Emirates Executive Vice Chairman Maurice Flanagan remains imperturbably upbeat despite the challenges facing the global air transport industry. Bucking all recent trends, including fuel price increases that have pushed the fuel element of total airline costs from 13% five years ago to 30% today, the Dubai-based carrier continues its seemingly inexorable progress on the path to growth and increased profits.
Delta Air Lines reached aircraft purchase and sale agreements with Boeing and two aircraft lessors yesterday as part of an effort to right-size its fleet to emerge from bankruptcy as a standalone carrier with a heavy emphasis on international services.
AirTran Airways would be interested in acquiring assets from Delta Air Lines or US Airways if those carriers need to make sales to alleviate anticompetitive concerns in order to facilitate a potential merger, President and COO Bob Fornaro said yesterday.
Air Canada said new aircraft entering its fleet will continue to drive operating costs down. Costs were down across the board in the first nine months of 2006, Executive VP and CFO Joshua Koshy said yesterday in New York at the Calyon Securities Airline Conference, which was available via webcast.
Boeing confirmed this week that UK tour operator First Choice Airways ordered an additional two 787-8s for delivery in 2011. First Choice, the European launch customer for the 787, placed its first order for six in July 2004. It now has eight on firm order, with the first set to enter service in 2009. "This follow-on order from our European launch customer...speaks volumes about their belief in the exceptional benefits the 787 will bring to their passengers," Commercial Airplanes VP-Sales-Europe, Russia and Central Asia Marlin Dailey said.
Kenya Airways said it will lease three E-170s from GE Commercial Aviation Services to help expand its domestic and regional routes. The first two will be delivered in May and June 2007 and the third in June 2008, replacing Saab 340B turboprops. By the end of this month, Kenya Airways also will have taken delivery of three 737-800s it is leasing from Singapore Aircraft Leasing Enterprise.
Philippine Airlines yesterday placed firm orders for two 777-300ERs plus two options and signed a letter of intent with GE Commercial Aviation Services to lease two more dash 300ERs. PAL said deliveries of the purchased and leased dash 300ERs will begin in the 2009 third quarter and continue through 2010. The aircraft on option will be delivered in 2011 and 2012. The airline said it will operate the aircraft in a two-class configuration seating up to 368 passengers.
ANA Aviation Services was named UK cargo sales agent for Florida West International Airways. ANA partner NAS Network Airline Services will represent FWIA as its cargo sales agent in France.
Bankrupt Northwest Airlines said in a court filing yesterday that it has agreed to sell seven DC-10-30s to ATA Airlines, a transaction NWA said would bring "relief" that will help it to reorganize and eventually emerge from Chapter 11 protection. The carrier plans to retire all its DC-10s by the end of next month and said it marketed the seven planes to "70 potential purchasers." ATA's offer, which was not revealed, "represents the best available transaction for the sale of the aircraft," it said in the filing.
Lufthansa's board yesterday approved orders for 20 747-8 Intercontinentals--the first of the variant to be sold by Boeing--plus 20 options and seven A340-600s, a total investment in long-haul planes valued at nearly $7 billion.
CAE signed contracts for three full flight simulators: A 777-300ER and an A330/A340 for Jet Airways and a 777-300ER for Air Canada. Both contracts include a suite of Simfinity training devices. The AC contract includes an option to provide a second 777 simulator. CAE valued the orders at list prices, including some buyer-furnished equipment, at C$51 million ($45 million).
Nordam Group is expanding its Singapore Changi MRO facility, which it plans to triple in size to 185,000 sq. ft., "in response to a strong Asian repair market, increased workloads and development of new generation nacelle repairs."
US Airways Chairman and CEO Doug Parker yesterday reiterated his company's commitment to its proposed $8 billion takeover of bankrupt Delta Air Lines, calling on DL's board and creditors' committee to begin due diligence on the merger offer. Parker's statement came a day after he told USA Today that the merger is "not going to happen" unless Delta management, which repeatedly has opposed the US plan, endorses the offer and works "together" with US to implement the merger. He said DL executives need to be convinced "that this plan makes sense."
BMED said it is getting a better-than-expected response from passengers for new A320/A321 services from London Heathrow to the West African cities of Dakar, Senegal and Freetown launched in late October. "We do research on route development and Senegal and Freetown came up as a good opportunity for our airline," BMED CEO David Richardson told ATWOnline this week at the British Embassy in Washington. He said Heathrow-West Africa bookings for December and January are "more than we thought.
Ryanair extended the deadline for its offer for Aer Lingus shares once again, this time to the afternoon of Dec. 22, lending credence to EI CEO Dermot Mannion's acknowledgement at last week's Future of Air Transport conference in London that the LCC is "not going anywhere anytime soon." Ryanair issued the extension yesterday despite the fact that valid acceptances have been received for just 4.96 million shares, representing 0.93% of the issued share capital of the recently privatized flag carrier.
Continental Airlines converted 12 737NG orders to orders for the 737-900ER, raising its firm commitment for the new variant to 24. It has 60 737s on order with an option to convert more to the dash 900ER, which can fly up to 3,200 nm., or 500 nm. farther than the dash 900. It made the initial 12-aircraft conversion four months ago, becoming the first US carrier to order the type ( ATWOnline, Aug. 4).
It appears that those behind the proposed A$10 billion ($7.88 billion) bid to take Qantas private have restructured their offer to avoid oversight by Australia's Foreign Investment Review Board.
Boeing sold a combined three 787s, plus two options, yesterday to Arkia Israeli Airlines parent Nakash Group of America and business aviation firm PrviatAir of Switzerland. Nakash's order for two dash 9s and two options is worth $336 million at list prices and scheduled for delivery in 2012. It did not announce an engine choice for the aircraft, which will be used on routes to North America and the Far East. Arkia operates one 757-200, two 757-300s, four ATR 72-500s and five Dash 7s. PrivatAir's order had been listed on Boeing's website under an unidentified BBJ customer.
Mexico's airline industry is facing a significant overcapacity situation following the emergence of several new entrants, Aeromexico CEO Andres Conesa said last week at the ALTA Latin American Airline Leaders Forum. According to Conesa, Mexico currently has an average of eight airlines competing on city-pairs of more than 1 million annual passengers compared to four in the US. Furthermore, the top 10 busiest domestic routes have 1.8 times the number of seats required to meet demand versus 1.2 in the US.
Island Air, mired in the battle for regional airline supremacy in Hawaii ( ATW, December 2006), announced a restructuring that includes cutting 65 employees, reducing its fleet by two aircraft and cutting five routes from its network. Along with Hawaiian Airlines and Aloha Airlines, Island has been engaged in a struggle for market share since the arrival in June of low-cost Mesa Air Group subsidiary go!.
SkyEurope Airlines ended its first full fiscal year as a listed company deeper in the red as it doubled its net loss in the 12 months ended Sept. 30 to €57.3 million ($76.4 million) from the €28.6 million shed in the previous year. Revenues rose 41% to €158.6 million against expenses of €213.8 million, widening operating loss to €55.2 million from €33.6 million last year. Net loss in the fourth fiscal quarter totaled €7.1 million.
JetBlue Airways reduced by 32 the number of firm Embraer 190 aircraft it will take from 2007 through 2010 in order to "manage capacity growth while retaining maximum flexibility," it said yesterday. It also said it anticipates 14%-17% ASM growth in 2007 rather than its originally forecast 18%-20%. Under a revised schedule announced Monday, the LCC will take 10 E-190s per year over the next four years instead of 18 per year. However, it added options for 23 during the period, up from zero.
Pratt & Whitney and Turkish Airlines Technic signed an MOU yesterday to build a "major" aircraft engine overhaul facility at Istanbul Sabiha Gokcen, site of Technic's HABOM MRO initiative ( ATWOnline, Nov. 6). Financial terms were not disclosed. The joint venture will work on CFM56s and V2500s and expects to handle up to 200 engines annually.
Delta Air Lines announced a "comprehensive settlement agreement" with the US Pension Benefit Guaranty Corp. that will "resolve all issues" related to the termination of its pilots' defined benefit pension plan ( ATWOnline, Sept. 6). Under the terms, PBGC will be allowed a pre-petition unsecured claim against the airline of $2.2 billion and the debtors' reorganization plan will provide for the distribution of $225 million in senior unsecured notes to the agency.
