Canadian Airlines reported a 5% decline in systemwide traffic on 4.8% less capacity for November 1999, compared with the same 1998 month, which depressed load factor 0.1 percentage points to 62.1%. Domestic traffic fell 7.1% and capacity 10.3%, growing load factor 2.2 points to 62%. International traffic dipped 3.2% and capacity 1.7%, pushing load factor down 1 point to 62.8%. Regional traffic lost 11.5% on 7.5% less capacity, shrinking load factor 2.6 points to 57%.
General Electric continued to broaden its commitment to the aviation training segment with an agreement to take a stake in Thomson-CSF's commercial aviation training subsidiary. The joint-venture agreement, subject to regulatory approval, calls for Thomson-CSF's ORBIT unit to transfer training center operations and six commercial flight simulators to GE Capital Aviation Training. The joint venture will be called GE Capital Aviation Training, and GE Capital will hold the majority ownership.
Vietnam Airlines (VAL) plans to suspend services to Manila and Taipei in April, following a decline in passengers. Several domestic routes would be dropped from the network or receive a reduction in frequency due to a decline in tourism and foreign investments. According to VAL President and Chief Executive Dao Manh Nhoung, the fares for Vietnamese travel on domestic routes are too low. Foreigners pay more. VAL's application to the government to increase domestic fares with the New Year was rejected last week.
Hopes of reviving failed Kiwi International Airlines faded last week after Viking Resources International said its was unable to purchase the airline "due to an extremely large IRS tax lien that could not be resolved." Viking Chief Executive Thomas Patterson said the company had no intentions of assuming debt with the Kiwi purchase. "Our goal was to gain an operating certificate, not an IRS lien of over $12 million," he said.
Finland-based regional Air Botnia is evaluating a replacement for its Fokker F28 fleet, according to the European Regions Association. Air Botnia has a sixth F28 scheduled for delivery in March but plans to retire the last one by August 2001. The carrier is looking for at least six regional jets in the 60- to 80-seat class.
Mesa Air's board of directors authorized the company to repurchase up to 10% of the outstanding shares of its common stock. "The recent trading prices of the company's stock are not reflective of the company's true value," the airline said in a statement. The airline's stock closed at approximately $4.50 a share last week, down from its 52-week high of $9.56 a share.
Jet fuel spot prices ended last week at $0.75 per gallon, up 6.7% from the beginning of the week and up 141% from a year ago, according to Deutsche Banc Alex. Brown.As of last Thursday, WTI crude is trading at $25.75 per barrel.
GE On Wing support, a subsidiary of GE Engine Services, has opened an operation at Los Angeles Airport. It will initially service CFM56, CF6-80C2, JT8D, JT9D and PW4000 engines, operating out of Garrett Aviation Services Center at LAX.
CargoLifter Inc. selected a site near Elizabeth City, N.C., as the preferred site for its first airship assembly and maintenance facility in North America. A formal announcement is expected next spring. CargoLifter is the North American subsidiary of German-based CargoLifter AB, which is developing CL160 airships, more than 850 feet long and capable of carrying 160 metric tons up to 6,000 nonstop miles. The facility will have a 30-story airship hangar and office complex. Construction is expected to begin in 2002, with airship production scheduled for 2004.
U.S. concluded an open-skies accord with Portugal Wednesday following two days of talks in Washington. The fully liberalized agreement - the 40th for the U.S. - is in effect for scheduled services immediately. Charters operations come under open skies at the end of 2002. Seventh-freedom cargo rights, allowing U.S. and Portuguese carriers to base their all-cargo operations in each other's country, become available at the end of 2003.
European airline earnings are forecast to shrink by 52.0% in 1999 compared with 1998, according to I/B/E/S research. "Most industry experts expect things to get worse before they get better," said strategist Joseph Kalinowski. Year 2000 airline estimates decreased 7.8%, he said, due to declines in passenger yields, intense fare competition and rising fuel costs. "Moving into the seasonally slow season, many feel further downward earnings revisions may be warranted."
Vietnam's Ministry of Transport wants the U.S. civil aviation authorities to relax its conditions for carriers of both countries to establish direct air links. According to Choung Duc Luu, a senior official at the ministry, three rounds of talks between the U.S. and Vietnam have so far ended in deadlock. Luu said the U.S. delegation has insisted that discussions take place on an open-skies basis so as to include fifth-freedom (FFR) rights. "Vietnam supports the open-skies policy, but that is not suitable for us at the moment. We are willing to grant the U.S.
