Russell Ray, president and chief executive of World Airways since April 1997, has been elected chairman. He succeeds Coleman Andrews, who became chief executive of South African Airways (DAILY, June 15).
Traffic for 16 of the nation's largest regional airlines increased an average of 23.95% during May compared with the same month a year ago. That compares with an increase in capacity of only 16.67% - a spread of 7.28 percentage points. United Express Atlantic Coast led the group with a 94.26% jump in traffic, a 33-point spread over its capacity increase of 61.28%. Northwest Airlink Mesaba was next with traffic up 75.25%, but that was outpaced by an 80.45% increase in capacity as the company continues to add new Avro RJ85s and Saab 340s to its fleet.
...Fairchild Dornier's new 728 series is being touted by at least one senior airline executive as the "[Fokker] F28 for the 21st Century. I love the [70-seat] 728 and the [90-seat] 928. They are going to be great for low-cost, short-haul operations." He said their capability of providing two classes of service is "the next step in the seamless-service progression. If the [code-sharing] regional airlines start offering first- class service, there will be no passenger perception of actually changing airlines. Having that cabin creates loyalty," he added.
The world's airlines posted revenues of $291 billion and an operating profit of $16.5 billion last year, according to preliminary data published by the International Civil Aviation Organization (ICAO). Operating expenses totaled $274.5 billion. The revenue total was up 3% while expenses increased less than 2%. The global airline industry has never showed a double-digit operating margin, according to ICAO's statistics, which date from 1947. Last year's operating margin, the highest in a decade, is estimated at 5.7%.
Mesa Air Group will move the bulk of its operations out of its Farmington, N.M., base and its Dallas-based training operation by September. "We will move," The DAILY was told by new CEO Jonathan Ornstein. He said the company is looking at Phoenix as well as two cities on the East Coast and one in the Midwest. With the loss of its United code in Denver and on the West Coast, the bulk of Mesa's operations are now east of the Mississippi for US Airways and out of Phoenix for America West. Reservations and parts of accounting probably will remain in Farmington.
Earl Robinson, president of the Fairchild Dornier Regional and Business Aircraft unit and the engineering power behind the company's new 728 series of aircraft, resigned last week. He was said to be uncomfortable with some major top management changes being made within the organization (see related story below). "We are disappointed he left," said Fairchild Aerospace President Jim Robinson (no relation), who recently credited Robinson with being "the catalyst...to cause the 328JET program to remain on schedule and under budget," and with reducing costs...
British regional carrier CityJet inaugurated service to Dublin from East Midlands Airport yesterday. Using a Saab 2000, CityJet will operate 52 flights a week between the two airports, with four round-trip flights each weekday and three each on Saturday and Sunday.
Although TWA and its Air Line Pilots Association unit have been in accelerated contract negotiations for about two weeks, union leaders are concerned that talks are slowing down. The next week to 10 days will be "pivotal," TWA ALPA spokeswoman Gina Butikofer said yesterday. Despite the increased pace of negotiations - from five to seven days a week - union leaders said they are worried that they are not getting results.
The European Commission has closed its investigative file on subsidies for the Fokker 70 regional aircraft development project. The decision, announced yesterday, followed Dutch government assurances that it will keep trying to recover grants worth 163 million European currency units (US$179 million) from the estate of bankrupt manufacturer Fokker Aircraft N.V. The aid, on which Brussels received notice in 1993, comprised a royalty-backed loan, a bank-loan guarantee and advanced interest payments on the loan, all backed by the Dutch government.
South African Airways announced the hiring of Coleman Andrews as chief executive (DAILY, June 15). He replaces Michael Myburgh, who will remain in office through July 31. Andrews turned World Airways around from a $200 million deficit to a profit of more than $70 million.
DOT issued a notice for publication in the Federal Register providing guidance on the effect on economic authority of a carrier that enters into a voluntary cessation agreement with FAA as a result of safety problems, when FAA does not issue an emergency suspension notice. When a carrier ceases all operations, it may not resume operations until it has provided DOT with 45 days' notice and has been redetermined as fit.
Atlas Air said its first Boeing 747-400 freighter will go to British Airways under a long-term contract. An Atlas 747-200 with BA will be placed with another customer, the company said.
