Lufthansa Group said yesterday its pre-tax earnings for 1998 increased 42% to 2.5 billion deutschmarks (US$1.35 billion) and set a record. Last year's results also were a record. The company also had its best net profit ever, DM1.4 billion ($760 million), up 33%. "Growth in traffic volume continued unabated," Lufthansa said. The results, following a difficult period for British Airways, further established Lufthansa as the healthiest airline in Europe.
TWA and Kuwait Airways filed jointly for authority to operate code-share services between the U.S. and Kuwait, Abu Dhabi, Dubai and Muscat. TWA would display Kuwait's code on flights between New York Kennedy and Los Angeles, St. Louis, San Francisco and Washington, and between St. Louis and Chicago O'Hare. Kuwait Airways holds permit authority to serve JFK - via London and Frankfurt - with four weekly flights, and Chicago with two.
The Irish government yesterday approved a plan selecting American and British Airways as alliance partners for Aer Lingus. An airline spokeswoman said that American and BA have invited Aer Lingus to join the oneworld alliance. The decision means that the Irish carrier will join BA and not fight against it, and that British Midland likely will move closer to non-BA partners. Ireland owns 95% of Aer Lingus and employees own the rest.
LatinPass frequent flyer program, owned by 10 Latin American airlines, has opened membership to all other airlines in Central and South America and the Caribbean. US Airways, TWA and KLM currently are members, and new airlines would have agreements similar to theirs. This year's LatinPass chairman, Federico Bloch, also Grupo TACA chairman, said a number of other airlines in the region have expressed interest in joining the program, but were not prepared to take an ownership stake.
Sundstrand board called a special stockholders meeting June 10 to approve the announced merger with Hamilton Standard. The board also declared a quarterly cash dividend of 17 cents per common share payable June 15.
Air Transport Association members' traffic for March rose 4.6%, with domestic growing 4.2% and international 5.5%. Capacity increased 3.6% and the load factor grew to 73.2% from 72.4%. Passenger enplanements gained 2.3% to 44.7 million. Traffic has risen faster than capacity during each of the first three months of the year.
TWA accepted for payment $28.8 million principal amount of its 11 3/8% senior secured notes due April 15, 2003, and $14.5 million principal amount of its 10 1/4% senior secured notes due June 15, 2003. The notes were tendered under a TWA offer to buy as much as $28.8 million principal amount of the 11 3/8% notes and all of the 10 1/4% notes. Holders of 11 3/8% notes tendered $42.3 million principal amount, and TWA bought the $28.8 million principal amount on a pro rata basis.
UniCapital said it has signed two letters of intent to acquire 45 commercial jets for more than $1.5 billion, increasing its portfolio to 70 aircraft. The Orlando-based company said the aircraft include 737s, 757s, 767s, MD-80s, A320s, A300s and A310s. The two transactions are expected to close in May and June. UniCapital has more than 20 airline customers.
Midwest Express flight attendants have voted for representation by the Association of Flight Attendants. Of 360 employees eligible to vote, 204 backed the union. Airline Senior VP David Reeve said the company was disappointed, "but we support and respect our employees' legal right to make this choice." AFA said yesterday it wants to start contract negotiations immediately.
Management of Air-India, citing "an unbearably high rate of interest," has decided to shelve the proposed $100 million securitization deal for its North American ticket receivables and $100 million that was to have been brokered by ABN-Amro Bank, opting instead for a Foreign Currency Non-Resident (FCNR) loan of the same amount, AI officials said yesterday. The securitization deal, set to be brokered by ABN-Amro Bank, was scheduled to have been firmed up earlier this year.
Association of Flight Attendants members held a protest yesterday at FAA headquarters in Washington to "encourage" the agency to pass rules to protect passengers and flight attendants from oversize carry-on bags. AFA says the heavy bags cause "thousands of injuries each year" to flight attendants and passengers. AFA advocates a carry-on bag rule limiting passengers to about 13 pounds.
Northwest, United and Federal Express moved quickly to answer each other's applications for U.S.-China frequencies available now and April 1, 2000, under the amended bilateral. Eight frequencies are available this year and nine next year, and the three carriers, designated for the market, applied last week for nearly twice as many (DAILY, April 23). Northwest, United and FedEx are the only U.S. carriers authorized to serve China, and FedEx, which currently holds four frequencies, complained that it alone lacks daily service to China.
Delta has introduced electronic ticketing on itineraries that include any of its three Delta Connection carriers - Atlantic Southeast, Comair and Sky West. E-ticketing will be expanded to Business Express and Trans States soon.
China Airlines reported a passenger load factor of 71.3% and a cargo load factor of 83.5% for the first quarter of 1999. Based on first quarter results and improving prospects for a continuing economic recovery, a company official said CAL will easily achieve its 1999 targets of NT$62.4 billion (US$1.87 billion) in revenue and NT$1.72 billion (US$51.65 million) in pre-tax profit.
United, which has been building its operation at Los Angeles for a number of years, this week declared LAX an official hub. The statement coincided with the completion of a two-year, $240 million upgrade of its facilities, used by more than 25,000 passengers daily. "For all intents and purposes Los Angeles has been operating as one of our hubs for at least a year," said Mark Liberman, VP-North America, in an internal communique.
U.S. Major Carriers Advertising Expense Fourth Quarter 1998 % Of Total Advertising Passenger Revenues Alaska 5,464,000 1.68 Domestic 4,991,000 1.69 Latin 473,000 1.64 America West 6,301,505 1.36 Domestic 6,285,351 1.39
Boeing said it has bolted new, highly backswept wingtips temporarily on the first 767-400ER to verify installation procedures and ensure that the hardware meets engineering specifications. The new wingtips improve overall aerodynamic efficiency of the wing, providing about the same range as alternative wingtip designs that would lengthen the wingspan by 10 feet, Boeing said. The first 767-400ER is scheduled for delivery in May 2000.
Access Air is offering low fares geared to youth, seniors and families in groups of five or more. The Des Moines, Iowa-based airline is offering a $99 one-way family saver fare for travel from Des Moines, Moline/Quad Cities and Peoria to New York and $119 to Los Angeles. Fares are for youths 2-25 years, seniors 62 or over and family groups that include at least one member under 25 or over 62, and groups of five or more traveling together.
Continental paid an average of 38.62 cents per gallon for jet fuel during the first quarter, not 43 cents (DAILY, April 20). Forty-three cents is the airline's second quarter forecast for jet fuel cost per gallon.
Cathay Pacific and South African Airways yesterday signed a memorandum of understanding that outlines a long-term partnership between the two carriers. The pact will include code sharing, joining frequent flyer programs and ground-handling. Cathay began flying to Johannesburg in 1991 and operates three weekly flights from Hong Kong. The link is SAA's second this year with an Asian carrier -- it began code sharing with Singapore Airlines in April.
Rep. William Lipinski (Ill.), ranking Democrat on the House aviation subcommittee, next week plans to introduce his Aviation Bilateral Accountability Act of 1999, a Lipinski aide said yesterday. The bill would require congressional approval of bilateral aviation agreements. Lipinski, in a House speech Tuesday, appealed for support. He said his aim is not to criticize the new U.S.-China aviation agreement but to point out that the accord, which spells out U.S. carrier service to China for three years, was concluded without an official congressional role.
Major U.S. airlines are unsure how much Tuesday's authorization to call up 33,000 reservists to active duty will affect operations. Airlines yesterday were asking pilots and mechanics to tell them whether they were called up to assist in NATO operations in Kosovo. United and American both expect minimal effect, but some flight cancellations could occur if many pilots flying one type of aircraft are called up en masse. United has 850 reservists among its 10,000 pilots, and American's total is 800 of 9,400
No major airline has made an advertising push to sell its tickets over the web, but it's only a matter of time before one of them does, according to "e-Commerce: Virtually Here," a Merrill Lynch report on electronic commerce. The report says airlines have been reluctant to advertise their web ticket offerings because they worry about handling the volumes and further alienating travel agents.
Thomas O'Leary, 74, died April 17 at his home in Venice, Fla. O'Leary held executive positions with TWA, Mohawk, Pan Am and the Civil Aeronautics Board, where he helped set up service to small communities.