Amadeus shares have risen nearly 60% in price since the initial public listing in Madrid and Barcelona Oct. 19. The market value of the Madrid-based global travel distribution company, in which Lufthansa has a 25% stake, reached about 5.4 billion euros (US$5.5 billion) in early December. Amadeus will be included in Spain's blue chip IBEX 35 index, beginning Jan. 1.
FAA is making "reasonable progress" toward developing a cost accounting system that the agency needs before it can begin charging overflight fees, according to DOT's Office of Inspector General. FAA currently is in the process of modernizing its oceanic system, which "may significantly impact FAA's overflight fees," the IG said. While the cost to modernize and operate the new and different oceanic air traffic control system is "unknown at this time," it is "likely to affect FAA's cost and its future fees," it said.
A ship which recovered aircraft wreckage and human remains from EgyptAir Flight 990 returned to port yesterday, NTSB Chairman Jim Hall said. "It is not possible to say at this time how much of the aircraft has been recovered," Hall said. Once the wreckage is laid out in a hangar to dry, investigators will examine it for potential clues to the cause of the crash, a process expected to take several weeks, Hall said. The Navy over the next two weeks will dispatch a submarine to map the wreckage recovery area to evaluate further recovery needs, Hall said.
A Congressional Research Service study of average effective tax rates for major U.S. industries from 1993 to 1996 reveals that the transportation and public utilities industry paid the highest average tax rate during this period, some 32.7%. The study compared different industries and did not go into sub-groups such as airlines and trucking. The CRS study, released by Rep. Pete Stark (D-Cal.), put the average rate for all U.S. industries at 27.3% during this period. The drug industry had the lowest average rate, 16.2%.
Pro Air has initiated its "Founding Passenger Program," which provides passengers who helped start the airline with lifetime immunity from ticketing restrictions. It provides members exclusive access to the lowest fares without advance purchase requirements or other ticketing restrictions. Lifetime membership status is being granted to passengers who traveled on the airline since its first flight on July 4, 1997. Passengers who have not yet traveled on Pro Air but who book a reservation by Jan.
TAMPA wants to operate its Colombia-Miami flights via Valencia, Venezuela, rather than Caracas, where the airport has been closed to commercial cargo traffic due to severe flooding. Valencia, 90 miles from Caracas, "is the most practical alternative," the Colombian all-cargo carrier said in a DOT filing. TAMPA wants immediate authority to operate up to two daily flights on the alternative routing until Venezuela reopens Caracas airport to cargo service next month. The carrier applied to add fifth-freedom service at Valencia to its Colombia-Miami flights (DAILY, Dec.
Houston-based Eagle USA Airfreight Inc., one of the country's fastest-growing air freight forwarders, has purchased Compass Cargo Limitada, a major airfreight forwarder in Chile, for an undisclosed amount. Posting net revenues of $1.5 million a year, Compass now operates in Santiago, Iquique and Antofagasta. With its latest acquisition, Eagle USA doubles its three-station operational structure in South America, now comprised by Buenos Aires, Sao Paulo and Lima.
TWA took delivery of the last aircraft built in the MD-80 series. TWA made history in 1933 by taking the first and only DC-1, the first twin-engine transport developed by Douglas Aircraft. TWA's next aircraft from Long Beach will be the 717. The airline is wrapping up a year in which it received one new airplane every 10 days.
AirCell Inc. reported that seven additional cellular providers have been authorized to use AirCell's patented technology to provide air-ground advanced communications to general aviation aircraft and regional airlines. The FCC order allows cellular providers to offer service based on AirCell's proprietary technology, which re-uses the existing cellular network spectrum and infrastructure to provide cellular-like service for airborne aircraft.
Northwest Chairman Gary Wilson intends to continue his active involvement with the airline despite the announcement that he is heading a group of investors that will acquire retailer Micro Warehouse. Wilson will join former IBM Chief Financial Officer Jerome York and investment firm Freeman Spogli&Co. to lead a cash tender offer of Micro Warehouse, a direct marketer of computer products with annual revenues of $2.2 billion. The transaction is valued at $725 million.
