Pearson Development Corp. (PDC) attorneys last week began their case in a Toronto court seeking C$523 million to C$662 million in damages from the Canadian government for cancellation of a Toronto Pearson terminal redevelopment/privatization contract. The consortium filed a claim in March 1994 after Prime Minister Jean Chretien killed a deal approved by the previous government for redevelopment of Terminals 1 and 2.
Hainan Airlines of China has signed a letter of intent to purchase 10 Metro 23s from Fairchild Aircraft, boosting its Metro fleet to 12. Hainan joins Asia Pacific Airlines of Kuala Lumpur, Malaysia, which has ordered four Metro 23s, as recent Fairchild customers (DAILY, Feb. 16). Hainan, which launched commercial service in May 1993 and took delivery of its first Metro 23 in September 1994, offers scheduled flights to 18 cities and is developing feeder traffic to and from secondary cities within China.
United will expand its service between Los Angeles and Kona and Maui June 6. The carrier said the new flights, coupled with its new second daily nonstop to Tokyo, show its commitment to Los Angeles. United left the Los Angeles-Kona market in 1989. Flights to Maui will increase from one a day to two. Both will be operated with 757-200 aircraft.
Delta may be within two months of a ratification vote on its tentative contract agreement with the Air Line Pilots Association - including reduced pay in some 737 markets facing low-fare competition - but a similar proposal at American has not gone far. A National Mediation Board mediator, who met last week with American's Allied Pilots Association and this week with the company, will determine when to schedule joint meetings.
Northwest and KLM are distributing travel booking software to "Gold" and "Preferred" WorldPerks members, providing them with information about products and services offered by the carriers. The software, WorldNetwork, uses CompuServe's online service and taps into the Worldspan reservations system.
American Society of Travel Agents officials have met with Hawaii Gov. Benjamin Cayetano to discuss their concerns about commission caps and the state's excise tax on agents' airline commissions. Hawaiian agents have been severely affected by the caps, given they usually profit from relatively higher-priced flights from the mainland. Hawaii also is the only state that taxes agents' commissions at 4%.
Florida is becoming the epicenter of a shakeout among Southwest, ValuJet and Delta. Southwest will overfly 11% of ValuJet's system, directly or indirectly, by yearend, calculates Steve Lewins of Gruntal Investment Research. Lewins thinks Delta will deploy its 25 lower-cost 737-200s "as a shield" to defend its Orlando operation but keep them out of Atlanta, where more capacity could damage yields.
FAA said it has earmarked "four to five programs" as tests of the new acquisition system it plans to present to Congress April 1, George Donohue, FAA associate administrator for research and acquisition, said yesterday (DAILY, Feb. 22). Donohue said he could not name the programs until he has met with Monte Belger, associate administrator for air traffic services. The programs "will test all aspects of this new acquisition system," Donohue said. "We are asking for a complete review of this new acquisition system within three years.
Western Pacific has issued a request for proposals on a fleet of new 30-passenger-class regional aircraft and is toying with the idea of operating its new regional network as a separate entity. It initially said it would contract the service out. Among the aircraft in the chase are the ATR 42-500, Dornier 328, Embraer Brasilia and the Saab 340BPlus.
Canadian Airlines International plans to serve Rome this summer from Montreal Dorval Airport. The new flights, which start June 15, will be operated with a 767 twice weekly through Sept. 15 under an agreement with Alitalia.
Delta Connection Comair will match Continental's $89 introductory fare on its new service between Greenville/Spartanburg, S.C., and Newark. Comair announced Feb. 7 that it would launch three daily Canadair Regional Jet roundtrips in the market April 1. Two days later, Continental said it would offer a third 737 trip between the two cities - with the $89 introductory fare. An undaunted Comair, citing its strong GSP customer base, said it would look for more point-to-point Regional Jet routes, such as the new Nashville-Toronto route that it will begin March 1.
Airlines Reporting Corp. said total travel agent sales processed in January were up 2% over the same month in 1995, to $4.614 billion. Domestic and international fares rose 10%. Domestic commissions fell 3% to $297 million, while international commissions were up 8% to $171 million. ARC notes that the 10% ticket tax and the $6 international departure tax expired at the end of December, and the January 1995 total sales figure includes the taxes, whereas January 1996 does not.
