US Pension Benefit Guaranty Corp. said Friday it has assumed responsibility for the pensions of nearly 4,000 employees and retirees of Aloha Airlines, which emerged from bankruptcy in February, two months after it received US District Court permission to cancel its defined-benefit pension plans to which it owed $155 million ( ATWOnline, Dec. 19, 2005). PBGC said the three plans are 55% funded, with $190 million in assets covering $345 million in benefit promises.
IATA said international passenger traffic increased 5.9% in the first quarter but fell 5.7% in March compared to the year-ago month. It attributed the decline to the fact that Easter was in April this year rather than in March. Three-month load factor was 74.4% and March load factor was 75.5%. Assn. of Asia Pacific Airlines member carriers reported a 3.7% increase in March passengers to 11 million. RPKs grew 4.1% while capacity lifted just 2.3%, improving load factor 1.3 points to 74.4%.
Centre for Asia Pacific Aviation Executive Chairman Peter Harbison said the volatile price of fuel is emerging as a serious threat to consumer demand for travel. Speaking at the opening of the second annual Middle East and Indian Subcontinent Aviation & Tourism Investor Summit in Mumbai, he warned, "The growing oil price crisis sees the express train of demand growth coming into a lake of treacle as consumer demand slows while fares rise.
Malev Hungarian Airlines reported a loss of HUF1.3 billion ($6.1 million) for its fiscal year, a HUF3.6 billion improvement over a loss of HUF4.9 billion in 2004.
GE Commercial Aviation Service President and CEO Henry Hubschman Friday cited a "disconnect" between air traffic and capacity growth, with the former expected to rise at a rate of 4.5% annually compared to an average increase in the number of aircraft seats of 5.5% over the next five years. Speaking to the Aero Club of Washington, Hubschman said, "I would argue that the [aircraft] orders are too large. We wish they would moderate a bit, but we don't control that."
Iberia, at long last, confirmed it will launch a low-cost airline to compete with the ever-growing herd of LCCs operating to and within Spain. The still nameless no-frills carrier will be based at Barcelona International Airport and is due to launch in October with five aircraft. The aim is to increase this number to 30 by the end of 2008, when a listing will be considered.
Pinnacle Airlines said it surpassed the operating performance levels outlined in its services agreement with Northwest Airlines during the first quarter and posted a profit of $13.3 million, 43% lower than a $23.3 million profit in the year-ago quarter that was boosted by an $18 million pre-tax gain related to the repurchase of a note payable to NWA. Pinnacle's operating revenues rose 6.3% to $207.1 million against a 6.2% climb in expenses to $185.6 million and operating profit improved 7.3% to $21.5 million.
Struggling to contend with fast-rising fuel costs, AirTran Airways posted a $4.6 million net loss for the first quarter but continued its expansion push by converting options into firm orders for 14 737-700s. "We continue to be challenged by the high cost of fuel impacting our bottom line," said CFO Stan Gadek. Orlando-based AirTran has posted annual profits for seven consecutive years, but last year's net was only $1.7 million and its first-quarter fuel costs jumped 63% year-over-year to $129.3 million.
Republic Airways Holdings posted first-quarter net income of $16.9 million, a 14% increase over the $14.8 million earned in the year-ago quarter. Revenues increased 22.7% to $257.3 million while operating expenses rose 20.9% to $209.4 million. RPMs jumped 42.9% to 1.37 billion on a 36.5% increase in ASMs to 1.97 billion, sending load factor up 3.1 points to 69.9%. The parent of US Regionals Chautauqua Airlines, Republic Airlines and Shuttle America took delivery of two new Embraer 170s during the quarter, placing them into fixed-fee service for Delta Air Lines.
Calgary-based WestJet reported its best-ever first-quarter earnings, posting net income of C$12.9 million ($11.4 million), a reversal of a net loss of C$9.6 million in the year-ago quarter. "With the Canadian airline industry returning to a more rational pricing environment, we returned to first-quarter profitability," President and CEO Clive Beddoe said
A one-time pre-tax gain of $40.3 million related to an adjustment in its maintenance accounting policy helped boost LAN Airlines' first-quarter bottom line, which showed a profit of $79.7 million, a 71.9% increase over year-ago net earnings of $46.3 million. Performance was flat excluding special gains. Higher yields and unit revenues helped lift turnover 19.8% to $728.2 million as a 34% hike in fuel costs sent operating expenses up at a similar 19.7% rate to $659.5 million. Operating income rose 21.4% to $68.7 million.
China Eastern Airlines reported a loss of CNY955.1 million ($119.1 million) in the first quarter, according to press reports. The total was more than double its full-year 2005 loss of CNY467.3 million ( ATWOnline, April 11). Revenue climbed 55.8% to CNY7.48 billion. The carrier said it expects to incur losses in the current quarter as well.
