Kitty Hawk expressed concern about its first quarter earnings due to "poor operating results" of American International Airways, which it acquired last November. Tom Christopher, Kitty Hawk chairman, said that "although we face difficult challenges with AIA, we remain confident in the long-term benefits of the merger." Operating its own and leased aircraft, Kitty Hawk provides global air freight service, scheduled overnight cargo service to 28 U.S. cities and charter passenger service.
U.S. major airline unit cost structures remained largely fixed over the last five years, and, when inflation is factored in, the industry's cost per available seat mile (CASM) actually declined. The largest 10 airlines reported a 0.4% increase in CASM last year, according to a DAILY analysis of DOT data. (See charts on Pages 487-488.) Majors' average CASM for 1993 was 9.17 cents, rising to 9.41 in 1997. With a 3% annual inflation rate, the five-year trend would have led to a 1997 CASM of 10.32 cents.
American Eagle will introduce regional jet service May 15 between Chicago O'Hare and Cleveland, Cincinnati and Milwaukee. Eagle will offer the 50- seat Embraer RJ145 on six roundtrips to Cleveland, five to Cincinnati and one to Milwaukee.
Polar Air Cargo said yesterday it will be the first major U.S. scheduled all-cargo operator to equip its fleet with traffic alert and collision avoidance system (TCAS). The first 747 freighter with TCAS flew yesterday, and Dick Scholl, VP-maintenance, said all 17 747s will have TCAS by yearend.
Negotiators from the U.S. and Argentina had a "good first round" of open- skies talks in Buenos Aires last week, a DOT spokesman said.No dates are set for the next round, expected soon. Argentina offered immediate "open rights" for U.S. cargo operators, based on comity and reciprocity, in advance of open skies.
Washington Consulting Group (WCG), which raised conflict-of-interest questions in a recent unsuccessful protest of a major FAA contract award, has settled out of court charges that it falsified labor costs in a number of federal contracts. The $425,000 settlement was reached March 10, more than four years after the Dec. 30, 1993, filing of the complaint by a former WCG employee, later joined by the Justice Department. In signing the agreement, WCG admitted no guilt or wrongdoing.
Germany has been well apprised of the European Commission's position on open-skies agreements, an EC spokesperson told The DAILY yesterday, countering statements by Germany's transport counselor in the U.S. embassy (DAILY, March, 18). Since the inception of the U.S. open-skies policy in late 1994, the spokesperson said, the EC has maintained that member states had "lost their competence" to negotiate bilateral aviation agreements with the institution of the single aviation market in 1993.
While most airlines are scrambling to get their share of business travel, Spirit Airlines continues to market itself as a leisure carrier. It seems to be working - net profit climbed to $1 million last year, and its load factors stabilized in the high 70s to low 80s, said Vice Chairman Mark Kahan. Unlike many startups, Spirit survived the exodus of passengers following the ValuJet crash. It also survived last year's failed purchase bid by Comair Holdings, and so far it has held on at Detroit Metro Airport despite not having its own gate.
American will begin its Japan Airlines code share with only one Japanese city-pair, Tokyo-Nagoya, and one beyond market, Tokyo-Bangkok. In the 15 initial code-share routes that start in October, JAL will offer service beyond Dallas, Chicago and Los Angeles to Orlando, Miami and Las Vegas. Total city-pairs will rise to 100 by summer 1999.
Continental will take delivery of 64 Boeing aircraft this year - on average, one every 5.7 days - making it one of the top aircraft customers in the world. The airline received 20 new Boeings last year but needed used aircraft as well - it bought three used DC-10-30s and leased seven more.
Eva Airways has overtaken China Airlines over the Pacific. Investment company Goldman Sachs now regards CAL as a "niche carrier," because 45% of its revenue comes from two markets - Hong Kong and Japan.
American Society of Travel Agents will hold its Western Regional Conference May 26-29 in Reno at John Ascuaga's Nugget Hotel. More than 700 travel industry professionals are expected to attend.
DOT Secretary Rodney Slater is accompanying President Clinton and others on a trip to Africa promoting economic and political ties. The group was scheduled to leave yesterday for Uganda, Ghana, Senegal, Botswana, Rwanda and South Africa, returning April 2.
FAA said last week it has revoked the air carrier certificate of Erie Airways, based in Erie, Pa. The order charges that the on-demand Part 135 carrier, which operated two Cessna Citations and one King Air, used "unqualified pilots on passenger-carrying revenue flights." FAA also accused Erie of "falsification of load manifests of four such revenue flights to indicate that they were being operated under Part 91" when "in fact, they were required to be operated under Part 135."
British Airways appointed Robert Jones account manager, Atlanta; Jason Werther account manager, Baltimore; Joe Hoelle account manager, the Carolinas, and Jeff Melang sales manager, based in Atlanta.
Although the procedural stall in DOT's review of the American-British Airways alliance stems from airline reluctance to hand over more documents (DAILY, March 20), their hesitation is linked to Europe, according to the General Accounting Office.
Hong Kong-based Dragonair is one of the world's most profitable airlines, with earnings almost 25% of revenue. In 1996, the privately held company's operating profit was US$108 million, up 10.3%, against revenues of US$396 million, up 8.8%. Traffic that year increased 9.6% to 2516 million revenue passenger kilometers. In the first half of 1997, turnover was US$212 million and the operating profit was US$54 million.
Business travelers who say airlines are getting fat off business fares may be misreading the American Express Airfare Index, analysts say.The index shows business fares have risen as much as 50% since 1992, but the average domestic yield of the 10 U.S. majors increased only about 7.8%. The index reflects fares paid by AMEX travel service customers - Fortune 500 companies that often pay the highest walkup fare.
Mountain Air Express filed notices of registration with DOT of two trade names it plans to use following its purchase out of bankruptcy by Air Wisconsin. During a transition period, it will operate as Air Wisconsin or United Express and requested registration of the trade names "Mountain Air Express, Inc. d/b/a Air Wisconsin Airlines Corporation" and "Mountain Air Express, Inc. d/b/a Air Wisconsin Airlines Corporation d/b/a United Express." (Docket OST-98-3649)
