Again another very interesting article
from Air Transport World and Senior Editor Karen Walker. Please stay tuned as there may be more to
come on this subject that has a relationship to retired pilots lost pension.
Etihad report alleges 3 major US carriers have received
$71.5
billion in benefits
Karen Walker May
14, 2015
Etihad
report alleges 3 major US carriers have received $71.5 bill.....
Etihad Airways has
released a report that it commissioned that says the three biggest US carriers—American
Airlines, Delta Air Lines and United Airlines—have received benefits worth $71.48
billion over the past 15 years. The report includes money that went to US
airlines with which the three carriers
have merged and the
majority of the funds are related to restructuring
under US Chapter 11.
The report, researched and
compiled by international consultancy The Risk Advisory Group under a
commission from Abu Dhabi-based Etihad, comes as the same US
carriers have embarked on a campaign in which
they allege that Etihad, Emirates Airline and Qatar Airways have received some $42
billion in state subsidies. The US carriers and some US labor groups say this contravenes
the fair competition rules of the Open Skies agreements between the US and the
UAE and Qatar.
The US
carriers want government-to-government consultations on the issue and a US
government review is under
way.
In a statement released
late Thursday, Etihad said US airlines received benefits valued at $71.48
billion, more than $70 billion of which has been since 2000, “enabling the
nation’s three largest carriers to transition from the verge of bankruptcy to
today’s industry leaders, each achieving multi-billion dollar profits.”
The Risk Advisory Group,
Etihad says, identified that the
majority of benefits which accrued to Delta, United and American came from
restructuring under Chapter
11 of the US Federal
Bankruptcy Code, yielding them at least $35.46 billion, and additional pension
fund bailouts totaling $29.4 billion from the US government’s Pension Benefit Guaranty
Corp.
Etihad general counsel Jim
Callaghan, said, “We do not question the legitimacy of benefits provided to US
carriers by the US government and the bankruptcy courts. We simply wish to
highlight the fact that US carriers have been benefitting and continue to benefit
from a highly favorable legal regime, such as bankruptcy protection and pension
guarantees, exemptions from certain taxes, and various other benefits. These
benefits, which are generally only available to US carriers, have created a
highly distorted market
in which carriers such as
Etihad Airways have to compete.”
Callaghan told ATW that
the numbers were conservative and obtained from public records and statements.
The breakdown of the
numbers, according to the report, apportion the large majority of benefits to
United, with combined benefits estimated at $44.4 billion; followed by Delta at
$15.02 billion; and American Airlines at $12.05 billion.
Of these figures, United
achieved one-time bankruptcy debt relief totaling $26 billion, and pension
termination benefits totaling $16.8 billion; Delta achieved bankruptcy debt relief
totaling $7.9 billion, and pension termination benefits totaling $4.55 billion;
and American achieved bankruptcy debt relief totaling $1.56 billion, and
pension termination benefits of $8.08 billion.
Callaghan said the claims
by the three US carriers that they were being harmed by Etihad were baseless,
and an attempt to obstruct higher-quality competition.
Callaghan told ATW the
report would form part of Etihad’s response to the US carriers’ allegations and
would be submitted to the US government review.
“We are not going to get
into a tit for tat. This is about having a balanced debate on this
issue,” he said.
Callaghan added that the
airlines are trying to characterize every dollar invested in Etihad
by the Abu Dhabi
government as a shareholder as a subsidy. “If you follow this line of
argument you would also
have to look at all other state-owned airlines such as Turkish
Airlines and the Chinese
airlines—many of whom are partners in the three US carriers’
global alliances.”
On Wednesday, Qatar
Airways Group CEO Akbar al Baker held a media briefing in
Washington, DC to refute
the subsidy allegations against his airline.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++
$6 Billion To Shareholders
From: Charles W Crow
Date: 5/13/2015 11:19:14 AM
Subject: Delta Is Saving A Lot From Cheaper Fuel And Will
Now Return $6 Billion To Shareholders
Delta Is Saving A Lot
From Cheaper Fuel And Will Now Return $6 Billion To Shareholders
Delta said on
Wednesday it plans to return $6 billion to shareholders through buybacks and
dividends over the next two years, at a time when it is saving billions on
cheaper fuel.
The airline will
repurchase another $5 billion of its own stock by the end of 2017 and hike its
dividend by 50% to 13.5 cents per share. The company is slated to complete the
remaining $725 million of its existing $2 billion buyback program next month,
more than a year ahead of schedule.
Shares rose more than
2% in premarket trading.
“Today’s announcement
marks the next phase of Delta’s long-term capital deployment strategy as we
near conclusion of our balance sheet transformation and place even greater
emphasis on returning our free cash flow to shareholders,” said Daniel Carp,
chairman of Delta’s Board of Directors.
Earlier this year,
Delta CEO Richard Anderson said that lower fuel prices were expected to save
the company more than $2 billion this year. Prices are down sharply from their
peak last year and Delta said it was paying an average of just $2.93 per gallon
of fuel in its latest quarter.
While passengers
aren’t expected to see the price of airfare fall, investors seem poised to
benefit from the savings. The company said it intends to return at least 50% of
free cash flow to shareholders through 2017.
Shares of Delta are
up 19% over the last 12 months and rose more than 2% to $47.20 in premarket
trading
With kind regards,
Charlie Crow highflight@mindspring.com
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
From: Robert Campbell
Date: 5/8/2015 9:39:28 AM
Subject: D is for "Denial!
Mark:
I thought I'd relay a "funny" episode I had with
good old Delta. I offer this as I read in your May High Life that Delta's
CEO just topped $17 million in pay and benefits!? Do you remember a
while back when Delta was going to "pave" some passageway somewhere
around the General Offices with BRICKS? They came on the internet
and solicited donations for their "bricks' with each donee able to have
etched on his/her brick some pithy saying encouraged to be how wonderful Delta
had been, or was being, to them. As a past retiree, I puzzled and
puzzled until my puzzler was sore (?), and here's what I sent them with my
brick application, I sent them along with a Delta Credit Union check
for $100: "QUESTION? MY PENSION? R K
CAMPBELL (RET.) And do you know? ... they sent my check
BACK!? Did I hit a nerve? Are the 3500 retired pilots
(+/-) from yesteryear delegated to the easily
forgotten past? I guess it's the old story of "what
have you done to get me my next $million ... lately". Just a
thought. Keep up the good work.
Bob Campbell capnbob687@comcast.net
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