FedEx Express signed an agreement to acquire Tianjin Datian W. Group's 50% stake in the FedEx-DTW International Priority express joint venture plus DTW's Chinese express network comprising 89 locations for $400 million. The JV, launched in 1999, now will be a wholly owned FedEx subsidiary. The deal also includes DTW assets used to perform IP services. DTW will continue to operate international freight forwarding, general cargo transport and merchandise distribution businesses.
ITA Software, which provides software solutions to the airline and travel industries and is also a GDS new entrant, announced $100 million in equity financing. Led by Battery Ventures, the round includes participation from General Catalyst Partners, PAR Investment Partners, Sequoia Capital and Spectrum Equity.
Unionized employees at Mesaba Airlines, including pilots, flight attendants and mechanics, are protesting the bankrupt company's proposal to reward its management team with some $2.2 million in bonuses. The carrier filed a motion in bankruptcy court seeking permission to pay bonuses worth up to 60% of executive base pay and to issue stock appreciation rights to top officers and directors. Mesaba, which filed for Chapter 11 protection in October, operates as a Regional codeshare partner of Northwest Airlines.
KLM will launch a twice-weekly Amsterdam-Chengdu service from May 28 using 777 200ERs in cooperation with China Southern Airlines. Chengdu is KLM's fourth Chinese destination. United Airlines will launch weekly Chicago-Puerto Vallarta service from March 4. Service will become daily Dec. 15. Weekly Los Angeles-Cancun service also will begin March 4, increasing to daily service on Ted from June 8. All flights will be aboard A320s. UA is awaiting approval to begin Chicago-Cancun service and flights from LAX to San Jose del Cabo and Puerto Vallarta.
Qantas took delivery of the first of seven Q400s, which will enter service Feb. 26. The 72-seat turboprop will operate twice-daily service between Brisbane and Mackay replacing a single daily flight currently operated with a 737.
Volga-Dnepr Group said its first new-build IL-76TD-90VD freighter received Chapter 4 noise certification from ICAO. The company has ordered two of the 50-tonne freighters, which are equipped with PS-90a-76 engines and new avionics.
Sabre Holdings and Northwest Airlines signed a five-year, full content agreement to make available through the Sabre GDS all Northwest published fares and inventory, including special Web fares. Concurrent with the announcement, the companies said they agreed to settle all current litigation.
Scandinavian Airlines Group said recently discovered financial reporting errors at its Spanair subsidiary related to improper accounting of certain revenues and costs will result in a charge against earnings at Spanair of SEK80 million ($10.6 million) for the 2005 fourth quarter. The SAS subsidiary still is expected to show a profit for the quarter and the corrections will not affect SAS Group's full-year outlook, the company stated. SAS also will restate results for the 2002-04 period with a negative impact of SEK340 million.
ExpressJet Holdings, a Regional partner of Continental Airlines, reported yesterday a 20.2% drop in annual net profit from $122.8 million in 2004 to $98 million in 2005, a year that concluded with CO's unexpected December decision to eliminate 44 ERJ-145XRs and 25 ERJ-145LRs--25% of the ExpressJet fleet--from its capacity purchase agreement ( ATWOnline, Jan. 4).
Eos, a New York-based all-premium airline, is participating in the Sabre GDS. Eos operates 757s configured for 48 seats on services between New York JFK and London Stansted.
China Airlines will retrofit Aviation Partners Boeing Blended Winglets to 11 737-800s. Work at the carrier's MRO facility in Taipei will commence in March and be completed by year end.
News from Travel Technology Update: AirTran, which dropped out of Worldspan in November because the two companies could not come to terms on the cost of participation, is back in the GDS with a new multiyear, full content agreement, effect Jan. 24. The carrier is distributing inventory, availability and fares through Worldspan at a level of participation called Limited Connect, which is below Worldspan's Full Service level. Worldspan said Limited Connect is designed to meet the distribution needs of carriers that require limited functionality
Indonesian government, as expected, is seeking foreign capital to rescue debt-ridden Garuda. However, the government's desire to retain 51% control is expected to restrict interest significantly, analysts say. According to the Centre for Asia Pacific Aviation, Garuda has asked Malaysia Airlines to reduce its thrice-daily 777 service between Kuala Lumpur and Jakarta to increase yields--Garuda operates 737s on the route. The carrier's problems are wide-ranging, with traffic to Indonesia down 5.9% due to the recent Bali bombings.
