Monthly Archives: April 2018

Wizz Air builds up operations in London Luton and Vienna

Wizz Air  (Hungary) Airbus A321-231 WL HA-LXH (msn 7217) BSL (Paul Bannwarth). Image: 941506.

Wizz Air on Sunday, April 29, 2018 allocated a fifth Airbus aircraft to its London Luton fleet and launched two new routes to Athens and Keflavik.

The newly allocated Airbus A320 is the fifth of eight aircraft to be deployed at Wizz Air’s London Luton base by June 2018. This rapid expansion of Wizz Air’s operations brings a 23% growth year on year with more than 7.4 million seats on sale in 2018 for 47 routes available from London Luton.

Flights to Keflavik in Iceland, gateway to the Northern Lights will operate on Mondays, Wednesdays, Fridays and Sundays.

Flights to the Greek capital, Athens will operate daily.

In 2018 Wizz had already launched four new routes from London Luton to Bari (Southern Italy), Larnaca (Cyprus), Tirana (Albania) and Bratislava (Slovakia). In the autumn WIZZ will begin flights to Lviv (Ukraine) and Tallinn (Estonia).

This expansion at London Luton is part of the biggest operational ramp-up in Wizz Air’s history, which will see the delivery of 21 Airbus aircraft across its network in just 17 weeks. Only seven weeks in, Wizz Air has launched 30 new low-fare routes and deployed eight ultra-efficient Airbus aircraft across 11 of its bases. Three new destinations have been inaugurated in Wizz’s ever-expanding network; Athens in Greece, Kharkiv in Ukraine and the Austrian capital Vienna.

WIZZ AIR’S NEWEST ROUTES FROM LONDON LUTON

Route Days Fares from*
Athens, Greece Daily £45.99
Keflavik, Iceland Mondays, Wednesdays, Fridays and Sundays £26.99

 

*One way including all taxes, non-optional charges and cabin bag

In other news, Wizz Air on April 27 celebrated the start of operations from Vienna, the newest destination in its network, along with the first flights on three new routes to Katowice in Poland, Tuzla in Bosnia and Herzegovina and Varna in Bulgaria.

In addition, the airline has announced another new route from Vienna to Kyiv, Ukraine starting in October 2018 and now connects Vienna with a total of 30 destinations in 22 countries.

Finally, Wizz Air also announced on April 27 three new services from Kyiv to Berlin, Frankfurt and Vienna. The new low fare routes will be operated daily.

Wizz started operations from Igor Sikorsky Kyiv International Airport in 2008 and after 10 years of successful operations, as part of its great expansion across Europe, the airline introduces three new routes Germany and Austria. Further diversifying its low fare network from Kyiv, WIZZ offers now 23 routes to 11 countries, including the services to Tallinn and Lisbon that will commence in June. The airline continues to invest in its local base, by allocating the third modern Airbus A320 this summer, a total investment of more than $ 300 million**, and employing more than 100 local crew.

Copyright Photo: Wizz Air (Hungary) Airbus A321-231 WL HA-LXH (msn 7217) BSL (Paul Bannwarth). Image: 941506.

Wizz Air aircraft slide show:

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Air Senegal acquires its AOC, will launch in May

The new Air Senegal (Senegal) has been awarded its Air Operators Certificate (AOC). The AOC was awarded today, April 30, 2018.

The new airline is planning to launch scheduled passenger flights in May from Dakar with two ATR 72-600 turboprops.

The first route will be Dakar-Ziguinchor starting on May 14, 2018.

The new flag carrier is also planning to add two leased Airbus A319s in the fourth quarter of 2018.

Photos: Air Senegal.

Lion Air Boeing 737-800 skids off the runway at Gorontalo

Lion Air flight  JT 892 from Makassar to Gorontalo with 174 passengers and seven crew members overran the runway at Gorontalo’s Djalaludin Airport, Indonesia Sunday (April 29) while attempting to land. The Boeing 737-800 (PK-LOO) was badly damaged. There were no reported injuries.

Read the full report from Jakarta Post: CLICK HERE

Social Media report:

Video:

 

Alaska Airlines opens new airport lounge at New York’s JFK

(PRNewsfoto/Alaska Airlines)

Alaska Airlines today announces the debut of its first Alaska Lounge on the East Coast, opening at John F. Kennedy International Airport (JFK). The new, reimagined lounge brings to life the company’s West Coast vibe with a cool, comfortable space to work or relax while traveling through JFK.

 

Alaska’s newest lounge features a living room-esque design with multiple seating areas designed with business and leisure travelers in mind. The lounge includes Starbucks-trained baristas who will create custom handcrafted espresso beverages and full-leaf tea beverages for guests. Travelers will have access to complimentary fresh foods including oatmeal and yogurt bars in the morning and salad and soup in the afternoon and evening. Guests can also enjoy a wide-selection of microbrews, West Coast wines or a signature cocktail from the lounge’s welcoming bar.

(PRNewsfoto/Alaska Airlines)

The Alaska Lounge is located on the mezzanine level of Terminal 7 at JFK. It is accessible to Alaska guests traveling through or out of Terminal 7 who have purchased a day pass or lounge membership or are flying First Class. All paid First Class guests receive complimentary access to the lounge, a benefit only offered by Alaska compared to other domestic carriers. In addition to the new JFK lounge, Alaska has lounges in Anchorage, Los Angeles, Portland, Oregon and three in Seattle, the airline’s largest hub.

Alaska continues to be committed to serving the New York area and recently announced new nonstop service between JFK and San Jose, California, and a third daily Seattle flight beginning early July. Alaska operates 14 daily flights to New York’s JFK and offers connections to many international destinations through its Global Partners. To purchase tickets, visit alaskaair.com to find great savings, or call 1-800-ALASKAAIR (800-252-7522 for Hearing & Speech Impaired (TTY): Dial 711 for Relay Services).

(PRNewsfoto/Alaska Airlines)

Alaska Airlines, and its regional partners, flies 44 million guests a year to more than 115 destinations with an average of 1,200 daily flights across the United States and to Mexico, Canada and Costa Rica.

Photos: Alaska Airlines.

Air Canada reports first quarter 2018 results

Delivered on February 3, 2018

Air Canada today reported first quarter 2018 EBITDAR(1) (earnings before interest, taxes, depreciation, amortization, impairment and aircraft rent) of $397 million compared to first quarter 2017 EBITDAR of $366 million.  Air Canada reported an operating loss of $14 million compared to an operating loss of $30 million in the first quarter of 2017.  The airline reported an adjusted pre-tax loss(1) of $72 million in the first quarter of 2018 compared to an adjusted pre-tax loss of $63 million in the prior year’s quarter.  On a GAAP basis, in the first quarter of 2018, Air Canada reported a loss before income taxes of $184 million, which included losses on foreign exchange of $112 million, compared to a loss before income taxes of $13 million, which included gains on foreign exchange of $70 million, in the first quarter of 2017.

Special items are excluded from Air Canada’s reported EBITDAR calculations.  See below for a description of the special item recorded in the first quarter of 2017.

“We are pleased with our strong results in the first quarter, historically the most challenging of the year for airlines in Canada.  Alongside the record quarterly and annual results we have previously reported, our performance in this more challenging quarter affirms Air Canada’s progress towards consistent earnings and long-term, sustained profitability,” said Calin Rovinescu, President and Chief Executive Officer.

“We generated record first quarter passenger revenue of $3.5 billion, with traffic growth of 11.4 per cent outstripping a capacity increase of 8.6 per cent. Given the cost discipline we’ve developed, we delivered better than expected adjusted CASM and overall cost performance in the first quarter.  We achieved record unrestricted liquidity of $4.9 billion and a leverage ratio(1) of 2.0, further reducing our risk profile and positioning us towards investment grade. The demand environment continues to show strength, and our advance bookings are in line with expectations.  We remain well positioned to compete effectively and adapt to variables, with the launch of new products and fare offerings, cost reductions and other levers at our disposal.

“I thank our employees for their hard work safely transporting and caring for our customers during the quarter, particularly during periods of extreme weather, including the recent severe ice storm at our Toronto global hub. Their unwavering focus on our customers’ needs as a crucial part of our ongoing transformation is evident in all aspects of our operation, from rising customer satisfaction scores to cost improvements that have contained adjusted unit cost increases below our own projections. Finally, I am pleased that our customers are increasingly recognizing the strides we have made and thank them for their patronage and loyalty in choosing Air Canada,” said Mr. Rovinescu.

First Quarter Income Statement Highlights

In the first quarter of 2018, on capacity growth of 8.6 per cent, record system passenger revenues of $3.489 billion increased $369 million or 11.8 per cent from the first quarter of 2017.  The increase in system passenger revenues was driven by traffic growth of 11.4 per cent and a yield improvement of 0.4 per cent.  An increase in average stage length of 3.9 per cent had the effect of reducing system yield by 2.2 percentage points. On a stage-length adjusted basis, system yield increased 2.6 per cent year-over-year.

In the business cabin, system passenger revenues increased $88 million or 13.8 per cent from the first quarter of 2017 on traffic and yield growth of 9.1 per cent and 4.3 per cent, respectively.

In the first quarter of 2018, operating expenses of $4.085 billion increased $413 million or 11 per cent from the same quarter in 2017, mainly driven by the increase in capacity and higher fuel prices year-over-year.

Air Canada’s cost per available seat mile (CASM) increased 2.4 per cent from the first quarter of 2017.  The airline’s adjusted CASM(1) increased 0.4 per cent from the prior year’s quarter, better than the 2.0 to 3.0 percent increase projected in Air Canada’s news release dated February 16, 2018.  This improvement was mainly due to lease extensions that were negotiated earlier than anticipated, which resulted in a decrease to maintenance provisions in the first quarter of 2018, timing of certain maintenance events previously scheduled for the first quarter of 2018 (the majority of which was moved to the second quarter of 2018), and the impact of initiatives related to Air Canada’s $250 million Cost Transformation Program.

Air Canada recorded an adjusted net loss(1) of $52 million or $0.19 per diluted share in the first quarter of 2018 compared to an adjusted net loss of $63 million or $0.23per diluted share in first quarter of 2017.  On a GAAP basis, the airline reported a first quarter 2018 net loss of $170 million or $0.62 per diluted share compared to a first quarter 2017 net loss of $13 million or $0.05 per diluted share. In the first quarter of 2018, Air Canada recorded losses on foreign exchange of $112 million compared to gains on foreign exchange of $70 million in the first quarter of 2017.

Special Item

In the first quarter of 2017, Air Canada recorded a provision of $30 million relating to a fine which was reinstated by a decision of the European Commission pertaining to cargo investigations.  Air Canada paid the fine in the second quarter of 2017, pending the outcome of its appeal of the decision.

Financial and Capital Management Highlights

At March 31, 2018, unrestricted liquidity (cash, short-term investments and undrawn lines of credit) amounted to 4.883 billion, the highest level in Air Canada’s history (December 31, 2017$4.181 billion).

At March 31, 2018, adjusted net debt of $6.063 billion decreased $53 million from December 31, 2017.  In the first quarter of 2018, the increase in cash and short-term investment balances of $692 million more than offset the increase in long-term debt and finance lease balances of $618 million.  At March 31, 2018, Air Canada’s leverage ratio(1) was 2.0 versus 2.1 at December 31, 2017.

Record net cash flows from operating activities of $1.111 billion improved $84 millioncompared to the first quarter of 2017.  Free cash flow(1) of $193 million in the first quarter of 2018 decreased $277 million from the first quarter of 2017 mainly due to Air Canada having received proceeds from the sale and leaseback of aircraft in the first quarter of 2017.

For the 12 months ended March 31, 2018, return on invested capital (ROIC(1)) was 15.0 per cent, significantly higher than Air Canada’s weighted average cost of capital of 7.7 per cent.  Air Canada updated its methodology to calculate ROIC, as described in the section below entitled “Non-GAAP Measures”.

Current Outlook

In addition to reaffirming its EBITDAR margin, ROIC, free cash flow and leverage ratio targets discussed in its September 19, 2017 Investor Day news release, Air Canada is providing the following guidance:

Full Year 2018 Free Cash Flow

Air Canada continues to expect positive free cash flow in the range of $250 to $500 million in 2018. Air Canada is not planning any sale-leaseback transactions in 2018.

Second Quarter and Full Year 2018 Adjusted CASM

For the second quarter of 2018, Air Canada expects adjusted CASM (which excludes fuel expense, the cost of ground packages at Air Canada Vacations and special items) to increase 0.5 to 1.5 per cent when compared to the second quarter of 2017.

Air Canada now expects full year 2018 adjusted CASM to range between a decrease of 0.5 per cent to an increase of 1.0 per cent when compared to the full year 2017, as opposed to the range of a decrease of 0.5 per cent to an increase of 1.5 per cent projected in Air Canada’s news release dated February 16, 2018.  The improved range takes into account the initial success of our $250 million Cost Transformation Program.  Approximately 0.75 percentage points of this range are driven by non-recurring costs for branding initiatives and new uniforms, customer service and technology investments, accelerated depreciation for Embraer 190 aircraft, and 2018 start-up costs of approximately $10 million related to Air Canada’s new loyalty program scheduled to launch in 2020.

