Aggressive fuel hedging, a more favorable exchange rate, a booming domestic economy and tight fiscal management enabled Qantas to defy nearly every trend affecting the global airline industry and post a massive 44.1% increase in net profit to $A970 million ($845.1 million) for the fiscal year ended June 30, QF's new chairman, Leigh Clifford, attributed the result to "a strong revenue environment, which was supported by major investments in customer service and product. . .and sustained efforts to improve efficiency."
Russian airline alliance AiRUnion is facing significant financial troubles and having trouble paying its bills, to the point where aircraft at Moscow Domodedovo, which controls fuel distribution, are not being fueled on time.
Lazard has been hired by Air France KLM to advise it on a possible acquisition of Austrian Airlines, a Lazard spokesperson told Thomson Financial. Companies interested in purchasing state holding company OIAG's 42.75% stake in OS have until Aug. 24 to announce their intentions ( ATWOnline, Aug. 15).
Gate Gourmet finalized its acquisition of Inflight Logistic Services, a Sydney-based company offering services such as menu/service design, logistics and supply chain management, onboard point-of-sale solutions and cash management processes. ILS also supplies cabin cleaning and manages personal media players for inflight entertainment. Major customers include Virgin Blue, Pacific Blue, Polynesian Blue and Rex Regional Express. ILS recently won a long-term contract to handle Jetstar Airways' domestic catering beginning Nov. 12.
Malaysia Airlines and GMR Hyderabad International Airport signed an MOU this week to establish an MRO company at Rajiv Gandhi International capable of handling "all types of aircraft," including the A380. Financial details, ownership structure and timetable for launch were not disclosed.
Hainan Airlines said it expects its net profit for the first half of 2008 to "achieve a growth of over 50%" from the CNY189.7 million ($27.6 million) reported in the year-ago semester. It cited the "continuous appreciation" of the yuan and the "prosperous development of the domestic aviation industry" for the result. It is scheduled to release its first-half figures on Aug. 30.
Air New Zealand and key partners aim to demonstrate commercial aviation's potential to reduce carbon emissions by millions of tonnes annually with a Sept. 12 test flight between Auckland and San Francisco.
SriLankan Airlines reported a LKR4.9 billion ($45.4 million) profit in the fiscal year ended March 31, more than five times the LKR862 million posted in the prior year, according to press reports. Profit was driven by a LKR5.48 billion gain from a sale/leaseback transaction involving three A340s. Full-year revenue climbed 15.9% to LKR80 billion. Operating loss was LKR588 million as fuel costs soared 28% year-over-year. The airline business lost LKR6.1 billion, but the company made money with its ground handling (LKR3.3 billion), catering and duty-free sales segments.
Emirates President Tim Clark said he expects the increase in fuel prices to cost the carrier as much as $500 million this year. Speaking to la Repubblica, Clark said, "this year we expected profits to grow by about $500 million to nearly $2 billion, but the rise in crude [oil prices] already costs us more or less that amount. We too are enacting a cost reduction plan."
Aer Lingus Group appointed Babcock and Brown Air CEO Colm Barrington as chairman succeeding John Sharman effective next month. Barrington currently is a nonexecutive director of Dublin Airport Authority, from which he will resign before taking over at EI.
United Airlines will stop serving complimentary snacks to North American economy passengers effective Sept. 2 and will begin charging for meals in domestic business class (except for certain flights between New York and Los Angeles/San Francisco) and in transatlantic economy cabins on Oct. 1, according to a memo to flight attendants obtained by the San Francisco Chronicle and subsequently confirmed by a UA spokesperson. "These are difficult but necessary changes.
A Spanair MD-82 scheduled to carry vacationers to Las Palmas yesterday crashed on takeoff from Madrid Barajas' longest runway, 36L, and caught fire. Reports from the Spanish capital indicated that at least 153 occupants were killed in the accident. Spanish Development Minister Magdalena Alvarez said late yesterday that 19 of the 172 people (162 passengers, six working crew, four nonworking crew) onboard survived, according to the BBC and CNN.
European Commission extended the deadline for its inquiry into Air France KLM's proposed acquisition of Martinair by 10 working days due to "first phase commitments" offered to alleviate competition concerns. Original deadline was Aug. 25. KLM currently owns 50% of Martinair shares and intends to acquire the other 50% from Maersk ( ATWOnline, June 12, 2007).
