The announcement of the merger agreement between Delta Air Lines and Northwest Airlines rippled across the US commercial aviation landscape yesterday as the respective pilot groups took opposing sides and the identity of future consolidation candidates was scrutinized.
Legislation to ban the use of mobile phones on all commercial flights in the US was introduced yesterday by Reps. Peter DeFazio (D-Ore.), Jerry Costello (D-Ill.) and John Duncan (R-Tenn.). The three are members of the House aviation subcommittee. Mobile phones currently are not permitted on domestic flights and both FAA and the Federal Communications Commission would have to lift their own bans before an airline could offer the service. The proposed legislation, if passed by Congress and signed by the President, would take the decision out of the two agencies' hands.
British Airways said that Director-Operations Gareth Kirkwood and Director-Customer Services David Noyes will be leaving the carrier and confirmed their departures "follow the airline's move to Terminal 5." BA will appoint a COO and combine the roles.
China Eastern Airlines enjoyed a turnaround in 2007, posting a net profit of CNY269 million ($38.4 million) that represented a reversal from the CNY3.3 billion loss suffered the previous year. Operating revenue rose 13% to CNY42.52 billion, but CEA cited yuan appreciation as the main driver behind its improved performance as a great deal of its debt was incurred in US dollars, reducing its financial costs by 114% year-over-year. Operating expenses climbed 4% to CNY43.08 billion with jet fuel accounting for 40.9%, up from 29.2% in 2006.
Executives from Delta Air Lines and Northwest Airlines moved quickly yesterday to persuade investors, employees, consumers and regulators that the proposed blockbuster merger of the two carriers will be positive for all, while insisting they will avoid many of the pitfalls of past mergers.
Mxi Technologies announced that Air Canada agreed to implement its Maintenix management software throughout its fleet. Designed to automate maintenance and engineering processes, technology is expected to be fully operational by 2010.
SkyWest Airlines will launch twice-daily Delta Connection service from Salt Lake City to both Gillette and Rock Springs, Wyo., July 7. SkyWest and Atlantic Southeast Airlines flew 1.56 billion RPMs in March, up 2.2% from the year-ago month, against a 3% increase in capacity to 1.97 billion ASMs. Load factor fell 0.6 point to 79.2%.
Skymark Airlines of Japan transported 3.7 million passengers last year, up 26% from 2006, while load factor soared 13.5 points to 77.2%, the Centre for Asia Pacific Aviation reported.
Sun Country Airlines will furlough 45 of its 156 pilots from May 1 to Oct. 31 during which time it will lease out two of its nine 737-800s to Air France-KLM subsidiary Transavia. While the Minneapolis/St. Paul-based carrier does not plan to cut routes, it will reduce frequencies on existing routes during the period. SCA, which operates its fleet of -800s on scheduled services and charters to points in the US, Mexico and the Caribbean, does more robust business during the winter months as it caters to leisure passengers from cold weather cities traveling to warm weather vacation spots.
Vietnam's Pacific Airlines, in which Qantas Group purchased an 18% stake with an agreement to raise that holding to 30% in 2010, will change its name to Jetstar Pacific as part of a partnership with QF that will see it become "Vietnam's first low-cost, value-based airline."
Delta Air Lines and Northwest Airlines late yesterday announced a merger agreement to create a mega-airline that would be the world's largest absent divestitures with aggregate annual revenue of more than $35 billion, a fleet of more than 800 aircraft and 75,000 employees worldwide.
IATA and African air traffic management organization ASECNA agreed to combine their efforts to improve safety, service levels, efficiency, cost effectiveness and infrastructure on the continent ( ATWOnline, April 9). "IATA and ASECNA have a shared vision to unlock the potential of African aviation," IATA DG and CEO Giovanni Bisignani said. "Africa has the world's worst safety record and its airlines are the least profitable with $300 million in losses forecast for this year. This must change.
Lufthansa announced the sale of its 49% stake in ground handling company GlobeGround Berlin to WISAG Group. Price was not disclosed. LH said the Berlin airports also will sell their majority stake in the company to WISAG. GlobeGround will continue to handle LH in Berlin after the sale closes.
Virgin America will receive an additional $100 million in capital in the next few weeks, according to a key investor who spoke to The Wall Street Journal, bringing investment in the US startup to approximately $400 million. Cyrus Capital Partners COO Robert Nisi, a Virgin America board member, said his hedge fund feels "very good about the investment" and that the new financing will not change the shareholding among the carrier's owners.
American Airlines said its scheduled operations "are now back to normal" following the grounding and inspection of MD-80s that forced it to cancel more than 3,000 flights last week ( ATWOnline, April 14).
Frontier Airlines said a US Bankruptcy Court approved the "first day motions" related to its Chapter 11 reorganization, allowing the carrier to continue operating uninterrupted and to honor preexisting obligations. "Our reorganization is off to a smooth start and we look forward to taking important steps to further strengthen our company," President and CEO Sean Menke said.
SITA will provide SAS Scandinavian Airlines with telecommunication services covering 800 users in 40 locations across 23 countries under a deal announced yesterday. Contract is expected to save SAS $3.6 million.
Delta MEC of the Air Line Pilots Assn. met in special session Friday in Atlanta, the union acknowledged, as reports spread that DL was looking to reach an agreement with the pilots to proceed with a merger with Northwest Airlines despite the two groups' inability to come to an agreement concerning the combination of their respective seniority lists ( ATWOnline, March 20).
European low-cost carrier seat capacity grew 22% in 2007 compared to 2006 and LCCs accounted for 35% of all intra-European capacity last year, up from 31% two years ago, according to the 2008 edition of RDC Aviation's Low Cost Monitor. Number of routes operated by LCCs increased 28.9% year-over-year to 2,999 while the number of airports served rose by six to 287. In comparison, 466 airports received service from conventional carriers, down from 477.
Austrian LCC Niki will add its ninth aircraft, a 212-seat A321, on May 9 and has an additional nine A320 family aircraft on order for delivery by 2014 ( ATWOnline, Jan. 14). "The average age of the fleet is now between 1.5 and two years," founder and majority owner Niki Lauda told ATWOnline.
Ramco said El Al selected its Maintenance & Engineering & MRO Suite featuring legacy system transformation, best-of-breed business process improvement and compliance and conformance for Regional Regulatory Aviation Administration reporting and control requirements.
Frontier Airlines last Friday became the fourth US carrier to file for bankruptcy protection, although unlike recent predecessors Aloha Airlines, ATA Airlines and Skybus Airlines it intends to continue flying while undergoing reorganization. Founded in 1994, the Denver-based carrier blamed "an unexpected attempt by its principal credit card processor to substantially increase a holdback of customer receipts" for its situation, and said it will operate a full schedule, meet its obligations and maintain employment levels and benefits during reorganization.
American Airlines cancelled 595 MD-80 flights Friday and said it expected to be operating 60% of its MD-80 schedule by late that afternoon. It had 226 of its 300 aircraft in service in the morning and said last week it expected to have its full fleet inspected and flying by Saturday evening ( ATWOnline, April 11).
Aer Lingus confirmed a June order for six A350 XWB-900s and six A330-300s following receipt of shareholder approval for the purchase. Ryanair, which holds 29% of EI, voted against the acquisition and had insisted on a renegotiation or cancellation of the contract, saying it was negotiated at an all-time high in the last aircraft value cycle. "We would strongly urge your board and management. .
