S7 Airlines plans to phase out the last of its 35 Russian-built aircraft next week owing to lower passenger demand. "The summer season was an alarm bell for us," CEO Vladislav Filev told ATWOnline in Moscow, calling the decision to ground S7's 27 Tu-154s and eight Il-86s "dramatic" and necessary to remain profitable.
Ryanair exercised options for 10 737-800s under terms of its 2005 agreement with Boeing ( ATWOnline, Feb. 25, 2005). Three aircraft are scheduled for delivery in October 2010 and seven the following month. Separately, the LCC said it has asked the UK Office of Fair Trading to investigate Air BP's alleged attempt to increase the delivery cost of aviation fuel at Belfast City and Glasgow Prestwick by more than 50%.
British Airways CEO Willie Walsh last week reiterated his call to move forward with the second phase of EU-US open skies and to remove all current ownership and control restrictions so airlines can consolidate. "It is absolutely clear to me that one of the solutions to the problems this industry is facing is consolidation. We've got to be able to move beyond artificial restriction," he said at the Routes Leaders Forum in Kuala Lumpur.
Austrian Airlines Group issued a new forecast last week "based on the already observed as well as expected declines in bookings," and now is expecting a 2008 net loss before special items of €100-€125million ($134.5-$168.1 million).
The US National Transportation Safety Board issued an "urgent recommendation" to FAA to require that all Pratt & Whitney PW2037 engines be removed from service for inspection of the second-stage turbine hubs when they have accumulated 10,880 flight hr. and/or 4,392 cycles, a warning driven by the board's investigation of a Delta Air Lines 757-200 uncontained engine failure on an attempted takeoff from Las Vegas on Aug. 6.
Thomsonfly will cease operations at Coventry next month in line with parent TUI Travel's strategy to refocus airline operations on leisure routes and reduce low-cost scheduled city-to-city flying ( ATW, October 2008). The UK carrier, which will be rebranded to Thomson Airways following its merger with First Choice Airways, flew to some 10 destinations from the airport. Thomsonfly's decision to pull out of CVT is casting doubts on its future as a passenger facility.
Russian government last week presented a series of proposals to help beleaguered airlines, including a suggestion from Transportation Minister Igor Levitin that tariffs on foreign aircraft leased by Russian carriers be abolished if additional domestic aircraft are leased as well, Prime-Tass reported. The ministry did decide to cancel import tariffs on certain components and equipment for a nine-month period beginning in December.
Bmi will double the frequency of its London Heathrow-Riyadh service to six-times-weekly effective Jan. 15 following a revised air services agreement reached by the UK and Saudi Arabian governments. Three weekly LHR-RUK services will continue to Jeddah and three to Damman. Simultaneously, bmi will suspend its thrice-weekly LHR-JED. Separately, it signed a three-year agreement with Sabre Travel Network giving Sabre travel agencies and corporations access to inventory including Web-only fares.
Berlin Tegel-based Germania will stop operating scheduled services during the winter schedule and maintain only its charter and wet-lease operations. It also will phase out its remaining eight F100s; it already had removed 11 from the fleet. Its network currently comprises 12 destinations. It transported 4 million passengers last year and also operates four 737-300s and eight 737-700s. An additional two -700s and four -300s are on dry lease to other airlines.
Sun Country Airlines, which filed for Chapter 11 bankruptcy protection this month ( ATWOnline, Oct. 7), said it will pay employees 70% of their pay for the rest of 2008 instead of 50% as originally announced. Chairman, President and CEO Stan Gadek, in a message to employees, cited "continued customer support for our business in the form of new bookings" and explained that SCA had more cash on hand than expected. But he warned that the carrier is "still at risk."
In a dramatic reversal, Jet Airways late Thursday night announced that the 1,900 employees targeted for layoffs would be reinstated, with Chairman Naresh Goyal claiming his decision did not come from political pressure or union threats but rather because he "cannot see the tears in their eyes."
IATA last week issued a strong criticism of proposed air travel taxation plans in Belgium and Ireland and calculated that, combined with the proposed UK Aviation Duty and the recently implemented Dutch departure tax, passengers could face an annual tax burden of up to €3.8 billion ($5.11 billion) in those four countries by 2010. "Collective madness is the only way to describe the €150 million Irish and €132 million Belgian departure tax proposals.
The fuel hedges that helped Southwest Airlines stay profitable while surging oil prices crippled its US rivals now have resulted in the carrier's first quarterly net loss in 17 years, a $120 million deficit that represented a reversal from the $162 million profit reported in the third quarter of 2007.
