American Airlines parent AMR Corp., taking advantage of the strong run-up in its stock price since mid-September, announced Friday the pricing of a public offering of 13 million newly issued shares of common stock at $17.25 per share. The offering, set to take place Nov. 23, will raise gross proceeds of $224 million if all shares are taken up, ATWOnline calculated. It includes an overallotment option of 1.95 million shares. UBS Investment Bank is acting as the sole underwriter for the offering.
Negotiators for the EU and US, after five days of talks in Washington, achieved a tentative air services agreement that will provide airlines from the US and EU member states open access to each other's markets "with freedom of pricing and unlimited rights to fly beyond the EU and US to points in third countries," according to a joint statement (see text below). If approved by both sides, the agreement could take effect with the 2006 IATA winter season, which traditionally begins in late October.
As widely tipped, Emirates ordered 42 777s and took options on a further 20 Sunday at the 9th Dubai International Air Show with a $9.7 billion punch. The order is for 24 777-300ERs, 10 777-200LRs and eight 777-200Fs. The aircraft will help Emirates increase frequencies and launch new services to the US West Coast and South America. The deal did not have any buyback provision for the airline's fleet of A340-500s, which will continue to be deployed on ultralong routes such as Dubai-New York and Dubai-Sydney.
"Delegations representing the European Union and the United States met from Nov. 14-18 in Washington, D.C., to continue negotiations on a comprehensive first-step air transport agreement.
JetBlue Airways will launch service between Boston and Washington Dulles Jan. 17 with six roundtrips during the week and five on weekends. It also will begin nonstop service from Boston to Austin (Jan. 19), Nassau (Feb. 2 ) and Richmond (March 31).
Southwest Airlines board of directors declared a regular quarterly dividend of $.0045 per share to shareholders of record at the close of business Dec. 8, payable Jan. 5. It is the carrier's 117th consecutive quarterly dividend.
A340-600 high gross weight version made its first flight Nov. 18, initiating a six-month certification program for the Rolls-Royce Trent 500-powered aircraft prior to delivery to first customer Qatar Airways in summer 2006. Airbus said the 380-ton jet will have a range of up to 7,900 nm. (14,600 km.), approximately 250 nm. farther than the standard A340-600 with a payload of 380 passengers in a three-class configuration.
US Senate Wednesday approved a pension relief bill with an amendment that permits airlines to make up pension funding shortfalls over 20 years while other industries would receive seven years. In a statment, Northwest Airlines called passage of the bill with the amendment "a positive development for employees of airlines and taxpayers.
Southwest Airlines named Mike Van de Ven as its new executive VP-aircraft operations to replace Jim Wimberly, who will retire at year end. Van de Ven is a 12-year veteran of the airline and a member of its Executive Planning Committee.
European Commission VP for Transport Jacques Barrot yesterday unveiled the EC's Sesar program for updating Europe's air traffic management infrastructure. The project is expected run through 2020 and consists of three phases. The definition phase (2005-07) was launched yesterday and "sets out the road map" for the new organization, including technologies to be deployed and methods of organization, according to the EC. It is budgeted at €60 million ($70 million).
Lufthansa Flight Training will provide a comprehensive training package for Martinair with the introduction of the 747-400 Freighter to the latter's fleet. Through 2007, 42 Martinair pilots will earn their type ratings from LFT for the 747-400F. Value of the deal is more than €2 million ($2.3 million). Separately, LFT announced that from Dec. 1, Florian Hamm will become chairman of its management board succeeding Dieter Harms, who is retiring after more than four decades at Lufthansa Group.
Delta Shuttle is introducing nine 142-seat MD-88s on its East Coast Shuttle between New York LaGuardia, Boston Logan and Reagan Washington National, replacing 120-seat 737s. The aircraft, which currently are flying in a two-class configuration, will be refitted to carry 134 in a roomier single-class arrangement. At the same time, Delta Connection carrier Comair announced it now is offering bi-hourly service between New York JFK and Logan and will begin "frequent" service between Boston and Baltimore-Washington International Dec. 1.
