Hawaiian Airlines says that while demand in its core Hawaii-West Coast markets remains strong, a surge in capacity from its competitors on these routes is hurting yields. Although Hawaiian managed to increase its profit in the third quarter and boost operating margins, load factor fell 1.9 percentage points year-on-year to 83.3%, passenger unit revenue was down 5.7% and yield dropped 3.6%. Hawaiian CEO Mark Dunkerley says these declines were worse than expected mainly due to the hike in overall capacity on key routes to the West Coast.
The U.S. regional airline industry’s difficulties have already impacted $600 million of Embraer’s loan guarantees, and the value of this exposure likely will grow once negotiations to restructure American Eagle Airlines’ ERJ fleet are concluded.
Medellin, Colombia-based, low-cost carrier VivaColombia nearly doubled passenger traffic at the city’s international airport in the half-year since it began operations. In September, 400,000 passengers traveled through Medellin Jose Maria Cordova de Rio Negro International Airport, compared with 245,000 in September the year before, and all of this is directly attributed to VivaColombia, Maria Hoyos Arismendi, commercial director of airport operator Airplan, tells Aviation Week.
Operators of Rolls-Royce Trent 900-powered Airbus A380s have been instructed to inspect and, if necessary, replace parts of seals around the low-pressure turbine (LPT) following damage to an engine caused by vibration.
The EU’s claim that the U.S. failed to remove illegal subsidies to Boeing has gone to a World Trade Organization (WTO) arbitration panel. The U.S. last month said it has complied with the WTO’s ruling in DS 353, the case the EU brought against the U.S., and removed certain U.S. Defense Department and NASA subsidies to Boeing. The EU claimed, however, that the U.S. plan did not comply with the WTO’s ruling and it appealed to the WTO’s Dispute Settlement Body (DSB) (Aviation Week, Sept. 25). It also demanded $12 billion in annual sanctions.
United Technologies Corp. (UTC) expects commercial aircraft engine spares orders to rebound following recent declines at its Pratt & Whitney and Hamilton Sundstrand units.
Cabin interiors manufacturer BE Aerospace is predicting double-digit revenue growth for several years to come as the company benefits from a fleet renewal effort by the world’s airlines. This demand for new cabins, particularly for a greater number of “new-buy” widebodies, has prompted the U.S. manufacturer to improve its 2012 guidance some 17 cents since this time last year to $2.82 per diluted share—and a 26% growth on 2011—and issue a 2013 outlook of $3.38 per diluted share, a 20% increase on what is already a record year for BE Aerospace.
HNA Group has become the first Chinese aviation company to invest in a European carrier with the purchase of a 48% stake in France’s Aigle Azur Transports Aeriens, which operates 12 Airbus narrowbodies. Although no financial details are being disclosed, HNA says it will hold two of five seats on a newly created executive committee and provide senior staff, including a deputy CFO. HNA also is providing two unspecified widebody aircraft to operate services.
UPS expects to return to double-digit operating margins in the fourth quarter after an expectedly slow third quarter saw net profits dip more than 50% year-on-year to $469 million.
Fairbanks, Alaska-based Everts Air Cargo is one of the first two customers for the MD-80 family passenger-to-freighter conversions performed by Aeronautical Engineers (AEI), the Miami, Fla.-based aircraft conversion company says. The other launch company also is U.S.-based, but AEI is not yet disclosing its identity. AEI has an order book for 15 of the converted aircraft in the first year of production, which is expected to begin before the year’s end, Convey says.
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FedEx could see a double-digit increase in capacity at its Memphis hub after Nov. 1, when new FAA wake turbulence recategorization (RECAT) rules go into effect. The new rules are the result of 10 years of study by a “WakeNET USA” working group that includes industry, the FAA, Eurocontrol, NASA and others. Following Memphis, the FAA says RECAT will go into effect at other airports in the U.S. between 2013 and 2014.
Airbus, which officially opened the A350 final assembly line (FAL) on Tuesday alongside a two-day supplier conference, is trying to reassure suppliers and customers that its widebody program remains on track for first flight in the summer of 2013. “Our message is, the program is on plan and the upcoming major milestones will be on plan, too,” Airbus Chief Operating Officer Guenther Butschek said during an inauguration ceremony for the new FAL.
Taiwan’s EVA Air next week expects to take delivery of its first Airbus A321. The delivery will take place Oct. 31 at Airbus’s facility in Hamburg, says an EVA spokeswoman. EVA Chairman James Jeng told Aviation Week last November that EVA had secured leases on 14 A321s, and that the first three would be arriving in 2012. All of EVA’s A321s will have CFM International powerplants and will come from leasing companies, the carrier’s spokeswoman says. EVA has signed no agreements to buy A321s, she adds.
India’s government says it is unrealistic to expect grounded Kingfisher Airlines to fly again in the near future after the country’s aviation regulator suspended the carrier’s operating license for failing to produce a credible financial and revival plan.
GOL Linhas Aereas Inteligentes has no further plans to expand its international network this year beyond two new routes to the U.S. The two new flights, scheduled to start by the end of the year, will operate between Rio de Janeiro and Sao Paulo to Miami and Orlando, with a stop in Santo Domingo, Dominican Republic.
American Airlines’ pilots union is rejecting the carrier’s plan to operate Airbus A319s on a separate, lower, pay scale, instead demanding that “all our narrowbody pilots get industry-standard pay.” The Allied Pilots Association (APA) also wants a shorter-term contract than the six-year term offered by American, arguing that the longer term would disadvantage the work group compared with pilots at rival airlines.
With the wing of the Airbus A350 already under close scrutiny before the first flying example has been put together, key suppliers are focusing more than ever on a steady production ramp-up and delivering to specification.
Aegean Airlines has launched another attempt to buy domestic rival Olympic Airways in an agreement valued at €72 million ($94 million). Under the accord, Aegean will purchase 100% of Olympic from owner Marfin Investment Group (MIG), paying for the deal in installments. Both airlines’ brands will be retained, although Olympic will become a subsidiary of Aegean.
Air France CEO Alexandre de Juniac says new partner Air Berlin will have to decide if it will remain a member of the Oneworld alliance. De Juniac said in an interview with German daily FAZ that the two carriers plan to get to know each other better in the coming months. But if they move closer, Air Berlin “would have to decide to stay in Oneworld or to change over to Air France-KLM’s SkyTeam” alliance.
