South Africa's Nationwide Airlines calls it quits

Another airline has abruptly gone out of business: South African low-fare carrier Nationwide Airlines, in business since 1991, announced yesterday that they are ceasing operations. Regular readers of Aircrew Buzz may remember the incident reported here last November in which an engine separated from a Nationwide Boeing 737-200 on takeoff, just after rotation. The crew were able to return the aircraft to the airport at Cape Town and land it safely, with no injuries to anyone on board, however that incident seemed to be the tipping point that ultimately led to the demise of Nationwide Airlines, according to the company.

A message posted on the Nationwide Airlines website on April 29, 2008 explains things this way:

On the 7th November 2007, Nationwide Airlines experienced an engine separation from a Boeing 737-200 on departure from Cape Town.

Subsequent to this a protracted grounding of our fleet was mandated by the South African Civil Aviation Authority.

In the months of December and January we resumed operations and attained a gradual recovery of the business however in the months of March and April we faced a 30% increase in fuel costs coupled with a decrease in passenger load factors.

Throughout this period we continued to work towards securing investment by a black empowerment consortium which unfortunately has not come to fruition.

Our cash-flow has become critical and as a result have decided to voluntarily cease all flight operations until further notice.

We apologize to our loyal customers for any and all inconveniences experienced.

Business news network Bloomberg is reporting that Nationwide has asked the South African high court to appoint a liquidator to manage the sale of the airline's assets.

The notice on Nationwide's website made no mention of the airline's employees, or their fate, but the Bloomberg article said:

Workers at Nationwide "are extremely traumatized by what has happened," United Association of South Africa, a labor union that represents 83,000 workers in 30 industries including transport, mining, security and engineering, said in an e-mailed statement. Competitors such as Comair, Airlink and SA Express have invited Nationwide employees to apply for jobs, it said.

The South African news website Independent Online (IOL) elaborated a bit on the situation for Nationwide Airlines employees:

The United Associations of South Africa, which represents about 200 Nationwide employees, wrote a letter to the airline on Wednesday saying that they had spoken to AGE group chief executive officer Reggie Naidoo and that he had expressed the possibility of salvaging the airline and saving jobs.

However, because they had not had any feedback from their attempts at communicating with the airline, they had begun legal proceedings against the company to protect members.

The Airline Pilots Association said it was shocked by developments and to help the 68 member pilots at the airline, would cover their union subscriptions for the next three months and help them send out their CVs.

Various news reports have stated that Nationwide continued to book flights and collect payment for fares right up to the time that the 'going out of business' message went up on the airline's website, and that passengers were left stranded when the Nationwide abruptly ceased operations.

According to IOL, the International Air Transport Association (IATA) withheld all ticket sales payments due to Nationwide when the airline announced that it had closed.

"IATA is monitoring the situation closely and will make every effort to meet with Nationwide as soon as possible to agree how the money we are holding will be used," the association said.

Good luck to IATA for trying to arrange such a meeting: The IOL article also mentioned that Nationwide's office phones, as well as the cellphones of directors and chief executive officer Vernon Bricknell, were not being answered.

[Photo Source]

Delta flight attendants accuse management of suppressing union voters

Flight attendants at Delta Air Lines voted earlier this year to unionize. A majority of Delta flight attendants already have submitted signature cards to the National Mediation Board (NMB), indicating that they wanted to be represented by a formal collective bargaining unit, even though Delta management has openly opposed the move toward flight attendant unionization.

Last week, Delta flight attendants began the next phase, casting their votes to decide whether the Association of Flight Attendants-CWA (AFA) will be certified as their collective bargaining representative. The voting process, carried out under the supervision of the NMB, will continue until May 28, 2008. According to the rules, a majority of the entire flight attendant workforce must cast a vote in order for the election to be valid. Anything less than this majority turnout will void the election entirely, even if the union gets a clear majority of the votes cast.

Apparently the management of Delta Air Lines is persisting in its opposition to the union election, employing what AFA activists describe as "tactics of intimidation and interference, pushing flight attendants not to vote for the union." Earlier this week, a number of Delta flight attendants met with Congressional leaders to brief them on "Delta management’s aggressive voter suppression campaign during the current AFA-CWA representation election."

In a news release about their meetings with Congressional officials, the Delta flight attendants explain:

Management’s anti-union voter suppression campaign gained the attention of Capitol Hill earlier this month, prior to the start of the vote. In the U.S. Senate, 26 Senators submitted a letter to Delta Air Lines executives urging them to “demonstrate a genuine commitment to cooperative labor relations” and to remain neutral in this election. Delta executives never responded to the Senators’ letter. At the very moment Anderson was testifying in a U.S. House hearing on Delta’s announced merger with Northwest Airlines, management’s latest anti-union, voter suppression packet – with letters and a DVD – was being mailed to all flight attendants’ homes.

