Stakes in various airlines by Icelandic conglomerate FL Group are in flux as the company sells off its piece of EasyJet, ups its stake in Finnair and orders additional Boeing planes for Icelandair. FL Group's sell-off of its 16.9% holding of EasyJet ends speculation that the company was eyeing a takeover of the low-cost carrier. The sale generated a EUR140 million (US$172 million) profit for FL Group, translating into a 70% return on its investment. FL valued the transaction at EUR325 million (US$400 million).
British Airways said yesterday that capacity and traffic both rose in March, although load factor dropped slightly. Traffic grew 1.8% on a 2.5% capacity hike, and load factor dropped 0.5 points to 75.2%. The carrier said the traffic increase resulted from a 15% boost in premium traffic and a 0.4% decrease in non-premium traffic. The fact that the Easter holiday will fall in April instead of March this year boosted March premium traffic but hurt non-premium traffic. "This effect will reverse next month," BA said.
Negotiations between workers and management at Aerolineas Argentinas (DAILY, March 23) have reached a deadlock, and the possibility remains that they might strike during the Easter season. Pilots and others insist on their demands. Management says the unions want to destabilize the company and the government refuses -- or is unable -- to break the deadlock. "While not claiming to be clairvoyants, some kind of resort to force for Easter cannot be discarded," pilots union (APLA) President Jorge Perez Tamayo said.
Air New Zealand plans to offer a second daily service between Auckland and London, starting Oct. 28. The flight, to be operated via Hong Kong, will use a 393-seat Boeing 747-400 aircraft. The airline will be the fifth carrier to operate the nonstop Hong Kong-London flight. The others are Cathay Pacific, Virgin Atlantic, British Airways and Qantas. ANZ will also be the only Star Alliance member airline to operate the route.
LAN President Jorge Awad said Lan Peru would continue operations despite presidential elections on April 9 that could put an airline detractor in office. Presidential candidate Ollanta Humala previously accused Lan Peru of having "an airline monopoly" and proposed setting up a national carrier with public and private capital to "break that monopoly." Humala is running neck and neck in the polls with centrist/left candidate Lourdes Flores, and analysts are predicting a run-off.
Korean low-fare domestic airline Jeju Air, which starts operations June 2, secured from the Korea Development Bank a KRW100 billion (US$104.6 million) loan that will be used to finance the purchase of five Dash 8 Q400 aircraft. The first aircraft will be delivered next month, followed by one each in July, August, September and October. Jeju Air will pay the loan back over eight years. The airline will start accepting reservations for its flights at the end of the month.
Federation Nationale de l'Aviation Marchande (FNAM), the federation of French carriers, is asking Conseil d'Etat, France's highest administrative jurisdiction, to annul the planned increase of airport charges at Aeroports de Paris (ADP). The challenge is essentially justified by "procedural irregularities and the ignorance of principles of transparency and objectivity which must prevail in the setting of tariffs of any monopolistic public service," claims FNAM.
As problems multiplied for troubled Lloyd Aereo Boliviano (LAB) on the operational, financial, labor and governmental fronts (DAILY, March 30 & April 3), the carrier's president and majority stockholder Ernesto Asbun late Tuesday ceding to what he described as "unbearable social pressure" and told the government he was ready to step down and sell 50% of his equity shares for $3 million.
American reported a drop in both domestic capacity and traffic for March, although domestic load factor still rose by two percentage points. Domestic traffic was down 0.8% and capacity 3.2%, which pushed up load factor to 83.3%. International operations again moved in the opposite direction, with traffic up 2.5% and capacity rising 3.6%. International load factor, however, dropped by 0.9 points to 77.1%.
The European Commission with a reasoned opinion warned Italy that it must correctly implement European Union legislation that opens ground-handling services to competition; failure to comply with the new rules could result in a new court case.
Colombia-based Avianca reported a net profit of $78.9 million in 2005. The carrier, controlled by Brazil's Sinergy Aerospace, saw equity improve from $5.69 million in 2004 to $74 million at the end of 2005. Figures also include 9% operational growth from $709.5 million in 2004 to $817 million in 2005 despite high fuel prices. Operational costs for 2005 were up 15.9% overall, with fuel accounting for 35.31% of the increase.
United's Mileage Plus frequent flyer program contributed more than $800 million to passenger and other revenue in 2005, the carrier reveals in a securities filing. In 2005, 1.9 million Mileage Plus awards were used on United, compared with 1.7 million in 2004, and 2 million in 2003. These awards represented 6.6% of United's total revenue passenger miles in 2005, 7.4% in 2004, and 9.0% in 2003. About 21% of the total miles redeemed in 2005 were used for travel on partner airlines, such as Star Alliance members.
Boeing has named San Jose, Calif.-based Intelleflex Corp. to provide the silicon chips for the radio frequency identification (RFID) "smart labels" it will require of all suppliers for the 787 program. FAA's acceptance of passive RFID data storage and collection labels for parts and components prompted Boeing and Airbus to jump on the RFID bandwagon. The chips bring more descriptive power of the use history and characteristics of a part than a basic bar code. They also don't require a line-of-sight reading, making them far more flexible than bar codes.
Cendant's Travelport corporate booking tool this week won a significant deal from JetBlue that will send the airline's full inventory of flights to the system. The agreement also gives access to JetBlue fares for Galileo's Travelport resellers. "Travelport is now one of only two online booking tools to which JetBlue distributes its content," said Dean Sivley, COO of Travelport and Orbitz for Business. A JetBlue spokesman said the carrier "recognizes the value of Travelport's distribution channel and the high-yield corporate customers it serves." -SL
AirTran is shedding one daily frequency between Atlanta and Richmond, leaving four flights between the two cities. The airline noted it often adjusts capacity from its Atlanta hub to meet demands throughout the system. AirTran has about 24 markets that have four flights or fewer, including markets larger than Richmond, such as Seattle and San Francisco.
The Senate Appropriations Committee yesterday approved an amendment that would stall efforts by the U.S. Transportation Dept. to loosen airline foreign ownership restrictions, although there were also signs that the panel and DOT are working to reach an agreement.
Continental yesterday said its March unit revenue grew between 7% and 8%, further proof of a "favorable pricing environment" for U.S. airlines, one analyst said.
Northwest hopes to generate more than $15 million annually from its new Coach Choice test product, based on early purchase rates. "This product is exceeding initial revenue expectations," the airline tells employees. "Revenue is expected to grow as customers become more familiar with the product." Coach Choice will be introduced on flights from the U.S. to Canada, Mexico and the Caribbean this summer. As part of the program, Northwest charges $15 for aisle and exit-row seats.
The new owners of grounded carrier Sunworld International Airlines say they have access to the "resources necessary" for the airline to resume service on June 15, and have asked the U.S. Transportation Dept. to extend the deadline on the carrier's fitness test from March 31 to April 15.
Aeromexico will be able to go ahead with the launch of new service to Los Angeles and Las Vegas after winning from the U.S. Transportation Dept. exemptions to operate the La Paz-Los Angeles and Monterrey-Las Vegas routes (DAILY, March 8). The carrier will operate Boeing 737s, MD-87s or other aircraft on the route twice weekly [OST-2006-24083].
FAA and the controllers union yesterday exchanged their final contract proposals, and at press time there was no indication of what further steps either side is going to take. The National Air Traffic Controllers Association indicated last week that the exchange of proposals marks the end of negotiations, although FAA disputed that conclusion (DAILY, April 3). If FAA decides impasse has been reached it is likely to send its proposal to Congress for lawmakers to consider, and NATCA is expected to try to get the Federal Service Impasses Panel to take action.
