Mesa Air Group said it will delay announcement of its quarterly earnings, set for today, as a result of United's linkup with SkyWest (DAILY, July 23). Mesa subsidiary WestAir has been flying United Express routes out of Los Angeles, but United filed suit last month to enforce what it said was its right to change frequency and route allocations (DAILY, June 26). Mesa said the United-SkyWest agreement would take eight markets away from WestAir, and the company needs more time to evaluate its impact.
China Southern this week inaugurated transpacific service with a nonstop 777-200IGW flight from Guangzhou (formerly Canton) to Los Angeles, the first time an airline operated the aircraft on a transpacific route.
Tower Air posted a net profit of $3.6 million for the second quarter, up from $2.9 million a year earlier. Operating profit jumped 85% to $9.5 million from $5.1 million. Revenues declined 1.2% to $112.6 million while expenses dropped 5.2% to $103.1 million. Scheduled passenger traffic was down 10.6% on 12.7% less capacity, reflecting the end of service to Brazil and between Miami and San Juan, as well as a reduction in other domestic service. Yield rose to 7.8 cents from 7.1 cents and operating cost per available seat mile declined to 4.6 cents from 4.9 cents.
KLM will begin serving two additional Japanese cities, Sapporo and Nagoya, beginning with the winter schedule Oct. 28. KLM will be the first airline to operate to Nagoya nonstop from Europe. The twice-weekly service will bring to 14 the number of weekly roundtrip flights KLM will operate to Japan. The new service will use a new, less congested route farther north than existing service between Europe and Tokyo and Osaka. The Siberian route, recently approved by Russia, will save 10 minutes of flight time.
A delegation from Russia's Krasnoyarsk Territory plans to visit the U.S. early next month to promote a new air route between North America and Asia. U.S. government and airline officials prefer, however, that the Federal Aviation Authority of Russia (FAAR) permit the carriers to use new routes on which they already have funded route proving and demonstration flights. One element of the FAAR approved these routes, but another part of the organization, which oversees the Russia-U.S. aviation agreement, has not agreed.
House Transportation Committee yesterday approved legislation (H.R.2005) clarifying that the "Death on the High Seas Act" does not apply to aviation accidents, and legislation (H.R.2036) to reauthorize the aviation war-risk insurance program. The bills were approved July 10 by the aviation subcommittee (DAILY, July 11).
Universal Alloy Corp. said its new aircraft aluminum extrusion mill at Canton, Ga., will be operational in September, four months ahead of schedule. With four extrusion presses sized from 900 tons to 2,750 tons, it will "keep pace with the rejuvenation of the aircraft industry and will serve the East Coast, Midwest and Europe," the company said.
Lucas Aerospace has acquired Smiths Industries' engine control business. Terms were not disclosed. Lucas acquired Dowty's engine fuel systems business in 1993.
Evans&Sutherland Computer Corp., said yesterday it received a contract from Airbus Industrie to provide the visual system for an A320 flight simulator for Portuguese carrier TAP. The simulator is being built by Thomson Training and Simulation for delivery to Lisbon in January.
U.S.-Japan talks in Tokyo still are scheduled Aug. 4-6, as planned originally. DOT provided incorrect information on a change of dates (DAILY, July 22).
Chase Manhattan Corp. announced consolidation of its transportation-related client management activities into a Global Transportation Group headed by Morten Arntzen, who most recently ran Chase's Global Aerospace and Shipping Group. In addition to aerospace and shipping, the new group will include railroads, autos and trucking.
ALM Antillean asked DOT for authority to operate between two and 12 roundtrip charters on Aruba-Miami or Aruba-Tampa routes for Air Aruba N.V. DOT approved similar ALM requests during the past two weeks when Air Aruba asked ALM to operate subservice flights on an emergency basis due to an engine failure that grounded one of its aircraft. A replacement engine and parts were not immediately available due to a worldwide shortage. (Docket OST-97-466)
Travel Industry Association's first report on cultural and historic tourism, to be issued Aug. 7, will show that more than one-fourth of all adults in the U.S. visited a museum, historical site or battlefield in the past year. About 33 million adults also attended a cultural event, and both groups shop more, spend more, stay in hotels more often, take longer trips, are more likely to fly and visit more destinations than other travelers. To obtain copies, call TIA at 202-408-8422, or visit its Web site at www.tia.org.
Northwest's Air Line Pilots Association unit, which has been in contract negotiations since November, accused the company of using an order for RJ85 aircraft as leverage in the talks. Northwest, which intends to exercise options for 24 RJ85s (DAILY, July 22), already leases 12 of the aircraft to regional affiliate Mesaba Airlines, and according to ALPA, Mesaba uses them as replacement aircraft on Northwest DC-9 routes.
Business is booming for providers of online airline tickets and vacation packages. Preview Travel said it is the first online travel agency to gross more than $2 million in online bookings in one week. The company said the record sales came July 7-13 and included airline tickets, car rentals, hotel rooms and vacation packages. Preview spokesman Ron Pernick said about 80% of the $2 million came from airline tickets.
Aviation Distributors Inc. said net income for the second quarter declined 20.8% to $608,000 on a revenue increase of 46% to $10.3 million. The company blamed higher selling, general and administrative expenses "commensurate with increased revenues and the impact of a net operating loss tax benefit recognized in the prior three-month period." For the first six months, net earnings jumped 130% to $915,000 from $397,000, while revenues increased 68.7% to $19.8 million from 11.7 million.
U.S. and Aruba initialed an open skies agreement yesterday, the first in the Caribbean and "one that we hope leads to more," a U.S. official said. The agreement, which provisionally takes effect immediately, includes seventh-freedom cargo rights, permitting carriers to operate a hub to any international destination carrying freight that does not have to transit the U.S.
Mercury Air Group said it has acquired a minority interest in Patriot Aviation Services, which provides aircraft maintenance, overhaul, painting and modification services, including freighter conversions. Patriot's largest customer is Sun Aviation Group, with which it holds a service contract for 17 737 aircraft.
Spanish Minister for Industry Josep Pique said his government intends to privatize Iberia completely within two years. The money-losing flag carrier twice benefited from massive infusions of state aid since the early 1990s. It has edged back into the black, however, with pre-tax profits of 5.1 billion pesetas (US$35.7 million) for the first six months of 1997, thanks to tough cost-cutting measures enforced last year by Chairman Xabier de Irala.
Strong international revenue and yield gains offset a weaker domestic revenue picture and led United yesterday to post a record net profit of $376 million fully distributed in the second quarter, up 11.6%. Revenue rose 5.2% to $4.4 billion. The return of the 10% ticket tax, dormant during the comparable year-ago period, had "a larger-than-expected effect on domestic revenues," said John Edwardson, president and chief operating officer. United's $412 million in operating revenue also set a record.
U.S. Carriers Interest Expense First Quarter 1997 % Of Total Interest Operating Expenses Major Carriers Alaska $ 5,607,000 1.78 America West 12,081,398 2.80 American 66,916,000 1.88 Continental 26,859,000 1.99
United and SkyWest Airlines yesterday signed a marketing agreement by which SkyWest will operate as United Express at Los Angeles, Las Vegas and Phoenix and in several markets within California. The code-share agreement, to take effect Oct. 1, will commit most of SkyWest's California and Las Vegas operation to United. At the same time, SkyWest reaffirmed its relationship with Delta in Los Angeles and Salt Lake City.
Primac, of Teterboro Airport, N.J., said it was granted a Part 135 operating certificate as a cargo and charter carrier. It operates two Cessna 402s with six seats and two Cessna 310s with four seats for charter.
Boeing reported second quarter net earnings of $399 million on sales of $9.3 billion, compared with net earnings of $468 million on sales of $6.3 billion during the same period last year, reflecting a shift toward work on less profitable products. This year's data are before accounting for ShareValue Trust, a 12-year irrevocable trust that holds Boeing common stock, receives dividends and distributes to employees any appreciation in value greater than a 3% per year threshold rate of return.
