On the heels of a HK$8.56 billion ($1.1 billion) 2008 loss that represented its first full-year deficit in a decade, Cathay Pacific Airways said Friday that it will confront a "toxic combination" of challenges with measures including an 8% capacity cut beginning next month and unpaid leave for employees.
Aerospace and Defence Industries Assn. of Europe supported calls from Airbus and ATR for both EU and national authorities "to provide financial support to the industry's customers, in particular through the implementation of funding schemes aimed at facilitating airlines' access to liquidity for the purchasing of new aircraft."
Southwest Airlines Chairman and CEO Gary Kelly last week strongly rejected Wall Street advice that the LCC begin charging for checked baggage to generate more revenue. During a conference call to discuss SWA's third consecutive quarterly loss, multiple analysts pushed Kelly to follow other US carriers and implement baggage fees. But he insisted the move would drive away customers. "The bottom line assessment is we believe we're having a meaningful impact [telling consumers] that we are alone in not charging bag fees and that [impression] is increasing our demand," Kelly explained.
SIA Engineering extended the coverage of a three-year Fleet Management and Support Services contract with Gulf Air. Initial deal covered 14 A320s, six A330s and nine A340s and was valued at $100 million. Subsequently, the contract was extended to cover an additional four A330s, one A320 and increased scope of services, bringing the total value of to $135 million.
Airbus said it "achieved a significant maintenance cost improvement due to the optimization of scheduled maintenance program intervals" for the A330/A340 family. The A check interval has been extended from 600 to 800 flight hr. and the heavy maintenance check from 10 years to 12. The company said that as a result, operators typically will need to perform five A checks per year rather than seven based on "typical utilization" of 4,400 flight hr. per year.
Shenzhen Airlines reported a first-quarter net profit of CNY160 million owing to a strong rebound in the domestic market; the year-ago result was not available and the carrier did not disclose its first-quarter revenue, expenses, passenger or cargo traffic. Owing to double-digit growth in the domestic market, Chinese carriers posted a collective net profit for the quarter of CNY1.78 billion, according to CAAC.
American Airlines said its first of its 42 787-9s, originally scheduled to arrive in 2012, now likely will be delivered in the second half of 2013 owing to last year's Boeing machinists strike. In a filing with the US Securities and Exchange Commission, AA said the new schedule was "based on preliminary information received from Boeing." It also holds 58 787 options.
Nice Cote d'Azur Airport and Air France, in partnership with Amadeus and IER, are trialing a new "Pass and Fly" boarding device through Oct. 30 on the Nice-Paris Orly route. It is being offered to members of NCE's Club Airport Premier program and AF's loyalty program.
Malev Hungarian Airlines last week named Martin Gauss, who has been working with the carrier as a consultant, as its new CEO. Geza Vehervary, who had been holding the position on an interim basis, will remain COO. Gauss was a 737 pilot at British Airways subsidiary Deutsche BA in the early 1990s before entering management. He was named MD of dba in 2004 and remained in the post after its 2006 merger with Air Berlin. He became CEO of Cirrus Airlines in October 2007 and left to become a consultant in June 2008.
ITA Software signed a multiyear contract renewal with Alaska Air Group covering ITA's ReShop and Reward pre- and post-departure itinerary change solution for Alaska Airlines and Horizon Air. SITA announced that Tarom selected its Flight Operations solution. The Romanian carrier, scheduled to join SkyTeam later this year, will employ FO's full suite including FleetWatch, CrewWatch, FleetPlan and FleetPlan Max to manage schedules, aircraft and crew.
After four consecutive years in the black, Royal Jordanian suffered a JOD23.4 million ($32.8 million) net loss in 2008 as it absorbed JOD46.7 million in fuel hedge losses after reporting a JOD20.4 million profit in 2007. Operating revenue rose 29% to JOD703 million on a 14.1% increase in passenger numbers to 2.7 million. Yield grew 11% due to the increased ticket prices necessitated by soaring fuel costs. RJ's fuel bill jumped nearly 73% to around JOD285 million. It posted an JOD18.7 million profit excluding taxes and hedge losses.
