Air cargo operators soon will form strategic alliances with other cargo operators in a fashion similar to the passenger market, predicts consultants Morten Beyer&Agnew. Star Alliance and oneworld "could offer the framework for global cargo networks in the near future," MBA says.
Rolls-Royce was selected by British Midland to supply Trent 700 engines for the airline's new fleet of Airbus A330-200 aircraft. Rolls valued the business, including spares, at $350 million. British Midland has an initial order for four A330s with options for eight more.
Atlantic Coast Airlines expects to see increases in traffic and revenue sometime in the second quarter as US Airways continues pulling service at Washington Dulles. ACA Chief Executive Kerry Skeen said last week that in June US Airways will decrease the number of departures to markets in which it competes directly with ACA to 59 compared to 68 at the same time last year.
Proponents for a go-slow approach to a new Stage 4 noise rule did not get a lot of encouragement from a congressional aide and others who spoke last week at an aircraft noise symposium. Congressional reaction to moves toward a Stage 4 noise rule will be influenced by constituents in various districts, according to David Heymsfeld, democratic staff director, House Committee on Transportation and Infrastructure. "There is a lot of local politics involved in aviation noise issues," Heymsfeld told a Stage 4 noise symposium held April 19 in Arlington, Va.
The Malaysia government will not allow Malaysia Airlines' shares to be sold to a foreign carrier. Prime Minister Mahathir Mohamed said this move maintains the identity of the national carrier and keeps control in the hands of Malaysians. "Selling to a foreign investor would mean selling your identity. Should the airline need to sell some of its shares, it may do so but it must be sold to a local investor," Mahathir said. Naluri, the major shareholder with 29.09%, has to sell part or all of its shares under a debt restructuring scheme, Mahathir said.
The board of Canadian Airlines last week officially approved the company's financial restructuring plan, including compromises for secured note holders and certain unsecured creditors. The plan will be filed tomorrow and meetings with affected creditors will be held May 26 in Calgary. If creditors approve the plan, it could become effective on or about June 15. The plan proposes that senior debt holders become creditors of the airline and not the corporation.
Correction: Air Philippines' Boeing 737 that crashed on Wednesday was not owned by AAR Corp. (DAILY, April 20), but by Fleet Business Credit Corp., with a lien held by First Security Bank, according to AAR. AAR had acquired the aircraft in November 1998 and held it only until Feb. 1999.
Continental's first quarter profits plunged 73% as drastically higher fuel prices offset stronger traffic and unit revenues. Surpassing analysts' estimates, net income totaled $14 million, compared with a $52 million profit last year. Revenue swelled 11.5% to $2.3 billion from $2.0 billion, but yields were virtually flat at 13.03 cents. A fuel price hike of 120.5% drove up the cost per available seat mile by 6.7%.
In a surprise move, Lucio Tan, executive chairman and majority shareholder of Philippine Airlines, has decided to sell his entire 69.7% stake in the carrier. Tan earlier said he would sell 65% of the stake and remain a minority shareholder. Tan's decision comes as a surprise not only to the carrier's employees but also the Ministry of Finance (MOF). According to MOF Secretary Jose Prado, Tan expressed his intention to Philippines President Joseph Estrada late last week. Prado said Tan also will auction his 40% equity in the Philippine National Bank (PNB).
Express I Airlines, flying as Northwest Airlink, reported a decrease in capacity of 5.6% in March, with traffic virtually flat -- down 0.3% -- bumping the load factor 3.6 percentage points to 65.7%. It was the carrier's best-ever record for March. Passengers flown declined 6.8%.
Aviation Sales' revenues for fiscal 1999 rose to $671.5 million from $500.8 million in 1998, but it reported a net loss of $21.7 million. It had net profits of $25.5 million in 1998. It also reported that it is not in compliance with certain of the financial covenants in its credit agreements with senior lenders, who have agreed to extend the forbearance period until May 31.
Emirates and Philippine Airlines have signed a codeshare agreement for flights between Manila and Dubai. PAL, which suspended its Dubai service in June 1998, will get a seat allocation on Emirates' thrice weekly service starting Sept. 1. PAL has two other such agreements with Malaysia Airlines and Egypt Air.
United is focusing on improving its baggage handling at London Heathrow this year following a period in which it had a mishandled baggage issue for one in every 80 passengers. The carrier has had a difficult time at Heathrow with interline baggage transfers due to Heathrow's spread-out terminals and centralized handling facilities at each terminal. Last month, the London station's mishandled bag rate averaged 8.28 per 1,000 passengers, compared with 10.63 a year ago. Heathrow finished 1999 with a 12.75 mishandled bag rate, but this year set a goal of 11.6.
As the day came yesterday for airlines to be forcibly moved from Milan Linate to Malpensa airport, further chaos erupted as a Lufthansa flight was diverted in mid-air to the new Malpensa facility. As Italian authorities forced airlines to comply with the so-called Bersani Decree, some flights were moved to Malpensa; others were canceled. The decision is being sharply criticized by most airlines. An expert group investigating the matter said Wednesday it had "serious doubts" whether the Italian ruling complied with European legislation.
U.S. hopes for working toward open skies with Hong Kong were sidelined this week following three days of negotiations that yielded little movement on the part of Hong Kong to liberalize the aviation bilateral. While the U.S. delegation was encouraged by a willingness by Hong Kong to expand passenger code-sharing opportunities, it was disappointed that, in general, Hong Kong's proposals "did not give life to its vision of the city as a world-class aviation hub," the U.S. said. The U.S.
EVA Air reported a profit of US$37.36 million for the year 1999, representing almost a 17-fold increase from the previous year's US$2.26 million. Of the total revenue of US$1.562 billion recorded, passenger earnings accounted for US$847 million and cargo US$664 million. EVA's junior VP-business and corporate planning Moody Tsai Ming-fang attributed the increase in profits to the recovery of the regional economies and the airline's 5% increase in capacity. Tsai said had it not been for the Sept.
American Eagle will start regional jet service between Oklahoma City and Dallas/Fort Worth July 5. It will add a ninth flight on May 1 that will operate with ATR turboprops. The airline will replace turboprops on four of the nine round-trip flights between the two cities with 50-seat ERJ-145 regional jets. American has three mainline jet flights on the route as well. In addition, Eagle will begin nonstop RJ service between Boston Logan and Toronto beginning July 17 with four daily roundtrips using new 37-seat ERJ-135s.
