February 7, 2023

Frequent Flier: Walking 20 Miles for a (Canceled) Flight to Antarctica

As president and chief executive of Canada Goose, I’m flying continuously it seems, mostly to meet retailers and grow the brand. All the trips really are important to our company’s growth, so I won’t ever complain about business travel. I even like most airplane food. I always try to get a window seat. I’ve gotten some of my best ideas while staring at clouds or looking at landscapes from some 30,000 feet up. Plus, I get to control the window shade.

Our outerwear products have been used at the South Pole for decades, and I tried to get there a few years ago. Try is the operative word. I flew from Toronto into Santiago, Chile, and from Santiago to Punta Arenas, Chile.

We were supposed to fly from Punta Arenas to Antarctica and then on to the South Pole. But the pilot needed to know everything was clear since the flight is totally weather-dependent. Antarctica is huge, and was experiencing some bad weather. So we couldn’t take off, and one day stretched into two.

We got a hotel outside the city, but there were protests, general strikes and road blocks that started over fuel prices. Traffic was closed in and out of the city so we had to walk about 20 miles from the hotel to the airport only to find out we couldn’t take off because the bad weather continued. Finally, we got the go-ahead on Day 4 since the weather was clearing. But then, the pilot said the plane had a mechanical problem.

If I can take a weather delay, protests, a 20-mile walk and a canceled trip, a little flight delay at an airport that has restaurants isn’t going to bother me. The good news is I did finally make it to the South Pole the very next year.

I have a commercial pilot’s license. That makes me a very laid-back flier, but I have seen some strange things.

I happened to look out the window on a flight that was crossing the Atlantic, and I saw another plane, which looked pretty close to us. Seeing another plane isn’t really that big of a deal, but a few minutes later another plane came into the airspace. So there were three planes literally in formation flying across the ocean. The pilot came on the address system and told everyone not to be worried. I guess it was kind of like driving on the highway.

I don’t mind talking to seatmates. But on one flight to Amsterdam, I was seated in business class next to a guy who was, well, grumpy. It got worse when the attendant came around with beverages and somehow spilled coffee all over him.

He jumped out of the seat and started making this huge scene. I guess it’s understandable since the coffee was hot, but he was over the top. His clothes were ruined and the attendant said she’d get him something to wear. I think she got her revenge, because the only thing she could come up with was a pair of pajamas that looked like a jumpsuit or a huge onesie for an adult.

The airline logo was emblazoned on it and when the guy came out of the restroom wearing this get-up, he looked like a giant baby superhero. He grumbled the rest of the flight, but I’m not sure if he was still mad about the spill or about the way he looked.

I didn’t have any other beverages on the flight. If I had to change clothes, I would have looked equally silly in that thing.

By Dani Reiss, as told to Joan Raymond. E-mail: joan.raymond@nytimes.com.

Article source: http://www.nytimes.com/2013/05/14/business/walking-20-miles-for-a-canceled-flight-to-antarctica.html?partner=rss&emc=rss

Global Carmakers Wrestle With India Slump

India’s slowing economic growth, high interest rates and rising fuel prices have led to the biggest slump in the car market in more than a decade. Sales having fallen 7 percent in the financial year that ended last month. But automakers like Honda, which is investing almost $500 million in India, say they are unconcerned because they are in it for the long haul.

“If there was any worry, we would never have done this,” Hironori Kanayama, the head of Honda’s India unit, said in an interview in Mumbai. “Of course it’s a pity that the economy is sluggish, but it doesn’t worry us at all.”

Honda said this month that it would spend 25 billion rupees, or $463 million, to double its output capacity in India to 240,000 cars per year by next year.

“The potential is very high here,” Mr. Kanayama said. “Our investment is based on such long-term projections.”

Honda is not alone in expanding despite the slumping market. Ford is spending $1 billion on a new factory in India, even as its current plant runs at only 60 percent of capacity. Maruti Suzuki India, controlled by Suzuki Motor of Japan, is spending about $750 million to add the capacity to make an additional 250,000 cars annually.

Carmakers say India’s huge population, low penetration of car ownership and rising incomes mean sales can only go up in the long run, while the opportunity to export to Africa and the Middle East makes for a compelling investment case.

“Clearly we believe the macro conditions are a short-term blip,” said Nagesh Basavanahalli, managing director in India for the Italian carmaker Fiat and its Chrysler unit.

Mr. Basavanahalli, who began in his current role this month, has been assigned to try to reintroduce the Fiat brand and introduce the Jeep and Abarth model lines in India, even as established names like India’s own Tata Motors see sales plummet.

“Are there challenges? Yes,” he said, but he added that he was “very confident, based on the product plan that we have and based on the actions we are taking.”

Not everyone shares that confidence in the Indian market. For example, last year, Peugeot of France shelved a plan worth €600 million, or about $790 million, to build a factory in India.

For its part, Honda is not just investing in manufacturing capacity. The Japanese carmaker introduced a new sedan model last week and, like other companies, is adding diesel-powered options as it races against global rivals to tap market segments that are still growing, even as overall demand falls.

Government subsidies make diesel less costly than gasoline in India.

Customers hit hardest by the economic gloom in India have been first-time buyers and the emerging middle class, which relies on bank loans for big purchases, analysts say. Sales of small cars, which account for more than 70 percent of the market, have fallen about 10 percent.

By contrast, demand for sport utility vehicles and midlevel diesel cars has risen, with models like the diesel Dzire from Maruti Suzuki and the low-cost Duster S.U.V. from Renault helping their companies outperform rivals. The new Honda Amaze sedan, which starts at 500,000 rupees, is in a segment in which sales were up 21 percent in the most recent financial year.

Ford, Fiat-Chrysler, Maruti and Honda are all preparing to introduce compact S.U.V.’s.

Companies that lack models in those segments are suffering the most. Volkswagen, whose shortcomings in India are a blot on its global success, built 66,699 cars in the country in the past financial year, using no more than 31 percent of its manufacturing capacity there, according to a report by Kotak Securities.

Sales at the Indian unit of General Motors fell 20 percent by volume in the financial year that just ended, and it lost 7.46 billion rupees in the fiscal year that ended in March 2012.

Some of G.M.’s rivals are working to increase exports from their less-than-stretched Indian production lines to offset the local sales slump. Volkswagen nearly tripled exports from India last year, and Ford now exports almost a third of its Indian-made cars.

Long-term estimates vary, but many industry analysts expect annual car sales in India to reach six million by 2020, at which point it would trail only China and the United States in sales volume. The Society of Indian Automobile Manufacturers, the industry’s primary lobbying group, has estimated sales of nine million by that year.

Optimists say a young, fast-urbanizing population, rising incomes and an expected rebound in the country’s economic expansion rate will drive the market’s future growth. In addition, paltry ownership levels of about 12 cars per 1,000 people — about a quarter of China’s rate — indicate lots of room for growth.

“The entire structural story of India’s car potential still holds true, despite the current cyclical downturn,” said Jinesh Gandhi, an automotive equities analyst at the brokerage firm Motilal Oswal in Mumbai. “I would clearly invest in new capacities for the future, rather than wait for the market to turn around.”

Article source: http://www.nytimes.com/2013/04/19/business/global/global-carmakers-wrestle-with-india-slump.html?partner=rss&emc=rss

Merger Costs Weigh on United Continental

The nation’s top carrier, United Continental, narrowed its fourth-quarter net loss to $138 million, an improvement from its loss of $325 million in the year-earlier period, the company said Thursday.

The loss was attributed largely to costs associated with the 2010 merger of United Airlines and Continental Airlines. Revenue was up 5.5 percent, to $8.9 billion, in the quarter.

The company recorded a full-year profit of $840 million, down 12 percent from the previous year.

Besides United Continental, the nation’s other top airlines — Delta Air Lines, US Airways and Southwest Airlines — all turned a profit last year despite a dismal global economy and record-high fuel prices.

By raising ticket prices and flying fewer planes, the airlines hope they can raise revenue this year faster than fuel prices can rise, while cutting capacity to offset a slowdown in demand.

On Wednesday, Delta Air Lines said fourth-quarter profit surged to $425 million, up from $19 million in the year-earlier period. In the quarter, the company filled nearly 82 percent of its seats while it reduced capacity by 3.5 percent. Revenue per passenger rose 12 percent as a result of higher ticket prices.

Delta reduced its capacity throughout most of its destinations, especially Europe, which saw a 10 percent drop. Latin America was a rare exception as Delta increased capacity there by 5 percent. The company emphasized it would continue to reduce its capacity in the first quarter by 3 to 5 percent.

Southwest Airlines saw its net income grow 16 percent in the fourth quarter, to $152 million, with a 32 percent jump in revenue to $4.1 billion. US Airways, for its part, said its net income declined by 35 percent to $18 million in the fourth quarter. Revenue in that period rose 8.5 percent to $3.2 billion.

So far, the airlines expect these gains to continue in the first quarter of 2012.

“If anything, the new year has seen a step up in business demand,” the US Airways president, Scott Kirby, said on a conference call Wednesday. “The pricing environment remains strong and the industry is successfully recovering high fuel prices.”

Article source: http://feeds.nytimes.com/click.phdo?i=4974966be558a44ebea7743bf98dd400

DealBook: In Chapter 11, a Bid to Cut Costs at American Airlines

After resisting for a decade, the parent company of American Airlines announced Tuesday that it would now follow a strategy that the rest of the industry chose long ago: filing for bankruptcy protection so it can shed debt, cut labor costs and find a way back to profitability.

American’s parent, the AMR Corporation, was the last major domestic airline that had never sought Chapter 11 protection. Its main rivals, including Delta Air Lines and United Airlines, used the bankruptcy courts to reorganize their businesses in recent years and emerged as stronger, more profitable rivals.

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American, meanwhile, has lost more than $11 billion since 2001, while falling off its perch as the nation’s largest airline as mergers between first Delta and Northwest, and then United and Continental, created bigger competitors. The airline’s troubles were compounded by high labor costs, including pensions that are the richest in the industry, and surging fuel prices.

The decision to file for bankruptcy, which was endorsed by a unanimous vote of the company’s board on Monday evening, was a defeat for Gerard J. Arpey, who has run the airline since 2003 and had staunchly resisted such a move.

American's counter at La Guardia Airport on Tuesday. The airline says it will run a full schedule while it is in bankruptcy.Ángel Franco/The New York TimesAmerican’s counter at La Guardia Airport on Tuesday. The airline says it will run a full schedule while it is in bankruptcy.Thomas Horton, left, succeeds Gerard Arpey as chief executive.Richard W. Rodriguez/Associated Press and Brandon Thibodeaux/Getty ImagesThomas Horton, left, succeeds Gerard Arpey as chief executive.

“It’s no secret that we have tried exceptionally hard over the last decade to avoid this outcome,” he wrote in an emotional message to employees.

Rather than guide the airline through bankruptcy, Mr. Arpey, 53, decided to retire as chairman and chief executive and take a job in private equity investing. He was succeeded by AMR’s president, Thomas W. Horton, 50, another longtime hand at the airline, who was ATT’s chief financial officer for four years before returning to AMR in 2006.

Despite Mr. Arpey’s long tenure as AMR’s chief executive, he does not appear to be bailing out with a golden parachute. Under the terms of his contract, he will not receive any severance, according to the research firm Equilar. And with AMR closing at 26 cents a share on Tuesday, his stock holdings are essentially worthless.

As other airlines have done in similar cases, American said it would continue to operate its regular schedule throughout the bankruptcy process. It said flights, ticket sales, overseas alliances and frequent flier programs would not be affected. Employees will continue to be paid and receive health benefits.

Wall Street analysts said AMR, which has about $4.1 billion in cash and short-term investments, was seeking court protection before its financial position completely deteriorated.

“This is not a defensive move, but an offensive bankruptcy where they go after their labor groups to reduce costs,” said Bob McAdoo, an airline analyst at Avondale Partners. “They have a great franchise and a lot of cash. They are not being forced into bankruptcy here. They have a problem with their cost structure that they want to tackle.”

The decision might eventually lead to a smaller airline, with fewer employees, fewer planes and fewer destinations. Seth Kaplan, an aviation specialist with Airline Weekly, said hubs like Dallas and Miami, where American has a strong competitive position, would probably be spared, while Los Angeles and Chicago, where it is not a market leader, might be more vulnerable to cuts.

American has long argued that its labor costs were $800 million a year higher than its rivals’ because its pilots fly fewer hours and have less flexible work rules. Its cost per available seat mile, a common industry metric that includes labor and operating costs, is about 10 percent higher than Delta’s.

But labor is only part of the picture. American owns and operates a regional carrier, American Eagle, that flies 50-seat jets that are among the least efficient to operate. It is also the only major airline to perform most of its major maintenance internally. And more than a third of its 600 planes are McDonnell Douglas MD-80s, an aging design that burns more fuel than newer models.

“If oil was still at $50 a barrel, we wouldn’t be having this conversation,” said Mike Boyd, an airline consultant. “Their bet was to hold on to their older MD-80s until Boeing came up with a new airplane. As we know, that didn’t happen.”

The decision to file for bankruptcy was not entirely unexpected. Speculation about a bankruptcy sent the company’s shares down 79 percent this year even before the filing. However, its timing did take many analysts by surprise because they thought the company had enough cash to finance its operations for at least the next 12 months.

Mr. Horton said in an interview that AMR’s board did not want to wait. “This was the time to move from a position of relative strength,” he said. As of Sept. 30, AMR had $24.7 billion in assets and $29.6 billion in debt, according to a filing with the Federal Bankruptcy Court in Manhattan. Creditors include the holders of AMR bonds as well as companies like General Electric that leased aircraft to the airline.

The airline managed to avoid filing for bankruptcy in 2003 after it obtained major concessions from its labor groups, including lower pay for its pilots. But talks for a new contract had been dragging on since 2008 with no resolution. The latest round stalled in recent weeks when the pilots’ union refused to send a proposal to its members for a vote.

“It appears the board of directors ran out of patience after the last discouraging signals from the pilot unions,” said Philip Baggaley, a managing director at Standard Poor’s Ratings Services.

Airlines have used federal bankruptcy rules in the past to force new contracts on their employees, and American may now take a tougher position with its own unions.

“We had been hopeful that bankruptcy could be averted, but we were aware of the possibility,” said Gregg Overman, a spokesman for the Allied Pilots Association, which represents American pilots.

James C. Little, the president of the Transport Workers Union of America, which represents 25,000 employees, including ground workers, struck a more defiant tone. The union reached a series of tentative agreements in recent weeks with the airline and American Eagle.

“This is likely to be a long and ugly process, and our union will fight like hell to make sure that front-line workers don’t pay an unfair price for management’s failings,” he said.

The mergers of Delta and Northwest, and United and Continental, helped those airlines cut capacity, increase fares and return to profitability last year. American, meanwhile, has had just two profitable years in the last decade, while losses from 2001 to 2010 were $11.4 billion. It recorded a $982 million loss through the first nine months of this year and is expected to post another loss in 2012.

In the long run, the airline is counting on a significant overhaul of its fleet to cut long-term costs. In July, it announced a $38 billion order for 460 new single-aisle planes from Airbus and Boeing. American’s fleet has an average vintage of 15 years, making it one of the oldest and least fuel-efficient among the six major United States carriers.

The company said it still intended to buy these planes, for which it has already secured $13 billion in financing from the plane makers themselves.

The impact of the bankruptcy is likely to be more immediate for some jet leasing companies. In a letter addressed to lessors, American’s treasurer, Beverly K. Goulet, said the airline could not afford to maintain all of its leased aircraft at their current rates and said it had no choice other than to begin canceling contracts on an unspecified number of planes. American leases roughly 29 percent of its fleet, according to data compiled by Ascend, an aviation consultancy based in London.

Although other airlines have improved their finances by taking a trip through bankruptcy court, some analysts were still skeptical about American’s long-term prospects.

“The industry is chronically oversupplied and AMR has no dominance or significant competitive edge in any particular market — we are not convinced that a reinvented, scaled-down iteration will change that,” said Vicki Bryan, an analyst at Gimme Credit.

Article source: http://feeds.nytimes.com/click.phdo?i=36a3aff91655e51e5d0c196efa1d47b0

DealBook: In Bankruptcy, a Bid to Cut Costs at American Airlines

American's counter at La Guardia Airport on Tuesday. The airline says it will run a full schedule while it is in bankruptcy.Ángel Franco/The New York TimesAmerican’s counter at La Guardia Airport on Tuesday. The airline says it will run a full schedule while it is in bankruptcy.

