Bankrupt Delta Air Lines announced a deal with Merrill Lynch providing the carrier with a letter of credit giving it access to up to $300 million in cash held in reserve by its Visa/MasterCard processor, which is entitled to hold back $450 million-$850 million under the terms of an agreement lasting through October 2007. "Even with this vote of support from the financial community for our business plan, we expect 2006 to be a very challenging year," Delta Executive VP and CFO Ed Bastian said.
SAS Group on Friday said it "completely rejects" the Swedish Ministry of Finance's proposal to place an environmental tax on air travel ( ATWOnline, Nov. 29).
Frontier Airlines reversed course in its fiscal third quarter ended Dec. 31, posting a loss of $10.3 million for the period after a profitable September quarter in which it earned $6.9 million. At that time, however, the Denver-based carrier warned that it would lose money in the fall period ( ATWOnline, Oct. 31, 2005). The deficit was slightly improved from a year-ago loss of $11.1 million.
Macau Asia Express, a new budget carrier formed and funded by Air Macau (51%) and ST-CNAC (49%), a joint venture between China National Aviation Co. (36%) and Shun Tak Holdings (64%), was established last week. Initial funding is $30 million for the airline, which will adopt "a highly competitive cost model" and launch service in the fourth quarter of this year on routes to the Chinese mainland and Asia.
Embraer officials said there will not be any delays in aircraft production after strong winds ripped roofs off two warehouses at its facility in San Jose dos Campos last week. Wind gusts hit the company's headquarters Jan. 24, injuring 17 employees and damaging hangars where parts are manufactured and ERJ-145s are assembled. One employee remained hospitalized Friday.
Airbus said All Nippon Airways ordered three A320s last year. The Airbus website showed orders for three A320s from an unidentified customer received on Dec. 1. The airframer also said ANA will lease two A320s. All aircraft will be powered by CFM56-5B4/Ps and will support expansion to destinations in China.
LAN Peru will introduce four-times-weekly Sao Paulo-Los Angeles service from March 22 aboard 767s. Finnair is adding three weekly flights from Helsinki to St Petersburg from May, bringing weekly frequencies to 10.
BAE Systems Regional Aircraft said it had "done well" in 2005 as it secured new business worth more than $320 million despite a highly competitive regional aircraft marketplace. The company concluded lease transactions in its BAe 146/Avro RJ and ATP portfolios for 68 aircraft, business worth just under $230 million. A further 28 aircraft were the subject of other financial transactions. The Jetstream 32 and 41 portfolios resulted in $12 million in business.
SAS Scandinavian Airlines and Alitalia each began returning to normal operations yesterday following several days of strikes. An SAS spokesperson told ATWOnline that the airline cancelled 500 flights between Monday and Wednesday when 200 pilots from SAS Denmark staged a strike and 80 pilots from SAS Braathens in Norway called in sick. Although the Norway group remained sick on Thursday, SAS was operating most of its schedule; through mid-afternoon it had cancelled 26 flights in Denmark and 47 in Norway.
WestJet is investing up to $30 million to develop a reservation system and other new technology that will enable it to begin codeshare operations with other carriers as early as 2007, CEO Clive Beddoe said yesterday at the Raymond James Growth Airline Conference in New York. "We see it as a growth opportunity for us," Beddoe told ATWOnline. Air Canada "has abandoned" a large numbers of carriers because of its relationship with Star Alliance, he added. Several airlines, including legacy carriers and LCCs, have expressed interest in a codeshare partnership with WestJet.
Air Canada intends to challenge Qantas between Los Angeles and Sydney next year, operating fifth freedom services as part of a daily Toronto-Sydney service that will commence during the first half of 2007 when its new 777-300ERs and dash 200LRs begin arriving. Air Canada said it will use authority contained in the recent open skies agreement between the US and Canada and will apply to Canadian and Australian authorities for permission to operate the route.
Assn. of Asia Pacific Airlines members carried 128 million passengers in 2005, an increase of 5% over the previous year. Passenger traffic rose 5.1%, capacity expanded 4.6% and load factor gained 0.4 point to 73.3%. International freight traffic grew 3.3% while capacity rose 4.9%, resulting in a 1-point decline in load factor to 66.4%.
Korean Air concluded a challenging FY05 with net earnings of KRW202.3 billion ($205.6 million), a 61.1% plunge from its 2004 profit of KRW519.5 billion.
Alaska Air Group Chairman and CEO Bill Ayer credited "sacrifices by our employees, strong revenue performance and the benefits of our fuel hedging program" for the company's improved performance in 2005, which saw the parent of Alaska Airlines and Horizon Air narrow its net loss 61.4% to $5.9 million from a 2004 deficit of $15.3 million.
Midwest Air Group, parent of Midwest Airlines and its Regional affiliate Skyway Airlines, reported a loss of $64.9 million for 2005, widened from $43.1 million in 2004 on special items and higher fuel expense, but said its loss for fourth quarter narrowed to $13.9 million from $19.4 million last year. "The competitive environment and high fuel prices continued to challenge us in the fourth quarter, as they have throughout a difficult year," Chairman and CEO Timothy Hoeksema stated. Annual operating revenues rose 25.9% to $523 million with passenger revenue up 29.8% to $459.7 million.
Delta Air Lines will launch Raleigh/Durham-Los Angeles service daily except Saturday from June 8 aboard 737-800s. It will start daily service from Boston to Nashville and Savannah from April 3. Flights will be operated by Delta Connection carrier Comair aboard 50-seat CRJ200s. Iberia will launch a daily La Coruna-London Heathrow service from Feb. 1 aboard 150-seat A320s. JetBlue Airways announced it is seeking permission to start twice-daily flights from New York JFK to Bermuda in May.
World Airways and its pilots, represented by the International Brotherhood of Teamsters, are continuing to negotiate in advance of the Jan. 28 conclusion of the 30-day cooling-off period imposed by the National Mediation Board ( ATWOnline, Jan. 11). At that time, the 430 pilots may go on strike while the airline can impose a new contract. Pilots are barred from interrupting flights carried out on behalf of the US military, World's largest customer, but IBT said it could "make no promises" to other customers.
AirTran Airways announced the promotion of Director-Corporate Finance Arne Haak to VP-finance and treasurer and Director-Engineering Kirk Thornburg to VP-maintenance and engineering. Gulf Air named Rajeev Nambiar GM for India operations.
Ryanair yesterday said it will begin charging for checked baggage but that a 9% across-the-board fare reduction will offset the new fee for many customers who avail themselves of the ability to check in for their flights online. Although the carrier long has talked about charging passengers to check luggage, FlyBE beat it to the punch last month ( ATWOnline, Dec. 20).
Air New Zealand will suspend its twice-weekly nonstop Christchurch-Los Angeles service during the off season from April 3 to Oct. 28. Emirates will launch four-times-weekly service to Copenhagen from Oct. 3 aboard two-class A330-200s, increasing to daily on Oct. 29. It is the carrier's first passenger service to Scandinavia.
Cintra SA, Mexico's airline holding company, is changing its name to Consorcio Aeromexico, according to media repots. Cintra sold Mexicana and its Click LCC to hotel company Grupo Posadas last month ( ATWOnline, Dec. 20) but opted to retain AeroMexico.
Air Europa finalized its launch order for 10 A350-800s plus two options. The Spanish carrier became the first airline to commit to the aircraft when it signed an MOU with Airbus at the end of 2004 ( ATWOnline, Dec. 22, 2004). It also will lease three A350s from GECAS. The A350-800s, scheduled for delivery between 2010 and 2012, will be used for transatlantic service, be powered by GEnx-1As and seat 253 passengers in a two-class configuration.
Alitalia suffered a sixth day of strikes Wednesday as unrest continued over its restructuring and the sale of the majority of ground services arm AZ Services to Fintecna. Union leaders met with government ministers yesterday afternoon and presented a document claiming Alitalia is uncompetitive, does not possess a strategic industrial plan and is under poor management, according to La Stampa.
Mesa Air Group posted a $13 million net profit in the first fiscal quarter ending Dec. 31, a 6.4% decline from $13.9 million earned in the year-ago quarter. The drop occurred despite a 22.2% rise in operating revenue to $323.6 million, which the carrier attributed to the addition of 13 regional jets to its fleet during calendar 2005. Expenses climbed 24.6% to $294.8 million, driven by a 56.2% hike in fuel costs to $104.8 million. Operating income rose just 1.8% to $28.8 million.
Three unions representing American Airlines employees--the Allied Pilots Assn., the Assn. of Professional Flight Attendants and the Transport Workers Union--each filed presidential grievances yesterday protesting the cash bonuses that around 1,000 members of management are set to receive in April under the carrier's Performance Unite Plan, which links the payments to stock performance. The unions contend the bonuses are a violation of their collective bargaining agreements and also occurred despite that fact that American parent AMR Corp. lost $861 million last year.
