Air Canada The wave of restructurings among legacy carriers over the past five years has focused mainly on aligning the financial and operating cost structure with the altered revenue environment. Although this has opened doors to new market opportunities, it has done little to persuade customers that airlines deliver value for money. Fare changes have tended to be seen as reactive, a reluctant response to a market increasingly defined by low-cost carriers and the Internet.
Horizon Air A paradox of the regional airline business as practiced in North America is that in order to achieve admittedly impressive rates of growth and financial returns, most of the participants have had to forgo their own brand and market identity in favor of becoming a piece in a larger partner's machine. There is no denying that the business model works, although as recent events show, regionals risk being viewed and treated by their larger partners as so many interchangeable parts.
ALTHOUGH AIR ARABIA IS STILL a youngster, its youth has been well spent. Skepticism regarding the viability of the low-fare airline was high when the venture launched in October 2003 with an inaugural flight from Sharjah International Airport to Bahrain, followed soon thereafter by services to Muscat, Beirut, Kuwait and Damascus. Most Middle East governments, after all, were focused on growing their flag carriers into five star global service providers.
WHEN KOREAN AIR WAS founded in the early 1960s, South Korea's economy lagged behind much of the world. The country's per capita GNP was only $100 in 1963, according to figures kept by the US State Dept. But by the end of the 1960s, a government policy pushing the rapid production of exportable goods had the nation on an economic development path that has been one of the world's most ascendant, fueled in recent years by high-end electronic goods and automobiles. By 2004, South Korea had become the 11th largest economy in the world, with per capita GNP exceeding $14,000.
After more than two months of back-and-forth rhetoric that spurred speculation of widespread US airline industry consolidation, US Airways yesterday withdrew its $10.2 billion offer to acquire Delta Air Lines, saying it was "now clear" the official DL creditors' committee would not back the bid "in a timely or productive manner."
Airline industry is facing the daunting challenge of training 340,000 new pilots by 2024 to meet growth and account for retirements, according to Alteon President Sherry Carbary. Speaking to ATWOnline in Sydney, Carbary said Alteon is pioneering ICAO's Multi-Crew Pilot License concept, which aims to produce first officers in just 15 months. MPL is under review by regulators around the globe and Alteon has launched a beta training program for 16 pilots at its Brisbane facility.
American Airlines will increase daily summer service to Rome Fiumicino from Chicago O'Hare and New York JFK to year-round from Oct. 28, when it will operate from ORD four-times-weekly and JFK thrice-weekly aboard 767-300s. AA also will upgrade its ORD-Frankfurt service to a 777 from a 767-300 on April 10. Eurofly launched thrice-weekly Rome Fiumicino-Delhi service aboard an A330.
Assn. of Asia Pacific Airlines' 17 members released preliminary traffic results for 2006 indicating a 4.5% year-over-year rise in passenger numbers to 134 million. RPKs grew 3.9% and load factor reached a new high of 75.6%, up from 73.4% in 2005.
Virgin America announced that former US Secretary of Transportation and White House Chief of Staff Samuel Skinner will be vice chairman, which CEO Fred Reid said should "continue to demonstrate our compliance with the Department [of Transportation]'s citizenship requirements" ( ATWOnline, Jan. 19). The carrier also said that pending DOT certification, it intends to serve New York JFK, Washington Dulles, Los Angeles, San Diego and Las Vegas within nine months of launch. It is based in San Francisco.
ANA Group cited more frequencies, increased business travel and a bullish Japanese economy for a record nine-month net profit of ¥42.6 billion ($349.8 million) and record nine-month revenues of ¥1.13 trillion announced yesterday in Tokyo. Earnings represent a 42.5% improvement over the ¥29.9 billion earned in the first nine months of the previous fiscal year, while turnover rose 9.3% year-over-year. Profit for the fiscal third quarter ended Dec. 31, 2006, slipped 8.5% to ¥9.3 billion.
In a potentially damaging twist to the Qantas takeover saga, the carrier's board and members of the Airline Partners Australia consortium are under investigation for possible breaches of the country's insider trading laws, according to ABC Radio's "The World Today."
Thailand's Dept. of Civil Aviation postponed renewal of Suvarnabhumi International Airport's safety certification, which expired last week and originally was issued to comply with ICAO efforts to standardize international airport documentation. No Thai airport is currently certificated by DCA. Although lack of certification has no impact on operations at the new Bangkok airport, Thai politicians are trumpeting it in their campaign to discredit the deposed Thaksin government, which built the facility ( ATWOnline, Jan.
