WestJet yesterday finalized a term sheet with Singapore Aircraft Leasing Enterprise for one 737-700 and one 737-800, both to be delivered in 2009. The Calgary-based LCC plans to operate a fleet of 85 737NGs by the end of 2009 and has said it will operate 92-95 of the type by 2011.
AirAsia is booming, enjoying its "best quarter ever," according to CEO Tony Fernandes, and boosted its full-year guidance following yesterday's announcement that it posted a MYR150.1 million ($42.9 million) profit in the second fiscal quarter ended Dec. 31, about triple its MYR51.3 million profit in the year-ago period.
US Airways said it entered into a commitment letter with Citigroup Global Markets and Morgan Stanley Senior Funding to arrange debt financing of up to $1.6 billion that would permit the airline to refinance $1.26 billion of its existing senior secured credit facility, refinance $325 million of unsecured debt and raise incremental liquidity. The transaction should be completed by the end of the current quarter, US said.
Airline Partners Australia's A$11 billion ($8.8 billion) bid for Qantas ( ATWOnline, Feb. 23) has hit turbulence, with two key stakeholders suggesting that the $A5.60-per-share offer undervalues the airline. According to Australia's Financial Review, UBS Global Asset Management, which holds 6% of QF, is unwilling to sell while Balanced Equity Management, with 3%, is unconvinced. APA has said its offer is conditional on 90% acceptance.
Indonesian government announced a ban on commercial aircraft older than 10 years this week following several mishaps and accidents, the worst of which was the January crash of a 17-year-old Adam Air 737-400 that killed 102 ( ATWOnline, Jan. 26). According to the Associated Press, Transport Minister Hatta Rajasa insisted the regulation would not require parliamentary approval but did not indicate when it would go into effect. The current age limit is 20 years.
Icelandair chose SAS Ground Services as its new provider at Paris Charles de Gaulle. Aviapartner started handling Iberia's flights at Rome Fiumicino, Milan Malpensa and Milan Linate.
US Dept. of Transportation will launch an investigation into recent incidents in which JetBlue Airways and American Airlines left passengers stranded onboard aircraft for hours during adverse weather conditions, joining several members of Congress and citizen groups in an effort to find solutions ( ATWOnline, Feb. 21).
Aeroports de Paris sold its interest in Beijing Capital International Airport Co. for HK$1.97 billion ($252.1 million) through an accelerated placement with institutional investors. ADP held 16.2% of BCIA's Hong Kong-listed shares. The French airport operator did not disclose its reason for offloading its stake but said it "reaffirms its willingness to accompany the Chinese authorities in their development of airports in China, in particular at the regional level."
Midwest Airlines said in a letter to shareholders yesterday that "AirTran's business is deteriorating" and that it wants to acquire Midwest to prevent further erosion. "AirTran leaves a trail of broken promises in markets it enters with great fanfare," said the letter signed by Midwest Chairman and CEO Tim Hoeksema.
Adria Airways placed an order for two 86-seat CRJ900s, becoming the aircraft's 12th customer. CEO Tadej Tufek said the CRJ900 will allow for greater capacity than its seven CRJ200s while replacing A320s on routes where "loads are insufficient to support the larger aircraft."
Warning that its current structure is "unsustainable and unacceptable," Airbus yesterday unveiled details of its Power8 restructuring plan, which includes 10,000 job cuts, closing or selling three plants, spinning off three others, outsourcing half of A350 XWB production (see story below) and streamlining its business to achieve a 16% increase in manufacturing productivity.
Embraer announced the sale of five E-190s, plus five options for either E-190s or E-195s, to M1 Travel, the largest shareholder of Swiss regional Flybaboo, which currently operates two Dash 8s to 120 destinations. Deliveries are scheduled to begin next year. The airline will lease the first three aircraft from M1, which selected the Steep Approach option that will enable it to operate the aircraft into London City, Sion, Lugano and Florence. The first two will be new Flybaboo destinations. Value of the deal if all options are exercised could reach $355 million at list prices.
Pinnacle Airlines reported net income of $77.8 million for full-year 2006, widened from $25.7 million in the prior year despite a 2% drop in revenue to $824.6 million.
The city of Krasnoyarsk is investing $550 million in the rebuilding of its airport, which it intends to transform into a transportation hub for central Russia. Private investors contributed 45% and the remainder is coming from the government. Construction will commence this year.
