Southwest Airlines Chairman and CEO Gary Kelly last week strongly rejected Wall Street advice that the LCC begin charging for checked baggage to generate more revenue. During a conference call to discuss SWA's third consecutive quarterly loss, multiple analysts pushed Kelly to follow other US carriers and implement baggage fees. But he insisted the move would drive away customers. "The bottom line assessment is we believe we're having a meaningful impact [telling consumers] that we are alone in not charging bag fees and that [impression] is increasing our demand," Kelly explained.
Airbus said it "achieved a significant maintenance cost improvement due to the optimization of scheduled maintenance program intervals" for the A330/A340 family. The A check interval has been extended from 600 to 800 flight hr. and the heavy maintenance check from 10 years to 12. The company said that as a result, operators typically will need to perform five A checks per year rather than seven based on "typical utilization" of 4,400 flight hr. per year.
Shenzhen Airlines reported a first-quarter net profit of CNY160 million owing to a strong rebound in the domestic market; the year-ago result was not available and the carrier did not disclose its first-quarter revenue, expenses, passenger or cargo traffic. Owing to double-digit growth in the domestic market, Chinese carriers posted a collective net profit for the quarter of CNY1.78 billion, according to CAAC.
Nice Cote d'Azur Airport and Air France, in partnership with Amadeus and IER, are trialing a new "Pass and Fly" boarding device through Oct. 30 on the Nice-Paris Orly route. It is being offered to members of NCE's Club Airport Premier program and AF's loyalty program.
Malev Hungarian Airlines last week named Martin Gauss, who has been working with the carrier as a consultant, as its new CEO. Geza Vehervary, who had been holding the position on an interim basis, will remain COO. Gauss was a 737 pilot at British Airways subsidiary Deutsche BA in the early 1990s before entering management. He was named MD of dba in 2004 and remained in the post after its 2006 merger with Air Berlin. He became CEO of Cirrus Airlines in October 2007 and left to become a consultant in June 2008.
Blue Wings' future is up in the air again following a threat from majority shareholder Alexander Lebedev to "probably file for bankruptcy. . .to make a point that it is the German government's fault." Speaking to Bloomberg Television, Lebedev said the LBA still has not reissued Blue Wings' operating license and that the suspended carrier has lost some €25 million ($33.1 million) this month ( ATWOnline, April 8).
Shanghai-based Spring Airlines plans to order 30-50 aircraft from Airbus despite the economic downturn, Chairman Wang Zhenghua said. Wang noted that the fleet expansion plan still requires CAAC approval, which is not a given considering the regulator's stance that Chinese carriers should cancel or delay aircraft orders ( ATWOnline, Dec. 19, 2008).
Gulf Air officially turned its eight 787 options into firm orders, lifting its commitment to the next-generation widebody to 24 and giving Boeing its first 787 orders this year. The manufacturer recorded the deal on its Orders and Deliveries website this week even though the Bahraini carrier had committed to the extra eight aircraft last summer ( ATWOnline, Sept. 5, 2008).
JetBlue Airways announced that industry veteran Russ Chew, who was brought onboard after a weather-related operational meltdown two years ago ( ATW, October 2007), will "transition" from his role as president and COO to that of a senior adviser. Senior VP-Airports and Operational Planning Rob Maruster has been promoted to COO and CEO Dave Barger will add the title of president, both effective June 1.
Air China joined its "big three" rivals in suffering a significant 2008 loss, reporting a CNY9.15 billion ($1.34 billion) deficit under Chinese accounting standards that marked a reversal from the CNY3.7 billion profit in the previous year.
After four consecutive years in the black, Royal Jordanian suffered a JOD23.4 million ($32.8 million) net loss in 2008 as it absorbed JOD46.7 million in fuel hedge losses after reporting a JOD20.4 million profit in 2007. Operating revenue rose 29% to JOD703 million on a 14.1% increase in passenger numbers to 2.7 million. Yield grew 11% due to the increased ticket prices necessitated by soaring fuel costs. RJ's fuel bill jumped nearly 73% to around JOD285 million. It posted an JOD18.7 million profit excluding taxes and hedge losses.
Eroding international premium traffic showed no signs of recovery in February, plunging 21.1% year-over-year following January's 16.7% drop, IATA reported. International economy traffic also fell, lowering 8.3% in February after a 4.7% dip in January. But it is the steep slide in demand for premium tickets that truly has shaken the global airline industry ( ATWOnline, March 18).
SuperJet International, the Sukhoi/Alenia Aeronautica joint venture, received EASA Part 145 certification from ENAC allowing it to perform aircraft maintenance, completion and customization work. The Venice-based marketing, customization and support company for the Superjet 100 said it hopes to receive Part 147 training certification and Design Organization Approval, essential to the design and development of VIP and cargo variants, by year end. That certification also will enable it to carry out line maintenance on A320s at Venice.
Southwest Airlines' stretch of unprofitability continued with a first-quarter net loss of $91 million, reversed from a $34 million profit in the year-ago period and the LCC's third consecutive quarter in the red, leading it to initiate a "systemwide voluntary early-out program" as part of an effort to "align headcount to current capacity."
Ryanair confirmed that TUI UK agreed to stop "screenscraping" its website in settlement of legal proceedings filed against it. The English High Court approved the cease-and-desist agreement that was signed by TUI on March 26 ( ATWOnline, Aug. 19, 2008).
SkyTeam yesterday signed a preliminary agreement outlining Vietnam Airlines' "intentions to undertake exclusive discussions" to join the group next year, which would bring the alliance back to 10 members following the departure of Continental Airlines on Oct. 24. VN would be SkyTeam's third Asian member after co-founder Korean Air and China Southern Airlines, which joined in 2007 ( ATWOnline, Nov. 16, 2007). The Vietnamese press flagged the invitation Tuesday.
Lufthansa informed the European Commission formally of its plans to acquire Chairman Michael Bishop's 50%-plus-one-share stake in bmi, lifting its holding in the UK carrier to 80% ( ATWOnline, Jan. 14). The EC set a May 14 provisional deadline for its initial review. The regulator also is reviewing Lufthansa's planned takeover of SN Airholding, parent company of Brussels Airlines.
China Eastern Airlines reported a CNY13.93 billion ($2.04 billion) loss in 2008, according to domestic accounting standards, a reversal from a CNY604 million profit net profit reported in 2007. Its loss under international accounting standards reached CNY15.26 billion. Operating revenue fell 4% year-over-year to CNY41.84 billion (domestic accounting standards) while expenses climbed 14% to CNY43.08 billion, an increase attributable mainly to a 22.3% jump in fuel costs to CNY18.49 billion.
Air France KLM Group yesterday confirmed reports that it could cut up to 3,000 jobs in the current fiscal year that started April 1 and the 2010-11 fiscal year in response to falling demand.
Naverus signed an agreement with Sichuan Airlines to provide tailored Required Navigation Performance-based procedures at Lhasa. Naverus also will assist Sichuan in obtaining regulatory approval to fly the procedures with its fleet of A319s.
GE Aviation said US FAA certified the flight management system software Update 10.8 for 737NGs. The FMS 10.8 update is standard fit for all 737 production aircraft from February. According to GE, it provides improved operation and increased navigation data base size and supports the blended winglet installation on all 737s. It is compliant with RNP standards and provides output of aircraft 4-D trajectory.
Qantas CEO Alan Joyce called for an overhaul of Australia's 10-year depreciation policy, which puts the airline at a significant disadvantage compared to carriers like Singapore Airlines, which has a three-year schedule. "All we want is a level playing field," he told ATWOnline yesterday.
Sun Country Airlines soared to an $8.1 million net profit in the first quarter, reversed from an $8.3 million loss in the year-ago period, thanks to "significant year-over-year gains in charter and ancillary revenue" and an 8.3% rise in passenger unit revenue to 8.31 cents. It began charging for the first checked bag last October ( ATWOnline, Sept. 8, 2008). Its first-quarter operating profit of $9.8 million was a company record.
SkyWest Inc., parent of regionals SkyWest Airlines and Atlantic Southeast Airlines, said it will report a "lower than. . .previously anticipated" first-quarter profit of $4.5-$7.5 million. It earned $29.2 million in the first three months of 2008. The company said inclement weather in Atlanta and the maintenance-related grounding of 60 ASA CRJ200s resulted in the cancellation of some 750 flights, costing an estimated $7.6 million in pre-tax revenue.
American Airlines parent AMR Corp. posted a first-quarter net loss of $375 million, 10.1% worse than the net deficit of $341 million in the year-ago period, citing "declining revenues, fares and traffic."
