Frontier announces new routes from Orlando and Las Vegas

Frontier Airlines (2nd) (Denver) is adding new routes from the two biggest leisure markets in the United States, Orlando and Las Vegas.

Today the carrier announced two new routes from Orlando to both Indianapolis and Los Angeles.

From Las Vegas, the ultra low-fare carrier is adding four new routes to Houston (Bush Intercontinental), Miami, Milwaukee and San Francisco.

Additionally, the airline will start new service from Philadelphia to both Fort Myers and Montego Bay.

The new routes begin on October 25.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Airbus A320-214 N227FR (msn 6184) arrives at Dulles International Airport near Washington.

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UPS exceeds forecasts for the second quarter, international operating profit jumps 17%

UPS (United Parcel Service) (UPS Airlines) (Atlanta and Louisville) today announced second quarter 2015 diluted earnings per share of $1.35, a 12% increase over adjusted results for the same period last year. All three segments improved operating profit and margin, led by International and Supply Chain and Freight performance.

The company continued:

UPS-We Love Logistics logo

Highlights:

  • All Segments Improve Profitability and Expand Margins
  • International Operating Profit Jumps 17%
  • Export Shipments up 5.5% with Strong Intra-Europe Growth
  • Supply Chain and Freight Operating Profit Climbs 18%
  • Revenue Growth Dampened by Changes in Currency and Fuel Prices
  • 2015 EPS Growth at Higher End of 6%-to-12% Guidance Range

Currency exchange rates and lower fuel surcharges reduced total reported revenue growth. Total revenue declined 1.2% from the same quarter last year to $14.1 billion. Pricing initiatives continue to drive base rates higher.

“During the quarter, UPS continued to invest for the future by expanding capacity and launching new capabilities that provide higher value to customers,” said David Abney, UPS chief executive officer. “The strong momentum in our International segment is expected to continue and gives us confidence in achieving the upper end of our guidance range.”

On a reported basis, operating profit increased $1.2 billion, and diluted earnings per share was up $0.86. In the second quarter of 2014, UPS reported diluted earnings per share of $0.49, which included a $665 million after-tax charge for the transfer of certain post-retirement liabilities to defined contribution healthcare plans.

Total company shipments increased 2.1% over the second quarter last year to 1.1 billion packages, led by U.S. Deferred Air products and International Export shipments.
Cash Flow

For the six months ended June 30, UPS generated $3.3 billion in free cash flow. The company paid dividends of $1.3 billion, an increase of 9.0% per share over the prior year. UPS also repurchased 13.5 million shares for approximately $1.4 billion.

U.S. Domestic Package

U.S. Domestic revenue increased $140 million over the second quarter last year to $8.8 billion. Shipment growth was led by Deferred Air products up 15% and UPS SurePost which increased more than 8%. Total daily deliveries grew 1.8% due to a slower pace of B2C (business-to-consumer) growth.

Operating profit was $1.2 billion, up $35 million or 3.0% over prior-year adjusted results. Operating margin expanded to 13.6% as improved pricing and productivity offset higher benefit costs.

On a reported basis, operating profit increased $992 million after the transfer of certain post-retirement liabilities to defined contribution healthcare plans, which occurred in the second quarter of last year.

Continued improvements in base rates were offset by lower fuel surcharges. Revenue per package was flat, as changes in fuel surcharges dropped reported yield by almost 300 basis points.

International Package

Currency-adjusted International revenue was up 1.5% over the same period last year. UPS daily Export shipments increased 5.5%, primarily due to an 8.5% increase in intra-Europe shipments. The strong dollar drove U.S. imports higher, while U.S. exports were down slightly.

International operating profit increased $81 million, or 17% over the adjusted results for the same period in 2014. Network improvements, volume growth and pricing initiatives all contributed to expanded operating margin and increased profitability. The segment experienced growth from middle-market accounts and improved premium product sales.

On a reported basis, operating profit increased $108 million after the transfer of certain post-retirement liabilities to defined contribution healthcare plans in the second quarter of last year.

Underlying base rates were up across all regions, though revenue per package decreased 2.4% on a currency-neutral basis. Lower fuel surcharges reduced reported revenue per package by about 350 basis points.

Supply Chain & Freight

Supply Chain & Freight revenue declined 4.5% to $2.2 billion, due to Forwarding revenue management initiatives, currency and lower fuel surcharges at UPS Freight. Operating profits improved $31 million, or 18% over the adjusted results for the same quarter 2014, driven by gains in Forwarding.

