Monthly Archives: July 2014

Air Canada to operate weekly Montreal-Curacao Airbus A319 flights

Air Canada (Montreal) will start weekly Airbus A319 mainline service between Montreal (Trudeau) and Curacao starting on January 1, 2015 per Airline Route.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Airbus A319-114 C-FYJG (msn 670) completes its final approach to the runway at Los Angeles.

Air Canada: AG Slide Show

Republic Airlines to fly Embraer 175s as American Eagle from the Miami hub starting on October 2

Republic Airlines (2nd) (American Eagle) (Indianapolis) on October 2 will start operating Embraer 175s on American Eagle services from the Miami hub to Atlanta, Indianapolis, Jacksonville and Tallahassee. The E175s will replace existing Embraer ERJ 145 service per Airline Route.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Republic’s Embraer ERJ 170-200LR (ERJ 175) N404YX (msn 17000367) completes its final turn on the river approach into Washington’s Reagan National Airport (DCA).

American Eagle-Republic: AG Slide Show

JetBlue to launch a nonstop New York JFK-Curacao route on December 2

JetBlue Airways (New York) will launch a new route to Curaçao International Airport (CUR) from JFK International Airport (JFK) on December 2, 2014, providing the only nonstop service from New York. The twice weekly service will operate on Tuesdays and Saturdays.

Curaçao, which is part of the ABC islands that also includes Aruba and Bonaire, is considered a hidden gem amongst all Caribbean island destinations, renowned for its diving, beaches and unique architecture. The historic island is already a popular destination for European travelers and its capital, Willemsted, is a UNESCO World Heritage City.

JetBlue’s flights to Curaçao will be operated on a 150-seat Airbus A320.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A320-232 N587JB (msn 2177) in the special “Building Blocks” motif arrives at the New York (JFK) hub.

JetBlue Airways: AG Slide Show

Spirit Airlines reports record 2Q net income of $66.5 million, up 45.2%

Spirit Airlines, Inc. (Fort Lauderdale/Hollywood) has reported second quarter 2014 financial results.

Adjusted net income for the second quarter 2014 increased 45.2 percent to $66.5 million ($0.91 per diluted share) compared to $45.8 million ($0.63 per diluted share) for the second quarter 20131. GAAP net income for the second quarter 2014 was $64.8 million ($0.88 per diluted share) compared to $42.1 million ($0.58 per diluted share) in the second quarter 2013.

For the second quarter 2014, Spirit achieved an adjusted pre-tax margin of 21.3 percent compared to 17.8 percent over the same period in 20131. On a GAAP basis, pre-tax margin for the second quarter 2014 was 20.8 percent compared to 16.4 percent in the second quarter 2013.

Spirit ended the second quarter 2014 with $567.2 million in unrestricted cash.

Spirit’s return on invested capital (before taxes and excluding special items) for the twelve months ended June 30, 2014 was 32.0 percent. See “Calculation for Return on Invested Capital” table below for more details.

“The Spirit team delivered another strong quarter. While growing our capacity 17.2 percent year over year, we grew our top line 22.6 percent year over year,” said Ben Baldanza, Spirit’s Chief Executive Officer. “Our efforts to drive operational excellence have produced material improvements in controllable components of our cost structure which contributed to the 3.5 percentage point year-over-year increase in our Adjusted Operating Margin. I want to thank all our team members that contributed to these excellent results. A few months ago, we launched a series of initiatives aimed at better aligning our customers’ expectations with the Spirit business model. We are very encouraged at the early results of this effort, and the Bare Fare™ plus Frill Control™ messaging is resonating well with customers as they see the benefit of only paying for what they truly value. As we continue down this path, we expect ever increasing alignment to a business model that provides the lowest total fares and the highest consumer choice all while maintaining our commitment to deliver value to our customers and to our shareholders.”

Revenue Performance

For the second quarter 2014, Spirit’s total operating revenue was $499.3 million, an increase of 22.6 percent compared to the second quarter 2013. The increase was driven by our growth in flight volume, higher load factors, and higher operating yields.

Total revenue per available seat mile (“RASM”) for the second quarter 2014 was 12.46 cents, an increase of 4.6 percent compared to the second quarter 2013. The calendar shift of Easter occurring in April this year compared to March in 2013 contributed to the strong second quarter 2014 results.

Passenger flight segment (“PFS”) volume for the second quarter 2014 grew 14.7 percent year over year, and the Company’s load factor for the second quarter 2014 increased 1.8 points year over year to 87.5 percent. Total revenue per PFS for the second quarter 2014 increased 6.8 percent year over year to $139.90.

Cost Performance

Total operating expenses for the second quarter 2014 increased 15.7 percent year over year to $394.2 million on a capacity increase of 17.2 percent.

Spirit reported second quarter 2014 cost per available seat mile excluding special items and fuel (“Adjusted CASM ex-fuel”) of 5.95 cents, a decrease of 0.8 percent compared to the same period last year. The primary driver of the decrease was lower passenger re-accommodation expense (recorded within Other operating expense) per ASM as a result of improved operational reliability. The Company also benefited from lower aircraft rent per ASM. These benefits were partially offset by higher depreciation and amortization expense and increased salary, wages, and benefits, as well as higher maintenance, material, and repairs expense per ASM.

Selected Balance Sheet and Cash Flow Items

As of June 30, 2014, Spirit had $567.2 million in unrestricted cash and cash equivalents. For the six months ended June 30, 2014, Spirit incurred capital expenditures of $7.4 million, paid $94.0 million in pre-delivery deposits for future deliveries of aircraft, net of refunds, and recorded an increase of $14.3 million in maintenance deposits, net of reimbursements.

Fleet

In the second quarter 2014, Spirit took delivery of one new A320 aircraft, ending the quarter with 57 aircraft in its fleet. The Company has eight more new A320 aircraft scheduled for delivery by year-end 2014.

Second Quarter 2014 and Other Current Highlights

• Added/announced new service between (service start date):

– Minneapolis-St. Paul and Houston (5/1/14)2
– Minneapolis-St. Paul and Baltimore/Washington (5/1/14)2
– Chicago O’Hare and Oakland/San Francisco (5/1/14)
– Minneapolis-St. Paul and Detroit (5/22/14)2
– Chicago O’Hare and Baltimore/Washington (5/22/14)2
– Chicago O’Hare and Portland, OR (5/22/14)2
– Fort Lauderdale and New Orleans (8/1/14)
– Houston and New Orleans (8/1/14)
– Houston and Atlanta (8/1/14)
– Kansas City and Chicago (8/7/14)
– Kansas City and Dallas/Fort Worth (8/7/14)
– Kansas City and Detroit (8/7/14)
– Kansas City and Las Vegas (8/7/14)
– Kansas City and Houston (8/8/14)
– Fort Lauderdale and Houston (9/3/14)
– Houston and San Diego (9/3/14)
– Boston and West Palm Beach (11/21/14)2
– Latrobe/Pittsburgh and Fort Myers (12/18/14)2
– Latrobe/Pittsburgh and Tampa (12/19/14)2

Copyright Photo: Brian McDonough/AirlinersGallery.com. Spirit Airlines has eight more new Airbus A320 aircraft scheduled for delivery by year-end 2014. Airbus A320-232 N617NK (msn 5387) completes its final approach into Baltimore/Washington (BWI).

Spirit Airlines: AG Slide Show

Current Route Map:

Spirit 7.2014 Route Map

Boeing forecasts rising demand for commercial pilots and technicians

Boeing logo (medium)

Boeing (Chicago and Seattle) is forecasting continued strong growth in demand for commercial aviation pilots and maintenance technicians as the global fleet expands over the next 20 years.

Boeing’s 2014 Pilot and Technician Outlook, released today at EAA AirVenture Oshkosh, projects that between 2014 and 2033, the world’s aviation system will require:

533,000 new commercial airline pilots
584,000 new commercial airline maintenance technicians

“The challenge of meeting the global demand for airline professionals cannot be solved by one company or in one region of the world,” said Sherry Carbary, vice president, Boeing Flight Services. “This is a global issue that can only be solved by all of the parties involved—airlines, aircraft and training equipment manufacturers, training delivery organizations, regulatory agencies and educational institutions around the world.”

The 2014 outlook projects continued increases in pilot demand, which is up approximately 7 percent compared to 2013; and in maintenance training, which increased just over 5 percent. Pilot demand in the Asia Pacific region now comprises 41 percent of the world’s need, and the Middle East region saw significant growth since last year’s outlook due to increased airline capacity and orders for wide-body models which require more crew members.

Overall, the global demand is driven by steadily increasing airplane deliveries, particularly wide-body airplanes, and represents a global requirement for about 27,000 new pilots and 29,000 new technicians annually.

