Raul Zambrana's World

RECOVERY OF AIR FRANCE CRASH SITE BODIES CALLED OFF.  WILL CONTINUE WITH BLACK BOX SEARCH

Brazilian and French searchers have recovered large chunks of debris and 51 bodies from Air France Flight 447, which disappeared with 228 people on board late May 31.  Brazil's air force and navy on Friday ended their search for more bodies or debris.  Brazil called off the search for more bodies and debris from the Air France jet that crashed into the Atlantic Ocean but an American officer said the search for the black boxes would likely continue for at least another 16 days.

“The reason for this is the impossibility of finding survivors or bodies, which has always been the main focus of our search efforts,” Brazilian Air Force Col. Henry Munhoz said at news conference.  But Munhoz said the search for the black boxes would continue “coordinated by France.”  Experts say the black boxes may be key to deciding what brought the airliner down. And signals from the voice and data recorders begin to fade after about 30 days.

“We'll have a better idea July 1 on how much longer we'll go,” said U.S. Air Force Col. Willie Berges, the Brazil-based commander of the American military forces supporting the search.  Berges said searchers were likely to keep going 12 to 15 days past the 30-day mark of the crash.

A French nuclear submarine and two French-contracted ships towing U.S. Navy listening devices are trolling a search area with a radius of 50 miles (80 kilometers) off Brazil's northeastern coast where it is believed the plane crashed.  The black boxes send out an electronic tapping sound that can be heard up to 1.25 miles (2 kilometers) away.  With the recorders still missing, accident investigators have focused on automated messages sent by the plane minutes before it lost contact.

One indicates the plane was receiving incorrect speed information from external instruments, which could destabilize the plane's control systems. Experts have suggested those external instruments might have iced over.  Air France has now replaced the monitors, called Pitot tubes, on all its Airbus A330 and A340 aircraft.

On Thursday, U.S. safety officials said they were investigating two incidents in which airspeed and altitude indications in the cockpits of A330 planes may have malfunctioned. The aircraft are the same type as the Air France plane that crashed.  In both cases the planes landed safely, and no one was injured, the National Transportation Safety Board said in a statement.

QANTAS CANCELS 787 ORDERS

Qantas Group said Friday it will cancel 15 Boeing 787 Dreamliner aircraft it ordered and defer the delivery of another 15 by four years, a move that reflects the airline industry's struggles amid weak global demand.  The Australian carrier, which announced its original 787 order in December 2005, says the canceled aircraft are worth $3 billion based on current list prices.

Qantas' cancellation and delivery deferral come less than a week after Boeing announced another delay in 787's first test flight due to a need to reinforce parts of the aircraft. The Chicago-based jet maker, facing labor problems and mechanical and design flaws, has repeatedly delayed the development of the mid-sized, wide-body aircraft since its rollout ceremony in 2007.  Despite the cut, Qantas will remain Boeing's largest customer for the 787 with 50 firm orders. Joyce added Boeing's latest delay in the aircraft's first test flight was "disappointing" but didn't affect Qantas decision.

SOUTHWEST STARTS FLYING TO LGA SUNDAY

IDiscount king Southwest Airlines (LUV) on Sunday will land in New York, the USA's largest air market — 38 years after it began flying solely within Texas charging fares as low as $9.  The Dallas-based carrier is launching service at LaGuardia Airport, the kind of heavily congested airport it eschewed for three decades in its dedication to keeping costs low.

It will fly five times a day to Chicago's Midway Airport and three times daily to Thurgood Marshall Baltimore/Washington International Airport. Connecting to those airports, Southwest's second- and fourth-biggest points of operation, will give nearly all of its 102 million yearly passengers one-stop access to New York City.  Southwest, which has about 3,300 flights a day now, is still the industry's leading fare price discounter and is the largest U.S. airline in passengers carried.

