Although it has shed billions in costs during its second restructuring, US Airways Group posted a $62 million net loss for the second quarter ended June 30, which included $26 million in one-time charges consisting of $19 million in professional fees, $6 million in damage and deficiency claims on rejected aircraft and $4 million of severance that was offset slightly by $3 million in interest on accumulated cash. This compares to a net income of $34 million in the year-ago period. Excluding one-time items, net loss for the 2005 second quarter totaled $36 million.
World scheduled passenger airline traffic is expected to reach 3.71 trillion RPKs this year, up 7.6% compared to 3.44 trillion RPKs in 2004, followed by 6.5% growth in 2006 and 6.2% in 2007, according to ICAO's latest medium-term forecast. The strongest growth is expected from Middle East airlines, with an average annual growth rate of 10.9% over the three-year forecast period.
Frontier Airlines posted a $2.7 million net loss in the fiscal first quarter ended June 30, improved from a $6.6 million net loss in the year-ago period. The 2005 first quarter included several one-time items such as a $3.3 million charge related to three leased 737-300s the carrier stopped using during the quarter and an unrealized loss on fuel hedges of $1 million.
United Airlines cabin staff, represented by the Assn. of Flight Attendants, went on the offensive yesterday with coordinated demonstrations at airports in the US, Europe and Asia, threatening to strike in protest over the termination of their pension plan. "Current United management has held its employees and creditors hostage in Chapter 11 for nearly 1,000 days," union head Greg Davidowitch said. "We're hitting the streets around the globe to demonstrate our resolve. We want our pensions back, and we want this management team out."
Midwest Air Group reported an $8.2 million net loss for the second quarter ended June 30 compared to a $3.5 million net loss in the year-ago period. The company attributed the results primarily to the increase in fuel prices and some unusual items. Operating loss also widened from $2.9 million to $8.2 million. Despite the red ink, Chairman and CEO Timothy Hoeksema said he believes the company is making significant progress to return to profitability.
JP Morgan analyst Jamie Baker does not believe Delta Air Lines will file for Chapter 11 this year despite CEO Gerald Grinstein's Tuesday letter to employees warning them that the level of savings being achieved "is not enough" ( ATWOnline, July 28). In a report released after Grinstein's memo was made public Wednesday, Baker noted that, "market speculation appears largely focused on a bankruptcy as early as. .
Continental Airlines placed an order with Boeing for two additional 777-200ERs for its international expansion. The aircraft are scheduled for delivery in the first quarter of 2007 and Continental said Boeing agreed to provide backstop financing. Currently, the airline operates 18 777-200ERs in a two-class, 283-seat configuration.
Hefty special charges overshadowed an improved operating performance at United Airlines during the second quarter as parent UAL Corp. reported a loss of $1.43 billion for the three months ended June 30 net of $1.39 billion in one-time reorganization items. In the year-ago period, UAL had a net loss of $247 million, a figure that included $144 million in reorganization items. Excluding one-time items in both periods, the company reduced its loss to $26 million from a deficit of $103 million in 2004.
Delta Air Lines yesterday unveiled some details of its upcoming fall schedule that it says is designed to improve its operational reliability at its Atlanta hub. Under the schedule that goes into effect Sept. 1, the carrier plans to reduce to 45 min. the minimum time narrowbody aircraft spend on the ground between flights--a 10-min. reduction over last year; make better use of aircraft by freeing up the equivalent of eight additional aircraft from the schedule, and adjust flights in off-peak periods to match capacity better with demand in the fall when air travel slows.
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.
