Brazilian low-cost carrier Gol likely will emerge a much more significant force in the domestic market owing to Varig's financial problems, according to a new report from JP Morgan forecasting that Varig will reduce domestic flying 50%-100% within the year. JP Morgan's Jamie Baker pins the probability that Varig will downsize at 70%, but says a 20% probability exists that the airline will close its doors for good. Varig's capacity share of the domestic market is estimated at close to 20% currently, with Gol having 26%, TAM around 43% and other operators 11%.
CAAC and the National Development and Reform Commission announced an increase in fuel surcharges on domestic routes of less than 800 km. to CNY30 ($3.74) from CNY20 and on routes greater than 800 km. to CNY60 from CNY40. Increases went into effect April 10 and will last until Oct. 10.
GoAir selected the CFM56-5B to power the fleet of 20 A320s (10 firm and 10 option) it ordered at Asian Aerospace in Singapore ( ATWOnline, Feb. 24). The firm engine order is valued at $120 million at list prices. The Indian carrier launched last year and operates four aircraft serving 14 markets. It plans to grow its fleet to 33 within three years.
Continental Airlines yesterday said it selected Chautauqua Airlines to operate up to 69 ERJ-145s it is withdrawing from its capacity purchase agreement with ExpressJet. After failing to reach a financial agreement in January, Continental notified its Regional partner that 69 of 274 ERJs would be removed from its fleet ( ATWOnline, Jan. 5). At that time, ExpressJet CEO Jim Ream told this website he was hopeful he would find a suitable partner on behalf of whom the regional jets, which ExpressJet subleases from CO, could be deployed.
Indian government announced yesterday the signing of a memorandum of agreement with the US providing for FAA assistance "in developing and modernizing civil aviation information in managerial, operation and technical areas."
Surging operating revenue and a spike in fuel costs offset one another at Air China in 2005, resulting in a "satisfactory" 0.85% rise in annual profit attributable to shareholders to CNY2.41 billion ($299.7 million). "As with other carriers, the rising cost of jet fuel was a major challenge for us," CA Chairman Li Jiaxiang said. "Despite this, we remained the most profitable airline among the major carriers in China as we successfully used a number of strategies to improve operations and contain costs."
The Delta Master Executive Council of the Air Line Pilots Assn. will meet today to receive a "comprehensive briefing" on the tentative agreement reached by airline and union negotiators last Friday. The MEC must approve the deal before it is submitted to members for a ratification vote. To date, the union has declined to provide terms of the accord even to members, but it did say yesterday that the $280-$290 million concession figure reported by The Wall Street Journal ( ATWOnline, April 18) is "not accurate."
Midwest Airlines signed a deal with Empire Aero Center of New York for scheduled heavy maintenance on its 11 MD-80s. Work begins this month and will last for five months.
Thai Airways board elevated Executive VP Apinan Sumanaseni to president effective May 1, according to a statement from Chairman Wanchai Sarathulthat cited by press reports. Apinan succeeds Kanok Abhiradee, who was suspended by the Thai prime minister and stripped of most of his major responsibilities last summer following heavy financial losses ( ATWOnline, Aug. 12, 2005). Apinan started with Thai as a pilot before moving into the front office.
Starman Bros. Auctions was awarded the exclusive right to liquidate all of Independence Air's inventory. The auction is set for April 21-22 and 27-28 at Washington Dulles.
United Airlines appointed Sean Donohue to the new position of VP-customer experience. Donohue most recently was VP-operational services for United Express and Ted. US National Transportation Safety Board Member Ellen Engleman Conners announced this week that she intends to leave NTSB on May 31, 19 months before her term expires. She joined the board in March 2003 and served a two-year term as chairman. She was renominated to the post in 2005 but Congress did not act and the nomination lapsed.
TAM received authorization from Brazil's National Civil Aviation Agency to operate seven weekly flights to London, its second European destination after Paris. It will announce service details "in the following months." TAM also received permission to increase capacity to Argentina by 172,166 seats per year. It currently operates six daily flights to Buenos Aires.
British Airways is increasing its fuel surcharge on tickets sold and issued in the UK to £35 ($61.65) per sector from £30 on its long-haul flights. The short-haul surcharge remains unchanged at £8 per sector. "Our annual fuel bill for 2005/2006 is expected to be some £1.6 billion. We estimated previously that this would rise by £400million in 2006/2007 but at these prices [above $70 a barrel], we would now expect this year's fuel bill to be £600 million higher at £2.2 billion," Commercial Director Martin George said.
Embraer Aircraft Maintenance Services opened a 78,000-sq.-ft. hangar last week in Nashville. The facility will provide full-service MRO and create 165 new jobs. It consists of production shops, support offices and a three-bay hangar large enough to accommodate three Embraer 195s. Operations will begin next month.
Air Canada flew 3.75 billion RPMs in March, a 3.8% increase from the year-ago month. Capacity rose 1.7% to 4.61 billion ASMs and load factor went up 1.6 points to 81.4%. Air Canada Jazz traffic grew 88.8% to 304 million RPMs against a 84.5% hike in ASMs to 417 million, raising load factor 1.7 points to 72.9%. Gol flew 1.04 billion RPKs in March, a 49.6% increase over the year-ago month. Capacity rose 57.3% to 1.51 billion ASKs, dropping load factor 3.6 points to 68.8%.
National Air Traffic Controllers Assn. yesterday said it "accept[ed]" FAA's "public offer to return to the contract bargaining table." According to NATCA President Jonathan Carr, "FAA's official spokesperson" offered to resume negotiations "in a published account on April 17" on the website avweb.com.
Delta Air Lines pilots, represented by the Air Line Pilots Assn., agreed to $280-$290 million in annual concessions, including a 14% pay cut, in the tentative labor agreement reached on Friday ( ATWOnline, April 17), according to The Wall Street Journal. Delta was seeking approximately $315 million in givebacks. The pilots' Master Executive Council said it would review the deal this week and decide whether or not to submit it to union members for a vote.
Gol last week increased frequencies from Porto Alegre to Rosario (from three weekly to four) and Cordoba (from twice-weekly to four). Qatar Airways boosted frequency on the Doha-Manila route to nine-times-weekly from seven. It uses A330-200s on the route. It also introduced a third daily flight to London Heathrow and increased service to Manchester from five-times-weekly to daily. It now operates 35 flights per week to England, codesharing with bmi on flights to LHR and MAN.
World Air Holdings, parent of World Airways and North American Airlines, announced the appointment of Michael Towe as CFO. Towe formerly was CFO of Roper Industries of Georgia.
Thomas Cook Airlines will add 17 new flights for its summer schedule, including new services to Hurghada from Manchester and London Gatwick, to Preveza from Manchester and to Lemnos from Gatwick. In addition, it will increase capacity at Nottingham East Midlands with a 757 to be based there year round.
