Dublin-based Aergo Capital reached agreement to acquire the aviation assets of South African Imperial Holdings, comprising Safair and Safair Lease Finance. Aergo currently has 65 commercial aircraft on its portfolio on lease to 20 carriers and will add 31 with the Safair acquisition.
US Airways Group took a $622 million noncash charge in the second quarter to write off the goodwill it had recorded on its balance sheet that was created by the merger of the old US and America West Holdings three years ago. It said the charge was the result of an interim period goodwill impairment test performed due to the high fuel prices "that have adversely impacted the company's business." It said it also will report an $18 million noncash charge related to the decline in value of specific 737 spares. It will announce its second-quarter results on July 22.
US Air Transport Assn. said airlines' composite cost index in the first quarter rose 31.3% year-over-year to 228.7, the fastest growth since the second quarter of 1980 and greater than the US Consumer Price Index increase of 4.2%. Fuel climbed 28.7% and accounted for 29.4% of first-quarter operating costs. Overall unit cost rose 12.4% to a record 13.72 cents while yield climbed 2.6%.
Delta Air Lines CEO Richard Anderson will run the merged DL/Northwest Airlines out of Atlanta, the carriers announced yesterday as they unveiled the senior management team for what would be the world's largest airline, saying the team will "ensure the seamless transition of Northwest's operations into Delta over the next 12-24 months."
Vietnam Airlines reported a loss of $5 million in the first half of 2008, Reuters reported from Hanoi. It posted a pre-tax profit of $13.3 million in the year-ago semester. Revenue in the recently completed six-month period climbed 28% year-over-year to $733 million and passenger numbers rose 15% to 4.4 million.
SAS Group likely will announce a new cost savings program featuring further "dramatic" cuts as it grapples with high fuel prices and weakening demand, CEO Mats Jansson told Sweden's Dagens Industri. SAS announced in April the removal of 11 aircraft from the fleet and a workforce reduction of 1,000 employees ( ATWOnline, April 30).
GMT Global Republic Aviation announced the acquisition of four A320-200s worth $68 million from Aercap Holdings. Aircraft are on lease to TAM until 2012. Dublin-based GMT now owns 16 aircraft.
The SpiceJet board yesterday announced that asset management firm WL Ross & Co. will invest approximately $80 million in the New Delhi-based LCC as Kingfisher's efforts to acquire the carrier were rebuffed.
Chinese carriers experienced declining market demand in June owing to slowing domestic economic growth and the continuing effect of natural disasters, according to CAAC. Passenger numbers fell 3.8% year-over-year to 14.2 million and load factor was down 2.1 points to 72.3%. Daily utilization dropped sharply, falling 10.5% to 8.5 hr. due to route cancellations caused by rising fuel prices. Half-year passenger numbers grew 5.4% to 91.8 million and load factor remained level at 74.1%. Utilization rate fell 6.3% to 9 hr.
Continental Airlines said it will report a $22 million special gain when it announces its second-quarter results Thursday. The gain is the result of a variety of special items. CO took a $58 million charge representing impairment charges recorded for owned aircraft and related spare parts, including a $51 million writedown in the value of its 737-300/-500 aircraft and related assets ( ATWOnline, June 6).
Air Macau has become another victim of surging oil prices and is clinging to survival as it awaits help from parent Air China Group. According to China Business News, the Macau carrier posted a net loss in excess of MOP200 million ($24.6 million) in the first six months of this year, more than half of its registered capital of MOP400 million.
Republic Airways Holdings will cut 10% of its employees, or 500, "in response to changing market conditions and expected reductions in its small jet contract flying," it said Friday. It said cuts will take place over the next several months and that "a portion will occur through normal attrition." Chairman, President and CEO Bryan Bedford said the reductions "reflect our response to the actions our network partners are taking to reduce the size of their domestic hub operations in light of sustained, high fuel prices.
Lufthansa Chairman and CEO Wolfgang Mayrhuber told ATWOnline at last week's Star Alliance meeting in Cairo that "we face heavy headwinds and will have a very close look at capacity for the coming winter schedule," with several options for reductions already available should demand weaken. "Thanks to our writeoff policy [after 12 years aircraft are written off the balance sheet], we can ground in a worst-case scenario up to 80 aircraft without suffering cash losses in terms of leasing contracts," Mayrhuber said. LH owns 80% of its fleet.
CAAC reported that Chinese carriers transported 14.2 million passengers in June, down 3.8% from the year-ago month, while cargo traffic declined 0.8% to 321,000 tonnes.
Midwest Airlines and its Skyway subsidiary will reduce the workforce by 40%, equal to approximately 1,200 employees, as a result of its decision to remove its MD-80s from service this fall and in anticipation of "other schedule adjustments to be announced," it said yesterday.
Virgin Blue shares climbed yesterday after majority shareholder Toll Holdings, an Australian logistics company, announced its long-awaited disposal of its 62.7% majority stake in Virgin Blue Holdings. Toll will distribute 98.3% of its stake in Blue to Toll shareholders by way of a special dividend, while Blue shareholders will benefit from the significantly increased liquidity in Virgin Blue shares.
Air Berlin said it received permission from German authorities to carry out test flights using its satellite-supported Ground Based Augmentation System installed on 737NGs delivered since June 2007. GBAS approaches will be used alongside standard ILS in Berlin and Malaga. AB said it is the only European airline using GBAS.
United Airlines parent UAL Corp. announced Friday that its second-quarter financial result, expected to be revealed July 22, will be impacted by $2.6-$2.7 billion in noncash accounting charges. Up to $2.2-$2.3 billion is related to impairment of goodwill. "Following an evaluation of the carrying value of the company's goodwill pursuant to FAS 142, the company has concluded that the entire value of goodwill on its books has to be written off," UAL said.
Aerolineas Argentinas' future ownership structure, agreed to earlier this year, has been cast in doubt and Argentina's government reportedly is considering a full nationalization of the carrier. Spanish tourism and transport giant Grupo Marsans announced in May that it had agreed to lower its holding in AR from 95% to 35% so the government could raise its stake from 5% to 20%, airline employees could take 10% and Argentine private investors could hold the rest.
Air Berlin confirmed Friday that it no longer is interested in acquiring Condor Airlines from Thomas Cook Group ( ATWOnline, June 26). It said the share swap deal, announced last fall, was "cancelled by mutual agreement," while the parties "have agreed to continue negotiations regarding the feasibility of alternative solutions." In a statement to the German Federal Cartel Office, AB and Thomas Cook said the changing economic environment, including the soaring cost of fuel, was the "main reason" for the contract's cancellation.
The initial problems at London Heathrow's new Terminal 5 that resulted in hundreds of flight cancellations and delays and an overwhelming luggage pileup that cost sole tenant British Airways some £16 million have been resolved, officials claimed.
Airbus named Executive VP and head of the A380 program Mario Heinen as the new executive VP-head of the Transnational Centre of Excellence, Fuselage and Cabin, replacing the departed Rudiger Fuchs. The COE comprises all Airbus commercial aircraft as well as the A400M and MRTTs. Executive VP in charge of the A320 program Alain Flourens succeeds Heinen. Flourens will be succeeded by Executive VP-Deputy Head of Procurement Daniel Baubil.
Aircelle subsidiary SLCA won a five-year contract with Embraer to produce composite parts for E-170s, E-190s and Phenom 100s. Contract covers parts supply for cockpit integration of E-170s, -175s, -190s and -195s, as well as rear fuselage components for Phenom 100s. Deliveries are scheduled for early 2009.
Boeing said yesterday that its second-quarter financial results will include a charge of approximately $0.22 per share, or $250 million, owing to delays in its Airborne Early Warning & Control program. The manufacturer continues to expect earnings per share of $5.70-$5.85 for full-year 2008 "as companywide performance and productivity are expected to offset the AEW&C charge by year end." Its EPS guidance for 2009 remains unchanged at $6.80-$7.00.
