Airline Finance News - North America

AirGuide Business, Sept 8, 2008

Sep 8, 2008

Safety Compliance Gaps Noted For Some US Airlines. Three major airlines were among 11 US carriers that failed during an unprecedented industry review to demonstrate full compliance with government safety directives, regulators said on Friday. The Federal Aviation Administration did not disclose the carriers or their shortcomings, flagged during the second part of a two-phase review of industry safety practices that ended in June. No major airlines were tagged for lapses in the first phase, which was conducted in March. The second and more detailed audit involved closer scrutiny of records, procedures and aircraft.

All questions regarding specific aircraft were addressed before they were allowed to fly again, authorities said. FAA officials touted the overall safety of the US airline industry, which carries more than 600 million passengers a year. The agency reported a 98 percent compliance rate with its directives, prompting acting FAA administrator Robert Sturgell to bristle at questions regarding the small fraction of cases where carriers fell short. Sep 6, 2008

The recent downturn in the global economy has hurt the whole industry. Global airlines are set to post losses of USD$5.2 billion this year and USD$4.1 billion in 2009, according to the International Air Transport Association (IATA). Sep 5, 2008

North American airlines are likely to be hit hardest in the next two years, which Bisignani said would be tough for an industry whose fortunes are closely tied to economic swings. Many carriers have already raised ticket prices, imposed fuel surcharges and cut flight capacity. Several have sought mergers and partnerships to save costs. IATA's Bisignani said governments should not stand in the way of airline consolidation. "In this difficult moment, everything must be done to facilitate those types of processes," he said. Sep 3, 2008

AirTran Airways

AirTran Airways flew 1.97 billion RPMs in August, up 12.7% year-over-year. Capacity rose 8.8% to 2.25 billion ASMs and load factor was up 3 points to 87.3%. Sep 8, 2008

American Airlines

American Airlines rejects rival's monopoly claims Through a filing with the Department of Transportation, American Airlines rejected claims by Virgin Atlantic that a planned alliance between the U.S. carrier and British Airways would result in a "monster monopoly" on trans-Atlantic service. American and British Airways have tried three times to gain approval for code-sharing agreements on flights between the U.S. and London's Heathrow airport. Sep 8, 2008

American Airlines

American Airlines says capacity cuts are permanent, despite a recent drop in fuel prices. CFO Tom Horton told the Associated Press that American has grounded older planes that consume about 35% more fuel per seat than newer models. "It would be very difficult to bring them back, not just in operations cost but also in maintenance infrastructure," he explained. Horton also predicted the "entire global airline industry has more consolidation in its future." Sep 8, 2008

American Airlines

American Airlines warns 469 airport workers of possible layoffs More than 400 American Airlines employees at five U.S. airports have received notices that they could lose their jobs, effective Nov. 1. "We must quickly reduce our operating schedule for the coming months, and as a result, will need fewer people to operate the airline," American's vice president of employee relations wrote in a letter to the Transport Workers Union. American's hub at Chicago O'Hare would be hardest hit, with up to 353 layoffs. Employees in Los Angeles, San Francisco, Raleigh-Durham, N.C., and Columbus, Ohio, would also be affecte. Sep 8, 2008

American Airlines

American Airlines asked the US Dept. of Transportation for permission to delay the start of its Chicago O'Hare-Beijing service from April 9, 2009, to April 4, 2010. Sep 1, 2008

American Airlines, British Airways

Richard Branson says he's prepared to spend millions to block a three-way marketing agreement among American Airlines, British Airways and Spain's Iberia, arguing it's bad for consumers as well as for Virgin Atlantic. "If it is approved, we believe Virgin Atlantic will be damaged... [along with] any smaller carriers on these routes," the Virgin president said Friday, adding that the three big carriers could dominate key routes and drive up prices. "This application is good news for customers," a BA spokesman countered. "They will gain greater access to discounted fares, smoother connections and more frequent flier benefits. Sep 8, 2008

American Airlines, United Airlines

Passenger loads in August were down at United Airlines and American Airlines despite capacity cuts at both carriers. After reducing capacity 3.1%, United saw its load factor drop nearly 2 points, to 84.5%, as traffic fell 5.1%. At American, despite a 1.1% cut in capacity, planes flew 83.5% full, compared to 85% a year earlier. Sep 8, 2008

Continental Airlines

Continental Airlines expects improving yields as bookings increase. Continental Airlines says domestic bookings for the next six weeks are running about two points ahead of last year's, while Latin America is four points ahead, trans-Atlantic bookings are flat and Pacific bookings are down. Yields should increase across all regions compared with last year's, the company said. Sep 8, 2008