Iberia (Madrid) on March 17 introduced its new Airbus A330-300 on its first trans-Atlantic route from Madrid to Boston. It is unclear if the type will be operated to Miami as planned.
AESA, the Spanish Aeronautical Safety Agency, granted Iberia ETOPS-90 minutes authority. Iberia hasn’t flown ETOPS flights since it retired its two Boeing 767-300s (EC-GTI and EC-GSU).
ETOPS stands for “Extended-range Twin-engine Operational Performance Standards”. Under ETOPS-90 the aircraft must follow a route that will allow it to reach a diversion airport within 90 minutes if one engine fails.
Copyright Photo: Wingnut. Airbus A330-302 EC-LUB (msn 1377) taxies at London (Heathrow).
FedEx Corporation reports third quarter operating income of $589 million, down 28% from $813 million last year
FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.23 per diluted share for the third quarter ended February 28, excluding business realignment costs totaling $47 million primarily related to the company’s voluntary buyout program for eligible U.S. officers and managing directors. Including this year’s realignment costs, third quarter earnings were $1.13 per diluted share.
Last year’s third quarter earnings were $1.55 per diluted share, excluding a $0.10 per share reversal of a reserve associated with a legal matter at FedEx Express. Including last year’s reserve reversal, earnings were $1.65 per diluted share.
“The third quarter was very challenging due to continued weakness in international air freight markets, pressure on yields due to industry overcapacity and customers selecting less expensive and slower-transit services,” said Frederick W. Smith, FedEx Corp. chairman, president and chief executive officer. “In response, beginning April 1, FedEx Express will decrease capacity to and from Asia and will aggressively manage traffic flows to place low yielding traffic in lower-cost networks. We are currently assessing how these actions may allow FedEx Express to retire more of its older, less-efficient aircraft. We remain focused on our strategic cost reduction programs, which are ramping up and on track.”
Third Quarter Results
FedEx Corp. reported the following consolidated results for the third quarter:
• Revenue of $11.0 billion, up 4% from $10.6 billion the previous year
• Operating income of $589 million, down 28% from $813 million last year
• Operating margin of 5.4%, down from 7.7% the previous year
• Net income of $361 million, down 31% from $521 million a year ago
As discussed above, the quarter’s results reflect the decline in profitability at FedEx Express due to the accelerating demand shift toward lower-yielding international services and lower international export yields. The quarter’s results were also negatively impacted by the business realignment costs noted earlier and by fewer operating days in each transportation segment.
FedEx projects earnings to be an adjusted $1.90 to $2.10 per diluted share in the fourth quarter and an adjusted $6.00 to $6.20 per diluted share for fiscal 2013 before charges related to the company’s business realignment. Costs of the benefits provided under the voluntary buyout program will be recognized in the period that eligible employees accept their offers, predominantly in the fourth fiscal quarter. Including the third quarter costs, the company now expects the fiscal 2013 pretax cost of the voluntary buyout program to range from approximately $450 million to $550 million in cash expenditures, or $0.89 to $1.09 per diluted share, with some additional costs expected in fiscal 2014. Actual costs will depend on employee acceptance rates. Including the business realignment costs, earnings are expected to be $0.94 to $1.34 per diluted share in the fourth quarter and $4.91 to $5.31 per diluted share for fiscal 2013. This guidance assumes the current market outlook for fuel prices. The capital spending forecast for fiscal 2013 is now $3.6 billion, compared to $3.9 billion in the company’s previous forecast.
In last year’s fourth quarter, the company reported earnings of $1.99 per diluted share, excluding a $0.26 per diluted share non-cash aircraft impairment charge at FedEx Express. Including this charge, earnings were $1.73 per diluted share.
“Our lower-than-expected results for the quarter and reduced full-year earnings outlook were driven by third quarter international revenues declining approximately $100 million versus our guidance primarily due to accelerating customer preference for lower-yielding international services, lower rate per pound and weight per shipment,” said Alan B. Graf Jr., FedEx Corp. executive vice president and chief financial officer. “We expect these international revenue trends to continue. We have other actions under way beyond those already included in our profit improvement program. Some of these additional actions may involve temporarily or permanently grounding aircraft, which could result in asset impairment or other charges in future periods.”
“In early February, a number of officers and managing directors, primarily at FedEx Services and FedEx Express, accepted voluntary buyouts, and on February 15, thousands more team members were notified of their eligibility for the buyout program. This program is one of the first steps in a process that will help FedEx Express achieve necessary cost structure reductions and improved efficiency. In addition to continued profit improvements in the base businesses at FedEx Ground and FedEx Freight, our profit improvement programs are targeting annual profitability improvement at FedEx Express of $1.6 billion by the end of fiscal 2016, from the fiscal year 2013 base business. Collectively, these initiatives are expected to increase margins, improve cash flows and increase our competitiveness,” said Graf.
Stock Repurchase Program Authorization Increase
The FedEx Corp. board of directors has authorized the repurchase of up to 10 million shares of FedEx Corp. common stock. These shares augment the remaining 188 thousand shares authorized for purchase under existing share repurchase programs. It is expected that the additional share authorization will primarily be utilized to offset equity compensation dilution over the next several years. Purchases may be made in the open market and in negotiated or block transactions. FedEx had 317 million shares outstanding as of February 28, 2013.
FedEx Express Segment
For the third quarter, the FedEx Express segment reported:
• Revenue of $6.70 billion, up 2% from last year’s $6.54 billion
• Operating income of $118 million, down 66% from $349 million a year ago
• Operating margin of 1.8%, down from 5.3% the previous year
Revenue increased due to this year’s business acquisitions and growth at FedEx Trade Networks, while core express revenue was constrained by continued demand shift toward lower-yielding international services. U.S. domestic revenue per package grew 1% as higher rate per pound and weight per package were offset by lower fuel surcharges, while average daily package volume increased 1%. Higher growth in international deferred services continued, with FedEx International Economy® volume growing 12%, while FedEx International Priority® volume increased 2% during the quarter. International export revenue per package fell 3% due to the demand shift to lower-yielding international services, lower rates and lower fuel surcharges.
Operating income and margin were significantly lower due to the demand shift to lower-yielding international services, the prior year reversal of a $66 million reserve associated with a legal matter, the negative impact of one fewer operating day, higher pension cost and increased depreciation expense. Costs associated with the business realignment program also negatively impacted operating results by $34 million.
Copyright Photo: Brian McDonough. Airbus A300F4-605R N689FE (msn 875) lands at Baltimore/Washington.
American Airlines (Dallas/Fort Worth) has decided to equip all of its new A320 Family fleet with Airbus’ innovative Runway Overrun Prevention System (ROPS) technology. This onboard cockpit technology, which Airbus has pioneered independently over several years, increases pilots’ situational awareness during landing, reduces exposure to runway excursion risk, and if necessary, provides active protection.
ROPS was first approved by the European Aviation Safety Agency (EASA) on the A380 in October 2009 and to date is currently in service or ordered on around 70 percent of the A380 fleet. ROPS is part of the A350 XWB’s basic configuration and is also being applied on the other Airbus types being produced today, starting with the A320 Family, with certification on this type expected later this year.
“We are proud to be the first airline to equip our entire A320 family aircraft with this state-of-the-art technology,” said Capt. John Hale, Vice President – Flight for American Airlines. “Our pilots appreciate the operational benefits that this industry-approved cockpit technology will bring to their daily work.”
“ROPS is the result of years of continuing research by Airbus,” said Yannick Malinge, Airbus’ Senior Vice President and Chief Product Safety Officer. “Its selection by American Airlines for its A320 Family fleet underscores the value and significant contribution that ROPS brings to aviation safety. Airbus is proud to be on the leading edge of this technology for our industry – where safety is the universal priority.”
Runway excursion – meaning either an aircraft veering off the side of the runway, or overrunning at the very end – has become the primary cause of civil airliner hull losses in recent years, particularly as other formerly prevalent categories of aircraft accidents have now largely been eliminated. Furthermore, various industry bodies including the EASA, NTSB, Eurocontrol and FAA recognize this and are fully behind the introduction of effective measures by commercial aviation stakeholders to not only mitigate, but eliminate the risk of runway excursions.
In line with this, Airbus is working to make ROPS commercially available to other aircraft manufacturers’ aircraft. The system could be coupled with the mandatory Terrain Avoidance Warning System already fitted on Airbus aircraft and will utilize an enhanced and specifically developed version of its worldwide runway database.
