Virgin Blue further rationalized the nonperforming routes in its domestic network as it continues its drive to recover earnings growth and improve yields under new owner Patrick Corp. Citing unsatisfactory demand, CCO Stefan Pichler said the carrier will withdraw from the Adelaide-Alice Springs and Sydney-Darwin routes from Sept. 4. This will mean it no longer services the "Red Center" of Alice Springs.
Air France-KLM Group flew 15.8 billion RPKs in June, up 7.8% on the year-ago period. Capacity grew 4.6% to 19.39 billion ASKs and load factor gained 2.4 points to 81.5%. The group carried 6.2 million passengers, a 6.1% increase, of which 4.5 million were on the European network. Cargo activity continued to suffer from the weakness of European exports and posted a 1.1% decrease while capacity rose 4.3%, sending load factor down 3.5 points to 64.7%.
SAS Braathens is guilty of predatory pricing in an attempt to drive low-fare rival Norwegian off the Oslo-Aalesund route, according to Norway's competition authority, which proposed fining the carrier NOK30 million ($4.5 million). According to Reuters, the authority found that SAS Braathens set fares at levels too low to recover costs. The airline already is challenging an NOK20 million fine for abuse of market position on the Oslo-Haugesund route.
Yesterday's terrorist attacks in London are unlikely to have a serious or lasting impact on transatlantic travel to the UK and Europe, according to JP Morgan's Jamie Baker, who said in a report released Thursday that he expects "a temporary slight decline in UK demand, [with] little to no decline for broader Europe." Baker noted that following the terrorist attack in Madrid in March 2004, "US and European carriers serving Spain experienced little to no lasting demand degradation."
North Asia region will attract a significant number of new low-cost carriers, according to the Centre for Asia Pacific Aviation. "We are at the point of what should be a major increase in low-cost air travel across the north of the region," said CAPA MD Peter Harbison. At least 12 new airlines are expected to begin operations over the next 12 months in Macau, China, Hong Kong, South Korea and Japan. Harbison said the big issue is how fast governments are prepared to liberalize. "We think conditions are ripe for [LCC] development in North Asia.
EasyJet carried 2.6 million passengers in June, up 15.4% compared with the year-ago month. Load factor slipped 0.4 point to 85.6%. For the rolling 12 months ended June 30, the airline carried 28.3 million passengers, up 23.7% on the prior year. Load factor rose 1.1 points to 85.1%. Unaudited revenues for the 12-month period increased 22.5% to £1.26 billion ($2.2 billion). "We experienced a more favorable revenue environment during the month, but this has been balanced by an unfavorable movement in the spot price of jet fuel," CEO Ray Webster said.
Alitalia said its unaudited estimated loss before tax and extraordinary items narrowed to about €120 million ($143.3 million) in the first half of the year from €329 million a year earlier as preliminary passenger revenues increased 15% to €1.74 billion. Chairman and CEO Giancarlo Cimoli told unions that the group will launch its planned rights issue at the end of October or beginning of November, Il Sole 24 Ore reported. Banks underwriting the issue will include Deutsche Bank, which has provided a letter of guarantee, and Italy's Banca Intesa.
US airline ontime performance improved in May compared to the previous month and May 2004, the US Dept. of Transportation reported yesterday. In addition, the carriers canceled fewer flights. According to DOT statistics, the 20 reporting airlines recorded an overall ontime arrival rate of 83.7% in May, significantly higher than May 2004's 77.6% and slightly above April 2005's 83.4%. Of the flights that were delayed, 3.3% were caused by bad weather, down from May 2004's rate of 7.4% but on par with April when 3.3% of flights also were delayed by weather.
Lufthansa appointed Karsten Benz VP-sales and services-Europe effective July 1. Benz took over from Ulrich Wachter, who has moved to Frankfurt to head Lufthansa's cabin crew division. In his new position, Benz has overall responsibility for sales and airport operations across Europe excluding Germany.
American Airlines flew 12.67 billion RPMs in June, up 7.8% over the year-ago period. Capacity climbed 2.8% to 15.29 billion ASMs and load factor gained 3.8 points to 82.8%. For the six months ended June 30, RPMs rose 7.1% to 68.02 billion, ASMs increased 1.5% to 87.75 billion and load factor was up 4.1 points to 77.5%. Delta Air Lines flew 11.12 billion RPMs in June, up 4.7% over the year-ago period. Capacity grew 4.3% to 13.57 billion ASMs and load factor gained 0.3 point to 82%.
DBA announced last week that Germania Express, which is owned by businessman Hinrich Bischoff, has quit its 64% stake in DBA that was taken up in March in a deal that saw DBA assume Gexx's fleet and routes ( ATWOnline, March 18). DBA Supervisory Board Chairman and main investor Hans Rudolf Woehrl said he and Bischoff decided to go their separate ways as shareholders but to continue to work together. A DBA spokesperson told this website that financial terms of the deal have not been released and that Bischoff does not plan to sell his majority interest to another company.
SkyTeam partners Delta Air Lines, Air France, Alitalia, CSA Czech Airlines, KLM and Northwest Airlines filed a response to comments on their application for antitrust immunity with the US Dept. of Transportation. "The only comments filed opposing the application were filed by American Airlines, based on its claim that the DOT's decade-long policy approving immunized alliances and seeking to open aviation markets and improve international air services through Open Skies Treaties has been a mistake," Delta Senior VP-Government Affairs Scott Yohe said.
The Aircraft Mechanics Fraternal Assn yesterday reversed itself and asked the National Mediation Board to release the union from contract talks with Northwest Airlines, citing the carrier's refusal to "take contract negotiations seriously." In May, the union successfully blocked a similar request by Northwest. If NMB grants AMFA's request, it then will offer to arbitrate a settlement. Should either party reject this, the Board will declare an impasse, initiating a 30-day cooling-off period after which the airline can impose a contract and the union may strike.
The management of Vietnam Airlines has been given the green light to pursue a conservative growth strategy that should see the state-owned carrier boost its fleet to up to 70 aircraft by 2015 from 38 today. The airline also expects to be operating pure freighters within 10 years and to carry 8-9 million passengers, according to Chairman Nguyen Sy Hung, who spoke with ATWOnline in Hanoi. VN transported 5 million passengers in 2004 and is expecting a 20% increase for 2005, making it one of the fastest-growing carriers in the region.
Spanair and airBaltic announced a marketing agreement whereby Spanair, a member of SAS Group, will place its code on three weekly flights operated by airBaltic between Riga and Barcelona while airBaltic, 47% owned by SAS, will place its code on Spanair flights from Barcelona to Spanish destinations including Madrid, Ibiza, Mahon, Bilbao, Oviedo and Palma de Mallorca.
Air France will raise its fuel surcharge by €1 ($1.19) per sector on domestic flights, €2 on medium-haul flights and €4 on long-haul fights from July 19. KLM also plans to increase its fuel surcharge by €14 ($16.66) per segment on all long-haul flights on the same day.
Brazil's Gol announced plans to establish a low-cost carrier in Mexico in partnership with Inversiones y Tecnicas Aeroportuarias, SA de CV, Fernando Chico Pardo and CPH. The carrier, which will based on the same model that has made GOL an outstanding success, is expected to commence flights in the second quarter of 2006.
AirTran Airways canceled its Atlanta-New Orleans flights scheduled for yesterday evening and this morning owing to Tropical Storm Cindy, which was expected to hit the US Gulf Coast.
America West Airlines flew 2.16 billion RPMs in June, up 4.1% over the year-ago period. Capacity climbed 0.2% to 2.59 billion ASMs and load factor jumped 3.1 points to 83.6%. For the six months ended June 30, RPMs increased 7.5% to 12.06 billion, ASMs grew 1% to 15.06 billion and load factor gained 4.8 points to 80.1%.
British Airways restated its financial results to comply with International Financial Reporting Standards in accordance with EU regulations, which required the company to adopt IFRS from April 1. Under IFRS, net profit was unchanged at £251 million ($298.9 million) for the fiscal year ended March 31 but operating profit increased to £556 million from £540 million under UK GAAP and profit before tax climbed from £415 million to £513 million. Separately, BA said it flew 9.74 billion RPKs in June, up 4.7% over the year-ago period.
US Airways announced that the 30-day period for alternative offers on its proposed merger with America West Airlines ended without any competing offers being submitted. The two airlines expect to close the merger in late September or early October.
Etihad Airways named Robert Strodel as the Abu Dhabi-based airline's first CEO. Strodel previously was head of cargo and mail for the two-year old carrier. Prior to that, he worked for Lufthansa and founded Lufthansa Cargo India in 1996, according to Etihad. He also managed an aviation consulting firm in Germany. Sheikh Ahmed Bin Saif Al Nahyan, chairman of Etihad and DG of the Civil Aviation Dept. of Abu Dhabi, said Strodel "has contributed substantially to the considerable success Etihad has enjoyed.
Continental Airlines flew 7.23 billion RPMs in June, up 7.6% over the year-ago period. Capacity climbed 7.2% to 8.8 billion ASMs and load factor gained 0.3 point to 82.2%. For the six months ended June 30, RPMs increased 9.7% to 38.4 billion, ASMs rose 4.8% to 49.07 billion and load factor jumped 3.6 points to 78.3%. In June, Continental said both consolidated and mainline passenger RASM are estimated to have increased 6%-7% compared to June 2004. For May 2005, consolidated passenger RASM gained 9% compared to the year-ago period and mainline passenger RASM rose 9.5% from May 2004.
Atlas Air Worldwide Holdings filed its 10-K annual report for 2004 with the Securities and Exchange Commission, confirming its previously announced financial results for the year ( ATWOnline, May 24), which included a five-month period that ended Dec. 31, 2004, following its emergence from Chapter 11 protection, and a seven-month period ended July 27, 2004, that preceded it. For the five-month period, the company reported net income of $22.7 million. Revenue totaled $679.3 million and total expenses were $612.3 million, producing an operating income of $67 million.
