Fairchild Dornier is understood to be close to insolvency, industry and company sources indicated yesterday. The company might be forced to file for insolvency as early as Tuesday, April 2, since its cash reserves are almost gone. If that happens, the company would be run by an administrator, who would be tasked with keeping the company going and finding investors who would want all or part of the company.
FAA wants to fine Boeing $344,450 for production-related problems between August 1996 and April 2000. Boeing is planning to contest the penalty. The fine, the fourth major against the U.S. manufacturer since 1998 for production issues, is actually four separate violations.
European Union transport ministers this week agreed to extend government support for third-party war and terrorism insurance coverage by 60 days. The current support system was due to expire March 31. The EU is aligning with the U.S., which recently extended its coverage, also by two months.
Former United CEO Jim Goodwin received close to $1.5 million in salary and bonus in 2001, the same year the company posted the largest loss in its 75-year history. In an issue that will do little to improve labor relations at the company, parent company UAL Corp. yesterday revealed in its annual proxy filing that Goodwin also received $5.4 million in severance when he resigned from the airline and will continue to receive an office and secretary for the next five years.
The European Union adopted new airport noise rules, whose low profile sparked protest from the Belgian government, at an EU transport ministers meeting this week in Brussels. The new directive, which defuses a conflict with the U.S., replaces existing rules that were aiming at banning hushkitted aircraft at EU airports, starting in April. "We are pleased that the [EU] has reached agreement to repeal the European hushkit regulation," said U.S. State Department spokesman Richard Boucher yesterday in Washington.
EgyptAir will close its Singapore office on July 5 and relocate its regional operations to Kuala Lumpur. The nine local workers would be laid off while three expatriate staff would be transferred to KL. The move is part of the airline's decision to bypass Singapore on the twice-weekly, flights from Cairo-Sydney. Starting July 9, the flights will operate via KL, using Airbus A340-300s. EgyptAir will be the first carrier to bypass Singapore and relocate its operations to KL, an office that will be responsible for Malaysia, Singapore and Brunei.
Travelocity.com reached a deal purchase Site59.com for $43 million in cash as part of its plans to boost revenues this year. Site59 was launched in May 2000 and offers last-minute travel packages that combine air, hotel and rental car inventory. Travelocity.com plans to operate Site59 as a separate unit and it expects to "begin generating revenue from last-minute travel operations immediately." The company this summer expects to start selling hotel rooms using inventory from Site59, and it expects the deal to be accretive to earnings this year.
When Infraero, Brazil's airports agency, was about to dismantle grounded Transbrasil's infrastructure in the country (DAILY, March 2000), a last-minute injunction issued by a federal judge in Brasilia is forcing Infraero to return all repossessed areas and facilities to the carrier and put the process on hold. According to the injunction, a prior administrative, legal, accounting and financial audit is necessary to ascertain the alleged debts to Infraero for a total of $50 million.
UAL's board last week named John Walker as a new member to fill the position vacated by Jack Creighton when he became CEO. Walker is CEO of West Virginia-based Weirton Steel Corp. Walker joined Weirton in March 2000 as president and chief operating officer and was named to his present position in January 2001. The board met Thursday in Chicago at the company's headquarters and also heard an update on safety and security.
LanChile on April 4 will introduce service from Vancouver via Los Angeles as part of its code-share alliance with Alaska Airlines. The Latin carrier aims to offer passengers easier and quicker connections between Western Canada and Chile and other South American destinations. The code share includes reciprocal benefits and mutually accrued mileage in frequent flyer programs. To handle expanded operations in Western North America, LanChile named marketing executive Juan Ricardo Castillo sales director.
Delta, effective immediately, cut the recommended airport arrival time for passengers on domestic flights from two hours to at least one hour before departure. Beginning April 15, however, Delta will require that passengers be checked in and at the gate for their flights at least 15 minutes prior to departure, rather than the previous 10-minute limit. The new rule aims to improve the on-time departure rate. Customers are still required to complete baggage check 30 minutes before departure.
Data Systems&Solutions (DSS), the Rolls-Royce/SAIC joint venture, will provide its real-time, web-accessible engine data trend monitoring for ExpressJet Airlines' fleet of AE 3007s, DSS said. The agreement covers all engines on ExpressJet's fleet of Embraer ERJ135s and 145s for "up to 15 years," starting May 1. ExpressJet operates some 140 ERJs and has more than 100 on order.
Leaders from US Airways" pilots union yesterday blasted new CEO Dave Siegel for warning that the airline's compensation formula is too expensive. In reference to the airline's parity plus 1% pay formula, Siegel told staff Monday, "Continuing to tie our compensation plan to those of the four largest U.S. carriers does not make a lot of sense in today's airline industry environment.
Michigan Gov. John Engler (R) yesterday signed legislation that creates a new, independent seven-member authority to run Detroit Metropolitan Airport. Engler, after signing the bill at the airport's new midfield terminal, said, "A well-run airport sends a signal across the world that Michigan is the right place to travel and do business." The authority will have full control over all airport facilities and operations, including maintenance and security, as well as construction or expansion projects.
Shareholders of Cintra, the holding company that controls AeroMexico and Mexicana, has approved its own restructuring to pave the way for the separate sale of these major carriers, plus their subsidiaries and affiliates, through a scheme that will safeguard their economic value and strategic position.
Hong Kong-based Dragonair will increase services to 14 of its 17 destinations in China with the summer schedule. Shanghai will rise to 56 flights a week from eight and Beijing to 42 from 37. Xiamen will increase to 11 from daily; Hangzhou and Nanjing to 10 a week from daily; Guilin to nine a week from daily, and Chengdu to eight a week from daily. Kunming and Qingdao will go up by one to five weekly, Chingqing doubled to four weekly, Changsha, Dalian and Ningbo from twice weekly to three a week and Wuhan to twice weekly.
Oneworld named Filip Lemmens corporate sales manager, in line with the alliance's plans to aggressively pursue corporate contracts. In his new role " which follows a shuffling of responsibilities among the alliance's central sales team " Lemmens will be responsible for developing a strategy for the group's corporate sales product and oneworld global sales. He will continue to report to Maunu von Lueders, VP-sales, working from the Vancouver offices of the oneworld management company. Before joining oneworld, Lemmens worked for American in his native Belgium.
There were 531 fatalities attributed to U.S. scheduled airliner crashes last year, with half occurring in the four aircraft hijacked on Sept. 11, according to National Transportation Safety Board statistics. Last year's total was the highest since 1977, when a KLM Boeing 747 collided with a Pan Am 747 in the Canary Islands.
United next month plans to start implementing a new type of corporate contract agreement while launching a new software program to more accurately track the deals. "We believe that share-based measurement of our corporate volume agreements versus revenue based is the way the industry has to go," said President Rono Dutta. The airline has contracted with New Mexico-based Prism Group to implement the Corporate Solutions product.
American continues to repaint the 136 TWA aircraft operating in its system. As of March 22, 77 aircraft have the AA livery and eight have the TWA interim livery.
Swiss has signed an agreement with American on a bilateral alliance that is expected eventually to lead to full membership in oneworld. The carrier said the two sides are targeting code-sharing services around their respective hubs in the U.S. and Switzerland, as well as reciprocal frequent flyer program recognition and other typical alliance features. Swiss also plans to replace its13 MD-11s with 13 Airbus A340-300s in a deal worth $1.3 billion, with deliveries starting in summer 2003. Swiss CEO Andre Dose said he expects to join oneworld this year.
