Route casualties caused by high fuel costs are climbing for low-cost carriers, which have even less leeway than legacy airlines to raise fares to make up the difference. Frontier notified the U.S. Transportation Dept. March 31 that it is ending service on six of its U.S.-Mexico routes between mid-April and mid-June. The airline will cease for Milwaukee-Cancun April 13, Dallas/Fort Worth-Mazatlan April 14, St. Louis-Cancun April 27, Indianapolis-Cancun May 31, Nashville-Cancun June 1 and Albuquerque-Puerto Vallarta June 14.
Malaysian Airline System has ordered 35 Boeing 737-800s and taken options on 20 more in a long-awaited deal to overhaul its narrowbody fleet, which is based on 737-400s. Deliveries will begin from September 2010, and the company will have the choice of switching to the 737-900ER version, of which a nearby rival, Indonesia’s Lion Air, has ordered 178.
IATA is downgrading its industry profit forecast for 2008 — a move the group has signaled since the beginning of the year — due to the continuing bleak economic outlook. IATA now projects the global industry will make a US$4.5 billion profit in 2008, its second forecast cut in the past seven months. Last September, IATA predicted a profit of US$7.8 billion, but the group downgraded this to US$5 billion in December. At the time of its last upgrade, IATA officials warned there was still significant downside risk.
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The Hong Kong Aircraft Engineering Co. (HAECO) group plans to buy 94.9% of GE’s engine overhaul facility in Xiamen, China, for US$107.8 million. HAECO will control 75.01% of the facility, while Taikoo (Xiamen) Aircraft Engineering Co. (TAECO)’s share will be 10% and Cathay Pacific Airways will hold 9.9%. GE will retain the other roughly 5%. The agreement includes a 22-year service agreement, which means the facility will be a GE-authorized service center, and GE will get revenue through controlling the material stream over the period.
General Electric has received FAA FAR 33 certification for the baseline GEnx-1B engine for the 787, although the engine maker expects to recertify the engine next year before the aircraft enters service. GE says it can count on seeking an amendment to the baseline type certificate because of the 787’s program delays. It will use the extra time to take advantage of improvements now being tested on the GEnx-2B that will power the 747-8.
UILTrasporti, one of Alitalia’s most important trade unions, yesterday [March 31] walked out of last-ditch talks attempting to rescue the carrier, with the general secretary of the union denouncing the “poisonous” atmosphere around the negotiations and asking for a postponement of the talks until after Italy’s general election on April 13 and 14.
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Macquarie Airports (MAp) reports that its foreign ownership level has risen from 37.3% to 39%, as of December, as required by Australian Listing Rules. MAp noted it is not considered a “foreign person” under the Airports Act 1996 as long as its foreign ownership remains below 40%. But once the 40% trigger is hit, the company can force a foreign security holder to sell off its stake at the best price available.
Aloha Airlines, founded in 1946, moved to shut down its passenger services yesterday in spite of a last-ditch attempt by Hawaii’s governor to force the bankrupt airline to continue flying. “We’re shutting down,” an Aloha spokesman said mid-day yesterday, as the airline prepared for a hearing in the U.S. Bankruptcy Court for the District of Hawaii that would include the judge’s consideration of the airline’s motion to cease operations and the state’s objections to it.
SkyTeam alliance members Delta and Air France yesterday marked the start of open skies between the European Union and U.S. by launching the joint venture that covers several transatlantic routes (DAILY, Oct. 18, 2007).
FAA and the National Air Traffic Controllers Association put aside their sometimes acrimonious differences yesterday to announce a new agreement that lets employees report aviation safety concerns.
The lead U.S. negotiator believes it is much too early to be talking about withdrawing airline rights if the second stage of the U.S./European Union open-skies talks breaks down — although he also warns that the U.S. has opportunities for counter-measures of its own if the EU follows this course of action.
The U.S. Transportation Dept. is looking for a carrier interested in operating subsidized or unsubsidized service to Meridian, Miss., as Delta Connection carrier ASA told the department it intends to discontinue flights between Meridian and Atlanta after June 15. The ASA service was operated without subsidy. “Delta and ASA would strongly prefer to continue providing scheduled air service to Meridian,” ASA said in a notice to DOT.
GOL is estimating its first quarter load factor will fall into the 62%-63% range, down from the 67%-69% rate estimated in its first-quarter guidance. Capacity is expected to grow some 57% over the first quarter of 2007, down from the 65% growth contained in the earlier guidance. Yield estimates remain unchanged at BRL0.21 (US$0.12) while cost per available seat kilometer ex-fuel is estimated at 8.5 cents, also in line with the guidance. The carrier expects to announce first-quarter results at the end of April.
Air Berlin expects a much smaller profit than previously forecast for fiscal 2008 — Germany’s second-largest airline said yesterday its operating profit will come at EUR73 million-EUR120 million (US$115 million-US$189 million), down from the EUR140 million-EUR160 million range published last fall.
Mechanics at United, which has outsourced a significant amount of maintenance over the past few years, have voted to drop the Aircraft Mechanics Fraternal Association in favor of representation by the International Brotherhood of Teamsters, the two unions confirmed Monday.
U.S. airlines and the nation’s top airports are going to be at odds over efforts to change how landing fees are calculated and used, if comments from Republic Airways and San Francisco Airport are any indication.
The U.S. Transportation Dept. last month set a March 21 deadline for bidding on three revived Essential Air Service markets, but it may want to consider extending it further — no airline has proffered a bid.
Champion Airsaid it was closing down all flight operations on May 31, another casualty of skyrocketing fuel prices. The carrier blamed a drop in business, a slowed economy and an inability to find new investors as the reasons for its shutdown, said President and CEO Lee Steele in a statement. Champion flew 16 Boeing 727-200s in charter operations.
