Austrian Airlines predicts it will stay in the black and increase profits over the next few years despite competition on fares. "We are striving to increase productivity and to show steady profits," said Chief Executive Herbert Bammer. In 1995, the airline reported group sales of 11.7 billion schillings (US$1.17 billion) and posted a pre-tax profit of 65.9 million schillings (US$5.7 million). The carrier expects similar gains for 1996, although fuel costs rose by 100 million schillings last year.
One day after placing its first order for regional jets, Atlantic Coast Airlines reported 1996 profits of $19.2 million, up 49%. The United Express carrier also paid employees $2.9 million in profit sharing, a record. Revenue rose 16.5% and yield jumped 13.4% to 50 cents. Operating income grew 57.8%, even though the carrier paid 20.5% more for a gallon of jet fuel than it did a year earlier. Fourth quarter profits, $2.7 million, were down from $5 million in the year-earlier period, but extraordinary items in the quarter had a $2.3 million impact on earnings.
Confirming indications that Malaysia will join the U.S.'s Asian open skies initiative soon, Malaysian Transport Minister Ling Liok Sik said he expects to sign an accord in April, since "most of the problems between both sides have been worked out." Negotiators are scheduled to meet next month.
New York research firm Jupiter Communications reports that half of World Wide Web transactions in 1996 were for travel services, and online spending for those services account for $1 billion of the $2.3 billion to be spent this year. Jupiter will host Travel '97 for Internet technology developers, service providers and publishers April 16-17 at The Drake Hotel in Chicago. The seminar will focus on development strategies for travel- oriented content, services, technologies and communications. For more information, call 212-780-6060.
BMW Rolls-Royce BR710 engine for the long-range Bombardier Global Express corporate jet received approval from the European Joint Aviation Authorities one month ahead of schedule. The BR710, rated at nearly 15,000 pounds thrust, also powers the Gulfstream V. Development of the BR715 for the Douglas MD-95 is on schedule for certification in September 1998.
Facing friendly questioning, DOT Secretary-designate Rodney Slater moved one step toward confirmation yesterday with a Senate Commerce Committee hearing on his nomination that focused as much or more on surface transportation issues as it did on aviation. The only concerns expressed about Slater's nomination came from Chairman John McCain (R-Ariz.), who said he was "very concerned" about the amount of time Slater, now head of the Federal Highway Administration, has spent traveling.
Air France has become the first European airline to serve Nigeria's oil capital, as it launched a nonstop weekly service to Port Harcourt from Paris Charles de Gaulle Airport last week, using a 747-200 Combi.
Fairchild Dornier selected the Pratt&Whitney Canada PW306/9 turbofan engine to power the first 32-seat-plus regional jet aircraft. The engine, with a takeoff thrust of 6,050 pounds, "combines low weight and a small size with excellent fuel efficiency," Dornier President Jim Robinson said.
British Airways will sell its U.K. Ground Fleet Services division to a unit of Miami-based Ryder System Inc. for an undisclosed sum. The move was discussed in December as part of BA's three-year, 1 billion pound cost-reduction initiative. The unit, which provides ground equipment engineering and vehicle leasing services to operators at London Heathrow and Gatwick, has 7,300 vehicles and employs 500. BA intends to award the winning bidder, Slough, U.K.-based Ryder plc, a five-year contract, subject to completion of the deal.
FAA yesterday introduced an aviation safety data program agency officials said will provide information about long-term safety trends but will not enable travelers to select the safest air carrier. The two senators who asked FAA to come up with the program endorsed it immediately. So did the Air Transport Association, which said it will help the public "better understand just how impressive and safe the overall aviation system is."
Federal Express, which has joined the fray in public efforts to implement what U.S. carriers regard as authorized beyond rights from Tokyo, said in a DOT filing this week that Japan Airlines has engaged in a "glaring fallacy." JAL wants an exemption for Tokyo-Atlanta all-cargo service and warned that demands to withhold authority as leverage against the Japanese government would needlessly escalate bilateral tensions (DAILY, Jan. 23).
Bombardier has completed the purchase of Ontario's 49% interest in de Havilland for $49 million, issuing a 15-year promissory note with a 7% interest rate and $4.9 million payments at the end of each of years six through 15. Bombardier and Ontario bought de Havilland from Boeing in January 1992.
Boeing Commercial said it has formed Boeing Enterprises, which will "establish and direct new commercial airplane-related business entities," and named Larry Clarkson, senior VP-planning and international development at Boeing Co., to be president of the new unit.
Apollo computer reservations system is capable of allowing electronic tickets to be processed on USAir, Northwest and TWA. United, Continental and America West already offer electronic tickets on the Apollo system. Northwest is the first Apollo user to allow electronic tickets for flights to Canada.
FAA has revoked the repair station certificate of AC Fuel Cells Worldwide of Memphis, based on evidence that the company "falsified part and serial numbers of fuel cells and used unauthorized parts in overhauling fuel cells." FAA said the company also "performed maintenance on life rafts and vests without appropriate maintenance manuals, and used parts that were cadmium-plated by a company that was not authorized to do so."
Midwest Express reported record fourth quarter revenue of $78.2 million, up 23.3%, and record net earnings of $3.97 million, up 35.9%. The company had revenues of $304.7 million for 1996, up 17.6%, and net profits of $21.8 million, up 13.7%. Like others, Midwest Express faced sharply higher fuel costs last year. In the fourth quarter, it paid an average of 87.1 cents per gallon and its Skyway Airlines subsidiary paid 93.8 cents per gallon, the highest average price reported so far this year.
DOT confirmed it has met with a number of niche airlines in recent months to discuss their concerns about predatory pricing by major airline competitors. DOT declined to name the carriers, but a ValuJet spokesmen said his airline was one of them. Frontier officials met with DOT and the Justice Department last week to discuss their own charges of predatory activity by United at Denver Airport. A Frontier spokesman said government officials "seemed to be very interested in what we said, and asked for more information," which Frontier agreed to provide.
The port authority of the Commonwealth of the Northern Mariana Islands criticized World Airways for asking DOT to deny Korean Airlines' renewal of service to Saipan. Trying to secure what it regards as a routine effort to fly beyond Seoul, World also asked for denial of KAL and Asiana applications for new service, including one route, KAL's Korea-Kona, that would be extra-bilateral. But "it would be entirely inappropriate to lump those applications together," the port authority said.
Business Express reported a 31.5% decline in revenue passenger miles in December to 17.6 million from 25.7 million. Capacity fell 20.6% to 51.6 million available seat miles from 65 million, while the load factor was off 5.5 points to 34%. The carrier said the load factor dropped because of the phaseout of the Beech 1900 and the increase in Saab 340 flying. Business Express has phased out 27 Beech 1900Cs. The carrier's operating cost per ASM year-over-year was down 6.12%, while revenue per ASM increased 4.4%.
House Transportation aviation subcommittee has scheduled hearings Feb. 5 and Feb. 13 on airlines' proposals to establish user fees for FAA services. The Feb. 5 hearing is scheduled at 10:30 a.m. and the Feb. 13 hearing at 9 a.m., both in Room 2167, Rayburn Building.
United Express carrier Atlantic Coast Airlines ordered 12 50-seat Canadair Regional Jet Series 200ER aircraft and placed 36 options in a deal Bombardier values at $240 million. ACA will buy the aircraft through third-party financing, and if United agrees it will use them to beef up its Washington Dulles operation, where it offers more daily departures than any other carrier, and possibly in new East Coast routes.
British Airways announced yesterday the resignation of three directors from the USAir board. USAir said the move to take Bob Ayling, Derek Stevens and Roger Maynard off its board "clears another obstacle" in USAir's desire to compete in the U.S.-U.K. market. BA also said in December that it intends to sell its shares in USAir. The U.S. carrier was not satisfied, however, saying that, despite the moves, "competition is not yet assured."
America West, despite higher fuel costs, posted a 2.6% decline in fourth quarter operating costs that helped the airline realize record profits of $12.1 million. Fourth quarter revenues increased 11% to a record $439.9 million. For the year, the carrier reported net income of $48.7 million, excluding a special third quarter charge of $65.1 million. Counting the charge, America West had a net profit of $8.5 million for 1996, down 84%. The unit cost decline was largely due to flying longer-haul flights, which tend to cost less per seat mile to operate.
The evidentiary hearing into the American -British Airways alliance requested by United (DAILY, Jan. 28) would be the first such DOT investigation of an international partnership seeking antitrust immunity. Oral hearings before an administrative law judge, with supporting documents, exhibits and witnesses subject to cross-examination, are conducted more often on issues such as airport rates, a DOT spokesman said.
Northrop Grumman said it will modify an existing ASR-9 airport surveillance radar into a transportable version under a $514,000 contract from FAA. The transportable unit, designed for truck transport and quick setup at a prepared location, can be assembled and operational in 16 hours. The only support requirements are a power source, data links to the display system and cement footings for installing the antenna tower. In the transportable version, a self-contained transportable shelter houses both the radar and beacon equipment.
