US Airways yesterday detailed nearly $30 million in annual concessions that will be imposed on its non-union and management employees. The wage, vacation, sick leave and benefit reductions, combined with compensation reductions for company officers revealed last week, cover six-and-a-half years.
Ecuador's national aviation council last week authorized Taca Ecuador and VIP S.A. to operate the frequencies formerly used by extinct Saeta. While Ecuador is still in FAA Category 2 status, which means local airlines must wet-lease aircraft from Category 1 countries to operate to the U.S., several airlines from such countries (Brazil, Chile, Colombia, Peru and Bolivia) are showing interest in potential partnerships with Ecuadorian carriers.
Air travel recovery in Europe stagnated in June, according to figures released by the Association of European Airlines (AEA). Traffic and capacity were down 11.6%, compared with June 2001. The airlines continued to suffer particularly on the North Atlantic routes. Traffic fell 18.6% and airlines reduced capacity by 19.2%. On routes to the Far East, the traffic decrease was only 4.4% and intra-European travel was down 7.8%.
Concerned that United's employees are turning a blind eye to the carrier's sobering financial situation, CEO Jack Creighton is trying to jolt his staff into reality while the carrier attempts to recoup losses of $1.5 billion in revenue since Oct 1.
In a communique to the Sao Paulo Stock Exchange, Varig further advanced its restructuring timetable by increasing guarantees on a bond issue, with maturity in 12 months, to make debt more enticing to potential investors. It will use receivables to approval of back up $18 million in local currency debt, subject to a special shareholders meeting on Aug. 10. This is part of the company's goal to reduce its debt by selling shares for $270 million. -LZ
British Airways is moving London flights to three U.S. points from Gatwick to Heathrow. Beginning Oct. 26 flights to Denver, Phoenix and San Diego will operate from Heathrow's Terminal Four, as will two flights from Africa -- Harare and Lusaka. The carrier is adding a seventh daily New York Kennedy-Heathrow flight.
LanChile plans to spearhead the creation of a new airline to be known as LanEcuador in association with local investors and perhaps other carriers, Luis Ernesto Videla, LanChile's general manager for Ecuador, told some 130 visiting Chilean business leaders this week.
Pan Am on Aug. 15 will begin service from Newark to San Juan, Puerto Rico, using Boeing 727-200 aircraft for nonstop flights on Thursday, Saturday and Sunday and one-stops via other Caribbean points on Monday, Wednesday and Friday. The carrier began serving Newark in June, when it launched nonstops to Santiago, Punta Cana and Puerto Plata in the Dominican Republic as well as to Portsmouth, N.H., and Orlando Sanford. It expects to begin serving Santo Domingo soon. Pan Am affiliate Boston-Maine Airways this week began service to St.
New leaders of Thai Airways International have received a government mandate to get tough with workers who create conflicts among staff and make unreasonable demands. Newly appointed Thai Airways Chairman Thanong Bidaya said these issues have long troubled the airline and tarnished its image. The government's patience has run thin, Thanong said. He was referring to threats made by the pilots two months ago to strike if then Chairman Virabongsa Ramakura did not resign. Virabongsa incurred the pilots' wrath after he rejected their request for a salary hike.
A group of former TWA pilots have hit a major setback in their legal fight against financier Carl Icahn stemming from the termination of their pension plans in January 2001. The U.S. District Court for Washington, D.C., recently awarded a stay on the lawsuit until an appeal relating to another case against Icahn is resolved.
Embraer topped Monday's rally at the Sao Paulo Stock Exchange as its shares rose 8.7% to $1.11 per share. Brokers attribute the increase to the sale announced last week of 10 Embraer 175s to India's Jet Airways. The sale is worth $260 million and includes options for a total of $520 million. -LZ
Iberia's first-half results for 2002 show the carrier succeeded in its turnaround despite difficult market conditions. Net profit was EUR60.05 million (US$60.65 million) in the first six months, compared with a loss of EUR10.47 million ($10.2 million) in the same period a year ago. These results "are the best in the last 10 years," Iberia said. The airline reduced capacity by 4.5% but raised income per seat by 3.6%. Passenger load factor in the first six months rose 1% to 71%.
Malaysia Airlines projects that a restructuring exercise planned for Oct. 1 will return the carrier to the black with a profit of RM94.2 million (US$26.17 million) for the fiscal year ending March 31, 2003. The airline posted a loss of RM835 million for the year ended March 31, its sixth straight loss.
DOT should reveal information filed on the proposed US Airways-United code-share arrangement, including discussions with federal agencies, the Air Carrier Association of America told DOT. And DOT should suspend the code-share application until the Air Transportation Stabilization Board completes action on US Airways' loan guarantee application, the group added.
Leaders of the protest movement against Mexican authorities over the construction of a new international airport in the Texcoco area (DAILY, July 30) told local media they were suspending all protests during the Pope's visit to Mexico this week. In the meantime, business leaders from the state of Mexico published an ad in major newspapers calling on both parties to resolve the conflict in a "prudent" manner and reject intervention by others with "hidden and destabilizing agendas."
Alaska Airlines said yesterday it has withdrawn plans to provide temporary service to Long Beach Airport in favor of its regional affiliate Horizon, citing Alaska's "continuing inability" to wrest slots from local officials. Sister carrier Horizon filed an application with the City of Long Beach to begin service between Long Beach and Seattle on Oct. 6, operating three daily nonstop flights with Bombardier CRJ-700 jets. Alaska hoped to fly 120-seat Boeing 737-700s on the route.
Air New Zealand (Air NZ) will reduce fares on domestic flights, starting Nov. 1, in line with no-frills service it plans to implement. The trunk routes involving Auckland, Wellington and Christchurch will see a reduction of 28% in fares, while tariffs on all other routes will drop 20%. In line with the new fare structure, the airline's fleet of 13 Boeing 737-300s will be configured from a two-class layout to all-economy with 136 seats.
LanChile on Aug. 7 will start code sharing with Alaska on Calgary-Los Angeles flights, linking the service with its LAX-Santiago flights, with connections to other South American points. LanChile this year began code-share service to other Canadian points this year, with Alaska on a Vancouver-LAX routing and with oneworld partner American on Montreal-New York.
AIR, Inc. said pilot hiring is continuing to "show modest improvement" through the summer, with 491 new pilot jobs created in June, and 48% of airlines hiring. Majors hired 30 pilots in June, and four of the 14 carriers expect to hire over the next several months. By the end of June, the furloughed pilot total rose to 7,356, 7.78% of total pilots and up from 7,257 in May.
FAA Acting Deputy Director Monte Belger has agreed to postpone his retirement and will serve as acting administrator if White House nominee Marion Blakey cannot be confirmed before Congress recesses tomorrow. Belger was to retire this week, but DOT Secretary Norman Mineta asked him to stay until at least the end of August. The Senate Commerce Committee should hold a confirmation hearing for Blakey at 10 a.m. tomorrow. Current Administrator Jane Garvey is due to step down Aug.
Lufthansa expects a significant improvement in operating profit for the year 2002, according to Chief Financial Officer Karl-Ludwig Kley. As recently as June, the carrier forecast the full-year operating profit to end up at about EUR400 million. But Kley now said that figure is more likely to be at around EUR500 million, thanks to traffic rebounding more strongly than management had anticipated. Lufthansa's stock went up by 9.6% following the news, but lost most of its gains in afternoon trading.
United yesterday reported that its volume of narrowbody cargo is up "significantly" thanks to a new initiative launched last winter. The cargo division in February asked employees in Los Angeles to focus on improving the sale and loading of cargo on narrowbody aircraft, according to an employee newsletter. The project was soon expanded to Atlanta, Chicago, Portland, San Francisco, Tampa and Washington Dulles. For the year to date, United carried an additional 9.7 million pounds of cargo on its narrowbodies, compared with the same period in 2001.
