Japan Airlines, coming off a more-than-$1 billion loss in its fiscal first quarter ended June 30, Friday announced a "new corporate organization structure" aimed at streamlining internal processes and improving customer service.
Malaysia Airlines MD and CEO Idris Jala resigned from the carrier upon being appointed to join the government as a cabinet minister in charge of a new Performance Management and Delivery Unit. CFO Azmil Zahruddin was named the airline's CEO effective immediately. Jala leaves MAS having overseen one of the more remarkable turnarounds in recent airline industry history. He joined the carrier as MD/CEO on Dec. 1, 2005, with little background in air transport, having been recruited from Shell Malaysia.
Iberia Group said it will ground three more A320s and postpone delivery of an A340-600 this year, bringing its full-year capacity reduction to 6% from 4.3% previously. IB already had parked five A320s and delayed delivery of an A340-600 from October 2009 to September 2010. It made the announcement as it reported a second-quarter net loss of €72.8 million ($103.8 million) compared to income of €21.2 million in the year-ago period.
Austrian Airlines Group, which is being acquired by Lufthansa (see item above), announced that it will reduce its management staff by approximately 45% from 347 currently, including cutting the number of VPs from 24 to 14. Together with 14 senior directors "who manage the staff functions and a number of selected specialist divisions," they will make up the top management of the group. "By taking this step, we are creating more efficient structures and simplifying our decision-making processes," Executive Board Members Andreas Bierwirth and Peter Malanik said in a statement.
Kale Consultants said it was chosen by IATA "as the prime technology supplier" for development of the association's "Simplified Interline Settlement initiative." SIS aims to standardize, facilitate and expedite interline billing and settlement in the airline industry, in large part by removing paper from the billing and settlement process. IATA Senior VP-Industry Distribution and Financial Services Tom Murphy said SIS will generate $500 million in annual savings for the industry.
Iberia announced the reorganization of its management structure including splitting its airline division into a Commercial and Clients division "focusing on generating income" and a Production Division "charged with enhancing profitability." The former will be led by Maintenance and Engineering Division Manager Manuel Lopez Aguilar and the latter by Production Management Unit head Juan Bujia. The former Airline Division led by Enrique Donaire has been dissolved.
SAS Group airlines flew 2.41 billion RPKs in July, down 13.6% from the year-ago month. Capacity fell 17.3% to 2.88 billion ASKs and load factor rose 3.6 points to 83.8%. SAS Scandinavian Airlines reported a 7.6% drop in July yield as it flew 2.22 billion RPKs, a 15.3% decrease. Capacity dropped 19% to 2.63 billion ASKs and load factor was up 3.7 points to 84.5%. Norwegian said July yield rose 4% year-over-year to NOK0.59 (9.75 cents) while unit revenue was up 6% to NOK0.52. The LCC flew 1.28 billion RPKs, up 10%, against a 9% lift in capacity to 1.46 billion ASKs.
Warning that it expects a "continuation of the current market trends," Aer Lingus yesterday reported a €73.9 million ($105.5 million) loss in the first semester of 2009, widened more than threefold from the €21.6 million lost in the year-ago period.
Virgin Blue Holdings blamed the tough operating environment, one-off charges and nonrecurring costs for a A$160 million ($133.2 million) loss in the fiscal year ended June 30, the company's worst-ever result and a reversal from the A$97.7 million surplus reported the prior year.
Virgin America narrowed its second-quarter loss to $15.8 million from the $64.4 million deficit suffered in the year-ago quarter, claiming that its "business model is right on track" and its service and amenities "provide an unrivaled value proposition at a time when consumers are more discerning than ever." Revenue rose 46.9% to $135.9 million against a 4.7% decline in costs to $147.3 million. Operating loss improved 81.6% to $11.4 million from $62.1 million in the second quarter of 2008.
Star Alliance said EgyptAir, South African Airways and TAP Portugal are the first members to use the alliance's newly developed Common IT Mobile Platform. The mobile services are being rolled out in stages and currently include flight schedules, real-time departures and arrivals and lounge information among other features. More interactive services such as frequent-flyer program status, online check-in and seat selection and mobile boarding passes with 2D barcodes will be made available in the coming weeks, Star said.
East Star Airlines may become the first Chinese carrier to go bankrupt following the Wuhan local court's rejection of China Equity Group's re-launch plan ( ATWOnline, Aug. 26). CEG Chairman Wang Chaoyong said the lack of an agreement on how to handle East Star's sizeable debt was the reason for the rejection. The troubled airline owes money to China National Aviation Fuel Co. and several airports.
Philippine Airlines yesterday said its $301.4 million loss in the fiscal year ended March 31 prompted an array of "extraordinary" cost-cutting measures including the offering of early retirement packages to employees. It also approved the reduction in par value of its shares to PHP0.2 (0.4 cent) from PHP0.8 and a 25% increase in its authorized capital stock to PHP20 billion. PAL's fiscal 2008-09 revenue rose 8.6% to $1.63 billion but expenses climbed 23.5% to $1.9 billion. Load factor dropped 3 points to 76.2%.
Shandong Airlines earned a CNY112.5 million ($16.4 million) net profit in the first six months of 2009, up 91.9% from the CNY58.6 million reported in the year-ago semester thanks to a recovery in domestic demand and government subsidies. Half-year operating revenue fell 3.6% to CNY2.34 billion against a 6.9% decrease in expenses to CNY18.56 billion. Passenger boardings climbed 13.5% to 3.5 million but cargo traffic fell 3% to 37,000 tons. Shandong's fleet comprises 12 737-300s, three 737-700s, 15 737-800s, eight CRJ200s and two CRJ700s.
Assn. of Asia Pacific Airlines' 17 member carriers transported 11.5 million passengers on international flights in July, down 7.8% from the year-ago month. International RPKs dropped 8.5% to 48.65 billion against a 6.5% cut in capacity to 63.5 billion ASKs, lowering load factor 1.7 points to 76.6%. "Traffic reductions may be easing, but a return to growth is still some way off," AAPA DG Andrew Herdman said.
US Airways and Continental Airlines yesterday announced they will follow American Airlines' recent decision to start charging $50 for a second piece of checked baggage on transatlantic flights ( ATWOnline, Aug. 24). As with AA, first checked bags will remain free.
EgyptAir reached agreement with US Export-Import Bank to help finance the purchase of five 737-800s and guarantee a loan from JP Morgan Chase. MS will take delivery of the first aircraft Friday in Seattle.
Australia's Rex Regional Express reported a A$23 million ($19.2 million) profit in the fiscal year ended June 30, down just 5.6% from the A$24.3 million earned the prior year and a result Executive Chairman Lim Kim Hai called "almost comforting" when compared to the ills facing the industry. Full-year revenue fell 3.7% to A$251 million, with passenger revenue declining 3.3% to A$204.3 million. Expenses were down 3.4% to A$220.2 million and pre-tax profit dropped 5.2% to A$30.8 million.
American Airlines parent AMR Corp. announced the signing of a letter of intent with HP "to develop a next generation Passenger Service System" for use by AA and American Eagle encompassing reservations, pricing and ticketing, revenue management, inventory, flight information and check-in. Value of the proposed investment was not disclosed. The news came a day after TAM said it had selected Amadeus to provide its Altea passenger system to the Brazilian airline ( ATWOnline, Aug. 26).
Air New Zealand said its quick decision to remove capacity in response to the economic downturn, along with its fuel hedges, were responsible for better-than-expected results in the fiscal year ended June 30, including a NZ$21 million ($14.4 million) profit that represented a 90% drop from the NZ$218 million earned the prior year.
CSA Czech Airlines suffered a $99.6 million loss in the first half of 2009 under international accounting standards and confirmed yesterday that it will reduce both its fleet and its workforce as it seeks to return to profit next year. The carrier reported a pre-tax profit of CZK500 million ($28.2 million) in 2008 but has failed to weather the industry crisis, suffering a drop in passenger demand that led executives to contemplate the cuts three weeks ago ( ATWOnline, Aug. 6).
KLM received its fourth new 777-300ER, part of an order for seven of the type. New aircraft features SkyTeam livery and will perform its first commercial flight on Aug. 28 to Nairobi. Boeing said the delivery will mark an in-service evaluation of a new chrome-free primer and paint, which it will apply to 14 aircraft initially "with the intention of making it a standard option in the future."
Gol filed a registration statement with the US Securities and Exchange Commission for a proposed global offering of preferred shares expected to gross BRL550-BRL650 million ($299.7-$354.1 million) "depending on market conditions." Gol said it intends to use the proceeds "for general corporate purposes and to strengthen its balance sheet, particularly its cash and cash equivalents position."