Full Year 2018 Depreciation, Amortization and Impairment Expense

Air Canada continues to expect depreciation, amortization and impairment expense to increase by approximately $150 million from the full year 2017.

Full Year 2018 Employee Benefits Expense

Air Canada continues to expect employee benefits expense to increase by approximately $75 million from the full year 2017.

Full Year 2018 Aircraft Maintenance Expense

Air Canada now expects aircraft maintenance expense to increase by approximately $90 million from the full year 2017, as opposed to the increase of $140 millionprojected in Air Canada’s news release dated February 16, 2018.  This improvement is largely due to Air Canada expecting to accelerate certain lease extensions in the remainder of 2018 and the anticipated impact of cost reduction initiatives.

2018 Outlook – Major Assumptions:  Assumptions were made by Air Canada in preparing and making forward-looking statements. As part of its assumptions, Air Canada assumes relatively modest Canadian GDP growth for the second quarter and full year 2018. Air Canada also expects that the Canadian dollar will trade, on average, at C$1.27 per U.S. dollar in the second quarter and at C$1.26 per U.S. dollar for the full year 2018 and that the price of jet fuel will average 77 CAD cents per litre in the second quarter and 75 CAD cents per litre for the full year 2018.

(1) Non-GAAP Measures

Below is a description of certain non-GAAP measures used by Air Canada in an effort to provide readers with additional information on its financial and operating performance. Such measures are not recognized measures for financial statement presentation under GAAP, do not have standardized meanings, may not be comparable to similar measures presented by other entities and should not be considered a substitute for or superior to GAAP results.  Readers are advised to review the section entitled Non-GAAP Financial Measures in Air Canada’s 2017 MD&A for a further discussion of such non-GAAP measures and a reconciliation of such measures to Canadian GAAP.

  • Adjusted net income (loss) and adjusted earnings (loss) per share – diluted are used by Air Canada as a means to assess the overall financial performance of its business without the after-tax effects of foreign exchange gains or losses, net financing income (expense) relating to employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value, gain on sale and leaseback of assets, gains or losses on debt settlements and modifications and special items as these may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Starting as of and including the fourth quarter of 2017, adjusted net income (loss) is determined net of tax and includes the income tax effect of adjustments included in the measurement of adjusted net income (loss).
  • Adjusted pre-tax income (loss) is used by Air Canada to assess the overall pre-tax financial performance of its business without the effects of foreign exchange gains or losses, net financing income (expense) relating to employee benefits, mark-to-market adjustments on derivatives and other financial instruments recorded at fair value, gain on sale and leaseback of assets, gains or losses on debt settlements and modifications, and special items. Air Canadauses adjusted pre-tax income (loss) to determine return on invested capital.
  • EBITDAR is commonly used in the airline industry and is used by Air Canada as a means to view operating results before interest, taxes, depreciation, amortization, impairment and aircraft rent as these costs can vary significantly among airlines due to differences in the way airlines finance their aircraft and other assets. Air Canada excludes special items from EBITDAR as such items would distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
  • Adjusted CASM is used by Air Canada as a means to assess the operating and cost performance of its ongoing airline business without the effects of fuel expense, the cost of ground packages at Air Canada Vacations® and special items, as such expenses may distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful. Aircraft fuel expense is excluded from operating expense results as it fluctuates widely depending on many factors, including international market conditions, geopolitical events, jet fuel refining costs and Canada/U.S. currency exchange rates. Air Canada also incurs expenses related to ground packages at Air Canada Vacations® which some airlines, without comparable tour operator businesses, may not incur. In addition, these costs do not generate ASMs and therefore excluding these costs from operating expense results provides for a more meaningful comparison across periods when such costs may vary.
  • “Leverage ratio” refers to adjusted net debt to trailing 12-month EBITDAR leverage ratio and is commonly used in the airline industry and is used by Air Canada as a means to measure financial leverage. Leverage ratio is calculated by dividing adjusted net debt by trailing 12-month EBITDAR (excluding special items). As mentioned above, Air Canada excludes special items from EBITDAR results (which are used to determine leverage ratio) as such items would distort the analysis of certain business trends and render comparative analysis to other airlines less meaningful.
  • Free cash flow is commonly used in the airline industry and is used by Air Canada as an indicator of the financial strength and performance of its business, indicating the amount of cash Air Canada is able to generate from operations and after capital expenditures. Free cash flow is calculated as net cash flows from operating activities minus additions to property, equipment and intangible assets, and is net of proceeds from sale-leaseback transactions.
  • Return on invested capital (ROIC) is used by Air Canada as a means to assess the efficiency with which it allocates its capital to generate returns. Return is based on adjusted pre-tax income (or loss, as applicable), excluding interest expense and implicit interest on operating leases. Invested capital includes average year-over-year long-term debt, average year-over-year finance lease obligations, average year-over-year shareholders’ equity and the value of capitalized operating leases (the latter calculated by multiplying annualized aircraft rent by 7). Air Canada calculates invested capital based on a book value-based method of calculating ROIC, as described above. Following an increase in Air Canada’s total cash, cash equivalents and short-term investments, Air Canada decided to revise its methodology to reduce the average year-over-year book value of shareholders’ equity by excess cash not required to run its core business operations. Air Canada has used average year-over-year advance ticket sales as a proxy for the minimum cash required for ongoing core business operations. This change should result in invested capital more closely reflecting operating capital. Refer to the definition of adjusted pre-tax income (loss) for a discussion as to why Air Canada uses adjusted pre-tax income (loss) to assess the overall pre-tax financial performance of its business.

