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Aviation History
1982
1982 - 0162.PDF
Western Airlines' unions to vote on pay cuts WESTERN AIRLINES' management is hopeful that the carrier's employee unions will accept substantial pay cuts, proposed as part of a financial plan to ensure its survival. According to a Western spokeswoman, the air line hopes to receive responses from its five unions by the end of the month, and believes that "there is a very good chance" they will be ac cepted. Western's new chairman Neil Bergt proposed pay cuts of up to 25 per cent last month, but the written sub missions put to the unions specified reductions between 10 and 15 per cent. About 1,100 non-union staff have already accepted the proposal. As well as stating the need for salary cuts, Bergt also axed 500 management staff; no further large-scale staff re ductions are expected, but there could be "short-term furloughs" for other employees, including union members. Bergt's aim is to cut West ern's labour costs from its current 38 per cent of revenues to a level com petitive with industry leaders North west, whose wages constitute about 25 per cent of revenues. The Western survival plan also en visages a considerable "revamping" of the airline's schedules, to be com pleted by "some time this spring". The review of service frequencies and schedules is to make Western more attractive to the prospective passen ger. The airline is also putting much more emphasis into belly-hold cargo business, and is launching "a big con tract services effort" to attract main tenance and ground services contracts from other carriers. Western's spokeswoman explains the airline's need to rethink its scheduling, and expand on the route structure it offers: "Western has always been a heavily leisure- orientated airline—it has tradition ally served many resort centres—and as discretionary income always falls off in times of recession, the airline has felt the effects of the current slump badly. So Western has been diversifying and developing into the US energy belt areas. It started serv ing Tulsa, Texas, and Albuquerque in 1981." Bergt now believes that Western can return to profitability by the third quarter of 1982, if the targets of his survival plan for the airline are achieved. According to the airline, newly introduced marketing promo tions are generating traffic. These in clude the offer of a round trip to Hawaii from anywhere on Western's US mainland network for $100 to any one who travels over 400 miles first class or full economy with the airline. Bergt's. merger plans for Western have received a setback from the Civil Aeronautics Board, which has re fused to allow the double sale of Wien Air Alaska (through Bergt's intermediary Eagle International) to go ahead as fast as Bergt wants. In stead of allowing the merger to pro ceed immediately under the terms of a special exemption provision, as Bergt requested, the CAB has said that the acquisition does not qualify, and must be considered under the normal CAB review process, which will take about seven months. Bergt has responded to this by saying that his own timetable for the merger en visaged it taking about the same time. The technicalities of the CAB ruling involve treating the double-shuffle deal as one transaction rather than as two separate purchases. The CAB has rubbed salt in the wound by criticising Bergt for failing to apply for approval of his "inter locking relationship" between West ern and the other carriers he con trols. If Western does take over Wien Air Alaska, Bergt will certainly be come a major figure in Alaskan avia tion, as he also owns cargo carrier Alaska International Air. The CAB has said that the Eagle/Western pur chase of Wien "raises significant con cerns" about the possible effects on competition in the Alaskan cargo in dustry. The CAB is considering "pos sible enforcement action" over The best view yet of the first A3I0 shows clearly how short its fuselage is compared to the A300 Bergt's airline dealings. Western does not believe that the CAB is seriously contemplating civil action against Bergt, because it says the Wien merger will not have anti competitive effects, and because Bergt will "keep himself divorced from the airlines' business" if the two carriers merge. Western oonfirims that the two carriers would become a single entity if the merger took place. Bergt has expressed scepticism over Air Florida's announced plans to take over Western. Western's spokes woman says that "Bergt points to the fact that Air Florida hasn't made any public tenders to Western's Board or Shareholders. He's open to good busi ness deals but doesn't think Air Florida's plan makes a lot of sense." Airliner market Aeritalia and Aerospatiale have an nounced the names of the airlines which have taken options on the ATR 42. US carriers to specify the type are: Command Airways, with three options; Pennsylvania Airlines, which has optioned two; Scheduled Skyways, with six; and Wright Airlines, with eight options. In Europe, Finnair (the first announced prospective customer) has taken five options, Air Littoral has taken two, Brit Air holds three, and Cimber Air three. South American carriers Saeta of Ecuador, and Colom bian carriers Aerocesar and Aerotal have taken two, two, and four respec tively, while Australian carrier Air Caledonia holds four. Air Jamaica has placed an order for two Airbus ASOOs, bearing out earlier reports that the carrier had taken options on two of the type. The air craft will be delivered in October this year; the early delivery date also in dicates that Air Jamaica has bad some sort of A300 commitment for some time. The airline has specified A300B4-200s with General Electric CF6-50C2 engines, with each aircraft to be configured to seat 12 first-class and 253 economy passengers. The air craft will enter service in November on Air Jamaica's high-density sched uled routes to New York and Miami, and will also serve tourist destina tions suoh as Los Angeles, Chicago, Dallas, and Atlanta from Kingston and Montego Bay. Orders for the A300 now stand at 258, with 69 options held. Atlantic Southwest Airlines of Atlanta has placed a C$35 million (£15-3 mil- 160 FLIGHT International, 23 January 1982
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