Air France and Lufthansa have begun what is expected to be a rush to offer heavily discounted fall and winter transatlantic fares in an attempt to get passenger commitments early. Future fare sales for the winter season likely will be based on how strongly travelers respond to these early sales. Air France is offering bargain fares to 50 cities in Europe, some as low as $179 each way. The midweek fares, from seven U.S. cities, are available for departures Nov. 1 through March 31 and must be purchased by Aug. 7.
Hexcel Corp., citing strong demand for its carbon fiber and composite materials for commercial aerospace products, reported net income of $15.1 million for the second quarter, compared with a net loss of $23.7 million a year earlier. Sales were $241.6 million, up from $166.8 million.
U.S. National Carriers Financial Results First Quarter 1997 First Quarter 1997 Operating Operating Operating Revenues Expenses Profit/Loss (000) (000) (000) American Trans Air $ 185,236 $ 179,950 $ 5,286 Carnival 79,334 91,525 (12,191)
Air Express International said net income for the quarter ended June 30 increased 34% to $13 million while revenues jumped 21% to $386.6 million. Operating profit rose 24% to $19.4 million. For the first six months, net income gained 36% to $21.6 million, revenues rose 20% to $737.7 million and operating profit grew 23% to $31.7 million. Dennis Dolan, chief financial officer, said all major services, including air and ocean freight forwarding and customs brokerage, contributed to the results.
Hamilton Standard Aircraft Systems named Richard Burrell president of Dynamic Controls HS and VP-Flight Systems; Arthur Lucas VP-engineering; Mohammed Sattar VP-Propulsion Systems and Joseph Triompo VP-Engine Controls and Accessories.
New airlines, "definitely in the FAA's vigilante crosshairs" and "struggling to avoid the elephants' feet in the market place," are in extreme financial danger while the major airlines "wallow in record profits," says Morten Beyer&Agnew. In 1996, a group of thinly capitalized new airlines posted a net negative swing of a quarter billion dollars, MBA says. The company blames structural problems but also cites "big airlines' aggressive, competitive practices which are permitted by DOT."
FedEx said the Subic Bay Metropolitan Authority has purchased a transponder landing system that will help pilots determine the exact location of their aircraft before final approach to the international airport. SBMA Chairman Richard Gordon signed a $1.6 million contract with Advanced Navigation&Positioning Corp. to provide and install the equipment. The system uses radio signals from ground stations to measure the location of approaching aircraft. Pilots receive the information on their instrument landing systems.
Orally approved an emergency exemption for Heavy-lift Volga-Dnepr to operate a one-way An-124 charter flight July 24 to carry one GE90 engine and related components between Wilmington, Ohio, and Seattle...Orally approved an exemption for China Airlines to conduct scheduled foreign combination service between Taipei and Washington, D.C...Orally approved an exemption for EVA Airways to conduct scheduled foreign combination service from points behind Taiwan, via Taiwan and intermediate points, to points in the U.S.
Northwest won its bid to make Minneapolis/St. Paul a new gateway for service to Hong Kong, but lost Detroit and failed to change Seattle's designation from a multiple-designation hub. DOT's order, which now goes to the State Department for formal implementation, noted the only issue was the allocation of a limited number of gateways linking the U.S. to Hong Kong.
Aircraft Owners and Pilots Association objected Friday to legislation in the Senate fiscal 1998 DOT appropriations bill (S. 1048) that allows the closure of Bader Field in Atlantic City and Richards-Gebaur Memorial Airport in Kansas City regardless of grant assurances requiring the airports' operation.
American joined TWA in filing against the Consumer Union's petition to force carriers to tell passengers the average and lowest fares charged for each class of service on a given route (DAILY, July 7). American said the proposal works against congressional policy and will do more harm than good, confusing customers while simultaneously imposing an unnecessary cost on airlines.
DOT is taking a closer look at Falcon Air Express, which wants to alter its certificate so it can operate more than one 727. Falcon started charter passenger operations in April 1996, and DOT imposed the limit because of the carrier's modest financial resources. The fitness division now seeks clarification of missing and conflicting data in recent filings. DOT said one schedule showed a net loss of $157,853 for the six months ending Dec. 31, while another showed $251,640 in retained earnings, indicating profitable operations.
The increase in aviation tax revenue airlines have been fighting about in Congress - $3 billion-$4 billion over five years - is comparable to the cost of buying a single B-2 bomber and operating it for six years, according to a consulting firm's study for the U.S. Air Force. The B-2 costs about $779 million to buy and $2.4 billion to operate and maintain, plus $415.9 million for personnel, for a total of $3.6 billion, the study found. USAF is trying to show that the B-2 is much cheaper than an aircraft carrier battle group.
Air Transport Association has hired Michael Wascom as director of federal affairs, the association's liaison with Congress and federal agencies. Wascom comes from the National Automobile Dealers Association, where he was a legislative representative. Before that, he was legislative director for Rep. Spencer Bachus (R-Ala.) and legislative assistant to Rep. Jim McCrery (R-La.).
Korean Air has passed Air France to become the second largest commercial passenger airline cargo operation. KAL said it flew 4.9 million freight ton kilometers, behind only Lufthansa Cargo's 6.4 million and ahead of UPS with 4.8 million. Air France slipped to 4.6 million. KAL ships cargo from 16 cities in the Americas.
Galileo International has priced its initial public offering of 32 million shares at $24.50 per share, which will value the computer reservations system giant at $2.45 billion. Galileo will receive $275.6 million in net proceeds from the offering, or $387 million if the over-allotment options are exercised in full. The money will be used to finance the acquisition of Apollo Travel Services Partnership from United, US Airways and Air Canada; Galileo Nederland from KLM and Traviswiss from SAirGroup.
Southwest's lower-than-most load factors, in the 60s, concern some analysts but not Southwest. "Anytime we can do better than 65%, we're operating full flights during peak periods," according to Chief Financial Officer Gary Kelly, and such loads are "not sustainable over a long period." Southwest's breakeven load factors are in the "mid-to-high 50s," he said.
CIT Group study finds that sales of new corporate jets will grow at a rate of 4.8% per year through 1999 while sales of new turboprops are expected to decline an average of 5.9% per year during the same period. However, sales of pre-owned units, which account for 85% of all corporate aircraft sold in the U.S., rose 26% in 1996. CIT expects sales of used aircraft to "remain relatively strong through 1999 - comparable to the mid-1980s."
