August 31, 2006
China Route Case Update and News Follow-Ups
China Route Case Update
By August 17, 2006 airlines participating in the 2007 U.S.-China Combination and All-Cargo Frequency Allocation Proceeding were required to make their final selection of the U.S. and Chinese gateway points they propose to serve. The routes carriers filed for are as follows:
1) American - 7 weekly frequencies for Dallas-Fort Worth/Beijing (non-stop)
2) Continental - 7 weekly frequencies for New York-Newark/Shanghai (non-stop)
3) Northwest - 7 weekly frequencies for Detroit/Shanghai (non-stop)
4) United - 7 weekly frequencies for Washington D.C.-Dulles/Beijing (non-stop)
1) FedEx - 4 weekly frequencies (Zone 1) with no routing specified
2) Northwest - 4 weekly frequencies Anchorage/Osaka/Guangzhou
3) Polar - 4 weekly frequencies Los Angeles, Chicago and Anchorage/Beijing
On August 24, the U.S. DOT granted the all-cargo applicants the frequencies they applied for without further procedures because there were 15 frequencies available and the carriers only applied for 12. The carriers cannot begin using the frequencies before March 25, 2007. Going forward, only the combination carriers will take part in a full carrier selection proceeding.
There was an interesting Reuters story today emphasizing the importance of the upcoming U.S. District Court decision in the dispute between Northwest and its flight attendants union. According to a source quoted in the story, "If the court were to hold that the flight attendants’ strike was lawful, and if that ruling were to be upheld on appeal, it would certainly change the dynamic of bargaining in the airline industry."
According to The Times (London), in BAA's final submission to the UK Office of Fair Trading for its study on the UK airports market, BAA argued that a more fragmented ownership structure would undermine vitally needed investment in airport capacity. The outcome of this study has some US relevance as well since BAA has been mentioned as a possible bidder if the City of Chicago decides to privatize Midway Airport.
August 28, 2006
Northwest Airlines Temporary Injunction
Judge Victor Marrero of the U.S. District Court for the Southern District of New York issued a temporary injunction on August 25th preventing Northwest Airlines’ flight attendants from conducting any strike or work action. The judge said that a decision will be made this week on whether or not Northwest Airlines cabin staff have the right to engage in their strategy of targeted "CHAOS" strikes.
Chicago O’Hare and New York LaGuardia Congestion Issues
From ATW Online: "US FAA released a final albeit interim rule finalizing slot limits at Chicago O'Hare that originally were imposed on a temporary basis in 2004. The rule takes effect Oct. 29, 2006, and terminates Oct. 31, 2008, at which point it is expected that the opening of a new runway under the O'Hare Modernization Plan will allow the airfield to accommodate more than ‘50,000 additional forecast operations’ annually."
The FAA is proposing a new rule for congestion management at New York’s LaGuardia Airport that will take effect when the High Density Rule expires there on January 1, 2007. According to the FAA: "The rule, if adopted, would establish an operational limit on the number of aircraft landing and taking off at the airport. To offset the effect of this limit, the proposed rule would increase utilization of the airport by encouraging the use of larger aircraft through implementing an airport-wide, average aircraft size requirement designed to increase the number of passengers that may use the airport within the overall proposed operational limits."
This is not the first time that the FAA has proposed aircraft size requirements as a potential solution to congestion problems. It will be interesting to see if they are successful with this attempt.
UK Airlines Call for BAA’s Breakup
From ATW Online: "British Airways, Ryanair and easyJet yesterday called on the UK Office of Fair Trading to refer its study on the UK airports market to the Competition Commission, citing monopolistic conditions in the market and calling for the breakup of the airports operator. OFT in June launched a consultation to determine whether the current market structure benefitted consumers after research showed that about two-thirds of UK air travelers--and nine out of 10 London passengers--fly through a BAA airport. Interestingly, the UK House of Commons Transport Committee called for the breakup of BAA as far back as 1996, stating that Heathrow, Gatwick and Stansted should not be run by the same company."
Ryanair Lawsuit Against UK Government
Ryanair submitted a claim for compensation with the UK government for £3.3 million pounds ($5.7 million US) for losses it says it incurred because of tighter aviation security in the wake of the foiled UK airliner bombing plot. According to the airline, the claim "reflects Ryanair’s losses from cancellations and lost bookings over the week of 10-16 August only." Ryanair also called on the UK government to "restore UK airport security to the same IATA norms that are followed at every other European international airport, and on every inbound flight to the UK."