The Embraer-EADS consortium Airholding SGPS S.A. plans to take a 65% stake in OGMA, a maintenance firm Portugal is privatizing, for EUR11.4 million (US$15 million). Embraer holds 99% of Airholding, and EADS can expand its current 1% stake to 30% in the future. OGMA offers maintenance and repair of civil and military aircraft engines, structural component production maintenance and engineering support. OGMA has worked with TAP, Portugalia, British Midland, Luxair, Embraer, Rolls-Royce, the U.S. Navy and Air Force and the Norwegian and Dutch navies.
Continental yesterday sent a strong warning signal that it needs to achieve its target of $500 million in labor cost cuts by the end of February or it may have "inadequate liquidity to meet its obligations."
Lufthansa Technik won another deal from an unnamed Arab customer to equip and service a Boeing 747-400, beginning in February with a targeted completion in mid-2006. The deal includes installing sleeping quarters, conference and work compartments and communication and airborne entertainment systems.
Malaysia Airlines (MAS) will reduce its 15 weekly flights to Phuket to a daily service, starting Sunday, in what one airline official says is the result of a significant drop in passenger load following the destructive late-December tsunami. MAS, which uses Boeing 737-400s on the route, will monitor the situation closely with the possibility of reducing the number of flights further because forward bookings are extremely poor, the official added.
Delta and Dallas/Fort Worth Airport yesterday reached a deal under which the airline will return all but two of its gates for $7 million, and the airport introduced a hefty incentive scheme to lure other airlines into the empty gates. Under the agreement, DFW will regain control of 24 Delta gates in Terminal E in the next few months, with Delta keeping four gates for its drastically reduced DFW operations. Delta plans to cut its DFW flights from 258 to 21 by Feb. 1.
United's pilots yesterday ratified the tentative concession agreement that will give the airline about $180 million in annual labor savings. The Air Line Pilots Association reported that 88.5% of the eligible pilots cast votes on the new agreement, which was approved by a vote of 76.8% to 23.1%. Separately, the bankruptcy court yesterday approved an 11.5% temporary pay cut for United's mechanics.
AAR boosted its second-quarter net profit to $4.8 million in 2004 from $0.9 million in the same 2003 period, helped by a 12% sales increase. Those results also included a $1.6 million federal income tax benefit. Sales during the second quarter reached $178 million, compared with $159 million for the same three months in 2003. Sales to commercial aviation customers rose 14%. AAR's inventory and logistics services business segment topped sales in the second quarter at $66 million, followed by MRO at $53.6 million.
Vought Aircraft Industries named Lloyd Sorenson executive VP and chief financial officer. Sorenson was previously with Dell as controller in the Corporate Business Group. He also has aerospace industry experience, serving as VP of finance for AlliedSignal's Aerospace Equipment Systems business, and has worked for McDonnell Douglas.
US Airways yesterday got the bankruptcy court's green light to abrogate its contracts with the union representing its mechanic and fleet service staff to achieve its desperately needed labor cost cuts, but the drama will continue for two more weeks as union members vote on management's final concession proposals.
Midwest Air Group hired former American and Vanguard Airlines executive Scott Dickson as its new senior VP and chief marketing officer. Dickson will join the company Jan. 10 and will be responsible for the marketing of Midwest Airlines and its Skyway Airlines subsidiary. His responsibilities also include route planning, pricing and scheduling; e-business and distribution; industry partnerships, and customer loyalty, sales and advertising programs. He replaces Thomas Vick, who died last year.
Germany's leisure airline Hapag-Lloyd Flug placed an order for 10 Boeing 737-800s yesterday. The airline will introduce the aircraft in 2006 and 2007 to replace its current fleet of five Airbus A310s. Hapag-Lloyd Flug already operates 27 Boeing 737-800s in its European leisure business. Boeing said the order is valued at $655 million at list prices.
ATA's passenger traffic was down 11% in December 2004 and capacity was off 12.4%, but traffic and capacity were both up for the full year. The airline reported 911.8 million revenue passenger miles for the month, and 1.3 billion available seat miles. Load factor was up 1.1 percentage points to 69.9%. The passenger total of 738,081 was 8.3% lower than in the same 2003 month. For the full year, traffic was up 5.5% to 12.5 billion RPMs, and capacity was up 4.4% to 17.1 billion ASMs. Load factor was 0.7 points to 73.1%. -AS
Leaders of the Brazilian federation of airline and airport labor unions (FNAAA) plan to offer their own restructuring plans to save Varig and other financially troubled major carriers in Brazil (DAILY, Jan. 5). "We would like the rest of society to be aware of the problems faced by the company instead of discussing them at cabinet level only," said FNAAA President Celso Klafke. He said the plan would be explained in paid advertisements, especially in Rio Grande Do Sul.
Jakarta-based low-fare carrier AWAIR will launch daily flights to Singapore on Jan. 19 with Boeing 737-300 aircraft. The airline today will take delivery of its second 737-300, and on Sunday AWAIR will introduce two new domestic services -- twice daily to Bali and once to Surabaya. AWAIR operates from Terminal 1A at Soekarno-Hatta Airport.
The Asur Group opposes the local government's plan to build a second international terminal on the Mayan Riviera, saying the facility would increase competition for its operations at Cancun Airport. The Quintana Roo state government planned to form a corporation -- financed 51% by public funding and 49% by federal funds -- to obtain the concession to build and operate an airport on the Mayan Riviera.
Continental this week retired its last MD-80, the seventh aircraft type it has eliminated from its fleet during the past 10 years. The airline has cut the Airbus A300, DC-10, and the Boeing 747, 737-100/200, 727 and DC-9 from its fleet, leaving just three Boeing types, the 777, 767/757, and 737. Continental has 348 aircraft, 70% of which are 737s.
SIA Engineering Company Limited (SIAEC) and Cebu Pacific Air signed a memorandum of understanding (MOU) creating a joint venture to provide line maintenance, light maintenance including A checks and technical ramp handling services at 13 airports in the Philippines. SIAEC will hold a 51% stake in the unnamed venture, Cebu a 49% share. SIAEC already has line maintenance joint ventures in Hong Kong and Indonesia.
American's systemwide traffic grew 6.1% to 11 billion revenue passenger miles in December, and capacity was up 4.9% to 14.7 billion available seat miles. Load factor increased 0.9 percentage points to 74.6%. International traffic was up 10.3% on 12.7% more capacity, and domestic traffic gained 4.1% with a 1.4% capacity increase. For the full year, systemwide traffic was up 8.3% to 130 billion RPMs, and capacity grew 5.5% to 173.8 billion ASMs. Systemwide load factor was up two points to 74.8%. -AS
SkyWest Airlines' initial plans to update the technology its clerks use in the parts room have blossomed into a full-scale effort to develop wireless access to technical manuals on the hangar floor. The payoff, the carrier hopes, will be productivity gains and bottom-line cost reductions.
Air Berlin plans to expand its fleet by seven aircraft in 2005, after a year of aggressive growth in 2004. The airline will take five more Boeing 737s and also take delivery of the first two of 60 Airbus A320s on order. The company said it is firmly established as Europe's third-largest low-fare airline with 45 aircraft and annual sales exceeding EUR1 billion. Revenues increased 18.9% last year and the airline said it also made a profit. As a privately held company, Air Berlin does not disclose results.
