Preliminary figures released yesterday by Lufthansa Group indicate the company narrowed its first-quarter net loss to €98 million ($124.6 million) from €116 million in the 2005 quarter.
American Airlines Chairman and CEO Gerard Arpey said the carrier needs at least $1 billion in additional annual savings to keep pace with rivals restructuring through bankruptcy and "just to keep even with our costs last year," and has evaluated replacing the JT8D-200 engines on its MD-80 fleet to save fuel.
Varig will auction off a portion of its assets to raise the money it needs to maintain operations under a plan approved yesterday during a meeting in Rio de Janeiro of employees, government officials and the carrier's creditors, according to media reports. The government confirmed it will not bail out the bankrupt carrier, which reportedly will be split into two companies and sold in approximately two months. Two options are on the table, depending on investor intentions. One would split Varig into a flight operations company and a service unit handling distribution, reservations, etc.
Record revenue and a commitment to cutting costs helped Singapore Airlines Group reduce the impact of soaring fuel prices to record a massive S$1.24 billion ($791.3 million) profit for the fiscal year ended March 31, just 8.3% down on the previous year.
US airlines reported an ontime performance rate for March of 76.1%, down 0.8 point from the year-ago month but up 0.8 point from February, according to the US Bureau of Transportation Statistics. Hawaiian Airlines had the highest March ontime rate at 90% among the 19 airlines reporting while United Airlines was lowest at 69.3%.
Touting synergies created by the merger of America West Airlines and the former US Airways, US Airways Group reported a first-quarter profit of $64 million compared to a profit of $28 million for America West in the year-ago quarter and said it now expects to be profitable for the full year, "even after accounting for merger-related expenses and continued high fuel costs."
Sun Country Airlines, a privately held LCC based at Minneapolis-St. Paul, said its first-quarter net income increased nearly 7% over the year-ago quarter to $5.5 million as revenues rose 15% to $76.5 million and passenger boardings grew 7% to 531,867. The airline said it maintained "virtually identical" year-over-year unit costs excluding fuel. It operates a fleet of seven leased 737-800s to destinations in the US, Mexico and the Caribbean.
Air France-KLM flew 16.49 billion RPKs in April, a 10% increase over the year-ago month. Capacity rose 4.8% to 19.86 billion ASKs and load factor was up 3.9 points to 83.1%. AF-KLM flew 918 million RTKs, an increase of 1.1%, as cargo capacity grew 2.1% to 1.36 billion ATKs. Frontier Airlines said its April RASM increased 6.8% to 8.27 cents as yield climbed 1.1% to 10.25 cents and traffic grew 27% to 707.7 million RPMs. Capacity increased 20.1% to 877.4 million ASMs and load factor rose 4.4 points to an April record 80.7%.
Gulf Air faces a deficit of approximately BHD80 million ($211 million) despite "strong improvements" in key performance indicators during the first quarter because "revenue growth simply cannot keep pace with oil price rises," according to President and CEO James Hogan. "We are looking at a range of options to mitigate these additional costs. We are already seeing a more consistent application of fuel surcharges in all our markets," Hogan said.
ABX Air posted a 14.3% profit increase in the first quarter to $8.1 million, rebounding from a difficult 2005 that saw profits drop as primary customer DHL Worldwide Express struggled to compete against FedEx and UPS in the US market. The carrier earned $7.1 million in the year-ago period. "Our operating results reflect the success of our initiatives to drive down costs and improve productivity in our sort, line-haul and air operations for DHL," President and CEO Joe Hete said.
AirTran Airways yesterday resumed negotiations with its 1,400 pilots, represented by the National Pilots Assn. Talks in Orlando are aimed at renewing a labor contract that became amendable in April 2005. This week's talks are scheduled to run through Thursday and another round of negotiations is slated for May 30-31 in Baltimore. Separately, AirTran yesterday launched flights from Chicago Midway to Dallas/Ft. Worth (thrice-daily) and Charlotte (twice-daily) aboard 717s.
Ethiopian Airlines earned a profit of $43.4 million in 2005 on revenues of $495 million, it said at a Saturday news conference marking its 60th anniversary, according to Reuters. A carrier official said the airline intends to increase its annual net earnings to $116 million by 2010 and generate $1 billion in revenues. Ethiopian carried 1.6 million passengers in 2005.
US Airways Group reported a 6.8% decline in consolidated April traffic to 5.45 billion RPMs. Capacity dropped 12.4% to 6.65 billion ASMs and load factor rose 4.9 points to 82%. British Airways flew 9.83 billion RPKs in April, up 9.8% on the year-ago month. Capacity rose 4.2% to 12.49 billion ASKs, lifting load factor 4 points to 78.7%. BA said the increase in traffic comprised a 3.8% gain in premium and a 10.9% lift in nonpremium traffic.
