Iberia agreed this week on a plan to rescue Venezuelan carrier Viasa, which shut down all flights last week. Iberia, which owns or controls a majority of the troubled carrier, intends to exchange $30 million of Viasa's $150 million debt for equity, while a Venezuelan state-controlled company would invest $30 million. Iberia also plans to manage Viasa's fleet in exchange for the extinguishment of the rest of Viasa's debt. Iberia still directly would control more than 40% of Viasa, and this could raise new objections from the European Union.
Several medium- to small-sized U.S. airlines, including a large charter operator, are forming the Air Carrier Association of America (ACAA), a new association to represent them on regulatory and legislative issues on which they have common interests. ACAA currently has eight members, said Ed Faberman of Ungaretti and Harris, former VP-government affairs at American and ACAA's counsel in Washington, D.C. The association is about one week away from going public with details and names of members, Faberman said yesterday.
United is opposing efforts by Turkish Airlines to serve Chicago with scheduled nonstop combination service from Istanbul. Chicago O'Hare is one of four high-density airports in the U.S., and FAA turned away an earlier Turkish Airlines application for lack of slots. The carrier then requested an exemption from slot controls, which DOT can grant if it finds that the proposal is in the public interest. But United wants to serve Istanbul as well, and its 1994 application was rejected by Turkey.
A majority of airlines serving Atlanta Hartsfield Airport voted in favor of an Atlanta Department of Aviation (DOA) proposal for a $444 million fifth runway at the airport. The runway, 6,000 feet long and 150 feet wide, initially would serve as a commuter runway. The DOA proposal calls for completion of the runway by March 2002, with construction to begin in January 1999. A DOA spokeswoman said a tally indicated sufficient airline support for the plan as of Jan. 29.
Fairchild Dornier 328 customers can decide as little as five months before delivery whether they want the aircraft to be powered by turboprop or turbofan. The 328 and 328JET will be virtually identical coming down the production line, with the major difference being a stronger landing gear to handle the additional weight of the turbofan version, which the company said this week would be powered by the Pratt&Whitney Canada PW306-9 engine. The 328JET has yet to receive its official launch, however, and that could come as early as next week, The DAILY is told.
Startup carrier Arriva Air supplied additional information to DOT on its ownership and financial backing this week, revising its relationship with New Quick Co. Ltd., in response to foreign-control issues. New Quick Co., which has arranged a $1-million line of credit for Arriva, was formed by New Quick, Valley Bank and Fuji Bank. The carrier added that it has received three additional equity investments totaling $175,000 and expects two more of up to $50,000 within a week. All the new investors are U.S.
Saab and the current management of Business Express have agreed on a reorganization plan that would leave existing BizEx management in place and turn over 100% ownership of the financially troubled company to a Philadelphia investment banking firm. The reorganization plan, combining BizEx and Saab efforts, calls for "a significant equity infusion" by the firm of Dimeling, Schreiber&Park. Saab would take a $10 million hit on the deal.
ValuJet will resume flights to Boston Feb. 20, making the city its 20th destination since it resumed service. It plans to offer five daily peak- hour roundtrips from Atlanta and four from Washington Dulles. Introductory fares until March 31 are $89-$149 one way to Atlanta and $49-$99 to Washington. Ponder Harrison, senior VP-sales and marketing, said, "ValuJet's absence from Boston has resulted in a consistent pattern of outrageously high air fares to the market."
Cargo carrier American International Airways said Federal Express does not deserve preferential treatment when more cargo frequencies open up between the U.S. and Brazil. An additional 8.5 weekly frequencies will be available in April, and with applications exceeding that level FedEx decided to scale back its earlier request for six, asking instead for five to avoid a lengthy carrier-selection proceeding. FedEx suggested to DOT that it be given "first priority" when an additional frequency is allocated, however.
Boeing 767 Systemwide Aircraft Utilization Per Day Third Quarter 1996 B767-200 American Delta United Number of Aircraft Operated 30 15 12 Total Fleet Operations Departures 54 67 29 Block Hours 362 169 147 Flight Hours 333 143 133
Atlantic Coast Airlines' announcement this week that it will acquire up to 48 Canadair Regional Jets, with or without the approval of senior partner United's owner-pilots, is a major shift in relations between regional carriers and their major-airline partners. Thought to be mere extensions of their senior partners - called vertical integration - regionals may now be declaring their independence. They are, after all, responsible to their own stockholders to return a profit, and if that requires they operate jets, so be it.
AccessAir Holdings, parent of the Iowa-based startup, provided more information on financing in response to DOT queries. Incorporated last summer, AccessAir plans to operate scheduled service from Iowa to neighboring points and to major cities on the East and West Coast, probably with 737-200As. The company told DOT its officers have been meeting with investors in lieu of retaining a selling agent.
United's proposal for an evidentiary hearing on the American-British Airways alliance is not an attempt to kill the partnership, Cyril Murphy, United VP of international affairs, told The DAILY yesterday. "We do not want people to interpret this as just a device," he said. The alliance can be "fixed" to permit realistic competition through measures such as slot reallocation and access to decent airport ground facilities, he said. United, partnered with Lufthansa, agrees that alliances benefit consumers and carriers, and it maintains that U.S.
Lisbon, Portugal-based Portugalia Airlines has placed a firm order for four EMB-145 aircraft and two options in a deal worth an estimated US$90 million, Embraer announced. The aircraft are scheduled to be delivered in May, June, October and November, with options in 1998. Embraer said Portugalia is the second European company to acquire the aircraft, which has won 67 firm orders and 219 options worldwide. U.S.
KLM Cargo said yesterday it will alter several European routes and increase cargo tariffs in selected service areas. The cargo division will add three weekly nonstop freighter flights serving Manchester and three serving Dublin from Amsterdam, replacing three one-stops that currently serve both cities. One-stop service to KLM's Linz cargo mini-hub and to Vienna also will be split into separate nonstop service, enabling KLM to offer 42-ton capacity on each route.
Frontier Airlines is offering ticketless travel to anyone who calls its Denver reservations office. As with most ticketless carriers, passengers will be given a confirmation number and receive boarding passes with seat assignments when they check in. They can get advance seat assignments when they book. Travel agents will continue to use the standard ticketing system.
Regional Airline Association plans in February to hold a seminar to help members form plans on assisting families of victims of aircraft accidents. Under the Aviation Disaster Family Assistance Act, passed last fall, Congress mandated scheduled airlines to develop formal plans by April 9 on assisting families of accident victims. RAA VP Deborah McElroy noted that many airlines already had such plans in place, but the congressional action formalizes the process.
Air Europa Express, a regional partly owned by Palma, Mallorca-based Air Europa, placed in service three British Aerospace ATPs of eight the carrier will lease, British Aerospace Asset Management-Turboprops (BAe- AMT) reported. The carrier is placing the 64-seat aircraft in service on routes that include Palma to Ibiza and Mahon; Palma to Barcelona, and Barcelona to Valladolid and Salamanca. Those three aircraft - plus another unit being used for training - are based at Palma.
The Orange County, Calif., Board of Supervisors approved this week air carrier and commuter capacity allocations that allow for an increase in passenger traffic between April 1, 1997, and March 31, 1998, over the level expected for the year ending March 31. The board allocated about 13.6 million air carrier seats and 235,865 authorized passengers for commuters for 1997-98. For 1996-97, the board had allocated 13.06 million air carrier seats and 233,788 commuter passengers.
Industry associations are grappling with a new law requiring air carriers to collect records for applicants seeking pilot jobs after Feb. 6. Congress last fall required that both non-scheduled and scheduled air carriers obtain records from FAA, previous employers and the National Driver Register before hiring a new pilot. The new regulations apply to all applications received after Feb. 6, but the FAA has not established a clear method for such record collection.
British Aerospace Asset Management-Turboprops completed 139 aircraft transactions in 1996, including 63 placements of aircraft on sale and lease and 76 retentions or renewals with existing lessees, the company announced. The turboprop leasing and trading unit, formerly called JSX Capital Corp., had 323 aircraft in service worldwide at yearend.
TWA had no comment "on the validity or accuracy" of a report in USA Today that said New Jersey-based Strategic Capital is seeking control of the airline. "When this type of speculation ends up in the press, people tend to believe it as fact," said TWA spokesman John McDonald. Wall Street analysts contacted by The DAILY were either unfamiliar with Strategic Capital or had no knowledge of a TWA acquisition plans.
UPS reported that daily express volume for 1996 increased 9.5% over previous-year levels, to an average of 1.7 million express packages and documents per day. For the final quarter, daily volume rose 5.1% to 1.9 million per day. Domestic volume was up 4.7% and international volume 10.3%. Beginning Feb. 3, UPS will introduce a noon guarantee on two-day express shipments and a 3 p.m. guarantee on next-day deliveries, and full visibility tracking will be available at no extra charge, the company said.
