Southwest Airlines removed 38 737 Classics from service yesterday for inspections, leading to cancellation of 4% of its schedule, a move that resulted from its "ongoing internal review of. . .maintenance programs, policies and procedures" launched in the aftermath of last week's FAA-proposed $10.2 million civil penalty for alleged safety lapses.
JP Morgan projected a collective full-year loss of $4 billion-$9 billion for US airlines yesterday. In a research note, analyst Jamie Baker forecast continuing high oil prices and declining demand and warned, "We don't believe the industry can move quickly enough to put much of dent in forecasted losses." He projected a decline in demand of 6%-7% owing to a weak US economy that JP Morgan believes is already in a recession. "Even a best-ever recessionary demand scenario results in a $4 billion industry loss," Baker wrote.
Air Berlin's acquisition of LTU has proven to be costly, as the German LCC reported a steep drop in full-year profit to €11 million ($16.9 million) from the €50.1 million earned in 2006. "We are right on track with the LTU integration," CEO Joachim Hunold said yesterday as the carrier released preliminary financial figures. "Although the preliminary earnings for 2007 did not meet our expectations, we have reason to be optimistic for 2008." He said capacity utilization and unit revenue improved "significantly" through February and he was "pleased" with bookings.
Aer Lingus did well in its first full year as a privatized company, with a net profit of €105.3 million ($161.8 million) compared to a net loss of €69.9 million in 2006. Revenue rose 15.2% to €1.28 billion on a 7.8% growth in passengers to 9.3 million. Operating costs increased 15.1% to €1.19 billion, primarily owing to greater volumes and higher oil prices. Fuel cost jumped 26.3% on an underlying basis to €253.3 million. Operating profit before employee profit share came in at €88.5 million, up 16.4% from €76 million a year earlier.
Air France confirmed that its offices were raided this week by the European Commission as part of its investigation into alleged price-fixing practices on passenger flights between Europe and Japan ( ATWOnline, March 12). Lufthansa and KLM revealed Tuesday that they had been targeted. "Air France confirms that in similar fashion to other airlines, it is being questioned by the European Commission about links between the EU Union and Japan.
SITA and Rwanda Civil Aviation Authority announced forthcoming installation of air traffic information system Digital-ATIS and an air-ground data link service at Kigali. The technology, which is in keeping with ICAO's Comprehensive Regional Implementation Plan for Aviation Safety in Africa, will reduce reliance on voice communications and is expected to be in place by year end.
Singapore Airlines took delivery of the third production A380 (MSN006) Saturday. The Trent 900-powered, 471-seat aircraft will be placed into Singapore-London Heathrow service on March 18 ( ATWOnline, Jan. 31).
The chief executives of Delta Air Lines and Northwest Airlines both warned this week that rising oil prices are having a severe impact on carriers and jeopardizing the industry's recent return to profitability. Speaking at the FAA Aviation Forecast Conference in Washington, DL CEO Richard Anderson said high fuel costs are the "first and foremost issue" for the airline industry, with $105-plus per-barrel crude oil prices "really having a debilitating, negative effect."
Austrian Airlines Group's principal shareholder, state holding company OIAG, reached a deal with Saudi-Austrian investor Mohamed bin Iassa Al-Jaber to take a stake in the carrier through a capital increase ( ATWOnline, Feb. 22). The investment of approximately €150 million ($230.1 million) will enable Austrian Airlines to purchase three A320s for operations to the Middle East, Austrian media reported.
Barco said UK NATS selected its OSYRIS arrival management software for London Heathrow, Gatwick, Luton, Stansted and City airports. Contract includes software integration with the existing ATC system.
SAS Group said it will receive "slightly more" than SEK1 billion ($163.3 million) in cash and credit toward new aircraft purchases in settlement with Bombardier and Goodrich over the Q400 landing gear incidents that led the airline to retire its 27 Q400s last fall. As part of the settlement, SAS ordered 13 firm CRJ900 NextGens worth $474 million and 14 Q400 NexGens worth $356 million. It optioned a further 17 CRJ900s and seven Q400s. Delivery of the firm aircraft begins this fall and continues through 2011.
China Southern Airlines will shift its priorities from its traditional focus on domestic routes to a more ambitious commitment to international expansion, Chairman Liu Shaoyong said yesterday. Last year CZ opened 10 new international routes from Guangzhou. "We plan to open more international routes starting from Beijing to New York, London and Detroit, [plus] Guangzhou-Moscow by 2012," Liu revealed. He claimed that CZ's cargo business also will grow significantly. "I expect our cargo transport volume will increase threefold in the next few years," he said.
British Airways said it intends to seek a High Court injunction to prevent its pilots from taking strike action after conciliated talks broke down Friday night ( ATWOnline, Feb. 25). "If strike dates are issued, we will act to protect our customers by applying for an injunction," BA said. The parties are in dispute over the new OpenSkies subsidiary, which is scheduled to commence Paris-New York JFK service in June using non-BALPA pilots.
ExpressJet Holdings reported a $70.2 million loss in 2007 compared to a profit of $92.6 million in 2006. Revenue rose just 0.2% to $1.69 billion while expenses soared 16.3% to $1.79 billion owing to higher fuel costs and expenses related to the launch of its branded flying operation. It had an operating loss of $106.9 million compared to a profit of $140.1 million a year earlier. In an effort to stem the losses, the company will reduce its number of branded aircraft from 44 to 36 in April. The number of daily departures will be cut from 220 to 172.
Air France KLM board met yesterday and authorized the company to submit an offer for Alitalia Friday subject to certain pre-conditions, "including notably the commitment of the trade unions." Meanwhile, AF KLM dismissed a Le Figaro report that Chairman and CEO Jean-Cyril Spinetta will resign as CEO in October when he reaches age 65. He would remain chairman, the newspaper said, adding without citing sources that President and COO Pierre-Henri Gourgeon would succeed him.
Lufthansa released further details about its plans to operate its own private jet service beginning this year to replace the agreement it had with NetJets to provide the service. First announced three months ago ( ATWOnline, Dec.
Air China Acting Chairman Kong Dong said Friday that CA plans to introduce Cathay Pacific Airways as its partner in its bid for China Eastern Airlines to help improve CEA's management if the Shanghai-based carrier reverses its decision and accepts Air China's offer. CEA formally rejected Air China's bid last month ( ATWOnline, Feb. 19), but CA parent China National Aviation Holding Co. urged the airline to reconsider earlier last week.
Southwest Airlines claimed that both Boeing and US FAA approved its continued operation of 46 737 Classics for nine days in March 2007 even though the aircraft had not undergone required inspections, expressing dismay at the size of the agency's proposed fine for alleged safety lapses.
Delta Air Lines promoted Delta TechOps Senior VP Tony Charaf to president of the MRO division. VP-Maintenance Operations John Laughter was promoted to senior VP and VP-operational control and reliability while Neil Stronach was elevated to senior VP-operations control. Gil West will join DL as senior VP-airport customer service.
Qatar Airways plans to start all-premium flights out of Doha on medium-haul routes, CEO Akbar Al Baker told ATWOnline at last week's ITB tourism fair in Berlin, and aircraft configured with an all-first-class cabin should be operating by year end.
GE Aviation began a scrap reclamation program with Turkish Airlines as launch partner to recycle hardware containing rhenium. Program calls for customers to return scrap HPT blades made from nickel superalloys containing rhenium to GE. "The program will help them with their environmental efforts as well as help reduce the costs associated with material disposal. For GE, it will help us reduce our need for rhenium, which is a rare and costly element," VP-Supply Chain Scott Ernest said. Material is to be cleaned and melted for reuse.
China Southern Airlines Chairman Liu Shaoyong told reporters in Beijing yesterday that he hopes to sign a joint venture cargo agreement with Air France KLM this year, Reuters reported. "Our discussions with Air France are going smoothly," he said. The airline announced last year that it had entered into exclusive talks with AF-KLM to launch a JV freight carrier in China ( ATWOnline, May 16, 2007).
