A turbulent year for Brazilian commercial aviation and the acquisition of floundering flag carrier Varig hit hard at Gol's bottom line as the LCC's Gol Linhas Aereas Inteligentes parent reported an 82% plunge in full-year profit to BRL102.5 million ($58.6 million) from the BRL569.1 million earned in 2006, plus an operating loss.
SkyEurope Airlines conceded that it will not be profitable this financial year, which ends Sept. 30. Management told a shareholders meeting in Vienna last week that the LCC is working on maintaining its financial viability ( ATWOnline, Feb. 6). CFO Nick Manoudakis said it will continue to work on cutting costs and has asked pilots to reduce aircraft speed to save fuel. SkyEurope also is open to investment from other carriers, he said.
AirTran Airways CEO Robert Fornaro said last week that mergers are a good idea for struggling airlines that may need to reduce capacity but not for AirTran, which has been profitable consistently for nearly a decade and should benefit from consolidation. Speaking at an Aero Club luncheon in Washington, Fornaro said, "The industry needs to evolve and the quicker the better. .
Cathay Pacific Airways raised its stake in Air China from 17.5% to more than 18% through the Feb. 6 purchase of 15 million H shares, according to a statement released by the Hong Kong Stock Exchange last week. CA Board Secretary Huang Bin noted that Cathay may have want to avoid any dilution of its cross-shareholding in CA, as the latter plans to circulate 400 million additional A shares to raise funds for the acquisition of 54 aircraft ( ATWOnline, Nov. 5, 2007).
Cathay Pacific Airways and Dragonair flew 7.79 billion RPKs in January, up 17.8% on the year-ago month. Capacity rose 10.2% to 9.47 billion ASKs, lifting load factor 5.3 points to 82.3%. Hawaiian Airlines flew 651.7 million RPMs in January, up 4.6% from the year-ago month. Capacity climbed 5.8% to 784.7 million ASMs and load factor slipped 0.9 point to 83.1%.
JADE won US FAA STC authority under the Singapore-US Bilateral Aviation Safety Agreement for cabin interior reconfiguration modification on Singapore Airlines 747s. SIA, SIA Engineering and Singapore Jamco participated in JADE's application. This is the first STC granted under the Singapore-US BASA.
Asiana Airlines will invest KRW23 billion ($24.3 million) in startup Busan International Air and become the managing shareholder of the new carrier with a 46% stake, it announced yesterday. Now capitalized to the tune of KRW50 billion, BIA will "focus on offering customers low fares but with the quality service and safety assurance that is synonymous with Asiana Airlines," the latter said. An Asiana "taskforce" will begin working on launching service. No further details were released.
SAS Group became the principal shareholder in GO, a Norwegian company launched last May that sells travel through the SAS, Avis Budget Group and gonow.no websites. SAS bought out Reitan Group, which will maintain its distribution agreement with GO.
Massachusetts Port Authority announced a new financial incentive package called the International Air Service Incentive Program designed to help Boston Logan "compete more aggressively for international airline service." It will apply to new nonstop international flights to Asia, Central America, South America, Africa, the Middle East and Mexico City and is intended to "minimize the initial business risk of the air carrier." Massport said ASIP "is not designed to subsidize a service that is not likely to be self-sufficient." BOS currently offers flights to 32 international destinations.
Mesa Air Group, which provides regional lift for Delta Air Lines, United Airlines and US Airways and operates independently as Mesa Airlines and go!, reported a $4.2 million loss in the fiscal first quarter ended Dec. 31, reversed from an $8 million profit in the year-ago period. "We are certainly disappointed with the results," Chairman and CEO Jonathan Ornstein said. "We are confident in our plans, however, to shrink our less-profitable 50-seat fleet and grow with our larger, more profitable regional jets.
Iberia is in and Grupo Marsans is out as the sale of SAS Group subsidiary Spanair took a dramatic turn yesterday. Marsans presented a formal offer in December but yesterday withdrew its interest, with a spokesperson telling Thomson Financial that the tourism conglomerate that counts Aerolineas Argentinas among its subsidiares "feels a bit betrayed" by SAS's decision not to keep the bidding private.
Alitalia reported significantly improved financial results for 2007 yesterday but stressed that its survival continues to be "increasingly linked" to its ability to raise approximately €750 million by mid-year.
Norwegian reported a 2007 net profit of NOK84.6 million ($15.4 million), reversed from a NOK22 million loss the prior year, as expansion and the acquisition of FlyNordic boosted its bottom line ( ATWOnline, July 3, 2007). Full-year operating revenue climbed 43.7% to NOK4.23 billion against a 35.8% increase in operating expenses to NOK3.72 billion.
A year in which Air Arabia signaled its ambition with an IPO and a significant aircraft order ended with a AED376 million ($102.4 million) net profit, more than three times the AED101 million profit reported in 2006. Revenue rose 71.3% to AED1.28 billion and passenger numbers climbed 53.2% to 2.7 million.
Belavia Belarusian Airlines CRJ100ER flipped over and caught fire at Yerevan Zvartnots International yesterday. There were no fatalities but at least four passengers were hospitalized with burns. The BBC and Associated Press reported that Armenian civil aviation head Artyom Movsesyan said the aircraft's wing touched the ground on takeoff, causing it to flip over and burn. "Nearly everyone onboard received burns of various degrees," an aviation authority spokesperson said, according to several press reports.
"Ever-higher" fuel costs, striking employees, steeper taxes and what Air France KLM described as a "negative impact from the revaluation of derivative instruments" weighed heavily on the company's profit in the fiscal third quarter ended Dec. 31, although its operating result remained robust.
AirAsia X yesterday confirmed the sale of 10% stakes to Bahrain-based Manara Consortium and Japan's Orix Corp. for a combined MYR250 million ($77.2 million) cash consideration ( ATWOnline, Feb. 14). Each investor will receive approximately 16.7 million newly issued shares of common stock. Orix also holds a stake in Japanese LCC Skymark Airlines.
IER said Billund Airport contracted it to install 12 of its 918 common-use self-service kiosks, four of which will be equipped with an active eyecatcher to display airport information. Billund also chose IER's IMS to supervise kiosk operations independently. Kiosks are slated to be operational next month.
Bmi will lease two 757-200s to expand its medium-haul network further from London Heathrow. In December, Chairman Michael Bishop told ATWOnline that bmi was looking for additional capacity, possibly 757s or 767-200s, to support growth on several former BMED routes that were performing well ( ATWOnline, Dec. 24, 2007). The aircraft have been wet-leased from Astraeus for two years with an option to extend.
AirAsia X will sell 10% stakes to private equity funds in Japan (Orix Group) and Bahrain (Perigon Capital) for a combined $75 million, an official told Agence France Press, in order to raise money for the purchase of 25 A330-300s. Virgin Group acquired a 20% stake in the startup last summer ( ATWOnline, Aug. 13, 2007). The AirAsia X official was quoted by AFP but declined to be named.
China Eastern Airlines continues to press on in its effort to reach a deal with Singapore Airlines and plans to cooperate with SIA parent Temasek to fashion terms that will be acceptable to minority shareholders, who vetoed the sale of a 24% stake last month.
Ryanair will take its Internet and call center booking system offline from 10 p.m. Feb. 22 until 11 p.m. Feb. 25. The LCC said the move is necessary to "change over to a new flight booking system," which it is doing in order to comply with a UK Office of Fair Trading mandate that requires all taxes and fees to be included in an advertised ticket price. The carrier reportedly missed a Jan. 31 deadline and received an extension to the end of February.
Synergy Aerospace, the Colombia-based conglomerate that is the parent of Avianca, SAM, Brazil's OceanAir and Ecuador's VIP, signed an MOU with Airbus for the purchase of 10 A350 XWB-800s plus 10 options, the manufacturer announced.
WestJet demonstrated its ability to manage costs and capacity in both the final quarter of 2007 and the full year, reporting record net earnings in both periods. Its full-year profit of C$192.8 million ($192.7 million) represented a 68.2% improvement over the C$114.7 million reported in 2006. Fourth-quarter net earnings of C$75.4 million were nearly triple the C$26.7 million earned in the year-ago period, though they were boosted by a $33.7 million gain related to a reduction in Canada's corporate tax rate.
Deccan Aviation VP-Finance Anand Ramachardran said that the Kingfisher Airlines-Air Deccan merger likely will be completed in April following a sale of shares that will raise $300 million to finance immediate expansion needs ( ATW, February 2008). "At the present moment, we are in talks to appoint a suitable merchant banker for the share sale by the end of this month," he said this week at a financial conference in Mumbai.