The Airbus-patented ROPS computes minimum realistic inflight landing and ground stopping distances while comparing them to available landing distances in real time. The analyses take into account factors such as runway topography, runway condition, aircraft weight and configuration, wind, and temperature. The resulting outcome produces audio callouts and alerts for pilots, making ROPS an awareness tool to assist the crew in the go-around decision making process and the timely application of ground stopping means.
To regularly enhance the A320 Family’s capabilities and performance, Airbus invests approximately 300 million euros annually in keeping the aircraft highly competitive and efficient. More than 9,400 A320 Family aircraft have been ordered and around 5,400 delivered to more than 380 customers and operators worldwide – reaffirming its position as the world’s best-selling single-aisle aircraft Family.
Images: Airbus. Of course the new A319s and A321s will not appear in this old 1968 livery.
Wizz Air Ukraine (Wizz Air Ukraine Airlines) (Kiev) has taken delivery of an Airbus A320 aircraft equipped with Sharklet fuel saving wing tip devices, becoming the first Ukrainian carrier to do so. Sharklets are newly designed wing-tip devices that improve the aircraft’s aerodynamics and significantly cut the airline’s fuel burn and emissions by four per cent on longer sectors.
Sharklets are an option on new-build A320 Family aircraft, and standard on all members of the NEO Family. They offer the flexibility to A320 Family operators of either adding around 100 nautical miles more range or allowing an increased payload capability of up to 450 kilograms.
Wizz Air Ukraine is the only low-fare, low-cost airline serving the Ukrainian market and will operate a fleet of 4 Airbus A320 aircraft from 5 airports in Ukraine to 19 destinations in 10 countries by summer 2013.
Top Copyright Photo: Eurospot. The pictured Airbus A320-232 with Sharklets with the temporary test marks of F-WWDS was handed over to the carrier as UR-WUC (msn 5539) on March 15.
Bottom Copyright Photo: Airbus. Another view of F-WWDS (UR-WUC).
Routes from Kiev:
SriLankan Airlines (Colombo) and the president of Sri Lanka opened the country’s second international airport yesterday (March 18) on the island’s southeast coast.
Air Arabia (Sharjah) became the first foreign airline to operate scheduled services to and from Mattala Rajapakse International Airport, approximately 168 miles south of the capital of Colombo according to this report by Hindustan Times.
Read the full report: CLICK HERE
Copyright Photo: Antony J. Best. Airbus A340-311 4R-ADC (msn 034) climbs away from London (Heathrow).
Air Seychelles (Mahe) is now in the black. The flag carrier reported a net profit of $1 million in 2012 under the management and assistance of Etihad Airways (Abu Dhabi). The airline issued this statement celebrating this achievement:
• Net profit of $1 million in first year of Etihad Airways management contract
• Significant synergies and cost savings from equity partnership with Etihad Airways
• Carried 247,750 passengers on its domestic and international network
• Introduced 19 new codeshares
• Expanded its international network launching flights to Abu Dhabi and, from March 24, Hong Kong
Air Seychelles, the national airline of the Republic of Seychelles, has reported a net profit of $1 million for the 2012 financial year.
The positive result comes just 12 months after Etihad Airways acquired a 40 per cent stake in the airline and was awarded a five year management contract. The profit follows three years of significant losses.
The Chairman of Air Seychelles, Joel Morgan, said the past year had been focused on reshaping the business of the iconic Indian Ocean airline for success.
“The choice of Etihad Airways as a strategic partner has been the right one. Working with our new partner, we have had to make some hard decisions to turn the airline around. We are now seeing the successful results of our strategy,” he said.
“To record a profit after the immense challenges we faced a year ago is an incredible achievement. I am proud of the enormous progress Air Seychelles has made. The recovery of Air Seychelles is a new chapter not only in our airline’s history—but our nation’s. I am confident we have now laid the ground work for sustainable profitability and our brightly-coloured aircraft will cheer the skies for years to come.”
Chief Executive Officer of Air Seychelles, Cramer Ball, said: “In the first instance, this meant looking at the cost-base, and then stripping down the business right across the airline’s operations to find the right shape and size for our national carrier.
“We introduced strict fiscal control in parallel with business process re-engineering to make our operation more efficient. We are a very different business today.”
He attributed this success to leveraging the economies of scale and synergies arising from the equity alliance with shareholder, Etihad Airways.
This entailed the renegotiation of contracts for catering, ground handling and in-flight entertainment, and the conclusion of joint contracts for fuel, uniforms and stationery supplies, all of which improved service and significantly reduced costs.
“Our first focus was on a new network plan which could support the hugely important tourist sector in Seychelles more effectively with good connections and broader choice for visitors to the archipelago.”
To optimize the schedule and enhance connectivity with its partner airlines, the Air Seychelles’ network was expanded through 19 codeshare destinations with Etihad Airways, opening up key European markets, and with the introduction of four flights a week to Abu Dhabi.
The network expansion was made possible by renewed investment in fleet. During the year, the airline introduced an Airbus A330-200 and wet-leased an Etihad Airways’ Airbus A320 on the Mauritius route.
“We are going to continue to build our capacity with a second A330-200, allowing us to start flights to Hong Kong to capture the lucrative Asian leisure market in March 2013. We will also be increasing the frequency of flights to Abu Dhabi, Johannesburg and Mauritius.”
A recently announced codeshare with airberlin will expand the island carrier’s network throughout Europe.
Network development was accompanied by investment in product and service enhancements.
“We have responded to the demand from our affluent leisure and tourism guests by introducing a new international inflight product and can now offer a business class experience to rival any airline. Air Seychelles offers on demand dining in business class and is the only airline to offer a lie-flat business class seat flying into Seychelles,” Mr Ball said.
Seychellois produce now features on the food and beverage menus introduced to enhance the dining experience.
In-flight entertainment was also upgraded with every seat offering video-on-demand, with expanded movie selections and games scheduled for early in 2013.
The year also saw the integration of the frequent flyer program, Seychelles Plus, with Etihad Guest, opening the doors to many more exciting offers and opportunities for its 18,000 members.
An important element of the airline’s turnaround strategy was a people program supported by cross-functional teams from Etihad Airways, introduced to transform the structure of the organisation to improve efficiency and effectiveness.
In addition to right-sizing the workforce to 550 staff, the plan makes for extensive and on-going training both in the Seychelles and at Etihad Airways’ state-of the-art Training Academy in Abu Dhabi. One hundred and thirty-six cabin crew underwent training in Abu Dhabi to deliver a higher quality service. Twenty-nine pilots have also been fully-trained on the A330-200.
“Our team and our warm Seychellois hospitality is our secret ingredient and we are doing everything we can to make sure we nurture and develop our talent. We have forged partnerships to develop Seychellois talent and build career paths through MOUs with Seychelles Tourism Academy and the University of Seychelles. In 2012, 11 candidates were selected to join Etihad Airways technical engineering, graduate manager, and cadet pilot training programs.”
An on-going program will select Seychellois candidates for the career development programs in Abu Dhabi.
Established in 1978, Air Seychelles now has more than 200 domestic flights a week and a strong domestic charter business. The airline employs 550 people, 25 per cent of whom have worked with the company for more than 15 years. Forty per cent of the staff have worked at Air Seychelles for 10 years or more.
“Our partnership with Etihad Airways has made us a bigger player in the global aviation scene and we are better able to withstand the uncertainties and volatility in the global economy. In addition to our natural organic growth, in 2013 we’re looking to broaden our network through partnerships. Now we need to maintain our strategic focus and effort,” Mr Ball said.
Copyright Photo: Rainer Bexten. Airbus A330-243 A6-EYY (msn 751) approaches Johannesburg for landing.
Lion Air (Jakarta) has placed a firm order with Airbus for 234 A320 Family aircraft, comprising 109 A320neo, 65 A321neo and 60 A320ceo. The deal sees the carrier become a new customer for Airbus.
The order was finalized today at a special ceremony at the Elysée Palace in Paris in the presence of President François Hollande of France, who witnessed the signing of documents by Rusdi Kirana, Co-Founder and CEO of Lion Air Group and Fabrice Brégier, President and CEO, Airbus.
In a single class layout the A320 can seat up to 180 passengers, while the A321 can carry up to 236 with the latest cabin configuration options. Lion Air Group will use the aircraft to meet growth requirements on its expanding domestic and regional route network. The carrier will announce engine selections for the aircraft in the near future.
China Airlines‘ (Taipei) Board of Directors has elected company President Huang-Hsiang Sun as its new chairman.