On a reported basis, operating profit increased $113 million after the transfer of certain post-retirement liabilities to defined contribution healthcare plans that occurred in the second quarter of 2014.

UPS Forwarding operating profit and margin expanded as the business unit continued to implement a disciplined pricing strategy across key trade lanes. The unit also benefited from improved market conditions and customer mix. Forwarding tonnage and revenue dropped during the quarter, primarily due to revenue management initiatives and the impact of currency fluctuations.

Distribution revenue increased at a mid-single digit growth rate. Growth in Mail services, Healthcare and Aerospace industries contributed to revenue improvements.

UPS Freight revenue declined 2.5% due to lower fuel surcharges and a drop in tonnage driven by changes in customer mix and slowing market growth. LTL (less-than-truckload) revenue per hundredweight growth remained positive, with a 1.4% gain.

Outlook

“The second quarter results reflect continuing gains in our International business,” said Richard Peretz, UPS chief financial officer. “Even though the U.S. economy appears to be growing at a slower pace, our global portfolio and performance reinforces our expectations to attain the higher-end of the guidance range.”

The company’s guidance for 2015 full-year diluted earnings per share is $5.05 to $5.30, a 6% to 12% increase over adjusted 2014 results.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-34AF N302UP (msn 27240) arrives in Anchorage, Alaska.

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Xiamen Air launches the Xiamen – Amsterdam route

Xiamen Airlines (Xiamen Air) (Xiamen) has launched its first route to Europe. The Chinese airline issued this statement:

Xiamen Air logo

On July 26, Xiamen Airlines officially launched the carrier’s very first intercontinental route, the Xiamen-Amsterdam route. The new route marks a key milestone in the airline’s implementation of its globalization strategy.

Xiamen Airlines will operate the new route, flight numbers MF811 and MF812, with a Boeing 787 Dreamliner featuring 4 seats in first class, 18 in business and 214 in economy. The flight departs Xiamen at 11:50 p.m. every Tuesday, Thursday and Sunday, and arrives at Amsterdam’s Schiphol at 5:45 a.m. the next day. The flight duration is 11 hours and 55 minutes. The return journey departs Amsterdam at 12:35 p.m. every Monday, Wednesday and Friday, and arrives in Xiamen at 5:30 a.m. the next day, with a flight duration of 10 hours and 55 minutes. The above are all local times, and were arranged to facilitate connections to other flights after passengers reach their destinations.

The new route complements KLM Royal Dutch Airlines’ existing Xiamen-Amsterdam route — also on a three-times-a-week schedule, signifying that, starting from July 26, there will be six direct flights between Xiamen and Amsterdam weekly.

Xiamen Airlines has upgraded both the air and ground services for the new intercontinental route, with a concerted effort on integrating Chinese cultural elements into its services. As an example, the new tableware for the first class and business class cabins are made of blanc de chine, and authentic highly-reputed lapsang souchong tea will be on offer in the two cabins.

Xiamen Airlines operates a fleet of 119 Boeing jets, which is the biggest all-Boeing fleet in China. The fleet now has 5 Boeing 787-8 Dreamliners, with the sixth to be delivered soon. As part of the expansion plans for further intercontinental routes originating from Fujian province, the airline has ordered 4 more advanced Boeing 787-9aircraft, forming a fleet of 10 Boeing 787s.

Chairman and general manager Che Shanglun explained that Xiamen Airlines will launch a direct Xiamen-Sydney route at the end of this year. Next year, the carrier plans to launch routes to North America, completing a route network covering Europe, America and Australia, and supporting China’s “One Belt, One Road” strategy by creating a “Silk Road in the Sky.”

Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 787-8 Dreamliner B-2762 (msn 41542) taxies at Amsterdam.

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NTSB blames the Southwest Airlines captain for his “failure to comply with standard operating procedures” for the July 22, 2013 hard landing at New York’s LaGuardia Airport

National Transportation Safety Board (NTSB) (Washington) has issued this statement and report on the July 22, 2013 hard landing of a Southwest Airlines Boeing 737-7H4 (N753SW) at New York’s LaGuardia Airport:

NTSB logo

The National Transportation Safety Board determined that the captain’s failed attempt to recover from an unstabilized approach by transferring airplane control at low altitude instead of performing a go-around, caused a hard landing at LaGuardia International Airport (LGA) in Queens, New York.

On July 22, 2013, a Boeing 737, operated as Southwest Airlines flight 345, landed hard, nose-first, on runway 4 at LGA. Of the 144 passengers and five crewmembers on board, eight sustained minor injuries and the airplane was substantially damaged.

Contributing to the accident was the captain’s failure to comply with standard operating procedures during the approach. NTSB found that the first officer was conducting the approach, and the captain took control away from the first officer, but not until the plane was 27 feet above the ground. This late transfer of control from the first officer to the captain resulted in neither pilot being able to effectively monitor the airplane’s altitude and pitch attitude. According to the Southwest Airlines Flight Operations Manual, the captain should have called for a go-around well before this point in the approach instead of trying to salvage the landing.

For example, Southwest’s stabilized approach criteria require an immediate go-around if the airplane flaps are not in the final landing configuration by 1,000 feet above the ground. In this case, the flaps were not correctly set until the airplane was 500 feet above the ground.

Read the full report: CLICK HERE

JetBlue Airways reports second quarter net income of $152 million

JetBlue Airways Corporation (New York) today reported its results for the second quarter 2015:

JetBlue Blueberries logo

 

  • Operating income of $282 million in the second quarter. This compares to operating income of $141 million in the second quarter of 2014.
  • Pre-tax income of $250 million in the second quarter. This compares to pre-tax income excluding special items1 of $103 million in the second quarter of 2014. On a GAAP basis, pre-tax income was $345 million in the second quarter of 2014, which included the gain on sale of JetBlue’s wholly-owned subsidiary LiveTV.
  • Net income of $152 million, or $0.44 per diluted share. This compares to JetBlue’s second quarter 2014 net income excluding special items1 of $61 million, or $0.19 per diluted share. On a GAAP basis, JetBlue’s second quarter 2014 net income was $230 million, or $0.68 per diluted share.
    Financial Performance

JetBlue reported record second quarter operating revenues of $1.6 billion. Revenue passenger miles for the second quarter increased 8.7% to 10.5 billion on a capacity increase of 7.5%, resulting in a second quarter load factor of 85.6%, an increase of 1.0 points year over year.

Yield per passenger mile in the second quarter was 14.28 cents, up 0.2% compared to the second quarter of 2014. Passenger revenue per available seat mile (PRASM) for the second quarter 2015 increased 1.4% year over year to 12.22 cents and operating revenue per available seat mile (RASM) increased 0.4% year over year to 13.17 cents.

Operating expenses for the quarter decreased 1.7%, or $22 million, over the prior year period. Interest expense for the quarter declined 15.8%, or $7 million, as JetBlue continues to reduce its debt. JetBlue’s operating expense per available seat mile (CASM) for the second quarter decreased 8.6% year over year to 10.86 cents. Excluding fuel and profit sharing, second quarter CASM2 increased 0.6% to 7.56 cents.

Operational Performance

System on time departures, or D0, improved 1.7 points year-over-year in the second quarter. System arrival performance, or A14, also improved 3.3 points.

“We are very pleased to report strong second quarter results based on solid demand across our network, safe and efficient operations, and good cost control. I would like to thank our 17,000 crewmembers who continue to inspire humanity on a daily basis.” said Robin Hayes, JetBlue’s President and CEO.

Fuel Expense and Hedging

In the second quarter JetBlue had hedges in place for approximately 19% of its fuel consumption. This resulted in a realized fuel price of $2.13 per gallon, a 31% decrease versus second quarter 2014 realized fuel price of $3.09. JetBlue recorded $30 million in losses on fuel hedges settling during the second quarter.

JetBlue has hedged approximately 14% of its third quarter 2015 projected fuel requirements using a combination of jet fuel swaps and collars. Based on the fuel curve as of July 17th, JetBlue expects an average price per gallon of fuel, including the impact of hedges and fuel taxes, of $1.95 in the third quarter. For the fourth quarter, JetBlue has hedged approximately 15% of projected fuel consumption.

Liquidity and Cash Flow

JetBlue ended the quarter with $915 million in unrestricted cash and short term investments, or about 15% of trailing twelve month revenue. In addition, JetBlue maintains approximately $600 million in undrawn lines of credit.

During the second quarter, JetBlue repaid $39 million in regularly scheduled debt and capital lease obligations and prepaid $84 million in additional debt. JetBlue anticipates paying approximately $145 million in regularly scheduled debt and capital lease obligations during the remainder of 2015 and plans to continue to opportunistically prepay other debt. JetBlue expects to pay approximately $54 million in regularly scheduled debt and capital lease obligations in the third quarter of 2015.

In addition, on June 16 JetBlue entered into an Accelerated Share Repurchase program. JetBlue paid $150 million and received 6.1 million shares at the start of the program, with a subsequent adjustment upon close of the transaction. Ultimately, the total shares purchased by JetBlue will be based on the volume weighted average prices of JetBlue’s common stock during the term of the program.

“We posted another good quarter and continue to make progress strengthening our balance sheet.” said Mark Powers, JetBlue’s Chief Financial Officer. “Looking forward, the execution of the initiatives described at Investor Day last November will increase free cash flow and improve our return on invested capital.”

Third Quarter and Full Year Outlook

CASM excluding fuel and profit sharing is expected to increase between 1.0% and 3.0% in the third quarter 2015 and between zero and 1.5% percent for the full year. This represents a 0.5% reduction to the top end of our CASM excluding fuel and profit sharing guidance range.

Capacity is expected to increase between 8.5% and 10.5% in the third quarter 2015 and between 7.0% and 9.0% for the full year, consistent with prior guidance. At present, we anticipate ending the year at the higher end of our annual capacity guidance.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A321-231 N929JB (msn 6031), operating Mint service, arrives at Los Angeles International Airport (LAX).

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Video: The vision for the comprehensive redesign of New York’s LaGuardia Airport

A presentation that details the redesign, led by Dan Tishman, CEO of Tishman Construction Company and Chair of the Governor’s airport master plan advisory panel.

WestJet reports record second quarter net earnings

WestJet (Calgary) today announced its second quarter results for 2015, with net earnings of $61.6 million (all amounts in Canadian dollars) ($47.3 million US), or $0.49 per fully diluted share, as compared with the net earnings of $51.8 million, or $0.40 per fully diluted share reported in the second quarter of 2014.

The airline continued:

WestJet logo

WestJet achieved an on-time performance rate of 91.3 percent in the second quarter, a year-over-year improvement of 6.8 percentage points, placing WestJet as the top performing North American airline during the quarter. Based on the trailing twelve months, the airline achieved a return on invested capital of 16.0 per cent, up 0.2 percentage points from the 15.8 per cent reported in the previous quarter.

“I would like to congratulate our more than 10,000 WestJetters on these exceptional second quarter results which marked our 5th quarter of consecutive record adjusted net earnings,” said WestJet President and CEO Gregg Saretsky. “The second quarter is historically our most challenging quarter as capacity is transitioned from southern to domestic markets, so it is particularly rewarding to turn in a double digit margin this quarter. With another quarter of record earnings, and after having exceeded our ROIC target for 12 consecutive quarters, we are pleased to announce that we are increasing our target to 13 to 16 per cent, while continuing our commitment to our brand of friendly, caring service and affordable fares.”

WestJet 2Q15 Results Table

On July 27, 2015, WestJet’s Board of Directors declared a cash dividend of $0.14 per common voting share and variable voting share for the third quarter of 2015, to be paid on September 30, 2015, to shareholders of record on September 16, 2015. 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 today announced it has begun rolling out its new inflight entertainment system featuring wireless Internet connectivity and more than 450 movies and television programs. Called WestJet Connect, the system will be activated on all of WestJet’s Boeing 767-300 ER aircraft and more than 30 percent of WestJet’s Boeing Next-Generation 737 aircraft by end of 2015, with installations on the majority of the 737 fleet expected to be completed in 2016.

Mobile devices and tablets using either iOS or Android operating systems will need the latest version of the WestJet app prior to boarding. Guests will also be able to access WestJet Connect using their laptops. Tablet rentals will be available on flights longer than three hours and 20 minutes for guests who do not have their own device. The WestJet app will take guests to the WestJet Connect home page where they can begin accessing content. Seats on WestJet Connect-equipped aircraft have 110-volt and/or USB power outlets, allowing guests the opportunity to charge or power their devices.

At launch, WestJet Connect will feature 85 movies and 329 TV programs, including expanded content in French. Content will be refreshed on a monthly basis and will be offered at no charge for an introductory period. The system’s Internet connectivity will be available at an introductory price of $7.99 plus applicable taxes for the duration of each flight.

Once installation is complete, WestJet Connect will be available on all WestJet flights operated on Boeing Next-Generation 737s or 767-300 ER aircraft.

Copyright Photo: TMK Photography/AirlinersGallery.com. WestJet Airlines’ Boeing 737-8CT WL C-GWSZ (msn 37092) in the special Walt Disney World – Magic Plane scheme arrives at Toronto (Pearson).

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