Travel agents who book on Reno Air will receive an 8% commission on most Airline Reporting Corp. transactions, down from 10%. Following the lead of most major U.S. carriers and several foreign airlines, Reno said it made the cuts to stay competitive. The carrier will retain a no-cap policy and will continue to pay 10% commissions on its Quick Escapes vacation packages.
Professional Airways System Specialists elected Mike Fanfalone to a three- year term, choosing him over Jack Johnson, who ran for re-election. Incumbent Tom Brantley was re-elected to a three-year term as national VP. Fanfalone, who has worked for FAA since 1975, was elected on a platform of attempting to improve working conditions for system specialists.
British tour operator Airtours has agreed in principle to buy Sun International S.A., Belgium's biggest tour operator, for about #70 million (US$113 million) from four Belgian companies that control 80% of Sun's stock. Sun has two U.K. subsidiaries, Cresta and Bridge, the latter with a dominant share of the British market for short and weekend trips. Airtours, which has expanded aggressively into foreign markets, with acquisitions in Canada and Scandinavia since 1994, is expected to issue a public bid for the remaining 20% of Sun by early 1998.
Budget airlines like AirTran and Southwest may have forced fares down, but the big carriers still have an unfair market advantage through code sharing, hub-and-spoke service, and control over frequent flyer miles and computer reservations system, speakers said Friday at the BTCC Airline Competition Summit in Washington. Morten Beyer, chief executive of Morten Beyer and Agnew Inc., said ValuJet caused fares to drop 50% and traffic to rise 35%, and it saved the traveling public about $1.5 billion.
Mesa Air Group is negotiating with United to find a "commercial resolution" and avert legal action over United's award to SkyWest of eight routes operated by Mesa unit WestAir at Los Angeles Airport. Mesa has until December to respond to a declaratory judgment action, which United filed in Chicago to determine whether awarding Mesa's routes to SkyWest is illegal.
KLM will buy a 30% share of Norwegian airline Braathens SAFE, as part of a code-share, marketing and alliance agreement signed Aug. 18. KLM, which owns stakes in Martinair, Transavia and Air UK, will purchase 9.66 million shares of Braathens stock at the agreed price of 77.5 Norwegian crowns per share. The total purchase price is 749 million crowns, 212 million Dutch guilders or US$106 million, and KLM will finance it with its own resources. With the transaction, the Braathens family's stake in the airline falls from 68.8% to 38.8%.
Some 4,000 Scandinavian tourists are being repatriated from Greece and Turkey, where they were stranded for several days because of the financial difficulties of Swedish charter company Sunways AB. Sweden's civil aviation authority withdrew Sunways' license last week because the carrier and its sister company, Express Resor, a tour operator, owe about $600,000 in taxes, according to reports from Sweden. Both companies are controlled by the Turkish group Tursem.
FedEx is objecting to Fine Air Service's bid for exemptions that would speed its relaunch of flight operations (DAILY, Oct. 2). Fine, grounded after the crash of one of its DC-8s in Miami, reached agreement with FAA on an accelerated relaunch schedule and was hoping to conduct a demonstration flight yesterday. FedEx said that unless a brief filing-and-comment period is observed, it cannot "file an informed answer" to Fine's application. Normal procedures call for a 45-day period, and FedEx asked DOT to allow at least five business days in the Fine case.
Alaska Airlines traffic for September fell 0.5% on 2.7% more capacity, which forced the load factor down 2.1 percentage points to 63.8%. The airline attributed the small decline to the "absence of extremely low fares available in certain markets during the same period last year." Traffic for the first nine months of 1997 is up 4.9% on 1.6% more capacity. Sept 97 Sept 96 9 Mths 97 9 Mths 96 RPMs 805,000,000 810,000,000 7,896,000,000 7,524,000,000
The Federal Aviation Authority of Russia (FAAR) says it plans to begin seeking bids to modernize the air traffic control system in the Russian Far East in December, a move corroborated by the European Bank for Reconstruction and Development (EBRD), which recently issued a formal notice asking companies to register their interest in the tender with FAAR. The key issue is the signing by Russian government of a letter of sovereign guarantee for the loan, valued at about 50 million European currency units (Ecus).
Kintetsu World Express, continuing its expansion in the Americas, opened offices in Guadalajara and Monterrey, Mexico. The company has more than 80 American offices.
Continental Airlines and its Continental Express pilots resumed negotiations yesterday through the National Mediation Board, which said the parties agreed to a format for continued negotiations in which NMB will set the schedule and the agenda. "We are encouraged that both sides have agreed to resume negotiations under the auspices of the new framework set by the NMB," said Continental spokeswoman Sarah Anthony.
The European Commission will seek approval from European Union transport ministers for an expanded multilateral negotiating brief with the U.S. when the ministers meet Thursday in Luxembourg. The 15 EU member states agreed earlier to let the commission negotiate on their behalf on "soft" air transport issues, such as company ownership or competition rules, but they withheld authority to address traffic rights and other "hard" issues. "Member states are still divided over the future role of the commission in this field," said a Luxembourg diplomat.
The bankruptcy of cash-starved Western Pacific Airlines, filed yesterday in Denver, was spurred by the abrupt resignation of four board members and creditor disturbances generated by the failed merger with Frontier. The former board members, who resigned Friday, represent the Hunt and Gaylord families, which own 30% of Westpac. The families were creditors as well as shareholders, agreeing earlier this year to invest $20 million in financing that gave them preference in the event of a liquidation.
U.S. Major Carriers Unit Revenues and Expenses, By Region Second Quarter 1997 Operating Operating Operating Revenues Expenses Profit/Loss Yield per ASM per ASM per ASM per RPM Carrier (cents) (cents) (cents) (cents) Alaska 9.08 8.50 0.58 11.44
Although some of the niche carriers filing for extraordinary-circumstances exemptions say slots are too expensive to buy, America West told DOT Friday they are "not available at any price from existing slot holders" at New York LaGuardia and Chicago O'Hare. The major carrier joins far smaller airlines, including AirTran, Spirit, PanAm/Carnival and Reno Air, seeking slot transfers without cost at high-density airports (DAILY, Oct. 6).
Other uses for a radio spectrum used exclusively by aviation will be on the table at the Oct. 27-Nov. 21 World Radio Conference. The spectrum has been selected as the sole radio spectrum to satisfy the requirements of the Global Navigation Satellite System (GNSS), and aviation interests warn that another use would have a detrimental impact on this band. Inmarsat among others has proposed using a portion of the band, 1559-1610 megahertz, for mobile satellite service (MSS). This band is now allocated to aeronautical radio-navigation and used by the ICAO GNSS.
Air New Zealand added a 747 cargo flight between North America and the South Pacific in conjunction with Evergreen. The service begins at New York Kennedy Airport and stops at Atlanta, Los Angeles and Honolulu en route to Auckland and Sydney.
Sabena may have to withdraw one or more of its aircraft from service temporarily to cannibalize them for spare parts following a pre-dawn fire that devastated one of its warehouses Oct. 4. Investigators have ruled out arson but have yet to determine the cause of the fire. Sabena said the incident will disrupt its supply of spare parts for the short term. The fire started at approximately 3:30 a.m. Friday night, destroying Sabena's workshop No. 22, which held a sizable inventory of fleet spare parts and engines.
Delta, acting on blanket authority granted by DOT earlier this year, told the department it will expand the city-pair routes served under its code- share operations with Swissair. Starting Oct. 26, Delta plans to begin displaying Swissair's designator code on Delta flights between Atlanta and Seattle, San Francisco, San Diego, Nashville, Memphis, Tallahassee, Phoenix and Portland, Ore.; Las Vegas and Phoenix, Cincinnati and Los Angeles; and Salt Lake City and Chicago.
Federal Express and Caliber System jointly announced yesterday that FDX Corp., a new holding company, will acquire Caliber System and its subsidiaries, including package carrier RPS Inc. Caliber shareholders will receive 0.8 shares of FDX stock per Caliber share, and FDX will become a $15 billion transportation and logistics company with two independent networks serving the express and non-express markets through five business units.
Delta's frequent flyer participants flew 1.7 million free roundtrips in fiscal 1997, the same as in 1996.But with Delta's traffic growth, the free travel as a percentage of total revenue passenger miles dropped to 6% from 8%. In fiscal 1995, Delta flew two million free trips.
