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QANTAS loses a record $2.6 billion for its fiscal year, outlines its fleet plans
QANTAS Group (Jetstar Airways and QANTAS Airways) (Sydney) is changing its corporate organization in the wake of a large (record) financial loss of A$2.8 billion ($2.6 billion) for its fiscal year. The company hopes to attract new foreign investors with these changes.
The main changes is the creation of a holding company that will manage separate domestic and international divisions.
The company also performed a major write down of the value of its aircraft due to currency fluctuations in the past when the aircraft were purchased.
The company issued this full financial report (all figures are in Australian dollars) and its fleet plans.
QANTAS Group has announced an Underlying Loss Before Tax of $646 million and a Statutory Loss After Tax of $2.8 billion for the 12 months ended 30 June 2014.
The Underlying PBT result was driven by the cumulative impact of two years of industry capacity growth ahead of demand, leading to a $566 million decline in FY14 revenue, and by record Australian dollar fuel costs of $4.5 billion – up $253 million from FY13.
In response, QANTAS is driving an earnings recovery and de-leveraging the Group's balance sheet to shape a profitable future and build long-term shareholder value.
The $2 billion accelerated QANTAS Transformation program announced in February is permanently reducing costs and laying the foundations for sustainable growth in earnings.
Transformation benefits totalled $440 million in FY14, including $204 million of second-half benefits from the accelerated QANTAS Transformation program.
A further $900 million of accelerated transformation projects are in the implementation phase, with more than $600 million of benefits from these projects to be realised in FY15.
To date, projects equivalent to more than half the $2 billion target have been delivered or are underway.
Unit costs were reduced by 3 per cent over the year, accelerating from a 2 per cent reduction in the first half to a 4 per cent reduction in the second half.
QANTAS CEO Alan Joyce said the underlying result had been foreshadowed at the Group's half-year announcement in February.
"There is no doubt today's numbers are confronting, but they represent the year that is past," Mr Joyce said.
"We have now come through the worst. With our accelerated QANTAS Transformation program we are already emerging as a leaner, more focused and more sustainable QANTAS Group.
"There is a clear and significant easing of both international and domestic capacity growth, which will stabilise the revenue environment.
"We expect a rapid improvement in the Group's financial performance – and a return to Underlying PBT profit in the first half of FY15, subject to factors outside our control."
Significant one-off costs associated with QANTAS Transformation are recognized in the statutory result, including restructuring and redundancies ($428 million) and primarily non-cash costs relating to early aircraft retirements ($394 million). Of the 5,000 redundancies announced in February, 2,500 have been implemented as at August 28.
At the same time as delivering cost reduction, the Group has taken action to adjust its capacity and network in response to shifts in demand and the competitive environment – while retaining flexibility to make further adjustments if required.
International competitor capacity growth is expected to be 2.4 per cent in the first half of FY15 and domestic market capacity growth is expected to be around 1 per cent, significantly below recent trends for both markets.
Financial Position
Group liquidity at June 30 was $3.6 billion, comprising $3 billion in cash – up around $600 million from the half-year – and $630 million in undrawn committed facilities. With operating cash flow of $1.1 billion, the Group was net free cash flow neutral in FY14.
The Group significantly extended its debt maturity profile through two landmark bond issuances totalling $700 million, with no major unsecured refinancing required before April 2016. Net debt including operating lease liability was reduced by $96 million.
Overall capital investment has been reduced to maximise net free cash flow for debt reduction, while the Group has maintained targeted investment in fleet, product and service to sustain brand and yield premiums for Qantas and Jetstar.
Capital investment was $874 million in FY14. Planned capital investment in FY15 has been reduced from $800 million to $700 million, with a forecast of $800m in FY16.
The Group's average fleet age remains at a 20-year low of 7.7 years, with 35 per cent of the fleet debt-free. Thirty-one new debt-free aircraft have been added since FY10, including seven in FY14.
Outcome of Structural Review
QANTAS today also announced the outcomes of the structural review that commenced in December 2013.
The Group has identified, valued and will continue to assess opportunities to sell non-core assets such as airport terminals, property and land holdings. Any proceeds from such sales will be used to repay debt.
After detailed strategic and structural assessment of QANTAS Loyalty, the decision has been made to retain this highly valuable business within the existing Group structure. It was determined that there was insufficient justification for a partial sale. QANTAS Loyalty continues to offer major profitable growth opportunities.
No new Jetstar ventures will be established while the Group is focused on transformation. Substantial value exists across the Jetstar Group airlines, to be realised over time.
Since 2012, QANTAS' international and domestic airlines have reported their financial performance as separate segments, to strengthen accountability and performance. Following the partial repeal of the QANTAS Sale Act, the Group will establish a new holding structure and corporate entity for QANTAS International. This decision will create the long term option for QANTAS International to attract external investment and participate in partnership opportunities in the international aviation market, with a view to achieving efficiencies and improved returns to shareholders.
Fleet write down
Under accounting standards, the decision to establish a new holding structure and corporate entity for QANTAS International requires a change to QANTAS' Cash Generating Units (CGUs) for impairment testing. The previous 'QANTAS Brands' CGU has been split into four separate CGUs: QANTAS International, QANTAS Domestic, QANTAS Loyalty and QANTAS Freight.
After being tested on a standalone basis for the first time, the QANTAS International CGU requires a write down of $2.6 billion. The size of the write down is largely due to the historic cost of aircraft purchased with an average exchange rate from Australian dollars to U.S. dollars of $0.68.
This writedown is a non-cash charge, recognised in the statutory result, with no cash impact on the Group's or QANTAS International's operations. It is a writedown to the carrying value of aircraft that QANTAS has no intention to sell and intends to retain in its fleet.
Following the write down, the carrying value of QANTAS International aircraft will be more reflective of the current market value of the fleet, and future depreciation expense will be approximately $200 million per year lower as a result of this change.
CEO Comment
Mr Joyce said the Group's priority now was to push forward with the accelerated QANTAS Transformation program after a positive start.
"After an extremely difficult period, we are focused on building momentum with our turnaround in FY15," Mr Joyce said.
"Our cash balance and liquidity position is strong, and the Group's overall financial performance is rapidly improving. We are removing costs to drive earnings growth. And the work we've done over recent years to renew our fleet and improve service has been recognised with a string of awards and record customer satisfaction.
"In February we made a deliberate choice to continue investing in core initiatives for customers in order to hold our competitive position, keep our brands strong and maintain a yield premium in a challenging market. As we transform our business at pace, our airlines are providing better service than ever.
"The structural decisions we announce today give the Group maximum scope to attract capital in a fiercely competitive international aviation market. Standing still while the world changes around us is not an option.
"With our structural review complete, we can move forward with certainty."
Breakdown of Results
QANTAS Domestic
QANTAS Domestic reported Underlying EBIT of $30 million, down from $365 million in FY13.
Group Underlying EBIT, including QANTAS Domestic and Jetstar's domestic operations, was just below $50 million.
The earnings deterioration in FY14 was a result of market capacity increases ahead of demand, weaker demand in the resources and government sectors, price pressure in all industries, unrecovered carbon tax costs and an unfavourable fuel cost of $68 million.
In this volatile market, QANTAS Domestic's strategy of maintaining a capacity, frequency and product advantage over the competition saw it remain Australia's premium carrier of choice.
The airline held an 80 per cent share of the domestic corporate travel market by revenue, including 48 new accounts, eight accounts won back from the competition, 10 accounts lost and 182 accounts renewed.
Comparable unit costs were reduced by 3 per cent as QANTAS Transformation benefits began to flow, helping close the cost gap with the competition.
Both customer satisfaction and customer advocacy were at record levels in FY14, helped by QANTAS Domestic's consistently superior on-time performance.
QANTAS Domestic was Australia's most punctual major domestic airline every month in FY14 and, as at June 2014, had led the competition for 18 straight months – a key factor in winning and retaining corporate accounts.
QANTAS International
QANTAS International reported an Underlying EBIT loss of $497 million, compared with a loss of $246 million in FY13.
The business delivered another strong year of cost reduction, cutting comparable unit costs by 4 per cent, and has now realised more than $400 million of transformation benefits over the past two financial years. However, these benefits were offset in FY14 by competitor capacity growth of 9.5 per cent – well above demand – and record fuel costs.
Fuel price and foreign exchange movements hit Qantas International hardest of any of the Group's businesses, with an impact of $142 million.
Between FY09 and FY14, competitor capacity growth in the Australian international market was 44 per cent, compared with global growth of 29 per cent. Importantly for the Group's outlook, capacity expansion is now slowing, with expectations for competitor growth of 2.4 per cent in the first half of FY15.
By optimizing its network and fleet, including the retirement of older Boeing 747s, QANTAS International is cutting unit costs while improving the travel experience for customers. Retiming the QF9/10 services to Dubai and London, for example, has freed up an A380 to operate on the popular Dallas/Fort Worth route and will lead to a significant increase in asset utilization.
Customer satisfaction reached record levels in FY14 and customer advocacy was a record for the year. New lounges were opened in Singapore, Hong Kong and Los Angeles, while new and expanded codeshare agreements were struck with China Southern, LAN Airlines and Bangkok Airways.
These agreements complement the ground-breaking QANTAS-Emirates partnership launched in FY13. The Dubai route continues to receive the highest customer satisfaction anywhere on the QANTAS International network, with more than 2 million QANTAS customers having already travelled through the hub since the partnership was launched.
QANTAS International now offers its biggest ever global network, with 1,200 destinations available with Qantas and its partner airlines.
Jetstar Group
The Jetstar Group reported an Underlying EBIT loss of $116 million, down from Underlying EBIT of $138 million in FY13.
Controllable unit costs were reduced by 2 per cent. However, these gains were offset by an unfavourable fuel cost of $86 million, a yield decline of $113 million across the highly competitive South East Asian and Australian markets and an increase in associate start-up losses of $20 million. Total associate start-up losses in Asia were $70 million due primarily to the rapid expansion of Jetstar Japan as it consolidates its leading LCC position in the Japanese domestic market.
Jetstar's domestic business in Australia remained profitable – as it has been every year since launch in 2004 – and continued to play its part in the Group's successful two-brand strategy.
Customer satisfaction remains at record levels in Jetstar Airways' domestic and international operations, helped by continued improvement in on-time-performance and the introduction of the Dreamliner on key international routes, including Bali, Phuket and Bangkok.
The Jetstar Group airlines in Asia, in which QANTAS is a minority investor, remain focused on distinct market priorities:
Growth at Jetstar Asia has been suspended in a very challenging Singapore market that saw capacity expand by 23 per cent in FY14, but the business made productivity gains, holds a substantial yield premium to its LCC competitors, and is ranked the nation's leading LCC. Its performance is expected to improve as capacity growth moderates, with market correction already underway.
Jetstar Japan is Japan's largest and fastest growing LCC, having carried over 5 million passengers since launch and opened a second domestic base in Osaka. The launch of operations from the second base is improving unit cost performance, as a result of increased asset utilisation from the 24-hour airport in Osaka. With LCCs still holding just 6 per cent of the Japanese domestic market, the business has significant growth potential.
Vietnam's Jetstar Pacific cut unit costs and increased customer advocacy in a high-growth market. The business has completed its recapitalisation, has begun international services and will expand its fleet from 7 to 10 aircraft by December 2014.
The Board and management of Jetstar Hong Kong continue to work with local regulators towards gaining approval to begin operations.
QANTAS Freight
QANTAS Freight reported Underlying EBIT of $24 million, compared with $36 million in FY13.
Earnings were lower as a result of the sale of Star Track Express in FY13, while global air cargo markets remained challenging. However, the integration of Australian air Express with Qantas Freight is now complete and full run-rate benefits began to flow in the second half of FY14.
The Group expects a return to an Underlying Profit Before Tax in the first half of FY15, subject to factors outside its control.
