Airline Finance News - North America

AirGuide Business, March 31, 2008

Mar 31, 2008

Airlines, grappling with high fuel costs, are looking for new revenue streams and to cut costs. One popular way to achieve these goals is by charging for items and services that used to be included in the fare. Airlines typically check two bags for free, but analysts forecast all the major carriers soon will begin charging to check a second bag. Mar 29, 2008

The European Union and the United States will kick off talks on further liberalization of transatlantic air traffic on May 15, the EU's senior transport official said on Friday. The first phase of the "open skies" agreement comes into force on Sunday and allows carriers to access any US city from any point in the EU, and vice versa. European airlines have complained this deal unfairly favors US rivals and EU states have threatened to scrap it if Washington does not agree by 2010 to a second phase allowing foreign airlines to buy more voting rights in US carriers and permitting them to run domestic US services. EU Transport Commissioner Jacques Barrot said the possibility of withdrawing from the deal if there was no progress on the second stage by 2010 was more a threat than a likelihood. Sunday's move was "a revolution in the transatlantic skies", that would strongly boost air traffic, Barrot said, expecting 25 million extra passengers over the next five years, on top of the current average of about 50 million passengers per year. Mar 29, 2008

Airlines are urging the Bush administration to tap the U.S. home heating-oil reserves. The Air Transport Association said the move would bring down the soaring cost of jet fuel. "While admittedly not the panacea to our energy crisis, making the Heating Oil Reserve available to the commercial market would yield immediate, tangible benefits for residential consumers of heating oil as well as the nation's airlines and their customers," wrote ATA president and CEO James May. An Energy Department spokeswoman said current conditions do not justify tapping the reserves. Mar 28, 2008

Airlines oppose a DOT plan that would allow airports to charge carriers higher fees for landing during busy times. The Air Transport Association said the plan is essentially a tax that would eventually boost fares for consumers. Mar 28, 2008

Airline stocks fell sharply on Wednesday as the price of oil -- directly linked to the price of jet fuel -- again moved higher. American lost USD$1.02, or 10.6 percent, to close at USD$8.61 while Delta fell USD$1.23, or 12.3 percent, and finished at USD$8.74 in regular trade on the New York Stock Exchange. Both posted slight gains after hours. Mar 27, 2008

Airlines with older jetliners spend more on maintenance, fuel. Financial problems have forced U.S. carriers to postpone buying new planes. As a result, they now operate some of the oldest fleets in the world, observers say. Older planes require carriers to spend more on maintenance and fuel, experts say. Mar 27, 2008

Financial problems have forced U.S. carriers to postpone buying new planes. As a result, they now operate some of the oldest fleets in the world, observers say. Older planes require carriers to spend more on maintenance and fuel, experts say. Mar 27, 2008

High fuel costs and the weaker U.S. economy may cause some domestic carriers to post a loss in 2008. Some observers hoped that consolidation would allow carriers to offset fuel prices. However, in what had been seen as the most likely combination, pilots at Delta Air Lines and Northwest Airlines could not agree on seniority issues, stalling a merger between the two carriers. Mar 27, 2008

The traveling public took a hit from a federal appeals court decision rejecting a New York state law-the first in the nation-requiring airlines to provide the basics of food, water, toilets and fresh air to passengers confined in a plane delayed on the tarmac. The decision may force Congressional action. The 2nd U.S. Circuit Court of Appeals ruled that New York's new state law interferes with federal laws governing the airlines. The court said the new law was laudable and the circumstances that brought them about were deplorable, The Associated Press reports, but only the federal government has the authority to enact such a law. The New York law was challenged by the Air Transport Association of America (ATA), the industry group representing leading U.S. airlines. The ATA argued that state legislation of airline services is preempted by federal law."The court's decision vindicates the position of ATA and the airlines-that airline services are regulated by the federal government and that a patchwork of laws by states and localities would be impractical and harmful to consumer interests. This clear and decisive ruling sends a strong message to other states that are considering similar legislation," the ATA said in a statement. Mar 27, 2008

US airline stocks fell sharply on Wednesday as the price of a barrel of oil -- directly linked to the price of jet fuel -- rose more than USD$4. Delta Air Lines' shares suffered the largest percentage decline in midday trading, falling 10.2 percent to USD$8.95 on the New York Stock Exchange. Northwest Airlines shares were down 9.8 percent at USD$9.06 on the NYSE. The Amex airline shed 7.6 percent. Calyon Securities analyst Ray Neidl said the drop in share prices was the result of the oil price spike. Nymex crude was up USD$4.20 at USD$105.42. Earlier on Wednesday American Airlines said it voluntarily canceled nearly 10 percent of its flights to check plane wiring to comply with a request by the Federal Aviation Administration. American parent AMR's shares were weaker after the news and were down 7.4 percent at USD$8.92 on the NYSE. Shares of UAL, parent of United Airlines, were down 7.8 percent at USD$22.24 on Nasdaq. Mar 27, 2008