IATA warned that the return on the cost of capital is a major impediment to industry growth despite some headline-grabbing profits posted by a handful of carriers. Speaking at the Centre for Asia Pacific Airlines Outlook 2007 summit in Singapore, IATA Chief Economist Brian Pearce said the industry's overall performance between 2001 and 2004 was an abysmal 3.3% compared to a benchmark of 7.2%. Asian airlines fared better with a 4.6% return, with US carriers at 2.5%. Not surprisingly, LCCs reported a strong 6.8% average.
The Sydney-based Centre for Asia Pacific Aviation urged Asian governments to speed liberalization of bilateral restrictions hindering air transport in the region. Speaking at Outlook 2007, CAPA's third annual regional airline summit in Singapore, Executive Chairman Peter Harbison told delegates that low-cost carriers represent only 5% of the market in the region, which has a population of roughly 3.5 billion, whereas 60 LCCs serve a population of 375 million in Europe and account for 20% of traffic.
Satyam Computer Services of India signed a seven-year deal with Qantas covering development and maintenance for more than 150 applications across various technologies.
Southwest Airlines will establish both pilot and flight attendant bases in Las Vegas by October 2007. The 17,000-sq.-ft. facilities will be located near McCarran Airport's C Concourse and initially will accommodate 350 pilots and 600 cabin staff. When fully staffed, SWA will employ 600 pilots, 1,000 flight attendants and 2,500 total staff at the airport. It operates 225 daily flights out of LAS to 53 cities. Separately, Southwest will launch Detroit Metro-Orlando International service and add a Denver-MCO service on Dec. 20.
SAS Ground Services will provide handling for Air China at London Heathrow. SAS will take care of passenger services and load control and has subcontracted Aviance to provide ramp handling. Air China operates six weekly 747 flights from Beijing to LHR.
Assn. of European Airlines said the punctuality of European carriers fell during the third quarter owing to the Aug. 10 terrorist scare and subsequent security measures. On long-haul services, just 62.3% of flights departed within 15 min. of schedule, a drop from 69% in the year-ago period. Short/medium-haul flights departed on time at a 77% rate, a decline from 79.9% last year. Baggage irregularities were measured at 18.9 missing bags per 1,000 passengers, up from 15.6 in the 2005 quarter.
Northwest Airlines intends to recall approximately 150 furloughed pilots by July 2007, according to the Air Line Pilots Assn., which issued a clarification in response to several press reports indicating the carrier was recalling "hundreds" of pilots. "The recall pace is expected to be steady throughout 2007 although the staffing situation is extremely fluid," ALPA said. Separately, NWA flew 6.49 billion RPMs in October, a 0.2% rise over the year-ago month. Capacity fell 0.7% to 7.83 billion ASMs and load factor was up 0.7 point to 82.8%.
Qantas informed investors yesterday that 46.08% of the carrier is now owned by foreign investors following "recent" sales, an increase of 1.18 points since May 10. The ceiling is 49%.
Boeing began using a moving assembly line--moving at 1.6 in. per min.--during final assembly of the 777. The company said it plans to complete a continuous, one-bay moving 777 assembly line that will include systems installation, final body join and final assembly in 2008. Separately, Boeing announced the delivery of the first of four 777-200ERs to Thai Airways, which will take an additional two next year.
AAR signed a three-year agreement to manage supply chain service for Chautauqua Airlines. AAR will provide asset planning and repairs and maintain rotable parts to support 24 CRJ200s joining the fleet from January for Chautauqua's new service agreement with Continental Airlines. AAR also will perform heavy MRO and interior modifications on up to 15 Northwest Airlines 757s. Work begins this month in Indianapolis and will continue through July 2007.
Cameroon Airlines will migrate its legacy communications system to SITA's Internet Protocol Virtual Private Network service. The five-year, $4.3 million contract is part of the carrier's effort to increase operational efficiencies as it prepares for privatization next year.
Delta Air Lines flew 9.56 billion system RPMs in October, a 1.7% increase over the year-ago month. Capacity fell 4.5% to 12.4 billion ASMs, lifting load factor 4.7 points to an October record 77.1%. Domestic traffic dropped 5.5% to 6.72 billion RPMs against a 14.1% decline in capacity to 8.57 billion ASMs, sending load factor up 7.1 points to 78.4%. International RPMs grew 24% to 2.84 billion, ASMs increased 27.2% to 3.83 billion and load factor dipped 1.9 points to 74.2%.
Airbus announced a 12-year agreement with Skybus Airlines of Ohio for a Total Support Package covering the 65 A319s that the startup LCC purchased last month ( ATWOnline, Oct. 27). Airbus said the deal "is the most comprehensive selection ever of Airbus fleet maintenance solutions built on the Air+ by Airbus services." The manufacturer selected MRO network partner Singapore Technologies Aerospace and Messier Bugatti to provide the support. Skybus expects to launch service next spring.
Continental Airlines estimated a 4.5%-5.5% year-over-year rise in October consolidated RASM and a 5%-6% increase in mainline RASM and said September consolidated and mainline RASM each gained 4.8% over the year-ago month. CO flew 7.26 billion consolidated RPMs in October, up 9.5% over October 2005, against a 6.8% rise in ASMs to 9.16 billion. Load factor rose 2 points to 79.3%. Domestic traffic climbed 8% to 3.58 billion RPMs, capacity increased 4.4% to 4.32 billion ASMs and load factor was up 2.9 points to 83.1%.
Lufthansa Technik signed a six-year deal with Air Europa covering MRO on landing gear for at least 28 737NGs. Work will be performed in Hamburg while spare shipsets provided by LHT will be installed by the carrier and its Globalia Mantenimiento Aeronautico subsidiary in Palma de Mallorca.
Ryanair flew 3.7 million passengers in October, a 23.4% rise over the year-ago month. Load factor fell 2 points to 83%. JetBlue Airways flew 1,86 billion RPMs in October, a 16.3% increase over the year-ago month. Capacity climbed 15.7% to 2.36 billion ASMs and load factor rose 0.4 point to 78.8%. Royal Jordanian transported 145,000 passengers in October, a 19% increase over the year-ago month. It operated 2,077 flights during the month compared to 1,570 in October 2005.
Copa Holdings, parent of Copa Airlines and AeroRepublica, announced last week that it secured a $240 million loan from DVB Bank, Natexis Transport Finance and NORD/LB to finance the acquisition of 10 Embraer 190s due for delivery through next year.
Third annual FAA International Aviation Safety Forum took place last week in Washington and some 500 aviation professionals from 50 countries shared their concerns about the challenges in maintaining safety standards in increasingly crowded skies. "Right now, the commercial fatal accident rate in the US is about two fatal accidents for every 10 million takeoffs," FAA Administrator Marion Blakey said.
Federation of Indian Airlines is the name of the new industry body created by scheduled passenger carriers in India, according to press reports. Initial members are Air Deccan, Air India, Air Sahara, GoAir, Indian Airlines, IndiGo, Jet Airways, Kingfisher Airlines, Paramount Airways and SpiceJet. The group will cooperate in areas such as human resources, maintenance and ground handling, as well as lobbying issues.
Air France Industries and KLM Engineering & Maintenance are looking into uniting under one brand, KLM E&M VP-Marketing, Sales & Customer Services Rob Pruim told ATWOnline at MRO Europe in Amsterdam. "We haven't taken any decision," he stressed, "but we have appointed consultants to see what the possibilities are.
ATR is opening a new office in Sydney to serve customers in Australia, New Zealand and the South Pacific islands. Since January 2005 it has booked orders for 86 turboprops from Asia/Pacific carriers.
Turkish Technic, a wholly owned subsidiary of Turkish Airlines founded last May as a profit center, is moving ahead with a new heavy maintenance facility, dubbed HABOM, at Sabiha Gokcen International Airport in Istanbul.
Bulgaria Air will be sold to Balkan Hemus Group, the Bulgarian government announced Thursday. Hemus, which outbid Air One for the flag carrier ( ATWOnline, Oct. 19), will buy a 99.99% stake. It plans to invest €62 million ($79.1 million) over the next two years and €82.1 million in the next five, launching service to 36 new destinations.
Saab Aerotech will provide Romania's Carpatair with spares support for Saab 340 and Saab 2000 aircraft under a five-year contract valued at $20 million. Carpatair operates a fleet of 14 Saab aircraft and two F100s. Separately, Saab Aerotech expanded its existing component services agreement covering Air Baltic's F50s to a complete component support agreement with a value of SEK70 million ($9.6 million).
