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Virgin America posts net income of $33.5 million in the third quarter

Virgin America (San Francisco) today reported its financial results for the third quarter of 2013 with operating income of $44.4 million and net income of $33.5 million on total revenue of $387.3 million.   The airline posted an operating margin of 11.5 percent – a 7.2 point improvement for the third quarter, driven largely by a 9.4 percent growth in revenue per available seat mile (“RASM”) over the year-earlier period.

Third Quarter 2013 Financial Highlights

  • Virgin America reported $33.5 million in net income compared to a year-ago loss of $12.6 million, an improvement of $46 million.
  • The Company significantly outpaced all U.S. carriers with year-over-year RASM growth of 9.4 percent on a 3.9 percent decrease in capacity.   Virgin America has now led the industry in RASM growth every month since October 2012.
  • Load factor increased by 0.9 points and yield increased by 7.4 percent year-over-year.
  • Operating revenue was $387.3 million, an increase of 5.2 percent from the third quarter of 2012.
  • Cost per available seat mile (CASM) excluding fuel increased by 4.5 percent year-over-year, largely due to the airline’s expansion into major airports like Newark Liberty International Airport (EWR), increased labor costs, and decreased utilization of the fleet as part of the Company’s plan to improve unit revenue.
  • Year-to-date, Virgin America has generated operating income of $57.3 million, an increase of $94.1 million from the first nine months of 2012.
  • Unrestricted cash was $156.9 million as of September 30, 2013, an increase of $80.9 million since December 31, 2012.

Since taking a pause in its fleet and network expansion, Virgin America is now experiencing improved revenue and profitability performance across its network. Virgin America took delivery of one aircraft in the first quarter of 2013, increasing its total operating fleet to 53 aircraft.  The Company does not plan to increase its fleet again until the second half of 2015, when aircraft on order from Airbus are scheduled for delivery.

Virgin America completed a restructuring of the majority of its debt with investors during May 2013, eliminating more than $300 million of existing debt and accrued interest.  As a result of this restructuring, Virgin America expects its interest expense to substantially decline to approximately $10 million per quarter through 2014.  Had the May 2013 restructuring been completed prior to the beginning of the year, Virgin America’s year-to-date net income would have been approximately $30 million higher.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Virgin America’s Airbus A320-214 N836VA (msn 4480) completes its final bank on the River Approach into Washington’s Reagan National Airport.

Virgin America: AG Slide Show

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How to repair a damaged Boeing 787-8

Boeing (Chicago) is currently repairing the damaged Ethiopian Airlines Boeing 787-8 ET-AOP (msn 34744) at London’s Heathrow Airport. As previously report, the new airliner was damaged by fire on July 12, 2013.

According to this report by The Seattle Times, Boeing’s repair team is gluing a giant composite plastic skin patch inside a temporary building surrounding the rear section of the aircraft. The tail has been removed.

Boeing builds the fuselage as a single piece so this repair is very delicate and intricate for this new technology. The repairs should take five weeks.

Read the full report: CLICK HERE

Read the initial report of the fire: CLICK HERE

Follow-up report on the fire by the AAIB: CLICK HERE

Copyright Photo: Antony J. Best/AirlinersGallery.com. ET-AOP is undergoing this delicate repair inside this specially-designed and fabricate housing which surrounds the rear fuselage.

Bearskin Airlines Metro III crashes on approach into Red Lake, Ontario, five dead

Bearskin Airlines (Sioux Lookout, ON) Fairchild Swearingen SA227AC Metro III C-FFZN (msn 785) being operated as flight JV 311 crashed on approach with five passengers and two crew into Red Lake Airport in northwest Ontario on November 10. The airliner burst into flames when it hit the ground. Five people were killed and two survived. The flight had departed Sioux Lookout, Ontario bound for Red Lake.

The airline is celebrating 50 years of flying in 2013. John Hegland founded the company on July 17, 1963, naming it after Bearskin Lake, a remote First Nations community located 270 miles northeast of Sioux Lookout.

Video: Flying on the Metroliner and landing at Red Lake:

Video: Report on the crash:

Read the full report from the Calgary Herald: CLICK HERE

Bearskin logo-1

Route Map:

Bearskin 11.2013 Route Map

FAA will not review California Pacific’s application until next year, CPA furloughs all employees

California Pacific Airlines (Carlsbad) is becoming the poster child as the hard-luck airline wannabe that could not fly because  of the FAA’s inability to review and approve their Part 121 AOC application. The terrible saga continues. The company has suspended operations and furloughed all employees after receiving an official notification from the Federal Aviation Administration (FAA) that it cannot review their AOC application until at least next year according to this report by U-T San Diego. The would-be airline had until September 13 to resubmit its application which it did. The dream of CPA’s founder, Ted Vallas, 91, is slowly getting away from him. Vallas proposed the airline in 2010 and had raised at least $11 million from investors.

Read the full report: CLICK HERE

Copyright Photo: James Helbock/AirlinersGallery.com. Meanwhile the pictured Embraer ERJ 170-100LR N760CP (msn 17000006) arrived in Nashville, TN in late July from Arizona.

California Pacific: AG Slide Show

Flybe to cut another 500 jobs as it becomes profitable again in the first half

Flybe (Exeter) plans to cut another 500 jobs after it posted its first half-year profit in two years.

Read the full report from Reuters: CLICK HERE

The company issued this financial statement:

Results for the six months to September 30, 2013:

Flybe announces a significantly improved financial performance under its new management team.  In addition, a new phase of efficiency improvements announced today will secure a strong base for future growth.

Key financial highlights
      H1 2013/14£m          H1 2012/13£m               Change%
Total revenue under management * 477.3 396.3 20.4
Less: joint venture revenue (126.2) (55.5) 127.4
Group revenue 351.1 340.8 3.0
Adjusted profit/(loss) before tax, restructuring and surplus capacity costs and revaluation on USD aircraft loans ** + 12.2 (2.3)                     N/M
Adjusted profit/(loss) before tax and restructuring *** + 17.1 (1.6)                     N/M
Profit/(loss) before tax + 13.8 (1.6)                     N/M
Profit/(loss) after tax + 13.6 (1.6)                     N/M

*   Includes Flybe’s joint venture, Flybe Finland.

** Adjusted profit/(loss) before tax, restructuring and surplus capacity costs and revaluation on USD aircraft loans defined as profit/(loss) before tax, restructuring and surplus capacity costs of £4.1m (2012/13: £nil) and revaluation gains on USD aircraft loans of £5.7m (2012/13: £0.7m).  Surplus capacity costs represent the costs incurred in H1 2013/14 relating to capacity that is considered by management to be surplus as a result of the restructuring decisions.

***      Adjusted profit/(loss) before tax and restructuring defined as profit/(loss) before tax and restructuring costs of £3.3m (2012/13: £nil).

+   H1 2012/13 has been restated for the impact of adopting the revised requirements of IAS 19 Employee Benefits as detailed further in Note 2 to the condensed financial statements. The replacement of the interest cost and expected return on plan assets with a new interest charge on the net defined benefit liability led to a £0.3m increase in the reported loss for that period.

Results summary

1. First two phases of the Turnaround Plan on track to deliver savings of £40m this year and £45m in 2014/15.

2. A 20.4% increase to £477.3m (H1 2012/13: £396.3m) in revenue under management (including Flybe Finland, the joint venture with Finnair) largely driven by increased contract flying activity in Finland.

3. A 3.0% increase in group revenue to £351.1m.

4. A £13.8m profit before tax (H1 2012/13: loss of £1.6m).

5. A £10.5m operating cash inflow before increase in restricted cash and restructuring costs (H1 2012/13: £1.6m)

Operational highlights (H1 2013/14)

UK Airline:

-    6.2 million scheduled seats flown, in line with last year.

-    5.6% increase in passengers to 4.3 million.

-    3.6ppts increase in load factor to 68.6%.

-    0.9% increase in passenger revenue per scheduled seat to £50.35 (H1 2012/13: £49.92).

-    1.3% increase in total revenues to £328.2m.

-    1.3% decrease in costs per seat to £51.30.  On a constant currency and fuel price basis, costs per seat decreased by 3.1%.

-    4.7% increase in UK regional sector share for the Flybe brand to 55.1%.

Flybe Finland:

-    26.4% of Flybe’s revenue under management (H1 2013/14: £126.2m; H1 2012/13: £55.5m).

-    £110.6m contract flying revenue (H1 2012/13: £36.7m)

-    84.6% increase to 2.4 million in total seats flown, of which white label flying totalled 2.0 million (H1 2012/13: 0.8 million).

Turnaround update

Flybe aims to become the best local airline in Europe delivering unrivalled regional connectivity.

Flybe will have two engines of growth:

A regional branded airline giving a nimble and customer-friendly, scheduled service for both business and families.  This brings people together within a country and connects people in the regions to international carriers at metropolitan airports.

A regional white label model where Flybe will become the leading regional provider for mainstream European airlines.

The already announced Phase 1 and 2 cost savings are being successfully implemented.

Major management and organizational change: new Chairman and Chief Executive Officer have been appointed.  Senior executive appointments well advanced, including a new Chief Commercial Officer already in place.

Flybe’s operations have been reorganized into a single management structure.

An Immediate Action plan is being announced today and is already being implemented with three elements:

1.   Optimise configuration: rationalise route network, review fleet mix, remove surplus capacity and improve aircraft and crew utilisation.

2.   Reduce costs further: all aspects of the business are being reviewed to drive further savings.

3.   Improve commercialisation: optimise pricing and revenue management, refocus network development, strengthen route management, step change marketing impact and develop trading partnerships.

This will deliver further benefit of £7m this year and £26m next year with around 500 proposed redundancies and estimated one-off and surplus capacity costs of £14m this year plus a further £27m in 2014/15.

Finnair JV is now profitable; further improvements are being targeted by enhancing operational delivery, reducing scheduled risk flying losses and embedding ‘lean manufacturing’ techniques.

Update: According to Reuters, majority shareholder Rosedale Aviation Holdings has sold its entire 48.1 percent stake in the airline to institutional investors.

Read the full report: CLICK HERE

Copyright Photo: Antony J. Best/AirlinersGallery.com. Embraer ERJ 190-200LR (ERJ 195) G-FBEB (msn 19000057) lands at Southampton.

Flybe: AG Slide Show

Norwegian to open a new base at Madrid next summer

Norwegian Air Shuttle (Norwegian.com) (Oslo) continues its expansion in Europe and opens new base in Madrid for the summer of 2014. Norwegian will open six new routes from Madrid to Stockholm, Oslo, Helsinki, Hamburg, Warsaw and London.

The base in Madrid is Norwegian’s fifth Spanish base along with Alicante, Malaga, Las Palmas and Tenerife.

Six new routes from Madrid from June 2014: 

Norwegian will have two Boeing 737-800 aircraft at the base in Madrid. In addition, 100 employees will be recruited locally and six new routes launched.

Madrid – Stockholm
Four times a week on Mondays, Wednesdays, Fridays and Sundays, starting June 4, 2014

Madrid – Oslo
Three times a week on Tuesdays, Thursdays and Saturdays, starting June 3, 2014

Madrid – Helsinki
Three times a week on Mondays, Wednesdays and Fridays starting on June 4, 2014

Madrid – Hamburg
Four times a week on Mondays, Wednesdays, Fridays and Sundays, starting June 4, 2014

Madrid – Warsaw
Twice a week, on Tuesdays and Saturdays, starting June 3, 2014

Madrid – London
Daily from June 2, 2014

Madrid – Copenhagen
Increases from three to four times a week between April and June 2014. As of July 2014 there are flights daily between Madrid and Copenhagen.

Copyright Photo: Richard Vandervord/AirlinersGallery.com. Boeing 737-86N LN-NOQ (msn 32658) departs the runway at London (Gatwick).

Norwegian: AG Slide Show

Delta and Virgin Atlantic outline their schedule plans for the summer of 2014

Delta Air Lines (Atlanta) and Virgin Atlantic Airways (London) today outlined details of a new joint venture flight schedule beginning summer 2014, aligning their services and offering more flight choices for travelers on both sides of the Atlantic.

The two airlines are putting the customer at the forefront of their partnership with the new schedule that starts March 30, 2014, combining their slots at London Heathrow to offer maximum customer convenience, particularly for business travelers.

Beginning, April 2, 2014, Delta will move its arrival and departure terminal for several important business markets to join Virgin Atlantic in Heathrow Terminal 3. This includes its London to New York-JFK, London to Boston, and new London to Seattle/Tacoma services and means the two airlines will co-locate on all its New York and Boston flights to London Heathrow. The move will allow for convenient connections and a seamless customer experience for customers flying with Virgin and Delta, including access to Virgin Atlantic’s award winning Clubhouse for all business class passengers.

Delta, in cooperation with Virgin Atlantic, will also operate a second daily service between London Heathrow and Detroit Metropolitan Airport effective June 1, 2014. The service will be particularly appealing to corporate customers needing an early morning arrival into London while offering more schedule choice for customers between London and the U.S. Midwest.

This additional flight will complement Delta’s previously announced new West Coast route between Seattle/Tacoma and London Heathrow, which will launch on March 29, 2014.

Virgin Atlantic is also making significant schedule changes. It is moving its VS1 Heathrow to Newark service from a late afternoon departure to a morning departure. This flight will be particularly attractive to business travelers: it will allow ‘same-day meetings’ to be held in the New Jersey area, while an earlier departure on the return flight means passengers can be in central London for the start of the working day.

This service is part of nine daily flights between London Heathrow and the New York area by the joint venture partners. The new schedule will include departures every 30 minutes during the early evening peak and then hourly until 10.30 p.m. from New York-JFK to London Heathrow and a spread of seven daily flights from London Heathrow to New York-JFK, including two late afternoon and early evening departures.  It also includes two conveniently timed departures to and from Newark.

Virgin Atlantic has also retimed its Heathrow to Boston service to depart two hours later in the afternoon. This offers more flexibility for the two airlines’ customers with Delta’s Heathrow to Boston service departing in the morning. Virgin Atlantic’s evening departure from Boston will also move two hours later, giving greater schedule choice to travelers.

In September, Delta and Virgin Atlantic welcomed the decision by the U.S. Department of Transportation (DOT) to approve the carriers’ joint venture by granting antitrust immunity on routes between North America and the UK. This ruling confirmed the clear consumer benefits of the partnership, enabling the airlines to deepen their cooperation, offering more flight choices for travelers on both sides of the Atlantic and improving the travel options for business customers in the New York to London market.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Delta’s Airbus A330-223 N855NW (msn 621) arrives in Los Angeles.

Delta Air Lines: AG Slide Show

Virgin Atlantic Airways: AG Slide Show

Bottom Copyright Photo: Eddie Maloney/AirlinersGallery.com. Virgin Atlantic Airways’ Boeing 747-443 G-VROS (msn 30885) lands in Las Vegas.

Is Evergreen International Airlines planning to close its doors on November 30? The company says no but is exploring other options

Evergreen International Airlines (McMinnville, Oregon and Marana, Arizona) despite a public denial by its founder and CEO that the rumors are false, it has been reported in the local Oregon media as planning to lay off 131 employees and ceased operations on November 30. The company recently sold off its helicopter division as we reported as it attempts to reorganize and seek new “strategic alternatives” and partners.

