East Star Airlines may become the first Chinese carrier to go bankrupt following the Wuhan local court's rejection of China Equity Group's re-launch plan ( ATWOnline, Aug. 26). CEG Chairman Wang Chaoyong said the lack of an agreement on how to handle East Star's sizeable debt was the reason for the rejection. The troubled airline owes money to China National Aviation Fuel Co. and several airports.
Philippine Airlines yesterday said its $301.4 million loss in the fiscal year ended March 31 prompted an array of "extraordinary" cost-cutting measures including the offering of early retirement packages to employees. It also approved the reduction in par value of its shares to PHP0.2 (0.4 cent) from PHP0.8 and a 25% increase in its authorized capital stock to PHP20 billion. PAL's fiscal 2008-09 revenue rose 8.6% to $1.63 billion but expenses climbed 23.5% to $1.9 billion. Load factor dropped 3 points to 76.2%.
IATA reported yesterday that declines in passenger and cargo traffic slowed in July, but warned that airlines still are struggling financially owing to severe falls in revenue and yields. International passenger demand dipped 2.9% year-over-year, a "relative improvement" over June's 7.2% decrease and the 6.8% lowering through the year's first seven months. International cargo's 11.3% decline was improved over June's 16.5% dip and the average monthly drop of 19.3% in January-July.
Shandong Airlines earned a CNY112.5 million ($16.4 million) net profit in the first six months of 2009, up 91.9% from the CNY58.6 million reported in the year-ago semester thanks to a recovery in domestic demand and government subsidies. Half-year operating revenue fell 3.6% to CNY2.34 billion against a 6.9% decrease in expenses to CNY18.56 billion. Passenger boardings climbed 13.5% to 3.5 million but cargo traffic fell 3% to 37,000 tons. Shandong's fleet comprises 12 737-300s, three 737-700s, 15 737-800s, eight CRJ200s and two CRJ700s.
Hawaiian Airlines' Air Line Pilots Assn. MEC launched a strike ballot lasting until Sept. 10 asking for authority to strike in protest of "two-and-a-half years of stalled contract negotiations and six years of bankruptcy-imposed contract terms," the union said. Permission to strike also must be secured from the US National Mediation Board, which first must formally declare an impasse in negotiations and establish a 30-day cooling-off period after which either side can resort to self-help measures.
Southwest Airlines and US FAA officials met yesterday to discuss an agency inspector's recent discovery that SWA is operating more than 40 737s with parts produced by an uncertified vendor, a finding that led to the Aug. 22 grounding of the aircraft from early morning to 3 p.m.
An-12 freighter operated by Republic of the Congo-based Aero Fret Business crashed yesterday around 12 mi. from its intended destination of Brazzaville, killing all six aboard. It departed from Pointe Noire, according to news reports. Those killed included two Congolese citizens traveling with the cargo and four crew comprising two Ukrainians and two Moldovans, the Russian consul in Brazzaville told media. Republic of the Congo banned passengers from traveling aboard An-12s in 2007 but cargo carriage remains permissible. No cause of the crash was given.
Aircraft Conversions of the Netherlands announced delivery of its fourth F50 freighter conversion to Bergamo-based MiniLiner. The company has received orders for 10 full F50 conversions plus five options.
Assn. of Asia Pacific Airlines' 17 member carriers transported 11.5 million passengers on international flights in July, down 7.8% from the year-ago month. International RPKs dropped 8.5% to 48.65 billion against a 6.5% cut in capacity to 63.5 billion ASKs, lowering load factor 1.7 points to 76.6%. "Traffic reductions may be easing, but a return to growth is still some way off," AAPA DG Andrew Herdman said.
US Airways and Continental Airlines yesterday announced they will follow American Airlines' recent decision to start charging $50 for a second piece of checked baggage on transatlantic flights ( ATWOnline, Aug. 24). As with AA, first checked bags will remain free.
EgyptAir reached agreement with US Export-Import Bank to help finance the purchase of five 737-800s and guarantee a loan from JP Morgan Chase. MS will take delivery of the first aircraft Friday in Seattle.
Australia's Rex Regional Express reported a A$23 million ($19.2 million) profit in the fiscal year ended June 30, down just 5.6% from the A$24.3 million earned the prior year and a result Executive Chairman Lim Kim Hai called "almost comforting" when compared to the ills facing the industry. Full-year revenue fell 3.7% to A$251 million, with passenger revenue declining 3.3% to A$204.3 million. Expenses were down 3.4% to A$220.2 million and pre-tax profit dropped 5.2% to A$30.8 million.
Air India employees represented largely by the Air Corp. Employees Union and the Aviation Industry Employees Guild continued with a hunger strike yesterday in protest of planned wage cuts. An AI spokesperson told The Economic Times, "We have a well formulated contingency plan and have deployed additional manpower to ensure smooth operations." Some 20,000 employees, or about two-thirds the carrier's workforce, reportedly are involved. ACEU General Secretary J.B. Kadian said AI management "is delaying and ignoring us.
American Airlines parent AMR Corp. announced the signing of a letter of intent with HP "to develop a next generation Passenger Service System" for use by AA and American Eagle encompassing reservations, pricing and ticketing, revenue management, inventory, flight information and check-in. Value of the proposed investment was not disclosed. The news came a day after TAM said it had selected Amadeus to provide its Altea passenger system to the Brazilian airline ( ATWOnline, Aug. 26).
AirTran Airways applied for authority to serve both Nassau and Montego Bay from Atlanta, Baltimore and Orlando International and to fly to Aruba from ATL and MCO. It said service, if approved, will start "later this year and early in 2010." Alaska Airlines will launch six-times-weekly Portland-San Jose service on Sept. 2, increasing to daily March 14 aboard a 737-700. Air Canada will offer daily Montreal-Houston Intercontinental service beginning Nov. 30 aboard Jazz Air CRJ700s.
Air New Zealand said its quick decision to remove capacity in response to the economic downturn, along with its fuel hedges, were responsible for better-than-expected results in the fiscal year ended June 30, including a NZ$21 million ($14.4 million) profit that represented a 90% drop from the NZ$218 million earned the prior year.
CSA Czech Airlines suffered a $99.6 million loss in the first half of 2009 under international accounting standards and confirmed yesterday that it will reduce both its fleet and its workforce as it seeks to return to profit next year. The carrier reported a pre-tax profit of CZK500 million ($28.2 million) in 2008 but has failed to weather the industry crisis, suffering a drop in passenger demand that led executives to contemplate the cuts three weeks ago ( ATWOnline, Aug. 6).
Alaska Airlines will launch daily Seattle-Houston Intercontinental flights on Sept. 23 aboard 737-800s. Aerolineas Argentinas launched thrice-weekly Buenos Aires-Bogota service aboard a 737-700. Route previously stopped in Lima. Four-times-weekly 737 service to Caracas becomes daily on Sept. 1. JetBlue Airways applied for route authority to serve Montego Bay from both Boston (weekly from Jan. 9) and Orlando International (daily beginning Feb. 8).
Norwegian took delivery of its first directly purchased 737-800. It now operates 13 -800s, 28 737-300s and four MD-80s and still has 45 -800s on order.
The Air Line Pilots Assn. yesterday urged the US government "to prohibit shipments of lithium batteries on passenger and all-cargo aircraft until new regulations are in place to ensure the safe transport of these hazardous materials," citing three recent incidents in which "fire, smoke or evidence of fire associated with battery shipments has occurred" on freighter aircraft.
News from Travel Technology Update: Amadeus introduced a "holistic" solution for corporate travel agencies that aims to provide a complete "start-to-finish" system. Called Amadeus One, the Web-based, multisource solution includes profile integration, mid-office functions, agency administration tools and new productivity tools.
