Today's near-record energy prices will overwhelm a "gradually improving" airline revenue picture and create a liquidity challenge for some struggling US airlines, according to JP Morgan analyst Jamie Baker. In a report released Friday, Baker forecast that oil will remain at or above the $50-per-barrel mark for the rest of 2005 and fall only a few dollars to $47 per barrel in 2006. With most airlines lacking hedges, the result will be a significant cash drain and an approaching "liquidity crunch time" for America West, Continental Airlines and Delta Air Lines.
Air France signed a €1.2 billion ($1.54 billion) five-year syndicated multicurrency revolving credit facility with 19 international banks. According to the carrier, the facility will enable it to "strengthen its liquidity position and can be used for its general corporate purposes." It also will "diversify its sources of financing, in addition to the existing structured aviation finance deals."
Lufthansa Technical Training, a Lufthansa Technics subsidiary, opened a new EASA-approved training center in Manila. Courses range from basic maintenance up to advanced type-rated training and can be held either at the fully equipped facility or at any customer-requested location. Separately, LTT signed up SkyLink Airways for its blended training concept.
Air Luxor on April 9 began operating weekly seasonal service (through October) to Funchal and Faro from Paris, using A320 equipment. It already serves Funchal with two weekly flights to Paris.
Standard Aero earned Transport Canada approval to repair and overhaul all models of CF34-8 engines, which power CRJ700/900s and Embraer 170s. The company said the authorization is recognized by FAA and other regulatory authorities.
Alteon Training announced that an A320-300 full flight simulator at its Miami Training Center and a 737-300/-400/-500 full flight simulator with a Flight Dynamics Head-up Display at its Atlanta Training Center have received FAA Level C certification.
Air Wisconsin will end all flying on behalf of United Airlines over the next year, according to an internal document obtained by ATWOnline. The Regional currently flies 70 aircraft in the United Express feeder network, but last fall United issued an RFP to replace Air Wisconsin and on Monday announced that SkyWest and GoJet, a new subsidiary of Trans States Holdings, had been selected to take over some of those services and will operate a total of 30 70-seat regional jets ( ATWOnline, April 5).
Lufthansa Systems' e-ticketing solution was selected by Austrian Airlines. Separately, Austrian said it reduced the capital of its Lauda Air subsidiary from €24.7 million ($31.9 million) to €100,000 to reflect integration of Lauda's technical division and flight operations into the group. As a result, Lauda acts more or less as a marketing company for leisure flights.
Singapore and Bahrain have inked an open skies agreement. The pact was signed in Singapore yesterday by Bahrain Minister of Transportation Shaik Ali Bin Khalifa Al Khalifa and Singapore Minister for Transport Yeo Cheow Tong.
Ryanair carried 2.6 million passengers in March, up 20.1% over the year-ago period. Load factor climbed 2 points to 80%. For the rolling 12 months ended March 31, the airline carried 27.6 million and load factor was 84%.
Continental Airlines formally submitted an application to the US Dept. of Transportation for approval to operate nonstop flights from Newark to Shanghai. If approved, Continental would introduce flights in March 2007 using a 283-seat 777. Earlier this year, Continental was approved by DOT as a new entrant in the US-China air market and awarded rights to launch daily service from Newark to Beijing ( ATWOnline, March 21). Those flights will begin June 15. The new flights became available under the US-China aviation agreement signed last July.
United Airlines' motion to extend until May 31 the interim 11.5% pay reduction for all of its customer-contact employees, represented by the International Assn. of Machinists, was approved by the US Bankruptcy Court yesterday, the company announced. The interim reductions, which originally were approved in January, were scheduled to run through April 11. The court's decision also suspended May 1 pay increases contemplated in the IAM collective bargaining agreement.
Air Canada parent ACE Aviation Holdings late Wednesday said it successfully completed concurrent equity and convertible debt offerings ( ATWOnline, April 4), raising C$720 million ($595 million), C$120 million more than originally sought. The equity offering comprised 11.4 million Class A Variable Voting Shares and Class B Voting Shares priced at C$37 per share for gross proceeds of approximately $420 million. ACE raised a further C$300 million through the sale of 4.25% Convertible Senior Notes due 2035.
EasyJet will add another aircraft to its Bristol base for a total of eight and introduce three new routes from the airport to Inverness, Murcia and Pisa. The daily flights will begin July 7. In the last 12 months easyJet has launched nine new routes from Bristol, making it the LCC's largest UK base outside London.
A majority of US air travelers believe the FCC should not lift a ban on cellphone use during flights, according to a new study that was sponsored by the Assn. of Flight Attendants/Communications Workers of America and the National Consumers League and released yesterday. Of the 702 air travelers surveyed, 63% wanted to keep cellphone restrictions in place while 21% said it is time to let people talk on their phones during flights. The study, conducted by Lauer Research, has a margin of error of plus or minus 3.7%.
SAS Group flew 2.81 billion RPKs in March, up 4.5% over the year-ago period. Capacity increased 1.8% to 4.39 billion ASKs and load factor rose 1.7 points to 64%. For the three months ended March 31, RPKs were ahead 4.4% to 7.34 billion, ASKs jumped 5.2% to 12.47 billion and load factor declined 0.4 point to 58.9%.
Air France-KLM Group flew 14.95 billion RPKs in March, up 6.2% over the year-ago period. Capacity climbed 3.9% to 18.67 billion ASKs and load factor rose 1.7 points to 80.1%. AF reported a 2.4-point gain in load factor to 78.7% with traffic increasing 6% on a 2.7% rise in capacity, while KLM traffic grew 6.4% on a 6.1% capacity hike for a 0.3-point increase in load factor to 82.7%. For the fiscal year to date, consolidating AF over 12 months and KLM over 11 months, RPKs increased 8.9% to 169 billion, ASKs climbed 6.9% to 214.61 billion and load factor improved 1.5 points to 78.7%.
The launch of Jade Cargo International, the joint cargo carrier announced by Lufthansa Cargo and Shenzen Airlines last October ( ATWOnline, Oct. 25), has been pushed back to autumn. Operations originally had been expected to begin in the first quarter, "but with a change in Chinese law, it was not possible for us to start services with three A300-600Fs as we planned," Lufthansa Cargo Chairman Jean-Peter Jansen told ATWOnline.
ACSS, an L-3 Communications and Thales company, earned type certification for T2CAS, its combined traffic and terrain collision avoidance system, on all Airbus aircraft: A300-600s, A310s, A318s, A319s, A320s, A321s, A330s and A340s.
Goodrich's campaign to grow through acquisition has produced a company of sufficient mass that in the current business climate, "there is lots of business to supply us with good organic growth," President, Chairman and CEO Marshall Larsen told this website.
CSA Czech Airlines finalized an agreement to purchase six CFM56-5B6/P-powered A319s and six CFM56-5B4/P-powered A320s with deliveries scheduled from March 2006 to September 2008. The order was announced last October and the two parties agreed on the final text of the agreement late last month ( ATWOnline, March 30). "The purchase of aircraft is another step to fulfill the CSA strategy for the 2004-2014 period," Chairman and President Jaroslav Tvrdik said.
The European Regions Airline Assn. lodged a complaint with the European Commission Ombudsman charging the EC with releasing inaccurate and misleading information to airline passengers and the media regarding the new passenger rights legislation that took effect last month. ERA contends that posters, leaflets, videos, media and website materials issued by the Commission provide erroneous information regarding compensation for those whose flights are delayed or cancelled and that the information is harmful to airlines.
Lufthansa Cargo generated €33.5 million ($42.9 million) in operating profits during 2004, reversing a loss of €16 million in 2003, but showed red ink on the bottom line, posting a net loss of €39.5 million, which it attributed partly to one-time charges and a 38.4% hike in fuel costs. Comparisons with 2003 are complicated owing to the fact that in 2004 LHC consolidated accounts for all of its logistics business units within Lufthansa Group.
