Tag Archives: 737-400

American Airlines Group reports a record first quarter net profit of $480 million

American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) today reported its first quarter 2014 results.

First quarter 2014 net profit was a record $480 million. This represents a $777 million improvement versus the company’s combined first quarter 2013 net loss of $297 million.

Excluding net special credits, the company reported a record first quarter net profit of $402 million. This represents a $340 million year-over-year improvement versus the company’s combined net profit of $62 million excluding net special charges in the first quarter 2013.

First quarter 2014 pretax margin excluding net special credits was 4.1 percent, a 3.6 point year-over-year improvement.

The company ended the quarter with $10.6 billion in total cash and short-term investments. Since the close of the merger, the company has used more than $542 million of cash to reduce its diluted shares outstanding by approximately 20 million.

For the first quarter 2014, American Airlines Group reported a record GAAP net profit of $480 million. This compares to a net loss of $341 million in the first quarter 2013. The company’s GAAP results for the first quarter 2013 reflect AMR Corporation prior to the merger.

The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period. See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

First quarter 2014 net profit excluding net special credits was a record $402 million. This compares to a combined non-GAAP net profit of $62 million excluding net special charges for the same period in 2013. Excluding net special credits, first quarter 2014 diluted earnings per share was $0.54.

“We are very pleased to report a record profit in our first full quarter as a merged company,” said Doug Parker, CEO of American Airlines Group. “Our team of dedicated professionals did an excellent job of taking care of our customers despite particularly difficult weather conditions throughout the quarter. We are excited for the future and expect our synergies to build as we continue to integrate our operations.”

Merger Integration

Since closing the merger on December 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments:

Launched the world’s largest codeshare, offering customers improved access to the company’s global network by allowing them to book flights on both airlines’ networks

Provided reciprocal benefits for airport lounge and frequent flyer elite members, including priority check-in, waiving fees for checked bags, complimentary access to preferred seats, priority security lines, early boarding and priority baggage delivery

Enabled AAdvantage® and Dividend Miles® members to earn and redeem miles when traveling across either airline’s network

Joined operations at 58 airports, including Phoenix and Miami hubs

Moved US Airways into the oneworld alliance on March 31 and to the trans-Atlantic joint venture with American, British Airways, Iberia and Finnair on April 3

Aligned award travel options, checked baggage policies and inflight services for First and Business Class customers

Announced Sabre as the new Passenger Services System for the combined company

Closed the sale of the slot divestitures required by the U.S. Department of Justice at Ronald Reagan Washington National Airport (DCA). In total, the company received $381 million in cash from the DCA sales and the sale of slots at New York’s LaGuardia (LGA) Airport, which closed in the fourth quarter 2013.

Revenue and Cost Comparisons

On a combined basis, total revenues in the first quarter were a record $10 billion, up 5.6 percent versus the first quarter 2013 on a 2.0 percent increase in total available seat miles (ASMs). Driven by a record yield of 17.03 cents, up 3.2 percent year-over-year, combined consolidated passenger revenue per ASM (PRASM) was also a record for the first quarter at 13.67 cents, up 2.9 percent versus the first quarter 2013.

Total combined operating expenses in the first quarter were $9.3 billion, down 0.3 percent over first quarter 2013. Combined first quarter mainline cost per available seat mile (CASM) was 13.50 cents, down 2.7 percent on a 2.7 percent increase in mainline ASMs versus first quarter 2013. This cost improvement was largely due to a 4.8 percent decrease in year-over-year mainline fuel prices. Excluding special charges, fuel and profit sharing, mainline CASM was up 4.0 percent compared to the first quarter 2013, at 8.96 cents. Regional CASM excluding special charges and fuel was 16.62 cents, up 5.0 percent on a 3.2 percent decrease in regional ASMs versus first quarter 2013.

Liquidity

As of March 31, 2014, American had approximately $10.6 billion in total cash and short-term investments, of which $947 million was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $750 million of the company’s unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.32 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars and approximately $45 million valued at 10.7 bolivars, with the rate depending on the date the company submitted its repatriation request to the Venezuelan government.

In the first quarter of 2014, the Venezuelan government announced that a newly-implemented system (SICAD I) will determine the exchange rate (which fluctuates as determined by weekly auctions and at March 31, 2014 was 10.7 bolivars to the dollar) for repatriation of cash proceeds from ticket sales after January 1, 2014, and introduced new procedures for approval of repatriation of local currency. The company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. The company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for potential impairment.

