Monthly Archives: July 2012

CEO Tom Horton: We approached US Airways about a merger, not US Airways approaching us

American Airlines‘ (Dallas/Fort Worth) CEO Thomas W. Horton has given an interview to the Associated Press and for the first time revealed it was Horton who approached US Airways’ (Phoenix) CEO Doug Parker about a possible merger, not the other way as it has been implied by Parker. Horton also stated it is American’s decision whether it wants a merger or not. Horton also stated there is more financial pressure on US Airways to seek a merger partner.

Read the full article from the timesleader.com: CLICK HERE

Copyright Photo: Michael B. Ing. Boeing 737-823 N905AN (msn 29507) “Flagship Liberty” of American Airlines climbs away from the runway at Los Angeles International Airport.

American Airlines:

Comair to cease all operations on September 29

Delta Air Lines (Atlanta) today announced its subsidiary, Comair, Inc. (Delta Connection) (Cincinnati) will cease all operations after September 29, 2012.

The company issued the following statement this morning:

“Ryan Gumm, President of Comair, communicated Delta’s decision this morning to Comair employees in a memo, the full text of which is included below.

The discontinuation of Comair’s operations will not result in any significant changes to Delta’s network, which has enough flexibility to accommodate these changes. Currently, Comair accounts for approximately one percent of Delta’s network capacity. There will be no disruption to customers and no significant adjustments to Delta’s flight schedule or locations served. All customers who travel on the Delta network, whether on Delta Connection flights or mainline aircraft, can continue to make travel plans with Delta as they have in the past.

Cincinnati will continue to be an important market in Delta’s worldwide network. Over the past several years, working with community leaders, Delta has right-sized capacity at Cincinnati to better match service to local passenger demand. Cincinnati is now a profitable market for Delta and the city continues to enjoy over 120 peak daily flights, with non-stop service to 49 destinations. No reductions in the number of Delta flights are planned at Cincinnati as a result of this decision.

To                            All Comair Employees
From                        Ryan Gumm, President
Subject                    Comair to Cease Operations
Date                        July 27, 2012

All,

Today, I am writing to let you know that Delta has made the difficult decision to cease Comair’s operations after September 29, 2012.

Delta recently announced its intent to reduce the overall number of 50-seat regional jets in its network from nearly 350 to 125 or fewer in light of the significant changes in the economic and competitive conditions in the airline industry. We believed this announcement would have a negative impact on Comair because we operate some of the oldest 50-seat aircraft in the Delta Connection fleet, which also have the highest unit cost per flight hour. And, in fact, Delta has decided to remove the remaining 16 Comair 50-seaters from the Delta network, leaving Comair with only 28 aircraft in scheduled service. This further reduction of Comair’s active fleet will only create higher unit costs, which equates to a business model that is no longer sustainable in this competitive regional environment.

I understand that today’s news is very difficult and raises many questions for you and your family. Human Resources is prepared to directly assist you during this time. They will post a memo and other documents on the Human Resources Epic page to keep you informed of the assistance available and to help answer many of your questions. We will also have staff available over the weekend to answer questions if needed. If after reviewing the information on Epic you have any additional questions or concerns, please do not hesitate to reach out to your departmental leadership as well.

The discontinuation of Comair’s operations is in no way a failure or a reflection of your work – it is an unfortunate necessity due to the economic limitations of our aging aircraft, cost structure, the long-term outlook for 50-seat aircraft, and our challenging industry and economy. The quality of our operations has continued to be outstanding during our lengthy restructuring efforts, and I am honored to have had the opportunity to lead such a committed team. I am asking that each of you recognize the importance of remaining focused on safety and the job at hand as we continue operations throughout the wind-down period. Your continued commitment and your dedication to a safe and reliable operation is a testament to the professional team we have built here at Comair.”

Comair started operations in March 1977 and became a Delta Connection carrier on September 1, 1984.

Top Copyright Photo: Ken Petersen. Bombardier CRJ900 (CL-600-2D24) N695CA (msn 15097) taxies at New York (JFK) in the special “30 years” (1977-2007) when it celebrated its 30th Anniversary.

Bottom Copyright Photo: Jay Selman. ComAir started out as an independent carrier. Shorts SD3-30 N2630A (msn SH.3081) is pictured near Cincinnati in August 1982 dressed in the 1977 livery. The airframe was destroyed in a rare tornado at Miami on February 2, 1998.

Delta Connection-Comair:

Alitalia receives approval to acquire Wind Jet, with stipulations

Alitalia (2nd) (Rome) has received approval from the anti-trust regulators to acquire Wind Jet (Catania). However due competitive issues, Alitalia must give five slot pairs of Wind Jet for other carriers. This will be the end of Wind Jet which started operations on June 18, 2003.

Read the full report from Reuters Italia (in Italian): CLICK HERE

Alitalia (2nd):

Wind Jet:

OLT Express (Poland) suspends scheduled operations after Amber Gold stops funding

OLT Express (Poland) (formerly Yes Airways) (Warsaw) suspended all scheduled operations after the last flight of the day last night (July 26). All flights scheduled today are cancelled. Charter flights however will be operated. Owner Amber Gold Group has stopped funding the airline and the airline is now searching for new investors. The carrier has promised to give full refunds. The airline was operating scheduled domestic flights in Poland and international holiday flights since April.

Yes Airways changed its name to OLT Express in January 2012 following the acquisition by Amber Gold.

It is not known how this move by the Amber Gold Group will affect OLT Express (Germany).

Read the full report by Polskie Radio: CLICK HERE

Philippines Airlines is coming to Toronto, Paris and Rome

Philippines (Philippine Airlines) (Manila) is planning to add Toronto (Pearson) before of the end of this year as the company adds more Boeing 777-300 ERs according to this report by the Manila Bulletin. The flag carrier is also planning to add Paris and Rome in February 2013.

Read the full report: CLICK HERE

Philippines:

United Continental Holdings posts 2Q net income of $545 million

United Continental Holdings, Inc. (United Airlines) (Chicago) today reported second-quarter 2012 net income of $545 million or $1.41 per diluted share, excluding $206 million of net special charges. Including special charges, UAL reported second-quarter 2012 net income of $339 million or $0.89 per diluted share.

UAL second-quarter consolidated passenger revenue increased 2.3 percent year-over-year. Second-quarter consolidated passenger revenue per available seat mile (PRASM) increased 3.0 percent compared to the same period in 2011.
Second-quarter consolidated fuel expense increased 5.6 percent, or $181 million, year-over-year.
Consolidated unit costs (CASM) holding fuel rate and profit sharing constant and excluding special charges and third-party business expense for second-quarter 2012 increased 2.1 percent year-over-year. Second-quarter consolidated CASM increased 4.6 percent year-over-year.
UAL ended the second quarter with $8.2 billion in unrestricted liquidity.
UAL accrued $54 million for profit sharing, based on year-to-date profitability.

Second-Quarter Revenue and Capacity

For the second quarter of 2012, total revenue was $9.9 billion, an increase of 2.4 percent year-over-year excluding special items. Including special items in 2011, second-quarter total revenue increased 1.3 percent year-over-year. Second-quarter consolidated passenger revenue rose 2.3 percent to $8.8 billion, compared to the same period in 2011.

Consolidated revenue passenger miles (RPMs) increased 0.5 percent on a consolidated capacity (available seat miles) decrease of 0.6 percent year-over-year for the second quarter, resulting in a second-quarter consolidated load factor of 84.3 percent.

Consolidated yield for the second quarter of 2012 increased 1.8 percent year-over-year. Second-quarter 2012 consolidated PRASM increased 3.0 percent compared to the same period in 2011.

Mainline RPMs in the second quarter of 2012 increased 0.5 percent on a mainline capacity decrease of 0.2 percent year-over-year, resulting in a second-quarter mainline load factor of 84.7 percent. Mainline yield for the second quarter of 2012 increased 1.0 percent compared to the same period in 2011. Second-quarter 2012 mainline PRASM increased 1.8 percent year-over-year.

“We continued redeploying domestic aircraft in the second quarter and are pleased with the early financial results on those routes,” said Jim Compton, UAL’s executive vice president and chief revenue officer. “Our extensive fleet and industry-leading global network enable us to reallocate aircraft to provide customers with more options.”

Passenger revenue for the second quarter of 2012 and period-to-period comparisons of related statistics for UAL’s mainline and regional operations are as follows:

	2Q 2012 Passenger Revenue (millions)	Passenger Revenue vs. 2Q 2011	PRASM vs. 2Q 2011	Yield vs. 2Q 2011	ASMs vs. 2Q 2011

Domestic	$3,441	0.6%	1.1%	1.3%	(0.5%)

Atlantic	1,589	(1.9%)	2.3%	1.1%	(4.1%)
Pacific	1,257	12.5%	6.6%	4.9%	5.6%
Latin America	657	(3.4%)	(3.4%)	(7.2%)	0.1%
International	$3,503	2.6%	2.6%	0.7%	0.0%

Mainline	$6,944	1.6%	1.8%	1.0%	(0.2%)
Regional	1,824	5.2%	8.5%	5.0%	(3.0%)

Consolidated	$8,768	2.3%	3.0%	1.8%	(0.6%)

Cargo and other revenue in the second quarter of 2012 increased 3.4 percent, or $39 million, year-over-year to $1.2 billion.

Second-Quarter Costs

Total operating expenses, including special charges, increased $363 million, or 4.0 percent, in the second quarter compared to the same period of 2011. Second-quarter 2012 operating expenses, excluding fuel, profit sharing, special charges and third-party business expense, increased $158 million, or 2.9 percent, year-over-year.

Third-party business expense was $60 million in the second quarter. Consolidated and mainline CASM, excluding special charges and third-party business expense, increased 4.1 percent and 4.5 percent, respectively, in the second quarter of 2012 compared to the same period of 2011. Second-quarter consolidated and mainline CASM, including special charges, increased 4.6 and 5.2 percent year-over-year, respectively.

In the second quarter, consolidated and mainline CASM, excluding special charges and third-party business expense and holding fuel rate and profit sharing constant, increased 2.1 percent and 1.7 percent, respectively, compared to the results for the same period of 2011.

Second-Quarter Liquidity and Cash Flow

UAL ended the second quarter with $8.2 billion in unrestricted liquidity, comprised of $7.7 billion of cash, cash equivalents and short-term investments and $500 million of undrawn commitments under a revolving credit facility. During the second quarter, the company generated $959 million of operating cash flow and had gross capital expenditures of $500 million. The company made debt and net capital lease payments of $258 million including $69 million of prepayments in the second quarter.

United Airlines:

Alaska Air Group reports net income of $67.5 million

Alaska Air Group (Seattle/Tacoma), the parent organization of Alaska Airlines and Horizon Air (Alaska Horizon), today reported its financial results for the second quarter. The company issued the follow report:

Alaska Air Group today reported second quarter 2012 GAAP net income of $67.5 million, or $0.93 per diluted share, compared to GAAP net income of $28.8 million, or $0.39 per diluted share in 2011. Excluding the impact of mark-to-market fuel hedge adjustments of $69.6 million($43.3 million after tax, or $0.60 per diluted share), the company reported record second quarter2012 net income of $110.8 million, or $1.53 per diluted share, compared to net income excluding special items of $89.6 million, or $1.22 per diluted share, in 2011.

The following table reconciles the company’s reported GAAP net income and earnings per diluted share (EPS) during the second quarters of 2012 and 2011 to adjusted amounts:

	Three Months Ended June 30,
	2012				2011
(in millions, except per share amounts)	Dollars		Diluted EPS		Dollars		Diluted EPS
Reported GAAP net income	$	67.5	$	0.93	$	28.8	$	0.39
Fleet transition costs, net of tax	—		—		16.7		0.23
Mark-to-market fuel hedge adjustments, net of tax	43.3		0.60		44.1		0.60
Non-GAAP adjusted income and per share amounts	$	110.8	$	1.53	$	89.6	$	1.22

Copyright Photo: Michael B. Ing. Horizon Air’s (Alaska Horizon) Bombardier DHC-8-402 (Q400) N400QX (msn 4030) painted in the Idaho Vandals special livery taxies to the runway at the Seattle/Tacoma home and hub.

Alaska Horizon:

Alaska Airlines:

Horizon Air:

Nippon Cargo takes delivery of its first new Boeing 747-8F Freighter

Nippon Cargo Airlines-NCA (Tokyo-Narita) has taken delivery of its first new Boeing 747-8F Freighter, marking the Japanese debut for the 747-8F. The new airplane is NCA’s first 747-8F Freighter on order with Boeing.

The airline currently operates eight 747-400F Freighters with two 747-400F Freighters on lease with other airlines.