“Actions speak louder than words and management’s actions right now clearly indicate that they want to prevent us from having a union and having the right to negotiate a legally binding contract,” said Mara Levene, a Delta flight attendant and AFA-CWA activist. “Management will do whatever it takes to make sure that we do not have a voice. A solid majority of Delta flight attendants wanted this election and despite management’s fear tactics, bullying and intimidation, we remain determined and are voting for AFA-CWA representation.”

Delta CEO Richard Anderson testified in Congress last week that "management was supportive of the democratic process and would not engage in illegal interference." Not so, says Patricia Friend, AFA International President. “Their current actions to keep flight attendants from voting are anti-democratic and are a disgrace. Delta flight attendants have earned and deserve the right to have a voice in their future and a seat at the table,” said Ms. Friend.

Delta currently is seeking approval for a planned merger with Northwest Airlines. It is worth pointing out that Northwest's flight attendants already are represented by AFA. Delta's flight attendants have never had union representation.

Aloha Airlines cargo operations to liquidate

Today, April 28, 2008, Aloha Airlines notified the U.S. Bankruptcy Court of its intention to convert its Chapter 11 bankruptcy filing to a Chapter 7 filing for liquidation. The move came after both bidders for the cargo operation withdrew their offers. Subsequently, Aloha's lender, GMAC Commercial Finance, said it would no longer provide cash to the carrier to continue operations. Aloha had shut down its passenger operations at the end of March, but its cargo service had continued to operate.

An article about the shutdown of Aloha's cargo operations in the Honolulu Advertiser quoted an Aloha attorney, who said simply, "We don't have any money." With that, Aloha's dedicated inter-island cargo service, which had been operating since 1985, came to a final halt. The Advertiser article said:

The move will put 300 of Aloha's cargo employees out of work. It also could jeopardize the sale of its contract services to Los Angeles-based Pacific Air Cargo. Pacific Air last week agreed to buy the 1,100-employee aviation services unit, which handles baggage duties, ramp duties and other ground services for carriers that serve Hawai'i.

Early last week, the Aloha Airlines pilots' union, the Air Line Pilots Association (ALPA), asked the U.S. Bankruptcy court for a temporary restraining order and a preliminary injunction that would make the sale of Aloha's cargo operations contingent on retaining the contract between the airline and the pilots. Later in the week, the pilots' union also voted to authorize a strike if their contract terms were not met, but they also announced that they would not strike before they learned the outcome of this week's Bankruptcy Court proceedings. With the company in liquidation, all of that is now moot.

In a report to the members of the Aloha unit of ALPA, the leadership of the Master Executive Council (MEC) explained:

...We arrived at Bankruptcy Court for the conclusion of the TRO hearings at 2:00 PM Monday. As soon as the Judge took the bench, attorneys for Aloha Airlines asked for a one-hour delay in order to conduct an emergency conference call with the Aloha Board of Directors, the attorneys for GMAC (which has continued to provide financing during the bankruptcy), and the creditors committee.

The court proceeding resumed about 3:30 PM. At that time, the attorney for Aloha Airlines stunned the courtroom by announcing that GMAC was refusing to continue financing, and that Aloha Airlines was seeking immediate approval from the court to convert the proceeding from a Chapter 11 to Chapter 7 liquidation. According to the company’s attorney, one of the two bidders had withdrawn from the cargo auction process Monday morning…and the remaining bidder had withdrawn from the process approximately one hour prior to the hearing. It appears that, at the end, GMAC raised the minimum price that it would accept to release collateral and also asked for the prospective purchaser to be responsible for air cargo operating expenses during the transition period while the approved purchaser awaited any necessary regulatory approvals. GMAC was adamant that they would NOT continue providing financing.

The Creditors Committee attorneys requested that the Judge refuse the company’s request, arguing that the air cargo operation was profitable and should be funded while the auction proceeded. However, GMAC was adamant that they would not provide any additional financing. The Judge attempted to prod GMAC, but acknowledged that he was unable to force GMAC to provide additional operating financing during the transition to a new owner.

In the end, Judge King reluctantly granted the motion of Aloha Airlines to convert the proceeding to liquidation. An Interim Trustee from the Office of the US Bankruptcy Trustee was appointed to oversee the liquidation of the company. Aloha Airlines operations were immediately ceased. Afternoon cargo operations were cancelled.

