Sky Talk

Delta, Midwest expand alliance

Delta Air Lines and Midwest Airlines said this morning that they're expanding an alliance that will include reciprocity between frequent flier programs, joint marketing efforts and expanded access to airport lounges throughout North America.

The deal basically extends Midwest's alliance with Northwest to Delta (which acquired Northwest last year). Northwest was a minority investor in Milwaukee-based Midwest, a small airline that has an extremely loyal following.

- Trebor Banstetter

Delta, Northwest traffic down

Delta and its new subsidiary, Northwest, reported declines in traffic for January - not surprising, given the plunge in demand for travel.

Delta's domestic traffic was down nearly 7 percent, and its overall traffic dropped by about 2 percent. Capacity was down by just under 2 percent systemwide, so aircraft passenger load factors edged up slightly.

Northwest, meanwhile, saw a sharper drop, with domestic traffic down 10 percent and total traffic declining by 8 percent. That was ahead of the airline's 6 percent capacity cut, so passenger loads dropped a bit during the month.

American and Southwest have also reported significant declines in passenger traffic.

- Trebor Banstetter

Hedging woes bite Northwest

Much like Southwest, Northwest Airlines was hit with a big non-cash charge on the value of its outstanding fuel charges in the third quarter, which pushed the airline to a $317 million loss. The accounting charge totaled $410 million.

Oil prices, meanwhile, have dropped below $70 per barrel, which is pushing up airline stocks in morning trading.

- Trebor Banstetter

Shareholders sign off on Delta, NW deal

In a not-very-surprising move, shareholders of Delta and Northwest overwhelmingly approved the pending merger between the two companies today.

"We appreciate that stockholders recognize the benefits the Delta-Northwest merger will offer our company, customers, employees, and the communities we serve. This is another milestone toward completing a merger that brings together two unique airlines with complementary strengths that will offer unmatched global service," Richard Anderson, CEO of Delta, said in a prepared statement.

If it gets the required approval from government regulators, the merged airlines - which will be called Delta - will surpass American as the world's largest carrier.

Keep reading for the complete release from the two airlines.

- Trebor Banstetter

Delta CEO: Big hurdles remain in merger

The Atlanta Constitution-Journal published an interesting interview with Delta CEO Richard Anderson, who outlined the challenges that remain in his quest to create the world's largest airline by merging with Northwest. You can read the story here.

- Trebor Banstetter

NW posts loss, shares up

Northwest Airlines said this morning it lost $377 million during the second quarter, a bit ahead of expectations when charges were excluded. That has pushed the airline's stock up 98 cents at mid-morning, an increase of about 10 percent.

AMR stock, meanwhile, continues to rise, up 67 cents, or nearly 7 percent, to $9.92 in mid morning trading. That follows a day in which shares jumped nearly 40 percent.

Airline stocks are rising despite the steep second-quarter losses. So far, the big airlines have posted losses topping $6 billion for the quarter. That figure includes a lot of one-time fees, extra charges and writedowns, but it's still a mind-boggling number.

- Trebor Banstetter

US Airways, NWA, can suspend China flights

US Airways and Northwest Airlines, seeking to pare capacity because of rising fuel costs, won U.S. permission to suspend some China flights without losing rights to fly there later, Bloomberg News reports.

• US Airways can begin its new Philadelphia-Beijing flights March 25, 2010, one year later than planned, the Transportation Department said.
• Northwest can suspend the daily U.S.-Guangzhou cargo flights it was operating, the agency said.
• The U.S. denied seven carriers’ request for blanket authority to suspend international routes, saying it will decide requests individually. US Airways, Northwest, American, United, Delta, Continental and Alaska Air made the request.

U.S. airlines are collectively cutting 20,000 jobs and parking 430 planes to shrink operations after jet-fuel prices doubled in the past year. Carriers need U.S. approval to cut limited-entry international routes or they risk losing those flights to rivals when the economy improves.

US Airways, which last year won permission for its first China flight, requested the one-year delay in May.

The Tempe, Arizona-based carrier said fuel costs made the flight “uneconomic” during 2009. Northwest, which said in April it would suspend Guangzhou all-cargo flights this month, had sought permission to resume the service “as warranted by fuel and economic conditions” any time through March 25, 2011.

The seven carriers sought waiver authority last month without saying how many international routes they may trim or for how long. The agency said it rejected the blanket waiver because each limited-entry market is different.

-- Scott Nishimura

Delta, Northwest pilots reach tentative agreement

It looks like the unions representing Delta and Northwest pilots have forged a tentative agreement for a joint contract when the two carriers merge. They also have established a process to establish a single pilot seniority list, which had been a major sticking point in the past.

The contract still needs to be approved by pilots from both carriers. Keep reading for press releases from Delta and the union.

- Trebor Banstetter

United's $10-$60 fare hike "holding steady"

Major carriers dropped fares by as much as $30 roundtrip largely on routes where they compete against Southwest Airlines.

But the up-to-$60 roundtrip airfare hike initiated by United Airlines Thursday, and matched by American, Delta, Northwest, Continental and US Airways over the weekend, "is still holding steady," Rick Seaney of farecompare.com reports Monday.

None of the fare cuts Sunday night "drastically changed" the matching on United's fare hike, Seaney said.

"Typically, of most airfare hikes this year, the legacy airlines have been very cautious about increasing on those routes with heavy competition," Seaney said. "Additionally, airlines continue to discount -- most for travel on off-peak travel days (Tuesday, Wednesday, Saturday), firing out short duration sales which are almost always matched by competitors."

Here's Seaney's summary of Sunday's fare activity:

• American Airlines dropped prices by $10-$30 roundtrip on "a few thousand city pairs." The "top 10" cities with $30 price drops include Providence, San Antonio, Tampa, Baltimore, Seattle, San Diego, Hartford, Albany, Las Vegas, and Philadelphia, "all overlapping with Southwest," Seaney said.
• Continental Airlines dropped prices by $30 roundtrip on a "few hundred city pairs," Seaney said. The top 10 cities with $30 roundtrip price drops include Portland, Maine; Burlington, Vt.; Boston; Rochester, N.Y.; Syracuse; Newark; Richmond; Sarasota, Fla.; New York; and Buffalo, "mostly overlapping with Jet Blue," Seaney said.
• US Airways increased airfares by $32 roundtrip to Hawaii.

United's fare hike was the 16th attempted by airlines this year. Twelve have been successful.

-- Scott Nishimura

Northwest becomes last major to match United hike

Northwest Airlines matched United's airfare hike of up to $60 roundtrip, becoming the last of the six majors including American Airlines to climb aboard the industry's latest effort to raise prices.

American also raised fares  by $6-$8 roundtrip on what appears to be largely routes that overlap with discounter Southwest Airlines, said Rick Seaney of farecompare.com. The series of fare hikes this year -- a dozen successful in 16 attempts -- has largely sidestepped routes that overlap with Southwest and other discounters.

At the same time, United and Continental dropped fares by $22 on several thousand routes, Seaney said. Seaney said he is analyzing those moves.

"Normally, when two airlines drop the same amount in the same feed it is a reaction to a low-cost airline," he said in an email message.

United launched the increase Thursday, raising prices $10-$60 roundtrip.

-- Scott Nishimura