The U.S. government on Friday signed the Cape Town Convention, an international treaty that aims to facilitate cross-border, asset-based financing and leasing of commercial aircraft and engines.
The hub-and-spoke model will continue to exist but will have to be modified and downsized to survive, senior executives at last week's Phoenix Aviation Symposium agreed. "The weaker hubs will disappear," American Trans Air Chairman George Mikelsons said. "Memphis, Cleveland and Cincinnati have to go," as unprofitable part-operations become more unaffordable in the current economic climate.
An Airbus representative was elected chairman of Air Canada's new unsecured creditors committee last week. The ad hoc group collectively holds more than C$2.7 billion (US$1.9 billion) of the airline's unsecured debt. The committee and its advisors will be part of talks on the restructuring plan. Meetings between the committee and Air Canada have already started, the airline said.
LOT Polish Airlines plans to join the Star Alliance officially on Oct. 26, the same day it plans to make the final cutover to its new Lufthansa-developed reservation and information technology system. LOT hoped to join this summer but it would have been very expensive to make its Swissair IT system compatible with Star, says CEO Jaan Albrecht.
The House Transportation aviation subcommittee on Wednesday will look at AIR-21 language handing DOJ's responsibility for foreign student pilot background checks to Homeland Security. U.S. flight schools are losing money and blame DOJ's red tape for discouraging foreign applicant, Hill sources say. Some lawmakers also argue the thicket only encourages students to opt for schools in countries with fewer bureaucratic roadblocks.
Aloha Airlines in July plans to start daily one-stop service between Reno and Honolulu, making the northern Nevada city the eighth North American destination served by the airline.
Shenzhen Airlines received approval from the Civil Aviation Administration of China (CAAC) to set up a cargo carrier and plans to start operations with two wet-leased Airbus A300-600 freighters by September. The deal for the two aircraft will become final next month. Attractive rates in the lease market prompted the airline to lease aircraft instead of buying, an official added.
Northwest last week became the latest U.S. airline to ask DOT for permission to begin service to Iraq. The carrier wants to operate a direct flight from Detroit to Baghdad with a stop at KLM's Amsterdam hub. Northwest is the first major U.S. carrier to seek authority following the end of the war. The airline noted the Southeast Michigan area has the highest population of Iraqis in the U.S. If approved, the service would "help to establish a commercial relationship between the United States and Iraq that has been dormant for well over a decade."
The House Transportation aviation subcommittee yesterday approved a bill to let cargo pilots carry guns. Chair Rep. John Mica (R-Fla.), ranking member Rep. Peter DeFazio (D-Ore.) and full committee Chair Rep. Don Young (R-Alaska) introduce the bill. It passed with a Mica amendment letting flight engineers volunteer for the Federal Flight Deck Officer (FFDO) program. At first, cargo pilots were included in last year's Arming Pilots Against Terrorism Act that let commercial pilots carry guns, but that provision fell out in conference.
Song, Delta's new low-fare subsidiary, can double or triple in size over the next few years, Delta's President and Chief Operating Officer Fred Reid said at the Phoenix Aviation Symposium. The carrier will be built up to 36 aircraft initially. According to Reid, "Song might evolve into a model for all of our domestic operation. A lot of procedures will move into mainline." He highlighted features such as staffing levels, cleaning and self check-in as possible items to be transferred. -JF
KLM passenger numbers dropped 7.0% in April, compared with the same period the previous year, the company reported this week. Traffic plunged 24% on Asia/Pacific routes but increased 11% on the North Atlantic. The company's passenger load factor fell 6.8 percentage points to 74%. The company's share prices rose 2.6% on the news, because markets were expecting a more severe drop and consider that the worst is now over, with the end of the war on Iraq and the expectation that the SARS pneumonia epidemic will peak this month. -MT
KLM reported a much-widened loss of EUR416 million (US$478 million) in its Fiscal Year 2002/03 ended March 31, as the airline was hit by the traffic downturn and the effects of the Iraq war. The carrier is facing increased pressure to sort out its strategic position and cut costs, while being expected to decide on which alliance to join.
DOT agreed to pay SkyWest an Essential Air Service subsidy for flights between Salt Lake City and West Yellowstone, Mont., while it weighs offers from other carriers vying for the route. The St. George, Utah-based airline has been the sole carrier operating June-September seasonal flights without a subsidy on the route since 1986, and it told DOT in March it planned to cease service in June.
Northwest and Continental Airlines are in more vigorous competition where their systems overlap than before the two carriers formed a domestic alliance, US Airways President and CEO David Siegel said at the Phoenix Aviation Symposium. "Maybe it's psychological," he added. In his opinion, "we see the same thing at United and US Airways."
All U.S. domestic flights will have a single-class service only in a few years, American Trans Air Chairman and CEO George Mikelsons believes. Mikelsons said at this week's Phoenix Aviation Symposium that an operating model such as Delta's new low-fare subsidiary Song "may well become the mainstay" in the industry. He also predicted a segmentation of domestic and international services with a growing market for BBJ-type all-business services.
Delta this summer plans to restart its nonstop service between Atlanta and Honolulu, Hawaii, after more than a two-year suspension of the flight. The daily flight will start Aug. 1 and will be operated initially with Boeing 767-300ERs because the planes are equipped with crew rest areas. Once the airline's 767-400s are modified, those aircraft will be used on the route, starting in September. The airline first started the Atlanta-Honolulu service in June 1985, but suspended it April 1, 2001, when it retired its L-1011s.
Frontier Airlines is tapping current regional partner Mesa and other carriers for the best offer to add regional jet service from its Denver hub. The airline's current deal with Mesa ends Aug. 31. Mesa flies five 50-seat CRJ200s as Frontier JetExpress from Denver to Wichita, Kan., and the California cities of Oakland, San Jose, Ontario, Los Angeles and San Diego. "We want a long-term deal with more aircraft with Mesa or someone else," a Frontier spokeswoman said. "We're talking to other operators."
FAA yesterday named Bruce Johnson director of the agency's Air Traffic Service and Linda Schuessler deputy director, who succeeded two officials who recently retired from the government.
American yesterday asked DOT for approval to put the Qantas code on AA flights between St. Louis and Los Angeles, connecting to Qantas's transpacific flights from its LAX gateway. The U.S.-Australia air transport agreement lets Australian airlines serve eight code-share-only points in the U.S. The Australian government designated Boston, Las Vegas, Miami, Phoenix, San Diego, San Jose, Washington, and Portland. Qantas code shares to the first seven of those cities with American, and to Portland with Alaska Airlines.
