Continental Airlines repeated earlier warnings that it expects to post "a significant loss for 2005 due to record high fuel prices" in spite of improving unit revenue trends and savings from pay and benefit reductions estimated at $300 million this year. The information was contained in a letter to shareholders included in a government filing last week. The company earlier estimated that mainline passenger RASM rose 4%-5% in August compared to the year-ago period following a 4.6% year-over-year increase in July. It has no fuel hedges in place.
United Airlines flew 10.4 billion RPMs in August, down 4.4% compared to the year-ago period, as a 12% decline in domestic traffic offset double-digit gains in Latin America and the Pacific. Capacity dropped 5.6% to 12.3 billion ASMs owing to a 14% decrease in domestic ASMs. The domestic market represented 60% of UA capacity in the month, down from 66% in August 2004. System load factor was a record 84.8%, up 1 point. EasyJet carried 2.9 million passengers in August, up 18% on the year-ago period. Load factor slipped 0.2 point to 88.4%.
Skyways Aviation arranged the sale of three Saab 340As to Nordic Solutions AB of Sweden, which will operate them on a newly established Nordic Solutions Air Services AOC in Lithuania. All three will be converted to freighters.
The airline industry's legal challenge to the European Commission's new passenger rights legislation requiring cash compensation for delayed and cancelled flights suffered a major defeat yesterday when the Advocate General to the European Court of Justice rejected in their entirety the arguments that were put forth by IATA and the European Low Fare Airline Assn. The case had been referred to the European Court of Justice by the UK High Court, where the original challenge was heard.
FedEx Express announced a new MD-11F flight offering what it says is the first overnight express service between India and China five times per week. The flight is part of a new eastbound around-the-world route connecting Europe, India, China and Japan with the Memphis hub. SAS Cargo is boosting capacity between Chicago and Copenhagen by 130 tons per week from Sept. 22. Service will offered twice weekly via a blocked-space agreement using a 747-400F operated by Singapore Airlines Cargo.
SkyWest Inc., parent of SkyWest Airlines, completed the purchase of Delta Air Lines' wholly owned Regional subsidiary Atlantic Southeast Airlines ( ATWOnline, Aug. 16).
European Commission reiterated its goal of creating a Europewide blacklist of unsafe airlines and said it "hopes for a political agreement on the common criteria, the EU blacklist, and the EU-wide ban by the end of the year." France, Belgium and Switzerland recently introduced blacklists of banned airlines on a website open to public consultation, while the UK already had such a list. However, not all European countries feel compelled to follow suit. "It is necessary to go beyond national blacklists," the EC said following a meeting of its Aviation Safety Committee Wednesday.
US Secretary of Transportation Norman Mineta late Wednesday reportedly floated the idea that the Bush Administration is mulling a temporary lifting of the 7.5% domestic ticket tax to help airlines offset the cost of fuel. According to JP Morgan analyst Jamie Baker, US carriers would save $4 billion on an annual basis. "This could potentially alter the bankruptcy probability currently ascribed to Delta and Northwest while moving AMR and Continental close to breakeven at near-current fuel prices," Baker said in a report.
Italian Civil Aviation Authority ENAC suspended Tuninter's authority to operate to Italy after the continuing investigation into the Aug. 6 crash of one of the airline's ATR 72s revealed that the turboprop had been fitted with a fuel gauge for the smaller ATR 42. "If it is proved that the fuel gauge was not the one prescribed for this plane, that means to say that the company has not respected quality norms," ENAC Chairman Vito Riggio said. The Tunisian aircraft went down in the Mediterranean after both engines quit, killing 16 people ( ATWOnline, Aug. 9).
Mercator will provide passenger revenue accounting for Virgin Nigeria under an outsourcing contract announced by the Dubai-based IT division of Emirates Group. The Lagos-based airline is 49% owned by Virgin Atlantic Airways with 51% held by 20 Nigerian institutional investors.
Germanwings will add new routes from its Stuttgart base to Dusseldorf, Milan Malpensa, Paris CDG, Bologna, Verona and Prague as well as a third daily frequency to Hamburg on Oct. 30, bringing to 24 the number of destinations it serves from the airport. It currently bases five A319s at Stuttgart and said it will add a sixth and use the fleet more efficiently, making the service additions possible and making it the biggest carrier at the airport.
Amadeus was selected yesterday to provide the Common IT Platform for passenger service systems for the Star Alliance. The multiyear selection process was managed and decided by Lufthansa and United Airlines, the carriers that will be the first Star members to migrate to Amadeus's next-generation Altea platform, which also has been chosen by a number of non-Star airlines.
UK and India officially signed a bilateral air services treaty replacing the one dating to 1951. The bilateral formalizes new traffic rights that will allow UK airlines to operate 56 services per week between London Heathrow and Delhi or Mumbai, 14 weekly services from the UK to Bangalore and to Chennai and seven weekly services to each or any other destination in India by the end of next year. Indian airlines can operate a similar number of services on routes between Heathrow and Delhi or Mumbai and may provide unlimited service to other UK destinations.
