Finnair said it will sell the last two MD-11s it owns to Aeroflot. The aircraft will be transferred in November 2008 and July 2009. Value of the sale is at least €30 million ($40.6 million). Finnair operates seven MD-11s, five of which are under leasing agreements that expire by the end of 2010, when it plans to have retired all MD-11s and operate a long-haul fleet of A330s and A340s.
China Southern Airlines and Air France KLM have entered into exclusive talks to launch a joint venture cargo carrier in China, AF KLM Vice Chairman and KLM President and CEO Leo van Wijk revealed recently in Beijing.
LAN Argentina pilots, maintenance personnel and ground employees staged a surprise strike beginning Monday that forced the cancellation of all of the carrier's domestic flights for the past two days. Labor leaders showed no signs of backing down yesterday. "The strike will continue," a pilots union representative told the Buenos Aires Herald. Management appeared to be caught off guard by the workers' absence and reportedly is seeking assistance from Argentina's Labor Ministry to resolve the dispute.
ABX Air, the Ohio-based all-cargo carrier that supports DHL's US air network, reported first-quarter net income of $4.3 million, down 46.9% from $8.1 million earned in the year-ago quarter, on a 22% drop in revenue to $288.1 million.
Royal Jordanian said yesterday that it posted a 2006 net profit before deducting "taxes and staff incentives" of JOD7.4 million ($10.4 million), its third consecutive profitable year but down 64.8% from the record JOD21 million earned in 2005 before distributing a profit share to staff.
China's airlines reported a collective first-quarter net loss of CNY820 million ($106.7 million), narrowed from a CNY2.14 billion deficit in the year-ago quarter, according to figures released by CAAC. Operating revenue rose 19.9% to CNY40.5 billion while costs increased 16.5% to CNY41.2 billion. Chinese analysts credited "drop of fuel price" and "strong market demand" for the improved performance. The government slashed the price of jet fuel by CNY180 per ton at the beginning of the year, according to the official state Xinhua News Agency.
American Airlines' business class upgrade for its 767-300s is progressing as planned, the carrier said last week in Brussels during a tour to present the new cabin. By summer, all 767-300s operating on Europe-New York JFK routes will be refurbished with the "next-generation" business class and at year end the process should be completed on its entire fleet of 58 -300s, which in addition to transatlantic services are operated on select routes within the US and to Latin America.
AerCap, the Dutch aircraft lessor, signed a firm order with Airbus yesterday for an additional 10 A330-200s valued at $1.6 billion, bringing to 30 the number of the type it has on order. "Since AerCap ordered 20 new [A330-200s] in December last year, we have already lined up customers for 13 out of the 20 aircraft," CEO Klaus Heinemann said. "The order for an additional 10 aircraft will help us to further expand our portfolio in the attractive market for modern, smaller widebody aircraft."
Northwest Airlines and China Airlines signed a cooperation agreement, to be implemented Aug. 1, that will include reciprocal frequent-flier benefits and lounge access as well as "one-stop check-in" for connecting passengers.
Icelandair Group signed a letter of intent Friday to acquire Travel Service, the largest private airline in the Czech Republic and owner of LCC Smart Wings. Travel Service operates charter flights to and from Prague and Budapest in addition to Smart Wings. Its revenue in 2006, when it carried more than 1.8 million passengers, totaled €190 million ($256.9 million). Its fleet comprises 12 737s. No acquisition price was released.
Iberia Group posted a first-quarter net profit of €12.2 million ($16.5 million), reversed from a €57.2 million loss in the year-ago period, owing to continued network restructuring and cost-cutting initiatives. Revenue rose 8.5% to €1.31 billion while costs increased 2.4% to €1.30 billion. Fuel expense, which represented 20% of total operating cost, lifted just 1.2% to €261 million. Fuel costs actually fell 1.4% in unit terms as the airline benefited from fuel consumption efficiency improvement associated with its fleet renewal.
Terra Firma, a European private equity firm, added to its portfolio of operating lease companies with the purchase of San Francisco-based Pegasus Aviation Finance. Price was not disclosed. Sellers were investment funds managed by Oaktree Capital Management and Pegasus senior management. Last year, Terra Firma acquired AWAS from Morgan Stanley for $2.5 billion in cash plus the assumption of liabilities.
Jet Airways appointed Emmanuel Menu GM-Continental Europe. He replaces Abraham Joseph, who is relocating to Toronto to lead the airline's expansion into Canada.
Air Canada reported a first-quarter net loss of C$34 million ($30.7 million), narrowed from a net loss of C$126 million in the year-ago quarter, on a 5.9% increase in revenue to C$2.53 billion. President and CEO Montie Brewer, noting that the first quarter is "traditionally the industry's weakest period" and that fuel costs were high, called the results "solid" and pointed to year-over-year improvement. "Performance in the domestic market, in particular, excelled," he said.
Record revenue and the proceeds from the sale of its stakes in Singapore Aircraft Leasing Enterprise and the SIA Building helped carry Singapore Airlines Group to a stunning S$2.13 billion ($1.4 billion) profit for the fiscal year ended March 31, a 71.6% surge over the S$1.24 billion earned in the prior 12-month period.
TAM reported first-quarter net income of BRL59.2 million ($29.2 million), down 53.3% from BRL126.7 million in the year-ago quarter, a drop mainly attributable to a 37.4% year-over-year increase in aircraft costs and a 40.9% rise in personnel expenses as the fast-growing Brazilian carrier continued to expand into the vacuum created by the near demise of Varig.
Anchored by Airbus's negative EBIT of €69 million ($93.4 million), parent EADS reported a €10 million net loss in the first quarter, reversed from a profit of €522 million in the year-ago period.
China Eastern Airlines stock continued to soar yesterday as widespread speculation continued that Singapore Airlines is on the verge of taking a significant stake in the carrier despite CEA's insistence that concluding any deal requires more time. In the statement, CEA refused to offer details about any negotiations with SIA, the most probable strategic investor ( ATWOnline, April 30).
Calling the move "a natural evolution of our leadership structure," JetBlue Airways founder David Neeleman yesterday yielded the CEO position to long-time President Dave Barger, who will retain that title while working to guide the New York-based LCC through highly publicized operational and financial turbulence. Neeleman will remain chairman, a role he took in 2002. "I will focus on developing JetBlue's long-term vision and strategy, and how we can continue to be a preferred product in a commodity business," he said in a statement issued yesterday.
Aeroflot this week confirmed that it achieved a RUB7.98 billion ($309.4 million) profit in 2006, a figure nearly identical to a third revision reported last month ( ATWOnline, April 19) and representing a 32.3% increase from 2005 earnings of RUB6.03 billion. "Reliability of annual financial statements is confirmed by the conclusions of the auditing commission and corporate auditor," SU said. Revenue rose 13.5% to RUB71.35 billion on an 8.7% gain in passenger numbers to 7.3 million.
A second fiscal quarter rife with operational difficulties resulted in a $24 million net loss for Mesa Air Group compared to a $5.3 million profit in the first three months of 2006. The company blamed weather, air traffic control problems and operations on behalf of United Airlines that were cancelled or significantly delayed. It also cited low yields and lower-than-expected revenue at its Hawaiian subsidiary go!. "We are clearly not happy with this report," Chairman and CEO Jonathan Ornstein said. "We know we are below Street expectations."
Lufthansa flew 9.6 billion RPKs in April, up 6.2% on the year-ago month. Capacity rose 5% to 12.72 billion ASKs and load factor improved 0.9 point to 75.5%.
ExpressJet Holdings' net income for the first quarter ended March 31 plunged 57.2% to $10.2 million from $23.7 million in the year-ago period as an ongoing contract dispute with regional partner Continental Airlines, higher pilot training costs and expenses related to transitioning 36 aircraft from its capacity purchase agreement with CO dragged on the bottom line.
American Airlines plans to maintain a low-to-negative growth strategy for the foreseeable future even as it accelerates deliveries of 737-800s to replace its MD-80 fleet ( ATWOnline, March 29). "It's very much about replacement, not growth," VP-Corporate Development and Treasury Beverly Goulet said yesterday at the Bear Stearns 2007 Global Transportation Conference, available via webcast.
BAA announced the sale of Budapest Airport to a consortium led by Hochtief Airport for £1.31 billion ( ATWOnline, Oct. 23, 2006). The UK airports operator said the decision was driven by parent company Ferrovial's desire to focus on its seven home airports. The sale is expected to be complete at the end of this month. Leeds Bradford International Airport has been sold to Bridgepoint, a private equity firm, for £145.5 million ($289.9 million) following a decision by West Yorkshire officials.
