Airline Affairs

British Airways Share Sale Imminent:

After years of waiting. BA is now in the final lap of its life under government ownership. Following a favourable outcome of its lengthy bilateral rights negotiations with the US Dept of Transport and a clearing up of outstanding anti-trust litigation, the giant UK carrier is now poised for public flotation sometime in the first quarter of 1987.

BA was hit heavily this year with the fall in inbound tourism due to the spectre of European-targeted terrorism and the aftereffects of Chornobyl. Indeed falls of up to 25% on the vital transatlantic were common during the April-July period with the only offsetting fac- for being reduced fuel costs. The airline however responded with a vigorous US marketing campaign and has now got its traffic base back on track.

It will however take some time to make up for the decline in traffic earlier in the year. As at early September, BA was looking at a cumulative fall in North Atlantic traffic of -13%, -3% in Europe and even -4% to Australasia though this has boomed in recent months and now runs a typical 80% load factor. Worldwide, BA operations midway through their present fiscal year are 3% down in traffic for an overall load factor of a very healthy 78%.

Australian Airlines Announces Major Increase In Profit:

The final year as TAA saw a major increase in profitability for the now Australian Airlines group.

Australian posted a net profit of $37. 7m for the 85/86 year, a healthy increase over the $29. 9m recorded for the previous trading year. This reflected the airline obtaining a 50. 9% share of domestic traffic, an overall growth of 12% in passenger uplift and notably a 22% increase in business class traffic. For the present year though Australian anticipates traffic flattening out by comparison. Growth should be lower than the recent industry average of 7% for 85/86 while additional fuel, leasing and taxation (FBT) charges will eat into the profitability of the airline.

Australian is meanwhile looking to develop- ing its links with the major international carriers, particularly BA, Air New Zealand and United in an attempt to offset the newly formed Trave- land/Qantas/Ansett link in addition to expanding its hotel and resort accommodation base within Australia. The carrier has also been actively marketing Australia overseas this past year and has also joined with United in providing domestic sector uplift to Sydney and Melbourne where United can then fly its passengers on to the USA.

Australian has also verified its intention to seek out NSW intrastate routes if allowed under a revised State government transport policy and may well drop its central Queens- land routes if East West is allowed the profit-able coastal routes that have been denied to subsidiary, Air Queensland. Australian also hoped to have the contentious and somewhat embarrassing issue of AQ on-carriage going to Ansett at Brisbane airport remedied as we closed for press though precisely how this was to be achieved was not available for public comment.

East West Wins Round One In Legal Battle Against Australian And Ansett:

East West Airlines won round one of its legal challenge to both Australian and Ansett Airlines when Mr Justice Lockhart deliberated on September 15 that the airline was fully within its rights to operate jet aircraft on its six internal Queensland routes basing out of Brisbane.

The win opens the way for EWA to acquire 3 737-200s though this has now to be finally approved by the Minister for Aviation, Mr Peter Morris. To achieve this end the DotA is presently conducting a Capacity Determination Review on EWA and an announcement on the import of the Boeings is expected during the course of this issue.

Meanwhile, East West took a number of steps during the period to reorganise its senior management structure following the surprise departure of both Dennis Howe and Ron Entsch during June. Mr Bill Meeke, formerly General Manager of Skywest, is now Chief Executive Officer of the entire aviation division of the Griffin Group. John Hartley is now Managing Director of EWA while Chris Ring is Managing Director of Skywest and Ivan Clarke is General Manager of Operations.

In respect to its future, the airline has to now await the outcome of its legal challenge to the Two Airline Policy, which is being heard in the High Court and hopefully will be resolved by next Easter. Also pending is the result of the NSW State government’s review of internal air services and the outcome of the May Enquiry into the TAP. Both these landmark deliberations are not expected till the first quarter in 1967 at the earliest. A Federal election will also be held sometime during next year and if a Coalition victory eventuates then airlines like East-West (and Australian, dare we say) could well be in a better situation than they presently are in terms of the existing domestic airline environment.

Qantas, Air Pacific And Sia All Record Good Profits:

Qantas recorded a group profit from operations of $44. 4m before tax for the year ended March 31, 1986. Though the third highest on record this represents a decline of some 29% on last year. Qantas Chairman, Mr Jim Leslie, slammed the Federal Government’s Fringe Benefits Tax (FBT) as the airline had to put aside some $16. 5m to cover retrospective FBT liabilities incurred in the operating year. Mr Leslie explained that this tax ‘comes straight off the bottom line and is an impediment to future expansion and investment in new equipment. In a regular year Qantas expect their FBT bill to be closer to $5m.

