Airline executives whose predictions of regional divestitures raised eyebrows just two years ago watched their prophesies turn to hard reality in late February, as Northwest Airlines announced its intention to spin off its Memphis-based Express Airlines I subsidiary and Continental Airlines revisited its plans to divest itself from Continental Express.
American Airlines has responded to a contractual limit on ASM growth at its regional affiliates with a plan to strip the AA* code from certain St. Louis-based flights operated by American Connection partners Chautauqua, Trans States and Corporate Airlines. American claims the move will give it another six to nine months to decide the fate of its San Juan, Puerto Rico-based Executive Airlines subsidiary.
Scope-clause negotiations between US Airways and the Air Line Pilots Association reached an impasse just days after the beleaguered airline early last month recruited former Continental Express president David Siegel to replace Stephen Wolf as CEO. The talks broke down soon after the sides reported significant progress toward a settlement, the outcome of which could determine the airline’s direction for years to come.
Even though regional airline traffic is up 13 percent from the second quarter of last year, and regional airliners account for 34 percent of the overall domestic fleet, the industry cannot continue to pay for security expenses.
Obstacles against the development of a thriving regional airline industry in Latin America in many respects look as formidable as ever. Lack of capital availability, inadequate airport infrastructure, government interference and a lack of open-skies treaties between nations continue to hinder progress in a region that, in terms of sheer size, holds as much potential for growth as any other in the world.
AMR’s long-anticipated plan to shed its San Juan, Puerto Rico-based Executive Airlines division appeared all but secured after American Eagle signed a letter of intent last month to sell the airline to Puerto Rican hotelier and founder of Executive Air Charter Joaquin Bolivar.
After months of heated debate over future regional jet jobs at US Airways, the pilots of wholly owned subsidiaries Piedmont and Allegheny Airlines ratified new concessionary labor agreements with their bankrupt employers, bringing the Arlington, Va.-based airline a step closer to meeting the conditions of a $900 million federal loan guarantee.
US Airways’ June 27 announcement that it would replace Boeing 737-300s with de Havilland Dash 8s on its Charlotte to Asheville, N.C., route not only illustrated the continuing plight of the nation’s sixth-largest airline, it reinforced a trend long feared by mainline pilot groups.
American Airlines’ decision last month to retire 74 more Fokker 100s and nine Boeing 767-300s will mean continued capacity stagnation at its wholly owned American Eagle subsidiary, as long as the Allied Pilots Association has its way.
Perhaps the sector of aviation most visibly affected by the events of September 11, the airline industry continues its struggle toward recovery, as security burdens, economic jitters and lingering public apprehension over flying conspire to sustain the worst slump in the history of the business.