Airservices Australia said it has successfully completed initial flight trials with the wide area component of its GNSS (Global Navigation Satellite System) Augmentation System Test Bed (ASTB). Stanford Telecommunications, which was instrumental in demonstrating the technology in North America and Europe, supported the Australia tests.
DOT is granting interim confidential treatment to new British Airways documents in the American-BA antitrust immunity proceeding while the department decides whether they merit permanent protection under Rule 39 confidentiality procedures. The documents became known during the Justice Department's review of the alliance. One is identified in the DOT order as a document called "An American in New York." The others are a deposition transcript from the Virgin Atlantic lawsuit against BA, and London-New York route research.
Detroit-based Pro Air yesterday finalized its agreements with Chrysler Corp. and General Motors to provide air travel for employees of both companies (DAILY, June 12). The agreements direct employees traveling on business to Baltimore, Indianapolis, Newark or Philadelphia to fly Pro Air out of Detroit City Airport. They also apply to Chrysler and GM suppliers traveling on business to the automakers. Spouses and under-21 dependents of the two companies' employees may travel to any Pro Air destination on standby for $25 per flight segment.
Providing more benefits to more travelers and injecting new competition into the market are among arguments used by the four U.S. airlines competing for remaining U.S.-France frequencies. The flights, which would start in 1999, are vastly oversubscribed - carriers seek 42 weekly frequencies, and only 17 are available. American wants 14, Delta 14, United seven and US Airways seven.
California-based First Class Travel International accused American and The Sabre Group yesterday of deliberately interfering with its corporate clients and violating DOT's computer reservations system regulations. Seeking punitive damages and a declaration that American's and Sabre's actions were unlawful, First Class Travel filed with DOT after a Dallas magistrate ruled that federal law pre-empted its right to sue under a state law (DAILY, June 11).
American received quick approval of its request for allocation of seven U.S.-Peru frequencies to provide scheduled combination service between Miami and Lima. DOT granted the authority for an indefinite period. The department solicited applications last week from carriers with "near-term" plans to serve Peru (DAILY, June 11), commenting that American was the only airline that had announced such plans. American began operating the daily nonstop 757-223ER service June 1 under a permit issued by Peru on an extrabilateral basis.
DOT released its sixth report on domestic airline fares, this one for the fourth quarter of 1997. As with previous reports, most of the 39-page document lists price and traffic data in more than 1,000 city-pairs. The report notes that the number of markets served by low-fare carriers increased but the number of passengers paying lower fares declined because new entrants shifted from dense markets to thinner ones. The report can be downloaded from the DOT web site at http://dms.dot.gov/ost/aviation.
American's service launch into Houston Hobby from New York LaGuardia is "purely getting back at Continental" for starting service from Dallas Love Field, said Edward Starkman, SBC Warburg Dillon Reed analyst. Houston-New York is "not a natural market" for American, he said. "Some things never change in this business."
American Trans Air's earnings for the June quarter will be significantly better than those of the year-earlier quarter, parent Amtran Inc. said yesterday. ATA, which typically has strong first and third quarters, has "worked diligently" to reduce the seasonality of its business and improve aircraft utilization rates, said Chief Executive John Tague.
The U.S. Postal Service's Global Package Link (GPL) service enjoys advantages over private competitors, the General Accounting Office told Congress. GAO investigated delivery and customer clearances for GPL and private express parcels in Canada, Japan and the U.K. "All three countries had separate customs clearance processes and requirements for mail and parcels imported by private express carriers," GAO told Rep. John McHugh (R-N.Y.), chairman of the House subcommittee on the Postal Service. "Under U.S.
Cathay Pacific will start daily nonstop service Dec. 1 between Hong Kong and San Francisco, subject to government approval, using a three-class A340-300. The aircraft will have 12 seats in first class, 40 in business and 197 in economy. The San Francisco flight will depart at 11:25 p.m., cross the international date line and arrive in Hong Kong two days later.
An on-again, off-again dispute between FAA and Part 135 cargo operators is on again. National Air Transportation Association is accusing FAA of bad faith in issuing internal guidance to its inspectors that requires the grounding of all Learjets and Cessna Citations used in Part 135 cargo operations. FAA says the operators block an aircraft exit with cargo, leaving only one other exit for an emergency escape by the crew. NATA says the section of Part 135 concerning cargo operations requires only one exit.