On the bright side, for the first time Qantas revenues exceeded $2bn, of which more than 60% had been in foreign currencies. As recently as the early seventies Qantas had been earning more than two-thirds of its total income from the Australian market. While traffic into Australia grew substantially, the number of international travellers from Australia actually declined.

Cost pressures came from largely the devalued dollar, which apart from slowing outbound Australian international travel, served to increase Qantas’ fuel and spare parts bill by 20%. Qantas also had a $16m non-recurring expense in getting its six Boeing 767 aircraft fully integrated into the QF fleet. While the price of oil has plummeted the browser cost in Australia has fallen only by about 10/15% while internationally the cost has decreased by as much as 30%. This is worse than it appears though as to begin with Australian fuel prices are generally double what they are in, for instance, the USA.

As to its massive repayment schedule on new 747-300 and 767 aircraft, Qantas is fortunate in that it uses its overseas foreign currency to repay these loans, something that the domestics cannot do and are thus forced to pay many millions of dollars more on their 737- 300 orders for each one cent fall in the relative value of the dollar. For the year ahead Mr Leslie stated that he was optimistic that 86/87 would also be a profit- able year despite fierce competition and depressed fares in the international airline industry. He said Qantas should benefit from the increase in tourism to Australia, lower oil prices and the improved flexibility and efficiency resulting from the new 767 twinjets.

Meanwhile, Air Pacific, under firm Qantas direction appears to have turned the corner and has recorded its first profitable year. The profit, though small at SF142,976, represents a turning point as the airline had operated the year under several notable handicaps including the effects of damage from a massive cyclone and a rapidly depreciating currency base from its primary inbound tourist markets, Australia and New Zealand. Qantas is currently in the mid phase of its three year management contract with Air Pacific and hopes that the present financial year will also see a viable profit for the revitalised airline.

Further north, Singapore Airlines notched up a group profit of $A210m for the year, an increase of some 62% over the previous year. SIA carried 4. 9 million passengers in the period for an average load factor of 71% while RPKs increased by 4. 8%. At March 31st this year the SIA fleet comprised 31 aircraft; 12747-300s, 9 747-200s, 6 A310s and 4 757s. The average age of the fleet was 32 months, an airline record that SIA hopes to maintain in the years ahead as it introduces its recently ordered 747- 400s and A310-300 aircraft.

A First For Ba:

It’s always pleasant seeing airlines innovate and develop new 1 ideas aimed at attracting additional long-term clientele.

One such idea that should leave many passengers happy is the recent decision by British Airways to provide a choice of two main courses in economy class. This may sound small beer but if you have ever flown Sydney! London, or any other comparable distance, without a stopover in a packed economy class then I am sure you will agree that BA’s latest idea is certainly a winner. Well done BA

Pan Am Fined For Safety Violations:

PanAm has been fined by the FAA $US2m for a number of safety violations unearthed in a recent in-depth FAA investigation of the carrier’s maintenance practices.

According to the FAA, inspectors found that the carrier had routinely operated aircraft that needed specific repairs and often replaced failed components with used parts that had exceeded their design life. Additionally, aircraft serviceability inspections, particularly on what is the world’s oldest fleet of 747s, were inadequate and not always performed within the FAA’s time limits. One aircraft was flown an additional 37 flights beyond the scheduled overhaul of one of its landing gears. On another occasion, a 747 was flown 18 times even though it was known that one of its primary control surfaces was misaligned.

PanAm as a result of the fines has revamped its maintenance procedures. Other carriers to incur the wrath of the FAA have been American, fined $US1. 5m during 1985 and a still being contested dispute with Eastern that may result in fines as high as $US9. 5m.

Smoking Ban Recommended On New Generation Airliners:

The US National Academy of Sciences (NAS) has issued an in-depth report recommending a total smoking ban on all transport aircraft. The NAS Report is set to reopen heated debate as to whether smoking should be banned on all US civil flights.

The study found that in a crowded cabin the overall effects of smoke can be quite profound and cause significant eye, nose and throat irritations in addition to causing unnecessarily severe conditions for asthma sufferers. The NAS also focused much of their study on the new generation of airliners presently being introduced which use a more effective (in terms of aircraft operating efficiency) recirculating air conditioning system. These new systems tend to recirculate as much as 50% of cabin air with the result that air filtration for smoke is less effective than in the older airliners.

Meanwhile Continental recently introduced a novel plan to curb smoking in airliners (which costs the airlines dearly in reduced aircraft performance, increased cleaning and cleansing costs and can be an added safety impairment due to those passengers who illegally smoke in the toilets) by allowing a 10% discount off travel taken on discount fares on Continental over a sixty day period. The effects of the scheme, which was introduced for a one-month trial late in August are not yet known though to the north, Air Canada has met with a positive response to its total smoking ban on its Rapidair network. More than half of its flights were designated as total non-smokers and the carrier is expanding the ratio claiming that at survey showed that many commuters had flown the service specifically because of its non-smoking policy.

Closer to home the announcement earlier this year by Minister for Aviation, Mr Peter Morris, that smoking may be banned on all domestic flights of less than 90 minutes duration has yet to be acted on.

Fokker 50 And Saab Sf340 Arrivals Delayed:

Delivery of Ansett’s first Fokker 50 propjets, originally scheduled for this December, have now been delayed till June or July next year. Reason for the delay is due to additional development work that Fokker are including in the programme in order to design-in the greatest number of customer options prior to attempting final FAA certification.

The situation poses no operational problems for the Ansett group though Fokker will now be forced to pay a penalty for late delivery as the aircraft will now not be eligible for the investment allowance that would have initially been available if they had been delivered prior to June 30th, 1987.

Meanwhile, Kendell Airlines has postponed the delivery of their third SF340 due to a rapid decline in South Australian traffic. Loadings on some routes during the May/September period were down by as much as 30% and Kendells don’t see the situation improving greatly till there is a substantial rise in rural commodity prices and an increase in the value of the dollar. In the meantime the airline will use its 18 seat Metroliners to greater advantage.

It wasn’t all bad news though as the delayed delivery represented a godsend to Saab, as the company badly needed additional early delivery aircraft to be able to meet its rapidly increasing US sales base.

Domestic Airline Activity Continues To Grow:

Domestic airline activity grew to a record high in 1985/86, exceeding the previous peak of 1984/85.

Total industry activity (tonne-kilometres performed) grew by 4. 6 per cent for the quarter and 7. 5 per cent for the year. Passenger activity (passenger kilometres) recorded quarterly and annual increases of 4. 7 per cent and 8. 1 per cent while cargo (tonne-kilometres) increased by 4. 3 per cent and 3. 6 perc ent respectively. Total hours flown increased by 6. 1 per cent in the quarter and 6. 2 per cent for the year. While Regional Airlines’ activity grew by 10. 5 per cent in 1985/86, there was a significant variation between individual operators in this segment of the industry.

Flight Engineers Split:

Qantas Flight Engineers have split from the AAFEA (Australasian Airline Flight Engineers Association) to form their own organisation within the framework the AIPA (Australians International Pilots Association).

of The AIPA was formed in the late seventies as a breakaway group from the AFAP (Australian Federation of Air Pilots) who nowadays represent the domestic carriers. only. Apparently, Qantas FEs were not happy with the way their domestic counterparts were treating the inevitable march of technology as per the two crew issues and decided to form an association that would be better suited to their own long-term requirements.

In technical terms a situation could arise where domestic FEs were virtually replaced en masse by the end of this decade with the availability of new technology short to medium-haul airliners designed specifically without a Festation. Qantas however will still be needing FEs for at least another fifteen years as they will still be taking delivery of aircraft with traditional sideways-facing FE panels right up till 1988/89. At that time Qantas will begin to opt for the new 747-400 and will most probably accept the standard Boeing two-man arrangement that has to date been endorsed by British Airways, Cathay Pacific, Lufthansa, KLM, United, UTA, Singapore and Northwest Orient. Qantas will however operate the aircraft with existing levels of reserve crew due to the ultra-long-range missions that it routinely fies

Big Pilot Market Ahead In The Usa:

The Future Aviation Professionals of America, a specialist group set up to provide employment registers for aircrew, have estimated that the US air transport industry will require some 42,000 new technical aircrews over the coming ten years.

Aircrew growth has already increased substantially over the figures of ten years ago as a result of natural growth and deregulation. FAPA estimated that compounded on an annual growth of 5% the airlines will require 32,000 new applicants and the smaller commuter and regional carriers a further 10,000 aircrew. FAPA also foresee this period being additionally influenced by a surge in retirements due to the cyclical effects of growth through the fifties and sixties.

 Qantas Orders Another 747:

Qantas has announced that the airline will buy its sixth Boeing 747 EUD aircraft.

Qantas needs the aircraft to provide for the strong growth in tourism to Australia, stated Qantas chairman, Jim Leslie.

“The number of people from other countries flying to Australia on Qantas has increased by 25% in the past few months and we anticipate that this sort of growth will continue,” Mr Leslie said.

The $A185 million aircraft will join the fleet next April. Mr Leslie said the aircraft would be funded entirely from Qantas’ overseas earnings and it would increase the airline’s ability to make substantial contributions to Australia’s foreign currency inflow.

The aircraft are powered by the latest Rolls Royce RB211-524D4 engines, giving them a range of more than 10,000km with a full payload. The sixth EUD will bring the Qantas fleet to 24 Boeing 747s and six Boeing 767s, 12 of which have been bought since November 1984. The new aircraft are helping Qantas to hold down operating costs as they are more fuel-efficient and require less maintenance.

People Express Goes Under To Texas Air:

As we closed for press, the al- most final saga of People Express began to unfold as Frank Lorenzo’s Texas Air made a bid for the ailing carrier of a reported $US289m. Texas Air would also acquire the assets of Frontier, Britt and Provincetown Boston Airlines in addition to the entire existing PE network. Texas Air also controls Continental, New York Air and is in the final stages of cementing its acquisition of Eastern. An approved purchase by the US Department of Transportation would make the Texas Air combine the largest of the US carriers with some 22% market share compared with Uni- ted’s 18% and American’s 15%.

People had been in trouble for some time due largely to over-expansion and acquisition of camers, such as Frontier, which then turned into liabilities rather than assets (refer story elsewhere in Newsdesk).

For Texas Air much of the strength of the PE buy lies in eliminating a major adversary against Continental in the high volume northeast Washington/New York/Boston corridor in addition to acquiring PE’s soon to be completed Newark terminal which would effectively give the carrier the additional New York ground capacity that it so desperately requires.

The move has now to be approved by the DoT which might well be worried about the anti-trust situation involving one megacarrier controlling an entire airport hub in deference to its competitors. Either way, a new chapter in the life of People Express has commenced and one that hopefully will put it back into the black.

Ansett Continues Expansion With Travel And Purchase:

The Ansett Group have continued their run of expansion with the August purchase of the giant Trave- land tour package wholesaler.

Traveland is Australia’s largest package holiday chain and operates highly visible travel centres in the majority of Australia’s primary retail centres. Effectively this now gives Ansett another chain of retail travel offices which also has a flow-on benefit for Qantas which will also gain extra exposure for marketing its declining (due to the dollar) outbound holiday packages. As Traveland also operates large travel centres in Tokyo, Los Angeles, Auckland and London then both Ansett and Qantas will also gain additional exposure at these key centres. The move also ties in nicely with Ansett’s acquisition of 50% of the Newmans (Aviation) Group of New Zealand effectively giving the company control of two of the largest travel chains in the region. Ansett is due to commence domestic air transport operations in New Zealand shortly via a new carrier which we believe will be named Ansett New Zealand. Thus the importance of having not only major domestic airline uplift in both Australia and New Zealand in addition to the largest of the travel package wholesalers plus a very close working arrangement with Qantas, the largest international carrier in the region, as well as a number of smaller regionals such as Cook Islands International and Polynesian means the overall effective reach of the Ansett Group in this part of the world cannot be underestima- ted.

While Ansett is not legally allowed to fly international routes under its own banner, it has successfully brought about a situation where it can now fly select offshore routes in addition to having a substantial influence on the domestic air travel market of another nation. For the years ahead, Ansett’s star certainly burns brightly.

 Iata Tip A Nil Profit Year

The International Air Transport Association has tipped a zero profit year following release of figures for the first six months of 1986. The figures reveal that while capacity rose some 7%, traffic growth remained static and fell alarmingly on some specific routes. IATA considers that the transatlantic problems and the fall in traffic to the Gulf have created unforeseen and difficult-to-remedy problems that will make it difficult for the bulk of international carriers to more than break even this calendar year.

Falling Fuel Prices Save Us Carriers:

Rapidly falling fuel prices saved US carriers from major losses during the second quarter of this year. The overall saving was put at $US800m for the quarter and is expected to reduce this year’s total airline expenditure by at least $US4bn.

Airlines though will not pocket the difference as an unabated fare war rages throughout the US forcing yields lower without a necessary litt in load factor due to capacity being added well in excess of demand. Fuel prices have dropped by between 20 and 30% as against the same period last year and in some cases have also made old equipment more viable to operate thereby slowing the rush to re-equip with new fuel-efficient, but expensive to acquire, medium-haul aircraft. US traffic overall also suffered due to the decline in outbound travel following the spectre of European terrorism against US citizens though this is expected to abate and return to a situation of growth come 1987.

Two Industry Leaders Give Interesting Insights Into The Future Of The Air Transport Industry:

Addresses by two senior airline executives recently gave interesting insights into the future directions in which international aviation is headed.

Mr David Hyde, the deputy Marketing director of British Airways, stated in London recently that there is developing a trend towards niche carriers and megacarriers. Niche carriers would come in all shapes and sizes and be both domestic and international in character. They would specialise in catering for a particular market and refine their niche in the marketplace to the point where a competitor would find it difficult to attack their market viability. Niche carriers would be representative of low-fare low service carriers, such as People Express and many of the other new US start-ups or they might concentrate on a high level of service aimed primarily at the business market, such as our own Ansett and Australian.

Meanwhile the megacarriers would get larger and in the end there might be just four or live independent carriers in the US with perhaps two or three dozen specialised regionals operating in their shadow. Meanwhile any move towards deregulation in Europe would ultimately produce similar results and at the same time awaken an entirely new travel market providing a massive upsurge in airliner orders to meet the demand. This has already happened on the commuter and regional level and could affect the established charter operators as the presently business market-orientated major European carriers enter the leisure market in a freer route structure environment.

BA itself will continue to grow, further refine and improve its product and add new aircraft in an effort to have a totally competitive fleet in both technical and customer approval terms. BA is presently refurbishing its 747-2008, adding 747-400s and more 757s and will re-place the leased 737s with aircraft of the latest technology available around the early nineties. The airline is also interested in acquiring a large twin to augment its 757s and replace its existing Tristars as these aircraft are withdrawn during the early nineties.

Closer to home, Mr Lim Chin Beng, Deputy Chairman of Singapore Airlines, alluded to the internationalisation of the hub and spoke system. “The trend is now towards ultra long-range aircraft performing direct non-stop city-to-city sectors and linking into a primary airport hub”, he stated at the pre-Farnborough Financial Times aerospace conference. London, Singapore, Bangkok, Frankfurt, Tokyo, Los Angeles and New York are rapidly emerging as megahubs as they serve to feed the world with a greater number of non-stop flights. For the airlines, the benefits on longer ranging aircraft are overall lower trip costs, less opportunity for diversions or on-ground delays and a more marketable product for the busi- ness traveller than perhaps your competitor can offer.

No Frills Military Style For China’s Latest Airline:

The Chinese Air Force has now entered the passenger-carrying market with the introduction of their own airline service. According to the China Daily, the air force will use surplus CAAC Tridents, Viscounts, Tu-154s and propjet Ilyushin 18s to augment United China Airlines, a regional set up by the military in 1984.

The new carrier will operate primarily out of military fields which will relieve ATC pressure on the often congested civil airports and is expected to cater exclusively for the Chinese population at the expense of foreigners.

Qantas Ready To Enter The Offset Market:

Qantas are exerting pressure on the Federal government to broaden some aspects of the offset agreement that would be of particular benefit to the airline.

Freight is a primary consideration where Qantas is now attempting to gain the uplift of freight claimable as an offset credit where it is conveyed by the Australian airline. The amount of inbound freight Boeing, MDC, Airbus, Rolls Royce, GE and Pratt & Whitney have each year is substantial as is the ticketing of high-yield business traffic associated with such firms. By securing this market Qantas hope to gain additional income while the end user can claim the expense as a part of their offset credit.

