AIRCRAFT TRANSACTIONS FOR OCT 9 - 11, 2000 Seller/ New Type / Previous Operator Owner Engine Operator Boeing Southwest Southwest Boeing 737-700/ CFM56- 7B22
DOT last week granted $148.4 million, from FAA's Airport Improvement Program, to construct a new, parallel runway to serve as the primary landing runway at Cleveland Airport, including funding for environmental impact mitigation.
ICAO has prepared draft legislation that addresses problems related to air rage. "The problem relating to unruly/disruptive passengers continues to be of concern of the international aviation community," said President Assad Kotaite in his yearend review. The draft includes a list of on-board offenses and addresses the issue of jurisdiction. The legislation, to be completed this year, will be recommended to all ICAO airlines for adoption.
US Airways last week opened its new Cargo Customer Contact Center in Campbellsville, Ky., offering customers help in arranging and tracking cargo shipments.
Frontier Airlines, following the move of its general offices this month, plans to relocate its call center to a 16,000-square-foot facility near Denver International Airport. Frontier recently signed a 10-year lease at Gateway Office Four, LLC to house its Denver call center and other customer service departments. Construction on the single-story building is scheduled for completion in July.
Air Canada's expected fourth quarter results could be the early signs of a softening economy that could hurt the airline if the economy doesn't spring back, Canadian analysts predict. Air Canada recently announced plans to reduce its work force by 3,500 through attrition, a voluntary separation program and "other measures."
Honeywell's acquisition by GE may be slower than expected, said JSA Research. GE has vowed that it will close the merger with Honeywell by February, but only several days after the announcement, Honeywell told the SEC that the companies set a walkaway date of June 30. If the deal is not done due to regulatory delays, the date would be extended to Nov. 30. The Justice Department is expected to file a second request for information, indicating the deal "could be facing a tough review," analyst Paul Nisbet said.
European Union transport ministers have postponed a decision on the planned satellite navigation system Galileo, which would supplement GPS. Member states could not reach agreement on details of financing and said ministers would take up the issue again at their next meeting in the spring. European space company Astrium, which hopes to be selected as prime hardware supplier, said a further delay could endanger the deployment schedule. Galileo is planned to be operational by 2008.
Southwest's stock hit a new 52-week high last week, reaching $34.99 a share Dec. 28. Salomon Smith Barney recently raised its fourth quarter and 2001 earnings estimates, noting the carrier "continues to benefit from others' misfortunes." Southwest enjoyed spilled traffic from carriers facing labor disruptions and benefited from "well-timed" fuel hedges. TWA's stock, on the other hand, hit a new 52-week low Dec. 28, trading at $1.00 a share.
Income for DHL Worldwide Express grew 20% this year in Venezuela, mostly through expansion and diversification, allowing the carrier to reinvest $20 million in the country. According to Randall Fernandez, DHL marketing manager in Venezuela, sales surged to $30 million. "In spite of economic recession," he said, " we found resources to build our new headquarters, to be completed by February 2001, and to buy a new aircraft for $10 million." In Venezuela, DHL operates with its own fleet of six aircraft flown by Venezuelan pilots under the national flag.
After more than a year of discussions about closing Aeroparque, Buenos Aires' second major airport located in the park area near downtown, the Ministry of Economy and the City of Buenos Aires signed an agreement that calls for moving the main runway to adjoining land to be reclaimed from the River Plate. This plan still is subject to approval by the municipal government. The new runway would be longer and safer to avoid fatal accidents, such as that of a LAPA 737 on takeoff in August 1999.
Airline consultants Avitas predicted the rate of growth in air traffic will slow considerably this year. The increase in international scheduled passenger traffic in 2001 is expected to be 4.1% and domestic traffic markets will rise by just 0.8%. All air traffic will grow by 2.7%, Avitas said. The company also said that aircraft sales with net orders for new jet aircraft of all types will be fewer than 900 units this year and next. Much of the decline will be attributable to a decrease in the number of orders for narrow body jets.
Aviation Week Newsletters, which includes Aviation Daily, announced that Winnie Jefferson has been named advertising sales manager. She is responsible for advertising for The DAILY, Aerospace Daily, Business Aviation, Airports and ATC Market Report. She can be reached at 202-383-2467 or winnie_jefferson@ aviationnow.com.
Two rules published Friday give operators of some 1,000 Boeing jets six years to swap drip shields and ducts that do not meet flammability standards -- one year longer than FAA originally proposed. Commenting on drafts of the rules published in August, operators told FAA the extra year would fit better with heavy maintenance schedules and cut down on unplanned downtime. Cost of the fixes could top $6 million, FAA estimates.
America West and Continental severed all remaining equity ties when America West repurchased all 159,000 shares of its Class A common stock held by Continental. America West paid Continental $10.8 million for the shares and the payment will be accounted for in 2000 as a reduction in America West's stockholders equity. Continental and America West continue their marketing and code-share partnership, although sources at both carriers said they are considering changes in those areas as well.
World Fuel Services Corp. signed an agreement with Orlando, Fla.-based Signature Flight Support Corp. to acquire a 50% equity interest in Page Avjet Fuel Co. for a price not to exceed $3.5 million. With the acquisition, which was expected to close by Dec. 31, World Fuel Services will establish a joint venture with Signature.
Australia's aviation regulators met with representatives from Ansett Australia and Boeing last week to begin their investigation into how the airline missed a critical, manufacturer-recommended aging aircraft inspection deadline on its 767-200 fleet. "We will sit down with Ansett and Boeing to go through what happened," Civil Aviation Safety Authority (CASA) spokesman Peter Gibson told DAILY affiliate AviationNow.com.
Merrill Lynch lowered its 2001 GDP forecast twice last month to 3%, reflecting 2.5% GDP growth in the first half, rebounding to 3.5% in the second half. "While 2.5% is clearly not a recession," analyst Mike Linenberg noted that since the U.S. airlines were deregulated in 1978, every time GDP growth dropped below 2%, the U.S. airline industry lost money. In the meantime, November unit revenue for the industry grew 6.1%, driven by higher yields.
In one of the most serious incidents of air rage to date, a British Airways Boeing 747-400 was temporarily out of control Friday en route from London Gatwick Airport to Nairobi, Kenya. Five people were injured when the aircraft started a sudden and rapid dive and -- according to passenger reports -- steep turns. There were 379 passengers, three flight crew and 16 cabin crew on board.The incident, the latest in a series involving European airlines, raises questions about how carriers can better control unruly passengers in the future.
