Delta Pilot Vote Key To Out-of-Court Restructuring
Delta Air Lines' pilots are scheduled to finish voting Thursday on a tentative agreement that would save the carrier $1 billion annually. The deal would not assure the company's ability to restructure without bankruptcy protection, but it is the linchpin of that effort. The deal requires approval by a simple majority of voting pilots, represented by the Air Line Pilots Association. Delta in the past few weeks also reached agreements with American Express Travel Related Services and GE Commercial Finance totaling $1 billion in new financing and deferred and exchanged portions of its debt load. "Delta's last-minute bankruptcy sidestep is best viewed as a stay of execution, affording Delta at least six months more time to put its house in order or pray for US Airways' house to burn to the ground," said J.P. Morgan Securities analysts in a recent research note.
Citibank Broadens Issuing Capabilities In Asia/Pacific
Citibank this week will announce the capability to issue MasterCard-branded commercial cards in Hong Kong and Australia, which join Singapore, Japan and Malaysia as Citibank commercial-card markets. "The platform is live now and we're in the process of negotiating agreements with clients that have been waiting for us in those markets," said Gary Schneider, global business manager for Citibank commercial cards. The cards can be issued in local currency and can be converted into U.S. dollars for reporting through Citibank's global data repository. Citibank, a purveyor of both Visa and MasterCard, issues commercial cards in more than 30 countries, which is more than any other bank issuer. The issuer also has finalized agreements with Koram Bank to begin issuing commercial cards in Korea early next year. Meanwhile, the company this year received permission to issue consumer cards in China. Through an agreement with Shanghai Pudong Development Bank, Schneider expects a commercial offering to follow some time next year, yet "that's a target date, not etched in stone," he said.
EC Gives IATA 'Final Final' Deadline For Settlement Plan
The European Commission has given the International Air Transport Association a 'final final' deadline of Feb. 15, 2005, to announce concrete plans for introducing pan-European agency accreditation and settlement arrangements. The Commission also has indicated it is considering introducing legislation next year to force airlines to make the same fares available in all European Union states. Two of the Commission's directorates, DG Transport and DG Competition, are examining whether airlines infringe on E.U. competition and internal market laws by creating promotional fares that only can be purchased in the E.U. state where the fare is being promoted. Isabelle Leroy, legal adviser to the European travel agents' association ECTAA, said the Commission may propose legislation on this issue in the first half of 2005, possibly as part of its long-planned third package of measures for the liberalization of European air transport. "The message is coming across really strongly that things have to go further," she said. Meanwhile, at a tripartite meeting in Brussels on Oct. 18 that included European travel agency leaders, the Commission told IATA that although it had made progress on introducing pan-European agency accreditation, it had not moved fast enough. It similarly wants by that date to see a proposal that allows agents to make a single monthly pan-European settlement with airlines. This should either be through one of the current national billing and settlement plans or a brand new cross-border BSP. Leroy said legal action against IATA either by the Commission or by members of the travel industry is likely if IATA has not delivered on these issues by Feb. 15.
Trusted Travelers To Test Border Crossing Tech
By month's end, the Nexus Air pilot program—a binational effort to expedite border crossing between Canada and the United States—will be operational at Vancouver International Airport. As of last week, both the U.S. and Canadian customs clearance areas of the airport had been equipped with biometric, iris-scanning kiosks to identify pre-approved "trusted travelers." Helen Goward, manager of district program services at Vancouver International Airport for the Canadian Border Services Agency, said the 17-month pilot program will enable members to make all customs declarations at biometric kiosks and pass through priority pre-board screening lines. Goward estimated the program would attract more than 12,000 people, who will be issued membership cards after undergoing personal interviews and risk assessment processing under U.S. and Canadian law. Applications, available Nov. 30, will cost members US$50. Membership will be open to all U.S. and Canadian citizens and permanent residents of both countries.