WestJet reported third-quarter net income of C$54.7 million ($46 million), down 28.1% from C$76.1 million last year, saying it was hurt by high fuel costs and "the beginning of a more challenging environment for demand." Nevertheless, President and CEO Sean Durfy touted the Calgary-based carrier's continued capacity expansion, which included 20.1% growth in the third quarter, as "purposeful and profitable" at a time when many airlines are reducing capacity and losing money.
DHL yesterday pulled the plug on its five-year push to become the "third alternative" to UPS and FedEx in the US express shipping market, announcing that all domestic US services will cease early next year as it focuses exclusively on international operations to/from 15-20 US metropolitan areas. "The basic reason is that the US is a highly concentrated duopoly market and the reality is. . .UPS and FedEx's scale, market reach and brand awareness have made it impossible for us to make it economically viable," DHL Express CEO John Mullen told reporters in a conference call.
Austrian Airlines Group will run out of cash by mid-2009 at the latest if it is unable to find a new owner or secure funding from the Austrian government, which was asked by Lufthansa to take responsibility for a significant portion of AAG's debt in exchange for a German takeover ( ATWOnline, Oct. 28). Analysts from Austrian banks now predict a 20% chance of bankruptcy.
Having already sealed a codeshare deal giving it access to Canada, Southwest Airlines yesterday announced a partnership with Toluca-based Volaris that will give the world's largest LCC a foothold in Mexico for the first time.
Alma de Mexico suspended operations and filed for bankruptcy last Friday, citing the "crisis" in the industry and global economy. The Guadalajara-based LCC operated 19 CRJ200s and had two CRJ900 NextGens on order ( ATWOnline, Aug. 9, 2007). It said "historic" high fuel prices, low occupancy and the peso's fall against the US dollar were key factors in its demise.
Qatar Airways secured $500 million in financing for the purchase of three 777-300ERs. Twelve-year arrangement is with Bank of Tokyo-Mitsubishi UFJ, BNP Paribas, Deutsche Bank, Standard Chartered Bank (facility agent and security trustee) and Sumitomo Mitsui Banking Corp. Europe.
Thai Airways reported a THB426.2 million ($12.1 million) profit in the third quarter, reversed from a THB971.1 million deficit in the year-ago period, according to a company statement cited by Reuters. A foreign exchange gain of THB4.73 billion was the difference and compared to a THB3.36 billion forex loss in the third quarter of 2007. Operating result swung to a THB3.2 billion loss from a THB2.43 billion profit as passenger revenue rose 10% year-over-year to THB43 billion while fuel costs soared 68.2%.
British Airways reported a consolidated net loss of £49 million in its fiscal first half ended Sept. 30, which implied a steep second-quarter deficit of £76 million, a reversal from earnings of £333 million in the three months ended Sept. 30, 2007.
Air Canada posted a third-quarter net loss of C$132 million ($112.4 million), reversed from a C$273 million profit in the year-ago period, saying its results were hurt by high fuel costs and noncash losses on fuel hedging and currency items.
Frontier Airlines officially cancelled plans to build a $25 million heavy maintenance base in Colorado Springs. It announced the project last year before entering bankruptcy ( ATWOnline, Nov. 5, 2007). "As part of the bankruptcy process, we've had to look at every project in the organization," a spokesperson told the Rocky Mountain News. "We've canceled those projects that don't make sense.
Japan Airlines parent JAL Group reported net income for its fiscal first half ended Sept. 30 of ¥36.6 billion ($373.4 million), a more than fivefold increase from ¥7.3 billion in the year-ago period, crediting aircraft downsizing, route restructuring, cost cutting and new premium product strategies on international routes.
JetBlue Airways flew an E-190 being used by Sen. John McCain's presidential campaign from Anchorage to Buffalo last Thursday, a 2,694-nm. repositioning flight the carrier claimed was a record for the aircraft type, according to a message to employees cited by USA Today. Flight took 6 hr. 11 min. Its longest regularly scheduled 190 flight is a 1,476-nm. Boston-Austin. JetBlue flew 1.88 billion RPMs in October, down 5.4% from the year-ago month. Capacity dropped 11.1% to 2.33 billion ASMs, lifting load factor 4.8 points to 80.7%.
United Airlines canceled a planned 100% increase on the one-way fee for a second checked bag on domestic flights (it will remain $25) and said it will offer a 20% discount on the $15 first-bag fee if paid on UA's website between Nov. 10 and Jan. 31. Customers also will be able to purchase premium economy seats with 5-in. extra legroom and a $9 loyalty point program "accelerator" on the website beginning Nov. 10.
Delta Air Lines flew 9.93 billion system RPMs in October, down 2.2% from the year-ago month. Capacity dropped 4.7% to 12.17 billion ASMs, lifting load factor 2 points to 81.6%. Northwest Airlines flew 6.38 billion system RPMs in October, a 1.4% decrease from the year-ago month. Capacity fell 2% to 7.57 billion ASMs and load factor was up 0.5 point to 84.3%. SkyEurope Airlines transported 304,669 passengers in October, down 10.1% year-over-year. Load factor declined 6.8 points to 68%.
Pinnacle Airlines and Colgan Air parent Pinnacle Airlines Corp. reported a $7.7 million third-quarter profit, down 29.2% from the $10.9 million earned in the year-ago period, on a 7.8% rise in operating revenue to $221.8 million. Expenses grew 5.8% year-over-year to $201.8 million and operating income climbed 33.3% to $20 million from $15 million in the 2007 third quarter. Pinnacle Airlines' income was $12 million, down 24.5% year-over-year, while Colgan's operating result swung to an $8 million profit from a $900,000 loss in the year-ago quarter.
Lufthansa Technik reached a 15-year deal with Norwegian to provide MRO on more than 100 CFM56-7Bs. Agreement is LHT's biggest engine service contract in Scandinavia to date, covering engines on 53 737NGs as well as seven spares. Work will take place at LHT's Hamburg shop, which is under construction.
Air Wisconsin, which operates 70 CRJ200s as US Airways Express, said it provided a $35 million, 12-month loan to US. Another Express operator, Republic Airways Holdings, provided a similar loan as part of a $950 million liquidity package that US announced last month ( ATWOnline, Oct. 24). Air Wisconsin said the loan includes optional monthly extensions totaling an additional 12 months.
Cathay Pacific Airways issued a stock market alert warning that its full-year result will be "disappointing" despite falling fuel prices. CX said in its statement to the Hong Kong Stock Exchange that "weakness in revenue and losses on certain fuel hedging contracts" would "affect the year's results adversely." It lost HK$663 million ($85.5 million) in the first half of 2008 ( ATWOnline, Aug. 7) after reporting a HK$7.02 billion profit last year.
AerCap Holdings, the Amsterdam-based operating lessor, has "suspended all future Capex other than existing contracted Capex with Airbus" and is reducing headcount by around 15% as it seeks to adjust to the impact of the ongoing credit crunch and airline traffic downturn. The company also is "in active discussions" to sell minority stakes in parts of its portfolio.
Greek Ministry of Transport and Communications announced the companies interested in bidding for some or all of Olympic Airlines, which the government intends to split and sell by year end. Interested in Olympic's flight operations are Athens Airways, Kuwait's Fouad El Ghanim Group, Italy's MyAir, Qatar Airways, SkyEurope Airlines and US charter services Chrysler Aviation and SkyOne. Interested in OA's ground handling division are Athens Airways, Greek construction firm Ellaktor, Fouad El Ghanim, Goldair, Hellenic Cargo Group and Swissport.
Ameco Beijing, the joint venture between Air China (60%) and Lufthansa (40%), announced deals with Jet2.com and Astraeus Airlines to provide MRO on RB211-535E4 engines (two for Astraeus and one for Jet2).
Boeing predicted this week that world air cargo traffic will grow 5.8% annually over the next 20 years, down slightly from the 6.1% rate it projected in previous forecasts. Its newly released "2008/2009 World Cargo Forecast" said worldwide airfreight traffic will triple by 2027 and that "current near-term market weakness and worldwide economic uncertainty" won't significantly affect long-term demand. "The industry has shown strong recoveries from previous economic downturns such as the Asian economic crisis, the 9/11 attacks and the SARS outbreak," it said.
Atlas Air Worldwide Holdings, parent of Atlas Air and Polar Air Cargo, posted third-quarter net income of $5.2 million, down 84% from $32.4 million in the year ago period. It blamed the drop on fuel costs and "soft demand." President and CEO William Flynn noted that Polar becoming a DHL contract carrier last month will lead to "significant earnings improvement" in 2009 by "de-risking our business model."
Compagnia Aerea Italia's binding offer for Alitalia is worth €1 billion ($1.29 billion), the airline said in a statement to the country's stock market regulator, and comprises €900 million for AZ's flight operation, assets and contracts, €57 million for Alitalia Servizi, €7 million for Alitalia Airport, €19 million for Alitalia Express and €17 million for low-cost subsidiary Volare. The €900 million for AZ comprises €275 million cash and €625 million to assume the carrier's debts.