Since the merger, the company paid $542 million in tax withholdings for employees in lieu of issuing shares of common stock as compensation as permitted under the Plan of Reorganization, thereby reducing the number of shares expected to be issued under the Plan by approximately 20 million. Additionally, the company has elected to utilize the cash settlement feature for the remaining $22 million principal amount of US Airways Group 7.25% convertible notes due May 15, 2014, which will further reduce diluted shares by approximately 4 million shares.

Special Items

In the first quarter, the company recognized a combined total of $78 million in net special credits, including:

$137 million in net special credits consisting primarily of the gain on the sale of slots at Reagan National Airport offset in part by integration and merger-related expenses

$47 million in non-operating special charges due primarily to non-cash interest accretion on bankruptcy settlement obligations

$8 million in non-cash deferred income tax provision related to certain indefinite-lived intangible assets

$4 million in regional non-operating charges

Additional Integration Related Developments

Distributed $11 million to employees for baggage handling and on-time performance in the month of January; this distribution of $100 per employee is part of the company’s Triple Play program which measures on-time arrivals and baggage performance as reported in the DOT’s Air Travel Consumer Report (ATCR)

Conducted first joint Captain Leadership Training with newly promoted captains from both airlines

On April 9, Piedmont flight attendants ratified a new five-year Collective Bargaining Agreement
Opened a new Admirals Club lounge at the company’s Philadelphia (PHL) hub

Fleet/Network Developments

As part of its plan to modernize its fleet by replacing older aircraft with newer, more fuel-efficient aircraft, the company inducted 12 new Airbus A321 aircraft into service between New York’s John F. Kennedy International Airport (JFK) and Los Angeles International Airport (LAX), and JFK and San Francisco International Airport (SFO). American is now the only U.S. carrier to offer three classes of service between these key markets.

The company also took delivery of one Airbus A330-200 aircraft, five Boeing 737-800 aircraft and one Boeing 777-300 aircraft during the first quarter.

Revealed new Boeing 767-300 and 777-200ER cabin retrofits, which feature lie-flat seats with direct aisle access in Business Class

In April 2014, the company exercised its option to purchase (and thus terminated its existing lease financing arrangements) for 62 Airbus A320 family aircraft scheduled to be delivered between first quarter 2015 and third quarter 2017. In connection with this decision, the company also exercised its right to convert firm orders for 30 Airbus A320 family NEO aircraft (scheduled to be delivered in 2021 and 2022) to options to acquire such aircraft.

Top Copyright Photo: Rolf Wallner/AirlinersGallery.com. American Airlines’ Boeing 767-323 ER N346AN (msn 33085) taxies at Zurich.

American Airlines:

US Airways:

Bottom Copyright Photo: Jay Selman/AirlinersGallery.com. US Airways is now planning to operate the last Boeing 737 revenue flight on August 18 at the Charlotte hub. Boeing 737-4B7 N450UW (msn 24933) arrives back at CLT.

Global Air Jets starts weekly charter flights from West Palm Beach to Montego Bay, Jamaica

Global Air Jets (West Palm Beach) started weekly charter flights on Sundays from West Palm Beach to Montego Bay, Jamaica on April 20 using the AOC of Swift Air (2nd) (Phoenix). The public charter company is also planning charter flights to Kingston, Jamaica starting in June on Tuesdays.

Copyright Photo: Mark Durbin/AirlinersGallery.com. Boeing 737-4B7 N802TJ (msn 24874) of Swift Air is pictured on the ramp at San Francisco International Airport (SFO).

Swift Air:

Cronus Airlines to add its first Boeing 737

Cronos Airlines (Malabo, Equatorial Guinea) plans to introduce later this month its first Boeing 737, operated by the Spanish ACMI specialist Calima de Aviación. Boeing 737-436 EC-LTC (msn 25439) is pictured departing from Palma de Mallorca with the new titles.

The airline, which started operations in 2010, currently operates two daily flights between Malabo and Bata in Equatorial Guinea, three weekly flights between Malabo and Douala and three weekly flights between Malabo and Cotonou as well as charter flights. It operates BAe 146s.

The carrier will soon open new regional routes to Port Harcourt and Abidjan.

Current Route Map:

FlySafair is cleared to commence passenger operations

Safair (Johannesburg) has issued this statement about its new low-fare FlySafair (Johannesburg) passenger subsidiary:

Microsoft Word – FlySafair announcement

Safair has announced the news that the Air Services Council (ASLC) has granted FlySafair a domestic air service licence for the operation of domestic scheduled flights. This is in addition to the international and domestic unscheduled licence that it held for almost 50 years, providing aviation services both domestically and internationally.

The airline was initially blocked from starting its operations after two competitors brought an urgent application to interdict the new low cost airline from starting its operations based on it not meeting the 75% domestic ownership requirements.

Since then FlySafair has restructured their shareholding, getting rid of the shareholding which caused the problems and at the same time concluding the largest employee share ownership scheme in the aviation industry, effectively giving its South African employees a 25.14% stake in the company.

Despite FlySafair not having been operational since October 2013, the airline retained the services of all the employees who were hired 10 months ago, by utilising them in Safair’s traditional business of providing backup services to local airlines and also in international charter operations.

FlySafair:

Top Copyright Photo: Paul Denton/AirlinersGallery.com. Boeing 737-4Y0 ZS-JRD (msn 24917) taxies at the Johannesburg base.

Southern Air takes delivery of its first Boeing 737-400F freighter for DHL

Microsoft Word – 737 DHL Express Southern Air Press Release_FINAL

Southern Air (2nd) (Cincinnati) has taken delivery of its first Boeing 737-400F freighter (737-4Q3, N493SA, msn 29487). The former JTA airliner was converted to a freighter by Commercial Jet. The freighter will be operated for DHL.

DHL is adding five Boeing 737-400 aircraft to expand its routes within the Americas as part of a multi-year service agreement with US cargo carrier Southern Air. The five aircraft will be placed into service from April through August.

Current planned routes include flights from Caracas (CCS), Venezuela, to Barbados (BGI) and Trinidad and Tobago (POS) in the Caribbean, as well as from Caracas to Bogota (BOG), Colombia, and Panama (PTY). In the United States, the new aircraft will add flights from the Cincinnati hub (CVG) to several cities along the Northeast and Midwest, including Philadelphia (PHL), Hartford (BDL) and St. Louis (STL).

Southern Air also operates four Boeing 777F freighters for DHL.

Southern Air:

First Air and Canadian North to discuss a merger of equals

Makivik Corporation and NorTerra Inc., respectively the shareholders of First Air (Ottawa) and Canadian North (Yellowknife), have agreed to hold discussions leading to the merger of their operations consistent with a merger of equals, subject to the successful conclusion of negotiations and regulatory review.

The potential merger is intended to create a single airline entity that builds on the strengths and identities of the two companies. A merger would improve the sustainability of these critical Inuit birthright enterprises and would also create better air services and new economic development opportunities across the north.

Flight operations and services will remain independent and unaffected during the negotiation and regulatory review phases.

Makivik Corporation and NorTerra Inc. will inform the public as discussions progress.

Top Copyright Photo: TMK Photography/AirlinersGallery.com. Formerly operated by KLM, Boeing 737-406 C-FFNC (msn 27232) of First Air taxies at Hamilton, Ontario.

First Air:

Canadian North:

Bottom Copyright Photo: Gilbert Hechema/AirlinersGallery.com. First Air’s Boeing 737-25A C-GCNO (msn 23790) climbs away from the runway at Montreal (Trudeau).

First Air current route map:

Canadian North current route map:

American Airlines and US Airways issue their fleet plans

American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) has issued its new fleet update (see below) for 2014. Overall the fleet will grow by only three aircraft this year. The Group will take delivery of 83 new mainline aircraft during 2014, namely 10 Airbus A319s, 42 A321s, three A330-200s, 20 Boeing 737-800s, two 787-8s and six 777-300s (more Airbus aircraft than Boeing aircraft). The Group expects to retire during 2014 26 McDonnell Douglas DC-9-82/83s (MD-80s), 14 Boeing 737-400s, 22 757-200s, 13 767-200s and five Airbus A320s.

The last eight Boeing 737-400s being operated by US Airways (top) are expected to be retired before the end of the third quarter (September 30).

On the regional side, the Group is significantly reducing its Embraer ERJ 140 fleet but it will also operate a large amount of inefficient 50-seat Bombardier CRJ200s (138) and Embraer ERJ 145s (118).

Here is the full report:

In addition, according to Airline Route, American Airlines and US Airways will begin assigning certain routes to either American or US Airways:

Effective June 1: American Airlines routes to be operated entirely by US Airways:

Charlotte – Chicago (O’Hare)
Charlotte – Miami
Los Angeles – Phoenix

Effective July 2, the following American routes will be operated by US Airways:

Miami – Detroit
Miami – New Orleans
Miami – Raleigh
Miami – Tampa

Effective July 2, the following US Airways routes will be operated by American:

Phoenix – Detroit
Phoenix – Newark
Phoenix – Orange County
Phoenix – Seattle

Top Copyright Photo: Bruce Drum/AirlinersGallery.com. A significant milestone is approaching quickly. US Airways has had a long association with the Boeing 737 and the last 737-400 is expected to be retired before the end of September according to this fleet update. Boeing 737-4B7 N433US (msn 24555) taxies to the runway at Charlotte Douglas International Airport (CLT).

