FedEx will revise domestic pricing this summer to reflect weight, size of package and distance. FedEx said it has offered "such region-based pricing on all international shipments and to certain domestic customers for many years." The new rates "will be more closely aligned with FedEx's transportation costs," the company said. UPS launched distance-based pricing for its air express services nearly a year ago (DAILY, Jan. 1, 1996).
DOT reaffirmed an earlier decision to grant expanded code-sharing by Delta and Aeromexico, turning away a challenge by American and a request for short-term approval by Northwest and Alaska.
Poor cost estimating processes for FAA's air traffic control modernization have led to unreliable cost and financial information, increasing the likelihood of poor ATC investment decisions, the General Accounting Office said this week. In a Jan. 22 report to DOT, GAO contended that flaws in FAA's institutional policies and practices also mean that Congress does not have reliable cost information to use in making FAA funding decisions.
Hawaiian Airlines and American Eagle carrier Wings West have signed a marketing agreement that includes codesharing service from Los Angeles to 10 cities in California and Nevada, beginning March 4. Wings West will operate the flights to Los Angeles from San Diego, Orange County, Santa Barbara, Palm Springs, Monterey, San Luis Obispo, Fresno, Bakersfield, Carlsbad and Las Vegas. Hawaiian operates service from Los Angeles to Hawaiia.
SAS Commuter has joined the European Regions Airline Association, becoming the association's 69th member and the 13th to join in the past 12 months, ERA said. Over the past month, Moldavian Airlines and Azzurra Air both have joined the association as full members, and National Jet Systems has joined as an affiliate member.
U.S. and Singapore negotiators signed an open skies agreement late Wednesday after three days of talks in Washington. Implementation awaits formal approval by the respective governments. With Singapore as its first open skies partner in Asia, the U.S. has lined up Malaysia and Taiwan for similar talks next month and is conducting ongoing discussions with Brunei through the U.S. embassy there.
Western Pacific is displaying its schedules and fares in the Sabre and Apollo/Galileo computer reservations systems. Mark Coleman, senior VP- marketing and planning, said, "Western Pacific is taking this first step toward making our product easily accessible to the most important distributor of air travel, the travel agency community. We will move forward to give travel agents booking and ticketing capability in the coming months."
If the six airline financial results issued so far are an indicator, U.S. majors may post combined net profits greater than $4 billion for 1996. The six earned $3.1 billion last year, with United, TWA, Alaska and America West still to report.
Delta SkyMiles members can check their frequent flyer mile accounts by using personal identification numbers to access the data on the SkyLinks World Wide Web site or by calling a toll-free number. Delta is planning more upgrades to the site this year. Anyone who makes a reservation using the SkyLinks Reservations Desk before June 30 will receive 500 bonus miles. Delta launched an advertising campaign Monday on five Web search engines - Lycos, Magellan, Hotbot, excite and infoseek - to promote the service.
Delta Connection carrier Comair reported a net income of $15.5 million, or 35 cents per share, for the quarter ended Dec. 31. It came on operating revenues of $138.3 million and operating profit of $24.1 million. Operating revenues were up 22.7% and operating profit 13.9% from the same quarter a year ago. Operating expenses increased more rapidly, however, 24.7% to $114.2 million. Net profit registered a 17.9% gain over the previous year's $13.1 million.
Montpellier, France-based Air Littoral has placed an order with Bombardier Regional Aircraft for seven Canadair Regional Jets and took options for another five aircraft. Value of the firm-order portion of the transaction was placed at more than US$133 million - Canadian $178 million. Deliveries are expected to be completed by the fourth quarter.
Lufthansa has until mid-February to respond to a warning issued by the Bunbeskartellamt, the German antitrust body, which accuses the airline of overpricing its Berlin-Frankfurt service. The German flag carrier holds a monopoly on the route. Lufthansa charges 840 Deutschmarks for a business- class ticket, about DEM200 more than on Berlin-Dusseldorf and Berlin-Munich flights, where it faces substantial competition. Lufthansa rejected the accusation and said the fares were necessary to cover costs.
Delta posted yesterday a record net income for 1996 of $754 million before special items, up a sharp 48%, while annual operating income jumped 34% to $1.4 billion, excluding one-time charges. The carrier also experienced a net income for the December quarter of $125 million, up 79%. The period, Delta's second fiscal quarter, was the seventh consecutive quarter of record operating earnings and the third straight period of record net profits. Delta took $829 million in pretax restructuring and other non-recurring charges in calendar 1996.
After Lufthansa, SAS and KLM face fierce opposition from travel agents, whose commissions they have decided to cut. The Dutch association of travel agencies demanded that KLM drop its plans to shave their commissions to 7.5% from 9%, starting April 1. The Dutch travel agents said that as a result, their revenue would fall 16%, and they demand that KLM reopen talks. In Norway, the travel agents' association lodged a complaint with the national competition authority, Konkurransetilsynet, against SAS.
United Express affiliate Great Lakes Aviation has won a tentative award from DOT to provide subsidized service at Ottumwa, Iowa, and Sterling/Rock Falls, Ill. The agency also set final subidy rates for the carrier's Sterling/Rock Falls flights for July 8-Sept. 30, 1996.
Deadline for Part 135 carriers with aircraft of 10 or more passenger seats to comply with Part 121 standards is March 20 and RAA President Walt Coleman said he has not heard any significant complaints except from one unnamed company. But he would not comment on Alaskan carriers that are being "challenged" by the new Commuter Rule. Many do not plan to make the transition at all, some indicating they will simply remove seats and others hoping for an "11th hour stay of execution." Mesa estimates ongoing costs of $2.5 million per year to comply with Part 121.
Acting FAA Administrator Linda Daschle is expected to join Baker, Donelson, Berman&Caldwell as a lobbyist - formally, a senior public policy adviser - after she leaves the agency Jan. 31. Daschle joined FAA in November 1993 as deputy administrator and has been acting administrator since last Nov. 9.
AI(R) logged 13 Jetstream 41 orders during 1996-one for the KwaZulu government and 12 for United Express Atlantic Coast, the latter coming in the fourth quarter. Saab 340 orders for the year totaled 35. Avro RJ85/100 orders totaled 20, including 12 for Northwest/Mesaba, and ATR 42/72 orders stood at 25, with none by U.S. regionals. The British/French/Italian consortium delivered 26 Avro RJs in 1996 plus 20 Jetstreams and 39 ATRs. Total airframe orders for the consortium were 58.
Boeing Co. and McDonnell Douglas Corp., which plan to be a single company by summer, reported robust 1996 financial results yesterday. Boeing logged $1.2 billion in profits, up 51% from 1995, citing increased commercial sales, reduced R&D costs and other factors. Sales increased from $19.5 billion to $22.7 billion. McDonnell Douglas earned $788 million, up 11%, even though sales dropped from $14.3 billion to $13.8 billion. Operating earnings set a record, $1.359 billion, mainly from military aircraft production programs.
Air France Chairman Christian Blanc wants the French state-owned flag carrier to be privatized before yearend. "My wish is that we can privatize before the end of 1997 or at the start of 1998 because for a commercial enterprise having a state shareholder is a brake on development," Blanc wrote in the company's magazine France Aviation. "I would also like employees to control a large part of the capital - 20% to 30% - so that they can have an overall view of the company and its development," he added. Blanc said the state should keep a minority stake in the airline.
Clarification: Business Travel Contractors Corp. said yesterday that 32 business associations representing about 170,000 companies support its attempt to force airlines to reduce prices 10% to reflect the lapse in the 10% federal ticket tax. When BTCC had 20 organizations, The DAILY Jan. 21 incorrectly referred to them as 20 corporations.
Air Transport World magazine has named Continental its Airline of the Year. The February issue features Continental and cites its turnaround in operating and financial performance.
Startup carrier Jet USA is retrenching after delays caused its launch financing to fall through. The carrier first filed last May, expecting to proceed with a $15 million initial public offering that would permit it to lease two aircraft. Because of slower-than-expected clearance of the stock issue by the Securities and Exchange Commission, the carrier said, it lost its options for the aircraft, and the bank conducting the IPO was unable to complete it.
The board of directors of Bombardier authorized Tuesday the launch of the 70-passenger Canadair Regional Jet stretch (CRJ-X). The company failed to elaborate, however, saying only that its Aerospace Group will make a formal announcement with full details of the program in the third week of February. Bombardier said previously that the aircraft will be powered by the GE CF34-8C1, a 13,000- to 15,000-pounds-thrust growth version of the CF34-B1 that powers the 50-passenger CRJ. CRJ operators have wanted the larger aircraft for some time.
Augsburg Airways has obtained slots at Frankfurt Main Airport and has started to operate four-times-daily flights from Augsburg, in the Munich Metropolitan area, sporting Team Lufthansa colors and flying under the LH designator. The privately owned airline, which became Lufthansa's first franchise partner last October, is operating the route with de Havilland Dash 8-100 aircraft. In order to start the Frankfurt services, the airline had to withdraw from its Augsburg and Cologne-Bonn services to London City Airport.
