Holiday travelers expected to cause delays at airport
1. big enough cuts from its workers.
PAGE 1~ OF ~7__
US Airways Lays Off 2,500 Employees
Airlines Stop the Gouging;What Took Them So Long?
1. Observant security workers reinforce screening gadgets
  1. Profiling is poor technique
Pre-Clearances May Speed Up Airports
FAA Issues 3rd Warning on Fuel Pumps

t~asvegas ~ui~: i—ioiiua\ iia\

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eNpecicU to cause aeiavs at airport

rage i ot

Return to

the referring

page.

Photos; Guests check into the MCIM Grand Gar\ Haugh. a baggage handler al the MGM Grand

Las Vegas SUN

No\ ember 26. 2002

Holiday travelers expected to cause delays at airport

B~Jud~Odierna

,Iu(l~ a Iasvegassun.com

Tra\ elers can eNpect crowds at McCarran International Airport over the folir—da\ Thanksgiving weekend to be iust as

heav\ as an\ other holida\ weekend, airport officials say.

One likely difference; More families will probably be taking to the air. possibl~causing dela\ s at the security lines.

‘We’re going to see a higher number of residents tra\ cling.” McCarran spokeswoman Debbie Millett said. “We’re going

to see more families with children. w Inch means more diaper bags and strollers. It’s also winter season. so there will be

itiore lica\ ~ coats. It’ll be slow through the checkpoints.”

Millett also sees sonic heightened traffic problems at the parking lots and sedurit\ holdups as tra\ elers try to take

v, rapped gifts ott airplanes.

“If ott have a w rapped gift.

is not going to make

through.” Millett said.

Da\ id Steigmau. spokesman for the Transportation Securit\ Administration, said the agenc\ is tr\ ing to educate

passengers on how to ease nioveineut through airport screening through its website. tsairaveltips.us.

“Our screeners are always oit high alert.” Steignian said. “But the things we emphasiie on how the public can help

niclude puttuig things like a watch ke\ s. coins and jewelr\ into a bag and into their carry—on bag so the) won’t set off the

metal detector.”

Sonic airlines. w hich e\pect to see a 4.5 percent increase in travelers this holida~season. are encouraging fliers to use

self—ser\ ice check~ittkiosks to avoid lines at the ticket counter.

“\oii can get a boarding pass. an c—ticket receipt. change ~our seating all at these machines.” America West Airlines

spokeswoman Patt\ Nowack said. “It’s deltnitel\ another option during the bus\ tra~cling season that ma~alleviate

sta tiding ni a long Ii tie.’’

Ke\ in Bagger, director of Internet niarketing and research for the Las Vegas Convention and Visitors Authorit\

said

the authority eNpects to see about 271.000 ~isitors this weekend, with hotel occupancy at 92.9 percent.

Bagger said the number is slightly higher than last

ear. w hichi had 265.000

isitors.

“On an a’, erage w eekend occupaiic\ is at 92 percent.” Bagger said. “lii March. w hich is usuall\ our strongest month.

occupanc\ is at 95 or 96 percent

Alan Feldman. spokesman for MGM MIRAGE, said most of the coinpaiw ‘s properties are at or iiear sold out. I low ever.

their rates are flat or shiglltl\ lower than last sear.

“L.ast ear Thaitksgi~iiig w as oft substantiall\

.“

Feldman said. “We are trending up a tad but we are still well off froui

our norm

‘~‘(

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The Rio. too. will have nearly 100 percent occupancy over the long weekend, Harrah’s Entertaintiient Inc. spokesman

David Strow said.

“We are pretty happy with what we’re seeing.” Strow said.

Airport officials are expecting about 100,000 travelers per day. which they say is comparable to a normal busy weekend

in Las Vegas.

State~~ide, AAA estimates that 271 .30() Nevadans will travel at least 50 miles from home this holiday, an increase of 2

percent over 2001

An estimated 225,000 will travel by car, while 36.30() will fly, an increase of 4.5 percetit.

“Last Thantksgivitig was the first major holiday after the 9-1 1 tragedy, and travel was. of course. decreased because of

that.” Lisa Foster, spokeswoman for AAA of Nevada, said. “Bitt tiow people have a renewed enthusiasm for travel. I

thitik that the iticrease

iii

the number of people flying is indicative of the fact that people feel ntuch more comfortable

with the airline industry and security this year.”

Sun reporter

Laitmice Rake contributed to this report.

Return to

the referring page.

Photos; Guests check into the MGM Grand Gary Haugh. a baggage handler at the MGM Grand

Las Vegas SUN main page

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DATE co~~

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11/27/2002

re’, tewjourntat.coiti —— l3itstmiess;

rortat stores to close

Page 1 of2

reviewjournaicom

PRINT :71

tin

Portal stores to close

Wilsons downsizing may mean end to longtime local brand

Its ( uRiS lUstS

‘

Corporate dow must/mug at otie of the tiatton’s leading leather goods retailers could signal the end of a long—standitig Las

\‘cgas store bratid.

Still, the former presidetit amid chief executive officer of El Portal Luggage said Tuesday lie’s less concerned about the

Otte of his hiinil\ ‘s lotigtime busittess than lie is worried about the well—being of its nearly 100 employees at se’, en local

stores who ito’,’, fitce utnetilplo\ metit.

“The (El Portal) name ob\ ioutsl~nicatis a lot to its. but what it conies dowit to is the name is only as good as the products

and people who worked withuti that frantic.” said Dontnv Borsack. who left the compan\ in March. “The onl\ reason \oui

rccogtu/e the itatne is because

out were well taken care of b the people. and right now we ha~e a lot of extremeh\ good

people w Ito I’m tr\

itig

to help timid work.”

Borsack’s grandparcttts founded El Portal in I 936 and operated the company from Las Vegas for ntearl\ 65 ~ears. In

October 2000. tuettubers of the Borsack famnil\ sold the El Portal brand and its 35 stores to Wihsomis The Leather Experts.

a large leather goods retailer based

iii

Brookl\

Park. Mum.

\Vilsonus paid S 15.3 million and assumed .513.5 million m debt to acquire El Portal, the conipatuies reported in

November 2000.

Following the merger. El Portal m’ctuattted a substdiar~of Wtlsomis and the companies hoped to de\ elop the line into a

top tiattoital bm’amtd. Ho’,’, e’, cr. a slowtmtg U.S. ecotionny and tra\ el reductions following last ~ear’s terrorist attacks hurt

luggage sales nattonw mdc and conutributed to Wilsotts third—quarter loss of $17 niilliomi.

As a result. \Vilsotus CEO Joel WaIler said last week the cotupami\ plans to eliminate 135 tra\ cI goods stores in 25 stales

and Pumct’to Rico. Such a mo’, c would ltkel\ close its eight local stores b\ the end of Fcbruar\, WaIler said Tuesda\

Iii Soutthcrit Nc~ada. El Portal has stores inside the Forum Shops at Caesars, Galleria at Suinset mall. Fashion Outlet of

Las Vegas

itt

Primutn. Fashion Show mall, Mandala Bay, McCarran Intternationial .Airport and Motile Carlo.

“\Vc had looked to build a uattottal chatti with 300 to 400 (tra’, el) stores. butt it

just unfortunate timing.”

said

\Valler. whose compatt\ will also shut dow

its Bentle\ ‘s Lutggagc amid California Luggage Outlet stores, including a site

itiside Beli Factor’, Outlet World. “The tra~el inuduistry is a lot differenit thati it

‘,‘,~

two

ears ago

...

amid (this expansiout)

‘,‘,

outld ha~e takcti

ti’,

o to three (additional)

cars amid a lot more

iii’,

cstnnent than we had atuticipated.”

