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Friday November 13, 2009

TAM reported third-quarter net income of BRL213.2 million ($124.2 million), reversed from a loss of BRL465.5 million in the year-ago period, citing "a strong recovery" in domestic demand and lower fuel costs. It said domestic demand surged 26% year-over-year as the country's economy improved and business passengers returned. Fuel expenses lowered 36.5%. It noted that 39% of its revenue and 40%-50% of its costs are linked to foreign currencies, meaning that the real's resurgence against the US dollar (10% improvement in the quarter) had "minimal" overall impact. But it expects long-term dividends from the real's higher value owing to a "strengthening of demand for Brazilians flying abroad."

Third-quarter revenue decreased 17.2% to BRL2.38 billion while expenses dropped 14.2% to BRL2.32 billion, producing operating income of BRL60.7 million, down 64.5% from a BRL171 million operating profit last year, when heavy fuel hedge losses and other charges factored in. Traffic rose 7.6% to 11.2 billion RPKs on an 11.4% lift in capacity to 16.08 billion ASKs, producing a load factor of 69.7%, down 2.5 points.

Chinese airlines are facing the prospect of canceling once-profitable domestic routes owing to increasing competition from high-speed rail. Spring Airlines, the country's most successful LCC, has stopped flying from Shanghai to both Zhengzhou and Wuhan because it was losing passengers to the train. "Currently our solution is to avoid opening short-haul routes that are shorter than 1,000 km.," a Spring spokesperson said.Sichuan Airlines will shutter its Chengdu-Chongqing service on Nov. 16 as loads have fallen below 50%.

China Southern Airlines Chairman Si Xianmin recently admitted that high-speed rail is a more attractive option for passengers because of its better safety record, convenience and lower fares. "We have more than 160 domestic routes, with about 38 competing against high-speed rail. Most of China's big cities and secondary cities will be connected by high-speed rail by 2020, which will have a big impact on domestic carriers," he said. In response, CZ intends to expand its international network and allocate more capacity to profitable international routes. It plans to raise its proportion of international routes from the current 17% to 20% in the next 3-5 years.

by Katie Cantle

RwandAir CRJ100ER struck a building at Kigali Airport after landing yesterday, killing one of the 10 passengers onboard. According to the Flight Safety Foundation's Aviation Safety Network, the aircraft departed KGL bound for Entebbe but turned around 2 min. after takeoff "because of unspecified technical problems." It landed safely and taxied to its parking spot in front of an airport lounge, at which point the engines still were at "100% power," according to the RwandAir COO. The CRJ moved forward, knocking over fences and hitting the concrete wall of the building. The nose gear collapsed and "the nose was buried inside the building up to and including the forward passenger doors," ASN said. The aircraft was powered by two CF34-3A1s and first flew in 1997.

Indian government will offer financial aid to Air India if the airline is able to realize INR20 billion ($429.8 million) in cost cuts and revenue increases by March, Civil Aviation Minister Praful Patel told reporters yesterday. "We are talking of an equity infusion. We are broadly looking at an equity infusion linked to monthly performance parameters. We are only looking at it until March," Patel said, according to reports. "This is not the total equity infusion which is being looked at for Air India. We are also going to see how it performs on a monthly basis to be able to finally take a call at the end of March as to what will be the final support which the government will provide." AI has offered 10 long-haul aircraft up for lease. It has invited bids to lease out three 777-200LRs, three 747-400s (ACMI only) and three A310-300 freighters, according to the Press Trust of India. This week it said it lost INR55.48 billion in its fiscal year ended March 31.

S7 Airlines this week dismissed rumors that surface regularly in the Russian media that it will be absorbed by Aeroflot and confirmed that it is on track to join oneworld in November 2010. "I'm sure Aeroflot would like to acquire us and our network, but we are not for sale," Credit Risk and Alliance Manager Ilya Alexandrovskiy stressed to ATWOnline at the Mexicana oneworld joining event in Mexico City. S7, which was technically bankrupt in February but since has restructured its debt, is "operational in excellent shape," Alexandrovskiy added. "The decision last winter to ground our Tupolev and Ilyushin fleet and operate only Western-built aircraft allowed us to be profitable," he noted, stating that S7 was profitable for the nine-month period ended Sept. 30. Traffic in the first nine months fell 15%-20% "in line with the Russian market." Implementation of oneword joining requirements is progressing "well," he said. "We are on track to formally join in November next year."

by Cathy Buyck

Emirates President Tim Clark elaborated on the A380 delays mentioned Wednesday by Chairman Ahmed bin Saeed Al Maktoum, telling the DPA news agency that three aircraft scheduled to arrive in November and December now will be delivered in December and January. At the end of 2010 EK will operate 15 A380s instead of the planned 20 and it expects to take 11-12 aircraft in both 2012 and 2013. Delivery of its order for 58 should be finished by 2017. Clark also said EK is evaluating converting options on additional planes in order to take advantage of newly open delivery positions and that its Dubai-Incheon A380 service will begin Dec. 14.

Sukhoi Civil Aircraft said it will miss the delivery date of the first Superjet 100 that was scheduled for the end of 2009. Aircraft is headed to launch customer Aeroflot, but Sukhoi said this week that it will "not be able to supply its new regional plane, Superjet 100, to customers before the end of 2009." No new date was announced. The Moscow Times cited industry sources who said that a certification delay was the cause of the latest delay. SU had expected delivery in December and planned to take one per month for a total of 30. An official with Sukhoi's parent company, United Aircraft Corp., warned in August that the first jets might not be delivered until 2010.

Continental Airlines will issue $644.4 million in equipment notes to finance eight Boeing aircraft already in operation and 11 planes scheduled for delivery in January-June 2010, it said in a filing with the US Securities and Exchange Commission.

Finnair said negotiations with Finnair Catering employees represented by the Finnish Aviation Union have failed to produce the required €5 million ($7.5 million) in savings and that 60 employees now will be made redundant in a "first stage." Afterward, "a reorganization of operations will be considered to achieve additional savings, and a review of structural solutions will be initiated," the airline said. Catering employs some 650 people. The carrier said it also is exploring solutions with its Northport ground handling subsidiary and Finnair Cargo Operations.

Indian airlines carried 4 million passengers in October, up 26.7% from the year-ago month. Passenger traffic through the year's first 10 months rose 3.3% year-over-year to 36 million. Market share was divided as follows: Jet Airways and JetLite 27.7%, Kingfisher Airlines 20.7%, Air India 18.6%, IndiGo 13.6%, SpiceJet 12.4%.

Finnair flew 1.72 billion RPKs in October, a 12.3% decline from the year-ago month. Capacity fell 12.9% to 2.18 billion ASKs and load factor was up 0.5 point to 78.7%.

Aer Lingus flew 1.32 billion RPKs in October, down 8.9% year-over-year, against a 10.4% cut in capacity to 1.77 billion ASKs. Load factor rose 1.3 points to 74.6%.

Gol flew 2.49 billion RPKs in October, up 38.9% year-over-year. Capacity climbed 9.6% to 3.46 billion ASKs, lifting load factor 15.1 points to 71.9%.

Travelport announced a new long-term, full-content GDS agreement with British Airways that will make all the carrier's fares and inventory available on both Galileo and Worldspan until April 2013. The companies said they will "work together in the coming months" to provide travel agents the ability to offer a la carte extras through the GDS.