Independence Air is likely to have only around $5 million in cash by year end, a level that is "inconsistent with continued operations," JP Morgan analyst Jamie Baker stated in a report released Friday. Furthermore, with "no identifiable assets to leverage," debtor-in-possession financing for Independence "appears elusive." The airline, which markets itself as FLYi, lost $192.2 million in 2004 and ended the year with $169.2 million in cash and short-term investments, according to Baker. He forecasts it will lose $183.2 million this year.
CSA Czech Airlines said it carried 964,000 passengers during the first quarter of 2005, up 17% over the same period in 2004. On UK-Prague routes there was an increase of 9%. CSA said it expects its net profit to rise to CZK521.5 million ($22.4 million) this year from CZK271 million in 2004, with passenger traffic growing to 5.4 million from 4.3 million.
AirTran Airways and its flight attendants, represented by the Assn. of Flight Attendants, reached a tentative agreement on a new 42-month contract after two-and-a-half years of negotiations. Terms of the deal were not released but AFA has endorsed the agreement and will send it to members for a ratification vote, which is expected to occur within 30 days. If ratified, the new contract will take effect June 1. AirTran also is negotiating with its pilots, who are represented by the National Pilots Assn.
US Airways Group's net loss in the first quarter widened to $191 million from $177 million in the year-ago period as its cost restructuring under Chapter 11 was offset by low-fare competition and high fuel prices. Results from the 2005 first quarter included a one-time net gain of $89 million primarily related to the curtailment of its defined benefit plans and other postretirement medical benefits. Excluding unusual items, net loss for the quarter was $280 million.
Hawaiian Airlines took a step closer to emerging from Chapter 11 after reaching a revised agreement with its pilots union last week on a new contract. The bankruptcy court had been preparing to rule on a request from the airline's management to impose a new contract on the work group. HAL said it will ask the court to defer a ruling until after the vote has been taken The carrier and negotiators for the Air Line Pilots Assn. reached a tentative agreement earlier this year but it was voted down by union membership ( ATWOnline, March 30).
Swiss International Air Lines may increase its fuel surcharge again to help cushion the impact of rising fuel prices, CEO Christoph Franz said during a media meeting in Zurich, Reuters reported. The carrier currently charges an extra CHF48 ($40) on long-haul services and CHF18 on European flights. Such surcharges only cover about a quarter of the additional costs, Franz added. Swiss previously said that it had hedged about 27% of its fuel needs for 2005 as of the end of 2004 after selling all of its 2004 hedges.
Alitalia intends to postpone its planned rights issue to September, which will be after the group approves its first-half results, Il Sole 24 Ore reported. The company also could reduce the amount of the capital increase to less than the planned €1.2 billion ($1.54 billion). The rights issue will dilute the stake of the Italian government to below 50% from the current 63%. Alitalia did not deny the report and no reason was given for delaying the rights issue. Separately, Alitalia cabin crews called a 4-hr. strike for May 18.
American Airlines, which lost $162 million in the first quarter ( ATWOnline, April 21), late Thursday announced that it filed to increase most domestic US and US-Canada fares by $5 one-way and $10 roundtrip effective immediately in order to help offset rising fuel prices.
When members of the Regional Airline Assn. get together in Cincinnati this month for their annual meeting, they will discuss many of the same issues facing their Major airline partners. But they will do so from a decidedly different perspective, because unlike the US network carriers that have lost more than $27 billion since the end of 2000, the Regional segment is firmly in the black. According to FAA data, that part of the industry enjoyed an aggregate operating profit of $1 billion and net earnings of $432.8 million in the fiscal year ended Sept. 30, 2004.
Chris Browne, the fashionable MD of Manchester-based First Choice Airways Ltd., does not mince words. The last three years have been "really, really" hard work, she says. "We suffered like everybody and had to downsize, reduce costs." But, she adds, "It forced us to refocus. We took a very long hard look at what we were doing with the business." Browne, who began her aviation career with Iberia and rose to the position of GM-UK and Ireland, was named to her current position in April 2002, three years after she joined First Choice Holidays.
China's airline industry is an improbable blend of state control and regulation, traditional culture, modern market reality and a zeal for profit, yet it works. Twenty-five years ago there were just 180 air routes in the country, 18 of them international, and only 3.43 million passengers took to the vacant skies annually. Today China has overtaken Japan as the largest air travel market in Asia and is second only to the US in terms of total scheduled departing seats, according to the ITTC consultancy division of Airclaims, which is headed by former IATA Chief Economist Peter Morris.
AirLiance Materials promoted Roscoe Musselwhite to COO. ASIG appointed Michael J. Snyder senior VP-operations-North America. Big Sky Transportation tapped Fred L. deLeeuw as its new president. Charles River Associates welcomed Robert Gallamore and Michael Gorman as senior consultants to the transportation practice. FedEx Corp. chose Christine Richards to succeed Kenneth Masterson, who is retiring, as general counsel. Inflight Logistics announced the addition of Julie Redmond to its team of consultants.
One does not have to go all the way back to the postwar era captured in Carol Reed's film noir masterpiece "The Third Man" to recall a time when Vienna was a popular conduit between East and West for the movement of people and goods. Until the end of the Cold War, Austria's status as a member of the nonaligned community of nations and its geographic location astride the Iron Curtain enabled flag carrier Austrian Airlines to develop an effective route network into the East Bloc and USSR, while Vienna Airport itself became the preferred gateway for such journeys.
United Airlines' settlement with the US Pension Benefit Guaranty Corp. that permits the bankrupt carrier to terminate its defined benefit pension plans ( ATWOnline, April 26) also requires it to transfer to PBGC securities having a face value of $1.5 billion. These include $500 million in principal amount of 25-year 6% senior subordinated unsecured notes, 5 million shares of 2% convertible preferred stock with a liquidation value of $100 per share and $500 million in principal amount of 8% contingent senior subordinated unsecured notes.
Although high fuel prices resulted in $37.3 million in added expenses during the quarter, LAN Airlines' net income for the three months ended March 31 fell just 3.7% to $46.3 million from $48.1 million in the year-ago period.
Austrian Airlines Group's first-quarter loss widened to €80.8 million ($104.3 million) from €47.9 million a year ago. The 2005 period was marked by load factor weakness, overcapacity and extremely high fuel costs, while "December's disastrous tsunami. . .proved to be a terrible continuation of the series of external shocks to which the Austrian Airlines Group has been repeatedly exposed in recent years," the carrier explained.
Continental Airlines applied to the US Dept. of Transportation to operate daily nonstop flights from Houston to Buenos Aires. If approved, the carrier said it would launch the flights in November using a 767-200 in a two-class configuration.
WestJet, impacted by high fuel prices and very low yields as well as low fares driven by "irrational" pricing by certain competitors, reported a C$9.6 million ($7.7 million) net loss for the first quarter ended March 31, a complete reversal compared to net income of C$512,000 in 2004 and also its second consecutive quarterly loss after a streak of 31 profitable quarters. Total revenue rose 35.9% to C$294.6 million on a 27.3% increase in passenger revenue and a 75.9% jump in charter revenue, a result of the company's focus on boosting charter flying during weaker travel periods.
World Air Holdings, parent of World Airways, on Wednesday announced it had acquired North American Airlines, a small privately held New York-based carrier, for $35 million in cash. The airlines will be managed and operated independently of one another, said World Holdings CEO Randy Martinez. World operates 16 MD-11s and DC-10s in civil and military passenger and cargo charter services, while NAA operates three leased 767-300ERs and five leased 757-200ERs in civil and military charter services. It also has limited scheduled flights to the Caribbean and Hawaii. It employs 600.
Strong performance of its international operations, including the first annual profit since it began operating international services in 1986, propelled ANA Group to a consolidated net profit of ¥26.9 billion ($254.2 million) for the 2004 fiscal year ended March 31. This represents the second-highest result in the company's history and a 25% increase over a net profit of ¥24.7 billion in the year-ago period. Operating profit more than doubled to ¥77.7 billion from ¥34.3 billion in the previous financial year.
Boeing reported net earnings of $535 million for the first quarter ended March 31, a 14% decline versus net earnings of $623 million in the 2004 period, as significantly higher noncash expenses for share-based plans, pensions and deferred compensation offset strong performance by its Commercial Airplanes and Integrated Defense Systems units. Total revenue rose just 0.3% to $12.99 billion and total costs and expenses declined 0.2% to $10.78 billion. Earnings from continuing operations fell 16.6% to $687 million from $824 million in the 2004 first quarter.
Citing sharp sales growth and increasing customer preference for its products, Emirates Group reported a record net profit of Dhs2.6 billion ($707.9 million) for the 2004-05 fiscal year ended March 31, a 49% jump over a net profit of Dhs1.75 billion in FY04. Total revenue rose 36.2% to Dhs19.09 billion while total costs climbed 34.9% to Dhs16.4 billion, producing an operating profit of Dhs2.81 billion, up 47.1% over operating profit of Dhs1.91 billion in the prior financial year.
Emirates Airline continues to push Airbus to launch the stretch version of the A380, the proposed dash 900, President Tim Clark told ATWOnline in Dubai.
