Skyways Aviation arranged the sale of three F50s by Luxair to Largus Aviation of Sweden. The aircraft will be placed with Amapola, an F50 freight carrier operating for the Swedish post office, but will be leased by Skyways until they are required.
United Airlines parent UAL Corp said the US Bankruptcy Court approved amendments to its debtor-in-possession financing facility that provide "a significant reduction" in the interest it must pay under the loan. The agreement with DIP lenders JPMorgan Chase, Citigroup, CIT and GE Capital also extends the maturity date of the loan to Sept. 30 from June 30, waives the Jan. 2005 EBITDAR covenant and adjusts the minimum monthly EBITDAR targets for UAL going forward.
In an agreement that apparently stops short of a full merger, DBA is to take over the aircraft and routes of Germania Express under financial terms that were not disclosed (ATWOnline, Feb. 18). Beginning March 28, DBA will wet-lease 12 F100s from Gexx and begin flying that carrier's 15 routes, boosting its operational fleet to 27 aircraft. Including the former Gexx routes, DBA will offer a total of 15 domestic and 17 international routes. New destinations will be Athens, Salonika, Florence, Rome, Stockholm, Tiflis and Moscow. Daily flights will grow from 125 to 180.
Finnair named Antero Lahtinen MD-Finnair Cargo Oy, responsible for Finnair Cargo. He takes up his new post on May 1 and also will become a senior VP on the Finnair Group Board of Management.
World Airways parent World Air Holdings said it earned $8.1 million in the fourth quarter ended Dec. 31 and $25.6 million for the full year, up from $0.9 million and $15.3 million respectively in the equivalent 2003 periods. Fourth-quarter operating revenues rose 6.4% to $130.1 million while operating profit climbed 20% to $8.1 million. Full-year revenues were ahead 6.1% to $503.9 million and operating income jumped 41.7% to $40.3 million. "Our strong quarterly results closed an outstanding year," stated President and CEO Randy Martinez.
Denmark's Sterling Airlines had a pre-tax loss of DKK199.3 million ($35 million) in 2004, including a deficit of DKK69.8 million in the fourth quarter. It noted that passenger numbers rose 36.4% to 1,825,206 while earned revenues totaled DKK1.61 billion. MD Harald Andresen attributed the red ink to a number of factors: "Competition is very tough at the moment, and there is a great deal of overcapacity...which is forcing the prices of our product right down.
Qatar Airways is increasing the number of daily flights between Bahrain and Doha to five starting Feb. 22. The fifth flight was needed to accommodate the increased traffic generated by Qatar's recent launch of service to London Gatwick, Seychelles, Johannesburg, Cape Town and Yangoon.
Evergreen Aviation Technologies Corp., a Taiwan-based joint venture between EVA Airways and GE, will carry out the conversion of three 747-400 passenger jets into 747 Large Cargo Freighters that will be used to transport major assemblies for the 787, Boeing said. Modification of the first will begin about mid-year with certification expected during 2006. Separately, Boeing said it selected Gamesa Aeronautica of Vitoria, Spain, as a partner in designing the structure of the 747LCF.
Aloha Airlines said its 30 dispatchers and schedulers, represented by the Transport Workers Union, ratified a new 52-month contract through April 30, 2009. However, the 250 mechanics and inspectors represented by IAM voted down a tentative agreement.
American Airlines will add a second nonstop flight between Dallas/Ft. Worth and Sao Paulo June 9. The new flight will be operated five days a week during peak season and thrice-weekly between Sept. 7 and Nov. 22. The route will be served with a 767-300.
Last year, ATW introduced a new award to recognize airlines achieving a commercial rebirth through a life-changing transformation. The first recipient, Aer Lingus, successfully implemented a low-cost business model, demonstrating that a traditional flag carrier can "change its spots." This year's winner, Air New Zealand, likewise survived a near-death experience in 2001 to remake itself into a profitable and innovative competitor across different markets.
Don't look now, but US legacy airlines are in better shape to challenge their low-cost rivals than at any time since the start of the millennium. Sure, that sounds farfetched. After all, in many respects the US legacy carriers entered 2005 in much the same way that they entered 2004: Awash in a sea of red ink, facing continued yield erosion and with a cost structure that is not sustainable in today's market. Without the bank of GE, half of them probably would be in liquidation by now.
Jazz brings together a variety of sounds, blending them into a rhythmic pattern of music, merging a wide range of chords and instruments into what could be called a harmonic convergence. The same thing could be said about Air Canada Jazz, a Regional carrier that over the past four years consolidated four airlines with disparate fleets, thousands of employees, separate languages and distinct corporate cultures to create a single product.
For Christian Heinzmann, these are uneasy times. “The most difficult year Luxair has ever experienced� was 2003, the CEO of Luxembourg’s national carrier told ATW recently, and although he expected the parent company to show a positive operating result for 2004, with the airline breaking even, he recognizes that much remains to be accomplished.
Saying that the airline industry's fortunes will improve somewhat in 2005 is overly optimistic for some carriers while being a bit too dark for others. Yet, on average that's what the year will bring...unless.
Dynamic packaging, a hot topic in the US for a couple of years, has been slow to take off in Europe but is widely anticipated to become a force. For the package tour and charter airline segment, already struggling to come to grips with changes wrought by the advent of low-cost carriers, that looms more as a threat than a promise (ATW, 11/02, p. 30).
As at every other airport in the US, business bottomed out at San Francisco International immediately following 9/11. While many airports struggled back to their feet as passengers returned, it's been an uphill climb for SFO. Rather than wait for nature to take its course, managers launched an aggressive, innovative marketing campaign to increase business and draw new carriers to the beleaguered facility.
The factors that contributed to a buoyant market for air cargo last year should continue in 2005, with solid traffic (FTK) growth propelled by trade from Asia, particularly the booming China market, which had exports valued at $851 billion in 2003. Through the first 10 months of 2004, IATA airlines reported that international FTKs rose 14%, with double-digit increases recorded across all regions.
Five years ago, the airline industry was buzzing with claims of 20% savings on aircraft purchasing by shrinking the multitude of options offered to and demanded by airlines when ordering aircraft. Today, with acquisition costs and airline yields moving in opposite directions, the need for standardization and simplification is more pressing than ever. Yet progress remains slow, and what has been achieved is being driven more by manufacturers eager to pare costs and complexity out of the production process than by airlines intent on cutting sticker prices.
The universe of profitable US airlines shrank further during the third quarter ended Sept. 30 as fuel prices climbed throughout the summer while back-to-back-to-back-to-back hurricanes pummeled those carriers with extensive route networks in Florida and the Caribbean. Yields in the hypercompetitive domestic market continued to erode, although a rise in load factor offset about half the decline.
The stronger-than-expected traffic recovery this year in conjunction with the emergence of a thriving low-fare sector in many parts of the globe has contributed to a healthy restoration of demand for new and used transport aircraft, leading to a reduction in the overall number of stored jets and driving up lease rates for the more popular types, experts say.
Managerial grit that sometimes borders on cockiness seems to keep El Al Israel Airlines aloft against all commercial odds as perhaps the ultimate ethnic niche carrier. Maybe it's a mindset composed of equal portions of self-reliance and chutzpah (a Yiddish expression loosely translated as utter nerve or supreme self-confidence) that somehow translates into viability for the small airline with the outsized reputation.
Three years of airline industry turmoil and restructuring have left their mark on the maintenance, repair and overhaul aftermarket, where suppliers are scrambling to stay abreast of the changing needs of their airline customers while coping with tough competition and excess hangar capacity, itself a result of some of those changes.
In early October, the price of oil topped $52 a barrel, representing a 60% increase over the year-ago period. According to the Air Transport Assn., every $1 increase in the price of a barrel adds $425 million in annual operating expenses for US airlines. That means they are spending an extra $9.93 billion on Jet A this year compared to 2003.
As turnaround stories go, Air New Zealand's is about as good as it gets. In just over 2-1/2 years under MD and CEO Ralph Norris, the company has come from the nightmare of writing off NZ$1.45 billion-the largest writeoff in New Zealand corporate history-to posting combined annual profits of NZ$331 million over its last two fiscal years.
