AIRLINE NEWS
Thursday, October 30, 2008
Passengers stranded as budget airline collapses
Hundreds of passengers were stranded at a major holiday airport today after flights were cancelled following the financial collapse of Denmark-based budget carrier Sterling Airlines.
guardian.co.uk
guardian.co.uk
Lufthansa takes control of Britain's BMI
Britain's BMI is being taken over by the German flag carrier Lufthansa in the latest shake-up in the European airline industry.
Lufthansa, which already owns just under 30% of BMI, has bought the 50% owned by BMI chairman Sir Michael Bishop, taking its stake to 80%. The remaining 20% of BMI is owned by Sweden-based Scandinavian Airlines, which has said it also wants to sell.
guardian.co.uk
Lufthansa, which already owns just under 30% of BMI, has bought the 50% owned by BMI chairman Sir Michael Bishop, taking its stake to 80%. The remaining 20% of BMI is owned by Sweden-based Scandinavian Airlines, which has said it also wants to sell.
guardian.co.uk
Monday, October 27, 2008
US Airways reports $865 million 3Q loss
US Airways Group Inc. said Thursday it lost $865 million in the third quarter as the carrier struggled with an up-and-down swing in fuel prices. Its shares dropped nearly 16 percent as oil prices rose.
The loss was the worst among the major carriers during the July-through-September quarter, topping United parent UAL's $779 million loss reported earlier this week.
Oil prices dominated the Tempe, Ariz.-based carrier's balance sheet and swung it to a loss for the fourth straight quarter. Fuel was not only the carrier's biggest expense, but US Airways took a second hit in fuel hedging as oil prices dropped from their July peak of $147 per barrel.
Chairman and CEO Doug Parker bemoaned the "crippling fuel price environment that US Airways and other airlines faced this summer," and told analysts that the carrier still does not know how the recent financial crisis will affect the travel habits of its customers.
The silver lining for airlines is the effect a souring economy has in forcing down the price of oil. Every dollar drop in oil prices equates to about a $40 million decrease in annual fuel expenses, Parker said.
So far, US Airways has noticed during the past month a slowdown in bookings to leisure destinations and other bookings made 60 days or more in advance. But its aircraft are not close to being left empty. US Airways has cut so much seating capacity this year that its planes are expected to be even more loaded this month than the same period last year, President Scott Kirby said.
Meanwhile, US Airways has been busy boosting revenue with extra fees for drinks, checked luggage and for popular seats in part of its coach sections. The company expects its "a la carte" travel fees will bring in an extra half billion dollars in 2009.
The new charges have been met with grumbles from passengers around the country. But Parker said they could make traveling on US Airways "a more comfortable and civil environment."
For example, since US Airways started charging $25 to check a second bag earlier this year, it's noticed a 40 percent drop in passengers doing so. With fewer bags in the system, the carrier no longer has so much trouble mishandling bags.
Another example: Parker said flight attendants are noticing a huge drop off in people ordering sodas, now that the carrier has started charging $2 per drink.
The benefit?
"We're seeing carts not staying in the aisle for the bulk of the flight," Parker said "leaving much more time for people to get up and go about the cabin at their leisure.
"And giving our flight attendants much more time to move up and down the aisle and take care of the customer needs as they arise," he said.
US Airways shares fell $1.35, or 15.9 percent, to close at $7.14 Thursday.
Ray Neidl, an airline analyst with Calyon Securities, agreed that US Airways finds itself in a strong financial position. Soaring oil prices forced it to trim the fat out of its network well before the financial meltdown on Wall Street, he said.
"Usually, airlines get blind-sided when a recession comes," Neidl said. "These guys had their recession earlier this year with oil costs, and they were well prepared for this."
For the quarter, US Airways said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Revenue was up 7.4 percent to $3.26 billion for the three-month period that ended Sept. 30.
Without special charges of $623 million, including a $488 million loss in fuel hedging, its third-quarter loss would be $242 million or $2.35 per share. Analysts surveyed by Thomson Reuters, who usually exclude one-time items, expected a loss of $2.54 per share on revenue of $3.26 billion.