Lufthansa Cargo plans to raise prices on some routes out of Germany. The increases start Oct. 1 and mostly will be 3%-5%, though the hike on some routes may be higher. The carrier raised fuel surcharges 11% to 50 euro cents per kilo Monday.
British Airways is increasing the fuel surcharge on its long-haul flights from £24 to £30 per sector (£60 per roundtrip) from Sept. 12. Fuel surcharges on short-haul flights will remain unchanged at £8 per sector (£16 return). Earlier this week, Virgin Atlantic Airways announced it is raising its fuel surcharge on tickets sold in the UK to £30 per flight.
Northwest Airlines and the Aircraft Mechanics Fraternal Assn. were set to resume federally mediated negotiations yesterday, but earlier in the week the carrier warned the union that it may begin hiring permanent replacement workers as early as Sept. 13 if employees do not return or it does not reach a new agreement with the union. Northwest has been operating with a mix of supervisory staff, temporary replacements and third-party providers carrying on the work done by 4,000 striking AMFA mechanics and aircraft cleaners. In a letter to AMFA head O. V.
Bombardier opened a new spare parts distribution center adjacent to Chicago O'Hare that will consolidate facilities in Detroit and Wichita and streamline the delivery of spares to customers in North America. The 238,000-sq.-ft. center is being operated in partnership with Caterpillar Logistics Services. "They have the infrastructure, knowledge and systems we need to run our business," said Bombardier VP-Parts and Logistics Desmond Bell at an opening ceremony this week in Chicago. A similar Caterpillar-run facility is scheduled to open later this year in Frankfurt.
United Airlines yesterday filed its Plan of Reorganization and Disclosure Statement, beginning the final leg of a journey through the bankruptcy process that began in December 2002. The company set Feb. 1, 2006, as its target for exiting Chapter 11. "United has made tremendous progress in our restructuring to improve performance across the board, in costs, revenue, operations and service to our customers. Today, we are more flexible, more efficient and more resilient," Chairman, President and CEO Glenn Tilton said in a statement.
ANA customers by the end of September will be able to use a single e-ticket when traveling on ANA and connecting to flights of any of the 11 Star partner airlines. Currently, ANA e-tickets are valid for connections on nine Star carriers: Air Canada, Air New Zealand, Asiana, Austrian Airlines, bmi, LOT Polish Airlines, Singapore Airlines, Thai Airways and United Airlines. Lufthansa and Varig will be added by month's end.
Delta Air Lines will cut capacity at Cincinnati-Northern Kentucky International Airport, its second-largest hub, by 26% effective Dec. 1 and will sell 11 767-200s to ABX Air. Additionally, it will drop nonstop service operated by Delta Connection carriers in nine Cincinnati markets in favor of connecting service via Atlanta. In a letter to staff, the company said the reductions will result in around 1,000 job eliminations at the hub among Delta and Comair staff.
Air France-KLM Group said August passenger traffic increased 8.1% compared to the year-ago period to 17.3 billion RPKS on 5.1% higher capacity of 20.5 billion ASKs. Load factor rose 2.4 points to 84.1%. The group carried more than 6 million passengers in the month, up 6.9% over August 2004. The European network remained "particularly buoyant," with traffic increasing 7.4% on a 1.5% rise in capacity and load factor improving 4 points to 72.8%. Cargo traffic climbed 3.2% on a 7% hike in capacity, pushing load factor down 2.2 points to 60.9%.
LOT Polish Airlines ordered seven 787-8s and took options on two and "hold purchase rights" on five more. Boeing valued the firm aircraft at around $910 million at list prices. They will be powered by Rolls-Royce Trent 1000s and deliveries begin in 2008. The 787s will replace LOT's six 767-300s and two 767-200s. Airbus had offered the A350 in competition. LOT said the evaluation process was supported by Sabre Airline Solutions while the final results were scrutinized by Ernst &Young. The supervisory board's decision in favor of the Boeing product was unanimous.
Wizz Air finalized a previously announced contract for 12 A319s/A320s plus 12 options ( ATWOnline, July 14). Aircraft will be powered by IAE V2500s. Deliveries will begin in the summer of 2007.
The European Commission published its long-awaited rules on aid to airlines starting up new routes from regional airports, generally defined as those having an annual passenger volume of under 5 million. The new guidelines will, according to the EC, guarantee "equal treatment for public and private airports and ensure that airlines receiving aid are not unduly favored." Transport Commissioner Jacques Barrot said the Commission "wishes to encourage the development of regional airports and personal mobility."
US Dept. of Transportation yesterday issued a Notice of Proposed Rulemaking to require US airlines and non-US carriers operating to and from the US to provide medical oxygen "without charge" to passengers who need it. The proposed rule would apply to passenger carriers operating at least one aircraft with more than 60 seats.
