June 7, 2016 To the Point, its for the Points

The Liberty Gazette

June 7, 2016

Ely Air Lines 
by Mike Ely and Linda Street-Ely

Linda: When we first joined the Sport Air Racing League, after much coercing by Patricia Purcell, Air Race Queen, it was because I had competed in the all-women’s Air Race Classic a few times and while I loved the competition, the opportunity to live the racing life with Mike made the League so much more appealing. Sure, I loved that he was always at the finish line of every Air Race Classic race, open arms, tied with my mom as my biggest fan. But then there was Pat, calling and emailing every so often, dangling the preverbal carrot: “Your plane will be the fastest in its class - you’ll have a good shot at winning every race - and you won’t have to leave Mike behind.”

I love winning. I love Mike, too.

We joined the League in 2011 and spent the season learning how it all works, making our way to races that were not too far away, those we could get to, race, and be home the same day.

That season we learned. We learned how to win, we learned how to race cross-country air races. We entered the 2012 season with nothing but Season Championship Gold Trophy on our minds.

There would be a lot of traveling, and for what that cost we could have just bought all those trophies - but it wouldn’t have been the same.

It was a good year, 2012, the first of four consecutive Championships won by our “Elyminator”, which later won the title, “Fastest Cheetah in the Known Universe”.

After the 2012 season, though, we realized that we didn’t have to make every race to win the championship, so we relaxed our schedule a bit and missed some more distant races, like the ones around the breathtakingly scenic Pacific Northwest.

Now we’re in our sixth year in the Sport Air Racing League, and this year there’s a newcomer, and he thinks he can beat us in season points.

He flies Ercoupe so he competes in a different class, but he can win points toward the season championship, and that is where we compete against him.

For the first time since we joined the League, someone is gunning for the championship trophy, and he’s made us his target. I love good, clean, honest competition.

We’ll have to make every race to have any hope of retaining our title. Otherwise, there will be an upset of upsetting proportions. The thought of the Elyminator standing second to an Ercoupe, in official, saved-forever records, with end-of-year photos, and us holding a second-place trophy is motivating me to change a lot of plans this year. Second place is the first loser.

If ever there were a time to Elyminate, it is now. Game on.

ElyAirLines.blogspot.com

May 24, 2016 A Picture of Courage

The Liberty Gazette

May 17, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Linda: Two weeks ago I met Chris Sullivan as a fellow air racer. It was his first race and he was admittedly nervous.

“I’d always wanted to learn to fly. When I discovered Able Flight I submitted my application for scholarship and was selected to come to Purdue University.”

Chris’ first flight was in May, 2014, as he began Able Flight’s intensive training in an aircraft equipped with adaptive rudder controls, a Sky Arrow, nine years after being hit by sniper fire.

They were doing their job, just as they’d been trained. Nobody else was hit. Sgt. Sullivan lay on the ground bleeding from his neck. He couldn’t move, couldn’t speak. His vocal cords burned but he felt no pain; the sniper’s bullet had severed his spine. His squad franticly laid down suppression fire and attempted to evacuate him.

May 21, 2005, the 256th Infantry Brigade, LA Army National Guard had been tasked with locating and disarming IEDs just outside Baghdad Airport. As the team worked carefully the enemy watched. Suddenly, bullets flew, one entering the back of Chris' neck and exiting his back.

Carried to safety behind the Humvee, Chris could hear the radio. Apache helicopters were needed to blanket the area with suppression fire for Blackhawk helicopters to swoop in for the rescue, but the Apaches were on other missions. He knew they were too far to reach him before he bled to death - but he wasn't afraid. He prayed, “Lord, if its time to bring me home, I’m okay with that, but I will fight it as long as I can because I have so much more to do.” Unable to speak well, he smiled, hoping it would calm his buddies as his blood spilled out.

Then, over the radio squelched the news: two Apaches were within three miles and on their way, hot and heavy – fully loaded with ammo!

