduce legislation aimed at curbing pilot fatigue and beefing up training, as part of a far-reaching bid to improve airline safety.

Responding to a high-profile commuter plane crash earlier this year, lawmakers are slated to introduced a bill in a House committee focusing on human errors that can lead to airline accidents. The legislation envisions overhauling the way airlines hire, train and manage their flight crews.

The proposal drew criticism Tuesday from an airline-industry group, but it has bipartisan support from senior House members, and the Senate is considering similar but less-sweeping measures.

Congress is targeting airline safety after the National Transportation Safety Board called attention to mistakes by apparently tired pilots at the controls of Colgan Air flight 3407, a commuter plane that claimed 50 lives when it crashed outside Buffalo, N.Y., in February. The NTSB is still investigating the crash.

House Aviation Subcommittee Chairman Jerry Costello (D., Ill.), the main sponsor of the House bill, called his proposals "a serious effort to consolidate what we know industrywide about aviation safety." Some of the proposals could entail significant extra costs for carriers, along with substantial management changes inside the Federal Aviation Administration.

Senate Commerce Committee Chairman Jay Rockefeller (D., W.V.) said the Senate must "take the necessary steps now to make certain that one level of safety exists across the entire commercial airline system." Mr. Rockefeller and other FAA critics have said commuter pilots often work more grueling schedules and receive less training than pilots at larger airlines, but regional carriers contend they all meet minimum safety standards.

Details uncovered in the NTSB's Colgan investigation portrayed the two pilots as distracted and ill-equipped to prevent and respond to the midair stall that occurred as the plane descended toward Buffalo in icy conditions.

The House bill would require the Federal Aviation Administration to update and tighten regulations covering everything from cockpit training and pre-employment screening to the sharing of voluntary safety data among large carriers and commuter airlines. It ratchets up pressure on both the FAA and airlines to embrace changes long demanded by pilot union leaders and independent safety experts.

Among other requirements, the House bill calls for carriers to tailor training for pilots based on their experience and type of aircraft they are flying. The FAA also would be required to do more to oversee remedial training of pilots who performed poorly on flight tests, and airlines would have to set up formal mentoring programs to help junior pilots.

To crack down on sleepy pilots, the legislation orders the FAA to draft new scheduling rules and fatigue-prevention plans within a year based on the latest sleep research. In a controversial move that could alienate some airline employees, the bill also calls for regulators to consider potentially negative safety consequences from pilots who routinely fly long distances and may report for duty already fatigued.

Going further than other air-safety bills in recent years, the House package sets higher minimum experience levels across the board, affecting newly hired pilots. And it calls for re-evaluating the traditional length of training periods.

For the first time, regulators once a year would be required to specifically tell Congress how they are carrying out safety recommendations from the NTSB.

The main trade group representing U.S. airlines took issue with the House bill. Air Transport Association President James May said airlines and regulators are already "fully engaged in determining the best course of action in response to the Colgan Air accident."

FAA spokeswoman Laura Brown said the agency is working on revamped fatigue rules, has updated some pilot-training regulations and continues to hold public workshops across the U.S. addressing other issues raised in the House bill.

Spokesmen for Colgan Air Inc. and Continental Airlines Inc., Colgan's partner in the flight that crashed near Buffalo, declined to comment.



 

June 12, 2009
Plane Crash Shows Flaws in Standards for Safety

By MATTHEW L. WALD
The New York Times

WASHINGTON — Even though nobody died, the crash of US Airways Flight 1549 into the Hudson River has exposed shortcomings in aviation safety, in areas like training and life rafts.

“It’s a tremendous learning opportunity,” said Robert L. Sumwalt, the member of the National Transportation Safety Board who supervised two and a half days of hearings in Washington that ended Thursday. “You don’t judge the potential learning on the size of the body count.”

In fact, old hands at the safety board said they could not recall any previous occasion when hearings were convened for a crash with no fatalities. But from the tenor of the testimony and the questioning, a number of safety recommendations seem likely. Many of the assumptions on which safety rules are based seem outdated, or were perhaps wrong to begin with.

One is the likelihood of a twin-engine jet taking in birds in both engines, which caused the crash of the Airbus A320 carrying Flight 1549.

The Federal Aviation Administration’s goal regarding bird strikes is to limit the number of times that both engines on an twin-engine jet fail to no more than once in a billion flight hours. But the number of hours logged by all Western-built airliners since the beginning of the jet age is not much more than a billion, and the US Airways crash, on Jan. 15, came two months after a Boeing 737 operated by Ryanair, a European carrier, was disabled by birds near Rome. The 737 landed on a runway, with extensive damage, and five people were injured in the emergency evacuation. Before that, the most recent accident involving birds in both engines on a civilian passenger airliner was in 1988, when an Ethiopian plane crashed.

The population of large birds in North America and other regions is rising because of the near-global ban on DDT, a pesticide that accumulated in birds and made their eggs too fragile to hatch, according to testimony at the hearing. At the hearing, witnesses testified that 14 species of birds in North America weigh more than eight pounds, and 13 of them are increasing in number. F.A.A. standards, though, are based on a database of bird strikes going back many years, when the population of large birds was lower.

And while those testifying at the hearing praised the performance of the cockpit and cabin crews on the US Airways flight, they did not deploy two crucial pieces of equipment carried on the plane for water landings. One was safety lines, which can be pulled out of the plane and looped around metal eyelets on the top of the wing so that passengers standing there will have something to hold. The wings were crowded with passengers, standing knee-deep in water, but the lines were not used.

The other was the rear slide rafts. The rear doors were rendered useless by the force of the impact, which let water into the back of the plane and left the doors partly submerged, but the rafts were supposed to be available. The front rafts would have accommodated only about two-thirds of the 155 people on board, so if help had not shown up promptly, the plane would have resembled the Titanic, with more passengers than lifeboat space.

Another question raised at the hearings but not deeply examined was the role of “fly by wire” technology in the A320. In the Airbus design, a computer sits between the cockpit controls and the flight control surfaces, like the flaps, ailerons and tail elevators, and prevents any movement that would shift the plane to a radical angle. That system kept functioning even after the engines quit.

Investigators said the A320 flew its last few seconds at an angle that was perfect for maximizing lift, just before the point where its angle to the wind would become too steep and it would fall out of the sky. A human pilot could do that unassisted, but not as smoothly, and the captain, Chesley B. Sullenberger III, did it by holding a joystick control in the full aft position, knowing that the computer would step in to prevent the nose from going dangerously high. The technique is similar to the maneuver taken by a driver who stomps on the brakes, knowing that the anti-skid technology will prevent the wheels from locking.

That reduced Captain Sullenberger’s workload, leaving him freer to focus on other vital tasks, like keeping the wings level.

The hearings also revealed a need to better acquaint pilots with the problems of setting down on water; Airbus executives said experienced test pilots had found it hard to do in a simulator.

 


 

BUSINESS
JUNE 10, 2009
FAA Orders Scrutiny of Pilot Training Programs

By SUSAN CAREY and ANDY PASZTOR
The Wall Street Journal

Facing escalating congressional criticism, the Federal Aviation Administration said Tuesday it ordered immediate inspections of pilot-training programs at smaller carriers.

As part of stepped-up oversight efforts, the agency and the Department of Transportation also set a safety meeting of major carriers, regional airlines, labor and aviation-industry groups for Monday.

In addition, commuter airlines plan to launch their own call for wide-ranging new safety measures. The high-profile moves come on the eve of what is expected to be tough congressional scrutiny of the agency's supervision of regional airlines.

The government and the regional industry, which transports one in four U.S. passengers, have come under fire since the February crash of a Colgan Air Inc. turboprop near Buffalo, N.Y., that killed 50 people. An initial hearing last month by the National Transportation Safety Board revealed that the pilots were fatigued, inattentive and lacked adequate emergency training on the plane they were flying. The captain's history of botched flight-proficiency tests also came out.

There have been four fatal U.S. regional-airline crashes and several other serious accidents in the past five years, translating into a much higher accident rate than for large airlines.

Randy Babbitt, the FAA administrator, said his goal "is to make sure that the entire industry—from large commercial carriers to smaller, regional operators—is meeting our safety standard."

Mr. Babbit, who was confirmed just three weeks ago, appears intent on showing that the FAA can be proactive in policing regional airlines. While the FAA will wait for the final NTSB report on the Buffalo crash, "there are things we should be doing now," Mr. Babbitt said.

The Regional Airline Association, which represents the bulk of the nation's commuter carriers, is expected to tell a House panel Thursday that it is ready to develop new ways to study and combat pilot fatigue, including possible random tests of cockpit crews.

In addition, the group for the first time is advocating a joint industry-government plan to create a comprehensive data base of pilot records that can be checked for new hires. It is also expected to suggest random downloads of cockpit voice recorders to see if pilots are breaking safety rules by engaging in extraneous conversations. Some of the proposals would require legislation.

Both the move by the FAA and the industry association come as Congress prepares to debate whether current safety oversight of commuter airlines is adequate.

The FAA wants to foster improvements in areas such as pilot training, cockpit discipline, airline management's responsibilities for crew education and the relationships between major airlines and their regional partners. An FAA spokeswoman said the agenda is still being developed.

By calling for an industry-wide safety "summit" next week, the new FAA chief is following the same playbook that launched an initiative two years ago to reduce the hazards of runway incursions—planes running into each other on the ground. After a "call to action," the FAA and the industry looked at engineering and operational changes that would have dramatic short-term impact. Their efforts produced some early results, but long-term fixes remain elusive.

Next week's meeting will underscore the regulator's new focus on potential training pitfalls at regional carriers. However, pilot training is a complex, costly, multiyear process that isn't easy to revamp quickly. Moreover, it is tied up in the economics of the regional industry, whose major selling point to big carriers is its low cost.

Regional airlines compete to fly routes for large carriers, which are demanding lower prices to keep their own expenses under control.

"The FAA didn't keep up with the changing demographics and needs of the [regional] industry," said Capt. Paul Rice, first vice president of the Air Line Pilots Association union. Commuter airlines' breakneck growth in recent years "exposed shortcomings in training, licensing, checking," he said.

In the months since the Buffalo accident, the FAA has stepped up surveillance of some regional carriers. One is Gulfstream International Airlines, a Florida commuter carrier that provides flight training to many new pilots, including the captain in the Buffalo crash and pilots in two other regional accidents.

Last month, the FAA proposed a $1.3 million civil penalty against Gulfstream International, citing improper maintenance and pilot scheduling. In a separate audit in March, the FAA found more than 20 separate alleged violations. Gulfstream said it quickly fixed any problems and is appealing the earlier penalty.

Because they must keep their costs down and fly smaller planes, regional airlines pay their pilots far less than their peers at the big airlines. With those low wages, the regionals don't tend to attract well-trained military pilots, but must look for fresh hires from lightly regulated flying schools and training academies.

When the big airlines are hiring, regional pilots move on to those better-paying jobs, which creates high attrition and leads to even more relatively inexperienced aviators being hired at commuter airlines. That means the initial and recurrent training that regional carriers provide for their pilots is crucial.

 


 

UPS, FedEx Tops in Pilot Pay

Ted Reed
TheStreet.com
06/05/09 - 12:20 PM EDT

CHARLOTTE, N.C. -- A new survey shows that pilots at overnight cargo carriers FedEx and UPS command the highest salaries among the 11 largest U.S. airlines, while pilots at US Airways are the lowest paid.

The discrepancies reflect trends that have shaped airline pay patterns since the Sept. 11 terrorist attacks, including a round of bankruptcies that enabled reduced costs at passenger airlines and a unique battle between pilots at US Airways, as well as society's increasing reliance on the overnight carrier duopoly.

For the overnight carriers, "the barriers to entry are high, the Internet boom has helped them a lot and the business wasn't that badly affected by 9/11," says Louis Smith, a retired Northwest captain who is president of Flt.Ops.com, which provides career counseling for pilots and conducted the pilot pay survey.

Among the 10 leading passenger carriers, four sought bankruptcy protection during the four years following the attacks and the concurrent economic slowdown. For the industry, the bankruptcy restructurings enabled two years of profits, in 2006 and 2007, following a five-year period when net losses totaled about $35 billion.

For decades, pilots for passenger carriers were kings of the sky, while pilots for overnight and cargo carriers were sometimes thought of as not-ready-for-prime time. In recent years, that perception has disappeared.

The current recession is impacting both overnight and passenger carriers. FedEx and UPS are each seeking $1 billion in annual cost reductions, and pilot costs are not exempt. UPS, for instance, wants $40 million in 2009 savings from its pilots, as well as additional savings in future years. The company, which recently retired its DC-8 fleet, says it has 300 pilots more than it needs.

Passenger carriers may have the advantage now, Smith says, because each of the major carriers generate hundreds of millions of dollars annually in fees for baggage and other services. "Fed Ex and UPS can't add fees and become luggage shipping companies the way the passenger airlines have done, and they can't stimulate demand by cutting ticket prices," Smith says.

Pilot contract negotiations are currently under way at American, Continental and United.