United Airlines said that 332 International Assn. of Machinists members have taken advantage of early out and voluntary furlough programs as part of UA's effort to reduce employment rolls by 7,000 positions, reducing the need for involuntary furloughs among IAM employees by 40%. UA sad more than 1,500 cabin staff represented by the Assn. of Flight Attendants around 200 pilots and 100 mechanics have taken leave so far.
Volatility in the Indian market continued yesterday as Air India said it is working on a plan to offer unpaid 3-4-year leave to up to 15,000 employees and Kingfisher Airlines reported a heavy third-quarter loss. The AI announcement came one day after Jet Airways, which had just unveiled its alliance with former rival Kingfisher, revealed a controversial plan to lay off approximately 1,900 workers ( ATWOnline, Oct. 16).
Airbus decided to pull back on planned production rate increases, citing "uncertainty in the financial markets." A320 family production will stay at 36 per month rather than being ramped up to 40 by 2010 as planned and A330 production will grow from eight to 10 per month but not up to 11 by 2010 as previously planned. "This is clearly the prudent thing to do," COO-Customers John Leahy told The Wall Street Journal. "We will reevaluate the situation in the first half of next year and decide whether to [reinstitute] the ramp-up."
Spanish Judge Javier Perez, who is overseeing a judicial inquiry into August's Spanair MD-82 crash, summoned three Spanair mechanics for questioning this week, including the pair who inspected the aircraft before its failed second takeoff attempt. The third reportedly is the airline's head of maintenance. A court spokesperson told reporters that the mechanics could be charged with manslaughter.
Airbus and Air India parent National Aviation Co. of India signed a joint venture agreement to establish an MRO center at Delhi's Indira Gandhi International. Work on AI Airbus aircraft will start early next year with ATR and third-party work expected eventually. AI currently operates 43 A320s, 11 A319s, 10 A321s, eight A310s and two A330s. Total project cost is estimated at $40 million over five years and facility will handle more than 100 single-aisle and 10 widebody aircraft per year by 2013.
Republic Airways Holdings confirmed that it will operate four E-170s on behalf of Hawaii's Mokulele Airlines under a 10-year capacity purchase agreement ( ATWOnline, Oct. 10). Mokulele will be responsible for scheduling, pricing, distribution and promotion. First two aircraft, to be operated by Republic subsidiary Shuttle America, will be placed into service by Nov. 19. The remaining pair will be in revenue service by spring.
SkyEurope Airlines said that York Global Finance, which holds 29.9% of the LCC, has offered to buy the remaining shares and inject more capital into the carrier. It said it will negotiate with York but "will continue to look for alternative investors who might ascribe a higher value to the company's airline business," according to Reuters ( ATWOnline, Sept. 1).
Air China told the Shanghai Stock Exchange yesterday that it expects to report a nine-month deficit owing to falling demand and fuel hedge losses. It did not reveal specific figures. Its profit through the first nine months of 2007 was CNY3.5 billion and it was CNY1.24 billion in the black through the first half of 2008 ( ATWOnline, Aug. 28). Through Sept. 30, CA had flown 48.87 billion RPKs, down 2.6% year-over-year, against a 2.2% increase in ASKs to 65.47 billion.
Cathay Pacific Airways and Dragonair flew 6.87 billion RPKs in September, a 4.5% increase over the year-ago month. Capacity rose 14.2% to 9.5 billion ASKs and load factor fell 6.7 points to 72.3%. Air Canada and Jazz flew a combined 4.26 billion RPMs in September, down 5% year-over-year. Capacity fell 6.4% to 5.33 billion ASMs, lifting load factor 1.2 points to 79.9%. AirTran Airways flew 1.23 billion RPMs in September, down 2% year-over-year, against a 9.7% fall in capacity to 1.66 billion ASMs. Load factor rose 5.9 points to 74.4%.
Primaris Airlines, a Las Vegas-based charter carrier, sold 75% of its preferred and outstanding stock to CorpoPetrol Global Energy Development and filed for Chapter 11 bankruptcy protection in order to allow CorpoPetrol to finalize the financing. Primaris operates 757-200s.
Continental Airlines yesterday reported a third-quarter net loss of $236 million, reversed from a $241 million profit in the year-ago period, and announced that it has pushed back delivery of 18 aircraft scheduled to arrive over the next two years. Two 777s will be delivered in 2010 instead of 2009 and 16 737NGs slated for 2009-10 have been deferred to 2011 and beyond with no new schedule set. CO still is scheduled to take delivery of 14 737NGs next year, though executives concede that the Boeing machinists strike could push some of those back as well.
