Last week's "suspension" of Thai Airways President Kanok Abhiradee from day-to-day responsibility for managing the airline ( ATWOnline, June 12), as suspected, was linked to the carrier's heavy June quarter loss.
Structural Monitoring Systems entered into a commercial license agreement with Boeing for terms and proprietary information access rights to enable SMS's Comparative Vacuum Monitoring system to be manufactured, certified, sold and distributed by the company to operators of Boeing aircraft. The agreement also establishes the terms under which Boeing will provide technical services and assistance to SMS.
Lufthansa will close for economic reasons its cabin crew bases in Bremen, Hannover, Cologne and Nurnberg starting with the winter schedule. According to staff magazine Lufthanseat, the carrier also is looking to close Stuttgart. Affected cabin staff will be offered the opportunity to transfer to one of the other LH bases.
Pegasus Aviation Finance Co. ordered six CFM56-powered 737-800s, its first direct aircraft purchase from Boeing. The aircraft are valued at $400 million with deliveries beginning in 2006. Separately, Boeing and Jet Airways finalized the Indian carrier's order for 10 737-800s announced at the Paris Air Show. Deliveries will begin in early 2006. Jet's order for 10 777s, also announced at Le Bourget, will be finalized "at a later date," Boeing said.
As of Friday, a $5-$10 fare increase per one-way ticket on most US domestic airline tickets appeared to be holding, with American, Continental, Northwest, United and US Airways matching an earlier action by Delta Air Lines. LCCs America West and JetBlue also said they will raise fares in certain markets. This is the eleventh time this year that airlines have been able to push through a fare increase, JP Morgan analyst Jamie Baker stated.
Delta Air Lines will begin operating MD-88s on the Delta Shuttle between New York LaGuardia, Boston Logan and Reagan Washington National airports Nov. 1, replacing 737-300s currently flying the route. The 737-300s are configured for 120 seats in a spacious single-class arrangement. Switching to the larger MD-88s means Delta can offer 134 seats in the same configuration. "Delta Shuttle customers have asked for more availability on this highly popular, hourly route and we're delivering it, along with our new comfortable cabin interiors," said Delta CMO Paul Matsen.
Air France-KLM Group reported that total turnover for the fiscal first quarter ended June 30 rose 5.5% to €5.19 billion ($6,42 million) compared to the year-ago period. The company said that excluding the impact of the consolidation of Servair in the prior year, revenues for the current period would have risen 6.4% year-over-year. Total passenger revenues grew 6.5% to €4.08 billion while cargo revenues climbed 6.8% to €660 million. Revenue from maintenance operations increased 6% to €213 million.
Atlantic Southeast Airlines President William "Skip" Barnette is leaving to assume the top job at a small Ft. Lauderdale-based airline company, increasing speculation that the Delta Air Lines Regional subsidiary soon will be sold to provide cash to its struggling parent. Barnette, a 35-year veteran of Delta, will become president and CEO of twin carriers Caribbean Star and Caribbean Sun on Sept. 1. The privately held airlines serve 17 destinations in the Caribbean.
Stating that "the US airline industry has permanently changed and Northwest Airlines has no choice but must change with it," President and CEO Doug Steenland yesterday reaffirmed the carrier's commitment to fly through a strike by its mechanics and detailed contingency plans should a job action occur. The 30-day cooling-off period expires at 12:01 a.m. Aug. 20 after which the mechanics, represented by the Aircraft Mechanics Fraternal Assn., will be free to strike. Negotiations between the two sides resume on Monday.
In a clear indication that the era of government meddling in Thai Airways International is not over, the airline's president, Kanok Abhiradee, was removed at least temporarily after being criticized by the country's prime minister for failing to react swiftly enough to a series of external crises enveloping the carrier.
A labor dispute at Gate Gourmet's London Heathrow catering operation snowballed into a major headache for British Airways and its passengers yesterday as 1,000 BA airport ground workers walked off their jobs in sympathy with some 800 catering employees who had been fired by Gate Gourmet the day before. Both the catering and airline employees--baggage handlers and ramp workers--are members of the Transport and General Workers Union. Furthermore, Gate Gourmet provides catering for BA flights at LHR.
Independence Air parent FLYi, which warned earlier this week that it might be forced to file for bankruptcy or liquidate ( ATWOnline, Aug. 11), received a reprieve from Airbus when the manufacturer agreed to defer deliveries of firm ordered aircraft and return a $31.5 million deposit. "As of Tuesday, we said our number one focus was to increase cash flow to improve liquidity," Independence spokesperson Rick DeLisi told ATWOnline. "This is a step. We are still looking at all contingencies and possibilities.
Delta Air Lines delayed filing a routine quarterly financial report with the US Securities and Exchange Commission as it negotiates a new credit card processing agreement. The current agreement expires Aug. 29 and the carrier said that "the potential Visa/MasterCard processor has advised [Delta] that it will require a significant cash reserve," known as a holdback, for tickets purchased using Visa or MasterCard but not yet flown. Delta is trying to reduce the size of the holdback to free up cash.
World Airways Holdings appointed Jeffrey MacKinney to the board of directors. He was named president of World Airways in April. Eos Airlines, a startup that intends to offer premium service between New York and London Stansted using 757s, named David S. Pottruck nonexecutive chairman. He is MD of The Pottruck Group, a San Francisco private equity firm.
Independence Air parent FLYi issued its strongest warning yet that it may be forced into a Chapter 11 bankruptcy reorganization or Chapter 7 liquidation. In its 10-Q filing for the June quarter, the company said it has reduced its scheduled CRJ flying for September by 17% and is cutting its transcon flying with A319s in favor of operating them in East Coast markets. It also said it is not in compliance with terms of its agreement with GE Commercial Aviation Services, putting at risk up to eight CRJs. FLYi lost $98.5 million in the second quarter.
Cathay Pacific Airways reported a profit of HK$1.67 billion ($214.9 million) for the six months ended June 30, down 5.7% compared to a HK$1.77 billion first-half profit last year as a 27.9% rise in fuel expense dampened strong passenger demand. Passenger and cargo fuel surcharges only partially offset the additional cost. Turnover increased 21.5% to HK$23.88 billion as passengers carried rose 14.5% to 7.3 million, ahead of a 12.2% increase in passenger capacity.
EADS Sogerma Services will lease A330 spares worth $7 million from aviation spares specialist A.J. Walter Aviation to support Sogerma customers worldwide.
Lufthansa yesterday confirmed a second-quarter net profit of €116 million and an operating result of €279 million ( ATWOnline, Aug. 10). Revenues rose 4.3% to €4.55 billion. For the six months, operating profit was €253 million while net result was a breakeven €0.2 million. CEO and Chairman of the Executive Board Wolfgang Mayrhuber called the outcome "a fine feat in such a tough setting," adding that "all our business segments improved their result." LH expects full-year operating result to exceed €400 million.
Blue1, the Finnish SAS subsidiary, carried 97,000 passengers in July, up 24% compared to last year. Year-to-date through July, 804,000 passengers flew with Blue1, 30% more than in 2004. RPKs increased 29% and ASKs dipped 4% in July. Load factor rose to 76.3%.
Garuda and Singapore Airlines will be able to increase services as the result of an MOU signed yesterday between Singapore and Indonesia that formalizes an agreement in principle reached in May. SIA will be given more access to Bali and Jakarta while Garuda will get fifth freedom traffic rights from Singapore.
Aviapartner will provide ramp handling to Scandinavian Airlines at both Dusseldorf and Hannover from Oct. 1 under a new three-year agreement. It already handles SAS at Brussels, Lyon, Nice, Turin and Venice.
Lufthansa, which reports complete results today, said it had an operating profit of €253 million ($312 million) for the first half ended June 30 compared to an operating profit of €33 million in the year-ago period. Net profit was €0.2 million, down from a profit of €39 million in 2004, but last year's six-month result was boosted by book profits of €292 during the first quarter from the sale of LH's stake in Amadeus. Revenues rose 2.4% in the 2005 first half to €8.5 billion.
Goodrich Corp. board of directors elected Scott Kuechle senior VP and CFO. He succeeds Rick Schmidt, who is leaving to become CFO of Spirit AeroSystems. Kuechle is a 22-year veteran of Goodrich and has served as VP and controller since 2004.
Boeing and Qualcomm said they successfully demonstrated "the simultaneous use of CDMA and GSM mobile phone technology over an onboard network inflight mobile phone" on Boeing's Connexion One 737demonstrator. Passengers were able to download a variety of applications, send and receive e-mail and use instant message functions.
EVA Air will offer OnAir's two-way SMS beginning with its first 777-300ER that enters service this month. An English-language version will be followed by a Chinese version later in the year. The service will be available to passengers in all cabins and will cost $1.50 per message sent or received. It allows passengers to use the in-seat entertainment system to send messages to mobile phones and e-mail addresses and also to receive replies. The system will be installed on the entire EVA Air fleet over the next few years.
