FAA yesterday rescinded an order that required tests to detect discrepancies in jet transports with Mode C transponders but not until finding that numerous transponders failed the tests. Over 50% of the test failures were reported "to be caused by the Mode C transponders," the agency said. FAA is conducting further reviews to determine whether a systemic root cause failure exists. It may consider further rulemaking based on the results. The order affected transponders with single Gilham code altitude input.
Virgin Express has sold 49.9% of its shares in Virgin Express Tax Free Shop to Alpha Flight Services. The agreement begins May 1 for five years, with a two-year option. Alpha will invest 1 million pounds. "This move is seen as part of a whole series of measures, which will lead to the improvement of the on-board product of Virgin Express and to the optimization of its organizational structure," the airline said. The joint venture will provide Alpha an exclusive contract to provide catering and in-flight retail products for Virgin Express.
Lufthansa may be interested in buying the 10% stake in Austrian Airlines that SAirGroup still holds. Austrian recently switched alliances from Swissair's Qualiflyer group to Lufthansa's Star Alliance. SAirGroup intends to sell the stake, but not below a share price of 30 euros. Austrian's stock closed on Tuesday at 16.25 Euros. Lufthansa declined comment.
TWA reported a first quarter loss yesterday, blaming higher fuel costs, employee wages and aircraft rental expenses. TWA, which has not earned a profit since the second quarter of 1998, posted a greater-than-expected net loss of $76.1 million. It lost $21.6 million in the first quarter of 1998. "This will be a challenging year, and we are facing many obstacles, but we have a plan in place to overcome these obstacles," said Chief Executive Bill Compton.
US Airways yesterday reported a $139 million operating loss in the first quarter, the result of high fuel costs, severe weather cancellations and uncertainties surrounding its now-solved flight attendant labor dispute. The airline said it fixed its chronic backlog of aircraft awaiting heavy maintenance, but is not out the woods yet as officials admitted yesterday that its MetroJet operation had problems "in every way" last year that carried into the first quarter.
Alaska Airlines' parent Alaska Air Group reported a first quarter net loss of $7.5 million, compared with a $20.2 million profit last year, largely due to soaring fuel prices. The results were far worse than analyst expectations as the airline paid an average fuel cost per gallon of 99.1 cents, up nearly 105% from the 1999 period. As a result, operating expenses jumped 17% to $506 million and unit costs rose 14.4%. Without the higher fuel prices, the airline claims cost per ASM would have increased 5.3%.
Boeing yesterday reported first quarter net earnings of $418 million, down from $469 million, which the company attributed to "lower commercial aircraft deliveries due to a 40-day labor strike" by its engineers. Revenues were $9.9 billion, down from $14.4 billion the same quarter a year ago. Boeing said quarterly revenues would have been $12.5 billion but for the strike, which resulted in 50 fewer deliveries. However, operating margins for the latest quarter were 5.6%, up from 5.1% a year earlier, despite the lower revenue.
United and American felt the effects of mushrooming fuel prices and weak traffic early in the first quarter but still managed to surpass analyst expectations with strong revenues. Excluding extraordinary items, United parent UAL Corp. posted a 2.1% rise in quarterly earnings yesterday on surprisingly strong March revenues. UAL earned a net $191 million, compared with $187 million a year ago, topping analyst estimates.
America West Holdings yesterday reported record first quarter net income of $14.6 million, down 43.6% from $25.9 million in the same quarter last year, but the company still managed to beat analyst expectations. America West Airlines posted record revenues of $544.9 million up 7.6% from 1999, but profits for the airline and The Leisure Co. dropped due a 69% increase in year-over-year fuel prices and continued operational difficulties.
The European Commission approved plans to expand the facilities of DaimlerChrysler Aerospace Airbus in Hamburg. The company applied for this as it tries to get the final assembly line for the planned Airbus A3XX in Hamburg. DaimlerChrysler Aerospace Airbus would have to expand into an environmentally sensitive area, a move that has been sharply criticized by local environmentalists. The decision puts Hamburg on an equal footing with the competing A3XX manufacturing site in Toulouse. Airbus is expected to make a launch decision for the A3XX in May.
America West told DOT that lack of a decision on United's bid to code share with British Midland on U.S.-Dublin via London should not hold up approval of America West's request to serve Ireland from Newark with Continental (DAILY, March 29). DOT has not acted on United's 1996 application, pending review by Irish authorities of the restriction that requires U.S. carriers to provide the same amount of service to Dublin as to Shannon. America West would fulfill that requirement on Continental's twice-daily Newark-Shannon/Dublin flights.
After years of lawsuits aimed at keeping long-haul service and Legend Airlines out of Dallas Love Field, American said yesterday it will begin "Executive Class" service from the airport on May 1. American will offer service to Los Angeles and Chicago using two gates it shares with Continental Express, which also was embroiled in a legal battle with American as it attempted to expand Love Field service. American plans to operate the flights from new facilities in the east concourse on May 28.
Travelocity.com posted triple-digit growth in total revenues, bookings and gross profits for the first quarter. The company saw 122% gains in total revenue to $35.7 million and a gross profit increase of 154% to $19.8 million. Online travel bookings went up 146% to $504.3 million. Chief Executive Terrell Jones attributed much of the gains to improved transaction speed and the introduction of new products and services.
KLM will move two of its flights operated with partner Alitalia on the Amsterdam-Milan Linate route beginning today. The transfer follows conformation from the Italian minister of transport that the new distribution of flights between Milan's Linate and Malpensa airports will be "fully implemented" by today's deadline. The European Commission said yesterday it has "serious doubts" about the Italian decree forcing airlines to move flights to Malpensa, according to Dow Jones.
An Air Philippines Boeing 737-200 crashed Wednesday on its second approach into Davao, Philippines. All 124 passengers, six crew and one mechanic are presumed dead. The aircraft, serial number 21447, made a second approach after an aircraft was on the runway, according to AvData Inc. Davao does not have an ILS system installed, and one weather report said there were low clouds at the time of the accident. The aircraft was an ex-Southwest 737 Advanced, which flew for the Dallas-based carrier from 1978 until October 1998.
Sabre Holdings reported 14.1% first quarter growth in electronic distribution revenues to $435 million, as total revenues increased 1.1% to $645 million. Expenses climbed 3.1% to $542 million. Revenue from information technology solutions dropped 18.3% to $210 million. Net earnings fell 29.2% to $66 million and operating margins were down 1.7 percentage points to 15.9%. Chairman William Hannigan noted that travel bookings growth exceeded the company's expectations across all distribution channels.
Amadeus and British Airways have entered a 10-year information technology partnership for distribution and customer service systems. Amadeus will operate and further develop BA's reservations, inventory and departure control systems and will take over the contracts of its subsidiary Speedwing to provide similar services to other airlines.
American, Northwest and United filed for 12 of the 14 U.S-Ghana frequencies available now for U.S. carriers under the open-skies agreement reached by the two countries in March. DOT previously designated three frequencies -- a total of 17 were specified in the accord -- for Northwest, which operates code-share service to Ghana with KLM three times weekly. Northwest filed for five frequencies in addition to the three designated by DOT. It wants to increase its Accra service via Amsterdam with KLM to five times weekly.
Four U.S. carriers filed for three U.S.-Turkey third-country code-share designations available now under the phased U.S.-Turkey open-skies pact agreed to last month. American, Delta and United each applied for a designation and seven frequencies, for year-round daily service; Northwest requested 14 frequencies for twice-daily service. A total of 21 frequencies may be designated now for service to Turkey via intermediate points (DAILY, March 27).
American's Allied Pilots Association is expected to wind down the latest round of talks with the company today on a possible extension of the union's contract. Mediator George Nicolau, who helped bring sides together in the Reno Air integration, took part in talks that resumed on Monday. The two sides have until May 31 to conclude an agreement.
The European Union's non-addition rule on hushkitted aircraft, slated to go into effect May 4, and the subsequent U.S. protest of it could impact efforts to reach a consensus on new Stage 4 noise rules, James Erickson, director of FAA's Office of Environment and Energy, said yesterday. Erickson, who also is the U.S. representative to ICAO's Committee on Aviation Environmental Protection (CAEP), said there is "concern" in the committee about its ability to keep the two issues separate.
Southwest reported a 0.2% fall in first quarter profits after fuel prices jumped 108.5% during the period despite higher load factors and traffic. For only the third time since December 1996, net income was down -- to $95.6 million, excluding the cumulative effect of an accounting change. The results surpassed analysts' expectations, however. After the one-time change in accounting for sales of frequent flyer credits, the airline's net income fell 23.3% to $73.5 million.
