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American Eagle Airlines will pay a $US900,000 ($882,000) fine for tarmac delays, the first such penalty and the largest of its kind in US history, the government said yesterday.
American Eagle violated rules that impose a three-hour limit on tarmac delays on domestic flights, on 15 flights on one day in May at the Chicago O’Hare International Airport, the Department of Transportation (DOT) said.
“This is the first fine for a violation of the department’s rule, which took effect in April 2010, setting a three-hour limit for tarmac delays on domestic flights,” the department said in a statement.
“It also represents the largest penalty to be paid by an airline in a consumer protection case not involving civil rights violations.”
American Eagle is a regional carrier of AMR Corporation, parent of American Airlines.
On May 29, a Sunday in the middle of the long Memorial Day holiday weekend, American Eagle had tarmac delays of more than three hours on 15 flights arriving at O’Hare, the department said.
The delays at one of the nation’s busiest air hubs ranged up to 225 minutes, 45 minutes beyond the limit, it said, with a total of 608 passengers trapped aboard the affected flights, unable to disembark.
Under the DOT rule, US airlines operating aircraft with 30 or more passengers aboard cannot remain on the tarmac at airports without giving passengers a chance to deplane.
Exceptions are allowed only for safety, security or air traffic control-related reasons.
“We put the tarmac rule in place to protect passengers, and we take any violation very seriously,” US Transportation Secretary Ray LaHood said in the statement.
The department highlighted that its new rules have substantially reduced the number of instances in which passengers have been stuck inside aircraft for long hours on the ground.
In the first 12 months after the three-hour limit was in effect, the larger US airlines required to file tarmac delays reported 20 tarmac delays of more than three hours — none of which was more than four hours long.
During the 12 months before the rule took effect, those airlines had 693 tarmac delays of more than three hours, with 105 of the delays longer than four hours, it said.
The tarmac delay rule was expanded on August 23 to include international flights, setting the delay limit at four hours.
A Charlotte, N.C., couple are suing Air Tran Airlines, claiming there were cockroaches on their flight and flight attendants ignored their concerns.
Attorney Harry Marsh and his fiancee, Kaitlin Rush, allege negligence and recklessness, intentional infliction of emotional distress, nuisance, fraud, false imprisonment, and unfair and deceptive trade practices in connection with their Sept. 15 flight from Charlotte to Houston, WCNC-TV, Charlotte, reported Friday.
Marsh and Rush say cockroaches were climbing out of air vents and overhead storage compartments shortly after takeoff. In the lawsuit, the couple claim other passengers also became aware of the roaches and it caused distress to a number of passengers.
The lawsuit also claims flight attendants were too busy to look into the problem or didn’t believe the problem existed. Marsh said he told a flight attendant about the cockroaches and she put her finger to her mouth, which Marsh said he interpreted as her telling him to be quiet.
The couple are suing for more than $100,000 plus the price of their tickets for emotional and mental distress caused by Air Tran’s negligence and failure to provide a clean and pest-free environment.
MUMBAI: The board of Kingfisher Airlines (KFA) will on Monday consider a proposal to cut debt by more than half by selling property, converting loans from its parent company into equity, and changing the terms under which it leases aircraft.
The management of the airline, which has cancelled 200 flights in the past week, leading to fears it is close to bankruptcy, says its plan will result in debt coming down from Rs 6,500 crore to Rs 3,000 crore.
The debt-reduction plans to be placed before the board were spelt out in a presentation, which has been reviewed by this paper, to potential financial investors on November 6.
The management is likely to propose a preferential issue of equity to the promoters and other investors, meeting a key demand of banks that are insisting Vijay Mallya, the flamboyant tycoon who owns the airline, infuse equity into the troubled carrier.
Kingfisher is promoted by Mallya’s UB Group, which owns United Spirits, India’s biggest liquor company. The UB Group will also convert Rs 675 crore of debt into equity as part of the plan to pare debt.
The preferential issue of equity, if approved, will replace a rights issue of Rs 2,000 crore approved by the board in August. Once these plans are approved, Kingfisher will approach banks for up to Rs 500 crore of working capital to buy fuel and pay salaries, according to people familiar with the matter. Kingfisher’s lenders have made it clear that the airline would have to come up with acredible business plan.
“Kingfisher is a valued company, but an airline would need fuel, fleet and finance to run the show. Kingfisher should tell us how it plans to streamline its daily requirements,” Pratip Chaudhuri, chairman, SBI, said in Kolkata.
SBI is the lead lender to Kingfisher among the consortium of 13 banks. Chaudhuri said banks have asked the airline’s owners to bring Rs 800 crore as equity. The company has said Rs 400 crore has been arranged, but Chaudhuri said he wanted to “see the money”, news agency PTI reported. He said banks will meet KFA’s management on Tuesday.
Over the weekend, reports that the government might move to bail out Kingfisher has met with strong opposition from politicians and sections of industry. “If it’s a free market economy, those who die must die,” said Bajaj Auto Chairman Rahul Bajaj. The principal opposition party, the BJP, and the CPM have strongly opposed government help to Kingfisher.
Over the next two years, Kingfisher plans to raise close to Rs 900 crore by selling Kingfisher House, the airline’s headquarters near the Mumbai domestic airport, and other real estate, and Rs 700 crore more by changing the leases on its aircraft from financial to operating.
In case of a financial lease, the airline has to deposit money with the aircraft manufacturer, which can be up to 15% of the total value of the aircraft. Converting it into an operating lease would mean the deposit is paid by the leasing company, which in turn is paid lease rental by the airline.
Sanjay Aggarwal, Kingfisher Airlines CEO, however, refused to comment on the additional working capital but confirmed that the airline was planning to raise funds by changing the nature of lease agreements and selling real estate. “All this exercise is going to reduce our interest costs that are pinching us a lot right now and reduce debt levels to reasonable limit,” he said.
But industry insiders doubted if a change in the nature of the lease would raise the kind of money that KFA seemed to be expecting. Further, they say, the Mallya-owned airline’s relationship with leasing companies is less than stellar as it has repeatedly defaulted on lease rental payments for some of its aircraft.
“It needs to be seen how much value can be unlocked from sale of real estate assets as the realty sector itself is going through a challenging phase. With the troubles the company has with leasing firms, it will also be interesting to see if they are agreeable to bailing Kingfisher out.
But if they are indeed able to half their debt, as they are planning to do so, it will help the company a lot as what is hurting Kingfisher’s profitability is the high interest outflows,” said a research analyst with a leading brokerage firm not wanting to be identified.
Kingfisher had announced after a board meet in September that it would do away with Kingfisher Red, known as Air Deccan before Mallya acquired it in 2007 from GR Gopinath. Kingfisher expects to increase its revenues by 15% once the reconfiguration of these aircraft is complete in another three to four months.
An earlier restructuring of loans had brought down Kingfisher’s debt to Rs 6,500 crore from over Rs 7,500 crore. The lenders – 13 banks, including SBI and ICICI – paid a 61% premium when they got a 23% stake in the airline in April this year, a move that has been panned by independent analysts as they got only one board seat.
The Kingfisher scrip has tanked since then, closing at a new low of Rs 19.65 on Friday. The airline will also look at reduction of manpower costs. “Tough measures have to be taken even if it means manpower reduction for the sake of the remaining 7,500 employees,” Aggarwal said.
Kingfisher is looking at a timeline of three to four months when all these initiatives will come together enabling it to keep operational. Some analysts feel the government’s outlook has turned favourable as it is now considering allowing foreign airlines to invest in Indian carriers.
“India needs air connectivity and government realises it is time to step in and also do a stock taking. This might just kind of bail Kingfisher out,” said Sharan Lilaney, research analyst at Angel Broking.
MANILA, Philippines—A small cargo aircraft whose wheels collapsed, forcing it to land on its belly, blocked the main runway of the Ninoy Aquino International Airport (Naia) for almost an hour on Saturday, causing several flights to be delayed.
According to Joseph Agustin, chief of the Manila International Airport Authority’s ground operations and safety division, the landing gear of the Piper Aztec collapsed, causing it to slide along the runway on its underside or belly.
Neither of the two people on the plane, pilots Jun Sanchez and Joramel Bautista, were injured.
Agustin said the plane, which was carrying cargo from Palawan, stalled in the middle of the runway when its landing gear collapsed as it was making its landing.
Fire and rescue workers were immediately on the scene. During the clearing operation, Emer Tablante, a paramedic, suffered a minor injury and was rushed to the San Juan de Dios Hospital.
It took airport personnel some 40 minutes to clear the disabled aircraft from the runway.
An international flight had to be diverted to the Diosdado Macapagal International Airport in Clark, Pampanga.
The Civil Aviation Authority of the Philippines has dispatched investigators to the site to determine the cause of the incident.
source: inquirer.net
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