Tag Archives: 747400

Southern Air emerges from Chapter 11 bankruptcy

Southern Air Holdings, Inc. (Southern Air 2nd) (Cincinnati) announced yesterday (April 15) that it has emerged from Chapter 11, having completed its financial restructuring.

Daniel J. McHugh, Southern Air CEO, said, “We have emerged from this restructuring process with substantially less debt, significantly improved operations and resources, and financial flexibility as a well-capitalized global air cargo carrier. Today, we are well-positioned both financially and operationally to continue to build Southern Air for the long-term benefit of our customers, suppliers, business partners, crewmembers and employees. From our new headquarters at the Cincinnati/Northern Kentucky International Airport, our largest air operating hub, we are even better able to grow profitably, delivering the highest quality services to our customers and meeting and exceeding their air cargo needs.”

Southern Air entered Chapter 11 on September 28, 2012, and emerged from the process on April 15, 2013, after meeting all closing conditions to the Company’s Plan of Reorganization. The Plan was confirmed by the U.S. Bankruptcy Court in Wilmington, Delaware on March 14, 2013.

Southern Air:

Polar Air Cargo to start nonstop Cincinnati-Tokyo cargo service

Polar Air Cargo Worldwide, Inc. (New York) today confirmed its plans to initiate daily nonstop Boeing 747-400 express freighter service between Cincinnati, Ohio, and Tokyo, Japan, by the end of April 2013.

The new service will complement a daily 747-400 flight from the Japanese industrial city of Nagoya to Cincinnati, facilitating next-day deliveries to the U.S. from all major cities and industrial areas in Japan.

Polar also will double the frequency of its wide-body freighter connections to Australia from two to four days per week. The routing of this service, via Japan, will allow Polar customers such as DHL Express to optimize their intercontinental networks and introduce additional capacity both from the U.S. and from key North Asian markets to Australia. The increase in Polar’s frequencies will be supported by the introduction of two new Boeing 767-300ERF wide-body aircraft.

DHL-Polar Air Cargo:

Silk Way Airlines signs MOU for four Boeing 747-800F freighters

Silk Way Airlines (Silkway Azerbaijan Cargo) (Baku) has signed a Memorandum of Understanding (MOU) with Boeing for four new Boeing 747-800F freighters according to cargofacts.net.

Read the full report: CLICK HERE

Copyright Photo: OSDU. Silk Way currently operates three Boeing 747-400F freighters and two 767-300F freighters besides its Russian aircraft. Boeing 747-4R7F 4K-800 (msn 29729) completes its final approach into Moscow (Shereyetyevo).

Silk Way Airlines:

Route Map:

El Al reduces its loss in 2012

El Al Israel Airlines (Tel Aviv) reported it narrowed its yearly loss to $18.8 million for 2012, compared with a loss of $49.8 million in 2011, an improvement of 62 percent.

El Al has purchased two additional Boeing narrow-body 737-900s (a total of six have been purchased). The first of these new aircraft will begin service with El Al in October 2013.

Read the full report: CLICK HERE

Copyright Photo: Keith Burton. Boeing 747-458 4X-ELD (msn 29328) climbs gracefully away from the runway at London (Heathrow).

El Al Israel Airlines:

Southern Air’s Chapter 11 reorganization plan approved by the bankruptcy court

Southern Air Holdings, Inc. (Southern Air 2nd) (Cincinnati) has announced that it has received confirmation of its “pre-arranged” Plan of Reorganization (Plan) from the U.S. Bankruptcy Court in Wilmington, Delaware, which has been overseeing the Company’s Chapter 11 proceedings following its voluntary filing on September 28, 2012. The Plan received substantial support from key secured creditors as well as unsecured creditors. The confirmation clears the way for Southern Air to emerge from its court-supervised financial restructuring as expected, within the next few weeks.

