Tag Archives: BWI

CommutAir to add 21 Embraer ERJ 145s, will retire the Dash 8s by January 2018

All DHC-8 Dash 8s to be replaced with ERJ 145s by January 2018

CommutAir (Burlington, VT) has announced a Memorandum of Understanding (MOU) with United Airlines to add 21 Embraer ERJ 145 aircraft to its existing contract to fly 40 jet aircraft under the United Express brand.

These jets will replace Bombardier the Dash 8 turboprop aircraft with planned retirements by January 2018.

Under the MOU, CommutAir plans to:

  • Accelerate the retirement of its 21 Bombardier DHC-8 Dash 8’s – with the final exit in January 2018
  • Continue accepting Embraer ERJ145 aircraft through 2019 until 61 jets have been inducted
  • Offer an improved and attractive hiring incentive program for pilots

“We are gratified by United’s renewed vote of confidence in CommutAir’s dedicated employees,” said Subodh Karnik, CommutAir’s President & CEO.  “This development will allow us to triple in size by 2019, provide tremendous career-growth opportunities for our employees, and help us pursue our Vision of ‘becoming United’s regional airline partner of choice’.”

This development follows the 2016 agreement between United Airlines and CommutAir, which resulted in:

  • United’s purchase of a 40 percent ownership stake in CommutAir stock, as part of a comprehensive recapitalization
  • A new Capacity Purchase Agreement (CPA) to double CommutAir’s fleet with 40 ERJ145 aircraft
  • United’s first, and most expansive, Career Path Program (CPP) to provide CommutAir pilots with a gateway to a United flight deck in as quickly as a year

“Our growing team of 800 plus aviation professionals embrace our family environment and can-do culture and were the driving force behind the successful launch of the Embraer ERJ145 in 2016 – which was faster than the three other operators who undertook similar efforts last year,” said Joel Raymond, Chief Operating Officer.  “Accelerating Dash-8 retirements and continuing to grow the Embraer ERJ145 fleet will afford our pilots and other employees with leading regional airline industry career advancement opportunities.”

As part of its growth plan, CommutAir announced a significant improvement to its Pilot sign-on bonus program and further enhancements to its Career Path Program.

Copyright Photo: United Express-CommutAir Bombardier DHC-8-311 (Q300) N838CA (msn 527) BWI (Tony Storck). Image: 909675.

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Spirit Airlines states 2Q results were impacted by 850 pilot-related flight cancellations

Spirit Airlines Airbus A320-232 WL N641NK (msn 6566) BWI (Tony Storck). Image: 928992.

Spirit Airlines, Inc. reported second quarter 2017 financial results.

  • GAAP net income for the second quarter 2017 was $78.1 million ($1.12 per diluted share), or $79.1 million ($1.14 per diluted share)1excluding special items.
  • GAAP operating margin for the second quarter 2017 was 18.9 percent, or 19.1 percent excluding special items1.
  • Spirit ended the second quarter 2017 with unrestricted cash, cash equivalents, and short-term investments of $969.6 million.
  • Spirit’s return on invested capital (non-GAAP, before taxes and excluding special items) for the twelve months ended June 30, 2017 was 20.3 percent2.

“The progress we made with our revenue initiatives, as well as the underlying revenue trends as we headed into the June quarter, were encouraging.  Unfortunately, given the level of operational disruptions and the associated financial impact, the second quarter 2017 performance overall was disappointing. We sincerely apologize to our customers who were affected by the flight disruptions during the quarter,” said Bob Fornaro, Spirit’s President and Chief Executive Officer.  “Despite our financial and operational challenges in the second quarter 2017, the changes in our pricing and revenue management strategies helped to drive year-over-year improvement in passenger and non-ticket revenue per segment — this is the first time in over two and a half years either of these metrics increased year over year.”

Revenue Performance

For the second quarter 2017, Spirit’s total operating revenue was $701.7 million, an increase of 20.1 percent compared to the second quarter 2016, driven by a 9.3 percent increase in flight volume and a 7.1 percent increase in operating yields.

Total revenue per available seat mile (TRASM) for the second quarter 2017 increased 5.7 percent compared to the same period last year. During the second quarter 2017, the Company’s results benefited from the calendar shift of Easter, as well as Company driven revenue initiatives and a strong underlying demand environment.

On a per passenger flight segment basis, total revenue for the second quarter 2017 increased 8.5 percent year over year to $113.07 with ticket revenue per passenger flight segment increasing 13.4 percent to $59.93 and non-ticket per passenger flight segment increasing 3.5 percent to $53.14.

Cost Performance

For the second quarter 2017, total GAAP operating expense, including special items of $1.5 million3, increased 23.1 percent, or $106.6 million, year over year to $568.9 million.  Adjusted operating expense for the second quarter 2017 increased 25.1 percent, or $113.7 million to $567.5 million4. The increase in both GAAP and adjusted operating expense was primarily driven by an increase in flight volume, higher passenger re-accommodation expense (recorded within other operating expenses), and higher fuel rates.

Aircraft fuel expense increased in the second quarter 2017 by 25.7 percent, or $29.1 million, compared to the same period last year, due to a 12.9 percent increase in the cost of fuel per gallon and a 11.1 percent increase in fuel gallons consumed.

Spirit reported second quarter 2017 cost per available seat mile (“ASM”), excluding special items and fuel (“Adjusted CASM ex-fuel”), of 5.83 cents4, an increase of 10.0 percent compared to the same period last year, driven primarily by higher passenger re-accommodation expense per ASM and higher depreciation and amortization per ASM.

Pilot-Related Cancellations

During the second quarter 2017, the Company had over 850 pilot-related flight cancellations.  The Company estimates these pilot-related cancellations adversely impacted its second quarter 2017 results by approximately $45 million (approximately $25 million of revenue loss and $20 million of additional operating costs, primarily related to higher passenger re-accommodation expense).  The Company estimates that had these cancellations not occurred, TRASM for the second quarter would have been up approximately 6.5 percent year over year (with the Easter shift accounting for approximately 400 basis points of the year over year increase) and Adjusted CASM ex-fuel would have been up approximately 2.0 percent year over year.

“While our cost performance for the second quarter was not satisfactory, we do not believe it materially changes our long-term cost outlook and are confident that we will continue to maintain, or grow, our relative cost advantage,” said Ted Christie, Spirit’s Executive Vice President and Chief Financial Officer.

Labor

Spirit and its pilots, represented by the Air Line Pilots Association, remain in open contract negotiations under the supervision of the National Mediation Board.

Fleet

Spirit took delivery of three new A320ceo aircraft and one new A321ceo aircraft during the second quarter 2017, ending the quarter with 104 aircraft in its fleet.

Recent New Service Announcements

Hartford – Orlando (4/27/17)
Hartford – Myrtle Beach (4/27/17)*
Akron-Canton – Las Vegas (4/27/17)
Akron-Canton – Myrtle Beach (4/27/17)*
Newark – Houston (4/27/17)
Houston – Seattle (4/27/17)*
Baltimore – New Orleans (5/25/17)
Baltimore – Oakland (5/25/17)*
Baltimore – San Diego (5/25/17)
Baltimore – Seattle (5/25/17)
Cleveland – New Orleans (5/25/17)
Detroit – Oakland (5/25/17)*
Detroit – Seattle ( 5/25/17)*
Orlando – New Orleans (5/25/17)
Pittsburgh – Dallas (5/25/17)
Pittsburgh – Myrtle Beach (5/25/17)*
Hartford – Fort Lauderdale (6/15/17)
Pittsburgh – Fort Lauderdale (6/16/17)
Pittsburgh – Las Vegas (6/22/17)
Pittsburgh – Orlando (6/22/17)
Pittsburgh – Los Angeles (7/13/17)
Pittsburgh – Houston (7/13/17)
Pittsburgh –  Fort Myers (11/9/17)**
Pittsburgh – Tampa (11/9/17)**
Hartford – Fort Myers (11/9/17)**
Hartford – Tampa (11/9/17)**
Baltimore – Cancun (11/9/17)
Chicago – Cancun (11/9/17)

* Seasonal Summer Service
** Seasonal Winter Service

Copyright Photo: Spirit Airlines Airbus A320-232 WL N641NK (msn 6566) BWI (Tony Storck). Image: 928992.

