Air Madrid, which declared bankruptcy and suspended operations last month ( ATWOnline, Dec. 18, 2006), was unable to reach a rescue deal with Germany's LTU but remains confident a buyer will emerge, according to Spanish press reports cited by AFX News.
Indian airlines are preparing for INR180-200 million ($4.1-$4.5 million) in combined losses resulting from days of heavy fog in Delhi, according to The Economic Times. Runway visibility was down to 100 m. as 35 arrivals and 50 departures were cancelled Tuesday, with another 61 diverted. The three-day total of cancellations and diversions reached 300, the paper said. Air Deccan said it has canceled 15-20 flights on each of the past three days and faces losses of more than INR40 million.
Continental Airlines, the highest earning US carrier in the 2006 third quarter with $237 million in net income, said it expects to report a "modest loss" for the fourth quarter, adding that consolidated RASM likely will increase 4.1%-4.4% with mainline RASM growing 5.5%-6.5%.
ExpressJet Airlines flew 861.1 million RPMs in December, up 5.4% from the year-ago month. Capacity climbed 3% to 1.12 billion ASMs and load factor rose 1.7 points to 77.1%.
Cyprus Airways said it has completed its restructuring process ( ATWOnline, Jan. 11, 2006) and is expecting to turn a profit this year. It lost CYP23.2 million ($53.1 million) in 2005 and has not announced its 2006 results. The carrier cut 500 employees from a staff of 1,800 and implemented salary cuts of up to 25% but in line with an increase in productivity. It also announced the addition of Sofia, Heraklion and Rhodes to its network.
Delta Air Lines reported a $49 million net loss for the month of November, or a $12 million loss excluding reorganization items. The result compares to a $181 million net loss and a $164 million loss excluding reorganization items in November 2005. "November's results continue the momentum that will deliver a nearly $2 billion year-over-year improvement in Delta's net income excluding reorganization items for 2006," VP and CFO Edward Bastian said.
Germanwings MD Thomas Winkelmann said the LCC is expecting to increase its turnover this year by 15% compared to 2006 based on an expected load factor of 82% and more than 8 million passengers. "We plan to grow profitably in 2007. We will add three more A320s to our fleet, new destinations and will present new innovations in the first quarter of this year," he said. Separately, the airline announced several new European services to launch by March 25.
LAN Airlines board scheduled an extraordinary shareholders meeting for Jan. 26 to approve a capital increase of 7.5 million common shares (equivalent to 1.5 million American Depository Shares). Part of the proceeds will be used for a stock option plan, LAN said.
Ryanair said it filed a legal action in the Council of State, France's highest administrative court, against the government and a complaint to the European Commission challenging what the LCC called "an unlawful labor decree" that forces foreign airlines to apply domestic labor laws when basing aircraft in France. Ryanair claims that the regulation, which came into force Nov. 23, "is contrary to European laws on free movement of labor and services and the freedom of establishment and is also contrary to the liberalized air transport market."
Nordam Group extended Ken Lackey's tenure as chairman and CEO through 2008. President and COO John Uczekaj left the company. CFO Bill Peacher will take over as COO of Nordam's Repair Group and Lackey will handle COO duties for the manufacturing divisions.
Korean Air last week finalized its $5.6 billion order for 10 777-300ERs, five 747-8Fs, five 777Fs and five 737NGs, along with options for eight additional aircraft (four -300ERs, two -8Fs and two 737-900ERs). The purchase agreement was signed in November ( ATWOnline, Nov. 22, 2006). Deliveries will begin in 2009. Separately, KE is expecting to post a KRW240 billion ($255 million) pre-tax profit in 2007, 33.3% higher than the KRW180 billion expected for 2006, according to a regulatory filing cited by Reuters.
Serial airline investor FL Group was busy over the holidays, announcing that it had purchased a 5.98% stake in American Airlines parent AMR Corp. for more than $400 million and selling LCC Sterling Airlines for €210 million ($277 million) in cash and a three-year shareholder loan to Icelandic consortium Northern Travel, of which FL Group is a member. FL Group now is AMR's third-largest shareholder with 12.8 million shares. It said it has been building the stake "for a considerable period of time" and made the announcement once it exceeded the 5% reporting threshold.