Meanwhile, at US Airways, pilots made concessions in bankruptcy to keep the airline afloat. The new, low-cost structure enabled a 2005 merger with America West. But pilots have been unable to agree on a seniority policy, which has hindered efforts to jointly negotiate new contracts, leaving existing contracts in place.

Pilots from the original US Airways "contributed $6.8 billion, including pension reductions, over the course of two bankruptcies to keep the company alive," says Arnie Gentile, spokesman for the U.S. Airline Pilots Association, which represents US Airways pilots. "Then the company turned its back on the pilots and has not negotiated new contracts."

Gentile says the airline has used the seniority dispute as an excuse, noting, "US Airways had many opportunities to reach an agreement with its pilots prior to the dispute over seniority issues." However, airline spokeswoman Michelle Mohr says the airline wants to be responsive to pilots and did make a 2007 contract offer that would have increased annual spending for pilots by $122 million.

"The seniority issue isn't an excuse for us," Mohr said. "We know our pilots are working very hard to integrate the seniority lists, and we are trying to be respectful of their process for determining what is going to work best for them."

Beyond unique US Airways issues, Gentile says that across the passenger airline industry, the pilot profession is being diminished by low wages, particularly for entry-level pilots who make just $21,600 at US Airways flying the Embraer E190, and even less at the regional airlines where may pilots get their first jobs.

Rebecca Shaw, the first officer on the Colgan Air flight, flying as Continental Connection, that crashed near Buffalo, N.Y., in February, killing all on board, had worked 13 months for Colgan and earned $23,900 annually, the carrier has said. Initially, National Transportation Safety Board investigators had said she earned $16,000 annually.

Nevertheless, the airline industry's high safety standards are threatened by a reduced salary structure, says Gentile. "Far fewer pilots (are) looking for commercial airline jobs," he says. "Today, when given career choices, both experienced pilots and young individuals breaking in have difficulty justifying the financial sacrifice."

 


 

Southwest Airlines pilots turn down new deal
07:31 AM CDT on Thursday, June 4, 2009
By TERRY MAXON / The Dallas Morning News


Southwest Airlines Co. pilots rejected a proposed contract by a narrow margin, the union representing the pilots said Wednesday.

The Southwest Airlines Pilots' Association said 50.8 percent of pilots voting were against the contract, with 49.2 percent in favor. The vote was 2,774 for and 2,869 against.


"Our pilots have spoken, and the group has stated there is more work to be done," union president Carl Kuwitzky said. "This contract, despite some financial gains, contained too many other negative aspects to ratify it."

Chuck Magill, Southwest's vice president of flight operations, said that "we are naturally disappointed and acknowledge it was a very close vote."

He said the airline welcomes "the opportunity for our negotiating teams to re-engage and work toward an agreement that best meets the needs of our company and our outstanding pilots during these challenging economic times."

Union officials did not speculate about why a majority of its members turned down the deal. Kuwitzky said the contract, the pilots' first new deal in 15 years, had a lot of changes that would have affected scheduling, and other items also would have affected pilots.

However, "I don't think there's any one issue," he said. "I think there are three or four issues that we'll find after we go through the polling process that our membership disagreed with and rejected the TA [tentative agreement] over."

The rejected deal would have provided a 2 percent pay raise on Sept. 1, and retroactive raises for Sept. 1 of 2007 and 2008, with back pay. Pay increases in 2010 and 2011 would have been based on the carrier's profitability.

The union's negotiators had wrapped up contract talks in late March, while some pilots were unhappy about Southwest's plans to code-share with other airlines – that is, putting Southwest flight numbers on flights to and from Canada operated by WestJet Airlines Ltd. and to and from Mexico on flights by Volaris.

Kuwitzky said the polling will determine how big a part the code-sharing played in the contract's rejection. "Scope" – the principle that all flying done on behalf of an airline is performed by the airline's pilots – is a contentious issue at many carriers.

"While this TA has some significant improvement in scope and code-share, the fact that our company is code-sharing to markets we can fly in Canada and Mexico just doesn't sit well with a number of our pilots," Kuwitzky said.

The pilots' contract rejection marks the Dallas-based carrier's first defeat in negotiations this year. Since Jan. 1, Southwest has signed new contracts with the unions representing its flight attendants; ramp, operations, provisioning and freight agents; and mechanics.

It also has a tentative agreement with its customer support and services and airport customer service employees, who began voting on that deal Monday.

 


 

Some pilots' lives defy glamorous stereotype
Airlines » Questions of fatigue, low pay encircle regional aviators in wake of crash

By David M. Halbfinger, Matthew L. Wald and Christopher Drew
New York Times News Service
05/20/2009


Alex Lapointe, a 25-year-old co-pilot for a regional airline, says he routinely lifts off knowing he has gotten less sleep than he needs.

Neil Weston, also 25, went $100,000 into debt to train for a co-pilot's job that pays him $25,000 annually. He carries sandwiches in a cooler from his home in Dubuque, Iowa, and holds out hope of tripling his salary by moving into the captain's seat, then up to a major carrier. Assuming the majors start hiring again.

Capt. Paul Nietz, 58, who recently retired, said his schedule wore him down and cost him three marriages. His workweek began with a 2:30 a.m. wake-up in Michigan and a 6 a.m. flight to his Chicago home base. There, he would wait for his first assignment, a noon departure.

By the time he parked his aircraft at the last gate of the night, he was exhausted but would be due back at work eight hours and 15 minutes later. "And I was very senior. I was one of the fortunate guys."

The National Transportation Safety Board's inquiry into the Feb. 12 crash of Continental Connection Flight 3407 outside Buffalo has highlighted the operations of the nation's regional airlines, a sector that has grown to account for half the country's airline flights and a quarter of its passengers.

The details of that world have surprised many Americans -- the strikingly low pay for new pilots; the rigors of flying multiple flights, at lower altitudes and thus often in worse weather than pilots on longer routes; the relative inexperience of pilots at the smaller airlines, whose training standards are the same, but whose skills may not be.

In hearings last week in Washington, witnesses and safety officials raised questions of whether the crew of the plane that crashed, killing all 49 people on board and one on the ground, had been adequately vetted and whether they might have been hampered by, among other factors, fatigue.

The renewed worries over commuter planes come as passenger airlines, regional and mainline, have achieved unprecedented levels of safety. Passenger deaths per million flights are down by more than two-thirds in the past 10 years. The people on board the Buffalo flight were the first in 30 months to die on a passenger carrier.

But of the six passenger flights that have crashed since Sept. 11, 2001, only one has been from a major carrier. Four were commuter flights, on which 133 people died. (The fifth, a 50-year-old seaplane in Miami, was in neither category.)

Regardless of whether training, fatigue or the cost-cutting that has hit the entire industry are determined to have contributed to the crash of Flight 3407, interviews with current and former regional pilots make clear their daily challenges.

Peek inside a crew lounge at midnight in Chicago, and you'll easily find every recliner occupied by an off-duty aviator trying to sleep despite the whine of a janitor's vacuum cleaner.

In any city with a sizable air hub, a search of Craigslist for the term "crash pad" will turn up listings for rooms for rent a short drive from an airport, where a dozen or more pilots, unable to afford hotels, may come and go, barely letting the mattresses cool.

But many regional pilots, paid entry-level wages that are sometimes no better than a job at McDonald's, cannot afford even a crash pad.

"I know a guy who bought a car that barely ran, parked it in the employee lot at his base airport and slept [there] six or seven times a month," said Frank Graham Jr., a former regional pilot and airline safety director who runs a safety consulting firm in Charlotte, N.C. Pilots for some regional airlines have been known to sleep in the aisles of their planes.

Like the two Flight 3407 pilots, who caught free rides on planes from Florida and Seattle to their flight from Newark to Buffalo, pilots routinely hopscotch across thousands of miles to get to work. And fatigue also is a problem for the mainline carriers, which sometimes are more vulnerable because they fly longer routes across more time zones.

U.S. Sen. Byron Dorgan, D-N.D., who is chairman of the subcommittee on aviation, said his group would conduct a series of hearings next month.

There is nothing wrong with commuting cross-country to fly, said Roger Cohen of the Regional Airline Association; he pointed out Capt. Chesley Sullenberger III, the US Airways pilot who landed his Airbus A320 in the Hudson River on Jan. 15, lives in Danville, Calif., and is based in Charlotte, N.C.

To the extent the Senate hearings address fatigue, they will not be the first. In 1995, the government proposed shortening pilots' workdays, but the airlines, which deny fatigue is a significant problem, opposed the changes, and the effort failed.

 


 

Southwest CEO Kelly Volunteers For Pay Cut
Disclosure Filed With SEC A Day After Posting Q1 Loss


A Proxy Statement drafted for Southwest Airlines' Annual Meeting of Shareholders and submitted to the US Securities and Exchange Commission provided details of compensation given its executive officers, including a voluntary cut in salary by CEO Gary Kelly.

In part, the Statement said, "Given the general economic outlook for 2009, the Compensation Committee had anticipated that Mr. Kelly would not receive a raise during 2009.

"Given the Company's actual first quarter 2009 results, Mr. Kelly himself elected to voluntarily reduce his base salary by 10 percent, effective April 1, 2009 and until such time as the Company's quarterly results improve."

Kelly (above) was given a raise last July "in recognition of the significantly increased responsibilities associated with his election as Chairman of the Board and acceptance of the additional role of President," the Statement said. Reuters reports in addition to a base salary of $465,000, Kelly received bonuses and compensation giving him a total income of almost $1.7 million in 2008.

Filed with the SEC last Friday, the timing of the disclosure followed close on the heels of SWA's release of 2009 Q1 figures. Last Thursday, SWA posted a $91 million loss in this year's first quarter, compared to a net income of $34 million during the same period in 2008.

 


 

Hero of the Hudson visits alma mater

  Hero of the Hudson visits alma mater
Air Force Academy Superintendent Lt. Gen. John F. Regni and 1973 U.S. graduate and classmate Chesley "Sully" Sullenberger salute during a parade held April 15 on the Terrazzo. Captain Sullenberger received the 2009 Col. James Jabara for Airmanship for displaying extraordinary Airmanship in hazardous conditions. (U.S. Air Force photo/Mike Kaplan)


by Tech. Sgt. Cortchie Welch
U.S. Air Force Academy Public Affairs

4/17/2009 - U.S. AIR FORCE ACADEMY, Colo. (AFNS) -- Capt. Chesley "Sully" Sullenberger, who saved U.S. Airways Flight 1549 with a heroic water landing in January, returned to the roots of his aviation career here Wednesday to accept a coveted flight award from the Air Force Academy. 

Captain Sullenberger, a 1973 graduate, received the 2009 Colonel James Jabara Award for Airmanship during a ceremony on the Academy's Terrazzo that included a pass and review of 4,400 cadets. 

"It's humbling to be in such company - it's quite an honor," said Captain Sullenberger, a seasoned pilot. Past winners of the award include 1st Lt. Karl Richter, a 1964 Academy graduate, who at the age of 23 was the youngest pilot in the Vietnam conflict to shoot down a MiG in air-to-air combat. 

During his two-day return to the Academy, Captain Sullenberger, who was classmates with Lt. Gen. John Regni, Academy superintendent, and Gen. Norton Schwartz, Air Force chief of staff, made a visit to his old Cadet Squadron-18, held a question-and-answer assembly with cadets and took a glider for a flight. 

"The flight was wonderful, beautiful," said the captain, who, as an Academy glider instructor pilot, amassed more than 1,000 flight hours - an unprecedented number for a cadet. "I spent a big part of my time here flying gliders. People seemed to think that it was really exceptional that I was able to fly so much while I was here. It was a great sense of satisfaction that I was able to do that. And this glider flight was a great reminder of that. It was a pleasure to be on the airfield again and fly with a cadet." 

Captain Sullenberger, a native of Denison, Texas, and his crew with 155 people aboard Flight 1549 earned international acclaim Jan. 15 when they collectively put their emergency evacuation skills to the test. 

Almost immediately after takeoff from New York's LaGuardia Airport, the Airbus 320 that Captain Sullenberger piloted lost power in both engines after striking a flock of birds. With extraordinaire calm and coolness, he began to make decisions and maneuvers that resulted in a successful emergency landing the world is still talking about. 

The captain explained how he and the crew showed so much composure during the crisis that carried over to the 150 passengers. 

"Jeff [First Officer Skiles] and myself had been doing this for so long that we were just focused on doing our jobs," Captain Sullenberger said. "You don't allow other things to distract you. It was the experience and training of the flight attendants, who displayed an outwardly calm and professional demeanor, that got the passengers to respond in kind." 

Exhibiting Air Force core values, he walked the length of the aircraft twice to ensure everyone had safely evacuated the plane. 

Three months after the "Miracle on the Hudson," Captain Sullenberger said he continues to get a large quantity of letters and gratitude from admirers and well-wishers. He said he thinks often about a reunion meeting of his crew and passengers along with their families that took place in Charlotte, N.C., in February. 

