September 18, 2005
By The AVweb Editorial Staff
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It's business as usual at Delta and Northwest Airlines despite their dramatic back-to-back bankruptcy filings on Wednesday and most employees and passengers would notice little, if any, difference in either operation. But for retired employees or the soon-to-be retired, it's a different story. One of the principal benefits of bankruptcy protection is the opportunity to ask a bankruptcy judge to allow the airline to walk away from the company pension plan. United did it earlier this year and some retirees saw their retirement incomes chopped in half or more in the blink of an eye. In fact, according to Air Transport World, the Northwest CEO admitted the airline filed for Chapter 11 protection on Sept. 14 to avoid making a $65 million pension fund payment on Sept. 15. Now the U.S. Pension Benefit Guaranty Corp. (PBGC), which will likely be saddled with the under-funded pensions -- it got United's -- is crying foul, saying bankruptcy doesn't entitle the airlines to simply stop paying. The PBGC's Executive Director, Bradley Belt, said the airlines continue to be legally bound to make the payments. "Nothing in the bankruptcy code requires companies to skip their pension funding payments," Belt said. In United's case, it took a ruling from a judge that continuing to fund the pensions would make it impossible for the company to emerge from bankruptcy.
According to the PBGC, Delta's employees will fare better than Northwest's, should those airlines obtain similar court permission to dump their pension plans. Delta's pension plan is under-funded by $10.6 billion and the PBGC would have to cover $8.4 billion of that, meaning Delta retirees would face a 20-percent cut in their checks if it were applied as a uniform cut across the board. Northwest's plan is $5.9 billion in the hole but only $2.8 billion will be picked up by PBGC, meaning the retired employees will absorb more than half the loss. The rules governing PBGC payments are particularly hard on pilots. Those who've already been there say it's not what they expected (or planned for) out of retirement. After United's pension debacle, Rep. George Miller (D-Calif.) conducted an online forum for those affected by the default and more than 2,000 people replied. "We have been overwhelmed -- both numerically and emotionally -- by the response," said Miller. The retirees told stories of losing homes, being unable to afford medical treatment and of hitting the bricks, in their 60s and 70s, to look for work. The PBGC guaranteed $45,000 a year for United employees who retired at age 65 and those who retired early pay dearly for it. Since airline pilots must retire at 60, the most they could draw from the newly configured pension plan was $28,000 a year, a cut in pension pay of 80 percent for some of that company's longest-serving pilots.
So, as Delta and Northwest get ready to walk away from their pension responsibilities and leave creditors in the lurch you'd think it would be difficult for them to borrow money. Not so. The country's most powerful financiers are lining up to hand over billions to the airlines to fund their emergence from bankruptcy. That's because they can cut a special deal that guarantees they're first in line to see their money return, stepping in front of others further down the queue who stand to lose more if the deal goes sour. "The reality is the lenders usually come out OK," Samuel Engel, a vice president with aviation consultant Simat Helliesen and Eichner, told the Chicago Tribune. There aren't many lenders with pockets that deep but JP Morgan Chase and Co. and Citigroup both have deals already done or pending. General Electric also lends to the airlines, not just for the windfall that is all but guaranteed when the loans are repaid. The collapse of one of the big airlines would flood the market with surplus airplanes and that wouldn't be good for GE's jet engine or aircraft leasing businesses. "They want to minimize the impact of aircraft being taken out of the market," James Harris, president of Seneca Financial Group, told the Tribune.
Whenever something bad happens to the heritage carriers, Southwest is usually held up as the example of how to run an airline. True, Southwest is doing well but even the leader of low budget sees some turbulence ahead. That's why CEO Gary Kelly was in Seattle last week telling Boeing executives he needs a new plane. Not another 737 (he already has 425 of them) -- a whole new air-travel-for-the-masses aircraft that borrows technology from the 787 Dreamliner to make it more efficient. "We are now facing energy prices that no airline can make money at, at least with today's [ticket prices] so we're anxious to partner with Boeing to find a successor aircraft," Kelly told The Seattle Times. Southwest is riding out the fuel price spike better than most thanks to some advance planning that will keep its costs lower than other airlines for the next five years. The airline gambled on fuel hedges and, for 2005, is paying just $26 a barrel for 85 percent of its fuel. Oil is now trading in the $65 range. Southwest has diminishing percentages of those hedges for another five years. So, it's not much of a surprise that Southwest stock jumped a percentage point on news of the Delta and Northwest bankruptcies.
THE BOSE AVIATION HEADSET X DELIVERS AN UNMATCHED COMBINATION
The long-awaited debut of Nemesis NXT in the Sport Class at the Reno National Championship Air Races ended with pilot Jon Sharp "maydaying out" on the first lap of the Gold final on Sunday. Darryl Greenamyer, in a 600 h.p. Lancair Legacy came first with a speed of 364.9 mph followed by John Parker in the 700 h.p. Thunder Mustang at 356.7 mph. An indication that the Nemesis team might be on to something was Kevin Eldridge's third place finish in a Nemesis NXT he calls Relentless. With a stock Lycoming TIO-540 putting out 350 h.p. at 343.1 mph. A vibration problem that has plagued the cutting edge kit racer prompted Sharp's decision to bow out of Sunday's final. The aircraft finished only one race during the week, placing sixth in a heat on Saturday (speed not available at our deadline). According to the team's Web site a gear door has been giving the crew fits. The aircraft did qualify on Wednesday with a speed of 323.381 mph.
And while the Sport class is heralded as the next big thing in air racing, the sleek, composite kit planes still have a lot of work ahead of them to overcome the sheer muscle of the Unlimiteds. The hugely modified -- 4,000 hp -- Grumman Bearcat Rare Bear, with John Penney in the cockpit, took the Gold final on Sunday with a speed of 466.3 mph, more than 100 mph faster than Greenamyer's (600 hp) Sport class time. Two Sea Furies rounded out the top three with Brian Saunders guiding Dreadnought to a 448.8 mph second place and Stewart Dawson's Spirit of Texas in third at 430.4 mph. Penney also found winning form in the Jet class, flying the L-39 Albatros at an average speed of 454.2 mph. In the T-6 class, Mary Dilda posted a winning speed of 237.2 while Andrew Buehler flew his Mong Sport to victory in the biplanes at 230.8 mph. Gary Hubler won the Formula One class in Mariah at a speed of 252.3 mph.
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Stanley Kubrick couldn't have scripted anything more eerie than the real-life odyssey of a Malaysian Airlines Boeing 777 that seemed hell-bent on crashing itself on a trip from Perth to Kuala Lumpur last Aug. 1. According to The Australian newspaper, the Malaysian flight crew had to literally battle for control of the aircraft after something went wonky with the computerized controls. The plane was about an hour into the flight when it suddenly climbed 3,000 feet and almost stalled. The Australian Transport Safety Bureau report said the pilot was able to disconnect the autopilot and lower the nose to prevent the stall but the autothrottles refused to disengage and when the nose pitched down they increased power. Even pushing the throttles to idle didn't deter the silicon brains and the plane pitched up again and climbed 2,000 feet the second time. The pilot was able to fly manually back to Perth but the autothrottles wouldn't turn off. As he was landing, the primary flight display gave a false low airspeed warning and the throttles firewalled again. The display also warned of a non-existent wind shear. Boeing spokesman Ken Morton said it was the only such problem ever experienced on the 777 but airlines have been told via an emergency AD to load an earlier software version just in case. The investigation is focusing on the air data inertial data reference unit (HAL for short?), which apparently supplied false acceleration figures to the primary flight computer.
Cessna's long-time training partner FlightSafety International will provide initial type training for customers of the new Mustang "personal" jet. FlightSafety will operate simulator and classroom sessions at training centers in Wichita and Farnborough, England. Cessna spokesman Roger Whyte said the large number of European customers made the English center necessary. Each school will have a motion-based Level D sim and avionics flight training devices. After earning their type rating, Mustang pilots will spend some time in the aircraft with FlightSafety instructors as part of a new "mentoring" program specifically for the little jet's new owners. Meanwhile, Eclipse Aviation has announced its very light jet (VLJ) has passed FAA airframe static testing. An Eclipse news release said the aircraft's wings, fuselage and flight controls were subjected to big loads to make sure they didn't fail. The company said there were no failures during the tests. The FAA has granted a 10,000-hour airframe lifetime but the company says that will be extended to 20,000 hours. The Eclipse is expected to get full certification in March 2006 and the Mustang hopes to follow by the end of the year.
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A former flight instructor who allegedly thought that threatening to crash a Piper Cherokee into New Zealand's tallest building was the way to win back his estranged wife's heart is in hospital in Auckland, N.Z., after a two-hour drama that ended Saturday with the Cherokee crashing in the water 150 feet from a downtown beach. The man is being accused of stealing the Cherokee from the Massey University School of Aviation at Auckland's Ardmore Airport and telling air traffic controllers he planned to crash it into the Sky Tower, a 1,000-foot building in downtown Auckland. He reportedly told police his wife had left him and he wanted her back. No one else was hurt in the incident but the aircraft's low-level pass over the beach made an impression on 17-year-old Tortia Wilson and her friends. "We just wet ourselves," she told TV New Zealand. "If you've got an airplane coming at you, you don't know whether to run or hide." The Cherokee was shadowed by a police helicopter, but the New Zealand Air Force didn't scramble any fighters ... perhaps because it doesn't have any. The New Zealand Defence Force's Air Combat Wing was dissolved four years ago and the 34 A-4 Skyhawks and Aermacchi jets have been mothballed ever since. The whole fleet is heading to the U.S. It was purchased by a civilian contractor, Tactical Air Services, for about $110 million. The company provides pilot training under contract to the U.S. government.
