American Airlines plans pilot training on Boeing 737 Max in November

An American Airlines Boeing 737 MAX 8 flight from Los Angeles lands at Reagan National Airport shortly after an announcement was made by the FAA that the planes were being grounded by the United States in Washington, March 13, 2019.

Joshua Roberts | Reuters

American Airlines is planning to start training its pilots on the still-grounded Boeing 737 Max this November, according to a company memo sent Monday.

The jets were grounded worldwide in March 2019 after two crashes killed 346 people, prompting software and other changes on the aircraft. The Federal Aviation Administration is going through some of the last steps that would allow the planes to fly again but hasn’t provided a specific timeline. The FAA last month issued the safety changes needed for the planes to fly again. Public comments on those changes are due Monday.

An American Airlines spokesman said that the company hasn’t made any “definitive plans” on the Max an that the pilot training date can be adjusted based on regulators’ work.

“With the planned return to service for our B737 MAX aircraft in the near future, we will begin conducting B737 MAX Special Training for our B737 pilots,” Ameya Kingaonkar, director of flight training planning and scheduling, said in a pilot memo, which was seen by CNBC. 

Kingaonkar said that the company expects to train all of its 737 pilots on the Max by the end of January.

Southwest and United said they didn’t have any updates on potential 737 Max pilot training.

“We are awaiting the FAA’s guidance regarding the Max, and that guidance will drive our future timelines,” a Southwest spokesman said.

The 737 Max, while fuel-efficient, would return to air travel running at just a fraction of last year’s levels because of the coronavirus pandemic. Last week, Transportation Security Administration screened 4.9 million people at U.S. airports, down about 5% from the previous week and nearly 70% lower than a year ago.

Airline stocks were down sharply on Monday as concerns over further Covid-19 restrictions in Europe amid more outbreaks of the virus.

In afternoon trading, American Airlines’ shares were down more than 7%, Delta was off 9% and United was down 8%, while the S&P 500 was down 2.4%.

Michigan judge blocks law that banned paid transportation to polls

District Judge Stephanie Davis, who was appointed by President Donald Trump, granted a preliminary injunction on Thursday, blocking the state law and lifting the restrictions on paying to transport people to polling places. The lawsuit was filed by Priorities USA, a pro-Biden group, which says it wants to spend money in Michigan to help people participate in the election.

“Congress implemented a statutory scheme and gave citizens the right to spend money on transporting voters to the polls. The November election is nearly upon us and any particular election only occurs once,” Davis wrote, concluding that the only way to prevent people’s rights from being violated for the upcoming election was to temporarily block the state law.

Because of the transportation law, Michigan was the only state in the country where Uber didn’t offer discounted rides to the polls in past elections, according to earlier court filings.

“This decision by the Michigan District Court is a victory for all Michigan voters and another defeat for the baseless laws that make exercising the right to vote more difficult,” Guy Cecil, chairman of Priorities USA, said in a statement Thursday evening.

The judge rejected an attempt by liberal groups to ease restrictions on who can handle absentee ballot applications. Michigan doesn’t let political organizations play a role in the application process for mail ballots — only voters and their family can handle the paperwork.

Southwest Airlines trims cash burn, will keep middle seats open through November

A bird flies by in the foreground as a Southwest Airlines jet comes in for a landing at McCarran International Airport on May 25, 2020 in Las Vegas, Nevada.

Ethan Miller | Getty Images

Southwest Airlines on Wednesday said it has logged a “modest” improvement in bookings through October, helping it trim its daily cash burn estimate for this quarter by $3 million to an expected $17 million.

Despite the uptick in bookings, the Dallas-based airline expects revenue to drop 65% to 75% in October and capacity down 40% to 50% from the same month last year as the coronavirus pandemic continues to hurt travel demand. It forecast November capacity to drop 35% to 40% from 2019.

Southwest said it would extend a policy that leaves middle seats open on its flights, except for travelers in the same party, through the end of November, an effort to calm travelers nervous about flying in a pandemic and better compete at the start of the end-of-year holidays. Delta Air Lines, for example, last month said it would limit capacity on flights through Jan. 6.

Southwest shares were up 0.8% in premarket trading.