"The most touching part for me during the reunion was when women came up to me and said, 'Thank you for not making me a widow,' 'Thank you for allowing my 3-year-old son to have a father,' and 'Thank you for keeping my family intact," he recounted. 

He said the story of Flight 1549 captured the imagination of America and the world because, "People were looking for good news, they were looking for a reason to be hopeful again." 

"I think this event was an anecdote to all the bad news that has happened in the last couple of years," said the former F-4 Phantom pilot. 

He said it's difficult to point to any particular training he'd received at the Academy that guided him during the heroic act on the Hudson River. 

"It was many little things that added up to an important whole," he said. "It was the entire experience [at the Academy]." 

Captain Sullenberger, who lives in Danville, Calif., with his family, said it's "been a gradual concept" to fully realize the impact of his heroic actions. 

"It's taken time to process and incorporate those events into my persona," he said. "But I'm confident that we made the right choices. I'm confident that we had the best outcome that we could have under those circumstances. I'm satisfied and very grateful for a successful outcome with no injuries. Over time, I really appreciate how remarkable that event was." 

Captain Sullenberger last visited the Academy about 25 years ago during his 10-year reunion. 

"I'd had forgotten what a beautiful location it is," he said. "I've always loved this part of Colorado, with the big sky and a very dramatic landscape. I'm gratified to see so much construction going on. I'm glad to see the investment being made." 

The airline captain said being with cadets was refreshing. 

"It was great to be with the cadets," he said. "It couldn't have been more wonderful. The cadets have taken good care of the Academy while I've been gone. The future is bright." 

Cadets returned the praise. 

"He's down to Earth," said Cadet 1st Class Anne Marie Wathen, a native of Atlanta. "He's not in it for the fame. He deserves all the recognition he gets." 

Cadet 2nd Class Erik Nelson of Uncasville, Conn., said he has great respect for Mr. Sullenberger because of the passion he shows for flying. 

"He's a notch above the rest," Cadet Nelson said. "His passion for flying gave him the edge to do what needed to do to land the plane safely." 



 

No federal help for a pilot deal at US Airways

Associated Press
April 2, 2009

MINNEAPOLIS (AP) — Pilots at US Airways Group Inc. said on Thursday that the company has rejected their request to bring in help from the National Mediation Board to help them reach a joint contract.

The union and the company are working on a joint contract to cover the carrier's 5,000 pilots, who include pilots from both America West and US Airways. America West bought US Airways in 2005.

The US Airline Pilots Association had wanted a facilitator from the agency that regulates airline labor issues, the National Mediation Board, to oversee talks.

The airline rejected that idea. In a March 31 letter, the airline's vice president for Labor relations wrote: "Should there come a time where outside assistance in reaching a single agreement does become appropriate, there is a specific negotiated provision" in a transition agreement with the previous pilot union, the Air Line Pilots Association.

Pilots at the carrier ousted ALPA and formed their current independent union a year ago because of dissatisfaction with the process for integrating pilots from the two airlines that make up the new US Airways.

"We've been negotiating for a long time now. The pilots are very frustrated by a lack of progress. It's our preference to move that process along now," said union president Steve Bradford.

US Airways spokesman Jonathan Freed said either side can request a mediator under the transition agreement, but the National Mediation Board process is different.

"US Airways wants to achieve a single contract for all pilots," he said.

US Airways shares gained 25 cents, or 9.6 percent, at $2.85 in afternoon trading on a day when most airline stocks rose.

 



April 2, 2009

US Airways rejects pilots' bid for mediator in labor talks

Bloomberg News Service

US Airways Group Inc. rejected a proposal from it pilot union to seek federal help in reaching a new contract after more than three years of talks, the labor group said.

A National Mediation Board facilitator was requested in February by the US Airline Pilots Association, which represents more than 5,000 pilots at the Tempe, Ariz.-based airline.

Failure to negotiate a single contract since the 2005 merger that created the carrier in its current form means pilots work under separate accords for pay, scheduling and work rules. US Airways merged with America West Holdings Corp. in September 2005.

“We are convinced that the services of an NMB facilitator will assist pilot and management negotiators,” union President Steve Bradford said in a statement today. The rejection of the request led pilots to “question management’s sincerity in desiring to reach any agreement,” he said.

Morgan Durrant, a US Airways spokesman, didn’t immediately return a call seeking comment. US Airways’ flight attendants also continue to work under separate contracts.

 


 

US Airways rejects federal mediation for labor talks

By Christopher Hinton
MarketWatch
April 2, 2009

NEW YORK -- Pilots at US Airways will have to wait even longer before they are again working under contract. The Tempe, Ariz., carrier has rejected its pilots' union request to bring in a federal mediator to help the two sides break a three-year stalemate, the US Airline Pilots Association said Thursday. "Management informed us that they will support a facilitator should there come a time where outside assistance in reaching a single agreement does become appropriate," USAPA said in a statement. "US Airways pilots wonder when the right time might be and we question management's sincerity in desiring to reach any agreement." Shares of US Airways rose 5.8% to $2.75 amid a broader market rally.

 


 

AP
Seniority issue could be expensive for Delta
Friday March 20, 7:08 pm ET
Seniority issues could force Delta Air Lines to hire workers it doesn't need

ATLANTA (AP) -- Delta Air Lines may be in the costly position of hiring employees it ideally wouldn't need, spending precious cash the carrier wants to preserve in the uncertain economy.

That's because two key work groups haven't resolved seniority issues resulting from the combination of Delta and Northwest Airlines into the world's biggest airline operator.

Seniority determines schedules, vacations, work rules and the way employees bid for flights. Pilots have a merged seniority list and joint contract, but flight attendants and ground workers, such as baggage handlers and reservation agents, don't.

In April, Delta will begin flying its planes in Northwest markets and vice versa. This cross-fleeting is about using the right size aircraft on a specific route based on the demand in that market, and Delta has said one of the key benefits of its acquisition of Northwest was the flexibility to use each carrier's aircraft on the other's routes.

However, flight attendants from one carrier won't be able to work on the other's aircraft because of outstanding seniority and representation issues.

For example, a new international flight on a pre-merger Delta aircraft may require flight attendants who speak a particular language. If Delta attendants aren't available, the airline may need to hire people with that capability even if pre-merger Northwest flight attendants who spoke the language were available. And Delta wouldn't necessarily switch to a Northwest aircraft on that route because it may be inefficient to do so.

Delta currently can't estimate the cost, and experts won't speculate without wage data from the airline and the number of employees to be hired.

Passengers may not notice much right away, but eventually friction between workers could affect morale and, perhaps, hurt customer service.

Jerry Glass, a former US Airways executive who is now president of human resources and labor-management relations consulting firm F&H Solutions Group, said Delta wants to resolve seniority for business reasons, and customer service is a part of that.

If there is a lengthy battle over seniority at Delta "there may be enhancements they want to make that may take them longer and there may be workarounds they may have to do to get that completed," Glass said.

Delta has publicly urged the two groups to resolve the integration of the seniority lists soon. Unions that represent the flight attendants, baggage handlers and reservation agents who worked for Northwest before the Oct. 29 buyout have resisted.

 


 

Posted on Sat, Mar. 14, 2009
Drop in cost of refining jet fuel is huge boost to airlines

By TREBOR BANSTETTER
tbanstetter@star-telegram.com

Amid the doom and gloom of the collapsing travel market, a bright spot for the major airlines has emerged that could save the industry billions of dollars this year.

The price of refining crude oil into jet fuel has plummeted in recent weeks as demand for fuel drops and suppliers try to unload excess inventory of jet fuel, analysts say.

Last year, the cost of refining jet fuel added about $25.50 to the price of a barrel of crude oil, on average. So if oil cost $100 per barrel, the same amount of jet fuel would cost $125.50.

But the difference between the cost of a barrel of oil and a barrel of jet fuel — dubbed the "crack spread" in industry jargon — has dropped substantially since the end of the year. According to a report by FTN Equity Capital Markets, the spread averaged $21 in January and $15 in February.

It dropped even further this month, and Tuesday, the most recent date available, it fell to just $4 per barrel.
"The crack spread has cracked," declared FTN airline analyst Michael Derchin.

The savings for the major airlines could be substantial, said John Heimlich, chief economist for the Air Transport Association.

"This is a significant savings," he said.

The drop in the crack spread is particularly welcome because many airlines haven’t been able to enjoy the full benefit of falling fuel prices. That’s due to hedging contracts, which locked in the price of fuel purchases in advance, often at above-market prices.

Those contracts, however, are typically tied to crude-oil prices and don’t include the crack spread.

"So [the airlines] are probably enjoying almost all the benefit of the reduced crack spread," Heimlich said. "That’s very valuable right now."

What’s happening

The decline in the spread is due to a drop in demand for jet fuel and other non-gasoline products distilled from crude oil, Heimlich said. And many refineries boosted their production of jet fuel last summer when high gasoline prices pushed down demand for gas.

"There is a time lag in terms of how quickly they can shift their refining, so you still have a lot of excess inventory" of jet fuel, he said.

In addition, some foreign refineries have begun production in recent months, adding more to the global supply.

If the low prices are sustained, the savings will be considerable. A $1 drop in the price of a barrel of jet fuel saves the industry $400 million annually, analyst Derchin said.

So if the crack spread averages $15 per barrel this year, he said, "The airlines would save close to another $4 billion annually."

What it means

The savings come at an opportune time. Travel demand has slumped since the year began, which is taking a toll on airline revenues.

The airlines have been slashing fares to attract more travelers and have also been reducing schedules, parking jets and cutting jobs.

"It’s certainly welcome relief at a time when there’s a hole in our revenue picture," Heimlich said.

The spread could spike in the future, he warned, particularly if summer hurricanes damage or shut down Gulf Coast refineries. That’s what happened after Hurricanes Ike and Katrina, and the crack spread soared, briefly topping $60 per barrel.

Still, Heimlich said, "We’ll enjoy it while we have it, and take every penny we can get."

 


 

Delta takes its time to get Northwest merger right

By Marilyn Adams, USA TODAY
March 10, 2009

Almost a year after Delta Air Lines announced it would buy Northwest Airlines and become the world's biggest carrier, fliers will soon start seeing the first outward signs that the two carriers are becoming one.

By the end of March, all the "Northwest" signs at Northwest's longtime hubs in Minneapolis, Detroit and Memphis will be replaced by Delta (DAL) signs and Delta's bright red triangular logo. And pilots, flight attendants, ticket agents and gate agents of both airlines will be outfitted alike in Delta uniforms.

But for two major airlines that have operated separately for decades with different route structures, corporate cultures and passenger policies, the hard stuff — such as merging two giant and complex reservations systems — will not happen until next year, Delta executives say.

"When airlines merge, they have to think about legal issues, communications, maintenance, real estate and so on," says consultant Jerry Glass, the former human resources chief for US Airways, which merged with America West in 2005. "Every one of those has hundreds or thousands of details that must come together."

Today, the new Delta is a mammoth carrier, with about 6,000 daily departures and 1,000 aircraft at its disposal, including the Delta and Northwest fleets and both carriers' regional affiliates. Publicly, Delta is confident that months of planning by 25 integration teams will avoid mistakes other merging airlines have made, disrupting flights and alienating passengers. But the size of both carriers and the details involved in making them run as one make some bumps almost inevitable.

"It's been pretty much a nightmare for me," Northwest frequent flier Doreen Rosimos of Marlborough, N.H., says of her three recent Delta trips.

She says she bought tickets for the Delta flights on Northwest's website, www.nwa.com, but Delta had no record of the tickets when she arrived at the airport.

"I had to truck all the way down to the Northwest desk, get it fixed, then trek back to the Delta desk to get a Delta boarding pass," she says.

Others have had a smoother experience. Bruce Dickie, a Madison, Wis.-based sales representative and Northwest frequent flier, says he has "actually experienced a few positives."

"When flying on Delta, I now get an automatic upgrade to first class," he says.

Websites separate for now

Delta officials don't plan to fully merge the two airlines' websites and ticket reservations systems until next year, when they hope to qualify for a single airline operating certificate from the Federal Aviation Administration. Likewise for separate operations control centers that currently direct both airlines' flights 24/7 from different parts of the country.

Airport ticket counters, gates and airport clubs won't be fully integrated until next year. Painters are busy replacing "Northwest" with "Delta" on Northwest jets; it will take many months to repaint and redecorate Northwest's jetliners, unify onboard menus and seatback safety cards, etc.

"What we don't want is people getting tangled up in a mishmash," says Tim Mapes, Delta's marketing chief.

The later deadlines for the hard stuff are deliberate. When US Airways and America West were completing their merger and converting to one reservations system in March 2007, the system crashed. Automated airport kiosks failed, delaying flights nationwide and frustrating customers. It's a type of failure Delta and Northwest want to avoid.

More capacity cuts likely

The recession, and reduced spending on travel in general, are big driving factors in many of these decisions. For example, Delta announced in December plans to shrink its combined system 8% to 10% by year's end because fewer people are flying.

Last week, however, Delta said its February passenger traffic fell 9.2% from a year ago; Northwest passenger traffic fell 13.6%.

Although both airlines have been cutting flights, passenger traffic is falling faster than the airlines are shrinking — a trend across the industry. As a result, they and other big carriers probably will have to slash more capacity soon.

Still, Delta and Northwest are working to forge a new single network that will be competitive going forward. So even as Delta cuts flights, the contraction is not uniform across the system. Delta is shrinking dramatically in some places and growing in others where it's profitable to do so.

By June, joint Delta-Northwest flying capacity from New York John F. Kennedy Airport will grow nearly 5% year over year, according to flight schedules published by OAG-Official Airline Guide. Flying capacity from Delta's biggest hub, Atlanta, will increase more than 3%. The Northwest hubs at Detroit, Minneapolis and Memphis will all shrink.

Flying from Delta's Cincinnati hub — which has been shrinking for years — will fall another 25%, making it about the size of Northwest's Memphis hub.

But Delta will keep growing in New York and Atlanta, partly because it's expanding international flying from those gateways. In June, Delta launches its first non-stop flight from New York Kennedy to Tokyo Narita, a Northwest hub.

Merger raises aircraft choices

Behind the scenes, the airlines are methodically shifting planes around, putting Northwest jets on Delta routes and Delta jets on Northwest routes to better fit airplanes to passenger demand and distance.

Robert Cortelyou, Delta's senior vice president for network planning, says the addition of Northwest's fleet lets Delta choose from a bigger menu of jets seating 175 to 400 fliers. "We can move these aircraft around the globe — from the Pacific to Africa, for example — and put them in the right spot," he says.

On 13 international routes this summer, Delta will change aircraft: It will fly Northwest Boeing 747 widebodies on flights between Atlanta and Honolulu and between Atlanta and Tokyo, while putting smaller jets on flights to some European cities such as Amsterdam.

As the integration inches along, loyal Northwest and Delta fliers in small and midsize U.S. cities fret about how the merger as well as the economy will affect the flight choices they have come to depend on.

Frequent Northwest flier Dickie, for example, worries the merger will shrink the options he has from Madison, Wis. Today, there are flights on either Northwest or Delta to Minneapolis, Detroit, Atlanta, Cincinnati, Memphis and Reagan Washington National Airport.

"I can't see this number of choices lasting very long," Dickie says.

 


 

Unions look to advance contract negotiations
by Dawn Gilbertson - Mar. 6, 2009 05:01 PM
The Arizona Republic


The pilot and flight-attendant unions at US Airways are growing increasingly frustrated with the lack of progress in contract talks that began more than three years ago, and their restlessness is showing.

The latest evidence came Thursday when the union representing flight attendants for the former America West Airlines asked the National Mediation Board to resume mediated talks that were put on hold when the America West-US Airways merger was announced in 2005.

It comes on the heels of a move by the airline's new pilots union to bring in an outsider to help speed negotiations it described as a quagmire.
It all adds up to a major unresolved merger issue for US Airways that no one inside or outside the company expected to drag on for this long. US Airways officials said they do not comment on the substance of negotiations.

Until the Tempe airline has joint contracts covering pilots and flight attendants from both America West and the old US Airways, US Airways cannot combine flight crews and thus fully bring the two airlines' operations together. That is inefficient and has fostered an East vs. West mentality in the workplace from the beginning. Wall Street analysts routinely bring up the labor woes as a risk for investors.

The latest moves are likely to further complicate matters.

The America West flight-attendant talks, if approved, would be separate from long-running negotiations between the Association of Flight Attendants and the company for a joint contract that would cover the 2,400 flight attendants from America West and the 4,500 from the old US Airways.

Lisa LeCarre, president of the America West unit of the AFA, said the union decided to seek to reopen the old talks after the company's latest counterproposal on crew scheduling.

She called the proposal "very, very inadequate."

"It was almost as if 10 months of negotiations (on this topic) had been eradicated and we were back to Square 1," she said.

LeCarre said the America West flight attendants have not had a pay increase in six years. The pay disparity with their counterparts at US Airways runs as high as 40 percent, she said. The flight attendants can't afford to wait any longer for a joint contract, LeCarre said. She said the union was down to the "very nitty-gritty" of a contract when the merger was announced.

Mike Flores, president of the US Airways unit of the AFA, said the decision to request separate America West talks was a joint decision. The hope is that it will put pressure on US Airways to speed up the joint talks because they won't want to deal with dual negotiations.

"We see this a way of moving the merged contract along at a faster pace," he said.

The US Airline Pilots Association, which represents more than 5,000 America West and US Airways pilots, late last week asked the company to jointly request a "facilitator" to aid talks.

"We're in negotiations now for a total of 39 months . . . and we're not getting anywhere," spokesman Arnie Gentile said.

He said the union is particularly frustrated that US Airways will not agree to a set of competitors that can be used to benchmark pilot pay and benefits in the negotiations.

In contrast, he said, the airlines' executive compensation is tied in part to its performance relative to its peer group, and the airline compares itself to five other major airlines in touting its No. 1 on-time performance.

"They can't compare us to anybody, yet they compare themselves to everybody," Gentile said.

Part of the delay in the pilot talks is in part the union's fault.

Negotiations didn't occur for nearly a year because of major disputes between the America West and US Airways pilots over a seniority list. USAPA was formed to overturn a list issued by an arbitrator, and it was successful in ousting the incumbent union, the Air Line Pilots Association, nearly a year ago.

Negotiations did not resume until that matter was settled. Seniority still hasn't been settled and is the subject of a lawsuit that a group of America West pilots filed against the union. It is due to go to trial next month.

Gentile admits the pilots weren't negotiating for several months but said the company had two years prior to that to get a joint pilot contract done.

"What Delta did in several months (negotiating a joint contract covering Delta and Northwest), our management didn't accomplish in the first two years," he said.

 

 


 

AFA-CWA Asks National Mediation Board to Recommence Mediation for Former America West Flight Attendants

PHOENIX, March 5 /PRNewswire-- America West flight attendants, represented by the Association of Flight Attendants-CWA (AFA-CWA), today requested that the National Mediation Board (NMB) resume Section 6 mediation in order to reach an agreement which would cover the Phoenix-based flight attendants. After the America West merger with US Airways in 2005, AFA-CWA has spent three years attempting to negotiate a single contract for all flight attendants, but those talks have been stalled by US Airways management's failure to agree to reasonable proposals to merge the agreements.

"While US Airways CEO Doug Parker states that we are now one company, wages for our flight attendants still differ up to 40 percent with our co-workers on the East," said Lisa LeCarre, AFA-CWA America West President. "America West flight attendants and our US Airways flying partners perform the same safety duties and wear the same uniform. It is time that Mr. Parker starts to honor his word instead of stalling the process for thousands of employees."

Prior to the merger, America West flight attendants spent considerable time negotiating a new contract, but those negotiations were paused with the expectation that US Airways would reach a merged contract with both groups. Flight Attendants at America West have not received general wage increases since November 2002. US Airways management has repeatedly rejected proposals by AFA-CWA for interim parity increases for West flight attendants. Flight attendants from US Airways East are receiving modest wage snap backs that were negotiated into their 2004 concessionary contract so the gap in pay parity between East and West flight attendants continues to increase each year.

"The current America West contract, negotiated for a five year duration, is now ten years old. Our flight attendants have gone six years without any wage increases. We simply can not continue to drag along these negotiations with no relief in sight," said LeCarre.

America West flight attendant negotiations began in February 2004, with the US Airways merger following in September 2005. Negotiations for a single, merged flight attendant agreement have been ongoing since February 2006.

For over 60 years, the Association of Flight Attendants has been serving as the voice for flight attendants in the workplace, in the aviation industry, in the media and on Capitol Hill. More than 55,000 flight attendants at 20 airlines come together to form AFA-CWA, the world's largest flight attendant union. AFA is part of the 700,000-member strong Communications Workers of America (CWA), AFL-CIO. Visit us at www.afanet.org.

 


 

US Airways: Little room for more downsizing
Tue Mar 3, 2009 10:39am EST

NEW YORK (Reuters) - US Airways Group has little room for more downsizing because it is near the minimum capacity required by its pilots' contract, the airline's chief executive said on Tuesday.

Speaking by phone at the Reuters Travel and Leisure Summit in New York, Doug Parker said the carrier still needs consolidation, although tight credit markets make financing for mergers hard to find.

Parker said US Airways is planning for slow travel demand through 2009 amid the economic recession. He said, however, that the U.S. airline industry is not asking for a government bailout.

(Reporting by Kyle Peterson, editing by Dave Zimmerman)

 


 

Chesley "Sully" Sullenberger To Congress: My Pay Has Been Cut 40 Percent In Recent Years, Pension Terminated

AP   |  JOAN LOWY and MICHAEL J. SNIFFEN   |   February 24, 2009 12:48 PM

The air traffic controller who handled Flight 1549 thought ditching in the Hudson River amounted to a death sentence for all aboard. Now the veteran pilot who pulled off the ditching safely says harsh pay cuts are driving experienced pilots from the cockpit.

"People don't survive landings on the Hudson River," 10-year veteran controller Patrick Harten told a House subcommittee Tuesday in his first public description of how he tried to land the jetliner that lost power in both jets when it hit Canada geese after takeoff from New York's LaGuardia Airport.

US Airways flight 1549 Capt. Chesley B Sullenberger III, seated, center, and First Officer Jeffrey B. Skiles, seated, right, receive a standing ovation on Capitol Hill in Washington, Tuesday, Feb. 24, 2009, as they prepared to testify before the House Transportation and Infrastructure Committee.


"I thought it was his own death sentence," Harten said of the moment when US Airways pilot Chesley "Sully" Sullenberger radioed that he was going into the river. Defying the odds, Sullenberger safely glided the Airbus A320 down and all 155 people aboard survived the Jan. 15 water landing.

Sullenberger, a 58-year-old who joined a US Airways predecessor in 1980, told the House aviation subcommittee that his pay has been cut 40 percent in recent years and his pension has been terminated and replaced with a promise "worth pennies on the dollar" from the federally created Pension Benefit Guaranty Corp. These cuts followed a wave of airline bankruptcies after the Sept. 11, 2001, terrorist attacks compounded by the current recession, he said.

"The bankruptcies were used by some as a fishing expedition to get what they could not get in normal times," Sullenberger said of the airlines. He said the problems began with the deregulation of the industry in the 1970s.
The reduced compensation has placed "pilots and their families in an untenable financial situation," Sullenberger said. "I do not know a single professional airline pilot who wants his or her children to follow in their footsteps."
The subcommittee of the House Transportation and Infrastructure Committee heard from the crew of Flight 1549, the air traffic controller who handled the flight and aviation experts to examine what safety lessons could be learned from the accident.

Sullenberger's copilot Jeffrey B. Skiles said unless federal laws are revised to improve labor-management relations "experienced crews in the cockpit will be a thing of the past." And Sullenberger added that without experienced pilots "we will see negative consequences to the flying public."

Sullenberger himself has started a consulting business to help make ends meet. Skiles added, "For the last six years, I have worked seven days a week between my two jobs just to maintain a middle class standard of living."
Controller Harten riveted the hearing with his account of the 3.5 minutes during which he spoke with the crippled jetliner after the bird strike at an altitute of 2,750 feet.

When Sullenberger said he couldn't make it either back to LaGuardia or to Teterboro Airport in New Jersey and would ditch in the the Hudson River that separates New York and New Jersey, Harten testified, "I believed at that moment I was going to be the last person to talk to anyone on that plane alive."

But Sullenberger delicately glided the jetliner into the river in one piece near ferry boats that picked the passengers off the planes wings before it sank in the icy waters.

Harten, who has spent his entire career at the radar facility in Westbury, N.Y., that handles air traffic within 40 miles of three major airports, struggled vainly to help get the airliner safely to a landing strip.

Making lightning-quick decisions, Harten communicated with 14 other entities in the three minutes after the bird strike as he diverted other aircraft and advised controllers elsewhere to hold aircraft and clear runways for 1549.
First, Harten tried to return the plane to LaGuardia Airport, asking the airport's tower to clear runway 13. But Sullenberger calmly reported: "We're unable."

Then Harten offered another LaGuardia runway. Again, Sullenberger reported, "Unable." He said he might be able to make Teterboro Airport in New Jersey.

But when Harten directed Sullenberger to turn onto a heading for Teterboro, the pilot responded: "We can't do it .... We're going to be in the Hudson."

"I asked him to repeat himself even though I heard him just fine," said Harten. "I simply could not wrap my mind around those words."

At that moment, Harten said he lost radio contact with flight and was certain it "had gone down."
Afterward, Harten said he told his wife, "I felt like I had been hit by a bus."

NTSB investigators have said bird remains found in both engines of the downed plane have been identified as Canada geese.

Sullenberger and Skiles said anyone who's spent much time in cockpits has encountered bird strikes but that this one was exceptionally severe in knocking out both engines. Some gulls don't even dent the airplane, Skiles said, but this "was a bigger bird than I've ever hit before."