INTERNATIONAL PASSENGER TRAFFIC FELL 9.3%

International passenger traffic fell sharply in May, down 9.3%, from a year ago as airlines fought off swine flu fears and continued to battle worldwide recession, according to the International Air Transport Association Thursday in its monthly report.  International passenger load factors -- or the percent of seats occupied -- fell to 71.2% from 74.5% in May 2008. Meanwhile, airlines worldwide cut their capacity by 5% in May, which "did not keep pace with the fall in demand" during the month, it says.

Still, IATA saw a silver lining in the data, pointing out that the 9.3% year-to-year drop in May and 3.1% drop in April are better than the 11.1% decline in March. “We may have hit bottom, but we are a long way from recovery,” said Giovanni Bisignani, CEO of Geneva-based IATA. “Capacity is not aligned with demand."  The continued drop in load factors would have serious consequences on airlines' ability to generate profit, it says. After a 20% fall in international passenger revenue in the first quarter, IATA estimates that it may have fallen 30% in May. "This crisis is the worst we have ever seen,” Bisignani says.

May was the first full month to feel the impact of swine flu on travel. Mexican carriers saw their traffic fall almost 40% in May. Latin American carriers' traffic fell by 9.2% in May compared to the previous year. Their load factor plummeted to 64.7%, the worst among all regions.

Demand for North American carriers fell 10.9%, considerably worse than the 4.2% fall in April. "This was the result of weak demand to Latin American destinations" affected by swine flu and other recession-related cuts in travel to both trans-Atlantic and trans-Pacific markets, IATA says.  Asia Pacific carriers recorded a 14.3% fall in demand, even as they removed the highest percentage of seats (-9.3%) among all regions.  Large European carriers lost some of their business to low cost carriers and reported a 9.4% decline in demand. Middle Eastern carriers bucked the declining trend with 9.5% growth and a 14.5% expansion of capacity. Demand for freight worldwide also fell 17.4%.

US AIRLINES SLIDE TO A 3-MONTH LOW DEMAND

REPUBLIC AIRWAYS TO BUT MIDWEST AIRLINES

Just one day after announcing its decision to purchase bankrupt Frontier Airlines, Republic Airways holdings announced plans to buy Midwest Airlines late Tuesday. The deal will cost Republic $31 million: $6 million in cash and a $25 million, five-year note, convertible to Republic stock at $10 a share. This is not the first dealings Republic has had with Midwest. Back in September, it loaned the airline $15 million to keep it out of bankruptcy and entered into a codeshare partnership with it.

Compared to its purchase 17 months ago by private-equity firm TPG Capital, this sale has shrunk considerably. When TPG teamed up with Northwest Airlines to acquire Midwest by outbidding a hostile takeover attempt by AirTran, the firm paid $452 million. Analysts tell the Wall Street Journal this huge discount is largely due to the recession and its impact on passenger demand and fuel costs.  To add to the merger and acquistion confusion, Delta, which merged with Northwest last year, did not receive a mention in the announcement Midwest put out. This is likely due to the details of the deal Northwest and TPG penned a year and a half ago which gives more power to TPG. However, Midwest says TPG will retain a strategic stake in Republic.

The airline expects the regulatory approvals to go through in four to six weeks. Republic plans to transition Midwest's nine Boeing 717 to Embraer 190s. The Milwaukee Journal-Sentinal writes that Midwest will keep its name and add more nonstop routes under the new ownership. Republic plans to bring back some of the routes that Midwest cut in 2008.  Frequent fliers: Stay tuned for the fate of the signature warm chocolate chip cookies the airline famously serves up.

CLEAR LINES GO BANKRUPT

More than 250,000 frequent fliers who pay $200 a year to speed through airport security lines lost that privilege Monday when a company that runs the expedited lines went out of business.  Verified Identity Pass, which operates its Clear program in 18 airports, said Monday that it would shut operations at every airport by 2 a.m. ET today. The program started at Orlando International Airport in 2005 and grew to major hubs such as Atlanta, Denver, San Francisco and Washington Dulles.

A statement on Verified's website said the company "had been unable to negotiate an agreement with its senior creditor to continue operations." There was no information about whether enrollees would get refunds.  Read full story here.

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