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Tag Archives: Boeing 777

Historic Photo of the Day – May 25, 2013

Delta Air Lines Boeing 777-232 ER N864DA (msn 29736) (Soaring Spirit – Salt Lake City 2002) CDG (Christian Volpati). Image: 912048.

Copyright Photo: Christian Volpati.

Delta Air Lines: AG Slide Show

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Historic Photo of the Day – May 24, 2013

Aeroflot Russian Airlines Boeing 777-2Q8 ER VP-BAS (msn 27607) LAX (Roy Lock). Image: 912236.

Copyright Photo: Roy Lock.

Aeroflot Russian Airlines: AG Slide Show

Frameable Color Prints and Posters: AG All Photos Available

 

WSJ: Update on the American Airlines-US Airways merger

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) have circled August 31 as a target date for its possible merger approval pending any anti-trust concerns of the government. In the meantime, according to this Wall Street Journal update, 29 employee teams are currently analyzing differences between the two carriers and ways to integrate the merger process. This research will lead to a sequence of events once the approval is granted. CEO Parker and CEO Horton co-lead the transition team. The new American livery still remains an resolved issue for the possible new American.

Read the full story: CLICK HERE 

Copyright Photo: Brian Peters/AirlinersGallery.com. Boeing 777-323 ER N722AN (msn 31547) arrives at the DFW hub.

Video: What is it like to take delivery of a brand new Boeing 737-800:

American Airlines: AG Slide Show

US Airways: AG Slide Show

Air India considers selling all eight Boeing 777-200 LRs

Air India (Mumbai) is considering selling all eight of its Boeing 777-200 LRs (Longer Range) according to a report by Reuters. The airline is working with Boeing on the sale of the aircraft. The aircraft would be replaced with newer Boeing 787s.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-237 LR VT-ALD (msn 36303) climbs into the clear sky at Tokyo (Narita).

Air India: AG Slide Show

American launches Dallas/Fort Worth-Seoul (Incheon) service

American Airlines (Dallas/Fort Worth) today (May 9) launched daily nonstop service between Dallas/Fort Worth International Airport (DFW) and Incheon International Airport (ICN) in Seoul, South Korea.

The new service is operated as part of American’s joint business agreement with fellow oneworld®alliance member Japan Airlines-JAL (Tokyo).

The new route is operated with a Boeing 777-200 ER aircraft (above), featuring 16 Flagship Suite seats in First Class that transform into fully lie-flat 6-foot-6-inch beds with drop-down armrests. The aircraft will also feature inflight entertainment at every seat, including Korean movies and pop music (K-Pop), Hollywood movies (with Korean audio or subtitles), and games.

Daily DFW-ICN Service Schedule

AA 27

  • Departs DFW at 10:20 a.m. CT
  • Arrives at ICN at 2:50 p.m. KST the following day

AA 26

  • Departs ICN at 4:50 p.m. KST
  • Arrives at DFW at 4:05 p.m. CT the following day

Copyright Photo: Brian Peters. Boeing 777-223 ER N775AN (msn 29594) taxies at the large DFW hub.

American Airlines: AG Slide Show

Austrian Airlines to add a leased Boeing 777-200 ER for eight years

Austrian Airlines (Vienna) is planning to add another long-range Boeing 777-200 ER aircraft to expand its international operations. The airline issued this statement:

At its meeting yesterday, the Supervisory Board of Lufthansa approved the Austrian Airlines Group the lease of an additional Boeing 777-200 ER amounting to about EUR 33 million. Austrian Airlines Group will lease the aircraft for a period of about eight years from an internationally renowned leasing company. The aircraft will be transferred to Austrian Airlines Group in spring next year. Before it is put into operation, it will be subject to a maintenance check in Vienna and equipped with the new long-haul cabin including the new modern Economy seats, the new in-flight entertainment system and the new Business Class seats which can be converted into completely flat beds. The new Boeing 777 is scheduled to take off on its first flight in the summer of 2014.

“The expansion of the airline’s long-haul offering is an integral part of the restructuring program launched in 2012“, says Austrian Airlines Chief Executive Officer Jaan Albrecht. “The long-haul market has growth potential, particularly destinations in Asia and North America. In this way we will secure our long-term competitiveness at the Vienna flight hub.”

At present the long-haul fleet of Austrian Airlines Group consists of ten wide-bodied aircraft, of which four are Boeing 777-200 aircraft and six are Boeing 767-300s. On the basis of the new Boeing 777, the Austrian Airlines Group long-haul fleet will be expanded to eleven aircraft. The most recent expansion of the long-haul fleet took place in 2007 when one Boeing 777 with the registration OE-LPD was added. The Boeing 777 is the world’s largest twinjet and has a capacity of over 300 passengers.

The airline is also upgrading its cabins on its long-hail aircraft and issued this statement:

After passing its test flight and subsequently receiving approval from the authorities, the last Boeing 777 to feature the all-new cabin, aircraft with the registration OE-LPB has been put into revenue service. This means the conversion of the Austrian Boeing 777 fleet is now complete.

A total of 1,232 new seats have been fitted in the four Boeing 777 aircraft to have been converted, 192 in Business Class and 1,040 in Economy Class. The new cabin on the Boeing 777 offers space for a total of 308 passengers. Sophisticated seat distribution allows four out of every five Business Class passengers direct access to the aisle.

The national carrier has now converted its entire Boeing 777 fleet, and two of its Boeing 767 aircraft. Some 1.1 million customers fly long-haul with Austrian Airlines every year, on 5,500 flights.

On the financial side, the Austrian Airlines Group reported an operating loss of $73.5 million for the first quarter. The group issued this statement:

The Austrian Airlines Group continued to make progress in its restructuring program, as shown by its financial performance indicators, in spite of a difficult first quarter related to the winter season. In spite of massive cost burdens to the amount of EUR seven million related to the airline ticket tax and fuel price increases, the country’s largest domestic airline succeeded in improving its operating result by EUR 11 million, or 16.4 percent from the prior-year quarter. Accordingly, Austrian Airlines posted an operating loss of minus EUR 56 million in the first quarter of 2013 (Q1 2012: minus EUR 67 million).

“Austrian Airlines had a tough opponent in the likes of Jack Frost. Winter-related flight cancellations and expensive de-icing unnecessarily burdened our efforts to get back into the black”, says Chief Executive Officer Jaan Albrecht. “We are in a substantially better position than in the previous year, though our performance is slightly below our expectations. Nevertheless, I am optimistic that we will already achieve a turnaround this year”, he adds.

Total operating revenues declined slightly in the first quarter of 2013, down 1.3 percent to EUR 458 million (Q1 2012: EUR 464 million). Operating expenditures also fell by 3.2 percent, from EUR 531 million to EUR 514 million, an indication that the cost reduction measures have begun to take hold. On balance, the airline posted an operating loss of minus EUR 56 million in the first three months of the year. There were no one-off effects in the first quarter.

The number of passengers carried by the Austrian Airlines Group decreased by 2.7 percent to approximately 2.3 million in the period January to March 2013, which can be attributed to the streamlined fleet. As a consequence of optimized fine-tuning, capacity utilization (= passenger load factor) improved by 3.3 percentage points to 74 percent.

The number of people employed by the Austrian Airlines Group totaled 6,265 employees as at the quarterly balance sheet date of March 31, 2013 (December 31, 2012: 6,236 employees). In 2012/13, about 150 people were hired for positions as flight attendants, ground crew and pilots.

Austrian Airlines launched a comprehensive restructuring program at the beginning of 2012 designed to enhance the airline’s competitiveness and profitability. The focal point of the initiative was the successful transfer of flight operations to its subsidiary Tyrolean Airways effective July 1, 2012. This step served to bundle flight operations, which in turn enabled the elimination of redundancies in flight administration. A corresponding program is currently being implemented in 2013. The harmonization of the fleet for European flights was successfully concluded at the end of March. Eleven Boeing 737 aircraft were taken out of flight operations, whereas seven Airbus 320 aircraft were added to the fleet.

In October 2012, Austrian Airlines also launched a product campaign on its long-haul flights. All Boeing 767 and 777 aircrafts will be equipped with new, modern cabins, new Economy Class seats, new horizontal full-flat Business Class seats and a new in-flight entertainment system by September 2013. Five aircraft have already been remodeled. Investments related to the redesigning of the interiors of all the aircraft will amount to more than EUR 90 million. Moreover, as of May 17, 2013, Austrian Airlines has added the Chicago route to its destinations. As a result, the number of flight connections to North America has been increased to 26. The forecast for bookings to Chicago show capacity utilization of over 80 percent.

Copyright Photo: Stephen Tornblom. Boeing 777-2Z9 ER OE-LPC (msn 29313) lands at New York (JFK).

Austrian Airlines: AG Slide Show

Qatar Airways is coming to Philadelphia

Qatar Airways (Doha) has announced it will start a new nonstop route from Doha to Philadelphia with Boeing 777s. Qatar is expanding its relationship with American Airlines (Dallas/Fort Worth) and PHL is a future AA hub city. Philadelphia will become the carrier’s fifth U.S. destination and service will commence on March 1, 2014. Charlotte and Miami are likely to see future Qatar service.

Additionally the flag carrier will add a new route to Addis Ababa, Ethiopia on September 18 followed by Clark International Airport (near Manila) starting on October 28.

Copyright Photo: Brian McDonough. A beautiful banking shot of Boeing 777-2DZ LR A7-BBC (msn 36015) at Washington (Dulles).

Qatar Airways: AG Slide Show

Reuters: Boeing to offer the longest range airliner with the proposed 777-8X and a 400-seat 777-9X

Boeing logo

Boeing (Chicago) according to Reuters, is offering a new 777-8X model that would have a range of 9,500 nautical miles. The 777-8X is a proposed replacement for the current 777-200LR (Longer Range).

A 400 seat version, dubbed the 777-9X, is being offered to prospective airlines as a competitor to Airbus’ A350-1000.

Both models are being refined with input from the prospective airlines. The biggest customers will come from the Gulf region where range is important.

Read the full report: CLICK HERE

Air Canada and Etihad Airways to code-share

Air Canada (Montreal) and Etihad Airways (Abu Dhabi) have signed a Memorandum of Understanding (MoU) for a commercial cooperation agreement that will enhance travel services between the United Arab Emirates and Canada.

While the two carriers currently have interline agreements in place for passenger and cargo services, Etihad Airways and Air Canada intend to offer customers through-checked bags, reciprocal codeshare services and frequent flyer benefits.

The MoU provides for reciprocal codeshare services to Etihad’s Abu Dhabi hub and select points in North America served by Air Canada via its Toronto hub.  The two parties have commenced discussions to finalize details with the objective of introducing codeshare services in the third quarter of 2013.

The agreement will also allow frequent flyer mileage accrual on codeshare flights by members of Etihad Guest and Aeroplan programs and reciprocal premium lounge access at Toronto and Abu Dhabi airports for eligible passengers of both airlines.

This announcement follows the recent decision by the Governments of the UAE and Canada to restore the previous visa regime which means Canadian nationals can once again obtain a free visa on arrival in the UAE.

The UAE is Canada’s largest merchandise export market in the Middle East region and more than 40,000 Canadians reside in the UAE. Furthermore approximately 150 Canadian companies are based in the UAE.

Subject to regulatory approval, Etihad Airways will place its EY code on Air Canada flights between Toronto and select North American points.

In return, Air Canada will place its AC code on Etihad Airways’ non-stop services between Toronto and Abu Dhabi, as well as Etihad Airways’ flights between London Heathrow and Abu Dhabi.

Etihad Airways and Air Canada will also work together to enhance cargo services into and out of Abu Dhabi and Toronto, and beyond on each other’s networks.

Top Copyright Photo: TMK Photography/AirlinersGallery.com. Embraer ERJ 190-100 nIGW C-FHJU (msn 19000044) arrives at the Toronto (Pearson) hub.

Air Canada: AG Slide Show

Etihad Airways: AG Slide Show

Bottom Copyright Photo: Keith Burton. Boeing 777-3FX ER A6-ETK (msn 39686) takes off from London (Heathrow).

FedEx renews its contract with the United States Postal Service

FedEx Corporation (Memphis) has announced that its FedEx Express (Memphis) subsidiary has entered into a new express air transportation contract with the United States Postal Service. The current contract ends in September 2013, and the new contract will begin in October 2013.

Under this seven-year agreement, valued at approximately $10.5 billion, FedEx Express will provide airport-to-airport transportation of USPS Express Mail and Priority Mail within the United States.

Copyright Photo: Nick Dean/AirlinersGallery.com. Boeing 777-FS2 N884FD (msn 37137) gracefully climbs away from the Boeing factory at Paine Field near Everett, Washington.

FedEx Express: AG Slide Show

Air Canada reports a first quarter net loss of approximately C$260 million

Air Canada (Montreal) today provided preliminary results for the first quarter of 2013:

  • Adjusted net loss of approximately $143 million versus an adjusted net loss of $162 million in the first quarter of 2012
  • Net loss of approximately $260 million versus a net loss of $274 million in the first quarter of 2012
  • Operating loss of approximately $106 million versus an operating loss of $91 million in the first quarter of 2012
  • EBITDAR (earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent) of approximately $145 million versus $174 million in the first quarter of 2012

In the first quarter of 2013, Air Canada’s financial results were negatively impacted by an estimated $10 million due to flight cancellations caused by severe weather conditions and operational challenges at the airline’s major Canadian airport hubs, as well as aircraft deicing service delays at Toronto Pearson International Airport.   A higher proportion of leisure passengers versus business passengers, in part due to a shift of the Easter holiday, and an unfavourable foreign currency impact on passenger revenues also contributed to the lower operating results year-over-year.  In addition, Air Canada expects to record an impairment charge of $24 million related to Airbus A340-300 aircraft (none of which are operated by Air Canada) which is reflected in Air Canada’s preliminary operating loss and net loss results.

Air Canada estimates that its passenger revenue per available seat mile (“RASM”) in the first quarter of 2013, on a system-wide basis, increased by approximately 1.1 per cent as compared to the first quarter of 2012, due to passenger load factor improvements partly offset by lower yields. Air Canada also estimates that, in the first quarter of 2013, its adjusted cost per available seat mile (“adjusted CASM”), which excludes fuel expense, the cost of ground packages at Air Canada Vacations and unusual items (such as impairment charges) increased approximately 1.4 per cent compared to the first quarter of 2012, a more favourable outcome than the range of the 3 to 4 per cent increase previously projected in its February 7, 2013 news release. The result was better than forecasted due largely to Air Canada having recorded favourable accrual adjustments of $15 million which had not been previously projected, and to timing of certain maintenance events.

Adjusted net debt is estimated to be $3,987 million at March 31, 2013, a decrease of $246 million from March 31, 2012, with cash and short-term investments estimated to represent 17 per cent of 12-month trailing operating revenues at the end of the first quarter of 2013.

Air Canada’s system capacity, as measured by available seat miles (“ASMs”), in the first quarter of 2013 was 1.1 per cent lower than the first quarter of 2012, within the range of the 0 to 1.5 per cent decrease previously projected in its February 7, 2013 news release.

All figures reported above with respect to the first quarter of 2013 are preliminary, have not been reviewed by Air Canada’s auditors and are subject to change as Air Canada’s first quarter 2013 financial results are finalized.  The outlook and preliminary estimates provided in this news release constitute forward-looking statements within the meaning of applicable securities laws, are based on a number of assumptions and are subject to a number of risks and uncertainties.

Air Canada continues to expect full year 2013 system ASM capacity to increase in the range of 1.5 to 2.5 per cent when compared to the full year 2012.  Air Canada also continues to expect its full year 2013 domestic capacity to increase in the range of 0.5 to 1.5 per cent from the full year 2012.  Taking into account the better than expected adjusted CASM result in the first quarter of 2013, Air Canada now expects its full year 2013 adjusted CASM to decrease in the range of 0.5 to 1.5 per cent from the full year 2012 (as opposed to the 0 to 1.0 per cent decrease projected in Air Canada’s February 7, 2013 news release).

Air Canada’s above-mentioned outlook assumes Canadian GDP growth of 1.25 to 1.75 per cent for 2013.  In addition, Air Canada expects that the Canadian dollar will trade, on average, at C$1.02 per U.S. dollar for the full year 2013 and that the price of jet fuel will average 86 cents per litre for the full year 2013.

Copyright Photo: Ole Simon. Boeing 777-333 ER C-FITL (msn 35256) climbs away from Frankfurt.

Air Canada: AG Slide Show

AMR reports a net profit of $8 million in the 1Q (excluding reorganization costs) and a GAAP net loss of $341 million

AMR Corporation (Dallas/Fort Worth) today reported its financial results for the first quarter. The holding company of American Airlines (Dallas/Fort Worth) and American Eagle Airlines (Dallas/Fort Worth) issued this statement:

In the first quarter, AMR reported a net profit of $8 million, excluding reorganization and special items, a $256 million improvement compared to the prior-year period. AMR incurred a GAAP net loss of $341 million versus a GAAP net loss of $1.7 billion in the first quarter of 2012.  First quarter results were negatively impacted by $349 million of reorganization and special items, which are detailed below.

Restructuring Progress

AMR is on track to realize savings targeted in the restructuring process. To date, AMR has completed the majority of its financial restructuring, including reducing debt, renegotiating aircraft leases and facilities agreements, grounding older aircraft, rationalizing the regional fleet, renegotiating supplier relationships, and making a number of other important changes.

“The fundamental changes we have been able to achieve in streamlining our cost structure and making our operations more efficient are yielding substantial results,” said Bella Goren, AMR’s chief financial officer. “Building on the substantial progress that is evident in our results, we are continuing to implement initiatives that create greater value for our financial stakeholders, employees and customers.”

Year-over-year cost reductions in salary, benefit and non-operating expenses were driven by AMR’s restructuring efforts. Through the restructuring process, American reached six-year agreements with all workgroups and reduced management positions, making American’s management staffing the leanest among network carriers.

AMR also realized improvements in depreciation and amortization expense, offset by increased aircraft rent expense with the company taking delivery of a combined 36 new modern, fuel efficient Boeing 737-800 and 777-300ER aircraft over the past 12 months, all of which have been leased. American is in the midst of significant renewal and transformation of its fleet and expects to take delivery of 59 new mainline aircraft during 2013.

Throughout the remainder of the year, AMR expects to realize additional savings improvements as the company gains court approval to implement new terms negotiated with certain vendors and suppliers. It also plans to build on momentum from restructuring by implementing new scope clauses established in new labor agreements that will enable AMR to compete more effectively in certain markets by better matching aircraft size with demand as American begins operating larger regional jets and expands codeshare agreements.

Revenue Performance

For the first quarter of 2013, AMR reported consolidated revenue of $6.1 billion, approximately 1.0 percent higher compared to the prior-year period on 1.3 percent less capacity. First quarter consolidated and mainline passenger revenue per available seat mile (PRASM) increased 2.6 percent and 2.7 percent year-over-year, respectively.  Consolidated revenue performance was driven by record passenger yield, or average fares paid, of 16.27 cents per mile, a 0.6 percent year-over-year improvement, and strong consolidated and mainline load factors, or percentage of seats filled, of 79.9 percent and 80.6 percent, respectively.

Domestic PRASM improved 2.7 percent in the first quarter versus the first quarter of 2012, with PRASM increases across all five of American’s hubs, with the Los Angeles and Chicago hubs showing particular strength. International PRASM increased 2.6 percent in the first quarter of 2013 over the prior-year period, driven by strong performance in the Atlantic entity. Absolute PRASM and yields in the Latin entity remain robust and further American’s belief that targeted growth in the region will be accretive to earnings.

Other revenues in the first quarter increased 1.2 percent compared to the prior period, driven primarily by an increase in AAdvantage® miles sold to partners and by growth in American Eagle’s ground-handling business performed for third parties.

“We achieved a quarterly yield that was the highest in company history for any quarter, and an all-time first quarter record in revenue,” said Virasb Vahidi, American’s chief commercial officer. “As we look to the second quarter, we remain focused on delivering for our customers through new products and services, the renewal of our fleet and greater access to more destinations across our growing global network.”

Operating Expense

For the first quarter, AMR’s consolidated operating expenses decreased $80 million, or 1.3 percent, versus the same period in 2012. Excluding special items, AMR’s consolidated operating expenses decreased $142 million, or 2.3 percent, year-over-year.  American’s mainline cost per available seat mile (unit cost) in the first quarter decreased 0.6 percent, including special items in both periods, and 1.7 percent versus the same period last year, excluding special items. Taking into account the impact of fuel hedging, AMR paid $3.26 per gallon for jet fuel in the first quarter of 2013 versus $3.24 per gallon in the first quarter of 2012, a 0.7 percent increase. As a result, the company paid $14 million more for fuel in the first quarter of 2013 than it would have paid at prevailing prices from the prior-year period.

Excluding fuel and special items, mainline and consolidated unit costs in the first quarter of 2013 decreased 4.1 percent and 3.2 percent year-over-year, respectively, primarily driven by the company’s restructuring efforts. Despite lower capacity, this was the second consecutive quarter of non-fuel unit cost reduction. In addition, AMR achieved an operating profit of $125 million and an operating margin of approximately 2.0 percent, an improvement of approximately $203 million and 3.3 points, respectively, over the prior-year period, excluding special items.

An unaudited summary of first quarter 2013 results, including reconciliations of non-GAAP to GAAP financial measures, is available in the tables at the back of this press release.

Cash Position

AMR ended the first quarter with approximately $5.1 billion in cash and short-term investments, including a restricted cash balance of $853 million, compared to a balance of approximately $5.6 billion in cash and short-term investments, including a restricted balance of approximately $771 million, at the end of the first quarter of 2012.

Operational Performance

American ran a strong operation in the first quarter, achieving an on-time arrival rate of 80.8 percent. In the month of March, 81.8 percent of American’s mainline flights arrived on time, American’s best March performance since 2003. American’s solid operational results for the quarter also include posting a completion factor of 98.4 percent.

Other First Quarter Highlights

  • In January, American Airlines became the first and only U.S. airline to introduce the Boeing 777-300ER (Extended Range) aircraft – the new flagship of American’s fleet. The company now has five 777-300ER aircraft in service, operating between New York Kennedy and both London Heathrow and Sao Paulo, and between Dallas/Fort Worth and London Heathrow.
  • LATAM Airlines Group announced it will join oneworld®, and American filed applications with regulators for codeshare agreements with TAM and LAN Colombia. Pending approval, this will strengthen American’s existing service to Latin America by offering customers greater travel options and convenience.
  • American and Finnair announced Finnair’s intent to join the transatlantic joint business American shares with British Airways and Iberia, providing our North American and European customers more choices and better connections across the Atlantic.
  • American signed agreements with oneworld member-elect Qatar Airways, based in Doha, Qatar, and the newest oneworld member, Malaysia Airlines, to codeshare on each other’s flights, which will provide new growth opportunities for American in the Middle East and Southeast Asia, as well as for our new partners in the United States.
  • American and Alaska Airlines announced an expanded codeshare agreement
  • American filed an application with the U.S. Department of Transportation for the right to fly additional frequencies from its Los Angeles and Chicago hubs to Brazil, beginning in 2013 and 2014, respectively.
  • American completed its private offering of two tranches of enhanced equipment trust certificates (EETC) in the amount of $664.4 million. This marked the first EETC financing in history for an airline in restructuring.

Pending Merger Transaction

On Feb. 14, AMR and US Airways Group, Inc. (Phoenix) announced that the boards of directors of both companies unanimously approved a definitive merger agreement under which the companies will combine to create one of the world’s largest global airlines, which will have an implied combined equity value of approximately $11 billion based on the price of US Airways stock as of Feb. 13, 2013. The merger will offer benefits to both airlines’ customers, communities, employees, investors and creditors. Among other things, the combined company is expected to:

  • Benefit customers due to an expanded global network and investment in new aircraft, technology, products and services
  • Enhance the oneworld alliance, offering a seamless global network
  • Improve loyalty benefits for both airlines’ members by expanding opportunities to earn and redeem miles
  • Provide a path to improved compensation and benefits with greater long-term opportunities for employees of both companies
  • Enhance recoveries for financial stakeholders – AMR stakeholders to own 72 percent and US Airways shareholders to own 28 percent of the combined company’s diluted common stock
  • Build upon the iconic, globally recognized American Airlines brand
  • Be headquartered in Dallas/Fort Worth, with a significant operational presence in Phoenix

American’s proposed Plan of Reorganization provides the potential for full recovery for American’s creditors and a recovery of at least 3.5 percent of the aggregate diluted common stock of the combined airline for the company’s shareholders. It is unusual in Chapter 11 cases – and unprecedented in recent airline restructurings – for shareholders to receive meaningful recoveries.

Merger Milestones

The following merger milestones have been achieved to date:

  • Jan. 31: Filed the required notification materials under the Hart-Scott-Rodino Act (HSR) with the U.S. Department of Justice and U.S. Federal Trade Commission
  • Feb. 14: Announced the definitive merger agreement between AMR and US Airways
  • Feb. 25: AMR and US Airways announced that Beverly Goulet, senior vice president and chief integration officer for American Airlines, and Scott Kirby, president of US Airways, will jointly lead a transition-planning team to design and oversee the new American integration
  • March 21: AMR and US Airways announced the creation of the Integration Management Office (IMO) to support the transition team and the selection of McKinsey & Company to advise the IMO
  • March 28: AMR received court approval to merge with US Airways
  • April 15: AMR filed its Chapter 11 Plan of Reorganization, Disclosure Statement and Registration Statement; a hearing to consider approval of the Disclosure Statement is scheduled for June 4

The merger is conditioned on the approval by the Court, regulatory approvals, approval by US Airways shareholders, other customary closing conditions, and confirmation and consummation of the Plan of Reorganization in accordance with the provisions of the Bankruptcy Code. The combination is expected to be completed in the third quarter of 2013. Prior to closing of the transaction, the transition-planning team composed of leaders from both companies will develop an integration plan designed to assure a smooth and sustainable transition with a focus on maximizing the potential value of the merger.

Reorganization and Special Items

AMR’s first quarter 2013 results include the impact of $349 million in reorganization and special items.

  • Of that amount, AMR recognized a $160 million loss in reorganization items resulting from certain of its direct and indirect U.S. subsidiaries’ voluntary petitions for reorganization under Chapter 11 on Nov. 29, 2011. These items primarily result from an adjustment to previously recorded estimated allowed claim amounts for certain special facility revenue bonds, as well as for professional fees.
  • The company recognized interest charges of $116 million to recognize post-petition interest expense on unsecured obligations which is to be allowed pursuant to the company’s Plan of Reorganization filed on April 15.
  • The company’s operating expenses for the first quarter also include special charges and merger-related expenses of $28 million, and a $45 million charge to benefits expense due to an increase in workers’ compensation claims in recent months, as well as adverse developments on older claims.

Capacity Guidance

AMR estimates consolidated capacity in the second quarter of 2013 to be up approximately 1.0 percent versus the second quarter of 2012. For the full year 2013, consolidated capacity is estimated to increase approximately 1.5 percent versus the prior year.

American continues to make progress in implementing Main Cabin Extra, removing certain seats to provide customers with more leg room in the Main Cabin. To date, American has completed the retrofit of its Boeing 757 and 767 fleets and more than 90 percent of its 737 fleet.  The retrofit of the MD-80 fleet commenced in January 2013, and to date, Main Cabin Extra has been added to approximately two-thirds of the MD-80 fleet with completion targeted for the second quarter of this year.

Copyright Photo: Brian Peters. Boeing 777-323 ER N718AN (msn 41665) climbs gracefully into the sky from the Dallas/Fort Worth main hub.

American Airlines: AG Slide Show

American has a day it would like to forget

American Airlines (Dallas/Fort Worth) yesterday was a day that did not fit the image that the company would like to project as an airline that is being reborn after emerging from Chapter 11. American was forced to ground all of its flights yesterday (April 16) for several hours after a nationwide problem with its computer systems. Over 400 flights were cancelled. The company apologized to its customers and slowly returned to normal operations later in the day.

Read the full report from the New York Times: CLICK HERE

Copyright Photo: Brian McDonough. Boeing 777-223 ER N759AN (msn 32638) in the old 1968 livery with the special “Susan G. Komen for the Cure” markings arrives at Miami.

American Airlines: AG Slide Show

Emirates is coming to Stockholm

Emirates Airline (Dubai) has announced that it will begin operating a daily flight to Stockholm, Sweden from September 4, 2013.

The new route will be operated with Boeing 777-300 ER aircraft. The daily service will offer three cabin classes with eight seats in First Class, 42 seats in Business Class and 304 seats in Economy Class.

The new daily flight to Stockholm will depart Dubai as flight EK 157 at 0715 and arrive at Stockholm Arlanda Airport at 1200 the same day. The return flight, EK 158 will depart at 1355 and arrive at Dubai International Airport at 2225.

Emirates’ launch of Stockholm service will follow the launch of Tokyo Haneda service on June 3 . Closely following the launch of Stockholm in September, Emirates will launch a daily flight to Clark in the Philippines (near Manila) on October 1.

Copyright Photo: Nik French. Boeing 777-31H ER A6-EGO (msn 35598) with the special “1000th 777″ departs from Manchester.

Emirates: AG Slide Show

Emirates to enter the trans-Atlantic battle

Emirates Airline (Dubai) will launch a direct nonstop service between Milan (Malpensa) and New York (JFK), the airline’s only trans-Atlantic service, from October 1, 2013.

In addition to the existing passenger market between Milan and New York, Emirates has timed its flight schedule to ensure maximum connectivity for other key feeder markets. Customers looking to fly on the airline’s award-winning product will be able to seamlessly connect from points all over the U.S., including the West Coast, taking advantage of Emirates’ partnership with JetBlue, and across Europe, maximizing the airline’s frequent flyer partnership with easyJet.

“Operating a trans-Atlantic route has been on our agenda for some time. Having carefully monitored traffic flows we have identified strong demand for both a direct connection and, importantly, for the Emirates product.  The route is currently underserved, particularly with a strong premium product offering this is where we see a clear opening for Emirates. We intend to capitalize on this opportunity, stimulating further demand and encouraging additional traffic flow in both directions,” said Tim Clark, President Emirates.

Operated by a Boeing 777-300 ER, the flight will be an extension of one of Emirates’ existing three daily, Dubai to Milan flights. The service will originate in Dubai with passengers then able to enjoy a stopover in Milan en-route to New York. On the return flight, passengers will have the option of stopping in Milan before continuing on to Dubai.  This one-stop service has proved popular on other Emirates’ routes, giving passengers the opportunity to experience a new destination or to break their journey on longer trips.

Copyright Photo: Paul Denton. Boeing 777-31H ER A6-ENA (msn 41082) arrives back at the Dubai base.

Emirates: AG Slide Show

JAL celebrates 30 Years of the Tokyo Disney Resort with a new “JAL Happiness Express” logojet

JAL-Japan Airlines (Tokyo) on March 29 introduced this 30th Anniversary logojet to help celebrate the success of the Tokyo Disney Resort. Boeing 777-246 JA8985 (msn 27652) at Tokyo (Haneda) is the first JAL aircraft to wear the special Disney livery. The titles proclaim Year 30 is The Happiness Year. JA8985 is named the “JAL Happiness Express”.

JAL will add five more Disney aircraft including one additional 777-200 domestic and four 737-800 domestic aircraft.

According to Wipipedia, The resort opened on April 15, 1983, as a single theme park (Tokyo Disneyland), but developed into a resort with two theme parks, three Disney hotels, six non-Disney hotels, and a shopping complex. Tokyo Disneyland was the first Disney theme park opened outside of the United States.

