Estonian Air managed to reduce losses in the first six months of the year, but increasing competition and the situation in Ukraine is prompting the need to implement additional restructuring measures, warned CEO Jan Palmér. Net loss in the first half improved 18% compared to the year-ago period to €5 million (U.S. $6.6 million) and the airline has continued to perform in line with the restructuring plan, “but nevertheless we expected to see more positive results,” Palmér said. Total revenue declined 8% year-over-year to €32.9 million.
A battle between the Independent Pilots Association (IPA) and cargo carrier UPS has landed both in trouble with the U.S. National Transportation Safety Board (NTSB). According to a release issued by the NTSB earlier today, both the IPA, which represents UPS pilots, and the carrier have been removed as parties to the Flight 1354 investigation, which is to be concluded in a final public hearing on Sept. 9.
Singapore-based lessor BOC Aviation has placed an order for 80 Boeing 737-family aircraft to refresh the company’s current narrowbody fleet and also help meet global demand from network and low-cost carriers (LCCs). The order comprises 30 Boeing 737-800s scheduled for delivery between 2016 and 2018, and 50 737-8s from the MAX range for delivery between 2019 and 2021. BOC CEO Robert Martin tells Aviation Week that while the lessor has not yet inked any contracts with customers for the new orders, talks have begun and it has “good ideas where we will put some.”
Cathay Pacific, continuing its North American market resurgence, is adding destinations and frequencies to take advantage of strong demand. The latest addition is a four-times-weekly nonstop route from Hong Kong to Boston, set to launch in May 2015. The carrier also increased capacity to its Los Angeles gateway in June and to Chicago earlier this month, as well as launching service to Newark in March. New Boeing 777-300ER deliveries have been aiding the growth in these markets.
Lufthansa has started preparing for the next pilot strike, which could happen later this week. The airline, in collaboration with alliance partners and affiliate carriers, is working on an emergency schedule that would ensure uninterrupted service on key routes. Raimund Mueller, head of Lufthansa’s flight operations for Munich, said the airline does not expect pilots to launch a massive strike affecting the entire network. The airline is working on the assumption that it will be given 24 hours’ notice and only parts of the operation will be affected.
After years of financial struggles, Air Canada believes it has turned the corner and is positioned to be consistently profitable going forward. “Momentum is heading towards long-term sustainable profitability,” Air Canada VP-global sales Duncan Bureau told the Boyd Group International Aviation Forecast Summit in Las Vegas Monday. He cited the Montreal-based carrier’s 2014 second-quarter net profit of C$223 million (U.S. $203.6 million), noting it was “the most profitable [June] quarter in the airline’s 75-year history.”
LAS VEGAS—The price of crude oil has remained roughly steady during the last year and increasing supplies means it is just as likely to fall as rise in the near-term, a petroleum industry analyst said. The futures price for West Texas Intermediate has held steady at about $90 per barrel for the last year, Ben Brockwell, director of data at petroleum-industry consultancy OPIS, said at the Boyd International Aviation Summit here. But the day-to-day trading price—not the futures price—has been much lower, trading between $60-$70 per barrel.
You can now register online for Aviation Week events. Go to www.aviationweek.com/conferences or contact: Lydia Janow, 212-904-3225 or 800-240-7645 ext. 5 (U.S. and Canada only) Sept. 23-24—Brazing Symposium, Sheraton Wild Horse Pass Resort & Spa, Phoenix, Arizona Oct. 7-9—MRO Europe, Madrid Spain Nov. 4-6—MRO Asia, Singapore EXPO Convention and Exhibition Centre, Singapore
To list an event, send information in calendar format to Donna Thomas at [email protected] . (Bold type indicates new calendar listing.) Sept. 7-10—2014 ACI-NA Annual Conference & Exhibition, Atlanta, Georgia, http://annual.aci-na.org/ Sept. 10-11—TRAM Aerospoace Conference, Chicago, Illinois, www.tram-conference.com
SAS has secured financing for four Airbus A330-300Es, which are part of its planned widebody fleet renewal and growth. The Scandinavian airline group signed of a sale-and-leaseback agreement with the Chinese bank Bocomm for the four aircraft. This is SAS’s first large agreement with a Chinese counterpart. “Bocomm will become a very good partner for SAS,” SAS Group Executive Vice President and CFO, Göran Jansson, said.
Bombardier has replaced its head of marketing for commercial aircraft, including the slow-selling and still-grounded CSeries airliner, as it continues a corporate restructuring and downsizing. Ross Mitchell, previously in both business and commercial aircraft sales at Bombardier, has replaced vice president of commercial aircraft marketing Philippe Poutissou with immediate effect.
Karsten Benz, chief commercial officer at Austrian Airlines, is leaving his post to return to parent Lufthansa. He will take over the newly created position of chief infrastructure officer for the group, combining functions that were previously split between the airline and the parent organization. Benz will report to Karl-Ulrich Garnadt, CEO of the airline division and member of the group executive board.
The trend of soaring global airline profits is threatening to leave Africa behind, and a study suggests that the lack of liberalized air service agreements between African nations is playing a major role in suppressing the region’s markets.
Malaysia-based AirAsia is confident it can reverse the decline in economic performance of its off-shore franchises that is dragging down the group’s profitability.
Ryanair is stepping up direct competition with Aer Lingus, in which it still holds a near 30% stake, and will start operating a multiple daily return from Dublin to Brussels Airport (BRU). Aer Lingus is currently the only operator on the route.
In an attempt to ensure United Airlines and Southwest Airlines eventually can fly the same routes, Houston has asked the U.S. government to seek a new bilateral agreement with Mexico by the end of 2014. The filing with the U.S. Department of Transportation comes as United and Southwest jockey for route authorities between Houston and large Mexican cities. The current agreement between the two countries allows only two carriers to serve most routes, with several exceptions, mainly to Mexican beach destinations.
Pegasus Airlines expects to continue its high-passenger growth both in the international and domestic markets, but the profitability of Turkey’s largest privately-owned airline has deteriorated and the first-half through June was loss-making. The aggressive network expansion and increased competition of rival Turkish Airlines at Pegasus’s main hub of Istanbul’s Sabiha Gokcen airport put pressure on Pegasus’s fares.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) is reviewing another letter from Delta Air Lines calling for reform of the Export-Import Bank of the U.S. (Ex-Im). In the latest salvo between Delta and Boeing, the Atlanta-based carrier refutes point-by-point claims Boeing made in a letter it sent to Hensarling earlier this month. Andrea Newman, Delta senior vice president-government affairs, seeks to counter “the inaccurate and incomplete statements in that letter.”
Budget carrier Norwegian has opened a new long-haul base at London Gatwick Airport, supporting its Boeing 787 routes to Los Angeles, New York and Fort Lauderdale. Norwegian is already well-established at Gatwick. It opened a short-haul base at the airport in 2013, which has since expanded to 90 pilots and 200 cabin crew, and this has now been joined by a long-haul base.
The International Civil Aviation Organization (ICAO) is the aviation component of the United Nations primarily responsible for setting international safety standards that all countries agree to follow. As U.S. Ambassador to ICAO, I witnessed tremendous advances in aviation safety by many ICAO member countries and improvements in the standards and recommended practices that form the basis of ICAO’s safety framework.
