Lufthansa is moving forward with its effort to achieve €1 billion ($1.4 billion) in cost savings through the end of 2011, according to an internal letter to employees sent by Lufthansa Passenger Airlines Chairman and CEO Cristoph Franz.
Additional East Star Airlines debtors have applied to take over the troubled carrier despite the fact that China National Aviation Fuel Holding Co. and Shanghai YuField have made no progress in their appeals to acquire the Wuhan-based airline. The newly interested debtors include five CNAF subsidiaries and airports in Zhengzhou, Guangzhou, Wuhan, Nanjing, Qingdao, Shenzhen and Hangzhou.
Continental Airlines Chairman and CEO Larry Kellner will leave the airline at year end after five years at the helm and 14 with the Houston-based carrier and will be succeeded by President and COO Jeff Smisek, CO announced late yesterday.
Air Canada said all five of its domestic unions have ratified cost-neutral agreements on labor stability and pension relief following the International Assn. of Machinists and Aerospace Workers vote Wednesday. The union had rejected the deal two weeks ago ( ATWOnline, July 2).
International passengers traveling on premium tickets decreased 23.6% year-over-year in May, marking the 12th consecutive month in which premium traffic was in decline, IATA said yesterday, warning that a "de-globalization" may be occurring that could discourage international business travel and trade even as economies recover.
Singapore Airlines is retrofitting seven 777-300s with new first and business class seats and improvements to the economy cabin including new seat covers and IFE systems. It said the remainder of the 777 fleet will be upgraded "at a later date." First aircraft is due to enter service with the enhancements on July 22, with the rest introduced before year end.
American Airlines parent AMR Corp. said a "very difficult revenue environment" drove a second-quarter net loss of $390 million, narrowed 73.3% from a $1.45 billion deficit in the year-ago period when heavy noncash impairment charges dragged down the bottom line. But the loss actually was widened from a $298 million deficit last year absent special charges. The quarter was "obviously disappointing," Chairman and CEO Gerard Arpey said. "We've got to continue to anticipate a tough environment."
Virgin Atlantic Airways is asking passengers to register their disapproval of the planned increases in the UK's Air Passenger Duty, set for November 2009 and 2010 ( ATWOnline, Nov. 25, 2008). "The UK government has been quietly increasing APD by huge amounts and claiming it is an environmental tax. Yet, there's not a shred of evidence to suggest the £2 billion-plus currently raised is going towards environmental or sustainable projects," Virgin President Richard Branson said.
A Caspian Airlines Tu-154M crashed yesterday morning shortly after takeoff from Tehran, killing all 156 passengers and 12 crew onboard in the fourth major fatal commercial accident this year and the third in just a little over six weeks. Caspian Flight 7908 was on its way to Yerevan but slammed into the earth near Qazvin some 16 min. after takeoff, creating a 10-m.-deep crater, according to the Flight Safety Foundation's Aviation Safety Network. The 22-year-old aircraft "exploded on impact and disintegrated," it said.
Continental Airlines will record $44 million in special charges for the second quarter, $43 million of which comprises noncash impairments on owned 737-300/-500 aircraft and related assets ($31 million) and noncash charges related to the disposal of three -300s ($8 million) and "certain obsolete spare parts" ($4 million). CO decided one year ago to retire all -300s and a "significant portion" of its -500 fleet by January 2010 ( ATWOnline, June 6, 2008).
Air China expects its first-half profit to jump by more than 50% year-over-year from the CNY1.28 billion ($187.3 million) reported in the first six months of 2008. CA credited "stable growth of the domestic market" and lower fuel prices for the improvement. It transported 13.9 million passengers in the first five months of 2009, up 13.7% year-over-year, which included an 18.2% surge in domestic passenger boardings to 11.2 million. It also cited "favorable policy" from Beijing, cost control and gains on its fuel hedges.
Austrian Airlines Group yesterday said it agreed with all works councils to reduce personnel expenses by 5% from 2010 to 2015, saving the company €150 million ($209.6 million). "The details of the package are rapidly being negotiated by the social partners. It will not include any extra job cuts beyond the 1,000 posts already announced," AAG said ( ATWOnline, July 3).
Cathay Pacific Airways and Dragonair flew 6.67 billion RPKs in June, down 14.1% from the year-ago month. Capacity fell 9.1% to 8.67 billion ASKs, dropping load factor 4.5 points to 76.8%. Iberia flew 4.34 billion RPKs in June, down 5.1% year-over-year. Capacity fell 7.3% to 5.23 billion ASKs and load factor rose 1.9 points to 83%. EasyJet transported 4.1 million passengers in June, up 0.8% year-over-year. Load factor dipped 0.6 point to 86.3%.
Pet Airways, a pets-only airline operated by Omaha-based Suburban Air Freight, operated its inaugural flight Tuesday on a New York Republic-Baltimore-Chicago Midway routing with 35-40 pets onboard. The airline's Beech 1900 has had the seats and overhead bins removed, leaving space for pet carriers in the main cabin. It also will serve Denver Rocky Mountain and Los Angeles Hawthorne.
OAG said global airline passenger capacity cuts "are starting to stabilize," evidenced by 315 million seats on offer for this month, down just 1% from July 2008. VP-Market Intelligence David Beckerman said the figures, "show a clear and very welcome upward trend from the dramatic [capacity] declines we have seen in recent months. We can only wait and see if this outlook bears financial fruit in actual passenger numbers and airline load factors."
Singapore Airlines will begin operating the A380 to Melbourne on Sept. 29. The Victoria capital will be the second Australian city, and sixth overall, to which SIA flies the aircraft. Daily service will replace an existing 747-400 frequency, increasing seat capacity by 10% on the 21-times-weekly service. SIA currently has nine A380s in operation.
Nordic Aviation Capital, a lessor of turboprop transports, is opening an office in Singapore. It will be headed by VP-Sales and Acquisitions Mats Ericson, who joined NAC in May from Avion Aviation.
Japan Airlines' loss for the fiscal year ending March 31, 2010, originally expected to be similar to the ¥63.1 billion ($681.2 million) lost last year ( ATWOnline, June 16), may double if retirees do not approve pension reductions exceeding 50%. According to Bloomberg News, two-thirds of the approximately 9,000 pensioners must agree to the cuts, and a website operated by JAL's retirees said that 2,900 already have registered their disapproval.
US Airways will cut 600 ground positions at nine airports in response to declining revenue and the falloff of business demand, it said yesterday. Work will be outsourced to contractors at airports served primarily by regional partners operating as US Airways Express. US also said it will ask 400 flight attendants to take voluntary furloughs in order to prevent layoffs. "Today's economy demands we continue to look for ways to control costs," COO Robert Isom wrote in a memo to employees provided to ATWOnline.
Austrian Airlines Group will need €1 billion ($1.39 billion) in new capital if its pending acquisition by Lufthansa falls through, Chairman Peter Michaelis told shareholders yesterday at a Vienna meeting. The company has spent two-thirds of the €200 million loan from the Austrian government and is carrying more than €1 billion in debt, Reuters reported.
British Airways CEO Willie Walsh continued to maintain yesterday that the carrier is in a "fight for survival" and that "just hoping for old high-roller times to return is the road to oblivion" at the company's annual shareholders meeting in London.
Jetlink Express, a Nairobi-based regional, will take delivery of a BAe 146 this month on wet-lease from Albanian Airlines. Aircraft will be in use for six months to serve Kisumi, replacing a CRJ200 that will be unable to handle that airport's shortened runway during refurbishment. Albanian operates three BAe 146s but can spare one following its recent wet-lease of an MD-82.
Norwegian Air Shuttle reported consolidated net profit of NOK180.2 million ($27.6 million) in the second quarter, an impressive reversal from the NOK62.2 million loss incurred in the year-ago period. "I am very pleased with the company's performance. Despite operating in an industry facing large economic challenges, we deliver the most profitable second quarter in the company's history," CEO Bjorn Kjos said, noting that the carrier's "competitive cost base enables us to be profitable across our whole route network."
