What JetTrain Corp. described as cutthroat competition in the East and barriers to new entry have forced the Aliquippa, Pa.-based carrier out of business, at least temporarily. JetTrain officials, who suspended all scheduled service at midnight Tuesday, were scheduled to meet last night to consider their options, which could include filing for Chapter 11 bankruptcy protection in the near future or merging with another small airline. The 10-month old carrier was serving Pittsburgh, Philadelphia, Boston and Nashville.
The airlines have much ground to cover on the way to reducing distribution costs after studying reforms for more than two years, said Business Travel Contractors Corp. (BTCC), which is pushing its own brand of a corporate net fare classification. BTCC President Kevin Mitchell, in a white paper, said a 1% reduction in distribution costs would save carriers about $735 million a year. Mitchell cautioned that some airlines' individual moves to give net fares to their best corporate customers could be risky.
FAA fined USAir $450,000 to settle 84 civil penalty cases related to operations, maintenance and security between 1990 and 1996 but said the settlement does not cover several other cases, including hazardous materials cases, that both sides have agreed to handle separately. Signing a consent order and agreeing to pay the fine do not constitute an admission of wrongdoing by the carrier. FAA agreed not to prosecute or maintain civil penalty actions or claims arising from the cases.
United's scheduled traffic rose 4.1% to 10.041 billion revenue passenger miles last month from October 1995, bringing the load factor to 72.2%, a 1.3-percentage-point increase. Capacity increased 2.2% to 13.907 billion available seat miles. Domestic traffic grew 5.3% to 6.295 billion RPMs, Pacific 2.8% to 2.256 billion and Latin America 8.2% to 464 million. Atlantic traffic declined 1.8% to 1.025 billion RPMs. For 10 months, scheduled traffic rose 4.7%, capacity 2.5% and the load factor 1.4 points to 72.4%.
American's response to a DOT enforcement proceeding against its Preference MAAnager program accuses the department of enforcing a rule it wishes had been passed, rather than the one actually adopted. DOT's Oct. 28 action seeks $500,000 and a cease-and-desist order against Preference MAAnager, an add-on program that permits travel agents to bias their Sabre systems to show American and American Eagle flights (DAILY, Oct. 29).
FAA ordered the City of Los Angeles to return to Los Angeles Airport the $31 million that LAX transferred to the city shortly before enactment of the 1996 FAA reauthorization act, Senate Aviation Subcommittee Chairman John McCain (R-Ariz.) said yesterday. Terming the transfer "a clear violation of federal law," McCain said the action "should serve as a strong indication to other U.S. airport sponsors that DOT and the FAA will not tolerate future incidences of unlawful airport revenue diversion."
American and Philippine Airlines have agreed to allow PAL to code share on some American flights to the U.S., beginning in the first quarter. The Manila-Los Angeles/San Francisco segments will be operated by PAL, subject to government approval, and American will operate the flights to Chicago, Dallas/Fort Worth, Miami, New York and Washington Dulles through the two California cities.
From engine contracts to flight attendant uniforms, USAir's transformation into US Airways by early 1997 seeks to project a new image, attract more business travelers, standardize services and, most importantly for the carrier, save significant amounts of cash. Details from USAir's Tuesday announcement (DAILY, Nov. 13) reveal that while most changes will be physical, the more critical conversions will come out of 15 management- employee working groups championed by Rakesh Gangwal, president and chief operating officer.
DOT confirmed yesterday that Secretary Federico Pena will leave office, effective Jan. 20, after deciding that one term in the cabinet is enough. Reporting on a meeting yesterday with President Clinton, Pena said he thanked Clinton "for his interest in having me serve in the cabinet for a second term. But four years ago, when I came to office, I had decided to serve only one term. After 16 years of public service, it's time for me to find new challenges in the private sector."
DOT could address key barriers to new entry - slots and exclusive-use gates - by reallocating some slots through lotteries and giving some preference in airport grant decisions to airports that make gates available to new airlines, the General Accounting Office said. GAO found that at 10 airports that represent 22% of passenger enplanements, new entry is effectively foreclosed through either the slot buy/sell rule or exclusive- use status of a vast majority of gates (DAILY, Nov. 13).