Mesa Air Group reported net earnings of $5.3 million for the second fiscal quarter ended March 31, a more than 51% drop from a profit of $10.8 million earned in the same period a year ago. The company attributed the fall to a debt equity charge of $7.5 million and some $3.6 million in costs associated with its Hawaii startup carrier go! ( ATWOnline, March 24). Operating revenues were up 18.3% to $312.1 million due primarily to an increase in the regional jet fleet; Mesa now operates 144 RJs compared to 136 at the end of the year-ago quarter.
Biman Bangladesh Airlines is set to purchase six A330s and four 777s, according to Director-Marketing and Sales Mahmoodur Rahman, who was quoted in Gulf News. The Bangladesh Ministry of Civil Aviation and Tourism reportedly recommended a combination of Boeing and Airbus aircraft to augment an aging fleet comprising five DC-10-30s, four A310-300s and four F28s.
Air Pacific placed an order for five 787-9s with three additional purchase rights. The first will be delivered to the Fijian flag carrier in 2011. The Dreamliners will replace two 747-400s and one 767-300ER. The airline plans to use them to fly from Nadi to Australia, New Zealand, North America and Japan. Retiring Chairman Gerald Barrack said the decision was reached after "many months of detailed study and negotiation," adding he was satisfied with the sale price the carrier negotiated but declining to release the figure. No list prices are available for the 787-9 model.
Boeing announced last week that its Phantom Works Advanced Air Traffic Management unit signed a two-year, €615,000 ($762,000) contract with Air Traffic Alliance--the European consortium that includes Eurocontrol, EADS, Airbus and Thales--to assist in development of the Single European Sky ATM Research program.
Gol received authorization from Brazil's National Agency of Civil Aviation to operate 21 weekly flights to Santiago. The Brazilian LCC said it is beginning preparations for 737-800 flights to the Chilean capital, which would become its seventh international destination.
Emirates Group had expansion on its mind as it announced a record net profit of AED2.8 billion ($762.2 million) for the fiscal year ended March 31. The performance represents a 5% improvement over the previous year's earnings of AED2.7 billion and was fueled by a strong year from Emirates Airline, which contributed net earnings of AED2.5 billion, a 4.2% increase over year-ago profits of AED2.4 billion.
ATA Airlines appointed John Kelly as VP-maintenance and engineering. He most recently was MD-line maintenance operations at Northwest Airlines' Detroit hub. US Airways named Andrea Rader director-corporate communications. Rader, who comes from Wal-Mart, worked for American Airlines for 14 years.
JetBlue Airways, which had posted profits steadily since its 2000 launch even as most US carriers suffered huge losses, reported a first-quarter net loss of $32 million yesterday and said it will defer delivery of 12 aircraft as part of an effort to regain profitability. The LCC's second consecutive quarterly loss compares to a $6 million profit in the year-ago quarter. It had not suffered a quarterly loss until the final quarter of 2005, when it lost $42.4 million.
Gol followed up a highly profitable 2005 with a record quarterly performance, posting first-quarter 2006 net income of BRL179.9 million ($82.9 million), a 37.2% increase over a profit of BRL131.1 million in the year-ago period. The Brazilian LCC attributed its continued success to strict cost controls. "Gol remains committed to its virtuous cycle of maintaining low costs, allowing us to offer the lowest fares and achieve the highest load factors in the Brazilian market," CEO Constantino de Oliveira Junior said.
Singapore Aircraft Leasing Enterprise ordered 10 737NGs valued at $675 million plus 10 options and 10 purchase rights, with the firm aircraft scheduled for delivery between early 2009 and late 2010. The 737-800 is the baseline model SALE specified, although substitutions can be made. CFMI valued the firm engines at approximately $140 million at list price.
SkyTeam is offering a new service, SkyTeam Global Meetings, designed to streamline the process of arranging travel for large-scale international meetings and events. Organizers will be able to coordinate all travel needs across all 10 member carriers through one point of contact. The program has its own website and will feature discounts and special incentives for participants.
Precision Conversions signed with Babcock & Brown Aircraft Management for two 757-200 cargo conversions. The work is scheduled to be completed by year end and will be done at Flightstar Aircraft Services in Jacksonville. Operating customers for the aircraft were not disclosed.
Air France Industries, the MRO arm of Air France, and Engine Alliance, the GE-P&W joint venture producing the GP7000 for the A380, signed an Industrial Cooperation Agreement under which AFI will open an MRO center in Paris for the engine. The AFI facility "will work as a part of the Engine Alliance MRO network," according to a statement from GE. AF, which chose the GP7000 to power its A380s, will start with partial GP7000 service capability next year when the engine enters service and ramp up to overhaul capability as the fleet grows.
