Merrill Lynch last week projected that U.S. major airlines will post a $2.2 billion net loss for the first quarter. The analysts also estimated that industry revenues will be down 22% from the same period last year. While the expected loss is "enormous," said analyst Michael Linenberg, it is an improvement over last year's $3 billion fourth quarter net loss. "Although a loss is a loss, and therefore we can't get too excited about the improvement, we would add that the March quarter is typically the industry's weakest quarter due to seasonal factors," he said.
Seoul Incheon International (IIA) Airport, this year plans to increase the number of airlines serving the airport to 52 from 48. Other goals include targeted growth of 11%, bringing the total number of flights for the year to 122,000. IIA wants to see an 8% rise in passenger traffic to 20.3 million and a 10% increase to 1.99 million tons in cargo handling. According to Tong-myung Lim, executive director of IIA's external affairs office, achieving this goal would drive sales revenue to US$407.7 million, resulting in a profit of US$91 million.
The fact that scope clauses could mean jet service cuts to many U.S. cities "and all air service to other cities" should be enough incentive for government to intervene, David Hayes, chief legal officer at Trans States told the American Bar Association last week. Hayes noted that scope clauses are not subject to mechanisms under the Railway Labor Act aimed at preventing service disruptions, so "the public is without the protections of the RLA and without recourse to resolve the situation unless Congress intervenes."
Vanguard begins serving Seattle on June 3 with daily MD-80 nonstops to Kansas City that will connect with flights to Atlanta, Austin, Buffalo, Chicago, Dallas/Fort Worth, New York and Pittsburgh. Vanguard last week restarted service to Myrtle Beach and begins serving Orlando on April 22. It plans additional service to Las Vegas, Los Angeles, New York and San Francisco in the coming months.
Struggling Alitalia hopes for a long-expected capital increase and other measures to improve its financial position and bring it "in line with other leading airlines" after the company posted a huge loss for 2001. Alitalia reported a EUR907 million net loss and ended the year with EUR846 million in cash, down from EUR1.5 billion. On an operating basis, Alitalia had a profit of EUR7 million on sales of EUR5.3 billion, down 2.3%.
Bombardier Aerospace recently appointed British European Aviation Services (BEAS) as the first Q Series/Dash 8 Recognized Service Facility in Europe. BEAS, sister company to Q400 operator British European, can do heavy maintenance, modifications and upgrades on the turboprops. SAS Commuter recently picked BEAS to do C checks on its 28 Q400s. Bombardier has sold 165 Qs/Dash 8s to European carriers.
FleetWatch -- AMERICAN TRANS AIR Aircraft March March 1997 2002 727-200 24 15 737-800 0 16 757-200 7 16 757-300 0 6 CITATION I (500/501) 1 0 CITATION II (550/551) 0 1 L-1011-1 2 0
The International Federation of Airline Pilots Associations (IFALPA) is asking the International Labour Organization to investigate Cathay Pacific's labor practices, charging the airline with violating international standards of worker protection.
Transbrasil, grounded for more than four months due to financial, labor, legal and political reasons, moved a step closer to bankruptcy this week when two magistrates of the 9th Chamber of the Court of Civil Justice voted in favor of bankruptcy and freezing all assets and revenues to pay creditors. A third, decisive vote by another magistrate has been postponed until April 5, paving the way for immediate bankruptcy proceedings.
New Boeing 767 and 747 cockpit door designs that must be in U.S. planes by next April 9 don't meet rapid decompression requirements, forcing the manufacturer to ask FAA for permission to deliver non-complying doors while it solves the problem.
A historic Boeing 307 Stratoliner owned by the National Air and Space Museum crash-landed yesterday in Puget Sound near Seattle. The aircraft had four people on board who were later rescued from Elliott Bay, the AP reported.
Dragonair this month took delivery of a leased Airbus A320 from Boullioun Aviation Services. The IAE V2527-A5-powered Airbus is the first Boullioun-owned plane operated by the carrier.
Meteorologists and dispatchers this week began using a new web-based ice-forecasting tool that, with the click of a mouse, can give detailed icing-condition reports for specific altitude ranges above the contiguous 48 U.S. states, southern Canada, and northern Mexico. Developed by the National Center of Atmospheric Research (NCAR) with FAA funding, CIP (Current Icing Potential) detects real-time probability for icing in the atmosphere by combining information from various sources, including satellite data, surface observations and pilot reports.
Northwest President Doug Steenland yesterday warned that industry taxes and fees are soaring to a breaking point that will soon discourage leisure passengers from flying. "For every dollar the ticket price goes up, somebody decides to drive or use the phone instead, or just not go at all," he said yesterday in Washington at an American Bar Association conference. If all the expected security costs are passed on to the passenger, Steenland predicted the taxes and fees imposed on an individual ticket this year will be quadruple what they were 10 years ago.
United is considering dropping Arthur Andersen as its independent auditor after a 67-year partnership. United said in a Securities and Exchange Commission filing this week that its 2002 auditor has not been selected as the board continues to "closely monitor recent public disclosures and evaluate any developments regarding Arthur Andersen." The airline first retained Andersen in 1935. A representative from Andersen will be present at United's May 16 annual meeting and will "have the opportunity to make a statement and respond to questions."
US Airways, still facing a serious short-term liquidity crunch, has burned $3 million per day over the past quarter and may apply for a federal loan guarantee. In its annual report filed with Securities and Exchange Commission, the airline reported that it still requires "substantial working capital in order to meet scheduled debt and lease payments and to finance day-to-day operations." Although traffic levels are improving, the company still faces negative cash flow from operations.
Latin American and Caribbean airlines "are facing the worst moment in the history of aviation," said Patricio Sepulveda, IATA's director for the region and former senior executive at LanChile. "Maybe 11 September was the last blow for some of them," he added, "but things were torturous for many, at least since 1999, because our sector is less competitive than in the U.S., Europe and Asia."
Indian Airlines' board approved plans to order 43 Airbus narrowbodies in what is the largest A320 family transaction in Asia so far. Airbus and Boeing have fought to win the order for several years.
Hard-charging strategies paid off for Embraer in a challenging and difficult 2001, boosting net profits nearly a third from year-ago levels to US$468 million, the company said this week. While the bottom line shows solid growth, strong support of customer financing has left the Brazilian company with $23 million in cash, down from $772 million in 2000, and $672 million in accounts receivable, as of the yearend.
Eight New York-based American A300-600 pilots have gathered data that they say supports eight conclusions, including giving "serious consideration" to grounding all A300-600s until more is understood about what happened to AA Flight 587.
Sun Country and its pilots, represented by the Air Line Pilots Association, have agreed to a new contract that lets the airline emerge from bankruptcy. The deal is subject to approval by the Minnesota U.S. Bankruptcy Court and transfer of the airline's operating certificate to its new owners by DOT, said spokeswoman Tammy Lee. MN Airlines is buying Sun Country assets for $2.9 million and putting up $1.5 million to keep the airline flying.
U.S. and New Zealand, already open-skies partners cooperating on economic matters both bilaterally and as part of the Asia Pacific Economic Cooperation aviation grouping, reached an agreement on aviation safety that will be concluded as a Bilateral Aviation Safety Agreement (BASA). DOT Secretary Norman Mineta and New Zealand Prime Minister Helen Clark initialed an executive agreement, an FAA spokesman confirmed.
DOT Deputy Secretary Michael Jackson said the government is trying to balance its role to create an ultra-secure airport system with realities of public service. "If we have created a secure environment but have driven passengers away because the hassle factor is too large, then we have failed," he said at the ABA Forum on Air&Space Law yesterday in Washington.