God didn’t bring Chris home that day, and so began the long and painful road to recovery. Knowing his Company would return from deployment in three and a half months, he wanted to greet them so he asked the doctors for an aggressive rehab plan. That reunion State-side was a great motivator, but once back home in Mire, Louisiana, doubt and fear prowled around him as he fought against post-traumatic stress. What was his purpose, now that he was paralyzed?

Chris began helping veterans through the Veteran’s Administration, with empathy that only someone who has been there can have. Four years later he joined Louisiana State Rep. Rodney Alexander’s staff as a case worker for wounded warriors. He shared his story at fund raisers, learned to scuba dive, went skydiving, and became a National Veterans Wheelchair Games silver medalist in snow skiing, and on the second anniversary of being wounded, our hero began dating his future wife, later witnessing another miracle - the birth of their son.

Chris worked hard at Able Flight, in ground school several hours a day, flying twice daily. Then, the night before his Check Ride he fell ill with an infection that spread to his bones. Courageously he fought back for a month, returning to Purdue to earn his wings.

This May, Chris became a fellow air racer. It was his first race and he was admittedly nervous as he climbed out of his wheelchair and into the cockpit. On that hot day, friends helped drape ice-cold cloths on his neck because his body can’t regulate temperature.

Engines started, props turned, and airplanes taxied to the runway. There in the Sky Arrow, eleven years after facing death in war, Chris Sullivan taxied in line and looked down the row of race planes. A tear came as he took the starting line, throttled up and became: a race pilot. He won First Place.

ElyAirLines.blogspot.com

May 17, 2016 Spotlight on Careers: Air Traffic Control

The Liberty Gazette
May 17, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Mike: Faces glow with the reflection from large computer screens as they watch pulsating blips moving in different directions and speeds across the screen. One of the watchers calmly speaks through a microphone as she issues instructions to one of the blips. She is organizing them. The guy sitting beside her is pushing buttons and speaking to others controllers via special phone lines. The scene is repeated around the dimly lit room. This is an Air Route Traffic Control Center (ARTCC). 

Following a pivotal accident in 1956 where a United Airlines DC-7 and a TWA Super Constellation collided in the clouds over the Grand Canyon, the modern air traffic control system  came out of the ashes. The United States operates the largest and busiest air traffic control system in the world, handling tens of thousands of flights each day. 

There are 22 of these Centers in the United States. Houston Center near Bush Intercontinental is not the largest but it controls a 28,000 square mile area, extending into much of the Gulf of Mexico. 

Besides AARTCs, there are smaller facilities controlling local approaches and departures like the Houston Terminal Radar Control (TRACON) and the many Air Traffic Control Towers at airports around the country. 

In Virginia is the highly sophisticated FAA Command Center which looks like NASA’s control center, or the war room inside Cheyenne Mountain near Colorado Springs that monitors missiles - ours and “theirs”. The FAA Command Center integrates and synchronizes air traffic across the country and into many other parts of the world. When weather causes delays, Command Center controllers work to keep traffic flowing. 

Many controllers are pilots but there are many who are not. It takes a special type of person to work this highly stressful job. Prospective controllers take aptitude tests. Going to a school that specializes in training controllers is one option. In Texas there are two schools that offer this training, Texas State Technical College in Waco and Le Tourneau University in Longview. After graduation accepted applicants enter into training at the FAA’s Academy in Oklahoma City - and must begin before their 31st birthday (yes, the federal government, who makes it illegal and will fine private companies for the doing so, does practice age discrimination). Mandatory retirement is age 57. 

After completion at the academy, on-the-job training begins. Controllers must be certified for every position they may occupy but they usually start out at an air traffic control tower. Having enjoyed the lofty view from Houston’s Intercontinental tower, I find it both a surreal and enlightening experience from a pilot’s perspective to watch controllers at work. 

With the upcoming introduction of the much touted NexGen air traffic control system these jobs will present many new challenges to the next generation of controllers.

Interested in air traffic control as a career, or know someone who is? The jobs are always posted on www.usajobs.gov. Openings come and go quickly, so check regularly. Or, you might discover something else that tickles your fancy in this fascinating world of aviation.

ElyAirLines.blogspot.com

May 10, 2016 Something for Everyone - and the donuts are good

The Liberty Gazette

May 10, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Linda:  Shane had just been promoted to Captain at a regional airline when his first child was born. He was commuting from their home in Houston to Newark, New Jersey to fly passengers in the Bombardier Q400, riding the jump seat to work because there were no cabin seats available.

With the birth of his daughter the timing felt right to go back to school and add an art degree to his aeronautical sciences degree. Opportunities in Houston were plentiful with in-house graphic arts jobs.

Once while waiting for weather to clear before departing JFK airport he opened ForeFlight, the aviation weather app on his iPhone, and helped passengers understand the reason for delays. They appreciated the pilot who took time to show and explain. He didn't know it then, but eventually he would come to work for that company.

In Kenya, where he grew up, there weren’t a lot of things for kids to do - no soccer, swim team, or club activities. Cultural expectations for teens were to begin a mentoring relationship in a field of interest.

Understandably, his mom didn’t want him sitting around with nothing to do. There was an airport on her way to work, so by age 15 Shane was dropped off at the airport where his mechanical intuition developed into skill in his first job with East African Air Charters “in the big hangar”. Most business was flying tourists and journalists, with Shane and the other mechanics keeping the planes airworthy.

“I looked forward to the donuts,” he recollects of his teen years in the hangar. “This lady would come in and for 20 shillings you got a ‘mandazi’ and a cup of tea.”

He started out cleaning engine blocks with Scotch-Brite and kerosene (sans gloves, and hopefully after the donuts). It took two hours to clean one block and there was a whole pile of them, but more importantly he was learning how things got done.

“There was this guy who looked like St. Nicholas, or maybe Yoda, and he knew how to machine all the parts.” Once, a plane got stuck in Sudan, its nose gear collapsed in a pothole. They wanted to send a team to fix the plane but most of the guys didn’t have passports so they sent those who did - one had a little bit of knowledge and the other two had none - and through a landline phone instruction was provided to fix the plane. Repairs went on into the night so they built a berm for one to sit and guard the plane while the others worked on it.

In the afternoons Shane hung out at the hangar next door and talked with passengers and pilots about where they’d been and what they’d done, and all of this made him want to learn to fly.

He opted for college at LeTourneau University in Longview, earning all the pilot certifications to fly for an airline.

Shane now lends his expertise to the aviation software company he used in his days with the airline, and spends his nights at home with his family.

From the necessary network of over 30,000 airports across the U.S. to creative careers that support aviation as a vital mode of transportation important to our economy, there’s something for everyone, which makes Shane’s family very happy.

ElyAirLines.blogspot.com

May 3, 2016 Cities Livable, Cities Die-able

The Liberty Gazette 

May 3, 2016 

Ely Air Lines 
by Mike Ely and Linda Street-Ely 

Linda: One of my all-time favorite pieces of aviation writing is the article written by Rick Durden and published in his column, “The Pilot’s Lounge”, in the super-popular Avweb, July 16, 2007, just a month after we began this column. Rick’s been writing a long time - that piece was #115 in his space in Avweb.

Because of all that, I can nearly forgive him of the lawyer part. While “The Loneliness of a Town Without an Airport” is too long to copy full length here (although Rick did give us permission), we’d like to share the conclusion - but, not before we summarize how he got there.

Rick’s Saturday morning flight in a friend’s Great Lakes Biplane brought lovely views of places he might want to visit with his wife. Quaint towns begging for his company cast their beauty high enough to reach the 1,000’ where Rick was flying, and he wondered if they were friendly and would welcome him in a way that would make him think that would be the perfect place to live.

“‘Hi, I'm here. I'll trade you a ride in the biplane for some ice cream.’ I wonder if it would work?” 

Sadly, he found no runway in this one lovely town, and so began his explanation of the economic advantages of airports and how livable cities have them.

Conclusion: die-able cities do not.