It is unclear if the Evergreen Wings and Waves Waterpark and the Evergreen Aviation and Space Museum would also be affected if any final decision is made.

Read the full report from the The Oregonian: CLICK HERE

The company is privately held and issued this statement:

As has been previously reported in the press, Evergreen’s business has been adversely impacted over the past several years by decreased demand in military spending and weakness in global economic markets. Management has moved to aggressively address these challenges, including through the divestiture of businesses and assets and the significant reduction of secured debt. Evergreen is in discussions with its significant constituencies and is exploring available strategic alternatives with those constituencies. While Evergreen generally does not comment on market rumor or conjecture, rumors that a decision has been made to cease operations at this time are false. Evergreen remains committed to continuing to address the current business environment with its customers.

Delford M. Smith
Chief Executive Officer,
Evergreen International Aviation, Inc.

Copyright Photo: Stefan Sjogren/AirlinersGallery.com. Evergreen International Airlines’ Boeing 747-230F N490EV (msn 24138) touches down in Stockholm (Arlanda).

Evergreen International Airlines: AG Slide Show

Air Armenia starts passenger flights after adding an Airbus A320 and a Boeing 737-500

Air Armenia A320-200 (13)(Flt)(Air Armenia)(LR)

Air Armenia (Yerevan) commenced operations as a cargo airline on March 18, 2003 with Antonov An-12s. With the demise of Armavia, the airline commenced scheduled passenger flights on October 27 from Yerevan to Moscow (Vnukovo) with a Boeing 737-500 (737-505 EK73797, msn 26297, delivered on September 29). Local charter flights were started previously on October 23. The airline has also added an Airbus A320 (A320-214 EK32039, msn 1439, delivered on November 4).

Read the full report from ArmeniaNow.com: CLICK HERE

Images: Air Armenia. Air Armenia has also added a new look with the new jet aircraft.

Video: EK73797 arrives in Yerevan.

Air Armenia logo

Lufthansa Cargo takes delivery of its first Boeing 777F freighter, will enter service on November 19 to New York

Lufthansa Cargo 777F D-ALFA (03)(Ldg) FRA (Lufthansa Cargo)(LR)

Lufthansa Cargo (Frankfurt) finally accepted its first Boeing 777F freighter, the pictured 777-FBT D-ALFA (msn 41674) on November 8. D-ALFA arrived at the Frankfurt base the following day. The new freighter will enter revenue cargo service on November 19 with nonstop service to New York (JFK).

Copyright Photo: Lufthansa Cargo.

Video: Behind the scenes at Lufthansa Cargo (in German):

Lufthansa Cargo: AG Slide Show

Ethiopian Airlines takes delivery of its first Boeing 777-300 ER via GECAS, enters service today

Ethiopian 777-300 ET-APX (03)(Tko)(Ethiopian)(LRW)

Boeing (Chicago) has delivered a 777-300 ER (Extended Range) jet to GE Capital Aviation Services (GECAS) for lease to Ethiopian Airlines (Addis Ababa). The 777-300 ER is now the largest airplane in the Ethiopian flag-carrier’s fleet and will provide it with increased capacity and improved operating economics on key routes from its base in the Ethiopian capital, Addis Ababa.

The pictured 777-36N ER ET-APX (msn 42101) was handed over on November 7 as scheduled.

Ethiopian’s first 777-300 ER will seat nearly 400 passengers in a two-class configuration and perfectly complements its existing fleet of six 777-200 LR (Longer Range) airplanes by providing additional capacity and flexibility on popular routes, such as Guangzhou, Washington, D.C. and Dubai.

The 777-300 ER can fly up to 7,825 nautical miles (14,490 kilometers) and is equipped with GE90-115B engines, the world’s most powerful commercial jet engine. Ethiopian’s 777-300ER also features the Boeing Signature Interior that offers wider seats, wider aisles, more headroom and more seating flexibility.

Ethiopian currently serves 76 destinations across five continents and was recently awarded African Business of the Year at the annual African Business Awards. The carrier’s partnership with Boeing stretches back over six decades, with a current fleet of nearly 50 Boeing airplanes that includes Next-Generation 737s, 757s, 767s, 777s, and 787 Dreamliners and a cargo fleet that includes 757s, 777 Freighters and a MD-11.

The airline issued this statement:

Ethiopian Airlines, the fastest growing and most profitable African airline, took delivery of the first of its four Boeing 777-300 ERs on November 7, 2013. The Boeing 777-300 ER is the largest aircraft in the airline’s fleet with 400 passengers seating capacity.

Ethiopian Boeing 777-300 ER will operate in its dense routes such as Guangzhou, Washington D.C., Dubai and Luanda. The aircraft is scheduled to serve the Addis Ababa – Luanda route three times a week, as of November 10, 2013, and three times a week on the Addis Ababa – Guangzhou route, as of November 15, 2013.

Ethiopian, which is a multi-award winning Pan-African carrier as the Passenger Choice “Best Airline in Africa” and the SKYTRAX “Best Staff Service in Africa” of 2013, will phase in three additional B777-300ERs in January 2014, May and June 2015.

Copyright Photo: Ethiopian Airlines.

Ethiopian Airlines: AG Slide Show

Zagrosjet acquires its first Airbus A321, starts passenger flights

Zagrosjet A321-200 YI-AQU (13)(Ldg) ARN (Zagrosjet)(LR)

Zagrosjet (formerly Zagros Air) (Erbil, Iraq) is the airline in the autonomous Kurdistan region of northern Iraq. The carrier is partly owned by Atlasjet (Istanbul) of Turkey. The company was established in October 2005 as Zagros Air by the Zagros Group. The Kurdish airline adopted the current Zagrosjet name in August 2013 and as of October 2, 2013 is operating an Airbus A321-231 (YI-AQU) on routes from Erbil to Adana, Amman, Ankara, Beirut, Gaziantep, Istanbul and Stockholm (Arlanda).

The company issued this statement:

Zagrosjet, the first and only Kurdish carrier in history proudly announces its official flights to different destinations in Middle East, Turkey and Europe, which include Amman, Beirut, Stockholm, Ankara, and Adana in the first phase.

On October 2, 2013, we celebrated the first departure of our Airbus A321-200 from Erbil International Airport directly to Ankara, Republic of Turkey. Followed by scheduled flights according to the official timetable and will be in two configurations: Business and Economy class.

Thanks to the Iraqi Federal Government and Kurdistan Regional Government for all their support and assistance. With this event, we will not only develop our milestone, as we believe, we are also writing the preface in Kurdish aviation history, keeping air transportation development parallel to all other developments in all other sectors achieved in Kurdistan during the last few years.

Zagrosjet was established in October 2005 by Zagros Group and licensed as an Air Carrier by Ministry of Transportation – Iraq on June 2013 to perform scheduled and unscheduled passenger and Cargo flights.

By 2014, Zagrosjet will commence flights to Umrah and Hajj followed by several other destinations in Europe, as we aim to connect Kurdistan Region and Iraq to the world and to be the most preferred carrier in the country.

Aside from network expansion, we will be opening our own flight academy in the near future to train Kurdish pilots and establish our own technical department for aircraft maintenance and services.

Video:

Copyright Photo: Zagrosjet.

Zagrosjet logo

Aer Lingus reports a third quarter operating profit of $126.8 million

Aer Lingus Group (Aer Lingus) (Dublin) for the third quarter reported an operating profit of €94.9 million ($126.8 million) which is 4.4% ahead of last year.

Read the full financial report: CLICK HERE 

Read the analysis by Irish Times: CLICK HERE

Copyright Photo: Stephen Tornblom/AirlinersGallery.com. Aer Lingus’ Airbus A330-302X EI-ELA (msn 1106) lifts off the runway at New York’s John F. Kennedy International Airport.

Aer Lingus: AG Slide Show

 

Alaska Airlines to allow its passengers to use PEDs starting today

Alaska Passengers using PEDs (Alaska)(LRW)

Alaska Airlines (Seattle/Tacoma) passengers on flights today (November 9) can begin enjoying the use of their tablets, book readers, games and other personal electronic devices from gate to gate.

Passengers on Alaska Airlines flights operated by Horizon Air are expected to be able to use their electronic devices during all phases of their flight next week and on flights operated by SkyWest Airlines soon after, pending FAA approval.

Under FAA rules, passengers need to place their electronic devices in airplane mode. Cell phones may not be used for calls and all devices must be turned off in rare cases when instructed by crew members. Laptops and other larger devices must be stowed during takeoff and landing so they do not pose a safety hazard. Customers will be able to connect to Wi-Fi once the aircraft reaches 10,000 feet.

Copyright Photo: Alaska Airlines. Alaska Airlines will start flying its first aircraft with 110-volt and USB power outlets at every seat next month. Most of the fleet will be equipped with power outlets by the end of 2014.

Alaska Airlines: AG Slide Show

Air Canada reports 3Q adjusted net income of C$365 million

Air Canada (Montreal) today reported adjusted net income of $365 million or $1.29 per diluted share in the third quarter of 2013 compared to adjusted net income of $229 million or $0.82 per diluted share in the third quarter of 2012, an increase of 59.4 per cent.  Third quarter 2013 EBITDAR amounted to $626 million compared to EBITDAR (excluding benefit plan amendments) of $551 million in the third quarter of 2012, an increase of $75 million . On a GAAP basis (which includes special items), Air Canada’s net income was $299 million or $1.05 per diluted share compared to net income of $359 million or $1.28 per diluted share in the same quarter of the previous year, during which Air Canada recorded a special operating expense reduction of $127 million in Benefit plan amendments relating to changes to the retirement age under one of its collective agreements. No comparable operating expense reduction was recorded in the third quarter of 2013.

“I am extremely pleased to report Air Canada’s best quarterly performance in the Corporation’s history, surpassing previous records for adjusted net income and EBITDAR,” said Calin Rovinescu, President and Chief Executive Officer. “Our operating leverage for the quarter was significant, as we achieved a 59.4 per cent improvement in adjusted net income based on increased total revenues of 4.6 per cent for the quarter.  These results underscore the momentum that has been achieved in executing on the foundations of our transformation strategy – sustainable profitability and positioning Air Canada as a stronger national and global competitor.

“In the quarter, we announced a series of significant developments in achieving our priorities: We successfully completed the $1.4 billion refinancing of our 2010 notes, significantly lowering our cost structure, strengthening our balance sheet and improving our credit profile.  We completed the transfer of all 15 Embraer 175 aircraft to Sky Regional, our Air Canada Express partner, an important step in Air Canada’s regional diversification strategy and our ongoing cost transformation program.  We finished construction of a new state-of-the-art Operations Centre that is designed to significantly improve operational capabilities and efficiencies of our global network.  To further develop Toronto Pearson as a truly global hub and even stronger North American gateway, we recently concluded an enhanced cooperation agreement with the Greater Toronto Airports Authority (GTAA).  In addition, we implemented an expanded commercial agreement with Air China, to serve additional points in China on a codeshare basis with our Star Alliance partner.

“I am particularly pleased to see the stock market’s endorsement of the strategy that our team has developed. This was reflected in our stock price more than tripling over the past year.  Moreover, our commitment as a progressive employer and investment in the well-being of our employees has also been recognized with the recent naming of Air Canada as one of Canada’s Top 100 Employers.

“Looking ahead, we will take delivery of the final three of five new Boeing 777-300ER aircraft by February 2014 , and we are actively preparing to begin integrating the first six of 37 Boeing 787 aircraft into our widebody fleet in 2014.  For the summer of 2014, we announced a major European expansion as these new widebody aircraft enter Air Canada’s international fleet allowing for the transfer of current aircraft to Air Canada rougeTM in order to operate in leisure markets on a more cost competitive basis.

“Our operational performance has also shown continued improvement. On-Time Performance (OTP) for the quarter improved over 20 percentage points compared to the previous year, the third consecutive quarter of significant year-over-year gains.  I would like to thank our employees for their on-going focus on taking care of our customers while operating a safe and efficient airline.  Their professionalism, collaboration and dedication, combined with Air Canada’s award-winning product has once again been recognized by this year’s Ipsos Reid Business Traveller Survey, released in September, that confirmed that Canada’s frequent business travellers recognize Air Canada as their preferred airline by a growing margin – the widest margin versus our domestic competitors since 2008,” concluded Mr. Rovinescu.

Third Quarter Income Statement Highlights

Third quarter 2013 system passenger revenues were $3,177 million , an increase of $148 million or 4.9 per cent over the third quarter of 2012, on a 2.9 per cent growth in traffic and a 2.0 per cent improvement in yield.  Passenger revenue per available seat mile (RASM) increased 1.8 per cent from the third quarter of 2012 on the yield growth.  Air Canada reported a passenger load factor of 86.2 per cent for the third quarter of 2013, 0.1 percentage points below the third quarter 2012 record load factor.  In the premium class cabin, passenger revenues increased $12 million or 2.1 per cent on yield growth of 3.8 per cent as traffic declined 1.7 per cent from the third quarter of 2012.

Operating expenses increased $160 million or 6 per cent from the third quarter of 2012.  As a result of changes to the terms of the ACPA collective agreement related to retirement age, which are not subject to regulatory approval, Air Canada recorded an operating expense reduction of $127 million in Benefit plan amendments in the third quarter of 2012 related to the impact of those amendments on pension and other employee benefit liabilities.  No such operating expense reduction was recorded in the third quarter of 2013.

Air Canada’s adjusted cost per available seat mile (adjusted CASM), which excludes fuel expense, the cost of ground packages at Air Canada Vacations and unusual items, decreased 3.4 per cent compared to the third quarter of 2012.  The 3.4 per cent reduction in adjusted CASM was in line with the adjusted CASM decrease of 3.0 per cent to 3.5 per cent projected in Air Canada’s news release dated October 3, 2013 .

In the third quarter 2013, Air Canada recorded operating income of $416 million compared to operating income of $423 million in the same quarter in 2012.  As discussed above, an operating expense reduction of $127 million was recorded in Benefit plan amendments in the third quarter of 2012 while no such operating expense reduction was recorded in the third quarter of 2013.

Financial and Capital Management Highlights

At September 30, 2013 , unrestricted liquidity (cash, short-term investments and undrawn lines of credit) improved to $2,412 million or 20 per cent of 12-month trailing revenues ( September 30, 2012 – $2,135 million or 18 per cent of 12-month trailing revenues).

Adjusted net debt amounted to $4,104 million at September 30, 2013 , a decrease of $33 million from December 31, 2012.   Despite adding US$285 million of debt related to the two Boeing 777-300 ER aircraft delivered in June and August 2013 , Air Canada was able to reduce net debt by maintaining positive cash from operations.

In the third quarter of 2013, negative free cash flow of $249 million declined $96 million from the third quarter of 2012, largely due to the addition of one Boeing 777 aircraft, partly offset by an increase in cash flows from operating activities due to better operating results.

For the 12 months ended September 30, 2013 , return on invested capital (“ROIC”) was 10.8 per cent versus 7.7 per cent at December 31, 2012.   Air Canada has targeted achieving an ROIC of 10 to 13 per cent by 2015.

Current Outlook

For the fourth quarter of 2013, Air Canada expects its system ASM capacity, as measured by available seat miles (ASMs), to increase in the range of 3.0 to 4.0 per cent when compared to the fourth quarter of 2012.

Air Canada expects its full year 2013 system ASM capacity and domestic ASM capacity to increase in the range of 2.0 to 2.5 per cent when compared to the same periods in 2012 (as opposed to the increase of 1.5 to 2.5 per cent disclosed in Air Canada’s news release dated October 3, 2013 ).

For the fourth quarter of 2013, Air Canada expects adjusted CASM to decrease 2.0 to 3.0 per cent when compared to the fourth quarter of 2012.

For the full year 2013, Air Canada continues to expect adjusted CASM to decrease in the range of 1.5 to 2.0 per cent from the full year 2012, consistent with the revised outlook provided with the October 3, 2013 traffic release.

Air Canada continues to expect its full year 2014 system capacity to increase by 9.0 to 11.0 per cent when compared to the full year 2013.  This projected increase in capacity, which is being deployed primarily on international markets, is consistent with the fleet plan discussed in Air Canada’s Third Quarter 2013 MD&A.  The projected capacity increase is due to the addition of five high-density Boeing 777-300 ER aircraft (the first two having been delivered in June and August 2013 , respectively, and the remaining three scheduled for delivery between November 2013 and February 2014 ), the scheduled arrival in 2014 of the first six Boeing 787 aircraft, and the planned growth from Air Canada rougeTM.

Air Canada’s outlook assumes Canadian GDP growth of 1.25 to 1.75 per cent for 2013 and Canadian GDP growth of 2.0 to 3.0 per cent for 2014.

Air Canada also expects that the Canadian dollar will trade, on average, at C$1.03 per U.S. dollar for the fourth quarter of 2013 and the full year 2013 and that the price of jet fuel will average  89 cents per litre for the fourth quarter of 2013 and the full year 2013.

The following table summarizes Air Canada’s above-mentioned outlook for the fourth quarter and full year 2013 and related major assumptions:

 

Fourth Quarter 2013 versus 
Fourth Quarter 2012
Full Year 2013 versus 
Full Year 2012
Current Outlook
Available seat miles (System) Increase 3.0% to 4.0% Increase 2.0% to 2.5%
Available seat miles (Canada) n/a Increase 2.0% to 2.5%
Adjusted CASM (1) Decrease 2.0% to 3.0% Decrease 1.5% to 2.0%
(1) Excludes fuel expense, the cost of ground packages at Air Canada Vacations and unusual items
Major Assumptions -
Fourth Quarter 2013
Major Assumptions -
Full Year 2013
Major Assumptions
Canadian dollar per U.S. dollar 1.03 1.03
Jet fuel price – CAD cents per litre 89 cents 89 cents
Canadian economy 2013 Annualized Canadian GDP
growth of 1.25% to 1.75%
Canadian GDP growth of
1.25% to 1.75%

 

For the full year 2013, Air Canada continues to expect:

  • Depreciation, amortization and impairment expense to decrease by $115 million from the full year 2012.
  • Employee benefits expense to increase by $70 million from the full year 2012.
  • Aircraft maintenance expense to decrease by $40 million from the full year 2012 level, which includes a favourable maintenance return provision adjustment of $32 million in the fourth quarter of 2012.

The following table summarizes the above-mentioned projections for the full year 2013:

Full Year 2013 versus 
Full Year 2012
Depreciation, amortization and impairment expense Decrease $115 million
Employee benefits expense Increase $70 million
Aircraft maintenance expense Decrease $40 million

 

The outlook provided constitutes forward-looking statements within the meaning of applicable securities laws and is based on a number of additional assumptions and subject to a number of risks.  Please see section below entitled “Caution Regarding Forward-Looking Information.”

Non-GAAP Measures

Below is a description of certain non-GAAP measures used by Air Canada to provide additional information on its financial and operating performance.  Such measures are not recognized measures for financial statement presentation under Canadian GAAP and do not have standardized meanings and may not be comparable to similar measures presented by other public companies.  Refer to Air Canada’s Third Quarter 2013 MD&A for reconciliation of non-GAAP financial measures.

  • Adjusted net income (loss) and adjusted net income (loss) per diluted share are used by Air Canada to assess its performance without the effects of foreign exchange, net financing expense on employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value and unusual items.
  • EBITDAR is commonly used in the airline industry and is used by Air Canada to assess earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets.
  • Adjusted CASM is used by Air Canada to assess the operating performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations and unusual items, such as impairment charges and benefit plan amendments, as such expenses may distort the analysis of certain business trends and render comparative analyses to other airlines less meaningful.
  • Free cash flow is used by Air Canada as an indicator of the financial strength and performance of its business because it shows how much cash is available for such purposes as repaying debt, meeting ongoing financial obligations and reinvesting in Air Canada.
  • Adjusted net debt is a key component of the capital managed by Air Canada and provides a measure of the airline’s net indebtedness.  Adjusted net debt is calculated as the sum of total long-term debt and finance lease obligations and capitalized operating leases less cash and cash equivalents and short-term investments.
  • Return on invested capital is used by Air Canada to assess the efficiency with which it allocates its capital to generate returns. Return is based on Adjusted net income (loss) (as discussed in the section above), excluding interest expense and implicit interest on operating leases. Invested capital includes average long-term debt, average finance lease obligations, the value of capitalized operating leases (calculated by multiplying annualized aircraft rent expense by 7) and the market capitalization of Air Canada’s outstanding shares.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-333 ER C-FRAM (msn 35250) approaches Tokyo (Narita) for landing.

Air Canada: AG Slide Show

US Airways joins the PED airline list

US Airways (Phoenix) customers as of yesterday (November 7) can now use certain portable electronic devices (PEDs), including e-books, tablets and smartphones, during taxi, takeoff and landing while in “airplane mode” – a departure from the previous Federal Aviation Administration (FAA) restriction on use below 10,000 feet.  Customers on US Airways domestic mainline flights will now be permitted to use small PEDs during all phases of flight.

In approving the use of PEDs, the FAA ensured that all US Airways mainline aircraft are equipped to safely handle implementation of the new recommendations.  US Airways continues to work with all partner airlines operating as US Airways Express to ensure timely implementation of their individual programs which require separate FAA approval.

Travelers should keep in mind the following details with regard to the new policy:

  • The FAA’s new recommendations regarding onboard PED use apply only to domestic flights flown by US Airways mainline aircraft.
  • Phone calls are not permitted once the main cabin door is closed or before a flight attendant makes an announcement upon arrival.
  • Customers should adhere to all crewmember safety instructions and refrain from using PEDs during pre-flight safety announcements.
  • During takeoff and landing, customers are now permitted to secure items lighter than two pounds by holding them (with the option of securing them in seatback pockets).  PEDs heavier than two pounds must be secured for taxi, takeoff and landing in an overhead bin or underneath the seat in front of them.
  • PEDs must be operated in “airplane mode” or with cellular services disabled.
  • In-flight Wi-Fi is available on most aircraft once it reaches an altitude of 10,000 feet and an onboard announcement has been made.

US Airways’ adoption of the new policy is the latest step in the company’s effort to upgrade its customers’ in-flight experience.  Earlier this year, the airline installed Gogo Wi-Fi In-flight internet on 270 Airbus A319, A320, A321 and Embraer 190 aircraft along with 58 Embraer 170 and 175 US Airways Express aircraft – outfitting 90 percent of the company’s domestic aircraft with wireless internet capabilities.  US Airways’ Airbus A319, A320 and A321 planes are equipped with Gogo’s ATG-4 (air-to-ground) technology, which strengthens the wireless internet capacity and increases the available data rate for customers.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A321-211 N195UW (msn 3633) arrives at the Charlotte hub.

US Airways: AG Slide Show

Spirit launches new routes from Minneapolis/St. Paul and Phoenix

Spirit Airlines (Fort Lauderdale/Hollywood) yesterday (November 7) started daily nonstop seasonal service between Minneapolis-St. Paul International Airport (MSP) and four new cities, including Los Angeles (LAX), Orlando (MCO), Phoenix Sky Harbor (PHX) and Tampa (TPA). In addition, Spirit’s nonstop seasonal service from MSP to Fort Lauderdale and Fort Myers has also resumed.

Spirit has continued to grow since starting service at MSP in June 2012. The ultra-low fare airline now offers nonstop service from MSP to Chicago, Dallas/Fort Worth, Denver (summer seasonal) and Las Vegas, as well as nonstop winter seasonal service to Fort Lauderdale, Fort Myers, Los Angeles, Orlando, Phoenix and Tampa.

Spirit’s Minneapolis/St. Paul (MSP) — Los Angeles (LAX) seasonal schedule effective November 7, 2013:
Depart Arrive Flight # Stops Frequency
Minneapolis/St. Paul — Los Angeles 4:15 PM 6:15 PM 323 0 Daily
Los Angeles — Minneapolis/St. Paul 8:05 AM 1:45 PM 424 0 Daily
Spirit’s Minneapolis/St. Paul (MSP) — Orlando (MCO) seasonal schedule effective November 7, 2013:
Depart Arrive Flight # Stops Frequency
Minneapolis/St. Paul — Orlando 7:50 AM 12:05 PM 135 0 Daily
Orlando — Minneapolis/St. Paul 12:55 PM 3:25 PM 250 0 Daily
Spirit’s Minneapolis/St. Paul (MSP) — Phoenix Sky Harbor (PHX) seasonal schedule effective November 7, 2013:
Depart Arrive Flight # Stops Frequency
Minneapolis/St. Paul — Phoenix 9:25 AM 11:50 AM 345 0 Daily
Phoenix — Minneapolis/St. Paul 3:10 PM 7:15 PM 342 0 Daily
Spirit’s Minneapolis/St. Paul (MSP) — Tampa (TPA) seasonal schedule effective November 7, 2013:
Depart Arrive Flight # Stops Frequency
Minneapolis/St. Paul — Tampa 3:00 PM 7:10 PM 427 0 Daily
Tampa — Minneapolis/St. Paul 7:55 PM 10:20 PM 428 0 Daily

Additionally, Spirit Airlines started daily nonstop seasonal service from Phoenix Sky Harbor International Airport (PHX) to three new cities, including Chicago O’Hare (ORD), Denver (DEN) and Minneapolis-St. Paul (MSP).

Spirit also recently started daily nonstop service between Phoenix Sky Harbor and Dallas/Fort Worth on October 24, 2013.

Spirit’s Phoenix Sky Harbor (PHX) — Chicago (ORD) seasonal schedule effective November 7, 2013:

Depart Arrive Flight # Stops Frequency
Phoenix Sky Harbor — Chicago O’Hare 1:25 am 5:50 am 168* 0 Daily
Chicago O’Hare — Phoenix Sky Harbor 9:15 pm 12:10 am +1 167 0 Daily

*effective 11/8/13

Spirit’s Phoenix Sky Harbor (PHX) — Denver (DEN) seasonal schedule effective November 7, 2013:

Depart Arrive Flight # Stops Frequency
Phoenix Sky Harbor — Denver 12:35 pm 2:23 pm 906 0 Daily
Denver — Phoenix Sky Harbor 12:40 pm 2:30 pm 939 0 Daily

Spirit’s Phoenix Sky Harbor (PHX) — Minneapolis/St. Paul (MSP) seasonal schedule effective November 7, 2013:

Depart Arrive Flight # Stops Frequency
Phoenix Sky Harbor — Minneapolis/St. Paul 3:10 pm 7:15 pm 342 0 Daily
Minneapolis/St. Paul — Phoenix Sky Harbor 9:25 am 11:50 am 345 0 Daily

Copyright Photo: Ton Jochems/AirlinersGallery.com. Spirit Airlines has changed its website URL from Spiritair.com to Spirit.com and the aircraft are now starting to reflect this change. Airbus A320-232 N620NK (msn 5624) with Sharklets and the new web address lands at Las Vegas.

Spirit Airlines: AG Slide Show

Seaborne Airlines to expand to St. Kitts, will add four more SAAB 340Bs in 2014

Seaborne Airlines (Christiansted, St. Croix, U.S. Virgin Islands) announced that they will launch a new route between Luis Munoz Marin International Airport in San Juan, Puerto Rico (SJU) and St Kitt’s Robert L. Bradshaw International Airport (SKB), with continuous service to Nevis’ Vance W. Amory International Airport (NEV), beginning Wednesday, January 15th, 2014. The flights will operate daily.

Seaborne will operate 34-seat SAAB 340B aircraft with two pilots, a flight attendant and the outstanding in-flight service Seaborne is known for.  Whether for local Puerto Rican visitors or connecting customers from the states, Seaborne’s schedule makes Caribbean travel easy.

        Departing from SJU: 3:25 PM Arriving SKB 4:50 PM
        Departing from SKB: 5:10 PM Arriving NEV 5:30 PM  (Customers stay on the plane at SKB)
        Departing from NEV: 7:00 AM Arriving SKB 7:20 AM  (Customers stay on the plane at SKB)
        Departing from SKB: 7:50 AM Arriving SJU 9:00 AM

Seaborne also announced the addition of four more 34-seat SAAB 340B aircraft in the first half of 2014.  “These planes will increase our Caribbean fleet to thirteen aircraft, providing travelers throughout the Caribbean with even more travel options and the service they deserve”, said Gary Foss, President and Chief Executive Officer of Seaborne Airlines.

Copyright Photo: Raul Sepulveda/AirlinersGallery.com. SAAB 340B N353SA (msn 351) in the Pacific Coastal colors awaits the next assignment at the San Juan hub.

Route Map:

Seaborne 10.2013 Route Map

JetBlue begins operations at Worcester

JetBlue Airways (New York) yesterday (November 7) began flying from the Worcester Regional Airport to Fort Lauderdale/Hollywood and Orlando, as the airline continues to grow its foothold in New England. JetBlue now offers 256 daily flights in and out of New England and is the exclusive commercial airline to operate at the Central Massachusetts facility.

JetBlue’s schedule between Worcester (ORH) and Fort Lauderdale/Hollywood (FLL) effective November 7, 2013:

ORH to FLL: FLL to ORH:
Depart – Arrive Depart – Arrive
4:25 p.m. – 7:39 p.m. 7:32 p.m. – 10:30 p.m.

JetBlue’s schedule between Worcester (ORH) and Orlando (MCO) effective November 7, 2013*:

ORH to MCO: MCO to ORH:
Depart – Arrive Depart – Arrive
7:30 a.m. – 10:33 a.m. 1:00 p.m. – 3:38 p.m.

*= First flight from Orlando to Worcester is scheduled for November 7, 2013. First flight from Worcester to Orlando is scheduled for November 8.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Embraer ERJ 190-100 IGW N353JB (msn 19000576) (Barcode) banks on its final approach into Reagan National Airport in Washington.

JetBlue Airways: AG Slide Show

Frontier to expand operations at Trenton, New Jersey with new routes to Cleveland, Indianapolis and Nashville

Frontier Airlines (2nd) (Denver) has announced it will expand its low-fare service at Trenton-Mercer Airport (TTN), in Ewing, New Jersey, with the addition of nonstop service to Cleveland, Ohio, beginning on February 13, 2014; Indianapolis, Indiana beginning on April 29, 2014; and Nashville, Tennessee beginning on April 30, 2014.

Frontier is the only airline providing scheduled service out of Trenton-Mercer Airport, the gateway to New Jersey’s state capital, all of central New Jersey, and Southeast Pennsylvania, including metro Philadelphia.