The bird problem has been growing, said John E. Ostrom, chairman of the Bird Strike Committee-USA and a manager at the Minneapolis-St. Paul International Airport. Since 1990, the number of Canada geese that live year-round in the country rather than migrating has grown from 1 million to 3.9 million and the population of 24 of the 36 largest bird species has increased, Ostrom testified.

The crew and passengers of a helicopter that crashed en route to an oil platform on Jan. 4 weren't as lucky. The National Transportation Safety Board reported Monday that investigators have found evidence birds were involved in the accident near Morgan City, La., that killed eight of nine people aboard.

___

On the Net:

House Transportation and Infrastructure Committee: http://transportation.house.gov/

 


 

Airline Finances May Hurt Safety, Sullenberger Says


Bloomberg News
By Angela Greiling Keane

Feb. 24 (Bloomberg) -- The pilot hailed for landing a disabled jet on New York’s Hudson River last month said cost cutting in the U.S. airline industry may jeopardize passenger safety and the quality of aviators that carriers hire.

“I am worried that the airline-piloting profession will not be able to continue to attract the best and the brightest,” Chesley B. “Sully” Sullenberger III, a captain at US Airways Group Inc., told the lawmakers in testimony today.

Airlines have been paring jobs to cope with a drop in travel demand during the recession, and Sullenberger said his pay has been trimmed 40 percent in recent years. The Jan. 15 ditching, in which all aboard the plane survived, shows the need for training and experience that the cutbacks may erode, Sullenberger said.

There could be “negative consequences to the flying public and to our country” if planes are piloted by less experienced and “not sufficiently” valued pilots, he said.

“The current experience and skills of our country’s professional airline pilots come from investments made years ago when we were able to attract the ambitious, talented people who now frequently seek lucrative professional careers” elsewhere, Sullenberger said.

Sullenberger and the crew recounted the crash landing for Congress, as did Patrick Harten, the air-traffic controller handling departures from New York’s LaGuardia airport when the plane went down.

Importance of Training

Harten said he thought the jet and its passengers were lost when Sullenberger announced he would attempt a water landing.

“People don’t survive landings on the Hudson River,” Harten said. “I believed at that moment I was going to be the last person to talk to anyone on that plane alive.”

The US Airways jet, carrying 155 people, lost power after takeoff. The National Transportation Safety Board said this month that Canada-goose remains were found in both engines, supporting statements by the pilots that the plane hit birds. NTSB member Steven Chealander said the agency may never know how many birds the plane struck.

“This incident demonstrates the importance of training and preparation,” said House Aviation Subcommittee Chairman Jerry Costello, an Illinois Democrat. Costello and other members of the panel praised the crew for its actions on the Hudson.

Sullenberger, 58, has worked at Tempe, Arizona-based US Airways since 1980, according the airline’s Web site. He is a former Air Force fighter pilot.

“You represent the very best of aviation,” said James Oberstar, House transportation committee chairman and a Minnesota Democrat. “Lindbergh would be proud of you.”

Pay Cuts

US Airways filed for Chapter 11 bankruptcy in 2002 and exited court protection in 2003. It filed for bankruptcy a second time in September 2004, and emerged in September 2005 through its merger with America West Holdings Corp.

US Airways terminated its pension plans in 2005, before leaving bankruptcy, and the Pension Benefit Guaranty Corp. became trustee for the plans. The airline secured more than $1.1 billion a year in job, wage and benefit cuts from its unions while in bankruptcy.

“My pay has been cut 40 percent,” Sullenberger said. “My pension, like most airline pensions, has been terminated and replaced by a PBGC guarantee worth only pennies on the dollar.”

Pilot Earnings

A US Airways captain at top pay scale and flying an Airbus SAS A320 earns base pay of at least $125 an hour and flies a minimum of 72 hours a month, for $9,000 a month, according to airlinepilotcentral.com, which helps pilots with career advancement. A 12-year first officer on the same aircraft earns $85 an hour, or $6,120 a month. Pilots flying larger aircraft on international routes are paid at higher rates.

The 9 biggest U.S. carriers moved last year to ground 460 jets and cut 26,000 jobs as oil prices surged to a record. The price of jet fuel, which is refined from crude, has plunged 72 percent since a July peak, spurring analysts’ estimates for a collective 2009 profit that would be the industry’s first in a recession.

Separately, a former Transportation Department inspector general said U.S. regulators have shown “bureaucratic inertia” in failing to implement aviation-safety recommendations, including those on turboprops and icing.

Mary Schiavo, now an attorney for a group of safety advocates who plan to sue the department’s Federal Aviation Administration, said regulators have stalled on measures that could have helped prevent crashes. The criticism, which the agency disputes, comes less than two weeks after a Pinnacle Airlines Corp. plane went down in icy conditions near Buffalo, New York, killing 50 people.

The suit seeking to compel the FAA to act on National Transportation Safety Board recommendations will be filed today in federal court in Washington, Schiavo said yesterday.

To contact the reporter on this story: Angela Greiling Keane in Washington at agreilingkea@bloomberg.net


Last Updated: February 24, 2009 14:43 EST

 


 

Before Congress, Air Traffic Controller recalls Sully's Hudson heroics

BY Richard Sisk
DAILY NEWS WASHINGTON BUREAU
Tuesday, February 24th 2009, 11:27 AM

U.S. Airways Captain Chesley Sullenberger and the flight crew of Flight 1549 along with Air Traffic Controller Pat Harten testify before Congress.

WASHINGTON -- LaGuardia Air Traffic Controller Pat Harten dramatically recalled Tuesday his stunned reaction to Captain Sully's calm and professional announcement that he was going to put his airliner down in the Hudson.

"I had never worked an aircraft with zero thrust capabilities. I simply couldn't wrap my mind around those words," Harten told the House Aviation subcommittee.

"People don't survive landings on the Hudson River," Harten said. "I thought it was his own death sentence."

But Capt. Chesley "Sully" Sullenberger glided the USAirways Airbus A320 nose-up into the river after it collided with birds and lost power in both engines Jan. 15. All 155 people aboard survived in the "Miracle of the Hudson."

Sullenberger, sitting at the witness table, listened intently to Harten's emotional testimony. "I'm greatly touched by it," he said.

In his own remarks, Sullenberger's lent his hero status to the cause of pleading for reform of the airline industry. He condemned the bottom-line mentality of the airlines that he said was driving experienced pilots such as himself out of the business.

"I do not like what has happened," Sullenberger said. "They have used airline employees as an ATM," he said, charging that his own pay has been cut 40% and while his pension was terminated.

 


 

Hero pilot: Airlines in shambles
Capt. Chesley 'Sully' Sullenberger says airline industry can no longer attract the 'best and the brightest.'

February 24, 2009: 12:21 PM ET

WASHINGTON (CNN) -- Capt. Chesley "Sully" Sullenberger, who has been heralded as a hero for successfully landing a crippled US Airways flight in the Hudson River, told U.S. lawmakers Tuesday that the state of the airline industry is in disarray.

"Americans have experienced huge economic difficulties in recent months, but airline employees have been experiencing those challenges and more for eight years," Sullenberger said. "We've been hit by an economic tsunami, September 11, bankruptcies, fluctuating fuel prices, mergers, loss of pensions, and revolving door management teams who have used airline employees as an ATM."

Sullenberger testified before a House subcommittee along with others involved in last month's emergency landing of Flight 1549 in the Hudson River. All five crew members and 150 passengers survived.

Sullenberger expressed concern that the economic decline has hit the airline industry so hard that "the airline piloting profession will not be able to continue to attract the best and the brightest."

"I do not know a single professional airline pilot who wants his or her children to follow in their footsteps," he said.

"The current experience and skills of our country's professional airline pilots come from investments made years ago when we were able to attract ambitious, talented people who now frequently seek professional careers elsewhere." 

 


 

Co-Pilot: Hudson River Landing 'Only Option'

Ted Reed
TheStreet.com
02/09/09 - 12:05 AM EST

CHARLOTTE, N.C. -- Like Captain Chesley "Sully" Sullenberger, First Officer Jeff Skiles says he was too busy to worry as their Airbus A320 headed for the Hudson River, unable to go anywhere else with its engines out.

A 32-year pilot with 21 years at US Airways, Skiles, 49, handled the flight's takeoff on Jan. 15. But once the engines failed because of a bird strike, he followed procedure and handed off control to Sullenberger, saying "your aircraft."

His task then was to follow a checklist for dual engine failure. The aircraft, as the entire world knows, made a successful river landing, enabling the crew and all 150 passengers to survive.

"When we first hit the birds, it was like a physical shock," Skiles said Sunday, in an interview with TheStreet.com, his first after appearing on "60 Minutes" earlier in the evening. "But being trained airline pilots, we started doing what we do, which in my case was running a checklist.

"My reaction was disbelief. I was thinking this can't be happening. But you don't get scared. That's not the way pilots think. You always think there is something you can do.

"I carried out the checklist in the hopes of restarting the engines," Skiles said. "Obviously, that wasn't possible. It was a three-page checklist, and I never got past the first page."

Like Sullenberger, who was talking to air traffic control, Skiles quickly became aware that landing in the Hudson was the best -- perhaps the only -- option. "We discussed briefly going back to LaGuardia, which was on Sully's side of the airplane, but it was too far," he said. "Teterboro was off to the right -- Sully asked the controller about it, and they said it was at 12 o'clock. I looked out there, too. But Sully said 'It's too far away,' and I concurred with that.

"It became clear the river was the only option we had. We felt the river was half a loaf, obviously better than nothing at all. We knew we could do something there. But I wouldn't say we talked a lot. There was no time. Even what I was doing required some input from Sully, and he was overloaded with what he was doing. We were both pretty much task saturated."

The first thing that struck Skiles after the crash was how quickly he found himself getting assistance from his union, the U.S. Airline Pilots Association. Only eight months old, USAPA replaced the long-established Air Line Pilots Association at US Airways following a 2005 merger with America West Airlines. A proposed seniority ruling, backed by ALPA, would have limited career prospects for many veteran US Airways pilots such as Skiles.

"The USAPA response was unbelievable," Skiles said. "There were people there within 20 minutes, and by that night there were 20 union volunteers. They all dropped what they were doing to help us, and some stayed over a week. I cannot imagine going through this experience without USAPA."

One of the most important things union safety officials did, Skiles said, was to describe the impact of post-traumatic stress, which took its toll on every one of the five crew members. A principal symptom is an inability to sleep. "None of us slept the first night," Skiles said. "The second night I got maybe an hour, I kept running it through my mind, even though this was a good outcome. I was doing that for a week and a half afterwards, reliving the whole thing. It was at least two weeks before I could get a good night's sleep."

A resident of Madison, Wis., Skiles will seek to return to a normal life after several more TV appearances, ceremonies and interviews. He intends to continue working at US Airways, and like nearly all first officers, his goal is to someday make captain. "I have been a co-pilot now for 22 years," he said. "The last thing I want is to be a co-pilot for another 16." His chance is at least five years off, he said.

Skiles said the crash produced a number of heroes. "A lot of people don't really understand there is a whole crew involved in this -- two pilots, three flight attendants, the passengers themselves, and of course, those guys in the boats were the ones who got us out. A lot of people deserve credit for the successful outcome that occurred."

USAPA spokesman Arnie Gentile said the crash made clear the high standards of the veteran pilots and flight attendants who staff the airline industry. Those standards have prevailed despite industrywide cost-cutting over the past eight years. "For the whole country, it's been economic hard times for several months, but airline employees have been under pressure since Sept. 11 (2001)," Gentile said. "Nevertheless, these crews have stuck to being professionals."

 


 

UN drawing up new rules to combat pilot fatigue


Associated Press
By SLOBODAN LEKIC – Jan 21, 2009

BRUSSELS, Belgium (AP) — The U.N. agency that sets standards for air transport is drawing up new safety rules to take into account a silent killer: Pilot fatigue.

Over the past 15 years, nearly a dozen fatal crashes and numerous close calls have been blamed on pilot fatigue, whose effects safety experts compare with driving drunk.

Pilot fatigue was a key cause of one of the deadliest crashes in aviation history — when a Korean Air Boeing 747 heading to Guam plowed into a hillside in 1997 and killed 228 people.

Air safety organizations and pilot unions have for years been pressing for tighter regulation and enforcement of working hours and rest periods. They say scientific research has identified pilot fatigue as a factor in a fifth of all fatal crashes.

The International Civil Aviation Agency is now preparing to abandon current rules based on flight time limitations in favor of a completely new concept known as "fatigue risk management systems," which draw on the latest scientific research into sleep and other factors affecting crew performance.

Fatigue is defined as a decreased ability to work due to mental or physical stress. Symptoms can include longer reaction times, short-term memory loss, impaired judgment and reduced visual perception.

The new guidelines are due to be reviewed in spring and released later in the year, spokeswoman Sue-Ann Rapattoni said.

Safety experts expect the new systems to focus on closely tracking flight crew duty times as well as the duration and quality of rest periods, sleep cycles, nutrition and possible illnesses.

