Two of Brazil's Big Four carriers -- Varig and TAM -- dominate the international airline market in South America's largest country. Financially troubled Vasp has suspended all international routes and Transbrasil's role has become minor. While Varig has been restructuring finances and operations, during the last two months TAM's international prospects improved after it was awarded 43 routes, many of them long-haul. Varig, which had been operating most of Brazil's international routes, was awarded 20.
British Airways and Thomas Cook plan to merge their existing U.K.-based tour operations into a powerful joint venture. Thomas Cook Holidays and British Airways Holidays will form a new company to be equally owned by both. The new firm expects to be fully operational next spring, subject to approval from the European Commission.
A blocked grease "passageway" on a key part of Alaska Airlines Flight 261's horizontal stabilizer jackscrew assembly may have kept the part from being adequately lubricated, leading to excessive wear and the failure that brought the plane down, information from a National Transportation Safety Board (NTSB) report released yesterday shows.
Thai Airways International maintains that the evaluation process carried out to acquire new aircraft for the 2000/01 to 2004/05 period was carried out according to regulations set by the company as a state enterprise. But concern over aircraft pricing has caused the Ministry of Finance to put the order on hold, at least for now. The Thai government is the airline's majority shareholder, with 93%.
Turkey today plans to start the sale of 51% of Turkish Airlines. Under the partial privatization plan, the majority holding will be transferred to a "strategic buyer," preferably an international airline, according to Dow Jones. Foreign operators can only bid with the participation of Turkish investors. Bids for the holding will be collected until the end of February and the sale is scheduled to finish by April. The government will retain a 49% stake in the airline and will keep preferred stock to maintain control.
United and its International Association of Machinists recessed talks yesterday after a week of intensive negotiations. IAM spokesman Frank Larkin said the recess is not expected to be lengthy, and the mood among negotiators was significantly better than the last time talks broke off. Despite progress, there has been no tentative agreement. Both sides agreed to take a break to reflect on their respective positions, United said.
A European Union court upheld a complaint by Alitalia against the European Commission's handling of the airline's recapitalization of the ailing carrier. The court annulled an EC ruling made July 15, 1997, which imposed conditions on Alitalia in return for the approval of what was considered state aid. The court ruled that Alitalia was right when it claimed that the cash injection could be compared to an investment by a private investor. But the EC said the operation did not abide by the private investor principle.
Sales of large civil transports declined $7.2 billion to an estimated $31 billion during 2000, comprising most of 4.9% or $7.4 billion decline in aerospace sales for the year, the Aerospace Industries Association said yesterday. Year 2000 sales declined to $144 billion, down from a record $151 billion in 1999, but sales next year are expected to hit $155 billion as civil aircraft production regains momentum.
LanPeru yesterday suspended all domestic flights after LanChile terminated the insurance coverage on two Boeing 737-200s LanPeru was operating to four cities. LanPeru is looking to lease planes from other companies and hopes to begin service later this week. Peruval, which owns 51% of LanPeru, has been in an ongoing dispute with LanChile on revenue, cargo and operational issues (DAILY, Nov. 29). LanPeru suspended its service to Miami last month.
AeroMexico plans to start a new flight schedule Jan. 15 between Phoenix and Mexico. The move will increase available connection options for customers who want to depart for Mexico in the early morning and return to Phoenix in the late afternoon. With the schedule change, AeroMexico will offer 19 weekly nonstop flights from Phoenix to Guadalajara, Mexico City, Hermosillo and Guaymas with connecting service to additional cities in Mexico.
American's Association of Professional Flight Attendants is awaiting word from the National Mediation Board on whether the board will release the union and management into a 30-day cooling-off period. Meanwhile, the union plans a Dec. 22 informational picketing campaign at American's base cities, said APFA spokeswoman Leslie Mayo. APFA is angry at the company for allegedly trying to pay the rank-and-file "holiday hush money" in the form of an 8% pay raise.
FAA has promoted Ron Morgan to head its activities in Europe, Africa and the Middle East. Morgan, who has been director of air traffic services since 1996, will be based in Belgium.
United and its International Association of Machinists unit continued in contract negotiations over the weekend and yesterday, a sign that the two sides may be closer to a resolution. IAM reportedly submitted a new proposal to United on Friday, which IAM International spokesman Frank Larkin said was a counteroffer to United's proposal of Thursday. Larkin said yesterday that talks were continuing, but he did not know if they would extend through today.
Virgin Express Holdings plans to sell its low-cost subsidiary Virgin Express Ireland following a "number of approaches" from third-party investors. The decision from Virgin Express follows a strategic review of the airline performed by the new management team and will result in a "refocusing of the business" around its profitable routes out of its Brussels hub.
Preliminary analysis by Pratt&Whitney has not turned up any obvious clues that would explain why several in-service Airbus A330s powered by its PW4000-series engines turned up with cracked nuts on engine mount bolts. The U.S. enginemaker has looked at some of the problem nuts, and they "meet specifications," a spokesperson told DAILY affiliate AviationNow.com. "They are made of the correct materials and were manufactured correctly. There are no obvious manufacturing defects that would have led them to crack."
Southwest recently started using the Quantitude network to connect its web site to the Galileo computer reservations system for car and hotel reservations. The connection will allow Southwest to offer its online customers the inventory of 39 car rental companies and over 46,000 hotel properties. Southwest last week went live with its system to book car rental reservations online and is expected to launch its hotel reservations capabilities next year (DAILY, Dec. 5).
Boeing Chairman Phil Condit yesterday announced that the board approved a new share repurchase program and raised the quarterly dividend for the fourth quarter by 21% to 17 cents a share from 14 cents the previous quarter. The board authorized the repurchase of up to 85 million shares or about 10% of shares outstanding. Condit cited Boeing's "sold performance, strong backlog and robust cash flow" for the board's action. The company is now completing a repurchase program for 146 million shares that begin in 1998.
Et-china.com, China's leading e-commerce travel web site, extended its e-commerce agreement with China Southern Airlines through 2004. Et-china.com is jointly owned and operated by Et-china.com Investments, an Australia e-commerce investment company and China Southern Airlines. The 11-month-old Et-china.com's initial contract with China Southern was inked in December 1999 and was set to expire in 2002. The contract extension locks in the exclusive pact through December 2004.
Southwest, long adored by travel agents for paying higher ticket commissions than other major airlines, announced plans to cut its compensation, beginning Jan. 1, in order to keep costs in check. The new commission policy was expected and replaces a promise the airline made to the American Society of Travel Agents (ASTA) in March 1995 to pay agents a 10% commission on all Southwest tickets issued through Dec. 31, 2000. Currently, Southwest is the only U.S. major airline paying a full 10% commission with no cap to travel agents.
The civil aviation authorities of China and Vietnam have agreed on three-year trial of a revised route structure and airspace organization in the South China Sea area, according to ICAO Council President Assad Kotaite. The revised route structure includes the doubling of two major air routes to four parallel routes. A route across Hainan Island also will be opened.
DOT Inspector General's final report on airline customer service plans, due by yearend, will not be delivered to Congress until about mid-January, congressional sources said yesterday.To forestall legislation on a basic fair treatment bill for passengers, the Air Transport Association and member carriers promised improved passenger conditions in their voluntary Airline Customer Service Commitment.
Ground testing of a growth version of GE's CF34-8 engine, which will power many of the new-generation regional jets, is under way. FAA certification is scheduled for mid-2002.
