Varig was granted one more lifeline by a Rio de Janeiro bankruptcy court, which is putting the airline up for sale a third time at an auction scheduled today. Creditors rejected VarigLog's offer on Monday ( ATWOnline, July 19), and an initial bid from an employee-led consortium collapsed when it was unable to make a cash down payment.
AirAsia will have the lift to match its ambition after signing a contract with Airbus for 40 A320 family aircraft and 30 options, the manufacturer announced yesterday. The deal is worth approximately $2.7 billion, according to press reports. AirAsia Group, comprising the Malaysian mainline, Thai AirAsia and AirAsia Indonesia, is replacing its 737 fleet. It currently operates 21 737-300s and seven A320s, with another 53 already on order. Thai AirAsia has nine dash 300s.
United Airlines flew 10.76 billion system RPMs in June, a 2.3% rise over the year-ago month. Capacity increased 2.2% to 12.18 billion ASMs and load factor inched up 0.2 point to 88.3%. Alitalia flew 3.39 billion RPKs in June, a 0.5% increase over the year-ago month, as capacity fell 4.2% to 4.59 billion ASKs. Load factor rose 3.7 points to 73.9%. ExpressJet flew 947.8 million RPMs in June, up 17.6% from the year-ago month. ASMs increased 9.4% to 1.15 billion, lifting load factor 5.7 points to 82.4%.
Thales will supply two A320 full flight simulators and one ATR full flight simulator to Kingfisher Airlines in a deal valued at more than $24 million. Contract also includes an A320 maintenance/flight training device and a turnkey maintenance support package.
El Al issued a profit warning yesterday indicating that hostilities in the Middle East, increased competition and rising fuel costs will lead to a full-year loss, according to press reports. The carrier earned a record $64.1 million in 2005 ( ATWOnline, April 3). "The company does not have a clear forecast as to the amount, especially because of the uncertainty regarding the security situation and its consequences," it said in a statement cited by Reuters.
Reaping the benefits of capacity cutbacks by its legacy competition, Southwest Airlines enjoyed record revenues in the second quarter ended June 30 and more than doubled its net income to $333 million from earnings of $144 million in the year-ago quarter. More good times are ahead, according to CEO Gary Kelly, who said the carrier is "excited about our near-term growth opportunities and pleased with our earnings momentum" and that "assuming continuance of the current healthy revenue environment, we expect to easily exceed our 15% 2006 annual earnings growth goal."
Northwest Airlines filed documents with the US Bankruptcy Court Tuesday related to the refinancing of $1.1 billion in existing bank obligations at more favorable terms, offering the carrier access to $250 million in incremental liquidity. NWA asked the court to allow it to convert the funds to permanent exit financing it said will secure part of the debt financing needed to emerge eventually from Chapter 11 bankruptcy protection.
American Airlines parent AMR Corp. earned $291 million in the second quarter ended June 30, widened from a profit of $58 million in the same period last year and only the carrier's second profitable quarter in the last 5.5 years.
US Airways Group flew a combined 5.87 billion RPMs in June, a 5.8% drop from the year-ago month. Capacity fell 8.6% to 7 billion ASMs and load factor rose 2.5 points to 83.8%. Domestic RPMs declined 7.6% to 4.69 billion against an 11% fall in capacity to 5.6 billion ASMs. International RPMs rose 2.1% to 1.18 billion and ASMs increased 2.2% to 1.41 billion.
AirTran Airways launched a twice-daily Rochester (N.Y.)-Boston service, a daily Indianapolis-San Francisco flight, daily Tampa-Gulfport/Biloxi service and a second daily flight from IND to Los Angeles. It flew 1.30 billion RPMs in June, 25.6% higher than the year-ago month. ASMs increased 25.4% to 1.62 billion and load factor rose 0.1 point to 79.8%.
Alaska Airlines announced the ratification of two four-year labor deals covering more than 3,700 clerical, customer service and ramp workers represented by the International Assn. of Machinists and Aerospace Workers. Agreements were reached in May ( ATWOnline, May 31). Separately, Alaska will launch thrice-weekly Los Angeles-La Paz service from Oct. 30 aboard 737-400s and thrice-weekly San Francisco-Cancun flights on Oct. 28 running through April aboard 737-800s.
Rolls-Royce projects that 114,000 jet engines will be required to meet global demand for 51,000 commercial aircraft ranging from business jets to long-haul passenger planes over the next 20 years. That adds up to a worldwide market for jet engines through 2026 potentially valued at $600 billion, the engine-maker said in its long-term forecast released this week. Underpinning the demand will be 6.6% annual growth in Asia/Pacific air traffic over the 20-year period, Rolls said.
Cathay Pacific Airways signed a $1 billion, 20-year OnPoint Solutions service agreement with GE covering MRO of 40 GE90-115B engines on 777-300ERs. It has ordered 18 of the type, the first of which is scheduled to enter service in September 2007 ( ATWOnline, Dec. 16, 2005).
British Airways said it reached an agreement with unions representing 1,800 London Gatwick-based crew on work rule changes that will save the carrier £13.2 million ($24.1 million) per year.
Air Canada sales, customer service and scheduling employees represented by the Canadian Auto Workers Union were awarded a 1% wage increase effective this month, a 1.75% raise in July 2007 and another 1.75% raise the following year by an arbitrator. The raises cover approximately 5,540 workers. AC mainline and Air Canada Jazz flew a combined 4.4 billion RPMs in June, a 4.5% increase over the year-ago month. Capacity grew 2.4% to 5.32 billion ASMs and load factor climbed 1.7 points to 82.7%.
After initially postponing a meeting at which they planned to review a $500 million bid from freight and logistics company VarigLog due to reported changes in the offer, Varig creditors late Monday decided to reject the bid, forcing the Sao Paulo stock exchange to suspend trading in Varig stock briefly after a rush to sell, according to press reports, and leaving Brazil's flag carrier on the cusp of liquidation.
Finnair said it has negotiated a compensation package with Airbus to cover the delays in the introduction of the A350, a revamped version of which was unveiled yesterday at the Farnborough Airshow (see today's show report above). Terms of the compensation deal were not disclosed. Finnair originally planned to take the first of nine firm A350s in the spring of 2012. That has been pushed back to 2013.
US Airways signed a five-year, full-content distribution agreement with Worldspan. The airline also unveiled an expanded codeshare agreement with Star Alliance partner TAP Portugal to include additional destinations on both sides of the Atlantic. Separately, it will launch thrice-weekly Las Vegas-Nashville service on Oct. 5 with an A319.
ANA said it has become the first Japanese carrier to implement a Line Operations Safety Audit program. From the end of August, approximately 250 flights will be monitored by trained TLC observers based in Texas. The review process will take six months and be repeated every 3-5 years.
Varig creditors meeting, scheduled for yesterday to evaluate VarigLog's bid for the bankrupt airline ( ATWOnline, July 12), was postponed after the freight and logistics company altered its offer, Bloomberg News reported.
American Airlines yesterday announced a redesigned business-class section on its 767-300s and 777s that includes lie-flat seats, personal inflight entertainment systems and other features that many of its competitors already have implemented on long-haul service. AA has installed the changes on one 767-300 and plans to complete the revamp on its remaining 57 dash 300s and begin retrofits of its 777 business cabins early next year.
Northwest Airlines reached a new tentative agreement on wage and benefit reductions with its flight attendants yesterday, striking an accord on $195 million in annual cuts that averts a potential work action and seemingly paves the way for the carrier's eventual emergence from Chapter 11 bankruptcy protection.
