Tag Archives: Boeing

Malaysia Airlines to join Oneworld on February 1, 2013

Malaysia Airlines (Kuala Lumpur) will join the Oneworld alliance on February 1, 2013. Oneworld issued the following statement:

Malaysia Airlines will become a full member of oneworld^®with effect from Friday 1 February 2013, adding one of commercial aviation’s most frequent award winners to the world’s leading quality airline alliance.

The national airline of Malaysia received clearance to board oneworld after successfully completing a thorough review of its readiness conducted by Qantas, which is sponsoring its entry into the alliance, with theoneworld central team.

While its alliance implementation programme is on track for completion in the coming weeks, its addition tooneworld is being held until the beginning of 2013 to avoid the end-of-year holiday season and for other administrative reasons.

Malaysia Airlines will start offering oneworld’s full range of services and benefits from 1 February 2013 – becoming the alliance’s second airline operating the Airbus A380, after its oneworld sponsor Qantas.

From then, the 2 million members of Malaysia Airlines’ Enrich loyalty programme will, in effect, have their frequent flyer privileges extended to whenever they fly with any oneworld member airline – airberlin, American Airlines, British Airways, Cathay Pacific Airways, Finnair, Iberia, Japan Airlines, LAN Airlines, Qantas, Royal Jordanian, S7 Airlines and some 25 affiliated airlines. This includes earning and redeeming mileage awards and earning tier status points when flying with all these airlines.

Enrich Platinum cardholders will have Emerald status in the oneworld program. Enrich Gold will be equivalent to oneworld Sapphire and Enrich Silver will be oneworld Ruby.

From 1 February, Enrich Platinum and Gold members will be able to use any of the 550 airport lounges worldwide offered by oneworld member airlines whenever they fly with any of the alliance’s carriers. Malaysia Airlines’ First and Business Class passengers will also be able to use oneworld partner airline lounges. (See notes)

Also from 1 February, the 125 million members of the established oneworld airlines’ frequent flyer programmes will be able to earn and redeem awards and tier status points and receive all other oneworld benefits on Malaysia Airlines. (See notes)

Malaysia Airlines is already participating in Global Explorer, the round-the-world fare offered by all oneworld members and various airlines that are not part of the alliance. From 1 February, Malaysia Airlines’ network – serving more than 60 destinations in nearly 30 countries – will be covered by oneworld’s full and extensive range of alliance fares and sales products.

Malaysia Airlines will substantially expand the alliance’s network in South East Asia, where it will add 14 destinations and one country – Brunei – to the oneworld map. More significantly, it will strengthen the alliance’s connectivity between many key business cities in Asia and other parts of the world.

Its addition will expand oneworld’s global coverage to some 840 destinations in 156 countries, served by some 9,000 departures a day operated by a combined fleet of some 2,500 aircraft, carrying nearly 340 million passengers a year, with annual revenues of US$ 110 billion. Add oneworld’s other members elect – Qatar Airways and Sri Lankan Airlines – and the alliance network reaches to 856 destinations in 159 countries.

Currently three of oneworld’s active member airlines serve three points in Malaysia, with Cathay Pacific, Japan Airlines and Royal Jordanian flying to Kuala Lumpur, Cathay Pacific operating to Penang and its Dragonair regional affiliate to Kota Kinabalu.

Malaysia Airlines’ oneworld implementation programme has represented one of the most extensive projects in the airline’s history, with working groups covering some 20 streams of activity. Projects are nearing completion to bring its various internal processes and procedures into line with the alliance’s requirements, and extensive employee training and communications programmes are now underway at Malaysia Airlines and the alliance’s existing members, to ensure they are ready to provide oneworld’s customer services and benefits across the expanded alliance from 1 February.

oneworld CEO Bruce Ashby said: “Malaysia Airlines is an ideal candidate for oneworld, with its world-class reputation for customer service mirroring oneworld’s own focus. Its Kuala Lumpur home will provide our customers with another of the world’s best airports, geographically well placed between our existing hubs. This will greatly enhance oneworld’s offering throughout one of the world’s fastest growing region for air travel demand.”