UPS reported 2006 net income of $4.2 billion, an 8.6% increase over a $3.87 billion profit in the prior year, on an 11.7% rise in revenue to $47.55 billion. Expenses grew 12.3% to $40.91 billion, leading to an operating profit of $6.64 billion, up 8%. "We anticipate another good year in our global small package business [in 2007] despite a slowing US economy," Vice Chairman and CFO Scott Davis said. "We're encouraged by the opportunities we see for our company around the globe."
US NTSB is investigating an uncontained engine failure aboard a Mesa Airlines CRJ200LR operating as America West Express on Jan. 25. Flight 2985 was en route from Denver to Phoenix, NTSB said. None of the 54 passengers and crewmembers on board was injured as the crew declared an emergency and returned to Denver. Investigators are searching for engine debris from the CF34-3B1. The aircraft was built in 1999.
Austrian Airlines took delivery of its fourth 777-200ER Tuesday, at which time it had no other orders or options placed with any aircraft manufacturer.
Bombardier announced yesterday that it "will continue to refine its CSeries business plan" in 2007 and will consider increased use of composite material for the fuselage and wing of the 110/130-seat aircraft as well as next-generation engine technology. The manufacturer previously had not committed publicly to fund the project this year ( ATWOnline, June 20, 2006).
Boeing reported 2006 net income of $2.22 billion, narrowed from $2.57 billion in the prior year, but pointed to a doubling of fourth-quarter net income to $969 million and a 33.2% surge in annual revenue for its Commercial Airplanes unit to $28.47 billion as evidence of "a very good year" and reason to boost its earnings guidance for 2007 and 2008.
After nearly five decades of strict adherence to a rule whose origin "still is a matter of debate," Administrator Marion Blakey yesterday said US FAA is ready to "seize the moment" and "close the book on Age 60."
Gol said its 2006 net income increased 10.9% year-over-year to BRL569.1 million ($266.2 million) on revenue of BRL3.8 billion. Net income for the fourth quarter was BRL92.7 million despite an estimated BRL150 million in lost revenue from "external effects," specifically the ATC disruptions that "negatively impacted load factors and yields." Fourth-quarter operating income was BRL112.3 million as traffic jumped 43.7% to 4.12 RPKs on a 56% lift in capacity to 6.07 billion ASKs. CASK decreased 11.1% in the quarter to BRL14.82 cents while nonfuel CASK lowered 5.7% to BRL9.36 cents.
Eleven private investor groups submitted expressions of interest to buy Alitalia, the Italian Economy Ministry announced late Monday. Among the interested parties, not including Air France KLM ( ATWOnline, Jan. 30), are Carlo De Benedetti's private equity fund Management & Capitali, Texas Pacific Group, AP Holding (led by Air One Chairman Carlo Toto), private equity fund MatlinPatterson Global Advisers, Italian banking group UniCredit SpA and Italian investor Paolo Alazraki.
BAA yesterday unveiled revised development plans for London Stansted that "will cost much less than originally anticipated, with environmental impacts much reduced too." The UK airports operator, controlled by Spain's Grupo Ferrovial, said opening cost in 2015 would be £1.4 billion ($2.74 billion) and overall cost would be £2.27 billion by the time the phased expansion is complete in 2030. This compares to the original estimate of £4 billion.
Korean Air plans to increase the number of destinations served in China from the current 20 to 32 by 2010. According to North American Marketing Director John Jackson, KE now regards China as a "second home market." Frequencies to current destinations will rise as well. "By the end of 2007 we'll be operating three daily shuttles to Beijing, Shanghai and Hong Kong," Jackson said. The increase comes following a June 2006 agreement for a gradual open skies policy between China and South Korea.
Slovak Airlines ceased scheduled operations Tuesday after Austrian Airlines Group, which holds 62% of the carrier, took possession of its fleet, citing the Slovakian government's failure to honor a legal agreement. "One Fokker 100 and one Boeing 737-300 are the property of AAG and we have decided to immediately return the aircraft in order to guarantee that Group property is secure," an AAG spokesperson told ATWOnline, adding that one 737-200 will be left with Slovak for charter flights.
Alitalia flew 2.86 billion RPKs in December, down 2.3% from the year-ago month. Capacity fell 2% to 4.14 billion ASKs and load factor dropped 0.2 point to 69%.
Delta Air Lines secured $2.5 billion in exit financing from six financial institutions as it plans to emerge from bankruptcy as a standalone carrier in the second quarter. JPMorgan, Lehman Brothers, Merrill Lynch, Goldman Sachs, UBS and Barclays Capital each pledged financing, DL said. The funds will be used to repay the carrier's $2.1 billion debtor-in-possession credit facilities, make payments required upon exit and increase its cash balance.
