Russia's S7 Airlines has canceled its order for 15 787s, it confirmed yesterday, becoming the first carrier to terminate a major deal for Boeing's delayed next-generation widebody.
Sun Country Airlines reported a $21.4 million loss in 2008, narrowed from a $35 million deficit the year before. Chairman and CEO Stan Gadek called the result "a significant improvement based upon the successful turnaround" of the company. "Based on current booking and revenue trends, we expect to be profitable in first quarter and full-year 2009," he claimed. Fourth-quarter net profit of $955,000 compared to an $18 million loss in the year-ago period and was SY's first profitable fourth quarter in five years.
AirTran Airways reported a 2008 net loss of $273.8 million, reversed from a $52.7 million profit in 2007, citing "multiple financial challenges" and noting that the result included nonoperating losses of $150.8 million related to its "out-of-the-money" fuel hedge contracts.
Lufthansa canceled 80 flights Wednesday owing to a 6-hr. strike by the UFO cabin crew union at Frankfurt, Berlin Tegel and Berlin Schoenefeld. UFO now has staged two strikes in four days and is pushing for a 15% wage increase for its 16,000 members. LH has lifted its offer to 10%.
Iberia will report net income of €32 million ($42.2 million) for 2008, a 90.3% plunge from the prior year, it announced at an investors conference yesterday. It will suffer a €79 million operating loss on a 1.3% decline in revenue to €5.45 billion. Passenger revenue fell 2.5% to €4.22 billion. Operating costs rose 5.5% to €5.53 billion on a 45.5% surge in fuel expenses to €1.67 billion. Capacity dropped 0.5% year-over-year and load factor was down 1.6 points to 80%. IB will release its complete full-year and fourth-quarter results on Feb. 27.
Alliant Techsystems yesterday announced it won a contract with Rolls-Royce to produce composite aft fan cases for the Trent XWB that will power the A350. Contract is valued at more than $200 million and includes integration of additional components to support Rolls' assembly. Fan case delivery is slated to begin later this year. Trent XWB ground testing is expected in 2010.
Ryanair yesterday announced the formal withdrawal of its €748 million ($987.4 million) cash offer for Aer Lingus, which followed the Irish government's refusal to sell its stake to the LCC. "Ryanair acknowledges that its offer cannot now be successful," it said. The carrier also announced the launch of a daily London Gatwick-Marseille service, its seventh route from LGW, on March 30.
Emirates will operate the A380 to Incheon beginning in November. It will be EK's fifth A380 market after London Heathrow, New York JFK and soon-to-be-launched Sydney and Auckland. It also said it will commence its deferred Dubai-Durban service on Oct. 1 and will resume its third daily DXB-Johannesburg flight on Feb. 1. Durban flights had been scheduled to launch Dec. 1 but were delayed due to aircraft deployment issues.
ANA and Japan Airlines yesterday each released plans for their fiscal years beginning April 1 that feature network cutbacks and a greater focus on operational efficiency. ANA said it intends to "minimize the risk of falling revenue" and is focusing on opportunities "afforded by the expansion" of Tokyo Haneda and Narita in 2010. International capacity is expected to fall 8% in the upcoming fiscal year while domestic ASKs decline 4.3%. It will suspend flights from Nagoya to Tainjin and Guangzhou from March 29 and temporarily suspend and/or decrease frequency on five other Asian routes.
Boeing's 2008 net profit plunged 34% to $2.7 billion from $4.1 billion in the prior year owing to the now-settled machinists' strike, lower aircraft deliveries and development delays in aircraft programs, leading the company to announce yesterday that it will cut 5,500 additional jobs this year. The manufacturer, which posted a rare quarterly net loss in the fourth quarter of $56 million compared to a $1.03 billion profit in the year-ago quarter, already had said it would cut 4,500 workers in 2009, bringing total planned cuts to 10,000.
Lufthansa Italia took to the skies yesterday with a panoramic flight over the Alps that followed a ceremony christening of its first two A319s. The aircraft were named "Milano" and "Varese," breaking with LH's tradition of naming planes after German cities and marking a new phase in its aggressive expansion strategy, which now includes the first establishment of a carrier outside its home market.
Frontier Airlines Holdings reported a $1.1 million net profit in the December quarter and an operating profit of $5.6 million. Excluding special items, it was $7.7 million in the black on a net basis. Special items included $8.7 million in mark-to-market fuel hedge losses and $2.7 million in gains on reorganization activities that included the sale of four A319s. Its December net profit was $18.7 million. Fourth-quarter mainline passenger unit revenue rose 7.2% year-over-year against a 4.2% fall in unit cost excluding fuel to 6.2 cents.
Nordic Airways, a charter and ACMI carrier based at Stockholm Arlanda that included a scheduled regional subsidiary called Nordic Regional, ceased operations over the weekend after losing its operating certificate. Swedish media reported that the carrier was granted a temporary AOC after refinancing in October but that authorities revoked the license after Nordic was unable to pay its bills. It operated MD-80s and counted Air Berlin, Germanwings and Spanair among its customers.
LAN Airlines managed to keep expense and revenue growth in line in 2008 and reported a full-year profit of $335.7 million, up 8.9% from the $308.3 million earned in 2007. The company credited its "solid and flexible business model and the leadership position it has established in the markets in which it operates" for its ability to produce positive results "despite the various elements that constantly affect the airline industry." It plans to continue its growth this year, increasing ASKs 10%. It will take delivery of four passenger aircraft and two 777 freighters in 2009.
FedEx ATR 42 operated by Empire Airlines crashed on landing at Lubbock, Tex., early yesterday morning, leading to a fire that destroyed the aircraft. Both crewmembers survived. En route from Fort Worth Alliance, the aircraft skidded off the runway after touching down and the right wing caught fire, according to Flight Safety Foundation's Aviation Safety Network. The accident occurred just after 4:30 a.m. in poor weather conditions that included "freezing drizzle and mist," ASN reported. FedEx said the two pilots escaped with only "minor injuries."
Delta Air Lines reported a full-year 2008 net loss of $8.9 billion, a result that represented a major reversal from net income of $1.61 billion in 2007, attributing the huge deficit mostly to noncash charges related to goodwill impairment ($7.3 billion) and its acquisition of Northwest Airlines ($970 million).
Unfettered by a fuel hedge program that it ended 18 months ago, Allegiant Air parent Allegiant Travel Co. took advantage of falling oil prices and finished both the fourth quarter and full year in the black, the latter a $35.4 million profit, up 12.4% from $31.5 million earned in 2007.
Schiphol Group, which operates Amsterdam Airport Schiphol, announced plans to cut 10%-25% of its workforce, currently numbering 2,200, by year end through a combination of natural attrition, outsourcing and layoffs. It cited a "strong decline in traffic and increasing international competition" as the reason and said it agreed to work with trade unions on a short-term redundancy program.
EasyJet announced the cancellation of 12 flights to/from Athens scheduled for today and 16 flights to/from Paris Charles de Gaulle and Orly because of scheduled strikes.
Malev Hungarian Airlines shareholders meeting that began yesterday was suspended until Feb. 10, with the airline citing "the requirement to reach properly grounded decisions," including a possible reduction in the value of its shares. It confirmed that Russia's Vneshekonombank will be its "indirect owner" and that its operation will be "conducted in partnership with Aeroflot" ( ATWOnline, Jan. 27).
Kuwait Airways will receive $300 million from the Iraqi government in compensation for damage incurred during the 1990 invasion. A government spokesperson told the Associated Press that the cabinet "approved a final and comprehensive settlement," although a KU spokesperson said the carrier is claiming $1.3 billion plus interest ( ATWOnline, Sept. 4, 2008).
Turkish Airlines is abandoning its no-fuel-hedging policy and will hedge approximately 10% of its expected 2009 consumption "in order to fix expenses and to minimize the negative impact of spot price fluctuations on total costs," it said. THY transported 22.8 million passengers in 2008, up 15% from 2007, on a 12.9% rise in RPKs to 34.1 billion. Business class passengers climbed 23.2% and overall capacity was up 11.3% to 46.3 billion ASKs, lifting load factor 1.1 points to 73.8%.
Eurocontrol reported that the number of flights in Europe in 2008 rose just 0.1% year-over-year to around 10 million, the smallest increase in five years. Major markets saw significant traffic declines, particularly Italy (2.7%), the UK (1.7%) and Spain (2.1%). Eastern Europe, especially Turkey (up 8.3%) and Poland (up 9.8%), continued to grow. Low-cost traffic fell for the first time in 15 years to 4,600 flights per day in November, down around 6% year-over-year.