Or, as Rick said: “I could not help but be saddened by the stultifying loneliness a young man or woman must feel to be stuck in a town that does not show any sign of looking outward by having something so simple as an airport runway, that time-honored symbol of a gateway to adventure. Are the kids there easy prey for the beaten-down adults who tell them to quit dreaming, to quit being "foolish" and be content with what they have been given and their lot in life? Are those kids easier prey for the dealer who tells them that this here meth will take them away from this crummy town? 

“How can the people of a town be so insular, so close-minded and content with the mundane, as to not have the most basic of airports? My thoughts returned to my initial desire to visit the town, and I wondered whether I would enjoy the people I might meet who had proclaimed to all who cared to see that they were content and attuned to just beetling across the surface of life rather than living it fully. Would there be anyone there with any sense of creativity, of adventure, of fascination with ideas beyond the horizon? Would they be a town of risk avoiders, insurance salespeople, belt-and-suspenders wearers whose idea of a fabulous time was to go to the local bar and get blotto while watching professional wrestling on the television?

“As I flew into the evening, I concluded that it was a very pretty town. Yet I suspected the people of a town without an airport might well possess other bad habits that are not so immediately observable. Life is short enough that I'm not willing to risk a visit to find out. After all, I'm not going have time to get to see all the places I know for certain I want to see.

“Nevertheless, I will feel sorry for the residents of the town without an airport, especially the kids. They know not what they are missing.”

Read Rick’s entire piece at Avweb.com, The Pilot’s Lounge, #115.

ElyAirLines.blogspot.com

April 26, 2016 Welcome, Come on in!

The Liberty Gazette 

April 26, 2016 

Ely Air Lines 

by Mike Ely and Linda Street-Ely 

Mike: Although the Girl Scouts and Boy Scouts have different Merit Badge choices and requirements, learning about aviation does qualify for both groups. Boy Scouts can earn an Aviation Merit Badge, and Girl Scouts can earn badges in Science & Technology, and aviation certainly qualifies. 

We are enthusiastic about every invitation and every opportunity to present to these scouting groups, and others such as homeschoolers, American Heritage Girls, Awana, the many interesting aspects of aviation and aerospace. 

Recently a Scout from Midland, Georgia completed something special in pursuit of fulfilling requirements for his final Scout rank: a public service project to become an Eagle Scout. Young Jerad had been interested in aviation even before his troop received Young Eagles flights in 2011, but his first flight pretty much sealed the deal and soon he became a regular at Young Eagles rallies and local chapter meetings and events of the Experimental Aircraft Association (EAA). 

Linda: Since the expensive, violative, and worthless TSA has threatened so many airport managers into thinking they must build fences around airports (no, there is no logic in that), many people now think that airports are off-limits, but the majority of the pilot population absolutely loves sharing their passion for aviation. The useless TSA has polluted our world with a “stay-out” attitude, completely contrary to the enthusiasm pilots have for the adventure of flight. 

15-year old Jerad wanted to help make his local airport more inviting despite government overreach and his idea was a perfect match for an Eagle Scout public service project. 

Back in the days when there was no such thing as TSA people could come to their community airport and sit at a picnic table or park bench and watch airplanes take off and land, talk with pilots, and maybe even catch a ride over town, just for the fun of it. At Jerad’s local airport the park benches were gone, replaced by ugly fences that screamed “Keep Out”. 

Thanks to Jerad and all his supporters though a new observation deck welcomes anyone to come and enjoy the spirit of their local airport. Now when younger children come for their first Young Eagles flight they will have a safe place to hang out and watch the planes come and go, as each pilot tries to grease on the perfect landing. 

The observation deck didn’t come easily. It was a lot of work, but it is Jerad’s way of giving back to the Young Eagles program that has helped him discover his interests. He developed building plans and earned permission from all the necessary stakeholders - the airport director, airport commission, the FBO manager, the FAA, and the Boy Scout Eagle Board - then became the project manager and chief promoter, winning volunteers and donations from the community and taking full responsibility for the project. 

In the end they received $4,500 from 37 donors, and 325 hours of labor from 30 volunteers, bringing Jerad’s plans to fruition. These were aviation and community supporters, including pro-aviation company 84 Lumber. 

Airports exist to serve communities and as part of the larger transportation network. We should be shouting “Welcome – come on in,” rather than trying to discourage people from enjoying their public assets. 

Next month the Thunder in the Valley Air Show will be at Jerad’s airport and he’s looking forward to seeing his deck serving the public good. 

ElyAirLines.blogspot.com

April 19, 2016 Before us, they were

The Liberty Gazette

April 19, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Mike: The engine made a soothing humming sound as we sat seemingly motionless in the still and cool night air. As the glow from the distant city was becoming brighter the calm of our cocoon was rustled when the San Antonio Approach controller asked if we could see the airport yet.

No, still looking.

Then in the middle of some sporadically dispersed lights came a soft white flash. A moment later a muted green flash - the airport beacon. Yes, we have the airport in sight.

The controller terminated his radar watch over us so we could switch to the airport control tower.

Approaching San Antonio’s Stinson Municipal Airport, it is difficult to see the runway lights until you are close in. Then even with lights on their brightest setting, it feels like descending into a black hole. The municipal baseball park near the approach end helps illuminate trees near the runway as we coast in for landing. The gentle bump and the squeak of tires on pavement confirm we have settled onto terra firma. Stinson tower controller clears us to taxi to the terminal where we take a break before continuing our night time sojourn.

We love the old stone-faced art-deco style terminal building. Originally built as a Works Progress Administration project completed in 1936, it got some tender loving care for its 70th birthday when the city completely renovated and expanded it while retaining most of its original integrity. Old terminals, like old airplanes need to be spruced up from time to time but we should never change their timeless soul.

Inside the building the halls are decorated with photographs and memorabilia chronicling Stinson’s 100 year past. Here were a lot of aviation firsts.

Stinson Municipal Airport, which began life in 1915, is the second oldest continuously operated airport in the country, the oldest airport west of the Mississippi. Only College Park Airport in Maryland, build by the Wright Brothers in 1909 is older. Named after the three siblings who leased 500 acres from the city to create an airport, Marjorie, Katherine and Eddie Stinson made significant contributions to aviation.

Katherine, often referred to as the Flying Schoolgirl, had an ulterior motive when she joined her brother and sister in the airport project and flight school: music. She’d seen an article about barnstormers and aerial exhibition performers making $1,000 per show - a way for her to earn money to pay for her piano education in Europe. But in 1912, preparing to build Stinson Airport, she became the fourth woman in the United States to earn her pilot license. She eventually went to Europe, Japan and China, but as a pilot, not a pianist, and is credited as the first woman ever to perform the loop-the-loop maneuver as well as setting endurance and distance records. She also raised two million dollars for the American Red Cross.

Marjorie and Eddie taught at their Stinson School of Flying, teaching civilians and Canadian Air Force pilots until World War I began and the facilities were taken over by the U.S. government. By that time, Marjorie, known as the Flying Schoolmarm, had already trained more than 80 pilots for service.

All was quiet that night as we tore ourselves away from this great part of American history. The Elyminator beckoned and as we climbed aboard our sleek steed and headed skyward into the night, we thought about all those pilots who came before us, right there in that same air space.

ElyAirLines.blogspot.com

April 12, 2016 Air Force One - Connie makes a comeback

The Liberty Gazette

April 12, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Mike: Nothing sounds quite like the throaty roar of a big 2,500-horsepower radial engine. If you make it a quartet the music is thusly amplified. When blue smoke belches from exhaust stacks and dust and gravel are flung into a sandstorm behind the four big 19’ diameter propellers of the beast you might get a notion of the calamity and commotion such a sight could generate.

Amidst this chaos a big bird from one of the most romantic eras of aviation history emerges. At the beginning of its takeoff roll it seems to stand still as the engines wind up franticly. The airplane starts trundling along. As it passes a crowd of well-wishers and cheering fans the sound of those supercharge radial engines becomes a symphony to their ears. Gaining speed it breaks ground, slowly climbing into the desert sky. Its been a long time since the majestic aircraft has experienced flight.

