Air France faces another labor disruption today as some of its smaller pilots unions prepare to stage a work stoppage through June 12. An airline spokesman said pilots of the former Air Inter, now a part of Air France, are not satisfied with elements of their integration into Air France Groupe. The labor action will disrupt less than 3% of systemwide flights. International flights and departures from the Paris Charles De Gaulle hub will not be affected, Air France said.
The General Accounting Office charged yesterday that FAA oversight of general aviation airports "is inadequate" to comply with federal land use requirements for airports, a charge that was backed by members of the general aviation community but disputed by FAA.
Cash-strapped Malaysia Airlines has sold its 40% equity in Royal Air Cambodge (RAC) and Air Maldives (AMD) to unidentified buyers for an undisclosed sum. A MAS official told The DAILY that the carrier was no longer able to participated in the operations of the two carriers. MAS acquired the RAC stake in February 1995 for US$10 million after Singapore Airlines withdrew its bid. It bought the AMD stake six months later for $8 million.
FAA and the Professional Airways Systems Specialists yesterday agreed to use "super mediator" W.J. Usery to help them resolve issues, including pay, that have bogged down bargaining on a new labor agreement. PASS represents 7,600 FAA employees who maintain the national airspace system.
Domestic traffic has been declining since May 1998 for Colombia's second largest airline. "What we see is the domestic market not expanding significantly until probably June of next year," said ACES Chief Exexcutive Juan Emilio Posada. "The contraction started last June, then 4% July-
Cardinal Airlines seeks DOT certificates for scheduled and foreign charter combination services offering all-first-class seating. The Melbourne, Fla.-based carrier plans scheduled service to primary eastern U.S. markets from Melbourne Airport. The startup wants to begin service to Baltimore/Washington International Airport and expand service in the New York market, using two MD-80s. Its business strategy is to give all passengers "large first-class seats and offer superb meals" with one fare to each destination.
FAA will fine American $82,500 and Allison Engine Co. $75,000 for alleged violations of hazardous material regulations. FAA said American shipped 13 containers of fish livers contaminated with the toxin known as "red tide." The shipment spilled, and a hazardous materials clean-up contractor was called to repackage the containers into orange biohazard bags. One FAA inspector discovered the bags were not stored upright as required.
Northwest flight attendants, represented by the Teamsters, will petition the National Mediation Board for release into a 30-day cooling-off period if the company and the union fail to reach an agreement by tomorrow. Teamsters Local 2000 President Billie Davenport said the two sides could wrap up most of a tentative deal this week but remain far apart on pension issues. She said there has been some movement on compensation and believes "we will be able to resolve those issues."
US Airways and its International Association of Machinists unit have reached a tentative deal on a new contract covering 7,000 aircraft mechanics and related employees. The deal, subject to ratification by the rank and file, also covers mechanics and related workers at US Airways Shuttle.
Malaysia Airlines posted its second straight year of losses, as the carrier was hit by rising operating costs and a decline in regional travel. The airline posted a net loss of 700 million ringgit (US$184 million) for the fiscal year ended March 31, compared with a 259.9 million ringgit loss the year earlier. The loss came despite a 6% increase in revenue. The airline expects to improve revenue this year. MAS attributed its financial difficulties to a weak currency and foreign exchange losses.
Latin American aviation would face serious challenges even if there were no outside influence. More markets are being liberalized, competition is up, yields are down, local economies are weaker after Brazil's economic decline and those lending money for aircraft and other purchases have been reluctant to open the purse strings in light of so much uncertainty.
British Midland will name a U.S. partner in the next four months as it continues to move aggressively toward an early 2000 launch of transatlantic service. The carrier currently has code-share agreements with 19 airlines in competing alliance groups, and Chairman Michael Bishop said a strong partner is crucial to the success of its long-haul expansion.
American Eagle, the regional affiliate of American, will resume service between Omaha and Chicago O'Hare on Aug. 1, operating four daily roundtrips with new 50-seat ERJ 145 Regional Jets. The new flights will greatly expand service from Omaha to key domestic cities.
