China Airlines, TransAsia Airways and Far Eastern Air Transport Service have entered a joint venture to form Kaohsiung Airport Catering Services Ltd. A CAL spokesman said the new company will be capitalized at NT$270 million (US$8.2 million), with CAL and TransAsia each holding a 45% stake and Far Eastern the remaining 10%. The new company is expected to gain a 75% share of the market in the southern Taiwan region and is projected to generate revenues of $12.2 million annually, with a yearly profit of nearly $1 million.
Brazil's ProEx interest-rate-equalization program as applied to exports of the Embraer ERJ-145/135 regional jets will not go away, The DAILY is told by Embraer CEO Mauricio Botelho. To comply with the recent World Trade Organization ruling on ProEx, he said the program likely would be tied to the London Inter Bank Offer Rate (LIPOR), which is typical in aircraft-lease transactions. ProEx currently pays 3.8% on 85% of the aircraft value over 10 to 15 years. The WTO ruled that unacceptable. The program will continue in one form or another (story below).
FedEx plans to increase its Orlando, Fla., sorting operations by moving to a new facility at Orlando Airport, the Greater Orlando Airport Authority said yesterday. The company will spend about $8.5 million to build the facility and $6 million to equip it, and the airport authority intends to spend $15.7 million, $11 million of it from revenue bonds, on a taxiway apron and other site work.
Hawaiian Airlines reported a 15.4% jump in February 1999 traffic to 297.7 million revenue passenger miles and a 1.5% gain in capacity to 437.2 million available seat miles, compared with the same 1998 month. As a result, the load factor rose 9.3 percentage points to 68.1%. Passengers flown were up 12.1% to 438,478. Year-to-date RPMs jumped 14.7% and ASMs 2.8%, forcing the load factor to grow 7.7 points. Passengers flown climbed 10.6%.
Average load factor for 16 of the nation's largest regional airlines increased by just over a percentage point in February to 53.8%, compared with 52.7% in the year-earlier period. Four carriers turned in load factors below 50%, while three were above 60%, but barely. The leader again was United Express Air Wisconsin, whose load factor climbed nearly six points to 61.7%. Horizon Air, another perennial leader, was up from 59.8% to 60.8%. Gulfstream International, one of the smaller carriers in the group, came in at 60.5%, compared with 59.1% a year ago.
Abu Dhabi Airport has started work on an extension that will increase passenger capacity to 7.2 million per year. The work is scheduled to be completed in 2007.
Cathal Flynn, FAA associate administrator for civil aviation security, will discuss airport security issues in an interview on Aviation News Today, to be broadcast Sunday on Washington's NewChannel 8 at 12:30 a.m. and 1:30 p.m.
The House Transportation aviation subcommittee heard testimony from airline executives and lobbyists yesterday that the industry is trying to improve its customer service. But committee members said they were not convinced that the airlines are taking full responsibility for consumer complaints or have specific plans for doing anything about problems that resulted in last week's accounts of passenger horror stories (DAILY, March 11).
DOT yesterday granted Continental's request for an exemption to delay until June 30 the startup date of its Cleveland-London Gatwick service. Under terms of its certificate, the carrier's authority would expire May 17. (Docket OST-99-5165)
American Eagle, the regional affiliate of American Airlines, is offering special fares to residents of surrounding cities to Chicago or Dallas/Fort Worth for the weekend. The "Shopper Fares" range from $58 to $88 roundtrip, with travel beginning the weekend of March 27. Sample roundtrip fares to DFW include $58 from Longview, Tyler, Waco or Wichita Falls, Texas. Roundtrip fares to Chicago include $58 from Springfield, Ill., $78 from Evansville, Ind., and $88 from Duluth, Minn., Montgomery, Ala., or Shreveport, La.
After failing to secure fifth-freedom rights from the U.K., France, Germany and Switzerland for Malaysia Airlines flights to the U.S., the Malaysian government has turned to Warsaw. Malaysia has signed a bilateral air services pact with Poland and asked Polish authorities for fifth-freedom rights permitting MAS to carry Polish passengers on flights to New York. Minister of Transport Ling Liong Sik said MAS wants to start service to Warsaw, but it would be uneconomical if the flights were to terminate in the Polish capital.
Skynet Holdings Inc. acquired a regional courier company, Nevada Fleet Management Inc., in what Skynet Chief Executive Vic Nizic said is the first of a planned series of "platform" deals to open up "new geographic service areas...around the world" for its time-sensitive delivery business. Skynet did not disclose terms of the deal.
Airports Council International-NA Executive VP Rob Wigington has left ACI to become senior associate for Booz-Allen&Hamilton's Airports Management Consulting Group. Wigington was with ACI since 1985, and was executive VP since 1996.
TAP Air Portugal flew 9.36 billion revenue passenger kilometers in 1998, up 6.6%, although freight volume fell 2.1% to 230 million ton kilometers. The airline transported 4,537,756 passengers, an 8.9% jump from 1997.
TWA's Air Line Pilots Association Master Executive Council on Tuesday unseated MEC Chairman Joe Chronic, who served during contentious contract negotiations last year. Chronic was up for re-election but was replaced by Tom Brown, a New York-based MD80 captain who has worked in the grievance arena and served four terms as the New York local council flight engineer representative. Brown has been with TWA since 1969 and experienced two furloughs, the union said.
Montenegro Airlines applied at DOT for exemption authority to operate combination service between Tivat, Montenegro, and points in the U.S. - "specifically, New York." The carrier was organized in 1996 under the laws of Yugoslavia - designated Category 3 by FAA - which has regulatory jurisdiction over it, and it is 99.2% owned and controlled by the government of Montenegro.
Detroit-based Spirit Airlines said it will move its corporate headquarters next month to Miramar, Fla., in the Fort Lauderdale area, to accommodate growth and expansion plans. Spirit said several entities, including the Broward County Commission and Office of Economic Development, the governor's office, the City of Miramar and the Fort Lauderdale Hollywood Airport contributed to Spirit's decision to relocate there. Its reservations center and maintenance facility will remain in Detroit and expand.
Evergreen International Aviation faces cash flow pressures as it maintains its older aircraft, replaces some of them, upgrades others for Stage 3 noise rule compliance, and funds the growth of its aircraft maintenance business, Moody's Investors Service reported. Evergreen generates 70% of its revenues from cargo, operating 11 747 and 10 DC-9 aircraft with an average age of 28 years, Moody's said as it assigned ratings to $420 million in senior debt.
The House Transportation Committee is not sure that Chairman Bud Shuster's (R-Pa.) five-year, $89 billion FAA reauthorization bill can command a majority in the House and is holding up reporting the bill until it is more confident about a floor vote, committee sources said yesterday. "We need to get enough support" for a majority, one source said.
America West flight attendants, represented by the Association of Flight Attendants, held a lottery yesterday at Phoenix Sky Harbor Airport to give the flying public an idea of when and where CHAOS (Create Havoc Around Our System) will strike first. The union claims America West, in the face of CHAOS actions, is threatening a total shutdown, and it estimates such a move would cost the company $5.5 million a day.
International division results from major U.S. airlines during the third quarter of 1998 reveal that most carriers made a profit operating to most areas of the world. Northwest's Pacific division had a third quarter operating loss of $105.1 million but United's Pacific unit showed a $31.2 million operating profit. In data filed with DOT, TWA's Atlantic division showed the second-worst result, with an operating loss of $13.1 million in the July-September period. It was the only negative Atlantic result.
American's quarterly Latin American inflight magazine, Nexos, debuted on flights to 33 cities south of the border. Nexos, written in Spanish and Portuguese, is distributed in addition to the carrier's American Way magazine.
Salomon Smith Barney has upgraded first quarter earnings estimates for five airlines - Continental, Delta, Southwest, Alaska and America West - and lowered numbers for three - American, Northwest and United. Despite low fuel prices, analyst Brian Harris expects first quarter pre-tax earnings to fall 38% year-over-year.
Pakistan International Airlines began this week flying all its North America service via Shannon, Ireland, a move that reduces travel times to Islamabad, Karachi and Lahore by more than an hour. The new routings, which took effect Monday, cover service from New York Kennedy, Washington and Toronto. They are the result of an analysis by Sabre Technology Solutions of how to improve operating efficiency and customer service. PIA said it is shedding "longer routings through more crowded gateways" in Europe.