"The aviation business has pretty much outgrown the arbitrary flight time limits of the past (and) it is time to take a more thoughtful approach that uses what we know about fatigue to make the system better for everybody," said William Voss, president of the Flight Safety Foundation from Alexandria, Virginia.

Pilots complain that mandated rest periods are now only calculated according to the time spent in the air rather than total time on duty. A pilot's daily schedule might include only a short period of actual flying, but 12 or 14 hours of total time on duty — including layovers, delays and so on. Rosters sometimes call for a crew to work three or four straight days in this way.

Furthermore, crew rest periods often include transit time to and from hotels and meal times, so that a nine-hour rest period could allow for only about six hours of sleep.

Patrick Smith, a U.S. based-airline pilot and aviation writer, says fatigue is a particular problem among regional carriers, where daily schedules can be brutal and layovers are often at the minimum legal duration. In contrast, long-haul passenger flights carry bigger crews and pilots take scheduled breaks, often in comfortable rest quarters.

Pilots have proposed using simple measures such as cockpit naps to combat fatigue. Some national regulations already allow one pilot to nap while the other works during cruise, so that both are alert when landing.

Capt. Gavin McKellar, chairman of the accident analysis committee of the London-based International Federation of Airline Pilots' Associations, cited the Korean Airlines crash as an example of cumulative fatigue. Before the flight, the pilot had flown from Seoul to Australia and back, to Hong Kong and back and then on to Guam, all with only a few hours of rest, he said.

"Chronic fatigue is a factor in causing accidents and incidents much more than it is given credit for," McKellar said. "Its debilitating effects are just as, if not more, potent than alcohol."

In a 2004 crash in Missouri that killed 13 people, a National Transportation Safety Board investigation found the crew's tiredness after spending 14.5 hours on duty had "likely contributed to their degraded performance." And in their report on an accident in Halifax, Canada in 2004, in which seven people died, Canadian investigators concluded that the pilot had typed incorrect information into his plane's computer after spending 19 hours on duty.

Air transport regulators around the world have been criticized for being too lenient with airlines and not enforcing regulations that address pilot fatigue until a crash occurs.

Many carriers in the United States, Europe and Asia, frequently make rosters for crews based on the upper limit of flying time for a pilot, said Philip von Schoppenthau, secretary-general of the Brussels-based European Cockpit Association, a continentwide pilots' union.

In Europe, for instance, current flight time regulations allow for a maximum duty period of 13 hours. Even this can be extended by an hour twice a week, according to a guide issued by the European Aviation Safety Agency.

"I certainly wouldn't want to be a passenger on the last flight of a pilot who is on the end of his third consecutive 60-hour duty week," von Schoppenthau said.



 

How Sullenberger Really Saved US Airways Flight 1549

US News & World Report
February 03, 2009 10:15 AM ET | Rick Newman

When airplanes crash, it’s usually because a bunch of unexpected things go wrong all at once, or one after the other. Obviously something dramatic went wrong with US Airways Flight 1549, which lost power in both engines and crash-landed on the Hudson River on January 15. But a lot went right, too.

Capt. Chesley Sullenberger has earned plaudits for “heroism,” but that oversimplifies what it took to land the crippled Airbus A320 and get all 150 passengers off safely, before the plane sank. Here are some of the other factors that helped everybody aboard Flight 1549 survive:

Thorough training. Sullenberger may be a model aviator, but it wasn’t heroism that brought Flight 1549 down safely. It was rigorous training that’s inbred in the U.S. aviation system. Pilots have to fly for years before they can command an airliner, and even experienced pilots must routinely train in simulators and pass “check rides” at least once a year under the supervision of Federal Aviation Administration inspectors. Pilots sometimes gripe about overzealous FAA inspectors, but the oversight contributes to a culture of accountability and fastidious attention to detail in the cockpit.

For airline pilots, training focuses on dire scenarios, such as the US Airways crew encountered. “Pilots don’t spend their training time flying straight and level,” says airline pilot Lynn Spencer, author of Touching History: The Untold Story of the Drama That Unfolded in the Skies over America on 9/11. “In simulator training, we’re doing nothing but flying in all sorts of emergencies. Even emergencies become just another set of procedures when repeatedly trained.” As more information emerges on the actions of “Sully” and his first officer, Jeffrey Skiles, it seems clear that it was cool, rational decision-making that saved the day. That’s reason enough to lionize the pilots.

A clear division of labor in the cockpit. From the time the engines stopped producing thrust – presumably because they ingested birds – Sullenberger and Skiles had about three minutes before the powerless plane glided back to earth. And the cockpit would suddenly have become an intense environment to work in. Other airplane systems would have been failing, since they’re powered by the engines. Alerts would have been dinging. Two video screens would have been flashing vital aircraft information and checklists of emergency procedures to go through. Once the pilots chose their course, they would have started to prepare for a water landing. All in three minutes.

As captain, it was Sullenberger’s job to figure out where to land the plane. No doubt he considered returning to New York’s LaGuardia airport, where the plane had taken off from, or to another airport, before realizing that the Hudson was his best bet. Meanwhile, it would have been First Officer Skiles’s job to hurry through a set of checklists with procedures for restarting the engines. Pilots train for losing and restarting both engines on a two-engine jet – but usually using high-altitude scenarios, when there’s a lot more drift-down time than three minutes. Had both pilots fixated on restarting the engines, they could easily have waited too long to pick a place to land, and ended up careening through a populated area. Instead, Sullenberger abided by the basic rule of airplane emergencies: First, fly the airplane.

A textbook landing. It appears that Sullenberger landed Flight 1549 on the Hudson much as he would have landed on a runway – but without engine power, and with far less margin for error. “It’s very important in a water landing to fly the aircraft onto the water as slow as possible,” says Don Shepperd, a Vietnam-era fighter pilot and co-author (with the writer of this article), of Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail. “The faster you hit, the more likely the plane will cartwheel or the fuselage will disintegrate.” Too slow, however, and the plane could lose lift and “stall,” causing the nose to pitch down into the water uncontrolled. “Once the decision was made to ditch,” Shepperd says, “it was a magnificent piece of aviation professionalism.”

The water landing was obviously shocking to those on board - yet mild compared to what could have happened. “I believed the impact would be violent but survivable,” wrote one passenger, who happened to be a pilot for another airline. “It was much milder than I had anticipated. If the jolt had been turbulence, I would have described it as moderate.”

Buoyancy. Once in the water, Flight 1549 sank slowly. Until there’s full testimony from the pilots, it’s not clear whether one of them pushed the aircraft’s “ditching” button, which seals some of the plane’s valves and intakes and other openings that could let water into the cabin. But they probably did – the plane obviously floated long enough for everybody to get out. Had the landing ripped a hole in the fuselage, or something else compromised the cabin, the plane could have sunk in seconds, with passengers and crew still trapped inside. Or jet fuel could have ignited, creating a watery inferno.

A competent cabin crew. The pilot tends to get all the glory, but the “Miracle on the Hudson” also required flight attendants who directed passengers to the right exits and kept panicky people calm as they scuttled out the doors. If disciplined training and adherence to procedures is the measure of a hero, then they were as “heroic” as Sullenberger. The only obvious oversight in the whole episode is that many passengers left the plane without grabbing their life vests or flotation devices (seat cushions). The FAA may revise safety procedures so that during a no-notice water landing, there’s some kind of last-minute reminder to do this.

Luck. The whole drama still could have turned tragic, had a bunch of things beyond the pilots’ control not gone their way. But the intangibles worked in their favor. The closest body of water was a smooth river, for instance, rather than a choppy ocean with waves and swells that could have flipped the airplane. Landing on the Hudson in winter meant the jet didn’t have to dodge hundreds of private boats sailing up and down the river. And the plane was quickly surrounded by ferries and other vessels able to pluck freezing passengers off the wings and out of the water. “The winds and waves are always on the side of the ablest navigators,” wrote historian Edward Gibbon in the 18th century. He didn’t know Sully or Skiles. But then again, he did.

Newman is co-author, with Patrick Creed, of Firefight: Inside the Battle to Save the Pentagon on 9-11.

 

 


 

Southwest agrees on raises for pilots, mechanics

By DAVID KOENIG – 20 hours ago

DALLAS (AP) — Southwest Airlines Co. said Friday it agreed to boost pay for its pilots, and the carrier's mechanics ratified a new contract that includes 3 percent annual raises plus bonuses.

Details of the tentative agreement with the Southwest Airlines Pilots' Association were not released, but the company said the deal includes raises and increased retirement benefits.

The contract would be retroactive to 2006, when negotiations began, and run through August 2011. It still faces votes by the union board and membership.

Pilots' union spokesman Neal Hanks said there is "always give and take" in negotiations, and the company got some scheduling changes it wanted.

Pilots at American Airlines and Continental Airlines remain in negotiations with their companies at a time when airlines are losing money because of higher costs and slumping demand for air travel.

Southwest has enjoyed better labor relations than many of its peers. Other airlines laid off workers and cut pay as they struggled to recover from the 2001 recession and terror attacks, but Southwest — at the time, the only profitable major U.S. carrier — did not.

However, Dallas-based Southwest has lost money the last two quarters, breaking a profit string that reached back to early 1991, and for the first time in its 38-year history, it plans to cut capacity this year.

Meanwhile, Southwest's mechanics approved a four-year contract that calls for raises of 3 percent each in 2009, 2010 and 2011 and 1 percent in 2012.

Workers will also get a 3 percent ratification bonus, and those at the top pay scale — about three-fourths of all mechanics — can earn another 1 percent bonus each year if they work enough hours, union national director Louie Key said Friday.

The Aircraft Mechanics Fraternal Association, which represents 2,500 of Southwest's 35,000 employees, said the contract was approved by 60.6 percent to 38.9 percent with some abstentions. It is scheduled to be signed next Tuesday in Dallas.

Chairman and Chief Executive Gary Kelly said in a statement Friday that despite challenging times, negotiators for the company and mechanics produced a "cost-neutral contract" that gives the airline more scheduling flexibility and productivity improvements. He didn't offer details.

The union said the contract includes a side agreement that limits Southwest to operating four maintenance lines outside the United States. One line can service one plane at a time, and maintenance facilities often have several lines.

Key said Southwest has 21 lines overall, with its own employees working three of them and the rest outsourced to vendors in the United States.

Last year, the company planned to outsource some maintenance work to a company in El Salvador. The plan was shelved after Southwest ran afoul of federal safety regulators for failing to perform required inspections for cracks in the bodies of its planes and then flying the planes anyway.

The vote ratified a tentative deal reached last month between the low-cost carrier and replaces a contract that ran through last August. By federal law, labor contracts in the airline industry don't expire but can be changed at the end of their intended term.

Southwest shares fell 22 cents, or 3 percent, to close at $7.03 after sinking to a 52-week low of $6.97 earlier Friday.

 


 

Co-Pilot in Crash-Landing Thanks Union

TheStreet.com

Ted Reed

01/19/09 - 02:44 PM EST

 

CHARLOTTE, N.C. -- In the first public statement from a pilot of US Airways flight 1549, first officer Jeff Skiles has thanked his union for assisting him in the aftermath of the flight's emergency landing on the Hudson River on Thursday.

 

"You all need to know that when you are at the weakest, most vulnerable time of your airline career, USAPA will be there to stand shoulder-to-shoulder with you," Skiles said in a letter to fellow members of the U.S. Airline Pilots Association. A copy of the letter was obtained by TheStreet.com.

 

"I have incurred a debt to these people that can never be repaid. I can only say thank you, and tell you that you have made a difference in my life," Skiles wrote.

 

"On Thursday, many of fellow union members dropped everything, postponed their lives and rushed to New York to aid Sully, Donna, Sheila, Doreen and me in our time of greatest need," he said, referring to pilot "Sully" Sullenberger and the three flight attendants. "Before we even left the ferry dock where the boats dropped us off, Dan Britt (La Guardia vice chairman) was on the scene coordinating with the police."

 

At the hospital, Skiles writes, three union leaders and the USAPA attorney arrived to help out, and later, at the hotel, the union accident investigation team arrived quickly. Skiles personally thanks a dozen union leaders. One was by his side through his entire interview with the National Transportation Safety Board, he writes.

 

Additionally, a representative of the Air Line Pilots Association from United greeted his plane in Chicago and offered to drive Skiles wherever he needed to go.

 

Skiles wrote that so much had occurred following the accident that by Friday, he thought the accident had occurred three or four days earlier.

 

"The enormity of the USAPA effort had made me lose track of time," he said. "It hit me then. I looked around and realized that these people, all of them, had set aside their lives to rush to my aid. They didn't have to do this. They didn't want to spend their days in the LGA Marriott investigating an accident. They all dropped what they were doing and postponed their lives to help me. I cannot tell you how deeply, deeply moved I am by this and how eternally grateful I am to each and every one of them."

 

 

 


 

Pilot was a 'hero,' but are more coming along for airlines to hire?
There are fewer military pilots to draw from, plus economic difficulties in the industry.


The Christian-Science Monitor
By Alexandra Marks | Staff writer
from the January 17, 2009 edition

New York – There's no question that landing a plane with no power on a river in the middle of a city safely is an extraordinary feat.

Captain Chesley "Sully" Sullenberger III, whose smoothly water landing in the Hudson River helped ensure all 155 people aboard US Airways Flight 1549 could walk to safety rightly deserves his status as an instant hero.

But aviation safety experts are adamant that what happened Thursday afternoon was not simply a "miracle" but a product of years of disciplined training, invaluable experience, cutting edge engineering and an aviation culture that rigorously and regularly reviews and updates safety related procedures and engineering.

That's helped flying to become one of the safest modes of transportation in the United States. For the last two consecutive years there have been no fatalities in commercial aviation despite some potentially lethal incidents, like Thursday's water landing.

"How do you make a miracle? There are two things and the first isn't that glamorous: It's the systems analysts who've helped us get much better at understanding what causes accidents and do what needs to be done — in designing aircraft and training people — to prevent them," says William Voss, president and CEO of the Flight Safety Foundation, an international nonprofit organization dedicated to improving aviation safety. "And then there's glamorous bit we saw yesterday: That kind of extraordinary sense of confidence, training, and skill that makes this system so safe. We still haven't given that away."

Captain Sullenberger is a veteran of that aviation culture in which safety has been a major preoccupation. But there's also growing concern within some aviation circles that the airlines recent economic turmoil will make flying a less attractive career to people like Sullenberger.

He began his career as an Air Force fighter pilot, and became a captain when flying for American carriers was still a high-status, high income job. The crack training he received enabled him to become an expert and start an aviation consulting business called Safety Reliability Methods, Inc. as well as to work with both the National Transportation Safety Board and the United States Air Force in working on accident investigations. He is currently a visiting scholar at the University of California's Berkeley's Center for Catastrophic Risk Management.

All of that experience and training served him well in the moment of crisis.

"He did a fantastic job and made all the right choices. He's a really instinctive, well-trained pilot," says Richard Golaszewski, executive vice president of GRA Inc., aviation consultants in Jenkintown, Pa. "But there were a lot of things that happened long before that: Design rules that say how long a plane has to float, training of the flight attendants and pilots. Ditching is something they train for."

Mixed with all of the accolades for Capt. Sullenberger, there's also some concern that the past 8 years of economic turmoil at the airlines during which pilot pay and benefits have been slashed will make it more difficult to attract people of Sullenberger's abilities.

"We still have some exceptionally trained and qualified crews," says a veteran pilot for a major airline who's not authorized to speak with the press. "But the fear is that in the future, because of the loss of quality of life and pay and turmoil that you're not going to attract people of that same caliber. For now at least we're enjoying the experience of people who chose it as a profession when it was still a highly coveted job."

Analysts note there has also been long-term trend of fewer military-trained pilots entering the commercial aviation world. Some contend that's because the job is now less attractive and they worry that this has led to a diminution in the skill and type of training pilots get. But others strongly disagree and say it's just a question of numbers. After the Vietnam War there were simply fewer military pilots being trained, and so fewer people like Capt. Sullenberger were joining the major airlines.

"There's absolutely no evidence I know of to suggest that the people coming from the civilian ranks aren't as qualified as military pilots," says Clint Oster, an aviation economist at Indiana University in Bloomington.

Prof. Oster and other analysts believe aviation still attracts people of high caliber, despite the changes in the job's pay. But there's also some concern about the future.

"There's no question that people feel less attracted to the aviation business because it's not the romantic, highly paid profession that it once was," says Mr. Voss. "But there's still a strong emotional attachment to it and we still see a lot of very positive young people wanting to go into it."

But Voss worries that when the economy recovers and the airlines again become profitable the nation will be facing a shortage of qualified pilots like Capt. Sullenberger.

"When we come out of this economic slow period there's going to be a sudden demand for pilots, and we'll be tested on our ability to put really talented people in these airplanes in sufficient numbers," he says.

 



East took high ground in pilot-union squabble
Editorial by Joe Monda - Jan. 17, 2009 12:00 AM
The Arizona Republic


There are two sides to every story, and this is especially true of the recent Arizona Republic guest column ("AmWest pilots get short end of straw," Opinions, Jan. 6) by 1st Officer Patrick O'Neill concerning US Airways and America West pilot seniority integration.

First and foremost, no West pilot has lost a job to a laid-off (or active) East pilot. US Airways operates as two separate airlines. During the fuel crunch, management reduced more flights in the West because of unprofitable routes, and although the new union's seniority integration proposal would not permit East pilots to take West jobs, Mr. O'Neill proposes that West pilots take East jobs.

At the time of the merger, AmWest was on the brink of its third bankruptcy, and its ATSB (Air Transportation Stabilization Board) loan was due. CEO Doug Parker told employees that West bankruptcy plans included a minimum of 15 percent employee reductions.

US Airways, already in bankruptcy, had raised approximately $500 million for its exit. The strength of the US Airways franchise was validated in the six postmerger quarterly filings when management separated East and West data: East profits were $633 million; West were $11 million.

As for removing the old union, Mr. O'Neill failed to mention that West pilots had previously attempted to remove the same Union (Air Line Pilots Association) that the combined US Airways pilot group recently decertified.

The East-West seniority integration deadlock was the straw that broke the camel's back - ALPA was gone.

East-West pilot relations had further deteriorated as the chairman of the old AmWest pilot union approached management and stated, "West pilots would be outraged" if management paid East pilots equally.

Imagine your union brother preventing equal pay for equal work!

Considering the following facts, one can see why East pilots would not vote for the collective bargaining agreement: 1) Newly hired West pilots being placed ahead of 17-year East pilots who were never laid off and 2) the direct transfer of 2,373 East captain years flying premium-coveted transoceanic routes, to which West pilots had no access.

Imagine a veteran 21-year 1st officer seeing his captain opportunity go to a pilot 17 years his junior after giving up 60 percent of his pay and his entire pension to keep his company viable.

Every union-represented employee group at US Airways used the time-proven union standard "date of hire" to merge employees. The new pilot union used date of hire, but unlike other unions, used potent conditions and restrictions to protect the jobs, pay and working conditions that West pilots brought to the merger.

While Mr. O'Neill speaks of moral bankruptcy, his sole intent is to advance his career at the expense of his senior pilots from the East and take their current positions.

The East pilots remain on the moral high ground and, through the new union, will protect the seniority of all pilots, both East and West.


US Airways East 1st Officer Joe Monda served four years at Eastern Airlines and 21 years at US Airways.

 


 

Obama praises US Airways pilot during phone call
The Associated Press
Friday, January 16, 2009; 8:09 PM

WASHINGTON -- President-elect Barack Obama is joining those heaping praise on the pilot of US Airways Flight 1549, the craft that landed in New York City's Hudson River yet didn't lose a single passenger.

Obama called Capt. Chesley Sullenberger on Friday to tell him how proud everyone is for a heroic and graceful job in landing the damaged aircraft.

Obama's spokesman, Robert Gibbs, says that the president-elect spoke with Sullenberger for about five minutes. Obama also thanked the plane's crew and those on the scene in New York who helped ensure the safety of all 155 people aboard.

President George W. Bush also has called Sullenberger with congratulations.

The plane crashed Thursday after colliding with a flock of birds.

 


 

Bush calls US Airways pilot, praises his bravery
USA Today
January 16, 2009

The White House says President Bush spoke today with Chesley Sullenberger, the US Airways pilot who made an emergency landing on the Hudson River.

"The president praised him for his amazing skills in bringing his plane down safely, for his bravery, and for his heroic efforts to ensure the safety of his passengers and the people in the area," presidential spokeswoman Dana Perino says in an e-mail to reporters.
 


 

Did Speculation Fuel Oil Price Swings?
CBSNews.com
Jan. 11, 2009


(CBS) About the only economic break most Americans have gotten in the last six months has been the drastic drop in the price of oil, which has fallen even more precipitously than it rose. In a year's time, a commodity that was theoretically priced according to supply and demand doubled from $69 a barrel to nearly $150, and then, in a period of just three months, crashed along with the stock market.

So what happened? It's a complicated question, and there are lots of theories. But as correspondent Steve Kroft reports, many people believe it was a speculative bubble, not unlike the one that caused the housing crisis, and that it had more to do with traders and speculators on Wall Street than with oil company executives or sheiks in Saudi Arabia.

To understand what happened to the price of oil, you first have to understand the way it's traded. For years it has been bought and sold on something called the commodities futures market. At the New York Mercantile Exchange, it's traded alongside cotton and coffee, copper and steel by brokers who buy and sell contracts to deliver those goods at a certain price at some date in the future.

It was created so that farmers could gauge what their unharvested crops would be worth months in advance, so that factories could lock in the best price for raw materials, and airlines could manage their fuel costs. But more than a year ago those markets started to behave erratically. And when oil doubled to more than $147 a barrel, no one was more suspicious than Dan Gilligan.

As the president of the Petroleum Marketers Association, he represents more than 8,000 retail and wholesale suppliers, everyone from home heating oil companies to gas station owners.

When 60 Minutes talked to him last summer, his members were getting blamed for gouging the public, even though their costs had also gone through the roof. He told Kroft the problem was in the commodities markets, which had been invaded by a new breed of investor.

"Approximately 60 to 70 percent of the oil contracts in the futures markets are now held by speculative entities. Not by companies that need oil, not by the airlines, not by the oil companies. But by investors that are looking to make money from their speculative positions," Gilligan explained.

Gilligan said these investors don't actually take delivery of the oil. "All they do is buy the paper, and hope that they can sell it for more than they paid for it. Before they have to take delivery."

"They're trying to make money on the market for oil?" Kroft asked.

"Absolutely," Gilligan replied. "On the volatility that exists in the market. They make it going up and down."

He says his members in the home heating oil business, like Sean Cota of Bellows Falls, Vt., were the first to notice the effects a few years ago when prices seemed to disconnect from the basic fundamentals of supply and demand. Cota says there was plenty of product at the supply terminals, but the prices kept going up and up.

"We've had three price changes during the day where we pick up products, actually don't know what we paid for it and we'll go out and we'll sell that to the retail customer guessing at what the price was," Cota remembered. "The volatility is being driven by the huge amounts of money and the huge amounts of leverage that is going in to these markets."

About the same time, hedge fund manager Michael Masters reached the same conclusion. Masters' expertise is in tracking the flow of investments into and out of financial markets and he noticed huge amounts of money leaving stocks for commodities and oil futures, most of it going into index funds, betting the price of oil was going to go up.

Asked who was buying this "paper oil," Masters told Kroft, "The California pension fund. Harvard Endowment. Lots of large institutional investors. And, by the way, other investors, hedge funds, Wall Street trading desks were following right behind them, putting money - sovereign wealth funds were putting money in the futures markets as well. So you had all these investors putting money in the futures markets. And that was driving the price up."

In a five year period, Masters said the amount of money institutional investors, hedge funds, and the big Wall Street banks had placed in the commodities markets went from $13 billion to $300 billion. Last year, 27 barrels of crude were being traded every day on the New York Mercantile Exchange for every one barrel of oil that was actually being consumed in the United States.

"We talked to the largest physical trader of crude oil. And they told us that compared to the size of the investment inflows - and remember, this is the largest physical crude oil trader in the United States - they said that we are basically a flea on an elephant, that that's how big these flows were," Masters remembered.

Yet when Congress began holding hearings last summer and asked Wall Street banker Lawrence Eagles of J.P. Morgan what role excessive speculation played in rising oil prices, the answer was little to none. "We believe that high energy prices are fundamentally a result of supply and demand," he said in his testimony.

As it turns out, not even J.P. Morgan's chief global investment officer agreed with him. The same that day Eagles testified, an e-mail went out to clients saying "an enormous amount of speculation" ran up the price" and "140 dollars in July was ridiculous."

If anyone had any doubts, they were dispelled a few days after that hearing when the price of oil jumped $25 in a single day. That day was Sept. 22.

Michael Greenberger, a former director of trading for the U.S. Commodity Futures Trading Commission, the federal agency that oversees oil futures, says there were no supply disruptions that could have justified such a big increase.

"Did China and India suddenly have gigantic needs for new oil products in a single day? No. Everybody agrees supply-demand could not drive the price up $25, which was a record increase in the price of oil. The price of oil went from somewhere in the 60s to $147 in less than a year. And we were being told, on that run-up, 'It's supply-demand, supply-demand, supply-demand,'" Greenberger said.

A recent report out of MIT, analyzing world oil production and consumption, also concluded that the basic fundamentals of supply and demand could not have been responsible for last year's run-up in oil prices. And Michael Masters says the U.S. Department of Energy's own statistics show that if the markets had been working properly, the price of oil should have been going down, not up.

"From quarter four of '07 until the second quarter of '08 the EIA, the Energy Information Administration, said that supply went up, worldwide supply went up. And worldwide demand went down. So you have supply going up and demand going down, which generally means the price is going down," Masters told Kroft.

