Fuel Cost and Consumption U.S. Majors, Nationals and Large Regionals May 1998 - April 1999 Total Total Cost Cents Per Gallons (Dollars) Gallon 1998 May Domestic 1,148,030,810 579,716,080 50.497 International 441,049,830 242,956,913 55.086
City Jet Holdings (CJH) plans to start a third Australian carrier in three to four weeks, further fragmenting the domestic network. CJH will announce the airline's name, logo and livery at the launch. According to CJH Chief Executive Paul Orpwood, the airline will be financed through a two-year US$500 million private placement debenture issue from a U.S. pension fund through a bankruptcy-remote intermediary. The collateral is tied to airport infrastructure and aircraft. Orpwood declined, however, to identify the pension fund, saying the time was not right.
The Taichung County Government and the Taiwan Development&Trust Corp. are preparing to sign an agreement to develop a 110-hectare site in central Taiwan into an aerospace industrial park. Sources close to the two parties say the agreement to form the Taichung Aerospace Industrial Park (TAIP) will be signed before the end of June. Scheduled for completion before the end of 2001, TAIP will cost NT$7.2 billion (US$223 million).
Bryan Bedford resigned yesterday as president and chief executive of Mesaba Holdings, effective immediately. The airline did not identify the "new endeavor" Bedford will undertake. Bedford led the Northwest Airlink carrier since 1995. Mesaba's board appointed John Frederickson interim CEO. He currently is the airline's VP-general counsel and administration.
The Civil Aviation Authority of Singapore (CAAS) will invest US $1 million to build a ground station, using satellite signals to guide aircraft to land, even in zero visibility, and track their positions. CAAS will launch a pilot project at one of the republic's smaller airports in Seletar and later extend it to Changi Airport. Airlines would have to fit their aircraft with satellite receivers. According to Lo Weng Kee, CAAS executive engineer for navigational aids, Seletar was chosen because it does not have an instrument landing system (ILS).
DOT granted American an initial exemption for Chicago-San Jose del Cabo, Mexico, service and renewed the carrier's Dallas/Fort Worth-San Jose del Cabo exemption. The exemptions are effective through June 4, 2001, co-extensive with other U.S.-Mexico authority recently granted to American. The dormancy period for the Chicago exemption begins Nov. 1, when the carrier intends to inaugurate service (DAILY, June 17). Separately, DOT renewed through June 4, 2001, Continental's exemption for Houston-Ixtapa/Zihuatanejo service.
Preliminary discussions yesterday between Boeing and the International Association of Machinists (IAM) could define the aerospace industry's ability to downsize and restructure operations, including subcontracting jobs for competitive reasons. Dick Schneider, the Machinists' chief negotiator, told reporters yesterday that his 49,000 members are ready to strike if the leadership does not present an acceptable contract. Machinists struck Boeing in two of the last three negotiations.
Midwest Express, which has begun flight cancellations that are expected to rise to 3% of its schedule over the next three months because of a shortage of DC-9 captains, expects to be back to full staff by early September. The carrier will ground about 28 of its 950 weekly flights because it is experiencing a pilot shortage "in one status," said Senior VP-Operations David Reeve. "We have no shortage in DC-9 first officers or MD-80 captains or first officers," he said.
Qantas will add three flights between Australia and London Oct. 31, ending a busy month of network expansion. The airline will launch three weekly flights to the U.K from Sydney via Melbourne and Singapore. The Boeing 747-400 service is timed for a mid-afternoon arrival in London. With the new flights, Qantas will operate 20% more capacity on international flights to and from Melbourne, according to Chief Executive James Strong. Qantas and oneworld partner British Airways are the only two carriers serving the route, operating two direct daily flights.
Emirates Airlines confirmed orders for another Airbus A330-200 and a Boeing 737-300, to be delivered in the last quarter of 2000. The Airbus lease financing is guaranteed by U.K., German and France export agencies and arranged by Credit Agricole Indosuez. The Boeing is leased from International Lease Finance Corp. The carrier also leases two new 777-300s from Singapore Aircraft Leasing Enterprise.
Varig traffic for May plummeted 17% to 1.82 billion revenue passenger kilometers, after falling 2.2% in April. Traffic is down 7% so far this year and freight volume 25.4%, including 22.3% in May. The passenger load factor was 62.9% internationally and 59.5% on domestic routes. Varig carried 796,772 passengers last month, a decline of 11.1% year-over-year and 24% lower than the 992,694 transported in January.
Sen. Ernest Hollings (S.C.), ranking Democrat on the Senate Commerce Committee, is moving toward taking the lead role in the Senate in pushing House Transportation Chairman Bud Shuster's AIR-21 bill to take the aviation trust funds off budget, Senate sources said. Hollings' support of Shuster is no surprise since the Senator has openly praised Shuster and his legislative approach in Commerce Committee hearings. Hollings' willingness to play a leading role was unexpected, however.
Atlas Air said it has entered a long-term Boeing 747 freighter agreement with Air France, which it said needed additional peak season capacity. This is Atlas' first pact with the French airline.
Business Express pilots, represented by the Air Line Pilots Association, have ratified a new labor contract, effective until October 2001, when the integration of pilots at Business Express and American Eagle is expected to be completed. Eighty-nine percent of pilots returned ballots in favor the tentative agreement, which will improve compensation, per diem rates and retirement. It also guarantees the Dover, N.H.-based carrier and its pilots stability during the transition to American Eagle, which has a parallel agreement.
Airport and Airway Trust Fund - Balance Sheet As of April 1999 ASSETS April 1999 Undisbursed Balances: Available for Investment 3,000,983.09 TOTAL UNDISBURSED BALANCE (Cash in Account) Receivables: Interest Receivables 234,731,190.98 TOTAL RECEIVABLES Investments:
Twenty Malaysia Airlines captains from the Airbus A330, Boeing 777 and 747-400 fleets, citing unfavorable working conditions resigned en masse and headed for Korean Airlines. Among them was an ethnic senior Malay pilot. In MAS's history, no ethnic Malay pilots have ever resigned to join another carrier. Over the last three years, there has been an exodus of MAS pilots to China Airlines, EVA Air, Asiana Airlines and Singapore Airlines, and more are expected to leave.
The loss of aircraft from two companies that supplied service to SunJet International and the stalled delivery of another forced the New York-based low-fare operator to cancel flights Friday. SunJet parent company World Technology Systems declined comment beyond a formal statement that attributed suspended service to FAA's "grounding" of Sun Pacific International and WinAir and TransMeridian's inability to meet a promised June 16 aircraft delivery date.
Taiwan's first laboratory designed to read and interpret information contained in flight data and cockpit voice recorders is nearing completion and will be inaugurated before the end of July, according to an official of the country's cabinet-level Flight Safety Commission (FSA), The laboratory is one of the first projects undertaken by the FSA, following its formation in May 1998. With the assistance of experts from the U.S., Canada and Australia, the facility is ready to undergo final testing, the official said.
Lufthansa Consulting signed an agreement with Philippine Airlines to manage the restructuring of the struggling airline. Officials would not say whether the deal involves a financial investment. The group would begin a two-month assessment of PAL starting July 1, followed by two years of consulting to "improve PAL's operational results and performance." PAL has been unable to reduce its $2.2 billion debt because of mounting losses after its shut-down last year.
House Transportation Chairman Bud Shuster's efforts to enlist four senators to push in the Senate his drive to take the aviation trust funds off budget has Senate opponents "concerned, but we're not pressing the panic button," said an aide to one of the Senate's leading opponents of the Shuster approach last week. Congressional sources said Thursday that Shuster had approached four senators about taking the lead in the Senate on the trust fund issue. Sources said the legislators were looking into ways to achieve this goal.
DOT issued a consent order concerning deceptive advertising published by AeroMexico in The Dallas Morning News and other newspapers from Nov. 9, 1998, through Dec. 8, 1998. The carrier's advertisement did not state clearly and in close proximity that the fares were one-way tariffs requiring roundtrip purchase subject to certain restrictions.
Dragonair is studying adding long-haul routes outside the region to compete with Cathay Pacific, according to China National Aviation Co. (CNAC), Dragonair's controlling shareholder. Dragonair's plans are in the preliminary stage and it has yet to place an order for long-haul aircraft. The airline operates regional services between Hong Kong and China, Japan and Southeast Asia.
Sabena will sell its 11.2% stake in Belgian low-cost airline CityBird, the smaller carrier said yesterday in Brussels. Sabena said it is reducing its stake in CityBird because the investment "failed to deliver enough return." A Sabena executive also acknowledged that the operation was prompted by a "loss of confidence in CityBird ever since a row erupted between the companies in April. Sabena launched an arbitration procedure against CityBird when it found out that the small airline intended to start a route to Kinshasa.