Sonderborg, Denmark-based Cimber Air has ordered three ATR 42-500 aircraft, boosting the company's fleet of ATR 42s to seven, Aero International (Regional) announced. The first aircraft will be delivered at the end of March, with the second in April and the third in early 1997, the aircraft manufacturing consortium said. Cimber Air operates on behalf of Lufthansa on domestic German routes and has a close relationship with SAS operating at Copenhagen.
ValuJet has chosen Mobile, Ala., and Fort Walton Beach, Fla., as its newest southern destinations from Atlanta in return for monthly cash payments and more than $2 million in marketing. The carrier has been courted for its low-fare service by several Florida destinations, including Pensacola and Panama City (DAILY, Feb. 12). It may announce more new cities in mid- March. A Mobile airport official said the airport has agreed to pay ValuJet about $700,000 over three years in monthly payments as an incentive for high-frequency, low-fare service.
Atlantic Coast earned a company record net profit of $12.9 million, or $1.44 per share, in 1995 after losing more than $25.1 million, or $3.67 per share, in the previous year. For the fourth quarter, the United Express affiliate posted a net profit of slightly more than $5 million, or 56 cents per share, after losing $2.7 million, or 40 cents per share, in the quarter ended Dec. 31, 1994.
Gruntal Investment Research said Aviall is undergoing "what appears to be a serious financial situation," and it reiterated its "underperform" rating of the company. "We suggest current liabilities of the remaining company may exceed current assets and current working capital may be negative," Gruntal said. Completing the sale of Aviall's engine overhaul business may take all of 1996, which "underscores our wariness," Gruntal said.
Moody's said it assigned a Prime-1 short-term rating to DFS Deutsche Flugsicherung, the government-owned provider of civilian and military air navigation services in Germany, in relation to its 500 million Deutschmark commercial paper program. Moody's based the rating on the constitutional obligation of the government to provide air navigation services in German airspace, the legal status of its 100% ownership of DFS and its implicit support of the company. It cited a pricing mechanism that mandates full recovery of ATC costs through fees.
Spirit Airlines will offer new nonstop flights from Detroit Metro Airport to Boston Logan April 15, coinciding with income tax day. Fares begin at $69 each way and do not require an advance purchase.
Northwest registered "strong dissatisfaction" at DOT's show cause order tentatively selecting USAir over the Minneapolis carrier's to operate new service between U.S. and Italy.
United is offering fare discounts for travel between Oklahoma City and Denver to the families of victims of the bombing of an Oklahoma City federal building who want to attend the trial of the alleged bombers in Denver. United will offer $108 roundtrip fares from June until the end of the trial. The carrier will reveal its specific procedures soon on how it will determine who is eligible for the fare.
Fourteen regional airlines during January registered a 25% traffic increase versus a capacity gain of 11.1%. For the first time, the sampling includes the four American Eagle carriers - Executive, Flagship, Simmons and Wings West. The January traffic statistics for Business Express were not available. As usual, Gulfstream International posted the highest growth in available seat miles and revenue passenger miles, up 85.8% and 88.4%, respectively. At the other end of the spectrum was a downsized Atlantic Coast Airlines with capacity down 10.8% and traffic off 3.3%.
Boeing said yesterday assembly has begun of the first wing components for the longer-range 777-200 increased-growth-weight version. It will have the same physical dimensions as the initial 777-200 but with a wing center section that carries 13,700 more gallons of fuel. Engine thrust for the General Electric, Pratt&Whitney and Rolls-Royce powerplants will increase from 77,000 pounds to 90,000, and range will go to 8,320 miles from 5,680.
DOT has tentatively awarded USAir authority to operate new service between Rome and Philadelphia. USAir won out over bids by Northwest and Delta for the service, which becomes available April 1.
U.S. National Carriers Advertising Expense Third Quarter 1995 % Of Total Passenger Systemwide Revenues Alaska $ 4,838,000 1.65 Aloha 1,702,048 3.50 American Trans Air 1,130,823 1.23 Carnival 1,120,917 1.94
