Northwest Airlines received approval from the US Bankruptcy Court for its aircraft financing deal with Airbus and Pratt & Whitney ( ATWOnline, Dec. 12). Airbus will finance 85% of soon-to-be-delivered A319s and 10 A330s scheduled for delivery in the next two years, according to media reports. Prepayments of approximately $100 million made by NWA prior to its entry into bankruptcy will be allocated to the aircraft costs.
United Airlines bid to buy an unspecified portion of FLYi, parent company of bankrupt Independence Air. The bid was filed under seal in US Bankruptcy Court, according to media reports. FLYi still is seeking damages from its former Washington Dulles partner but does not have precedence over other unsecured creditors. It will put its assets up for auction on Jan. 3 unless an investor is located. Mesa Air Group also is reported to be a bidder.
Turkish Airlines is looking into launching a low-cost carrier by next year. According to several Turkish media reports, THY plans to use its older aircraft for the operation, likely its 737-400 fleet. The new airline would offer 20% lower fares.
Azerbaijani aircraft operated by flag carrier Azerbaijan Airlines crashed near the Caspian Sea shortly after takeoff from Baku Friday, reportedly killing the 18 passengers and five crewmembers onboard. The aircraft was an An-140 twin-engine turboprop.
American Airlines said yesterday in a Form 8-K filing with the US Securities and Exchange Commission that it expects fourth-quarter revenue to increase 12.5%-13.5% over the year-ago quarter and anticipates ending the quarter with a cash and short-term investment balance of more than $4 billion ($500 million restricted). Consolidated unit revenue is expected to climb 12.8%-13.8%.
A request for unprecedented antitrust immunity on transatlantic service made in September 2004 by SkyTeam members Delta Air Lines and Northwest Airlines tentatively was denied yesterday by the US Dept. of Transportation, which said the carriers failed to demonstrate that immunity "would provide significant public benefits" or that the alliance's goals "could not be achieved without antitrust immunity."
Delta Air Lines asked the US Bankruptcy Court yesterday for a six-month extension to file its reorganization plan, according to media reports. The current deadline to file its plan exclusively is Jan. 12 and creditor acceptance is due March 13. "The debtors have made tangible progress toward their goal of developing a competitive cost structure while increasing revenues," Delta said, adding, "At this early stage there is a great deal more that needs to be done." A hearing is scheduled for Jan. 5.
Emirates tapped the US Export-Import Bank to finance the acquisition of two 777-300ERs to be delivered in February and March. Financing was arranged and funded by Royal Bank of Scotland. It combines an Eximbank-supported loan with commercial funding and runs for a period of 12 years. Emirates previously used support from the bank to purchase GE90 engines for its 777 fleet.
Aer Lingus countered Ryanair's Dublin expansion ( ATWOnline, Dec. 22) with an announcement yesterday of six new routes from Dublin and Cork. It will base a fourth A320 in Cork from June and launch service to Berlin (thrice-weekly), Birmingham (thrice-weekly) and Tenerife (weekly). It will add frequencies on routes to Amsterdam, Rome, Nice, Warsaw, Alicante and Malaga. From Dublin it will begin service in March to Poznan, Palma (thrice-weekly) and Rennes (twice-weekly).
China Airlines' board appointed Philip Hsing-Hsiung Wei chairman and Ringo Chao president. EADS' board named Anne-Marie Perus head of EADS Sogerma Services, a subsidiary specializing in maintenance, aircraft and cabin customization and aerostructures, effective Jan. 1. She succeeds Michel Freuchet, who was appointed chief of the launcher business line at EADS Space Transportation.
Lufthansa and tourism company TUI are interested in joining a consortium to bid for German ATC provider Deutsche Flugsicherung, they said earlier this week. Lufthansa CEO Wolfgang Mayrhuber said possible partners include Fraport, Munich Airport, Air Berlin and TUI leisure carrier Hapagfly, Reuters reported. "A majority held by a German consortium is the right way," he said. TUI CEO Michael Frenzel told Financial Times Deutschland he wanted to avoid any single company having a dominant position in DFS, perhaps enabling it to raise ATC charges to its German competitors.
Asiana Airlines said it will place cabin staff on Turkish Airlines aircraft on its twice-weekly codeshare flights between Incheon and Istanbul. Two Asiana flight attendants will work each flight to "provide more convenient service to Korean passengers who make up 80%" of the route's traffic. Asiana added, "such attendant detachment is a unique kind of cooperation in the worldwide airline industry."
Japan Airlines is forecasting a marginal decrease in the number of JAL Group passenger reservations for the Dec. 28-Jan. 9 Japanese New Year vacation period. JAL reported 290,525 international passenger reservations, 2% down on the same period last year. While bookings on transpacific, Korea, Southeast Asia and Oceania routes increased--up respectively by 14.8%, 6.8%, 5.5% and 0.7% compared to the same period last year--there was a reduction in passengers to Honolulu, Guam, Bali and China. China traffic is forecast to be 11% lower due to anti-Japanese sentiment.
Northwest Airlines said it will need $2 billion in new funding in order to exit bankruptcy protection and finance new aircraft, the Financial Times reported. NWA said it does not expect to generate "significant liquidity" from its operations until at least 2009.
EasyJet and Airbus announced yesterday that the LCC will exercise 20 A319 options that were part of a three-year-old deal for 120 firm orders and 120 options. The carrier will pay approximately $900 million for the 156-seat aircraft, to be powered by CFM56-5s. They will be delivered in 2008 and 2009. EasyJet already operates 59 A319s. The remaining 61 included in the original order are expected between now and 2008. The airline said that "the terms of payment are substantially the same as those for the purchase of the first 120 aircraft."
Hainan Airlines is close to completing a deal for a 70% stake in Hong Kong carrier CR Airways, which made waves earlier this week with its order for 10 787s and 30 737-800s ( ATWOnline, Dec. 21). Previous reports indicated Hainan will acquire 60% of the nascent Regional, Reuters reported. It reportedly will pay HKD350 million ($45.1 million) for the stake and hold it through a company incorporated in Hong Kong. The other 30% will be held by CR Airways founder Robert Yip.
Varig creditors rejected the carrier's sale to Docas Investimentos, a fund owned by newspaper owner Nelson Tanure, who paid $112 million for a 25% stake in Varig SA and a 10-year "lease" on an additional 42% ( ATWOnline, Dec. 14). The decision drew cheers from Varig employees, according to the Associated Press. A Varig spokesperson said creditors have approved an alternative recovery plan involving investment funds and that the airline intends to put into service next year the 18 aircraft currently grounded. It has until Jan. 8 to present its restructuring plan.
Continental Airlines announced yesterday that it earned $172 million from the sale of 9 million shares of common stock in the Dec. 15 IPO of Copa Holdings ( ATWOnline, Nov. 29), and that it will contribute $50 million of the proceeds to its pension plans, bringing its 2005 pension contributions to $354 million. Continental still owns 12 million shares in Copa.
Southwest Airlines and Boeing have been sued by two passengers who were aboard the 737-700 that veered off a Chicago Midway runway earlier this month ( ATWOnline, Dec. 16). A law firm representing the pair said they were injured in the accident and alleged the airline and the City of Chicago were negligent. Neither Southwest nor Boeing had seen the complaint, according to media reports.
JetWorks Leasing said it arranged the sale of two ex-Southern Winds 737-200s from PLM Worldwide Leasing Corp. to AeroDirect and the sale of a DC-8-73F from US Bank NA to Spanish cargo carrier Corporacion Ygnus Air, which had been leasing the aircraft.
Airbus announced it placed work packages for the A320, A330/A340 and A380 worth $200 million over 10 years with Russian companies Irkut Scientific Production Corp. and Voronezh Aircraft Production Assn. Deliveries of components and subassemblies from the two firms will begin at the end of 2006-beginning of 2007.
Northwest Airlines executives have been named in a class-action lawsuit filed by a New York firm alleging they engaged in insider trading prior to the carrier's Chapter 11 filing on Sept. 14. Defendants include CEO Doug Steenland, former CFO Bernard Han, Chairman Gary Wilson and former director Alfred Checchi, who were among stockholders who netted combined proceeds of approximately $30 million for trades conducted between April 21 and Sept. 14.
US FAA said yesterday that Chalk's Ocean Airways, the operator of the 58-year-old Grumman G-73T Turbine Mallard that crashed near Miami ( ATWOnline¸ Dec. 20), is voluntarily grounding its fleet in order to conduct inspections on its remaining fleet, according to media reports. The airline owns four aircraft similar to the one that crashed Monday, killing all 20 aboard.
UAL Corp., parent of United Airlines, reported a $187 million net loss for November in a filing with the US Bankruptcy Court, including $159 million in largely noncash reorganization expenses involving aircraft-related transactions. The company posted a net loss of $698 million in October, 84% of which was tied to charges related to the termination of its pilots' defined benefit pension plan ( ATWOnline, Nov. 24).
