Higher unit costs, stagnating revenues and lower domestic traffic in Sweden and Denmark caused a 41% drop in pre-tax profits for SAS for the first nine months of 1996, which prompted the airline yesterday to launch a cost- cutting program. The restructuring will attempt to cut operating costs by $150 million over three years, said SAS spokesman Anders Bjork. But the airline is not saying where it thinks it can trim fat from its organization. Revenues fell $104 million to 24.9 billion Swedish krona ($3.74 billion).
Chilean airline Fast Air Carrier agreed to a consent order that includes a fine of up to $200,000 for operating between Miami and Brazil without authority earlier this year. DOT said the event was the third time Fast Air violated its permit authority in the last three years. Fast Air conducted flights under the name of a U.S. carrier that holds charter allocations in the U.S.-Brazil market, using aircraft and crews that had wet-lease agreements with, depending on the violation, Fast Air or the U.S. carrier, which the department refused to identify.
Boeing said yesterday that testing of nearly 2,000 rudder power control units (PCUs) in the 737 fleet has not produced a single failure. The total world fleet numbers more than 2,700. Boeing recommended the tests after discovering a potential problem in the PCU's secondary slide, one result of intensive scrutiny into the rudder control systems of the aircraft. FAA mandated the tests for U.S.-registered 737s, and Boeing said airlines outside the U.S. have tested a "substantial number" voluntarily.
British Airways flights between London and 21 U..S. gateways will be smoke- free starting Jan. 1, the airline said this week. The ban on smoking, which includes service to the Caribbean, came after BA researchers found that passenger reaction to non-smoking trials has been "overwhelmingly favorable." More than 80% of BA passengers request non-smoking seats, "and their numbers are growing, so we have progressively extended non-smoking services," said Dale Moss, executive VP-sales and marketing U.S.
Airworld, a U.K. charter carrier, has ordered two new A321-200s from ILFC on five-year operating leases. The aircraft, to be powered by CFM56-5B3 engines, will be delivered in March 1997 and April 1998. Airworld is an operating unit of Iberotravel.
Australia signed an agreement that substantially expands air services to the U.K. for the first time since 1990 but characterized Hong Kong's position as "protectionist" after separate negotiations ended in a stalemate.
American's Fly AAway Vacations division has launched a vacation tour package that combines air travel to nine Canadian destinations with train options. The packages offer resort stays at Whistler and Banff/Lake Louise, and trips to Vancouver, Victoria, Calgary, Montreal, Quebec City, Toronto and Ottawa.
The Lehigh-Northampton Airport Authority and seven airlines this week presented to FAA sharply contrasting views of the financial impact of a past revenue guarantee program at Allentown, Pa., with the former contending that the program lowered the rates and charges of incumbent airlines and the latter calling the program "a financial debacle." The two sides also took conflicting views of the legal issues in the direct exhibits at FAA.
Tower Air has launched a frequent flyer program that offers a free one-way domestic ticket after 10 flights. Free international tickets are given after 20 one-way domestic segments. For five international segments, members receive either a free international one-way ticket or two free domestic tickets. They also receive a card entitling them to check-in at business- class counters, access to business-class lounges in New York and Tel Aviv, priority boarding, priority space-available upgrades and special fare announcements.
Worldspan subscribers can connect to Hilton Hotels and Resorts' reservations system through the Hotel Source program. Travel agents using Worldspan can receive the same updated information on Hilton that is available through the toll-free reservations number.
American Trans Air, which last week extended its early-winter sale purchase date through yesterday, said travel can be taken through Feb. 15. TriStar Airlines, a Las Vegas-based regional carrier, extended a $49 one-way fare on all flights between Las Vegas and San Francisco through Nov. 25.
Hawaiian Airlines' October traffic dropped 8.2% to 305 million revenue passenger miles from 332 million. Available seat miles increased to 428 million from 425 million, resulting in a load factor drop of 6.9 points to 71.2%. Hawaiian carried 394,424 passengers during the month, a 4.8% decrease. In the first 10 months, RPMs rose 8.4% to 3.205 billion, ASMs climbed 10.7% to 4.246 billion and the load factor fell 1.6 points to 75.5%.
DOT granted an American petition to reconsider its order requesting additional documentation on the proposed TACA alliance, reaffirmed its previous order in the case and asked American to produce additional documentation in response to a Continental inquiry over Sabre. The American proposal is for code-share and other joint service with TACA Group, a combination of Central American flag carriers. Delta and Continental suggested either blocking the deal or obtaining additional information to establish whether it met competition requirements.
Summary of U.S. Major Carriers International Traffic June 1996 Revenue Average Revenue Passengers Length of Passenger Enplaned % Travel Miles Carriers (000) Change (Miles) (000) Alaska 57 52.53 1,033 59,421 Latin 57 52.53 1,033 59,421 American 1,264 1.84 2,215 2,799,359
The weak Japanese yen, which hurt carriers with large yen-based revenues in 1996, is expected to recover in 1997 and help those same carriers, said Lehman Brothers analyst Brian Harris. Aside from strengthening Japan's airlines, he predicts a strengthening yen will boost 1997 earnings of Northwest, United and Continental, which take in 14.1%, 6.7% and 4.5% of their revenues, respectively, in yen.
Dade County, Fla., asked DOT yesterday for a determination of the reasonableness of airline rates and charges associated with the "Super A" terminal expansion at Miami Airport. Dade is the first airport operator to seek such a determination under DOT rates and charges procedures. Last week, U.S. District Judge Joan Lenard dismissed the majority of a lawsuit filed by five airlines protesting the 47-gate concourse for American's exclusive use and referred the parties to DOT for the rates and charges dispute resolution (DAILY, Nov. 12).
United's SkyMiles members can earn bonus miles for using an exclusive network of professional residential real estate services under an agreement with PMP Relocation Services. PMP is an affiliate of RE/MAX International. For an average transaction of $150,000, a member could earn 88,000 miles plus discounts on transportation services, such as moving companies and truck rentals.
FAA said it plans to award a single-source contract to InVision Technologies, Foster City, Calif., for the acquisition and deployment of up to 54 FAA-certified CTX-5000 SP explosives detection systems (EDSs). FAA received funding for the EDSs as part of a fiscal 1997 supplemental appropriation.
Aeromexico has requested authority for combination service between Culiacan, Mexico, and Los Angeles starting Dec. 16, operating one daily MD- 80 roundtrip.
Alaska Airlines has applied for new authority to fly from Anchorage to Yuzhno-Sakhalinsk, Russia, asking that the latter be added as a co-terminal point to its existing route to Magadan, Khabarovsk, Vladivostok and Petropavlovsk-Kamchatski. To build customer awareness, Alaska said it wants to start advertising the service Jan. 1 in preparation for a service start on April 6.
The vagaries of starting up an charter cargo airline are illustrated by Arriva Air International's reply last week to a DOT request for additional information about its application. Co-founder Steven Higgins originally tried to enter the business by taking over a certificated carrier that was not operating, Patriot Airlines of Reno, Nev. After acquiring all of Patriot's outstanding stock, "it became increasingly evident that Patriot was in far more dire financial straits than Mr.
Regular United customers may notice a reduction in the quality of their inflight service if contract negotiations with the Association of Flight Attendants proceed much longer. The union is recommending that members take a "minimalist" approach to their jobs - doing only what is required, no more, no less - because of "foot dragging" in the talks, which resume this week. The AFA summed up the last round of negotiations as "another boring, unproductive, annoying week."
American Trans Air's traffic fell 7.8% in October from the same month in 1995, to 573.8 million revenue passenger miles from 622.1 million, on 5.9% less capacity. Available seat miles totaled 872.5 million and the load factor declined 1.3 percentage points to 65.8%. American Trans Air flew 8.1% fewer passengers during the month, at 347,175. Its RPMs in October for scheduled service fell 12.4% on 2.7% less capacity, producing a seven- point drop in the load factor. Charter service block hours decreased 6.8%.
The resignation of all members of the board of Canadian Airlines' operating company, Canadian Airlines International Ltd., is being called "intimidating" by Canadian Auto Workers, which represents 4,000 of the airline's 16,400 workers.
DOT Secretary Federico Pena led a U.S. delegation to an economic forum in Spain Nov. 14-18. The meeting of government, business and academic leaders covered numerous items, including a general discussion on an open skies pact. Pena traveled to Paris last night to meet with Anne Marie Idrac, secretary of state for transport, and Bernard Pons, minister of equipment, transport and tourism.
