Friday, August 26, 2005

Northwest Airlines said it is prepared to operate "indefinitely" with a work force of replacement mechanics. The company's mechanics went on strike last Saturday after contract talks broke down. Some Northwest travelers said operations appear to be normal.  Analysts say Northwest will survive the strike if it can convince the public safety standards and on-time performance have not changed.  Northwest also said it may consider permanently hiring workers who are replacing the striking mechanics. No talks are scheduled with the mechanics union.  Steep competition, high fuel prices and looming pension payments persist at the carrier. Some analysts believe the carrier can avoid filing for bankruptcy if it continues to operate well during the strike. 

Four banks have offered to provide $3 billion in financing to United Airlines, the carrier said. The financing would help the airline exit bankruptcy by early 2006. The lenders had offered to provide $2.5 billion to United. The increase reflects updates to United's business plan, which now includes more labor-cost cuts. 

Some analysts are questioning whether Delta Air Lines can survive as an independent carrier. The airline's executives are now weighing whether to sell assets to keep it afloat or to file for bankruptcy protection. High oil prices continue to hurt the carrier, and some analysts say it is the weakest of the large airlines because it doesn't offer extensive international service. A Delta spokesman said the carrier is considering all of its options, noting "In or out of court, we have a plan."  The carrier has told its pilots union that cash levels are so low it may ask for additional concessions. The pilots last fall agreed to $1 billion in pay and benefit cuts.  

Delta Air Lines and Northwest Airlines have lobbied lawmakers for more time to fund their pension plans. However, it is unclear if Congress will pass pension reform laws. A bill that would give airlines 14 years to fund their plans will soon head to the Senate floor. A different bill that would require funding within seven years must go before the House Ways and Means Committee before it lands on the House floor. Northwest and Delta had asked that their obligations be spread over 25 years. 

Start-up Eos plans to launch service between New York and London next month. The airline will configure its Boeing 757 jets with just 48 seats. Most airlines fly with at least 180 seats in a 757 cabin. Founder David J. Spurlock said Eos will be "a premium airline purposely designed to bring value to the international business traveler who demands a high degree of service." The airline has not yet received regulatory approval. 

We would like to encourage all members to attend your Local Lodge business meeting. Each base must have a quorum to conduct business. The following is a schedule for upcoming meetings:  

Cleveland: Thursday, September 8, 4:00 pm at 669 North Rocky River Drive;

Guam: Wednesday, September 21, 4:00 p.m. at the Airport Conference Room;

Houston: Wednesday, September 28, 1:00 p.m. at 15710 JFK Blvd;