Any "Latest & Greatest" about Delta?
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1) This group is probably not ready to hear another deal explained to them after it has been ratified. I think this is due to poor marketing efforts by the MEC over a string relatively good deals. I think the group has come to associate poor communications with poor deals. Any deal that comes through will have to clear a very high hurdle to be acceptable.
2) Instinct (and logic) tells me that any deal designed to control movement will mean that we are giving up contractual rights, and will end up parked in some category, for some period of time. Some may end up holding awards to categories they can't move to, while their own category remains open for people moving in, etc. It just gives me images of some sort of purgatory, where you gain a 5% raise, but your life sucks for two years, as you can't get any holiday off, etc.
Of course, this discussion is based on conjecture about conjecture, so it's pretty hard to take it any further. You asked why I thought there might be a revolution if we play around with contractual rules for AE's, and this is my rationale.
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Atlanta Business Chronicle - by J. Scott Trubey and Maria Saporta Staff Writer and Contributing Writer
The extension of Delta Air Lines Inc.’s lease at Atlanta’s airport received the approval Monday of the Atlanta City Council Transportation Committee.
The vote sets the stage for the seven-year deal to be approved by the full council by the end of the year.
The measure, approved by a 4-0 vote with two abstentions, comes on the heels of an opinion by federal authorities that the city, Delta and AirTran Airways Inc. had addressed most concerns about potentially “anticompetitive” components in the complicated master lease.
A Federal Aviation Administration memo released Monday indicated the agency had reversed its stance about aspects of the tentative deal it had said could limit competition at city-run Hartsfield-Jackson Atlanta International Airport.
In the latest memo dated Nov. 6, an FAA official said the revised lease agreement had “progressed substantially toward resolving our prior concerns.”
The revised opinion came after an Oct. 30 meeting between officials with Atlanta-based Delta (NYSE: DAL), AirTran (NYSE: AAI) and the FAA to address six points of contention over the proposed seven-year lease agreement, the memo states.
On Oct. 5, Mayor Shirley Franklin and Delta (NYSE: DAL) announced a tentative seven-year lease that would keep the world’s largest airline from moving capacity out of the world’s busiest airport.
The tentative lease deal—essentially the ground rules for how the city and the airport’s largest tenant would conduct business—was seen as a major coup for both parties. City officials touted its flexibility to bring in new carriers while respecting Delta’s position at the airport. Leaders also said it would help ensure completion of the $1.3 billion Maynard Holbrook Jackson International Terminal, which has had its future cast in doubt over a dispute between city and Delta over long-term lease and capital costs.
But on Oct. 21, it was learned that FAA officials balked at the proposed lease deal between Delta and the city.
FAA Director of Airport Planning Benito De Leon, who reviewed the proposed lease and use agreement for the Central Passenger Terminal Complex, found a total of seven points of contention, including questions about potentially anticompetitive provisions that could make it more difficult for rival carriers to enter or expand in the market.
Some questions remain, and the FAA still took umbrage in its latest review with a proposed continuation of a Majority n Interest Clause, which would maintain the airline’s ability to vote to approve major projects.
The FAA had feared such a provision could conceivably allow a major stakeholder, like Delta, to veto a project to expand capacity that might accommodate new competitors or existing rivals.
In the meeting, Delta and AirTran told the FAA that other sources of funding for capital projects, such as passenger facility charges levied on tickets, revenue from other airport operations and special facility bonds, are not subject to approval by legacy carriers. The carriers also pointed to support of more than $4 billion in capital projects over the past decade and a half.
De Leon wrote the federal government remains “disappointed” with the Majority in Interest Clause, but said the effect of it “should be minimal in light of the availability of other sources of capacity funding.”
Under the tentative deal, city officials said the master lease would permit Delta and the other airlines to have greater say in future building projects, but in return airport gates would convert from “exclusive-use” gates to so-called “preferential-use” gates, allowing the airport to reallocate docking points if underused by existing airlines.
The FAA questioned in an earlier memo the metric the airport would employ to measure use would create “de facto” exclusive gates.
In its latest response, the FAA indicated the provision might require further review should it “result in the effective denial of access” to other carriers, but that an additional provision allowing the airport to recapture gates could mitigate some concerns.
Revisions to the new lease agreement also appear to address FAA concerns about subleasing of gates and a first right of refusal clause, which could potentially prevent new carriers from entering the airport, or potentially violate covenants of the airport’s federal passenger facility charge program, which helps pay for the International Terminal and other major capital projects.
City officials expect to sign deals with AirTran and other carriers at Hartsfield-Jackson in coming months.
The lease agreement has been the centerpiece of contention between Delta and the city, and has endangered construction of the $1.3 billion Maynard Holbrook Jackson International Terminal.
Delta wanted to complete a new lease agreement before Franklin leaves office Dec. 31. The current 30-year master lease expires in September 2010.
Delta officials have said the airline wants a new lease completed to ensure its operating costs at Hartsfield-Jackson remain competitive before making substantial commitments in capital for future airport projects.
Under the new lease, Delta would agree to back bonds to finish the terminal project, which had been threatened when Delta pulled its support for the project unless cost cuts and a lease deal was completed.
Also on Monday, the City Council called for a special Dec. 2 meeting to vote to move forward with the international terminal bonds and for bonds associated with the Beltline project.
The extension of Delta Air Lines Inc.’s lease at Atlanta’s airport received the approval Monday of the Atlanta City Council Transportation Committee.
The vote sets the stage for the seven-year deal to be approved by the full council by the end of the year.
The measure, approved by a 4-0 vote with two abstentions, comes on the heels of an opinion by federal authorities that the city, Delta and AirTran Airways Inc. had addressed most concerns about potentially “anticompetitive” components in the complicated master lease.
A Federal Aviation Administration memo released Monday indicated the agency had reversed its stance about aspects of the tentative deal it had said could limit competition at city-run Hartsfield-Jackson Atlanta International Airport.
In the latest memo dated Nov. 6, an FAA official said the revised lease agreement had “progressed substantially toward resolving our prior concerns.”
The revised opinion came after an Oct. 30 meeting between officials with Atlanta-based Delta (NYSE: DAL), AirTran (NYSE: AAI) and the FAA to address six points of contention over the proposed seven-year lease agreement, the memo states.
On Oct. 5, Mayor Shirley Franklin and Delta (NYSE: DAL) announced a tentative seven-year lease that would keep the world’s largest airline from moving capacity out of the world’s busiest airport.
The tentative lease deal—essentially the ground rules for how the city and the airport’s largest tenant would conduct business—was seen as a major coup for both parties. City officials touted its flexibility to bring in new carriers while respecting Delta’s position at the airport. Leaders also said it would help ensure completion of the $1.3 billion Maynard Holbrook Jackson International Terminal, which has had its future cast in doubt over a dispute between city and Delta over long-term lease and capital costs.
But on Oct. 21, it was learned that FAA officials balked at the proposed lease deal between Delta and the city.
FAA Director of Airport Planning Benito De Leon, who reviewed the proposed lease and use agreement for the Central Passenger Terminal Complex, found a total of seven points of contention, including questions about potentially anticompetitive provisions that could make it more difficult for rival carriers to enter or expand in the market.
Some questions remain, and the FAA still took umbrage in its latest review with a proposed continuation of a Majority n Interest Clause, which would maintain the airline’s ability to vote to approve major projects.
The FAA had feared such a provision could conceivably allow a major stakeholder, like Delta, to veto a project to expand capacity that might accommodate new competitors or existing rivals.
In the meeting, Delta and AirTran told the FAA that other sources of funding for capital projects, such as passenger facility charges levied on tickets, revenue from other airport operations and special facility bonds, are not subject to approval by legacy carriers. The carriers also pointed to support of more than $4 billion in capital projects over the past decade and a half.
De Leon wrote the federal government remains “disappointed” with the Majority in Interest Clause, but said the effect of it “should be minimal in light of the availability of other sources of capacity funding.”
Under the tentative deal, city officials said the master lease would permit Delta and the other airlines to have greater say in future building projects, but in return airport gates would convert from “exclusive-use” gates to so-called “preferential-use” gates, allowing the airport to reallocate docking points if underused by existing airlines.
The FAA questioned in an earlier memo the metric the airport would employ to measure use would create “de facto” exclusive gates.
In its latest response, the FAA indicated the provision might require further review should it “result in the effective denial of access” to other carriers, but that an additional provision allowing the airport to recapture gates could mitigate some concerns.
Revisions to the new lease agreement also appear to address FAA concerns about subleasing of gates and a first right of refusal clause, which could potentially prevent new carriers from entering the airport, or potentially violate covenants of the airport’s federal passenger facility charge program, which helps pay for the International Terminal and other major capital projects.
City officials expect to sign deals with AirTran and other carriers at Hartsfield-Jackson in coming months.
The lease agreement has been the centerpiece of contention between Delta and the city, and has endangered construction of the $1.3 billion Maynard Holbrook Jackson International Terminal.
Delta wanted to complete a new lease agreement before Franklin leaves office Dec. 31. The current 30-year master lease expires in September 2010.
Delta officials have said the airline wants a new lease completed to ensure its operating costs at Hartsfield-Jackson remain competitive before making substantial commitments in capital for future airport projects.
Under the new lease, Delta would agree to back bonds to finish the terminal project, which had been threatened when Delta pulled its support for the project unless cost cuts and a lease deal was completed.
Also on Monday, the City Council called for a special Dec. 2 meeting to vote to move forward with the international terminal bonds and for bonds associated with the Beltline project.
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Moak has used up all his freebies. No more secret deals will be tolerated.
I think there will be an angry mob of pilots with pitchforks and rope outside the MEC offices if he comes out with some agreement that helps management restrict pilot's rights due to AEs after SOC.
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One word: 747-200F. Do not put them away, since we closed ANC just base them in SEA and keep going.
There would be a lot of happy folks.
Would we ever do a 747-400BCF (boeing converted freighter)? Since the 747-400 didn't fall out of the 5 year plan like it was rumored it would then how about just putting it in the 10 year plan with a conversion?
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Would we ever do a 747-400BCF (boeing converted freighter)? Since the 747-400 didn't fall out of the 5 year plan like it was rumored it would then how about just putting it in the 10 year plan with a conversion?
I always expected NWA to buy B787s or B777s, convert all the B747-400s to B747-400BCFs, and replace the -200s with them. Some of NWA's -400s are almost 20 years old, perfect candidates for freighter operations.
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Was perusing the October 765 CLCP Newsletter last night and found something I thought might add to rampant speculation for the MOAB. Buried deep in the letter, ES suggests there could be up to nine 767-400 JFK departures. With only 21 aircraft that is a significant number, so if that holds then you may very well see a JFK base for the 767-400 on this bid. Other destinations mentioned are ATH, IST and NCE.
Discuss.
Burn Notice
Discuss.
Burn Notice
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I used to fly for a -200F operator. Freight can make a lot of money, if you do it right.
I always expected NWA to buy B787s or B777s, convert all the B747-400s to B747-400BCFs, and replace the -200s with them. Some of NWA's -400s are almost 20 years old, perfect candidates for freighter operations.
I always expected NWA to buy B787s or B777s, convert all the B747-400s to B747-400BCFs, and replace the -200s with them. Some of NWA's -400s are almost 20 years old, perfect candidates for freighter operations.
Add to it, that DAL is spending a lot of cash very quietly on a cargo op and IT functionality out in LAX. (I have been told it is dedicated cargo, and I asked why we would spend that on a belly cargo op, and I got the dumb look)
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Was perusing the October 765 CLCP Newsletter last night and found something I thought might add to rampant speculation for the MOAB. Buried deep in the letter, ES suggests there could be up to nine 767-400 JFK departures. With only 21 aircraft that is a significant number, so if that holds then you may very well see a JFK base for the 767-400 on this bid. Other destinations mentioned are ATH, IST and NCE.
Discuss.
Burn Notice
Discuss.
Burn Notice
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UPDATE 4-Govt plans pension cuts, bridge loan in JAL rescue
Tue Nov 10, 2009 8:20am EST
TOKYO, Nov 10 (Reuters) - Japan's government said it was considering legislation to cut the pensions of Japan Airlines Corp (9205.T) retirees and would use loans from a state bank to keep it operating while it seeks its fourth bailout since 2001.
Transport Minister Seiji Maehara said the government would present proposed legislation to forcibly slash pension payouts during the next regular session of parliament, which starts in January, if the airline could not get the retirees to support the cuts.
The state-owned Development Bank of Japan will supply bridge loans to keep the airline operating until it secures long term financing, Maehara said. JAL is waiting for a government-backed turnaround body to decide whether to recapitalise it with public funds.
"We recognise that JAL will face a cash problem this month," Maehara told a news conference.
"The government will take steps to ensure JAL won't run out of money and to solve the pension issue, which could be a big problem even if the ETIC (Enterprise Turnaround Initiative Corporation of Japan) decides to support the carrier."
JAL, Asia's largest airline by revenue, is headed for its fourth annual loss in five years, weighed down by $15 billion in debt and a bloated cost base, including a pension shortfall estimated at $3.7 billion as of March. [ID:nT349661]
The government has been considering legislation to push through reductions to pension payouts, aiming to get around current laws that allow retirees and employees to easily block such cuts if just one-third of them oppose. [ID:nT188821]
The government's announcement of plans to deal with the pension and financing issues were partly aimed at easing worries auditors might not sign off on JAL's first half earnings report scheduled for Friday.
"We know JAL will announce earings on Nov. 13, so it's books will have to be audited," national strategy minister Naoto Kan told reporters at a separate briefing. "We felt we needed to clear up the issue of bridge loans before then to ensure the airline continues to operate smoothly."
HOLDING PATTERN
A banking source with knowledge of JAL's finances said the airline needs about 100 billion yen ($1.1 billion) in bridge loans to prevent it from running short of cash this month.
JAL needs loans to tide it over while the government-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) studies its assets and decides whether it is worthy of state aid.
JAL applied to the ETIC last month and a decision is expected in January. The body is able to tap up to 1.6 trillion yen in state-guaranteed loans to buy the debt of and invest in struggling but viable firms. [ID:nT128108]
While the Development Bank of Japan has been tapped by the government to provide short-term financing, it remains unclear whether private bank creditors will be willing to extend fresh loans in the absence of state guarantees.
Maehara said that for the time being the government does not plan to back the bridge loans, but that it would consider legislation or a budget provision to do so in the future.
Japan's top three private banks -- Mitsubishi UFJ Financial Group (8306.T), Mizuho Financial Group (8411.T) and Sumitomo Mitsui Financial Group (8316.T) -- are all JAL creditors.
A government task force working on JAL's revival plan is considering tapping a debt restructuring scheme under which a third party would mediate between JAL and its creditors, two sources familiar with the matter told Reuters earlier on Tuesday.
This scheme, called "Alternative Dispute Resolution", would trigger a suspension of loan payments. This would reduce the amount of funds JAL needs to secure in the near term and thereby lower the bar to securing the bridge loan.
JAL needs about 180 billion yen by the end of March, according to one of the two sources. By using the debt restructuring scheme, the airline can reduce that amount to around 80 billion yen, the source said.
Bridge loans extended under the debt restructuring scheme would be given high priority in case of a JAL bankruptcy, a factor that may encourage the banks to lend, the sources said.
A decision by the ETIC not to support JAL would likely push the airline into bankruptcy, a scenario Maehara and other leading members of the ruling Democratic Party have said they would seek to avoid, citing the importance of JAL to the economy.
One trigger for bankruptcy would be a failure to resolve the pension issue. Legislation would be tricky as forced cuts could be interpreted as violating personal property rights protected by the constitution, and some retirees have threatened to sue.
The issue is proving to be a headache for the Democratic Party, which was swept to power earlier this year on a platform that promised to focus on the sometimes conflicting interests of protecting workers and prudent use of taxpayer's funds.
"It's also important to make clear that we won't use public funds to pay out pensions for JAL employees. When you're faced with the question of using the taxpayers' money, you have to make sure you have the public's understanding," Kan said.
Shares of JAL fell 0.9 percent to 105 yen on Tuesday and are down 50 percent so far this year, underperforming a rise of 11 percent in the benchmark Nikkei stock average .N225.
Tue Nov 10, 2009 8:20am EST
TOKYO, Nov 10 (Reuters) - Japan's government said it was considering legislation to cut the pensions of Japan Airlines Corp (9205.T) retirees and would use loans from a state bank to keep it operating while it seeks its fourth bailout since 2001.
Transport Minister Seiji Maehara said the government would present proposed legislation to forcibly slash pension payouts during the next regular session of parliament, which starts in January, if the airline could not get the retirees to support the cuts.
The state-owned Development Bank of Japan will supply bridge loans to keep the airline operating until it secures long term financing, Maehara said. JAL is waiting for a government-backed turnaround body to decide whether to recapitalise it with public funds.
"We recognise that JAL will face a cash problem this month," Maehara told a news conference.
"The government will take steps to ensure JAL won't run out of money and to solve the pension issue, which could be a big problem even if the ETIC (Enterprise Turnaround Initiative Corporation of Japan) decides to support the carrier."
JAL, Asia's largest airline by revenue, is headed for its fourth annual loss in five years, weighed down by $15 billion in debt and a bloated cost base, including a pension shortfall estimated at $3.7 billion as of March. [ID:nT349661]
The government has been considering legislation to push through reductions to pension payouts, aiming to get around current laws that allow retirees and employees to easily block such cuts if just one-third of them oppose. [ID:nT188821]
The government's announcement of plans to deal with the pension and financing issues were partly aimed at easing worries auditors might not sign off on JAL's first half earnings report scheduled for Friday.
"We know JAL will announce earings on Nov. 13, so it's books will have to be audited," national strategy minister Naoto Kan told reporters at a separate briefing. "We felt we needed to clear up the issue of bridge loans before then to ensure the airline continues to operate smoothly."
HOLDING PATTERN
A banking source with knowledge of JAL's finances said the airline needs about 100 billion yen ($1.1 billion) in bridge loans to prevent it from running short of cash this month.
JAL needs loans to tide it over while the government-backed Enterprise Turnaround Initiative Corporation of Japan (ETIC) studies its assets and decides whether it is worthy of state aid.
JAL applied to the ETIC last month and a decision is expected in January. The body is able to tap up to 1.6 trillion yen in state-guaranteed loans to buy the debt of and invest in struggling but viable firms. [ID:nT128108]
While the Development Bank of Japan has been tapped by the government to provide short-term financing, it remains unclear whether private bank creditors will be willing to extend fresh loans in the absence of state guarantees.
Maehara said that for the time being the government does not plan to back the bridge loans, but that it would consider legislation or a budget provision to do so in the future.
Japan's top three private banks -- Mitsubishi UFJ Financial Group (8306.T), Mizuho Financial Group (8411.T) and Sumitomo Mitsui Financial Group (8316.T) -- are all JAL creditors.
A government task force working on JAL's revival plan is considering tapping a debt restructuring scheme under which a third party would mediate between JAL and its creditors, two sources familiar with the matter told Reuters earlier on Tuesday.
This scheme, called "Alternative Dispute Resolution", would trigger a suspension of loan payments. This would reduce the amount of funds JAL needs to secure in the near term and thereby lower the bar to securing the bridge loan.
JAL needs about 180 billion yen by the end of March, according to one of the two sources. By using the debt restructuring scheme, the airline can reduce that amount to around 80 billion yen, the source said.
Bridge loans extended under the debt restructuring scheme would be given high priority in case of a JAL bankruptcy, a factor that may encourage the banks to lend, the sources said.
A decision by the ETIC not to support JAL would likely push the airline into bankruptcy, a scenario Maehara and other leading members of the ruling Democratic Party have said they would seek to avoid, citing the importance of JAL to the economy.
One trigger for bankruptcy would be a failure to resolve the pension issue. Legislation would be tricky as forced cuts could be interpreted as violating personal property rights protected by the constitution, and some retirees have threatened to sue.
The issue is proving to be a headache for the Democratic Party, which was swept to power earlier this year on a platform that promised to focus on the sometimes conflicting interests of protecting workers and prudent use of taxpayer's funds.
"It's also important to make clear that we won't use public funds to pay out pensions for JAL employees. When you're faced with the question of using the taxpayers' money, you have to make sure you have the public's understanding," Kan said.
Shares of JAL fell 0.9 percent to 105 yen on Tuesday and are down 50 percent so far this year, underperforming a rise of 11 percent in the benchmark Nikkei stock average .N225.
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It doesn't hurt to call, email or text your friends to go to alpa.org to vote! Voting ends at 10 am this morning.
We need everyone to vote and vote wisely!
We need everyone to vote and vote wisely!
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CHARLOTTE, N.C. (TheStreet -- For months, the rumor has circulated that US Airways(symbol Quote) might merge with American(AMR Quote).
It seems off base. Throughout the airline industry's merger cycle in 2007 and 2008, American never seemed to be seriously interested. Even as Delta(DAL Quote) and Northwest pursued a deal, American stayed on the sidelines, despite Northwest's hub at Tokyo's Narita Airport.
"We looked very carefully at their presence in Narita," CEO Gerard Arpey recently told the airline's fall leadership conference. "(It) wasn't the kind of scale we were looking for."
American could use a Charlotte hub, too. US Airways has built Charlotte into the country's ninth busiest airport. But would a carrier unwilling to chase Tokyo then turn around and undergo merger turmoil to acquire less valuable Charlotte?
And yet, US Airways CEO Doug Parker is a leading merger advocate, American's situation is in flux, and last week, Continental(CAL Quote) CEO Jeff Smisek discussed the possibility of renewing merger talks with United(UAUA Quote).
A few days after Continental accepted United's invitation to join the Star alliance, Smisek said the carrier is happy to remain independent but would reconsider if the new Delta prospers.
"We are watching Delta to see whether Delta outperforms us financially," Smisek said, in a Bloomberg Television interview. "To date they have not done so. They've gotten bigger, they've gotten more complex, but they haven't gotten profitable."
Were Continental and United to merge, American, the largest carrier 13 months ago, would slide to third. Meanwhile, American is threatened by regulators' reluctance to give it and partner British Airways the same antitrust immunity taht competitors have, and by Delta's bid to replace it as a partner to Japan Air Lines.
It seems off base. Throughout the airline industry's merger cycle in 2007 and 2008, American never seemed to be seriously interested. Even as Delta(DAL Quote) and Northwest pursued a deal, American stayed on the sidelines, despite Northwest's hub at Tokyo's Narita Airport.
"We looked very carefully at their presence in Narita," CEO Gerard Arpey recently told the airline's fall leadership conference. "(It) wasn't the kind of scale we were looking for."
American could use a Charlotte hub, too. US Airways has built Charlotte into the country's ninth busiest airport. But would a carrier unwilling to chase Tokyo then turn around and undergo merger turmoil to acquire less valuable Charlotte?
And yet, US Airways CEO Doug Parker is a leading merger advocate, American's situation is in flux, and last week, Continental(CAL Quote) CEO Jeff Smisek discussed the possibility of renewing merger talks with United(UAUA Quote).
A few days after Continental accepted United's invitation to join the Star alliance, Smisek said the carrier is happy to remain independent but would reconsider if the new Delta prospers.
"We are watching Delta to see whether Delta outperforms us financially," Smisek said, in a Bloomberg Television interview. "To date they have not done so. They've gotten bigger, they've gotten more complex, but they haven't gotten profitable."
Were Continental and United to merge, American, the largest carrier 13 months ago, would slide to third. Meanwhile, American is threatened by regulators' reluctance to give it and partner British Airways the same antitrust immunity taht competitors have, and by Delta's bid to replace it as a partner to Japan Air Lines.
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