Who would have guessed that buying shares of Delta Air Lines would be the equivalent of shorting Exxon-Mobil? An unusual correlation has emerged in the stock market this year: When the price of oil rises, the share prices of airlines fall, and when the price of oil falls, airline share prices go up.
The union representing Air Canada’s customer service and sales staff will resume contract talks with the airline May 24 with authority from its members to strike next month should mediated talks fail. The strike vote “strengthens demands at the bargaining table for a fair and equitable new collective agreement,” says the employee group’s representative, the Canadian Auto Workers-TCA.
Bombardier’s annual 20-year forecast presents a mixed picture with continued gains for commercial aircraft, but a still struggling business aviation market. The forecast, released last week, calls for delivery of 13,100 aircraft in the 20- to 149-seat niches, valued at $693 billion through 2030. This is up from last year’s predictions of 12,800 aircraft, Bombardier notes, citing better economic indicators and stronger interest in new technology
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Aircraft paint services provider Air Works India says it sees an uptick in demand from regional aircraft in Eastern Europe, particularly from Turkey and the former Soviet states. Managing Director Vivek Gour says, "There's untapped demand lying over there ... The widebodies, we’ll still take them to the U.K. But the regional operators don’t like flying their aircraft 3 hr. to get painted—the economics don’t work for them." Eastern Europe is one of the areas Air Works is eyeing for a medium-sized business acquisition this year.
JetBlue Airways is requesting government approval to launch nonstop service from New York John F. Kennedy International Airport to La Romana International Airport, its fifth destination in the Dominican Republic. If approved, the Airbus A320 service will operate on Wednesday and Saturday, starting Nov. 16.
Thai Airways International is going ahead with plans to establish a new, full-service, short-haul carrier, with intent to start operations early next year. The plan was approved by the airline’s board on May 20. The new airline, which will be based in Bangkok and will operate under a new sub-brand, will be a business unit of Thai Airways and will operate on domestic and short-haul international routes using 11 aircraft, Thai says. The aim is to differentiate the carrier in the marketplace with a new image and pricing model, adds Thai.
Rep. Bill Shuster (R-Pa.) is withdrawing a controversial amendment to the FAA reauthorization bill, saying it might have bogged down conference negotiations on the current authorization that expires May 31. Shuster billed his amendment as an attempt to improve FAA rules and increase safety, but opponents charged that it would have made it harder for the FAA to construct safety rules, such as those being put in place in response to a Colgan Air crash in 2009.
Believing that the market has stabilized and the airline itself is profitable, Island Air of Honolulu is ready to take its four-aircraft fleet to six by adding one or two more De Havilland Dash-8-100s or -200s. President Lesley Kaneshiro says the airline also is talking about some new aircraft options with ATR, Fokker, Saab and SuperJet. She says the family-owned airline wanted to meet small-community needs, and now that it feels those have been met, it can look to other markets "where jets fly."
American Airlines Chairman and CEO Gerard Arpey is defending the carrier’s ongoing reorganization plan, dubbed Flight Plan 2020, as his management comes under increasing pressure from Wall Street to revise its strategic goals. Arpey, standing by previous attempts to defend his actions, told attendees at the company’s annual shareholder meeting that American, “in contrast to our industry peers,” has improved its balance sheet while maintaining its employee pension plans.
LAN Airlines’ order of five Boeing 767-300ERs doubles Boeing’s count for the civilian version of the twin-engine jet this year and helped boost the company’s total net orders through May 17 to 127. Boeing now has taken 13 767 orders in 2011, 10 more than in all of 2010. But four of this year’s orders were for USAF tanker versions. LAN ordered three 767s earlier in the year.
SkyWest expects a 20-30% reduction in its 50-seater regional jet fleet after contracts expire, says Chip Childs, president and chief operating officer of SkyWest subsidiary SkyWest Airlines. The bulk of those 50-seater contracts last until 2020, however, and the carrier still thinks the purported demise of the 50-seater has been overstated. One reason it will not be as dramatic as some industry observers believe, Childs maintains, is that operators will be able to negotiate new lower-cost leases after the existing ones expire.
Transportation Security Administration (TSA) chief John Pistole says the next decade of security screening will focus on operational assessments “to stay ahead of tomorrow’s threats.”
A May 17 article on frequency rights to Brazil should have said Delta Air Lines plans to launch a nonstop between its Hartsfield-Jackson Atlanta International Airport hub and Brigadeiro Eduardo Gomes International Airport in Manaus. An incorrect city-pair was given.
Air France-KLM expects to improve its operating results further this year after the airline group managed a €1.4 billion ($2 billion) profit swing in fiscal 2010-2011. As the group seeks to reduce gearing further, the airline decided not to pay a dividend this year despite the better financial performance. Management plans to ask shareholders at their July 7 meeting to change the financial year-end to Dec. 31 to be better aligned with other airlines. Air France-KLM’s fiscal year currently ends on March 31.
SOL Lineas Aereas, a regional operator based in Argentina, has confirmed that one of its Saab 340’s crashed late May 18 after declaring an emergency and that all 22 people on board are dead. Flight 5428 was on the last leg of a service to Comodoro Rivadavia that started in Cordoba and had already stopped at Mendoza and Neuquen. At 8:50, about 42 min. into the 110-min flight, SOL says it received the last communication from the aircraft declaring an emergency.
Singapore-based airline group Tiger Airways is moving into the Indonesian market by buying a 33% stake in Mandala Airlines, a low-cost carrier that has been grounded since January due to financial problems. Tiger announced plans for the investment on May 19.
MAG, formerly Cincinnati Machine, is broadening its global reach in the market for metal cutting and composites processing by acquiring Forest Line Industries Group, a French specialist in composite wing and wing box applications. MAG Europe GmbH of Goppingen, Germany, has bought 100% of Forest Line Group shares. Jean Bertrand Prot will continue as president and CEO of the French company and will join the MAG executive board in Erlanger, Ky.
