Midwest Express Holdings, parent of Midwest Express Airlines and Skyway Airlines, yesterday reported record revenue, capacity and traffic - but a lower net profit - for the third quarter. Revenue increased 7.6% to $89.4 million from $83.1 million a year earlier, but consolidated net income was down 10% to $7.6 million. Chairman and Chief Executive Timothy Hoeksema noted that this year's third quarter result is the company's second-best ever, and that last year's record-setter was buoyed by the interruption of the federal ticket tax.
TWA and Air Europa signed a marketing agreement that will lead to code- share service as early as the first quarter of 1998 on Air Europa flights from Madrid and Barcelona to Palma and Malaga and TWA's Madrid-New York Kennedy and Barcelona-New York flights, plus TWA service beyond JFK to several U.S. cities. Air Europa will relocate its JFK operations to TWA's Terminal 5, and TWA will provide ground-handling.
House Transportation aviation subcommittee yesterday approved H.R.2476, requiring foreign carriers operating to the U.S. to file family assistance plans for aviation disasters, and H.R.2626, revising last year's Pilot Records Improvement Act. The bills are expected to go to the full panel for markup next week.
Mesa Air Group is putting its money where its mouth is. The United Express carrier has warned for some time that its services at Denver were unprofitable due to high airport costs, low pro-rates from United and new FAA regulations. Little surprise that the carrier will drop Denver-Fort Collins service Oct. 31 - it will be replaced by a bus. Eight other markets could, by yearend, be suspended, including North Platte and Scottsbluff, Neb.; Cody, Laramie, Rock Springs and Worland, Wyo., Pueblo and Alamosa, Colo. (DAILY, Oct.
Members of the European Regions Airline Association have passed resolutions calling for independent Eurocontrol Performance Review Commissioners and for action on future navigation and communications requirements. Meeting in Baveno, Italy, for its 1997 General Assembly, ERA members approved a resolution urging European Union states to ensure that Eurocontrol Performance Review Commissioners are independent and have no employment or remuneration benefits from either state authorities or users of the common air traffic control system.
America West reported a net profit of $17.9 million in the third quarter, a turnaround from its $45.7 million loss a year earlier. Operating revenue increased 9.4% to $462.1 million as passenger revenue rose 9% and cargo revenue 21.8%. Last year's results included a $65 million pre-tax charge that if excluded, still would have resulted in more than a 200% gain in operating income this year. Yield gained 3.2% to 10.3 cents, and the carrier remained the lowest-cost hub-and-spoke carrier in the U.S.
Virgin Express will institute an initial stock offering next month with the goal of raising about $100 million. The Belgian 737 airline plans to list more than two million shares on Brussels markets and the Nasdaq exchange in New York. Merrill Lynch will lead the offering. The airline has ordered three 737-300s for delivery next year, and it intends to use the proceeds of the offering for new aircraft acquisitions, systems and general development.
Air France will "float a limited fraction of its capital by mid-1998," according to the mission statement assigned by the French government to the airline's new chairman, Jean-Cyril Spinetta. The document, leaked to the French press, fails to specify how much of the flag carrier's capital will effectively be offered to private investors. The partial privatization has two goals - living up to the 1994 labor agreement in which employees accepted a wage cut in exchange for shares, and making way for alliances with foreign airlines.
Japan Airlines, All Nippon Airways and Japan Air System, freed by deregulation, are suspending service in low-profit and money-losing domestic markets. JAL is dropping daily roundtrips between Obihiro and Fukuoka and twice-weekly roundtrips between Obihiro and Sendai, effective this month. In December, ANA will suspend daily roundtrips in five markets - Sapporo-Shonai, Kushiro-Fukuoka, Akita-Fukuoka, Sendai-Matsuyama and Shonai-Kansai.
Bombardier Regional Aircraft will deliver its 200th Canadair Regional Jet Friday to Lufthansa CityLine, launch customer for the aircraft in November 1992. It will be the German regional's 31st CRJ, with one aircraft still to be delivered. The CRJ order book stands at 486 orders, options and deliveries with a firm backlog of 100 aircraft. Firm orders stand at 298, including 29 of the new 70-passenger CRJ-700s - 103 since January alone. Bombardier plans to increase production early next year from five to six units per month, building 68 in 1998 and 72 in 1999.
Belgium's stock exchange watchdog, the Commission Bancaire, suspended trading in the newly launched subscription of CityBird S.A. shares until the company adds to its prospectus information that is "liable to influence the company's commercial prospects." CityBird President Victor Hasson said the commission's decision concerns "positive news that will reassure potential investors" in the low-cost, long-haul carrier.
Southwest's third quarter net profits jumped 52% to $92.5 million from $60.9 million as yields increased and expenses decreased. Passenger yield surged 7.5% to 12.55 cents while cost per available seat mile fell 2.1% to 7.36 cents, mainly because of lower jet fuel, engine repair and advertising costs and the results of several cost reduction programs. Revenue per available seat mile rose 2% to 8.68 cents. Revenue reached $997.2 million, up 11.9%.