The Pacific downturn has had a ripple effect for Aerolineas Argentinas. "The first wave you saw was capacity coming out of Asia and going to the North Atlantic," said CEO David Cush. "I think we're kind of in the second part of that now - those aircraft now fly to the South Atlantic." In some markets, fares are about 50% of what they were last year. "We hope Asia comes back so they can put those airplanes in Asia where they belong," he said. Domestic traffic in the first three months of this year "is essentially flat from last year," Cush said.
Fuel Cost and Consumption U.S. Majors, Nationals and Regionals April 1998 to March 1999 Total Total Cost Cents Per Gallons (Dollars) Gallon 1998 April Domestic 1,137,811,792 582,576,899 51.202 International 423,019,158 230,531,602 54.497
Great Lakes Aviation reported an 11.5% rise in traffic on 14.2% more capacity for May compared with the same 1998 month, depressing the load factor 1.2 percentage points. The Spencer, Iowa-based airline enplaned 22.9% more passengers. Year-to-date traffic gained 26.6% and capacity 33.6%, pushing the load factor down 2.4 points. Passengers flown rose 42%.
Deep discount fare sales initiated by competitors are eroding American's yields, even though the carrier managed to raise some basic excursion fares, American Chief Executive Donald Carty told financial analysts in New York yesterday.Carty said that while the discounts are deeper than last year's, the one "bright spot" is that they appear to be abating. He expects yields to improve during the busy summer travel season.
The U.S. market, as well as Peru, Spain and Argentina have been very strong for LanChile, but yields have dropped as international competition increased. Yields have plunged 15% - "10% is price and 5% is the mix" of more leisure and fewer business passengers, said Chief Executive Enrique Cueto. LanChile's international traffic has risen 25%, while capacity increased 20%, mainly from service additions in the third quarter of 1998. Eight months ago, LanChile began reducing domestic capacity.
Smoke-free flights between the U.S. and foreign points stand at 97%, DOT said. All Nippon Airways, Japan Airlines, Transaero, Turkish Airlines and Varig recently made all their flights smoke-free, according to DOT. Air-India prohibits smoking on all its service to the U.S., while Alitalia does so on 80% of its U.S.-Europe flights.
International Lease Finance Corp. said Iberia took delivery of the first of 16 new A320s leased from ILFC. Six more A320s and nine more A319s are to be delivered this year and in 2000 for Iberia's European routes.
Avianca has been growing "not because the market is growing but because of a change in strategy," according to CEO Gustavo Lenis. A new hub in Bogota is "starting to work" and has been "successful," he said. This has put pressure on rivals to challenge the flag carrier. "What I see domestically is that some airlines are not going to make it," Lenis predicted. Despite his confidence, Lenis has been coping with weaker domestic traffic and yields in recent months.
US Airways is offering $338 roundtrip Internet fares between Los Angeles and Baltimore, Boston, New York LaGuardia, Philadelphia, Washington Reagan and Dulles airports. Tickets must be purchased by June 13 on the Internet at www.usairways.com at least 14 days before departure. Fares require a Saturday night stay and are available for travel June 24-Sept. 30. The airline is offering a bonus of 1,000 miles for customers who purchase a US Airways ticket on the Internet and 500 miles for flying MetroJet through Dec. 31.
US Airways became the second airline in a week to warn of lower second quarter earnings due to soft May traffic and higher costs. In a filing with the Securities and Exchange Commission, the airline said profits would be $1.80 to $1.85 a share, less than the average First Call analyst estimate of $2.15 a share. US Airways said it would cut some of its 1999 capacity growth. The airline's announcement follows a similar warning from United last week (DAILY, June 8). US Airways' stock fell 2 11/16 yesterday to close at 48 7/8.
FAA said that Luxembourg complies with international safety standards set by the International Civil Aviation Organization and has been rated Category 1, FAA said yesterday.
