Airline Finance News - North America

Airguide Online, July 16, 2007

Jul 16, 2007

Airlines would have to triple compensation for passengers involuntarily bumped from flights under one proposal being considered by US transportation officials. The Transportation Department sought public comment on Monday on four proposals to increase the penalty that carriers must pay individual travelers, under certain circumstances, for overbooking flights. A fifth proposal would not change compensation levels now set at a maximum USD$200 if rebooking results in a delay of up to two hours for domestic travel and four hours for international flights. If those deadlines cannot be met, compensation can increase to USD$400. Jul 10, 2007

Air Transport Assn. said data from the first quarter reveals that US airlines' costs rose 10.6% compared to the year-ago quarter. "Costs of running an airline continue to rise. . .driven primarily by a 12.6% [first-quarter] cost surge in fuel," VP and Chief Economist John Heimlich said. "Fortunately, airlines were able to compensate with a 16.7% improvement in fuel efficiency and continued vigilance on other controllable items." The three largest cost components were labor (24.5%), fuel (23.4%) and transport-related expenses (13.9%). Average price paid for fuel increased from $1.83 to $2.06 per gal. Overall operating cost per available seat mile fell 3.8% year-over-year to 12.16 cents. Average breakeven load factor dropped 4.3 points to 77.4%. Jul 10, 2007

American Eagle Airlines

A Plano man was sentenced Friday to federal prison for his role in a counterfeit travel voucher scheme involving his former employer, American Eagle Airlines. Jul 13, 2007

Continental Airlines

Continental Airlines said it contributed an additional $75 million in cash to its defined benefit pension plans, bringing its year-to-date contribution to $211 million. It expects to put in $328 million this year. Jul 13, 2007

Delta Air Lines

Delta Air Lines flew 11.67 billion system RPMs in June, up 5% from the year-ago month, on a 1.5% lift in domestic traffic and a 12.7% surge internationally. Capacity rose 3.3% to 13.59 billion ASMs as domestic fell 2.2% and international climbed 15%. System load factor gained 1.4 points to 85.9%--domestic rose 3.2 points to 87.3% and international fell 1.7 points to 83.4%. Jul 9, 2007

Eos Airlines

David Coltman, CEO of British Caledonian Airways until its takeover by British Airways in December 1987, has joined the board of Eos Airlines, the Stansted based business class only carrier. Jul 11, 2007

Gate Gourmet, deSter Holding

Gate Gourmet reached an agreement to acquire deSter Holding of Amsterdam, the world's leading supplier of items such as cutlery, chinaware and amenity kits, according to Gate Gourmet, which added that deSter also owns Supplair, a provider of "alternative airline meal solutions assembled off-airport." Private equity fund group EQT has owned deSter since 1999. The company, which had sales of [euro]235 million ($320.1 million) in 2006, has operations on three continents and more than 350 airlines as customers. Purchase price was not disclosed. Jul 10, 2007

Midwest Air Group

Air carrier Midwest Air Group on Thursday reported strong gains in monthly traffic and capacity for June, even as revenue per available seat mile fell. Jul 12, 2007

NAV Canada

NAV Canada said it will reduce customer service charges by 4% effective Aug. 1. The cut comprises a previously announced 3% reduction originally scheduled for Sept. 1 and an additional 1% cut good through Aug. 31, 2008. President and CEO John Crichton said customers will save a combined C$50 million ($47.3 million) in FY08 as a result. The 1% temporary reduction is worth C$13 million. NAV Canada also said that due to the introduction of VLJs, daily and movement-based charges will be extended to jet aircraft weighing 3 tonnes or less effective March 1, 2008. Jul 13, 2007

Northwest Airlines

Northwest Airlines flew 6.96 billion consolidated RPMs in June, down 0.7% from the year-ago month, as domestic traffic fell 2.1% and international rose 1.2%. Capacity was up 0.3% on a 2.7% domestic decline and 5.2% international lift. Load factor dropped 1 point to 88% as domestic rose 0.5 point to 87.9% and international declined 3.5 points to 89.6%. Jul 10, 2007

Swissport Internationa

Swissport International appointed Per Utnegaard president and CEO of Swissport Group. He replaces Santiago Olivares, who recently was named CEO of Ferrovial Servicios. Jul 12, 2007

United Airlines

United Airlines flew 10.73 billion system RPMs in June, a 0.3% decline from the year-ago month. Capacity fell 1.2% to 12.03 billion ASMs and load factor was up 0.8 point to 89.1%. Jul 13, 2007

US Airways

US Airways said in a filing with the US Securities and Exchange Commission that Fidelity Investments reduced its stake in the carrier to 8.649%. It remains the largest shareholder in US, according to the Charlotte Business Journal, which reported yesterday that the mutual fund firm sold 32% of its holding and previously owned approximately 12.8% of the airline. Jul 12, 2007