Lufthansa Group reported a net loss of €116 million ($148.5 million) for the first quarter ended March 31 compared to a profit of €62 million in the year-ago period. The 2004 results, however, benefited from a €292 million book profit from the sale of LH's stake in Amadeus, and the company noted that its operating result improved from a deficit of €116 million last year to a negative €26 million in the 2005 quarter.
Cathay Pacific Airways flew 5.04 billion RPKs in April, up 12.3% over the year-ago period. Capacity climbed 11.8% to 6.51 billion ASKs and load factor rose 0.4 point to 77.4%. For the four months ended April 30, RPKs increased 16.4% to 20.55 billion, ASKs grew 12.6% to 26.27 billion and load factor gained 2.5 points to 78.2%.
Seattle-based operating lessor Boullioun Aviation Services was sold by German banking giant WestLB to Aviation Capital Group, a subsidiary of Pacific LifeCorp., parent of Pacific Life Insurance Co. Price was not disclosed. "Included in the agreement are 102 owned or managed commercial aircraft, 11 Airbus airplanes currently on order, employees, and other assets of Boullioun Aviation Services," Pacific LifeCorp said in a statement.
United Airlines' International Assn. of Machinists-represented employees overwhelmingly authorized a strike if, as expected, US Bankruptcy Judge Eugene Wedoff allows the company to reject current labor contracts. The airline's flight attendants also have authorized strike action if contract changes are imposed. According to IAM, the union has the right to strike if the carrier changes the terms of the contract currently in place. However, United has claimed that strikes would be illegal.
Fares continued to fall, oil prices continued to rise. That sums up the experience for the 11 largest US passenger airlines in the first quarter ended March 31. In aggregate they posted a net loss of $3.2 billion, more than double the $1.54 billion shed in the year-ago period. Losses were not spread evenly, however, as two airlines, Delta and United, spilled $2 out of every $3 in red ink, much of it owing to special charges related to their respective restructurings.
Air-India's recent order for up to 50 777s and 787s has erupted into a bitter war of words with the airline threatening to sue Airbus, which is calling for an anticorruption inquiry into the deal. According to a Times of India report, an Air-India spokesperson said the carrier is seeking its own legal recourse and has "written to the ministry of civil aviation and sought action against Airbus." The manufacturer claims that tender protocols were changed midway through to give Boeing an edge, a charge hotly denied by the airline.
Canadian government said Monday it will adopt a new rent policy for federally owned airports that "is expected to result in close to C$8 billion" ($6.5 billion) in rent relief for Canada's airport authorities over the course of their leases (60 years). The relief affects 21 Canadian facilities including all of the country's largest airports.
Iberia reported a €16.1 million ($20.7 million) net loss for the first quarter ended March 31, up significantly from a net loss of €10.1 million in the year-ago period. Operating loss for the three months also widened, growing to €31.2 million from €26.4 million in the 2004 first quarter. Revenue during the quarter climbed 5% to €1.18 billion, of which 80% or €947.8 million was attributed to passenger and cargo revenues, which rose 3.2% year-over-year mainly owing to an increase in traffic.
Delta Air Lines, which posted an industry-high $1.1 billion net loss in the first quarter, warned that it expects to report a significant net loss for the remaining nine months of 2005 and warned that it may not have enough cash to meet its liquidity needs for the period. In a filing with the Securities and Exchange Commission, Delta said it does not expect to achieve the full $5 billion in targeted benefits under its transformation plan until the end of 2006. In addition, it is faced with record high fuel prices, low yields and other cost pressures.
Brazilian low-fare carrier Gol reported a 131.1 million reais ($53.1 million) net income for the first quarter ended March 31, up 44.6% over net income of R$90.7 million in the year-ago period, as its strong growth helped offset high fuel prices. "The addition of three aircraft, 88 new flight frequencies and two new destinations--Joao Pessoa and Petrolina--allowed Gol to increase its market share, reinforcing our 'virtous cycle,' which focuses on maintaining low costs, allowing us to offer the lowest fares," commented CEO Constantino de Oliveira Jr.
United Airlines' bid to terminate and replace its pension plans was approved by a US Bankruptcy Court judge late Monday. According to the Associated Press, United will save roughly $645 million a year with the move, which is part of the $2 billion in annual savings it repeatedly has said it needs to emerge from Chapter 11.
UPS plans to build five new regional freight hubs at US airports in Ontario, Calif.; Rockford, Ill.; Dallas; Philadelphia, and Columbia, S.C. When completed and brought online next year, the new facilities will support a main freight hub to be constructed in Louisville and will help form the backbone of an expansive air network for the movement of heavy freight for customers of UPS Supply Chain. The company said it anticipates spending roughly $24 million to build and equip the five centers and that initially they will create more than 200 new jobs.
Lufthansa and the UFO union representing 14,000 cabin staff reached a four-year pay deal that includes a no-layoff guarantee through Dec. 31, 2008, in return for increased flexibility and productivity, the airline said in a statement yesterday. The agreement also includes a pay freeze until the end of 2006. However, from Jan. 1, 2007, salaries will be raised by at least 2.5% but by no more than the average wage settlement in western Germany. Staff will receive an "inflationary compensation" from Jan. 1, 2008.
Despite the fact that Airbus's current plan for the A350 is for a larger airplane than the 787, GE plans to use the same basic core/fan GEnx powerplant on both aircraft, said Tom Brisken, GEnx GM for GE Transportation. The GEnx-72A is planned to produce 72,000 lb. of thrust for the A350, at the high end of the 55,000-72,000-lb. range expected for the 787 family. While the GEnx currently is seen to have thrust growth capability to 75,000 lb., that estimate may move upward after the first examples are run next March, Brisken said.
Boeing and Japan Airlines finalized previously announced orders for 30 787s and 30 737-800s, which together are valued at $5.3 billion at list prices. JAL in December selected the 787 to replace its 767s and A300-600s and in February chose the 737NG to replace its fleet of 68 short-haul aircraft, which currently comprises 737-400s, MD-81s, MD-90s and MD-87s ( ATWOnline, Feb. 7).
SkyEurope Airlines of Slovakia placed an order for up to 32 new 737-700s. The agreement reached with Boeing and GECAS includes 16 firm orders to be delivered in 2006 and 2007, with options on another 16 aircraft for delivery in 2008-09. Twelve of the 16 firm orders will be financed by GECAS. The deal is valued at $880 million and could go up to $1.7 billion if all options are exercised.
Hawaiian Airlines' exit from bankruptcy appears to be all but assured now that its pilots have ratified a new three-year contract. The pilots were the last of the carrier's organized workgroups to approve a new contract, a condition for the company's successful exit from Chapter 11. Trustee Joshua Gotbaum noted that "as with its other new union contracts and in contrast to those being negotiated elsewhere in the airline industry, the pilots' new contract includes pay increases, not pay cuts or overall cost cuts.
Air France-KLM Group flew 15 billion RPKs in April, up 4.8% over the year-ago period. Capacity climbed 5.2% to 18.94 billion ASKs and load factor declined 0.3 point to 79.2%.
Japan Airlines added the Aerosim FMS Trainer to its 737-400 pilot training program. The dual-screen trainer will be used in conjunction with simulated hardware already in use at JAL.
Despite escalating fuel prices, Japan Airlines Corp. announced a return to profit for the fiscal year ended March 31 as it posted net income of ¥30 billion ($284.2 million), a dramatic reversal from last year's net loss of ¥88 billion.
Qantas has widened its fleet restructuring plans to include the 787 and A350. CFO Peter Gregg told ATWOnline that the airline is "evaluating 777-300/-200 and 787-3/-9 and A340-600/A350 combinations" to replace its 747-400s/-300s, 767s and A330s. Qantas is expected to place an order for 60 aircraft in the second half of 2005, but Gregg watered down speculation that an order may come out of a May board meeting. "We will only be updating the board," he told this website.
In a move that reflects the continuing restructuring occurring in the aviation MRO aftermarket, SAS Group yesterday announced that it is "in the process of evaluating the future structure and strategy of SAS Component," including "negotiations with an international consortium of a possible partnership or acquisition." Conclusions from the evaluation and talks are likely to be drawn before the end of June. A subsidiary of SAS Technical Services, SAS Component has teamed with EADS Sogerma in the Free 2Fly program offering airlines total component support.
Driven by strong performance across all of its divisions, Airbus parent EADS reported net income of €328 million ($420.7 million) for the first quarter ended March 31, up significantly over net income of €49 million in the prior-year period. Revenue climbed 16% to €7.01 billion and EBIT more than tripled to €657 million from €198 million in the 2004 quarter. "The first quarter result confirms our 2005 targets for EBIT and revenue growth with a solid cash position," CEOs Philippe Camus and Rainer Hertrich said in a statement.
Gol reported its traffic results for April. Domestically, the carrier flew 680.1 million RPKs during the month, up 56.5% over the year-ago period. Capacity increased 34.3% to 903.1 million ASKs and load factor gained 10.7 points to 75.3%. Internationally, Gol flew 37.4 million RPKs on capacity of 56 million ASKs, which produced a load factor of 66.8%.
Republic Airways Holdings wrapped up the purchase of Shuttle America for $1 million and the assumption of just under $1 million in debt ( ATWOnline, April 25). The carrier is an affiliate of Wexford Capital, the majority shareholder of Republic Holdings, parent company of Republic Airlines and Chautauqua Airlines. Shuttle America, which operates a fleet of 11 Saab 340s, will begin Embraer 170 operations in June for United Express and plans to end all turboprop flying by year end.