According to the carrier, “Sun joined China Airlines in1970 and has assumed various leadership positions in the China Airlines Group and affiliated companies. Over the past four decades, he has served as vice president of China Airlines’ Passenger Sales and Corporate Planning divisions; general manager of China Airline’s Europe and San Francisco branch offices; vice president of Mandarin Airlines; president of Formosa Airlines and TransAsia Airways; and CEO of Yangtze River Express Airlines. Sun became president of China Airlines in June 2008 and will continue to assume this role until a new president is appointed.”
Sun immediately set up a team to study the possibility of a new low-cost joint venture possibly with TransAsia Airways (Taipei).
Copyright Photo: Ton Jochems. China Airlines’ Airbus A340-313X B-18801 (msn 402) taxies at Amsterdam.
Lion Air (Jakarta) is reportedly ready to sign a major order with Airbus for narrow body A320 Family aircraft in a high-profile ceremony today in Paris. Lion Air is a staunch Boeing customer and has over 300 Boeing 737-800, 737-900ER and 737 MAX 9 aircraft on order for the fast-growing Asian market.
Read the full report from Reuters: CLICK HERE
Copyright Photo: Joe G. Walker. Boeing 737-9GP ER WL PK-LJJ (msn 37289) turns off the runway after a test flight at Seattle (Boeing Field).
Turkish Airlines (Istanbul) has signed a contract for up to 117 A320 Family aircraft (25 A321ceo, 4 A320neo, 53 A321neo and options for 35 additional A321neo aircraft). This order is the largest ever placed by a Turkish carrier. The engine selection will be made at a later date.
Turkish Airlines already operates 75 A320 Family aircraft. The new order will help Turkish Airlines expand their short to medium-haul routes from their Istanbul hub, while the aircraft’s commonality with their existing Airbus fleet will generate additional cost-savings.
On the financial side, the airline’s net profit expanded to $625 million for 2012.
Copyright Photo: Paul Bannwarth. Airbus A320-232 TC-JAI (msn 3259) arrives at EuroAirport which serves Basel-Mulhouse-Freiburg.
Czech Airlines-CSA (Prague) will have a new airline partner. The Czech government has approved Korean Air‘s (Seoul) $3.4 million offer to acquire 44 percent of the stock of state-owned Czech Airlines.
Read the full report from The Financial Times: CLICK HERE
Copyright Photo: Keith Burton. Airbus A320-214 OK-GEB (msn 1450) departs from Southend.
Air Pacific (2nd) (Nadi), Fiji’s national airline, has formally rolled out its soon to be adopted new Fiji Airways identity with the delivery of its first new A330-200 aircraft. The carrier will officially adopt the Fiji Airways brand in June, the new A330 will begin revenue services on April 2. The aircraft was officially accepted by Nick Caine, Air Pacific’s CFO, at Airbus’ delivery center in Toulouse.
The aircraft is the first painted in Fiji Airways’ striking new livery depicting traditional Fijian symbols of welcome, caring and connection of its people to their islands. The livery was designed by celebrated Fijian Masi artist Makereta Matemosi.
The aircraft is the first from an order for three A330-200 placed in 2011 to replace Air Pacific’s Boeing 747-400s and 767s with newer, more fuel-efficient aircraft.
“We are determined to become the airline of choice in the South Pacific. Our distinctive livery conveys the warmth and hospitality of our home. Our passengers will experience superior comfort with our state of the art cabin products once we start commercial operations with the A330 in April, with even better features and products to be rolled out once we become ‘Fiji Airways’ in June. The A330 is the most fuel efficient aircraft in its category and allows us to optimise our network and modernise our fleet to ensure future growth,” said Dave Pflieger, Air Pacific’s Managing Director and CEO.
Copyright Photo: Olivier Gregoire. Pictured departing from Toulouse, Airbus A330-243 F-WWKD (msn 1394) was handed over to the carrier today as DQ-FJT.
Monarch Airlines (flymonarch.com) (London-Luton) has taken delivery of its first Airbus A320 equipped with fuel saving wing tip devices, called Sharklets, becoming the first UK carrier to benefit from them.
Sharklets are an option on new-build A320 Family aircraft, and standard on all members of the A320neo Family. The new wing tip devices measure 2.4 meters tall, replacing the A320’s current wing tip fence. They offer the flexibility to A320 Family operators of either adding around 100 nautical miles more range or an increased payload capability of up to 450 kilograms.
Copyright Photo:Eurospot. The pictured Airbus A320-214 F-WWBZ (msn 5526) was handed over to Monarch Airlines as G-ZBAA on March 14.
Lufthansa’s (Frankfurt) Supervisory Board has approved the acquisition of 100 A320 Family aircraft (35 A320neo, 35 A321neo and 30 A320ceo with Sharklets) and two A380s worth approximately $11.2 billion at list prices. The engine choices will be announced by the airline at a later date.
This latest acquisition reconfirms the Lufthansa Group as Airbus’ largest airline customer, with a total of 532 aircraft ordered. Today the Lufthansa Group is also Airbus’ biggest operator worldwide with 385 Airbus aircraft currently in service. These include: 271 A320 Family, 41 A330s, 63 A340s, and 10 A380s.
Copyright Photo: Michael B. Ing. Airbus A380-841 D-AIMG (msn 069) completes its final approach into Beijing.
JetBlue Airways (New York) and Qatar Airways (Doha) today announced a one-way codeshare agreement to connect the carriers’ networks via New York’s John F. Kennedy International Airport and Washington Dulles International Airport, subject to receipt of government approval.
The two airlines have been interline partners since 2011, enabling customers to enjoy the convenience of a single combined ticket for Qatar and JetBlue-operated flights, plus other benefits including one-stop check-in and baggage transfer.
Tickets featuring a Qatar Airways flight number will soon be available for sale for JetBlue-operated connections in 26 markets between New York/JFK and Washington Dulles, including the following U.S. destinations:
- Buffalo, New York (BUF)
- Charlotte, North Carolina (CLT)
- Denver, Colorado (DEN)
- Fort Lauderdale, Florida (FLL)
- Fort Myers, Florida (RSW)
- Jacksonville, Florida (JAX)
- Long Beach, California (LGB)
- New Orleans, Louisiana (MSY)
- Palm Beach, Florida, (PBI)
- Phoenix, Arizona (PHX)
- Portland, Oregon (PDX)
- Salt Lake City, Utah (SLC)
- Syracuse, New York (SYR)
“We are pleased to deepen our successful relationship with Qatar Airways through this new codeshare at JFK and Dulles, providing customers more access to both networks,” said Dave Barger, JetBlue’s president and CEO. “Qatar has been a great partner for JetBlue, serving our customers well with their outstanding product and service.”
Qatar Airways Chief Executive Officer Akbar Al Baker said: “We are delighted to further expand our partnership with JetBlue, an airline that focuses on quality and service, a key hallmark of Qatar Airways. Through this enhanced agreement, we will extend our reach to more customers and more markets, providing greater convenience for travellers to and from our global network.”
JetBlue customers can avail themselves of Qatar Airways’ connecting service to destinations across the Middle East, Africa, and Asia Pacific regions, including 12 cities in India and a number of destinations including Bangkok, Singapore, Kuala Lumpur, Dubai, Kuwait, Riyadh, Islamabad, Nairobi and Dar es Salaam.
JetBlue is a top domestic airline at JFK, with more than 150 daily departures to dozens of major U.S. cities including Boston, Chicago, Fort Lauderdale, Los Angeles, Orlando, San Francisco, and San Juan, Puerto Rico, from its home at the modern Terminal 5.
At Washington Dulles, the airline offers service to Boston, New York, and Long Beach and Oakland, California. Customers traveling with JetBlue enjoy premium amenities including unlimited free snacks and drinks, personal seatback televisions, spacious leather seating, the most legroom in coach of any U.S. airline (based on average fleet-wide seat pitch), and personalized service from JetBlue’s award-recognized in-flight crewmembers.
Top Copyright Photo: Ken Petersen. JetBlue Airways Airbus A320-232 N655JB (msn 3072) sports the “Our 100th A320″ special livery at the New York (JFK) hub.
Bottom Copyright Photo: Brian McDonough. Qatar Airways’ Boeing 777-3DZ ER A7-BAB (msn 36103) arrives at Washington (Dulles).
Air Transat‘s (Montreal) parent posted a first quarter net loss of C$15.1 million, down from C$29.5 million in the same quarter a year ago. The group issued the following statement:
Transat A.T. Inc. posted revenues of $805.7 million for the quarter ended January 31, 2013, compared with $829.3 million in 2012, a decrease of $23.6 million, or 2.8%. The Corporation recorded an operating loss before amortization and depreciation1 of $21.0 million, compared with $31.8 million in 2012 and a net loss of $15.1 million ($0.39 per share on a diluted basis), compared with $29.5 million ($0.77 per share on a diluted basis) in 2012. Before non-operating items, Transat reported an adjusted after-tax loss3 of $21.6 million in 2013 ($0.56 per share on a diluted basis), compared with $29.9 million ($0.79 per share on a diluted basis) in 2012.
“Changes brought to our organization over the last 18 months, as well as our decision to slightly reduced capacity, have contributed to the improvement of our results,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat.
First Quarter Highlights
The Corporation posted revenues of $805.7 million, compared with $829.3 million in 2012, and an operating loss before amortization and depreciation1 of $21.0 million, compared with $31.8 million in 2012. The decrease in revenues is mainly attributable to the Corporation’s decision to reduce capacity on its markets (Sun, transatlantic and France), hence a 12.6% reduction in the number of travellers. On all markets, selling prices were higher than in 2012.
Revenues of North American business units, which are generated by sales in Canada and abroad, decreased by $10.1 million (1.4%) compared with the same period in 2012. For the quarter, the capacity on sun destinations was down 12% compared with 2012. Capacity on the transatlantic market was down 18%. North American business units recorded an operating loss before amortization and depreciation of $8.3 million, compared with $19.1 million in 2012. The improvement in margin is mainly attributable to higher selling prices during the quarter.
Revenues of European business units, which are generated by sales made in Europe and in Canada, decreased by $13.5 million (10.5%) over 2012, mainly due to a decision to reduce capacity. European operations generated an operating loss before amortization and depreciation of $12.7 million, similar to the previous year.
As at January 31, 2013, compared to the same date in 2012, cash stood at $247.9 million, compared with $214.0 million; working capital ratio was 1.0 compared with 0.99 and deposits from customers for future travel were $592.0 million compared with $598.4 million. Off-balance-sheet agreements stood at $531.6 million as at January 31, 2013, the decrease since January 31, 2012 being due to payments made during the 12-month period.
Outlook for the second quarter
The Canadian sun destinations market accounts for a very significant portion of Transat’s business in the winter. For that market, Transat’s capacity in the second quarter is approximately 10% inferior than last year, load factors are inferior, selling prices are higher.
On the transatlantic market, on which it is low-season, capacity is 18% inferior to the previous year, load factors are similar and selling prices are higher.
In France, where it is also low-season, medium-haul bookings are similar to last year, and long-haul bookings are 7% inferior (based on the Corporation’s decision to reduce capacity). Selling prices are slightly higher on both market segments.
To the extent the aforementioned trends hold, Transat expects better results than last year for its second quarter.
On the transatlantic market, for the summer, Transat’s capacity is down by 11% compared with 2012. Load factors are similar and selling prices are higher. In France, compared with last year at the same date, bookings are slightly lower and selling prices are similar.
The following are non-IFRS financial measures used by management as indicators to evaluate ongoing and recurring operational performance.
|(1)||MARGIN (OPERATING LOSS) BEFORE DEPRECIATION AND AMORTIZATION: Gross margin (operating loss) before depreciation and amortization expense.|
|(2)||ADJUSTED INCOME (LOSS): Income (loss) before income taxes, impact of fuel hedge accounting, ABCP revaluation, and restructuring charges (or gains).|
|(3)||ADJUSTED AFTER-TAX INCOME (LOSS): Net income (loss) attributable to shareholders before impact of fuel hedge accounting, ABCP revaluation and restructuring charges (or gains), net of related taxes.|
|(4)||NET CASH: Cash and cash equivalents not held in trust or otherwise reserved, less balance sheet debt.|
Copyright Photo: Gilbert Hechema. Airbus A330-243 C-GTSJ (msn 795) climbs away from the Montreal (Trudeau) base.
Iberia (Madrid) may finally have some labor peace at least with its non-pilot workers. Most of the companies’ unions have called off any further strikes over job and salary cuts after accepting a compromise offer from a government-appointed mediator. However this deal does not include the pilots represented by SEPLA. The airline issued this statement:
Iberia and the unions representing 93% of its employees have agreed to the set of proposals made by mediator Gregorio Tudela with regard to the airline’s viability plan.
The signing of the agreement, which is binding on all employees since it was accepted by a majority, signifies the calling off the strike scheduled for March 18-22, and the withdrawal of the company’s plan for mass dismissals. The flight program will proceed normally next week.
Management said that the acceptance of the mediator’s proposals will oblige it to change many aspects of the initial viability plan, but considers it is worth it to reach an agreement, expressing its gratitude to Tudela, a university law professor, and describing it as a good starting point for restoring profitability, hence future viability.
Iberia will immediately ask unions to negotiate the measures needed to raise productivity. Management said the proposed staff reduction and wage cuts were a step in the right direction, but that they must be accompanied by specific productivity measures to ensure future sustainability.
The airline’s CEO, Rafael Sánchez-Lozano, said he was “satisfied to have achieved an agreement that enables us to advance towards a leaner, more viable Iberia, able to compete on more reasonable terms in the difficult commercial aviation business”. He added: “we all had to concede something, but the company is totally committed to keep negotiating with the unions about all the productivity elements that are required to return Iberia to the forefront of the world airline industry”. Sánchez-Lozano said: “the time has come for all of us to work together to build a future, and to apologise to customers for the inconveniences caused in recent weeks, in the hope that we can soon regain their trust. All employees will be involved in these efforts.”
The company regrets that the SEPLA pilots union remains outside the agreement reached, calling it “irresponsible, and showing no solidarity”, while expressing the hope that it will soon join the other unions in coming to terms for the good of the airline and its customers.
What will be SEPLA’s next move? Read the analysis by Reuters: CLICK HERE
Swiss International Air Lines (Zurich) has committed for six new Boeing 777-300 ER aircraft. The prospective deal will have to be finalized into a firm order. Boeing (Chicago) issued the following statement this morning:
Boeing, the Lufthansa Group and Swiss International Air Lines announced a commitment today for six 777-300 ER (Extended Range) airplanes. The airplanes, valued at $1.9 billion at list prices, were selected for the airline’s long-haul fleet renewal. Boeing looks forward to working with Swiss to finalize the details, at which time the order will be posted to the Boeing Orders & Deliveries website.
The Boeing 777-300 ER is the largest long-range twin-engine commercial airplane in the world, seating up to 386 passengers in a three-class configuration and has a maximum range of 7,825 nautical miles (14,490 km).
On the financial side, the company issued this statement:
Swiss International Air Lines generated total income from operating activities of CHF 5,033 million in 2012, a 2% increase on the previous year (2011: CHF 4,927 million). But with the market environment still difficult, operating profit for the year fell 31% to CHF 212 million (2011: CHF 306 million). The CHF 27 million operating profit for the fourth quarter of 2012 was, however, an improvement on the CHF 18 million of the prior-year period. Swiss has also announced that its Airbus A340 fleet will be phased out from 2016 onwards. To this end, orders have been placed with Boeing for six Boeing 777-300 ER aircraft.
Swiss International Air Lines generated total income from operating activities of CHF 5,033 million for 2012, a 2% increase on the CHF 4,927 million of the previous year. Annual operating profit declined 31%, however, to CHF 212 million. Swiss achieved an operating profit of CHF 27 million for the 2012 fourth-quarter period, a CHF 9 million improvement on the CHF 18 million of October-to-December 2011.
Copyright Photo: Mark Durbin. Swiss currently operates a fleet of 15 older and less fuel efficient Airbus A340-300s. The new additions will start to replace the older Airbus long-range fleet. A340-313X HB-JMK (msn 169) lands at San Francisco International Airport in the updated 2012 livery which features larger and bolder titles.
Air Seychelles (Mahe) on March 7 welcomed its second Airbus A330-200 in a ceremony at the Seychelles International Airport .
The new aircraft, Airbus A330-243 A6-EYZ (msn 807, ex VT-JWE), is leased from Etihad Airways and is named ‘Vallée de Mai’ in honor of Seychelles’ second UNESCO Natural World Heritage Site. A6-EYZ is being operated by an all-Seychellois crew. At the controls were Captain Paul Belle and First Officer Hervé Morel, with the cabin managed by nine Air Seychelles cabin crew.
The Seychellois-operated flight is a significant milestone for the airline, which only a year ago retired its Boeing 767-300 aircraft and retrained all pilots and cabin crew to operate the Airbus A330. Equity partner Etihad Airways provided the training at its world-class facilities in Abu Dhabi.
Copyright Photo: Rainer Bexten. The first Airbus A330 is this A330-243 registered as A6-EYY (msn 751) and was leased from Etihad Airways on July 3, 2012. A6-EYY, pictured arriving at Johannesburg, is named “Aldabra”.
AirAsia Philippines (Angeles City, Pampanga-Clark International Airport) has agreed to acquire all of the shares Zest’s affiliate Asiawide Airways from Alfredo Yao, vice chairman of Export and Industry Bank Inc. and the Zest-O Corporation. This acquisition will give AirAsia 40 percent of the shares of Zest Air (Zest Airways) (Manila). In return, Yao will get a 15 percent share in closely held AirAsia (Kuala Lumpur) according to this report by Bloomberg.Each airline, both former competitors, will now operate separately but will be aligned with each other.
Read the full report: CLICK HERE
Top Copyright Photo: Terry Wade. AirAsia’s (AirAsia.com) (Philippines) Airbus A320-216 RP-C8191 (msn 4989) is seen at London (Gatwick) prior to the delivery.
Middle Copyright Photo Below: AirAsia. AirAsia and Zest Air officials celebrate the new association.
Bottom Copyright Photo: Manuel Negrerie. Zest Air’s (Zest Airways) Airbus A320-232 RP-C8994 (msn 743) climbs away from Taipei (TPE).
Air Namibia (Windhoek) is making changes. The government of the Republic of Namibia, Air Namibia’s sole shareholder, has decided to recapitalize the airline, with an equity injection in the form of two brand new Airbus A319-100 aircraft (total now four) for use on regional routes. New A319 services from Windhoek to Gaborone (three times a week) and Harare (four times a week) will commence on May 15.
The airline is also adding two Airbus A330-200s to replace the current two A340-300s which are operated on the valuable Windhoek-Frankfurt route. The first of the A330-200 aircraft is expected to enter the fleet in October 2013 and the second one is expected to enter the fleet in November 2013. These aircraft will offer 30 business class seats with full flat beds and personalized video and audio inflight entertainment, and 214 economy class seats also fitted with personalized audio/video inflight entertainment system.
However the carrier is expected to drop the Windhoek-Accra route on April 11 per Airline Route.
Copyright Photo: Gerd Beilfuss. Airbus A319-112 D-AVWG (msn 5366) became V5-ANM when it was handed over to the carrier. It is pictured at Hamburg (Finkenwerder) prior to the delivery.
Virgin Atlantic Airways (London) has frozen all salaries according to this report by Bloomberg. The struggling carrier is expected to report a loss of $201 million for its fiscal year ending on February 28 according to the Sunday Times.
Read the full report: CLICK HERE
Copyright Photo: Keith Burton. Looking almost new in its updated 2010 livery, Airbus A340-313X G-VELD (msn 214) climbs away from the runway at the London (Heathrow) hub. Higher fuel costs are hurting the carrier especially with its older less fuel-efficient aircraft like the Airbus A340-300. The last of the four A340-300s is expected to depart from the fleet this year.
Cyprus Airways (Larnaca) reported a net loss of $72.5 million as the flag carrier continues to lose money. The airline is also facing an European Union investigation into whether Cyprus improperly loaned $135.2 million to the national carrier. In addition, no other state funds can be loaned to the carrier without prior approval of the European Union.
Read the full story from Famagusta Gazette of Cyprus: CLICK HERE
Copyright Photo: Andi Hiltl. Airbus A320-232 5B-DCG (msn 4197) approaches Zurich for landing.
Vueling Airlines‘ (Barcelona) board has rejected the latest offer by the International Airlines Group (IAG) (London) to acquire the remaining shares in the low-fare airline. The board believes the IAG $148 million bid undervalues the company and is recommending that all stockholders reject the latest bid.
Read the full report from Bloomberg: CLICK HERE
Copyright Photo: Keith Burton. Airbus A320-232 EC-LQN (msn 2168) completes its final approach into London (Heathrow).
Finnair (Helsinki) has announced it will join the trans-Atlantic joint venture established by American Airlines, British Airways and Iberia in October 2010.
Finnair will add its AY code to select American, British and Iberia flights between North America and Europe (EU, plus Norway and Switzerland). American (AA), British (BA) and Iberia (IB) codes on Finnair’s daily flights between New York and Helsinki.
All together, the JV will operate up to 102 daily roundtrips between North American and Europe serving 42 gateways on either side of the Atlantic.
Copyright Photo: Ton Jochems. Airbus A330-302X OH-LTR (msn 1067) taxies to the gate at the HEL hub.
Korean Air (Seoul) has submitted a proposal to acquire 44 percent of the shares of unprofitable Czech Airlines-CSA (Prague) according to this report by the Wall Street Journal. Reportedly Korean was the only bidder for this minority share. The airline is currently owned by the Czech Ministry of Finance (56.92%), Czech Consolidation Agency (34.59%) and other Czech institutions.
Previously in December 2012, Czech Airlines announced it would acquire the Airbus A330 starting in June 2013, enabling the flag carrier to launch new scheduled service to Seoul, South Korea, and to initiate more intensive code-share cooperation with Korean Air in operating long-haul flights from Prague via Seoul to Asia.
Korean Air wants a larger presence in Europe and, if successful, would not interfere with Czech management of the company.
Read the full report: CLICK HERE
On the financial side, KAL issued this statement:
Korean Air, South Korea’s flagship airline, has announced its financial results for the fourth quarter and full year ending December 31, 2012.
Due to weak economic recovery and high fuel prices, Korean Air posted an operating income of 3,083.5 billion KRW for the fourth quarter of 2012, and an operating loss of 17.6 billion KRW. International passenger and cargo business remained the major revenue contributors for the airline in Q4, accounting for 56.4% and 26.5% of the operating revenue respectively. Compared to the same period last year net income for Q4 increased by 215.1% to 140.3 billion KRW.
For the full year of 2012, the airline recorded an operating income of 12,728 billion KRW, up 3.7% year-on-year, and an operating profit of 322.4 billion KRW. The net income for 2012 returned to the black and reached 256.4 billion KRW.
Copyright Photo: Jacek Fiszer. Czech Airlines has retired its Boeing fleet and now operates an Airbus and ATR fleet only. Airbus A319-112 OK-PET (msn 4258) approaches Warsaw.
Norwegian Air Shuttle (Norwegian.com) (Oslo) has announced it will wet lease two Airbus A340-300s from Hifly (Lisbon) due to the delays in the delivery of its new Boeing 787-8s for the new New York and Bangkok routes.
The company issued the following statement (translated from Norwegian):
Norwegian has entered into an agreement to lease two long-range Airbus A340-300. The aircraft will be used on Norwegian routes to New York and Bangkok on the company’s Dreamliner aircraft will be delayed.
To ensure that Norwegian passengers can fly to and from New York and Bangkok on Dreamliner planes that are delayed, the Company has entered into an agreement to lease two Airbus A340-300 aircraft. The two aircraft Norwegian will use are the pending Dreamliner delivery. The agreement is called a MOU – Memorandum of Understanding – which is binding on both parties. Outsourcing is a so-called “wet lease” – leasing of aircraft and crew.
The two Airbus aircraft to Norwegian to lease owned by the Portuguese HiFly leasing company that took them over the winter 2012/2013. The aircraft were previously flown by Singapore Airlines and Emirates. Aircraft are subject to EU safety legislation and enforcement is carried out by European aviation authorities. HiFly is one of several European airlines which conduct leasing of aircraft to companies who need spare capacity. The company has had a number of major European airlines on its customer list.
Copyright Photo: Pedro Baptista/Flyingphotos. Hifly’s Airbus A340-313X OY-KBM (msn 450) taxies into position at the Lisbon base.
Spirit Airlines (Fort Lauderdale/Hollywood) is continuing to add service at Houston’s George Bush Intercontinental Airport (IAH). Starting June 13, 2013, Spirit will operate daily nonstop service between Houston and Denver and between Houston and Detroit.
The new nonstop flight between Denver and Houston continues on to Orlando with same plane service. In addition, the new daily nonstop flight between Houston and Denver complements Spirit’s existing one-stop service.
The new daily nonstop service between Detroit and Houston continues on to Dallas/Fort Worth with same plane service.
Spirit currently offers daily nonstop service from Houston to Chicago, Dallas/Fort Worth, Las Vegas and Orlando, as well as a variety of connections throughout the Americas. In addition, daily nonstop service between Houston and Los Angeles begins on April 25, 2013.
Copyright Photo: Brian McDonough. Airbus A320-232 N601NK (msn 4206) completes its approach into Washington (Reagan National).
British Airways‘ (London) first Airbus A380 will fly from Los Angeles to London Heathrow, with tickets going on sale today.
Los Angeles will be the inaugural destination for the first A380 to be operated by a UK airline. The double-decker superjumbo is due to be delivered to British Airways in July and seats are now on sale for flights from October 15, 2013.
The second A380 route will be to Hong Kong and customers can book flights now for travel from November 15, 2013.
The A380 will be the largest aircraft in the British Airways fleet, accommodating 469 customers across four cabins. Customers in First will be seated at the front of the main deck. The cabin will offer 14 seats and is evolved from the current First class. Club World (business class) customers can choose from 44 seats on the main deck, or 53 seats on the upper deck. These upper deck seats will feature a new 2:3:2 configuration across the cabin. The 55 World Traveller Plus (premier economy) seats will be located on the upper deck while World Traveller (economy) customers can choose seats on both the main and upper deck. Both cabins will feature the airline’s current design, which is now flying on the new Boeing 777-300 ER fleet.
The aircraft’s innovative design makes it much quieter during take-off and landing and more fuel efficient than its predecessors. British Airways has ordered 12 for delivery by 2016 as part of a [Pounds]5bn investment over five years in new aircraft, smarter cabins, elegant lounges, and new technologies to make life more comfortable in the air and on the ground.
The arrival of the A380 has entailed a multi-million pound redevelopment of British Airways’ Heathrow engineering base to support maintenance of the world’s largest commercial aircraft type. This included two 24-ton roof ‘eyebrows’ being lifted into place in one of the hangars to raise the height of the entrance to accommodate the A380’s 24-meter tailfin.
British has 12 A380s on order.
All images: British Airways.
Scandinavian Airlines-SAS (Stockholm) and its Star Alliance partner Thai Airways International (Bangkok) on April 8 will expand their present code-share agreement to also cover Stockholm – Bangkok, Oslo – Bangkok and Copenhagen – Bangkok. This will be in addition to the present code-share destinations on Thai’s regional destinations in Asia and SAS’ Scandinavian and European destinations.
Top Copyright Photo: Stefan Sjogren. SAS’ Airbus A330-343X LN-RKH (msn 497) departs from the Stockholm (Arlanda) hub.
Bottom Copyright Photo: Michael B. Ing. Thai’s Boeing 777-3D7 ER HS-TKA (msn 29150) climbs away from the Bangkok hub.
JetBlue Airways (New York) today announced its intent to launch new daily nonstop service from San Juan to Chicago (O’Hare) – JetBlue’s 17thnonstop destination from the Puerto Rican capital. Flights are scheduled to begin on November 20, 2013.
JetBlue is the largest carrier in Puerto Rico.
JetBlue’s schedule between San Juan, Puerto Rico and Chicago:
|San Juan (SJU) to Chicago (ORD):||Chicago (ORD) to San Juan (SJU):|
|Depart – Arrive||Depart – Arrive|
|3:45 p.m. – 6:55 p.m.||9:30 a.m. – 4:10 p.m.|
|- Flights operate daily effective November 20, 2013 –
- All times local -
From its San Juan focus city, JetBlue currently flies to 14 nonstop destinations, ten within the continental US: Boston, Fort Lauderdale-Hollywood, Hartford, Jacksonville, New York (JFK), Newark, Orlando, Tampa, Washington D.C. (Reagan National) and West Palm Beach, and four within the Caribbean: Santo Domingo, St. Maarten, St. Thomas, and St. Croix.
Copyright Photo: Ken Petersen. Airbus A320-232 N658JB (msn 3150) with the Dots tail and the Official Airline of Springfield logo by the nose prepares to depart from the runway at New York JFK International Airport.
Nonstop (white) routes from San Juan:
Virgin Australia Airlines (Brisbane) has announced it will commence flying its two-class wide-body Airbus A330 aircraft from Brisbane to Perth for the first time starting on May 15.
The daily Airbus A330 flights to Perth on weekdays will depart Brisbane at 8:45 am (0845) and 8:15 pm (2015), arriving at Perth at 12:25 pm (1225) and 11:55 pm (2355) respectively. The return A330 services from Perth will depart at 12:30 pm (1230) and 10:45 pm (2245), arriving in Brisbane at 6:50 pm (1850) and 5:05 am (0505) (+1 day) local time.
A third weekday return service, operated by a Boeing 737 aircraft, will depart Brisbane at 5:30 pm (1730) and Perth at 7:35 am (0735) arriving at 9:25 pm (2125) and 1:55 pm (1355) respectively.
The weekend A330 departure is on Sunday departing Brisbane at 8.15 pm (2015) and Perth 10:45 pm (2245) arriving at 11:55 pm (2355) and 5:05 am (0505) (+1 day) respectively. These are complemented on Saturdays and Sundays by the existing Boeing 737 schedule unless stated otherwise.
On the financial side, Virgin Australia Holdings reported a A$61 million half-year profit before taxes for the six months ending on December 31, 2012.
Read the full report: CLICK HERE
Copyright Photo: Olivier Gregoire. Airbus A330-243 F-WWYU (VH-XFC) (msn 1293) completes a test flight at Toulouse.
Emirates Airline (Dubai) on March 1 launched daily nonstop service from Dubai to Houari Boumediene Airport in Algriers. It is the 22nd gateway for Emirates in Africa and the airline’s 130th international destination. The new route will be operated with Airbus A330-200 aircraft.
Copyright Photo: Christian Volpati. Airbus A330-243 A6-EKQ (msn 518) arrives at the Dubai hub.
Lufthansa (Frankfurt) has taken delivery of its first Airbus A320 equipped with Sharklets at the Airbus site in Hamburg (Finkenwerder), Germany. Lufthansa is becoming the first carrier in Europe to take benefit of the new fuel-saving wing-tip devices. The airline will receive 21 more A320 Family aircraft equipped with Sharklets until 2015.
A320-214 D-AIZP (msn 5487) was handed over to the carrier yesterday (March 1).
Sharklets are made from light-weight composites and are 2.4 meters tall. They are an option on new-build A320 Family aircraft and standard on all members of the new A320neo family. They offer operators up to four percent fuelburn reduction on longer range sectors and provide the flexibility of either adding an additional 100 nautical miles range or increased payload capability of up to 450 kilograms.
Top and Bottom Copyright Photos: Airbus. Sister aircraft A320-214 D-AXAE (msn 5497) will become D-AIZQ on delivery and will become the second with Sharklets for LH.
Alitalia (2nd) (Compagnie Aerea Italiana) (Rome) is again in financial turmoil. The flag carrier reported its loss for 2012 grew to $363.8 million from $89.6 million in 2011.
In addition, its new Chief Executive Officer (CEO) Andrea Ragnetti resigned after only one year on the job.
Read the full financial report from Alitalia: CLICK HERE
Read the analysis from Bloomberg: CLICK HERE
Copyright Photo: Brian McDonough. Airbus A330-202 EI-EJP (msn 1354) lands at Miami.
TAP Portugal (Lisbon) posted a $20.6 million profit in 2012.
The airline issued the following financial statement:
With a profit of 15.9 million euros in 2012, this was well above the 3.1 million in 2011, TAP SA achieved positive results for the fourth consecutive year.
In 2012, total debt was reduced from 1042 TAP million to 862 million, which represents an improvement of 21%. Note also that the total debt, which in 2011 represented 46% of total income and gains, fell to 35% in 2012.
Obtaining a positive net income for the fourth year was made possible by the company’s growth, which reached 4.4% with over 10,186 million passengers, surpassing for the first time in its history the barrier of 10 million.
Total revenues in financial year 2012 amounted to 2,429 million euros, showing an increase of 6.9% compared to 2273 million in the previous year, highlighting the Maintenance Assistance (Third Party) with an improvement of 23% and ticket revenues with a growth of 6.7%.
Operating costs, excluding fuel, stood at 1,422 million euros, 4.8% more than the 1,357 recorded in 2011. The fuel bill, whose cost has not stopped growing since 2008, had in 2012 an additional 93 million euros, up 13% compared to 2011.
The positive results of TAP reflect the continuing effort to improve efficiency, achieved through productivity gains and decreased consumption.
Operating results were also positive at 43.4 million euros, 5.6% better than the 41.1 recorded in 2011.
While increasing the supply (PKO) 4.1%, the national airline increased demand (PKU) of 4.8%, which allowed also improve the load factor of 76.3% in 2011 to the 76.8 percent in 2012.
Copyright Photo: Dave Glendinning. Airbus A320-214 CS-TNP (msn 2178) in the Star Alliance livery taxies to the runway at London (Heathrow).
International Consolidated Airlines Group (IAG) (British Airways and Iberia) (London) presented the Group’s consolidated results for the year to December 31, 2012. In addition, IAG presented combined results for the comparative year to December 31, 2011, including Iberia’s first 21 days of January in 2011.
IAG period highlights on combined results:
· Operating loss for the year to December 31, 2012 of €23 million before exceptional items ($29.8 million) (2011: operating profit €485 million). After exceptional items operating loss for the year not including Iberia restructuring and impairment was €68 million, compared to our guidance in November of €120 million
· Before exceptional items, British Airways made an operating profit of €347 million in the year to December 31, 2012 and Iberia made an operating loss of €351 million
· Non-operating charges for the year were €384 million, including €266 million related to non-cash pensions accounting requirements
· Loss before tax for the year of €997 million ($1.29 billion) (2011: profit before tax of €503 million), including restructuring charge of €202 million for the Iberia transformation plan and €343 million impairment of Iberia intangible assets
· Revenue for the year up 10.9 per cent to €18,117 million (2011: €16,339 million), including €872 million or 5.4 per cent currency impact. Passenger unit revenue for the year up 9.4 per cent, on top of volume increases of 2.8 per cent
· Fuel costs up 20.4 per cent to €6,101 million (2011: €5,068 million before exceptional items). Fuel unit costs up 16.8 per cent, or 8.4 per cent at constant currency
· Non-fuel costs before exceptional items, up 11.6 per cent at €12,039 million, including €543 million of adverse currency translation. Non-fuel unit costs up 8.5 per cent, or 3.8 per cent at constant currency
· Capital investment of €1,239 million (2011: €1,071 million) including over €400 million on pre-delivery payments for future aircraft
· Cash of €2,909 million at December 31, 2012 was down €826 million on 2011 year end (December 2011: €3,735 million). Group net debt up €741 million to €1,889 million (December 2011: €1,148 million)
Many will now question what was British Airways thinking when it merged with Iberia to form the IAG? Mergers are not always the answer.
Copyright Photo: With its continued employee strikes, lack of labor peace and a soft economy in Spain, Iberia is a bleeding airline bringing down British Airways and the IAG. Iberia’s Airbus A340-313X EC-KSE (msn 170) climbs away from the MAD hub.
US Airways‘ (Phoenix) flight attendants, represented by the Association of Flight Attendants – CWA (AFA), ratified a new contract today that provides immediate pay increases and includes support for the merger of US Airways and American Airlines. The new contract opens four-party negotiations with American’s flight attendant union and airline representatives, an initial step in reaching a combined collective bargaining agreement. Eighty percent of flight attendants voting approved the agreement, which covers the airline’s 6,800 flight attendants who are based in US Airways’ four hub cities of Phoenix, Philadelphia, Charlotte, N.C., and Washington, D.C.
Following ratification today, the new contract specifies negotiations to begin within thirty days between airline officials at US Airways and American Airlines, AFA and the union representing American Airlines flight attendants, the Association of Professional Flight Attendants (APFA). The talks would establish protocols for reaching a combined collective bargaining agreement once the merger of US Airways and American Airlines, announced on February 14, is closed. The merger is expected to close by the third quarter of this year following regulatory agency and bankruptcy court approvals.
Copyright Photo: Jay Selman. Will the US Airways logojets survive the merger with American? Probably yes since US Airways’ CEO Doug Parker will be running the new American. Doug has always honored and celebrated the legacies of the previous airlines and wisely promoted local sports teams at his hubs. There may be more logojets coming at the new AA especially those celebrating the local AA hub cities and their sports teams. Airbus A319-112 N717UW (msn 1069) in the Carolina Panthers special sports livery taxies to the runway at the Charlotte hub.
Republic Airways Holdings Inc. (Republic Airways) (Indianapolis) reported its full year 2012 net income of $51.3 million, or $1.02 per diluted share, a $203.1 million improvement from our full year 2011 results of a net loss of $151.8 million, or $3.14 per diluted share. The Company also reported fourth quarter 2012 net income of $12.6 million, or $0.25 per diluted share, a $136.1 million improvement over the fourth quarter 2011 net loss of $123.5 million, or $2.55 per diluted share.
“We’re pleased with the solid financial improvement we experienced in 2012,” said Republic Airways Holdings Chairman, President and CEO Bryan Bedford. “Our restructuring efforts in 2011 laid the foundation for Frontier to return to profitability in 2012, despite higher fuel costs. Our 50-seat RJ restructuring effort completed last October enabled us to return all of our idled aircraft to fixed-fee service with our partners and significantly reduced the financial burden associated with our Chautauqua operation.”
The Company incurred the following items in 2012:
* Loss on sale of E190s
* Gain on sale of slots
* Professional and legal fees related to restructuring
* Restructuring and fleet transition expenses
* Frequent flyer adjustment to passenger revenue
The Company incurred the following items in 2011:
* Fleet transition expenses
* Impairment of fleet asset values
* Fleet transition expenses
Note: The amounts reported below for pre-tax income (loss) and net income (loss) exclude the impact of the items listed above. Please refer to the schedules at the end of this release for a tabular reconciliation of the Company’s GAAP pre-tax and after tax income (loss) to the ex-tem pre-tax and after-tax income (loss) and diluted earnings per share.
Consolidated Results (ex-items)
Excluding the items listed above, the Company reported 2012 full year net income of $59.0 million, or $1.15 per diluted share, as compared to a 2011 full year net loss of $6.2 million, or $0.13 per diluted share. For the fourth quarter of 2012 the Company reported net income of $18.5 million, or $0.35 per diluted share, as compared to the fourth quarter 2011 net income of $20.7 million, or $0.41 per diluted share.
Business Segment Presentation
The Company has adjusted its presentation of business segments in 2012 and has revised the prior year’s information to conform to the current period segment presentation. Reportable segments now consist of Republic and Frontier. The Republic segment includes all regional flying performed by sub-100-seat aircraft operating under either fixed-fee or pro-rate agreements, subleasing activities, regional charter operations as well as the cost of any unassigned regional aircraft. The Frontier segment includes passenger service revenues and expenses for operating Frontier’s Airbus fleet, as well as its charter and cargo operations.
Republic Segment Summary (ex-items)
Revenues for the year decreased 10.2% to $1,377.4 million. This was a result of a change in the mix of flying between pro-rate and fixed-fee operations and a $48.2 million reduction in fuel-related revenue under Republic’s fixed-fee agreements. Pre-tax income improved nearly 31% to $69.5 million for the year ended December 31, 2012, compared to $53.1 million for the prior year.
For the quarter, revenues decreased 8.9%, or $31.9 million to $327.4 million, compared to the prior year’s fourth quarter, due primarily to a decrease of $23.3 million in fuel reimbursement under Republic’s fixed-fee agreements. Effective July 1, 2012, Republic no longer records fuel expense and does not recognize fuel-related pass-through revenue under any of its fixed-fee agreements. The remainder of the decrease in revenue is due to the increase of Republic’s fixed-fee operations and reduction in pro-rate flying with Frontier.
Income before taxes was $24.1 million for the quarter, compared to pre-tax income of $23.3 million for the prior year’s fourth quarter. Fuel costs for Republic were $21.8 million for the quarter, a decrease of $38.5 million from the prior year’s fourth quarter, due to both the removal of fuel expense under Republic’s fixed-fee agreement with United and a reduction in pro-rate operations with Frontier. The price per gallon increased 9.1% from $3.19 in the fourth quarter of 2011 to $3.48 in the fourth quarter of 2012.
As of December 31, 2012, Republic operated 70 aircraft with 44-50 seats and 143 aircraft with 69-80 seats to support its fixed-fee commercial agreements. Additionally, Republic operated one aircraft with 50 seats and 12 aircraft with 99 seats under pro-rate agreements with Frontier.
Frontier Airlines Segment Summary (ex-items)
Frontier Airlines’ (2nd) (Denver) revenues for the year increased 7.0% to $1,423.7 million. On a 1.1% increase in capacity, unit revenues increased 5.8% to 11.96¢ from 11.30¢. Frontier’s pre-tax income improved $92.6 million to $29.6 million of income for 2012 compared to a pre-tax loss of $63.0 million for 2011.
For the quarter, decreased 1.1% to $334.9 million, compared to $338.5 million for the same period in 2011. Total revenue per ASM (“TRASM”) was 11.88¢, an increase of 2.9% from the same quarter in 2011, while capacity on Frontier decreased 4.0% from the prior year’s fourth quarter. Load factor for the fourth quarter was 88.9%, an increase of 0.7% from the fourth quarter of 2011.
For the quarter, Frontier posted pre-tax income of $7.3 million compared to pre-tax income of $10.1 million for the prior year’s fourth quarter. Fuel costs for Frontier were $128.2 million for the quarter, a decrease of $0.8 million from the prior year’s fourth quarter. The fuel cost per gallon, including into-plane taxes and fees, increased 6.5% to $3.42 for the fourth quarter of 2012, compared to $3.21 for last year’s fourth quarter. The fourth quarter results include an expense on fuel hedges of $0.5 million, or $0.01 per gallon, while the 2011 results include a benefit of $3.5 million, or $0.09 per gallon. Frontier has approximately 15% of its anticipated fuel consumption hedged through the second quarter of 2013.
Frontier’s operating unit cost was 7.03¢ for the quarter, a 3.4% increase compared to 6.80¢ for the same quarter in 2011.
As of December 31, 2012, Frontier operated a total of 55 Airbus aircraft versus 60 Airbus aircraft as of December 31, 2011.
Recent Business Developments
During the fourth quarter of 2012, the Company completed the restructuring of its 50-seat platform, Chautauqua Airlines, Inc. (Indianapolis). As a result of the restructuring, the Company expects to realize, on average, $45.0 million of cash flow improvement per year for the next five years and has reduced its aircraft rent and depreciation expense on its 50-seat aircraft. In addition, in order to finalize the restructuring, the Company issued a $25.0 million convertible note to one of the third parties involved in the restructuring. The note bears interest at a rate of 6.0% per annum and is convertible into 2.5 million shares of Republic Airways Holdings Inc. common stock.
On January 24, 2013, the Company entered into a capacity purchase agreement (“CPA”) with American Airlines which is subject to bankruptcy court approval. American filed a motion for approval of the CPA to be heard before the court on February 14, 2013. The hearing on that motion was subsequently adjourned until February 26, 2013. On February 14, 2013, US Airways and American Airlines announced a merger agreement. On February 21, 2013, the hearing on American’s motion to approve the CPA between the Company and American was adjourned to March 12, 2013.
On February 8, 2013, the Company announced the transition of nine ERJ 145 aircraft flying on Chautauqua Airlines, Inc. from US Airways to Delta Air Lines under separate amendments. The US Airways amendment provides for termination of the current aircraft operating under the Jet Service Agreement by July 2013. The Delta amendment extends the current term for certain aircraft, as well as adds ten aircraft into service during 2013.
Balance Sheet and Liquidity
The Company’s total cash balance increased $23.6 million to $394.3 million as of December 31, 2012, compared to December 31, 2011. Restricted cash decreased $4.3 million, to $147.1 million, from December 31, 2011. The Company’s unrestricted cash balance increased $27.9 million, to $247.2 million, from December 31, 2011. A condensed cash flow statement has been provided in the tables section of this release.
The Company’s debt decreased to $2.12 billion as of December 31, 2012, compared to $2.36 billion at December 31, 2011. As of December 31, 2012, almost 90% of the total 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 6.0% discount factor, the present value of these lease obligations was approximately $1.0 billion and $1.2 billion as of December 31, 2012 and 2011, respectively.
Copyright Photo: Bruce Drum. Despite an expanding route map, Frontier’s Airbus fleet actually shrank from 60 aircraft on December 31, 2011 to 55 aircraft on December 31, 2012 as the airline began the phase out of the shorter Airbus A318s (now down to two aircraft). The higher-tail A318 cannot taxi under the Concourse A-Terminal connector at Denver International Airport. Now departed, A318-111 N801FR (msn 1939) arrives at Seattle-Tacoma International Airport from the Denver hub.
JetBlue Airways (New York) announced today that it has signed a letter of intent (LOI) with Airbus to acquire 110 ship-sets of retrofit Sharklets for the airline’s in-service A320 aircraft. Deliveries are scheduled to start in 2014. Just last week, JetBlue Airways unveiled the first of its A320 aircraft to be outfitted with Sharklets. Sharklets are newly designed wing tip devices that are expected to improve the aerodynamics of Airbus aircraft and significantly cut fuel burn and emissions by up to four percent.
Sharklets are an option for the A320 Family aircraft and offer JetBlue the option of an additional 100 nautical miles range or increased payload capability of up to 1,000 pounds. Sharklets are standard on all members of the A320neo Family. JetBlue is not only the first carrier to fly with Sharklets in North America but, with the conclusion of this agreement and the retrofitting, will have the largest A320 fleet in the world with Sharklets. JetBlue’s future Airbus deliveries also will come outfitted with Sharklets.
Bottom Copyright Photo: JetBlue was an early volunteer with Airbus for testing two early winglet concepts.
Airbus (Toulouse) has moved the first A350 XWB – msn 001 – now showing its completed wings, to its next phase of ground testing, from Roger Béteille A350 XWB FAL “Station 30” to the Clément Ader area “Station 18” in Toulouse. The aircraft is structurally complete and shows the installed winglets, belly fairing panels, main landing gear doors.
The aircraft has recently completed successfully a series of indoor ground tests including stability tests on ‘movable’ elements such as rudder, elevators, ailerons and wing spoilers and landing gears extraction/retraction. The next steps which will take place outdoors at Station 18 will include three planned families of tests: Fuel tanks testing – including levels, flows, sealing and internal fuel transfer functions; pressure testing of the fuselage; and radio equipment testing.
Copyright Photo: Airbus.
Emirates Airline (Dubai) has announced it will add a second Airbus A380 service on the Dubai – Sydney route from June 1, 2013. The second A380 will operate on the early morning service and demonstrates the airline’s commitment to New South Wales and demand for the flagship aircraft.
Currently served by a Boeing 777-300ER, deploying the Airbus A380 on Emirates’ flights EK 414 and EK 415 will see an increase in capacity of 1,890 seats per week.
Copyright Photo: Ton Jochems. Airbus A380-861 A6-EDI (msn 028) taxies at Amsterdam.
First Nation Airways (Lagos) suspended scheduled passenger operations in October 2012. It was previously operating three Airbus A320s which were returned to the lessors.
Now the carrier is planning to add two Airbus A319s (5N-FND and 5N-FNE) in order to resume operations.
Copyright Photo: Greenwing. Formerly operated by Air Inter Europe, Air France and Wind Jet, the pictured A319-113 EI-DVD (msn 647) has been painted at Dublin and is pending delivery as 5N-FND. Ironically the jetliner is inscribed with “Success is overcoming many failures” sub-titles on the rear fuselage!
AirAsia (AirAsia.com) (Malaysia) (Kuala Lumpur) and the Tata Group (Mumbai) have announced a new joint venture proposal. If approved by the Indian government the new JV would bring a new low-fare airline to India under the AirAsia brand based in Chennai.
According to this report by One India News the Indian Finance Ministry is due to take up the proposal before the Foreign Investment Promotion Board (FIPB) on March 6.
AirAsia has applied to control 49 percent in this new joint venture with Tata Sons Ltd and Arun Bhatia’s Telestra Tradeplace Pvt Ltd. If approved, this will be the return of Tata to the aviation business. State-owned Air India grew out of Tata Airlines, which began operations in 1932. Ironically Air India (Mumbai) and other Indian carriers are likely to oppose the entry of AirAsia.
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Copyright Photo: Guillaume Besnard. AirAsia’s Airbus A320-216 9M-AFQ (msn 3018) in the special ZOOM! color scheme arrives at Bangkok.
MAI-Myanmar Airways International (Yangon) will start a new route between Mandalay and Bangkok starting on March 31. The new daily service will be operated with Airbus A320s.
Copyright Photo: Ken Petersen. Airbus A320-231 XY-AGM (msn 295) prepares to land at Bangkok from Yangon.