Airline News

United Airlines to slash 7,000 jobs by 2009

noreply@blogger.com (iTravelnet news) — Tue, 22 Jul 2008 23:08:00 +0000

UAL's United Airlines, one of the world's largest carriers, said Tuesday that it would cut more than 7,000 jobs by the end of 2009 to stem losses from record fuel bills.

The reductions consist of 5,500 aircraft and airport workers and 1,500 previously announced salaried positions, UAL said in a statement. The Chicago-based carrier disclosed the cuts as it reported a second-quarter net loss of $2.73 billion to write down the value of assets.

UAL's deficit pushed the collective loss among the three biggest U.S. carriers to $5.22 billion, following last week's reports by AMR Corp.'s American Airlines and Delta Air Lines. Jet fuel averaged 80 percent more than a year earlier, outpacing fare increases and new fees.

"Our industry is challenged as never before by the unrelenting price of oil," Glenn Tilton, the chief executive, said in the statement.

Excluding $2.6 billion in charges for the writedown and severance, the loss was $151 million, or $1.19 a share, UAL said. Year-earlier earnings were $274 million, or $1.83 a share.

Source: iht.com

Air passenger strips, tries to get out

noreply@blogger.com (iTravelnet news) — Sun, 20 Jul 2008 04:23:00 +0000

An American Airlines flight has been diverted in mid-flight after a disturbed passenger stripped naked then tried to open an emergency exit.

Passengers on the Boston to Los Angeles flight today said the unidentified man had undressed in one of the plane's bathrooms before emerging naked in the cabin.

Other passengers told the man to return to the bathroom and get dressed, which he did.

But shortly after returning to his seat the man got up again and lunged for the emergency exit before being restrained by passengers and tied up.

The flight was diverted to Oklahoma City, where the man was taken into custody and placed under psychiatric evaluation, FBI spokesman Gary Johnson said.

The Boeing 757 was back in the air an hour later and landed without further incident in Los Angeles, said American Airlines spokesman Tim Smith.

As passengers left the plane in Los Angeles, several indicated they had taken the incident in stride.

Gillian Callaghan, who was travelling with her 12 year old son, said she never panicked because the flight crew seemed to keep things well under control. She said she felt sorry for the man.

"He was just having some troubles, confused, not a scary guy," she said.

Source: news.com.au

Qantas jet evacuated after bomb threat

noreply@blogger.com (iTravelnet news) — Sat, 19 Jul 2008 06:37:00 +0000

A bomb threat against a Qantas flight bound for Australia at Los Angeles International Airport overnight was a hoax, the airline says.

Qantas spokesman Lloyd Quartermaine said QF 12 with more than 350 passengers and crew was grounded but after an inspection it had been cleared to continue its journey to Sydney on Saturday night.

"It has been assessed as a hoax, but as a precaution Qantas worked with US authorities to inspect the aircraft so it can resume operation," Mr Quartermaine said.

The flight was supposed to depart Los Angeles at 10am (0300 AEST). The 347 passengers and 20 crew members were boarding at the time of the threat and had to get off, according to an LAX spokeswoman.

Passengers were taken to hotels.

Mr Quartermaine said a new flight had been organised for passengers and would leave Los Angeles at 11pm (1600 AEST) on Saturday.

He said Qantas had been told of the threat by US authorities but refused to comment on the nature of the threat.

FBI spokeswoman Laura Eimiller said agents searched the plane and the luggage for about six hours but found no explosives.

Detectives are now investigating who made the bomb threat.

Source: au.news.yahoo.com

go! airlines to charge $10 checked bag fee

noreply@blogger.com (iTravelnet news) — Wed, 16 Jul 2008 04:58:00 +0000

NEW YORK (Associated Press) - Passengers of go! airlines in Hawaii will soon be charged a $10 fee to check a bag for inter-island trips.

Phoenix based Mesa Air Group Inc., go!'s parent company, said Tuesday it is joining several other carriers charging for checked bags. Officials say the airline needs to find other sources of revenue to deal with a spike in fuel prices.

The bag fee will start Aug. 10. Passengers who bought tickets before July 10 will not be charged the new fee.

The carrier says it is also reducing fees for checking a second bag, to $17 from a previously announced $25. That fee applies to passengers who purchased tickets on or after June 25 for travel on or after July 15.

Source: money.cnn.com

Last Showing For US Airways' In-Flight Movies

noreply@blogger.com (iTravelnet news) — Thu, 10 Jul 2008 22:34:00 +0000

In-flight movies are the latest casualty in a long list of discontinued passenger perks that airlines have leveraged as a way to offset soaring jet fuel prices.

Late Wednesday, US Airways Group said it would remove in-flight entertainment systems on domestic flights starting in November. The systems eat into aircraft fuel supply since they weigh a whopping 500 pounds each, saving the airline some $10.0 million, annually. Shares of the Tempe, Ariz.-based airline operator lost 13 cents, or 5.0%, at $2.48 during mid-morning trading on Thursday.

US Airways said that while systems will remain on international flights and Hawaii-bound planes, roughly 200 aircraft will lose their systems. Spokesman Phil Gee said the company will test lighter, seat-back entertainment sets later in the year.

The surging price of jet fuel has forced airlines to eke profits out of passengers by charging for previously complementary services like baggage checks and in-flight meals and drinks.

Passengers aren't the only ones bearing the brunt the industry's budget woes. Airlines are aggressively slashing costs by cutting jobs and diluting employee benefits.

