Eos Airlines became the second all-business-class carrier to shut down and the fifth US-based airline to declare bankruptcy in the past month, announcing Saturday that "some issues arose" that prevented potential investors from following through and that bankruptcy was the only option.
Continental Airlines said it will not merge with another airline, squelching speculation that it was interested in a tie-up with United Airlines, which conversely said that it would "pursue all options" and reportedly is in talks with US Airways about a possible combination.
Regional Express Holdings (Rex) will take full control and ownership of its joint venture pilot training academy at Mangalore, the Australian regional announced. It will be renamed Australian Airline Pilot Academy. First batch of cadets is scheduled to graduate this year and commence conversion training to Rex's Saab 340s.
Air China posted a net profit of CNY1.04 billion ($149.2 million) in the first quarter, up 147% from the CNY422.7 million earned in the year-ago quarter, on a 21% lift in operating revenue to CNY12.76 billion. Operating expenses jumped 15.43% to CNY12.04 billion. In addition to "stable growth in domestic demand," CA credited capacity increases and "accelerated" yuan appreciation for the improved result. It released no other details.
Austrian Airlines Group suffered a €60.4 million ($95.3 million) loss in the first quarter, widened from a €16.3 million deficit in the year-ago period, which prompted the company to say it expected a fall in full-year adjusted EBIT "due to the time-lagged effect of measures implemented through adjustment of fares and surcharges." Despite the "continued deterioriation in market conditions," OS has not given up on expansion.
Air New Zealand said it will miss its full-year earnings target owing to "continued increases in the price of jet fuel." It said in February when releasing its half-year earnings that it expected to improve on its full-fiscal-year earnings before taxation and unusual items, but now it "will not achieve this outcome." Based on projected fuel costs and "the current demand environment," it is targeting NZ$200-NZ$220 million ($158.4-$174.2 million) in normalized earnings for the year ending June 30. March passenger numbers rose 4.5% year-over-year and yield fell 0.5%.
Republic Airways Holdings reported first-quarter net income of $20.2 million, up 4.5% from $19.3 million earned in the year-ago period. Revenue grew 25.3% to $363.9 million while operating expenses rose 26.5% to $298 million. Operating income incrased 20% to $65.8 million from $54.8 million. "The big news happened after the quarter closed," CEO Bryan Bedford said, referring to Frontier Airlines' cancellation of its air service agreement ( ATWOnline, April 24).
In a surprise move, SkyWest Inc. made an unsolicited bid to acquire financially beleaguered ExpressJet Holdings Inc. and revealed that it had negotiated a capacity purchase agreement with Continental Airlines contingent on the acquisition taking place. ExpressJet Holdings announced Friday that it had rejected SkyWest's offer of $3.50 a share in cash, which represented a 67% premium over the April 24 closing price of $2.09 per share. It called the offer an "opportunistic attempt to acquire the company" below its true value.
American Airlines flew 11.6 billion system RPMs in March, down 2.8% from the year-ago month, against a 4.6% decline in capacity to 13.82 billion ASMs. Load factor rose 1.5 points to 83.9%. American Eagle Airlines flew 685.1 million RPMs, down 9.5%, and 933.6 million ASMs, down 8.6%. Load factor fell 0.7 point to 73.4%. Alaska Airlines flew 1.7 billion RPMs in March, up 10.7% from the year-ago month, against a 5.2% increase in capacity to 2.1 billion ASMs that lifted load factor 4 points to 80.8%.
TAM changed the name of its cargo business from TAM Express to TAM Cargo. The growing unit generates revenue from carrying cargo in the bellies of its 110 passenger aircraft. It said it will invest BRL30 million ($17.9 million) this year on infrastructure for domestic cargo terminals and national and international freight systems. Its gross cargo revenue totaled BRL776.8 million in 2007, up 60% over 2006, comprising 9.2% of the Brazilian airline's total revenue.
Delta Air Lines CEO Richard Anderson and Northwest Airlines President and CEO Doug Steenland promoted the carriers' merger before Congress yesterday, insisting that the combination wouldn't affect competition and is necessary to allow the US industry to compete against large European and Asian airlines.
Wizz Air will open at a base at Kiev Boryspil and launch service to seven destinations on July 11. A320 service will be to L'viv (four-times-weekly), Kharkov (four-times-weekly), Odessa (daily), Zaporyzhzhia (thrice-weekly) and Simferopol (10-times-weekly). It also will operate from Simferopol to Kharkov (thrice-weekly) and L'viv (four-times-weekly).
Frontier Airlines flew 942.4 million mainline RPMs in March, up 14.7% from the year-ago month, against a 4.5% rise in ASMs to 1.12 billion. Load factor climbed 7.6 points to 84.8%. Yield increased 0.7% to 11.81 cents and unit revenue was up 10.5% to 9.96 cents. Allegiant Air flew 427.7 million system RPMs in March, a 36.6% increase over the year-ago month. Capacity climbed 32.7% to 492.6 million ASMs and load factor rose 2.5 points to 86.8%.
Deccan Aviation, which is in the process of merging its Deccan subsidiary with Kingfisher Airlines, reported a pre-tax loss of INR1.98 billion ($49.6 million) in the third fiscal quarter ended March 31, improved slightly from a INR2.12 billion deficit in the year-ago period. It credited a 36% rise in yield to INR3,274 for the result. Deccan said the combined network will be rationalized beginning with the summer schedule ( ATWOnline, March 31). In addition, it said that Chairman N.S.
Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported a $35.9 million first-quarter loss that deepened from a $10.3 million deficit in the year-ago period. Excluding the effect of mark-to-market fuel hedge accounting, AAG lost $36.3 million compared to $15.8 million last year. Chairman and CEO Bill Ayer said the company "is in a good position relative to the rest of the industry," but that "high fuel prices are eroding our profits and revenues are not increasing enough to offset them."
US Airways reported a first-quarter net loss of $236 million, reversed from a profit of $66 million in the year-ago period, and said it increasingly will implement an "a la carte" pricing structure to counter rising fuel costs.
Norwegian posted a consolidated net loss of NOK210.8 million ($42.4 million) in the first quarter, a sharp deterioration from the NOK14.9 million loss suffered in the year-ago period, owing to increased seasonality, introduction of new aircraft, the integration and expansion of the old FlyNordic and the launch of 13 routes from its new base at Rygge. First-quarter revenue rose 47.5% year-over-year to NOK1.09 billion while operating costs (excluding leasing, depreciation and writedowns) soared 77.3% to NOK1.23 billion.
Lufthansa continues to soar despite the difficult environment, posting a €57 million ($90.9 million) first-quarter profit that compared quite favorably to the €55 million it reported in the year-ago quarter minus a €449 million book gain on the sale of its stake in Thomas Cook.
CAE won Level D certification from US FAA and EASA for its A380 FFS, the industry's first. Airbus will use the simulator to offer initial training to A380 customers.
Air Europa pilots represented by SEPLA have called a series of strikes in May and June to protest the carrier's plan to set up a low-cost subsidiary. SEPLA claims the Palma-based airline will violate its 2001 labor agreement if it hires non-Air Europa pilots for the new LCC, Universal Airlines ( ATWOnline, Feb. 8). Talks between Globalia, which controls Air Europa, and SEPLA, broke down this week after five months.
Frontier Airlines yesterday announced that it will terminate its codeshare agreement with Republic Airways and phase out the regional's 12 E-170s by mid-June. Frontier filed for Chapter 11 bankruptcy protection this month but will continue operating as it reorganizes ( ATWOnline, April 14). "Unfortunately, with current economic conditions and other business changes, we have been forced to drastically rethink the use of regional aircraft in our mix," President and CEO Sean Menke said.
UPS reported a first-quarter net profit of $906 million, down 12.2% from $1.03 billion last year, and said second-quarter earnings will be flat at best owing to an "anemic" economy. "US economic activity deteriorated more rapidly than expected during the [first] quarter," Chairman and CEO Scott Davis said. Revenue increased 6.5% to $12.68 billion while expenses grew 6% to $11.18 billion, producing operating income of $1.49 billion, up 9.9% over $1.35 billion last year. International package revenue, which is heavily dependent on UPS Airlines' operations, rose 15.7% to $2.76 billion.
ARINC said it completed installation of 64 new SelfServ check-in kiosks for Flybe at 13 UK regional airports. It already supports Flybe at Manchester, Birmingham, Newcastle and Belfast City.
Northwest Airlines reported a $4.14 billion first-quarter net loss yesterday owing to a noncash goodwill impairment charge of $3.93 billion necessitated after it "compared the carrying value of its equity and the fair value" and similar to the one incurred by merger partner Delta Air Lines (see story above). NWA lost $292 million in the year-ago quarter.
