Air Canada reduced unit costs and made several smart moves in managing fuel costs during the third quarter, leading it to a C$149 million (US$111 million) operating profit for the period. The figure represents the highest quarterly profit in the airline's history, excluding one-time expenses. Last year, Air Canada posted a C$182 million (US$136 million) profit, but it included a C$58 million (US$43 million) gain from selling Continental share warrants.
U.S. restrictions on foreign control of U.S. airlines are an exasperating issue in preliminary aviation negotiations between the European Commission and the U.S., according to the EC's director for air transport, Claude Chne. The restrictions, which limit foreign organizations to minority ownership and 25% voting control, drew comment from Chne at a meeting with reporters prior to talks at the State Department, in which the EC will explore prospects for a multilateral aviation agreement between the U.S. and all European Union member countries (DAILY, Oct. 30).
Third quarter record net income made United and its shareholders happy, but its flight attendants, who are not employee owners, will interpret the results their own way when contract talks resume Monday.As the Association of Flight Attendants sees it, the $437 million profit means the company raked in $5.1 million each day the flight attendants dragged their "weary bones" into another sub-par hotel, after enduring "crushing passenger loads" and circumstances "approaching sweatshop conditions."
In an action that may set a precedent, FAA is bringing in industry as a full partner in a major acquisition program to provide greater security at busy U.S. airports. The agency has formed a government-industry team to plan, purchase and install security equipment, including explosives detection systems, at the airports. Equipment procurement is expected to begin within 30 days and airport installations should begin in December.
Higher international revenues could not offset jet fuel price spikes and a weaker yen, causing Japan Airlines to post 39% lower operating profits and 71% less net income for the first half of its fiscal year, which ended Sept. 30. Net income for the period fell to $24.5 million on 6.9% higher revenues, $5.56 billion. The weaker yen, which also hurt U.S. carrier results, improved JAL's international revenues but reduced the number of international travelers from Japan.
State-owned domestic carrier Indian Airlines has decided to turn three of its divisions - engineering, cargo, and ground-handling - into wholly owned subsidiaries. The decision is subject to approval by India's civil aviation ministry, but IA management already has short-listed and is negotiating with three foreign airlines - Singapore, Malaysian and Lufthansa - in its search for an overseas financial and management consultant to facilitate the spinoffs.
At the end of 1995, majors led the U.S. airline industry's move toward a 100% Stage 3 fleet by the end of the 1990s, while national airlines' actually had a lower percentage of Stage 3 aircraft in their fleet at the end of 1995 than at the end of 1994. FAA's annual report on the Stage 2 phaseout rule shows that as of Dec. 31, 1995, majors led U.S. operators at 71.3%. The 67.4% Stage 3 domestic fleet, meanwhile, is surpassed by the 77.4% Stage 3 fleet operated by 173 non-U.S. carriers.
Thermedics Detection has received an FAA contract valued at more than $700,000 to develop a more portable explosives detection system designed for screening at airports, border crossings and other security checkpoints. Thermedics said it has more than 185 EGIS detection systems in the field, about half of them at 41 airports in 12 countries including the U.S., the U.K., Germany, Switzerland and Israel.
Eva Airways and Uni Airways took delivery yesterday of the first two of 10 MD-90 aircraft on order at Douglas Aircraft in Long Beach. The remaining aircraft will be delivered to the carriers, and to another domestic partner, Great China Airlines, by the start of 1998. Eva will operate its aircraft between Taipei and Tainan, and Uni Air will use them between Taipei and Kaohsiung. Uni Air will take delivery of two MD-90s in the last quarter of this year, two more in the first quarter of 1997 and its sixth in January 1998.
DOT has issued a request for proposals for Essential Air Service slots out of Chicago O'Hare, part of its $25.9 million EAS appropriation. Congress wants DOT to enable increased access to the hub for smaller communities. The fiscal 1997 appropriation also directs DOT to maximize EAS service though such methods as using exemption powers to combine EAS slots with some military slots and juggling schedules so that EAS subsidies are stretched further by using some less-expensive, off-peak military slots.
Hughes Aircraft, which last May won a $50 million interim contract to continue work on the Wide Area Augmentation System after FAA fired Wilcox, yesterday was awarded, as expected, $483.5 million to complete development and implement the program. The final contract follows the April 26 termination of the previous Wilcox contract under provisions of FAA's new procurement rules. Administrator David Hinson said yesterday that the "contract with Hughes exemplifies the FAA's commitment to a new way of doing business."
The U.S. and Brazil agreed in a new bilateral pact reached last week to give U.S. carriers 300 new cargo charter frequencies, which in addition to the 450 that were already to be allowed in the next cargo charter year, gives the U.S. a total of 750 (DAILY, Oct. 28).
National Transportation Safety Board said yesterday the probable cause of a Tower Air accident at New York Kennedy Airport on Dec. 20, 1995, was the "captain's failure to reject the takeoff in a timely manner." The aircraft, a 747, veered off the runway, injuring 24 passengers slightly and a flight attendant seriously. Inadequate slippery-runway procedures developed by Tower and Boeing, and "inadequate fidelity" of 747 flight training simulators for slippery-runway operations, were contributing factors, the board said.
U.S.-U.K. open skies proposals are back on the table now that the British have accepted a U.S. offer to restart discussions on a government-to- government level. John Byerly, State Department special negotiator for transportation affairs, who will head the U.S. delegation, said the two sides will meet Nov. 6 to "see where we are, and see if there is reason to go forward" with further negotiations involving industry representatives. The effort, seemingly spurred by the prospective strategic alliance between American and British Airways, stalled three months ago when U.S.
Tower Air's third quarter revenues and profits were hammered by weak results in both international and domestic service, causing the carrier to post a net loss of $1.6 million for the period, versus a net profit of $11.1 million in the same period last year. Tower's operating profit fell to $3.5 million from $21.1 million, and revenues were off 12% to $148.9 million. For the first nine months of the year, the carrier had a net loss of $6.8 million.
Negotiators from the European Commission and the State Department will meet today in Washington to explore issues surrounding creation of a North Atlantic open skies pact. The European Commission's director for air transport, Claude Chne, foresees a two-phase process dictated by limits on the commission's current negotiating mandate, however.
KLM yesterday said it would add a fuel surcharge to cargo shipments worldwide. The announcement follows the airline's decision to add a similar fuel tax on passenger fares (DAILY, Oct. 24). The surcharge will be "20 guilder cents per kilo," or the equivalent amount in local currency. The tax, effective Nov. 1, will apply to all air waybills issued by KLM Cargo. KLM said if fuel prices change, the surcharge "will be adjusted."
Aircraft shipments decreased nearly 12% in the third quarter and year-to- date shipments were up only 2.4%, according to the General Aviation Manufacturers Association.
TAP Air Portugal has ordered 18 A319s from Airbus, five of which can be converted into A320s. The carrier also took options on eight more single- aisle aircraft and will lease four A319s. The A319s are to be delivered between December 1997 and June 2000, replacing older-generation aircraft and making TAP an all-Airbus operator. TAP currently operates six A320s under leases, and five A310s and four A340s.
DOT has approved scheduled and charter service by Magadan Airlines (Mavial) for service from Russia to Anchorage and Seattle, but with restrictions reflecting objections by Alaska Airlines and United that the service would be an "illegal" code-sharing operation. Mavial previously asked to continue its operations in their current form until Jan. 30, at which time it will have transitioned fully into an independent operator from Aeroflot. But United and Alaska complained, saying flights carry both carriers' codes.
Southwest has inaugurated its service to Providence, R.I., from Baltimore/Washington, Chicago Midway, Nashville, Orlando and Tampa Bay. Southwest's $59 fare from Baltimore is 77% less than what is currently offered out of Boston Logan, the carrier said. The 14-day advance fare is $39.
Virgin Express will compete with itself after signing a wet-lease agreement with Sabena to take over the larger carrier's money-losing shuttle service between Brussels and London Heathrow.The Virgin Group also has holdings in Eurostar, the high-speed Brussels-London train that currently has a 52% share of passenger traffic between the two cities.
TWA is offering a five-day fare sale in domestic markets, including Toronto but excluding Honolulu and San Juan, and an international sale, excluding Lisbon, Tel Aviv and Riyadh. The domestic sale offers as much as 55% off the 21-day advance purchase fare and the international sale as much as 44% off. Reservations must be made by Nov. 1. International travel can begin immediately, except to Cairo, and must be completed by March 20, except for Toronto, which must be completed by Feb. 28. Domestic travel must begin Nov. 11 or later and be completed by Dec. 18.
Continental has increased its winter flying to Florida from Newark and will operate 49 daily flights, up from 42, between December and March. It is adding more flights to Tampa, Fort Lauderdale, West Palm Beach, Orlando and Fort Myers from other points. The new flights bring service to Orlando to 10 flights per day.
