This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

United, US Airways Linked to Asiana by Alliance and Code Shares

CHARLOTTE ( TheStreet) - After the crash of Asiana Flight 214 at San Francisco International Airport on Saturday, it was United (UAL - Get Report) that came to the assistance of passengers, just one sign of the influence of the far-reaching impact of global airline alliances and codeshare agreements.

If pilot error were to emerge as a cause of the crash or a contributing factor, another aspect of the carriers' relationships could come into play, because a U.S. law requires that U.S. carriers conduct periodic safety audits of their code-share partners. It is possible that a serious safety issue could prompt a review by one or both of the U.S. partners, United and US Airways (LCC).

Both carriers, like Asiana, are members of the Star Alliance, and both also have code-share agreements with Asiana to facilitate travel between Korea and the U.S. Spokespersons for the two carriers declined to say whether any of the passengers on the flight had booked Flight 214 through them or had booked connections on their flights through Asiana. It is reasonable, however, to assume that the latter did occur.

The practice of United, as a Star alliance member, is to assist an international carrier that has an accident in the U.S. In this case, United hosted the flight's passengers and in some cases their families in its club, providing food and beverage as well as telephone and Internet access. Additionally, United, like other carriers, waived change fees for SFO passengers because of the hundreds of delays and cancellations that resulted from an airport closure and subsequently from the shutdown of a runway.

At a news conference Monday, National Transportation Safety Board chairwoman Deborah Hersman said that United and Asiana employees are providing support to 120 crash survivors and family members. The NTSB "requires domestic and foreign carriers to have plans in place to meet the needs of victims and family members," she said. Asiana's responsibilities include arranging travel and lodging for survivors and their families.

As for the potential safety issue, in 2000 the U.S. Transportation Department established a code-share safety program requiring U.S. carriers to conduct safety audits of their foreign partners. The program's establishment followed Delta's (DAL - Get Report) 1999 decision to temporarily suspend its code-share with Korean Air after a series of accidents including a 1997 crash in Guam that killed 227 people.

"People got jittery about that," said aviation consultant Bob Mann. "KAL had cultural issues, cockpit resource management issues, that caused junior people to not say anything to a senior person." Historically, similar issues have occurred at U.S. carriers as well. Delta sent a team to help KAL overcome the problem.

"If it turns out there are safety culture issues that arise in the Asiana crash, it would be appropriate to invoke those standards" of the code-share safety program, Mann said, adding: "I would think the partners would want to." Mann consulted for Asiana, regarding non-operational issues, in the early 1990s. He did not observe any safety issues at the airline then.

Nevertheless, "Asiana's accident is going to damage the image of not just Asiana, but all Korean airlines," Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul, told Bloomberg News on Monday. "It only takes one incident to undermine years of work Korean airlines have made to get a solid, accident-free record. This will prompt the government to call for stricter safety measures."

Joshua Shank, CEO of the Eno Center for Transpiration, said Monday that "If the NTSB finds that the airlines and/or pilots are at fault, it is likely that other airlines will be concerned about association with Asiana and will act independently of FAA regulations."

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
LCC $0.00 0.00%
DAL $40.00 0.00%
UAL $51.50 0.00%
AAPL $126.44 0.00%
FB $87.28 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs