Northwest, boosted by strong demand in passenger and cargo operations, reported a third quarter profit of $207 million, a jump of 15% from the 1999 period. Without the gain from a Worldspan arbitration ruling, the airline's profits still grew 6.1% to $191 million. Fuel costs, up 58.7%, boosted expenses 14.2% to $2.8 billion. The carrier had none of its fuel requirements hedged last quarter but is 75% hedged through yearend. Northwest had a stronger-than-expected 5.9% improvement in yield, however, and an 8.6% gain in unit revenues.
GKN of the U.K. said it intends to buy Boeing's St. Louis fabrication operations, establish administrative offices in the city and transfer non-Boeing manufacturing work to St. Louis. About 1,500 Boeing employees now work at the facility, and GKN said it will employ about 1,200 of them.
FAA yesterday issued directives on how public agencies may conduct annual audits of passenger facility charges they collect from airlines. FAA said that while the guidance is "voluntary," it will have "greater confidence in audits conducted in accordance with the guide." Public agencies approved by FAA to collect PFCs are required to provide an annual independent audit of revenue collected. The guidance describes the receipt, holding, use and reporting requirements, FAA said in the Oct. 19 Federal Register.
United's nightmarish summer was worse than expected as the carrier posted a $116 million loss yesterday, nearly double what many analysts had predicted. The airline's operational problems and dramatic capacity reduction cost the carrier as much as $500 million in revenue at the same time that its fuel and wage expenses soared. "It was clearly a difficult quarter for us," CFO Doug Hacker said in an understatement.
Chinese leaders meeting with U.S. officials today in Seattle may receive a creative proposal that would allow frequencies provided for in the bilateral but unused by Chinese carriers to be operated by non-incumbent U.S. carriers. How this would be accomplished is not clear, according to sources familiar with the U.S.-China negotiations, but the U.S. likely would make the market-opening proposal prior to further formal negotiations. While the U.S.
DHL Worldwide Express and the U.S. Postal Service have expanded their alliance to include the international transportation, customs clearance and package delivery to 49 countries in Latin America and 179 countries worldwide, it announced this week. Priority Mail Global Guaranteed, which the two companies offered during a trial period, has been renamed Global Express Guaranteed, with expanded delivery options to include items other than documents.
Polar Air Cargo has taken delivery of the first of five new Boeing 747-400 freighters being leased from GE CAS. The aircraft will connect New York and Chicago with Tokyo, Hong Kong and Taiwan.
British Airways plans to introduce a random alcohol- and drug-testing program early next year, the first to be introduced by a major European airline. A working group has been set up to develop the program and BA has invited its unions to participate in that group. Initial discussions have begun with both the U.K. Civil Aviation Authority and the Department of Environment, Transport and the Regions. "Safety is paramount in British Airways," said Director of Safety David Hyde.
Thai Airways, moving ahead with its five-year development and modernization plan, will purchase five new aircraft, one medium-range and four long-haul. According to Thai's newly appointed president, Bhisit Kuslasayanon, the acquisition is in line with the carrier's aim to strengthen its revenue-generating potential and upgrade its safety standard. Bhisit declined, however, to identify the aircraft type that Thai has selected, saying that approval from Cabinet must be sought first before a decision is made.
The Senate could take up before adjournment this week or next a House-passed bill prohibiting "the growing misuse" of genuine and counterfeit police badges to commit crimes or gain illegal entry to airports, according to a spokeswoman for Rep. Stephen Horn (R-Calif.). The bill also would prohibit the use of badges to gain entry to secure areas of government buildings.
Britain's EasyJet will offer stock for the first time in November but indicated that it would not proceed if market conditions were too unfavorable. The airline will offer 63 million shares, or 25% of its enlarged equity, to institutional investors. Existing shareholders, who will see their holdings diluted, do not plan to sell shares. Analysts have put a value of about 500 million pounds ($723 million) on the airline. Pricing and allocations will be announced Nov. 14, and conditional dealings will begin the following day.
Biman Bangladesh Airlines is seeking a strategic airline partner. The carrier would receive a 40% stake under Biman's privatization plan, approved by the government. Under the plan, the government will retain 51% while the remaining 9% would be given the airline's employees. Biman Managing Director Rafiqul Islam said Asian carriers will not be considered for competitive reasons.
Air Jamaica Express, Jamaica's largest domestic carrier and Air Jamaica's commuter partner, plans to start inter-island service to the Turks&Caicos Islands. Beginning Nov. 11, Air Jamaica Express will start five weekly nonstop flights to Turks&Caicos out of Montego Bay. The new service will operate on with de Havilland Dash 8-100s.
Pending management changes and the government's proposed acquisition of Naluri Holdings' 29.02% in Malaysia Airlines have place all business transactions involving the carrier's assets on hold. Topping the list is the engineering training division and the aviation training simulator division, which was supposed to have undergone some changes as a partner of a new company to be set up with Boeing FlightSafety. Both divisions are under the MAS Aviation Academy, a subsidiary of the airline.
Negotiations held last week between TWA and the San Juan (Puerto Rico) Port Authority ended satisfactorily when the carrier paid $2.2 million of the $2.5 million it owed in back rental fees for facilities at Luis Munoz Marin Airport, from where it will continue to operate normally its 15 daily flights to various mainland destinations, soon to be increased by three to Miami.
America West Holdings barely turned a profit, as third quarter net income plunged 94.1% to $1.3 million due to high fuel prices and continued operational difficulties. America West Airlines posted record revenues of $578.5 million, up 8.3% from 1999, but the carrier reported an operating loss of $920,000, compared with a $38.8 million profit last year. It attributed the loss to the "poor operating performance" in the first half of the quarter, said CEO William Franke.
The House this week gave final congressional approval to bills authorizing the Interior secretary to convey 6,400 acres of public land to Clark County, Nev., for a second airport to serve the fast-growing Las Vegas metropolitan area. The House also passed a three-year, $216 million bill funding the National Transportation Safety Board. Both bills already have been backed by the Senate and now go to the White House for President Clinton's expected approval.
Accelerated aviation liberalization is necessary to keep pace with the expected surge in U.S.-China trade and travel following China's entry into the World Trade Organization, Under Secretary of State Alan Larson said this week at the U.S.-China Aviation Symposium in Washington.
Canada's transport minister yesterday granted Canada 3000 rights to fly scheduled service to India. The carrier also contracted for nine Airbus A319 aircraft configured for 142 seats and capable of flying transcontinental. The aircraft will be phased in over the next two and a half years, the carrier said.
US Airways lost $30 million in the third quarter and warned of a fourth quarter deficit as well. The airline is suffering from soaring fuel costs, weather delays and intense competition from low-fare carriers, said CEO Rakesh Gangwal. US Airways reported an $85 million loss in the comparable 1999 period.
Fortis Aviation was appointed by KeyCorp Leasing of New York and United Capital of Connecticut to remarket three DC-8-60 freighters following both banks assuming control of the aircraft from the Kitty Hawk Group of Dallas.
American parent AMR Corp. showed a net profit of $322 million before a one-time loss, up 12.2%, and aided by stronger yields, higher demand and adept fuel purchasing strategies. Revenue swelled 11.9% to $5.3 billion, partially helped by fare increases during the period. "The underlying fundamentals of our business -- both traffic and pricing -- remained solid and combined to generate double-digit revenue growth," said CEO Don Carty. American was the primary beneficiary of United's summer labor dispute, gaining $80-100 million in revenue.
U.S. Trade and Development Agency and the FAA are hosting a delegation of 20 Latin American and Caribbean aviation officials Oct. 23-26 at the FAA Technical Center in Atlantic City. The delegation will tour technology and security efforts at the center, including an overview of Global Navigation Satellite System technology, the National Satellite Test Bed and see a demonstration of the Wide Area Augmentation System. Various security programs, including explosives detection and passenger and baggage screening, will be featured in the program.
