US Airways has filed a Form 8K with the Securities and Exchange Commission that reveals the carrier has reached support with three unions representing employees from American Airlines. The support spells out the labor contracts that would occur if US Airways and American Airlines merged. "To get to an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its Board of Directors," wrote US Airways CEO Doug Parker in a letter to employees.
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AMR Corp., the parent company of American Airlines, reported a loss of $1.7 billion for the first quarter. AMR Corp., which filed for bankruptcy last year, said $1.4 billion of the loss could be attributed to the bankruptcy process. During the same quarter last year, the carrier lost $436 million.
United Continental Holdings said the company will take $162 million in net charges related to the merger for the first quarter. The carrier is scheduled to report first-quarter earnings next week. Analysts are predicting United Continental will post a loss of $1.03 a share.
United Continental is still smoothing out the kinks in its switchover to a new reservation system in March, CEO Jeff Smisek said. "The conversion was not perfect. There are still some issues," Smisek said. "We have everybody's focus and attention within the company on trying to remediate the last of them."
Unions representing employees of American Airlines support the merger of parent company AMR Corp. with another carrier such as US Airways, sources say. AMR Corp. filed for bankruptcy in November, but the unions have not gone public with support for the merger yet. "The unions are working together," a source said. "They are open to a merger, not circling the wagons against one."
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United Airlines pilots have hired a public relations firm to further negotiate a deal. The pilots will also mount a social media campaign as well. Jeff Smisek, the CEO of United, said the carrier is working toward a deal with the pilots.
Southwest Airlines CEO Gary Kelly, said American Airlines will be more competitive once parent company AMR Corp. emerges from bankruptcy. "I believe they will get their finances in order, they will get their costs down, and they will be a more formidable competitor because of that," Kelly said.
Columnist Virginia Postrel said Delta's plan to vertically integrate by purchasing an oil refinery does not make economic sense. "Delta doesn't need its own refinery to obtain jet fuel, which is traded in a thick worldwide market, any more than it needs to own a peanut farm to supply in-air snacks," Postrel writes.
Sen. Joe Lieberman, I-Conn., who chairs the Senate Homeland Security and Governmental Affairs Committee, said an agreement to allow the U.S. and Europe to share more airline passenger information will make air travel between the U.S. and Europe safer. "The agreement ensures that airlines will provide DHS access to specific passenger information 96 hours in advance of their flights to the U.S. -- instead of the current 72 hours -- so it can be compared to our terrorist watchlists and criminal and immigration databases," he said.
Two lawmakers are questioning the privacy implications of a program that would allow unmanned aircraft "to fly beside commercial airplanes in U.S. airspace," this blog says. Reps. Joe Barton, R-Texas, and Edward Markey, D-Mass., recently urged the Federal Aviation Administration to consider how the drones will affect privacy. The goal of drones for agencies is to improve security and prevent and identify natural disasters. "However, in addition to benefits, there is also potential for drone technology to enable invasive and pervasive surveillance without adequate privacy protections," the lawmakers wrote in a letter. "We are writing to express our concerns about the law's potential privacy implications and to requisition information about how the FAA is addressing these important matters."
United Airlines will seek to boost revenue this summer travel season by selling additional services and products, said CEO Jeff Smisek. While he declined to specify about what they will be, Smisek told reporters he is confident that passengers will be impressed. "I'm not allowed to talk about it, but they're going to be good and they're going to be cool," he said.
AirTran Airways' rebooking and bag-check fees will remain until the carrier's operations are fully merged with those of Southwest Airlines, in about 2014, said Southwest CEO Gary Kelly. "AirTran generates revenue its way; Southwest does business in a very different way. Customers understand it is a different brand with a different package," Kelly said.
Although the job market is picking up, wage growth is expected to plateau in the next few months, a Bloomberg BNA study says. "Especially for new employees starting out, wages are being depressed a little bit because of the large pool of unemployed workers," economist Kathryn Kobe says.