The addition of these three cities brings Frontier’s total nonstop destinations served from Trenton-Mercer Airport to 14:

  • Atlanta
  • Charlotte
  • Chicago-Midway
  • Cincinnati
  • Cleveland
  • Columbus
  • Detroit
  • Fort Lauderdale/Hollywood
  • Fort Myers
  • Indianapolis
  • Nashville
  • Orlando
  • Raleigh-Durham
  • Tampa

All Frontier flights from Trenton/Princeton will operate on 138-seat Airbus A319 aircraft.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Frontier Airlines’ (2nd) Airbus A319-111 N930FR (msn 2241) taxies to the runway at Los Angeles International Airport.

Frontier Airlines: AG Slide Show

Boeing warns it will move the 777X project away from the Seattle area if the tentative agreement is rejected

Boeing (Chicago) has warned it will open negotiations with other communities if the tentative agreement with the IAM is rejected by the members on November 13. According to this report by Reuters, senior members of the IAM union were voicing opposition to the proposed contract.

Read the full report: CLICK HERE

In other news, Boeing reported the second 787-9 Dreamliner completed a successful 4-hour, 18-minute first flight yesterday. The airplane, known as ZB002, departed Paine Field in Everett, Washington, at 8:06 a.m. and landed at 12:24 p.m. local time at Seattle’s Boeing Field.

As the only 787-9 test airplane to be fitted with elements of the passenger interior, ZB002 will test systems such as the environmental control system in addition to avionics and other aspects of airplane performance. Boeing has conducted a series of ground tests on the second 787-9 since its completion in late September.

With manufacturing of the 787-9 flight-test fleet complete, the first production 787-9 in final assembly and 137 flight-test hours to date, 787-9 development is on track. 787-10 development also is progressing as planned.

First delivery of the 787-9 to launch customer Air New Zealand is set for mid-2014. Twenty-six customers have ordered 396 787-9s, accounting for 40 percent of all 787 orders.

Copyright Photo: Boeing.

Atlas Air Worldwide Holdings reports 3Q net income of $28.6 million

Atlas Air Worldwide Holdings, Inc. (Atlas Air and Polar Air Cargo) (New York-JFK) announced adjusted net income attributable to common stockholders of $28.6 million, or $1.13 per diluted share, for the three months ended September 30, 2013, compared with $33.4 million, or $1.26 per diluted share, for the three months ended September 30, 2012.

On a reported basis, third-quarter 2013 net income attributable to common stockholders totaled $23.7 million, or $0.94 per diluted share, compared with $33.9 million, or $1.27 per diluted share, in the third quarter of 2012. Free cash flow of $73.8 million in the third quarter of 2013 compared with $98.9 million in the third quarter of 2012.

“Earnings in the third quarter of 2013 were below our expectations, reflecting market factors,” said William J. Flynn, President and Chief Executive Officer. “Demand in the commercial airfreight peak season through September was less than we anticipated. Airfreight yields remained under pressure, impacting our Commercial Charter segment. In addition, a decline in military charter demand led to a reduction in AMC volumes and fewer favorable one-way AMC missions.

“Results during the quarter were supported by strength in our core ACMI operations and growth in our Dry Leasing business. Led by our new 747-8 freighters in ACMI, we saw increasing contributions during the quarter from investments to diversify our business mix, including the addition of 777 freighters with predictable, long-term revenue and earnings streams in Dry Leasing; our expanding 767 service; growing CMI operations within ACMI; and ongoing continuous improvement initiatives.

“Reflecting our commitment to enhance stockholder value, we acquired a further 3.1% of our outstanding common stock through our share repurchase program from May through August. Combined with the shares that we bought through the end of April, we have repurchased approximately 6.5% of our shares for $72 million this year. In addition, our board of directors has increased our existing authority to repurchase shares from $9 million to $60 million.”

Third-Quarter Results

Revenue, volume and profitability growth in our core ACMI business during the third quarter were driven by our new 747-8Fs, with an average of 3.3 additional -8F aircraft in service compared with the third quarter of 2012, and the continued ramp up and expansion of CMI service.

Improved ACMI segment earnings during the period benefited from higher rates per block hour and lower maintenance expense for our 747-8Fs, partially offset by the redeployment of 747-400 aircraft to other business segments.

In Dry Leasing, revenue and profitability grew following the acquisition of one 777-200 LRF aircraft in March 2013 and two 777-200 LRF aircraft in July 2013. Each aircraft was acquired with a long-term customer lease already in effect.

In AMC Charter, a reduction in cargo and passenger block hours, as well as a reduced number of one-way AMC missions and a change in the proportion of those missions from outbound U.S. to inbound U.S., led to a significant decline in segment contribution. Higher average cargo and passenger revenue per block hour during the period stemmed from an increase in the average pegged fuel price set by the U.S. military.

Segment results in Commercial Charter primarily related to a reduction in yields driven by soft third-quarter global charter-market conditions. Results also reflected a reduction in return legs due to the change in the number and direction of one-way AMC missions.

Results in the third quarter were also affected by a reduction in capitalized interest on 747-8F aircraft that entered service.

Income Taxes

Reported earnings for the third quarter of 2013 included an effective income tax rate of 31.3%, reflecting both the ongoing beneficial impact of lower taxes for certain foreign subsidiaries in our Dry Leasing business and the net impact of the resolution of certain income tax liabilities.

Nine-Month Results

For the nine months ended September 30, 2013, adjusted net income attributable to common stockholders totaled $54.9 million, or $2.13 per diluted share, compared with $78.3 million, or $2.95 per diluted share, for the nine months ended September 30, 2012.

On a reported basis, nine-month 2013 net income attributable to common stockholders totaled $63.9 million, or $2.48 per diluted share, compared with $77.5 million, or $2.92 per diluted share, in the first nine months of 2012.

Free cash flow in the first nine months of 2013 increased to $180.8 million from $154.1 million in the first nine months of 2012.

Cash and Short-Term Investments

At September 30, 2013, our cash, cash equivalents, short-term investments and restricted cash totaled $298.4 million, compared with $419.9 million at December 31, 2012.

The change in position at September 30 reflected cash provided by operating and financing activities offset by cash used for investing activities.

Net cash used for investing activities in the first nine months of 2013 primarily related to the purchase of two 747-8F aircraft as well as three 777-200 LRF aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the acquisitions of these aircraft. Those proceeds were partially offset by payments on debt obligations and debt issuance costs.

Share Repurchases

Between mid-May and mid-August, we repurchased 820,276 shares of our common stock for $35.6 million. The shares were acquired pursuant to an accelerated share repurchase program with a financial institution that settled in August.

Through the nine months ended September 30, 2013, we repurchased a total of 1,723,577 shares, or 6.5%, of our outstanding common stock at December 31, 2012.

Future repurchases under our new $60 million authority may be made at our discretion, and the actual timing, form and amount will depend on company and market conditions.

Outlook

Looking to full-year 2013, we expect fully diluted earnings per share to total between $3.40 and $3.80 on an adjusted basis and $3.75 and $4.15 on a reported basis.

Our current outlook reflects a much less robust commercial airfreight peak season than previously anticipated. While commercial airfreight volumes are strengthening, airfreight yields remain volatile. In addition, military cargo volumes have declined at a more rapid rate. Together, these factors affected our third-quarter results and have reduced anticipated profitability for the fourth quarter.

Partially offsetting these challenges are increasing contributions from investments to diversify the company’s business mix, led by new 747-8 freighters in the company’s core ACMI business; the addition of 777 freighters with predictable, long-term revenue and earnings streams in Dry Leasing; an expanding 767 service platform; entry into military and commercial charter passenger operations; and continuing growth in the company’s non-asset-intensive CMI operations. Also contributing are ongoing continuous improvement productivity and efficiency initiatives.

Mr. Flynn added: “Airfreight remains a long-term growth industry despite current market challenges. We are focused on the long-term growth of our business, and we are well-positioned to capitalize on market improvements. Our business model is solid and is complemented by substantial operating leverage, strong customer relationships and a superior fleet. We continue to strengthen our competitive position and generate substantial free cash flow, which will enhance stockholder value.”

Copyright Photo: Bernhard Ross/AirlinersGallery.com. Atlas Air’s Boeing 767-38E ER N641GT (msn 25132) is pictured in action at Frankfurt.

Atlas Air: AG Slide Show

Polar Air Cargo: AG Slide Show

Alaska Airlines introduces its fifth Disneyland logojet today

Alaska 737-800 WL N570AS (13-Disneyland 5th-Cars)(Grd) SEA (BDF)(LRW)

Alaska Airlines (Seattle/Tacoma) today introduced its fifth Disney logojet in rainy Seattle. Boeing 737-890 N570AS (msn 35185) has been painted in this special “Follow us to Disneyland Resort” color scheme. Oddly instead of promoting the recent “Disney Planes” movie the characters are from “Disney Cars”.

Alaska Airlines later in the day issued this statement:

The newest themed airplane in Alaska Airlines’ fleet flew into Seattle-Tacoma International Airport today (November 7), featuring one of America’s most beloved and rusty tow trucks.

Alaska Disneyland Pilots in Cockpit (Alaska)(LRW)

Adorned with the familiar images of Disney-Pixar’s animated Cars characters Mater, Lightning McQueen, Guido and Luigi, the colorful Boeing 737-800 named “Adventure of Disneyland Resort” celebrates Alaska’s partnership with Walt Disney’s original theme park.

It is the fifth Disney-themed airplane born out of the successful partnership between Seattle-based Alaska Airlines and Disneyland Resort.

“Our Disney planes generate a lot of excitement among our passengers young and old wherever they fly,” said Jeff Butler, Alaska Airlines’ vice president of customer service-airports and cargo, and board member of Make-A-Wish Alaska and Washington. “I can’t think of a better way to celebrate our strong partnership than to launch this flying invitation to visit Disneyland Resort’s newest attraction and Mater’s home in Cars Land.”

At a special airport event, Mater himself made a satellite appearance from Cars Land at Disney California Adventure Park, providing travelers with updates on the arrival of the plane as it neared Seattle. After the ceremony, the aircraft officially joined the Alaska fleet on a flight to Orange County, Calif., and will then fly throughout the carrier’s 65-city network.

“Adventure of Disneyland Resort is a great example of taking beloved, iconic Disney-Pixar characters and bringing them to life in new and unexpected ways,” said Sharon Siskie, Disney Destinations’ vice president of travel industry sales. “It’s been our great privilege to be part of this collaborative effort with Alaska Airlines, and we’re delighted that today’s inaugural flight will create some very powerful memories for special guests from Make-A-Wish.”

Joining passengers flying on Flight 500 were four Make-A-Wish children from Washington and Alaska, ages 3 to 7, and their families, who will spend the next several days at the Disneyland Resort. During their visit, they will be treated to special activities and enjoy overnight accommodations at Disney’s Paradise Pier Hotel at the Resort.

“Since our inception, we’ve granted life-affirming wishes to more than 5,300 children in Alaska and Washington and it’s only because of the partnerships that we have with companies like Alaska Airlines and Disney,” said Barry McConnell, president and CEO of Make-A-Wish Alaska and Washington.

Since granting its first wish in 1986, Make-A-Wish Alaska and Washington has granted 2,257 Disney wishes and sent 1,051 children and their families on wish trips via Alaska Airlines. Disney helps Make-A-Wish America® grant more than 5,000 wishes annually, making a trip to a Disney Park the most frequent wish requested by Make-A-Wish children.

Alaska Airlines has supported Make-A-Wish Alaska and Washington since 1986 and provides air transportation for about 225 Wish kids and their families to travel each year. Alaska invites members of its Mileage Plan to donate frequent-flier miles to Make-A-Wish through the Charity Miles program.

The Adventure of Disneyland Resort aircraft received its new livery at Aviation Technical Services in Everett, Washington. A team of specialists from Associated Painters Inc. accomplished the complicated painting process, including a sponge-type application to re-create Mater’s rust-colored finish.

Adventure of Disneyland Resort trivia:

  • A 34-member crew worked around the clock for 29 days at Associated Painters Inc. to paint the plane.
  • Painters painstakingly airbrushed the aircraft with 70 unique colors and applied more than 10,000 square feet of vinyl graphics to create the lifelike characters, including the headlights, tire rims and eyes.
  • More than 72,000 linear feet of masking tape was used during the painting of the Adventure of Disneyland Resort.
  • Mater’s rustic-looking muffler, which is located on the tail of the jet, will naturally change color over time due to the plane’s normal exhaust stains.
  • The 129-foot-long Boeing 737-800 has a wingspan of 117 feet and a cruising speed of 530 mph.
  • The plane accommodates 157 passengers and six crew members.

Top Copyright Photo: Brandon Farris/AirlinersGallery.com. The weather did not cooperate at SEA today for the unveiling as a storm system moved through the area. Cockpit Copyright Photo: Alaska Airlines.

Video of the painting Process:

Alaska Airlines Slide Show (see all of the logojets): AG Slide Show

United joins JetBlue and Delta in offering electronics-friendly cabins

United Airlines (Chicago) has joined JetBlue Airways and Delta Air Lines in now offering electronics-friendly cabins. The airline issued this statement:

United Airlines is now offering its customers electronics-friendly cabins on all domestic mainline flights. The airline received approval from the Federal Aviation Administration (FAA) to begin allowing passengers use of their portable electronic devices during all phases of flight. United will immediately implement the benefit for its customers.

With this change, United customers can safely use their lightweight, hand-held electronic devices – such as tablets, e-readers, games and smartphones – in non-transmitting mode from gate-to-gate, unless instructed otherwise by a crew member. Larger electronic devices, like laptops, must still be stored securely in an overhead bin or another approved stowage area during takeoff and landing.

Currently, only United customers traveling on mainline flights arriving or departing within the 50 United States may operate portable electronic devices below 10,000 feet. However, the airline is working with its regional partners to extend the benefit, and expects to allow customers gate-to-gate use of their electronic devices across all United Express flights operating within the 50 United States by the end of the year as well.

Passengers may still be asked to turn off their electronic devices in certain situations, such as low-visibility operations, and are reminded to carefully follow crew member instructions at all times. Voice calls from cell phones or VoIP-enabled devices are also still prohibited during taxiing, takeoffs, landings and while the aircraft is in flight.

Copyright Photo: Bruce Drum/AirlinersGallery.com. United Airlines’ Boeing 737-824 WL N73276 (msn 31594) taxies to the runway at Seattle-Tacoma International Airport.

United Airlines: AG Slide Show

Republic Airways Holdings reports on its third quarter performance, will stop operating Embraer 190s for Frontier

Republic Airways Holdings Inc. (Indianapolis) reported diluted earnings per share from continuing operations for the third quarter of 2013 of $0.09 as compared to $0.13 for the same period in the prior year. During the third quarter of 2013, the company recorded a non-cash impairment charge of $21.2 million, $13.0 million after-tax or $0.25 per diluted share, to reduce the carrying value of seven owned Embraer ERJ 190 aircraft and write-off the maintenance deposits on three leased ERJ 190 aircraft. Income from continuing operations was $4.3 million compared to $6.3 million for the same period last year. Excluding the ERJ 190 impairment charge, pre-tax income from continuing operations was $26.6 million, resulting in an adjusted pre-tax margin from continuing operations of 7.9%. Operating revenues totaled $338.6 million, an increase of 0.4%, compared to $337.4 million for the third quarter of 2012.

The company classified its Frontier business as discontinued operations due to the expected sale during the fourth quarter of 2013. Unless otherwise specified, all financial information disclosed in this release is from continuing operations.

On October 1, 2013, the company reported that it had agreed to sell its Frontier business to an affiliate of Indigo Partners LLC (Indigo). Indigo will acquire all the outstanding shares of Frontier Airlines Holdings, Inc. As part of the transaction, under a separate agreement, Republic will assign to Frontier all of Republic’s rights under agreements relating to the Republic’s Airbus A320neo order. The transaction is subject to receipt of certain third-party consents and releases and other customary closing conditions.

On November 6, 2013, Indigo informed the company that it had satisfied or waived certain key conditions to close under the transaction. The company expects the transaction to close later this month.

For additional information on the divestiture of Frontier, please see the company’s separate news release dated October 1, 2013 and a separate filing with the U.S. Securities and Exchange Commission on Form 8-K filed on October 7, 2013.

“The sale of Frontier will allow our management team to re-focus on our core business,” said Republic Airways Chairman, President and Chief Executive Officer Bryan Bedford. “We continue to be excited about the growth opportunities for our fixed-fee business and are focused on providing safe, reliable and low-cost solutions to each of our airline partner brands, including American Eagle, Delta Connection, United Express and US Airways Express,” said Bedford.

Third Quarter Review

Operating Revenue Highlights

Total operating revenues increased $1.2 million, or 0.4%, from the third quarter of 2012 to $338.6 million in the third quarter of 2013. Fixed-fee service revenue increased $51.6 million, or 19.2%, to $320.3 million due to an increase in Bombardier DHC-8-402 (Q400) flying with United Airlines, new fixed-fee ERJ 190 charter flying and new ERJ 175 flying with American Airlines. Passenger service revenue decreased $50.5 million due to a significant reduction in the number of ERJ 190 aircraft operating under our pro-rate agreement with Frontier.

Operating Expense Highlights

Fuel costs for Republic decreased $14.1 million to $11.3 million for the quarter, due to a 4.7 million decrease in gallons consumed due to the reduced ERJ 190 pro-rate operations. The fuel cost per gallon, including into-plane taxes and fees, increased to $3.55 per gallon in the third quarter of 2013, compared to $3.21 per gallon in the prior year’s third quarter. The fuel cost per gallon related to our fixed-fee charter agreement is generally higher than our pro-rate operations with Frontier and is treated as a pass through cost under the agreement.

Landing fees and airport rents decreased $6.6 million to $7.9 million for the quarter. Beginning in June 2013, landing fee expense and the related pass-through reimbursement revenue were lower due to United paying airports directly for its associated landing fee costs.

At September 30, 2013, the company had a fleet of ten ERJ 190 aircraft, of which three were leased and seven were owned. Five of the aircraft operate within the fixed-fee charter agreement and the remainder were operating under the pro-rate agreement with Frontier. The company is working to sell, sublease or otherwise place into fixed-fee charter service the five aircraft operating in pro-rate service. During the third quarter of 2013, we recorded a non-cash impairment charge of $21.2 million to reduce the carrying value of our owned E190 aircraft and expensed the deferred maintenance deposits on the leased ERJ 190 aircraft.

Discontinued Operations

Income from discontinued operations, net of tax, increased 52.8% from $19.5 million in the third quarter of 2012 to $29.8 million in this quarter. The improvement is primarily due to Frontier TRASM increasing 6.6% over the prior period and lower fuel costs. The loss on disposal of discontinued operations, net of tax, is currently estimated to be $47.9 million. This estimate will adjust in future periods based on the actual results of the discontinued operations and the closing date of the transaction.

Fleet Highlights

As of September 30, 2013, Republic operated a fleet of 235 aircraft. Within our fixed-fee commercial and charter agreements, we operated 68 aircraft with 44-50 seats and 162 aircraft with 69-99 seats. In addition, we operated five 99-seat aircraft under the pro-rate agreement with Frontier, down from seventeen 99-seat aircraft operated in pro-rate service during the third quarter of 2012.

During the quarter the company took delivery of nine ERJ 175 aircraft operating under its American Airlines capacity purchase agreement and expects to take delivery of an additional ten ERJ 175 aircraft by the end of 2013.

Balance Sheet and Liquidity

The company’s total cash balance decreased $6.3 million to $224.1 million as of September 30, 2013, compared to December 31, 2012. Restricted cash increased $12.6 million, to $32.2 million, from December 31, 2012 due to the escrow requirements under our fixed-fee charter agreements. The Company’s unrestricted cash balance decreased $18.9 million, to $191.9 million, from December 31, 2012. A condensed consolidated balance sheet and cash flow statement have been included in the tables section of this release.

The Company’s debt increased to $2.00 billion as of September 30, 2013, compared to $1.97 billion at December 31, 2012, primarily related to the financing of ERJ 175 aircraft for the American Airlines fixed-fee agreement. As of September 30, 2013, approximately 95% of our debt is at a fixed interest rate. The Company has significant long-term lease obligations for aircraft that are classified as operating leases and are not reflected as liabilities on the Company’s consolidated balance sheet. At a 6% discount factor, the present value of these lease obligations was approximately $0.5 billion and $0.6 billion as of September 30, 2013, and December 31, 2012, respectively.

At September 30, 2013 the company had assets held for sale of $594.8 million and liabilities held for sale of $517.8 million. The $77.0 million of value in net assets held for sale represents the estimated cash proceeds from the sale of Frontier. These amounts will adjust in future periods based on the actual results of discontinued operations and the closing date of the transaction.

Copyright Photo: TMK Photography/AirlinersGallery.com. Republic Airlines (2nd) is now only operating five 99-seat Embraer ERJ 190s for Frontier Airlines (down from 17) under the pro-rate agreement. Once the sale of Frontier to Indigo is completed, Republic will relocate these five aircraft to other areas. Frontier will only operate Airbus aircraft under Indigo. The pictured Republic Airlines (2nd) Embraer ERJ 190-100 IGW N164HQ (msn 19000275) with a Hummingbird on the tail taxies at Toronto (Pearson).

Frontier Airlines-Republic Airlines (2nd): AG Slide Show

Frontier adds two more routes from Wilmington, Delaware

Frontier Airlines (2nd) (Denver) has announced it will add nonstop service from Wilmington- New Castle Airport in Wilmington, Delaware (ILG) to Atlanta, Georgia (ATL) and Detroit, Michigan (DTW) starting on April 29, 2014.

The addition of these two new cities brings the total number of routes served from the Wilmington/Philadelphia area to seven: Atlanta; Chicago-Midway; Denver; Detroit; Fort Myers; Orlando; and Tampa.

Following is the schedule for Frontier’s Atlanta service**:

Wilmington-Atlanta (beginning April 29, 2014)

ILG-ATL

Following is the schedule for Frontier’s Detroit service:

Wilmington-Detroit (beginning April 29, 2014)

ILG-DTW

All service from Wilmington-New Castle Airport operates on 168-seat Airbus A320 aircraft.

Copyright Photo: Rurik Enriquez/AirlinersGallery.com. Airbus A320-214 N204FR (msn 2325) with the Bald Eagle on the tail lands in Cancun, Mexico.

Frontier Airlines: AG Slide Show

Route Map:

Frontier (2nd) 11.2013 Route Map

Alaska Airlines gets ready to expand its ski flights network

Alaska Airlines (Seattle/Tacoma) is starting new nonstop flights between Portland, Oregon and Reno/Tahoe, California on November 8, between Seattle/Tacoma and Steamboat Springs, Colorado on December 18, and between San Diego and Mammoth, California, on December 19. This is addition to the airline’s increase in flights between Los Angeles and Mammoth, starting on December 1, and seasonal service from Seattle/Tacoma and Los Angeles to Sun Valley, Idaho, starting on December 14.

Several of the flights will be operated by Alaska Airlines’ regional partners Horizon Air (Alaska Horizon) (Seattle/Tacoma), using 76-seat Bombardier DHC-8-402s (Q400s), and SkyWest Airlines (Alaska SkyWest) (St. George, Utah), using 70-seat Bombardier CRJ700 regional jets.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Horizon Air’s Bombardier DHC-8-402 (Q400) N417QX (msn 4086) taxies to the runway at the Seattle-Tacoma International Airport hub.

Alaska Airlines: AG Slide Show

Alaska Horizon-Horizon Air: AG Slide Show

Lufthansa to start Munich-Mexico City service

Lufthansa (Frankfurt) will launch a new route linking its Munich hub and Mexico City in April. The new route will be operated five days a week with Airbus A340-600s.

In other news, Lufthansa has stopped its humorous Swedish ad campaign for contestants to change their name to the gender-confusing “Klaus-Heidi” in return for a new life in popular destination of Berlin. 38 Swedes signed up in the contest for the false name change promotion before the airline decided to stop the ad campaign according to this report by RT.

Read the full report: CLICK HERE

Lufthansa has had a long tradition of naming its aircraft after cities. In this report by Lufthansa, the airline explains how it choses the aircraft names:

Lufthansa has been carrying the names of German cities around the world for over 50 years

An Lufthansa Airbus A319 is about to begin its life as a “flying ambassador” under the name of “Herborn.” On October 29, 2013, the jet with the registration D-AIBH was officially named “Herborn” at Frankfurt Airport by Ursula Benner, wife of the mayor. In accordance with the convention for Lufthansa aircraft naming ceremonies, Herborn’s Mayor Hans Benner then revealed the name on the fuselage and signed the naming certificate together with Karl Ulrich Garnadt, CEO and Chairman of the Executive Board of Lufthansa Cargo AG.

Lufthansa naming conventions as a sign of our time

The “Herborn” brings the total number of aircraft named after German cities and states to over 300. This naming convention has a long tradition at Lufthansa. The first Lufthansa aircraft was named in 1960 (see inset). The idea was to express the company’s solidarity with its German homeland – not just with the major hubs and cities but also with the regions where a large portion of Lufthansa passengers and employees come from.

But 50 years later, the airline operates a much larger network. The increasing number of passengers from all over the world share a key Lufthansa characteristic – internationality. This is why the Airbus A380 will also bear the names of major international cities such as Beijing, Zurich and Johannesburg.

The size of the waiting list is a clear sign that there is still great interest in aircraft naming – even after 50 years. Lufthansa currently holds applications from 245 interested cities and the demand has led to extended waiting times of between 10 and 15 years. The name of your city on the body of a Lufthansa aircraft is still a desirable symbol.

The choice of partner cities – not an easy decision

When choosing names, Lufthansa is guided by the historical, social and economic relevance of the place. Cities may be considered if they have a special connection with aviation or with Lufthansa.

Size, on the other hand, is unimportant. Nevertheless, when choosing names, Lufthansa generally tries to match the population of the place to the size of the aircraft. A Boeing 747-8 carries the name “Brandenburg,” for example, and an Airbus A321 carries the name “Stade” all over the world.

So what happens when an aircraft is taken out of service? The towns and cities in question can relax, because aircraft naming has become an enduring tradition at Lufthansa. In other words, once a town has been accepted into the inner circle and had an aircraft named after it, the name is transferred to a new aircraft when the old one is taken out of the Lufthansa fleet. The motto is “Once Lufthansa, always Lufthansa.”

The history of the “Berlin,” 1960 to present.

The tradition of aircraft naming began on September 16, 1960 with the naming of the “Berlin” by the then mayor, Willy Brandt, who was later to become Chancellor of Germany. Five years after the refounding of the airline with its “crane” symbol, a Lufthansa aircraft began taking the name of a German city to all parts of the world. Over the next fifty years, the name “Berlin” would be passed on to five modern wide-bodied aircraft. At the present time an Airbus A380 bears the name of the German capital. The Lufthansa flagship was named at Berlin Tegel Airport by the mayor, Klaus Wowereit, in 2012. The “Berlin” now flies under the call sign “Mike India” along the east and west coasts of North America and to major cities in the Far East.

Top Copyright Photo: Paul Bannwarth/AirlinersGallery.com (all others by Lufthansa). Airbus A340-642 D-AIHE (msn 540) arrives at the Frankfurt hub.

Lufthansa: AG Slide Show

SkyWest announces quarterly income of $26.4 million

SkyWest, Inc. (St. George, Utah)  today reported net income of $26.4 million, or $0.50 per diluted share, for the quarter ended September 30, 2013, compared to net income  of  $20.9 million, or $0.40 per diluted share, for the same period last year.

SkyWest also reported net income of $50.3 million, or $0.96 per diluted share, for the nine months ended September 30, 2013, compared to $37.2 million, or $0.72 per diluted share, for the same period last year.

Quarter Highlights

SkyWest experienced improved financial results for the quarter ended September 30, 2013, compared to its financial results for the quarter ended September 30, 2012.  SkyWest generated increased operating revenues (after giving effect to reduced fuel, certain engine overhaul and landing fee pass through amounts) primarily due to additional block hour production from increased aircraft utilization, larger fleet size and rate escalations in SkyWest contracts with its major airline partners.  Following are selected highlights from SkyWest’s quarter ended September 30, 2013, compared to the quarter ended September 30, 2012:

  • Increased pretax income 34.8% to $44.4 million, compared to $32.9 million
  • Increased fully-diluted EPS 25.0% to $0.50, compared to $0.40
  • Increased block hour production 2.8% to 613,821 block hours, compared to 596,901 block hours
  • Increased operating revenues by approximately $32.9 million (net of fuel, certain engine overhaul and landing fee pass through revenues), primarily related to rate escalations under SkyWest’s agreements with its major partners and increased block hour production
  • Made cash payments of $22.9 million consisting of $11.5 million for the repurchase of 800,000 shares of treasury stock and $11.4 million for deposits on new aircraft
  • Increased total aircraft fleet to 756 aircraft as of September 30, 2013, compared to 739 aircraft as of September 30, 2012

Commenting on the results, Jerry C. Atkin, SkyWest’s Chairman and CEO, said “We are pleased with the improved financial performance for the current quarter. However, in spite of current challenges we remain committed to further improvement in meeting our current and long-term operational and financial objectives.”

Financial and Operating Results

Operating revenues totaled $850.7 million for the quarter ended September 30, 2013, compared to $865.3 million for the same period last year or a decrease of $14.6 million.  The decrease was due primarily to the reduction of approximately $47.5 million in fuel, certain engine overhaul amounts and landing fees which were directly reimbursed by SkyWest’s major partners and recorded as operating revenues.  However, this reduction was mostly offset by recording approximately $32.9 million in additional operating revenues, primarily resulting from rate escalations under SkyWest’s agreements with its major partners and a 2.8% increase in total block hours for the quarter ended September 30, 2013, compared to the quarter ended September 30, 2012.

Total airline expenses (consisting of total operating and interest expenses) decreased $18.2 million, or 2.2%, during the quarter ended September 30, 2013, compared to the same period in 2012.  However, after excluding pass-through costs for fuel, certain engine overhaul expenses and landing fees, total airline expenses increased $29.3 million.

Under certain of its agreements with its major partners, SkyWest recognizes revenue at fixed hourly rates for mature engine maintenance on regional jet engines and SkyWest recognizes engine maintenance expense on its CRJ200 regional jet engines on an as-incurred basis as maintenance expense.  During the quarter ended September 30, 2013, CRJ200 engine expense under these agreements decreased $4.0 million to $9.1 million, compared to $13.1 million for the quarter ended September 30, 2012, primarily as a result of decreased engine overhaul expense due to the timing of scheduled engine maintenance events.  SkyWest was reimbursed approximately $12.8 million and $10.4 million for engine overhaul expense, under its agreements with its major partners, during the quarters ended September 30, 2013 and 2012, respectively.

Liquidity

At September 30, 2013, SkyWest had $727.8 million in cash and marketable securities, compared to $709.4 million as of December 31, 2012.  The increase in cash and marketable securities of $18.4 million was primarily the result of increased profitability.  Cash and marketable securities increased $62.2 million during the quarter ended September 30, 2013 compared to a balance of $665.6 as of June 30, 2013.  SkyWest’s long-term debt was $1.35 billion as of September 30, 2013, compared to $1.47 billion as of December 31, 2012.  The decrease in long-term debt for the nine-months ended September 30, 2013 was due primarily to SkyWest’s payment of normal recurring debt obligations.  SkyWest has significant long-term lease obligations that are recorded as operating leases and are not reflected as liabilities on SkyWest’s consolidated balance sheets.  At a 4.7% discount rate, the present value of these lease obligations was approximately $1.6 billion as of September 30, 2013.

Recent Business Developments

On August 2, 2012, SkyWest announced the award of 34 additional dual-class aircraft and the removal of 66 CRJ200 aircraft under its Delta Connection Agreements with Delta Airlines, Inc.  As of May 2013, all 34 of these additional dual-class aircraft had been delivered. As of September 30, 2013 SkyWest had removed 30 (22 placed in contract with another partner; other 8 removed from fleet) of the 66 CRJ200 aircraft from service and currently anticipates removing another 18 CRJ200 aircraft between October 2013 and December 2013.  SkyWest believes the remaining 18 CRJ200 aircraft will be removed at various times through 2014 and early 2015.  Additionally, 41 of the 66 aircraft have been financed by Delta and will be returned to Delta with no further obligation by SkyWest.

On May 21, 2013, SkyWest announced it had entered into a Capacity Purchase Agreement (CPA) with United Airlines, Inc. to operate 40 new Embraer ERJ 175 dual-class regional jet aircraft. The CPA is for 12 years and the new aircraft will be operated by SkyWest’s wholly-owned subsidiary, SkyWest Airlines, Inc. (United Express). Deliveries for these aircraft are scheduled to begin in March 2014 and continue through August 2015.

Additionally, on May 21, 2013 SkyWest announced it reached an agreement with Embraer S.A. for the purchase of 100 new ERJ 175 dual-class regional jet aircraft, 40 of which are considered firm orders and the remaining 60 aircraft remain conditional upon SkyWest entering into capacity purchase agreements with other major airlines. SkyWest intends to place the 40 new aircraft into service under the terms of the United CPA discussed above.

On June 17, 2013, SkyWest and Embraer jointly announced an aircraft purchase agreement covering 100 E175-E2 dual-class regional jet aircraft and an option to purchase an additional 100 of the same aircraft.  Deliveries for these E2 aircraft are tentatively planned to start in 2020.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ700 (CL-600-2C10) N752SK (msn 10209) climbs away from the runway at Los Angeles.

Have you seen the “new look” AirlinersGallery.com photo library website?

United Express-SkyWest Airlines: AG Slide Show

SAT Airlines + Vladivostok Avia = Aurora Airlines

Aurora A319-100 (13)(Flt)(Aeroflot)(LR)

Aurora Airlines (Yuzhno-Sakhalinsk) was created today. The new airline name is the result of the merger of SAT Airlines (Yuzhno-Sakhalinsk, Sakhalin, Russia) and Valdivostok Avia (Vladivostok Air) (Vladivostok). Aeroflot Russian Airlines (Moscow) issued this statement:

Aurora Airlines was established by the order of the Prime Minister of the Russian Federation on the basis of two Far Eastern air carriers – SAT Airlines and Vladivostok Avia (both in Aeroflot group since 2011). The main objective of a newly created airline is to contribute to Russia’s Far East social and economic development through the system of more efficient and accessible passenger traffic.

Aurora’s business plan envisages a dynamic boost of operational activities: from 2013 to 2018 the number of flights should increase from 172 to 534; the number of destinations – from 30 to 128; and the annual traffic will reach 2.4 million passengers.

Aurora’s fleet will be strengthened by modern aircraft. In addition to the existing medium-haul Boeing 737s, the fleet will receive three Airbus A319 airliners by the end of this year. By the end of 2014, the carrier’s fleet is expected to comprise seven aircraft of this type. The regional fleet will include turboprop airliners with a capacity between 50 and 78 seats. Local air transportation services will be provided on aircraft with up to 20 seats. The total size of fleet should reach up to 40 aircraft by 2018.

Konstantin Sukhorebrik was appointed Director General of Aurora.

Aeroflot’s share in the new company will be not less than 51%. The rest of the shares will be gradually transferred to the Far Eastern Federal District governments.

This project is supposed to be developed in active cooperation with the local authorities. The Agreement on joint participation in JSC Aurora signed today by Aeroflot and the Government of the Sakhalin region is one of the major important steps.

“The consolidated Far Eastern airline was a strategic idea for a long time, from now on it is a reality,” said Vitaly Saveliev, Director General of JSC “Aeroflot”. “Aurora airline will help to enhance the economic potential of the Far East, increase the mobility of its population and contribute to the growth and reinforcement of local aviation personnel. The new air carrier will be an important part of Aeroflot Group and will strengthen its synergy. We expect an effective cooperation with the federal and regional authorities in the further development of this project, essential both for the Far East and Russia.”

Image: Aeroflot.

Aeroflot: AG Slide Show

SAT Airlines: AG Slide Show

Valdivostok Avia: AG Slide Show

Republic Airways Holdings extends the deadline for the sale of Frontier Airlines

Republic Airways Holdings (Indianapolis) has announced that it has agreed to a 48-hour extension of exclusivity of the sale process for Frontier Airlines (2nd) (Denver).

“Indigo Partners informed us they have made good progress but have not been able to resolve all the conditions to close the transaction,” said Republic Airways Chairman, President and CEO Bryan Bedford. “They requested and we agreed to extend the deadline by 48 hours.”

Republic Airways Holdings is an airline holding company that owns Chautauqua Airlines, Frontier Airlines, Republic Airlines and Shuttle America.

Indigo Partners issued the following statement on the status of its pending acquisition of Frontier Airlines from Republic Airways Holdings:

“Indigo Partners has informed Republic Airways that its planned acquisition of Frontier Airlines will move forward. Major conditions, including agreements with FAPAInvest and Barclaycard are satisfied, as are other commercial and business arrangements. An agreement has not been reached with the Association of Flight Attendants (AFA); however, Indigo has informed Republic that it will waive that condition. The transaction is expected to be finalized later this month, subject to receipt of certain regulatory approvals and other customary closing conditions.”

William A. Franke, managing partner at Indigo Partners said, “We are pleased about the progress we have made to resolve major issues and move this acquisition toward closing. We look forward to completing the transaction and continuing to extend Frontier’s reach and service as a leading, nationwide ultra-low cost carrier (ULCC).”

Copyright Photo: Ton Jochems/AirlinersGallery.com. Airbus A319-111 N922FR (msn 2012) with the Red Fox exits the runway for the gate at Los Angeles International Airport.

Frontier Airlines (2nd): AG Slide Show

FAA issues the final rule on pilot training

FAA logo

Federal Aviation Administration (FAA) (Washington) has issued this rule concerning flight crew training:

As part of its ongoing efforts to enhance safety and put the best qualified and trained pilots in the flight decks of U.S. airplanes, the Department of Transportation’s Federal Aviation Administration (FAA) today issued a final rule that will significantly advance the way commercial air carrier pilots are trained.

In addition, FAA Administrator Michael Huerta is inviting the nation’s commercial aviation safety leaders to Washington, D.C. on November 21, to discuss additional voluntary steps that can be taken to further boost safety during airline operations, including pilot training.

“Today’s rule is a significant advancement for aviation safety and U.S. pilot training,” said U.S. Transportation Secretary Anthony Foxx.  “One of my first meetings as Transportation Secretary was with the Colgan Flight 3407 families, and today, I am proud to announce that with their help, the FAA has now added improved pilot training to its many other efforts to strengthen aviation safety.”

The final rule stems in part from the tragic crash of Colgan Air 3407 in February 2009, and addresses a Congressional mandate in the Airline Safety and Federal Aviation Administration Extension Act of 2010 to ensure enhanced pilot training. Today’s rule is one of several rulemakings required by the Act, including the requirements to prevent pilot fatigue that were finalized in December 2011, and the increased qualification requirements for first officers who fly U.S. passenger and cargo planes that were issued  in July 2013.

The final rule requires:

  • ground and flight training that enables pilots to prevent and recover from aircraft stalls and upsets.  These new training standards will impact future simulator standards as well;
  • air carriers to use data to track remedial training for pilots with performance deficiencies, such as failing a proficiency check or unsatisfactory performance during flight training;
  • training for more effective pilot monitoring;
  • enhanced runway safety procedures; and
  • expanded crosswind training, including training for wind gusts.

“This pivotal rule will give our nation’s pilots the most advanced training available,” said FAA Administrator Michael Huerta. “While the rule marks a major step toward addressing the greatest known risk areas in pilot training, I’m also calling on the commercial aviation industry to continue to move forward with voluntary initiatives to make air carrier training programs as robust as possible.”

The FAA is focusing on pilot training for events that, although rare, are often catastrophic.  Focusing on these events will provide the greatest safety benefit to the flying public. The recent rule to boost pilot qualifications for first officers has raised the baseline knowledge and skill set of pilots entering air carrier operations. Many air carriers have also voluntarily begun developing safety management systems (SMS), which will help air carriers identify and mitigate risks unique to their own operating environments.

The FAA proposed to revise the training rules for pilots in 2009, one month prior to the Colgan Flight 3407 accident. The FAA issued a supplemental proposal on May 20, 2011, to address many of the NTSB’s recommendations resulting from the accident, and incorporate congressional mandates for stick pusher, stall recovery and remedial training.  A stick pusher is a safety system that applies downward elevator pressure to prevent an airplane from exceeding a predetermined angle of attack in order to avoid, identify, or assist in the recovery of a stall.

On Aug. 6, 2012, the FAA issued Advisory Circular (AC) Stall and Stick Pusher Training to provide best practices and guidance for training, testing, and checking for pilots to ensure correct and consistent responses to unexpected stall events and stick pusher activations.  A copy of the AC is available at online.

Air carriers will have five years to comply with the rule’s new pilot training provisions, which will allow time for the necessary software updates to be made in flight simulation technology. The cost of the rule to the aviation industry is estimated to be $274.1 to $353.7 million. The estimated benefit is nearly double the cost at $689.2 million.

Delta to add more routes to Seattle/Tacoma

Delta Air Lines (Atlanta) will add new daily nonstop flights to Seattle-Tacoma International Airport from San Diego International Airport and Portland International Airport as well as an additional flight from Ted Stevens Anchorage International Airport, beginning next year. The new service will provide customers with convenient connections to the airline’s growing international network from Seattle/Tacoma.

Delta’s new and expanded Seattle/Tacoma service includes:

  • Four new daily nonstop flights from San Diego beginning on June 2, 2014.
  • Four new daily nonstop flights from Portland, Ore. beginning on September 2, 2014.
  • One summer seasonal flight from Anchorage, Alaska beginning on June 5, 2014 in addition to returning seasonal service which begins on May 23, 2014.

Delta’s new service from San Diego and Portland will be operated by Delta Connection carrier SkyWest Airlines (St. George) using 76-seat, two-class Bombardier CRJ900s. The additional Anchorage-Seattle seasonal service will be operated with a Boeing 737-800. Each aircraft is equipped with First Class and Economy Comfort seating as well as onboard Wi-Fi.

What message does this SEA continued build-up send to partner Alaska Airlines (Seattle/Tacoma)?

Copyright Photo: Michael B. Ing/AirlinersGallery.com. SkyWest Airlines’ Bombardier CRJ900 (CL-600-2D24) N810SK (msn 15093) in Delta Connection colors departs from Los Angeles.

Delta Air Lines: AG Slide Show

Delta Connection-SkyWest Airlines: AG Slide Show

IAM members to vote on a Boeing proposal to build the 777X wings and fuselage in the Puget Sound area

Boeing logo

Members of the International Association of Machinists and Aerospace Workers (IAM) District 751, District W-24 will vote on a proposal from the Boeing Company (Chicago)  that, if approved, would guarantee the Boeing 777X wings and fuselage will be built by IAM members in the Puget Sound.

In exchange for the 777X guarantee, Boeing proposes a new eight-year labor agreement that will expire in September 2024, providing an unprecedented degree of labor stability in the volatile and competitive industry.

“Securing the Boeing 777X for the Puget Sound means much more than job security for thousands of IAM members,” said District 751 Directing Business Representative Tom Wroblewski. “It means decades of economic activity for the region and will anchor the next generation of wide-body aircraft production right here in its historic birthplace and will complement the 737MAX narrow body.”

According to estimates, the 777X could mean as many as 10,000 direct and 10,000 indirect jobs in the immediate vicinity, with the project also serving as a long-term hub for advanced technology in electronics, avionics and composite technology required by the 777X.

The proposal by Boeing includes additional modifications to the current labor agreement, including cessation of pension accruals for current employees and the establishment of an alternative company-funded retirement plan. Additionally, within 30 days of ratification, all members would be paid a $10,000 signing bonus.

Full details of all changes in the proposal will be provided directly by District 751 and W-24 to IAM members as soon as printing can be completed. A schedule of ratification voting is also being prepared and will be communicated directly to IAM members.

“Only a project as significant as the 777X and the jobs it will bring to this region warrants consideration of the terms contained in Boeing’s proposal,” said Wroblewski. “While not all will agree with the proposal’s merits, we believe this is a debate and a decision that ultimately belongs to the members themselves.”

The IAM represents more than 35,000 Boeing workers and is among the largest industrial trade unions in North America.

Boeing has issued this statement:

Boeing Commercial Airplanes (BA) has issued a statement from President and CEO Ray Conner in response to International Association of Machinists & Aerospace Workers District 751’s decision to proceed with its efforts to secure a historic long-term contract extension that would result in locating final assembly of the new 777X and fabrication and assembly of the airplane’s wing in Puget Sound.”

“I want to congratulate IAM District 751 Directing Business Representative Tom Wroblewski for his leadership, vision and determination to forge an agreement of historic proportion that, when ratified, will secure and extend thousands of high-wage, high-skilled aerospace jobs and expanded economic opportunity for residents of Puget Sound and Portland for many years to come,” said Conner. “Tom and his team pressed hard for an agreement that maintains market-leading pay and benefits for the members he represents, while also recognizing the critical importance of our efforts to achieve increasing competitiveness in order to win against a growing list of global competitors.

“This is important to everyone with a stake in Boeing – including our employees, the community and our customers – and we look forward to the ratification and a long successful future as the global leader in aerospace,” Conner said.

WestJet reports 3Q net earnings of C$65.1 million

WestJet (Calgary) today announced its third quarter 2013 results, with net earnings of $65.1 million, or $0.50 per diluted share. This compares with the net earnings of $70.6 million, or $0.52 per diluted share reported in the third quarter of 2012. Based on the trailing twelve months, the airline achieved a return on invested capital of 13.8 per cent, compared with the 14.4 per cent reported in the previous quarter, and one of the best third quarters in WestJet history.

“We had a strong third quarter in which we flew a record number of guests, exceeded our 12 per cent ROIC target for the fifth consecutive quarter, and reached our initial business transformation initiative milestone one year early by implementing and identifying various opportunities which we believe will result in approximately $100 million in future cost savings in 2014,” said WestJet President and CEO Gregg Saretsky. “With the market launch of our Plus product in August, we are now providing our business and leisure guests with even more flexibility, comfort and convenience, and my thanks go to WestJetters for their ongoing efforts to take care of our guests.”

Q3 13 Q3 12 Change YTD 2013 YTD 2012 Change
Net earnings (millions) $65.1 $70.6 (7.8%) $200.9 $181.4 10.7%
Diluted earnings per share $0.50 $0.52 (3.8%) $1.51 $1.33 13.5%
Total revenues (millions) $924.8 $866.5 6.7% $2,735.8 $2,566.8 6.6%
Operating margin 10.7% 12.5% (1.8 pts) 10.9% 11.1% (0.2 pts)
ASMs (billions) 6.109 5.498 11.1% 18.029 16.576 8.8%
RPMs (billions) 5.059 4.654 8.7% 14.823 13.770 7.6%
Load factor 82.8% 84.6% (1.8 pts) 82.2% 83.1% (0.9 pts)
Segment guests 4,940,943 4,611,315 7.1% 13,927,538 13,109,328 6.2%
Yield (cents) 18.28 18.62 (1.8%) 18.46 18.64 (1.0%)
RASM (cents) 15.14 15.76 (3.9%) 15.17 15.48 (2.0%)
CASM (cents) 13.52 13.80 (2.0%) 13.52 13.77 (1.8%)

During the third quarter, WestJet continued the roll-out of WestJet Encore, beginning service to Brandon, Manitoba on September 3 and announcing Terrace, B.C. as a new community that will welcome its first Encore flight on November 25, 2013. WestJet Encore also added new non-stop routes joining the dots in WestJet’s network, including flights between Winnipeg and Saskatoon, Winnipeg and Regina and between Vancouver and Kamloops, B.C. “We are very pleased with the overwhelming community support WestJet Encore has received, as we give even more Canadians access to lower fares, stimulate demand in smaller communities, and repeat WestJet’s success in the regional space,” said Gregg Saretsky.

In the third quarter, WestJet entered into a definitive purchase agreement for 65 Boeing 737 MAX aircraft with deliveries scheduled from 2017 through 2027. This order will enable the airline to enhance its inflight guest experience, support its low-cost business model, and contribute to its profitable growth by utilizing a lower operating cost aircraft that is expected to reduce fuel burn and CO2 emissions by 13 per cent, as compared with the most fuel-efficient single-aisle aircraft currently available.

With the impact on demand caused by the summer flooding in Calgary, Alberta and the surrounding communities behind the airline, WestJet expects continued strong traffic and revenue growth in the fourth quarter of 2013. The airline anticipates its 2013 fourth quarter RASM to be roughly flat as compared to the same period in the prior year.

The airline expects jet fuel costs to range between 90 and 92 cents per liter for the fourth quarter of 2013, representing a down 1.0 to up 1.0 per cent year-over-year change. For the full year 2013, the airline now expects CASM, excluding fuel and employee profit share, to be down approximately 0.5 per cent year-over-year.

Copyright Photo: Eddie Maloney/AirlinersGallery.com. Boeing 737-8CT WL C-GKWJ (msn 34151) lands in Las Vegas.

WestJet: AG Slide Show

Xtra Airways is operating two Boeing 737-400s for One Airlines of Chile

Xtra Airways (Boise, Idaho) is now operating two of its Boeing 737-400s (N279AD and N42XA) for newcomer One Airlines of Chile.

One Airlines (Santiago) began charter operations on October 25 linking Santiago with Concepción in southern Chile and also to cities like Antofagasta and Calama in the northern part of the country, where the main mining investments are located.

Copyright Photo: Alvaro Romero/ModoCharlie.com. Boeing 737-4Q8 N279AD (msn 26279) rests between assignments at Santiago. The airliner is fully painted in the colors of the new charter airline. N279AD was formerly operated for DirectAir.

Xtra Airways: AG Slide Show

Boeing delivers the 100th Next-Generation 737 to the Lion Group

Boeing (Chicago) and the Lion Group (Lion Air) (Jakarta), Indonesia’s largest airline group, yesterday (November 4) commemorated the delivery of the carrier’s 100th Next-Generation 737 at a special event.

The Lion Group’s 100th airplane, the pictured Lion Air 737-9GP ER (Extended Range) PK-LOF (msn 38741) features a special “100th Boeing Next-Generation 737 – Thank You Indonesia” livery commemorating the delivery.

Lion Air, which was established in 1999, was also the launch customer for the 737-900 ER. Lion Air mainline currently operates 67 737-900 ERs and 19 737-800s. The group’s other Next-Generation 737s are allocated to its full-service carrier in Indonesia, Batik Air, and to its overseas affiliates: Malindo Air in Malaysia and Thai Lion Air, a new carrier based in Bangkok.

All of the Lion Group’s new 737 deliveries feature the Boeing Sky Interior, the 787 Dreamliner inspired cabin.

Lion mainline and subsidiary Wings Air serve 76 destinations in Indonesia, giving the group the largest domestic network in Indonesia. Lion Air mainline has 580 flights a day and Wings Air has 180 flights per day.

Top Copyright Photo: The Boeing Company. Bottom Copyright Photo: Joe G. Walker/AirlinersGallery.com.

Lion Air: AG Slide Show

United to start Chicago O’Hare-San Juan flights tomorrow

United Airlines (Chicago) tomorrow (November 5) will begin daily nonstop flights from its hub at Chicago O’Hare International Airport to Luis Munoz Marín International Airport in San Juan, Puerto Rico.

Flight UA 1688 will depart Chicago O’Hare at 8:27 a.m. (0827) daily, arriving in San Juan at 3:05 p.m. (1505). The return flight, UA 1718, will depart San Juan at 3:55 p.m. (1555) and arrive in Chicago at 7:19 p.m. (1919). The service will be operated with Boeing 737-900 aircraft, with seating for 20 in United First, 51 in Economy Plus and 96 in Economy.

United will begin additional seasonal nonstop service between Chicago O’Hare and San Juan on December 4, 2013. Flight UA 1448 will depart Chicago O’Hare at 4:10 p.m. (1610) daily, arriving in San Juan at 10:48 p.m. (2248). The return flight, UA 1405, will depart San Juan at 7:05 a.m. (0705), arriving in Chicago at 10:29 a.m. (1029). The seasonal service will operate until January 6, 2014.

With the addition of the Chicago flights, United will offer nonstop service between Puerto Rico and five of its hubs. The airline already serves Puerto Rico nonstop from Cleveland, Houston (Bush Intercontinental), Newark and Washington, D.C./Dulles.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 737-924 WL N32404 (msn 30121) taxies to the runway at Seattle-Tacoma International Airport.

Have you seen the “new look” AirlinersGallery.com photo library website?

United Airlines: AG Slide Show

Southwest launches new service from Memphis, Pensacola and Richmond

Southwest Airlines (Dallas) launched new flights this weekend in three cities that join the carrier’s network through previously established service by wholly owned subsidiary AirTran Airways (Dallas).  The new routes complete a plan to bring Southwest Airlines service to all domestic cities in the Company’s network by year’s end, as the integration of Southwest and AirTran approaches its final phases.

As of November 3, 2013, Southwest Airlines offers new nonstop service between:

Pensacola and Nashville and Houston (Hobby)

Richmond and Orlando

Memphis and Baltimore/Washington, Houston (Hobby), Orlando, Chicago (Midway), and Tampa.

AirTran will continue service between Atlanta and Richmond International Airport, with four daily nonstop departures.  Southwest Airlines anticipates a full conversion in Richmond in the second half of 2014.

Copyright Photo: Ton Jochems/AirlinersGallery.com. Southwest Airlines’ Boeing 737-3H4 WL N352SW (msn 24888) in the Lone Star One motif lands in Las Vegas.

Southwest Airlines: AG Slide Show

AirTran Airways: AG Slide Show

Austrian Airlines to fly to Ibiza next summer, hopes to end the year with an operating profit

Austrian Airlines (Vienna) starting on June 1, 2014, it will be offering one flight a week to the Balearic island of Ibiza. Having already added Palma de Mallorca to its ‘Austrian myHoliday’ flight program in summer 2013, the domestic carrier is now set to incorporate another Spanish destination into its program of charter flights. Austrian will be offering 20 nonstop flights a week to Spain next summer.

Vienna – Ibiza     Flight days    Departure     Arrival
OS9511             Sunday        6.30 a.m.     9.00 a.m.
Ibiza – Vienna
OS9512             Sunday        9.45 a.m.     12.15 p.m.

New from next July: summer service to Malé and more flights to Delhi.

Austrian continues to expand its tourism product under the Austrian myHoliday program. From July 1 next year, the domestic carrier will be offering one flight a week to Malé, capital of the Maldives, in a new drive to incorporate the idyllic Indian Ocean destination into its summer schedule. Until now, Austrian Airlines has only offered the route in its winter schedule. The Austrian service to Delhi will also increase by one extra flight from next summer onwards, and the company will fly to the Indian metropolis seven times a week as a result.

On the financial side, Austrian issued this statement:

Austrian Airlines has clearly improved the operating profit in the first nine months of the year (before one-time effects) by €10.3 million to €19.4 million. This increase was primarily achieved on the cost side and also includes savings from the merger of the flight operations of Tyrolean and Austrian. In total, €220 million in gross profit improvements were sustainably raised in the first year of the restructuring program.

Austrian Airlines CEO Jaan Albrecht: “Austrian Airlines is well on track. The restructuring phase will be followed by the planned development of the intercontinental business.”

Synergies from the merger of the engineering and flight operations administration as well as the expansion of long-haul routes should deliver an additional €40 million improvement in gross profit in years 2 and 3. The expansion phase also includes the appointment of around 230 new flight attendants with the operation of an additional long-haul aircraft starting in summer 2014. Recruitment of the staff has already commenced.

In contrast, further savings are being made in the area of administration: The merger of the engineering and flight operations administration of Tyrolean Airways and Austrian Airlines should be completed in 2014 and, as already announced last year, result in a reduction of up to 150 positions. The merger of flight operations and administration has seen the removal of four areas, including the duplicated areas of Cabin, Cockpit, Flight Ops Administration and Head Office Administration at Tyrolean and Austrian.

The merger also includes combining the air traffic control centers at the two locations in Innsbruck and at the hub in Vienna. In the area of technical maintenance, the so-called “Part M” or support functions, such as engineering, planning and control, will be combined in Vienna. Technical maintenance of the fleets will continue to be performed at different locations. The maintenance of the Bombardier Dash 8 aircraft will be performed in Innsbruck, the Airbus and Boeing aircraft will be maintained in Vienna, and Bratislava is the location for the overhaul of the Fokker fleet.

Jaan Albrecht: “Unfortunately, we don’t have any choice. We must make our organization more efficient and remove duplications across the Group – above all the organizational duplications that have existed for years.”

The result as at 30 September 2013 in detail:

Operational expenditure was reduced in the first nine months of the year by €74 million or 4.3 percent from €1,722 million to €1,648 million.

Total operational revenue fell in the first nine months of 2013 by 3.7 percent to €1,667 million (2012: €1,731 million). The operating profit as at September 30, 2013 amounted to €19.4 million. In the previous year, the transfer of flight operations to Tyrolean Airways significantly increased the profit by €67.5 million. The subsequent application of the new accounting standards IAS 19R increased this one-off effect by an additional €134.4 million (see table of figures for details).

Fewer aircraft in service, but better load factors

Austrian Airlines carried 8.6 million passengers in the first nine months of 2013. This corresponds to a slight reduction of 1.8 percent compared to the previous year. The reason: Austrian has removed four aircraft from its medium-haul fleet. In addition, up to two fewer long-haul aircraft were deployed due to the retrofit of the cabins.

Capacity expressed in available seat kilometers (ASK) was reduced by 4.5 percent. However, Austrian Airlines improved its load factor to 78.8 percent (2012: 77.7 percent). In total, Austrian operated 102,768 flights in the first three quarters of the current year, or 376 flights a day on average.

The headcount of the Austrian Airlines Group including its fully consolidated subsidiaries was 6,222 employees on the reporting date of September 30, 2013 (30 September 2012: 6,320 employees).

Austrian Airlines continues to achieve excellent figures in terms of reliability and punctuality. With a departure punctuality rate of 88.6 percent, Austrian Airlines’ figures continued to be better than the European average. Regularity stood at 98.9 percent. This makes Austrian Airlines one of the most punctual and reliable airlines in the world.

Expansion of intercontinental business planned

The schedule to North America will be significantly expanded overall: From  July 1, the new Boeing 777-200 ER will fly daily to Washington, adding around 90 seats per flight to the seat capacity. Depending on the configuration, the Boeing 777-200 ER offers space for about 310 passengers, while the Boeing 767-300 ER has 220 seats. Newark, New Jersey, will also be added as a new destination. The newly introduced Vienna-Chicago O’Hare-Vienna route will be increased from five weekly to daily flights from summer 2014.

“The expansion will also have an impact on passenger numbers and the bottom line. We are expecting about 130,000 additional passengers in 2014,” says Albrecht.

Outlook: Profit in the low double-digit millions for the full year

Austria’s biggest domestic airline remains confident about the full year 2013:

“We want to end the year with an operating profit in the double-digit millions on the balance sheet, in the black, of course,” concludes Albrecht. The last time Austrian Airlines was in the black was in 2007.

Copyright Photo: Paul Bannwarth/AirlinersGallery.com. All Austrian branded aircraft are now operated by lower cost Tyrolean Airways (except one 777 to keep the Austrian AOA alive). Tyrolean Airways’ Fokker F.28 Mk. 0070 OE-LFG (msn 11549) now with just Austrian titles (it was formerly Austrian arrows) lands at EuroAirport serving the Basel/Mulhouse/Freiburg area.

Austrian Airlines: AG Slide Show

Air Seychelles orders three Viking Air DHC-6-400s

Air Seychelles Purchase 3

Air Seychelles (Mahé) has announced the purchase of three Viking Air DHC-6 Twin Otter Series 400 aircraft, in a deal which will see the island carrier renew its domestic fleet. The new aircraft will be used for services between Mahé and Praslin, as well as other islands in the archipelago, including Bird, Denis and Frégate.

All three aircraft deliveries are scheduled for mid-2015, with an option for earlier delivery if aircraft become available.The airline currently operates one DHC-6 Twin Otter Series 400 and three Series 300 aircraft.

Copyright Photo: Viking Air. Air Seychelles’ first Twin Otter Series 400, and the second Viking production aircraft, msn 846, waits on Viking ramp prior to customer delivery.

Air Seychelles: AG Slide Show

Air Seychelles 2011 logo

Route Map:

Air Seychelles 11:2013 Route Map

Video. Flying on the DHC-6 in the Seychelles from Praslin back to Mahe.

Reuters: DOJ asking American and US Airways to give up some DCA slots and routes for a merger agreement

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) reportedly are considering a pre-trial offer by the Department of Justice (DOJ) to give up slots at Ronald Reagan National Airport (the combined airline would control 69 percent of the DCA slots) in Washington and some other routes around the country according to this report by Reuters citing sources and the Wall Street Journal. The DOJ is focusing on over 1,000 city pairings where the combined airline would dominate. However in a deregulated marketplace where any U.S. airline can enter a market, how would the “new American” if approved, be prevented from reentering a market again in the future? DCA is slot controlled but most of the airports on the DOJ list are “free entry” airports.

Read the full report: CLICK HERE

Copyright Photo: Brian McDonough/AirlinersGallery.com. American’s Boeing 737-823 N968AN (msn 30095) completes its approach from the south into Washington’s slot-controlled Reagan National Airport.

Have you seen the “new look” AirlinersGallery.com photo library website?

American Airlines: AG Slide Show

US Airways: AG Slide Show

Norwegian’s pilots call off their strike today after reaching a new agreement

Norwegian Air Shuttle’s (Norwegian.com) (Oslo) 600 pilots called off their strike today after four days of government-sponsored mediation.

The airline issued this short statement (translated from Norwegian):

Norwegian’s management and Norwegian Pilot Union (NPU) have agreed on a new contract for the pilots. This means the normal operation in the future.

Both parties are very pleased that we have reached an agreement and we can now look forward and build a strong, competitive Norwegian. The most important thing for us is that our passengers can feel safe with our flight goes as usual, said CEO Bjørn Kjos.

Copyright Photo: SM Fitzwilliams Collection/AirlinersGallery.com. Norwegian Air Shuttle’s (Norwegian.com) Boeing 737-8JP WL LN-DYU (msn 39008) with Jorn Utzon on the tail and also painted in the special “Wireless Internet on Board” scheme passes through Dublin.

Norwegian: AG Slide Show

JetBlue becomes the first U.S. airline to implement personal electronic devices from gate to gate

JetBlue Airways (New York) received approval for gate-to-gate personal electronic device (PED) from the Federal Aviation Administration (FAA) at 4:15 p.m. ET on November 1, and implemented the policy immediately. The very first commercial flight of any U.S. airline to allow gate-to-gate PED use was JetBlue’s flight 2302 from New York’s JFK to Buffalo, scheduled departure time 4:30 p.m. All JetBlue customers were immediately allowed to start using personal electronic devices (PEDs) during all phases of flight, on all flights.

Prior to the new policy, customers had to turn off and stow all electronic devices during taxi, takeoff, landing and when the aircraft was below 10,000 feet. The new policy allows JetBlue customers to use smart phones, tablets, games and other smaller electronic devices at any time during taxi, takeoff and during flight, unless otherwise instructed by a crew member. Laptops must be stowed for taxi, takeoff and landing.

Copyright Photo: Brian McDonough/AirlinersGallery.com. JetBlue Airways Airbus A320-232 N586JB (msn 2160)  in the special “I Love NY” scheme arrives at Washington (Reagan National).

Have you see the “new look” AirlinersGallery.com photo library website?

JetBlue Airways: AG Slide Show

Airlines impacted at Los Angeles International Airport by shooter, Terminal 3 remains closed

LAX Terminal Map (11:2013)

Airlines at Los Angeles International Airport (LAX) were impacted yesterday morning (November 1) when a 23-year old gunman forced his way through the TSA checkpoint at Terminal 3, killing one TSA officer. Terminal 3 remains closed this morning, forcing the relocation of several airlines. Flights were delayed yesterday for several hours on average.

Read the full report from CNN: CLICK HERE

LAX Twitter Updates: CLICK HERE

Video:

Indigo Partners’ statement on the progress of its acquisition of Frontier Airlines

Indigo Partners (Phoenix) has issued this statement regarding the progress of its acquisition of Frontier Airlines (2nd) (Denver):

“Good progress has been made on all fronts as we work to satisfy conditions to close Indigo Partners’ previously announced acquisition of Frontier Airlines from Republic Airways Holdings.

  • “We are pleased to note in this regard that a tentative agreement has been reached with FAPAInvest on commercial matters.
  • “While progress has been made, no agreement has been reached with Barclaycard about an extension of its credit card and associated line of credit.
  • “We continue to work with the Association of Flight Attendants and we believe all sides recognize the importance of an agreement to both the AFA membership and to Frontier.

“We remain hopeful that remaining conditions to closing can be achieved in the next few days.”

Indigo Partners is a private equity firm established by W. A. Franke in 2003 to pursue acquisitions and strategic investments in the air transportation and related industries. The firm was a significant investor in Tiger Airways based in Singapore and Spirit Airlines based in Ft. Lauderdale, Florida, and maintains lead investments in Wizz Air Holdings, Plc, a ULCC with multiple bases in Central and Eastern Europe and Volaris Airlines, a ULCC based in Mexico City.

Copyright Photo: Tony Storck/AirlinersGallery.com. Frontier Airlines’ Airbus A319-111 N908FR (msn 1759) (Blue Heron) lands in Las Vegas.

Frontier Airlines: AG Slide Show

Alaska Airlines launches new routes today

Alaska Airlines (Seattle/Tacoma) begins daily service between Boise, Idaho, and San Diego today, as the carrier celebrates 30 years of service to Boise Airport.

Summary of new service:

Start date City pair

Departs

Arrives Frequency
Nov. 1 Boise-San Diego

10:30 a.m.

11:40 a.m. Daily
Nov. 1 San Diego-Boise

5:35 p.m.

8:45 p.m. Daily

All times based on local time zones.

The flights will be operated by Alaska Airlines regional partners SkyWest Airlines (St. George) and Horizon Air (Seattle/Tacoma).

In other news, Alaska Airlines is also inaugurating daily service between Seattle/Tacoma and Colorado Springs, Colorado, starting today, and between Seattle/Tacoma and Omaha, Nebraska, starting on November 7.

Summary of new service:

Start date City pair Departs Arrives Frequency
Nov. 1 Seattle-Colorado Springs 6:20 p.m. 9:55 p.m. Daily
Nov. 2 Colorado Springs-Seattle 8:00 a.m. 9:55 a.m. Daily
Start date City pair Departs Arrives Frequency
Nov. 7 Seattle-Omaha 10:40 a.m. 3:45 p.m. Daily
Nov. 7 Omaha-Seattle 4:15 p.m. 5:45 p.m. Daily

Times based on local time zones.

Flights will be operated by SkyWest Airlines using 70-seat Bombardier CRJ700 regional jets.

Finally, Alaska Airlines is growing again in Portland, Oregon, with new nonstop flights between the Rose City and Tucson, Arizona, today, and between Portland and Reno/Tahoe, Nevada, starting on November 8.

Summary of new service:

Start date City pair Departs Arrives Frequency
Nov. 1 Portland-Tucson 9:15 a.m. 12:05**/1:05 p.m. Daily
Nov. 1 Tucson-Portland 12:35**/1:45 p.m. 3:30**/3:40 p.m. Daily

** Nov. 1 and Nov. 2 flight time differs due to daylight saving time adjustment.

Start date City pair Departs Arrives Frequency
Nov. 8 Portland-Reno 11:10 a.m. 12:45 p.m. Daily
Nov. 8 Reno-Portland 1:15 p.m. 2:50 p.m. Daily

All times based on local times zones.

Alaska Airlines’ Portland-Tucson flights will be operated by SkyWest Airlines using 70-seat CRJ700 regional jets (above). Portland-Reno/Tahoe flights will be flown for Alaska by Horizon Air using 76-seat Bombardier DHC-8-402s (Q400s).

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Alaska SkyWest’s (SkyWest Airlines) Bombardier CRJ700 (CL-600-2C10) N217AG (msn 10031) climbs away from the Seattle-Tacoma International Airport hub.

Alaska Airlines: AG Slide Show

Alaska SkyWest: AG Slide Show

Japan Airlines to install Internet services and upgraded cabins on select domestic routes

Japan Airlines-JAL (Tokyo) has announced it will further expand its JAL NEW SKY PROJECT and install in-flight Internet service on select Japan domestic flights. The airline issued this statement:

JAL NEW SKY PROJECT was initially launched by the airline in January 2013 with the introduction of the JAL SKY SUITE 777 on international routes. The revamped aircraft boasts increased comfort and functionality in all classes based on the theme Designed to evoke a one-class higher feel. Leading the redesign are the airlines new fully-flat seats in JAL Business Class.  Furthermore, the new JAL SKY SUITE 767 will be introduced onto select international flights starting in December 2013.

As part of this latest Project, JAL will revamp cabin interiors on aircraft operating on select domestic routes, which will include the installation of leather seating and LED lighting throughout the cabin based on the theme Superior Cabin. Another highlight of the new Economy class seat is a slim-style seatback design resulting in approximately 5cm (max.) more legroom than the present seat pitch, providing customers with a more comfortable travel experience.

Additionally, in-flight Internet service, currently available on select JAL international flights from July 2012, will be first installed onto select Japan-domestic flights.

New seats

The new leather seating in J-class and Economy class will be made from the same high-quality genuine leather used for seats installed in luxury vehicles. The airlines plan is to revamp all the cabin seats in both classes on select domestic routes. In addition, carpet installed throughout the cabin will also be replaced to match the redesigned interiors

Economy class

A slim-style seatback design results in approximately 5cm (max.) more legroom than the present seat pitch.

The all-leather seats are molded to better fit the natural contour of the passengers back and overall body, providing significantly more comfort.

The light-weight material helps to reduce fuel consumption and carbon dioxide emissions.

 20131028_DOM_Interia_fig1_Eng.jpg

 

Class J

Seating in JAL’s popular Class J will offer slightly wider space for passengers to enjoy their time in-flight, and the new genuine leather covered seats will evoke a feeling of luxury.

 

 20131028_DOM_Interia_fig2_Eng.jpg

LED lighting in cabin

Based on the concept “air-like lighting”, the cabin atmosphere can be easily changed according to the flight hours, the season, and the natural rhythm of time to create a relaxing ambience and a feeling of Japan.

Lighting based on the time of day:

 20131028_DOM_Interia_fig3_Eng.jpg

First class service to be installed on some Boeing 767-300 ER aircraft:

The popular First class service on present domestic flights will be expanded to domestic Boeing 767s.

Top Copyright Photo: Akira Uekawa/AirlinersGallery.com. Boeing 767-346 ER JA658J (msn 40370) approaches the runway at Haneda Airport in Tokyo. All other photos by Japan Airlines.

JAL-Japan Airlines: AG Slide Show

Boeing to increase the 737 production rate in 2017 to 47 aircraft per month

Boeing logo

Boeing (Chicago) has announced the production on the 737 program will increase to 47 airplanes per month in 2017, the highest rate ever for the best-selling airliner in history. Once implemented, the 737 program will build more than 560 airplanes per year, and will have increased output by nearly 50 percent since 2010.

Boeing currently produces 38 airplanes per month from its Renton, Wash., factory and will increase the rate to 42 per month in the first half of 2014. First delivery of the 737 MAX is on track for third quarter of 2017.

 

Lufthansa donates its Vickers Viscount 814 D-ANAF to the Museum of Technology in Speyer, Germany, will modify 157 Airbus A320 family aircraft

Lufthansa Viscount 800 D-ANAF (55)(Grd) FRA (Lufthansa)(LR)

Lufthansa (Frankfurt) has issued this statement:

Representatives of Lufthansa Technik and Lufthansa Technical Training officially handed over a Vickers Viscount 814 to the Museum of Technology in Speyer in southwest Germany. Lufthansa operated the aircraft on scheduled routes from 1962 to 1969, and in 1972 converted it into a technical training aircraft. To date, more than 2,000 young people in the Lufthansa Group have undergone basic training on this Vickers Viscount as an aircraft mechanic or electrician.

In cooperation with the workshop team at the Museum of Technology in Speyer, Lufthansa Technik trainers and apprentices have now restored the Viscount 814 with the registration D-ANAF for exhibition purposes. Before being transported to Speyer, the plane had to be dismantled. It was then re-assembled at the museum and repainted in its original livery with its 1960s registration. The Lufthansa Technik apprentices completed the work in a total of 2,096 man-hours, and visitors to the museum can now admire the results.

In the 1960s, the Vickers Viscount 814 was the workhorse on European routes and was one of the most popular propeller aircraft ever deployed on short and medium-haul routes. Since 1958, Lufthansa has operated a total of eleven of these aircraft on its domestic German and European scheduled services.

A close friendship has developed between the Museum of Technology in Speyer and Lufthansa Technik, which is an honorary member of the Museum Association. For many years, both companies have collaborated successfully on joint projects. Back in 2003, Lufthansa handed over a retired Boeing 747-200 with the registration D-ABYM to the museum for the symbolic price of one euro. There was an outburst of applause as “Yankee Mike” (the phonetic designation used by pilots for the last two letters “YM” in the aircraft registration) taxied to its final parking position. And now the Vickers Viscount 814 has also found a new home.

While the Lufthansa Group is currently investing 36 billion euros in new, even more environmentally friendly aircraft as part of the largest fleet renovation process in the company’s history, the Vickers Viscount represents a “historic fleet renewal” at Speyer’s Museum of Technology.

In other news, Lufthansa has announced it will add vortex generators to reduce noise for its 157 Airbus family aircraft. The company issued this statement:

Lufthansa is an active proponent of noise abatement and is investing in the nationwide modification of 157 aircraft from its Airbus A320 family. These planes connect Lufthansa’s hubs in Frankfurt and Munich with the destinations in its closely meshed European route network.

The manufacturer, Airbus, has even developed vortex generators especially for the A320 family. These are based on the findings of research carried out by Lufthansa and the German Aerospace Center. Flyover measurements showed that the vortex generators eliminate two unpleasant tones and therefore reduce the total noise generated by the approaching plane by up to two decibels. They can be fitted both to aircraft already in service as well as to the new Airbus A319, A320 and A321 models, which are still to be delivered.

“By fitting these vortex generators to our Airbus short and medium-haul fleet, we are continuing to invest in active noise protection”, says Kay Kratky, Member of the Lufthansa German Airlines Board, Operation & Hub Frankfurt. “In addition to the extensive modernisation of our fleet over the next few years, this is one of several steps that we are taking to reduce noise. It shows our commitment to working towards a balance between the interests of aviation and local residents, especially at our hubs.”

The tons that the vortex generators will eliminate are created on the underside of the wing by the pressure equalisation vents for the fuel tanks. Airflows passing over them in flight have an effect like blowing across the mouth of a bottle. The new components create a vortex in front of these vents and so prevent the noise. The modification of the existing fleet is to start in early 2014. All new deliveries of the A320 and A321 for Lufthansa will be fitted as standard with the vortex generators in future.

Top Copyright Photo: Lufthansa.

Lufthansa: AG Slide Show

Have you seen the “new look” AirlinersGallery.com photo library website?

Bottom Copyright Photo: Paul Bannwarth/AirlinersGallery.com. Airbus A319-114 D-AILF (msn 636) (Star Alliance) arrives in Zurich.

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