FLYi, parent of Independence Air, said it completed its financial restructuring, which it said will provide the company with "greater financial flexibility to execute its low-fare business plan." FLYi has struggled financially since deciding to end its codesharing relationships with United Airlines and Delta Air Lines last year in favor of launching its own low-fare operation. "Today's announcement represents an important step forward in building a much stronger future for Independence Air," Chairman and CEO Kerry Skeen said.
US Dept. of Transportation proposed to select Continental Airlines and American Airlines as new entrants in the US-China market and to award new weekly cargo flights to four carriers already serving the market. DOT proposed to award Continental seven weekly passenger flights for rights that become available March 25. Continental plans to serve the Beijing-Newark route. The department also proposed to award seven weekly passenger flights to American for services in the Chicago-Shanghai market effective March 25.
Former Boeing CFO Mike Sears was sentenced to four months in prison and fined $250,000 for his role in Boeing's controversial $21 billion proposal to lease 767 tanker aircraft to the US military. Sears was fired in Nov. 2003 for violating company policies by communicating about future employment for Darleen Druyun at Boeing while she was involved in the tanker deal at the US Air Force and subsequently trying to conceal their misconduct. Druyun, who also was fired after the scandal, pleaded guilty to one count of conspiracy in April 2004 ( ATWOnline, April 21).
US Airways reached agreement with Eastshore Aviation, an investment entity owned by Air Wisconsin Airlines Corp. and shareholders, on a $125 million financing commitment to provide a "substantial portion" of the equity funding for US Airways' plan of reorganization. "This agreement with Eastshore Aviation provides the cornerstone from which we can obtain additional financing and construct a plan of reorganization. While we have more work to do, this is another positive signal to the marketplace," President and CEO Bruce Lakefield said.
Pinnacle Airlines Corp. reported net income of $10.3 million for the fourth quarter ended Dec. 31, up 5.3% over net income of $9.8 million in the prior-year period. The company said fourth-quarter results were impacted negatively by severe weather, particularly in the final week of Dec. Total operating revenues for the period rose 42.7% to $181.3 million while operating expenses climbed 49.5% to $163.8 million, producing an operating income of $17.5 million, down 0.2% from operating income of $17.6 million in the year-ago period.
Iberia and Mexicana have broadened their codeshare agreement. As of Feb. 26, Iberia will place its code on Mexicana's flights from Mexico City to Oaxaca and Merida while Mexicana will begin codesharing on Iberia's flights between Madrid and both Malaga and Santiago de Compostela.
Alitalia was forced to cancel 176 flights Monday after its flight attendants staged a one-day strike, according to media reports. The strike was organized by Sult, one of the unions currently in negotiations with the airline.
AirAsia said it will buy an additional 20 A320s, raising its previously announced commitment to 100. The latest aircraft are earmarked to handle expansion of Thai AirAsia to China. According to AirAsia CEO Tony Fernandes, the airline has secured regulatory approval from China's regulatory authorities to serve five destinations, including Chengdu, Kunming and Xiamen from Bangkok from May. Fernandes told media in Kuala Lumpor that AirAsia also is looking at flying from Kota Kinabalu to southern China.-- Geoffrey Thomas
CSA Czech Airlines, the fastest-growing carrier among the new EU member states, plans to continue to add at least 2-3 new destinations to its network every year. "In 2004 we added 10 new destinations, especially owing to the fall of aeropolitical barriers after the Czech Republic and other countries joined the EU," VP-Financial Petr Juza told ATWOnline. CSA also is evaluating modifying its current long-haul operations, "and we will try Tokyo during the next months," Juza added.
Hawaiian Airlines' 376 mechanics and related workers, represented by the International Assn. of Machinists, ratified a new three-year contract. Four of the carrier's six unions now have ratified agreements. Last week, members of the Assn. of Flight Attendants rejected a tentative agreement with the bankrupt carrier. In addition, Hawaiian continues to negotiate with the Air Line Pilots Assn.
Air Dolomiti, 100% owned by Lufthansa, will add four former Aer Lingus BAe 146-300s to its fleet by May and phase out its five CRJs. It will introduce the higher capacity on routes from northern Italy to Munich.
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.