Our July 1, 2014 piece chronicled the efforts of a group in Arizona to restore the first Air Force One, President Eisenhower’s Lockheed Constellation ("Connie") named Columbine II. It is our pleasure to announce they are succeeding.

Recapping what we presented in the previous installment, Eisenhower had three airplanes. Each was named Columbine after the state flower of Colorado where his wife was born. Columbine II was the first designated as Air Force One so there would be no confusion with air traffic control as to the importance of the aircraft. It was later parked in the Air Force’s boneyard at Davis-Monthan AFB in Tucson and eventually sold to an aerial spraying operator. After service with that company it was parked at an airport just north of Tucson. There it sat waiting for either the scrapper’s torch or to one day fly again. We finished by stating the then owners were looking for a museum interested in restoring the aircraft for display.

Last year, Dynamic Aviation, a multi-facetted aviation company headquartered in Bridgewater, Virginia bought the airplane, thus, continuing the journey restoring it to flight status. Karl Stoltzfus, Dynamic Aviation’s CEO says they plan to restore it to just as it was when President Eisenhower was using it.

Expertise provided for the project came from Texas’ own Mid-America Flight Museum in Mt. Pleasant that volunteered the work to get the "Connie" back into the air, the first step to returning it to show quality and hopefully flown about the country retelling the story of how the most recognizable aircraft call-sign in the world came to be.

On March 21, Captain Lockie Christler, son of the former owner, Mel Christler, slowly advanced the throttles as the plane’s flight engineer monitored the engine gages. Captain Christler released the brakes and the "Connie" began rolling. A post on the Mid America Flight Museum’s Facebook page reads "At 12:28 – after over a year of preparation, Columbine II once again took to the sky. Tears of joy are watering the desert."

On its journey eastward, the Constellation was flanked by a Boeing B-25 - a medium-size WW II bomber, and a Beechcraft King Air, making their first stop Mt. Pleasant, Texas. Two days later amidst creaks and groans from its 70-year-old airframe, the first Air Force One landed at its new home in Virginia. With a new lease on life she will inspire and educate a whole new generation.

ElyAirLines.blogspot.com

April 5, 2016 There's no rush like it

The Liberty Gazette

April 5, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Linda: Following a lay-off from her auto cad drafting job, Doreen Yost was looking for work when a friend suggested she help him train race horses. Living close to Churchill Downs has its benefits. She was 23, hadn’t been around horses, but was a perfect size: extra small.

Winter’s ground was cold when Doreen began as an exercise rider ‘walking the shed row’ indoors for the horses that didn’t go to Florida.

"To exercise them in the off-season they put a rider on for the weight and feel. I found out that balancing is really hard. I was in pretty good shape, but not for that. You have to hold your heels down and stay in the stirrups."

She’d bought the helmet and all the gear. After walking shed row for a couple weeks, one nice day they said, "Take this horse out." It was her chance to see if she could be a jockey.

At the training center was a three-horse gate. She mounted an experienced horse, and, "The first time I broke out of a gate was awesome! We were going 35-40 mph in like two jumps! They told me I ‘Woo-hoo’d’ all the way down the stretch," she laughs.

There’s no real training for that moment, so she just did everything she'd been taught. "I never thought there was any rush like that - until, the first time I landed an airplane."

Doreen tried being a race jockey for about 10 years. Because she is so light she works well with the babies; when they’re young they can take her weight, and she handled them better than she could the big horses, but realizing she would not be a jockey and felt like a failure.

Then she met Joe. They made their home as newlyweds close to Clark County Airport in Indiana.

The horse gig wasn’t getting it and those planes were flying over all the time. "I didn’t want to spend the rest of my life doing cad drawing. I needed something to focus on." She prayed about it and was still searching when Joe bought her a discovery flight.

Training began in a Cessna 152, a two-seat airplane that carried her through to her pilot’s license. "It was too little for everyone else but perfect for me - and it was always available."

Joining the 99s (women pilots group) she met Sue, who needed a race partner for the four-day all-women’s Air Race Classic. Amazed to discover there was such a thing, Doreen felt a bit intimidated at first but quickly became comfortable with the camaraderie of friendly competitors. Together they raced Sue’s Cessna 172, Race #42, across 2,530 miles, "With three goals: 1. Don't cause an accident 2. Don't kill ourselves 3. Don't finish last."

