Three collective bargaining agreements have been reached between the new American Airlines Group and its employees at US Airways. American Airlines Group was formed in December when Fort Worth, Texas-based American Airlines merged with US Airways. The agreements were reached with mechanics, fleet service and maintenance training specialists, who are members of the International Association of Machinists.
According to American Airlines Group the agreements will stay in effect with the US Air workers until a collective bargaining agreement which includes all 30,000 of the Group’s employees is reached.
“We are pleased we have reached these agreements,” Doug Parker, chairman and CEO of American Airlines, said in a statement. “These agreements will allow us to focus on the next steps for integrating our airlines, and we can now start the process of bringing these employee groups together with their co-workers from American through joint collective bargaining agreements.”
Record-breaking unseasonably cold temperatures caused by the meteorological
Cold Temperatures Require Planes to be De-Iced
phenomenon known as the Polar Vortex have disrupted air traffic across the eastern seaboard to the Midwest and as far south as Brownsville, Texas and Central Florida.
Over half the flights from Chicago’s O’Hare International Airport had to be cancelled due to frozen fuel supplies. Tuesday’s temperature registered as low as minus 12F in the Windy City.
According to FlightAware.com, an airline tracking website, about 4,000 flights across the country were cancelled, while about 7,500 were delayed. One of the problems caused by the weather was the inability of ground crews to tolerate staying outdoors for more than 15 minutes at a time due to the extreme temperatures. Hundreds of flights were forced to cancel by airlines such as United, Southwest and American.
“The fuel and glycol supplies are frozen at (Chicago O’Hare) and other airports in the Midwest and Northeast,” said Andrea Huguely, a spokeswoman for American Airlines Group. “We are unable to pump fuel and or de-ice.”
JetBlue just finished spending five days catching up with their schedules after last week’s snowstorm caused delays and cancellations. The most recent bout with bad weather caused the airline to stop their operations at three airports in the New York area and at Boston Logan International Airport. JetBlue gave their crews a chance to rest and recover from the frigid temperatures from 5pm on Monday evening until 10am on Tuesday morning.
Not everything came to a standstill due to the freezing cold, however. One woman in a Chicago suburb was seen shoveling snow from her driveway while her pickup truck was idling to warm up a bit. When she and her car is ready she will be making the short drive to the mall where she is employed.
“I just wish I could get the day off too but it would take more than a bit of weather to close down the mall where I work,” she said.
A new mega-airline company will be created when American Airlines and US Airways take advantage of the Department of Justice’s decision to allow the two companies to merge, making them the world’s most expansive airline.
Last August the US government tried to prevent the merger, claiming competition would be restricted, causing ticket prices to rise on hundreds of routes around the country.
The airlines counter that this deal actually will increase competition now that there is a real competitor to United Airlines and Delta Air Lines, two companies which recently grew after their own mergers.
Tuesday’s settlement with the Justice Department still requires the approval of a federal judge in Washington, DC. One requirement of the agreement is that American and US Airways will need to give up their take-off and landing rights at Reagan National in DC and La Guardia Airport in New York. They will also need to give up some of their gates at airports in Boston, Chicago, Los Angeles, Dallas and Miami, allowing low-cost carriers to have them. This move is to offset the impact of the merger on smaller airlines, increasing competition.
Eric Holder, the attorney general, said that the agreement would increase competition on nonstop and connection flights all over the country. The Justice Department said that the relinquishing of gates and routes at the country’s major airports by the newly merged entity was a “groundbreaking” move.
US Airways Chief Executive Doug Parker, who will head the newly merged company said,
“This is very good news and we are grateful to all who have made it happen.”
He added his thanks to politicians and business leaders who supported US Airways and helped push for the merger. The companies are expected to complete the move to merger in December.
Airlines today simply cannot afford to leave empty seats alone; as fuel costs and other expenses climb almost as quickly as a plane at take-off, airlines are being forced to push their load factors to the limits.
If you have felt that planes are becoming increasingly more crowded over the years, you are right. This past summer was one of the best summer seasons in airline history, with summer always being the busiest season for airlines. The US Airways Group stretched their load capacity up to a record 87.9 percent in August. This August record was just one more in a series of monthly records for load capacity for this airline. American Airlines, which is a proposed merger partner with US Airways, also had a load capacity record in May of 84 percent. Other airlines have similar figures: United Airlines hit 87.2 percent in July, and Delta soared to 87.3 percent in August.
Rising jet fuel prices are driving airlines to stuff in travelers. Over the past ten years the annual average load has climbed from 71.9 percent in 2002 to 82.8 percent in 2012. The increasing load capacity has not resulted in an increase in profits- the load capacity “break-even” point for US flights has gone from 69.4 percent in 2000 to a whopping 80.9 percent last year.
“One reason planes are fuller is because they have to be to avoid losing money,” says John Heimlich, chief economist at Airlines for America, the U.S. airlines’ trade group. “The airlines had to push really hard on the load-factor lever because they couldn’t push hard with the pricing.”
Don’t get too excited. Although a consumer survey shows that the airline industry has crept up a few notches on the customer happiness scale, the sector as a whole is still uncomfortably close to the bottom of the ocean of 40 rated industries.
The yearly survey, the American Customer Satisfaction Index, asked 70,000 US consumers about their feelings on 40 key industries, from clothing, hospitals and banks to insurance companies and more. The airline industry managed to top only two sectors, television and internet service providers.
Despite their low position airlines have been inching up the scale. Last year the industry scored a not-too-good 67 out of 100 while this year they received an improved 69, a score that represents their highest in almost twenty years.
Low-priced airlines scored higher than major players in the industry. JetBlue topped the list for the second year in a row, up two percent to 83, while Southwest Airlines held the second spot, scoring 81, up five percent since last year. Major airlines generally scored in the 60s.
“Airlines continue to improve service for business travelers,” said survey founder and Chairman Claes Fornell.
The survey showed that while certain aspects of the industry were highly rated, such as making reservations, check-in, timeliness, baggage handling and crew courtesy. The main element of flying however, the flight itself, was considered by consumers to be an unpleasant experience.
“Passengers reserve their harshest criticism for the principal part of the experience – the flight itself,” the report said. Food and beverage service, entertainment and worst of all, seat comfort were all rated poorly.
The hope that these aspects of flying will change is a dim hope, Fornell says.
“The cost structure for airlines – high fixed costs and large variations in fuel price – coupled with high price sensitivity for a large segment of the market, make it difficult to improve quality of service.”
“Also, as long as all airlines are bad, they will not be punished much by customer defections.”
