American asked DOT for exemption authority for scheduled combination service between the U.S., via points in Fiji and New Zealand, and Sydney, Melbourne, Brisbane, Cairns and Perth, Australia, and beyond to points in New Zealand. The carrier wants to integrate the exemption with existing authority to serve Australia, Fiji and New Zealand, and use it to expand its code share with Qantas, which applied separately for amended authority.
Continental will begin daily nonstop New York/Newark-Tel Aviv service in August, pending Israeli government approval, using new 777 aircraft. Continental VP-International Barry Simon said the service is the carrier's first to the Middle East "and marks a major step in the further development of our hub at Newark International Airport." The 777 will carry 48 BusinessFirst and 235 coach passengers. BusinessFirst features extra-wide electronic sleeper seats with laptop computer outlets, telephones and personal entertainment systems.
Spanish pilots union Syndicato Espanol de Pilotos de Lineas Aereas (Sepla) called for 15 days of strikes between Jan. 26 and March 26 at Iberia's regional subsidiary, Aviaco. Sepla is protesting Aviaco's failure to hire new pilots, as agreed in an accord reached last April 22. The airline replied publicly that the only reason it has not hired pilots so far is that the union representatives at Aviaco failed to agree with those of Iberia on a common promotion system that would be compatible with the group-wide system defined last year.
Garuda Indonesia has deferred delivery of four 737-300s and two 737-500s until 2001. The aircraft, the last in an order of 17 737s placed in 1996, initially were to be delivered on a staggered basis from November through March 2000. Five -300s and one -500 were delivered Jan. 2, and the other five aircraft were delivered in December 1997. The new aircraft will serve domestic and regional routes, including Kuala Lumpur, Singapore and Hong Kong.
Taxes took a bigger bite out of US Airways Group's profits in 1998 than in 1997, resulting in a fourth quarter net profit of $104 million, down 78.3%. The company's results were affected by a 40.3% tax rate, up from 15.8% in 1997. Excluding one-time and unusual items, net income still fell 15.8%, however, and operating profits rose 20.9%. US Airways' net margin for 1998 fell 1.3 percentage points to 6.2%, excluding non-recurring events.
Senate Majority Leader Trent Lott (R-Miss.) has joined opposition to a hike in passenger facility charges.In remarks posted in the Jan. 19 Congressional Record, Lott said he is "not a fan of user fees....These are taxes, period. The goal of this Congress is to cut taxes, not increase them." Lott said higher PFCs would force people to reconsider travel plans.
Delta continues to draw criticism for its $1 surcharge on each fare component of domestic tickets not booked on its own web site. Last week, the American Society of Travel Agents (ASTA) blasted Delta for the surcharge and this week both the Business Travel Coalition (BTC) and American Automobile Association (AAA) came out against it. AAA called the surcharge unfair to consumers. "The airline industry made billions last year and just completed the second best fourth quarter ever," said AAA Association and Club Services Executive VP Mark Brown.
Lower earnings and yields in the fourth quarter did not stop American parent AMR Corp. from posting record 1998 profits of $1.3 billion. The results, announced yesterday, were $329 million or 33.4% better than 1997. Annual revenue increased 5.6% to $19.2 billion. But the fourth quarter did not fare as well - operating earnings dropped 12.1% to $334 million and net profits 12.5% to $182 million. The chief culprit was lower yields due to stagnant or declining ticket prices.
Another private carrier, Hokkaido International Airlines (HIA), has joined the fray in Japan's domestic network, competing with Japan Airlines, Japan Air System, All Nippon Airways and Skymark Airlines, which started operations last July. Hardly two weeks since its launch, HIA already is worrying its competitors, offering a 36% discount off regular fares on the busy route between Tokyo Haneda and Sapporo, Hokkaido, one of the areas worst hit by Japan's recession.
Raytheon Travel Air, fractional ownership subsidiary of Raytheon Aircraft Co., said it is looking at opportunities to extend the program to international markets. Gary Hart, president, said the company's domestic program has "exceeded expectations," and "we want to offer our current and future U.S. owners additional flexibility abroad as well as offer new owners within the international market the unique advantages of fractional aircraft ownership." Raytheon's current fleet comprises 10 Hawker 80XPs, 16 Beechjet 400As and seven King Air B200s.
David Bond, editor-in-chief of Aviation DAILY and editorial director of Aviation Week Newsletters, said yesterday he plans to retire from The McGraw-Hill Companies during the spring.
Qantas will use a Hollywood-style unveiling today to debut its most extensive international refurbishment to date, including new seats and inflight updates on its long-haul 747-400 fleet and a new ad campaign that will air on 17 networks. The new interiors feature a flatbed that is 6.5 feet long, new "Dreamtime Seats" in business class featuring the industry's first five-way electronic controls and new economy seats with lumbar support and adjustable headrests.
