China Southern Airlines deepened its cooperation with Air France by signing a memorandum yesterday to sell a 20% stake in its Nanlian Air Catering Co. to AF subsidiary Servair for €7.3 million ($10.8 million). Launched in 1989, Nanlian has registered capital of CNY120 million ($16.7 million) and previously was held by CZ (75%) and Hong Kong Ruilian Investment (25%).
UPS reported a 2007 net profit of $447 million, down 89.4% from $4.2 billion in 2006 owing mainly to a $6.1 billion pension payment related to a new labor contract agreed to in the fourth quarter with the International Brotherhood of Teamsters representing 45,000 of its employees. But Chairman and CEO Scott Davis did note that the "economic environment" is "increasingly challenging" and warned of a "sluggish US economy." Full-year revenue rose 4.5% to $49.69 billion driven by a 13.1% lift in international package revenue, which relies heavily on UPS Airlines, to $10.28 billion.
Aeroflot remains interested in Serbia's Jat Airways, according to SU Deputy DG Mikhail Polyboyarinov ( ATWOnline, June 4, 2007). He told reporters in Moscow that SU is seeking a partner for a joint bid for Jat and that a tender may take place as early as late March. "A valuation is currently being performed," he said, according to Thomson Financial. In other SU news, the carrier took delivery of its 14th A320 this month, on lease from GECAS.
LAN reported net income of $308 million for 2007, a 27.8% increase over $241 million earned in the prior year, as the airline company was rewarded for its ongoing rapid expansion. LAN this year plans to grow passenger capacity 20%-22% and cargo ATKs 8%-10%, accelerating its already fast rate of growth in recent years. Full-year 2007 revenue rose 16.2% to $3.53 billion while expenses escalated 13.9% to $3.11 billion, producing operating income of $413 million, up 36.6% from $303 million in 2006.
EADS and Airbus CFO Hans Peter Ring will relinquish his role at the aircraft manufacturer and stay on at the parent company. Airbus Chief Controlling Officer Harald Wilhelm will become CFO on Feb. 1.
Lufthansa will launch weekly Frankfurt-Luanda on April 1 aboard an A340-300. WestJet will start seasonal services from Hamilton to Nassau (weekly), Fort Lauderdale (twice-weekly) and Orlando International (twice-weekly) on Feb. 15 and to Tampa on Feb. 18. Iberia increased daily Madrid-Bogota A340 service to 10-times-weekly. Air New Zealand will launch twice-weekly Auckland-Beijing on July 18 with a 777-200ER.
Boeing recorded a bumper year in 2007 with an 84% increase in net income to $4.1 billion on revenues that rose 8% to $66.4 billion as backlog reached a record $327 billion, up 31% on the previous year. Commenting on the result, Chairman Jim McNerney said, "The 2007 results demonstrate the kind of quality financial performance we can achieve through our simultaneous focus on growth and productivity. Despite some development program challenges, we are a strong company growing stronger, and we expect continued improvement in our financial results in 2008 and beyond."
GuestLogix will deploy its Mobile Virtual Store onboard solution across the fleet of Sweden's Skyways under a multiyear agreement. Technology features wireless POS devices and application service to streamline onboard sales transactions. Klarago AB assisted in the deal.
Gol Linhas Aereas Inteligentes said its Varig subsidiary will adjust its network in an "aim at improving efficiency and the quality of services." Domestic flights will be reconfigured with business travelers in mind and making use of a policy reinstating connections at Sao Paulo Congonhas. Varig Marketing Director Murilo Barbosa said the airline intends to replace its 737-300 fleet with 737-700s/-800s by year end.
Malaysia Airlines flew 3.55 billion RPKs in December, down 0.9% from the year-ago month. Capacity fell 2.3% to 4.8 billion ASKs, lifting load factor 1.1 points to 73.9%. Airberlin transported 1.9 million passengers in December, up 16.6% from the year-ago month. Load factor rose 3.2 points to 71.7% and unit revenue climbed 2.2% to 4.55 euro cents. ATA Airlines flew 397.4 million scheduled RPMs in December, up 8.7% from the year-ago month. Capacity rose 4.4% to 482.9 million ASMs, lifting load factor 3.2 points to 82.3%.
Allegiant Air parent Allegiant Travel Co. appears to have found the right formula in the congested US market as efforts to develop ancillary revenue streams and expansion into high-demand leisure markets helped produce a $31.5 million full-year profit, more than triple the $8.7 million earned in 2006.
Northwest Airlines reported bankruptcy exit aided net income of $2.32 billion for 2007, a dramatic turnaround from a net loss of $2.86 billion in 2006 when it was operating under Chapter 11 protection. The carrier's 2007 pre-tax income excluding reorganization items was $764 million, a more-than-150% improvement over $301 million on similar terms in the prior year. It posted a fourth-quarter net loss of $8 million, narrowed from a net loss of $267 million in the 2006 period.
Airbus said MatlinPatterson Global Advisers placed an order for six A330-200 freighters for placement with companies in its portfolio such as Varig Logistica and Global Aero Logistics (holding company of ATA Airlines, World Airways and North American Airlines). Airbus now has sold 72 -200Fs to eight customers.
German travel conglomerate TUI announced yesterday that it signed an MOU with Lufthansa to combine their LCC subsidiaries under one "joint and independent holding company." TUI owns TUIfly, the combination of Hapag-Lloyd Flug and Hapag-Lloyd Express, while Lufthansa partners with Germanwings and Eurowings along with Albrecht Knauf Industriebeteiligung. The latter also signed the MOU, TUI said. Agence France Presse said a mid-2009 timeframe for finalization is TUI's target.
Lufthansa reached an 18-month deal with the Vereinigung Cockpit union representing approximately 4,400 LH pilots that will include a 2.5% pay increase backdated to Oct. 1, 2007, and an additional 3% raise from Jan. 1. In addition, pilots will receive a one-off payment equal to 25% of monthly salary "in recompense for the onerous workload and additional working hours the cockpit crews were called on to perform in the face of corporate growth," LH said.
Air Transport Assn. said the US airline cost index in the third quarter of 2007 was up 0.2% from the year-ago period. The consumer price index rose 2.4% over the same period, ATA said. Fuel, which accounted for 25.9% of expenses, rose 1.6% to $2.11 per gal. Unit operating cost per ASM was unchanged at 12.49 cents. "The slowing economy and sky-high fuel prices are putting tremendous pressure on US airlines to reduce nonfuel costs.
Singapore announced the conclusion of bilateral open skies agreements with Denmark, Norway and Sweden. The agreements provide for "unlimited hubbing rights" for cargo carriers as well as conventional open skies conditions. Singapore now has open skies arrangements with 13 EU countries.
A year that begin with much-publicized operational problems and ended with a fourth-quarter loss still was a positive one for JetBlue Airways, which reported net earnings of $18 million for 2007, reversed from a $1 million loss in the prior year and its first full-year profit since 2004.
Gol Linhas Aereas Inteligentes, parent of Gol and Varig, announced a one-year share repurchase program of up to 5 million preferred shares, representing 8.8% of the total outstanding. The shares will be held in treasury and resold or canceled, the company said.
UPS earlier this month for the first time operated two revenue flights simultaneously using Aviation Communication & Surveillance Systems' ADS-B-based SafeRoute program aboard 757-200Fs and plans to conduct such flights about once a week over the next two months as it gradually equips aircraft and trains pilots.
Rolls-Royce reached a deal with Oman Air for Trent 700 engines to power its five purchased and two leased A330s that begin delivery in 2009 ( ATWOnline, Nov. 14, 2007). Value of the contract, which includes a TotalCare package, is $460 million at list prices.