British Airways will implement e-ticket interlining with 80 new partners through Amadeus in the next two years. BA, which is hosted on the Amadeus e-Ticket Server, already has implemented e-ticket interline links with 40 airlines, including its oneworld partners. "These new interline links will allow us to grow the number of routes on which our customers can travel using an e-ticket and help British Airways advance towards the 100% e-ticket target set by IATA for the end of 2007," Product Delivery Manager Jerry Foran stated.
Reporting its first quarterly results since exiting Chapter 11 in February ( ATWOnline, Feb. 2), United Airlines parent UAL Corp. said it lost $306 million excluding bankruptcy-related items, widened from a deficit of $302 million in the year-ago period. Including noncash gains related to its restructuring, United earned $22.9 billion in the three months ended March 31 versus a loss of $223 million last year.
Aviation Capital Group reported first-quarter activity comprising leases of two new A320s by Air Deccan, one 737-300 by BRA Transportes Aereos of Sao Paulo, a new A320 by Royal Jordanian, a new A320 by Wizz Air, a 737-400 by Aegean Airlines, an A319 by Mexicana de Aviacion and an A320 by Air China and extension of leases on three 767s by LOT Polish Airlines. ACG also acted as agent and sold nine 757s subject to leases with US Airways on behalf of a group of institutional investors and three 757s to US on behalf of an institutional client.
Bahrain and Thailand reached an open-skies agreement allowing designated airlines to offer unlimited flights. Annual air traffic between the countries has been growing at 15% over the past five years.
Hawaiian Holdings, parent of Hawaiian Airlines, reported that its net loss for the first quarter ended March 31 widened to $12.3 million from $2.1 million in the year-ago period. The 2005 results are only for the parent company, which acquired the airline as part of the latter's emergence from bankruptcy in June 2005. On a pro-forma basis with the results of Holdings and the airline combined for the 2005 period, the year-ago loss was $1.7 million.
Mesaba Airlines mechanics, represented by the Aircraft Mechanics Fraternal Assn., followed the lead of the carrier's pilots union by setting up strike headquarters. Union groups representing pilots, mechanics and flight attendants are at an impasse with the carrier over its effort to cancel labor contracts ( ATWOnline, Feb. 7). A bankruptcy court judge is scheduled to rule May 11.
Northwest Airlines flew 6.04 billion RPMs in April, a 4.6% decline from the year-ago month. Capacity fell 8.8% to 7.12 billion ASMs, lifting load factor 3.7 points to 84.9%. Domestic traffic dropped 5.7% to 3.58 billion RPMs as capacity decreased 12% to 4.25 billion ASMs, sending load factor up 5.6 points to 84.3%. International RPMs lowered 3% to 2.46 billion while capacity fell 3.8% to 2.87 billion ASMs. Load factor inched up 0.7 point to 85.9%. United Airlines flew 9.81 billion RPMs in April, an 8.4% rise over the year-ago month.
ExpressJet announced Friday that it will retain 69 regional jets removed from its capacity purchase agreement with Continental Airlines and use them to "pursue various strategic options outside the...agreement." Continental notified its largest Regional partner in January that the aircraft--25 ERJ-145LRs and 44 ERJ-145XRs--would be taken out of the Continental Express network after the two sides failed to reach a financial agreement on their continued deployment.
TAM's first-quarter net income soared 107.9% compared to the year-ago period to R$111.2 million ($53.6 million) on a 24.6% rise in revenues to R$1.7 billion. Brazil's leading airline said the addition of four A320s and two A330s facilitated an expansion of services that increased revenue-generating opportunities, while costs were lowered by upping fleetwide aircraft utilization from 10.6 to 12.4 average block hr. per day.
Air Berlin late Thursday delayed the launch of its IPO, scheduled for Friday, owing to the market's concern over the share price, according to press reports. AB reportedly was asking for €15-€17.5 ($19-$22.10) per share. The IPO now is planned for May 10 with 42.5 million shares priced at €11.5-€14.5, with AB hoping to generate €489-€616 million.
Armavia said yesterday that the A320 that crashed into the Black Sea off the Russian coast Wednesday had undergone all proper maintenance checks, including an overhaul in Belgium last month ( ATWOnline, May 4). Rescue workers continued to search the sea for debris and clues to the cause of an accident that killed all 113 aboard. The black box has not been retrieved from the aircraft, which sits 500 m. below the water surface, according to Russian media reports. Heavy rain and low visibility have been offered as the accident's cause by the airline and Airbus.