The message from ALPA's Aloha MEC expressed concerns about issues ranging from retirement, to insurance, to the processing of pilots' training records; more immediately, union officials expressed uncertainty about whether the pilots will receive a final paycheck tomorrow.

Plans are to keep the ALPA office open during normal business hours. Aloha pilots are asked to remain in touch with the MEC.

[Photo Source]

UPDATE May 1, 2008: According to an article in today's Honolulu Advertiser, "Saltchuk Resources Inc. said it reached an agreement with Aloha and its chief lender GMAC Commercial Finance LLC to purchase the shuttered air freight operations... Saltchuk said it plans to hire existing Aloha employees but did not say if it would retain all 300 of the company's air cargo employees."

Continental-United merger plan scrapped

It looks like the anticipated announcement of a merger between Continental Airlines and United Airlines is not going to happen. A press release issued today by Continental included the text of a "message to its more than 45,000 employees from Larry Kellner, Chairman and Chief Executive Officer, and Jeff Smisek, President." That message begins:

We want you to know that our Board of Directors met today and has unanimously supported management’s recommendation that, in the current industry environment, the best course for Continental is to not merge with another airline at this time.

The message goes on to explain that "the risks of a merger at this time outweigh the potential rewards, as compared to Continental's prospects on a standalone basis."

The message also hinted that Continental may leave the SkyTeam alliance, stating that "alternatives to SkyTeam" are being evaluated.

United Airlines has not yet released a public statement about the Continental announcement. United CEO Glen Tilton has been saying for years that the airline industry needs to be consolidated, and that airline mergers are inevitable. It remains to be seen whether United will now turn to a different merger partner. A number of news reports have mentioned that United was talking with US Airways as well as Continental.

Something tells me that today's announcement is not the end of the story.

Eos Airlines files for bankruptcy, ceases operations

The management of Eos Airlines, the all-premium class airline flying between New York and London, announced that they have filed for Chapter 11 bankruptcy protection, and that they are ceasing passenger operations. Eos announced in a press release that that the petition was filed yesterday, April 26, 2008, in the U.S. Bankruptcy Court in the Southern District of New York.

From the press release:

On April 26, 2008, Eos plans to operate Flight 6 (8:30pm) from JFK to STN. On April 27, 2008, Eos plans to operate Flights 3 (1:00pm) and 7 (6:30pm) from STN to JFK. Flight 5 from STN to JFK and all flights from JFK to STN on April 27, 2008 are canceled. Eos will immediately implement a reduction in its workforce, eliminating the positions of most of its employees, and will cease operations entirely after April 27, 2008.

Since October of 2005, Eos had been flying Boeing 757-200 aircraft, in a 48-passenger all-business class configuration, between New York (JFK) and London Stansted (STN). Eos had plans for additional routes, but apparently fell victim to the current credit crunch before service on the new routes could be launched.

A statement attributed to Eos CEO, Jack Williams, said that the airline had "insufficient cash on hand to continue operations."

"There are times in business when even though you execute your business plan and even though your employees do their jobs beautifully, external forces prevent you from controlling your own destiny," Williams said.

Eos, headquartered in Purchase, NY, is the fourth airline in the U.S. to cease operations in less than a month. Aloha Airlines, ATA Airlines, and Skybus abruptly shut down their passenger services in quick succession. Asian budget carrier Oasis Hong Kong Airlines recently ceased operations as well. Frontier Airlines and charter carrier Champion Air also have filed for bankruptcy, but are continuing to operate, at least for now. Champion already announced that it will shut down operations at the end of May.

Sadly, an awful lot of airline crew members and ground staff have become jobless this month, through no fault of their own. One cannot help but ask the question that's on everyone's mind: Who's next?

By the way, Eos competitor Silverjet, which flies between Newark and London's Luton Airport, is offering Eos customers "the opportunity to re-book on available Silverjet services," according to a message on the Silverjet website. They had better hurry, though. There are rumors within the aviation industry that Silverjet is struggling financially, too.

Video spoof of airline 'buy-on-board' amenities

We all know that, in recent times, airlines have been cutting back on amenities offered in the passenger cabins. Meals, beverages, snacks, pillows, blankets, magazines -- you name it! -- either it no longer exists, especially in the economy section, or else flight attendants are now tasked with offering these items for sale, or collecting fees from passengers for their use.

