Air India parent National Aviation Co. of India Ltd. is expected to report a loss of approximately INR50 billion ($1.02 billion) for its fiscal year ended March 31, some 25% more than the figure targeted last month, Indian Civil Aviation Minister Praful Patel informed the national parliament's upper house yesterday. He wrote that NACIL's deficit is "largely due to high operating expenses, which have been compounded due to the present economic recession resulting in a drop in passengers," in addition to high fuel prices and debt servicing, the Press Trust of India reported.
Austrian Airlines Group yesterday confirmed that its Tyrolean Airways subsidiary, which operates under the Austrian Arrows brand, will reduce its fleet from the current 55 aircraft to 41 over the next year ( ATWOnline, July 7). A spokesperson told ATWOnline that AAG will phase out 50-seat CRJs, which no longer are economical due to the decline in business demand, especially to Eastern Europe. All 10 CRJs and four of 14 Dash 8-300s will be removed. "This will affect a total of 400 fulltime employees.
British Airways plans to cut summer and winter capacity by an additional 1%, ground six additional aircraft next year and defer its A380 deliveries, while some 2,000 employees represented by Unite have "overwhelmingly rejected" the airline's proposed job cuts ahead of Wednesday's talks mediated by the UK Advisory, Conciliation and Arbitration Service.
Ryanair CEO Michael O'Leary found himself in the headlines again yesterday after telling Sky News "We might take out the last five or six rows [of seats] and say to passengers, 'Do you want to stand up? If you do, you can travel for free'." O'Leary said he has asked Boeing to look at converting or producing aircraft with "vertical seating" and asked, "Why is this any different to what happens on trains where you see thousands of people who cannot get a seat standing in the aisles?"
American Airlines flew 10.89 billion system RPMs in June, an 8.1% decrease from the year-ago month. Capacity dropped 7.8% to 12.79 billion ASMs and load factor slipped 0.3 point to 85.1%. Continental Airlines said June consolidated and mainline RASM fell an estimated 19.5%-20.5%. It flew 8.07 billion consolidated RPMs last month, down 6.5% year-over-year. Capacity dropped 7.8% to 9.51 billion ASMs and load factor rose 1.1 points to 84.8%.
Mesa Air Group announced that the US Court of Appeals upheld an injunction against Delta Air Lines preventing it from canceling Mesa subsidiary Freedom Airlines' contract to fly 22 ERJ-145s for Delta Connection ( ATWOnline, Oct. 22, 2008). Delta cited operational problems, but the court ruled, "The evidence showed that Delta induced Mesa to agree to Delta's coordinated cancellations by promising not to count such cancellations against it," Reuters reported.
Air Jamaica's rumored sale to Spirit Airlines owners Indigo Partners and Oaktree Capital has not been finalized, airline and government officials told The Jamaica Observer. "We are still talking to interested parties and the matter has not yet gone to Cabinet," a JM board member told the paper, while a government official said, "There has been no sale as yet. The recommendation still has to go to the Cabinet and the board of Air Jamaica before a decision is taken."
Cargo B Airlines halted operations last week as it ran out of cash. The Belgian carrier launched in October 2007 and flew to Africa and South America with two new 747-400Fs. "Volumes held up well, but we could not secure sufficient financing to support the introduction of the second 747 which was delivered half May," President and CEO Robert Kuijpers said. Lessor Nippon Cargo Airlines repossessed the aircraft. The company will be liquidated.
Aon Corp. released a report warning that the commercial aviation industry "is likely to see insurance premiums rise significantly for the rest of the year and potentially into the next" as insurers suffer heavy losses related to the recent accidents near Brazil, Comoros and Buffalo. "If the rest of 2009 follows the 13-year average pattern for losses, and discounting 2001, the year will be the most expensive ever seen in the airline insurance market," it said, with claims potentially surpassing $2.2 billion.
Lufthansa plans to announce details of an expanded cost savings program by the end of the month that could extend the current €300 million ($419.2 million) target "to up to €1 billion," a source close to LH management told ATWOnline.
SkyEurope Holding last week announced the departure of SkyEurope Airlines Chairman and CEO Jason Bitter by "mutual agreement." He was replaced by former Vice Chairman and CFO Nick Manoudakis. The LCC is operating under creditor protection ( ATWOnline, June 24).
