Standard & Poor's on Friday lowered its corporate credit ratings and other ratings on five U.S. major airlines because of weak revenues and reduced business travel. Debt ratings for Continental, Northwest, American, Delta, United were lowered one notch, also due to risks related to airport security hassles, rising low-fare competition and limited flexibility to cut labor costs. The strength of revenue recovery that "started out strong after Sept. 11 has stalled out in recent months," analyst Philip Baggaley.
WestJet will take delivery of its eighth new Boeing 737-700 in September. The airline will also add one additional daily Toronto-Calgary nonstop, one business day Calgary-Vancouver nonstop and one business day Vancouver-Prince George nonstop.
Pemco Aviation Group, Inc. repurchased an additional 341,399 shares of its common stock through a privately negotiated transaction pursuant to a board-approved program invoked in September of 2001. "We are pleased with the results and feel that it was an efficient use of the company's cash availability," said CEO Ron Aramini. Pemco performs maintenance and modification work for foreign and domestic aircraft.
Regional aircraft manufacturer Fairchild Dornier is expected to enter permanent insolvency under German law today. The company will keep a total of 1,800 of the current 3,600 staff, and send the other half into a three-month social program. Under the social plan, funded jointly by the state and creditors, employees effectively suspended from work will receive 80% of their current salaries. Fairchild Dornier hopes that workers in the 728 program can be called back once an investor is found.
To list an event, fax information to Donna Thomas at 202-383-2438. (Blue, Bold-faced type indicates new calendar listing.) JULY 7-11 -- Air Traffic Control Association International Technical Conference and Exhibits, Hotel Inter-Continental, Berlin, 703-522-5717, fax 703-527-7251, e-mail carol.newmaster@atca. org JULY 9-11 -- Airport Consultants Council / FAA, Summer Workshop Series, Washington, 703-683-5900, fax 703-683-2564, e-mail [email protected], www.acconline.org
DOT last week awarded grants to improve small-community air service to 40 communities in 38 states under a $20 million pilot program authorized in the AIR-21 legislation. DOT said it received 179 proposals from 47 states. The communities receiving the grants will match the awards by nearly 75% in the aggregate -- $14.8 million. Most proposals included contribution of "substantial local and state resources," DOT noted. A number of applicants cited service reductions since Sept.
Sabre last week launched in the U.S. its Trip Shopping packaging tool, which allows travel agents to build entire trips -- including air, car and hotel components. Individual trip components are bundled together based on specific traveler needs and preferences, and each trip is "completely flexible and customizable," the company said.
European Commission sent a so-called "reasoned opinion" to Greece, criticizing the Greek government for still not having implemented European Union rules concerning the certification of aircraft maintenance workshops. In the EU's infringement procedure, the reasoned opinion is the last stage before referral to the Court of the Justice. The EU legislation, which Greece still has not incorporated in its national law, was adopted 10 years ago by the EU Council of Ministers. The legislation was aimed at harmonizing maintenance standards throughout the EU. -MT
Horizon Air will operate nonstop regional jet service between Sacramento and Palm Springs, Calif., Oct. 27-April 27, offering one daily flight with 70-seat Canadair CRJ-700 regional jets. Horizon is the North America launch customer for the CRJ-700. Horizon also will offer nonstop RJ service between Los Angeles and Bozeman/Big Sky, Mont. Dec. 21-March 22.
Hong Kong Aircraft Engineering Co. (HAECO) and China Airlines signed a memorandum of understanding last week to explore new aircraft maintenance partnerships. The companies have collaborated on maintenance projects for 35 years, but they are now investigating ways "to enhance quality, competitive and efficient aircraft maintenance services in support of China Airlines' global flight network," according to P.K. Chan, deputy chairman and CEO of HAECO. He will serve as an aircraft maintenance adviser to China Airlines President Philip Wei.
Electronic Arts video game company named former Delta Chief Financial Officer Warren Jenson CFO. Marriott International named Continental President Larry Kellner to its board, effective today. Miami-Dade aviation department appointed Miami-Dade Police Department Lieutenant Mark Forare assistant aviation director for security. Pratt & Whitney named Dennis Enos VP of the PW6000 program. Southwest appointed Ana Schwager area marketing manager for the Albany and Buffalo, N.Y., regions.
