Today's near-record energy prices will overwhelm a "gradually improving" airline revenue picture and create a liquidity challenge for some struggling US airlines, according to JP Morgan analyst Jamie Baker. In a report released Friday, Baker forecast that oil will remain at or above the $50-per-barrel mark for the rest of 2005 and fall only a few dollars to $47 per barrel in 2006. With most airlines lacking hedges, the result will be a significant cash drain and an approaching "liquidity crunch time" for America West, Continental Airlines and Delta Air Lines.
Lufthansa Technical Training, a Lufthansa Technics subsidiary, opened a new EASA-approved training center in Manila. Courses range from basic maintenance up to advanced type-rated training and can be held either at the fully equipped facility or at any customer-requested location. Separately, LTT signed up SkyLink Airways for its blended training concept.
United Airlines' motion to extend until May 31 the interim 11.5% pay reduction for all of its customer-contact employees, represented by the International Assn. of Machinists, was approved by the US Bankruptcy Court yesterday, the company announced. The interim reductions, which originally were approved in January, were scheduled to run through April 11. The court's decision also suspended May 1 pay increases contemplated in the IAM collective bargaining agreement.
SAS Group flew 2.81 billion RPKs in March, up 4.5% over the year-ago period. Capacity increased 1.8% to 4.39 billion ASKs and load factor rose 1.7 points to 64%. For the three months ended March 31, RPKs were ahead 4.4% to 7.34 billion, ASKs jumped 5.2% to 12.47 billion and load factor declined 0.4 point to 58.9%.
Air France-KLM Group flew 14.95 billion RPKs in March, up 6.2% over the year-ago period. Capacity climbed 3.9% to 18.67 billion ASKs and load factor rose 1.7 points to 80.1%. AF reported a 2.4-point gain in load factor to 78.7% with traffic increasing 6% on a 2.7% rise in capacity, while KLM traffic grew 6.4% on a 6.1% capacity hike for a 0.3-point increase in load factor to 82.7%. For the fiscal year to date, consolidating AF over 12 months and KLM over 11 months, RPKs increased 8.9% to 169 billion, ASKs climbed 6.9% to 214.61 billion and load factor improved 1.5 points to 78.7%.
Standard Aero earned Transport Canada approval to repair and overhaul all models of CF34-8 engines, which power CRJ700/900s and Embraer 170s. The company said the authorization is recognized by FAA and other regulatory authorities.
Alteon Training announced that an A320-300 full flight simulator at its Miami Training Center and a 737-300/-400/-500 full flight simulator with a Flight Dynamics Head-up Display at its Atlanta Training Center have received FAA Level C certification.
Lufthansa Systems' e-ticketing solution was selected by Austrian Airlines. Separately, Austrian said it reduced the capital of its Lauda Air subsidiary from €24.7 million ($31.9 million) to €100,000 to reflect integration of Lauda's technical division and flight operations into the group. As a result, Lauda acts more or less as a marketing company for leisure flights.
Singapore and Bahrain have inked an open skies agreement. The pact was signed in Singapore yesterday by Bahrain Minister of Transportation Shaik Ali Bin Khalifa Al Khalifa and Singapore Minister for Transport Yeo Cheow Tong.
Ryanair carried 2.6 million passengers in March, up 20.1% over the year-ago period. Load factor climbed 2 points to 80%. For the rolling 12 months ended March 31, the airline carried 27.6 million and load factor was 84%.
The European Regions Airline Assn. lodged a complaint with the European Commission Ombudsman charging the EC with releasing inaccurate and misleading information to airline passengers and the media regarding the new passenger rights legislation that took effect last month. ERA contends that posters, leaflets, videos, media and website materials issued by the Commission provide erroneous information regarding compensation for those whose flights are delayed or cancelled and that the information is harmful to airlines.
Evans & Sutherland Computer Corp. was awarded a subcontract by CAE to provide two EP-1000CT/ESCP-2000 visual systems, including options for its new LaserWide projector, that will be installed on A330/A340 full-flight simulators being manufactured by CAE for Airbus.
Northwest Airlines flew 6.85 billion RPMs in March, up 8.6% over the year-ago period. Capacity climbed 4.7% to 8.1 billion ASMs and load factor jumped 3 points to 84.6%. For the three months ended March 31, RPMs were ahead 8.8% to 18.17 billion, ASMs increased 4.3% to 22.77 billion and load factor gained 3.3 points to 79.8%.
United Airlines yesterday announced that it will close its Seattle call center on June 4 in a move that will eliminate 400 jobs. According to the carrier, the Seattle facility is one of its most costly and has a long-term lease, but bankruptcy gives the company an opportunity to reject the lease without penalty. United also cited record high fuel prices, increasing competition and low yields as reasons behind the closure.
European Commission has sought EU Council approval to start negotiations on a cooperation agreement with Argentina on the development of a Civil Global Navigation Satellite system. "This proposal for a new international cooperation agreement clearly underlines the success of Galileo [Europe's satellite navigation program] and demonstrates again the widespread interest in the project," said EC VP in charge of transport Jacques Barrot.
SR Technics will provide component and line maintenance support to Swedish discount airline FlyMe under a five-year component management contract covering four 737-400s. The agreement includes guaranteed component availability and AOG support.
Southwest Airlines flew 5.24 billion RPMs in March, up 12% over the year-ago period. Capacity climbed 11.9% to 7.11 billion ASMs and load factor gained 0.1 point to 73.7%. For the three months ended March 31, RPMs increased 12.3% to 12.24 billion. ASMs rose 10.1% to 20.23 billion and load factor improved 1.2 points to 65.4%.
ARINC and Telenor yesterday unveiled AeroMobile, a service they said will enable passengers to use their cellular phones in flight. The companies said they are working closely with several potential airline customers and are readying demonstration flights planned for mid-2005.
Lufthansa Systems said its operating result for 2004 increased 56.4% over 2003 to €61 million on a 3% rise in revenues to €628 million. The share of business generated by customers outside LH Group increased 9.8% to €224.2 million or almost 36% of revenues.
Alpine Air Express and its subsidiary Alpine Aviation said they have terminated all discussions with Capitalliance Financial Services regarding a possible merger or acquisition. "Although Alpine seriously considered working with Capitalliance on business opportunities, the Alpine board finally decided that independently seeking other opportunities was more prudent for the company and its shareholders," Alpine Air Express Chairman and CEO Gene Mallette said.
American Airlines flew 12.07 billion RPMs in March, up 9.1% over the year-ago period. Capacity climbed 2.1% to 15.04 billion ASMs and load factor gained 5.1 points to 80.2%. For the three months ended March 31, RPMs increased 6.7% to 32.25 billion, ASMs rose 0.6% to 42.75 billion and load factor jumped 4.4 points to 75.4%.
Lufthansa Technik was selected by Gulf Air to provide Total Component Support under a five-year deal valued at around €100 million ($128.5 million), as expected ( ATWOnline, April 4). Under terms of the deal, LHT will overhaul and manage more than 1,400 different components on four fleets. Separately, Austrian Airlines Group became the first customer for the latest version of LHT's Guideline photoluminescent emergency floorpath marking system. The system will be retrofitted on 15 F100s in the Austrian arrows fleet this year.
Aided by a decline in weather-related delays, US airlines posted a better ontime arrival rate in February compared to January 2005 and February 2004, the Dept. of Transportation reported yesterday. According to DOT statistics, the 19 US airlines reporting ontime performance recorded an overall ontime arrival rate of 77.6% in February, up slightly over February 2004's 77.5% and well above January 2005's 71.4%. Of the flight delays in February 2005, 5.3% were caused by weather, down sharply from February 2004 and January 2005 when 6.1% of flights were delayed by weather.