Air New Zealand and United have broadened their code share to cover 146 daily flights versus the previous 34. The expansion covers U.S. cities beyond Los Angeles that ANZ does not currently serve: San Francisco, Las Vegas, Seattle, New York, Washington, Denver, Chicago and Boston.
The European Union's prospective limit on use of hushkitted and certain re-engined aircraft "targets non-European operators...and spares European operators," denying U.S. carriers the "unqualified right" to select the best-suited Chapter 3-compliant aircraft for its operations, Northwest said in its complaint to DOT against the EU (DAILY, Jan. 19). If the limitation were in the form of a regulation, it would be binding on each of the 15 EU member states and would violate the bilateral aviation agreements between the U.S. and the individual EU nations, Northwest said.
The management of national carrier Air-India will throw open the facilities at its newly commissioned 216 million rupees (US$5.4 million) aircraft engine servicing and maintenance shop at Mumbai to other carriers, including foreign airlines, to increase its revenues, Air-India sources said. The largest of its kind in Asia, the workshop specializes in overhauling Pratt&Whitney 4056 engines and can handle at least a dozen large turbofan engines at one time.
Cargo traffic fell 4% in November, the Air Transport Association reported. Domestic cargo was down by 4.1% and international cargo 3.9%. ATA President Carol Hallett said year-to-date growth remains steady.
Spanair is offering getaway packages to Spain, including roundtrip airfare and two hotel nights, for $349. The Spain Plus promotion is valid for eight cities.
Senate Commerce Committee Chairman John McCain yesterday introduced a two-year FAA reauthorization bill nearly identical to last year's McCain bill, which died in conference after passing the Senate 92-1. The new bill retains controversial provisions that never were resolved, leading instead to a compromise short-term FAA reauthorization that expires March 31.
Boeing yesterday announced the sale of its MD 500, MD 600N and MD Explorer series of light commercial helicopter lines to MD Helicopter Holding Inc., an indirect subsidiary of Europe-based industrial group RDM Holding Inc. The sale, subject to U.S. Federal Trade Commission approval, is expected to be completed by mid-February at an undisclosed price. MD Helicopters said it will operate initially from existing Boeing facilities at Falcon Field Airport, Mesa, Ariz., and will build new local facilities at a later date.
British Aerospace will acquire Marconi Electronic Systems for about $12.7 billion from General Electric Co. plc, the two British companies said yesterday. The deal would form a company with $20 billion in annual sales and 130,000 workers around the globe, and would rank No. 3 behind Boeing and Lockheed Martin. It also would put the U.K. aerospace industry in a strong position as the European industry further consolidates.
American, holding a controlling interest in Reno Air, told DOT yesterday that "United's agenda for continued slot dominance at [Chicago] O'Hare" should not "destroy the City of Reno's critically important service link to O'Hare." United wants DOT to reallocate seven slots held by Reno Air to a qualifying new entrant, telling DOT that ownership by American disqualifies Reno Air (DAILY, Jan. 11). "Reno Air was clearly a 'new entrant' at the time of the Reno-O'Hare slot exemptions on 1994 and 1997, and has long provided nonstop service" in the market.
Indonesia will close 54 small airports in remote areas of the country, according to a report in the Indonesian Observer. The country has 158 such airports. The main reason is the country's economic crisis, which has reduced passengers and increased costs in operating the airports.
Delta management has agreed to early contract talks with its Air Line Pilots Association unit. The union last week asked management to begin negotiations in September (DAILY, Jan. 12). Delta suggests they start as soon as negotiations over pilot pay and work rules are settled for the new 777 or on Sept. 8, whichever comes first. Delta's ALPA negotiators plan to begin early openers on the 777 pay and work rules in February. The pilot labor contract becomes amendable in May 2000.
Delta yesterday posted record earnings for the fourth quarter and calendar year 1998, its best year ever in terms of revenue, passenger load factor, passengers carried and cash flow. On top of the records, the company's operating margin finished the year at 12.5%, positioning the carrier well if traffic ebbs this year. The fourth quarter margin was 9.3%. Record fourth quarter net income of $194 million was up 2%, while revenue gained marginally to $3.45 billion. Delta's fuel costs were $58 million lower in the fourth quarter and $280 million lower for 1998.
Colgan Air may continue essential air service at Augusta/Waterville, Bar Harbor and Rockland, Maine, and Rutland, Vt., DOT has tentatively decided. Annual subsidy would be $2,387,225 for the period Jan. 1, 1999-Dec. 31, 2000. EAS for the Maine points requires at least two daily roundtrips to Boston, nonstop service to Augusta/Waterville and one-stop service to Bar Harbor and Rockland. At Rutland, EAS requires at least two roundtrips a day either to Boston or New York with no more than one intermediate stop. (Docket OST 97-2784)
