Atlas Air Worldwide Holdings released its preliminary unaudited estimates for the three months ended March 31 and also provided guidance for the current second quarter. The company cautioned that owing to the fact that it emerged from Chapter 11 in July 2004 and at that point applied the provisions of fresh-start accounting, year-over-year comparisons are difficult.
AirTran Airways flight attendants, represented by the Assn. of Flight Attendants, overwhelmingly ratified a new collective bargaining agreement reached in April. Terms of the 42-month accord were not released, but the carrier said it includes improved compensation and benefits.
Boeing and Air France reached an agreement to turn three 747-400 Combis into full freighters as part of the 747-400 Special Freighter program. According to Boeing, AF is the first carrier to announce plans to convert its former Combi aircraft, which are currently in all-passenger configuration. For the conversions ordered by AF, Boeing said the aircraft will receive a strengthened main-cabin floor, a full main-deck lining and provisions for a new cargo handling system with an upgraded flightdeck. AF expects to receive its first modified aircraft in June 2007.
US Bankruptcy Court Judge Eugene Wedoff late last week refused to rule on United Airlines' motion to abrogate contracts covering the carrier's International Assn. of Machinists-represented workers, deferring his decision until May 31. Wedoff urged the two sides to return to the bargaining table and negotiate a new deal.
Bmi is introducing at London Heathrow what it calls "Europe's first modular airline service," which will see the carrier switch to a single-class service with paid-for catering onboard and e-enabled ground services. Simultaneously, bmi will launch three fare types--tiny, standard and premium--giving three levels of flexibility and service.
Hawaiian Airlines last week received US Bankruptcy Court approval of its reorganization plan and as a result plans to emerge from Chapter 11 bankruptcy protection on June 1.
Swiss International Air Lines, which is due to be integrated into Lufthansa ( ATWOnline, March 23), reported a CHF44 million ($36 million) net loss for the first quarter ended March 31, an improvement over a CHF78 million net loss in the prior-year period.
Air Bosna, a state-owned carrier from the Balkan region, plans to resume flights next month after clinching a financing deal with Hypo Alpe Adria Bank in Austria. According to several media outlets in Austria, Air Bosna, which went bankrupt with a debt of around $13 million nearly two years ago, will be renamed BH Airlines and restart services to Switzerland, Turkey and Germany using two leased 66-seat ATR 72s. More destinations will follow.
"It's a bit strange when Regionals start investing in bankrupt [legacy] airlines," said James Parker, MD of Raymond James & Associates. Air Wisconsin and Republic Airways agreed to invest more than $100 million apiece in US Airways, while Mesa Air Group agreed to invest $30 million in Delta Air Lines and assume its leases on some 30 328JETs previously operated by Atlantic Coast Airlines. Speaking at the RAA conference last week in Cincinnati, Parker said even more changes are in store for the industry.
Virgin Blue warned of another challenging year ahead after announcing a 13.2% slide in earnings amid escalating competition from archrival Qantas, high fuel prices and slowing travel demand. CEO Brett Godfrey said the LCC has entered 2005-06 "behind the eight ball" after returning a net profit of A$138.1 million ($104.8 million) for the 12 months to March 31 compared to A$159 million for the previous year. While the result was consistent with market expectations, it represented the first profit fall in Virgin Blue's five-year history in the Australian market.
SAS Scandinavian Airlines President and CEO Joergen Lindegaard said he has no doubt that the spinoff of the multinational airline into four units--SAS Danmark, SAS Sverige, SAS Braathens and SAS International--last October was the right decision and in some parts there is already success to report. "On the operational side, it is important that we have now more speed to change and adapt new strategies. With the four airlines, everyone is more flexible," Lindegaard told ATWOnline in Stockholm.
British Airways CEO Rod Eddington watered down Airbus Chief Commercial Officer John Leahy's suggestion that it is "not a matter of if but of when" BA will order the A380.
Boosted by unexpectedly high gains from the merger of the two carriers, Air France-KLM Group--consolidating AF Group over 12 months and KLM Group over 11 months--reported net income of €351 million ($442.9 million) for the fiscal year ended March 31, up 20.2% over net income of €292 million in the prior financial year. Operating income before aircraft disposals also improved, increasing 20% to €489 million from €405 million. "The first year of the merger between AF and KLM has been a complete success," Chairman Jean-Cyril Spinetta said.
As was expected, US Airways Group and America West Holdings Corp. yesterday announced an agreement to merge and create what they described as the "first full-service nationwide airline with the consumer-friendly pricing structure of a low-fare carrier," which will operate under the US Airways brand. Annual synergies of $600 million are anticipated from the merger, resulting from route restructuring, revenue synergies and cost savings. Even with oil prices at $50 per barrel, it will be profitable, the two airlines said.
Delta Air Lines senior management "will pull out all the stops" to prevent a Chapter 11 bankruptcy filing in the fourth quarter of 2005 or first quarter of 2006, JP Morgan analyst Jamie Baker asserted in a report released yesterday. "We mistakenly underestimated management's resolve in avoiding a filing last year," Baker stated as he predicted that "a bankruptcy filing may be in Delta's future, but not this year."
America West Holdings Corp. stockholders during their annual meeting voted to elect the four directors nominated by the board--Matthew Hart, Robert Miller, Doug Parker and John Tierney--to three-year terms expiring at the 2008 annual meeting.
Farelogix appointed David Cerino as its chief marketing and product officer. Farelogix provides independent fare and multisource distribution technology to the global travel industry. Prior to joining Farelogix, Cerino spent four years with Orbitz as VP and GM and also served in senior positions with Amadeus.
Astar Air Cargo said the US Air Force Air Mobility Command recently presented awards to 102 of its employees who operated and provided support for missions during Operation Enduring Freedom and Operation Iraqi Freedom at a ceremony at Andrews AFB near Washington.
Ryanair announced that it has implemented a 3% pay increase for its staff following a round of direct negotiations in April. The increase, which will be retroactive to April 1, will apply to all of the carrier's employees except its pilots, who chose not to negotiate directly with the company. However, Ryanair said it remains willing to enter discussions with that group.
American Airlines yesterday said it reached an agreement in principle on a multimillion-dollar contract with Synergy Aerospace to perform heavy maintenance on 29 F100s formerly leased by American. The aircraft, which have been in storage, recently were sold to Brazil's Synergy Group, which holds controlling interest in Avianca of Colombia, OceanAir of Brazil and Wayra Peru.
ACE Aviation Holdings, parent of Air Canada, reported a C$77 million ($60.5 million) net loss for the first quarter ended March 31, improved over a net loss of C$304 million in the year-ago period, which included C$132 million in special items related to the company's recent bankruptcy reorganization. Operating loss before one-time items for the quarter also improved year-over-year, moving from C$145 million to C$10 million.
Virgin Blue abandoned negotiations over a planned low-cost joint venture based in Macau, switching its focus to prospects for an international operation linking Australia with the US. The airline confirmed that it has pulled out of long-running talks with gaming magnate Stanley Ho's Shun Tak Holdings and Air Macau concerning establishment of an airline to service the rapidly growing South China Delta region. While Shun Tak continues to hold discussions with Air Macau, Virgin Blue said it now is exploring options for a transpacific operation.
US National Transportation Safety Board yesterday determined that the probable cause of the Dec. 18, 2003, crash of a FedEx MD-10F while landing at Memphis International Airport "was the first officer's failure to properly apply crosswind landing techniques to align the airplane with the runway centerline and to properly arrest the airplane's descent rate" before touchdown.
Sichuan Airlines ordered six A320s and two A319s for delivery from late 2005 to 2008. The Chengdu-based carrier first ordered A320s in 1995 and has a fleet of eight A320s, four A321s and two A319s.
Iberia is preparing a follow-up program to its Director Plan 2003-05 that will target savings of €550-€600 million ($695.2-$758.3 million) in 2006-08 through a series of cost-cutting and productivity-boosting measures that may include creation or acquisition of an LCC to cater to the low-cost air travel segment. "There are markets where we can't compete anymore in current conditions. We either create a second brand or we convince trade unions of the need for a second salary scale for new employees," CEO Angel Mullor told Expansion.