"And this was the period of the spike," Kroft noted.

"This was the period of the spike," Masters agreed. "So you had the largest price increase in history during a time when actual demand was going down and actual supply was going up during the same period. However, the only thing that makes sense that lifted the price was investor demand."

Masters believes the investor demand for commodities, and oil futures in particular, was created on Wall Street by hedge funds and the big Wall Street investment banks like Morgan Stanley, Goldman Sachs, Barclays, and J.P. Morgan, who made billions investing hundreds of billions of dollars of their clients’ money.

"The investment banks facilitated it," Masters said. "You know, they found folks to write papers espousing the benefits of investing in commodities. And then they promoted commodities as a, quote/unquote, 'asset class.' Like, you could invest in commodities just like you could in stocks or bonds or anything else, like they were suitable for long-term investment."

Dan Gilligan of the Petroleum Marketers Association agreed.

"Are you saying that companies like Goldman Sachs and Morgan Stanley and Barclays have as much to do with the price of oil going up as Exxon? Or…Shell?" Kroft asked.

"Yes," Gilligan said. "I tease people sometimes that, you know, people say, 'Well, who's the largest oil company in America?' And they'll always say, 'Well, Exxon Mobil or Chevron, or BP.' But I'll say, 'No. Morgan Stanley.'"

Morgan Stanley isn't an oil company in the traditional sense of the word - it doesn't own or control oil wells or refineries, or gas stations. But according to documents filed with the Securities and Exchange Commission, Morgan Stanley is a significant player in the wholesale market through various entities controlled by the corporation.

It not only buys and sells the physical product through subsidiaries and companies that it controls, Morgan Stanley has the capacity to store and hold 20 million barrels. For example, some storage tanks in New Haven, Conn. hold Morgan Stanley heating oil bound for homes in New England, where it controls nearly 15 percent of the market.

The Wall Street bank Goldman Sachs also has huge stakes in companies that own a refinery in Coffeyville, Kan., and control 43,000 miles of pipeline and more than 150 storage terminals.

And analysts at both investment banks contributed to the oil frenzy that drove prices to record highs: Goldman's top oil analyst predicted last March that the price of a barrel was going to $200; Morgan Stanley predicted $150 a barrel.

Both companies declined 60 Minutes' requests for an interview, but maintain that their oil businesses are completely separate from their trading activities, and that neither influence the independent opinions of their analysts. There is no evidence that either company has done anything illegal.

Asked if there is price manipulation going on, Dan Gilligan told Kroft, "I can't say. And the reason I can't say it, is because nobody knows. Our federal regulators don't have access to the data. They don't know who holds what positions."

"Why don't they know?" Kroft asked.

"Because federal law doesn't give them the jurisdiction to find out," Gilligan said.

It's impossible to tell exactly who was buying and selling all those oil contracts because most of the trading is now conducted in secret, with no public scrutiny or government oversight. Over time, the big Wall Street banks were allowed to buy and sell as many oil contracts as they wanted for their clients, circumventing regulations intended to limit speculation. And in 2000, Congress effectively deregulated the futures market, granting exemptions for complicated derivative investments called oil swaps, as well as electronic trading on private exchanges.

"Who was responsible for deregulating the oil future market?" Kroft asked Michael Greenberger.

"You'd have to say Enron," he replied. "This was something they desperately wanted, and they got."

Greenberger, who wanted more regulation while he was at the Commodity Futures Trading Commission, not less, says it all happened when Enron was the seventh largest corporation in the United States. "This was when Enron was riding high. And what Enron wanted, Enron got."

Asked why they wanted a deregulated market in oil futures, Greenberger said, "Because they wanted to establish their own little energy futures exchange through computerized trading. They knew that if they could get this trading engine established without the controls that had been placed on speculators, they would have the ability to drive the price of energy products in any way they wanted to take it."

"When Enron failed, we learned that Enron, and its conspirators who used their trading engine, were able to drive the price of electricity up, some say, by as much as 300 percent on the West Coast," he added.

"Is the same thing going on right now in the oil business?" Kroft asked.

"Every Enron trader, who knew how to do these manipulations, became the most valuable employee on Wall Street," Greenberger said.

But some of them may now be looking for work. The oil bubble began to deflate early last fall when Congress threatened new regulations and federal agencies announced they were beginning major investigations. It finally popped with the bankruptcy of Lehman Brothers and the near collapse of AIG, who were both heavily invested in the oil markets. With hedge funds and investment houses facing margin calls, the speculators headed for the exits.

"From July 15th until the end of November, roughly $70 billion came out of commodities futures from these index funds," Masters explained. "In fact, gasoline demand went down by roughly five percent over that same period of time. Yet the price of crude oil dropped more than $100 a barrel. It dropped 75 percent."

Asked how he explains that, Masters said, "By looking at investors, that's the only way you can explain it."

The regulatory lapses in the commodities market that many believe fomented the rampant speculation in oil have still not been addressed, although the incoming Obama administration has promised to do so.

 



Continental puts $50 million into pensions


Associated Press
January 9, 2009

 

HOUSTON (AP) -- Continental Airlines Inc. said Friday it has contributed $50 million to its defined-benefit pension plans, more than the minimum funding requirement.

 

Continental, along with AMR Corp.'s American Airlines, kept its defined-benefit pension plans for employees this decade while several other so-called legacy airlines eliminated them during bankruptcy proceedings.

 

"Investing in our co-workers' futures is more important than ever in these challenging economic times," Chairman and Chief Executive Lawrence Kellner said in a statement.

 



US Airways Dec. traffic falls but less than rivals

 

Associated Press

Wednesday, January 7, 11:00 am ET

TEMPE, Ariz. (AP) -- US Airways Group Inc. said Wednesday its traffic fell 1.1 percent in December compared with a year earlier, a smaller decline than reported at several other large hub-and-spoke airlines.

Airline President Scott Kirby said he continued to be "cautiously optimistic" about demand for air travel, which has weakened in the recession.

US Airways said miles flown by paying passengers rose to 4.66 billion. At the same time, capacity measured in available seats miles flown, shrank 6.4 percent, to 5.8 billion.

The result was a higher load factor, or average occupancy on planes, which reached a record 80.3 percent, up from 75.9 percent in December 2007.

Those figures excluded results from the Express feeder airline. Including both the main airline and Express, revenue per available seat mile -- a closely watched figure in the airline industry -- rose between 3 and 5 percent over a year earlier, said parent US Airways Group Inc.

Several larger airlines reported sharper declines in December traffic -- 8.2 percent at American, 11.5 percent at United, and 6.7 percent at Continental. All made significant cuts in capacity.

US Airways, citing winter weather conditions, said 72.1 percent of its flights arrived on time and 2.1 percent were canceled in December.

Traffic fell 1.1 on domestic routes and 2.3 percent on trans-Atlantic flights. Traffic to and from Latin America and the Caribbean, which accounted for less than 10 percent of the airline's business, increased 1 percent.

Capacity was reduced most sharply on routes in the United States, Canada, Puerto Rico and the U.S. Virgin Islands, down 8.1 percent compared with a 1.7 percent increase in trans-Atlantic capacity.

For the full year, Tempe-based US Airways said traffic fell 1.1 percent and capacity shrank 2.2 percent. The average plane flew 81.7 percent full compared with 80.8 percent in 2007. The airline carried 54.8 million passengers, a reduction of 5.3 percent from 2007.

Shares of US Airways rose 18 cents, or 2 percent, to $9.24 in morning trading.

 


 


American Airlines loses ruling on pilots' sick pay
Labor Department orders American Airlines to cover sick pay for 2 pilots

 

Associated Press

Tuesday January 6, 2:42 pm ET

FORT WORTH, Texas -- Federal regulators have ordered American Airlines to reimburse two pilots who took leave but were forced to pay back the airline.


The unidentified pilots claimed they were victims of illegal retaliation for saying they were too sick to fly.

The Labor Department's Occupational Safety and Health Administration said Tuesday that American was wrong to reject medical documentation provided by the St. Louis-based pilots.


"A policy that forces pilots to make a choice between flying when they are too sick to do so or being retaliated against violates the law," Charles E. Adkins, OSHA's regional administrator in Kansas City, said in a statement.


American, a unit of Fort Worth, Texas-based AMR Corp. and the nation's second-largest airline, has had a long-running dispute with its pilots' union over the carrier's sick-leave policy.


OSHA also ordered American to provide whistleblower-rights information to employees.


The airline can appeal to the Labor Department. American did not have an immediate comment.


OSHA is best known for enforcing workplace-safety laws but it also investigates complaints filed under a law that protects airline employees who report violations of federal aviation regulations.


 


Some Airlines Fight Proposals on Crew Rest

By ANDY PASZTOR
The Wall Street Journal
JANUARY 5, 2009


Continental Airlines Inc. and AMR Corp.'s American Airlines have filed a joint lawsuit opposing enhanced crew-rest and other safety requirements imposed by U.S. regulators on the longest international flights.


The litigation highlights the difficulties the Federal Aviation Administration faces in devising measures to combat pilot fatigue, particularly on nonstop runs lasting 16 hours or longer. As airlines seek greater productivity from flight crews across the board, tired and sleepy pilots are considered one of the major safety issues confronting U.S. commercial aviation.


That's particularly true on nonstop transoceanic runs or over desolate polar regions. With airlines relying increasingly on such extended global routes, they have been reluctant to raise labor costs by keeping pilots at certain foreign destinations for longer rest periods than currently mandated.


Long before the current tussle, regulations controlling pilot duty times were among the most controversial topics handled by the FAA. Since the 1990s, agency officials have discussed updating rules based on the latest scientific findings about the hazards of sleep deprivation or marathon workdays. Various foreign carriers and regulators have managed to reduce such risks but U.S. airlines and their unions have remained at loggerheads, and the FAA has made only marginal changes over the years.


Continental and American, along with five other U.S. carriers, are challenging both the legality and the safety benefits of enhanced crew rest for so-called ultralong-range flights. The lawsuit seeks to overturn enhanced crew-rest restrictions and other safety measures the agency placed on the flights last fall. These include American's route between Chicago and Delhi, and Continental's flights connecting Newark with Hong Kong and Mumbai.


A lawyer for the carriers didn't have immediate comment. FAA spokeswomen couldn't be reached Sunday and Continental declined to comment beyond the arguments contained in the suit. In the past, Continental officials said they were gathering data and were optimistic a court battle could be avoided over ultralong-range rules. An American spokesman said the agency should have "followed the accepted and required process" of getting comments from industry officials and others, because that produces the safest and best rules. Three months ago, American said it planned to protest some of the FAA's measures.


Delta Air Lines Inc., which negotiated special operating restrictions on similar flights in late 2006, isn't among the plaintiffs. Delta's arrangement allows some of its pilots to be behind the controls for a total of more than the current eight-hour limit during a single workday. In return, Delta agreed to extra-long crew rest periods before takeoff, use of various fatigue-prevention techniques during trips and up to two full days of rest for pilots after arriving overseas. Pilots also are guaranteed extra rest at home to recuperate before starting another trip.


Pilot-union leaders and outside safety experts, who saw the pact with Delta as an important precedent, contend such measures are necessary to maintain the margin of safety so crews aren't too tired to cope with unusual situations or in-flight emergencies. The FAA sought to apply the same types of extra safeguards across the industry. In announcing the Delta agreement, Peggy Gilligan, a senior FAA official, called it "a good example of what we are going to do" with other carriers. In Delta's case, the agency said total time on duty for some pilots on twin-engine, extended-range Boeing 777 jets could stretch to more than 20 hours -- well beyond today's normal limits. Ground delays, bad weather or other problems can lengthen workdays of pilots on both short-range and long-range trips. Delta's current longest flight is from Atlanta to Mumbai, which the company says can take about 18 hours.


But the latest court filing indicates the drive to get voluntary agreements on the longest routes has stalled. Filed before Christmas Eve in the U.S. Court of Appeals for the District of Columbia, the suit asks for a review of "new and different regulatory requirements" which entail "substantial burdens and costs" on carriers.


On flights lasting longer than eight hours, additional pilots typically are assigned to relieve crew members. But when nonstop flights are scheduled for 16 hours or more, even four-person cockpit crews work beyond that traditional eight-hour per day limit.


The agency's decision to bypass formal public comment and federal rulemaking procedures, according to the complaint, illegally deprived airlines and other "stakeholders" of the opportunity to make sure that the additional requirements "promote, and do not unintentionally degrade, safety standards." In addition, the suit contends the agency lacks authority to impose the extra requirements on carriers, partly because broader proposed regulation on pilot scheduling have been pending since 1995.


Continental and American are the lead plaintiffs because they are most affected by the FAA requirements at this point. United Airlines parent UAL Corp., JetBlue Airways Corp., US Airways Group. and two midsize cargo carriers also joined in the suit.


Before releasing its requirements in October, the FAA sought to quell opposition by compromising on some elements. But in the end, the agency opted to require enhanced rest periods similar to those adopted by some foreign carriers -- even when only 10% of the flights on some routes exceed 16 hours.


 

 



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