FDX yesterday reported fourth quarter revenue of $4.4 billion, up 7%, operating income of $390 million, up 21% and net income of $221 million, up 30%. For the year ended May 31, revenue was $16.8 million, up 6% , operating income $1.2 billion, up from $1 billion, and net income $631 million, up 26%. "The fourth quarter caps a record year at both FedEx and RPS," said Alan Graf, executive VP. For the quarter revenue of $3.6 billion, up from $3.4 billion. Operating income was $306 million, up 17% from $261 million.
DHL Worldwide Express has acquired DHL Internacional, its agent-run Argentina operation. DHL plans to invest $10 million in the Argentina market over the next 18 months. The two actions will enable DHL to better integrate the Argentina operation into its global network and bolster market leadership in Latin America, said Bruce Walker, regional director. DHL plans to invest in a hub operation at the Buenos Aires airport and dedicate aircraft to serve Argentina customers, he said.
Asiana Airlines has awarded a US$30 million exclusive maintenance contract to Rolls Royce for V2500 engines powering the carrier's new Airbus A321s. Asiana has ordered 12 aircraft, with two already delivered. The contract was decided after a stiff evaluation process involving bids from four other companies.
Sen. Arlen Specter (R-Pa.) said he is contemplating taking a leading role in pushing House Transportation Chairman Bud Shuster's AIR-21 measure when FAA funding legislation comes up in the Senate. Sources said last week that Sen. Ernest Hollings (D-S.C.), ranking Democrat on the Senate Commerce Committee, is leaning in the same direction.
Alitalia pilots and flight attendants have threatened a four-hour strike July 5, but officials said they were optimistic about a negotiated end to the contract dispute. The unions and airline are in talks aimed at heading off the mid-day strike, which would affect all Alitalia flights originating in Rome. Local labor laws require unions to give the government notice of a strike and officials said most of the airline's flights are not within the planned strike times.
The U.K. yesterday postponed open-skies talks with the U.S. that the U.K. had penciled in to begin July 5. The action marks a second delay by the U.K., which in early June asked the U.S. for additional time to work out internal issues. The two sides had planned to meet in mid-June as agreed upon in April by DOT Secretary Rodney Slater and Deputy Prime Minister John Prescott. The U.K. "is still working on our negotiating position," a British Embassy spokeswoman told The DAILY in Washington.
FAA yesterday denied that the Standard Terminal Automation Replacement System (STARS) has fallen behind schedule. The Professional Airways Systems Specialists union said, "Only eight weeks into reworking the STARS project,FAA mismanagement has caused the project to fall seven weeks behind." The agency said it has run into software development problems with Raytheon and human factors issues that caused it to "use up some of the contingency time we had built into the schedule." FAA said it still is on schedule for the first STARS deployment this December in Syracuse.
American Eagle is beefing up its Caribbean operation to complement American 's winter service additions. Beginning Nov. 19, the carrier will add flights to Anguilla, Tortola, St. Kitts and St. Maarten. It also will reinstate seasonal service to Granada in December and has added capacity on flights to Santiago, Dominican Republic.
The apparent "slow pace" of airport privatization in the U. S. is probably due to the reluctance of airlines to change, according to an executive of BAA USA, a subsidiary of BAA, which manages 15 major world airports. In testimony yesterday before the House Transportation aviation subcommittee, David Suomi, VP of BAA USA, said airlines have not been convinced of the benefits of private sector operation of airports. Airlines recognize that an inefficient airport will cost airlines more but seem to accept this inefficiency "as a cost of doing business," he said.
Air Transport Association's efforts toward improving customer service among its membership may be a step in the right direction, but consumers need legislation to protect their rights because airlines have shown they are more interested in controlling markets than taking care of passengers, Woodside Travel Trust, the world's largest travel management partnership, claims.
Thai Airways will borrow $550 million to fund five previously ordered Boeing aircraft that the manufacturer refuses to cancel. The airline wanted to cancel the orders due to cost-cutting measures. The four Boeing 777-300s and one 747-400 are the last of 21 planes purchased in March 1997. Officials expect to have the funds by September for October delivery. The carrier is awaiting approval from the Thai finance ministry to borrow the funds from overseas lenders, backed by the U.S. Export-Import Bank.
Singapore Airlines today begins a frequent flyer alliance with United, inching SIA closer to a larger agreement and possible inclusion in the Star Alliance. SIA called the previously announced accord a "strategic bilateral alliance," indicating the level of closeness between the two (DAILY, May 6). Code sharing was not mentioned as part of this alliance. The carriers will offer reciprocal frequent flyer privileges and one-stop check-in capabilities for flights across both route networks.
In a bid to reduce operating costs for airlines across the Asia/Pacific region, 16 countries plan to establish a Pacific United Airspace Management team by March as a first step toward installing a joint air traffic control system. The iniative follows the completion of a study of the project by Singapore-based IATA consultants. According to George Faktaufon, secretary general of the Association of South Pacific Airlines, carriers would benefit from a single regime for charging fees.
FAA warned yesterday that airline passengers risk fines and up to five years in prison if they carry fireworks on board aircraft. Both domestic and international rules prohibit the carriage of fireworks, said Cathal Flynn, associate administrator for civil aviation security.
Atlantic Southeast Airlines will introduce Canadair Regional Jet service between Atlanta and Austin, Houston and San Antonio on Aug. 1. The new routes will supplement Delta service in the markets.
Air-India will invite formal bids from Boeing and rival Airbus for a contract to expand its fleet. "The board of directors looked at our proposals and agreed that we do need aircraft and has asked us to go ahead and invite the financial bids," an Air-India official told The DAILY. "Meanwhile, technical and economic feasibility studies will go along to decide other relevant issues such as inflight services," he said. The official said the airline was looking for aircraft to serve medium- and long-haul routes.
Midway Airlines does not expect second quarter or full-year earnings to meet analyst expectations due to higher costs. The carrier projects second quarter net income of 40 to 45 cents a share, compared with Wall Street estimates of 53 cents. The higher costs are driven by capacity reductions, pilot shortages, a change in fleet mix and aircraft retirement costs, officials said after market close yesterday.
GE Aircraft Engines (GEAE) is interested in investing in Taiwan's state-run Aerospace Industrial Development Corp. (AIDC), sources in Taipei say. AIDC is undergoing privatization, a process due for completion by yearend. Sources say GEAE is especially interested in AIDC's aircraft engine production plant, one of three divisions that will be formed under the privatization plan.
Net profit for the U.S. major airlines is expected to fall 16% in the second quarter to $1.6 billion from $1.9 billion last year, according to Deutsche Banc Alex. Brown.Analyst Susan Donofrio believes Delta, Northwest and Southwest are in the "best position for a positive earnings surprise" based on current traffic and yields trends.
American's Allied Pilots Association, concerned about media coverage of pilot fatigue that emphasizes problems at APA, says fatigue is an issue faced by pilots at all airlines. Media reports last week detailed concerns APA had with pilot fatigue including reports that pilots fall asleep in the cockpit. APA spokesman Drew Engleke said the union hoped to deal with the fatigue issue internally. Only five airlines are in compliance with FAA regulations regarding pilot rest/duty time - Continental, Alaska, America West, UPS and DHL, said APA President Rich LaVoy.
The revolution in regional jets is only in Stage 1, and the next phase will see 32- and 37-seat RJs growing more popular and Embraer and Bombardier's 70- to 100-seat RJs making up the largest growth segment in the entire industry, predicted Fairchild Aerospace Chairman and Chief Executive Carl Albert. Speaking to the Aero Club of Washington yesterday, Albert also said turboprops will become obsolete with the growth of smaller RJs, and larger RJs will continue opening up new markets that are too thin to support 737s and too distant for turboprops.
China Airlines (CAL) has invested US$140 million in a three-bay maintenance hangar in Taipei, in line with the Taiwanese government's call for the carrier to develop the maintenance center into an Asia/Pacific hub. The investment includes purchase of equipment for the center to carry out high-level inspection standards. With the completion of the new facility and the existing two-bay hangar, CAL is able to carry out maintenance on five Boeing 747-400s simultaneously with one MD-11 or Airbus A300-600.
Big Sky Airlines will join the Airlines Reporting Corp. as a participating carrier with sales on or after July 19. The Billings, Mont., airline serves 24 communities in seven states with Fairchild Metro III and Metro 23 aircraft.
Continental President Greg Brenneman pulled his name from the short-list of candidates for Compaq Computer's chief executive position, stating he is "happy" in his current position with the airline. "There is a lot more I can accomplish for the airline," Brenneman said. He was close to a deal with Compaq late last week, sources said (DAILY, June 25), but yesterday he said he does not intend to pursue the discussions further. Compaq is seeking a replacement for CEO Eckhard Pfeiffer, who departed in April.
Tahoe Air has begun nonstop Boeing 737 jet service between Lake Tahoe and Los Angeles with $69 introductory one-way fares. It is offering one daily flight but will increase to three in August. On July 1 it will launch two daily nonstop Lake Tahoe-San Jose flights with $49 introductory one-way fares.
