United Airlines Chairman and CEO Glenn Tilton visited with the chairman of China Eastern Airlines this month to try to persuade the Shanghai-based carrier to join Star Alliance. CEA, which is unaligned, is acquiring current Star partner Shanghai Airlines ( ATWOnline, Aug. 31). "As the financial capital of China, Shanghai is an important destination for us," Tilton explained in an employee communication.
Lufthansa plans to exchange 45 of its 109 regional aircraft in the coming years, Passenger Airlines CEO Christoph Franz said in the staff magazine Lufthanseat. An LH spokesperson confirmed to ATWOnline that 50- and 70-seat aircraft like the CRJ200s and ATRs operated by Eurowings and CityLine will be replaced by 118-seat E-190s. "The smaller aircraft are not economical enough anymore compared to more modern aircraft in the 70/90-seat segment," the spokesperson said.
Southwest Airlines Pilots' Assn. board voted unanimously yesterday to endorse a new tentative labor contract with the airline and send it to membership for ratification. SWAPA members rejected a previous TA in June ( ATWOnline, Sept. 11).
United Airlines decided to return a leased 757 at the expiration of the current lease in October because it was unable to reach satisfactory renewal terms, it told employees in an internal communication. The aircraft is used on domestic routes and its departure will not affect UA's schedule or available spares.
Olympic Air, the new name of the privatized and restructured Olympic Airlines, officially will begin flying on Oct. 1 with 21 aircraft, increasing shortly to 32 (16 A319s/A320s, 10 Q400s, five Dash 8-100s and one ATR 42), according to press reports. Marfin Investment Group bought the carrier last spring ( ATWOnline, March 25), and executives said yesterday that Olympic has signed a codeshare agreement with Delta Air Lines with a view toward joining SkyTeam eventually, according to Reuters.
American Airlines parent AMR Corp. yesterday said it obtained $2.9 billion in additional liquidity and aircraft financing while announcing plans to further downsize operations at St. Louis and Raleigh/Durham and signing a letter of intent to firm options on 22 CRJ700s for American Eagle. Capacity taken from the aforementioned airports will be spread among AA's major hubs and focus cites: Dallas/Fort Worth, Chicago O'Hare, Miami, New York JFK, LaGuardia and Los Angeles. AA yesterday also said it chose GEnx-1B engines to power up to 100 787-9s it expects to order from Boeing.
Air France is working to form a committee of 5-6 members that "will have a look into the internal practices and the decision-making processes having an impact on the security of our flights," a spokesperson told ATWOnline yesterday. The airline is assessing its internal safety practices in the wake of the May 31 A330-200 accident and subsequent complaints from its pilots. The Wall Street Journal reported yesterday that AF's SkyTeam partner Delta Air Lines may be represented on the committee.
FedEx Corp. reported a $181 million net profit in its fiscal first quarter ended Aug. 31, down 53% from the $384 million earned in the year-ago period, as operating income at its FedEx Express segment plunged 70% to $104 million.
Spirit Airlines yesterday was assessed a record $375,000 civil penalty by the US Dept. of Transportation "for failing to comply with rules governing denied boarding compensation, fare advertising, baggage liability and other consumer protection requirements," the agency said.
Macquarie Airports will sell its 35.5% stake in Bristol Airport to the Ontario Teachers' Pension Plan for £128 million ($211.7 million). MAp also will purchase an additional 3.9% share in Copenhagen Airports from OTPP for DKK570 million ($111.9 million), raising its stake to 30.8%. MAp said the transactions, subject to EU clearance, will result in net cash inflow of some A$120 million ($103.3 million) and should be concluded before year end.
Cathay Pacific Airways yesterday announced two transactions designed to increase its liquidity: The divestment of a stake in Hong Kong Aircraft Engineering Co. and a sale-and-leaseback deal with BOC Aviation. CX will sell its 20.7 million shares in HAECO, or 12.5% of its holding, for approximately HK$1.9 billion ($245.3 million), or HK$91.83 per share, to Swire Pacific. The deal is subject to approval of CX's independent shareholders and would reduce its stake in the MRO provider to 15%. Swire's would increase to 46%.
Southwest Airlines yesterday moved to clarify its international future, stressing that it "does not have any plans to fly distant, long-haul international flights at this time or in the near future."
SAS Group airlines flew 2.24 billion RPKs in August, down 17.1% from the year-ago month. Capacity dropped 20.5% to 2.94 billion ASMs and load factor rose 3.1 points to 76.1%. SAS Scandinavian Airlines flew 2.05 billion RPKs, down 18.1%, against a 21.9% cut in capacity to 2.66 billion ASMs. Load factor rose 3.5 points to 77.1% and yield was down 3.2%. Air Berlin said August unit revenue rose 12% year-over-year to 6.21 euro cents (9.08 cents). It transported 2.7 million passengers, down 3.7%, and load factor rose 1.1 points to 84%.
Finnair and the Finnish Flight Attendants Assn. reached a labor stabilization agreement valid from Oct. 1 through Dec. 31, 2010, covering the €12.3 million in cost cuts targeted by the airline. Among the terms are a 5% salary cut during the period and cancellation of incentive bonuses. The deal also includes a "pay-back" stipulation depending on Finnair's 2010 and 2011 results. The carrier said the terms "are not easy, but they are necessary. . .We reached an outcome by which redundancies will be avoided."
United Airlines expects third-quarter consolidated passenger RASM to fall 15.8%-16.8% year-over-year to 10.83-10.96 cents, while mainline unit revenue should decline 17.8%-18.8% to 9.91-10.03 cents, a slightly slower rate than the 19.5% plunge reported in the second quarter. Consolidated system capacity is forecast to fall 5.9% to 36.97 billion ASMs, with load factors rising as consolidated RPMs slip just 3%-4% to 31.09-31.41 billion. Mainline system traffic is expected to drop 5.4%-6.4% to 27.3-27.6 billion RPMs against an 8.4% cut in capacity to 32.14 billion ASMs.
Delta Air Lines is planning a private debt offering of $500 million in aggregate principal amount of senior secured notes due 2014, it announced yesterday. It said it would use the proceeds, along with initial borrowings under proposed new senior secured credit facilities, largely to repay all outstanding debt under Northwest Airlines' senior corporate credit facility. The notes will be secured by DL's Pacific route authorities, slots and gate leases, which also wil constitute the collateral for the new credit facilities.
Aeroflot CEO Vitaly Savelyev said yesterday that the carrier expects to conclude 2009 in the black but that it plans to cut 2,000 jobs over the next six months and is evaluating a reduction of a further 4,000. "The trend is still going toward a decline," he said at an investment conference, according to Reuters. SU employs some 15,500. Savelyev also said the airline's interest in pursuing tie-ups with European carriers may be a thing of the past ( ATWOnline, May 5). "No one wants Aeroflot there.
KLM will equip its entire intercontinental fleet with a new "comfort zone" in economy cabins, offering passengers up to 10 cm./4 in. more legroom and back supports that can recline twice as far as standard seats. The carrier's 777-200ERs and 747s offer 31-in. pitch in economy and its A330s 32 in. The comfort zone will be located at the front of the cabin and will be available starting in December. Each widebody will be fitted with 35-40 of the new seats, a spokesperson told ATWOnline. The service in economy comfort will be identical to standard economy.
AirAsia raised MYR505.4 million ($144 million) through the sale of 380 million new shares representing 16% of its existing share capital, Reuters reported.
Declaring that the situation facing the world's airlines "has never been more difficult," IATA DG and CEO Giovanni Bisignani said yesterday in Washington that the airline industry now is expected to lose $11 billion this year, a deterioration from the association's forecast of a $9 billion loss issued at its AGM in early June.
Niki plans on ramping up its expansion plans following the bankruptcy of SkyEurope Airlines and Austrian Airlines' network reduction, with President Niki Lauda telling ATWOnline, "We will increase our fleet from the current 12 to 16 aircraft next year." The LCC will add a third daily Vienna-Frankfurt frequency in November and a third daily frequency to Paris Charles de Gaulle by summer 2010. New daily flights from VIE to Bucharest Otopeni, Sofia and Belgrade will start next February and capacity on existing routes will be increased by adding larger aircraft.
ARINC said Air China, Air Macau, Asiana Airlines, Cathay Pacific Airways, China Southern Airlines, Dragonair and Korean Air signed up to use its AviNet Airport wide-area network service, which is available to carriers using its Muse common-use passenger systems.
SESAR Joint Undertaking signed contracts with several airlines and airline associations to engage their technical experts in developing Europe's new and long-overdue Air Traffic Management system. "It is essential or even vital for the success of SESAR that the expertise of the airlines is integrated as from day one of the development phase," Executive Director Patrick Ky said.
Japan Airlines said it plans to cut 14% of its workforce, or nearly 7,000 jobs, over the next three years, part of an ongoing restructuring that it indicated will include a tie-up with a foreign investor it hopes to identify next month.
Cathay Pacific Airways and Dragonair flew 7.89 billion RPKs in August, a 1.9% rise from the year-ago month. Capacity fell 5% to 9.39 billion ASKs, lifting load factor 5.7 points to 84.1%. Iberia flew 4.56 billion RPKs in August, down 6.5% year-over-year, against a 4.4% cut in capacity to 5.53 billion ASKs. Load factor fell 1.8 points to 82.4%. LAN Airlines flew 2.51 billion RPKs in August, a 4.4% increase year-over-year. Capacity rose 7.4% to 3.28 billion ASKs and load factor slipped 2.2 points to 76.5%.
