Tag Archives: Boeing 777

Air France-KLM to defer 10 Boeing 777-300 ER deliveries as it issues its third profit warning in 6 months

Air France (Paris) and KLM Royal Dutch Airlines (Amsterdam) have announced they are going to defer delivery of their combined 10 Boeing 777-300s on order due to its third profit warning in six months according to Reuters. This raises concerns for Boeing for a potential production gap for Boeing for the 777 production line until the new 777X enters production.

Read the full report: CLICK HERE

Meanwhile Air France-KLM issued this statement:

During its meeting on December 18, 2014, the Air France-KLM Board of Directors reviewed the updated financial outlook for the fourth quarter 2014.

The Group is revising down its 2014 EBITDA target by an additional €200 million compared with the targets communicated on July 8 and October 8. There are four factors behind this revision:

The persistent weakness in unit revenues in several long-haul markets, witnessed since the summer and still prevailing in early December.

The updating of the estimated impact of the Air France pilots’ strike on the fourth quarter including, in particular, a higher-than-expected re-invoicing charge for passenger transportation by other airlines during the strike (‘interline’ invoicing).

Due to new fiscal regulations, the group will not recognize in its 2014 EBITDA a positive pension cost adjustment that was previously expected. Any potential adjustment will be booked under ‘other non-current income and expenses’.

A limited fuel price effect in the fourth quarter, in view of the continued decline in the crude oil price which has fallen by more than that of jet fuel, of the structure of the procurement contracts and of the fuel hedging portfolio.

As announced in the third quarter results press release, with no impact on the principles of the Perform 2020 plan, the Group has decided to revise its 2015 and 2016 business plans to take into account the consequences of the pilots’ strike and of the weaker unit revenue trend that has developed since the summer. The Group is thus planning further unit cost* reduction measures and a significant scale back in its investment plan.

Air France-KLM’s Chairman and Chief Executive Officer, Alexandre de Juniac, made the following comments: “The Perform 2020 dynamic is under way across all the Group’s activities, based on the imperatives of an ongoing improvement in competitiveness and strict financial discipline. By significantly stepping up our cost-cutting efforts and adapting the investment plan, Air France-KLM can gain the resources and be well prepared to tackle 2015 despite the difficult competitive environment.”

Top Copyright Photo: TMK Photography/AirlinersGallery.com. Air France’s Boeing 777-328 ER F-GZNI (msn 39973) taxies at Toronto (Pearson).

Air France aircraft slide show: AG Slide Show

KLM aircraft slide show: AG Slide Show

Bottom Copyright Photo: Nick Dean/AirlinersGallery.com. KLM’s Boeing 777-306 ER PH-BVC (msn 37582) departs from Paine Field.

The latest theory on what happened to Malaysia Airlines missing flight MH 370

Malaysia Airlines (Kuala Lumpur) missing flight MH 370 from Kuala Lumpur to Beijing on March 8, 2014 with 239 people on board tragically remains missing. Several articles and a book have expressed many different unproven theories. No part of the aircraft has been officially found. The latest unproven theory, written by former Proteus Airlines CEO Marc Dugain and published by Paris Match, claims the the Boeing 777-200 ER may have been hijacked by a “remote control system” and possibly shot down by U.S. forces near Diego Garcia in the Indian Ocean. The U.S. has denied the aircraft came down near the British island.

Diego Garcia in the Indian Ocean

Google Maps: Diego Garcia in the lonely Indian Ocean. A close-up of the British island below.

Diego Garcia

Read the full story from France 24: CLICK HERE

On November 10, 2014 Malaysia Airlines issued this statement (the last statement from the airline on MH 370):

Malaysia Airlines refers to recent news articles speculating on an official declaration of loss of flight MH 370.

Addressing the speculation to family members via letters, the airline highlighted that any course of action is always guided by the advice of the technical team in charge of the search operations.

The assurances given to us are that the ongoing search and recovery operations will remain and will not be discontinued.

Recent speculation in the press regarding a declaration of loss followed the expression of a personal opinion only. Any information regarding MH 370, the search and recovery operations and any matters related to the missing aircraft will only be communicated by the Joint Agency Coordination Centre (JACC).

Malaysia Airlines is hopeful that we will find closure to this tragedy and we support and thank our government as well as the governments of Australia and China for their invaluable assistance in this time of crisis.

The airline shares the pain and anguish of family members in having to deal and come to terms with this situation, as such we have assured them that locating the aircraft and recovering the flight data recorders remain the key priority. Every party involved in this complex operation is as determined as the families and Malaysia Airlines to find answers to our many questions.

With regard to the level of compensation available pursuant to the Montreal Convention, or similar applicable legal regime, the airline has made it very clear that payments are determined by law to take account of proven passenger and family circumstances and will be assessed accordingly.

Malaysia Airlines and its insurers remain steadfast to ensure that fair and reasonable compensation is paid to the families of all MH370 passengers in accordance with the law when the families are ready to discuss the issue. We have stated this publicly on many occasions and we reiterate that the airline will honour any commitments that we have made.

The well-being of the family members is always our main priority, and we will continue to communicate on any updates as and when we have them.

Our thoughts and prayers continue to be with the families of passengers and crew of MH 370.

What do you think?

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Where is 9M-MRO? Missing Boeing 777-2H6 ER 9M-MRO (msn 28420) lands in Kuala Lumpur before the tragic disappearance.

Malaysia Airlines aircraft slide show:

China Airlines to launch Boeing 777-300 service to Frankfurt

China Airlines (Taipei) is planning to launch new Boeing 777-300 ER service to Frankfurt from Taipei (Taoyuan) starting on November 1, 2015. The new type will replace the current Boeing 747-400 service and will operate five days a week per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-36N ER B-18051 (msn 41821) prepares to land at Los Angeles International Airport.

China Airlines aircraft slide show:

El Al’s third quarter net profit slips to only $10.1 million

El Al Israel Airlines (Tel Aviv) reported a third quarter net profit of $10.1 million, down from a net profit of $57.9 million in the same quarter a year ago. Net loss during the period of the first nine months of 2014 amounted to $13.2 million compared to a profit of $29.1 million dollars during the equivalent period in the previous year.

El Al’s CEO, David Maimon: “The results of the third quarter reflect the effect of the “Operation Protective Edge”, which caused significant harm to revenues and as a result El Al requested government assistance. This is the first time since the Second Lebanon War in 2006 in which El Al presents a significant decline in third quarter profits which is traditionally considered as its strongest quarter. In addition, the quarter was characterized by an erosion in prices which resulted in a decline in revenues per passenger.”

Maimon added: “On the other hand, we have significant marketing achievements: the number of members of the Frequent Flyers Club in Israel and globally increased to 1.4 million members, inter alia thanks to the launching of the Flycard and Flycard Premium credit cards with 40 thousand customers ordering these cards within a few weeks. In addition, in the framework of the renewal and extension of the Company’s network of destinations, in the fourth quarter we announced the opening of a new El Al direct line to Boston and a new cooperative agreement (codeshare) signed with JetBlue Airways and American Airlines, which enables our customers to fly to a wide range of destinations in the US with high availability and convenient connections.”

The results of the third quarter of 2014:

Revenues amounted to $601.2 million dollars, compared to $643.3 million during the equivalent quarter in the previous year, a decline of 6.5%. Revenues per passenger declined by 7.3%, mainly as a result of a drop in the yield per passenger-kms, as a result of the negative effects of the ‘Operation Protective Edge’. Revenues from cargo transport increased by 4.5%, mainly as a result of an increase in the number of ton-kms flown, after setting off a decline in the yield.

Operating expenses increased by 2% to $493 million compared to $483.6 million during the equivalent quarter in the previous year. The rate of operating expenses to turnover increased from 75.2% in the third quarter of 2013 to 82.0% in this quarter. The increase in operating expenses was a result mainly of the increase in expenses for jet fuel, an increase in levies and air transition fees, and after setting-off the decline in salary and security expenses.

Salary expenses declined during the quarter, mainly due to the effect of the devaluation in the rate of the shekel compared to the dollar on the Company’s liabilities for employee benefits. The number of the Company’s employees, permanent and temporary, stood at an average of 6,216 employees, compared to 6,109 during the equivalent quarter in the previous year.

The Company’s expenses for jet fuel increased by 5.2%. The increase was due to the effect of the increase in operations and the effect of the increase in the effective price of jet fuel (which includes the results of hedging operations that the Company took). It should be mentioned that the prices of jet fuel in the market declined in the third quarter compared to the equivalent quarter in the previous year, but the Company’s hedging operations resulted in an increase in the effective price for the Company. The rate of jet fuel expenses to turnover increased from 30.3% during the equivalent quarter in the previous year to 34.1% in the third quarter. Total hedging payments in the quarter under report agregated 2.9 million dollars compared to $4.4 million receipts from hedging for the equivalent quarter in the previous year. In addition, the Company recorded expenses of $5.8 million as a result of changes in the fair value of the hedging transactions, which are not recognized as hedging (revenues of 2.4 million dollars during the equivalent quarter in the previous year).

Gross profits amounted to $108.3 million (18.0% of turnover), compared to $159.7 million for the equivalent quarter in the previous year (24.8% of turnover).

Income from operations amounted to $29.1 million, compared to $75.6 million during the equivalent quarter in the previous year.

Net financing expenses during the quarter amounted to $15.4 million compared to net financing income of $5.2 million during the equivalent quarter in the previous year, mainly due to the results of hedging the rates of exchange.

Net profit for the third quarter of 2014 amounted to $10.1 million, compared to $57.9 million for the third quarter of 2013.

Cash flows used for operating activities in the third quarter of 2014 amounted to $12.0 million compared to $56.1 million cash flows provided by operating activities during the equivalent quarter in the previous year.

The EBITDA in the third quarter of 2014 amounted to $57.3 million compared to $100.6 million during the equivalent quarter.

Results for the first nine months of 2014:

Revenues for the first nine months of the year amounted to $1,588.2 million, compared to $1,604.0 million during the equivalent period in the previous year, a decline of 1.0% due mainly to the decline in yield as a result of the increasing competition and after setting off the increase in the number of passengers flown.

Operating expenses during the first nine months of 2014 amounted to $1,357.7 million compared to $1,324.4 million during equivalent period in the previous year, an increase of 2.5%.

Salary expenses increased during the first nine months of 2014 compared to the equivalent period in the previous year, mainly due to the effect of the revaluation which occurred during most of the period of report in the average rate of the shekel against the dollar on expenses, most of which are in shekels. The increase was set off by the effect of the devaluation of the rate of the shekel compared to the dollar at the end of the period on the Company’s liabilities for employee benefits.

The Company’s expenses for jet fuel increased by 1.0% compared to the equivalent period in the previous year. This due to the changes in the fair value of hedging transactions which are not recognized as hedging, payments for hedging compared to receipts during the equivalent period in the previous year, an increase in operations and setting off the decline in the prices of jet fuel in the market. The rate to turnover increased from 32.9% to 33.5%. Total hedging payments during the period of report amounted to $1 million compared to $4.7 million of hedging receipts during the equivalent period in the previous year. In addition, the Company recorded expenses of $5.5 million as a result of changes in the fair value of hedging transaction which are not recognized as hedging (an expense of $2.4 million during the equivalent period in the previous year).

Security expenses the Company recorded a significant decline of $14.3 million as result of an increase in the rate of the State’s participation.

Gross profits during the first nine months of 2014 amounted to $230.5 million, which is a rate of 14.5% of turnover, compared to gross profits of $279.6 million (a rate of 17.4% of turnover) during the equivalent period in the previous year.

Operating income during the first nine months of 2014 amounted to $1.8 million, compared to $46.3 million during the first nine months of 2013.

Net financing expenses amounted to $20.9 million compared to $4.0 million during the equivalent period in the previous year; the increase was a result of the hedging transactions on the rates of exchange.

Net loss during the period of the first nine months of 2014 amounted to $13.2 million compared to a profit of $29.1 million dollars during the equivalent period in the previous year.

El Al’s EBITDA for the first nine months of the year amounted to $84.8 million dollars compared to $121.3 million during the equivalent period in the previous year.

Cash flows from operating activities for the first nine months of the year amounted to $147.9 million, compared to $184.6 million during the equivalent period in the previous year.

Additional data:

As of September 30, 2014, the balances of the Company’s cash, cash equivalents and short-term deposits amounted to $138.0 million dollars.

It should be mentioned that during the third quarter of 2014, the Company invested $66.2 million in fixed assets and other assets, mainly in the acquisition of an additional Boeing 737-900 aircraft, as well as repaying current loans of $48.3 million and receiving loans of $75.4 million dollars to finance the acquisition of new aircraft.

Copyright Photo: El Al’s Boeing 777-258 ER 4X-ECE (msn 36083) taxies at London (Heathrow).

El Al aircraft slide show:

 

ANA is coming to Houston

ANA (All Nippon Airways) (Tokyo) has announced it will launch a new route from Tokyo (Narita) to Houston (Bush Intercontinental) starting on June 12, 2015 with Boeing 777-300 ERs.

ANA will also increase the number of flights from Tokyo to Singapore and Bangkok by introducing twice daily services from Narita to these two cities in addition to the existing double daily service from Haneda Airport. Flights from Singapore and Bangkok arriving in Narita early morning will increase the number of North American cities that can be connected and will, together with the evening flight, greatly increase the convenience of Asia-North America connections at Narita.

Houston will be ANA’s tenth destination in North America.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-381 ER JA786A (msn 37948) with the special “Forward as one Japan” markings arrives at Narita International Airport near Tokyo.

ANA aircraft slide show: AG Slide Show

Air Canada to become the launch customer of Boeing’s new landing gear exchange program

Boeing (Chicago, Seattle and Charleston) has announced that Air Canada (Montreal) is the launch customer for Boeing’s new landing gear exchange programs for 777-300 ER (Extended Range) and 777-200 LR (Longer Range) airframes.

Under the agreement, Air Canada will receive fully overhauled and certified landing gear shipsets for its fleet of 17 777-300 ERs and six 777-200 LRs during scheduled maintenance cycles. The terms of the agreement were not disclosed.

Boeing currently provides landing gear overhaul and exchange solutions to more than 80 customers on the MD-11, 717, Next-Generation 737, Boeing Business Jet, 747-400, 757-300, 767-300 ER and the 777-200 ER airframes. With a Boeing global network of repair service centers, airline customers receive certified landing gear support anywhere around the world. Boeing provides quick, reliable access to landing gear repair, exchanges and overhauls, which greatly reduces maintenance time and quickly returns airplanes to revenue service.

In addition to its Landing Gear Overhaul and Exchange Program, Boeing provides expendable, rotable, repairable and consumable parts to customers around the globe, giving them a competitive edge in their markets. Products and services include Boeing-proprietary, industry-standard and vendor-proprietary parts; leasing options; and repair and overhaul services.

Copyright Photo: SPA/AirlinersGallery.com. Air Canada’s Boeing 777-333 ER C-FNNW (msn 43250) departs from London (Heathrow).

Air Canada aircraft slide show: AG Slide Show

Emirates to go to double daily to Barcelona

Emirates (Dubai) has announced plans to offer a double daily service to Barcelona, less than three years after its initial launch to the city.

From May 2, 2015 Emirates will add a further 3724 seats per week to Barcelona increasing overall capacity by 51 percent. The extra service will be operated by a Boeing 777-200 LR in a three class configuration, complementing the airline’s already successful daily Airbus A380 service.

Flight EK 188 will depart Dubai at 1545 and arrive at Barcelona El Prat Airport at 2100. Flight EK 189 will take off daily from Barcelona at 2245 and land in Dubai at 0725 the following day.

In addition to Barcelona, Emirates also operates a double daily service to Madrid. Emirates first launched flights to Spain in 2010 and now offers a total of 21,042 seats per week to and from the country.

Copyright Photo: Boeing 777-21H LR (Longer Rang) A6-EWG (msn 35578) taxies to the runway at Los Angeles International Airport.

Emirates aircraft slide show: AG Slide Show