US Airways:

American Airlines (current):

American Airlines (historic):

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. American is quickly replacing the older Boeing 767-200 ERs currently being operated between New York (JFK) and Los Angeles with newer Airbus A321s. The last AA 767-200 is expected to be retired on May 7 according to ch-aviation although the type will continue with US Airways into 2015. American Airlines’ Boeing 767-223 ER N335AA (msn 22333) departs from Los Angeles bound for New York (JFK).

Alaska Airlines’ IAM employees ratify a new 5-year contract

Alaska Airlines‘ (Seattle/Tacoma) 2,500 clerical, office and passenger service employees, who are represented by the International Association of Machinists and Aerospace Workers (IAM), have ratified a new five-year contract. The contract was approved by 62 percent of those who voted.

The contract includes pay raises and job security provisions, among other improvements.

The previous three-year contract became amendable on January 1, 2014 and a tentative agreement was reached on February 3, 2014. Contracts in the airline industry do not expire. Once they become amendable, the current contract remains in effect until a new agreement is ratified.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-4Q8 N754AS (msn 25095) arrives at Anchorage International Airport (ANC).

Alaska Airlines:

Alaska Airlines becomes the first U.S. airline to allow self-tagging of bags on select routes

Alaska Airlines (Seattle/Tacoma) will be the first U.S. airline to allow self-tagging of bags from home on select introductory routes. The airline issued this statement:

Self-tag online debuts on April 21 for passengers traveling nonstop between Seattle/Tacoma and San Diego, Anchorage or Juneau, Alaska, with plans to expand the option for customers traveling from other airports later this summer. This launch follows the completion of a successful pilot program, which was offered to customers traveling between Seattle/Tacoma and Hawaii in 2013.

Starting on April 21, travelers flying to or from any of the four debut cities will receive a pre-trip email with a link to request a free reusable bag tag holder by mail. Tag holders will also be available to pick up at each of the four airports. Passengers who elect to self-tag will enjoy a designated Self-Tag Express™ lane when they arrive at the airport.

How self-tag online works:

Book a trip at http://www.alaskaair.com.
Follow instructions in your pre-trip email to request a bag tag holder by mail or pick up a holder in person at one of the four participating airports.
Check in online up to 24 hours before your flight and follow the instructions to print a bag tag at home.
Insert printed bag tag into the tag holder.
At the airport, follow signs for Self-Tag Express™ lanes.
Show the agent your boarding pass, identification and drop off your bags.

Alaska Airlines is the first U.S. carrier to launch self-bag tagging from home, another chapter in the carrier’s long history of pioneering technologies and innovations to make flying easier. Alaska was the first airline in North America to sell tickets over the Internet, and the first in the world to allow customers to check in and print boarding passes online. Last year, the carrier installed kiosks with self-tagging printers at 10 airport locations including Seattle/Tacoma, Anchorage and Portland, Oregon.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 737-490 N703AS (msn 28893) departs from Anchorage International Airport (ANC), one of the introductory cities for self-tagging.

Alaska Airlines:

JTA orders 12 Boeing 737-800s to replace its older 737-400s

JTA-Japan Transocean Air (Naha, Okinawa) and Boeing (Chicago and Seattle) announced the airline’s selection of 12 Next-Generation 737-800 airplanes. The selection, valued at $1.1 billion at list prices, will mark the start of the airline’s fleet renewal program with the new airplanes scheduled to enter into service from 2016. As part of the agreement, JTA will have the flexibility to switch to the 737 MAX family of airplanes.

A member of the Japan Airlines Group, JTA is based in Naha, Okinawa, Japan’s southernmost island chain. Currently, the airline operates a fleet of 737-400 airplanes on domestic routes linking Okinawa with major Japanese cities as well as other islands within Okinawa.

JTA’s new 737-800s will be powered by CFM56-7 engines manufactured by CFM International, a joint venture between General Electric and SNECMA. The airplanes will be fitted with Boeing’s latest Performance Improvement Package (PIP), delivering an additional two percent improvement in fuel efficiency for what is already the most fuel efficient single-aisle airplane. The airplanes will also feature the popular passenger-inspired Boeing Sky Interior, with modern sculpted sidewalls and window reveals, LED lighting that enhances the sense of spaciousness and larger pivoting overhead stowage bins.

Copyright Photo: Akira Uekawa/AirlinersGallery.com. Boeing 737-4Q3 JA8940 (msn 29487) completes the final approach into Tokyo’s Haneda Airport (Tokyo International Airport).

JTA-Japan Transocean Air: