US Airways announced that Merrill Lynch will purchase 19 million shares of US common stock in an underwritten public offering at $8.50 per share. Net proceeds after the underwriting discount and estimated offering expenses will be approximately $155 million to be used for "general corporate purposes," US said. ML will have a 30-day option to purchase an additional 2.85 million shares to cover overallotments. The offer is expected to close Aug. 19. Trading in US shares was halted yesterday.
Copa Airlines and Aero Republica parent Copa Holdings reported second-quarter net income of $30.4 million, down 1.5% from $30.9 million in the year-ago period, as its aggressive expansion continued to pay off even in the face of high fuel costs. Copa said the "strong results" were reflective of fast-growing revenue that allowed it to maintain "its position among the world's most profitable airlines" even as fuel costs rose by $37 million year-over-year. Operating revenue soared 26.6% to $297.9 million and operating income was $31.2 million, down 20% from $39 million last year.
UK NATS reported that the number of flights through UK airspace in July dipped 0.6% from the year-ago month, the first decrease since 9/11. All NATS centers showed negative or static results. The London Area Control Centre handled 0.1% fewer flights and its Manchester counterpart 5.9% fewer. Transatlantic departures and arrivals decreased 3.3% and transatlantic overflights grew 2.3%.
Ryanair, which said last month that it expected an annual result of between breakeven and a €60 million loss for the year ending March 31, 2009, now expects to do no worse than breakeven. CEO Michael O'Leary told the BBC yesterday that the LCC "will be one of the very few airlines in Europe to grow strongly this winter and at least to break even, if not to make a small profit." Ryanair lost €90.5 million ($134.8 million) in its fiscal first quarter ended June 30.
SITA will upgrade Cathay Pacific Airways' network infrastructure to ensure readiness for new applications under a four-year, multimillion-dollar deal announced yesterday. Upgrade will offer 425% more bandwidth and feature messaging, IP services, managed firewall and end-to-end service management with a 24/7 help desk and on-site team. Agreement also includes SITA's Airport Hub solution featuring shared IT systems at more than 100 airports.
Swiss International Air Lines and its Edelweiss Air subsidiary reached an agreement allowing LX customers to book seats on Edelweiss flights to 15 destinations from Oct. 26. Established in 1995, Edelweiss operates as an independent entity within the Swiss group with three A320s and one A330-200.
Spring Airlines is expecting 2008 earnings to fall short of the CNY70 million ($10.2 million) profit reported last year owing to the difficult operating environment. Speaking to China Business News, Spring Chairman Wang Zhenghua said the LCC posted "a little" profit in the first half. He said fuel costs have jumped to 50% of Spring's total expenses, up from 30%-40%. "In addition, labor costs are rising," he said.
Austrian Airlines Group majority shareholder OIAG launched the tender for its 42.75% stake in the flag carrier, informing potential bidders that they have until Aug. 24 to declare their interest, according to press reports ( ATWOnline, Aug. 13).
Porter Airlines, which launched Q400 service in October 2006 from Toronto City Centre Airport, is eyeing additional destinations in the US, the first of which likely will be announced in the fall. "Boston and Chicago [Midway] are on the top of the list but Washington [National] and Philadelphia are close behind," Porter President and CEO Robert Deluce told ATWOnline. "All of them are on our radar screen for the short term." The US destinations need to be within 500 nm. of Toronto and have enough O&D traffic to support the service, he added.
Brussels Airport traffic returned to normal yesterday after negotiators sealed a deal to end a strike by baggage handlers Flightcare and Aviapartner over pay and working conditions. The work stoppage, which started Sunday night, forced airlines to cancel, delay or divert flights in and out of BRU. Some 120,000 passengers were affected by the strike, the airport said, and the baggage backlog is estimated at 20,000 pieces.
Thai Airways posted a THB9.25 billion ($272.3 million) loss in the second quarter, widened from a THB430 million deficit in the year-ago period, on fuel costs and foreign exchange losses, according to a company statement cited by Reuters.
American Airlines flew 12.46 billion system RPMs in July, a 3.5% decrease from the year-ago month. Capacity fell 1.2% to 14.52 billion ASMs and load factor declined 2 points to 85.8%. Northwest Airlines flew 7.56 billion consolidated RPMs in July, up 3.9% year-over-year. Capacity increased 5.2% to 8.73 billion ASMs and load factor fell 1.1 points to 86.6%. British Airways flew 9.98 billion RPKs in July, down 3.5% from the year-ago month, against a 3.5% increase in ASKs to 13.17 billion. Load factor dropped 5.4 points to 75.8%.
American Airlines said yesterday that it will speed up deliveries of its 737-800s, taking an additional six in 2010 as it as it seeks to replace its MD-80s with more fuel efficient aircraft. The carrier now plans to take delivery of 36 -800s in 2009 and 40 in 2010. It has firm orders for an additional 11 737NGs to be delivered in 2013 and "continues to evaluate opportunities to accelerate MD-80 replacement with additional 737s," it said in a statement.
Pinnacle Airlines Corp. reported a second-quarter net loss of $11.4 million, a reversal from the $7.6 million profit reported in the year-ago quarter, on a 10% lift in operating revenue to $221.2 million.
Austrian government's Council of Ministers yesterday issued the contract for the privatization of Austrian Airlines Group to state holding company OIAG, entitling it to sell the entirety of its 42.75% stake ( ATWOnline, Aug. 11). The contract stipulates that Austrian interests must hold 25% plus one share. Merrill Lynch has been appointed as exclusive financial adviser in the potential sale of OIAG shares to a strategic partner ( ATWOnline, Aug. 1).
Air India parent National Aviation Co. of India signed a $214.1 million pre-delivery finance loan agreement for five 777-300ERs and three 777-200LRs scheduled for delivery in 2009-10. Bank of Scotland and Deutsche Bank are lead arrangers and ING Bank and Natixis Transport Finance are co-arrangers.
Ukraine International Airlines carried 936,500 passengers through July, an increase of 23% over the first seven months of 2007. Iberia flew 4.91 billion RPKs in July, down 1.4% year-over-year, against a 0.6% lift in capacity to 5.81 billion ASKs. Load factor fell 1.7 points to 84.6%. Aer Lingus flew 1.72 billion RPKs in July, up 8.1% from the year-ago month. Capacity rose 8.9% to 2.06 billion ASKs and load factor fell 0.7 point to 83.3%.
Qantas's safety record likely will fall under further scrutiny after it announced the withdrawal of six 737-400s from service while it cross-checked maintenance records relating to modification work carried out in one of its Australian facilities.
Gol and VRG parent Gol Linhas Aereas Inteligentes reported a second-quarter net loss of BRL171.7 million ($106.4 million), widened from a BRL35.4 million loss in the year-ago quarter, as it consolidated Gol and VRG's flight networks during the three-month period and contended with rising fuel costs.
Yemenia Yemen Airways reached a 10-year, $90 million fleet management agreement with Pratt & Whitney Global Service Partners. Deal covers IY's three PW4000-powered A310-300s.
SpiceJet secured approximately $100 million in funding from private investor WL Ross & Co. and Dubai-based Istithmar World Capital. The Indian LCC announced last month that it preferred Ross as a partner rather than Kingfisher Airlines ( ATWOnline, July 16). Istithmar's participation boosted the capital injection from the originally announced $80 million. Ross Chairman Wilbur Ross Jr.
TAM posted second-quarter net income of BRL50.2 million ($31.1 million), reversed from a BRL28.6 million loss in the year-ago period, riding a big boost in the domestic market driven by the replacement of 15 F100s with 13 A320s and three A321s and an expanded international network.
China Eastern Airlines board approved plans to launch a business aviation service company that will provide ground handling and maintenance for private and charter flights, among other services. The new venture will be a wholly owned subsidiary and will require an investment of CNY50 million ($7.3 million). The Shanghai-based carrier noted that it has no plans to purchase any business aircraft for the time being but it did not rule out the possibility of reconfiguring some of its existing aircraft.
Ural Airlines reported a RUB90.9 million ($3.7 million) loss in the first half of 2008, narrowed from the RUB246.4 million loss suffered in the year-ago semester, Russia's AK&M reported.
