Boeing's 737-700 beat out the MD-90, a competing product before Boeing took over McDonnell Douglas, to become the replacement for the U.S. Navy's aging C-9 transport. Boeing received a $111 million contract for an initial two aircraft, both scheduled for delivery by December 2001. The 737-700 is in development as part of Boeing's new-generation 737 upgrade, with an initial delivery to launch customer Southwest scheduled in December, and the only modification to the commercial aircraft expected for the Navy is a larger cargo door.
Sabena's maintenance division, Sabena Technics, has signed a three-year contract with Sudan Airways for the full maintenance and repair of the carrier's two A310-200 and A300-600 aircraft. The "full support" contract is worth $12 million. Sabena said it will carry out the bulk of the work by sending a dedicated team of technicians to work at Sudan Airways' home base in Khartoum but mange parts supplies and repairs from Brussels. The contract also covers training of host country maintenance personnel.
The top negotiators in U.S.-Japan talks met informally yesterday, sources said, attempting to break what appears to be a deadlock. The parties adjourned formal talks last week as scheduled (DAILY, Sept. 2), and Alan Larson, assistant secretary of state for economic and business affairs, and Jiro Hanyu, deputy director general in Japan's transport ministry, discussed pending issues yesterday at an unknown location, according to sources. The DAILY was unable to reach Larson for comment, and the Japanese embassy did not respond to calls.
DOT has disclaimed jurisdiction over the proposed reincorporation of Southern Air Transport, converting it from a Florida corporation established in 1949 to a Nevada corporation under the ownership of SAT Group, newly formed to hold 100% of Southern's stock. The department found Southern managerially and financially fit and in compliance, and it said the reincorporation "will have no effect" on the carrier's ownership, control, management or operation.
European Bank for Reconstruction and Development approved a $156 million loan to Joint Stock Company International Airport Terminal Pulkovo for construction of Pulkovo III at St. Petersburg, Russia. Skanska of Sweden will begin work early in 1998, and completion is expected about 2000. In its summary of the project, EBRD cited fast-growing international traffic to St. Petersburg.
United has acquired Premier Group, a meeting management company that also offers creative services and communications support. Premier previously was part of Apollo Travel Services, which was acquired by Galileo International. United took ownership of Premier late in July, when the Apollo-Galileo transaction occurred. Premier, based in Rolling Meadows, Ill., organized the Apollo Travel and Technology Conference in July, which drew 6,000 participants.
General aviation accounted for 29.9 million, or 57%, of the 52.1 million airport operations between January and October last year at controlled U.S. airports, according to FAA data. Airlines accounted for 11.6 million takeoffs and landings, or 22%.
Swissair and Malaysian Airlines plan to offer code-share services between Zurich and Kuala Lumpur, beginning Nov. 1. The agreement calls for flights between the two cities on Thursdays, Fridays and Sundays. Swissair will block a number of seats on a 777 to execute the arrangement.
Delta asked DOT to defer action on the applications of Air Pacific and Canadian Airlines to operate code-share/blocked-space service not provided for in the U.S.-Canada bilateral, which does not cover third-country code- sharing or fifth-freedom traffic. Northwest raised questions as well, commenting that Canadian negotiators "were unyielding in their opposition" to such provisions, even though the U.S. "ardently pursued a true 'open skies' bilateral." Northwest urged DOT not to permit "a Canadian carrier to do that which Canada will not permit U.S.
Air New Zealand, stung by a stronger currency, an upsurge in regional competition and higher fuel costs, posted a NZ$150.2 million (US$96.1 million) profit for the fiscal year ended June 30, 33.3% below the prior- year level. Revenue declined 2.3% to NZ$2.93 billion ($1.88 billion). During a year of alliance moves to strengthen its worldwide standing, ANZ suffered at home because of slow domestic growth and a stronger New Zealand dollar that reduced tourism. The rising currency depressed passenger yields in key origin markets and soured cargo exports.
Greyhound Air, a Canadian startup that operated Boeing 727s leased from Kelowna Flightcraft, will stop service as of Sept. 21, citing inability to make a profit. The company, owned by Greyhound Canada Transportation Corp., will continue to operate bus service, however, on routes previously flown with aircraft. Effective yesterday, Greyhound is no longer taking reservations, and Canadian Airlines has agreed to accommodate passengers booked for flights after Sept. 21, subject to seat availability.
The European Union said it is "quite optimistic" about the outcome of talks with Russia on "Siberian overflight rights," said the spokeswoman of EU Foreign Affairs Commissioner Hans van den Broek this week in Brussels. The reduction of these charges is "an extremely important issue for our airlines, which currently pay charges of $250 million a year." Van den Broek discussed the matter with Russian authorities during a visit to Moscow last week. "The Russians are willing to consider and study our position," said the spokeswoman.
Frontier Airlines has received government approval to offer special fares to federal employees on certain routes. Beginning Oct. 1, Frontier will offer government rates in the Denver-El Paso market. The approval required a federal safety inspection, conducted in a four-day Defense Department check in June.
Iberia is partially passing on to its customers a 9% cut in value added taxes on domestic air transport. The VAT is dropping from 16% to 7%, but the Spanish airline announced yesterday in Madrid that its domestic fares would be "readjusted [downward] by approximately 3.5%," as a consequence of the increase of external costs. In recent months, fuel costs went up 15.5% compared with 1996, the airline said. "The drop in VAT will allow the group's customers to pay reduced fares without affecting the company's results."
Jet Vacations International signed an agreement with Swissair to market travel packages to European tourist destinations, including Switzerland, France and Italy. The tour operator intends to go after more of the U.S. travel market to Europe, which it estimated at $6 billion annually.
Lufthansa Technik AG (LHT) and Shannon Aerospace Ltd. will jointly service Lauda Air's 737s under a contract signed last week. According the agreement, LHT will carry out light, C-check maintenance on the 737s at its Berlin Schonefeld facility. Shannon Aerospace, in which LHT has a 50% stake, will conduct the more extensive D-checks at its Shannon Airport base.
French Communist Transport Minister Jean-Claude Gayssot said he favors "neither privatization nor status quo" for Air France, according to reports in Communist party daily L'Humanite. In its current state-owned structure, Air France is posting better results than in the past, the minister said.
Continental will move its headquarters to downtown Houston, consolidating locations in Southeast Houston and at George Bush Intercontinental Airport. The airline, which received tax incentives for the move, will relocate 3,000 workers, beginning next year.
Baltia Air Lines submitted documents to DOT in support of its long-delayed start of scheduled foreign combination service between New York and St. Petersburg, Russia, outlining cash-flow scenarios comparing 90-day pre- revenue expenses and a projected 12-month operating cash flow for 1997-98. The carrier detailed expenses it expects in preparing for five weekly frequencies and one weekly frequency; in the case of pre-operational plans for one frequency, preparation for increased frequencies would occur after revenue operations begin. (Docket OST-97-2763)
Emery Worldwide has launched direct air cargo service at San Jose, Los Angeles and Dallas with a 727 that operates on a daily roundtrip basis. The service provides the cities with an additional 45,000 pounds of cargo capacity for next-morning deliveries. The flight operates from San Jose to Los Angeles and continues to Dallas the same evening.
General Electric Co. said yesterday it has completed the acquisition of Greenwich Air Services through a combination of GE stock and cash valued at $530 million. GE also obtained the rights to complete the acquisition of UNC Inc., also an aircraft engine and aviation equipment services company. The Justice Department has approved the Greenwich acquisition of UNC, but the transaction is subject to approval by UNC shareholders. That vote is expected this month.
Niche carrier Spirit Airlines applied for an extraordinary-circumstances exemption to fly between Melbourne, Fla., and New York LaGuardia. Spirit wants to start flying two daily nonstops on the route by Nov. 15, an optimistic goal given DOT's pace on other slot-exemption requests filed in recent months, not yet acted on, for LaGuardia and Chicago O'Hare service.
