Alaska Air Group reported a record 1997 net profit of $72.4 million, nearly double the $38 million earned in 1996. The company, which includes the Horizon Air regional, benefited from falling jet fuel prices and rising yield and unit revenues. Operating revenues increased 9.2% to $1.74 billion while expenses rose 6.5% to $1.6 billion. Except for employee expenses, Alaska kept costs in check. Wages and benefits increased 11.5% to $531.7 million as the company hired nearly 600 workers, finishing the year with 8,236.
Pan Am is promoting a $99 roundtrip fare targeted to business passengers on the heavily traveled Boston-New York corridor. The fare, to or from New York Kennedy, applies to travelers who depart on the airline's first morning flight in either direction and return the same day on the evening flight. The carrier also debuted an $89 weekend roundtrip fare and priced the one-way, one-day advance purchase fare in the market at $79.
Despite losing most of their United routes to SkyWest, pilots at WestAir, a subsidiary of Mesa Air Group, still want to purchase stock and spin WestAir off as a separate company, said a source who asked not to be identified. As of June 1, WestAir will lose about 40 of the West Coast routes it has been flying under a code share with United. United awarded the routes to SkyWest, the source said. WestAir will continue flying six routes for United from Los Angeles Airport. If Mesa agrees, pilots want to purchase a 20% stake in WestAir.
Aerolineas Argentinas has increased capacity 30% on the New York-Buenos Aires and Miami-Buenos Aires routes by replacing some A310 service with 747s, with plans to use only 747s eventually. During the first eight months of 1997, sales rose 30% on New York-Miami service.
The National Aerospace System (NAS) program is 18 months behind schedule and $3.4 million over budget, the Air Force Electronic Systems Center reported to Congress late last year. Unlike the National Airspace System, also NAS in FAA parlance, the NAS in the Air Force report is an interagency program that includes the Digital Airport Surveillance Radar (DASR), the Enhanced Terminal Voice Switch (ETVS), the Standard Terminal Automation Replacement System (STARS) and the Military Airspace Management System (MAMS).
National Transportation Safety Board said it is concerned that the loss of all primary flight information during an upset can critically affect the ability of pilots to recover Airbus A300 aircraft. The board cited a May 12, 1997, incident in which an American A300 experienced an inflight upset at 16,000 feet, seriously injuring one passenger. The captain reported that the electronic flight instrument system (EFIS) displays were lost for two to three seconds, the board said.
Northwest and KLM asked DOT for more time to reply to American's petition for a proceeding on renewing their antitrust immunity (DAILY, Jan. 21). DOT rules ordinarily would give Northwest-KLM seven business days to respond, but the carriers want until Feb. 10. American was polled and does not object, nor does TWA, which Northwest/KLM said also has told DOT it is interested in a proceeding. (Docket OST-98-3341)
Senate Commerce Committee Chairman John McCain (R-Ariz.) has tentatively scheduled two hearings, the first, March 11, on the National Civil Aviation Review Commission. A March 26 hearing will review McCain's Aviation Competition Enhancement Act. Both will be held before the full committee.
Air Transport Association said its members' December 1997 passenger traffic was up 1.9% from the same month the previous year to 45.9 billion revenue passenger miles. International traffic grew 4.1% to 11.7 billion RPMs, and domestic rose 1.1% to 34.2 billion RPMs. ATA President Carol Hallett said the December gain was not "too impressive" but she noted growth for the year was 4.7%. Every month in 1997 showed passenger traffic growth, "making it a successful year."
AirTran Airlines' cadre of stock clerks voted 10-2 yesterday to be represented by the Teamsters union. The Teamsters also represent the airline's aircraft mechanics, who voted to join the union last year.
Incumbent U.S. carriers will have virtually unlimited beyond rights in the new Japanese aviation agreement, sources said, locking in freedoms they believed they had in the current pact but were fearful of losing in the new one. Contrary to earlier betting, it also appears that Northwest and Continental will be allowed to code-share into Japan, and though limits probably will be included, the right could be a powerful benefit given the two carriers' decision to form a code-share and marketing alliance (DAILY, Jan. 27).
American applied at DOT for a two-year exemption renewal of its blocked- space/code-sharing arrangement with Qantas for scheduled foreign all-cargo service linking New York, Chicago, Los Angeles and Honolulu with Nadi, Fiji, and Sydney and Melbourne, Australia.
