Air India said it presented its turnaround plan to the government's Committee of Secretaries and that, "while appreciating the various measures taken by Air India, the committee felt that in some areas more aggressive cost reduction measures were required to be adopted and the company also needs to examine its strategic position with respect to its shareholders' objectives." AI said the committee directed the Ministry of Civil Aviation, in consultation with the Ministry of Finance, to present a loan or bailout proposal to the cabinet.
Austrian Airlines Group will end the short-time work program for approximately 2,500 ground staff at the end of September as planned, although short-time work for cabin staff will continue until year end. The company will hold talks this fall with employees regarding new labor deals as it seeks to cut labor costs by €150 million ($214.5 million). AAG and Lufthansa are expected to discuss additional details of their merger at a Thursday news conference in Vienna ( ATWOnline, Aug.
Gulf Air signed a four-year, $70 million loan agreement with Bahrain Islamic Bank that will be used partly to finance eight A320s expected to be delivered in the 2009 fourth quarter and 2010 first quarter.
China Southern Airlines reported net income of CNY25 million ($3.7 million) for the first half of 2009 based on international accounting standards, down 96.9% from the CNY818 million earned in the year-ago semester, thanks to government aid. According to yesterday's filing with the Shanghai Stock Exchange, the Guangzhou-based carrier received a subsidy of CNY1.52 billion during the period. Half-year operating revenue fell 9.2% year-over-year to CNY24.88 billion as CZ suspended fuel surcharges, while operating expenses dropped 12.6% to CNY22.27 billion on lower fuel prices.
Lufthansa Systems will provide Dutch carrier transavia.com with FMS data from its Lido navigation database. Transavia.com already uses the Lido OC flight planning solution and Lido RouteManual navigation charts.
The European Commission Friday officially approved Lufthansa's proposed acquisition of Austrian Airlines Group, saying LH alleviated antitrust concerns by agreeing to reduce service between five European cities and Vienna. Separately, AAG announced draconian cuts to its management structure (see item below).
Japan Airlines, coming off a more-than-$1 billion loss in its fiscal first quarter ended June 30, Friday announced a "new corporate organization structure" aimed at streamlining internal processes and improving customer service.
Malaysia Airlines MD and CEO Idris Jala resigned from the carrier upon being appointed to join the government as a cabinet minister in charge of a new Performance Management and Delivery Unit. CFO Azmil Zahruddin was named the airline's CEO effective immediately. Jala leaves MAS having overseen one of the more remarkable turnarounds in recent airline industry history. He joined the carrier as MD/CEO on Dec. 1, 2005, with little background in air transport, having been recruited from Shell Malaysia.
Singapore announced the conclusion of an open skies agreement with Peru and new bilateral air services agreements with Colombia and Ecuador. The deal with Peru includes unlimited hub rights for cargo operations. The Colombian agreement provides for up to eight weekly passenger and cargo flights, increasing to 14 by January 2011, while the Ecuador deal provides for up to 56 weekly passenger flights between and beyond the two countries along with an open skies provision for cargo operations. There currently are no direct scheduled flights between Singapore and South or Central America.
Iberia Group said it will ground three more A320s and postpone delivery of an A340-600 this year, bringing its full-year capacity reduction to 6% from 4.3% previously. IB already had parked five A320s and delayed delivery of an A340-600 from October 2009 to September 2010. It made the announcement as it reported a second-quarter net loss of €72.8 million ($103.8 million) compared to income of €21.2 million in the year-ago period.
ATR will make the "official presentation" of the first ATR -600 series aircraft, an ATR 72-600, at a ceremony in Toulouse on Oct. 1. Flight trials for the variant, which features a new cockpit and passenger cabin, began July 24. Flight trials for the smaller ATR 42-600 will take place next year. Service entry for both is expected in 2011. The 72-600, which is powered by PW127Ms, offers an additional 500 kg. MTOW and MZFW compared to today's versions. ATR said it holds orders for 54 72-600s and five 42-600s.
Austrian Airlines Group, which is being acquired by Lufthansa (see item above), announced that it will reduce its management staff by approximately 45% from 347 currently, including cutting the number of VPs from 24 to 14. Together with 14 senior directors "who manage the staff functions and a number of selected specialist divisions," they will make up the top management of the group. "By taking this step, we are creating more efficient structures and simplifying our decision-making processes," Executive Board Members Andreas Bierwirth and Peter Malanik said in a statement.
Messier Services signed a nine-year agreement with JetBlue Airways covering the periodic exchange and overhaul of the landing gear on the carrier's fleet of 113 A320 family aircraft. Monarch Aircraft Engineering reached agreement with Oy Air Finland to provide line maintenance technical handling at Manchester International with daily checks and unscheduled maintenance for an Oy Air 757.
CAAC last week approved China Eastern Airlines' acquisition of Shanghai Airlines, according to CEA GM Ma Xulun. The merger still requires the approval of both carriers' shareholders, but CEA said it has started the merger process and expects the transaction to be completed by year end ( ATWOnline, Aug. 10). A shareholders conference is planned for Oct. 9 to consider and vote on the merger and approval is expected.
Kale Consultants said it was chosen by IATA "as the prime technology supplier" for development of the association's "Simplified Interline Settlement initiative." SIS aims to standardize, facilitate and expedite interline billing and settlement in the airline industry, in large part by removing paper from the billing and settlement process. IATA Senior VP-Industry Distribution and Financial Services Tom Murphy said SIS will generate $500 million in annual savings for the industry.
Air France and China Southern Airlines announced an expansion of their codeshare agreement covering CZ's flights from Guangzhou to Kunming, Xiamen and Wenzhou and AF's service from Paris Charles de Gaulle to Madrid, Milan Malpensa and London Heathrow. Air Canada will launch summer seasonal service to Athens and Barcelona from Toronto and Montreal next year. Subject to government approval, service will be operated June 3-Oct. 18 using 244-seat 767-300ERs. Both routes will be operated six days per week, with half the flights originating in Toronto and half in Montreal.
Iberia announced the reorganization of its management structure including splitting its airline division into a Commercial and Clients division "focusing on generating income" and a Production Division "charged with enhancing profitability." The former will be led by Maintenance and Engineering Division Manager Manuel Lopez Aguilar and the latter by Production Management Unit head Juan Bujia. The former Airline Division led by Enrique Donaire has been dissolved.
Boeing said yesterday that 787 first flight "is expected by the end of 2009" with first delivery to launch customer ANA pushed back to the 2010 fourth quarter, a schedule that allows for a longer flight test program than previously planned to provide "some cushion. . .to account for unknowns."
SAS Group airlines flew 2.41 billion RPKs in July, down 13.6% from the year-ago month. Capacity fell 17.3% to 2.88 billion ASKs and load factor rose 3.6 points to 83.8%. SAS Scandinavian Airlines reported a 7.6% drop in July yield as it flew 2.22 billion RPKs, a 15.3% decrease. Capacity dropped 19% to 2.63 billion ASKs and load factor was up 3.7 points to 84.5%. Norwegian said July yield rose 4% year-over-year to NOK0.59 (9.75 cents) while unit revenue was up 6% to NOK0.52. The LCC flew 1.28 billion RPKs, up 10%, against a 9% lift in capacity to 1.46 billion ASKs.
Warning that it expects a "continuation of the current market trends," Aer Lingus yesterday reported a €73.9 million ($105.5 million) loss in the first semester of 2009, widened more than threefold from the €21.6 million lost in the year-ago period.
Virgin Blue Holdings blamed the tough operating environment, one-off charges and nonrecurring costs for a A$160 million ($133.2 million) loss in the fiscal year ended June 30, the company's worst-ever result and a reversal from the A$97.7 million surplus reported the prior year.
Virgin America narrowed its second-quarter loss to $15.8 million from the $64.4 million deficit suffered in the year-ago quarter, claiming that its "business model is right on track" and its service and amenities "provide an unrivaled value proposition at a time when consumers are more discerning than ever." Revenue rose 46.9% to $135.9 million against a 4.7% decline in costs to $147.3 million. Operating loss improved 81.6% to $11.4 million from $62.1 million in the second quarter of 2008.
Star Alliance said EgyptAir, South African Airways and TAP Portugal are the first members to use the alliance's newly developed Common IT Mobile Platform. The mobile services are being rolled out in stages and currently include flight schedules, real-time departures and arrivals and lounge information among other features. More interactive services such as frequent-flyer program status, online check-in and seat selection and mobile boarding passes with 2D barcodes will be made available in the coming weeks, Star said.
Thales said it completed "phase four" of Mexico's nationwide air traffic modernization program for air navigation services provider SENEAM. The phase involved the upgrade of the sites at Mazatlan, Hermosillo, Puerto Vallarta, San Jose and Tijuana airports. Mexican ATC centers "are now operating exclusively with the Thales Eurocat ATM system," the company said.
