The Bankruptcy Buzzards in
The Boyd Group
Sightings from The Catbird Seat
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From The Boyd Group website:
The Boyd Group provides assistance to leading airlines, airports, aircraft manufacturers, and financial institutions.
Since 1984, The Boyd Group has established itself as the leader in consulting, research and forecasting that finds new perspectives, new alternatives, and emerging trends.
What The Boyd Group says today, is what the rest of the consulting industry will be talking about next year.
Welcome to our website.
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July 26, 2007
NTSB faults pilots in Comair crash
WASHINGTON — Two pilots of a Comair regional jet that crashed last year in Kentucky after taking off from the wrong runway overlooked numerous signs that should have prevented the accident, federal accident investigators concluded Thursday.
Comair Flight 5191 crashed in a fireball a short distance from Blue Grass Airport in Lexington, Ky., shortly before dawn on Aug. 27. The impact and fire killed 49 of the 50 people aboard, making it the deadliest accident in the USA since 2001.
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LIABILITY: NTSB to discuss the cause of Kentucky crash
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The National Transportation Safety Board (NTSB) ruled that the pilots of the Bombardier CRJ-100 caused the crash by overlooking ample cues. The runways and taxiways were marked with large lighted signs. The runway numbers were painted on the ground. And the short runway they used was completely dark, in contrast to the correct runway nearby, which was lighted.
The board members and staff investigators said they struggled for months to explain how two competent pilots and the tower controller who cleared the jet for takeoff could make such obvious mistakes.
"The 'aha!' moment remains elusive for us," said board member Debbie Hersman. "This accident has led us into the briar patch of human behavior."
One likely explanation was 40 seconds of inattention by Capt. Jeffrey Clay and co-pilot James Polehinke, the only survivor, as they taxied toward the runway, the board said. The two talked about seeking other jobs, the type of chatter that is prohibited by federal rules during critical portions of a flight.
The board also ruled that the Federal Aviation Administration contributed by not requiring stricter standards for how planes must taxi. Investigators criticized the controller for turning his back to perform administrative tasks. But, in a divided vote, the five-member board decided the controller's actions did not contribute directly to the crash.
July 26, 2007
NTSB to discuss the
cause of Kentucky crash
USA Today
WASHINGTON (AP) — Numerous liability lawsuits stemming from last summer's crash of Comair Flight 5191 in Kentucky may hinge on where the National Transportation Safety Board lays blame.
Federal investigators also were expected to recommend ways to prevent such accidents. Interim findings by the NTSB, which began meeting Thursday morning to discuss the accident, focused on how the jetliner ended up on a runway too short for takeoff by commercial aircraft.
Forty-nine of the 50 people aboard died in the crash on Aug. 27, 2006, at Blue Grass Airport in Lexington, Ky.
No witnesses were expected to be called at the NTSB meeting, and the only discussion planned was to be between the five board members and their staff.
Commuter airline Comair has acknowledged at least some culpability. Pilots violated cockpit rules about extraneous conversation as they were going through their preflight checklist and may have been distracted as they steered the jet in the pre-dawn darkness onto the wrong runway.
Unclear is whether anyone beyond Comair will share blame from the government.
About 25 relatives of crash victims gathered at a hotel in downtown Lexington on Thursday to watch a video link to the hearing. Melissa Byrd, whose brother, Ryan, died in the crash, said it has been "a very long year" and she didn't expect any surprises at the hearing.
"Honestly, at this point, we don't care who's to blame," Byrd said.
Anita Threet, whose husband, Greg, was killed in the crash said a comprehensive report that tells how and why the crash happened might help her family move forward.
"The more information we get, it does help," she said.
Comair contends that the government itself (a.k.a. US Taxpayers) — specifically the Federal Aviation Administration, which runs the control tower at Blue Grass Airport — also is partly responsible. At the time of the crash, only one controller staffed the tower, despite an FAA directive that at least two should keep watch.
Also under scrutiny is a construction project at the airport that altered the taxiway route just a week before the crash. Airport officials insist the project complied with FAA guidelines, but the updated route didn't appear in a manual carried by Comair pilots and wasn't broadcast over the tower's audio system to pilots that morning.
One lawsuit filed by a victim's family makes a case against manufacturer Bombardier, suggesting that the plane should have been better suited to withstand flames. Autopsies showed that as many as 16 passengers inhaled smoke, suggesting they survived the impact but not the fire that followed.
The crash of the Bombardier Canadair CRJ-100 marked the end of what had been called the safest period in aviation history in the United States. There hadn't been a major crash since Nov. 12, 2001, when American Airlines Flight 587 plunged into a residential neighborhood in Queens, N.Y., killing 265 people, including five on the ground.
August 27, 2006
Crash comes amid
Comair bankruptcy
By Dan Blake, The Courier-Journal
Sunday's Comair crash came as the Erlanger, Ky.-based airline was making progress negotiating better deals with its unions and creditors in bankruptcy court.