Northwest Airlines blamed high fuel prices for its decision to cut 2,500 jobs, charge $15 to check luggage, and enact fees ranging from $25 to $100 for travelers redeeming frequent-flier award tickets. American Airlines was the first to announce checked bag fees, which have since been employed by US Airways and United Air Lines. Both American and Delta Air Lines charge for frequent flier award redemption. US Airways is the first to eliminate in-flight entertainment systems.

Source: forbes.com

Southwest Air, WestJet to Create Marketing Alliance

noreply@blogger.com (iTravelnet news) — Tue, 08 Jul 2008 22:22:00 +0000

Southwest Airlines Co., the largest U.S. discounter, and Canada's WestJet Airlines Ltd. agreed to form an alliance by late 2009, giving the carriers access to routes outside their home markets.

Southwest, which only flies in the lower 48 states, would be able to book customers on WestJet flights to Hawaii, Mexico and the Caribbean and for ski trips in Canada through Calgary or Vancouver. The deal also advances WestJet's goal of expanding in the U.S. WestJet rose the most in more than three years in Toronto trading.

"This gives WestJet exactly what they need in terms of growing their trans-border flights," said Chris Murray, an analyst at CIBC World Markets in Toronto, who rates WestJet "market outperform." "The deal would make sense for Southwest to build its service into Canada, too."

The airlines aren't yet ready to announce routes, schedules or fares, Dallas-based Southwest said. Certain details of the agreement must be approved by the U.S. and Canadian governments, the airlines said.

Travelers will be able to purchase seats on WestJet flights through Southwest's Web site before the codeshare agreement takes effect.

Updating Computers

Southwest has said it should finish updating its computer systems next year to allow for international travel. The company has been searching for an alliance partner to replace the defunct ATA Airlines Inc., which had given Southwest passengers access to Hawaii.

"We are quickly moving forward with our plans to enter the international markets with WestJet," Southwest Chief Executive Officer Gary Kelly said in the statement.

WestJet flies to holiday destinations in the Bahamas, Barbados, Dominican Republic, Hawaii, Jamaica, Mexico and St. Lucia. Its continental U.S. routes include Newark, New Jersey, and vacation cities such as Las Vegas, Phoenix and Orlando, Florida.

"This is a defining moment for WestJet," CEO Sean Durfy said in the company's statement "We are delivering on our strategic plan with this announcement today."

WestJet, which began flying in 1996 and was founded on Southwest's no-frills model, offers a single economy-class cabin on all its flights.

Source: bloomberg.com

Singapore Airline seeks Australia-US access

noreply@blogger.com (iTravelnet news) — Mon, 07 Jul 2008 22:46:00 +0000

Singapore Airlines, in a submission to the government's National Aviation Policy Green Paper, said it believes the international air services policies of past governments have "not adequately balanced competing interests and that this has come at a cost to the tourism industry and consumer generally, through missed opportunities to capitalise on growth".

It singled out the so-called transpacific route between Australia and the US for particular criticism, saying that Australia's regulatory approach "maintains protection for Australian carriers, which is counter to its position of supporting open and free trade elsewhere."

The route is currently dominated by national carrier Qantas Airways and UAL Corp's United Airlines, due to a policy of only allowing Australian and US carriers to fly the route.

The Australian and US governments signed an open-skies agreement, allowing Australian or US-owned airlines to fly freely between the two countries, earlier this year. But the route is still closed to outside players such as Singapore Airlines.

"There is simply not enough competition on the transpacific route, with only Qantas and United Airlines servicing the route directly from Australia and fares are very high and uncompetitive as a result," Singapore Airlines said.

A third carrier, Virgin Blue, is finalising plans to fly between Australia and the US, via its V Australia unit, by the end of the year.

Protecting Qantas' interests is "serving only the interests of Qantas, not Australia's national interest, which depends on tourism growth," Singapore Airlines said.

Qantas operates around 50 services per week between Australia and Los Angeles, San Francisco and New York. United Airlines has around 14 weekly services, while Hawaiian Airlines flies three times per week between Honolulu and Sydney.

Singapore Airlines said it is a "long-term player in the Australian market" and has a "keen interest" in developing a strong relationship with the new Australian government.

The airline has long coveted access to the lucrative transpacific route and had hoped a change in government in Australia last November would see a softening of opposition to its ambitions.

Australian Transport Minister Anthony Albanese said in February that his government has no immediate plans to grant foreign carriers access to the Australia to US route and would only consider it if it was deemed in the interests of Australian travellers and the economy.

The Victorian government, in a separate submission, also called on the federal government to grant Singapore Airlines and other "third country" airlines access to the Australia to US route.

It said that, despite the recent open skies agreement with the US, establishing new services to Australia is not a high priority for US airlines. It wants the government to set a timetable for allowing Singapore Airlines and other international carriers access to the route.

Source: www.theaustralian.news.com.au

Air France-KLM Trims Capacity Growth Plans

noreply@blogger.com (iTravelnet news) — Mon, 07 Jul 2008 22:36:00 +0000

Air France-KLM Monday responded to soaring fuel costs by scaling back its capacity growth expectations for this winter and next summer, although it's still faring better than many of its U.S. and European rivals.

In a press release, the world's biggest airline by revenue said it now expects capacity for both this winter and next summer to be 2% up on the year. It didn't say what its previous expectations were, but a spokeswoman told Dow Jones Newswires it had cut back on its planned capacity expansion in response to higher fuel bills.

The move came amid speculation that Air France-KLM would have to follow the lead of many of its rivals and cut capacity from this fall in response to record fuel prices and weakening economies. In Europe, several airlines, including big rival British Airways, have said they will cut capacity. U.S. airlines have been even more drastic. American Airlines plans to cut 12% of capacity in the fourth quarter.

On the back of soaring oil prices, jet fuel prices have shot up to over $1,300 a metric ton from $850 a ton at the start of the year. Fuel is now typically either the top or second-highest single cost item for network airlines, representing some 34% of the cost base, according to the International Air Transport Association.

The trade body last month warned that airlines could turn in a combined net loss of $6.1 billion this year if the oil price remained at $135 for the rest of the year or a loss of $2.1 billion at an average 2008 price of $107.

Despite the planned capacity cuts starting this fall, many airlines are still enjoying passenger growth this summer. U.S. airlines last week reported passenger growth in June as travelers made good on their summer vacation plans, and several of Europe's big carriers Monday also reported growth.

Air France-KLM said traffic in June, measured in revenue passenger kilometers, was up 2.6% on the year. The number of passengers carried rose 1.3% to 6.8 million, from 6.7 million, although its load factor, a measure of how full seats were, fell to 81.5%, from 82.7%, because capacity was up 4.1%.

The Franco-Dutch airline said last year's figures had been boosted by two important trade shows in Paris, while this year's figures were hit by an air traffic control strike at Paris Orly airport.

Its cargo operations fared less well, with traffic down 1.5% and capacity up 1.8%.

One of Europe's major short haul budget airlines, easyJet, said it carried just over 4.1 million passengers in June, compared with 3.4 million a year earlier. The 19.5% rise is due mainly to the acquisition of GB Airways from British Airways, but analysts said the figures were solid.

The carrier's load factor rose slightly to 86.9%, from 86.8% a year earlier. It said that total revenue per seat continues to improve and nearly 70% of seats for the second half of this year have already been sold.

Irish airline Aer Lingus, meanwhile, said it carried 7.6% more passengers on the year in June, with short haul numbers up 7.8% and long haul numbers up 6.7%. Load factors fell slightly, to 81.% on short haul and 82.1% on long long haul, but the airline had increased capacity 13.8% and 12.8% on the year, respectively.

Source: money.cnn.com

BA to seek clearance for AA and Iberia merger

noreply@blogger.com (iTravelnet news) — Thu, 03 Jul 2008 23:01:00 +0000

British Airways is said to be close to seeking clearance from competition authorities for a three-way operational merger with American Airlines (AA) and Iberia.

The deal would allow the companies to combine nearly all aspects of their operations, including sales, purchasing and marketing, leading to lower costs and greater economies of scale. Legal sources in the United States said that a submission to the US Department of Transport was expected as soon as next week.

The operational partnership may also provide a foundation for a full merger of the carriers should foreign ownership rules in the United States and Spain change. BA said two months ago that it was in talks with AA and Continental, another American carrier, about creating an alliance, but Continental has since walked away.

BA and AA have continued their discussions and are believed to have invited Iberia - in which BA has a 13 per cent stake - to be the third member. BA said last night that its talks with AA were continuing but a decision had yet to be made.

If BA and AA do seek regulatory approval to merge their operations, it would be their third attempt, having been blocked by regulators in 1998 and 2001. The authorities in Britain and America were concerned that the

two carriers would have a dominant position on many North Atlantic routes and demanded that the airlines sell Heathrow slots to reduce their traffic.

However, sources familiar with BA's discussions said that the airline was more optimistic of gaining approval this time because of the liberalisation of air travel rules between Europe and the US. In addition, the dire state of the airline sector, which is striving to cope with high fuel prices, may force regulators to accept the deal.

AA lost $328 million (£164.7 million)and Iberia €28.3 million (£22.5 million) in the first quarter of this year. BA has given warning that it may struggle to stay profitable this year.

An analyst said: "There is a lot of pressure on BA and AA to do this deal and cut costs. It's inevitable." Another added: "Including Iberia makes sense, as it would give the alliance a strong position across both the North and South Atlantic."

Meanwhile, BA said yesterday that it had bought L'Avion, a French business-class only airline, for £54 million. L'Avion is the last of the survivors of the rush two years ago to launch all-business-class transatlantic services. Silverjet, MaxJet and Eos have all gone out of business.

L'Avion will be merged with BA's new OpenSkies service, which flies from Paris to New York. The purchase price includes L'Avion's £26million in cash and two Boeing 757 aircraft.

Source: business.timesonline.co.uk

British Airways Lands L'Avion

noreply@blogger.com (iTravelnet news) — Wed, 02 Jul 2008 23:16:00 +0000

Small-sized airlines are dropping out of the skies as record oil prices take their toll, giving British Airways a choice opportunity to boost its own tiny transatlantic venture.

The British carrier said on Wednesday it had bought a two-plane airline from France, called L'Avion, for a total cost of $107.6 million. The small deal will bolster British Airways' OpenSkies subsidiary, which launched last month with only one plane; once regulatory authorities clear the purchase, the carrier will run three daily flights between Newark and Paris Orly.

Shares in British Airways fell 1.7%, to 204 pence ($4.06), during afternoon trading in London, in line with the sector.

"The driver behind this is that the long-term survival of L'Avion is doubtful," said Geoff van Klaveren, analyst with Exane BNP Paribas. The privately-held business-class airline is reportedly unprofitable, which would not be surprising given the record price of fuel and the decline in demand for air travel.

The chief executive of L'Avion, Marc Rochet, said that the financial health of L'Avion was excellent; he told Forbes.com that the airline's cash position prior to the buy-out was 33 million euros ($52.4 million). His airline certainly has met a better fate than some: British business-class carrier Silverjet collapsed into bankruptcy last month, sacking all 420 staff. American equivalents like MAXjet Airways and EOS had filed for bankruptcy before then. (See "No Silver Lining For Silverjet")

A spokesperson for British Airways said that its OpenSkies venture hoped to reach profitability within the first three years of operation, and that the new acquisition did not change the time-frame.

Although there are almost no airlines similar to L'Avion available to whet British Airways' appetite going forward, the difficult business environment will likely see more carriers collapse into the arms of larger rivals.

"It's certainly an example of consolidation in the European industry," said Douglas McNeill, analyst with Blue Oar Securities. "My view would be that there will lots more to come."

Source: forbes.com

Delta Adds Fuel Fee to Frequent-Flier Tickets

noreply@blogger.com (iTravelnet news) — Sat, 28 Jun 2008 00:36:00 +0000

In the latest fee to hit the airline industry, Delta Air Lines said Friday that it planned to begin charging a fuel surcharge of up to $50 for booking frequent-flier tickets under its awards program.

Delta is not the first airline to charge a fee for previously free tickets, but it is specifically attributing the step to the soaring cost of jet fuel.

The new fee takes effect on tickets booked on or after Aug. 15. Delta will charge a $25 fuel surcharge on tickets booked within the United States, and $50 on tickets booked for travel elsewhere, including the Caribbean, the United States Virgin Islands, Latin America and other international destinations.

Jet fuel prices have risen 83.6 percent in the last year, according to the International Air Transport Association, the global industry’s trade group. Airlines have responded with a variety of fees and charges for a range of previously free features, from checking luggage to beverages.

Jeff Robertson, managing director of Delta’s SkyMiles program, said the increase in fuel was "causing considerable financial stress to Delta’s business."

He called the step "a difficult but essential decision in the face of record-high fuel costs."

"We hope this is temporary," Mr. Robertson said, "and should fuel prices subside from current levels, we will re-evaluate this surcharge."

Mr. Robertson also said Delta would introduce a "new, multitiered award program" in the next 60 days but gave no details. Industry analysts have predicted that airlines might increase the number of miles required for a frequent-flier ticket.

Many carriers are grounding planes and eliminating flights in an effort to handle their higher fuel costs, meaning that they have fewer seats. Airlines control their inventories of free seats, and generally do not disclose how many are available on a given flight.

This month, American Airlines began charging $5 to book frequent-flier tickets. Meanwhile, US Airways will charge up to a $50 processing fee for frequent-flier tickets booked on or after Aug. 6.

Northwest Airlines said it would cancel two international routes, and suspend another until spring. Northwest is dropping its flight between Detroit and Düsseldorf, Germany, and another between Hartford and Amsterdam. The airline also is suspending a flight between Minneapolis and Paris until March.

Northwest and Delta announced merger plans in April. The carriers hope to receive federal approval before the end of the year.

Source: nytimes.com

United to lay off 950 pilots, slash fleet

noreply@blogger.com (iTravelnet news) — Fri, 27 Jun 2008 06:28:00 +0000

UNITED Airlines, the only US carrier offering non-stop flights between Australia and the US mainland, will lay off 950 pilots and reduce its fleet by 100 aircraft as the airline industry reels from the effect of high fuel prices.

The decision by a major carrier to lay off about 15 per cent of its pilots comes as US aviation experts, including former American Airlines chief Bob Crandall, warn that at least one big airline may go under.

It also comes as a US House Committee is due to discuss a report by the Business Travel Coalition warning that airline liquidations could cripple the US economy, costing between 30,000 and 75,000 direct jobs and resulting in payroll losses of $US2.3-6.7 billion ($2.4-7 billion).

The report predicts that losses would ripple through communities, endanger businesses that depend on airlines, devastate tourism and affect businesses that rely on just-in-time freight.

It also forecasts a decline in business activity because of disruption to travel, falling tax revenues and increased government outlays in areas such as unemployment benefits.

Another study, by Airline Forecasts, says oil prices of $US130-140 a barrel could result in the loss of 75,000 to 80,000 jobs, including about 11,500 pilots.

United's announcement this week came on top of a previous announcement that it would slash fleet operations and up to 1100 salaried and management jobs to offset higher fuel bills and a weakening US economy. Those lay-offs, from a workforce of about 55,000, were in addition to 500 already announced.

The airline plans to slash domestic capacity by 14 per cent by the fourth quarter of this year and total capacity by 8 per cent.

Over 2008-09, cumulative mainline domestic capacity will be reduced by 17-18 per cent and consolidated capacity by 9-10 per cent.

This involves retiring an additional 70 older aircraft, on top of 30 already targeted, and shrinking the fleet to about 360 planes by next year.

The retirements involve all 94 of its Boeing 737s and six Boeing 747s.

"As we reduce the size of our fleet and take actions companywide to enable United to compete in an environment of record fuel prices, we must take the difficult, but necessary step to reduce the number of people we have to run our business," the airline said.

In a message to the aviators, Keith Rimer, the airline's chief pilot, said that because of the number of pilots on military and personal leave, furlough notices would be sent to more than 1400 of the airline's least senior pilots in order to cut the active roster by 950.

The carrier was talking to unions about the lay-offs and said affected pilots would be notified in mid-July. The lay-offs are due to start in September.

It also announced a plan for global co-operation with Continental Airlines that would see the latter join the giant Star Alliance and the two carriers link their networks and services.

The airlines said last week the move would create revenue opportunities, but noted it would also result in cost savings and "efficiencies".

A United spokesman in Australia said the cutbacks were unlikely to affect Australian services as most of the aircraft being grounded were Boeing 737s.

Earlier this week in Sydney, the airline unveiled new business and first-class seats it was introducing across its fleet of Boeing 747s, 767s and 777s. But a spokesman said there was no time line for that at this stage.

However, the roadshow coincides with the introduction on the trans-Pacific of new Boeing 777s by Virgin subsidiary V Australia and the arrival on the route of Qantas's flagship A380s.

The new United business cabins will feature the kind of lie-flat sleeper seats and video-on-demand systems that have been available on other airlines for several years.

Other major airlines also have announced plans in recent weeks to shrink their operations, ground older aircraft, defer deliveries of new planes on order and cut jobs.

Delta Air Lines shed 4000 jobs through voluntary buyouts.

American Airlines, Continental Airlines and US Airways Group also have announced plans for reducing their head counts and fleets.

Source: theaustralian.news.com.au

Fuel costs could 'devastate' airlines

noreply@blogger.com (iTravelnet news) — Tue, 24 Jun 2008 00:40:00 +0000

The skyrocketing price of fuel could "devastate" the airline industry and hurt the economy, according to a report from the Business Travel Coalition released Monday.

Pressured by rising fuel costs, major airlines could collapse as early as this year, the coalition said. The failure of just one airline could disrupt travel for 200,000 to 300,000 daily passengers and cause between 30,000 and 75,000 immediate job losses, said the coalition.

The failure of more than one airline could result in 100,000 job losses, said the report, particularly in such hubs as Atlanta for Delta Air Lines, Chicago for UAL Corp.'s (UAL) United Airlines and Continental Airlines' Houston.

"Already depleted cash reserves are dwindling fast, and unless the fuel crisis lessens, airlines face not the now familiar protracted restructuring in bankruptcy, but outright and immediate extinction," said the report.

Business travel would be disrupted, as would the airborne supply chain for goods like pharmaceuticals, electronics and auto parts.

Rising fuel costs hit airlines hard. Fuel expenses are expected to total $61.2 billion this year, compared to $41.2 billion in 2007, according to the Air Transport Association.

Some major airlines, such as Northwest Airlines, United Airlines, Delta and U.S. Airways, continue to operate despite filing for bankruptcy in the last several years. But the credit crisis would make it harder for a bankrupt airline to keep operating while trying to restructure its business, according to the coalition.

The lack of bankruptcy financing is part of the reason why smaller airlines like Aloha, ATA, Champion, Eos and Skybus recently stopped operating, said the report.

Analysts who cover the industry disagreed that a major carrier would crumble this year, because the airlines still have enough cash to survive into 2009.

"I think it's more likely that any large airline bankruptcies would occur next year," said Philip Baggaley of Standard & Poor's, who has assigned his lowest ratings to U.S. Airways, AirTran Airways and JetBlue Airways. "At least at current fuel prices, most of them have enough liquidity to get through several more quarters. But it could get rather more uncomfortable by 2009. Oil prices are the largest variable."

Robert Mann Jr., an industry consultant, said the airlines have enough cash to ward off collapse for this year, and that capacity cuts should help them survive.

"The cuts in flying are designed to cut cash loss and that's what I hope happens," said Mann.

Raymond Neidl of Calyon Securities agreed that the airlines have enough cash to avoid disaster in the near future, though he expects that the number of carriers will shrink through consolidation.

"Nobody's going into bankruptcy this year," said Neidl. "Airlines die slow, and they always seem to come up with the cash to keep going."

Delta plans to acquire Northwest Airlines, though the merger is yet to be finalized.

Source: money.cnn.com

United Airlines to require minimum stays from Oct.

noreply@blogger.com (iTravelnet news) — Sat, 21 Jun 2008 23:04:00 +0000

United Airlines said Friday it will start requiring minimum stays for nearly all domestic coach seats beginning in October. It is also raising its cheapest fares by as much as $90 one-way.

The second largest U.S. carrier said the moves are among a number of changes, including flight and job cutbacks, it is making to combat record high fuel prices.

forbes.com

Continental to join United in Star Alliance

noreply@blogger.com (iTravelnet news) — Fri, 20 Jun 2008 21:31:00 +0000

Continental Airlines and United Airlines on Thursday announced a broad partnership to link their services worldwide aimed at cutting costs as the industry reels from soaring fuel prices.

As part of the tie-up, Continental plans to join United in the Star Alliance of carriers, the two companies said in a joint statement.

theage.com.au

British Airways Subsidiary Begins Paris-U.S. Flights

noreply@blogger.com (iTravelnet news) — Thu, 19 Jun 2008 20:55:00 +0000

British Airways Plc began flights from France to the U.S. with a new airline division, taking advantage of an international treaty to add services across the north Atlantic, the world's most profitable aviation market.

The first plane operated by the U.K. carrier's OpenSkies subsidiary took off at 10:49 a.m. in Paris and is due to arrive at New York's John F. Kennedy airport at 1:25 p.m. eastern time.

British Airways is adding flights even as a slowing economy and surging oil prices cause the collapse of other carriers. Chief Executive Officer Willie Walsh said yesterday that the new airline's costs will be kept low through joint purchasing with its London based parent, Europe's third-largest airline.

"While the economic climate has worsened in recent months, we believe that OpenSkies can compete effectively," Walsh said in a statement. "It has a low cost base and support from British Airways in key areas such as sales and marketing. This differentiates it from some new airlines that have failed recently which were operating in isolation."

British Airways rose 0.25 pence, or 0.1 percent, to 226 pence, paring the stock's declines this year to 27 percent and valuing the company at 2.61 billion pounds ($5.15 billion).

Business Focus

OpenSkies will initially operate from Paris Orly airport using a single Boeing Co. 757s carrying as many as 82 passengers. The aircraft have 24 business-class berths that convert to beds, with 28 seats in premium economy and only 30 in economy. Upscale seating accounts for about half of British Airways' revenue.

OpenSkies is the only airline created specifically to take advantage of the U.S-European Union treaty of the same name, which allows carriers to fly between the U.S. and any of the bloc's nations instead of just their home countries.

At least 24 carriers have failed or entered bankruptcy this year, according to the International Air Transport Association, among them business-only carriers Silverjet Plc and Eos Airlines. The industry may report annual losses of $6.1 billion, the worst since 2003, hurt by slowing economies and a 50 percent jump in oil prices in six months, the trade body estimates.

"The timing's unfortunate but BA probably have one of the better brands in the U.S.," said Stephen Furlong, an analyst at Davy Stockbrokers in Dublin who has the U.K. airline on his focus list. "But ultimately they'll still have to generate a return."

Dale Moss, managing director of the new airline, said in a statement today that it aims to provide value, service and comfort that will "delight" customers.

Expansion Plans

OpenSkies plans to have six planes by the end of 2009, all from its parent's 757 fleet, and is considering flying to the U.S. from Amsterdam, Brussels, Frankfurt and Milan. British Airways has spent 17 million pounds on the unit, it disclosed in accounts for the year ended March 31. The new carrier got takeoff slots at Orly through an agreement with L'Avion, which also operates from the Parisian airport to New York and is the only remaining independent business-class carrier across the Atlantic.

Establishing a subsidiary in Paris is also a response to competition at British Airways' London Heathrow hub after the introduction of the Open Skies treaty in March ended a lock that it and three other carriers had on U.S-Heathrow services.

American carriers Delta Air Lines Inc., Continental Airlines Inc. and Northwest Airlines Inc. have begun Heathrow flights. The influx means capacity between the U.S. and Europe's busiest airport is up 21 percent this summer compared with a year earlier, according to London-based consultant Aviation Economics.

Defensive Move

"OpenSkies is a defensive move by British Airways," said Davy's Furlong. "It seems to be a case of "you came into my market, so I'll come into yours.""

British Airways is Heathrow's biggest carrier, with 41 percent of slots at an airport that's already operating at 99 percent of government-permitted flight capacity.

Air France-KLM Group, Europe's biggest airline, has begun flights from Heathrow to Los Angeles under the new treaty as part of a revenue-sharing partnership with Delta. Deutsche Lufthansa AG, the region's No. 2, bought a stake in JetBlue Airways Corp. in January, giving an additional partner to help steer U.S. customers to its trans-Atlantic flights. The German carrier also says it may exercise an option to buy BMI, the second biggest holder of slots at Heathrow, by the middle of next year.

Source: bloomberg.com

Airlines face billions in losses, Senate panel told

noreply@blogger.com (iTravelnet news) — Thu, 19 Jun 2008 03:25:00 +0000

U.S. airlines may lose as much as $13 billion in 2008 as surging fuel prices outpace fare increases, the chief of the Air Transport Assn. told a Senate committee Tuesday.

This year's financial results will be "on par" with the industry's worst ever as carriers' combined fuel costs reach $61 billion, the association's chief executive, James May, said. The record loss is $11 billion in 2002, the group said.

"I don't think anybody predicted this extraordinary jump in prices," said May, whose group represents the biggest U.S. carriers.

The updated forecast came as airlines announced more cuts Tuesday. Northwest Airlines said it would cut its capacity later this year by 3% to 4% and trim its workforce because of high fuel prices. Northwest says it has not yet finalized the number of positions it wants to eliminate.

"In response to these extraordinary fuel costs, we are taking prudent actions to reduce our capacity and right-size," CEO Doug Steenland said. "This will allow us to better match our capacity to customer demand as airfares, by necessity, must increase."

Air Canada said separately it would cut up to 2,000 jobs and reduce capacity 7%.

United Airlines earlier projected its 2008 fuel bill would hit $9.5 billion, more than $3.5 billion higher than 2007.

Source: latimes.com

Lufthansa-no talks with Austrian Airlines owner

noreply@blogger.com (iTravelnet news) — Mon, 16 Jun 2008 22:26:00 +0000

Lufthansa has not had any talks with the state owner of Austrian Airlines about buying a stake, Lufthansa Chief Executive Wolfgang Mayrhuber said on Monday.

He added that a deal between the two - both already members of the Star Alliance - would bring little in the way of synergies.

Source: reuters.com

United Airlines to charge 15 dollars to check one bag

noreply@blogger.com (iTravelnet news) — Thu, 12 Jun 2008 22:40:00 +0000

NEW YORK (AFP) - United Airlines said Thursday it will charge a 15 dollar service fee to check one bag for domestic travel on an economy ticket to help offset record fuel prices.

The new fee also will be charged on economy travel to Canada, the US Virgin Islands and Puerto Rico, said the second-largest US airline, owned by UAL Corporation.

In addition, the Chicago based carrier said it will hike the fee to check three or more bags, overweight bags or items that require special handling to 125 dollars from 100 dollars, or to 250 dollars from 200 dollars, depending on the item.

The new fees, effective August 18, apply to customers who purchase a ticket on or after Friday.

The airline previously announced a fee of 25 dollars for checking a second bag.

United estimates the potential revenue from baggage handling service fees, including those for checking a first and second bag, will be about 275 million dollars a year.

It announced exceptions to the new first-bag checking fee for passengers traveling in United first or business class, certain frequent-flyer and Star Alliance members and US military personnel traveling on orders.

Like other US airlines reeling from jet fuel prices that have nearly doubled in the past year and a soft US economy, United announced in early June it was further cutting its fleet, operations and up to 1,100 additional jobs. It also closed its budget carrier Ted.

The leading carrier American Airlines took similar action to stem losses from the fuel crisis in mid May and announced a 15 dollar for fee for the first checked bag on tickets purchased for domestic economy travel on or after June 15, and 25 dollars for the second checked bag.

Source: news.google.com

Silverjet plans to resume flights after deal

noreply@blogger.com (iTravelnet news) — Thu, 12 Jun 2008 02:31:00 +0000

Silverjet, the all business-class carrier that ceased operations 13 days ago, said Wednesday that it plans to resume flying after agreeing to be bought by Kingplace.

iht.com

Sudan investigates plane fire that killed at least 29

noreply@blogger.com (iTravelnet news) — Wed, 11 Jun 2008 14:10:00 +0000

KHARTOUM, Sudan: Investigators examined the scorched hull of a jetliner Wednesday to determine what caused the plane to veer off a runway and burst into flames, killing at least 29 people, officials said.

iht.com

Major airlines roll back weekend fare increase

noreply@blogger.com (iTravelnet news) — Tue, 10 Jun 2008 23:13:00 +0000

NEW YORK (AP) - A number of major airlines rolled back a weekend fare increase Monday, the first time in more than half a dozen attempts that a widespread price hike failed to take hold across the struggling industry.

Carriers declined to say whether the shift signaled concerns about falling customer demand. Still, the decision served as a reminder that passengers - many reeling from financial worries of their own - may be nearing a tipping point in terms of how much they will pay to fly.

"This could be the first sign that demand is softening," said Graeme Wallace, chief technology officer of airfare research site FareCompare.com. "Up until now, the (airlines') statements have been that they expect demand to stay high."

AMR Corp.'s American Airlines launched the $20 roundtrip increases across much of its domestic network Saturday. That move was quickly matched by many of its closest competitors, including UAL Corp.'s United Airlines and Delta Air Lines Inc.

Continental Airlines Inc. was among the carriers that matched the increase over the weekend, but it rolled back the higher prices Monday morning, putting pressure on other carriers to do the same.

Spokeswoman Julie King said the Houston carrier rescinded the increase "for competitive reasons."

Carriers are prohibited from collectively agreeing to raise or lower fares, but nothing stops them from following a rival's lead. As a result, most major airlines tend to jockey for position when filing fares to a central booking system, which is updated three times daily.

Airlines have been scrambling to cut costs and increase revenue as jet fuel prices have soared by about 77 percent more than it did a year ago.

A number of airlines recently laid out sweeping plans to cut jobs, slash flights and ground dozens of less efficient planes. Carriers hope they can push fares even higher by reducing the number of available seats in the air.

The industry has been generally successful in raising prices and fuel surcharges in recent months.

Twelve out of 17 increases have taken hold since the start of the year, with six of the successful increases coming in just the last two months, according to a FareCompare tally.

Because the airline industry is so price-sensitive, carriers typically keep airfare increases in place only if competitors match the prices on the same routes. That has prompted airlines to look for other ways to boost revenue.

American, the biggest U.S. carrier, last month raised the stakes when it became the first major carrier to say it would start charging some fliers $15 to check the first bag. The Fort Worth, Texas-based airline also raised a number of other charges.

"Even when we raised fees a couple of weeks ago, we said that wasn't the only thing we were doing, that we would still be trying to recoup fuel costs through fare increases," spokesman Tim Wagner said. "The (fuel cost) increase is so incredible, we have to find a way to pass it on."

American's new baggage charge is scheduled to take effect on tickets bought on or after June 15. The carrier last week said the $15 fee would affect fewer than one in four customers this summer and won't lengthen lines at boarding gates.

Other major carriers, many of which already charge to check a second bag, have not said they will begin charging passengers to stow a first bag in the cargo hold, although they are not ruling it out either.

"We are still studying that very carefully," said Robin Urbanski, spokeswoman for Chicago-based United, the No. 2 U.S. carrier.

Source: news.google.com

Virgin says sales are up thanks to T5 troubles

noreply@blogger.com (iTravelnet news) — Tue, 10 Jun 2008 22:47:00 +0000

Virgin Atlantic claimed yesterday it was still boosting sales in the aftermath of the troubled Terminal 5 opening, with passenger numbers rising 6% last month.

The airline will announce today that it is hiring 100 extra cabin crew as it adds an extra flight to its daily London to Hong Kong service.

Virgin Atlantic said it was seeing strong sales on services to the Caribbean and the US despite a downturn in consumer confidence and rising fuel surcharges, driven by the high oil price.

"We have definitely taken market share post-T5," said Paul Charles, Virgin Atlantic's director of communications. "There is still massive demand to fly long haul to countries where the pound is strong and the dollar is weak, such as the Caribbean and the US."

British Airways, the only tenant at T5, reported a 0.7% drop in traffic last month.

However, it said its most profitable customers were still flying in large numbers, with premium sales on long-haul routes ahead of the same period last year.

Virgin Atlantic said premium sales in May were up 10% for the second successive month.

Analysts believe the airline founded by Sir Richard Branson is in a weaker financial position than its close rival as high fuel costs threaten profits across the industry.

BA achieved a profit margin of 10% last year and record pre-tax profits of £883m. Virgin Atlantic has yet to publish its results for the 2007-08 financial year.

The carrier is expected to avoid a loss despite achieving a profit of just £6.6m in the year to February 2007, when the airline market was approaching its peak.

BA and Ryanair have admitted recently that they will struggle to make a profit in the financial year as a result of a combination of high fuel costs and weakening demand. Both hope to capitalise on the collapse of weaker rivals, with the global industry expected to make a collective loss of $6bn (£3bn) if the oil price stays at record levels.

The future of another BA rival, Silverjet, was still in the balance last night as its administrators held rescue talks with three parties.

The business class carrier's administrator, Begbies Traynor, confirmed that an investment vehicle managed by Swiss management company Heritage had tabled an offer to buy and relaunch the airline.

Heritage is working with Lawrence Hunt, Silverjet's founder and chief executive, who has blamed the grounding of his airline on negative comments from financial analysts rather than the crippling surge in fuel costs.

Source: guardian.co.uk

Korean Air, Asiana Slide Following Record Jump in Oil

noreply@blogger.com (iTravelnet news) — Mon, 09 Jun 2008 22:11:00 +0000

Korean Air Lines Co., South Korea's largest carrier, led declines among Asian airlines after a record jump in crude oil prices boosted the cost of jet fuel.

The carrier dropped 3,000 won, or 5.6 percent, to 51,000 won as of 11:06 a.m. in Seoul trading, the biggest decline in almost three months. Asiana Airlines Inc., South Korea's second- biggest airline, lost 4.7 percent to 5,680 won.

Korean Air and other Asian carriers have raised fares, cut flights or fired workers in a bid to cope with jet-fuel prices that have doubled in a year. The cost of jet fuel, most Asian carriers' biggest expense, has surged in line with the price of crude oil, which jumped 8.4 percent to $138.54 a barrel in New York on June 6.

"Korean carriers are coming up with various measures to counter fuel cost, but that won't be enough to cover rising oil prices," said Yun Hee Do, a Korea Investment and Securities Co. analyst in Seoul. He rates Korean Air and Asiana as "buy."

Korean Air last week said it will begin levying fuel surcharges on domestic routes from July. Asiana is asking employees to take voluntary unpaid leave. Both carriers are scaling back their international services.

Other Asia-Pacific carriers also fell after the June 6 oil price jump, which was the largest ever, one day rise in dollar terms and the biggest as a percentage since June 1996.

Jet Fuel Price

Air New Zealand Ltd., the nation's largest carrier, dropped 4.3 percent to NZ$1.12 at 2:09 p.m. in Wellington trading. The airline on June 6 announced that it planned to raise fares and cut some services.

Japan Airlines Corp. fell 2.5 percent to 237 yen at the 11 a.m. trading break in Tokyo. All Nippon Airways Co. slipped 1 percent to 396 yen. Singapore Airlines Ltd., Asia's most profitable carrier, slid 2.3 percent to S$15.40 as of 11:10 a.m. in the city.

Jet fuel prices climbed 3.8 percent to $162.15 a barrel in Singapore trading on June 6. Spiraling fuel bills may cause global carriers to post combined losses of as much as $6.1 billion this year, according to the International Air Transport Association.

China Airlines, Taiwan's largest carrier, today said it will cancel about 10 percent of flights from June, becoming at least the sixth major Asia-Pacific airline to announce cuts in two weeks. The airline will axe 100 passenger services a month, spokesman Bruce Chen said by phone today.

Source: bloomberg.com

Thai Airways cuts back on U.S. flights

noreply@blogger.com (iTravelnet news) — Mon, 09 Jun 2008 05:27:00 +0000

Thai Airways International will halt its direct flights between Bangkok and New York starting next month because of rising fuel prices, the company said Saturday.

Thailand's national carrier said its board agreed Friday to end the direct flights July 1 and to reduce flights to Los Angeles from seven to five a week as part of an energy saving plan. It also plans to end direct flights to Los Angeles later this year, the company said.

"The change of the flight plan is to lessen the impact of the rising energy price which has affected the entire industry," the company said in a statement. "If the fuel prices goes down, we will consider resuming the direct flights."

Airlines have been struggling to contain costs this year as oil prices have skyrocketed.

Scores of start-up airlines have gone out of business because of rising fuel prices. Several major carriers have also announced they are increasing fuel surcharges or adding a baggage surcharge, reducing capacity, deferring plane orders or shedding jobs to deal with rising costs.

Source: edition.cnn.com