Although it is too early to tell whether the second quarter marked the beginning of US passenger airlines' financial comeback or was merely a brief respite from years of red ink, flat capacity growth and strong demand were enough to overcome $2.10 fuel for at least three months. Following on the heels of a solid first period, the quarter ended June 30 clearly was the industry's best since 2000. For the first time since 9/11, the phrase "net income" appeared far more frequently in earnings reports than "net loss."
Lise Fournel, the airline's senior vice president of e-commerce and chief information officer, said the new system will take a modular approach and include all reservations, inventory control, seat availability, check-in and airport operations systems. The transition to the new reservations system is slated for next year. Airport modules will probably be rolled out in 2008. ITA already has some modules in place, she said, such as domestic and international faring, but the airport systems will be entirely new.
Delta Air Lines is back in the black, reporting a July net profit of $69 million in a filing this week with the US Bankruptcy Court. It lost $41 million in the year-ago month. The result included $30 million in reorganization items, without which its monthly profit would have risen to $99 million. "July's results reflect the continued momentum of our restructuring," Executive VP and CFO Edward Bastian said.
Aloha Airlines parent Aloha Airgroup named Gordon Bethune chairman. He retired as Continental Airlines chairman and CEO in December 2004. ATA Airlines named Gary Ellmer, formerly of American Eagle, as senior VP-operations and GM-charter.
Air France-KLM Group yesterday raised its full-year forecast and said it expects to "generate a significant increase in operating income compared to last year" as it reported a net profit of €244 million ($313 million) for its fiscal first quarter ended June 30, more than double the €112 million earned in the year-ago quarter. Operating income rose 84.3% to €411 million from €223 million on an 11.9% increase in revenues to €5.8 billion. Expenses climbed 11.8% to €3.24 billion, driven by a 24.8% jump in fuel costs to €1.01 billion.
Dragonair was hit hard by fuel prices in the first half of 2006 and reported a loss of HKD43.3 million ($5.6 million), a reversal from a HKD95.2 million profit in the year-ago period. China National Aviation Co., which for now holds 43.3% of Dragonair, told Hong Kong media that fuel prices climbed 32% for the semester. Passenger revenues increased 8.5% to HKD2.97 billion on a 10.2% rise in passenger numbers to 2.6 million. Load factor improved 0.5 point to 64.6%.
Aer Lingus will report half-year profits of just under €20 million ($25.7 million), up 27% from the €15.5 million earned in the first six months of 2005, according to Irish press reports. It is forecasting a full-year profit of €92.5 million, an increase of 7.8% from the €85.8 million earned in 2005. It reportedly attributed the first-half growth partly to a 12% increase in passengers on European routes.
TUI board announced yesterday that the company's two German airlines, leisure carrier Hapagfly and low-fare scheduled airline Hapag-Lloyd Express, will merge "in order to ensure that results targets in the tourism division are met. Even though margins remain under pressure, further efficiency improvements are being realized," TUI said. "Deterioration of exogenous market conditions in both areas of business [tourism and shipping]" has resulted in "unsatisfactory results and an unsatisfactory assessment of TUI AG on the capital markets." Further details will be determined by December.
TAP Portugal said in a statement yesterday that it is pursuing "potential acquisition [or] shareholder participation" in rival Portugalia Airlines. "The process is in its initial phase and no formal commitment has yet been entered into by the interested parties," the company said. TAP is working with Espirito Santo Financial Group.
Southwest Airlines promoted Senior VP-Ground Operations Greg Wells to senior VP-operations effective Sept. 1. VP-Station Operations Chris Wahlenmaier will add Wells' former title and Senior Director-Ground Operations Stations Teresa Laraba will become VP-Ground Operations, sharing duties with Wahlenmaier. Lufthansa Cargo Charter appointed Monika Houck head of global sales and customer relations.
Air Dolomiti will test a new business model and begin feeding Lufthansa's Munich hub with daily morning flights from 16 Italian destinations. According to Financial Times Deutschland, the Verona-based LH subsidiary must change its operations completely in order to fly from each destination in the morning. CEO Michael Kraus said the new model will raise operational costs 10%-15% but LH will benefit from more Italian business travelers. Kraus also said it could be possible to change Air Dolomiti's fleet to 100-seat jets.
Malaysia Airlines reported a second-quarter net loss of MYR177.1 million ($48.2 million), narrowed from a net loss of MYR277.5 million in the year-ago quarter, on a 6% rise in revenues to MYR609.6 million, according to press reports. MD and CEO Idris Jala said the company's cost-cutting program is "showing positive results," evidenced by an 18% improvement in passenger yield and a 10.5% gain in cargo yield, according to Malaysian national news agency Bernama. Jala added that MAS is "on track" to achieve profitability in 2008 but projected a full-year 2006 loss of MYR620 million.
Ryanair concluded a deal with OnAir to outfit its fleet of more than 200 737s with OnAir's onboard mobile communications solution. Subject to regulatory approval, Ryanair passengers will be able to call and send and receive text and e-mail messages using their mobile phones and PDAs. The carrier will receive a commission from OnAir on revenues generated by passengers.
Air China's first-half profit fell 22.5% to CNY458 million ($57.4 million) from the CNY591 million earned in the first six months of 2005, according to press reports. Revenues climbed 17.7% to CNY19.93 billion. CA's offering on the Shanghai Stock Exchange earlier this month ( ATWOnline, Aug. 2) met with an unenthusiastic response, according to Reuters, forcing the carrier to repurchase 123 million A shares.
Thomas Cook Airlines (UK) gained CAA approval to become the country's first carrier to use GPS-based RNAV technology on approaches. Two Thomas Cook A330s are fitted with RNAV hardware and software and 12 training captains have been involved in simulator training. The carrier is working in close conjunction with CAA to pilot the system, largely on its Canadian and Caribbean flights. Thomas Cook plans to have all 70 of its A330 pilots trained to use the system by year end. It is working on introducing RNAV on its 19 757s and eventually on its A320s.
Hong Kong Express Airways said it received approval to fly to Chengdu, Nanning, Wuhan, Jinan and Yantai, bringing to 11 the number of cities it will serve on the Chinese mainland. CEO Andrew Tse said the new destinations are part of an expansion strategy that will see it gain access to "top tier cities such as Beijing and Shanghai in the not-too-distant future." HKE flew 13,899 passengers in July aboard 377 flights.
AD Aerospace was contracted by British Airways to provide video security systems protecting baggage from theft and tampering during loading and unloading. The systems monitor the baggage hold.
AirTran Airways announced the cancellation of 31 flights yesterday and today into and out of Miami, West Palm Beach, Fort Lauderdale and Fort Myers as the area braces for Tropical Storm Ernesto. Other carriers announced revisions to rebooking and cancellation policies, and Delta Air Lines said it "proactively cancelled some flights." Separately, AirTran and the International Brotherhood of Teamsters announced the ratification of a five-year labor agreement covering approximately 40 ground support equipment mechanics and related employees in Atlanta, Baltimore and Orlando.
AirAsia reported net income of MYR126.9 million ($34.3 million) for its fiscal year ended June 30, an increase of 14% over net income of MYR111.6 million last year, on a 28% jump in revenues to MYR856 million. "The revenue growth was driven by a 30% growth in passengers carried, a 4% decline in average fares and a higher contribution mix from ancillary income," the carrier said in statement. "The lower fares enticed strong traffic growth and improved load factors."
EADS neither confirmed nor denied reports that Vneshtorgbank, a state-owned Russian bank, has acquired a 4.5%-5% stake in Airbus's parent company. Russian newspaper Vedomosti reported yesterday that Vneshtorgbank purchased $1 billion worth of EADS shares.
TAP Portugal posted a €51 million ($65.2 million) loss in the first six months of 2006, a €3 million improvement compared to a €54 million loss in the year-ago period, and the carrier said its board of directors still hopes to end 2006 "with positive financial results." All other indicators of the company's activity "showed a positive trend," TAP reported, highlighted by a 17% increase in operating revenue to €710 million from the €606 million generated in the first six months of 2005.
MAXjet Airways will launch twice-weekly Las Vegas-London Stansted service Nov. 2. The all-business-class carrier currently operates scheduled services out of New York JFK and Washington Dulles. Earlier this month, MAXjet said it had reached "an agreement in principle" to add its fourth and fifth 767s early next year. It will introduce its third aircraft next month and said it is considering expanding into Boston, Los Angeles and San Francisco.
Embraer announced the closure of a $500 million syndicated standby facility with BNP Paribas, which the manufacturer said will reduce its debt costs. The facility comprises a $250 million trade finance credit facility and a $250 million revolver credit facility.
SkyEurope Holding AG announced an agreement with York Global Finance II for injection of €38.8 million ($49.6 million) of fresh capital into the airline as part of a €56.3 million financing package that also will include a €17.5 million public rights offering.
