After almost entering oneworld last year, Swiss International Air Lines will become a member of the Star Alliance after the chief executive board of Star unanimously approved the carrier's application for membership at its biannual meeting in Kyoto. The move was widely expected after Lufthansa, a founding member of the alliance, agreed in March to purchase Swiss ( ATWOnline, March 23).
Susumu Yamaji, former president and chairman of Japan Airlines, died in Tokyo May 27 at the age of 80. Yamaji joined JAL in July 1985 after a career in the Ministry of Transport and other government agencies. He was appointed president in December 1985 and helped to restore the airline following the August crash of a 747 in which 520 people were killed. He also oversaw the privatization of JAL in 1987. In June 1990 he was appointed vice-chairman, subsequently becoming chairman in 1991. He retired from the chairmanship in June 1998 but continued to serve as an adviser.
Air New Zealand will not reapply for regulatory approval for an equity alliance with Qantas. Speaking to ATWOnline in Kyoto at the Star Alliance AGM, ANZ CEO Ralph Norris said the airline is looking at some "cooperation with Qantas" but an equity alliance is off the agenda. The carriers fought a two-year battle with regulators for Qantas to take a 25% stake in ANZ in a far-reaching alliance. Both applications initially were rejected last year but an appeal to the Australian Competition Tribunal was successful, opening the way for a fresh bid.
Delta Air Lines said it reached agreement to amend several financial covenants included in its credit agreement with GE Capital Corp., which was finalized in December. According to a filing with the Securities and Exchange Commission, the amendment reduces the EBITDAR levels Delta must meet for certain periods, which the airline said was necessary because of high fuel prices. In addition, it increases the unrestricted funds that Delta is required to maintain to not less than $1 billion at all times.
Ethiopian Airlines boosted its firm order for 787s to 10 by exercising purchase rights for five more of the jets ( ATWOnline, Feb. 7). The order, which now has a value of $1.6 billion at list prices, also was finalized. Ethiopian is scheduled to receive its first 787 in 2008. CEO Girma Wake told ATWOnline during the IATA AGM in Tokyo that the carrier is looking for two 777-200s in order to launch a thrice-weekly service from Addis Abba to New York via Accra by October. "If no 777s are available on the market, we will lease two 747-400s.
Gol, although it is facing "intense" price competition in the second quarter that has caused yields to decline, reaffirmed its financial outlook for 2005. The carrier said it still expects net revenues of roughly 3 billion reais ($1.32 billion) and anticipates delivering an EBITDAR margin of 38%-40% and an operating margin of 27%-29%.
SAS Cargo reported an EBT of Sek12 million ($1.6 million) for 2004, its third consecutive profitable year. Turnover totaled Sek2.83 billion but yield continued to fall owing to overcapacity in the market that drove prices down, along with decreasing rates in the US.
Fares continued to fall, oil prices continued to rise. That sums up the experience for the 11 largest US passenger airlines in the first quarter ended March 31. In aggregate, they posted a net loss of $3.2 billion for the period, more than double the $1.54 billion shed in the prior-year period. Losses were not spread evenly, however, as two airlinesDelta and Unitedspilled $2 out of every $3 in red ink, much of it owing to special charges related to their respective restructurings.
Although the sky-high energy prices of the past 18 months have created major hardships for the airline industry and driven a few to the edge of the financial abyss, a positive side effect for beleaguered legacy carriers has been the stifling of interest in spreading the low-fare revolution into the arena of long-haul intercontinental services. Even investors with kerosene in their veins know that with Brent crude pushing $54 a barrel, this is not the time to take a flyer on a couple of used 747s or even 767s to fly between New York and London.
In March it was inducted formally as the Star Alliances 16th member in ceremonies in Lisbon. Its Navigator frequent-flier program was renamed Victoria. It is celebrating its 60th anniversary as an airline, and CEO Fernando Pinto is president of AEA for 2005.
The principles of radio frequency identification have been around since development of the Identification Friend or Foe system in World War II. But it is only recently that the technology is being seen as a key contributor to the airline industry, though it is widely in service in the logistics, supply-chain, retailing and other commercial businesses.
AirAsia appointed Jean Chang executive VP-Greater China & North Asia. Airbus North America welcomed Kristi A. Tucker as communications dir. American Airlines promoted Chuck Imhof to MD-Greater New York Div. and Jim Carter to MD-Eastern Div. Atlas Air Worldwide Holdings named Gordon L. Hutchinson VP & controller. BCI Aircraft Leasing introduced Erik Dahmen as MD-Europe & Middle East. British Airways Regional Cargo tapped Peter Smith as chairman. CAAC appointed Xianping Wang of GCW Consulting as special adviser.
Six months ago, Avianca successfully reorganized under Chapter 11 of the US bankruptcy code, thereby becoming the first non-US airline to use the process to restructure its financial obligations. But the Colombian flag carriers journey through Uncle Sams legal system, which ended on Dec. 10, 2004, has done far more than add a footnote to American business law.
Ryanair reported an adjusted net profit after exceptional costs and goodwill of €268.9 million ($330.9 million) for the financial year ended March 31, a 19% increase compared to the adjusted net profit of €226.6 million in the previous year.
B/E Aerospace was selected by Air Canada to perform an upgrade of the airline's seating on 143 aircraft. Under the deal, B/E will manufacture and deliver its Spectrum family of coach and first class seating for AC's Hospitality Service and Executive Class on its narrowbody fleet and new Bombardier regional jets. AC's widebody aircraft also will be equipped with Spectrum economy seats. Total value of the deal is roughly $50 million and deliveries are expected to begin later this year.
Jet Airways of India is in final talks concerning an order for up to 15 long-haul aircraft to replace and supplement three A340s leased from South African Airways and four new A330s that will be leased from ILFC beginning next April. Jet is evaluating aircraft such as the A340-600 and 777-300ER and availability of delivery positions in 2007 is a key criterion, CEO Wolfgang Prock-Schauer told ATWOnline in Tokyo at the IATA AGM. "Our priority is to expand our long-haul operation," he said.
Dubai-based Emirates came under concerted attack by rival airline CEOs at an industry forum held during the IATA AGM in Tokyo earlier this week. The extraordinary debate, which lasted more than an hour Monday, started when British Airways CEO Rod Eddington posed a question about whether airlines should or should not be government-owned or protected.
United Airlines appears to have avoided potentially crippling strike action after reaching an agreement in principle on a new contract with 20,000 ramp agents and customer contact employees represented by the International Assn. of Machinists.
Alaska Airlines and its pilots have reached a tentative agreement on a new five-year contract that if ratified will supersede the two-year deal that took effect at the beginning of May after an arbitration decision ( ATWOnline, May 3). According to the carrier, the new contract includes a 20% reduction in both captain and first officer wages as well as work rule changes that will result in "significant productivity improvements." It also allows present employees to choose between the current pension plan and a defined contribution retirement benefit.
Virgin Atlantic reported a pre-tax profit of £68 million ($124 million) for the 12 months ended Feb. 28 compared to a pre-tax profit of £20.9 million in the prior financial year that covered the 10 months ended Feb. 29, 2004 (Virgin changed its reporting period during the year to match that of its 49% shareholder Singapore Airlines). Turnover for the year rose 28.3% to £1.63 billion. Results include activities of Virgin Atlantic Airways and the group's holiday and cargo operations.
Frontier Airlines reported a net loss of $3.7 million for the fiscal fourth quarter ended March 31, which included on pre-tax basis a $2.4 million unrealized fuel derivative gain and a $0.4 million gain from the sale of spare parts and inventory. This compares to a net loss of $5.8 million in the year-ago period. "While we are disappointed with the losses in our fourth fiscal quarter, we are encouraged by some positive trends which have surfaced this quarter," President and CEO Jeff Potter said.
UK and New Zealand initialed a new aviation agreement on air services that removes almost all restrictions on flights between and beyond the two countries. It also applies state aid rules to ensure a level playing field for competition and liberalizes arrangements on a wide range of other issues, including marketing arrangements, ground handling and other operational matters. The previous agreement limited flights between the countries to seven per week for each side.
Alitalia posted a record net loss of €812 million ($1.02 billion) in 2004 against a net loss of €519.7 million in 2003, owing primarily to €308.6 million in restructuring charges.
Assn. of Asia Pacific Airlines reported a 9.9% hike in passengers on international flights to 10.6 million in March. Traffic in terms of RPKs rose 8.1% on a slightly slower capacity increase of 7.2%, resulting in a 0.6-point increase in load factor to 71.7%. International freight traffic in terms of FTKs climbed 6.5%. However, capacity was up 9% and as a result the average freight load factor fell 1.5 points to 64.9%. AAPA represents 17 airlines.