How far will this practice go? Which items will be charged for next? This MADtv video presents the extreme case. Let's hope it never comes to this:



(If the video does not play or display properly above, click here to view it on YouTube.)

go! Airlines fires pilots accused of passing their destination while asleep

Two go! Airlines pilots whose aircraft overshot their destination while they both were allegedly asleep on the flight deck have been fired, and may face FAA sanctions, according to a news article in the Honolulu Advertiser. The article quotes Paul Skellon, vice president of corporate communications for Phoenix-based Mesa Air Group, go!'s parent company, who confirmed that the unnamed pilots were fired.

The incident that prompted the firing, as well as investigations by the NTSB and the FAA, happened on February 13, 2008, during a scheduled passenger flight from Honolulu to Hilo. The crew failed to respond to air traffic controllers 11 times during the inter-island flight. By the time the pilots responded, the aircraft, a CRJ-200, had passed its destination airport by about 15 miles. The crew ultimately reversed their course and landed safely at Hilo. On board go! Airlines Flight YV1002, in addition to the pilots, were 40 passengers and a flight attendant.

Today's Honolulu Advertiser article quoted an FAA spokesman, who said findings from his agency's investigation will be released in a few weeks. Possible FAA sanctions against the pilots could range from a warning letter, to suspension, to revocation of the pilots' licenses.

Another Honolulu newspaper, the Star-Bulletin, quoted an attorney for the Air Line Pilots Association, the union representing the go! pilots, who said that ALPA has filed a grievance with the company on behalf of the pilots. He said the pilots had been terminated 10 days ago. Both pilots had been suspended since the day of the incident.

[Photo Source]

UPDATE May 1, 2008: A reader sent in the link to this YouTube video -- part of a broadcast on Honolulu TV channel KGMB -- that includes portions of an ATC recordings from the incident described above, and another about a month later. go! Airlines flight loses communication.

UPDATE Aug. 4, 2009: Fatigue caused go! Airlines pilots to fall asleep during flight, says NTSB

Aloha Airlines pilots ask U.S. Bankruptcy Court to enforce their contract terms

The Aloha Airlines pilots have asked a U.S. Bankruptcy Court for a temporary restraining order and preliminary injunction that would make the sale of Aloha's cargo operations contingent on abiding by the contract between Aloha Airlines and its pilots' union. Aloha Airlines ceased passenger operations on March 31, 2008. The sale of the airline's cargo operation is scheduled to take place later this week.

Aloha Airlines pilots, represented by the Air Line Pilots Association (ALPA), are asking the court to enforce contract provisions covering successorship and sales of Aloha's assets and operations, according to a news release issued by ALPA. The union asserts that Aloha management has repudiated the pilots' collective bargaining agreement during the past few weeks and has triggered a “major dispute” under the Railway Labor Act, which governs airline contract negotiations. ALPA alleges that the company "continues to ignore the pilots’ collective bargaining agreement by terminating pilots out of seniority order, recalling pilots out of seniority order, failing to respect job security provisions that require a prospective purchaser to employ the current pilots in seniority order, terminating the pilots’ health plan, and failing to provide furlough pay and benefits, among other actions."

“Our contract specifically outlines the steps that must be taken to protect pilot jobs,” said Capt. John Prater, ALPA President. “Aloha management signed this agreement with the pilots and ALPA is prepared to do whatever is necessary to ensure that Aloha management adheres to the contract and that our pilots’ jobs are preserved.”

ALPA claims that the Aloha management rebuffed the union's efforts to negotiate a smooth transition before, during, and after the sale of the cargo operations.

“Aloha’s flagrant disregard of our contract is outrageous,” said Capt. David Bird, chairman of the Aloha arm of ALPA. “Aloha’s actions not only affect our pilots’ job security, but jeopardizes the future of Hawaii’s cargo flying. We just want Aloha to abide by the contract it signed.”

The Aloha pilots are scheduled to meet today, April 23, 2008, "to discuss and conduct a strike authorization vote, the first step in calling a strike." ALPA warns that a strike may occur at any time following an affirmative strike vote.

ALPA has requested a hearing in U.S. Bankruptcy Court for 10:00 a.m. on Thursday, April 24 to address the temporary restraining order.

UPDATE April 24, 2008: In their meeting last evening, the Aloha Airlines pilots "voted overwhelmingly" to authorize a strike of the carrier's cargo operations, according to the Honolulu Advertiser. The news article also mentioned that "about 150 or half of Aloha's pilots participated in the three-hour meeting and that "some of the membership have been forced to leave the state for employment while others could not get to Honolulu for the meeting."