EU's first written submission in its WTO challenge to US government subsidies to Boeing details "massive, long-standing and WTO-inconsistent" federal, state and local government support totaling $23 billion, the EU announced. It cited NASA and Dept. of Defense research and development support and tax beaks and infrastructure support from the states of Kansas and Washington as examples. A nonconfidential version will be released in "due course," the EU said. The US is scheduled to present its written defense on June 14 with the first panel hearing set for July 11.
AirTran Holdings raised the stakes once again in its bid to acquire Midwest Air Group by offering to purchase each outstanding Midwest share for $15 in cash and stock ($9 in cash and 0.5842 share of AirTran common stock), up from an October offer of $11.25 and a January bid of $13.25.
Continental Airlines will launch twice-weekly Houston Intercontinental-Loreto flights on June 7 aboard ERJ-145s. Air China will increase Beijing-San Francisco service to daily from five-times-weekly on April 1.
Delta Air Lines plans to make cash and stock payments valued at $480 million to its 39,000 noncontract employees--those not covered by a collective bargaining agreement or a management compensation program--upon emergence from bankruptcy. It will distribute 3.5% of common stock, initially valued at $350 million, and lump sum cash payments totaling $130 million to the workers following its planned May exit.
Precision Conversions said Spain's Cygnus Air exercised one option for an additional 757-200 freighter conversion. Work will begin in August. Cygnus, which provides scheduled cargo service to Iberia, already operates one Precision Conversions 757-200PCF.
AirAsia X plans to place an order next month for up to 15 A330-300s, The Financial Times reported Friday. The long-haul LCC, owned by FlyAsianExpress and spearheaded by AirAsia CEO Tony Fernandes, had intended to launch in July but said last month it would push its start date back until the fourth quarter at the earliest owing to a lack of aircraft ( ATWOnline, March 19). It initially will operate flights from Malaysia to a UK city and at least one Chinese city.
Airways New Zealand, the country's navigation services provider, said last week it will trial a glide descent approach procedure for Air New Zealand and Qantas 747s landing at Auckland International beginning the middle of this month. Engines will be set at idle from the top of the descent point in order to "significantly" reduce fuel burn and emissions. Similar trials have been run at Melbourne and Amsterdam, with a third currently operating in San Francisco.
Sabre Holdings said Friday that its acquisition by Silver Lake Partners and Texas Pacific Group was completed ( ATWOnline, Dec. 13, 2006) following a vote for approval Thursday night by stockholders, who are entitled to receive $32.75 per share in cash in a transaction valued at $5 billion including the assumption of $550 million in net debt. The company intends to deregister and delist Sabre Holdings common stock today.
Delta Air Lines Friday unveiled a new board of directors, including the appointment of former Eastman Kodak CEO Daniel Carp as chairman, that will begin sitting upon the company's emergence from bankruptcy, expected during the second quarter. CEO Gerald Grinstein will be the lone current DL executive on the 11-person board.
Decks are now clear for the merger of Air India and Indian, the country's two state-owned carriers, which will combine under the newly formed National Aviation Co. Ltd.
US and Argentina reached an expanded air services agreement last week that will raise the number of possible weekly passenger flights between the countries from 56 to 77 immediately and to 112 by March 2009. Airlines from both countries also will have access to more follow-on international destinations.
Niki, the Austrian low-cost carrier and Air Berlin partner, took delivery of its first CFM56-5B-powered A319 last week, the first A320 family aircraft fitted with Airbus's enhanced cabin that is derived from the A380 and features 15% more bin volume, more passenger space at shoulder level, enhanced lighting and noise reduction features. Onboard the delivery flight, President Niki Lauda told ATWOnline that the carrier continues to achieve 30% annual passenger growth.
Considered to be a merger or acquisition target following approval of the EU-US open skies agreement, Iberia on Friday received a takeover approach from Texas Pacific Group, which values the Spanish flag carrier at about €3.4 billion ($4.53 billion).
Lufthansa Technik and Cathay Pacific Airways signed a 10-year Total Engine Support contract last week under which LHT will serve 15 CX PW4056-3 powered 747-400s, including six spares. The companies said they are in "final preparations" for another deal covering PW4062s on six new 747-400ERFs set to arrive in May 2008.
TAAG Angola Airlines launched twice-weekly Luanda-Sao Tome-Lisbon service aboard a 737-700. Frontier Airlines will launch flights from Memphis to Denver (twice-daily), Las Vegas (daily) and Orlando International (daily) from May 12. Separately, it signed a four-year distribution agreement with Expedia. Spanair and Air One reached a codeshare agreement under which Spanair will put its code on Air One's flights from Barcelona to Turin and on to Rome Fiumicino and Naples while Air One will place its code on Spanair services from BCN to Madrid and Oviedo.
The UK Office of Fair Trading officially referred BAA, operator of seven UK airports including London's Heathrow, Gatwick and Stansted, to the country's Competition Commission for a formal antitrust investigation that could lead to the forced sell-off of one or more airports.
Hainan Airlines parent HNA Group launched its Grand Xinhua Express Airlines Friday in Tianjin just southeast of Beijing, from where it initially will operate five 32-seat regional jets. HNA holds 81% of the new carrier with an investment of CNY81 million ($10.5 million), while Hainan Airlines invested CNY19 million for the remaining stake. GXE is aiming to be China's top regional airline in both passenger and cargo traffic.
South African Airways "needs a full-scale restructuring to return to profitability," CEO Khaya Ngqula said last week while announcing the start of a "comprehensive" revamp "that will include all levels of the organization." SAA previously announced it will eliminate 1,000 positions this year ( ATWOnline, Dec. 4, 2006). A restructuring committee has been formed and the "process to develop a new business plan" approved, it said.
LIKE NEARLY ALL OTHER ASPECTS of commercial aviation, designing and developing cabin interior products has become a fast-moving business aimed at giving airlines a passenger service edge over rivals. Gone are the days when international carriers were content to maintain the same first and business class configurations and amenities for eight years or longer. Airlines barely are done retrofitting their fleets with one premium class design before unveiling a newer, better one, shortening the lifecycle of those interiors to 5-7 years, say experts.
THAILAND'S CAPITAL CITY HAS A big beautiful new airport with a big ugly problem. Suvarnabhumi International is enormous and has the potential to rival Singapore Changi for Southeast Asian hub traffic. More than 40 years in the planning, it opened to full operations last Sept. 28 with the usual new-airport glitches: Confusing signage, unbalanced lighting and cooling, not enough toilets, balky new systems and the like. These have, for the most part, been corrected. Then in late January, cracks began appearing in airfield pavement, first in taxiways and later in runways.
AS AIR FRANCE BEGINS PREPARING to deploy the A380 as the first European airline to fulfill its strategy to be a dominant long-haul player, regional operations seem almost trivial. Nonetheless, it does cherish its little ones.
Buried deep within the filing cabinets in some airline analyst and CEO offices around Asia are reports that confidently predicted low-cost carriers never would succeed in the region. The rationale was simple and, to most, convincing: Cathay Pacific and Singapore Airlines had similar unit costs to Ryanair and easyJet so how could a budget airline work in Asia? Fortunately for 30 million passengers (through February 2007) who enjoy the world's lowest airfares every day, AirAsia founder and CEO Tony Fernandes never saw those reports.
AFTER ALMOST A DECADE OF LOBBYING, COMPLAINING AND pleading to the European Commission about the need to balance the industry value chain and address the confrontation between a fully deregulated sector and its monopolistic providers, Europe's airlines, more specifically its network and leisure carriers, got their wish granted earlier this yearat least partially.
HE AIRLINE INDUSTRY HAS MADE LARGE STRIDES in improving the efficiency of its maintenance, repair and overhaul materials supply chain but much work remains to be done, say experts, particularly in comparison to performance of other industries. Progress can be measured by the fact that the MRO spares inventory has not increased over the past decade despite the growth in the fleet.
