FL Group, parent of Icelandair and Sterling, yesterday raised its stake in UK LCC easyJet from 13.99% to 16.18%. Lufthansa and Swiss International Air Lines will use the same terminals and check-in facilities at Zurich, Frankfurt and Munich and, as previously announced, will codeshare on their more than 80 daily flights between Germany and Switzerland with introduction of the 2005-06 winter schedules from Oct. 30 ( ATWOnline, Aug. 26).
Spanair Chairman Gonzalo Arias announced that the airline's CFO and chief commercial officer, Lars Nygaard, will succeed Enrique Soriano as CEO of the SAS Group carrier. Soriano becomes DG of ground handler Newco Airport Services of which Arias also is chairman. Nygaard, 39, was seconded to Spanair from SAS in 2001. He was been with the group since 1991. Palma-based Spanair offers more than 1,000 daily flights with a fleet of 65 aircraft.
"The single overriding issue [in the US market] is excess capacity" that keeps US carriers in red ink, Southwest Airlines CEO and Vice Chairman Gary Kelly said Wednesday.
Northwest Airlines is seeking to outsource a majority of the slots on international routes now reserved for senior Northwest flight attendants to foreign-based cabin staff. According to the Wall Street Journal, the airline is proposing to have 75% of its transatlantic and transpacific flights staffed by "regional flight attendants" who are not members of the Professional Flight Attendants Assn., which represents NWA attendants. The carrier also wants to staff its proposed Regional subsidiary ( ATWOnline, Oct. 14) with attendants not on the mainline seniority list.
AirTran Airways announced that Director-Marketing Tad Hutcheson and GM-Operations Jim Tabor were named VP-marketing and sales and VP-operations respectively. Crane Aerospace & Electronics named Dewey Turner III senior VP-global sourcing and manufacturing. Messier-Dowty appointed Christian Breyton group VP-supply chain management and Jean-Marie Jacquet group VP-production. Additionally, the company selected Pierre Lescure to lead a new Stepchange in Quality taskforce.
FL Group and Kaupthing Bank signed a letter of intent to form a company to manage 15 737-800s ordered by FL Group earlier this year. FL Group will hold 49% of the leasing venture. Lease agreements have been placed for nine of the aircraft, five of which will go to Air China as previously announced. Hainan Airlines will lease another four for eight years with deliveries in August-December 2006.
The world's largest nonaligned airline is independent no more--Japan Airlines said yesterday it will apply to join oneworld, a decision that was "warmly welcomed" by the alliance. In terms of revenues, JAL Group is the No. 3 airline company in the world, trailing Lufthansa Group and Air France-KLM Group, according to ATW's "World Airline Report." The link is not unexpected given the close association between JAL and oneworld anchors American Airlines and British Airways as well as with Qantas and Cathay Pacific, also members of the partnership.
AirCell said it completed a successful "extended airborne demonstration program" of its inflight mobile phone system. The system is targeted for commercial deployment in 2007 and will permit passengers to use their Wi-Fi and cellular devices. FAA has yet to approve the inflight use of mobile phones, however.
Wizz Air announced establishment of a new crew base in Warsaw, its third base overall and second in Poland. It also took delivery of its first new A320. The aircraft, the seventh in its fleet, is leased from Aviation Capital Group on a 5.5-year term and will serve the Polish market starting Dec. 1. Separately, the carrier unveiled an incentive for frequent travelers, offering immediate 15%-25% bonuses on funds passengers contribute to a prepaid account.
Okay Airways, China's first private carrier, has abandoned its low-cost model. People's Daily reported the seven-month-old airline was unable to cut expenses due to China's unified regulatory and pricing systems.
FL Group, parent of Icelandair, as expected, reached agreement with Sterling parent Fons Eignarhaldsfelag to acquire the Danish low-fare airline for DKK1.5 billion ($241 million) including DKK1.1 billion in cash and DKK400 million worth of shares in FL Group ( ATWOnline, Oct. 20).