This is based on the following expectations:
A target of $300 million of Qantas Transformation benefits to be realised in the first half.
A stabilising operating environment, as market capacity growth subsides.
First half fuel costs in line with the first half of FY14.
The repeal of the carbon tax.
Reduced depreciation costs compared with the first half of FY14.
Fleet Update:
The QANTAS Group provided an update on its fleet and network strategy for FY15 and beyond.
Since FY09, the Group has taken delivery of more than 140 aircraft and retired or returned leases for 80 aircraft, resulting in an average fleet age of 7.7 years – the youngest for two decades and significantly below the average in North America, Europe and the Asia Pacific.
The Group's focus now is on maximizing the advantages of this young, competitive fleet, and completing the retirement of older aircraft types.
QANTAS CEO Alan Joyce said the Group's fleet strategy was based on clear, consistent principles:
Increasing fleet utilization in the international and domestic markets.
Putting the right aircraft on the right route.
Offering the best experience in every market for customers.
Realising the cost benefits of new-generation aircraft.
Fleet and Network Changes
Key fleet and network changes completed or announced during FY14 are as follows:
QANTAS International
A more than 5 per cent increase in asset utilization by QANTAS International, including the retime of Melbourne-Dubai-London services and allocation of an Airbus A380 to the Dallas/Fort Worth route from September 2014.
Gradual replacement of Boeing 747s with A330s on routes to Asia, with all Sydney-Singapore and Brisbane-Singapore services to be operated by A330s by the end of September 2014.
Early retirement of four Boeing 747-400s, as the Group works towards the retirement of all non-reconfigured Boeing 747-400s by early 2016. This will leave nine, newer Boeing 747-400s fitted with A380-standard interiors.
Four Boeing 787-8s delivered to Jetstar, allowing the transfer of three A330-200s from Jetstar to QANTAS Domestic.
QANTAS Domestic
Planning for a reduction in average 'turn time' for QANTAS Domestic aircraft to increase utilization, to be implemented during FY15.
The announcement that all the Group's Boeing 737-800s will be refurbished from mid-2015, expanding total Boeing 737-800 capacity by 3 per cent, along with improvements to inflight entertainment systems.
Retirement of all older Boeing 737-400s (completed in February 2014).
Early retirement of seven Boeing 767-300s, with all aircraft of this type to go by the end of 2014. Current fleet size is 10 aircraft.
More targeted use of QANTAS Domestic's bigger A330-200s to reflect demand, with a focus on East-West routes to Perth and peak East Coast services.
All of Network Aviation's seven Brasilia turboprop aircraft have been retired (effective August 2014).
Network aviation now has a single fleet of 12 Fokker F100 jets.
Fleet Renewal and Simplification
In FY14 the Group took delivery of 23 new aircraft, retired 19 older aircraft and returned eight leases.
Under current plans for FY15 the Group will receive 10 new aircraft, retire 18 aircraft and return two leases.
As a result of ongoing fleet retirements and simplification, the Group's mainline fleet will be reduced from 11 different types in FY13 to seven different types in FY16.
Restructured Order Book
The Group announced in February that more than 50 aircraft on order would be deferred or sold to reflect more efficient fleet utilization and slower capacity growth.
In light of the more subdued domestic capacity outlook and shift to more efficient utilization of narrow-body aircraft:
Two QANTAS Boeing 737-800s, including one sourced from the domestic fleet and one from the trans-Tasman fleet, will be sold during FY15.
A decision has been taken not to renew the leases on two QANTAS Domestic A330-200s, meaning these aircraft will leave the fleet in the first half of FY16.
Five Airbus A320ceos on order for Jetstar Airways have been sold, reflecting the more subdued outlook for domestic capacity in FY15.
Two QANTAS Link Bombardier Q300s will be sold during FY15.
In addition:
Orders for 21 Airbus A320ceos have been deferred by four years and converted to orders for 21 of the more-fuel-efficient A320neos, meaning that the Group has orders for a total of 99 A320neos.
The Group has pushed back the first of its 50 Boeing 787 options and purchase rights from 2016 to 2017, in line with the completion of the accelerated QANTAS Transformation plan.
As previously announced, the Group has deferred the final eight Airbus A380s on order for QANTAS International, with an ongoing review of delivery dates to meet potential future requirements.
As previously announced, the Group has deferred the final three of 14 Boeing 787-8s on order for Jetstar.
The Group retains significant flexibility in arrangements with manufacturers and lessors should the competitive environment or capacity forecasts change substantially.
Copyright Photo: John Adlard/AirlinersGallery.com. QANTAS is now planning for an early retirement of seven Boeing 767-300s. All 767s will be gone by the end of 2014. The current 767-300 fleet size is 10 aircraft. Boeing 767-338 ER VH-OGD (msn 24407) arrives at the Sydney hub.
ABX Air to return four Boeing 767-200F freighters to DHL
Air Transport Services Group, Inc. (Wilmington, Ohio) announced its airline subsidiary, ABX Air (Wilmington, Ohio), has received termination notices from DHL affecting four DHL-owned Boeing 767-200 freighter aircraft that ABX Air leases and operates within the U.S. under terms of the Crew, Maintenance and Insurance (CMI) agreement between the companies. DHL sought bids to operate the aircraft from other vendors earlier this year.
The notices are effective in late December 2014 for two aircraft, and in January 2015 for the two remaining aircraft. This reduction in CMI operations for DHL will likely reduce ATSG's earnings from continuing operations by less than one cent per share in 2015. Excluding those four aircraft, ATSG currently operates 21 freighter aircraft over scheduled routes for DHL, including 17 Boeing 767s and four Boeing 757s.
Related to this announcement, Atlas Air announced it will expand its service for DHL Express' North American route network using four additional Boeing 767-200 freighter aircraft owned by DHL. Atlas Air expects to start flying the first incremental aircraft in December 2014, and to operate all four by the end of January 2015.
Copyright Photo: Jay Selman/AirlinersGallery.com. ABX Air's Boeing 767-281 (F) N798AX (msn 23431) arrives in Miami in DHL colors.
Atlas Air expands operations for DHL Express
Atlas Air Worldwide Holdings, Inc. (New York) today (August 27) said that its Atlas Air, Inc. (New York) unit will provide expanded operating service for DHL Express' North American route network using four additional Boeing 767-200 freighter aircraft owned by DHL. Atlas Air expects to start flying the first incremental aircraft in December 2014, and to operate all four by the end of January 2015.
The operation represents a continued expansion of Atlas Air's non-asset-intensive CMI (Crew, Maintenance and Insurance) service solution, as well as its Boeing 767 platform. With the addition of the aircraft to Atlas Air's operating certificate, the company's fleet of Boeing 767s will increase to 15 aircraft, including nine operated for DHL in North America and two for DHL in the Asia-Pacific region.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Atlas Air also operates Boeing 767-300F freighters for DHL. Atlas Air's Boeing 767-3JHF N644GT (msn 37810) dressed in DHL's well-known yellow and red livery arrives in Tokyo (Narita).
American Airlines drops Orbitz in a fee dispute
American Airlines (Dallas/Fort Worth) has issued this statement:
American Airlines has withdrawn its fares from consumer websites powered by Orbitz, effective immediately. American Airlines Group has notified Orbitz it also will withdraw US Airways fares on September 1, 2014. Corporate clients that use Orbitz for Business to book travel are not affected by this change.
"We have worked tirelessly with Orbitz to reach a deal with the economics that allow us to keep costs low and compete with low-cost carriers," said Scott Kirby, President – American Airlines. "While our fares are no longer on Orbitz, there are a multitude of other options available for our customers, including brick and mortar agencies, online travel agencies, and our own websites."
American expects these changes will have minimal disruptions for its customers. Customers can continue to purchase tickets and all options for travel on American and US Airways through aa.com and usairways.com. American and US Airways fares are also available through reservations agents and other travel agencies.
Tickets already purchased through Orbitz websites remain valid for travel, but changes to reservations must be made through each airline's reservations department.
Copyright Photo: Andi Hiltl/AirlinersGallery.com. Boeing 767-323 ER N350AN (msn 33089) lands in Zurich.
Ukraine International is forced to reroute flights around Russia
Ukraine International Airlines-UIA (Kiev) and other other Ukrainian airline have been banned by Russia from using Russian airspace in retaliation to sanctions by the European Union due to the on-going conflict between Russian-backed rebels in eastern Ukraine and the military of the Ukraine. Russia is reportedly considering restrictions on other European airlines for their trans-Siberian flights after Aeroflot's subsidiary Dobrolet (2nd) (Moscow) was grounded by EU sanctions due to the Ukrainian conflict.
The airline issued this statement:
UIA is deeply concerned with destructive actions of the Russian authorities and their controversial stand on transit flights of Ukrainian airlines banned from transit over the Russian territory.
Russia's unilateral actions of banning flights force UIA to significantly lengthen its air routes from Ukraine to the East. This will lead to increase in operating costs by 15-20%, as well as to flight delays, which will cause significant discomfort to passengers.
According to the Main Air Traffic Management Center of the Unified Air Traffic Management System of the Russian Federation, the Russian authorities refuse processing UIA's application to perform flights from Kiev to Kazakhstan, Georgia, Armenia, and Azerbaijan through permitted entry points to the airspace of the Russian Federation.
UIA informs that it is forced to operate flights on lengthened routes, and expresses apologies to all of its passengers and partners for the discomfort caused due to a fault of the Russian authorities.
The company is deeply concerned about the fact that the Russian authorities are trying to use air transport as a tool for political pressure, cynically ignoring the interests of thousands of citizens from dozens of countries being the UIA passengers.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Former United Airlines Boeing 767-322 ER UR-GEA (msn 25280) arrives in Bangkok.
United introduces passport scanning with their mobile app
United Airlines (Chicago) became the first U.S. airline to offer customers the ability to scan their passports to check in for international flights via their iOS and Android mobile devices. United is offering customers the opportunity to use passport scanning functionality on the airline's mobile app as the carrier completes testing.
Customers may access the passport scanning feature when checking in for international flights in the 24 hours before departure. After initiating the app's check-in feature, customers will have the option of verifying their existing stored passport data or scanning their passport. The app uses the mobile device's camera feature to capture travelers' passports, similar to a mobile banking deposit. Jumio Inc., a credentials management company, will then verify the passport for additional security. Once the verification process is complete, customers may obtain a boarding pass. Customers requiring additional travel documentation, such as visas, will continue to check in at the airport.
"We are focused on building the most useful travel app in the industry for our customers," said Scott Wilson, United's vice president of merchandising and ecommerce. "The new passport scanning feature saves valuable time and provides customers with more options to control their travel experience."
United will collect feedback during the testing phase of passport scanning functionality with the goal of further improving the product and launching additional customer-friendly features utilizing this technology.
Last year, United launched its all-new mobile app, and since then more than 13 million customers have downloaded it. CIO Magazine recently selected United as a recipient of its prestigious CIO 100 Award, recognizing the airline's commitment to improving the customer experience with mobile technology. Later this year, United will begin to introduce its all-new united.com website, providing customers a simplified, clearer and faster user experience.
In 2007, United became the first U.S. airline to introduce mobile boarding passes, and it is the first U.S. carrier to offer mobile boarding at all 214 domestic airports it serves. United currently offers mobile boarding at 54 international airports, more than any other U.S.-based carrier.
Copyright Photo: Mark Durbin/AirlinersGallery.com. Up close. United's sleek Boeing 767-424 ER N69059 (msn 29454) rotates on the runway and departs from the San Francisco international hub.
British Airways to suspend flights to Freetown and Monrovia due to Ebola virus fears
British Airways (London) is suspending the London (Heathrow)-Freetown-Monrovia until at least the end of the month due to Ebola virus fears.
Copyright Photo: Karl Cornil/Airlinersgallery.com. Boeing 767-336 ER G-BZHA (msn 29230) arrives at the London (Heathrow) hub.
IAG has its best second quarter since 2007
International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London) reported second quarter net income of €280 million ($376 million) up from €127 million ($170.5 million) net income for the same period a year ago. This is the best second quarter results since 2007.
Read the full report: CLICK HERE
Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-336 ER G-BNWD (msn 24336) of British Airways arrives at Baltimore/Washington.
Delta to drop the Tokyo Narita-Hong Kong route on October 26
Delta Air Lines (Atlanta) is planning to drop the Tokyo (Narita)-Hong Kong route on October 26. The airline is realigning its Pacific network per Airline Route. The route is served with Boeing 767-300 ERs.
In addition, Delta is also dropping the Nagoya-Manila route on October 26.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-332 ER N169DZ (msn 29689) climbs away from the runway at Narita International Airport (NRT) near Tokyo.
Delta Air Lines (current livery):
American Airlines announces new routes to Viracopos International Airport in Campinas, Brazil
American Airlines (Dallas/Fort Worth) has announced it is adding new service to Viracopos International Airport (VCP) in Campinas, Brazil, from American's hubs at Miami International Airport (MIA) and New York's John F. Kennedy Airport (JFK). This will mark American's 10th destination in Brazil.
To operate these new routes, American will transition one daily frequency between Miami and Sao Paulo's Guarulhos International Airport (GRU) and select weekly frequencies between JFK and GRU. The new flight from JFK to VCP will operate three times per week beginning on December 1, 2014, and the daily flight from Miami to VCP will be launched on December 2, 2014, pending government approval. Both routes will be operated with Boeing 767-300 ER retrofited aircraft featuring fully lie-flat Business Class seats with all-aisle access.
By December, American will operate all of its flights between MIA and GRU with Boeing 777-300 ER aircraft, to better match demand for premium seating between these two important destinations. With this change, all flights between GRU and DFW, JFK and MIA will be operated with American's 777-300 ER. The aircraft features a three-class cabin configuration with fully lie-flat seats in First and Business Class, international Wi-Fi, and more customer and cargo capacity than any other aircraft currently in American's fleet.
US Airways service from Charlotte Douglas International Airport (CLT) to GRU will be discontinued beginning October 1, 2014. Charlotte customers will still have access to GRU through American's Latin America gateway in MIA. American will also continue to serve GRU from its hubs in Dallas/Fort Worth, JFK and Los Angeles.
Beginning this winter, the airline will make the following seasonal schedule adjustments to Europe:
In addition, flights to Milano Malpensa Airport (MXP) in Milan, Italy, will now be split between JFK and MIA, with four weekly frequencies from JFK and three from MIA between Jan. 6, 2015, and March 28, 2015.
Campinas Airport is the home of Azul Linhas Aereas Brasileiras which has also announced new long-range routes from Campinas with its new Airbus A330s.
The Campinas area is a city of around five million people and about a one hour drive from Sao Paulo.
Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 767-323 ER N382AN (msn 25451) arrives in New York (JFK).
WestJet reports a record 2Q net profit of $51.8 million, will operate Boeing 767-300 ERs, Encore orders 5 more Q400s
WestJet (Calgary) today announced its second quarter results for 2014, with net earnings of $51.8 million (all amounts in Canadian dollars), or $0.40 per fully diluted share, as compared with the net earnings of $44.7 million, or $0.34 per fully diluted share reported in the second quarter of 2013. Based on the trailing twelve months, the airline achieved a return on invested capital of 13.7 per cent, consistent with the 13.7 per cent reported in the previous quarter.
"We had a great second quarter, reporting record earnings, exceeding our ROIC target for the eighth consecutive quarter, and achieving an on-time performance rate of 84.5 per cent, a year over year improvement of 3.5 percentage points," said WestJet President and CEO Gregg Saretsky. "We continue to execute on our growth plans, including new service to Dublin, Ireland, success with our fare bundles initiative, and the expansion of WestJet Encore. Encore celebrated its first birthday in June, recently welcomed its one-millionth guest, and exercised five additional purchase options for Q400 aircraft. I want to thank all of our 10,000 WestJetters for their commitment to providing our award winning brand of friendly caring service, which is the foundation of our success."
On July 7, WestJet announced that it was in the advanced stages of sourcing aircraft for its entry into wide-body service. A natural, next-step evolution for the airline, WestJet has recently selected four Boeing 767-300 ER aircraft (below) which will initially operate on routes between Alberta and Hawaii during the winter season beginning in late 2015. The airline's current winter service between Alberta and Hawaii, via two Boeing 757-200s operated by Thomas Cook, is ending in the spring of 2015. WestJet expects to expand its operation into overseas markets starting in the summer of 2016. Further announcements regarding WestJet's wide-body schedule will be released at a later date.
Image: WestJet.
On July 28, 2014, WestJet's Board of Directors declared a cash dividend of $0.12 per common voting share and variable voting share for the third quarter of 2014, to be paid on September 30, 2014, to shareholders of record on September 17, 2014. All dividends paid by WestJet are, pursuant to subsection 89(14) of the Income Tax Act, designated as eligible dividends, unless indicated otherwise. An eligible dividend paid to a Canadian resident is entitled to the enhanced dividend tax credit.
In other news, WestJet Encore Ltd. has signed a firm purchase agreement for five Bombardier Q400 NextGen airliners. This transaction is a conversion of a batch of five options booked by the carrier's parent company WestJet and follows the first conversion of five option aircraft announced on March 27, 2014, bringing the number of option aircraft exercised to 10. The initial total of 25 option aircraft was part of the original contract announced on August 1, 2012 that included WestJet's firm order for 20 Q400 NextGen airliners.
WestJet Encore launched in June 2013 operating 10 departures daily to two destinations with two Bombardier Q400 NextGen aircraft and 131 employees. Today, it operates 90 departures daily from hubs in Calgary, Alberta and Toronto, Ontario to 19 destinations with 13 Bombardier Q400 NextGen aircraft and approximately 500 employees. The airline has announced plans to introduce service to Québec City, Québec; Fredericton, New Brunswick and Penticton, British Columbia in 2015.
Copyright Photo: Matt Dueck/AirlinersGallery.com. WestJet will become a new Boeing 767-300 operator. The airline will trade in its wet leased Boeing 757-200s (currently operated by Thomas Cook Airlines) for larger wide-body Boeing 767-300 ERs in 2015. The pictured Boeing 757-28A N750NA (msn 26277) was previously operated by North American Airlines in the WestJet brand.
Jetairfly to expand flights to Florida
Jetairfly (TUI Airlines Belgium) (Brussels) will return to Sanford (near Orlando) on October 24 where it will operate twice weekly Boeing 767-300 ER flights on a Brussels-Miami-Sanford-Brussels routing per Airline Route.
The carrier will also add a separate third weekly return trip to Miami.
Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 767-341 ER OO-TUC (msn 24844) taxies from the gate at Brussels.
Delta to launch the Salt Lake City-Amsterdam route on May 1
Delta Air Lines (Atlanta) will launch a new international route from its Salt Lake City hub to KLM's Amsterdam hub on May 1. The new route will be operated five days a week using Boeing 767-300 aircraft according to Airline Route. It will become daily service on May 17.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-3P6 ER N156DL (msn 25354) arrives at Tokyo (Narita).
Delta to drop Monrovia, Liberia on September 1
Delta Air Lines (Atlanta) is dropping the Monrovia, Liberia extension on the New York (JFK)-Accra route on September 1. The extended route operates three days a week with Boeing 767-300 ER equipment per Airline Route. New York (JFK)-Accra service will continue.
Copyright Photo: Ken Petersen/AirlinersGallery.com. Boeing 767-332 ER N192DN (msn 28449) departs from John F. Kennedy International Airport (JFK) in New York.
Hawaiian adds more flights between Los Angeles and Maui and O'ahu for the November 2014 to January 2015 period
Hawaiian Airlines (Honolulu) has announced it has added more flights between Los Angeles and Maui and O'ahu for the November 2014 to January 2015 period, offering an expanded schedule.
Hawaiian Airlines currently operates daily year-round nonstop service between Los Angeles and Kahului, Maui. Beginning on November 20, a second flight will be added that will range from four-times weekly to daily over seven weeks of service, adding more than 20,000 seats to both Los Angeles and Maui travel markets.
Thrice daily service is currently offered between Los Angeles and Honolulu. Beginning on December 5, a fourth flight will be added that will range from three- to five-times weekly service throughout the month of December. A total of more than 8,400 seats will be added to both Los Angeles and O'ahu travel markets over four weeks of service.
Both seasonal flight additions will be operated by Hawaiian Airlines' wide-body, twin-aisle Boeing 767-300 ER aircraft, seating 264 passengers in a two-class cabin, with 18 in Business Class and 246 in the Main Cabin.
Copyright Photo: Steve Bailey/AirlinersGallery.com. Boeing 767-33A ER WL N580HA (msn 28140) departs from Seattle-Tacoma International Airport (SEA).
JAL to introduce domestic Wi-Fi service on July 23
JAL-Japan Airlines (Tokyo) will be the first Japanese airline to introduce the in-flight Internet service, called "JAL SKY Wi-Fi" on domestic routes. This new service will be on board its revamped "JAL SKY NEXT" aircraft, operated between Tokyo (Haneda) and Osaka (Itami), Fukuoka as well as Hakodate from July 23, 2014.
Under the theme of "A standard that's a step ahead", in addition to the introduction of new cabin interiors, the new in-flight Internet service will support onboard passengers to have seamless connectivity with the ground. JAL SKY Wi-Fi will be progressively expanded to 77 domestic aircraft including JAL's Boeing 777s, 767s and 737s through FY2016.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-346 ER JA613J (msn 33849) arrives at the Tokyo (Narita) hub.
MIAT Mongolian Airlines starts seasonal service to Frankfurt
Mongolian Airlines (MIAT) (Ulaanbator) started twice-weekly summer seasonal service to Frankfurt on June 19 with its Boeing 767-300s. The flag carrier also serves Moscow and Berlin in Europe.
Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-3W0 ER JU-1011 (msn 28149) taxies at Berlin (Tegel).
MIAT-Mongolian Airlines:
LAN is facing a possible mechanics strike on June 26 in Lima, LAN Cargo breaks ground on a new hangar at Miami
LAN Airlines (Santiago) may be somewhat impacted by a possible strike by 70 percent of its LAN Peru (Lima) mechanics maintaining LAN and TAM aircraft. The mechanics are based in Lima, Peru.
The International Transport Workers' Federation-ITF has issued this statement:
The ITF (International Transport Workers' Federation) LATAM network reports that it is hearing of concerns from passengers due to fly on LAN and TAM planes during a strike expected to begin in Peru on June 26. Unions report that more than 200 mechanics – over 70 percent of all LAN Peru mechanics – will not be certifying airplane flights during the strike, which is expected to affect operations across Latin America, including during the World Cup.
LAN Peru aviation mechanics are responsible for the security of the flights of LAN and TAM Airlines (the LATAM Airline Group), and their function is fundamental to the maintenance of the aircraft and the safety of flights.
On June 26-27 a strike is likely to take place, called by the SITALANPE trade union, which represents 70 per cent of all those mechanics. This is expected to result in cancellations and delays across the region. The mechanics are unequivocal: their labor is not replaceable because they are certified to work on the aircraft. "We are the ones that review the planes each time that they land and if we do not sign the logbook of the aircraft, they do not leave. Without our approval, no plane will be able to fly and therefore the whole company will stop," explained Juan Carlos Talavera, a LAN Peru aviation mechanic and press secretary of SITALANPE.
Lima, Peru, is the central hub for maintenance work in the holding company that includes both the LAN and TAM Airlines. The Peruvian mechanics maintain the cargo and passenger aircraft for LAN Argentina, LAN Chile, LAN Ecuador, LAN Peru, and TAM and LAN Cargo.
Dario Castillo Alfaro, the leader of the LAN Chile mechanics' union, commented: "Our mechanics' union is supporting the Peruvian workers and is ready to express its solidarity and support. As Chileans, we are depending on our Peruvian co-workers to protect the aviation sector in Latin America from the kind of cost cutting in operations that threatens the security of our passengers. As LAN and TAM workers we know that on behalf of passengers and aviation workers, it is our obligation to inform customers of potential problems and risks. The future of aviation in South America is being threatened by the company's refusal to negotiate in Peru and Argentina."
In other news, LAN Cargo (Santiago), an affiliate of LATAM Airlines Group, S.A. and part of South America's largest airline group comprised of LAN Airlines and its affiliates and TAM Airlines, officially broke ground on a new 98,242-square-foot state of the art maintenance hangar facility at Miami International Airport. The hangar will be LATAM Airlines Group's first maintenance hangar in the United States. The project represents an investment of more than $15 million dollars and is estimated to create more than 300 new direct and indirect jobs in the first five years, further increasing LATAM Airline Group's participation and commitment to economic growth in Miami-Dade County and the State of Florida.
The new facility includes state of the art design, technology, and meets the highest standards of environmental compliance. The innovative roof design with the tail cupola will accommodate Boeing 777-300 and Airbus A350 size aircraft, and still meet the applicable structure height requirements.
On June 23 ITF issued this subsequent announcement:
This week, the aviation unions of the ITF (International Transport Workers' Federation) Network of LATAM Unions in Chile, Argentina, Ecuador, Peru and Colombia will be taking action to support the mechanics of LAN Peru and the flight attendants of LAN Argentina. The workers will inform passengers in the airport about the actions.
The passengers need to know that the demands of the LAN and TAM Airline workers are fair and that the company has the resources to resolve the conflicts. Aviation labour conditions impact the quality of life of workers and potentially the high standards of service on flights.
LAN Peru Mechanics
On June 26th and 27th, a planned strike of the mechanics union (SITALANPE), who represent 70 percent of the workforce, would affect flights in the country and the region. Licensed aviation mechanics are required to certify all aircraft.
LAN Argentina Flight Attendants
In Argentina, the flight attendants have suffered time and again delays in their collective rights. Since 2005, when the company began operations in Argentina, LAN has refused to sign a collective agreement to regulate the flight attendants' working conditions.
LAN Peru union leader reports detention and threats in the Lima Airport
Juan Carlos Talavera Flores, the press secretary of the SITALANPE union of Peru, has reported that he was detained on Friday, June 20th. He reports that during his detention he was threatened by a security staff from the airport. The security staff introduced himself as being sent by LAN Peru. Mr. Talavera explained that this security staff member told him that LAN Peru was going to bring a legal notary to verify his assumed illegal actions.
Mr. Talvera explains that it was a confusing, frightening and strange action by LAN Peru to intervene with his detention. The leader of the mechanics union states that the police, and the security personnel of the airport sent by LAN Peru, detained him while he was distributing information to the passengers about delays and cancellations which would occur during the upcoming LAN Peru strike of June 26 and 27.
At the police station, the union leader reports that he was searched unfairly for drugs and incriminatory evidence. At the jail, he was threatened. Hours later he was released without charges.
Juan Carlos Talavera Flores, is a leader in the international solidarity campaign to protect aviation standards in South America. His detention was made while he was distributing information in the Jorge Chavez Airport in Lima and answering questions from passengers about the upcoming industrial actions and strikes in LAN and TAM airlines.
Copyright Photo: Bruce Drum/AirlinersGallery.com. LAN Cargo's Boeing 767-316F ER CC-CZZ (msn 25756) approaches the runway at Miami International Airport (MIA).
Dynamic Airways to operate scheduled New York-Georgetown flights
Dynamic Airways (Greensboro, NC) has announced the start of its nonstop service between New York's John F. Kennedy Airport (JFK) and Georgetown, Guyana (Cheddi Jagan International Airport) (GEO) beginning on June 26, 2014.
Dynamic Airways' Boeing 767 will depart JFK every Tuesday, Thursday, Friday and Sunday.
Dynamic Airways is a US certified Part 121 air carrier and changed ownership/management in 2013 with a goal of providing high quality, low-cost medium and long haul air service.
Dynamic Airways has also revealed a brand and logo (below).
Dynamic Airways also offers service between New York (JFK) and Guyana, Hong Kong and Saipan as well as service between Beijing and Guam.
Copyright Photo: Dynamic Airways.
Air Canada rouge to start Vancouver-Los Angeles flights on November 28
Air Canada rouge (Toronto) will introduce Vancouver-Los Angeles service on November 28, supplementing current Air Canada service according to Airline Route.
Copyright Photo: Eddie Maloney/AirlinersGallery.com. Boeing 767-33A ER C-GHPE (msn 33423) is pictured on the ground at Las Vegas.
United Airlines to return to Santiago, Chile
United Airlines (Chicago) will start Houston (Bush Intercontinental)-Santiago, Chile daily service on December 7. The route will be flown with Boeing 767-300 ERs.
Additionally the company will also operate a weekly Houston (Bush)-Punta Cana route starting on December 20 with Boeing 737-800s and a weekly Chicago (O'Hare)-Belize City route also starting also on December 20 with Boeing 737-800 aircraft.
On Monday, June 16 United issued this statement:
United Airlines has announced the company will introduce service to Santiago, Chile, from its hub at George Bush Intercontinental Airport in Houston, beginning on December 7, 2014, subject to government approval.
Houston-Santiago, Chile
Flight UA 847 will depart Houston daily at 9:05 p.m. (2105) and arrive in Santiago at 9:40 a.m. (0940) the next day. Return flight UA 846 will depart Santiago daily at 10:45 p.m. (2245) and arrive in Houston at 5:40 a.m. (0540) the following day. (All times are local.)
The flights are timed to provide convenient connections from Houston to 111 airports across the United States and to more than 60 international destinations.
United will operate its Houston-Santiago service with Boeing 767-300 aircraft with a total of 214 seats – 30 flat-bed seats in United BusinessFirst and 184 seats in United Economy, including 49 extra-legroom United Economy Plus seats.
Additional New Service
United also is boosting its Central America and Caribbean connections, beginning December 20, 2014:
Houston-Punta Cana, Dominican Republic, with year-round service on Saturdays and service on Sundays during periods of expected higher demand
Chicago-Belize City, Belize, subject to government approval, with Saturday service scheduled through early May 2015
This winter, United also plans to expand its Houston-Aruba service. The airline currently offers Saturday Houston-Aruba flights that are scheduled to continue through mid-August 2014. On December 20, the company will resume Saturday service that will continue through early May 2015 and begin service on Sundays for periods of expected higher demand.
Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 767-322 ER N676UA (msn 30028) approaches the runway at Washington's Dulles International Airport.
Ethiopian Airlines to add Madrid on September 2
Ethiopian Airlines (Addis Ababa) will add Madrid to its route map on September 2 via Rome. The route extension will be flown with Boeing 767-300 ER aircraft.
Copyright Photo: Paul Denton/AirlinersGallery.com. Boeing 767-3Q8 ER ET-ANU (msn 27993) prepares at land in Dubai.
Air Canada to convert the Toronto-St. Maarten route to Rouge, St. John's-London route to convert to year-round
Air Canada (Montreal) will convert the Toronto (Pearson)-St. Maarten route to an Air Canada rouge route on December 20. The twice-weekly route will be operated with Boeing 767-300 ER aircraft per Airline Route.
In other news, Air Canada has announced its nonstop St. John's-London (Heathrow) route will now operate year-round beginning on October 26, 2014.
Flights will operate three times a week on Monday-Thursday-Saturday leaving St. John's at 00:40, arriving in London at 09:15, departing from London at 11:05 and arriving back in St. John's at 13:05.
Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 767-333 ER C-FMWU (msn 25585) now with Air Canada rouge arrives back at the Toronto (Pearson) hub.
Transaero to start scheduled Moscow-Taipei service on July 2
Transaero Airlines (Moscow) will start scheduled nonstop flights between Moscow and Taipei on July 2, 2014.
The UN 505/506 weekly flight will be operated from Vnukovo International Airport, Moscow, onboard Boeing 767-300 aircraft according to the following schedule (all times local):
Departure from Moscow depart on Wednesdays at 15.00, arrival in Taipei is at 06.50 the next day. Departure from Taipei depart on Thursdays at 09.40, arrival in Moscow is at 17.30.
Transaero Airlines flew its maiden charter flight from Moscow to Taipei in 2002.
Transaero is the only carrier to fly nonstop flights on the Moscow-Taipei route.
Transaero Airlines launched its flights in 1991. Transaero is the Russia's second largest carrier. In 2013 the airline carried 12.5 million passengers. It ranks among the top 30 airlines in the world in terms of passenger turnover.
Currently, Transaero operates the fleet of 99 aircraft including 20 Boeing 747, 14 Boeing 777, 16 Boeing 767, 44 Boeing 737, three Тu-214, two Тu-204-100С. The airline is the largest operator of widebody aircraft fleet in Russia, the CIS and Eastern Europe. Transaero is the launch customer in Russia of the most modern aircraft such as Аirbus А380, Boeing 747-8I and Аirbus А320 neo.
The network of the airline includes more than 200 routes in Russia, Europe, Asia, Americas and Africa.
Copyright Photo: Richard Vandervord/AirlinersGallery.com. A dramatic takeoff view of Transaero's Boeing 767-3Q8 ER EI-DBF (msn 24745) at Phuket, Thailand.
Delta and Garuda Indonesia to codeshare
Delta Air Lines (Atlanta) and Garuda Indonesia (Jakarta) announced a new codesharing agreement to place the Garuda code on Delta operated flights from Tokyo (Haneda) International Airport to Los Angeles International Airport and Seattle-Tacoma International Airport. The flights will be conveniently timed to connect Garuda Indonesia's flights between Jakarta and Tokyo-Haneda, offering both airlines' customers one-stop travel between Indonesia and the U.S.
The codeshare flights are pending final government approvals and are targeted to be available for purchase in July 2014.
The Delta codeshare flights will be operated with Boeing 767-300 ER aircraft.
Garuda Indonesia will operate its Airbus A330-300 for the Jakarta – Tokyo Haneda route.
Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-332 ER N194DN (msn 28451) departs from Los Angeles International Airport.
Bottom Copyright Photo: Tony Storck/AirlinersGallery.com. Airbus A330-341 PK-GPE (msn 148) taxies at Baltimore/Washington.
Delta starts nonstop Seattle/Tacoma-Seoul flights
Delta Air Lines (Atlanta) on June 2 celebrated new nonstop service from Seattle/Tacoma to Seoul (Incheon) with a gatehouse inaugural ceremony. The flight marked Delta's fourth nonstop international route added from Seattle-Tacoma International Airport in a year, including London-Heathrow, Shanghai-Pudong and Tokyo-Haneda.
On June 16 Delta will celebrate a new international flight with nonstop service to Hong Kong.
In addition to the recently added international service, Delta also currently operates nonstop flights from Seattle/Tacoma to Amsterdam, Beijing, Paris-Charles de Gaulle and Tokyo-Narita. By this summer, Delta will offer more international service from Seattle/Tacoma than all other carriers combined with more than 2,500 daily long-haul international seats as part of the market's 86 peak-day departures to 26 destinations.
The Seoul flight will operate using a 210-seat Boeing 767-300 ER aircraft with 35 full-flat bed seats in BusinessElite, 32 seats in Economy Comfort and 143 Economy class seats. Delta is the only carrier to offer full flat-bed seats with direct aisle access in BusinessElite on every long-haul international flight from Seattle along with Economy Comfort seating and entertainment on demand in every seat throughout the aircraft.
Delta currently operates 76 peak-day departures to 25 destinations from Seattle/Tacoma, and every flight offers BusinessElite/First Class and Economy Comfort seating as well as Wi-Fi service on all domestic aircraft. Delta also introduced international Wi-Fi on its Boeing 747-400 fleet earlier this year and will complete installation of Wi-Fi service on its entire long-haul international fleet by the end of 2015. The airline has also invested $15 million in its facilities at Sea-Tac, including its Delta Sky Club and recently completed lobby renovations, Sky Priority services, new gate area power recharging stations, expanded ticket counters and enhancements to the international arrivals area.
Bloomberg Businessweek article: "The Battle of Seattle" between Alaska Airlines and Delta Air Lines is getting serious. Read the full article: CLICK HERE
Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 767-332 ER N175DN (msn 24803) taxies to the gate at Seattle-Tacoma International Airport (SEA).
Ethiopian today adds a new route to Vienna, Austria
Ethiopian Airlines (Addis Ababa) has announced the start of four weekly flights to Vienna, Austria starting today (June 2).
Ethiopian flights to Vienna will bring the total number of its international destinations across five continents to 82. The city will mark the 9th European city served by the airline. Thru commercial cooperation with Austrian Airlines, a fellow Star Alliance member with strong network in Central Europe, Ethiopian aims to provide seamless and convenient connectivity options for travelers between Africa and European cities such Prague, Bratislava, Warsaw, Budapest, and Bucharest, subject to regulatory approval.
Copyright Photo: Antony J. Best/AirlinersGallery.com. Boeing 767-3BG ET-ALH (msn 30565) arrives in London (Heathrow).
AeroLap Paraguay Airlines is planning to launch its first route to Madrid in December
AeroLap-Paraguay Airlines (Asuncion) is now planning to launched scheduled passenger operations in December according to Negocios. The first route will link Asuncion with Madrid with Boeing 767-336 ER N254MY (msn 25443).
According to the report, the new airline is investing $180 million in starting operations. Company representatives met with the Paraguayan Association of Travel and Tourism Enterprises (Asatur) to give them an update.
Copyright Photo: AeroLap. The company now appears to emphasizing the name "Paraguay Airlines" with this new photo from the company.
TAM Airlines doubles the number of overnight flights from New York to Sao Paulo
TAM Airlines (TAM Linhas Aereas) (Sao Paulo), part of LATAM Airlines Group, has just introduced seven weekly night frequencies between New York and São Paulo (Guarulhos). The new flight will double TAM's overnight flights to Sao Paulo in August and replace the existing daytime flights JJ 8082 and JJ 8083.
The new flight JJ 8103 (New York – São Paulo/Guarulhos) will depart New York (JFK) at 10:00 p.m. (2200) and land in São Paulo at 8:50 a.m. (0850) with the return flight JJ 8102 departing São Paulo (Guarulhos) daily at 9:50 p.m.(2150) and arriving in New York (JFK) at 6:55 a.m. (0655).
The increase in these night services reflects customers' preference for traveling overnight and arriving at their destinations in the early hours of the following day, either to participate in business meetings or to visit the city's tourist attractions.
The new service will be operated by Boeing 767-300 aircraft (from LAN Airlines), whose interiors have been completely refurbished providing full-flat seats that recline 180o, as well as increased leg room in Business Class. Passengers in Business and Economy will also have access to individual on-board entertainment services in both cabins, with around 100 movies from diverse genres and TV series, and can listen to music and browse the duty free product catalog. Children can enjoy the exclusive entertainment package that consists of cartoons, movies and games.
The other seven night frequencies offered by TAM are currently operated by Boeing 777-300 aircraft under flight numbers JJ 8080 and JJ 8081. In line with the company's objective of continuously improving its products, the Boeing 777-300 fleet will be refurbished starting in September (TAM is removing the first class section from the 777-300) and will be back in operation in March 2015 . During this period, the flights will be operated by TAM's Airbus A330 aircraft.
Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com. Boeing 767-33A ER PT-MSU (msn 27376) completes its final approach back to the Sao Paulo (Guarulhos) base.
The Teamsters target the pilots of Florida West for unionization
The Teamsters Airline Division has announced the start of a new initiative to organize the pilots at Florida West International Airways (2nd) (Miami). The pilots fly routes throughout the U.S., Latin America and the Caribbean.
According to the union, "Teamsters Local Union 1224, an airline-specific chapter based in Wilmington, Ohio, will provide organizers and personnel with knowledge of the international air cargo industry to assist Local Union 769 in Miami, Florida with the campaign."
If unionized, the FWIA pilots will be represented by Teamsters Local Union 769 in Miami.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-346F N422LA (msn 35818) departs from Los Angeles International Airport.
Air Canada to convert more leisure routes to Air Canada rouge
Air Canada (Montreal) has announced that its leisure carrier subsidiary, Air Canada rouge (Toronto-Pearson), is expanding service to Hawaii with the introduction of new year-round nonstop flights between Toronto and Honolulu. The new route, offering the only nonstop service between Toronto and Hawaii, will begin on November 26, 2014. Flights will be operated using Air Canada rouge Boeing 767-300 ER aircraft offering a choice of two cabins with three choices of service, personal space and comfort.
In addition, Air Canada announced that existing year-round nonstop service from Vancouver to Honolulu and Maui, currently operated by Air Canada, will be converted to daily Air Canada rouge Boeing 767-300 ER service effective on November 21 and December 1, 2014, respectively.
As part of its Air Canada rouge winter schedule to Caribbean destinations, twice-weekly seasonal service from Toronto to St. Maarten, previously operated by Air Canada, will be converted to Air Canada rouge Boeing 767-300ER service effective on December 20.
Air Canada will continue to evaluate future market opportunities as new aircraft are introduced into its mainline fleet and existing aircraft are released for operation by Air Canada rouge as market demand warrants. Since the launch in July 2013 of Air Canada rouge, Air Canada has deployed its leisure carrier to a growing number of Caribbean, European and select sun destinations in the United States.
With the addition of the Hawaii and St. Maarten routes, together with its previously announced summer 2014 schedule to Europe, the Caribbean and the United States, Air Canada rouge plans to operate a total of 58 routes by next winter, including service this summer to Barcelona, Dublin, Lisbon, Manchester, Nice and Rome.
Air Canada rouge's aircraft feature three customer comfort options: rougeTM, rouge PlusTM with preferred seating with additional legroom, and Premium rougeTM with additional space and enhanced service on the Boeing 767-300 ER and on select Airbus A319 routes. Air Canada rouge offers a unique brand of customer service designed to make every flight a memorable start and end to a wonderful vacation. Aircraft are equipped with player, a next generation in-flight entertainment system that wirelessly streams entertainment to customers' personal electronic devices. Flights provide stylish and modern cabin interiors with new Slimline seats which have a trim profile that offers more personal space, and the ability to earn and redeem Aeroplan miles.
Air Canada rouge operates a fleet consisting of Boeing 767-300 ER and Airbus A319 aircraft transferred from Air Canada. By the end of May 2014, Air Canada rouge's fleet will include six Boeing 767-300 ER aircraft and 18 Airbus A319 aircraft.
Air Canada's mainline fleet renewal is ongoing with the introduction of new aircraft. In May, the airline took delivery of its first 787 Dreamliner and is scheduled to receive a total of six 787 aircraft in 2014 with the remaining 31 scheduled between 2015 and 2019. In February 2014, Air Canada took delivery of the last of five new Boeing 777-300 ER aircraft to enter its mainline fleet.
Copyright Photo: TMK Photography/AirlinersGallery.com. Boeing 767-333 ER C-FMWV (msn 25586) arrives back at the Toronto (Pearson) hub.
Asian Air commences charter flights to Japan, will introduce a "Mirai Suenaga" logo jet in June
Asian Air (Bangkok) is a new airline charter airline which commenced operations in March. The company is now operating Boeing 767-200s between Bangkok's Don Muang Airport (DMK) and Tokyo (Narita) (NRT). The flights started on March 15. The airline is expected to add flights soon to Sapporo (New Chitose) and Osaka (Kansai) with a second Boeing 767.
In addition, charter flights to Thailand's neighboring countries will also be operated according to the company.
Top Copyright Photo: Akira Uekawa/AirlinersGallery.com (all others by Asian Air). Boeing 767-2J6 ER HS-DCM (msn 23307) was painted in Miami and was formally delivered to the company on January 8, 2014. HS-DCM is pictured lining up on runway 16R at Tokyo (Narita) as flight DM 465 bound for DMK.
Asian Air has announced a partnership with "Mirai Suenaga", the famous cartoon series on Japanese TV. A Boeing 767 in June will have these cartoon images of Mirai Suenaga applied to the fuselage.
AmeriJet announces a new West Coast cargo hub at Reno, Nevada
AmeriJet International, Inc. (Fort Lauderdale/Hollywood and Miami) has announced its U.S. growth plan, including agreements with the Rickenbacker and Reno airports for the development of two domestic air cargo hubs in Ohio and Nevada.
On July 7, AmeriJet will begin daily operations between its new hubs providing long-haul air freight service connecting eleven cities coast to coast for intercontinental and domestic freight.
Amerijet' s Pamela Rollins, Sr. V.P. Business Development said, "Amerijet' s dedicated B767 wide body cargo planes will operate exclusively between these hubs and will provide our customers with additional options for expedited and heavyweight domestic freight. We believe this product fills the need for select services once the mainstay of companies such as Burlington Air Express, Kitty Hawk, Emery and other all cargo carriers who did not survive the economic turmoil of the last decade. Our new freighter service is ideal for shipments moving on long-haul lanes over 1,500 miles, especially those in need of time-critical and high-value, temperature controlled or hazardous material shipments."
"This exciting new coast-to-coast freight service will benefit both businesses and consumers that count on efficient and cost-effective supply chain solutions," said Elaine Roberts, President & CEO of the Columbus Regional Airport Authority, which operates Rickenbacker International Airport. "Rickenbacker is well-equipped and perfectly positioned to meet Amerijet's needs as a key hub for this service and we look forward to building a strong, successful partnership with them."
"Amerijet's selection of Reno-Tahoe International for its west coast operation is amazing news for our airport and our community," Marily Mora, President/CEO of Reno-Tahoe International Airport, said. "Their unique, cost-effective business model, that will blend air cargo with trucking, is a perfect fit for our growing list of distribution centers. We are proud to welcome Amerijet, and their CEO Dave Bassett, to our community."
Rollins further added "This service connects Seattle/Tacoma, San Francisco, Los Angeles, Phoenix and Reno on the west coast with Columbus, Chicago (O'Hare), Detroit, Philadelphia, Newark and Atlanta on the east coast with 1-2 day service. Our customers are going to benefit from late local cut-off times, typically between 7-9pm and early recovery times, including Saturdays. This new network will also connect to our Miami Hub providing our customers with a faster and cost effective way to seamlessly move their freight between our domestic and international routes."
AmeriJet International, Inc. is full‐service multi‐modal transportation and logistics provider, offering U.S. Domestic and International, scheduled all‐cargo transport via land, sea, and air. Amerijet connects over 30 major cities in the U.S. with more than 600 destinations worldwide, providing global transportation solutions for customers throughout the Americas, Mexico, the Caribbean, Europe, Asia, and the Middle East.
Copyright Photo: Jay Selman/AirlinersGallery.com. Formerly operated by Delta as a passenger aircraft, converted Boeing 767-232 (F) freighter N743AX (msn 22218) approaches the runway at the Miami International Airport (MIA) cargo hub.
American quietly retires the last two Boeing 767-200s (for now)
American Airlines (Dallas/Fort Worth) as planned and previously reported, quietly replaced and retired its last two Boeing 767-200s that were operated at the end on the trans-continental routes. The two venerable aircraft were replaced with new Airbus A321s.
Officially the last revenue flight was operated with the pictured Boeing 767-223 ER N319AA (msn 22320) on flight AA 30 from Los Angeles to New York (JFK) departing LAX on the evening of May 7 and arriving at JFK during the early morning of May 8 per Frequent Business Traveler.
The pictured N319AA was delivered to AA on November 18, 1985 and was retired after almost 29 years of faithful service.
American began operating the type in 1982. However when US Airways is finally merged into the "new" American Airlines, AA will again operate the type.
US Airways continues to operate the Boeing 767-200. US Airways will draw down its 767-200 fleet and to continue to operate the type into 2015. Both American Airlines and US Airways are now part of the American Airlines Group. Eventually US Airways will be merged into American as the two carriers work towards a single operating certificate (SOC). When this happens, the new and larger American will be operating the type once again albeit for a short time again.
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-323 ER N319AA departs from Los Angeles before the retirement. The old Boeing 767-200s are not likely to be repainted into the new 2013 American Airlines livery, even when the US Airways Boeing 767s join the fleet. It is just too impractical for this soon to be retired aircraft type. The 1968 American livery will probably be the last color scheme worn by the AA 767-200s.
American Airlines (current livery):
Cargojet Airways leases two Boeing 767-200 ERF freighters from Air Transport Services Group
Air Transport Services Group, Inc. (Wilmington, Ohio), the sister company of ABX Air and ATI, has announced it has signed a new agreement with Cargojet Airways (Hamilton, Ontario), Canada's cargo airline, to lease two Boeing 767-200 ER freighters.
Cargojet currently dry-leases two Boeing 767-200 freighters from ATSG's subsidiary Cargo Aircraft Management Inc. (CAM) under long-term agreements. Cargojet has signed agreements to dry-lease an additional two Boeing 767-200 freighters from CAM, for up to three years. The first aircraft is expected to be delivered by the end of the second quarter, with the second aircraft delivering early in the third quarter.
Cargojet is currently in the process of a fleet renewal plan. Leasing these two additional 767-200 freighters is part of the company's current growth strategy. The cargo airline is gearing up its fleet for the upcoming Canada Post/Purolator contract. The airline is also phasing out its Boeing 727 freighter fleet, one of the last operators of the trijet in North America.
Copyright Photo: Reinhard Zinabold/AirlinersGallery.com. Formerly operated by American Airlines, Boeing 767-223 (F) C-FMCJ (msn 22316) is pictured landing at the Hamilton base.
Air Canada files for Toronto-Rio de Janeiro service
Air Canada (Montreal) has filed an application with the National Civil Aviation Agency (ANAC ) of Brazil to fly from Toronto (Pearson) to Rio de Janeiro (Galeão Airport) with three weekly frequencies according to Melhores Destinos. Air Canada has proposed to start the new route on December 12. This follows the recent announcement by TAM Airlines that it wants to fly to Toronto from Sao paulo.
Under the application, flight AC 98 will depart from Toronto at 1:55 a.m. (0155) and arrive in Rio de Janeiro at 12:25 (1225). Return flight AC 99 will depart from Galeão at 9:45 p.m. (2145) and arrive in Toronto at 8:45 a.m. (0845) the following day. AC proposes to start operations with Boeing 767-300 equipment.
Copyright Photo: Reinhard Zinabold/AirlinersGallery.com. Boeing 767-38E ER C-GBZR (msn 25404) approaches the runway at the Lester B. Pearson International Airport in Toronto.
Delta to offer year-round flights to Zurich and expanded service to Rome
Delta Air Lines (Atlanta) will offer new year-round daily service from John F. Kennedy International Airport to Zurich Airport and expanded service to Rome's Leonardo Da Vinci International Airport.
The Zurich flight will be operated using a Boeing 767-300 ER aircraft featuring full flat-bed seats with direct aisle access in the BusinessElite cabin. Daily Zurich service will begin effective June 16, 2014 and during the summer will complement the airline's existing service from Atlanta. Rome service will operate daily from April to October on an Airbus A330-300 aircraft, and then five times per week in November, December and March on a Boeing 767-300 ER aircraft in conjunction with Delta joint venture partner Alitalia.
Effective this winter, Delta and its joint venture partners Air France-KLM and Alitalia are also expanding service to key European hubs at Paris Charles De Gaulle International Airport and Amsterdam Schiphol International Airport from Hartsfield-Jackson Atlanta International Airport. From Atlanta, the joint venture will offer additional daily nonstop service for a total of four daily flights to both Amsterdam* and Paris, timed to provide customers with more connecting opportunities to destinations throughout Europe, the Middle East and Africa.
Copyright Photo: Rodrigo Cozzato/AirlinersGallery.com. Boeing 767-332 ER N175DZ (msn 29696) in the SkyTeam motif arrives at Sao Paulo (Guarulhos).
Bottom Copyright Photo: Delta Air Lines. A picture of the cabin of Delta's first refurbished trans-con Boeing 757-200. Routes from JFK will offer BusinessElite® flat-beds, LED mood lighting, expanded Economy Comfort™ seating & larger In-flight Entertainment screens.
Beginning July 1, 2014, Delta will operate three updated Boeing 757-200 aircraft with full flat-bed seats on the trans-continental route between New York (JFK) and Los Angeles (LAX). These will be the first 757 aircraft in service to feature Delta's previously announced upgrades including full flat-bed seats in BusinessElite on transcon flights between JFK and LAX, SFO and SEA. All trans-con flights on these routes will feature full flat-bed seats by summer 2015.
Atlas Air Worldwide Holdings reports first quarter net income of $7.9 million, places two Boeing 747-8F freighters with DHL
Atlas Air Worldwide Holdings (Atlas Air and Polar Air Cargo) (New York) reported first quarter net income of $7.9 million, down 60.4 percent from the same quarter a year ago
Atlas Air Worldwide Holdings is the parent company of Atlas Air and Titan Aviation Leasing and majority owner of Polar Air Cargo.
The company issued this full statement:
Atlas Air Worldwide Holdings, Inc. announced adjusted net income attributable to common stockholders of $11.3 million, or $0.45 per diluted share, for the three months ended March 31, 2014, compared with $5.9 million, or $0.22 per diluted share, for the three months ended March 31, 2013.
On a reported basis, net income attributable to common stockholders in the first quarter of 2014 totaled $7.9 million, or $0.32 per diluted share, compared with $20.1 million, or $0.76 per diluted share, in the year-ago quarter.
Adjusted earnings in the first quarter of 2014 exclude a special charge of $3.4 million after tax, or $0.13 per diluted share, mainly related to the company's U.K. affiliate, Global Supply Systems Limited. Adjusted earnings in the first quarter of 2013 exclude an income tax benefit of $14.2 million, or $0.54 per diluted share, related to the tax treatment of extraterritorial income.
"2014 is off to a good start, led by the initiatives we've undertaken to diversify our business mix, expand our aircraft and service offerings, develop new customers and position Atlas to take advantage of market opportunities," said William J. Flynn, President and Chief Executive Officer.
"Within our ACMI segment, results benefited from an increase in the number of new 747-8 freighters in operation as well as an increase in flying for our CMI customers. In Dry Leasing, the investments we've made since early 2013 in attractive, modern 777 freighters on long-term leases with strong customers drove a significant increase in contribution from sources with highly predictable revenue and earnings streams.
"In addition, the expansion of our 767 aircraft service solutions and our growth into passenger charter operations supported the improvement in our results despite a seasonally soft contribution in Commercial Charter and the continued reduction in AMC Charter cargo volumes.
"Reflecting our global market leadership in outsourced aircraft assets and services, we have developed several new strategic customer relationships since the first quarter of 2013 that have enhanced the resilience of our business model.
"In ACMI, these include Astral Aviation, BST Logistics and Chapman Freeborn. We've also expanded with Etihad Airways, introduced new 767 cargo CMI service for DHL Express, and added VIP 767 passenger CMI service for MLW Air. And in Dry Leasing, we now provide 777Fs to Aerologic, Emirates Airlines and TNT Transport International."
Separately, the company announced the placement of two 747-8 freighters in ACMI service for DHL Express. The state-of-the-art aircraft will provide additional revenue cargo volume for DHL's transpacific network growth. They replace two 747-400 freighters currently in service for DHL that will enter immediate revenue service for Atlas.
We are encouraged by our first-quarter performance and the positive direction of market trends so far in 2014, but we are maintaining our earnings outlook for the full year.
Airfreight volumes are improving, and recent forecasts suggest that airfreight demand will grow by a few percentage points in 2014 – the first real growth after three essentially flat years. Forecast airfreight yields continue to lag behind, however.
With still limited visibility into second-half airfreight market demand and yields, we continue to expect results in 2014 to approximate 2013, excluding an expected decline in our AMC Charter operations as we have previously discussed.
On a per share basis, earnings in the second quarter of this year should be similar to or slightly higher than our adjusted first-quarter earnings. As the majority of our earnings are typically generated in the second half of the year, we expect to update our expectations as the year progresses.
For the full year, we expect total block hours to be a few percentage points lower than 2013 block hours, with more than 70% in ACMI, less than 10% in AMC Charter, and the balance in Commercial Charter. Our Dry Leasing segment should show dramatic growth, with a contribution run rate in subsequent quarters that should be similar to the first quarter of 2014. Aircraft maintenance expense in 2014 should total approximately $175 to $180 million, and depreciation should be approximately $115 to $120 million. In addition, we anticipate an effective income tax rate of approximately 30%.
We remain confident in the resilience of our business model and our ability to leverage the scale and efficiencies in our operations. The business initiatives we have undertaken and the investments we have made have transformed the company to deliver meaningful earnings in any environment.
Should 2014 be the inflection point when growth returns to commercial airfreight and yields improve, our business initiatives and the investments we have made have positioned Atlas to be one of the prime beneficiaries.
Copyright Photo: Manuel Negrerie/AirlinersGallery.com. Atlas Air also operates the Boeing 767-300F freighter for DHL. Boeing 767-3JHF ER N643GT (msn 37809) arrives at Taipei (Taoyuan).
21 Air joins the ACMI leasing business with two Boeing 767-200 freighters
21 Air, LLC (Greensboro) is a new North Carolina corporation based in Piedmont Triad International Airport at Greensboro, NC. The company has been created as a marketing vehicle operating in the international ACMI (Aircraft Crew Maintenance and Insurance) and charter markets, to become an Air Cargo Solutions provider. 21 Air currently manages two Boeing 767-200F ERs (ex TAMPA Cargo and Avianca Cargo 767-241F ER N769QT msn 23801 and N768QT msn 23803). The aircraft are operated under U.S. 121 carrier air operator certificates by Dynamic Airways.
Copyright Photo and Images: 21 Air.
AmeriJet to start a new cargo operation at Rickenbacker International Airport on July 7
AmeriJet International, Inc. (Fort Lauderdale/Hollywood and Miami) has announced its selection of Rickenbacker International Airport as one of its key air cargo hubs connecting eleven cities within the U.S.. Amerijet continues to spread its wings and has signed a long-term lease agreement with the Rickenbacker Airport for a 20,000 square foot facility, including five loading dock doors, located at 2566 Jerrie Mock Ave, Columbus, Ohio 43217. Service from Rickenbacker starts on July 7, with dedicated Boeing 767 wide body freighter service for intercontinental and domestic freight coast to coast.
AmeriJet International, Inc. is a full-service multi-modal transportation and logistics provider, offering U.S. Domestic and International, scheduled all-cargo transport via land, sea, and air. AmeriJet connects over 600 destinations worldwide, providing global transportation solutions for customers throughout the Americas, Mexico, the Caribbean, Europe, Asia, and the Middle East.
Schedules from the Miami hub: CLICK HERE
Copyright Photo: Bruce Drum/AirlinersGallery.com. Ex-Delta Boeing 767-232 (F) N743AX (msn 22218) arrives back at the Miami cargo hub.
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United Airlines launches Houston-Munich flights
United Airlines (Chicago) yesterday (April 24) launched daily nonstop service between its Houston hub at George Bush Intercontinental Airport and Munich, linking the fourth-largest city in the U.S. with the capital of Bavaria.
United will operate the service with Boeing 767-400 aircraft with 242 seats – 39 in United BusinessFirst and 203 in United Economy, including 70 Economy Plus extra-legroom seats.
Flight UA 104 departs Bush Intercontinental daily at 4:10 p.m. (1610) and arrives at Munich's Franz Joseph Strauss International Airport at 9:50 a.m. (0950) the next day. On the return, flight UA 105 will depart Munich at 9:30 a.m. (0930) and arrive in Houston at 2:20 p.m. (1420) the same day.
The new Munich flights complement the daily nonstop service between Houston and Frankfurt that both United and its joint-venture partner Lufthansa offer today.
United is the leading U.S. carrier to Germany, operating year-round nonstop flights to five German cities from hubs in Chicago, Houston, New York, San Francisco and Washington.
Copyright Photo: Arnd Wolf/AirlinersGallery.com. Boeing 767-424 ER N76055 (msn 29450) in the Star Alliance motif taxies at Munich.
UPS produces an operating profit of $1.5 billion in the first quarter, down $106 million due to harsh winter weather
UPS (United Parcel Service) (UPS Airlines) (Atlanta) today released first quarter 2014 results. Diluted earnings per share totaled $0.98, a $0.06 decline from first quarter 2013 adjusted results. Operating profit for the quarter was $1.5 billion, down $106 million from the prior-year's adjusted results. Unusually harsh weather weighed on operating profit by approximately $200 million, due to increased expenses and slower revenue growth. Average daily shipments in the U.S. climbed 4.2% driven primarily by large e-commerce shippers using lightweight deferred shipping solutions.
The International segment operating margin expanded to 14.0% on daily volume growth of 7.9%. Supply Chain and Freight experienced improved operating profit and margin expansion.
For the first quarter of 2013, UPS reported diluted earnings per share of $1.08, which includes $36 million in after-tax gains related to the attempted acquisition of TNT.
"Much of the U.S. economy was negatively affected by the severe weather conditions in the first quarter, resulting in lower UPS operating results versus the prior year," said Scott Davis, UPS chairman and CEO. "International and the Supply Chain and Freight segment benefitted from positive momentum during the quarter as customers utilized the strategic investments made by UPS to strengthen our portfolio."
Cash Flow
For the three months ended March 31, UPS generated $1.9 billion in free cash flow. The company paid dividends of $596 million, up 8.1% per share over the prior year, and repurchased 6.8 million shares for approximately $660 million.
U.S. Domestic Package
U.S. Domestic revenue increased 2.6% over the prior-year period, to $8.5 billion. Daily volume improved 4.2%, led by UPS SurePost and UPS Second Day Air.
The segment generated $927 million in operating profit, down $158 million compared to the prior year, due to the impact of severe winter weather. The company experienced lost revenue and additional cost as a result of significant network disruptions on more than half of the operating days during the quarter. Overtime wages, purchased transportation and snow removal costs increased substantially over the prior year. Operating margin contracted 220 basis points to 10.9%.
Revenue per package declined 1.5% from the previous year due to changes in customer and product mix, as well as lower fuel surcharges. Product mix continues to be impacted by the rapid increase of UPS SurePost. More e-commerce retailers are choosing this product to serve their value-conscious customers.
International Package
The International segment revenue improved 5.0% and produced operating profit of $438 million, 12% more than the prior-year adjusted results. Operating margin expanded to 14% driven by improved network efficiency and in-country leverage.
On a reported basis, the segment recorded operating profit growth of 24% more than the prior-year result of $352 million. This reflects the operating profit impact of a $39 million net charge in 2013, related to the attempted acquisition of TNT.
Export shipments climbed 7.7% driven by 15% growth in Europe and modest gains in Asia and the Americas. Transborder shipments in Europe continue to expand rapidly as customers migrate to Pan-European distribution using UPS solutions.
To support strong Intra-European growth and intercontinental trade, the company announced the completed expansion of its Cologne, Germany, air hub. This $200 million investment increased facility capacity by 70%.
Non-U.S. Domestic deliveries increased 8.1%, driven by growth in Europe and Canada. Poland led the European countries with more than 20% growth, while Germany and the U.K. contributed strong gains.
Average revenue per package declined 2.1% due to product mix changes as non-premium Export products jumped almost 13%, overshadowing improved growth in premium products.
Supply Chain & Freight
Supply Chain and Freight operating profit increased 3.5% to $148 million. Operating margin expanded 30 basis points to 6.8%, driven by gains in the Forwarding and Distribution units.
The Forwarding business delivered improved operating profit and margin gains during the quarter as the unit adapted to market changes. International Air Freight growth in shipments and tonnage were offset by lower revenue per pound. Ocean Freight and Brokerage showed both improved revenue and operating profit.
Gains from retail and healthcare customers drove higher revenue growth in the Distribution business unit.
Operating profit improved more than 10% despite additional expansion costs during the quarter.
UPS Freight revenue increased slightly on a 3.1% increase in LTL revenue per hundredweight. Both tonnage and operating profit were negatively impacted by the severe winter weather.
"During the quarter, the momentum of the underlying business was masked by the disruption of inclement weather," said Kurt Kuehn, UPS chief financial officer. "We are encouraged by the positive trends in our business and expect the remainder of the year to perform as we originally guided. However, due to the challenging start to 2014, we anticipate diluted earnings per share to be at the low end of our full-year guidance range of $5.05 to $5.30."
Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-34AF ER N328UP (msn 27754) in Blended Winglets prepares to land at Philadelphia International Airport (PHL).
American Airlines Group reports a record first quarter net profit of $480 million
American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) today reported its first quarter 2014 results.
First quarter 2014 net profit was a record $480 million. This represents a $777 million improvement versus the company's combined first quarter 2013 net loss of $297 million.
Excluding net special credits, the company reported a record first quarter net profit of $402 million. This represents a $340 million year-over-year improvement versus the company's combined net profit of $62 million excluding net special charges in the first quarter 2013.
First quarter 2014 pretax margin excluding net special credits was 4.1 percent, a 3.6 point year-over-year improvement.
The company ended the quarter with $10.6 billion in total cash and short-term investments. Since the close of the merger, the company has used more than $542 million of cash to reduce its diluted shares outstanding by approximately 20 million.
For the first quarter 2014, American Airlines Group reported a record GAAP net profit of $480 million. This compares to a net loss of $341 million in the first quarter 2013. The company's GAAP results for the first quarter 2013 reflect AMR Corporation prior to the merger.
The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period. See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.
First quarter 2014 net profit excluding net special credits was a record $402 million. This compares to a combined non-GAAP net profit of $62 million excluding net special charges for the same period in 2013. Excluding net special credits, first quarter 2014 diluted earnings per share was $0.54.
"We are very pleased to report a record profit in our first full quarter as a merged company," said Doug Parker, CEO of American Airlines Group. "Our team of dedicated professionals did an excellent job of taking care of our customers despite particularly difficult weather conditions throughout the quarter. We are excited for the future and expect our synergies to build as we continue to integrate our operations."
Merger Integration
Since closing the merger on December 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments:
Launched the world's largest codeshare, offering customers improved access to the company's global network by allowing them to book flights on both airlines' networks
Provided reciprocal benefits for airport lounge and frequent flyer elite members, including priority check-in, waiving fees for checked bags, complimentary access to preferred seats, priority security lines, early boarding and priority baggage delivery
Enabled AAdvantage® and Dividend Miles® members to earn and redeem miles when traveling across either airline's network
Joined operations at 58 airports, including Phoenix and Miami hubs
Moved US Airways into the oneworld alliance on March 31 and to the trans-Atlantic joint venture with American, British Airways, Iberia and Finnair on April 3
Aligned award travel options, checked baggage policies and inflight services for First and Business Class customers
Announced Sabre as the new Passenger Services System for the combined company
Closed the sale of the slot divestitures required by the U.S. Department of Justice at Ronald Reagan Washington National Airport (DCA). In total, the company received $381 million in cash from the DCA sales and the sale of slots at New York's LaGuardia (LGA) Airport, which closed in the fourth quarter 2013.
Revenue and Cost Comparisons
On a combined basis, total revenues in the first quarter were a record $10 billion, up 5.6 percent versus the first quarter 2013 on a 2.0 percent increase in total available seat miles (ASMs). Driven by a record yield of 17.03 cents, up 3.2 percent year-over-year, combined consolidated passenger revenue per ASM (PRASM) was also a record for the first quarter at 13.67 cents, up 2.9 percent versus the first quarter 2013.
Total combined operating expenses in the first quarter were $9.3 billion, down 0.3 percent over first quarter 2013. Combined first quarter mainline cost per available seat mile (CASM) was 13.50 cents, down 2.7 percent on a 2.7 percent increase in mainline ASMs versus first quarter 2013. This cost improvement was largely due to a 4.8 percent decrease in year-over-year mainline fuel prices. Excluding special charges, fuel and profit sharing, mainline CASM was up 4.0 percent compared to the first quarter 2013, at 8.96 cents. Regional CASM excluding special charges and fuel was 16.62 cents, up 5.0 percent on a 3.2 percent decrease in regional ASMs versus first quarter 2013.
As of March 31, 2014, American had approximately $10.6 billion in total cash and short-term investments, of which $947 million was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $750 million of the company's unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.32 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars and approximately $45 million valued at 10.7 bolivars, with the rate depending on the date the company submitted its repatriation request to the Venezuelan government.
In the first quarter of 2014, the Venezuelan government announced that a newly-implemented system (SICAD I) will determine the exchange rate (which fluctuates as determined by weekly auctions and at March 31, 2014 was 10.7 bolivars to the dollar) for repatriation of cash proceeds from ticket sales after January 1, 2014, and introduced new procedures for approval of repatriation of local currency. The company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. The company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for potential impairment.
Since the merger, the company paid $542 million in tax withholdings for employees in lieu of issuing shares of common stock as compensation as permitted under the Plan of Reorganization, thereby reducing the number of shares expected to be issued under the Plan by approximately 20 million. Additionally, the company has elected to utilize the cash settlement feature for the remaining $22 million principal amount of US Airways Group 7.25% convertible notes due May 15, 2014, which will further reduce diluted shares by approximately 4 million shares.
Special Items
In the first quarter, the company recognized a combined total of $78 million in net special credits, including:
$137 million in net special credits consisting primarily of the gain on the sale of slots at Reagan National Airport offset in part by integration and merger-related expenses
$47 million in non-operating special charges due primarily to non-cash interest accretion on bankruptcy settlement obligations
$8 million in non-cash deferred income tax provision related to certain indefinite-lived intangible assets
$4 million in regional non-operating charges
Additional Integration Related Developments
Distributed $11 million to employees for baggage handling and on-time performance in the month of January; this distribution of $100 per employee is part of the company's Triple Play program which measures on-time arrivals and baggage performance as reported in the DOT's Air Travel Consumer Report (ATCR)
Conducted first joint Captain Leadership Training with newly promoted captains from both airlines
On April 9, Piedmont flight attendants ratified a new five-year Collective Bargaining Agreement
Opened a new Admirals Club lounge at the company's Philadelphia (PHL) hub
Fleet/Network Developments
As part of its plan to modernize its fleet by replacing older aircraft with newer, more fuel-efficient aircraft, the company inducted 12 new Airbus A321 aircraft into service between New York's John F. Kennedy International Airport (JFK) and Los Angeles International Airport (LAX), and JFK and San Francisco International Airport (SFO). American is now the only U.S. carrier to offer three classes of service between these key markets.
The company also took delivery of one Airbus A330-200 aircraft, five Boeing 737-800 aircraft and one Boeing 777-300 aircraft during the first quarter.