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56 11/27/2002

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Wilsomis’ redumctions ‘,vill eliminate 1,255 ,jobs nationwide. although the do’,ymisized company would slill include nearly

63/) \Vilsomi Leather stores. \Valler said. Despite the enmd resuilts, Borsack said he was not uipset with how Wilsoums has

hamudled his ftmuilv’s longtime bumsinuess.

“Joel WaIler from Wilsoits has been a gem.” Borsack said. “Any buustness that faces the travel slump like the amrlines and

we have faced is goimig to have it

more

difficult than traditiontal t’elailers that are miot so dependemit on travel.”

Borsack said Tutesdav lie’s still unidccidcd on whether he will try to repurchase the El Portal name or open nmew luggage

stores umnder a different banner. WaIler added Wulsons us in miegotiatlomis with utnnanned parties to sell sonic store sites

and woumld later consider selling leftover trademarks.

El Portal started

itt

1936 when founders Ed and Ednia Borsack changed the inventory of their small store on Fremont

Street from appliantces to luggage. As the city’s toutrismu induustry fueled luggage sales in Las Vegas. the family opened a

seconud store in

Connnncrcial Center

in the early 1 970s. El Portal later grew into a 35—store operation with locations

across the Westernu Ututed States. inclumdinmg 12 sites in Soimthernm Nevada. before it was sold to Wilsomis, Borsack said.

Wilsoits shares fell 7 cents. or 0.95 percent. Tumesday to close at .57.06.

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11/27/2002

K~sks will

hui

.I3usine.~i

Vegas November22, 2002

se~e

passengers

of all

airlines

Samuel Ing-

ails

has his

way, there will be

a whole lot of

CUSSing going on

at McCarran Inter-

national Airport

next year, and it

won’t have any-

thing to do with

people getting

searched before

RICK

VELOI’TA

they get on air-

planes.

Ingails, airport information systems man-

ager at McCarran, is overseeing

CUSS,

new kiosk system designed to help keep long

lines from forming at the airport’s check-in

counters.

Aviation is one of those industries that

seemingly can’t stand to have something

that isn’t named with an acronym, so for

those who need to know, CUSS stands for

Common Use Self Service. Here’s what it

will do for the McCarran traveler when it ar-

rives:

Computer terminals placed at various lo-

cations around the airport will be able to

provide ticketed passengers with a boarding

pass when they insert a credit card or a fre-

quent-flier membership card into a slot with

a magnetic strip reader. A touch-screen

image of a keyboard on the computer moni-

tor will enable passengers to

type

in their

electronic ticket verification numbers to

identify themselves.

The kiosk will then verify the information

and print out the boarding pass for the pas-

senger. Those with baggage can arrange to

have bag tags printed behind the ticket

counter and those passengers will have to

stand in line to have their bags checked

—

but the wait should be reduced, since per-

sons using CUSS will already have a board-

ing pass.

Long ticketcounter lines have been a ma-

jor problem in Las Vegas for Dallas-based

Southwest Airlines because the company of-

fers more flights to and from McCarran than

any other carrier

—

166 a day by McCar-

ran’s count. That’s about twice as many as

No. 2 America West.

During peak departure periods

—

late

Sunday

and

early Monday flights especially

—

lines have been overwhelming to the air-

line’s

staff

despite their creative efforts to

minimize

congestion.

Southwest experimented with its

own

ticket kiosk system for several months. ~ki

the company’s recent Media Day, the ai:line

announced it plans to roll out hundreds

more across the nation by February.

But Las

Vegas was left off the list. Southwest

officials

said there were problems getting the system

online at McCarran.

Ingalls helped unravel some of the details.

Southwest Airlines is notorious for going

its

own

way on issues of technology. That’s

one reason why you don’t see Southwest

flights on Orbitz and other travel websites.

Southwest has a different philosophy about

flying than other airlines

—

no meals, no

seat assignments and a corporate culture

that keeps customers entertained.

Southwest experimented with its kiosks in

Dallas, San Antonio, Oklahoma City and

Tulsa.

I tried one for a flight from Love

Field to El Paso earlier this month

and

was

it slick! I had a single

carry-on

bag, so I only

had to insert

my frequent-ifier card into a

reader and type

in my confirmation number.

In seconds, the machine printed and spit out

my boarding pass,

including the dreaded

checket board

pattern on Southwest passes

DAILY NEWSPAPER

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America West Airlines customer service

representative

Patricia

Dyke

helps Ching Pun of New

York uses one of the six “Qik” Check-In terminals at McCarran International Airport in June.

ETHANMILLER

STAFF

FILE PHOTO

that indicate you’ve been identified

a pas-

senger that will get a Transportatii

3erv-

ices Authority search at the gate.

So why wouldn’t Southwest want some of

these machines in Las Vegas? The answer is

they do and they will.

The CUSS system is unique in that it will

serve

all airlines at McCarran, including

Southwest. The front page of the touch

screen will display the logos of all airlines.

Point to the airline of your choice, Ingalls

said, and the computer will take the passen-

ger into that company’s proprietary boarding

pass and bag

tag system.

Ingalls said the computer terminals and

their cabinet styles were selected by repre-

sentatives of the airlines with aesthetic help

from

airport officials.

Southwest isn’t a big fan of

conformity,

but

McCarran

nffb*nis

nave some experience

with cornmon-uuse computer devices. Six

years ago. the

airport introduced CUTE

—

tJs~

Terminal Equipment

—

and

ii.

s oeen

a big money-saver for the airport

and the airlines.

CUTE allows McCarran to change gate

and counter space at a moment’s notice. Lo-

gos and flight information are programmed

into a computer and can be flashed on moni-

tors at counters instantly.

When National Airlines ceased operations

earlier this month, the airport had the ability

to convert the space to other airlines in-

stantly thanks to the CUTE system.

Developinga common-use boarding-pass

system was an initiative endorsed by the In-

ternational Air Transport Association and 28

of its member airlines and 25 airports. When

McCarran turns on the CUSS switch in the

second quarter of 2003, it will be the first

airport in

America

to have a system that can

be used by any passenger on any airline.

Four airlines already have their own pro-

prietary systems at McCarran with a total of

19 units. Continental and Northwest airlines

simply call them E-ticket centers, while

Alaska Airlines calls it “Instant Travel” and

America West operates

Qik

Check-In. Ingalls

said when CUSS comes on line, those propri-

etary systems will go away.

Ingalls said it didn’t make sense for South-

west to put in its proprietary systems in Las

Vegas in February, only to have to take them

out a fewmonths later.

Ingalls said it hasn’t been determined

where the CUSS units

will

be located in the

terminal, but they’re likely to be in highly

trafficked areas.

Eventually, Ingalls said, the units will be

able to do even more. Some

will

be able to

accept credit-card payments on tickets, read

passports for overseas travelers and have

some form of biometric device that would be

able to scan irises or read fmgerprints. Ing-

ails

said some day, a CUSS unit may be lo-

cated off the airport

—

at a resort or con-

vention center so that a visitor

can

make a

quick exit.

In other news from Southwest’s annual

Media Day, the company has unveiled a new

Internet website.

The new site focuses on three of the com-

pany’s employees, emphasizing that it is “an

airline of people, not planes.”

The new site has three prominent buttons

at the top of the home page directing users

to book travel, ifight status

and

subscrip-

tions to Southwest’s e-mailings.

Richard N.

Velotta

covers

tourism

for in

Business Las

Vegas

and

its

sisterpublica-

tion,

the Las Vegas Sun. He can be reached

at (702) 259-4061 or bp e-mail a”

~~?ra,

ta@lasvegassun~con.

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‘7

‘I I

I’

DEVELOPMENT:

Distribution

center set for land near Strip

Developers pay $17.5 million for site

uu~

itt

tumut,u s\mu mit

si’ \7I\\ .1

k\ \

A $65 mmutllmomm warehoumse show room amid distribumiion center is platinued for 57 acres miear the freeway interchange of

Interstate 15 amid the beltii a~

the developer said Tuesda~

Jmuu Stumari. principal of Centtra Properties. said the locatiomi is perfect for wholesale retailers and vendors who service the

Strip’s resort a mid cot

emit iou mmmdumst m.ies.

“Yout cami’t have a dmstrmhumtmoui center this close to the Strip ci er again.” lie said. “There’s the Strip. there’s the property

at Las Vegas Boumlci ard amid Sutmiset Road). You don’t hai c to sa~antythiimg else.”

l’hc opemuimug of Frantk Sintatra Drive. which ruins along i—t~in back of the Strip from Russell to Flamiiingo roads. will

cluamuge the d\ niamnics of the wa\ ienmdors sen e the Strip. Stuart said.

\Vmth three lamies in each direction. Frauik Simiatra Drive is expected to provide an alternative route to the Strip jumst as

I mmduust nial Road did.

Centra.

iii

a joimit

eutture with Sacranticnmto. Calif—based Pattattotti Development. recentl~closed escrow on the parcel.

w hmclu was pumrcliased from The Howard Hughes Corp. for 517.5 million, or abouut $307.000 an acre.

lit comuparisomu. the adjacemut 25—acre Vacatiomi Village propert\ was sold for about $18 nnilliomi a year ago.

Stuuart said llumghes has held the laud for 30 or 4() ~ears amid has been looking to sell it since being acquired by The

Rouse Co. six \ears ago.

Rouse was primtuaril~imitcrcstcd

itt

acqumiring the Fashion Show nnall anmd the mnaster—planncd Sumnunnerlin commumnity.

di\ estimug itself of other Hughes holdings suich as the Hutghes Chcventue Cetuter in North Las Vegas anud Humghes

McCarratu Center south of’ the airport.

“I mu all mtt\ cars of beumug mum real estate here. ci cmi omìe has alw a~s talked aboutt this location.” Stuart said.

l’lue first phase of the I muilliomu—squmare—foot project is scheduled to break groumnd in the sprimug. with completiomu of

320.000 square feet expected in the fourth qumarter.

the site prescmuts a “~ eta umuuiqutc opportumnuiti from a uuser standpoimit.” said Dati Doherty.

~:i

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Page 2 012

Colliers Intiernationual who will hanudle lease and sale transactions for the property.

“We have the ability to sell the huuildimmgs.” lie said. “There’s an ownership point that you canm’t get with the airport land

leases,”

Developers such as EJM. Majestic Realty amid Thomas & Mack have entered into 50-year land leases with the Clark

Couitutv Aviation Departnuenui. which has a cooperative nuantagemeuit agreement with the BLM for 5.500 acres in the

southwest valley.

Doherty said the souuthuwest indumsirial subnnarkct has historically had the highest tetiant demand, lowest vacancy rates

amid highest price per squmare foot. Lease rates for Centra’s new warehoutse will be about 45 cents a foot. compared with

ant average of 35 cenits elsewhere itt the valley.

Like the Craig Distnibuutioui Center being developed by Cenira and Pautattoni in North Las Vegas. this one will have 32—

foot ceihimigs and cross-docking that allows goods to be received on one side of the warehouse and shipped out of the

oilier side.

“For people who work mu services for the Strip, ilus is a big deal for them.” Stumari said. “The operative word today is

hitgh—mttuagc show room. lfvouu’re a carpet nnanuifactutrcr and dmstnibuutor. voum can have voumr connpanv exposed to the

uuonthu—souuth traffic otu 1—15 as well as the east—west traffic out the 215.’’

JMA Architecture Studios of Las Vegas is the project’s architect. Panaitoni Constnuction is the general cotitractor amid

Wright Emuginucers is the civil cnugimieeninmg finn.

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f~.pq~u~1Ds611/27/2002

Tuui”isin

still trails

2000 levels

BUSINESS LAS VEGAS

Visitor volume

in Las Vegas surged by 8.6

percent in September compared with the

same

month last

year,

but tourism is

still

off

from 2000 levels.

The increase was driven primarily by air-

line traffic that resumed following the terror-

ist attacks that profoundly hurt business in

the weeks following Sept. 11, 2001.

Volume was still down by 6.7 percent

from September 2000, a

sign

that the econ-

omy has not yet recovered from the

terror-

ism and economic decline that has affected

the city’s tourism industry, according to data

released last week by the Las Vegas

Conven-

tion and Visitors Authority.

“While the 8.6 percent increase is a signif-

icant improvement over a depressed Septem-

ber ‘01, we shouldn’t overstate its impor-

tance,” said Terry Jicinsky, the agency’s

marketing research manager. “The added

two-year comparison makes it more rele-

vant.”

September marked the first month the

tourism authority has issued comparisons to

2000. It will continue to release 2000 com-

parisons for the last three months of the

year.

Some

2.75

million

people visited

Las

Vegas during September, up from 2.53 mil-

lion visitors in September 2001 but down

from 2.95 visitors in September 2000.

A 33 percent jump in airline passenger

traffic

during the period, to 2.83

million,

drove much of that increase as people re-

turned to the

skies following Sept. 11, Ji-

cinsky said.

Convention attendance is up 30.9 percent

for the period, while the projected economic

impact jumped nearly 22 percent, from $221

million to $269 million.

Room occupancy rose 6.4 points, to 80.1

percent. Weekend occupancy rose to 88.9

percent in September and midweek occu-

pancy increased to 76.3 percent. The aver-

age

daily

room rate rose 1.1 percent, to $76.

Average daily auto traffic on major high-

ways was nearly flat, increasing a

half a

per-

centage point for the period. Traffic on In-

terstate 15 at the California-Nevada border

dropped by 1 percent.

In Laughlin, visitor volume fell by 2.7 per-

cent, to 325,735, from September 2001. Con-

vention attendance increased by more than

7,000,

hut total

~uccupancytell

hi~1.7 points,

to 79

Oe.UCI7IIt.

Del t.a

(u:’

7~ating

by..”

‘~‘(2OS~

carrier

BLOOMBERG NEWS

ATLANTA

—

Delta Air Lines Inc. will

create a low-fare service next year to help

the third-largest U.S. airline win back cus-

tomers from faster-growing carriers such

as Southwest Airlines Co. and JetBlue

Airways Corp.

Customers will be offered fares of $79

to $299 on the new Delta flights to Flor-

ida from the northeastern U.S., said

Peggy Estes,

a spokeswoman. The prices

are similar to those charged by South-

west, JetBlue and smaller rival

AirTran

Holdings Inc.

Atlanta-based Delta, seeking savings to

stem $909 million

losses in the first

three quarters, expects the new service to

spend

about 20 percent

less to run its

planes. Delta will borrow some of South-

west’s ideas, such as one class of service,

that helped the rival remain profitable as

demand for travel dropped.

“Delta is

trying

to capitalize on the

only successful operational model out

there right now

—

low-cost airlines,” said

James Corridore, a Standard & Poor’s

analyst who rates Delta “avoid” and

doesn’t own the shares, “But you just

can’t become a low-cost airline because

you wish you could be one. They are

going to be a high-cost airline that has a

low-cost operation.”

Shares of Delta fell 68 cents, or 6.1 per-

cent, to $10.49 at 4 p.m. in New York

Stock Exchange composite trading on

Wednesday’s

news.

The stock has

dropped 64 percent this year.

Low-fare airlines will make up about 27

percent of available seats by 2007, Delta

said.

ll1ISUI(:~~IS

Las Vegas

November

22, 2002

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‘1 ‘1’

I’

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11111

In Brief

TEMPE,

ii.

