Opening up of the UK-India market ( ATWOnline, April 14) will lead to a fall in yield, predicted Virgin Atlantic CEO Steve Ridgeway. A revision of the bilateral between the countries led to a dramatic increase in weekly frequencies for airlines on both sides as well as liberalization of the number of carriers allowed to operate the services. "It's still early days, but on the London Heathrow to Mumbai route yields could drop by 10%," Ridgeway told this website at a European Aviation Club luncheon in Brussels.
For the first time, Mesaba Airlines has landed a deal to operate CRJs as a Northwest Airlink partner. Up until now, all CRJ flying has been done by Pinnacle Airlines, which operates 123 44-seat CRJs on behalf of Northwest. On Friday, Mesaba announced the signing of a letter of intent with NWA to operate 15 CRJs with options on an additional 20. The aircraft, valued at $386 million, will be purchased from Bombardier by Northwest and leased to Mesaba, whose current fleet comprises 63 Saab 340s and 42 Avro RJ85s.
ExpressJet Holdings posted net income of $23.3 million for the first quarter ended March 31, an 18.9% decline from net income of $28.7 million in the year-ago period. The company said the figures represent the first quarterly results of operations under its new 2005 compensation rates, which were established with a 10% target operating margin under its capacity purchase agreement with Continental Airlines. First-quarter operating revenue increased 3% to $375.4 million while operating expenses grew 6.7% to $336.6 million. However, CASM dropped 6.5% to 12.28 cents.
Mxi Technologies announced that Air Mauritius has selected the Mxi Maintenix software product as its maintenance and materials system to replace the legacy Maxi-Merlin system in use at the carrier today.
Cyprus Airways confirmed that its Hellas Jet subsidiary will cease operations May 10. "This decision was deemed necessary as the conditions of the market proved to be against the company's plans," Cyprus Airways said in a statement. Cyprus Airways Group established the Athens-based scheduled airline in June 2003, anticipating a sharp growth in air travel related to the 2004 Olympic Games. Reportedly, Hellas Jet is posting losses of €1.5 million ($2 million) a month.
Republic Airways Holdings late Thursday placed a bid to purchase Shuttle America, which if accepted will enable it to fly additional Embraer 170s while remaining in compliance with the pilot contracts of the mainline carriers it currently serves.
"Record high fuel prices and increasingly noncompetitive labor costs," excess industry capacity and the impact of Delta's SimpliFares were cited by Northwest Airlines President and CEO Doug Steenland as he reported that the carrier lost $458 million in the first quarter ended March 31. Excluding a special $18 million charge related to a loan prepayment by former subsidiary Pinnacle Airlines, the loss dropped to $440 million. In the year-ago period, NWA lost $223 million.
Delta Air Lines reported a staggering $1.08 billion net loss for the first quarter ended March 31, nearly three times higher than the $387 million net loss it posted last year, although hefty special items in both periods make comparisons difficult.
Legislation to give US airlines more time to make payments to underfunded employee pension plans was proposed by US Sens. Johnny Isakson (R-Ga.) and John Rockefeller IV (D-W.Va.) earlier this week. The Employee Pension Preservation Act of 2005 would allow carriers to spread their deferred pension funding obligations over 25 years instead of the current four years. In return, unions would have to agree to freeze their benefits at the current level.
Air France-KLM Group Chairman and CEO Jean-Cyril Spinetta said Air France will not participate in Alitalia's planned €1.2 billion ($1.57 billion) capital increase, Reuters reported. "The question has not been put [to us]. The subject is not on the table at all," Spinetta told the Anglo-American Press Assn. in Paris. AF has about 2% of Alitalia and Spinetta sits on the board of the Italian airline.
JetBlue became only the third US Major (and the third low-cost airline) to report a profit for the first quarter as it posted earnings of $7 million, slightly ahead of Wall Street expectations but a 54.1% decline compared to earnings of $15.2 million last year.
Hawaiian Airlines reported a net loss of $2 million for March in its Monthly Operating Report filed with the US Bankruptcy Court. This compares to net income of $3.3 million in the year-ago period. Revenue rose 9.4% to $69.7 million while operating expenses climbed 17% to $65.3 million, resulting in an operating profit of $4.4 million, a 43.6% decrease from an operating profit of $7.8 million in March 2004. During the month, Hawaiian improved its RASM by 8.9% but its CASM jumped 16.3% year-over-year. Excluding fuel, CASM climbed just 11%.
Continental Airlines cited continuing weak domestic yields and historically high fuel costs as it reported that its first-quarter loss grew to $184 million from $124 million in the year-ago period. Excluding an $8 million special gain related to the company's defined benefit pension plan, the current-period loss was $192 million.
Hammered by high fuel prices, AMR Corp., parent of American Airlines, reported a $162 million net loss for the first quarter ended March 31, which included a tax credit of $69 million.
Cargolux posted a net profit of $83.5 million in 2004, up 18% on the prior year. Revenues increased 26.4% to $1.2 billion, passing the $1 billion mark for the first time in the company's history, and operating profit grew 24% to $80.7 million. The carrier's core business, the sale of lift and related transportation services, accounted for 98.4% of the total operating income and grew 26.3% during the year. Revenue from charter activities more than doubled. Operating expenses increased 28.4%, mainly owing to higher fuel prices and the strong euro.
Austrian Airlines subsidiary Lauda Air wants to base up to four 737s or A320s in the US for the coming winter season and is in talks with US tour operators, MD Thomas Suritsch told ATWOnline. The aircraft will operate from November until April on routes between the US and Caribbean. Lauda will base its own maintenance staff in the US. Although plans call for the aircraft to be dry-leased to tour operators, the airline is exploring the possibility of a wet-lease deal subject to FAA approval.
America West Airlines CEO Doug Parker declined comment yesterday on a report in the Wall Street Journal that the carrier is near to an agreement to merge with bankrupt US Airways.
Iberia is considering taking over or setting up a low-cost airline of its own to compete on a level playing field with the ever-increasing presence of LCCs in the short- and medium-haul markets, Europa Press reported. "Either we fight with the same weapons as these airlines or we will have to stay out of these markets," MD Angel Mullor told the Spanish news agency. An Iberia spokesperson said Mullor's remarks were reported accurately. In recent months, Iberia has been vocal over what it calls unfair competition from budget airlines.
South African Airways this week named Kyrl Acton as its first-ever COO. The newly conceived position replaces that of deputy CEO, last held by Oyama Mabandla, whose resignation became effective March 31 ( ATWOnline, April 19). SAA said Acton's duties will encompass cargo, scheduling and commercial services, which include revenue management, pricing, sales and marketing. An Irish national and former top executive at Aer Lingus and later at LanChile, Acton has worked for Unisys since 2002 as transportation VP overseeing aviation markets in Europe, the Middle East and Africa.
Malev reduced its net loss to 2.11 billion forints ($11 million) in 2004 from 4.3 billion forints in 2003. CEO James Gonci was quoted by news agency MTI as saying the carrier can remain stable until at least the end of 2006 and will not require state support. The Hungarian government has been attempting to sell the airline and launched another effort at the beginning of the month ( ATWOnline, April 6).
CAE was awarded contracts to provide flight training to two US customers at a total value of roughly $14 million over a five-year period. Under the first, CAE will furnish training on A320s to USA3000 Airlines through the Airbus-CAE training cooperation. In the second contract, CAE SimuFlite was selected by FAA Aviation System Standards' Aviation Training Team to provide initial and recurrent training to more than 150 FAA pilots on a number of different business aircraft.
Proliferation of city-pairs has continued after a slight downturn following 9/11, according to new data from OAG. The figures were presented by VP-Marketing Randy Baseler as part of Boeing's latest market forecast, which uses the number of nonstops in OAG's August schedules on a year-over-year basis. The figures, which exclude regional jets, show that in 1985 there were just under 5,000 city-pairs and this number grew to 9,000 in 2000 and just over 10,000 in August 2004.
Blue1 VP-Finance and CFO Stefan Wentjaervi was appointed president and CEO of the Finnish SAS subsidiary. He will take up his position after the summer and is replacing current President and CEO Sveneric Persson, who is leaving to take over as head of the SAS organization in the Americas on Sept. 1.
Global ePoint's AirWorks Division received a new FAA STC for its cockpit door surveillance system, which now spans the entire family of 737s with two configurations.