US airlines will return to profit at the operating level next year if oil stays at or below $60 a barrel, according to JP Morgan analysts Jamie Baker and Pakhi Elder, who forecast the industry will earn $4.6 billion at the operating level compared with an estimated loss of $2 billion in 2005. Operating profit excluding fuel should hit $28.8 billion in 2006, up from $21.9 billion this year. Driving the improvement are declining capacity and "surging RASM," the analysts wrote in a report released yesterday. System RASM rose 12.5% in September and will rise 13.1% this month.
AirAsia said the Malaysia Ministry of Finance approved its application for an investment allowance incentive constituting an income tax exemption equating to 60% of qualifying capital expenditure incurred within the five years from July 1, 2004, until June 30, 2009. In conjunction with "the normal 100% allowance" for capital expenditures, "our future budgeted tax payments are minimal," noted AirAsia Group CEO Tony Fernandes.
Air France-KLM Group is extending its French spoke network to KLM's Amsterdam hub with a new twice-daily service between Strasbourg and Schiphol. The route, on which AF and KLM will codeshare, will commence Oct. 31 and will be operated by Regional, an AF partner, with ERJ-135s. Air France and KLM already link Bordeaux, Clermont-Ferrand, Lyon, Marseille, Nice and Toulouse to Amsterdam. They will launch a Paris-Eindhoven route Oct. 30 with two daily flights, increasing to three Dec. 12.
Continental Airlines completed the sale of 18 million shares of Class B Common Stock at a price of $11.35 per share, raising gross proceeds of $204.3 million. Sole underwriter UBS Investment Bank has a 30-day option to purchase an additional 2.7 million shares to cover overallotments, if any.
AirAsia completed fuel hedging for the second half of 2006 at $48 a barrel. "Fuel cost is the single largest cost item of the business and it constitutes approximately 60% of our total operating cost," AirAsia Group CEO Tony Fernandes said. "We took advantage of the recent dip in oil prices, in light that there might be more risk on the downside going forward."
Aeroflot will add seven A321s to its medium-haul fleet, Airbus announced yesterday. Deliveries of the newly ordered aircraft are scheduled to begin in fourth-quarter 2006. Each will feature a two-class cabin configuration seating 170 and will be powered by two CFM56-5s. The aircraft are intended for Aeroflot's Russian and European networks. The carrier already has a significant investment in the A320 family, operating eight A319s, seven A320s and three A321s prior to the new purchase.
ANA in cooperation with Japan Post, the Japanese postal system, intends to launch a cargo airline. Under terms of a strategic agreement signed by ANA President and CEO Mineo Yamamoto and Japan Post President Masaharu Ikuta, the companies will "cooperate in the field of international air cargo services from April 1, 2006, including participating in the airline venture and the joint development of international express courier services particularly to the growing Asian market."
British Airways' weekly frequencies between London Heathrow and India will increase from 19 to 25 starting Oct. 30. Service to Mumbai will grow to two flights per day, a new service to Bangalore will operate five times per week and service to Chennai will rise from two to six flights weekly. Service to Delhi will double to two daily flights beginning next summer. The carrier said the expansion is due to the lifting of restrictions on the two nations' bilateral agreements. Meantime, BA will launch service from Gatwick to Grenoble Dec.
Iberia plans to cut 2,164 jobs, representing 9% of its workforce, under the 2005-2008 Director Plan that is aimed at boosting its profit by €600 million ($716.3 million) over the next three years ( ATWOnline, Oct. 10).
Cargolux will start a direct weekly service to Damman Oct. 31 operating 747 freighters. The flight will continue to Hong Kong before returning to Luxembourg. Meantime, the carrier agreed with SITA to retain the name CHAMP Cargosystems for their joint IT cargo company.
Assn. of European Airlines members posted a 7% increase in passenger traffic in September compared to the year-ago month. Regional results were very much on trend, with a growth of 12.3% to/from the Far East, 6.1% in Europe and 3.1% on the North Atlantic. Overall seat occupancy was 79.5%, the highest September on record and 2 points higher than in the previous year. For the first nine months, load factor was up 1.3 points.
Vagn Soerensen, who has led Austrian Airlines Group as CEO since the fall of 2001 and embarked on a broad expansion into Central and Eastern Europe and Asia, announced Monday he will not seek to renew his contract when the current term expires at the end of September 2006. Soerensen cited the desire to return to his native Denmark after spending some 20 years away from his homeland.
