Airline Finance News - North America

AirGuide Business, July 14, 2008

United Airlines

United Airlines and the International Assn. of Machinists reached agreement on a voluntary separation program that will be available for up to 400 customer service and ramp employees aged at least 45 and with 15 years of service. United last month announced plans to cut 1,400-1,600 jobs through 2009. 7/11/2008

United Airlines

United Airlines parent UAL Corp. announced Friday that its second-quarter financial result, expected to be revealed July 22, will be impacted by $2.6-$2.7 billion in noncash accounting charges. Up to $2.2-$2.3 billion is related to impairment of goodwill. "Following an evaluation of the carrying value of the company's goodwill pursuant to FAS 142, the company has concluded that the entire value of goodwill on its books has to be written off," UAL said. Other charges comprise $246 million related to impairment of specific 737s scheduled for retirement, pre-delivery deposits and "certain indefinite-lived intangible assets other than goodwill;" $82 million related to staff reductions associated with recently announced capacity cuts; $60 million related to "certain projects that have been terminated or indefinitely deferred" and to an increase in certain employee benefits. Charges related to UA's capacity and labor reductions will follow in future quarters, the company said. 7/11/2008

United Airlines, Delta Air Lines

United Airlines and Delta Air Lines, seeking new revenue sources amid record fuel costs, are starting to place advertisements, coupons and weather forecasts on boarding passes when travelers check in online. Sojern's service debuts Tuesday on Delta's Web site, with ads customized to passengers' destinations, said the co-founder Duane Woerth, a former Air Line Pilots Association president. Sprucing up the passes with discounts and promotions is a departure from the industry's embrace of fees such as $15 for a checked bag to defray a doubling in the price of jet fuel in the past year. Airlines will share in the startup's ad revenue. 7/14/2008

US Airways

US Airways found itself countering allegations again today by the three-month-old union that now represents its pilots, the US Airline Pilots Association (USAPA), that its planes are flying with potentially unsafe levels of fuel. The matter became public when USAPA paid for a full-page ad in USA Today claiming pilots were being intimidated to fly with less fuel to save money. The issue was largely ignored by most news outlets Wednesday until it became the topic of Larry King on CNN, and then was widely carried by the major networks. USAPA Representative James Ray told AviationWeek the crux of the issue is that eight pilots out of 5,200 were "disciplined" by being forced to take "unapproved" training on how to determine what is an acceptable level of fuel. USAPA says the eight pilots, all international widebody captains, were not adding large amounts of fuel; one only added extra fuel 17% of the time, and the most egregious case was a pilot who added fuel 44% of the time. Ray says the union went public because individual pilot complaints and a union complaint to the FAA did not yield results. However, the union just filed its complaint last week, Ray said. Also last week, USAPA went to US Airways President Scott Kirby to complain, and promised him they would not go public if he agreed to train all of the pilots, and not just eight, according to Ray. Reported by AWST. 7/17/2008