Indigo, a "new category of business air travel," received its FAA air carrier certification as an operator of business jets through its sister operating company, AirServ, and has begun flying a number of corporate clients. The company this year is launching corporate business jet service weekdays between Chicago and New York on which customers "can purchase individual seats a prices competitive with full-fare coach tickets." Indigo's service will operate as public charter flights, flown by AirServ.
British Midland will go head-to-head with rival British Airways May 2 on three of the most important European business routes from London Heathrow -- Madrid, Rome and Milan.
Indian Sahara Airlines plans to acquire 12 Embraer EMB-120 Brasilia aircraft for its regional flights later this year. The airline also will phase out its two Boeing 737-200s with the addition of 737-400s next month. As it acquires the new aircraft, Sahara hopes to double its India market share from the current 8% to 16%.
The planned start of domestic carrier Philippine Airways (PAW) was aborted yesterday when the government withdrew its license. The government, through the Civil Aeronautics Board (CAB), had indicated on Jan. 31 that no more airline licenses would be issued for new scheduled carriers. PAW, owned by William Gatchalian, was given a license on Dec. 18. Gatchalian also has 50% of the equity in Air Philippines, which has the right to operate domestic and international flights. Gatchalian sold the other 50% to Philippine Airlines (PAL) Executive Chairman Lucio Tan.
Air France and Swissair are competing to buy Air Liberte from British Airways, which owns 76% of the financially troubled airline, according to French media. Air France is allegedly offering around 600 million francs to Swissair's 300 million francs. Air Liberte is expected to lose 330 million francs this year and reportedly has a debt of approximately 1.4 billion francs.
Austrian Airlines' traffic fell 1.1% in January and its load factor -- 60.4% -- was two percentage points lower than in the same 1999 month. Citing the year 2000 low season for the unusual traffic decline, the carrier cut flights 1.9% to avoid overcapacity. Austrian, which plans to issue results April 12, has warned that profits will fall significantly for fiscal 1999 because of the Kosovo crisis and the unstable political situation in Turkey, a major leisure market. Also, the carrier spent 30% more on fuel and operated only 10% more flights.
The $40 billion agreement on a compromise FAA authorization embracing trust funds and a general fund contribution would cover fiscal years 2001 through 2003, but also would authorize the $1.95 billion fiscal 2000 authorization for the Airport Improvement Program, congressional sources said yesterday. The authorization is necessary to permit release of the AIP funds, which already have been appropriated.
AAR Corp. President David Storch, reacting to an FAA proposal to fine the company $1 million for failing to properly package and mark a shipment of chemical oxygen generators, said the company was not responsible under its contract with a French supplier (DAILY, March 2). Storch said AAR in early 1997 purchased a large consignment of inventory including passenger service units, from the supplier. "As soon as we became aware that the seller had shipped certain PSUs to us with potentially hazardous materials, we notified the FAA.
Mercury Air Group said yesterday it will have to take a pretax charge of $2.7 million as a result of Tower Air's filing for bankruptcy on Feb. 29, which will "substantially reduce earnings for the quarter ending March 31." As a result, "it will not be our policy to continue supplying Tower Air on a pre-paid basis," said Mercury President Joseph Cryzyk. He said that significantly higher fuel prices for an extended period of time "have a negative impact on the aviation industry as it increases the airlines operating expenses.
Air Transport Association Cargo Traffic December 1999 Revenue Ton Miles (000) December December % 1999 1998 Change Domestic Freight 972,601 872,461 11.5 Mail 240,528 233,978 2.8 Total 1,213,129 1,106,439 9.6 International
The Society for Professional Engineering Employees in Aerospace (SPEEA) will not accept an impasse in contract talks and will file an unfair labor practice charge with the National Labor Relations Board for Boeing's attempts to call an impasse. An impasse would allow Boeing to impose a contract and end the strike that began Feb. 9. Boeing spokesman Peter Conte said yesterday that "it is now my understanding we can impose an impasse unilaterally."
In an effort to boost business class traffic, Cathay Pacific announced a promotion offering its Asia Miles frequent flyer member a 50% discount on all business-class companion tickets. The offer will run over a four-month period, and members who purchase a business-class roundtrip ticket to any destination can redeem a second ticket for half the normal amount of reward Asia Miles.
Hawaiian Airlines will purchase 13 new Boeing 717s and has obtained rights to purchase seven more, formalizing a letter of intent signed last September, Boeing said yesterday. The new aircraft will completely replace the carrier's 15 DC-9-50 aircraft, used on interisland routes. All new aircraft will be delivered next year, beginning in February. Hawaiian's aircraft will seat eight passengers in first class and 115 in coach.
America West is offering employees $23 million in cash incentives and annual merit increases following its record 1999 financial performance. Next week, about 1,800 employees will participate in the company's AWArd Pay plan with bonuses equal to 11.8% of their 1999 earnings. About 170 employees of The Leisure Company, which has its own compensation plan, will receive 8.2% of their 1999 earnings. A merit increase averaging 4% of qualifying payroll will go to all eligible America West employees over the coming year, the airline said.
With an overall open-skies policy still not in place in Latin America, four major U.S. carriers -- American, United, Continental and Delta -- dominate traffic between the U.S. and Latin America. This is the main conclusion of a new study by Miami-based Aviation Management Services (Avman). The study shows passenger market share for U.S. airlines grew to 63.1% in 1998 from 58.7% in 1990 and still is climbing. Preliminary figures for July 1997 and the same month in 1998 show that U.S. carriers increased capacity 24%, compared with 12% for Latin/Caribbean airlines.
Saturation of major airline hubs in the U.S. will drive the industry to undergo significant consolidation if it wants to compete effectively and improve efficiencies, according to a Salomon Smith Barney report. Analyst Brian Harris said yesterday the company next week will release its 2000 Hub Factbook, which contains an analysis of 68 hubs worldwide for 36 airlines.
Spanish holding company SEPI, refining the latest business plan to rescue ailing Aerolineas Argentinas, may look in its own backyard for a model - the successful turnaround of Iberia, in which SEPI holds 54% equity. Between 1990 and 1996, Iberia lost $1.6 billion, and financial experts declared it "technically bankrupt." Two years later it was earning $320 million in profits. That number shrank 52% in 1999, however, due to a pilots strike, chronic flight delays and higher fuel costs. Six factors were responsible for Iberia's success:
The Internet may not be the immediate future of the European travel industry, but there are many new technologies that airlines can use to develop e-commerce if they hope to remain competitive, said Henry Lane-Fox, LastMinute.com's Head of New Ideas. Other platforms of interacting with the customer that are "advancing rapidly" include wireless application protocols (WAP) and interactive television. LastMinute, one of the leading U.K. online travel agencies, warns U.S. airlines and travel providers that Internet use is not as prevalent in the U.K.
Southwest's first quarter fuel expenses are estimated to jump at least $65 million, or roughly 77%.The carrier predicted in an internal communication that if fuel prices remain at current levels, its full-year fuel expenses will soar 54%, or $265 million. Southwest reported that jet fuel prices for the past week were at least 50% higher than the average price a year ago.
Tokyo Narita Airport recorded 132,575 takeoffs and landings during 1999, its most ever and 6,075 more than in 1998. The figure includes 127,473 international flights and 5,102 domestic.
Sabena expects its revenues to be hit significantly by switching its transatlantic alliance partners this year. Sabena Secretary General Patrick du Bois says that going from Delta to American "will cost us some revenues." This, coupled with high fuel prices and increased labor costs, will make 2000 another difficult year for the airline.
American and American Eagle will spend $15 million to make computers, printers and Internet/IntrAAnet access available to employees and their families. Delta recently announced a similar initiative for its employees. American will make the home computer, printer and Internet access available for no more than $12 a month and will offer a laptop upgrade option, said Chairman and Chief Executive Don Carty.
Air Transport Association reports that airline ticket prices rose on average 1.1% in January, compared their year-ago level. Passengers paid 0.3% less for coach and 3.2% more for first-class fares.