JAL Toyko Disney Resort 30 Logo

Copyright Photo: Shige Sakaki.

JAL-Japan Airlines: AG Slide Show

Austrian Airlines to concentrate all Tyrolean Airways administration functions in Vienna, 100 jobs to be cut

Austrian Airlines (Vienna) is making further changes at its lower-cost Tyrolean Airways (Innsubruck) subsidiary. All Austrian Airlines aircraft, except one aircraft, are now operated by Tyrolean in the Austrian brand since July 1, 2012. Boeing 777-2Z9 OE-LPB was kept on the Austrian certificate to maintain Austrian as an operating airline.

All Tyrolean aircraft maintenance and the call center functions will remain in Innsbruck. However all administrative functions will now be centered in Vienna. All crew operations and traffic control will also be concentrated in Vienna. This will result in the loss of 100 positions.

Austrian expects to turn to profitability this year.

Read the full report (in German): CLICK HERE

Copyright Photo: Michael B. Ing. The only true Austrian Airlines-operated aircraft, this former Lauda Air Boeing 777-2Z9 ER OE-LPB (msn 28699), arrives at Bangkok.

Austrian Airlines: AG Slide Show

 

Japan Airlines considers ordering 20 Airbus A350s

Japan Airlines-JAL (Tokyo) has been a loyal Boeing customer. However the recent problems with the much-delayed Boeing 787 may have soured that relationship. According to Nikkei, the company is now considering an order from rival Airbus for 20 Airbus A350s and it will make a decision in June. However this may also be a ploy to get better terms and compensation from Boeing for the 787 delays. JAL is considering replacing its current Boeing 777-300 ERs with the new Airbus A350-100s for its European routes.

Read the full report from the Chicago Tribune: CLICK HERE

Copyright Photo: Akira Uekawa. Boeing 777-346 JA8941 (msn 28393) approaches the Tokyo (Haneda) hub for landing.

JAL-Japan Airlines: AG Slide Show

TNT Express to cut 4,000 jobs and will focus on Europe

TNT Express (Hoofddorp), the parent of TNT Airways (Liege), announced today an extensive reorganization plan to go it alone after its takeover by UPS was rejected by the European Commission. The downsizing will result in a loss of 4,000 jobs as it will now concentrate on serving mainly its European routes. The struggling company needs to save approximately $286 million by 2015.

Read the analysis by Reuters: CLICK HERE

Read the official statement by the company: CLICK HERE

Copyright Photo: Ole Simon. Some of the long-range aircraft are likely to be dropped from the fleet with this downsizing. Operated by Southern Air for TNT Airways, Boeing 777-FHT N778SA (msn 39286) prepares to touch down at Dubai International Airport.

TNT: AG Slide Show

American bankruptcy trustee questions the $19.9 severance package for CEO Tom Horton

American Airlines (Dallas/Fort Worth) is facing a new round of questioning in the bankruptcy court to further explain the large $19.9 million severance package afforded to departing CEO Tom Horton. According to this report by Reuters, Trustee Tracy Hope Davis is asking the carrier to explain the large settlement  and  also the “sweeping changes” to its employee pay programs under the Chapter 11 bankruptcy reorganization.

Read the full report: CLICK HERE

Top Copyright Photo: Brian Peters. Boeing 777-323 ER N717AN (msn 31543) arrives at the large Dallas-Fort Worth International Airport hub.

American Airlines: AG Slide Show

Bottom Copyright Photo: American Airlines. Outgoing AA CEO Tom Horton.

American Airlines CEO Tom Horton (LR)

JetBlue announces a new code-share agreement with Qatar Airways

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.

JetBlue Airways: AG Slide Show

Qatar Airways: AG Slide Show

Bottom Copyright Photo: Brian McDonough. Qatar Airways’ Boeing 777-3DZ ER A7-BAB (msn 36103) arrives at Washington (Dulles).

Qatar Airways wants to be the second largest cargo airline in the world

Qatar Airways (Doha) is one of the fastest-growing passenger airlines in the world. This year the flag carrier will move into a new and larger Doha International Airport currently under construction. According to this report by The National, Qatar Airways also wants to be the second largest cargo airline in the world.

Read the full report: CLICK HERE

Copyright Photo: Michael Stappen. Boeing 777-FDZ A7-BFB (msn 36100) lands at Amsterdam.

Qatar Airways: AG Slide Show

Atlas Air Worldwide dry-leasing subsidiary Titan Aviation acquires a Boeing 777 Freighter

Atlas Air Worldwide Holdings, Inc. (New York) today announced the acquisition of a Boeing 777 Freighter by its dry-leasing subsidiary, Titan Aviation. The aircraft is currently on long-term lease to AeroLogic GmbH (Leipzig), a cargo airline based in Germany and a joint venture of DHL Express and Lufthansa Cargo AG.

“With the purchase of this 777 freighter, we gain entry into an attractive aircraft type consistent with our strategy of investing in new technology that creates superior value for our customers,” said William J. Flynn, President and Chief Executive Officer, Atlas Air Worldwide.

“This deal represents an important part of our plan to grow Titan’s dry-leasing platform through selective investments in aircraft with existing leases that support leading operators in the airfreight industry. While Titan is principally a cargo aircraft dry lessor, its portfolio includes passenger narrow-body aircraft, engines and related equipment. It also provides customers expertise in asset management, passenger-to-freighter conversion, and other technical services.”

Norddeutsche Landesbank Girozentrale (NORD/LB), a leading aircraft financier based in Hanover, Germany, provided financing for the 2010 vintage aircraft.

AeroLogic GmbH was founded in September 2007 with headquarters in Schkeuditz/Leipzig, Germany. The AeroLogic fleet is composed of eight Boeing 777Fs.

Copyright Photo: Nick Dean. AeroLogic’s Boeing 777-FZN D-AALC (msn 36003) is pictured at Everett (Paine Field) prior to its handover.

AeroLogic: AG Slide Show

TAM to join the Oneworld Alliance

LATAM Airlines Group (LAN Airlines and TAM Linhas Aereas) (Santiago) today confirmed its selection of oneworld® as the global alliance for all its passenger airlines.

The decision, announced at a meeting of the oneworld Governing Board held in Hong Kong today, means:
  • Brazil’s TAM Airlines will leave the Star Alliance to join oneworld, along with its Paraguay subsidiary.  Their transition is expected to be completed during 2014’s second quarter.
  • LAN Colombia, the latest part of LAN, will join oneworld as an affiliate member, in the fourth quarter of 2013.
With Chile’s LAN Airlines flying as a full member of oneworld since June 2000 and LAN Argentina, LAN Ecuador and LAN Peru added since as affiliate members, today’s announcement will bring all of Latin America’s top airline group into the same global airline alliance, alongside 11 of the other leading carriers from around the world and 30 of their affiliates.
An exact date for TAM’s departure from the Star Alliance will be announced in due course.  The intention is for it to become part of oneworld immediately after it exits Star.
Copyright Photo: Keith Burton. TAM Brasil’s (TAM Linhas Aereas) Boeing 777-32W ER PT-MUE (msn 38886) arrives at London (Heathrow).
LAN: AG Slide Show
TAM: AG Slide Show

SAS and Thai expand their code-share relationship

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.

Scandinavian Airlines: AG Slide Show

Thai: AG Slide Show

Bottom Copyright Photo: Michael B. Ing. Thai’s Boeing 777-3D7 ER HS-TKA (msn 29150) climbs away from the Bangkok hub.

American Airlines and US Airways receive a DOJ request for additional information for its proposed merger

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc. (Dallas/Fort Worth), and US Airways Group, Inc. (the parent of US Airways) (Phoenix) announced that, on March 4, 2013, each company received a request for additional information (Second Request) from the U.S. Department of Justice (DOJ) in connection with the proposed merger of the two airlines.

A DOJ Second Request is a standard part of the regulatory process. A Second Request extends the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, during which the parties may not close the transaction, until 30 days after American Airlines and US Airways have substantially complied with the Second Request (or the waiting period is otherwise terminated by the DOJ). American Airlines and US Airways expect to respond promptly to the Second Request and to continue working cooperatively with the DOJ as it conducts its review of the proposed combination.  American Airlines and US Airways continue to expect the combination to be completed in the third quarter of 2013.

The merger is conditioned on the approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, approval by US Airways shareholders, other customary closing conditions, and confirmation and consummation of the Plan of Reorganization.

Copyright Photo: Wingnut. American Airlines’ Boeing 777-323 ER N717AN (msn 31543) in the new look made its first appearance at London (Heathrow) yesterday.

AMERICAN AIRLINES AIRCRAFT TAILS

American Airlines: AG Slide Show

US Airways: AG Slide Show

American signs a new sale-lease back agreement with ILFC for Boeing aircraft including 15 737-800s and one 777-300 ER

American Airlines (Dallas/Fort Worth) and International Lease Finance Corporation (ILFC) announced today both companies have entered into an agreement for the purchase and leaseback of an additional 15 new Boeing 737-800 and one new 777-300 ER aircraft.

The Boeing 737 aircraft are scheduled for delivery between May 2013 and December 2014. The Boeing 777 widebody aircraft is forecasted to be delivered in the second half of March 2013. ILFC and American had entered into a previous sale-leaseback agreement for 15 Boeing 737-800 Next Generation aircraft in 2011. The final delivery of those aircraft was completed in 2012 and they are operating today.

Copyright Photo: Terry Wade. The pictured Boeing 777-323 ER N717AN (msn 31543) on its final approach at London (Heathrow) was delivered on December 11, 2012 becoming the first of the type for AA.

American Airlines: AG Slide Show

ALC orders 10 new Boeing 777-300 ERs, places two with Air New Zealand

Boeing (Chicago) and Air Lease Corporation (ALC) announced an order today for 10 777-300 ERs (extended range) airplanes. The order, valued at $3.2 billion at current list prices, adds to the growing portfolio of long-haul airplanes for the Los Angeles-based leasing company.

ALC has ordered 185 airplanes from Boeing including 78 Next-Generation 737s, 80 737 MAXs, 12 787 Dreamliners and 15 777-300ERs. The leasing company also has reconfirmation rights on 20 additional 737 MAX airplanes.

In other news, Air Lease Corporation announced long term lease agreements today with Air New Zealand (Auckland) for two new Boeing 777-300 ER aircraft delivering in 2014.

Copyright Photo: Keith Burton. Air New Zealand’s Boeing 777-319 ER ZK-OKO (msn 38407) arrives at London (Heathrow).

Air New Zealand: AG Slide Show

Boeing delivers the first 777 built at the increased rate

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Boeing (Chicago) has delivered the first 777 built at the increased production rate of 8.3 per month, or 100 airplanes per year. The airplane, a 777 Freighter, was delivered to Korean Air (Seoul).

In the past 32 months, the 777 program has increased its production rate twice. The rate went from five to seven per month in 2011, and now to the all-time high of 8.3 per month.

1,072 777s have been delivered through the end of January and a total of 1,431 have been ordered from 66 customers around the globe.

Copyright Photo: Boeing. Boeing 777-FB5 HL8226 (msn 37640) was handed over to the carrier on February 25.

Korean Air: AG Slide Show

Air France-KLM trims its loss in 2012

Air France (Paris) and KLM Royal Dutch Airlines (Amsterdam) reported a net loss of $1.56 billion for 2012.

Read the full report from the group: CLICK HERE

Read the analysis by the New York Times: CLICK HERE

Copyright Photo: Michael B. Ing. Boeing 777-328 ER F-GSQK (msn 32845) approaches the runway at Los Angeles.

Air France: AG Slide Show

KLM: AG Slide Show

Emirates is coming to Clark International Airport in the Philippines

Emirates Airline (Dubai) announced it will begin daily, non-stop flights to Clark International Airport, the airline’s second destination in the Philippines starting on October 1.

Emirates has been operating flights to Manila, the capital of the Philippines, since 1990 and, due to the demand, has continued to increase its flight frequency on the route to its current triple daily, nonstop service.

Clark International Airport is located in the province of Pampanga in Central Luzon, which is 80 kilometres to the north of Manila. Its strategic location means it has a catchment area of 17 million people.

The new route will be operated with two-class Boeing 777-300 ER aircraft. Flight EK 338 will depart Dubai at 0400 and arrive at Clark International Airport at 1640. The return flight, EK 339 will depart at 1835 and arrive at Dubai International Airport at 2305.

A government study estimated that there are 10 million Filipinos living outside the Philippines – about 10% of the country’s home population. The largest number of overseas Filipinos reside mainly in the United States. The region with the largest temporary overseas Filipino population is the Middle East with approximately 2.9 million Filipinos, with 680,000 living in the UAE.

Central Luzon is one of the leading growth regions in the Philippines and is host to the country’s premier economic zones – the Clark Freeport Zone and the Subic Bay Freeport Zone.

Copyright Photo: Paul Denton. Boeing 777-31H ER A6-EGW (msn 35601) approaches Dubai International Airport for landing.

Emirates: AG Slide Show

TAAG Angola Airlines to acquire three more Boeing 777-300 ERs

TAAG Angola Airlines (TAAG Linhas Aereas de Angola) (Luanda) currently operates three Boeing 777-200s and two 777-300 ERs. The company has three additional 777-300 ERs on order which will be delivered in May 2014, December 2015 and March 2016 according to this report by Macau Hub. The airline also holds options for three more.

Read the full report: CLICK HERE

Copyright Photo: Pedro Baptista/Flyingphotos. TAAG’s Boeing 777-3M2 ER D2-TEG (msn 40805) climbs away gracefully from Lisbon bound for Luanda.

TAAG logo

TAAG: AG Slide Show

Aeroflot gets permission to operate the new Boeing 777-300 ER

Aeroflot Russian Airlines (Moscow) finally got the permission for its new long-haul Boeing 777-30 0ER aircraft and immediately puts the new type into revenue service. The airline received the long awaited green light from the Russian aviation authorities on February 4, 2013.

The new type had been planned to be introduced on the Moscow-Bangkok route on February 1, 2013.

Copyright Photo: Joe G. Walker. The pictured Boeing 777=3M0 ER VP-BGB (msn 41679) at Paine Field in Everett is the first of the type for Aeroflot.

Aeroflot: AG Slide Show

 

Emirates sees a new Boeing 777X version to be available in 6-9 months

Emirates Airline (Dubai) expects a new version of the very successful Boeing 777 to be available to airline customers in six to nine months according to this report by Reuters. Emirates has stated it needs will need to replace its older 777s from 2017.

Currently Emirates operates a total of 122 Triple Sevens, including 777-200s, 777-200 ERs, 777-200 LRs, 777-300s, 777-300 ERs and 777F freighters.

Read the full report: CLICK HERE

Copyright Photo: Paul Denton. Sleek Boeing 777-31H ER A6-EGX (msn 35602) arrives back at the Dubai hub.

Emirates: AG Slide Show

Air Canada to add five additional Boeing 777-300 ERs, is profitable for the 4Q and 2012

Air Canada (Montreal) has announced it will introduce a new International Premium Economy cabin for customers seeking enhanced comfort and service on international flights as it continues to modernize its widebody fleet with the addition of five new Boeing 777-300 ER aircraft.

Complementing its Economy and Executive First options on international flights, Air Canada’s new Premium Economy cabin will offer customers a wide range of benefits including a dedicated cabin featuring larger seats that are wider, providing more recline, with seven more inches of legroom than Economy and are never more than one seat from the aisle (due to a 2-4-2 configuration).  Customers will also be offered premium meals with complimentary bar service and priority check-in and baggage delivery at the airport. More information on Air Canada’s new Premium Economy cabin is available at www.aircanada.com/premiumeconomy.

Air Canada’s Premium Economy cabin will be introduced on Air Canada’s Montreal-Paris flights effective July 11 , 2013.  Additional routes offering Premium Economy will be added over time as new aircraft enter the carrier’s mainline fleet.

Air Canada will expand and modernize its international widebody fleet with the addition of five new Boeing 777-300 ER aircraft. In addition to two Boeing 777-300 ER aircraft previously announced that will be delivered in June and August 2013 , Air Canada today announced that it will add three new Boeing 777-300 ER aircraft to be delivered in November and December 2013 and February 2014.  With the addition of these five aircraft, Air Canada’s Boeing 777 fleet will consist of 23 aircraft comprising the latest generation of 300 ER and 200 LR models.

Air Canada’s five new Boeing 777-300 ER aircraft will be the first aircraft configured with the carrier’s new Premium Economy cabin prior to the arrival of Boeing 787 aircraft scheduled to begin delivery in 2014.  The five Boeing 777-300 ER aircraft will also offer a larger Economy cabin as Air Canada will strategically deploy these aircraft on select international markets with high volume demand for economy travel.

The five Boeing 777-300 ER aircraft that will begin delivery in June 2013 will be configured with a larger Economy cabin with 398 new “slimline” leather seats providing 31-inch legroom consistent with the comfort of Air Canada’s current Economy cabin, while the dedicated Premium Economy cabin of 24 leather seats will provide 38-inch legroom along with other enhanced comfort features.  Air Canada’s Executive First cabin will offer 36 seats that convert into 180-degree lie-flat beds in a staggered configuration of one or two, to allow customers traveling alone or with a companion to choose their preferred seating and sleeping options.  Customers in all three cabins of service will enjoy an enhanced individual seat back in-flight entertainment system with hundreds of hours of complimentary audio visual entertainment options featuring larger screens and customer-friendly technology by Panasonic.

In addition to the introduction of Premium Economy, new seats and a leading edge entertainment system, Air Canada’s five new Boeing 777-300 ER aircraft will provide customers with a refreshed interior colour palette in modern, neutral tones unique to these aircraft pending the official launch of Air Canada’s future in-flight product and cabin design that will be made in conjunction with the introduction of Boeing 787 aircraft into its fleet.

Air Canada’s 37 Boeing 787 aircraft will feature a brand new, enhanced version of Air Canada’s award-winning Executive First lie-flat beds and product that has yet to be announced, in addition to Premium Economy and Economy options.  The Boeing 787 fleet will be deployed on the carrier’s current and future high premium demand international routes.

On the financial side, Air Canada reported full year and fourth quarter earnings before interest, taxes, depreciation, amortization and impairment, and aircraft rent (“EBITDAR”) of $1.451 billion (or $1.327 billion before the impact of benefit plan amendments) compared to EBITDAR of $1.242 billion in 2011.  Including the favourable impact of benefit plan amendments, EBITDAR of $1.451 billion increased $209 million year-over-year (or $85 million before the impact of benefit plan amendments).  On a GAAP basis, in 2012, net income was $131 million or $0.45 per diluted share compared to a net loss of $249 million or $0.92 per diluted share in 2011.  On an adjusted basis, net income was $53 million or $0.19 per diluted share compared to a net loss of $122 million or $0.44 per diluted share in 2011.

For the fourth quarter of 2012, Air Canada reported EBITDAR of $284 million compared to EBITDAR of $162 million in the fourth quarter of 2011, an improvement of $122 million.  On a GAAP basis, in the fourth quarter of 2012, Air Canada reported net income of $8 million or $0.03 per diluted share compared to a net loss of $60 million or $0.22 per diluted share in the fourth quarter of 2011.  Air Canada reported an adjusted net loss of $6 million or $0.02 per diluted share compared to an adjusted net loss of $167 million or $0.60 per diluted share in the same quarter in 2011.

Copyright Photo: Antony J. Best. Boeing 777-333 ER C-FIUW (msn 35249) completes its final approach into London (Heathrow).

Air Canada: AG Slide Show

 

Kuwait Airways to be privatized, will add 20-21 new aircraft in the next two years

Kuwait Airways (Kuwait City) is going to be privatized by the state of Kuwait. According to the Kuwait Times, the National Assembly has approved an Amiri decree to convert Kuwait Airways Corporation (KAC) into a shareholding company. The newly-reorganized Kuwait Airways intends to purchase 20 or 21 new aircraft within the next two years according to the report.

Kuwait Airways fleet now comprises three Airbus A320-200s, three A310-300s, five A300-600s, four A340-300s and two Boeing Boeing 777-200s (17 aircraft total).

Read the full story: CLICK HERE

Copyright Photo: Keith Burton. With the privatization and the fleet renewal, Kuwait Airways is very likely to develop a new brand this year. Boeing 777-269 ER 9K-AOB (msn 28744) prepares to land at London (Heathrow).

Kuwait Airways: AG Slide Show

Garuda Indonesia to launch nonstop Jakarta-London Gatwick flights in late 2013

Garuda Indonesia logo

Garuda Indonesia (Jakarta) has announced it will launch nonstop Boeing 777-300 ER flights from Jakarta to London (Gatwick) starting in the fourth quarter of this year. The flag carrier has 10 copies of the new type on order with the first due in June 2013.

Garuda Indonesia: AG Slide Show

American Airlines asks the bankruptcy court for more time to reorganize

American Airlines (Dallas/Fort Worth) and its unsecured creditors committee according to this Reuters report have asked the U.S. Bankruptcy Court “to extend the period during which creditors cannot pursue their own restructuring plans for the airline to April 15. That replaced a January request to extend the time to April 1.”

Read the full report: CLICK HERE

Meanwhile American continues its merger discussions with US Airways.

Copyright Photo: Rodrigo Cozzato. As reported yesterday, brand new Boeing 777-323 ER N718AN (msn 41665) completed its first revenue flight from Dallas/Fort Worth to Sao Paulo (Guarulhos). The first arrival yesterday at Sao Paulo is captured in this historic photo. N718AN also displays the new 2013 color scheme and new brand for the company.

Hot New Photos: AG Hot New Photos

American Airlines: AG Slide Show

American Airlines 2013 logo

American Airlines becomes the first U.S. airline to put the Boeing 777-300 ER into revenue service

American 777-300 N718AN (13)(Grd) DFW (JRL)(LRW)

American Airlines (Dallas/Fort Worth) last night became the first U.S. airline to put into revenue service the new Boeing 777-300 ER (Extended Range). The new type was introduced last night on the Dallas/Fort Worth -Sao Paulo (Guarulhos) as flight AA 963 arriving this morning. The company now has three of the type: N717AN was handed over December 11, 2012, followed by N718AN on December 19 and N719AN on January 28, 2013. The first two are now in service.

The airline commented:

“Two new Boeing 777-300 ER aircraft will bring you a world-class travel experience like no other. Customers traveling between Dallas/Fort Worth and Sao Paulo will be the first to experience the newest addition to our fleet. And, from January 31 through February 28, 2013, we will operate both of our 777-300 ER aircraft for a total of six round-trip flights per week. Customers flying between both Dallas/Fort Worth and New York JFK and London Heathrow will be the next to fly on the new aircraft. Want to be sure you’re flying on our brand new plane? While purchasing your ticket, just make sure that “77W” is listed as the aircraft type for your selected flight.

From new cabin interiors and updated amenities, to more inflight entertainment options and seat comfort in every cabin – the new aircraft will offer you a new, state-of-the-art travel experience.

We aim to bring you a total of 14 777-300 ERs as part of our plans to take delivery of more new aircraft than any other U.S. carrier by the end of the decade.”

New Boeing 777-300 ER routes per Airline Route:

New York (JFK) – London (Heathrow) starts March 30

Dallas/Fort Worth – London (Heathrow) starts April 2

New York (JFK) – Sao Paulo starts April 11

Los Angeles – London (Heathrow) starts June 12

Copyright Photo: Josh Rawlin. Boeing 777-323 ER N718AN (msn 41665) is pulled briefly out of the hangar at the Dallas/Fort Worth base before being put into revenue service.

American Airlines: AG Slide Show

Video of the painting:

Aeroflot delays the introduction of its first new Boeing 777-300 ER to Bangkok

Aeroflot Russian Airlines (Moscow) is ready to be a Boeing 777 operator again (it previously operated the 777-200). However the Russian flag carrier has delayed the introduction of its first new Boeing 777-300 ER on the Moscow-Bangkok route. The pictured 777-3M0 ER VP-BGB (msn 41679) was handed over to the carrier on January 30. Aeroflot is blaming the delay on the delay of Interstate Aviation Committee (IAC) to certify the new type in Russia. The airline issued the following statement:

“On January 30, 2013, after completing all the necessary formalities Aeroflot took delivery of new Boeing 777-300 ER at Seattle manufacturing plant.

According to the statement of the Federal Air Transport Agency of Russia to the mass media, Aeroflot will not get the permission of the Russian aviation authority to start the commercial exploitation of the plane, because until now the Interstate Aviation Committee (IAC) has not certified Boeing 777-300 ER type aircraft.

Due to this situation Aeroflot has to postpone the launch of the first commercial flight of this aircraft on Moscow-Bangkok route initially planned for February 1, 2013.

Instead of flying on Boeing 777-300 ER Aeroflot will provide services to this destination on Boeing 767-300 and Airbus A330.  The passengers on Moscow-Bangkok route, who bought tickets for new Comfort class will be provided with business class tickets.

In order to start the exploitation of the airliner from the mentioned date, Aeroflot has timely completed all the necessary formalities stipulated by the Russian legislation, and therefore the air company will take measures to compensate the caused losses.”

Copyright Photo: Joe G. Walker. VP-BGB is pictured at a wet Everett (Paine Field) prior to the hand over. VP-BGB is seen getting ready to depart on a test flight. The wide-body airliner is named “M. Kutuzov”. According to Wikipedia, “Mikhail Illarionovich Golenishchev-Kutuzov (1745-1813) was a Field Marshal of the Russian Empire. He served as one of the finest military officers and diplomats of Russia under the reign of three Romanov Tsars: Catherine II, Paul I and Alexander I. His military career was closely associated with the rising period of Russia from the end of the 18th century to the beginning of the 19th century. Kutuzov contributed much to the military history of Russia and is considered to have been one of the best Russian generals under the reign of Catherine II.”

Aeroflot Russian Airlines: AG Slide Show

Emirates is coming to Tokyo Haneda on June 3

Emirates Airline (Dubai) will launch daily nonstop flights between Dubai and Tokyo International Airport (Haneda Airport) on June 3, 2013.

Haneda Airport is located in Ota-ku, Tokyo and handles the majority of domestic flights to and from Tokyo; it opened its doors to international carriers following the opening of the fourth runway and the international terminal in October 2010.

Haneda will become Emirates’ 131st destination, is currently ranked as the second busiest airport in Asia.

The new route will be operated by a three-class Boeing 777-200 LR (Longer Range) aircraft. Flight EK 312 will depart Dubai at 0935 and arrive at Haneda Airport at 0001 the following day. The return flight, EK 313 will depart at 0130 and arrive at Dubai International Airport at 0705.

Copyright Photo: Andi Hiltl. Boeing 777-21H LR A6-EWJ (msn 35590) climbs away from Zurich.

Emirates: AG Slide Show

Air China to introduce the Boeing 777-300 ER on the Beijing-New York JFK route on March 31, will launch Chengdu-Frankfurt flights on May 19

Air China (Beijing) on March 31, 2013 will upgrade its aircraft to the Boeing 777-300 ER (see above) and increase its frequency from 7 to 11 per week for its nonstop New York (JFK)-Beijing flights.

Air China is the only airline with nonstop service between New York and Beijing.  It is also the only airline with first class cabin between these two cities.  Current daily flights between New York and Beijing are CA 982 and CA 981.

The additional outbound flight, CA 990, departs from John F. Kennedy International Airport (JFK) on Monday, Wednesday, Friday and Sunday at 2:50 AM, arriving in Beijing Capital International Airport (PEK) at 2:20 PM local time the next day.  Inbound, CA 989 leaves Beijing at 9:00 AM also on Monday, Wednesday, Friday and Sunday, arriving in New York at 10:20 AM local time on the same day.

According to the airline, the “Triple Seven” has a wider cabin than any competing aircraft.  It is designed for maximum passenger comfort and convenience.  Air China’s Forbidden Pavilion (first class) features eight luxury suites, 41 full-flat bed seats in the Capital Pavilion (business class) and 259 economy seats with individual monitors and in-seat audio-video on demand (AVOD).

Designed for maximum passenger comfort, the interior of Air China’s Boeing 777-300 ER feature ten mood lighting variations in the Forbidden and Capital Pavilions, each timed to complement the different  phases of a flight—from boarding through meal service, sleeping and pre-arrival.  The ambient lighting recreates the sunset, night and sunrise to reflect the various services associated with each phase and create a totally relaxing environment.

Today’s announcement follows last week’s approval granted to Air China by the U.S. Department of Transportation to start four weekly nonstop services between Houston and Beijing on July 11, 2013 using the Boeing 777-300 ER. Houston is Air China’s fifth gateway in North America in addition to New York, Los Angeles, San Francisco and Vancouver.  The Los Angeles-Beijing service, operated with the Boeing 777-300ER, will resume its double daily flights on March 31, 2013.  Vancouver-Beijing is scheduled to increase from 7 to 11 flights per week on May 17, 2013.  A bigger Boeing 747-400 full passenger aircraft will be used for the San Francisco-Beijing daily operation beginning on March 31, 2013.

In other news, Air China will commence nonstop Chengdu-Frankfurt service on May 19, 2013.

Chengdu, the capital of a province widely known as China’s breadbasket, is a southwestern Chinese city with huge growth potential. Recent years have seen a continuous uptick in the number of outbound travelers from Chengdu and other southwestern neighboring cities like Lhasa, Kunming and Xi’an who leave China via Chengdu. Currently, passengers who travel between Chengdu and other southwestern regions and Germany have to transfer in Beijing, Shanghai or Hong Kong, and the whole journey takes at least 15 hours. The opening of the new Chengdu-Frankfurt nonstop service will make Chengdu the third Mainland China city with direct air links to Frankfurt. The whole flight takes just 10 hours, which represents a significant cut in travel time. This faster service will be another driver of the fast growth in tourism and economy of southwestern China.

The three-times weekly service, CA431/432, will be operated with an Airbus A330-200 (see below) on Tuesday, Friday and Sunday. The flight time is approximately 10 hours. The flight leaves Chengdu at 01:30 and arrives in Frankfurt at 06:10 on the same day. The return flight is expected to take off from Frankfurt at 14:00 and arrive at Chengdu Shuangliu International Airport at 05:40 the next day.

Top Copyright Photo: Yuji Wang. Boeing 777-39L ER B-2035 (msn 38674) in the “Smiling China” special livery climbs away from Shanghai (Hongqiao).

Air China: AG Slide Show

Bottom Copyright Photo: Michael B. Ing. Airbus A330-243 B-6117 (msn 903) completes its approach back at the Beijing hub.

Emirates welcomes the interim approval of its new partnership with QANTAS Airways

Emirates Airline (Dubai) has welcomed the Australian Competition and Consumer Commission’s (ACCCs) decision to grant interim authorisation for the proposed Emirates and QANTAS Airways (Sydney) partnership.

The partnership still remains subject to final authorization from the ACCC, a decision on which is expected in March.

Copyright Photo: Keith Burton. Boeing 777-31H ER A6-ECE (msn 35575) of Emirates arrives at London (Heathrow).

Emirates: AG Slide Show

QANTAS Airways: AG Slide Show

AMR Corporation reports a 4Q 2012 net profit of $262 million, a $1.4 billion improvement over 4Q 2011 and a $1.9 billion loss for 2012

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc. (Dallas/Fort Worth), today reported results for the fourth quarter and year ended December 31, 2012. Key points include:

  • Revenue of $24.9 billion in 2012, the highest in company history
  • Full-year operating profit of $494 million, excluding special items, a $749 million improvement over 2011
  • Full-year net loss of $1.9 billion.  Excluding reorganization and special items, the full-year net loss was $130 million, a $932 million improvement over 2011
  • American took delivery of 11 new aircraft in the fourth quarter (nine 737-800s and two 777-300ERs) and 30 new aircraft during the full year (28 737-800s and two 777-300ERs), putting the airline on track to have the youngest, most fuel-efficient fleet among U.S. network carriers by 2017

“We have made enormous progress towards building the new American,” said Tom Horton, AMR’s Chairman and CEO. “It is remarkable what the American team has been able to accomplish, including generating record revenue and a return to an operating profit for the year while restructuring every aspect of our company. I want to thank all of our people for their dedication, hard work and commitment to serving our customers during this time. Our momentum is growing toward emerging as a strong, healthy and vibrant competitor. In fact, with what we have accomplished, we expect to show strong results beginning in the first quarter of 2013.”

In the fourth quarter, AMR reported a net profit of $262 million compared to a net loss of $1.1 billion in the fourth quarter of 2011. AMR’s fourth quarter results include $350 million of net positive reorganization and special items, which are detailed below.

Excluding reorganization and special items, the net loss in the fourth quarter of 2012 was $88 million, a $121 million improvement from the prior year. The fourth quarter of 2012 was negatively impacted by Hurricane Sandy and the early November snow storm in the Northeast and, separately, by the residual headwind on fourth quarter bookings from the operational disruptions experienced in late September and early October. The cumulative impact from these events is estimated to have reduced net profits by $142 million.

For full-year 2012, American recorded a net loss of $1.9 billion, compared to 2011′s full-year net loss of $2.0 billion. AMR’s full year 2012 results include $1.7 billion of net negative reorganization and special items, which are detailed below.

Excluding reorganization and special items, the net loss for 2012 was $130 million, a $932 million improvement over 2011. The company’s operating profit, excluding special items, of $494 million for 2012 was a $749 million improvement over last year.

Restructuring Progress

During the last year, AMR has completed the majority of its financial restructuring, including reducing debt, renegotiating aircraft leases and facilities agreements, grounding older airplanes, rationalizing the regional fleet, and renegotiating supplier relationships. AMR expects these actions to continue to increasingly improve its cost structure in 2013, as the company approaches its targeted restructuring related savings by the end of 2013.

In 2012:

  • American achieved labor cost reductions of 17 percent across all workgroups, including management, independent employees and unionized workgroups, all of which ratified agreements for six-year terms. Progress was also made at American Eagle, which achieved costs savings and reached agreements with its unionized workgroups
  • American made changes to its organizational structure to reduce management positions, making American’s management workgroup the leanest among the network carriers
  • Renegotiated the financing terms for more than 400 mainline and regional aircraft, which includes completing its financial contracts on its 216 Embraer aircraft. Improved terms on these aircraft significantly lower AMR’s aircraft ownership related costs, while also harmonizing its aircraft retirement and new aircraft delivery schedules
  • Negotiated more than 95 percent of American’s 725 facility leases
  • Evaluated and/or renegotiated over 9,000 vendor/supplier agreements – American’s suppliers have made significant contributions to its strategic plan for success, allowing AMR to meet its savings objectives as outlined in its business plan
  • Realized over $400 million in restructuring related savings in the fourth quarter, primarily from renegotiated aircraft leases, reductions to management and support staff positions, freezing the pension plans for all workgroups, and sun-setting the retiree medical program for active employees

“Throughout 2012, we have executed on all aspects of our business plan – streamlining our organizational structure, increasing unit revenues, reducing unit costs, and restructuring our balance sheet,” said Bella Goren, AMR’s Chief Financial Officer. “The strong financial foundation we are building gives us the ability to deliver returns to our financial stakeholders and make investments that create enhanced value for our customers and our people.”

Revenue Performance

For the fourth quarter of 2012, the company reported consolidated revenue of $5.9 billion, 0.3 percent lower compared to the prior year. The combined effects of Hurricane Sandy, the November snow storm in the Northeast, and the booking headwind from the earlier operational disruption, negatively impacted revenue by an estimated $155 million in the fourth quarter.

Fourth quarter consolidated passenger revenue per available seat mile (PRASM) was comparable to the same period last year, and mainline PRASM decreased by 0.4 percent. Absent the same factors that impacted revenues – described above – American estimates that PRASM would have been approximately 2.0 percentage points higher than the fourth quarter of 2011.

For full-year 2012, AMR reported record consolidated revenue of $24.9 billion, up 3.7 percent compared to 2011, on 1.0 percent less capacity. For 2012, AMR’s consolidated and mainline PRASM rose 5.8 percent and 5.6 percent year-over-year, respectively. Consolidated revenue performance was driven by a 4.6 percent year-over-year improvement in yield, or average fares paid, and record high consolidated and mainline load factors, or percentage of seats filled, of 82.2 percent and 82.8 percent, respectively. Domestic PRASM improved 5.5 percent in full-year 2012 versus full-year 2011, with PRASM increases across all five of American’s hubs.

International PRASM increased 5.7 percent in 2012 over the prior year, driven by improved yield performance across all entities and increased load factors. “We are making tremendous progress strengthening American’s global network by focusing the flying from our hubs to the most important domestic and international cities with the highest concentration of business travelers,” said Virasb Vahidi, American’s Chief Commercial Officer. “We are enhancing relationships with the best international alliance partners and creating a pipeline of industry-leading products and services, including a significant renewal and transformation of our fleet that will drive revenue performance in the coming years.”

American’s 2012 revenue improvement is a result of solid execution on its network, alliances, and product strategy. The recent revenue progress does not yet account for the benefits expected from initiatives accomplished in the restructuring.

Operating Expense

For the fourth quarter, AMR’s consolidated operating expenses, excluding special items, decreased $139 million, or 2.3 percent, versus the same period in 2011. American’s mainline cost per available seat mile (unit cost) in the fourth quarter decreased 3.3 percent versus the same period last year, excluding special items in both periods. Taking into account the impact of fuel hedging, AMR paid $3.22 per gallon for jet fuel in the fourth quarter versus $3.01 a gallon in the fourth quarter of 2011, a 6.6 percent increase. As a result, the company paid $135 million more for fuel in the fourth quarter of 2012 than it would have paid at prevailing prices from the prior-year period.

Excluding fuel and special items, mainline and consolidated unit costs in the fourth quarter of 2012 decreased 8.9 percent and 7.6 percent year-over-year, respectively, primarily driven by American’s restructuring efforts. “The significant improvement in the fourth quarter in non-fuel unit cost underscores the results we have been able to achieve in our restructuring efforts and the competitive cost structure we have put in place for the future,” said Bella Goren, AMR’s Chief Financial Officer.

Since many of the restructuring savings were implemented near the end of the year, AMR’s full year 2012 consolidated operating expenses, excluding special items, were up 0.3 percent, or $84 million, year-over-year. They also reflect a negative impact of $514 million due to higher fuel prices in 2012.  American’s 2012 mainline unit costs, excluding special items, increased 1.5 percent versus the prior year. Excluding fuel and special items, mainline unit costs decreased 0.9 percent for the same period.

An unaudited summary of full-year 2012 results is available in the tables at the back of this press release.

Cash Position

AMR ended the fourth quarter with approximately $4.7 billion in cash and short-term investments, including a restricted cash balance of $850 million, compared to a balance of approximately $4.7 billion in cash and short-term investments, including a restricted balance of approximately $738 million, at the end of the fourth quarter of 2011.

2012 Notable Accomplishments

American has made significant progress in its plan to transform the airline into an industry leader. While the restructuring process is allowing the company to achieve a competitive cost structure and strengthen its balance sheet, American also showed improvement across all aspects of its business. Key accomplishments in 2012 include:

Financial:

  • The largest annual revenue in company history
  • Unit revenue growth that outpaced the industry average in 2012 – driven by strong customer demand for American’s product. Mainline and consolidated PRASM, passenger yield and load factor in 2012 were all records for any year in AMR’s history
  • Full-year 2012 operating profit, excluding special items, of $494 million, a $749 million improvement over 2011

Fleet Renewal and Transformation:

American made substantial progress on its fleet renewal plans and is on pace to have the youngest fleet in the industry in the next five years.

  • In the fourth quarter, the size of American’s fleet of 737-800s surpassed that of its MD-80s.  737-800s offer a 35 percent reduction in fuel cost per seat versus the MD-80
  • American became the first U.S. airline to take delivery of the Boeing 777-300ER, giving the airline’s fleet additional network flexibility, while delivering a state of the art customer experience, and better operating economics
  • American has 59 new mainline aircraft slated for delivery in 2013 and is in the midst of a significant renewal and transformation of its fleet

Customer Experience Enhancements:

American has taken many steps to provide an exceptional customer experience throughout the entire travel journey.

  • Announced a redesigned interior of its international widebody aircraft, including 777-200ERs and 767-300ERs
  • Will be the first domestic carrier to offer three-class service and fully lie-flat First and Business Class seats on transcontinental flights
  • Installing Main Cabin Extra to give customers more leg room in the Coach cabin
  • Introduced new travel options and a brand new booking path on AA.com offering customers more choices to book competitive, round-trip fares, as well as select new combinations of products and services customers value most

Network and Alliances Strategy:

American bolstered its network and alliances by expanding service from its hubs to the domestic and international cities most desirable to high value customers and by enhancing existing and forging new strategic partnerships.

  • International Expansion – American announced new routes and expansion into new international markets that have strong growth prospects, including:
    • Manaus and Sao Paulo, Brazil; Roatan, Honduras; Asuncion, Paraguay; Puebla, Mexico; Bogotá, Colombia
    • Dusseldorf, Germany and Dublin, Ireland
    • Seoul, South Korea
  • Joint Businesses – The continuing maturation of American’s joint business agreements with IAG, parent of British Airways and Iberia, over the Atlantic, and Japan Airlines over the Pacific, were instrumental in driving unit revenue improvements of 5.9 percent and 9.6 percent over the Atlantic and Pacific in 2012, respectively
  • Codeshare – American expanded its long-standing partnership with LATAM Airlines group by embarking on codeshare agreements with TAM and LAN Colombia
  • oneworld® - New member airberlin and members-elect Malaysia and Qatar Airways will bolster American’s network

Reorganization and Special Items:

AMR’s fourth quarter 2012 results include $350 million of net positive reorganization and special items.

  • Of that amount, AMR recognized a $569 million non-cash income tax benefit from continuing operations during the fourth quarter of 2012 related to gains in Other Comprehensive Income
  • The company recognized a $441 million loss in reorganization items resulting from certain of its direct and indirect U.S. subsidiaries’ voluntary petitions for reorganization under Chapter 11 on November 29, 2011. These items primarily result from estimated claims associated with restructuring the financing arrangements for certain debt, aircraft leases, as well as professional fees
  • The company recognized $58 million in special charges, primarily associated with personnel related restructuring costs
  • The fourth quarter results also include a $280 million benefit from settlement of a commercial dispute

AMR’s full year 2012 results include $1.7 billion of net negative reorganization and special items.

  • Of that amount, the company recognized a $2.2 billion loss in reorganization items resulting from certain of its direct and indirect U.S. subsidiaries’ voluntary petitions for reorganization under Chapter 11 on November 29, 2011. These items are primarily from estimated claims associated with restructuring the financing arrangements for certain debt, aircraft leases, and rejecting certain special facility revenue bonds, as well as professional fees
  • The company recognized $387 million in special charges, primarily associated with personnel related restructuring costs
  • As described above, in the fourth quarter, the company recognized a $569 million non-cash income tax benefit from continuing operations, and a $280 million benefit from a settlement of a commercial dispute

Capacity Guidance

AMR estimates consolidated capacity in the first quarter of 2013 to be down 1.7 percent versus the first quarter of 2012.

Factors contributing to this estimated reduction in capacity include the absence of Leap Day in 2013, and progress American has made in implementing its Main Cabin Extra program removing seats from the coach cabin. To date, American has completed the retrofit of its Boeing 757 and 767 fleets, has completed approximately half of its 737 fleet, and will commence the retrofit of the MD-80 fleet in January 2013 with completion targeted for the second quarter.

As previously reported, American experienced an unusually high number of pilot retirements in the fall of 2011 that resulted in capacity reductions for the period November 2011 to February 2012.

Absent the impact of the capacity reductions in January and February of 2012 due to pilot retirements, consolidated capacity in the first quarter of 2013 is estimated to be down 3.4 percent year-over-year.

First Quarter Unit Costs Guidance

AMR will continue to realize restructuring related savings and estimates that in the first quarter of 2013, unit costs will improve year-over-year, despite a capacity headwind due to consolidated capacity decreasing by 1.7 percent and lapping some restructuring related savings that impacted the first quarter of last year.

Copyright Photo: Bruce Drum. The new stretched Boeing 777-300 ER aircraft are being delivered in a non-logo gray scheme pending the unveiling of a new livery. The first new Triple Seven is due to go into revenue service on January 31. Is a pending merger announcement with US Airways holding up the unveiling of the new look? Classic Boeing 777-223 ER N785AN (msn 3005) taxies at the Miami hub in the old 1968 livery.

American Airlines: AG Slide Show

 

UPS to drop its bid to acquire TNT Express due to expected EC disapproval

United Parcel Service Inc (UPS) (UPS Airlines) (Atlanta and Louisville) will drop its bid to acquire TNT Express N.V. (Hoofddorp) because it now expects the European Commission (EC) to deny the acquisition.

On March 19, 2012, UPS announced its intention to acquire TNT Express for $6.7 billion. On September 5, 2012, UPS announced it expected to close the deal in early 2013 subject to EC approval.

UPS will pay TNT a termination fee in the amount of EUR 200 million.

TNT Airways (Liege) is a subsidiary of TNT Express. TNT is now expected to remain independent.

UPS issued the following statement:

United Parcel Service, Inc. announced today (January 14) the European Commission (EC) has informed UPS and TNT Express that it is working on a decision to prohibit the proposed acquisition of TNT Express.

UPS submitted an initial remedies proposal on November 29, 2012 and subsequently revised the proposal twice. UPS began the competitive review process with the EC in March 2012.

Scott Davis, UPS Chairman and CEO said, “We are extremely disappointed with the EC’s position. We proposed significant and tangible remedies designed to address the EC’s concerns with the transaction. The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular.”

Upon prohibition by the EC, the Offer Condition relating to EU Competition Clearance will not be fulfilled and UPS will pay TNT a termination fee in the amount of EUR 200 million and will withdraw the Offer.

Further announcements will be made once the European Commission has issued its formal decision. The decision is expected to be adopted formally in the coming weeks.

Top Copyright Photo: Michael B. Ing. Boeing 747-44AF N572UP (msn 35669) climbs away from Anchorage International Airport (ANC).

UPS: AG Slide Show

TNT: AG Slide Show

Bottom Copyright Photo: Rainer Bexten. Southern Air’s Boeing 777-FHT N778SA (msn 39286) arrives at the Liege, Belgium sorting facility.

Philippines to fly to Toronto starting on November 30

Philippines (Philippines Airlines) (Manila) has announced it will add Toronto (Pearson) and the nonstop Manila-Toronto route on November 30. The return routing will stop at Vancouver.

Copyright Photo: Nick Dean. Boeing 777-36N ER RP-C7777 (msn 37709) is pictured at the Everett (Paine Field) factory.

Philippines: AG Slide Show

EgyptAir to launch a new route to Manchester in June

EgyptAir (Cairo) is planning to start two new routes from Cairo in June 2013 per Airline Route. Cairo-Manchester will start on June 1 and will operate five days a week with Boeing 737-800s.

Service to Toronto will be via a code-share with Air Canada via London Heathrow (correcting our previous report).

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing. Boeing 777-36N ER SU-GDL (msn 38284) climbs away briskly from Tokyo (Narita).

EgyptAir: AG Slide Show

British Airways to fly to Chengdu, China

British Airways (London) has announced a new route to Chengdu in China, just weeks after starting services to Seoul in South Korea.

British Airways will be the only UK carrier to offer a direct service between Chengdu Shuangliu International Airport and London Heathrow.

The thrice-weekly service will start on September 22, 2013. The route will be served by a four-cabin Boeing 777 with First, Club World (business class), World Traveller Plus (premium economy) and World Traveller (economy).

In other news, British Airways is equipping its 3,600 pilots with iPads to further improve customer service and operational efficiency levels.

According to the carrier, “the move, which follows the airline’s rollout of iPads across its cabin crew and ground operations teams, is part of the company’s £5 billion investment in new products and technology to provide the best possible flying experience for British Airways’ customers.”

By having access to additional real-time operational data, shared with ground colleagues, pilots will be able to plan the flight more efficiently using the most accurate information available pre-departure.

This means our flight crew can provide customers with faster and more accurate flight information than ever before. With the latest operational updates customers will be better informed and able to make plans if their flight time has changed for any reason.

Pilots will also be able to use historic and current data, supplied by the customer, to provide an even more personalized service during the flight.

Copyright Photo: Brian McDonough. Boeing 777-236 ER G-YMMP (msn 30315) arrives at Washington (Dulles).

British Airways: AG Slide Show

China Airlines to lease four new Boeing 777-300 ERs from GECAS, orders six from Boeing

GE Capital Aviation Services Limited (GECAS), the commercial aircraft leasing and financing arm of GE, announced today it will lease four new Boeing 777-300 ERs to China Airlines (Taipei). This is a new aircraft type for CAL.

GECAS logo

The first aircraft is scheduled for delivery in 2014 to modernize the airline’s long-haul wide-body fleet. All four leased aircraft come from GECAS’ existing order book with Boeing.

In addition, on December 21, Boeing and China Airlines announced an order for six 777-300 ERs (Extended Range) airplanes. The order is valued at approximately $2 billion at list prices.

Taiwan’s flag carrier is in the midst of renewing its long-haul fleet and plans to operate the new 777-300 ERs on new trans-Pacific flights between North America and Asia.

In November 2011, GECAS announced it will lease four new Airbus A330-300 aircraft to China Airlines. Delivery of the first two aircraft from GECAS’ existing order book with Airbus was in October and December 2012.

In addition to the four A330-300s and four 777-300 ERs scheduled for delivery in the next three years, GECAS currently leases eight Embraer ERJ 190s to Mandarin Airlines (Taipei), a subsidiary of China Airlines.

Founded in 1959, China Airlines is a full-service flag carrier of Taiwan, operating a fleet of 72 regional and international aircraft to over 112 destinations in 28 countries across Asia and to Oceania, Europe and the U.S.

Copyright Photo: Stephen Tornblom. The new Triple Sevens will partially replace the older Boeing 747-400s. Boeing 747-409 N168CL (msn 29906) taxies across the apron at New York’s JFK International Airport.

China Airlines: AG Slide Show

FedEx’s 2Q net income slips to $438 million, down 12% from last year’s $497 million, orders four Boeing 767-300 freighters

FedEx Corporation (FedEx Express) (Memphis) today reported earnings of $1.39 per diluted share for the second quarter ended November 30, compared to $1.57 per share last year. Superstorm Sandy impacted the quarter’s results by $0.11 per diluted share due to reduced shipment volumes and incremental operating costs.

Second Quarter Results:

FedEx Corp. reported the following consolidated results for the second quarter:

• Revenue of $11.1 billion, up 5% from $10.6 billion the previous year

• Operating income of $718 million, down 8% from $780 million last year

• Operating margin of 6.5%, down from 7.4% the previous year

• Net income of $438 million, down 12% from last year’s $497 million

The results of the quarter also reflect, primarily at FedEx Express, the net year-over-year negative impact from the timing lag that exists between when fuel prices change and indexed fuel surcharges automatically adjust.

FedEx Express Segment:

For the second quarter, the FedEx Express segment reported:

• Revenue of $6.86 billion, up 4% from last year’s $6.58 billion

• Operating income of $230 million, down 33% from $342 million a year ago

• Operating margin of 3.4%, down from 5.2% the previous year

Revenue increased primarily due to this year’s business acquisitions and growth at FedEx Trade Networks, as core express revenue growth was constrained by global economic conditions and the impact of Superstorm Sandy.

U.S. domestic revenue per package grew 1% as higher rate per pound was partially offset by lower fuel surcharges. U.S. domestic average daily package volume declined 2%. FedEx international export average daily package volume grew 6% driven by increases in FedEx International Economy®(IE) from Europe and Asia and by increases in FedEx International Priority® (IP) from Asia. Higher growth in international deferred services continued, with IE volume growing 14%, while IP volume increased 3% during the quarter. International export revenue per package fell 4% due to the demand shift toward lower-yielding international services and lower fuel surcharges.

Operating income and margin were lower due to the demand shift toward lower-yielding international services, the negative year-over-year impact of net fuel changes, increased depreciation expense, the effects of Superstorm Sandy and higher pension costs. These were partially offset by the favorable impact of cost containment actions.

FedEx Express has entered into an agreement to purchase four additional 767-300 freighters as part of the company’s continued fleet modernization efforts. This brings the total 767-300 orders to 50, with deliveries beginning in fiscal 2014. In concert with this commitment, two 777 freighter deliveries were deferred from fiscal 2015 to fiscal 2016 in order to better match capacity timing to global demand.

Copyright Photo: Brian McDonough. Boeing 777-FS2 N853FD (msn 37724) makes a fuel stop at Anchorage.

FedEx Express: AG Slide Show

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