Britannia Airways submitted an amendment at DOT to its application for an exemption to conduct passenger charters between a point or points in Germany and a point or points in the U.S. to include authority to engage in other foreign charters. Pending at DOT is a request by the German startup for a foreign air carrier permit to conduct charter foreign passenger service "without limitation" between a point or points in Germany and a point or points in the U.S. or in third countries. (Dockets OST-97-3274, 3279)
Midwest Express Holdings' net earnings in the fourth quarter swelled 90.4% to $7.5 million, helping the airline post a net profit for 1997 of $24.9 million, up 14.7%. Fourth quarter revenue increased 18% to $91.9 million, while operating income grew 95% to $11.7 million. The results include subsidiary Astral Aviation, which operates regional feeder Skyway Airlines. Chairman Timothy Hoeksema cited lower fuel prices, reduced travel agent commissions and other revenue programs for the strong yearend finish.
DOT Secretary Slater said this week the results of a Haiti airport survey show Port Au Prince Airport does not meet International Civil Aviation Organization security standards, and he required carriers issuing tickets for travel there from the U.S. to notify passengers of the finding. Slater credited Haitian authorities with working on the problem.
American outlined its objections to a DOT show-cause order to establish temporary service mail rates for January-June 1998 at lower transatlantic and transpacific rates than those in effect for the second half of 1997, and proposed reviewing the methodology for establishing international service mail rates. The carrier's concern "stems from a lack of confidence," specifically in the rates for the Atlantic region and more generally about the methodology used to construct the rates.
American asked DOT to issue a policy statement to establish indefinite duration for certain authorities, reducing "unnecessary burdens on carriers and on the department" for preparing and processing "routine renewal applications that in almost all cases are unopposed yet require a constant stream" of documents.
Boeing rolled out the 3,000th 737 "classic" Sunday night from its Renton facility. The first 737 rolled out Jan. 16, 1967, and more than 280 airlines in more than 100 countries fly the aircraft.
Boeing Chairman Phil Condit said yesterday the company lost $178 million in 1997 on record sales of $45.8 billion. Condit attributed the loss, Boeing's first in 50 years, to a pretax charge of $1.4 billion related to the Douglas aircraft line and production inefficiencies on other commercial aircraft. The previous year, sales totaled $35.5 billion and net earnings $1.8 billion. Condit said, "Our financial performance over the past six months has not been good," but he predicted 1998 "will be a year of improved performance."
Korean Air Lines has launched cargo service to Ho Chi Minh City, Vietnam. The carrier has been using belly space of aircraft but experienced increasing demand. It flies a dedicated weekly A300 freighter.
Western Pacific Airlines lost more than $8.4 million in December on operating revenues of $16.6 million, according to a profit and loss statement obtained by The DAILY. The large loss came after the airline paid off several longstanding debts in its bankruptcy negotiations. Expenses included $4.9 million in aircraft leases, $3.6 million in airport fees and other rentals and $3.6 million in aircraft fuel and oil expenses. Employee expenses totaled $2.8 million, and the carrier spent more than $1 million on advertising and public relations.
DOT approved a one-year renewal of authority for American and Canadian Airlines International (CAI) and their respective regional affiliates to offer reciprocal U.S.-Canada code-share services. Under a 1996 amendment to the authority, American's code may be displayed on all transborder flights operated by CAI and its affiliates and CAI's code may be displayed on all transborder flights operated by American and its affiliates, without the need to seek further authority on a route-by-route basis.
Virgin Atlantic will add a second daily flight from London Gatwick to Orlando starting July 7, citing "outstanding success" of the existing route and customer demand. The second flight departs Orlando at 8:40 p.m., versus the 7:10 p.m. of the existing service. The new flight, using a 747, increases Virgin's U.K.-Florida weekly frequencies to 27. The airline has served the route since 1991.
There is little in Mary Schiavo's book Flying Blind, Flying Safe that "can be supported," according to a 21-page review by Darryl Jenkins of the Aviation Foundation and the International Institute For Tourism Studies and by Edmund Pinto, publisher of McGraw-Hill's Aviation Week Newsletters. Schiavo is a controversial former DOT inspector general who wrote about her experiences involving aviation safety after leaving the department. Accounts in the book are "for the most part anecdotal" and there is "no supporting evidence," the review says.
DOT is seeking more information from startup carrier WestJet Express, including financial data and fuller details on its proposed personnel. The department also noted that WestJet Express's name is similar to WestJet Airlines Ltd., a Canadian carrier, and that DOT regulations require the startup to notify the Canadian WestJet of its intentions.
