Airline Finance News - North America

AirGuide Business, Oct 13, 2008

Oct 13, 2008

U.S. carriers are going deeper than expected, according to OAG, and 33 airports around the country are expected to lose commercial service altogether. "The scale of the decline in the U.S. market is worse than the previous schedule analysis showed, with airlines taking 265,000 flights out of operation this quarter," said an OAG press release. The company also noted that capacity dropped on both Atlantic and Pacific routes -- two areas that had been considered likely drivers of growth. Oct 9, 2008

Airline capacity has further to fall. Despite the deep capacity cuts already announced for this fall, U.S. airlines may have to trim still more flights in the face of falling demand, aviation consultant Michael Boyd said Monday. "This is not an aviation cycle," noting that high oil prices are a game changer for the industry. "This is the first time I've seen in 35 years that airlines are pulling back capacity faster than demand is dropping." Boyd predicts capacity will fall 9.5% in 2009, following an 8% drop this year. Oct 7, 2008

US airlines, struggling to find stability in a time of unprecedented economic turbulence, are bracing against possible trauma that could be inflicted by credit card processors made skittish by the credit crisis. Oct 6, 2008

Alaska Air Group

Alaska Air Group expects to suffer a "significant" third-quarter loss on a GAAP basis resulting from a $220 million mark-to-market loss on the value of its fuel hedges and other special items, it said in a filing with the US Securities and Exchange Commission. It will announce its third-quarter results on Oct. 23. It said it expects third-quarter passenger RASM to increase 3%-4% year-over-year and it recorded a one-time gain of $42 million related to a change in its loyalty program's mile expiration policy. But it will take a $21.5 million charge associated with the August retirement of two MD-80s and a $3-$4 million hit in charges related to previously announced job cuts. It expects third-quarter CASM excluding fuel to be 13.7-13.8 cents, up 1%-2% year-over-year. Oct 8, 2008

Alaska Airlines, United Airlines

Alaska Airlines on Tuesday joined United Airlines in warning that fuel hedges could lead to quarterly losses. "As a result of the significant decline in crude oil prices since the end of the second quarter, we expect to record approximately $220 million in mark-to-market loss on the value of our fuel hedge portfolio," the company said in an SEC filing. Industry watchers say other airlines could report similar losses from hedging activities, though Southwest Airlines already has said it expects any impact to be minimal. Oct 7, 2008

American Airlines

AMR, UAL May Lead U.S. Airlines to $1 Billion Quarterly Loss on Fuel Costs AMR Corp. and UAL Corp., parents of the two largest U.S. airlines, may report the biggest third- quarter losses in an industry beset by near-record fuel costs and a slowing economy. Oct 12, 2008

American Airlines

American Airlines to increase menu of "unbundled" services The trend toward "unbundling" airfares is expected to pick up speed next year when American Airlines reportedly presents passengers with a broader array of a la carte services they can buy for an additional fee. "We as an industry have opted to not just raise (ticket) prices but to raise prices and change the fee structure," says an executive at American. Many carriers have unbundled certain services and amenities to boost revenue and offset high jet fuel prices. Although some passengers grumble about the more complex fares, experts agree they are here to stay. "Honestly, I think it's better for consumers," says the founder of airfarewatchdog.com. "If I pack light, why should I pay for the guy who packs heavy?" Seattle Post-Intelligencer/The Associated Press (10/6) Oct 6, 2008

Boeing

Boeing Strike Hits Airlines, The month-long strike by Boeing's aircraft workers is starting to spoil airlines' expansion plans and eat into the profits of parts suppliers and metals makers around the world. Oct 9, 2008

Continental Airlines

Continental Airlines says it will take a $91 million charge in the third quarter, with nearly one-third attributed to severance costs for the 3,000 employees who lost their jobs. Other charges involve pension costs, grounded jets and facilities expenses. The airline also said new fees on frequent-flier awards would result in $27 million in increased revenues and reduced liabilities. Forbes/The Associated Press (10/9) Oct 9, 2008

Delta Air Lines, Northwest Airlines

Delta, Northwest pilots clash over seniority Pilots for Delta Air Lines and Northwest Airlines have begun arbitration hearings to integrate seniority lists for a single, merged airline. Northwest pilots, who tend to be older on average than their counterparts at Delta, want seniority based on date of hire. But Delta pilots insist status and aircraft type should be the basis for seniority. Star Tribune (Minneapolis-St. Paul)/The Associated Press (10/6) Oct 7, 2008

Mesa Air Group

Mesa reaches deal with pilots over scheduling. Following 10 months of negotiations, Mesa Air Group Inc. says it has reached a tentative agreement with its pilots union to resolve scheduling problems. Voting by the nearly 1,200 Mesa pilots represented by the Air Line Pilots Association is scheduled to begin next month. Oct 7, 2008