Projected demand for new pilots and technicians by global region:

Asia Pacific – 216,000 pilots and 224,000 technicians
Europe – 94,000 pilots and 102,000 technicians
North America – 88,000 pilots and 109,000 technicians
Latin America – 45,000 pilots and 44,000 technicians
Middle East – 55,000 pilots and 62,000 technicians
Africa – 17,000 pilots and 19,000 technicians
Russia and CIS – 18,000 pilots and 24,000 technicians

Ryanair posts a fiscal first quarter net profit of $264.1 million, an increase of 152%

Ryanair (Dublin) has announced a fiscal first quarter (Q1) net profit of €197 million ($264.1 million), an increase of 152% over last year.

The ultra low-fare airline cautioned that this result was distorted by the timing of a very strong Easter in Q1 with no holiday period in the prior year comparable. Traffic grew to 24.3 million as load factors rose by 4% points to 86%. Average fare rose by 9%, boosted by a strong Easter period, while total revenues were up 11% to €1.496 billion. Unit costs fell by 2%, excluding fuel they rose by 1%.

Ryanair’s Michael O’Leary said:

“Q1 profits were boosted by a strong Easter (but are somewhat distorted by the absence of Easter on the prior year Q1). The earlier launch of our summer schedule and actively raising our forward bookings has delivered a 4% increase in load factor to 86% and enabled us to better manage close-in yields. Ancillary Revenues rose 4% in line with traffic growth, as airport and baggage fee reductions were offset by the rising uptake of allocated seating.“

New Routes and Bases.

Our four new bases at Athens, Brussels, Lisbon and Rome are performing strongly, as customers switch to Ryanair’s lower fares and our industry leading customer service. Our strategy to raise forward bookings continues to drive higher load factors and we expect to release our summer 2015 schedule in mid-September, some 3 months earlier than last year.

This winter we will open four new bases in Cologne, Gdansk, Warsaw and Glasgow (Intl.) as well as substantially increasing new routes and frequencies at Stansted and Dublin as we invest heavily in our network to build schedules on key city pairs to make them more attractive for business customers.

We are overrun with growth offers from primary European airports whose incumbent flag and regional carriers continue to cut capacity and traffic. These new airports along with our existing 69 bases offer Ryanair significant growth opportunities as the first of our 180 new Boeing order delivers this September. These new aircraft, with the benefit of the much weaker US$, will drive significant cost efficiencies over the next 5 years.

Customer Experience Improvement.

Our “Always Getting Better” program has delivered significant improvement to the customer experience. In addition to the initiatives launched last September which included allocated seating, free second carry-on bags, and an easier to use website with a “fare finder” facility, we launched our family product in June. In July we released our industry leading mobile app (including mobile boarding passes) which has been very positively reviewed by independent commentators and our customers and has reached 1m downloads in the 10 days since its release. In September we will launch Ryanair’s business service which will include same day flight changes, bigger bag allowances, premium seat allocation, and fast-track through security at many Ryanair airports. This new service along with our new routes, improved schedules and wider GDS distribution, will make Ryanair’s low fares much more accessible to, and attractive for business customers. We will continue this winter to rapidly develop both our website and mobile platform to deliver more innovative features and services in addition to the lowest fares to our customers.

Fuel

We are 90% hedged for FY15 at approx. $96 p.bl, which will deliver savings of €50m this year at current market rates. This is lower than the €70m previously guided due to increased volumes in H2. We have also hedged 55% of our H1 FY16 fuel needs at approx. $95 p.bl and weaker US$ which will deliver a 2% fall in our unit fuel cost at current market rates.

Bond Issue

The BBB+ rating awarded by S&P and Fitch makes Ryanair the highest rated airline in the world. This rating reflects the strength of our Balance Sheet and our highly cash generative business model and enabled us in June to issue our first €850m unsecured Eurobond at a coupon of 1.875% fixed for 7 years. This attractively priced financing (which was 7 times oversubscribed) will further reduce our aircraft ownership costs over the next 5 years.

Shareholder returns

In FY14 we completed €482m of share buybacks as part of our commitment to return €1 billion to shareholders over a 2 year period. We now plan to return another €520m via a special dividend of 37.50 cents per ordinary share (subject to AGM approval) to be paid in Q4 FY15. This brings the total returns to shareholders since 2008 to over €2.5bn which is more than 4 times the €585m originally raised from shareholders since our 1997 IPO.

Outlook

Based on these Q1 results and our strong forward bookings it is clear that we are on track to deliver a strong H1, during which traffic will grow by 3%, and fares will rise by 6% subject to late booking fares in Aug. and Sept. However we would strongly caution both analysts and investors against any irrational exuberance in what continues to be a difficult economic environment, with some company-specific challenges in H2.

We expect H2 to be characterized by a much softer pricing environment as many competitors are lowering fares, partly in response to Ryanair’s strong forward bookings. Added to this Ryanair will aggressively raise capacity this winter by 8% (7% in Q3 and 10% in Q4) to take advantage of growth discounts and build out business friendly frequencies from Dublin and Stansted in particular. These initiatives will inevitably put downward pressure on fares and (mindful of last winter’s weak pricing environment) we continue to expect H2 yields to fall by between 6% to 8% which will result in full year yields rising by only 2%. Unit costs (ex-fuel) for FY15 will rise by approx. 4%, which is slightly better than the 5% increase we originally guided, due to higher H2 traffic volumes which will be positive for unit costs.

In summary, we now expect full year traffic to grow by 5% to 86m. This increased traffic and higher load factors, combined with a slightly improved performance on unit costs allows us to cautiously raise our full year profit after tax guidance (from the previous range €580m to €620m) to a range of €620m to €650m. However this guidance, which is about a 21% rise over last year’s net profit, is heavily, reliant upon the final outturn for H2 yields over which we currently have zero visibility”.

Copyright Photo: Keith Burton/AirlinersGallery.com. Boeing 737-8AS EI-CSW (msn 29935) in the old small-titled 1994 livery arrives at Stansted Airport near London.

Ryanair:

 

Malaysia Airlines MH 17 investigators are unable to go to the crash site due to fighting in eastern Ukraine

Malaysia logo-1

CNN is reporting the following concerning the on-going investigation of the shoot down of Malaysia Airlines flight MH 17 in eastern Ukraine:

“International investigators and observers were again prevented from reaching the crash site of Malaysia Airlines Flight 17 on Tuesday (July 29) by fierce fighting in the area between pro-Russian rebels and Ukrainian forces.

The Dutch Justice Ministry said the team was unable to leave the city of Donetsk because “there is too much fighting at the moment on and near the route to the disaster site.”

Read the full report: CLICK HERE

WestJet reports a record 2Q net profit of $51.8 million, will operate Boeing 767-300 ERs, Encore orders 5 more Q400s

WestJet (Calgary) today announced its second quarter results for 2014, with net earnings of $51.8 million (all amounts in Canadian dollars), or $0.40 per fully diluted share, as compared with the net earnings of $44.7 million, or $0.34 per fully diluted share reported in the second quarter of 2013. Based on the trailing twelve months, the airline achieved a return on invested capital of 13.7 per cent, consistent with the 13.7 per cent reported in the previous quarter.

“We had a great second quarter, reporting record earnings, exceeding our ROIC target for the eighth consecutive quarter, and achieving an on-time performance rate of 84.5 per cent, a year over year improvement of 3.5 percentage points,” said WestJet President and CEO Gregg Saretsky. “We continue to execute on our growth plans, including new service to Dublin, Ireland, success with our fare bundles initiative, and the expansion of WestJet Encore. Encore celebrated its first birthday in June, recently welcomed its one-millionth guest, and exercised five additional purchase options for Q400 aircraft. I want to thank all of our 10,000 WestJetters for their commitment to providing our award winning brand of friendly caring service, which is the foundation of our success.”

On July 7, WestJet announced that it was in the advanced stages of sourcing aircraft for its entry into wide-body service. A natural, next-step evolution for the airline, WestJet has recently selected four Boeing 767-300 ER aircraft (below) which will initially operate on routes between Alberta and Hawaii during the winter season beginning in late 2015. The airline’s current winter service between Alberta and Hawaii, via two Boeing 757-200s operated by Thomas Cook, is ending in the spring of 2015. WestJet expects to expand its operation into overseas markets starting in the summer of 2016. Further announcements regarding WestJet’s wide-body schedule will be released at a later date.

WestJet 767-300 WL (95)(Flt)(WestJet)(LRW)

Image: WestJet.

On July 28, 2014, WestJet’s Board of Directors declared a cash dividend of $0.12 per common voting share and variable voting share for the third quarter of 2014, to be paid on September 30, 2014, to shareholders of record on September 17, 2014. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.

In other news, WestJet Encore Ltd. has signed a firm purchase agreement for five Bombardier Q400 NextGen airliners. This transaction is a conversion of a batch of five options booked by the carrier’s parent company WestJet and follows the first conversion of five option aircraft announced on March 27, 2014, bringing the number of option aircraft exercised to 10. The initial total of 25 option aircraft was part of the original contract announced on August 1, 2012 that included WestJet’s firm order for 20 Q400 NextGen airliners.

WestJet Encore launched in June 2013 operating 10 departures daily to two destinations with two Bombardier Q400 NextGen aircraft and 131 employees. Today, it operates 90 departures daily from hubs in Calgary, Alberta and Toronto, Ontario to 19 destinations with 13 Bombardier Q400 NextGen aircraft and approximately 500 employees. The airline has announced plans to introduce service to Québec City, Québec; Fredericton, New Brunswick and Penticton, British Columbia in 2015.

Copyright Photo: Matt Dueck/AirlinersGallery.com. WestJet will become a new Boeing 767-300 operator. The airline will trade in its wet leased Boeing 757-200s (currently operated by Thomas Cook Airlines) for larger wide-body Boeing 767-300 ERs in 2015. The pictured Boeing 757-28A N750NA (msn 26277) was previously operated by North American Airlines in the WestJet brand.

WestJet:

FAA proposes a $12 million civil penalty against Southwest Airlines, Southwest has 30 days to respond

Federal Aviation Administration (FAA) (Washington) has issued this statement concerning Boeing 737 maintenance issues by Southwest Airlines (Dallas) and a contractor:

The U.S. Department of Transportation’s Federal Aviation Administration (FAA) is proposing a $12 million civil penalty against Southwest Airlines for failing to comply with Federal Aviation Regulations in three separate enforcement cases related to repairs on Boeing 737 jetliners operated by the Dallas-based airline.

The FAA alleges that beginning in 2006, Southwest conducted so-called “extreme makeover” alterations to eliminate potential cracking of the aluminum skin on 44 jetliners. The FAA conducted an investigation that included both the airline and its contractor, Aviation Technical Services, Inc., (ATS) of Everett, Wash. Investigators determined that ATS failed to follow proper procedures for replacing the fuselage skins on these aircraft. FAA investigators also determined that ATS failed to follow required procedures for placing the airplanes on jacks and stabilizing them. All of the work was done under the supervision of Southwest Airlines, which was responsible for ensuring that procedures were properly followed.

Southwest returned the jetliners to service and operated them when they were not in compliance with Federal Aviation Regulations, the FAA alleges. The regulatory violations charged involve numerous flights that occurred in 2009 after the FAA put the airline on notice that these aircraft were not in compliance with either FAA Airworthiness Directives or alternate, FAA-approved methods of complying with the directives. The FAA later approved the repairs after the airline provided proper documentation that the repairs met safety standards

“Safety is our top priority, and that means holding airlines responsible for the repairs their contractors undertake,” said U.S. Transportation Secretary Anthony Foxx. “Everyone has a role to play and a responsibility to ensure the safety of our transportation system.”

During its investigation, the FAA found that ATS workers applied sealant beneath the new skin panels but did not install fasteners in all of the rivet holes during the timeframe for the sealant to be effective. This could have resulted in gaps between the skin and the surface to which it was being mounted. Such gaps could allow moisture to penetrate the skin and lead to corrosion. As a result of the improper repairs, these airplanes did not comply with Federal Aviation Regulations.

The FAA also alleges that ATS personnel failed to follow requirements to properly place these airplanes on jacks and shore them up while the work was being performed. If a plane is shored improperly during skin replacement, the airframe could shift and lead to subsequent problems with the new skin.

In the third case, the FAA alleges that Southwest Airlines failed to properly install a ground wire on water drain masts on two of its Boeing 737s in response to an FAA Airworthiness Directive addressing lightning strikes on these components. As a result, the aircraft were not in compliance with Federal Aviation Regulations. The airplanes were each operated on more than 20 passenger flights after Southwest Airlines became aware of the discrepancies but before the airline corrected the problem.

“The FAA views maintenance very seriously, and it will not hesitate to take action against companies that fail to follow regulations,” said FAA Administrator Michael Huerta.

Southwest Airlines has 30 days from the receipt of the FAA’s Civil Penalty letter to respond to the allegations.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-3H4 N363SW (msn 26574) prepares to land at Baltimore/Washington (BWI).

Southwest Airlines:

Here is a new safety video by United Airlines

United Airlines (Chicago) has issued a new safety video with this message:

We’re onboarding a new safety video. Nothing is more important than the safety of our customers and employees, so we’ve incorporated creative elements to maintain the interest of even our most frequent flyers flight after flight. Underscoring the message that safety is global, the video showcases locations throughout United’s broad route network.

Copyright Photo: Boeing 787-8 N26906 (msn 34829) taxies to the gate at Los Angeles.

United Airlines:

Video: