United will take its time introducing the Boeing 777 into Asia, despite the airline's current capacity shrinkage in several Pacific markets. "We are seriously considering using it," said United President John Edwardson, "but we're not there yet." United's Asian work force, trained and equipped for the 747 fleet, is a fundamental factor in the 777 introduction.
Atlanta, Ga.-based Atlantic Southeast recorded a record net profit of $13.3 million, or 44 cents per share, in the first quarter of 1998 - a 24.2% increase from first quarter 1997's $10.7 million - as the company's revenues rose 4.6% to $93.7 million, also a record, while expenses climbed just 0.7% to $74.4 million. First Quarter 1998 First Quarter 1997 Oper. Revenues $93,748,000 $89,615,000 Oper. Expenses 74,389,000 73,865,000
Tower Air urged DOT to grant its request for four weekly U.S.-France frequencies it could launch this summer, saying frequencies available under the new bilateral should not be held hostage by American and US Airways requests for services starting next spring. The accord makes 21 weekly frequencies available this year, and four carriers are asking for a total of 32.
Strong revenue performance, very low fuel costs and a continued appetite for Southwest's product boosted net profits 37.6% in the first quarter to $70 million. The low-fare airline reduced unit costs 3.2% to 7.37 cents, mainly because of cheaper jet fuel, and its 7.4% net margin was the best for a first quarter since 1984. "Any way you look at it, the revenue performance is very good," Chief Financial Officer Gary Kelly said yesterday. Second quarter prospects are good, he added, and bookings in May and June are strong.
City of Fort Worth filed at DOT in opposition to Legend Airlines' proposed long-haul, nonstop Love Field service (DAILY, March 27), which the city depicted as compromising agreements underpinning Dallas/Fort Worth Airport as the locus for long-haul interstate service.
Airlines Reporting Corporation reported that travel agent sales processed for March were up 7% over the same month in 1997, to $7.7 billion. Domestic fares were down 1% to $4.8 billion while international fares climbed 16% to $2.3 billion, a new record for a five-week period. Domestic commissions were down 17% and international commissions were up 5%. Average weekly sales per agency location were up 21% to $36,974. ARC has 138 participating carriers and a total of 46,659 accredited travel agency locations.
U.S Major Carriers Productivity, In RPMs And ASMs Per Employee Fourth Quarter 1997 Revenue Available Passenger Seat Miles Miles Total (000) (000) Employees Alaska 2,490,376 3,846,951 8,237 America West 3,863,947 5,949,525 10,196
US Airways said it cannot begin Charlotte-London Gatwick service May 7, as planned, "in a reasonable, timely and competitive way under the conditions imposed by the British government" and yesterday announced postponement of the service (DAILY, Feb. 23). Calling the U.K.'s behavior unlawful, US Airways said its denial of commercially viable landing rights violates rights available to the U.S. under the U.S.-U.K. Bermuda II agreement. DOT has not issued a response to US Airways' complaint against the U.K. charging restricted access to London slots for U.S.
Southwest is offering daily 737-700 nonstops between Kansas City and Orlando and Kansas City and Portland. The new service brings the number of daily Southwest flights out of Kansas City to 58.
David Banmiller, who has fought to keep Pan Am aloft and surviving bankruptcy since taking the chief executive's role last year, will step down April 30. Banmiller, who has no specific plans, turns over the three- aircraft operation to Robert Mencil, a 20-year airline veteran who will become general manager. Mencil joined Carnival Air Lines in 1992 and became director of operations when Pan Am and Carnival merged last September. The airline, with 125 employees, has been operating charters since it stopped scheduled operations Feb.
Northwest will begin jet service between Detroit and Lexington, Ky., on July 1. Northwest Airlink currently offers four daily turboprop flights, but the parent airline will upgrade two of the regional flights to jets.
United's quick action to alter transpacific service after Asia's economic downturn enabled the airline to stem its revenue losses in the region and show record profits from the strength of other parts of the world. United posted net profits of $218 million in the first quarter, up 1.4%. Operating revenue declined 1.6% to $4.06 billion and unit costs dropped 3.5% to 9.83 cents. Yield was flat at 12.77 cents and the breakeven load factor improved 2.6 percentage points to 60.1%.
In a move not formally sanctioned by union leadership, some Northwest machinists staged a work slowdown Tuesday that disrupted about 50 of the airline's 1,700 daily flights. "Obviously, it's an inconvenience to customers," a Northwest spokesman said, "but it's a not uncommon sideshow that comes along with contract negotiations." A spokesman for District 143 of the International Association of Machinists said, "I'm not even sure there was an event," suggesting the number of delays was not out of line with a normal day.
Delta Connection carrier Comair is offering double Delta frequent flyer miles for flights from Boston Logan Airport to Montreal and Toronto through June 15. Comair has expanded Toronto service by two morning flights and Montreal service by one afternoon flight. Comair Holdings' board declared its 43rd consecutive quarterly cash dividend, $0.04 per share for shareholders of record on May 4.
FedEx said yesterday it will purchase 20 MD-11 aircraft from Flight Lease Ltd., a subsidiary of SAirGroup, and has ordered three new MD-11s from Boeing. The used aircraft, scheduled for delivery between August 2002 and December 2006, will be converted to freighters by a vendor yet to be selected. The new-order MD-11s, to be powered by Pratt&Whitney engines, are scheduled for delivery between March and June 1999. They will replace three MD-11s purchased from American that were to have been delivered next year.
Atlas Air's net income for the second quarter increased 6% to $5.3 million. Operating income was up 26% to $21.5 million. Revenues were down to $79.6 million from $82 million during the same quarter last year. Block hours also declined, to 15,388 from 15,443.
US Airways posted a record operating profit of $192.1 million in the first quarter, up 9.4%, as fuel expenses fell nearly 26%. The company spent $58 million less on jet fuel in the quarter. Net income was $98.3 million, down 35.6% because US Airways paid a corporate income tax rate of 40% this year versus 8% in the first quarter of 1997. US Airways paid 57.66 cents per gallon for jet fuel in the March quarter, compared with 75.44 cents in the year-earlier period. Revenue dropped 1.8% to $2.06 billion.
Boeing reported a year-over-year increase in first quarter sales yesterday, but its net profit plummeted more than 90% as it continued to experience what Chairman Phil Condit termed "pricing pressures and lower price- escalation trends" as well as "production inefficiencies." Condit said sales totaled $12.9 billion and net earnings $50 million. In the first quarter of 1997, sales totaled $10.4 billion and net earnings $540 million. The net results included a $219 million after-tax forward loss on the next- generation 737 program.
British Airways will launch its electronic ticketing service in May on U.S.-London Gatwick flights. E-ticketing went on sale Tuesday for flights starting May 11 from San Diego, Phoenix, Houston, Dallas/Fort Worth, Atlanta, Orlando, Charlotte, Baltimore, Bermuda and Pittsburgh, and June 1 from Denver.
Reno Air will launch summer service June 11 with three nonstop, weekday flights from its San Jose hub to Portland and Seattle, increasing connections between the Pacific Northwest, Southern California and Las Vegas. Reno will resume seasonal nonstop service between Reno and Anchorage with one daily flight, and will increase frequencies to other points, including San Diego and Orange County, Calif.
American, which vociferously opposed Wright Amendment changes to loosen limits on commercial airline service at Dallas Love Field, has asked the City of Dallas to intervene in its effort to obtain two gates at the close- in Dallas airport, saying it plans intrastate service initially and interstate service eventually. Earlier, American said repeatedly that it opposed any new service at Love because it would harm its hub at Dallas/Fort Worth Airport, but if any airline offered service there, it would also fly out of Love to maintain its competitive stance.
If mega-alliances have a future, Virgin Atlantic will be around to make their lives hell, Virgin Director of External Affairs and Route Development Barry Humphreys promised last week at the Seventh Annual International Aviation Symposium in Phoenix. Humphreys, a panelist on mega-alliances, rebutted the pro-consumer, seamless-service, boost-for-shareholders alliance description offered by United and American earlier in the week. He contended that mega-alliances are doomed because, among other reasons, regulators and the public will not allow a "global oligopoly."
U.S Major Carriers Productivity, In Revenues and Expenses Per Employe Fourth Quarter 1997, In Dollars Total Total Operating Operating Revenues Expenses Total (000) (000) Employees Alaska 352,156 328,656 8,237 America West 476,047 434,503 10,196
AirNet Systems plans to acquire Mercury Business Services of Boston for 160,000 AirNet common shares in a transaction valued at $4.6 million. Mercury's revenue grew 25% in 1997 to $6.3 million.