Virgin Atlantic Airways confirmed reports that it is seeking to dispose of its 49% equity stake in Virgin Nigeria, the Lagos-based flag carrier it helped establish in 2004 and launch in April 2005. Nigerian institutional investors own 51%. "The intention has always been for the airline ultimately to be wholly owned by Nigerian investors. It is now time for Virgin Nigeria to go its own way with local shareholders," Virgin Atlantic President Richard Branson said, noting that VS "wishes to focus on growing its core long-haul business." It is in talks with potential purchasers.
JAL Group yesterday filed an application with the Japanese Ministry of Land Infrastructure, Transport & Tourism requesting that international normal interline fare rates be raised by 10% on flights to the Americas and by 5% on flights to other Asian destinations and to the Middle East and Africa.
Mesa Air Group reported a $3.7 million loss for the fiscal third quarter ended June 30, reversed from a $2.6 million profit in the year-ago period, and said it intends to sell its share in its Chinese regional joint venture Kunpeng Airlines back to its partner in the venture, Shenzhen Airlines. Operating revenue was up 4% year-over-year to $353.9 million but expenses climbed 9.3% to $357.1 million, resulting in an operating loss of $3.2 million compared to a $13.6 million profit a year earlier.
China Southern Airlines posted a net loss of CNY1.17 billion ($169.7 million) in the first six months of 2008, a significant reversal from the CNY62 million earned in the year-ago period. Operating revenue climbed 9.1% year-over-year to CNY26.78 billion against a 14% increase in operating expenses to CNY28 billion. CZ cited "various unfavourable factors including the US subprime mortgage crisis, ballooning inflation, stringent [domestic] monetary policies and natural disasters" as causes for the slower-than-expected market demand that impacted its results.
Shanghai Airlines earned a CNY23.4 million ($3.4 million) first-half profit based on domestic accounting standards, reversed from a CNY134.5 million loss in the year-ago semester, thanks to a CNY44.5 million government subsidy. It did not say what the subsidy was for, Bloomberg News reported. Instead it credited "the enhancement of marketing efforts and rationalization of the route network, as well as improving aircraft daily utilization" as key to the result. Operating revenue rose 26% year-over-year to CNY7.03 billion against a 22.8% lift in expenses to CNY7.12 billion.
Virgin Blue Holdings blamed soaring fuel prices and one-off product enhancement costs for its 54.7% drop in net profit to A$97.7 million ($85.1 million) for the fiscal year ended June 30. The result was slightly ahead of market expectations but management advised that the year ahead will be tough, although it still expects a positive result.
Northwest Airlines said yesterday that it has gained relevant government approvals to add the Delta Air Lines code to all of its transpacific flights, another step toward the planned merger of the two carriers. NWA also will add the DL code to its flights between Tokyo Narita and three Asian destinations. Expanded codesharing will take effect Aug. 30.
Qantas CFO Peter Gregg resigned his post effective Sept. 30 and will be replaced by Deputy CFO Colin Storrie, CEO Geoff Dixon announced. The move is considered to be the beginning of a change in leadership following the appointment of Jetstar Airways CEO Alan Joyce to succeed Dixon.
SilkAir CEO Chin Yau Seng told reporters that demand for its services remains robust with the exception of "a few blips," and that capacity growth for the fiscal year beginning April 1 now is expected to be 5%-7%, down slightly from the 8%-10% previously forecast. "So far we have seen continued strong support to a lot of our regional points," Chin said, noting that demand is strong from both leisure and business travelers despite high fuel prices.
Despite operating amid "the perfect storm" of high fuel prices and overcapacity, Malaysia Airlines yesterday reported its eighth consecutive quarterly profit, a MYR40 million ($11.9 million) figure that represented a 64.6% decline from the MYR112.8 million posted in the year-ago period.
News from Travel Technology Update: Ryanair said it will cancel all bookings made through screen-scraping Web sites. "We believe this is a quicker and more effective way of discouraging this unlawful activity and we hope that by getting rid of screen-scrapers we will speed up passenger processing times on Ryanair.com, as well as ensuring that Ryanair passengers are not paying unnecessary handling charges or higher fares to screen-scrapers," the carrier said.
Kingfisher Airlines will launch international service on Sept. 3 with a Bangalore-London Heathrow A330-200 flight, according to widespread press reports from India. Kingfisher acquired the operating certificate of Deccan Aviation, which this month will reach the mandatory five years of service required to fly internationally from India ( ATWOnline, March 31).