Fuel was again the biggest expense for US Airways. It paid $1.1 billion in aircraft fuel and related expenses for the quarter, up 60.4 percent from the previous year.
In a separate announcement Wednesday, the carrier said it raised $950 million of financing and near-term liquidity commitments.
It will use $400 million of that to prepay its $1.6 billion bank debt facility and lower its minimum required unrestricted cash balance to $850 million from $1.25 billion. The move will give the carrier greater financial flexibility, which has been a major issue for analysts and credit rating agencies.
Chief Financial Officer Derek Kerr said US Airways has raised or secured about $1.2 billion in cash and payment deferrals since its second quarter earnings were announced.
Source: news.google.com
The loss was the worst among the major carriers during the July-through-September quarter, topping United parent UAL's $779 million loss reported earlier this week.
Oil prices dominated the Tempe, Ariz.-based carrier's balance sheet and swung it to a loss for the fourth straight quarter. Fuel was not only the carrier's biggest expense, but US Airways took a second hit in fuel hedging as oil prices dropped from their July peak of $147 per barrel.
Chairman and CEO Doug Parker bemoaned the "crippling fuel price environment that US Airways and other airlines faced this summer," and told analysts that the carrier still does not know how the recent financial crisis will affect the travel habits of its customers.
The silver lining for airlines is the effect a souring economy has in forcing down the price of oil. Every dollar drop in oil prices equates to about a $40 million decrease in annual fuel expenses, Parker said.
So far, US Airways has noticed during the past month a slowdown in bookings to leisure destinations and other bookings made 60 days or more in advance. But its aircraft are not close to being left empty. US Airways has cut so much seating capacity this year that its planes are expected to be even more loaded this month than the same period last year, President Scott Kirby said.
Meanwhile, US Airways has been busy boosting revenue with extra fees for drinks, checked luggage and for popular seats in part of its coach sections. The company expects its "a la carte" travel fees will bring in an extra half billion dollars in 2009.
The new charges have been met with grumbles from passengers around the country. But Parker said they could make traveling on US Airways "a more comfortable and civil environment."
For example, since US Airways started charging $25 to check a second bag earlier this year, it's noticed a 40 percent drop in passengers doing so. With fewer bags in the system, the carrier no longer has so much trouble mishandling bags.
Another example: Parker said flight attendants are noticing a huge drop off in people ordering sodas, now that the carrier has started charging $2 per drink.
The benefit?
"We're seeing carts not staying in the aisle for the bulk of the flight," Parker said "leaving much more time for people to get up and go about the cabin at their leisure.
"And giving our flight attendants much more time to move up and down the aisle and take care of the customer needs as they arise," he said.
US Airways shares fell $1.35, or 15.9 percent, to close at $7.14 Thursday.
Ray Neidl, an airline analyst with Calyon Securities, agreed that US Airways finds itself in a strong financial position. Soaring oil prices forced it to trim the fat out of its network well before the financial meltdown on Wall Street, he said.
"Usually, airlines get blind-sided when a recession comes," Neidl said. "These guys had their recession earlier this year with oil costs, and they were well prepared for this."
For the quarter, US Airways said it lost $8.45 per share, compared with a profit of $177 million, or $1.87 per share, in the same period last year. Revenue was up 7.4 percent to $3.26 billion for the three-month period that ended Sept. 30.
Without special charges of $623 million, including a $488 million loss in fuel hedging, its third-quarter loss would be $242 million or $2.35 per share. Analysts surveyed by Thomson Reuters, who usually exclude one-time items, expected a loss of $2.54 per share on revenue of $3.26 billion.
Fuel was again the biggest expense for US Airways. It paid $1.1 billion in aircraft fuel and related expenses for the quarter, up 60.4 percent from the previous year.
In a separate announcement Wednesday, the carrier said it raised $950 million of financing and near-term liquidity commitments.
It will use $400 million of that to prepay its $1.6 billion bank debt facility and lower its minimum required unrestricted cash balance to $850 million from $1.25 billion. The move will give the carrier greater financial flexibility, which has been a major issue for analysts and credit rating agencies.
Chief Financial Officer Derek Kerr said US Airways has raised or secured about $1.2 billion in cash and payment deferrals since its second quarter earnings were announced.
Source: news.google.com
Labels: loss, US Airways
Sunday, October 26, 2008
Europe Forcing Airlines to Buy Emissions Permits
BRUSSELS - European Union governments gave formal approval Friday to a potentially costly system of capping greenhouse gases from any airline flying into or out of the trade bloc - just as the airline industry reported new evidence of the impact of a worsening economy.
nytimes.com
nytimes.com
Saturday, October 18, 2008
Spanish airline LTE suspends services
The Spanish low-cost airline LTE said Friday that it was suspending services because it could not cover the cost of operating.
A statement on its Web site Friday said the 20-year-old company with bases in Palma de Mallorca, the Canary Islands and Milan, Italy was "doing everything to minimize the impact of this suspension of services on its clients and providers."
It added that "it just was not possible to avoid this situation given world events lately."
The company which runs flights from Spain to England, Italy and Saudi Arabia, has 300 employees and a fleet of seven Airbus 320s.
iht.com
A statement on its Web site Friday said the 20-year-old company with bases in Palma de Mallorca, the Canary Islands and Milan, Italy was "doing everything to minimize the impact of this suspension of services on its clients and providers."
It added that "it just was not possible to avoid this situation given world events lately."
The company which runs flights from Spain to England, Italy and Saudi Arabia, has 300 employees and a fleet of seven Airbus 320s.
iht.com
Friday, October 17, 2008
Air India seeks to cut costs by offering unpaid leave to workers
Air India, the state-owned carrier, yesterday admitted it was seeking to pare its workforce by up to 50 per cent, as state oil officials accused India's two biggest private airlines of defaulting on $21m in jet fuel bills.
In the latest reflection of the gravity of the crisis facing India's airline industry, Raghu Menon, chairman and managing director of Air India, said the company would allow 15,000 of its workers to apply to go on unpaid leave for a period of three to five years.
The carrier, which has about 145 aircraft, has almost 33,000 employees, giving it one of the highest staff-to-aircraft ratios of any airline. But the carrier is trying to slash its wage bill, as it faces an estimated $800m in losses in the current financial year. Of its 33,000 employees, about 18,000 are involved in essential operational areas, while another 15,000 hold office jobs.
Jet Airways, India's biggest and most established private carrier, this week began cutting 1,900 of its 13,000 workers to "save the company" in the face of declining passenger traffic and rising costs.
However, sacking workers from a state enterprise is a tougher proposition, given politicians' reluctance to tangle with powerful state labour unions.
Kapil Kaul, chief executive for the Centre for Asia Pacific Aviation, said: "The question of lay-offs in Air India is wishful thinking." He estimated that the state carrier is 50 per cent over-staffed.
Air India said no employees would be laid off or forced to go on leave.
"The company is looking at many means of cost-cutting, including a scheme whereby employees of the company - if they so choose to do so, on a purely voluntary basis - can avail of three to five years' leave," it said.
But Air India admitted that only a handful of its employees were likely to take up the invitation.
Air India's admission of its desire to cut staff comes amid tension in the government over how to help ailing air carriers, which are reeling from declining passenger traffic and rising costs.
Private carriers have called for a reduction in heavy taxes in jet fuel to help them survive the squeeze of declining traffic and higher costs. But Murli Deora, India's petroleum minister, said carriers should first clear their outstanding bills to state-owned oil companies. Mr Deora said Jet and Kingfisher, India's two biggest private carriers, owe a combined $21m to Indian Oil Corp.
Source: ft.com
In the latest reflection of the gravity of the crisis facing India's airline industry, Raghu Menon, chairman and managing director of Air India, said the company would allow 15,000 of its workers to apply to go on unpaid leave for a period of three to five years.
The carrier, which has about 145 aircraft, has almost 33,000 employees, giving it one of the highest staff-to-aircraft ratios of any airline. But the carrier is trying to slash its wage bill, as it faces an estimated $800m in losses in the current financial year. Of its 33,000 employees, about 18,000 are involved in essential operational areas, while another 15,000 hold office jobs.
Jet Airways, India's biggest and most established private carrier, this week began cutting 1,900 of its 13,000 workers to "save the company" in the face of declining passenger traffic and rising costs.
However, sacking workers from a state enterprise is a tougher proposition, given politicians' reluctance to tangle with powerful state labour unions.
Kapil Kaul, chief executive for the Centre for Asia Pacific Aviation, said: "The question of lay-offs in Air India is wishful thinking." He estimated that the state carrier is 50 per cent over-staffed.
Air India said no employees would be laid off or forced to go on leave.
"The company is looking at many means of cost-cutting, including a scheme whereby employees of the company - if they so choose to do so, on a purely voluntary basis - can avail of three to five years' leave," it said.
But Air India admitted that only a handful of its employees were likely to take up the invitation.
Air India's admission of its desire to cut staff comes amid tension in the government over how to help ailing air carriers, which are reeling from declining passenger traffic and rising costs.
Private carriers have called for a reduction in heavy taxes in jet fuel to help them survive the squeeze of declining traffic and higher costs. But Murli Deora, India's petroleum minister, said carriers should first clear their outstanding bills to state-owned oil companies. Mr Deora said Jet and Kingfisher, India's two biggest private carriers, owe a combined $21m to Indian Oil Corp.
Source: ft.com
Labels: Air India
Saturday, October 11, 2008
Thousands of flights scrapped by airlines
More than 46 million airline seats will be cut over the next three months as the aviation industry is engulfed by the economic crisis.
The latest figures compiled by OAG (Official Airline Guide) show that demand for travel is shrinking throughout the world. Carriers plan to operate half a million fewer flights between October and December compared with the same period last year.
telegraph.co.uk
The latest figures compiled by OAG (Official Airline Guide) show that demand for travel is shrinking throughout the world. Carriers plan to operate half a million fewer flights between October and December compared with the same period last year.
telegraph.co.uk
Labels: passengers
Sunday, October 05, 2008
Thousands hit by V Australia delay
Passengers get new flights after Virgin delays. Virgin Blue has been forced to reschedule thousands of passengers booked over the Christmas-New Year period after it delayed the launch of its long-haul carrier, V Australia, by three months.
As foreshadowed in the Herald last week, V Australia's plans to begin flying between Sydney and Los Angeles on December 15 have been postponed until February 28 because of likely delays to the delivery of its first three aircraft due to a strike in the US.
smh.com.au
As foreshadowed in the Herald last week, V Australia's plans to begin flying between Sydney and Los Angeles on December 15 have been postponed until February 28 because of likely delays to the delivery of its first three aircraft due to a strike in the US.
smh.com.au
Labels: strike, V Australia
Saturday, October 04, 2008
Fewer fly on US airlines, more flights on time
Flight and route cuts by major U.S. airlines during summer fuel price spikes helped carriers save money and improve on-time performance, the U.S. Transportation Department said on Thursday.
The 19 biggest commercial airlines flew 60 million passengers in August, three million fewer than the same period a year ago.
On-time performance for the industry was 78.4 percent, up about 7 percent from last year and the best on-time performance for August since 2003.
Cancellations were also down.
Better weather helped to improve airline performance in August as did more efficient operations of connecting service.
August is the last peak air travel month of the summer season, so industry usually improves its on-time record in the fall.
Source: reuters.com
The 19 biggest commercial airlines flew 60 million passengers in August, three million fewer than the same period a year ago.
On-time performance for the industry was 78.4 percent, up about 7 percent from last year and the best on-time performance for August since 2003.
Cancellations were also down.
Better weather helped to improve airline performance in August as did more efficient operations of connecting service.
August is the last peak air travel month of the summer season, so industry usually improves its on-time record in the fall.
Source: reuters.com
Labels: US
