Airline merger & International air traffic

Airline merger

American Merger Talks Heat Up
US Airways, which has is pursuing a reluctant American Airlines, has signed a nondisclosure agreement with American’s parent company, AMR, according to a memo US Airways’ CEO Doug Parker sent to employees.

The two airlines have agreed to exchange confidential information to work in good faith on evaluating a potential combination. Parker said that the NDA means only that the airlines have agreed to talk about the possibility of merging. AMR’s CEO Tom Horton initially resisted the idea of a merger.

AMR has also signed an NDA with British Airways, Alaska Airlines, Frontier Airlines, Jet Blue Airways and Virgin America. (Source: press reports).

International Air Traffic Continues to Grow at a Slower Pace
Global air traffic grew 3.4% in July 2012 over a year earlier, down from a growth rate of 6.3% in June and 6.5% for the first half of the year, according to the International Air Traffic Association.

It blamed the slowdown on a recent fall in business confidence in many economies. Airlines are responding to slower growth by holding capacity, which means planes are flying full—and profitably. Traffic is growing, but at a slower pace, said Tony Tyler, IATA’s director general and CEO. And he said that, combined with rising fuel prices, means a tough second half of the year. (Source: IATA press release).

FAA to Study Use of Handhelds on Planes
The Federal Aviation Administration FAA has created a committee to study the use of portable electronic devices on planes. Right now, the FAA leaves the decision of how passengers can use handhelds in flight up to airlines.

The FAA committee will be made up of representatives of aircraft manufacturers, mobile technology providers, airlines, including flight attendants and pilots, as well as airline passenger organizations. Passengers are increasingly interested in staying connected while in flight. This is an effort to learn if there are ways for more electronic devices to be used without interfering with the radio frequencies pilots use.

The group will look at a variety of issues, including how to test for safety. The group is not looking at whether or not to allow cell phone use while in flight. (Source: FAA press release).

Delta to Reduce Mileage Rewards for Some Unpublished Fares
Delta Air Lines is reducing mileage passengers can earn when they buy certain unpublished fares. These include group fares, consolidator fares, tour or group package fares and student fares.

Travelers flying using negotiated corporate, governments and sports fares will continue to get full mileage credit. Other airlines also limit or provide no mileage awards for some unpublished fares. (Source: news reports).

TSA Expands Pre Program to Phoenix Sky Harbor
The Transportation Security Administration has introduced its Pre program at the Phoenix Sky Harbor Airport, with US Airways as its partner.

Participants who are from certain airline frequent flyer programs or who participate in the U.S. Customs and Border Protection’s Trusted Traveler program provide biometric information about themselves and qualify for expedited screening.

The Pre is now available in 22 airports with partner carriers US Airways, Alaska Airlines, American Airlines, Delta Air Lines and United Airlines. (Source: TSA press release).