The environmentally focused Nippon Cargo Airlines will also undertake its first biofuel flight with this milestone 747-8F Freighter delivery. The new airplane will become the first 747-8F to use a blend of environmentally progressive biofuels (jet kerosene and used cooking oil) to fly across the Pacific Ocean.

Nippon Cargo Airlines, one of the launch customers for the 747-8F Freighter in 2005 and also part of a team that helped develop the aircraft, plans to begin revenue service with its new 747-8 Freighter by mid-August on Asia and North American routes.

The 747-8F Freighter will provide double-digit improvements in fuel burn, operating costs and lower emissions over the 747-400F Freighter. The 747-8F Freighter also provides 16 percent more revenue-generating cargo volume and boasts a significantly improved environmental performance. Per tonne-kilometer, its carbon dioxide emissions are 16 percent lower than those of the 747-400F Freighter. It also reduced its noise footprint by more than 30 percent.

Copyright Photo: Nick Dean. As previously reported, the pictured Boeing 747-8KZF JA13KZ (msn 36138) departing from Paine Field near Everett is also ushering in a new livery for Nippon Cargo.

NCA:

Hot New Photos:

Atlas Air takes delivery of the second new Boeing 747-800F Freighter for Panalpina

Atlas Air (New York) has taken delivery of a fifth Boeing 747-8F Freighter.

The pictured 747-87UF N851GT (msn 37565) departing from Everett (Paine Field) is the second aircraft of the type to be placed into service for Panalpina under a previously announced multi-year aircraft, crew, maintenance and insurance (ACMI) outsourcing contract.

The newest freighter will offer Panalpina, a Swiss-based global freight forwarding and logistics services provider, additional next-generation performance in payload, fuel efficiency, total cost per tonne-mile, and environmental compliance.

Atlas Air expects to receive two additional 747-8Fs in 2012 and two in the first half of 2013 for a total of nine. As previously announced, Atlas has received a commitment from Apple Bank for Savings to finance the remaining deliveries, subject to customary conditions.

The acquisition of this latest 747-8F was financed in part with proceeds from a term loan and was subsequently refinanced by the issuance of $142.7 million of 12-year, secured bonds. These bonds, which are guaranteed by the Export-Import Bank of the United States, have been priced at 1.73% and are scheduled to close on July 31, 2012. BNP Paribas and KGS Alpha Capital Markets are acting as joint lead bookrunners.

Atlas Air:

AeroMexico signs LOI with Boeing for 90 737-8 MAX aircraft and 10 787-9 Dreamliners

Grupo Aeromexico, S.A.B. de C.V. (AeroMexico) (Mexico City) announced today it has signed a letter of intent (LOI) with the Boeing to purchase up to 100 next generation aircraft worth close to $11 billion U.S. dollars. This intention to buy represents the largest investment by a national company in the aviation industry in Mexico.

The order includes 90 narrow body 737-8 MAX jet airliners with CFM International LEAP-1B engines, and ten wide body Boeing 787-9 Dreamliners, with General Electric GEnx-1B™ engines. This major order will make Grupo Aeromexico the first Latin American carrier to operate this type of aircraft.

The addition of these new aircraft is part of the carrier’s ongoing fleet renewal program as it intends to maintain one of the youngest fleets in the industry worldwide. The modern comforts featured by this next generation of jet airliners will offer customers a more pleasant travel experience.

It is important to note that this order for 100 aircraft is in addition to the package of 20 new and wholly owned acquisitions the carrier announced in 2011 including ten Embraer 190 airplanes and ten Boeing 737-8 NG jet airliners, plus the nine Boeing 787-9 Dreamliners whose first delivery is scheduled for Summer 2013. Delivery of the Boeing 737-8 MAX will begin in 2018.

In other news, AeroMexico has added its first Embraer ERJ 170 for AeroMexico Connect. Eventually the newer ERJ 170s will replace the older ERJ 145 regional jets. Former Republic Airlines ERJ 170-100SU N806MD (msn 17000019) was delivered on June 15, 2012 as XA-ACP. It was followed by XA-ACQ (msn 17000042, ex N821MD) on July 9, 2012. The new type entered revenue service on July 7, 2012 from Mexico City to Acapulco, Campeche, Oaxaca and Veracruz.

Copyright Photo: Brian McDonough. AM already operates a large 737NG fleet. Boeing 737-852 EI-DRC (msn 35116) completes its final approach into Miami International Airport.

AeroMexico: