Modified CO-DL-NW Pact Conditions Open For CommentThe U.S. Department of Transportation until March 18 will accept comments on revised conditions for an alliance between Continental, Delta and Northwest airlines. The three carriers, after threatening to move forward without DOT's approval
(BTN, Feb. 10), stepped back from confrontation and resubmitted conditions they deemed acceptable. They include limiting codesharing in the first year to 650 flights per two-carrier combination but allowing an additional 650 in the second year, with certain requirements. Also, the carriers agreed to submit joint contract bids to corporations and agencies only when requested in writing. Joint contracts for a corporation or travel agency located in any city where the three carriers hold a combined marketshare in excess of 50 percent must exclude traffic originating in that city. Furthermore, the trio "shall not make the contractual discounted fares or commissions dependent on satisfaction of minimum purchase or booking requirements for specific domestic O&D city pair markets" unless the client requests in writing such an offer to compare it with other competitive bids. The three airlines also agreed to relinquish certain gates at certain airports, but not to surrender any airport facilities based solely on DOT's underutilization definition. The carriers accepted other conditions imposed by DOT, which will make a final decision by the end of the month. Interested parties may file comments by next week with Randall Bennett, Director, Office of Aviation Analysis, Room 6401, U.S. Department of Transportation, 400 7th St. S.W., Washington, D.C., 20590.
United Labor Concession Deadline Looms, ESOP In JeopardyUnited Airlines has until next Monday to finalize concessions with labor unions. If final agreements are not in place, the carrier may ask the bankruptcy court to invalidate existing labor contracts. United parent UAL Corp. said it lost $372 million in January and that the IRS has permitted State Street Bank, the trustee of the company's Employee Stock Ownership Plan, to sell millions of additional shares. The ruling could lead to boardroom changes and the "elimination of the 55 percent shareholder voting power of the ESOP."
US Air Eyes Emergence From Ch. 11, Lufthansa CodeshareUS Airways said it still is on track to emerge from bankruptcy on March 31. The judge overseeing the airline's bankruptcy proceedings permitted US Airways to terminate the pension plan for its pilots, though the end result is subject to further review as management and the Air Line Pilots Association continue negotiations. US Airways last week continued working with Airbus and other involved parties in delaying aircraft payments. The carrier also said its January operating loss was $101 million and, as of Feb. 28, its cash position was $480 million. A successful emergence from bankruptcy will allow the airline to tap $1 billion in financing backed by a $900 million federal loan guarantee. Meanwhile, the carrier plans to join the Star Alliance by year-end, with implementation in early 2004. A bilateral codeshare arrangement with Star founder Lufthansa, including flights to and from Frankfurt and Munich, could come as early as late summer.
NBTA To Raise Capitol Hill ProfileThe National Business Travel Association will hold its first annual Legislative Action Day on May 20. Executive director Bill Connors said NBTA had engaged the Valles and Associates lobbying group to help prepare for that day and a broader effort to have a greater presence in Washington through an expanded political action committee. "One thing that I have told Kevin and the board," Connors said, "is that we should position ourselves not just as representing 2,000 or so corporate travel managers, but as consumer advocates for hundreds of thousands of business travelers." The Legislative Action Day will be an opportunity for buyers to express their concerns. It will start out with meetings with congressional leaders. NBTA is trying to arrange a reception in the White House that afternoon with a key White House official. While NBTA has not identified any specific legislative goals, issues of particular concern include data privacy, competition and taxes and fees. "We've got 26 percent of the typical airline ticket now representing taxes and fees," Connors said. "That's a higher percentage of taxes and fees than are charged for cigarette and liquor sin taxes. It shouldn't be a sin to be a business traveler." Connors said NBTA's PAC is in its infancy, but "my goal is to have $10,000 in the bank by the end of this year. So far, we are legally and logistically set up and we're ready to roll." NBTA president Kevin Iwamoto, Hewlett-Packard global air and car supplier manager, said, "What I told Bill is that I want NBTA to be the 'go to' organization when it comes to business travel issues. You can only do that with a PAC. The way Capitol Hill works is, if you make a nice donation, they'll listen to your issues. That's what we've got to do."