After resisting for a decade, the parent company of American Airlines announced Tuesday that it would now follow a strategy that the rest of the industry chose long ago: filing for bankruptcy protection so it can shed debt, cut labor costs and find a way back to profitability.

American’s parent, the AMR Corporation, was the last major domestic airline that had never sought Chapter 11 protection. Its main rivals, including Delta Air Lines and United Airlines, used the bankruptcy courts to reorganize their businesses in recent years and emerged as stronger, more profitable rivals.

American, meanwhile, has lost more than $11 billion since 2001, while falling off its perch as the nation’s largest airline as mergers between first Delta and Northwest, and then United and Continental, created bigger competitors. The airline’s troubles were compounded by high labor costs, including pensions that are the richest in the industry, and surging fuel prices.

The decision to file for bankruptcy, which was endorsed by a unanimous vote of the company’s board on Monday evening, was a defeat for Gerard J. Arpey, who has run the airline since 2003 and had staunchly resisted such a move.

“It’s no secret that we have tried exceptionally hard over the last decade to avoid this outcome,” he wrote in an emotional message to employees.

Rather than guide the airline through bankruptcy, Mr. Arpey, 53, decided to retire as chairman and chief executive and take a job in private equity investing. He was succeeded by AMR’s president, Thomas W. Horton, 50, another longtime hand at the airline, who was ATT’s chief financial officer for four years before returning to AMR in 2006.

Despite Mr. Arpey’s long tenure as AMR’s chief executive, he does not appear to be bailing out with a golden parachute. Under the terms of his contract, he will not receive any severance, according to the research firm Equilar. And with AMR closing at 26 cents a share on Tuesday, his stock holdings are essentially worthless.

As other airlines have done in similar cases, American said it would continue to operate its regular schedule throughout the bankruptcy process. It said flights, ticket sales, overseas alliances and frequent flier programs would not be affected. Employees will continue to be paid and receive health benefits.

Wall Street analysts said AMR, which has about $4.1 billion in cash and short-term investments, was seeking court protection before its financial position completely deteriorated.

“This is not a defensive move, but an offensive bankruptcy where they go after their labor groups to reduce costs,” said Bob McAdoo, an airline analyst at Avondale Partners. “They have a great franchise and a lot of cash. They are not being forced into bankruptcy here. They have a problem with their cost structure that they want to tackle.”

The decision might eventually lead to a smaller airline, with fewer employees, fewer planes and fewer destinations. Seth Kaplan, an aviation specialist with Airline Weekly, said hubs like Dallas and Miami, where American has a strong competitive position, would probably be spared, while Los Angeles and Chicago, where it is not a market leader, might be more vulnerable to cuts.

American has long argued that its labor costs were $800 million a year higher than its rivals’ because its pilots fly fewer hours and have less flexible work rules. Its cost per available seat mile, a common industry metric that includes labor and operating costs, is about 10 percent higher than Delta’s.

But labor is only part of the picture. American owns and operates a regional carrier, American Eagle, that flies 50-seat jets that are among the least efficient to operate. It is also the only major airline to perform most of its major maintenance internally. And more than a third of its 600 planes are McDonnell Douglas MD-80s, an aging design that burns more fuel than newer models.

“If oil was still at $50 a barrel, we wouldn’t be having this conversation,” said Mike Boyd, an airline consultant. “Their bet was to hold on to their older MD-80s until Boeing came up with a new airplane. As we know, that didn’t happen.”

The decision to file for bankruptcy was not entirely unexpected. Speculation about a bankruptcy sent the company’s shares down 79 percent this year even before the filing. However, its timing did take many analysts by surprise because they thought the company had enough cash to finance its operations for at least the next 12 months.

Mr. Horton said in an interview that AMR’s board did not want to wait. “This was the time to move from a position of relative strength,” he said. As of Sept. 30, AMR had $24.7 billion in assets and $29.6 billion in debt, according to a filing with the Federal Bankruptcy Court in Manhattan. Creditors include the holders of AMR bonds as well as companies like General Electric that leased aircraft to the airline.

The airline managed to avoid filing for bankruptcy in 2003 after it obtained major concessions from its labor groups, including lower pay for its pilots. But talks for a new contract had been dragging on since 2008 with no resolution. The latest round stalled in recent weeks when the pilots’ union refused to send a proposal to its members for a vote.

“It appears the board of directors ran out of patience after the last discouraging signals from the pilot unions,” said Philip Baggaley, a managing director at Standard Poor’s Ratings Services.

Airlines have used federal bankruptcy rules in the past to force new contracts on their employees, and American may now take a tougher position with its own unions.

“We had been hopeful that bankruptcy could be averted, but we were aware of the possibility,” said Gregg Overman, a spokesman for the Allied Pilots Association, which represents American pilots.

James C. Little, the president of the Transport Workers Union of America, which represents 25,000 employees, including ground workers, struck a more defiant tone. The union reached a series of tentative agreements in recent weeks with the airline and American Eagle.

“This is likely to be a long and ugly process, and our union will fight like hell to make sure that front-line workers don’t pay an unfair price for management’s failings,” he said.

The mergers of Delta and Northwest, and United and Continental, helped those airlines cut capacity, increase fares and return to profitability last year. American, meanwhile, has had just two profitable years in the last decade, while losses from 2001 to 2010 were $11.4 billion. It recorded a $982 million loss through the first nine months of this year and is expected to post another loss in 2012.

In the long run, the airline is counting on a significant overhaul of its fleet to cut long-term costs. In July, it announced a $38 billion order for 460 new single-aisle planes from Airbus and Boeing. American’s fleet has an average vintage of 15 years, making it one of the oldest and least fuel-efficient among the six major United States carriers.

The company said it still intended to buy these planes, for which it has already secured $13 billion in financing from the plane makers themselves.

The impact of the bankruptcy is likely to be more immediate for some jet leasing companies. In a letter addressed to lessors, American’s treasurer, Beverly K. Goulet, said the airline could not afford to maintain all of its leased aircraft at their current rates and said it had no choice other than to begin canceling contracts on an unspecified number of planes. American leases roughly 29 percent of its fleet, according to data compiled by Ascend, an aviation consultancy based in London.

Although other airlines have improved their finances by taking a trip through bankruptcy court, some analysts were still skeptical about American’s long-term prospects.

“The industry is chronically oversupplied and AMR has no dominance or significant competitive edge in any particular market — we are not convinced that a reinvented, scaled-down iteration will change that,” said Vicki Bryan, an analyst at Gimme Credit.

Article source: http://feeds.nytimes.com/click.phdo?i=36a3aff91655e51e5d0c196efa1d47b0

Delta Cuts Number of Flights to Small Cities in Midwest

Delta Air Lines said Friday it was reducing the number of flights to small cities in the nation’s midsection, saying it could not make money on flights that were sometimes empty.

The affected flights connect Delta’s hubs to 24 small cities in rural Iowa, Michigan, Minnesota, Mississippi, North Dakota and South Dakota. Some of the cities are served only by Delta, but regional airlines might take over some of the routes. Delta also said it would ask for federal subsidies to keep some of the flights.

Most of the affected flights are on Delta’s 34-seat Saab turboprops, which it is phasing out by the end of this year. Higher fuel prices have made it difficult to operate small planes profitably, because the fuel bill is divided among a small number of passengers. Even the next-larger option, the 50-seat regional jets flown by Delta and other airlines, is often unprofitable for the same reason. Delta is retiring many of those planes, too.

Delta, which is based in Atlanta, said it was losing $14 million a year on the flights included in Friday’s announcement. Their occupancy averaged just 52 percent, compared with a systemwide average of 83 percent last year. The average occupancy out of Thief River Falls, Minn., was just 12 percent, Delta said. The flight from Greenville, Miss., runs just 27.6 percent full. Some flights have been empty, it said.

Flights in 16 of the cities on Delta’s list are subsidized by the federal Extended Air Service program. The Transportation Department solicits bids from airlines to see how much money it would take to get them to serve a particular city. Delta said it was looking for regional haulers, including Great Lakes Aviation, to take over those routes.

Great Lakes operates 19-seat planes, a size that might operate profitably. A Great Lakes spokeswoman declined to comment on the possibility of taking over the Delta routes.

The Transportation Department can make an airline keep serving a city even after its subsidy contract runs out, a spokesman, Bill Mosley, said.

It is theoretically possible that no airlines would bid to serve a city. “It’s very rare,” Mr. Mosely said. “We would rebid if that were the case.”

The city of Bemidji in northwestern Minnesota does not currently get a subsidy, but Delta says it wants one to keep flying there. Right now one of Delta’s regional feeder partners operates three 50-seat regional jets per day between Bemidji and Delta’s hub in Minneapolis, a 4.5-hour drive away.

Bemidji illustrates why airlines have historically sought out travelers in small cities. Such flights attract more than their share of business travelers, who tend to pay more. And if their flight starts on Delta, they’ll generally stick with Delta all the way to Chicago or New York.

“So they’re paying for a bigger ticket somewhere else,” said Harold M. Van Leeuwen Jr., the manager of the Bemidji airport. “Bemidji has been a good location for them.”

Article source: http://feeds.nytimes.com/click.phdo?i=d068777280268e730b325d4f21b31d7e

Delta Will Offer Buyouts As It Cuts Flights and Staff

Delta has been planning to cut its schedule by 4 percent starting in September. In a hotline message to employees on Friday, Richard Anderson, the chief executive, said Delta needed to reduce the costs that went with those flights, too.

“In order for our business to thrive we must think of the current high fuel prices as a permanent reality of our business,” Mr. Anderson said.

He said Delta workers whose age plus 10 years of service equaled 55 would be eligible for early retirement. Buyouts will be available for workers who don’t meet the requirements for early retirement but have at least five years with Delta. Both are voluntary.

In October, Delta said it would add 1,000 flight attendants, including recalling 425 who had been on a voluntary furlough. A Delta spokeswoman, Keyra Johnson, said that hiring was mostly finished and was not affected by the new voluntary offers.

Airlines have been raising fares to cope with higher fuel prices, and many have been scrapping growth plans they had for this year. Delta is adding flights during the first half of the year. Airlines generally reduce flights in the fall because leisure travel drops off. Delta’s reduction beginning after Labor Day will be 4 percent below its service levels at the same time last year. Delta said last month it would park 140 planes over the next year and a half, 20 more than it originally planned. The planes coming out of its fleet will include some of its largest jets, used for international flights.

Stock in Delta, which is based in Atlanta, fell a penny, to $11.21 a share.

Article source: http://feeds.nytimes.com/click.phdo?i=8964ab0cb733c6a9ae7347ccd143da63

Jobless Claims Last Week Hit 8-Month High

The Labor Department said Thursday that applications rose by 43,000, to 474,000, in the week ended April 30, the third increase in four weeks. The four-week average, a less volatile measure, rose for the fourth consecutive week to 431,250.

Applications near 375,000 are typically consistent with sustainable job growth. Weekly applications peaked during the recession at 659,000.

Rising unemployment applications and other weak economic data this week have prompted some analysts to worry that higher fuel prices might be causing employers to slow hiring.

The government will release its April jobs report on Friday. Economists are projecting that the economy probably added 185,000 jobs in April and that the unemployment rate might remain at 8.8 percent, but some are now saying the numbers of added jobs could be lower.

Other factors also contributed to the increase in claims, a department spokesman said. Oregon started its own extended unemployment benefit program, which caused an increase in overall applications in the state for unemployment benefits. And auto-related layoffs rose, as some companies shut down or slowed production because of shortages of parts after the earthquake in Japan.

The sharp rise in claims in recent weeks has increased concerns that higher gasoline and food prices are cutting into consumer spending and slowing the economy. Businesses are also facing higher costs for raw materials, which reduce profit margins. They might be cutting hiring as a cost-saving measure.

Other recent data have also pointed to a weaker job market. A private trade group said Wednesday that a measure of employment growth in the service sector, which employs 90 percent of the work force, slowed for a second month. The report, by the Institute for Supply Management, still showed that employment rose, but at the slowest pace in seven months.

In another report, American companies squeezed more work out of their staffs in the first three months, but the gain in productivity was much slower than the previous three months.

The Labor Department said productivity rose at an annual rate of 1.6 percent in the January-March period, compared to a 2.9 percent increase in the previous quarter.

A slowdown in productivity growth is bad for the economy if it persists for a long period. But it can be good in the short term when unemployment is high, because it signals that companies must hire more workers to make further gains.

Article source: http://feeds.nytimes.com/click.phdo?i=67b6d1f9f0dfba282872c39fac147e94