Congressional report faults Boeing, FAA for 737 Max failures, just as regulators close in on recertification

Numerous design, management and regulatory failures during the development of the 737 Max preceded the “preventable death” of 346 people in two crashes of the popular Boeing jetliner, according to a damning congressional report released Wednesday.

The House Committee on Transportation and Infrastructure’s 238-page report painted a Boeing that prioritized profits over safety and detailed “disturbing cultural issues” relating to employee surveys showing some experienced “undue pressure” as the manufacturer raced to finish the plane to compete with rival Airbus. The report said concerns about the aircraft weren’t sufficiently addressed to spur design changes.

Some lawmakers this year introduced legislation that aims to increase the Federal Aviation Administration’s oversight of the industry.

The report, in the works for about 18 months, comes as regulators are in the final stretch of work to recertify the planes. The 737 Max has been grounded worldwide since March 2019, following the second of the planes’ two fatal crashes.

“They were the horrific culmination of a series of faulty technical assumptions by Boeing’s engineers, a lack of transparency on the part of Boeing’s management, and grossly insufficient oversight by the FAA—the pernicious result of regulatory capture on the part of the FAA with respect to its responsibilities to perform robust oversight of Boeing and to ensure the safety of the flying public,” said the report. The lawmakers and staff received 600,000 pages of records from Boeing, the FAA, airlines and others, for its investigation, conducted interviews with two dozen employees and regulators, and considered comments from whistleblowers that reached out to the committee, they said.

Lion Air Flight 610 from Jakarta, Indonesia, on Oct. 29, 2018, and Ethiopian Airlines Flight 302 from Addis Ababa, Ethiopia, on March 10, 2019, both crashed shortly after takeoff, killing everyone on board. At the center of the crashes was an automated system known as MCAS, against which pilots for both flights battled against. It was activated after receiving inaccurate sensor data. 

Pilots were not informed of MCAS until after the first crash and mentions of it were removed from their manuals. Last year, the National Transportation Safety Board found Boeing overestimated pilots’ ability to handle a flurry of alerts during malfunctions.

Boeing has made changes to the MCAS system that render it less powerful, give pilots greater control and provide it with more data before it is activated. That is among other changes regulators have reviewed as part of the process in recertifying the planes as safe for the traveling public.

“We have learned many hard lessons as a company from the accidents of Lion Air Flight 610 and Ethiopian Flight 302, and from the mistakes we have made,” Boeing said in a written statement. “As this report recognizes, we have made fundamental changes to our company as a result, and continue to look for ways to improve. Change is always hard and requires daily commitment, but we as a company are dedicated to doing the work.”

The House report, led by Rep. Peter DeFazio, D-Ore., the committee chair, and Rep. Rick Larsen, D-Wash., head of the aviation subcommittee, said its investigation “leaves open the question of Boeing’s willingness to admit to and learn from the company’s mistakes.”

Some of crash victims’ family members say Boeing has not done enough.

“I think the project as a whole should be scrapped,” Yalena Lopez-Lewis, whose husband Antoine was killed on the Ethiopian Airlines flight, said in an interview. “I think this was a rushed project and … now they’re rushing to recertify. You can’t place a dollar value on the lives of any passenger.”

Michael Stumo, whose daughter Samya Stumo was killed in the Ethiopian Airlines crash, said Boeing and regulators didn’t do enough after the first crash five months earlier.

“Before Lion Air it was a mistake. After Lion Air it was unforgivable,” he said in an interview.

The crashes pushed Boeing into its biggest-ever crisis, as its bestselling aircraft couldn’t be delivered to customers and costs mounted. The various missteps cost Boeing’s former CEO Dennis Muilenburg his job and prompted the company to undergo an internal restructuring to improve its approach to safety. Now the coronavirus pandemic that has roiled air travel demand worldwide coupled with the extensive grounding presents Boeing with a new problem: cancellations of the planes are piling up. 

The manufacturer’s problems don’t end with the 737 Max. It recently discovered flaws on some 787 Dreamliners, prompting inspections that have slowed deliveries of the wide-body aircraft.

United Airlines bets on Africa, India and Hawaii in 2021 expansion

A Boeing 787 Dreamliner operated by United Airlines takes off at Los Angeles International Airport (LAX) on January 9, 2013 in Los Angeles, California.

