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E L L I O T T ' S TRAVEL NOTES
Travel news, opinion and analysis

Underwritten By Cheapflights.com — Compare sales, specials and cheap flights to any destination.

August 30, 2004

Cold Winter Ahead for U.S. Airlines
Mass layoffs, a looming cash crunch and bankruptcy protection. Sound like Air Canada? You bet. But it's also the grim reality facing several major US airlines, including US Airways Group Inc., United Airlines Inc., Delta Air Lines Inc., and at least one of the once-thriving discounters, ATA Holdings Corp. Just like Air Canada, they are being savaged by soaring jet fuel costs, falling revenues, stiff competition and lingering terrorism fears. Most airlines are looking at radical changes, including significant employee salary, benefit and pension clawbacks and other cost cuts. Globe and Mail | Posted 6:30 a.m.
• Analyst: 'A Lot of Change to Come' (Morning News)
• Delta Bankruptcy Could Cost $100 Million (MSNBC)

We thought the worst of it was over. We were wrong.

Taxpayers Might Bail Out Pensions
 The corporate pension crisis seems to be going from bad to worse. First, companies struggled to come up with the money to cover their benefit obligations, and now they want to ditch their plans altogether. The latest twist in this mess comes from UAL Corp.'s United Airlines. It wants to terminate its employee pension funds in order to secure the loans it needs to get out of bankruptcy, a drastic move that would represent the largest pension default ever by a US company. Should that happen, competing airlines may try to do the same, and it could easily extend to other industries, too. And who would be left with the cleanup? Taxpayers, of course. AP | Posted 6:35 a.m.

Japanese Travel Agency Fakes Ratings
 Faked questionnaires helped give a top rating to Japan's top travel agency, according to travel industry whistleblowers. The Mainichi Daily News reported Sunday that the Hotel Marquise would have its employees pretend to be travelers and book trips through the Japan Travel Bureau and submit the bogus questionnaires. Hotel Marquise employees have admitted to the fake questionnaires and JTB officials have removed the hotel from its book and a Web site. UPI | Posted 6:45 a.m.

In Hawaii, Another Gate-Ramming Incident - A 17-year-old driver being pursued by a sheriff's deputy yesterday morning crashed his Mitsubishi through a back gate at the Honolulu airport and drove onto a flight line used for general aviation. Law enforcement officers converged upon an airport area between two hangars where a youth, 17, forced his car through a back gate. The teenager, who appeared intoxicated, hit a small airplane, an employee on a golf cart and a sheriff's deputy's car, said Scott Ishikawa, a spokesman for the state Department of Transportation. The Advertiser | Posted 7 a.m.

'BA Left Me Stranded' - If you fly with a charter company or no-frills airline, you might expect the odd flight cancellation and even to be left without redress, accommodation or compensation. But you certainly don't expect national carriers to cancel flights without a compelling reason such as a storm, mechanical problem or force majeure. The big story this week, though, has been precisely that: the sudden wave of flight cancellations by British Airways, apparently due to an unforeseen shortage of check-in staff. Telegraph | Posted 7:05 a.m.

Still No Deal For US Airways Pilots - After reopening their cost-cutting contract talks Friday night, US Airways and its pilots union spent the weekend exchanging proposals near the airline's Arlington, Va., headquarters. Union negotiators presented management with a new offer on Saturday, and the union expected to hear back from the company yesterday. Post Gazette| Posted 7:10 a.m.

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• Off the Record ... Charlie Leocha calls Northwest Airlines' recent decision to impose fees on tickets not booked on the Internet "corporate suicide." But in a story just posted this morning, he also points out that the executives can easily salvage their public relations disaster. How? Watch Mary Poppins. Posted 7:15 a.m. | Send us your comments.

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