Malaysia Airlines Group Chief Executive Ahmad Jauhari Yahya added: “oneworld membership represents one of the most significant achievements to date for Malaysia Airlines. It will strengthen our competitive position considerably, enabling our customers to enjoy a truly global network together with our partners who include some of the best and biggest airlines in the world, while enabling us also to tap into all the financial benefits that come from being part of a global alliance, through additional passenger feed and cost reduction opportunities. We are very pleased and proud to join what is clearly the world’s top quality airline grouping on 1 February.”

Copyright Photo: Nick Dean. Brand new Boeing 737-8H6 9M-MLQ (msn 39327) lands at Paine Field near Everett after a test flight.

Malaysia Airlines:

Frameable Color Prints and Posters:

Blue Panorama Airlines enters into bankruptcy protection and reorganization

Blue Panorama Airlines (Rome-Fiumicino) has entered into the equivalent of Chapter 11 (bankruptcy protection and reorganization). On October 23, the company issued the following statement (translated from Italian):

BLUE PANORAMA AIRLINES TAKES ADVANTAGE OF NEW REGULATORY TOOLS CONTAINED IN THE “ORDER OF DEVELOPMENT” TO INCREASE ITS COMPETITIVENESS ‘

Blue Panorama Airlines S.p.A. announces that it has applied for admission to the composition procedure in continuity under the Development Decree, according to the U.S. model of highly effective better known as “Chapter 11”.
Blue Panorama has decided to use this tool accessible to even a few weeks to Italian companies to consolidate their financial and capital structure in order to deal in the best position possible to the challenges posed by the current economic environment in the field of aviation and leisure travel. This is to continue to play in this respect the leading role that for over 14 years, is recognized by its customers. The start of the procedure has been notified to ENAC, which provided for the issuance of temporary license pursuant to article 9 of the Regulation 1008/2008.

The objectives that arises Blue Panorama Airlines through this new route are to:

– Continue to offer passengers excellent service, safe and reliable;
– Improve the industrial and commercial efficiency;
– To ensure the normal operation of domestic and international flights;
– Continue to offer competitive air links for the benefit of users;
– Make Blue Panorama Airlines and Blu-express a new benchmark in the sector.

During the reorganization process, Blue Panorama Airlines will carry out normal operations, while maintaining the commitment of its management team and operational. In addition to the consolidation of traditional connections will also be triggered new international services of great interest both outgoing and incoming flows.

Blue Panorama Airlines and Blu-express continue to operate their respective flight schedules, honoring tickets and reservations as usual, and to continue the industrial partnerships with carriers, tour operators and travel agent partners.
The President and founder of the company, Franco Pecci, maintains and increases its commitment to the holding in the firm belief that customers, which have always been the company’s priority will continue to use the Blue Panorama flights and Blu-express for quality service competitive and constantly delivered by the carrier in all years.

Copyright Photo: Lucio Alfieri. The company operates under both the Blue Panorama Airlines and blu-express names and brands. Boeing 737-4K5 EI-CUN (msn 27074) carries both names at Bologna.

Blue Express Airlines:

Frameable Color Prints and Posters:

British Airways launches London Gatwick-Las Vegas flights

British Airways (London) today (October 29) began its second London-Las Vegas service, helping high rollers travel from London Gatwick to the Nevada city.

The three-times-a-week service will be operated by a three-class Boeing 777 offering three cabins: Club World (business class), World Traveller Plus (premium economy) and World Traveller.

Together with the Heathrow service, British Airways will operate 10 flights a week from Las Vegas.

Copyright Photo: Michael B. Ing. Boeing 777-336 ER G-STBF (msn 40543) completes its final approach into London (Heathrow).

British Airways:

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:

United Continental Holdings reports third quarter net income of $520 million excluding special charges, only $6 million with the charges

United Continental Holdings, Inc. (United Airlines) (Chicago) reported third-quarter 2012 net income of $520 million, or $1.35 per diluted share, excluding $514 million of net special charges. Including special charges, UAL reported third-quarter 2012 net income of $6 million, or $0.02 per diluted share.

UAL third-quarter consolidated passenger revenue decreased 2.6 percent year-over-year. Third-quarter consolidated passenger revenue per available seat mile (PRASM) decreased 1.3 percent compared to the same period in 2011.
Consolidated unit costs (CASM) holding fuel rate and profit sharing constant and excluding special charges and third-party business expense increased 2.5 percent year-over-year on a consolidated capacity reduction of 1.4 percent. Third-quarter consolidated CASM increased 6.6 percent year-over-year.
UAL ended the third quarter with $7.2 billion in unrestricted liquidity.

Third-Quarter Revenue and Capacity

For the third quarter of 2012, total revenue was $9.9 billion, a decrease of 2.6 percent year-over-year. Third-quarter consolidated passenger revenue decreased 2.6 percent to $8.8 billion, compared to the same period in 2011.

Consolidated revenue passenger miles (RPMs) decreased 1.5 percent on a consolidated capacity (available seat miles) decrease of 1.4 percent year-over-year for the third quarter, resulting in a third-quarter consolidated load factor of 85.2 percent.

Consolidated yield for the third quarter of 2012 decreased 1.2 percent year-over-year. Third-quarter 2012 consolidated PRASM decreased 1.3 percent compared to the same period in 2011.

Mainline RPMs in the third quarter of 2012 decreased 1.9 percent on a mainline capacity decrease of 1.4 percent year-over-year, resulting in a third-quarter mainline load factor of 85.7 percent. Mainline yield for the third quarter of 2012 decreased 1.5 percent compared to the same period in 2011. Third-quarter 2012 mainline PRASM decreased 2.0 percent year-over-year.

Passenger revenue for the third quarter of 2012 and period-to-period comparisons of related statistics for UAL’s mainline and regional operations are as follows:

	3Q 2012 Passenger Revenue (millions)	Passenger Revenue vs. 3Q 2011	PRASM vs. 3Q 2011	Yield vs. 3Q 2011	Available Seat Miles vs. 3Q 2011

Domestic	$3,325	(5.8%)	(4.2%)	(2.6%)	(1.7%)

Atlantic	1,591	(8.0%)	(4.5%)	(3.7%)	(3.7%)
Pacific	1,450	11.0%	9.9%	7.2%	1.0%
Latin America	627	(6.8%)	(8.3%)	(9.4%)	1.6%
International	3,668	(1.1%)	0.0%	(0.7%)	(1.1%)

Mainline	6,993	(3.4%)	(2.0%)	(1.5%)	(1.4%)
Regional	1,781	0.5%	1.6%	(0.9%)	(1.1%)

Consolidated	$8,774	(2.6%)	(1.3%)	(1.2%)	(1.4%)

Year-over-year cargo and other revenue in the third quarter of 2012 decreased 2.3 percent, or $27 million, to $1.1 billion.

Third-Quarter Costs

Total operating expenses, including special charges, increased $473 million, or 5.1 percent, in the third quarter compared to the same period of 2011. Third-quarter 2012 operating expenses, excluding fuel, profit sharing, special charges and third-party business expense, increased $92 million, or 1.7 percent, year-over-year. Third-party business expense was $55 million in the third quarter.

Both consolidated and mainline CASM, excluding special charges and third-party business expense, increased 2.3 percent in the third quarter of 2012 compared to the same period of 2011. Third-quarter consolidated and mainline CASM, including special charges, increased 6.6 and 7.5 percent year-over-year, respectively.

In the third quarter, consolidated and mainline CASM, excluding special charges and third-party business expense and holding fuel rate and profit sharing constant, increased 2.5 percent and 2.0 percent, respectively, compared to the results for the same period of 2011.

Third-Quarter Liquidity and Return on Invested Capital

UAL ended the third quarter with $7.2 billion in unrestricted liquidity, including $500 million of undrawn commitments under a revolving credit facility. During the third quarter, the company had gross capital expenditures of $412 million. The company made debt and principal payments under capital lease of $487 million including $104 million of prepayments in the third quarter. The company’s return on invested capital for the 12 months ended Sept. 30, 2012, was 9.3 percent, below the company’s goal of a 10 percent return over the business cycle.

Third-Quarter 2012 Events

United recorded a U.S. Department of Transportation domestic on-time arrival rate of 72.4 percent and a system completion factor of 98.6 percent for the quarter. For international flights, United recorded an on-time arrival rate of 71.0 percent. The on-time arrival rates are based on flights arriving within 14 minutes of scheduled arrival time.
On Aug. 2, the company reached an agreement in principle for a joint collective bargaining agreement with the Air Line Pilots Association representing pilots from the company’s United and Continental subsidiaries. Flight attendants from the company’s Continental and Continental Micronesia subsidiaries ratified new labor agreements, and the company began the joint collective bargaining process with the Association of Flight Attendants, which represents all flight attendants. The company and the International Association of Machinists announced that they would engage in expedited joint collective bargaining agreement negotiations for fleet service employees, passenger service employees and certain other work groups. The company is also in the process of commencing joint negotiations with the International Brotherhood of Teamsters, which represents maintenance technicians.
United employees earned cash incentive payments totaling $5 million for exceeding 80 percent domestic on-time arrival performance for the month of September.
United took delivery of its first Boeing 787. United is the first North American carrier to take delivery of the 787, and the aircraft is the first of five new Dreamliners the airline expects to receive this year from its total order for 50 of the aircraft.
United announced routes for its Boeing 787 aircraft, in addition to the previously announced service from its Denver hub to Tokyo Narita, including service between its Houston hub and Lagos, Nigeria, and from its Los Angeles hub to Tokyo Narita and Shanghai. The airline will also operate Dreamliner service from its Houston hub to Amsterdam and London Heathrow on a temporary basis.
The company announced an order to purchase 150 narrowbody Boeing 737 aircraft, including 100 Boeing 737 MAX 9 aircraft and 50 Boeing 737-900ER aircraft for delivery between 2013 and 2022. These new aircraft will allow United to replace older, less-efficient aircraft to reduce fuel and operating costs, enhance the customer experience and maximize network opportunities.
During the quarter, United launched service from Newark to Istanbul. In addition, the carrier launched service from San Francisco to Raleigh-Durham, N.C., from Denver to Shreveport, La., and from Newark to Columbia, S.C. United also announced 12 new routes during the quarter, including flights from its San Francisco hub to Taipei, Taiwan, and Paris, as well as from Washington, D.C. to San Salvador, from Cleveland to Nashville and from Chicago to Monterrey, Mexico, Thunder Bay, Canada, and Nassau, Bahamas.
Emphasizing the importance of service and reliability, United awarded new Ford vehicles to 11 employees for their perfect attendance. Thousands of employees were eligible, and United selected the winners during a random drawing.
United now has 180 airplanes featuring DIRECTV®, offering customers more live television access than any other airline in the world.
United Economy Plus seating is now on 90 percent of United’s entire mainline fleet, and the company continues to install flat-bed seats in premium cabins on its international fleet. United now has 159 aircraft featuring flat-bed seats, more than any other U.S. carrier.
United launched its MileagePlus Digital Media Store, a first-of-its-kind in the airline industry, giving MileagePlus members the opportunity to use miles for music tracks, albums and movies.

United Airlines:

Norwegian to make London Gatwick and Alicante new operational bases

Norwegian Air Shuttle (Norwegian.com) (Oslo) is upgrading its presence at both London (Gatwick) and Alicante to operational bases. The company issued this statement (translated from Norwegian):

In the spring of 2013 Norwegian establishes an additional European base, this time in London. The company will also establish a base in Alicante, Spain. From the base in London, Norwegian will offer a range of direct services to popular destinations around the Mediterranean and in the North. With the new base in England, the company will be well positioned to meet the competition from Asian and European airlines in the long distance market.

The new base is established at London Gatwick, where Norwegian is already a significant player. With more than 100 flights a week, is the company’s largest destination outside the Nordic region. Norwegian see a large passenger potential of several million travelers from London and surrounding areas. The base in Alicante will serve an important part of Norwegian’s Spanish production, similar to the already established bases in Malaga and Las Palmas.

The Company will place three Boeing 737-800 aircraft on the London base of the start-up phase, and then expand to four in the latter part of 2013. The first flights are planned for the summer 2013 program that starts at the beginning of april. Pilots and cabin crew recruited locally.

The background to the establishment is to position Norwegian facing future competition both on short-haul intra-European and long-haul market. Growth and volume necessary to be competitive in today’s international aviation industry. Growth must also be outside the region. While it is expected that the largest growth in traffic and tourist flows in the future come from Asia into Europe. Should we as a Scandinavian airlines remain competitive and at the same time take advantage of the huge traffic growth must now position itself in Europe and Asia, said Norwegian’s CEO Bjorn Kjos.

Norwegian currently has operational bases in Norway, Sweden, Denmark, Finland and Spain. A new base for Norwegian long-distance companies are being established in Bangkok.

On the financial side, the company issued this statement:

Norwegian reported a profit before tax of close to NOK 900 million. This is the company’s best quarterly results ever and an improvement of 187 million compared to the same period last year. New aircraft have saved the company 28 million NOK in fuel costs compared to the same quarter last year. The savings company itself offset by an extra bill of NOK 25 million as a result of a shortage of air traffic controllers in Norwegian Avinor.

In the third quarter, flew Norwegian nearly 5.2 million passengers. That’s 580,000 more than last year and also a new record for the company. The quarter was also characterized by a high load factor of 82 percent. Any passengers flew on average longer which is reflected in passenger traffic (RPK) increased by 17 percent in the third quarter, seat capacity (ASK) increased by 20 percent.

Norwegian Air Shuttle:

Hawaiian reports a third quarter net profit of $40.6 million

Hawaiian Holdings, Inc. (Honolulu), parent company of Hawaiian Airlines, Inc. (Honolulu), reported third quarter 2012 adjusted net income of $40.6 million or $0.77 per diluted share, reflecting economic fuel expense, and GAAP net income for the third quarter of 2012 of $45.5 million, or $0.86 per diluted share.

Financial Highlights:

Adjusted net income, reflecting economic fuel expense, increase of 35.2% year-over-year and GAAP net income increase of 77.6% year-over-year.
Adjusted operating margin of 13.4%, reflecting economic fuel expense, and operating margin of 13.6%
Adjusted net income margin of 7.4%, reflecting economic fuel expense, and net income margin of 8.3%.
Operating cost per available seat mile (CASM) excluding fuel decrease of 6.8%.
Unrestricted cash and cash equivalents of $433.5 million.

The Company reported operating income of $74.9 million in the third quarter of 2012, compared with operating income of $60.9 million in the same period in 2011.

Operating revenue was $549.3 million, a 20.5% increase compared to the same period in 2011. Capacity for the third quarter of 2012 increased 28.0% year-over-year to 4.1 billion available seat miles, resulting in operating revenue per available seat mile (ASM) of 13.56 cents, down 5.8% from the same period in 2011. Passenger yield (passenger revenue per revenue passenger mile) decreased 3.6% year-over-year to 14.77 cents, resulting in a year-over-year decrease in passenger revenue per ASM of 5.7% to 12.30 cents. Selected Statistical Data is included in Table 2.

Total operating expenses increased 20.1% year-over-year to $474.4 million. CASM decreased 6.1% year-over-year to 11.71 cents. Excluding fuel, CASM decreased 6.8% year-over-year to 7.62 cents. Reconciliations of GAAP and non-GAAP financial measures are included in Tables 2 and 6.

Aircraft fuel costs increased 21.9% year-over-year to $165.8 million and represented 34.9% of total operating expenses. Hawaiian’s average cost per gallon of jet fuel decreased 4.1% year-over-year to $3.04 (including taxes and delivery). The financial impact of hedging activities is included in nonoperating income (expense), and as such is not reflected in fuel expense.

The Company believes that economic fuel expense is the best measure of the effect of fuel prices on its business as it most closely approximates the net cash outflow associated with the purchase of fuel for its operations in a period. The Company defines economic fuel expense as GAAP fuel expense plus (gains)/losses realized through actual cash (receipts)/payments received from or paid to hedge counterparties for fuel hedge derivative contracts settled during the period. For the three months ended September 30, 2012, economic fuel expense was $167.4 million ($3.07 per gallon), compared with $138.3 million ($3.22 per gallon) in the prior-year period. Analyses of economic fuel expense for the third quarter 2012 and 2011 and pro-forma net income (loss) and diluted net income (loss) per share reflecting economic fuel expense are included in Tables 3 and 4.

Nonoperating income (expense) totaled ($1.1) million, compared with ($13.6) million in the same period in 2011. The Company recognized gains on its fuel hedging activities, reflected in nonoperating income (expense), totaling $6.5 million compared with losses of $9.7 millionduring the same period in 2011.

A summary of the Company’s fuel derivatives contracts as of October 17, 2012 is included as Table 5.

As of September 30, 2012, the Company had:

Unrestricted cash and cash equivalents of $433.5 million.
Available borrowing capacity of $67.4 million under Hawaiian’s Revolving Credit Facility.
Outstanding debt and capital lease obligations of approximately $674 million consisting of the following:
- $251.2 million outstanding under secured loan agreements to finance a portion of the purchase price for four Airbus A330-200 aircraft.
- $174.6 million in secured loan agreements for a portion of the purchase price for 15 previously leased Boeing 717-200 aircraft.
- $108.2 million in capital lease obligations for an Airbus A330-200 aircraft and two Boeing 717-200 aircraft.
- $68.0 million outstanding under floating rate notes issued in conjunction with the acquisition of three Boeing 767-300 ER aircraft.
- $71.8 million outstanding of Convertible Senior Notes.

Copyright Photo: Bruce Drum. Boeing 767-33A ER N589HA (msn 33422) taxies to the runway at Seattle/Tacoma bound for Honolulu.

Hawaiian Airlines:

Alaska Airlines accepts its first new Boeing 737-900 ER, Boeing earns $1 billion in the third quarter

Alaska Airlines (Seattle/Tacoma) yesterday (October 23) took delivery of its first new Boeing 737-900 ER (Extended Range) (N402AS) aircraft.

Meanwhile, The Boeing Company (Chicago) reported third quarter net income of $1.0 billion, or $1.35 per share, on continued strong core performance and revenue of $20.0 billion. Increased earnings at Commercial Airplanes and Defense, Space & Security were more than offset by higher pension expense of $194 million ($0.18 per share). Earnings per share guidance for 2012 was raised to between $4.80 and $4.95. The company also raised its revenue guidance to between $80.5 and $82 billion on higher Defense, Space & Security revenue, and increased its 2012 operating cash flow outlook to greater than $5.5 billion.

Copyright Photo: Joe G. Walker. Boeing 737-990 ER N402AS (msn 41189) is pictured departing from a cloudy Boeing Field in Seattle as flight “Alaska 9401” bound for Paine Field (PAE) near Everett, to where it will be outfitted prior to entry into revenue service.

Alaska 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:

American Airlines announces new routes to Asia, Europe and Latin America

American Airlines (Dallas/Fort Worth) announced today that it will launch service to markets in Asia, Europe and Latin America, delivering on the airline’s business plan and network strategy designed to offer customers more choices to new destinations. Next year, American will begin the following international services: Dallas/Fort Worth – Seoul, South Korea; Dallas/Fort Worth – Lima, Peru; Chicago O’Hare – Dusseldorf, Germany; and New York JFK – Dublin, Ireland. This new service enhances American’s network footprint and will provide more access and choices for customers in key international markets. It will also add domestic service to match customer demand through its Dallas/Fort Worth and Chicago hubs.

Last week, American announced that international unit revenue increased 8.0 percent for the first nine months of 2012, driven by increased load factors across all entities and improved yield performance. Unit revenue performance in the Pacific entity for the same period was strong, up 13.3 percent, driven by increased demand for the premium cabins, greater revenues from Asia point-of-sale and joint selling efforts with joint business partner, Japan Airlines. The Latin American entity posted a 7.2 percent unit revenue increase for the first nine months of 2012, including yield improvements in Mexico and Central and South America. The growing strength of American’s enhanced network, together with coordinated selling efforts with joint business partners British Airways and Iberia over the Atlantic, helped drive a 6.5 increase in trans-Atlantic unit revenue improvement for the first nine months of 2012 versus the prior year.

The strengthening of American’s global network is just another example of the company’s progress toward its business plan, which includes focusing its hubs in the most important domestic and international cities, enhancing relationships with the best international alliance partners and creating a pipeline of industry-leading products and services, including a significant renewal and transformation of an aircraft fleet that American expects to be the youngest and most fuel-efficient among its U.S. airline peers by 2017.

New Service to Asia

From its largest hub at Dallas/Fort Worth, American will launch its first-ever service to Seoul on May 9, 2013. As one of the top 10 premium markets in the world, the new service to Seoul reinforces American’s commitment to customers and the Asia-Pacific region. The new service will be operated as a part of American’s joint business agreement with Japan Airlines and will provide convenient access for customers traveling from South Korea to connect to more than 200 flights from Dallas/Fort Worth to cities in the United States and Latin America.

More Service to Europe

Beginning April 11, 2013, American will add service between Chicago O’Hare and Dusseldorf, Germany. American will code share with oneworld^® alliance partner, airberlin – further reinforcing an already strong relationship and allowing customers to fly not only to Dusseldorf, but also to cities such as Moscow, Tel Aviv, and Nice through airberlin’s extensive network. This route will also operate as part of the joint business agreement with British Airways and Iberia.

In addition, American also will add new service between New York – JFK and Dublin, Ireland, beginning June 12, 2013. These new flights also will be operated in conjunction with American’s Atlantic joint business partners, British Airways and Iberia. From JFK, American flies non-stop to nearly 50 cities throughout Asia, Europe, North America and South America with nearly 90 daily departures.

Increased Service to Latin America

Beginning April 2, 2013, American will add service between Dallas/Fort Worth and Lima, Peru. American provides more service than any other airline between North America and Latin America with more than 900 weekly flights to 49 destinations. With the addition of Dallas/Fort Worth – Lima, customers can access 30 destinations to Central America, Mexico, and South America from the Dallas/Fort Worth hub.

In addition, this added service continues to enhance American’s relationship with oneworld partner, LAN, including reciprocal frequent flyer benefits for American Airlines AAdvantage^® and LANPASS members, and reinforces American’s commitment to the Peruvian market by providing seamless connections to multiple destinations including the Dallas/Fort Worth – Tokyo non-stop.

New Domestic Cities from Dallas/Fort Worth and Chicago:

On February 14, 2013, American will also add new domestic service, through its regional affiliates American Eagle and ExpressJet, from Dallas/Fort Worth to the following cities: Beaumont/Port Arthur, Texas, Columbia, Mo., and Fargo, N.D, as well as new Chicago O’Hare – Columbia, Missouri service.

DFW is the largest of American’s five domestic hubs offering more than 740 departures to nearly 170 cities in Asia, Europe, North America and South America.

Below is a summary of the new service:

International

Dallas/Fort Worth (DFW) – Lima (LIM)
AA2193 Leave DFW: 5:30 p.m. Arrive LIM: 12:25 a.m. (next day)
AA2194 Leave LIM: 2 a.m. Arrive DFW: 9:15 a.m.
Aircraft Type: Boeing 757
Frequency: Daily service
Start Date: April 2, 2013

Chicago O’Hare (ORD) – Dusseldorf (DUS)
AA242 Leave ORD: 5 p.m. Arrive DUS: 8:15 a.m. (next day)
AA241 Leave DUS: 12:10 p.m. Arrive ORD: 2:20 p.m.
Aircraft Type: Boeing 767-300
Frequency: Daily service
Start Date: April 11, 2013, subject to government approval

Dallas/Fort Worth (DFW) – Seoul (ICN)
AA27 Leave DFW: 10:30 a.m. Arrive ICN: 3 p.m. (next day)
AA26 Leave ICN: 5 p.m. Arrive DFW: 4:20 p.m.
Aircraft Type: Boeing 777-200
Frequency: Daily service
Start Date: May 9, 2013, subject to government approval

New York – JFK-Dublin (DUB)
AA290 Leave JFK: 6:55 p.m. Arrive DUB: 6:55 a.m. (next day)
AA291 Leave DUB: 9 a.m. Arrive JFK: 11:30 a.m.
Aircraft Type: Boeing 757-200
Frequency: Daily
Start Date: June 12, 2013, subject to government approval

Domestic

Dallas/Fort Worth (DFW) – Beaumont/Port Arthur (BPT)
AA2543 Leave DFW 8:40 a.m. Arrive BPT 9:50 a.m.
AA2521 Leave DFW 11:20 a.m. Arrive BPT 12:35 p.m.
AA2523 Leave DFW 3:10 p.m. Arrive BPT 4:20 p.m.
AA2525 Leave DFW 6:25 p.m. Arrive BPT 7:35 p.m. (except Saturday)
AA2510 Leave BPT 6:30 a.m. Arrive DFW 7:45 a.m.
AA2543 Leave BPT 10:20 a.m. Arrive DFW 11:30 a.m.
AA2521 Leave BPT 1:05 p.m. Arrive DFW 2:15 p.m.
AA2523 Leave BPT 4:50 p.m. Arrive DFW 6 p.m. (except Saturday)
Aircraft Type: CRJ 200
Frequency: All flights are daily except as noted above
Start Date: Feb. 14, 2013

Dallas/Fort Worth (DFW) – Columbia, Mo. (COU)
AA3396 Leave DFW Noon Arrive COU 1:25 p.m.
AA3348 Leave DFW 6:55 p.m. Arrive COU 8:25 p.m. (except Saturday)
AA3215 Leave COU 6:45 a.m. Arrive DFW 8:35 a.m.
AA3291 Leave COU 5:40 p.m. Arrive DFW 7:25 p.m. (except Saturday)
Aircraft Type: Embraer 145
Frequency: All flights are daily except as noted above
Start Date: Feb. 14, 2013

Chicago – O’Hare (ORD) -COU
AA3919 Leave ORD 3:55 p.m. Arrive COU 5:10 p.m.
AA3900 Leave COU 1:55 p.m. Arrive ORD 3:20 p.m.
Aircraft Type: Embraer 145
Frequency: Daily
Start Date: Feb. 14, 2013

Dallas/Fort Worth – Fargo (FAR)
AA2537 Leave DFW: 12:05 p.m. Arrive FAR: 2:30 p.m.
AA2537 Leave FAR: 3:05 p.m. Arrive DFW: 5:50 p.m.
Aircraft Type: CRJ 200
Frequency: Daily
Start Date: Feb. 14, 2013

American Airlines: