Bombardier has completed the purchase of Ontario's 49% interest in de Havilland for $49 million, issuing a 15-year promissory note with a 7% interest rate and $4.9 million payments at the end of each of years six through 15. Bombardier and Ontario bought de Havilland from Boeing in January 1992.
Boeing Commercial said it has formed Boeing Enterprises, which will "establish and direct new commercial airplane-related business entities," and named Larry Clarkson, senior VP-planning and international development at Boeing Co., to be president of the new unit.
Apollo computer reservations system is capable of allowing electronic tickets to be processed on USAir, Northwest and TWA. United, Continental and America West already offer electronic tickets on the Apollo system. Northwest is the first Apollo user to allow electronic tickets for flights to Canada.
FAA has revoked the repair station certificate of AC Fuel Cells Worldwide of Memphis, based on evidence that the company "falsified part and serial numbers of fuel cells and used unauthorized parts in overhauling fuel cells." FAA said the company also "performed maintenance on life rafts and vests without appropriate maintenance manuals, and used parts that were cadmium-plated by a company that was not authorized to do so."
Midwest Express reported record fourth quarter revenue of $78.2 million, up 23.3%, and record net earnings of $3.97 million, up 35.9%. The company had revenues of $304.7 million for 1996, up 17.6%, and net profits of $21.8 million, up 13.7%. Like others, Midwest Express faced sharply higher fuel costs last year. In the fourth quarter, it paid an average of 87.1 cents per gallon and its Skyway Airlines subsidiary paid 93.8 cents per gallon, the highest average price reported so far this year.
DOT confirmed it has met with a number of niche airlines in recent months to discuss their concerns about predatory pricing by major airline competitors. DOT declined to name the carriers, but a ValuJet spokesmen said his airline was one of them. Frontier officials met with DOT and the Justice Department last week to discuss their own charges of predatory activity by United at Denver Airport. A Frontier spokesman said government officials "seemed to be very interested in what we said, and asked for more information," which Frontier agreed to provide.
The port authority of the Commonwealth of the Northern Mariana Islands criticized World Airways for asking DOT to deny Korean Airlines' renewal of service to Saipan. Trying to secure what it regards as a routine effort to fly beyond Seoul, World also asked for denial of KAL and Asiana applications for new service, including one route, KAL's Korea-Kona, that would be extra-bilateral. But "it would be entirely inappropriate to lump those applications together," the port authority said.
Business Express reported a 31.5% decline in revenue passenger miles in December to 17.6 million from 25.7 million. Capacity fell 20.6% to 51.6 million available seat miles from 65 million, while the load factor was off 5.5 points to 34%. The carrier said the load factor dropped because of the phaseout of the Beech 1900 and the increase in Saab 340 flying. Business Express has phased out 27 Beech 1900Cs. The carrier's operating cost per ASM year-over-year was down 6.12%, while revenue per ASM increased 4.4%.
House Transportation aviation subcommittee has scheduled hearings Feb. 5 and Feb. 13 on airlines' proposals to establish user fees for FAA services. The Feb. 5 hearing is scheduled at 10:30 a.m. and the Feb. 13 hearing at 9 a.m., both in Room 2167, Rayburn Building.
United Express carrier Atlantic Coast Airlines ordered 12 50-seat Canadair Regional Jet Series 200ER aircraft and placed 36 options in a deal Bombardier values at $240 million. ACA will buy the aircraft through third-party financing, and if United agrees it will use them to beef up its Washington Dulles operation, where it offers more daily departures than any other carrier, and possibly in new East Coast routes.
British Airways announced yesterday the resignation of three directors from the USAir board. USAir said the move to take Bob Ayling, Derek Stevens and Roger Maynard off its board "clears another obstacle" in USAir's desire to compete in the U.S.-U.K. market. BA also said in December that it intends to sell its shares in USAir. The U.S. carrier was not satisfied, however, saying that, despite the moves, "competition is not yet assured."
America West, despite higher fuel costs, posted a 2.6% decline in fourth quarter operating costs that helped the airline realize record profits of $12.1 million. Fourth quarter revenues increased 11% to a record $439.9 million. For the year, the carrier reported net income of $48.7 million, excluding a special third quarter charge of $65.1 million. Counting the charge, America West had a net profit of $8.5 million for 1996, down 84%. The unit cost decline was largely due to flying longer-haul flights, which tend to cost less per seat mile to operate.
The evidentiary hearing into the American -British Airways alliance requested by United (DAILY, Jan. 28) would be the first such DOT investigation of an international partnership seeking antitrust immunity. Oral hearings before an administrative law judge, with supporting documents, exhibits and witnesses subject to cross-examination, are conducted more often on issues such as airport rates, a DOT spokesman said.
Northrop Grumman said it will modify an existing ASR-9 airport surveillance radar into a transportable version under a $514,000 contract from FAA. The transportable unit, designed for truck transport and quick setup at a prepared location, can be assembled and operational in 16 hours. The only support requirements are a power source, data links to the display system and cement footings for installing the antenna tower. In the transportable version, a self-contained transportable shelter houses both the radar and beacon equipment.
Alitalia will have to wait another two months to hear the European Commission's verdict about a planned 3 trillion lire recapitalization by the Italian state. Philip Lowe, European Union Transport Commissioner Neil Kinnock's chief of cabinet, said he expects "an earliest decision in March or early April." Alitalia's restructuring plan, into which the commission launched a full-scale inquiry last October, includes the sale of up to 20% of the airline's capital to employees.
Lufthansa Chairman Jurgen Weber told the airline's 60,000 employees that a strike could cost between DM30 and 50 million in case of complete stoppage. Deutsche Angestellten-Gewerkschaft (DAG), the white- collar union, has refused to sign a wage and work conditions accord with management, and launched a referendum on protest action at the beginning of the week. In a letter to the personnel, Weber said he sees the pilots' hand behind DAG's strong stance.
Air France managed to reduce its losses significantly in 1996-97, at the end of a three-year restructuring plan comprising a 20 billion French franc capital increase by the French state. Results for the fiscal year ending March 31 should show a deficit of FF200 million, as forecast, despite rising fuel prices, Chairman Christian Blanc told members of the French Parliament. Blanc also underlined that the rise in the dollar had generated extra expenses of about FF200 million. Air France lost FF2.9 billion in 1995-96 and as much as FF8 billion in 1993.
Surplus military aircraft will be one of the major issues to be discussed at the Feb. 4 meeting of the Helicopter Association International in Anaheim, Calif. HAI said that between 1993 and 2000, as many as 3,000 surplus military aircraft, "plus tons of components and parts," will be transferred from the military into civilian fleets. At least 750 military surplus helicopters already have been redeployed into non-military uses, mostly by state and local governments.
Boeing 737 Systemwide Aircraft Utilization Per Day Third Quarter 1996 B737-300 America West Continental Delta Number of Aircraft Operated 40 65 13 Total Fleet Operations Departures 258 286 70 Block Hours 481 703 125 Flight Hours 397 589 103
United posted record fourth quarter and annual earnings yesterday as the carrier's 1996 profit topped $1 billion for the first time in its history. The carrier realized improved international and domestic passenger unit revenues, better system yield, a higher load factor and a more profitable Pacific operation. United also set records in annual earnings per share, $7.68, up 48%; operating earnings, fully distributed, $1.8 billion, up 36% ; and revenue, $16.4 billion, up 9.5%. Revenue per available seat mile - 12.35 cents, also a record - improved due to a strong U.S.
Correction: Thomas Lagow, USAir executive VP-marketing who is retiring at the end of January, was hired at USAir from United in 1992. He came to USAir before Chairman Stephen Wolf came on board last year. Wolf brought former United colleague Rakesh Gangwal with him from Air France. The sequence of events was stated incorrectly in The DAILY Jan. 23.
United's pilots have embarked on a campaign to persuade all the carrier's employees to be non-cooperative with management in an effort to end what they describe as corporate culture problems that include "cost-cutting without regard to operational consequences or human impact" and "consistent, chronic understaffing." The Air Line Pilots Association, which recently rejected by a large margin and sent to arbitration the mid- term wage adjustment to the Employee Stock Ownership Plan (ESOP), says the campaign is not simply a wage issue.
Alaska Airlines reported yesterday a 1996 net income of $38 million, more than double 1995's $17.3 million. The second best year in the airline's history was dampened by a net loss of $5.6 million in the fourth quarter, however. Severe winter storms in December, coupled with sharply higher fuel prices, walloped the carrier's Seattle and Portland hubs as well as its fourth quarter numbers. The company posted a 6.8% rise in fourth quarter revenues but a 10.6% hike in expenses.
American President Donald Carty yesterday challenged the Allied Pilots Association (APA), asking the union to reconsider allowing an independent arbitrator to rule on its pending labor contract. "If they are confident in their position, they should have no concern about arbitrating this matter," he said. The bottom line is that if American's order for 103 new Boeing jets is to go through, the airline cannot tolerate pilot costs that are higher than those set down in the tentative agreement that APA members rejected Jan. 8, Carty said.
