Salomon Smith Barney analyst Julius Maldutis has raised first quarter earnings estimates on four airlines, citing strong passenger yields, lower fuel prices and the continued strength in demand for air travel. Veteran analyst Maldutis boosted estimates for American, America West, Continental and Northwest, saying the strength of the industry outweighs effects from last year's ticket tax lapse. The firm's first quarter fuel estimates forecast an average price of 57 cents per gallon, 23% lower than last year's average of 74 cents.
Jonathan Ornstein was named the new chief executive for Mesa Air Group yesterday, ending months of speculation about who would succeed founding CEO Larry Risley when he retires at the end of April. Simultaneously, Ornstein was elevated from CEO to chairman of Brussels-based Virgin Express Holdings and CFO Jim Swigart, who is vice chairman of Mesa, was named president and CEO. Both Ornstein and Swigart are principals of Barlow Partners, which recently acquired a 5.3% stake in Mesa and also owns a 6.6% stake in US Airways Express CCAIR.
Servicio Aereo A Territorios Nacionales, or Satena, of Colombia has taken delivery of its fourth and fifth Dornier 328s, with the sixth scheduled for delivery in June, Fairchild Dornier said. Satena has been operating three 328s since December 1996 as the first part of a fleet modernization program begun in 1995. Satena's 32-seat Do 328s replace HS 748 turboprops and Casa 212s as well as Fokker F28 jets, the manufacturer said.
India's state-owned aircraft maker Hindustan Aeronautics Ltd. which so far has restricted itself to designing and manufacturing defense-related aircraft, has decided to diversify into the civilian sector, HAL officials said. The company's first such foray would involve the production of a 50- seat turboprop aircraft, and HAL is currently seeking foreign-based partners for this proposed project, they added.
Bombardier Aerospace continued its record-setting sales pace in early 1998 orders, recording orders for 25 CRJs and 13 Dash 8s in February and March. In jet sales, Tyrolean of Austria bought two; Brit Air of France exercised one option; Adria of Slovenia ordered one, its third; Air Littoral of France ordered five additional, and Maersk Air (U.K.) two. Atlantic Coast of the U.S. exercised five options; Air Nostrum of Spain ordered five; and Lufthansa CityLine took five more, plus five options.
KLM's Transport Workers Union members have voted to accept the airline's terms governing the transition of responsibility for airport and ground operations at New York Kennedy and Houston Bush to KLM partner Northwest. The move will take effect April 26. The two airports were the only locations in the U.S. where KLM still conducted its own union-run ground operations. Last year, as part of a 10-year agreement between Northwest and KLM, each carrier agreed to manage the ground operations of the other on its own continent.
DOT issued an order prohibiting Mesa from suspending service, operated as United Express, to Chico, Modesto and Santa Rosa, Calif., which it serves from San Francisco; Inyokern and Visalia, Calif., from Los Angeles, and Gunnison and Montrose/Delta, Colo., and Cheyenne and Sheridan, Wyo., from Denver, until June 17 and 18.
Remarks by Sen. Slade Gorton (R-Wash.) on passenger facility charges, aviation/highway spending and airline competition issues presented at this week's AAAE/ACI-NA Washington conference will be featured on Aviation News Today, to be aired Sunday on Washington's NewsChannel 8 at 12:30 a.m. and at 1:30 p.m.
New Turkish carrier Park Express, as expected, has placed an order with AI(R) for five Avro RJ100 jets, AI(R) announced (DAILY, March 26). Value of the transaction was placed at approximately $130 million.
The House voted late Wednesday to expand the Visa Waiver Program and extend it two years. The expansion, in an amendment approved 360-46, allows Greece and Portugal into the program and increases the refusal rate criterion for program entry from 2% to 3%. Passage of the two-year extension bill was unanimous. "The main thing for us was trying to move things forward and open the program a bit, and we have moved a step forward on that," said Mike Slackman, spokesman for Rep.
Legend Airlines, applying for a scheduled combination service certificate, told DOT it wants to serve "several major business destinations" nonstop from Dallas Love Field, including East and West Coast markets "such as Boston and Seattle." The carrier plans to begin operations with six leased DC-9-32 aircraft configured for 56 passenger seats, consistent with Wright Amendment requirements for service to any destination, beginning in early fall 1998, and to add six DC-9-32s beginning in early 1999.
United is putting most international destinations on sale for travel from April 13 through June 11. Sample roundtrip fares include Chicago-Frankfurt for $383, Newark-London for $299, Denver-Hong Kong for $600 and New York- Caracas for $406. The last day for ticketing is April 8.
American Express denies charges made by some airline industry analysts that the American Express Travel Index reflects artificially high business fares because most of its clients, mainly Fortune 500 companies, pay the highest walk-up fares (DAILY, March 23). Bob Harrell, of New York-based Harrell Associates, an air fare consultant to AMEX, said the index uses a representative sample of national business travel and "very few Fortune 500 companies use walk-up rates because they use corporate accounts....American Express stands by its data.
Mesa Air Group Chief Executive Jonathan Ornstein likens his new assignment to the revamp his former boss, Gordon Bethune, undertook at Continental."There are a lot of similarities with Continental - Mesa needs better on- time performance, better completion rates and higher passenger service levels," he said. "While Mesa is fixable, it's not going to be easy." (See story in Regional Aviation, following Page 512.)
U.S.-Vietnam bilateral aviation talks yielded little progress last week in Hanoi. The two sides issued a Memorandum of Consultation noting they had exchanged views and would meet again at an unspecified time. DOT's lead negotiator, deputy assistant secretary Patrick Murphy, who served in Vietnam during the war, became ill during the talks but is recovering after returning to the U.S., sources said.
Taiwan narrowly avoided yet another air disaster when a passenger aboard a domestic China Airlines Dash 8 flight was prevented from committing suicide by immolation on March 23. A passenger aboard the Great China Dash-8-300 on a flight from Taipei to Taichung pulled two soda bottles containing gasoline from his carry-on baggage, poured the fuel into the aisle of the plane and set it afire.
China Xinjiang Airlines of Urumqi, China, took delivery of the 200th ATR 72 in the program, the third of five ATR 72-210As the carrier ordered last year, Aero International (Regional) reported. The first model 72 was delivered to Finnair in 1989, the marketing consortium said. AI(R) said 221 72s have been ordered since the production launch in 1986.
FAA has not moved fast enough to improve airport safety, Air Line Pilots Association President Randolph Babbitt told the House Transportation Committee aviation subcommittee this week. Babbitt said ALPA is "concerned that there has been no apparent movement by the FAA on several congressional directives to enhance airport safety...." He cited in particular the establishment of vertical visual guidance systems on runways, and the provision of adequate safety areas beyond the ends of runways at certificated airports.
Jonathan Ornstein's move to Mesa Air Group as CEO adds to the speculation that there could be a future merger with CCAIR. Ornstein's Barlow Partners owns 6.6% of CCAIR and recently acquired a 5.3% stake in Mesa. CCAIR and Mesa are the only two publicly held US Airways Express carriers. Mesa currently serves the entire East Coast on behalf of US Airways with the exception of a wide area around the Charlotte hub controlled by CCAIR.
Passenger Travel To/From Major U.S. Regions Northeast Region Year Ended Third Quarter 1997 O&D Average Average Average Passengers Fare Yield Trip Length (Cents) Miles Total Northeast 144,363,570 $169.41 15.48 1,094 Within Northeast 31,043,150 $126.29 47.70 265
Continental is launching "Work Hard. Fly Right," an advertising campaign that will debut in 27 countries across three continents. The N.W. Ayer&Partners campaign, intended to build brand awareness and reflect the carrier's success, will comprise print and outdoor ads and television and radio spots.
Aviation Group has formed a fourth operating division - Component Overhaul&Service - and acquired Aero Design, a manufacturer of aircraft batteries, as part of the division. Battery Shop, a sister company, also was included in the sale. Rick Congdon, former division manager for Aviall, will head the new division.
Passenger Travel To/From Major U.S. Regions Southeast Region Year Ended Third Quarter 1997 O&D Average Averag Average Passengers Fare Yield Trip Length (Cents) Miles Total Southeast 146,089,860 $141.33 14.79 956 Within Southeast 37,218,860 $117.11 25.07 467
A recent wave of orders for Embraer ERJ145 jets has prompted FlightSafety International to order two more ERJ145 full-flight simulators, with delivery scheduled approximately six months apart in 1999. FlightSafety's Simulation Systems Division will manufacture the two Level "D" simulators in Tulsa. FlightSafety has two Level D 145 simulators in service at Tulsa and Houston, being used by Continental Express and American. FlightSafety said European airlines such as Luxair will start ERJ145 training soon.
Formosa Airlines, which lost a Saab 340 in a sea crash off Northern Taiwan March 18, has had seven Dornier 228 "hull losses" since mid-1990. Three were fatal, claiming 28 lives. Six were in the initial approach to the landing phase of flight, and the seventh lost control during taxiing and "ran into a ditch" with six passenger fatalities. In the most recent accident, last October, the aircraft abandoned the approach in high winds and rain and struck treetops and a water tower before crashing and exploding, killing all 16 aboard.
