Standard&Poor's yesterday altered its rating of Delta to "developing" from "positive," following reports that the carrier held preliminary merger discussions with Continental. If Delta acquired Continental, S&P said, "it would represent a change of direction from its recent focus on cost cutting, internal growth and a publicly stated goal of regaining an investment-grade rating" from S&P. The rating affects about $5.4 billion of Delta's debt.
The chairman of Air India and Indian Airlines, Russi Mody, resigned abruptly yesterday, protesting that the government left him few options in the ongoing restructuring of the two carriers. No replacement was named, and there were conflicting reports over whether the government even accepted his resignation. Mody had been jostling with the government over fleet rationalization and other issues. Air India operates 30 widebodies, including 15 747s, and Indian Air has 55 narrowbodies, including 30 A320s and 15 737-200s.
Lufthansa said this week its bleak financial picture will not improve for the rest of 1996. "We expect in the best case that profits for this year will be 10% below those of last year," said Klaus Schlede, chief financial officer. The German carrier posted a pre-tax profit of 756 million Deutschmarks (US$484 million) in 1995. Last week, Lufthansa announced a 14% drop in pre-tax profits for the first nine months of 1996 to DM434 million, while revenue rose 4.7% to DM10.016 million.
Reno Air, in two service-expanding moves, announced yesterday a code share with Hawaiian Airlines and new service to Detroit and Palm Springs from Reno/Tahoe. The Hawaiian code-share will start Jan. 7 for connecting service at Los Angeles from Tucson, Albuquerque, Reno/Tahoe and San Jose to and from Hawaii. The Detroit service will link Reno/Tahoe to Detroit Metropolitan, starting Jan. 30, and seasonal service to Palm Springs will restart Jan. 28.
In its first U.S. expansion since 1961, Pakistan International Airlines will launch twice-weekly service to Chicago and Washington through Amsterdam, beginning Dec. 12. The service supplements daily service from New York JFK to Pakistan via Frankfurt, Amsterdam and Paris. The new service will operate initially through New York and will be upgraded to nonstop next summer. Adding Chicago and Washington is a "major expansion for PIA," said K. Salim Jahangir, PIA's North American general manager.
Kawasaki Heavy Industries has decided to join the Rolls-Royce Trent 900 engine team as a risk-sharing partner. KHI currently works on another Rolls program, the Trent 800, with Ishikawajima-Harima Heavy Industries.
U.S.-London market share of an American-British Airways alliance should be reduced by regulation to 40% as a precondition of alliance approval, Cyril Murphy, VP-international affairs for United, said yesterday in London. A recent American study predicts that AA-BA market share on the route would shrink from 61% today to 41% of a "larger pie." With roughly 40% fixed at the outset by law, "BA and American can rely on their own optimistic projections to expand their services at Heathrow," Murphy said.
Tsai Tuei, deputy director general of Taiwan's Directorate General of Telecommunications, was appointed director general of Civil Aeronautics Administration, succeeding acting DG Chang Kuo-cheng. Tsai, 49, holds a National Taiwan University doctorate in electrical engineering and has represented Taiwan often in international telecommunications negotiations.
All international airlines operating to and from India have decided jointly to increase fares 5% in response to the fuel price increase, nearly 13%, imposed on them last month by the Indian government, aviation industry sources said Monday. The fare hike was proposed and accepted unanimously last Friday at a meeting of the Board of Airline Representatives, the association of foreign carriers operating in India.
U.S. carriers generally fared worse in DOT's monthly consumer report for October, with America West showing the poorest record on consumer complaints. The carrier registered 30 complaints while carrying 1.585 million passengers, or 1.89 complaints per 100,000 passengers, DOT said. The rate was more than double America West's complaint rate of October 1995. Southwest had the lowest complaint rate at 0.10 per 100,000 passengers. Industry-wide, the 615 complaints about service on major airlines represented a 9% increase from September and a 19% gain from October 1995.
The chairmen of Iberia and Aerolineas Argentinas, Xavier de Irala and Manuel Moran, met with Argentine Economy Minister Roque Fernandez last week to discuss potential cooperation with American and British Airways. In an interview published by the Argentinean daily Clarin, the Spanish Industry and Energy Minister Josep Pique Camps said Spain intends to "seek alliances to boost commercially" Aerolineas and Iberia. The Spanish flag carrier holds 85% of Aerolineas Argentinas.
Aspen, Colo.-based Peak International has acquired Lone Star Airlines, whose chief financial officer, Allen McGinness, will become the carrier's interim president (Nov. 22). McGinness, who replaces beleaguered President Phil Trenary, said the acquisition will not change anything for passengers. "It's business as usual," he said. Peak International, which owns 100% of Lone Star, is an airline services company formed in 1994 that has been involved with Lone Star on the Dallas-Aspen and Denver-Aspen routes for the last 18 months.
American continued in November to experience declines in systemwide capacity, off 2.8%, and domestic revenue passenger miles, down 3%. Domestic capacity fell 3.5% and international capacity 1.1%. Systemwide traffic was down 1.4%. For the first 11 months, capacity decreased 1.7% systemwide and 2.2% domestically. For November, Latin America was the only region to gain in traffic and capacity, up 5.8% and 2.7%, respectively. The systemwide load factor was up 0.9 percentage points to 65.8%.
ValuJet's November traffic rose in terms of revenue passenger miles but fell 75% compared with last year's levels. While year-over-year comparisons are skewed because the current airline is less than half the size it was a year ago - enplaned passengers declined 72% - month to month, ValuJet's capacity is swelling and load factors are plummeting. Capacity in November totaled 138.3 million available seat miles, up 41% from October's 97.7 million ASMs.
DOT and FAA may respond this week to the City of Los Angeles's Dec. 2 letter (DAILY, Dec. 3) regarding the $31.1 million transfer of funds from Los Angeles Airport, a DOT spokeswoman said yesterday. FAA told the city earlier that failure to return the funds to the airport by Dec. 2 would lead to enforcement action.
Finnair's profits for the first six months of 1996 were cut in half because of higher fuel prices and flat growth in its international traffic. The pre-tax profit fell to 233.5 million markka (US$50 million) in the first half from 463 million in the same period of 1995. Net sales rose to 3.67 billion markka from 3.62 billion, but operating costs jumped almost 9% to 3.23 billion markka. The fuel bill increased by 60 million markka in the first half. "The full-year operating result will be clearly below last year's," said Finnair.
Australia's Ministry of Transport and Regional Development has established for the first three airports to be privatized price cap formulas intended to guarantee lower landing charges for airlines. The ministry proposed earlier this year to adopt formulas for Melbourne, Brisbane and Perth based on the consumer price index minus "X", a value to be determined later. The value for X now has been set at 4% for Melbourne, 4.5% for Brisbane and 5.5% for Perth.
After losing a $19.6 million judgment last week arising from a 1993 traffic accident blamed on its 40-foot gate information signs along Dallas/Fort Worth Airport's main roadway, American may turn off the signs as early as Thursday or Friday and remove them. American spokesman John Hotard told The DAILY yesterday that the airline "later this week will be looking at alternative means" of getting information on its two DFW terminals to passengers, and the signs will be turned off "once we determine it [the alternative] is viable."
Responding to competition from privately held new entrants, Malaysia Airlines is prepared to take immediate control of privately owned Malaysian regional carrier Pelangi Air, subject to approval of Pelangi Air's board.
The Senate majority and minority leaders and the leadership of the Senate Commerce Committee urged the Senate Finance Committee yesterday to make extension of the aviation excise taxes through fiscal 1997 the committee's "first effort in the 105th Congress." The taxes are set to expire Dec.
Airlines operating at Amsterdam Schiphol Airport said yesterday they will, beginning Jan. 1, pass along to travelers the Schiphol passenger service charge they currently are absorbing. Citing air fares that are "reduced drastically in real terms" and costs that have "risen disproportionately," the carriers said they can no longer include the charge as part of the fare. A passenger service charge of 18.65 guilders - about US$10.80 - will be applied on stopover and originating tickets, and a charge of 3.6 guilders will be applied to all direct transit tickets.
British Airways Express will take over the London Gatwick-Bremen route from Deutsche BA next March. The current Deutsche BA service is based on three flights a day using 50-seat Saab 2000s, but this will discontinue when the airline's fleet becomes an all-jet operation next year. City Flyer Express, BA's franchise partner, operating as British Airways Express will take over the service using 66-seat ATR 72s, offering business and economy classes.
Delta believes it flew more people Sunday than any airline on any single day in history. The Dec. 1 all-time one-day boarding of 358,805 was followed by 342,057 yesterday, Delta's second-best day ever. This means Delta transported the equivalent of the population of San Francisco in two days.
Top 25 Domestic City-Pairs Markets O&D Passengers Second Quarter 1996 1996 1995 Average Mkt Mkt Passengers Rank Rank City-Pair Per Day 1 1 Chicago - New York 8,267 2 2 Honolulu - Kahului 7,711 3 3 Los Angeles - New York 7,644