 

Copyright Photo: Air Canada Boeing 787-9 Dreamliner C-FVLU (msn 38360) ZRH (Rolf Wallner). Image: 941753.

Air Canada aircraft slide show (new livery):

airBaltic launches flights from Riga to Almaty

airBaltic Bombardier CS300 YL-CSC (msn 55005) ZRH (Paul Bannwarth). Image: 941766.

airBaltic on April 29, launched a new route from Riga International Airport to Almaty in Kazakhstan. 

Above Photo: airBaltic.

The new route from Riga to Almaty is the second longest flight on our network. It is flown with Bombardier CS300 aircraft.

Route Flight frequency Start date Price *,

Basic

Price *,

Premium

Price*,

Business

Riga – Almaty (Kazakhstan) 3  flights weekly April 29, 2018 159 EUR 199 EUR 739 EUR

*Lowest fare (one way), including taxes, fees and service charges, on www.airBaltic.com, subject to availability

airBaltic flies from Riga to Almaty 3 flights weekly. Passengers will board a Bombardier CS300 aircraft for a flight that will last approximately 5 hours and 15 minutes.

airBaltic serves over 70 routes from Riga, Tallinn and Vilnius, offering the largest variety of destinations and convenient connections via Riga to its network spanning Europe, Scandinavia, the CIS and the Middle East.

For summer 2018, airBaltic has introduced eight new destinations from Riga to Malaga, Lisbon, Split, Bordeaux, Gdansk, Almaty as well as Sochi and Kaliningrad. In addition, airBaltic launched a new direct route connecting Tallinn and London. 

Top Copyright Photo: airBaltic Bombardier CS300 YL-CSC (msn 55005) ZRH (Paul Bannwarth). Image: 941766.

airBaltic aircraft slide show:

WestJet launches its first inaugural Halifax – London Gatwick flight

MAX 8, delivered on October 2, 2017

WestJet on April 30 officially launched its route between Halifax and London (Gatwick). The departure of flight WS24 marks the start of daily, nonstop service between Halifax Stanfield International Airport and Gatwick Airport until October 26, 2018.

This is the first time the airline has used its newest aircraft, the Boeing 737-8 MAX 8 for transatlantic travel.

On May 31, WestJet will launch its inaugural flight between Halifax and Paris on its Boeing 737-8 MAX 8 aircraft. The flight will mark the first time WestJet will land on the European mainland.

WestJet serves 18 cities from the Halifax International Airport, up from 12 in 2013, including 12 Canadian, two transborder, one international and this summer will serve Glasgow, London and Paris; at peak summer schedule, the airline will operate around 25 flights per day or more than 170 flights per week. Since 2012, the airline’s traffic from Halifax has grown by more than 160 per cent.

Details of WestJet’s new non-stop service:

Route Frequency Departing Arriving Effective
Halifax – London (Gatwick) Daily 10:35 p.m. 8:21 a.m. +1 April 29, 2018
London (Gatwick) – Halifax Daily 9:50 a.m. 1 p.m. April 30, 2018

Copyright Photo: WestJet Airlines Boeing 737-8 MAX 8 C-FNAX (msn 60511) BFI (Steve Bailey). Image: 940224.

WestJet aircraft slide show: