Airline Finance News - North America

AirGuide Business, Sept 1, 2008

Sep 1, 2008

Air Canada

Air Canada and Jazz flew a combined 5.02 billion RPMs in July, down 0.6% year-over-year, against a 2% fall in capacity to 6.05 billion ASMs. Load factor rose 1.2 points to 83%. Aug 28, 2008

American Airlines

American, British Airways and Iberia intend to cooperate commercially on flights between the United States, Mexico and Canada; and the European Union, Norway and Switzerland. British Air and American had an application for antitrust immunity rejected in 2001 due to a shared dominance of the London airport, but they are hoping anti-trust authorities will now take a different view due to changes in their markets. Immunity would allow the airline to compete more effectively with other transatlantic alliances already granted immunity. Among these are the Star Alliance, which includes Germany's Lufthansa and US-based United Airlines; and SkyTeam, which includes Air France-KLM and US-based Delta Air Lines. Aug 29, 2008

American Airlines

American Airlines parent AMR Corp. last week entered into an agreement with Merrill Lynch to sell up to $300 million in common stock "from time to time" through transactions "made by means of ordinary brokers' transaction on the New York Stock Exchange at market prices," it said in a filing with the US Securities and Exchange Commission. AMR's capitalization was approximately $2.6 billion at Friday's closing. Aug 26, 2008

Delta Air Lines

Delta Air Lines said on Tuesday it has borrowed the entire amount of its USD$1 billion revolving credit facility and amended its credit card processing agreement to strengthen its financial position. In a letter to employees, Delta Chief Financial Officer Ed Bastian said each move will strengthen Delta's finances as it prepares for the closing of its merger with Northwest Airlines. Bastian said Delta had USD$3.7 billion of liquidity at the end of July, and the company believes it will have more than enough cash when the merger closes to manage the integration process and run the day-to-day business. Bastian's letter was part of a regulatory filing. Delta said it amended its Visa/MasterCard credit card processing agreement to extend it to 2011 and there will continue to be no cash holdback required by the processors under the contract. Credit card processors sometimes withhold a percentage of the proceeds they receive on airline ticket sales in order to manage credit risks. Aug 27, 2008

Delta Air Lines

Delta Air Lines said this week it has "borrowed" its $1 billion revolving credit facility, which was made available to the carrier when it emerged from bankruptcy last year. It also extended its Visa/MasterCard processing agreement through the end of 2011. President and CFO Ed Bastian told employees in a memorandum that the moves will "strengthen Delta's financial position" and help smooth its planned merger with Northwest Airlines. He said DL had $3.7 billion in cash on hand at the end of July and "will have more than sufficient [liquidity]. . .to manage the integration process and run the day-to-day business" after the merger closes. Aug 27, 2008

Delta Air LInes

Delta Air Lines has closed on a transaction allowing the Atlanta-hubbed carrier to borrow the entire amount in its $1 billion revolving credit facility to bolster its financial position as it moves to finalize its merger with Northwest Airlines by year-end. Recently Delta outlined integration costs of roughly $600 million over three years for the merger as it posted a $1 billion loss during the second quarter, driven by a $1 billion rise in its fuel bill and special charges of $1.2 billion.

Aug 27, 2008

Delta Air Lines

Delta Air Lines CEO Richard Anderson told employees Friday that while DL supports the proposed transatlantic joint venture among American Airlines, British Airways and Iberia "in principle," it will advocate that "AA and BA need to give up enough slots and gates so that everybody has unfettered access to Heathrow." The employee hotline message was cited by The Dallas Morning News. BA CEO Willie Walsh has gone on record saying that carrier will refuse to surrender slots at LHR. An AA spokesperson told the Morning News that AA does "not believe surrendering slots is necessary given the number of new entrants with service to Heathrow, which clearly demonstrates that slots are available through the open market and intra-alliance transfers." DL flies nonstop to LHR from New York JFK, Atlanta and Los Angeles. Aug 26, 2008

Midwest Airlines, General Mitchell Airport

Midwest Airlines has fallen behind on payments to General Mitchell Airport, owing some $1.1 million in gate fees, an airport spokesperson told the Milwaukee Journal Sentinel. It is the latest in series of downward turns for the financially beleaguered carrier that recently announced it would cut its workforce by 40% and ground its MD-80 fleet by September. Midwest pays an estimated $700,000 each month in gate fees, according to an airport official. That figure should fall when it disposes of the MD-80s. Aug 25, 2008