American Airlines and Aircell yesterday tested their inflight Internet product on two 767-200 flights between New York JFK and Los Angeles, while the carrier announced that its fourth-quarter capacity cuts will include cessation of service at eight airports.
Lufthansa yesterday said it still expects its 2008 operating profit to match the €1.38 billion ($2.15 billion) reported in 2007 despite an economic environment that "represent[s] a considerable challenge for the airline industry." It expects fuel costs to reach approximately €5.6 billion this year but is confident "that the demand for mobility will continue to increase and that despite fluctuations air traffic will carry on growing." It said "efficiency gains" and cost cuts, along with surcharges, will soften the fuel impact and that increasing partnerships with other carrie
United Airlines flew 9.8 billion RPMs in May, down 4.1% year-over-year, against a 1.7% decline in capacity to 11.87 billion ASMs. Load factor slipped 2 points to 82.6%. US Airways Group consolidated passenger RASM rose 2%-4% in May compared to the year-ago month. Consolidated traffic grew 0.3% to 5.58 billion against a 0.1% fall in ASMs to 6.83 billion. Load factor was up 0.3 point to 81.8%.
Chinese airlines carried 15.4 million passengers in May, down 1.1% year-over-year, as the devastating Sichuan Province earthquake and surging oil prices impacted demand, according to CAAC. Air China passenger boardings dropped 10.7% to 2.7 million and load factor fell 4.5 points to 71.3%, which CA attributed to the earthquake and the dedication of some capacity to relief efforts. China Eastern Airlines saw passenger numbers plunge 8% to 3 million. Operating expenses rose with fuel prices.
Air Mauritius Group returned to profit in its most recent fiscal year, posting €17 million ($26.4 million) in earnings in the 12 months ended March 31 compared to a €6.7 million loss in the prior year. Yesterday, the carrier also announced that current shareholders including the Mauritius government reached agreement with British Airways to purchase its 10.5% stake in the airline for £3.2 million ($6.3 million). BA had held the stake, comprising a 13.24% share of Air Mauritius Holding Co. and a 3.84% share in Air Mauritius Ltd. since 1973.
Aer Lingus flew 1.53 billion RPKs in May, up 18.7% from the year-ago month. Capacity rose 25.3% to 2.01 billion ASKs, dropping load factor 4.2 points to 76.1%.
UPS issued a profit warning yesterday, projecting earnings per share for the second quarter of $0.83-$0.88, down from the $0.97-$1.04 per share originally anticipated. It cited "slow US economic growth and an unprecedented increase in the cost of fuel," resulting in lower US package volume than expected and an "accelerating contraction in the use of premium air products."
Alaska Airlines flew 1.62 billion RPMs in May, up 2.2% year-over-year, against a 1.3% increase in capacity to 2.08 billion ASMs. Load factor rose 0.7 point to 77.8%. Unit revenue climbed 1.7% to 11.64 cents. It is forecasting a 1.2% year-over-year increase in second-quarter capacity to 6.2 billion ASMs and a 1.2% hike in full-year capacity to 24.5 billion ASMs. Second-quarter unit cost is expected to rise 11%-12% to 11.5-11.6 cents. It also said it expects to incur a charge of approximately $30 million this quarter related to the retirement of two leased MD-80s.
United Airlines said it will furlough 950 pilots, about 14% of its flight deck workforce, blaming "high oil prices and a softening US economy." In a message to workers, UA management explained that its previously announced plan to cut 100 aircraft from its mainline fleet by the end of 2009 ( ATWOnline, June 5) led to the decision to eliminate 950 pilot positions, which are in addition to 1,400-1,600 salaried and management positions that it also has said it will cut.
Chinese government last week raised the domestic fuel price more than 25% to CNY7,450 ($1,082) per ton, which China Securities aviation analyst Li Lei reported would lead to a CNY3.6 billion increase in annual expenses for China Southern Airlines--which operates the largest domestic network--a CNY1.8 billion rise for Air China, CNY2.2 billion for China Eastern Airlines and CNY700 million for Hainan Airlines. However, Li said the increase will not have a significant influence on second-quarter financial performance, as yuan appreciation will continue to drive profits.
Virgin Blue CEO Brett Godfrey decided that the best form of defense is attack and warned that some airlines face imminent shutdown because of soaring fuel prices. Three weeks ago Godfrey was forced to defend Blue from reports that it risked bankruptcy ( ATWOnline, June 6). JP Morgan, author of the possible scenarios that prompted the press speculation, later clarified that it did not believe Blue faced bankruptcy.
A significant swing to the red in its fiscal fourth quarter ended March 31 helped drag India's Jet Airways to a full-year loss of INR2.53 billion ($58.9 million), a reversal from the INR280 million profit it reported in the year ended March 31, 2007, and its JetLite subsidiary suffered even heavier losses.
Airbus began transporting A320 segments from Hamburg to the new Tianjin FAL, where the first aircraft (headed for Sichuan Airlines) will be assembled starting in August for delivery in the first half of next year. Airbus will hold 51% of the Tianjin joint venture with the Chinese Industry Consortium comprising the Tianjin Free Trade Zone, AVIC I and AVIC II holding the remainder.
Delta Air Lines and Northwest Airlines pilots reached a tentative agreement yesterday with DL management on a joint contract, a major milestone in the carriers' planned merger.
Malaysia Airlines will reduce capacity by 6% and enact other cost-saving measures, according to MD Idris Jala, who said MAS will "freeze. . .recruitment, defer spending, adjust fares and review routes and flights which are losing money," Thomson Financial reported from Kuala Lumpur. He said MAS also may decline to exercise its option for 20 737-800s that accompanied its firm order for 35 in March ( ATWOnline, April 1).
FedEx Express received a US FAA supplemental type certificate for a new avionics system that combines Honeywell's Head Up Display and Elbit Systems of America's infrared Enhanced Flight Vision System and plans to install it on its MD-10 freighters.
Cargo carrier MK Airlines recommenced flight operations after administrators secured funding last Friday from Transatlantic Aviation Ltd., part of The Belfairs Management Group. MK suspended service June 10 and was in discussions with several parties regarding investment that would help it renew its fleet of 747-200Fs and DC-8Fs.
Sudan government grounded flag carrier Sudan Airways and suspended its operating certificate yesterday for breaching unidentified rules and noncompliance, according to widespread press reports from Khartoum. A civil aviation authority official was quoted as saying the grounding was for "an undefined period" and was unrelated to the A310 accident that killed at least 30 two weeks ago ( ATWOnline, June 12).
Air Berlin unveiled a cost reduction package that will include removal of 14 aircraft from service by year end and the closure of the Munich administrative offices of dba. "The organizational restructuring contributes significantly to lowering cost and maintaining competitiveness," CEO Joachim Hunold said. AB reported a slightly narrowed €59 million ($91.5 million) first-quarter loss ( ATWOnline, May 30).
SkyEurope Airlines added Vienna-based ASP as an investor. The firm purchased 7.24% of the LCC on the bourse for approximately €7 million ($10.9 million). ASP reportedly was attracted by the fact that SkyEurope has reduced its costs 17.7% over the past six months. However, it still faces a first-half loss of around €28.5 million.
TUI Travel signed an agreement with AerCap Holdings and Deucalion Aviation Funds for the sale and leaseback of 19 owned aircraft within the TUI Travel fleet for $526 million. Aircraft will be acquired through a 50/50 joint venture between AerCap and Deucalion and will be managed by AerCap, which will receive servicing fees. TUI Travel will continue to operate the 11 737-800s, six 757-200s and two 767-300ERs on 1-7-year operating leases with TUIfly, Thomsonfly, TUIfly Nordic and Jet4You.
