In a move likely to chill slowly thawing labor relations at United Airlines, parent UAL Corp. is providing a generous severance package to Douglas Hacker, a longtime member of the company's executive management team who sued UAL in March to recover bonus and incentive payments he claimed he was owed.

A decision on Virgin Blue's future could take up to 18 months in the wake of Patrick Corp's surprise decision to accept the latest takeover bid by Toll Holdings.

Atlas Air and Polar Air Cargo parent Atlas Air Worldwide Holdings, in its first full fiscal year since exiting bankruptcy protection, reported a 2005 profit of $73.9 million on revenue of $1.62 billion, a performance that left the company confident as it pursues a listing of its common stock on a national exchange."We believe that reaching these milestones will greatly broaden our potential investor base and therefore interest in AAWW, ensuring a more liquid market for our shares," Senior VP and CFO Michael Barna said.

Qantas will cut its regular sport sponsorship commitments, estimated to be worth $15 million, in favour of community and arts packages.

The on-again-off-again relationship between Air New Zealand and Qantas is back on, with the carriers announcing yesterday a comprehensive codeshare agreement for their routes across the Tasman Sea.

Continued rising fuel prices are undermining the "remarkable overall progress being made by the US airline industry to return to profitability," the US Air Transport Assn. said yesterday as it called for airspace modernization to mitigate the impact."Record crude oil prices, which are expected to average nearly $70 per barrel this summer, will hamper the industry's widespread efforts to reverse the losses that have plagued the airlines in recent years," ATA VP and Chief Economist John Heimlich said in a statement yesterday.

South African Airways will launch a low-cost carrier by year end, President and CEO Khaya Ngqula revealed during a ceremony in Johannesburg Monday that saw SAA become a full Star Alliance member (ATWOnline, April 11)."There is a clear demand for low-cost travel in the country," Ngqula said, noting that LCCs represent 20%-25% of the market. "The market for domestic travel has increased by 50% over the past five years [since the first LCC, kulala.com, commenced operations], and we have only captured 5% to 10% of this. We need to take a bit of this back."

A joint statement released yesterday by Cathay Pacific Airways and Air China and investors Swire Pacific, China National Aviation Co. and CITIC Pacific confirmed reports that "discussions are taking place about operational cooperation" between CX and Air China and "realignment of shareholdings" in the two airlines and Dragonair, the Hong Kong carrier owned jointly by CNAC (43.3%), CITIC (28.5%), Cathay (17.8%) and Swire (7.7%).There has been talk of Cathay's increasing its stake in Dragonair as it looks to build a stronger presence on the mainland, while Air China, in which CX owns 9.9%, leans toward joining the Star Alliance (ATWOnline, April 5).

BAE Systems on Friday informed the London Stock Exchange that it has "entered into discussions with European Aeronautic Defense & Space Co. regarding the sale of its 20% shareholding in Airbus."In the brief statement, the company also said that "discussions are at an early stage." According to the Associated Press, EADS has valued BAE's stake at ?3.5 billion ($4.3 billion). BAE Systems' primary contribution to Airbus is design and production of wings.

Qantas is expecting a 25 per cent efficiency improvement from a new $55 million material and logistics distribution centre opened this week near its Sydney headquarters.