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United Mechanics Avert Strike May 31, 2005

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United Airlines management and their mechanics reached a tentative agreement today. The contract will be formally signed on June 17th. In total, the new contract will save United $96 million a year. Wages will be cut by 3.9%, while sick-time pay will be lowered as well. According to a United spokeswoman, “This is an important and necessary step in providing the cost savings United needs to finish its restructuring successfully.” Mechanics reached an agreement with United Airlines management, as the rejection of the lastest contract would have allowed the bankruptcy judge to impose even harsher conditions at the next round of bargaining. The bankruptcy judge will rule later today whether to cancel any remaining unsettled contracts with other unions.

Rumor: United Mechanics May Strike On Tuesday May 30, 2005

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According to a number of our sources, United Airlines mechanics are gearing up for a strike on Tuesday, June 1st. Negotiators are working furiously to avert this crisis; however, the two groups remain deadlocked. A strike would be disastrous for the airline, even a shortened one. In other disheartening news, eight lessors plan to repossess five of United Boeing 767 aircraft soon. Although there are indications that United has prepared for this inevitability, the removal of these aircraft from the fleet will hurt United on its international routes, which are consisently profitable for the legacy carrier.

Investment Fund Contributes $150 Million Towards US Airways Merger May 30, 2005

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(Photo: Aeroposte Editor)

Wellington Management Co. plans to invest $150 million to ensure the smooth merger of US Airways with America West. Thus far, the two airlines have raised a combined half a billion dollars to bring US Airways out of bankruptcy. This latest infusion of money into the troubled airline was disclosed in court documents filed Friday. The proposed merger is set for May 19th; the synthesis of the two carriers will create the sixth largest carrier in the United States. This latest deal is remarkably similar to the other four past investments by outside companies; however, Wellington management will not be able to place a director on the board of the new airline. While Wellington Management is forfeiting some control in the new airline, the money it adds to the endeavor likely will be very important in turning around US Airways.

Northwest to Begin Charging for Pretzels May 28, 2005

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Northwest plans to nix free pretzels on all of its US flights, claiming that it will realize cost-savings close to $2 million per year. This move comes a few months after the airline suspended free meals in economy class. Effective June 9th, passengers can buy the same pretzel bags previously available for free, for $1 per three-ounce bag.

Frontier Narrows Loss May 27, 2005

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The outlook for Denver, Colorado based Frontier Airlines seems to be improving. The low-fare carrier cut its fourth quarter loss by just over $2 million when compared to this time last year. Frontier posted a $3.7 million loss for this year, compared to $5.8 million one year ago. Their management attributes their step towards profitability to a higher load factor, which crept up three percentage points to 73.6%. Nonetheless, Frontier expects to lose money in the first fiscal quarter of 2006, due to high fuel prices and an April blizzard in Denver that shut down the airport. As the low-fare airline, which offers satellite T.V in its aircraft for a small fee, continues to receive new aircraft from Airbus and expand its route structure, it will continue to plague legacy carrier United Airlines, which maintains a large hub in Denver as well.

Boeing Launches Cargo 777 May 24, 2005

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After all the hype for today’s new product announcement, Boeing announced the official launch of the 777F, the cargo version of the Boeing 777. Although the Boeing 777 Freighter is not the revolutionary aircraft some analysts predicted Boeing would announce, the continued expansion of the triple-seven family speaks to the success of the Boeing’s latest twin engine airplane. Air France will be the launch customer, ordering five 777F aircraft and placing options for three more. The French airline will use the aircraft to replace its aging 747-200 cargo fleet. According to the press release, “the 777 freighter, designed to carry 222,000 pounds of cargo up to 6,400 miles, is based on long-range 777-200LR passenger aircraft, [and] is scheduled to enter service early next year.” Boeing stock jumped $.36 after the announcement.

Rumor Mill: Boeing 747 Advanced Launch Soon? May 23, 2005

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According to several sources close to Boeing, the aerospace giant is set to unveil a new aircraft to the media at 9AM PST tomorrow (5/24). While the company is hush about what exactly the conference will entail, several sources are predicting either the launch of the 747 Advanced or an enlarged variant of the 737-900 (dubbed the 737-900X). Boeing is currently floating the 747 Advanced as an updated version of the 747, capable of carrying more passengers further due to technology currently being incorporated into the 787. If launched, the 747 Advanced would not compete with the Airbus A380; rather, it would fit in a niche between the current Boeing 747 and the Airbus A380. In contrast, the 737-900X would seat 15 more passengers than the largest variant of the current 737 family, while providing a range near that of its smaller cousin, the 737-800. Be sure to check Aeroposte tomorrow for complete details.

US Airways Agrees to Merge with America West May 21, 2005

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In a huge gamble, America West agreed today to merge with US Airways. Phoenix based America West and Washington D.C located US Airways plan to merge to create a “buffer against the new era of low-cost rivals, high fuel costs and a flood of cheap fares.” Doug Parker, America West Holdings’ president and CEO was quoted as saying that “These two airlines are so much stronger together.” Industry-wide skepticism remains, as the merger of two companies is likely to be complicated by many unforseen factors and the new airline will not likely bear a profit for many years. The two companies agreed to adopt the US Airways name, as it is more well-known than west-coast oriented America West. Combined, the two airlines owe more than $1 billion in loans to the Air Transportation Stablilization Board. Both companies cite the growing dominance of low-fare carriers as reasons to unite. In particular, they fear Jetblue and Southwest , which continue to gobble up the domestic market. After merger, The combined workforce will total nearly 45,000 employees; however, there will be cuts in management positions as US Airways eliminates its headquarters near Washington D.C. The two airlines plan to transform themselves into a low-fare alternative to legacy carriers, but both airlines will continue to keep first class seating. Little information has been released about the future of US Airways international flights.

United Machinists Move Forward in Negotiations May 18, 2005

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The International Association of Machinists and Aerospace Workers, the union that represents United Airlines ramp-workers and customer-service agents, reported significant progress in talks with United management today.The two parties still remain divided over long-term job security and pension plans. Both parties seek to avert a strike, a disruption that most likely would put United out of business for good. A deal with IAMA would solidify United’s goal of achieving $700 million in wage concessions from its employees. Over the past few weeks, United has concluded negotiations with its pilots, flight attendants, and mechanics unions.

United Nears Deal with Unions May 14, 2005

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According to an associated press story (AP), United Airlines is close to completing a deal with its mechanics and baggage handling unions. United is seeking pay cuts valued at close to $176 million, a concession that management maintains is necessary to survive. The largest obstacle, valuation has been overcome; however, negotiators still have to work out a few of the finer details before the agreement is signed. Both parties are working to sign the contract by the end of next week, before the United bankruptcy judge releases a ruling giving United the ability to break tentative contracts. If Judge Wedoff decides to implement the new rules, experts predict that many of United’s unions will strike. Nonetheless, United Chief Financial Officer Jake Brace hopes that the “good tone and nature of the talks [will] continue.”