Daniel J. McHugh, Southern Air CEO, said, “We are very pleased to receive court approval of our Plan of Reorganization and hope to exit Chapter 11 in just a matter of weeks. This was a critical part of our overall transformation. We have used this process to dramatically change and improve our capital structure, substantially reduce our debt and other legacy costs, strengthen our balance sheet, and enhance our competitiveness with new financial flexibility.

“We will emerge as a well capitalized carrier delivering safe, high quality air cargo services. As part of our strategic transformation, we have realigned our operations and capabilities and transitioned to a modern, fuel-efficient fleet of 777s and 747-400s serving global customers. Our operations and corporate activities are now in Northern Kentucky (the Cincinnati airport) near our largest hub of activity where we are even better able to satisfy the needs of our customers and grow our business for the long term to benefit our business partners and employees for years to come.

“It is thanks to the hard work and dedication of the Southern Air team and the support of our lenders and business partners that we have been able to move through this process successfully, fulfilling customer requirements as scheduled and providing high quality air cargo services without interruption. As a result of our transformation, Southern Air is better positioned for the future both financially and operationally to grow profitably as an air cargo industry leader,” concluded McHugh.

Copyright Photo: Michael B. Ing. Southern Air is now concentrating its future around the more fuel efficient Boeing 747-400 and the 777 and its growing relationship with DHL. Boeing 747-4F6 (F) N469AC (msn 27602) is pictured on final approach to Los Angeles International Airport.

Southern Air:

Cathay Pacific’s 2012 annual profit drops 83.3% to $118 million, accelerates the retirement of the Boeing 747-400

Cathay Pacific Group (Cathay Pacific Airways) (Hong Kong) has issued the following financial report for 2012:

The Cathay Pacific Group reported an attributable profit of HK$916 million ($118 million) for 2012 – an 83.3% fall compared to the profit of HK$5,501 million ($709 million) reported for 2011. Earnings per share fell by 83.3% to HK23.3 cents. Turnover for the year increased by 1.0% to HK$99,376 million.

In 2012 the Group’s core business was adversely affected by the high price of jet fuel, pressure on passenger yields and weak air cargo demand. Economic uncertainty, particularly in the Eurozone countries, and an increasingly competitive environment added to the difficulties. It was a challenging year for the aviation industry generally. The Group’s share of profits from associated companies, including Air China, showed a marked decline.

Passenger revenue for the year was HK$70,133 million, an increase of 3.5% compared to 2011. Capacity increased by 2.6%. The two airlines carried a total of 29.0 million passengers in 2012, up 5.0% on the previous year. The passenger load factor fell by 0.3 percentage points. Yield increased by 1.2% to HK67.3 cents, largely due to higher fuel surcharges consequent upon a 1.7% increase in average fuel prices. Uncertain economic conditions and strong competition on key routes put pressure on yields while premium class yields were affected by travel restrictions imposed by corporations. The high cost of fuel made it more difficult to operate profitably, particularly on long-haul routes operated by older, less fuel-efficient aircraft.

The Group’s cargo revenue in 2012 was HK$24,555 million, a decrease of 5.5% compared to 2011. Yield for Cathay Pacific and Dragonair remained the same as last year at HK$2.42. Capacity was down by 3.1% while the cargo load factor dropped by 3.0 percentage points to 64.2%. The airlines’ cargo business was affected by weak demand in major markets, particularly from Asia to Europe. Demand for shipments from the two key markets of Hong Kong and Mainland China, was well below expectations, although there were short-term upturns in March and in the last quarter. Capacity was adjusted in line with demand.

Fuel remained the most significant cost. Throughout much of 2012, fuel prices were at sustained high levels and this had a major impact on operating results. The Group’s fuel costs (disregarding the effect of fuel hedging) increased by 0.8% compared to 2011. Fuel accounted for 41.1% of total operating costs – a decrease of 0.4 of a percentage point from the previous year. Managing the risk associated with high and sometimes volatile fuel prices remains a key challenge. The Group took advantage of a reduction in fuel prices in May and June to do more hedging with a view to mitigating the impact of future fuel price increases.

In May 2012, Cathay Pacific announced measures designed to protect its business in an environment of high fuel prices and weak revenues. These measures included the accelerated retirement of the less fuel-efficient Boeing 747-400 passenger aircraft; the withdrawal from service of four Boeing 747-400BCF converted freighters; and an adjustment of schedules and reduced capacity on some long-haul routes. At the same time as addressing the challenges to its business, the Cathay Pacific Group kept a clear focus on its key strategic goals: developing its network and its Hong Kong base; maintaining and enhancing the quality of its services; strengthening its relationship with Air China; and maintaining a prudent approach to financial risk management.

The airline continued with its major investments in new aircraft and new products, and opened its own cargo terminal at Hong Kong International Airport in February 2013. Despite the need to adjust schedules in 2012 in light of the challenging business environment and the high cost of fuel, the Group remained committed to maintaining the integrity of its network. On the passenger side, Cathay Pacific added frequencies on routes to India, Japan, Malaysia, Singapore, Taiwan, Thailand and Vietnam and introduced a new service to Hyderabad in India last year. Dragonair added frequencies on routes to secondary cities in Mainland China and introduced or resumed flights to eight destinations in 2012. In the first quarter of 2013, Dragonair is launching another four new destinations. On the cargo side, Cathay Pacific introduced freighter services to Zhengzhou, Hyderabad and Colombo last year.

The upgrading of the Cathay Pacific and Dragonair fleets continued in 2012, with 19 new aircraft received. As at 31 December 2012, the Group had 92 aircraft on order for delivery up to 2020. An order was placed for six Airbus A350-900 aircraft in January 2012. In August the Group ordered 10 Airbus A350-1000 aircraft and converted an existing order for 16 Airbus A350-900 aircraft into an order for 16 Airbus A350-1000 aircraft. In March 2013, Cathay Pacific entered into an agreement with The Boeing Company under which it agreed to buy three Boeing 747-8F freighter aircraft and cancel the agreement to purchase eight Boeing 777-200F freighters that was entered into in August 2011. Under the agreements, the Company also acquired options to purchase five Boeing 777-200F freighters and The Boeing Company agreed to purchase four Boeing 747-400BCF converted freighters, which were taken out of service in 2012 and early 2013. The transaction is part of a package of transactions between the Group, The Boeing Company, Air China Cargo Co., Ltd and Air China Limited.

In an increasingly competitive environment it is crucial to maintain and develop passenger loyalty by providing high quality products and services. This remains a key focus of the Cathay Pacific Group. To this end, Cathay Pacific has introduced a new Premium Economy Class product, a new long-haul Economy Class seat and a new Regional Business Class seat. The airline’s long-haul Business Class was named World’s Best Business Class in 2012 at the World Airline Awards run by Skytrax. Dragonair will also get new Business Class and Economy Class seats from March 2013. On the ground, refurbishment of the Level 7 Business Class Lounge in The Wing at Hong Kong International Airport was completed in January 2012 and the First Class Lounge was reopened in February 2013. In August 2012, Cathay Pacific opened a new lounge in Paris.

Cathay Pacific Chairman Christopher Pratt said: “The Cathay Pacific Group operates in a volatile and challenging industry, one that will always be highly susceptible to external factors that remain largely beyond our control. The cost of fuel remains the biggest challenge, particularly for an airline such as ours where long-haul operations form a significant part of our total operations.

“We believe we have taken the right measures to deal with current challenges and will take whatever further measures are necessary should the business environment not improve. Our focus will remain on protecting the business and managing short-term difficulties while remaining committed to our long-term strategy. Our financial position remains strong and we will continue to invest in the future. Our core strengths remain the same as ever: a superb team, a strong international network, exceptional standards of customer service, a strong relationship with Air China and our position in Hong Kong. These will help to ensure the success of the Cathay Pacific Group in the long term.”

Copyright Photo: Keith Burton. The company is now accelerating the retirement of the Boeing 747-400 fleet. Boeing 747-467 B-HOO (msn 23814) climbs away from London (Heathrow).

Cathay Pacific Airways:

Atlas Air Worldwide Holdings reports 4Q adjusted net income is up 23% to $48.7 million, 2012 net income rose 17% to $127.0 million

Atlas Air Worldwide Holdings, Inc. (Atlas Air and Polar Air Cargo) (New York) today announced a 23% increase in adjusted net income attributable to common stockholders for the fourth quarter of 2012, with adjusted net income rising to $48.7 million, or $1.83 per diluted share. For the full year, adjusted net income attributable to common stockholders rose 17% to $127.0 million, or $4.78 per share.

On a reported basis, net income attributable to common stockholders totaled $52.4 million, or $1.97 per diluted share, in the fourth quarter, and $129.9 million, or $4.89 per diluted share, for the year.

Adjusted earnings exclude net gains in the fourth quarter and for the full year that primarily reflected an insurance gain of $0.15 per diluted share related to flood damage at an aircraft parts warehouse during Superstorm Sandy.

Revenues grew 17% to $452.8 million in the fourth quarter and 18% to $1.65 billion for the year. Free cash flow for 2012 totaled $208.5 million.

Fourth-Quarter Results

Revenue and profitability growth in our core ACMI business during the fourth quarter were driven by our new 747-8Fs, which began to enter service late in the fourth quarter of 2011. Volume growth was primarily due to the continued ramp up of CMI flying for Boeing and DHL Express. ACMI results during the period benefited from higher rates per block hour and lower maintenance expense for our 747-8Fs, partially offset by the redeployment of 747-400 aircraft to other business segments. ACMI customers flew 4.3% above contractual minimums during the quarter.

In AMC Charter, strong growth in our passenger service and rate premiums earned on flying more efficient 747-400 cargo aircraft in the fourth quarter of 2012 compared with less efficient 747-200 aircraft in 2011 partially offset a 48% reduction in cargo block hours and a reduction in the number of one-way AMC missions.

In Commercial Charter, increased revenues and volumes reflected the deployment of 747-400 cargo aircraft in lieu of retired 747-200s, the deployment of an additional 747-400 cargo aircraft to support increased demand in South America, and 747-400 aircraft from ACMI during remarketing periods. Commercial Charter results were affected by a reduction in yields driven by softer charter-market conditions compared with the fourth quarter of 2011, and a reduction in return legs due to fewer one-way AMC Charter missions.

Fourth-quarter results in each segment were affected by increased crew costs, with AMC Charter and Commercial Charter incurring other volume-driven operating expenses and higher aircraft ownership costs related to the deployment of 747-400 aircraft in lieu of 747-200 aircraft.

Unallocated income and expenses during the quarter reflected a pretax insurance gain of $6.3 million (equivalent to $0.15 per fully diluted share on an after-tax basis) related to flood damage incurred at an aircraft parts warehouse during Superstorm Sandy.

Income Taxes

Adjusted and reported earnings for the fourth quarter of 2012 included an effective income tax rate of 35.9%, reflecting an adjustment to reserves related to U.S. federal income tax benefits claimed in prior periods that totaled $0.06 per fully diluted share.

Adjusted and reported earnings for the full year of 2012 included an effective income tax rate of 36.8%, relating to the adjustment to U.S. federal income tax reserves and the settlement of income tax examinations in Hong Kong that totaled $0.09 per fully diluted share.

Cash, Cash Equivalents and Short-Term Investments

At December 31, 2012, our cash, cash equivalents and short-term investments totaled $419.9 million, compared with $195.2 million at December 31, 2011.

The growth in cash, cash equivalents and short-term investments in 2012 was primarily driven by an increase in cash provided by operating and financing activities, partially offset by an increase in cash used for investing activities.

Net cash used for investing activities in 2012 primarily related to the purchase of four 747-8F aircraft for our ACMI operations, a third 767-300ER passenger aircraft for our AMC Charter operations, and a 737-300 cargo aircraft for our Dry Leasing business.

Net cash provided by financing activities primarily reflected proceeds from the issuance of debt in connection with the delivery of the four 747-8Fs. These proceeds were partially offset by payments on debt obligations and debt issuance costs. Both the proceeds from our issuance of debt and the payments on our debt obligations reflect the refinancing of a total of $571 million of floating-rate term loans with fixed-rate notes issued in the capital markets.

Atlas Air Worldwide is the parent company of Atlas Air, Inc. (Atlas Air) and Titan Aviation Leasing (Titan), and is the majority shareholder of Polar Air Cargo Worldwide, Inc. (Polar Air Cargo). Through Atlas and Polar, Atlas Air Worldwide operates the world’s largest fleet of Boeing 747 freighter aircraft.

Top Copyright Photo: Michael B. Ing. Boeing 747-47UF N492MC (msn 29253) climbs away from Bangkok while operating for QANTAS Airways.

Atlas Air:

Polar Air Cargo:

Bottom Copyright Photo: Michael B. Ing. Boeing 747-47UF N416MC (msn 32838) of Polar Air Cargo in DHL colors climbs away from Los Angeles International Airport.

Delta wins Seattle/Tacoma-Tokyo Haneda rights

Delta Air Lines (Atlanta) has received final approval from the U.S. Department of Transportation (DOT) to operate new nonstop service between Seattle/Tacoma and Tokyo International Airport, also known as Haneda Airport. The new flights will begin on June 1, 2013.

The Haneda flight adds to Delta’s growing Asian gateway in Seattle/Tacoma. In addition to Tokyo-Haneda, Delta will begin new service to Shanghai on June 17, and also operates flights to Beijing, Tokyo-Narita and Osaka, Japan.

Seattle is the largest West Coast city without nonstop service to Haneda, which is the preferred Tokyo airport for many business travelers due to its proximity to the city’s central business district.

The new Haneda flight will complement Delta’s nonstop flight between Seattle/Tacoma and Tokyo-Narita, which will be expanded and upgraded to Boeing 747-400 service on June 1. Delta’s Boeing 747-400 fleet was recently retrofitted with new interiors featuring full flat-bed seats in BusinessElite, Delta’s popular Economy Comfort seating and in-flight entertainment in every seat throughout the aircraft.

Once the Boeing 747-400 is deployed on the Seattle/Tacoma-Narita route, all of Delta’s trans-Pacific flights will feature full flat-bed seats in BusinessElite as well as Economy Comfort and individual in-flight entertainment throughout the aircraft.

In addition to its Asian gateway, Delta operates nonstop service to Paris and Amsterdam from Seattle/Tacoma. By next summer the airline will operate more than 40 daily flights to 15 destinations worldwide from Seattle.

Delta’s international growth in Seattle/Tacoma is possible because of its partnership with Alaska Airlines (Seattle/Tacoma), which operates a domestic hub at Seattle-Tacoma International Airport. Customers of both carriers enjoy access to an expanded network under a major codesharing agreement, as well as reciprocal frequent flier benefits and airport lounge access. The new Tokyo-Haneda flight will benefit from easy connections to 55 U.S. cities on Delta and Alaska’s domestic networks.

Delta Air Lines:

UPS reports record earnings per share

UPS (United Parcel Service) (UPS Airlines) (Atlanta and Louisville) announced record 2012 fourth quarter and full year adjusted diluted earnings per share of $1.32 and $4.53 respectively, with the U.S. Domestic segment leading the way. The company generated annual free cash flow of approximately $5.4 billion, a testament to operations execution and the emphasis UPS places on capital efficiency. UPS estimates that Hurricane Sandy reduced earnings per share by approximately $0.05.

UPS recorded a fourth quarter mark-to-market, non-cash, after-tax charge of $3.0 billion for its company-sponsored pension and post-retirement benefit plans. Although the plans exceeded their expected rate of return, these incremental gains were more than offset by a 120 basis point decline in year-end discount rates. As a result, on a GAAP basis, diluted earnings per share for the quarter fell to a loss of $1.83. For the full year, reported diluted earnings per share were $0.83. This adjustment does not affect cash flow, required pension funding or benefits paid to plan participants.

UPS expects full year earnings per share to be within a range of $4.80 – $5.06, an increase of 6-to-12% compared to 2012 adjusted results. The company also raised guidance for 2013 share repurchases from $1.5 billion to $4.0 billion.

Adjusted

Consolidated Results

4Q 2012

4Q 2011

Revenue

$14.57 B

$14.17 B

Operating profit (loss)

($2.78 B

)

$2.05 B

$1.20 B

$2.02 B

Operating margin

(19.1 %

)

14.1 %

8.4 %

14.3 %

Average volume per day

18.8 M

18.3 M

Diluted earnings (loss) per share

($1.83

)

$1.32

$0.74

$1.28

During the year, UPS delivered more than four billion packages. For the quarter, it delivered 18.8 million pieces per day, an increase of 2.9% over the prior-year period.

Overall consumer spending for holiday shopping fell slightly below expectations, however; UPS still delivered more than 500 million packages, including almost 28 million on its peak day, both new records.

Cash Position

For the year ending Dec. 31, UPS generated $5.4 billion in free cash flow after capital expenditures of $2.2 billion. UPS repurchased 21.8 million shares for approximately $1.6 billion and paid dividends totaling $2.1 billion, up 9.6% per share.

Copyright Photo: Joe G. Walker. Boeing 747-45E (BCF) N579UP (msn 26062) climbs away from Anchorage International Airport (ANC).

UPS-United Parcel Service:

United Airlines launches satellite based Wi-Fi service on its first international wide body aircraft

United Airlines (Chicago) has introduced onboard satellite-based Wi-Fi internet connectivity on the first of its international widebody aircraft, becoming the first U.S.-based international carrier to offer customers the ability to stay connected while traveling on long-haul overseas routes.

The aircraft, a Boeing 747-400 outfitted with Panasonic Avionics Corporation’s Ku-band satellite technology, serves trans-Atlantic and trans-Pacific routes.

Additionally, United has outfitted Ku-band satellite Wi-Fi on two Airbus A319 aircraft serving domestic routes, offering customers faster inflight Internet service than air-to-ground technology (ATG). The company expects to complete installation of satellite-based Wi-Fi on 300 mainline aircraft by the end of this year.

“Satellite-based Wi-Fi service enables us to better serve our customers and offer them more of what they want in a global airline,” said Jim Compton, vice chairman and chief revenue officer at United. “With this new service, we continue to build the airline that customers want to fly.”

Customers have the choice of two speeds: Standard, priced initially between $3.99 and $14.99 depending on the duration of flight, and Accelerated, priced initially between $5.99 and $19.99 and offering faster download speeds than Standard.

United will install satellite-based Wi-Fi on Airbus A319 and A320 aircraft, and on Boeing 737, 747, 757, 767, 777 and 787 aircraft. Customers will be able to use their wireless devices such as laptops, smart phones and tablets onboard those aircraft to connect with internet service using the in-flight hotspot.

United is upgrading its fleet with more than $550 million in additional onboard improvements, including:

Offering the world’s largest fleet of aircraft with flat-bed seats, with more than 175 aircraft with 180-degree flat beds in premium cabins once the airline completes the installation in the second quarter.
Expanding extra-legroom Economy Plus seating to provide the most such seating of any U.S. carrier.
Revamping the transcontinental “p.s.” fleet of airplanes that fly between New York Kennedy and Los Angeles and San Francisco, offering an improved premium cabin with fully flat beds, Wi-Fi Internet service, and personal on-demand entertainment at every seat.
Improving inflight entertainment options with streaming video content on the Boeing 747-400 fleet.
Retrofitting overhead bins on 152 Airbus aircraft, allowing for significantly greater storage of carry-on baggage.

United Airlines: