American Society of Travel Agents took the $86 million settlement in its commission cap suit against six airlines partly because the Justice Department would not permit the court to set commission policies or lift the caps, even if a jury believed the airlines conspired illegally to impose them. Some ASTA members are complaining that the settlement is paltry, given that Delta spends more than $1 billion a year on commissions and is estimated to be saving $100 million a year through the cap. American is said to have cut costs about $150 million.
USAir will spend $335 million more than its competitors would have to as it operates its 86 737s this year, according to Morten Beyer Associates. "The airline is shackled to a corporate culture that precludes any rational cost reduction program," MBA says. "USAir can only pray for the perpetuation of its oligopolistic hold on the high-yield markets of the Northeast, or for its absorption into a large, more cost-effective entity."
DOT has renewed the exemption of Transportes Aereos de Cabo Verde, operating as TACV, to conduct scheduled combination service between Ilha do Sal, Cape Verde, and Boston, at a frequency of one flight per week, using wet-leased aircraft. (Docket OST-95-298)
National Transportation Safety Board set up a command center in Newburgh, N.Y., to investigate a fire that destroyed a FedEx DC-10. The aircraft, en route last Thursday from Memphis to Boston, was diverted to Stewart Airport after the crew reported smoke in the cockpit. The crew escaped unharmed, but flames engulfed the DC-10. Unconfirmed reports said the fire apparently started in a container.
America West has appointed Ronald Aramini senior VP-operations to replace Thomas Dereig, who has resigned. Aramini has been working as president and chief executive of USAir Group subsidiary Allegheny Airlines. He also was VP-operations, senior VP-operations, and president and chief operating officer at Air Wisconsin, and staff VP-system operations and VP-technical services at Continental. Aramini will be responsible for overseeing maintenance and engineering, flight operations, flight dispatch and airport operations.
U.S. District Court Judge Roger Strand declared valid the election of the Teamsters union to represent mechanics at America West and ordered the carrier to begin contract negotiations with the union. The airline challenged the April election, in which the mechanics voted 587 to 135 in favor of Teamsters representation, on grounds that the ballot included 400 mechanics who had been fired in December when the airline outsourced much of its maintenance. The Teamsters noted that 79% of the still-employed mechanics who voted were in favor of representation.
An official of Taiwan's Committee for Aviation and Space Industry said Taiwan and the Czech Republic are close to agreement on co-production of five- to nine-seat AE-270 commercial jets. A 23-member delegation representing several Taiwanese aerospace firms is expected to discuss the venture further when it visits the Czech Republic this week. Sources in Taipei said that, if an agreement is reached, the aircraft most likely will be manufactured in the Czech Republic, with some parts supplied by Taiwan.
International Aviation Club of Washington will hold its monthly luncheon Sept. 17 at 12:30 p.m. at the University Club, International Center, 1800 K St., Washington, D.C. The guest speaker will be Michael Levine, executive VP-marketing and international for Northwest.
Airail AG, a German firm pushing development of a privately financed airport at Stendal near Berlin, has approached Berlin Brandenburg Flughafen (BBF), the Berlin airport authority, about developing and operating the airport jointly. BBF selected Schonefeld Airport this summer for development as Berlin's sole airport following a phased closure of Tegel and Tempelhof airports. But major expansion of Schonefeld is viewed by many as foreclosed for environmental reasons, and Airail contends that Schonefeld cannot be developed into the 24-hour airport desired by Lufthansa.
KLM's passenger traffic grew 9% in August, while capacity rose 9% as well, leading to a flat load factor of 81.5%. August revenue passenger kilometers jumped 18% on KLM's Asia/Pacific routes and 13% within Europe. The carrier's cargo traffic, measured in revenue cargo ton kilometers (RTKs), also increased 9% in August on 7% more capacity. The carrier flew 506.5 million RTKs in August and posted a cargo load factor of 65.8%, up 1.3 points. The cargo results mark the first month in the fiscal year in which cargo load factor rose.
Airports Consultants Council has selected Southwest Chairman Herbert Kelleher to receive its Aviation Award of Excellence for revolutionizing the airline industry with the development of a low-cost airline. ACC will present the award Nov. 11 at its annual conference on Amelia Island, Fla.
United will pay compromise civil penalties of $25,000 under terms of a consent order hammered out with DOT concerning violations by the carrier of DOT advertising requirements.
Rolls-Royce has launched development of a Trent 900, an 80,000-pounds- thrust engine designed for Boeing's and Airbus Industrie's prospective 450- to 650-seat widebody long-haul aircraft, and will try to make it available for flight tests on candidate aircraft in 2000. Boeing and Rolls signed a memorandum of understanding in July for development of a new engine for the 747-500X and -600X aircraft, Rolls said. Design has begun, core tests are scheduled to begin early in 1998, and a full engine run is planned by the third quarter of 1998.
Comsat Mobile Communications named Alan Labbe manager-government maritime accounts, Robert Roe manager-Navy account, Michael Smith manager- Department of Defense land mobile government sales and Craig Poyner national manager-aeronautical sales. Magnetek appointed James Schuster senior VP-operations and Marc Turner manager-federal government business.
Australia and Argentina have signed a new bilateral agreement, expanding service opportunities between the two countries. "Under the arrangements, Australian and Argentine carriers will be able to operate an additional four B747-equivalent weekly services on a code-shared basis, enabling daily services between Argentina and Australia," said Australia's Minister for Transport and Regional Development John Sharp. "In addition, provision has been made for carriers of both sides to operate one dedicated freighter service each a week," said Sharp.
Mesa Air Group experienced a decline in both capacity and revenue passenger miles in August as a result of the return of six Dash 8-300 aircraft used in Denver markets and a delay in delivery of new Dash 8-200s. Mesa and Bombardier still are working out a new delivery schedule. Revenue passenger miles fell 5.7% to 119.1 million, while capacity declined 9.4% to 202.3 million available seat miles. The load factor rose 2.4 percentage points to 58.9%. Mesa carried 578,179 passengers during the month, down 3.3% from August 1995.
A new inflight catering facility and a ground-handling company opened Friday at Beijing Capital International Airport (BCIA). The Beijing Airport Inflight Kitchen and the Beijing Aviation Ground Services firms both are jointly owned by BCIA and Singapore Airport Terminal Services, a subsidiary of Singapore Airlines. SIA holds a 40% share in both. BCIA Deputy General Manager Li Peiying called the joint ventures the "single largest investment by Singapore" in China's aviation industry.
Rohr said it will build a $14 million repair and service facility in Prestwick, Scotland, that will employ up to 200 people over the next five years. Operations will begin in December at a temporary plant and at a permanent facility in April, the company said. Rohr supplies nacelles and pylon systems.
World Airways flew 3,158 block hours in August in its continuing operations - contracts with air carriers, the U.S. government and international tour operators. The company excluded from its traffic results the portions of its business it has recently terminated, such as European scheduled charters and other scheduled services. Its August block hours flown were 7% fewer than the 3,413 of August 1995. Average daily utilization was 9.3 block hours versus 10.1 block hours for the same month last year.
