American Airlines, structuring itself for a possible pilots strike this weekend, is drawing $1 billion from company credit lines that expire in 2001 and has negotiated an additional $1 billion in a credit agreement underwritten by Morgan Guaranty Trust Company of New York, Chase Manhattan Bank, Citibank and Credit Suisse First Boston, according to a document filed with the Securities and Exchange Commission. The new financing, which will expire Dec. 31, is secured with airline-owned aircraft. American had $1.7 billion in cash and cash equivalents as of Dec.
British Airways will take delivery this month of six Boeing widebody aircraft, which BA called a "record to one airline customer for the Everett plant," where 747s, 767s and 777s are assembled. BA took delivery last week of its first new long-range 777 IGW (increased gross weight). It will get two more this month plus two 747-400s and one 767-300ER. BA has 18 777s on order with options on another 12, all to be delivered by the end of 2002. They will take over some long-haul routes currently operated by its 767s.
British Airways yesterday reported a 94 million pound (US$160 million) net profit for the December quarter, up 6.8% from the 1995 quarter but depressed slightly by 33% higher fuel prices. Revenues were up 6.4% to 2 billion pounds (US$3.4 billion), but operating profit dropped 13.8% to 131 million pounds (US$223 million). The airline's fuel bill was 56 million pounds (US$95 million) higher in the quarter, and if fuel prices had not increased, its operating results would have risen 23%.
The World Tourism Organization (WTO) has appointed William Norman, president and chief executive of the Travel Industry Association of America (TIA), to an eight-member, international working group on WTO's future. The WTO will hold a meeting of top tourism officials in October in an effort to modernize its 21-year-old intergovernmental organization, TIA said.
Tower Air applied for an exemption for scheduled combination service from New York to Athens and beyond to Tel Aviv, using 747s. Tower is applying because TWA, one of two U.S. flags designated for Greece service, will withdraw from the route on April 18. Tower, which applied for scheduled Athens service in 1986 and 1991 without success, has operated seasonal charters there for more than a decade. The U.S.-Greece bilateral permits beyond service from Athens to Tel Aviv. (Docket OST-97-2120)
Setting the stage for new slot allocation rules, three top European Commission officials last week spread the EC's view that airport slots are not for sale. "Auctioning slots at congested airports could drive prices out of the reach of new entrants," European Union Transport Commissioner Neil Kinnock told The DAILY. Kinnock's chief of cabinet, Philip Lowe, said in Brussels that slot trading in the U.S. had led to the reinforcement of dominant positions.
Sabre Interactive has agreed to acquire Worldview Systems Corp.'s equity interest in the Travelocity brand name and World Wide Web site. Sabre and Worldview were co-creators of Travelocity, The Sabre Group's all- encompassing travel-planning Web site. Sabre now will have creative control of the site, while Worldview will maintain and manage the site's Destinations&Interests, Points of View and Travel Merchandise modules. Sabre said the Travelocity site has registered more than 700,000 members in 11 months.
Orbit Flight Training, a unit of Thomson Training&Simulation, is expanding and relocating from East Midlands Airport to facilities near London Heathrow. It is adding an A340 full flight simulator, with Virgin Atlantic as the first major user. It will retain 777 and A320 simulators and sell two 737 simulators to Southwest and Continental.
KLM Cargo will change the destination of its air freight service from Amsterdam to Sweden. Beginning Feb. 17, the five-times-weekly flights will land in Skavsta Airport, 60 miles southwest of Stockholm, instead of the capital's Arlanda Airport. KLM said Skavsta is closer to the industrial region where many of its major customers are located and will reduce shipment times.
British Airways appointed Martin George director-marketing, reporting to Chief Executive Bob Ayling as one of 11 members of BA's management team. George previously was general manager-telephone and retail sales.
Two former Lifeco executives, whose non-compete clauses have expired, have launched LogiQuest Technologies, a company that will electronically streamline the travel distribution process. The company, based in Del Mar, Calif., was founded by Jeff Hoffman, who will be its president and chief executive, and Steve Taylor, who will be chairman. They said LogiQuest already is in negotiation with major industry suppliers.
Carnival Air Lines will operate nonstop service between Puerto Rico and Orlando this summer using A300s configured for 24 Executive Class and 230 coach seats. The carrier will offer daily flights June 5-Aug. 11 between San Juan and Orlando and three weekly flights to Aguadilla. Fares start at $119 each way.
Tensions at American ran high yesterday as National Mediation Board began supermediation in Washington between the airline and its Allied Pilots Association. With five days left before a strike, a few acts of violence against pilots - or threats of future violence - were reported and assumed to be coming from other employees who are angered over possibly being placed on "emergency leave" after Friday, when the cooling-off period expires and a strike can begin.
American Society of Travel Agents will host its annual conference on travel fraud in Los Angeles March 13 at the Westin Bonaventure Hotel. To register, call 703-706-0387.
DOT is giving startup carrier Baltia Air six more months to launch operations before withdrawing its certificate. Baltia received its certificate Feb. 7, 1996, for service between New York and St. Petersburg, Russia, and had one year to be certified by the FAA and meet other financial requirements. The carrier asked for the extension to complete an initial public offering and complete FAA certification. It plans to serve the route with a 747.
Varig's re-evaluation of all its code shares led to termination of its agreement with Delta, Carlos Muzzio, Varig's general manager-North America and the Caribbean, said yesterday. Varig retains code shares with Lufthansa, SAS and Japan Airlines, and is in negotiation with South African Airways and Thai Airways International, the latter to supplement Varig flights to Hong Kong and Bangkok. Muzzio, describing the evolving alliances as a "big chess game," told The DAILY that Varig is discussing a new code-share deal with more than one U.S. carrier.
USAir and Deutsche BA plan to add Hamburg and Cologne/Bonn to their code- share points March 5. The two share codes on flights to Berlin and Dusseldorf. Passengers will fly on USAir from Philadelphia to Munich, and from Munich to Hamburg and Cologne on Deutsche BA.
FAA is allocating tens of millions of dollars for support activities in fiscal 1998 while zeroing many programs industry has viewed as vital. For example, despite FAA's earlier declaration that preventing runway incursions has high priority, its $8.46 billion fiscal 1998 budget request eliminates virtually all facilities and equipment (F&E) funding in this area (DAILY, Feb. 7). FAA also is dropping the National Satellite Test Bed (NSTB) system, one of its most successful programs.
Vanguard Airlines lost $12.6 million in the fourth quarter, deepening its $5.4 million loss in the same 1995 period, and $24.1 million in 1996, nearly double 1995's $12.2 million loss. The airline cited higher fuel and maintenance costs and a "largely unsuccessful expansion initiative during September and October" as reasons for its poor results. Vanguard restructured its routes Dec. 21 and expects the changes to improve its operating performance.
Southwest is objecting to DOT's proposed rule on access by the handicapped to air travel. The carrier supported a number of Air Transport Association comments, including the claim that DOT is going beyond its legal authority in proposing the amendments to regulations implementing the Americans with Disabilities Act, and it added some of its own. Southwest sees problems in mandating preferential seat assignments, bumping or relocating passengers to make way for handicapped people, and handling collapsible wheelchairs.
Lufthansa is negotiating a cooperation agreement with British Midland to develop its business in the U.K. The German carrier is responding to British Airways' operations in Germany through its local subsidiary, Deutsche BA. If the current negotiations are successful, British Midland would operate part of Lufthansa's U.K. services, Lufthansa Chairman Jurgen Weber said in an interview with German travel trade magazine FVW International.
All 17 members of the Senate Commerce aviation subcommittee asked President Clinton last week to "use all the powers and persuasions" of his office to facilitate a settlement of - or an agreement to arbitrate - the American- Allied Pilots Association dispute. The adversaries begin supermediation today in Washington, and the pilots will be free to strike at midnight Friday. After the two sides exchanged financial analyses last Thursday in Fort Worth, American President Don Carty said he still hoped the pilots would agree to arbitration.
Air France appointed Francois Bachelet executive VP and chief operating officer of Air France Cargo and Robert Iversen chief operating officer of the airline's Americas profit center.
FAA will demonstrate Cardion's Cooperative Area Precision Tracking System (CAPTS) in a Parallel Runway Monitor (PRM) mode this week at Atlanta Hartsfield Airport. The agency invited interested parties to witness the demo of what it calls "a potentially low-cost, high-update surveillance system for monitoring simultaneous ILS approaches to closely spaced parallel runways." FAA's budget shows nearly all efforts for surface surveillance systems have been zeroed out of the Fiscal 1998 plan. (See table on Pages 236-238.)
