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Delta to start phasing out its Boeing 747-400s

Delta Air Lines (Atlanta) currently operates 16 ex-Northwest Airlines Boeing 747-400s. According to FrequentBusinessTraveler.com citing a memo to its pilots, Delta will retire three aircraft by the end of September and another by the end of this year leaving 12 in the fleet.

Delta was originally a Boeing 747-100 operator and became a 747 operator again with the Northwest Airlines merger.

Read the full report: CLICK HERE

Copyright Photo: Boeing 747-451 N671US (msn 26477) taxies to the gate at Los Angeles International Airport.

Delta Air Lines: AG Slide Show

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Greenland Express may need a new investor

Greenland Express (Denim Air) F.28 Mk 0100 PH-MJP (14)(Tko)(Greenland Express)(LRW)

Greenland Express has had to deal with two cancelled flights and other operational issues recently with operator Denim Air (Amsterdam) according to Nordjyske.dk. According to the report, the airline has issued refunds for the cancelled flights.

Greenland Express CEO Gert Brask also stated to the Danish website that a new investor will have to be found in the future. He will determine the time when new capital is needed.

Greenland Express Air is a Greenlandic/Danish virtual airline, established in the beginning of 2013.

Greenland Express Air chose Dutch flight operator Denim Air to operate the flights. Greenland Express Air uses a Denim Air 100-seat Fokker 100 aircraft (above) on flights between Denmark and Greenland.

Read the full article (in Danish): CLICK HERE

Copyright Photo: Greenland Express. Denim Air’s Fokker 100 (F.28 Mk. 0100) PH-MJP (msn 11505) has been operated for Greenland Express in their colors since the start of services on June 17, 2014.

Elite Airways to fly from Melbourne, Florida to Washington Dulles starting on September 8

Elite Airways CRJ200 (Tko)(Elite)(LR)

Elite Airways (Portland, ME and Melbourne, FL) wants to get into the scheduled airline business. The company was founded on October 30, 2012 and received its FAA Part 121 AOC also in 2012. The airline wants to begin scheduled passenger flights to and from Melbourne International Airport in Florida. The airline has announced it wants to fly from Melbourne to Washington (Dulles) starting on September 8. Fares will start at $199 one-way (see below). The carrier intends to also operate from Portland in the near future.

The airline currently operates 50-seat Bombardier CRJ200 regional jets but is considering larger aircraft.

Read the full story from the Portland Press Herald: CLICK HERE

All images by Elite Airways.

Elite Airways logo

Elite Airways 7.2014 Route Map

Moskovia Airlines to revert to a charter airline on September 1

Moskovia Airlines (Moscow-Zhukovsky) filed for bankruptcy protection and reorganization in February 2014. Following an inspection of the airline’s operations this month by the Russian Federal Air Transport Agency (Rosaviatsia), the airline will longer be able to operate as a scheduled passenger airline according to ch-aviation. The airline will revert to a charter airline on September 1.

Copyright Photo: Arnd Wolf/AirlinersGallery.com. The main aircraft for Moskovia now is the new pictured Sukhoi Superjet 100-95B and a remaining single Boeing 737-700 which is likely to be returned. RA-89021 (msn 95021) arrives in Munich.

Moskovia Airlines: AG Slide Show

 

 

Spirit Airlines to add two new routes from Chicago and Detroit to New Orleans

Spirit Airlines (Fort Lauderdale/Hollywood) is adding nonstop service to New Orleans from Chicago’s O’Hare Airport and Detroit on November 6.

This is in addition to Spirit’s new nonstop service to New Orleans from Fort Lauderdale/Hollywood and Houston’s Bush Intercontinental Airport that will begin on August 1, 2014. With the addition of these new routes, Spirit will operate flights nonstop from five cities to New Orleans.

Additionally Spirit is also adding new service from Chicago (O’Hare) to Atlanta that will begin on November 2, 2014. Additionally, Spirit’s expanded service to operate year-round from Chicago (O’Hare) to Baltimore/Washington will also begin on November 6, 2014. With the addition of these new routes, Spirit operates flights nonstop from Chicago to 21 cities.

Read the analysis on Spirit’s growth spurt by Bloomberg Businessweek: CLICK HERE

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A319-132 N527NK (msn 2978) departs from Las Vegas painted in the old black and silver version of the 2004 livery.

Spirit Airlines: AG Slide Show

ANA announces the first Boeing 787-9 revenue flights on August 7

ANA (All Nippon Airways) (Tokyo) announced that it will launch scheduled services to three domestic Japanese destinations using the latest stretched version of the Boeing Dreamliner, the 787-9, from August 7. The plane, in 395-seat configuration, will be introduced progressively on routes between Tokyo’s Haneda Airport and Fukuoka, Osaka (Itami) and Matsuyama as ANA becomes the first airline in the world to operate the scheduled flight of 787-9.

In addition to the first 787-9 going into service in August, ANA is scheduled to take delivery of a further two aircraft in the fiscal year ending March 2015. For the launch of international services, ANA has opted for the 215-seat version of the long-range aircraft – 46 seats more than the existing Boeing 787-8 currently used on international long-haul routes.

The 787-9 is engineered for greater fuel economy than 787-8, while also ensuring approximately 20% more seating and cargo capacity and will help ANA achieve expansion into new markets.

ANA will focus on utilizing the 395-seat version of the 787-9 on major domestic routes to maximize passenger numbers, while also lowering operational costs.

On ANA’s international network, the plan is to utilize the 787-9 to increase capacity on some long-haul routes to Europe, North America and other key destinations which are at present served by the smaller 787-8 or to replace larger aircraft currently operating the routes. This will help ANA to maximize commercial returns, stabilize operating costs and enhance its ability to win more passengers and bigger cargo demand.

ANA is determined to take maximum advantage of the competitive edge provided by the outstanding fuel efficiency of the Boeing 787 to accelerate its growth and make the airline stronger.

Boeing 787-9 Schedules:

ANA 787-9 Schedules

Copyright Photo; Steve Bailey/AirlinersGallery.com. The first Boeing 787-9 for ANA (JA830A).

ANA: AG Slide Show

ANA firms up an order for 7 Airbus A320neo and 23 A321neo aircraft

ANA A321neo (82)(Flt)(Airbus)(LRW)

ANA Holdings (All Nippon Airways-ANA) (Tokyo) has firmed up an order for 30 A320neo Family aircraft (seven A320neo and 23 A321neo). The initial agreement was announced in March 2014. The aircraft will be part of ANA Holdings fleet development and modernisation strategy to replace its existing single-aisle fleet in the coming years.

Deliveries will start from 2016.

Japanese Aero Engines Corporation (JAEC) is a 23% collaboration partner in PW1100G-JM program. JAEC is responsible for development, manufacturing and engineering support of the fan, low-pressure compressor, combustor, and low-pressure shafts. JAEC is a consortium, consisting of three Japanese companies: IHI (65%), Kawasaki Heavy Industries (25%), and Mitsubishi Heavy Industries (10%).

The assembly of Airbus’ first A320neo has been completed following painting of the aircraft and the mounting of PW1100G-JM engines. It will soon start ground tests to prepare for first flight. The flight test campaign for the A320neo will kick-off in Q3 2014, paving the way for Entry Into Service in Q4 2015.

The A320neo – for “new engine option” – incorporates many innovations, including latest generation engines and large Sharklet wing-tip devices, which together deliver 15 percent in fuel savings and a reduction of 3,600 tonnes of C02 per aircraft per year. With a total of more than 3,000 orders received from more than 50 customers since its launch in 2010, the A320neo Family has captured over 60 percent of the market, clearly demonstrating its leadership.

Image: Airbus.

ANA: AG Slide Show

Boeing to build the new 787-10 in North Charleston, SC

Boeing (Chicago and Seattle) has announced that final assembly of the 787-10, the newest and longest member of the 787 Dreamliner family of airplanes, will take place exclusively in North Charleston, South Carolina.

Boeing will continue to assemble both 787-8s and 787-9s in Everett, Washington, and North Charleston. Design of the 787-10 is underway in Everett, with final assembly of the first 787-10 scheduled to begin in South Carolina in 2017.

“We looked at all our options and found the most efficient and effective solution is to build the 787-10 at Boeing South Carolina,” said Larry Loftis, vice president and general manager, 787 program, Boeing Commercial Airplanes. “This will allow us to balance 787 production across the North Charleston and Everett sites as we increase production rates. We’re happy with our growth and success in South Carolina, and the continued success at both sites gives us confidence in our plan going forward.”

The 787-10 will be 18 feet (5.5 meters) longer than the 787-9. With 10 feet (3 meters) of that increase in the midbody section, the 787-10 midbody is too long to be transported efficiently from North Charleston, where systems integration work is performed, to the Everett facility for final assembly. In addition, introducing the 787-10 in North Charleston takes advantage of that facility’s capacity while allowing the Everett facility to continue improving productivity as it focuses on the 787-8 and 787-9.

The 787 production system includes three production lines: two in Everett (including a temporary surge line) and one in South Carolina. The integrated production system currently operates at a production rate of 10 airplanes per month. As announced last year, the 787 production rate will increase to 12 airplanes per month in 2016 and 14 per month by the end of the decade.

The Everett facility will continue to assemble seven airplanes per month, while Boeing South Carolina final assembly will gradually increase from three 787s per month today to five per month in 2016 and seven per month by the end of the decade.

The Boeing 787 Dreamliner family of airplanes offers airlines unmatched fuel efficiencies and environmental performance, while providing a new level of comfort for passengers through the thoughtful application of new technologies. To date, the 787 family has won more than 1,000 orders and more than 165 airplanes have been delivered to 21 customers worldwide.

The 787-10 will leverage 787 technology to provide more passenger and cargo capacity along with unparalleled seat-mile economics in the medium twin-aisle market. Since its launch in June 2013, the 787-10 has won 132 orders from six global customers.

Copyright Photo: Arisara Petersen/AirlinersGallery.com. The Boeing 787-8 production line at North Charleston, SC (CHS).

Boeing 787-10 (Boeing)(LR)

ANA finalizes an order for 20 Boeing 777-9Xs, 14 787-9s and six 777-300 ERs

Boeing (Chicago and Seattle) and All Nippon Airways (ANA) (Tokyo) have finalized an order for 40 widebody airplanes – 20 777-9Xs, 14 787-9 Dreamliners and six 777-300 ERs (Extended Range) (pictured above) – as part of the airline’s strategic long-haul fleet renewal plan. The order, valued at approximately $13 billion at list prices, was originally announced as a commitment in March.

ANA, the launch customer of the 787, becomes the world’s largest customer for the Dreamliner with a total of 80 airplanes ordered. The airline currently operates 29 787s with 51 more to deliver, including 43 787-9s.

Boeing’s 777X has accumulated 300 orders and commitments from six customers worldwide.

On the financial side, ANA reported net income of ¥3.5 billion ($34.5 million) for its fiscal first quarter ended June 30, 2014 reversing a net loss of ¥6.6 billion in the same quarter a year ago.

Copyright Photo: ANA’s Boeing 777-381 ER JA782A (msn 33416) exits the runway and taxies to the gate at Los Angeles International Airport (LAX).

ANA: AG Slide Show

Finnair announces 10 new routes for the summer of 2015

Finnair (Helsinki) is announcing ten new scheduled routes for summer 2015 to popular summer destinations.

The new routes are announced in corporation with Suntours and other tour operators. Finnair and Suntours will work closely together to ensure the best combination of package holidays and seats only on every destination. Seat only purchases can be made on the Finnair website, or through travel agency channels.

The ten new scheduled flights are:

Cyprus, Paphos: one weekly, starting March 31, 2015
Spain, Mallorca: one weekly, starting April 11
Turkey, Bodrum, Dalaman Airport: one weekly starting April 12
Greece, Crete, Heraklion airport: 2 weekly, starting April 17
Greece, Crete, Chania airport: 6 weekly, starting April 18
Greece, Rhodes: 5 weekly, starting April 19
Italy, Sicily, Catania: one weekly, starting May 6
Greece, Kos: one weekly, starting May 9
Italy, Amalfi coast, Naples Airport: 2 weekly, starting May 28
Austria, Innsbruck: one weekly, starting June 14

Finnair will also opened a new route to Gazipasa (Alanya in Turkey) in the summer of 2014. Gazipasa has been very popular because of the short driving distance to Alanya, where many Europeans have holiday apartments. Finnair will next year operate more flights to Gazipasa, but less flights to Antalya to match the customer preferences.

With these new routes Finnair will operate to 67 destinations in Finland, Europe and Russia as well as 13 destinations in Asia.

The new routes will be operated with Airbus A319s, A320s and/or A321s.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Airbus A320-214 OH-LXB (msn 1470) arrives in Zurich.

Finnair: AG Slide Show

Air Canada to operate weekly Montreal-Curacao Airbus A319 flights

Air Canada (Montreal) will start weekly Airbus A319 mainline service between Montreal (Trudeau) and Curacao starting on January 1, 2015 per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A319-114 C-FYJG (msn 670) completes its final approach to the runway at Los Angeles.

