U.S. Major Carriers Traffic September, 9 Months 1998 (000) September September % 1998 1997 Change Alaska Revenue Passenger Miles 917,000 805,000 13.9 Available Seat Miles 1,451,000 1,262,000 15.0 Load Factor (%) 63.2 63.8
Reno Air yesterday posted a record $12.5 million third quarter net profit, up 260%, including a $3.1 million gain from the sale of one aircraft. Yield increased 3.6% to 11.77 cents and unit costs dropped 5.6% to 7.59 cents from 8.04 cents. Revenue declined to $101.1 million from $105.2 million, while expenses fell to $89.8 million from $100.8 million. Despite the lower revenue, Reno posted a net margin of 9.3%, excluding the gain from the aircraft sale.
With increased focus on competition within the airline industry, one area has been totally overlooked - the effect of regional-jet limitations contained in pilot contract scope clauses, according to GKMG Consulting Services of Washington, D.C. The firm is forming "Proposition RJ," an alliance of airports, communities, airframe and engine manufacturers, to attack the problem as a means of fostering regional-jet service at small- and medium-sized communities. "There should be no doubt at this stage in the introduction of regional jets into the U.S.
Three more European airlines - Dublin-based CityJet, Venice-based Alpi Eagles and Zagreb-based Croatia Airlines - have joined the Europe Flight Pass program, formerly called EurAir Pass. For US$90 per flight segment a Flight Pass customer can fly to any point served by the 13 member airlines, according to the program's ground rules.
Cathay Pacific yesterday was finalizing a deal in which it will acquire a 40% stake in troubled Philippine Airlines for an undisclosed sum, according to Philippines President Joseph Estrada. "The negotiations for Cathay to buy a 40% stake in PAL are almost over," he said in a statement. Estrada noted that investor Lucio Tan, who fought the government earlier this decade to buy into PAL, no longer wants his majority stake. Northwest is now out of the running for a stake. "There are no more talks" with Northwest, Estrada said.
Japan Airlines and Cathay Pacific yesterday formed a long-term commercial partnership they hope will increase passenger traffic and the recently depressed Tokyo-Hong Kong corridor. Full implementation is targeted during the first half of 1999. The comprehensive alliance includes reciprocal frequent flyer program credit and code sharing. The tie-up was anticipated following Cathay Pacific's inclusion into the American-British Airways-Canadian oneworld alliance. JAL has alliances with both American and Canadian.
Continental Express's 1,200 pilots have voted 98% in favor of authorizing a strike if necessary to secure a new contract, said the Independent Association of Continental Pilots yesterday. Bill Borelli, president of the union, said in a written statement, "We hope negotiators for Continental will get busy and settle a fair contract." Without such progress, "we will press the National Mediation Board for a release so we are able to strike by the holidays," he said.
Financially troubled Taiwanese domestic carrier U-Land Airlines failed to pay its employees monthly salaries, due Oct. 10, leading to further speculation that the company may not be able to survive, despite an optimistic plan presented to Taiwan's Ministry of Transportation and Communications last week.
United Parcel Service asked DOT for an exemption to provide scheduled cargo service from any points in the U.S. to any points in the Dominican Republic and Costa Rica and beyond, via any intermediate points, with full traffic rights between all points. The carrier wants to begin five-times-weekly Orlando-Santo Domingo and West Palm Beach-San Jose service Jan. 1, 1999, using 757 freighters. UPS said it "could easily increase capacity" to a 767 if traffic warrants, using aircraft in its fleet.
Detroit-based ProAir has acquired a 737-400, expanding its fleet to three. The carrier will use the aircraft to increase frequencies and improve departure times on its current routes, and to support seasonal service to Fort Myers, Orlando and Tampa/St. Petersburg, new service to Las Vegas, and possible service to additional cities. The aircraft will enter service in mid-December, in time for the holiday travel season. It will be configured for eight first-class and 138 coach seats.
A budget agreement was worked out yesterday in principle by House, Senate and White House officials but could await passage until today or tomorrow as struggles continue on key elements, including aviation provisions. Congress passed another continuing resolution to keep the government operating through Friday.
Swissair, Turkish Airlines, Royal Air Maroc and Air Malta lodged a complaint with Milan's administrative court against Italy's new traffic distribution plan for Milan Linate and Malpensa airports, a Swissair spokesman said yesterday in Zurich. The carriers complained that they have to move their operations Oct.
Southwest is bringing back its "Friends Fly Free" promotion for a limited time. Customers 18 years or older who purchase a full-fare roundtrip ticket to any destination can bring a companion free of charge. Both travelers will receive credit in Southwest's frequent flyer program. Tickets may be purchased through Dec. 9 for travel through April 2. Seats are limited, are not available Nov. 24-30 and may not be available for some flights during peak time and holiday periods. At least one night's stay is required.
FAA is undertaking a six-month research and development effort after which it plans to issue orders requiring more fire-resistant insulation on aircraft, the agency said yesterday.
U.S. major airlines, including cargo carriers, have posted $100 billion in operating revenues for the first time over a 12-month period, the year ended June 30.Operating profits were $9 billion during the period, up $1.7 billion, and net profits were $5.8 billion, up $2 billion, according to DOT.
KLM and Dortmund, Germany-based Eurowings have signed a long-term alliance agreement that expands their current partnership. KLM said the deal makes Eurowings a major KLM alliance partner. As of Oct. 25, Eurowings will be fully integrated into KLM's Flying Dutchman frequent flyer program, which will enable passengers to redeem points on all KLM and Northwest flights and on other KLM-Northwest partners' flights. Northwest also has a code-share alliance with Eurowings.
The 20 airlines with the most enplanements in the second quarter among regional carriers also accounted for 92% of revenue passenger miles in the regional component, the Regional Airline Association reported. RAA said enplanements, revenue passenger miles and load factor for U.S. regionals all increased during the April-June period. Revenue passenger miles jumped 10.2%, twice as fast as available seat miles. (See tables above.)
Justice Department has added former Army Secretary John Marsh and an otherwise unidentified Paul Smith to the "certificate of interested persons" in TPI International Airways' case against the FAA, now before the U.S. court of appeals in Atlanta. The carrier says it was improperly grounded in 1990 after its aircraft had been sabotaged at Tinker AFB, Okla. Lawyers familiar with the case say the addition of Marsh and Smith (likely CIA) is a message to the court that the case involves national security issues.
Skyways of Sweden, which agreed to take over City Airlines' commitments for one Embraer ERJ-145 aircraft and four options, has exercised one of the options and therefore will take two of the jet aircraft, Embraer said. The first aircraft will be delivered later this month. The Skyways Group of airlines operates service on 32 routes most of which are within Sweden but five of which are international.
Continental has upgraded its web site, www.flycontinental.com, for compatibility with other tools, such as Windows CE and WebTV, and fast access to real-time schedules and flight information from the home page. Users can purchase travel specials at deeply discounted prices available only online. Canada-based users can book and purchase tickets online and receive up to 1,000 frequent flyer bonus miles for a limited time.
Delta and AeroMexico asked DOT for authority to apply their blocked-space, code-share agreement to AeroMexico flights between Houston and Cancun. They plan to begin the service Dec. 1. Delta applied for an exemption to operate scheduled combination service on the route and combine the exemption with other authorities it holds. (Docket OST-98-4577)
Reno Air signed a three-year contract with AMR Services to provide ramp service at Burbank for the airline's four daily flights to and from San Jose. AMR, which recently named Peter Pappas president, replacing Bella Goren, also provides service for Reno Air at San Diego, San Jose, Reno, Las Vegas and Colorado Springs.
DOT has tentatively decided to award Hailey, Idaho-based Air Ketchum a commuter certificate. Air Ketchum, founded by real estate developer Leonard McIntosh, has proposed to operate two daily roundtrips five days a week between Hailey and Boise, Idaho, using a four-seat Beech Baron. DOT in may 1997 awarded the company authority to operate as an air taxi under Part 298.
Impending downturn in the economy - some think a recession - would boost the fortunes of regional airlines, analysts are saying. The carriers with regional jets, they say, would allow mainline carriers to downgrade lift in favor of their regional surrogates on routes that would no longer support larger aircraft. The fact is that regional airlines carry 70% high-yield business travelers versus the mainline carriers' 40%.