Dallas Love Field last weekend opened more than 1,100 new covered parking spaces for public use as a part of its 18-month parking garage construction project. Upon completion of the entire project scheduled to open February 2003, the new four-level garage will provide more than 4,000 additional parking spaces, increasing parking garage capacity to more than 7,000 vehicles. The East Parking Lot will remain open with shuttle service to the terminal throughout construction.
Dragonair last week took delivery of an Airbus A330-300, expanding its passenger fleet to 20 aircraft. Configured for a three-class layout, the aircraft will seat 18 in first class, 42 in business class and 230 in EY. The aircraft will enter service next month on the Beijing, Shanghai and Kaohsiung routes. In December, the airline will take delivery of another A330, which will go into commercial service early next year. According to Dragonair CEO Stanley Hui, the carrier's plans to have 26 aircraft in service by the end of 2005 are on track.
Wall Street is advising investors to keep faith with the regional airline industry, which continues to have an earnings stream that is predictable and stable, compared with the majors, according to Susan Donofrio, analyst with Deutsche Bank Securities Inc.
FAA last week issued its Final Environmental Impact Statement (FEIS) for Boston Logan airport's proposed new runway project, outlining restricted use of the runway that the agency believes addresses local concerns while retaining most of the capacity reduction benefits. The other major feature of the FEIS was the deferral of a decision on a new centerfield runway while a further study is carried out. Massachusetts Port Authority officials welcomed the FEIS findings, but called for any additional studies of the taxiway to be completed quickly.
The Air Transportation Stabilization Board Friday was flooded with a batch of new federal loan guarantee applications by smaller carriers seeking to boost liquidity and capital resources. Facing the Friday deadline, The DAILY confirmed that the ATSB received applications from Frontier, Great Plains, World Airways and Aloha. At press time, 11 airlines have applications pending with the ATSB, but the board said a final count is not yet complete.
Continental last week unveiled its "Airport of the Future" domestic check-in facilities in Terminal C at Houston Bush Airport, replacing the traditional ticket counters with customer-facing kiosks. The carrier said the kiosks offer "faster, more customer-friendly check-in." Continental says it is the only U.S. airline with fully automated check-in facilities for domestic passengers at all of its U.S. hubs. It has similar facilities at Boston, Chicago and Raleigh/Durham and will open kiosks at Baltimore/Washington this summer.
Delta CEO Leo Mullin is prepared to launch an aggressive marketing attack against US Airways if it reaches a code-share deal with another major airline this summer, and he vowed that Delta would sign its own alliance to compete. In an interview last week, Mullin told The DAILY that Delta is clearly the "target" airline of a US Airways alliance deal, and he fears that Delta would see "revenue diversion" if US Airways partners with a larger airline, such as United.
New York jet fuel spot prices ended last week at $0.69 per gallon, down 0.3% from the beginning of the week and down 9.7% from a year ago, according to Deutsche Banc Alex. Brown.
UAL Corp.'s board met last week in Chicago to review the company's new strategic plan. On Thursday, the board heard an update on the company's international performance and strategies. President Rono Dutta in March launched a company-wide initiative examining all aspects of its business (DAILY, May 17).
Within the next two weeks, Deutsche Bahn, the national German railway company, will lodge a complaint with the European Commission concerning alleged tax discrimination in favor of airlines on the German market. "The airlines are exempt from a number of taxes," said Deutsche Bahn head Hartmut Mehdorn. Airlines are not subject to fuel taxes or Germany's environmental tax, whereas Deutsche Bahn estimates that it pays some EUR350 million (US$346 million) annually in taxes on diesel and electricity.
Southwest still faces 15 lawsuits that include 30 litigants related to the March 2000 overrun of a flight landing at Burbank, Calif. Most of the lawsuits are from passengers who were on the flight. The captain of the flight has since retired, but the first officer was recertified and is flying again for Southwest.
Although it last week lifted the temporary flight restriction (TFR) that has been in place over the World Trade Center site in Manhattan since the Sept. 11 terrorist attacks, the FAA has imposed new TFRs over a number of national landmarks.
