Amtrak train
(Seth Perlman/AP)
April 24, 2013

End of the Line for Amtrak’s Indiana Train?

Amtrak’s Hoosier State line has long been a popular way for college students at places like Purdue University in Lafayette, Indiana to travel to Chicago for concerts, sporting events and to shop, especially on weekends.

“The Friday train can be pretty packed,” Marc Magliari, Amtrak’s Chicago-based spokesman, told WBEZ on Tuesday.

But that service between Chicago and Indianapolis could be disrupted if Indiana lawmakers don’t act soon to provide funding. The Hoosier State line runs four days a week between the two cities, carrying on average about 120 passengers per trip on trains that can accommodate up to 270 people, depending on demand. In 2012, some 37,000 riders boarded the Hoosier State line, according to Amtrak.

By October, the Hoosier State line could make its last run if $3 million in funding doesn’t come through from Indiana lawmakers. That’s because in 2008, Congress decided to eliminate funding for Amtrak routes that are less than 750-miles. Chicago to Indianapolis is less than 200.

Tim Maloney hopes that does not happen.

“We’re very interested in seeing more (Indiana) investment and involvement with transportation alternatives to motor vehicles on highways because of the environmental and energy-savings benefits that those alternatives provide,” said Maloney, senior policy director the Indianapolis-based Hoosier Environmental Council.

Maloney’s been keeping a watchful eye during this last week for legislative action in the Indiana House and Senate. Hoosier lawmakers are busying putting the final touches on a new two-year budget. Maloney said the Senate’s version of the budget includes funding to keep the Hoosier State line going.

Maloney believes there is a demand for alternatives to driving between Chicago and Indy, even though Amtrak can take up to five hours compared to approximately three hours in a car from downtown Chicago.

“We believe there will be a growing demand for those alternative based on high gas prices and demographic changes. So, we think it’s a good idea for the state to diversify its transportation investment, including passenger rail and urban public transit,” Maloney said.

Indiana isn’t the only state who has to decide whether to keep an Amtrak train route to Chicago up and running. A route from Chicago to St. Louis and Detroit to Chicago are also at risk of losing funding.

If the Hoosier State route is eliminated, passengers can still utilize the Cardinal line that runs three days a week from Chicago to Indy. Because the Cardinal line connects to the East Coast, funding continues. Maloney says Amtrak has seen an 80 percent growth in the last five years and thinks it could get more.

“It’s close to 40,000 passengers a year and that’s based on having just one train a day going each day,” Maloney said.

Maloney said work is being done to improve travel times, primarily because Amtrak often has to stop for freight trains in its path during its four-stop trip which includes one stop outside Chicago in Dyer, Indiana.

“But there’s no question travel times need to improve. That’s a key for attracting more riders,” Maloney said.

But besides travel convenience, Maloney says there’s also an issue of jobs. Amtrak operates a maintenance center in Beech Grove, a suburb of Indianapolis that provides about 550 jobs.

“Amtrak spends over $21 million dollars a year buying goods and services from Indiana companies,” Maloney said. “There are 99 companies in Indiana that benefit and can benefit from passenger rail service, that’s second only to Ohio.”

Meanwhile, the Indiana Department of Transportation has hired an engineering consultant to evaluate what types of schedule changes might make Amtrak service in Indiana self-supporting. If Hoosier lawmakers don’t make a decision this week on whether to fund the route, it could write the money into the budget and decide at a later time whether to use it on the route.

But Maloney questions some media reports suggesting Indiana can wait until October to decide.

"If the legislature doesn't allocate the funding this week, it may not have the money to fund it later. This is a very important time," Maloney said.

On Wednesday morning, the Hoosier State pulled into the depot in Dyer, Indiana with no one boarding or getting off. When asked if she thinks Indiana will continue funding for the route, a female Amtrak conductor speaking from a window said, "I think they will."


April 22, 2013

Canada Foils 'Al-Qaeda Inspired' Terror Attack on Train

Canada's authorities say they have arrested and charged two people with conspiring to carry out an "al-Qaeda inspired" attack on a passenger train.

At a news conference, the authorities said the suspects Chiheb Esseghaier, 30, and Raed Jaser, 35, were arrested in Montreal and Toronto on Monday.

 

 

They allegedly planned to derail a VIA passenger train in the greater Toronto area. It was not clear when.

The suspects will now appear in court on Tuesday for a bail hearing.

'Strong resolve'

The Royal Canadian Mounted Police (RCMP) said the surveillance operation leading to the arrests of the two suspects was "a result of extensive collaborative efforts".

They said the two men were not Canadian citizens and were supported by "al-Qaeda elements in Iran" but there was no evidence of state sponsorship.

Their plan was to derail a train and "kill and hurt people".

Chief Spt Jennifer Strachan said the two men had sought to target "a specific route, but not necessarily a specific train".

VIA operates passenger rail services across Canada.

At the same time, the RCMP said they believed the plot was in the planning stage and "there was no imminent threat to the general public".

"Each and every terrorist arrest the RCMP makes sends a message and illustrates our strong resolve to root out terrorist threats and keep Canadians and our allies safe," Assistant Commissioner James Malizia said.

The RCMP also said that FBI agents from the US were involved in the operation to foil the attack.

There was no connection between the plot and last week's Boston Marathon bombings, a US justice department official was quoted as saying by the Associated Press news agency.


American Airlines passenger
(Joe Raedle/Getty Images)
April 22, 2013

Airports Report Few Delays As Furloughs Hit FAA Workers

Airline passengers and industry analysts are seeing only moderate flight delays as of early afternoon Monday, the first full day of furloughs for nearly 15,000 flight controllers and other Federal Aviation Administration workers.

The furloughs are tied to the "sequestration" budget cuts that were enacted this year. We'll be keeping an eye on possible delays today, and updating this post with new information.

Update at 3:21 p.m. ET. Few Delays Seen:

Impact from the furloughs has been neither extreme nor widespread, with busy airports in Chicago, Atlanta, and Los Angeles reporting no or few delays. New York's three big airports experienced delays, but the longest holdups were blamed on high winds and maintenance work, in addition to staffing issues.

Baltimore-Washington International Airports in Charlotte and Orlando also reported moderate to heavy delays during the mid-day hours, but they've been sporadic. Our original post continues:

As of 11:45 a.m. Monday, the FAA's U.S. flight-tracking map showed delays of more than an hour at New York's LaGuardia, due to high volume and winds. The FlightAware site reported delays of more than an hour for some inbound flights at John F. Kennedy International Airport, due to runway work. Most other large airports were deemed free of trouble, with some experiencing slight delays.

"The cuts required by the sequester have forced us to slash contract expenses and furlough 47,000 of our employees," FAA Administrator Michael Huerta told a Senate committee Thursday. He predicted that the agency's handling of air traffic operations would be less efficient, and that there would be less time for safety inspections of new aircraft.

Any delays that stem from the FAA furloughs are expected to be the most extreme at the nation's busiest airports, especially those that routinely handle international flights. The FAA recommends getting to the airport two hours before a domestic flight, and three hours before an international trip.

If significant delays develop, airlines say they plan to reroute flights and use shuttle buses to get passengers to their destinations or connecting flights.

The FAA's furlough plan has drawn criticism from members of Congress, who accuse the agency of mismanaging the budget cuts and hyping their impact.

"Given that the FAA's budget increased more than 100 percent over the last 15 years, finding five percent in savings shouldn't need to significantly impact our nation's aviation operations," said Rep. Bill Shuster, chairman of the House Committee on Transportation and Infrastructure.

Airlines, unhappy that the furloughs might cause them to experience cascading delays — and to endure frustrated customers' ire — have created a website to help the public complain to the FAA.

The FAA furloughs, which require employees to stay home from work without pay for one or two days per pay period, are expected to continue until the financial year ends on Sept. 31. The agency says that on any given day, as much as 10 percent of its employees will be off work.

The Global Business Travel Association, which bills itself as the voice of the business travel industry, sent a letter to the FAA's Huerta Monday, saying that its nearly 6,000 members "are very much alarmed by the list of airports and the expected delays. With Hartsfield-Jackson expected to see maximum delays of 210 minutes and Chicago O'Hare close behind, the impacted airports is a veritable hit list on the business travel industry."


air traffic control tower
(Tony Gutierrez/AP)
April 05, 2013

FAA Delays Closing Airport Control Towers

The Federal Aviation Administration said on Friday that it is delaying the closure of 149 airport control towers comes as a relief to airports in Decatur and Bloomington.

The cuts impact five airports in Illinois, and are tied to the automatic spending cuts known as the federal sequester.

The FAA said it needs more time to deal with legal challenges to the closures.

"This has been a complex process and we need to get this right," U.S. Transportation Secretary Ray LaHood said in a statement. "Safety is our top priority. We will use this additional time to make sure communities and pilots understand the changes at their local airports."

Bloomington’s Central Illinois Regional Airport is one of several airports suing over the plan, saying the federal government did not follow its own rules and procedures before announcing the closures.

Airport Director Carl Olson said he is looking for other sources of revenue to keep the Bloomington airport’s tower open.

“Any diminishment of safety is going to have an immediate and cascading affect all around the country," Olson said. "This is not a Bloomington-Normal issue. This is not a Central Illinois issue. This pertain to the safety of the national airspace system across the entire United States.”

Decatur Airport Director Joe Attwood said the FAA’s delay is good news, saying that closing the towers, including the one in Decatur, would compromise flight safety.

“I’m pleased, but I’m a little bit disappointed at the same time," Attwood said. "I’d much rather that they said they would withdrawal the whole concept forever more, or at least indefinitely.”

Federal officials have insisted that the closures would not affect safety.

In a statement, Republican Congressman Rodney Davis of Taylorville says the administration should look at cuts in other areas of its budget to save money.

In addition to the Decatur and Boomington airports, other Illinois airports impacted by the cuts are St. Louis Regional Airport in East Alton, Southern Illinois Airport in Carbondale and Waukegan Regional Airport near Chicago.

The FAA began paying contractors to staff and operate towers at a handful of small airports after President Ronald Reagan fired striking air traffic controllers in 1981. Today, there are 251 towers operated by private contractors at airports across the country at an average annual cost of more than $500,000 each.

Airport towers are prized by local communities as economic boosters, particularly in rural areas. Airlines are sometimes reluctant to schedule flights to airports where there are no on-site air traffic controllers.

Originally, the FAA said it would begin close the towers by April 7, but that date has been pushed to June 15. Under the new schedule, the closures will be implemented at once, rather than a gradual phase-in as had been planned.


April 05, 2013

High Speed Rail Project on Track to Be Completed

The Illinois Department of Transportation says nearly all the track has been laid between Chicago to St. Louis for high-speed rail.

So far, 15 miles of high-speed rail is done, between Dwight and Pontiac, which means trains can travel above 100 miles per hour along that stretch.

Joe Shacter is IDOT’s director of public and intermodal transportation. Shacter said rail has been placed between Dwight and Alton, so almost the entire route is covered.

Almost – because another 40 miles are still needed between Dwight and Joliet, and the entire distance between Chicago and St. Louis will not be high-speed.

“All but two ends of the corridor, from Chicago-Joliet, and Alton-St. Louis, will be 100 mile-per-hour max speed," Shacter said.

Shacter said additional rail is still needed along the main track, so freight trains can clear the way for passenger trains.

“It is really neat to look out the window and be roaring by the cars on Interstate-55," he added.

Shacter also said gates with arms are now required at each crossing to prevent collisions, and existing gates will be modified to lower more quickly for the faster trains.

Shacter said Illinois will only pay $150 million from a state construction account. The rest of the estimated $1.6 billion needed will come from the federal government.

Shacter said high-speed travel should start up by fall 2015, and the project should be done by the end of 2017.


A TSA illustration of knives that will be allowed on planes.
(TSA)
March 05, 2013

TSA Will Lift Ban Of Small Knives, Wiffle Ball Bats Aboard Planes

Airline passengers will be able to carry small knives, souvenir baseball bats, golf clubs and other sports equipment onto planes beginning next month under a policy change announced Tuesday by the head of the Transportation Security Administration.

The new policy conforms U.S. security standards to international standards, and allows TSA to concentrate its energies on more serious safety threats, the agency said in a statement.

The announcement, made by TSA Administrator John Pistole at an airline industry gathering in New York, drew an immediate outcry from unions representing flight attendants and other airline workers, who said the items are still dangerous in the hands of the wrong passengers.

Transport Workers Union Local 556, which represents over 10,000 flight attendants at Southwest Airlines, called the new policy "dangerous" and "short sighted," saying it was designed to make "the lives of TSA staff easier, but not make flights safer."

"While we agree that a passenger wielding a small knife or swinging a golf club or hockey stick poses less of a threat to the pilot locked in the cockpit, these are real threats to passengers and flight attendants in the passenger cabin," the union said in a statement.

The policy change was based on a recommendation from an internal TSA working group, which decided the items represented no real danger, said David Castelveter, a spokesman for the agency.

The presence on flights of gun-carrying pilots traveling as passengers, federal air marshals and airline crew members trained in self-defense provide additional layers of security to protect against misuse of the items, he said. However, not all flights have federal air marshals or armed pilots onboard.

The new policy permits folding knives with blades that are 2.36 inches or less in length and are less than 1/2-inch wide. The policy is aimed at allowing passengers to carry pen knives, corkscrews with small blades and other knives.

Passengers also will be allowed to bring onboard as part of their carry-on luggage novelty-sized baseball bats less than 24 inches long, toy plastic bats, billiard cues, ski poles, hockey sticks, lacrosse sticks and two golf clubs, the agency said. The policy goes into effect on April 25.

Security standards adopted by the International Civil Aviation Organization, a U.N. agency, already call for passengers to be able to carry those items. Those standards are non-binding, but many countries follow them.

Box cutters, razor blades and knives that don't fold or that have molded grip handles will still be prohibited, the TSA said.

There has been a gradual easing of some of the security measures applied to airline passengers after the Sept. 11, 2001 terrorist attacks. In 2005, the TSA changed its policies to allow passengers to carry on airplanes small scissors, knitting needles, tweezers, nail clippers and up to four books of matches. The move came as the agency turned its focus toward keeping explosives off planes, because intelligence officials believed that was the greatest threat to commercial aviation.

And in September 2011, the TSA no longer required children 12 years old and under to remove their shoes at airport checkpoints. The agency recently issued new guidelines for travelers 75 years old and older so they can avoid removing shoes and light jackets when they go through airport security checkpoints.


US Airways jet takes off as an American Airlines jet is prepped for takeoff
(AP Photo/Matt York, File)
February 14, 2013

How The American-US Airways Merger Might Affect You

American Airlines and US Airways on Thursday announced they plan to merge to create the country's largest airline, with a route network stretching from coast to coast, and covering large swaths of Latin America, Europe, Canada, the Caribbean and Africa.

The merger would knit together American's parent company, Fort Worth, Texas-based AMR Corp., and Tempe, Ariz.-based US Airways Group Inc. to form a new company worth about $11 billion. The combined carrier — with more than 6,700 daily flights to 336 destinations in 56 countries — would leapfrog over its competitors in terms of passenger traffic, and would retain the name and logo of American.

Here are answers to common questions about the merger:

Why are airlines always pushing for mergers?

Airlines have a very, very hard time making profits. US Airways endured a couple of round trips to bankruptcy court, and American is still trying to pull out of a bankruptcy filed in 2011.

Airline analysts say that by creating a robust route structure with hundreds of destinations on four continents, the two carriers may be able to attract more frequent fliers and boost revenues. For example, the new American would be able to cut redundancies in service, and become a major player in Boston's Logan International Airport, New York's LaGuardia Airport and Reagan National Airport outside Washington, D.C.

Would the merger violate antitrust rules?

The proposed merger would need the approval of both the bankruptcy court and the U.S. Department of Justice. Successfully completing a smooth merger also would mean winning the cooperation of creditors, bondholders, unions, Congress and regulators.

In recent years, with airlines in such dire financial shape, mergers typically have faced some scrutiny but no real roadblocks. The Obama administration already has approved two mega-mergers: United and Continental in 2010, and Southwest and AirTran Airways in 2011. The Bush administration signed off on Delta's merger with Northwest in 2008. Given that history, this latest merger likely would be approved.

What would the new company be called?

The combined carrier would be known as American Airlines, and would use the new logo and color scheme already unveiled by American. The updated logo looks like a sleek eagle with one red and one blue wing. And American's planes are being painted with new red, white and blue stripes on their tails.

What's likely to happen to fares?

With oil prices generally heading higher, airlines are looking to nudge up fares this year. If American and US Airways were to trim the dozen flights where they overlap, passengers would see less competition, which could create even more upward pressure on fares.

But the number of carriers isn't the only factor in pricing. During the Great Recession, airline consolidation increased but fares ticked down. That's because travelers were staying home and oil prices were easing.

In any case, with this merger, the Justice Department probably would try to minimize harm to consumers by insisting American give up some airport slots to competitors. For example, the Justice Department is widely expected to insist the combined carrier surrender some of its slots to competitors at Reagan Washington National Airport. American and US Airways together would be too dominant at that airport if they were allowed to keep all of the operations they now have there.

Also, airline mergers are complicated because of labor contracts, and they tend to play out over many years, so changes come slowly. Any fare hike may well be a couple of years away.

What will this mean for frequent fliers?

This merger could have upsides. Whenever customer-loyalty programs get combined, there are lots of details to work out, so the exact outcome is far from clear. In a news release, the companies said: "All miles in both programs will continue to be honored. Upon merger approval, additional information will be provided to customers of both frequent flyer programs ..."

It seems likely American's AAdvantage program would survive, and the new company would honor mileage accrued through US Airways' Dividend Miles program.

So if you had lots of miles on each of the carriers, the combined total could get you rewards more quickly. And because of the huge route structure, you'd have more places to go on your free reward trips.

Would there be any improvement in service?

Whenever airlines merge, there can be lots of short-term problems as staffs and customers get used to the new order. For example, combining online booking systems can produce glitches. But eventually bugs can get worked out.

Surveys suggest service has been poor at American in recent years amid union troubles. With US Airways CEO Doug Parker emerging as the combined company's leader, American's service may eventually improve. Under Parker's leadership, US Airways has put together a notably better record than American in terms of on-time arrivals.

What would a merger mean for the hub cities?

American has hubs in Dallas/Fort Worth, Chicago, Los Angeles, New York's JFK airport and Miami. US Airways has hubs in Phoenix, Philadelphia and Charlotte. Of those locations, the one most likely to see service cuts in coming years would be Phoenix. With major operations in Dallas and Los Angeles, a Phoenix hub may lose importance.

At the very least, Arizona would take a hit in terms of employment and prestige because the combined company's headquarters would be set up in Fort Worth, not Tempe.

How would this affect international flights?

Both US Airways and American have flights to Europe, Latin America, Africa and throughout North America and the Caribbean. But they lack service to Asia, the world's fastest-growing travel market.

Would this merger end industry consolidation?

It would mark the end of the big deals. Since terrorist attacks shook up the airline industry in 2001, U.S. carriers have been going bankrupt, merging, cutting and doing whatever they can to survive. Assuming this latest merger goes through, the industry will have seen 10 big carriers boil themselves down to just four — American, United, Delta and Southwest — in a dozen years.

Still, there are smaller carriers out there that could be involved in yet more mergers, such as Alaska Airlines and Frontier Airlines. So this latest deal wouldn't necessarily end the industry's move toward fewer competitors with bigger route systems.


US Airways jet takes off as an American Airlines jet is prepped for takeoff
(AP Photo/Matt York, File)
February 14, 2013

American Airlines, US Airways To Merge

The merger of American Airlines and US Airways, to be formally announced Thursday, caps a turbulent half-decade of bankruptcies and consolidation for the U.S. airline industry and leaves travelers four big carriers to choose from.

The boards of American parent AMR Corp. and US Airways approved the deal late Wednesday, according to four people close to the situation.

The merged carrier will be the world's biggest and will keep the American Airlines name, but it will be run by US Airways CEO Doug Parker. American's CEO, Tom Horton, will serve as chairman of the new company until mid-2014, these people said. They requested anonymity because the merger negotiations were private.

The deal has been in the works since August, when creditors pushed for merger talks so they could decide which earned them a better return: a merger or Horton's plan for an independent airline. American has been restructuring under bankruptcy protection since late 2011. AMR creditors and possibly its shareholders will own 72 percent of the stock, and US Airways Group Inc. shareholders will get the rest, three of the people said.

A formal announcement is expected Thursday morning.

If the deal is approved by AMR's bankruptcy judge and antitrust regulators, the new American will have more than 900 planes, 3,200 daily flights and about 95,000 employees, not counting regional affiliates. It will be slightly bigger than United Airlines by passenger traffic.

Since 2008, Delta gobbled up Northwest, United absorbed Continental and Southwest bought AirTran Airways. If this latest merger goes through, American, United, Delta and Southwest will control about three-quarters of U.S. airline traffic.

The rapid consolidation has allowed the surviving airlines to offer bigger route networks that appeal to high-paying business travelers. And it has allowed them to limit the supply of seats, which helps prop up fares and airline profits.

Word of an American-US Airways merger raised new concern among passenger advocates. Charles Leocha of the Consumer Travel Alliance said that with just four big airlines instead of five, it will be easier to raise fares. "The benefits of this deal will go only to the corporations, not to consumers," he said.

But industry officials say there will still be plenty of competition. A recent study by PricewaterhouseCoopers found that adjusting for inflation, domestic U.S. airfares fell 1 percent between 2004 and 2011, a period that included several airline mergers.

Travelers on American and US Airways won't notice immediate changes. It likely will be months before the frequent-flier programs are combined and years before the two airlines are fully integrated.

When that happens, American's presence will grow in key East Coast markets including New York's LaGuardia Airport and Washington's Reagan National Airport. The merger will add US Airways hubs in Charlotte, Philadelphia and Phoenix to American's in Dallas-Fort Worth, Chicago, Miami, New York and Los Angeles.

US Airways will boost American's service to Europe and the Latin America-Caribbean market but wouldn't fix American's weakness on routes to Asia.

Just five years ago, American was the world's biggest airline. It boasted a history reaching back 80 years to the beginning of air travel. It had popularized the frequent-flier program and developed the modern system of pricing airline tickets to match demand.

But years of heavy losses drove AMR into bankruptcy protection. The company blamed bloated labor costs; its unions accused executives of mismanagement. AMR lost more than $12 billion between 2001 and 2010. It has lost another $2.8 billion since it filed for bankruptcy protection in November 2011 — a period in which US Airways earned about $650 million.

The merger is an impressive achievement for Parker and his management team at US Airways, based in Tempe, Ariz. Just a few years ago, they were running a mid-sized carrier called America West Airlines when they bought the old US Airways out of bankruptcy.

US Airways is only half the size of American and is less familiar around the world, but he prevailed by driving a wedge between American's management and its union workers and by convincing American's creditors that a merger made business sense.

Despite its smaller size, US Airways has prospered in the last several years, earning a record profit of $637 million last year.

"They've done an absolutely terrific job with what they have," said Bill Swelbar, an airline-industry researcher at MIT and board member of Hawaiian Airlines' parent company.

Parker began pursuing a merger almost as soon as AMR filed for Chapter 11. He found willing partners in American's three labor unions, who have long fought with management at their own company over pay, work rules and executive bonuses. American suffered strikes by pilots and flight attendants in the 1990s. Bad feelings hardened in the early 2000s, when union workers took pay cuts to keep the company out of bankruptcy while AMR gave bonuses to management employees after the stock price rose.

AMR's Horton professed no interest in thinking about a merger until his company was out of bankruptcy court, but his creditors pressured him to reconsider. Some of them, along with Wall Street analysts, called for new management at AMR.

Bob Herbst, a financial analyst who studies airlines, said AMR has failed to adapt to changes in the industry since consolidation began in the middle of the last decade. He said AMR was fixated on gaining market share rather than on profitability.

American placed 14th out of 15 airlines in government rankings for on-time performance in 2012 (US Airways was fifth). Only United had a higher rate of complaints than American (but US Airways was barely better than American).

"They are continually at the bottom in on-time and customer service, and they're losing more money than anyone else," Herbst said. "American's management is leaving because that's what needs to happen."

AMR, however, has made measurable progress under Horton, who became CEO the day before the company filed for bankruptcy protection. The company earned operating profits in the second and third quarters of 2012, and its revenue for every seat flown one mile — an arcane-sounding statistic but one that is closely watched in the airline business — rose faster than at its rivals for much of the year. With leverage from bankruptcy laws, AMR won new union contracts with lower costs.

"I'm a big fan of Tom's; he's done a great job," said Mike Derchin, an analyst with CRT Capital Group. "He restructured the balance sheet, made the company more efficient and got a pilots' contract. He positioned the company for the future."

That performance may also have gotten a better deal for Horton's creditors. US Airways' initial proposal called for AMR creditors to get only 49 percent of the stock in the combined company, according to people familiar with the talks. Instead, they'll get 72 percent, although they might have to share some of that with shareholders, said the people familiar with the deal.

In recent weeks, AMR won bankruptcy court approval to buy hundreds of new planes from Boeing and Airbus, an important step to reduce fuel costs and offer a more comfortable experience for passengers. American even unveiled a new logo and paint job for its planes, although the reviews were mixed.


January 27, 2013

Gov. Quinn Signs Immigrant License Legislation

Illinois is the fourth state to allow undocumented immigrants to obtain a driver's license with a new law signed by the governor.

Democratic Gov. Pat Quinn signed the legislation Sunday surrounded by hundreds of supporters who say the measure will make Illinois' roads safer and expand opportunities for immigrants.

Quinn says people need a way to get to work, drive to the doctor and drive their children to school.

“Driving means taking responsibility for your safety and the safety of others on the road,”  Quinn said, in a press release. “Despite the stalemate on immigration reform in Washington D.C., Illinois is moving forward. This common sense law will help everybody, regardless of their background, learn the rules of the road, pass a driving test and get insurance. As a result, our roads will be safer, we will create more access to job opportunities and our economic growth will be strengthened.”

Chicago Mayor Rahm Emanuel says the new law should serve as a model for the nation.

New Mexico and Washington both issue licenses to undocumented immigrants, while Utah issues permits.  Illinois officials say the dissemination of the temporary licenses is expected to begin in October.

The legislation was billed as a public safety measure and had bipartisan support.


January 14, 2013

RTA Alleges United, American Airlines Using 'Sham' Office

The Regional Transportation Authority alleges two major airlines are running "sham" business operations to get out of paying higher taxes on jet fuel.

According to RTA, United Airlines and American Airlines are claiming they purchase their jet fuel from offices in Sycamore, Ill. RTA believes they are actually doing business out of their Chicago headquarters.

RTA contends the practice has deprived Chicago and Cook County taxpayers of nearly $300 million over the last seven years.

The RTA filed a suit against United, while deferring formal action against American Airlines, since the company is currently involved in bankruptcy proceedings.

RTA Chief of Staff Jordan Matyas said the Sycamore office is sparse with empty tables and no computers. Still, his organization estimates a million gallons of jet fuel are purchased each day.

“We need to stop this," Matyas said. "The RTA has a fiduciary duty to bring in as much money for the mass transit in Chicago, and we can’t allow any company to dodge the proper sales tax. So I would say to the city of Sycamore...it is time that it stopped.”

The RTA filed the suit against Chicago-based United, while deferring formal action against American Airlines, since the company is currently involved in bankruptcy proceedings.

This isn't the first time the RTA has sued over sales tax avoidance. In 2011, RTA filed similar lawsuits against far south suburban Kankakee and Channahon, which the company alleges has similar deals with retailers and other airlines.

RTA has differed formal action against American Airlines, as the company is currently involved in bankruptcy proceedings. The airline wouldn't comment, only releasing this statement: "American does not comment on pending litigation but what it is doing in Illinois is permitted under Illinois law."

In a statement, United officials deny any wrongdoing.

"We are still reviewing the complaint, but we believe that any such suit is without merit. In fact, the operation of our fuel subsidiary in Sycamore has been examined by tax authorities in the past and has been determined to comply with all applicable laws," according to the statement released by United. "We will vigorously defend ourselves against these claims."

Meanwhile, the city of Sycamore said the city will defend its position. In a news release issued Monday afternoon, the city said the agreement with United Aviation has been reviewed by tax authorities in the past and determined to comply with state law.


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