Delta Air Lines yesterday received permission from the US Bankruptcy Court to terminate its pilot defined benefit pension plan. The carrier established Sept. 2 as the effective termination date but still must obtain approval from the US Pension Benefit Guaranty Corp. Termination had been opposed by a group of 100 retired pilots, but that organization removed its objection over the weekend. DL will pay the group some $500,000 to cover legal fees and other expenses.
Lufthansa will make a long-awaited announcement on the purchase of long-haul aircraft before year end, a spokesperson confirmed to ATWOnline. The decision could come soon: Der Spiegel reported the LH supervisory board will sign off on a deal at a meeting later this month. The carrier is in talks with both Boeing and Airbus and also has had discussions with Embraer and Bombardier about regional jets.
An Iran Air Tours Tu-154M with 148 passengers and crew aboard crashed on landing Friday afternoon in Mashhad, where it skidded off a runway and caught fire, killing at least 29 passengers. It is believed that the flight crew and more than 100 passengers escaped or were rescued from the burning aircraft. The domestic flight, operated by the tour arm of flag carrier Iran Air, originated in Bandar Abbas.
Lufthansa remains in negotiations to sell its 50% stake in tourism firm Thomas Cook, including leisure carrier Condor Airlines, to co-owner KarstadtQuelle. Lufthansa board member Stefan Lauer confirmed discussions but told journalists last week in Frankfurt that "they are a long way from being finished." The German retailer has been after LH's holding in Europe's second-largest tourism company for some time. The unit returned to profitability last year, but LH has said Cook is not a core business.
FlyMe of Sweden will triple its fleet to 15 aircraft with the acquisition of 51% of Astraeus, a UK charter carrier, in a deal wroth SEK82.7 million ($11.4 million) expected to be completed within the next month. Astraeus transports 800,000 passengers each year, employs 391 and boasts annual revenues of SEK1.2 billion. It operates four 757-200s, four 737-300s and two 737-700s based at London Gatwick and Manchester and flies several routes to Africa. FlyMe has five 737-300s. "There are great synergy effects between FlyMe and Astraeus.
KLM will adjust its service to the Netherlands Antilles and Aruba over the next year in response to what it called "changing market conditions." From summer 2007, all flights will be aboard MD-11s instead of the present mixed fleet of 426-seat 747-400s and 282-seat MD-11s. The MD-11s will be "radically modernized" in the coming months to bring the product in line with the World Business Class and economy class standards of KLM's new 777s and A330s. Frequencies will be reduced. Aruba will be served four-times-weekly, twice in combination with Bonaire and twice with St. Maarten.
American Airlines flew 12.48 billion system RPMs in August, a 1.4% decline from the year-ago month. Capacity dropped 1.9% to 15.21 billion ASMs and load factor rose 0.4 point to 81.9%. Domestic RPMs fell 4.1% against a 4.8% drop in capacity to 9.64 billion ASMs, lifting load factor 0.6 point to 82.4%.
Alitalia, in which the Italian government still owns just under 50%, confirmed last week that it is reviewing and revising its business plan to counter rising fuel costs and adjust its targets. Business Plan 2005-2008 forecasts that AZ Fly, the airline entitity, will achieve a breakeven result this year and an EBITDAR margin of about 14% for 2007 and 2008.
SkyEurope Airlines suffered a €16.5 million ($21.2 million) loss in its fiscal third quarter ended June 30, widened from a €10.1 million deficit in the year-ago quarter, despite making what it called "significant operational improvements." The Bratislava-based low-fare carrier said it remains committed to growth, having announced a €56.3 million capital increase and financing package last week ( ATWOnline, Aug. 30).
Northwest Airlines reported a net profit of $101 million in July in a filing to the US Securities and Exchange Commission. Operating revenues totaled $1.2 billion and expenses came to $1.02 billion, resulting in a $180 million operating profit. It recorded $39 million in reorganization costs. Meanwhile, both the airline and its flight attendants, represented by the Assn. of Flight Attendants-CWA, were awaiting a ruling late Friday from US District Judge Victor Marrero on whether work actions can go ahead. Marrero granted NWA's request for a temporary injunction on Aug.
Comair received an extension Friday from Delta Air Lines to Oct. 2 for submitting its bid for Regional jet services. At the same time, the first lawsuit was filed against the carrier by a family of one of the victims from last week's fatal CRJ200 crash ( ATWOnline, Sept. 1).
Six weeks ago, American Airlines parent AMR Corp. surprised Wall Street with a handsome second-quarter net profit of $291 million. To put this achievement into its proper perspective, the last time AMR earned as much, fuel was selling for around 80 cents a gallon, yields were rising toward 14 cents per passenger mile, Bill Clinton was completing his second term in the White House and 911 was what you dialed in an emergency.
Look back into the history of any large company and odds are you will find some ironies lurking in its past. Cathay Pacific Airways, celebrating its 60th birthday this month, is no exception. Here's one: Although its name is virtually synonymous with Hong Kong, the two men who initially got it off the ground were from Texas and Australia. Here's another: What they really wanted to do was to start a trading company, not a passenger airline.
AeroTurbine named Michael King senior VP-material sales. Air Wisconsin promoted Vince Portaro to VP-customer service. Alaska Airlines selected Tom Kemp as system chief pilot. Austrian Air Group tapped Peter Baumgartner as head-product management & customer services division, Rudolf Mertl as head-network & sales divisions, Christian Fitz as head-quality collective decision making & process management division, and Friedrich Strahammer as head-flight operations.
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.