Gulf Air named former Royal Jordanian President and CEO Samer Majali as its new chief executive, replacing Bjorn Naf. Majali announced his unexpected resignation from RJ last week, telling ATWOnline that, "after 30 years at the airline and eight years as chief executive, I decided it was time for me to move on" ( ATWOnline, June 30).
SpiceJet reported a INR78 million ($1.6 million) loss in the fiscal fourth quarter ended March 31, narrowed from a INR1.24 billion deficit in the year-ago period. The New Delhi-based LCC did not provide its full-year result. It lost INR180 million in its fiscal third quarter ( ATWOnline, Feb. 26). Fourth-quarter operating revenue rose 4.4% year-over-year to INR3.99 billion on a 10.3% increase in passenger numbers to 1.4 million. It said "overall aviation demand" in India fell 13%.
Vueling Airlines and Clickair said they will complete their "merger of equals" on July 9. The new carrier will use the Vueling name and Iberia will hold 45.9%, Hemisferio/Planeta 14.3% and Air Nostrum parent Nefinsa 4.2% ( ATWOnline, June 30). VY will operate 35 A320s (18 former Clickair) on 92 routs to/from 42 destinations in 18 countries. "The new Vueling must deliver a three-year plan to the board in October and a zero-growth plan is unlikely to be acceptable," CEO Alex Cruz said.
Austrian Airlines Group said yesterday that it will need to cut an additional €200 million ($281.6 million) in costs and will slash 1,000 jobs to help it achieve the savings target.
GECAS and flydubai reached a sale-and-leaseback agreement covering four 737-800s scheduled for delivery in the second half of this year (two this month, one in October and one in December). Aircraft are worth $320 million. Flydubai CEO Ghaith Al Ghaith said the financing is the first secured by the startup from outside the UAE. The airline expects to operate six aircraft to "around" 14 destinations by year end. Flydubai ordered 50 -800s at last year's Farnborough Airshow ( ATWOnline, July 15, 2008).
Lufthansa CEO-Group Airlines and Corporate Human Resources Stefan Lauer was appointed chairman of the six-member board of directors at bmi effective yesterday. He succeeds founder Michael Bishop, who is leaving the board. LH Manager-Hub Development and Capacity Management-Frankfurt also was named to the board, joining Lauer, CEO Nigel Turner and Deputy CEO Tim Bye as executive directors. Lufthansa's takeover of bmi was approved last week ( ATWOnline, June 23).
GE Aviation said it "successfully completed a customer trial of its ClearCore engine wash effluent collection system" on a Virgin Atlantic Airways CF6-80C2-powered 747-400 at London Heathrow. According to GE, ClearCore will be offered as either an effluent collection system working with "existing front-end wash equipment" or as a complete wash and collection system.
Virgin Atlantic Airways CEO Steve Ridgway said yesterday that the carrier will cut its winter capacity by 7% year-over-year, putting up to 600 jobs in jeopardy. "The outlook for the industry is as bleak as ever and all airlines are having to shrink their businesses," he said, according to press reports. "We will look to minimize the number of compulsory redundancies and ensure we treat our staff as fairly as possible." VS's London Heathrow-Chicago O'Hare service will be suspended, while flights to Hong Kong will be halved.
British Airways CEO Willie Walsh said he remains committed to the A380 and "could make a case to take this capacity earlier than scheduled." BA placed an order for 12 A380s in September 2007 as part of its long-term fleet modernization, with deliveries beginning in 2012. "There is a big cost reduction compared to the 747s [we currently operate]," he said yesterday. "With fuel prices over $70 and maybe heading to $100 a barrel the difference in unit cost becomes even more distinct," he told ATWOnline during a press conference at the SITA Air Transport IT Summit in Cannes.
Shanghai Airlines hopes to maintain its membership in Star Alliance even after its merger with China Eastern Airlines, which most likely will join SkyTeam, Chairman Zhou Chi said. He noted that Shanghai needs to discuss the matter with Star airlines. "Also, whether we can maintain it or not will be up to which global airline alliance CEA joins," he said. CEA Chairman Liu Shaoyong has said internally that the carrier prefers SkyTeam, which already includes China Southern Airlines.
ANA raised its firm 787 commitment to 55 aircraft from 50, according to a document released yesterday detailing the company's plan to issue 575 million new shares worth an estimated ¥182.62 billion ($1.9 billion) that will be used largely to finance new aircraft.
