Granted orally to LanChile authority to serve Bogota, Colombia/Cancun, Mexico/Montego Bay, Jamaica/Punta Cana, Dominican Republic, as additional intermediate points on the carrier's existing authority to operate combination service between a point or points in Chile and Miami. Granted orally to Korean Air Lines authority to engage in scheduled all-cargo service between Seoul and Portland, Ore., via Los Angeles and Anchorage.
DOT is inviting certificate and/or frequency applications from U.S. carriers for scheduled combination or all-cargo services between the U.S. and South Africa. The two countries hammered out an agreement late last month, allowing for a five-year phase-in of expanded services (DAILY, April 2). Carriers from both countries will be allowed to operate 11 weekly passenger flights during the first year, increasing to 21 by the fifth year. Each side will begin with four all-cargo frequencies, increasing to nine over the phase-in period. Currently, U.S.
Export-Import Bank said it authorized financing to support the $122 million sale of a 737-400 and a 767-300 freighter to Asiana Airlines. Ex-Im Bank's $106.8 million long-term guarantee will be structured as an asset-based financing in which the aircraft will be collateral. The credit also will be guaranteed jointly by the three main operating subsidiaries of the Kumho Group, which owns 75% of Asiana.
SAS issued a 40-page report detailing its efforts to protect the environment. "It is SAS's goal to report on the environmental effects of our operations as fully as possible," said President Jan Stenberg. The impact of flight operations can be monitored, he said, but better systems are needed to measure effects of cabin and ground operations. "My ambition is that over the next three years we will develop an environmental report which meets international quality requirements."
FAA will be "very specific" about functional requirements under its April 1 acquisition reforms but will be "moving away from specifying precisely" how requirements must be met, says Dennis DeGaetano, director of acquisitions. This will mean more communication with industry in pre-contract and proposal stages, he says.
Delta has more restructuring to do, and that will mean more charges against earnings.The carrier has warned Wall Street that it will write off as much as $300 million in the June quarter, the last of its fiscal year, to cover the cost of an early retirement plan for pilots. Last week, Delta announced a $276 million net loss for the January-March quarter after a $556 million restructuring charge.
Smiths Industries reported revenue increased 13% in the first quarter to $727.3 million from $653.5 million, while before-tax profit rose 19% to $108.4 million from $92 million.
Allied Pilots Association at American, saying it is "incredulous and insulted" by a management contract proposal seeking 2% pay cuts - like those at Delta - submitted a counterproposal asking for 5% pay raises and retroactive pay in light of the airline's financial performance, and of upper management's recent raises, bonuses and stock options.
In an effort to cut airline costs of complying with federal rules, DOT is allowing carriers to file international passenger tariff rules electronically. DOT estimates the change will save the airline industry about $1.6 million annually in submission, printing and distribution cost, while reducing the department's review, filing and storage expenses. "Shrinking the regulatory burden on business is one of President Clinton's highest priorities," said DOT Secretary Federico Pea. The airline industry files about 51,000 pages of tariff rules per year, according to DOT.
Indian national carrier Air-India suffered a net loss of about 2 billion rupees, or $57 million, during fiscal 1995 ending March 31, 1996, despite sales of more than $1 billion, Air-India officials said this week. The airline's financial experts attributed the loss to costs totaling nearly $85.7 million related to depreciation and interest payments.
American Eagle Simmons is pulling out of Muskegon, Mich., July 1 despite attempts by the city to negotiate revenue guarantees for the carrier. It is the second Michigan city to lose air access to Chicago O'Hare in two months - Simmons will leave Flint May 1 - and officials fear more communities will follow as Eagle uses its Chicago slots for increased frequencies in larger markets.
Delta Air Lines, Inc. yesterday reported record earnings for the January- to-March quarter, the third of its fiscal year, but a $556 million restructuring charge left the carrier with operating and net losses for the period. With the charge, Delta suffered a $387 million operating loss and a $276 million net loss for the quarter. Without the charge, it would have generated operating earnings of $169 million and net earnings of $63 million. The performance compares with an operating profit of $40 million and a net loss of $11 million in the same quarter in 1995.
Inter-Canadien this summer will increase its services to various tourist destinations in Quebec, reintroducing June 22 its service to Goose Bay and its direct service between Quebec and the Iles-de-la-Madeleine, the carrier said. Inter-Canadien is Canadian Airlines International's regional affiliate in Quebec province.
BE Aerospace said it has received a $24 million order from Malaysia Airlines to equip 25 new 777s and 747s with business and coach seating. Chairman Amin Khoury said BEA's backlog, including the latest order, is a record $475 million, "which has set the stage for a turnaround in profitability." He also said charges incurred developing BEA's MDDS interactive entertainment system, now in operation on a British Airways 747-400, will be expensed as incurred. This will result in a writedown of about $60 million, he said.
Atlantic Coast Airlines hourly employees will receive their first quarterly profit-sharing checks May 1 - $375 each. The payment is based in part on the company's meeting its operating-margin goal for the quarter plus established goals contained in its United Express code-sharing agreement for on-time performance, completion factor and baggage performance. The latter three categories are incremental, and a perfect report card for the quarter would yield $600 per employee.
CASA has chosen AlliedSignal Aerospace's TPE331-12 turboprop engines to power its new 212-400 aircraft, AlliedSignal reported. Value of the deal was placed at about $54 million. The engines will give CASA 212 operators "increased performance," AlliedSignal Engines President Greg Summe said. "The engines will improve operations in high-altitude, hot conditions." Potential markets for the CASA 212-400 are light military transport, government agencies and cargo.
Brazilian aircraft manufacturer Embraer won agreement from its employees to a cost-cutting plan that includes eliminating hundreds of administrative and support positions, cutting salaries and shortening work schedules, the company said. It was the first such employee vote in the company's history, Embraer President Mauricio Novis Botelho said, with "80% of our staff voting in favor of it."
Sen. John McCain (R-Ariz.) confirmed in public yesterday the suspicions of many aviation lobbyists: the battle over FAA user fees may be waged on the fiscal 1997 DOT appropriations bill. At a Senate Commerce Committee hearing on rural air service, McCain, chairman of the aviation subcommittee, addressed the controversy surrounding his FAA reform bill (S.1239), saying that Senate Appropriation Committee Chairman Mark Hatfield (R-Ore.) supports the proposed user fees.
Montreal-based Bombardier earned a net profit of C$153.8 million, or 45 cents per share, for the year ended Jan. 31, 1996, compared with $241.9 million in the previous fiscal period. Revenues jumped to $7.1 billion from $5.9 billion in the prior period.
Delta Connection affiliate Atlantic Southeast Airlines posted an $11.3 million net profit, or 36 cents per share, for the first fiscal quarter, ended March 31, an 18.2% increase from the $9.6 million, or 29 cents per share, earned in the same 1995 period. Revenues jumped 24.4% to $89.4 million from $71.9 million.
Consolidated Freightways reported a net loss of $1.9 million for the first quarter, compared with net income of $19.8 million in the same 1995 period. Revenues were up 2% to $1.3 billion. Results included "a series of severe winter storms across the nation approximating 15 cents per share and sharp price increases for diesel and jet fuel that equaled 10 cents per share," said Donald Moffitt, chairman. Emery Worldwide reported first quarter operating income of $11.5 million, a 12% decline from $13.1 million. Revenues rose 8.2% to $446.6 million.
The Pratt&Whitney Canada/MTU European Customer Support Center venture bought a 51% stake in South Africa-based Anglo-African Airmotive, which will be renamed and focused on supporting all P&WC engines in the region, the company said. The overhauler's part-owners - South Africa's National Airways Corp., or NAC, and Simera - will retain smaller stakes in the company, but it will be re-named Pratt&Whitney Canada CSC Africa Ltd.
American launched a summer fare sale pricing domestic and Canada tickets at an average of 40% off regular 21-day advance purchase excursion fares, and late-spring sales on flights to the U.K. and some in Mexico, the Caribbean, South America and Central America, ranging 15% to 25% off the lowest fare. Most major airlines said they would match in competitive markets. Fares are on sale until May 3 for travel through Sept. 13 for the U.S. and Canada, June 27 for the U.K. and June 15 for Mexico, the Caribbean and Latin America.
Machinists union has filed at the National Mediation Board for permission to mount an election for representation of USAir's passenger service employees. The union currently represents 16,000 mechanics and related employees, and fleet service workers, and a passenger service win would increase the total to 24,000. "Passenger service employees at USAir need union representation as the company faces difficult times," Machinists Transportation VP Bill Scheri said.
FAA moved quickly to resolve air traffic control equipment problems at Pittsburgh that cost USAir $2.5 million in delay-related expenses in a week's span (DAILY, April 25), according to Bill Jeffers, director of air traffic services at the agency. Jeffers said FAA commissioned a power conditioning system for the ASR-9 radar on April 13, nine days after the second of two ATC equipment failures that spurred USAir's complaint, as well as a battery power source for communications systems in the tower.
