Frontier Airlines lost $32.8 million in the second quarter, excluding taxes and special items, but parent company Republic Airways says it expects to complete by the end of September the Frontier restructuring it considers essential for the U.S. low-cost carrier’s survival. Including special items, Frontier lost $39.2 million pre-tax. The restructuring plan calls for reducing Frontier’s costs by $120 million a year, and the company says it has reached agreements and made changes to bring it to 75% of its goal, or $90 million.
Sao Paulo-based GOL Linhas Aereas Inteligentes says its Varig subsidiary entered into a stock purchase agreement on Aug. 1 with the controlling shareholders of Rio de Janeiro-based Webjet Linhas Aereas Inteligentes to acquire 100% of the stock. Last month GOL announced that Varig had reached a memorandum of understanding to acquire Webjet for BRL96 million ($61.3 million), and the carrier said yesterday that the stock purchase agreement was signed under the same terms. The deal to acquire its low-cost rival remains subject to governmental approval.
Air traffic in Germany could be severely disrupted on Thursday now that air traffic controller union GdF has called for its members to engage in a countrywide, half-day strike. Industrial action could still be avoided, however, after ATC provider Deutsche Flugsicherung (DFS) said the planned strike was illegal in its view and would therefore be brought in front of a German court today.
Germany’s air traffic controllers have overwhelmingly voted in favor of industrial action with close to 96% of Gewerkschaft der Flugsicherung (GdF) union members approving the plan.
Another senior American Airlines executive is promoting a relaxation of foreign ownership rules, with President Tom Horton telling The Times of London that he believes restrictions will be lifted “in my working lifetime” and that the carrier’s long-standing relationship with British Airways and its current incarnation as International Aviation Group “could form the basis of a cross-border merger between our airlines.” These comments expand on a recent statement by American Chairman and CEO Gerard Arpey calling for an end to foreign ownership restrictions (Aviation Daily, M
Tiger Airways Australia appears to be close to being allowed to resume operations, a month after the carrier was grounded by Australian regulators. Australia’s Civil Aviation Safety Authority (CASA) has asked the federal court to delay until Aug. 3 a hearing that could further extend the Tiger grounding. This will give Tiger more time to convince CASA that no such extension is warranted.
Ultra Electronics may complete several more acquisitions before the end of the year as the company looks to strengthen its technology positioning in potential growth markets, CEO Rakesh Sharma says. With its low debt level of £10.1 million ($16.6 million), Sharma says the company has the “firepower” to spend slightly more than £100 million on deals. He expects several to be finished before 2012.
A prominent Wall Street aerospace analyst says it is likely that Embraer will develop a new jet that pushes up into the lower end of the narrowbody market now dominated by Airbus and Boeing.
The public bickering between US Airways and its pilots union continues in a lawsuit brought by the carrier claiming the US Airline Pilots Association is behind a “go-slow" action. The allegation, which has been denied by USAPA, says pilots are receiving anonymous text messages—some of them threatening if pilots do not cooperate—encouraging slow taxiing and other delay tactics to ensure the airline’s operations miss a key arrival target set by the U.S. Transportation Department.
Delta Air Lines says it will process tax refunds for the passengers entitled to them because of the suspension of several federal air travel-related taxes, acceding to requests that the airlines do so instead of the IRS. it is not yet clear whether other airlines will follow suit. U.S. airlines have been resisting the request from the IRS, with the Air Transport Association (ATA) noting the IRS was responsible for refunds when a similar lapse in tax collections occurred in 1996 and 1997.
LIAT’s services to Grenada continue to be disrupted as a dispute with workers over the company’s obligation to pay for 1-hr. lunch breaks continues. The carrier says the complaint could “impose strains” on an airline already burdened by financial hardships, while workers say they may be forced to reconsider a deal that called for a one-third reduction in their claim.
Air India’s entry into Star Alliance has been delayed indefinitely after the airline alliance put on hold the Indian flag carrier’s application for a membership. The final decision on suspending Air India’s integration into the 27-airline alliance was made by Star’s executive board at a meeting July 31 in Frankfurt. A seemingly baffled Air India says it fulfilled all conditions of membership, but that is not how Star saw it.
The U.S. National Transportation Safety Board has sent a team headed by Bob Benzon to assist the Guyana government’s investigation of the July 30 crash of Caribbean Airlines Flight 523, which broke into two after skidding off the runway at Georgetown’s Cheddi Jagan International Airport.
German infrastructure and construction group Hochtief has received at least four bids for its airport division Hochtief Concessions. Consortia near Fraport—Global Infrastructure Partners (GIP), French infrastructure group Vinci and HNA Group (Hainan Airlines—are understood to have submitted proposals at the end of last week. The companies decline comment.
Boeing 787 launch customer All Nippon Airways is deferring four 787 deliveries that were due in the next 20 months, thanks to the slow recovery of travel demand. ANA is scheduled to receive its first 787 in September and was slated to take delivery of a total of 14 in its fiscal year through March 31, 2012, and another 10 in the following fiscal year.
Kuwait intends to sell a 35% stake in Kuwait Airways, and low-fare rival Jazeera Airways is a potential bidder, industry sources say. Letters of interest are due Aug. 25. The Kuwait Investment Authority would take a 20% stake, and 40% could be publicly traded. The airline has been unprofitable for several years, and this move follows the shutdown in March of the only other Kuwaiti airline, Wataniya Airways.
Policy differences over the Essential Air Service (EAS) program and National Mediation Board (NMB) union election procedures pushed the U.S. House and the Senate into overtime wrangling over a compromise on the 21st extension of FAA's reauthorization Aug. 1, the last day before the congressional August recess. As Republicans and Democrats sparred over the larger issue of debt ceiling initiatives at press time yesterday, no compromise on the FAA bill had been reached.
Hartsfield-Jackson Atlanta Airport named Balram Bheodari interim deputy general manager and Richard Duncan to replace Bheodari as interim assistant general manager for operations, maintenance and security.
Non-engineering members of the Society of Professional Engineering Employees in Aerospace (Speea) rejected a contract offer from Spirit AeroSystems by a 96.5% margin on July 28. The employees are in the Wichita Technical and Professional Unit of Speea and had been offered a 9.5-year contract with a pay schedule that would vary depending on the company’s profitability. Voting was light but gave the most decisive contract defeat in Speea’s history with Spirit. Of 2,300 eligible voters, 684 voted to reject the contract; only 25 voted to accept it.
Transportation Security Administrator John Pistole is advising manufacturers of explosives detection equipment to continue work on bomb detection technology that can speed passengers through airport checkpoints. Asked last week after a speech to The Aspen Institute if TSA has the capability to detect a surgically implanted bomb on a traveler, he said it “depends.” Pistole believes in layered security to aid in detection, including canines and trace detectors.