Air Berlin carried 1.4 million passengers in October, up 11.3% over October 2004. Year-to-date boardings were up 14.6% to 11.7 million. Turnover for the period was estimated at €1.09 billion ($1.3 billion), surpassing the year-end total for 2004 of €1.05 billion. MD Joachim Hunold continues to anticipate a positive result for 2005 despite high fuel costs.
Emirates launched its second daily New York JFK-Dubai flight Wednesday using an A340-500. Cathay Pacific will launch thrice-weekly freighter service from Hong Kong to Atlanta and Dallas Saturday.
Mesa Air Group reported net income of $15.0 million for the fiscal fourth quarter ended Sept. 30, a 40% increase over earnings of $10.7 million for the same period in 2004. An 18.9% rise in operating revenue to $309.1 million, attributed to growth in the regional jet fleet from 129 to 144 units, helped to fuel profits, the airline said. Mesa also completed permanent financing of 15 CRJ900s through a sale/leaseback transaction during the quarter, removing $400 million in debt.
Moscow Domodedovo plans to invest $500 million over the next five years to continue its dynamic growth and become a major transfer point between East and West. "Our goal is to have all quality carriers which serve Moscow here at Domodedovo," Director-Business Development Daniel Burkard told ATWOnline. The addition of Thai Airways on Nov. 1 means that the airport is served by 15 foreign airlines, up from just one in 2001.
Virgin Blue, coming off a quarter in which profits fell 33.1% ( ATWOnline, Nov. 17), will raise fares in an effort to capture a bigger share of the business class market. According to Australian Financial Review, the carrier said it lost more leisure traffic to Qantas LCC Jetstar than anticipated and would be offering sufficient product enhancements to justify the price hikes.
Qatar Airways yesterday denied reports that it had entered into a marketing agreement with Israel's Arkia Airlines ( ATWOnline, Nov. 17). A senior QR official said, "We deny this. . .we have not been in any discussions with this company and no agreement has been signed," Reuters reported. The reported agreement, which would have been the first between Israeli and Gulf Arab carriers, would allow Arkia passengers to fly from Tel Aviv to Amman before connecting on Qatar Airways to destinations in Asia and Africa via Doha.
US Senate Commerce Committee yesterday approved legislation requiring FAA to repeal the Age 60 Rule in favor of permitting pilots to work until they are 65. Copilots would have to be below age 60. The bill must be passed by the entire Senate as well as the House and signed by the President before it becomes law. It was welcomed by the Southwest Airline Pilots' Assn. but criticized by the Allied Pilots Assn. representing pilots at American Airlines. FAA consistently has refused to amend the rule and it is an issue that still divides pilot groups.
Sibir Airlines is working toward a goal of having an all-Western fleet by 2008. It currently operates seven 737-500s and five A310-200s as well as 30 Tu-154Ms and nine Il-86s. Next year it hopes to operate 15-20 Western-made aircraft, possibly including some 737-300s. A sixth A310 could join the fleet by year end. It intends to phase out two relatively new Tu-204s that have not lived up to efficiency expectations. Sibir, the second-largest Russian airline, holds a 14% share of the Russian aviation market, rising to 20% for domestic operations.
Iran Air said earlier this week that it has been forced to ground five of its 16 A300s/A310s because US sanctions prevent it from securing spare parts for the GE engines powering the aircraft, Reuters reported, quoting Iran Air spokesperson Malek Barzegar-Sedigh. Unable to buy new airplanes or spares from the West, the airline has supplemented its fleet with aircraft from former Soviet Union countries.
Ryanair announced yesterday that it will implement a "commonsense" change in its policy limiting the number of blind passengers it will carry on a flight following the public outcry it encountered after removing nine visually impaired passengers from a flight to Italy last month ( ATWOnline, Oct. 17). In the immediate aftermath of that event, the airline said it would not alter its policy of restricting to four the number of disabled passengers per flight.
Copa Airlines of Panama took delivery of its first Embraer 190, which will be operated in a two-class configuration with 94 seats. Copa holds firm orders on a dozen 190s with options on an additional 18. They are scheduled to be delivered through 2008.
Ten largest US passenger airlines in aggregate lost $3.24 billion in the third quarter ended Sept. 30, a threefold increase over a loss of $1.04 billion in the third period of 2004. However, current-period results include more than $2.5 billion in bankruptcy-related charges at Northwest, Delta and United.
