SITA INC said it was selected by the Civil Aviation Bureau of Japan to be the sole provider of airline service via Multifunctional Transport Satellite. SITA said the selection will further strengthen its Satellite Aircom service, which uses Inmarsat satellites.
But for the grace of US taxpayers, patient bankruptcy judges and the deep pockets of GE Capital Corp., the long-awaited consolidation of the US airline industry might have begun in earnest last year as companies such as United Airlines, US Airways Group and Delta Air Lines simply ran out of financial options. Together, the three accounted for $7.5 billion of the $9.2 billion in aggregate losses suffered by US Major passenger airlines in 2004. Delta by itself accounted for nearly 60% of the industry's annual loss and a bit more than half of the fourth-quarter loss.
ACI-NA announced that David Plavin will leave his post as president at year end. Airbus North America welcomed Bill Bozin as VP-safety & technical affairs succeeding John Lauber, who becomes Airbus chief safety officer in Toulouse. Air France appointed Catherine Guillouard VP-finance. Alaska Airlines tapped Megan Lawrence as dir.-government affairs. American Airlines promoted Oliver Martins to VP-engineering, quality assurance & planning.
Ready or not, the A380 is coming in 2006. "Airports will be ready," Dick Marchi, senior VP at ACI-NA, tells AE&T. "Most will be fine." The double-decker A380, which was rolled out in January, will carry up to 555 passengers more than 9,000 nm, while the freighter version will be able to haul up to 150 tonnes for more than 5,600 nm.
SkyEurope intends to add four 737-500s this summer, bringing its fleet of the twinjets to 11. It also operates six Brasilia turboprops. The additional aircraft will support an increase in frequencies as well as the launch of 10 new routes: Athens from/to Bratislava and Budapest, Barcelona from/to Budapest and Krakow, Copenhagen from/to Bratislava and Budapest, Manchester from/to Bratislava and Krakow, and Nice from/to Bratislava and Budapest.
Iberia, which late last week placed an order for up to 79 Airbus aircraft ( ATWOnline, Feb. 28), posted a consolidated profit after tax and minority interests of eur218.4 million ($289.4 million) for 2004, a 53% increase over net income of eur34.9 million in the previous year and the second-best profit ever recorded by the company. For the fourth quarter ended Dec. 31, consolidated net profit rose 53.1% on the year-ago period from eur34.9 million to eur53.4 million.
UPS announced late Friday that it plans to add an $82.5 million, 700,000-sq.-ft. heavy freight facility to its existing Louisville Cargo operations. The move came just one day after the company announced it was closing its freight-sorting hub at Dayton ( ATWOnline, Feb. 25). UPS said several states were considered as bases for the facility but the decision of the Kentucky Economic Development Finance Authority to extend it tax incentives helped seal the deal. The new complex is expected to bring 720 jobs to Louisville.
Aloha Airlines has decided to eliminate service to the Central and South Pacific and will suspend operations to Burbank and Vancouver following a route analysis. It also has decided to return two 737-300s, but through improved utilization and optimized scheduling it still intends to expand its operations to California.
It is back to the future for Singapore Airlines and Malaysia Airlines, who signed codeshare agreements to compete with the new LCCs operating out of Kuala Lumpur and Singapore. Under the deal, SIA and its regional subsidiary SilkAir will codeshare on a variety of Malaysia Airlines routes starting March 27. SIA and MAS split in 1972 and relations have been cool for decades, but the impending Asean Free Skies starts in 2008. Both airlines have taken the strategic decision to build market presence and cut out wasteful duplication to combat LCCs.
US Airways yesterday said its $125 million financing agreement with Eastshore Aviation ( ATWOnline, Feb. 23), an investment entity owned by Air Wisconsin Airlines Corp. and its shareholders, was approved by the US Bankruptcy Court. The facility is structured as debtor-in-possession financing and $75 million will be available immediately. The remaining funds will be drawn in $25 million increments later. Upon emergence from Chapter 11, the loan will be converted to equity in the reorganized US Airways.
Continental Airlines yesterday announced that it reached tentative agreements on new contracts with its last unsigned work groups, its pilots, flight attendants, and mechanics and dispatchers. Terms of the deals were not released but the carrier has said it needs $500 million in savings, more than $300 million of which has to come from those groups. The agreements are subject to union leadership approvals and ratification by union membership, with votes expected by the end of March.
Virgin Blue's independent directors flatly rejected as "neither fair nor reasonable" a A$1.1 billion ($871.6 million) buyout bid by major shareholder Patrick Corp., intensifying pressure on the multimodal transport group to raise its offer price.
Valuair, a Singapore-based low-cost carrier, is planning to launch flights to Australia's east coast cities by December. The airline already operates A320s from Singapore to Perth and the success of that operation is prompting expansion plans. Insiders suggest Valuair will lease A330s or A340s to launch the flights. It operates to Hong Kong, Bangkok and Jakarta and plans to start flights to Chengdu and Xiamen in China, Japan and Korea.
Indonesia's Lion Air is in the market for 40 737-900s or A320s/A321s, according to insiders. ATWOnline understands that an MOU has been signed with Boeing, although Airbus is making a counteroffer.
Independence Air parent FLYi reported an $86 million net loss for the fourth quarter ended Dec. 31, which included costs related to the sale of four CRJs, the writeoff of goodwill remaining from the original formation of the company and costs related to a recently completed financial restructuring ( ATWOnline, Feb. 23).
US Federal Court judge gave the go-ahead for United Airlines employees to move forward with a class-action lawsuit against the carrier's employee stock ownership plan and its trustees. The suit alleges that those charged with protecting the interests of the employee-owners failed in their duties, costing them "billions of dollars." It claims that the UAL ESOP committee and the plan trustee, State Street Bank, were aware that UAL's stock was unstable and State Street Bank even had placed it on a watch list owing to its volatility.
ATA Airlines will increase its operations to Hawaii significantly in April and June. From Lihue, the carrier will launch three new weekly flights to Los Angeles June 12 and one weekly flight to San Francisco June 11, and from Kona it will commence two weekly flights to Los Angeles on June 12. It also will increase nonstop flights from both Honolulu and Maui to Phoenix from two to six weekly on April 3 and to daily on June 7. In addition, it will begin daily nonstop service from Las Vegas to Honolulu April 3.
Air Canada, as expected, will shift mainline flights to six Canadian cities in May and to three more cities in October to Regional affiliate Air Canada Jazz under a domestic schedule realignment. The moves could affect up to 330 jobs at AC, a spokesperson said, but the workers will be offered several employment options. Beginning May 3, AC Jazz will be the exclusive provider of AC service to Charlottetown, Fredericton, St. John, Moncton, Quebec City and Thunder Bay. It will take over flights to Regina, Saskatoon and Whitehorse on Oct. 1.
SkyEurope said that a disagreement with Warsaw Airport will cause it to divert new aircraft originally intended to be based there to Krakow instead. The Slovakian low-cost carrier is adding four aircraft to its fleet this summer, which will enable it to double its capacity at Krakow, increase frequencies on existing routes and open new routes to Barcelona and Manchester. SkyEurope officials claimed that Warsaw cannot guarantee overnight parking for aircraft and intends to raise passenger charges by 23% to pay for a new terminal.
Iberia late Friday announced orders and options for up 79 Airbus narrowbodies worth more than $4.5 billion at list prices, although it said it obtained "important discounts." The largest order in the carrier's history, it encompasses 30 firm aircraft--15 A318s, nine A320s and six A321s--and 49 options. Deliveries of the firm aircraft will be in 2006-11. They will replace 19 MD-87s, 13 MD-88s, seven 757s and the oldest A320s. Engine selection was not announced.
UAL Corp., parent of United Airlines, reported a $326 million net loss for January in its Monthly Operating Report filed with the US Bankruptcy Court. The loss included $138 million in reorganization expenses. In the year-ago period, United reported a net loss of $252 million, which included $26 million in reorganization expenses primarily consisting of noncash items resulting from the rejection of aircraft. Operating loss for January totaled $151 million, down from an operating loss for the same month in 2004 of $191 million.
Inflight breakup of a China Airlines 747-200 on May 25, 2002, with the loss of all 225 persons onboard was "highly likely" the result of "the structural failure in the aft lower lobe section of the fuselage," Taiwan's Aviation Safety Council determined in a report on the accident released Friday. ASC said it found a 15.1-in. fatigue crack in the area, which in turn probably had its origins in an improper repair following a 1980 tail strike incident in Hong Kong.
Hawaiian Airlines and its pilots, represented by the Air Line Pilots Assn., reached agreement on a new three-year contract. Terms of the deal were not released. The agreement will be sent to union members for a ratification vote. Hawaiian, which already has new deals in place with four of its six unions, said it will be able to exit bankruptcy if the new agreement and a recently negotiated accord with its flight attendants are ratified. Separately, the carrier reported net income of $588,000 for January, an 82% reduction compared to net income of $3.3 million in January 2004.
USA3000 Airlines will begin two weekly nonstop flights from Washington Dulles to Ft. Myers May 2, three weekly nonstop flights from Baltimore-Washington International Airport to Ft. Lauderdale May 2 and six weekly nonstop flights between Orlando and Chicago O'Hare May 3.
Malaysia Airlines, hot on the heels of the Ryanair order (see above), is expected to order up to 60 737-800s with the first to be delivered later this year. Insiders told ATWOnline that the purchase should be announced shortly. If confirmed, it would be a stunning reversal for Airbus, which had been tipped to pick up the order.