DOT is pursuing open skies aviation agreements everywhere it can, Patrick Murphy, deputy assistant secretary for aviation and international affairs, indicated yesterday in an interview with The DAILY. Murphy reported contacts at various levels in Latin America and Asia, in addition to the high-visibility U.S.-U.K. effort that probably will resume next month, and he added that Jordan signed the U.S.'s first Middle East open skies agreement last week.
DOT granted an emergency exemption to Heavy Lift-Volga Dnepr to use a Russian An-124 to transport two GE90 engines from Seattle to GE's Durham, N.C., facility for a teardown inspection for "suspect hardware." The engines power the increased gross weight (IGW) version of the Boeing 777, and according to Volga Dnepr's application, the emergency flights are "essential to maintain the required certification flight schedule." Volga Dnepr said its An-124, a Russian heavy-lift transport not certificated to operate in the U.S., is the "only option left that would avoid the u
The new air traffic control system for the Delhi airport in India was running at least four months behind schedule at the time of the mid-air collision this week between a Saudi Arabian Airlines 747-100 and a Kazak Airways Il-76. Authorities still are investigating the cause of the accident. For the past three years, Raytheon Company has been modernizing the ATC system for Delhi and Mumbai. The $93 million contract calls for new primary and secondary radars, communications systems, and airport surface radar and automation.
Frontier Airlines flew 59.3 million revenue passenger miles in October, a 119% gain from October 1995, on 152.8% more capacity. The load factor dropped to 50.7% from 58.4% as available seat miles rose to 117.1 million from 46.3 million. Passenger enplanements nearly doubled to 84,263 from 42,368. For the year to date, RPMs rose 156% to 654.2 million, capacity was up 108.6% to 1.091 billion ASMs and the load factor climbed 11.1 percentage points to 60%. Passengers enplaned rose 104.7% to 930,379.
Summary of U.S. National Carriers Systemwide Traffic April 1996 Revenue Average Revenue Passengers Length of Passenger Enplaned % Travel Miles Carriers (000) Change (Miles) (000) American Trans Air 542 15.04 1,500 813,040 Carnival 206 23.38 1,138 234,019
The probable cause of the November 1995 American MD-83 landing accident near Hartford was the flight crew's failure to "maintain the required minimum descent altitude until the required visual references identifiable with the runway were in sight," the National Transportation Safety Board said yesterday. The board said the failure of the approach controller to furnish the crew with a current altimeter setting, and the crew's failure to ask for a more current setting, contributed to the accident.
Summary of U.S. Major Carriers Domestic Traffic April 1996 Revenue Average Revenue Passengers Length of Passenger Enplaned % Travel Miles Carriers (000) Change (Miles) (000) Alaska 874 22.64 805 703,559 America West 1,483 5.83 835 1,238,430
Consolidated Freightways board set Dec. 2 as the date on which the company will spin off its long-haul, less-than-truckload subsidiary, Consolidated Freightways Corp. of Delaware. Consolidated Freightways, the parent organization, will change its name to CNF Transportation and will consist of Emery Worldwide, Con-Way Transportation Services, Menlo Logistics, Road Systems and VantageParts. The company expects revenues of about $3.6 billion a year. CNF has received a ruling from the Internal Revenue Service for a tax-free distribution of shares.
DOT approved interim agreements to waive Warsaw Convention liability limits for injury or death on international flights, deferring action on a number of conditions it proposed Oct. 3 in a show-cause order. The agreements are effective immediately, permitting the recovery of full damages without the former $75,000 limit.
Universal Studios Florida's Web site, at http://www.usf.com, enables consumers to make air travel, hotel and rental car reservations and reserve theme park tickets. Users receive confirmation via e-mail after completing a questionnaire. A Universal City Travel Company reservations agent then calls the traveler within two business days to provide verbal confirmation and answer questions.
Federal Express Chairman, President and Chief Executive Fred Smith has been elected chairman of the IATA Board of Governors and a member of the Chair Committee. The board is the most influential body shaping and controlling IATA's policies, IATA said.
Thanksgiving holiday fares were launched Sunday, matched on Monday and added to in various forms by U.S. airlines. Small new entrant Eastwind cut Thanksgiving fares last Friday, offering tariffs as low as $39 one way in selected markets for travel Nov. 18, 20 and 21 and throughout the holiday period ending Nov. 30. The fares are good on some flights to Greensboro, N.C., Boston, Orlando and Trenton-Mercer Airport in Central New Jersey.
