New stabilizing forces have emerged since the downturn of the aerospace industry in the early 1990s that will make its volatile business cycle less severe, says Joe Leonard, president of AlliedSignal Aerospace Marketing. Improved information flow, shorter manufacturing lead times, standardization of equipment and a more business-oriented leadership style will help the industry react more quickly to marketplace changes, he said.
DOT granted LTU International's request to operate weekly charter passenger Zurich-Miami roundtrips over the objections of Northwest, which said the service would be "akin to a seventh-freedom scheduled passenger service" because of its "regularity, long duration, and without nexus to its homeland." The German carrier plans to operate the service May 7-Oct. 29 for charterer ITV Reisen AG, which DOT finds to be "bona fide charter flights" and not "individually scheduled services."
European airline traffic growth this year will be slower than in 1997, with the healthiest profits falling to antitrust-exempt global alliances and low-fare carriers, according to a new report from Salomon Smith Barney. Revenue yields will continue to decline 2% annually, mostly due to no- frills carriers and overcapacity in some routes across the Atlantic and from Europe to Asia. European traffic growth will fall to 7% this year from 10% in 1997.
FAA has let pass the March 16 deadline for appealing to the full U.S. appeals court in Washington, D.C., a ruling by a three-judge panel overturning its overflight fees, but the agency said yesterday it has 45 more days to ask the U.S. Supreme Court to review the decision (DAILY, Feb. 2). An FAA official said the agency intends to "reach a decision in the appropriate time" on whether to go to the Supreme Court.
National Air Traffic Controllers Association is offering to waive an initiation fee of up to $1,000 for controllers who join the union this month. NATCA's goal is to sign up 998 new members this year, which will add more than $1 million to its revenues. NATCA President Mike McNally said the union represents an "impressive 70%" of controllers.
Air France achieved a 27% increase in revenue in the Asia/Pacific region in 1997 despite widespread end-of-the-year economic slowdowns. Growth was 19% in November and 14% in December. In the first half of the carrier's fiscal year, April through September, capacity increased 11%, traffic 26% and revenue 29%. Last year was the first of three in which Air France plans to increase capacity in the region by a total of 40%, and the 1998 share of this is 12%. The target is to increase traffic at the same rate.
FAA has certified the 737-800, the second model of Boeing's next-generation 737 family. The 737-800, seating up to 189 passengers, is 19 feet longer than the 737-700. Launch customer Hapag-Lloyd of Germany will receive its first aircraft shortly after Joint Aviation Authorities certification, expected at monthend. Continental will be the first U.S. airline to take delivery later this year.
Northwest's pilots union says it is increasingly frustrated by the pace of contract negotiations and management's continued insistence on concessions and refusal to deal with economic issues. The Northwest Air Line Pilots Association unit Master Executive Council met last week with national ALPA officials in Washington, D.C., to discuss negotiations, and this week the union entered intense negotiations with management and the National Mediation Board scheduled to last through March 26.
U.S. National Carriers Traffic February, 2 Months 1998 (000) February February % 1998 1997 Change Air Wisconsin Revenue Passenger Miles (000) 43,089 45,168 -4.6 Available Seat Miles (000) 77,270 76,692 0.8 Load Factor (%) 55.8 58.9
Japan Airlines Chairman Susumu Yamaji stepped down yesterday after the airline revised its profit forecast downward and took a $783.8 million special loss provision. The carrier will eliminate 1,500 jobs and cut costs by 10% by 2001. JAL President Akira Kondo recommended that Yamaji's successor be Isao Kaneko, currently senior managing director and senior VP- human resources and industrial relations.
IATA Clearing House settled $29.2 billion worth of transactions for its 279 members and participants in 1997, up 4.5% from 1996. More than 83% of debts did not need cash transfers and were settled through netting. Passenger interline business increased 4.7% to $17.9 billion, representing 61.4% of throughput. Cargo interline business fell 6% to $997 million. Contracting between IATA members for maintenance, catering or ground- handling reached $8.7 billion, up 6.7%.
The Aer Lingus board will decide next month on which North American market will receive new nonstop service from Ireland and the airline has narrowed the selection to five cities, Executive VP, North America Jack Foley, said yesterday. The Irish government has mandated Aer Lingus to consider an alliance with a major international carrier, and the two decisions could be made simultaneously. The airline is "in better shape today than it has ever been," Chief Executive Gary McGann said in a speech yesterday to the International Aviation Club.
Taiwan reportedly will spend $28.1 million to build a new domestic airport at Huwei, in the island's central section, on a 40-hectare site to be acquired from the state-owned Taiwan Sugar Company.
With tentative approval from DOT for Japan service in 2000 (DAILY, March 17), Hawaiian Airlines is preparing to launch daily nonstop flights from Kahului, Maui, to Tokyo Narita using the same 304-seat DC-10 aircraft with which it serves the mainland U.S., Tahiti and American Samoa.
Saying the European Commission is too rigid in its assessment of alliances between European and U.S. airlines, German Transport Minister Matthias Wissmann yesterday withdrew his country's support for the EC's proposal to launch multilateral air transport talks with the U.S. Addressing a meeting of the Council of European Union transport ministers in Brussels, he said, "The commission imposes clearly stricter conditions on the European partners of alliances than those imposed by U.S. authorities on American carriers.
Northwest will add three flights to its Los Angeles-Tokyo Narita service beginning June 5, bringing to 10 the total of weekly nonstop Los Angeles- Tokyo flights, including a second daily nonstop on Friday, Saturday and Sunday. All flights, operated with 747-200s in a three-class configuration, will provide connections to Northwest flights to Beijing, Shanghai, Hong Kong, Manila, Bangkok, Singapore, Taipei and Seoul.
Aviation and congressional interests wanting to press DOT Deputy Assistant Secretary Patrick Murphy on details of the department's predatory policy draft, leaked Friday, will have to wait. Murphy is in Vietnam, speaking this week at a conference on U.S.-Vietnam aviation issues and taking part in next week's bilateral aviation talks in Hanoi.
Customers want service at every point of contact with their airline carrier, and understanding of their "need states," David Coltman, United senior VP-marketing told attendees at the FAA Forecast Conference last week in Washington.
TWA's board of directors has elected Colin Smith VP-international. He will have executive responsibility for TWA operations and marketing in all international markets. Smith is the former managing director of Beddows&Company, a London aviation consulting practice.
Ticket taxes should be based on miles traveled, not on the cost of the ticket, Norman Sherlock, executive director of the National Business Travel Association (NBTA), said at the FAA Forecast Conference last week in Washington. Business bears a disproportionate amount of ticket taxes because it pays the highest fares, Sherlock said, adding he was "amused by airlines complaining about the taxes....They don't pay a nickel.
Toyota Motors will cease operation of Japan Flying Service, a general aviation operator and a Toyota wholly owned subsidiary, before the end of June. JFS has recorded losses for more than seven years, a situation that was worsened by the fatal accident of an AS365 helicopter near Nagoya in January 1996. JSF will remain intact until negotiations with the families of victims are concluded.
Two disabled veterans have filed a petition at DOT charging Continental with "unlawful discrimination" against them under the Air Carrier Access Act and asking DOT to impose civil penalties against the carrier for "continued violation" of the act. They asked DOT to "institute a formal proceeding" and order Continental to board disabled passengers in a timely manner using trained personnel and necessary equipment "in a manner that does not create a spectacle of such passengers or endanger [their] safety."
Investor Carl Icahn's $43 million bid to revive bankrupt Pan Am failed to win approval from the U.S. bankruptcy court in Miami yesterday, and a new potential rescuer emerged as Icahn withdrew the offer. Turnaround specialist Milan Mandaric stepped in and is negotiating with Pan Am Chief Executive David Banmiller, and now that Icahn is out, Mandaric may be Pan Am's last chance to avoid liquidation. A deal "must" get done this week, Banmiller told The DAILY yesterday after the court hearing.
Boeing said yesterday that final assembly of the first 717 test airplane is "progressing swiftly" toward a May rollout with work well under way on two other test airplanes and the first production model, which will be delivered in mid-1999. The second of two engines has been installed on the first test airplane. BMW/Rolls-Royce built the BR715 engines.
China Airlines last week offered compensation of about $244,100 per person to the families of the 202 victims killed in the crash an A300B4-622R near Taipei International Airport in February. All 182 passengers and 14 crewmembers were killed in the accident. In addition, six persons were killed on the ground. Most of the passengers were Taiwanese.
