Takeover target Midwest reported a profitable first quarter yesterday, but the Milwaukee carrier and its pursuer AirTran each had their own take on the results.
US Airways yesterday reported a $66 million profit in the first quarter -- up from $5 million for the same period last year -- and revealed plans for several customer service initiatives. The airline's profit, which is reduced to $32 million when excluding net credits from special items, came during a particularly trying quarter for the carrier during which it was afflicted by two major storms on the East Coast and many operational glitches when it cut over its reservations systems into a single system on March 3.
Canadian airlines this week sent a clear message to the nation's airport leaders that carriers will find it difficult to add more destinations and grow further until the airport crown rent issue has been resolved. Airlines and airports have the same objective -- to grow markets, Air Canada CEO Montie Brewer said during the Canadian Airports Council (CAC) annual meeting in Ottawa this week. Airlines need to choose where to put new service, and they "see that some airports are non-competitive because their costs are so high," he said.
Reno International Airport has announced a May 15 start date for its RT Go registered traveler program, while Verified Identity Pass has signed a deal to bring its Clear program to Little Rock National Airport. Travelers using Reno airport can register online at www.rtGOcard.com or in person at the airport, said spokesman Brian Kulpin. "The RT lines will use what are currently crew lines at both of the airport's security checkpoints," he said.
Government-owned carriers Air India and Indian -- formerly Indian Airlines -- will be legally merged by June 2007, Air India Chairman and Managing Director Vasudevan Thulasidas said in New Delhi this week. The name of the new carrier and at least three of its top executives are also expected to be announced in June. Both airlines have already started working towards route rationalization by integrating their domestic and international flight schedules.
Struggling Bolivian carrier Lloyd Aereo Boliviano on May 15 will reimburse 100 passengers who demanded their money back for tickets for flights to Spain that never took off. In exchange, passengers have agreed to stop staging protest demonstrations and shows of force at Cochabamba Airport. Meanwhile, further problems are on the horizon as unions refuse to join the recently created Committee for the Defense of LAB (DAILY, April 17).
Chief Airbus salesman John Leahy claims the airframer didn't submit an A350 proposal to Virgin Atlantic during the carrier's recent aircraft selection process. Leahy notes Virgin wanted an aircraft to be delivered in 2011, but the A350-900 will not enter service until 2013. Virgin's selection of Boeing's 787 was viewed as a major victory for the U.S. manufacturer.
Alaska Air Group blamed a soft revenue environment and increased competition for its first-quarter net loss of $10.3 million, although this was still an improvement from the $79-million loss sustained in the same period last year.
According to a Priceline survey, people who book travel seven days or less before departure are not waiting to find a better deal, but are simply too busy to book in advance. Priceline surveyed 1,000 consumers and found that 30% said they were overscheduled and couldn't plan a trip more than a week in advance. Only 13% said they were concerned about money.
JetBlue is beefing up its presence in Salt Lake City and will increase from two to four the number of destinations it serves nonstop from this airport. The airline intends to begin daily flights to San Diego and San Francisco from Salt Lake on July 27 with A320s. JetBlue currently flies twice a day to Long Beach, Calif. It also offers daily flights to New York Kennedy.
Emirates appears likely to place a significant follow-on order for the Airbus A380, with Emirates Airline President Tim Clark saying "we could easily absorb" between five and 15 additional A380s in the coming years. The airline has already placed an order for 45 A380s and is by far the single largest customer for the type. Following well-publicized Airbus production delays, Emirates expects to receive its first A380 in August 2008. The remainder are to be delivered by 2012, if Airbus manages to tighten its schedule.
Delta, which in recent years has worked to bulk up its U.S.-Mexico offering, this week announced it will stop some ser- vices and cease code sharing with Aeromexico on eight routes. The airline told the U.S. Transportation Dept. on April 24 that it was letting its authority for New York Newark-Acapulco and Atlanta-Ixtapa/Zihuatenejo become dormant. The carrier wants DOT to convert its exemption for Atlanta-Merida to code-share only authority, since Delta Connection carrier ASA operates on the route.
A survey of air carriers by Deloitte and the International Association of Airline Internal Auditors has found a five-fold increase in fraud by passengers since the industry was last surveyed six years ago. The industry loses about $600 million annually to fraud. The fraudulent behavior includes stolen tickets, cargo theft, false baggage claims, loyalty membership program abuse and bounced checks. But credit card fraud leads the list, accounting for 60% of the problem. In all, 79% of airlines said they sustained losses through fraud in the past year.
Airports Council International (ACI) and other aviation groups have unveiled a new web site to be launched at the end of the month -- www.enviro.aero -- to provide information about the industry's efforts on the environmental front, said ACI Director General Robert Aaronson at a Canadian Airports Council (CAC) meeting this week. Partners on the new web site include IATA, the Air Transport Action Group (ATAG), the Civil Air Navigation Services Organization (CANSO) and the International Coordinating Council of Aerospace Industries Associations (ICCAIA).
Lufthansa aims to double its profit margin, as the airline seeks to close the gap between it and European rivals Air France-KLM and British Airways. "We want to be at the top of the network carriers," CFO Stephan Gemkow said in a conference call with journalists yesterday. Gemkow revealed Lufthansa will launch another cost-cutting plan later this summer but declined to give more details.
The Malaysian government accepted a Fly Asian Xpress (FAX) proposal to surrender rural air service (RAS) and Fokker-50 domestic routes operated in the east Malaysian states of Sabah and Sarawak to Firefly, the Malaysia Airlines no-frills carrier.
Travelspan GT on April 23 won U.S. Transportation Dept. approval to launch flights to Orlando from Georgetown, Guyana, via Port-of-Spain in Trinidad. The airline, which also flies to New York Kennedy and Fort Lauderdale, aims to launch the Orlando flights on June 16 [OST-2007-27901].
Continental this month inducted the first Boeing 757-300 due for heavy maintenance into its Orlando maintenance facility. The airline's Orlando facility has been performing 737 maintenance, but it was able to construct stands and acquire tooling to insert the 757 into the second line, which it started last summer, according to Dave Shotsberger, director of technical operations for the Southeast U.S., Europe and Caribbean. Shotsberger expects to complete the first 757 in 23 days but thinks Continental will decrease that to a 20-day turnaround.
United says it will be holding the line or reducing domestic capacity in the second quarter, and studying ways to gain new revenues through ancillary products as a way to improve on the $152-million net loss the carrier incurred in the first quarter.