Sen. Rick Santorum (R-Pa.) has appealed to the Justice Department and the FBI on behalf of beleaguered TPI International Airways. The small Brunswick, Ga.-based cargo carrier was shut down by FAA in August 1990 following a sequence of events that included the loss of an Air Force contract and repeated acts of alleged sabotage to its aircraft while based at Tinker Air Force Base, Okla.
Atlantic Coast Airlines' cost per available seat mile "trended favorably despite the additional passenger-related costs associated with the higher load factors" during the third quarter, according to ACA Chief Financial Officer Paul Tate. The load factor surged 5.3 percentage points to 53.9% during the quarter, and passenger volume increased 19.9% to more than 476,000. Traffic rose 22.5% and capacity 10.4%. The carrier logged year-over-year increases of 18% in operating income and 10.3% in pre-tax profit, but net profit fell 32% (DAILY, Oct. 23).
Computer-savvy travelers can qualify for a future $99 companion ticket on Northwest when they purchase a regular roundtrip electronic ticket worth at least $200 by Oct. 30 at Travelocity's web site, http://www. travelocity.com. Travel must be completed by Feb. 28. A Saturday night stay and a 14-day advance purchase are required. The companion ticket may be redeemed after the original travel is completed and must be purchased at the same time as an additional Northwest roundtrip adult ticket through the Travelocity site.
Delta yesterday reported its best September quarter results ever, with net income of $254 million, up 6.7%, and an operating margin of 12.1%. Operating profits dropped slightly to $431 million as revenue grew 3.5% to $3.6 billion and expenses increased 4% to $3.12 billion. New Chief Executive Leo Mullin attributed the strong quarter to "continued strength in the economy, strong business demand, improvements in transatlantic performance and continued cost containment." Revenue per available seat mile was flat at 9.95 cents while cost per ASM rose 1.5% to 8.75 cents.
Mesa Airlines' new service from Fort Worth Meacham Field to Houston and San Antonio with the Bombardier Regional Jet has increased the carrier's load factors and is now leading to new markets within Texas and elsewhere. The Farmington, N.M.-based regional began the service in May with 11 daily frequencies between Meacham and Houston Hobby Airport, initially carrying very light passenger loads. In September, it reduced the Houston frequency to six, but added six flights to San Antonio, and since then, the load factors have increased substantially.
FAA issued an emergency airworthiness directive in the Oct. 21 Federal Register on Fokker F28-100 aircraft, prohibiting "use of reverse engine thrust power settings between idle and emergency maximum." FAA, which first notified operators Sept. 12, said the action was prompted by a report of an engine fan blade failure in preparation for takeoff, followed by an engine fire. "The actions specified by this AD are intended to prevent uncontained engine fan blade failure due to high-cycle fatigue cracking, which could result in loss of thrust," the agency said.
Average load factor for 15 regional airlines was 53.96% in September, up nearly four percentage points from the same month a year ago. The result was well below August's 59.01% for the same airlines, reflecting the seasonal drop-off in traffic. United Express Air Wisconsin led the group in September, at 63.96%, up more than five points year-over-year. Only two others came in at more than 60% - Horizon Air at 61.79%, up nearly five points, and Delta Connection Comair at 60.05%, an increase of 5.6 points. In August, seven of the 15 carriers topped the 60% mark.
Barring an eleventh-hour miracle, negotiators will not reach agreement by today on a new U.S.-Japan bilateral, sources said. Progress on code- sharing is real, they said, but the two sides have stalled on issues including Tokyo slots and "safety-net" provisions (DAILY, Oct. 22). Negotiators are considering whether to extend the Washington talks or reconvene in Tokyo.
United, Northwest and other airline stocks were hit by the Hong Kong market crisis yesterday. Northwest lost 6% of its value, falling $2.94 to $46.125, and United's stock dropped $4.56 to $95 per share, losing 4.6%.
National Air Transportation Association said it applauds legislative language in the DOT appropriations bill pushing FAA promptly to supply pilot records requested by employers. Under the Pilot Records Improvement Act (PRIA), employers are required to obtain records on all new pilots, including records maintained by FAA. But "delays encountered in obtaining FAA records are a major impediment to the ability of the industry to comply with the law," NATA said.
Mahalo Air, the Hawaiian low-fare interisland carrier that entered Chapter 11 in July, could fly again if an investor steps forward with $1.5 million. The airline has until Nov. 10 to sell its operating certificate or be liquidated by order of a bankruptcy court judge. Principal investor Robert Iwamoto talked with a potential investor this week and has promised to match an investor's $1.5 million with his own money to keep the airline going. Iwamoto told a Hawaiian newspaper this week he believes Hawaii needs a local carrier that can provide affordable fares.