After striking new deals with its pilots and mechanics, the company is trying to get $7.9 million in savings, including pay cuts, from its flight attendants. Comair’s cost-saving deals with pilots and maintenance workers only take effect if it can get concessions from its 970 flight attendants.
Comair and the Teamsters, which represents its flight attendants, reported progress in the talks last week.
The airline has 6,400 employees and operates 850 flights daily to 108 cities. It filed Chapter 11 bankruptcy as part of Delta’s bankruptcy filing on Sept. 14, 2005.
Delta reported a $4.3 billion loss in the first six months of the year, nearly triple its loss in the first half of 2005. Delta did not break out Comair’s finances.
Bankruptcy protection is intended to allow companies a chance to streamline their operations and negotiate better terms with creditors. By operating in bankruptcy court, the company doesn’t have to pay many of the bills that piled up before the filing.
Delta put pressure on Comair to revise its cost structure last week by inviting Comair and others to bid to fly Delta regional routes. While Comair is owned by Delta, it will have to compete with outside carriers in bidding for the work.
Other airlines have had recent financial trouble.
Northwest Airlines filed for bankruptcy last year, the same day that Delta filed. It had a $65 million pension payment that it couldn’t miss unless it was in Chapter 11.
ATA and United Airlines finished their bankruptcy reorganizations in February.
Hawaiian Airlines left bankruptcy protection in June 2005 and US Airways exited almost a year ago after receiving approval to merge with America West.
Passengers probably won’t become skittish about flying a bankrupt carrier, said Michael Boyd, president of aviation consultants The Boyd Group in Evergreen, Colo.
“We’re so immune to the term ‘bankruptcy.’ It hasn’t translated into maintenance sloppiness,” he said Sunday.
The Federal Aviation Administration is permitted to give closer scrutiny to maintenance practices at bankrupt airlines, but it wasn’t clear yesterday whether the government had done so with Comair.
MEET M. MICHELLE BURNS
M. Michele Burns, age 50, is chairwoman and chief executive officer of Mercer. Ms. Burns joined MMC as executive vice president on March 1, 2006, assumed the position of chief financial officer of MMC on March 31, 2006 and moved to her current position with Mercer on September 25, 2006.
Prior to joining MMC, Ms. Burns was executive vice president and chief financial officer since May 2004, and chief restructuring officer, and chief financial officer since August 2004, of Mirant Corporation, an energy company, following the company’s bankruptcy filing in 2003.
Prior to joining Mirant, she was executive vice president and chief financial officer of Delta Air Lines, Inc. from August 2000 to April 2004. She held various other positions in the finance and tax departments of Delta beginning in January 1999. Delta filed for protection under Chapter 11 of the United States Bankruptcy Code in September 2005.
M. Michelle Burns, currently a director of Wal-Mart Stores, Inc. and Cisco Systems, Inc., she previously served as executive vice president.
For Wal-Mart Stores, Inc.:
Cash Compensation (FY December 2006)
Salary: $625,000
Bonus: $750,000
Latest FY other long-term comp. $945,832
Total: $2,320,832
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From wikipedia:
WAL-MART
Financial
In 2006, Wal-Mart was 67th most profitable corporation (profits divided by total revenue), behind retailers Home Depot, Dell, and Target, and ahead of Costco and Kroger. For the fiscal year ending January 31, 2006, Wal-Mart reported a net income of $12.178 billion on $344.992 billion of sales revenue (3.5% profit margin). For the fiscal year ending January 31, 2006, Wal-Mart's international operations accounted for about 20.1% of total sales. As of Mar 06, 2008, net sales for the 4-week period ending Feb 29, 2008 was $29.1 billion, up 8.9% from the previous year's results.
Governance
Wal-Mart is governed by a fifteen-member Board of Directors, which is elected annually by shareholders. S. Robson Walton, the eldest son of founder Sam Walton, serves as Chairman of the Board. Lee Scott, the Chief Executive Officer, serves on the board as well. Other members of the board include Aída Álvarez, James Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas N. Daft, David Glass, Roland A. Hernandez, Allen Questrom, Jack Shewmaker, Jim Walton, Christopher J. Williams, and Linda S. Wolf.
Notable former members of the board include Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), the latter having served as Vice Chairman. Clinton left the board before the 1992 U.S. Presidential Election, and Coughlin left in December 2005 after pleading guilty to wire fraud and tax evasion for stealing hundreds of thousands of dollars from Wal-Mart. On August 11, 2006, he was sentenced to 27 months of home confinement, five years of probation, and ordered to pay $411,000 in restitution.
http://en.wikipedia.org/wiki/Walmart
August 23, 2005
Northwest, Delta show industry ailing
United Transportation Union News
Another round of economic troubles is buffeting the airline industry this week, raising new concerns that passengers soon could face fewer choices, according to this report by Mark Skertic published by the Chicago Tribune.
Northwest Airlines has kept flying even though the carrier's mechanics walked off the job Saturday in a dispute over wage and job cuts. Although the airline's ability to continue operating impressed Wall Street, passengers were experiencing an unusually high number of delayed flights, according to some analysts.
Meanwhile, Delta Air Lines watched its stock price reach a historic low Monday, as investors reacted to last week's warning that the carrier may renege on a promise last year not to seek further concessions from pilots. The news is seen as another step closer to bankruptcy for Delta.
If the Atlanta-based airline seeks court protection, it would join United Airlines, US Airways and ATA Airlines in the ranks of airlines shedding costs while in bankruptcy....
The nation's largest airlines are hoping they can outlast the competition, said airline analyst Robert Mann.
"That's been the problem for four-plus years now," Mann said. "They're all playing the game, trying to be the last man standing. Or at least not be the first one to fall."
Northwest spent the past 18 months preparing for a possible strike by the Aircraft Mechanics Fraternal Association, which represents about 4,200 mechanics, aircraft cleaners and custodians. The airline used outsourcing and mechanics laid off from other airlines to replace its mechanics. Other unions have not honored the mechanics' picket lines.
The Eagan, Minn.-based airline told mechanics it needed $176 million in concessions, the union's contribution toward $1.1 billion in annual spending cuts Northwest management said are necessary to the airline's survival.
While Northwest announced it expects to complete 96 percent of its flights this week, it did not respond to questions about late arrivals. An analysis by industry newsletter Aviation Daily estimates that dropping 4 percent of the flights would translate into 300 cancellations by week's end.
Joe Brancatelli, who publishes the business-travel Web site JoeSentMe (www.joesentme.com), chose 99 random Northwest flights on Saturday and again on Sunday and monitored their on-time performance. On Saturday, 46.5 percent were on time; that figure rose to 53.5 percent by Sunday.
"Business travelers want 100 percent on time; airlines crow when it's 70 percent," Brancatelli said. "Fifty percent is meltdown."
Such problems didn't hurt Northwest's performance on Wall Street. Shares in the airline rose 28 percent, to $5.66, in trading on the Nasdaq stock market.
The same was not true for Delta. It's stock fell 6 percent to close at $1.41, down 9 cents, in trading on the New York Stock Exchange. It was the lowest level since analysts began tracking such data in 1962, according to The Associated Press.
Despite current woes, the long-range prospects for many carriers are sunny, said Michael Boyd, an airline industry consultant in Evergreen, Colo.
Some airlines in economic turmoil soon could be "in the catbird seat," he said. United, for example, has used the powers of the bankruptcy court to shed billions of dollars in pension obligations, renegotiate contracts and push employees to accept deep concessions.
The industry's financial woes have led to speculation of mergers. But even if Delta and other large carriers follow United into bankruptcy, quick consolidation is unlikely, Boyd said.
It is expensive and unwieldy to try and merge two large network carriers that have huge differences, including fleet makeups and pay scales. If consolidation comes, it is likely to come at the regional level, he said.
"What we're doing is removing airplanes that are becoming more and more uneconomic," Boyd said. "Which means maybe a lot of smaller communities have less air service.
"It's going to be smaller and midsize communities that will see capacity reductions. Chicago-O'Hare won't see capacity reductions to speak of. It's economics. It's getting more and more expensive. It's getting more expensive to serve places like Brownsville, Texas."...
www.utu.org/WorkSite/detail_news.cfm?ArticleID=23117
From The Boyd Group website:
The Boyd Group Advantage
The Small Community Air Service Development
Grant Program - 2006
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August 14, 2006.
Grant Award Review
Awards were a bit later than expected, but earlier than we feared, as our e-mail to clients discussed last week.
The Boyd Group Advantage: We are pleased to announce that our clients have been awarded 32% of the total 2006 grant funding. As in past years, this is an achievement no other consulting firm can match.
This possibly being the program's last year, there were some disappointments in grants that were not awarded, but in most cases the rationale was reasonably sound....
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MORE TO COME
Meanwhile, you can peruse more bankruptcy buzzard poop by flying to.... Aloha Airlines
Confessions of a Whistleblower
Conseco: Birds in the Trailer Park
The Eagle Hooded: The 9-11 Coverup
P-s-s-t, wanna buy a good audit?
The Silence of the Whistleblowers
And, for Sidney Skolnick’s excellent series entitled
The Bankruptcy Bordello, see...
www.skolnicksreport.com/bankbord-1.html
www.skolnicksreport.com/bankbord2.html
www.skolnicksreport.com/bankbord.html
www.skolnicksreport.com/bankbord4.html
www.skolnicksreport.com/bankbord5.html
www.skolnicksreport.com/bankbord6.html
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Last Update January 18, 2009, by The Catbird