Air Canada: AG Slide Show

Republic Airlines to fly Embraer 175s as American Eagle from the Miami hub starting on October 2

Republic Airlines (2nd) (American Eagle) (Indianapolis) on October 2 will start operating Embraer 175s on American Eagle services from the Miami hub to Atlanta, Indianapolis, Jacksonville and Tallahassee. The E175s will replace existing Embraer ERJ 145 service per Airline Route.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Republic’s Embraer ERJ 170-200LR (ERJ 175) N404YX (msn 17000367) completes its final turn on the river approach into Washington’s Reagan National Airport (DCA).

American Eagle-Republic: AG Slide Show

JetBlue to launch a nonstop New York JFK-Curacao route on December 2

JetBlue Airways (New York) will launch a new route to Curaçao International Airport (CUR) from JFK International Airport (JFK) on December 2, 2014, providing the only nonstop service from New York. The twice weekly service will operate on Tuesdays and Saturdays.

Curaçao, which is part of the ABC islands that also includes Aruba and Bonaire, is considered a hidden gem amongst all Caribbean island destinations, renowned for its diving, beaches and unique architecture. The historic island is already a popular destination for European travelers and its capital, Willemsted, is a UNESCO World Heritage City.

JetBlue’s flights to Curaçao will be operated on a 150-seat Airbus A320.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A320-232 N587JB (msn 2177) in the special “Building Blocks” motif arrives at the New York (JFK) hub.

JetBlue Airways: AG Slide Show

Spirit Airlines reports record 2Q net income of $66.5 million, up 45.2%

Spirit Airlines, Inc. (Fort Lauderdale/Hollywood) has reported second quarter 2014 financial results.

Adjusted net income for the second quarter 2014 increased 45.2 percent to $66.5 million ($0.91 per diluted share) compared to $45.8 million ($0.63 per diluted share) for the second quarter 20131. GAAP net income for the second quarter 2014 was $64.8 million ($0.88 per diluted share) compared to $42.1 million ($0.58 per diluted share) in the second quarter 2013.

For the second quarter 2014, Spirit achieved an adjusted pre-tax margin of 21.3 percent compared to 17.8 percent over the same period in 20131. On a GAAP basis, pre-tax margin for the second quarter 2014 was 20.8 percent compared to 16.4 percent in the second quarter 2013.

Spirit ended the second quarter 2014 with $567.2 million in unrestricted cash.

Spirit’s return on invested capital (before taxes and excluding special items) for the twelve months ended June 30, 2014 was 32.0 percent. See “Calculation for Return on Invested Capital” table below for more details.

“The Spirit team delivered another strong quarter. While growing our capacity 17.2 percent year over year, we grew our top line 22.6 percent year over year,” said Ben Baldanza, Spirit’s Chief Executive Officer. “Our efforts to drive operational excellence have produced material improvements in controllable components of our cost structure which contributed to the 3.5 percentage point year-over-year increase in our Adjusted Operating Margin. I want to thank all our team members that contributed to these excellent results. A few months ago, we launched a series of initiatives aimed at better aligning our customers’ expectations with the Spirit business model. We are very encouraged at the early results of this effort, and the Bare Fare™ plus Frill Control™ messaging is resonating well with customers as they see the benefit of only paying for what they truly value. As we continue down this path, we expect ever increasing alignment to a business model that provides the lowest total fares and the highest consumer choice all while maintaining our commitment to deliver value to our customers and to our shareholders.”

Revenue Performance

For the second quarter 2014, Spirit’s total operating revenue was $499.3 million, an increase of 22.6 percent compared to the second quarter 2013. The increase was driven by our growth in flight volume, higher load factors, and higher operating yields.

Total revenue per available seat mile (“RASM”) for the second quarter 2014 was 12.46 cents, an increase of 4.6 percent compared to the second quarter 2013. The calendar shift of Easter occurring in April this year compared to March in 2013 contributed to the strong second quarter 2014 results.

Passenger flight segment (“PFS”) volume for the second quarter 2014 grew 14.7 percent year over year, and the Company’s load factor for the second quarter 2014 increased 1.8 points year over year to 87.5 percent. Total revenue per PFS for the second quarter 2014 increased 6.8 percent year over year to $139.90.

Cost Performance

Total operating expenses for the second quarter 2014 increased 15.7 percent year over year to $394.2 million on a capacity increase of 17.2 percent.

Spirit reported second quarter 2014 cost per available seat mile excluding special items and fuel (“Adjusted CASM ex-fuel”) of 5.95 cents, a decrease of 0.8 percent compared to the same period last year. The primary driver of the decrease was lower passenger re-accommodation expense (recorded within Other operating expense) per ASM as a result of improved operational reliability. The Company also benefited from lower aircraft rent per ASM. These benefits were partially offset by higher depreciation and amortization expense and increased salary, wages, and benefits, as well as higher maintenance, material, and repairs expense per ASM.

Selected Balance Sheet and Cash Flow Items

As of June 30, 2014, Spirit had $567.2 million in unrestricted cash and cash equivalents. For the six months ended June 30, 2014, Spirit incurred capital expenditures of $7.4 million, paid $94.0 million in pre-delivery deposits for future deliveries of aircraft, net of refunds, and recorded an increase of $14.3 million in maintenance deposits, net of reimbursements.

Fleet

In the second quarter 2014, Spirit took delivery of one new A320 aircraft, ending the quarter with 57 aircraft in its fleet. The Company has eight more new A320 aircraft scheduled for delivery by year-end 2014.

Second Quarter 2014 and Other Current Highlights

• Added/announced new service between (service start date):

- Minneapolis-St. Paul and Houston (5/1/14)2
– Minneapolis-St. Paul and Baltimore/Washington (5/1/14)2
– Chicago O’Hare and Oakland/San Francisco (5/1/14)
– Minneapolis-St. Paul and Detroit (5/22/14)2
– Chicago O’Hare and Baltimore/Washington (5/22/14)2
– Chicago O’Hare and Portland, OR (5/22/14)2
– Fort Lauderdale and New Orleans (8/1/14)
– Houston and New Orleans (8/1/14)
– Houston and Atlanta (8/1/14)
– Kansas City and Chicago (8/7/14)
– Kansas City and Dallas/Fort Worth (8/7/14)
– Kansas City and Detroit (8/7/14)
– Kansas City and Las Vegas (8/7/14)
– Kansas City and Houston (8/8/14)
– Fort Lauderdale and Houston (9/3/14)
– Houston and San Diego (9/3/14)
– Boston and West Palm Beach (11/21/14)2
– Latrobe/Pittsburgh and Fort Myers (12/18/14)2
– Latrobe/Pittsburgh and Tampa (12/19/14)2

Copyright Photo: Brian McDonough/AirlinersGallery.com. Spirit Airlines has eight more new Airbus A320 aircraft scheduled for delivery by year-end 2014. Airbus A320-232 N617NK (msn 5387) completes its final approach into Baltimore/Washington (BWI).

Spirit Airlines: AG Slide Show

Current Route Map:

Spirit 7.2014 Route Map

Boeing forecasts rising demand for commercial pilots and technicians

Boeing logo (medium)

Boeing (Chicago and Seattle) is forecasting continued strong growth in demand for commercial aviation pilots and maintenance technicians as the global fleet expands over the next 20 years.

Boeing’s 2014 Pilot and Technician Outlook, released today at EAA AirVenture Oshkosh, projects that between 2014 and 2033, the world’s aviation system will require:

533,000 new commercial airline pilots
584,000 new commercial airline maintenance technicians

“The challenge of meeting the global demand for airline professionals cannot be solved by one company or in one region of the world,” said Sherry Carbary, vice president, Boeing Flight Services. “This is a global issue that can only be solved by all of the parties involved—airlines, aircraft and training equipment manufacturers, training delivery organizations, regulatory agencies and educational institutions around the world.”

The 2014 outlook projects continued increases in pilot demand, which is up approximately 7 percent compared to 2013; and in maintenance training, which increased just over 5 percent. Pilot demand in the Asia Pacific region now comprises 41 percent of the world’s need, and the Middle East region saw significant growth since last year’s outlook due to increased airline capacity and orders for wide-body models which require more crew members.

Overall, the global demand is driven by steadily increasing airplane deliveries, particularly wide-body airplanes, and represents a global requirement for about 27,000 new pilots and 29,000 new technicians annually.

Projected demand for new pilots and technicians by global region:

Asia Pacific – 216,000 pilots and 224,000 technicians
Europe – 94,000 pilots and 102,000 technicians
North America – 88,000 pilots and 109,000 technicians
Latin America – 45,000 pilots and 44,000 technicians
Middle East – 55,000 pilots and 62,000 technicians
Africa – 17,000 pilots and 19,000 technicians
Russia and CIS – 18,000 pilots and 24,000 technicians

Ryanair posts a fiscal first quarter net profit of $264.1 million, an increase of 152%

Ryanair (Dublin) has announced a fiscal first quarter (Q1) net profit of €197 million ($264.1 million), an increase of 152% over last year.

The ultra low-fare airline cautioned that this result was distorted by the timing of a very strong Easter in Q1 with no holiday period in the prior year comparable. Traffic grew to 24.3 million as load factors rose by 4% points to 86%. Average fare rose by 9%, boosted by a strong Easter period, while total revenues were up 11% to €1.496 billion. Unit costs fell by 2%, excluding fuel they rose by 1%.

Ryanair’s Michael O’Leary said:

“Q1 profits were boosted by a strong Easter (but are somewhat distorted by the absence of Easter on the prior year Q1). The earlier launch of our summer schedule and actively raising our forward bookings has delivered a 4% increase in load factor to 86% and enabled us to better manage close-in yields. Ancillary Revenues rose 4% in line with traffic growth, as airport and baggage fee reductions were offset by the rising uptake of allocated seating.“

New Routes and Bases.

Our four new bases at Athens, Brussels, Lisbon and Rome are performing strongly, as customers switch to Ryanair’s lower fares and our industry leading customer service. Our strategy to raise forward bookings continues to drive higher load factors and we expect to release our summer 2015 schedule in mid-September, some 3 months earlier than last year.

This winter we will open four new bases in Cologne, Gdansk, Warsaw and Glasgow (Intl.) as well as substantially increasing new routes and frequencies at Stansted and Dublin as we invest heavily in our network to build schedules on key city pairs to make them more attractive for business customers.

We are overrun with growth offers from primary European airports whose incumbent flag and regional carriers continue to cut capacity and traffic. These new airports along with our existing 69 bases offer Ryanair significant growth opportunities as the first of our 180 new Boeing order delivers this September. These new aircraft, with the benefit of the much weaker US$, will drive significant cost efficiencies over the next 5 years.

Customer Experience Improvement.

Our “Always Getting Better” program has delivered significant improvement to the customer experience. In addition to the initiatives launched last September which included allocated seating, free second carry-on bags, and an easier to use website with a “fare finder” facility, we launched our family product in June. In July we released our industry leading mobile app (including mobile boarding passes) which has been very positively reviewed by independent commentators and our customers and has reached 1m downloads in the 10 days since its release. In September we will launch Ryanair’s business service which will include same day flight changes, bigger bag allowances, premium seat allocation, and fast-track through security at many Ryanair airports. This new service along with our new routes, improved schedules and wider GDS distribution, will make Ryanair’s low fares much more accessible to, and attractive for business customers. We will continue this winter to rapidly develop both our website and mobile platform to deliver more innovative features and services in addition to the lowest fares to our customers.

Fuel

We are 90% hedged for FY15 at approx. $96 p.bl, which will deliver savings of €50m this year at current market rates. This is lower than the €70m previously guided due to increased volumes in H2. We have also hedged 55% of our H1 FY16 fuel needs at approx. $95 p.bl and weaker US$ which will deliver a 2% fall in our unit fuel cost at current market rates.

Bond Issue

The BBB+ rating awarded by S&P and Fitch makes Ryanair the highest rated airline in the world. This rating reflects the strength of our Balance Sheet and our highly cash generative business model and enabled us in June to issue our first €850m unsecured Eurobond at a coupon of 1.875% fixed for 7 years. This attractively priced financing (which was 7 times oversubscribed) will further reduce our aircraft ownership costs over the next 5 years.

Shareholder returns

In FY14 we completed €482m of share buybacks as part of our commitment to return €1 billion to shareholders over a 2 year period. We now plan to return another €520m via a special dividend of 37.50 cents per ordinary share (subject to AGM approval) to be paid in Q4 FY15. This brings the total returns to shareholders since 2008 to over €2.5bn which is more than 4 times the €585m originally raised from shareholders since our 1997 IPO.

Outlook

Based on these Q1 results and our strong forward bookings it is clear that we are on track to deliver a strong H1, during which traffic will grow by 3%, and fares will rise by 6% subject to late booking fares in Aug. and Sept. However we would strongly caution both analysts and investors against any irrational exuberance in what continues to be a difficult economic environment, with some company-specific challenges in H2.

We expect H2 to be characterized by a much softer pricing environment as many competitors are lowering fares, partly in response to Ryanair’s strong forward bookings. Added to this Ryanair will aggressively raise capacity this winter by 8% (7% in Q3 and 10% in Q4) to take advantage of growth discounts and build out business friendly frequencies from Dublin and Stansted in particular. These initiatives will inevitably put downward pressure on fares and (mindful of last winter’s weak pricing environment) we continue to expect H2 yields to fall by between 6% to 8% which will result in full year yields rising by only 2%. Unit costs (ex-fuel) for FY15 will rise by approx. 4%, which is slightly better than the 5% increase we originally guided, due to higher H2 traffic volumes which will be positive for unit costs.

