Airline Finance News - North America

Airguide Online, August 14, 2006

For more airline finance news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Aug 14, 2006

MarketWatch reported that the Amex airline Index fell to its lowest level in 10 months yesterday before bouncing back to 46.98, up 1.3%. The late recovery mirrored what occurred at airports throughout the US, according to MarketWatch, said that while delays in the morning were "significant," they "smoothed themselves out" as the day wore on and passengers had a better idea of what to expect at security checkpoints. "We haven't had anywhere near the number of cancellations we thought we might have," he said. May said he could not quantify cancellations, delays or their effect on the network, and he was unwilling to speculate about the economic impact on airlines during the first day. He noted that the Transportation Security Administration resumed random gate checks at 25 airports yesterday and said, "There will be significantly more airports covered with gate checks tomorrow" as all domestic flights are subjected to the new security regulations. Aug 11, 2006

US Airlines On Recovery Path Despite Fears. Security fears may dampen demand for air travel in the short term, industry watchers said on Thursday, after British police foiled a plan to blow up transatlantic jets, but they won't throw US airlines off their long recovery from the September 11, 2001 attacks. It took US airlines almost five years to regain pre-2001 passenger levels, as Americans regained a taste for travel, helped on by a resurgent economy and cheaper fares. This summer, several carriers reported their fullest planes on record. The latest travel scare may put a dent in that upswing, as the consequences of the plot unravel, analysts said, but existing concerns about record-high oil prices, an economic slowdown and global security remain more of a threat. Aug 10, 2006

US Airlines Raise Fares By Up To USD$10. US airlines raised fares by up to USD$10 one-way for tickets aimed at business travelers, taking advantage of robust demand at the tail end of the peak summer travel season. US airlines, helped by a cut in domestic capacity and fuller planes, have been raising fares to offset the effect of high fuel prices and boost profits. The most recent round of price increases was about two weeks ago. Aug 7, 2006

Air Canada

Air Canada Jazz reported a second-quarter net profit of C$36.6 million ($32.6 million), doubled from net income of C$18 million in the year-ago period, on a 47.1% jump in operating revenues to C$340.1 million. The Regional attributed the strong results to decreasing all unit costs except aircraft rent and fuel, which surged 91.5% to C$34 million, and a 27.8% increase in block hr. The growth is "mainly due to the eight CRJ200s, 12 CRJ705s and 24 CRJ100s that were received in the last half of 2005 and the first half of 2006," it said. Operating income rose 33.2% to $36.5 million as total expenses climbed 48.9% to $99.8 million. With the addition of the new aircraft, capacity grew 66.8% while CASM excluding fuel fell 18.2%. Aug 11, 2006

Air Canada

Air Canada parent ACE Aviation's outright sale of Air Canada Technical Services and the possibility of further offerings of equity in Aeroplan and Jazz, could eventually mean an end to the holding company structure, ACE Chief Executive Robert Milton said. Investors lauded the plan, driving ACE's B-series shares up CAD$2.09, or 7.5 percent, to CAD$29.99 on the Toronto Stock Exchange, their highest level in more than a month. Montreal-based ACE became Air Canada's publicly traded parent in October 2004 following the airline's lengthy restructuring under bankruptcy protection. The current plan is to reduce ACE's capital by up to CAD$2 billion (USD$1.8 billion) over an indefinite period. Shareholders are slated to meet and review the arrangement in October. The various operating entities can benefit from relationships with each other through operating contracts rather than cross ownership, executives said. Aug 11, 2006

Air Canada

Air Canada parent ACE Aviation's said its jump in second-quarter profit was aided by a big gain from the sale of US Airways shares and higher fares, which offset surging fuel costs. It earned CAD$236 million, up from CAD$169 million a year earlier. The latest quarter included a pretax gain of CAD$100 million on the sale of 3.25 million US Airways Group shares. Net income also included a foreign exchange gain of CAD$107 million. Operating income was CAD$181 million, up CAD$3 million from the second quarter of 2005. Revenue was CAD$2.7 billion, up 8 percent from CAD$2.5 billion. It said system-wide yield improved by 3 percent, despite an increase in fuel costs of CAD$101 million, or 19 percent, as the airline's capacity rose 3 percent. Most of the capacity increase was on international and Western Canadian routes. On Thursday, Aeroplan reported a 25 percent increase in net income and Jazz Air said profit jumped more than 50 percent. Aug 11, 2006

American Airlines, Continental Airlines