"It's a bit strange when Regionals start investing in bankrupt [legacy] airlines," said James Parker, MD of Raymond James & Associates. Air Wisconsin and Republic Airways agreed to invest more than $100 million apiece in US Airways, while Mesa Air Group agreed to invest $30 million in Delta Air Lines and assume its leases on some 30 328JETs previously operated by Atlantic Coast Airlines. Speaking at the RAA conference last week in Cincinnati, Parker said even more changes are in store for the industry.
Virgin Blue warned of another challenging year ahead after announcing a 13.2% slide in earnings amid escalating competition from archrival Qantas, high fuel prices and slowing travel demand. CEO Brett Godfrey said the LCC has entered 2005-06 "behind the eight ball" after returning a net profit of A$138.1 million ($104.8 million) for the 12 months to March 31 compared to A$159 million for the previous year. While the result was consistent with market expectations, it represented the first profit fall in Virgin Blue's five-year history in the Australian market.
SAS Scandinavian Airlines President and CEO Joergen Lindegaard said he has no doubt that the spinoff of the multinational airline into four units--SAS Danmark, SAS Sverige, SAS Braathens and SAS International--last October was the right decision and in some parts there is already success to report. "On the operational side, it is important that we have now more speed to change and adapt new strategies. With the four airlines, everyone is more flexible," Lindegaard told ATWOnline in Stockholm.
The Irish government last week ended years of dithering and decided in principle to sell a majority shareholding in state-owned Aer Lingus and proceed with a second terminal at Dublin Airport.
While Boeing's 787 does away with pneumatic bleed air as a power source for many aircraft functions, the technology of electromechanical actuation has not advanced sufficiently to take the place of hydraulic power on transport aircraft. This was the conclusion of several system experts speaking on ATW's "More Electric Aircraft" webcast earlier this week.
British Airways CEO Rod Eddington watered down Airbus Chief Commercial Officer John Leahy's suggestion that it is "not a matter of if but of when" BA will order the A380.
Air France President and CEO Jean Cyril-Spinetta yesterday said he has not received any information from Airbus about a possible delay in delivery of the airline's first A380, which is slated to arrive in April 2007. "I'm waiting about a decision from Airbus to know precisely what the situation is. It is not up us," he said. Singapore Airlines already has confirmed reports that its first A380 will not arrive in May 2006 as originally expected ( ATWOnline, May 5).
Air-India struck back at flawed media leaks related to its recent order for up to 50 777s and 787s ( ATWOnline, April 27). The airline told this website in a statement that it understands copies of selected and incomplete internal reports on fleet acquisition plans are being circulated in the media and other quarters by vested interests intent on derailing the Boeing order. "This is being done to malign Air-India's management and board, mislead the public and derail Air-India's plans to acquire aircraft," the carrier said.
Boosted by unexpectedly high gains from the merger of the two carriers, Air France-KLM Group--consolidating AF Group over 12 months and KLM Group over 11 months--reported net income of €351 million ($442.9 million) for the fiscal year ended March 31, up 20.2% over net income of €292 million in the prior financial year. Operating income before aircraft disposals also improved, increasing 20% to €489 million from €405 million. "The first year of the merger between AF and KLM has been a complete success," Chairman Jean-Cyril Spinetta said.
As was expected, US Airways Group and America West Holdings Corp. yesterday announced an agreement to merge and create what they described as the "first full-service nationwide airline with the consumer-friendly pricing structure of a low-fare carrier," which will operate under the US Airways brand. Annual synergies of $600 million are anticipated from the merger, resulting from route restructuring, revenue synergies and cost savings. Even with oil prices at $50 per barrel, it will be profitable, the two airlines said.
Delta Air Lines senior management "will pull out all the stops" to prevent a Chapter 11 bankruptcy filing in the fourth quarter of 2005 or first quarter of 2006, JP Morgan analyst Jamie Baker asserted in a report released yesterday. "We mistakenly underestimated management's resolve in avoiding a filing last year," Baker stated as he predicted that "a bankruptcy filing may be in Delta's future, but not this year."
Airbus announced the launch of its modular approach to aircraft maintenance data for the A380, an extension of the manufacturer's existing advanced technical data consultation tool called AirN@v. It will consist of five modules covering maintenance, engineering, repair, maintenance planning and workshops.
US Transportation Security Administration has revised its ban on the transport of lighters on flights operating to, from and within the US. Effective immediately, new, unfilled lighters can be packed in checked luggage on commercial flights; however, all lighters still are prohibited in the passenger cabin. In April, TSA banned all lighters from the secure areas of airports and onboard aircraft ( ATWOnline, April 18).
Boeing selected B/E Aerospace to provide its next-generation passenger oxygen system for the 787. According to B/E, the 787 will be the first aircraft equipped with a system using its advanced Pulse Oxygen technology, which delivers oxygen more efficiently than traditional passenger systems and reduces overall system weight and fuel burn. The first Pulse Oxygen system deliveries are scheduled for late 2007. Meanwhile, Boeing delivered the fourth electronic flight bag-equipped 777-300ER to Emirates yesterday.
RASSA Holdings Ltd. said it intends to commercialize its [email protected] Web-based passenger services system offering flight information, fares management, seat inventory control, reservations, sales, ticketing, check-in, sales distribution and management reports. RASSA said it presently is implementing [email protected] at four airlines in Latin America and the US and is sponsored by Lockheed Martin.
US and Ethiopia signed a full open skies agreement that will permit US and Ethiopian carriers to operate air services between the two countries without restriction.
America West Holdings Corp. stockholders during their annual meeting voted to elect the four directors nominated by the board--Matthew Hart, Robert Miller, Doug Parker and John Tierney--to three-year terms expiring at the 2008 annual meeting.
SR Technics Switzerland signed a three-year component services contract with CSA Czech Airlines to support CSA's four A320s. Under the new agreement, SR Technics will provide a consignment stock of components at Prague for the exclusive use of CSA. In addition, CSA will have access to SR Technics' main stock of Airbus components at Zurich. Also, SR Technics and Garuda Indonesia signed an MOU with the intention of launching a full support program for that carrier's six A330s.
Rockwell Collins said its Tailwind 550 satellite television system received an STC for installation on 767-200s/-300s/-400s. The installation, which was performed by Jet Airways, allows the aircraft to receive direct broadcast satellite TV channels in the US, Europe and the Middle East. Separately, Rockwell Collins announced that its Multi-mode Receiver with GPS landing system functionality was delivered last week on a 737-800.
Lufthansa Systems said Air Bosna signed a contract for hosting services. Following migration to the new system at the end of June, core processes such as sales, ticketing and passenger processing will be automated.
Iberia took delivery of a new A321, bringing its fleet of the type to 12. The airline said the 194-seat aircraft will be used on routes within Spain and Europe.
Farelogix appointed David Cerino as its chief marketing and product officer. Farelogix provides independent fare and multisource distribution technology to the global travel industry. Prior to joining Farelogix, Cerino spent four years with Orbitz as VP and GM and also served in senior positions with Amadeus.
