British Airways is again contemplating anti-trust immunity with American following the recently successful application by Skyteam carriers and the relaxation of access to London Heathrow airport. CEO Willie Walsh, talking exclusively to The DAILY after a Monday analyst meeting in New York, said an application makes sense “in light of the current regulatory environment.” He would not comment, however, on a possible timeline for such an application and noted that evidence of approval “would have to be strong” before a final decision is made.
Although the date has been set for the sunset of Mesa Air Group subsidiary Air Midwest, decisions are still pending about Air Midwest’s 20 Beech 1900 aircraft. The 19-seat aircraft are a standby for essential air service markets like those served by Air Midwest. The market for the aircraft, however, has been tight, so EAS operators will be closely watching Mesa as it weighs its next moves.
American altered a credit agreement last week arranged by Citigroup and JPMorgan to remove certain cash-flow covenants. The previous covenant included a minimum ratio of cash flow to fixed charges, but these have been waived until June 30. The loan consists of an undrawn $225 million revolving credit facility maturing June 17, 2009, and a fully drawn $440 million secured term loan facility maturing Dec. 17 2010.
Ryanair, which already uses its Web site to sell a large range of products and services, has added another one. On May 15, in partnership with Web Reservations International, it launched Ryanairvillas.com to let property owners pay to promote their holiday rentals to the low-cost airline’s vast audience of online consumers.
South Korean carrier Jeju Air will begin flying internationally on July 11, linking Hiroshima in Japan with its base on the southern holiday island Jeju. The service will make it one of only three South Korean airlines flying abroad, the others being Asiana and Korean Air. But there will soon be more. Other airlines are starting operations, some saying they will be budget carriers, and the government is dropping restrictions that have prevented new airlines from flying internationally.
Continental will pay departing executive VP and CFO Jeff Misner nearly $3 million on his retirement from the company Aug. 31, the airline disclosed in a May 16 filing with securities regulators. In exchange, Misner agreed to forgo competing against the company for 12 months from his retirement date, and to surrender the outstanding profit-based restricted stock unit awards from 2006, 2007 and 2008.
US Airways, Northwest and United appear most at risk for Chapter 11 bankruptcy filings out of the 10 major U.S. carriers, according to new research by JPMorgan. At current fuel prices, “legacy bankruptcies and/or merge-at-all-costs attempts are a question of when and not if,” say JP Morgan analysts. However, they also note that with mergers offering capital-raising potential, and low Chapter 11 incentives, “a sprint to the courthouse may be avoided if airlines raise sufficient capital now.”
The furor over the U.S. Transportation Dept.’s plan to impose slot auctions at Newark and New York Kennedy continues unabated, with airlines and airline groups stoking the fire and hinting at legal action.
During talks on the second-stage transatlantic open skies agreement last week, the lead EU negotiator once again called for the U.S. to loosen rules on ownership and control, even as his U.S. counterpart earlier in the week had offered to loosen nationality restrictions on air service rather than ownership rules.
Airbus in July plans to start a new round of A320 winglet flight tests, this time with Aviation Partners. The goal is to deliver a 1%-2% fuel burn improvement, as part of a larger effort to shave 4%-5% from A320 fuel burn by 2011, says John Leahy, Airbus chief operating officer for customers.
Air New Zealand will set up an academy to train pilots, cabin crew, engineers and management. The carrier, which is still in talks with potential partners, expects the Air New Zealand Aviation Academy to produce 200 to 300 pilots and engineers each year. Few details are currently being disclosed. The airline says more information will be announced in the coming year.
The Air Line Pilots Association’s (ALPA) Executive Board okayed a merger with the First Air Pilots Association (FAPA) of Canada, effective June 1. FAPA members already voted in April to merge with ALPA. With 140 pilots, First Air is the largest airline serving northern Canada, wholly owned by the Inuit tribe, ALPA said. First Air provides scheduled and charter passenger and all-cargo service to Alberta, Manitoba, the Northwest Territories, Nunavut, Ontario, Quebec and the Yukon.
Singapore Airlines has inaugurated its all-business class service to North America. The carrier operated its first roundtrip on May 16 with a nonstop between Singapore and New York’s Newark Airport. The Airbus A340-500 used on the route is the first of five to be converted from a two-class configuration to the single all-business cabin. SIA is the first carrier to operate such a service from Asia to North America. This new cabin also launches the first Apple iPod and iPhone compatible inflight entertainment system.
30 Years Ago May 18, 1978 – The USSR is experimenting with a laser landing system that essentially draws the proper approach path in the sky for the pilot to follow visually, even through clouds. FAA remains skeptical of the idea but will monitor the test program. 20 Years Ago
Malaysia Airlines and Singapore Airlines are terminating a 1982 accord that set standby fares on flights between Singapore and Kuala Lumpur. The “Shuttle Agreement” will end June 1, but will not affect frequencies, note the two airlines.
China Eastern Airlines has completed a required navigation performance (RNP) flight at Lijiang Airport, in the foothills of the Himalayan Mountains in China’s southern province of Yunnan. The landing and departure procedures were designed by Boeing’s Jeppesen subsidiary. China Eastern completed the flight with a Boeing 737-700.
FAA is working on new standards covering ultra long-range flights, says the Allied Pilots Association, defined as any flight of more than 16 hours. Flight duty time, crew complement, on-board rest facilities and diversion airports are under study, APA says. The union applauds the move due to the increasing number of ultra long-range routes.
Embraer regional jets could soon be filling Russia’s skies with a newly announced certification for the Brazilian airframer’s entire ERJ regional jet family. Certification by Russia’s Interstate Aviation Committee, revealed Friday, comes despite a limited supply of new ERJs, now only built in small numbers under joint venture license by Embraer and Aviation Industries of China II. That plant is building 50 ERJ-145s for Hainan Airlines parent HNA Group. At the end of the first quarter, Harbin Embraer Aircraft Industry had a backlog of 43 airframes.
Kingfisher should be able to ramp up its international service quickly once India’s government has given the go-ahead. Several aircraft slated for the service are ready and waiting at Airbus. Kingfisher has 15 A330-200s and 10 A340-500s on Airbus’ orderbook.
Eurocontrol is now less worried that ATC investment projects will cause extra flight delays during the peak summer travel season, says agency head David McMillan says. At least three big European ATC initiatives have been put off, so controllers won’t have to be taken offline for training, he says, plus traffic looks to be lower than earlier forecast.
