Air China reported a 25% fall in its first-half net profit to 591.3 million yuan ($72.5 million) owing to fuel prices. Revenue also was down at 16.94 billion yuan. The carrier did not provide the Hong Kong market with details.
Gol increased the number of 737-800s scheduled for 2006 delivery to 11 from six previously. It said the aircraft will be equipped with winglets and have a special performance package permitting operation to all airports served by the carrier.
Cyprus Airways intends to present a restructuring plan to the European Commission by next month. The government-controlled carrier, which was affected by the costs associated with the shutdown of its financially troubled Greek subsidiary Hellas Jet in May, posted a net loss of CYP20.4 million ($44.7 million) for the first half of 2005. The EC approved an emergency loan of $64 million in May but further aid is subject to completion of an EU-approved plan to return the carrier to commercial viability.
US Airways received interim approval from the bankruptcy court to sell and lease back five A330s, nine A319s and five A320s. If given final approval, the transactions will raise more than $120 million in liquidity. The court also approved a deal reached between US Airways and the US Pension Benefit Guaranty Corp. resolving nearly $2.7 billion in claims. Under terms of the agreement, the carrier will pay PBGC $13.5 million in cash in addition to giving it a $10 million note and 70% of the common stock being allocated to unsecured creditors.
Ryanair carried 3.26 million passengers in August, up 27% on the year-ago period. Load factor fell 1 point to 91%. The LCC noted that for the first month in its history it carried more passengers on its European network than British Airways did on its worldwide network, although this likely was owing to disruption of BA operations at London Heathrow last month (see next item). For the rolling 12 months ended Aug. 31, Ryanair's earned seats amounted to 30.97 million and load factor averaged 84%.
An-26B cargo aircraft operated by Galaxie dba Kavatshi Airlines crashed on approach to Isiro in the Democratic Republic of Congo Monday, killing all 11 passengers and crew onboard. According to Aviation Safety Network, which cited AFP and Radio Okapi, the aircraft struck a tree and crashed approximately 1.5 km. from the runway.
European Commission confirmed that it decided to reduce the financial assistance granted to the new Athens International Airport because the airport violated some requirements. In total, some €12.8 million in financial aid is being removed. AIA, which started operating in March 2001, was co-financed with €250 million from the EU's Cohesion Fund. It is owned 55% by Greece and 40% by German construction group Hochtief.
Air France-KLM Group said it expects its operating profit for the current fiscal year ending March 31 to exceed the €534 million ($667 million) reported under IFRS for its 2005 fiscal year ( ATWOnline, July 1) as it reported that operating profit for the fiscal first quarter ended June 30 climbed 27.3% to €223 million from €175 million last year.
Mesaba Aviation said it reached a definitive agreement with Northwest Airlines to operate 15 CRJ200s under the Airlink banner, along with exclusive rights to the next 20 CRJ200 or CRJ440 aircraft NWA may order. The agreement is part of a new 10-year "omnibus airline services agreement" between the companies and also covers Mesaba's existing fleet of Saab 340s and Avro RJs, replacing a previous accord for the Saabs and Avros. "We're very excited about introducing the CRJ to our fleet and our passengers," said Mesaba President and COO John Spanjers.
American Airlines said August traffic rose 3.8% to 12.65 billion RPMs compared to the year-ago period on a 0.1% decline in capacity to 15.51 ASMs. As a result, load factor gained 3.1 points to 81.5%. Year-to-date through August, RPMs increased 6.8% to 94.2 billion, ASMs grew 1.4% to 119 billion and load factor rose 3.9 points to 79%. Passenger boardings climbed 5.4% to 8.7 million in August and 7.3% to 66.8 million for the first eight months. Southwest Airlines flew 5.7 billion RPMs in August, up 13.7 over August 2004.
Assn. of European Airlines members registered an overall traffic growth of 7% in July compared to the year-ago period. The South Atlantic market posted the highest growth with a 16% increase in traffic on 13.8% more capacity, whereas the larger Far East market recorded a 13% growth in RPKs on a capacity hike of 8.6%. Intra-European traffic rose 6.5%, with cross-border flows substantially stronger than domestic. The North Atlantic increase was just 2.2%. July passenger boardings were up 5% to 30.2 million and load factor gained 2.2 points to 81.1%.
Northwest Airlines, in a filing with the US Securities and Exchange Commission late last week, said it expects to report a loss of $350-$400 million for the third quarter excluding unusual items. It noted that its unrestricted cash position deteriorated to $1.7 billion at the end of August from $2.14 billion on June 30 and reiterated a warning that without pension relief legislation "that significantly reduces future funding requirements," it will be forced to consider a bankruptcy filing.
EasyJet reached outside the airline industry to tap Andrew Harrison as chief executive to succeed Ray Webster, who announced in May that he is retiring. Harrison, 48, will take up his new post on Dec. 1. He was chief executive of RAC, the UK motoring services group, prior to its acquisition by British insurer Aviva in March. He joined RAC predecessor company Lex Service as CEO in 1996 and led its transformation from a seller of high-end automobiles through a network of 30 dealerships into consumer services such as roadside assistance, insurance, legal services and financing.
Alteon Training and Aerolineas Argentinas opened their new joint training facility near Ezeiza Airport in Buenos Aires. The Buenos Aires Training Center has a 737-300/-500 simulator with plans to install a flat-panel 737 trainer by year end. It is Alteon's first location in South America.
AeroMobile, a joint venture of ARINC and Telenor, reached agreement with Boeing Commercial Airplanes to explore the feasibility of equipping new Boeing passenger aircraft with AeroMobile's inflight cellular solution. The agreement covers line-fit options for widebody and narrowbody aircraft starting with the 777.
Troubled Thai airline Phuket Air has been banned from French airspace, putting its longer-term expansion on hold. The carrier started services in 2001 and operates to eight domestic destinations including Phuket plus offering international charter and scheduled flights. International services are operated with four 747-200B/Cs and one 747-300 but these aircraft have been the subject of regulatory problems, with faults alleged in both the Netherlands and UK this year. The 747-300 is presently impounded in Seoul over alleged unpaid fees relating to maintenance.
British Airways will reorganize its customer service and operations department following the retirement of director Mike Street, a 42-year veteran of the airline, at the end of September. Effective Oct. 1, Geoff Want, director-safety and security since 2002, will become director of all ground operations for the airline, including assuming responsibility for the move to Terminal 5 at London Heathrow in 2008. Want joined BA in 1988.
South Korea's Hansung Airlines, which bills itself as a low-cost Regional, commenced service Aug. 31 operating twice-daily flights between Chongju and the resort island of Cheju with a 66-seat ATR 72-200. Hansung plans to grow its fleet to 10 aircraft over the next five years and a second ATR 72 will arrive at the beginning of 2006.
SkyQuest International will remarket an undisclosed number of Saab 340B turboprops on behalf of AMR Leasing. The aircraft come out of the American Eagle fleet.
AirTran completed a financing agreement with Royal Bank of Scotland for up to $345 million to fund aircraft deposits and provide permanent financing for 737-700 deliveries in 2006 and 2007. The transaction frees up $51.9 million in pre-delivery deposits made by AirTran to Boeing. SkyWorks Capital advised the airline on the transaction. Separately, AirTran said it has suspended service to Gulfport/Biloxi and New Orleans through Wednesday, Sept. 7.
Dragonair will provide two aircraft to its mainland affiliate Air China via wet-lease. The deal covers one A330 and one A320 for two years. Dragonair and Air China are linked through equity and codeshare on seven routes.
AirTran Airways Chairman and CEO Joe Leonard smiles slyly when asked to discuss everybody's favorite topic these days, the price of fuel: "I'd like to see oil go up to about $80 a barrel for about three months, then drop down to $30," he tells ATW at the carrier's modest one-story headquarters near Orlando International Airport.
This works on several levels. Most obvious is the idea of the LCC as an eating machine, chewing up the competition. Another thought, equally applicable, is the need to move forward continually or die. This characteristic is not unique to LCCs, but it seems to be of greater importance to them. Recently a groundswell of opinion has held that the LCC tide has peaked due to inter-LCC competition, aging workforces, aging fleets and reduced market opportunities. Geoffrey Thomas in last month's issue (8/05) presented this argument in fine detail.
The US airline industry continues to separate into those companies that in some small way can overcome today's record fuel prices and those that cannot. Seven of the 11 Major passenger airlines reported profits in the second quarter ended June 30. These carriers earned a combined $371 million, with 40% of that amount coming from perennial profit leader Southwest Airlines, which is heavily hedged.