David McNew | Getty Images

United Airlines is setting its sights on Africa and India, regions that have long been minor players in its network as it tries to expand as profitably as possible during the coronavirus pandemic.

The Chicago-based airline on Wednesday said next spring it will launch three weekly nonstop flights from Washington Dulles International Airport to Accra, Ghana, and Lagos, Nigeria, a bid for travelers visiting friends and family. It had discontinued a Houston-to-Lagos route, at the time its only Africa flight, in 2016 in the wake of the oil bust. United will also add a daily nonstop flight from Newark, New Jersey, to Johannesburg, adding to the South Africa service it launched with a Cape Town flight last December as it chases leisure travelers.

“We are looking to places where we have low share that has more upside for the future United and our travelers,” United’s chief commercial officer, Andrew Nocella, said in an interview. 

The airline is also planning to add daily service to Bangalore, India, from San Francisco next summer, a move that aims to capture business travelers between the two major tech hubs. That sets it up for a battle with American Airlines, which in February announced plans for service to Bangalore from Seattle. United will also add daily nonstop flights between Chicago and New Delhi late this year.

“Bangalore has been one of the most requested destinations at United over the last few years,” said Nocella, adding that United could expand service beyond a once-daily flight there later on.

The new flights’ success hinges on how the pandemic develops and a web of travel advisories and restrictions. Dozens of countries remain off limits for U.S. citizens, including most of Europe. 

“We all know that Covid will some day come to an end and we know that borders will reopen, so we’re looking toward the future,” Nocella said. “This is the time to do it.”

The pandemic has quickly remade airlines’ networks and reshaped traveler behavior. United and its rivals that enjoyed robust international networks before the pandemic have focused more of their service within the U.S. In October 2019, international flights accounted for 44% of United’s capacity and that share will drop to 35% this October, a spokesman said.

As part of that domestic push, United will add more service to Hawaii with nonstop flights between Chicago to Kona and between Newark and Maui next summer.

Another major change in consumer behavior is that travelers are booking closer to departure, Nocella said. “We think the vast majority of travelers are waiting a bit longer” to make holiday reservations “but we expect them to be strong.”

And facing a dearth of business travel, United’s customers are skewing younger than before the pandemic, he added.

Earlier Wednesday, United said its capacity in the third quarter of 2020 would likely be down 70% from last year, slightly more than the 65% decline it previously forecast.  United expects its third-quarter passenger revenue to be 85% lower compared with 2019, worse than a previous estimate of an 83% drop.

CEO Scott Kirby has said he expects demand to plateau at 50% of 2019 levels until there is a coronavirus vaccine.

Labor Day weekend air travel hits nearly 6-month high, but holiday caps dismal summer season

Travelers wearing face shields and protective masks walk with their luggage inside Tom Bradley International Terminal at Los Angeles International Airport (LAX) in Los Angeles, California, U.S., on Thursday, Aug. 13, 2020.

Bing Guan | Bloomberg | Getty Images

Late-summer getaways helped lift air travel during the Labor Day weekend but the coronavirus pandemic has left its mark on what has shaped up to be a dismal season for airlines.

The number of people screened by the Transportation Security Administration reached 968,673 on Friday, the highest since March 16, agency data released on Monday showed. During the Friday-through-Monday holiday weekend, close to 3.3 million passengers passed through TSA checkpoints, down nearly 60% from the holiday weekend in 2019. That, however, is an improvement from the depths of the coronavirus crisis in April when passenger volume was off by more than 95%.

From Memorial Day through Labor Day weekend, which comprises what is generally the busiest and most lucrative time of year for airlines, TSA screened 65 million people, down nearly 76% from the 269 million it screened on the same dates last year.

Airlines are now scrambling to create more flexible policies to win over travelers, particularly as what is generally the slower fall season followed by the end-of-year holidays approach. Among the changes is a scrapping of domestic ticket-change fees by United last month. A move Delta and American followed with similar policies.

Facing a dearth of business travel as companies are still reluctant to fly workers for meetings and events during the pandemic, carriers are also adding service to leisure destinations near mountains or beaches to try to fill planes.