Sue made all the landings because Doreen can’t reach the pedals, even with pillows; Doreen mostly handled navigation and radio duty - she loves to talk on the radio.

Departing Doreen’s home airport, Stop 3 on the race, the alternator suddenly failed. "Our radios didn’t work so we turned back, hoping to get a new alternator quickly and stay in the race."

All the other racers had taken off, and by the time they had a new alternator the wind had shifted and a sweet tailwind carried Doreen and Sue up to Kalamazoo, giving them the second-fastest time on that leg.

As Sue’s Cessna 172 crossed the finish line much yelling, whooping and hollering occurred in the cockpit. Happy to have finished the race, 33rd out of 50, Doreen could finally answer her mom’s anxious texts and tell her she succeeded.

These days she says, "I kinda failed at being a jockey, but I’m a much better pilot."

ElyAirLines.blogspot.com

March 29, 2016 Airline Genealogy

The Liberty Gazette

March 29, 2016

Ely Air Lines
by Mike Ely and Linda Street-Ely

Linda: Reflecting on topics we’ve covered in this space, from the well-known to the obscure, I realized we hadn’t touched much on airline acquisitions and mergers, be they deals proposed or deals closed. The negotiations are fascinating, but the paperwork can be oh so boring, so I wondered if we could discuss it here without putting you to sleep. Let’s take a stab at it – but set an alarm just in case.

Airline merger history has more partner-changing than a marathon square dance. In the last thirty years American picked up TWA, Eastern, and Air California. Pan Am and Continental were taken up by United. Delta consumed Northwest and Western after Northwest had acquired Republic, and Southwest Airlines snatched up Air Tran. United and US Airways courted, but the Justice Department (DOJ) objected because it would have resulted in increased fares, reduced competition, and fewer route choices. When US and Delta flirted Delta pilots and senior management, and some creditors, threw buckets of cold water on that affair.

Mergers are mainly motivated by alluring cost reductions and increased revenues (follow the money), but the DOJ must study how a merger would affect competition to determine the risk of antitrust.

Consider the merger that created the largest airline in history – American and US Airways, proposed as a stock swap while American was in bankruptcy court. Follow the money.

Analysts said it would cause a significant decrease in competitors serving the same cities if the merger was approved. Would potential benefit to consumers outweigh potential harm? Would one of the partners go belly up, losing its assets if they didn’t merge? The DOJ poured over financial information, ticket sales, operations, labor force, and schedules and interviewed experts for insight into how the airline industry and U.S. economy may be affected.

They also considered the "Southwest Effect". Southwest has served for years as a check on mergers because even with less competition, there’s always Southwest, and legacy airlines know that SWA has every intent of "Luving" all those passengers, so their presence can help keep ticket prices down.

But raising ticket prices or eliminating competition doesn’t drive businesses to merge; rather, its greater efficiency (purchasing, technology, and facilities) with more flexibility (a greater variety of aircraft to serve changing or seasonal capacity needs). Challenges come in integrating technology and in workforce blending - how to handle seniority, a major problem in a union-heavy industry.

And approval from DOJ and DOT are not the only prerequisites; they need economic authority from the Office of the Secretary, safety authority from the FAA, and approval of shareholders. And that’s where the rubber meets the runway. The real driver for airline mergers is the financial gain to shareholders – and let’s be honest, it’s only the big fat cheeses who gain.

When American and US Airways announced their engagement they put all their equity in a pile and counted it. $11 billion. They proposed shareholders of American Airlines would own 72 percent of the new company, and US Airways shareholders would have 28 percent: American had 879 airplanes and US had 336, a 72-28 split. With the new company, they could offer more seamless travel to more destinations, and that would trigger more ticket sales for a bigger piece of the pie.

Always follow the money. Aside from employees’ loss of pensions and $17M severance for the American CEO, what’s not to love? Care to dance?

ElyAirLines.blogspot.com