IATA reported an 8.3% increase in RPKs for the industry in June compared to the year-ago period, with the Middle East (14.8%), Latin America (12.4%) and Africa (11.2%) showing the largest gains. Capacity rose 7% and load factor stood at 76.6%. In freight traffic, FTKs rose 2.9% on an ATK increase of 6.3%. For the first half, RPKs were up 8.8% over the first half of 2004 while ASKs rose 7.4%. As a result, load factor averaged 74%. FTKs during the period climbed 3.4% on an ATK increase of 7.2%. "The story for the first half of the year is cargo.
Atlas Air Worldwide Holdings, which emerged from Chapter 11 in July 2004, reported net income of $675,000 for the first quarter ended March 31, reversing a $58.6 million net loss in the year-ago period. Results for the 2005 quarter included $1.6 million in post-emergence costs and related professional fees, while results from the 2004 first quarter included $9.4 million in pre-petition costs. "Our first-quarter net profit, albeit modest, is an important achievement," President and CEO Jeffrey Erickson said.
Mesa Air Group reported net income of $17.1 million for its fiscal third quarter ended June 30, up 77.4% over income of $9.7 million in the year-ago period, which was net of $1.1 million in special charges. Current-period results include net one-time investment gains of $0.7 million. "In spite of the difficult industry environment, we are pleased to have generated these results," Chairman and CEO Jonathan Ornstein said.
Austrian Airlines named Paul Paflik area manager-the Americas for sales and marketing based in New York. He succeeds Herbert Koschier, who becomes the new area manager-Australia, New Zealand and South West Pacific based in Sydney.
Republic Airways Holdings posted net income of $13.4 million for the second quarter ended June 30, up 85.2% over net income of $7.2 million in the prior-year period. Total operating revenues rose 35.8% to $188.8 million primarily as a result of a 40.7% increase in ASMs and a 26.5% jump in block hours. These numbers reflect the addition of 36 regional jets that were placed into service in June 2004, the company said.
Delta Air Lines CEO Gerald Grinstein warned employees in a memo Tuesday that although the carrier's Transformation Plan is delivering anticipated results, "it is not enough" in light of record oil prices and intense fare competition from low-cost carriers. The memo, which was reported in its entirety by the Associated Press yesterday, goes on to state, "The high price of fuel, the interest expense on our debt and other factors have significantly outpaced our transformation initiatives and masked our progress."
American Airlines unveiled the first phase of its new $1.1 billion terminal at New York JFK. Operations in Phase I are expected to begin on Aug. 24 and primarily will consist of the domestic flights now in AA's Terminal 9, which will close owing to Phase II construction. Phase I of the new terminal features a 57,000-sq.-ft. ticketing lobby with 67 ticketing positions and offers an automated baggage-handling system with four carousels. It also includes an 11,300-sq.-ft. Admirals Club with seating for 185.
AirTran Airways reported a net income of $11.4 million for the second quarter ended June 30, a 32.3% decline from net income of $16.8 million in the year-ago period. Net income for the first six months also dropped, falling 84.1% to $3.3 million from $20.9 million. "As in the first quarter this year, our financial performance was challenged by continued record high fuel prices, overcapacity on the East Coast and intense price competition," Senior VP-Finance and CFO Stan Gadek said.
United Eagle Airlines, China's latest private carrier, launched operations yesterday with a flight from Chengdu to Shenzhen but resisted the lure of publicity from discounting its fares. It is using a fleet of leased A230s. China's first private airline, Okay Airways, formerly Shenzhen Airlines, started service in March, while privately owned Aukai Airlines, Western Airlines and Eastern Express are expected to fly later this year.
UPS, boosted by a significant gain from international package revenue, reported a 20.5% increase in net income to $986 million in the second quarter ended June 30 compared to net income of $818 million in the year-ago period. "UPS is a company that's on the move," Chairman and CEO Mike Eskew said. "Our US domestic volume climbed well above our expectations.
Impacted by high fuel prices, overcapacity in the market and a weak load factor, Austrian Airlines Group reported a net loss of €79.1 million ($95.1 million) for the six months ended June 30, widened from a net loss of €41 million in the year-ago period.
Cathay Pacific Airways, along with 22 other airlines, received approval from the Hong Kong Civil Aviation Dept. to increase long-haul fuel surcharges from the beginning of August. The new charge will be $42.60 per sector, up from the current $32. The long-haul surcharges apply to all Cathay flights between Hong Kong and Australia, North America, Europe, the Middle East and South Africa. The short-haul surcharge, which applies mainly to the airline's regional flights in Asia, remains at $11 per sector.
Lufthansa yesterday opened a new first class area at its Munich hub for its top frequent travelers, HON Circle and first class passengers. The offering features exclusive curbside service, Fast Lanes and a new 150-sq.-m. lounge. Commenting on the strong demand for first class travel from Munich, Executive VP-Services and Human Resources Carsten Spohr said during the opening ceremony that Lufthansa will again introduce first class on long-haul routes out of the airport.
Northwest Airlines Corp. recorded a net loss of $225 million for the second quarter ended June 30, which included a net one-time gain of $54 million primarily related to the company's sale of shares of Prudential Financial. This compares to a net loss of $182 million in the year-ago period, which included a $104 million charge to write down previously parked 747-200s and related inventory. Excluding unusual items, the company posted a net loss of $279 million in the quarter compared to a loss of $78 million in the 2004 period.
Spring Airlines, the new Shanghai-based budget carrier, raised its lowest fares from Shanghai to Yantai, Nanchang and Mianyang by 100 yuan ($12) to 299 yuan after political pressure was applied by competing airlines, according to China Daily. However, the new fares also include one night's accommodation. The typical fare is 800 yuan.
Island Air selected Avexus to "enhance the management of its aircraft maintenance operations." Component Control said Wizz Air selected its Quantum Control aviation ERP software to replace a third-party parts inventory and maintenance system to support maintenance functions for its fleet of six A320s.
AirTran Airways pilots, represented by the National Pilots Assn., applied to the National Mediation Board for mediation services in their negotiations with management. According to the union, the two sides have been in "Section-six contract negotiations" since December and management only has made it to the bargaining table for a total of six and one-half days of talks. "We are calling on the NMB to step in and play its time-honored role of honest broker.
In order to facilitate further its expansion in Brazil and elsewhere in South America, Gol announced that it increased the size of its total order for 737-800s from 63 to 101. The revised deal doubles the airline's firm orders to 60 and increases purchase options to 41. The aircraft included in the firm order are scheduled for delivery from 2006 to 2012 and the purchase options can be exercised between 2007 and 2012.
Air New Zealand released details of the new three-year agreement reached with its long-haul cabin crew ( ATWOnline, July 25), represented by FARSA. According to the carrier, the deal calls for a 3.3% pay increase over the next three years, increased allowances including one additional inflight meal on certain services, and an agreement to use 10 cabin crew on each 777 flight with the provision to review the size of the crew complement at seven monthly intervals for a period of 21 months from the introduction of the first aircraft.
Emirates signed a $119 million financing agreement with China Construction Bank Corp. for an A340-500, which will be delivered to the airline in August. This represents the first-ever leasing agreement Emirates has signed with a Chinese bank.
Malaysia Airlines will lease five 737-800s for India and China operations, according to Bloomberg. The carrier will use the aircraft to open new routes to secondary airports and their selection may be an indication of its choice of a replacement for its 737-400 fleet, which is due by year end.
The Jetstar Asia merger with Valuair ( ATWOnline, July 25) is expected to be more of a takeover that will have a significant upside for the Qantas-controlled low-cost airline. Under the S$60 million ($36.1 million) deal that was finalized Friday, the two LCCs, which both are losing money, will be merged into a single corporate structure of which Qantas will own 44.5%, down from the 49.9% it owns of Jetstar Asia.
Finnair flew 1.44 billion RPKs in June, up 10.4% over the year-ago period. Capacity climbed 5.7% to 1.91 billion ASKs and load factor grew 3.2 points to 75.2%. For the six months ended June 30, RPKs rose 7.9% to 8.28 billion, ASKs increased 6.1% to 11.52 billion and load factor gained 1.2 points to 71.9%.
Korean Air reported an 11.9% increase in traffic to 4.36 billion RPKs last month on the back of strong international traffic, which rose 12.3%. Passengers were up 7.3% to 1.8 million. The strongest traffic growth was from China, up 28% to 209.5 million RPKs. Domestic traffic rose 6.8% year-on-year to 308.4 million RPKs. Reflecting the usual seasonal dip, freight was down 1.9% to 677.2 million FTKs. Japan and US cargo fell 3% and 5.6% respectively, while Southeast Asia dropped 21.3%.
News from Travel Technology Update: British Airways dropped its three-year battle to shift the burden of credit card fees for certain negotiated net fares in the U.K. The carrier told its corporate clients that it will begin accepting credit card payments for the fares beginning Oct. 1. It said some clients had complained that its policy had made payment processing too complicated.
