U.S. airlines could eke out a profit in the third quarter, according to Merrill Lynch. Analyst Michael Linenberg predicts a profit of $270 million, although 70% of that would be attributable to Southwest. Potential hiccups include "too much capacity coming back too quickly and a weak economic recovery."
With the battle over control and management of Transbrasil still deadlocked, rival airlines are circling the grounded carrier in hopes of gaining some of its fixed assets. In applications to Infraero, the government's airport infrastructure agency, TAM has its eyes on much-needed counter space at Sao Paulo's Guaurulhos Airport; newcomer Gol has proposed constructing new facilities at a Transbrasil hangar at the same airport, and Varig and others are standing in line for other facilities.
Thai Airways will increase its frequency on several routes in the Asia/Pacific region with its summer schedule, starting March 31. It will launch twice-weekly flights to Pusan and three-times-weekly service to Kuwait via Dubai. On June 1, the airline will introduce three-times-weekly services to Brisbane, which will go on to Auckland, making it 10 a week, with the other seven services operated via Sydney. On the same day, it will resume daily service to Los Angeles, which was reduced to three last October due to a drop in traffic.
Juan Emilio Posada, former president of Aces, will take over in March as president and CEO of the Avianca/Aces operating alliance, the carriers announced recently. Former Avianca President Vitis Didziulis, as well as 15 of 22 Avianca VPs, will become advisers for the transitional phase of the combined operation. The new organizational chart and timetable were prepared with the help of U.S. consulting firms McKinsey Co. and Korn Ferry.
A narrowbody diversion resulting in an overnight stay costs an airline as much as $29,000, or some $14,000 more than the average revenue generated by the flight, an irregular operations study for Megadata Corp. from consultants Darryl Jenkins and Bill Cotton found. A widebody diversion costs up to $182,000, compared to average revenues of $150,000.
Continental expects a "significant" loss in the first quarter and an unprofitable year, despite what are expected to be money-making second and third quarters, the com-pany said in a securities filing yesterday. It expects to "incur a significant loss in the first quarter of 2002," the carrier said. It also expects to lose money in the fourth quarter and for full-year 2002.
Virgin Express will start operating daily Boeing 737-300 services from Brussels to Athens and Lisbon from March 30, the low-cost carrier said yesterday. Virgin Express is bracing for head-on competition with Olympic Airways and TAP Air Portugal. "Since the demise of Sabena...the carriers, which are present on these routes, have taken advantage of their monopoly position to keep prices unreasonably high", said Virgin Express.
While Brazil was ready to return to the World Trade Organization's framework for a new round of negotiations with Canada over export subsidies for Embraer and Bombardier aircraft, diplomatic and aviation circles in Brazil welcomed Monday's news that Canada would not appeal the WTO's ruling. The move was made as a gesture of peace and with the hope that the five-year dispute may come to an end.
Aviation officials representing 154 countries and 24 international organizations meeting in Montreal this week agreed to develop and fund a security audit program through ICAO. The U.S. pledged $1.5 million annually for three years, with $1 million coming from the new Transportation Security Administration, along with money from the State Department and technical expertise and staff support from FAA, according to FAA Administrator Jane Garvey.
Midwest Express posted a 67.2% drop in net revenue for a loss of $2.1 million in the fourth quarter 2001, the result of the Sept. 11 attacks. CEO Timothy Hoeksema said the attacks, coupled with the economic recession, resulted in a "challenging and disappointing quarter financially." He said the airline cut capacity to adjust for lower passenger volume and reduced airfares to encourage travel, resulting in a "significant loss in revenue and our first annual loss in 15 years." Fuel was down about 32%, according to Michael Linenberg, an analyst with Merrill Lynch.
Fuel Cost and Consumption U.S. Majors, Nationals and Regionals January 2001 to December 2001 Total Total Cost Cents Per Gallons (Dollars) Gallon 2001 January Domestic 1,208,845,524 1,034,994,209 85.618 International 433,707,990 386,969,918 89.224
The Greek government announced yesterday that it would seek private investors to inject EUR100-150 million into ailing flag carrier Olympic Airways and pledged to restructure the carrier drastically. Plans include splitting flight operations from other activities and turning Olympic into a leaner short- and medium-haul airline, while shedding some 2,000 jobs.
Raytheon completed the first in a series of autoland flight tests using its Local Area Augmentation System at the Sale Lake City International Airport. A Boeing 737-900 equipped with Rockwell Collins GLU-920 multi-mode receivers was used. The landings included a series of hands-off approaches through touchdown and rollout on two different runways.
Air Canada is expanding its schedule to Florida to accommodate spring break vacation, putting an additional 29,000 seats per week between Canada and Florida. The airline will add one daily Montreal-Fort Lauderdale nonstop March 1-17, one additional Toronto-Miami nonstop from March 1-18, and one additional daily Toronto-Orlando nonstop March 1-April 16. Air Canada is also deploying new Airbus A321 aircraft on the Toronto-Fort Lauderdale and Toronto West-Palm Beach routes until April 6.
Qantas posted a profit of A$153.5 million (US$81.2 million) for the first six months ended Dec. 31, a drop of 44.5% from the corresponding year-ago period. Total revenue was A$5.7 billion, an increase of 11.1%. Expenses increased 16% to A$5.4 billion. This was attributed to the cost of wet-leased aircraft, higher fuel costs, as hedging benefits were no longer available, and higher engineering costs. Fuel costs increased by A$224.2 million, a jump of 34.3%.
American asked DOT to approve its Miami-Medellin, Colombia, authority so that it may accelerate the launch to June 1. While AA has approval to start no earlier than Oct. 1, it said Colombia "is now willing" to allow service to begin June 1. (Docket OST-02-11620)
China Airlines, after serving Haneda Airport for 17 years, will switch its Tokyo flights to Narita Airport when the facility's second runway opens April 18. On the same day another service would be added to existing triple daily Taipei-Tokyo service, making it 22 a week.
Key leaders of the oneworld alliance met this week in Santiago, Chile, and yesterday affirmed the commitment of the eight-member airline group to strengthen and expand its cooperative efforts as it shifts course following the decision by American and British Airways to withdraw their bid for antitrust immunity in the U.S.-U.K. market. "The ruling by the U.S.
Pratt&Whitney will venture for the first time into Latin America today when it opens today a major repair plant in Tijuana, just south of the U.S.-Mexico border. The plant will service and repair engines, reverse thrusters and other components for the region's airlines. P&W invested more than $2 million and will hire 120 workers when it reaches full capacity in about a year. The Tijuana facility will join 20 similar P&W service and repair plants around the world.
Boeing has added former aircraft maker and long-time supplier Vought Aircraft to its Sonic Cruiser development team. Vought, which designed and built some 15,000 planes from 1917 to 1983, now provides major aerostructures, such as skin panels, as a subcontractor. It has contributed to a variety of major commercial and military programs, including the 747, 757, 767, DC-10, B-1, B-2, and C-17. Vought began supplying commercial components to Boeing in 1968 as part of the 747 program.
A mass phase-out of older aircraft that picked up steam with post-Sept. 11 capacity cuts will result in a much younger U.S. fleet by 2003, a Deutsche Bank Alex. Brown (DBAB) forecast shows. One byproduct of the trend: falling aircraft market values, both for planes being parked and the next-oldest ones remaining.
