Northwest yesterday posted a 14.3% surge in third quarter net profits as strong domestic pricing produced record passenger and total revenues, overcoming continued weakness in Pacific markets. Net earnings rose to $290.3 million from $253.9 million a year earlier, and revenues increased 2.4% to a record $2.8 billion. The carrier reported an operating margin of 18%, up from 17.2% in the year-earlier period. Passenger revenue increased 1.2% to $2.45 billion, also a record.
UPS and its pilots union will meet Nov. 3 with the National Mediation Board in preparation for resuming negotiations in 1998. Member Magdelana Jacobson will meet with UPS that afternoon. The Independent Pilots Association is scheduled to meet with Jacobson in the morning but has asked to meet with all three board members. IPA rejected management's latest contract offer Oct. 1 and has wanted to go back to the bargaining table this year. UPS spokesman Ken Shapiro said the negotiation schedule was fixed by NMB, which postponed talks until January.
Arriva Air International asked DOT to dismiss without prejudice its applications for two certificates for interstate and foreign all-cargo charter service. DOT granted tentative approval earlier, but questions persisted about foreign ownership and control and the department raised concerns about adequate funding as a result of the carrier's startup delay (DAILY, Aug. 5). (Dockets OST-96-1334, 97-2184)
Boeing and Executive Jet officials yesterday announced in New York a joint venture to market fractional interests in Boeing Business Jets (BBJ) products (DAILY, Oct. 21). The aircraft is a business version of the new- generation 737-700, which BBJ President Borge Boeskov said is selling two to three times as fast as anticipated. He said Boeing's assembly line could produce two to three aircraft a month. When BBJ was formed last year with General Electric, "we said we can sell 10 a year. Well, the sales rate has been more like three times that," he said.
Boeing 747 Systemwide Aircraft Utilization Per Day Second Quarter 1997 B747-100 TWA United Total Number of Aircraft Operated 5 13 18 Total Fleet Operations Departures 6 24 30
General Aviation Action Plan Coalition urged Senate Commerce Committee Chairman John McCain (R-Ariz.) to act quickly on the nomination of George Donohue to be deputy administrator of FAA. It is unlikely that Donohue can be confirmed before January, however. James Coyne, chairman of the National Air Transportation Association, writing on behalf of the coalition, said it "looks at Administrator [Jane] Garvey with high optimism, but of concern to the general aviation community is the vacant permanent post that remains at deputy administrator."
The U.S. Court of Appeals for the District of Columbia Circuit ruled last week that only certain challenged provisions of the DOT/FAA airport rates and charges policy - not the policy as a whole - are null and void and must be reconsidered by the department. DOT and FAA had sought clarification of the court's Aug. 1 ruling that the department's decision to allow airport operators to use any reasonable methodology in setting non-airfield aeronautical fees is arbitrary and capricious (DAILY, Aug. 4).
The KLM-Northwest agreement to extend their alliance 10 years might actually last 13 years, because even at the 10-year mark, each carrier is required to give the other three years' notice before the relationship could end. Northwest approaches the agreement as a "13-year deal," according to Chief Financial Officer Jim Lawrence.
Geneva Airport is expected to duplicate next year the emissions-based aircraft tax that took effect last month at Zurich Airport. Basel could join the eco-tax bandwagon as well if approval is granted by France, which splits control of the airport with Swiss authorities. On Sept. 1, Zurich became the world's first airport to impose an emissions-based pollution tax on aircraft landing at it. Seeking to reduce nitrogen oxide (NOx) emissions, Zurich applies the green tax to five categories of aircraft.
American is offering electronic upgrades, beginning Nov. 5. When an AAdvantage member buys or earns upgrades, they will be deposited automatically into the member's electronic upgrade account and will be withdrawn when they are used. Platinum and gold AAdvantage members who travel ticketless will be able to bypass the check-in counter and proceed directly to the gate.
Tower Air said it is leasing out seven 747s to two foreign carriers on a short-term basis. Three will go to a major Asian airline for two months each year over the next three years for the annual Hadj pilgrimage. The other lease is to a Middle East carrier for nine months. Morris Nachtomi, chief executive, said Tower is in a position to lease during the winter season when aircraft use is at its lowest. The two carriers are not being identified for competitive reasons, Tower said.
Italian airport management company SEA-Aeroporti di Milano obtained the second tranche of a 400 billion lire (US$330 million) European Investment Bank loan to finance the Malpensa 2000 project, part of the company's 2 trillion lire program to centralize airline operations at Malpensa. The company is expected to transfer all international and some domestic traffic from Milan Linate Airport to Malpensa in October 1998. Following the transfer, Malpensa will handle about 80% of Milan's passenger traffic and 90% of its freight traffic.
FedEx, replying to Saudi Arabian Airlines' request for a detailed explanation of its contract with Falcon Express for all-cargo service to Saudi Arabia, told DOT the service does not constitute a code share, as neither carrier holds out service under the other's designator code. The FedEx-Falcon deal "provides for the guarantee of certain stated minimum amounts of cargo capacity" for FedEx traffic, and cargo capacity above the minimum "is not reserved for the exclusive use of Federal Express."
-- US Airways is offering lowered fares on travel between most eastern U.S. markets and South Florida and the Caribbean. Sample roundtrip fares include $178 from Hartford to West Palm Beach, $198 from New York to Sarasota, and $398 from Philadelphia to St. Maarten. Travel must be completed by Feb. 5, 1998. Fares require a 14-day advance purchase and a Saturday night stay, with a three-night minimum stay for Caribbean travel. Sale fares to Florida are available on travel from Tuesday through Thursday, and for Caribbean travel from Monday through Thursday.
America West Express, a division of Mesa Air Group, is adding nonstop service between Phoenix and Aspen, beginning Dec. 17. The airline will fly three daily trips from Phoenix to Aspen and two from Aspen to Phoenix. Passengers flying to or from Aspen and connecting through Phoenix will receive boarding passes and seat assignments to their final destination. Members of America West's Flight Fund frequent flyer program can earn 500 miles on each America West Express flight.
Delta and Finnair applied to DOT for authority to expand their code-share, blocked-space operations for two years, beginning Oct. 26, to include Delta flights between New York and Washington, D.C., Chicago, Atlanta and Miami, and Finnair flights linking Helsinki with Zurich and Frankfurt. Finnair applied separately for an exemption to provide scheduled and charter combination service behind and from Finland to the U.S. and beyond via intermediate points, authorized under the U.S.-Finland open-skies pact.
British Midland will add Dresden to its European destinations, starting Oct. 27, serving the German city daily from London Heathrow via Cologne/Bonn. The service supplements code-share partner Lufthansa's flight from London via Munich to Dresden and is British Midland's sixth new European destination this year. British Midland said it is continuing discussions with Lufthansa about how to develop the relationship.
Frontier Airlines has joined with Visitors Services International to handle overflow calls to the carrier's toll-free number, book domestic and international hotel reservations and provide travel and tour packages. VSI, a subsidiary of TeleServices International Group, Inc., also will offer hotel and tour package discounts.
The Indian government has appointed a committee, mainly comprising government technicians and aviation industry experts, to seek suggestions for the financial restructuring of national carrier Air-India. Headed by economist and former petroleum secretary Vijay Kelkar, the committee is scheduled to report in February with what is expected to be a comprehensive package of reforms to enable the airline to fund its expansion plans and incorporate a productivity-oriented work culture in its daily operations.
FAA will sponsor a forum Nov. 20 to discuss aviation-related environmental issues. FAA's Office of Environment and Energy is developing a research agenda, Environmental Research Beyond 2000, to identify and address environmental issues related to the industry, including but not limited to noise and emissions. The office will present its preliminary research agenda at the meeting - from 9:30 a.m. until noon in Room 3246B at DOT - where it also hopes to obtain information from the public.
Kaman Corp. reported third quarter net earnings of $7.1 million, up 22%, and revenues of $270 million, up 18%. Year-to-date, net earnings declined to $9.4 million from $16.4 million, while revenues climbed 8% to $772.4 million.
Four opponents of the American-Iberia code share proposal are asking DOT for a variety of actions, including dismissal, an oral evidentiary hearing and consolidation with the American-TACA code-share proceeding. Continental, TWA, United and Delta said American already dominates Latin America and further consolidation of marketing arrangements would create monopolistic conditions.
AAR Corp. said it was contracted by Boeing Commercial as its Amsterdam service provider. AAR will warehouse Boeing-owned airframe parts for 737- 700s, provide limited inspection and repair service and a spares exchange.
