The U.S. Transportation Dept. yesterday confirmed its earlier tentative decision to award China frequencies to United, despite con- tinued objections from Continental and Northwest. DOT last month announced its intention to award the seven weekly frequencies to United, for its proposed Washington D.C.-Beijing route. The flights will be available from March 25. Northwest, Continental and American submitted rival applications for these flights.
International low-fare carrier Oasis Hong Kong Airlines this week began executing its touted growth plan by filing for authority to fly to Oakland and Chicago. Service to Oakland would start June 1 with four weekly Boeing 747 flights that will grow to daily service come July. Flights to Chicago would come on line later, the carrier tells the U.S. Transportation Dept. [OST-2007-27248].
The Minneapolis Metropolitan Airport Commission has approved a plan that will offer $239 million in financial aid to help Northwest as the carrier works to emerge from Chapter 11 bankruptcy protection. Under the plan, unveiled in December, Northwest will make payments on more than $290 million in bond debt to MAC, agree to assume its terminal and aircraft gate lease in bankruptcy and retain its hub at Minneapolis-St. Paul Airport and headquarters in the city.
United paid down nearly one-third of the $3 billion in borrowing from its Chapter 11 exit early last year, reducing interest costs, relaxing restrictive covenants and releasing $2.5 billion in collateral. The payment, $972 million, was in cash from the $4.1 billion unrestricted total with which United ended 2006. The carrier refinanced the remaining balance, taking out a $1.8 billion term loan and a $255 million revolving credit line, reducing its financing costs by 175 basis points for a saving estimated at $70 million per year.
One of the world's first dual biometric airport identification programs has been activated by the Canadian Air Transport Security Authority (CATSA) at the country's 29 largest airports. The Restricted Area Identity Card (RAIC) covers more than 100,000 airport employees working in restricted areas of airports. The card uses a small computer chip to store fingerprints and iris templates. It uses fingerprint and iris readers and a network linking 29 airports to a secure central database.
While BAA accepts that the U.K. airport market deserves study, it believes the country's Office of Fair Trading has adopted an uncritical approach to many of the issues raised in its December market study. The OFT recommended a wider government investigation into the airport market after determining that the domination of U.K. airports by BAA is not good for the public (DAILY, Dec. 13).
Northwest increased its consolidated capacity 3.8% year over year in January and paid a price; traffic failed to keep pace, growing only 1.5%, and load factor dropped 1.8 percentage points to 77.9%. The carrier cut back dramatically on Northwest Airlink regional affiliates' capacity, reducing it 15.1%, compared with January 2006. But traffic dropped 19.7% load factor, down 3.6 points.
Sabre is laying the technological groundwork to trans- form its reservations system from transaction-based functionality to customer-centric functionality.
Air Canada regional partner Jazz Air grew its 2006 profits by 18% while reducing unit costs, excluding fuel, 10%. Net income for the year was $140 million, and costs per available seat mile, excluding fuel, dropped to $0.18 from $0.20. The carrier said it slashed unit costs in all categories except aircraft fuel and rent. Profits for 2005 totaled $117.8 million.
Emirates yesterday announced it will launch its second route to the U.S. in December with a nonstop flight from Dubai to Houston. The flight will initially operate three times a week, but increase to daily service beginning Feb. 1, 2008. The carrier will use Boeing 777-200LRs on the route, with 266 seats in a three-class configuration.
Air Canada has good potential for earnings growth due partly to "solid growth opportunities"-- particularly in international markets, says Merrill Lynch analyst Michael Linenberg. The carrier also has an "innovative revenue model" that has produced strong sales increases. The Canadian market in general is seeing "a period of relative calm," and the domination of the market by Air Canada and WestJet results in a stable pricing environment. Capacity growth looks to "decelerate in the next year," Linenberg says.
Air-India's budget arm Air-India Express plans to start flights from Muscat, Oman, to Mangalore on Feb. 15, offering service on Thursday and Saturday. The carrier currently operates six weekly flights between Oman and India -- five from Muscat -- to three Indian destinations and is the sole carrier flying between Kerala and the Persian Gulf.
The Australian Airports Association voiced support for the federal Airports Amendment Bill under review by the parliament's Senate committee on rural and regional affairs and transport. But Qantas expressed concern with an amendment that would allow airports to increase commercial development not related to aviation issues.
House aviation Chair Jerry Costello (D-Ill.) promises to consider the FAA reauthorization proposal when it is released next week, but warns he remains skeptical about the need to replace the current aviation funding system. Costello told The DAILY that "everything will be on the table" when the reauthorization debate begins in his subcommittee; however, he stressed that the burden rests with FAA to convince him and other congressional leaders that the existing system should be replaced.
SkyWest executives are guarded about describing the company's financial outlook for the first quarter as ramp-up expenses for new businesses continue, following a decline in system utilization to below average levels in the second and third quarters of 2006.
Bolivia's main airlines, Lloyd Aereo Boliviano and AeroSur this week are facing the threat of new fuel shortages that last month inconvenienced hundreds of passengers with flight delays and cancellations and prompted 30% fare increases (DAILY, Jan. 10). Other carriers affected are American and Tam Mercosur. Bolivia's airline regulator blamed fuel distributor Air BP for irregular and delayed supplies, while Brazilian refiner Petrobras tried to reassure airline clients that everything was normal. -LZ
Libyan Arab Airlines signed a deal with Emirates Group information technology subsidiary Mercator for its Rapid revenue accounting system. Other carriers using Rapid are Emirates, Middle East Airlines, Royal Air Maroc, Syrian Arab Airlines, Yemen Airways and Gulf Air.
Mexico in the past five years invested about $1 billion to upgrade infrastructure and facilities at four alternate airports in Central Mexico -- Toluca, Puebla, Cuernavaca and Queretaro -- as part of a strategy aimed at alleviating congestion at Mexico City International Airport.
Air Arabia's full-year profit for 2006 tripled, the airline said yesterday. The low-fare carrier reported a net profit of AED101 million (US$27.9 million), up from AED33 million a year earlier. In the same period, revenues increased by 82% to AED749 million. The airline said in January that it plans to sell shares to the public later this year in order to be able to fund its expansion. Air Arabia is based in Sharjah, United Arab Emirates, and is owned by the government of Sharjah. -JF
American plans to target Medellin, Colombia, as a destination for business travelers and investors, as well as feature the city and Antioquia in its inflight magazine and other publications, senior VP-Latin America and Caribbean Peter Dolara told El Colombiano.