In The airline is also hoping to have it made compulsory that all government employees travel Qantas as standard procedure. At present the majority do fly Qantas though another carrier can be used if the timetable is considered more appropriate. some instances this allows a number of competing airlines to immediately offer upgrades, etc as an incentive to not book a Qantas flight. Australia is one of the very few countries in the world where it is not mandatory for government employees to fly the national carrier.

 Cathay Pacific To Launch Joint Service To Auckland With Air New Zealand:

Cathay Pacific Airways and Air New Zealand have signed an agreement for the re-introduction of direct services between Hong Kong and Auckland from 3rd December this year.

The weekly nonstop joint venture service will be operated using Cathay Pacific’s Boeing 747-200 aircraft. However, the agreement makes provision for Air New Zealand to use its own aircraft on the route for the second year of operation.

The service is expected to attract substantial tourist traffic in each direction. In addition, the service will provide a competitive nonstop route- ing into Asia for fresh food produce and other perishable airfreight.

 Us Merger Madness Continues:

The biggest bigger and the unprofitable merely more vulnerable is the way it is now in the fast-changing US air transport scene.

Latest large scale merger (the smaller fry are now too numerous to merit reporting!) is that between Delta and long-ailing Western. Of all the mergers in the past year this one probably represents the best overall potential outcome. The two carriers do not overlap to any great extent and the acquisition, for a reported SUS840m, gives Delta an entree to the west of the US that it previously did not enjoy. In fact the new entity will have one of the best US route profiles of any of the megacarriers including a number of long-distance sectors to Europe that can now be boosted by feed from the west.

Meanwhile People Express, with its own critical cash problems, has pulled the plug on similarly ailing Frontier and ceased that carrier’s operations from late August. People acquired Frontier late in 1985 for an estimated SUS300m and immediately boosted the presence of the small carrier (about the same size and operating profile as Ansett) at its Denver hub. The Denver hub was extremely important to the regional viability of the new combine and consequently, both United and Continental, who virtually controlled most of the slots at Denver, applied pressure that finally led to Frontier losing around $US10m a month. Meanwhile, United had earlier agreed to purchase Frontier from People but this fell through at the last minute when United’s pilots would not accept the pay conditions of their new acquisition. And so the US air transportation landscape is minus another previously long lived carrier.

The latest vogue is to guarantee your in-feed by not only forming dual designator associations (refer p61 May AA) with small commuter carriers but also to actively pursue the purchase or controlling interest of those carriers. To date some thirteen have been ‘gobbled up by the majors following the defections of one or two such operators from their previous dual designator link-ups.

Qantas Signs Multi-million Dollar Technology Deal With China:

Qantas has signed a $20m agreement with the Chinese national carrier CAAC to provide engineering and maintenance support for the airline’s Boeing fleet of 747, 767 and 707 aircraft.

The contract, won in the face of strong competition from overhaul facilities in Europe, the United States and Japan, will help achieve Australia’s objective of lifting foreign earnings through overseas sales of high technology.

Qantas currently eams more than $40 million annually from its aeronautical engineering and maintenance services at the Jet Base, with Boeing as well as airlines in the Middle East and several Asian countries included among its customers.

The agreement was the culmination of six years of discussions between Qantas and CAAC. The Australian company Hawker Pacific was appointed the Qantas technical sales representative in China earlier this year and played an important role in finalising the agreement.

Big Profits For Ansett Partners:

Both TNT and News Ltd recorded excellent net profits during the trading year of 85/86. Though it is virtually impossible to get a precise accounting for the Ansett airline operation (it is officially tabled in Federal Parliament but under what one would have to term the ultimate discretion), it is however believed that Ansett Airlines itself is wholly profitable.

TNT meanwhile posted a net of $106m for the year, well up on their excellent performance of $75m for the previous year while News Ltd saw a 152% increase to a record $242m. This bodes well for Ansett which can call on quite massive financial reserves at any time from its large and sophisticated international credit base.

Us Air Forms Leasing Division:

United States second-level carrier, US Air, has formed its own leasing division to acquire and sublease aircraft to its affiliate commuter operators and other carriers.

The large domestic carrier is primarily specialising in turboprop aircraft in the 30/70 seat category and will be able to negotiate a better acquisition price on applicable aircraft than would its smaller affiliates in the Allegheny Commuter network that feed into US Air’s hubs as dual designator regionals.

This is the first time a major airline has used its purchasing power to bring together uniform acquisition guidelines in support of its smaller affiliates and is certain to result in other large and powerful carriers doing likewise.