Great Lakes Aviation yesterday posted breakeven results for the second quarter, not including one-time $1.4 million insurance gain. After the gain, the carrier posted a $1.5 million profit compared with a $5.1 million net loss in the same 2001 quarter. "Our earning improvements continue to be mitigated by industry factors outside of our control," said CEO Doug Voss. The airline "has made significant progress in transitioning from its former United Express business model to a more independent carrier with greater control over its destiny."
Vanguard gained approval this week to accept funding from a potential investor while he considers investing in the carrier, which ceased flying July 30, when it filed for Chapter 11 bankruptcy protection. The bankruptcy court for the western district of Missouri granted Vanguard's request to allow an investor group headed by Robert Brooks to cover costs for staff to prepare business plans and projections for the investor group, according to Elizabeth Cattell, Vanguard VP-marketing.
The board of creditors of Peru's now-defunct AeroPeru last week recovered some $8 million in shares held in the Sita Foundation, based in Switzerland. Converted into cash, these assets will be used to pay privileged creditors, namely, the carrier's former workers. This process was delayed for several years due to legal maneuvers by a group of former employees intent on refinancing the company so it could resume operations. -LZ
Europe's Joint Aviation Authority this week approved Delta as a training center after nearly two years of preparation and regulatory reviews. Delta claims to be the first North American carrier to receive such approval. As a result, Delta will be able to provide aircraft maintenance training and examinations in Europe, "allowing other carriers and aviation maintenance organizations to purchase Delta's training services without additional regulatory requirements," the airline told employees.
National Airlines is seeking alternate means to access equity following rejection of its application for federal loan guarantees by the Air Transportation Stabilization Board. The ATSB also turned down Spirit's application. National will not reapply following the board's unanimous rejection of its request for a guarantee of $50.5 million on a $60 million loan.
Starting Nov. 1, Vietnam Airlines will boost its Hanoi-Bangkok flights from the current 10 to two daily. On the Hanoi-Ho Chi Minh City-Kuala Lumpur route, flights will go up by two to become a daily service, while Hanoi-Kaohsiung will increase from five a week to seven. In line with the Malaysian government's incentive plan to attract foreign carriers to increase frequencies into Kuala Lumpur International Airport to four or more services, landing fees for the additional two flights will be waived.
FAA has extended for 60 days war risk insurance coverage for U.S. carriers that was set to expire Aug. 17. The action, approved by DOT Secretary Norman Mineta, was taken "to provide further time to explore ways to move [coverage] to the private sector," an FAA spokesman told The DAILY."
Hawaiian Airlines yesterday reported a $31.1 million second quarter net loss, largely due to depressed and yields and a drop in charter revenue. The deep loss compares to a 1.9 million profit the year before. Revenues were down 7% to $148 million, while expenses jumped more than 10% to $173.1 million. "Demand for travel and yields remain weaker than last year," said CEO John Adams.
With senators soon likely to debate authorizing firearms for commercial pilots as the Sept. 11 attacks' anniversary looms, DOT needs to decide once and for all whether to let non-lethal weapons in the cockpit, Senate Majority Leader Sen. Tom Daschle (D-S.D.) told DOT Secretary Norman Mineta this week. The House already passed a measure permitting cockpit firearms.
Iberia management and the carrier's pilots union are engaged in a public dispute following two recent incidents involving Iberia aircraft. Sindicato Español de Pilotos de Lineas Aereas (SEPLA) asked the Spanish national aviation authority in a letter to denounce "signs of degradation" in the airline's safety standards since its 1999 privatization. The union referenced two recent incidents: the emergency evacuation of a Boeing 747 at New York Kennedy Airport on Tuesday and the emergency landing of a Barcelona-bound aircraft last weekend (DAILY, Aug. 13).
U.K. officials today present the U.S. with the U.K.'s "mini-deal." The U.S. will need time to review the proposal, but the U.K. is hoping to leave the one-day meeting with an idea of "what bits are more interesting than others" to the U.S., a U.K. source said. But a U.S. observer predicted a "polite round of informal talks that leads to a more formal round of finger-pointing," with U.S. carriers hurting financially and U.S. policy prohibiting cabotage the U.K. may seek.
Delta's AirElite Business Jets subsidiary plans to add two Bombardier Challenger 604s to its fleet of charter aircraft through a charter management agreement. The aircraft are based at the MBS International Airport in Freeland, Mich. Delta AirElite now has a charter fleet capacity of more than 250 business jets positioned throughout the U.S. The carrier has followed a strategy of adding aircraft through charter management agreements that enable it to boost its fleet without large capital commitments.
United plans to start seasonal, Saturday-only service between Denver and Kona on the Big Island of Hawaii, beginning Dec. 14 and running through April 27, 2003. The flights will be operated with Boeing 757-200s. United also serves Kona from its hubs at San Francisco and Los Angeles. The new flights from Denver to Kona will complement United's existing weekend service between Denver and Honolulu. United also announced that it will add weekend service between Los Angeles and San Salvador, El Salvador, operating Dec. 13 through Feb. 9, 2003.
Delta Express, starting next year, will no longer operate Boeing 737-200s, The DAILY has learned, as the aircraft has become too expensive to operate amid intense competition. Joe Kolshak, VP-flight operations, yesterday sent a letter to the Orlando-based Delta Express pilots informing the group that Delta in January will begin to close the Express 737-200 base and move the aircraft to its mainline operations "to better match capacity with demand." As a result, Delta will close the 737-200 Orlando base by late 2003.
Europe's largest no-frills carrier, EasyJet, has signed an option to acquire Deutsche BA (DBA), currently a fully owned British Airways subsidiary. EasyJet will pay EUR5 million for the option plus EUR600,000 per month until it decides to buy the company. The final purchase price will be between EUR30 million and EUR39 million, depending on when EasyJet makes a firm commitment. DBA was relaunched as a no-frills carrier in April and claims to have made significant progress since then in terms of cost savings and boosting passenger numbers.
DOT Secretary Norman Mineta seems confident Marion Blakey will be the next FAA administrator. Touting DOT's record of naming women to key senior positions, he told a group of women in government relations last month that then-FAA head "Jane Garvey is a woman, as is her successor."
KLM regional unit Cityhopper will launch a twice-daily Fokker 70 service between Amsterdam and the Norwegian city of Trondheim March 30, 2003. KLM already serves Oslo, Bergen, Stavanger and Torp in Norway. "In recent years KLM, has succeeded in building a strong position in the Norwegian market, partly due to its partnership with the former Norwegian airline Braathens," the Dutch airline said. Following the termination of the partnership in late 2001, KLM is now seeking to develop its own position in Norway. -MT
Aerolineas Argentinas selected Discover the World Marketing to handle its sales and marketing in Israel, beginning this month. This is the first time the airline has chosen Discover for representation anywhere within its global network.
Belgian VG Airlines is changing its name to Delsey Airlines, the company's shareholders said this week. Tony Gram, the controlling shareholder, also owns the Belgian luggage brand Delsey. The company said Delsey had greater international recognition than VG, a brand chosen on the basis of the initials of the company's founder, Freddy Van Gaever. Furthermore, "there were a few problems with VG in English," Managing Director Ludo Sauwen said. "It is sometimes used in association with or as an abbreviation for vagina. And there was confusion with Fiji." -MT
US Airways mechanics and ramp workers will vote Aug. 28 on concession proposals presented by the airline. The mechanics' proposal, presented to the International Association of Machinists this week, includes a wage rate reduction of 6.8% for all base rates above $14.42. In addition, a 2002 parity increase and a 2003 3.5% lump sum payment will be eliminated. The proposal covers the period to Dec. 31, 2008, and includes 2% annual wage increases beginning 2004, and a 5% increase in 2008.
Bankruptcy proceedings by US Airways will deeply jeopardize the impending sale of holding company Cintra and its main assets, AeroMexico and Mexicana (DAILY, Aug. 14), Mexico's Transportation Secretary Pedro Cerisola told a group of Mexican senators. The statement echoed local industry analysts, who say this latest development created a "climate of uncertainty in which airlines seek to survive, not to buy," just when the industry was beginning to recover from the events of Sept. 11.
Federal security screeners were deployed this week to 13 airports, bringing the total number of airports where the Transportation Security Administration has federalized passenger-screening checkpoints to 32, although TSA screeners are not in all terminals at some of the airports.
Association of European Airlines reported that 16.6% of flights operated by its 28 members in the second quarter were delayed by more than 15 minutes, down from 25.7% last year. In May, the punctuality rate was 14.7% -- the lowest figure for a summer month since 1994. These "out-of-the-ordinary" punctuality figures are essentially due to the fact that most AEA carriers scaled down their operations after Sept. 11, the association said. Capacity was down 10% on European routes and 13.5% on long-haul operations, compared with the same period of 2001.