Eroding international premium traffic showed no signs of recovery in February, plunging 21.1% year-over-year following January's 16.7% drop, IATA reported. International economy traffic also fell, lowering 8.3% in February after a 4.7% dip in January. But it is the steep slide in demand for premium tickets that truly has shaken the global airline industry ( ATWOnline, March 18).
SuperJet International, the Sukhoi/Alenia Aeronautica joint venture, received EASA Part 145 certification from ENAC allowing it to perform aircraft maintenance, completion and customization work. The Venice-based marketing, customization and support company for the Superjet 100 said it hopes to receive Part 147 training certification and Design Organization Approval, essential to the design and development of VIP and cargo variants, by year end. That certification also will enable it to carry out line maintenance on A320s at Venice.
Southwest Airlines' stretch of unprofitability continued with a first-quarter net loss of $91 million, reversed from a $34 million profit in the year-ago period and the LCC's third consecutive quarter in the red, leading it to initiate a "systemwide voluntary early-out program" as part of an effort to "align headcount to current capacity."
Enerjet, a Canadian charter airline, signed a five-year component support contract with Air France Industries and KLM Engineering & Maintenance covering maintenance and pool access for its 737NGs. Boeing and KLM E&M's 737NG component services program will offer Enerjet cost savings of up to 30% and can ship parts from a global pool within 24 hr., the companies claimed.
Ryanair confirmed that TUI UK agreed to stop "screenscraping" its website in settlement of legal proceedings filed against it. The English High Court approved the cease-and-desist agreement that was signed by TUI on March 26 ( ATWOnline, Aug. 19, 2008).
Blue Wings' future is up in the air again following a threat from majority shareholder Alexander Lebedev to "probably file for bankruptcy. . .to make a point that it is the German government's fault." Speaking to Bloomberg Television, Lebedev said the LBA still has not reissued Blue Wings' operating license and that the suspended carrier has lost some €25 million ($33.1 million) this month ( ATWOnline, April 8).
Shanghai-based Spring Airlines plans to order 30-50 aircraft from Airbus despite the economic downturn, Chairman Wang Zhenghua said. Wang noted that the fleet expansion plan still requires CAAC approval, which is not a given considering the regulator's stance that Chinese carriers should cancel or delay aircraft orders ( ATWOnline, Dec. 19, 2008).
Gulf Air officially turned its eight 787 options into firm orders, lifting its commitment to the next-generation widebody to 24 and giving Boeing its first 787 orders this year. The manufacturer recorded the deal on its Orders and Deliveries website this week even though the Bahraini carrier had committed to the extra eight aircraft last summer ( ATWOnline, Sept. 5, 2008).
JetBlue Airways announced that industry veteran Russ Chew, who was brought onboard after a weather-related operational meltdown two years ago ( ATW, October 2007), will "transition" from his role as president and COO to that of a senior adviser. Senior VP-Airports and Operational Planning Rob Maruster has been promoted to COO and CEO Dave Barger will add the title of president, both effective June 1.
Air China joined its "big three" rivals in suffering a significant 2008 loss, reporting a CNY9.15 billion ($1.34 billion) deficit under Chinese accounting standards that marked a reversal from the CNY3.7 billion profit in the previous year.
SkyTeam yesterday signed a preliminary agreement outlining Vietnam Airlines' "intentions to undertake exclusive discussions" to join the group next year, which would bring the alliance back to 10 members following the departure of Continental Airlines on Oct. 24. VN would be SkyTeam's third Asian member after co-founder Korean Air and China Southern Airlines, which joined in 2007 ( ATWOnline, Nov. 16, 2007). The Vietnamese press flagged the invitation Tuesday.
Air Canada and TAP Portugal announced a codeshare agreement under which TAP will place its code on AC flights between Canadian cities and international gateways including Newark, London Heathrow and Madrid. AC will place its code on TAP flights from Lisbon and Porto to the same gateways.
