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Americas: February 2006 Archives

A Symbol of spirits past

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It's not hard to read a lot into a symbol - especially when it's a self-declared symbol like "The Spirit of Delta", a Boeing 767 that was paid for through a voluntary fund drive begun by employees. Back in 1982, three Delta flight attendants began the campaign to persuade others at the nation's number-three airline to sign up for payroll deductions to finance the purchase, which was about $30 million in then-dollars.


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Much has changed since then: Delta is desperately bankrupt, riven by internal strife, its employee contributions are now involuntary, and the carrier is retiring all of its older 767s. 'Spirit' is making a farewell tour of Delta cities, and after 3 March goes into a hangar at Delta's Atlanta Hartsfield-Jackson airport hub.


That is perhaps a happier fate than the airline's other vintage 767s, many of which will be converted to carry cargo in the overnight package-express trade, some of which have gone to Hawaiian Airlines, and some of which are headed, along with the type of spirit that Delta people showed nearly a quarter-century ago, for the runway of memory.

Capitol gains and losses

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When the wise men and women of the United States Congress aren’t back home mendin’ fences, kissin’ babies or chompin’ down corn at the country fair, they do spend time under the Capitol dome, and some of the things they do here can easily escape notice of the newshounds chasing the latest lobbying or pork barrel story. So here are a few tidbits:


Penchant for reform: Speaking of lobbying scandals, the House leadership has changed now that Republican leader Tom DeLay, indicted in his Texas home district, has stepped aside from leadership posts; the outcome of a closely contested election to succeed him has some interesting news for the airlines.


The winner, John Boehner, may well be known to the airline industry not because of his politics - he’s a fairly conservative Republican from Ohio - but because of his interest in pension and retirement problems. Long the chairman of the House Committee on Education and Workforce - still known by its old moniker 'the Labour Committee' - Boehner pushed a pension reform bill through the House in late December.


That’s the good news. The bad news is that Boehner refused to put any special consideration for airlines in his bill, even though the counterpart Senate bill has some provisions desired by airline lobbyists. The two versions will be reconciled in a differences or conference committee, and now that Boehner is in such a high-profile position, hopes are that he will compromise. Interesting sidelight: Boehner’s pension bill nearly died in December when the acting House leader, the aptly named Roy Blunt, blocked it. Boehner’s main opponent in his winning race: the self-same Mr. Blunt.


The ‘F’ word and the ‘U’ word: They’re both back in Washington - User Fees that is. The airlines are gearing up for a big legislative battle over the formula for funding the FAA, the agency that employs the nation’s air traffic controllers and runs and maintains its radar, en-route, terminal, and tower facilities among other segments of the infrastructure.


The fight is over who pays how much for what, and the airlines, in the person of Air Transport Association chief executive Jim May, have already begun their campaign to get private pilots – general aviation - to pay more.


The last FAA rewrite was signed in late 20003 after monumental battles over user fees and ‘privatisation,’ and this time around, the FAA really needs the money, says Transportation Secretary Norm Mineta. So the DoT, which is the FAA’s parent agency, has allied with the airlines to move to force private pilots into paying more for their air traffic services. Both have begun using similar phrases: May says that air-traffic charges and fees “should be based on proportional use”. Mineta told another aviation group that “I expect that we are going to see a cost-based plan that creates a more direct relationship between revenue collected and services provided”. He called for a “stable and predictable” source of revenue for FAA capital improvements. To private pilots and corporate aviation, this is anathema. His words “sure sounded like an oblique reference to user fees”, Doug MacNair, the Experimental Aircraft Association’s vice-president of government relations, said after Mineta’s talk. It will be an interesting year.


Man on the move: They let the post sit vacant for a year, but the White House has finally made its pick for US Ambassador to ICAO, choosing Washington lawyer Don Bliss to represent its interests at the international body. Bliss, head of the O’Melveny & Myers aviation practice, is well-known in Washington circles, having worked at the FAA and having written a book on customer service. (This book, we hasten to add, was NOT in the series known as the “very thin-book” series.) Active in the city's aviation organisations, Bliss is widely regarded as a genial past master of these issues; he tells Airline Business that he's looking forward to getting his diplomatic passport - to make it easier to get through airport queues.


 


 

United bets on Super Bowl

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United Airlines' big day is Wednesday but it is waiting until Sunday to celebrate, when it is betting on a big sports match to bring back the business. On 1 February it formally emerges from its three-year bankruptcy - the most expensive airline reorganisation ever - having eliminated 25,500 jobs, cut $7 billion in total spending, and attracted $3 billion in financing to fund its exit from bankruptcy court protection.


Starting Sunday, United is spending big in its bid to attract high-paying passengers, pouring dollars into the most expensive advertising arena of all, the Super Bowl of American football. These ads, which cost as much as $2.5 million for 30 seconds of airtime to reach about 130 million people, will run during the Sunday game, at about the most expensive time, just before the half-time break.


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In an event watched as closely for its marketing, sponsorships and advertising as for its kicks, passes and touchdowns, presentations from companies such as Ford or Budweiser have traditionally made as much news as the game itself.


United is going at it with puppets and animation, using them to revive a theme it has used for a decade: a parent's business trip, from a child's point of view. These ads include "Daddy the Dragon Slayer" as a new theme. One advertising agency executive, Stuart d'Rozario of Fallon Worldwide, says: "A parent's business trip seen through a child's eyes seemed like rich creative territory."  The ads use the music of Gershwin's 'Rhapsody in Blue,' which United bought back in the 1980s in a then-unprecedented move for an airline.


The ads come days after United announced its 22nd consecutive quarter of deficits - $17 billion for the 2005 final period, including reorganisation costs - and a $21.2 billion annual net loss.


Ironic note: the football game will be played in Detroit, where Southwest Airlines, the Official Airline of the National Football League, will have billboard ads throughout the stadium. And that is a dragon United can slay only in its dreams.