Deep job cuts and long-term infrastructure changes are in the offing for Colombia's airlines, top airline managers and politicians were told in a closed-door meeting to search for remedies for the country's ailing aviation sector.
Singapore Airlines and Cathay Pacific, which stood above their rivals before the SARS pneumonia outbreak with strong performances and huge cash reserves, are unlikely to maintain their positions in the market once the virus is contained and controlled. Both carriers were badly hit in their home bases of Singapore and Hong Kong, ranked second and fourth on the World Health Organization's list of affected countries. As of May 6, Singapore had the third-highest number of deaths -- 26.
DOT Secretary Norman Mineta yesterday told a House Appropriations Transportation Subcommittee that the agency is looking at purchasing three airports in Maryland that have been especially hard hit by the ban on general aviation. The airports are in the district of Minority Whip Rep. Steny Hoyer (D-Md.), who questioned why the GA ban continued despite the lowered terrorist threat. He said all three airports have experienced "devastating economic losses" and asked whether any financial assistance package was being considered.
The war is over for Europeans, too, as the Association of European Airlines noted operations of its members in "Europe and North Atlantic returned to growth" in the week ending April 27 following the end of combat in Iraq. In particular, North Atlantic traffic recorded an increase of 10.9%, AEA said. However, Far Eastern routes are heavily affected by the SARS pneumonia outbreak. "The figures illustrate the volatility of the market at the present time," commented AEA Secretary General Ulrich Schulte-Strathaus. -MT
Airline passengers filed far fewer complaints with DOT in the first quarter than during the same period last year, according to the latest Air Travel Consumer Report. During the quarter, the department received 1,673 air service complaints, down 45% from 3,044 filed during the first quarter 2002. Consumers filed 539 complaints in March, 47.1% fewer than the 1,019 filed in March but 22.5% more than the 440 tallied in February.
U.S. officials yesterday in Brussels assured the European Parliament that turning over passenger data to the Department of Homeland Security posed no threat to European privacy laws. Last March, the body said it was considering court action against the U.S.-European Commission deal allowing the transfer of passenger data to seek out terrorists, arguing it "constitutes an infringement of the European directive on the protection of personal data." A parliamentary committee is currently investigating the issue.
Cathay Pacific's board yesterday decided to cut its recommended 2002 dividend in half due to the deep losses the airline is facing as a result of the SARS pneumonia outbreak. The final dividend will be HK$0.28 per share, rather than the HK$0.56 per share recommended. The 50% cut will cost HK$934 million (US$120 million) but will also save HK$934 million.
British Airways' shares shot up by more than 8% yesterday as the carrier defied analysts' expectations and announced that traffic dropped by only 2% in April, compared with the same period of the previous year. Traffic fell 22.1% on Asia-Pacific routes due to the SARS pneumonia but recorded a 3.9% gain on the North Atlantic. The company's seat load factor fell by 0.4% to 69%, as capacity was cut by 1.3%.
The Bush Administration is going to begin "looking very hard" at whether it can justify the current 25% limit on foreign ownership of U.S. airlines, says DOT Undersecretary Jeffrey Shane. He tells international airline CEOs in Miami he is "embarrassed to say" U.S. ownership rules are among the world's most restrictive.
US Airways yesterday posted a $282 million pretax loss for 2003's first quarter, compared with a $435 million deficit in the year-ago period. But after accounting for unusual gains and fresh-start accounting adjustments stemming from the carrier's emergence from Chapter 11, net income was up to $1.63 billion for the quarter, versus a 2002 first-quarter net loss of $269 million.
Penerbangan Malaysia Berhad (PMB), the company set up to hold the Malay government's stock in Malaysia Airlines, missed its deadline to sign a detailed agreement with Airbus at the end of last month to buy six Airbus A380s. A memorandum of understanding was signed earlier this year (DAILY, Jan. 8).
Seventeen percent of Americans who traveled outside the U.S. in the past year told a Harvard School of Public Health project they are avoiding international air travel because of the SARS pneumonia. While the virus has taken its toll on Asian carriers like Cathay Pacific and Dragonair where load factors dropped 70%, it's significantly affecting U.S. carriers as well.
Northwest President Doug Steenland told attendees at a Labor Department hearing yesterday that contributing common stock from its Pinnacle Airlines subsidiary to its employee pension plans was key to Northwest maintaining its overall liquidity. "The contribution of Pinnacle stock allows Northwest to preserve over $330 million in cash to weather these challenging times," Steenland said.
Four U.S. major passenger and cargo carriers last week filed a joint complaint with the DOT against the government of Argentina and several of the country's airlines for unfair airport charges.
A Boeing 727 chartered by Houston-based operator Castaways took off from Miami for Cancun yesterday carrying 87 passengers in the first of its "Nude Flights," catered and marketed to practicing nudists (DAILY, Jan. 27.) All passengers aboard the aircraft disrobed as soon as the jet reached cruising altitude. The flight was only half-full to give participants plenty of personal space, according to Donna Daniels, co-owner of the operation. Inflight rules call for no hot beverage service, balmy cabin temperature and no hanky-panky. -LZ
NTSB meets today to select its "most wanted" safety recommendations for 2003. Aviation concerns that top NTSB's list include runway incursions, aircraft center wing tank explosions and airframe icing certification.
Reports from the Caribbean confirm that the long-awaited merger of BWIA, based in Trinidad & Tobago, and LIAT, headquartered in Antigua, was approved by private shareholders and will go into effect in June.
United exercised an option from its recent agreement with the International Association of Machinists (IAM), and filed a motion in bankruptcy court to reject leases at its Indianapolis and Oakland maintenance centers, leaving San Francisco as its sole maintenance base. An internal United publication listed May 9 as the closing date for Indianapolis and May 31 as the targeted shutdown at Oakland.
Following recent successes in a campaign for reduced charges at regional airports, The Association of Asia Pacific Airlines (AAPA) renewed its plea for Hong Kong International Airport (HKIA) to reconsider its position on airport charges, and also look a its cost structure and manning levels. Two weeks ago, management agency Hong Kong Airport Authority (HKAA) offered airlines deferred payments for landing charges at HKIA for the next three months (DAILY, April 29).
Two members of the Belgian government, Transport Minister Isabelle Durant and State Secretary for Energy Olivier Deleuze, resigned yesterday in the latest, spectacular episode of a dispute over night flights at Brussels International Airport. Both were members of Ecolo, Belgium's French-speaking green party. Durant opposed plans to increase night flights over Brussels that were supported by Prime Minister Guy Verhofstadt, a Flemish liberal. -MT
