Northwest, boosted by unit revenue gains across its system, reported fourth quarter profit of $31 million, a slight 7% increase from the 1999 period. Including special charges, Northwest posted a $69 million net loss. The airline recorded $125 million pretax charges for the anticipated accelerated retirement of its DC-10 fleet and $26 million related to the sale of its Continental stock holdings. "The fourth quarter was challenging," said Chief Financial Officer Mickey Foret.
DOT's goal in releasing three studies detailing its analysis of competition, rather than the guidelines it proposed in April 1998, is to delineate industry practices on which DOT has the authority and obligation to act, DOT Secretary Rodney Slater told the Wings Club this week in New York. The studies lay out the economic policy and legal foundation underpinning DOT's enforcement powers "in the future," Slater said.
US Airways lost $101 million in the fourth quarter and warned of a first quarter deficit as well. The airline continues to suffer from soaring fuel costs and intense competition from low-fare carriers, said CEO Rakesh Gangwal. US Airways reported an $81 million loss in the comparable 1999 period.
U.S.-Argentina 2001 rights for U.S carriers will be finalized today or tomorrow, according to a DOT official, with the order expected to award seven U.S.-Argentina frequencies each to Delta for April 1 Atlanta-Buenos Aires service and to Continental for Dec. 1 Newark-Buenos Aires service. (Docket OST-99-6210)
DOT will issue, by week's end, a revised order reducing proposed ownership reporting requirements for foreign carriers of the four Asia-Pacific Economic Cooperation nations that agreed to a multilateral agreement with U.S., according to high-level DOT source, enabling the accord to move forward.
American parent AMR Corp. showed a net profit of $56 million before special items, down 35.6%, due to severe weather across its system and high fuel costs. Revenue swelled 8.3% to $4.9 billion, partially helped by high loads and rising yields. "We had a challenging fourth quarter," said CEO Don Carty. "While demand for air travel was strong, severe weather across much of our system resulted in lost traffic and higher operating costs."
America West Holdings posted a fourth quarter net loss of $47.4 million, ending a disappointing year that was plagued by high fuel prices and operational disruptions. The earnings included one-time charges related to the early termination of two aircraft leases and a write-down of excess expendable parts inventory. America West Airlines posted less-than-expected revenues of $562.7 million, up 1.9% from 1999, leading to a deep operating loss of $81.5 million, compared with a $36.1 million operating profit last year.
British Airways plans to operate the first scheduled service from London Gatwick to the Turks and Caicos islands, starting June 3. The new weekly service is expected to start June 3. The Boeing 767 service will fly on Sundays to and from Providenciales, the islands' main resort, via Nassau. It will be operated in a three-class configuration.
Bombardier Aerospace Regional Aircraft President Steven Ridolfi said the Dash 8 Q400 program is back on track after a series of unforeseen delays and glitches in the first phase of production. The 70-seat Q400 has been delayed several times, with delivery dates for the initial customers shifting backwards. With the first batch of aircraft finally having been delivered, launch customer SAS Commuter took the unusual step of temporarily grounding its fleet last year when operations were marred by false smoke alarms and similar nuisance warnings.
The two shareholders of Sabena, SAirGroup and the Belgian state, are holding talks over the recapitalization of the loss-making Belgian carrier, confirmed a spokeswoman for Belgian prime Minister Guy Verhofstadt. She claimed the talks were "going well." Sabena, which forecasts net losses of 8 billion Belgian francs in 2000 (US$187 million), called an extraordinary shareholders meeting Feb. 8, as requested by Belgian law for the companies that have lost more than half of their capital.
In January 2001, what is the most critical issue facing aviation in the U.S. and abroad? Mergers and airline competition are not No. 1. Nor is a Transatlantic Common Aviation Area. The leading issue is not as sexy as mergers or Internet ticket sales, but it has a much greater impact. It is infrastructure improvement.
AIRCRAFT TRANSACTIONS FOR OCT 19 - 25, 2000 Seller/ New Type / Previous Operator Owner Engine Operator Airbus US Airways First Airbus Security A319/ Bank NA CFM56-5B6/P Airbus China China Airbus Northwest Northwest A320-200/
American CEO Don Carty believes the economy is headed for a "soft landing" and told the Wings Club last week that the airline industry is "far better prepared" to sustain profitability in a slowing economy today than 10 years ago. If fuel prices stabilize, Carty believes American can "fly through a downturn without flying off a cliff."
Summary of U.S. Major Carriers Domestic Revenues and Expenses Second Quarter 2000 Total Operating % Passenger Carrier Revenues Change Revenues Alaska 411,879,000 2.73 367,177,000 America West 602,138,679 9.97 567,592,258 ATA 233,753,065 13.56 199,148,722 American 3,176,390,000 12.46 2,923,827,000
Fundamental changes are imminent for FAA, promising to change the way it does business in the near future, the Air Traffic Control Association was told yesterday. The changes include adapting to priorities imposed by AIR-21, coping with a new Management Advisory Board, transforming ATC into a performance-based organization and responding to a new CEO.
Continental's fourth quarter profits rose 31% to $38 million due to a strong operational performance and record yields despite higher fuel prices. Including special gains and charges, however, net income fell 73.7%. Airline executives highlighted Continental's strong operational performance during the period, noting that despite winter storms the airline completed 98.6% of scheduled flights. "While other airlines were busy doing deals or arguing amongst themselves," Continental was focused on "running a good airline," said President Greg Brenneman.
Boeing's fourth quarter earnings rose 32% from the same 1999 period, to $877 million, excluding non-recurring items, as operating margins reached 9.3%. Revenue dipped 3.3% to $14.7 billion. Boeing predicted commercial aircraft deliveries will remain flat over the next two years, offset by production in its military and space divisions and increases in production efficiencies.
Northwest announced plans to split an order for new long-haul aircraft that will replace some of its versatile DC-10s. As part of a long-awaited deal, the carrier will acquire 24 Airbus A330-300s and 20 Boeing 757-300s. Northwest also plans to add two Boeing 747-400s and six Airbus A319s to its fleet. The airline will become the second U.S. operator of A330s after US Airways started using the aircraft last year.
Summary of U.S. Major Carriers International Revenues and Expenses Second Quarter 2000 Total Operating % Passenger Freight Mail Carrier Revenues Change Revenues Revenues Revenues Alaska 34,535,000 15.08 32,885,000 466,000 228,000 Latin 34,535,000 15.08 32,885,000 466,000 228,000
House Transportation Committee is considering holding hearings on American's acquisition of parts of three airlines and increasing concentration in the airline industry, but has not settled anything yet since it is still in the process of organizing, a spokesman for new Committee Chairman Rep. Don Young (R-Alaska) said yesterday.
Europebyair.com and Amadeus have entered a partnership to provide travel products through a new business-to-business portal. Amadeus will provide Europebyair.com with technology services and a customized B2B platform, "Corporate Traveller," which offers a low-fare search product for the best fares. Europebyair.com will offer its discounted products and technology support. Europbyair.com and Amadeus will power the travel section of a new B2B portal to be released in France in upcoming weeks.
British Airways yesterday said it is investing $44 million in modifications to its Concorde fleet in hopes to resume supersonic service this spring. BA is spending more than $25 million on safety-related changes, with the rest going into new seats, cabin interiors and other service improvements. Engineers in the Concorde hangar at Heathrow now are preparing the first of seven aircraft for new fuel tank linings and new undercarriage wiring.
Days before the end of the Clinton administration, DOT presented its long-awaited airline competition approach, saying that guidelines would be premature and that it should build standards based on case-by-case reviews. DOT based its conclusion on three reports, released yesterday, that detail its review of airlines' competition concerns.
FAA plans to fine Horizon Air Industries of Seattle $90,000 for alleged failure to follow its own maintenance manual. FAA said an aircraft was used on more than 2,000 flights while not in compliance with federal regulations. FAA said that maintenance on a Dash 8 included a compass swing for an attitude/heading reference system and that Horizon failed to ensure it was operating properly before returning the aircraft to service. Horizon has 30 days to respond to the charges.
FAA issued an emergency order for inspection of BMW Rolls Royce BR700 series engines. It requires inspections of oil filter differential pressure switches following a report of severe engine oil loss caused by leakage from a defective filter. This could result in multiple engine inflight shutdowns. The engines are used on the Bombardier Global Express, Gulfstream V and Boeing 717.
