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.
St. George, Utah-based Regional SkyWest reported net income of $24.8 million for the second quarter ended June 30, a 23.5% increase over net income of $20.1 million in the year-ago period. Operating revenues rose 43.6% to $384 million, primarily as a result of a 44.5% increase in ASMs, while operating expenses climbed 46.2% to $339.4 million. This resulted in a 26.8% growth in operating income to $44.6 million from $35.2 million.
In a deal that may lead to a mega low-cost airline group in Asia, Qantas agreed to pay S$60 million ($36 million) for Singapore-based Valuair, which is to be merged into Qantas's 49%-controlled Jetstar Asia. The deal was confirmed yesterday by Jetstar CEO Ken Ryan, who will take control of Valuair. The new entity will see Qantas's stake reduced to 45.5%. The Australian airline also is holding talks with Kuala Lumpur-based AirAsia, which had been prepared to inject S$20 million into Valuair.
Air New Zealand reached agreement with its long-haul cabin crew, represented by FARSA, on a new three-year contract, staving off a third walkout that was set to begin yesterday. Terms of the deal were not released but the airline previously had offered a 3.3% wage increase in each of the next three years while the union was demanding 3.8%. Other issues included crewing levels for the carrier's new 777-300ERs. The earlier 48-hr. strikes led ANZ to cancel 85 flights, causing widespread disruption to passengers.
ExpressJet, which operates in the Continental Express feeder network, reported a 17.9% drop in net income to $24.3 million for the second quarter ended June 30 compared to net income of $29.7 million in the prior-year period. Operating revenue in the quarter rose 4.8% to $388.7 million while operating expenses jumped 8.7% to $348.7 million on a 13.3% increase in fuel expense. However, operating CASM actually decreased 6.5% to 11.52 cents. Operating income was down 20.3% to $40 million from $50.2 million in the prior-year period.
Passengers with respiratory problems will be able to use two kinds of portable oxygen concentrator units onboard commercial aircraft under a new regulation published by US FAA. The two devices, manufactured by AirSep Corp. and Inogen Inc., do not use compressed oxygen, which the agency classifies as a hazardous material. Instead they work by filtering nitrogen from the air and delivering oxygen in concentrated form to the user. The new rule marks the first time passengers will be able to use their own medical oxygen devices onboard an airliner.
Adria Airways carried 93,700 passengers in June, a 7% increase over the same month last year. There were 5% fewer travelers on scheduled flights this June but 81% more on charter routes. In the first six months, Adria carried 411,800 passengers, up 3% compared to the first half of last year. It has approximately 180 weekly regular flights to 18 cities in Europe and will start a twice-weekly service from Ljubljana to Warsaw by September.
NAV Canada said it reached a tentative collective agreement with the Canadian Auto Workers/Canadian Air Traffic Control Assn. representing air traffic controllers. Terms were not disclosed. The agreement is subject to ratification by union membership.
Varig signed a six-month consultancy contract with Lufthansa Consulting for its reorganization and restructuring. Following the filing of an application for the protection of creditors at the bankruptcy court, the airline must develop an appropriate restructuring plan within 60 days as well as a related business plan and submit those to the court. If the court accepts the plans, the implementation phase must be completed within a maximum of 120 days thereafter.
Germanwings increased its first-half sales by 60% to €163 million ($198 million), the carrier said in an statement. The number of passengers rose 60% to more than 2.3 million. The airline expects to carry 5.5-6 million passengers this year, generating sales of about €400 million, up from €247 million in 2004.
Air China signed a contract with Airbus to purchase 20 A330-200s, which are scheduled for delivery beginning next May. China Aviation Supplies Import and Export Group was involved in the deal by signing a GTA with Airbus. Air China President Li Jiaxiang said the new aircraft will help the carrier expand its fleet and open more international destinations. According to ATW's "World Airline Report," Air China currently operates a fleet of 83 aircraft consisting of both Airbus and Boeing models.
United Airlines cleared a major hurdle yesterday when its 20,000 ramp agents and customer contact employees, represented by the International Assn. of Machinists, ratified a tentative agreement reached in June ( ATWOnline, June 20). According to the union, roughly 67% of IAM members voted to approve the agreement. Terms of the deal were not released but it is believed to provide the carrier with savings of $175 million a year.
Buoyed by fuel hedge gains, Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported that it earned $17.4 million in the second quarter compared to a loss of $1.7 million last year. Excluding special items, the current-period result rose to $24.7 million versus income of $8.2 million in 2004. Fuel hedges contributed $27.6 million in the quarter, up from $25.9 million last year.
