The financial community yesterday gave the industry a vote of confidence that airlines would be able to survive any short-term scare over aircraft terrorism, but questions remain about the long-term effect on traffic if the threat hangs over airlines. After the initial scare of the terrorism plot surfaced yesterday morning, airline stock prices dropped; however, there was a significant rebound later in the day with only modest gains and losses. American's stock closed at the same prices from the day before and both United and Continental fell less than 1.5%.
The discovery of an alleged terrorist plot caused global disruption of air travel yesterday, with U.K. airports experiencing the most chaos but U.S. airports also seeing massive security delays. Hundreds of flights were canceled by U.K. carriers, and those flights that did take off were delayed by hours due to airport congestion and delays in passenger list screening. The Transportation Security Administration imposed additional airport gate searches that will be extended to other airports today.
Mesaba management expressed disappointment that its pilots declined to conduct negotiations this week, and said it is looking at its options and cash position as it continues to press for consensual concessions from its labor groups. The carrier won bankruptcy court approval last month to void contracts with pilots, flight attendants and mechanics, but stressed it wanted to craft deals that benefited all parties in the negotiations.
EDO Corporation struck a deal with GE to build aircraft-engine ducts using advanced composite materials covering deliveries for the GEnx engine through 2012. The variable bleed valves ducts feature composite braiding and resin-transfer-molding technologies. Each engine features 10 composite ducts, and the complete set weighs less than 10 pounds.
After two weeks of being barred by Bolivian transport regulator Wilson Villaroel from operating to Miami, Washington, Mexico City and Panama, Lloyd Aereo Boliviano will be allowed to reassume the services Aug. 15.
IATA yesterday signed a memorandum of understanding with China's General Administration of Civil Aviation to boost cooperation and information exchange in key areas, such as safety, training and air traffic management.
Smiths Aerospace named Vic Bonneau as president of its Electrical Power business. Bonneau will continue to be based in Dayton, Ohio, where he was previously facility VP and general manager. He has held various positions at Leland Electrosytems. Bonneau reports directly to Smiths President John Ferrie. The unit Bonneau is now overseeing has products involved in all phases of aircraft electrical power -- primary and secondary -- as well as conversion and management control. -LR
Rolls-Royce secured follow-on business for its Trent 700 engines after Hainan Airlines selected those powerplants for two more Airbus A330 the carrier plans to lease from CIT. The OEM pegged the deal's value at $100 million, and the agreement also includes an option for Hainan to take the Rolls-Royce TotalCare maintenance package. Hainan last month said it was leasing five Trent 700-powered A330s from CIT.
Hong Kong Aircraft Engineering Co. (HAECO) will invest US$48.7 million to build a third hangar in two phases at Hong Kong Airport. The first phase will see the construction of a new, 15,750-square-meter light maintenance facility, which will feature two bays sufficient enough to accommodate two Boeing 747-400s. Construction will start this year and is slated to end in 2008. The facility is expected to be operational in the first quarter of 2009.
Confident that it now has a single-aisle answer to the Airbus A321, Boeing rolled out its 737-900ER for launch customer Lion Air with a prediction that its initial sales forecast for the 215-seat airplane may be too low.
Legislation giving pension funding relief to U.S. airlines is expected to be signed by President Bush Aug. 17, and although further congressional action on this issue is expected, analysts believe it will not dilute any airline benefits already contained in the bill.
GE Infrastructure Commercial Aviation Services plans to buy recertified parts distributor The Mem- phis Group, which specializes in components for Airbus and Boeing planes. GE also bought inventory management company LogisTechs in 2004.
The National Transportation Safey Board is disappointed that FAA hasn't issued rulemaking to require crew resource management (CRM) for Part 135 operators, and is reiterating its request in light of the November 2004 fatal crash of a Challenger 600 in Montrose, Colo. NTSB said it has issued several recommendations relating to CRM training for Part 135 operators, with the most recent occurring in October 2002.
A laptop computer stolen recently from a DOT Office of Inspector General staff member contained records from more than 40,000 airman certificates and 80,000 drivers' licenses, the IG office says. The IG is notifying people affected, and working with authorities to find the laptop.
Lufthansa's July traffic was up only 1.4%, compared to a 4.9% increase at Air France-KLM and a 4.4% gain at British Airways. Traffic was down 2% on the transatlantic routes, but the German airline's European network benefited from the soccer World Cup, as demand was up by 7.7%. -JF
KLM this fall plans to end its service to Amman and Damascus on Oct. 29 because the routes are losing money, the airline said. Even though KLM will end its own service, the carrier will offer service to the cities on Air France-operated flights via Paris.
SAS Group's profit fell slightly in the second quarter, as the airline felt the effect of the late Easter holiday and a cabin crew strike in Norway. Net profit was down to SEK489 million (US$69 million) from SEK495 million a year earlier, SAS said yesterday. Sales were up 12% to SEK17.9 billion (US$2.5 billion). Traffic in the period was up 7.3%.
Air Canada Jazz is stepping up legal pressure on the Toronto Port Authority (TPA) after failing to win approval to resume flights at Toronto City Centre Airport. TPA refused to approve a sublease deal between the carrier and Stolport Corp. Jazz was attempting to restart flights at the airport after a company owned by Porter Airlines terminated Jazz's lease in its previous facilities at the airport. Porter plans to launch flights from City Centre this year.
BAE Systems expects to receive its own Phase III contract for commercial aircraft defense systems from the U.S. Dept. of Homeland Security this week, according to a company spokeswoman. DHS on Tuesday warded Northrop Grumman a $55.4 million to assess the feasibility of installing infrared countermeasures on commercial airliners to safeguard them against man-portable air defense systems, known as MANPADS (DAILY, Aug. 9).
The absence of a collective labor contract with New Varig could send Old Varig into bankruptcy because labor liabilities grow with successive fines for delinquent payments, which could have dire consequences for New Varig, said attorney Fabio Carvalho. New Varig met with the former airline's unions last week to resolve their differences, while facing concurrent civil legal action by Brazil's labor attorney general on unpaid salaries and benefits.
Delta is using smaller planes for some of its short-haul flights from New York Kennedy Airport than originally planned after equipment on some of the 37-seat Dash 8 turboprops required alteration. Mesa reached a deal with Delta earlier this year for its Freedom Air subsidiary to start Dash 8 flights to 10 markets from JFK (DAILY, March 8).