Revealed new Boeing 767-300 and 777-200ER cabin retrofits, which feature lie-flat seats with direct aisle access in Business Class
In April 2014, the company exercised its option to purchase (and thus terminated its existing lease financing arrangements) for 62 Airbus A320 family aircraft scheduled to be delivered between first quarter 2015 and third quarter 2017. In connection with this decision, the company also exercised its right to convert firm orders for 30 Airbus A320 family NEO aircraft (scheduled to be delivered in 2021 and 2022) to options to acquire such aircraft.
Top Copyright Photo: Rolf Wallner/AirlinersGallery.com. American Airlines' Boeing 767-323 ER N346AN (msn 33085) taxies at Zurich.
Bottom Copyright Photo: Jay Selman/AirlinersGallery.com. US Airways is now planning to operate the last Boeing 737 revenue flight on August 18 at the Charlotte hub. Boeing 737-4B7 N450UW (msn 24933) arrives back at CLT.
United Airlines reports a first quarter net loss of $489 million
United Airlines (Chicago) today reported a first quarter 2014 net loss of $489 million, or $1.33 per share, excluding $120 million of special items. Including special items, UAL reported a first quarter 2014 net loss of $609 million, or $1.66 per share.
Historic severe weather increased United's first quarter loss by approximately $200 million.
United's consolidated passenger revenue per available seat mile (PRASM) decreased 2.0 percent in the first quarter of 2014 compared to the first quarter of 2013. Weather-related cancellations reduced first quarter 2014 consolidated PRASM by approximately 1.5 percentage points.
First quarter 2014 consolidated unit costs (CASM) increased 1.0 percent year-over-year. First-quarter 2014 consolidated CASM, excluding special charges, third-party business expenses, fuel and profit sharing, increased 3.1 percent year-over-year on a consolidated capacity reduction of 0.3 percent.
UAL ended the first quarter with $6.0 billion in unrestricted liquidity.
"This quarter's financial performance is well below what we can and should achieve. We are taking the appropriate steps with our operations, network, service and product to deliver significantly better financial results," said Jeff Smisek, UAL's chairman, president and chief executive officer. "The entire United team is sharply focused on accomplishing the goals we have laid out for long-term financial success."
First Quarter Revenue and Capacity
For the first quarter of 2014, total revenue was $8.7 billion, a decrease of 0.3 percent year-over-year. First-quarter consolidated passenger revenue decreased 2.3 percent to $7.4 billion, compared to the same period in 2013. Ancillary revenue per passenger in the first quarter increased 7.6 percent year-over-year to more than $21 per passenger. First-quarter cargo revenue decreased 7.9 percent versus the first quarter of 2013 to $209 million. Other revenue in the first quarter increased 18.0 percent year-over-year to $1.1 billion, in large part due to an agreement to sell jet fuel to a third party.
Consolidated revenue passenger miles and consolidated available seat miles each decreased 0.3 percent year-over-year for the first quarter, driven largely by adverse weather, resulting in a first quarter consolidated load factor of 81.1 percent.
First quarter 2014 consolidated PRASM and consolidated yield each decreased 2.0 percent compared to the first quarter of 2013.
"We recognize that we have lagged on revenue and are taking the necessary actions to remedy that," said Jim Compton, UAL's vice chairman and chief revenue officer. "Our employees pulled together during the unprecedented extreme winter weather that marked this quarter. We appreciate their hard work, which resulted in higher customer satisfaction scores than for the same period last year."
First Quarter Costs
Total operating expenses increased $60 million, or 0.7 percent, in the first quarter versus the same period in 2013. Excluding special charges, first-quarter total operating expenses increased $100 million, or 1.1 percent, year-over-year.
First quarter consolidated CASM increased 1.0 percent year-over-year. First quarter consolidated CASM, excluding special charges, third-party business expense, fuel and profit sharing, increased 3.1 percent compared to the first quarter of 2013. Third-party business expense was $193 million in the first quarter of 2014.
"We are making good progress in reducing costs and delivering sustainable efficiencies, all while improving the product for our customers," said John Rainey, UAL's executive vice president and chief financial officer. "While we are not pleased with our first-quarter financial results, we are building a strong foundation that will result in improved financial performance."
Liquidity and Cash Flow
UAL ended the first quarter with $6.0 billion in unrestricted liquidity, including $1.0 billion of undrawn commitments under a revolving credit facility. The company generated $694 million of operating cash flow in the first quarter. During the first quarter, the company had gross capital expenditures of $737 million, excluding fully reimbursable projects. The company made debt and capital lease principal payments of $637 million in the first quarter.
Why is United Airlines losing money?
Read the analysis by Bloomberg Businessweek: CLICK HERE
Copyright Photo: Rolf Wallner/AirlinersGallery.com. Boeing 767-424 ER N76064 (msn 29459) touches down at Zurich.
Hawaiian Holdings reduces its first quarter net loss to $5.1 million
Hawaiian Holdings, Inc. (Honolulu), parent company of Hawaiian Airlines, Inc. (Honolulu), today reported its financial results for the first quarter of 2014.
Operating income grew to $10.0 million in the first quarter compared to an operating loss of $11.9 million in the prior year period.
GAAP net loss in the first quarter of $5.1 million or $(0.10) per diluted share compared to a loss of $17.1 million in the prior year period or $(0.33) per diluted share.
Adjusted net loss, reflecting economic fuel expense, in the first quarter of $0.9 million or $(0.02) per diluted share compared to $14.8 million in the prior year period or $(0.29) per diluted share.
Unrestricted cash, cash equivalents and short-term investments of $479 million compared to $438 million in the prior year period.
Liquidity and Capital Resources
As of March 31, 2014 the Company had:
Unrestricted cash, cash equivalents and short-term investments of $479 million.
Available borrowing capacity of $69.5 million under Hawaiian's Revolving Credit Facility.
Outstanding debt and capital lease obligations of approximately $940 million consisting of the following:
$570 million outstanding under secured loan agreements to finance a portion of the purchase price for nine Airbus A330-200 aircraft.
$150 million outstanding under secured loan agreements to finance a portion of the purchase price for 15 Boeing 717-200 aircraft.
$108 million in capital lease obligations to finance the acquisition of an Airbus A330-200, two Boeing 717-200 aircraft and aircraft-related equipment.
$34 million outstanding under floating rate notes for two Boeing 767-300 ER aircraft (above).
$78 million of outstanding Convertible Senior Notes.
Copyright Photo: Jacques Guillem Collection/AirlinersGallery.com.
A 16-year boy survives a flight from San Jose to Honolulu in the wheel well!
A 16-year old boy somehow survived a 5 and a half hour flight from San Jose, California to Honolulu, Hawaii. The boy from Santa Clara, California hopped the fence at Norman Y. Mineta San Jose International Airport (SJC) and climbed into the wheel well of a Hawaiian Airlines (Honolulu) Boeing 767-300 departing for Honolulu. Running away from home according to ABC News, the boy somehow survived the long flight and the color temperatures. The airliner was flying over the Pacific Ocean at 38,000 feet. On arrival at HNL, he jumped down and started walking around the tarmac!
Read the full report: CLICK HERE
Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-3CB ER N592HA (msn 33468) of Hawaiian Airlines taxies to the runway at Seattle/Tacoma.
Hawaiian and Air China sign a codeshare agreement
Hawaiian Airlines (Honolulu) has announced the signing of a codeshare agreement with Air China (Beijing), China's exclusive national flag carrier, that leverages the reach of their respective hubs in Honolulu and Beijing to offer more options and a more streamlined experience for customers traveling to further destinations. The new partnership takes effect following Hawaiian's launch of its three-times weekly nonstop service to Beijing on April 16.
Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-33A N591HA (msn 33423) approaches the runway at Los Angeles International Airport (LAX).
Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-39L ER B-2033 (msn 38673) arrives at the Beijing hub.
American Airlines and US Airways issue their fleet plans
American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) has issued its new fleet update (see below) for 2014. Overall the fleet will grow by only three aircraft this year. The Group will take delivery of 83 new mainline aircraft during 2014, namely 10 Airbus A319s, 42 A321s, three A330-200s, 20 Boeing 737-800s, two 787-8s and six 777-300s (more Airbus aircraft than Boeing aircraft). The Group expects to retire during 2014 26 McDonnell Douglas DC-9-82/83s (MD-80s), 14 Boeing 737-400s, 22 757-200s, 13 767-200s and five Airbus A320s.
The last eight Boeing 737-400s being operated by US Airways (top) are expected to be retired before the end of the third quarter (September 30).
On the regional side, the Group is significantly reducing its Embraer ERJ 140 fleet but it will also operate a large amount of inefficient 50-seat Bombardier CRJ200s (138) and Embraer ERJ 145s (118).
Here is the full report:
In addition, according to Airline Route, American Airlines and US Airways will begin assigning certain routes to either American or US Airways:
Effective June 1: American Airlines routes to be operated entirely by US Airways:
Charlotte – Chicago (O'Hare)
Charlotte – Miami
Los Angeles – Phoenix
Effective July 2, the following American routes will be operated by US Airways:
Miami – Detroit
Miami – New Orleans
Miami – Raleigh
Miami – Tampa
Effective July 2, the following US Airways routes will be operated by American:
Phoenix – Detroit
Phoenix – Newark
Phoenix – Orange County
Phoenix – Seattle
Top Copyright Photo: Bruce Drum/AirlinersGallery.com. A significant milestone is approaching quickly. US Airways has had a long association with the Boeing 737 and the last 737-400 is expected to be retired before the end of September according to this fleet update. Boeing 737-4B7 N433US (msn 24555) taxies to the runway at Charlotte Douglas International Airport (CLT).
Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. American is quickly replacing the older Boeing 767-200 ERs currently being operated between New York (JFK) and Los Angeles with newer Airbus A321s. The last AA 767-200 is expected to be retired on May 7 according to ch-aviation although the type will continue with US Airways into 2015. American Airlines' Boeing 767-223 ER N335AA (msn 22333) departs from Los Angeles bound for New York (JFK).
Mega Maldives Airlines to expand its fleet and destinations
MEGA Global Air Services (Maldives) Pvt. Ltd. (dba Mega Maldives Airlines) (Male) and it's offshore partner, MG Holdings Limited, signed a Memorandum of Understanding (MOU) with BB Airways Pvt. Ltd. of Nepal, whereby the companies agreed to collaborate on developing flights and sharing of resources for cost effective operation of both airlines. The two airlines plan to develop operations both within the SAARC region and beyond.
The cooperation between BB Airways and Mega Maldives Airlines will help both parties expand and open new markets.
According to CAPA, Mega Maldives plans to add four additional Boeing 757-200s and one additional Boeing 767-300 and add its first routes to the Middle East and Southeast Asia. The second phase of expansion will see the possible launch of services to Australia and Europe using a second type of widebody aircraft.
Mega Maldives currently operates regular flights throughout the year from Male to Beijing, Shanghai and Hong Kong. These operations include 6 to 18 round trips per month from these cities depending on the time of the year (see map below).
Mega Maldives also operates seasonal routes from Male to Gan, Chengdu, Chongqing, Hangzhou and Seoul (Incheon). Due to the seasonality of demands on these routes, Mega Maldives does not normally operate flights to these destinations in mid-December to early January and between March and May.
According to the privately owned airline, "Mega Maldives Airlines is the privately owned international airline of the Maldives and serves the Chinese market with the greatest number of frequencies of any nonstop carrier. The airline operates Boeing 767 and 757 aircraft in a multi-class configuration. Mega, founded in 2010, carries up to 30% of the Chinese market to Maldives and up to 14% of all traffic to the Maldives. The airline plans to take delivery of several additional aircraft and expand to several new points over the coming year."
Copyright Photo: Paul Denton/AirlinersGallery.com. Boeing 767-3P6 ER 8Q-MEG (msn 24496) of Mega Maldives Airlines prepares to depart from its Male base.
Current Route Map: