Tag Archives: Boeing 747400

UPS to drop its bid to acquire TNT Express due to expected EC disapproval

United Parcel Service Inc (UPS) (UPS Airlines) (Atlanta and Louisville) will drop its bid to acquire TNT Express N.V. (Hoofddorp) because it now expects the European Commission (EC) to deny the acquisition.

On March 19, 2012, UPS announced its intention to acquire TNT Express for $6.7 billion. On September 5, 2012, UPS announced it expected to close the deal in early 2013 subject to EC approval.

UPS will pay TNT a termination fee in the amount of EUR 200 million.

TNT Airways (Liege) is a subsidiary of TNT Express. TNT is now expected to remain independent.

UPS issued the following statement:

United Parcel Service, Inc. announced today (January 14) the European Commission (EC) has informed UPS and TNT Express that it is working on a decision to prohibit the proposed acquisition of TNT Express.

UPS submitted an initial remedies proposal on November 29, 2012 and subsequently revised the proposal twice. UPS began the competitive review process with the EC in March 2012.

Scott Davis, UPS Chairman and CEO said, “We are extremely disappointed with the EC’s position. We proposed significant and tangible remedies designed to address the EC’s concerns with the transaction. The combined company would have been transformative for the logistics industry, bringing meaningful benefits to consumers and customers around the world, while supporting growth in Europe in particular.”

Upon prohibition by the EC, the Offer Condition relating to EU Competition Clearance will not be fulfilled and UPS will pay TNT a termination fee in the amount of EUR 200 million and will withdraw the Offer.

Further announcements will be made once the European Commission has issued its formal decision. The decision is expected to be adopted formally in the coming weeks.

Top Copyright Photo: Michael B. Ing. Boeing 747-44AF N572UP (msn 35669) climbs away from Anchorage International Airport (ANC).

UPS:

TNT:

Bottom Copyright Photo: Rainer Bexten. Southern Air’s Boeing 777-FHT N778SA (msn 39286) arrives at the Liege, Belgium sorting facility.

China Airlines retires its Boeing 747-400 “Dynamic Blue”

China Airlines (Taipei) has repainted its Boeing 747-409 B-18210 (msn 33734) which was painted in the promotional Boeing 787 Dreamliner livery. China Airlines, which called the special aircraft “Dynamic Blue”, has repainted the aircraft in its regular colors.

China Airlines:

China Airlines to lease four new Boeing 777-300 ERs from GECAS, orders six from Boeing

GE Capital Aviation Services Limited (GECAS), the commercial aircraft leasing and financing arm of GE, announced today it will lease four new Boeing 777-300 ERs to China Airlines (Taipei). This is a new aircraft type for CAL.

The first aircraft is scheduled for delivery in 2014 to modernize the airline’s long-haul wide-body fleet. All four leased aircraft come from GECAS’ existing order book with Boeing.

In addition, on December 21, Boeing and China Airlines announced an order for six 777-300 ERs (Extended Range) airplanes. The order is valued at approximately $2 billion at list prices.

Taiwan’s flag carrier is in the midst of renewing its long-haul fleet and plans to operate the new 777-300 ERs on new trans-Pacific flights between North America and Asia.

In November 2011, GECAS announced it will lease four new Airbus A330-300 aircraft to China Airlines. Delivery of the first two aircraft from GECAS’ existing order book with Airbus was in October and December 2012.

In addition to the four A330-300s and four 777-300 ERs scheduled for delivery in the next three years, GECAS currently leases eight Embraer ERJ 190s to Mandarin Airlines (Taipei), a subsidiary of China Airlines.

Founded in 1959, China Airlines is a full-service flag carrier of Taiwan, operating a fleet of 72 regional and international aircraft to over 112 destinations in 28 countries across Asia and to Oceania, Europe and the U.S.

Copyright Photo: Stephen Tornblom. The new Triple Sevens will partially replace the older Boeing 747-400s. Boeing 747-409 N168CL (msn 29906) taxies across the apron at New York’s JFK International Airport.

China Airlines:

Delta Air Lines and Virgin Atlantic Airways to form a strategic alliance, Delta to buy 49% of Virgin Atlantic from Singapore Airlines

Delta Air Lines (Atlanta) and Virgin Atlantic Airways Ltd. (London) have reached an agreement for a new joint venture that will create an expanded trans-Atlantic network and enhance competition between the U.K. and North America, offering greater benefits for customers traveling on those routes.

As part of this joint venture agreement, Delta will invest $360 million in Virgin Atlantic, acquiring a 49 percent stake currently held by Singapore Airlines. Virgin Group and Sir Richard Branson will retain the majority 51 percent stake and Virgin Atlantic Airways will retain its brand and operating certificate.

Highlights of the agreement include:

A fully integrated joint venture that will operate on a “metal neutral” basis with both airlines sharing the costs and revenues from all joint venture flights.
A combined trans-Atlantic network between the United Kingdom and North America with 31 peak-day round-trip flights.
Enhanced benefits for customers including cooperation on services between New York and London, with a combined total of nine daily round-trip flights from London-Heathrow to John F. Kennedy International Airport and Newark Liberty International Airport.
Reciprocal frequent flyer benefits.
Shared access to Delta Sky Club and Virgin Atlantic Clubhouse airport lounges for elite passengers.

The airlines will file an application with the U.S. Department of Transportation for antitrust immunity, which will allow a closer relationship and coordination on schedules and operations. The transaction also will be reviewed by the U.S. Department of Justice and the European Union’s competition regulator and other relevant authorities. The share purchase and the joint venture are expected to be implemented by the end of 2013.

“Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe,” said Delta CEO Richard Anderson. “By combining the strengths of our two companies in a joint venture, we can provide customers with a seamless network between North America and the U.K., and continue building a better airline for our customers, employees and shareholders.”

Steve Ridgway, Virgin Atlantic Chief Executive, added: “Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service. This joint venture will deliver much more effective competition at Heathrow.

“Both airlines are confident that the Department of Transportation will be as convinced as we are of the extensive consumer benefits arising from this joint venture, with expedited approval being granted by the end of 2013. The trans-Atlantic market is Virgin Atlantic’s heartland – it’s where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA.”

Virgin Atlantic President, Sir Richard Branson, commented: “This is an exciting day in Virgin Atlantic history. It signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business. I truly look forward to the possibilities our partnership with Delta will offer. We have always been known for our innovation and service and have punched above our weight for 28 years. That is why our customers love us so much. We will retain that independent spirit but move forward in a strengthened partnership with Delta.”

Delta and Virgin Atlantic customers will be able to earn and redeem miles across Delta’s SkyMiles and Virgin Atlantic’s FlyingClub frequent flyer programs. Premium customers also will have reciprocal access to the Delta Sky Club and Virgin Atlantic Clubhouse airport lounges. Full details will be announced as services become available.

The partnership allows both carriers to offer a greatly expanded network at Heathrow and to overcome slot constraints, which have limited the growth and competitive capability of both airlines. The two carriers will operate a total of 31 peak-day round-trip flights between the U.K. and North America, 23 of which operate at London-Heathrow. The enlarged network will benefit customers of both carriers by providing greater access to a broader network, improved connectivity and convenient booking options.

As part of a $3 billion investment in enhanced global products, services and airport facilities, all of Delta’s flights between the U.S. and London-Heathrow feature full flat-bed seats offering direct aisle access in the BusinessElite cabin. These flights also offer Delta’s popular Economy Comfort seating in the forward section of the economy cabin. Economy Comfort offers four additional inches of legroom and 50 percent more recline compared to standard economy seats. All cabins offer in-seat audio and video on demand with a broad range of in-flight entertainment options. Delta also will begin introducing in-flight WiFi service on international flights beginning in 2013.

Virgin Atlantic has recently completed a £150m upgrade program. A new Upper Class cabin has been introduced across its Airbus A330 aircraft, which features the longest fully flat bed in the sky. This is complemented by a redesigned onboard bar and new Clubhouses at both JFK and Newark airports. The airline’s Boeing 747 leisure fleet has been completely refitted and features onboard connectivity and VERA Touch – Virgin Atlantic’s award-winning touch screen in-flight entertainment system – offering passengers hours of entertainment at their fingertips.

Top Copyright Photo: Michael B. Ing. Boeing 747-451 N668US (msn 24223) completes its final approach into Tokyo (Narita).

Delta Air Lines:

Virgin Atlantic Airways:

Bottom Copyright Photo: Keith Burton. Airbus A340-642 G-VWEB (msn 787) arrives at the London (Heathrow) hub.

Delta Air Lines is in talks to purchase Singapore Airlines’ 49% share of Virgin Atlantic Airways

Delta Air Lines (Atlanta) is reportedly in discussions with Singapore Airlines (Singapore) to acquire their 49 percent share in Virgin Atlantic Airways (London). If successful, Delta’s European partners, namely Air France-KLM, could then buy some of Sir Richard Branson’s shares to take control of the UK company according to this report by the Financial Times.

Read the full report: CLICK HERE

Top Copyright Photo: Michael B. Ing. If completed, it would be a bold move by SkyTeam to further increase its presence at slot-controlled Heathrow Airport in London against the Oneworld alliance. Boeing 737-832 N3755D (msn 29627) climbs away from Los Angeles International Airport.

Delta Air Lines:

Virgin Atlantic Airways:

Bottom Copyright Photo: Brian McDonough. Is the Virgin Atlantic brand in danger of becoming history? Boeing 747-41R G-VROC (msn 32746) arrives at New York (JFK) in the updated 2010 motif.

UPS and TNT Express send their merger “remedies” paperwork to the European Commission

United Parcel Service, Inc. (Atlanta and Louisville) and TNT Express N.V. (Hoofddorp) (TNT Airways) have announced, in line with Dutch disclosure requirements, that remedies have been submitted to obtain competition clearance from the European Commission (EC) for the acquisition of TNT Express by UPS. The offer of remedies does not change the terms and conditions of the Offer by UPS for TNT Express.

The proposed remedies aim to address the EC’s concerns regarding the competitive effects of the intended merger on the international express small package market in Europe. UPS and TNT Express continue to be fully committed to the merger and are working closely with the EC in order to gain competition clearance allowing completion of the transaction in early 2013. As part of the approval process, the EC will market-test the remedies on a confidential basis.

The proposed remedies comprise the sale of business activities and assets in combination with granting access to air capabilities. Eligible buyers of these activities will have to ensure the long-term viability of the divested activities and continuity of customer service.

No further details of the confidential discussions or proposed remedies will be revealed at this stage. The discussions are ongoing, which means that the offered remedies may be subject to change.

UPS and TNT Express believe their merger will help create a more efficient logistics market, thereby improving the competitiveness of Europe and the solutions offered to businesses and consumers. Customers and consumers will benefit from a broader portfolio of services and better global access, along with lower supply-chain costs overall and improved service levels in terms of timing and reliability.

UPS and TNT Express value their employees highly. Both UPS and TNT Express will follow the required consultation and advice procedures with their works councils with regard to these remedies.

In accordance with EU Merger Regulation, the timing of the remedies submission extends the EC’s review period by 15 business days to February 5, 2013.

Copyright Photo: Michael B. Ing. UPS’ Boeing 747-44AF N571UP (msn 35668) climbs away from Anchorage International Airport.

UPS-United Parcel Service:

TNT Airways:

Delta Air Lines completes the flat-bed installations on its Boeing 747-400s

Delta Air Lines (Atlanta) has completed the installation of full flat-bed seats in the BusinessElite® cabin of all Boeing 747-400 type aircraft.

The last of 16 Boeing 747 aircraft, each with 48 BusinessElite seats, has been retrofitted with full flat-bed seats. It entered scheduled service this week on a flight between Singapore and Tokyo’s Narita airport, before making its way to Atlanta.

Delta previously completed installation of the full flat-bed modification on its Boeing 777 and 767-400 ER aircraft types. To date, 13 767-300 ER aircraft have received the modification and three more will be complete by month’s end. In total, approximately 50 percent of Delta’s widebody international fleet has received the upgrade. In addition to flat-bed seats in BusinessElite, the cabin overhaul includes upgraded seats in the Economy cabin with personal entertainment at every seat. The airline’s entire widebody international fleet of more than 140 aircraft will receive the full aircraft modification in both cabins by the middle of 2014.

Delta recently announced plans to install full flat-bed seats on its transcontinental flights between New York – JFK and Los Angeles, San Francisco and Seattle.

This autumn, Delta announced plans to add Wi-Fi to its entire international fleet. The airline is already the largest operator of Wi-Fi-equipped aircraft on more than 3,000 flights serving more than 400,000 customers every day. When complete, Delta will offer Wi-Fi on more than 950 aircraft, from 747s to two-class regional jets.

Delta Air Lines:

Nippon Cargo Airlines is coming to Dallas/Fort Worth

Nippon Cargo Airlines-NCA (Tokyo) has announced it will launch new freighter flights connecting Tokyo’s Narita International Airport and DFW International Airport, starting November 5. Nippon Cargo’s twice weekly flights will be the first direct freighter connections for the Dallas/Fort Worth area into Japan, and will bolster DFW cargo lift capacity to Asia while also providing a new connection to a strategically important destination.

Nippon Cargo Airlines will operate the route from Tokyo Narita to Chicago O’Hare, then to DFW Airport, Anchorage, Alaska, and then back to Narita. Nippon Cargo Airlines will fly 747-400 aircraft on the route, and the carrier ultimately plans to phase-in 747-8’s, the most fuel-efficient planes in the industry.

Copyright Photo: Michael B. Ing. Boeing 747-481F JA04KZ (msn 34283) in the special “NCA Green Freighter” scheme climbs majestically away from Anchorage International Airport.

NCA-Nippon Cargo Airlines:

Delta reports a $768 million net profit in the third quarter, excluding special items

Delta Air Lines (Atlanta) today reported:

net income, excluding special items¹, for the September 2012 quarter was $768 million, or $0.90 per diluted share.
Delta’s September 2012 quarter GAAP net income was $1.0 billion, or $1.23 per diluted share, including mark-to-market gains on open fuel hedges and other special items.
Delta’s unit revenues were up 3 percent for the quarter and the company has produced a unit revenue premium to the industry for eighteen consecutive months.
Results included $174 million in profit sharing expense, for a total of $309 million year to date, in recognition of Delta employees’ efforts toward the company’s financial targets. In addition, Delta people have received $67 million in Shared Rewards in 2012 for hitting the company’s operational and customer service targets.
Delta ended the September 2012 quarter with $5.1 billion in unrestricted liquidity and adjusted net debt of $11.9 billion.

Revenue Environment

Delta’s operating revenue grew $107 million, or 1 percent, on 1.5 percent lower capacity in the September 2012 quarter compared to the September 2011 quarter. Load factor for the quarter increased 0.3 points year over year to 86.4 percent.

Passenger revenue increased 1 percent, or $124 million, compared to the prior year period. Passenger unit revenue (PRASM) increased 3 percent, driven by a 3 percent improvement in yield.
Cargo revenue decreased 5 percent, or $14 million, with lower cargo yields partially offset by higher volumes.
Other revenue decreased $3 million as lower third-party maintenance revenues were partially offset by higher codeshare revenue.

Comparisons of revenue-related statistics are as follows:

			Increase (Decrease)
			3Q12 versus 3Q11

Passenger Revenue		3Q12 ($M)	Change YOY	Unit Revenue	Yield	Capacity
	Domestic	$ 3,690	4%	3%	4%	1%
	Atlantic	1,751	(2)%	3%	2%	(5)%
	Pacific	1,108	5%	6%	3%	(1)%
	Latin America	468	3%	-%	(3)%	3%
	Total mainline	7,017	2%	3%	3%	(1)%
	Regional	1,675	(2)%	6%	6%	(8)%
	Consolidated	$ 8,692	1%	3%	3%	(2)%

“Our solid revenue performance reflects the benefits of capacity discipline, strong operational performance and the investments we have made in our products and service,” said Ed Bastian, Delta’s president. “We expect our revenue performance to benefit from our continued capacity discipline and further corporate travel gains and we are forecasting our October unit revenues to increase 4 – 5% year over year.”

Fuel

Excluding mark-to-market adjustments, Delta’s average fuel price² was $3.14 per gallon for the September quarter, which includes 3 cents per gallon in settled losses from its fuel hedging program. On a GAAP basis, which includes $440 million of mark-to-market gains on out of period hedges, the company’s average fuel price was $2.71 per gallon.

During the September quarter, jet fuel production began at Delta’s wholly-owned Trainer Refinery and the company expects the plant to be fully operational in the December quarter. For the December quarter, Delta expects Trainer’s production to generate a contribution of breakeven to $25 million.

Non-Fuel Cost Performance

Consolidated unit cost (CASM³), excluding fuel expense, profit sharing and special items, was 5.6 percent higher in the September 2012 quarter on a year-over-year basis, driven by the impact of capacity reductions, higher maintenance expense, wage increases and service investments. GAAP consolidated CASM decreased 2 percent primarily due to mark-to-market gains on open fuel hedges.

“With consistent investment in the business, our non-fuel costs have grown in the past few quarters and we expect that trend to continue into the first half of next year,” said Paul Jacobson, Delta’s chief financial officer. “However, we are in the process of implementing a $1 billion program of structural initiatives that we anticipate will generate significant savings in the second half of 2013, while maintaining the high quality product, network and operation we have built.”

Cash Flow and Liquidity

As of September 30, 2012, Delta had $5.1 billion in unrestricted liquidity, including $3.2 billion in cash and short-term investments and $1.9 billion in undrawn revolving credit facilities.

Operating cash flow during the September 2012 quarter was $545 million, driven by the company’s profitability, which was offset by the normal seasonal decline in advance ticket sales. Free cash flow for the September 2012 quarter was $120 million.

Capital expenditures during the quarter were $425 million, including $275 million for fleet, including advance payments for 737-900ERs, induction costs for MD-90s and interior modifications to Delta’s international fleet.

During the September quarter, Delta paid $270 million in net debt maturities and capital lease obligations. At September 30, the company’s adjusted net debt was $11.9 billion, a reduction of $5 billion since the end of 2009.

Subsequent to the end of the quarter, Delta refinanced $1.7 billion in debt and undrawn revolving credit facilities secured by the company’s Pacific routes and slots. As a result of this transaction, the company has maintained its revolving credit capacity and lowered the interest rate. Delta expects the transaction will generate more than $30 million in annual interest expense savings.

December 2012 Quarter Guidance

Delta’s projections for the December 2012 quarter are below.

	4Q 2012 Forecast

Average fuel price, including taxes and settled hedges	$ 3.15 – $3.20
Operating margin	4 – 6%
Capital expenditures	$450 – 550 million
Total liquidity at end of period	$ 5.2 billion


	4Q 2012 Forecast (compared to 4Q 2011)

Consolidated unit costs – excluding fuel expense and profit sharing	Up 5 – 7%
System capacity	Down 1 – 3%
Domestic	Down 1 – 3%
International	Down 2 – 4%

Special Items

Delta recorded special items totaling a $279 million gain in the September 2012 quarter, including:

a $440 million gain on mark-to-market adjustments on fuel hedges settling in future periods;
a $39 million gain associated with the exchange of slots at New York-LaGuardia and Washington-Reagan National;
a $12 million loss on extinguishment of debt;
a $66 million charge for severance and related costs; and
a $122 million charge for facilities, fleet and other, including charges resulting from the closure of Comair.

Delta recorded special items totaling a $216 million charge in the September 2011 quarter, primarily related to mark to market adjustments for open fuel hedges.

Notes:

(1) Note A to the attached Consolidated Statements of Operations provides a reconciliation of non-GAAP financial measures used in this release and provides the reasons management uses those measures.

(2) Average fuel price per gallon: Delta’s September 2012 quarter average fuel price of $3.14 per gallon reflects the consolidated cost per gallon for mainline and regional operations, including contract carrier operations, and includes the impact of fuel hedge contracts with original maturity dates in the September 2012 quarter. Settled hedge losses for the quarter were $26 million, or 3 cents per gallon. On a GAAP basis, fuel price includes $440 million in fuel hedge mark-to-market adjustments recorded in periods other than the settlement period.

(3) CASM – Ex: Delta excludes from consolidated unit cost ancillary businesses which are not related to the generation of a seat mile, including aircraft maintenance and staffing services which Delta provides to third parties and Delta’s vacation wholesale operations (MLT). The amounts excluded were $214 million and $232 million for the September 2012 quarter and September 2011 quarter, respectively.

Copyright Photo: Tony Storck. Boeing 747-451 N669US (msn 24224) lands at Baltimore/Washington International Thurgood Marshall Airport (BWI).

Delta Air Lines:

Malaysia Airlines is planning to retire the last passenger Boeing 747-400 in February 2013

Malaysia Airlines (Kuala Lumpur) is planning to retire the last Boeing 747-400 from revenue passenger service in February 2013 according to a report by Airline Route.

Copyright Photo: Antony J. Best. Although now repainted and retired, Boeing 747-4H6 9M-MPB (msn 25699) once wore this colorful red Hibiscus livery.

Malaysia Airlines: