Cleveland-Hopkins International Airport is moving ahead to accommodate a previously announced expansion by hub tenant Continental despite a spate of announced industry capacity cuts.
AirTran has netted $140.3 million to date in a public offering of its debt and equity securities, the low-cost carrier said yesterday. CEO Bob Fornaro said the money improves the airline’s “financial flexibility.” The $140.3 million is from the “initial closing” of the offering, which was made last week. The sale of an additional 2.3 million shares of common stock, pursuant to a partial exercise of the underwriters’ over-allotment option, is scheduled to close Friday.
South Africa’s long-struggling Nationwide Airlines ceased operations April 29. The carrier had been on the financial edge. A 30% spike in fuel costs in March and April, along with falling passenger load factors drive management to shutter the airline. Nationwide has been struggling since November, when one of its Boeing 737-200s leaving Cape Town suffered an engine separation. The South African Civil Aviation Authority quickly forced the carrier to suspend operations. Those were allowed to resume in December.
Representatives from the City of Cleveland — including the mayor, the airport director and local businesses — will be on Continental’s inaugural seasonal flight May 22 to Paris. The representatives will do trade mission work with the French government and work with their counterparts to increase support for the new flight.
The latest contract proposals from the Allied Pilots Association would add billions to pension costs, American said yesterday. The proposal would add $3 billion in pension liabilities, and would require American to immediately inject more than $1 billion in cash into its A Plan to get it above the 80% funding threshold. Currently the pension plan is “well funded,” American said, but if the APA proposal was accepted, the funding level would drop below 60%. The airline based its calculations on analysis by Towers Perrin.
Vought Aircraft Industries is measuring success in building aft fuselages for the Boeing 787 at its North Charleston, S.C., factory by shipping the fifth shipset as 98% structurally complete. The shipset will be used for the third flight test article (ZA003) now in final assembly at Boeing’s Everett, Wash., widebody aircraft headquarters. It consists of the joined Sections 47 and 48, each of which is a one-piece composite barrel. Two previous shipsets were used on the static and fatigue test fuselages that do not contain full systems.
Continental’s days in the SkyTeam alliance could be numbered as British Airways and American this week confirmed they are in code-share talks with the carrier. BA said it is “exploring opportunities for cooperation” with Continental and American, while American made a similar statement to its employees. While it has said it is not interested in a merger at this time, Continental has repeatedly stated it is reviewing its status in the SkyTeam alliance, and is considering whether another alliance would be a better fit.
Korean Air posted a KRW325.5 billion (US$321 million) loss in the first quarter of 2008, down from the KRW130.8 billion profit recorded a year earlier. Sales jumped 11.5% to KRW2.26 trillion (US$2.24 billion) on a 10.1% increase in revenues from international passenger sales and 17.8% growth in cargo revenues, the carrier said. But fuel expenses caused operating income to plunge 87.1% to KRW19.6 billion (US$19.33 million).
After hurdling a final series of bureaucratic moves by Bolivian government regulators blocking reissue of its operating license (DAILY, April 24), Abdon Porcel, deputy transport superintendent, yesterday handed down a resolution granting Lloyd Aereo Boliviano (LAB) a five-year license.
Some 3.4 million international travelers visited the U.S. in January and spent a whopping $11.38 billion, up 11% and 23% from January 2007, reports the U.S. Commerce Dept.
Senate leaders’ efforts to pass FAA reauthorization appeared to be stalling at press time. A planned vote on the long-delayed legislation was tied up in a dispute between Republicans and Democrats over non-aviation financing issues, such as highway funding, attached to the bill. No vote was expected before Tuesday if Senate leaders fail to reach an agreement before today.
The European Union and Australia liberalized air transport but stopped short of signing an open-skies agreement. The so-called "horizontal agreement" signed this week does not replace existing bilateral agreements between EU member states and Australia. Rather, the agreement removes the nationality restrictions in those bilateral treaties and brings them in line with EU law.
Brazil’s TAM in mid-June will start twice weekly nonstop Airbus A320 service between Sao Paulo and Bariloche to cater to the growing number of Brazilian tourists who flock to Bariloche, Southern Argentina’s year-around mountain and lake resort area.
Calgary-based WestJet reported a record first quarter profit of $52.5 million, 75.9% higher than in the first quarter of 2007, on a 27.3% increase in revenue to $599.3 million.
Emirates expects its net profit to decline in the 2008-2009 fiscal year as the airline faces a massive increase in its fuel bill. The airline’s internal projections see it post about a AED5 billion net profit in the year ending March 30, 2009. That compares to a AED5.3 billion (US$1.45 billion) net profit in fiscal 2007/08. “We are not far short of where we are this year, but you have to take fuel into account,” President Tim Clark told reporters on the sidelines of the annual results event in Dubai.
Strong performance by its airlines, especially in international cargo and passenger services, overcame a revenue loss from the sale of hotels last June, leaving ANA Group revenues off a mere 0.1% at JPY1.488 trillion JPY (US$14.82 billion) for Fiscal Year 2007, which ended March 31. The hotel sale pushed net profits up 96% to JPY64.1 billion, but rising jet fuel prices — JPY30 billion more than in fiscal 2006 — and accelerated depreciation of aircraft squeezed operating profits. They were off 8.5% year-on-year to 84.3 billion yen.
Korean Air is working on the final details of a new alliance with Alaska Airlines, starting in July, to take advantage of the carrier’s Pacific Northwest base, said Arnold Song, team leader with the U.S. route management team. The carrier is also working on similar deals with WestJet, LAN Airlines and GOL.
Latin America’s airlines are not immune to economic turbulence but appear to be doing well for now. A Reuters report finds leading airlines in Latin America continue to perform strongly despite spiraling fuel prices, thanks to increasing passenger traffic impelled by the region’s overall economic growth, which has put air travel at the reach of consumers who had never flown. Because of the jump in demand, drastic cost cutting and generally “exorbitant” airfares, leader airlines still make a profit, while others less well-armored register losses.
Tunisair has signed an agreement to buy 16 Airbus narrow- and widebodies, although the deal still has to be converted to firm orders. The agreement boosts Airbus’s already dominant position in the Tunisair fleet — the carrier also still operates 11 older Boeing 737s. The agreement inked yesterday would cover the purchase of three A330-200s, three A350-800s and 10 A320s, replacing some of the 12 aircraft of the type Tunisair already has in service. The carrier also operates A319s.
Following the demise of both Maxjet and Eos, at least one of the all-business-class airlines appears poised to stick around: London-Luton based Silverjet yesterday said it has signed a memorandum of understanding with a United Arab Emirates investor to inject an initial US$25 million into the company.
Pratt & Whitney has named Goodrich to be sole provider of nacelle systems for geared turbofan engines for both the Mitsubishi Regional Jet and Bombardier CSeries family. The award is valued at $5 billion in revenue over a 25-year period following the GTF’s service entry in 2013 on the MRJ. The CSeries has yet to be formally launched.
TAM plans to add three new international destinations this year and is looking for long-haul aircraft for use in those markets, said Marco Peloggia, supply chain director. Peloggia said the carrier has signed deals for three GE CF6-powered 767s but hopes to lease a total of six to eight, some of which could be powered by Pratt & Whitney PW4000 engines. Some of the 767s may come from GOL or Ocean Air, said Peloggia, adding that TAM is working with lessors and “is getting close to making deals.”