United Airlines plans to cut 16,000 jobs as coronavirus continues to hammer demand

A United Airlines Boeing 737-800 and United Airlines A320 Airbus on seen approach to San Francisco International Airport, San Francisco.

Louis Nastro | Reuters

United Airlines on Wednesday said it is planning to cut more than 16,000 jobs as early as next month, after federal coronavirus aid that protects aviation jobs runs out.

Those involuntary cuts, many of them furloughs that mean employees can be called back if demand returns, make up close to 17% of United’s staffing level at the end of 2019.

The number, however, is far lower than the 36,000 staff Chicago-based United warned in July that their jobs were at risk. The reduction is thanks to thousands of volunteers who accepted buyouts, early retirement packages and more than a dozen other forms of temporary leaves or reduced schedules. Airlines pleaded with employees to take such options to reduce their headcounts, offering perks like continued health care in some cases, a selling point during the pandemic. More than 7,000 United employees opted to separate from the company.

The company could still further lower the number of involuntary job cuts through voluntary measures, particularly with its pilots.

“The pandemic has drawn us in deeper and lasted longer than almost any expert predicted, and in an environment where travel demand is so depressed, United cannot continue with staffing levels that significantly exceed the schedule we fly,” the airline said in an employee memo.

The planned involuntary cuts of 16,370 jobs include 6,920 flight attendants, 2,850 pilots, 1,400 management jobs, 2,010 mechanics and 2,260 in airport operations, among others.

United’s announcement comes after American last week said it plans to cut 19,000 jobs and, along with voluntary leaves of absence and buyouts, end up 30% smaller than before the pandemic unless it gets more federal aid.

Airline labor unions and executives have urged Congress for another $25 billion in federal aid to preserve jobs through the end of March, but lawmakers haven’t yet approved a new national coronavirus relief package that could include the airline relief.

The original allotment for airlines, passed in the $2.2 trillion coronavirus relief package in March, prohibits airlines from cutting jobs or pay rates through Sept. 30.

That payroll support was supposed to help airlines manage a plunge in demand in the hopes that travelers would return this summer, but demand has hovered around 30% of last year’s levels, according to federal data, and airlines have scrambled to reduce their headcounts.

United’s CEO Scott Kirby has said he expects demand to plateau at half of 2019 levels without a coronavirus vaccine. The carrier and others are now trying to win back customers. On Sunday, it said it would permanently get rid of $200 domestic ticket-change fees for travelers with all but the cheapest tickets, a move that was quickly followed by Delta and American.

Op-ed: The hyperloop will revolutionize transportation in the post-coronavirus world

Even though hyperloop capsules can reach speeds of 760 miles per hour, on a practical level, this transportation sector appears to be stalled.

Nearly all high-density transportation, from airlines to bullet trains, has come to a near halt amid the worst pandemic in a hundred years. Amtrak cars are deserted, as the railroad passenger service weighs cutting more jobs and access to rural areas. Consulting firm Deloitte notes transportation organizations must contend with “skeletal” workforces and an “unexpected shortfall in their finances” for the foreseeable future.

The challenges facing the transportation sector are significant and multi-faceted.

But past the pitfalls of this antiquated system of steel railroads and cumbersome commercial flights lies a faster future. When we arrive, we’ll enjoy new travel experiences defined by safety, speed, environmentalism and improved comfort.

To get there, you’ll need a fifth mode of transportation: Something low density, yet high volume. Something that is twice the speed of a plane, yet safer than any current public transportation; you’ll need something that is sustainable, reliable, and immune to weather variations. In other words, you’ll need a hyperloop.

Coined by Elon Musk in 2013, hyperloop is a bold engineering initiative to send elevated passenger pods through tubes using magnetic fields, allowing people to travel even faster than modern airplanes from city-to-city. Although the concept sounds futuristic, we are actually very close to realizing it. From Musk to Richard Branson, the world’s greatest minds are building out testing sites across the United States to conduct high velocity experiments. And both state and federal governments are recognizing the value this technology has to their communities.

Virgin Hyperloop test track and tunnel

Virgin Hyperloop

Just last month, the U.S. Department of Transportation issued a direction to establish regulations for hyperloop technology, with Secretary Elaine Chao saying, “Inventors, investors, and stakeholders are ready to build out these technologies.”  The Transportation Department has since categorized hyperloop under the Federal Railroad Administration, making it eligible for government infrastructure funds.

Virgin Hyperloop just received sign off from the Indian government to build out one of its first projects in the country’s western provinces. As an early investor in Virgin Hyperloop, the value this technology has for the transportation sector, company shareholders, local communities, and major metropolitan regions are obvious. After all initial fixed cost investments, hyperloop projects are inexpensive to operate and have a high degree of operating leverage.

They do not rely on fossil fuels as per conventional railroad trains, and are a better alternative for reducing the effects of climate change.

Following the coronavirus outbreak, and momentum for low-carbon policies, my research concluded the most attractive element of hyperloop is being the least discussed.

Hyperloop capsules are uniquely low density, allowing for speed and safety, and yet do not sacrifice a high volume of travel. Think about it this way: When you sit in an airplane, you are in a high-density environment alongside anywhere from 280 to 440 fellow passengers, all confined together in a small steel tube. Aside from the safety issues and weather concerns of modern commercial planes, this high-density environment makes commercial travel highly susceptible to pandemics.

By contrast, the hyperloop’s initial design carries about 30 to 40 passengers per sleek capsule, yet can still reliably deliver high volumes of people to their destination in a similar period of time.

The premise behind future transportation is not to increase volume with higher density travel or larger planes and trains; it’s to increase volume with lower density capsules and higher frequency.

Many skeptics will point to partisan gridlock as one major hurdle the nascent industry faces, using the government showdowns over Amtrak’s operating budget as a case study. But once legislators recognize all of hyperloop’s benefits, these issues will be nonexistent. Republicans like Elaine Chao already love hyperloop because it is creating new economic opportunity zones, while Democrats are embracing its environmental component. Texas Democratic Congressman Joaquin Castro famously once said, “Texas should be building hyperloop.”  

Although the coronavirus pandemic is upending conventional high-density transportation models, we are also witnessing fast-tracked innovations utilizing low-density, high-volume technology due to a lessening of regulatory hurdles. Although the preliminary technology requires a significant amount of testing to assure public safety standards are met, perhaps the groundbreaking EU stimulus of more than $1 trillion in spending, with a particular focus on clean-energy projects,  suggests Congress should reasonably stimulate hyperloop innovation. Hyperloop was conceived in the spirit of American ingenuity, and progress should come from combining the forces of capital, engineering, and Congressional support to achieve a new, highly effective era of American transportation.

By Lucas Asher, CEO of TowerEquity, a private equity firm

Disclosure: Mr. Asher is an investor in Virgin Hyperloop.

United Airlines scraps ticket-change fees for domestic flights in bid to win over customers

A United Airlines passenger jet takes off with New York City as a backdrop, at Newark Liberty International Airport, New Jersey.

Chris Helgren | Reuters

It’s time to say goodbye to the $200 ticket-change fee.

United Airlines on Sunday said that it will permanently scrap fees to change domestic flights, a big bet that more flexible policies will win over much-needed customers as the pain from the coronavirus pandemic’s impact on air travel continue to mount.

It’s a page from the playbook of rival Southwest Airlines, which doesn’t charge customers fees to change their flights.

“Following previous tough times, airlines made difficult decisions to survive, sometimes at the expense of customer service,” said United CEO Scott Kirby in a news release. “United Airlines won’t be following that same playbook as we come out of this crisis. Instead, we’re taking a completely different approach – and looking at new ways to serve our customers better.”

United’s announcement that it will no longer charge travelers the $200 fee comes as airlines are scrambling to find ways to revitalize their businesses, which have been battered by the pandemic. This summer, Transportation Security Administration screenings at U.S. airports are hovering around 30% of last year’s levels, as airlines go without much-needed revenue during the peak summer travel season.

The Chicago-based airline in January will also allow customers who want to depart earlier or later the same day to fly standby without paying a $75 same-day change fee.

The measures could ramp up pressure on rivals to make similar policy changes.

The end of the ticket-change costs is a departure from the myriad add-ons and other fees that airlines spent years rolling out. Last year, U.S. carriers brought in $2.8 billion in ticket-change and cancellation fees, according to the Department of Transportation.