.Atnermca \Vest e\pamtds

code—share agreement

Amuienica \Vest Airhimues. a Tcnnpe. An,., carrier operating a hub at McCarran lnternatiotial Airport. and British Airwa~s

toda\ on Tumcsda~atunoumnced the nenuew al of their existing code—share arrangement and the addition of Phoenmx—

Sacraumietut. Calif.. semi ice to the agneenneni.

hich has been in place for six

ears.

The two ainhinmes tuow code—share out the followimug routes: Los Angeles amid San Frautcisco to Las Vegas: Phoenix to

Tuucsomu. L.as Vegas. Salt Lake Cit~.Albuquerque and Reno: as well as sci en cities in California: Burbank, Oakland.

Ommtanmo. Orange Couuuut\ . Satu Jose. Long Beach and tuow. Sacramento.

(‘ode—shaniuug allows a carrier to sell the flights offered by amiother carrier as its ow

by attaching its two—letter booking

code to the oilier carrier’s flights.

FORT WORTH,

Texas

.Amuuenmcamt reduces

flight schedule

Auuuenicamm Airhimues said Momudas that ii woumld ciii its North Aunenican capacity b~3.3 percent b\ next March compared

to the saute utionihu thus

ear.

American. the world’s largest carrier, said the cuutback was deepen thaui originally planmuied and a cuut of 18.6 percemit froni

March 2001, before last \ear’s terrorist attacks amid before airlines felt the fumll brunt of the weak econmonl\.

For all of 2003. the ainhimie expects capacit~to fall 5 percent from 2002.

“\Ve comutimmume nefinuimug ouun douuuestmc schedumhe to mucet auittcupatcd deunammd.” said Henri Jo\ tier, Annenucan’s sentor vice

presmdemut of phanumming.

Deutuamud for tras el has beemu soft since eanl\ last \ear as bumsinuesses nedutced corporate traiel and boumght duscouuited seats

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~eLZ_

11/27/2002

to save unouiey.

Joyner said the capacity cuts, measured in available seats times miles

flown,

would be spread throuughout American’s

dounestic system to avoid affectiuig one market more than others.

The airline doesmu’t plan to reduce international flights during the first quarter, Joyner said.

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IJSATODAY.couuu

—

Trai el - News — Unmited’s struggles nia\ reshape airhinme indumstrv

Page 1 of6

€~PRlNTTHlS

United’s struggles may reshape airline industry

Dan Reed, USA TODAY

United Airlines (UAL), struggling to slash

costs and right itself financially, is poised

to send big changes reverberating through

the distressed airline industry.

fhe \vouid’s second-largest airline has been

developing a restructuring plan to help

secure a $1 S billion government-

guaranteed loan. Without the guarantee,

Chapter I I bankruptcy reor°anization

More stories

seems inevitable.

Vote

could plot path of

United’s future

Either way, the airline must cut costs. And

•Moneyfront page

either way, its cost-cutting is going to

atiect its rivals.

Companies facing bankruptcy or restructuring rarely have the kind of

potential United has to affect their industries, or consumers for that

matter.

Kmart’s walk through (‘hapter 11 involves one of the largest debtor-in-

possession financing packages in history but is having little impact on

rivals such as Wal-Mar’t and Target, says Alan Gover, a corporate

restructuring attorney in the Houston office of Dewey Ballantine. Enron,

for all its scandal-fed fascination, has become just a simple liquidation.”

Brut United’s financial makeover “could help reshape nearly an entire

industry,” Govei says.

That’s because United’s competitors won’t be able to ignore any cost

advantages United gains through restructuring. Airlines can’t charge

higher prices than their competitors, because price is king to travelers.

Any savings that United can squeeze out of its lenders, vendors and labor

groups are certain to he copied.

‘‘ .‘ ‘ .‘, ‘

.‘

‘

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1664 11/27/2002

ByG~ryC~

United Airlines is struggling to cut

costs and avoid bankruptcy.

USATODAY.cotui

—

Travel

—

News — Untited’s struggles nnay reshape ainlune industry

Page 2 of 6

~atner man worrying mat a oan~ruptunitea wttt orag mnem Gown

tOO, itS

rivals are hoping the airline will go through a restructuring so radical that

it will help them wrest concessions from their own workers, suppliers and

financial backers. Some have been lobbying the government to turn down

the loan guarantee, likely forcing the bankruptcy.

Don ( ably chairman ot rival Ameiican Airlines (AMR)

whose cost problem is only marginally less serious than

United’s, predicts that United will “set the table” for

other carriers to cut their costs dramatically.

Executives at other conventional airlines

those that

existed before deregulation and which operate large,

costly domestic and foreign route networks

havent

been quite so blunt.

But

they agree. Delta (DAL)

spokesman John Kennedy concedes the obvious: If United comes up with

big cost savings, Delta will “find ways to reduce its costs to compete

effectively.”

Even lean, unconventional Southwest (LUV), the industry’s low—cost

icon, conuld be affected if United gets the huge concessions that most

analysts and rivals say it really needs.

“Big labor concessions at United would turn down the cost pressure

considerably all around the industry, including here, where we’ve not

been immune to the trend of rising labor costs,” says Southwest CEO Jim

Parker.

More cuts to come

If United and other conventional carriers succeed in narrowing their cost

gap with Southwest, collectively estimated to be about $1 8 billion a year,

the Dallas-based discounter will be forced to find ways to lower its costs

even frirther. “Maintaining our significant cost advantage is one of the

keys to Southwest Airlines remaining on top,” Parker says.

Most of the change in the industry is likely

to come on the cost side. There’s general

agreement that the conventional carriers’

complex pricing system is out of whack,

hut there’s no obvious way to fix it. And

ther&s a growing consensus that the boom

days of the late l990s won’t be back

anytime soon, if ever.

But Tom Plaskett, who ran Pan Am and

Continental (CAL) in the l9SOs when

they were in or just emerging from

bankruptcy reorganization, cautions

against assuming that employees will

Labor

kads airline

expenses

~r~iisfry

qaera1i~~xenses,

secor~qu~’ter

2002:

Eepencez Operstinci eopei’iise

L ehor

Fuel

Fleet

10.2

11.

Mairit.

rl’l

ate ri a I

P cci

e.ci

5cr

food I,

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PAGE ILLOF

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USA TODAY file

Carty

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11/27/2002

IJSA1”ODAY.coun

—

“I’navel — News — United’s sirutggtes nuua\ reshape aurhitie induistri

Page 3 of 6

pros ide all the cuts.

“It’s not just labor costs that will be

lower,” he says. “Other stakeholders

lenders, aircraft lessors, vendors, Boeing,

Airbus

all will have to take haircuts.”

Since the Sept. I I terrorist attacks,

conventional airlines have implemented or

announced cost cuts worth at least $5

billion and perhaps as much as $12 billion.

‘They’ve cut flights, planes, workers.

advei’ti sing and sales commissions.

They’ve taken more food oti planes, put

more automation into airports and placed

i’nore emphasis on low-cost Internet ticket

sales. They’ve tightened checked bag

limits and ticketing change fees. Weak

routes have been dropped, and service has

been reduced even on popular ones.

As painful as those cuts have been

more than 50,000 people have lost their

jobs

they’re just the low—hanging fruit.

Executives at the big carriers know they

need to make deeper cuts, and they admit

they’ve not figured out how to do it.

American says it will have to trim $4

billion in the next five years but has

identified just $2 billion so far. Delta has

cut $ I billion and plans to trim an

additional $2.5 billion in the next three

years, hut it has not deteri’nined how.

\\ here to slice

Some of those cuts will come fi’om Thither

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26.7

~uthwest beats industry in

e~qenses

Operating eopencec per

cvi

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quarter 2002 (centc’

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and a morti :atiori, utilitiec end

office cuppliec, other

bource: Air Traniport

Accociaticiri, Merrill Lynch,

A”,i,ction Daily

raphic. adrienne Lewi.i,

LISA

TODAY

capacity reductions and shifting service fi’om high-cost mainline carriers

to lower—cost affiliate airlines. Other savings are likely to come from

eliminating more amenities and services, both in-flight and on the ground.

.\nd there are three areas of potential savings in which analysts and

industry executives expect United to be the uncomfortable trailblazer.

Reducing heel

ownership

costs.

Sources close to the talks say

United is pressing to renegotiate about $7 billion worth of aircraft

leases to drum up as much as $ ISO million in cash now, and stretch

out and lower monthly payments. The lessors might have little

choice. If it enters Chapter II, United would be able to simply

return airolanes without nenaltv if it doesn’t cet more advantaue~ILy NEWSPAPER CLIPPINGS

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Travel

News

United’s struggles may reshape airline industiy

Page

4016

terms

from its lessors.

Rival airlines are

rooting for

United

to be radically aggressive in

restructuring its

loans,

leases

and capital

structure. Their reasoning: The

more concessions United

gets,

the

better

their odds of

winning similar

deals from their lenders and

lessors, many

ofwhom

are

the same.

Lowering the cost of

services

and supplies bought from third

parties. Since the terrorist

attacks,

most airlines have renegotiated

supplier contracts or shifted business to

lower-cost

providers. But

bankruptcy, or even the

threat

ofit,

gives a company the

opportunity

to go back for more,

Gover

says. And,

again, any

victories

by United in

that arena

will open the door for

rivals

seek

similar

savings.

• Ratcheting down labor costs through wage reductions,

productivity increases or both. Labor is every airlines biggest

expense. It also has been the second-fastest growing cost for 20

years,

up, on average,

nearly

110 forthe

largest carriers. Only

the costs

associated

with acquiring a

fleet

ofplanes have

grown

more in the same time, up I

57.

Airline labor costs always have

been,

and likely always

will

be, high

compared with other industries. Pilots

and

mechanics are nearly

impossible to replace. Pilots and flight

attendants

work

fewer

hours

than

most other workers.

But analysts say that in the past

few years,

the industry, ledby United,

has allowed the cost pendulum to swing too far in labor’s favor. When

United pilots’ work slowdown inthe summer of

2000 succeeded

landingthem the

biggest

one-time raise in industry

history

—

immediately

—

Delta pilots pushed for and got

new

wage rates

that

slightly topped United’s. Continental’s pilots, who

still

trail the pack

thanks to their employer’s bankruptcies in the ‘80s and ‘90s, also

made

big

gains in their latest contract.

American’s

pilots, now in

contract

talks,

want to close their gap vs. United pilots. Even Southwest’s pilots got

theirbiggest compensation boost ever this fall.

The pattern extends to other unions. Northwest’s

mechanics, American’s

flight attendants, ground workers and

mechanics,

and Southwest’s flight

attendants and ground workers all have scored big wins in

contracts

signed

since United’s pilot

contract two years ago.

“In many ways, United

caused

the industry’s problem with costs,” says

consultant ion Ash ofGlobal Aviation Associates in Washington. “Now,

it looks like it’s going to be up to United to

start

solving it.”

While that process has begun, competitors say United

hasn’t

yet sought

big enough cuts from its workers.

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USATODAY.coni

Travel - News - United’s struggles may reshape airline industry

F~age:~01(1

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More than 3S,000 mechanics, agents and airport ground workers

represented by the International Association of Machinists vote today on

their $1 .5 billion share of those cuts.

United hopes those savings, along with more than $7 billion in other cost

cuts and projected $1 .4 billion in annual “revenue enhancements,” all

over S I 2 to 6 years, will secure approval of its application with the Air

Fransportation Stabilization Board for the federal loan guarantee.

Even if those concessions take

effect, United’s pilots’ wage

rates will remain 2 higher than

American’s, notes (‘arty, whose

contract talks with his own

pilots have gone nowhere for 1 6

months,

UBS Warhurg analyst Sam

Buttrick says most United cuts

are reductions of future

spending increases. “The reality

is not what you save, but what

you spend,” he says. “And with

its proposed labor savings,

United will still be spending

more in the future.”

United

CFO Jake Brace,

who

has played a central role in

assembling the package ofcost

cuts designed to win the federal

plan aren’t working with all the numbers.

“We’re the fblks who have all the detailed information on our financial

situation,” he says. “People who are not inside the company do not. We

appreciate all the free advice we’re getting. But fundamentally, we know

our Onancial situation, and we have put forth a plan that meets the

criteria’ of the loan board.

Even if United snares the loan guarantee. implements all the proposed

cost cuts, and avoids bankruptcy, critics such as Carty say it will need

even bigger concessions from labor, lenders and suppliers to truly resolve

its cost problems.

“I don’t see that as a threat,” Carty says. “I see that as an opportunity for

the industry to get at some of these cost issues.”

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trU~ri~ 1664 11/27/2002

I~I

_____

United trails Southwest in expenses

2002 unit cost estimates (cents per available

seat mile*)

UAL

SWA

difference

Percent

4,68

2.87

1.31

1.16

0.28

0.08

236

0.39

0.57

1.25

0.77

Operating

expense

Labor

Fuel

Commissions

Maintenance

material

Rents, Landing

Fees **

Depreciation

Other+

Total

-32

0.67

2.74

11.33

0.51

1.44

7.44

* —

Cost per available seat mile, not adjusted for

varying stage lengths, or average length of flights.

Based on Merrill Lynch projected revenues.

** —

Includes aircraft rents

— Purchased

services, booking fees, crew

hotels, legal

services, etc.

—

Excludes non-

recurring

expenses

or special charges

loan guarantee, says critics of United’s

Las Vegas SUN: US Airways La\s Off 2.500 Emplo\ees

Page 1 0!

Return

to the

referring page.

Las Vegas SUN

November 26. 2002

US Airways Lays Off 2,500 Employees

B~MATTHEW BARAKAT

ARLINGTON. Va.— US Airwa\ s cut 2,500 jobs Tuesda~and said it is seeking additional concessions from labor to

attain the cost cuts ii needs to emerge from bankruptcy next ~ear.

The airline has alreath laid off nearh 15.000 workers out of more than 46.000 since tile Sept. 11 attacks devastated the

airline indusirv. and employees who were once the besi paid in ihe industr\ have collectiveh’ agreed to $840 million in

wage and benefit cuts to help the airline return to profitabilit~

The latest cuts would mean US Airwa\s has cut 38

percent ol’ its work force since the attacks.

The additional cost cuts being sought b~management would affect work rules and benefits, not wages. tile airline said.

US Alrwa\ s had promised employees it would not seek further concessions through the bankruplc\ court when the\

agreed to those initial concessions. and the airline is honoring that promise. said US Airways spokesman David

(‘asteR eter

But tile labor agreements pro~ide no protection from furloughs.

Under the labor agreen1enl~.US Airwa~s promises to operate a minimum of 245 mainline jets. On Tuesday. the

compan\ said it plans to continue operating 279 jets if employees agree to the new concessions now being sought.

lnitiall\

US Airwa\

had thought annual cost cuts of S 1.2 billion would be sufficient make the airline profitable. The

airline has aclne~ed cuts of $1.3 billion from labor, endors and other sources. But ii says it now needs sa~ings of $1.4

billion to 51.6 billion a year to successfull\ emerge from bankruplc\ b\ is target date of the first quarter of 2003.

In 200 I. the airline lost $2. 1 billion on re\ ernie of $8.3 billion.

The furloughs affect all eiuplo~cc groups. from management to pilots. to ticket agents. CasteR eter said.

In particular. the airline will close a maintenance hangar in Tampa. effective immediatel\

and a reservations call center

ni Orlando. Eiiiplo\ ees with seinorit\ in those facilities will be offered jobs in Penns\ Ivania and North (‘arolina. the

airline said.

(‘astelveler also said tile furloughs will no! affect the airline’s abilit\ to operate over the buss Thanksgiving weekend. He

said flights are about 90 percent hill for Wednesda\ and Sunda\ . the two busiest days of the \ear for the airline industr\

On normal da\ s flights are het~~ccii 70 to 80 percent full.

“\Ve’re slighll\ higher thaii what we expected.” (‘asteR eter said.

I.. mon leaders met with airline officials Tuesda~afternoon to hear tile latest appeal for concessions.

The Association of Flight Attendants. AFL-CIO. said it would not consider the latest crisis to be serious until US

.Airw a~

execut

es “share the pain.”

“.Aniericaim workers caii’t coiltinue to olun1aril~suffer in order to prop up failing execlmti\es,” said Perry Hayes.

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OtOfl~

11/27/2002

,, f m

Las Vegas SUN: US Airwa\s Lays Off 2.50() Fmuplo\ees

i~age

president of the union’s e\ecuti\ e council. “Omily time will tell if managenlent is ready to make the same sacrifices it is

askimig from its workers to sa~e the airline.”

Return to the referring page.

Las Vegas SUN main page

Questions or problems?

Click here.

ill

coiiiciil.v

(‘QJ)t/’IcIit

2002 La~I ~‘cax Si

‘.\, md.

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PAGE

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— ~

11/27/2002

—

\V~,J.conm- I he Mmdtdle seat

Page 1 ofi

THE MIDDLE SEAT

SCOTT

MCCARTNEY

November

27,

2002

Airlines Stop the Gouging;

What Took Them So Long?

Yolm’\ e got to wonder. what took them so bug’?

‘ravelers. lra\ el managers. anah sts and a host of critics ha\ e been

snggestnig that airlines needed to cut the price of unrestricted tickets for

niom’e thami a

ear. Business tra\ el began dropping precupitoush in Februar\

2001

——

2 1 months ago. and long before Sept. Il. 2001

For a long time.

companies ha\ e been telling airlines the\ tust weren’t going to pa\

out rageommsl\ high hires an~

more.

Airlines saw the problem -- and the\ saw bilhons of dollars of losses. Several

airline executm\ es acknowledged that the spread between business fares and

leisure fares, sometimes more than

52.000.

was too high. The full—sen ice

carriers were gi~ing customers a huge incentive to charter jets. to switch to

discount carriers and to ganie the s~stem to fly on discoumited tickets and Ii\ e

with restrictions, or break nOes. A couple of airline CEOs e~en used the

word “gouging” to describe their own beha\ ior.

“Business travelers are pa~

imig four times as munch as the rest of the people on

the aircraft. and the~are fed up with it.” said Dan P. Garton, executi\ e ~ice

president for marketing at

AMR

Corp.’s American Airlines. during a recent

conibremice with anaLsts

In mnamiy businesses, if sales drop. mn~entor~’swells and customers flee to

competitors, von cut the price. Airlines do that with leisure travelers, and

restricted tickets got ver\ cheap soon after the Sept. II terrorist attacks.

But for a long time. airlines have clung to a belief that business travelers

didn’t care about the price of their tickets because the cost wasn’t comuuimig out

of their pockets. \Vhen road w arriors had to go. the~‘d pa\ the price —— no

matter how high. So emitting time price for business tra~elers wouldn’t bolster

demnamid. the airlines beliei ed. amid no carrier could afford to Ieai e any mone\

omi the table at a time of mnassmve locces.

That’s changed. amid airlimies are fInalI~respondnig. Just as companies once

dmdmm’t w orr~about the price of IBM’s ser~ices because computers were

crncial. corporate tra\ elers am’e shoppimig for better prices. So se~eral carriers

ha\ e moved to slash business fares h\ as nuumch as 40°

in a series of “tests.”

Amuericami, Delta Air Lines and Continental Airlines all have tests

nmiderway, amid ri~als ha\ e matched prices.

Northwest Airlines and America

West Holdings

Corp. alread\ ha\ e inno\ ati\ e pricing available to business

lra\ elers. The mnimber of markets where such deals are a~amIable is growing:

RECENT COLUMNS

November 19

• An Industry Veteran Gives His

Take on Airlines’ Woes

November 13

• Gold-Flier Status Isn’t What It

Used to Be as Perks Decline

November 5

• Which Costs Airlines More: Fuel,

Labor or (Ugh) Meals?

ABOUT SCOTT MCCARTNEY

Scott McCartney writes The Middle

Seat every Wednesday for the online

Journal. Scott, The Wall Street

Journal’s Travel Editor, as well as

deputy bureau chief in Dallas, has

been on the airline beat for seven

years

long enough to see

from bust to boom and back to bust

Scott won the George Polk Award for

transportation reporting in 2000 for

exposing gross negligence by the

Federal Aviation Administration. He

also was honored in 2000 by the

Deadline Club and New York’s

chapter of the Society of

Professional Journalists Before

joining the Journal in 1993, he spent

11 years at The Associated Press

Scott, a native of Boston and

graduate of Duke University, is the

author of three books, including

“ENIAC. The Triumphs and

Tragedies of the World’s First

Computer,” which was published in

1999. He’s also an instrument-rated

private pilot.

Send your comments

about The

Middle Seat to

scott.mccartney@wsj.com3.

COMPANIES

Dow Jones

Reuters

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So far, retaliation to these miew fare stnmctures has been mnuited. It looks like

the lower hires are slmckmmig.

“The whole industry is frustrated. They are getting killed, and the\ are going

into the low seasoiu.” says fare—watcher Bob Harrell of Harrell Associates in

New York. “I guess they’re coining to time conclusion that the\’ better (cv

sonietlnng. Because dommmg nothing is not workimig.”

Some of these tests are working. airline executives say. Continental says

some of its test markets saw higher revenume after prices were cuit. some were

revenume—mueulral and some resulted in lower revenue. Mixed results on the

dollar side. But on the passenger side. all time mnarkets gained market share.

Delta’s tests markets have showed more definitive results. J.P. Morgan’s Mr.

Baker says that after cumltimmg prices in small markets about 21. Delta has

seemi double—digit increases in total revenue nm those markets. In Atlanta. a

Delta spokesmuamu says the carrier doesn’t dispute Mr. Baker’s report.

Analysts figure American, in

particular. is eager to push its

miew pricing structure ouit

nationwide. Even if it

produices less revenue in time

short run. American believes

it’s the right thing to do for long—term financial health, especially

ii can win back cumstomuuers from discount airlines, make business travelers a bit happier and possibly even simnumlate

new business travel.

“Why has ,Anuerican stuck with ‘More Room in Coach’?’ Because they believe it’s the right thing to do.” says

analyst Sam Bufirick of UBS Warbumrg.

Win’ carriers are finally loosening their attachment to a pricing scheme that evemi some of them declared broken

muioiuths ago is still a bit of a mystery. Some were gun—shy to try something bold because of what happened in 1992.

whuen .Aiuierican unveiled an aggressive new plan called “Value Pricing” then suffered huge losses when angry

comuupetitors umndercumt prices and forced Amnerican to retreat. Others may have held ouul hope that business travel

really was goimug to just snap back this fall. The economy has gained a little steam, after all, and the stock market is

coining back fronu the dead. But busimiess travel remains terribly depressed.

Research shows that it takes tinie for grim reality to set in. People laid off fronm work, for example. sometimes keep

spendimug at their pre—la\’off levels for one to Iwo mouths after losnig a job. For airline executives. there may have

been some denial. More likely, there was no clear—cut answer of how to fix the revenue problem.

Analysts note that now is a good time to experiment since time year is sunk for airlines, and late—November and

Deceiuiber aren’t the strongest business travel seasons. Few carriers are in any fimiancial shape to start a nasi\’.

expemisive fare war, so there’s little chamuce of retaliation against the bug boys right now.

Most likely, the tests we’re seeiuug muow’ simpl~’signify that realit\’ is finahl~’sinking in. and the induistr~has growmm

more willing to tn amuythuing.

“TIme market is cluamigimig amid we’re trying to slav on top of it,” says an execumtive at a carrier previously reluctant to

cut business f’arel. “\Ve’re constamitlv looking at ‘wilhmigmiess to pay.’

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Delta ,juist expanded its test so that it now’ covers ahouit 2.000 small markets.

according to J.P. Morgami analyst Jamie Baker. or about 2.5 of the

imidumstry’s revenuie base.

AMR Corp. (AMR)

PRICE

8.02

CHANGE

-0.08

U.S. dollars

1:13 p.m.

Delta Air Lines Inc. (DAL)

PRICE

13.36

CHANGE

0.46

U.S. dollars

1:13 p.m.

Continental Airlines Inc. CI B (CAL)

PRICE

9.36

CHANGE

0.21

U.S. dollars

1:12 p.m.

Northwest Airlines Corp. (NWAC)

PRICE

845

CHANGE

0.19

U.S. dollars

117 p.m.

America West Holdings Corp.

(AWA)

PRICE

2.25

CHANGE

0.06

U.S dollars

1:10 p.m.

* At Market Close

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lmttp://omulimme.w’sj.comn/articleprimmt/O..SB 10377426105875491 08.00,html

r SA IUDAY.comn

Observant secuirmt~workers remnlbrce screening gadgets

Page 1 of2

€~PRINTTHIS

Observant security workers reinforce screening gadgets

Passemugers relumrmumiug to the skies this holiday w eek

iii

what’s expected to be the greatest number simice last year’s

terror attacks can’t help but notice a mnumltitumde of’ welcome secumrit\ imliprovenients.

They’ll he checked by a new force of 44,000 government screeners, better trained and more

thorough than their predecessors.. In some cases, passengers will be randomly searched, travelers’

shoes will go through X-ras, and bags will be swabbed with wands to detect residue from

explosives. And dozens of airports will run checked bags through CAT-scan machines.

Yet even these upgrades, when fully operational, will address only the most obvious safety threats:

a weapon or bomb smuggled aboard an aircraft. Though thats a leap forward from pre-9/l I

security, the odds against finding a terrorist among the more than 600 million travelers boarding

airplanes each year are astronomical. Improving those chances requires testing new methods to

identif~ysuspicious passengers.

Boston’s Logan Airport is doing just that, in the belief that simple human alertness can be as

effective

or more so

than high-tech gadgetry. Airport officials, using a technique called

behavior-pattern recognition, have deployed Massachusetts state troopers to look for certain telling

traits that reveal hostile intent or nervousness, based on scientific research of involuntary facial

expressions and body responses. Chapped, dry lips. A flushed face. A carotid artery pounding in the

neck. Some travelers showing these signs and others that officials won’t disclose will be stopped

and questioned further.

Of course, the stress of flying nowadays provides passengers with plenty of reasons to be nervous

or hostile. Even so, law enforcement officials say terrorists and other criminals give off distinct

clues through their body language.

The technique has a track record of success.

For

decades, it has been used by Israel’s famously

secure Ben Gurion Airport. In the USA, it led to a terrorists arrest in 1

999,

when a Customs

inspector checking cars coming off a ferry in Port Angeles, Wash., noticed an agitated driver who

failed to make eye contact. The driver was found carrying the makings ofa bomb and was later

convicted of terrorism in a plot to disrupt millennium celebrations in Los Angeles.

The technique has clear advantages. It:

Maximizes current resources. The 140 state troopers who already patrol Boston’s airport can be

mobilized for added security with no extra cost beyond training.

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Pt ~ F

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I 1/27/2002

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U SATODAY.coni — Observant security workers reinlörce screemiing gadgets

Page 2 01

Avoids discriminatory profiling. The focus on behavior provides a way to look for security risks

without resorting to discriminatory racial and ethnic profiling.

Some critics say the technique amounts to unacceptable profiling by another name because it gives

police license to stop innocent travelers based on subjective evaluations of behavior. That’s a valid

concern~yet Logan has no plans to address it by collecting data on who is stopped and why. Only

carefi~lmonitoring can provide the data to judge the programs effectiveness and fend oft critics’

complaints.

Used properly, behavior pattern recognition could provide another layer of security. New high-tech

equipment is important. But it’s no substitute for encouraging cops on the beat to focus their

observational skills on spotting terrorists.

Find

this article at:

http:

IIw’,arw

usatoday. com/news/opinion/editorials/2002-1 1 -26-our-view x. htm

Check the box to include the list of links referenced in the article

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Page 1 of2

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Profiling is poor technique

B\ Barn Steimmhardt

‘‘lucre is muolhimmg more damigerous than the ilhumsiomi of secumrit\ created b\ suirveiliance that makes uis muo safer, \et

ihureateims oumr freedomuis.

Boston Logan Airport’s behavioral-profiling system is shrouded in mystery. I am prepared to be

convinced that it will, in fact, make us safer. But fi’om what we know, it has all the telltale signs of

the illusion of security.

l’he Logan system is based on the unproven notion that you can glean a person’s intention to do

ham mu based on his facial expressions or body language. The proven science behind these theories is,

to say the least, thin. This is not plainly suspicious behavior such as a passenger boarding the plane

with a wire sticking out of his sneaker.

While it may not keep any terrorists off our aircraft, it likely will result in new forms of racial and

ethnic profiling.

The Boston plan has its origins in Israel, where all passengers are subjected to questioning. There

are real questions about whether the Israeli system is as sophisticated as its proponents suggest or

whether, in the end, it doesnt simply separate the Arab from the Jew. But Boston is not Tel Aviv,

and the I ‘SA is not Israel. There are only 6.5 million Israelis, but 300 million Americans. The

number of U.S. air passengers dwarfs that of Israel. The racial, religious and ethnic populations of

the U. S. are exponentially more diverse than Israel’s.

Simply put, it is not possible to conduct Israeli-style questioning of all fliers. Selective questioning

and profiling would become the norm. Police and security officials acting on their “hunches would

inevitably bring their own assumptions and prejudices to the table. Those prejudices not only would

be unfair, they all-too-frequently also would be wrong, leading to a waste ofvaluable police

resources

just as racial profiling on America’s streets has wasted resources.

Israel has air marshals on every flight. The cockpit doors all have been fully fortified. The

combination recently prevented a deranged man fi’om taking over a flight. The real lesson to be

learned from Israel is that basic measures of physical security still provide the best protection.

Barry Steinhardt is the director ofthe Technology and Liberty Program at the American Civil

Liberties Union. Israeli-style system will not work in more diverse U.S.

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Las Vegas St N:

ftc-C

iearanccs

Ma) spcca Up

AirpOrts

Page

1012

Return to the referring

page.

Las

Vegas

SUN

Not ember

26. 2002

Pre-Clearances May Speed Up Airports

SUZANNE

GAMBOA

• •

t.I

WASHINGTON- Allowing

passengers who ha~e cleared advance background checks

quick1~move through airport

checkpoints would reduce waiting times for

other

tim elers. but

could alsojeopardire security. congressional

investigators said

Tuesda,

The idea

is for

travelers who ha~

epassed background checks

and can proside identi1~inginformation

able

tosldp

some

more

intense

security measures.

such

as random searches

before boarding a plane.

Such

a s~stemwould

allow

security

resources

to be better targeted

passengers who might be genuine securit~risks.

the

General Accounting Office said in

report released Tuesday.

But some officials

inteniewed b~s

the GAO. Congress’

insestigatite arm, said they

~sereconcerned the system could

make

airports more vulnerable. The

GAO inteniewed officials

from the

federal govermnent.

the

airline industi~.

a’~

ialion

securit~groups. ~endors

and

privacy and civil

liberties

organiiaiions.

The

Transportation

Security

Administration

requires

all passengers and

workers to

undergo a minimum level

securit~.

That rule would still

exist

for passengers inthe

“trusted trawler” program.

the GAO

said.

“~Ve

think it’s

a concept

worth pursuing.

but currently there isno funding.” said

TSA

spokesman Robert Johnson. When

money does become

mailable.

the

agency

will ti~

to develop a

program “that would achieve

the

objectivewithout

sacrificing

security.”

he said.

Congress has

debated

the

trusted

tim

eler

idea

hearings. The pres ious TM

director. John

Magaw. opposed

it.

but the

TSA

told

the

GAO

now supports such

s~stem.

TSA is testing

ID cards for transportation

workers. and current

TSA

chiefJames Loy has

said he plans

test them

with

passengers

at airports

Los

Angeles and

Philadelphia.

Johnson

said

the

special

IDs for

transportation

workers

and

trusted travelers would share

the same

technology.

Sen.

Ka~

Baile~Hutchison. R-Te’as.

who

will

probabl~be

the

Senate

aviation

subcommittee chainnan next ‘ear. touted

the

(lAO

finding.s.

“A.s

look

make

our

airports

the

safest

the

world. we must also look

for

ways

make

them

more efficient

and

user-friend1~.”

Hutchison

said.

“A

trusted

traveler program

could

move

people

through

the

airport

much faster without

compromising

the strong security

s~stcm

we’ve worked so

hard

to implement.”

She said

the program

would be one

ofher priorities

when

the 108th Congress begins in Januai~.

Paul

Hudson. executi~edirector

the

Aviation

Con.sumer

Action Project. said such a

s3stem would he too easy

for

identit~thie~

estoe”ploit.

“l€’ien

the person ~ouare registering is trusted at one time that doesn’t mean that there won’t

boa

change.” he added.

A n.j

., ‘L

.1~...t ..‘JPPING~

htlpi/www

.laswgassun.coni/sunbin/stories/text/2002/nov/26/II 2604246.html

PAGEDATE

COPIED:

11/27/2002

Las Vegas ~U~: Fre-Ulearances May ~pee~ Up Airports

Page

The GAO said questions remain about who will pay for a trusted traveler program and what technology to use.

Air traveler groups told the GAO that travelers would be willing to pay almost all the cost. An airline industry official

said travelers would be willing to pay up to $100 for enrollment and $25 to $50 annually for renewal.

The GAO recommended the ID cards have techno1og~that can be used at different airports and possibly at other ports of

~ni

rv.

Program designers also must decide what sort of background check to give travelers: the same as that for obtaining a

passport or the FBI-type check similar to what an airline or federal government employee undergoes.

On the Net:

General Accounting Office: http://www.gao.gov/

Return

the

referring page.

Las Vegas SUN main page

Quc~tions

01 JH

oI)krn~

~CIit~khitc

I/I (O/iI(~/71ScupVii gh! 2002 Las I ~‘gas

mc:.

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PAGE

littp //‘~~ ~ I ms’s ~ ~ssun coin/sunbin/stoi iec/tL\t/2002/no\

/26/112604246

html

11/27/2002

bUS

vegas

bUN.

rita issues ‘in warning on mci rmnps

Page 1 of2

Return to the referring

page.

Las

Vegas

SUN

ember

26. 2t)t)2

FAA Issues 3rd Warning on Fuel Pumps

LESLIE MIlLER

~ ‘R

I4~.’

WASHINGTON- The

Federal

Aviation Administration isrequiring

about 3.500 Boeing

jets

to fly with extra

fuel

prevent

fuel pumps from oterheating and

possibl)

causingan

explosion.

The

FAA

has

sent

airlines

three

safet) warnings

about

the

problem since

August. The

latest

was

issued last weekend

after

pumps

in three planes o~

crhcatcd.

the FAA Mid Tuesda).

The wanting is

intended

as a precaution while the FAA

figures

out what’s causingthe

problem

with the pumps. madeb)

H~dro-AireInc. of

Burbank.

Calif.

James McKenna. managing editor ofA~iation

Maintenance

magaiine.

said

the

FAA

doesn’t ordinaril) nood to make a

third attemptto ascertain what’swrong.

“That

tends tounsettlethe FAA.”

McKenna

said.

No serious problems lane been linked tothe problem.

However,

ifa

pump overheats,

the

right mixture

temperature.

ox)gen and fuel can cause an

explosion.

McKenna said.

FAA spokesman Paul Takcnioto said theextra

fuel

eliminates the possibilit) ofan explosion.

“There’s no

danger

of(the pumps) igniting

fuel

umpors if

the)’rc

cot ered.” he said.

The wanting will

remain

iii effect until the

agencydetennines

what causes the

fuel

pumps to

overheat.

Takemoto said.

The order

affects about 1.400

planes

737s. 747s and 757s

flown

b) U.S. carriers. The

FAA

is also sending the

ad’tisories

to its

counterpart

agencies

overseas. cmering another

2.100

jets.

The National Transportation

Safet)

Board ruled

that

an explosion in the

fuel

tank of

TWA Flight

800. a Boeing 747.

caused

it to crash off

the coast

ofLong Island in 19. killing 230 people.

Vapors

in the

partl)

empt) tank

prebabl)

were ignited b) a spark in the wiring. the

NTSB

said.

In August. the FAA

ordered

airlines tosubmergecertain

H~dro-Mre

pumps with

fuel

or. if not. to

X-ra) them

to make

surethe) were

properl)

wired. Ifthe) weren’t.

they

had tohe replaced.

Major U.S.

carriers

said the) had

few planes

in which the

suspect

pumps

were

installed.

In September. the FAA found the problem potentiall) included esei~Hydro-Aire

pump

and

ordered

all fuel pumps

submergedor X-ra)ed and replaced if faulty.

Then.

last week. Boeing Co.

rcceiiedreports

o~crheating

fuel

pumps that had been replaced on a Singapore

Airlines 747 and on a Lufthansa 747.

The merheating of

those

pumps wasn’t

caused

b) fault) wiring. said Boeing

spokeswoman

Cind) Wall.

is4GS

OFfi7

—

a ~‘

nicrC

i/_27._?QP2~

htsp:/ wnw.las~

egas.sun.com/sunbin/stories/Iext/2002/nov/26/l I2604336.html

DATE CO’

uiae• s

________

ie~aa

ours. inn is~ucs.nu wariwig

on nez rumps

Page 2 of2

pump

on a third plane

had been removed andwas tbund

to have overheated

during

inspection.

“It’s baffling.” Wall said. “They’ve been working

nonstop

24 hours a day trying tofix it.”

Hydro-Aire President Greg

Ward said

the companyhas madethe pumps

for 30 years

without a problem.

ft’s

conducting

extensive

investigation that includes

chemical analysis

pwnp parts that overheated, checking airline service

records

andinterviewing retired employees who worked

the

pumps. he

said.

“We’re still piecing together clues.” Ward said.

the Net:

The

FAA

order: lutpJLww~vJ~~ggy

Click on

“Airworthiness Directives.”

Return to the ~fetdntp.n

Las Vegas SlJ1~nMfln page

Questions

or probkms? Click here~

—

All

conientv copw!ght 2002 Lax

Vegas

SUN.

Inc.

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12604336.html

DATE COPIED

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aooa