Continental Airlines announced a public offering of 11 million shares of class B common stock priced at $14.80 per share. It granted underwriter UBS Investment Bank a 30-day option to purchase an additional 1.65 million shares to cover any overallotments. Issuance and delivery of the shares is scheduled for June 25.
Austrian Airlines Group CCO Andreas Bierwirth said the carrier is considering establishing an even greater presence in Central and Eastern Europe. It already holds a 22.5% share in Ukraine International Airlines and would strengthen its foothold with investments in other carriers in the region. "If AAG is earning positive results and we have enough cash available, then we can be more active in this region," Bierwirth told ATWOnline in Vienna. He claimed Austrian will be more assertive in the region. "Even with our share in UIA, other airlines grew as well.
TAM flew 2.11 billion domestic RPMs in May, up 16% year-over-year, against a 10.2% increase in ASMs to 2.89 billion. Load factor rose 3.7 points to 73.1%. International traffic climbed 34% to 1.25 billion RPMs while capacity rose 23.5% to 1.68 billion ASMs. Load factor was up 5.8 points to 74.5%.
Delta Air Lines will offer a rebate of the $25 second-checked-bag fee to customers who purchased tickets before April 9 and traveled on or after May 5, making a "one time exception" to its policy of enforcing rules effective on the date of travel. It said the decision was "in response to customer feedback and as a matter of goodwill." It announced the new policy on April 9 and it became effective May 5. Separately, DL will launch five-times-weekly New York JFK-Buenos Aires on Dec. 18.
SAS Group yesterday abandoned its effort to sell Spanair, saying that as a result of the "challenging market conditions in the Spanish aviation market coupled with record oil prices and pressure in the financial sector," it has been unable to "reach its targeted terms and conditions on the divestment." CEO Mats Jansson said Spanair is "a company with a competitive cost position" and that SAS is committed to its future.
Aeroflot finally has released its 2007 full-year results under IFRS standards, reporting a $313.4 million profit that represented a 21.4% increase over the $258.1 million earned in 2006. However, it is predicting a drop this year, as "fuel prices are having a colossal effect on us," according to comments from SU Deputy Director Mikhail Poluboyarinov cited by Reuters. Revenue should rise 30%, driven partly by an 8%-10% increase in fares.
Continental Airlines and United Airlines yesterday signed a "framework agreement to cooperate extensively, linking their networks and services worldwide," and CO revealed that it will leave SkyTeam to join Star Alliance with UA and CO planning to form joint venture operations with other Star carriers for transatlantic services as well as flights to Latin America and Asia.
Governments around the world must work alongside airlines and manufacturers that are trying to make a difference in the environment, according to Air New Zealand's Rob Fyfe, CEO of one of the industry's greenest carriers.
Southwest Airlines will invest $175 million to implement RNP fleetwide for use at 64 US airports, the LCC announced yesterday at the Eco-Aviation conference presented by Air Transport World and Leeham Co. in Washington.
Japan Airlines said the JAL Flight Crew Union (1,100 members), JAL Japan Pilots Union (600) and Japan Air Commuter union (113) staged a strike yesterday, forcing cancellation of 86 flights (all related to the JAC walkout). JAL added that the pilots' action was "for a variety of reasons, including the summer bonus." It said JPU and JAC may continue the strike today, which would affect more flights.
British Airways flew 9.24 billion RPKs in May, down 0.7% year-over-year, against a 1.3% increase in capacity to 12.87 billion ASKs. Load factor dropped 1.5 points to 71.8%.
European Commission initiated a formal investigation into whether funding of Frankfurt Hahn Airport by two regional authorities and publicly owned company Fraport, its airport charges and its contracts with Ryanair break EU state aid rules. The Commission said its investigation follows complaints "from a competing airline and from an association of airlines" and noted that after an initial assessment of evidence it concluded that Flughafen Frankfurt Hahn may have behaved like a private market investor.
US airline executives yesterday stressed the debilitating nature of rising fuel prices and said further capacity reductions may be warranted, while Delta Air Lines announced that it is raising its second-half year-over-year domestic mainline capacity reduction from a previously announced 10% to 13%.
ARINC and Flybe selected IER to supply more than 100 IER 918 self-service check-in kiosks for installation at 22 airports in the UK and Europe. IER 918s feature passport and barcode readers and general purpose printers to enhance pre-departure services.
Severely affected by weak economic conditions, FedEx reported a 44% drop in net income for its full fiscal year ended May 31 to $1.13 billion from $2.02 billion the previous year. The result included a rare quarterly net loss in the fiscal fourth quarter of $241 million, reversed from net income of $610 million in the year-ago period. "Record high fuel prices and the weak US economy dampened volume growth and substantially affected our bottom line," Chairman, President and CEO Frederick Smith said.
US FAA yesterday announced that Bulgaria has been raised to a Category 1 safety rating from the Category 2 imposed in September 2003. It said Bulgaria was in compliance with ICAO standards in a January reassessment.
TUI acquired the remaining stake of Moroccan LCC Jet4you. It owned 40% of the Casablanca-based airline and purchased the remaining shares last week, Agence France Presse reported. Jet4you operates five 737 Classics and plans to double its fleet by 2013. It reported €51 million ($78.7 million) in revenue last year.
United Airlines parent UAL Corp. said in a US Securities and Exchange Commission filing that it expects second-quarter revenue to increase over the year-ago period as both capacity and traffic fall. Second-quarter mainline passenger RASM is expected to rise 4%-5% year-over-year, with consolidated PRASM lifting 3.5%-4.5%. At the same time, mainline and consolidated capacity are expected to decline 1.4% from the year-ago period. Mainline traffic will fall 4%-4.5% and consolidated RPMs will decline 4.25%-4.75%.
Air Canada, following the path of several US counterparts, said yesterday it will cut total system capacity by 7% year-over-year in this year's fourth quarter and the 2009 first quarter and slash its workforce by 2,000.
Copa Airlines flew 456.2 million RPMs in May, up 22.3% year-over-year, against a 17.2% increase in capacity to 580.1 million ASMs. Load factor rose 3.3 points to 78.7%.
Virgin America said yesterday that it will reduce fourth-quarter capacity by 10% compared to previous projections by adding flights on "select high-demand routes while reducing capacity on off-peak flights this fall," citing seasonal demand changes and high fuel prices. "These temporary schedule reductions and strategic additions better reflect the industry landscape we anticipate, given that consumer demand for air travel will be affected by seasonality and, potentially, by higher gas prices in the fall," President and CEO David Cush said.
Arguing that the case for its merger with Delta Air Lines is "stronger than ever," Northwest Airlines yesterday unveiled a further round of capacity cuts that will contribute to the removal of 43 aircraft from its fleet this year retroactive to Jan. 1. "In response to these extraordinary fuel costs, we are taking prudent actions to reduce our capacity and right-size the airline. This will allow us to better match our capacity to customer demand as airfares, by necessity, must increase," President and CEO Doug Steenland said.
Lufthansa will begin phasing out its 60-strong 737-300/-500 fleet by next year, with the -500s leaving by the end of 2009 and the remaining aircraft being retired by 2012, depending on market developments.