Dade County will receive $2.5 million in damages and restitution to help cover the costs of fuel thefts, inflated contractor bills and various other forms of corruption that occurred at the Miami International Airport's (MIA) fuel farm. Up to 30,000 gallon of jet fuel per month were stolen and sold on the black market while the farm was run by ASIG Miami, a subsidiary of Airport Services International Group. According to the Miami Herald, ASIG's fuel farm supervisor took part in some of the scams and is now a cooperating witness for the prosecution. Eighteen people have been arrested and five companies are facing criminal charges. ASIG management claimed to be unaware of the corruption, which, in addition to the fuel thefts, involved contractors billing inflated amounts for work that was never performed. The company is also planning to plead no contest to a fraud charge this week in an agreement that will be formalized in court. "The company immediately began cooperating with the State Attorney's Office and did its best to clean house," ASIG lawyer Ben Kuehne told the Herald.
ANNOUNCING LYCOMING ENGINE OVERHAULS
To his colleagues, he's Frank Ferrante, photocopier repairman. But on weekends, he's Trapdoor, the flight leader of a flight of five F-14s from the famed VF-103 Jolly Rogers squadron, yankin' and bankin' over the desert expanses of Nellis Air Force Base. Or, at least what Nellis looks like on the screens inside a nondescript industrial building in Irvine, Calif. Ferrante and his friends are members of a flight simulator club, getting their tech fix on hardware worthy of an Air Force training center at Flightline Flight Simulation Center. For about $40 an hour, devotees can spend an hour in a simulated cockpit that features flight controls made from the same molds as are used in production of real F-15s. Couple that with modified software and all those cool call signs and the armchair daredevils can pretend to be Top Guns without taking the oath. "Some guys have a bowling club; we have this," Rich Rebenstoff, a "squadron leader," told The New York Times. Flightline uses off-the-shelf software, Jane's USAF, to run the simulators but it has an agreement with Jane's that allows it to tinker with the code. That, for example, enables Rebenstoff's group to add realistic battle scenarios and even satellite imagery to their fun. "We'll tailor our flights to resemble missions being flown," he said. "Although we will fun it up quite a bit." Members often wear flight suits and use their call signs in conversation. "They're looking for real-world camaraderie," said Ferrante. "You can get out, shake hands and brag with each other face to face."
While Katrina is now a middle item, at best, on the evening news, there is still much work to be done in the Gulf Coast area and GA continues to do its share. While most of the GA activity involves short hops into the affected areas with supplies and back out with refugees, pilots have been contributing some long-haul services, too. At least two pilots from Colorado Springs flew to Mississippi to pick up relatives of local residents trapped by the storm. "I just cried. I couldn't believe it. He did this out of the goodness of his heart," said Kimberly Akerlund after pilot Alan von Ahlefeldt delivered her relatives from Crystal Springs, Miss., to Meadow Lake Airport near Colorado Springs. But then, the selflessness of GA pilots has become a common theme in the crisis and no one has been following it more closely than AVweb. Click through for our comprehensive review. Thanks to close contacts maintained through Rol Murrow and the Air Care Alliance and other volunteer flying groups, we've been able to chronicle the tremendous contribution GA has made in easing the plight of the storm's victims, sometimes by overcoming a bureaucracy that was often paralyzed and unable to tap the resource at its fingertips. Pilots simply got it done and their stories are fascinating. AVweb senior correspondent Mary Grady has compiled a special report on the effort and it debuts today on our Web site.
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An unmanned aerial vehicle flew into Hurricane Ophelia last week and flew out with data from the dangerous near-surface high wind zone of the storm. Manned aircraft steer clear of that hazardous environment but the Aerosonde UAV, flying for the National Oceanic and Atmospheric Administration, completed the 10-hour mission unscathed. The goal of such flights is to improve forecasting...
The FAA has adopted an Airworthiness Directive calling for the replacement of crankshafts in about 1,200 Lycoming 360- and 540-series engines. The AD takes effect Oct. 21 and owners have 50 hours or six months to comply...
South African Airways could face sanctions from the country's environmental authorities after the pilot of one of its planes allegedly dumped tons of fuel too close to the coastline. The plane had to return to Cape Town International Airport after takeoff because the flight crew had forgotten to remove the locking pin from the landing gear.
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DOUG RITTER'S SURVIVAL GEAR SPECIALS FROM AEROMEDIX.COM
Katrina: The GA Response
When Hurricane Katrina left the Gulf Coast devastated, general-aviation aircraft and pilots were there to help. AVweb reports on what has been done so far and what else we can do.
What's New For September
This month AVweb's survey of the latest products and services for pilots, mechanics and aircraft owners brings you a pulse oximeter, an aircraft security lock, a drill-powered aircraft tug and much more.
FOR AVIATION PROFESSIONALS WHO WORK
AVmail: September 19, 2005
Reader mail this week about user fuel prices, user fees, huricane relief and much more.
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GAMIJECTORS CAN CUT AIRCRAFT FUEL BILLS BY 20 PERCENT!!
The dangers of the double negative...
ATC: Did you get your numbers?
Airline: [Somewhat garbled] Negative.
ATC: Was it "Negative?"
Airline: [Again, rather garbled} Affirmative.
ATC: So ... "negative," or "affirmative?"
Airline: "Affirmative" for "negative..." [The other guy in the cockpit can be heard chuckling in the background.]
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