Dubai-based Emirates came under concerted attack by rival airline CEOs at an industry forum held during the IATA AGM in Tokyo earlier this week. The extraordinary debate, which lasted more than an hour Monday, started when British Airways CEO Rod Eddington posed a question about whether airlines should or should not be government-owned or protected.
United Airlines appears to have avoided potentially crippling strike action after reaching an agreement in principle on a new contract with 20,000 ramp agents and customer contact employees represented by the International Assn. of Machinists.
AAR was selected by Brit Air, a subsidiary of Air France/KLM Group, to provide logistics support and component repair services for the carrier's fleet of 19 CRJ100s and 12 CRJ700s. The three-year program will be managed through AAR Aircraft Component Services-Amsterdam.
IATA DG and CEO Giovanni Bisignani continued to hammer the message that governments need to stop treating the airline industry as a cash cow. Speaking at the 61st IATA AGM in Tokyo Monday, Bisignani claimed that "in the US, taxes on a $200 ticket average 26%. This is a $15 billion ripoff." On top of this, he said, the industry "pays $5.6 billion a year for its own security, while our rail competitors are subsidized by $50 billion a year."
Alaska Airlines and its pilots have reached a tentative agreement on a new five-year contract that if ratified will supersede the two-year deal that took effect at the beginning of May after an arbitration decision ( ATWOnline, May 3). According to the carrier, the new contract includes a 20% reduction in both captain and first officer wages as well as work rule changes that will result in "significant productivity improvements." It also allows present employees to choose between the current pension plan and a defined contribution retirement benefit.
IATA reported a 7.5% increase in traffic for April compared to the year-ago month. Capacity also rose, climbing 7.6%, and load factor stood at 73.4%. Cargo traffic increased 5.3% on capacity growth of 6.8% during the month. For the four months ended April 30, RPKs jumped 8.7%, capacity climbed 7.6% and load factor stood at 73.6%. Cargo traffic for the four-month period rose 4.7% and capacity increased 7.5%. "Passenger traffic growth of 8.7% shows that demand for travel is strong. Slower cargo growth of 4.7% reflects a general slowdown in global economic activity.
Virgin Atlantic reported a pre-tax profit of £68 million ($124 million) for the 12 months ended Feb. 28 compared to a pre-tax profit of £20.9 million in the prior financial year that covered the 10 months ended Feb. 29, 2004 (Virgin changed its reporting period during the year to match that of its 49% shareholder Singapore Airlines). Turnover for the year rose 28.3% to £1.63 billion. Results include activities of Virgin Atlantic Airways and the group's holiday and cargo operations.
Frontier Airlines reported a net loss of $3.7 million for the fiscal fourth quarter ended March 31, which included on pre-tax basis a $2.4 million unrealized fuel derivative gain and a $0.4 million gain from the sale of spare parts and inventory. This compares to a net loss of $5.8 million in the year-ago period. "While we are disappointed with the losses in our fourth fiscal quarter, we are encouraged by some positive trends which have surfaced this quarter," President and CEO Jeff Potter said.
UK and New Zealand initialed a new aviation agreement on air services that removes almost all restrictions on flights between and beyond the two countries. It also applies state aid rules to ensure a level playing field for competition and liberalizes arrangements on a wide range of other issues, including marketing arrangements, ground handling and other operational matters. The previous agreement limited flights between the countries to seven per week for each side.
Onex Corp. will go ahead with its purchase of Boeing Commercial Airplanes' operations in Wichita, Kan., and Tulsa and McAlester, Okla., despite the fact that unionized workers at the Wichita plant rejected a new contract offer. Onex earlier this year reached agreement with Boeing to purchase the three facilities for $900 million in cash ( ATWOnline, Feb. 23). However, it had said it would not go forward with the purchase if it was unable to get a new contract accepted. According to media reports, the contract includes a 10% pay cut.
European Commission is seeking comments from potential opponents or supporters of the Lufthansa-Swiss merger, Reuters reported last week. The EC will decide by June 20 whether to approve the transaction without conditions, seek changes on competition grounds or launch a longer probe.
Alitalia posted a record net loss of €812 million ($1.02 billion) in 2004 against a net loss of €519.7 million in 2003, owing primarily to €308.6 million in restructuring charges.
A US District Court judge put off a decision until June 7 on whether United Airlines' International Assn. of Machinists-represented employees have the right to strike if the US Bankruptcy Court grants the company's motion to reject the group's current contract and impose a new one. The union believes it has the right to strike, while United has said it thinks a strike would be illegal. It still is negotiating with IAM, which represents its ramp and customer contact employees, and has until May 31 to reach a new deal with the group.
Second 777-200LR completed its first flight Tuesday, lasting 5 hr. The aircraft, which will be on display at the Paris Air Show in June, took off and landed at Paine Field in Everett, Wash.
United Airlines' LCC Ted, in order to meet "increasing customer demand," will launch new service to destinations in the US, the Caribbean and Mexico. According to United, the flights represent the transfer of several mainline routes to Ted as well as one route that is new to United. As announced in March, nine A320s are being converted from United to Ted configuration to provide the service. Under the expansion plan, from Sept. 7 Ted will launch twice-daily service between San Francisco and Ontario, Calif.
Assn. of Asia Pacific Airlines reported a 9.9% hike in passengers on international flights to 10.6 million in March. Traffic in terms of RPKs rose 8.1% on a slightly slower capacity increase of 7.2%, resulting in a 0.6-point increase in load factor to 71.7%. International freight traffic in terms of FTKs climbed 6.5%. However, capacity was up 9% and as a result the average freight load factor fell 1.5 points to 64.9%. AAPA represents 17 airlines.
The battle over opening up Dallas Love Field heated up yesterday as Texas Republican Congressmen Sam Johnson and Jeb Hensarling introduced legislation called the Right to Fly Act, which immediately would repeal the Wright Amendment. The Wright Amendment, which became law in 1979, restricts nonstop flights from Love Field to cities in Texas and seven other states in close proximity. It was designed to protect Dallas/Ft. Worth International Airport from competition from Love Field.
Air China has been beaten out in the battle for control (65%) of Shenzhen Airlines by two "little-known private companies," according to China Daily. Shenzhen-based Huirun Investment Co. and Beijing-based Bright Oceans Corp. outbid nearest rival Air China to take control of the South China-based carrier. The hammer fell at a price of 2.72 billion yuan ($328.5 million). Air China is the second-largest stakeholder in Shenzhen with 25% but said the price was too high.
Bmi selected SAS Component's Free2Fly program for its fleet of three A330s, 10 A321s, 11 A320s and four A319s on a long-term basis, the companies announced yesterday. Under the contract, SAS Component will buy and lease back bmi's stock of A330 rotables and set up branch stores at Manchester and Heathrow. The contract follows a decision by bmi to focus on core activities and a realization that SAS Component with its volume is in an ideal position to negotiate prices with OEMs.
Boeing and Japan Aircraft Development Corp., which represents three Japanese 787 structure partners--Fuji Heavy Industries, Kawasaki Heavy Industries and Mitsubishi Heavy Industries--have signed formal contracts detailing their work for the 787.
Iberia told shareholders at its AGM that it intends to pay a "significant" extraordinary dividend out of the capital gains from the sale of its stake in Amadeus, which should bring the airline around €600 million ($750.6 million) ( ATWOnline, April 15). For 2004, Iberia will pay a dividend of 5 euro cents a share as it increased consolidated net income by nearly 51% to €220 million in 2004 from €146 million in 2003.
MAIR Holdings, parent of Mesaba Airlines and Big Sky Airlines, reported a net loss of $1.7 million for the fiscal fourth quarter ended March 31, improved from a net loss of $3.6 million in the prior-year period. "The weather created some operational challenges during January and February, but in the face of those challenges both Mesaba and Big Sky remained focused on executing disciplined processes to achieve these operating results," MAIR President and CEO Paul Foley said.
Darwin Airline increased its capital from CHF4 million ($3.2 million) to CHF10 million earlier this month. The carrier currently operates three daily flights from its Lugano base to Geneva, as well as service to London, Berne and Rome.