In summary, we now expect full year traffic to grow by 5% to 86m. This increased traffic and higher load factors, combined with a slightly improved performance on unit costs allows us to cautiously raise our full year profit after tax guidance (from the previous range €580m to €620m) to a range of €620m to €650m. However this guidance, which is about a 21% rise over last year’s net profit, is heavily, reliant upon the final outturn for H2 yields over which we currently have zero visibility”.

Copyright Photo: Keith Burton/AirlinersGallery.com. Boeing 737-8AS EI-CSW (msn 29935) in the old small-titled 1994 livery arrives at Stansted Airport near London.

Ryanair:

 

Malaysia Airlines MH 17 investigators are unable to go to the crash site due to fighting in eastern Ukraine

Malaysia logo-1

CNN is reporting the following concerning the on-going investigation of the shoot down of Malaysia Airlines flight MH 17 in eastern Ukraine:

“International investigators and observers were again prevented from reaching the crash site of Malaysia Airlines Flight 17 on Tuesday (July 29) by fierce fighting in the area between pro-Russian rebels and Ukrainian forces.

The Dutch Justice Ministry said the team was unable to leave the city of Donetsk because “there is too much fighting at the moment on and near the route to the disaster site.”

Read the full report: CLICK HERE

WestJet reports a record 2Q net profit of $51.8 million, will operate Boeing 767-300 ERs, Encore orders 5 more Q400s

WestJet (Calgary) today announced its second quarter results for 2014, with net earnings of $51.8 million (all amounts in Canadian dollars), or $0.40 per fully diluted share, as compared with the net earnings of $44.7 million, or $0.34 per fully diluted share reported in the second quarter of 2013. Based on the trailing twelve months, the airline achieved a return on invested capital of 13.7 per cent, consistent with the 13.7 per cent reported in the previous quarter.

“We had a great second quarter, reporting record earnings, exceeding our ROIC target for the eighth consecutive quarter, and achieving an on-time performance rate of 84.5 per cent, a year over year improvement of 3.5 percentage points,” said WestJet President and CEO Gregg Saretsky. “We continue to execute on our growth plans, including new service to Dublin, Ireland, success with our fare bundles initiative, and the expansion of WestJet Encore. Encore celebrated its first birthday in June, recently welcomed its one-millionth guest, and exercised five additional purchase options for Q400 aircraft. I want to thank all of our 10,000 WestJetters for their commitment to providing our award winning brand of friendly caring service, which is the foundation of our success.”

On July 7, WestJet announced that it was in the advanced stages of sourcing aircraft for its entry into wide-body service. A natural, next-step evolution for the airline, WestJet has recently selected four Boeing 767-300 ER aircraft (below) which will initially operate on routes between Alberta and Hawaii during the winter season beginning in late 2015. The airline’s current winter service between Alberta and Hawaii, via two Boeing 757-200s operated by Thomas Cook, is ending in the spring of 2015. WestJet expects to expand its operation into overseas markets starting in the summer of 2016. Further announcements regarding WestJet’s wide-body schedule will be released at a later date.

WestJet 767-300 WL (95)(Flt)(WestJet)(LRW)

Image: WestJet.

On July 28, 2014, WestJet’s Board of Directors declared a cash dividend of $0.12 per common voting share and variable voting share for the third quarter of 2014, to be paid on September 30, 2014, to shareholders of record on September 17, 2014. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.

In other news, WestJet Encore Ltd. has signed a firm purchase agreement for five Bombardier Q400 NextGen airliners. This transaction is a conversion of a batch of five options booked by the carrier’s parent company WestJet and follows the first conversion of five option aircraft announced on March 27, 2014, bringing the number of option aircraft exercised to 10. The initial total of 25 option aircraft was part of the original contract announced on August 1, 2012 that included WestJet’s firm order for 20 Q400 NextGen airliners.

WestJet Encore launched in June 2013 operating 10 departures daily to two destinations with two Bombardier Q400 NextGen aircraft and 131 employees. Today, it operates 90 departures daily from hubs in Calgary, Alberta and Toronto, Ontario to 19 destinations with 13 Bombardier Q400 NextGen aircraft and approximately 500 employees. The airline has announced plans to introduce service to Québec City, Québec; Fredericton, New Brunswick and Penticton, British Columbia in 2015.

Copyright Photo: Matt Dueck/AirlinersGallery.com. WestJet will become a new Boeing 767-300 operator. The airline will trade in its wet leased Boeing 757-200s (currently operated by Thomas Cook Airlines) for larger wide-body Boeing 767-300 ERs in 2015. The pictured Boeing 757-28A N750NA (msn 26277) was previously operated by North American Airlines in the WestJet brand.

WestJet:

FAA proposes a $12 million civil penalty against Southwest Airlines, Southwest has 30 days to respond

Federal Aviation Administration (FAA) (Washington) has issued this statement concerning Boeing 737 maintenance issues by Southwest Airlines (Dallas) and a contractor:

The U.S. Department of Transportation’s Federal Aviation Administration (FAA) is proposing a $12 million civil penalty against Southwest Airlines for failing to comply with Federal Aviation Regulations in three separate enforcement cases related to repairs on Boeing 737 jetliners operated by the Dallas-based airline.

The FAA alleges that beginning in 2006, Southwest conducted so-called “extreme makeover” alterations to eliminate potential cracking of the aluminum skin on 44 jetliners. The FAA conducted an investigation that included both the airline and its contractor, Aviation Technical Services, Inc., (ATS) of Everett, Wash. Investigators determined that ATS failed to follow proper procedures for replacing the fuselage skins on these aircraft. FAA investigators also determined that ATS failed to follow required procedures for placing the airplanes on jacks and stabilizing them. All of the work was done under the supervision of Southwest Airlines, which was responsible for ensuring that procedures were properly followed.

Southwest returned the jetliners to service and operated them when they were not in compliance with Federal Aviation Regulations, the FAA alleges. The regulatory violations charged involve numerous flights that occurred in 2009 after the FAA put the airline on notice that these aircraft were not in compliance with either FAA Airworthiness Directives or alternate, FAA-approved methods of complying with the directives. The FAA later approved the repairs after the airline provided proper documentation that the repairs met safety standards

“Safety is our top priority, and that means holding airlines responsible for the repairs their contractors undertake,” said U.S. Transportation Secretary Anthony Foxx. “Everyone has a role to play and a responsibility to ensure the safety of our transportation system.”

During its investigation, the FAA found that ATS workers applied sealant beneath the new skin panels but did not install fasteners in all of the rivet holes during the timeframe for the sealant to be effective. This could have resulted in gaps between the skin and the surface to which it was being mounted. Such gaps could allow moisture to penetrate the skin and lead to corrosion. As a result of the improper repairs, these airplanes did not comply with Federal Aviation Regulations.

The FAA also alleges that ATS personnel failed to follow requirements to properly place these airplanes on jacks and shore them up while the work was being performed. If a plane is shored improperly during skin replacement, the airframe could shift and lead to subsequent problems with the new skin.

In the third case, the FAA alleges that Southwest Airlines failed to properly install a ground wire on water drain masts on two of its Boeing 737s in response to an FAA Airworthiness Directive addressing lightning strikes on these components. As a result, the aircraft were not in compliance with Federal Aviation Regulations. The airplanes were each operated on more than 20 passenger flights after Southwest Airlines became aware of the discrepancies but before the airline corrected the problem.

“The FAA views maintenance very seriously, and it will not hesitate to take action against companies that fail to follow regulations,” said FAA Administrator Michael Huerta.

Southwest Airlines has 30 days from the receipt of the FAA’s Civil Penalty letter to respond to the allegations.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-3H4 N363SW (msn 26574) prepares to land at Baltimore/Washington (BWI).

Southwest Airlines:

Here is a new safety video by United Airlines

United Airlines (Chicago) has issued a new safety video with this message:

We’re onboarding a new safety video. Nothing is more important than the safety of our customers and employees, so we’ve incorporated creative elements to maintain the interest of even our most frequent flyers flight after flight. Underscoring the message that safety is global, the video showcases locations throughout United’s broad route network.

Copyright Photo: Boeing 787-8 N26906 (msn 34829) taxies to the gate at Los Angeles.

United Airlines:

Video:

Airbus terminates the order for six Airbus A380s for Skymark Airlines

 

A380 MSN162 SKYMARK TRANSFER TO  STATION 30

Airbus (Toulouse) has issued this short statement:

Following discussions with Skymark Airlines (Tokyo) and in light of the airline’s expressed intentions in respect of the A380, Airbus has in accordance with its contractual rights, notified Skymark Airlines that the purchase order for the six A380s signed in 2011 has been terminated. Airbus is reserving all its rights and remedies.

Read more background information from ZipanguFlyer: CLICK HERE

Copyright Photo: Airbus. Msn 162 was due to become JA380A with Skymark. It will now go to another operator.

Skymark Airlines: AG Slide Show

 

Boeing delivers the first 787-9 to ANA

Boeing (Chicago and Seattle) and All Nippon Airways (ANA) (Tokyo) yesterday (July 28) celebrated the delivery of the airline’s first 787-9 Dreamliner.

ANA will become the world’s first airline to operate both the 787-8 and 787-9 variants of the Dreamliner family when the airline launches 787-9 services on domestic Japanese routes in August.

With this delivery, ANA will have 29 787s in its fleet, more than any other operator in the world.

The 787-9 complements and extends the 787 family. With the fuselage stretched by 20 feet (6 meters) over the 787-8, the 787-9 will fly up to 40 more passengers an additional 450 nautical miles (830 kilometers) with the same exceptional environmental performance – 20 percent less fuel use and 20 percent fewer emissions than similarly sized airplanes.

ANA has 29 more 787-9s on order with commitments for 14 more. Sixty customers from around the world have ordered more than 1,000 787s, with more than 160 currently in operation.

Copyright Photo: Steve Bailey/AirlinersGallery.com. Boeing 787-9 N1792B (msn 34522) became JA830A on the handover.

ANA: AG Slide Show

Are the days numbered for Martinair?

Martinair‘s (Amsterdam) days could be number. The cargo subsidiary of the Air France-KLM Group could be sold to a third party and even shut down i.e. “internal restructuring”. The cargo divisions of the Air France-KLM Group continue to bring down the group financially. As part of its first half financial report, the Group issued this statement concerning the cargo divisions, including Martinair:

Second Quarter 2014 cargo revenues amounted to 669 million euros, down 5.1% and by 1.9% on a constant currency basis. Faced with a slower than expected recovery, the group continued to reduce full-freighter capacity (down 8.6%). In consequence, total capacity decreased by 2.0%. Traffic decreased by 1.6%, leading to a 0.3 point increase in load factor to 63.2%. Unit revenue per Available Ton Kilometer (RATK) increased by 1.1% on a constant currency basis (-2.1% on a reported basis).

The operating result improved slightly to -45 million euro, up 5 million euros.

The recovery in demand being slower than expected, the group has initiated a strategic review of its full-freighter business, with different scenarios under consideration. Having already decided in October 2013 to reduce its full-freighter fleet to 2 aircraft in Paris and 8 aircraft in Amsterdam by 2015, the group is now looking to further reduce its Amsterdam-based full-freighter exposure either through a partnership with a third party or through internal restructuring. In consequence, the group has recorded an impairment of 106 million euros in its Second Quarter 2014 accounts.

First Half 2014 cargo revenues amounted to 1,344 million euros, down 4.3% and by 1.6% on a constant currency basis. Traffic was stable for a -1.5% decline in capacity, leading to a 1.0 point increase in load factor to 64.0%. Unit revenue per Available Ton Kilometer (RATK) was stable on a constant currency basis (down 2.7% on a reported basis).

On a constant currency basis, cargo unit cost was down 1.7% in the First Half (down 3.9% on a reported basis). The operating result improved by 21 million euros to -79 million euros.

Will Martinair be sold or disbanded? It is unlikely to remain as it is today.

Copyright Photo: Ton Jochems/AirlinersGallery.com. McDonnell Douglas MD-11 (F) PH-MCY (msn 48445) taxies at the Amsterdam base.

Martinair: AG Slide Show

Malaysia Airlines considers a new name, brand and livery

Malaysia Airlines (Kuala Lumpur), owned by a majority share by a holding company of the Malaysian government, is considering changes in the the wake of the two tragic accidents this year.

According to RT.com, the government is considering a rebrand, a different ownership restructure, a possible new name and an adjustment of its route network.

Malaysia Airlines is very likely to change.

As far as the livery, the two ill-fated Boeing 777-200 ERs wore the older 1987 livery (above) which features the red and blue Kelantan Wau Bulan (Moon Dragon Kite) tail logo which has been seen in the headlines over and over, especially with the debris in eastern Ukraine. Any brand refresh would probably retire this iconic and historic logo.

Read the full article: CLICK HERE

Top Copyright Photo: Richard Vandervord/AirlinersGallery.com. Boeing 737-8FZ 9M-MLH (msn 31723) is pictured in action at Phuket, Thailand in the 1987 color scheme.

Malaysia Airlines: AG Slide Show

Below Copyright Photo: Ivan K. Nishimura/AirlinersGallery.com. Malaysia refreshed the red and blue Kelantan Wau Bulan (kite) livery in 2010 with this new twin arc look while retaining the kite tail logo. Boeing 737-8H6 9M-MSE (msn 40147) passes through Honolulu on delivery.

Below Copyright Photo: Michael B. Ing/AirlinersGallery.com. When Malaysia introduced the new Airbus A380, the airline unveiled this special A380 livery (for only the A380s) in 2012. The red and blue kite morphed into a blue kite for the A380s. Is this enough of a change? Probably not. Airbus A380-841 9M-MNB (msn 081) departs from London (Heathrow).

Bottom Copyright Photo: Christian Volpati/AirlinersGallery.com. When MSA was split into Malaysian Airline System (MAS) and Singapore Airlines, Malaysian (later Malaysia Airlines) originally introduced this livery in 1972. As you will note, the original livery featured a red and white kite tail logo. Dropping this historic logo will be a tough decision for the airline but unfortunately it is now a tarnished logo. Boeing 737-2H6 9M-MBH (msn 20926) prepares to depart from the gate at Kuala Lumpur.

Poll:

 

Jetairfly to expand flights to Florida

Jetairfly (TUI Airlines Belgium) (Brussels) will return to Sanford (near Orlando) on October 24 where it will operate twice weekly Boeing 767-300 ER flights on a Brussels-Miami-Sanford-Brussels routing per Airline Route.

The carrier will also add a separate third weekly return trip to Miami.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 767-341 ER OO-TUC (msn 24844) taxies from the gate at Brussels.

Jetairfly: AG Slide Show

United to end San Francisco-Guadalajara serve on September 21

United Airlines (Chicago) will end service to Guadalajara, Mexico from its San Francisco hub on September 21 per Airline Route.

Copyright Photo: Mark Durbin/AirlinersGallery.com. Airbus A320-232 N475UA (msn 1495) taxies from the gate at San Francisco International Airport (SFO) in the retro 1972 “A320 Friend Ship” color scheme.

United Airlines (current livery): AG Slide Show

United Airlines (historic liveries): AG Slide Show

Delta announces free entertainment options on all domestic aircraft

Delta 777-200 Economy Inflight Entertainment (Delta)(LRW)

Delta Air Lines (Atlanta) today announced it will begin offering free entertainment options on all of its domestic aircraft and two-cabin regional jets beginning on August 1.

According to the airline;

“The move is the most far-reaching effort by an airline to provide hit movies, popular television shows, music and video games for free. With the introduction of Delta Studio and the airline’s investments to update the interiors of its aircraft, Delta is setting the standard for customers when it comes to free entertainment across more than 1,000 aircraft.”

All Delta customers, in every class of service on flights longer than one and a half hours, will have access to a selection of free entertainment options, either at their seat or through their laptops, mobile and tablet devices. Free entertainment options are available on flights with seat-back entertainment systems or on demand video streaming onboard Delta’s Wi-Fi-equipped aircraft.

“Through the introduction of Delta Studio our customers have yet another reason to choose Delta and a different travel experience,” said Tim Mapes, senior vice president – Marketing. “Delta continues to be driven by customer feedback which has consistently placed the desire to be entertained at the top of the list of ways to improve our customers’ time in the air.”

Delta customers seated in BusinessElite, First Class and Economy Comfort will have free, unrestricted access to in-flight entertainment on all international flights worldwide. Customers traveling in economy on all international flights will also have access to free content. Delta completed installation of seat-back entertainment systems on its international fleet in 2013.

Customers traveling on domestic flights in BusinessElite, First Class and Economy Comfort will have free access to all in-flight entertainment. Domestic economy customers will have access to free content which includes all of Delta’s live satellite TV channels, music selections and game options through seat-back entertainment systems as well as movie or TV selections such as ‘The Hunger Games: Catching Fire’ or ‘Frozen’ on seat-back systems in August as well as streaming content through in-flight Wi-Fi.

Additional premium content will be available for purchase in economy including the latest movie titles such as ‘Need for Speed’ or ‘Rio 2,’ HBO and SHOWTIME programming as well as on-demand TV shows like ‘About a Boy’ or ‘The Middle.’ Delta’s full entertainment line-up for the month of August is available in Sky magazine.

Delta 737 Economy In-Flight Entertainment (Delta)(LRW)

Seat-back In-flight Entertainment

Delta offers 18 channels of live satellite TV on select aircraft and up to 250 movies, hundreds of TV shows, 2,300 songs and a selection of games on aircraft with seat-back entertainment systems. Delta is the only U.S. carrier to offer personal, on-demand entertainment at every seat on all long-haul international flights.

Delta has 140 domestic aircraft with seat-back entertainment systems installed and recently announced that it will be updating more of its domestic narrowbody aircraft through 2016. These fleet interior modifications will add seat-back entertainment to 56 Boeing 757-200, 43 Boeing 737-800s and 57 Airbus A319 aircraft. Additionally, more than 100 new Airbus and Boeing aircraft are already scheduled to be delivered with seat-back entertainment through 2018.

In-flight streaming through onboard Wi-Fi

Customers traveling on any domestic Delta or Delta Connection two-cabin aircraft equipped with Wi-Fi will be able to stream free movies and TV options directly to their mobile devices while in flight by using Gogo’s video player app. The Fly Delta app will include an integrated player for iOS devices. Customers who have downloaded the app before their flight can easily access streamed content from Delta aircraft for playback while in-flight.

With more than 900 domestic and international aircraft equipped with in-flight Wi-Fi, Delta operates the world’s largest fleet of internet connected aircraft available to more than 400,000 customers on more than 4,000 flights daily. Delta’s in-flight connectivity continues to expand with the installation of the service on its international fleet. All Boeing 777, 767, 747, Airbus A330 and trans-oceanic Boeing 757 aircraft are scheduled for completion by the end of 2015, bringing the total number of Wi-Fi connected aircraft in Delta’s fleet to more than 1,000.

Artist Spotlight and Billboard Partnership

In June, Delta also launched its new music discovery platform for popular and emerging artists called Delta Artist Spotlight. The monthly program kicked off with newcomer Sam Smith and his debut album, ‘In The Lonely Hour’ by introducing his music to millions of passengers through overhead music during boarding and deplaning as well as offering custom content selections for aircraft equipped with seat-back entertainment systems. July featured Scottish electronic band Chvrches and Canadian-born songstress Kiezsa will be highlighted in the month of August.

Delta launched an industry-first partnership with Billboard in July to provide new ergonomically designed earbuds on flights more than 250 miles that feature seat-back and overhead entertainment. As one of the world’s most influential music brands, Billboard brings a new level of expertise to the redesigned earbuds resulting in better sound quality and improved comfort. The earbuds are complimentary for all customers traveling on all international flights as well as flights between New York and Los Angeles, San Francisco or Seattle/Tacoma. Customers seated in domestic economy or Economy Comfort can purchase the earbuds for $2.

Copyright Photos: Delta Air Lines.

Delta Air Lines Aircraft Slide Show (Current Livery): AG Slide Show

American to introduce the Miami to Cap-Haitien, Haiti route on October 2

American Airlines (Dallas/Fort Worth) will launch new daily service between Miami International Airport (MIA) and Cap-Haitien, Haiti (CAP), adding a new international destination to the airline’s growing global network. Customers can now book travel on the new route for travel beginning October 2, 2014, subject to government approval.

The new route supplements American’s long-standing service to Port-au-Prince, Haiti, and will be operated with a Boeing 737-800.

Copyright Photo: Luimer Cordero/AirlinersGallery.com. Boeing 737-823 N980AN (msn 33203) arrives at the Miami hub.

American Airlines (current): AG Slide Show

Virgin America to go public, 2014 Giants logo jet is unveiled with photos of dedicated fans!

Virgin America Inc. (San Francisco) today announced that it has filed a registration statement with the Securities and Exchange Commission for a proposed initial public offering (IPO) of its common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined.

Barclays and Deutsche Bank Securities are acting as joint book-running managers and as representatives of the underwriters for the proposed offering.

A registration statement relating to the offering of Virgin America’s securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective.

Read the analysis by Bloomberg Businessweek: CLICK HERE

Top Copyright Photo: Mark Durbin/AirlinersGallery.com. As we reported in June, Virgin America announced a new contest for dedicated San Francisco Giants baseball fans to be pictured on an Airbus A320. Airbus A320-214 N849VA (msn 4991) has now been unveiled in its latest 2014 version which features the words “Fly Together” which is actually composed of small pictures of SF Giants fans who won the contest!

Virgin America announced a new contest for photos of N849VA on their blog:

Hey there plane spotters! Do you have a knack for picking livery out of the clear blue sky? Well then, we’ve got the contest for you. Upload an original photo of our FLY TOGETHER San Francisco Giants plane, featuring the game faces of the most die-hard Giants fans, to Instagram or Twitter using the #FLYTOGETHER hashtag between July 28 – September 23, 2014 for a chance to throw the first pitch at AT&T Park on Virgin America Day and more.

The first round (July 28 – August 12, 2014) winner scores:

The opportunity to throw the first pitch on Virgin America Day at the San Francisco Giants vs. Philadelphia Phillies game August 16, 2014 at AT&T Park
Two tickets to the game
Two roundtrip tickets to any one of our 20 domestic destinations
The second round (August 13 – September 23, 2014) winner will walk away with:

Two roundtrip tickets to any one of our 20 domestic destinations..
Click here for official rules. Void where prohibited. No purchase necessary to win.

Keep your eyes on the sky and get busy plane spotting! If you’re unsure how to get started here’s Sergio Romo showing you how it’s done.

Virgin America A320-200 N849VA (14-Giants-Fly Together)(Close-Up)(Virgin America)(LR)

Virgin America: AG Slide Show

Air France-KLM reduces its first half net loss to $824.6 million

Air France (Paris) and KLM Royal Dutch Airlines (Amsterdam) reported a net loss of €614 million ($824.6 million), an improvement of €185 million ($248.4 million).

As part of the expanding Transavia lower-fare operations the Group issued this statement:

In the Second Quarter of 2014, Transavia capacity was up 4.8%, reflecting the accelerated development of Transavia France (up 10%) and the repositioning of Transavia Netherlands (up 3% including a 6% reduction in charter capacity). Traffic rose 6.0%, leading to a record high load factor of 90.7% (up 0.9 point). Unit revenue was down 1.7%. Transavia’s total revenue stood at 296 million euros, up 5.0%. The operating result was -6 million euros, down 3 million euros year-on-year.

In the First Half of 2014, Transavia traffic increased by 6.9% for capacity up 5.8%, leading to a 0.9 point increase in load factor to 89.2%. Unit revenue was down 2.6%. Total revenue stood at 435 million euros, up 4.5%, while the unit cost per ASK decreased by 0.8%, but increased by 0.5% on a constant currency basis. The operating result decreased by 10 million euros to -64 million euros, mainly due to the ramp up of Transavia France.

Overall the Group issued this outlook:

Delivery on the Transform 2015 plan is fully on track. However, as indicated at the beginning of the month, the operating environment remains tough, with industry overcapacity on certain long-haul routes, notably North America and Asia, impacting yields. This trend comes on top of the persistently weak cargo demand and the challenging situation in Venezuela already identified in the First Quarter.

Under these conditions, as indicated at the beginning of the month, 2014 EBITDA is expected to be between 2.2 and 2.3 billion euros. Strong capital discipline will enable the group to remain on track in terms of debt reduction and achieve its objective of 4.5 billion euros in net debt in 2015.

Read the full report: CLICK HERE

Top Copyright Photo: Brian McDonough/AirlinersGallery.com. Air France’s Airbus A380-861 F-HPJE (msn 052) with the special logo to celebrate 50 years of France-China diplomatic relations.

Air France: AG Slide Show

KLM: AG Slide Show

Transavia (Netherlands): AG Slide Show

Transavia (France): AG Slide Show

Hop!: AG Slide Show

Fleet Information:

Air France 6.30.14 Fleet (LRW)

KLM 6.30.14 Fleet (LRW)

Bottom Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 747-406 PH-BFF (msn 24202) completes its final approach to the runway at Toronto (Pearson).

Delta to launch the Salt Lake City-Amsterdam route on May 1

Delta Air Lines (Atlanta) will launch a new international route from its Salt Lake City hub to KLM’s Amsterdam hub on May 1. The new route will be operated five days a week using Boeing 767-300 aircraft according to Airline Route. It will become daily service on May 17.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-3P6 ER N156DL (msn 25354) arrives at Tokyo (Narita).

Delta Air Lines (current): AG Slide Show

Chautauqua Airlines to be merged into Shuttle America, ending a long career

Republic Airways Holdings (Indianapolis) is an airline holding company that owns Chautauqua Airlines, Republic Airlines (2nd) and Shuttle America. The group is consolidating operations in order to reduce costs.

CEO Bryan Bedford issued a short statement to the employees of the group concerning the closure of Chautauqua Airlines before the end of the year. The group intends to consolidate the Chautuaqua Embraer ERJ operations into the Shuttle America operating certificate. Chautauqua will be shut down.

Chautauqua Airlines was established on May 3, 1973, in Jamestown, Chautauqua County, New York State and began operations on August 1, 1974 using two 15-passenger Beech 99 aircraft. It was one of earliest Allegheny Commuter carriers. It became an USAir Express (later US Airways Express) carrier in 1979.

Besides the Allegheny/USAir/US Airways lineage, Chautauqua has operated under the America West Express, American Connection, Continental Express, Frontier Airlines (2nd), Midwest Connect, Trans World Express and United Express brands.

Copyright Photo: Jay Selman/AirlinersGallery.com. SAAB 340A N125CH (msn 125) displays 1976 Allegheny Commuter livery.

Flybe to fly the Aberdeen-London City route, replacing British Airways

Flybe (Exeter) is saving the Aberdeen to London City route, with twice daily flights starting on Monday, October 27, 2014. The route be flown with the pictured Bombardier DHC-8-402 (marketed as the Q400).

The news follows British Airway’s recent announcement that it would be withdrawing from the route at the end of the summer season, and after serious concern around the future of the service that is considered crucial given passenger demand that reflects the strength of the economy in the north of Scotland.

The airline has also announced five more routes to its 2014-15 Winter Schedule including two that are brand new, namely between Birmingham and Berlin (Tegel) with Embraer 175 aircraft and from East Midlands to Aberdeen (weekdays) also with Embraer 175 aircraft. The airline’s daily service between Exeter and Newcastle also returns from October 26, together with two winter ski routes to Geneva from Cardiff and Inverness that start on 20th December 20.

In total, Flybe’s 2014-15 Winter program now features 105 routes offering customers a choice of up to 2,809 flights a week: 16 routes being brand new, with a further 11 that include seasonal routes returning or being extended for the first time through winter.

Copyright Photo: Nik French/AirlinersGallery.com. Once painted in the special “Low cost, but not at any cost” color scheme, Bombardier DHC-8-402 (Q400) G-JEDP (msn 4085) is now painted in the 2014 purple livery.

Flybe: AG Slide Show

Current Flybe routes from London (City):

Flybe LCY 7.2014 Route Map

 

Norwegian continues to build up its presence at London’s Gatwick Airport, reports a 2Q net profit of $20.5 million

Norwegian Air Shuttle’s (Norwegian.com) (Oslo) route network from London Gatwick continues to expand. Norwegian is adding four new destinations this winter; Madeira and La Palma for the sun-seekers and Grenoble and Salzburg for the ski enthusiasts.

Norwegian is also increasing the number of weekly departures on its routes from London Gatwick to Lanzarote, Rome and Larnaca.

From October 28 and November 1, respectively, Norwegian offers sun-seekers two weekly flights from London Gatwick to the Portuguese island of Madeira and one weekly flight to La Palma in the Canary Islands. Those more keen on white and powdery conditions in the Alps this winter, can from December 13 fly nonstop to Grenoble and Salzburg once a week.

Today, Norwegian is a major player at London Gatwick airport. The airline established a crew base at the airport in 2013 and now offers 41 routes from London Gatwick. Norwegian has eight Boeing 737-800 aircraft based at London Gatwick today as well as around 90 pilots and 200 cabin crew members.

On the financial side, Norwegian (NAS) reported a second quarter 2014 net profit of 128 million NOK ($20.5 million). According to the carrier, “The second quarter is characterized by strong growth and a record high load factor, and influenced by significant, one-off costs, a weak Norwegian currency and high oil prices. The strike from labor union Parat earlier this year alone cost Norwegian over 100 million NOK in lost revenue.

The second quarter figures also reflect Norwegian’s growth strategy and the company’s goal to fill all its new seats. Despite significant costs related to the start-up of the long-haul operation and higher costs due to the weak Norwegian currency, the unit cost (CASK) is down, strengthening Norwegian’s competitive advantage further. Over the past year, Norwegian has introduced seven Dreamliner aircraft to its long-haul operation.

The total revenue in the second quarter was over 5 BNOK, up 26 percent from the same quarter last year. The pre-tax result (EBT) was -137 MNOK. 6.4 million passengers chose to travel with Norwegian during the second quarter, which is an increase of 16 percent and almost 900 000 passengers more than the same period last year. The company’s traffic growth (RPK) was considerably higher at 46 percent, which reflects that each of Norwegian’s passengers on average flies significantly longer than they did a year ago.”

Record high load factor

Norwegian realized a strong production growth (ASK) of 41 percent. The growth is, naturally, stronger in new markets. Despite Norwegian’s strong capacity growth, the company is still filling its seats. The load factor in this quarter was 80 percent, up three percentage points from the same quarter last year, which is record high for a second quarter.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 737-8JP LN-NGT (msn 41125) taxies at Palma de Mallorca (PMI) with Anton K.H. Jakobsen on the tail.

Norwegian: AG Slide Show

Current routes from London Gatwick:

Norwegian 7.2014 LGW Route Map (LRW)

Ryanair to launch new Manchester winter services

Ryanair (Dubin) has announced it will launch a new Manchester winter route to/from Shannon as part of an extended Manchester winter 2014 schedule, with 24 routes in total, including four other new routes to Barcelona, Fuerteventura, Gran Canaria and Lisbon and extra frequencies to Madrid, Riga and Rome.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Boeing 737-8AS EI-DPK (msn 33610) arrives for landing at Tenerife Sur.

Ryanair: AG Slide Show

 

ANA to become the first operator of the stretched Boeing 787-9 on August 4

ANA (All Nippon Airways) (Tokyo) will become the world’s first airline to operate the new stretched version of the Boeing Dreamliner when it launches services on domestic Japanese routes in August with the 787-9 variant of the aircraft.

Deliveries to ANA of the 787-9, an extended fuselage model of the aircraft, from Boeing’s Everett site in Washington are due to begin on July 27. The first aircraft will arrive in Tokyo on July 29. The aircraft achieves even better fuel economy than the 787-8, recording an improvement of 23% (*1), and also has approximately 20% more seating and cargo capacity (*2), resulting in a further reduction in operating costs. The aircraft will contribute to the continued expansion of ANA’s business, particularly in its international network.

In advance of bringing the plane into scheduled commercial service, ANA is going to operate a special commemorative flight for the ‘Dreamliner’ on August 4, 2014. ANA will fly Japanese and American elementary school children living in Japan on a flight for the next generation of air passengers. The aircraft will fly from Tokyo’s Haneda Airport to fly over Mount Fuji, one of Japan’s best known landmarks and newest World Heritage Site. The TOMODACHI logo will be displayed on the new aircraft, in support of the initiative to strengthen Japanese-US ties.

ANA 787-9 DomoDachi (ANA)(LR)

About the TOMODACHI logo:

ANA signed the sponsorship agreement in 2012 for the public-private partnership TOMODACHI Initiative led by the US Embassy in Japan and the US-Japan Council to strengthen US-Japan ties. An opportunity was created to promote these principles and expand these activities by displaying the TOMODACHI logo on three aircraft to fly on routes between the US and Japan.

While the aircraft is expected to show lower operating costs and improved environmental performance as a result of even better fuel economy, the 787-9, like the 787-8, makes use of state-of-the-art technology to provide customers with a new level of in-flight comfort through innovations such as improved cabin humidity, reduced discomfort from cabin pressure changes, and larger windows and luggage storages.

ANA’s first 787-9 will be delivered with domestic route specifications and will be equipped with 395 seats, 60 more than the 787-8 when flown on domestic routes. The aircraft will begin service on domestic routes from August onwards and, from the next fiscal year beginning in April, 2015, ANA will introduce the new aircraft on international routes. ANA was the launch customer for the Dreamliner and is the world’s biggest operator of the 787, having ordered a total of 80 aircraft, including 36 787-8s (28 already delivered) and 44 787-9s.

The fuel savings achieved from the 787 aircraft already in service are sufficient to operate 500 round trips from Tokyo to Frankfurt and are reducing CO2 emissions by 150,000 tons a year. When all 80 Dreamliners are in operation, the CO2 reduction will be 450,000 tons, with enough fuel saved to operate 1,400 round trips to Frankfurt.

The introduction of this new, advanced aircraft will accelerate ANA’s growth strategy including the development of new routes and increased flight frequencies on existing routes, enabling ANA to serve passengers better and making it even more competitive.

(*1) The fuel economy comparison is based on the Boeing 767-300 ER
(*2) The seat number comparison is based on the number of seats in cabins fitted for domestic routes.

The cargo comparison is based on the cargo capacity by weight.

ANA 787-9 Seating (ANA)(LR)

ANA CEO’s statement on the reliability and performance of the new 787 batteries:

A year has passed since we recommenced regular flights of Boeing 787 on June 1 of last year with a comprehensive battery strategy after the emergency landing of ANA Flight 692 at Takamatsu Airport on January 16 of last year.

Since then we have operated approximately 26,000 flights with over 4.7 million passengers and about 100,000 tons of cargo and mail. Regarding the renovated batteries, we have monitored their operating conditions on a daily basis and regularly removed them from the aircraft for inspection. We have confirmed that they are operating normally.

The ANA Group is making every effort to ensure safe flight operations in order to provide peace of mind to our customers. We look forward to serving you on board the comfortable and environmentally friendly 787.

Osamu Shinobe
President & CEO
All Nippon Airways, Co. Ltd.

June 2, 2014

On-Time Reliability of the 787 versus the 777 and 767:

ANA 787 On-Time Reliability

Copyright Photo: Steve Bailey/AirlinersGallery.com (click on the photo for the full size view). Boeing 787-9 N1792B (msn 34522) will become JA830A on the handover.

ANA: AG Slide Show

LAN Airlines to add back the Boeing 787 on the Santiago-Lima-Los Angeles route on October 14

LAN Airlines (Chile) (Santiago) will resume Boeing 787-8 Dreamliner service on the Santiago-Lima-Los Angeles route on October 14. The 787 will replace a Boeing 767-300 on a daily basis per Airline Route.

Copyright Photo: Alvaro Romero/AirlinersGallery.com. Boeing 787-8 CC-BBA (msn 38471) prepares to land at the Santiago de Chile base (SCL).

LAN Airlines: AG Slide Show

 

United to drop the Chicago O’Hare-Topeka route on September 3

United Airlines (Chicago) is ending United Express service from Topeka, Kansas to the Chicago (O’Hare) hub on September 3 according to Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Embraer ERJ 145XR (EMB-145XR) N18101 (msn 145590) arrives at the Chicago O’Hare hub.

United Airlines (current): AG Slide Show

United Express/ExpressJet: AG Slide Show

Delta to introduce Seattle/Tacoma-Puerto Vallarta flights on December 20

Delta Air Lines (Atlanta) is adding another new route from its growing Seattle/Tacoma hub. SEA-Puerto Vallarta, Mexico service will be initiated on December 20 with Boeing 737-800s. The route will be operated on a weekly basis (three days a week during the Christmas-New Year holidays) per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-832 N390DA (msn 30536) climbs away from the runway at Los Angeles International Airport.

Delta Air Lines (current):

 

KLM to launch a new route to Bogota and Cali on March 31

KLM Royal Dutch Airlines (Amsterdam) will expand its long-haul service to South America next year. KLM will launch a new scheduled service to Colombia’s capital, Bogota, and Cali, the country’s third-largest city. From March 31, 2015, KLM will fly three times a week operating a Boeing 777-200 on flight KL 745. The circle flights will start in Amsterdam, stopping in Bogota and Cali, and returning directly to Amsterdam. The service will be part of KLM’s new summer schedule and will operate on Tuesdays, Thursdays and Saturdays.

Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 777-206 ER PH-BQP (msn 32721) in the special “Delft Blue” color scheme taxies at Toronto (Pearson).

KLM: AG Slide Show

 

Adriatic Skyways commences charter operations

Adriatic Skyways logo

Adriatic Skyways (Dubrovnik) has started charter operations from Basle/Mulhouse/Freiburg (EuroAirport) to Pristina using a wet leased Denim Air Fokker F.28 Mk. 0100 (Fokker 100) PH-LND according to ch-aviation.

The company describes itself:

Adriatic Skyways has joined forces with the Dutch AOC Holder Denim Air ACMI B. V. The flights will be operated by Denim on behalf of Adriatic Skyways, all other commercial operations are run by Adriatic Skyways.

Denim was carefully selected by Adriatic Skyways to become its single and exclusive airline partner. Denim has established an impressive track record as a regional aircraft operator. They have operated on behalf of airlines, companies, tour operators and other groups since 1996. Denim focuses on operational excellence, rather than ticket sales. The optimization of the flight operation in terms of reliability, punctuality, and passenger satisfaction has the highest priority.

Denim operates Embraer E190, Fokker 50 and Fokker 100, and confirms that they have these aircraft available.

Adriatic Skyways is established to promote and develop airline traffic from the Balkan region. Its expertise lies in the commercial operation of an airline, rather than the operational. Adriatic Skyways focuses on the contacts with tour operators, local tourism agencies, hotels, governments, etc, in order to increase traffic and tickets sales from the region. The business model excludes starting its own AOC to stay lean and low cost, and therefore Adriatic Skyways has selected Denim Air ACMI as its operator. The aircraft are in Adriatic Skyways livery and the flight program is managed by Adriatic Skyways. The entire flight experience for the passanges is an Adriatic Skyways product.

Copyright Photo: Paul Bannwarth. Denim Air’s Fokker F.28 Mk. 0100 (Fokker 100) PH-LND (msn 11320) carries joint titles for this new operation. Oddly the titles on the aircraft “Adriatic Sky”.

Adriatic Sky-Denim Air F.28 Mk 0100 PH-LND (14)(Grd) BSL (PBW)(LRW)

Atlantis European Airways adds its first Airbus A320

Atlantis European logo

Atlantis European Airways (Yerevan) has added its first Airbus A320, its first aircraft. Former Armavia A320-211 EK32008 (msn 229) has been acquired and is being prepared for service in Prague according to Skyliner.

The company describes its activities:

Atlantis European Airways (AEA) LLC is an air carrier, which was established in Armenia with a strong purpose to improve Armenia’s tourism services’ infrastructure as well as to support the country’s small business development opportunities. Atlantis European Airways LLC is operating code-share flights with Austrian and Czech Airlines from Yerevan via Vienna and Prague to other destinations. One of the main targets of the business strategy of Atlantis European Airways is the integration of the company with the largest alliances of overseas airlines worldwide. The overall mission of Atlantis European Airways is to attract corporate and non-corporate partners for long-term collaboration and encourage them to become members of the company as a result of which they will be offered the richest variety of services provided by Atlantis European Airways . It realizes charter flights on requests. Air tickets are being sold all over Armenia via travel agencies the number of which reaches around 40.

Can Malaysia Airlines survive two major air disasters?

Malaysia Airlines (Kuala Lumpur) is still in crisis mode after the savage downing of flight MH 17 over the Russian-speaking rebel-held area of the eastern Ukraine. The airline now avoids flying over the Ukraine.

Yesterday the flag carrier issued this statement about MH 17:

“Following the agreement Prime Minister Najib Razak brokered with rebel leaders, Malaysia has taken custody of flight MH 17’s black boxes. As the Prime Minister said, they will be passed to the international investigation team for analysis.

The international investigation team, led by the Netherlands, has decided to pass the black boxes to the UK Air Accidents Investigation Branch for forensic analysis. It is normal procedure for black boxes to be sent for analysis to the nearest laboratory authorized by the International Civil Aviation Association.

The black boxes will therefore be flown to Farnborough, UK, accompanied by Malaysian experts and other members of the international investigation team.”

Meanwhile on the financial side, the airline is also hurting. Load factors and yield are reportedly declining given the attention the airline is receiving in the media.

Previously on May 15 the airline reported a growing quarterly net loss of RM443 million ($139.5 million) for the three months ending on March 31, 2014 compared to a loss of RM279 million ($87.8 million) for the same quarter a year ago.

Bloomberg Businessweek is exploring the question of whether the airline can survive as we know it given this double tragedy and declining fortunes and cash flow.

According to the magazine, “MAS executives are focusing on finding a way to save the company. The carrier this week is going to present a plan to its parent, state-run Khazanah Nasional, Bloomberg News reported. Bankruptcy is one option. Taking the company private is another.”

Most likely the carrier will continue to operate in some form but it will probably change.

Read the full article: CLICK HERE

Copyright Photo: Karl Cornil/AirlinersGallery.com. Can Malaysia Airlines, with declining numbers, remain an Airbus A380 operator? The A380 is the flagship aircraft for the carrier but if it can’t fill the seats it may be the wrong aircraft for the airline. Airbus A380-841 9M-MNF (msn 114) arrives in London (Heathrow) with special “100th A380″ markings.

Malaysia Airlines: AG Slide Show

Tyrolean Airways to operate a Bombardier Q400 for Swiss for the domestic Zurich-Lugano route

Austrian Airlines (Vienna) took delivery of its 15th Bombardier DHC-8-402 (OE-LGO, msn 4281) on July 21. The turboprop is operated by lower-cost Tyrolean Airways under the Tyrolean AOC and the Austrian brand.

The group has announced it will operate the type on a wet lease basis for fellow Lufthansa Group carrier Swiss International Air Lines (Zurich) on a Swiss domestic route starting on November 1 between the Swiss hub at Zurich and Lugano. In the future, four flights each day will be operated on this route. By deploying the larger aircraft, Swiss will be able to increase its capacity on the route by 50 percent.

With the arrival of OE-LGO, the fleet of the Austrian Airlines Group will reach a total of 76 aircraft. All but one Austrian-titled aircraft is operated by Tyrolean Airways.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Sister-ship Bombardier DHC-8-402 (marketed as the Q400) OE-LGD (msn 4027) lands at Basel/Mulhouse/Freiburg (BSL).

Austrian Airlines: AG Slide Show

Turkish Boeing 737-9F2 TC-JYA is pulled to safety and passengers evacuated after a fuel truck catches on fire in Nigeria

Turkish Airlines (Istanbul) Boeing 737-9F2 ER TC-JYA (msn 40973), pictured above, was reportedly slightly damaged at Kano, Nigeria on Tuesday night (July 22) as it was being refueled. The fuel truck, which was refueling the airliner, suddenly caught on fire. The Boeing 737 was quickly pulled out of the way and the passengers were safely evacuated, just in time. The aircraft was in-transit from Kano to N’djamena, Chad as flight TK 587. The flight was cancelled pending an inspection for any damages.

Read the full report from the Guardian: CLICK HERE

Copyright Photo: James Helbock/AirlinersGallery.com. Boeing 737-9F2 ER N973TK (msn 40973) became TC-JYA when it was handed over on December 9, 2011.

Turkish Airlines: AG Slide Show

 

U.S. and European carriers are resuming flights to Israel

EasyJet (easyJet.com) (UK) (London-Luton) has issued this statement about its flights to Israel:

The safety and security of easyJet’s passengers and crew is the airline’s highest priority. ‎

Due to the FAA lifting its instruction to all United States’ airlines to suspend their flights to Israel, and the European safety regulator EASA following suit, easyJet will operate its services to and from Tel Aviv as scheduled from Friday July 25.

easyJet will also operate one return flight this afternoon between London Gatwick and Tel Aviv. ‎

easyJet will continue to monitor the safety advice on travel to and from Tel Aviv from all relevant authorities.

easyJet flies to and from Tel Aviv from the UK, Switzerland, Germany and Italy.

Bloomberg Businessweek: How Israel convinced international airlines to return to Tel Aviv: CLICK HERE

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Airbus A320-214 G-EZTL (msn 4012) lands at Tenerife Sur.

EasyJet (UK): AG Slide Show

United reports second quarter net income of $919 million, a 51% increase

United Airlines (UAL) (Chicago) today reported second quarter 2014 net income of $919 million, an increase of 51 percent year-over-year, or $2.34 per diluted share, excluding $130 million of special items. Including special items, UAL reported second quarter 2014 net income of $789 million, or $2.01 per diluted share.

United’s consolidated passenger revenue per available seat mile (PRASM) increased 3.7 percent in the second quarter of 2014 compared to the second quarter of 2013.

Second-quarter 2014 consolidated unit costs (CASM), excluding special charges, third-party business expenses, fuel and profit sharing, decreased 0.2 percent year-over-year on a consolidated capacity reduction of 0.1 percent. Second-quarter 2014 CASM, including those items, increased 2.2 percent year-over-year.

The company generated $1.5 billion of operating cash flow in the second quarter of 2014.
UAL ended the second quarter with $6.8 billion in unrestricted liquidity.

The company earned a 10.3 percent return on invested capital for the 12 months ended June 30, 2014.
UAL’s Board of Directors authorized a $1.0 billion share repurchase program, which the company expects to complete within the next three years.

“I am encouraged by the solid progress we made in the second quarter. Our team is focused on improving our operations and service and on continuing to improve year-over-year revenue performance and cost control,” said Jeff Smisek, UAL’s chairman, president and chief executive officer. “The $1 billion share repurchase program we announced today demonstrates our progress and commitment to increasing value for our shareholders and the confidence we have in our plan.”

Second-Quarter Revenue and Capacity

For the second quarter of 2014, total revenue was $10.3 billion, an increase of 3.3 percent year-over-year. Second-quarter consolidated passenger revenue increased 3.6 percent to $9.0 billion, compared to the same period in 2013. Ancillary revenue per passenger in the second quarter increased 7.9 percent year-over-year to more than $21 per passenger. Second-quarter cargo revenue decreased 1.7 percent versus the second quarter of 2013 to $232 million. Other revenue in the second quarter increased 1.7 percent year-over-year to $1.1 billion.

Consolidated revenue passenger miles increased 0.6 percent and consolidated available seat miles decreased 0.1 percent year-over-year for the second quarter, resulting in a second-quarter consolidated load factor of 85.3 percent.

Second-quarter 2014 consolidated PRASM increased 3.7 percent and consolidated yield increased 3.0 percent compared to the second quarter of 2013. The company’s consolidated domestic PRASM, including both mainline and regional flying, increased 5.6 percent year-over-year.

“We are beginning to see the benefits of the changes we’re implementing to our network and revenue management processes,” said Jim Compton, UAL’s vice chairman and chief revenue officer. “We have more work to do, however, and will continue to make the appropriate adjustments to accelerate our revenue growth.”

Second-Quarter Costs

Second-quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, decreased 0.2 percent compared to the second quarter of 2013. Second-quarter consolidated CASM, including those items, increased 2.2 percent year-over-year. The company’s strong cost performance in the quarter was largely driven by execution on its cost-savings initiatives, as well as by the timing of certain expenses moving to the second half of the year.

Second-quarter total operating expenses, excluding special charges, increased $75 million, or 0.8 percent, year-over-year. Including special charges, total operating expenses increased $192 million, or 2.1 percent, in the second quarter versus the same period in 2013. Third-party business expense was $215 million in the second quarter of 2014.

Second-Quarter Liquidity and Cash Flow

UAL ended the second quarter with $6.8 billion in unrestricted liquidity, including $1.0 billion of undrawn commitments under a revolving credit facility. The company generated $1.5 billion of operating cash flow in the second quarter. During the second quarter, the company had gross capital expenditures of $871 million, excluding fully reimbursable projects. The company made debt and capital lease principal payments of $333 million in the second quarter. For the 12 months ended June 30, 2014, the company’s return on invested capital was 10.3 percent.

The company’s long-term capital structure goals include reducing its non-aircraft related debt and achieving a total gross debt balance, including capitalized operating leases, of approximately $15 billion while maintaining an unrestricted liquidity balance of $5 billion to $6 billion, including its undrawn revolver.

Share Repurchase Program

UAL’s Board authorized a $1.0 billion share repurchase program, which the company expects to complete within the next three years. This amount represents approximately 6 percent of the company’s market capitalization as of yesterday’s closing stock price. Additionally, in the second quarter, the company spent $62 million to retire convertible debt that would have converted into approximately 1.5 million shares of UAL common stock.

“We have laid a sound financial foundation over the last few years by paying off debt and investing in our business. Our earnings profile, coupled with measured capital expenditures and manageable debt maturities, enable us to take this initial step toward returning cash to our shareholders,” said John Rainey, UAL’s executive vice president and chief financial officer. “This action helps us achieve a more balanced allocation of our cash flow.”

UAL may repurchase shares through the open market, privately negotiated transactions, block trades, or accelerated share repurchase transactions from time to time in accordance with applicable securities laws. UAL will repurchase shares of common stock subject to prevailing market conditions and may discontinue such repurchases at any time.

Second-Quarter 2014 Accomplishments

Operations, Employees and Network

United Airlines reported a second-quarter mainline on-time arrival rate (domestic and international) of 76.4 percent, adversely affected by multi-month runway closures in its San Francisco and Newark hubs. The on-time arrival rate is based on flights arriving within 14 minutes of scheduled arrival time.
The company reached a joint collective bargaining agreement with the Professional Airline Flight Control Association (PAFCA) and the Transport Workers Union (TWU) for United’s dispatchers. The dispatchers subsequently ratified the new agreement.

The company began a facilitated negotiations process with the Association of Flight Attendants and held further discussions in advance of scheduled mediation with the International Brotherhood of Teamsters, representing United’s technicians.

United expanded its industry-leading global route network, launching nonstop flights from Houston to Munich; Newark to Santiago, Dominican Republic; and new seasonal service between Chicago and Edinburgh, Scotland, and from Washington, D.C., to both Madrid and Nassau, Bahamas. The company continued to develop its industry-leading Pacific gateway in San Francisco by launching service to Chengdu, China, and announcing service to Tokyo’s Haneda airport. The company also announced new service from Houston to Santiago, Chile, and announced new routes from Chicago to Belize City, Belize; Denver to Panama City; Houston to Punta Cana, Dominican Republic; and San Francisco to Kelowna, British Columbia. The airline announced nine new domestic markets and launched 14 new domestic routes in the second quarter, including United’s first service to Atlantic City, N.J.; Bangor, Maine; Pueblo, Colorado; and St. Cloud, Minnesota.

Finance and Fleet

United raised $949 million of debt financing through enhanced equipment trust certificates at a blended rate of 4.13 percent. The debt proceeds are being used to finance the acquisition of 13 Boeing 737-900 ERs, nine Embraer 175s, two Boeing 787-8 Dreamliners and one Boeing 787-9 Dreamliner.

The company took delivery of 10 Boeing 737-900 ERs and one 787-8 Dreamliner, and also exited from scheduled service nine 757-200s during the quarter.

The company introduced seven highly efficient Embraer 175 aircraft to the United Express fleet. The modern and spacious 76-seat aircraft is the newest addition to the United Express fleet, enabling the airline to offer an improved regional jet experience. These aircraft will largely replace less-efficient 50-seat regional jets, and the company expects to reduce its 50-seat regional jet fleet by 38 aircraft by the end of the year.

United continued installing slimmer, next-generation economy-class seats on certain aircraft, which enables one to two additional rows per aircraft. The airline now offers these seats, which are 10 to 15 percent lighter than the seats they are replacing, on approximately 240 aircraft.

Flyer-Friendly Product, Loyalty Program and Facilities

The company now offers Wi-Fi on more than 290 aircraft, including its entire Airbus fleet, and expects to have more than 450 Wi-Fi-equipped aircraft by the end of 2014.

United began installing its new personal device entertainment system on select aircraft, enabling customers to choose from more than 150 movies and nearly 200 television shows and watch them on their laptops or iOS devices.

United launched its all-new mobile application for the Android platform, offering innovative new features, smoother functionality and an improved touch-friendly design. The new Android app follows the airline’s redesign of its mobile app for the iOS platform.

United announced its 2015 MileagePlus program. Members will earn award miles based on ticket price – specifically the base fare and carrier-imposed surcharges – and MileagePlus status, rather than distance flown.

United consolidated its London Heathrow operation into one terminal in the new Terminal 2: The Queen’s Terminal. United’s 22 Star Alliance partners serving Heathrow are progressively moving to Terminal 2, enabling faster, more convenient connections for customers. United operates more daily flights to Heathrow than any other U.S. carrier.

The company unveiled a new 10-gate, 97,000-square-foot concourse in Boston Logan International Airport’s Terminal B that offers modern conveniences that streamline the airport experience, including self-tagging baggage kiosks, automated self-boarding gates and a new customer service center.

The airline opened new United Clubs at London Heathrow, Boston and San Francisco, featuring the latest airport lounge design concept that it unveiled at United Clubs in Chicago, San Diego and Seattle. The company also opened a new United Global First Lounge in London, offering premium customers more privacy and personal service.

Copyright Photo: Steve Bailey/AirlinersGallery.com. An unique view of the first Boeing 787-9 Dreamliner for United showing off its sleek lines.

United Airlines (current): AG Slide Show

Southwest reports record second quarter net income of $485 million

Southwest Airlines Company (Southwest Airlines and AirTran Airways) (Dallas) today reported its second quarter 2014 results:

Record quarterly net income, excluding special items*, of $485 million, or $.70 per diluted share, compared to second quarter 2013 net income, excluding special items, of $274 million, or $.38 per diluted share. This exceeded the First Call consensus estimate of $.61 per diluted share.

Record quarterly net income of $465 million, or $.67 per diluted share, which included $20 million (net) of unfavorable special items, compared to second quarter 2013 net income of $224 million, or $.31 per diluted share, which included $50 million (net) of unfavorable special items.

Record quarterly operating income of $775 million. Excluding special items, record quarterly operating income of $819 million, resulting in a 16.3 percent operating margin**.

Return on invested capital*, before taxes and excluding special items, for the 12 months ended June 30, 2014, of 17.1 percent, as compared to 8.5 percent for the 12 months ended June 30, 2013.

Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated:

“We are very pleased with our strong second quarter earnings performance. Net income, excluding special items, of $485 million, or $.70 per diluted share, represents our fifth consecutive quarter of record profits. The successful execution of our strategic initiatives continues to contribute significantly to these record profits. Second quarter 2014 total operating revenues reached an all-time quarterly high of $5.0 billion, benefiting from an 8.5 percent year-over-year increase in passenger revenues. Also, we were very pleased with our cost performance. Operating expenses benefited from our strategic initiatives, as well, and were comparable to second quarter last year.

“My hearty congratulations and thanks go to our hard-working and dedicated Employees for our outstanding second quarter results, which resulted in record quarterly profitsharing expense of $127 million. Over the last twelve months, our exceptional earnings performance, combined with our actions to prudently manage our invested capital, produced a 17.1 percent pre-tax return on invested capital, excluding special items (ROIC). This positions us well to meet or exceed our 15 percent pre-tax ROIC target for full year 2014.

“Our network development and optimization efforts continue, and we are very pleased with the performance across our system. Second quarter load factor and passenger revenue yield were records, even with a large percentage of the route system in the conversion or development stage. We announced our initial nonstop offerings from Dallas Love Field with the upcoming sunset of the Wright Amendment restrictions on October 13, and nearly tripled the flights we currently offer at Reagan National Airport, effective November 2 this year. On July 1, we inaugurated international service on Southwest Airlines, with flights to Oranjestad, Aruba; Montego Bay, Jamaica; and Nassau/Paradise Island in The Bahamas. We plan to fully convert AirTran’s remaining international markets and domestic flying by the end of this year. We expect roughly flat 2014 available seat miles, year-over-year, and intend to expand the network in a disciplined manner. For 2015, we currently expect our available seat miles to increase, year-over-year, largely driven by a two to three percent growth in seats from the upgauging of our fleet, along with a higher percentage of our fleet in revenue service post-integration.

“During second quarter, we announced the selection of Amadeus to implement the Altéa reservations solution to support our domestic network, following the successful implementation of Amadeus’ international solution this year. This allows us to replace the legacy reservation system used by Southwest. The AirTran reservation system is expected to be retired at this year’s end.

“Our balance sheet, liquidity, and cash flows remain strong. At the end of second quarter 2014, we had $4.0 billion in cash and short-term investments. For first half 2014, net cash provided by operations was $2.46 billion, and capital expenditures were $907 million, resulting in strong free cash flow* of $1.55 billion. We repaid $119 million in debt and capital lease obligations during first half 2014, and intend to repay an additional $440 million in debt and capital lease obligations in the second half of this year. Thus far this year, we have returned $652 million to Shareholders through the payment of $97 million in dividends and the repurchase of $555 million in common stock. As always, we are committed to maintaining our financial strength and enhancing value to our Shareholders.”

Financial Results and Outlook

The Company’s second quarter 2014 total operating revenues increased 7.9 percent, while operating unit revenues increased 8.4 percent, on a 0.4 percent decrease in available seat miles and a 2.2 percent increase in average seats per trip, all as compared to second quarter 2013. Second quarter 2014 passenger revenues were $4.8 billion, which was an increase of 9.0 percent on a unit basis, as compared to second quarter 2013. A change to previously recorded estimates of tickets expected to spoil in the future resulted in additional passenger revenue of $47 million in second quarter 2014.

Thus far, July passenger revenue trends and bookings are strong. Based on these trends, and considering the strength of the year-ago comparison, the Company expects July 2014 passenger unit revenues to increase in the three percent range, as compared to July 2013.

Total operating expenses in second quarter 2014 increased 0.6 percent to $4.2 billion, as compared to second quarter 2013. Second quarter 2014 profitsharing expense was a record $127 million, compared to $78 million in second quarter 2013. The Company incurred costs (before profitsharing and taxes) associated with the acquisition and integration of AirTran, which are special items, of $38 million during second quarter 2014, compared to $26 million in second quarter 2013. Cumulative costs associated with the acquisition and integration of AirTran, as of June 30, 2014, totaled $466 million (before profitsharing and taxes). The Company expects total acquisition and integration costs to be approximately $550 million (before profitsharing and taxes). Excluding special items in both periods, total operating expenses in second quarter 2014 increased 0.7 percent to $4.2 billion, as compared to second quarter 2013.

Second quarter 2014 economic fuel costs were $3.02 per gallon, including $.05 per gallon in favorable cash settlements from fuel derivative contracts, compared to $3.06 per gallon in second quarter 2013, including $.05 per gallon in unfavorable cash settlements from fuel derivative contracts. Based on the Company’s fuel derivative contracts and market prices as of July 21, 2014, third quarter 2014 economic fuel costs are expected to be in the $2.95 to $3.00 per gallon range, compared to third quarter 2013’s economic fuel costs of $3.06 per gallon. As of July 21, 2014, the fair market value of the Company’s hedge portfolio through 2018 was a net asset of $381 million. Additional information regarding the Company’s fuel derivative contracts is included in the accompanying tables.

Excluding fuel and oil expense, profitsharing, and special items in both periods, second quarter 2014 operating costs increased 1.1 percent from second quarter 2013, and increased 1.7 percent on a unit basis. Based on current cost trends, and excluding fuel and oil expense, profitsharing, and special items, the Company expects a year-over-year increase in its third quarter 2014 unit costs, comparable to the second quarter 2014 year-over-year increase.

Operating income in second quarter 2014 was $775 million, compared to $433 million in second quarter 2013. Excluding special items, operating income was $819 million in second quarter 2014, compared to $479 million in the same period last year, a 71.0 percent increase year-over-year.

Other expenses in second quarter 2014 were $29 million, compared to $70 million in second quarter 2013. The $41 million decrease primarily resulted from $3 million in other losses recognized in second quarter 2014, compared to $47 million recognized in second quarter 2013. In both periods, these losses included ineffectiveness and unrealized mark-to-market amounts associated with a portion of the Company’s fuel hedging portfolio, which are special items. Excluding these special items, second quarter 2014 had $15 million in other losses, compared to $12 million in second quarter 2013, primarily attributable to the premium costs associated with the Company’s fuel derivative contracts. Third quarter 2014 premium costs related to fuel derivative contracts are currently estimated to be $15 million, compared to $22 million in third quarter 2013. Net interest expense in second quarter 2014 was $26 million, compared to $23 million in second quarter 2013.

For the six months ended June 30, 2014, total operating revenues increased 5.2 percent to $9.2 billion, while total operating expenses decreased 0.4 percent to $8.2 billion, resulting in operating income of $991 million, compared to $503 million for the same period last year. Excluding special items, operating income was $1.1 billion for first half 2014, compared to $591 million for first half 2013.

Net income for first half 2014 was $617 million, or $.88 per diluted share, compared to $283 million, or $.39 per diluted share, for the same period last year. Excluding special items, net income for first half 2014 was $611 million, or $.87 per diluted share, compared to $328 million, or $.45 per diluted share, for the same period last year.

Balance Sheet and Cash Flows

As of June 30, 2014, the Company had $4.0 billion in cash and short-term investments, and a fully available unsecured revolving credit line of $1 billion. Net cash provided by operations during second quarter 2014 was $1.34 billion, and capital expenditures were $500 million, generating strong free cash flow of $838 million. The Company repaid $73 million in debt and capital lease obligations during second quarter 2014.

During second quarter 2014, the Company returned $282 million to its Shareholders through the payment of $42 million in dividends and the repurchase of $240 million in common stock, or 7.6 million shares. The Company completed its previous $1.5 billion share repurchase program with the repurchase of $20 million in common stock in early May. On May 14, 2014, the Company’s Board of Directors authorized a new $1 billion share repurchase program, along with a 50 percent increase in the Company’s quarterly dividend. Under the new $1 billion share repurchase program, the Company repurchased an additional $220 million in common stock during second quarter 2014, including $200 million repurchased under an accelerated share repurchase program with a third party financial institution. During second quarter 2014, pursuant to the accelerated share repurchase program, the Company advanced $200 million to the financial institution and received six million shares of the Company’s common stock, representing an estimated 75 percent of the shares the Company expects to purchase under the accelerated share repurchase program. The specific number of shares that the Company ultimately will repurchase under the accelerated share repurchase program will be determined generally based on a discount to the volume-weighted average price per share of the Company’s common stock during a calculation period to be completed during third quarter 2014. At settlement, under certain circumstances, the third party financial institution may be required to deliver additional shares of common stock to the Company, or under certain circumstances, the Company may be required to deliver shares of its common stock or may elect to make a cash payment to the third party financial institution. Pursuant to the settlement of the $200 million accelerated share repurchase program executed in first quarter 2014, the Company received an additional 1.7 million shares in common stock during second quarter 2014, bringing the total shares repurchased under the first quarter accelerated share repurchase program to 8.6 million.

Fleet

During second quarter 2014, the Company’s fleet increased by seven to 683 aircraft at period end. This reflects the second quarter 2014 delivery of 12 new Boeing 737-800s and three pre-owned Boeing 737-700s, as well as the retirement of one Boeing 737-500. In addition, the Company removed seven Boeing 717-200s from service during second quarter 2014 in preparation for transition out of the fleet.

Boeing 737 NG Delivery Schedule:

Southwest 737NG Delivery Schedule 7.2014 (LRW)

Notes:

*Additional information regarding special items is included in the accompanying reconciliation tables, and see Note Regarding Use of Non-GAAP Financial Measures.
**Operating margin, excluding special items, is calculated as operating income, excluding special items, divided by operating revenues.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-7H4 N280WN (msn 32533) in the Penguin One special livery arrives in Los Angeles.

Southwest Airlines: AG Slide Show

AirTran Airways: AG Slide Show

JetBlue reports record second quarter earnings

JetBlue Airways Corporation (JetBlue Airways) (New York) today reported its results for the second quarter 2014:

Pre-tax income excluding special items1 of $103 million in the second quarter. This compares to pre-tax income of $60 million in the second quarter of 2013.

Gain of $242 million from the sale of its wholly-owned subsidiary LiveTV.

On a GAAP basis, pre-tax income of $345 million in the second quarter.

Net income excluding special items for the second quarter was $61 million, or $0.19 per diluted share.

This compares to JetBlue’s second quarter 2013 net income of $36 million, or $0.11 per diluted share.

On a GAAP basis, net income for the second quarter was $230 million, or $0.68 per diluted share.

“Today, we are pleased to report record second quarter earnings and our seventeenth consecutive quarter of profitability,” said Dave Barger, JetBlue’s Chief Executive Officer. “We saw improved profitability across our network, reflecting the success of ongoing efforts to adapt our products and services to meet our customers’ ever-changing needs. I would like to thank our 15,500 crewmembers for their dedication to running a safe airline and delivering outstanding service to our customers.”

Operational Performance

JetBlue reported record second quarter operating revenues of $1.5 billion. Revenue passenger miles for the second quarter increased 5.7% to 9.6 billion on a capacity increase of 6.0%, resulting in a second quarter load factor of 84.6%, a decrease of 0.3 points year over year.

Yield per passenger mile in the second quarter was 14.25 cents, up 6.3% compared to the second quarter of 2013. Passenger revenue per available seat mile (PRASM) for the second quarter 2014 increased 6.0% year over year to 12.05 cents and operating revenue per available seat mile (RASM) increased 5.6% year over year to 13.12 cents. The shift of the Easter and Passover holidays from March last year to April this year positively impacted second quarter year over year PRASM by approximately two points.

Operating expenses for the quarter increased 9.8%, or $119 million, over the prior year period. Interest expense for the quarter declined 7.5%, or $3 million, due to JetBlue’s focus on debt reduction. JetBlue’s operating expense per available seat mile (CASM) for the second quarter increased 3.5% year over year to 11.88 cents. Excluding fuel and profit sharing, CASM2 increased 5.1% to 7.51 cents.

“We improved margin performance while expanding our network, demonstrating the core strength of our business,” said Robin Hayes, JetBlue’s President. “We remain focused on providing a differentiated product and culture in high-value geography while maintaining competitive costs. We believe this focus will drive improved returns for our shareholders.”

Fuel Expense and Hedging

JetBlue continued to hedge fuel to manage price volatility. Specifically, in the second quarter JetBlue had in place hedges for approximately 15% of its fuel consumption and managed approximately 7% of its fuel consumption using fixed forward price agreements (FFPs). This resulted in a realized fuel price of $3.09 per gallon, a 0.9% increase over second quarter 2013 realized fuel price of $3.06. JetBlue recorded $2 million in losses on fuel hedges that settled during the second quarter.

JetBlue has managed approximately 30% of its third quarter projected fuel requirements using a combination of FFPs, jet fuel swaps and caps. Based on the fuel curve as of July 17th, JetBlue expects an average price per gallon of fuel, including the impact of hedges, FFPs and fuel taxes, of $3.08 in the third quarter.

Liquidity and Cash Flow

JetBlue ended the quarter with approximately $797 million in unrestricted cash and short term investments. In addition, JetBlue maintains $550 million in lines of credit.

During the second quarter, JetBlue repaid approximately $44 million in regularly scheduled debt and capital lease obligations. In addition, JetBlue pre-paid approximately $300 million in debt with the proceeds from the sale of LiveTV. JetBlue plans to repay approximately $185 million in regularly scheduled debt and capital lease obligations in the remainder of 2014, including approximately $58 million in the third quarter.

“We continued to strengthen the balance sheet by paying down debt while enhancing access to liquidity by increasing the number of unencumbered aircraft,” said Mark Powers, JetBlue’s Chief Financial Officer. “We believe these actions will help us maintain a relatively flat invested capital base this year while growing assets, which we expect will help us meet our return on invested capital goal.”

Third Quarter and Full Year Outlook

For the third quarter of 2014, CASM is expected to increase between 0.5% and 2.5% versus the year-ago period. Excluding fuel and profit sharing, CASM in the third quarter is expected to increase between 1.0% and 3.0% year over year.

CASM for the full year is expected to increase between 1.0% and 3.0% over full year 2013. Excluding fuel and profit sharing, CASM in 2014 is expected to increase between 2.5% and 4.5% year over year. Relative to JetBlue’s previous cost outlook, this full year guidance reflects approximately a one point reduction in unit costs excluding fuel and profit sharing primarily due to a reduction of operating expenses in the second half of the year as a result of the sale of LiveTV.

Capacity is expected to increase between 3.0% and 5.0% in the third quarter. For the full year, capacity is expected to increase between 4.0% and 6.0%.

Bloomberg Businessweek: JetBlue considers charging for the first checked bag: CLICK HERE

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A320-232 N709JB (msn 3488) in the special one-off “Binary Code” livery arrives in New York (JFK).

JetBlue Airways: AG Slide Show

American Airlines Group reports a record second quarter net profit of $864 million

American Airlines Group Inc. (American Airlines and US Airways) today reported its second quarter 2014 results:

Second quarter 2014 non-GAAP net profit excluding net special charges was $1.5 billion, a record for any quarter in the history of American Airlines

Second quarter 2014 GAAP net profit was a record $864 million

The Company also announced a capital deployment program, including over $2.8 billion in debt and aircraft lease prepayments, a $1 billion share repurchase program, the initiation of a quarterly cash dividend, and $600 million of additional pension contributions

As part of the program, American’s Board of Directors declared a dividend of $0.10 per share for shareholders of record as of August 4, 2014. The cash dividend is the first declared by American since 1980

For the second quarter 2014, American Airlines Group reported a record GAAP net profit of $864 million. This compares to a GAAP net profit of $220 million in the second quarter 2013, for AMR Corporation prior to the merger. The Company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways excluding special charges and on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group.

On this basis, second quarter 2014 net profit excluding net special charges was $1.5 billion, a record for any quarter in the history of the Company. This represents a 114 percent improvement over the combined non-GAAP net profit of $681 million excluding net special charges for the same period in 2013. See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

“We are very pleased to report the highest quarterly profit in the history of American Airlines,” said Chairman and CEO Doug Parker. “Our merger is off to a great start and our 100,000 team members are doing a wonderful job working together to take care of our customers.

“We are also pleased to announce a capital deployment program that reduces our debt, provides additional pension contributions and returns capital to shareholders. The fact that we are able to implement this program while still funding our significant product improvements, fleet renewal program and integration costs is further evidence of the success of our merger. We have much hard work ahead, but we are extremely encouraged by the great work being done by our team members.”

Revenue and Cost Comparisons

Total revenues in the second quarter were a record $11.4 billion, up 10.2 percent versus the second quarter 2013 on a combined basis, on a 3.1 percent increase in total available seat miles (ASMs). Driven by a record yield of 17.34 cents, up 6.5 percent year-over-year, consolidated passenger revenue per ASM (PRASM) was also a record at 14.57 cents, up 5.9 percent versus the second quarter 2013 on a combined basis.

Total operating expenses in the second quarter were $10.0 billion, up 7.0 percent over combined second quarter 2013. Second quarter mainline cost per available seat mile (CASM) was 13.61 cents, up 3.9 percent on a 3.5 percent increase in mainline ASMs versus combined second quarter 2013. Excluding special charges and fuel, mainline CASM was up 2.2 percent compared to the combined second quarter 2013, at 8.55 cents. Regional CASM excluding special charges and fuel was 15.80 cents, up 5.2 percent on a 0.4 percent decrease in regional ASMs versus combined second quarter 2013.

Liquidity

As of June 30, 2014, American had approximately $10.3 billion in total cash and short-term investments, of which $882 million was restricted. The Company also has an undrawn revolving credit facility of $1.0 billion.

During the quarter, the Company repaid $502 million of debt obligations, which includes approximately $175 million for the settlement of its 7.25% convertible notes with cash. The Company also prepaid $113 million of obligations associated with aircraft debt, $51 million associated with special facility revenue bonds and also used $630 million of cash to purchase aircraft that were previously being leased to the Company.

At June 30, 2014, approximately $791 million of the Company’s unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.53 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars and approximately $86 million valued at 10.6 bolivars, with the rate depending on the date the Company submitted its repatriation request to the Venezuelan government. In the first quarter of 2014, the Venezuelan government announced that a newly implemented system (SICAD I) will determine the exchange rate (which fluctuates as determined by weekly auctions and at June 30, 2014 was 10.6 bolivars to the dollar) for repatriation of cash proceeds from ticket sales after January 1, 2014, and introduced new procedures for approval of repatriation of local currency.

The Company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. However, pending further repatriation of funds, and due to the significant decrease in demand for air travel resulting from the effective devaluation of the bolivar, the Company recently significantly reduced capacity in this market. The Company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for potential impairment.

Capital Deployment Program

The Company also announced a capital deployment program intended to efficiently allocate cash balances over and above those required to fund its business. The program has three key components:

Debt/Lease Prepayments: Since the merger closed in December 2013, the Company has prepaid $420 million of aircraft debt and bond obligations. In addition, the Company plans to prepay $480 million of special facility revenue bond obligations by the end of 2014. It is anticipated that these prepayments will represent a reduction in the Company’s debt going forward. The Company has also used $630 million of cash to purchase aircraft that were previously leased to the Company and anticipates utilizing an additional $370 million of cash in this manner through the remainder of 2014. In addition, the Company has called for redemption of the remaining $900 million principal amount of the 7.5% senior notes due March 15, 2016. In total, these steps represent approximately $2.8 billion of prepayments that will be completed by the end of 2014.

Pension Funding: The Company plans to make supplemental contributions of $600 million to its defined benefit plans in 2014. These contributions would be above and beyond the $120 million minimum required contributions for 2014.

Return to Shareholders: The program includes a share repurchase program and the initiation of a quarterly dividend. The Company’s Board of Directors authorized a $1.0 billion share repurchase program to be completed no later than December 31, 2015. The Board also declared a dividend of $0.10 per share for shareholders of record as of August 4, 2014. The dividend will be paid on August 18, 2014. This is the first cash dividend declared at American Airlines since 1980.

Shares repurchased under the program announced above may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades or accelerated share repurchase transactions. Any such repurchases will be made from time to time subject to market and economic conditions, applicable legal requirements and other relevant factors. The program does not obligate the Company to repurchase any specific number of shares or continue a dividend for any fixed period, and may be suspended at any time at management’s discretion.

Merger Integration Developments

US Airways joined American in the trans-Atlantic joint business agreement with British Airways, Iberia and Finnair and codeshare agreements with British Airways, Iberia and oneworld alliance partner airberlin

Combined operations at 72 airports since the merger

Began harmonizing its network by aligning flying between its hubs. The changes allow the Company to replace smaller regional aircraft with larger mainline aircraft and to redeploy regional jets to other markets to better match aircraft size with customer demand in small and medium sized communities
Announced new mileage redemption options for American Airlines AAdvantage® and US Airways Dividend Miles® members, along with new checked bag policies, and began to align the First and

Fleet and Network Developments

As part of its plan to modernize its fleet, the Company inducted 21 new aircraft during the second quarter

Expanded its European presence with new, seasonal summer service between its hub at Charlotte Douglas International Airport and Barcelona, Brussels, Lisbon and Manchester, U.K.

Strengthened its presence in the Asia-Pacific region with new nonstop service between Dallas/Fort Worth and Hong Kong and Shanghai

Announced twelve new routes in the United States and Canada from Dallas/Fort Worth, Chicago O’Hare, Los Angeles, Charlotte, N.C., Philadelphia and Phoenix, including service between DFW and new destination, Bismarck, N.D.

The Company also began service between DFW and Edmonton, Alberta

Other Developments

Distributed $5.5 million in operational incentive payouts to employees for on-time departures in the month of April; this distribution of $50 per employee is part of the Company’s Triple Play program which measures operational performance as reported in the DOT’s Air Travel Consumer Report (ATCR). To date, the Company’s employees have earned $16.5 million in operational incentive payouts
Honored with two awards from Airfinance Journal, including the 2013 Overall “Deal of the Year” for its merger with US Airways, and the 2013 Airline “Treasury Team of the Year” for its work on American’s debt and lease restructuring, a major aircraft order and other financing

Employees donated more than 13,000 hours to numerous projects in the second quarter. In addition, the Company donated more than $3 million of travel to organizations including American Fallen Soldiers, the Gary Sinise Foundation, the San Diego Air and Space Museum, and Carry the Load
Recognized four employees with the 2014 Earl G. Graves Award for Leadership in Diversity for influencing positive change, setting an example and leaving a lasting impact on those around them
Special Items

In the second quarter, the Company recognized a total of $592 million in net special charges, including:

$253 million net special operating charges, which principally included $163 million of merger integration expenses, a net $38 million charge for bankruptcy related settlement obligations, $37 million in charges relating to the buyout of leases associated with certain aircraft, and $15 million of other special charges

Net $337 million non-cash tax charge, consisting primarily of a $330 million non-cash tax charge related to the Company’s sale of its portfolio of fuel hedging contracts that were scheduled to settle on or after June 30, 2014. This charge reverses a non-cash tax provision which was recorded in Other Comprehensive Income (OCI), a subset of stockholder’s equity, principally in 2009. The provision represents the tax effect associated with gains recorded in OCI principally in 2009 due to a net increase in the fair value of the Company’s fuel hedging contracts

Copyright Photo: Jay Selman/AirlinersGallery.com. American Airlines Airbus A321-231 N114NN (msn 6046) completes its trans-con flight at New York (JFK).

American Airlines (current): AG Slide Show

US Airways: AG Slide Show

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