South African Airways said its restructuring plan launched last year so far has yielded ZAR1 billion ($130 million) in annual cost savings and the program is on track to allow the carrier to begin achieving "sustainable profitability by March 2009." On the labor front, SAA said it has reached agreement on new multiyear deals with unions representing cabin crew and ground staff, while pilots are in the process of ratifying a tentative agreement that will "guarantee" a 5% productivity improvement.
Gategroup member companies eGate Solutions and Pourshins reached long-term agreements with Delta Air Lines to implement next-generation business applications solutions and logistics management for inflight catering. EGate Solutions will provide its InFlight Exchange 4 suite featuring 24-hr. support while Pourshins assumes responsibility for most of DL's inflight food, beverage and equipment sourcing and logistics.
Airbus parent EADS CEO Louis Gallois said the manufacturer's Power8 restructuring program will be enhanced with further cuts to be unveiled by the end of summer. Speaking to Germany's Welt am Sonntag, he conceded that the €2.1 billion ($3.3 billion) annual savings targeted for 2010 and beyond will have to be increased beginning in 2011 or 2012. The further cuts are necessary largely because of the declining value of the US dollar compared to the euro, he explained. "We have a competitor in Boeing that does 90% of its production in dollars," he said.
Jetstar Pacific, Vietnam's first low-cost airline, launched commercial operations as part of Qantas Group Friday. It has become the first Vietnamese carrier to offer online booking to domestic customers. Qantas holds 18% of the LCC and will increase its investment to 30% in 2010 ( ATWOnline, April 15). Jetstar Pacific has four 737s and will add a fifth next month, but it eventually will fly up to 30 A320s.
UPS will transfer its intra-Asia air hub to Shenzhen from Diosdado Macapagal (Clark) in the Philippines in order "to improve customer service by reducing transit times across Asia," it said. The 89,000-sq.-m. hub will be operational in 2010 and will "slash at least a day of shipment times-in-transit for Asian customers." UPS will invest $180 million at Shenzhen, which will include a sorting hub with five times the capacity of Clark--up to 36,000 pieces per hr.--and employ 400. UPS's new hub at Shanghai Pudong will open in November.
IATA reported a 3.9% year-over-year decline in March premium traffic following a 5.1% increase in February. In the first quarter, premium traffic was up 0.2% over the first three months of 2007. "Given the importance of premium passengers for airline profitability the absolute decline in numbers is bad news, particularly since the price of jet fuel rose 170% over the year to March reaching $130 a barrel," IATA said of the March numbers.
ExpressJet Airlines will cut capacity by approximately 30% beginning Aug. 23 and lasting at least through Nov. 15, President and CEO Jim Ream announced yesterday, "due to the current economic environment, including skyrocketing fuel costs and excess capacity in the domestic market." Ream did say that the carrier is "encouraged by the recent booking pace for summer travel in our branded flying and trends we are seeing in our short-haul markets."
Air France KLM will launch a new cabin class in winter 2009-10 catering to SMEs, the elderly and leisure travelers seeking more comfort. The still-unnamed class will be introduced on long-haul aircraft of both AF and KLM, Executive VP-Marketing, Revenue Management & Network Bruno Matheu told ATWOnline, stressing it will not "really be a premium economy. In comfort it's closer to business class with a 38-in. seat pitch and eight seats abreast instead of 10 [in economy] on our 777s. But regarding service levels it will be closer to economy.
British Airways' transatlantic subsidiary OpenSkies will operate its first daily Paris Orly-New York JFK flight on June 19 with one-way fares starting at $1,746 in business class, $720 in its Prem+ premium economy and $554 in economy, it announced yesterday as tickets went on sale. Each 757 frequency will have no more than 82 passengers onboard. Its Biz business class will feature lie-flat beds while Prem+ offers reclining seats at 52-in. pitch. There will be 30 seats in economy.
Lufthansa will launch all-business-class service between Boston and Munich Oct. 26. Route will be served six-times-weekly with a 48-seat A319 Corporate Jet operated by Swiss VIP carrier PrivatAir. New service is a premium extension of LH's existing daily BOS-MUC summer service.
Mesa Air Group said yesterday that if Delta Air Lines succeeds in ending its service agreement for 34 ERJ-145s, MAG may have to file for Chapter 11 bankruptcy protection as the loss of business and the resulting cash crunch would make it impossible for the regional to continue operations.
US Dept. of Transportation yesterday announced a grant of transatlantic antitrust immunity to SkyTeam partners Delta Air Lines, Northwest Airlines, Air France, CSA Czech Airlines, Alitalia and KLM, upholding a tentative approval issued last month ( ATWOnline, April 11).
Qantas yesterday said it has increased its fuel hedging to cover 59% of expected crude oil requirements for the 2008-09 fiscal year at $111.81 per barrel of West Texas Intermediate inclusive of option premium and that it will raise international fares by approximately 4% and domestic by around 3% effective June 4 on top of increases announced earlier this month. CEO Goeff Dixon said QF still will be unable to cover an additional A$2 billion ($1.92 billion) in fuel costs this year.
Southwest Airlines yesterday said it "has no plans" to change its policy of allowing passengers to check their first two pieces of luggage free of charge in response to reports that it was considering such a move in the wake of American Airlines' decision to charge $15 for the first bag ( ATWOnline, May 22).
Finnair now expects its operating result for both the half and full year to "fall short of last year's levels" as "rapidly rising oil prices and a sharp fall in passenger load factors" are "weakening" its "profit-making capacity." Its 2007 operating profit was €96.6 million ($151.7 million). It said its full-year fuel bill will exceed €600 million, up more than 36% year-over-year and more than 25% of estimated 2008 revenue. April load factor was down 6 points and is expected to "continue to fall" this month. "We are now planning to reduce capacity, particularly in Europe.
Frontier Airlines, which declared bankruptcy last month ( ATWOnline, April 14), said members of the Frontier Airlines Pilots Assn. and the Transport Workers Union, which represents its dispatchers, have ratified tentative agreements reached last week on temporary wage and benefit concessions ( ATWOnline, May 19). "This is a key step in helping us continue to negotiate the Chapter 11 process.
US FAA said its Adaptive Compression software, which went into operation in March 2007 and scans airport arrival slots emptied by a cancellation, delay or rerouting for incoming traffic at constrained airports, saved airlines $27 million and 1.1 million delay minutes in its first year of operation.
Air France KLM Group reported a consolidated net profit of €748 million ($1.17 billion) for the fiscal year ended March 31, a 16% decline from the €891 million earned in the prior year as it booked a €530 million provision to cover possible penalties arising from the ongoing antitrust probe into airline cargo activities.
JetBlue Airways announced the election of Vice Chairman Joel Peterson as chairman and Frank Sica as vice chairman. Peterson joined the board in 1999 and is the founding partner of Peterson Partners, a private equity capital firm. Separately, this week JetBlue launched thrice-weekly San Jose-Long Beach, twice-daily LGB-Seattle, twice-daily Washington Dulles-Burbank, daily Las Vegas-BUR, daily SEA-San Diego and its seasonal New York JFK-Nantucket service that will operate through Sept. 2.
Italian government decided to convert its €300 million ($471.2 million) bridge loan to Alitalia into an asset on the airline's books in an effort to win auditor approval of its 2007 finances, Reuters reported ( ATWOnline, May 6). "It is a temporary measure so that the internal auditors don't bring up questions," Economy Minister Giulio Tremonti said.
ARINC won a five-year renewal and upgrade on its contract with CUTE Club to provide its iMUSE common-use platform for passenger check-in and boarding as well as its BagLink baggage messaging system. Deployable on desktop workstations and handheld terminals, iMUSE supports IP and legacy host systems. BagLink technology features intelligent routing and messaging capabilities.
British Airways yesterday announced a $30 million, 18-month initiative to "enhance its premium ground facilities" at New York JFK. Scheduled to launch next month, the project will involve creation of a new premium check-in "pavilion" with dedicated curbside drop-off for first and Executive Gold Club customers, an enhanced and dedicated check-in area for Club World and Executive Club Silver customers and renovation of Terraces, First Class and Concorder Lounges to the Galleries specification now operating at London Heathrow's Terminal 5.
Investigation into the Jan. 17 crash landing of a British Airways 777 on final approach to London Heathrow has not revealed an anomaly that could have caused the flow of fuel to the engines to be reduced as the pilots called for more power, according to the UK Air Accident Investigations Branch, although restricted fuel flow was certainly the cause of the nonfatal accident ( ATWOnline, Feb. 20).
Southwest Airlines and AirTran Airways yesterday announced the addition of chairman to the titles of their respective CEOs. SWA CEO Gary Kelly was elected chairman yesterday and will succeed the departing Herb Kelleher. He also will assume the title of president, taking over from Colleen Barrett when her contract expires on July 15 ( ATWOnline, July 20). Kelleher and Barrett will remain with the airline through July 2013.
American Airlines yesterday said it will retire "at least" 75 aircraft, including 40-45 mainline jets, this year and begin charging $15 for the first piece of checked luggage on North American flights as it tries to cope with oil prices that reached more than $130 per barrel Wednesday. "We are facing an extraordinarily difficult environment," Chairman and CEO Gerard Arpey said in announcing the cutbacks. "The US airline industry was not built for $125 or $130 barrel oil. . .[and] will not and cannot continue in its current state."
