Rebuffed in Indonesia when it sought an operating license for a low-fare airline, Malaysia's Air Asia has acquired a 49% stake in Indonesia's reviving PT Awair International, and management likely will re-launch the carrier as a low-fare operation. PT Awair International, forced in March 2002 after heavy losses to suspend operations less than two years after it began, relaunched yesterday as a full-service domestic airline, Awair. But Tony Fernandes, CEO of Kuala Lumpur-based Air Asia, said Awair will be relaunched again soon.
The French state has sold a part of its equity in Air France-KLM, reducing its stake to 25.6%. "This reduction...is in line with the arrangements agreed between the French and Dutch states under the agreement to merge Air France and KLM," Air France said.
The U.K.'s National Air Traffic Services (NATS) resubmitted its proposed en route charges to Eurocontrol, after the government cut part of the fee. The new National Unit Rate for 2005 is GBP56.29 ($US108.69), down slightly from the GBP56.35 rate originally filed with Eurocontrol Nov. 1. The current rate is GBP57.94. Eurocontrol member states must ratify the new rates.
Continental won final approval from the Nigerian government to launch its nonstop New York-Lagos service next year. The carrier plans to start the service in the second quarter of 2005 but said it would later announce the flight schedule and launch date. Continental secured approval from the U.S. Transportation Dept. for its Nigeria plans in late August.
Profits in the U.S. aerospace industry should reach a four-year high this year, as the sliding value of the U.S. dollar made American products attractive to global buyers, projects the U.S. Aerospace Industries Association. AIA expects the industry to turn in $10.1 million in profits for 2004, just shy of 1999's high of $10.2 billion and well above the low point in 2002 of $6.5 billion.
Lufthansa placed an order for seven Airbus A340-600s, after receiving board approval for the investment. The aircraft are to be delivered in 2006 and 2007 and will partly replace A330s and A340s, but they also will be used for fleet growth. The order follows agreements with both the Vereinigung Cockpit (VC) pilot union and the Ver.di ground services union this week that resulted in two-year pay freezes and productivity improvements (DAILY, Dec. 8). -JF
When United closed its Indianapolis maintenance center in 2003, the city's airport authority scrambled to fill the vacancy at the 12-hangar facility and save jobs. Now the center's anchor tenant, AAR Aircraft Services, plans to use the base as a springboard to tap a broader marketplace.
Correction: A Dec. 7 story in The DAILY incorrectly stated Continental's forecast for available cash in the fourth quarter. The airline expects to end the quarter with $1.4 billion-$1.5 billion in unrestricted cash and short-term investments.
Cendant Corp., only weeks after finishing its acquisition of Orbitz in the U.S., plans to boost its presence in Europe with the purchase of London-based ebookers.
Los Angeles city officials voted to move ahead with the $9 billion security-focused development blueprint for Los Angeles Airport, and also affirmed an agreement to funnel $500 million locally for job training and environmental projects. "Upon receiving final federal approval early next year, we will be ready to embark on a full decade of construction projects and community mitigation measures," said Kim Day, LAWA executive director.
Lufthansa wants to bolster its long-haul fleet with seven additional Airbus A340-600s. The airline's supervisory board this week approved the orders, which were already included in Lufthansa's investment planning. The carrier said the seven planes are in line with its capacity projections for the A380, set to join Lufthansa's fleet in 2007. Deliveries of the latest set of A340-600s start in 2006 and continue through 2007, Lufthansa said. The carrier already flies 10 of the planes.
Delta yesterday named Investor Relations Managing Director Gail Grimmett managing director and assistant treasurer for business analytics and treasury development. Grimmet will have primary responsibility for executing Delta mergers, acquisitions and asset dispositions, as well as evaluation, negotiation and execution of capital market activities. She will be in charge of cash forecasting, liquidity analysis and hedging programs. Laura Fuselier will replace Grimmett as investor relations managing director. -AS
Air China hopes by 2007 to be saving up to CNY1 billion (US$121 million) -- 2% to 3% of its operating costs -- partly through stepped-up hedging of fuel purchases. An Air China official in Beijing said the airline plans to hedge 22%-50% of its jet fuel next year, which should save about CNY230 million. Jet fuel accounted for 28% of the carrier's operating cost in the first half of the year, up from 20% for the same period last year. The official noted that for every US$1 increase in crude oil price, Air China's profit will drop 5.2%.
The U.S. Appeals Court for the Fourth Circuit yesterday upheld the dismissal of a lawsuit filed against several airlines by travel agents. The class action lawsuit claimed airlines illegally conspired to eliminate base commissions to force travel agents out of business. The Eastern District Court of North Carolina rejected the suit last year, and the appeals court found no reason to overturn this decision.
Combined Air France-KLM's traffic rose 4.2% on 4.8% more capacity in November, which management declared led the operation to post a "satisfactory performance."
Airbus will offer China a risk-sharing role in the design and manufacturing phases of the Airbus A350 program. The A350, based on the design of the A330, will have new wings and new engines, explained Airbus Chief Operating Officer Gustav Humbert said. "It will offer longer range and would compete strongly with the Boeing 7E7," he said. The 7E7 is scheduled to enter commercial service in 2008. An announcement about the commercial launch of the Airbus A350 is expected in the next few days. -WD
American Eagle asked the U.S. Transportation Dept. this week for a temporary dormancy waiver to start its Dallas-Chihuahua service by May 14, 2005. DOT granted authority to operate the service on June 25, subject to a 90-day dormancy condition that's set to expire Dec. 30. But American Eagle is looking to postpone the start date until next year, saying that it's the only designated carrier with plans to offer nonstop service between the two cities.
A little more than six months after contemplating shutting down One-To-Go, Orient Thai Airlines now plans to spin off its domestic low-fare unit as a separate entity in the second quarter of next year. According to Orient Thai's CEO Udom Tantiprasongchai, the spin-off is to boost the competitiveness of now-surging One-To-Go in the low-fare airline segment, as well as that of Orient Thai Airlines in the full service market.
China signed an order worth US$12 billion with Airbus for 23 A320s, the third major order from the Chinese for the European aircraft manufacturer since early October. China Aviation Supplies Import Export Corp. signed the order Monday in Beijing. Corporation President Li Hai declined to identify which Chinese carrier would be receiving the aircraft. No details of the delivery schedule were available.
Jetstar Asia will become the third low-fare airline to launch flights from Singapore this year when it begins operations on Monday with daily Airbus A320 service to Hong Kong. Rival ValuAir started operations in May and Singapore Airlines-backed Tiger Airways followed suit three months later.
Norway's competition authority accused SAS Braathens of predatory pricing, in the statement of objections sent to the airline. Officials claim SAS Braathens is abusing its dominant position to price regional carrier Coast Air out of the market on the domestic route between Oslo and Haugesund, on the western coast of Norway. The Norwegian competition authority said it "has found that when Coast Air was present in the market, the SAS Group was charging fares that did not even cover their average variable cost of operation on the route."
The Association of European Airlines (AEA) slammed a suggestion by German transport minister Manfred Stolpe to introduce a jet-fuel tax in Germany. Promoters of the tax -- German Greens and part of Stolpe's Socialist party -- argue that a fuel tax on German domestic flights only would have generated EUR373 million (US$501 million) in tax revenue last year. The funds could be used to improve the competitiveness of German railways, Stolpe suggested in a recent interview with German reporters.