Southwest to add the Baltimore/Washington – Minneapolis/St. Paul route

Southwest 2014 logo-1

Southwest Airlines (Dallas) is adding two daily flights from Baltimore/Washington to Minneapolis/St. Paul. The new, twice-daily, nonstop service begins on April 12, 2016.

Southwest has more than 60 nonstop destinations from Baltimore/Washington International Thurgood Marshall Airport. These include flights to the Caribbean and Latin America, including Southwest’s newest destination, Liberia, Costa Rica.

Emirates and Alaska Airlines to codeshare

Emirates (Dubai) today (October 26) announced a new codeshare and lounge agreement with Alaska Airlines (Seattle/Tacoma).

Emirates continued:

Emirates logo-1
Pending governmental approval, Emirates will begin marketing up to 300 daily Alaska Airlines flights, which will give customers the simplicity of purchasing connecting flights on both airlines using one reservation, and a seamless ticketing, check-in, boarding and baggage check experience during the entire journey. In addition, the new codeshare agreement will feature several other new benefits including reciprocal lounge access and priority boarding and check-in for elite fliers.

Alaska (2014) logo

With two daily flights now departing from Dubai to Seattle/Tacoma, the enhanced codeshare agreement gives passengers easy connections to 49 cities including Honolulu, Denver, Las Vegas, Portland, Phoenix, Pullman, Sacramento, Spokane, Anchorage, Juneau, and Fairbanks as well as Canadian destinations such as Calgary, Edmonton, Vancouver and Victoria.

Top Copyright Photo: Ton Jochems/AirlinersGallery.com. Emirates Boeing 777-36N ER A6-EBC (msn 32790) taxies to the gate at Amsterdam.

Below Copyright Photo: Brian McDonough/AirlinersGallery.com. Alaska Airlines Boeing 737-990 ER N474AS (msn 40715) with the revised titles and winglet markings arrives at Baltimore/Washington.

Alaska Airlines aircraft slide show: AG Airline Slide Show

Emirates aircraft slide show: AG Airline Slide Show

 

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Delta explains its aircraft fleet strategy, follows-up on CEO Anderson’s “aircraft bubble” comment

Delta Air Lines (Atlanta) has issued this statement explaining its fleet strategy is driven by opportunity and flexibility:

Delta logo

Delta does things differently than most airlines, and that includes the way it buys airplanes.

While most big carriers replenish and expand their fleets with brand new jets, which are either leased or purchased, Delta has purchased a mix of new and used aircraft over the past several years.

Ed Lohr, Delta’s Managing Director of Fleet Strategy, explained that the airline looks at the entire cost of jet – the purchase price, the maintenance costs, fuel efficiency and other factors – before making decisions. Often, used aircraft make the most economic sense for the airline.

And thanks to Delta’s TechOps aviation maintenance team, used planes can be maintained and retrofitted with entirely new interiors, providing a superior customer experience even though the jet may be a few years old.

And Delta typically purchases planes outright rather than leasing them.

“We do have a different strategy than most of our competitors,” Lohr said. “When you have a strong balance sheet like we do, a great TechOps organization like we do, it gives you a lot more flexibility to take advantage of opportunities when they come up.”

Above Copyright Photo: Brian McDonough/AirlinersGallery.com. Ex-AirTran Airways Boeing 717-231 N925AT (msn 55079) arrives at Baltimore/Washington (BWI). N925AT was formerly painted in the special “The Wizarding World of Harry Potter” (Universal) livery.

For example, Delta acquired 88 used Boeing 717 (above) after Southwest inherited them in its merger with AirTran Airways. Those jets fill a critical role in Delta’s domestic network, and were given nose-to-tail revamps before entering service.

Delta has similarly scoured the world for used MD-90 jets, reliable narrowbodies that are also dramatically upgraded and brought into the fleet at a very reasonable price.

Still, Delta will buy new when it makes sense. For example, the airline recently ordered 25 fuel-efficient Airbus A350-900s to fly primarily long-haul trans-Pacific routes starting in 2017.

The aircraft strategy is one of the reasons Delta has been able to pay off more than $10 billion in debt since 2008, and has seen its credit rating rise to just one notch below investment grade. Less money is tied up in expensive new jets, and instead can be invested in airport facilities, operational performance, new technology and on-board improvements to enhance the customer experience.

“The days of buying just one brand of aircraft, or signing huge orders all at once, those are definitely over,” Lohr said. “At least, they are for us.”

Trebor Banstetter

Graph:

Delta Mainline Fleet Graph (Delta)(LRW)

Delta logo

In a related story, Delta also issued this further clarification after CEO Richard Anderson’s recent comment about an “aircraft bubble” (also reported by us):

The aviation world was buzzing last week after Delta CEO Richard Anderson discussed an “aircraft bubble” that has been dramatically pushing down prices of used widebody aircraft.

“We’re seeing a huge bubble in excess wide-body airplanes around the world,” Anderson said during Delta’s third quarter earnings conference call. Anderson said he had seen mid-life Boeing 777-200 aircraft being available in the market at about $10 million.

Delta’s aircraft experts, Greg May, Senior Vice President – Supply Chain Management, and Ed Lohr, Managing Director – Fleet Strategy, told Delta News Hub that several trends have conspired over the last few years to create a “perfect storm” driving down prices.

The major factors:

A large number of leased widebody aircraft are being returned to lessors and manufacturers, causing a glut in the market.

Boeing 777While Delta generally purchases both new and used aircraft, many carriers lease new planes, turning them in when the lease ends, usually after seven to 10 years. Those aircraft often end up on the used airplane market.

One factor driving the large number of leased aircraft now being sold is the nearly four-year delay in deliveries of Boeing’s 787 jet, Lohr said. The delay caused many airlines to lease Airbus A330 and Boeing 777 aircraft (left) to bridge the gap while waiting for their orders to be fulfilled. Many of those aircraft are now nearing the end of their leases and being returned.

One aircraft in particular – the Boeing 777-200ER powered by Rolls-Royce Trent engines –will be entering the used market in significant numbers over the next couple years, May said. He also cited the new Airbus A350 (below), a twin-engine long-haul competitor to the Boeing 787, which has reduced demand for the 777.

“There was a time when the 777 had that market all to itself,” May said. “With the A350 and the 787 that’s no longer the case, so it’s not as attractive.”

Softness in the international economy has slowed capacity growth and reduced demand for wide-body aircraft, pushing down prices.

Economic softness in Asia and Latin America has caused many foreign airlines to tamp down growth plans. That has resulted in leased widebody aircraft being returned earlier than expected.

“They are paying the rent on those planes every month, so it’s very expensive to park them,” Lohr said. “That’s why they are not extending leases and in some cases are willing to pay a penalty to get out of other lease early, in each case, increasing the availability of used aircraft in the market.”

In addition, lower fuel prices have blunted a major advantage of new planes, which tend to be more fuel efficient.

Cheap financing created a demand for new aircraft, lowering the value of used jets.

Historically airlines in small and developing nations primarily leased or purchased used aircraft because they couldn’t afford new jets. But a wave of cheap financing, some from export credit agencies, has made it much easier for those airlines to buy new planes. Less demand for used aircraft means lower prices.

Airbus A350Lohr likened the widebody jet bubble to the housing bubble in the U.S. that burst in 2008 and collapsed the real estate market.

“Why did we have a real estate bubble? Because anyone and his brother could get a loan,” he said. “It’s the same story with new airplanes.”

While these factors have primarily impacted the widebody market, the narrowbody market is likely to be affected as well, Lohr said.

“The economics and the trends will eventually get to the narrowbodies,” he said.

After Anderson’s comments, Boeing’s stock value plunged. Analysts issued a flurry of reports debating the issue, and the question will likely be in the spotlight this week when Boeing announces its third quarter earnings.

Reuters reported Friday that Boeing may need to slow production of its Boeing 777 because of the weakness in the used aircraft market. Orders for the current generation 777 have fallen from 194 in 2011 to 63 in 2014 and just 34 this year, according to the report.

“Boeing is going to have to slow down the production rate,” Gueric Dechavanne of appraisal firm Collateral Verifications told Reuters.

Despite the attention that Anderson’s remarks received, Delta isn’t in negotiations to purchase used planes for the airline to fly right now, May said.

During the earnings call, Anderson said that he expects prices to decline further.

“Prices are going to get lower,” he said. “You wouldn’t strike a deal now.”

Delta Air Lines aircraft slide show (current livery): AG Airline Slide Show

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450 Southwest Airlines flights impacted yesterday due to computer systems, may persist today

Southwest Airlines (Dallas) yesterday (October 11) experienced computer problems that delayed approximately 450 flights (out of 3,600 scheduled flights). The airline is warning the problems could persist today. The airline has issued this statement:

Southwest 2014 logo-1

We’re continuing to use back-up systems around the country to check-in Customers arriving at our airports without printed or mobile boarding passes. Intermittent performance issues continue impacting our in-airport Customer Service technology systems and across our online platforms (Southwest.com, Southwest Mobile App and site).

We have teams working around the country to support getting our Customers and their checked luggage to their destinations tonight; other groups are troubleshooting multiple applications to determine the cause of some technical challenges experienced Sunday which, as of 6:30pm CDT, have delayed approximately 450 flights (out of 3600 scheduled on Sunday); other groups are making operational decisions to minimize impacts for those who are checking in for travel tomorrow.

We urge Customers traveling Monday to visit Southwest.com to check-in and print boarding passes before coming to the airport. We also encourage Customers to arrive at least two hours prior to their scheduled departures to help minimize delays. Finally, if checking luggage, visit a self-service kiosk adjacent a ticket counter to print bag tags where applicable and present your luggage and identification to Southwest Employees.

We thank our Employees for their tireless efforts to take care of our Customers, and we appreciate our Customers’ patience as we work towards a solution.

Copyright Photo: Tony Storck/AirlinersGallery.com. The former Sea World “Shamu” logo jet, now Boeing 737-7H4 WL N715SW (msn 27849) in the new 2014 livery, arrives at Baltimore/Washington (BWI).

Southwest Airlines aircraft slide show (current livery): AG Airline Slide Show

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National Airlines is coming to Vancouver and Windsor from Sanford, Florida

National Airlines (5th) (Orlando) is expanding to Vancouver, British Columbia.

Vancouver International Airport (YVR) issued this statement:

YVR Airport logo

Vancouver Airport Authority has announced the upcoming arrival of National Airlines to Vancouver International Airport (YVR). Starting January 20, 2016 , the twice weekly scheduled service will operate between Orlando-Sanford International Airport (SFB) and YVR.

 

National Airlines will operate a Boeing 757-200 aircraft on the route. Flights will depart SFB on Wednesdays and Saturdays at 18:45 and arrive in YVR at 22:15. The aircraft will turn around and leave YVR at 23:55 and arrive in SFB at 08:30 the following morning.

NATIONAL AIRLINES LOGO

Previously National Airlines announced nonstop service between Windsor, Ontario, (YQG), and Sanford, Florida, (SFB). The inaugural flight, on Thursday, December 17, 2015, will depart Windsor International Airport at 2:30 PM EST and arrive Orlando-Sanford International Airport at 5:00 PM EST. National Airlines will fly this route year ‘round. National will offer return flights from Orlando-Sanford International Airport also on Thursdays and Sundays, departing at 10:30 AM EST and arriving in Windsor at 1:00 PM EST.

National Sanford Poster

This winter National Airlines will operate nonstop service from Orlando-Sanford International Airport to five destinations:

  • Las Vegas McCarren International Airport *
  • San Juan Luiz Munoz’ International Airport, Puerto Rico (SJU) *
  • Windsor International Airport, Ontario
  • Vancouver International Airport, British Colombia
  • St. Johns International Airport, Newfoundland

* Flights to/or from Las Vegas and San Juan are Public Charters under DOT PC # 15-189, and operated by National Air Cargo, Inc. d/b/a National Airlines.

Copyright Photo: Tony Storck/AirlinersGallery.com. National Airlines (National Air Cargo Group) (5th) Boeing 757-28A N176CA (msn 24543) with special Expo 2020 Dubai UAE markings taxies at Baltimore/Washington (BWI).

National Airlines (5th) aircraft slide show: AG Airline Slide Show

Route Map:

National (5th) 10.2015 Route Map

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