US Airways confirmed yesterday that it will report a full-year loss, which was expected after it ended the third quarter $1.67 billion in the red. Its fourth-quarter result will be impacted by a $0.77-per-gal. loss on its fuel hedging contracts, which accounted for 60% of its mainline consumption. However, it expects to report a full-year gain of $0.12 per gal. In December the group flew 4.82 consolidated RPMs, down 0.9% from the year-ago month, against a 6.2% fall in capacity to 6.06 billion ASMs. Load factor rose 4.3 points to 79.6%.
Air France KLM appears to be on the verge of being named a minority partner in the reorganized Alitalia, beating out Lufthansa for the right to purchase a 20%-25% stake, according to widespread press reports from Italy. Investor group Compagnia Aerea Italia met with Italian Prime Minister Silvio Berlusconi yesterday and "explained . . . their preference for Air France and were told there were no objections from the government," a CAI source told Reuters in Rome ( ATWOnline, Dec. 15, 2008).
AerCap Holdings announced a facility agreement with Calyon SA and "other banks and financial institutions" outlining terms under which European export credit agencies Coface (France), ECGD (UK) and Euler-Hermes (Germany) may guarantee up to $1.4 billion in financing. AerCap said the figure "represents a significant portion" of the financing required for an A330 order scheduled for delivery in 2009-12. According to AerCap, the loans are to be provided by a syndicate of banks led by Calyon acting as Global Arranger "and are subject to customary ECA requirements."
Finnair CEO Jukka Hienonen told the daily Iltalehti that he is hoping a 9% reduction in the carrier's route network will allow it to remain stable during the current market downturn but that a worst-case scenario could result in its cutting up to one-third of its approximately 100 routes. Several hundred employees already have been laid off and another 300 will be downgraded to part-time status in the first few months of this year ( ATWOnline, Nov. 3, 2008).
United Airlines flew 8.2 billion RPMs in December, down 11.5% year-over-year. Capacity fell 12.7% to 10.26 billion ASMs and load factor rose 1.1 points to 79.9%. British Airways flew 9.18 billion RPKs in December, down 3.4% from the year-ago month. Capacity fell 3% to 11.98 billion ASKs, lowering load factor 0.2% to 76.7%. Ryanair transported 4.4 million passengers in December,11% more than in the year-ago month. Load factor was level at 79%.
Southwest Airlines said it has completed the private placement of $400 million in senior secured notes due to mature on Dec. 15, 2011. They will bear interest at 10.5% per year and are secured by an interest in 17 737-700s.
Thai Airways received permission from Airbus to delay the initial payment on six A330s scheduled to be delivered this year, acting President Narongsak Sangapong told Reuters. Payment will be postponed to April from this month, with subsequent payments also pushed back three months. The first of eight ordered A330s is due to arrive in April.
China Southern Airlines posted a $6.3 million gain on its fuel hedges in 2008, becoming the only Chinese carrier to avoid the impact of last year's wildly fluctuating oil prices. The Guangdong-based airline suspended its hedging contract in September, which is why it was able to remain in the black, a company insider told ATWOnline yesterday.
El Al completed the cabin upgrade on the first of four 747-400s scheduled to receive new first, business and economy class seats. Enhancements include a new digital IFE system, in-seat laptop power and a refreshed interior. Remaining aircraft will be completed in April.
Garuda Indonesia said it plans to launch "at least" 18 new routes this year as it begins taking delivery of 14 new 737NGs in mid-year. Thrice-weekly Yogyakarta-Singapore already has begun and this month flights are expected to begin from Jakarta to Tanjungkarang, Malang and Kendari (via Makassar) and to Hong Kong from Surabaya and Denpasar, with more to follow. President and CEO Emirsyah Satar said Garuda expects to be operating 128 aircraft by 2013 as it adds 50 737s and 10 777-300ERs.
DAE Capital signed a sale and leaseback contract with Air New Zealand covering two 777-300ERs. Lease terms are for 12 years and aircraft are due to be delivered in January and March 2011.
Emirates has saved about 10 million liters of fuel and 772 hr. of flight time in the five years since it started working with Airservices Australia to pioneer Flex Tracks. The program involves the use of sophisticated ground and cockpit technology to track live weather and helps pilots chase tailwinds and favorable conditions. It was developed by ASA in December 2003 ( ATW, April 2006).
Frontier Airlines pilots represented by the Frontier Airline Pilots Assn. ratified a labor agreement Monday that will extend wage and benefit concessions through Dec. 11, 2011 ( ATWOnline, May 23, 2008). "This agreement is important because now 100% of our workers have made wage and benefit concessions, a factor that will prove critical in attracting exit financing for our emergence from bankruptcy," Frontier President and CEO Sean Menke said.
Continental Airlines 737-500 that crashed on takeoff at Denver last month suffered a ruptured fuel tank in the right wing ( ATWOnline, Dec. 23, 2008), causing fuel to spill onto the engine, National Transportation Safety Board investigators said, according to the Rocky Mountain News.
Russian aerospace manufacturer NPK Irkut invited bids from both domestic and foreign suppliers to provide engines and major systems for the prospective medium-range MS-21 twinjet.
The European Commission extended the deadline of its review of Lufthansa's bid to acquire Brussels Airlines parent SN Airholding to Jan. 26 from Jan. 12. The parties notified the EC of the intended transaction in late November ( ATWOnline, Sept. 16, 2008). In a first stage, LH would take 45% of the Belgian carrier through a capital increase of €65 million ($89.4 million) following regulatory clearance. It holds an option to buy the rest from 2011.
Ryanair extended to Feb. 13 the deadline for Aer Lingus shareholders to accept its takeover offer while confirming that on the initial closing date of Jan. 5 it had received acceptances totaling just 29.83% of the shares in EI, including its own stake of 29.82%.
Etihad Airways carried just over 6 million passengers in 2008, a 34% increase on 2007, as it expanded its fleet with nine aircraft to 42 and launched six new routes on a network now spanning 50 cities. Load factor soared 7 points to 75%, with business class loads rising to 63%. Etihad Crystal Cargo reported a 16% increase in freight to 202,430 tonnes. EY will launch new service to Melbourne and Lagos in March. This month it officially will open a new passenger terminal at Abu Dhabi International. Terminal 3 is a 550,000-sq.-ft.
Air New Zealand operated a 2-hr. 747-400 biofuel test flight from Auckland on Dec. 29 using a 50/50 blend of jatropha-based fuel and standard jet fuel to power one of the aircraft's Rolls-Royce RB211s.
Southwest Airlines said it reduced its fuel hedge contracts to cover just around 10% of its estimated consumption each year through 2013. This year it expects to save approximately $1.4 billion compared to the guidance provided last summer as its economic fuel cost per gal. excluding taxes is expected to be around $1.80. Its current unhedged estimate is $1.60 per gal.
Tiger Airways scrapped its plan to launch a low-cost airline at South Korea's Incheon International, which announced a delay to the project last summer ( ATWOnline, Aug. 27, 2008). Tiger (49%) and the Incheon city government (51%) cited "the global economic situation" and "continued regulatory uncertainty in Korea," according to press reports.