World Air Holdings, parent of World Airways and North American Airlines, last week said it posted a $5.9 million net profit in the third quarter ended Sept. 30, up 8.5% from the $5.5 million earned in the year-ago period. Its operating income of $8.2 million was a 20.2% decline from the year-ago quarter's but higher than the $6-$8 million forecast in November when it announced the delay in its third-quarter report ( ATWOnline, Nov. 22, 2006).
Jet Airways signed a purchase agreement for 10 787-8s "in order to maintain and expand the company's international operations. . .and to deploy the most modern and economically efficient aircraft," the airline said yesterday in a filing with the Bombay Stock Exchange. Jet expects to take delivery between July 2011 and December 2012. No engine choice was indicated. Boeing confirmed the order and said the aircraft are valued at more than $1.5 billion at list prices.
SriLankan Cargo will launch a regional charter service that will include destinations not served by regularly scheduled flights. It said it will obtain all landing clearances. It operates two freighters and also carries cargo on 14 mainline aircraft.
Monarch Airlines carried more than 3.2 million scheduled passengers in 2006, a 24% increase over 2005 when the UK-based LCC carried 2.6 million. The figures exclude charter activity and represent earned seats flown on scheduled services to Spain, Gibraltar, Portugal and Cyprus from Aberdeen, Birmingham, London Gatwick, London Luton and Manchester. Monarch will increase capacity on a number of popular services and launch eight new routes in 2007: To Ibiza from LGW, LTN, BHX and MAN, LGW-Murcia, LTN-Almeria, LTN-Larnaca and MAN-Jerez.
OVER THE LONG TERM, AIR CARGO is a reliable growth industry. Nearly all experts tracking the movement of airfreight globally, including both Boeing and Airbus, project average annual scheduled air cargo traffic growth of about 6% over the next 20 years, higher than the anticipated rate of growth for passenger traffic. But from year to year, and even within the same year, airfreight traffic can fluctuate wildly, subject to the changing winds of an unpredictable and often volatile global economy.
THREE YEARS INTO AN AMBITIOUS transformation plan intended to enable Alaska Airlines to grow and prosper in both good and bad times, executives here say they are making solid progress in achieving the goals of "Alaska 2010." Unit costs are falling, revenues are rising and the improvements are finding their way to the bottom line. Excluding special items, earnings at the parent company level for the third quarter ended Sept. 30 totaled $77.9 million compared to $71.5 million a year earlier on an 11% rise in revenues to $936 million.
AFTER A DREAM RUN THAT SAW the doubling of capacity in two years and the opening up of dozens of routes all over the country, India's domestic airline industry seems to be headed for a hiatus. Signs of weakness in the sector are now there for all to see. Every airline is battling red ink and the carriers are expected to tot up aggregate losses of more than $500 million for the year to March 31, 2007.
FOLLOWING A BETTER-THAN-expected 2006, 2007 may well be the peak year in the current airline earnings cycle and certainly will surpass last year's result. Analysts with whom ATW spoke are guardedly optimistic about the New Year, with expectations for the first industrywide net profit since 2000 barring any new shock(s) to the system.
Air Transport Assn. promoted Marc Gonzales to VP-congressional affairs. Airports Council Int'l.-North America elected Joseph W. Walter as chair and Susan Kurland as vice chair, 2007 Associates Board. Alaska Air Group elected Brandon Pedersen VP-finance & treasurer and Andrew Harrison MD-financial planning & analysis. Alpha Airports Group named Martin Flower chairman.
Lufthansa signed an MOU to sell its 50% stake in leisure travel group Thomas Cook to KarstadtQuelle for €800 million ($1.05 billion) but will raise its stake in Condor Flugdienst from the present 10% to 24.9% and receive the shares held by Condor in Turkish holiday airline SunExpress.
Mesa Air Group signed an agreement with Shenzhen Airlines to create a Chinese regional carrier, yet to be named, that is expected to begin service within the next year operating 50-seat regional jets.
Delta Air Lines should "consider methodically, proactively and fairly strategic alternatives to its standalone Chapter 11 plan," a group of "unofficial" unsecured creditors said last week in a statement. The group of 17 creditors unaligned with the official creditors committee said it "appreciates" the DL standalone plan ( ATWOnline, Dec.
Star Alliance expelled Varig from its ranks just two weeks after CEO Jaan Albrecht told reporters at a briefing in Istanbul that the restructuring Brazilian carrier was a member in "good standing" ( ATWOnline, Dec. 11).