Iberia Group yesterday reported a net profit for the 11th consecutive year, though earnings of €57 million ($75 million) in 2006 fell a precipitous 85.6% from the €396 million posted in 2005 when the company benefited from gains from the sale of Amadeus and Savia.
KLM and Malaysia Airlines are strengthening their codeshare cooperation to include MAS flights from Kuala Lumpur to Penang, Langkawi and Kota Kinabalu. KLM passengers arriving from Amsterdam will have access to the flights from March 1. Hawaiian Airlines is adding flights this summer from Honolulu to Los Angeles, Seattle and Pago Pago in conjunction with the introduction of four 767-300s into its transpacific fleet. Service to LAX will become 21-times-weekly, to Seattle 14-times-weekly and to Pago Pago five-times-weekly.
MTU Aero Engines and JetBlue signed an agreement to extend the terms of a contract concluded in 2005 ( ATWOnline, June 29, 2005) from 10 to 15 years, bringing the deal's overall value to €2.4 billion ($3.16 billion). The original contract provided for nearly all 400 of the LCC's V2500s to visit MTU's shop at Langenhagen for maintenance. Under the extension, 116 IAE engines scheduled to be delivered to the airline from 2009 will be built to the upgraded SelectOne standard.
Grupo Ferrovial announced that Macquarie Airports exercised its call option on Ferrovial's 20.9% stake in the company owning the rights to Sydney Airport ( ATWOnline, March 30, 2006) for the agreed price of A$1.01 billion ($799.2 million). Ferrovial Aeropuertos will net A$919 million on the sale. The Spanish company said the share transfer will take place March 16-20.
Aegean Airlines will take delivery of its first three new A320s through March, increasing its fleet to 24 aircraft. The carrier's summer schedule features 150 daily flights to 15 Greek and 10 international destinations. In 2006 it carried 4.4 million passengers, an 11% increase from 2005.
Air Tran Airways said a merger with Midwest Airlines would create 1,100 new jobs in Milwaukee and add 74 flights out of Mitchell International Airport. In a filing with the US SEC this week, AirTran offered details that painted a positive economic outlook if it acquires Midwest, estimating that the total economic benefit to Wisconsin would be nearly $1 billion annually ( ATWOnline, Feb. 2).
Air New Zealand's radical cabin interior makeover was credited for a 61% hike in net profit to NZ$74 million ($52.4 million) for the six months to Dec. 31, with long-haul yields jumping 12.7% as passengers upgraded to its Premium Economy and Premier Business products. Operating revenue rose 12% to NZ$2.1 billion while expenses increased 10.1% to NZ$1.72 billion. As expected, fuel was the biggest item and grew 13% to NZ$584 million. Operating profit was NZ$109 million versus the 2005 period's NZ$81 million.
Twenty-two additional carriers reportedly have joined AirTran Airways, Alaska Airlines, ATA Airlines, Frontier Airlines, Midwest Airlines, Southwest Airlines and US Airways Group in filing a joint complaint with the US Dept. of Transportation opposing new terminal charges at Los Angeles International Airport, which this week broke ground on a $723.5 million renovation of its Bradley International Terminal. LAX raised fees on Feb.
Qantas Group selected the GEnx to power its fleet of up to 115 787s. CFO Peter Gregg called the choice "a difficult one following an exhaustive eight-month evaluation process." The initial order is for engines for 45 firm aircraft and was valued by Qantas at A$2 billion in "capital and maintenance costs over the life of the engines." It gives the GEnx a significant edge on 787 customers, with orders for 216 aircraft compared to 125 for the Trent 1000.
OnAir, the Airbus-SITA joint venture, named former Airbus Senior VP-Finance Benoit Debains as its new CEO effective March 1, replacing George Cooper. It also named SITA VP David Russell as OnAir COO.
General Electric conducted the first test of the GEnx-1B on its 747 flying testbed last week in California. The aircraft flew for 3 hr. and climbed to more than 43,000 ft. in order to establish a performance baseline for future testing. "The engine performed extremely well. . .Today's flight puts us another step closer to certification later this year. . .for the Boeing 787," GEnx GM Tom Brisken said. The 747 testbed was modified last month to manage the electrical load from the engine's two starter-generators and to provide power required for both electrical ground and air starts.
