Monthly Archives: March 2007

DOT Tells Virgin America They Can Start Up….But With Conditions

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For Hire: Ex Airline CEO and President. Completely flexible. Can dress up or dress down — depending upon the company culture and opportunity. Please call Fred Reid.



Virgin America has been given the okay to fly by the DOT.

But, as anticipated, not without restrictions.

Those restrictions include:

“**Requiring that the disinterested directors on the Virgin America board (that is, U.S. citizens) separately approve of the appointment or replacement of the trustee of Virgin Group’s shareholdings.

**Amending the voting trust agreement to require that the Trustee vote its shares proportionally to the other shareholders as to any matter that, in the opinion of the U.S. investor directors, creates a conflict of interest between the interests of Virgin Group and that of U.S. shareholders.

**Modifying the Virgin Trademark License Agreement to remove certain geographic and operational restrictions on Virgin America and the requirement that it pay royalties to the Virgin Group should the applicant conduct operations independent of the Virgin name.

**Confirming that the current CEO has terminated employment with the applicant within 90 days of the certificate being issued and any follow-on consultancy within 180 days following termination of employment.

**Submitting copies of all executed and signed agreements prior to certification.

**Reporting to the Department in advance if any additional loans (or other debt funding) are to be provided to it from the Virgin Group.”



Whew. I’m kind of surprised that the DOT took the airline up on its “sacrificial offering” to fire Reid. I’m also not sure if Richard Branson is going to be too happy about the restrictions to be placed on the Virgin Trademark License Agreement.

Then again, I guess if I were Virgin, I’d probably go with the deal and work out any infractions or problems after the fact.

Though the decision is tentative, the DOT’s rulings in such matters have historically not been overturned. The DOT said “interested parties may file an objection to the proposed decision within 21 calendar days.”

It wasn’t immediately clear just how soon Virgin America would begin flying after the obligatory 21-day period has passed.

The Beast Has Arrived

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For you true airline geeks out there, yesterday and today are big days. The Beast, aka the Airbus A380 made its first arrival in the U.S. yesterday at New York, Dulles and Los Angeles. Today — it has just touched down in Chicago.

I’m sure you’ve seen plenty of the pictures and/or seen videos of its various arrivals.

Interesting thing about the Beast. In talking to a couple of pilots who have seen data from the aircraft’s proving runs, and after reading a report from a team of pilots working the initial runs, it appears that the aircraft is surprisingly nimble. And powerful. Not beastly or sloth-like at all in the way it can perform emergency actions or avoidance maneuvers. Bottomline seems to be that the aircraft is surprisingly agile.

Cool. I certainly hope I get the chance to fly on one at some point.

DCA

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Jonathan reports that his US Airways flight to Indy is now boarding. They’ve been advised of how long the crew has before they go illegal (sounds like there is plenty of time) and that they will be delayed a bit after they taxi out while the plane is de-iced.

Nice move on the part of US Airways to tell the passengers that their crew is not in danger of going over their time limits.

Anyone else doing this?

Aside from that, he said the airport was a mess, and that it seemed like 10,000 people were trying to use their cell phones. Consequently, cell service sucked.

Lovely.

As for here, it’s currently a toasty 96 degrees in Spring Training Land, aka Phoenix.

Checking In

We’re on track. No problems. Which is more than I can say if you are traveling in the Northeast today. Our web editor left his place of work about an hour ago for DCA and a supposed flight to Indianapolis.

Why do I find his optimism to even make the attempt to go to the airport somewhat endearing?

I wouldn’t even want to bet on this one. But I know I’m going to get a message here shortly and it’s not going to be a good one.

Meanwhile, we — that would be the cross-country split Worldwide Headquarters staff — is in final edits on PlaneBusiness Banter. Look for it to be posted, oh, in about two hours or so. Maybe a little sooner.

In the meantime, watch out for those ice pellets.

PBB Posting Update

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Okay, no unexpected delays this week. Just a pre-announced Friday posting!

Heh.

Yep. Because I was otherwise occupied all week — first at the ISTAT conference and then at the US Airways’ media day yesterday — I’ll be posting Friday this week.

Thanks guys!

Holly Takes On the Track

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The F1 Track that is.

Figured you guys would get a kick out of seeing yours truly before my big race Tuesday night. That’s me along with Derek Kerr, CFO of US Airways, before our heat at the F1 Racing facility in Phoenix.

Yes, thank goodness I wasn’t in the same heat as US Airways President Scott Kirby. The guys in that heat were far too competitive for me. Melanie Trottman from the Wall Street Journal, Doug Parker, CEO of US Airways, Mary Schlangenstein from Bloomberg, Bob Mann, Scott Hamilton, Derek, Andrea Rader, director of corporate communications at US Airways, and the red-hot Elise Eberwein from US Airways, were some of the folks in my group.

So who won? Motor-Mouth, er, Elise. (Motor-Mouth was her racing name.) No, I didn’t come in last. But I didn’t exactly tear up the track either. I can see that the more you do this, the better you get. And I, after all, was a mere rookie.

I tell you what. It was certainly easy to tell which one was Elise, as she didn’t have a suit on and as she flew by you, you’d just see her hair flying past you. I think she passed me at least three times.

She and Melanie also got tangled up on one of the curves. I managed to avoid the fray.

Oh, yes, Doug came in second. And he was not happy about finishing second to a. …..girl. He claimed the time-keeping mechanism for the race must have been off. (You don’t race laps, you’re simply racing against the clock, as each cart is electronically tracked.)

It was a blast. These things go about 45 miles an hour, and I tell you what — racing these gives you a much better appreciation for the stamina and strength it takes to race bigger things. Your upper body strength has to be pretty damn good!

Good time was had by all. This was a great way to kick off media day festivities at US Airways.

For You Airline Leasing Observers Out There

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More from ISTAT.

One of the more interesting comments made from one of the participants of a panel discussion yesterday afternoon on aircraft finance involved the handful of aircraft leasing entities who have gone public.

Companies like AirCastle or AerCap for instance.

As one person said yesterday, the leasing market used to be dominated by two players — GECAS and ILFC. With deep pockets tied to huge parent companies, these two have had the financial flexibility to outmuscle their competitors for years.

But with public equity markets now giving more financial heft to smaller players — this trend should start to change the dynamics of this playing field.

Daylight Savings Time Sucks When You Are in Arizona

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Yikes. It’s only 5:27 here. But, it’s 8:27 in New York.

The day is gone. Where did it go?

Hi there. Reporting in from today’s session at the ISTAT Conference being held at the J.W. Marriott Desert Ridge Resort.

Quick fact: There are more than 1000 people registered for this event this year. Just amazing.

Everybody seems to be happy. Lessors are making money. Banks are making money. Investment firms are making money. Airplane manufacturers are, for the most part, making money.

That is why this conference is usually much different than one that concentrates on airline people. At this one, everyone is usually making money. Good economy, bad economy. It really doesn’t make much difference.

We heard from John Leahy today, head of Airbus. I have to say, it was probably the most humble presentation I’ve heard him give at ISTAT. Ever. And that was a good thing. He made fun of the company’s predicament — wrapped around slides that showed why the Airbus A330 still kicks butt, why the A350 will out-perform the 787, and why the A380 is still a wanted beast — at least for passenger airlines.

One thing is for sure — John is one of the best salespeople out there. Period. And he was in rare form today. Humble, apologetic, and humorous. It was the only way to play the situation — and he did a good job at it.

Tomorrow, it’s Scott Carson’s turn to give us his dog and pony show about Boeing and its current status. As my seat mate said to me today, “Tomorrow all those columns will be reversed and the Boeing airplane will be the one that is least expensive, most efficient, and better on the environment.”

No doubt.

US Airways’ CEO Doug Parker kicked off the conference this morning — speaking mostly about industry consolidation. He says, and his comments were echoed by several panelists later in the day, that for now, consolidation in the industry is a dead issue. Airlines are feeling too fat and happy now — everyone will have to wait for the next downturn.

I agree.

Speaking of, there doesn’t seem to be much positive sentiment for the AirTran deal out here. At least not with the folks I’ve talked to. What’s the biggest reason I hear for a lack of support? Bad timing.

They should have tried to make a play for Midwest, or pushed the issue, when Midwest was barely alive and gasping for air. Not now.

More later.

A Sunday Hello

Hi guys. Just thought I’d drop in and say hello on what is a drop dead gorgeous day here in the Valley of the Sun.

I’m in Phoenix for the annual ISTAT conference that starts today and really gets cranking tomorrow.

Ah, and about Foto Friday last week — no, I didn’t forget. We’ll play catch up this week. As I wrote last Friday, I had some elder care issues that I had to deal with Friday — and that kind of backed me up on a lot of fronts.

But you know — we’re all going to be there someday. Old that is. So that’s just the way things are. I figure my parents put up with me when I was little and a pain in the neck — this is the least I can do for them.

Heh.

But have no fear. I’ll have some new shots for you this Friday.

As for the trip report out here — I was a happy camper as I once again scored a cheap first class seat on my Southwest nonstop flight. Yep, even though I was about 12 out in the “A” group, my uncanny ability to persevere came through again. I shared the first class emergency row exit with two nice people as well — was almost as much fun as the old lounge lizard days.

We arrived 20 minutes early and my bag was out pretty quickly.

Great flight.

While the flight experience was good yesterday, I have to ask the powers that be — what the heck has happened to the Southwest Airlines‘ in-flight magazine? Oh, I know it’s not being published by the folks over at AMR anymore. I know the change took place in January. This is more of a rhetorical rant than an actual question.

Has anyone else seen one? This was the first revamped issue I had seen. I hate it. Just simply hate it! Spirit always had excellent, well-written stories. It was the best in-flight magazine out there. I rarely left a plane without taking the magazine with me, because of one or more things in there that were worth keeping.

This thing? In-your-face big typefaces that seem more adept for a first grade reader, writing that is surface and shallow, nothing but one page fluff stories.

Seriously — somebody needs to do something about this — because if I were an advertiser, I’d not be very happy with this product.

Okay, there’s my one allowed rant for the day.

Talk to you later guys! Have a good rest of the weekend!