Royal Air Maroc announced creation of an A320 and 737 MRO subsidiary called Aerotechnic Industries to be based at Marrakech-Menara. RAM's initial investment of MAD70 million ($7.5 million) will be directed largely toward the construction of an 11,000-sq.-m. hangar with room for two aircraft.
Aer Lingus will order four A330s for delivery beginning later this year, according to sources at the carrier, possibly indicating it will favor the A350 over the 787 for its upcoming fleet expansion. It has a need for up to 12 A350-type aircraft. The deal is worth $400 million, according to media reports.
Chinese airlines reported robust growth in passengers and cargo for 2005 thanks to surging traffic, and in the case of China Eastern and China Southern the gains from mergers completed last year. Air China reported a 13% increase in passengers to 27.7 million while cargo jumped 10.2% to 732,818 tonnes. China Eastern saw a 37% leap in passengers to 24.3 million and a 14% rise in cargo to 755,010 tonnes. China Southern also had impressive numbers as passenger totals jumped 56.4% to 44.10 million and cargo climbed 42.1% to 774,550 tonnes.
Murray Air Certifications announced it completed Virgin America's operating manuals process and assisted it in its effort to become a US FAA-certified FAR 121 carrier.
Austrian Airlines Group transported a record 10.1 million passengers in 2005, 7.6% more than in 2004. Yearly traffic in RPKs increased 7.6% to 22.8 billion, ASKs rose 5.7% to 30.8 billion and load factor improved 1.3 points to 74.1%.
ATR of France logged firm orders for 90 new aircraft--17 42-500s and 73 72-500s--plus 26 options in 2005 against only 12 firm orders in 2004. Revenues amounted to $542 million, an increase of 15% compared to 2004, prompting CEO Filippo Bagnato to declare, "2005 was our best year since 1989" during a Paris press conference yesterday.
Jet Airways' net profits fell 53% to INR610 million ($13.8 million) in the third fiscal quarter ended Dec. 31, a "positive result," according to Executive Director Saroj Datta, who cited "industrywide capacity addition that was far in excess of demand growth," surging fuel costs that outstripped fare increases and operating losses on Jet's new international routes. The report came on the heels of the carrier's $500 million acquisition of Air Sahara, which will create the country's largest domestic airline ( ATWOnline, Jan. 20).
ATA Airlines announced new service from Hawaii, Oakland and Houston yesterday and an accompanying expansion to its successful codeshare agreement with Southwest Airlines. ATA announced that new service from Oakland to Honolulu (twice-daily), Hilo (daily) and Maui (daily) will begin April 27 replacing its operations at San Francisco. The following day it will launch daily Honolulu-Ontario service and on May 25 it will add a frequency to its Honolulu-Los Angeles service.
Embraer unveiled a corporate restructuring plan giving voting rights to all shareholders and making it easier to raise capital to fund future development. The plan must be approved by shareholders, who are scheduled to meet March 31. As part of the plan, CEO Mauricio Botelho would relinquish his title in 2007 and become chairman for a three-year period. A successor has not been named, but sources suggested Executive VP Frederico Curado as a possibility. According to Brazilian news reports, Botelho said the company might develop a business jet based on its commercial aircraft program.
Delta Air Lines will add service from New York LaGuardia to Chicago O'Hare and Dallas/Ft. Worth this spring. Service will be operated by Shuttle America aboard 70-seat Embraer 170s. Five-times-daily flights to ORD and twice-daily service to DFW will commence April 3. A third flight to DFW will begin May 1. Norwegian Air Shuttle will operate flights from Oslo to Varna and Bourgas in Bulgaria beginning in May.
China Eastern Airlines will acquire five 50-seat ERJ-145LRs from Harbin Embraer to be delivered between November 2006 and June 2007. Harbin Embraer is a joint venture between Embraer and China Aviation Industry Corp. II.
