Western Pacific, undergoing bankruptcy liquidation procedures, asked DOT to transfer its certificate of public convenience and necessity to Blue Line Holding Corp., the assignee of Star Air Trading Corp. WestPac needs approval of the transfer if it is to sell the certificate for $350,000 to help settle bankruptcy claims. WestPac originally planned to create a subsidiary, transfer the certificate to it with a disclaimer from DOT over jurisdiction, and then sell the certificate to Star Air Trading.
Airborne Freight Corp. reported first quarter net earnings of $32.4 million, more than double net earnings of $14.4 million for the same period last year. Revenues rose 14.5% to $750.2 million from $655.5 million. Domestic revenues were up 18% to $622.5 million, but international revenues fell 6% to $87.7 million. Roy Liljebeck, chief financial officer, said the operating margin, 7.7%, was the "strongest first quarter performance ever experienced by Airborne." He said financial problems in Asia impacted international business.
Pilots at potential alliance partners American and British Airways met yesterday in Montreal to develop a cooperative agreement that would take effect if the alliance becomes a reality. Allied Pilots Association President Rich LaVoy said international code-sharing alliances "are a fact of life, and it is absolutely essential that the employees of these carriers find ways to work together to protect our mutual interests." The two pilot groups drafted a protocol that is being considered by all unions at American and BA.
Denver-based Frontier Airlines is introducing a series of vacation packages it hopes will generate as much as $6 million in revenue in the first year. Frontier, one of few low-fare carriers to sell vacation packages, is offering travel agents commissions starting at 10% to book the air- inclusive tours. Booking begins May 5 and travel June 15. Frontier is working with Adventure Vacations, Hunt Valley, Md., to produce 14 packages from Denver. It intends to expand eventually to all its destinations, said Marketing Director Jeff Potter.
Brussels-based CityBird and Sabena are launching a 55-city fare sale as part of an enhanced interline pact between the two carriers. CityBird is offering one-way fares as low as $339 to Paris and $375 to Prague from any of its North American gateways, which are Miami, Orlando, Los Angeles, San Francisco, Las Vegas, Mexico City and Puerto Vallarta. The interline fare sale is for travel beginning on CityBird and connecting to Sabena's short- and medium-haul travel within Europe. The program has no roundtrip purchase requirement or minimum/maximum stay.
Initial public comments filed with DOT on the department's proposed predatory competition policy are overwhelmingly positive, as consumers, business travelers and employees and officials of smaller airlines welcomed the department's action. DOT proposes to impose sanctions against major carriers defending hubs against new entrants if the majors take losses through price cutting and capacity expansion that appear rational only on the expectation that the niche carrier is driven from the market or folds.
Swisscargo plans to concentrate its freighter services at its hub in Basel, starting July 6, shifting service from Geneva. Swisscargo expects the change to yield better use of a wet-leased DC-10-30F aircraft and an opportunity to offer additional routes. Starting this week, the SAirGroup subsidiary will operate an additional DC-10F freighter aircraft, increasing its freighter fleet to three. Staff reductions at Geneva will be "minimal," with a corresponding increase at Basel.
Standard&Poor's lowered ratings for Japan Airlines, All Nippon Airways and Japan Air System, reflecting concerns over an increasingly competitive aviation environment in Japan, limited actions by the carriers in response and weak financial prospects for the coming years. S&P lowered JAL's long- term rating to double B+ from triple B+ and its short-term rating to B from A2. It removed all ratings from CreditWatch, where they were placed March 13, and the outlook on the long-term rating is negative.
Several carriers are considering eliminating advance boarding passes in view of FAA's heightened airport security requirements. American and American Eagle said this week they will issue boarding passes only on the day of departure, effective June 1, but will continue to offer seat reservations at the time of booking. Boarding passes will be issued up to six hours prior to travel.
Inmarsat's member governments have agreed to amend the pact governing the organization in what representatives termed a "significant step" toward Inmarsat becoming a private company early next year. The Inmarsat Assembly of Parties, meeting this week in London, approved amendments proposed by the Inmarsat Council and the Intersessional Working Group, which was formed to develop the privatization model.
FAA Administrator Jane Garvey is the sole witness scheduled to testify today before the Senate Commerce aviation subcommittee at 2 p.m. in Room 253 Russell on Airport Improvement Program reauthorization and National Civil Aviation Review Commission legislation. This morning, the House Transportation aviation subcommittee will hear DOT Assistant Secretary Charles Hunnicutt, Deputy Assistant Attorney General John Nannes and officials from American, Northwest, Delta and United on international agreements, DOT actions and competition issues.
Latin America has a requirement for 700 new aircraft valued at $37 billion during the next 10 years, John Hayhurst, Boeing's VP-Sales, Americas, said this week at the International Airline CEO conference. Predicting that 85% of the new aircraft will be narrowbodies, Hayhurst said Boeing expects the region to grow 8.5% annually through 2007. Boeing's annual global market forecast is due in June, and Hayhurst said "Latin American economic growth and financial stability will continue to improve."
Swissair is considering a cross-ownership deal with AOM in which it would acquire 20% of the French airline, Swissair Director General Geoffrey Katz said Tuesday in Paris. Katz was inaugurating a Paris Orly-Zurich route, which AOM operates under a code-share agreement with Swissair. AOM is owned by Consortium de Realisation, a subsidiary of Credit Lyonnais, and is among assets that the troubled French state-owned bank intends to sell off.
Delta is offering introductory fares to Lima, Peru, starting at $468 roundtrip from Atlanta. Tickets are available through May 7 for travel originating between July 1, when Delta inaugurates the service, and Sept. 30.
FAA will begin construction in June to replace instrument landing system facilities on runways 6 and 24 at Bradley Airport, Windsor Locks, Conn., state officials announced.
TWA has decided to join the LatinPass frequent flyer program, just weeks after the airline unveiled Aviators, its own newly revamped program. LatinPass includes 11 Latin American carriers, KLM and US Airways. TWA has given no firm date for the start of its participation.
Cargolux multiplied its profits by four last year to $30.7 million. Heiner Wilkens, chairman of the Luxembourg-based all-freight airline, attributed the results to a "very strong international market" and low fuel prices. Cargolux's turnover jumped to $477 million last year, up from $396 million in 1996, and the company carried 273,696 metric tons with a load factor of 93%. The company said it averaged 15.2 hours of operations per day for its five 747-400 freighters and 14 hours for its three 747-200s.
DOT granted Lufthansa's request for a slot exemption at Chicago O'Hare Airport to operate an additional daily arrival from Frankfurt during slot- controlled hours. In its order DOT emphasized that it decides exemption requests "on a case-by-case basis," and petitioning DOT is not a "substitute mechanism for the slot-allocation procedures." Lufthansa followed those procedures, and FAA allocated Lufthansa four slots - two for combination service and two for all-cargo service - for the 1998 summer season, as it had for 1997.
CFM International and Boeing have reached an agreement under which CFMI will distribute CFM56-7 medium turbofan maintenance documents through Boeing's On-Line Data, or BOLD, system. Digitized versions of the engine manual, illustrated parts catalog and service bulletins for the CFM56-7, which powers next-generation Boeing 737 series aircraft, will be available this year. Forty customers have ordered 866 next-generation 737s.
Frank Colson, associate director of civil aviation, U.S. Air Force, and executive director, Defense Department Policy Board on Federal Aviation, will retire, DOD announced. Neil Planzer, director of the Air Traffic System Requirements Service at FAA, will succeed him.
Air Europe Italy leased two 777-200s from International Lease Finance Corp. The aircraft, powered by Pratt&Whitney engines, will be delivered in July and October 1999. Air Europe currently leases four 767-300s from ILFC.
Pan Am is expected to announce a new buyer today. The investor is a non-aviation-related firm that is expected to settle outstanding claims and put fresh capital into the carrier. The firm is not among those speculated about previously, The DAILY has learned. Pan Am is expected to announce a new buyer today
